Federal Reserve Bulletin, 2002-01

Volume 88 • Number 1 • January 2002 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

Discontinuation of Reprints in the Federal Reserve Bulletin Beginning with this issue, the following reprints will no "Treasury and Federal Reserve Foreign Exchange Operalonger appear in the Bulletin: "Industrial Production and tions," and "Domestic Open Market Operations." For Capacity Utilization," "Testimony of Federal Reserve Offi- information about the availability of these documents, see cials," "Minutes of the Federal Open Market Committee," the "Announcements" section on page 20. 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

Table of Contents L SURVEY OF FINANCE COMPANIES, 2000 Elimination of selected reprints from Federal Reserve Bulletin. Against a backdrop of robust economic activity, the finance company sector expanded briskly over Publication of 2001 update of Bank Holding the second half of the 1990s. The value of receiv- Company Supervision Manual. ables held by finance companies in the United Enforcement actions. States rose nearly 50 percent, or about 11 percent a year, between 1996 and 2000. Business lending Board organizational and staff changes. remained finance companies' major line of activity; the importance to the sector of consumer 25 LEGAL DEVELOPMENTS lending and leasing declined slightly, and the Various bank holding company, bank service importance of real estate lending rose a bit. These corporation, and bank merger orders; and pendand other findings from the Federal Reserve's ing cases. mid-2000 benchmark survey of finance companies, as well as developments in the sector since 64 MEMBERSHIP OF THE BOARD OF that time, are discussed in this article. GOVERNORS OF THE FEDERAL RESERVE SYSTEM, 1913-2001 15 ANNOUNCEMENTS List of appointive and ex officio members. Federal Open Market Committee directive and discount rate changes. AI FINANCIAL AND BUSINESS STATISTICS Resignation of Governor Edward W. Kelley, Jr. These tables reflect data available as of November 26, 2001. Oath of office taken by new Board Governors Susan Schmidt Bies and Mark W. Olson. A3 GUIDE TO TABLES Adoption of revised payment system risk policy. A4 Domestic Financial Statistics Final rule amending Regulation Z (Truth in A42 Domestic Nonfinancial Statistics Lending) regarding the Home Ownership and A50 International Statistics Equity Protection Act (HOEPA) and predatory lending. A63 GUIDE TO STATISTICAL RELEASES AND TABULAR PRESENTATION Proposed revisions to staff commentary on Regulation Z (Truth in Lending) regarding consumer credit disclosures. A66 INDEX TO STATISTICAL TABLES Interagency final rule on capital requirements for A68 BOARD OF GOVERNORS AND STAFF asset securitizations. Interagency guidance on compliance with con- A70 FEDERAL OPEN MARKET COMMITTEE AND sumer privacy regulations. STAFF; ADVISORY COUNCILS Results of study on retail payment system. A72 FEDERAL RESERVE BOARD PUBLICATIONS Annual adjustment of trigger fee for additional mortgage loan disclosures. A74 MAPS OF THE FEDERAL RESERVE SYSTEM Board discount rate meeting minutes. A76 FEDERAL RESERVE BANKS, BRANCHES, Anthrax tests at Board. AND OFFICES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Survey of Finance Companies, 2000 Karen E. Dynan, Kathleen W. Johnson, and Sam- benchmarks for the System's monthly report on the uel M. Slowinski, of the Board's Division of Research outstanding accounts receivable of finance compaand Statistics, prepared this article with assistance nies and provide a comprehensive update on these from Greg D. Grothe and Hank Leddon. companies' sources of funds. This information in turn becomes an important input to the estimates of Finance companies are important providers of credit total consumer credit and the U.S. flow of funds to households and businesses. For households, they accounts produced at the Federal Reserve Board. originate loans and leases to finance the purchase of Summarized in this article are the results of the most consumer goods such as automobiles, furniture, and recent survey, which collected finance company household appliances; they also extend personal cash balance sheet information as of June 30, 2000. loans and loans secured by junior liens on real estate, (Details on sampling procedures are given in appensuch as home equity loans. For businesses, they dix A, and complete balance sheet data are provided supply short- and intermediate-term credit (includ- in table B.l.) ing leases) for such purposes as the purchase of equipment and motor vehicles and the financing of inventories.1 FINANCE COMPANY RECEIVABLES With roughly $1 trillion in financial assets as of mid-2000, the finance company sector occupies an The total value of receivables owned or securitized intermediate position among the sectors that typically by finance companies increased nearly 50 percent lend to households and businesses: In terms of assets, between 1996 and 2000, or approximately 11 perit is more than twice as large as the credit union cent a year on average (table l).2 The gain occurred sector, about the same size as the thrift sector, but against a backdrop of brisk economic expansion, only about one-fifth as large as the commercial bank- with nominal gross domestic product increasing at ing sector. The approximately 1,000 companies that an average annual rate of about 6 percent over the make up the sector (down from about 1,200 in 1996) period. Business lending remained the largest major range in size from very small to very large and line of activity, accounting for just under half of all include the "captive" subsidiary finance companies receivables. There was apparently some shift between of motor vehicle manufacturers. The companies tend the other two major lines of activity, however. The to be diversified, with more than 90 percent of the share of total receivables accounted for by consumer sector's assets as of mid-2000 held by companies that lending and leasing declined 2 percentage points (to did not concentrate in any one type of receivable. The 39 percent); that decline was matched by a compalarger firms are more likely to be diversified; of the rable rise in the share accounted for by real estate small firms that specialize, most focus on short- and loans (to 17 percent). With most real estate receivintermediate-term business receivables. The sector is ables at finance companies being home equity loans, quite concentrated, and has been for some time, with this shift may indicate that households have been the twenty largest companies accounting for more substituting lower-cost, collateralized home equity than two-thirds of total receivables (see box "Indus- loans for high-cost, uncollateralized consumer loans try Concentration"). as a source of credit. The Federal Reserve System has surveyed the Finance companies sometimes securitize their assets and liabilities of finance companies at roughly loans by pooling them and selling them to a five-year intervals since 1955. The surveys provide bankruptcy-remote entity, which then sells securities backed by the revenue stream generated by the 1. For this article, finance companies are defined as financial loans.3 A securitized loan is removed from the institutions—other than commercial banks, credit unions, savings and loan associations, cooperative banks, or savings banks—the majority of whose assets are in one or more of the types of accounts receivable 2. Unless otherwise noted, all statistics cited are as of June 30 of described above. (An "account receivable," sometimes referred to the year indicated. as simply a receivable, is a balance due from a debtor on a current 3. A "bankruptcy-remote" entity is one whose assets will not enter account.) receivership if the originating finance company declares bankruptcy. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • January 2002 1. Total receivables at finance companies, by category, Industry Concentration June 30, 1996 and 2000 Amount Growth, Overall, concentration in the finance company industry (billions 1996 to 2000 Sh ( a p re e rc o e f n t t o ) tal was about unchanged between the 1996 and 2000 sur- CCaatteeggoorryy of dollars) (percent) veys, marking a break in the steady trend toward consoli- Cumu- Average 1996 2000 lative annual 1996 2000 dation seen in earlier surveys. Total receivables at the twenty largest firms (based on total net assets) repre- Total 749.1 1,119.6 49.5 10.6 100.0 100.0 sented 69 percent of total industry receivables in mid- Owned 626.7 921.5 47.0 10.1 83.7 82.3 2000, compared with 70 percent in mid-1996 (table). Securitized 122.4 198.1 61.9 12.8 16.3 17.7 Owned business receivables became markedly less Business 341.3 502.5 47.2 10.2 45.6 44.9 concentrated, with the twenty largest firms accounting for Owned 305.7 441.9 44.5 9.6 40.8 39.5 Securitized 35.6 60.6 70.2 14.2 4.8 5.4 11 percentage points less of all such receivables in 2000 than they had four years earlier. The underlying data Consumer 303.9 431.8 42.1 9.2 40.6 38.6 Owned 240.6 321.8 33.8 7.5 32.1 28.7 suggest that the shift in owned business receivables Securitized 63.3 110.0 73.6 14.8 8.5 9.8 toward smaller firms was attributable primarily to a siz- Real estate 103.8 185.3 78.5 15.6 13.9 16.6 able decline in the concentration of business (non-motor Owned 80.4 157.7 96.3 18.4 10.7 14.1 vehicle) equipment receivables. As smaller companies Securitized 23.5 27.5 17.4 4.1 3.1 2.5 are less likely than large ones to identify themselves as NOTE. In this and subsequent tables, details may not sum to totals, and diversified, the decline in the concentration of owned calculations may not yield the percentages shown, because of rounding. business equipment receivables may suggest that specialization has become an increasingly efficient way of pro- finance company's balance sheet, although the comviding funds for this type of investment. pany typically continues to collect the service pay- The other major components of finance company ment and would bear the cost of a default.4 receivables became more concentrated between 1996 and After rising rapidly in the early 1990s, when securi- 2000. The shares of owned consumer and real estate tization was a relatively new practice, the proporreceivables accounted for by the twenty largest firms tion of finance company loans that was securitized moved up 3 percentage points and 4 percentage points, increased only moderately in the late 1990s, from respectively. The concentration of securitized receivables 16 percent in 1996 to 18 percent in 2000. rose sharply, with the share of the twenty largest firms 12 percentage points higher in 2000 than in 1996. The concentration of securitized receivables also rose impressively between the 1990 and 1996 surveys. The upward Business Receivables trend suggests that the relative attractiveness of the products of the larger securitization programs has risen over Finance companies owned or had securitized time, possibly because investors have increasingly associ- $503 billion in business receivables as of June 30, ated these more-established programs with lower risk, | 2000, accounting for roughly 8 percent of total nonfinancial business credit and close to 22 percent of short- and intermediate-term business credit (table 2). Total receivables at finance companies, by category, Between 1996 and 2000, finance company business June 30, 1996 and 2000 .ivt .vreceivables increased at an average annual rate of Billions of dollars except as noted 10 percent, approximately matching the rates of Twenty largest finance companies1 growth of alternative sources of short-term business AAllll ffiinnaannccee Share of all finance, such as bank loans, and longer-term instruccoommppaanniieess finance company CCCaaattteeegggooorrryyy Amount receivables ^ ments, such as corporate bonds and mortgages. As a (percent) result, finance companies maintained their share of 1996 2000 1996 2000 1996 2000 the market for nonfinancial business credit over the intrasurvey period. Total 749.1 1,119.6 524.9 770.3 70.1 68.8 Finance companies appear to be an important Owned 626.7 921.5 459.1 639.9 73.3 69.4 Business 305.7 441.9 194.5 232.0 63.6 52.5 source of funds for small businesses—firms with Consumer 240.6 321.8 203.5 281.8 84.6 87.6 Real estate 80.4 157.7 61.1 126.1 76.0 79.9 Securitized 122.4 198.1 65.8 130.4 53.8 65.8 |B||| 4. In most securitization deals, finance companies retain the MEMO Total net assets .. 815.4 1,259.0 615.9 962.5 75.5 76.4 "excess spread"—the difference between the yield on the loans and such expenses as the investor coupon, servicing fee, and losses associ- 1. Based on total net assets. ated with defaults. As a result, they typically retain the credit risk of securitized portfolios. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Survey of Finance Companies, 2000 3 2. Credit to nonfinancial businesses from all domestic sources, by instrument, June 30, 1996 and 2000 Amount Growth, 1996 to 2000 Share of category Share of total (billions of dollars) (percent) (percent) (percent) IInnssttrruummeenntt Average 1996 2000 Cumulative 1996 2000 1996 2000 annual All credit market instruments 4,276.2 6,337.4 48.2 10.3 100.0 100.0 100.0 100.0 Short- and intermediate-term instruments 1,598.8 2,333.2 45.9 9.9 100.0 100.0 37.4 36.8 Bank loans n.e.c 835.0 1,235.5 48.0 10.3 52.2 53.0 19.5 19.5 Other loans and advances 582.0 800.8 37.6 8.3 36.4 34.3 13.6 12.6 Finance company receivables 341.3 502.5 47.2 10.2 21.3 21.5 8.0 7.9 Commercial paper 181.7 296.8 63.3 13.1 11.4 12.7 4.2 4.7 Long-term instruments 2,677.4 4,004.3 49.6 10.6 100.0 100.0 62.6 63.2 Corporate bonds 1,405.0 2,144.5 52.6 11.2 52.5 53.6 32.9 33.8 Mortgages 1,135.3 1,706.4 50.3 10.7 42.4 42.6 26.6 26.9 Municipal securities 137.1 153.4 11.9 2.8 5.1 3.8 3.2 2.4 n.e.c. Not elsewhere classified. fewer than 500 employees. In 1998, about 14 percent Although the growth of equipment loans and leases of all small businesses, and roughly 30 percent of tends to be correlated with the growth of business small businesses with more than 100 employees or investment in equipment, finance company equipannual sales totaling more than $10 million, used ment loans and leases expanded at an average annual finance companies for loans, leases, and financial rate of 9 percent between 1996 and 2000, somewhat management. Small businesses used finance compa- less than the 11 percent average annual increase in nies mainly for motor vehicle loans and capital investment in business equipment and software leases, areas in which finance companies specialize. (excluding motor vehicles) over the period. For com- Small businesses were only slightly less likely to use parison, commercial paper and commercial and a finance company than a commercial bank to finance industrial loans extended by commercial banks— their motor vehicle purchases and were equally likely other sources of short- and intermediate-term busito use a finance company or a commercial bank for ness debt that may be used to finance equipment their capital leases.5 investment—rose at average annual rates of 13 per- Although the overall importance of finance com- cent and 12 percent, respectively, over the period. panies in the business credit market apparently Equipment leases, which account for the lion's remained stable between 1996 and 2000, there were share of equipment receivables at finance companies, a few shifts in the composition of finance company increased at an average annual rate of about 9 percent business lending. These shifts included movements between 1996 and 2000.6 Despite the considerable from owned toward securitized equipment loans, size of their equipment lease portfolios, finance comfrom business financing for investment in equipment panies as a whole generally keep these receivables on and motor vehicles toward other types of business their balance sheets rather than securitize them. finance, and from loans to purchase business motor Indeed, only about 3 percent of equipment leases vehicles toward leases. were in securitized pools in 2000. Nonetheless, some small finance companies securitize a large portion of their equipment lease portfolios. Equipment Finance Overall, equipment loans rose at an average annual rate of 8 percent between surveys. Although securi- Loans and leases for business equipment (other than tized equipment loans increased much faster (34 permotor vehicles) accounted for close to 60 percent of cent annually), they continue to account for only a total finance company business receivables in 2000 small share of total equipment receivables—about (table 3). Such funding typically supports business 6 percent in 2000. investment in such items as construction equipment, aircraft, and computers and other office machines. 6. Most equipment and business motor vehicle leases extended by finance companies are capital leases. Most capital leases are quite long 5. Marianne P. Bitler, Alicia M. Robb, and John D. Wolken, relative to the useful life of the leased item, and although the finance "Financial Services Used by Small Businesses: Evidence from the company retains the title to the item during the leasing period, lease 1998 Survey of Small Business Finances," Federal Reserve Bulletin, payments are generally applied toward its eventual purchase. In this vol. 87 (April 2001), pp. 183-205. way, leases are similar to equipment and business motor vehicle loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

4 Federal Reserve Bulletin • January 2002 3. Business receivables at finance companies, by category, June 30, 1996 and 2000 Amount Growth, 1996 to 2000 Share of category Share of total (billions of dollars) (percent) (percent) (percent) CCaatteeggoorryy Average 1996 2000 Cumulative 1996 2000 1996 2000 annual Total 341.3 502.5 47.2 10.2 100.0 100.0 100.0 100.0 Equipment 205.0 289.9 41.4 9.1 100.0 100.0 60.1 57.7 Leases 141.9 203.4 43.3 9.4 69.2 70.1 41.6 40.5 Owned 137.9 196.9 42.8 9.3 67.3 67.9 40.4 39.2 Securitized 4.1 6.4 58.0 12.1 2.0 2.2 1.2 1.3 Loans 63.0 86.6 37.3 8.3 30.8 29.9 18.5 17.2 Owned 58.2 70.7 21.6 5.0 28.4 24.4 17.0 14.1 Securitized 4.9 15.8 225.0 34.3 2.4 5.5 1.4 3.1 Motor vehicle 89.2 105.9 18.8 4.4 100.0 100.0 26.1 21.1 Wholesale loans 54.5 65.0 19.2 4.5 61.1 61.3 16.0 12.9 Owned 32.3 38.5 19.3 4.5 36.2 36.4 9.5 7.7 Securitized 22.2 26.4 19.0 4.5 24.9 25.0 6.5 5.3 Retail 34.7 41.0 18.1 4.3 38.9 38.7 10.2 8.2 Loans 26.9 22.8 -15.2 ^t.O 30.2 21.5 7.9 4.5 Owned 25.0 19.9 -20.4 -5.5 28.1 18.8 7.3 4.0 Securitized 1.9 2.9 53.8 11.4 2.1 2.7 .6 .6 Leases 7.8 18.2 133.7 23.6 8.7 17.1 2.3 3.6 Owned 7.8 15.8 103.1 19.4 8.7 14.9 2.3 3.1 Securitized * 2.4 * 2.2 * .5 Other 47.1 106.6 126.4 22.7 100.0 100.0 13.8 21.2 Owned 44.6 100.0 124.2 22.4 94.7 93.8 13.1 19.9 Securitized 2.5 6.6 164.9 27.6 5.3 6.2 .7 1.3 * Negligible. . . . Not applicable. Wholesale Motor Vehicle Finance vehicles such as trucks, buses, taxicabs, and truck trailers. Between 1996 and 2000, retail motor vehicle Wholesale motor vehicle loans, which are supplied receivables at finance companies increased an avermainly by the captive subsidiary finance companies age of 4 percent annually, generally mirroring the of motor vehicle manufacturers, are typically used expansion of business investment in automobiles and by automobile dealers to finance their inventories trucks. There has been a clear trend in business retail (an activity known as floor-planning). Receivables motor vehicle financing toward leasing. The business at finance companies from this activity increased retail motor vehicle lease portfolios of finance comroughly 5 percent a year between surveys, to $65 bil- panies expanded an average of almost 24 percent lion in 2000. As a proportion of total business receiv- annually between surveys, and in 2000 leases ables, however, wholesale motor vehicle loans fell accounted for just under half of all business retail from 16 percent to 13 percent. About 40 percent of motor vehicle financing by finance companies. In wholesale automobile loans were securitized, almost contrast, finance companies' retail motor vehicle loan exclusively by the captive financing arms of the Big portfolios declined an average of 4 percent a year Three automakers (Chrysler Financial Corporation, between surveys. Ford Motor Credit, and General Motors Acceptance Corporation). 1. Wholesale motor vehicle lending by finance companies, The growth between 1996 and 2000 of wholesale 1996-2000 motor vehicle loans extended by finance companies tracked the growth of inventories at automobile Percent change from twelve months earlier dealers quite closely (chart 1). The rates of growth remained stable until mid-1998, when automobile sales surged. At that time, dealers increased their inventories sharply in order to keep their days' supply of vehicles roughly constant, and they stepped up their borrowing to finance the increase. Business Retail Motor Vehicle Finance Finance companies also provide credit for the retail 1996 1997 1998 1999 2000 sale to businesses of passenger cars and commercial NOTE. The data on inventories are from the U.S. Census Bureau. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Survey of Finance Companies, 2000 5 Other Business Receivables Consumer Motor Vehicle Finance "Other business receivables" include commercial Financing of consumer motor vehicles by finance accounts receivable, factored commercial accounts, companies increased at an average annual rate of floor-plan loans to dealers in non-automotive goods, 12 percent between 1996 and 2000, reaching a level and small cash loans to businesses and farms.7 of $338 billion. Most of the gain was due to growth Financing in this category rose rapidly between 1996 in loans. Growth in receivables associated with leases and 2000, increasing from about 14 percent of total slowed considerably from the rate of growth between business receivables at finance companies to roughly 1990 and 1996. As a result of the slow growth 21 percent. However, little quantitative information of leases relative to the growth of loans, leases is available to determine which types of business accounted for 9 percentage points less of consumer receivables accounted for the gain. motor vehicle finance in 2000 than in 1996. This shift away from leases partly reversed a 25 percentage point rise between 1990 and 1996 in Consumer Receivables the proportion of consumer motor vehicle finance accounted for by leases. The fourfold increase in car The consumer segment of finance company activity and truck leasing underlying the earlier gain was expanded at a robust 9 percent annual pace between due largely to aggressive promotion of motor vehicle surveys, with receivables (including securitized leases to households by the captive subsidiaries loans and leases) reaching $432 billion by mid-2000 of motor vehicle manufacturers. These subsidiaries, (table 4). At that time, finance company consumer which account for the bulk of finance company conreceivables excluding motor vehicle leases accounted sumer motor vehicle lending, have traditionally used for just over 20 percent of total consumer debt. financial incentives and other innovations to increase Finance company consumer receivables increased demand for the products of their parent manufacturmainly on the strength of motor vehicle loans. ers. The development of the motor vehicle lease as a Revolving credit (primarily credit card balances) consumer product was one such innovation. Generposted a moderate gain and maintained a fairly small ally, consumers became more receptive to leasing as share of overall finance company activity. "Other" a result of federal tax code revisions in the mid-1980s consumer loans—a diverse mix of other types of that phased out the deductibility of consumer loan non-mortgage consumer loans—changed little on net interest payments, thereby raising the cost of financin the late 1990s, and as a result, the importance to ing vehicle purchases relative to leasing. In addifinance companies of this category of consumer loans tion, leasing was perceived as a way to better reach continued to diminish. two specific portions of the consumer market. One portion was households that wanted to drive "new" 7. A factored commercial account is an account that has been vehicles at all times but were deterred from replacing purchased by a financial institution, such as a financec ompany. The purchaser assumes the credit risk of nonpayment. their vehicles frequently by the difficulties associated 4. Consumer receivables at finance companies, by category, June 30, 1996 and 2000 Amount Growth, 1996 to 2000 (billions of dollars) (percent) Category Average 1996 2000 Cumulative annual Total 303.9 431.8 42.1 9.2 Motor vehicle 217.3 337.6 55.3 11.6 Loans 123.0 220.6 79.3 15.7 Owned 86.3 143.1 65.8 13.5 Securitized 36.7 77.4 111.2 20.5 Leases 94.3 117.0 24.1 5.5 Owned 86.7 109.1 25.8 5.9 Securitized 7.6 7.9 4.1 1.0 Revolving 29.7 37.8 27.0 6.2 100.0 100.0 9.8 8.7 Owned 29.7 31.1 4.7 1.2 100.0 82.4 9.8 7.2 Securitized 6.6 17.6 1.5 Other 56.9 56.4 18.7 13.1 Owned 37.8 38.4 1.7 12.4 8.9 Securitized 19.1 18.0 -5.7 6.3 4.2 1 Negligible. . . . Not applicable. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

6 Federal Reserve Bulletin • January 2002 with reselling them. The other portion was house- The pace of growth of finance company revolving holds that were unable to make regular payments on credit (owned or securitized) was similar to that vehicle loans but could afford the smaller payments for such loans from all sources. As a result, finance typically associated with leasing. companies continued to account for a fairly small According to industry analysts, the shift away from share of the consumer revolving credit market, about leasing in recent years has occurred because con- 6 percent of total revolving credit outstanding. sumer auto leasing has turned out to be less profitable for finance companies than anticipated. A softer-thanexpected used car market depressed the actual value Other Consumer Receivables of many vehicles at the end of the lease period relative to the "residual value" stated in the leasing Finance company consumer receivables aside from agreement. The losses associated with these weak the motor vehicle and revolving credit categories used car prices were exacerbated by larger-than- were little changed between 1996 and 2000. The expected turn-in ratios (the fraction of households not largest component of the "other" category most exercising their option to purchase the leased vehi- likely is personal cash loans.9 Another important cle), which left finance companies with large num- component is sales finance contracts—loans typically bers of previously leased vehicles to sell. Both the originated by retail stores to finance the purchase of weakness in used car prices and the high turn-in such items as furniture or appliances and often sold ratios appear to be at least partly related to the to finance companies. A third component is mobile relatively rapid rate of model development and the home loans (these loans constitute the collateral small price increases that characterized the new car behind most of the securitized loans in the "other" market in the second half of the 1990s. category). One pattern in consumer motor vehicle finance that The lackluster performance of finance companies has not changed since the early 1990s is the trend in the "other" category between 1996 and 2000 toward securitization. The value of securitized motor continued a trend seen in the early 1990s, when vehicle loans at finance companies rose at an average growth in the category also lagged growth in the annual rate of 21 percent between 1996 and 2000. other categories of consumer receivables, albeit to a In 2000, securitized loans and leases represented lesser extent. The declining importance of "other" just over 25 percent of finance company consumer loans is probably related to the growing role of credit motor vehicle receivables, up from roughly 20 per- cards. In particular, revolving credit has become more cent in 1996 and about 15 percent in 1990. The available to consumers who formerly had to rely on captive finance companies, which account for a siz- non-revolving finance company credit: During the able portion of outstanding securitized motor vehicle 1990s, banks on balance moved toward riskier housereceivables, continued to have reliable access to the holds in their marketing of credit cards, and sevsecuritization market through 2000 because they dealt eral large finance companies established credit card mainly with higher quality loans. operations. Revolving Credit Real Estate Receivables Finance company revolving credit—mostly credit card receivables—rose from $30 billion to $38 bil- Real estate lending by finance companies increased at lion between 1996 and 2000, or about 6 percent a an average annual rate of close to 16 percent between year on average.8 Most of the increase was due to 1996 and 2000 (table 5). Despite this impressive pace an increase in loans in securitized pools. Investor of expansion, finance companies continued to account demand for this type of asset remained strong through for a very small share of total residential and comthe late 1990s, as the economic expansion resulted in mercial mortgage lending. In mid-2000, outstanding continued gains in credit quality. 8. The 1996 data for revolving and "other" consumer receivables 9. Surveyed companies were first asked about loans for the purin table 4 are lower than those cited in James D. August, Michael R. chase of motor vehicles, revolving lines of credit, and loans secured Grupe, Charles Luckett, and Samuel M. Slowinski, "Survey of by real estate. Then they were asked about loans and other types of Finance Companies, 1996," Federal Reserve Bulletin, vol. 83 (July credit extended to households that did not fall into those three cate- 1997), pp. 543-56. After publication of that article, the receivables of gories; these remaining receivables make up the "other" category. several commercial bank subsidiaries that had been included in the Companies were not asked to report any detail for "other" contotals reported by some finance companies were removed from the sumer receivables; see appendix B for more information about the various series. category. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Survey of Finance Companies, 2000 7 5. Real estate receivables at finance companies, by category, June 30, 1996 and 2000 Amount Growth, 1996 to 2000 Share of category Share of total (billions of dollars) (percent) (percent) (percent) CCaatteeggoorryy Average 1996 2000 Cumulative 1996 2000 1996 2000 annual Total 103.8 185.3 78.5 15.6 100.0 100.0 100.0 100.0 One- to four-family 70.7 146.8 107.6 20.0 100.0 100.0 68.1 79.2 Owned 47.3 119.4 152.6 26.1 66.8 81.4 45.5 64.4 Securitized 23.4 27.4 16.7 3.9 33.2 18.6 22.6 14.8 Commercial 33.1 38.5 16.4 3.9 100.0 100.0 31.9 20.8 Owned 33.1 38.4 15.9 3.8 100.0 99.5 31.9 20.7 Securitized * .2 * .5 * .1 NOTE. Commercial includes multifamily and farm. . . . Not applicable. * Negligible. finance company loans totaled $185 billion, less than sharp upward trend in the late 1990s mirrors a rapid 3 percent of the overall mortgage market.10 growth of total home equity lending that began in the Loans to individual homeowners secured by one- middle of the decade. The increase in home equity to four-family homes are by far the largest compo- lending was probably due at least partly to ongoing nent of finance company real estate receivables, and increases in households' use of this type of credit they accounted for the bulk of the growth between to consolidate their debt. The presence of collateral 1996 and 2000. Such loans rose at a vigorous average for these loans generally holds the interest rates annual rate of 20 percent over the period, reaching below rates for most credit cards. Further, the repay- $147 billion. Most of the additional lending was ment period on a home equity loan is typically longer retained on the balance sheets of finance companies; than the implicit repayment period for credit card securitized loans in this category rose much less borrowing. As a result, borrowers who use home rapidly than total loans. Commercial mortgages, equity loans to pay down their credit card balances including mortgages on farm and multifamily prop- can substantially reduce their monthly payments. erties, expanded an average of 4 percent a year Another advantage of home equity loans over credit between 1996 and 2000. As of mid-2000, they repre- card borrowing is that interest paid on home equity sented just under 21 percent of real estate lending by loans is deductible for taxpayers who itemize such finance companies, down from a 32 percent share in expenses. 1996. Almost all finance company real estate loans to FINANCE COMPANY FUNDING SOURCES individuals are home equity loans rather than loans to purchase homes.11 As a result, finance companies Finance company funding sources remained relarepresent a larger share of the market for home equity tively stable between 1996 and 2000. The companies loans than they do of the broader mortgage market. continued to operate from a narrow equity base. Total home equity lending is estimated to have been a Capital, surplus, and undivided profits as a proportion little more than $500 billion in mid-2000. The largest of total assets was unchanged at about 11 percent source of this credit was commercial banks, which (table 6). The most important source of funds, held more than one-third of the total. Finance compaaccounting for more than one-third of finance comnies are estimated to have held about 20 percent of pany funding, remained corporate bonds, the primary the total, up from roughly 15 percent in mid-1996. component of "debt not elsewhere classified." Data on finance company real estate loans to indi- Finance companies' reliance on commercial paper viduals before 1996 are not available.12 However, the continued to decline, falling 3 percentage points, to 18 percent. Bank borrowing and "other," unspeci- 10. The figures for finance company real estate receivables (indeed, fied, sources continued to fund about 2 percent and all figures for finance companies) do not include data for mortgage 20 percent of assets, respectively. Debt due to a parent banking companies. These specialized home mortgage lenders, which act primarily as mortgage originators and finance their lending activi- company rose at an average annual rate of 14 percent ties almost exclusively through securitization, are not covered by the between 1996 and 2000, reaching 8 percent of total finance company survey. funding. As mentioned earlier, finance companies 11. Although the survey does not ask for details about real estate loans, this is generally believed to be the case. increased their securitization activity rapidly between 12. Before the 1996 survey, finance companies were not asked to 1990 and 1996; however, the growth of securitized disaggregate their real estate receivables into their home mortgage and pools between 1996 and 2000 about equaled the commercial components. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

8 Federal Reserve Bulletin • January 2002 6. Sources of finance company funding, June 30, 1996 and 2000 Outstanding Growth, 1996 to 2000 Share of total (billions of dollars) (percent) (percent) SSoouurrccee 1996 2000 Cumulative Average annual 1996 2000 Liabilities 725.7 1,113.4 11.3 89.0 88.4 Bank loans 17.7 32.8 16.7 2.2 2.6 Commercial paper 169.6 224.3 7.2 20.8 17.8 Debt due to parent 56.3 95.1 14.0 6.9 7.6 Debt not elsewhere classified 319.0 483.7 11.0 39.1 38.4 Other 163.2 277.5 14.2 20.0 22.0 Capital, surplus, and undivided profits 89.7 12.9 11.0 11.6 Total 815.4 1,259.0 11.5 100.0 100.0 MEMO Securitized receivables 122.4 13.6 Total managed assets 937.8 100.0 growth of other forms of financing, and securitized income and employment growth. Some categoryassets remained at about 13 percent of total managed specific factors probably also came into play. Home assets in 2000.13 equity lending likely was boosted by the combination of low mortgage rates and relatively rapid appreciation of house prices. Generous incentives offered by DEVELOPMENTS SINCE THE JUNE 2000 the captive finance company subsidiaries of motor BENCHMARK SURVEY vehicle manufacturers helped maintain solid growth in consumer motor vehicle receivables. Finally, Information on the pattern of finance company activ- consumer receivables were boosted in late 2000 ity since the June 2000 benchmark survey is avail- when a major finance company absorbed the securiable from the Federal Reserve System's monthly tized receivables of one of its non-finance company survey of finance companies.14 Over the fifteen affiliates.15 months between the end of June 2000 and the end of September 2001, finance company receivables, adjusted to remove normal seasonal patterns, grew 15. This transfer of assets explains some, but not all, of the increase at an average annual rate of close to 9 percent. This in the rate of growth of finance company consumer receivables in late pace was slightly less rapid than the trend over the 2000. Without the transfer, the twelve-month change in the consumer component would have been a little more than 1 percentage point preceding four years. However, the gains were not lower beginning in the fourth quarter of 2000, and the twelve-month spread evenly over the post-benchmark period. In change in total receivables would have been roughly Vi percentage particular, the general weakening of macroeconomic point lower. Note that estimates of consumer lending from all sources were unaffected by this event because the increase in securitized loans activity since late 2000 showed through to overall held by finance companies was offset by a decline in securitized loans finance company lending, and the rate of growth of held elsewhere. total receivables trended down steadily (chart 2). The slowing of overall finance company lending 2. Growth of finance company receivables, was due primarily to a sharp deceleration in finance June 2000-September 2001 company business receivables that began in the second half of 2000. The rate of growth of real estate and consumer receivables moved down much less dramatically. In general, the demand for both home equity loans and consumer loans most likely was buoyed by some households' efforts to sustain the rate of growth of their consumption in the face of what they perceived as a temporary slowing of 13. Total managed assets equal the sum of total assets and securitized receivables. 14. Among other differences, the sample for the monthly survey is smaller than that for the benchmark survey; thus, the figures are subject to greater measurement and sampling error. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Survey of Finance Companies, 2000 9 APPENDIX A: SAMPLING PROCEDURES definition at the time of the questionnaire. These 28 companies were removed from the population, leav- As a first step in establishing a population for the ing a final estimated population of 984 companies. 2000 benchmark survey, pre-survey questionnaires Estimates of the assets and liabilities of the finance were mailed to 2,589 companies that were identified company population were produced using the stratifrom the mailing list for the 1996 survey and from fied mean expansion estimator, where the strata were other sources. Data were collected on the size of the based on both the size and the lending specialty of company, its primary type of activity or specialty, and the company. The estimator was defined as the classification of its parent, if any. Companies that responded to the questionnaire with information N(h) * y(h) showing that they had gone out of business, had been Y=ZY(h) = 1Z n(h) sold to another firm, were not a finance company, or were a subsidiary of another finance company were where excluded from the population (table A.l). Y = estimated national total Follow-up investigations of companies that did not return the pre-survey questionnaire or whose ques- Y(h) = estimated aggregate total for stratum h tionnaires were returned by the Postal Service as undeliverable ("postal returns") were conducted to N(h) = total number of companies in stratum h estimate the number of additional companies that belonged in the population. Investigations of a strati- y(h) = sample aggregate total for companies in fied random sample of 240 companies drawn from stratum h the 860 nonresponding companies yielded 78 eligible companies. Projecting this result on the basis of size n(h) = number of sample companies in stratum h and specialty class added 280 companies to the population. Similarly, investigations of a stratified random sample of 50 companies drawn from the 573 postal returns yielded 5 eligible companies, adding 57 com- APPENDIX B: DEFINITIONS OF BALANCE SHEET panies to the population. Combining these estimates ITEMS AND ADDITIONAL BALANCE SHEET DATA with the usable responses to the pre-survey questionnaire, the population of finance companies on For purposes of this survey, a finance company June 30, 2000, was initially estimated at 1,012. was defined as a company (excluding commercial The sample for the 2000 benchmark survey con- banks, credit unions, savings and loan associations, sisted of two groups: the 58 finance companies sur- cooperative banks, and savings banks) in which the veyed monthly for the Domestic Finance Company largest portion of the company's assets was in one or Report (FR 2248) and a stratified random sample of more of the following kinds of receivables: 542 additional companies from the sampling frame. All 58 monthly reporters responded. A total of 121 • Sales finance receivables. Installment paper arisof the 542 sampled companies provided usable ing from retail sales of passenger cars and mobile responses. The responses of another 28 of the 542 homes, other consumer goods, such as general mersampled companies indicated that they no longer fit chandise, apparel, furniture, and household applithe definition of "finance company" or had not fit the ances, or from outlays for home-improvement loans not secured by real estate. • Personal cash loans to individuals and families. A. 1. Responses to pre-survey questionnaire Unsecured cash loans (including loans to pay for insurance policies) or cash loans secured by insur- Percent of Disposition Number total mailed ance policies, autos already paid for, or other collateral. Total mailed 2,589 100.0 • Short- and intermediate-term business receiv- Not returned 860 33.2 Returned 1,729 66.8 ables (including leases). Loans on commercial Usable 675 26.1 accounts receivable; inventory loans; factoring; lease Not usable 1,054 40.7 Postal return 573 22.1 financing; retail installment sales (or purchases) of Not a finance company 164 6.3 Out of business 181 7.0 commercial, industrial, and farm equipment and com- Finance company subsidiary .. 90 3.5 Bank subsidiary 26 1.0 mercial vehicles; and wholesale financing of con- Other 20 .8 sumer and business goods. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

10 Federal Reserve Bulletin • January 2002 • Junior liens on real estate. Loans, whatever the 2. Loans Secured by Real Estate purpose, secured by junior liens (for example, equity loans or second mortgages) on real estate as evi- A. One- to Four-Family. Credit arising from revolvdenced by junior mortgages, deeds of trust, land ing or permanent loans secured by real estate as contracts, or other instruments. evidenced by mortgages (FHA, FmHA, VA, or conventional) or other liens (first or junior) on nonfarm Asset Items property containing one to four dwelling units (including vacation homes) or more than four dwell- Receivables include direct loans and loans and paper ing units if each is separated from other units by purchased from manufacturers and retailers before dividing walls that extend from ground to roof (row deduction of capitalized unearned income and houses, townhouses, or the like); mobile homes when reserves for losses. state laws define the purchase or holding of a mobile home as the purchase or holding of real property and 1. Consumer Receivables where the loan to purchase the mobile home is secured by that mobile home as evidenced by a A. Motor Vehicle Financing. Credit arising from mortgage or other instrument on real property; indiretail sales of passenger cars and other vehicles such vidual condominium dwelling units and loans as vans and pickup trucks to consumers. It excludes secured by an interest in individual cooperative units, fleet sales, personal cash loans secured by automo- even if in a building with five or more dwelling units; biles already paid for, loans to finance the purchase of vacant lots in established single-family residential commercial vehicles and farm equipment, and lease sections or in areas set aside primarily for one- to financing. four-family homes; and housekeeping dwellings with commercial units combined where use is primarily B. Revolving Credit. Retail credit that is extended residential and where only one- to four-family dwellon a credit-line basis and that arises from the sale of ing units are involved. consumer goods other than passenger cars and other vehicles. A single contract governs multiple use of B. Multifamily. Credit arising from permanent nonthe account, and purchases may be made with a credit farm residential loans secured by real estate as evicard. Generally, credit extensions can be made at denced by mortgages (FHA or conventional) or other the consumer's discretion, provided that they do liens on nonfarm properties with five or more dwellnot cause the outstanding balance of the account to ing units in structures (including apartment buildings exceed a prearranged credit limit. and apartment hotels) used primarily to accommodate households on a more or less permanent basis; C. Other Consumer Receivables. All credit arising housekeeping dwellings of five or more units with from retail sales of non-motor vehicle consumer commercial units combined where use is primarily goods that is not extended under a revolving credit residential; cooperative-type apartment buildings line. It includes financing of general merchandise, containing five or more dwelling units; and vacant apparel, furniture, and household appliances; camp- lots in established multifamily residential sections or ers, trailers, mobile homes, motorcycles, airplanes, in areas set aside primarily for multifamily residential helicopters, and boats purchased for personal use; properties. loans for automobile repair; credit to finance alterations or improvements in existing residential proper- C. Commercial and Farm. Credit arising from loans ties occupied by the borrower; secured and unsecured secured by real estate as evidenced by mortgages loans made directly to the borrower for household, or other liens on business and industrial properties, family, or other personal expenses; and unsecured hotels, motels, churches, hospitals, educational and loans to purchase auto insurance policies as well as charitable institutions, dormitories, clubs, lodges, loans secured by insurance policies, automobiles association buildings, care facilities for aged persons already paid for, and other collateral. It excludes and orphans, golf courses, recreational facilities, and loans for business purposes, rediscounted loans, loans similar properties. It includes all other nonresidential secured by real estate, and wholesale and lease loans secured by real estate as evidenced by mortfinancing. gages or other liens. It also includes credit arising Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Survey of Finance Companies, 2000 11 from loans secured by farmland and improvements all off-the-road equipment for which motor vehicle thereon as evidenced by mortgages or other liens. licensing is not required and lease financing of air- Farmland includes all land known to be used or planes, helicopters, and boats leased for business use. usable for agricultural purposes, such as crop and It excludes lease financing of airplanes, helicopters, livestock production, and grazing or pasture land, and boats leased for personal or family use (included whether tillable or not and whether wooded or not. in asset item 3.C), and excludes operating leases as defined by Financial Accounting Standards Board Statement of Financial Accounting Standards 13 3. Business Receivables (SFAS 13). A. Motor Vehicle Financing. Consists of retail cred- C. Other Business Receivables (Excluding Operatits and wholesale credits. ing Leases). All other wholesale financing not (1) Retail (commercial vehicles). Credit arising reported in asset items 3.A.2 and 3.B.1 above, includfrom retail sales of commercial land vehicles to busi- ing floor-plan transactions between manufacturers ness. It includes trucks, buses, taxicabs, truck trailers, and dealers for items such as mobile homes, campers, and other on-the-road vehicles for which motor vehi- and travel trailers. Includes all other business capicle licensing is required. It also includes fleet sales of tal and leveraged lease receivables not reported in passenger cars, but excludes lease financing and asset items 3.B.2 above and not reported in asset paper on business, industrial, or farm equipment. items 4.A.2, below, including credit arising from the (2) Wholesale. Credit arising from transactions leasing of mobile homes, campers, and travel trailers. between manufacturers and dealers or other floor- Excludes operating leases as defined by SFAS 13 that plan loans secured by passenger cars and commer- are included in asset items 4.B and 5 below. Includes cial land vehicles. It excludes paper secured by business credit with original maturities of up to mobile homes, passenger car trailers, boats, air- five years, including loans secured by commercial planes, helicopters, and business, industrial, and farm accounts receivable less the balances withheld for equipment. customers pending collection of receivables; commercial accounts receivable purchased from factored B. Business, Industrial, and Farm Equipment. Con- clients less any amount due and payable to factored sists of retail and wholesale credits and capital and clients; and secured and unsecured advances of funds leveraged leases. to factored clients. It includes dealer loans, capital (1) Retail and wholesale financing. Credit arising loans, small loans used primarily for business or farm from the retail sale to business of (or for the purchase purposes, multicollateral loans, rediscounted receivof) business, industrial, and farm equipment. It ables of other finance companies less balances withincludes all off-the-road equipment for which motor held, and all other business loans not elsewhere vehicle licensing is not required as well as airplanes, classified. It excludes loans secured by real estate helicopters, and boats purchased for business use. (unless included as part of a multicollateral loan), Loans may be secured by chattel mortgages or con- which are included in asset items 2. ditional sales contracts (purchased money security agreements) on the machinery or equipment. It excludes loans to purchase commercial land vehicles 4. Motor Vehicle Leases for which motor vehicle licensing is required and loans secured by real estate. It also excludes lease Lease receivables arising from leasing of passenger financing. Wholesale financing is credit arising from cars and commercial land vehicles, but excluding transactions between manufacturers and dealers or leasing of mobile homes, campers, motor trailers, other floor-plan loans secured by business, industrial, boats, airplanes, helicopters, and business, industrial, and farm equipment. It includes all off-the-road and farm equipment. equipment for which motor vehicle licensing is not required, such as airplanes, helicopters, and boats. A. Capital and Leveraged Leases. Consists of con- (2) Capital and leveraged leases. Lease receiv- sumer and business leases. ables arising from the leasing of business, industrial, (1) Consumer. Refer to credit on types of receivand farm equipment. It includes lease financing of ables covered by asset items 1 .A above. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

12 Federal Reserve Bulletin • January 2002 (2) Business. Refer to credit on types of receiv- 8. Total Assets, Net ables covered by asset items 3.A.1 above. Sum of asset items l.A through 6 minus asset B. Operating Leases (as defined by SFAS 13). Con- items l.A and 7.B. sists of consumer and business leases. (1) Consumer. Refer to credit on types of receiv- Securitized Asset Items ables covered by asset items 1 .A above. (2) Business. Refer to credit on types of receiv- Securitized assets include receivables that have been ables covered by asset items 3.A.1 above. packaged and sold by the reporting finance company to a trustee or other third party who uses the receiv- 5. Non-Motor Vehicle Operating Leases ables package as collateral for an asset-backed security that is sold to investors. These assets are no For business, industrial, and farm equipment, refer longer on the balance sheet of the reporting finance to credit on types of receivables covered by asset company and thus are not included in the asset items. items 3.B.1 above. For all other equipment, refer Securitized assets consist of the total amount outto credit on types of receivables covered by asset standing, including all receivables securitized in the items l.C and 3.C above. It includes all operating current month and in prior months. They include leases as defined by SFAS 13 that are excluded from assets such as leases that were never on the company the asset items above. books, but whose securitizations may be counted as a managed asset, and exclude the amounts of outright asset sales that have not been packaged to collateral- A. Consumer. Refer to credit on types of receivables ize an asset-backed security. Securitized assets are covered by asset items l.C above. reported using the same definitions used for their unsecuritized counterparts in asset items 1 through 5 B. Business. Refer to credit on types of receivables above. covered by asset items 3.B.1 and 3.C above. Liabilities and Capital Items 6. All Other Assets and Accounts and Notes Receivable 1. Bank Loans All assets not already included above, including con- Short- and long-term loans and notes payable to solidated companies' investments in nonconsolidated banks. Includes overdrafts but excludes commercial foreign and domestic subsidiaries and affiliates. paper and bank portions of participation loans. Nonconsolidated subsidiary and affiliate company claims on consolidated companies (except debt due to parent) are netted against the consolidated 2. Commercial Paper companies' investment. It excludes operating leases reported as asset items 4.B and 5 above and excludes Promissory notes of large denominations sold overdrafts. directly or through dealers to investors and issued for not longer than 270 days. It includes short-term or demand "master" notes and paper backed by letters 7. Reserves of credit or other guarantees, but excludes nonnegotiable promissory notes held by officers of the A. Reserves for Unearned Income. Includes firm, their families, and other individuals (which are unearned discounts and service charges on the above included in liabilities and capital item 4). receivables. B. Reserves for Losses. Allowances for bad debts, 3. Debt Due to Parent unallocated charge-offs, and any other valuation allowances except the amount of unearned income For a company that is the subsidiary of another applicable to the receivables included above. company (which is not a finance company), it Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Survey of Finance Companies, 2000 13 includes all short- and long-term indebtedness owed drawable during term of loan), and all other liabilito the parent company, but excludes the parent com- ties. It excludes liabilities of consolidated companies pany's equity (which is included in liabilities and to nonconsolidated subsidiaries of affiliated compacapital item 6). nies, which are netted against assets in asset items 6 or shown in liabilities and capital items 3. It also excludes borrower repayment deposits accumulated 4. Debt Not Elsewhere Classified but not credited against indebtedness until repayment is made in full, which are netted against appropriate All other short- and long-term loans, notes, certifireceivables under asset items above. cates, negotiable paper, or other indebtedness not elsewhere classified. It excludes bank debt already included in liabilities and capital items 1 and 3. 6. Capital, Surplus, and Undivided Profits All common and preferred stock and other capital or 5. All Other Liabilities surplus accounts, including undivided profits. All liabilities not already reported above or netted against assets. It includes dealer reserves, all tax 7. Total Liabilities and Capital accruals, short-term certificates of thrift or investment, deposit liabilities (other than those not with- Sum of liabilities and capital items 1 through 6. • Table B.l appears on the following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

14 Federal Reserve Bulletin • January 2002 B.l. Assets and liabilities outstanding at finance companies, by size of company, June 30, 2000 Millions of dollars Size of company (net assets, millions of dollars) IItteemm AAllll 20,000 1,000-19,999 200-999 50-199 10-49 Less than 10 and more ASSETS Consumer receivables 321,839 249,854 62,699 4,724 2,514 1,447 603 Motor vehicle financing 252,256 214,330 31,933 3,673 1,384 732 205 Loans 143,115 127,321 10,319 3,168 1,380 732 194 Leases 109,141 87,009 21,613 505 4 0 10 Capital and leveraged 21,392 12,708 8,420 250 4 0 10 Operating 87,749 74,301 13,193 255 0 0 0 Revolving credit 31,142 20,034 10,655 0 109 336 8 Other 38,441 15,490 20,111 1,051 1,021 379 390 Loans secured by real estate 157,745 108,988 43,838 4,284 387 127 120 One- to four-family 119,393 86,774 29,284 2,883 251 122 80 Other 38,352 22,214 14,555 1,401 136 5 40 Business receivables 441,876 179,403 234,640 21,761 3,817 1,565 691 Motor vehicle financing 74,220 57,171 15,331 133 1,415 169 0 Wholesale 38,516 35,129 3,343 44 0 0 0 Retail 35,704 22,042 11,988 90 1,415 169 0 Loans 19,926 11,045 8,811 0 69 0 0 Leases 15,778 10,996 3,177 90 1,346 169 0 Capital and leveraged 11,033 9,324 1,291 90 180 148 0 Operating 4,746 1,672 1,886 0 1,166 22 0 Business, industrial, and farm equipment 238,240 68,256 153,154 13,451 2,276 680 423 Loans (retail and wholesale) 70,745 29,213 39,411 2,000 0 0 120 Leases (capital and leveraged) 167,494 39,043 113,742 11,451 2,276 680 303 Other 99,996 41,447 53,806 4,011 126 467 139 Non-motor vehicle operating leases 29,420 12,529 12,348 4,165 0 249 129 All other assets 419,440 341,287 71,070 4,870 1,324 652 238 Total assets, gross 1,340,901 879,532 412,246 35,639 8,042 3,790 1,651 Less reserves for unearned income 66,147 29,807 32,061 2,618 1,234 338 89 Less reserves for losses 15,715 7,730 6,735 874 226 114 36 Total assets, net 1,259,039 841,995 373,450 32,147 6,582 3,338 1,526 LIABILITIES AND CAPITAL Bank loans 32,847 4,680 17,436 6,195 2,351 1,563 621 Commercial paper 224,256 166,480 54,389 3,249 0 123 14 Debt due to parent 95,087 36,718 47,563 9,450 1,321 12 24 Debt not elsewhere classified 483,703 334,251 142,775 5,314 609 421 333 All other liabilities 277,488 212,482 59,444 4,238 762 475 87 Capital, surplus, and undivided profits 145,657 87,384 51,843 3,701 1,539 744 446 Total liabilities and capital 1,259,039 841,995 373,450 32,147 6,582 3,338 1,526 MEMO SECURITIZED RECEIVABLES Consumer receivables 109,959 102,465 7,363 0 83 41 8 Motor vehicle financing 85,316 77,864 7,363 0 83 0 6 Loans 77,443 71,909 5,445 0 83 0 6 Leases (capital and leveraged) 7,873 5,956 1,917 0 0 0 0 Revolving credit 6,635 6,634 0 0 0 0 1 Other consumer receivables 18,008 17,966 0 0 0 41 1 Loans secured by real estate 27,543 26,166 450 927 0 0 0 One- to four-family 27,360 26,062 437 861 0 0 0 Other 183 104 12 67 0 0 0 Business receivables 60,589 41,207 16,140 1,893 1,339 0 10 Motor vehicle financing 31,721 27,767 3,876 0 78 0 0 Wholesale 26,440 24,920 1,520 0 0 0 0 Retail 5,281 2,847 2,356 0 78 0 0 Loans 2,904 548 2,356 0 0 0 0 Leases 2,377 2,299 0 0 78 0 0 Capital and leveraged 2,377 2,299 0 0 78 0 0 Operating 0 0 0 0 0 0 0 Business, industrial, and farm equipment 22,258 12,788 7,586 614 1,261 0 10 Loans (retail and wholesale) 15,810 12,586 3,214 0 0 0 10 Leases (capital and leveraged) 6,448 202 4,372 614 1,261 0 0 Other 6,610 653 4,678 1,279 0 0 0 Total securitized receivables 198,091 169,838 23,952 2,820 1,422 41 18 •• ** Number of companies responding 7777 to survey 179 11 2277 1199 2200 2255 Estimated number of companies in population 984 11 57 61 57 112288 667700 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

15 Announcements FOMC DIRECTIVE AND DISCOUNT RATE Board of Governors of the Federal Reserve System, DECREASE effective December 31, 2001. Kelley, who has been a member of the Board since The Federal Open Market Committee decided on May 26, 1987, submitted his letter of resignation to December 11, 2001, to lower its target for the federal President Bush. In view of his impending departure funds rate by 25 basis points to PA percent. In a and in keeping with Board practice, he did not attend related action, the Board of Governors approved a the December 11 meeting of the Federal Open Mar- 25 basis point reduction in the discount rate to ket Committee. 1 '/4 percent. "During his more than fourteen years on the Economic activity remains soft, with underlying Board, I have valued his sound judgment, hard work inflation likely to edge lower from relatively modest and, above all, his friendship," Chairman Alan levels. To be sure, weakness in demand shows signs Greenspan said. "I know of no one in public life with of abating, but those signs are preliminary and tenta- greater integrity or higher principles." tive. The Committee continues to believe that, against Kelley, the senior member of the Board, said he the background of its long-run goals of price stability was resigning to turn his attention to family and and sustainable economic growth and of the informa- other personal interests. He had announced on June 4 tion currently available, the risks are weighted mainly that he planned to leave the Board after at least one of toward conditions that may generate economic weak- two vacant seats was filled. Susan Schmidt Bies and ness in the foreseeable future. Mark W. Olson were sworn in to fill those seats on Although the necessary reallocation of resources to December 7, 2001. enhance security may restrain advances in produc- Kelley, 69, was first appointed to the Board by tivity for a time, the long-term prospects for produc- President Ronald Reagan. President George H.W. tivity growth and the economy remain favorable Bush reappointed him in 1990 to a term that expires and should become evident once the unusual forces on January 31, 2004. During much of his tenure, he restraining demand abate. served as chairman of the Board's Committee on In taking the discount rate action, the Federal Reserve Bank Affairs, overseeing the operations and Reserve Board approved the requests submitted by payment services of the twelve Federal Reserve the boards of directors of the Federal Reserve Banks Banks. He led the Reserve Banks' efforts to prepare of Boston, New York, Philadelphia, Chicago, and their computer systems for a smooth transition during San Francisco. the century date change. The Federal Reserve Board also approved action Before becoming a member of the Board, Kelley by the board of directors of the Federal Reserve Bank had been chairman of the board of Investment of St. Louis, decreasing the discount rate at the bank Advisers, Inc., in Houston, Texas, and president and from 1 '/2 percent to VA percent, effective Wednes- chief executive officer of Kelley Industries, Inc., a day, December 12, 2001. Houston-based company with subsidiaries in manu- On December 13, 2001, the Federal Reserve Board facturing, distribution, and business services. approved actions by the boards of directors of the Federal Reserve Banks of Cleveland, Richmond, Atlanta, Minneapolis, Kansas City, and Dallas, decreasing the discount rate at the banks from NEW BOARD GOVERNORS BIES AND OLSON 1 lA percent to 1 ]A percent, effective immediately. SWORN IN TO OFFICE Susan Schmidt Bies and Mark W. Olson took the oath RESIGNATION OF BOARD GOVERNOR KELLEY of office as members of the Board of Governors of the Federal Reserve System on Friday, December 7, Edward W. Kelley, Jr., submitted his resignation 2001. The oath was administered by Chairman Alan Wednesday, December 12, 2001, as a member of the Greenspan in the Chairman's office. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

16 Federal Reserve Bulletin • January 2002 President Bush announced his intention to nomi- held oversight hearings on implementation of key sections nate Dr. Bies on June 8 and his intention to nominate of the Gramm-Leach-Bliley Act. From 1988 to 1999, he served as a partner with Ernst & Mr. Olson on July 10. The Senate confirmed them on Young LLP and its predecessor, Arthur Young & Com- December 6. pany. At Ernst and Young, he was national director Dr. Bies was nominated to a vacant seat last held of the firm's Regulatory Consulting Practice for the finanby Susan M. Phillips, whose term expired. Dr. Bies's cial services industry. Mr. Olson also consulted on issues term expires January 31, 2012. of management and board corporate governance, strategic planning, and management evaluation. In addition, Mr. Olson was selected to join a 1991-92 Treasury Depart- Dr. Bies was born on May 5, 1947, in Buffalo, New ment effort to assist Eastern European bankers in adapting York. She received a B.S. in education from the State to a free-market economy. College of New York at Buffalo in 1967 and an M.A. From 1976 to 1988, Mr. Olson was president and chief (1968) and a Ph.D. (1972), both in economics, from Northexecutive officer of Security State Bank, Fergus Falls, western University. Dr. Bies has served as a Fellow at Minnesota. Mr. Olson's father had been the lead organizer the Federal Reserve Bank of Chicago (1969-70) and as a in chartering Security State Bank in 1957. During his years Fellow at the Northwestern University Center for Urban at Security State Bank, Mr. Olson was also actively Affairs (1968-69). involved in public policy issues involving the banking Before becoming a member of the Board, Dr. Bies was industry. He served on the American Bankers Association the executive vice president for risk management and board of directors and as chairman of the ABA Governauditor at First Tennessee National Corporation, Memphis, ment Relations Council. In 1986, Mr. Olson, at age 43, Tennessee (1995-2001). From 1979 to 1995, she served in became the youngest person ever elected as president of various other positions at First Tennessee, including executhe American Bankers Association. tive vice president and chief financial officer, senior vice Mr. Olson served former Congressman Bill Frenzel president and chief financial officer, senior vice president (R-Minn.) as legislative assistant for banking issues and treasurer, vice president for corporate development, (1971-72) and as director of his Minnesota district office tactical planning manager, and economist. (1974-76). Mr. Olson began his banking career in 1966 Before joining First Tennessee, Dr. Bies was associwith First Bank System (now U.S. Bancorp) and was ate professor of economics, Rhodes College, Memphis, named an officer in 1969. Tennessee (1977-79); assistant professor of economics, Mr. Olson has been a frequent author and speaker on the Wayne State University, Detroit, Michigan (1972-77); and public policy aspects of financial services. He has testified chief regional and banking structure economist at the Fedbefore the Congress, and his articles have appeared in eral Reserve Bank of St. Louis (1970-72). numerous industry publications. Dr. Bies has been active in leadership positions for Mr. Olson is married to Renee Korda and has two various organizations, including the Emerging Issues Task children, Ben and Stephanie. Force of the Financial Accounting Standards Board, the Committee on Corporate Reporting of the Financial Executives Institute, the End Users of Derivatives Association, the American Bankers Association, and the Bank Adminis- REVISION OF PAYMENTS SYSTEM RISK POLICY tration Institute. She has also served with numerous other business, pro- The Federal Reserve Board announced on Decemfessional, academic, civic, and charitable organizations, ber 11, 2001, that it had revised its Policy Statement including the American Economic Association, Institute of on Payments System Risk (PSR policy). Management Accountants, International Women's Forum, American Economic Association, Economic Association The revised PSR policy incorporates, with minor of Memphis, University of Memphis, Memphis Area modifications, the Board's interim policy that became Chamber of Commerce, Memphis Youth Initiative, and effective May 30, 2001. This policy allows certain Memphis Partners. Dr. Bies is married and has two adult depository institutions to pledge collateral to the Fedsons. eral Reserve to access additional daylight overdraft capacity above their net debit caps. The revised Mr. Olson was nominated to the seat vacated by policy also modifies the net debit cap calculation for the resignation of Alice M. Rivlin on July 16, 1999. U.S. branches and agencies of foreign banks. These The term expires January 31, 2010. changes should alleviate liquidity pressures identified Mr. Olson was born March 17, 1943, in Fergus Falls, during a broad review of the PSR policy. Minnesota. He received a B.A. in economics in 1965 from The revised policy also modifies the time elec- Saint Olaf College. tronic check presentments are posted to depository Before becoming a member of the Board, Mr. Olson institutions' Federal Reserve accounts for purposes served as staff director of the Securities Subcommittee of of measuring daylight overdrafts, which should the Banking, Housing, and Urban Affairs Committee, U.S. Senate (2000-01). The Securities Subcommittee's legis- remove a potential impediment to the use of eleclative jurisdiction included the Securities and Exchange tronic check presentment. In addition, the Board has Commission, accounting policy issues, and the insurance decided to retain the $50 million limit on the value of industry. During Mr. Olson's tenure, the subcommittee book-entry securities transfers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 17 The revised policy statement is effective Decem- predatory lending using its regulatory authority, the ber 10, 2001, with the following exceptions: (1) revi- Board published proposed amendments in December sions to the criteria used to determine the U.S. capital 2000. equivalency measure for foreign banking organiza- The term "predatory lending" encompasses a tions will take effect on February 21, 2002, and variety of practices. Oftentimes homeowners in (2) the modification to post electronic check present- certain communities—particularly the elderly and ments to depository institutions' Federal Reserve minorities—are targeted with offers of high-cost, accounts at 1:00 p.m. local time will take effect on home-secured credit. The loans carry high up-front April 1, 2002. fees and may be based on the homeowners' equity in their homes, not their ability to make the scheduled payments. When homeowners have problems repay- FINAL AMENDMENT TO REGULATION Z ing the debt, they are often encouraged to refinance REGARDING HOEPA AND PREDATORY LENDING the loan. Frequently this leads to another high-fee loan that provides little or no economic benefit to the The Federal Reserve Board approved on Decem- borrower. ber 12, 2001, and sent for publication to the Federal Register on December 14, 2001, a final rule that amends its regulations aimed at curbing predatory PROPOSED REVISIONS TO STAFF COMMENTARY lending. Compliance with the amendments becomes ON REGULATION Z REGARDING CONSUMER mandatory on October 1, 2002. CREDIT DISCLOSURES The amendments to Regulation Z (Truth in Lending) broaden the scope of loans subject to the protec- The Federal Reserve Board published on Decemtions of the Home Ownership and Equity Protection ber 7, 2001, proposed revisions to the official staff Act (HOEPA) of 1994 by adjusting the price triggers commentary that applies and interprets the requirethat determine coverage under the act. The rate-based ments of Regulation Z, which implements the Truth trigger is lowered by 2 percentage points for first-lien in Lending Act. Comment is requested by Februloans, and the fee-based trigger is revised to include ary 1, 2002. the cost of optional insurance and similar debt pro- The proposed revisions clarify how creditors that tection products paid at closing. Certain acts and place Truth in Lending Act disclosures on the same practices in connection with home-secured loans are document with the credit contract may satisfy the prohibited, including a rule to restrict creditors from requirement for providing the disclosures in a form engaging in repeated refinancings of their own the consumer may keep before consummation. In HOEPA loans over a short time period when the addition, the proposed revisions provide guidance on transactions are not in the borrower's interest. disclosing costs for certain credit insurance policies HOEPA's prohibition against extending credit and on the definition of "business day" for purposes without regard to a consumer's repayment ability is of the right to rescind certain home-secured loans. strengthened by requiring creditors to document and verify income for HOEPA-covered loans. Disclosures received by consumers before closing INTERAGENCY ADOPTION OF FINAL RULE ON for HOEPA-covered loans would include the total RECOURSE OBLIGATIONS, DIRECT CREDIT amount of money borrowed and whether that amount SUBSTITUTES, AND RESIDUAL INTERESTS includes the cost of optional credit insurance or similar products. The federal bank and thrift regulatory agencies HOEPA was enacted in response to anecdotal evi- announced on November 29, 2001, the publication of dence of predatory lending practices in the home a final rule that changes their regulatory capital stanequity lending market. HOEPA imposes additional dards to address the treatment of recourse obligadisclosure requirements. It also imposes substantive tions, residual interests, and direct credit substitutes limitations, such as restrictions on short-term balloon that expose banks, bank holding companies, and thrift notes, on certain home equity loans with rates and institutions (collectively, banking organizations) to fees above a certain percentage or amount. credit risk. HOEPA authorizes the Board to expand HOEPA's The final rule, published in the Federal Register, coverage and prohibit certain acts and practices in synthesizes the capital treatment outlined in two connection with mortgage lending generally. After notices of proposed rulemakings issued in 2000— holding public hearings on possible ways to curb "Recourse and Direct Credit Substitutes" and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

18 Federal Reserve Bulletin • January 2002 "Residual Interests in Asset Securitizations or Other • Limits that apply to the use and disclosure of Transfers of Financial Assets." The final rule treats customer information received from an unrelated recourse obligations and direct credit substitutes more financial institution consistently than the agencies' current risk-based • Limits that apply to the disclosure of customer capital standards and introduces a credit-ratings- account numbers based approach to assigning risk weights within a • How to comply with the exception for disclosecuritization. The final rule also imposes a "dollar- sures under a joint marketing arrangement with an for-dollar" capital charge on residual interests and a unrelated financial institution. concentration limit on credit-enhancing, interest-only strips, a subset of residual interests. These FAQs were developed jointly by staff of the The rule is effective on January 1, 2002. Any Board of Governors of the Federal Reserve System, transactions settled on or after January 1, 2002, are Federal Deposit Insurance Corporation, National subject to this final rule. Banking organizations that Credit Union Administration, Office of the Comptrolenter into transactions before January 1, 2002, may ler of the Currency, and Office of Thrift Supervision. elect early adoption, as of November 29, 2001, of any They consulted with staff of the Commodity Futures provision of the final rule that results in a reduced Trading Commission, Federal Trade Commission, capital requirement. Conversely, banking organiza- and Securities and Exchange Commission. Staff of tions that have entered into transactions before Janu- the depository institution agencies may supplement ary 1, 2002, that result in increased capital require- or revise the FAQs as necessary or appropriate in ments under the final rule may delay the application light of further questions and experience. of this rule to those transactions until December 31, Each of these agencies will both post the FAQs on 2002. its web site and make them available to the financial institutions the agency supervises. INTERAGENCY GUIDANCE ON COMPLIANCE WITH CONSUMER PRIVACY REGULATIONS RESULTS OF STUDY ON RETAIL PAYMENT Staff of the federal agencies that supervise banks, SYSTEMS thrift institutions, and credit unions issued guidance on December 12, 2001, to help financial institu- New data collected by the Federal Reserve System, tions comply with these agencies' consumer privacy released on November 14, 2001, suggest that check regulations. writing in the United States is steadily giving way The agencies' regulations implementing the pri- to electronic forms of payment as consumers, busivacy provisions of the Gramm-Leach-Bliley Act of nesses, and financial institutions seek to be more 1999 were issued last year after interagency consul- efficient and cost-effective. tation and coordination. Financial institutions have American consumers and businesses make 80 bilbeen required to comply with the privacy rules since lion retail payments annually, nearly 50 billion by July 1, 2001. The agencies' privacy rules are substan- check and 30 billion by electronic instruments, such tially identical, although each agency's rule differs as credit cards, debit cards, and the automated clearslightly due to the type of financial institutions inghouse (ACH), according to the first comprehensubject to that agency's jurisdiction. In general, the sive studies of the retail payment system by the privacy regulations govern the circumstances under Federal Reserve System in more than twenty years. which a financial institution must provide a consumer Checks have declined from approximately 85 percent with a notice explaining the institution's privacy poli- of non-cash payments since the last study in 1979 to cies and practices and provide a consumer a reason- about 60 percent today. able opportunity to prevent, or "opt out" of, disclo- Approximately 1,300 financial institutions, includsures of certain information to nonaffiliated third ing banks, thrift institutions, and credit unions, and parties. 89 electronic payment processors responded to three The staff guidance issued a series of frequently surveys that looked at methods and volumes of retail asked questions, or FAQs, covering various aspects payments. of the privacy rules, including the following: "The Federal Reserve Banks conducted the study to gain a better understanding of the dynamics of the • Which entities are covered by the privacy rules retail payment system," said Roger W. Ferguson, Jr., • When financial institutions must deliver privacy vice chairman of the Federal Reserve Board, "and we and opt-out notices believe the results clearly paint a picture of a pay- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 19 ments system in migration. The data show strong lion. Major electronic funds transfer networks, credit growth in electronic payments since the early 1980s card associations, ACH operators, electronic benefits and lower-than-expected check volumes." transfer contractors, and private label credit card issu- Since 1979, the total number of non-cash retail ers, eighty-nine in all, shared data on their 2000 payments has doubled from approximately 37 billion volume and value of electronic payment transactions. to 80 billion. The number of checks has grown about Credit card transactions represent about half of 55 percent from the 1979 estimate of 32 billion. electronic payments (15 billion, worth $1.23 trillion). Although checks remain the dominant form of non- Debit cards remain the second most dominant eleccash payment, over the past twenty years, electronic tronic instrument with 8.3 billion transactions worth payments have replaced checks in large numbers. $348 billion. Surprisingly, the survey revealed that The data collection effort was commissioned by while the ACH is the third most commonly used the Reserve Banks and consisted of three main electronic payment method for retail transactions studies—the Depository Financial Institution (DFI) (5.6 billion items, which does not include cash con- Check Study, the Check Sample Study, and the Elec- centration settlement transactions), the ACH carries tronic Payment Instruments Study. The DFI Check more than three-quarters of all electronic payment Study was designed to count the total or aggregate value ($5.67 trillion). number of checks processed in the United States for a "If you compare these results with 1979 research twelve-month period. The Check Sample Study gath- estimates, it seems clear that the proportion of check ered information on the composition of the check payments is declining as substitution for electronic market, namely, who (consumers, businesses, or payment instruments accelerates," according to government) writes checks to (consumers, busi- Cathy E. Minehan, president of the Federal Reserve nesses, or government) and why (remittance, point Bank of Boston. "Not only do we have a much better of sale, income, or casual payment). The Electronic idea about the size of the total retail payments sys- Payment Instruments Study gathered data on the vol- tem, we clearly see that electronic payments are ume and value of electronic payments processed dur- taking a strong hold of the market and are poised for ing 2000. significant growth in the next few years." The Fed The DFI check study, which gathered paid check anticipates repeating the study every two to three volume and value data from financial institutions, years to provide detailed information on changestimates that about 50 billion checks are written ing behaviors and trends in the use of payment annually in the United States, totaling about $48 tril- instruments. lion in payments. The study also revealed that According to Patrick K. Barron, first vice president approximately 30 percent of checks are "on-us" of the Atlanta Federal Reserve Bank, "We are hopeitems, meaning the bank of first deposit for these ful that these data and further details we will share items is also the paying bank. The remaining checks with the industry in the future will enable all particiare cleared and settled between financial institutions. pants in the payment system to make more informed Conducted as a complementary study, the Check decisions regarding future investments in payments Sample Study involved 149 financial institutions technology." examining more than approximately 29,000 randomly The Reserve Banks hired Boston-based strategy selected deposited checks and categorizing them by firm Dove Consulting to conduct the electronic paytype of payor, payee, and purpose. The study found ment study and Global Concepts and Westat to exethat consumers write approximately 50 percent of cute the two check studies. The Federal Reserve all checks and businesses receive about half of all Bank of Atlanta and the Bank Administration Instichecks. The study also established that more checks tute conducted the last study of this type in 1979. are written for remittance or bill payment than for Additional details on the research studies are availany other purpose (25.7 percent of check volume). able on the Federal Reserve System's financial ser- The next primary use for checks was at the point of vices website: www.frbservices.org. sale, where 19 percent of checks are written. Income payments, such as salary and benefits payments, from businesses and governments to consumers equal ANNUAL ADJUSTMENT IN TRIGGER AMOUNT 17.8 percent of all check payments. FOR ADDITIONAL MORTGAGE LOAN The results from the third study on electronic pay- DISCLOSURES ment instruments show that during 2000, about 30 billion retail electronic payments were originated The Federal Reserve Board published on Novemin the United States with a value of more than $7 tril- ber 14, 2001, its annual adjustment of the dollar Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

20 Federal Reserve Bulletin • January 2002 amount that triggers additional disclosure require- ELIMINATION OF SELECTED REPRINTS IN THE ments under the Truth in Lending Act for mortgage FEDERAL RESERVE BULLETIN loans that bear rates or fees above a certain amount. Under the revision to the Board's staff commentary The Federal Reserve Board announced on Decemto Regulation Z, the dollar amount of the fee-based ber 11, 2001, that five documents that have regularly trigger has been adjusted from $465 for 2001 to $480 been reprinted in the Federal Reserve Bulletin will for 2002 based on the annual percent change reflected not appear in the Bulletin after the December 2001 in the consumer price index that was in effect on issue. June 1, 2001. The adjustment is effective January 1, The materials are being eliminated from the 2002. monthly journal because they are widely available The Home Ownership and Equity Protection Act both in a more timely fashion on the web and in print of 1994 bars credit terms such as balloon payments copies available by subscription. The documents are and requires additional disclosures when total points the following: and fees payable by the consumer exceed the feebased trigger, initially set at $400 and adjusted annu- • "Industrial Production and Capacity Utilization" ally, or 8 percent of the total loan amount, whichever • "Minutes of the Federal Open Market is larger. Committee" • "Testimony of Federal Reserve Officials" • The quarterly report "Treasury and Federal BOARD DISCOUNT RATE MEETING MINUTES Reserve Foreign Exchange Operations" • The annual report "Domestic Open Market The Federal Reserve Board released on Novem- Operations." ber 16, 2001, the minutes of its discount rate meetings from September 24 to October 2, 2001. What follows is a Q&A section that explains the reasons for the elimination of the reprints and where they may be obtained elsewhere. ANTHRAX TESTS AT THE BOARD What documents will not be reprinted in the Bulletin after December 2001? The documents are (1) the "Indus- On December 6, 2001, the Board announced that a trial Production and Capacity Utilization" statistical preliminary test of mail delivered to a secure, closed release, (2) the "Minutes of the Federal Open Market mail-handling facility outside the main Federal Committee," (3) the "Testimony of Federal Reserve Officials," (4) the quarterly report "Treasury and Federal Reserve Board building tested positive for anthrax Reserve Foreign Exchange Operations," and (5) the annual exposure that afternoon. report "Domestic Open Market Operations." Board officials notified, and are working with, the FBI. This mail, handled by three Board and three Industrial Production and Capacity Utilization contract employees, all wearing protective environmental suits, has been secured within the mail- How do I obtain the release when it is published? The handling facility. Further testing will be conducted Federal Reserve's monthly G.17 statistical release within this secured facility. Any mail found to be "Industrial Production and Capacity Utilization" is availcontaminated will be sent to a military facility for able as soon as it is released on the Board's web site (www.federalreserve.gov/releases/gl7). The releases are analysis by the FBI. also available in paper copies by subscription and on Since the first public reports of anthrax- diskettes from Publications Services, Mail Stop 127, Board contaminated mail surfaced, the Board has processed of Governors of the Federal Reserve System, Washingall mail through the secure mail-handling facility, and ton, DC 20551 (phone: 202-452-3244). it is not distributed inside Federal Reserve buildings How do I obtain archival copies of the release ? Historical until it has been cleared. data back to 1919 are available on the Board's web site The Board announced that it would be open for (www.federalreserve.gov/releases/gl7). business on Friday, December 7, 2001. However, while the investigation is under way, the Board Where should I direct my questions about the availability of the release? Questions should be directed to Public decided to postpone public events for security Affairs, Mail Stop 58, Board of Governors of the Federal reasons. A public Board meeting scheduled for Reserve System, Washington, DC 20551 (phone: 202-452- 10:00 a.m. that Friday was rescheduled. 3204). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 21 Minutes of the Federal Open Market How do I obtain archival copies of the report? Reports Committee back to 1996 are available on the web site of the Federal Reserve Bank of New York (www.newyorkfed.org/ pihome/news/forex). Paper copies of the reports, including How do I obtain the minutes? When the minutes are those before 1996, are available from the Public Informareleased to the public, usually two days after the next tion Department, Federal Reserve Bank of New York. FOMC meeting, they are simultaneously placed on the Board's public web site (www.federalreserve.gov/fomc). Where should I direct my questions about the availability Paper copies of the minutes are available by subscription of the report? Questions should be directed to the Public from Publications Services, Mail Stop 127, Board of Gov- Information Department, Federal Reserve Bank of New ernors of the Federal Reserve System, Washington, DC York, 33 Liberty Street, New York, NY 10045 (phone: 20551 (phone: 202-452-3244). 212-720-5424). How do I obtain archival copies of the minutes? The minutes are available back to 1996 on the Board's web site (www.federalreserve.gov/fomc); they are also reprinted Domestic Open Market Operations in the Board's Annual Report (www.federalreserve.gov/ boarddocs/RptCongress). Paper copies of the minutes, How do I obtain the annual report "Domestic Open Marincluding those before 1996, are available from Publica- ket Operations" when it is published? This report is pubtions Services. lished annually by the Federal Reserve Bank of New York and is available soon after the end of the year on the web Where should I direct my questions about the availability site of the New York Reserve Bank (www.newyorkfed.org/ of the minutes? Questions should be directed to Public pihome/annual.html). Paper copies of the reports are avail- Affairs, Mail Stop 58, Board of Governors of the Federal able from the Public Information Department, Federal Reserve System, Washington, DC 20551 (phone: 202-452- Reserve Bank of New York, New York, NY 10045 (phone: 3204). 212-720-5424). The text portion of "Domestic Open Market Operations" will be reprinted in the Board's Annual Report beginning with the report for 2001. Testimony of Federal Reserve Officials How do I obtain archival copies of the report? The reports How do I obtain testimony? When testimony is released back to 1996 are available on the web site of the Fedto the public, it is simultaneously placed on the Board's eral Reserve Bank of New York (www.newyorkfed.org/ public web site (www.federalreserve.gov/boarddocs/ pihome/annual.html). Paper copies of the reports, includtestimony). Paper copies are available by subscription ing those before 1996, are available from the Public Inforfrom Publications Services, Mail Stop 127, Board of mation Department, Federal Reserve Bank of New York. Governors of the Federal Reserve System, Washington, DC 20551 (phone: 202-452-3244). Where should I direct my questions about the availability of the report? Questions should be directed to the Public How do I obtain archival copies of testimony? Testimony Information Department, Federal Reserve Bank of New back to 1996 is available on the Board's web site York, 33 Liberty Street, New York, NY 10045 (phone: (www.federalreserve.gov/boarddocs/testimony/1996). 212-720-5424). Paper copies, including testimony before 1996, are available from Publications Services. Where should I direct my questions about the availability PUBLICATION OF THE DECEMBER 2001 UPDATE of testimony? Questions should be directed to Public TO THE BANK HOLDING COMPANY Affairs, Mail Stop 58, Board of Governors of the Federal SUPERVISION MANUAL Reserve System, Washington, DC 20551 (phone: 202-452- 3204). The December 2001 update to the Bank Holding Company Supervision Manual, Supplement No. 21, Treasury and Federal Reserve Foreign has been published and is now available. The Manual Exchange Operations comprises the Federal Reserve System's bank holding company supervisory and inspection guidance. How do I obtain the report when it is published? This The supplement includes new or revised supervisory report is published quarterly by the Federal Reserve Bank of New York. Each quarter's report is available soon after information and examiner guidance on the following: the end of the quarter on the web site of the New York Reserve Bank (www.newyorkfed.org/pihome/news/forex). 1. FFIEC Interagency Policy Statement on the Allow- Paper copies of the reports are available from the Public ance for Loan and Lease Losses Methodologies and Docu- Information Department, Federal Reserve Bank of New mentation for Banks and Savings Institutions. The policy York, 33 Liberty Street, New York, NY 10045 (phone: statement, issued on July 2, 2001, is briefly summarized. 212-720-5424). It clarifies the agencies' expectations for the documenta- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

22 Federal Reserve Bulletin • January 2002 tion that supports the allowance for loan and lease losses issued guidelines, effective July 1, 2001, establishing (ALLL) methodology. The statement supplements existing standards for safeguarding customer information. The guidance and emphasizes the need for appropriate ALLL standards pertain to administrative, technical, and physical policies and procedures, including an effective loan-review safeguards for customer records and information. The system. The statement provides examples of appropriate Federal Reserve's guidelines require FHCs and BHCs to supporting documentation and illustrations on how to establish written information security programs to assess implement this guidance. See Supervision and Regulation and control the risks to customer information. The pro- (SR) Letter 01-17 and its attachment. (SR Letters are the grams must be appropriate for the institution's size, Federal Reserve's primary means of communicating key complexity, nature, and the scope of its operations. (See policy directives to its examiners, supervisory staff, and the SR Letter 01-15.) banking industry. SR Letters can be viewed on the Board's 6. Risk-Based Capital Treatment for Forward Equity public web site at www.federalreserve.gov/board/docs/ Transactions Involving a Banking Organization's Common srletters.) Stock. Some banking organization's common stock, cov- 2. Interagency Guidance on Leveraged Financing. This ered by forward equity transaction agreements, has been federal bank supervisory guidance, issued on April 9, 2001, treated as tier 1 capital. The Federal Reserve determined emphasized the sound risk management of leveraged that any banking organization's common stock that is financing by depository institutions. It focuses on risk covered by forward equity transactions entered into after rating of leveraged-finance loans and how the imputed November 9, 2001, must be excluded from tier 1 capital value of a business (enterprise value) should be evaluated (of a bank holding company or state member bank), other in the risk-rating process. Institutions must use sound valu- than those specified for deferred compensation or other ation methodologies in addition to ongoing stress testing employee benefit plans. (See SR Letter 01-27.) and monitoring of those values. The holding company's board of directors and senior management should consider A more detailed summary of changes is included the guidance as they oversee the holding company's with the update package. The Manual and updates, depository institution subsidiaries and as they supervise the including pricing information, are available from leveraged-financed lending activities of nonbank subsidiaries. (See SR Letter 01-9.) Publications Services, Mail Stop 127, Board of Gov- 3. Intercompany Transactions with Affiliates. Several ernors of the Federal Reserve System, Washingnew interim and final rules, exemptions, and interpretations ton, DC 20551 (or charge by facsimile: 202-728are discussed that pertain to the limitations imposed on 5886). The Manual is also available on the Board's intercompany transactions by sections 23A and 23B of public web site (www.federalreserve.gov/boarddocs/ the Federal Reserve Act. The interpretations and exemptions involve derivatives, intraday extensions of credit, and supmanual). transactions involving depository institution loans made to a customer who uses the loan's proceeds (1) to purchase a security or other asset through a depository institution ENFORCEMENT ACTIONS broker-dealer affiliate that acts as a riskless principal or (2) to purchase a security from a depository institution broker-dealer affiliate when the loan was made pursuant Federal and state banking regulators announced on to a pre-existing line of credit that was not entered into November 14, 2001, the issuance of a joint order to in contemplation of the purchase of securities from the cease and desist and order of assessment of a civil depository institution affiliate. Another final rule expands money penalty and monetary payment against the the types of securities that are eligible for a bank to pur- State Bank of India, Mumbai, India, and the bank's chase from its registered broker-dealer affiliates under section 23A(d)(6) of the act, consistent with safe and sound three branches in New York, New York, its branch banking practices. in Chicago, Illinois, and its agency in Los Angeles, 4. Consequences of U.S. Depository Institutions of California. Financial Holding Companies Failing to Comply with The State Bank of India, without admitting to any Well-Capitalized, Well-Managed, and CRA Rating Requireallegations, consented to the issuance of the order. ments. This update revises the discussion of the December 2000 Regulation Y standards for U.S. BHCs that are The State Bank of India paid a total of $7.5 million electing to operate as FHCs. The update discusses the in fines under the order issued by the Board of consequences when an FHC controls a depository insti- Governors of the Federal Reserve System, the Fedtution subsidiary that fails to continue meeting the welleral Deposit Insurance Corporation, and the New capitalized and well-managed requirements. It also York State Banking Department. One-half of this includes the consequences when an FHC controls a depository institution subsidiary that fails to maintain a satis- amount will be paid to the U.S. Department of the factory or better Community Reinvestment Act rating. See Treasury and the other half to the State of New York Regulation Y, sections 225.83 and 225.84. For additional under applicable federal and state laws. related statutory, regulatory, and supervisory procedures The fines result from the bank's apparent engageand guidance, see SR Letter 00-01. ment in unsafe and unsound practices related to its 5. Standards for Safeguarding Customer Information. failure to establish and maintain procedures reason- The federal banking agencies, in implementing sections 501 and 505 of the Gramm-Leach-Bliley Act, jointly ably designed to ensure and monitor compliance with Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 23 the Bank Secrecy Act, violations of the FDIC's regu- within the Office of Board Members and the Office lations relating to Bank Secrecy Act compliance, of Staff Director for Management related to failure to maintain correct and accurate books and internal communications, Board publications, and records, and violations of New York State law relat- recruitment. ing to the bank's obligation to maintain accurate books and records and to make reports to the New York State Banking Department. Division of Monetary Affairs Mr. James Clouse has been appointed Assistant The Federal Reserve Board announced on Novem- Director and Chief of Monetary and Financial Marber 16, 2001, the execution of a written agreement ket Analysis, and Mr. William English has been by and among Cerritos Valley Bancorp, Artesia, Caliappointed Assistant Director. fornia; the Cerritos Valley Bank, Artesia, California; and the Federal Reserve Bank of San Francisco. Mr. Clouse has oversight responsibility for the Monetary and Financial Market Analysis Section. He joined the Board in 1989 in the Money and Reserve The Federal Reserve Board announced on Novem- Projections Section, where he moved up to the posiber 28, 2001, the issuance of a cease and desist order tion of senior economist. In 1998, he became Chief of against the Gulf Bank, Miami, Florida. the Monetary and Financial Market Analysis Section. Mr. Clouse holds a bachelor's degree in economics The Federal Reserve Board announced on Decemfrom Princeton University and master's and doctoral ber 3, 2001, the execution of a written agreement by degrees in economics from Northwestern University. and among the Bank of Little Rock, Little Rock, Mr. English is responsible for overseeing the Arkansas, the Federal Reserve Bank of St. Louis, and work of the Banking Analysis Section. This includes the Arkansas State Bank Department. overseeing the construction, projection, publication, interpretation, and seasonal adjustment of bank credit aggregates and monitoring developments in commer- BOARD ORGANIZATIONAL AND STAFF CHANGES cial banking. Coming from the faculty of the Univer- The Board has approved the following organizational sity of Pennsylvania, Mr. English joined the Board changes, changes in officer assignments, and officer in 1992 as an economist in the Banking and Money appointments, effective December 17, 2001. Market Statistics Section. Mr. English has a bachelor's degree in mathematics and economics from Yale College and a doctorate in economics from MIT. Management Division Mr. William Whitesell has been promoted to Deputy Associate Director over Money and Reserve The Division of Support Services will merge with the Analysis and Monetary Studies. Management Division. Mr. William R. Jones has Mr. Richard Porter will become Senior Adviser, been appointed director of the newly constituted responsible for overseeing the recruitment of econodivision. mists and planning and budgeting of information The EEO Programs Office will be transferred from resources. the Management Division to the Office of the Staff Director for Management. Reorganization of the Division of Reserve Bank Operations and Payment Systems Office of Board Members A new section, Clearance and Settlement, has been Mr. Donald Winn, Assistant to the Board, will created in the Division of Reserve Bank Operations assume the role of division director. Ms. Michelle and Payment Systems. The section will develop and Smith, Assistant to the Board, has been promoted and shape policies that foster sound risk controls, prowill continue to manage the Public Affairs Office. mote efficiency, and serve as a source of technical She will become Senior Adviser to the Board for and policy expertise on clearing and settlement communications policy and serve as assistant secre- issues. Mr. Jeff Stehm, Assistant Director, will protary to the FOMC. vide oversight of the new section. Ms. Lynn Fox, Assistant to the Board, will assume Mr. Jack Walton has been appointed Assistant responsibility for coordinating projects under way Director. He will have oversight responsibility for the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

24 Federal Reserve Bulletin • January 2002 division's Retail Payments and Wholesale Payments Information Center (NIC), and Banking Organization Programs. Since 1999, Mr. Walton has been the man- National Desktop (BOND) programs. Mr. Taylor ager of the Retail Payments Program. He joined the joined the Board in 1970 and has managed various Board in 1977 as an economist in the Division of sections in the Division of Information Technology. Research and Statistics. He moved to the Division of He has managed the development of many of the Reserve Bank Operations in 1982 to assist in the Board's most complex and critical software developimplementation of the priced-services requirements ment projects. Mr. Taylor holds a bachelor's degree of the Monetary Control Act. In 1994, he became in economics from Dickinson College. manager of the Check Payments Section. Mr. Walton Ms. Tillena Clark, Assistant Director, will comreceived his bachelor's degree in economics and plete her rotational assignment in the Division of mathematics from Rockhurst College and his mas- Reserve Bank Operations and Payment Systems. She ter's degree in economics from the University of will return to the division and assume responsibility Maryland. of the Financial Systems Branch and the division's administrative function. Ms. Sharon Mowry, Assistant Director, will begin Division of Information Technology a rotational assignment in February 2002 to the Office of the Secretary as Visiting Assistant Secretary. Mr. Robert Taylor has been appointed Assistant On November 26, 2001, the Board announced that Director and will be responsible for planning and Raymond H. Massey, associate director in the Divimanaging program resources of the Supervisory sion of Information Technology, would retire on Systems Branch, including statistical data collection, December 3, 2001, after more than twenty-nine years information systems development for the National of service at the Federal Reserve Board. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

25 Legal Developments FINAL RULE-AMENDMENT TO REGULATION A consummation exceed the greater of $400 or 8 percent of the total loan amount. In keeping with the statute, the The Board of Governors is amending 12 C.F.R. Part 201, Board has annually adjusted the $400 amount based on the its Regulation A (Extensions of Credit by Federal Reserve annual percentage change reflected in the Consumer Price Banks; Change in Discount Rate), to reflect its approval of Index that is in effect on June 1. The adjusted dollar a decrease in the basic discount rate at each Federal amount for 2002 is $480. Reserve Bank. The Board acted on requests submitted by Effective January 1, 2002, 12 C.F.R. Part 226 is amended the Boards of Directors of the twelve Federal Reserve as follows: Banks. Effective November 6, 2001, 12 C.F.R. Part 201 is Part 226— Truth in Lending (Regulation Z) amended as follows: Part 201—Extensions of Credit by Federal Reserve 1. The authority citation for Part 226 continues to read as Banks (Regulation A) follows: 1. The authority citation for 12 C.F.R. Part 201 continues Authority: 12 U.S.C. 3806; 15 U.S.C. 1604 and 1637(c)(5). to read as follows: Authority. 12U.S.C. 343 et seq., 347a, 347b, 347c, 347d, 2. In Supplement I to Part 226, under Section 226.32— 348 et seq., 357, 374, 374a and 461. Requirements for Certain Closed-End Home Mortgages, under Paragraph 32(a)(l)(ii), paragraph 2.vii. is added. 2. Section 201.51 is revised to read as follows: Supplement I to Part 226-Official Staff Section 201.51—Adjustment credit for depository Interpretations institutions. The rates for adjustment credit provided to depository institutions under section 201.3(a) are: Subpart E-Special Rules for Certain Home Mortgage Transactions Federal Reserve Bank Rate Effective Boston 1.5 November 8, 2001 New York 1.5 November 6, 2001 Philadelphia 1.5 November 7, 2001 Cleveland 1.5 November 8, 2001 Richmond 1.5 November 6, 2001 Section 226.32—Requirements for Certain Atlanta 1.5 November 8, 2001 Chicago 1.5 November 7, 2001 Closed-End Home Mortgages St. Louis 1.5 November 7, 2001 Minneapolis 1.5 November 7, 2001 Kansas City 1.5 November 8, 2001 32(a) Coverage Dallas 1.5 November 8, 2001 San Francisco 1.5 November 6, 2001 FINAL RULE-AMENDMENT TO REGULATION Z Paragraph 32(a)(l)(ii) The Board of Governors is amending 12 C.F.R. Part 226, its Regulation Z (Truth in Lending). The final rule amends the staff commentary that interprets the requirements of 2. Annual adjustment of $400 amount. Regulation Z. The Board is required to adjust annually the dollar amount that triggers requirements for certain mortgages bearing fees above a certain amount. The Home Ownership and Equity Protection Act of 1994 (HOEPA) vii. For 2002, $480, reflecting a 3.27 percent increase in sets forth rules for home-secured loans in which the total the CPI-U from June 2000 to June 2001, rounded to points and fees payable by the consumer at or before loan the nearest whole dollar. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

26 Federal Reserve Bulletin • January 2002 JOINT FINAL RULE—AMENDMENT TO RISK-BASED Authority. 12 U.S.C. 24, 24a, 36, 92a, 93a, 248(a), 248(c), CAPITAL GUIDELINES, CAPITAL ADEQUACY 321-338a, 371d, 461, 481-486, 601, 611, 1814, 1816, GUIDEUNES, AND CAPITAL MAINTENANCE 1818, 1820(d)(9), 1823(j), 1828(o), 1831o, 1831p-l, 183 lr-1, 1831w, 1835a, 1882, 2901-2907, 3105, 3310, The Office of the Comptroller of the Currency (OCC), the 3331-3351, and 3906-3909; 15 U.S.C. 78b, 781(b), 781(g), Board of Governors of the Federal Reserve System 781(i), 78o-4(c)(5), 78q, 78q-l, and 78w; 31 U.S.C. 5318; (Board), the Federal Deposit Insurance Corporation 42 U.S.C. 4012a, 4104a, 4104b, 4106, and 4128. (FDIC), and the Office of Thrift Supervision (OTS) (collectively, the agencies) are changing their regulatory capital 2. In Appendix A to Part 208: standards to address the treatment of recourse obligations, residual interests and direct credit substitutes that expose A. The three introductory paragraphs of section II, the first banks, bank holding companies, and thrifts (collectively, five paragraphs of section II.A.l, and the first seven banking organizations) primarily to credit risk. The final paragraphs of section II.A.2. are revised and footnote 5 rule treats recourse obligations and direct credit substitutes is removed and reserved; more consistently than the agencies' current risk-based B. In section II.B., a new paragraph (i)(c) is added, section capital standards and adds new standards for the treatment II.B.l.b. and footnote 14 are revised, new sections of residual interests, including a concentration limit for II.B.l.c. through II.B.l.g. are added, and section II.B.4. credit-enhancing interest-only strips. In addition, the agen- is revised; cies use credit ratings and certain alternative approaches to C. In section III.A., a new undesignated fifth paragraph is match the risk-based capital requirement more closely to a added at the end of the section; banking organization's relative risk of loss for certain D. In section III.B., paragraph 3 is revised and footnote 23 positions in asset securitizations. The final rule does not is removed, and in paragraph 4, footnote 24 is removed; include the proposed requirement that the sponsor of a E. In section III.C., paragraphs 1 through 3, footnotes 25 revolving credit securitization that involves an early amor- through 39 are redesignated as footnotes 23 through 37, tization feature hold capital against the amount of assets and paragraph 4 is revised; under management. F. In section III.D., the introductory paragraph and para- This rule is intended to result in a more consistent graph 1 are revised; treatment for similar transactions among the agencies, G. In sections III.D. and III.E., footnote 46 is removed and more consistent regulatory capital treatment for certain footnotes 47 through 51 are redesignated as footnotes transactions involving similar risk, and capital require- 44 through 48; ments that more closely reflect a banking organization's H. In section IV.B., footnote 52 is removed; and relative exposure to credit risk. I. Attachment II is revised. The text of the other Agencies' final rules can be found in 12 C.F.R. Parts 3, 325, and 567, and was published in Appendix A To Part 208 — Capital Adequacy the Federal Register on November 29, 2001 (66 Federal Guidelines For State Member Banks: Risk-Based Register 59613 (2001)). The Board adopted the amend- Measure ment to Regulation H, Membership of State Banking Institutions in the Federal Reserve System, and Regulation Y, JJ * * * Bank Holding Companies ad Change in Bank Control, 12 C.F.R. Parts 208 and 225, on November 8, 2001. A bank's qualifying total capital consists of two types of Effective January 1, 2002, 12 C.F.R. Parts 208 and 225 capital components: "core capital elements" (comprising are amended as follows. Any transactions settled on or tier 1 capital) and "supplementary capital elements" (comafter January 1, 2002, are subject to this final rule. Banking prising tier 2 capital). These capital elements and the organizations that enter into transactions before January 1, various limits, restrictions, and deductions to which they 2002, may elect early adoption, as of November 29, 2001, are subject, are discussed below and are set forth in Attachof any provision of the final rule that results in a reduced ment II. capital requirement. Conversely, banking organizations that The Federal Reserve will, on a case-by-case basis, deterenter into transactions before January 1, 2002, that result in mine whether and, if so, how much of any instrument that increased capital requirements under the final rule may does not fit wholly within the terms of one of the capital delay the application of this rule to those transactions until categories set forth below or that does not have an ability December 31, 2002. to absorb losses commensurate with the capital treatment otherwise specified below will be counted as an element of tier 1 or tier 2 capital. In making such a determination, the Part 208—Membership of State Banking Federal Reserve will consider the similarity of the instru- Institutions in the Federal Reserve System ment to instruments explicitly treated in the guidelines, the (Regulation H) ability of the instrument to absorb losses while the bank operates as a going concern, the maturity and redemption features of the instrument, and other relevant terms and 1. The authority citation for Part 208 continues to read as factors. To qualify as an element of tier 1 or tier 2 capital, a follows: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 27 g * * * capital instrument may not contain or be covered by any (j) * * * covenants, terms, or restrictions that are inconsistent with safe and sound banking practices. (c) Certain credit-enhancing interest-only strips Redemptions of permanent equity or other capital instru- receivables - deducted from the sum of core ments before stated maturity could have a significant im- capital elements in accordance with sections pact on a bank's overall capital structure. Consequently, a II.B.l.c. through e. of this appendix. bank considering such a step should consult with the Federal Reserve before redeeming any equity or debt capital instrument (prior to maturity) if such redemption could 1. Goodwill, other intangible assets, and residual interhave a material effect on the level or composition of the ests. * * * institution's capital base.4 b. Other intangible assets. i. All servicing assets, including servicing asp^ * * * sets on assets other than mortgages (i.e., 1. Core capital elements (tier 1 capital). The tier 1 nonmortgage servicing assets), are included component of a bank's qualifying capital must repre- in this appendix as identifiable intangible sent at least 50 percent of qualifying total capital and assets. The only types of identifiable intanmay consist of the following items that are defined gible assets that may be included in, that is, as core capital elements: not deducted from, a bank's capital are (i) Common stockholders' equity; readily marketable mortgage servicing as- (ii) Qualifying noncumulative perpetual preferred sets, nonmortgage servicing assets, and purstock (including related surplus); and chased credit card relationships. The total (iii) Minority interest in the equity accounts of conamount of these assets that may be included solidated subsidiaries. in capital is subject to the limitations de- Tier 1 capital is generally defined as the sum of core scribed below in sections II.B.l.d. and e. of capital elements5 less goodwill, other intangible assets, and this appendix. interest-only strips receivables that are required to be deii. The treatment of identifiable intangible asducted in accordance with section II.B.l. of this appendix. sets set forth in this section generally will be used in the calculation of a bank's capital 2. Supplemtary capital elements (tier 2 capital). The ratios for supervisory and applications purtier 2 component of a bank's qualifying capital may poses. However, in making an overall asconsist of the following items that are defined as sessment of a bank's capital adequacy for supplementary capital elements: applications purposes, the Board may, if it (i) Allowance for loan and lease losses (subject to deems appropriate, take into account the limitations discussed below); quality and composition of a bank's capital, (ii) Perpetual preferred stock and related surplus together with the quality and value of its (subject to conditions discussed below); tangible and intangible assets. (iii) Hybrid capital instruments (as defined below), c. Credit-enhancing interest-only strips receivand mandatory convertible debt securities; ables (I/Os). (iv) Term subordinated debt and intermediate-term i. Credit-enhancing I/Os are on-balance sheet preferred stock, including related surplus (sub- assets that, in form or in substance, repreject to limitations discussed below); sent the contractual right to receive some or (v) Unrealized holding gains on equity securities all of the interest due on transferred assets (subject to limitations discussed in section and expose the bank to credit risk directly II.A.2.e. of this appendix). or indirectly associated with transferred as- The maximum amount of tier 2 capital that may be sets that exceeds a pro rata share of the included in a bank's qualifying total capital is limited to bank's claim on the assets, whether through 100 percent of tier 1 capital (net of goodwill, other intangi- subordination provisions or other credit enble assets, and interest-only strips receivables that are hancement techniques. Such I/Os, whether required to be deducted in accordance with section II.B.l. purchased or retained, including other simiof this appendix). lar "spread" assets, may be included in, that is, not deducted from, a bank's capital subject to the limitations described below in sections II.B.l.d. and e. of this appendix. 4. Consultation would not ordinarily be necessary if an instrument ii. Both purchased and retained creditwere redeemed with the proceeds of, or replaced by, a like amount of a enhancing I/Os, on a non-tax adjusted basis, similar or higher quality capital instrument and the organization's are included in the total amount that is used capital position is considered fully adequate by the Federal Reserve. 5. Reserved. for purposes of determining whether a bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

28 Federal Reserve Bulletin • January 2002 exceeds the tier 1 limitation described be- identifiable intangible assets other than low in this section. In determining whether mortgage servicing assets, nonmortgage seran I/O or other types of spread assets serve vicing assets, and purchased credit card reas a credit enhancement, the Federal Re- lationships, prior to the deduction of any serve will look to the economic substance disallowed mortgage servicing assets, any of the transaction. disallowed nonmortgage servicing assets, d. Fair value limitation. The amount of mortgage any disallowed purchased credit card relaservicing assets, nonmortgage servicing assets, tionships, any disallowed credit-enhancing and purchased credit card relationships that a I/Os (both purchased and retained), and any bank may include in capital shall be the lesser disallowed deferred-tax assets, regardless of of 90 percent of their fair value, as determined the date acquired, in accordance with section II.B.l.f. of this ap- iii. Banks may elect to deduct disallowed mortpendix, or 100 percent of their book value, as gage servicing assets, disallowed nonmortadjusted for capital purposes in accordance with gage servicing assets, and disallowed creditthe instructions in the commercial bank Consol- enhancing I/Os (both purchased and idated Reports of Condition and Income (Call retained) on a basis that is net of any associ- Reports). The amount of I/Os that a bank may ated deferred tax liability. Deferred tax liainclude in capital shall be its fair value. If both bilities netted in this manner cannot also be the application of the limits on mortgage servic- netted against deferred-tax assets when deing assets, nonmortgage servicing assets, and termining the amount of deferred-tax assets purchased credit card relationships and the ad- that are dependent upon future taxable injustment of the balance sheet amount for these come. assets would result in an amount being de- f. Valuation. Banks must review the book value ducted from capital, the bank would deduct of all intangible assets at least quarterly and only the greater of the two amounts from its make adjustments to these values as necessary. core capital elements in determining tier 1 capi- The fair value of mortgage servicing assets, tal. nonmortgage servicing assets, purchased credit e. Tier 1 capital limitation. card relationships, and credit-enhancing I/Os i. The total amount of mortgage servicing as- also must be determined at least quarterly. This sets, nonmortgage servicing assets, and pur- determination shall include adjustments for any chased credit card relationships that may be significant changes in original valuation asincluded in capital, in the aggregate, cannot sumptions, including changes in prepayment esexceed 100 percent of tier 1 capital. The timates or account attrition rates. Examiners aggregate of nonmortgage servicing assets will review both the book value and the fair and purchased credit card relationships are value assigned to these assets, together with subject to a separate sublimit of 25 percent supporting documentation, during the examinaof tier 1 capital. In addition, the total tion process. In addition, the Federal Reserve amount of credit-enhancing I/Os (both pur- may require, on a case-by-case basis, an indechased and retained) that may be included pendent valuation of a bank's intangible assets in capital cannot exceed 25 percent of tier 1 or credit-enhancing I/Os. capital.14 g. Growing organizations. Consistent with longii. For purposes of calculating these limitations standing Board policy, banks experiencing subon mortgage servicing assets, nonmortgage stantial growth, whether internally or by acquiservicing assets, purchased credit card rela- sition, are expected to maintain strong capital tionships, and credit-enhancing I/Os, tier 1 positions substantially above minimum supervicapital is defined as the sum of core capital sory levels, without significant reliance on inelements, net of goodwill, and net of all tangible assets or credit-enhancing I/Os. 14. Amounts of servicing assets, purchased credit card relationships, and credit-enhancing I/Os (both retained and purchased) in excess of these limitations, as well as all other identifiable intangible 4. Defferred-tax assets. assets, including core deposit intangibles and favorable leaseholds, are a. The amount of deferred-tax assets that is depento be deducted from a bank's core capital elements in determining tier 1 capital. However, identifiable intangible assets (other than dent upon future taxable income, net of the mortgage servicing assets and purchased credit card relationships) valuation allowance for deferred-tax assets, that acquired on or before February 19, 1992, generally will not be may be included in, that is, not deducted from, a deducted from capital for supervisory purposes, although they will continue to be deducted for applications purposes. bank's capital may not exceed the lesser of: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 29 i. The amount of these deferred-tax assets that appropriate credit conversion factor for any offthe bank is expected to realize within one balance sheet item that does not fit wholly year of the calendar quarter-end date, based within one of the credit conversion factors set on its projections of future taxable income forth below or that imposes risks on a bank that for that year,20 or are incommensurate with the credit conversion factors otherwise specified below for the offii. 10 percent of tier 1 capital. balance sheet item. In making such a determinab. The reported amount of deferred-tax assets, net tion, the Federal Reserve will consider the simof any valuation allowance for deferred-tax asilarity of the asset or off-balance sheet item to sets, in excess of the lesser of these two assets or off-balance sheet items explicitly amounts is to be deducted from a bank's core treated in the guidelines, as well as other relecapital elements in determining tier 1 capital. vant factors, For purposes of calculating the 10 percent limig * * * tation, tier 1 capital is defined as the sum of core capital elements, net of goodwill and net of all identifiable intangible assets other than mort- 3. Recourse obligations, direct credit substitutes, gage servicing assets, nonmortgage servicing residual interests, and asset- and mortgageassets, purchased credit card relationships, prior backed securities. Direct credit substitutes, asto the deduction of any disallowed mortgage sets transferred with recourse, and securities servicing assets, any disallowed nonmortgage issued in connection with asset securitizations servicing assets, any disallowed purchased and structured financings are treated as decredit card relationships, any disallowed creditscribed below. The term "asset securitizations" enhancing I/Os, and any disallowed deferredor "securitizations" in this rule includes structax assets. There generally is no limit in tier 1 tured financings, as well as asset securitization capital on the amount of deferred-tax assets that transactions, can be realized from taxes paid in prior carrya. Definitions — back years or from future reversals of existing i. Credit derivative means a contract taxable temporary differences, but, for banks that have a parent, this may not exceed the that allows one party (the "protection amount the bank could reasonably expect its purchaser") to transfer the credit risk parent to refund. of an asset or off-balance sheet credit exposure to another party (the "protection provider"). The value of a credit derivative is dependent, at least JJJ * * * in part, on the credit performance of ^ The Federal Reserve will, on a case-by-case the "reference asset." basis, determine the appropriate risk weight for ii. Credit-enhancing representations and any asset or credit equivalent amount of an warranties means representations and off-balance sheet item that does not fit wholly warranties that are made or assumed within one of the risk weight categories set in connection with a transfer of assets forth below or that imposes risks on a bank that (including loan servicing assets) and are incommensurate with the risk weight other- that obligate the bank to protect inveswise specified below for the asset or off-balance tors from losses arising from credit sheet item. In addition, the Federal Reserve risk in the assets transferred or the will, on a case-by-case basis, determine the loans serviced. Credit-enhancing representations and warranties include promises to protect a party from 20. To determine the amount of expected deferred-tax assets realiz- losses resulting from the default or able in the next 12 months, an institution should assume that all nonperformance of another party or existing temporary differences fully reverse as of the report date. Projected future taxable income should not include net operating loss from an insufficiency in the value of carry-forwards to be used during that year or the amount of existing the collateral. Credit-enhancing repretemporary diiferences a bank expects to reverse within the year. Such sentations and warranties do not inprojections should include the estimated effect of tax-planning strateclude: gies that the organization expects to implement to realize net operating losses or tax-credit carry-forwards that would otherwise expire 1. Early default clauses and similar during the year. Institutions do not have to prepare a new 12-month warranties that permit the return projection each quarter. Rather, on interim report dates, institutions of, or premium refund clauses may use the future-taxable income projections for their current fiscal year, adjusted for any significant changes that have occurred or are covering, 1-4 family residential expected to occur. first mortgage loans that qualify Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

30 Federal Reserve Bulletin • January 2002 for a 50 percent risk weight for a 6. Purchased loan servicing assets if period not to exceed 120 days the servicer is responsible for from the date of transfer. These credit losses or if the servicer warranties may cover only those makes or assumes creditloans that were originated within enhancing representations and 1 year of the date of transfer; warranties with respect to the 2. Premium refund clauses that loans serviced. Mortgage servicer cover assets guaranteed, in whole cash advances that meet the conor in part, by the U.S. Govern- ditions of section III.B.3.a.viii. of ment, a U.S. Government agency this appendix are not direct credit or a government-sponsored enter- substitutes; and prise, provided the premium re- 7. Clean-up calls on third party asfund clauses are for a period not sets are direct credit substitutes. to exceed 120 days from the date Clean-up calls that are 10 percent of transfer; or or less of the original pool bal- 3. Warranties that permit the return ance that are exercisable at the of assets in instances of misrepre- option of the bank are not direct sentation, fraud or incomplete credit substitutes. documentation. iv. Externally rated means that an instruiii. Direct credit substitute means an ar- ment or obligation has received a rangement in which a bank assumes, credit rating from a nationallyin form or in substance, credit risk recognized statistical rating organizaassociated with an on- or off-balance tion. sheet credit exposure that was not pre- v. Face amount means the notional prinviously owned by the bank (third- cipal, or face value, amount of an party asset) and the risk assumed by off-balance sheet item; the amortized the bank exceeds the pro rata share of cost of an asset not held for trading the bank's interest in the third-party purposes; and the fair value of a tradasset. If the bank has no claim on the ing asset. third-party asset, then the bank's as- vi. Financial assset means cash or other sumption of any credit risk with re- monetary instrument, evidence of spect to the third party asset is a direct debt, evidence of an ownership intercredit substitute. Direct credit substi- est in an entity, or a contract that tutes include, but are not limited to: conveys a right to receive or exchange 1. Financial standby letters of credit cash or another financial instrument that support financial claims on a from another party. third party that exceed a bank's vii. Financial standby letter credit means pro ratashare of losses in the fi- a letter of credit or similar arrangenancial claim; ment that represents an irrevocable 2. Guarantees, surety arrangements, obligation to a third-party beneficiary: credit derivatives, and similar in- 1. To repay money borrowed by, or struments backing financial advanced to, or for the account of, claims that exceed a bank's pro a second party (the account parrata share in the financial claim; ty), or 3. Purchased subordinated interests 2. To make payment on behalf of or securities that absorb more than the account party, in the event their pro rata share of losses from that the account party fails to fulthe underlying assets; fill its obligation to the benefi- 4. Credit derivative contracts under ciary. which the bank assumes more viii. Mortgage servicer cash advance than its pro rata share of credit means funds that a residential mortrisk on a third party exposure; gage loan servicer advances to ensure 5. Loans or lines of credit that pro- an uninterrupted flow of payments, vide credit enhancement for the including advances made to cover financial obligations of an account foreclosure costs or other expenses to party; facilitate the timely collection of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 31 loan. A mortgage servicer cash ad- that meet the conditions of section vance is not a recourse obligation or a III.B.3.a.viii. of this appendix are direct credit substitute if: not recourse arrangements; 1. The servicer is entitled to full re- 3. Retained subordinated interests imbursement and this right is not that absorb more than their pro subordinated to other claims on rata share of losses from the unthe cash flows from the underly- derlying assets; ing asset pool; or 4. Assets sold under an agreement to 2. For any one loan, the servicer's repurchase, if the assets are not obligation to make nonreimburs- already included on the balance able advances is contractually sheet; limited to an insignificant amount 5. Loan strips sold without contracof the outstanding principal bal- tual recourse where the maturity ance of that loan. of the transferred loan is shorter ix. Nationally recognized statistical rat- than the maturity of the commiting organization (NRSRO) means an ment under which the loan is entity recognized by the Division of drawn; Market Regulation of the Securities 6. Credit derivatives issued that aband Exchange Commission (or any sorb more than the bank's pro successor Division) (Commission) as rata share of losses from the a nationally recognized statistical rat- transferred assets; and ing organization for various purposes, 7. Clean-up calls at inception that including the Commission's uniform are greater than 10 percent of the net capital requirements for brokers balance of the original pool of and dealers. transferred loans. Clean-up calls x. Recourse means the retention, by a that are 10 percent or less of the bank, in form or in substance, of any original pool balance that are excredit risk directly or indirectly asso- ercisable at the option of the bank ciated with an asset it has transferred are not recourse arrangements. and sold that exceeds a pro rata share xi. Residual interest means any onof the bank's claim on the asset. If a balance sheet asset that represents an bank has no claim on a transferred interest (including a beneficial interasset, then the retention of any risk of est) created by a transfer that qualifies credit loss is recourse. A recourse ob- as a sale (in accordance with generligation typically arises when a bank ally accepted accounting principles) transfers assets and retains an explicit of financial assets, whether through a obligation to repurchase the assets or securitization or otherwise, and that absorb losses due to a default on the exposes the bank to credit risk dipayment of principal or interest or rectly or indirectly associated with the any other deficiency in the perfor- transferred assets that exceeds a pro mance of the underlying obligor or rata share of the bank's claim on the some other party. Recourse may also assets, whether through subordination exist implicitly if a bank provides provisions or other credit enhancecredit enhancement beyond any con- ment techniques. Residual interests tractual obligation to support assets it generally include credit-enhancing has sold. The following are examples I/Os, spread accounts, cash collateral of recourse arrangements: accounts, retained subordinated inter- 1. Credit-enhancing representations ests, other forms of overand warranties made on the trans- collateralization, and similar assets ferred assets; that function as a credit enhancement. Residual interests further include 2. Loan servicing assets retained those exposures that, in substance, pursuant to an agreement under cause the bank to retain the credit risk which the bank will be responsiof an asset or exposure that had qualible for credit losses associated fied as a residual interest before it was with the loans being serviced. sold. Residual interests generally do Mortgage servicer cash advances Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

32 Federal Reserve Bulletin • January 2002 not include interests purchased from a for which the bank directly or indithird party, except that purchased rectly retains or assumes credit risk credit-enhancing I/Os are residual in- multiplied by a 100 percent converterests for purposes of this appendix. sion factor, xii. Risk participation means a participa- ii. Risk-weight factor. To determine the tion in which the originating party bank's risk-weight factor for offremains liable to the beneficiary for balance sheet recourse obligations and the full amount of an obligation (e.g., direct credit substitutes, the credit a direct credit substitute) notwith- equivalent amount is assigned to the standing that another party has ac- risk category appropriate to the obliquired a participation in that obliga- gor in the underlying transaction, aftion. ter considering any associated guaranxiii. Securitization means the pooling and tees or collateral. For a direct credit repackaging by a special purpose en- substitute that is an on-balance sheet tity of assets or other credit exposures asset (e.g., a purchased subordinated into securities that can be sold to in- security), a bank must calculate riskvestors. Securitization includes trans- weighted assets using the amount of actions that create stratified credit risk the direct credit substitute and the full positions whose performance is de- amount of the assets it supports, i.e., pendent upon an underlying pool of all the more senior positions in the credit exposures, including loans and structure. The treatment of direct commitments. credit substitutes that have been syndixiv. Structured finance program means a cated or in which risk participations program where receivable interests have been conveyed or acquired is set and asset-backed securities issued by forth in section III.D. 1 of this appendix, multiple participants are purchased by c. Externally-rated positions: credit equivaa special purpose entity that repack- lent amounts and risk weights of recourse ages those exposures into securities obligations, direct credit substitutes, residthat can be sold to investors. Struc- ual interests, and asset- and mortgagetured finance programs allocate credit backed securities (including asset-backed risks, generally, between the partici- commercial paper). pants and credit enhancement pro- i. Traded positions. With respect to a vided to the program. recourse obligation, direct credit subxv. Traded position means a position that stitute, residual interest (other than a is externally rated and is retained, as- credit-enhancing I/O strip) or assetsumed, or issued in connection with and mortgage-backed security (inan asset securitization, where there is cluding asset-backed commercial paa reasonable expectation that, in the per) that is a traded position and that near future, the rating will be relied has received an external rating on a upon by unaffiliated investors to pur- long-term position that is one grade chase the position; or an unaffiliated below investment grade or better or a third party to enter into a transaction short-term rating that is investment involving the position, such as a pur- grade, the bank may multiply the face chase, loan, or repurchase agreement. amount of the position by the approb. Credit equivalent amounts and risk weight priate risk weight, determined in acof recourse obligations and direct credit cordance with the tables below. substitutes. Stripped mortgage-backed securities i. Credit equivalent amount. Except as and other similar instruments, such as otherwise provided in sections interest-only or principal-only strips III.B.3.C. through f. and III.B.5. of that are not credit enhancements, must this appendix, the credit equivalent be assigned to the 100 percent risk amount for a recourse obligation or category. If a traded position has redirect credit substitute is the full ceived more than one external rating, amount of the credit-enhanced assets the lowest single rating will apply. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 33 Long-term Rating the unrated position until the unrated posi- Examples Risk Weight Category tion matures. Capital requirement for residual interests - Highest or second highest investment grade AAA, AA 20 percent i. Capital requirement for creditenhancibg I/O strips. After applying Third highest investment the concentration limit to creditgrade A 50 percent Lowest investment grade BBB 100 percent enhancing I/O strips (both purchased One category below investment grade BB 200 percent and retained) in accordance with sections II.B.2.C. through e. of this ap- Short-term Rating Examples Risk Weight pendix, a bank must maintain risk- Highest investment based capital for a credit-enhancing grade A-1, P-1 20 percent Second highest I/O strip (both purchased and reinvestment grade A-2, P-2 50 percent tained), regardless of the external rat- Lowest investment grade A-3, P-3 100 percent ing on that position, equal to the remaining amount of the creditenhancing I/O strip (net of any ii. Non-traded positions A recourse obli- existing associated deferred tax liabilgation, direct credit substitute, or re- ity), even if the amount of risk-based sidual interest (but not a credit- capital required to be maintained exenhancing I/O strip) extended in ceeds the full risk-based capital reconnection with a securitization that quirement for the assets transferred. is not a traded position may be as- Transactions that, in substance, result signed a risk weight in accordance in the retention of credit risk associwith section III.B.3.c.i. of this appen- ated with a transferred creditdix if: enhancing I/O strip will be treated as 1. It has been externally rated by if the credit-enhancing I/O strip was more than one NRSRO; retained by the bank and not trans- 2. It has received an external rating ferred. on a long-term position that is one ii. Capital requirement for other residgrade below investment grade or ual interests. better or on a short-term position 1. If a residual interest does not meet that is investment grade by all the requirements of sections NRSROs providing a rating; III.B.3.c.or d. of this appendix, a 3. The ratings are publicly available; bank must maintain risk-based and capital equal to the remaining 4. The ratings are based on the same amount of the residual interest criteria used to rate traded posi- that is retained on the balance tions. If the ratings are different, sheet (net of any existing associthe lowest rating will determine ated deferred tax liability), even if the risk category to which the re- the amount of risk-based capital course obligation, direct credit required to be maintained exceeds substitute, or residual interest will the full risk-based capital requirebe assigned. ment for the assets transferred. d. Senior positions not externally rated. For a Transactions that, in substance, recourse obligation, direct credit substitute, result in the retention of credit residual interest, or asset- or mortgage- risk associated with a transferred backed security that is not externally rated residual interest will be treated as but is senior or preferred in all features to a if the residual interest was retraded position (including collateralization tained by the bank and not transand maturity), a bank may apply a risk ferred. weight to the face amount of the senior 2. Where the aggregate capital reposition in accordance with section quirement for residual interests III.B.3.c.i. of this appendix, based on the and other recourse obligation in traded position, subject to any current or connection with the same transfer prospective supervisory guidance and the of assets exceed the full riskbank satisfying the Federal Reserve that this based capital requirement for treatment is appropriate. This section will those assets, a bank must mainapply only if the traded subordinated posi- tain risk-based capital equal to the tion provides substantive credit support to greater of the risk-based capital Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

34 Federal Reserve Bulletin • January 2002 requirement for the residual inter- the risk associated with the underest as calculated under section lying loans or borrowers, and the III.B.3.e.ii.7 of this appendix or risk associated with the structure the full risk-based capital require- of a particular securitization transment for the assets transferred, action; f. Positions that are not rated by an NRSRO. 4. The bank's internal credit risk A position (but not a residual interest) main- system must identify gradations tained in connection with a securitization of risk among "pass" assets and and that is not rated by a NRSRO may be other risk positions; risk-weighted based on the bank's determi- 5. The bank must have clear, exnation of the credit rating of the position, as plicit criteria that are used to classpecified in the table below, multiplied by sify assets into each internal risk the face amount of the position. In order to grade, including subjective facobtain this treatment, the bank's system for tors; determining the credit rating of the position 6. The bank must have independent must meet one of the three alternative stan- credit risk management or loan dards set out in sections III.B.3.f.i. through review personnel assigning or re- III.B.3.f.iii. of this appendix. viewing the credit risk ratings; 7. The bank must have an internal Rating Category Examples Risk Weight audit procedure that periodically verifies that the internal credit risk Highest or second ratings are assigned in accordance highest investment grade AAA,AA 100 percent with the established criteria; Third highest investment 8. The bank must monitor the perforgrade A 100 percent mance of the internal credit risk Lowest investment grade BBB 100 percent One category below ratings assigned to nonrated, noninvestment grade BB 200 percent traded direct credit substitutes over time to determine the approi. Internal risk rating used for asset- priateness of the initial credit risk backed programs. A direct credit sub- rating assignment and adjust indistitute (other than a purchased credit- vidual credit risk ratings, or the enhancing I/O) is assumed in overall internal credit risk ratings connection with an asset-backed com- system, as needed; and mercial paper program sponsored by 9. The internal credit risk system the bank and the bank is able to dem- must make credit risk rating asonstrate to the satisfaction of the Fed- sumptions that are consistent eral Reserve, prior to relying upon its with, or more conservative than, use, that the bank's internal credit risk the credit risk rating assumptions rating system is adequate. Adequate and methodologies of NRSROs. internal credit risk rating systems usu- ii. Program Ratings. A direct credit subally contain the following criteria: stitute or recourse obligation (other 1. The internal credit risk system is than a residual interest) is assumed or an integral part of the bank's risk retained in connection with a strucmanagement system, which ex- tured finance program and a NRSRO plicitly incorporates the full range has reviewed the terms of the proof risks arising from a bank's par- gram and stated a rating for positions ticipation in securitization activi- associated with the program. If the ties; program has options for different 2. Internal credit ratings are linked combinations of assets, standards, into measurable outcomes, such as ternal credit enhancements and other the probability that the position relevant factors, and the NRSRO will experience any loss, the posi- specifies ranges of rating categories to tion's expected loss given default, them, the bank may apply the rating and the degree of variance in category that corresponds to the losses given default on that posi- bank's position. In order to rely on a tion; program rating, the bank must demon- 3. The bank's internal credit risk strate to the Federal Reserve's satissystem must separately consider faction that the credit risk rating as- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 35 signed to the program meets the same capital requirement for the underlying standards generally used by NRSROs loans, calculated as if the bank continfor rating traded positions. The bank ued to hold these loans as on-balance must also demonstrate to the Federal sheet assets. Reserve's satisfaction that the criteria Related on-balance sheet asssets. If a underlying the NRSRO's assignment recourse obligation or direct credit of ratings for the program are satisfied substitute subject to section III.B.3. of for the particular position. If a bank this appendix also appears as a balparticipates in a securitization spon- ance sheet asset, the balance sheet sored by another party, the Federal asset is not included in a bank's risk- Reserve may authorize the bank to weighted assets to the extent the value use this approach based on a program- of the balance sheet asset is already matic rating obtained by the sponsor included in the off-balance sheet of the program. credit equivalent amount for the reiii. Computer Program. The bank is us- course obligation or direct credit subing an acceptable credit assessment stitute, except in the case of loan sercomputer program to determine the vicing assets and similar rating of a direct credit substitute or arrangements with embedded rerecourse obligation (but not residual course obligations or direct credit substitutes. In that case, both the oninterest) issued in connection with a balance sheet assets and the related structured finance program. A recourse obligations and direct credit NRSRO must have developed the substitutes must be separately riskcomputer program, and the bank must weighted and incorporated into the demonstrate to the Federal Reserve's risk-based capital calculation. satisfaction that ratings under the program correspond credibly and reliably with the rating of traded positions. Limitations on risk-based capital require- C. * * ments. 4. Category 4: 100 percent. i. Low-level exposure. If the maximum a. All assets not included in the categories contractual exposure to loss retained above are assigned to this category, which or assumed by a bank in connection comprises standard risk assets. The bulk of with a recourse obligation or a direct the assets typically found in a loan portfolio credit substitute is less than the effec- would be assigned to the 100 percent catetive risk-based capital requirement for gory. the enhanced assets, the risk-based b. This category includes long-term claims on, capital requirement is limited to the and the portions of long-term claims that maximum contractual exposure, less are guaranteed by, non-OECD banks, and any recourse liability account estab- all claims on non-OECD central governlished in accordance with generally ments that entail some degree of transfer accepted accounting principles. This risk.36 This category includes all claims on limitation does not apply when a bank foreign and domestic private-sector obligors provides credit enhancement beyond not included in the categories above (includany contractual obligation to support ing loans to nondepository financial instituassets it has sold. tions and bank holding companies); claims ii. Mortgage-related securities or particon commercial firms owned by the public ipation certificates retained in a mortsector; customer liabilities to the bank on gage loan swap. If a bank holds a acceptances outstanding involving standard mortgage-related security or a particirisk claims;37 investments in fixed assets, pation certificate as a result of a mortgage loan swap with recourse, capital is required to support the recourse 36. Such assets include all nonlocal currency claims on, and the obligation plus the percentage of the portions of claims that are guaranteed by, non-OECD central governmortgage-related security or partici- ments and those portions of local currency claims on, or guaranteed pation certificate that is not covered by, non-OECD central governments that exceed the local currency by the recourse obligation. The total liabilities held by the bank. 37. Customer liabilities on acceptances outstanding involving nonamount of capital required for the onstandard risk claims, such as claims on U.S. depository institutions, balance sheet asset and the recourse are assigned to the risk category appropriate to the identity of the obligation, however, is limited to the obligor or, if relevant, the nature of the collateral or guarantees Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

36 Federal Reserve Bulletin • January 2002 premises, and other real estate owned; com- an asset or transaction supported, in whole mon and preferred stock of corporations, or in part, by a direct credit substitute or a including stock acquired for debts previ- recourse obligation. Direct credit substitutes ously contracted; all stripped mortgage- and recourse obligations are defined in secbacked securities and similar instruments; tion III.B.3. of this appendix. and commercial and consumer loans (ex- b. Sale and repurchase agreements and forcept those assigned to lower risk categories ward agreements. Forward agreements are legally binding contractual obligations to due to recognized guarantees or collateral purchase assets with certain drawdown at a and loans secured by residential property specified future date. Such obligations inthat qualify for a lower risk weight). clude forward purchases, forward forward c. Also included in this category are industrialdeposits placed,39 and partly-paid shares and development bonds and similar obligations securities; they do not include commitments issued under the auspices of states or politito make residential mortgage loans or forcal subdivisions of the OECD-based group ward foreign exchange contracts. of countries for the benefit of a private party c. Securities lent by a bank are treated in one or enterprise where that party or enterprise, of two ways, depending upon whether the not the government entity, is obligated to lender is at risk of loss. If a bank, as agent pay the principal and interest, and all obligafor a customer, lends the customer's securitions of states or political subdivisions of ties and does not indemnify the customer countries that do not belong to the OECD- against loss, then the transaction is excluded based group. from the risk-based capital calculation. If, d. The following assets also are assigned a risk alternatively, a bank lends its own securities weight of 100 percent if they have not been or, acting as agent for a customer, lends the deducted from capital: investments in un- customer's securities and indemnifies the consolidated companies, joint ventures, or customer against loss, the transaction is conassociated companies; instruments that verted at 100 percent and assigned to the qualify as capital issued by other banking risk weight category appropriate to the obliorganizations; and any intangibles, includ- gor, or, if applicable, to any collateral deliving those that may have been grandfathered ered to the lending bank, or the independent into capital. custodian acting on the lending bank's behalf. Where a bank is acting as agent for a customer in a transaction involving the £) * * * lending or sale of securities that is collater- The face amount of an off-balance sheet item is alized by cash delivered to the bank, the generally incorporated into risk-weighted assets in transaction is deemed to be collateralized by two steps. The face amount is first multiplied by a cash on deposit in the bank for purposes of credit conversion factor, except for direct credit sub- determining the appropriate risk-weight catstitutes and recourse obligations as discussed in sec- egory, provided that any indemnification is tion III.D. 1. of this appendix. The resultant credit limited to no more than the difference beequivalent amount is assigned to the appropriate risk tween the market value of the securities and category according to the obligor or, if relevant, the the cash collateral received and any reinguarantor or the nature of the collateral.38 Attach- vestment risk associated with that cash colment IV to this appendix sets forth the conversion lateral is borne by the customer. factors for various types of off-balance sheet items. d. In the case of direct credit substitutes in 1. Items with a 100 percent conversion factor. which a risk participation40 has been cona. Except as otherwise provided in section veyed, the full amount of the assets that are III.B.3. of this appendix, the full amount of supported, in whole or in part, by the credit enhancement are converted to a credit equivalent amount at 100 percent. However, backing the claims. Portions of acceptances conveyed as risk partici- the pro rata share of the credit equivalent pations to U.S. depository institutions or foreign banks are assigned to amount that has been conveyed through a the 20 percent risk category appropriate to short-term claims guaranteed by U.S. depository institutions and foreign banks. 38. The sufficiency of collateral and guarantees for off-balance-sheet items is determined by the market value of the collateral or the amount 39. Forward forward deposits accepted are treated as interest rate of the guarantee in relation to the face amount of the item, except for contracts. derivative contracts, for which this determination is generally made in 40. That is, a participation in which the originating bank remains relation to the credit equivalent amount. Collateral and guarantees are liable to the beneficiary for the full amount of the direct credit subject to the same provisions noted under section III.B. of this substitute if the party that has acquired the participation fails to pay appendix A. when the instrument is drawn. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 37 risk participation is assigned to whichever Appendix B To Part 208—Capital Adequacy risk category is lower: the risk category Guidelines For State Member Banks: Tier 1 appropriate to the obligor, after considering Leverage Measure any relevant guarantees or collateral, or the risk category appropriate to the institution acquiring the participation.41 Any remain- jj * * * der is assigned to the risk category appropri- b. A bank's tier 1 leverage ratio is calculated by ate to the obligor, guarantor, or collateral. dividing its tier 1 capital (the numerator of the For example, the pro rata share of the full ratio) by its average total consolidated assets amount of the assets supported, in whole or (the denominator of the ratio). The ratio will in part, by a direct credit substitute con- also be calculated using period-end assets veyed as a risk participation to a U.S. do- whenever necessary, on a case-by-case basis. mestic depository institution or foreign bank For the purpose of this leverage ratio, the definiis assigned to the 20 percent risk category.42 tion of tier 1 capital as set forth in the riske. In the case of direct credit substitutes in based capital guidelines contained in appendix which a risk participation has been acquired, A of this part will be used.2 As a general matter, the acquiring bank's percentage share of the average total consolidated assets are defined as direct credit substitute is multiplied by the the quarterly average total assets (defined net of full amount of the assets that are supported, the allowance for loan and lease losses) rein whole or in part, by the credit enhance- ported on the bank's Reports of Condition and Income (Call Reports), less goodwill; amounts ment and converted to a credit equivalent of mortgage servicing assets, nonmortgage seramount at 100 percent. The credit equivavicing assets, and purchased credit card relalent amount of an acquisition of a risk partionships that, in the aggregate, are in excess of ticipation in a direct credit substitute is as- 100 percent of tier 1 capital; amounts of nonsigned to the risk category appropriate to mortgage servicing assets, purchased credit card the account party obligor or, if relevant, the relationships that, in the aggregate, are in exnature of the collateral or guarantees. cess of 25 percent of tier 1 capital; amounts of f. In the case of direct credit substitutes that credit-enhancing interest-only strips that are in take the form of a syndication where each excess of 25 percent of tier 1 capital; all other bank is obligated only for its pro rata share identifiable intangible assets; any investments of the risk and there is no recourse to the in subsidiaries or associated companies that the originating bank, each bank will only in- Federal Reserve determines should be deducted clude its pro rata share of the assets supfrom tier 1 capital; and deferred tax assets that ported, in whole or in part, by the direct are dependent upon future taxable income, net credit substitute in its risk-based capital calof their valuation allowance, in excess of the culation 43 limitation set forth in section II.B.4 of appendix A of this part.3 Attachment II—Summary of Definition of Qualifying Capital for State Member Banks* 3. In Appendix B to part 208, section Il.b is revised to read as follows: 2. Tier 1 capital for state member banks includes common equity, minority interest in the equity accounts of consolidated subsidiaries, and qualifying noncumulative perpetual preferred stock. In addition, 41. A risk participation in bankers acceptances conveyed to other as a general matter, tier 1 capital excludes goodwill; amounts of institutions is also assigned to the risk category appropriate to the mortgage servicing assets, nonmortgage servicing assets, and purinstitution acquiring the participation or, if relevant, the guarantor or chased credit card relationships that, in the aggregate, exceed 100 nature of the collateral. percent of tier 1 capital; amounts of nonmortgage servicing assets and 42. Risk participations with a remaining maturity of over one year purchased credit card relationships that, in the aggregate, exceed 25 that are conveyed to non-OECD banks are to be assigned to the 100 percent of tier 1 capital; amounts of credit-enhancing interest-only percent risk category, unless a lower risk category is appropriate to the strips in excess of 25 percent of tier 1 capital; all other identifiable obligor, guarantor, or collateral. intangible assets; and deferred tax assets that are dependent upon 43. For example, if a bank has a 10 percent share of a $10 future taxable income, net of their valuation allowance, in excess of syndicated direct credit substitute that provides credit support to a certain limitations. The Federal Reserve may exclude certain invest- $100 loan, then the bank's $1 pro rata share in the enhancement ments in subsidiaries or associated companies as appropriate. means that a $10 pro rata share of the loan is included in risk 3. Deductions from tier 1 capital and other adjustments are disweighted assets. cussed more fully in section II.B. of appendix A of this part. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

38 Federal Reserve Bulletin • January 2002 Part 225—Bank Holding Companies and Change in Federal Reserve will consider the similarity of the Bank Control (Regulation Y) instrument to instruments explicitly treated in the guidelines, the ability of the instrument to absorb 1. The authority citation for part 225 continues to read as losses while the institution operates as a going confollows: cern, the maturity and redemption features of the instrument, and other relevant terms and factors. To Authority: 12 U.S.C. 1817(j)(13), 1818, 1828(o), 1831i, qualify as an element of tier 1 or tier 2 capital, a 1831p-l, 1843(c)(8), 1843(k), 1844(b), 1972(1), 3106, capital instrument may not contain or be covered by 3108, 3310, 3331-3351, 3907, and 3909. any covenants, terms, or restrictions that are inconsistent with safe and sound banking practices. 2. In appendix A to part 225: Redemptions of permanent equity or other capital A. The three introductory paragraphs of section II, the instruments before stated maturity could have a sigfirst six paragraphs of section II.A.l, and the first nificant impact on an organization's overall capital seven paragraphs of section II.A.2. are revised and structure. Consequently, an organization considering footnote 6 is removed and reserved; such a step should consult with the Federal Reserve B. In section II.B., a new paragraph (i)(c) is added, before redeeming any equity or debt capital instrusection II.B.l.b. and footnote 15 are revised, new ment (prior to maturity) if such redemption could sections II.B.I.e. through II.B.l.g. are added, and have a material eifect on the level or composition of section II.B.4. is revised; the organization's capital base.5 C. In section III.A., a new undesignated fourth paragraph is added at the end of the section; D. In section III.B., paragraph 3 is revised and footnote p^ * * * 26 is removed, and in paragraph 4, footnote 27 is 1. Core capital elements (tier 1 capital). The removed; tier 1 component of an institution's qualify- E. In section III.C., paragraphs 1 through 4, footnotes ing capital must represent at least 50 per- 28 through 42 are redesignated as footnotes 26 cent of qualifying total capital and may through 40, and paragraph 4 is revised; consist of the following items that are de- F. In section III.D., the introductory paragraph and fined as core capital elements: paragraph 1 are revised; G. In sections III.D. and III.E., footnotes 50 and 52 are (i) Common stockholders' equity; removed, footnote 51 is redesignated as footnote 47, (ii) Qualifying noncumulative perpetual footnotes 53 through 55 are redesignated as foot- preferred stock (including related surnotes 48 through 50; plus); H. In sections IV.A. and IV.B., footnote 57 is removed (iii) Qualifying cumulative perpetual preand footnote 56 is redesignated as footnote 51; and ferred stock (including related sur- I. Attachment II is revised. plus), subject to certain limitations described below; and Appendix A To Part 225-Capital Adequacy (iv) Minority interest in the equity ac- Guidelines For Bank Holding Companies: counts of consolidated subsidiaries. Risk-Based Measure Tier 1 capital is generally defined as the sum of core capital elements6 less goodwill, other intangible assets, and H * * * interest-only strips receivables that are required to be de- An institution's qualifying total capital consists of ducted in accordance with section II.B.l. of this appendix. two types of capital components: "core capital elements" (comprising tier 1 capital) and "supplementary capital elements" (comprising tier 2 capital). These capital elements and the various limits, restrictions, and deductions to which they are subject, are discussed below and are set forth in Attachment II. The Federal Reserve will, on a case-by-case basis, determine whether, and if so how much of, any 5. Consultation would not ordinarily be necessary if an instrument instrument that does not fit wholly within the terms were redeemed with the proceeds of, or replaced by, a like amount of a of one of the capital categories set forth below or similar or higher quality capital instrument and the organization's that does not have an ability to absorb losses com- capital position is considered fully adequate by the Federal Reserve. mensurate with the capital treatment otherwise spec- In the case of limited-life tier 2 instruments, consultation would generally be obviated if the new security is of equal or greater ified below will be counted as an element of tier 1 or maturity than the one it replaces. tier 2 capital. In making such a determination, the 6. [Reserved.] Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 39 Attachment II — Summary of Definition of Qualifying Capital for State Member Banks* Using the Year-End 1992 Standard Components Minimum Requirements CORE CAPITAL (Tier 1) Must equal or exceed 4% of weighted-risk assets Common stockholders' equity No limit Qualifying noncumulative perpetual preferred stock No limit; banks should avoid undue reliance on preferred stock in tier 1. Minority interest in equity accounts of consolidated subsidiaries Banks should avoid using minority interests to subsidiaries introduce elements not otherwise qualifying for tier 1 capital. Less: Goodwill, other intangible assets, and creditenhancing interest-only strips required to be deducted from capital1 SUPPLEMENTARY CAPITAL (Tier 2) Total of tier 2 is limited to 100% of tier l2 Allowance for loan and lease losses Limited to 1.25% of weighted-risk assets2 Perpetual preferred stock No limit within tier 2 Hybrid capital instruments and equity contract notes No limit within tier 2 Subordinated debt and intermediate-term preferred stock Subordinated debt and intermediate-term preferred stock are (original weighted average maturity of 5 years or more) limited to 50% of tier 1,2 amortized for capital purposes as they approach maturity. Revaluation reserves (equity and building) Not included; banks encouraged to disclose; may be evaluated on a case-by-case basis for international comparisons; and taken into account in making an overall assessment of capital DEDUCTIONS (from sum of tier 1 and tier 2) Investment in unconsolidated subsidiaries As a general rule, one-half of the aggregate investments will be deducted from tier 1 capital and one-half from tier 2 capital.3 Reciprocal holdings of banking organizations' capital securities Other deductions (such as other subsidiaries or joint ventures) On a case-by-case basis or as a matter of policy after a formal as determined by supervisory authority rulemaking TOTAL CAPITAL (tier 1 + tier 2 - deductions) Must equal or exceed 8% or weighted-risk assets 1 Requirements for the deduction of other intangible assets and residual interests are set forth in section II.B.1. of this appendix. 2 Amount in excess of limitations are permitted but do not qualify as capital. 3 A proportionately greater amount may be deducted from tier 1 capital, if the risks associated with the subsidiary so warrant. * See discussion in section II of the guidelines for a complete description of the requirements for, and the limitations on, the components of qualifying capital. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

40 Federal Reserve Bulletin • January 2002 2. Supplementary capital elements (tier 2 capital is subject to the limitations capital) described below in sections II.B.l.d. and e. of this appendix, ii. The treatment of identifiable intangi- The tier 2 component of an institution's qualifying capital ble assets set forth in this section genmay consist of the following items that are defined as supplementary capital elements: erally will be used in the calculation of a bank holding company's capital (i) Allowance for loan and lease losses ratios for supervisory and applica- (subject to limitations discussed be- tions purposes. However, in making low); an overall assessment of a bank hold- (ii) Perpetual preferred stock and related ing company's capital adequacy for surplus (subject to conditions dis- applications purposes, the Board may, cussed below); if it deems appropriate, take into ac- (iii) Hybrid capital instruments (as defined count the quality and composition of below), perpetual debt, and manda- an organization's capital, together tory convertible debt securities; with the quality and value of its tangi- (iv) Term subordinated debt and ble and intangible assets. intermediate-term preferred stock, inc. Credit-enhancing interest-only strips recluding related surplus (subject to ceivables (I/Os). limitations discussed below); i. Credit-enhancing I/Os are on-balance (v) Unrealized holding gains on equity sheet assets that, in form or in subsecurities (subject to limitations disstance, represent a contractual right to cussed in section II.A.2.e. of this apreceive some or all of the interest due pendix). on transferred assets and expose the The maximum amount of tier 2 capital that may be in- bank holding company to credit risk cluded in an institution's qualifying total capital is limited directly or indirectly associated with to 100 percent of tier 1 capital (net of goodwill, other transferred assets that exceeds a pro intangible assets, and interest-only strips receivables that rata share of the bank holding compaare required to be deducted in accordance with section ny's claim on the assets, whether II.B.l. of this appendix). through subordination provisions or other credit enhancement techniques. Such I/Os, whether purchased or reg * * * tained, including other similar (j) * * * "spread" assets, may be included in, (c) Certain credit-enhancing interest-only strips re- that is, not deducted from, a bank ceivables - deducted from the sum of core capi- holding company's capital subject to tal elements in accordance with sections the limitations described below in sec- II.B.l.c. through e. of this appendix. tions II.B.l.d. and e. of this appendix. ii. Both purchased and retained creditenhancing I/Os, on a non-tax adjusted 1. Goodwill, other intangible assets, and residual basis, are included in the total amount interests. * * * that is used for purposes of determinb. Other intangible interests. ing whether a bank holding company i. All servicing assets, including servic- exceeds the tier 1 limitation described ing assets on assets other than mort- below in this section. In determining gages (i.e., nonmortgage servicing as- whether an I/O or other types of sets), are included in this appendix as spread assets serve as a credit enidentifiable intangible assets. The hancement, the Federal Reserve will only types of identifiable intangible look to the economic substance of the assets that may be included in, that is, transaction. not deducted from, an organization's d. Fair value limitation. The amount of mortcapital are readily marketable mort- gage servicing assets, nonmortgage servicgage servicing assets, nonmortgage ing assets, and purchased credit card relaservicing assets, and purchased credit tionships that a bank holding company may card relationships. The total amount include in capital shall be the lesser of 90 of these assets that may be included in percent of their fair value, as determined in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 41 accordance with section II.B.l.f. of this ap- lowed nonmortgage servicing assets, pendix, or 100 percent of their book value, any disallowed purchased credit card as adjusted for capital purposes in accor- relationships, any disallowed creditdance with the instructions to the Consoli- enhancing I/Os (both purchased and redated Financial Statements for Bank Hold- tained), and any disallowed deferred-tax ing Companies (FR Y-9C Report). The assets, regardless of the date acquired, amount of credit-enhancing I/Os that a bank iii. Bank holding companies may elect to holding company may include in capital deduct disallowed mortgage servicing shall be its fair value. If both the application assets, disallowed nonmortgage serof the limits on mortgage servicing assets, vicing assets, and disallowed creditnonmortgage servicing assets, and pur- enhancing I/Os (both purchased and chased credit card relationships and the ad- retained) on a basis that is net of any justment of the balance sheet amount for associated deferred tax liability. Dethese assets would result in an amount be- ferred tax liabilities netted in this ing deducted from capital, the bank holding manner cannot also be netted against company would deduct only the greater of deferred-tax assets when determining the two amounts from its core capital ele- the amount of deferred-tax assets that ments in determining tier 1 capital, are dependent upon future taxable ine. Tier 1 capital limitation. come. i. The total amount of mortgage servic- f. Valuation. Bank holding companies must ing assets, nonmortgage servicing as- review the book value of all intangible assets, and purchased credit card rela- sets at least quarterly and make adjustments tionships that may be included in to these values as necessary. The fair value capital, in the aggregate, cannot ex- of mortgage servicing assets, nonmortgage ceed 100 percent of tier 1 capital. servicing assets, purchased credit card rela- Nonmortgage servicing assets and tionships, and credit-enhancing I/Os also purchased credit card relationships are must be determined at least quarterly. This subject, in the aggregate, to a separate determination shall include adjustments for sublimit of 25 percent of tier 1 capi- any significant changes in original valuation tal. In addition, the total amount of assumptions, including changes in prepaycredit-enhancing I/Os (both purchased ment estimates or account attrition rates. and retained) that may be included in Examiners will review both the book value capital cannot exceed 25 percent of and the fair value assigned to these assets, tier 1 capital.15 together with supporting documentation, ii. For purposes of calculating these lim- during the inspection process. In addition, itations on mortgage servicing assets, the Federal Reserve may require, on a casenonmortgage servicing assets, pur- by-case basis, an independent valuation of a chased credit card relationships, and bank holding company's intangible assets credit-enhancing I/Os, tier 1 capital is or credit-enhancing I/Os. defined as the sum of core capital g. Growing organizations. Consistent with elements, net of goodwill, and net of long-standing Board policy, banking organiall identifiable intangible assets other zations experiencing substantial growth, than mortgage servicing assets, non- whether internally or by acquisition, are exmortgage servicing assets, and pur- pected to maintain strong capital positions chased credit card relationships, prior substantially above minimum supervisory to the deduction of any disallowed levels, without significant reliance on intanmortgage servicing assets, any disal- gible assets or credit-enhancing I/Os. 15. Amounts of servicing assets, purchased credit card relationships, and credit-enhancing I/Os (both retained and purchased) in 4 Deferred-tax assets. excess of these limitations, as well as all other identifiable intangible a. The amount of deferred-tax assets that is assets, including core deposit intangibles and favorable leaseholds, are to be deducted from a bank holding company's core capital elements dependent upon future taxable income, net in determining tier 1 capital. However, identifiable intangible assets of the valuation allowance for deferred-tax (other than mortgage servicing assets and purchased credit card rela- assets, that may be included in, that is, not tionships) acquired on or before February 19, 1992, generally will not deducted from, a bank holding company's be deducted from capital for supervisory purposes, although they will continue to be deducted for applications purposes. capital may not exceed the lesser of: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

42 Federal Reserve Bulletin • January 2002 i. The amount of these deferred-tax as- factor for any off-balance sheet item that does not fit sets that the bank holding company is wholly within the terms of one of the credit converexpected to realize within one year of sion factors set forth below or that imposes risks on the calendar quarter-end date, based a banking organization that are incommensurate with on its projections of future taxable the credit conversion factors otherwise specified beincome for that year,23 or low for the off-balance sheet item. In making such a determination, the Federal Reserve will consider the ii. 10 percent of tier 1 capital. similarity of the asset or off-balance sheet item to b. The reported amount of deferred-tax assets, assets or off-balance sheet items explicitly treated in net of any valuation allowance for deferredthe guidelines, as well as other relevant factors. tax assets, in excess of the lesser of these two amounts is to be deducted from a banking organization's core capital elements in determining tier 1 capital. For purposes of g * * * calculating the 10 percent limitation, tier 1 3. Recourse obligations, direct credit substitutes, capital is defined as the sum of core capital residual interests, and asset- and mortgageelements, net of goodwill and net of all backed securities. Direct credit substitutes, identifiable intangible assets other than assets transferred with recourse, and securities mortgage servicing assets, nonmortgage serissued in connection with asset securitizations vicing assets, and purchased credit card reand structured financings are treated as delationships, prior to the deduction of any scribed below. The term "asset securitizations" disallowed mortgage servicing assets, any or "securitizations" in this rule includes strucdisallowed nonmortgage servicing assets, tured financings, as well as asset securitization any disallowed purchased credit card relatransactions, tionships, any disallowed credit-enhancing a. Definitions. I/Os, and any disallowed deferred-tax asi. Credit derivative means a contract sets. There generally is no limit in tier 1 that allows one party (the "protection capital on the amount of deferred-tax assets purchaser") to transfer the credit risk that can be realized from taxes paid in prior of an asset or off-balance sheet credit carry-back years or from future reversals of exposure to another party (the "proexisting taxable temporary differences. tection provider"). The value of a credit derivative is dependent, at least in part, on the credit performance of jjj * * * the "reference asset." * * * ii. Credit-enhancing representations and The Federal Reserve will, on a case-by-case basis, warranties means representations and determine the appropriate risk weight for any asset or credit equivalent amount of an off-balance sheet warranties that are made or assumed item that does not fit wholly within the terms of one in connection with a transfer of assets of the risk weight categories set forth below or that (including loan servicing assets) and imposes risks on a bank holding company that are that obligate the bank holding comincommensurate with the risk weight otherwise spec- pany to protect investors from losses ified below for the asset or off-balance sheet item. In arising from credit risk in the assets addition, the Federal Reserve will, on a case-by-case transferred or the loans serviced. basis, determine the appropriate credit conversion Credit-enhancing representations and warranties include promises to protect a party from losses resulting from the 23. To determine the amount of expected deferred-tax assets realiz- default or nonperformance of another able in the next 12 months, an institution should assume that all party or from an insufficiency in the existing temporary differences fully reverse as of the report date. value of the collateral. Credit- Projected future taxable income should not include net operating loss carry-forwards to be used during that year or the amount of existing enhancing representations and wartemporary differences a bank holding company expects to reverse ranties do not include: within the year. Such projections should include the estimated effect I. Early default clauses and similar of tax-planning strategies that the organization expects to implement to realize net operating losses or tax-credit carry-forwards that would warranties that permit the return otherwise expire during the year. Institutions do not have to prepare a of, or premium refund clauses new 12-month projection each quarter. Rather, on interim report dates, covering, 1-4 family residential institutions may use the future-taxable income projections for their first mortgage loans that qualify current fiscal year, adjusted for any significant changes that have occurred or are expected to occur. for a 50 percent risk weight for a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 43 period not to exceed 120 days share of credit risk on a third from the date of transfer. These party exposure; warranties may cover only those 5. Loans or lines of credit that proloans that were originated within vide credit enhancement for the 1 year of the date of transfer; financial obligations of an account 2. Premium refund clauses that party; cover assets guaranteed, in whole 6. Purchased loan servicing assets if or in part, by the U.S. Govern- the servicer is responsible for ment, a U.S. Government agency credit losses or if the servicer or a government-sponsored enter- makes or assumes creditprise, provided the premium re- enhancing representations and fund clauses are for a period not warranties with respect to the to exceed 120 days from the date loans serviced. Mortgage servicer of transfer; or cash advances that meet the con- 3. Warranties that permit the return ditions of section III.B.3.a.viii. of of assets in instances of misrepre- this appendix are not direct credit sentation, fraud or incomplete substitutes; and documentation. 7. Clean-up calls on third party asiii. Direct credit substitute means an ar- sets are direct credit substitutes. rangement in which a bank holding Clean-up calls that are 10 percent company assumes, in form or in sub- or less of the original pool balstance, credit risk associated with an ance that are exercisable at the on- or off-balance sheet credit expo- option of the bank holding comsure that was not previously owned pany are not direct credit substiby the bank holding company (third- tutes. party asset) and the risk assumed by iv. Externally rated means that an instruthe bank holding company exceeds ment or obligation has received a the pro rata share of the bank holding credit rating from a nationallycompany's interest in the third-party recognized statistical rating organizaasset. If the bank holding company tion. has no claim on the third-party asset, v. Face amount means the notional printhen the bank holding company's as- cipal, or face value, amount of an sumption of any credit risk with re- off-balance sheet item; the amortized spect to the third- party asset is a cost of an asset not held for trading direct credit substitute. Direct credit purposes; and the fair value of a tradsubstitutes include, but are not limited ing asset. to: vi. Financial asset means cash or other 1. Financial standby letters of credit monetary instrument, evidence of that support financial claims on a debt, evidence of an ownership interthird party that exceed a bank est in an entity, or a contract that holding company's pro rata share conveys a right to receive or exchange of losses in the financial claim; cash or another financial instrument 2. Guarantees, surety arrangements, from another party. credit derivatives, and similar in- vii. Financial standby letter of credit struments backing financial means a letter of credit or similar claims that exceed a bank holding arrangement that represents an irrevocompany's pro rata share in the cable obligation to a third-party benefinancial claim; ficiary: 3. Purchased subordinated interests 1. To repay money borrowed by, or or securities that absorb more than advanced to, or for the account of, their pro rata share of losses from a second party (the account parthe underlying assets; ty), or 4. Credit derivative contracts under 2. To make payment on behalf of which the bank holding company the account party, in the event assumes more than its pro rata that the account party fails to ful- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

44 Federal Reserve Bulletin • January 2002 fill its obligation to the benefi- support assets it has sold. The followciary. ing are examples of recourse arrangeviii. Mortgage servicer cash advance ments: means funds that a residential mort- 1. Credit-enhancing representations gage loan servicer advances to ensure and warranties made on the transan uninterrupted flow of payments, ferred assets; including advances made to cover 2. Loan servicing assets retained foreclosure costs or other expenses to pursuant to an agreement under facilitate the timely collection of the which the bank holding company loan. A mortgage servicer cash ad- will be responsible for credit vance is not a recourse obligation or a losses associated with the loans direct credit substitute if: being serviced. Mortgage servicer 1. The servicer is entitled to full re- cash advances that meet the conimbursement and this right is not ditions of section III.B.3.a.viii. of subordinated to other claims on this appendix are not recourse arthe cash flows from the underly- rangements; ing asset pool; or 3. Retained subordinated interests 2. For any one loan, the servicer's that absorb more than their pro obligation to make nonreimburs- rata share of losses from the unable advances is contractually derlying assets; limited to an insignificant amount 4. Assets sold under an agreement to of the outstanding principal bal- repurchase, if the assets are not ance of that loan. already included on the balance ix. Nationally recognized statistical rat- sheet; ing organization (NRSRO) means an 5. Loan strips sold without contracentity recognized by the Division of tual recourse where the maturity Market Regulation of the Securities of the transferred loan is shorter and Exchange Commission (or any than the maturity of the commitsuccessor Division) (Commission) as ment under which the loan is a nationally recognized statistical rat- drawn; ing organization for various purposes, 6. Credit derivatives issued that abincluding the Commission's uniform sorb more than the bank holding net capital requirements for brokers company's pro rata share of and dealers. losses from the transferred assets; x. Recourse means the retention, by a and bank holding company, in form or in 7. Clean-up calls at inception that substance, of any credit risk directly are greater than 10 percent of the or indirectly associated with an asset balance of the original pool of it has transferred and sold that ex- transferred loans. Clean-up calls ceeds a pro rata share of the banking that are 10 percent or less of the organization's claim on the asset. If a original pool balance that are exbanking organization has no claim on ercisable at the option of the bank a transferred asset, then the retention holding company are not recourse of any risk of credit loss is recourse. arrangements. A recourse obligation typically arises xi. Residual interest means any onwhen a bank holding company trans- balance sheet asset that represents an fers assets and retains an explicit obli- interest (including a beneficial intergation to repurchase the assets or ab- est) created by a transfer that qualifies sorb losses due to a default on the as a sale (in accordance with generpayment of principal or interest or ally accepted accounting principles) any other deficiency in the perfor- of financial assets, whether through a mance of the underlying obligor or securitization or otherwise, and that some other party. Recourse may also exposes the bank holding company to exist implicitly if a bank holding com- credit risk directly or indirectly assopany provides credit enhancement be- ciated with the transferred assets that yond any contractual obligation to exceeds a pro rata share of the bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 45 holding company's claim on the as- upon by unaffiliated investors to pursets, whether through subordination chase the position; or an unaffiliated provisions or other credit enhance- third party to enter into a transaction ment techniques. Residual interests involving the position, such as a purgenerally include credit-enhancing chase, loan, or repurchase agreement. I/Os, spread accounts, cash collateral b. Credit equivalent amounts and risk weight accounts, retained subordinated inter- of recourse obligations and direct credit ests, other forms of over- substitutes. collateralization, and similar assets i. Credit equivalent amount. Except as that function as a credit enhancement. otherwise provided in sections Residual interests further include III.B.3.C. through f. and III.B.5. of those exposures that, in substance, this appendix, the credit-equivalent cause the bank holding company to amount for a recourse obligation or retain the credit risk of an asset or direct credit substitute is the full exposure that had qualified as a resid- amount of the credit-enhanced assets ual interest before it was sold. Resid- for which the bank holding company ual interests generally do not include directly or indirectly retains or asinterests purchased from a third party, sumes credit risk multiplied by a 100 except that purchased credit- percent conversion factor. enhancing I/Os are residual interests ii. Risk-weight factor. To determine the for purposes of this appendix. bank holding company's risk-weight xii. Risk participation means a participa- factor for off-balance sheet recourse tion in which the originating party obligations and direct credit substiremains liable to the beneficiary for tutes, the credit equivalent amount is the full amount of an obligation (e.g., assigned to the risk category appropria direct credit substitute) notwith- ate to the obligor in the underlying standing that another party has ac- transaction, after considering any asquired a participation in that obliga- sociated guarantees or collateral. For tion. a direct credit substitute that is an xiii. Securitization means the pooling and on-balance sheet asset (e.g., a purrepackaging by a special purpose en- chased subordinated security), a bank tity of assets or other credit exposures holding company must calculate riskinto securities that can be sold to in- weighted assets using the amount of vestors. Securitization includes trans- the direct credit substitute and the full actions that create stratified credit risk amount of the assets it supports, i.e., positions whose performance is de- all the more senior positions in the pendent upon an underlying pool of structure. The treatment of direct credit exposures, including loans and credit substitutes that have been syncommitments. dicated or in which risk participations xiv. Structured finance program means a have been conveyed or acquired is set program where receivable interests forth in section III.D.l of this appenand asset-backed securities issued by dix. multiple participants are purchased by c. Externally-rated positions: credit-equivaa special purpose entity that repack- lent amounts and risk weights of recourse ages those exposures into securities obligations, direct credit substitutes, residthat can be sold to investors. Struc- ual interests, and asset- and mortgagetured finance programs allocate credit backed securities (including asset-backed risks, generally, between the partici- commercial paper). pants and credit enhancement pro- i. Traded positions. With respect to a vided to the program. recourse obligation, direct credit subxv. Traded position means a position that stitute, residual interest (other than a is externally rated, and is retained, credit-enhancing I/Ostrip) or assetassumed, or issued in connection with and mortgage-backed security (inan asset securitization, where there is cluding asset-backed commercial paa reasonable expectation that, in the per) that is a traded position and that near future, the rating will be relied has received an external rating on a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

46 Federal Reserve Bulletin • January 2002 long-term position that is one grade d. Senior positions not externally rated. For a below investment grade or better or a recourse obligation, direct credit substitute, short-term rating that is investment residual interest, or asset- or mortgagegrade, the bank holding company may backed security that is not externally rated multiply the face amount of the posi- but is senior or preferred in all features to a tion by the appropriate risk weight, traded position (including collateralization determined in accordance with the ta- and maturity), a bank holding company may bles below. Stripped mortgage- apply a risk weight to the face amount of the senior position in accordance with secbacked securities and other similar intion III.B.3.c.i. of this appendix, based on struments, such as interest-only or the traded position, subject to any current or principal-only strips that are not credit prospective supervisory guidance and the enhancements, must be assigned to bank holding company satisfying the Fedthe 100 percent risk category. If a eral Reserve that this treatment is appropritraded position has received more ate. This section will apply only if the than one external rating, the lowest traded subordinated position provides subsingle rating will apply. stantive credit support to the unrated position until the unrated position matures. Long-term Rating e. Capital requirement for residual interests. Examples Risk Weight Category i. Capital requirement for creditenhancing I/O strips. After applying Highest or second AAA, AA 20 percent highest investment grade the concentration limit to creditenhancing I/O strips (both purchased Third highest investment A 50 percent and retained) in accordance with sec- Lowest investment grade BBB 100 percent tions II.B.2.C. through e. of this ap- One category below BB 200 percent pendix, a bank holding company must investment grade maintain risk-based capital for a Short-term Rating Examples Risk Weight credit-enhancing I/O strip (both pur- Highest investment A-1, P-1 20 percent chased and retained), regardless of the grade external rating on that position, equal Second highest A-2, P-2 50 percent to the remaining amount of the creditinvestment grade Lowest investment grade A-3, P-3 100 percent enhancing I/O (net of any existing associated deferred tax liability), even if the amount of risk-based capital ii. Non-traded positions. A recourse ob- required to be maintained exceeds the ligation, direct credit substitute, or re- full risk-based capital requirement for sidual interest (but not a credit- the assets transferred. Transactions enhancing I/O strip) extended in that, in substance, result in the retenconnection with a securitization that tion of credit risk associated with a is not a traded position may be as- transferred credit-enhancing I/O strip signed a risk weight in accordance will be treated as if the creditwith section III.B.3.c.i.of this appen- enhancing I/O strip was retained by dix if: the bank holding company and not 1. It has been externally rated by transferred. more than one NRSRO; ii. Capital requirements for other resid- 2. It has received an external rating ual interest. on a long-term position that is one 1. If a residual interest does not meet grade below investment grade or the requirements of sections better or on a short-term position III.B.3.C. or d. of this appendix, a that is investment grade by all bank holding must maintain risk- NRSROs providing a rating; based capital equal to the remain- 3. The ratings are publicly available; and ing amount of the residual interest 4. The ratings are based on the same that is retained on the balance criteria used to rate traded positions. sheet (net of any existing associ- If the ratings are different, the lowest ated deferred tax liability), even if rating will determine the risk category the amount of risk-based capital to which the recourse obligation, di- required to be maintained exceeds rect credit substitute, or residual inter- the full risk-based capital requireest will be assigned. ment for the assets transferred. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 47 Transactions that, in substance, 1. The internal credit risk system is result in the retention of credit an integral part of the bank holdrisk associated with a transferred ing company's risk management residual interest will be treated as system, which explicitly incorpoif the residual interest was re- rates the full range of risks arising tained by the bank holding com- from a bank holding company's pany and not transferred. participation in securitization ac- 2. Where the aggregate capital require- tivities; ment for residual interests and other 2. Internal credit ratings are linked recourse obligations in connection to measurable outcomes, such as with the same transfer of assets ex- the probability that the position ceed the full risk-based capital re- will experience any loss, the posiquirement for those assets, a bank tion's expected loss given default, holding company must maintain risk- and the degree of variance in based capital equal to the greater of losses given default on that posithe risk-based capital requirement for tion; the residual interest as calculated un- 3. The bank holding company's inder section III.B.3.e.ii. 1. of this apternal credit risk system must seppendix or the full risk-based capital arately consider the risk associrequirement for the assets transferred, ated with the underlying loans or f. Positions that are not rated by an NRSRO. borrowers, and the risk associated A position (but not a residual interest) mainwith the structure of a particular tained in connection with a securitization securitization transaction; and that is not rated by a NRSRO may be 4. The bank holding company's inrisk-weighted based on the bank holding ternal credit risk system must company's determination of the credit ratidentify gradations of risk among ing of the position, as specified in the table "pass" assets and other risk posibelow, multiplied by the face amount of the tions; position. In order to obtain this treatment, 5. The bank holding company must the bank holding company's system for dehave clear, explicit criteria that termining the credit rating of the position are used to classify assets into must meet one of the three alternative staneach internal risk grade, including dards set out in sections III.B.3.f.i. through subjective factors; III.B.3.f.iii. of this appendix. 6. The bank holding company must have independent credit risk management or loan review personnel Rating Category Examples Risk Weight assigning or reviewing the credit Highest or second AAA,AA 100 percent risk ratings; highest investment grade 7. The bank holding company must have an internal audit procedure Third highet investment A 100 percent grade that periodically verifies that the Lowest investment grade BBB 100 percent internal credit risk ratings are as- One category below BB 200 percent investment grade signed in accordance with the established criteria; i. Internal risk rating used for asset- 8. The bank holding company must backed program. A direct credit sub- monitor the performance of the stitute (other than a purchased credit- internal credit risk ratings asenhancing I/O) is assumed in signed to nonrated, nontraded diconnection with an asset-backed com- rect credit substitutes over time to mercial paper program sponsored by determine the appropriateness of the bank holding company and the the initial credit risk rating assignbank holding company is able to dem- ment and adjust individual credit onstrate to the satisfaction of the Fed- risk ratings, or the overall internal eral Reserve, prior to relying upon its credit risk ratings system, as use, that the bank holding company's needed; and internal credit risk rating system is 9. The internal credit risk system adequate. Adequate internal credit must make credit risk rating asrisk rating systems usually contain the sumptions that are consistent following criteria: with, or more conservative than, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

48 Federal Reserve Bulletin • January 2002 the credit risk rating assumptions is less than the effective risk-based and methodologies of NRSROs. capital requirement for the enhanced ii. Program Ratings. A direct credit sub- assets, the risk-based capital requirestitute or recourse obligation (other ment is limited to the maximum conthan a residual interest) is assumed or tractual exposure, less any liability acretained in connection with a struc- count established in accordance with tured finance program and a NRSRO generally accepted accounting princihas reviewed the terms of the pro- ples. This limitation does not apply gram and stated a rating for positions when a bank holding company proassociated with the program. If the vides credit enhancement beyond any program has options for different contractual obligation to support ascombinations of assets, standards, in- sets it has sold. ternal credit enhancements and other ii. Mortgage-related securities or particrelevant factors, and the NRSRO ipation certificates retained in a mortspecifies ranges of rating categories to gage loan swap. If a bank holding them, the bank holding company may company holds a mortgage-related seapply the rating category that corre- curity or a participation certificate as sponds to the bank holding compa- a result of a mortgage loan swap with ny's position. In order to rely on a recourse, capital is required to support program rating, the bank holding the recourse obligation plus the percompany must demonstrate to the centage of the mortgage-related secu- Federal Reserve's satisfaction that the rity or participation certificate that is credit risk rating assigned to the pro- not covered by the recourse obligagram meets the same standards gener- tion. The total amount of capital really used by NRSROs for rating quired for the on-balance sheet asset traded positions. The bank holding and the recourse obligation, however, company must also demonstrate to the is limited to the capital requirement Federal Reserve's satisfaction that the for the underlying loans, calculated as criteria underlying the NRSRO's as- if the organization continued to hold signment of ratings for the program these loans as on-balance sheet assets. are satisfied for the particular posi- iii. Related on-balance sheet assets. If a tion. If a bank holding company par- recourse obligation or direct credit ticipates in a securitization sponsored substitute subject to section III.B.3. of by another party, the Federal Reserve this appendix also appears as a balmay authorize the bank holding com- ance sheet asset, the balance sheet pany to use this approach based on a asset is not included in an organizaprogrammatic rating obtained by the tion's risk-weighted assets to the exsponsor of the program. tent the value of the balance sheet iii. Computer Program. The bank hold- asset is already included in the olfing company is using an acceptable balance sheet credit equivalent credit assessment computer program amount for the recourse obligation or to determine the rating of a direct direct credit substitute, except in the credit substitute or recourse obliga- case of loan servicing assets and simition (but not residual interest) issued lar arrangements with embedded rein connection with a structured fi- course obligations or direct credit subnance program. A NRSRO must have stitutes. In that case, both the ondeveloped the computer program, and balance sheet assets and the related the bank holding company must dem- recourse obligations and direct credit onstrate to the Federal Reserve's sat- substitutes are incorporated into the isfaction that ratings under the pro- risk-based capital calculation. gram correspond credibly and reliably with the rating of traded positions. g. Limitations on risk-based capital require- £ * * * ments. i. Low-level exposure. If the maximum 4. Category 4: 100 percent. contractual exposure to loss retained a. All assets not included in the categories or assumed by a bank holding com- above are assigned to this category, which pany in connection with a recourse comprises standard risk assets. The bulk of obligation or a direct credit substitute the assets typically found in a loan portfolio Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 49 would be assigned to the 100 percent cate- organizations; and any intangibles, includgory. ing those that may have been grandfathered b. This category includes long-term claims on, into capital. and the portions of long-term claims that are guaranteed by, non-OECD banks, and j) * * * all claims on non-OECD central governments that entail some degree of transfer The face amount of an oif-balance sheet item is risk.39 This category includes all claims on generally incorporated into risk-weighted assets in two steps. The face amount is first multiplied by a foreign and domestic private-sector obligors credit conversion factor, except for direct credit subnot included in the categories above (includstitutes and recourse obligations as discussed in secing loans to nondepository financial institution III.D.l. of this appendix. The resultant credit tions and bank holding companies); claims equivalent amount is assigned to the appropriate risk on commercial firms owned by the public category according to the obligor or, if relevant, the sector; customer liabilities to the organizaguarantor or the nature of the collateral.41 Attachtion on acceptances outstanding involving ment IV to this appendix A sets forth the conversion standard risk claims;40 investments in fixed factors for various types of off-balance sheet items. assets, premises, and other real estate 1. Items with a 100 percent conversion factor. owned; common and preferred stock of cora. Except as otherwise provided in section III.B.3. porations, including stock acquired for debts of this appendix, the full amount of an asset or previously contracted; all stripped transaction supported, in whole or in part, by a mortgage-backed securities and similar indirect credit substitute or a recourse obligation. struments; and commercial and consumer Direct credit substitutes and recourse obligaloans (except those assigned to lower risk tions are defined in section III.B.3. of this apcategories due to recognized guarantees or pendix. collateral and loans secured by residential b. Sale and repurchase agreements and forward property that qualify for a lower risk agreements. Forward agreements are legally weight). binding contractual obligations to purchase asc. Also included in this category are industrial- sets with certain drawdown at a specified future date. Such obligations include forward purdevelopment bonds and similar obligations chases, forward forward deposits placed,42 and issued under the auspices of states or politipartly-paid shares and securities; they do not cal subdivisions of the OECD-based group include commitments to make residential mortof countries for the benefit of a private party gage loans or forward foreign exchange conor enterprise where that party or enterprise, tracts. not the government entity, is obligated to c. Securities lent by a banking organization are pay the principal and interest, and all obligatreated in one of two ways, depending upon tions of states or political subdivisions of whether the lender is at risk of loss. If a banking countries that do not belong to the OECDorganization, as agent for a customer, lends the based group. customer's securities and does not indemnify d. The following assets also are assigned a risk the customer against loss, then the transaction is weight of 100 percent if they have not been excluded from the risk-based capital calculadeducted from capital: investments in un- tion. If, alternatively, a banking organization consolidated companies, joint ventures, or lends its own securities or, acting as agent for a associated companies; instruments that customer, lends the customer's securities and qualify as capital issued by other banking indemnifies the customer against loss, the transaction is converted at 100 percent and assigned to the risk weight category appropriate to the obligor, or, if applicable, to any collateral deliv- 39. Such assets include all nonlocal currency claims on, and the portions of claims that are guaranteed by, non-OECD central governments and those portions of local currency claims on, or guaranteed by, non-OECD central governments that exceed the local currency liabilities held by subsidiary depository institutions. 41. The sufficiency of collateral and guarantees for off-balance-sheet 40. Customer liabilities on acceptances outstanding involving non- items is determined by the market value of the collateral or the amount standard risk claims, such as claims on U.S. depository institutions, of the guarantee in relation to the face amount of the item, except for are assigned to the risk category appropriate to the identity of the derivative contracts, for which this determination is generally made in obligor or, if relevant, the nature of the collateral or guarantees relation to the credit equivalent amount. Collateral and guarantees are backing the claims. Portions of acceptances conveyed as risk partici- subject to the same provisions noted under section III.B. of this pations to U.S. depository institutions or foreign banks are assigned to appendix A. the 20 percent risk category appropriate to short-term claims guaran- 42. Forward forward deposits accepted are treated as interest rate teed by U.S. depository institutions and foreign banks. contracts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

50 Federal Reserve Bulletin • January 2002 ered to the lending organization, or the indepen- appropriate to the account party obligor or, if dent custodian acting on the lending organiza- relevant, the nature of the collateral or guarantion's behalf. Where a banking organization is tees. acting as agent for a customer in a transaction f. In the case of direct credit substitutes that take involving the lending or sale of securities that is the form of a syndication where each banking collateralized by cash delivered to the banking organization is obligated only for its pro rata organization, the transaction is deemed to be share of the risk and there is no recourse to the collateralized by cash on deposit in a subsidiary originating banking organization, each banking depository institution for purposes of determin- organization will only include its pro rata share ing the appropriate risk-weight category, pro- of the assets supported, in whole or in part, by vided that any indemnification is limited to no the direct credit substitute in its risk-based capimore than the difference between the market tal calculation 46 value of the securities and the cash collateral received and any reinvestment risk associated with that cash collateral is borne by the cus- 3. In Appendix D to part 225, section Il.b. is revised to tomer. read as follows: d. In the case of direct credit substitutes in which a risk participation43 has been conveyed, the full Appendix D To Part 225—Capital Adequacy amount of the assets that are supported, in Guidelines For Bank Holding Companies: Tier 1 whole or in part, by the credit enhancement are Leverage Measure converted to a credit equivalent amount at 100 percent. However, the pro rata share of the credit equivalent amount that has been con- JJ * * * veyed through a risk participation is assigned to b. A banking organization's tier 1 leverage ratio is whichever risk category is lower: the risk cate- calculated by dividing its tier 1 capital (the numeragory appropriate to the obligor, after consider- tor of the ratio) by its average total consolidated ing any relevant guarantees or collateral, or the assets (the denominator of the ratio). The ratio will risk category appropriate to the institution ac- also be calculated using period-end assets whenever quiring the participation.44 Any remainder is necessary, on a case-by-case basis. For the purpose assigned to the risk category appropriate to the of this leverage ratio, the definition of tier 1 capital obligor, guarantor, or collateral. For example, as set forth in the risk-based capital guidelines conthe pro rata share of the full amount of the tained in appendix A of this part will be used.3 As a assets supported, in whole or in part, by a direct general matter, average total consolidated assets are credit substitute conveyed as a risk participation defined as the quarterly average total assets (defined to a U.S. domestic depository institution or net of the allowance for loan and lease losses) reforeign bank is assigned to the 20 percent risk ported on the organization's Consolidated Financial category.45 Statements (FR Y-9C Report), less goodwill; amounts of mortgage servicing assets, nonmortgage e. In the case of direct credit substitutes in which a servicing assets, and purchased credit card relationrisk participation has been acquired, the acquiring banking organization's percentage share of the direct credit substitute is multiplied by the full amount of the assets that are supported, in 46. For example, if a banking organization has a 10 percent share of whole or in part, by the credit enhancement and a $10 syndicated direct credit substitute that provides credit support to a $100 loan, then the banking organization's $1 pro rata share in the converted to a credit equivalent amount at 100 enhancement means that a $10 pro rata share of the loan is included in percent. The credit equivalent amount of an risk weighted assets. acquisition of a risk participation in a direct credit substitute is assigned to the risk category 3. Tier 1 capital for banking organizations includes common equity, minority interest in the equity accounts of consolidated subsidiaries, qualifying noncumulative perpetual preferred stock, and qualifying cumulative perpetual preferred stock. (Cumulative perpetual preferred 43. That is, a participation in which the originating banking organi- stock is limited to 25 percent of tier 1 capital.) In addition, as a general zation remains liable to the beneficiary for the full amount of the matter, tier 1 capital excludes goodwill; amounts of mortage servicing direct credit substitute if the party that has acquired the participation assets, nonmortgage servicing assets, and purchased credit card relafails to pay when the instrument is drawn. tionships that, in the aggregate, exceed 100 percent of tier 1 capital; 44. A risk participation in bankers acceptances conveyed to other amounts of nonmortgage servicing assets and purchased credit card institutions is also assigned to the risk category appropriate to the relationships that, in the aggregate, exceed 25 percent of tier 1 capital; institution acquiring the participation or, if relevant, the guarantor or amounts of credit-enhancing interest-only strips that are in excess of nature of the collateral. 25 percent of tier lcapital; all other identifiable intangible assets; and 45. Risk participations with a remaining maturity of over one year deferred tax assets that are dependent upon future taxable income, net that are conveyed to non-OECD banks are to be assigned to the 100 of their valuation allowance, in excess of certain limitations. The percent risk category, unless a lower risk category is appropriate to the Federal Reserve may exclude certain investments in subsidiaries or obligor, guarantor, or collateral. associated companies as appropriate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 51 ships, that, in the aggregate, are in excess of 100 and other operations of Mellon are subject to review by the percent of tier 1 capital; amounts of nonmortgage FDIC under the Bank Merger Act (12 U.S.C. § 1828(c)).2 servicing assets, and purchased credit card relation- The FDIC has completed its review under the Act and has ships that, in the aggregate, are in excess of 25 approved the transaction after reviewing essentially the percent of tier 1 capital; the amounts of credit- same factors that the Board is required to review under the enhancing interest-only strips that are in excess of BHC Act.3 25 percent of tier 1 capital; all other identifiable Notice of the proposal, affording interested persons an intangible assets; any investments in subsidiaries or opportunity to submit comments, has been published associated companies that the Federal Reserve deter- (66 Federal Register 45,588 (2001)). The time for filing mines should be deducted from tier 1 capital; and comments has expired, and the Board has considered the deferred tax assets that are dependent upon future proposal and all comments received in light of the factors taxable income, net of their valuation allowance, in set forth in section 3 of the BHC Act. excess of the limitation set forth in section II.B.4. of RBS Group, with total consolidated assets equivalent to appendix A of this part.4 approximately $479.9 billion is the 18th largest banking organization in the world.4 Citizens, with total consolidated assets of $32.3 billion, is the 32nd largest commercial banking organization in the United States.5 Citizens operates subsidiary depository institutions in Rhode Island, ORDERS ISSUED UNDER BANK HOLDING COMPANY Massachusetts, Connecticut, and New Hampshire that con- ACT trol approximately $23.3 billion in deposits, representing Orders Issued Under Section 3 of the Bank Holding less than 1 percent of total deposits in insured depository institutions in the United States ("total U.S. insured depos- Company Act its").6 The Royal Bank of Scotland Group pic Mellon operates subsidiary depository institutions in Edinburgh, Scotland California, Delaware, Florida, Massachusetts, New Jersey, and Pennsylvania that control approximately $29 billion in The Royal Bank of Scotland pic deposits, representing less than 1 percent of total U.S. Edinburgh, Scotland insured deposits. The branches of Mellon to be acquired by Citizens are in Pennsylvania, Delaware, Maryland, and RBSG International Holdings Ltd. New Jersey and control deposits of approximately Edinburgh, Scotland $13.4 billion.7 On consummation of this proposal, Citi- Citizens Financial Group, Inc. 2. Through the proposed purchase-and-assumption transaction, Citi- Providence, Rhode Island zens PA would acquire 321 retail branches in Pennsylvania, New Jersey, and Maryland from Mellon Bank, N.A., Pittsburgh, Pennsylva- Order Approving the Acquisition of Banks nia ("Mellon Bank"), and Citizens DE would acquire 19 retail branches in Delaware from Mellon Bank (DE) National Association, Wilmington, Delaware ("Mellon DE"), together with certain related The Royal Bank of Scotland Group pic ("RBS Group"), assets and liabilities. Citizens PA also would acquire five additional The Royal Bank of Scotland pic ("RBS"), RBSG Internabranch buildings in Pennsylvania from Mellon Bank, but not the tional Holdings Ltd., and Citizens Financial Group, Inc. deposits or loans of these branches. In addition, Mellon would transfer ("Citizens") (collectively, "Applicants"), have requested to Citizens PA and Citizens DE its automatic teller machine network the Board's approval under section 3 of the Bank Holding and the consumer lending, lower middle-market commercial lending, and automobile dealer floor plan lending operations of Mellon Bank Company Act ("BHC Act") (12 U.S.C. § 1842) to acquire and Mellon DE. Mellon also would transfer its interests in certain all the voting shares of Citizens Bank of Pennsylvania, insurance brokerage and agency-related activities to Citizens PA and Philadelphia, Pennsylvania ("Citizens PA"), and Citizens Citizens' subsidiary bank, Citizens Bank of Rhode Island, Providence, Bank, Wilmington, Delaware ("Citizens DE"), both in Rhode Island, which also is supervised by the FDIC. 3. The FDIC also has granted deposit insurance to Citizens PA and formation. Citizens PA and Citizens DE are being formed Citizens DE under the Federal Deposit Insurance Act (12 U.S.C. to acquire 345 of the Mid-Atlantic retail branches of banks § 1815), and each relevant state banking regulatory authority has controlled by Mellon Financial Corporation, Pittsburgh, approved the proposal under applicable state laws. Pennsylvania ("Mellon"), and certain other business oper- 4. Foreign asset and ranking data are as of June 30, 2001. ations of Mellon.1 The proposed acquisition of the branches 5. Asset and domestic ranking data are as of June 30, 2001. 6. Deposit data are as of June 30, 2001, unless otherwise noted. 7. Under the proposal, Citizens would acquire assets from Mellon totaling approximately $11 billion. Citizens PA would acquire 4. Deductions from tier 1 capital and other adjustments are dis- 315 branches in Pennsylvania that control deposits of approximately cussed more fully in section II.B. of appendix A of this part. $12.8 billion, representing approximately 11.9 percent of the total deposits of insured depository institutions in the state ("state depos- 1. Applicants propose to form Citizens PA as a Pennsylvania- its"); and four branches in New Jersey that control deposits of chartered savings bank and Citizens DE as a Delaware-chartered approximately $114.2 million, representing less than 1 percent of state bank, both of which would be insured and supervised by the Federal deposits. In addition, Citizens PA would acquire two branches from Deposit Insurance Corporation ("FDIC"). Mellon in Maryland that control deposits of approximately $50 mil- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

52 Federal Reserve Bulletin • January 2002 zens, with total consolidated assets of $48.9 billion, would state of such bank holding company if certain conditions become the 22nd largest commercial banking organization are met. For purposes of the BHC Act, the home state of in the United States, controlling deposits of approximately Applicants is Rhode Island, and Applicants would acquire $36.7 billion, representing approximately 1.1 percent of banks in Pennsylvania, New Jersey, Maryland, and Delatotal U.S. insured deposits.8 ware.12 All the conditions for an interstate acquisition enumerated in section 3(d) are met in this case.13 In view Factors Governing Board Review of Bank Acquisition of all the facts of record, the Board is permitted to approve the proposal under section 3(d) of the BHC Act. The BHC Act sets forth the factors that the Board must consider when reviewing the formation of bank holding Competitive Considerations companies or the acquisition of banks. These factors are the competitive effects of the proposal in the relevant Section 3 of the BHC Act prohibits the Board from approvgeographic markets; the convenience and needs of the ing a proposal that would result in a monopoly or be in community to be served, including the records of perfor- furtherance of a monopoly. The BHC Act also prohibits the mance of the insured depository institutions involved in the Board from approving a proposal that would substantially transaction under the Community Reinvestment Act lessen competition in any relevant banking market unless ("CRA");9 the financial and managerial resources and fu- the anticompetitive effects of the proposal in that banking ture prospects of the companies and banks involved in the market are clearly outweighed in the public interest by the proposal; the availability of information needed to deter- probable effects of the proposal in meeting the convenience mine and enforce compliance with the BHC Act and other and needs of the community to be served.14 applicable federal banking laws; and, in the case of applica- The subsidiary depository institutions of Citizens and tions involving a foreign bank such as RBS, whether the Mellon currently do not compete directly in any banking foreign bank is subject to comprehensive supervision and market where the Mellon branches to be acquired are regulation on a consolidated basis by its home country located, and the number of competitors in the relevant supervisor.10 The Board also must consider the concentra- banking markets would remain unchanged or increase after tion of deposits in the nation and relevant individual states consummation of the proposal. Accordingly, based on all as well as compliance with other provisions of section 3(d) the facts of record, the Board concludes that consummation of the BHC Act in reviewing proposed interstate acquisi- of the proposal would not have a significantly adverse tions.11 effect on competition or on the concentration of banking The Board has considered these factors in light of a resources in any relevant banking market, and that competrecord that includes information provided by Applicants, itive considerations are consistent with approval. confidential supervisory and examination information, publicly reported financial and other information, and public Convenience and Needs Considerations comments submitted on the proposal. The Board also has consulted with and considered information collected from In acting on a proposal under section 3 of the BHC Act, the the primary home country supervisor of RBS Group and Board is required to consider the effects of the proposal on various federal and state supervisory agencies, including the convenience and needs of the communities to be served the FDIC, the Pennsylvania Department of Banking, and and to take into account the records of the relevant insured the State of Delaware Office of the State Bank Commis- depository institutions under the CRA. The CRA requires sioner. the federal financial supervisory agencies to encourage financial institutions to help meet the credit needs of local Interstate Analysis communities in which they operate, consistent with safe and sound operation, and requires the appropriate federal Section 3(d) of the BHC Act allows the Board to approve financial supervisory agency to take into account an instituan application by a bank holding company to acquire tion's record of meeting the credit needs of its entire control of a bank located in a state other than the home 12. For purposes of section 3(d), the Board considers a bank to be lion, as of March 31, 2001. The branches in Maryland did not begin located in the states in which the bank is chartered or headquartered or accepting deposits until September 1999. Citizens DE would acquire operates a branch. 19 branches in Delaware that control deposits of approximately 13. See 12 U.S.C. §§ 1842(d)(1)(A) and (B), 1842(d)(2)(A) and (B). $392 million, representing less than 1 percent of state deposits. State Applicants meet the capital and managerial requirements established deposits data in this footnote are as of June 30, 2000. under applicable law. In addition, Applicants would control less than 8. Mellon would retain four branches in Pennsylvania, one branch 10 percent of the total amount of deposits of insured depository in Maryland, one branch in Delaware, and no branches in New Jersey. institutions in the United States and would not exceed the deposit The deposits to be retained by Mellon in Pennsylvania, Maryland, and limits with respect to any state. The laws of Pennsylvania, New Delaware would represent less than 1 percent of total state deposits in Jersey, and Maryland do not impose a minimum age requirement on each of these states. banks to be acquired, and Delaware law does not impose such a 9. 12 U.S.C. § 2901 etseq. requirement on banks chartered after September 29, 1995. All other 10. See 12 U.S.C. § 1842(c). requirements under section 3(d) of the BHC Act are met in this case. 11. See 12 U.S.C. § 1842(d). 14. See 12 U.S.C. § 1842(c)(1). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 53 Attachment II — Summary of Definition of Qualifying Capital for Bank Holding Companies* Using the Year-End 1992 Standard Components Minimum Requirements CORE CAPITAL (Tier 1) Must equal or exceed 4% of weighted-risk assets Common stockholders' equity No limit Qualifying noncumulative perpetual preferred stock No limit, banks should avoid undue reliance on preferred stock in tier 1. Qualifying cumulative preferred stock Limited to 25% of the sum of common stock, qualifying perpetual preferred stock, and minority interests. Minority interest in equity accounts of consolidated subsidiaries Banks should avoid using minority interests to subsidiaries introduce elements not otherwise qualifying for tier 1 capital. Less: Goodwill, other intangible assets, and creditenhancing interest-only strips required to be deducted from capital1 SUPPLEMENTARY CAPITAL (Tier 2) Total of tier 2 is limited to 100% of tier l2 Allowance for loan and lease losses Limited to 1.25% of weighted-risk assets2 Perpetual preferred stock No limit within tier 2 Hybrid instruments, perpetual debt and mandatory convertible No limit within tier 2 securities Subordinated debt and intermediate-term preferred stock Subordinated debt and intermediate-term preferred stock are (original weighted average maturity of 5 years or more) limited to 50% of tier l,2 amortized for capital purposes as they approach maturity. Revaluation reserves (equity and building) Not included; banks encouraged to disclose; may be evaluated on a case-by-case basis for international comparisons; and taken into account in making an overall assessment of capital DEDUCTIONS (from sum of tier 1 and tier 2) Investment in unconsolidated subsidiaries As a general rule, one-half of the aggregate investments will be deducted from tier 1 capital and one-half from tier 2 capital.3 Reciprocal holdings of banking organizations' capital securities Other deductions (such as other subsidiaries or joint ventures) On a case-by-case basis or as a matter of policy after a formal as determined by supervisory authority rulemaking TOTAL CAPITAL (tier 1 + tier 2 - deductions) Must equal or exceed 8% or weighted-risk assets 1 Requirements for the deduction of other intangible assets and residual interests are set forth in section ELB.l. of this appendix. 2 Amount in excess of limitations are permitted but do not qualify as capital. 3 A proportionately greater amount may be deducted from tier 1 capital, if the risks associated with the subsidiary so warrant. * See discussion in section II of the guidelines for a complete description of the requirements for, and the limitations on, the components of qualifying capital. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

54 Federal Reserve Bulletin • January 2002 community, including low- and moderate-income ("LMI") become subject to the CRA policies of Citizens. Accordneighborhoods, in evaluating bank expansionary proposals. ingly, the Board has particularly considered the 1999 Citi- The Board has carefully considered the convenience and zens Evaluations and the fair lending policies and proceneeds factor and the CRA performance records of the dures of Citizens and its subsidiary banks (collectively, subsidiary depository institutions of Citizens and Mellon in "Citizens banks"). The Board also has consulted with the light of all the facts of record, including public comments FDIC and considered confidential supervisory information received on the effect the proposal would have on the on the CRA performance of the Citizens banks. In addicommunities to be served by the institutions resulting from tion, the Board has evaluated substantial information subthis proposal. mitted by Citizens concerning the CRA performance of the Two community groups jointly submitted comments op- Citizens banks since the 1999 Citizens Evaluations and has posing the proposal and expressing concerns about the considered the lending policies, practices, and data of record of Citizens in meeting the convenience and needs of Citizens' lending affiliate, Citizens Mortgage Company the communities it serves. The commenters criticized Citi- ("CMC").19 zens' record of home mortgage lending to LMI borrowers and small business lending in LMI communities. Based on CRA Performance Record of Citizens data submitted under the Home Mortgage Disclosure Act ("HMDA"),15 the commenters also alleged that Citizens Lending. In the 1999 Citizens Evaluations, examiners comengaged in disparate treatment of minority individuals in mended the Citizens banks for their strong lending record its assessment areas with respect to home mortgage lend- during the review period.20 All the Citizens banks received ing. "outstanding" ratings under the lending tests except CBNH, which received a "high satisfactory" rating. Exam- CRA Performance Examiners iners commended the home mortgage lending activities of the Citizens banks for demonstrating excellent responsive- As provided in the CRA, the Board has evaluated the ness to the credit needs of all segments of their assessment convenience and needs factor in light of examinations by areas during the review period, including segments comthe appropriate federal supervisors of the CRA perfor- prised of LMI borrowers and communities. Examiners mance records of the relevant insured depository institu- determined that the records of the Citizens banks in maktions. An institution's most recent CRA performance eval- ing HMDA-reportable loans to LMI borrowers during the uation is a particularly important consideration in the review period were strong and generally exceeded the applications process because it represents a detailed, lending performance of the aggregate of lenders ("aggreon-site evaluation of the institution's overall record of gate lenders") in 1998.21 For example, CBMA's lending to performance under the CRA by its appropriate federal LMI borrowers as a percentage of its total HMDAsupervisor.16 reportable lending was almost twice that of the aggregate lenders in 1998. The 2000 HMDA data indicate that the Citizens Bank of Massachusetts, Boston, Massachusetts loans to LMI borrowers made by each of the Citizens ("CBMA"), the lead depository institution of Citizens, and banks as a percentage of their total HMDA-reportable all of Citizens' other subsidiary depository institutions loans exceeded or were comparable with that of the aggrereceived "outstanding" ratings at their most recent CRA gate lenders. In the 1999 Citizens Evaluation, examiners performance examinations by the FDIC, as of October 12, 1999 (collectively, "1999 Citizens Evaluation").17 Mellon also noted that the records of the Citizens banks in lending in LMI census tracts during the review period generally Bank also received an "outstanding" rating at its most were comparable with or exceeded that of the aggregate recent CRA performance examination by the Office of the Comptroller of the Currency ("OCC").18 lenders.22 As noted above, Citizens' two new subsidiary banks would acquire most of the Mid-Atlantic retail banking branches of Mellon, and the branches to be acquired would 19. CMC is a subsidiary of CBRI. Citizens stated that CMC serves as the central underwriter, processor, and servicer for standard residential first mortgage loan products offered by the Citizens banks, and 15. 12 U.S.C. § 2801 etseq. that the individual Citizens banks originate all other housing-related 16. See Interagency Questions and Answers Regarding Community loans. CMC's HMDA data were considered in the evaluation of the Reinvestment, 66 Federal Register 36,620 and 36,639 (2001). lending records of the Citizens banks in the 1999 Citizens Evaluations 17. These institutions include Citizens Bank of Rhode Island, Prov- by the FDIC. idence, Rhode Island ("CBRI"); Citizens Bank of Connecticut, New 20. The review period for the 1999 Citizens Evaluations was London, Connecticut ("CBCT"); and Citizens Bank of New Hamp- January 1, 1998, through September 30, 1999. shire, Manchester, New Hampshire ("CBNH"). United States Trust 21. In this context, "HMDA-reportable loans" refers to loans re- Company, Boston, Massachusetts, a subsidiary of Citizens, is a portable under HMDA, which includes home purchase, home imlimited-purpose trust company and, therefore, not subject to the CRA. provement, and multifamily mortgage loans and refinancings of such 18. The OCC rated Mellon Bank "outstanding," as of Novem- loans. Loans made by the aggregate of lenders refers to all HMDAber 26, 1997. Mellon's other subsidiary banks subject to the CRA reportable loans made in the assessment areas of the Citizens banks by received "satisfactory" ratings at their most recent CRA performance all lenders required to report under HMDA. examinations: Mellon DE, by the OCC, as of December 3, 1997, and 22. Examiners noted that, although CBCT's record of HMDA- Mellon 1st Business Bank, Los Angeles, California, by the FDIC, as reportable lending in LMI census tracts during the review period was of November 29, 1999. adequate, its performance in this category fell below that of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 55 Examiners commended all the Citizens banks for exten- below-market financing to small businesses in Boston's sively using innovative and flexible loan programs to better Enterprise Zone during a 10-year period. Examiners also serve local credit needs, particularly those of LMI individ- commended CBCT's participation in three programs that uals and communities.23 For example, examiners found offered flexible loan terms for small businesses in LMI that CBMA offered a number of programs with reduced census tracts in several Connecticut cities. costs and flexible underwriting standards to provide afford- Based on the small business loan data reported by Citiable housing loans to LMI families and in LMI communi- zens, the overall volume of small business loans provided ties throughout its Massachusetts assessment area. The by all the Citizens banks increased from 1999 to 2000, bank provided more than 630 loans totaling approximately except for CBCT. In addition, each of the Citizens banks, $42 million through these programs during the review including CBCT, outperformed the aggregate lenders in period. Through similar programs, CBRI provided more 2000 in terms of the percentage of their total small busithan 320 loans totaling approximately $22 million in its ness loans that were extended to businesses with revenues Rhode Island assessment area. Examiners also noted that of $1 million or less. Moreover, the percentage of each of CBCT developed a flexible mortgage product for home- the Citizens banks' loans to small businesses in LMI buyers in the low-income census tracts in New Haven, census tracts in 1999 and 2000 significantly exceeded that Connecticut, and committed $5 million to a program that of the aggregate lenders in both years. offers mortgage loans without down payment requirements In the 1999 Citizens Evaluations, examiners generally to homebuyers in LMI communities in three Connecticut found that the majority of the banks' small business loans cities. during the review period were for amounts of $100,000 or Citizens stated that since the evaluations in 1999, the less, but that their percentages of such small business loans Citizens banks have increased their lending under these were below that of the aggregate lenders in 1998. Examinprograms. The Citizens banks collectively made more than ers noted, however, that community development was the 1800 housing related loans totaling more than $180 million primary purpose of a large number of the loans reported as through these innovative and flexible loan programs during small business loans by the Citizens banks. For example, 2000 and the first six months of 2001. examiners found that CBRI made 36 small business loans Examiners also commended the small business lending totaling $6.7 million that had community development as activities of the Citizens banks. In particular, examiners their primary purpose, including $2 million in loans to noted that the banks' records of small business lending organizations that provide affordable housing for LMI indireflected a good distribution among various income geogra- viduals and communities in Rhode Island. phies and businesses of different sizes. Examiners stated In the 1999 Citizens Evaluations, examiners commended that CBRI's record of small business lending in LMI each of the banks for their level of community developcensus tracts in Rhode Island compared favorably with that ment lending. During the review period, the banks made of the aggregate lenders during the review period and community development loans totaling more than $48 milcommended the bank for consistently being named the lion. For example, CBMA made a $4.1 million loan to leading lender of Small Business Administration ("SBA") develop an assisted living facility that reserved 50 percent loans in Rhode Island.24 In addition, examiners com- of its units for LMI elders, and CBRI made a loan of mended CBMA for innovative commercial lending pro- $2.1 million to a nonprofit organization that provided coungrams, such as its $40 million commitment to provide seling and intervention services to LMI individuals. CBCT issued a $10 million line of credit for a redevelopment project in a LMI census tract in New London, Connecticut. aggregate lenders. Examiners attributed this performance to the strong In addition, examiners reported that most of the $5.5 milcompetition from local and regional banks, the very low percentage of lion in community development loans that CBNH made owner-occupied housing units in the low-income census tracts, and during the review period helped finance affordable housing the bank's limited number of mortgage loan originators. Examiners found, however, that the percentage of CBCT's HMDA-reportable for LMI individuals. lending to LMI borrowers during the review period exceeded that of The Citizens banks have maintained a high level of the aggregate lenders in 1998. To further increase its residential community development lending since the 1999 Citizens lending in LMI communities and to LMI borrowers, CBCT has Evaluations. Citizens stated that its subsidiary banks colincreased its mortgage staff and added loan products and programs to lectively made community development loans totaling assist LMI borrowers. The 2000 HMDA data indicate that the percentages of its HMDA-reportable loans made in LMI census tracts and to more than $83 million during 2000 and the first six months LMI borrowers exceeded or were comparable with that of the aggre- of 2001. gate lenders. Investment. In the 1999 Citizens Evaluations, examiners 23. All the Citizens banks offer a number of special programs to rated the investment activities of CBMA and CBRI as promote affordable home loans to LMI individuals and in LMI com- "high satisfactory" and those of CBCT and CBNH as munities, small business lending in LMI communities, and community development. Many of these programs were created by the banks "outstanding." During the review period, the banks made as in-house programs or in partnership with community organizations. qualified CRA investments totaling more than $58 million In addition, the Citizens banks and CMC offer a full array of and grants totaling more than $2.3 million. These qualified government-sponsored or -insured loans. investments included affordable housing mortgage-backed 24. CBRI has been the leading SBA lender in Rhode Island for the securities totaling more than $24 million purchased by last six years, and CBNH has been the leading SBA lender in New Hampshire for the last three years. CBMA and CBRI. Examiners also noted that CBMA in- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

56 Federal Reserve Bulletin • January 2002 vested $4.6 million in the Massachusetts Housing Partner- exceeded that of the aggregate lenders in 1999 and 2000.27 ship Fund ("MHPF") and committed more than $2.8 mil- In addition, the HMDA data indicate that the banks' denial lion in new equity to the Massachusetts Housing and disparity ratios for African-American and Hispanic appli- Equity Fund ("MHEF").25 Both organizations finance af- cants in 2000 were lower than or comparable with the fordable housing in LMI communities throughout the state. aggregate lenders' denial disparity ratios for these appli- In addition, examiners reported that CBCT created new cants.28 funds to finance affordable housing and economic develop- The HMDA data, however, reflect certain disparities in ment in LMI areas in Connecticut. Examiners also noted the rates of loan applications, originations, and denials that CBNH invested $3 million in an investment fund for among members of different racial groups. For example, low-income multifamily housing projects and invested in CBCT's lending to African-American and Hispanic applitax credit projects and programs through the New Hamp- cants in 1999 and 2000, as a percentage of its total HMDAshire Community Development Finance Authority to sup- reportable lending, was slightly below that of the aggregate port lending to small businesses and employment-transition lenders in both years. However, the bank's denial disparity programs for welfare recipients. Citizens stated that its ratios for African-American and Hispanic applicants in subsidary banks collectively made qualified investments 2000 were less than or comparable with the denial disparand grants totaling more than $24.8 million during 2000 ity ratios of the aggregate lenders. and the first six months of 2001. Importantly, the HMDA data do not indicate that the Services. All the Citizens subsidiary banks received an Citizens banks were excluding any segment of the popula- "outstanding" rating under the services test in the 1999 tion or geographic areas on a prohibited basis. The Board Citizens Evaluations. Examiners determined that the banks' nevertheless is concerned when the record of an institution retail banking services were readily accessible to all por- indicates disparities in lending and believes that all banks tions of their assessment areas, including LMI communi- are obligated to ensure that their lending practices are ties. Examiners also noted that the banks offered a variety based on criteria to ensure not only safe and sound lending, of alternative delivery systems and low-cost checking ac- but also equal access to credit by creditworthy applicants counts for individuals and small businesses. In addition, regardless of their race or income level. The Board recogexaminers commended the excellent level of community nizes, however, that HMDA data alone provide an incomservices provided by the Citizens banks and the active plete measure of an institution's lending in its community involvement of their employees with community develop- because these data cover only a few categories of housingment organizations throughout the banks' assessment ar- related lending. HMDA data, moreover, provide only limeas. ited information about covered loans.29 HMDA data, therefore, have limitations that make them an inadequate basis, HMDA Data and Fair Lending Record absent other information, for concluding that an institution has not assisted adequately in meeting its community's The Board also has carefully considered Citizens' lending credit needs or has engaged in illegal lending discriminarecord in light of comments on HMDA data reported by its tion. subsidiaries.26 Except for CBMA, all the Citizens banks Because of the limitations of HMDA data, the Board has experienced a decline in the number of loans reported considered these data carefully in light of other informaunder HMDA in 2000 compared with 1999, but the aggre- tion, including examination reports that provide an on-site gate lenders in each bank's assessment area also experi- evaluation of compliance by the Citizens banks with fair enced similar declines during the same time period. Signif- lending laws. Examiners found no evidence of prohibited icantly, the percentage of total HMDA-reportable loans discrimination or other illegal credit practices at any subthat each Citizens bank made to African-American and sidiary depository institution controlled by Citizens. The Hispanic applicants either increased or remained essen- record also indicates that Citizens has taken a number of tially the same in 2000 compared with 1999, despite the affirmative steps to ensure compliance with fair lending general decline in the number of originations. Moreover, laws. The Citizens banks have a mandatory and ongoing the percentage of total HMDA-reportable loans that the program in which all employees receive training on com- Citizens banks originated to African-American and His- pliance with fair lending and other consumer protection panic individuals and in minority census tracts generally 27. For purposes of this HMDA analysis, "minority census tracts" means census tracts with a minority population of 80 percent or more. 28. The denial disparity ratio compares the denial rate for minority 25. As of the 1999 Citizens Evaluation, CBMA had made total loan applicants with that for nonminority applicants. commitments of $29 million to the MHPF and $7.1 million to the 29. The data, for example, do not account for the possibility that an MHEF. institution's outreach efforts may attract a larger proportion of margin- 26. Based on 2000 HMDA data, the commenters alleged that the ally qualified applicants than other institutions attract and do not Citizens banks disproportionately excluded and denied African- provide a basis for an independent assessment of whether an applicant American and Hispanic applicants for home mortgage loans in various who was denied credit was, in fact, creditworthy. Credit history Metropolitan Statistical Areas ("MSAs") and Primary MSAs in Mas- problems and excessive debt levels relative to income (reasons most sachusetts, Rhode Island, Connecticut, New Hampshire, Vermont, and frequently cited for a credit denial) are not available from HMDA Maine. data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 57 laws. In addition, Citizens has established a formal fair Financial, Managerial, and Other Supervisory Factors lending committee ("Committee") that disseminates legislative, regulatory, and industry information on fair lending The BHC Act requires the Board to consider the financial matters to the appropriate employees of the Citizens banks. and managerial resources and future prospects of the com- The Committee also reviews the Citizens banks' lending panies and banks involved in a bank acquisition proposal.31 data to evaluate potential fair lending issues with respect to In assessing the financial and managerial strength of Applicredit decisions and compensation incentives, and con- cants and the banks to be acquired, the Board has reviewed ducts comparative file analyses. As part of a secondary information provided by Applicants, confidential supervireview process, the Committee also compares denied appli- sory and examination information, publicly reported and cants with approved applicants to ensure that no prohibited other financial information, and public comments.32 In basis was a factor in the credit decision. addition, the Board consulted with relevant supervisory The Board also has considered the HMDA data in light authorities in the United Kingdom. of Citizens' overall lending and community development In evaluating financial factors in expansion proposals by activities discussed above, which show that the Citizens banking organizations, the Board consistently has considbanks significantly assist in helping to meet the credit ered capital adequacy to be especially important. The proneeds of their entire communities.30 The Board believes posed acquisition is structured as a purchase-andthat, viewed in light of the entire record, the HMDA data assumption transaction financed with the proceeds of a indicate that Citizens' record of performance in helping to recent equity issuance by RBS Group. Citizens PA and serve the credit needs of its communities is consistent with Citizens DE would be well capitalized and the risk-based approval of the proposal. regulatory capital ratios of Citizens on a consolidated basis would remain above the well-capitalized thresholds on Conclusion on Convenience and Needs Considerations consummation of the proposal. In addition, the capital ratios of RBS Group on a consolidated basis and RBS In reviewing the effect of the proposal on the convenience would continue to exceed the minimum levels that would and needs of the communities to be served, the Board has be required under the Basel Capital Accord. These ratios carefully considered the entire record, all the information are considered equivalent to the capital ratios that would be provided by the commenters and Citizens, evaluations of required of a U.S. banking organization. the performance of the Citizens banks under the CRA, and The Board also has considered the managerial resources confidential supervisory information. of Applicants, including the examination records of Citi- Based on all the facts of record and for reasons discussed zens and its subsidiary depository institutions by the approabove, the Board concludes that considerations relating to priate federal financial supervisory agencies. In addition, the convenience and needs factor, including the CRA per- the Board has considered the plans of Applicants to impleformance records of the relevant depository institutions, ment the proposal, including their available managerial are consistent with approval. resources and record of successfully integrating acquisitions into existing operations. After reviewing all the facts of record, the Board concludes that Applicants, including the subsidiary depository institutions of Citizens, have adequate managerial resources and appropriate risk management systems in place. Based on these and all the facts of record, the Board concludes that the financial and mana- 30. Commenters alleged that RBS Group has indirectly supported gerial resources and future prospects of Applicants and predatory lending by a number of unaffiliated consumer lenders through the securitization activities and warehouse lending services of their subsidiary banks are consistent with approval. its subsidiary, Greenwich Capital Markets, Greenwich, Connecticut Section 3 of the BHC Act also provides that the Board ("GCM"). Applicants stated that GCM underwrites securities backed may not approve an application involving a foreign bank by consumer loans, including subprime mortgage loans originated by unaffiliated third parties. In addition, GCM's affiliate, Greenwich unless the bank is subject to comprehensive consolidated Capital Financial Products, Inc. ("GCFP"), provides warehouse fi- supervision or regulation on a consolidated basis by the nance and repurchase facilities to unaffiliated mortgage originators, appropriate authorities in the bank's home country.33 The including some engaged in subprime lending. Applicants also noted that GCM has invested in securities backed by subprime loan pools that are issued by unaffiliated parties. The Board has considered all the facts of record, including the 31 .See 12 U.S.C. § 1842(c)(2). relationships of GCM, GCFP, and Citizens with unaffiliated consumer 32. The commenters also expressed concern that the activities of lenders. Applicants stated that GCM, GCFP, and Citizens do not play RBS Group and its affiliates in Indonesia ignored human rights any formal or informal role in the loan origination process or in concerns, damaged the environment, or caused other societal harm. developing the loan originator's lending practices or credit approval These contentions contain no allegations of illegality or action that processes. They noted, however, that GCM conducts due diligence would affect the safety and soundness of the institutions involved in reviews in connection with its securitization activities that typically the proposal, and are outside the limited statutory factors that the includes reviews to determine if the originators are complying with Board is authorized to consider when reviewing an application under federal and state laws. Moreover, the Board notes that the Federal the BHC Act. See Western Bancshares, Inc. v. Board of Governors, Trade Commission, Department of Housing and Urban Development, 480 F.2d 749 (10th Cir. 1973). and Department of Justice have responsibility for enforcing the com- 33. 12 U.S.C. § 1842(c)(3)(B). Under Regulation Y, the Board uses pliance with fair lending laws of nondepository institutions. the standards enumerated in Regulation K to determine whether a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

58 Federal Reserve Bulletin • January 2002 home country supervisor of RBS Group is the United Conclusion Kingdom's Financial Services Agency ("FSA"), which is responsible for the supervision and regulation of United Based on the foregoing and in light of all the facts of Kingdom financial institutions. record, the Board has determined that the applications In approving applications under the BHC Act and the should be, and hereby are, approved.37 In reaching its International Banking Act (12 U.S.C. §§ 3101 et seq.) conclusion, the Board has considered all the facts of record ("IBA"), the Board previously has determined that United in light of the factors that it is required to consider under Kingdom banks, including RBS, were subject to home the BHC Act and other applicable statutes. The Board's country supervision on a consolidated basis.34 In this case, approval is specifically conditioned on compliance by Apthe Board finds that the FSA continues to supervise RBS in plicants with all the representations and commitments substantially the same manner as it supervised United made in connection with the application and prior commit- Kingdom banks at the time of those previous determinaments referenced in this order. These representations, comtions. Based on this finding and all the facts of record, the mitments, and conditions are deemed to be conditions Board concludes that RBS continues to be subject to comimposed in writing by the Board in connection with its prehensive supervision on a consolidated basis by its home findings and decision and, as such, may be enforced in country supervisor. proceedings under applicable law. In addition, section 3 of the BHC Act requires the Board The transaction shall not be consummated before the to determine that a foreign bank has provided adequate fifteenth calendar day after the effective date of this order, assurances that it will make available to the Board such and the proposal may not be consummated later than three information on its operations and activities and those of its months after the effective date of this order, unless such affiliates that the Board deems appropriate to determine period is extended for good cause by the Board or by the and enforce compliance with the BHC Act.35 The Board Federal Reserve Bank of Boston, acting pursuant to delehas reviewed the restrictions on disclosure in relevant gated authority. jurisdictions in which RBS Group operates and has com- By order of the Board of Governors, effective Novemmunicated with relevant government authorities concernber 9, 2001. ing access to information. In addition, RBS Group and RBS previously have committed to make available to the Voting for this action: Chairman Greenspan, Vice Chairman Fergu- Board such information on the operations of RBS Group son, and Governors Kelley, Meyer, and Gramlich. and its affiliates that the Board deems necessary to determine and enforce compliance with the BHC Act, the IBA, ROBERT DEV. FRIERSON and other applicable federal law. RBS Group and RBS also Deputy Secretary of the Board previously have committed to cooperate with the Board to obtain any waivers or exemptions that may be necessary to enable RBS Group and its affiliates to make such information available to the Board. In light of these commitments, the Board concludes that RBS Group and RBS have provided adequate assurances of access to any appropriate information that the Board may request. Based on these and all the facts of record, the Board concludes that the of information submitted by RBS regarding its policies and procesupervisory factors it is required to consider are consistent dures on correspondent bank and certain other customer account with approval.36 relationships and additional confidential information. 37. The commenters also requested that the Board hold a public hearing on the proposal. Section 3 of the BHC Act does not require the Board to hold a public hearing on an application unless the foreign bank that has applied under section 3 of the BHC Act is appropriate supervisory authority for any of the banks to be acquired subject to consolidated home country supervision. See 12 C.F.R. makes a timely written recommendation of denial of the application. 225.13(a)(4). Regulation K provides that a foreign bank will be The Board has not received such a recommendation from the appropriconsidered to be subject to comprehensive supervision or regulation ate supervisory authority. Under its rules, the Board also may, in its on a consolidated basis if the Board determines that the bank is discretion, hold a public meeting or hearing on an application to supervised or regulated in such a manner that its home country acquire a bank if a meeting or hearing is necessary or appropriate to supervisor receives sufficient information on the worldwide operations clarify factual issues related to the application and to provide an of the bank, including its relationship to any affiliates, to assess the opportunity for testimony. 12 C.F.R. 225.16(e). The Board has considbank's overall financial condition and its compliance with law and ered carefully the commenters' requests in light of all the facts of regulation. See 12 C.F.R. 211.24(c)(1). record. In the Board's view, the public has had ample opportunity to 34. See Abbey National Treasury Services pic, 87 Federal Reserve submit comments on the proposal, and in fact, the commenters have Bulletin 750 (2001); see also The Royal Bank of Scotland Group, 82 submitted written comments that the Board has considered carefully Federal Reserve Bulletin 428 (1996). in acting on the proposal. Commenters' requests fail to demonstrate 35. See 12 U.S.C. § 1842(c)(3)(A). why their written comments do not present their views adequately or 36. A commenter questioned the policies and procedures of RBS why a meeting or hearing otherwise would be necessary or appropriconcerning correspondent banking relationships in connection with ate. For these reasons, and based on all the facts of record, the Board certain directives and action requests recently issued to financial has determined that a public hearing is not required or warranted in institutions by government authorities. In evaluating the managerial this case. Accordingly, the requests for a public hearing on the proposal are denied. and supervisory factors, the Board reviewed these comments in light Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 59 ORDERS ISSUED UNDER INTERNATIONAL BANKING foreign bank parent is subject to comprehensive supervi- ACT sion or regulation on a consolidated basis by its home country supervisor (12 U.S.C. § 3107(a)(2); 12 C.F.R. Jamaica National Building Society 211.24(d)(2)).3 The Board will consider that this standard Kingston, Jamaica regarding supervision has been met where it determines that the applicant bank is subject to a supervisory frame- Order Approving Establishment of a Representative work that is consistent with the activities of the proposed Office representative office, taking into account the nature of such activities and the operating record of the applicant.4 In Jamaica National Building Society ("Bank"), Kingston, addition, the Board may take into account additional stan- Jamaica, a foreign bank within the meaning of the Interna- dards set forth in the IBA and Regulation K (12 U.S.C. tional Banking Act ("IBA"), has applied under section § 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)). 10(a) of the IBA (12 U.S.C. § 3107(a)) to establish a repre- In connection with this application, Bank has provided sentative office in Fort Lauderdale, Florida. The Foreign certain commitments that limit the activities of the repre- Bank Supervision Enhancement Act of 1991, which sentative office. It has committed that the representative amended the IBA, provides that a foreign bank must obtain office would not make credit decisions on behalf of the the approval of the Board to establish a representative parent building society, solicit deposits on behalf of the office in the United States. home office (other than from institutional investors), or Notice of the application, affording interested persons an engage in activities related to trading or money transmisopportunity to submit comments, has been published in a sion. The representative office also would not share office newspaper of general circulation in Fort Lauderdale (Sun- space or premises with Bank's U.S. money transmitter Sentinel, June 26, 1998). The time for filing comments has subsidiary. expired, and all comments have been considered. As noted above, Bank engages directly in the business of Bank, with total consolidated assets of approximately banking outside the United States. Bank also has provided $527 million,1 is the fourth largest deposit-taking institu- the Board with information necessary to assess the application and the largest building society in Jamaica.2 Bank tion through submissions that address the relevant issues. primarily engages in residential mortgage lending and re- Bank has provided the following information regarding tail banking activities through 18 domestic offices. Bank home country supervision. Bank's primary home country also engages in real estate development, investment man- supervisor is the Bank of Jamaica ("BOJ"), Jamaica's agement, leasing, data processing, mortgage lending, and central bank.5 The BOJ supervises and regulates Bank insurance and stock brokerage activities through a number through a combination of regular on-site reviews and offof domestic subsidiaries. Outside Jamaica, Bank maintains site monitoring. On-site examinations include a review of representative offices in London, United Kingdom, and Toronto, Canada, and offers money transmission and mortgage lending services, primarily to Jamaicans living 3. In assessing this standard, the Board considers, among other abroad, through subsidiaries operating in London, Toronto, factors, the extent to which the home country supervisors: New York, and Fort Lauderdale. (i) Ensure that the bank has adequate procedures for monitoring The proposed representative office would provide infor- and controlling its activities worldwide; (ii) Obtain information on the condition of the bank and its mation on Bank, Bank's services in Jamaica, the Jamaican subsidiaries and offices through regular examination reports, economy, and opportunities in Jamaica to Bank's members and audit reports, or otherwise; residing in Florida and to the wider population of Jamai- (iii) Obtain information on the dealings with and relationship cans living in Florida. The proposed office would assist between the bank and its affiliates, both foreign and domestic; borrowers in completing mortgage application forms, trans- (iv) Receive from the bank financial reports that are consolidated on a worldwide basis or comparable information that permits mit completed loan application documents to the head analysis of the bank's financial condition on a worldwide office in Jamaica for review and approval, and promote consolidated basis; Bank's mortgage services generally. (v) Evaluate prudential standards, such as capital adequacy and In acting on an application to establish a representative risk asset exposure, on a worldwide basis. office, the IBA and Regulation K provide that the Board These are indicia of comprehensive, consolidated supervision. No single factor is essential, and other elements may inform the Board's shall take into account whether the foreign bank engages determination. directly in the business of banking outside of the United 4. See, e.g., RHEINHYP Rheinische Hypothekenbank AG, 87 Fed- States and has furnished to the Board the information it eral Reserve Bulletin 558 (2001); see also Promstroybank of Russia, needs to assess the application adequately. The Board also 82 Federal Reserve Bulletin 599 (1996); Komercni Banka, a.s., 82 Federal Reserve Bulletin 597 (1996); Commercial Bank "Ion Tiriac", shall take into account whether the foreign bank and any S.A., 82 Federal Reserve Bulletin 592 (1996). 5. The BOJ has been supervising building societies, including Bank, since 1995. The laws governing Jamaican building societies are, in 1. Unless otherwise indicated, data are as of March 31, 2001. some respects, outdated, and the existing supervisory system has 2. Bank is a mutual organization with more than 300,000 members. certain deficiencies. The BOJ is working to improve its oversight of Each of Bank's members is considered to be a shareholder and has building societies, however, by, among other things, sponsoring legisone vote. No single shareholder is considered to control the organiza- lation that would strengthen the framework for supervision of such tion. entities and strengthen their operations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 Federal Reserve Bulletin • January 2002 Bank's head office and branch operations, but not a review for the proposed representative office to ensure compliance of Bank's foreign offices or foreign or domestic subsidiar- with U.S. law. ies. Off-site monitoring consists of a review of periodic With respect to access to information on Bank's operareports, most of which contain bank-only data.6 The re- tions, the restrictions on disclosure in relevant jurisdictions ports address, among other prudential matters, Bank's com- in which Bank operates have been reviewed and relevant pliance with restrictions on transactions with affiliates.7 government authorities have been communicated with re- Bank is required to have its annual financial statements garding access to information. Bank has committed to audited by an independent public accountant. External make available to the Board such information on the operauditors are required to report to the BOJ on significant ations of Bank and any of its affiliates that the Board deems issues revealed, and the BOJ reviews the results of the necessary to determine and enforce compliance with the external audit. In addition, Bank is required to establish IBA, the Bank Holding Company Act of 1956, as amended, and has established internal controls, policies, and proce- and other applicable federal law. To the extent that the dures consistent with standards adopted by the BOJ. The provision of such information to the Board may be prohib- BOJ reviews the Bank's internal audit function during ited by law or otherwise, Bank has committed to cooperate on-site examinations. with the Board to obtain any necessary consents or waivers The Jamaican Minister of Finance, in consultation with that might be required from third parties for disclosure of the BOJ, has the authority to take a range of remedial such information. In addition, subject to certain conditions, the BOJ may share information on Bank's operations with actions against building societies in appropriate circumother supervisors, including the Board. In light of these stances. commitments and other facts of record, and subject to the Jamaica has enacted laws and the BOJ has promulgated condition described below, it has been determined that implementing regulations aimed at preventing money laun- Bank has provided adequate assurances of access to any dering. The laws and regulations require financial institunecessary information that the Board may request. tions, including building societies, to establish and implement policies, procedures, and controls for the purpose of On the basis of all the facts of record, and subject to the preventing and detecting money laundering, and to report commitments made by Bank, and the terms and conditions certain cash transactions, as well as suspicious transac- set forth in this order, Bank's application to establish the tions, to appropriate authorities. An institution's compli- representative office is hereby approved.8 Should any reance with applicable laws and regulations is monitored by strictions on access to information on the operations or the BOJ and the institution's external auditors. Bank has activities of Bank or any of its affiliates subsequently policies and procedures to comply with these laws and interfere with the Board's ability to obtain information to regulations. determine and enforce compliance by Bank or its affiliates Based on all the facts of record, including the commit- with applicable federal statutes, the Board may require or ments provided by Bank limiting the activities of the recommend termination of any of Bank's direct and indiproposed office, it has been determined that factors relating rect activities in the United States. Approval of this applito the supervision of Bank by its home country supervisors cation also is specifically conditioned on compliance by are consistent with approval of the proposed representative Bank with the commitments made in connection with this office. application and with the conditions in this order.9 The commitments and conditions referred to above are condi- The additional standards set forth in section 7 of the IBA tions imposed in writing by the Board in connection with and Regulation K (see 12 U.S.C. § 3105(d)(3)-(4); its decision and may be enforced in proceedings against 12 C.F.R. 211.24(c)(2)) have also been taken into account. Bank and its affiliates under 12 U.S.C § 1818. The BOJ has no objection to establishment of the proposed representative office. By order, approved pursuant to authority delegated by With respect to the financial and managerial resources of the Board, effective November 6, 2001. Bank, taking into consideration Bank's record of operations in its home country, its overall financial resources, ROBERT DEV. FRIERSON and its standing with its home country supervisor, financial Deputy Secretary of the Board and managerial factors are consistent with approval of the proposed representative office. Bank appears to have the 8. Approved by the Director of the Division of Banking Supervision experience and capacity to support the proposed represenand Regulation, with the concurrence of the General Counsel, pursutative office and has established controls and procedures ant to authority delegated by the Board. 9. The Board's authority to approve the establishment of the proposed representative office parallels the continuing authority of the State of Florida to license offices of a foreign bank. Approval of this 6. The exception to reporting bank-only data is Bank's filing of application does not supplant the authority of the State of Florida, or consolidated audited financial statements annually. its agent, the Florida Department of Banking and Finance ("Depart- 7. These limits were put into place in 1996 after much of the ment"), to license the proposed office of Bank in accordance with any Jamaican financial sector experienced extreme difficulties. terms or conditions that the Department may impose. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 61 INDEX OF ORDERS ISSUED OR ACTIONS TAKEN BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (July 1, 2001 - September 30, 2001) Bulletin Volume Applicant Merged or Acquired Bank of Activity Date of Approval and Page Abbey National Treasury Services pic, To establish a branch in Stamford, September 17, 2001 87, 750 London, England Connecticut Banco de Credito del Peru, To establish an agency in Miami, Florida August 9, 2001 87, 708 Lima, Peru Canadian Imperial Bank of Commerce, Juniper Financial Corp., August 17, 2001 87, 678 Toronto, Canada Wilmington, Delaware CIBC World Markets Inc., Juniper Bank, Toronto, Canada Wilmington, Delaware CIBC Delaware Holdings Inc., New York, New York Amicus Holdings Inc., Falls Church, Virginia The Chase Manhattan Bank, Chase Bank of Texas B San Angelo, July 9, 2001 87, 626 New York, New York National Association, San Angelo, Texas Citigroup Inc., European American Bank, Uniondale, July 2, 2001 87, 600 New York, New York New York Citigroup Holdings Company, Wilmington, Delaware Citicorp, New York, New York Citigroup Inc., Grupo Financiero Banamex Accival, S.A. July 16, 2001 87, 613 New York, New York de C.V., Citigroup Holdings Company, Mexico City, Mexico Wilmington, Delaware Banco Nacional de Mexico, S.A., Citicorp, Mexico City, Mexico New York, New York Banamex USA Bancorp, Los Angeles, California California Commerce Bank, Los Angeles, California DePfa Bank AG, To establish a representative office in August 9, 2001 87, 710 Wiesbaden, Germany New York, New York First Union Corporation, Wachovia Corporation, August 13, 2001 87, 683 Charlotte, North Carolina Winston-Salem, North Carolina Wachovia Bank, National Association, Winston-Salem, North Carolina Atlantic Savings Bank, FSB, Hilton Head Island, South Carolina First Western Bancorp, Inc., American Bank Shares, Inc., August 9, 2001 87, 681 Huron, South Dakota Rapid City, South Dakota American State Bank, Rapid City, South Dakota Harrodsburg First Financial Bancorp, Citizens Financial Bank, Inc., July 2, 2001 87, 624 Inc., Glasgow, Kentucky Harrodsburg, Kentucky First Financial Bank, Harrodsburg, Kentucky Native American Bancorporation Co., Blackfeet National Bank, September 28, 2001 87, 747 Denver, Colorado Browning, Montana Native American Community Development Corporation, Denver, Colorado Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 Federal Reserve Bulletin • January 2002 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 Capitol Bancorp Ltd., First California Northern Bancorp, Chicago November 9, 2001 Lansing, Michigan Napa, California Sun Community Bancorp Limited, Phoenix, Arizona Capitol Bancorp Ltd., Nevada Community Bancorp Limited, Chicago November 9, 2001 Lansing, Michigan Las Vegas, Nevada Sun Community Bancorp Limited, Bank of Las Vegas, Phoenix, Arizona Las Vegas, Nevada Dunlap Iowa Holding Co., EWN Investments, Inc., Chicago November 7, 2001 Dunlap, Iowa Ute, Iowa Ute State Bank, Ute, Iowa First California Northern Bancorp, Napa Community Bank, Chicago November 9, 2001 Napa, California Napa, California First National Bank of Berryville First Carroll Bankshares, Inc., St. Louis November 8, 2001 Employee Stock Ownership Trust, Berryville, Arkansas Berryville, Arkansas Manito Bank Services, Inc., Peoples State Bank, Chicago November 8, 2001 Manito, Illinois Manito, Illinois PRP Bancorp, Inc., PRP National Bank, St. Louis November 6, 2001 Corbin, Kentucky Pleasure Ridge Park, Kentucky Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date SouthTrust Corporation, Community Bankshares, Incorporated, Atlanta November 9, 2001 Birmingham, Alabama Richmond, Virginia SouthTrust of Alabama, Inc., Commerce Bank, Birmingham, Alabama Richmond, Virginia APPLICATIONS APPROVED UNDER BANK MERGER ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Applicant(s) Bank(s) Reserve Bank Effective Date Colonial Bank, Manufacturers Bank of Florida, Atlanta November 9, 2001 Montgomery, Alabama Tampa, Florida Israel Discount Bank of New York, New York, New York SouthTrust Bank, Commerce Bank, Atlanta November 9, 2001 Birmingham, Alabama Richmond, Virginia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 63 PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the Artis v. Greenspan, No. 01-CV-0400(ESG) (D.D.C., complaint Federal Reserve Banks in which the Board of Governors is not filed February 22, 2001. Employment discrimination action. named a party. On August 15, 2001, the district court consolidated the action with Artis v. Greenspan, No. 99-CV-2073 (EGS) (D.D.C., filed August 3, 1999), also an employment dis- Community Bank & Trust v. United States, No. 01-571C crimination action. (Ct. Fed. CL, filed October 3, 2001). Action challenging Howe v. Bank for International Settlements, No. 00CV12485 failure to pay interest on reserve accounts held at Federal RCL (D. Mass., filed December 7, 2000). Action seeking Reserve Bank. damages in connection with gold market activities and the Emran v. Greenspan, No. 1:01CV1992 (PLF) (D.D.C., filed repurchase of privately-owned shares of the Bank for Inter- September 20, 2001). Employment discrimination claim. national Settlements. Trans Union LLC v. Federal Trade Commission, et al., Bettersworth v. Board of Governors, No. 01^444 (United No. 01-5202 (D.C. Cir., filed June 4, 2001). Appeal of States Supreme Court, docketed September 14, 2001). Petidistrict court order entered April 30, 2001, upholding an tion for certiorari seeking review of denial of petitioner's interagency rule regarding Privacy of Consumer Finance Privacy Act claims. On November 13, 2001, the Supreme Information. Court denied the petition. Albrecht v. Board of Governors, No. 00-CV-317 (CKK) Laredo National Bancshares, Inc. v. Whalen v. Board of Gov- (D.D.C., filed February 18, 2000). Action challenging the ernors, No. 01-CV-134 (S.D. Tex., removed on Septemmethod of funding of the retirement plan for certain Board ber 5, 2001, from No. 99CVQ00940-D3 (District Court, employees. On March 30, 2001, the district court granted in 341st Judicial District, Webb County, Texas, originally filed part and denied in part the Board's motion to dismiss. July 26, 2001). Third-party petition seeking indemnification Guerrero v. United States, No. CV-F-99-6771(OWW) (E.D. or contribution from the Board in connection with a claim Cal., filed November 29, 1999). Prisoner suit. asserted against defendant Whalen alleging tortious interfer- Fraternal Order of Police v. Board of Governors, ence with a contract. No. 1:98CV03116 (WBB)(D.D.C„ filed December 22, Radfar v. United States, No. 1:01CV1292 (PLF) (D.D.C., 1998). Declaratory judgment action challenging Board lacomplaint filed June 11, 2001). Action under the Federal bor practices. On February 26, 1999, the Board filed a Tort Claims Act for injury on Board premises. motion to dismiss the action. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

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

A1 Financial and Business Statistics A3 GUIDE TO TABLES Federal Finance—Continued A27 Gross public debt of U.S. Treasury— DOMESTIC FINANCIAL STATISTICS Types and ownership A28 U.S. government securities Money Stock and Bank Credit dealers—Transactions A4 Reserves, money stock, and debt measures A29 US. government securities dealers— A5 Reserves of depository institutions and Reserve Bank Positions and financing credit A30 Federal and federally sponsored credit A6 Reserves and borrowings—Depository agencies—Debt outstanding institutions Securities Markets and Corporate Finance Policy Instruments A31 New security issues—Tax-exempt state and local A7 Federal Reserve Bank interest rates governments and corporations A8 Reserve requirements of depository institutions A3 2 Open-end investment companies—Net sales A9 Federal Reserve open market transactions and assets A32 Corporate profits and their distribution A32 Domestic finance companies—Assets and liabilities Federal Reserve Banks 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 A35 Mortgage debt outstanding A12 Aggregate reserves of depository institutions and monetary base A13 Money stock and debt measures Consumer Credit A3 6 Total outstanding Commercial Banking Institutions— A3 6 Terms Assets and Liabilities A15 All commercial banks in the United States Flow of Funds A16 Domestically chartered commercial banks A37 Funds raised in U.S. credit markets A17 Large domestically chartered commercial banks A39 Summary of financial transactions A19 Small domestically chartered commercial banks A40 Summary of credit market debt outstanding A20 Foreign-related institutions A41 Summary of financial assets and liabilities Financial Markets DOMESTIC NONFINANCIAL STATISTICS A22 Commercial paper 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

A2 Federal Reserve Bulletin • January 2002 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 TABLE A52 Liabilities to, and claims on, foreigners A53 Liabilities to foreigners A64 Pro forma balance sheet and income statement A55 Banks' own claims on foreigners for priced service operations, September 30, 2001 A56 Banks' own and domestic customers' claims on foreigners A66 INDEX TO STATISTICAL TABLES A56 Banks' own claims on unaffiliated foreigners A57 Claims on foreign countries—Combined domestic offices and foreign branches Reported by Nonbanking Business 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 Tables SYMBOLS AND ABBREVIATIONS c Corrected G-10 Group of Ten e Estimated GDP Gross domestic product n.a. Not available GNMA Government National Mortgage Association n.e.c. Not elsewhere classified GSE Government-sponsored enterprise P Preliminary HUD Department of Housing and Urban r Revised (Notation appears in column heading Development when about half the figures in the column have IMF International Monetary Fund been revised from the most recently published IOs Interest only, stripped, mortgage-backed securities table.) IPCs Individuals, partnerships, and corporations * Amount insignificant in terms of the last decimal IRA Individual retirement account place shown in the table (for example, less than MMDA Money market deposit account 500,000 when the smallest unit given in millions) MSA Metropolitan statistical area 0 Calculated to be zero NAICS North American Industry Classification System 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-backed 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 TIIS Treasury inflation-indexed securities FSLIC Federal Savings and Loan Insurance Corporation VA Department of Veterans Affairs G-7 Group of Seven 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 U.S. 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 • January 2002 1.10 RESERVES, MONEY STOCK, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted' 2000 2001 2001 MMoonneettaarryy oorr ccrreeddiitt aaggggrreeggaattee Q4' Qir Q2r Q3' June' July1" Aug/ Sept.r Oct. Reserves of depository institutions1 1 Total -9.0 -2.1 1.9 71.7 -3.9 25.8 8.7 540.1 -266.0 2 Required -11.3 -3.6 4.3 10.4 -14.7 26.1 14.4 4.4 160.2 3 Nonborrowed -6.7 .4 .9 60.4 -4.4 24.3 11.8 445.8 -210.8 4 Monetary base3 2.8 6.4 5.4 14.7 5.6 11.6 15.4 47.2 -19.1 Concepts of money and debt* 5 Ml -3.3 5.0 5.5 14.5 6.6 13.8 8.6 58.1 -41.3 6 M2 6.0 9.8 9.7 10.7 9.9 9.1 8.2 26.7 -1.5 7 M3 7.3 13.1 14.7 9.7 13.0 6.9 .8 25.0 10.6 8 Debt 4.4 4.8 5.9 5.8 6.1 3.8 6.7 8.0 n.a. Nontransaction components 9 In M25 8.8 11.2 10.9 9.6 10.8 7.8 8.1 18.0 9.9 10 In M3 only6 10.4 20.7 25.9 7.6 19.7 2.2 -14.8 21.1 37.0 Time and savings deposits Commercial banks 11 Savings, including MMDAs 12.1 17.4 20.4 19.8 19.1 12.4 24.5 32.9 12.4 12 Smalltime7 5.6 2.5 -7.8 -10.3 -10.3 -13.9 -7.5 -8.6 -11.2 13 Large time8-9 4.1 -1.3 -.2 -4.0 9.2 -11.4 -19.4 6.7 23.7 Thrift institutions 14 Savings, including MMDAs .4 6.5 22.3 25.3 25.1 23.1 24.3 22.9 33.4 15 Smalltime7 9.3 6.5 4.0 -4.8 -3.1 -8.2 -9.9 —4.5 -14.9 16 Large time8 10.6 11.1 12.8 16.0 -8.7 20.7 31.1 13.6 1.0 Money market mutual funds 17 Retail 10.4 12.2 7.0 4.9 10.5 13.4 -9.6 17.1 16.2 18 Institution-only 20.5 50.8 55.1 21.9 44.9 9.7 -20.1 53.0 76.4 Repurchase agreements and eurodollars 19 Repurchase agreements10 2.1 -7.1 21.0 -9.6 1.6 -12.4 -11.5 ^10.8 -11.1 20 Eurodollars10 10.3 38.6 8.1 6.4 -16.0 28.5 -4.9 26.8 -12.3 Debt components4 21 Federal -8.0 -5.2 -7.0 3.1 1.6 4.5 7.6 12.3 n.a. 22 Nonfederal 7.4 7.1 8.7 6.3 7.1 3.6 6.5 7.1 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 regula- and Canada. Excludes amounts held by depository institutions, the U.S. government, money tory 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, and adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency eurodollars, each seasonally adjusted separately, and adding this result to seasonally adjusted component of the money stock, plus (3) (for all quarterly reporters on the "Report of 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 nonfinanvault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference cial sectors—the federal sector (U.S. government, not including government-sponsored between current vault cash and the amount applied to satisfy current reserve requirements. enterprises or federally related mortgage pools) and the nonfederal sectors (state and local 4. Composition of the money stock measures and debt is as follows: governments, households and nonprofit organizations, nonfinancial corporate and nonfarm Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data, commercial banks other than those owed to depository institutions, the U.S. government, and which are derived from the Federal Reserve Board's flow of funds accounts, are breakforeign banks and official institutions, less cash items in the process of collection and Federal adjusted (that is, discontinuities in the data have been smoothed into the series) and Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of month-averaged (that is, the data have been derived by averaging adjacent month-end levels). withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, 5. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail credit union share draft accounts, and demand deposits at thrift institutions. Seasonally money fund balances, each seasonally adjusted separately. adjusted Ml is computed by summing currency, travelers checks, demand deposits, and 6. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities OCDs, each seasonally adjusted separately. (overnight and term) issued by depository institutions, and (4) eurodollars (overnight and M2: Ml plus (1) savings (including MMDAs), (2) small-denomination time deposits (time term) of U.S. addressees, each seasonally adjusted separately. deposits—including retail RPs—in amounts of less than $100,000), and (3) balances in retail 7. Small time deposits—including retail RPs—are those issued in amounts of less than money market mutual funds. Excludes individual retirement accounts (IRAs) and Keogh $100,000. All IRA and Keogh account balances at commercial banks and thrift institutions balances at depository institutions and money market funds. Seasonally adjusted M2 is are subtracted from small time deposits. calculated by summing savings deposits, small-denomination time deposits, and retail money 8. Large time deposits are those issued in amounts of $100,000 or more, excluding those fund balances, each seasonally adjusted separately, and adding this result to seasonally booked at international banking facilities. adjusted Ml. 9. Large time deposits at commercial banks less those held by money market funds, M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more), (2) depository institutions, the U.S. government, and foreign banks and official institutions. balances in institutional money funds, (3) RP liabilities (overnight and term) issued by all 10. Includes both overnight and term. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A5 1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT1 Millions of dollars Average of Average of daily figures for week ending on date indicated daily figures 2001 2001 Aug. Sept. Oct. Sept. 19 Sept. 26 Oct. 3 Oct. 10 Oct. 17 Oct. 24 Oct. 31 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 599,962 628,193 613,448 671,614 611,158 612,892 615,543 616,686 606,617 617,176 U.S. government securities2 2 Bought outright—System account3 539,769 533,581 541,533 523,359 530,998 534,515 540,135 541,322 543,577 543,435 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 agreeements—triparty4 22,971 44,704 33,035 75,296 39,333 41,250 32,719 33,154 27,405 37,843 7 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 8 Adjustment credit 23 3,344 9 1,502 1,065 11 8 7 10 10 9 Seasonal credit 165 89 68 95 67 83 81 67 64 54 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 35 7,551 490 27,252 1,906 -665 1,737 915 -38 -146 13 Other Federal Reserve assets 36,989 38,914 38,302 44,101 37,778 37,689 40,852 41,213 35,589 35,968 14 Gold stock 11,044 11,044 11,045 11,043 11,043 11,045 11,045 11,045 11,045 11,045 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 32,846 32,984 33,045 32,985 32,999 33,013 33,027 33,041 33,055 33,069 ABSORBING RESERVE FUNDS 17 Currency in circulation 607,335 613,474 615,444 615,347 612,964 613,154 616,701 616,113 614,807 614,653 18 Reverse repurchase agreements—triparty4 . .. 0 0 0 0 0 0 0 0 0 0 19 Treasury cash holdings 413 424 438 426 429 422 428 442 451 438 Deposits, other than reserve balances, with Federal Reserve Banks 20 Treasury 5,040 6,644 5,234 6,291 8,462 7,728 5,076 4,722 5,321 5,121 21 Foreign 89 292 505 157 605 619 649 632 579 112 22 Service-related balances and adjustments . . 7,558 7,796 8,160 1,101' 8,139r 8,016 8,327 8,096 8,057 8,223 23 Other 303 342 262 382 298 235 283 257 262 236 24 Other Federal Reserve liabilities and capital . . 18,220 19,081 17,892 20,660 18,787 17,855 17,898 17,958 17,844 17,879 25 Reserve balances with Federal Reserve Banks5 7,092 26,368r 11,802 66,873r 7,716 11,121 12,454 14,753 5,595 16,827 End-of-month figures Wednesday figures Aug. Sept. Oct. Sept. 19 Sept. 26 Oct. 3 Oct. 10 Oct. 17 Oct. 24 Oct. 31 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 608,399 619,548 625,350 607,777 614,659 608,192 620,130 624,125 610,745 625,350 U.S. government securities2 2 Bought outright—System account3 541,807 534,136 544,287 526,624 526,817 537,834 540,111 544,024 544,190 544,287 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 agreeements—triparty4 29,755 47,880 45,050 39,600 51,290 32,755 33,505 37,045 30,050 45,050 7 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 8 Adjustment credit 6 7 15 2,587 20 0 46 1 42 15 9 Seasonal credit 117 81 40 87 75 85 75 64 60 40 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 463 -549 244 1,258 -1,560 50 5,323 1,640 646 244 13 Other Federal Reserve assets 36,241 37,983 35,703 37,613 38,007 37,459 41,061 41,342 35,747 35,703 14 Gold stock 11,044 11,045 11,045 11,043 11,043 11,045 11,045 11,045 11,045 11,045 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 32,957 33,013 33,069 32,985 32,999 33,013 33,027 33,041 33,055 33,069 ABSORBING RESERVE FUNDS 17 Currency in circulation 613,266 612,069 616,853 615,464 613,590 615,245 618,009 616,220 615,437 616,853 18 Reverse repurchase agreements—triparty4 . . . 0 0 0 0 0 0 0 0 0 0 19 Treasury cash holdings 416 422 435 430 422 426 440 453 439 435 Deposits, other than reserve balances, with Federal Reserve Banks 20 Treasury 5,533 9,796 5,112 5,413 9,668 5,972 5,107 5,038 4,297 5,112 21 Foreign 80 609 75 258 635 609 603 744 282 75 22 Service-related balances and adjustments .. 7,569 8,016 8,223 7,707r 8,139r 8,016 8,327 8,096 8,057 8,223 23 Other 276 191 271 288 237 283 259 256 251 271 24 Other Federal Reserve liabilities and capital . . 18,139 17,875 17,773 20,071 17,760 17,663 17,838 17,734 17,597 17,773 25 Reserve balances with Federal Reserve Banks5 9,321 16,829 22,923 4,374r 10,450r 6,237 15,819 21,872 10,685 22,923 1. Amounts of cash held as reserves are shown in table 1.12, line 2. 4. Cash value of agreements arranged through third-party custodial banks. These agree- 2. Includes securities loaned—fully guaranteed by U.S. government securities pledged ments are collateralized by U.S. government and federal agency securities. with Federal Reserve Banks—and excludes securities sold and scheduled to be bought back 5. Excludes required clearing balances and adjustments to compensate for float, under matched sale-purchase transactions. 3. Includes compensation that adjusts for the effects of inflation on the principal of inflation-indexed securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic NonfinancialS tatistics • January 2002 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 1998 1999 2000 2001 Dec. Dec. Dec.r Apr.1" May' June' July' Aug.' Sept.' Oct. 1 Reserve balances with Reserve Banks2 9,026 5,262 7,022 6,860 7,604 7,041 7,665 7,552 25,564 12,127 2 Total vault cash3 44,294 60,619 45,245 43,672 43,267 43,139 43,911 44,007 43,436 45,022 3 Applied vault cash4 36,183 36,392 31,451 31,729 31,771 31,174 31,619 32,051 31,940 32,477 4 Surplus vault cash5 8,111 24,227 13,794 11,943 11,497 11,966 12,291 11,956 11,496 12,546 5 Total reserves6 45,209 41,654 38,473 38,589 39,374 38,215 39,285 39,603 57,504 44,604 6 Required reserves 43,695 40,357 37,046 37,312 38,355 36,855 37,904 38,397 38,491 43,590 7 Excess reserve balances at Reserve Banks7 1,514 1,297 1,427 1,277 1,019 1,360 1,380 1,206 19,013 1,015 Total borrowing at Reserve Banks 117 320 210 51 213 229 283 183 3,385 127 9 Adjustment 101 179 99 15 134 110 109 19 3,292 60 10 Seasonal 15 67 111 35 79 120 174 164 93 67 11 Special Liquidity Facility8 0 74 0 12 Extended credit' 0 0 0 0 0 0 0 0 0 0 Biweekly averages of daily figures for two-week periods ending on dates indicated 2001 June 27' July 11' July 25' Aug. 8' Aug. 22' Sept. 5' Sept. 19' Oct. 3' Oct. 17 Oct. 31 1 Reserve balances with Reserve Banks2 7,257 7,346 7,927 7,642 7,029 8,287 44,460 9,368 13,635 11,212 2 Total vault cash3 43,820 44,214 43,328 44,716 44,326 42,883 42,992 44,254 45,739 44,471 3 Applied vault cash4 31,961 31,429 31,478 32,298 32,111 31,739 30,976 33,260 32,392 32,394 4 Surplus vault cash5 11,859 12,785 11,850 12,418 12,215 11,145 12,016 10,994 13,347 12,077 5 Total reserves6 39,218 38,775 39,405 39,940 39,140 40,026 75,436 42,628 46,027 43,606 6 Required reserves 37,797 37,241 38,043 38,799 38,088 38,523 37,301 39,992 45,187 42,763 7 Excess reserve balances at Reserve Banks7 1,421 1,534 1,361 1,141 1,052 1,502 38,134 2,635 839 842 8 Total borrowing at Reserve Banks 166 244 344 214 184 156 6,717 613 82 69 9 Adjustment 36 89 159 27 9 29 6,622 538 8 10 10 Seasonal 130 155 185 188 175 127 95 75 74 59 11 Special Liquidity Facility8 12 Extended credit 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 (line 3). 2. Excludes required clearing balances and adjustments to compensate for float and 7. Total reserves (line 5) less required reserves (line 6). includes other off-balance-sheet "as-of" adjustments. 8. Borrowing at the discount window under the terms and conditions established for the 3. Vault cash eligible to satisfy reserve requirements. It includes only vault cash held by Century Date Change Special Liquidity Facility in effect from October 1, 1999, through those banks and thrift institutions that are not exempt from reserve requirements. Dates refer April 7, 2000. to the maintenance periods in which the vault cash can be used to satisfy reserve require- 9. Consists of borrowing at the discount window under the terms and conditions estabments. lished for the extended credit program to help depository institutions deal with sustained 4. All vault cash held during the lagged computation period by "bound" institutions (that liquidity pressures. Because there is not the same need to repay such borrowing promptly as is, those whose required reserves exceed their vault cash) plus the amount of vault cash with traditional short-term adjustment credit, the money market effect of extended credit is applied during the maintenance period by "nonbound" institutions (that is, those whose vault similar to that of nonborrowed reserves. cash exceeds their required reserves) to satisfy current reserve requirements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A7 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit' Seasonal credit2 Extended credit 12/ O 14 n / 01 Effective date 12/ O 14 n / 01 Effective date 12/ O 14 n / 01 Effective date 12/11/01 12/11/01 12/11/01 12/13/01 12/13/01 12/13/01 12/11/01 12/12/01 12/13/01 12/13/01 12/13/01 12/11/01 Range of rates for adjustment credit in recent years4 Range (or F.R. Bank Range (or F.R. Bank Range(or F.R. Bank Effective date level)—All of Effective date level)—All of Effective date level)—All of F.R. Banks N.Y. F.R. Banks N.Y. F.R. Banks N.Y. In effect Dec. 31, 1981 12 12 1991—Sept. 13 5-5.5 5 2001—May 15 3.50-4.00 3.50 17 5 5 17 3.50 3.50 1982—luly 20 11.5-12 11.5 Nov. 6 4.5-5 4.5 June 27 3.25-3.50 3.25 23 11.5 11.5 7 4.5 4.5 29 3.25 3.25 Aug. 2 11-11.5 11 Dec. 20 3.5^1.5 3.5 Aug. 21 3.00-3.25 3.00 3 11 11 24 3.5 3.5 23 3.00 3.00 16 10.5 10.5 SSeepptt.. 1177 2.50-3.00 2.50 27 10-10.5 10 1992—July 2 3-3.5 3 1188 2.50 2.50 30 10 10 7 3 3 Oct. 2 2.00-2.50 2.00 Oct. 12 9.5-10 9.5 4 2.00 2.00 13 9.5 9.5 1994—May 17 3-3.5 3.5 Nov. 6 1.50-2.00 1.50 Nov. 22 9-9.5 9 18 3.5 3.5 8 1.50 1.50 26 9 9 Aug. 16 3.5-4 4 Dec. 11 1.25-1.50 1.25 Dec. 14 8.5-9 9 18 4 4 13 1.25 1.25 15 8.5-9 8.5 Nov. 15 4—4.75 4.75 17 8.5 8.5 17 4.75 4.75 In effect Dec. 14, 2001 1.25 1.25 1984—Apr. 9 8.5-9 9 1995—Feb. 1 4.75-5.25 5.25 13 9 9 9 5.25 5.25 Nov. 21 8.5-9 8.5 26 8.5 8.5 1996—Jan. 31 5.00-5.25 5.00 Dec. 24 8 8 Feb. 3 5.00 5.00 1985—May 20 7.5-8 7.5 1998—Oct. 15 4.75-5.00 4.75 24 7.5 7.5 16 4.75 4.75 Nov. 17 4.50-4.75 4.50 1986—Mar. 7 7-7.5 7 19 4.50 4.50 10 7 7 Apr. 21 6.5-7 6.5 1999—Aug. 24 4.50-4.75 4.75 23 6.5 6.5 26 4.75 4.75 July 11 6 6 Nov. 16 4.75-5.00 4.75 Aug. 21 5.5-6 5.5 18 5.00 5.00 22 5.5 5.5 2000—Feb. 2 5.00-5.25 5.25 1987—Sept. 4 5.5-6 6 4 5.25 5.25 11 6 6 Mar. 21 5.25-5.50 5.50 23 5.50 5.50 1988—Aug. 19 1 6-6.5 6.5 May 16 5.50-6.00 5.50 6.5 6.5 19 6.00 6.00 1989—Feb. 24 6.5-7 7 2001—Jan. 3 5.75-6.00 5.75 7 7 4 5.50-5.75 5.50 27 5 5.50 5.50 6.5 6.5 31 5.00-5.50 5.00 1990—Dec. 19 Feb. 1 5.00 5.00 6-6.5 6 Mar. 20 4.50-5.00 4.50 1991—Feb. 1 6 6 21 4.50 4.50 4 5.5-6 5.5 Apr. 18 4.00-4.50 4.00 Apr. 30 5.5 5.5 20 4.00 4.00 May 2 1. Available on a short-term basis to help depository institutions meet temporary needs for practices involve only a particular institution, or to meet the needs of institutions experiencing funds that cannot be met through reasonable alternative sources. The highest rate established difficulties adjusting to changing market conditions over a longer period (particularly at times for loans to depository institutions may be charged on adjustment credit loans of unusual size of deposit disintermediation). The discount rate applicable to adjustment credit ordinarily is that result from a major operating problem at the borrower's facility. charged on extended-credit loans outstanding less than thirty days; however, at the discretion 2. Available to help relatively small depository institutions meet regular seasonal needs for of the Federal Reserve Bank, this time period may be shortened. Beyond this initial period, a funds that arise from a clear pattern of intrayearly movements in their deposits and loans and flexible rate somewhat above rates charged on market sources of funds is charged. The rate that cannot be met through special industry lenders. The discount rate on seasonal credit takes ordinarily is reestablished on the first business day of each two-week reserve maintenance into account rates charged by market sources of funds and ordinarily is reestablished on the period, but it is never less than the discount rate applicable to adjustment credit plus 50 basis first business day of each two-week reserve maintenance period; however, it is never less than points. the discount rate applicable to adjustment credit. 4. For earlier data, see the following publications of the Board of Governors: Banking and 3. May be made available to depository institutions when similar assistance is not Monetary Statistics, 1914-1941, and 1941-1970; and the Annual Statistical Digest, 1970reasonably available from other sources, including special industry lenders. Such credit may 1979, and 1980-1989. See also the Board's Statistics: Releases and Historical Data web be provided when exceptional circumstances (including sustained deposit drains, impaired pages (http://www.federalreserve.gov/releases/H15/data.htm). access to money market funds, or sudden deterioration in loan repayment performance) or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Nonfinancial Statistics • January 2002 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Requirement Type of deposit Net transaction accounts2 1 SO million-$42.8 million3 12/30/99 2 More than $42.8 million4 . 12/30/99 3 Nonpersonal time deposits 12/27/90 4 Eurocurrency liabilities6 . 12/27/90 1. Required reserves must be held in the form of deposits with Federal Reserve Banks or succeeding calendar year by 80 percent of the percentage increase in the total reservable vault cash. Nonmember institutions may maintain reserve balances with a Federal Reserve liabilities of all depository institutions, measured on an annual basis as of June 30. No Bank indirectly, on a pass-through basis, with certain approved institutions. For previous corresponding adjustment is made in the event of a decrease. The exemption applies only to reserve requirements, see earlier editions of the Annual Report or the Federal Reserve accounts that would be subject to a 3 percent reserve requirement. Effective with the reserve Bulletin. Under the Monetary Control Act of 1980, depository institutions include commercial maintenance period beginning December 28, 2000, for depository institutions that report banks, savings banks, savings and loan associations, credit unions, agencies and branches of weekly, and with the period beginning January 18, 2001, for institutions that report quarterly, 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 requriement was reduced from 12 percent to 10 percent on Apr. 2, 1992, for to make withdrawals by negotiable or transferable instruments, payment orders of with- institutions that report weekly, and on Apr. 16, 1992, for institutions that report quarterly. drawal, or telephone or preauthorized transfers for the purpose of making payments to third 5. For institutions that report weekly, the reserve requirement on nonpersonal time deposits persons or others. However, accounts subject to the rules that permit no more than six with an original maturity of less than 1.5 years was reduced fom 3 percent to 1.5 percent for preauthorized, automatic, or other transfers per month (of which no more than three may be the maintenance period that began Dec. 13, 1990, and to zero for the maintenance period that by check, draft, debit card, or similar order payable directly to third parties) are savings began Dec. 27, 1990. For institutions that report quarterly, the reserve requirement on deposits, not transaction accounts. nonpersonal time deposits with an original maturity of less than 1.5 years was reduced from 3 3. The Monetary Control Act of 1980 requires that the amount of transaction accounts percent to zero on Jan. 17, 1991. against which the 3 percent reserve requirement applies be modified annually by 80 percent of The reserve requirement on nonpersonal time deposits with an original maturity of 1.5 the percentage change in transaction accounts held by all depository institutions, determined years or more has been zero since Oct. 6, 1983. as of June 30 of each year. Effective with the reserve maintenance period beginning 6. The reserve requirement on eurocurrency liabilities was reduced from 3 percent to zero December 28, 2000, for depository institutions that report weekly, and with the period in the same manner and on the same dates as the reserve requirement on nonpersonal time beginning January 18, 2001, for institutions that report quarterly, the amount was decreased deposits with an original maturity of less than 1.5 years (see note 5). from $44.3 million to $42.8 million. Under the Garn-St. Germain Depository Institutions Act of 1982, the Board adjusts the amount of reservable liabilities subject to a zero percent reserve requirement each year for the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 2001 TTyyppee ooff ttrraannssaaccttiioonn 11999988 11999999 22000000 aanndd mmaattuurriittyy Mar. Apr. May June July Aug. Sept. U.S. TREASURY SECURITIES2 Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 3,550 0 8,676 579 308 624 2,165 718 2,899 334488 2 Gross sales 0 0 0 0 0 0 0 0 0 0 Exchanges 450,835 464,218 477,904 46,712 38,317 47,112 40,363 42,001 55,231 42,268 4 For new bills 450,835 464,218 477,904 46,712 38,317 47,112 40,363 42,001 55,231 42,268 5 Redemptions 2,000 0 24,522 211 3,537 3,939 0 0 0 1,543 Others within one year Gross purchases 6,297 11,895 8,809 67 3,027 2,174 1,410 235 1,385 0 7 Gross sales 0 0 0 0 0 0 0 0 0 0 8 Maturity shifts 46,062 50,590 62,025 0 12,204 8,117 0 7,088 9,379 0 9 Exchanges -49,434 -53,315 -54,656 0 -7,000 -8,965 0 -7,667 -6,873 0 10 Redemptions 2,676 1,429 3,779 0 4,368 2,287 0 4,668 1,055 0 One to five years 11 Gross purchases 12,901 19,731 14,482 1,883 4,480 2,685 1,428 4,193 810 851 12 Gross sales 0 0 0 0 0 0 0 0 0 0 13 Maturity shifts -37,777 -44,032 -52,068 0 -12,204 -1,913 0 1,838 -9,379 0 14 Exchanges 37,154 42,604 46,177 0 7,000 6,508 0 7,667 5,290 0 Five to ten years 15 Gross purchases 2,294 4,303 5,871 0 1,390 657 0 756 935 00 If, Gross sales 0 0 0 0 0 0 0 0 0 0 17 Maturity shifts -5,908 -5,841 -6,801 0 0 -5,130 0 -8,926 1,043 0 18 Exchanges 7,439 7,583 6,585 0 0 2,457 0 0 1,043 0 More than ten years 19 Gross purchases 4,884 9,428 5,833 1,000 913 1,241 1,419 815 720 0 20 Gross sales 0 0 0 0 0 0 0 0 0 0 21 Maturity shifts -2,377 -717 -3,155 0 0 -1,074 0 0 -1,043 0 22 Exchanges 4,842 3,139 1,894 0 0 0 0 0 540 0 All maturities 23 Gross purchases 29,926 45,357 43,670 3,529 10,118 7,380 6,422 6,716 6,749 1,199 24 Gross sales 0 0 0 0 0 0 0 0 0 0 25 Redemptions 4,676 1,429 28,301 211 7,905 6,226 0 4,668 1,055 1,543 Matched transactions 2.6 Gross purchases 4,430,457 4,413,430 4,399,257 396,029 381,667 398,039 367,462 392,721 406,143 508,129 27 Gross sales 4,434,358 4,431,685 4,381,188 395,151 381,895 397,600 366,411 394,381 405,627 515,429 Repurchase agreements 28 Gross purchases 512,671 281,599 0 0 00 00 00 00 00 00 29 Gross sales 514,186 301,273 0 0 0 0 0 0 0 0 30 Net change in U.S. Treasury securities 19,835 5,999 33,439 4,196 1,984 1,592 7,472 388 6,211 -7,645 FEDERAL AGENCY OBLIGATIONS Outright transactions 31 Gross purchases 0 0 0 0 0 0 0 00 00 00 32 Gross sales 25 0 0 0 0 0 0 0 0 0 33 Redemptions 322 157 51 0 0 0 0 0 0 0 Repurchase agreements 34 Gross purchases 284,316 360,069 0 0 00 0 0 00 00 00 35 Gross sales 276,266 370,772 0 0 0 0 0 0 0 0 36 Net change in federal agency obligations 7,703 -10,859 -51 0 0 0 0 0 0 0 Reverse repurchase agreements 37 Gross purchases 0 0 00 00 00 00 00 00 00 00 38 Gross sales 0 0 0 0 0 0 0 0 0 0 Repurchase agreements 39 Gross purchases 0 304,989 890,236 86,472 85,166 120,135 65,005 106,355 103,255 406,930 40 Gross sales 0 164,349 987,501 88,142 82,154 114,832 72,065 103,255 99,850 388,805 41 Net change in triparty obligations 0 140,640 -97,265 -1,670 3,012 5,303 -7,060 3,100 3,405 18,125 42 Total net change in System Open Market Account .. 27,538 135,780 -63,877 2,526 4,996 6,895 412 3,488 9,616 10,480 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 Account; all other figures increase such holdings. principal of inflation-indexed securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Nonfinancial Statistics • January 2002 1.18 FEDERAL RESERVE BANKS Condition and Federal Note Statements1 Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 2001 2001 Oct. 3 Oct. 10 Oct. 17 Oct. 24 Oct. 31 Aug. Sept. Oct. Consolidated condition statement ASSETS 1 Gold certificate account 11,045 11,045 11,045 11,045 11,045 11,044 11,045 11,045 2 Special drawing rights certificate account 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 3 Coin 1,122 1,110 1,105 1,113 1,123 1,096 1,141 1,123 Loans 4 To depository institutions 85 121 65 102 55 123 88 55 5 Other 0 0 0 0 0 0 0 0 6 Acceptances held under repurchase agreements 0 0 0 0 0 0 0 0 Triparty obligations 7 Repurchase agreements—triparty2 32,755 33,505 37,045 30,050 45,050 29,755 47,880 45,050 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 537,834 540,111 544,024 544,190 544,287 541,807 534,136 544,287 11 Bought outright4 537,834 540,111 544,024 544,190 544,287 541,807 534,136 544,287 12 Bills 179,276 181,553 183,373 183,033 182,652 183,600 175,104 182,652 13 Notes 256,557 256,557 258,389 258,389 258,389 256,196 257,030 258,389 14 Bonds 102,001 102,001 102,261 102,768 103,246 102,012 102,002 103,246 15 Held under repurchase agreements 0 0 0 0 0 0 0 0 16 Total loans and securities 570,684 573,747 581,144 574,352 589,403 571,694 582,114 589,403 17 Items in process of collection 10,074 16,088 8,097 7,709 7,676 5,821 5,089 7,676 18 Bank premises 1,509 1,510 1,511 1,514 1,513 1,510 1,508 1,513 Other assets 19 Denominated in foreign currencies5 15,341 15,311 15,233 15,009 15,090 15,365 15,366 15,090 20 All other6 20,492 20,935 21,278 21,751 21,633 19,203 20,947 21,633 21 Total assets 632,467 641,946 641,612 634,694 649,682 627,932 639,410 649,682 LIABILITIES 22 Federal Reserve notes 583,780 586,533 584,736 583,933 585,342 581,820 580,619 585,342 23 Reverse repurchase agreements—triparty2 0 0 0 0 0 0 0 0 24 Total deposits 22,242 26,413 31,333 25,958 38,735 22,808 35,532 38,735 25 Depository institutions 15,378 20,445 25,295 21,128 33,278 16,918 24,937 33,278 26 U.S. Treasury—General account 5,972 5,107 5,038 4,297 5,112 5,533 9,796 5,112 27 Foreign—Official accounts 609 603 744 282 75 80 609 75 28 Other 283 259 256 251 271 276 191 271 29 Deferred credit items 8,782 11,162 7,810 7,205 7,833 5,166 5,384 7,833 30 Other liabilities and accrued dividends7 2,926 2,916 2,847 2,827 2,773 3,137 2,971 2,773 31 Total liabilities 617,730 627,024 626,725 619,923 634,683 612,931 624,506 634,683 CAPITAL ACCOUNTS 32 Capital paid in 7,266 7,268 7,271 7,275 7,269 7,191 7,266 7,269 33 Surplus 6,745 6,741 6,744 6,735 6,738 6,747 6,741 6,738 34 Other capital accounts 725 913 872 760 993 1,063 896 993 35 Total liabilities and capital accounts 632,467 641,946 641,612 634,694 649,682 627,932 639,410 649,682 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) 742,915 743,447 743,345 742,877 741,957 739,560 742,539 741,957 38 LESS: Held by Federal Reserve Banks 159,136 156,915 158,610 158,944 156,615 157,740 161,920 156,615 39 Federal Reserve notes, net 583,780 586,533 584,736 583,933 585,342 581,820 580,619 585,342 Collateral held against notes, net 40 Gold certificate account 11,045 11,045 11,045 11,045 11,045 11,044 11,045 11,045 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 0 0 0 0 0 0 0 43 U.S. Treasury and agency securities 570,535 573,288 571,491 570,689 572,097 568,576 567,374 572,097 44 Total collateral 583,780 586,533 584,736 583,933 585,342 581,820 580,619 585,342 1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly statistical 5. Valued monthly at market exchange rates. release. For ordering address, see inside front cover. 6. Includes special investment account at the Federal Reserve Bank of Chicago in Treasury 2. Cash value of agreements arranged through third-party custodial banks. bills maturing within ninety days. 3. Face value of the securities. 7. Includes exchange-translation account reflecting the monthly revaluation at market 4. Includes securities loaned—fully guaranteed by U.S. Treasury securities pledged with exchange rates of foreign exchange commitments. Federal Reserve Banks—and includes compensation that adjusts for the effects of inflation on the principal of inflation-indexed securities. Excludes securities sold and scheduled to be bought back under matched sale-purchase transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Banks All 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holding Millions of dollars Wednesday End of month TTTyyypppeee ooofff hhhooollldddiiinnnggg aaannnddd mmmaaatttuuurrriiitttyyy 2001 2001 Oct. 3 Oct. 10 Oct. 17 Oct. 24 Oct. 31 Aug. Sept. Oct. 1 Total loans 85 121 65 102 55 123 88 55 2 Within fifteen days1 15 54 61 98 44 106 69 44 3 Sixteen days to ninety days 70 67 4 4 11 17 19 11 4 91 days to 1 year 0 0 0 0 0 0 0 0 5 Total U.S. Treasury securities2 537,834 540,111 544,024 544,190 544,287 541,807 534,137 544,287 6 Within fifteen days' 15,876 13,296 22,407 22,095 19,638 3,906 10,737 19,638 7 Sixteen days to ninety days 116,513 122,288 115,828 116,721 113,438 125,620 117,454 113,438 8 Ninety-one days to one year 129,490 128,573 130,569 129,647 134,127 136,653 129,491 134,127 9 One year to five years 141,805 141,805 146,198 146,198 147,078 141,453 142,304 147,078 10 Five years to ten years 55,570 55,570 50,204 50,204 50,204 55,584 55,571 50,204 11 More than ten years 78,579 78,579 78,817 79,324 79,802 78,590 78,581 79,802 12 Total federal agency obligations 10 10 10 10 10 10 10 10 13 Within fifteen days1 0 0 0 0 0 0 0 0 14 Sixteen days to ninety days 0 0 0 0 0 0 0 0 15 Ninety-one days to one year 0 0 0 0 0 0 0 0 16 One year to five years 10 10 10 10 10 10 10 10 17 Five years to ten years 0 0 0 0 0 0 0 0 18 More than ten years 0 0 0 0 0 0 0 0 1. Holdings under repurchase agreements are classified as maturing within fifteen days in 2. Includes compensation that adjusts for the effects of inflation on the principal of accordance with maximum maturity of the agreements. inflation-indexed securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic NonfinancialS tatistics • January 2002 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 2001 1997 1998 1999 2000 IItteemm Dec. Dec. Dec. Dec.r Mar.' Apr. Mayr June' July' Aug.' Sept.' Oct. Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS2 1 Total reserves3 46.85 45.18 41.78 38.44 38.27 38.79 38.88 38.76 39.59 39.88 57.82 45.01 2 Nonborrowed reserves4 46.52 45.07 41.46 38.23 38.21 38.74 38.67 38.53 39.31 39.69 54.44 44.88 3 Nonborrowed reserves plus extended credit5 46.52 45.07 41.46 38.23 38.21 38.74 38.67 38.53 39.31 39.69 54.44 44.88 4 Required reserves 45.16 43.67 40.48 37.01 36.87 37.51 37.86 37.40 38.21 38.67 38.81 43.99 5 Monetary base6 479.47 513.49 593.09 583.82 592.42 595.93 599.08 601.87 607.67 615.48 639.71 629.51 Not seasonally adjusted 6 Total reserves7 48.01 45.31 41.89 38.53 37.77 38.65' 39.46 38.31 39.40 39.73 57.66 44.79 7 Nonborrowed reserves 47.69 45.19 41.57 38.32 37.71 38.60' 39.24 38.08 39.12 39.55 54.28 44.66 8 Nonborrowed reserves plus extended credit5 47.69 45.19 41.57 38.32 37.71 38.60' 39.24 38.08 39.12 39.55 54.28 44.66 9 Required reserves8 46.33 43.80 40.59 37.10 36.37 37.38 38.44 36.95 38.02 38.53 38.65 43.77 10 Monetary base9 484.98 518.27 600.72 590.06 591.37 594.92 598.57 601.67 608.22 614.51 637.94 627.86 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS'" 11 Total reserves" 47.92 45.21 41.65 38.47 37.72 38.59 39.37 38.22 39.29 39.60 57.50 44.60 12 Nonborrowed reserves 47.60 45.09 41.33 38.26 37.67 38.54 39.16 37.99 39.00 39.42 54.12 44.48 13 Nonborrowed reserves plus extended credit5 47.60 45.09 41.33 38.26 37.67 38.54 39.16 37.99 39.00 39.42 54.12 44.48 14 Required reserves 46.24 43.70 40.36 37.05 36.32 37.31 38.36 36.86 37.90 38.40 38.49 43.59 15 Monetary base12 491.79 525.06 608.02 596.98 598.20 601.84 605.48 608.81 615.55 621.99 645.68 635.96 16 Excess reserves13 1.69 1.51 1.30 1.43 1.40 1.28 1.02 1.36 1.38 1.21 19.01 1.02 17 Borrowings from the Federal Reserve .32 .12 .32 .21 .06 .05 .21 .23 .28 .18 3.39 .13 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 adjusted required reserves include required reserves against transactions deposits and nonper- Reserve 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 Dec. Dec. Dec.' Dec.' July' Aug.' Sept.' Oct. Seasonally adjusted Measures2 1 Ml 1,073.4 1,097.0 1,124.8 1,088.1 1,136.0 1,144.1 1,199.5 1,158.2 2 M2 4,030.0r 4,384.1' 4,651.8 4,937.4 5,225.5 5,261.2 5,378.4 5,371.7 3 M3 5,432.3r 6,029.7' 6,531.0 7,114.3 7,674.5 7,679.9 7,839.7 7,908.9 4 Debt 15,227.9' 16,279.9' 17,363.5 18,282.5 18,841.6 18,947.3 19,073.2 n.a. Ml components 5 Currency3 424.3 459.2 516.7 529.9 553.8 562.6 568.0 571.5 6 Travelers checks4 8.1 8.2 8.2 8.0 8.6 8.8 8.4 8.1 7 Demand deposits5 395.4 379.4 356.2 311.2 313.4 315.2 365.6 327.4 8 Other checkable deposits6 245.7 250.1 243.6 239.0 260.2 257.4 257.4 251.2 Nontransaction components 9 In M27 2,956.6' 3,287.1' 3,527.0 3,849.3 4,089.4 4,117.1 4,178.9 4,213.5 10 In M3 only8 l,402.3r 1,645.6' 1,879.2 2,176.9 2,449.0 2,418.7 2,461.3 2,537.2 Commercial banks 11 Savings deposits, including MMDAs 1,021.1 1,185.8 1,287.2 1,422.2 1,581.2 1,613.5 1,657.7 1,674.8 12 Small time deposits9 625.5 626.4 635.5 699.8 672.9 668.7 663.9 657.7 13 Large time deposits1011 517.3' 575.1' 648.4 726.3 706.1 694.7 698.6 712.4 Thrift institutions 14 Savings deposits, including MMDAs 376.8 414.1 449.0 451.6 508.0 518.3 528.2 542.9 15 Small time deposits9 342.9 325.8 320.6 344.8 350.3 347.4 346.1 341.8 16 Large time deposits10 85.5 88.7 91.3 103.1 111.8 114.7 116.0 116.1 Money market mutual funds 17 Retail 590.2r 735.1' 834.7 930.9 977.0 969.2 983.0 996.3 18 Institution-only 395.2' 535.5' 628.1 783.1 1,036.8 1,019.4 1,064.4 1,132.2 Repurchase agreements and eurodollars 19 Repurchase agreements12 254.3 294.5 338.2 367.3 374.2 370.6 358.0 354.7 20 Eurodollars12 150.0 151.8 173.3 197.1 220.2 219.3 224.2 221.9 Debt components 21 Federal debt 3,800.4 3,751.1 3,660.1 3,400.4 3,317.9 3,339.0 3,373.2 n.a. 22 Nonfederal debt 11,427.5' 12,528.9' 13,703.4 14,882.1 15,523.7 15,608.2 15,700.1 n.a. Not seasonally adjusted Measures2 23 Ml 1,096.9 1,120.4 1,148.3 1,112.3 1,135.9 1,141.3 1,194.3 1,155.5 24 M2 4,051.4' 4,406.4' 4,675.9 4,966.0 5,199.7 5,240.8 5,363.0 5,343.7 25 M3 5,457.7' 6,061.9' 6,568.6 7,159.7 7,616.1 7,637.8 7,791.7 7,855.9 26 Debt 15,222.4' 16,267.5' 17,355.0 18,273.5 18,753.7 18,862.7 18,990.2 n.a. Ml components 27 Currency3 428.1 463.3 521.5 535.2 554.5 561.9 566.3 569.9 28 Travelers checks4 8.3 8.4 8.4 8.1 8.2 8.4 8.3 8.1 29 Demand deposits5 412.4 395.9 371.8 326.5 314.7 315.5 364.6 327.5 30 Other checkable deposits6 248.2 252.8 246.6 242.5 258.5 255.5 255.2 249.9 Nontransaction components 31 In M27 2,954.5' 3,286.0' 3,527.6 3,853.7 4,063.8 4,099.5 4,168.8 4,188.2 32 In M3 only8 1,406.3' 1,655.5' 1,892.8 2,193.7 2,416.4 2,397.0 2,428.6 2,512.2 Commercial banks 33 Savings deposits, including MMDAs 1,020.4 1,186.0 1,288.8 1,426.9 1,579.7 1,607.4 1,655.7 1,662.4 34 Small time deposits9 625.3 626.5 635.7 700.0 671.2 667.9 664.1 658.7 35 Large time deposits10 " 516.7r 574.5 647.7 725.6 704.3 690.7 693.9 708.5 Thrift institutions 36 Savings deposits, including MMDAs 376.5 414.2 449.6 453.1 507.6 516.3 527.5 538.8 37 Small time deposits9 342.8 325.8 320.7 345.0 349.4 347.0 346.2 342.3 38 Large time deposits10 85.4 88.6 91.2 103.0 111.5 114.0 115.2 115.5 Money market mutual funds 39 Retail 589.5' 733.5' 832.8 928.7 955.9 960.8 975.2 986.0 40 Institution-only 402.3' 547.5' 643.2 801.4 1,008.9 1,005.2 1,042.4 1,117.8 Repurchase agreements and eurodollars 41 Repurchase agreements12 249.5 290.4 334.7 364.2 374.1 370.1 355.3 349.9 42 Eurodollars12 152.3 154.5 176.0 199.5 217.6 217.0 221.8 220.5 Debt components 43 Federal debt 3,805.8 3,754.9 3,663.2 3,403.5 3,247.7 3,281.0 3,319.1 n.a. 44 Nonfederal debt 11,416.6' 12,512.5' 13,691.8 14,870.0 15,506.0 15,581.7 15,671.1 n.a. Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 DomesticN onfinancial Statistics • January 2002 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 noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and Reserve System, Washington, DC 20551. corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data, 2. Composition of the money stock measures and debt is as follows: which are derived from the Federal Reserve Board's flow of funds accounts, are break- Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of adjusted (that is, discontinuities in the data have been smoothed into the series) and depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all month-averaged (that is, the data have been derived by averaging adjacent month-end levels). commercial banks other than those owed to depository institutions, the U.S. government, and 3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of depository foreign banks and official institutions, less cash items in the process of collection and Federal institutions. Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of 4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers. withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, Travelers checks issued by depository institutions are included in demand deposits. credit union share draft accounts, and demand deposits at thrift institutions. Seasonally 5. Demand deposits at commercial banks and foreign-related institutions other than those adjusted Ml is computed by summing currency, travelers checks, demand deposits, and owed to depository institutions, the U.S. government, and foreign banks and official institu- OCDs, each seasonally adjusted separately. tions, less cash items in the process of collection and Federal Reserve float. M2: Ml plus (1) savings deposits (including MMDAs), (2) small-denomination time 6. Consists of NOW and ATS account balances at all depository institutions, credit union deposits (time deposits—including retail RPs—in amounts of less than $100,000), and (3) share draft account balances, and demand deposits at thrift institutions. balances in retail money market mutual funds. Excludes individual retirement accounts 7. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail (IRAs) and Keogh balances at depository institutions and money market funds. Seasonally money fund balances. adjusted M2 is calculated by summing savings deposits, small-denomination time deposits, 8. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities and retail money fund balances, each seasonally adjusted separately, and adding this result to (overnight and term) issued by depository institutions, and (4) eurodollars (overnight and seasonally adjusted M1. term) of U.S. addressees. M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more) 9. Small time deposits—including retail RPs—are those issued in amounts of less than issued by all depository institutions, (2) balances in institutional money funds, (3) RP $100,000. All IRAs and Keogh accounts at commercial banks and thrift institutions are liabilities (overnight and term) issued by all depository institutions, and (4) eurodollars subtracted from small time deposits. (overnight and term) held by U.S. residents at foreign branches of U.S. banks wolrdwide 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 2001 2001 Oct. Apr.' May' June' July' Aug.' Sept.' Oct. Oct. 10 Oct. 17 Oct. 24 Oct. 31 Seasonally adjusted Assets 1 Bank credit 5,143.7' 5,314.7 5,323.7 5,320.3 5,318.2 5,332.0 5,400.0 5,373.3 5,372.4 5,364.0 5,360.5 5,408.4 2 Securities in bank credit 1,314.1' 1,360.4 1,368.0 1,377.7 1,382.8 1,416.8 1,435.8 1,456.8 1,447.4 1,443.2 1,449.5 1,488.0 U.S. government securities 793.2r 762.7 766.7 766.1 773.5 786.7 797.1 813.5 810.0 802.6 807.4 835.8 4 Other securities 520.8' 597.7 601.3 611.7 609.3 630.1 638.7 643.2 637.4 640.7 642.1 652.3 5 Loans and leases in bank credit2 .... 3,829.7' 3,954.2 3,955.8 3,942.5 3,935.4 3,915.2 3,964.2 3,916.5 3,925.0 3,920.7 3,911.0 3,920.4 6 Commercial and industrial 1,080.5 1,098.6 1,095.7 1,078.8 1,068.4 1,061.4 1,064.6 1,048.3 1,052.4 1,050.5 1,045.7 1,042.5 7 Real estate 1,639.9 1,691.8 1,702.9 1,706.2 1,714.6 1,709.6 1,715.4 1,727.6 1,730.3 1,728.2 1,724.7 1,734.0 8 Revolving home equity 125.0 133.9 135.2 136.3 137.6 139.4 141.9 145.4 144.6 145.3 146.1 146.8 9 Other 1,514.9 1,557.8 1,567.6 1,569.8 1,577.0 1,570.3 1,573.6 1.582.2 1,585.7 1,582.9 1,578.6 1,587.3 10 Consumer 530.0 548.4 552.6 551.0 548.5 546.0 545.9 548.8 544.7 549.9 550.9 550.6 11 Security3 163.9 179.6 168.1 172.0 169.9 170.2 179.9 148.3 152.4 146.8 145.8 147.0 12 Other loans and leases 415.4' 435.9 436.5 434.6 434.0 427.9 458.3 443.5 445.2 445.4 443.8 446.2 13 Interbank loans 246.4' 289.9 283.3 268.1 272.8 288.0 356.4 316.6 312.5 324.6 320.6 311.0 14 Cash assets4 285.7 288.3 282.0 275.2 288.1 282.5 326.7 297.8 318.1 272.9 290.6 308.1 15 Other assets5 396.0' 423.6 416.6 408.9 419.1 428.8 464.8 483.5 476.3 477.5 494.8 481.4 16 Total assets6 6,009.5r 6,250.8 6,239.9 6,206.6 6,232.0 6,264.6 6,481.1 6,402.7 6,411.0 6,370.1 6,397.7 6,440.6 Liabilities 17 Deposits 3,788.8 3,992.6 4,007.3 4,041.3 4,065.3 4,073.4 4,195.3 4,146.2 4,162.4 4,125.2 4,137.8 4,159.0 18 Transaction 611.1 609.0 612.7 600.7 605.6 610.6 688.7 637.1 632.7 613.6 653.7 657.1 19 Nontransaction 3,177.7 3,383.7 3,394.6 3,440.6 3,459.1 3,462.9 3,506.7 3,509.1 3,529.7 3,511.6 3,484.1 3,501.9 20 Large time 916.2 951.3 966.1 979.1 972.8 960.0 956.5 966.1 969.8 967.9 962.3 964.1 21 Other 2,261.5 2,432.3 2,428.5 2,461.5 2,486.9 2,502.8 2,550.2 2,542.9 2,559.9 2,543.7 2,521.8 2,537.8 22 Borrowings 1,194.8' 1,269.1 1,237.0 1,203.7 1,214.3 1,222.6 1,273.7 1,248.6 1,240.3 1,245.4 1,244.1 1,266.7 23 From banks in the U.S 372.2 404.8 383.7 381.6 389.3 396.9 441.7 419.5 417.1 425.9 414.4 421.6 24 From others 822.6' 864.3 853.3 822.2 824.9 825.7 832.0 829.1 823.2 819.5 829.7 845.1 25 Net due to related foreign offices 252.5 190.0 207.4 184.5 190.9 194.0 169.8 174.2 172.8 174.0 172.3 185.8 26 Other liabilities 359.7' 363.5 352.8 364.6 343.5 353.7 405.2 378.3 379.4 368.4 379.7 375.6 27 Total liabilities 5,595.8r 5,815.2 5,804.6 5,794.1 5,814.1 5,843.7 6,044.0 5,947.2 5,954.8 5,912.9 5,933.9 5,987.0 28 Residual (assets less liabilities)7 413.8' 435.6 435.3 412.5 417.9 420.8 437.1 455.4 456.1 457.2 463.8 453.6 Not seasonally adjusted Assets 29 Bank credit 5,151.1' 5,307.1 5,313.0 5,313.1 5,297.5 5,314.6 5,394.3 5,381.1 5,370.5 5,374.4 5,362.9 5,430.6 30 Securities in bank credit 1,310.9' 1,362.0 1,367.2 1,377.1 1,373.8 1,409.9 1,432.0 1,454.5 1,443.7 1,439.1 1,446.1 1,490.8 31 U.S. government securities 788.2r 767.5 767.5 766.4 769.4 782.0 794.1 808.6 803.9 796.5 801.3 834.3 32 Other securities 522.7' 594.5 599.7 610.6 604.3 627.9 638.0 645.9 639.8 642.6 644.9 656.5 33 Loans and leases in bank credit2 .... 3,840.2' 3,945.0 3,945.8 3,936.0 3,923.8 3,904.7 3,962.3 3,926.5 3,926.7 3,935.4 3,916.7 3,939.8 34 Commercial and industrial 1,080.1 1,103.3 1,097.9 1,081.0 1,067.6 1,055.3 1,061.4 1,047.8 1,050.4 1,050.3 1,043.3 1,044.3 35 Real estate 1,643.2 1,687.4 1,703.2 1,705.5 1,713.6 1,712.8 1,719.0 1,731.3 1,734.0 1,732.5 1,727.3 1,738.4 36 Revolving home equity 126.0 133.0 135.3 136.5 138.0 140.2 143.2 146.6 145.7 146.6 147.3 147.9 37 Other 1,517.2 1,554.4 1,568.0 1,569.0 1,575.6 1,572.6 1,575.8 1,584.7 1,588.3 1,585.9 1,580.1 1,590.5 38 Consumer 529.7 545.3 550.4 548.3 546.0 547.1 548.2 548.5 543.3 549.6 551.4 551.0 39 Credit cards and related plans . . 204.8 213.9 218.8 216.9 215.9 216.5 215.3 216.4 210.8 217.5 219.2 219.4 40 Other 324.9 331.4 331.7 331.5 330.1 330.6 332.9 332.1 332.5 332.0 332.2 331.7 41 Security3 171.0 175.2 162.1 167.4 162.2 161.8 173.8 154.6 153.5 155.2 153.7 157.9 4? Other loans and leases 416.1' 433.9 432.1 433.7 434.4 427.9 460.0 444.3 445.5 447.9 441.0 448.1 43 Interbank loans 241.9' 296.0 276.7 265.9 265.1 276.6 344.5 310.1 304.4 318.2 303.8 315.3 44 Cash assets4 286.5 283.5 279.8 271.4 279.1 270.7 322.1 298.2 320.9 288.1 272.3 313.1 45 Other assets5 392.5r 423.5 417.0 409.8 417.6 425.9 464.8 479.1 473.9 472.9 482.4 479.9 46 Total assets6 6,010.0r 6,244.6 6,220.5 6,194.1 6,193.2 6,221.1 6,458.6 6,400.2 6,401.5 6,385.2 6,352.9 6,470.7 Liabilities 47 Deposits 3,777.3 4,011.9 3,995.3 4,022.3 4,033.7 4,032.9 4,169.9 4,133.7 4,160.6 4,125.9 4,089.0 4,156.7 48 Transaction 605.1 615.2 603.0 600.3 599.3 596.7 682.6 631.3 630.2 621.0 621.3 658.0 49 Nontransaction 3,172.2 3,396.7 3,392.3 3,422.1 3,434.4 3,436.2 3,487.4 3,502.5 3,530.4 3,504.9 3,467.6 3,498.8 50 Large time 911.2 952.6 964.8 969.5 959.0 946.6 945.2 960.1 961.7 958.4 958.5 962.8 51 Other 2,261.0 2,444.1 2,427.5 2,452.5 2,475.4 2,489.6 2,542.2 2,542.3 2,568.7 2,546.4 2,509.1 2,536.0 52 Borrowings 1,192.9' 1,269.8 1,242.1 1,204.6 1,205.1 1,201.1 1,268.4 1,246.2 1,233.4 1,244.8 1,237.4 1,271.8 53 From banks in the U.S 367.6 408.0 386.8 382.4 386.1 388.6 431.9 414.3 410.8 421.2 407.7 419.7 54 From others 825.3' 861.8 855.2 822.2 819.0 812.4 836.5 831.9 822.6 823.6 829.7 852.1 55 Net due to related foreign offices 252.9 183.0 206.6 180.7 184.6 193.2 171.6 174.8 169.7 174.6 172.2 191.5 56 Other liabilities 359.9' 358.4 353.6 362.5 339.0 353.5 405.6 378.4 375.0 367.4 381.6 380.5 57 Total liabilities 5,583.0r 5,823.1 5,797.6 5,770.1 5,762.3 5,780.7 6,015.6 5,933.1 5,938.7 5,912.7 5,880.3 6,000.6 58 Residual (assets less liabilities)7 427.0' 421.5 422.9 424.0 430.9 440.3 443.0 467.1 462.8 472.5 472.7 470.1 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • January 2002 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 2001 2001 Oct.' Apr/ May' June' July' Aug.' Sept/ Oct. Oct. 10 Oct. 17 Oct. 24 Oct. 31 Seasonally adjusted Assets 1 Bank credit 4,556.9 4,688.0 4,712.3 4,717.4 4,725.7 4,739.8 4,813.1 4,797.4 4,799.2 4,794.2 4,788.1 4,820.2 2 Securities in bank credit 1,112.0 1,139.5 1,153.4 1,161.7 1,166.3 1,197.2 1,215.3 1,237.9 1,231.0 1,228.9 1,231.3 1,263.2 3 U.S. government securities 723.6 688.3 697.0 698.0 706.4 719.9 727.3 741.4 740.8 732.9 734.5 759.0 4 Other securities 388.5 451.2 456.4 463.7 459.9 477.3 488.0 496.5 490.2 495.9 496.8 504.2 5 Loans and leases in bank credit2 .... 3,444.9 3,548.6 3,558.9 3,555.7 3,559.4 3,542.6 3,597.8 3,559.5 3,568.3 3,565.4 3,556.9 3,557.0 6 Commercial and industrial 877.0 879.8 877.8 868.0 862.6 856.9 860.1 846.4 851.4 848.7 844.1 839.1 7 Real estate 1,621.8 1,673.8 1,684.7 1,688.1 1,696.3 1,690.9 1,696.2 1,708.2 1,711.0 1,708.8 1,705.2 1,714.3 8 Revolving home equity 125.0 133.9 135.2 136.3 137.6 139.4 141.9 145.4 144.6 145.3 146.1 146.8 9 Other 1,496.8 1,539.9 1,549.4 1,551.7 1,558.7 1,551.6 1,554.3 1,562.7 1,566.4 1,563.5 1,559.0 1,567.6 10 Consumer 530.0 548.4 552.6 551.0 548.5 546.0 545.9 548.8 544.7 549.9 550.9 550.6 11 Security3 67.7 78.8 75.2 80.8 83.5 86.4 102.4 77.2 81.4 77.0 77.2 71.5 12 Other loans and leases 348.4 367.8 368.6 367.7 368.6 362.2 393.2 378.9 379.7 381.0 379.5 381.4 13 Interbank loans 219.1 262.2 253.7 246.2 251.5 267.6 330.3 292.4 289.6 293.8 298.3 288.8 14 Cash assets4 243.8 249.6 244.7 238.9 251.3 245.2 281.5 258.7 279.1 231.6 252.4 270.6 15 Other assets5 359.3 384.0 379.4 371.8 387.4 399.6 433.3 453.0 445.3 448.8 463.6 451.9 16 Total assets6 5,317.3 5,518.4 5,524.6 5,508.8 5,550.1 5,585.9 5,791.6 5,733.3 5,745.2 5,699.9 5,733.9 5,763.4 Liabilities 17 Deposits 3,405.1 3,598.3 3,598.8 3,622.6 3,652.9 3,670.2 3,792.1 3,732.5 3,750.7 3,707.5 3,724.2 3,744.9 18 Transaction 600.4 598.2 602.2 591.2 596.4 600.7 675.8 625.6 621.3 601.8 642.0 645.3 19 Nontransaction 2,804.7 3,000.1 2,996.7 3,031.4 3,056.5 3,069.5 3,116.4 3,106.9 3,129.4 3,105.7 3,082.2 3,099.5 20 Large time 545.4 570.0 570.4 572.2 572.0 569.0 568.5 566.3 571.9 564.3 562.8 564.1 21 Other 2,259.3 2,430.0 2,426.2 2,459.2 2,484.5 2,500.5 2,547.9 2,540.6 2,557.6 2,541.4 2,519.4 2,535.4 22 Borrowings 974.1 1,028.8 1,018.0 988.0 1,003.6 1,012.3 1,052.6 1,044.4 1,039.4 1,045.6 1,045.9 1,051.1 23 From banks in the U.S 353.2 379.5 363.4 359.1 367.0 376.0 410.7 395.8 395.3 401.0 393.8 396.5 24 From others 621.0 649.4 654.6 628.9 636.5 636.3 641.9 648.6 644.0 644.6 652.2 654.7 25 Net due to related foreign offices 236.1 185.5 211.8 204.1 207.1 205.7 188.1 192.9 193.8 187.0 186.8 208.0 26 Other liabilities 283.6 274.7 266.7 280.1 264.0 275.1 324.5 302.0 302.5 294.8 302.9 299.8 27 Total liabilities 4,898.9 5,087.3 5,095.3 5,094.8 5,127.5 5,163.2 5,357.3 5,271.8 5,286.4 5,234.9 5,259.7 5,303.8 28 Residual (assets less liabilities)7 418.4 431.1 429.3 414.0 422.5 422.6 434.3 461.5 458.7 465.0 474.2 459.6 Not seasonally adjusted Assets 29 Bank credit 4,560.3 4,683.3 4,706.3 4,713.9 4,709.6 4,728.8 4,809.1 4,802.3 4,797.8 4,801.2 4,788.0 4,835.7 30 Securities in bank credit 1,108.9 1,141.1 1,152.6 1,161.0 1,157.3 1,190.4 1,211.5 1,235.7 1,227.3 1,224.7 1,228.0 1,265.9 31 U.S. government securities 718.5 693.1 697.9 698.4 702.3 715.2 724.3 736.5 734.7 726.9 728.3 757.6 32 Other securities 390.4 447.9 454.8 462.7 454.9 475.1 487.2 499.2 492.6 497.9 499.6 508.3 33 Loans and leases in bank credit2 .... 3,451.4 3,542.3 3,553.6 3,552.9 3,552.3 3,538.4 3,597.6 3,566.6 3,570.4 3,576.5 3,560.0 3,569.7 34 Commercial and industrial 876.4 886.2 883.1 871.4 862.5 852.1 857.2 845.7 849.9 848.5 841.9 839.6 35 Real estate 1,625.1 1,669.5 1,685.1 1,687.4 1,695.3 1,694.1 1,699.8 1,711.9 1,714.7 1,713.1 1,707.7 1,718.7 36 Revolving home equity 126.0 133.0 135.3 136.5 138.0 140.2 143.2 146.6 145.7 146.6 147.3 147.9 37 Other 1,499.0 1,536.5 1,549.8 1,550.9 1,557.3 1,553.9 1,556.6 1,565.2 1,569.0 1,566.5 1,560.5 1,570.8 38 Consumer 529.7 545.3 550.4 548.3 546.0 547.1 548.2 548.5 543.3 549.6 551.4 551.0 39 Credit cards and related plans . . 204.8 213.9 218.8 216.9 215.9 216.5 215.3 216.4 210.8 217.5 219.2 219.4 40 Other 324.9 331.4 331.7 331.5 330.1 330.6 332.9 332.1 332.5 332.0 332.2 331.7 41 Security3 70.6 75.8 70.0 78.2 78.6 81.8 97.3 80.4 81.4 81.6 81.6 77.2 42 Other loans and leases 349.6 365.5 365.0 367.5 369.9 363.4 395.2 380.1 381.1 383.8 377.3 383.2 43 Interbank loans 214.7 268.2 247.2 244.0 243.8 256.3 318.4 285.8 281.4 287.4 281.5 293.1 44 Cash assets4 243.8 246.3 243.3 236.2 243.6 234.6 277.8 258.4 282.4 246.1 233.1 273.8 45 Other assets5 356.3 384.7 380.2 374.0 386.7 397.0 433.5 449.1 443.1 444.5 451.9 450.8 46 Total assets6 5,313.4 5,517.5 5,511.4 5,502.5 5,517.9 5,550.2 5,772.1 5,727.7 5,736.8 5,711.0 5,686.3 5,785.5 Liabilities 47 Deposits 3,399.9 3,614.7 3,585.6 3,610.8 3,631.4 3,641.4 3,774.6 3,727.3 3,758.0 3,718.4 3,681.3 3,746.9 48 Transaction 594.3 605.0 592.8 590.9 590.0 586.8 669.3 619.6 619.1 609.0 609.6 645.7 49 Nontransaction 2,805.6 3,009.7 2,992.8 3,019.8 3,041.5 3,054.6 3,105.3 3,107.7 3,139.0 3,109.4 3,071.7 3,101.2 50 Large time 546.8 567.9 567.6 569.6 568.3 567.3 565.4 567.7 572.6 565.3 564.9 567.5 51 Other 2,258.8 2,441.8 2,425.2 2,450.3 2,473.1 2,487.3 2,539.9 2,540.0 2,566.4 2,544.1 2,506.8 2,533.7 52 Borrowings 972.2 1,029.6 1,023.0 988.8 994.3 990.8 1,047.3 1,042.0 1,032.5 1,045.1 1,039.2 1,056.3 53 From banks in the U.S 348.5 382.7 366.5 359.9 363.8 367.7 400.9 390.5 389.0 396.3 387.0 394.6 54 From others 623.8 646.9 656.5 628.9 630.6 623.0 646.3 651.5 643.4 648.8 652.2 661.7 55 Net due to related foreign offices 236.2 183.1 214.1 203.4 204.0 206.1 187.5 193.2 189.9 185.9 190.5 211.8 56 Other liabilities 283.7 271.7 269.0 279.5 260.9 275.4 323.8 301.9 297.8 293.1 306.4 303.9 57 Total liabilities 4,892.0 5,099.1 5,091.8 5,082.5 5,090.6 5,113.7 5,333.2 5,264.4 5,278.2 5,242.4 5,217.3 5,318.9 58 Residual (assets less liabilities)7 421.3 418.4 419.6 420.0 427.3 436.5 438.9 463.2 458.6 468.6 469.0 466.6 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities All 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 2001 2001 Oct. Apr. May June July Aug. Sept. Oct. Oct. 10 Oct. 17 Oct. 24 Oct. 31 Seasonally adjusted Assets 1 Bank credit 2,554.0 2,620.3 2,631.6 2,629.3 2,622.5 2,622.8 2,686.0 2,627.0 2,632.3 2,622.7 2,608.9 2,642.4 ?, Securities in bank credit 580.0 598.6 608.7 612.4 609.7 630.9 641.9 648.5 642.7 639.1 637.9 672.1 U.S. government securities 360.8 346.3 354.4 352.6 353.3 361.0 364.2 365.6 366.7 357.9 355.2 381.1 4 Trading account 21.2 33.7 35.3 35.1 38.3 36.3 37.9 35.7 33.9 35.6 35.5 38.4 Investment account 339.6 312.6 319.2 317.5 315.0 324.8 326.3 329.9 332.8 322.3 319.7 342.7 6 Other securities 219.2 252.3 254.2 259.7 256.4 269.9 277.7 282.8 276.0 281.2 282.7 291.0 7 Trading account 111.7 135.9 137.0 143.5 140.8 153.1 160.9 165.4 159.7 162.8 164.9 173.6 i 98 n Inv S e t s a t t m e e a n n t d a l c o c c o a u l n g t o vernment .. 10 25 7. . 5 9 1 2 16 8 . . 3 4 1 2 17 8 .2 .1 11 2 6 7 . . 3 9 1 2 15 7 . . 6 8 11 2 6 7 . . 8 6 11 2 6 7 . . 8 5 1 2 17 6 . . 4 8 1 2 16 6 . . 3 7 1 2 18 6 . . 4 8 1 2 17 6 . . 8 7 1 2 17 6 . . 4 7 II Other 81.6 88.0 89.1 88.4 87.8 89.2 89.3 90.7 89.6 91.6 91.2 90.7 Loans and leases in bank credit2 .... 1,974.0 2,021.7 2,022.9 2,016.9 2,012.8 1,991.8 2,044.1 1,978.5 1,989.6 1,983.6 1,971.0 1,970.3 12 Commercial and industrial 593.7 585.2 582.8 570.8 561.7 556.6 560.7 546.2 549.7 548.5 544.4 539.8 13 Bankers acceptances .9 .8 .8 .7 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 14 Other 592.8 584.4 582.0 570.1 561.7 556.6 560.7 546.2 549.7 548.5 544.4 539.8 15 Real estate 824.4 848.3 854.1 852.9 853.9 844.5 844.4 841.1 844.4 842.1 836.3 844.4 16 Revolving home equity 80.1 86.2 86.7 86.9 86.8 87.3 88.9 90.4 89.9 90.1 90.7 91.4 17 Other 744.2 762.1 767.4 766.0 767.1 757.2 755.6 750.7 754.5 752.0 745.6 753.1 18 Consumer 238.0 249.8 252.3 254.2 253.8 250.9 252.3 241.9 241.7 241.3 240.7 240.1 19 Security3 61.0 70.4 66.8 72.5 75.1 78.0 93.6 69.4 73.5 69.2 69.4 63.7 20 Federal funds sold to and repurchase agreements with broker-dealers 43.2 53.9 49.4 54.7 59.6 63.5 66.3 56.5 60.5 57.0 56.9 5511..66 21 Other 17.8 16.5 17.4 17.8 15.5 14.5 27.3 12.8 12.9 12.2 12.6 12.1 22 State and local government 12.8 13.0 13.0 13.3 14.2 14.1 14.3 14.5 14.2 14.3 14.9 14.9 23 Agricultural 9.6 10.4 10.6 10.3 10.0 9.4 9.2 9.1 9.1 9.1 9.1 9.2 24 Federal funds sold to and repurchase agreements with others 17.1 23.0 23.6 25.5 30.8 31.8 32.5 28.6 28.1 29.4 2266..77 3311..11 75 All other loans 87.6 87.7 85.5 84.7 81.5 75.5 105.6 81.4 80.9 81.8 81.6 79.6 26 Lease-financing receivables 129.8 133.8 134.4 132.6 131.7 131.0 131.5 146.2 148.2 147.9 147.8 147.5 7,7 Interbank loans 138.5 147.9 134.3 131.0 135.8 150.1 207.9 187.8 185.8 189.9 193.6 184.6 28 Federal funds sold to and repurchase agreements with commercial banks 60.7 84.0 72.9 72.3 70.9 79.6 132.1 106.1 105.3 108.2 109.4 9999..00 29 Other 77.9 63.9 61.4 58.7 64.9 70.4 75.8 81.7 80.5 81.7 84.2 85.6 30 Cash assets4 144.7 145.6 139.9 135.7 146.2 140.1 173.7 151.4 167.5 129.7 145.9 162.3 31 Other assets5 266.8 276.9 274.0 261.8 267.8 277.1 302.6 320.9 308.8 317.1 335.3 320.8 32 Total assets6 3,068.2 3,152.7 3,142.2 3,120.0 3,134.3 3,151.9 3,332.3 3,247.7 3,254.9 3,219.8 3,244.2 3,271.2 Liabilities 33 Deposits 1,668.8 1,741.2 1,732.1 1,736.7 1,748.8 1,751.2 1,855.9 1,789.1 1,805.2 1,771.4 1,782.7 1,791.8 34 Transaction 306.6 303.2 304.1 299.7 306.0 303.6 374.7 322.2 328.1 308.5 329.4 326.6 35 Nontransaction 1,362.2 1,438.0 1,428.0 1,437.0 1,442.8 1,447.5 1,481.2 1,466.9 1,477.1 1,463.0 1,453.3 1,465.2 36 Large time 259.7 268.4 270.7 274.1 271.1 264.4 264.3 259.5 264.8 257.7 256.4 256.2 37 Other 1,102.5 1,169.6 1,157.3 1,162.9 1,171.7 1,183.1 1,216.9 1,207.4 1,212.3 1,205.3 1,196.9 1,209.0 38 Borrowings 650.1 696.5 682.4 654.5 667.7 673.3 704.6 688.1 682.3 688.2 687.5 694.8 39 From banks in the U.S 198.8 230.7 213.4 211.0 218.8 226.4 257.2 232.3 234.2 236.7 228.6 228.4 40 From others 451.2 465.8 469.0 443.5 449.0 446.9 447.4 455.7 448.1 451.6 458.9 466.3 41 Net due to related foreign offices 212.6 172.7 195.2 190.9 192.4 190.2 177.6 183.5 184.4 177.7 177.0 199.0 42 Other liabilities 234.8 221.1 211.5 223.7 205.4 215.7 263.8 239.8 240.4 232.2 240.0 237.4 43 Total liabilities 2,766.3 2,831.5 2,821.2 2,805.9 2,814.4 2,830.4 3,001.9 2,900.4 2,912.2 2,869.6 2,887.1 2,923.0 44 Residual (assets less liabilities)7 301.9 321.3 321.0 314.1 319.9 321.5 330.4 347.3 342.7 350.2 357.1 348.2 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Nonfinancial Statistics • January 2002 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 2001 2001 Oct. Apr. May June July Aug. Sept. Oct. Oct. 10 Oct. 17 Oct. 24 Oct. 31 Not seasonally adjusted Assets 45 Bank credit 2,555.9 2,615.9 2,625.1 2,623.9 2,606.3 2,608.6 2,676.5 2,630.0 2,629.7 2,627.1 2,607.5 2,655.4 46 Securities in bank credit 579.3 597.6 606.4 610.0 600.8 624.8 638.3 648.6 641.2 637.6 637.2 677.1 47 U.S. government securities 358.2 348.5 353.8 351.3 349.4 357.1 361.3 363.1 362.8 354.5 351.7 381.9 48 Trading account 21.1 34.0 35.2 35.0 37.9 35.9 37.6 35.4 33.5 35.3 35.2 38.5 49 Investment account 337.1 314.5 318.6 316.3 311.5 321.2 323.7 327.7 329.2 319.2 316.5 343.4 50 Mortgage-backed securities . 215.6 227.2 233.9 230.3 230.7 243.7 249.2 259.5 261.4 254.3 250.3 271.4 51 Other 121.5 87.3 84.6 86.1 80.9 77.5 74.4 68.2 67.8 64.9 66.2 72.0 52 One year or less 32.2 30.0 26.9 25.4 21.0 20.0 20.0 18.3 16.2 16.2 17.3 23.6 53 One to five years 52.0 31.4 31.1 34.2 34.2 33.7 34.4 32.6 33.7 31.3 32.0 32.0 54 More than five years .... 37.3 25.9 26.6 26.5 25.8 23.9 20.0 17.3 18.0 17.5 16.8 16.4 55 Other securities 221.1 249.0 252.6 258.7 251.4 267.7 277.0 285.5 278.5 283.2 285.5 295.2 56 Trading account 112.7 134.2 136.1 142.9 138.1 151.9 160.5 167.0 161.1 163.9 166.5 176.1 57 Investment account 108.4 114.9 116.5 115.8 113.4 115.8 116.5 118.5 117.3 119.2 119.0 119.1 58 State and local government . 26.1 28.0 28.0 27.8 27.3 27.3 27.4 27.0 27.0 27.0 26.9 27.1 59 Other 82.3 86.8 88.5 88.1 86.1 88.5 89.1 91.5 90.4 92.2 92.1 92.0 60 Loans and leases in bank credit2 . . . 1,976.6 2,018.3 2,018.7 2,013.8 2,005.4 1,983.8 2,038.2 1,981.4 1,988.5 1,989.5 1,970.3 1,978.3 61 Commercial and industrial 593.4 589.5 585.5 572.4 561.7 553.4 559.3 545.9 548.9 548.4 542.3 540.5 62 Bankers acceptances .9 .8 .8 .7 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. bi Other 592.6 588.7 584.7 571.6 561.7 553.4 559.3 545.9 548.9 548.4 542.3 540.5 64 Real estate 826.8 844.3 853.7 851.5 852.4 845.9 846.3 843.7 847.3 845.1 837.7 847.6 65 Revolving home equity 80.9 85.3 86.7 87.1 87.4 88.4 90.0 91.3 90.8 91.1 91.5 92.2 66 Other 453.8 462.1 468.6 465.0 465.5 458.5 457.6 455.1 459.0 456.2 449.3 458.4 67 Commercial 292.0 297.0 298.4 299.4 299.5 299.0 298.7 297.3 297.5 297.7 296.9 297.0 68 Consumer 235.8 250.4 252.7 253.6 252.1 249.7 251.1 239.5 238.9 238.7 238.3 238.1 69 Credit cards and related plans . 76.6 84.7 87.0 88.0 87.3 85.1 84.6 75.7 75.3 75.4 74.9 74.2 70 Other 159.2 165.8 165.8 165.7 164.8 164.6 166.5 163.8 163.6 163.3 163.4 163.8 71 Security1 63.8 67.4 61.9 70.1 70.4 73.5 88.6 72.5 73.3 73.7 74.1 69.1 72 Federal funds sold to and repurchase agreements with broker-dealers 45.2 51.5 45.8 52.9 55.9 59.8 62.8 59.0 60.4 60.7 60.7 56.0 73 Other 18.6 15.8 16.1 17.2 14.5 13.7 25.8 13.4 12.9 13.0 13.4 13.1 74 State and local government 12.8 13.0 13.0 13.3 14.2 14.1 14.3 14.5 14.2 14.3 14.9 14.9 75 Agricultural 9.7 10.2 10.5 10.4 10.1 9.6 9.3 9.2 9.2 9.2 9.2 9.2 76 Federal funds sold to and repurchase agreements with others 17.1 23.0 23.6 25.5 30.8 31.8 32.5 28.6 28.1 29.4 26.7 31.1 77 All other loans 87.7 86.6 84.0 84.8 82.4 75.6 106.8 81.6 80.6 83.1 79.8 80.5 78 Lease-financing receivables 129.5 133.9 133.7 132.2 131.2 130.2 130.1 146.0 147.9 147.7 147.4 147.4 79 Interbank loans 133.0 150.0 136.7 135.4 135.6 144.5 200.1 180.1 174.5 181.9 180.2 185.6 80 Federal funds sold to and repurchase agreements with commercial banks 58.3 85.1 74.1 74.7 70.8 76.7 127.1 101.7 98.9 103.6 101.9 99.6 81 Other 74.7 64.9 62.5 60.7 64.8 67.8 73.0 78.4 75.6 78.3 78.3 86.0 82 Cash assets4 144.1 145.9 140.1 134.1 139.8 132.3 169.4 150.4 167.3 140.0 133.3 163.1 83 Other assets5 263.8 277.6 274.9 264.0 267.1 274.4 302.9 317.0 306.7 312.9 323.6 319.8 84 Total assets6 3,061.3 3,151.7 3,138.9 3,119.5 3,110.9 3,121.6 3,310.5 3,238.4 3,238.9 3,222.4 3,205.4 3,285.1 Liabilities 85 Deposits 1,662.7 1,750.3 1,725.3 1,736.2 1,740.6 1,735.2 1,844.7 1,782.5 1,804.4 1,775.9 1,751.1 1,790.7 86 Transaction 301.1 310.5 299.9 299.8 301.1 292.5 368.3 316.5 322.9 312.2 306.4 326.1 87 Nontransaction 1,361.6 1,439.8 1,425.4 1,436.5 1,439.5 1,442.7 1,476.4 1,466.0 1,481.5 1,463.7 1,444.7 1,464.7 88 Large time 261.1 266.3 267.8 271.5 267.5 262.7 261.3 260.9 265.5 258.7 258.5 259.7 89 Other 1,100.4 1,173.5 1,157.6 1,165.0 1,172.0 1,180.0 1,215.1 1,205.2 1,216.0 1,205.0 1,186.2 1,205.0 90 Borrowings 648.2 697.3 687.4 655.3 658.5 651.7 699.2 685.7 675.4 687.7 680.8 699.9 91 From banks in the U.S 194.2 233.9 216.5 211.8 215.5 218.1 247.4 227.1 227.9 232.0 221.9 226.5 92 From nonbanks in the U.S 454.0 463.3 470.9 443.6 443.0 433.6 451.8 458.6 447.5 455.7 458.9 473.4 93 Net due to related foreign offices 212.7 170.3 197.5 190.3 189.2 190.6 177.0 183.7 180.5 176.6 180.6 202.8 94 Other liabilities 234.8 218.1 213.8 223.1 202.3 216.1 263.1 239.7 235.7 230.5 243.5 241.5 95 Total liabilities 2,758.4 2,836.0 2,824.1 2,805.0 2,790.7 2,793.7 2,984.0 2,891.7 2,895.9 2,870.8 2,856.1 2,934.9 96 Residual (assets less liabilities)7 302.8 315.7 314.8 314.6 320.2 327.9 326.5 346.8 343.0 351.7 349.4 350.2 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A19 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued D. Small domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures Account 2000 2001 2001 Oct. Apr. May June' July' Aug.' Sept.' Oct. Oct. 10 Oct. 17 Oct. 24 Oct. 31 Seasonally adjusted Assets 1 Bank credit 2,003.0' 2,067.7' 2,080.7' 2,088.1 2,103.2 2.117.0 2,127.1 2,170.4 2,166.9 2,171.5 2,179.2 2,177.7 2 Securities in bank credit 532.0 540.9 544.7 549.4 556.6 566.3 573.4 589.5 588.2 589.8 593.4 591.0 U.S. government securities 362.8' 342.0' 342.6' 345.4 353.1 358.9 363.1 375.8 374.1 375.1 379.2 377.9 4 Other securities 169.3' 198.9' 202.2' 204.0 203.5 207.4 210.3 213.7 214.2 214.7 214.1 213.1 5 Loans and leases in bank credit2 .... 1,470.9' 1,526.9' 1,535.9' 1,538.8 1,546.6 1,550.7 1,553.7 1,580.9 1,578.7 1,581.8 1,585.8 1,586.7 6 Commercial and industrial 283.3 294.6' 295.0' 297.2 301.0 300.3 299.4 300.2 301.7 300.1 299.7 299.4 7 Real estate 797.4 825.5' 830.6' 835.2 842.3 846.4 851.8 867.1 866.7 866.7 868.9 869.9 8 Revolving home equity 44.9 47.8 48.5 49.4 50.8 52.0 53.0 55.1 54.7 55.2 55.5 55.4 9 Other 752.5 777.8' 782.1' 785.7 791.5 794.4 798.8 812.0 811.9 811.5 813.4 814.5 10 Consumer 291.9 298.6 300.4 296.9 294.7 295.1 293.6 306.9 303.1 308.5 310.2 310.5 11 Security3 6.7 8.4 8.5 8.3 8.4 8.5 8.8 7.9 8.0 7.8 7.7 7.9 12 Other loans and leases 91.5' 99.8' 101.5' 101.2 100.3 100.3 100.2 99.0 99.3 98.6 99.3 99.1 n Interbank loans 80.6' 114.3' 119.4' 115.2 115.8 117.6 122.3 104.6 103.8 103.9 104.7 104.2 14 Cash assets4 99.1 103.9 104.7 103.2 105.1 105.1 107.7 107.3 111.7 101.9 106.5 108.2 15 Other assets5 92.5 107.1 105.3 110.0 119.6 122.5 130.6 132.1 136.5 131.6 128.3 131.0 16 Total assets6 2,249.1 2,365.6 2,382.4 2,388.8 2,415.8 2,434.0 2,459.3 2,485.6 2,490.2 2,480.1 2,489.7 2,492.2 Liabilities 17 Deposits 1,736.3 1,857.1 1,866.7' 1,885.9 1,904.0 1,919.0 1,936.2 1,943.4 1,945.6 1,936.1 1,941.5 1,953.1 18 Transaction 293.8 295.0 298.1 291.5 290.4 297.1 301.0 303.4 293.2 293.4 312.6 318.8 10 Nontransaction 1,442.5 1,562.1 1,568.7 1,594.4 1,613.7 1,622.0 1,635.1 1,640.0 1,652.3 1,642.7 1,628.9 1,634.3 20 Large time 285.7 301.6 299.8 298.1 300.8 304.6 304.2 306.8 307.1 306.6 306.4 307.9 21 Other 1,156.8 1.260.5 1,268.9 1,296.3 1,312.8 1,317.4 1.331.0 1,333.1 1,345.3 1,336.1 1,322.5 1,326.4 72 Borrowings 324.1 332.3 335.6 333.5 335.8 339.1 348.0 356.3 357.1 357.4 358.4 356.4 73 From banks in the U.S 154.3 148.8 150.0 148.2 148.3 149.6 153.5 163.4 161.1 164.3 165.1 168.0 24 From others 169.7 183.6' 185.6 185.3 187.6 189.5 194.5 192.9 196.0 193.1 193.3 188.3 25 Net due to related foreign offices 23.4 12.8 16.6 13.1 14.7 15.5 10.5 9.5 9.5 9.3 9.8 9.0 26 Other liabilities 48.8 53.6 55.2 56.3 58.6 59.3 60.7 62.2 62.1 62.5 62.9 62.4 27 Total liabilities 2,132.6 2,255.8 2,274.1 2,288.9 2,313.2 2,332.9 2,355.4 2,371.4 2,374.2 2,365.3 2,372.6 2,380.8 28 Residual (assets less liabilities)7 116.4' 109.8 108.3 99.9 102.6 101.1 103.9 114.2 116.0 114.8 117.1 111.3 Not seasonally adjusted Assets 79 Bank credit 2,004.3' 2,067.5' 2,081.2' 2,090.0 2,103.3 2,120.2 2,132.6 2,172.2 2,168.0 2,174.1 2,180.5 2.180.2 30 Securities in bank credit 529.6 543.5 546.3 551.0 556.4 565.6 573.2 587.1 586.1 587.1 590.8 588.8 31 U.S. government securities 360.3' 344.6' 344.1' 347.0 352.9 358.2 363.0 373.4 371.9 372.4 376.6 375.7 32 Other securities 169.3' 198.9' 202.2' 204.0 203.5 207.4 210.3 213.7 214.2 214.7 214.1 213.1 33 Loans and leases in bank credit2 .... 1,474.7' 1,523.9' 1,534.9' 1,539.0 1,546.9 1,554.6 1,559.4 1,585.2 1,582.0 1,587.0 1,589.7 1,591.4 34 Commercial and industrial 282.9 296.7' 297.6' 299.1 300.8 298.7 297.9 299.8 301.0 300.1 299.6 299.1 35 Real estate 798.3 825.2' 831.4' 835.9 842.8 848.2 853.5 868.2 867.4 868.0 870.1 871.2 36 Revolving home equity 45.1 47.7 48.6 49.4 50.5 51.8 53.2 55.3 54.9 55.5 55.8 55.8 37 Other 753.2 777.5' 782.8' 786.5 792.3 796.4 800.3 812.8 812.5 812.6 814.3 815.4 38 Consumer 293.9 294.8 297.7 294.7 293.9 297.4 297.1 309.0 304.4 310.8 313.1 313.0 39 Credit cards and related plans . . 128.2 129.2 131.8 128.9 128.6 131.4 130.7 140.7 135.5 142.1 144.3 145.1 40 Other 165.7 165.6 165.9 165.8 165.3 165.9 166.4 168.4 168.9 168.7 168.8 167.8 41 Security3 6.8 8.5 8.1 8.1 8.2 8.3 8.7 7.9 8.1 7.9 7.6 8.1 47 Other loans and leases 92.7' 98.7' 100.1' 101.3 101.2 102.1 102.2 100.2 101.1 100.1 99.4 100.1 43 Interbank loans 81.7' 118.2' 110.5' 108.6 108.2 111.7 118.3 105.7 107.0 105.6 101.3 107.5 44 Cash assets4 99.7 100.4 103.2 102.0 103.8 102.3 108.4 108.0 115.0 106.2 99.8 110.7 45 Other assets5 92.5 107.1 105.3 110.0 119.6 122.5 130.6 132.1 136.5 131.6 128.3 131.0 46 Total assets6 2,252.1 2,365.8 2,372.5 2,382.9 2,407.1 2,428.6 2,461.6 2,489.2 2,497.9 2,488.6 2,480.9 2,500.4 Liabilities 47 Deposits 1,737.2 1,864.4 1,860.3 1,874.5 1,890.8 1,906.2 1,929.9 1,944.8 1,953.6 1,942.4 1,930.2 1,956.2 48 Transaction 293.2 294.5 292.9 291.2 288.8 294.3 301.0 303.1 296.2 296.7 303.2 319.6 49 Nontransaction 1,444.0 1,569.9 1,567.4 1,583.4 1,602.0 1,611.9 1,628.9 1,641.7 1,657.4 1,645.7 1,627.0 1,636.5 50 Large time 285.7 301.6 299.8 298.1 300.8 304.6 304.2 306.8 307.1 306.6 306.4 307.9 51 Other 1,158.4 1,268.2' 1,267.6 1,285.3 1,301.2 1,307.3 1,324.8 1,334.9 1,350.3 1,339.1 1.320.6 1,328.7 52 Borrowings 324.1 332.3 335.6 333.5 335.8 339.1 348.0 356.3 357.1 357.4 358.4 356.4 53 From banks in the U.S 154.3 148.8 150.0 148.2 148.3 149.6 153.5 163.4 161.1 164.3 165.1 168.0 54 From others 169.7 183.6' 185.6 185.3 187.6 189.5 194.5 192.9 196.0 193.1 193.3 188.3 55 Net due to related foreign offices 23.4 12.8 16.6 13.1 14.7 15.5 10.5 9.5 9.5 9.3 9.8 9.0 56 Other liabilities 48.8 53.6 55.2 56.3 58.6 59.3 60.7 62.2 62.1 62.5 62.9 62.4 57 Total liabilities 2,133.6 2,263.1 2,267.7 2,277.5 2,300.0 2,320.1 2,349.1 2,372.8 2,382.3 2,371.6 2,361.3 2,383.9 58 Residual (assets less liabilities)7 118.5 102.7 104.8 105.4 107.1 108.5 112.4 116.5 115.6 116.9 119.6 116.5 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic NonfinancialS tatistics • January 2002 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 2001 2001 Oct. Apr. May June July Aug. Sept.' Oct. Oct. 10 Oct. 17 Oct. 24 Oct. 31 Seasonally adjusted Assets 1 Bank credit 586.8 626.6r 611.5 602.9 592.4' 592.2 587.0 575.9 573.2 569.7 572.4 588.3 2 Securities in bank credit 202.0 221.0 214.6 216.0 216.5 219.5 220.5 218.8 216.4 214.4 218.2 224.9 3 U.S. government securities 69.7 74.4 69.7 68.1 67.1 66.8 69.8 72.1 69.2 69.6 73.0 76.7 4 Other securities 132.3 146.5 144.9 148.0 149.4 152.7 150.7 146.7 147.2 144.7 145.2 148.1 5 Loans and leases in bank credit2 .... 384.7 405.7 396.9' 386.8' 375.9' 372.7 366.4 357.1 356.7 355.4 354.2 363.4 6 Commercial and industrial 203.5 218.8r 217.9' 210.7' 205.7' 204.5' 204.6 201.9 201.0 201.9 201.7 203.4 7 Real estate 18.1 17.9' 18.2' 18.1' 18.3' 18.7' 19.2 19.5 19.3 19.4 19.6 19.7 8 Security3 96.2 100.8 92.9 91.2 86.5 83.8 77.6 71.1 71.0 69.8 68.6 75.4 9 Other loans and leases 67.0 68.2 67.9 66.8 65.4 65.7 65.1 64.6 65.5 64.3 64.3 64.9 10 Interbank loans 27.2 27.7 29.5 21.9 21.3 20.4 26.2 24.3 23.0 30.8 22.3 22.2 11 Cash assets4 41.9 38.7 37.3 36.3 36.8 37.3 45.2 39.1 39.0 41.3 38.2 37.5 12 Other assets5 36.7 39.7 37.3 37.1 31.7 29.2 31.5 30.4 31.0 28.7 31.2 29.6 13 Total assets6 692.3 732.4r 715.3 697.8r 681.9 678.7 689.5 669.4 665.8 670.2 663.8 677.2 Liabilities 14 Deposits 383.7 394.3 408.5 418.7 412.5 403.3 403.2 413.7 411.6 417.7 413.6 414.1 15 Transaction 10.7 10.7 10.6 9.5 9.3 9.9 12.9 11.5 11.4 11.7 11.7 11.8 16 Nontransaction 373.0 383.6 397.9 409.2 403.2 393.4 390.3 402.1 400.2 406.0 401.9 402.3 17 Borrowings 220.6 240.2 219.1 215.8 210.7 210.3 221.1 204.2 200.9 199.7 198.2 215.6 18 From banks in the U.S 19.1 25.3 20.3 22.5 22.3 20.9 31.0 23.7 21.8 24.9 20.7 25.2 19 From others 201.6 214.9 198.7 193.3 188.4 189.4 190.1 180.5 179.2 174.8 177.5 190.4 20 Net due to related foreign offices 16.5 4.6 -4.3 -19.6 -16.2 -11.7 -18.4 -18.7 -21.0 -13.0 -14.4 -22.3 21 Other liabilities 76.1 88.8 86.1 84.6 79.5 78.6 80.7 76.3 76.9 73.6 76.9 75.8 22 Total liabilities 696.9 727.9 709.3 699.4 686.5 680.5 686.7 675.5 668.4 678.0 674.2 683.2 23 Residual (assets less liabilities)7 -4.6 4.5' 6.0 -1.5 -4.6 -1.8 2.8 -6.1 -2.6 -7.8 -10.3 -6.0 Not seasonally adjusted Assets 24 Bank credit 590.8 623.7' 606.7' 599.1' 588.0 585.8 585.2 578.8 572.7 573.3 574.9 594.9 25 Securities in bank credit 202.0 221.0 214.6 216.0 216.5 219.5 220.5 218.8 216.4 214.4 218.2 224.9 26 U.S. government securities 69.7 74.4 69.7 68.1 67.1 66.8 69.8 72.1 69.2 69.6 73.0 76.7 27 Trading account 12.0 14.8 13.8 13.7 13.0 12.3 13.7 11.6 11.5 11.5 11.2 11.0 28 Investment account 57.6 59.6 55.9 54.4 54.1 54.5 56.2 60.5 57.8 58.1 61.8 65.8 29 Other securities 132.3 146.5 144.9 148.0 149.4 152.7 150.7 146.7 147.2 144.7 145.2 148.1 30 Trading account 90.7 99.6 99.4 105.7 108.0 110.9 109.7 105.8 106.9 104.0 104.6 106.1 31 Investment account 41.7 47.0 45.6 42.2 41.4 41.8 41.0 40.9 40.3 40.7 40.7 42.1 32 Loans and leases in bank credit2 .... 388.8 402.8 392.2 383.1 371.5 366.3 364.7 360.0 356.3 358.9 356.7 370.1 33 Commercial and industrial 203.7 217.0' 214.8' 209.6' 205.0' 203.2' 204.2 202.1 200.5 201.8 201.4 204.7 34 Real estate 18.1 17.9' 18.2' 18.1' 18.3' 18.7' 19.2 19.5 19.3 19.4 19.6 19.7 35 Security3 100.4 99.4 92.1 89.2 83.6 80.0 76.4 74.2 72.1 73.7 72.1 80.8 36 Other loans and leases 66.6 68.4 67.1 66.2 64.4 64.5 64.8 64.2 64.4 64.1 63.7 64.9 37 Interbank loans 27.2 27.7 29.5 21.9 21.3 20.4 26.2 24.3 23.0 30.8 22.3 22.2 38 Cash assets4 42.7 37.2 36.4 35.2 35.5 36.1 44.2 39.8 38.6 42.0 39.2 39.3 39 Other assets5 36.2 38.8 36.7 35.8 30.9 28.9 31.2 30.0 30.7 28.4 30.5 29.1 40 Total assets6 696.6 727.1' 709. lr 691.7 675.3 670.8r 686.5 672.6 664.7 674.2 666.6 685.2 Liabilities 41 Deposits 377.4 397.2 409.7 411.6 402.3 391.6 395.3 406.4 402.5 407.5 407.7 409.8 42 Transaction 10.8 10.2 10.2 9.3 9.4 9.9 13.2 11.7 11.1 12.0 11.7 12.3 43 Nontransaction 366.6 387.0 399.5 402.2 392.9 381.7' 382.1 394.7 391.5 395.4 396.0 397.6 44 Borrowings 220.6 240.2 219.1 215.8 210.7 210.3 221.1 204.2 200.9 199.7 198.2 215.6 45 From banks in the U.S 19.1 25.3 20.3 22.5 22.3 20.9 31.0 23.7 21.8 24.9 20.7 25.2 46 From others 201.6 214.9 198.7 193.3 188.4 189.4 190.1 180.5 179.2 174.8 177.5 190.4 47 Net due to related foreign offices 16.8 -.1 -7.5 -22.7 -19.4 -12.9 -15.9 -18.4 -20.2 -11.3 -18.2 -20.3 48 Other liabilities 76.2 86.7 84.6 83.1 78.1 78.1 81.9 76.4 77.3 74.3 75.3 76.6 49 Total liabilities 691.0 724.0 705.8 687.6 671.7 667.0 682.4 668.7 660.5 670.3 662.9 681.7 50 Residual (assets less liabilities)1 5.6 3.1r 3.3' 4.1 3.6 3.9 4.1 3.8 4.1 3.9 3.7 3.5 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities 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 2001 2001 Oct. Apr. May June July Aug. Sept.' Oct. Oct. 10 Oct. 17 Oct. 24 Oct. 31 Not seasonally adjusted MEMO Large domestically chartered banks. adjusted for mergers 1 Revaluation gains on off-balance-sheet items8 71.0 79.9 82.0 87.3 77.6 87.7 95.8 98.1 92.6 94.1 97.3 106.6 2 Revaluation losses on off-balancesheet items8 72.8 74.9 74.7 81.6 71.8' 78.4 84.8 85.6 80.3 81.1 84.3 93.5 3 Mortgage-backed securities9 245.1 259.1 266.0 262.2 261.8 273.9 279.7 289.2 290.6 283.4 281.1 301.6 4 Pass-through 177.2 195.3 200.8 200.8 200.1 212.2 218.1 222.2 227.2 221.0 218.8 219.6 5 CMO, REMIC, and other 67.9 63.8 65.2 61.4 61.7 61.7 61.6 67.1 63.3 62.4 62.3 82.0 6 Net unrealized gains (losses) on available-for-sale securities10 -2.3 6.0 4.8 3.6 3.1 5.3 7.3 9.6 9.4 9.1 9.1 10.3 7 Off-shore credit to U.S. residents'1 .... 22.3 21.7 21.0 20.6 20.2 19.6 20.1 19.6 19.6 19.5 20.1 19.4 8 Securitized consumer loans'2 77.5' 81.9r 80.3' 81.7' 96.2' 96.1' 97.1 98.1 97.7 97.5 98.2 99.0 9 Credit cards and related plans 61.9' 72.4' 71.1' 72.8' 86.1 85.6 86.8 87.8 87.4 87.2 88.0 88.8 10 Other 9.6 9.5 9.2 9.0' 10.1' 10.5' 10.3 10.3 10.4 10.3 10.2 10.2 11 Securitized business loans12 12.0r 14.2' 14.2' 14.7' 14.8' IS.O' 15.1 15.4 15.5 15.4 15.3 15.4 Small domestically chartered commercial banks, adjusted for mergers 12 Mortgage-backed securities9 207.5' 224.6' 229.3' 232.9' 239.6' 243.9' 249.1 255.4 253.5 253.7 257.3 258.7 13 Securitized consumer loans'2 224.5 234.7 234.5 237.8' 227.8' 230.8' 234.0 236.1 239.0 234.1 234.0 235.9 14 Credit cards and related plans 215.2 226.1 226.1 229.3' 219.5' 222.5' 225.7 228.1 230.4 226.7 226.7 227.5 15 Other 9.3 8.6 8.4 8.5 8.3 8.3 8.3 8.0 8.5 7.3 7.3 8.4 Foreign-related institutions 16 Revaluation gains on off-balancesheet items8 47.9 56.5 56.4 57.3 54.9 57.3 56.5 54.8 55.4 53.0 53.9 55.9 17 Revaluation losses on off-balancesheet items8 45.0 52.2 51.9 52.1 49.8 52.1 51.5 50.4 51.0 49.0 49.8 50.9 18 Securitized business loans'2 34.5 31.3 29.5 28.3 27.1 26.6 26.5 26.6 26.5 27.0 26.8 26.4 NOTE. Tables 1.26, 1.27, and 1.28 have been revised to reflect changes in the Board's H.8 acquiring bank. Balance sheet data for acquired banks are obtained from Call Reports, and a statistical release, "Assets and Liabilities of Commercial Banks in the United States." Table ratio procedure is used to adjust past levels. 1.27, "Assets and Liabilities of Large Weekly Reporting Commercial Banks," and table 1.28, 2. Excludes federal funds sold to, reverse RPs with, and loans made to commercial banks "Large Weekly Reporting U.S. Branches and Agencies of Foreign Banks," are no longer in the United States, all of which are included in "Interbank loans." being published in the Bulletin. Instead, abbreviated balance sheets for both large and small 3. Consists of reverse RPs with brokers and dealers and loans to purchase and carry domestically chartered banks have been included in table 1.26, parts C and D. Data are both securities. merger-adjusted and break-adjusted. In addition, data from large weekly reporting U.S. 4. Includes vault cash, cash items in process of collection, balances due from depository branches and agencies of foreign banks have been replaced by balance sheet estimates of all institutions, and balances due from Federal Reserve Banks. foreign-related institutions and are included in table 1.26, part E. These data are break- 5. Excludes the due-from position with related foreign offices, which is included in "Net adjusted. due to related foreign offices." The not-seasonally-adjusted data for all tables now contain additional balance sheet items, 6. Excludes unearned income, reserves for losses on loans and leases, and reserves for which were available as of October 2, 1996. transfer risk. Loans are reported gross of these items. 1. Covers the following types of institutions in the fifty states and the District of Columbia: 7. This balancing item is not intended as a measure of equity capital for use in capital domestically chartered commercial banks that submit a weekly report of condition (large adequacy analysis. On a seasonally adjusted basis, this item reflects any differences in the domestic); other domestically chartered commercial banks (small domestic); branches and seasonal patterns estimated for total assets and total liabilities. agencies of foreign banks, and Edge Act and agreement corporations (foreign-related institu- 8. Fair value of derivative contracts (interest rate, foreign exchange rate, other commodity tions). Excludes International Banking Facilities. Data are Wednesday values or pro rata and equity contracts) in a gain/loss position, as determined under FASB Interpretation No. 39. averages of Wednesday values. Large domestic banks constitute a universe; data for small 9. Includes mortgage-backed securities issued by U.S. government agencies, U.S. domestic banks and foreign-related institutions are estimates based on weekly samples and on government-sponsored enterprises, and private entities. quarter-end condition reports. Data are adjusted for breaks caused by reclassifications of 10. Difference between fair value and historical cost for securities classified as availableassets and liabilities. for-sale under FASB Statement No. 115. Data are reported net of tax effects. Data shown are The data for large and small domestic banks presented on pp. A17-19 are adjusted to restated to include an estimate of these tax effects. remove the estimated effects of mergers between these two groups. The adjustment for 11. Mainly commercial and industrial loans but also includes an unknown amount of credit mergers changes past levels to make them comparable with current levels. Estimated extended to other than nonfinancial businesses. quantities of balance sheet items acquired in mergers are removed from past data for the bank 12. Total amount outstanding. group that contained the acquired bank and put into past data for the group containing the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Nonfinancial Statistics • January 2002 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, seasonally adjusted, end of period Year ending December 2001 IItteemm 1996 1997 1998 1999 2000 Apr. May June July Aug. Sept. 1 All issuers 775,371 966,699 1,163,303 1,403,023 1,615,341 1,519,528 1,501,113 1,468,919 1,453,770 1,434,238 1,423,004 Financial companies1 2 Dealer-placed paper, total2 361,147 513,307 614,142 786,643 973,060 995,072 986,369 982,216 958,911 957,792 950,346 3 Directly placed paper, total1 229,662 252,536 322,030 337,240 298,848 247,333 245,768 244,520 265,824 248,974 255,122 4 Nonfinancial companies4 184,563 200,857 227,132 279,140 343,433 277,123 268,976 242,183 229,035 227,473 217,537 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. 1.33 PRIME RATE CHARGED BY BANKS Short-Term Business Loans1 Percent per year Date of change Rate Period Av r e a r t a e g e Av r e a r t a e g e Av r e a r t a e g e 1998—Jan. 1 8.50 1998 .... 8.35 1999—Jan. 7.75 2000—Jan. 8.50 O Se c p t. t . 3 16 0 8 8. . 0 25 0 21909090 ....... . 9 8 . . 2 00 3 F M e a b r . . 7 7 . . 7 7 5 5 F M e a b r . . 8 8. . 8 73 3 Nov. 18 7.75 Apr. 7.75 Apr. 9.00 1998—Jan. 8.50 May 7.75 May 9.24 1999—July 1 8.00 Feb. 8.50 June 7.75 June 9.50 Aug. 25 8.25 Mar. 8.50 July 8.00 July 9.50 Nov. 17 8.50 Apr. 8.50 Aug. 8.06 Aug. 9.50 May 8.50 Sept. 8.25 Sept. 9.50 2000—Feb. 3 8.75 June 8.50 Oct. 8.25 Oct. 9.50 Mar. 22 9.00 July 8.50 Nov. 8.37 Nov. 9.50 May 17 9.50 Aug. 8.50 Dec. 8.50 Dec. 9.50 Sept. 8.49 2001—Jan. 4 9.00 Oct. 8.12 2001—Jan. 9.05 Feb. 1 8.50 Nov. 7.89 Feb. 8.50 Mar. 21 8.00 Dec. 7.75 Mar. 8.32 Apr. 19 7.50 Apr. 7.80 May 16 7.00 May 7.24 June 28 6.75 June 6.98 Aug. 22 6.50 July 6.75 Sept. 18 6.00 Aug. 6.67 Oct. 3 5.50 Sept. 6.28 Nov. 7 5.00 Oct. 5.53 Nov. 5.10 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 July Aug. Sept. Oct. Sept. 28 Oct. 5 Oct. 12 Oct. 19 Oct. 26 MONEY MARKET INSTRUMENTS 1 Federal funds l•2•-, 5.35 4.97 6.24 3.77 3.65 3.07 2.49 2.99 2.71 2.44 2.44 2.49 2 Discount window borrowing2 4 4.92 4.62 5.73 3.25 3.16 2.77 2.02 2.50 2.36 2.00 2.00 2.00 Commercial paper3-5-6 Nonfinancial 3 1 -month 5.40 5.09 6.27 3.71 3.54 2.96 2.40 2.62 2.50 2.46 2.41 2.32 4 2-month 5.38 5.14 6.29 3.63 3.47 2.87 2.30 2.49 2.42 2.32 2.31 2.22 5 3-month 5.34 5.18 6.31 3.59 3.42 2.81 2.28 2.42 2.40 2.32 2.29 2.22 Financial 6 1 -month 5.42 5.11 6.28 3.73 3.57 2.97 2.42 2.62 2.52 2.48 2.43 2.34 7 2-month 5.40 5.16 6.30 3.66 3.48 2.87 2.31 2.52 2.43 2.35 2.32 2.24 8 3-month 5.37 5.22 6.33 3.62 3.44 2.84 2.29 2.47 2.40 2.32 2.30 2.23 Commercial paper (historical)3-5-7 9 1 -month n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 3-month n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 11 6-month n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Finance paper, directly placed (historical)3'5,8 12 1-month n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 13 3-month n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 14 6-month n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Bankers acceptances3-5'9 15 3-month 5.39 5.24 6.23 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 16 6-month 5.30 5.30 6.37 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Certificates of deposit, secondary market310 17 1 -month 5.49 5.19 6.35 3.76 3.59 2.99 2.43 2.61 2.55 2.50 2.44 2.34 18 3-month 5.47 5.33 6.46 3.66 3.48 2.87 2.31 2.52 2.46 2.37 2.32 2.22 19 6-month 5.44 5.46 6.59 3.70 3.49 2.84 2.26 2.48 2.38 2.31 2.28 2.20 20 Eurodollar deposits, 3-month3 " 5.45 5.31 6.45 3.66 3.47 2.85 2.31 2.50 2.46 2.37 2.32 2.22 U.S. Treasury bills Secondary market3-5 ?1 3-month 4.78 4.64 5.82 3.51 3.36 2.64 2.16 2.34 2.21 2.20 2.17 2.13 22 6-month 4.83 4.75 5.90 3.45 3.29 2.63 2.12 2.29 2.20 2.17 2.15 2.08 23 1-year 4.80 4.81 5.78 3.39 3.26 n.a. n.a. n.a. n.a. n.a. n.a. n.a. Auction high3,512 24 3-month 4.81 4.66 5.66 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 25 6-month 4.85 4.76 5.85 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 26 1-year 4.85 4.78 5.85 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. U.S. TREASURY NOTES AND BONDS Constant maturities'3 77 1-year 5.05 5.08 6.11 3.62 3.47 2.82 2.33 2.49 2.40 2.39 2.37 2.31 28 2-year 5.13 5.43 6.26 4.04 3.76 3.12 2.73 2.86 2.76 2.80 2.78 2.72 29 3-year 5.14 5.49 6.22 4.31 4.04 3.45 3.14 3.22 3.14 3.22 3.18 3.15 30 5-year 5.15 5.55 6.16 4.76 4.57 4.12 3.91 3.94 3.88 3.99 3.94 3.94 31 7-year 5.28 5.79 6.20 5.06 4.84 4.51 4.31 4.40 4.30 4.39 4.34 4.33 32 10-year 5.26 5.65 6.03 5.24 4.97 4.73 4.57 4.66 4.53 4.65 4.60 4.60 33 20-year 5.72 6.20 6.23 5.75 5.58 5.53 5.34 5.53 5.35 5.43 5.37 5.33 34 30-year 5.58 5.87 5.94 5.61 5.48 5.48 5.32 5.51 5.33 5.40 5.35 5.32 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 series14 36 4.93 5.28 5.58 4.79 4.89 4.93 4.89 4.99 44..8888 4.89 44..8899 4.90 37 Baa 5.14 5.70 6.19 5.81 5.55 5.62 5.55 5.75 5.51 5.55 5.55 5.58 38 Bond Buyer series15 5.09 5.43 5.71 5.20 5.03 n.a. 5.05 5.14 5.03 5.05 5.05 5.05 CORPORATE BONDS 39 Seasoned issues, all industries16 6.87 7.45 7.98 7.51 7.37 7.54 7.41 7.64 7.45 7.49 7.42 7.39 Rating group 40 6.53 7.05 7.62 7.13 7.02 7.17 7.03 7.27 77..0066 7.10 7.04 7.01 41 Aa 6.80 7.36 7.83 7.27 7.11 7.28 7.13 7.38 7.18 7.20 7.13 7.12 42 A 6.93 7.53 8.11 7.65 7.48 7.67 7.59 7.79 7.62 7.67 7.61 7.56 43 Baa 7.22 7.88 8.36 7.97 7.85 8.03 7.91 8.12 7.94 7.98 7.92 7.89 MEMO Dividend-price ratio17 44 Common stocks 1.49 1.25 1.15 1.30 1.34 1.48 1.45 1.56 1.46 1.42 1.45 1.43 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 • January 2002 1.36 STOCK MARKET Selected Statistics 2001 IInnddiiccaattoorr 11999988 11999999 22000000 Feb. Mar. Apr. May June July Aug. Sept. Oct. Prices and trading volume (averages of daily figures) CCCCCCCooooooommmmmmmmmmmmmmooooooonnnnnnn ssssssstttttttoooooooccccccckkkkkkk ppppppprrrrrrriiiiiiiccccccceeeeeeesssssss (((((((iiiiiiinnnnnnndddddddeeeeeeexxxxxxxeeeeeeesssssss))))))) 1111111 NNNNNNNeeeeeeewwwwwww YYYYYYYooooooorrrrrrrkkkkkkk SSSSSSStttttttoooooooccccccckkkkkkk EEEEEEExxxxxxxccccccchhhhhhhaaaaaaannnnnnngggggggeeeeeee (((((((DDDDDDDeeeeeeeccccccc....... 33333331111111,,,,,,, 1111111999999966666665555555 ======= 55555550000000))))))) 550.65 619.52 643.71 648.05 603.44 607.06 644.44 630.86 613.36 604.52 544.39 556.04 2222222 IIIIIIInnnnnnnddddddduuuuuuussssssstttttttrrrrrrriiiiiiiaaaaaaalllllll 684.35 775.29 809.40 799.38 744.21 747.48 798.94 782.73 756.04 748.65 672.89 688.35 3333333 TTTTTTTrrrrrrraaaaaaannnnnnnssssssspppppppooooooorrrrrrrtttttttaaaaaaatttttttiiiiiiiooooooonnnnnnn 468.61 491.62 414.73 482.26 452.36 455.22 477.21 458.60 469.80 458.35 382.68 371.56 4444444 UUUUUUUtttttttiiiiiiillllllliiiiiiitttttttyyyyyyy 190.52 284.82 478.99 424.53 395.34 400.49 414.69 382.98 374.11 357.76 339.72 341.51 5555555 FFFFFFFiiiiiiinnnnnnnaaaaaaannnnnnnccccccceeeeeee 516.65 530.97 552.48 626.41 583.38 587.88 618.74 622.17 614.54 605.59 538.01 553.16 6666666 SSSSSSStttttttaaaaaaannnnnnndddddddaaaaaaarrrrrrrddddddd &&&&&&& PPPPPPPoooooooooooooorrrrrrr'''''''sssssss CCCCCCCooooooorrrrrrrpppppppooooooorrrrrrraaaaaaatttttttiiiiiiiooooooonnnnnnn (((((((1111111999999944444441111111-------44444443333333 ------- 11111110000000)))))))''''''' 1,085.50 1,327.33 1,427.22 1,305.75 1,185.85 1,189.84 1,270.37 1,238.71 1,204.45 1,178.51 1,044.64 1,076.59 7777777 AAAAAAAmmmmmmmeeeeeeerrrrrrriiiiiiicccccccaaaaaaannnnnnn SSSSSSStttttttoooooooccccccckkkkkkk EEEEEEExxxxxxxccccccchhhhhhhaaaaaaannnnnnngggggggeeeeeee (((((((AAAAAAAuuuuuuuggggggg....... 33333331111111,,,,,,, 1111111999999977777773333333 ======= 55555550000000)))))))2222222 682.69 770.90 922.22 923.99 891.22 891.18 940.73 923.06 892.74 883.01 823.78 825.91 VVVVVVVooooooollllllluuuuuuummmmmmmeeeeeee ooooooofffffff tttttttrrrrrrraaaaaaadddddddiiiiiiinnnnnnnggggggg (((((((ttttttthhhhhhhooooooouuuuuuusssssssaaaaaaannnnnnndddddddsssssss ooooooofffffff ssssssshhhhhhhaaaaaaarrrrrrreeeeeeesssssss))))))) 8888888 NNNNNNNeeeeeeewwwwwww YYYYYYYooooooorrrrrrrkkkkkkk SSSSSSStttttttoooooooccccccckkkkkkk EEEEEEExxxxxxxccccccchhhhhhhaaaaaaannnnnnngggggggeeeeeee 666,534 799,554 1,026,867 1,117,977 1,251,569 1,247,382 1,091,366 1,152,193 1,120,074 1,012,907 1,666,980 1,293,019 9999999 AAAAAAAmmmmmmmeeeeeeerrrrrrriiiiiiicccccccaaaaaaannnnnnn SSSSSSStttttttoooooooccccccckkkkkkk EEEEEEExxxxxxxccccccchhhhhhhaaaaaaannnnnnngggggggeeeeeee 28,870 32,629 51,437 70,648 81,666 77,612 66,103 62,395 56,735 48,304 72,319 66,765 Customer financing (millions of dollars, end-of-period balances) 11111110000000 MMMMMMMaaaaaaarrrrrrrgggggggiiiiiiinnnnnnn cccccccrrrrrrreeeeeeedddddddiiiiiiittttttt aaaaaaattttttt bbbbbbbrrrrrrroooooookkkkkkkeeeeeeerrrrrrr-------dddddddeeeeeeeaaaaaaallllllleeeeeeerrrrrrrsssssss''''''' 140,980 228,530 198,790 186,810 165,350 166,940 174,180 170,000 165,250 161,130 144,670 144,620 FFFFFFFrrrrrrreeeeeeeeeeeeee cccccccrrrrrrreeeeeeedddddddiiiiiiittttttt bbbbbbbaaaaaaalllllllaaaaaaannnnnnnccccccceeeeeeesssssss aaaaaaattttttt bbbbbbbrrrrrrroooooookkkkkkkeeeeeeerrrrrrrsssssss4444444 11111111111111 MMMMMMMaaaaaaarrrrrrrgggggggiiiiiiinnnnnnn aaaaaaaccccccccccccccooooooouuuuuuunnnnnnntttttttsssssss5555555 40,250 55,130 100,680 99,390 106,300 97,470 91,990 98,430 97,950 103,990 115,450 102,150 11111112222222 CCCCCCCaaaaaaassssssshhhhhhh aaaaaaaccccccccccccccooooooouuuuuuunnnnnnntttttttsssssss 62,450 79,070 84,400 78,660 77,520 77,460 76,260 75,270 73,490 73,710 74,220 68,570 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 11111113333333 MMMMMMMaaaaaaarrrrrrrgggggggiiiiiiinnnnnnn ssssssstttttttoooooooccccccckkkkkkksssssss 70 80 65 55 65 50 11111114444444 CCCCCCCooooooonnnnnnnvvvvvvveeeeeeerrrrrrrtttttttiiiiiiibbbbbbbllllllleeeeeee bbbbbbbooooooonnnnnnndddddddsssssss 50 60 50 50 50 50 11111115555555 SSSSSSShhhhhhhooooooorrrrrrrttttttt sssssssaaaaaaallllllleeeeeeesssssss 70 80 65 55 65 50 1. In July 1976 a financial group, composed of banks and insurance companies, was added 6. Margin requirements, stated in regulations adopted by the Board of Governors pursuant to the group of stocks on which the index is based. The index is now based on 400 industrial to the Securities Exchange Act of 1934, limit the amount of credit that can be used to stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and purchase and carry "margin securities" (as defined in the regulations) when such credit is 40 financial. collateralized by securities. Margin requirements on securities are the difference between the 2. On July 5, 1983. the American Stock Exchange rebased its index, effectively cutting market value (100 percent) and the maximum loan value of collateral as prescribed by the previous readings in half. Board. Regulation T was adopted effective Oct. 15, 1934; Regulation U, effective May 1, 3. Since July 1983, under the revised Regulation T, margin credit at broker-dealers has 1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective Nov. 1, 1971. included credit extended against stocks, convertible bonds, stocks acquired through the On Jan. 1, 1977, the Board of Governors for the first time established in Regulation T the exercise of subscription rights, corporate bonds, and government securities. Separate report- initial margin required for writing options on securities, setting it at 30 percent of the current ing of data for margin stocks, convertible bonds, and subscription issues was discontinued in market value of the stock underlying the option. On Sept. 30, 1985, the Board changed the April 1984. required initial margin, allowing it to be the same as the option maintenance margin required 4. Free credit balances are amounts in accounts with no unfulfilled commitments to by the appropriate exchange or self-regulatory organization; such maintenance margin rules brokers and are subject to withdrawal by customers on demand. must be approved by the Securities and Exchange Commission. 5. Series initiated in June 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A25 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Fiscal year Calendar year TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn 2001 11999999 22000000 22000011 May June July Aug. Sept. Oct. US. budget 1 Receipts, total 1,827,302 2,025,218 1,990,205' 125,590 202,887 127,842 122,559 158,496' 157,163 2 On-budget 1,382,986 1,544,634 1,482,686' 84,759 151,482 89,473 84,011 116,598' 122,004 3 Off-budget 444,468 480,584 507,519 40,831 51,405 38,369 38,548 41,898 35,159 4 Outlays, total 1,702,875 1,788,826 1,863,184' 153,508 171,025 125,022 202,549 123,250' 166,548 5 On-budget 1,382,097 1,458,061 1,516,346' 118,517 167,796 92,145 138,167 111,255' 134,014 6 Off-budget 320,778 330,765 346,838 34,992 3,229 32,877 64,382 11,996 32,534 7 Surplus or deficit (-), total 124,579 236,392 127,021' -27,919 31,862 2,820 -79,990 35,245' -9,385 8 On-budget 889 86,573 -33,660' -33,758 -16,314 -2,672 -54,156 5,343' -12,010 9 Off-budget 123,690 149,819 160,682 5,839 48,176 5,492 -25,834 29,902 2,625 Source of financing (total) 10 Borrowing from the public -88,674 -222,807 -90,118 -20,608 -1,212 -7,460 74,101 1,996 -3,695 11 Operating cash (decrease, or increase [-]) -17,580 3,799 8,440 58,856 -37,413 20,589 16,769 -37,890 16,612 12 Other2 -18,325 -17,384 -45,343' -10,329 6,763 -15,949 -10,880 649' -3,532 MEMO 13 Treasury operating balance (level, end of period) 56,458 52,659 44,219 6,274 43,687 23,098 6,329 44,219 27,607 14 Federal Reserve Banks 6,641 8,459 9,796 4,396 7,188 5,592 5,533 9,796 5,112 15 Tax and loan accounts 49,817 44,199 34,423 1,878 36,498 17,506 795 34,423 22,495 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 US. Government; and fiscal year totals: U.S. Office of Manageaccrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous ment 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 • January 2002 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS' Millions of dollars Fiscal year Calendar year SSSooouuurrrccceee ooorrr tttyyypppeee 1999 2000 2001 2001 22000000 22000011 H2 HI H2 HI Aug. Sept. Oct. RECEIPTS 1 All sources 2,025,218 l,990,205r 892,266 1,089,763 952,942 1,120,040 122,559 158,496r 157,163 2 Individual income taxes, net 1,004,462 994,339 425,451 550,208 458,679 580,632 52,020 81,277 77,772 3 Withheld 780,397 793,386 372,012 388,526 395,572 402,417 66,415 49,679 69,963 4 Nonwithheld 358,049 383,146 68,302 281,103 77,732 308,418 6,435 45,676 9,858 5 Refunds 134,046 182,251 14,841 119,477 14,628 130,256 2200,,883311 1144,,007788 22,,004499 Corporation income taxes 6 Gross receipts 235,655 186,732 110,111 119,166 123,962 102,947 4,618 9,533 30,134 V Refunds 28,367 35,657 13,996 13,781 15,776 20,262 1,475 2,057 10,388 8 Social insurance taxes and contributions, net .... 652,852 693,967 292,551 353,514 310,122 379,878 53,692 56,147 48,794 y Employment taxes and contributions2 620,451 661,442 280,059 333,584 297,665 359,648 49,974 55,433 46,887 10 Unemployment insurance 27,640 27,812 10,173 17,562 10,097 17,842 3,294 349 1,529 ii Other net receipts3 4,761 4,712 2,319 2,368 2,360 2,387 424 365 378 12 Excise taxes 68,865 66,232 34,262 33,532 35.501 32,490 5,438 6,443 3,657 13 Customs deposits 19,914 19,616 10,287 9,218 10,676 9,370 1,926 1,563 1,920 14 Estate and gift taxes 29,010 28,400 14,001 15,073 13,216 15,471 2,196 1,761 2,488 15 Miscellaneous receipts4 42,826 36,576 19,569 22,831 16,556 19,517 4,142 3,828 2,786 OUTLAYS 16 All types 1,788,826 l,863,184r 882,465 892,947 894,905 948,750 202,549 123,250r 166,548 17 National defense 294,494 304,486 149,573 143,476 147,651 153,154 30,393 23,987 26,373 18 International affairs 17,216 16,522 8,530 7,250 11,902 6,522 260 1,350 2,519 19 General science, space, and technology 18,637 20,715 10,089 9,601 10,389 10,073 2,014 1,668 2,025 20 Energy -1,060 -677 -90 -893 -595 -244 -68 697 -355 21 Natural resources and environment 25,031 23,738 12,100 10,814 12,907 11,059 2,087 2,521 2,248 22 Agriculture 36,641 28,339 20,887 11,164 20,977 10,832 6,226 -1,149 5,288 23 Commerce and housing credit 3,211 5,801 7,353 -2,497 4,408 -1,539 4,287 15,844 1,194 24 Transportation 46,854 53,882 23,199 21,054 25,841 23,810 5,433 7,358 5,423 25 Community and regional development 10,629 12,827 6,806 5,050 5,962 5,265 1,450 1,347 11,,550099 26 Education, training, employment, and social services 59,201 62,869 27,532 31,234 29,263 35,698 1,751 4,927 6,113 27 Health 154,534 171,912 74,490 75,871 81,413 87,427 15,419 14,088 17,549 28 Social security and Medicare 606,549 650,407 295,030 306,966 307,473 328,072 86,197 26,044 53,444 29 Income security 247,895 263,274 113,504 133,915 113,212 146,913 24,025 15,738 21,664 30 Veterans benefits and services 47.083 45,029 23,412 23,174 22,615 23,171 6,199 2,123 4,294 31 Administration of justice 27,820 29,754 13,459 13,981 14,635 14,694 2,647 2,428 3,230 32 General government 13,454 15,084 7,010 6,198 6,461 8,887 261 1,733 1,581 33 Net interest5 223,218 206,088 112,420 115,545 104,685 107,824 17,426 9,113 16,157 34 Undistributed offsetting receipts6 -42,581 -47,011 -22,850 -19,346 -24,070 -22,865 -3,459 -6,711 -3,727 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 disability Government, Fiscal year 2002: monthly and half-year totals: U.S. Department of the Treafund. sury, Monthly Treasury Statement of Receipts and Outlays of the U.S. Government. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance All 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1999 2000 2001 IItteemm Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 1 Federal debt outstanding 5,685.2 5,805.0 5,801.5 5,714.2 5,701.9 5,689.6 5,800.6 5,753.9 5,834.5 2 Public debt securities 5,656.3 5,776.1 5,773.4 5,685.9 5,674.2 5,662.2 5,773.7 5,726.8 5,807.5 3 Held by public 3,667.2 3,715.5 3,688.0 3,495.7 3,438.5 3,413.5 3,434.4 3,274.2 3,338.7 4 Held by agencies 1,989.1 2,060.6 2,085.4 2,190.2 2,235.7 2,248.7 2,339.4 2,452.6 2,468.8 5 Agency securities 28.9 28.9 28.1 28.3 27.7 27.4 26.8 27.1 27.0 6 Held by public 28.3 28.3 27.8 28.2 27.6 27.3 26.8 27.1 27.0 7 Held by agencies .6 .6 .4 .1 .1 .1 .1 .0 .0 8 Debt subject to statutory limit 5,567.7 5,686.9 5,686.5 5,600.6 5,591.6 5,580.5 5,692.5 5,645.0 5,732.6 9 Public debt securities 5,567.6 5,686.7 5,686.3 5,600.5 5,591.4 5,580.2 5,692.3 5,644.8 5,807.5 10 Other debt1 .1 .1 .2 .2 .2 .2 .2 .2 .2 MEMO 11 Statutory debt limit 5,950.0 5,950.0 5,950.0 5,950.0 5,950.0 5,950.0 5,950.0 5,950.0 5,950.0 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 Type and holder 11999977 11999988 11999999 22000000 Q4 Qi Q2 Q3 1 Total gross public debt 5,502.4 5,614.2 5,776.1 5,662.2 5,662.2 5,773.7 5,726.8 5,807.5 By type 2 Interest-bearing 5,494.9 5,605.4 5,766.1 5,618.1 5,618.1 5,752.0 5,682.8 5,763.6 3 Marketable 3,456.8 3,355.5 3,281.0 2,966.9 2,966.9 2,982.0' 2,822.3 2,897.3 4 Bills 715.4 691.0 737.1 646.9 646.9 712.0 620.1 734.9 5 Notes 2,106.1 1,960.7 1,784.5 1,557.3 1,557.3 1,499.0 1,441.0 1,399.6 6 Bonds 587.3 621.2 643.7 626.5 626.5 627.9 616.9 612.9 7 Inflation-indexed notes and bonds' 33.0 67.6 100.7 121.2 121.2 128.0 129.3 134.9 8 Nonmarketable2 2,038.1 2,249.9 2,485.1 2,651.2 2,651.2 2,770.0 2,860.5 2,866.4 9 State and local government series 124.1 165.3 165.7 151.0 151.0 152.9 153.3 146.4 10 Foreign issues3 36.2 34.3 31.3 27.2 27.2 24.7 24.0 18.3 11 Government 36.2 34.3 31.3 27.2 27.2 24.7 24.0 18.3 12 Public .0 .0 .0 .0 .0 .0 .0 .0 13 Savings bonds and notes 181.2 180.3 179.4 176.9 176.9 177.4 178.4 179.6 14 Government account series4 1,666.7 1,840.0 2,078.7 2,266.1 2,266.1 2,360.3 2,474.7 2,492.1 15 Non-interest-bearing 7.5 8.8 10.0 44.2 44.2 46.5 44.0 43.8 By holder5 16 U.S. Treasury and other federal agencies and trust funds 1,657.1 1,828.1 2,064.2 2,249.0' 2,249.0' 2,357.0 2,469.1 2,493.7 17 Federal Reserve Banks6 430.7 452.1 478.0 511.7 511.7 523.9 535.1 534.1 18 Private investors 3,414.6 3,334.0 3,233.9 2,880.4 2,880.4 2,892.9 2,722.6 2,779.7 19 Depository institutions 300.3 237.3 246.5 199.2' 199.2' 187.9' 190.1' 189.0 20 Mutual funds 321.6r 343.3r 335.4' 312.6' 312.6' 322.8' 333.2' 362.7 21 Insurance companies 176.6 141.7' 123.4' 110.2' 110.2' 101.9 94.8r 88.5 22 State and local treasuries7 239.3 269.3 266.8 236.2' 236.2' 224.0 216.6' 188.9 Individuals 23 Savings bonds 186.5 186.6 186.5' 184.8 184.8 184.8 185.5' 186.4 24 Pension funds 360.5 356.9r 349.7' 333.4' 333.4' 326.5 324.6' 314.7 25 Private 143.5 139.2' 138.5' 137.7' 137.7' 131.2 127.5' 122.7 26 State and Local 217.0r 217.7 211.2 195.7' 195.7' 195.3 197.1' 192.0 27 Foreign and international8 1,241.6 1,278.7 1,268.7 1,201.3' 1,201.3' 1,196.1 1,167.1 1,170.0 28 Other miscellaneous investors7-9 589.5 517.5' 444.1' 276.9' 276.9' 323.6' 195.8 n.a. 1. The U.S. Treasury first issued inflation-indexed securities during the first quarter of 8. Includes nonmarketable foreign series Treasury securities and Treasury deposit funds. 1997. Excludes Treasury securities held under repurchase agreements in custody accounts at the 2. Includes (not shown separately) securities issued to the Rural Electrification Administra- Federal Reserve Bank of New York. tion, depository bonds, retirement plan bonds, and individual retirement bonds. 9. Includes individuals, government-sponsored enterprises, brokers and dealers, bank 3. Nonmarketable series denominated in dollars, and series denominated in foreign cur- personal trusts and estates, corporate and noncorporate businesses, and other investors. rency held by foreigners. SOURCES. Data by type of security, U.S. Treasury Department, Monthly Statement of the 4. Held almost entirely by U.S. Treasury and other federal agencies and trust funds. Public Debt of the United States; data by holder, Federal Reserve Board of Governors, Flow 5. Data for Federal Reserve Banks and U.S. government agencies and trust funds are actual of Funds Accounts of the United States and U.S. Treasury Department, Treasury Bulletin, holdings; data for other groups are Treasury estimates. unless otherwise noted. 6. U.S. Treasury securities bought outright by Federal Reserve Banks, see Bulletin 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 • January 2002 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions' Millions of dollars, daily averages 2001 2001, week ending July Aug. Sept. Sept. 5 Sept. 12 Sept. 19 Sept. 26 Oct. 3 Oct. 10 Oct. 17 Oct. 24 Oct. 31 By type of security 1 U.S. Treasury bills 27,315 35,361 29,627 43,936 26,364 25,630 32,052 27,408 26,555 24,338 32,937 32,351 Treasury coupon securities by maturity 2 Three years or less 92,942 90,953 96,124 109,931 86,245 68,074 121,901 112,694 85,341 103,453 119,295 110,220 3 More than three but less than or equal to six years 65,463 69,717 76,258 89,143 72,391 59,108 89,673 82,377 85,233 84,124 78,869 87,813 4 More than six but less than or equal to eleven years 53,709 65,251 60,808r 73,266 60,446 49,789 65,141 65,974 63,938 52,884 50,928 66,353 5 More than eleven 16,682 16,847 18,764 18,649 14,560 14,955 23,304 27,558 19,610 16,814 22,759 34,983 6 Inflation-indexed2 2,433 1,491 1,653 2,004 882 1,690 2,305 1,505 4,143 2,141 2,760 2,168 Federal agency and governmentsponsored enterprises 7 Discount notes 55,388 57,141 70,486 65,764 61,515 91,437 63,187 63,505 60,364 61,487 60,286 63,560 Coupon securities by maturity 8 Three years or less 11,194 11,514 11,891 11,068 10,034 10,471 14,126 15,321 9,685 11,484 10,921 11,480 9 More than three years but less than or equal to six years 7,594 8,769 8,913 11,004 6,850 6.256 12,010 10,876 9,624 12,414 16,332 9,211 10 More than six years but less than or equal to eleven years .... 6,802 6,502 10,595 7,784 10,802 5.618 16,876 9,629 7,447 8,780 7,344 9,484 11 More than eleven years 966 1,332 1,010 1,120 851 511 1,486 1,353 1,604 856 1,443 1,989 12 Mortgage-backed 95,997 106,708 129,615 95,827 127,544 146,954 127,386 130,802 182,422 158,842 96,765 92,084 Corporate securities 13 One year or less 75,223 79,388 95,488 91,264 103,540 100,158 89,783 82,169 92,566 81,955 76,528 67,299 14 More than one year 16,050 17,259 14,825 11,256 17,494 6,834 20,774 16,829 20,319 18,470 23,482 22,731 By type of counterparty With interdealer broker 15 U.S. Treasury 120,946 133,598 125,189 155,757 126,807 86,088 146,105 136,037 130,368 133,046 144,839 150,216 16 Federal agency and governmentsponsored enterprises 10,018 11,532 11,668 13,601 11,812 7,763 14,836 11,222 10,412 11,344 13,737 12,120 17 Mortgage-backed 28,194 32,160 33,296 30,632 38,252 22,682 39,335 35,009 47,825 45.799 29,636 25,614 18 Corporate 1,012 813 793 568 792 369 1,399 563 1,042 612 590 558 With other 19 U.S. Treasury 137,597 146,023 158,044r 181,172 134,081 133,157 188,271 181,478 154,452 150,708 162,709 183,672 20 Federal agency and governmentsponsored enterprises 71,926 73,725 91,226 83,140 78,239 106,530 92,850 89,462 78,313 83,677 82,589 83,603 21 Mortgage-backed 67,804 74,548 96,318 65,195 89,292 124,272 88,051 95,793 134,598 113,044 67,129 66,470 22 Corporate 90,261 95,833 109,520 101,952 120,242 106,623 109,158 98,435 111,842 99,814 99,420 89,471 1. The figures represent purchases and sales in the market by the primary U.S. government 2. Outright Treasury inflation-indexed securities (TIIS) transactions are reported at princisecurities dealers reporting to the Federal Reserve Bank of New York. Outright transactions pal value, excluding accrued interest, where principal value reflects the original issuance par include all U.S. government, federal agency, government-sponsored enterprise, mortgage- amount (unadjusted for inflation) times the price times the index ratio. backed, and corporate securities scheduled for immediate and forward delivery, as well as all NOTE. Major changes in the report form filed by primary dealers induced a break in the U.S. government securities traded on a when-issued basis between the announcement and dealer data series as of the week ending July 4, 2001. Current weekly data may be found at the issue date. Data do not include transactions under repurchase and reverse repurchase (resale) Federal Reserve Bank of New York web site (http:www.newyorkfed.org/pihome/statistics) agreements. Averages are based on the number of trading days in the week. under the Primary Dealer heading. 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 July Aug. Sept. Sept. 5 Sept. 12 Sept. 19 Sept. 26 Oct. 3 Oct. 10 Oct. 17 Oct. 24 NET OUTRIGHT POSITIONS2 By type of security 1 U.S. Treasury bills 7,014 22,281 29,542 34,763 33,144 32,117 23,027 23,605 22,438 22,590 18,336 Treasury coupon securities by maturity 2 Three years or less -16,714 -17,171 -13,889 -16,343 -16,699 -11,810 -10,642 -15,222 -17,728 -20,821 -21,452 3 More than three years but less than or equal to six years -15,174 -11,233 -10,010 -12,472 -10,728 -8,352 -7,341 -13,247 -19,193 -18,954 -21,775 4 More than six but less than or equal to eleven years -18,610 -14,383 -13,631 -13,047 -16,749 -12,237 -12,253 -13,756 -7,642 -8,694 -6,976 More than eleven 10,090 8,486 10,701 8,674 7,952 11,599 13,389 11,769 11,197 9,745 9,651 6 Inflation-indexed 2,311 3,202 3,918 3,270 3,821 3,719 4,704 3,867 5,290 4,437 4,333 Federal agency and governmentsponsored enterprises 7 Discount notes 56,172 56,726 58,480 59,834 62,102 57,904 58,678 51,113 58,372 5577,,332277 4444,,449999 Coupon securities, by maturity X Three years or less 23,494 18,353 14,089 15,617 14,377 12,274 13,864 15,247 15,847 1166,,668800 1144,,995599 9 More than three years but less than or equal to six years -1,445 -1,895 -1,937 -1,009 -2,803 -1,383 -2,860 -933 2,786 695 1,728 10 More than six but less than or equal to eleven years 3,962 3,486 2,516 3,613 2,608 1,509 2,558 2,676 1,826 2,511 2,525 11 More than eleven 3,910 3,686 3,231 3,406 2,749 3,072 3,512 3,643 3,426 3,556 4,000 12 Mortgage-backed 12,840 12,198 7,506 10,235 6,258 9,386 4,691 7,914 9,534 8,753 18,528 Corporate securities 13 One year or less 15,038 15,756 18,108 18,295 24,806 13,109 14,605 21,033 19,301 19,157 17,640 14 More than one year 25,410 29,747 29,098 26,807 30,036 30,707 29,337 27,089 32,273 30,689 33,218 Securities in U.S. Treasury 15 Overnight and continuing 532,092 555,619 536,941 550,527 462,217 562,569 560,308 564,986 572,274 555588,,448855 555599,,001133 16 Term 751,848 688,830 660,031 655,695 681,161 658,858 684,893 587,017 611,781 665,616 687,012 Federal agency and government- 17 Overnight and continuing 113,178 116,534 112,778 116,321 94,158 117,976 117,469 123,630 117,524 121,157 121,265 18 Term 163,334 177,889 171,037 177,852 175,643 166,442 169,472 165,236 168,441 172,761 182,881 Mortgage-backed securities 19 Overnight and continuing 23,186 24,844 24,748 24,755 17,632 22,523 32,256 27,948 27,742 3300,,220033 2222,,337711 20 Term 199,969 220,176 208,146 210,910 208,702 208,175 207,964 203,982 202,805 211,124 226,802 Corporate securities 21 Overnight and continuing 34,288 33,956 34,799 37,503 31,939 34,091 34,264 38,602 36,535 3366,,776677 3366,,443333 22 Term 13,672 13,216 12,781 13,534 12,320 12,086 12,560 14,247 14,199 14,557 13,777 MEMO: Reverse repurchase agreements 23 Overnight and continuing 347,687 366,386 338,279 363,656 255,462 352,771 375,723 360,601 357,363 334488,,779988 335544,,991133 24 Term 1,004,418 976,454 929,665 934,150 951,686 930,595 949,738 848,766 871,048 937,926 981,485 Securities out U.S. Treasury 25 Overnight and continuing 521,688 565,431 556,068 565,442 497,109 558,008 585,170 593,206 592,422 578,417 561,541 26 Term 688,710 620,092 596,767 584,351 628,116 583,539 627,144 527,418 540,399 583,625 624,158 Federal agency and governmentsponsored enterprises 27 Overnight and continuing 215,274 213,057 200,899 223,566 146,391 217,450 212,883 218,018 217,125 222255,,113366 222244,,883377 28 Term 123,248 144,850 131,482 133,931 146,525 118,311 134,871 119,215 121,235 127,938 134,711 Mortgage-backed securities 29 Overnight and continuing 254,481 277,441 258,259 249,380 216,023 281,213 279,875 265,276 251,548 284,640 297,432 30 Term 101,794 110,410 112,292 108,835 116,875 102,984 120,774 110,038 121,481 138,676 147,547 Corporate securities 31 Overnight and continuing 81,804 82,922 80,776 86,574 63,717 81,965 86,246 91,730 91,857 91,312 93,083 32 Term 11,043 11,698 8,333 9,817 10,255 6,470 6,826 9,009 9,458 9,595 9,826 MEMO: Repurchase agreements 33 Overnight and continuing 940,177 1,006,856 965,270 997,155 812,032 1,008,659 1,022,890 1,016,816 1,003,565 11,,003333,,220088 11,,003377,,778833 34 Term 890,275 865,731 832,229 820,287 884,532 796,376 872,924 747,151 773,130 843,261 897,956 1. Data for positions and financing are obtained from reports submitted to the Federal 3. Figures cover financing U.S. government, federal agency, government-sponsored enter- Reserve Bank of New York by the U.S. government securities dealers on its published list of prise, mortgage-backed, and corporate securities. Financing transactions for Treasury primary dealers. Weekly figures are close-of-business Wednesday data. Positions for calendar inflation-indexed securities (TIIS) are reported in actual funds paid or received, except for days of the report week are assumed to be constant. Monthly averages are based on the pledged securities. TIIS that are issued as pledged securities are reported at par value, which number of calendar days in the month. is the value of the security at original issuance (unadjusted for inflation). 2. Net outright positions include all U.S. government, federal agency, government- NOTE. Major changes in the report form filed by primary dealers included a break in many sponsored enterprise, mortgage-backed, and corporate securities scheduled for immediate and series as of the week ending July 4, 2001. Current weekly data may be found at the Federal forward delivery, as well as U.S. government securities traded on a when-issued basis Reserve Bank of New York web site (http://www.newyorkfed.org/pihome/statistics) under the between the announcement and issue date. Primary Dealer heading. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic NonfinancialS tatistics • January 2002 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 2001 AAggeennccyy 11999977 11999988 11999999 22000000 Apr. May June July Aug. 1 Federal and federally sponsored agencies 1,022,609 1,296,477 1,616,492 1,851,632 1,946,961 1,967,515 1,986,146 2,009,746 2,028,562 2 Federal agencies 27,792 26,502 26,376 25,666 25,024 25,070 25,495 25,325 26,623 3 Defense Department1 6 6 6 6 6 6 6 6 6 4 Export-Import Bank2 3 552 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5 Federal Housing Administration4 102 205 126 255 315 201 204 210 224 6 Government National Mortgage Association certificates of participation5 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 7 Postal Service6 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 8 Tennessee Valley Authority 27,786 26,496 26,370 25,660 25,018 25,064 25,489 25,319 26,617 9 United States Railway Association6 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 Federally sponsored agencies7 994,817 1,269,975 1,590,116 1,825,966 1,921,937 1,942,445 1,960,651 1,984,421 2,001,939 11 Federal Home Loan Banks 313,919 382,131 529,005 594,404 595,562 592,406 595,148 601,490 599,070 12 Federal Home Loan Mortgage Corporation 169,200 287,396 360,711 426,899 478,447 490,442 496,711 508,944 515,671 13 Federal National Mortgage Association 369,774 460,291 547,619 642,700 682,500 693,600 702,300 706,800 718,000 14 Farm Credit Banks8 63,517 63,488 68,883 74,181 74,456 75,363 76,330 76,307 76,264 15 Student Loan Marketing Association' 37,717 35,399 41,988 45,375 48,468 48,255 47,687 48,427 50,356 16 Financing Corporation1" 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 39,065 42,837 38,235 37,510 37,789 Lending to federal and federally sponsored agencies 20 Export-Import Bank3 552 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 21 Postal Service6 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 22 Student Loan Marketing Association n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 23 Tennessee Valley Authority n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 24 United States Railway Association6 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Other lending14 25 Farmers Home Administration 13,530 9,500 6,665 5,275 5,155 5,540 5,155 5,155 5,155 26 Rural Electrification Administration 14,898 14,091 14,085 13,126 13,371 12,989 13,381 13,483 13,602 27 Other 20,110 20,538 21,402 22,174 20,539 24,308 19,699 18,872 19,032 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 claims. Once issued, these securities may be sold privately on the securities market. Reform, Recovery, and Enforcement Act of 1989, undertook its first borrowing in October 5. Certificates of participation issued before fiscal year 1969 by the Government National 1989. Mortgage Association acting as trustee for the Farmers Home Administration; the Department 13. The FFB, which began operations in 1974, is authorized to purchase or sell obligations of Health, Education, and Welfare; the Department of Housing and Urban Development; the issued, sold, or guaranteed by other federal agencies. Because FFB incurs debt solely for the Small Business Administration; and the Veterans Administration. purpose of lending to other agencies, its debt is not included in the main portion of the table to 6. Off-budget. avoid double counting. 7. Includes outstanding noncontingent liabilities; notes, bonds, and debentures. Includes 14. Includes FFB purchases of agency assets and guaranteed loans; the latter are loans Federal Agriculture Mortgage Corporation; therefore, details do not sum to total. Some data guaranteed by numerous agencies, with the amounts guaranteed by any one agency generally are estimated. being small. The Farmers Home Administration entry consists exclusively of agency assets, 8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, which is whereas the Rural Electrification Administration entry consists of both agency assets and shown on line 17. guaranteed loans. 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 2001 TTyyppee ooff iissssuuee oorr iissssuueerr,, oorr uussee 11999988 11999999 22000000 Mar. Apr. May June July Aug. Sept. Oct. 1 All issues, new and refunding1 262,342 215,427 180,403 24,495 16,985 26,248 29,298 19,232 21,152 13,159 30,446 By type of issue 2 General obligation 87,015 73,308 64,475 7,668 6,890 8,385 9,691 5,836 8,796 3,926 14,302 3 Revenue 175,327 142,120 115,928 16,827 10,094 17,863 19,606 13,396 12,356 9,233 16,144 By type of issuer 4 State 23,506 16,376 19,944 1,893 1,900 3,123 2,905 2,029 2,713 1,504 6,008 5 Special district or statutory authority2 178,421 152,418 111,695 17,280 113,344 17,281 20,672 11,784 12,351 9,137 17,382 6 Municipality, county, or township 60,173 46,634 39,273 5,323 3,740 5,845 5,721 5,419 6,088 2,518 7,056 7 Issues for new capital 160,568 161,065 154,257 15,387 12,264 20,002 20,044 15,015 13,550 10,110 21,249 By use of proceeds 8 Education 36,904 36,563 38,665 5,343 3,731 5,714 6,460 3,379 2,950 3,017 4,279 9 Transportation 19,926 17,394 19,730 1,219 1,381 2,522 1,258 3,160 1,669 1,195 1,587 10 Utilities and conservation 21,037 15,098 11,917 1,677 1,447 2,969 3,191 1,055 1,228 1,025 2,324 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 7,122 396 436 422 443 508 708 663 688 13 Other purposes 42,450 47,896 47,309 4,368 3,010 4,736 5,047 3,803 4,524 1,732 9,158 1. Par amounts of long-term issues based on date of sale. SOURCE. Securities Data Company beginning January 1990; Investment Dealer's Digest 2. Includes school districts. before then. 1.46 NEW SECURITY ISSUES US. Corporations Millions of dollars 2001 TTyyppee ooff iissssuuee,, ooffffeerriinngg,, 11999988 11999999 22000000 oorr iissssuueerr Feb. Mar. Apr. May June July Aug.r Sept. 1 All issues' 1,128,491 1,072,866 942,198 96,206 139,267 92,778 164,563 122,773 93,451 97,944 89,855 2 Bonds2 1,001,736 941,298 807,281 88,806 127,956 86,274 154,623 102,476 84,872 89,990 84,509 By type of offering 3 Sold in the United States 923,771 818,683 684,484 86,146 118,779 81,156 146,164 96,382 79,508 86,759 80,223 4 Sold abroad 77,965 122,615 122,798 2,660 9,177 5,117 8,459 6,094 5,364 3,231 4,286 MEMO 5 Private placements, domestic n.a. n.a. n.a. 1,897 652 0 2,563 3,146 12 48 0 By industry group 6 Nonfinancial 307,711 293,963 242,452 34,604 44.385 33,549 67,142 34,996 18,904 28,546 31,920 7 Financial 694,025 647,335 564,829 54,201 83,571 52,725 87,481 67,480 65,968 61,443 52,589 8 Stocks3 182,055 223,968 283,717 7,400 11,311 6,504 9,940 20,297 8,579 7,954 5,346 By type of offering 9 Public 126,755 131,568 134,917 7,400 11,311 6,504 9,940 20,297 8,579 7,954 5,346 10 Private placement4 55,300 92,400 148,800 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By industry group 11 Nonfinancial 74,113 110,284 118,369 4,463 7,718 4,822 6,809 16,630 4,237 5,487 81 12 Financial 52,642 21,284 16,548 2,937 3,593 1,682 3,131 3,667 4,342 2,467 5,265 1. Figures represent gross proceeds of issues maturing in more than one year; they are the 2. Monthly data include 144(a) offerings. principal amount or number of units calculated by multiplying by the offering price. Figures 3. Monthly data cover only public offerings. exclude secondary offerings, employee stock plans, investment companies other than closed- 4. Data are not available. end, intracorporate transactions, and Yankee bonds. Stock data include ownership securities SOURCE. Securities Data Company and the Board of Governors of the Federal Reserve issued by limited partnerships. System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Nonfinancial Statistics • January 2002 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets1 Millions of dollars 2001 IItteemm 11999999 22000000 Mar. Apr. May June July Aug. Sept.' Oct. 1 Sales of own shares2 1,791,894 2,279,315 162,548 152,327 158,361 139,270 138,428 142,577 105,038 153,395 2 Redemptions of own shares 1,621,987 2,057,277 175,633 130,454 132,574 125,097 129,021 131,408 127,995 137,565 3 Net sales3 169,906 222,038 -13,085 21,873 25,787 14,173 9,407 11,169 -22,957 15,830 4 Assets4 5,233,191 5,123,747 4,594,182 4,910,568 4,956,982 4,888,874 4,825,144 4,635,477 4,253,850 4,376,430 5 Cash5 219,189 277,386 241,518 247,169 237,487 240,199 240,392 240,329 223,077 227,592 6 Other 5,014,002 4,846,361 4,352,664 4,663,399 4,719,495 4,648,675 4,584,752 4,395,148 4,030,773 4,148,838 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 US. Treasury securities and other short-term debt securities. 2. Excludes reinvestment of net income dividends and capital gains distributions and share SOURCE. Investment Company Institute. Data based on reports of membership, which issue of conversions from one fund to another in the same group. comprises substantially all open-end investment companies registered with the Securities and 3. Excludes sales and redemptions resulting from transfers of shares into or out of money Exchange Commission. Data reflect underwritings of newly formed companies after their market mutual funds within the same fund family. initial offering of securities. 1.48 CORPORATE PROFITS AND THEIR DISTRIBUTION Billions of dollars; quarterly data at seasonally adjusted annual rates 1999 2000 2001 AAccccoouunntt 11999988 11999999 22000000 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 1 Profits with inventory valuation and capital consumption adjustment 777.4 825.2 876.4 857.6 870.3 892.8 895.0 847.6 789.8 759.8 n.a. 2 Profits before taxes 721.1 776.3 845.4 825.0 844.9 862.0 858.3 816.5 755.7 738.3 n.a. 3 Profits-tax liability 238.8 253.0 271.5 267.3 277.0 280.4 274.9 253.5 236.8 228.0 n.a. 4 Profits after tax 482.3 523.3 573.9 557.7 567.8 581.6 583.4 563.0 518.9 510.3 n.a. 5 Dividends 348.7 343.5 379.6 349.6 361.5 373.7 386.2 397.0 405.2 412.3 420.4 6 Undistributed profits 133.6 179.8 194.3 208.1 206.3 207.9 197.2 165.9 113.7 98.0 n.a. 7 Inventory valuation 18.3 -2.9 -12.4 -21.0 -23.8 -14.8 -3.6 -7.3 -1.9 -8.8 n.a. 8 Capital consumption adjustment 38.0 51.7 43.4 53.6 49.2 45.5 40.4 38.4 36.0 30.3 12.6 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 2000 2001 AAccccoouunntt 11999988'' 11999999'' 22000000'' QL' Q2' Q3' Q4' QL' Q2' Q3 ASSETS 1 Accounts receivable, gross2 742.1 845.4 958.6 883.2 921.5 939.9 958.6 954.4 988.7 967.7 2 Consumer 280.0 304.4 327.9 311.4 321.8 331.5 327.9 319.2 324.5 329.2 3 Business 340.9 395.1 458.4 422.7 441.9 443.0 458.4 459.1 481.9 451.1 4 Real estate 121.2 145.8 172.3 149.1 157.7 165.4 172.3 176.1 182.3 187.4 5 LESS: Reserves for unearned income 62.7 61.4 69.7 62.4 66.1 68.3 69.7 69.9 61.5 60.8 6 Reserves for losses 14.7 14.7 16.7 15.2 15.7 15.6 16.7 17.2 17.4 18.0 7 Accounts receivable, net 664.7 769.3 872.2 805.6 839.6 856.1 872.2 867.3 909.7 888.9 8 All other 335.8 406.6 461.5 413.8 419.4 442.3 461.5 474.8 459.0 478.2 9 Total assets 1,000.5 1,175.9 1,333.7 1,219.4 1,259.0 1,298.4 1,333.7 1,342.1 1,368.7 1,367.1 LIABILITIES AND CAPITAL 10 Bank loans 26.5 35.4 35.9 28.8 32.8 35.7 35.9 41.6 45.3 44.5 11 Commercial paper 233.3 230.4 238.8 233.0 224.3 218.8 238.8 180.9 181.6 171.0 Debt 12 Owed to parent 34.3 87.8 102.5 107.2 95.1 100.0 102.5 97.2 93.4 90.8 13 Not elsewhere classified 365.6 429.9 502.2 446.6 483.7 507.3 502.2 533.8 542.1 555.9 14 All other liabilities 216.0 237.8 301.8 264.4 277.5 288.1 301.8 325.1 336.3 327.7 15 Capital, surplus, and undivided profits 124.7 154.5 152.5 139.4 145.7 148.5 152.5 163.5 170.0 177.3 16 Total liabilities and capital 1,000.5 1,175.9 1,333.7 1,219.4 1,259.0 1,298.4 1,333.7 1,342.1 1,368.7 1,367.1 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 Markets and Corporate Finance A33 1.52 DOMESTIC FINANCE COMPANIES Owned and Managed Receivables1 Billions of dollars, amounts outstanding 2001 TTyyppee ooff ccrreeddiitt 11999988rr 11999999rr 22000000'' Apr.' May' June' July' Aug.' Sept. Seasonally adjusted 1 Total 904.4 1,027.0 1,181.3 1,218.7 1,221.7 1,235.7 1,242.4 1,244.1 1,244.3 2 Consumer . 369.1 409.0 464.0 488.4 485.9 490.4 491.6 497.9 496.0 3 Real estate 150.3 174.0 198.9 207.8 210.0 208.5 212.7 214.9 213.1 4 Business . . 385.0 444.0 518.4 522.6 525.7 536.8 538.1 531.2 535.2 Not seasonally adjusted 5 Total 912.7 1,036.4 1,192.1 1,220.5 1,224.6 1,241.8 1,237.2 1,238.3 1,239.5 6 Consumer 372.5 412.7 468.3 482.7 483.3 491.3 493.6 499.5 498.0 7 Motor vehicle loans 113.5 129.2 141.6 147.1 148.0 144.6 146.1 153.6 151.5 8 Motor vehicle leases 96.6 102.9 108.2 107.1 106.8 110.2 110.0 110.3 108.3 9 Revolving2 31.9 32.5 37.6 35.5 37.0 36.8 36.9 37.1 35.9 10 Other3 37.9 39.8 40.7 34.9 32.7 32.8 33.2 33.7 33.4 Securitized assets4 11 Motor vehicle loans 54.8 73.1 97.1 106.1 107.7 114.6 115.8 113.6 117.5 12 Motor vehicle leases 12.7 9.7 6.6 7.0 6.9 7.6 7.4 7.2 7.0 13 Revolving 5.5 6.7 19.6 29.1 28.4 29.1 29.1 28.9 29.3 14 Other 19.6 18.8 17.1 16.0 15.7 15.5 15.2 15.2 15.0 15 Real estate 150.3 174.0 198.9 207.8 210.0 208.5 212.7 214.9 213.1 16 One- to four-family 90.0 108.2 130.6 139.0 141.5 140.1 144.7 146.9 144.8 17 Other 31.2 37.6 41.7 42.3 42.4 42.2 42.0 42.2 42.6 Securitized real .estate assets4 18 One- to four-family 29.0 28.0 24.7 23.8 23.6 23.4 23.2 23.0 22.8 19 Other .1 .2 1.9 2.6 2.6 2.8 2.8 2.8 2.9 20 Business 389.9 449.6 525.0 530.0 531.3 542.0 531.0 523.9 528.4 21 Motor vehicles 64.8 69.4 75.5 71.1 70.8 83.9 79.7 56.9 57.8 22 Retail loans 19.5 21.1 18.3 17.6 17.4 16.6 16.6 16.7 16.7 23 Wholesale loans5 32.8 34.8 39.7 35.4 35.3 49.3 45.0 22.2 23.6 24 Leases 12.5 13.6 17.6 18.1 18.1 18.1 18.0 18.0 17.5 25 Equipment 212.2 238.7 283.5 288.1 291.4 292.6 288.0 290.0 288.2 26 Loans 59.2 64.5 70.2 72.3 73.1 76.1 74.0 75.2 76.8 27 Leases 153.0 174.2 213.3 215.8 218.3 216.4 214.0 214.8 211.4 28 Other business receivables6 63.9 87.0 99.4 102.7 101.8 105.4 103.7 102.9 105.1 Securitized assets4 29 Motor vehicles 29.2 31.5 37.8 40.3 40.0 31.4 30.6 45.2 48.0 30 Retail loans 2.6 2.9 3.2 3.1 3.0 3.1 2.9 2.8 2.6 31 Wholesale loans 24.7 26.4 32.5 34.6 34.3 25.8 25.1 39.8 42.8 32 Leases 1.9 2.1 2.2 2.6 2.7 2.6 2.6 2.6 2.7 33 Equipment 13.0 14.6 23.1 22.2 21.6 22.6 23.0 22.7 23.1 34 Loans 6.6 7.9 15.5 14.4 13.9 15.2 15.2 14.8 15.1 35 Leases 6.4 6.7 7.6 7.8 7.7 7.5 7.8 7.9 8.0 36 Other business receivables6 6.8 8.4 5.6 5.7 5.7 6.0 6.0 6.2 6.1 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 subsidibreakdowns have been obtained for some components. In addition, previously unavailable aries 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 reclassificaton 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 • January 2002 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 2001 Apr. May June July Aug. Sept. Oct. Terms and yields in primary and secondary markets PRIMARY MARKETS Terms1 1 Purchase price (thousands of dollars) 195.2 210.7 234.5 240.8 241.4 250.6 242.9 241.5 246.6 242.9 2 Amount of loan (thousands of dollars) 151.1 161.7 177.0 181.5 181.4 188.7 182.7 181.3 184.3 181.2 3 Loan-to-price ratio (percent) 80.0 78.7 77.4 77.6 77.6 77.3 77.3 76.6 77.1 76.9 4 Maturity (years) 28.4 28.8 29.2 28.5 28.6 28.7 28.8 28.7 29.0 28.5 5 Fees and charges (percent of loan amount)2 .89 .77 .70 .71 .69 .66 .66 .61 .61 .67 Yield (percent per year) 6 Contract rate1 6.95 6.94 7.41 6.96 7.02 7.02 7.01 7.06 6.80 6.63 7 Effective rate1-3 7.08 7.06 7.52 7.07 7.12 7.12 7.11 7.15 6.89 6.73 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 6.53 6.61 6.55 6.49 6.29 6.03 5.86 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 414,515 523,941 610,122 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 12 FHA/VA insured 33,770 55,318 61,539 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 13 Conventional 380,745 468,623 548,583 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 14 Mortgage transactions purchased (during period) 188,448 195,210 154,231 24,015 16,825 24,430 26,082 22,111 16,016 20,020 Mortgage commitments (during period) 15 Issued7 193,795 187,948 163,689 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 16 To sell8 1,880 5,900 11,786 n.a. n.a. n.a. n.a. n.a. n.a. n.a. FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of periodf 17 Total 255,010 324,443 385,693 430,960 437,582 443,810 454,485 465,553 470,850 477,588 18 FHA/VA insured 785 1,836 3,332 2,878 2,785 2,738 2,689 2,643 2,597 2,553 19 Conventional 254,225 322,607 382,361 428,082 434,797 441,072 451,796 462,910 468,253 475,035 Mortgage transactions (during period) 20 Purchases 267,402 239,793 174,043 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 21 Sales 250,565 233,031 166,901 31,219 33,670 38,133 44,574 33,933 32,666 31,646 22 Mortgage commitments contracted (during period)9 281,899 228,432 169,231 32,758 39,897 37,312 43,788 34,087 31,140 41,346 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 by National Mortgage Association exclude swap activity. the Federal Housing Administration (FHA) for immediate delivery in the private secondary market. Based on transactions on first day of subsequent month. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate A3 5 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 2000 2001 TTyyppee ooff hhoollddeerr aanndd pprrooppeerrttyy 11999977 11999988 11999999 Q2 Q3 Q4 Ql Q2 1 All holders 5,195,235 5,707,172 6,343,995 6,615,662 6,767,922 6,914,156 7,036,854 7,253,938 By type of property 2 One- to four-family residences 3,966,639 4,351,496 4,780,203 4,970,215 5,095,720 5,201,362 5,293,734 5,452,224 3 Multifamily residences 301,817 333,873 378,811 398,667 407,112 417,555 426,993 442,399 4 Nonfarm, nonresidential 836,479 925,297 1,082,019 1,140,329 1,157,134 1,186,403 1,206,253 1,246,425 5 Farm 90,300 96,506 102,962 106,451 107,957 108,836 109,873 112,889 By type of holder 6 Major financial institutions 2,084,000 2,195,869 2,396,265 2,550,401 2,606,592 2,620,886 2,664,837 2,714,965 7 Commercial banks2 1,245,334 1,338,273 1,496,844 1,615,794 1,650,294 1,661,411 1,688,673 1,727,255 8 One- to four-family 745,777 798,009 880,208 949,223 968,831 966,502 978,144 999,307 9 Multifamily 50,705 54,174 67,666 75,795 77,031 77,821 79,890 80,542 10 Nonfarm, nonresidential 421,865 457,054 517,130 557,059 570,513 583,071 596,405 612,247 11 Farm 26,987 29,035 31,839 33,717 33,919 34,016 34,234 35,159 12 Savings institutions3 631,826 643,957 668,634 701,992 721,563 723,534 741,114 751,660 13 One- to four-family 520,782 533,895 549,046 578,612 595,518 595,053 608,289 616,506 14 Multifamily 59,540 56,847 59,168 59,174 60,077 61,094 62,666 63,193 15 Nonfarm, nonresidential 51,150 52,798 59,945 63,688 65,437 66,852 69,589 71,378 16 Farm 354 417 475 518 531 535 569 583 17 Life insurance companies 206,840 213,640 230,787 232,615 234,735 235,941 235,050 236,050 18 One- to four-family 7,187 6,590 5,934 5,242 4,907 4,903 4,877 4,876 19 Multifamily 30,402 31,522 32,818 33,150 33,478 33,681 33,557 33,553 20 Nonfarm, nonresidential 158,779 164,004 179,048 180,856 182,646 183,757 183,078 184,084 21 Farm 10,472 11,524 12,987 13,367 13,704 13,600 13,538 13,537 22 Federal and related agencies 286,194 293,602 322,132 332,568 336,575 343,962 346,276 355,218 23 Government National Mortgage Association 8 7 7 7 6 6 6 6 24 One- to four-family 8 7 7 7 6 6 6 6 25 Multifamily 0 0 0 0 0 0 0 0 26 Farmers Home Administration4 41,195 40,851 73,871 72,896 73,009 73,323 73,361 73,206 27 One- to four-family 17,253 16,895 16,506 16,435 16,444 16,372 16,297 16,153 28 Multifamily 11,720 11,739 11,741 11,729 11,734 11,733 11,725 11,720 29 Nonfarm, nonresidential 7,370 7,705 41,355 40,554 40,665 41.070 41,247 41,262 30 Farm 4,852 4,513 4,268 4,179 4,167 4,148 4,093 4,072 31 Federal Housing and Veterans' Administrations 3,811 3,674 3,712 3,845 3,395 3,507 2,873 2,918 32 One- to four-family 1,767 1,849 1,851 1,832 1,327 1,308 1,276 1,267 33 Multifamily 2,044 1,825 1,861 2,013 2,068 2,199 1,597 1,651 34 Resolution Trust Corporation -278 24 -10 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 72 82 45 50 24 40 One- to four-family 117 58 25 12 13 7 8 4 41 Multifamily 140 70 29 14 16 9 10 5 42 Nonfarm, nonresidential 467 233 98 46 53 29 32 15 43 Farm 0 0 0 0 0 0 0 0 44 Federal National Mortgage Association 161,308 157,675 151,500 153,507 152,815 155,363 156,294 159,221 45 One- to four-family 149,831 147,594 141,195 142,478 141,786 144,150 145,014 147,730 46 Multifamily 11,477 10,081 10,305 11,029 11,029 11,213 11,280 11,491 47 Federal Land Banks 30,657 32,983 34,187 34,830 35,549 36,326 37,072 38,686 48 One- to four-family 1,804 1,941 2,012 2,049 2,092 2,137 2,181 2,276 49 Farm 0 0 0 0 0 0 0 0 50 Federal Home Loan Mortgage Corporation 48,454 57,085 56,676 56,972 57,046 59,240 60,110 61,542 51 One- to four-family 42,629 49,106 44,321 42,892 42,138 42,871 42,771 42,537 52 Multifamily 5,825 7,979 12,355 14,080 14,908 16,369 17,339 19,005 53 Mortgage pools or trusts5 2,232,848 2,581,969 2,947,760 3,035,546 3,116,180 3,232,338 3,303,742 3,450,274 54 Government National Mortgage Association 536,879 537,446 582,263 590,708 602,628 611,553 601,534 598,106 55 One- to four-family 523,225 522,498 565,189 572,661 584,152 592,624 581,754 577,315 56 Multifamily 13,654 14,948 17,074 18,047 18,476 18,929 19,780 20,792 57 Federal Home Loan Mortgage Corporation 579,385 646,459 749,081 768,641 790,891 822,310 833,616 873,750 58 One- to four-family 576,846 643,465 744,619 763,890 786,007 816,602 827,769 867,924 59 Multifamily 2,539 2,994 4,462 4,751 4,884 5,708 5,847 5,826 60 Federal National Mortgage Association 709,582 834,517 960,883 995,815 1,020,828 1,057,750 1,099,049 1,163,978 61 One- to four-family 687,981 804,204 924,941 957,584 981,206 1,016,398 1,055,412 1,116,534 62 Multifamily 21,601 30,313 35,942 38,231 39,622 41,352 43,637 47,444 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 407,000 563,546 655,533 680,382 701,833 740,725 769,543 814,440 69 One- to four-family6 310,659 405,153 455,021 464,593 477,899 499,834 523,300 539,200 70 Multifamily 20,907 33,754 42,226 44,413 46,142 49,513 50,749 56,974 71 Nonfarm, nonresidential 75,434 124,639 158,287 171,376 177,792 191,378 195,494 218,266 72 Farm 0 0 0 0 0 0 0 0 73 Individuals and others7 592,193 635,732 677,838 697,147 708,575 716,971 721,999 733,482 74 One- to four-family 380,736 419,278 447,532 462,493 478,944 486,664 490,345 501,192 75 Multifamily 71,263 77,617 82,932 86,015 87,423 87,714 88,699 89,989 76 Nonfarm, nonresidential 121,415 118,863 126,156 126,750 120,028 120,245 120,408 119,172 77 Farm 18,779 19,974 21,217 21,889 22,179 22,348 22,547 23,129 1. Multifamily debt refers to loans on structures of five or more units. 6. Includes securitized home equity loans. 2. Includes loans held by nondeposit trust companies but not loans held by bank trust 7. Other holders include mortgage companies, real estate investment trusts, state and local departments. credit agencies, state and local retirement funds, noninsured pension funds, credit unions, and 3. Includes savings banks and savings and loan associations. finance companies. 4. FmHA-guaranteed securities sold to the Federal Financing Bank were reallocated from SOURCE. Based on data from various institutional and government sources. Separation of FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 because of accounting nonfarm mortgage debt by type of property, if not reported directly, and interpolations and changes by the Farmers Home Administration. extrapolations, when required for some quarters, are estimated in part by the Federal Reserve. 5. Outstanding principal balances of mortgage-backed securities insured or guaranteed by Line 69 from Inside Mortgage Securities and other sources. the agency indicated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Nonfinancial Statistics • January 2002 1.55 CONSUMER CREDIT1 Millions of dollars, amounts outstanding, end of period 2001 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11999988 11999999 22000000 Apr.r May' June' July' Aug.' Sept. Seasonally adjusted 1 Total 1,315,797' l,413,564r 1,557,931' 1,610,889 1,617,041 1,616,293 1,615,308 1,619,629 1,621,615 2 Revolving . . . 560,155' 594,339' 663,170' 695.830 698,536 699,651 694,785 693,486 692,732 3 Nonrevolving2 755,642' 819,225' 894,761' 915,059 918,505 916,642 920,524 926,143 928,882 Not seasonally adjusted 4 Total l,346,596r l,446,127r 1,593,051' 1,596,536 1,602,128 1,608,104 1,607,705 1,621,982 1,622,820 By major holder 5 Commercial banks 508,932 499,758 541,470 540,740 543,048 540,213 535,459 537,724 535,255 6 Finance companies 183,345' 201,549' 219,783' 217,481 217,697 214,271 216,191 224,310 220,849 7 Credit unions 155,406 167,921 184,434 184,089 185,683 186,357 185,081 186,274 185,732 8 Savings institutions 51,611 61,527 64,557 65,453 65,396 65.340 66,584 67,828 69,072 9 Nonfinancial business 74,877 80,311 82,662 71,490 69,963 68,013 65,228 63,310 60,212 10 Pools of securitized assets5 372,425 435,061 500,145 517,282 520,340 533,91 1 539,164 542,536 551,700 By major type of credit* 11 Revolving 586,163' 621,914' 692,955' 688,633 691,141 693,662 687,439 689,874 688,512 12 Commercial banks 210,346 189,352 218,063 214,683 216,268 213,014 208,852 206,279 203,126 13 Finance companies 31,944' 32,483' 37,561' 35,477 37,033 36,848 36,949 37,082 35,901 14 Credit unions 19,930 20,641 22,226 21,054 21,207 21,268 21,799 22,195 21,879 15 Savings institutions 12,450 15,838 16,560 16,788 16,589 16,389 16,568 16,746 16,925 16 Nonfinancial business 39,166 42.783 42,430 33,815 32,690 31,366 29,314 27,603 25,207 17 Pools of securitized assets3 272,327 320,817 356,114 366,815 367,354 374,776 373,958 379,968 385,474 18 Nonrevolving 760,433' 824,213' 900,095' 907,904 910,987 914,442 920,267 932,108 934,308 19 Commercial banks 298,586 310,406 323,407 326,057 326,780 327,199 326,607 331,445 332,129 20 Finance companies 151,401' 169,066' 182,221' 182,004 180,664 177,422 179,242 187,228 184,948 21 Credit unions 135,476 147,280 162.208 163,035 164,476 165,089 163,282 164,079 163,853 22 Savings institutions 39,161 45,689 47,997 48,665 48,807 48,951 50,016 51,082 52,147 23 Nonfinancial business 35,711 37,528 40,232 37,674 37,274 36,647 35,914 35,707 35,005 24 Pools of securitized assets3 100,098 114,244 144,031 150.468 152,986 159,134 165,207 162,567 166,226 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 2001 IItteemm 11999988 11999999 22000000 Mar. Apr. May June July Aug. Sept. INTEREST RATES Commercial banks2 1 48-month new car 8.72 8.44 9.34 n.a. n.a. 8.67 n.a. n.a. 8.31 n.a. 2 24-month personal 13.74 13.39 13.90 n.a. n.a. 13.28 n.a. n.a. 13.25 n.a. Credit card plan 3 All accounts 15.71 15.21 15.71 n.a. n.a. 15.07 n.a. n.a. 14.60 n.a. 4 Accounts assessed interest 15.59 14.81 14.91 n.a. n.a. 14.63 n.a. n.a. 14.64 n.a. Auto finance companies 5 New car 6.30 6.66 6.61 6.80 6.80 6.56 6.15 6.20 6.41 5.42 6 Used car 12.64 12.60 13.55 13.19 12.82 12.57 12.05 11.79 12.06 12.01 OTHER TERMS3 Maturity (months) 7 New car 52.1 52.7 54.9 55.6 56.3 57.0 57.2 57.3 57.7 57.2 8 Used car 53.5 55.9 57.0 58.0 57.9 57.8 57.6 57.6 57.6 57.6 Loan-to-value ratio 9 New car 92 92 92 91 91 92 91 91 91 92 10 Used car 99 99 99 100 100 100 100 100 100 101 Amount financed (dollars) 11 New car 19,083 19,880 20,923 22.131 21,914 21,871 22,124 22,687 22,591 23,049 12 Used car 12,691 13,642 14,058 14,214 14,347 14,350 14,586 14,571 14,321 14,408 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 2000 2001 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr Qi Q2 Q3 Q4 QI' Q2' Q3 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .. 705.9 733.6r 805.5r l,048.8r l,099.8r 95i.r 978.2' 792.0r 112.1' 1,006.5 1,018.6 1,275.5 By sector and instrument ?, Federal government 144.4 145.0 23.1 -52.6 -71.2 -217.2 -408.7 -226.2 -331.3 -4.3 -256.0 255.7 3 Treasury securities 142.9 146.6 23.2 -54.6 -71.0 -215.2 -410.5 -223.8 -330.2 -2.1 -257.1 256.0 4 Budget agency securities and mortgages 1.5 -1.6 -.1 2.0 -.2 -2.1 1.8 -2.4 -1.2 -2.2 1.1 -.4 5 Nonfederal 561.5 588.6r 782.4' 1,101.5' 1,171.1' 1,168.4' 1,386.9' 1,018.2' 1,103.5' 1,010.9 1,274.6 1,019.8 By instrument Commercial paper 18.1 -.9 13.7 24.4 37.4 29.8 110.4 56.1 -4.0 -207.2 -141.5 -74.1 7 Municipal securities and loans -48.2 2.6 71.4 96.8 68.2 20.0 30.1 31.0 60.1 110.7 112.4 56.0 8 Corporate bonds 91.1 116.3 150.5 218.7 229.9 186.2 153.8 168.8' 175.6 400.9 428.0 187.7 9 Bank loans n.e.c 103.7 70.4' 106.4' 108.1' 82.6' 139.5 166.5' 47.0' 59.3' -5.9 -153.2 -9.9 10 Other loans and advances 67.2 28.7' 59.5' 82.1' 57.1' 140.1' 124.2' 16.5' 125.2 -12.0 117.7 78.4 11 Mortgages 190.6 280.4' 323.3' 496.4' 596.3' 502.9' 659.6' 570.7' 551.6' 564.6 837.7 760.6 I? Home 179.1 245.7' 258.3' 389.9' 435.2' 361.9' 490.3' 441.9' 395.9' 434.3 622.9 544.7 13 Multifamily residential 4.5 9.4' 7.5' 23.8 40.5' 29.2' 48.0' 28.8' 41.7 39.3 55.5 57.7 14 Commercial 5.7 22.5 54.4' 76.1' 114.8' 104.4' 111.2' 93.4' 112.0' 86.8 146.8 151.6 15 Farm 1.4 2.7 3.1 6.5 5.8 7.4 10.1 6.5 2.0' 4.2 12.4 6.5 16 Consumer credit 138.9 91.3' 57.5' 75.0' 99.5' 149.9' 142.1' 128.2' 135.6' 159.9 73.6 21.3 By borrowing sector 17 Household 339.3 343.8' 332.7' 467.2' 517.1' 526.9' 624.3' 554.5' 514.0' 554.4 667711..22 661166..22 18 Nonfinancial business 273.7 251.6' 393.6' 554.0' 601.6' 628.5' 744.4' 440.0' 535.8' 352.6 494.7 360.6 19 Corporate 224.9 179.4' 292.7' 406.3' 440.8' 479.7' 550.2' 303.7' 388.8' 225.2 354.3 248.9 20 Nonfarm noncorporate 46.1 67.3' 94.7' 139.7' 155.4' 135.0' 184.5' 129.1' 134.2 121.3 130.6 108.6 71 Farm 2.7 4.9 6.2 8.0 5.5 13.8 9.7 7.2 12.8' 6.0 9.8 3.1 22 State and local government -51.5 -6.8 56.1 80.3 52.3 12.9 18.2 23.8 53.7 103.9 108.7 43.0 23 Foreign net borrowing in United States 78.5 88.4 71.8 43.4 27.9 120.3' -7.9' 88.6' 66.8' -6.9 -57.2 -126.8 24 Commercial paper 13.5 11.3 3.7 7.8 16.3 57.8 12.0 7.0 50.1 -25.4 -5.6 -26.5 25 Bonds 57.1 67.0 61.4 34.9 16.8 47.6' -27.3' 71.4' 9.0' 17.1 -15.9 -101.4 26 Bank loans n.e.c 8.5 9.1 8.5 6.7 .5 15.4 5.7 11.9 12.2 13.0 -31.0 4.4 27 Other loans and advances -.5 1.0 -1.8 -6.0 -5.7 -.5 1.7 -1.7 -4.6 -11.6 -4.7 -3.4 28 Total domestic plus foreign 784.5 822.0' 877.3r l,092.2r 1,127.8' l,071.4r 970.3r 880.6r 838.9r 999.6 961.5 1,148.7 Financial sectors 29 Total net borrowing by financial sectors 454.0 550.1r 662.2' 1,087.2' l,084.4r 608.0r 897.1r 794.0r 963.1r 864.2 795.7 1,086.3 By instrument 30 Federal government-related 204.2 231.4 212.9 470.9 592.0 224.4 381.1 514.8 613.6 432.6 674.8 820.6 31 Government-sponsored enterprise securities 105.9 90.4 98.4 278.3 318.2 104.9 248.9 278.1 304.5 262.3 268.3 328.0 32 Mortgage pool securities 98.3 141.0 114.6 192.6 273.8 119.5 132.2 236.7 309.1 170.3 406.5 492.6 33 Loans from U.S. government .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 249.8 318.7' 449.3' 616.3' 492.5' 383.6' 516.1' 279.2' 349.5' 431.7 120.9 265.7 35 Open market paper 42.7 92.2 166.7 161.0 176.2 114.6 136.7 106.5 153.2 -134.6 -85.4 -85.6 36 Corporate bonds 195.9 178.1' 218.9' 310.1' 218.2' 171.8' 243.3' 205.0' 203.7' 438.9 186.8 309.6 37 Bank loans n.e.c 2.5 12.6 13.3' 30.1 -14.2' 3.2' 6.9' -6.7' -4.4 27.1 14.3 -8.1 38 Other loans and advances 3.4 27.9 35.6 90.2 107.1 87.0 119.2 -31.6 -4.8 107.8 -11.0 58.0 39 Mortgages 5.3 7.9 14.9 24.8 5.1 7.0 10.0 6.0 1.8 -7.5 16.2 -8.2 By borrowing sector 40 Commercial banking 22.5 13.0 46.1 72.9 67.2 78.3 99.3 43.4 18.8 114488..33 -15.8 6699..88 41 Savings institutions 2.6 25.5 19.7 52.2 48.0 57.5 69.0 -37.9 20.4 62.5 16.1 12.6 42 Credit unions -.1 .1 .1 .6 2.2 -2.9 .9 1.1 1.0 -.6 .8 1.5 43 Life insurance companies -.1 1.1 .2 .7 .7 -.7 -1.1 -.3 -.7 -2.4 ..11 3.5 44 Government-sponsored enterprises 105.9 90.4 98.4 278.3 318.2 104.9 248.9 278.1 304.5 262.3 226688..33 328.0 45 Federally related mortgage pools 98.3 141.0 114.6 192.6 273.8 119.5 132.2 236.7 309.1 170.3 406.5 492.6 46 Issuers of asset-backed securities (ABSs) 142.4 150.8 202.2 321.4 223.4 175.0 146.0 156.2 307.9 295.8 172.3 303.2 47 Finance companies 50.2 50.6' 57.8' 57.1' 70.3' 61.1' 139.4' 98.1' 26.1' -72.8 64.1 22.1 48 Mortgage companies -2.2 4.1 -4.6 1.6 .2 -3.0 2.7 -.3 1.0 .7 .6 ..88 49 Real estate investment trusts (REITs) 4.5 11.9 39.6 62.7 6.3 11.5 9.8 -2.4 -8.1 -6.1 10.5 --1100..22 50 Brokers and dealers -5.0 -2.0 8.1 7.2 -17.2 44.4 -.7 25.4 -6.6 -23.9 35.7 12.3 51 Funding corporations 34.9 63.8' 79.9' 40.0' 91.5' -37.5' 50.6' -4.2' -10.4' 30.1 -163.6 -150.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • January 2002 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS '—Continued Billions of dollars; quarterly data at seasonally adjusted annual rates 2000 2001 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999955 11999966rr 11999977rr 11999988'' 11999999'' Ql' Q2' Q3' Q4' Ql' Q2' Q3 All sectors 5522 TToottaall nneett bboorrrroowwiinngg,, aallll sseeccttoorrss 1,238.5 1,372.1 1,539.5 2,179.4 2,212.2 1,679.4 1,867.4 1,674.6 1,802.0 1,863.8 1,757.2 2,235.0 5533 OOppeenn mmaarrkkeett ppaappeerr 74.3 102.6 184.1 193.1 229.9 202.1 259.1 169.7 199.3 -367.2 -232.5 -186.3 5544 UU..SS.. ggoovveerrnnmmeenntt sseeccuurriittiieess 348.6 376.4 236.0 418.3 520.7 7.2 -27.6 288.6 282.2 428.2 418.8 1,076.3 5555 MMuunniicciippaall sseeccuurriittiieess —48.2 2.6 71.4 96.8 68.2 20.0 30.1 31.0 60.1 110.7 112.4 56.0 5566 CCoorrppoorraattee aanndd ffoorreeiiggnn bboonnddss 344.1 361.3 430.8 563.7 465.0 405.6 369.8 445.2 388.3 856.9 598.9 395.9 5577 BBaannkk llooaannss nn..ee..cc 114.7 92.1 128.2 145.0 68.9 158.0 179.2 52.2 67.1 34.1 -170.0 -13.6 5588 OOtthheerr llooaannss aanndd aaddvvaanncceess 70.1 57.7 93.2 166.3 158.5 226.6 245.1 -16.8 115.8 84.2 102.0 133.0 5599 MMoorrttggaaggeess 196.0 288.2 338.2 521.2 601.4 509.9 669.6 576.7 553.5 557.1 853.9 752.3 6600 CCoonnssuummeerr ccrreeddiitt 138.9 91.3 57.5 75.0 99.5 149.9 142.1 128.2 135.6 159.9 73.6 21.3 Funds raised through mutual funds and corporate equities 61 Total net issues 147.2r 232.9 185.2 108.8 153.7 390.1 209.9 245.6 -14.8 233.7 387.5 88.9 62 Corporate equities -.2' -4.7 -79.9 -165.8 -34.6 82.8 -22.2 -33.8 -171.5 137.3 119.5 -80.9 63 Nonfinancial corporations -58.3 -69.5 -114.4 -267.0 -143.5 61.2 -245.2 -67.6 -350.8 -25.6 -72.6 -118.5 64 Foreign shares purchased by U.S. residents 65.4 82.8 57.6 101.3 114.4 62.6 185.9 61.1 89.4 109.2 208.8 10.9 65 Financial corporations -7.3' -18.1 -23.1 -.1 -5.6 -41.0 37.2 -27.3 89.8 53.7 -16.7 26.7 66 Mutual fund shares 147.4 237.6 265.1 274.6 188.3 307.3 232.0 279.4 156.7 96.4 268.0 169.8 1. Data in this table also appear in the Board's Z. 1 (780) quarterly statistical release, tables F.2 through F4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A3 9 1.58 SUMMARY OF FINANCIAL TRANSACTIONS1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 2000 2001 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999955 11999966 11999977 11999988 11999999 Ql Q2 Q3 Q4 Ql Q2' Q3 NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets 1,238.5 1,372.1' 1,539.5' 2,179.4' 2,212.2R 1,679.4' 1,867.4' 1,674.6' 1,802.0' 1,863.8' 1,757.2 2,235.0 7 Domestic nonfederal nonfinancial sectors -79.3 74.0' -21.3' 99.5' 196.3' -218.5' 90.3' -255.1' -227.2' -171.6' -153.8 -178.8 Household 16.5 113.7' -11.8' -37.1' 148.6' -274.4' -10.4' -183.3' -212.1' -172.5' -140.5 -118.5 4 Nonfinancial corporate business -8.8 -10.2 -12.7 -16.0 -2.8 56.8' 60.4' -51.4' -24.5' 4.1' 16.6 -23.7 5 Nonfarm noncorporate business 4.4 4.2 3.0 18.1 7.1 -2.1 .4 -4.0 -2.7 —4.8 -5.2 -6.2 6 State and local governments -91.4 -33.7 .1 134.5 43.4 1.2 39.9 -16.4 12.1 1.5 -24.8 -30.4 7 Federal government -.5 -7.2 5.1 13.5 5.8 6.5 7.7 4.5 10.6 4.6 4.0 1.0 8 Rest of the world 273.9 414.4 311.3 254.2 208.8 315.2 197.9 216.2 387.8 411.2' 349.6 381.9 9 Financial sectors 1,044.4 890.9' 1,244.5' 1,812.1' 1,801.3' 1,576.1' 1,571.4' 1,709.0' 1,630.7' 1,619.7' 1,557.4 2,030.9 10 Monetary authority 12.7 12.3 38.3 21.1 25.7 102.0 -5.4 39.1 -.9 53.7 26.4 8.7 11 Commercial banking 265.9 187.5 324.3 305.2 308.2 415.8 497.4 363.2 157.0 152.8 133.9 234.8 17 U.S.-chartered banks 186.5 119.6 274.9 312.0 317.6 448.2 510.9 324.8 75.3 107.9 179.7 215.4 13 Foreign banking offices in United States 75.4 63.3 40.2 -11.9 -20.1 4.5 -22.3 32.8 81.1 41.3 ^18.6 16.5 14 Bank holding companies -.3 3.9 5.4 -.9 6.2 -42.2 3.5 -6.7 -3.2 7.3 -2.8 -1.4 15 Banks in U.S.-affiliated areas 4.2 .7 3.7 6.0 4.4 5.4 5.4 12.3 3.8 -3.6 5.6 4.2 16 Savings institutions -7.6 19.9 -4.7 36.1 68.6 55.6 65.0 62.7 42.5 52.5 57.3 -6.0 17 Credit unions 16.2 25.5 16.8 19.0 27.5 35.7 31.6 21.2 33.6 23.2' 7.6 61.7 18 Bank personal trusts and estates -8.3 -7.7 -25.0 -12.8 27.8 18.9 13.8 17.6 18.1 10.7 13.4 8.8 19 Life insurance companies 100.0 69.6 104.8 76.9 53.5 65.0 52.9 74.8 38.8 95.3 124.9 162.4 20 Other insurance companies 21.5 22.5 25.2 5.8 -3.0 -11.2 -18.1 6.2 -11.7 2.1 .1 9.0 21 Private pension funds 19.9 -4.1 47.6 56.4 45.0 46.8 24.7 64.9 28.7 26.1 -7.1 -.9 27 State and local government retirement funds 38.3 35.8 67.1 72.1 46.9 63.3 31.5 37.6 86.1' -70.7' 53.4 18.5 73 Money market mutual funds 86.5 88.8 87.5 244.0 182.0 161.5 -118.2 256.1 296.0 303.4 166.2 379.1 74 Mutual funds 52.5 48.9 80.9 124.8 47.2 -66.9 63.1 50.1 60.8 69.4 165.1 123.9 75 Closed-end funds 10.2 4.6 -2.6 5.5 7.4 -8.4 -8.4 -8.4 -8.4 -8.4 -8.4 -8.4 26 Government-sponsored enterprises 95.4 97.4 106.6 314.6 291.7 205.4 250.9 188.6 318.8 347.8 296.2 267.7 27 Federally related mortgage pools 98.3 141.0 114.6 192.6 273.8 119.5 132.2 236.7 309.1 170.3 406.5 492.6 28 Asset-backed securities issuers (ABSs) 120.6 120.5 163.8 281.7 205.2 154.2 111.4 120.9 278.9 269.8 150.0 276.4 29 Finance companies 49.9 18.9' 23.1' 77.3' 97.0' 145.4' 147.6' 102.8' 36.2' -.9' 126.7 -42.1 30 Mortgage companies -3.4 8.2 -9.1 3.2 .3 -6.0 5.5 -.5 2.0 1.4 11..11 1.7 31 Real estate investment trusts (REITs) 1.4 4.4 20.2 -5.1 -2.6 -16.3 -2.5 -3.6 -2.8 4.0 11..11 7.7 3? Brokers and dealers 90.1 -15.7 14.9 6.8 -34.7 102.9' 89.8' 152.1' -69.0 289.5' 35.4 250.1 33 Funding corporations -15.7 12.6 50.4 -12.9 133.8 -7.2 206.8' -73.0' 17.0' -172.5' -192.4 -214.6 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Net flows through credit markets 1,238.5 1,372.1' 1,539.5' 2,179.4' 2,212.2' 1,679.4' 1,867.4' 1,674.6' L,802.0R 1,863.8' 1,757.2 2,235.0 Other financial sources 35 Official foreign exchange 8.8 -6.3 .7 6.6 -8.7 1.5 -8.8 .7 44..99 --11..55 44..77 1199..11 36 Special drawing rights certificates 2.2 -.5 -.5 .0 -3.0 .0 -8.0 ^1.0 -4.0 .0 .0 .0 37 Treasury currency .7 .5 .5 .6 1.0 2.2 3.2 4.2 .0 -1.1 11..11 .0 38 Foreign deposits 35.3 85.9 107.7 6.5 61.0 313.3 3.4 -40.8 207.4 235.5 --114466..55 15.4 39 Net interbank transactions 10.0 -51.6 -19.7 -32.3 17.6 -72.9 151.9 -170.6 10.6 -45.7' 19.3 19.7 40 Checkable deposits and currency -12.8 15.7 41.2 47.4 151.4 -206.8 -33.8 5.0 -50.2 90.3 100.8 245.3 41 Small time and savings deposits 96.6 97.2 97.1 152.4 44.7 104.6 123.0 224.5 310.8 288.3 194.2 229.2 4? Large time deposits 65.6 114.0 122.5 92.1 130.6 154.1 101.2 152.9 65.2 130.6 51.9 14.9 43 Money market fund shares 141.2 145.4 155.9 287.2 249.1 239.7 71.5 250.9 371.1 621.4 322.5 367.7 44 Security repurchase agreements 110.5 41.4 120.9 91.3 169.7 275.8' 155.1' 277.1' -265.4' -12.8' 177.7 262.2 45 Corporate equities -.2' -4.7' -79.9' -165.8' -34.6' 82.8' -22.2' -33.8' -171.5' 137.3' 119.5 -80.9 46 Mutual fund shares 147.4 237.6 265.1 274.6 188.3 307.3 232.0 279.4 156.7 96.4 268.0 169.8 47 Trade payables 133.7 123.3 139.7 109.2 222.3 193.6' 212.9' 138.5' 119.3' -16.2' -100.0 -81.4 48 Security credit 26.7 52.4 111.0 103.3 104.3 507.8' -95.3' 97.5' 74.4' -140.9' -28.5 485.8 49 Life insurance reserves 45.8 44.5 59.3 48.0 50.8 54.9 45.6 53.0 47.3 52.7 53.2 56.5 50 Pension fund reserves 158.8 148.3 201.4 202.1 184.4' 206.9' 260.7' 227.0' 168.8' 255.5' 168.7 192.9 51 Taxes payable 7.8 19.5 22.3 21.3 22.3 31.0' 26.5' 3.3' 26.0' 3.3' 16.3 114.4 5? Investment in bank personal trusts 6.4 -5.3 -49.9 -41.8 -6.5 -28.4 -33.1 -29.2 -28.0 -26.1 -22.7 -28.2 53 Noncorporate proprietors' equity -.2 -31.1' -70.9' -80.6' -64.8' -63.4' -45.0' -26.7' -49.7' -48.5' -25.1 -60.2 54 Miscellaneous 496.9 526.1' 492.8' 986.8' 749.8' 904.3' 1,084.0' 1,399.2' 733.1' 500.7' 789.8 571.8 55 Total financial sources 2,719.7R 2,924.5R 3,256.8' 4,288.2' 4,441.8' 4,687.7R 4,092.3' 4,482.8R 3,528.8' 3,983.1R 3,722.3 4,749.2 Liabilities not identified as assets (—) 56 Treasury currency -.3 -.4 -.2 -.1 -.7 -1.8 -.7 .9 -3.3 -3.6 -.5 -.7 57 Foreign deposits 25.0' 59.4' 106.2 -8.5 45.8 263.1' -82.2' -100.2' 200.3' 181.5' -121.2 24.8 58 Net interbank liabilities -3.1 -3.3 -19.9 3.4 3.5 25.3 5.4 -12.1 51.1 16.7 13.6 8.3 59 Security repurchase agreements 25.7 2.4 63.2 60.6 30.0 567.2' 51.9' 126.5' -301.4' -161.7' 171.9 36.6 60 Taxes payable 21.1 23.1 28.0 19.7 6.5 9.5' 4.8' -2.6' 44.6' 4.4' -9.7 12.9 61 Miscellaneous -198.7' -173.7' -245.5' -127.4' —418.9' -501.0' -353.3' -232.2' -390.1' 27.3' -477.6 -87.0 Floats not included in assets (—) 62 Federal government checkable deposits -6.0 .5 -2.7 2.6 -7.4 18.7 16.3 3.0 -2.1 -29.8 10.1 18.5 63 Other checkable deposits -3.8 -4.0 -3.9 -3.1 -.8 1.0 1.4 1.9 2.4 3.8 3.9 5.1 64 Trade credit 17.4 -25.4 -29.2 -51.3 42.9 -71.8' -36.5' -51.9' 24.3' 2.0' 32.3 -10.7 65 Total identified to sectors as assets 2,842.5' 3,046.2' 3,360.7' 4,392.3' 4,740.8' 4,377.5' 4,485.3' 4,749.6' 3,903.1' 3,942.5R 4,099.7 4,741.5 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares. F. 1 and F.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • January 2002 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period 2000 2001 QI Q2 Q3 Q4 Ql' Q2' Q3 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 14,441.1r 15,245.1' 16,293.9' 17,428.5' 17,658.2' 17,839.9' 18,038.3' 18,320.9' 18,563.5 18,746.8 19,054.8 By sector and instrument 2 Federal government 3,781.8 3,804.9 3,752.2 3,681.0 3,653.5 3,464.0 3,410.2 3,385.2 3,408.8 3,251.4 3,320.1 3 Treasury securities 3,755.1 3,778.3 3,723.7 3,652.8 3,625.8 3,435.7 3,382.6 3,357.8 3,382.1 3,224.4 3,293.1 4 Budget agency securities and mortgages 26.6 26.5 28.5 28.3 27.8 28.2 27.6 27.3 26.8 27.0 27.0 5 Nonfederal 10,659.4' 11,440.2' 12,541.7' 13,747.4' 14,004.7' 14,376.0' 14,628.1' 14,935.7' 15,154.7 15,495.3 15,734.8 By instrument 6 Commercial paper 156.4 168.6 193.0 230.3 260.8 296.8 307.0 278.4 253.2 223.3 201.3 7 Municipal securities and loans 1,296.0 1,367.5 1,464.3 1,532.5 1,539.2 1,551.6 1,550.3 1,567.8 1,597.5 1,629.8 1,635.3 8 Corporate bonds 1,460.4 1,610.9 1,829.6 2,059.5 2,106.0 2,144.5 2,186.7' 2,230.6' 2,330.8 2,437.8 2,484.7 9 Bank loans n.e.c 934.0' 1,040.4' 1,148.5' 1,231.2' 1,258.7' 1,306.9' 1,311.3' 1,334.2' 1,323.9 1,292.9 1,282.9 10 Other loans and advances 765.6' 825.1' 907.2' 964.5' 1,008.3' 1,037.2' 1,039.5' 1,077.1' 1,083.4 1,110.6 1,116.0 11 Mortgages 4,832.9' 5,156.2' 5,652.6' 6,283.3' 6,394.6' 6,562.6' 6,713.9' 6,854.5' 6,980.6 7,192.8 7,391.9 12 Home 3,720.0' 3,978.3' 4,368.2' 4,803.4' 4,879.4' 5,005.1' 5,124.3' 5,225.9' 5,319.5 5,477.9 5,623.1 13 Multifamily residential 278.2 285.7' 309.5' 350.2' 357.5' 369.5' 376.7' 387.2' 397.0 410.9 425.3 14 Commercial 747.8 802.2' 878.3' 1,027.3' 1,053.4' 1,081.2' 1,104.5' 1,132.5' 1,154.2 1,190.9 1,228.9 15 Farm 86.9 90.0 96.6 102.3 104.2 106.8 108.3 108.8' 109.9 113.1 114.6 16 Consumer credit 1,214.1' 1,271.6' 1,346.6' 1,446.1' 1,437.0' 1,476.5' 1,519.6' 1,593.1' 1,585.3 1,608.1 1,622.8 By borrowing sector 17 Households 5,223.9' 5,556.9' 6,024.1' 6,541.5' 6,608.3' 6,772.9' 6,938.9' 7,115.5' 7,186.3 7,362.9 7,531.7 18 Nonfinancial business 4,372.0' 4,763.8' 5,317.8' 5,953.8' 6,139.1' 6,337.4' 6,426.2' 6,540.9' 6,660.9 6,794.6 6,862.4 19 Corporate 3,093.0' 3,383.9' 3,790.2' 4,265.3' 4,415.3' 4,562.2' 4,618.0' 4,695.9' 4,785.7 4,881.5 4,922.8 20 Nonfarm noncorporate 1,129.3' 1,224.0' 1,363.7' 1,519.1' 1,553.1' 1,599.1' 1,630.3' 1,664.8' 1,695.5 1,727.9 1,753.9 21 Farm 149.7 155.9 163.9 169.4 170.7 176.2 177.9 180.2' 179.7 185.2 185.8 22 State and local government 1,063.4 1,119.5 1,199.8 1,252.1 1,257.3 1,265.7 1,263.1 1,279.3 1,307.5 1,337.8 1,340.6 23 Foreign credit market debt held in United States 542.2 608.0 651.5 679.6 707.9' 702.5' 731.0' 746.7' 743.4 727.8 698.5 24 Commercial paper 67.5 65.1 72.9 89.2 101.6 101.2 109.8 120.9 112.8 110.1 106.3 25 Bonds 366.3 427.7 462.6 479.4 491.3' 484.5' 502.4' 504.6' 508.9 504.9 479.6 26 Bank loans n.e.c 43.7 52.1 58.9 59.4 63.3 64.7 67.7 70.7 73.9 66.2 67.3 27 Other loans and advances 64.7 63.0 57.2 51.7 51.7 52.1 51.2 50.5 47.7 46.6 45.3 28 Total credit market debt owed by nonfinancial sectors, domestic and foreign 14,983.3r 15,853.1' 16,945.4' 18,108.1' 18,366.1' 18,542.5' 18,769.3' 19,067.6' 19,306.9 19,474.6 19,753.3 Financial sectors 29 Total credit market debt owed by financial sectors 4,828.8r 5,458.0r 6,545.2' 7,629.6' 7,769.2' 7,993.5' 8,190.8' 8,457.1' 8,657.3 8,856.2 9,121.0 By instrument 30 Federal government-related 2,608.2 2,821.1 3,292.0 3,884.0 3,940.1 4,035.3 4,164.0 4,317.4 4,422.9 4,591.6 4,796.8 31 Government-sponsored enterprise securities .. . 896.9 995.3 1,273.6 1,591.7 1,618.0 1,680.2 1,749.7 1,825.8 1,888.7 1,955.8 2,037.8 32 Mortgage pool securities 1,711.3 1,825.8 2,018.4 2,292.2 2,322.1 2,355.2 2,414.3 2,491.6 2,534.2 2,635.8 2,759.0 33 Loans from U.S. government .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 2,220.6' 2,636.9' 3,253.2' 3,745.6' 3,829.1' 3,958.1' 4,026.7' 4,139.7' 4,234.4 4,264.6 4,324.3 35 Open market paper 579.1 745.7 906.7 1,082.9 1,115.7 1,135.2 1,151.6 1,210.7 1,180.8 1,144.5 1,110.2 36 Corporate bonds 1,382.7' 1,568.6' 1,878.7' 2,096.9' 2,138.8' 2,212.0' 2,269.7' 2,314.8' 2,424.3 2,483.9 2,563.8 37 Bank loans n.e.c 64.0 77.3' 107.5' 93.2' 91.8' 93.1' 92.8' 93.0' 97.3 100.4 100.0 38 Other loans and advances 162.9 198.5 288.7 395.8 404.4 436.9 430.2 438.3 450.9 450.7 467.2 39 Mortgages 31.9 46.8 71.6 76.7 78.5 81.0 82.5 82.9 81.1 85.1 83.0 By borrowing sector 40 Commercial banks 113.6 140.6 188.6 230.0 242.2 265.4 265.2 266.7 273.8 274.7 283.0 41 Bank holding companies 150.0 168.6 193.5 219.3 221.4 229.3 236.9 242.5 266.5 269.0 273.8 42 Savings institutions 140.5 160.3 212.4 260.4 266.9 280.7 276.0 287.7 295.1 294.4 303.9 43 Credit unions .4 .6 1.1 3.4 2.6 2.9 3.1 3.4 3.2 3.5 3.8 44 Life insurance companies 1.6 1.8 2.5 3.2 3.0 2.7 2.7 2.5 1.9 1.9 2.8 45 Government-sponsored enterprises 896.9 995.3 1,273.6 1,591.7 1,618.0 1,680.2 1,749.7 1,825.8 1,888.7 1,955.8 2,037.8 46 Federally related mortgage pools 1,711.3 1,825.8 2,018.4 2,292.2 2,322.1 2,355.2 2,414.3 2,491.6 2,534.2 2,635.8 2,759.0 47 Issuers of asset-backed securities (ABSs) 863.3 1,076.6 1,398.0 1,621.4 1,655.8 1,697.0 1,742.3 1,829.6 1,893.7 1,942.4 2,020.2 48 Brokers and dealers 27.3 35.3 42.5 25.3 36.4 36.2 42.6 40.9 35.0 43.9 47.0 49 Finance companies 534.5' 568.3' 625.5' 695.7' 708.4' 740.8' 761.8' 776.9' 756.2 769.0 771.3 50 Mortgage companies 20.6 16.0 17.7 17.8 17.1 17.8 17.7 17.9 18.1 18.2 18.5 51 Real estate investment trusts (REITs) 56.5 96.1 158.8 165.1 167.9 170.4 169.8 167.8 166.2 168.9 166.3 52 Funding corporations 312.4' 372.6' 412.6' 504.0' 507.4' 515.0' 508.7' 503.7' 524.7 478.6 433.6 All sectors 53 Total credit market debt, domestic and foreign . 19,812.1r 21,311.1' 23,490.6' 25,737.7' 26,135.3' 26,535.9' 26,960.1' 27,524.7' 27,964.2 28,330.8 28,874.3 54 Open market paper 803.0 979.4 1,172.6 1,402.4 1,478.1 1,533.3 1,568.3 1,610.0 1,546.8 1,477.9 1,417.8 55 U.S. government securities 6,389.9 6,626.0 7,044.3 7,565.0 7,593.6 7,499.3 7,574.2 7,702.6 7,831.7 7,843.0 8,116.8 56 Municipal securities 1,296.0 1,367.5 1,464.3 1,532.5 1,539.2 1,551.6 1,550.3 1,567.8 1,597.5 1,629.8 1,635.3 57 Corporate and foreign bonds 3,209.4' 3,607.2' 4,170.8' 4,635.8' 4,736.1' 4,841.0' 4,958.7' 5,050.0' 5,264.0 5,426.6 5,528.1 58 Bank loans n.e.c 1,041.7 1,169.8 1,314.9 1,383.8 1,413.7 1,464.6 1,471.7 1,497.9 1,495.1 1,459.5 1,450.2 59 Other loans and advances 993.2' 1,086.6' 1,253.0' 1,412.0' 1,464.4' 1,526.2' 1,520.9' 1,565.9' 1,582.0 1,607.9 1,628.5 60 Mortgages 4,864.8' 5,203.0' 5,724.2' 6,360.0' 6,473.1' 6,643.5' 6,796.4' 6,937.4' 7,061.7 7,277.9 7,474.9 61 Consumer credit 1,214.1' 1,271.6' 1,346.6' 1,446.1' 1,437.0' 1,476.5' 1,519.6' 1,593.1' 1,585.3 1,608.1 1,622.8 1. Data in this table appear in the Board's Z.l (780) quarterly statistical release, tables L.2 through L.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A41 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 2000 2001 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999966 11999977 11999988 11999999 Ql Q2 Q3 Q4 Ql Q2' Q3 CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 19,812.1R 21,311.1' 23,490.6R 25,737.7' 26,135.3' 26,535.9' 26,960.1' 27,524.7' 27,964.2' 28,330.8 28,874.3 ? Domestic nonfederal nonfinancial sectors 3,011.5r 2,946.5' 3,017.7' 3,284.1' 3,205.6' 3,209.3' 3,144.7' 3,094.4' 3,021.4' 2,964.3 2,914.0 Household 2,086.8r 2,031.3' 1,967.7' 2.184.5' 2,114.4' 2,089.7' 2,040.3' 1,977.4' 1,928.0' 1,869.6 1,832.7 4 Nonfinancial corporate business 270.2 257.5 241.5 238.7 230.8 246.1' 239.0' 249.1' 226.3' 232.1 231.1 Nonfarm noncorporate business 49.7 52.7 69.1 78.0 77.5 77.6 76.6 75.9 74.7 73.4 71.9 6 State and local governments 604.8 605.0 739.4 782.8 782.9 795.8 788.7 792.0 792.4 789.1 778.3 7 Federal government 200.2 205.4 219.1 258.0 259.6 261.6 262.7 265.4 266.6 267.6 267.8 8 Rest of the world 1,926.6 2,257.3 2,539.8 2,676.2 2,760.7 2,809.9 2,861.7 3,004.6 3,113.0' 3,200.4 3,293.2 9 Financial sectors 14,673.8' 15,901.8' 17,714.0' 19,519.4' 19,909.4' 20,255.2' 20,691.0' 21,160.3' 21,563.2' 21,898.6 22,399.3 10 Monetary authority 393.1 431.4 452.5 478.1 501.9 505.1 511.5 511.8 523.9 535.1 534.1 11 Commercial banking 3,707.7 4,031.9 4,335.7 4,643.9 4,725.0 4,847.4 4,931.0 5,002.3 5,015.7 5,044.4 5,096.5 12 U.S.-chartered banks 3,175.8 3,450.7 3,761.2 4,078.9 4,171.3 4,295.4 4,368.2 4,418.7 4,424.4 4,463.2 4,508.8 N Foreign banking offices in United States 475.8 516.1 504.2 484.1 482.0 478.1 487.5 508.1 515.0 504.2 509.9 14 Bank holding companies 22.0 27.4 26.5 32.7 22.1 23.0 21.3 20.5 22.3 21.6 21.3 15 Banks in U.S.-affiliated areas 34.1 37.8 43.8 48.3 49.6 51.0 54.0 55.0 54.1 55.5 56.5 ifi Savings institutions 933.2 928.5 964.6 1,033.2 1,045.8 1,062.5 1,082.2 1,089.7 1,101.6 1,116.4 1,119.0 17 Credit unions 288.5 305.3 324.2 351.7 359.0 370.1 376.0 382.2 386.5' 391.8 407.8 18 Bank personal trusts and estates 232.0 207.0 194.1 222.0 226.7 230.2 234.6 239.1 241.8 245.1 247.3 19 Life insurance companies 1,657.0 1,751.1 1,828.0 1,886.0 1,902.2 1,914.1 1,935.1 1,943.9 1,967.2 1,996.9 2,040.0 20 Other insurance companies 491.2 515.3 521.1 518.2 515.4 510.8 512.4 509.4 510.0 510.0 512.3 21 Private pension funds 627.0 674.6 731.0 775.9 787.6 793.8 810.0 817.2 823.7 822.0 821.7 2? State and local government retirement funds 565.4 632.5 704.6 751.4 767.2 775.1 784.5 806.0' 788.3' 801.7 806.3 23 Money market mutual funds 634.3 721.9 965.9 1,147.8 1,217.1 1,159.4 1,212.5 1,296.7 1,403.8 1,414.6 1,498.0 74 Mutual funds 820.2 901.1 1,025.9 1,073.1 1,053.7 1,073.9 1,088.5 1,099.9 1,113.8 1,160.1 1,193.0 ?5 Closed-end funds 100.8 98.3 103.7 111.1 109.0 106.9 104.8 102.7 100.6 98.5 96.4 26 Government-sponsored enterprises 832.8 939.4 1,253.9 1,545.6 1,584.0 1,649.2 1,704.3 1,793.7 1,864.7' 1,941.1 2,009.5 71 Federally related mortgage pools 1,711.3 1,825.8 2,018.4 2,292.2 2,322.1 2,355.2 2,414.3 2,491.6 2,534.2 2,635.8 2,759.0 28 Asset-backed securities (ABSs) issuers 773.9 937.7 1,219.4 1,424.6 1,453.8 1,486.3 1,522.9 1,602.9 1,660.5 1,703.7 1,774.7 29 Finance companies 545.1' 568.2' 645.5' 742.5' 776.6' 812.3' 830.0' 850.5' 848.0' 878.5 859.4 30 Mortgage companies 41.2 32.1 35.3 35.6 34.1 35.5 35.4 35.9 36.2 36.5 36.9 31 Real estate investment trusts (REITs) 30.4 50.6 45.5 42.9 38.8 38.2 37.3 36.6 37.6 37.9 39.8 39 Brokers and dealers 167.7 182.6 189.4 154.7 194.8' 188.2' 243.3 223.6 312.3' 288.4 369.9 33 Funding corporations 121.0 166.7 155.3 288.8 294.5 341.0' 320.4' 324.7' 292.7' 240.1 177.8 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Total credit market debt 19,812.1R 21,311.1R 23,490.6' 25,737.7' 26,135.3' 26,535.9' 26,960.1' 27,524.7' 27,964.2' 28,330.8 28,874.3 Other liabilities 35 Official foreign exchange 53.7 48.9 60.1 50.1 46.6' 46.0' 44.9 46.1' 42.8' 43.4 49.0 36 Special drawing rights certificates 9.7 9.2 9.2 6.2 6.2 4.2 3.2 2.2 2.2 2.2 2.2 37 Treasury currency 18.9 19.3 19.9 20.9 21.4 22.1 23.2 23.2 22.9 23.2 23.2 38 Foreign deposits 521.7 618.5 642.3 703.6 781.9 782.8 772.6 824.5 883.4 846.8 850.6 39 Net interbank liabilities 240.8 219.4 189.0 204.5 169.7 210.6 173.2 188.0 155.1' 163.1 176.8 40 Checkable deposits and currency 1,244.8 1,286.1 1,333.4 1,484.8 1,392.9 1,409.7 1,385.7 1,413.3 1,385.2 1,416.8 1,453.0 41 Small time and savings deposits 2,377.0 2,474.1 2,626.5 2,671.2 2,728.0 2,738.8 2,790.9 2,861.9 2,965.3 2,992.3 3,047.1 42 Large time deposits 590.9 713.4 805.5 936.1 966.5 987.4 1,025.9 1,054.5 1,078.0 1,087.1 1,090.4 43 Money market fund shares 886.7 1,042.5 1,329.7 1,578.8 1,666.0 1,627.1 1,697.8 1,812.1 1,994.7 2,014.8 2,116.1 44 Security repurchase agreements 701.5 822.4 913.7 1,083.4 1,149.4' 1,185.2' 1,238.6' 1,194.1' 1,199.7' 1,240.5 1,287.8 45 Mutual fund shares 2,342.4 2,989.4 3,610.5 4,553.4 4,863.3 4,759.6 4,814.4 4,457.2 3,999.8 4,275.3 3,705.2 46 Security credit 358.1 469.1 572.3 676.6 801.1' 780.3' 805.8' 822.7' 785.4' 781.5 904.6 47 Life insurance reserves 610.6 665.0 718.3 783.9 801.0 806.5 818.7 819.1 823.0 840.3 841.5 48 Pension fund reserves 6,325.1 7,323.4 8,193.7 9,041.7 9,237.9 9,166.7 9,307.9 9,054.8 8,588.9' 8,849.7 8,281.0 49 Trade payables 1,827.6 1,967.3 2,076.5 2,298.8 2,321.7 2,371.6' 2,418.2' 2,464.9' 2,436.3' 2,406.9 2,412.2 50 Taxes payable 128.8 151.1 172.4 194.7 210.1 211.4' 214.7' 216.4 224.8' 224.0 254.9 51 Investment in bank personal trusts 871.3 942.5 1,001.0 1,130.4 1,158.0 1,114.4 1,106.7 1,019.4 929.1 964.4 859.6 52 Miscellaneous 6,387.1' 6,730.7' 7,692.9' 8,269.8' 8,464.3' 8,731.9' 9,221.0' 9,104.9' 9,536.4' 9,763.7 10,222.5 53 Total liabilities 45,308.7R 49,803.3R 55,457.6R 61,426.6' 62,921.3' 63,492.5' 64,823.6' 64,903.9' 65,017.3' 66,266.6 66,452.1 Financial assets not included in liabilities (+) 54 Gold and special drawing rights 21.4 21.1 21.6 21.4 21.4 21.5 21.4 21.6' 21.4' 21.5 22.0 55 Corporate equities 10,281.6' 13,301.7' 15,577.3' 19,581.2' 20,276.3' 19,395.9' 19,249.0' 17,566.4' 15,311.6' 16,239.1 13,625.2 56 Household equity in noncorporate business 3,786.6' 4,051.0' 4,394.1' 4,623.6' 4,652.1' 4,745.9' 4,782.7' 4,850.2' 4,882.4' 4,893.8 4,897.1 Liabilities not identified as assets (—) 57 Treasury currency -6.1 -6.3 -6.4 -7.1 -7.6 -7.9 -7.6 -8.5 -9.4 -9.5 -9.7 58 Foreign deposits 434.9' 535.0' 542.8' 588.9' 654.7' 634.2' 609.1' 659.3' 704.6' 674.3 680.5 59 Net interbank transactions -10.6 -32.2 -27.0 -25.5 -13.9 -11.6 -17.6 -4.3 1.7 5.5 6.3 60 Security repurchase agreements 109.8 172.9 233.5 263.6 410.5' 423.0' 446.0 374.6' 353.7' 396.2 394.1 61 Taxes payable 81.9 104.2 122.9 122.7 118.7' 134.5' 124.4 128.4' 113.3' 133.2 152.1 62 Miscellaneous -1,226.5' -1,548.9' -2,323.1' -2,740.5' -2,908.3' -2,939.4' -2,727.8' -3,224.6' -3,066.2' -3,040.8 -2,760.7 Floats not included in assets (-) 63 Federal government checkable deposits -1.6 -8.1 -3.9 -9.9 -9.2' -5.6' -7.8 -2.3' -22.3' -40.1 -38.4 64 Other checkable deposits 30.1 26.2 23.1 22.3 18.7 22.5 15.5 24.0 21.1 25.5 19.2 65 Trade credit 165.7 126.8 76.6 120.9 50.2' 16.5' 6.0' 91.6' 38.4' 21.8 35.7 66 Totals identified to sectors as assets 59,820.7R 67,807.3R 76,812.0R 87,317.3' 89,557.3' 89,389.6' 90,436.5' 89,303.8' 87,097.8' 89,254.8 86,517.1 !. 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. L. 1 and L.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Nonfinancial Statistics • January 2002 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures Monthly data seasonally adjusted, and indexes 1992=100, except as noted 2001 MMeeaassuurree 11999988 11999999 22000000 Feb. Mar. Apr. May June' July' Aug.' Sept. Oct.P 1 Industrial production1 134.5r 139.4r 145.7' 143.5r 142.9r 142.0' 141.6' 140.3 140.4 139.8 138.5 136.9 Market groups 2 Products, total 126.8' 129.6' 133.5' 132.2' 132.1' 131.0' 130.9' 130.0 130.3 129.1 127.7 126.4 3 Final, total 128.9' 131.8' 135.8' 134.7' 135.1' 134.0' 133.9' 132.9 133.2 131.7 130.1 128.8 4 Consumer goods 118.3' 119.9' 121.9' 121.2' 121.8' 121.3' 121.4' 121.1 122.2 120.9 120.0 119.5 5 Equipment 148.1' 153.5' 161.8' 159.8' 159.6' 157.3' 156.5' 154.1 152.7 150.7 147.4 144.5 6 Intermediate 120.2' 123.2' 126.4' 124.4' 123.4' 122.2' 122.2' 121.4 121.4 121.1 120.5 119.0 7 Materials 146.9' 155.6' 166.4' 162.5' 160.9' 160.3' 159.4' 157.4 157.2 157.8 156.5 154.5 Industry groups 8 Manufacturing 138.8' 144.7' 151.6' 148.4' 147.9' 146.7' 146.4' 145.0 145.2 144.4 142.9 141.1 9 Capacity utilization, manufacturing (percent)2 . . 81.4' 80.6' 80.7' 77.2' 76.7' 76.0' 75.8' 75.0 75.1 74.6 73.7 72.8 10 Construction contracts3 122.6' 135.2' 142.1' 153.0' 141.0' 144.0' 147.0' 151.0 143.0 142.0 149.0 148.0 11 Nonagricultural employment, total4 115.9 118.6 121.0 122.1 122.2 122.0 122.0 122.0 122.0 121.9 121.7 121.3 12 Goods-producing, total 109.4 109.7 110.5 110.3 110.2 109.4 109.0 108.4 108.1 107.5 107.1 106.3 13 Manufacturing, total 103.9 102.4 101.8 100.5 100.1 99.5 98.7 98.1 97.7 96.8 96.3 95.6 14 Manufacturing, production workers 105.4 103.7 102.9 100.3 99,7 99.0 98.2 97.3 96.8 95.9 95.3 94.5 IS Service-producing 117.7 121.0 123.9 125.3 125.4 125.4 125.6 125.6 125.7 125.9 125.7 125.4 16 Personal income, total 137.8 144.3 154.3 160.3 161.0 161.3 161.6 162.1 162.7 162.8 162.8 162.7 17 Wages and salary disbursements 140.6 149.9 162.2 169.4 170.1 170.8 170.7 171.5 171.8 171.8 171.9 171.4 18 Manufacturing 129.7 134.0 142.3 146.3 146.3 146.8 145.4 144.9 144.9 144.1 143.5 142.3 19 Disposable personal income5 133.7 139.2 147.9 153.4 154.1 154.5 154.8 155.2 158.0 161.0 159.1 156.4 20 Retail sales5 142.8 155.1 167.0 170.4 169.6 172.2 172.4 172.3 172.6 172.9 169.2 182.2 Prices6 21 Consumer (1982-84=100) 163.0 166.6 172.2 175.8 176.2 176.9 177.7 178.0 177.5 177.5 178.3 177.7 22 Producer finished goods (1982=100) 130.7 133.0 138.0 141.4 140.9 141.8 142.7 142.2 140.7 141.1 141.7 139.6 1. Data in this table appear in the Board's G.17 (419) monthly statistical release. The data 3. Index of dollar value of total construction contracts, including residential, nonresidenare also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The tial, and heavy engineering, from McGraw-Hill Information Systems Company, F.W. Dodge latest historical revision of the industrial production index and the capacity utilization rates Division. was released in November 2001. The recent annual revision will be described in an article in 4. Based on data from the U.S. Department of Labor, Employment and Earnings. Series an upcoming 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 Resen>e 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," Fedaral 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 2. Ratio of index of production to index of capacity. Based on data from the Federal series 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 2001 CCaatteeggoorryy 11999988 11999999 22000000 Mar. Apr. May June July Aug.' Sept. Oct.p HOUSEHOLD SURVEY DATA1 1 Civilian labor force2 137,673 139,368 140,863 141,868 141,757 114411,,227722 114411,,335544 114411,,777744 114411,,335500 114422,,119900 114422,,330033 Employment 2 Nonagricultural industries3 128,085 130,207 131,903 132,618 132,162 131,910 131,937 132,334 131,276 131,961 131,362 3 Agriculture 3,378 3,281 3,305 3,161 3,192 3,193 2,995 3,045 3,117 3,220 3,200 Unemployment 4 Number 6,210 5,880 5,655 6,088 6,402 6,169 6,422 6,395 6,957 7,009 7,741 5 Rate (percent of civilian labor force) 4.5 4.2 4.0 4.3 4.5 4.4 4.5 4.5 4.9 4.9 5.4 ESTABLISHMENT SURVEY DATA 6 Nonagricultural payroll employment4 125,865 128,786 131,417 132,654 132,489 132,530 132,431 132,449 132,395 132,182 131,767 7 Manufacturing 18,805 18,543 18,437 18,116 18,009 17,879 17,757 17,688 17,533 17,443 17,301 8 Mining 590 535 538 557 560 564 565 567 569 568 566 9 Contract construction 6,020 6,404 6,687 6,929 6,852 6,881 6,864 6,867 6,861 6,862 6,832 10 Transportation and public utilities 6,611 6,826 6,993 7,127 7,119 7,130 7,118 7,108 7,082 7,062 7,007 11 Trade 29,095 29,712 30,191 30,523 30,583 30,584 30,583 30,623 30,593 30,510 30,406 12 Finance 7,389 7,569 7,618 7,618 7,626 7,644 7,631 7,618 7,623 7,628 7,633 13 Service 37,533 39,027 40,384 41,073 40,993 41,078 41,085 41,046 41,129 41,106 40,995 14 Government 19,823 20,170 20,570 20,711 20,747 20,770 20,828 20,932 21,005 21,003 21,027 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 Q4r Qlr Q2r Q3r Q4r Qlr Q2r Q3' Q4' Ql' Q2' Q3' Output (1992=100) Capacity (percent of 1992 output) Capacity utilization rate (percent)2 1 Total industry 145.7 143.5 141.3 139.6 180.6 181.8 182.6 183.2 80.7 78.9 77.4 76.2 2 Manufacturing 151.1 148.4 146.0 144.2 191.0 192.3 193.2 193.6 79.1 77.2 75.6 74.4 3 Primary processing3 177.2 172.0 168.9 166.9 218.6 221.4 223.0 223.8 81.1 77.7 75.8 74.6 4 Advanced processing4 136.7 135.3 133.3 131.5 175.6 176.2 176.6 176.9 77.9 76.8 75.5 74.3 Durable goods 189.7 185.0 181.9 178.3 241.3 244.4 246.3 247.5 78.6 75.7 73.8 72.0 6 Lumber and products 114.1 110.2 113.2 115.0 147.6 148.2 148.5 148.8 77.3 74.4 76.2 77.3 7 Primary metals 126.5 120.8 120.5 117.7 151.2 151.0 150.8 150.6 83.6 80.0 79.9 78.2 8 Iron and steel 119.6 113.7 117.3 116.3 148.4 147.9 147.4 146.8 80.6 76.9 79.6 79.2 9 Nonferrous 134.9 129.5 124.6 119.7 155.0 155.1 155.3 155.6 87.0 83.5 80.2 77.0 10 Industrial machinery and equipment 229.1 226.9 217.0 208.5 292.2 295.3 297.3 298.8 78.4 76.8 73.0 69.8 11 Electrical machinery 566.8 544.2 509.2 483.7 684.9 716.8 735.6 745.4 82.8 75.9 69.2 64.9 12 Motor vehicles and parts 165.7 155.2 166.8 169.5 217.2 218.7 220.1 221.5 76.3 71.0 75.8 76.5 13 Aerospace and miscellaneous transportation equipment 100.1 100.2 99.0 95.6 135.4 135.4 135.3 135.2 74.0 74.0 73.2 70.7 14 Nondurable goods 114.2 113.2 111.5 111.0 143.1 143.1 143.0 142.9 79.8 79.1 77.9 77.6 15 Textile mill products 92.4 91.4 88.0 85.7 119.4 118.4 117.4 116.4 77.4 77.2 74.9 73.6 16 Paper and products 112.6 109.2 108.9 107.9 138.2 138.5 138.7 138.8 81.5 78.9 78.5 77.7 17 Chemicals and products 122.7 121.6 119.6 121.2 157.9 158.1 158.3 158.5 77.7 76.9 75.6 76.5 18 Plastics materials 115.7 121.0 116.4 125.0 151.5 152.0 152.5 153.0 76.4 79.6 76.3 77.1 19 Petroleum products 115.1 114.8 115.5 113.2 121.9 122.0 122.2 122.4 94.5 94.1 94.5 92.5 20 Mining 101.1 102.0 102.9 102.0 111.9 111.9 112.0 112.2 90.3 91.1 91.8 90.8 71 Utilities 124.6 123.5 120.0 118.8 133.1 134.6 136.2 138.1 93.6 91.8 88.1 86.1 22 Electric 126.2 125.6 123.6 122.5 131.3 133.1 135.1 137.4 96.1 94.4 91.5 89.1 1973 1975 Previous cycle5 Latest cycle6 2000 2001 High Low High Low High Low Oct. May June July' Aug.' Sept.' Oct.p Capacity utilization rate (percent)2 1 Total industry 89.2 72.6 87.3 71.1 85.4 78.1 81.2 77.5r 76.7r 76.7 76.3 75.5 74.6 2 Manufacturing 88.5 70.5 86.9 69.0 85.7 76.6 79.8 75.8r 75.0' 75.1 74.6 73.7 72.8 3 Primary processing3 91.2 68.2 88.1 66.2 88.9 77.7 82.6 75.9' 74.9' 74.9 74.7 74.2 73.1 4 Advanced processing4 87.2 71.8 86.7 70.4 84.2 76.1 78.1 75.6' 75.0' 75.1 74.4 73.4 72.5 5 Durable goods 89.2 68.9 87.7 63.9 84.6 73.1 79.6 74.2' 73.0' 72.8 72.3 71.0 69.4 6 Lumber and products 88.7 61.2 87.9 60.8 93.6 75.5 78.6 76.5 76.8' 76.6 77.3 77.8 76.0 7 Primary metals 100.2 65.9 94.2 45.1 92.7 73.7 84.5 80.1' 79.3' 79.3 78.3 76.8 73.4 8 Iron and steel 105.8 66.6 95.8 37.0 95,2 71.8 81.8 80.3' 79.9 80.8 79.5 77.4 71.8 9 Nonferrous 90.8 59.8 91.1 60.1 89.3 74.2 87.5 79.8' 78.5' 77.7 77.0 76.2 75.0 10 Industrial machinery and equipment 96.0 74.3 93.2 64.0 85.4 72.3 79.1 73.0' 71.8' 70.5 70.6 68.4 67.5 11 Electrical machinery 89.2 64.7 89.4 71.6 84.0 75.0 84.0 69.5' 67.3' 65.4 65.1 64.2 63.2 12 Motor vehicles and parts 93.4 51.3 95.0 45.5 89.1 55.9 80.1 77.1' 76.0' 79.0 76.7 73.8 70.2 13 Aerospace and miscellaneous transportation equipment . . . 78.4 67.6 81.9 66.6 87.3 79.2 73.1 73.1' 72.7' 71.8 70.6 69.9 68.7 14 Nondurable goods 87.8 71.7 87.5 76.4 87.3 80.7 80.1 77.9' 77.7' 78.0 77.6 77.3 77.1 15 Textile mill products 91.4 60.0 91.2 72.3 90.4 77.7 78.8 73.9' 74.1' 72.2 74.1 74.5 73.9 16 Paper and products 97.1 69.2 96.1 80.6 93.5 85.0 82.8 78.4' 77.2' 77.9 77.3 77.9 77.0 17 Chemicals and products 87.6 69.7 84.6 69.9 86.2 79.3 78.2 75.7' 75.5' 76.5 76.4 76.5 76.2 18 Plastics materials 102.0 50.6 90.9 63.4 97.0 74.8 80.7 76.5' 76.3' 76.9 77.6 76.8 76.2 19 Petroleum products 96.7 81.1 90.0 66.8 88.5 85.1 94.8 94.5' 94.5' 93.6 92.4 91.3 94.0 20 Mining 94.3 88.2 96.0 80.3 88.0 87.0 90.3 91.9' 91.4' 90.9 90.8 90.9 89.2 21 Utilities 96.2 82.9 89.1 75.9 92.6 83.4 91.8 87.9' 87.0' 86.0 86.7 85.5 85.6 22 Electric 99.0 82.7 88.2 78.9 95.0 87.1 94.7 90.9' 90.4' 88.5 90.4 88.4 88.7 1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. The 3. Primary processing includes textiles; lumber; paper; industrial chemicals; synthetic data are also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. materials; fertilizer materials; petroleum products; rubber and plastics; stone, clay, and glass; The latest historical revision of the industrial production index and the capacity utilization primary metals; and fabricated metals. rates was released in November 2001. The recent annual revision will be described in an 4. Advanced processing includes foods, tobacco, apparel, furniture and fixtures, printing article in an upcoming issue of the Bulletin. For a description of the methods of estimating and publishing, chemical products such as drugs and toiletries, agricultural chemicals, leather industrial production and capacity utilization, see "Industrial Production and Capacity and products, machinery, transportation equipment, instruments, and miscellaneous manufac- Utilization: Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 turing. (February 1997), pp. 67-92, and the references cited therein. For details about the construc- 5. Monthly highs, 1978-80; monthly lows, 1982. tion of individual industrial production series, see "Industrial Production: 1989 Develop- 6. Monthly highs, 1988-89; monthly lows, 1990-91. ments and 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 • January 2002 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data seasonally adjusted 1992 2000 2001 pro- 2000 por- avg. tion Oct.r Nov.r Dec.' Jan.' Feb.' Mar.' Apr.' May' June' July' Aug.' Sept.' Oct.? Index (1992= 00) MAJOR MARKETS 1 Total index 100.0 145.7 146.3 145.8 145.1 143.9 143.5 142.9 142.0 141.6 140.3 140.4 139.8 138.5 136.9 2. Products 60.5 133.5 133.4 133.8 133.6 132.7 132.2 132.1 131.0 130.9 130.0 130.3 129.1 127.7 126.4 3 Final products 46.3 135.8 135.9 136.3 136.3 135.2 134.7 135.1 134.0 133.9 132.9 133.2 131.7 130.1 128.8 4 Consumer goods, total 29.1 121.9 121.6 122.1 122.5 121.0 121.2 121.8 121.3 121.4 121.1 122.2 120.9 120.0 119.5 5 Durable consumer goods 6.1 161.2 157.4 154.7 153.2 147.3 149.1 152.9 152.2 154.2 153.2 157.0 154.1 151.6 146.9 6 Automotive products 2.6 157.0 151.7 148.2 145.3 138.5 141.8 149.8 149.6 152.8 152.3 161.1 155.6 152.4 146.4 7 Autos and trucks 1.7 169.8 162.5 157.6 150.2 142.2 147.8 159.6 160.1 165.7 163.4 178.3 169.1 164.1 154.6 8 Autos, consumer .9 104.4 99.4 96.0 89.3 93.4 93.3 97.0 96.0 97.9 97.2 97.5 90.6 92.7 86.8 9 Trucks, consumer .7 239.5 229.8 223.4 215.1 194.4 206.0 226.3 228.4 237.9 234.0 264.3 252.6 240.2 226.7 10 Auto parts and allied goods .9 137.2 135.0 133.7 138.2 133.3 132.8 134.7 133.5 132.5 135.1 133.9 134.5 134.0 133.8 11 Other 3.5 164.6 162.5 160.6 160.9 155.9 156.1 155.1 153.9 154.5 152.9 151.0 151.0 149.4 146.2 12 Appliances, televisions, and air conditioners 1.0 304.9 303.1 300.8 306.4 289.5 284.4 284.0 284.0 292.1 285.0 271.7 287.1 285.3 276.4 13 Carpeting and furniture .8 128.8 126.5 123.4 125.5 119.8 124.7 123.1 119.9 117.7 118.6 116.2 117.6 118.4 115.0 14 Miscellaneous home goods 1.6 125.0 123.3 122.5 120.5 119.5 118.3 117.7 117.4 117.7 116.2 117.7 113.3 110.7 109.3 15 Nondurable consumer goods 23.0 112.7 113.2 114.3 115.1 114.5 114.4 114.3 113.9 113.6 113.4 113.9 113.0 112.5 112.8 16 Foods and tobacco 10.3 109.4 108.7 109.3 110.3 109.4 109.5 109.3 108.9 108.6 108.9 109.3 108.4 108.0 108.0 17 Clothing 2.4 86.4 83.1 83.8 82.2 83.0 82.6 82.8 82.0 80.6 78.2 79.0 76.7 75.0 74.2 18 Chemical products 4.5 134.8 138.3 140.9 140.1 139.4 141.7 143.8 143.4 145.2 145.7 147.5 146.5 146.1 146.1 19 Paper products 2.9 106.3 108.1 107.5 107.9 109.2 107.3 106.9 107.4 106.7 106.6 106.0 105.6 105.1 104.8 20 Energy 2.9 117.0 119.0 121.9 125.8 124.0 122.1 119.8 118.7 116.9 115.8 116.0 115.3 114.8 117.6 21 Fuels .8 112.9 113.0 115.4 112.3 112.9 114.2 113.9 114.6 115.6 115.2 114.3 112.2 111.8 116.2 22 Residential utilities 2.1 118.7 122.0 125.1 133.2 130.0 126.2 122.8 120.7 117.2 115.8 116.5 116.7 116.1 118.0 23 Equipment 17.2 161.8 162.5 163.0 162.0 161.8 159.8 159.6 157.3 156.5 154.1 152.7 150.7 147.4 144.5 24 Business equipment 13.2 188.9 190.7 190.6 189.3 188.7 186.1 185.4 182.1 181.3 177.8 176.1 173.7 169.1 165.5 25 Information processing 5.4 290.8 301.0 302.1 303.4 304.1 297.5 294.1 288.4 286.8 279.6 275.2 274.7 270.1 266.1 26 Computer and office equipment 1.1 914.2 987.7 1,001.7 1,012.9 1,017.4 1,012.6 996.5 970.9 950.6 948.7 934.2 929.6 906.4 901.8 27 Industrial 4.0 138.3 138.5 138.1 135.9 137.2 132.4 132.6 129.1 129.0 125.2 123.1 121.8 119.1 117.1 28 Transit 2.5 143.4 137.9 138.5 134.0 131.0 131.6 135.6 133.8 134.5 133.1 133.8 128.4 123.4 117.8 29 Autos and trucks 1.2 170.1 155.6 155.5 145.9 140.0 142.5 151.1 148.0 152.5 150.5 157.1 149.6 142.1 133.8 30 Other 1.3 143.2 147.4 144.3 148.5 145.4 151.6 143.3 143.1 139.1 140.7 140.8 139.3 132.9 132.0 31 Defense and space equipment 3.3 74.4 72.7 74.8 75.2 75.5 74.1 74.5 74.4 73.5 73.4 73.6 73.2 73.6 73.5 32 Oil and gas well drilling .6 132.0 136.8 139.0 139.9 146.7 147.7 151.0 152.2 151.9 150.4 147.1 143.1 140.4 133.5 33 Manufactured homes .2 120.6 102.6 95.8 86.0 79.6 87.1 87.3 88.6 91.7 96.0 95.4 97.9 95.0 34 Intermediate products, total 14.2 126.4 126.2 126.2 125.3 125.0 124.4 123.4 122.2 122.2 121.4 121.4 121.1 120.5 119.0 35 Construction supplies 5.3 141.5 140.4 140.3 139.5 138.8 138.6 139.4 139.0 138.7 138.0 137.3 137.9 138.1 135.1 36 Business supplies 8.9 117.5 117.7 117.8 116.9 116.9 116.0 113.8 112.2 112.4 111.6 112.0 111.1 110.1 109.4 37 Materials 39.5 166.4 167.9 166.0 164.5 162.8 162.5 160.9 160.3 159.4 157.4 157.2 157.8 156.5 154.5 38 Durable goods materials 20.8 225.4 229.2 225.4 223.9 220.3 219.7 218.0 216.4 216.2 212.9 212.6 212.2 209.0 205.4 39 Durable consumer parts 4.0 167.2 168.7 160.0 157.6 149.0 154.6 155.0 155.1 159.6 157.7 160.2 160.6 155.0 150.3 40 Equipment parts 7.6 459.6 481.6 483.4 482.4 474.0 470.1 464.3 452.9 446.5 436.1 429.9 429.4 427.2 424.0 41 Other 9.2 134.7 133.2 130.8 129.8 130.3 128.2 127.2 127.9 127.5 126.2 126.4 125.8 124.1 121.7 42 Basic metal materials 3.1 127.7 125.1 122.7 123.5 121.4 118.1 114.5 117.6 116.7 115.5 115.7 114.2 112.2 107.9 43 Nondurable goods materials 8.9 113.0 112.2 109.6 107.1 108.4 107.9 104.9 104.7 103.0 102.2 102.7 103.8 104.0 103.2 44 Textile materials 1.1 106.3 100.8 98.0 95.0 99.3 95.8 95.3 95.0 90.9 90.8 87.6 90.2 89.9 89.6 45 Paper materials 1.8 115.6 116.5 113.3 109.7 112.2 112.1 106.0 110.2 108.3 104.8 107.7 108.6 109.2 108.0 46 Chemical materials 3.9 113.4 112.5 110.1 106.3 107.8 108.0 104.8 101.8 100.5 100.3 100.9 102.3 102.4 101.6 47 Other 2.1 112.8 113.0 111.1 112.7 110.5 109.9 108.7 110.6 109.4 109.3 109.7 109.5 109.7 109.1 48 Energy materials 9.7 104.6 105.0 106.0 105.8 104.3 104.6 104.5 104.9 103.8 103.1 102.3 103.4 103.6 102.9 49 Primary energy 6.3 98.9 98.7 99.5 99.5 99.4 98.9 99.1 99.5 99.0 99.5 98.5 99.4 99.7 98.5 50 Converted fuel materials 3.3 116.2 118.4 119.8 118.9 113.6 116.1 115.5 115.7 113.1 109.1 109.0 110.5 110.5 110.9 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.1 145.1 145.9 145.6 145.2 144.1 143.6 142.6 141.7 141.1 139.9 139.5 139.2 138.1 136.7 52 Total excluding motor vehicles and parts 95.1 144.2 144.9 144.9 144.6 144.0 143.1 142.0 141.0 140.2 139.0 138.7 138.3 137.3 136.0 53 Total excluding computer and office equipment 98.2 139.8 140.1 139.6 139.0 137.8 137.4 136.9 136.0 135.7 134.4 134.6 134.0 132.8 131.2 54 Consumer goods excluding autos and trucks . . 27.4 119.3 119.5 120.2 121.2 120.0 119.9 119.8 119.3 119.0 118.8 119.1 118.3 117.6 117.6 55 Consumer goods excluding energy 26.2 122.5 121.9 122.0 122.0 120.5 121.0 122.0 121.6 122.0 121.8 122.9 121.6 120.7 119.7 56 Business equipment excluding autos and trucks 12.0 191.2 195.1 195.1 194.9 195.0 191.8 189.8 186.4 184.9 181.3 178.4 176.6 172.5 169.5 57 Business equipment excluding computer and office equipment 12.1 159.6 159.8 159.5 158.0 157.4 155.1 154.7 152.1 151.7 148.5 147.2 145.0 141.2 137.9 58 Materials excluding energy 29.8 187.2 189.3 185.9 183.9 182.2 181.6 179.3 178.2 177.4 175.0 175.0 175.3 173.4 170.8 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A45 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value '—Continued Monthly data seasonally adjusted 1992 2000 2001 Group c S o I d C e 2 p p r o o r - - 2 aa 0 vv 0 gg 0 .. tion Oct.r Nov/ Dec/ Jan/ Feb/ Mar/ Apr/ Mayr Juner July' Aug/ Sept/ Oct.P Index(1992= 100) MAJOR INDUSTRIES 59 Total index 100.0 145.7 146.3 145.8 145.1 143.9 143.5 142.9 142.0 141.6 140.3 140.4 139.8 138.5 136.9 60 Manufacturing 85.4 151.6 152.0 151.2 150.1 148.9 148.4 147.9 146.7 146.4 145.0 145.2 144.4 142.9 141.1 61 Primary processing 26.5 178.2 179.7 177.1 174.8 172.9 172.4 170.7 170.1 169.4 167.3 167.4 167.2 166.2 164.0 62 Advanced processing 58.9 136.9 136.8 136.9 136.4 135.5 135.1 135.1 133.7 133.6 132.5 132.9 131.7 129.9 128.4 63 Durable goods 45.0 190.0 191.1 189.6 188.5 185.6 184.6 184.7 182.9 182.7 180.1 180.0 178.8 176.0 172.3 64 Lumber and products ' ' 24 2.0 118.8 115.8 114.4 112.1 109.3 109.5 111.8 111.8 113.7 114.2 114.0 115.0 115.8 113.2 65 Furniture and fixtures 25 1,4 146.3 145.8 144.9 146.4 143.1 144.4 142.5 141.8 140.4 138.3 138.4 138.3 136.3 132.6 66 Stone, clay, and glass products 32 2.1 133.9 135.1 131.8 130.4 132.5 132.4 132.9 133.1 133.0 130.0 130.0 130.5 130.9 129.6 67 Primary metals 33 3.1 131.9 127.9 125.8 125.8 123.9 121.0 117.5 121.2 120.8 119.5 119.5 117.9 115.7 110.4 68 Iron and steel 331,2 1.7 127.3 121.5 119.4 117.8 115.4 114.4 111.3 115.8 118.4 117.7 118.8 116.7 113.4 105.1 69 Raw steel 331PT .1 117.9 112.5 106.4 104.3 106.6 106.9 107.0 99.2 106.2 107.8 108.3 106.2 105.8 97.2 70 Nonferrous 333-6,9 1.4 137.7 135.6 133.6 135.5 134.3 128.9 125.1 127.8 124.0 122.0 120.8 119.8 118.6 116.9 71 Fabricated metal products .. 34 5.0 137.2 136.9 136.8 136.0 136.2 133.2 132.2 131.0 131.0 129.5 131.1 130.8 128.8 126.6 72 Industrial machinery and equipment 35 8.0 227.1 230.2 228.9 228.2 228.1 227.0 225.5 220.2 217.0 213.8 210.2 210.9 204.5 202.1 73 Computer and office equipment 357 1.8 1,070.0 1,156.3 1,165.3 1,167.3 1,163.4 1,153.5 1,137.1 1,112.9 1,095.1 1,095.4 1,074.6 1,069.2 1,042.5 1,037.3 74 Electrical machinery 36 7.3 536.6 564.5 566.3 569.5 555.4 543.6 533.6 518.8 511.4 497.6 485.9 485.1 480.2 474.4 75 Transportation equipment . . 37 9.5 137.1 135.2 131.8 128.8 123.1 126.4 131.0 130.5 133.2 131.9 134.6 131.5 128.1 123.5 76 Motor vehicles and parts . 371 4.9 177.6 173.7 164.8 158.6 146.9 154.9 163.7 163.2 169.7 167.7 174.6 170.0 163.9 156.0 77 Autos and light trucks . 371PT 2.6 164.6 157.7 152.9 145.2 138.8 143.5 154.2 154.4 159.5 157.2 170.2 160.9 156.8 147.5 78 Aerospace and miscellaneous transportation equipment 372-6,9 4.6 99.1 99.0 100.8 100.7 100.7 99.5 100.4 99.9 98.9 98.3 97.1 95.4 94.4 92.9 79 Instruments 38 5.4 118.6 118.0 119.0 118.8 119.7 118.4 117.7 117.2 116.8 114.5 115.0 115.1 114.8 113.6 80 Miscellaneous 39 1,3 124.9 123.9 123.5 123.6 122.7 120.2 119.9 120.4 119.0 119.8 120.7 116.6 115.5 114.6 81 Nondurable goods 40.4 114.8 114.7 114.5 113.5 113.5 113.5 112.5 111.8 111.5 111.1 111.5 110.9 110.5 110.2 82 Foods ' ' 20 9.4 113.8 114.0 114.0 113.5 113.0 113.5 113.6 112.6 112.8 112.9 113.1 112.8 112.6 112.9 83 Tobacco products 21 1.6 93.0 89.2 91.7 98.7 96.2 94.8 93.3 94.8 92.9 93.8 95.0 92.3 90.6 90.0 84 Textile mill products 22 1.8 98.9 94.3 92.2 90.5 92.4 90.9 91.0 90.4 86.7 86.8 84.3 86.2 86.5 85.5 85 Apparel products 23 2.2 101.9 98.6 99.1 97.8 97.7 97.6 97.4 97.0 96.5 94.0 95.1 91.6 89.4 87.8 86 Paper and products 26 3.6 113.9 114.3 112.9 110.6 111.0 110.8 106.0 110.6 108.8 107.1 108.1 107.3 108.2 107.0 87 Printing and publishing .... 27 6.7 106.9 107.7 107.4 106.5 106.9 105.9 104.3 102.5 102.3 101.3 101.1 100.6 99.8 99.1 88 Chemicals and products .... 28 9.9 122.0 123.4 123.5 121.1 121.2 122.2 121.4 119.5 119.9 119.5 121.2 121.1 121.3 120.9 89 Petroleum products 29 1.4 115.0 115.5 115.8 114.1 114.5 115.3 114.7 115.4 115.6 115.5 114.6 113.2 111.9 115.3 90 Rubber and plastics 30 3.5 144.9 143.5 141.5 139.5 140.4 139.5 138.8 137.9 137.1 137.7 138.0 137.3 136.5 135.3 91 Leather and products 31 .3 71.4 70.6 70.2 67.6 67.8 67.9 67.5 65.7 63.6 62.2 62.1 62.5 60.8 59.8 92 Mining 6.9 100.7 101.1 101.2 100.9 101.3 102.2 102.5 103.1 103.0 102.5 101.9 101.9 102.0 100.2 93 Metal ' ' 10 .5 97.2 94.3 90.6 98.7 96.5 91.6 87.9 92.1 91.3 88.6 88.8 88.7 87.5 87.8 94 Coal 12 1.0 107.1 105.2 108.3 107.1 113.8 113.4 115.5 114.9 113.9 115.9 111.9 111.8 111.8 106.5 95 Oil and gas extraction 13 4.8 95.6 96.3 96.7 96.2 95.7 96.6 97.1 97.6 97.4 97.0 97.0 96.9 97.0 95.3 96 Stone and earth minerals 14 .6 130.4 132.5 126.7 125.3 130.0 135.0 133.0 134.3 137.1 133.7 130.6 131.3 132.6 132.5 97 Utilities 7.7 120.7 121.8 124.2 127.7 125.2 123.4 121.8 121.3 119.7 119.1 118.2 119.8 118.6 119.4 98 Electric 491.3PT 6.2 123.3 123.9 126.1 128.7 127.1 125.0 124.7 125.2 122.8 122.9 121.0 124.2 122.2 123.3 99 Gas 491,2PT 1.6 109.9 112.7 115.7 122.4 117.0 116.2 110.3 107.1 107.8 105.2 107.4 103.8 105.1 104.9 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 80.5 150.1 150.8 150.6 149.8 149.3 148.2 147.0 145.8 145.1 143.7 143.5 142.9 141.7 140.3 101 Manufacturing excluding computers and office equipment 83.6 144.6 144.8 144.0 142.9 141.7 141.3 140.8 139.8 139.5 138.1 138.4 137.6 136.2 134.5 102 Computers, communications equipment, and semiconductors 5.9 1,101.2 1,184.0 1,191.1 1,193.6 1,166.2 1,146.7 1,127.5 1,089.4 1,065.4 1,036.7 1,006.7 999.4 987.5 978.7 103 Manufacturing excluding computers and semiconductors 81.1 127.2 126.7 125.8 124.8 124.0 123.7 123.3 122.6 122.6 121.5 122.0 121.2 119.9 118.4 104 Manufacturing excluding computers, communications equipment, and semiconductors 79.5 123.9 123.2 122.4 121.3 120.5 120.4 120.0 119.4 119.4 118.5 119.0 118.3 117.1 115.6 Gross value (billions of 1992 dollars, annual rates) MAJOR MARKETS 105 Products, total 2,001.9 2,821.5 2,811.7 2,813.8 2,800.7 2,771.7 2,768.2 2,776.5 2,754.8 2,759.1 2,741.6 2,753.0 2,724.7 2,692.5 2,661.5 106 Final 1,552.1 2,176.4 2,167.9 2,170.5 2,161.0 2,134.6 2,133.7 2,145.9 2,129.3 2,133.0 2,118.1 2,129.7 2,102.6 2,073.8 2,051.3 107 Consumer goods 1,049.6 1,323.8 1,316.5 1,318.2 1,316.7 1,296.7 1,301.7 1,311.5 1,307.1 1,312.4 1,307.9 1,322.5 1,307.6 1,297.4 1,290.5 108 Equipment 502.5 859.5 858.7 859.5 850.5 845.0 837.7 839.5 825.8 823.3 811.6 806.5 793.8 773.0 755.3 109 Intermediate 449.9 645.2 643.8 643.4 639.8 637.1 634.5 630.8 625.7 626.3 623.7 623.5 622.2 618.7 610.3 1. Data in this table appear in the Board's G.17 (419) monthly statistical release. The data Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 (February are also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The 1997), pp. 67-92, and the references cited therein. For details about the construction of latest historical revision of the industrial production index and the capacity utilization rates individual industrial production series, see "Industrial Production: 1989 Developments and was released in November 2001. The recent annual revision will be described in an article in Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. an upcoming 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 • January 2002 2.14 HOUSING AND CONSTRUCTION Monthly figures at seasonally adjusted annual rates except as noted 2000 2001 IItteemm 11999988 11999999 22000000 Dec. Jan. Feb. Mar. Apr. May June July Aug.' Sept. Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 1,612 1,664 1,592 1,553 1,724 1,663 1,627 1,587 1,621 1,587 1,571 1,571 1,528 2 One-family 1,188 1,247 1,198 1,187 1,283 1,228 1,209 1,218 1,205 1,225 1,211 1,210 1,164 3 Two-family or more 425 417 394 366 441 435 418 369 416 362 360 361 364 4 Started 1,617 1,641 1,569 1,532 1,666 1,623 1,592 1,626 1,610 1,634 1,660 1,559 1,572 5 One-family 1,271 1,302 1,231 1,236 1,336 1,288 1,208 1,295 1,285 1,292 1,290 1,271 1,257 6 Two-family or more 346 339 338 296 330 335 384 331 325 342 370 288 315 7 Under construction at end of period1 .... 971 953 934 965 985 989 1,002 1,006 1,016 1,012 1,019 1,009 1,008 8 One-family 659 648 623 652 669 675 676 682 688 688 693 691 688 9 Two-family or more 312 305 310 313 316 314 326 324 328 324 326 318 320 10 Completed 1,474 1,605 1,574 1,527 1,424 1,531 1,478 1,569 1,499 1,643 1,583 1,620 1,539 11 One-family 1,160 1,270 1,242 1,228 1,090 1,201 1,207 1,232 1,225 1,275 1,269 1,276 1,255 12 Two-family or more 315 335 332 299 334 330 271 337 274 368 314 344 284 13 Mobile homes shipped 374 348 250 176 171 180 179 184 186 198 193 199 206 Merchant builder activity in one-family units 14 Number sold 886 880 877 1,001 938 959 953 899 882 889r 902r 876 864 15 Number for sale at end of period1 300 315 301 297 295 295 289 293 296 301 305 304 306 Price of units sold (thousands 16 Median 152.5 161.0 169.0 162.0 171.3 169.1 166.3 175.2 175.3 179.4r 174.2' 171.1 162.4 17 Average 181.9 195.6 207.0 208.1 209.0 211.0 210.2 205.5 211.4 211.7' 208. lr 203.4 195.7 EXISTING UNITS (one-family) 18 Number sold 4,970 5,205 5,113 4,940 5,200 5,190 5,430 5,220 5,360 5,330 5,200 5,540 4,890 Price of units sold (thousands of dollars)1 19 Median 128.4 133.3 139.0 139.7 137.1 138.6 143.4 143.1 145.0 152.2 151.7 153.7 148.1 20 Average 159.1 168.3 176.2 178.5 175.8 174.6 179.5 179.9 183.6 191.1 190.6 193.5 186.7 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 703,533 763,914 817,130 838,731 859,815 869,334 869,140 870,826 869,574 861,571 856,674' 846,100 843,107 2.2 Private 550,754 595,667 641,269 660,849 673,715 681,826 681,176 677,429 670,838 665,322 661,136' 646,368 641,005 23 Residential 314,514 349,560 375,268 379,593 386,088 398,863 395,080 392,160 394,330 391,508 390,464' 389,889 385,363 24 Nonresidential 236,240' 246,107' 266,001' 281,256 287,627 282,963 286,096 285,269 276,508 273,814 270,672' 256,479 255,642 25 Industrial buildings 40,547 32,794 31,984 31,398 35,878 33,386 34,823 34,662 31,943 32,966 34,611' 31,648 30,983 26 Commercial buildings 95,760 104,531 116,988 125,234 125,402 124,568 128,792 124,935 118,601 116,842 115,714' 106,001 106,071 27 Other buildings 39,609 40,906 44,505 45,707 46,567 46,264 47,117 46,080 46,643 46,020 45,454' 44,354 44,303 28 Public utilities and other 60,324 67,876 72,523 78,917 79,780 78,745 75,364 79,592 79,321 77,986 74,893' 74,476 74,285 29 Public 152,779 168,247 175,861 177,883 186,100 187,508 187,964 193,397 198,736 196,249 195.537' 199,731 202,102 30 Military 2,539 2,142 2,334 2,107 2,270 2,342 2,131 2,530 2,274 2,477 2,385' 2,561 2,369 31 Highway 45,251 52,024 52,851 50,189 55,368 56,204 57,443 57,717 60,437 61,534 60,327' 56,131 55,163 32 Conservation and development 5,415 5,995 6,043 6,339 7,381 7,838 7,573 6,332 7,216 6,592 6,063R 7,064 7,328 33 Other 99,575 108,086 114,634 119,248 121,081 121,124 120,817 126,818 128,809 125,646 126,762' 133,975 137,242 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 OOOcccttt... 22000000 22000011 222000000111111 OOcctt.. OOcctt.. Dec. Mar.r Juner Sept.' June July Aug. Sept. Oct. CONSUMER PRICES2 (1982-84=100) 1 All items 3.4 2.1 2.3 4.0 3.7 .7 .2 -.3 .1 .4 -.3 177.7 ? Food 2.4 3.4 2.1 4.1 3.3 2.8 .4 .3 .2 .2 .5 174.9 3 Energy items 15.9 -5.6 3.8 6.0 16.8 -18.2 -.9 -5.6 -1.9 2.6 -6.3 122.1 4 All items less food and energy 2.5 2.6 2.0 3.5 2.6 2.4 .3 .2 .2 .2 .2 187.6 5 Commodities .2 .0 .0 1.4 -1.6 .3 .0 .1 -.4 .3 -.1 145.6 6 Services 3.5 3.7 3.2 4.2 4.5 3.1 .5 .2 .5 .1 .2 211.7 PRODUCER PRICES (1982=100) 7 Finished goods 3.7 -.4 2.9 4.7 .9 -1.4 -.4' -1.1' .4 .4 -1.6 139.6 8 Consumer foods 1.6 2.8 2.7 10.5 .9 2.0 -.2 -.6 .9 .2 -.4 141.8 9 Consumer energy 19.3 -9.5 12.0 9.5 -4.2 -16.3 -2.5r -6.2' 1.1 .9 -7.7 90.1 10 Other consumer goods 1.2 1.3 1.0 2.3 2.8 1.3 ,lr .0' -.1 .4 -.4 157.5 11 Capital equipment .9 .0 .3 .0 .6 1.7 .R .4' -.1 .1 -.7 139.8 Intermediate materials 12 Excluding foods and feeds 4.9 -2.8 1.2 1.5 -1.2 -5.6 -.2 -1.1 -.5 .1 -1.5 128.2 13 Excluding energy 2.1 -1.2 -.3 1.5 -.9 -3.7 -.1 -.4 -.4 -.1 -.4 135.3 Crude materials 14 Foods .7 5.2 36.5 15.6 -6.8 4.2 ,0r .5' -.6 1.1 -2.6 104.7 15 Energy 63.2 —48.1 102.6 -42.4 -52.0 -61.6 -15.8r -7.9' -4.4 -10.7 -19.2 75.2 16 Other -.5 —10-8 -9.2 -10.8 -15.0 -4.5 -l.lr -.5' -.8 .2 -1.7 125.8 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 • January 2002 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 Q3 Q4 Ql Q2 Q3 GROSS DOMESTIC PRODUCT 1 Total 8,781.5 9,268.6 9,872.9 9,937.5 10,027.9 10,141.7 10,202.6 10,247.7 By source 2 Personal consumption expenditures 5,856.0 6,250.2 6,728.4 6,785.5 6,871.4 6,977.6 7,044.6 7,059.0 3 Durable goods 693.2 760.9 819.6 825.4 818.7 838.1 844.7 842.2 4 Nondurable goods 1,708.5 1,831.3 1,989.6 2,012.4 2,025.1 2,047.1 2,062.3 2,057.8 5 Services 3,454.3 3,658.0 3,919.2 3,947.7 4,027.5 4,092.4 4,137.6 4,158.9 6 Gross private domestic investment 1,538.7 1,636.7 1,767.5 1,788.4 1,780.3 1,722.8 1,669.9 1,622.6 7 Fixed investment 1,465.6 1,578.2 1,718.1 1,735.9 1,741.6 1,748.3 1,706.5 1,669.2 8 Nonresidential 1,101.2 1,174.6 1,293.1 1,314.9 1,318.2 1,311.2 1,260.2 1,219.7 9 Structures 282.4 283.5 313.6 321.1 330.9 345.8 338.6 329.7 10 Producers' durable equipment 818.9 891.1 979.5 993.8 987.3 965.4 921.7 890.0 11 Residential structures 364.4 403.5 425.1 421.0 423.4 437.0 446.2 449.5 12 Change in business inventories 73.1 58.6 49.4 52.5 38.7 -25.5 -36.6 -46.6 13 Nonfarm 72.3 60.1 51.1 55.3 37.8 -26.2 -35.3 -44.0 14 Net exports of goods and services -151.7 -250.9 -364.0 -380.6 -390.6 -363.8 -347.4 -277.3 15 Exports 964.9 989.8 1,102.9 1,131.1 1,121.0 1,117.4 1,079.6 1,028.1 16 Imports 1,116.7 1,240.6 1,466.9 1,511.8 1,511.6 1,481.2 1,427.0 1,305.4 17 Government consumption expenditures and gross investment 1,538.5 1,632.5 1,741.0 1,744.2 1,766.8 1,805.2 1,835.4 1,843.5 18 Federal 539.2 564.0 590.2 587.0 594.2 605.3 609.9 617.1 19 State and local 999.3 1,068.5 1,150.8 1,157.2 1,172.6 1,199.8 1,225.5 1,226.4 By major type of product 20 Final sales, total 8,708.4 9,210.0 9,823.6 9,884.9 9,989.2 10,167.2 10,239.1 10,294.3 21 Goods 3,232.3 3,418.6 3,644.8 3,677.2 3,670.6 3,718.8 3,715.0 3,697.9 22 Durable 1,524.4 1,618.8 1,735.2 1,753.8 1,740.7 1,755.8 1,737.2 1,704.0 23 Nondurable 1,707.9 1,799.8 1,909.7 1,923.5 1,929.9 1,963.1 1,977.8 1,993.9 24 Services 4,678.6 4,939.1 5,268.5 5,296.1 5,393.0 5,482.8 5,545.7 5,632.4 25 Structures 797.5 852.4 910.3 911.6 925.6 965.6 978.4 964.0 26 Change in business inventories 73.1 58.6 49.4 52.5 38.7 -25.5 -36.6 -46.6 27 Durable goods 44.7 35.3 34.7 33.0 31.5 -31.0 -42.3 -47.0 28 Nondurable goods 28.5 23.3 14.7 19.5 7.2 5.5 5.8 .4 MEMO 29 Total GDP in chained 1996 dollars 8,508.9 8,856.5 9,224.0 9,260.1 9,303.9 9,334.5 9,341.7 9,333.4 NATIONAL INCOME 30 Total 7,041.4 7,462.1 7,980.9 8,047.2 8,124.0 8,169.7 8,207.9 n.a. 31 Compensation of employees 4,989.6 5,310.7 5,715.2 5,759.3 5,868.9 5,955.7 6,010.8 6,043.9 32 Wages and salaries 4,192.1 4,477.4 4,837.2 4,875.8 4,973.2 5,049.4 5,099.8 5,129.4 33 Government and government enterprises 692.7 724.3 768.4 772.6 776.6 788.8 799.6 812.0 34 Other 3,499.4 3,753.1 4,068.8 4,103.2 4,196.6 4,260.6 4,300.2 4,317.5 35 Supplement to wages and salaries 797.5 833.4 878.0 883.5 895.7 906.3 911.0 914.5 36 Employer contributions for social insurance 306.9 323.6 343.8 345.6 350.8 357.1 358.8 359.2 37 Other labor income 490.6 509.7 534.2 537.9 544.9 549.3 552.2 555.3 38 Proprietors' income1 623.8 672.0 715.0 719.3 725.2 735.2 745.3 752.3 39 Business and professional' 598.2 645.4 684.4 687.6 693.5 705.4 716.6 720.5 40 Farm1 25.6 26.6 30.6 31.6 31.7 29.8 28.7 31.8 41 Rental income of persons2 138.6 147.7 141.6 138.3 141.7 139.6 139.0 143.6 42 Corporate profits1 777.4 825.2 876.4 895.0 847.6 789.8 759.8 n.a. 43 Profits before tax3 721.1 776.3 845.4 858.3 816.5 755.7 738.3 n.a. 44 Inventory valuation adjustment 18.3 -2.9 -12.4 -3.6 -7.3 -1.9 -8.8 n.a. 45 Capital consumption adjustment 38.0 51.7 43.4 40.4 38.4 36.0 30.3 12.6 46 Net interest 511.9 506.5 532.7 535.3 540.6 549.4 553.0 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 2000 2001 AAccccoouunntt 11999988 11999999 22000000 Q3 Q4 Ql Q2 Q3 PERSONAL INCOME AND SAVING 1 Total personal income 7,426.0 7,777.3 8,319.2 8,381.5 8,519.6 8,640.2 8,714.6 8,777.3 ? Wage and salary disbursements 4,192.8 4,472.2 4,837.2 4,875.8 4,973.2 5,049.4 5,099.8 5,129.4 3 Commodity-producing industries 1,038.5 1,088.7 1,163.7 1,173.2 1,195.5 1,206.3 1,204.4 1,200.8 4 Manufacturing 756.6 782.0 830.1 838.0 852.2 853.3 850.2 843.5 Distributive industries 948.9 1,021.0 1,095.6 1,102.4 1,125.9 1,140.3 1,148.2 1,148.9 6 Service industries 1,512.7 1,638.2 1,809.5 1,827.6 1,875.2 1,914.0 1,947.6 1,967.7 7 Government and government enterprises 692.7 724.3 768.4 772.6 776.6 788.8 799.6 812.0 8 Other labor income 490.6 509.7 534.2 537.9 544.9 549.3 552.2 555.3 9 Proprietors' income1 623.8 672.0 715.0 719.3 725.2 735.2 745.3 752.3 in Business and professional1 598.2 645.4 684.4 687.6 693.5 705.4 716.6 720.5 11 Farm1 25.6 26.6 30.6 31.6 31.7 29.8 28.7 31.8 1? Rental income of persons2 138.6 147.7 141.6 138.3 141.7 139.6 139.0 143.6 13 Dividends 348.3 343.1 379.2 385.8 396.6 404.8 411.9 420.0 14 Personal interest income 964.4 950.0 1,000.6 1,009.2 1,013.1 1,010.9 1,001.0 991.3 15 Transfer payments 983.7 1,019.6 1,069.1 1,074.6 1,089.0 1,123.1 1,139.4 1,160.0 16 Old-age survivors, disability, and health insurance benefits 578.1 588.0 617.3 620.9 626.5 651.4 660.1 671.8 17 LESS: Personal contributions for social insurance 316.3 337.1 357.7 359.4 364.1 372.1 374.0 374.6 18 EQUALS: Personal income 7,426.0 7,777.3 8,319.2 8,381.5 8,519.6 8,640.2 8,714.6 8,777.3 19 LESS: Personal tax and nontax payments 1,070.4 1,159.2 1,288.2 1,300.2 1,329.8 1,345.2 1,351.4 1,197.0 20 EQUALS: Disposable personal income 6,355.6 6,618.0 7,031.0 7,081.3 7,189.8 7,295.0 7,363.2 7,580.3 21 LESS: Personal outlays 6,054.1 6,457.2 6,963.3 7,026.9 7,115.1 7,216.2 7,281.7 7,293.6 22 EQUALS: Personal saving 301.5 160.9 67.7 54.5 74.7 78.8 81.5 286.7 MEMO Per capita (chained 1996 dollars) ?3 Gross domestic product 31,449.2 32,441.9 33,490.3 33,587.6 33,661.1 3333,,669988..55 3333,,663399..77 3333,,553377..11 74 Personal consumption expenditures 21,007.2 21,862.6 22,720.7 22,822.4 22,941.7 23,063.1 23,148.7 23,168.5 25 Disposable personal income 22,800.0 23,150.0 23,742.0 23,814.0 24,006.0 24,111.0 24,200.0 24,880.0 26 Saving rate (percent) 4.7 2.4 1.0 .8 1.0 1.1 1.1 3.8 GROSS SAVING 27 Gross saving 1,647.2 1,707.4 1,785.7 1,807.4 1,799.7 1,754.0 1,750.5 n.a. 28 Gross private saving 1,375.0 1,348.0 1,323.0 1,329.6 1,332.7 1,307.9 1,321.2 n.a. 29 Personal saving 301.5 160.9 67.7 54.5 74.7 78.8 81.5 286.7 30 Undistributed corporate profits' 189.9 228.7 225.3 233.9 197.0 147.8 119.5 n.a. 31 Corporate inventory valuation adjustment 18.3 -2.9 -12.4 -3.6 -7.3 -1.9 -8.8 n.a. Capital consumption allowances 3? Corporate 620.2 669.2 727.1 736.0 749.7 776633..88 778855..66 884477..77 33 Noncorporate 264.2 284.1 302.8 305.2 311.3 317.5 334.6 329.8 34 Gross government saving 272.2 359.4 462.8 477.8 467.1 446.1 429.3 n.a. 35 Federal 132.0 210.9 315.0 326.9 320.5 303.7 286.2 n.a. 36 Consumption of fixed capital 88.2 91.7 96.4 97.0 97.9 98.4 99.4 99.9 37 Current surplus or deficit (-), national accounts 43.8 119.2 218.6 229.9 222.5 205.3 186.7 n.a. 38 State and local 140.2 148.5 147.8 150.9 146.6 142.5 143.2 n.a. 39 Consumption of fixed capital 99.5 106.4 114.9 116.1 118.0 120.2 121.9 129.5 40 Current surplus or deficit (-), national accounts 40.7 42.1 32.8 34.8 28.6 22.3 21.3 n.a. 41 Gross investment 1,616.2 1,634.7 1,655.3 1,651.1 1,649.7 1,633.5 1,607.3 n.a. 47 Gross private domestic investment 1,538.7 1,636.7 1,767.5 1,788.4 1,780.3 1,722.8 1,669.9 1,622.6 43 Gross government investment 277.1 304.6 318.3 314.0 322.8 330.9 344.0 335.7 44 Net foreign investment -199.7 -306.6 -430.5 -451.3 ^153.4 -420.2 -406.6 n.a. 45 Statistical discrepancy -31.0 -72.7 -130.4 -156.3 -150.0 -120.5 -143.2 n.a. 1. With inventory valuation and capital consumption adjustments. SOURCE. U.S. Department of Commerce, Survey of Current Business. 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 International Statistics • January 2002 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted except as noted1 2000 2001 IItteemm ccrreeddiittss oorr ddeebbiittss 11999988 11999999 22000000 Q3 Q4 Qi Q2r Q3P 1 Balance on current account -217,457 -324,364 -444,667 -115,305 -116,324 -111,778 -107,576 -94,980 2 Balance on goods and services -166,828 -261,838 -375,739 -97,340 -100,293 -95,023 -90,543 -77,587 3 Exports 932,694 957,353 1,065,702 272,497 270,131 269,092 259,315 243,391 4 Imports -1.099,522 -1,219,191 -1,441.441 -369,837 -370,424 -364,115 -349,858 -320,978 5 Income, net -6,202 -13,613 -14,792 -4,885 642 -5,021 -4,995 -5,038 6 Investment, net -1,211 -8,511 -9,621 -3,620 1,971 -3,661 -3,658 -3,716 7 Direct 66,253 67,044 81,231 21,049 25,703 22,673 23,426 24,045 8 Portfolio -67,464 -75,555 -90,852 -24,669 -23,732 -26,334 -27,084 -27,761 9 Compensation of employees -4,991 -5,102 -5,171 -1,265 -1,329 -1,360 -1,337 -1,322 10 Unilateral current transfers, net -44,427 -48,913 -54,136 -13,080 -16,673 -11,734 -12,038 -12,355 11 Change in U.S. government assets other than official reserve assets, net (increase, -) -422 2,751 -944 114 -359 21 -786 23 12 Change in U.S. official reserve assets (increase, —) -6,783 8,747 -290 -346 -1,410 190 -1,343 -3,559 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -147 10 -722 -182 -180 -189 -156 -145 15 Reserve position in International Monetary Fund -5,119 5,484 2,308 1,300 -1,083 574 -1,015 -3,242 16 Foreign currencies -1,517 3,253 -1,876 -1,464 -147 -195 -172 -172 17 Change in U.S. private assets abroad (increase, -) -352,427 ^48,565 -579,718 -107,495 -179,779 -243,331 -70,046 -11,847 18 Bank-reported claims2 -35,572 -76,263 -138,500 -18,147 -71,574 -109,789 -105 56,025 19 Nonbank-reported claims -38,204 -85,700 -163,846 -14,585 -44,514 -61,011 22,232 -29,773 20 U.S. purchase of foreign securities, net -136,135 -131,217 -124,935 -33,129 -24,621 -31,591 -51,109 13,963 21 U.S. direct investments abroad, net -142,516 -155,385 -152,437 -41,634 -39,070 ^10,940 -41,064 -52,062 22 Change in foreign official assets in United States (increase, +) -19,948 43,551 37,619 12,247 -3,573 4,898 -20,879 16,814 23 U.S. Treasury securities -9,921 12,177 -10,233 -9,001 -13,436 -1,027 -20,783 15,810 24 Other U.S. government obligations 6,332 20,350 40,909 14,272 8,196 3,574 9,932 -216 25 Other U.S. government liabilities2 -3,371 -2,855 -1,987 -220 -293 -1,246 -926 113 26 Other U.S. liabilities reported by U.S. banks2 -9,501 12,964 5,803 6,884 980 2,594 -10,130 -874 27 Other foreign official assets3 -3,487 915 3,127 312 980 1,003 1,028 1,981 28 Change in foreign private assets in United States (increase, +) 524,412 770,193 986,599 209,861 298,894 341,762 247,460 35,297 29 U.S. bank-reported liabilities4 39,769 54,232 87,953 -1,910 43,365 6,890 44,271 -54,015 30 U.S. nonbank-reported liabilities 23,140 69,075 177,010 19,078 48,344 130,624 3,375 -13,298 31 Foreign private purchases of U.S. Treasury securities, net 48,581 -20,490 -52,792 -12,503 -10,395 656 -8,678 -9,436 32 U.S. currency flows 16,622 22,407 1,129 757 6,230 2,311 2,772 8,203 33 Foreign purchases of other U.S. securities, net 218,091 343,963 485,644 128,393 126,643 148,809 140,512 77,455 34 Foreign direct investments in United States, net 178,209 301,006 287,655 76,046 84,707 52,472 65,208 26,388 35 Capital account transactions, net5 678 -3,491 705 175 184 173 177 182 36 Discrepancy 71,947 -48,822 696 749 2,367 8,065 -47,007 58,070 37 Due to seasonal adjustment -9,977 3,856 8,821 -1,835 -8,617 38 Before seasonal adjustment 71,947 —48,822 696 10,726 -1,489 -756 -45,172 66,687 MEMO Changes in official assets 39 U.S. official reserve assets (increase, —) -6,783 8,747 -290 -346 -1,410 190 -1,343 -3,559 40 Foreign official assets in United States, excluding line 25 (increase, +) -16,577 46,406 39,606 12,467 -3,280 6,144 -19,953 16,701 41 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) -11,531 1,621 11,582 3,636 164 589 -1,743 -4,057 1. Seasonal factors are not calculated for lines 11-16, 18-20, 22-35, and 38^11. 5. Consists of capital transfers (such as those of accompanying migrants entering or 2. Associated primarily with military sales contracts and other transactions arranged with leaving the country and debt forgiveness) and the acquisition and disposal of nonproduced or through foreign official agencies. nonfinancial assets. 3. Consists of investments in U.S. corporate stocks and in debt securities of private SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current corporations and state and local governments. Business. 4. Reporting banks included all types of depository institutions as well as some brokers and dealers. 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 2001 IItteemm 11999988 11999999 22000000 Mar. Apr. May June July Aug. Sept.1' 1 Goods and services, balance -166,686 -261,838 -375,739 -32,957 -31,518 -28,210 -29,068 -29,168 -27,106 -18,692 2 Merchandise -246,855 -345,434 -452,207 -38,781 -37,656 -34,449 -35,553 -35,838 -34,073 -35,917 3 Services 79,868 83,596 76,468 5,824 6,138 6,239 6,485 6,670 6,967 17,225 4 Goods and services, exports 933,053 957,353 1,065,702 88,636 87,064 87,571 85,898 83,595 84,513 77,293 5 Merchandise 670,324 684,553 772,210 63,884 62,170 62,846 60,848 58,688 59,533 55,554 6 Services 262,729 272,800 293,492 24,752 24,894 24,725 25,050 24,907 24,980 21,739 7 Goods and services, imports -1,099,739 -1,219,191 -1,441,441 -121,593 -118,582 -115,781 -114,966 -112,763 -111,619 -95,985 8 Merchandise -917,179 -1,029,987 -1,224,417 -102,665 -99,826 -97,295 -96,401 -94,526 -93,606 -91,471 9 Services -182,560 -189,204 -217,024 -18,928 -18,756 -18,486 -18,565 -18,237 -18,013 ^1,514 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 2001 AAsssseett 11999988 11999999 22000000 Apr. May June July Aug. Sept. Oct. NOV.P 1 Total 81,761 71,516 67,647 64,731 65,254 64,847 65,736 67,852 70,963 69,707 69,158 2 Gold stock1 11,046 11,048 11,046 11,046 11,044 11,044 11,044 11,044 11,045 11,045 11,045 3 Special drawing rights2-3 10,603 10,336 10,539 10,420 10,481 10,409 10,518 10,913 10,919 10,827 10,864 4 Reserve position in International Monetary Fund2 24,111 17,950 14,824 13,816 14,283 14,619 14,965 15,297 18,404 17,787 17,293 5 Foreign currencies4 36,001 32,182 31,238 29,449 29,446 28,775 29,209 30,598 30,595 30,048 29,956 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 2001 AAsssseett 11999988 11999999 22000000 Apr. May June July Aug. Sept. Oct. Nov/ 1 Deposits 167 71 215 101 86 102 84 80 608 75 528 Held in custody 2 U.S. Treasury securities2 607,574 632,482 594,094 585,710 583.655 586,607 578,573 590,820 587,566 599,043 600,129 3 Earmarked gold3 10,343 9,933 9,451 9,215 9,154 9,100 9,100 9,100 9,100 9,099 9,099 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 • January 2002 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 2001 IItteemm 11999999 22000000 Mar. Apr. May June July Aug/ Sept.P 1 Total1 806,318 845,869 865,426 855,098 837,267 835,474 845,155 839,457 852,175 By type 2 Liabilities reported by banks in the United States2 138,847 144,593 154,601 158,387 143,921 144,471 151,858 137,621 143,597 3 U.S. Treasury bills and certificates3 156,177 153,010 155,204 144,158 137,933 139,195 143,288 151,850 153,899 US. Treasury bonds and notes 4 Marketable 422.266 415,964 419,106 410,066 410,979 407,736 406,995 407,338 409.887 Nonmarketable4 6,111 5,348 4,984 5,017 5,049 5,081 4,846 4,805 4,036 6 U.S. securities other than U.S. Treasury securities5 82,917 126.954 131,531 137,470 139,385 138,991 138.168 137,843 140,756 By area 7 244,805 253,592 250,420 247.128 251,505 252.391 262.830 260,593 262,568 8 12.503 12.394 10.396 10,474 10,967 11,573 11,727 12,033 11,299 9 Latin America and Caribbean 73,518 76,753 79,143 79,410 76,135 79.094 79,359 76,251 75,751 10 463.703 488,170 511.025 501,085 482,990 478,284 475,475 474,650 488,358 11 Africa 7,523 9,165 9,102 9,341 9,272 9,054 10,574 9,864 10,249 12 Other countries 4,266 5,795 5,340 7,660 6,398 5,078 5,190 6,066 3,950 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 corportions 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 Sept. Dec. Mar. June 1 Banks' liabilities 117,524 101,125 88,537 78,852 76,345 89,394 107,593 2 Banks' claims 83,038 78,162 67,365 60,355 56,647 73,179 77,423 3 Deposits 28,661 45,985 34,426 26,306 23,292 29,902 32,765 4 Other claims 54.377 32,177 32,939 34.049 33,355 43,277 44,658 5 Claims of banks' domestic customers2 8,191 20,718 20,826 19.123 24,411 21,105 21,144 1. Data on claims exclude foreign currencies held by U.S. monetary authorities. 2. Assets owned by customers of the reporting bank located in the United States that represent claims on foreigners held by reporting banks for the accounts of the domestic customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-Reported Data A53 3.18 BANKS' OWN C L A I MS ON FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 2001 IItteemm 11999988 11999999 22000000 Mar. Apr. May June July Aug.' Sept.P BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 1,347,837 1,408,740 l,511,380r 1,505,606 1,530,622r l,533,304r l,519,682r 1,519,393' 1,508,533 1,489,069 2 Banks' own liabilities 884,939 971,536 l,077,606r 1,076,302 1,093,322 1,115,113 1,096,127' 1,099,081' 1,077,761 1,057,226 3 Demand deposits 29,558 42,884 33,365 33,918 30,210 29,123 32,833' 29,950 33,670 34,262 4 Time deposits2 151,761 163,620 187,883 182,257 189,539 181,613 180,645 175,964 175,788 178,677 5 Other3 140,752 155,853 171,40 lr 200,280 202,213 207,146 212,874 225,276 206,037 196,294 6 Own foreign offices4 562,868 609,179 684,957 659,847 671,360 697,231 669,775 667,891' 662,266 647,993 1 Banks' custodial liabilities5 462,898 437,204 433,774 429,304 437,300' 418,191' 423,555' 420,312' 430,772 431,843 8 U.S. Treasury bills and certificates6 183,494 185,676 177,846 171,823 160,702' 156,022' 156,525' 160,847' 170,605 173,115 9 Short-term agency securities7 n.a. n.a. n.a. 71,454 69,543 62,425 60,081 61,471 62,801 62,114 10 Other negotiable and readily transferable instruments8 141,699 132,617 145,840 65,154 78,258' 80,917' 78,790' 76,503' 76,676 74,698 11 Other 137,705 118,911 110,088 120,873 128,797' 118,827' 128,159' 121,491 120,690 121,916 12 Nonmonetary international and regional organizations' 11,883 15,276 12,542 12,290 12,833 14,668 13,818 11,255 13,214 13,309 13 Banks' own liabilities 10,850 14,357 12,140 11,746 12,344 14,342 13,479 11,020 12,983 13,075 14 Demand deposits 172 98 41 23 14 15 28 50 21 36 15 Time deposits2 5,793 10,349 6,246 5,302 5,301 3,532 4,228 2,896 2,738 2,299 16 Other3 4,885 3,910 5,853 6,421 7,029 10,795 9,223 8,074 10,224 10,740 17 Banks' custodial liabilities5 1,033 919 402 544 489 326 339 235 231 234 18 U.S. Treasury bills and certificates6 636 680 252 229 170 105 68 78 92 118 19 Short-term agency securities7 n.a. n.a. n.a. 137 144 132 134 132 117 102 20 Other negotiable and readily transferable instruments8 397 233 149 177 175 87 137 25 21 13 21 Other 0 6 1 1 0 2 0 0 1 1 22 Official institutions10 260,060 295,024 297,603 309,805 302,545 281,854 283,666 295,146 289,471 297,496 23 Banks' own liabilities 80,256 97,615 96,989 97,028 103,454 96,696 100,053 108,991 94,150 101,385 24 Demand deposits 3,003 3,341 3,952 3,511 2,552 2,522 2,465 2,169 2,934 3,042 25 Time deposits2 29,506 28,942 35,573 27,959 31,985 26,625 32,752 28,121 26,441 31,971 26 Other3 47,747 65,332 57,464 65,558 68,917 67,549 64,836 78,701 64,775 66,372 27 Banks' custodial liabilities5 179,804 197,409 200,614 212,777 199,091 185,158 183,613 186,155 195,321 196,111 28 U.S. Treasury bills and certificates6 134,177 156,177 153,010 155,204 144,158 137,933 139,195 143,288 151,850 153,899 29 Short-term agency securities7 n.a. n.a. n.a. 53,295 51,107 43,193 40,301 39,971 40,727 39,961 30 Other negotiable and readily transferable instruments8 44,953 41,182 47,366 4,064 3,325 3,509 3,647 2,686 2,558 2,230 31 Other 674 50 238 214 501 523 470 210 186 21 32 Banks" 885,336 900,379 972,902 959,967' 966,229' 990,190' 969,810' 957,696' 955,544 928,908 33 Banks' own liabilities 676,057 728,492 821,276 812,697' 816,622' 845,636' 816,666' 811,173' 809,835 787,206 34 Unaffiliated foreign banks 113,189 119,313 136,319 152,850' 145,262' 148,405' 146,891' 143,282' 147,569 139,213 35 Demand deposits 14,071 17,583 15,522 16,433 13,030 12,143 15,211 12,548 14,585 14,928 36 Time deposits2 45,904 48,140 66,904 72,926 72,535 70,700 64,249 64,094 65,652 64,816 37 Other3 53,214 53,590 53,893 63,491' 59,697' 65,562' 67,431' 66,640' 67,332 59,469 38 Own foreign offices4 562,868 609,179 684,957 659,847 671,360 697,231 669,775 667,891' 662,266 647,993 39 Banks' custodial liabilities5 209,279 171,887 151,626 147,270 149,607' 144,554' 153,144' 146,523' 145,709 141,702 40 U.S. Treasury bills and certificates6 35,359 16,796 16,023 7,922 7,233 8,535 8,455 9,093 9,582 8,781 41 Short-term agency securities7 n.a. n.a. n.a. 2,324 2,824 3,772 3,169 2,535 2,421 2,628 42 Other negotiable and readily transferable instruments8 45,332 45,695 36,036 27,817 25,738' 28,319' 27,836' 27,097' 27,042 23,889 43 Other 128,588 109,396 99,567 109,207 113,812' 103,928' 113,684' 107,798 106,664 106,404 44 Other foreigners 190,558 198,061 228,333' 223,544' 249,015' 246,592' 252,388' 255,296' 250,304 249,356 45 Banks' own liabilities 117,776 131,072 147,201' 154,831' 160,902' 158,439' 165,929' 167,897' 160,793 155,560 46 Demand deposits 12,312 21,862 13,850 13,951 14,614 14,443 15,129' 15,183 16,130 16,256 47 Time deposits2 70,558 76,189 79,160 76,070 79,718 80,756 79,416 80,853 80,957 79,591 48 Other3 34,906 33,021 54,191' 64,810' 66,570' 63,240' 71,384' 71,861' 63,706 59,713 49 Banks' custodial liabilities5 72,782 66,989 81,132 68,713 88,113' 88,153' 86,459' 87,399' 89,511 93,796 50 U.S. Treasury bills and certificates6 13,322 12,023 8,561 8,468 9,141' 9,449' 8,807' 8,388' 9,081 10,317 51 Short-term agency securities7 n.a. n.a. n.a. 15,698 15,468 15,328 16,477 18,833 19,536 19,423 52 Other negotiable and readily transferable instruments8 51,017 45,507 62,289 33,096 49,020' 49,002' 47,170' 46,695' 47,055 48,566 53 Other 8,443 9,459 10,282 11,451 14,484 14,374 14,005 13,483 13,839 15,490 MEMO 54 Negotiable time certificates of deposits in custody for foreigners 27,026 30,345 34,217 24,518 26,238 25,912 24,884 22,640 24,442 23,228 55 Repurchase agreements7 n.a. n.a. n.a. 129,671 119,577 119,901 126,508 138,328 132,705 111,109 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 deposit, which are included in "Other negotiable 7. Data available beginning January 2001. 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 subsidi- 9. Principally the International Bank for Reconstruction and Development, the Interaries 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 fore foreign customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • January 2002 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued Payable in U.S. dollars Millions of dollars, end of period 2001 IItteemm 11999988 11999999 22000000 Mar. Apr. May June' July Aug.' Sept.p AREA 56 Total, all foreigners 1,347,837 1,408,740 l,511,380r 1,505,606 l,530,622r 1,533,304' 1,519,682 1,519,393' 1,508,533 1,489,069 57 Foreign countries 1,335,954 1,393,464 l,498,837r 1,493,315 l,517,788r 1,518,635' 1,505,863 1,508,137' 1,495,319 1,475,760 58 Europe 427,375 441,810 446,788 429,577 43 l,297r 464,658' 458,147 449,630' 431,159 414,092 59 Austria 3,178 2,789 2,692 2,178 2,771 2,593 2,026 2,040 2,370 2,398 60 Belgium12 42,818 44,692 33,399 5,432 5,309 5,895 6,270 7,058 6,624 6,424 61 Denmark 1,437 2,196 3.000 2,919 3,412 2,910 3,063 2.596 3,294 3,243 62 Finland 1,862 1,658 1,411 1,286 1,769 1,144 2,395 1,574 1,003 1,267 63 France 44,616 49,790 37,833 42,758 39,125 40,209 40,077 42,710 39,662 38,264 64 Germany 21,357 24,753 35,519 30,863 29,59 lr 30,341' 32,358 32,336' 27,764 20,385 65 Greece 2,066 3,748 2,011 1,496 1,336 1,525 1,653 2,288 2,607 2,440 66 Italy 7,103 6,775 5,072 5,853 5,272r 5,534' 6,767 5,877 4,761 5,803 6/ Luxembourg12 n.a. n.a. n.a. 12,585 14,505 15,046 14,961 14,568 14,411 15,065 68 Netherlands 10,793 8,143 7,047 7,079 10,146' 10,772 9,621 11,372 11,537 11,145 69 Norway 710 1,327 2,305 8,362 4,807r 2,573' 4,584 3,540' 3,961 3,565 70 Portugal 3,236 2,228 2,403 1,731 1,949 2,041 2,287 2,662 2,490 2,594 71 Russia 2,439 5,475 19,018 18,625 19,917 21,357 22,839 23,966 22,687 22,942 n Spain 15,781 10,426 7,787 9,503 7,750 7,886 7,412 6,974 7,286 8,927 u Sweden 3,027 4,652 6,497 6,738 6,025 5,284 5,507 4,111 3,233 3,760 14 Switzerland 50,654 63,485 74,635 54,038 66,008r 93,211' 73,119 65,942' 53,148 39,576 75 Turkey 4,286 7,842 7,548 5,646 4,556' 7,171' 5,487 6,194' 7,068 6,203 76 United Kingdom 181,554 172,687 167,757 147,123 137,957 139,507 146,207 137,207' 138,121 139,218 II Channel Islands and Isle of Man11 n.a. n.a. n.a. 36,040 36,013 34,742 34,994 35,018 35,745 36,072 78 Yugoslavia14 233 286 276 292 303 301 297 395 297 321 /9 Other Europe and other former U.S.S.R.15 30,225 28,858 30,578 29,030 32,776 34,616 36,223 41,202 43,090 44,480 80 Canada 30,212 34,214 30,982 24,273 27,964' 25,984' 25,973 26,378' 28,098 26,117 81 Latin America 121,327 117,495 120,04 lr 114,697 117,645' 113,608' 117,601 118,679' 120.852 119,370 82 Argentina 19,014 18,633 19,451 12,932 14,671' 12,647' 16,485 13,297' 11,261 15,140 83 Brazil 15,815 12,865 10,852 10,576 10,860' 11,266' 12,588 14,371' 16,143 16,981 84 Chile 5,015 7,008 5,892 5,176 5,450' 5,702' 5,491 5,443' 5,322 5,740 85 Colombia 4,624 5,669 4,542 4,362 4,620' 4,746' 4,631 4,397' 4,582 4,449 86 Ecuador 1,572 1,956 2,112r 2,202 2,187r 2,140' 1,981 2,145' 2,170 2,117 87 Guatemala 1,336 1,626 1,601 1,515 1,564' 1,594' 1,515 1,530' 1,466 1,442 88 Mexico 37,157 30,717 32,166 34,105 34,290' 33,192' 33,349 34,697' 37,943 37,432 89 Panama 3,864 4,415 4.240 4,034 3,493' 3,654' 3,525 3,705' 3,683 3,773 90 Peru 840 1,142 1,427 1,792 1,770 1,535 1,614 1,599 1,526 1,466 91 Uruguay 2,486 2,386 3,003 3,366 3,411' 3,333' 3,026 2,980 2,993 2,684 92 Venezuela 19,894 20,192 24,730 27,462 27,892' 26,920 26,940 27,604' 26,969 21,768 93 Other Latin America"' 9,710 10.886 10.025 7,175 7,437' 6,879' 6,456 6,911' 6,794 6,378 94 Caribbean 433,539 461,200 573,337 582,825 605,861' 600,406' 598,251 608.489' 613,630 596,511 95 Bahamas 118,085 135,811 189,298 174,156 177,506 190,142 187,469 183,844' 184,763 178,257 96 Bermuda 6,846 7,874 9,636 8,402 8,317' 7,020' 7,816 8,230' 7,419 7,533 97 British West Indies17 302,486 312,278 367.197 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 98 Cayman Islands17 n.a. n.a. n.a. 381,129 401,809 385,784 384,439 400,626' 406,074 392,938 99 Cuba 62 75 90 85 83 84 85 88 45 154 100 Jamaica 577 520 794 1,207 867 1,101 963 975 967 958 101 Netherlands Antilles 5,010 4,047 5.428 4,510 4,523 3,402 3,892 3,207 3,270 4,505 102 Trinidad and Tobago 473 595 894 1,038 1,114 1,237 1,272 1,253 1,428 1,410 103 Other Caribbean16 n.a. n.a. n.a. 12,298 11,642' 11,636' 12,315 10,266' 9,664 10,756 104 307,960 319,489 305.524 320,705 311,719' 291,831' 284,087 283,682' 227799,,111122 300,383 China 105 Mainland 13,441 12,325 16.531 39,924 34,689 23,156 15,390 15,586 16,023 16,886 106 Taiwan 12.708 13,603 17,352 17,891 19,963 18,119 19,862 23,081 22,772 22,247 107 Hong Kong 20,900 27,701 26.462 29,103 26,581 27,348 29,180 26,843 23,838 24,587 108 India 5,250 7,367 4,530 4,547 4,113 4,281 4,043 4,413 4,076 4,024 109 Indonesia 8,282 6,567 8,514 8,605 10,728 10,602' 10,567 11,630 11,989 11,928 110 Israel 7,749 7,488 8,053 8,803 7,095 8,282 8,696 8,710 7,715 8,818 111 Japan 168,563 159,075 150.415 146,446 144,863' 141,250' 137,072 134,252' 132,305 149,452 112 Korea (South) 12,524 12,988 7,955 6,541 5,879' 5,854' 6,746 7,366' 7,046 7,723 113 Philippines 3,324 3,268 2.316 1,461 1,669' 1,684' 1,478 1,657' 1,791 1,884 114 Thailand 7,359 6,050 3,117 3,253 2,936' 3,306' 3,316 3,381' 3,763 3,347 115 Middle Eastern oil-exporting countries18 15,609 21,314 23.733 21,651 20,522' 19,651' 20,525 19,190 20,542 20,844 116 Other 32,251 41,743 36,546 32,480 32,681 28,298 27,212 27,573 27,252 28,643 117 8,905 9,468 10,824 10,566 10,662' 10,622' 10,584 12,178' 12,194 11,609 118 Egypt 1,339 2,022 2,621 2,282 2,213 2,220' 2,267 3,526' 3,647 3,014 119 Morocco 97 179 139 133 139 116 102 118 165 235 120 South Africa 1,522 1,495 1.010 652 794' 707' 693 839' 1,324 810 121 Congo (formerly Zaire) 5 14 4 8 5 2 14 5 5 2 122 Oil-exporting countries19 3,088 2,914 4,052 4,593 4,752 4,740 4,645 4,349 3,839 4,431 123 Other 2,854 2,844 2.998 2,898 2,759 2,837 2,863 3,341 3,214 3,117 124 Other countries 6,636 9,788 11,341 10,672 12,640' 11,526' 11,220 9,101' 10,274 7,678 125 Australia 5,495 8,377 10.070 9,472 11,391' 10,419' 9,855 8,058' 9,290 6,822 126 New Zealand20 n.a. n.a. n.a. 427 503 437 862 501 517 437 127 All other 1,141 1,411 1.271 773 746 670 503 542 467 419 128 Nonmonetary international and regional organizations 11,883 15,276 12,543 12,291 12,834 14,669 13,819 11,256 13,214 13,309 129 International2' 10,221 12,876 11.270 11,379 11,335 12,965 12,836 10,241 12,090 12,224 130 Latin American regional22 594 1,150 740 272 327 886 418 441 509 569 131 Other regional23 1,068 1,250 533 640 620 518 523 502 558 476 12. Before January 2001, data for Belgium-Luxembourg were combined. 18. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab 13. Before January 2001, these data were included in data reported for the United Emirates (Trucial States). Kingdom. 19. Comprises Algeria, Gabon, Libya, and Nigeria. 14. Since December 1992, has excluded Bosnia, Croatia, and Slovenia. 20. Before January 2001, these data were included in "All other." 15. Includes the Bank for International Settlements and the European Central Bank. Since 21. Principally the International Bank for Reconstruction and Development. Excludes December 1992, has included all parts of the former U.S.S.R. (except Russia), and Bosnia, "holdings of dollars" of the International Monetary Fund. Croatia, and Slovenia. 22. Principally the Inter-American Development Bank. 16. Before January 2001, data for "Other Latin America" and "Other Caribbean" were 23. Asian, African, Middle Eastern, and European regional organizations, except the Bank combined in "Other Latin America and Caribbean." for International Settlements, which is included in "Other Europe." 17. Beginning January 2001, data for the Cayman Islands replaced data for the British West Indies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-Reported Data A55 3.18 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 2001 AArreeaa oorr ccoouunnttrryy 11999988 11999999 22000000 Mar. Apr. May June July Aug.' Sept.p 1 Total, all foreigners 734,995 793,139 904,697r 980,742 990,151 996,701 990,698r 975,363r 948,839 958,921 2 Foreign countries 731,378 788,576 900,011r 977,966 987,396 992,791 986,000r 970,509' 944,288 954,445 3 Europe 233,321 311,686 378,115' 439,499 443,051 461,025 452,017 441,780 413,717 406,885 4 Austria 1,043 2,643 2,926 3,101 3,728 3,364 2,870 2,714 3,130 3,111 Belgium2 7,187 10,193 5,399 4,852 4,375 5,627 4,254 9,184 4,451 4,780 6 Denmark 2,383 1,669 3,272 3,242 2,954 2,505 2,268 1,345 1,570 1,672 7 Finland 1,070 2,020 7,382 7,185 8,901 8,800 8,460 8,666 8,350 10,917 8 France 15,251 29,142 40,035 45,555 46,378 42,189 48,835 56,997 56,342 51,729 9 Germany 15,923 29,205 36,834 45,729 49,062 55,063 51,242 47,378 47,744 37,802 10 Greece 575 806 646 278 265 285 313 369 278 288 11 Italy 7,284 8,496 7,629 6,975 7,274 6,867 8,111 5,466 6,227 6,639 17. Luxembourg2 n.a. n.a. n.a. 2,549 2,012 1,876 1,285 914 1,010 910 13 Netherlands 5,697 11,810 17,043 22,623 22,692 16,488 16,993 16,875 16,309 18,358 14 Norway 827 1,000 5,012 8,228 5,296 2,915 6,502 4,379 3,851 4,835 15 Portugal 669 1,571 1,382 1,426 1,535 1,173 1,304 1,050 1,232 1,285 16 Russia 789 713 517 1,008 813 715 911 589 877 676 17 Spain 5,735 3,796 2,603' 4,722 3,445 4,275 3,594 3,955 3,431 4,662 18 Sweden 4,223 3,264 9,226 10,286 11,934 10,986 11,049 11,507 11,651 12,203 19 Switzerland 46,874 79,158 82,085 96,489 104,816 137,273 111,492 96,036 79,942 72,545 20 Turkey 1,982 2,617 3,059 2,697 2,770 2,596 2,530 2,499 2,407 2,307 ?1 United Kingdom 106,349 115,971 144,938 162,563 156,161 149,064 161,720 161,232 157,531 163,371 22 Channel Islands and Isle of Man3 n.a. n.a. n.a. 3,250 3,151 3,838 3,275 3,417 3,162 3,900 23 Yugoslavia4 53 50 50 49 49 59 49 4 4 4 24 Other Europe and other former U.S.S.R.5 9,407 7,562 8,077 6,692 5,440 5,067 4,960 7,204 4,218 4,891 25 Canada 47,037 37,206 39,858 43,838 45,094 44,583 50,153 43,308 42,847 50,304 ->6 Latin America 79,976 74,040 76,588 73,717 73,829 73,823 73,763' 73,432' 76,376 74,377 71 Argentina 9,552 10,894 11,546 11,242 11,541 11,731 11,923' 12,344' 13,103 12,075 78 Brazil 16,184 16,987 20,567 20,232 20,287 20,719 21,538' 20,941' 22,152 22,460 ?9 Chile 8,250 6,607 5,815 5,822 5,628 5,443 5,451' 5,217' 5,379 5,176 30 Colombia 6,507 4,524 4,370 4,022 3,720 3,740 3,641 3,625 3,720 3,603 31 Ecuador 1,400 760 635 534 526 482 523 515 505 508 3? Guatemala 1,127 1,135 1,244 1,175 1,171 1,226 1,199' 1,148' 1,276 1,261 33 Mexico 21,212 17,899 17,415 17,747 18,013 17,960 17,385' 17,476' 17,582 16,799 34 Panama 3,584 3,387 2,933 3,006 3,158 2,872 3,086 3,190 3,199 3,199 35 Peru 3,275 2,529 2,807 2,809 2,771 2,534 2,566' 2,516' 2,422 2,438 36 Uruguay 1,126 801 673 364 367 366 398 410 453 459 37 Venezuela 3,089 3,494 3,518 3,237 3,154 3,109 2,982 2,913 3,417 3,203 38 Other Latin America6 4,670 5,023 5,065 3,527 3,493 3,641 3,071' 3,137' 3,168 3,196 39 Caribbean 262,678 281,128 319,410' 325,060 333,130 324,710 322,559' 317,635' 326,668 335,443 40 Bahamas 96,455 99,066 114,090 105,064 112,424 112,802 105,772 100,133 99,046 114,765 41 Bermuda 5,011 8,007 9,260' 8,122 6,781 5,507 5,802 7,236 6,803 6,976 4? British West Indies7 153,749 167,189 189,296 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 43 Cayman Islands7 n.a. n.a. n.a. 199,351 200,022 195,790 200,149' 198,918 204,760 199,209 44 Cuba 0 0 0 n.a. 1 n.a. n.a. n.a. n.a. n.a. 45 Jamaica 239 295 355 348 336 396 301 326 367 369 46 Netherlands Antilles 6,779 5,982 5,801 6,921 9,384 5,738 5,749 5,617 10,228 9,818 47 Trinidad and Tobago 445 589 608 710 783 804 946 989 1,086 974 48 Other Caribbean6 n.a. n.a. n.a. 4,544 3,399 3,673 3,840' 4,416' 4,378 3,332 49 Asia 98,607 75,143 77,829' 87,673 83,546 81,217 80,927 86,714 77,445 80,688 China 50 Mainland 1,261 2,110 1,606 1,357 3,171 2,252 4,387 3,785 2,191 3,462 51 Taiwan 1,041 1,390 2,247 1,851 2,258 1,985 2,524 2,906 2,780 3,276 52 Hong Kong 9,080 5,903 6,669 11,069 10,462 9,127 9,249 7,488 5,743 6,436 53 India 1,440 1,738 2,178 1,827 1,675 1,648 1,634 1,576 1,622 1,576 54 Indonesia 1,942 1,776 1,914 2,001 2,033 2,015 1,932 2.011 1,975 1,946 55 Israel 1,166 1,875 2,729 2,339 2,526 2,715 2,417 4,483 3,621 3,622 S6 Japan 46,713 28,641 34,974' 39,250 32,908 34,442 32,338 36,953 34,922 32,338 57 Korea (South) 8,289 9,426 7,776 12,264 13,971 11,673 11,258 12,803 10,701 11,788 58 Philippines 1,465 1,410 1,784 1,195 1,835 1,788 1,831 2,333 1,740 2,151 19 Thailand 1,807 1,515 1,381 1,258 1,062 1,380 1,541 1,119 1,440 1,179 60 Middle Eastern oil-exporting countries8 16,130 14,267 9,346 9,120 7,936 9,926 8,621 8,531 8,267 7,915 61 Other 8,273 5,092 5,225 4,142 3,709 2,266 3,195 2,726 2,443 4,999 67 Africa 3,122 2,268 2,094 2,111 2,035 1,904 2,132 2,038 2,052 1,872 63 Egypt 257 258 201 343 308 466 530 391 389 397 64 Morocco 372 352 204 189 185 185 175 173 151 154 65 South Africa 643 622 309 586 444 289 528 608 661 493 66 Congo (formerly Zaire) 0 24 0 n.a. n.a. n.a. n.a. n.a. 2 n.a. 67 Oil-exporting countries9 936 276 471 217 267 197 142 130 128 148 68 Other 914 736 909 776 831 767 757 736 721 680 69 Other countries 6,637 7,105 6,117 6,068 6,711 5,529 4,449 5,602 5,183 4,876 70 Australia 6,173 6,824 5,868 5,773 6,261 5,215 4,121 5,143 4,807 3,956 71 New Zealand10 n.a. n.a. n.a. 166 269 136 279 360 264 329 72 All other 464 281 249 129 181 178 49 99 112 591 73 Nonmonetary international and regional organizations" . . 3,617 4,563 4,686 2,776 2,755 4,535 4,848 4.854 4,551 4,476 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 "OtheT 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 • January 2002 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 2001 11999988 Mar. Apr. May June July' Aug.' Sept.? 1 Total 875,891 944,937 l,095,899r 1,202,490 l,185,758r 2 Banks' claims 734,995 793,139 904,697r 980,742 990,151 996,701 990,698r 975,363 948,839 958,921 3 Foreign public borrowers 23,542 35,090 37,907 49,123 52,357 49,533 52,193 55,762 47,156 45,739 4 Own foreign offices2 484,535 529,682 630,137 670,952 683,098 709,119 686,065r 660,538 652,434 659,766 5 Unaffilliated foreign banks 106,206 97,186 95,277 101,718 95,262 79,947 91,413r 94,632 84,584 91,996 6 Deposits 27,230 34,538 23,886 19,948 21,533 19,717 22,106 24,399 15,590 20,037 / Other 78,976 62,648 71,391 81,770 73,729 60,230 69,307' 70,233 68,994 71,959 8 All other foreigners 120,712 131,181 141,376r 158,949 159,434 158,102 161,027' 164,431 164,665 161,420 9 Claims of banks' domestic customers3 140,896 151,798 191,202 221,748 195,060 10 Deposits 79,363 88,006 100,327 116,370 97,778 11 Negotiable and readily transferable instruments4 47,914 51,161 78,147 92,013 8811,,003344 12 Outstanding collections and other claims 13,619 12,631 12,728 13,365 16,248 MEMO 13 Customer liability on acceptances 4,520 4,553 4,258 2,993 3,054 14 Banks' loans under resale agreements5 n.a. n.a. n.a. 134,083 126,871 116,938 129,693 131,731 117,224 111,844 15 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States6 39,978 31,125 53,153 67,204 60,796 58,137 66,(55 60,152 60,299 1. For banks' claims, data are monthly; for claims of banks' domestic customers, data are principally of amounts due from the head office or parent foreign bank, and from foreign for quarter ending with month indicated. branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank. Reporting banks include all types of depository institution as well as some brokers and 3. Assets held by reporting banks in the accounts of their domestic customers. dealers. 4. Principally negotiable time certificates of deposit and bankers acceptances, and commer- 2. For U.S. banks, includes amounts due from own foreign branches and foreign subsidi- cial paper. aries consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory 5. Data available beginning January 2001. agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists 6. Includes demand and time deposits and negotiable and nonnegotiable certificates of deposit denominated in U.S. dollars issued by banks abroad. 3.20 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 2000 2001 MMaattuurriittyy,, bbyy bboorrrroowweerr aanndd aarreeaa22 11999977 11999988 11999999 Sept. Dec. Mar. June 1 Total 276,550 250,418 267,082 262,590 274,089 307,616 301,972 By borrower 2 Maturity of one year or less 205,781 186,526 187,894 174,083 186,183 195,051 191,706 3 Foreign public borrowers 12,081 13,671 22,811 23,646 21,399 23,741 26,656 4 All other foreigners 193,700 172,855 165,083 150,437 164,784 171,310 165,050 5 Maturity of more than one year 70,769 63,892 79,188 88,507 87,906 112,565 110,266 6 Foreign public boirowers 8,499 9,839 12,013 15,818 15,838 24,951 24,978 7 All other foreigners 62,270 54,053 67,175 72,689 72,068 87,614 85,288 By area Maturity of one year or less 8 Europe 58,294 68,679 80,842 69,291 142,465 89,553 80,608 9 Canada 9,917 10,968 7,859 8,219 8,323 7,065 8,639 10 Latin America and Caribbean 97,207 81,766 69,498 65,824 151,861 72,272' 72,880 11 Asia 33,964 18,007 21,802 23,448 43,429 20,797 24,124 12 Africa 2,211 1,835 1,122 1,594 2,263 970 971 13 Allother3 4,188 5,271 6,771 5,707 11,717 44,,339944 44,,448844 Maturity of more than one year 14 Europe 13,240 14,923 22,951 27,432 57,770 38,257 39,942 15 Canada 2,525 3,140 3,192 3,094 3,174 3,249 3,992 16 Latin America and Caribbean 42,049 33,442 39,051 41,158 82,684 50,110 47,027 17 Asia 10,235 10,018 11,257 13,228 19,536 17,180 15,232 18 Africa 1,236 1,232 1.065 902 1,567 763 774 19 Allother3 1,484 1,137 1,672 2,693 5,954 3,006 3,299 1. Reporting banks include all types of depository institutions as well as some brokers and 2. Maturity is time remaining until maturity, dealers. 3. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-Reported Data A57 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. and Foreign Offices of U.S. Banks1 Billions of dollars, end of period 1999 2000 2001 Area or country 199/ ly98 June Sept. Dec. Mar. June Sept. Dec. Mar. June 1 Total 721.8 1051.6 941.2 941.6 945.5 955.0r 991.0' 954.4 1027.3 1140.9 1136.1 2 G-10 countries and Switzerland 242.8 217.7 234.7 219.4 243.4 272.41" 313.6 280.3 300.7 333.0 335.0 3 Belgium and Luxembourg 11.0 10.7 16.2 15.7 14.3 14.2 13.9 13.0 14.2 15.3 13.0 4 France 15.4 18.4 20.7 20.0 29.0 27.1' 32.6 29.0 29.6 30.0 35.9 5 Germany 28.6 30.9 32.1 37.4 38.7 37.3 31.5 37.6 45.1 45.2 51.6 6 Italy 15.5 11.5 16.4 15.0 18.1 19.9 20.5 18.6 21.3 20.4 23.7 7 Netherlands 6.2 7.8 13.3 11.7 12.3 17.0 16.0 17.5 18.4 18.8 15.3 8 Sweden 3.3 2.3 2.6 3.6 3.0 3.9 3.5 4.3 3.6 4.7 4.7 9 Switzerland 7.2 8.5 8.3 8.8 10.3 10.1 13.8 10.9 13.2 13.9 13.5 10 United Kingdom 113.4 85.4 85.5 63.5 79.3 101.9 138.2 112.8 115.6 141.3 127.5 11 Canada 13.7 16.8 17.1 17.9 16.3 17.3 18.2 18.5 16.7 15.4 21.4 12 Japan 28.6 25.4 22.6 25.7 22.1 23.5 25.4 18.1 23.0 28.0 28.3 13 Other industrialized countries 65.5 69.0 79.7 71.7 68.4 62.7r 75.3 73.7 74.5 75.7 70.1 14 Austria 1.5 1.4 2.8 3.0 3.5 2.6 2.8 3.5 4.1 3.8 3.6 15 Denmark 2.4 2.2 2.9 2.1 2.6 1.5 1.2 1.8 1.9 3.1 2.7 16 Finland 1.3 1.4 .9 .9 .9 .8 1.2 2.8 1.5 1.4 1.2 17 Greece 5.1 5.9 5.9 6.6 6.0 5.7 6.7 6.4 8.3 4.1 3.6 18 Norway 3.6 3.2 3.0 3.8 3.3 3.0 4.6 8.5 8.3 10.2 7.9 19 Portugal .9 1.4 1.2 1.2 1.0 1.0 2.0 1.5 2.0 1.9 1.4 20 Spain 12.6 13.7 16.6 15.1 12.1 11.3 12.2 10.5 10.3 12.6 12.4 21 Turkey 4.5 4.8 4.9 4.7 4.8 5.1 5.6 5.6 5.9 5.1 4.5 22 Other Western Europe 8.3 10.4 10.3 9.2 6.8 8.4 7.9 8.3 6.5 7.3 6.9 23 South Africa 2.2 4.4 4.7 4.0 3.8 4.8' 4.6 4.2 3.6 4.1 3.8 24 Australia 23.1 20.3 26.6 21.1 23.5 18.6 26.3 20.5 22.1 21.9 22.1 25 OPEC2 26.0 27.1 26.2 30.1 31.4 28.9 32.1 31.4 28.9 28.2 27.0 26 Ecuador 1.3 1.3 1.1 .9 .8 .7 .7 .6 .6 .6 .6 27 Venezuela 2.5 3.2 3.2 3.0 2.8 3.0 2.9 2.9 2.5 2.7 2.6 28 Indonesia 6.7 4.7 5.0 4.4 4.2 3.9 4.1 4.4 4.6 4.4 4.1 29 Middle East countries 14.4 17.0 16.5 21.4 23.1 21.1 23.8 22.4 20.3 20.1 19.3 30 African countries 1.2 1.0 .5 .5 .5 .2 .7 1.2 .8 .5 .4 31 Non-OPEC developing countries 139.2 143.4 148.6 144.6 149.4 154.6 158.1 149.5 145.5 144.4 152.6 Latin America 32 Argentina 18.4 23.1 22.8 22.8 23.2 22.4 21.6 21.4 21.4 20.8 19.7 33 Brazil 28.6 24.7 25.2 23.5 27.7 28.1 28.3 28.5 28.8 29.3 30.8 34 Chile 8.7 8.3 8.2 7.7 7.4 8.2 8.1 7.3 7.6 7.3 7.0 35 Colombia 3.4 3.2 3.1 2.7 2.5 2.5 2.4 2.4 2.4 2.4 2.4 36 Mexico 17.4 18.9 18.5 19.4 18.7 18.3 20.4 17.5 15.7 16.7 16.3 37 Peru 2.0 2.2 2.1 1.8 1.7 1.9 2.1 2.1 2.0 2.0 2.0 38 Other 4.1 5.4 5.5 5.5 5.9 6.5 6.7 6.2 6.3 8.5 8.2 Asia China 39 Mainland 3.2 3.0 5.3 3.3 3.6 4.6 3.8 3.4 2.9 3.4 6.8 40 Taiwan 9.5 13.3 12.6 12.3 12.0 12.6 12.6 12.8 10.8 11.1 10.7 41 India 4.9 5.5 6.7 7.0 7.7 7.9 8.2 5.8 9.1 6.5 11.8 42 Israel .7 1.1 2.0 1.0 1.8 3.3 1.5 1.1 2.7 2.2 2.0 43 Korea (South) 15.6 13.7 15.3 16.0 15.2 17.7' 21.7' 21.4' 15.5' 19.8' 19.2 44 Malaysia 5.1 5.6 6.0 6.1 6.1 6.5 6.8 6.9 7.1 6.5 6.7 45 Philippines 5.7 5.1 5.7 5.8 6.2 5.3 5.3 4.7 5.1 5.2 5.4 46 Thailand 5.4 4.7 4.2 4.0 4.1 4.3 4.0 3.9 4.0 4.2 4.2 47 Other Asia 4.3 2.9 2.8 2.9 2.9 2.0' 1.9' 1.7' 1.9' 1.7' 1.8 Africa 48 Egypt .9 1.3 1.4 1.3 1.4 1.4 1.3 1.1 1.1 1.2 1.2 49 Morocco .6 .5 .5 .5 .4 .3 .3 .4 .3 .3 .3 50 Zaire .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa3 .8 1.0 1.0 1.0 1.0 .9 .9 .8 .7 .7 .7 52 Eastern Europe 9.1 5.5 5.7 5.4 5.2 6.3 9.4 9.0 10.1 9.5 9.5 53 Russia4 5.1 2.2 2.1 2.0 1.6 1.7 1.5 1.4 1.0 1.5 1.5 54 Other 4.0 3.3 3.7 3.4 3.6 4.7 7.9 7.6 9.1 8.0 8.0 55 Offshore banking centers 155.1 134.4 107.5 122.5 114.5 53.9 55.5 53.5 61.7 57.9 46.2 56 Bahamas 24.2 35.4 10.4 18.2 13.7 14.4 8.8 9.3 13.5 7.0 .0 57 Bermuda 9.8 4.6 5.7 8.2 8.0 7.3 6.3 6.3 9.0 7.9 5.7 58 Cayman Islands and other British West Indies 43.4 12.8 7.2 6.3 1.3 .0 5.1 5.9 14.6 14.3 12.6 59 Netherlands Antilles 14.6 2.6 1.3 9.1 1.7 2.5 2.6 1.9 1.9 2.9 1.7 60 Panama5 3.1 3.9 3.9 3.9 3.9 3.4 3.3 2.5 3.2 3.8 3.4 61 Lebanon 62 Hong Kong, China 32a 233 22.0 22.4 21.0 22.2 20.1 20.6 18^7 2L7 224 63 Singapore 12.7 11.1 15.2 10.6 10.1 4.1 13.6' 12.6 15.2 14.5 12.9 64 Other .1 .2 .1 .2 .1 .1 .1 .1 .2 .1 .1 65 Miscellaneous and unallocated7 99.1 495.1 380.2 391.2 387.9 376.1 342.1 351.1 391.2 472.4 478.4 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 • January 2002 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States Millions of dollars, end of period 2000 2001 TTyyppee ooff lliiaabbiilliittyy,, aanndd aarreeaa oorr ccoouunnttrryy 11999977 11999988 11999999 Mar. June Sept. Dec. Mar. June 1 Total 57,382 46,570 53,044 53,489 70,534 76,644 73,904 74,484 68,519 2 Payable in dollars 41,543 36,668 37,605 35,614 47,864 51,451 48,931 46,870 42,225 3 Payable in foreign currencies 15,839 9,902 15,415 17,875 22,670 25,193 24,973 27,614 26,294 By type 4 Financial liabilities 26,877 19,255 27,980 29,180 44,068 49,895 47,419 48,461 42,314 5 Payable in dollars 12,630 10,371 13,883 12,858 22,803 26,159 25,246 23,369 18,061 6 Payable in foreign currencies 14,247 8,884 14,097 16,322 21,265 23,736 22,173 25,092 24,253 7 Commercial liabilities 30,505 27,315 25,064 24,309 26,466 26,749 26,485 26,023 26,205 8 Trade payables 10,904 10,978 12,857 12,401 13,764 13,918 14,293 12,657 13,213 y Advance receipts and other liabilities 19,601 16,337 12,207 11,908 12,702 12,831 12,192 13,366 12,992 10 Payable in dollars 28,913 26,297 23,722 22,756 25,061 25,292 23,685 23,501 24,164 ii Payable in foreign currencies 1,592 1,018 1,318 1,553 1,405 1,457 2,800 2,522 2,041 By area or country Financial liabilities 12 Europe 18,027 12,589 23,241 24,050 30,332 36,175 34,172 37,990 33,173 13 Belgium and Luxembourg 186 79 31 4 163 169 147 112 98 14 France 1,425 1,097 1,659 1,849 1,702 1,299 1,480 1,557 1,222 15 Germany 1,958 2,063 1,974 1,880 1,671 2,132 2,168 2,745 2,463 16 Netherlands 494 1,406 1,996 1,970 2,035 2,040 2,016 2,169 1,763 17 Switzerland 561 155 147 97 137 178 104 116 93 18 United Kingdom 11,667 5,980 16,521 16,579 21,463 28,601 26,362 29,241 25,751 19 Canada 2,374 693 284 313 714 249 411 719 628 20 Latin America and Caribbean 1,386 1,495 892 846 2,874 3,447 4,125 3,651 2,118 21 Bahamas 141 7 1 1 78 105 6 18 40 22 Bermuda 229 101 5 1 1,016 1,182 1,739 1,837 461 23 Brazil 143 152 126 128 146 132 148 26 21 24 British West Indies 604 957 492 489 463 501 406 410 408 25 Mexico 26 59 25 22 26 35 26 32 20 26 Venezuela 1 2 0 0 0 0 2 1 1 27 Asia 4,387 3,785 3,437 3,275 9,453 9,320 7,965 5,389 5,639 28 Japan 4,102 3,612 3,142 2,985 6,024 4,782 6,216 4,779 3,297 29 Middle Eastern oil-exporting countries1 27 0 4 4 5 7 11 15 8 30 Africa 60 28 28 28 33 48 52 38 61 31 Oil-exporting countries2 0 0 0 0 0 0 0 0 0 32 All other3 643 665 98 668 662 656 694 674 695 Commercial liabilities 33 Europe 10,228 10,030 9,262 8,646 9,293 9,411 9,629 8,950 8,723 34 Belgium and Luxembourg 666 278 140 78 178 201 293 251 297 35 France 764 920 672 539 711 716 979 689 665 36 Germany 1,274 1,392 1,131 914 948 1,023 1,047 982 1,017 37 Netherlands 439 429 507 648 562 424 300 373 343 38 Switzerland 375 499 626 536 565 647 502 656 697 39 United Kingdom 4,086 3,697 3,071 2,661 2,982 2,951 2,847 2,619 2,706 40 Canada 1,175 1,390 1,775 2,024 2,053 1,889 1,933 1,627 2,043 41 Latin America and Caribbean 2,176 1,618 2,310 2,286 2,607 2,443 2,381 2,166 2,292 42 Bahamas 16 14 22 9 10 15 31 5 31 43 Bermuda 203 198 152 287 300 377 281 280 367 44 Brazil 220 152 145 115 119 167 114 239 279 45 British West Indies 12 10 48 23 22 19 76 64 21 46 Mexico 565 347 887 805 1,073 1,079 841 792 762 47 Venezuela 261 202 305 193 239 124 284 243 218 48 Asia 14,966 12,342 9,886 9,681 10,965 11,133 10,983 11,558 11,384 49 Japan 4,500 3,827 2.609 2,274 2,200 1,998 2,757 2,432 2,377 50 Middle Eastern oil-exporting countries' 3,111 2,852 2,551 2,308 3,489 3,706 2,832 3,359 3,087 51 Africa 874 794 950 943 950 1,220 948 1,072 1,115 52 Oil-exporting countries2 408 393 499 536 575 663 483 566 539 53 Other3 1,086 1,141 881 729 598 653 614 650 648 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 2000 2001 TTyyppee ooff ccllaaiimm,, aanndd aarreeaa oorr ccoouunnttrryy 11999977 11999988 11999999 Mar. June Sept. Dec. Mar. June 1 Total 68,128 77,462 76,669 S4,266 80,731 94,803 90,157 109,443 98,038 2 Payable in dollars 62,173 72,171 69,170 74,331 72,300 82,872 79,558 96,230 88,258 3 Payable in foreign currencies 5,955 5,291 7,472 9,935 8,431 11,931 10,599 13,213 9,780 By type 4 Financial claims 36,959 46,260 40,231 47,798 44,303 58,303 53,031 74,458 61,921 5 Deposits 22,909 30,199 18,566 23,316 17,462 30,928 23,374 29,119 29,587 6 Payable in dollars 21,060 28,549 16,373 21,442 15,361 27,974 21,015 26,944 27,380 7 Payable in foreign currencies 1,849 1,650 2,193 1,874 2,101 2,954 2,359 2,175 2,207 8 Other financial claims 14,050 16,061 21,665 24,482 26,841 27,375 29,657 45,339 32,334 9 Payable in dollars 11,806 14,049 18,593 19,659 22,384 20,541 25,142 37,480 27,862 10 Payable in foreign currencies 2,244 2,012 3,072 4,823 4,457 6,834 4,515 7,859 4,472 11 Commercial claims 31,169 31,202 36,438 36,468 36,428 36,500 37,126 34,985 36,117 12 Trade receivables 27,536 27,202 32,629 31,443 31,283 31,530 33,104 30,493 31,169 13 Advance payments and other claims 3,633 4,000 3,809 5,025 5,145 4,970 4,022 4,492 4,948 14 Payable in dollars 29,307 29,573 34,204 33,230 34,555 34,357 33,401 31,806 33,016 15 Payable in foreign currencies 1,862 1,629 2,207 3,238 1,873 2,143 3,725 3,179 3,101 By area or country Financial claims 16 Europe 14,999 12,294 13,023 16,789 18,254 23,706 23,136 31,946 23,975 17 Belgium and Luxembourg 406 661 529 540 317 304 296 430 262 18 France 1,015 864 967 1,835 1,292 1,477 1,206 3,149 1,376 19 Germany 427 304 504 669 576 696 848 1,405 1,163 20 Netherlands 677 875 1,229 1,981 1,984 2,486 1,396 2,313 1,072 21 Switzerland 434 414 643 612 624 626 699 605 653 22 United Kingdom 10,337 7,766 7,561 9,044 11,668 16,191 15,900 21,070 15,913 23 Canada 3,313 2,503 2,553 3,175 5,799 7,517 4,576 4,854 4,787 7.4 Latin America and Caribbean 15,543 27,714 18,206 21,945 14,874 21,691 19,317 28,674 24,433 25 Bahamas 2,308 403 1,593 1,299 655 1,358 1,353 561 818 26 Bermuda 108 39 11 11 34 22 19 1,729 426 27 Brazil 1,313 835 1,476 1,646 1,666 1,568 1,827 1,564 1,877 7.8 British West Indies 10,462 24,388 12,099 15,814 7,751 15,722 12,596 16,366 12.539 29 Mexico 537 1,245 1,798 1,979 2,048 2,280 2,448 2,459 2,633 30 Venezuela 36 55 48 65 78 101 87 31 66 31 Asia 2,133 3,027 5,457 4,430 3,923 4,002 4,697 7,444 6,829 32 Japan 823 1,194 3,262 2,021 1,410 1,726 1,631 4,065 1,698 33 Middle Eastern oil-exporting countries' 11 9 23 29 42 85 80 70 76 34 Africa 319 159 286 232 320 284 411 423 476 35 Oil-exporting countries2 15 16 15 15 39 3 57 42 35 36 All other1 652 563 706 1,227 1,133 1,103 894 1,117 1,421 Commercial claims 37 Europe 12,120 13,246 16,389 16,118 15,935 16,486 15,938 14,534 14,586 38 Belgium and Luxembourg 328 238 316 271 425 393 452 395 417 39 France 1,796 2,171 2,236 2,520 2,693 2,921 3,095 3,480 3,173 40 Germany 1,614 1.822 1,960 2,034 1,905 2,159 1,982 1,763 2,002 41 Netherlands 597 467 1,429 1,337 1,242 1,310 1,729 757 854 42 Switzerland 554 483 610 611 562 684 763 666 472 43 United Kingdom 3,660 4,769 5,827 5,354 4,937 5,193 4,502 4,031 3,840 44 Canada 2,660 2,617 2,757 3,088 3,250 2,953 3,502 3,393 3,500 45 Latin America and Caribbean 5,750 6,296 5,959 5,899 5,792 5,788 5,851 5,306 6,119 46 Bahamas 27 24 20 15 48 75 37 20 39 47 Bermuda 244 536 390 404 381 387 376 418 650 48 Brazil 1,162 1,024 905 849 894 981 957 1,057 1,376 49 British West Indies 109 104 181 95 51 55 137 131 135 50 Mexico 1,392 1,545 1,678 1,529 1,565 1,612 1,507 1,418 1,420 51 Venezuela 576 401 439 435 466 379 328 292 321 52 Asia 8,713 7,192 9,165 9,101 9,172 8,986 9,630 9,544 9,727 53 Japan 1,976 1,681 2,074 2,082 1,881 2,074 2,796 2,575 3,152 54 Middle Eastern oil-exporting countries' 1,107 1,135 1,625 1,533 1,241 1,199 1,024 966 1,054 55 Africa 680 711 631 716 766 895 672 773 674 56 Oil-exporting countries2 119 165 171 82 160 392 180 165 154 57 Other3 1,246 1,140 1,537 1,546 1,513 1,392 1,572 1,435 1,511 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 • January 2002 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 2001 2001 TTrraannssaaccttiioonn,, aanndd aarreeaa oorr ccoouunnttrryy 11999999 22000000 Jan- Sept. Mar. Apr. May June July Aug/ Sept/ U.S. corporate securities STOCKS 1 Foreign purchases 2,340,659 3,605,196 2,280,483 284,292 249,747 276,934 259,635 244,897 229,427 176,689 2 Foreign sales 2,233,137 3,430.306 2,196,133 276,864 243,122 259,604 249,196 233,422 222,027 186,258 3 Net purchases, or sales (-) 107,522 174,890 84,350 7,428 6,625 17,330 10,439 11,475 7,400 -9,569 4 Foreign countries 107,578 174,903 84,198 7,302 6,647 17,315 10,418 11,460 7,401 -9,558 5 Europe 98,060 164,656 67,129 7,983 3,694 9,805 9,307 6,704 9,048 -5,454 6 France 3,813 5,727 6,376 1,041 105 338 3,044 35 434 -733 7 Germany 13,410 31,752 6,239 174 199 1,025 133 1,048 485 -422 8 Netherlands 8,083 4,915 7,974 790 1,112 573 334 654 568 358 9 Switzerland 5,650 11,960 1,911 1,237 139 448 298 -228 -140 -688 10 United Kingdom 42.902 58,736 29,978 3,280 598 4,501 4,006 3,750 6,236 -577 11 Channel Islands and Isle of Man1 n.a. n.a. -491 -110 -144 59 -168 -42 32 -73 12 Canada -335 5,956 8,561 2,464 1,567 628 130 948 -247 1,113 13 Latin America and Caribbean 5,187 -17,812 -9,437 -3,516 -1,168 3,436 -1,038 65 -3,063 ——44,,667711 14 Middle East2 -1,066 9,189 2,166 442 -56 -173 234 513 830 666688 15 Other Asia 4,445 12,494 16,753 57 2,966 3,532 1,724 3,220 613 -881 16 Japan 5,723 2,070 5,154 -115 2,048 1,088 1,000 1,956 51 -806 17 372 415 -316 93 -44 9 -82 -20 72 -34 18 Other countries 915 5 -658 -221 -312 78 143 30 148 -299 19 Nonmonetary international and regional organizations -56 -11 152 126 -22 15 21 15 -1 -11 BONDS3 20 Foreign purchases 854,692 1,208,386 1,385,558 169,850 148,930 169,528 158,157 138,841 157,642 156,739 21 Foreign sales 602,100 871,416 1,092,723 123,603 111,505 129,146 125,693 111,998 132,934 137,984 22 Net purchases, or sales (-) 252,592 336,970 292,835 46,247 37,425 40,382 32,464 26,843 24,708 18,755 23 Foreign countries 252,994 337,074 292,372 46,029 37,399 40,370 32,445 26,951 24,510 18,600 24 Europe 140,674 180,917 156,336 26,457 18,169 26,116 14,740 11,904 9,631 9,806 25 France 1,870 2,216 3,827 1,262 519 817 618 1,154 -1,035 -573 26 Germany 7,723 4,067 8,707 911 1,639 1,500 114 -185 472 454 27 Netherlands 2,446 1,130 2,227 92 -41 509 576 -210 -297 438 28 Switzerland 4,553 3,973 4,937 1,564 709 399 294 291 628 -51 29 United Kingdom 106,344 141,223 124,140 20,347 12,477 21,489 12,575 9,507 8,766 9,835 30 Channel Islands and Isle of Man1 n.a. n.a. 1.172 115 318 -218 330 203 106 93 31 Canada 6,043 13,287 2,345 309 1,158 240 822 485 -1,431 -645 32 Latin America and Caribbean 58,783 59,444 61,343 6,564 7,546 9,167 7,387 6,222 8,961 22,,551188 33 Middle East1 1,979 2,076 1,144 624 129 -395 -24 -345 -22 88 34 Other Asia 42,817 78,794 71,455 11,795 10,329 5,412 9,646 8,815 7,569 7,281 35 Japan 17,541 39,356 18,562 5,596 344 -480 5,187 3,452 1,641 1,066 36 1,411 938 463 38 -33 14 160 79 136 -6 3/ Other countries 1,287 1,618 -714 242 101 -184 -286 -209 -334 -362 38 Nonmonetary international and regional organizations -402 -70 464 218 26 12 19 -108 198 155 Foreign securities 39 Stocks, net purchases, or sales (-) 15,640 -13,088 ^13,348 -15,264 ^1,675 -8,098 -5,292 -5,031 -2,390 4,695 40 Foreign purchases 1,177,303 1,802,185 1,102,985 133,205 121,345 136,046 122,243 115,956 95,885 100,870 41 Foreign sales 1,161,663 1,815,273 1,146,333 148,469 126,020 144,144 127,535 120,987 98,275 96,175 42 Bonds, net purchases, or sales (-) -5,676 -4,054 32,177 -1,290 5,487 2,267 1,048 5,629 9,404 10,319 43 Foreign purchases 798,267 958,932 898,260 115,676 93,828 101,383 101,950 91,585 87,584 87,076 44 Foreign sales 803,943 962,986 866,083 116,966 88,341 99,116 100,902 85,956 78,180 76,757 45 Net purchases, or sales (-), of stocks and bonds 9,964 -17,142 -11,171 -16,554 812 -5,831 -4,244 598 7,014 15,014 46 Foreign countries 9,679 -17,278 -10,851 -16,249 824 -5,976 -4,241 630 6,874 15,016 47 Europe 59.247 -25,386 -5,498 -13,687 3,616 ^1,803 3,392 1,026 6,119 6,049 48 Canada -999 -3,888 2,800 844 -1,535 931 405 299 -1,976 1,478 49 Latin America and Caribbean -4,726 -15,688 2,526 17 1,295 3,047 -6,662 ^444 759 2,931 50 Asia -42,961 24,488 -8,549 -3,511 -1,928 -4,319 -485 69 1,601 4,387 51 Japan -43,637 20,970 -12,913 -4,067 -3,494 -3,670 —44 118 596 1,477 52 710 943 -316 24 93 -132 -47 -111 -24 -34 53 Other countries -1,592 2,253 -1,814 64 -717 -640 -844 -209 395 205 54 Nonmonetary international and regional organizations 285 150 -319 -305 -12 145 -3 -32 140 -2 1. Before January 2001, data 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 2001 AArreeaa oorr ccoouunnttrryy 11999999 22000000 J S a ep n t - . Mar. Apr. May June July Aug. Sept.p 1 Total estimated -9,953 -54,032 -19,632 4,897 -13,711 3,076 -3,445 -11,494 4,410r -1,921 2 Foreign countries -10,518 -53,571 -19,121 4,899 -13,517 2,831 -3,237 -11,668 4,590' -2,069 3 Europe -38,228 -50,704 -17,198 5,363 -5,599 -498 -2,522 -8,223 321' -703 4 Belgium2 -81 73 -645 -152 240 -216 -25 -343 42 174 Germany 2,285 -7,304 -2,405 1,236 1,769 1,176 -1,517 -970 67 -113 6 Luxembourg2 n.a. n.a. 216 ^101 204 92 145 168 -64 -348 7 Netherlands 2,122 2,140 -3,743 -3,704 -2,488 -1,730 1,117 1,263 2,437 -2,653 8 Sweden 1,699 1,082 -1,152 -993 195 -386 -663 -114 593 1,037 9 Switzerland -1,761 -10,326 1,202 -120 116 -912 -3 270 -44 979 10 United Kingdom -20,232 -33,669 -9,099 9,838 -4,736 1,120 -3,180 -7,844 -4,610' 2,071 11 Channel Islands & Isle of Man3 n.a. n.a. -16 222 -31 -9 22 -64 11 -1 12 Other Europe and former U.S.S.R -22,260 -2,700 -1,556 -563 -868 367 1,582 -589 1.889' -1,849 13 Canada 7,348 -550 -3,592 -169 1,248 745 161 -1,653 -356 -947 14 Latin America and Caribbean -7,523 -4,914 1,150 827 -7,095 140 -3,812 1,893 3,711' -541 15 Venezuela 362 1,288 313 -142 -148 51 -126 248 -128 39 16 Other Latin America and Caribbean 1,661 -11,581 7,026 3,009 -3,228 1,587 -545 -880 67' -524 17 Netherlands Antilles -9,546 5,379 -6,189 -2,040 -3,719 -1,498 -3,141 2,525 3,772 -56 18 Asia 29,359 1,639 -48 -119 -2,928 2,704 3,464 -3,940 576' -160 19 Japan 20,102 10,580 -4,992 -1,504 3,099 4,658 -3,920 -2,126 324 -3,339 20 Africa -3,021 -4i4 -244 -60 27 -6 -12 -65 -120' 47 21 Other 1,547 1,372 811 -943 830 -254 -516 320 458 235 22 Nonmonetary international and regional organizations 565 -461 -511 -2 -194 245 -208 174 -180 148 23 International 190 -483 -404 -11 -213 393 -52 -90 103 -65 24 Latin American Caribbean regional 666 76 22 10 25 -4 -2 -1 -3 0 MEMO 25 Foreign countries -10,518 -53,571 -19,121 4,899 -13,517 2,831 -3,237 -11,668 4,590' -2,069 26 Official institutions -9,861 -6,302 -6,077 249 -9,040 913 -3,243 -741 343 2,549 27 Other foreign -657 -47,269 -13,044 4,650 -4,477 1,918 6 -10,927 4,247' -4,618 Oil-exporting countries 28 Middle East4 2,207 3,483 -3,806 -1,240 -383 -120 316 -590 -308 -586 29 0 0 -2 2 0 1 3 2 -2 -2 1. Official and private transactions in marketable U.S. Treasury securities having an 3. Before January 2001, these data were included in the data reported for the United original maturity of more than one year. Data are based on monthly transactions reports. Kingdom. Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab countries. Emirates (Trucial States). 2. Before January 2001, combined data reported for Belgium and Luxembourg. 5. Comprises Algeria, Gabon, Libya, and Nigeria. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics • January 2002 3.28 FOREIGN EXCHANGE RATES AND INDEXES OF THE FOREIGN EXCHANGE VALUE OF THE U.S. DOLLAR1 Currency units per U.S. dollar except as noted 2001 IItteemm June July Aug. Sept. Oct. Nov. Exchange rates COUNTRY/CURRENCY UNIT 1 Australia/dollar2 62.91 64.54 58.15 51.80 50.89 52.46 50.36 50.42 51.65 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 2.3788 2.4731 2.5122 2.6767 2.7408 2.5481 5 Canada/dollar 1.4836 1.4858 1.4855 1.5245 1.5308 1.5399 1.5679 1.5717 1.5922 6 China, P.R./yuan 8.3008 8.2783 8.2784 8.2770 8.2769 8.2770 8.2768 8.2768 8.2769 7 Denmark/krone 6.7030 6.9900 8.0953 8.7397 8.6442 8.2632 8.1654 8.2186 8.3832 8 European Monetaty Union/euro3 n.a. 1.0653 0.9232 0.8530 0.8615 0.9014 0.9114 0.9050 0.8883 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 7.7997 7.7999 7.7997 7.7997 7.7999 7.7996 14 India/rupee 41.36 43.13 45.00 47.04 47.18 47.17 47.75 48.05 48.04 15 Ireland/pound2 142.48 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 16 Italy/lira 1,736.85 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 17 Japan/yen 130.99 113.73 107.80 122.35 124.50 121.37 118.61 121.45 122.41 18 Malaysia/ringgit 3.9254 3.8000 3.8000 3.8000 3.8000 3.8000 3.8000 3.8001 3.8000 19 Mexico/peso 9.152 9.553 9.459 9.088 9.168 9.133 9.425 9.339 9.225 20 Netherlands/guilder 1.9837 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 21 New Zealand/dollar2 53.61 52.94 45.68 41.41 40.81 43.14 41.73 41.39 41.58 22 Norway/krone 7.5521 7.8071 8.8131 9.3014 9.2566 8.9427 8.7691 8.8329 8.9296 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 1.8170 1.8233 1.7613 1.7494 1.8113 1.8295 25 South Africa/rand 5.5417 6.1191 6.9468 8.0595 8.2094 8.3115 8.6756 9.2804 9.7388 26 South Korea/won 1,400.40 1,189.84 1,130.90 1,295.05 1,305.24 1,285.65 1,293.83 1,302.36 1,282.10 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 90.371 90.314 89.994 90.157 90.954 92.670 29 Sweden/krona 7.9522 8.2740 9.1735 10.7930 10.7603 10.3329 10.6353 10.5661 10.6117 30 Switzerland/franc 1.4506 1.5045 1.6904 1.7856 1.7570 1.6808 1.6338 1.6357 1.6509 31 Taiwan/dollar 33.547 32.322 31.260 34.328 34.821 34.639 34.575 34.583 34.498 32 Thailand/baht 41.262 37.887 40.210 45.263 45.641 44.907 44.331 44.750 44.411 33 United Kingdom/pound2 165.73 161.72 151.56 140.20 141.48 143.72 146.38 145.01 143.56 34 Venezuela/bolivar 548.39 606.82 680.52 717.27 722.72 731.97 743.46 743.22 745.10 Indexes4 NOMINAL 35 Broad (January 1997-100)5 116.48 116.87 119.93 127.58 128.07 125.97 126.28 127.20 127.72 36 Major currencies (March 1973-100)6 95.79 94.07 98.34 105.91 106.07 103.77 103.32 104.27 105.55 37 Other important trading partners (January 1997-1001 126.03 129.94 130.26 136.43 137.37 136.03 113377..5533 113388..2211 113377..3366 REAL 38 Broad (March 1973-100)5 99.50r 98.82r 102.49r I09.94r 110.18' 108.20' 108.64' 109.09' 109.38 39 Major currencies (March 1973-100)6 97.21' 96.64r 102.83r 112.03r 112.17' 109.61' 109.46' 110.54' 112.10 40 Other important trading partners (March 1973-100) 108.93r 108.06r 108.5 r 114.13' 114.49' 113.15' 114.39' 114.03' 112.71 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 Baord'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 the foreign exchange value of the dollar, see Federal Reserve Bulletin, vol. 2. U.S. cents per currency unit. 84 (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. Euro equals 6. Weighted average of the foreign exchange value of the U.S. dollar against a subset of 13.7603 Austrian schillings 1936.27 Italian lire broad index currencies that circulate widely outside the country of issue. The weight for each 40.3399 Belgian francs 40.3399 Luxembourg francs currency is its broad index weight scaled so that the weights of the subset of currencies in the 5.94573 Finnish markkas 2.20371 Netherlands guilders index sum to one. 6.55957 French francs 200.482 Portuguese escudos 7. Weighted average of the foreign exchange value of the U.S. dollar against a subset of 1.95583 German marks 166.386 Spanish pesetas broad index currencies that do not circulate widely outside the country of issue. The weight .787564 Irish pounds 340.750 Greek drachmas for each currency is its broad index weight scaled so that the weights of the subset of currencies in the index sum to one. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A63 Guide to Statistical Releases and Special Tables STATISTICAL RELEASES—List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases December 2001 A72 SPECIAL TABLES—Data Published Irregularly, with Latest Bulletin Reference Title and Date Issue Page Assets and liabilities of commercial banks September 30, 2000 February 2001 A64 December 31, 2000 May 2001 A64 March 31,2001 August 2001 A64 June 30, 2001 November 2001 A64 Terms of lending at commercial banks November 2000 February 2001 A66 February 2001 May 2001 A66 May 2001 August 2001 A66 August 2001 November 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 March 31,2001 August 2001 A76 June 30, 2001 October 2001 A64 September 30, 2001 January 2002 A64 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 • January 2002 4.31 PRO FORMA FINANCIAL STATEMENTS FOR FEDERAL RESERVE PRICED SERVICES A. Pro forma balance sheet Millions of dollars Sept. 30, 2001 Sept. 30, 2000 Short-term assets (Note 1) Imputed reserve requirement on clearing balances 772.1 603.4 Investment in marketable securities 6,948.9 5,430.6 Receivables 72.1 71.8 Materials and supplies 3.0 3.2 Prepaid expenses 24.2 22.9 Items in process of collection 3,111.9 3,152.5 Total short-term assets Long-term assets (Note 2) Premises 472.0 459.9 Furniture and equipment 170.3 163.2 Leases and leasehold improvements 76.2 46.1 Prepaid pension costs 735.6 629.4 Total long-term assets 1,454.1 1,298.5 Total assets 12,386.3 10,582.9 Short-term liabilities Clearing balances and balances arising from early credit of uncollected items 7,185.3 5,718.1 Deferred-availability items 3,647.6 3,468.4 Short-term debt 99.3 97.9 Total short-term liabilities 10,932.2 9,284.4 Long-term liabilities Long-term debt 502.6 417.3 Postretirement/postemployment benefits obligation 254.6 239.5 Total long-term liabilities Total liabilities 11,689.4 9,941.1 Equity 696.9 641.8 Total liabilities and equity (Note 3) 12,386.3 10,582.9 NOTE. Components may not sum to totals because of rounding. The priced services (2) LONG-TERM ASSETS financial statements consist of these tables and the accompanying notes. Consists of long-term assets used solely in priced services, the priced-services portion of (1) SHORT-TERM ASSETS long-term assets shared with non-priced services, and an estimate of the assets of the Board of Governors used in the development of priced services. Effective January 1, 1987, the Reserve The imputed reserve requirement on clearing balances held at Reserve Banks by depository Banks implemented the Financial Accounting Standards Board's Statement of Financial institutions reflects a treatment comparable to that of compensating balances held at corre- Accounting Standards No. 87, Employer's Accounting for Pensions (SFAS 87). Accordingly, spondent banks by respondent institutions. The reserve requirement imposed on respondent the Federal Reserve Banks recognized credits to expenses of $86.6 million in the third quarter balances must be held as vault cash or as nonearning balances maintained at a Reserve Bank; of 2000, $57.7 million in the second quarter of 2000, $28.9 million in the first quarter of 2000, thus, a portion of priced services clearing balances held with the Federal Reserve is shown as $75.7 million in the third quarter of 2001, $50.4 million in the second quarter of 2001, $25.2 required reserves on the asset side of the balance sheet. The remainder of clearing balances is million in the first quarter of 2001, and corresponding increases in the asset account. assumed to be invested in three-month Treasury bills, shown as investment in marketable securities. (3) LIABILITIES AND EQUITY Receivables are (1) amounts due the Reserve Banks for priced services and (2) the share of suspense-account and difference-account balances related to priced services. Under the matched-book capital structure for assets that are not "self-financing," short-term Materials and supplies are the inventory value of short-term assets. assets are financed with short-term debt. Long-term assets are financed with long-term debt Items in process of collection are gross Federal Reserve cash items in process of collection and equity in a proportion equal to the ratio of long-term debt to equity for the fifty largest (CIPC) stated on a basis comparable to that of a commercial bank. It reflects adjustments for bank holding companies, which are used in the model for the private-sector adjustment factor intra-System items that would otherwise be double-counted on a consolidated Federal (PSAF). The PSAF consists of the taxes that would have been paid and the return on capital Reserve balance sheet; adjustments for items associated with non-priced items, such as those that would have been provided had priced services been furnished by a private-sector firm. collected for government agencies; and adjustments for items associated with providing fixed Other short-term liabilities include clearing balances maintained at Reserve Banks and availability or credit before items are received and processed. Among the costs to be deposit balances arising from float. Other long-term liabilities consist of obligations on capital recovered under the Monetary Control Act is the cost of float, or net CIPC, during the period leases. (the difference between gross CIPC and deferred-availability items, which is the portion of gross CIPC that involves a financing cost), valued at the federal funds rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-Reported Data A65 4.31 PRO FORMA FINANCIAL STATEMENTS FOR FEDERAL RESERVE PRICED SERVICES B. Pro forma income statement Millions of dollars Item Quarter ending Sept. 30, 2001 Quarter ending Sept. 30, 2000 Revenue from services provided to depository institutions (Note 4) 230.0 221.5 Operating expense (Note 5) 199.8 173.3 Income from operations 30.2 48.2 Imputed costs (Note 6) Interest on float 16.1 2.5 Interest on debt 8.0 7.8 Sales taxes 3.6 1.9 FDIC insurance 0.0 27.7 0.0 12.2 Income from operations after imputed costs 2.5 36.0 Other income and expenses (Note 7) Investment income on clearing balances 88.2 102.5 Earning credits (56.6) 31.6 (94.0) 8.5 Income before taxes 34.1 44.5 Imputed income taxes (Note 8) 10.7 14.0 Net income 23.3 30.5 MEMO Targeted return on equity (Note 9) 27.3 24.6 Nine months ending Sept. 30, 2001 Nine months ending Sept. 30, 2000 Revenue from services provided to depository institutions (Note 4) 693.3 654.9 Operating expense (Note 5) 598.5 519.7 Income from operations 94.9 135.2 Imputed costs (Note 6) Interest on float 15.6 5.7 Interest on debt 24.0 23.6 Sales taxes 8.9 6.1 FDIC insurance 0.0 48.5 0.0 35.4 Income from operations after imputed costs 46.4 99.8 Other income and expenses (Note 7) Investment income on clearing balances 233.4 306.2 Earning credits (200.6) 32.8 (275.8) 30.5 Income before taxes 79.1 130.2 Imputed income taxes (Note 8) 24.9 41.0 Net income 54.2 89.2 MEMO Targeted return on equity (Note 9) 81.9 73.8 NOTE. Components may not sum to totals because of rounding. The priced services Unrecovered float includes float generated by services to government agencies and by other financial statements consist of these tables and the accompanying notes. central bank services. Float recovered through income on clearing balances is the result of the increase in investable clearing balances; the increase is produced by a deduction for float for (4) REVENUE cash items in process of collection, which reduces imputed reserve requirements. The income on clearing balances reduces the float to be recovered through other means. As-of adjustments Revenue represents charges to depository institutions for priced services and is realized from are memorandum adjustments to an institution's reserve or clearing position to recover float each institution through one of two methods: direct charges to an institution's account or incurred by the institution. Direct charges are billed to the institution for float incurred when charges against its accumulated earnings credits. an institution chooses to close on a normal business day and for float incurred on interterritory check transportation. Float recovered through direct charges is valued at cost using the federal (5) OPERATING EXPENSES funds rate and charged directly to an institution's account. Float recovered through per-item fees is valued at the federal funds rate and has been added to the cost base subject to recovery. Operating expenses consist of the direct, indirect, and other general administrative expenses The 2001 float levels were unusually high related to the September 11 events. of the Reserve Banks for priced services plus the expenses for staff members of the Board of Governors working directly on the development of priced services. The expenses for Board (7) OTHER INCOME AND EXPENSES staff members totaled $3.68 million for the first, second, and third quarters of 2001 and $3.15 million for the first, second, and third quarters of 2000. The credit to expenses under SFAS 87 Consists of imputed investment income on clearing balances and the actual cost of earnings (see note 2) is reflected in operating expenses. credits. Investment income on clearing balances represents the average coupon-equivalent yield on three-month Treasury bills applied to the total clearing balance maintained, adjusted (6) IMPUTED COSTS for the effect of reserve requirements on clearing balances. Expenses for earnings credits granted to depository institutions on their clearing balances are derived by applying the Imputed costs consist of interest on float, interest on debt, sales taxes, and the FDIC average federal funds rate to the required portion of the clearing balances, adjusted for the net assessment. Interest on float is derived from the value of float to be recovered, either effect of reserve requirements on clearing balances. explicitly or through per-item fees, during the period. Float costs include costs for checks, book-entry securities, non-cash collection, ACH, and funds transfers. (8) INCOME TAXES Interest is imputed on the debt assumed necessary to finance priced-service assets. The sales taxes and FDIC assessment that the Federal Reserve would have paid had it been a Imputed income taxes are calculated at the effective tax rate derived from the PSAF model private-sector firm are among the components of the PSAF (see note 3). (see note 3). Float coats are based on the actual float incurred for each priced service, multiplied by the appropriate federal funds rate. Other imputed costs are allocated among priced services (9) RETURN ON EQUITY according to the ratio of operating expenses less shipping expenses for each service to the total expenses for all services less the total shipping expenses for all services. Represents the after-tax rate of return on equity that the Federal Reserve would have earned The following list shows the daily average recovery of float (before converting to float had it been a private business firm, as derived from the PSAF model (see note 3). costs) by the Reserve Banks for the first quarter of 2001 and 2000 in millions of dollars: 2001 2000 Total float 2,642.0 725.4 Uncovered float 154.8 145.6 Float subject to recovery 2,487.2 579.8 Sources of float recovery: Income on clearing balances 248.2 58.0 As-of adjustments 408.7 430.8 Direct charges 1,696.2 314.2 Per-item fees 134.1 (223.2) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • January 2002 Index to Statistical Tables References are to pages A3-A65, although the prefix 'A" is omitted in this index. ACCEPTANCES, bankers (See Bankers acceptances) Federal finance Assets and liabilities (See also Foreigners) Debt subject to statutory limitation, and types and ownership Commercial banks, 15-21 of gross debt, 27 Domestic finance companies, 32, 33 Receipts and outlays, 25, 26 Federal Reserve Banks, 10 Treasury financing of surplus, or deficit, 25 Foreign-related institutions, 20 Treasury operating balance, 25 Automobiles Federal Financing Bank, 30 Consumer credit, 36 Federal funds, 23, 25 Production, 44, 45 Federal Home Loan Banks, 30 Federal Home Loan Mortgage Corporation, 30, 34, 35 Federal Housing Administration, 30, 34, 35 BANKERS acceptances, 5, 10, 22, 23 Federal Land Banks, 35 Bankers balances, 15-21 (See also Foreigners) Federal National Mortgage Association, 30, 34, 35 Bonds (See also U.S. government securities) Federal Reserve Banks New issues, 31 Balanced sheet, priced services, 64 Rates, 23 Condition statement, 10, 65 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 Federal Reserve System Commercial banks, 15-21 Balance sheet for priced services, 64, 65 Federal Reserve Banks, 10 Condition statement for priced services, 64, 65 Certificates of deposit, 23 Federally sponsored credit agencies, 30 Commercial and industrial loans Finance companies Commercial banks, 15-21 Assets and liabilities, 32 Weekly reporting banks, 17, 18 Business credit, 33 Commercial banks Loans, 36 Assets and liabilities, 15-21 Paper, 22, 23 Commercial and industrial loans, 15-21 Float, 5 Consumer loans held, by type and terms, 36 Flow of funds, 37^11 Real estate mortgages held, by holder and property, 35 Foreign currency operations, 10 Time and savings deposits, 4 Foreign deposits in U.S. banks, 5 Commercial paper, 22, 23, 32 Foreign exchange rates, 62 Condition statements (See Assets and liabilities) Foreign-related institutions, 20 Construction, 42, 46 Foreign trade, 51 Consumer credit, 36 Foreigners Consumer prices, 42 Claims on, 52, 55-7, 59 Consumption expenditures, 48, 49 Liabilities to, 51—4, 58, 60, 61 Corporations Profits and their distribution, 32 GOLD Security issues, 31, 61 Certificate account, 10 Cost of living (See Consumer prices) Stock, 5, 51 Credit unions, 36 Government National Mortgage Association, 30, 34, 35 Currency in circulation, 5, 13 Gross domestic product, 48, 49 Customer credit, stock market, 24 HOUSING, new and existing units, 46 DEBT (See specific types of debt or securities) Demand deposits, 15-21 INCOME and expenses, Federal Reserve System, 64, 65 Depository institutions Income, personal and national, 42, 48, 49 Reserve requirements, 8 Industrial production, 42, 44 Reserves and related items, 4-6, 12 Insurance companies, 27, 35 Deposits (See also specific types) Interest rates Commercial banks, 4, 15-21 Bonds, 23 Federal Reserve Banks, 5, 10 Consumer credit, 36 Discount rates at Reserve Banks and at foreign central banks and Federal Reserve Banks, 7 foreign countries (See Interest rates) Money and capital markets, 23 Discounts and advances by Reserve Banks (See Loans) Mortgages, 34 Dividends, corporate, 32 Prime rate, 22 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 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

A67 LABOR force, 42 SAVING Life insurance companies (See Insurance companies) Flow of funds, 35, 36 Loans (See also specific types) National income accounts, 48 Commercial banks, 15-21 Savings deposits (See Time and savings deposits) Federal Reserve Banks, 5-7, 10, 11 Savings institutions, 35, 36, 37-41 Federal Reserve System, 64, 65 Securities (See also specific types) Financial institutions, 35 Federal and federally sponsored credit agencies, 30 Insured or guaranteed by United States, 34, 35 Foreign transactions, 60 New issues, 31 MANUFACTURING Prices, 24 Capacity utilization, 43 Special drawing rights, 5, 10, 50, 51 Production, 43, 45 State and local governments Margin requirements, 24 Holdings of U.S. government securities, 27 Member banks, reserve requirements, 8 New security issues, 31 Mining production, 45 Rates on securities, 23 Mobile homes shipped, 46 Stock market, selected statistics, 24 Monetary and credit aggregates, 4, 12 Stocks (See also Securities) Money and capital market rates, 23 New issues, 31 Money stock measures and components, 4, 13 Prices, 24 Mortgages (See Real estate loans) Mutual funds, 13, 32 Student Loan Marketing Association, 30 Mutual savings banks (See Thrift institutions) TAX receipts, federal, 26 Thrift institutions, 4 (See also Credit unions and Savings NATIONAL defense outlays, 26 institutions) National income, 48 Time and savings deposits, 4, 13, 15-21 Trade, foreign, 51 OPEN market transactions, 9 Treasury cash, Treasury currency, 5 Treasury deposits, 5, 10, 25 PERSONAL income, 49 Treasury operating balance, 25 Priced services, Federal Reserve income statements, 64, 65 UNEMPLOYMENT, 42 Prices U.S. government balances Consumer and producer, 42, 47 Commercial bank holdings, 15-21 Stock market, 24 Treasury deposits at Reserve Banks, 5, 10, 25 Prime rate, 22 U.S. government securities Producer prices, 42, 47 Bank holdings, 15-21, 27 Production, 42, 44 Dealer transactions, positions, and financing, 29 Profits, corporate, 32 Federal Reserve Bank holdings, 5, 10, 11, 27 Foreign and international holdings and transactions, 10, 27, 61 REAL estate loans Open market transactions, 9 Banks, 15-21, 35 Outstanding, by type and holder, 27, 28 Terms, yields, and activity, 34 Rates, 23 Type and holder and property mortgaged, 35 U.S. international transactions, 50-62 Reserve requirements, 8 Utilities, production, 45 Reserves Commercial banks, 15-21 VETERANS Affairs, Department of, 34, 35 Depository institutions, 4-6, 12 Federal Reserve Banks, 10 WEEKLY reporting banks, 17, 18 U.S. reserve assets, 51 Wholesale (producer) prices, 42, 47 Residential mortgage loans, 34, 35 Retail credit and retail sales, 36, 42 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Federal Reserve Bulletin • January 2002 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 AND REGULATION—Continued DONALD J. WINN, Director LYNN S. FOX, Assistant to the Board DAVID M. WRIGHT, Assistant Director MICHELLE A. SMITH, Assistant to the Board SIDNEY M. SUSSAN, Adviser DONALD L. KOHN, Adviser to the Board WILLIAM C. SCHNEIDER, JR., Project Director, WINTHROP P. HAMBLEY, Deputy Congressional Liaison National Information Center NORMAND R.V. BERNARD, Special Assistant to the Board JOHN LOPEZ, Special Assistant to the Board DIVISION OF INTERNATIONAL FINANCE BOB STAHLY MOORE, Special Assistant to the Board KAREN H. JOHNSON, Director ROSANNA PIANALTO-CAMERON, Special Assistant to the Board DAVID H. HOWARD, Deputy Director DAVID W. SKIDMORE, Special Assistant to the Board THOMAS A. CONNORS, Associate Director DALE W. HENDERSON, Associate Director LEGAL DIVISION RICHARD T. FREEMAN, Deputy Associate Director J. VIRGIL MATTINGLY, JR., General Counsel WILLIAM L. HELKIE, Deputy Associate Director SCOTT G. ALVAREZ, Associate General Counsel STEVEN B. KAMIN, Deputy Associate Director RICHARD M. ASHTON, Associate General Counsel JON W. FAUST, Assistant Director KATHLEEN M. O'DAY, Associate General Counsel JOSEPH E. GAGNON, Assistant Director STEPHANIE MARTIN, Assistant General Counsel MICHAEL P. LEAHY, Assistant Director ANN E. MISBACK, Assistant General Counsel D. NATHAN SHEETS, Assistant Director STEPHEN L. SICILIANO, Assistant General Counsel RALPH W. TRYON, Assistant Director KATHERINE H. WHEATLEY, Assistant General Counsel CARY K. WILLIAMS, Assistant General Counsel DIVISION OF RESEARCH AND STATISTICS OFFICE OF THE SECRETARY DAVID J. STOCKTON, Director EDWARD C. ETTIN, Deputy Director JENNIFER J. JOHNSON, Secretary DAVID W. WILCOX, Deputy Director ROBERT DEV. FRIERSON, Deputy Secretary MYRON L. KWAST, Associate Director MARGARET M. SHANKS, Assistant Secretary STEPHEN D. OLINER, Associate Director PATRICK M. PARKINSON, Associate Director DIVISION OF BANKING SUPERVISION LAWRENCE SLIFMAN, Associate Director AND REGULATION CHARLES S. STRUCKMEYER, Associate Director RICHARD SPILLENKOTHEN, Director MARTHA S. SCANLON, Deputy Associate Director STEPHEN C. SCHEMERING, Deputy Director JOYCE K. ZICKLER, Deputy Associate Director HERBERT A. BIERN, Senior Associate Director J. NELLIE LIANG, Assistant Director ROGER T. COLE, Senior Associate Director S. WAYNE PASSMORE, Assistant Director WILLIAM A. RYBACK, Senior Associate Director DAVID L. REIFSCHNEIDER, Assistant Director GERALD A. EDWARDS, JR., Associate Director JANICE SHACK-MARQUEZ, Assistant Director STEPHEN M. HOFFMAN, JR., Associate Director WILLIAM L. WASCHER, Assistant Director JAMES V. HOUPT, Associate Director ALICE PATRICIA WHITE, Assistant Director JACK P. JENNINGS, Associate Director GLENN B. CANNER, Senior Adviser MICHAEL G. MARTINSON, Associate Director DAVID S. JONES, Senior Adviser MOLLY S. WASSOM, Associate Director THOMAS D. SIMPSON, Senior Adviser HOWARD A. AMER, Deputy Associate Director NORAH M. BARGER, Deputy Associate Director BETSY CROSS, Deputy Associate Director DIVISION OF MONETARY AFFAIRS DEBORAH P. BAILEY, Assistant Director VINCENT R. REINHART, Director BARBARA J. BOUCHARD, Assistant Director DAVID E. LINDSEY, Deputy Director ANGELA DESMOND, Assistant Director BRIAN F. MADIGAN, Deputy Director JAMES A. EMBERSIT, Assistant Director WILLIAM C. WHITESELL, Deputy Associate Director CHARLES H. HOLM, Assistant Director JAMES A. CLOUSE, Assistant Director HEIDI WILLMANN RICHARDS, Assistant Director WILLIAM B. ENGLISH, Assistant Director WILLIAM G. SPANIEL, Assistant Director RICHARD D. PORTER, Senior Adviser Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A69 EDWARD M. GRAMLICH MARK W. OLSON SUSAN SCHMIDT BIES DIVISION OF CONSUMER DIVISION OF RESERVE BANK OPERATIONS AND COMMUNITY AFFAIRS AND PAYMENT SYSTEMS DOLORES S. SMITH, Director LOUISE L. ROSEMAN, Director GLENN E. LONEY, Deputy Director PAUL W. BETTGE, Associate Director SANDRA F. BRAUNSTEIN, Assistant Director JEFFREY C. MARQUARDT, Associate Director MAUREEN R ENGLISH, Assistant Director KENNETH D. BUCKLEY, Assistant Director ADRIENNE D. HURT, Assistant Director JOSEPH H. HAYES, JR., Assistant Director IRENE SHAWN MCNULTY, Assistant Director EDGAR A. MARTINDALE III, Assistant Director MARSHA W. REIDHILL, Assistant Director OFFICE OF JEFF J. STEHM, Assistant Director STAFF DIRECTOR FOR MANAGEMENT JACK K. WALTON, Assistant Director STEPHEN R. MALPHRUS, Staff Director OFFICE OF THE INSPECTOR GENERAL SHEILA CLARK, EEO Programs Director BARRY R. SNYDER, Inspector General MANAGEMENT DIVISION DONALD L. ROBINSON, Deputy Inspector General WILLIAM R. JONES, Director STEPHEN J. CLARK, Associate Director DARRELL R. PAULEY, Associate Director DAVID L. WILLIAMS, Associate Director CHRISTINE M. FIELDS, Assistant Director DIVISION OF SUPPORT SERVICES ROBERT E. FRAZIER, Director DIVISION OF INFORMATION TECHNOLOGY RICHARD C. STEVENS, Director MARIANNE M. EMERSON, Deputy Director MAUREEN T. HANNAN, Associate Director TILLENA G. CLARK, Assistant Director GEARY L. CUNNINGHAM, Assistant Director 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 ROBERT F. TAYLOR, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Federal Reserve Bulletin • January 2002 Federal Open Market Committee and Advisory Councils FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman WILLIAM J. MCDONOUGH, Vice Chairman SUSAN SCHMIDT BIES JERRY L. JORDAN MARK W. OLSON ROGER W. FERGUSON, JR. ROBERT D. MCTEER, JR. ANTHONY M. SANTOMERO EDWARD M. GRAMLICH LAURENCE H. MEYER GARY H. STERN ALTERNATE MEMBERS J. ALFRED BROADDUS, JR. MICHAEL H. MOSKOW JAMIE B. STEWART, JR. JACK GUYNN ROBERT T. PARRY STAFF DONALD L. KOHN, Secretary and Economist CHRISTINE M. CUMMING, Associate Economist NORMAND R.V. BERNARD, Deputy Secretary JEFFREY C. FUHRER, Associate Economist GARY P. GILLUM, Assistant Secretary CRAIG S. HAKKIO, Associate Economist MICHELLE A. SMITH, 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 W. WILCOX, Associate Economist DINO KOS, Manager, System Open Market Account FEDERAL ADVISORY COUNCIL DAVID A. SPINA, First District ALAN G. MCNALLY, Seventh District DAVID A. COULTER, Second District DAVID W. KEMPER, Eighth District RUFUS A. FULTON, JR., 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

A71 CONSUMER ADVISORY COUNCIL LAUREN ANDERSON, New Orleans, Louisiana, Chairman DOROTHY BROADMAN, San Francisco, California, Vice Chairman ANTHONY S. ABB ATE, Saddlebrook, New Jersey J. PATRICK LIDDY, Cincinnati, Ohio TERESA A. BRYCE, St. Louis, Missouri OSCAR MARQUIS, Park Ridge, Illinois MALCOLM BUSH, Chicago, Illinois JEREMY NOWAK, Philadelphia, Pennsylvania MANUEL CASANOVA, JR., Brownsville, Texas NANCY PIERCE, Kansas City, Missouri CONSTANCE K. CHAMBERLIN, Richmond, Virginia MARTA RAMOS, San Juan, Puerto Rico ROBERT M. CHEADLE, Ada, Oklahoma RONALD A. REITER, San Francisco, California MARY ELLEN DOMEIER, New Ulm, Minnesota ELIZABETH RENUART, Boston, Massachusetts LESTER W. FIRSTENBERGER, Hopkinton, Massachusetts RUSSELL W. SCHRADER, San Francisco, California JOHN C. GAMBOA, San Francisco, California FRANK TORRES, JR., Washington, District of Columbia EARL JAROLIMEK, Fargo, North Dakota GARY S. WASHINGTON, Chicago, Illinois WILLIE M. JONES, Boston, Massachusetts ROBERT L. WYNN II, Madison, Wisconsin ANNE S. LI, Washington, District of Columbia THRIFT INSTITUTIONS ADVISORY COUNCIL MARK H. WRIGHT, San Antonio, Texas, President KAREN L. MCCORMICK, Port Angeles, Washington, Vice President JOHN B. DICUS, Topeka, Kansas KEVIN E. PIETRINI, Virginia, Minnesota RONALD S. ELIASON, Provo, Utah HERBERT M. SANDLER, Oakland, California D. R. GRIMES, Alpharetta, Georgia WILLIAM J. SMALL, Defiance, Ohio JAMES F. MCKENNA, Brookfield, Wisconsin EVERETT STILES, Franklin, North Carolina CHARLES C. PEARSON, JR., Harrisburg, Pennsylvania DAVID L. VIGREN, Rochester, New York Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Federal Reserve Bulletin • January 2002 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

A73 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- Studies 165-174 are available on line at www.federalreserve.gov/ LATIONS: AN ANALYSIS OF EXPERIENCE WITH THE TRUTH IN SAVINGS ACT, by Gregory Elliehausen and Barbara R. pubs/staffstudies. Requests to obtain single copies of any paper or Lowrey. December 1997. 17 pp. to be added to the mailing list for the series may be sent to 171. THE COST OF BANK REGULATION: A REVIEW OF THE EVI- Publications Services. DENCE, by Gregory Elliehausen. April 1998. 35 pp. 172. USING SUBORDINATED DEBT AS AN INSTRUMENT OF MAR- 159. NEW DATA ON THE PERFORMANCE OF NONBANK SUBSIDI- KET DISCIPLINE, by Study Group on Subordinated Notes ARIES OF BANK HOLDING COMPANIES, by Nellie Liang and and Debentures, Federal Reserve System. December 1999. Donald Savage. February 1990. 12 pp. 69 pp. 160. BANKING MARKETS AND THE USE OF FINANCIAL SER- 173. IMPROVING PUBLIC DISCLOSURE IN BANKING, by Study VICES BY SMALL AND MEDIUM-SIZED BUSINESSES, by Group on Disclosure, Federal Reserve System. March 2000. Gregory E. Elliehausen and John D. Wolken. September 35 pp. 1990. 35 pp. 174. BANK MERGERS AND BANKING STRUCTURE IN THE UNITED 162. EVIDENCE ON THE SIZE OF BANKING MARKETS FROM MORT- STATES, 1980-98, by Stephen Rhoades. August 2000. 33 pp. GAGE LOAN RATES IN TWENTY CITIES, by Stephen A. Rhoades. February 1992. 11 pp. 164. THE 1989-92 CREDIT CRUNCH FOR REAL ESTATE, by James T. Fergus and John L. Goodman, Jr. July 1993. 20 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Federal Reserve Bulletin • January 2002 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

A75 1-A 2-B 3-C 4-D 5-E ME Pittsburgh Baltimore MD XPA / I, /C I VT —wv wv NT NH Bullalo (Charlotte M A" I NJ NY CT ^RI BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G l-H • Nashville KY / Birmingham- U ) (N | Louisville MO AR i \ Jacksonville • \ • lee mphis NewlSleans ^ Little / . i Rock ( MJ Miami ATLANTA CHICAGO ST. LOUIS MINNEAPOLIS 10-J 12-L MO \L ASKA WWAA Seattle / NM Oklahoma Cit\ Portland ' OK mmSBBBBmWBB^ KANSAS CITY CA / • 1HHF ^^^^^^^^^ 11-K | ^ ) Salt l*ke City --J \ •Los Angeles HAWAII AZ DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Federal Reserve Bulletin • January 2002 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 O. Taylor Cathy E. Minehan James J. Norton Paul M. Connolly NEW YORK* 10045 Peter G. Peterson William J. McDonough Gerald M. Levin Jamie B. Stewart, Jr. Buffalo 14240 Patrick P. Lee 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. McKee1 Birmingham 35283 V. Larkin Martin Andre T. Anderson Jacksonville 32231 Marsha G. Rydberg Robert J. Slack1 Miami 33152 Rosa Sugranes James T. Curry III Nashville 37203 Beth Dortch Franklin Melvyn K. Purcell1 New Orleans 70161 R. Glenn Pumpelly Robert J. Musso1 CHICAGO* 60690 Robert J. Darnall Michael H. Moskow W. James Farrell 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 To be announced Robert A. Hopkins Louisville 40232 To be announced Thomas A. Boone Memphis 38101 Russell Gwatney Martha Perine Beard MINNEAPOLIS 55480 Ronald N. Zwieg Gary H. Stern Linda Hall Whitman James M. Lyon Helena 59601 Thomas O. Markle Samuel H. Gane KANSAS CITY 64198 Terrence P. Dunn Thomas M. Hoenig Richard H. Bard Richard K. Rasdall Denver 80217 To be announced Maryann Hunter1 Oklahoma City 73125 To be announced Dwayne E. Boggs Omaha 68102 To be announced Steven D. Evans DALLAS 75201 H. B. Zachry, Jr. Robert D. McTeer, Jr. Patricia M. Patterson Helen E. Holcomb El Paso 79999 To be announced Sammie C. Clay Houston 77252 Edward O. Gaylord Robert Smith III1 San Antonio 78295 To be announced 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 Boyd E. Givan 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

A77 Publications of Interest FEDERAL RESERVE REGULATORY SERVICE To promote public understanding of its regulatory func- The Payment System Handbook deals with expedited tions, the Board publishes the Federal Reserve Regu- funds availability, check collection, wire transfers, and latory Service, a four-volume loose-leaf service con- risk-reduction policy. It includes Regulations CC, J, and taining all Board regulations as well as related statutes, EE, related statutes and commentaries, and policy interpretations, policy statements, rulings, and staff statements on risk reduction in the payment system. opinions. For those with a more specialized interest in For domestic subscribers, the annual rate is $200 for the Board's regulations, parts of this service are pub- the Federal Reserve Regulatory Service and $75 for lished separately as handbooks pertaining to monetary each handbook. For subscribers outside the United policy, securities credit, consumer affairs, and the pay- States, the price including additional air mail costs is ment system. $250 for the service and $90 for each handbook. These publications are designed to help those who The Federal Reserve Regulatory Service is also availmust frequently refer to the Board's regulatory materi- able on CD-ROM for use on personal computers. For a als. They are updated monthly, and each contains cita- standalone PC, the annual subscription fee is $300. For tion indexes and a subject index. network subscriptions, the annual fee is $300 for 1 con- The Monetary Policy and Reserve Requirements current user, $750 for a maximum of 10 concurrent Handbook contains Regulations A, D, and Q, plus users, $2,000 for a maximum of 50 concurrent users, related materials. and $3,000 for a maximum of 100 concurrent users. The Securities Credit Transactions Handbook con- Subscribers outside the United States should add $50 tains Regulations T, U, and X, dealing with exten- to cover additional airmail costs. For further informasions of credit for the purchase of securities, together tion, call (202) 452-3244. with related statutes, Board interpretations, rulings, All subscription requests must be accompanied by a and staff opinions. Also included is the Board's list of check or money order payable to the Board of Goverforeign margin stocks. nors of the Federal Reserve System. Orders should be The Consumer and Community Affairs Handbook addressed to Publications Services, mail stop 127, Board contains Regulations B, C, E, G, M, P, Z, AA, BB, and of Governors of the Federal Reserve System, Washing- DD, and associated materials. ton, DC 20551. GUIDE TO THE FLOW OF FUNDS ACCOUNTS A new edition of Guide to the Flow of Funds Accounts and describes how the series is derived from source is now available from the Board of Governors. The new data. The Guide also explains the relationship between edition incorporates changes to the accounts since the the flow of funds accounts and the national income and initial edition was published in 1993. Like the earlier product accounts and discusses the analytical uses of publication, it explains the principles underlying the flow of funds data. The publication can be purchased, flow of funds accounts and describes how the accounts for $20.00, from Publications Services, Mail Stop 127, are constructed. It lists each flow series in the Board's Board of Governors of the Federal Reserve System, flow of funds publication, "Flow of Funds Accounts of Washington, DC 20551. the United States" (the Z.l quarterly statistical release), Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Federal Reserve Bulletin • January 2002 Federal Reserve Statistical Releases Available on the Commerce Department's Economic Bulletin Board The Board of Governors of the Federal Reserve Sys- For further information regarding a subscription to tem makes some of its statistical releases available to the economic bulletin board, please call (202) 482the public through the U.S. Department of Com- 1986. The releases transmitted to the economic bullemerce's economic bulletin board. Computer access tin board, on a regular basis, are the following: to the releases can be obtained by subscription. Reference Number Statistical release Frequency of release H.3 Aggregate Reserves Weekly/Thursday H.4.1 Factors Affecting Reserve Balances Weekly/Thursday H.6 Money Stock Weekly/Thursday H.8 Assets and Liabilities of Insured Domestically Chartered Weekly/Monday and Foreign Related Banking Institutions H.10 Foreign Exchange Rates Weekly/Monday H.15 Selected Interest Rates Weekly/Monday G.5 Foreign Exchange Rates Monthly/end of month G.17 Industrial Production and Capacity Utilization Monthly/midmonth G.19 Consumer Installment Credit Monthly/fifth business day Z.l Flow of Funds Quarterly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis