Federal Reserve Bulletin, 2002-12

Volume 88 • Number 12 • December 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

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 • 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 Publications Department under the direction of Lucretia M. Boyer. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Table of Contents 469 MORTGAGE REFINANCING IN 2001 AND Conference on "Banking Opportunities in EARLY 2002 Indian Country." Over the past ten years, millions of homeowners Enforcement actions. have taken advantage of lower mortgage interest Changes in Board staff. rates and higher home values and have refinanced their mortgage loans. For many, the deci- 485 LEGAL DEVELOPMENTS sion to refinance was motivated by a desire to reduce their monthly mortgage payments, either Various bank holding company, bank service by obtaining a lower interest rate or by extend- corporation, and bank merger orders; and pending the maturity of their mortgage. When they ing cases. have refinanced, many homeowners have liquefied some of the equity they accumulated in their A1 FINANCIAL AND BUSINESS STATISTICS homes by borrowing more than they needed to These tables reflect data available as of pay off their former mortgage and cover the October 29, 2002. transaction costs of the refinancing. They have used the funds raised in so-called cash-out refi- A3 GUIDE TO TABLES nancings to make home improvements, to repay other debts, or to purchase goods and services or A4 Domestic Financial Statistics other assets. A42 Domestic Nonfinancial Statistics A44 International Statistics This article presents estimates, based on recent survey findings, of the incidence of refinancing, the changes in terms and conditions of A57 GUIDE TO SPECIAL TABLES AND mortgages after refinancing, the amount of funds STATISTICAL RELEASES homeowners raised in the process, and the ways in which homeowners used the funds. It also A58 INDEX TO STATISTICAL TABLES provides comparisons with previous surveys of A60 BOARD OF GOVERNORS AND STAFF refinancing activity and a statistical analysis of the relative importance of different determinants A62 FEDERAL OPEN MARKET COMMITTEE AND of refinancing and the amount of home equity STAFF; ADVISORY COUNCILS liquefied during refinancing. Finally, it gives rough estimates of the effects of recent refinanc- A64 FEDERAL RESERVE BOARD PUBLICATIONS ing on the U.S. economy, including the effects on aggregate consumption spending. A66 SCHEDULE OF RELEASE DATES FOR PERIODIC RELEASES 482 ANNOUNCEMENTS FOMC Directive. A68 MAPS OF THE FEDERAL RESERVE SYSTEM Amendment to Regulation A. A70 FEDERAL RESERVE BANKS, BRANCHES, AND OFFICES Issuance of final Regulation W. Approval of fee schedules for payment services. A71 INDEX TO VOLUME 88 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Mortgage Refinancing in 2001 and Early 2002 Glenn Canner, Karen Dynan, and Wayne Passmore, after tax over the long run exceeds the after-tax costs of the Board's Division of Research and Statistics, of the transaction, the homeowner stands to gain prepared this article. Research assistance was pro- from the transaction. In addition, homeowners somevided by Jennifer Attrep and Gillian Burgess. times refinance to raise cash rather than to obtain a lower interest rate or to reduce uncertainty about In recent years, millions of homeowners in the United future payments. States have taken advantage of relatively low interest This article presents estimates, based on recent rates and rising home values to refinance the mort- survey findings, of the incidence of refinancing, the gages on their primary residences. In many cases, changes in terms and conditions of mortgages after refinancing has resulted in a lower interest rate and a refinancing, the amount of funds homeowners raised reduction in monthly mortgage payments, which have in the process, and the ways in which homeowners allowed homeowners to spend or save that portion used the funds. It also provides comparisons with of their incomes no longer dedicated to servicing previous surveys of refinancing activity and a statistheir mortgage debt. When they have refinanced, tical analysis of the relative importance of different many homeowners have liquefied some of the equity determinants of refinancing and the amount of home they accumulated in their homes by borrowing more equity liquefied during refinancing. Finally, it gives than they needed to pay off their former mortgage rough estimates of the effects of recent refinancing on and cover the transaction costs of the refinancing. the U.S. economy, including the effects on aggregate They used the funds raised in so-called cash-out consumption spending. refinancings to make home improvements, to repay other debts, or to purchase goods and services or other assets. SURVEY FINDINGS ON REFINANCING ACTIVITY Choosing whether, and when, to refinance a home mortgage is a decision that involves a careful bal- For many years, refinancing activity has been the ancing of costs and benefits. Some of the factors to focus of Board-sponsored surveys of households and be considered are known with certainty and are of articles in the Federal Reserve Bulletin.2 To learn readily quantifiable; others, such as the future course of interest rates, cannot be known with certainty. A facilitate the comparison, the after-tax present value of the financed transaction costs must be determined. If the interest rate on the new homeowner with a mortgage is more likely to conloan is used as the discount rate in the calculation, the pre-tax present sider refinancing when the current interest rate on value of the financed transaction costs equals the lump-sum payment mortgages falls below the rate on the homeowner's today. On an after-tax basis, however, the two amounts may differ. If the transaction costs on a refinancing are financed, the interest paid on existing loan. At such times, the homeowner must those borrowed funds is fully tax-deductible. In contrast, if a lump weigh the prospective after-tax savings from lower sum payment of transaction costs is made, only the portion of those monthly payments on a new, lower-rate loan against costs that constitutes points (prepaid interest) is tax-deductible, and it must be amortized over the life of the loan. the after-tax costs of the refinancing transaction itself, 2. The Federal Reserve Board monitors refinancing activity as well including any mortgage fees (points) and application as home equity lending, another form of borrowing used to liquefy and appraisal fees. Because the savings from lower accumulated equity in homes. Both activities can significantly affect the finances of individual homeowners as well as overall economic interest payments accumulate slowly over time as the activity. See Glenn B. Canner, James T. Fergus, and Charles A. loan is repaid, the amounts that would be saved in a Luckett, "Home Equity Lines of Credit," Federal Reserve Bulletin, refinancing must be discounted to their present value vol. 74 (June 1988), pp. 361-63; Glenn B. Canner, Charles A. Luckett, and Thomas A. Durkin, "Home Equity Lending," Federal Reserve and compared with the costs of the transaction, often Bulletin, vol. 75 (May 1989), pp. 333^4; Glenn B. Canner, Charles A. referred to as the closing costs.1 If the amount saved Luckett, and Thomas A. Durkin, "Mortgage Refinancing," Federal Reserve Bulletin, vol. 76 (August 1990), pp. 604-12; Glenn B. Canner, Charles A. Luckett, and Thomas A. Durkin, "Home Equity Lending: 1. The comparison is not always straightforward, as the home- Evidence from Recent Surveys," Federal Reserve Bulletin, vol. 80 owner in many instances has a choice of either paying the transaction (July 1994), pp. 571-83; Glenn B. Canner, Thomas A. Durkin, and costs as a lump sum at the time of the refinancing or adding the costs Charles A. Luckett, "Recent Developments in Home Equity Lendto the amount being refinanced. The cost-benefit comparison is rela- ing," Federal Reserve Bulletin, vol. 84 (April 1998), pp. 241-51; tively easy in the former case but is more complicated in the latter. To and Peter J. Brady, Glenn B. Canner, and Dean M. Maki, "The Effects Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

470 Federal Reserve Bulletin • December 2002 1. Mortgage status and refinancing activity of homeowners Percent except as noted Most recent mortgage 0HHB4—— '' • " Mean Mean Mean mortgage amount home equity interest rate (thousands (thousands of dollars) of dollars) Homeowners with mortgages 62.8 7.33 100.2 110.4 54.0 100.0 Never refinanced 50.9 7.55 94.8 85.1 57.6 47.0 Have refinanced • 49.1 7.09 105.8 135.7 50.5 52.8 V MEMO: Refinancers Last refinanced in 2001 or early 2002 46.6 6.82 128.8 110.7 61.6 30.8 Ml Those who took cash out 44.8 6.85 125.9 104.8 62.9 13.6 Last refinanced at an earlier time 53.4 7.30 84.2 159.2 40.3 21.4 NOTE. All survey data in this and the following tables are based on weighted SOURCE. Here and in subsequent tables (except as noted), Surveys of observations. Consumers, University of Michigan Survey Research Center, January 2002- 1. Percentages may not sum to 100 because of rounding and a small number June 2002. of missing observations. more about recent refinancing activity, Fannie Mae Refinancing activity tends to move inversely with and the Federal Reserve sponsored questions con- changes in interest rates (chart 1). Because interest cerning mortgage refinancing in the monthly Surveys rates have fluctuated over the past decade or so and of Consumers from January through June 2002; these have been low relative to the previous two decades, surveys were conducted by the Survey Research homeowners have had several attractive opportuni- Center of the University of Michigan (for details see ties to refinance in recent years. Relatively low longappendix A). The questions elicited information both term interest rates in the second half of 2001 and the on the characteristics of homeowners' current and first half of 2002 stimulated the most recent refinancpast mortgages and on the use of funds raised in ing boom. cash-out refinancings. The close link between mortgage interest rates and refinancing makes the time period under consideration important for estimating the amount of refinanc- The Prevalence of Refinancing ing activity (table 2). Our survey asked detailed questions about refinancing during 2001 or the first half As of the middle of 2002, about 63 percent of U.S. of 2002, a period of heavy refinancing activity. Durhomeowners had an outstanding mortgage on their ing this reference period, mortgage rates fluctuated primary residence, owing on average about $100,000 considerably. As a consequence, the incidence of (table 1). Home mortgage debt is commonly incurred refinancing is dependent on the time frame within the for two reasons. Most homeowners need to borrow funds to finance the purchase of a home. Also, homeowners sometimes borrow against the accumulated 1. Refinancing activity and mortgage rates, 1993-2001 equity in their homes to obtain funds to buy goods and services, to repay other debts, or to finance the purchase of financial or nonfinancial assets. About half of the homeowners with mortgages refinanced at least once after buying their homes. Mortgage refinancing has become a widespread practice in recent years because of a combination of factors, including lower interest rates; the widespread adoption of new technologies that have reduced mortgage transaction costs; and gains in home values and equity, which have increased the opportunities to borrow additional amounts. In addition, the general disappearance of mortgage prepayment penalties during the late 1980s encouraged refinancing activity. NOTE. The data are monthly and extend through December 2001. of Recent Mortgage Refinancing," Federal Reserve Bulletin, vol. 86 SOURCE. Federal Home Loan Mortgage Corporation; Home Mortgage (July 2000), pp. 441-50. Disclosure Act data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Mortgage Refinancing in 2001 and Early 2002 471 2. Distribution of mortgage refinancers in different periods many refinancing homeowners liquefy equity, adding Percent to their debt. Another possibility is that homeowners who have relatively large mortgage balances have a Share of homeowners Average FHLMC 30-year Period with mortgages mortgage rate greater propensity to refinance because the potential who refinanced (lagged two months) interest savings are more likely to exceed the transac- 2001 tion costs associated with refinancing. Both of these January ... .69 February .. .43 possibilities are considered later in the article. March 1.00 April 1.81 May .77 June 1.48 July 1.00 Reasons for Refinancing August 1.26 September 1.06 October ... 1.95 As noted, homeowners have various reasons for refi- November. 2.14 December . 1.93 nancing their mortgages. These include obtaining a 2002 • lower interest rate, changing the other terms of their January . 3.32 loan (such as converting from an adjustable-rate to a February 1.82 March .. 1.59 fixed-rate mortgage or shortening or lengthening the April ... 1.25 May .86 repayment period), and liquefying equity. Survey June .56 responses from homeowners who refinanced in 2001 MEMO: Share of and the first half of 2002 provide an opportunity to homeowners who refinanced— measure the proportion of homeowners who changed Before 2001 26.24 January- their mortgage circumstances along each of these December 2001 .. 15.81 2 dimensions. January 2001- March 2002 21.46 Because mortgage interest rates were relatively April 2001- March 2002 19.33 low during the reference period, 96 percent of sur- January 2001- June 2002 22.87 veyed homeowners who refinanced over this period In year preceding obtained a lower rate (table 3). The average interest survey month3 ... 20.20 rate for those who refinanced declined 1.83 percent- 1. Percentages reflect potential number of respondents who could report they age points, from 8.65 percent to 6.82 percent. Virturefinanced in a given month. 2. This figure differs slightly from the sum of the percentages for the months ally all homeowners who refinanced (over 99 perin 2001 shown above because some respondents did not provide the month of cent) and did not liquefy equity in their homes refinancing. 3. Average mortgage rate for the months that constitute each twelve-month obtained a lower mortgage rate. Among those extractperiod. ing equity, about 91 percent also obtained a lower . . . Not applicable. SOURCE. Federal Home Loan Mortgage Corporation. rate. A number of refinancing homeowners shifted from adjustable-rate mortgages to fixed-rate mortgages full reference period. Between 16 percent and 23 per- when they refinanced (table 4). Nearly three-quarters cent of homeowners with mortgages reported refi- of the 14 percent of refinancers who had an nancing since the beginning of 2001, depending on adjustable-rate mortgage before refinancing switched which period is considered (as shown in the memo item of the table). For the entire reference period, the 2002 survey findings suggest that an estimated 3. Interest rates on refinanced loans, 2001 and 2002 11 million homeowners refinanced their mortgages in Percent 2001 or early 2002. No equity Equity All Item liquefied1 liquefied1 refinancers Refinancing and the Amount of Mortgage Debt Mean interest rate on old mortgage 8.49 8.85 8.65 Mean interest rate on Homeowners who have refinanced their mortgages new mortgage 6.80 6.85 6.82 Difference (percentage points) tend to have more mortgage debt than those who 1.69 2.00 1.83 have not. The survey found that 49 percent of mort- MEMO Share of refinancers who lowered gage debt holders had refinanced their loan by 2001 their interest rate 99.5 90.7 95.6 Mean loan-to-value ratio 60.4 62.9 61.6 or early 2002 but that these refinancers accounted for 53 percent of outstanding mortgage debt. Refinancers 1. Equity is liquefied when a homeowner refinances mortgage debt and borrows more than is necessary to repay the balance on the existing mortgage(s) might account for a larger share of the debt because plus closing costs on the new loan. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

472 Federal Reserve Bulletin • December 2002 4. Type of original and refinanced loans and incidence 5. Effects of cash-out refinancing on term to maturity of cash-out among 2001 and 2002 refinancers and size of monthly mortgage payment, 2001 and 2002 Percent Percent Type of original loan TTyyppee ooff rreeffiinnaanncceedd llooaann TToottaall Adjustable rate Fixed rate AAAdddjjjuuussstttaaabbbllleee rrraaattteee 4 » 11 FFFiiixxxeeeddd rrraaattteee 10 77 87 Effect on maturity Lengthened maturity """ TTT SSS ooolllaaa!!! fff ''' ''' 86 100 Shortened maturity .. No change Incidence of cash-out Total AAAdddjjjuuussstttaaabbbllleee rrraaattteee Effect on monthly payment CCCaaassshhh---ooouuuttt Higher monthly payment . 1? 42 26 NNNooo cccaaassshhh---ooouuuttt 38 45 43 Lower monthly payment . 73 2277 52 No change 15 3311 22 FFFiiixxxeeeddd rrraaattteee Total 100 100 100 CCCaaassshhh---ooouuuttt 46 44 44 NNNooo cccaaassshhh---ooouuuttt 1. Equity is liquefied when a homeowner refinances mortgage debt and borrows more than is necessary to repay the balance on the existing mortgage(s) plus closing costs on the new loan. to a fixed-rate loan. However, some of those who and the term of their mortgage lengthened about six originally had a fixed-rate loan shifted to an years on average (not in table). In contrast, 17 percent adjustable-rate product.3 The net result was that, after had mortgages with a shorter maturity, most of whom refinancing, the overall proportion of homeowners chose fifteen-year mortgages, and shortened their with an adjustable-rate mortgage changed little. maturity by an average of IV2 years (not in table). The propensity to liquefy equity during refinancing The remainder kept their maturity roughly the same. differed between those refinancing with a fixed-rate A significant portion (45 percent) of homeowners and those refinancing with an adjustable-rate mort- who refinanced in 2001 and the first half of 2002 gage. Among those taking out an adjustable-rate used the opportunity to liquefy some of their home mortgage, 57 percent extracted equity, whereas of equity. By comparison, about 35 percent of refinancthose selecting a fixed-rate mortgage, only 44 percent ing homeowners in a similar survey in 1999 liqueborrowed additional funds. Homeowners refinancing fied equity (not shown in table). The difference in the into an adjustable-rate mortgage spent a greater share proportion of cash-out refinancings in the two surof the funds for home improvement, suggesting that veys may have been due to differences in housing they chose an adjustable-rate mortgage either because market conditions. Home prices had generally apprethey desired a lower payment in the short-term or ciated much more rapidly in the years just before the because they might be fixing up their home in antici- current wave of refinancings than they had in the pation of selling. early and mid-1990s, and thus homeowners had more Besides reducing their monthly debt service bur- equity to tap. In addition, consumer credit, particudens by lowering the interest rate on their loans, larly credit card debt, rose sharply in the period refinancing households can also lower the monthly between the latest two surveys, creating an incentive payment by lengthening the term to maturity on their to repay relatively expensive consumer debt with less debt. The survey found that most recent-refinancing costly mortgage debt. homeowners lengthened the maturity of their mort- Changes in maturity in 2001 and 2002 refinancings gage (table 5).4 After refinancing, about 74 per- differed somewhat between those who took cash out cent had mortgages with a longer maturity, mainly and those who did not, with the former group more because the refinancers chose thirty-year mortgages, likely to increase the term to maturity of their loans. Of homeowners who did not liquefy equity, 69 percent lengthened the maturity of their loans, and 3. Because the interest rates on adjustable-rate mortgages typically 20 percent shortened it. Among homeowners who start out lower than those on comparable term fixed-rate loans, liquefied equity, 80 percent lengthened the maturity adjustable-rate mortgages offer a particularly attractive option to those on their loans while 14 percent shortened it. refinancers who expect to sell their home in the near or medium term or who expect interest rates either to remain stable or to decline in the As a result of the changes in interest rates, future. loan maturities, and amounts owed, 52 percent of 4. A homeowner was considered to have lengthened the maturity if homeowners refinancing in 2001 and early 2002 had the term on the new mortgage exceeded the remaining term on the former mortgage. a lower monthly payment after obtaining the new Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Mortgage Refinancing in 2001 and Early 2002 473 6. Uses of funds liquefied in 2001 and 2002 refinancings 7. Home equity liquefied in refinancings, 2001 and 2002 Percent except as noted Memo: Share of Share of Average Use loan*.1 dollars dollars spent j Repayment of other debts 51 26 13,388 Home improvements 43 35 20,530 Consumer expenditures 2 25 16 17,589 Stock market or other financial investment 13 11 24,198 Real estate or business investment .. 7 10 34,900 Taxes 2 2 23,874 1. Percentages sum to more than 100 because multiple uses could be cited for 1. Amount borrowed through refinancing that exceeded amount due on a single loan. existing mortgage(s) plus closing costs. 2. Includes vehicle purchases, vacations, education or medical expenses, 2. Includes only refinancers who liquefied equity. living expenses, and other consumer purchases. loan, and 26 percent had a higher payment. In part The amounts borrowed through cash-out refinancbecause they took on additional debt, only 27 percent ing in some cases were sizable (table 7). Nearly of homeowners who liquefied equity had a lower 40 percent of homeowners who extracted equity in monthly payment, compared with 73 percent of 2001 and the first half of 2002 took out more than homeowners who did not liquefy equity. $25,000. The mean amount liquefied was about $26,700, and the median amount was $18,500. Both of these amounts are substantially larger than the Uses of Borrowed Funds corresponding figures from the 1999 survey; in that survey, the mean amount was $18,240, and the Equity liquefied in refinancings is used in various median amount was $10,000. ways, including funding home improvements or cur- Although some refinancers added significantly to rent consumption, paying down other debts, and their mortgage debt by liquefying equity, those refichanging the mix of a household's assets. For homenancers who borrowed extra funds ultimately owed, owners in the survey who refinanced in 2001 and the on average, somewhat less mortgage debt than those first half of 2002, the most common use of funds, who did not (table 8). Those refinancers who liquereported by 51 percent of those who took out cash, fied equity owed an average of nearly $126,000, and was to repay other debts (table 6). Paying for home those who did not owed roughly $133,500. Both improvements was cited by 43 percent of those who took out cash; and making consumer expenditures, such as vehicle purchases, vacations, education, and medical expenses, was cited by 25 percent. Stock market or other financial investment was cited by Cash-out, amount owed, and loan-to-value ratios 13 percent of the group; real estate or business investamong refinancers, 2001 and 2002 ment, by 7 percent; and tax payments, by 2 percent. Dollars except as noted These proportions are similar to those in the 1999 No equity survey, although the earlier survey found that the Item liquefied1 proportion funding consumer expenditures was some- I Home value what higher. Mean Median Looking at the uses of funds in terms of dollars rather than proportion of loans gives a somewhat Cash-out Mean different picture. Refinancers taking cash out spent Median 35 percent of liquefied equity on home improvements Amount owed and used 26 percent to pay off other debt. They used Mean 133,484 125,931 130,0172 Median • JHH9 110,000 105,000 105,000 16 percent of the funds for consumer expenditures, jjljjj|j||p Loan-to-value ratio 10 percent for real estate or business investments, Mean (percent) 60.4 62.9 61.6 Median (percent) .. 62.7 65.0 63.3 11 percent for stock market investments, and 2 percent for taxes. That home improvements are gener- 1. Equity is liquefied when a homeowner refinances mortgage debt and borrows more than is necessary to repay the balance on the existing mortgage(s) ally large expenditures may explain why they account plus closing costs on the new loan. for a greater share of activity when cash-out usage is 2. These figures differ slightly from the comparable amounts shown in some other tables because the estimates in this table are based on a slightly different measured by dollars rather than by number. sample of respondents. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

474 Federal Reserve Bulletin • December 2002 groups of refinancers appear similar when measured original mortgage rate, the more likely he or she was by remaining equity, as both groups had average final to refinance.7 loan-to-value ratios near 60 percent. A homeowner's income also plays a key role in the decision to refinance. In particular, homeowners with relatively low incomes were less likely to refinance, perhaps because closing costs are relatively more AN ECONOMETRIC ANALYSIS OF REFINANCING onerous for such households or because their credit AND CASH-OUT histories are more likely to be impaired, reducing their likelihood of qualifying for a new mortgage. The surveys sponsored by the Federal Reserve pro- The size of a homeowner's original mortgage also vide an opportunity to use econometric techniques to bears importantly on the propensity to refinance. As rank the relative importance of different factors that expected, homeowners with larger mortgages were have influenced refinancing and cash-out activity durmore likely to refinance because potential interest ing the refinancing waves of the past four years. The savings were larger. According to our analysis, the household's economic and demographic characteriseffect of mortgage size is not so strong as that associtics and its expectations about future interest rates ated with mortgage rates or borrower income, but it is and economic conditions might be important determinonetheless important. Further analysis reveals that nants of this activity.5 homeowners with mortgages under $50,000 were particularly less likely than others to refinance, perhaps because the transaction costs associated with The Decision to Refinance refinancing a relatively small loan outweighed the potential interest savings. As noted, deciding whether and when to refinance Board-sponsored surveys over the years have a home mortgage requires a balancing of costs and found that, even when interest rates are stable or are benefits. Using survey data, one can statistically rank rising, refinancings continue to occur, albeit at a the relative importance of various factors that may much slower pace, and that a large proportion of influence a homeowner's propensity to refinance, homeowners who refinance during these periods do including the household's income and mortgage sta- so to liquefy the accumulated equity in their homes. tus, demographic characteristics, and expectations for However, in a time of relatively low mortgage interthe future.6 To increase the precision of the estimated est rates (as during the periods covered by the most models, we pooled responses from the current sur- recent two surveys), a homeowner's desire to cashvey, which covered refinancings from the beginning out may have been only one of many motivations for of 2001 to the middle of June 2002, and an almost refinancing. We did not find the amount of available identical survey in the spring of 1999, covering refi- equity, holding constant the other factors (including nancings from the beginning of 1998 through May the mortgage size), to be an important determinant of 1999. refinancing, suggesting that the homeowner's loan-to- As described earlier, the primary reason that most value ratio did not influence refinancing. Other specihomeowners refinance is to reduce their monthly fications of our model, including different measures mortgage payment. Our statistical analysis confirms of the homeowner's loan-to-value ratio, also indithe importance of interest rates in the decision to cated that this ratio was not an important variable. refinance, showing that the higher a homeowner's However, a related variable—whether the homeowner perceived that the house value had increased in the past year—had a positive and significant influ- 5. Our statistical analysis of the household's decision to refinance ence on the propensity to refinance. is based on the literature developed since the 1980s that attempts to explain the prepayment of mortgages due to refinancing using house- Beyond a homeowner's current financial circumhold demographic and financial characteristics in these decisions. See stances, his or her expectations about future interest Wayne Archer, David Ling, and Gary McGill, "Demographic versus Option-Driven Mortgage Terminations," Journal of Housing Economics, vol. 6 (June 1997), pp. 137-63, and John Clapp, Gerson Goldberg, John Harding, and Michael LaCour-Little, "Movers and Shuckers: 7. A homeowner's decision to refinance is actually driven by the Interdependent Prepayment Decisions," Real Estate Economics (June difference between his or her interest rate on the original mortgage 2001), pp. 411-50. Both articles include reviews of earlier literature. and the prevailing mortgage rate. Unfortunately, for the homeowners 6. We use a logistic regression to describe a homeowner's pro- who did not refinance, we cannot observe the mortgage rate for which pensity to refinance and a "Tobit" regression to describe the amount they could have qualified. Thus, we rely only on the level of the of equity, if any, extracted by refinancers. Details can be found in interest rate on their original mortgage to approximate their potential appendix B. interest savings from refinancing. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Mortgage Refinancing in 2001 and Early 2002 475 rates and the state of the economy bear on the deci- retire.8 Other homeowners (for example, those havsion to refinance. In the monthly surveys, homeown- ing difficulty making mortgage or other payment ers were asked whether they believed interest rates obligations or those anticipating a reduction or diswould rise, stay the same, or fall. Those who believed ruption in income) may replace their current loan that rates would rise were more likely to refinance with a longer-term loan to reduce the size of their their mortgage. Similarly, respondents who believed monthly payments; however, our efforts to proxy that it was a good time to use credit or to make a for this effect indicated that this reason was not major purchase (for example, an automobile or a important. refrigerator) were more likely to refinance. These respondents might have seen refinancing as an opportunity to borrow additional funds to make such The Decision to Cash-Out purchases. When homeowners' income growth is high or Many homeowners desire to raise funds by liquetheir uncertainty about continued employment is fying some of the equity in their homes. In some low, homeowners may be less likely to refinance to refinancings, the homeowner both extracts equity and obtain cash to sustain their standard of living. The lowers the interest rate on his or her mortgage. Like 1999 survey was conducted during a robust economic the decision to refinance, the decision to take cash out period. And even though the 2002 survey was con- and the amount of cash to take out during refinancing ducted during a period of reduced economic growth, can be statistically modeled. We again use the results a homeowner's assessment of the likelihood of losing from the two surveys to construct such a model. his or her job proved not to be an important determi- Not surprisingly, a primary determinant of the likenant for refinancing. During this period, income lihood that a homeowner will extract equity is the growth had been bolstered by large tax cuts, and the amount of equity in the home. Homeowners with low recession was considered by many to be relatively loan-to-value ratios were more likely to extract equity mild; a stronger link might be observed during a during a refinancing. more severe downturn. Beyond having equity to liquefy, a few other fac- We also examined the influence of several other tors were important in determining the amount of factors that have been cited as significant in a home- cash to take out. Homeowners reporting that it is owner's decision to refinance. For example, older a good time to use credit were more likely to take homeowners are supposedly less likely to refinance cash out. White homeowners and homeowners with because they may have less time to recoup the trans- younger children were also more likely to take cash action costs. As another example, white homeown- out. Homeowners who believed that they had a higher ers or those with higher education are sometimes chance of losing their jobs were less likely to borrow asserted to be more aware of, or have more access to, additional money during the refinancing. However, refinancing opportunities, making them more likely other factors, such as age, education, and income, did to refinance. Finally, homeowners with adjustable- not prove to be important in indicating which homerate mortgages might be expected to switch to fixed- owners were more likely to extract equity during rate mortgages during times of relatively low refinancing. mortgage rates. However, we could not identify a statistically important effect for any of these factors. One demographic variable that does seem to be AGGREGATE ESTIMATES OF THE CHANGE IN related to refinancing is the presence of children MORTGAGE PAYMENTS AND THE USES OF under 18 years of age in the home. Homeowners with FUNDS younger children were more likely to refinance, perhaps because they needed to obtain cash to finance This section lays out a framework for using the home improvements or education expenses. responses from the 2002 survey to assess the possible Some other reasons often cited for refinancing effects on the macroeconomy of the recent wave of cannot be explored given the information in our survey. For example, homeowners sometimes refinance to change the period over which the mortgage 8. Of course, a homeowner can, in most cases, repay a long-term is to be repaid. Some homeowners replace their cur- mortgage over a period shorter than the stated term by making larger payments than are required. In such a case, however, the homeowner rent mortgage with a shorter-term loan, perhaps would not benefit from the lower interest rates typically available on intending to have their loan paid off by the time they shorter-term loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

476 Federal Reserve Bulletin • December 2002 home mortgage refinancings. We consider separately mortgage balance, along with an additional 2 percent the two ways in which a mortgage refinancing may of the balance to proxy for closing costs (an amount affect a household's resources: first, by changing the commonly cited by industry analysts), the average stream of future mortgage payments and, second, outstanding balance after refinancing was $132,443.9 by providing immediate cash if the household has The combined effect of the lower interest rate, the chosen to liquefy some of its home equity. We also longer remaining maturity, and the higher balance extrapolate from the survey responses on the uses of is to lower the average refinancing homeowner's liquefied equity to gauge how much aggregate spend- mortgage payments by $35 per month, or $418 per ing has been funded through this channel. However, year, and aggregate annual mortgage payments by the appropriate interpretations of such calculations $4.7 billion. are complicated by a variety of factors, as we discuss Incorporating the associated change in income below. taxes reduces the savings achieved through refinanc- The survey results provide information about the ing. The estimated $4.7 billion reduction in aggregate key determinants of mortgage payments, both before mortgage payments represents the combination of a and after refinancing. Before refinancing, the out- $6.7 billion decline in mortgage interest payments standing balance on the average home mortgage that and a $2 billion rise in mortgage principal payments. was refinanced between the beginning of 2001 and The decline in mortgage interest payments implies the middle of 2002 was $118,092. In addition, the that refinancers who itemize deductible expenses for average original contract interest rate of mortgages in calculation of taxable income were eligible for apprethis group, weighted by dollars of outstanding bal- ciably smaller deductions for interest payments and ance, was 8.1 percent, and the dollar-weighted aver- therefore had higher tax liabilities. Although the Surage remaining maturity was twenty-two years. vey of Consumers does not have enough information Refinancing lowered the interest rate of these mort- about the tax status of its respondents to allow for a gages to a dollar-weighted average of 6.8 percent. If precise estimate of the increment to tax liabilities the maturity and outstanding balance of the average associated with refinancing, we can do a rough calrefinanced mortgage had not changed, the decline culation using data from other sources. In 1999, the in the interest rate would have lowered the monthly ratio of home mortgage interest deducted by taxmortgage payment for the average refinancing home- payers ($272 billion) to total mortgage interest paid owner by $98, for an annual savings of $1,179. by homeowners ($328 billion) was 0.83.10 This ratio Multiplying this annual savings by 11.145 million suggests that the $6.7 billion decline in mortgage (the weighted 10.4 percent of the sample that refi- interest payments was associated with a $5.6 billion nanced over the period multiplied by an estimated reduction in home mortgage holders' annual deduc- 107 million households in the United States) yields tions.11 In addition, federal income tax payments in an aggregate annual decline in mortgage payments of 1999 were an estimated $56.9 billion lower than they $13.1 billion. The maturity of the average refinanced mortgage (again weighted by dollars of outstanding balance) was twenty-nine months longer than that of the 9. This number is slightly different from the number shown in average original mortgage. All else being equal, this table 1 because for these estimates the survey respondent had to have lengthening of the maturity also served to lower provided complete information about his or her mortgage amounts and mortgage rates before and after refinancing. mortgage payments. Allowing for both the longer Some of the refinancers who did not liquefy equity may have paid maturity and the decline in the mortgage interest down a portion of their mortgages as part of refinancing. Because our rate, the implied average reduction in the mortgage survey results provide no information about such behavior, we assume it does not occur. As a result, our calculation may overstate the payment was $135 monthly, or $1,621 annually. This increase in the average outstanding balance. figure suggests an aggregate annual decline in mort- 10. The figure for home mortgage interest claimed as a deduction gage payments due to both factors of $18.1 billion. is from David Campbell and Michael Parisi, "Individual Income Tax Returns, 1999," Statistics of Income Bulletin (Fall 2001), pp. 9-47. Offsetting the effects of lower interest rates and The estimate of total mortgage interest paid was computed by longer maturities on the mortgage payments of refi- multiplying the household sector's average mortgage stock of nancers, outstanding balances rose by a substantial $4,388 billion from the U.S. flow of funds accounts by the Bureau of Economic Analysis's average effective interest rate on the stock of amount. The average homeowner who refinanced in mortgage debt of 7.47 percent. 2001 and 2002 (including both those who cashed 11. This figure may slightly overstate the reduction in deductions out and those who did not) reported that the cash because points paid as part of the refinancing transaction can be received at settlement, after closing costs were paid, deducted (after amortizing them over the lifetime of the loan). The survey results do not include information about points, and our was $11,754. Adding this amount to the original calculation makes no allowance for them. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Mortgage Refinancing in 2001 and Early 2002 12 would have been in the absence of the deduction improvements; most of these expenditures probably for home mortgage interest payments.12 Dividing this fall in the residential investment category of the amount by mortgage interest deducted implies that national income accounts, but the expenditures may the average marginal federal income tax rate of also include items such as carpeting, draperies, or taxpayers deducting such interest was 21 percent in kitchen appliances that would be counted as part of 1999.13 Assuming that this marginal federal income PCE. Refinancers also used an estimated $28.1 biltax rate applied to homeowners who refinanced their lion to pay down nonmortgage debt and $5.8 billion mortgages in 2001 and the first half of 2002 and to pay off second mortgages. Of the remaining liquefurther assuming that their marginal state income fied equity, most (an estimated $27.5 billion) was tax rate was 5 percent, the increase in tax payments invested in financial assets, real estate, or businesses. associated with the refinancings would be $1.5 bil- Estimates of the change in households' mortgage lion annually. Taking the difference between the payments or of the amount of housing equity liqueaggregate annual reduction in mortgage payments fied, however, are only part of the information necesassociated with the refinancings and this figure sary to assess the effects of refinancing activity on the implies that the additional tax liabilities would offset macroeconomy. Another consideration is the effect of close to one-third of refinancers' aggregate annual refinancing on mortgage investors.15 The reduction in savings from lower mortgage interest payments, put- mortgage interest payments leads to a decline in the ting aggregate annual savings net of income taxes at amount of interest income received by these inves- $3.2 billion. tors. As a result, the propensity to consume of the Turning to the immediate increase in the cash typical refinancing household must be higher than resources of the refinancers who liquefied home that of the typical mortgage investor for lower mortequity in 2001 and the first half of 2002, the average gage payments to have a positive effect on aggregate amount of equity withdrawn by these households was spending. $26,723 (table 7). Multiplying this figure by 4.92 mil- Even if one considers only the refinancers, the lion (the weighted 4.6 percent of the sample that amount of incremental spending—that is, the amount refinanced and liquefied equity over the period above that which would have occurred in the absence multiplied by an estimated 107 million households of the refinancing—is unclear. A simple model of in the United States) yields an aggregate estimate consumer behavior assumes that households are of funds raised through cash-out refinancings of rational, can borrow all they want, and know their $131.6 billion. wealth and future income with certainty. Given these As described earlier, these funds were reportedly assumptions, refinancings generate new consumpused in different ways, and we can use the ratios tion because a reduction in the mortgage interest reported in the second column of table 6 to estimate rate increases household wealth.16 In particular, the the aggregate counterparts of these uses.14 For the increase in wealth associated with lower mortgage nation as a whole, the survey results suggest that payments would be the present discounted value of $20.7 billion of the liquefied equity was used to the reduction in payments over the lifetime of the fund purchases that are classified in the national mortgage loan, holding the maturity and the outstandaccounts as personal consumption expenditures ing balance constant and assuming the household (PCE), such as spending on vehicles, other consumer discounts cash flows at a rate not perfectly correlated goods, vacations, education, and medical services. with its current mortgage rate. In addition, the ability An estimated $46.3 billion was spent on home to liquefy home equity through mortgage refinancing 12. See Analytical Perspectives, Budget of the United States Gov- 15. Investors in mortgages include both individuals and institutions ernment, Fiscal Year 2001, p. 109. such as pension funds and life insurance companies. Although institu- 13. Federal income tax rates have fallen a bit since 1999, but we tions do not consume directly, most of the income associated with the cannot do these calculations for a later year because information about mortgages they hold ultimately passes through to the household sector the amount of home mortgage interest deducted is available only through dividends and through increases in the value of the firms. The through 1999. However, we obtain a similar estimate for the average only portion of the savings of mortgage borrowers that does not have a marginal federal income tax rate of mortgage holders if we divide the negative effect on the wealth of U.S. mortgage investors is the small estimated cost of the deduction for 2001 (from the most recent Budget amount associated with mortgage debt that is held by foreigners either of the United States Government) by the product of the average directly or indirectly through institutions. mortgage interest paid for 2001 and the ratio of deductions to total 16. The term "consumption" is used broadly in this discussion. mortgage interest paid in 1999. The arguments are meant to explain not only households' behavior 14. As noted above, the number of respondents for each reported regarding the items included in the consumer expenditures category in use of funds is quite small. As a result, the estimates in this paragraph table 6 but also their behavior associated with the home improvements are not precise. category. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

478 Federal Reserve Bulletin • December 2002 provides households with the opportunity to fund tive news about their future income prospects may desired consumption by borrowing at the mortgage increase their consumption today and, further, may rate, which is typically lower (especially on an after- fund that spending by extracting accumulated home tax basis) than the rates on other types of loans. In equity; in this case, mortgage refinancing is not the this case, the gain in household wealth would be the cause but only the means of higher spending. difference between the cost of funding consumption Despite these uncertainties, we attempt to put an by liquefying equity and the cost of an alternative upper bound on the direct effect of refinancings on source of funds. aggregate demand. We first note that the average Other assumptions are consistent with the view respondent in our sample was surveyed at the end of that refinancing spurs greater amounts of additional March 2002 and was asked for details about refinancconsumption among mortgage borrowers. For exam- ing activity over the preceding fifteen months (that is, ple, homeowners may be rational and unconstrained since January 2001).17 We also assume that this averbut uncertain about the value of their homes because age refinancer experienced lower mortgage payments of the costs associated with acquiring such informa- for half of these fifteen months; given annual aggretion. The appraisal that accompanies a refinancing gate mortgage payment savings (net of taxes) of may raise a homeowner's own estimate of the home's $3.2 billion, the average savings between January value, which, in turn, raises his or her perceived 2001 and March 2002 would be $2 billion. We also wealth. The amount of home equity liquefied may assume that refinancing households used all these reflect this apparent windfall so that the new spend- savings to pay for items classified as PCE in the ing funded by the equity could be substantial. national income accounts and that mortgage investors Yet another possibility is that households may be have no response to the reduction in interest they aware of increases in their home value but face receive. Finally, we assume that this spending plus self-control problems. Because capital gains on hous- the $20.7 billion of PCE funded by liquefied equity ing before a refinancing are relatively illiquid, house- that we discussed earlier represents incremental holds are unlikely to consume them. However, when spending. the opportunity to refinance arises (because, for Under these extreme assumptions, the recent wave example, mortgage rates have declined), households of mortgage refinancing added $22.7 billion to PCE can convert their gains to a liquid form. Again, in between January 2001 and March 2002. On an annual this case, a large portion of liquefied equity may go basis, the increment would be $18.1 billion. This toward new consumption by refinancers. amount represents V4 percent of average annual PCE Finally, the current consumption of some house- ($7,024 billion) over the period.18 Positing that half holds may fall materially short of their desired con- the liquefied equity that reportedly funded home sumption given their expectations of future income improvements was spent instead on items included in growth. Such a gap could arise if these households PCE would raise the estimated maximum increment anticipate significantly higher income than they are to PCE to Vi percent. currently receiving, if they have no liquid financial Our estimate of an upper bound for the percentassets, and if they cannot obtain unsecured debt. age contribution of refinancing activity to residen- After a period of rapid appreciation of house prices, tial investment is larger than that for PCE, mainly cash-out refinancing transactions may allow these because residential investment spending is small relaformerly liquidity-constrained households to gain tive to PCE. The estimated $46.3 billion of liqueaccess to their accumulated capital gains and thereby fied equity that refinancers reported using to fund permit them to significantly increase their spending. home improvements over the fifteen-month reference Distinguishing among these alternative possibili- period corresponds to an annual figure of $37 billion. ties regarding the effect of refinancing on spending Comparing this amount with the $448 billion average is difficult. A large body of economic literature sug- annual level of residential investment over the period, gests that, though some consumers are rational, fully an upper bound for the contribution of refinancing aware of their available resources, and not liquidity constrained, other consumers are different. Observing a high correlation between refinancing transactions 17. The use of the end-of-March date will yield inaccuracies in our and spending does not resolve the issue, because estimates to the extent that refinancing activity was not distributed evenly over the six months in which households were sampled. heightened refinancing activity may simply reflect However, we believe that any such error would be small, and thus our the means by which households are choosing to calculations ignore it. finance spending that is induced by changes in other 18. Calculating the contribution of refinancing activity to the growth rate of PCE is not possible because we do not know how much factors. For example, homeowners who receive posirefinancing added to the level of PCE in earlier periods. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Mortgage Refinancing in 2001 and Early 2002 479 activity to the level of residential investment is APPENDIX A: THE SURVEY OF CONSUMERS 8.3 percent. The survey results also provide evidence about the To obtain information on the prevalence in the United influence of refinancing activity on some key aggre- States of residential mortgage refinancings by homegate financial statistics. For example, the $132 billion owners, the extent to which refinancings are used of home equity liquefied in 2001 and early 2002, net to liquefy accumulated equity, and the uses of the of the $5.8 billion estimated to have been used to pay liquefied funds, the Federal Reserve Board sponsored down second mortgages, can account for 20 percent questions that were included in the Surveys of Conof the $616 billion growth in the home mortgage sumers for January 2002 through June 2002. The stock between the beginning of 2001 and March Survey Research Center at the University of Michi- 2002. Further, the actual increase in consumer (non- gan conducted the nationwide surveys. mortgage) credit between the beginning of 2001 and Interviews were conducted by telephone, with March 2002 was $131 billion, corresponding to an telephone numbers drawn from a cluster sample of annual rate of increase of 6.6 percent. If households residential numbers. The sample was chosen to be had not used an estimated $28.1 billion of liquefied broadly representative of the four main regions of equity to pay down nonmortgage debt over the the country—Northeast, North Central, South, and period, consumer credit would have expanded at an West—in proportion to their populations. Alaska and average annual rate of 8 percent. Hawaii were not included. For each telephone number drawn, an adult in the family was randomly selected as the respondent. The survey defines a SUMMARY family as any group of persons living together who Over the past ten years, millions of homeowners have are related by marriage, blood, or adoption or any taken advantage of lower mortgage interest rates and individual living alone or with a person or persons to higher home values and have refinanced their mort- whom the individual is not related. gage loans. For many, the decision to refinance was Together, the six surveys sampled 3,003 families, motivated by a desire to reduce their monthly mort- 2,240 of whom were homeowners. Among the homegage payments, either by obtaining a lower interest owners, 1,378 had an outstanding mortgage or land rate or by extending the maturity of their mortgage. contract, and 691 of this group reported that their According to the University of Michigan's Surveys outstanding first mortgage was a refinanced loan. of Consumers, most homeowners who refinanced Among the homeowners who had refinanced, 305 their mortgages in 2001 and early 2002 did lower had refinanced in 2001 or the first half of 2002. The their mortgage rates, and a significant proportion also survey data have been weighted to be representative borrowed additional funds by taking out a new mort- of the population as a whole, thereby correcting for gage that was larger than the outstanding balance differences among families in the probability of their on their former mortgage plus closing costs. A large being selected as survey respondents. All survey data proportion of homeowners who cashed out equity in the tables are based on weighted observations. from their homes used these funds for home improve- Estimates of population characteristics derived ment or the repayment of other debts. This boom in from samples are subject to error, with the amount cash-out refinancing activity has likely boosted con- of the error dependent on the extent to which the sumption spending materially over the period cov- sample respondents differ from the general popered by the survey, though the magnitude of the effect ulation. Table A.l indicates the sampling errors for of such transactions on consumption spending is survey results derived from samples of different difficult to estimate. sizes. A. 1. Approximate sampling errors for survey results, by size of sample Percentage points Size of sample SSuurrvveeyy rreessuulltt ((ppeerrcceenntt)) 100 300 1,000 1,500 3,000 50 11.2 6.5 3.5 2.9 2.0 30 or 70 10.3 5.9 3.2 2.6 1.9 20 or 80 9.0 5.2 2.8 2.3 1.6 10 or 90 6.7 3.9 2.1 1.7 1.2 5 or 95 4.9 2.8 1.5 1.3 .9 NOTE. 95 percent confidence level, 1.96 standard errors. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

480 Federal Reserve Bulletin • December 2002 APPENDIX B: STATISTICAL ANALYSIS OF to extract home equity during refinancing. Table B.l REFINANCING AND CASH-OUT describes the logistic regression used to estimate a homeowner's probability of refinancing. Table B.2 This appendix presents the results of our estimated describes the Tobit regression used to estimate refinancing and cash-out regressions, used in the text the expected amount of cash extracted during for the discussion of the propensity to refinance and refinancing. • B. 1. Logistic regression used to estimate homeowner's probability of refinancing Variable1 Change in variable Marginal effect2 Statistically (percent) significant Original mortgage rate Increase the original mortgage rate by 2.9 percentage points 23.3 yes (one standard deviation) Original mortgage amount less than $50,000 ... From a mortgage greater than to a mortgage less than $50,000 -10.8 yes Respondent from the Midwest From not being to being from the Midwest : t 4.1 yes Surveyed in 1999 From surveyed in 2002 to surveyed in 1999 -3.8 yes Original mortgage amount Increase original mortgage amount by $92,148 (one standard 3.5 yes deviation) Interest rate expectations From expecting rates to go down or stay the same to expecting 3.1 yes them to rise Children under 18 in the home From not having to having at least one child under 18 living at 2.3 yyeess home House value change over the last year From believing that the value of the house stayed the same or 1.9 yes mgm '' ' went down in the last year to believing that it went up Income greater than $40,000 From income less than to income greater than $40,000 per year 1.4 yes GGoooodd ttiimmee ttoo bbuuyy dduurraabblleess From believing it is a bad or neutral time to buy durables 1.1 yes to believing it is a good time Respondent not white From white to nonwhite • , -4.0 no HI Respondent from the West From not being to being from the West 2.8 no I Age greater than 55 ; From age less than to age greater than 55 2.0 no Original mortgage had variable rate From not having to having a variable rate on the original mortgage 2.0 no Loan-to-value ratio greater than 90 percent From having ratio less than to having ratio greater than 90 percent .7 no From not having to having education beyond high school -.4 no Respondent from the Northeast From not being to being from the Northeast -.4 no Increase equity by $156,400 (one standard deviation) -.3 no Probability of losing job in next year Increase probability of losing job in the next year by 25 percent -.1 no (one standard deviation) 1. Variables are first grouped by whether they are statistically significant and probability of refinancing between white and nonwhite respondents, we treat all then ranked by the estimated size of the marginal effect. whites in the sample as if they were nonwhite, holding ali other characteristics 2. The marginal effect is the difference between the average estimated constant, and then calculate the average estimated probability of refinancing for probability of refinancing for all respondents in the sample if a given variable is all respondents given this change. We subtract the sample average without the changed and the average estimated probability of refinancing for all respondents change from this calculated probability of refinancing to get the result shown in in the sample without the change. For example, to calculate the difference in the the column. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Mortgage Refinancing in 2001 and Early 2002 481 B.2. Tobit regression used to estimate expected cash extracted during refinancing Variable1 Marginal effect2 Statistically (doltes) significant — t not white From white to -5,537 yes 1999 rromsurveycu 1999 -4,426 yes Children under 18 in the home From not having to having at least one child under 18 living 4,143 yes at home Hi Good time to use credit time to use credit 2,272 yes is a good time Original loan-to-value ratio Increase ratio of original mortgage by 22 percent (one standard -265 yes ftevfatiott). ; - Probability ity of losing job in the next year by 24 percent yes iation) - - -2,003 !S will be worse or the same in a year no be better From not having to having education beyond high 1 883 Income greater than $40 000 From income less than to income greater than .47 Respondent from the West From not being to being from the West -1,557 House value change over the last year From believing that the value of the house stayed the same or -671 went down in the last year to believing that it went up 1. Variables are first grouped by whether they are statistically significant and 2. The change in the expected amount of home equity extracted during then ranked by the estimated size of the marginal effect. refinancing assuming home equity is extracted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

482 Announcements FOMC DIRECTIVE Also on Thursday, November 7, the Federal Reserve Board approved actions by the boards of The Federal Open Market Committee decided on directors of the Federal Reserve Banks of Boston, November 6, 2002, to lower its target for the fed- Philadelphia, Cleveland, Richmond, Atlanta, Chieral funds rate by 50 basis points to VA percent. cago, Minneapolis, and Kansas City, decreasing the In a related action, the Board of Governors approved discount rate at the banks from 1 lA percent to 3A pera 50 basis point reduction in the discount rate to cent, effective immediately. 3A percent. The Committee continues to believe that an accommodative stance of monetary policy, coupled with still-robust underlying growth in productivity, is pro- AMENDMENT TO REGULATION A viding important ongoing support to economic activity. However, incoming economic data have tended to The Board of Governors on October 31, 2002, confirm that greater uncertainty, in part attributable approved a final rule that revises the Federal to heightened geopolitical risks, is currently inhibit- Reserve's discount window programs, which provide ing spending, production, and employment. Inflation credit to help depository institutions meet temporary and inflation expectations remain well contained. liquidity needs. In these circumstances, the Committee believes The rule amends the Board's Regulation A (Extenthat today's additional monetary easing should prove sions of Credit by Federal Reserve Banks), effective helpful as the economy works its way through this January 9, 2003. It is substantially similar to a procurrent soft spot. With this action, the Committee posal that the Board published for a ninety-day public believes that, against the background of its long-run comment period on May 24, 2002. goals of price stability and sustainable economic The rule does not entail a change in the stance of growth and of the information currently available, the monetary policy. The Federal Open Market Commitrisks are balanced with respect to the prospects for tee's target for the federal funds rate will not change both goals in the foreseeable future. as a result of the adoption of these programs, and the Voting for the FOMC monetary policy action were level of market interest rates more generally will be Alan Greenspan, Chairman; William J. McDonough, unaffected. Vice Chairman; Ben S. Bernanke; Susan S. Bies; The rule replaces adjustment credit, which cur- Roger W. Ferguson, Jr.; Edward M. Gramlich; rently is extended at a below-market rate, with a new Jerry L. Jordan; Donald L. Kohn; Robert D. McTeer, type of discount window credit called primary credit Jr.; Mark W. Olson; Anthony M. Santomero; and that will be broadly similar to credit programs offered Gary H. Stern. by many other major central banks. Primary credit In taking the discount rate action, the Federal will be available for very short terms as a backup Reserve Board approved the requests submitted by source of liquidity to depository institutions that the boards of directors of the Federal Reserve Banks are in generally sound financial condition in the judgof Dallas and New York. ment of the lending Federal Reserve Bank. The Board Subsequently, the Federal Reserve Board approved expects that most depository institutions will qualify action by the board of directors of the Federal for primary credit. Reserve Bank of San Francisco, decreasing the dis- Reserve Banks will extend primary credit at a rate count rate at the bank from 1 lA percent to 3A percent, above the federal funds rate, which should eliminate effective immediately. the incentive for institutions to borrow for the pur- The Board also approved action by the board of pose of exploiting the positive spread of money mardirectors of the Federal Reserve Bank of St. Louis, ket rates over the discount rate. The Board anticipates decreasing the discount rate at that bank from that the primary credit rate will be set initially at 1 ]A percent to 3A percent, effective Thursday, Novem- 100 basis points above the FOMC's target federal ber 7, 2002. funds rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

483 Reserve Banks will establish the primary credit The Board also approved a final rule that rescinds rate at least every two weeks, subject to review and the Board's existing interpretations of sections 23A determination of the Board of Governors, through the and 23B in part 250 of title 12 of the Code of Federal same procedure currently used to set the adjustment Regulations (which have been incorporated into credit rate. The final rule includes a provision that Regulation W) as of April 1, 2003. could facilitate a reduction in the primary credit rate In addition, the Board decided to seek public comin a financial emergency. ment on a proposed rule that would prevent a bank By employing an above-market rate and restricting from using an exemption in Regulation W for the eligibility to generally sound institutions, the primary purchase of extensions of credit from an affiliate if credit program should considerably reduce the need purchases made under the exemption exceeded for the Federal Reserve to review the funding situa- 100 percent of the bank's capital. tions of borrowers and monitor the use of borrowed Comment on the proposed rule is requested within funds. This reduced administration in turn should thirty days of publication in the Federal Register, make the discount window a more attractive funding which is expected shortly. source for depository institutions when money markets tighten. The Board's final rule also establishes a secondary APPROVAL OF FEE SCHEDULES credit program that will be available in appropriate FOR PAYMENT SERVICES circumstances to depository institutions that do not qualify for primary credit. The Board anticipates that The Federal Reserve Board on October 31, 2002, Reserve Banks will initially establish a secondary approved fee schedules for Federal Reserve Bank credit rate at a level 50 basis points above the pri- payment services, effective January 2, 2003. mary credit rate. Overall, the price level for Federal Reserve priced The Board made no substantive changes to the sea- services will increase less than 1 percent in 2003 sonal credit program. from 2002 levels. Because of fee reductions in elec- The Board also approved a related technical tronic services in recent years, the overall price level amendment to the reserve deficiency penalty pro- has declined about 2 percent since 1996. vision of Regulation D (Reserve Requirements of In 2003, the Reserve Banks will reduce fees for Depository Institutions). their Fedwire funds transfer, Fedwire securities, and FedACH automated clearinghouse (ACH) services. These reductions will result in a 5 percent decline in overall fees for the Reserve Banks' electronic pay- ISSUANCE OF FINAL REGULATION W ment services. The lower fees reflect continued efficiencies gained from consolidating the Federal The Federal Reserve Board on October 31, 2002, Reserve's electronic payment operations. Since 1996, decided to issue a final Regulation W (Transactions prices for all electronic payment services have between Banks and Their Affiliates) that comprehen- declined approximately 47 percent. sively implements sections 23A and 23B of the Fed- Check service fees will increase, on average, eral Reserve Act. approximately 3 percent compared with current fees. These statutory provisions and Regulation W The check service continues to invest in automarestrict loans by a bank to its affiliates, asset pur- tion and electronic check technologies, which will chases by a bank from its affiliates, and other transac- improve operating efficiencies at the Reserve Banks tions between a bank and its affiliates. The purpose of and result in long-run cost savings. the statute and the rule is to limit a bank's risk of loss The 2003 fee schedule for each of the priced in transactions with affiliates and to limit a bank's services except the check service is included in ability to transfer to its affiliates the benefits arising a Federal Register notice. Fee schedules for all from its access to the federal safety net. priced services will be available on the Federal Regulation W unifies in one public document the Reserve Banks' Financial Services web site at various interpretations of sections 23A and 23B that www.frbservices.org by November 5, 2002. the Board and its staff have issued over the years The Board also approved the 2003 private-sector as well as several new interpretations of the statute. adjustment factor (PSAF) for Reserve Bank priced The Board expects to publish the rule in the Federal services of $171.7 million. The PSAF is an allowance Register shortly, with an effective date of April 1, for taxes and other imputed expenses that would have 2003. to be paid and return on capital that would have to be Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

484 Federal Reserve Bulletin • December 2002 earned if the Federal Reserve's priced services were sessions provided specific information from experts provided by a private business. The Monetary Con- on how to lay the groundwork for making capital and trol Act of 1980 requires the Federal Reserve to credit available in Indian Country, build relationships recover the costs of providing priced payment ser- with key partners, leverage financial opportunities, vices, including the PSAF, over the long run, to and use financial resources for community economic promote competition between the Reserve Banks and development initiatives. private-sector service providers. The conference was held at the Doubletree Para- During the period from 1992 to 2001, the Reserve dise Valley Resort in Scottsdale, Arizona. For more Banks recovered 99.8 percent of priced services information call 866-226-7167 (toll free) or see costs, including operating costs, imputed costs, and the conference web site at www.federalreserve.gov/ targeted return on equity (ROE, or net income). The community affairs/national. Reserve Banks estimate that they will recover 92.2 percent of all their priced services costs in 2002 and project that they will recover 94.4 percent of ENFORCEMENT ACTIONS these costs in 2003. The Reserve Banks project revenues of $933.7 million and costs of $883.9 million, The Federal Reserve Board on October 17, 2002, for a net income of $49.8 million, compared with a announced the execution of a Written Agreement targeted ROE of $104.7 million. by and among O.A.K. Financial Corporation, Byron Center, Michigan; the Byron Center State Bank, Byron Center, Michigan; the Federal Reserve Bank CONFERENCE ON "BANKING OPPORTUNITIES of Chicago; and the State of Michigan Office of IN INDIAN COUNTRY" Financial and Insurance Services. The Federal Reserve Board, along with the Federal The Federal Reserve Board on October 23, 2002, Reserve Banks of Chicago, Minneapolis, Kansas announced the issuance of an Amendment to a Cease City, and San Francisco, sponsored a conference to and Desist Order against the United Central Bank, explore ways to encourage banking opportunities in Garland, Texas. tribal communities. "Banking Opportunities in Indian Country" was held November 18-20 in Scottsdale, Arizona. The conference focused on methods and CHANGES IN BOARD STAFF resources for encouraging initiatives and partnerships that increase access to credit and capital and The Board of Governors has approved the appointstrengthen local economies. ments of Billy Sauls as Assistant Director and Chief Featured speakers included Federal Reserve Board of Security and Donald Spicer as Assistant Director. Governor Mark Olson; Rebecca Adamson (Eastern Mr. Sauls will have oversight responsibility for the Cherokee), founder of the First Nations Development security program for the Board's premises and per- Institute; Robert Cheadle (Chickasaw), legislative sonnel. He came to the Management Division in counsel for the Chickasaw Nation; J.D. Colbert (Mus- January 2002 as Chief of Security. Before coming to cogee), president of the Native American Bankers the Board, he spent four years as Assistant Inspector Association; Stephen Cornell, director of the Udall General for the U.S. Postal Service and twenty-two Center for Studies in Public Policy at the University years with the U.S. Secret Service. Mr. Sauls holds of Arizona; Mary S. Gabler, vice president and com- a bachelor of arts degree from Atlantic Christian munity development manager for Wells Fargo; and College. Lance Morgan (Winnebago), founder of Ho-Chunk, Mr. Spicer will have oversight responsibility for Inc. of the Winnebago Tribe of Nebraska. Space Planning, Engineering and Facilities, and The conference was designed for bankers, tribal General Services, including the mail, postal, supply, leaders, tribal economic and housing development motor transport, and cafeteria operations. Mr. Spicer specialists, attorneys, and resource staff for com- came to the Board in 1987. He holds a bachelor of munity development. General sessions each day arts degree from the University of Virginia and an addressed issues and opportunities for financial ser- M.B.A. from the University of Maryland. • vice providers, tribes, and tribal members. Breakout Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

485 Legal Developments FINAL RULE—AMENDMENT TO REGULATION D Part 204—Reserve Requirements of Depository Institutions (Regulation D) The Board of Governors is amending 12 C.F.R. Part 204, its Regulation D (Reserve Requirements of Depository The authority citation for Part 204 continues to read as Institutions), to reflect the annual indexing of the low follows: reserve tranche and the reserve requirement exemption for 2003, and announces the annual indexing of the deposit \. Authority: 12 U.S.C. 248(a), 248(c), 371a, 461, 601, 611, reporting cutoff level that will be effective beginning in and 3105. September 2003. The amendments increase the amount of transaction accounts subject to a reserve requirements ratio 2. Section 204.9 is revised to read as follows: of three percent in 2003, as required by section 19(b)(2)(C) of the Federal Reserve Act, from $41.3 million to Section 204.9—Reserve requirement ratios. $42.1 million of net transaction accounts. This adjustment is known as the low reserve tranche adjustment. The Board The following reserve ratios are prescribed for all deposiis increasing from $5.7 million to $6.0 million the amount tory institutions, Edge and Agreement corporations, and of reservable liabilities of each depository institution that is United States branches and agencies of foreign banks: subject to a reserve requirements of zero percent in 2003. This action is required by section 19(b)(ll)(B) of the Federal Reserve Act, and the adjustment is known as the reservable liabilities exemption adjustment. The Board is Category Reserve requirement also increasing the deposit cutoff level that is used in Net transaction accounts: conjunction with the reservable liabilities exemption to $0 to $6.0 million 0 percent of amount. determine the frequency of deposit reporting from Over $6.0 million and up to 3 percent of amount. $42.1 million $106.9 million to $112.3 million for nonexempt depository Over $42.1 million $1,083,000 plus 10 percent of institutions. (Nonexempt institutions are those with total amount over $42.1 million. reservable liabilities exceeding the amount exempted from Nonpersonal time deposits 0 percent. reserve requirements.) Thus, beginning in September 2003, Eurocurrency liabilities 0 percent. nonexempt institutions with total deposits of $112.3 million or more will be required to report weekly while nonexempt institutions with total deposits less than ORDERS ISSUED UNDER BANK HOLDING COMPANY $112.3 million may report quarterly, in both cases on form ACT FR 2900. Exempt institutions with at least $6.0 million in total deposits may report annually on form FR 2910a. Orders Issued Under Section 4 of the Bank Holding For depository institutions that report weekly, the low Company Act reserve tranche adjustment and the reservable liabilities exemption adjustment will apply to the 14-day reserve Citigroup Inc. computation period that begins Tuesday, November 26, New York, New York 2002, and the corresponding 14-day reserve maintenance period that begins Thursday, December 25, 2002. For Order Approving the Acquisition of Savings Associations institutions that report quarterly, the low reserve tranche adjustment and the reservable liabilities exemption adjust- Citigroup Inc. ("Citigroup"), a financial holding company ment will apply to the 7-day reserve computation period within the meaning of the Bank Holding Company Act ("BHC that begins Tuesday, December 17, 2002, and the corre- Act"), has requested the Board's approval under sections 4(c)(8) sponding 7-day reserve maintenance period that begins and 4(j) of the BHC Act (12 U.S.C. §§ 1843(c)(8) and 0')) Thursday, January 16, 2003. For all depository institutions, and section 225.24 of the Board's Regulation Y (12 C.F.R. the deposit cutoff level will be used to screen institutions in 225.24) to acquire all the voting shares of California Fed- July of 2003 to determine the reporting frequency for the eral Bank ("Cal Fed"), San Francisco, California, a feder- 12-month period that begins in September 2003. ally chartered savings association. Citigroup proposes to Effective November 7, 2002, 12 C.F.R. Part 204 is acquire Cal Fed by acquiring all the voting shares of amended as follows: Golden State Bancorp Inc. ("Golden State"), which con- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

486 Federal Reserve Bulletin • December 2002 trols Cal Fed,1 and to indirectly acquire Citibank (West), mately $1.1 trillion and total insured deposits of approxi- FSB (information) ("Citibank (West)"), both in San Fran- mately $166.2 billion, representing approximately 3.2 percisco, California. cent of total U.S. deposits. Citigroup would become the The proposed transaction is primarily a merger of Cal third largest commercial banking organization in Califor- Fed and part of the branch network of Citigroup's existing nia, controlling deposits of $28.3 billion, representing apsubsidiary depository institutions in California and Nevada proximately 5.8 percent of state deposits. Citigroup would into Citigroup's newly formed subsidiary savings associa- become the third largest commercial banking organization tion, Citibank (West). With Citibank (West) as a newly in Nevada, controlling deposits of $2.4 billion, representformed subsidiary savings association and surviving entity ing approximately 11.4 percent of state deposits. of the merger transaction, the transaction is subject to The Board previously has determined by regulation that review by the Office of Thrift Supervision ("OTS") under the operation of a savings association by a bank holding the Home Owners' Loan Act (12 U.S.C. § 1461 et seq.) company is closely related to banking for purposes of and the Bank Merger Act (12 U.S.C. § 1828(c)). The Board section 4(c)(8) of the BHC Act.5 The Board requires that has consulted with the OTS regarding its review of Citi- savings associations acquired by bank holding companies group's proposal under these acts.2 conform their direct and indirect activities to those permis- Citigroup, with total consolidated assets of approxi- sible for bank holding companies under section 4 of the mately $1.1 trillion and total insured domestic deposits of BHC Act. Citigroup has committed to conform all the $143.3 billion, is the largest commercial banking organ- activities of Cal Fed to those permissible for a bank holdization in the United States, controlling approximately ing company under section 4 of the BHC Act and Regula- 8.5 percent of total assets of insured commercial banks and tion Y and to conform all the other activities of Golden approximately 2.7 percent of total deposits of insured State to those permissible for a financial holding company. depository institutions in the United States ("total U.S. In reviewing the proposal, the Board is required by deposits").3 Citigroup operates subsidiary depository insti- section 4(j)(2)(A) of the BHC Act to determine that the tutions in California, Connecticut, Delaware, Florida, acquisition of Golden State by Citigroup "can reasonably Georgia, Illinois, Maryland, Nevada, New Jersey, New be expected to produce benefits to the public . . . that York, South Dakota, Texas, Utah, Virginia, the District of outweigh possible adverse effects, such as undue concen- Columbia, Guam, Puerto Rico, and the US. Virgin Islands. tration of resources, decreased or unfair competition, con- Citigroup is the ninth largest commercial banking organiza- flicts of interests, or unsound banking practices."6 As part tion in California, controlling deposits of $6.4 billion, of its evaluation of the public interest factors, the Board representing approximately 1.3 percent of total deposits in reviews the financial and managerial resources of the cominsured depository institutions in the state ("state deposits").4 panies involved, as well as the effect of the proposal on Citigroup is the fifth largest commercial banking organiza- competition in the relevant markets.7 In acting on notices tion in Nevada, controlling deposits of $1.4 billion, repre- to acquire a savings association, the Board also reviews the senting approximately 6.7 percent of state deposits. records of performance of the relevant insured depository Golden State, with total consolidated assets of $52 bil- institutions under the Community Reinvestment Act lion, operates depository institutions in California and ("CRA") (12 U.S.C. § 2901 et seq.).8 Nevada. Golden State is the fifth largest depository organization in California, controlling total deposits of Public Comment on the Proposal $21.9 billion, representing approximately 4.5 percent of state deposits. In addition, Golden State is the sixth largest Notice of the proposal, affording interested persons an depository organization in Nevada, controlling deposits of opportunity to submit comments, has been published $1 billion, representing 4.7 percent of state deposits. (67 Federal Register 39,988 (2002)), and the time for filing On consummation of the proposal, Citigroup would re- comments has expired. Because of the public interest in the main the largest commercial banking organization in the proposal, Board staff also participated in a formal meeting United States, with total consolidated assets of approxi- held by the OTS on July 8, 2002, in Daly City, California, which gave commenters an opportunity to present additional oral and written testimony on the various factors that 1. Citigroup intends to acquire Golden State's other direct and the Board must review under the BHC Act.9 Representaindirect nonbanking subsidiaries, including Auto One Acceptance tives of 15 organizations testified at the formal meeting; all Corporation, Dallas, Texas ("Auto One"), and First Nationwide Mortgage Corporation, Frederick, Maryland ("First Nationwide"), pursuant to section 4(k) of the BHC Act (12 U.S.C. § 1843(k)) and the post-transaction notice procedures of section 225.87 of Regulation Y. 2. Citigroup also applied to the Federal Deposit Insurance Corporation ("FDIC") for deposit insurance for Citibank (West) pursuant to 5. 12 C.F.R. 225.28(b)(4). the Federal Deposit Insurance Act (12 U.S.C. § 1815(a)). The Board 6. 12 U.S.C. § 1843(j)(2)(A). has consulted with the FDIC regarding its review of the proposal 7. See 12 C.F.R. 225.26. under this act. 8. See, e.g., BancOne Corporation, 83 Federal Reserve Bulletin 602 3. Asset, deposit, and national ranking data are as of June 30, 2002. (1997). In this context, depository institutions include commercial banks, 9. The meeting also was conducted through videoconferencing savings banks, and savings associations. facilities at OTS offices in Santa Ana, California; Washington, DC; 4. State deposit and state ranking data are as of June 30, 2001. and Jersey City, New Jersey. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 487 the commenters who testified also submitted written com- San Jose, and Las Vegas banking markets.11 The Board has ments. reviewed carefully the competitive effects of the proposal More than 80 organizations and individuals submitted in each of these banking markets in light of all the facts of comments on the proposal, either through oral testimony or record, including the number of competitors that would written comments. Commenters included members of the remain in the markets, the relative share of total deposits in Congress, state and local government officials, community depository institutions controlled by Citigroup and Golden groups, nonprofit organizations, union representatives, cus- State in the markets ("market deposits"),12 the concentratomers of Citigroup, and other interested organizations and tion level of market deposits and the increase in this level individuals. Comments were submitted by organizations, as measured by the Herfindahl-Hirschman Index ("HHI") individuals, and representatives from several states, includ- under the Department of Justice Guidelines ("DOJ Guideing California, Georgia, New York, North Carolina, and lines"),13 and other characteristics of the markets. Ohio, and the District of Columbia. Consummation of the proposal would be consistent with Certain commenters supported the proposal and com- Board precedent and the DOJ Guidelines in each relevant mented favorably on Citigroup's performance under the banking market. After consummation of the proposal, all CRA. These commenters commended Citigroup for its three banking markets would remain moderately concencommitment to local communities and expressed support trated as measured by the HHI. Based on these and all for Citigroup's CRA-related products and services. Most other facts of record, the Board concludes that consummacommenters, however, opposed the proposal, requested tion of the proposal is not likely to result in any signifithat the Board approve the proposal subject to certain cantly adverse effects on competition or on the concentraconditions, or expressed concerns about the CRA perfor- tion of banking resources in the three banking markets mance or consumer compliance records of Citigroup. As noted above or any other relevant banking market. discussed in more detail below, many commenters criticized the lending and insurance sales practices of Citi- Records of Performance Under the Community group's subprime lending subsidiaries, particularly Citi- Reinvestment Act Financial Credit Company, Inc., Baltimore, Maryland ("CitiFinancial"). Other commenters expressed concerns As previously noted, the Board reviews the records of about Citigroup's managerial resources in light of certain performance under the CRA of the relevant insured deposlawsuits, investigations, and settlements involving Citigroup or its securities subsidiary, Salomon Smith Barney, Inc., New York, New York ("SSB"). 11. These markets are described in Appendix A. The effects of the In evaluating the statutory factors under the BHC Act, proposal on the concentration of banking resources in these banking the Board carefully considered the views and information markets are described in Appendix B. presented by the commenters at the formal meeting and in 12. Deposit and market share data are based on annual branch writing. The Board also considered the information pre- reports filed as of June 30, 2001, and on calculations in which the deposits of thrift institutions are included at 50 percent. The Board has sented in the notices and supplemental filings by Citigroup, previously indicated that thrift institutions have become, or have the various reports filed by the relevant companies, publicly potential to become, significant competitors of commercial banks. available information, and other reports. In addition, the See, e.g., Midwest Financial Group, 75 Federal Reserve Bulletin 386 Board consulted with other relevant federal supervisory (1989); National City Corporation, 70 Federal Reserve Bulletin 743 agencies, including the OTS, FDIC, Department of Justice (1984). Thus, the Board regularly has included thrift deposits in the calculation of market share on a 50-percent weighted basis. See, e.g., ("DOJ"), and Securities and Exchange Commission First Hawaiian, Inc., 77 Federal Reserve Bulletin 52 (1991). Citi- ("SEC"), and reviewed confidential supervisory informa- group's deposits in the relevant banking markets are those of its tion, including supervisory reports on the holding compa- subsidiary savings association, Citibank, Federal Savings Bank, nies and their subsidiary depository institutions and other San Francisco, California ("Citibank FSB"). Because Citibank FSB is subsidiaries, and information provided by other federal affiliated with a commercial banking organization, its deposits are included at 100 percent. See, e.g., First Banks, Inc., 76 Federal regulatory agencies and various state regulatory agencies. Reserve Bulletin 669 (1990) ("First Banks Order"). Furthermore, because the Board has analyzed the competitive factors in this case as Competitive Considerations if Citigroup and Golden State were a combined entity, the deposits of Cal Fed are included at 100 percent in the calculation of pro forma market share. See Norwest Corporation, 78 Federal Reserve Bulletin As part of its consideration of the public interest factors 452 (1992); First Banks Order. under section 4 of the BHC Act, the Board has considered 13. Under the DOJ Guidelines, 49 Federal Register 26,823 (1984), carefully the competitive effects of the proposal in light of a market is considered unconcentrated if the post-merger HHI is under all the facts of record.10 Citigroup and Golden State com- 1000, moderately concentrated if the post-merger HHI is between 1000 and 1800, and highly concentrated if the post-merger HHI is pete directly in the Los Angeles, San Francisco-Oaklandmore than 1800. The DOJ has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The DOJ has stated that the higher than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly rec- 10. See First Hawaiian, Inc., 79 Federal Reserve Bulletin 966 ognize the competitive effects of limited-purpose lenders and other (1993). nondepository financial institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

488 Federal Reserve Bulletin • December 2002 itory institutions when acting on notices to acquire a sav- Many commenters alleged that Citigroup provided inadings association.14 The CRA requires the Board to assess equate and costly banking services to LMI or minority each institution's record of meeting the credit needs of its individuals. Several commenters asserted that Citigroup entire community, including low- and moderate-income had an insufficient number of depository institution ("LMI") neighborhoods, consistent with the institution's branches in LMI communities in its California and New safe and sound operation, and to take this record into York City assessment areas. In addition, some commenters account in evaluating bank holding company notices.15 The expressed concern that consummation of the proposal Board has carefully considered the CRA performance would result in branch closures in LMI or predominantly records of each subsidiary insured depository institution of minority communities in California. Several commenters Golden State and Citigroup in light of all the facts of also contended that, based on data submitted under the record, including public comments on the proposal. Home Mortgage Disclosure Act ("HMDA"),19 Citigroup engaged in disparate treatment of minority individuals in A. Summary of Public Comments home mortgage lending. These commenters alleged that Citigroup denied loan applications from minorities more In response to the Board's request for public comment on frequently than it denied applications from whites. this proposal, two of the 85 commenters supported the In addition, several commenters expressed concern about proposal and praised Citigroup for the financial and techni- the loss of Cal Fed as an independent organization and the cal support it provided to their community development possible termination of its affordable mortgage loan and organizations. The other 83 commenters opposed the pro- community development programs. On the other hand, one posal, recommended approval only if subject to conditions commenter asserted that Cal Fed was not an active particisuggested by the commenter, or expressed concerns about pant in affordable mortgage programs for LMI borrowthe CRA performance or fair lending and other consumer ers.20 law compliance records of Citigroup.16 Many commenters expressed concern that consumma- B. CRA Performance Evaluations tion of this proposal would result in fewer financial services choices for consumers, and that Citigroup's corporate As provided in the CRA, the Board has evaluated the decisions would not take into account California's diver- proposal in light of examinations by the appropriate federal sity and community reinvestment needs.17 Some comment- supervisors of the CRA performance records of the releers alleged that Citigroup had low levels of home mortgage vant insured depository institutions. An institution's most lending to LMI or minority borrowers and in LMI or recent CRA performance evaluation is a particularly imporpredominantly minority communities, particularly in Cali- tant consideration in the notice process because it reprefornia and New York City. Other commenters asserted that sents a detailed evaluation of the institution's overall record Citigroup had inadequate levels of community develop- of performance under the CRA by its appropriate federal ment loans, investments, and grants in California. Several supervisors.21 commenters alleged that Citigroup's small business lend- The subsidiary insured depository institutions of Golden ing in California and Nevada was inadequate, particularly State and Citigroup directly involved in the proposal reto businesses in LMI or predominantly minority communi- ceived "outstanding" ratings at their most recent CRA ties.18 performance evaluations. Cal Fed received an "outstanding" rating from the OTS, as of July 30, 2001 ("Cal Fed 2001 Evaluation"). Citibank FSB received an "outstanding" rating from the OTS, as of October 15, 2001 ("2001 14. See, e.g., Northfork Bancorporation, Inc., 86 Federal Reserve CRA Evaluation"), and Citibank Nevada received an "out- Bulletin 767 (2000). standing" rating from the Office of the Comptroller of the 15. 12 U.S.C. § 2903. Currency ("OCC"), as of March 29, 1999 ("1999 CRA 16. As previously noted, many commenters also expressed concerns about the lending and insurance sales practices of Citigroup's Evaluation"). subprime lending affiliates. These matters are discussed later in a Citigroup's other subsidiary depository institutions reseparate section of the order. ceived either "outstanding" or "satisfactory" ratings at 17. The Board considered these comments in connection with its review of the effect of the proposal on competition in the relevant banking markets and Citigroup's plan to make various banking products and services available in the communities served by Citigroup and Cal Fed as discussed in the order. credit needs of its community. See Fifth Third Bancorp, 80 Federal 18. A number of commenters criticized the terms of Citigroup's ten- Reserve Bulletin 838 (1994). year, $120 billion community reinvestment pledge for California and 19. 12 U.S.C. § 2801 etseq. Nevada as inadequate, particularly in comparison with the current 20. This commenter also alleged, based on HMDA data and lending community reinvestment agreement between Cal Fed and certain testing results, that Cal Fed engaged in disparate treatment of minoricommunity organizations in California. Neither the CRA nor the ties in several communities in Southern California. The commenter federal banking agencies' CRA regulations require depository institu- stated that this allegation was referred to the Department of Housing tions to make pledges or enter into agreements with any organization. and Urban Development ("HUD"). The Board has consulted with The Board, therefore, views such pledges and their enforceability as HUD on the referral. matters outside the CRA and focuses on the existing record of a 21. See Interagency Questions and Answers Regarding Community notificant and the programs that the notificant has in place to serve the Reinvestment, 66 Federal Register 36,620 and 36,639 (2001). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 489 their most recent CRA performance evaluations.22 Citi- Examiners praised the lending record of Citibank FSB, bank, N.A., New York, New York ("Citibank NA"), the noting that it had a high volume of lending that exceeded lead depository institution of Citigroup, received a "satis- the loan volume ratios of its peer group in almost every factory" rating from the OCC, as of October 16, 2000 loan category. Citibank FSB and its affiliates originated ("2000 CRA Evaluation"). and purchased $24 billion in total HMDA-reportable loans As discussed in more detail below, the Board has consid- in the institution's combined assessment areas during the ered carefully the fair lending policies and procedures of review period.25 Examiners noted that the level of Citibank Citigroup and its affiliates. In addition, the Board has FSB's total HMDA-reportable lending to LMI borrowers evaluated substantial information submitted by Citigroup during the review period was higher than that of the about the CRA performance of its principal insured depos- aggregate of lenders ("aggregate lenders") for the comitory institutions since their most recent CRA performance bined assessment areas.26 Citibank FSB's lending to LMI evaluations. The Board also has consulted with the appro- borrowers increased by 48 percent in its assessment areas priate federal supervisors of Citigroup's insured depository since the previous evaluation. Examiners indicated that the institutions. geographic distribution of Citibank FSB's HMDAreportable loans in almost every assessment area was supe- C. CRA Performance of Citigroup rior to the performance of the aggregate lenders and, in particular, showed a favorable penetration of LMI areas. As noted above, Citigroup proposes to merge Cal Fed, the Examiners commended Citibank FSB for its innovative California retail branches of Citibank FSB, and the retail and flexible home mortgage loan programs designed to branches of Citibank Nevada into the newly formed Citi- meet the needs of first-time homebuyers and LMI borrowbank (West), with Citibank (West) as the surviving entity. ers, which include the CitiAffordable Mortgage and Citi- The branches and operations of Citibank (West) would be Affordable Assistance programs that provide assistance to subject to Citigroup's CRA and fair lending policies, pro- such borrowers with down payments and closing costs. cedures, and oversight. The CRA assessment areas of Examiners also noted favorably Citibank FSB's Special Citibank (West) would be the same as Cal Fed's current Loan Portfolio, which is composed of loans that do not fit assessment areas.23 Citigroup represented that each market traditional underwriting criteria but are approved during a or major assessment area in California and Nevada would secondary review process. In addition, examiners reported have a full-time CRA officer. In addition, Citigroup stated that Citibank FSB offered affordable mortgage products of that the community development lending and investment in the Federal National Mortgage Association ("FNMA") the assessment areas of Citibank (West) would be con- and the Federal Home Loan Mortgage Corporation that ducted by Citigroup's Center for Community Development featured low down payment requirements, down payment Enterprise ("CCDE"), and that all grants to community and closing cost assistance, and flexible underwriting criteorganizations in California and Nevada would be con- ria. Examiners also reported that during the review period, ducted by The Citigroup Foundation ("Foundation"). The Citibank FSB announced a new affordable mortgage part- CCDE and Foundation conduct such activities for all Citi- nership between CitiMortgage and the FNMA to help group's subsidiary depository institutions that are subject provide thousands of LMI and minority families with to the CRA. below-market rate mortgages ("FNMA Program").27 Under this program, Citibank FSB agreed to originate and the Citibank FSB Ovennew. Citibank FSB, with total assets of $30.3 billion, 25. Citibank FSB elected to have the OTS consider loans in certain is a savings association that would be involved in the lending categories made by affiliates in its assessment areas. The acquisition of Cal Fed by Citigroup. In the 2001 CRA HMDA data reviewed by examiners included data reported by: Citi- Mortgage, Inc., St. Louis, Missouri ("CitiMortgage"); Citibank NA; Evaluation, examiners commended Citibank FSB for dem- Citibank Nevada; Citibank (New York State), Pittsford, New York onstrating a high level of responsiveness to the credit and ("Citibank NYS"); Source One Mortgage Company, Inc. (1999 only); community needs of its combined nationwide assessment Central Pacific Mortgage Company (1999 only); and CitiFinancial and areas during the review period.24 Citibank FSB received CitiFinancial Mortgage Company, Inc., Irving, Texas ("CitiFinancial Mortgage"). Beginning in 2001, CitiFinancial and CitiFinancial Mort- "outstanding" ratings in the overall lending, investment, gage data included data from Associates First Capital Corporation and service performance tests. ("Associates"), also in Irving, and its affiliates after the mortgage lenders merged. Examiners noted that the percentages of total number of HMDA loans to LMI borrowers and in LMI census tracts by 22. See Appendix C for the CRA ratings of all Citigroup's subsid- Citibank FSB and its affiliates did not materially change by including iary depository institutions. the lending of Citibank FSB's subprime lending affiliates, including 23. The California assessment areas of Citibank FSB and the CitiFinancial and CitiFinancial Mortgage. assessment areas of Citibank Nevada are included in Cal Fed's assess- 26. The lending data of the aggregate lenders represent the cumulament areas. tive lending for all financial institutions that have reported HMDA 24. At the time of the 2001 CRA Evaluation, Citibank FSB had data in a given market. In the 2001 CRA Evaluation, examiners 19 assessment areas in California, Illinois, Florida, Maryland, Vir- reviewed aggregate lending data for 1999 only. ginia, Connecticut, New Jersey, Texas, and the District of Columbia. 27. In this program, FNMA agreed to buy home-related loans from The review period was January 1, 1999, through June 30, 2001, which Citigroup to LMI or minority borrowers or to borrowers in LMI or was three months longer than the previous review period. majority-minority census tracts. "Majority-minority" census tracts Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

490 Federal Reserve Bulletin • December 2002 FNMA agreed to purchase $12 billion in mortgage loans gaged in educational training efforts through individual over a five-year period.28 development account programs, which establish special The 2001 CRA Evaluation commended the small busi- savings accounts with matching features to help LMI indiness lending record of Citibank FSB and its affiliates in the viduals accumulate funds for specific purposes such as a combined assessments areas during the review period. Ex- down payments for first-time home purchases and continuaminers reported that, based on dollar volume, Citibank ing education tuition. FSB was the leading small business lender among savings California. In the 2001 CRA Evaluation, Citibank FSB associations in its combined assessment areas in 1999.29 received an "outstanding" rating under the lending test in Examiners found that the geographic distribution of small its California assessment areas.30 Examiners characterized business loans by Citibank FSB and its affiliates generally Citibank FSB's overall loan volume as strong. During the was lower than demographic benchmarks but was reason- review period, Citibank FSB and its affiliates originated ably comparable with aggregate lenders in 1999. and purchased $14 billion in HMDA-reportable loans in In the 2001 CRA Evaluation, examiners also com- the California assessment areas. Examiners reported that mended Citibank FSB for its strong record of community the geographic distribution of Citibank FSB's HMDAdevelopment lending, which they characterized as exhibit- reportable loans compared favorably with the aggregate ing an exceptional amount of innovation. Examiners re- lenders' distribution. During the review period, Citibank ported that Citibank FSB made more than 730 community FSB's total HMDA lending in the California assessment development loans totaling $674 million in its combined areas increased more than 40 percent since its previous assessment areas during the review period. The institu- CRA evaluation, and increased more than 133 percent in tion's qualified community development investments to- LMI geographies. taled approximately $145 million, representing a 130 per- Examiners noted that Citibank FSB's managerial reports cent increase since the previous CRA performance indicated almost 22 percent of its total home purchase evaluation, and its community development grants totaled loans were made to borrowers in LMI census tracts and more than $18 million. The institution's community devel- more than 18 percent to LMI borrowers, which exceeded opment investment portfolio included low-income housing the percentage of the aggregate lenders in 1999. Examiners tax credits, mortgage-backed securities, equity investments reported that Citibank FSB had intensified its focus on in community development organizations, equity funds LMI mortgage lending during the review period. focused on low-income urban areas, investments in not-for- Citigroup has continued to originate and purchase a profit community development organization loan funds, significant volume of HMDA-reportable loans in Califorand certificates of deposits in community banks and credit nia.31 Based on information reported by Citigroup, it origiunions serving LMI areas. nated and purchased HMDA-reportable loans totaling Examiners reported that Citibank FSB's retail banking $8.3 billion in Citibank FSB's California assessment areas services were readily accessible to all segments of its in 2001.32 Citigroup originated and purchased HMDAassessment areas. Examiners found that Citibank FSB's reportable loans totaling $793 million to LMI borrowers distribution of branch offices in LMI census tracts was in the California assessment areas in 2001, including somewhat low in comparison to the percentage of the $662 million in loans by its prime lending affiliates.33 This population living in such communities. However, they lending included home purchase loans to LMI borrowers favorably noted that Citibank FSB's retail banking services totaling $200 million, 98 percent of which were made by also were available through its alternative delivery sys- Citigroup's prime lending affiliates. tems, including telephone banking, on-line computer banking, ATMs, and bank-at-work and bank-by-mail programs. In addition, examiners strongly commended Citibank 30. At the time of the 2001 CRA Evaluation, Citibank FSB's FSB for providing a superior level of community develop- California assessment areas included the following Primary Metropolment services during the review period. Examiners reitan Statistical Areas ("PMSAs"): Los Angeles-Long Beach, ported that the number of Citibank FSB's financial literacy San Francisco, Oakland, San Jose, Orange County, and Ventura. seminars more than doubled since its previous CRA perfor- 31. The data provided by Citigroup included loans originated and mance evaluation. Seminar topics included first- time home purchased by Citibank FSB, Citibank NA, CitiMortgage, CitiFinancial Mortgage, and Citicorp Trust Bank, FSB (formerly Travelers Bank & buying, personal money management, and small business Trust, FSB), Newark, Delaware ("Citicorp Trust"). These data exfinancing. Examiners also noted that Citibank FSB en- cluded transactions between affiliates. 32. Some commenters criticized Citigroup's practice of purchasing rather than originating a substantial number of its prime home mortare those in which minorities comprise 50 percent or more of the gage loans to LMI and minority borrowers. The commenters argued population. that Citigroup should not receive CRA credit for loan purchases and 28. Citigroup stated that it originated more than $3 billion in urged Citigroup to use more flexible underwriting standards to inmortgage loans nationwide under this program in 2001. crease its loan originations to LMI and minority borrowers. The 29. The small business lending performance reviewed by examiners federal regulatory agencies' regulations implementing the CRA do not included data of the following affiliates of Citibank FSB: Citibank differentiate between loan originations and purchases for purposes of NA; Citibank (South Dakota), N.A., Sioux Falls, South Dakota ("Citi- evaluating an institution's CRA lending performance. See, e.g., bank SD"); and Universal Financial Corporation, Salt Lake City, 12 C.F.R. 228.22. Utah. For purposes of this analysis, small business loans included 33. For purposes of these data, Citigroup's prime lending affiliates business loans with an original amount of $1 million or less. include Citibank FSB, Citibank NA, and CitiMortgage. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 491 In the 2001 CRA Evaluation, examiners noted that the exceptional amount of innovativeness and complexity. Citihigh cost of housing in most of Citibank FSB's California bank FSB originated 94 community development loans assessment areas presented challenges in providing home totaling almost $122 million in the California assessment financing for LMI households. Examiners commended areas during the review period. Examiners indicated that Citibank FSB for using a number of innovative and flexible the majority of Citibank FSB's community development lending programs to assist LMI families and first-time lending supported affordable multifamily housing loans. homebuyers.34 During the 18-month review period, Citi- During the review period, Citibank FSB also issued letters bank FSB made 578 loans totaling almost $88 million of credit totaling approximately $141 million to enhance under its specialized affordable housing programs. bond funding of large public works projects in addition to Since the 2001 CRA Evaluation, Citibank FSB's use of its direct community development lending. these specialized affordable housing programs has de- Citigroup represented that, in 2001, it more than doubled clined. In 2001, Citibank FSB made 147 loans totaling the dollar volume of community development lending in almost $26 million under these programs in California. Citibank FSB's California assessment areas during the Citigroup represented, however, that it made home mort- previous year from $153.1 million to $320.2 million. In gage loans totaling more than $1.5 billion through the 2001, the CCDE provided a financing package, which FNMA Program. included a $6 million letter of credit and a $400,000 In the 2001 CRA Evaluation, examiners characterized construction loan to support the purchase and rehabilitation Citibank FSB as a leader in lending to small businesses in of a 34-unit HUD Section 8 affordable apartment building California. Examiners noted that Citibank FSB's volume for seniors in a San Francisco neighborhood. In addition, of small business lending increased significantly during the Citigroup provided an extensive financing package to Calireview period, particularly to businesses in LMI census fornia State University ("CSU") to provide 900 new aftracts. This increase in Citibank FSB's small business fordable housing units for the faculty and staff of CSU's lending was due primarily to the introduction of small new Channel Islands campus in Ventura County, a high business credit cards by affiliates in 1999.35 During the cost-of-living area of California. review period, Citibank FSB's and its affiliates' small Citibank FSB received an "outstanding" rating under business loans totaled more than $789 million in the Cali- the investment test for the California assessment areas.37 fornia assessment areas, including $202 million in loans to Examiners commended Citibank FSB for its overall combusiness in LMI census tracts. Examiners also noted that munity development investment performance in California more than 98 percent of the number of small business loans and for taking a leadership role in its investments. Citibank by Citibank FSB and its affiliates were in amounts of FSB made 34 qualified investments totaling almost $100,000 or less, which compared favorably with the ag- $41 million during the review period. Examiners reported gregate lenders. In addition, examiners noted that Citibank that Citibank FSB made investments totaling $13.8 million FSB increased its emphasis on Small Business Administra- in low-income housing tax credits, $4.4 million in tion ("SBA") lending during the review period through the mortgage-backed securities, and $22.7 million in various development of a seminar to help generate applicants for community development organizations, credit unions, eq- SBA loans.36 uity funds, and community development project subsidies. Citigroup stated that its small business lending in Citi- In addition, examiners noted that Citibank FSB donated bank FSB's assessment areas has continued to increase $2.5 million to a variety of organizations that provided significantly since the 2001 CRA Evaluation. Citigroup housing assistance or community development support in represented that its small business lending more than tri- California. pled in California, increasing from more than 30,000 loans Citigroup represented that it has made additional comto almost 92,000 loans in 2001. In addition, Citigroup munity development investments in California totaling stated that the percentage of its small business lending in almost $12 million since the 2001 CRA Evaluation. These LMI census tracts in California increased from approxi- investments included a $100,000 certificate of deposit in mately 24 percent to 29 percent in 2001. the People's Community Partnership, the only financial In the 2001 CRA Evaluation, examiners reported that institution in a low-income area of Oakland, and $4 million Citibank FSB's community development lending perfor- investment in Quad Ventures, a private equity fund focused mance in California was very strong and exhibited an on segments of the education industry. In addition, Citigroup stated that the Foundation has awarded community development grants totaling more than $1.5 million to 34. Several commenters argued that Citigroup's volume of lending organizations in California to increase financial literacy, under its group of affordable mortgage loan products was low in improve educational opportunities for children, and help California. low-income individuals develop assets. 35. Commenters criticized small business lending through credit cards for having lower limits and being more expensive to borrowers than traditional small business loan products. 36. Commenters urged Citigroup to become an active participant in 37. The majority of community development investments were SBA loan programs. Citigroup stated that it was working to increase purchased by affiliates of Citibank FSB, and all community developits SBA lending volume in California by conducting a direct market- ment grants were provided by the Foundation. Qualified investment ing campaign, employing a dedicated SBA loan sales staff", and balances are as of October 11, 2001, and grant balances are as of conducting SBA-related seminars and events. June 30, 2001. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

492 Federal Reserve Bulletin • December 2002 In the 2001 CRA Evaluation, Citibank FSB received an very favorably in light of demographic data, the level of "outstanding" rating under the service test in the Califor- comprable lending by aggregate lenders, and the bank's nia assessment areas.38 Examiners reported that Citibank overall market share. For example, Citibank Nevada made FSB's banking services were readily accessible to all seg- 51 percent of its home purchase loans to LMI borrowers, ments of its California assessment areas.39 Examiners noted which significantly exceeded the aggregate lenders' perthat more than 17 percent of its branches, and almost centage of 29 percent. 22 percent of its ATMs, were in LMI census tracts.40 Citigroup stated that Citibank Nevada's volume of total Examiners found that, although Citibank FSB's distribu- HMDA-reportable loans declined slightly from 2000 to tion of branch offices in low-income census tracts was 2001, but that its lending in LMI census tracts as a percentreasonable in comparison to the percentage of the popula- age of total HMDA lending increased during this time tion in these geographies, the institution's presence in period. Citigroup represented that Citibank Nevada's volmoderate-income census tracts was not significant based ume of total HMDA-reportable lending to LMI households on local demographic characteristics. Currently, 19 percent also declined slightly from 2000 to 2001, which was consisof Citibank FSB's branch offices are in LMI census tracts. tent with an overall decline in lending by other creditors Examiners commended Citibank FSB for its community because of the rising housing prices in Nevada. The voldevelopment services during the review period, noting that ume of home refinance loans, however, increased dramatithe institution had held consumer education seminars for cally from 2000 to 2001. Citigroup stated that the number more than 20,000 individuals. Seminar topics included and dollar volume of Citibank Nevada's home refinance first-time homebuying, small business financing, consumer loans in LMI census tracts tripled, and the volume of such financial education, investments, and insurance. loans to LMI borrowers doubled, in 2001. Citibank Nevada. As previously noted, Citibank Nevada In the 1999 CRA Evaluation, examiners found that Citireceived an "outstanding" CRA performance rating from bank Nevada oifered a variety of proprietary home mortthe OCC in the 1999 CRA Evaluation.41 Citibank Nevada gage loan programs and participated in first-time home received a "high satisfactory" rating under the lending test buyer programs sponsored by state and municipal agenin the 1999 CRA Evaluation.42 Examiners reported that cies. These programs included a program that provided Citibank Nevada made home mortgage loans totaling more pre-approved credit and loan commitments before home than $172 million, including home purchase loans totaling selection and four special mortgage assistance programs more than $61 million 43 Citibank Nevada was particularly specific to the southern Nevada area. During the two-year commended for its excellent distribution of home mortgage review period Citibank Nevada made 90 loans totaling loans in LMI geographies and to LMI borrowers. Examin- $8 million under these special programs. Citigroup stated ers considered Citibank Nevada's level of home mortgage that Citibank Nevada made home mortgage loans totaling lending in low- income census tracts and to LMI borrowers $295 million under its proprietary home mortgage programs in 2001. In the 1999 CRA Evaluation, examiners determined that Citibank Nevada's small business lending compared satis- 38. Commenters alleged that Citigroup has not demonstrated a commitment to providing meaningful services to LMI and predomi- factorily with that of its competitors.44 Examiners reported nantly minority communities in California, such as free checking that Citibank Nevada's small business lending totaled accounts and money transmission services. $20.6 million and that 34 percent of its total business 39. One commenter expressed concern that Citigroup's subsidiary lending was to small businesses 45 They also noted that the bank in Mexico was marketing loan products in the United States majority of the bank's small business loans were small, without being subject to the CRA. Citigroup stated that it launched that marketing program in 2002 through Banamex USA Bancorp and with an average loan amount of $82,000. its subsidiary bank, California Commerce Bank ("CCB"), both in Since the 1999 CRA Evaluation, the volume of Citibank Century City, California, which is subject to the CRA. Under this Nevada's small businesses lending has significantly inprogram, customers of CCB could purchase consumer goods oifered creased. Citigroup represented that Citibank Nevada's by an unaffiliated third party through a catalog, and the goods would be delivered in Mexico. Citigroup represented that it discontinued this small business loan volume increased from almost 1,300 program because of limited customer response. loans in 2000 to 6,700 loans in 2001, primarily through the 40. Commenters criticized Citigroup's performance as the contrac- issuance of small business credit cards by affiliates. In tual provider of California's Electronic Benefits Transfer ("EBT") addition, Citigroup represented that Citibank Nevada inprogram for not providing a sufficient number of ATMs or other free creased the percentage of its small business lending to access points in LMI communities where the majority of welfare recipients reside. businesses in LMI census tracts, in 2001, to a level that 41. At the time of the 1999 CRA Evaluation, Citibank Nevada's assessment area included most of the Las Vegas MSA. The review period for the lending test was from January 1, 1997, through December 31, 1998; the review period for the service and investment tests 44. Examiners indicated that Citibank Nevada held only a small was from May 7, 1997, through March 29, 1999. portfolio of small business loans and chose instead to focus on 42. Examiners noted that Citibank Nevada was a unique hybrid residential lending to alleviate unmet home mortgage lending needs in institution that consisted of a large credit card center and a smaller the community. During the review period, Citibank Nevada oifered retail banking branch network. small business loans only as an accommodation to the bank's retail 43. In the 1999 CRA Evaluation, the review of Citibank Nevada's customers. home mortgage lending included the lending activities of Citibank 45. For purposes of this analysis, small businesses include busi- FSB and CitiMortgage in the bank's assessment area. nesses with gross annual revenues of $1 million or less. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 493 exceeded that of the aggregate lenders' percentage. Citi- system through traditional branches and state-of-the-art group also represented that almost all its small business technology, which was accessible to individuals of differloans in 2001 were in amounts of less than $100,000. ent income levels in the assessment area. During the re- In the 1999 CRA Evaluation, examiners reported that the view period, Citibank Nevada staff also offered qualified level of Citibank Nevada's community development lend- community development services through the CLC and ing significantly exceeded the amount of such lending by provided financial and technical support to numerous comsimilarly situated banks in the community. Examiners re- munity organizations. ported that Citibank Nevada made community develop- Since the 1999 CRA Evaluation, Citigroup has continment loans totaling more than $2 million during the review ued to expand its community development services. Citiperiod, and that these loans helped finance affordable hous- group stated that it has provided community development ing developments for low-income families. services in Nevada in partnership with programs sponsored Examiners commended Citibank Nevada for establish- by its Community Development Institute, including the ing its Community Lending Center in North Las Vegas Community Development Capacity Building Program that ("CLC") in 1998 to facilitate community development provides credit training and project development assistance lending in LMI areas.46 Examiners reported that the CLC, to nonprofit practitioners engaged in neighborhood revitalwhich is in a low-income community, made almost ization. In addition, Citigroup represented that it partici- 100 loans during its first six months of operation, including pated with a local government agency in providing homeloans totaling almost $2 million that promoted affordable buyer education and loan applications to LMI first-time housing development. homebuyers and held a series of free seminars on various Citigroup stated that, during the two-year period since topics, including homebuying, investments, and SBA lending. the 1999 CRA Evaluation, the CCDE made community development loans totaling more than $9 million in Citibank Nevada's assessment area. This community develop- Citibank NA ment lending included loans to several multifamily affordable housing projects. New York City. As previously noted, Citibank NA received In the 1999 CRA Evaluation, Citibank Nevada received a "satisfactory" rating in its 2000 CRA performance evalan "outstanding" rating under the investment test. Examin- uation ("2000 CRA Evaluation").47 Citibank NA received ers commended Citibank Nevada for an excellent level of a "high satisfactory" rating under the lending test.48 Examcommunity development investments. Examiners reported iners particularly commended Citibank NA's significant that Citibank Nevada made $41 million in qualified com- level of community development lending in the New York munity development investments during the review period, assessment area during the review period and noted that mostly targeted mortgage-backed securities, Nevada hous- Citibank NA extended more than 53,000 home mortgage ing bonds, low-income housing tax credits, and invest- and small business loans totaling $3.3 billion 49 Examiners ments in community development intermediaries. In addi- found that Citibank NA was among the leading home tion, examiners noted that Citibank Nevada made purchase lenders to LMI borrowers in the New York asinvestments in and grants to a number of civic and commu- sessment area and that the bank's distribution of HMDAnity economic development organizations to benefit LMI reportable loans to LMI borrowers and in LMI geographies individuals or communities. was good. In addition, examiners commended Citibank NA Citigroup represented that it made more than $19 million for the excellent geographic distribution of its home imin community development investments in Citibank Neva- provement loans, particularly in LMI geographies where da's assessment area in 2000 and 2001. These included investments totaling $9.8 million in low-income housing tax credits, $6.2 million in community development intermediaries, and $500,000 in qualified equity funds. In addition, Citigroup stated that the Citigroup Foundation has 47. Citibank NA's assessment areas in New York included the New awarded more than $341,000 in grants to organizations in York Metropolitan Statistical Area ("MSA"), excluding Putnam Nevada, primarily to community development or County, and the Nassau-Suffolk MSA ("New York assessment area"). The evaluation period for the lending test generally was October 1, education-related organizations to revitalize neighborhoods 1998, through June 30, 2000. For community development loans or increase financial literacy. under the lending test, the investment test, and the service test, the Citibank Nevada received an "outstanding" rating under evaluation period was October 27, 1998, through October 16, 2000. the service test in its 1999 CRA Evaluation. Examiners 48. The lending data includes HMDA-reportable loans originated and purchased by Citibank FSB, Citibank NYS, CitiMortgage, and reported that Citibank Nevada provided a retail delivery CitiFinancial, and small business loans originated and purchased by Citibank FSB, Citibank SD, and Universal Bank, N.A., Columbus, Georgia (subsequently merged into Citibank SD). 46. Examiners noted that the CLC's loan products were tailored to 49. Examiners noted that the New York assessment area was one of meet the needs of the surrounding community and included small the highest cost-of-living areas in the United States and, despite the personal loans, secured and unsecured home improvement loans, and extended period of economic prosperity, income disparity had inspecial-purpose mortgage loans. They also reported that the bank's creased and LMI families had limited opportunities for home owner- CRA officer managed the CLC and spent a substantial amount of time ship because the amount of owner-occupied housing in New York meeting with local community groups. City remained relatively scarce. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

494 Federal Reserve Bulletin • December 2002 its market share substantially exceeded that of its overall rehabilitation of affordable residential units and commerhome improvement lending in the assessment area.50 cial spaces in the Bronx, and $33 million in loans in 2001 In the 2000 CRA Evaluation, examiners reported that to rehabilitate an office building in Harlem that was part of Citibank NA made more than 19,000 affordable mortgage an Upper Manhattan redevelopment and revitalization plan. loans during the review period. Examiners particularly Citigroup NA also received an "outstanding" rating commended Citibank NA for its home loan product's inno- under the investment test in the 2000 CRA Evaluation. vation and flexibility. In 1997, Citibank NA established the Examiners reported that Citibank NA was a leader in Special Loan Portfolio for borrowers with credit weak- community development investments and eifectively levernesses who would not otherwise qualify for the bank's aged its investments through strategic partnerships with standardized affordable mortgage products. Examiners nonprofits and community development corporations. Durnoted that Citibank NA expanded its commitment to this ing the review period, Citibank NA's community develop- Special Loan Portfolio in 1999 and that the bank made ment investments increased from $56 million to almost 340 of these loans totaling $20.5 million during the $121 million. Almost half the bank's qualified investments review period. supported affordable housing, including a $40 million in- The 2001 HMDA data indicate that Citigroup has contin- vestment in equity partnerships whose funds were used to ued to provide a significant volume of HMDA-reportable create affordable rental projects in the New York Metropollending in Citibank NA's New York assessment area. In itan area and a $1.3 million investment in a limited partner- 2001, Citigroup originated and purchased HMDA- ship equity fund that acquires and develops properties in reportable loans totaling $3.6 billion, of which more than inner city and LMI areas to promote revitalization. Citi- $387 million of were in LMI census tracts, and almost bank NA's other community development investments pro- $320 million were to LMI borrowers in the New York moted community services for LMI individuals and small assessment area.51 business financing in LMI neighborhoods. Examiners determined that Citibank NA's community Since the 2000 CRA Evaluation, Citigroup has contindevelopment lending volume was excellent and had a ued to increase its level of qualified investments. Citigroup positive impact on the bank's overall lending activity. represented that it made $145.5 million in community During the review period, the CCDE made community development investments from July 2000 through June development loans totaling almost $240 million in the New 2002, to promote affordable housing, economic develop- York assessment area. Examiners noted that this amount ment, and other community development projects, such as included more than $110 million in community develop- providing computer software for large school districts. ment loans for affordable housing, including $30 million in In the 2000 CRA Evaluation, Citibank NA received a loans to two community-based corporations under New "high satisfactory" rating under the service test. Examin- York City's Neighborhood Entrepreneur Program to pro- ers reported that Citibank NA's delivery systems were vide financing for housing projects in the Bronx and accessible to individuals and geographies of different in- Brooklyn.52 come levels in the New York assessment area.53 In addi- Citigroup represented that it had increased its commu- tion, examiners commended Citibank NA for its excellent nity development lending since the 2000 CRA Evaluation. level of community development services, which focused Citigroup stated that it made community development on financial literacy and increasing the access of LMI loans totaling more than $325 million in the New York individuals to banking services, particularly credit.54 assessment area from July 2000 through May 2002. This community development lending included $13 million in D. CRA Performance of Cal Fed loans to a community-based organization in 2000 for the As previously noted, Cal Fed received an overall "outstanding" rating for CRA performance from the OTS in the Cal Fed CRA Evaluation, with "outstanding" ratings 50. In the 2000 CRA Evaluation, examiners noted that the preponderance of home improvement loans reflected the bank's strategy of for each of the lending, investment, and service tests in using this product as an initial marketing method to strengthen home California and Nevada.55 Examiners particularly commortgage lending and deposit relationships with LMI customers and communities. Examiners also noted that the volume of these loans peaked in 1999, and that the bank's home purchase lending subsequently increased in 1999 and 2000, exceeding its overall market 53. Commenters alleged that Citibank NA lacked a sufficient numshare of such loans to all borrowers. ber of branches in low-income neighborhoods in New York City. 51. These data are for Citibank NA and CitiMortgage and may 54. Commenters expressed concern about Citigroup's role as the include transactions with affiliates. contractual provider of EBT services in New York because Citigroup 52. Commenters alleged that Citibank NA failed to meet the credit allegedly did not have enough ATMs and other access points of needs of minorities and LMI individuals in New York City. These services in LMI areas, which caused welfare recipients to incur fees to commenters argued that Citibank NA controlled more than 25 percent access their welfare benefits. In 2000, Citicorp Electronic Financial of all deposits in New York City, but made less than 1 percent of all Services, Inc., the subsidiary of Citigroup that received the EBT direct HMDA-reportable loans for multifamily housing in the city. As contract, reached an agreement with the New York State Attorney previously noted, examiners commended Citibank NA for an excellent General to provide 150 ATMs with no user surcharge in low-income level of community development lending in the New York assessment neighborhoods in Manhattan, Queens, Brooklyn, and the Bronx. area and noted that almost half of its community development loans 55. The review period was July 1, 1998, through March 31, 2001. were for affordable housing. Examiners included the loans originated and purchased by Cal Fed's Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 495 mended Cal Fed for its distribution of HMDA-reportable branch offices, ATMs, and telephone banking and provided loans among customers of different income levels and for customers throughout its assessment areas with an array of its extensive use of innovative and flexible lending pro- affordable banking products. Examiners found that its grams to help finance home purchases by LMI persons. In banking offices were readily accessible to all segments of particular, examiners reported that Cal Fed's lending to the community, including LMI areas. In addition, examinlow-income borrowers or in low-income census tracts re- ers reported that Cal Fed provided a high level of commuflected an excellent record of serving the credit needs of nity development services in its assessment areas, includthe most economically disadvantaged areas, individuals, ing a broad array of financial literacy training, and businesses. Citigroup represented that it expects to homeownership counseling, and technical assistance and continue a number of Cal Fed's specialized mortgage lend- training for small business owners. ing programs designed to assist LMI individuals, small business programs, and community development lending E. HMDA Data and Fair Lending Record and service programs. Examiners commended Cal Fed for excellent responsive- The Board also has carefully considered Citigroup's lendness to home mortgage credit needs in its combined assess- ing record in light of comments on HMDA data reported ment areas. During the review period, Cal Fed funded by its subsidiaries.57 The 2001 HMDA data indicate that residential mortgage loans totaling more than $34 billion in Citigroup's denial disparity ratios for African-American its combined assessment areas, including more than and Hispanic applicants generally were higher than the $34 billion in California and $594 million in Nevada. In the denial disparity ratios for the aggregate lenders for the total Cal Fed CRA Evaluation, examiners found that the percent- HMDA-reportable loans in the markets reviewed.58 In adages of Cal Fed's total HMDA-reportable loans in LMI cen- dition, Citigroup's housing-related loan originations to sus tracts and to LMI borrowers in California during the African-American and Hispanic individuals, as a percentreview period exceeded that of the aggregate lenders in 1999. age of its total HMDA-reportable lending, generally were Examiners indicated that Cal Fed's small business lend- below that of the aggregate lenders in some of the maring in its combined assessment areas also reflected excel- kets.59 Citigroup's percentage of housing-related loan origlent responsiveness to area credit needs. Cal Fed made inations to borrowers in minority census tracts, however, small business loans totaling more than $410 million dur- was comparable with or exceeded that of the aggregate ing the review period, including $404 million in California lenders in a number of the markets.60 and $7.6 million in Nevada. In the Cal Fed CRA Evalua- Although the HMDA data reflect certain disparities in tion, examiners reported that almost 30 percent of the rates of loan applications, originations, and denials Cal Fed's small business loans were to businesses in LMI among members of different racial groups and persons at census tracts during the review period. different income levels generally and in certain local areas, Examiners characterized Cal Fed as a leader in commu- the data generally do not indicate that Citigroup is excludnity development lending. They noted that Cal Fed's com- ing any race or income segment of the population or munity development lending focused on providing shelter geographic areas on a prohibited basis. The Board neverto very low-income persons and those with special needs. theless is concerned when the record of an institution During the review period, Cal Fed originated more than $62 million in community development loans, including $52.6 million in California and $7.5 million in Nevada. 57. Several commenters alleged that Citigroup's 2000 or 2001 Examiners noted that Cal Fed's community development HMDA data in various MSAs indicated that Citigroup is proportionlending resulted in the creation or rehabilitation of more ately denied African-American and Hispanic applicants for home than 1,900 units of affordable housing. purchase or home refinance loans. The commenters noted that Citigroup's denial ratios for minority applicants were higher than the In addition, examiners commended Cal Fed for its didenial ratios for nonminority applicants and that these denial disparity verse community development investments.56 Examiners ratios compared unfavorably with those of the aggregate lenders in the reported that Cal Fed made qualified investments totaling MSAs. The denial disparity ratio compares the denial rate for minority more than $645 million, most of which were in California. loan applicants with that for nonminority applicants. A commenter They indicated that the majority of Cal Fed's community also alleged that the percentages of Citigroup's home purchase and refinance loans to African-American and Hispanic borrowers in sevdevelopment investments were mortgage-backed securities eral MSAs compared unfavorably with the percentages for the aggreand collateralized mortgage obligations secured by proper- gate lenders. ties in its combined assessment areas. 58. The Board analyzed 2000 and 2001 HMDA data for Citigroup's In the Cal Fed CRA Evaluation, examiners noted that lending affiliates in their assessment areas in California, New York, and other assessment areas discussed by commenters. The Board's Cal Fed provided a high level of retail services through review included the HMDA data for Citibank FSB, Citibank NA, Citibank NYS, and CitiMortgage. 59. In addition to loan originations, Citigroup purchases a substantwo principal lending subsidiaries, First Nationwide (mortgage loans) tial volume of HMDA-reportable loans. Combining Citigroup's origiand Auto One (auto loans). nations and purchases in the markets reviewed generally results in 56. Citigroup represented that, on consummation of the proposal, higher percentages of Citigroup's HMDA-reportable loans in minority Cal Fed's community development investment portfolio would be census tracts and to minority borrowers. managed by the CCDE, and the Foundation would evaluate Cal Fed's 60. For purposes of this HMDA analysis, minority census tract grants and determine whether to extend additional funds to recipients. means a census tract with a minority population of 80 percent or more. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

496 Federal Reserve Bulletin • December 2002 indicates disparities in lending and believes that all banks Board also has considered the HMDA data in light of are obligated to ensure that their lending practices are Citigroup's overall lending and community development based on criteria that ensure not only safe and sound activities discussed above, which show that Citigroup's lending, but also equal access to credit by creditworthy subsidiary depository institutions significantly assist in applicants regardless of their race, gender, or national helping to meet the credit needs of their entire communiorigin. The Board recognizes, however, that HMDA data ties, including LMI areas. The Board believes that, viewed alone provide an incomplete measure of an institution's in light of the entire record, the HMDA data indicate that lending in its community because these data cover only a Citigroup's record of performance in helping to serve the few categories of housing-related lending. HMDA data, needs of its communities is consistent with approval of the moreover, provide only limited information about the cov- proposal. ered loans.61 HMDA data, therefore, have limitations that make them an inadequate basis, absent other information, F. Branch Closings for concluding that an institution has not assisted adequately in meeting its community's credit needs or has Several commenters expressed concern about the possible engaged in illegal lending discrimination. effect of branch closings in the California assessment areas Because of the limitations of HMDA data, the Board has of Citibank FSB and Cal Fed that might result from this considered these data carefully in light of other informa- proposal. The Board has carefully considered the comtion, including examination reports that provide an on-site ments on potential branch closings in light of all the facts evaluation of compliance with fair lending laws by Citi- of record. The Board has reviewed Citigroup's branch group's subsidiary depository institutions. Examiners closing policies, preliminary review of potential closures found no evidence of prohibited discrimination or other and consolidations, and record of opening and closing illegal credit practices or any substantive violations of fair depository institution branches.64 lending laws at any of the current depository institutions Citigroup has represented that it would follow its existcontrolled by Citigroup.62 ing branch closure policy before closing or consolidating The record also indicates that Citigroup has taken a any branches. Under this policy, Citibank must review a number of affirmative steps to ensure compliance with fair number of factors before closing or consolidating a branch, lending laws. Citigroup has instituted corporatewide com- including a profile of the branch, the marketplace demopliance policies and procedures to help ensure compliance graphics, a profile of the community where the branch is with all fair lending and other consumer protection laws located, and the effect on customers. The most recent CRA and regulations, employed compliance officers and staff examinations of Citigroup's subsidiary depository instituresponsible for monitoring compliance, and conducted reg- tions indicated that they had satisfactory records of openular audits of compliance. Citigroup's subsidiary deposi- ing and closing branches. tory institutions have established detailed fair lending pro- The Board also has considered that federal banking law cedures in addition to Citigroup's corporate policies and provides a specific mechanism for addressing branch closprocedures, including extensive fair lending training pro- ings.65 Federal law requires an insured depository institugrams for employees and fair lending self-assessments tion to provide notice to the public and to the appropriate using matched-pair testing and statistical analyses. In addition, all declined applications are independently reviewed by two underwriters, the second of whom must be a Senior Veterans' Affairs compared with the number of such loans it provides Underwriter or Risk Management Expert. Declined appli- to nonminority homebuyers. The Board notes that such mortgage loan cations go through a third level of review if the applicant is products provide many homebuyers with lower lending-cost opportua LMI borrower, is applying for a community lending nities and that the CRA does not require banks to provide any product, or lives in a minority or LMI census tract.63 The particular types of loan products or programs to meet the credit needs of their communities. As previously noted, examiners found no evidence of prohibited discrimination or other illegal credit practices at any of Citigroup's subsidiary depository institutions or any violations 61. The data, for example, do not account for the possibility that an of substantive provisions of the fair lending laws. institution's outreach efforts may attract a larger proportion of margin- 64. One commenter alleged that Citigroup has closed branches in ally qualified applications than other institutions attract and do not LMI and predominantly minority communities in the past. The Board provide a basis for an independent assessment of whether an applicant considered substantially identical comments when it approved the who was denied credit was, in fact, creditworthy. Credit history acquisition of European American Bank by Citigroup in 2001 and the problems and excessive debt levels relative to income (reasons most acquisition of Citicorp by Travelers Group Inc. in 1998. See Citigroup frequently cited for a credit denial) are not available from HMDA Inc., 87 Federal Reserve Bulletin 600, 611 (2001) ("Citigroup/EAB data. Order")\ Travelers Group Inc., 84 Federal Reserve Bulletin 985, 999 62. In connection with the 2001 CRA Evaluation, OTS and OCC (1998). examiners conducted a joint fair lending review of Citibank FSB, 65. Section 42 of the Federal Deposit Insurance Act (12 U.S.C. CitiMortgage, and Citibank NA. During this review, examiners evalu- § 183 lr-1), as implemented by the Joint Policy Statement Regarding ated the denied and approved home purchase applications from minor- Branch Closings (64 Federal Register 34,844 (1999)), requires that a ities and nonminorities, and no violations of the substantive provisions bank provide the public with at least 30-days' notice and the appropriof the antidiscrimination laws or regulations were identified. ate federal supervisory agency with at least 90-days' notice before the 63. Some commenters alleged that Citigroup provides minority date of the proposed branch closing. The bank also is required to homebuyers with a disproportionate number of mortgage loans spon- provide reasons and other supporting data for the closure, consistent sored by the Federal Housing Administration and the Department of with the institution's written policy for branch closings. 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Legal Developments 497 federal supervisory agency before closing a branch. In of CitiFinancial involving LMI and minority borrowers.67 addition, the Board notes that the OTS, as the appropriate For example, several commenters expressed concern that federal supervisor of Citibank FSB, will continue to review CitiFinancial prices its loans without considering a custom- Citibank FSB's branch closing record in the course of er's credit risk profile, does not provide customers that conducting CRA performance examinations. have excellent credit ratings with access to Citigroup's prime rate products, and engages in aggressive loan collec- G. Conclusion on CRA Performance Records tion and foreclosure practices.68 In addition, several commenters alleged that Citigroup has indirectly supported The Board has carefully considered all the facts of record, predatory lending through its business relationships with including reports of examination of CRA records of the unaffiliated third parties engaged in subprime lending.69 institutions involved, information provided by Citigroup, Commenters also argued that the Board should deny this all comments received and responses to the comments, and notice or impose conditions requested by the commenters confidential supervisory information. Based on a review of in light of the concerns expressed about Citigroup's the entire record, and for the reasons discussed above, the subprime lending and related activities. Board concludes that the CRA performance records of the Several commenters challenged the adequacy of the institutions involved are consistent with approval. Initiatives, including those designed to address fair lending compliance, and asserted that Citigroup had not imple- Subprime Lending of Citigroup mented them effectively.70 In particular, a number of commenters questioned the effectiveness and implementation In its order approving the acquisition by Citigroup of EAB, of the programs to refer qualified customers of Citigroup's the Board announced that it would conduct a thorough examination to assess Citigroup's effectiveness in implementing various initiatives proposed by Citigroup ("Initiatives") to help ensure compliance with the fair lending 67. Several commenters also expressed concerns about the sale by a laws and to prevent abusive lending practices by Citi- Citigroup affiliate, Primerica Financial Services (and its agents), of loan products of Citicorp Trust (previously called Travelers Bank and group's subprime lending subsidiaries, CitiFinancial and Trust, FSB) and insurance products of other affiliates. The Board has CitiFinancial Mortgage.66 The Board explained in the order consulted with the OTS, the appropriate federal supervisor of Citicorp that, in addition to monitoring implementation of the Initi- Trust, and relevant state regulatory agencies and forwarded the comatives, the Board had broad supervisory authority under the ments to those agencies. 68. Some commenters also contended, based in part on HMDA banking laws to require Citigroup to take any other steps data, that Citigroup engages in violations of the fair lending laws, and necessary to address deficiencies that might be identified in improperly markets higher-cost subprime loan products to minority, the examination. The Board also indicated that it would LMI, and rural communities while it markets lower-cost prime loan consider the information gathered in its examination and products to nonminority and more affluent communities. As noted supervisory reports in reviewing future proposals by Citi- above, the Board recognizes, as with disparities in denial ratios, that HMDA data alone provide an incomplete measure of an institution's group as relevant and appropriate. lending in its community. Because of the limitations of HMDA data, The Board is in the midst of conducting its examination the Board has considered these data carefully in light of other informaof CitiFinancial and CitiFinancial Mortgage. The examina- tion, including examination reports and other confidential supervisory tion is being conducted jointly by the Board and the material. 69. Several commenters alleged that Citigroup has indirectly sup- Federal Reserve Bank of New York, in close cooperation ported predatory lending by unaffiliated consumer lenders through the with the NYSBD. Because of the number and scope of the warehouse lending and securitization activities of its subsidiary, SSB. offices and activities of CitiFinancial and CitiFinancial Citigroup indicated that SSB engages in underwriting securities Mortgage, the examination is not yet complete. Moreover, backed by subprime mortgage loans and provides warehouse loans to the Board has determined to expand the scope of the some mortgage banking customers for which it underwrites securities. Citigroup stated that SSB does not control the origination of subprime examination to encompass the insurance sales activities of loans from its unaffiliated mortgage banking customers, but that it CitiFinancial. reviews each lender's policies and procedures and sets eligibility Some commenters have taken the opportunity provided criteria for the loans it will finance through its warehouse lending and by this notice to give the Board information and comments securitization arrangements. In addition, SSB, or an outside firm hired and supervised by SSB, reviews a sample of any loan pool to be about the subprime lending and insurance sales activities securitized for compliance with consumer protection laws and its loan of Citigroup's subprime lending affiliates. A number of eligibility criteria before making any warehouse loan advance. Morecommenters asserted or expressed concern that Citigroup's over, the Board notes that the Federal Trade Commission ("FTC"), nondepository subprime lending affiliates engage in vari- HUD, and DOJ have responsibility for enforcing the compliance with ous lending practices that the commenters argue are abu- fair lending laws by nondepository institutions. 70. For example, several commenters alleged that Citigroup undersive, unfair, or deceptive, particularly in connection with mined the effectiveness of the "mystery shopper" program (whereby the subprime lending and related insurance sales practices minority and nonminority individuals pose as CitiFinancial customers to evaluate branch compliance practices) by providing advance notice of the tests to certain CitiFinancial districts and branches. Although 66. Citigroup/EAB Order at 609. Citigroup proposed the Initiatives Citigroup noted that some CitiFinancial offices were notified of the to the OCC, FDIC, and New York State Banking Department approximate dates of the initial "mystery shopper" test to encourage ("NYSBD"), and adopted them in connection with its acquisition of compliance efforts, it stated that CitiFinancial offices were not notified Associates in November 2000. of the subsequent tests. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

498 Federal Reserve Bulletin • December 2002 subprime lenders to its prime mortgage lenders (the tices.73 Under the Enhancements, CitiFinancial will inform "Referral Programs").71 its customers that the purchase of insurance and related The Board continues to expect all bank holding compa- products is entirely optional, and that the purchase of such nies and their affiliates to conduct their subprime lending products has no bearing on the approval, amount, or terms operations free of any abusive lending practices and in of the loan requested. CitiFinancial also will provide furcompliance with the fair lending laws. Subprime lending is ther oral and written disclosures to purchasers of insurance a permissible activity and provides needed credit to con- and related products about the cost, coverage, terms, and sumers who have difficulty meeting conventional under- cancellation policies of the insurance products offered.74 writing criteria. On the other hand, the Board recognizes Moreover, as part of the Enhancements, Citigroup also is that the development of the subprime market has been reviewing and will make revisions to the compensation marred with reports of abusive and deceptive practices that system of CitiFinancial, as necessary to help ensure the can deny the market's beneficial aspects to borrowers. effective implementation of these changes to the insurance Borrowers do not benefit from expanded access to credit if sales practices and the Initiatives. the credit involves abusive lending practices. The Board The Board will thoroughly examine and monitor the believes that bank holding companies should be conscious implementation by Citigroup of its proposed revisions to of and avoid abusive or deceptive lending practices. the Initiatives and all aspects of the Enhancements. In The Board has carefully considered all the comments addition, the Board will carefully review CitiFinancial's submitted on these matters, many of which concerned the compliance system, including changes to the system, as effectiveness of the Initiatives or their implementation. The part of the compliance portion of the Board's ongoing Board has considered Citigroup's implementation of the examinations of Citigroup. The Board also will take any Initiatives in light of the entire record. These matters are necessary supervisory action, including requiring Citithe subject of the ongoing examination, and the Board group to take appropriate additional steps, if the Initiatives believes that effective implementation of these Initiatives and Enhancements are not implemented effectively or the and the related comments can best be addressed through compliance systems are not adequate. the examination of CitiFinancial and CitiFinancial Mort- Other commenters criticized specific practices that were gage. The Board will review the information made avail- not addressed directly by the Initiatives, such as certain able by commenters in its examination as relevant and aspects of the insurance sales practices. Although these appropriate. comments expressed strong concerns, they generally pro- Based on the reports and information gathered to date in vided little direct information or provided anecdotal inforthe examination process, the Board believes that, although mation concerning isolated situations among the numerous the Initiatives have not yet fully achieved the goals ex- transactions conducted by Citigroup. Some of the compected, Citigroup has made substantial progress in imple- ments require additional investigation. The application promenting the Initiatives and continues its efforts to imple- cess is not well suited for this type of investigation, and the ment them. Importantly, Citigroup has also begun provisions of the BHC Act do not anticipate this type of implementing a variety of changes designed to improve the investigation in the applications process. Instead, the exameffectiveness of the Initiatives. For example, Citigroup has ination process and the related supervisory authority concommitted to revise the Initiatives, particularly the Referral ferred on the Board provide the most effective and appro- Programs, because experience in implementing the Initia- priate methods for investigating and resolving these issues. tives has indicated weaknesses in the original plan.72 In As noted above, the Board has determined to expand the addition, Citigroup has committed to make comprehensive examination process to review in particular the insurance changes in its insurance sales practices (the "Enhance- sales practices of CitiFinancial. ments") to address concerns regarding the completeness of its disclosures and the potential for coercive sales prac- 73. Some commenters expressed concerns about the adequacy of the Enhancements. 74. After a customer has been approved for a loan, CitiFinancial 71. Some commenters expressed concern that, in California and will initially present the costs and terms of the requested loan without North Carolina, Citigroup disproportionately located offices of its any optional insurance or similar products. CitiFinancial will then subprime lending subsidiaries in minority areas. The Board's review provide the customer with written materials on insurance and optional of the locations of CitiFinancial's branch offices does not support products and review such products with the customer. CitiFinancial these allegations. also will prepare and review with a customer pre- closing documents 72. For example, Citigroup has implemented and will continue to that inform the customer of the price and terms of the loan and implement certain changes and adjustments to the Referral Programs. monthly payments both without and with the purchase of insurance Citigroup has hired full-time program managers and assigned special- and optional products. Under the Enhancements, CitiFinancial will ized Citibank staff to administer and process the Referral Programs. In not prepare or present final loan documents and insurance or optional addition, Citigroup has expanded its customer service elforts to reach products documents until the customer affirmatively states a desire to purchase or decline the insurance and optional products. After the loan Referral Programs candidates by extending loan application hours and has been closed, CitiFinancial will provide customers with additional increasing the number of times CitiFinancial employees call those materials instructing them on how to cancel their purchase of the candidates to inform them about the program. Citigroup also has insurance and other optional products. Citigroup has committed to changed certain criteria for the Referral Programs to better match implement the Enhancements by the end of 2003. criteria used at Citigroup's prime lenders. 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Legal Developments 499 A number of comments also urged that the Board delay taken into account that Citigroup has shown a willingness to action until the completion of the examination. The Board address issues regarding its subprime lending activities. For believes that a completed examination is a particularly example, Citigroup has committed to make comprehensive important consideration because it represents a detailed enhancements to its insurance sales practices, as noted above. evaluation of an institution's actual performance. As a In addition, the Board has considered the nature of the matter of practice and policy, the Board has not, however, proposal in relation to Citigroup's subprime lending activitied consideration of an application or notice to the sched- ties. In particular, the Board has taken into account the fact uling or completion of an examination if the applicant has that the current proposed acquisition of Golden State and its an overall satisfactory record of performance and the issues subsidiaries, including Cal Fed, would not result in a signifibeing examined may be resolved in the examination and cant expansion of Citigroup's subprime lending activities.77 supervisory process.75 Importantly, this policy maintains For all the foregoing reasons, the Board does not believe the integrity of the examination process by allowing exam- that the Board's examination of the subprime lending activiners to complete their examination without regard to the ities of Citigroup warrants further delay or denial of this statutory and regulatory time limits imposed on the applica- proposal. The Board continues to believe that the effective tion process. To be effective and useful, an examination implementation of the Initiatives, the Enhancements, and that is underway during the application process must be other consumer protection measures proposed or adopted allowed to proceed at the pace required to complete an by Citigroup are particularly important for addressing informed review of all issues encountered in the process. In subprime lending concerns. The Board expects Citigroup addition, the scheduling, conduct, and completion of an to continue enhancing its implementation of these meaexamination is determined by the availability of resources sures, including those related to insurance sales practices of the banking agencies and is not related to the timing of and to providing creditworthy borrowers with access to acquisition proposals. prime rate loan products, as methods for helping to ensure As the Board has indicated previously, it has broad the success of Citigroup's original Initiatives and protectsupervisory authority under the banking laws to address ing against abusive lending practices. matters that are found in the examination process, includ- As noted in this order, the Board will continue to examing authority to enforce compliance with the fair lending ine the activities of CitiFinancial and CitiFinancial Mortand other applicable laws. Moreover, many issues are more gage and Citigroup's implementation of the Initiatives and appropriately and adequately addressed in the examination Enhancements, including CitiFinancial's compensation and process, where particular matters and violations of law compliance systems. To assist the Board in monitoring and may be identified and addressed specifically, than in the reviewing these matters, Citigroup must submit to the application process, which requires a weighing of the over- Board quarterly reports on the status and effectiveness of all record of the companies involved. its efforts to successfully complete implementation of the In reviewing this proposal, the Board has assembled and Initiatives and Enhancements. Beginning January 1, 2003, considered a broad and detailed record. The record in- Citigroup must submit these quarterly reports for two cludes substantial confidential and public information pro- years, or such longer time period as the Board, in its vided by Citigroup and the commenters. It also includes discretion, determines is necessary. The Board will take the results of completed examinations of the institutions appropriate supervisory action, if any, that is necessary to involved; information from the current examinations un- address deficiencies identified in the examinations and derway; consultations with other federal and state banking reports, including requiring additional revisions to the Initiauthorities; and consultations with the FTC, DOJ, HUD, atives and Enhancements if warranted. and other relevant regulators. Based on a careful review of this record, the Board believes that Citigroup has, on Financial, Managerial, and Other Supervisory Factors balance, a satisfactory overall record of compliance. The Board notes the recent settlement agreement be- In connection with its review of the public interest factors tween Citigroup and the FTC in connection with the law- under section 4 of the BHC Act, the Board has carefully suit filed by the FTC against Associates and Citigroup as considered the financial and managerial resources of Citithe successor owner of Associates.76 The Board also has a related matter, Citigroup has agreed to proved an additional 75. As the Board has previously noted, "the application/notice $25 million to settle claims of certain refinance customers of Associprocess should focus on an analysis of the effects of the specific ates brought in a separate class action suit. There has been no proposal and should not become a vehicle for comprehensively evalu- adjudication of wrongdoing or injunctive action taken against Citiating and addressing supervisory and compliance issues that can more group or any of its affiliates in connection with the FTC settlement or effectively be addressed in the supervisory process." See 62 Federal the class action settlement. Some commenters expressed concerns Register 9290 (1997) (Preamble to the Board's Regulation Y). about these settlements. The Board has forwarded these comments to 76. The consumer protection claims in the FTC's lawsuit alleged the FTC. that Associates, before its acquisition by Citigroup, engaged in abu- 77. Several commenters expressed concern that consummation of sive lending and insurance sales practices and lending law violations. this proposal would expand Citigroup's subprime lending activities in Under the terms of the settlement, Citigroup will provide $215 million LMI and minority communities in California. Cal Fed does not to consumers who bought credit insurance in connection with loans engage in subprime lending other than a limited amount of subprime made by Associates between December 1995 and November 2000. In auto lending. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

500 Federal Reserve Bulletin • December 2002 group and Golden State and their respective subsidiaries. group's management has failed to implement effective The Board also has reviewed the effect the transaction would policies and programs to address allegations of abusive have on those resources in light of all the facts of record.78 sales and lending practices of Citigroup's subsidiaries, In reviewing these factors, the Board has considered, including those engaged in subprime lending and related among other things, confidential reports of examination insurance activities.82 As previously discussed, the Board and other supervisory information received from the pri- is conducting a thorough examination of Citigroup's mary federal supervisors of the organizations involved and subprime lending activities at CitiFinancial and CitiFinanthe Federal Reserve System's confidential supervisory in- cial Mortgage. In addition, some commenters asserted that formation. In addition, the Board has consulted with the the Board should postpone consideration of the proposal in relevant supervisory agencies, including the OCC, OTS, light of investigations by Congress, federal and state agen- FDIC, FTC, and SEC. The Board also has considered cies, and self- regulatory organizations into certain investpublicly available financial and other information on the ment banking, investment advisory, foreign asset control, organizations and their subsidiaries, all the information currency trading, and corporate finance practices of Citisubmitted on the financial and managerial aspects of the group and its affiliates, and conduct its own inquiry into proposal by Citigroup, and information provided by com- these matters.83 menters about the financial and managerial resources of In addition, the Board has reviewed carefully Citi- Citigroup.79 group's role in the development of allegedly deceptive In evaluating financial factors in expansion proposals by banking organizations, the Board consistently has considered capital adequacy to be especially important. The pro- also received comments asserting that Citibank NA and other subsidiaries of Citigroup lack sufficient policies and procedures and other posed acquisition is structured as a partial cash purchase resources to protect against money laundering. The Board has reand partial stock exchange of Golden State's common viewed confidential supervisory information on the policies, procestock. Citigroup would not directly or indirectly incur any dures, and practices of Citigroup to comply with the Bank Secrecy debt to finance the proposed transaction. The Board notes Act and has consulted with the OCC, the appropriate federal financial supervisory agency of Citibank NA. that Citigroup and its subsidiary depository institutions and 82. Some commenters asserted that adverse managerial resources Cal Fed are well capitalized and would remain well capitalconsiderations are evidenced by the pending FTC lawsuit against ized on consummation of the proposal.80 Associates and Citigroup, as its successor owner. As discussed above, The Board also has considered the managerial resources Citigroup has entered into a settlement agreement with the FTC to of Citigroup and Golden State. In this regard, the Board resolve the FTC's lawsuit and announced important changes to CitiFinancial's insurance sales practices. has considered the supervisory experience and assessments 83. Commenters also expressed concern about the following matof management by the various bank supervisory agencies ters: and the organizations' records of compliance with applica- (1) Allegations of gender discrimination at Citigroup's securities ble banking law. The Board has carefully reviewed the affiliates, (2) The number of minorities represented in Citigroup's senior examination records of Citigroup and its subsidiary deposmanagement, itory institutions, including assessments of their risk man- (3) Allegations of wrongful termination of CitiFinancial employees, agement systems and other policies. The Board also has (4) Citigroup's financing of various activities and projects worldconsidered Citigroup's plans to implement the proposed wide that might damage the environment or cause other social acquisition, including its available managerial resources, harm, and (5) Citigroup's alleged opposition to legislation addressing credit and Citigroup's record of successfully integrating recently card disclosures and predatory lending. acquired institutions into its existing operations. These contentions and concerns are outside the limited statutory The Board received several comments on the proposal factors that the Board is authorized to consider when reviewing a criticizing the managerial resources of Citigroup and its notice under the BHC Act. See Western Bancshares, Inc. v. Board of subsidiaries.81 Several commenters asserted that Citi- Governors, 480 F.2d 749 (10th Cir. 1973). The Board also notes that the Equal Employment Opportunity Commission has jurisdiction to determine whether banking organizations like Citigroup are in compliance with federal equal employment opportunity statutes under the 78. See 12 C.F.R. 225.26. regulations of the Department of Labor. In addition, matters related to 79. The Board received a comment criticizing the adequacy of private employment are governed by state law. Moreover, the conten- Citigroup's management based on the manner in which its subsidiar- tions about alleged environmental or social harm resulting from ies handled loan or financial service transactions in individual cases. projects financed by Citigroup and Citigroup's opposition to new The Board also has considered these comments in reviewing Citi- legislation contain no allegations of illegality or actions that would group's CRA performance record in this case. affect the safety and soundness of the institutions involved in the 80. Several commenters alleged that Citigroup underreports delin- proposal. quencies in its subprime loan portfolio and urged the Board to require A commenter also cited press reports that numerous financial instian independent audit of Citigroup's subprime loan portfolio as a tutions, including Citigroup, had settled claims alleging violations of condition of approval of this transaction. The Board has reviewed consumer protection laws related to their arrangements with telemar- Citigroup's policies and procedures on reporting delinquencies and keting organizations for marketing nonfinancial products to consumlosses in its subprime lending portfolios, Citigroup's related credit ers, including a claim brought by the California Attorney General. procedures, and data on these portfolios and will continue to review Citigroup has settled the various lawsuits, and there has been no such data in connection with its supervisory examinations of Citi- adjudication of any violation of law by Citigroup in connection with group. these consumer law claims. Moreover, Citigroup has discontinued or 81. Some commenters cited press reports about the structured altered the marketing arrangements at issue and implemented various financing transactions and other securities-related matters. The Board changes in its consumer banking practices. 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Legal Developments 501 structured finance facilities. The Board also has reviewed access to an expanded branch and global ATM network and the alleged securities law violations stemming from poten- internet banking services, including branches in numerous tial conflicts of interests that could arise from the activities states where Cal Fed has no branches. Citigroup customers, in of Citigroup and its subsidiaries as investment banker, turn, would be able to take advantage of Cal Fed's extensive equity researcher, and investment advisor. Moreover, the branch network in Southern California, where Citigroup has a Board has considered Citigroup's efforts to address these limited number of branches. Based on all the facts of record, matters as they relate to the operation and management of the Board has determined that consummation of the proposal the organization. can reasonably be expected to produce public benefits that The Board is monitoring the various federal and state would outweigh any likely adverse effects under the standard investigations of Citigroup's securities-related activities of section 4(j)(2) of the BHC Act. that are being conducted by agencies and other authorities with jurisdiction over these matters and is consulting with Conclusion the SEC and other relevant authorities. The Board notes that Citigroup has demonstrated a willingness and ability Based on the foregoing and all the facts of record, the to take actions to address concerns raised in these investi- Board has determined that the notice should be, and hereby gations, including increasing corporate governance capa- is, approved.86 bilities, restructuring its investment banking operations, In reaching its conclusion, the Board has considered all and providing more stringent disclosure requirements for the facts of record in light of the factors that it is required structured finance clients. to consider under the BHC Act and other applicable stat- The Board has broad supervisory authority under the utes.87 The Board's approval is specifically conditioned on banking laws to require Citigroup to take steps necessary compliance by Citigroup with all the commitments made to address deficiencies identified in these investigations in connection with the notice and all the conditions in this and examinations of Citigroup's securities-related and other activities after these reviews have been completed.84 Based on these and all the facts of record, the Board 86. Several commenters requested that the Board hold public meetings or hearings on the proposal. Section 4 of the BHC Act and the concludes that the financial and managerial resources of Board's rules thereunder provide for a hearing on a notice to acquire the organizations involved in the proposal are consistent nonbanking companies if there are disputed issues of material fact that with approval under section 4 of the BHC Act. cannot be resolved in some other manner. 12 C.F.R. 225.25(a)(2). Under its rules, the Board also may, in its discretion, hold a public meeting or hearing if appropriate to allow interested persons an Other Considerations opportunity to provide relevant testimony when written comments would not adequately present the persons' views. The Board has As part of its evaluation of the public interest factors, the considered carefully these commenters' requests in light of all the Board also has carefully reviewed the other public benefits facts of record. As explained above, Board staff attended a formal and possible adverse effects of the proposal.85 The record meeting held by the OTS to clarify issues related to the notice and to provide the public an opportunity to testify. Fifteen commenters indicates that consummation of the proposal would result appeared and provided oral testimony at the formal meeting, including in benefits to consumers and businesses. The proposal elected representatives, municipal agencies, and members of commuwould enable Citigroup to provide customers of Golden nity groups from California, New York, and North Carolina. In State with access to a broader array of products and ser- addition, the public comment period provided more than 45 days for vices, including commercial and investment banking prod- interested persons to submit written comments on the proposal, and the Board received and considered written comments from approxiucts, in an expanded service area. Among the Citigroup mately 70 persons who did not testify at the formal meeting. In the products that would become available to customers of Cal Board's view, the public has had ample opportunity to submit com- Fed are products specifically designed for small- and ments on the proposal and, in fact, the commenters have submitted medium-sized businesses, trust and asset management ser- extensive written comments and testimony that the Board has considvices, and programs tailored to the Hispanic community, ered carefully in acting on the proposal. Commenters requesting public meetings failed to identify disputed issues of fact that are including additional international wire transfer and money material to the Board's decision that would be clarified by a public remittance services. Customers of Cal Fed would have meeting or hearing. In addition, commenters failed to demonstrate why their written comments did not adequately present their views, evidence, and allegations. They also have not shown why the formal meeting and 45-day public comment period did not provide an ade- 84. A commenter asserted that, in light of allegations about the quate opportunity for all interested parties to present their views and subprime lending activities, securities-related activities, and other concerns. For these reasons and based on all the facts of record, the banking services, the Board should find that Citigroup is not in Board has determined that a public meeting or hearing is not required compliance with the BHC Act's requirements for financial holding or warranted in this case. Accordingly, the requests for public meetcompanies. The Board notes that the requirements for financial hold- ings or hearings on the proposal are denied. ing company status are prescribed by statute and are met in this case. 87. A number of commenters requested that the Board delay action See 12 U.S.C. § 1843(1)(1)(B). or extend the comment period on the proposal. Moreover, several 85. A commenter claimed that, in light of allegations about Citi- commenters who participated at the meeting requested that the Board group's financial and managerial resources and the CRA performance extend the public comment period on the proposal until after certain records of Citigroup's affiliates, the Board should deny Citigroup's requested documents were publicly released. Several commenters also proposal because the proposed transaction cannot reasonably be ex- requested the Board to reconsider the decision by the Secretary of the pected to produce public benefits that would outweigh any likely Board, acting under delegated authority, not to extend the comment adverse effects. period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

502 Federal Reserve Bulletin • December 2002 order. The Board's determination also is subject to all the Appendix B conditions set forth in Regulation Y, including those in Market Data sections 225.7 and 225.25(c) (12C.F.R. 225.7 and California 225.25(c)), and to the Board's authority to require such Los Angeles Citigroup operates the tenth largest depository modification or termination of the activities of a bank institution in the market, controlling deposits of approximately $3 billion, representing approximately holding company or any of its subsidiaries as the Board 1.9 percent of market deposits. Golden State operates the eighth largest depository institution in the market, finds necessary to ensure compliance with, and to prevent controlling deposits of approximately $9.7 billion, evasion of, the provisions of the BHC Act and the Board's representing approximately 3 percent of market deposits. On consummation of the proposal, Citigroup regulations and orders thereunder. For purposes of this would operate the fourth largest depository institution action, the commitments and conditions relied on by the in the market, controlling deposits of $12.8 billion, representing approximately 7.6 percent of market Board in reaching its decision are deemed to be conditions deposits. One-hundred and forty-one depository institutions would remain in the market. The HHI imposed in writing by the Board in connection with its would not increase. findings and decision and, as such, may be enforced in proceedings under applicable law. San Francisco- Citigroup operates the sixth largest depository Oakland-San Jose institution in the market, controlling deposits of The transaction shall not be consummated later than approximately $4.7 billion, representing approximately 3.5 percent of market deposits. Golden State operates three months after the effective date of this order, unless the twelfth largest depository institution in the market, such period is extended for good cause by the Board or by controlling deposits of approximately $6.3 billion, representing approximately 2.3 percent of market the Federal Reserve Bank of New York, acting pursuant to deposits. On consummation, Citigroup would operate the third largest depository institution in the market, delegated authority. controlling deposits of $10.9 billion, representing By order of the Board of Governors, effective October approximately 7.9 percent of the market deposits. 28, 2002. Ninety depository institutions would remain in the banking market. The HHI would not increase. Nevada Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Gramlich, Bies, Olson, Bernanke, and Kohn. Las Vegas Citigroup operates the third largest depository institution in the market, controlling deposits of approximately $1.4 billion, representing approximately ROBERT DEV. FRIERSON 9.8 percent of market deposits. Golden State operates the tenth largest depository institution in the market, Deputy Secretary of the Board controlling deposits of approximately $504.6 million, representing approximately 1.8 percent of market deposits. On consummation of the proposal, Citigroup would continue to operate the third largest depository institution in the market, controlling deposits of Appendix A approximately $1.9 billion, representing approximately 13.1 percent of market deposits. Thirty-four depository Banking Markets in which Citigroup Competes Directly with institutions would remain in market. The HHI would Golden State increase by 23 points to 1548. California Banking Markets Appendix C Los Angeles Los Angeles Ranally Metro Area ("RMA") and the CRA Performance Evaluations of Citigroup towns of Acton, Rancho Santa Margarita, and Rosamond. Subsidiary Depository CRA Institution Rating Date Agency San Francisco- San Francisco-Oakland-San Jose RMA and the towns Oakland-San Jose of Byron, Hollister, San Juan Bautista, Pescadero, and 1. Citibank Federal OOuuttssttaannddiinngg October 15, 2001 OTS Point Reyes Station. Savings Bank, San Francisco, California Nevada Banking 2. Citicorp Trust Bank, Outstanding February 5, 2001 OTS Markets FSB (formerly Travelers Bank & Trust, FSB), Las Vegas Las Vegas RMA. Newark, Delaware 3. Citibank, N.A., New SSaattiissffaaccttoorryy October 16, 2000 OCC York, New York 4. Citibank Delaware, New SSaattiissffaaccttoorryy MMaayy 1155,, 22000000 FDIC Castle, Delaware The Board has accumulated a significant record in this case, includ- 5. Citibank (New York OOuuttssttaannddiinngg March 6, 2000 FDIC ing reports of examination, confidential supervisory information, pub- State), Pittsford, New York lic reports and information, and considerable public comment. As 6. California Commerce OOuuttssttaannddiinngg May 15, 2002 FDIC noted above, Board staff participated in a formal meeting on July 8 Bank, Century City, and extended the initial 30-day comment period to 45 days for California participants at the meeting. During this comment period, a substantial 7. Associates Capital Bank Outstanding September 27, 1999 FDIC Inc., Salt Lake City, number of commenters provided timely information and views to the Utah Board. In the Board's view, for the reasons discussed above, com- 8. Citibank (South Dakota), Outstanding May 24, 1999 OCC menters have had ample opportunity to submit their views and, in fact, N.A., Sioux Falls, South have provided substantial written submissions that the Board has Dakota 9. Citibank USA, N.A. Satisfactory April 19, 2002 FDIC considered carefully in acting on the proposal. Moreover, the BHC (formerly Hurley State Act and Regulation Y require the Board to act on proposals submitted Bank), Sioux Falls, under their provisions within certain time periods. Based on a review South Dakota of all the facts of record, the Board has concluded that the record in 10. Universal Financial Outstanding July 2, 2002 FDIC Corporation, Salt Lake this case is sufficient to warrant action at this time, and that a further City, Utah delay in considering the proposal, a further extension of the comment 11. Citibank (Nevada), Outstanding March 29, 1999 OCC period, or a denial of the proposal on the grounds discussed above or N.A., Las Vegas, on the basis of informational insufficiency is not warranted. Nevada Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 503 ORDERS ISSUED UNDER INTERNATIONAL BANKING gard, in the case of an application to establish a representa- ACT tive office, the standard with respect to home country supervision would be met if the applicant bank is subject to China Merchants Bank a supervisory framework that is consistent with the activi- Shenzhen, People's Republic of China ties of the proposed office, taking into account the nature of the activities and the operating record of the applicant. Order Approving Establishment of a Representative (12 C.F.R. 211.24(d)(2)). The Board may take into account Office additional standards set forth in the IBA and Regulation K 12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)). China Merchants Bank ("Bank"), Shenzhen, People's Re- As noted above, Bank engages directly in the business of public of China, a foreign bank within the meaning of the banking outside the United States. Bank also has provided International Banking Act ("IBA"), has applied under sec- the Board with information necessary to assess the application 10(a) of the IBA (12 U.S.C. § 3107(a)) to establish a tion through submissions that address the relevant issues. representative office in New York, New York. The Foreign With respect to supervision by home country authorities, Bank Supervision Enhancement Act of 1991, which the Board has considered the following information. The amended the IBA, provides that a foreign bank must obtain People's Bank of China ("PBOC") is the licensing, regulathe approval of the Board to establish a representative tory, and supervisory authority for banks and all other office in the United States. financial institutions in China, and, as such, is the home Notice of the application, affording interested persons an country supervisor of Bank. The PBOC has pursued a opportunity to submit comments, has been published in a program of reforms intended to enhance bank supervision, newspaper of general circulation in New York, New York strengthen management of banks, reduce accumulation of CThe New York Post, August 16, 2002). The time for filing nonperforming loans, further tighten risk management, and comments has expired, and all comments have been con- promote use of international accounting standards. The sidered. PBOC authorizes the establishment of offices of banks Bank, with total consolidated assets of approximately outside China, regulates these offices, and has taken steps $38.1 billion,1 is a commercial bank offering retail and to implement annual on-site examinations of all foreign wholesale banking services throughout China. China Steam offices of Chinese banks. Navigation Co., Ltd., Beijing, People's Republic of China, The Board previously has determined, in connection which owns approximately 23.7 percent of Bank, is Bank's with applications involving other banks from China, that largest shareholder. No other shareholder directly or indi- those banks were subject to a significant degree of supervirectly owns 10 percent or more of Bank's shares. Bank sion by the PBOC.3 Bank is supervised by the PBOC on currently conducts no activities in the United States. substantially the same terms and conditions as those other The proposed representative office is intended to pro- Chinese banks. Based on all the facts of record, it has been mote Bank's products and services to existing and poten- determined that factors relating to the supervision of Bank tial customers in the United States. It would conduct re- by its home country supervisor are consistent with apsearch, act as a liaison with customers and correspondents proval of the proposed representative office. of Bank, solicit loans, execute loan documents, and solicit The additional standards set forth in section 7 of the IBA purchasers of loans and parties to contract for the servicing and Regulation K (see 12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. of loans. All decisions on credit extended by Bank would 211.24(c)(2)) have also been taken into account. The PBOC be made at the head office. has no objection to the establishment of the proposed In acting on an application to establish a representative representative office. office, the IBA and Regulation K provide that the Board With respect to the financial and managerial resources of shall take into account whether the foreign bank engages Bank, taking into consideration Bank's record of operadirectly in the business of banking outside of the United tions in its home country, its overall financial resources, States and has furnished to the Board the information it and its standing with its home country supervisor, financial needs to assess the application adequately. The Board also and managerial factors are consistent with approval of the shall take into account whether the foreign bank and any foreign bank parent is subject to comprehensive supervision or regulation on a consolidated basis by its home (iii) Obtain information on the dealings with and relationship becountry supervisor (12 U.S.C. § 3107(a)(2)).2 In this re- tween the bank and its affiliates, both foreign and domestic; (iv) Receive from the bank financial reports that are consolidated on a worldwide basis or comparable information that permits analysis of the bank's financial condition on a worldwide consolidated 1. Unless otherwise indicated, data are as of June 30, 2002. basis; 2. In assessing this standard, the Board considers, among other (v) Evaluate prudential standards, such as capital adequacy and factors, the extent to which the home country supervisors: risk asset exposure, on a worldwide basis. These are indicia of (i) Ensure that the bank has adequate procedures for monitoring comprehensive, consolidated supervision. No single factor is essenand controlling its activities worldwide; tial, and other elements may inform the Board's determination. (ii) Obtain information on the condition of the bank and its subsid- 3. See Agricultural Bank of China, 83 Federal Reserve Bulletin 617 iaries and offices through regular examination reports, audit reports, (1997); Industrial and Commercial Bank of China, 83 Federal Reor otherwise; serve Bulletin 212 (1997). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

504 Federal Reserve Bulletin • December 2002 proposed representative office. Bank appears to have the commitments and conditions referred to above are condiexperience and capacity to support the proposed represen- tions imposed in writing by the Board in connection with tative office and has established controls and procedures its decision and may be enforced in proceedings against for the proposed representative office to ensure compliance Bank and its affiliates under 12 U.S.C. § 1818. with U.S. law. By order, approved pursuant to authority delegated by Money laundering is a criminal offense in China and the Board, effective October 22, 2002. banks are required to establish internal policies and procedures for the detection and prevention of money launder- ROBERT DEV. FRIERSON ing. PBOC regulations require banks to adopt know-your- Deputy Secretary of the Board customer policies, report suspicious transactions, and maintain an effective recordkeeping system. Additionally, the Eurohypo Aktiengesellschaft PBOC has established an Anti-Money Laundering Office, Frankfurt, Germany which is responsible for coordinating the anti-money laundering efforts of banks and law enforcement. This office Order Approving Establishment of a Branch and may also coordinate and communicate with foreign agen- Representative Offices cies established to prevent money laundering. With respect to access to information on Bank's opera- Eurohypo Aktiengesellschaft ("Bank"), Frankfurt, Gertions, the restrictions on disclosure in relevant jurisdictions many, a foreign bank within the meaning of the Internain which Bank operates have been reviewed and relevant tional Banking Act ("IBA"), has applied under sections 7(d) government authorities have been communicated with re- and 10(a) of the IBA (respectively, 12 U.S.C. §§ 3105(d) and garding access to information. Bank has committed to 3107(a)) to establish a branch in New York, New York, and make available to the Board such information on the oper- representative offices in Chicago, Illinois, and Los Angeles, ations of Bank and any of its affiliates that the Board deems California. The Foreign Bank Supervision Enhancement Act necessary to determine and enforce compliance with the of 1991, which amended the IBA, provides that a foreign IB A, the Bank Holding Company Act of 1956, as amended, bank must obtain the approval of the Board to establish a and other applicable federal law. To the extent that the branch or representative office in the United States. provision of such information to the Board may be prohib- Notice of the application, affording interested persons an ited by law or otherwise, Bank has committed to cooperate opportunity to submit comments, has been published in with the Board to obtain any necessary consents or waivers newspapers of general circulation in New York, New York that might be required from third parties for disclosure of (New York Times, July 1, 2002); Chicago, Illinois (Chicago such information. In addition, subject to certain conditions, Tribune, July 1, 2002); and Los Angeles, California the PBOC may share information on Bank's operations (Los Angeles Times, July 1, 2002). The time for filing comwith other supervisors, including the Board. In light of ments has expired, and all comments have been considered. these commitments and other facts of record, and subject to Bank, with total consolidated assets of approximately the condition described below, it has been determined that $242 billion,1 is the largest mortgage bank and the ninth Bank has provided adequate assurances of access to any largest bank in Germany.2 Bank primarily engages in real necessary information that the Board may request. estate and public sector financing activities. It also offers a On the basis of all the facts of record, and subject to the range of commercial banking services. Bank operates ten commitments made by Bank and the terms and conditions offices in Germany, as well as offices in other countries in set forth in this order, Bank's application to establish the Europe. On establishment of the proposed branch, Bank representative office is hereby approved.4 Should any re- would be a qualifying foreign banking organization within strictions on access to information on the operations or the meaning of Regulation K (12 C.F.R. 211.23(b)). activities of Bank or any of its affiliates subsequently The proposed branch would offer a range of real estate interfere with the Board's ability to obtain information to finance products and advice. The proposed representative determine and enforce compliance by Bank or its affiliates offices would market the products and services of the with applicable federal statutes, the Board may require or proposed branch and otherwise support its activities. recommend termination of any of Bank's direct and indi- In order to approve an application by a foreign bank to rect activities in the United States. Approval of this appli- establish a branch or representative office in the United cation also is specifically conditioned on compliance by Bank with the commitments made in connection with this application and with the conditions in this order.5 The State of New York or its agent, the New York State Banking Department ("Department"), to license the proposed office of Bank in accordance with any terms or conditions that the Department may impose. 4. Approved by the Director of the Division of Banking Supervision and Regulation, with the concurrence of the General Counsel, pursu- 1. Unless otherwise indicated, data are as of June 30, 2002. ant to authority delegated by the Board. See 12 C.F.R. 265.7(d)(12). 2. Bank was formed in mid-2002 through the merger of the German 5. The Board's authority to approve the establishment of the pro- mortgage bank subsidiaries of Deutsche Bank AG, Dresdner Bank posed representative office parallels the continuing authority of the AG, and Commerzbank AG, all foreign banks with significant U.S. State of New York to license offices of a foreign bank. The Board's operations. Deutsche Bank, Dresdner Bank, and Commerzbank reapproval of this application does not supplant the authority of the spectively own 35.9, 29.1, and 35 percent of Bank's voting shares. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 505 States, the IBA and Regulation K require the Board to 12 C.F.R. 211.24(c)(2)) have also been taken into account. determine that the foreign bank applicant engages directly The German Financial Supervisory Agency has no objecin the business of banking outside of the United States, and tion to the establishment of the proposed offices. has furnished to the Board the information it needs to Germany's risk-based capital standards are consistent assess the application adequately. The Board also shall take with those established by the Basel Capital Accord. Bank's into account whether the foreign bank and any foreign capital is in excess of the minimum levels that would be bank parent is subject to comprehensive supervision or required by the Basel Capital Accord and is considered regulation on a consolidated basis by its home country super- equivalent to capital that would be required of a U.S. visor (12 U.S.C. §§3105(d)(2) & 3107(a)(2); 12(a)(2); banking organization. Managerial and other financial re- 12 C.F.R. 211.24).3 The Board may also take into account sources of Bank also are considered consistent with approval, additional standards as set forth in the IBA and Regulation and Bank appears to have the experience and capacity to K (12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)-(3)). support the proposed branch. In addition, Bank has estab- As noted above, Bank engages directly in the business of lished controls and procedures for the proposed branch to banking outside the United States. Bank also has provided ensure compliance with U.S. law, as well as controls and the Board with information necessary to assess the applica- procedures for its worldwide operations generally. tion through submissions that address the relevant issues. Germany is a member of the Financial Action Task With respect to supervision by home country authorities, Force and subscribes to its recommendations regarding the Board previously has determined, in connection with measures to combat money laundering. In accordance with applications involving other German banks, including these recommendations, Germany has enacted laws and Deutsche Hyp (one of Bank's predecessors), Deutsche created legislative and regulatory standards to deter money Bank, Dresdner Bank, and Commerzbank, that those banks laundering. Money laundering is a criminal offense in Gerwere subject to home country supervision on a consoli- many, and credit institutions are required to establish internal dated basis.4 Bank is supervised by the German Financial policies and procedures for the detection and prevention of Supervisory Agency on substantially the same terms and money laundering. Bank has established policies and proconditions as those other German banks.5 Based on all the cedures to ensure compliance with these requirements. facts of record, it has been determined that Bank is, and With respect to access to information on Bank's opera- Bank's foreign bank parents continue to be, subject to tions, the restrictions on disclosure in relevant jurisdictions comprehensive supervision and regulation on a consoli- in which Bank operates have been reviewed and relevant dated basis by their home country supervisor. government authorities have been communicated with re- The additional standards set forth in section 7 of the IBA garding access to information. Bank and its parents have and Regulation K (see 12 U.S.C. § 3105(d)(3)-(4); committed to make available to the Board such information on the operations of Bank and any of their affiliates that the Board deems necessary to determine and enforce 3. In assessing this standard, the Board considers, among other compliance with the IBA, the Bank Holding Company Act factors, the extent to which the home country supervisors: of 1956, as amended, and other applicable federal law. To (i) Ensure that the bank has adequate procedures for monitoring and controlling its activities worldwide; the extent that the provision of such information to the (ii) Obtain information on the condition of the bank and its subsid- Board may be prohibited by law or otherwise, Bank and its iaries and offices through regular examination reports, audit reports, parents have committed to cooperate with the Board to or otherwise; obtain any necessary consents or waivers that might be (iii) Obtain information on the dealings with and relationship berequired from third parties for disclosure of such informatween the bank and its affiliates, both foreign and domestic; (iv) Receive from the bank financial reports that are consolidated on a tion. In addition, subject to certain conditions, the German worldwide basis or comparable information that permits analysis of the Financial Supervisory Agency may share information on bank's financial condition on a worldwide consolidated basis; Bank's operations with other supervisors, including the (v) Evaluate prudential standards, such as capital adequacy and Board. In light of these commitments and other facts of risk asset exposure, on a worldwide basis. These are indicia of comprehensive, consolidated supervision. No single factor is essen- record, and subject to the condition described below, it has tial, and other elements may inform the Board's determination. been determined that Bank has provided adequate assur- 4. See Landesbank Schleswig-Holstein Girozentrale, 88 Federal ances of access to any necessary information that the Reserve Bulletin 399 (2002); Hamburgische Landesbank Girozen- Board may request. trale, 88 Federal Reserve Bulletin 397 (2002); Allgemeine Hypothek- On the basis of all the facts of record, and subject to the enBank Rheinboden AG, 88 Federal Reserve Bulletin 196 (2002); DePfa Bank AG, 87 Federal Reserve Bulletin 710 (2001); RHEINHYP commitments made by Bank and its parents, and the terms Rheinische Hypothekenbank AG, 87 Federal Reserve Bulletin 558 and conditions set forth in this order, Bank's application to (2001); Deutsche Hyp Deutsche Hypothekenbank, 86 Federal Reserve establish the branch and representative offices is hereby Bulletin 658 (2000); Deutsche Bank AG, 85 Federal Reserve Bulletin approved.6 If any restrictions on access to information on 509 (1999); Westdeutsche ImmobilienBank, 85 Federal Reserve Bulletin 346 (1999); Commerzbank AG, 85 Federal Reserve Bulletin 336 the operations or activities of Bank or any of its affiliates (1999); West Merchant Bank Limited, 81 Federal Reserve Bulletin 519 (1995). 5. On May 1, 2002, the German Federal Banking Supervisory Office merged with the Federal Insurance Supervisory Office and the Securi- 6. Approved by the Director of the Division of Banking Supervision ties Supervisory Office to create a single cross-sector structure for and Regulation, with the concurrence of the General Counsel, pursufinancial supervision. ant to authority delegated by the Board. See 12 C.F.R. 265.7(d)(12). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

506 Federal Reserve Bulletin • December 2002 subsequently interfere with the Board's ability to obtain services, including retail, merchant, and private banking as information to determine and enforce compliance by Bank well as asset management. or its affiliates with applicable federal statutes, the Board The Fortis Group currently has no banking operations in may require or recommend termination of any of Bank's the United States, but engages through nonbank subsidiardirect and indirect activities in the United States. Approval ies in a broad range of financial activities, including insurof this application also is specifically conditioned on com- ance activities.2 pliance by Bank and its parents with the commitments The proposed New York branch would engage in deposit made in connection with this application and with the taking, lending, foreign exchange activities, certain derivaconditions in this order.7 The commitments and conditions tives transactions, and securities investment activities. The referred to above are conditions imposed in writing by the proposed Connecticut branch would engage in lending and Board in connection with its decision and may be enforced other financing activities and would not take any deposits in proceedings against Bank and its affiliates under other than those permitted for a corporation organized 12 U.S.C. § 1818. under section 25A of the Federal Reserve Act. By order, approved pursuant to authority delegated by In order to approve an application by a foreign bank to the Board, effective October 8, 2002. establish a branch in the United States, the IBA and Regulation K require the Board to determine that the foreign ROBERT DEV. FRIERSON bank applicant engages directly in the business of banking Deputy Secretary of the Board outside of the United States, and has furnished to the Board the information it needs to assess the application ade- Fortis Bank S.A./N. V. quately. The Board also shall take into account whether the Brussels, Belgium foreign bank and any foreign bank parent is subject to comprehensive supervision or regulation on a consolidated Order Approving Establishment of Branches basis by its home country supervisor (12 U.S.C. § 3105(d)(2) § 3107(a)(2); 12 C.F.R. 211.24).3 The Board Fortis Bank S.A./N.V. ("Bank"), Brussels, Belgium, a may also take into account additional standards as set forth foreign bank within the meaning of the International Bankin the IBA and Regulation K (12 U.S.C. § 3105(d)(3)-(4); ing Act ("IBA"), has applied under section 7(d) of the IBA 12 C.F.R. 211.24(c)(2)-(3)). (12 U.S.C. § 3105(d)) to establish branches in New York, As noted above, Bank engages directly in the business of New York, and Stamford, Connecticut. The Foreign Bank banking outside the United States. Bank also has provided Supervision Enhancement Act of 1991, which amended the the Board with information necessary to assess the applica- IBA, provides that a foreign bank must obtain the approval tion through submissions that address the relevant issues. of the Board to establish a branch in the United States. With respect to supervision by home country authorities, Notice of the application, affording interested persons an the Board previously has determined, in connection with opportunity to comment, has been published in newspapers applications involving other banks in Belgium, that those of general circulation in New York, New York (Daily banks were subject to home country supervision on a News, April 24, 2002), and Stamford, Connecticut (The consolidated basis.4 Bank is supervised by the Belgian Advocate, April 24, 2002). The time for filing comments has expired, and all comments have been considered. Bank, with total assets of $329 billion, is the largest bank in Belgium.1 Bank is a subsidiary of Fortis Brussels 2. Bank and its parent companies have elected to be treated as S.A./N.V. ("Fortis Brussels"), Brussels, Belgium, which financial holding companies by filing a declaration in connection with holds 99.7 percent of Bank's shares. Fortis Brussels is Bank's application to establish banking offices in the United States. 3. In assessing this standard, the Board considers, among other 50-percent-owned by Fortis S.A./N.V, Brussels, Belgium, factors, the extent to which the home country supervisors: and 50-percent-owned by Fortis N.V., Utrecht, Nether- (i) Ensure that the bank has adequate procedures for monitoring lands. The Fortis Group, which consists of Fortis S.A./N.V. and controlling its activities worldwide; and Fortis N.V. and the group of companies owned and/or (ii) Obtain information on the condition of the bank and its subsidiaries and offices through regular examination reports, audit reports, controlled by them, is primarily engaged in banking, insuror otherwise; ance, and investment and has operations throughout the (iii) Obtain information on the dealings with and relationship beworld. Virtually all of the banking operations of the group tween the bank and its affiliates, both foreign and domestic; are conducted by Bank and its direct and indirect subsidiar- (iv) Receive from the bank financial reports that are consolidated ies. Bank provides a wide range of financial products and on a worldwide basis or comparable information that permits analysis of the bank's financial condition on a worldwide consolidated basis; (v) Evaluate prudential standards, such as capital adequacy and 7. The authority to approve the establishment of the branch and risk asset exposure, on a worldwide basis. These are indicia of representative offices parallels the authority of the States of New comprehensive, consolidated supervision. No single factor is essen- York, Illinois, and California to license offices of a foreign bank. The tial, and other elements may inform the Board's determination. approval of this application does not supplant the authority of those 4. See Artesia Banking Corporation, 88 Federal Reserve Bulletin states or their agents to license the offices of Bank in accordance with 253 (2002); Dexia Project and Public Finance International Bank, 86 any terms or conditions that they may impose. Federal Reserve Bulletin 289 (2000); KBC Bank, N.V., 85 Federal Reserve Bulletin 832 (1999); Credit Communal de Belgique, 82 Fed- 1. Asset data are as of December 31, 2001. eral Reserve Bulletin 104 (1996). See also footnote 5. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 507 Banking and Finance Commission on substantially the ties regarding access to information. Bank and its ultimate same terms and conditions as those other banks. Based on parents have committed to make available to the Board all the facts of record, it has been determined that Bank is such information on the operations of Bank and any of its subject to comprehensive supervision on a consolidated affiliates that the Board deems necessary to determine and basis by its home country supervisor.5 enforce compliance with the IBA, the Bank Holding Com- The Board has also taken into account the additional pany Act, and other applicable federal law. To the extent standards set forth in section 7 of the IBA and Regulation K that the provision of such information to the Board may be (see 12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)-(3)). prohibited by law or otherwise, Bank and its ultimate The Belgian Banking and Finance Commission has no parents have committed to cooperate with the Board to objection to the establishment of the proposed branches. obtain any necessary consents or waivers that might be Belgium's risk-based capital standards conform to the required from third parties for disclosure of such informa- European Union capital standards, which are consistent tion. In addition, subject to certain conditions, the Belgian with those established by the Basel Capital Accord. Bank's Banking and Finance Commission may share information capital is in excess of the minimum levels that would be on Bank's operations with other supervisors, including the required by the Basel Capital Accord and is considered Board. In light of these commitments and other facts of equivalent to capital that would be required of a U.S. record, and subject to the condition described below, it has banking organization. Managerial and other financial re- been determined that Bank has provided adequate assursources of Bank also are considered consistent with ap- ances of access to any necessary information that the proval, and Bank appears to have the experience and Board may request. capacity to support the proposed branches. In addition, On the basis of all the facts of record, and subject to the Bank has established controls and procedures for the pro- commitments made by Bank, as well as the terms and posed branches to ensure compliance with U.S. law, as well conditions set forth in this order, Bank's application to as controls and procedures for its worldwide operations establish branches is hereby approved.6 Should any restricgenerally. tions on access to information on the operations or activi- Belgium is a member of the Financial Action Task Force ties of Bank and its affiliates subsequently interfere with and subscribes to its recommendations on measures to the Board's ability to obtain information to determine and combat money laundering. In accordance with these rec- enforce compliance by Bank or its affiliates with applicable ommendations, Belgium has enacted laws and created leg- federal statutes, the Board may require termination of any islative and regulatory standards to deter money launder- of Bank's direct or indirect activities in the United States. ing. Money laundering is a criminal offense in Belgium, Approval of this application also is specifically conditioned and financial institutions are required to establish internal on compliance by Bank with the commitments made in policies, procedures, and systems for the detection and connection with this application and with the conditions in prevention of money laundering throughout their world- this order.7 The commitments and conditions referred to wide operations. Bank has policies and procedures to com- above are conditions imposed in writing by the Board in ply with these laws and regulations. Bank's compliance connection with its decision and may be enforced in prowith applicable laws and regulations is monitored by the ceedings under 12 U.S.C. § 1818 against Bank and its affil- Belgian Banking and Finance Commission and Bank's iates. internal and external auditors. By order, approved pursuant to authority delegated by With respect to access to information about Bank's the Board, effective October 8, 2002. operations, the Board has reviewed the restrictions on disclosure in relevant jurisdictions in which Bank operates ROBERT DEV. FRIERSON and has communicated with relevant government authori- Deputy Secretary of the Board 5. In reaching this view, the oversight of the Fortis Group as a 6. Approved by the Director of the Division of Banking Supervision whole has been considered. Under an agreement to coordinate the and Regulation, with the concurrence of the General Counsel, pursuexercise of their respective supervisory powers, the banking and ant to authority delegated by the Board. insurance supervisory authorities in Belgium and the Netherlands 7. The Board's authority to approve the establishment of the prohave designated the Belgian Banking and Finance Commission as the posed branches parallels the continuing authority of the States of supervisory coordination authority for the entire Fortis Group. The Connecticut and New York to license offices of a foreign bank. The banking regulators in Belgium, the Netherlands, and Luxembourg Board's approval of this application does not supplant the authority of have also entered into a memorandum of understanding to cooperate the State of Connecticut Department of Banking and the New York with each other in the consolidated supervision of the banking activi- State Banking Department to license the proposed offices of Bank in ties of the Fortis Group. accordance with any terms or conditions that they may impose. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

508 Federal Reserve Bulletin • December 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 Allegheny Bancshares, Inc., Pendleton County Bank, Richmond October 10, 2002 Franklin, West Virginia Franklin, West Virginia Banknorth Group, Inc., Warren Bancorp, Inc., Boston September 19, 2002 Portland, Maine Warren Five Cents Savings Bank, Peabody, Massachusetts Beltline Bancshares, Inc., Security Bank, National Association, Dallas October 22, 2002 Garland, Texas Garland, Texas Security Bank Holding Company, Wilmington, Delaware Capital Bank Corporation, High Street Corporation, Richmond September 27, 2002 Raleigh, North Carolina Asheville, North Carolina Commerce Bancshares, Inc., The Bank of Commerce, Atlanta October 21, 2002 White Castle, Louisiana White Castle, Louisiana Commerce Holding Corporation, Commerce National Bank, St. Louis October 25, 2002 Corinth, Mississippi Corinth, Mississippi Cypress Bankshares, Inc., Cypress Bank, Atlanta October 3, 2002 Palm Coast, Florida Palm Coast, Florida Fidelity Company, Worthington Bancorporation, Chicago October 22, 2002 Dyersville, Iowa Worthington, Iowa State Bank, Worthington, Iowa Financial Corporation of Louisiana, Security Acadia Bancshares, Inc., Atlanta October 11, 2002 Crowley, Louisiana Rayne, Louisiana Rayne State Bank and Trust Company, Rayne, Louisiana Franklin Bancorp, Inc., Franklin Bank, National Association, Chicago October 8, 2002 Southfield, Michigan Southfield, Michigan Greater Sacramento Bancorp, Bank of Sacramento, San Francisco October 10, 2002 Sacramento, California Sacramento, California IB Bancshares, Inc., Independent Bank, Dallas October 29, 2002 McKinney, Texas McKinney, Texas VB Bancshares, Inc., Wilmington, Delaware JCO Ventures, LLC, Richmond October 22, 2002 Union, South Carolina JCO Partners, L.P., Union, South Carolina JCO Partners II, L.P, Union, South Carolina HAO Partners, L.P, Union, South Carolina HAO Partners II, L.P, Union, South Carolina HAO Management Company, LLC, Union, South Carolina FOJ Partners, L.P, Union, South Carolina FOJ Partners, II, L.P, Union, South Carolina Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 509 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date FOJ Management Company, LLC, Union, South Carolina Frances W. Arthur Irrevocable Trust No. 2 for the Benefit of Frances Oxner Jorgenson, Union, South Carolina Arthur State Bancshares, Inc., Union, South Carolina Chesnee State Bancshares, Inc., Chesnee, South Carolina Woodruff State Bancshares, Inc., Woodruff, South Carolina Kilmichael Bancorp., Inc., Bank of Kilmichael, St. Louis October 8, 2002 Kilmichael, Mississippi Kilmichael, Mississippi Linn Holding Company, South Gasconade Investment St. Louis September 27, 2002 Linn, Missouri Corporation, Owensville, Missouri Chester 1 Bank, Owensville, Missouri Local Financial Corporation, Citizens Financial Corp., Kansas City October 25, 2002 Oklahoma City, Oklahoma Midwest City, Oklahoma Local Oklahoma Bank, N.A., U.S. National Bank, Oklahoma City, Oklahoma Midwest City, Oklahoma Marquette Financial Companies, CBA Bancshares, Inc., Minneapolis September 26, 2002 Minneapolis, Minnesota Minneapolis, Minnesota Community Bank of Arizona, N.A. Wickenburg, Arizona Merchants and Manufacturers Fortress Bancshares, Inc., Chicago October 7, 2002 Bancorporation Inc., Westby, Wisconsin New Berlin, Wisconsin Fortress Holdings, Inc., Merchants Merger Corp., Westby, Wisconsin New Berlin, Wisconsin Fortress Bank of Westby, Westby, Wisconsin Fortress Bank of Cresco, Cresco, Iowa Fortress, Bank, NA, Houston, Minnesota Putnam-Greene Financial The Citizens Bank of Cochran, Atlanta October 28, 2002 Corporation, Cochran, Georgia Eatonton, Georgia Resource Bankshares, Inc., Resource Bank, Atlanta September 30, 2002 Mandeville, Louisiana Mandeville, Louisiana SCB Bancorp, Inc., Summit Community Bank, Chicago October 18, 2002 East Lansing, Michigan East Lansing, Michigan Summit Bancshares, Inc., Summit Bank, Kansas City October 11, 2002 Prescott, Arizona Prescott, Arizona Texas Regional Bancshares, Inc., San Juan Bancshares, Inc., Dallas October 10, 2002 McAllen, Texas San Juan, Texas Texas Regional Delaware, Inc., San Juan Delaware Financial Wilmington, Delaware Corporation, Dover, Delaware Texas Country Bank, San Juan, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

510 Federal Reserve Bulletin • December 2002 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Valley Commerce Bancorp, Bank of Visalia, San Francisco September 30, 2002 Visalia, California Visalia, California Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date CIB Marine Bancshares, Inc., ComCor Mortgage Corporation, Chicago October 30, 2002 Pewaukee, Wisconsin Waukesha, Wisconsin Mortgage Services, Inc., Bloomington, Illinois Crystal Valley Financial Pedcor Investments-2001-Ll L.P., Chicago October 30, 2002 Corporation, Middlebury, Indiana Middlebury, Indiana First Banks, Inc., Allegiant Bancorp, Inc., St. Louis October 22, 2002 St. Louis, Missouri St. Louis, Missouri Four Oaks Fincorp, Inc., Four Oaks Mortgage Services, L.L.C., Richmond October 30, 2002 Four Oaks, North Carolina Four Oaks, North Carolina Gold Banc Corporation, Inc., George K. Baum Trust Company, Kansas City October 22, 2002 Leawood, Kansas Kansas City, Missouri Salin Bancshares, Inc., Blue River Federal Savings Bank, Chicago October 18, 2002 Indianapolis, Indiana Edinburgh, Indiana Sections 3 and 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Sumitomo Mitsui Financial Group, Sumitomo Mitsui Banking Corporation, San Francisco October 9, 2002 Inc., Tokyo, Japan Tokyo, Japan Manufacturers Bank, Los Angeles, California APPLICATIONS APPROVED UNDER BANK MERGER ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Applicant(s) Bank(s) Reserve Bank Effective Date Blue River Federal Savings Bank, Salin Bank and Trust Company, Chicago October 18, 2002 Edinburgh, Indiana Indianapolis, Indiana CornerStone State Bank, First National Bank of the North, Minneapolis September 30, 2002 Le Sueur, Minnesota Sandstone, Minnesota First Bank of Medicine Lodge, INTRUST Bank, NA, Kansas City September 27, 2002 Medicine Lodge, Kansas Wichita, Kansas The Fuji Bank and Trust Company, Industrial Bank of Japan Trust New York October 11, 2002 New York, New York Company, New York, New York Heritage Bank of Commerce, Bank of Los Altos, San Francisco October 7, 2002 San Jose, California Los Altos, California Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 511 Applications Approved Under Bank Merger Act—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Heritage Bank of Commerce, Heritage Bank East Bay, San Francisco October 3, 2002 San Jose, California Fremont, California Sand Ridge Bank, The Bright National Bank, Cleveland October 22, 2002 Highland, Indiana Flora, Indiana Sand Ridge Bank, The National Bank of Hastings, Cleveland October 22, 2002 Highland, Indiana Hastings, Michigan Texas State Bank, Texas Country Bank, Dallas October 10, 2002 McAllen, Texas San Juan, Texas PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the Community Bank & Trust v. United States, No. 01-571C (Ct. Federal Reserve Banks in which the Board of Governors is not Fed. CI., filed October 3, 2001). Action challenging on named a party. constitutional grounds the failure to pay interest on reserve accounts held at Federal Reserve Banks. Radfar v. United States, No. 1:01CV1292 (PLF) (D.D.C., Albrecht v. Board of Governors, No. 02-5325 (D.C. Cir., filed complaint filed June 11, 2001). Action under the Federal October 18, 2002). Appeal of district court order dismissing Tort Claims Act for injury on Board premises. On October challenge to the method of funding of the retirement plan 3, 2002, the parties dismissed the action by stipulation. for certain Board employees. Artis v. Greenspan, No. 01-CV-0400(ESG) (D.D.C., complaint Sedgwick v. United States, No. 02-1083 (ESH) (D.D.C., filed filed February 22, 2001). Employment discrimination ac- June 4, 2002). Complaint for declaratory judgment under tion. On August 15, 2001, the district court consolidated the the Federal Tort Claims Act and the constitution. On Octo- action with Artis v. Greenspan, No. 99-CY-2073 (EGS) ber 15, 2002, the district court dismissed the action. (D.D.C., filed August 3, 1999), also an employment dis- Caesar v. United States, No. 02-0612 (EGS) (D.D.C.), re- crimination action. moved on April 1, 2002 from No. 02-1502 (D.C. Superior Fraternal Order of Police v. Board of Governors, No. Court, originally filed March 1, 2002). Action seeking dam- 1:98CV03116 (WBB)(D.D.C., filed December 22, 1998). Deages for personal injury. claratory judgment action challenging Board labor practices. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 Financial and Business Statistics A3 GUIDE TO TABLES Federal Finance A25 Federal debt subject to statutory limitation DOMESTIC FINANCIAL STATISTICS A25 Gross public debt of U.S. Treasury— Types and ownership Money Stock and Bank Credit A26 U.S. government securities A4 Reserves and money stock measures dealers—Transactions A5 Reserves of depository institutions and Reserve Bank A27 U.S. government securities dealers— credit Positions and financing A6 Reserves and borrowings—Depository A28 Federal and federally sponsored credit institutions agencies—Debt outstanding Policy Instruments Securities Markets and Corporate Finance A7 Federal Reserve Bank interest rates A29 New security issues—Tax-exempt state and local A8 Reserve requirements of depository institutions governments and corporations A9 Federal Reserve open market transactions A30 Open-end investment companies—Net sales and assets Federal Reserve Banks A30 Domestic finance companies—Assets and liabilities A31 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 A3 2 Mortgage markets—New homes A3 3 Mortgage debt outstanding A12 Aggregate reserves of depository institutions and monetary base Consumer Credit A13 Money stock measures A34 Total outstanding Commercial Banking Institutions— A34 Terms Assets and Liabilities Flow of Funds A15 All commercial banks in the United States A16 Domestically chartered commercial banks A35 Funds raised in U.S. credit markets A17 Large domestically chartered commercial banks A37 Summary of financial transactions A19 Small domestically chartered commercial banks A3 8 Summary of credit market debt outstanding A20 Foreign-related institutions A39 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 A40 Output, capacity, and capacity utilization A24 Stock market—Selected statistics A42 Industrial production—Indexes and gross value Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

48 Federal Reserve Bulletin • December 2002 INTERNATIONAL STATISTICS Reported by Nonbanking Business Enterprises in the United States Summary Statistics A52 Liabilities to unaffiliated foreigners A44 U.S. international transactions A53 Claims on unaffiliated foreigners A45 U.S. reserve assets A45 Foreign official assets held at Federal Reserve Securities Holdings and Transactions Banks A54 Foreign transactions in securities A46 Selected U.S. liabilities to foreign official A55 Marketable U.S. Treasury bonds and institutions notes—Foreign transactions Reported by Banks in the United States Interest and Exchange Rates A46 Liabilities to, and claims on, foreigners A56 Foreign exchange rates A47 Liabilities to foreigners A49 Banks' own claims on foreigners A50 Banks' own and domestic customers' claims on A57 GUIDE TO SPECIAL TABLES AND foreigners STATISTICAL RELEASES A50 Banks' own claims on unaffiliated foreigners A51 Claims on foreign countries—Combined domestic offices and foreign branches A58 INDEX TO STATISTICAL TABLES Discontinuation of Certain Statistical Tables in the Federal Reserve Bulletin The following ten tables have been discontinued in the Financial and Business Statistics section of the Federal Reserve Bulletin. Information on the sources of data in these tables appears in the Announcements section of the June 2002 issue of the Bulletin, page 290. Discontinued tables: 1.38 1.39 1.48 2.10 2.11 2.14 2.15 2.16 2.17 3.11 Page numbers of the tables in the Financial and Business Statistics section have been revised. 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 is 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 • December 2002 1.10 RESERVES AND MONEY STOCK MEASURES Percent annual rate of change, seasonally adjusted1 2001 2002 2002 MMoonneettaarryy oorr ccrreeddiitt aaggggrreeggaattee Q4 Qi Q2 Q3 May June July Aug. Sept. Reserves of depository institutions2 1 Total -31.2 -9.7 -16.3 -.4 -48.4 4.6 12.0 12.1' -23.1 2 Required 22.1 -9.3 -15.4 -3.1 -51.9 5.7 8.3 4.2 -19.1 3 Nonborrowed -21.4 -9.4 -16.9 -1.9 -49.8 3.7 10.6 7.8 -20.1 4 Monetaiy base3 6.4 9.1 8.1 7.1 7.3 11.2 8.5 4.1 .6 Concepts of money4 5 Ml 2.1 5.8 -.6 2.8 6.6 7.2 8.0 -13.8 8.4 6 M2 9.5 5.8 3.4 10.2 14.1 7.4 12.8 9.4 5.1 7 M3 12.3 5.0 3.3r 8.3 11.8' 5.9' 8.3 10.7' 3.9 Nontransaction components 8 In M25 11.5 5.8 4.5 12.2 16.1 7.4 14.2 15.7 4.2 9 In M3 only6 18.5 3.5 3.3' 4.1 6.9' 2.8' -1.3 13.5' 1.2 Time and savings deposits Commercial banks 10 Savings, including MMDAs 23.2 20.4 13.3 21.0 25.6 13.6' 17.0 32.6 16.9 11 Small time7 -12.1 -15.3 -4.9 -5.7 9.0 -.6 -8.0 -10.8' -14.0 12 Large time8'9 -9.3 4.8 11.3 4.5 19.5 -3.1 7.5' 2.9' -1.4 Thrift institutions 13 Savings, including MMDAs 27.3 25.6 22.1 21.0 14.9' 16.2' 22.7' 24.5' 21.3 14 Small time7 -11.0 -15.7 -14.8' -8.4 -29.0' -10.8 -4.3' -3.1' -6.3 15 Large time8 2.6 -.8 -8.4 -2.3 -29.3 -16.1 1.1 16.3 6.4 Money market mutual funds 16 Retail 7.9 -9.4 -10.1 7.7 18.6 .9 23.1 -.7 -18.6 17 Institution-only 49.5 -.3 2.8 .1 10.6 10.7 -4.8 -1.5 -13.8 Repurchase agreements and eurodollars 18 Repurchase agreements10 .7 9.6 -5.6 24.7 .0 5.8 -3.5 80.2 57.4 19 Eurodollars10 -4.8 12. lr 2.5' -7.0 -21.1' -17.1' -7.8' 14.6' -13.3 1. Unless otherwise noted, rates of change are calculated from average amounts outstand- time deposits, and retail money fund balances, each seasonally adjusted separately, and ing during preceding month or quarter. adding this result to seasonally adjusted Ml. 2. Figures incorporate adjustments for discontinuities, or "breaks," associated with regula- M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more), (2) tory changes in reserve requirements (See also table 1.20.) balances in institutional money funds, (3) RP liabilities (overnight and term) issued by all 3. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally depository institutions, and (4) eurodollars (overnight and term) held by U.S. residents at adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency foreign branches of U.S. banks worldwide and at all banking offices in the United Kingdom component of the money stock, plus (3) (for all quarterly reporters on the "Report of and Canada. Excludes amounts held by depository institutions, the U.S. government, money Transaction Accounts, Other Deposits and Vault Cash" and for all weekly reporters whose market funds, and foreign banks and official institutions. Seasonally adjusted M3 is calculated vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference by summing large time deposits, institutional money fund balances, RP liabilities, and between current vault cash and the amount applied to satisfy current reserve requirements. eurodollars, each seasonally adjusted separately, and adding this result to seasonally adjusted 4. Composition of the money stock measures is as follows: M2. Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of 5. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all money fund balances, each seasonally adjusted separately. commercial banks other than those owed to depository institutions, the U.S. government, and 6. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities foreign banks and official institutions, less cash items in the process of collection and Federal (overnight and term) issued by depository institutions, and (4) eurodollars (overnight and Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of term) of U.S. addressees, each seasonally adjusted separately. withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, 7. Small time deposits—including retail RPs—are those issued in amounts of less than credit union share draft accounts, and demand deposits at thrift institutions. Seasonally $100,000. All IRA and Keogh account balances at commercial banks and thrift institutions adjusted Ml is computed by summing currency, travelers checks, demand deposits, and are subtracted from small time deposits. OCDs, each seasonally adjusted separately. 8. Large time deposits are those issued in amounts of $100,000 or more, excluding those M2: Ml plus (1) savings (including MMDAs), (2) small-denomination time deposits (time booked at international banking facilities. deposits—including retail RPs—in amounts of less than S 100,000), and (3) balances in retail 9. Large time deposits at commercial banks less those held by money market funds, money market mutual funds. Excludes individual retirement accounts (IRAs) and Keogh depository institutions, the U.S. government, and foreign banks and official institutions. balances at depository institutions and money market funds. 10. Includes both overnight and term. Seasonally adjusted M2 is calculated by summing savings deposits, small-denomination 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 daily figures for week ending on date indicated Factor 2002 2002 July Aug. Sept. Aug. 14 Aug. 21 Aug. 28 Sept. 4 Sept. 11 Sept. 18 Sept. 25 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 657,336 656,967 659,221 653,460 658,633 655,623 665,111 658,197 657,910 655,922 U.S. government securities2 2 Bought outright—System account3 595,271 601,681 604,667 600,217 602,139 603,770 603,083 604,092 605,114 605,242 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 1100 5 Held under repurchase agreements 0 0 0 0 0 0 0 0 0 0 6 Repurchase agreeements—triparty4 22,363 16,532 16,617 13,321 19,500 13,464 23,821 16,857 15,500 12,214 7 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 8 Adjustment credit 19 191 14 15 2 783 93 1 7 1 9 Seasonal credit 176 187 168 181 191 198 177 164 162 168 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 17, Float -171 -311 -262 -714 -308 -48 111 -643 -762 47 13 Other Federal Reserve assets 39,668 38,676 38,008 40,429 37,099 37,447 37,816 37,717 37,880 38,239 14 Gold stock 11,044 11,042 11,042 11,042 11,042 11,042 11,042 11,042 11,042 11,042 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 33,996 34,134R 34,276 34,096R 34,147R 34,197' 34,247 34,261 34,275 34,289 ABSORBING RESERVE FUNDS 17 Currency in circulation 661,356 660,865' 661,577 660,893R 660,40 lr 660,018' 664,329 663,557 661,147 659,704 18 Reverse repurchase agreements—triparty4 0 0 0 0 0 0 0 0 0 0 19 Treasury cash holdings 385 373 367 381 371 369 361 361 364 372 Deposits, other than reserve balances, with Federal Reserve Banks 7.0 Treasury 5,279 5,068 5,838 4,896 4,387 6,013 4,795 5,009 5,773 6,832 7.1 Foreign 91 95 101 76 129 78 94 130 106 80 77 Service-related balances and adjustments 10,171 10,168 10,178 10,155 10,161 10,144 10,184 10,177 10,117 10,245 73 Other 229 210 221 201 211 203 205 223 218 234 74 Other Federal Reserve liabilities and capital 19,645 19,428 19,399 19,472 19,701 19,294 19,557 19,437 19,174 19,423 25 Reserve balances with Federal Reserve Banks5 .... 7,419 8,135 9,056 4,725 10,661 6,943 13,076 6,806 8,529 6,563 End-of-month figures Wednesday figures July Aug. Sept. Aug. 14 Aug. 21 Aug. 28 Sept. 4 Sept. 11 Sept. 18 Sept. 25 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 659,024 663,956 664,726 656,604 665,411 657,472 668,040 659,916 660,975 660,189 U.S. government securities2 2 Bought outright—System account3 600,455 602,825 604,191 600,372 602,919 604,401 603,687 604,520 606,272 606,248 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 19,500 23,000 21,750 16,000 25,250 16,000 25,000 18,000 16,750 15,500 7 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 8 Adjustment credit 4 150 1 93 2 0 45 1 0 2 9 Seasonal credit 182 179 176 192 202 189 166 161 167 174 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 17 Float -953 -92 396 -1,001 -303 -906 1,475 -506 -372 -185 13 Other Federal Reserve assets 39,826 37,882 38,202 40,939 37,330 37,778 37,657 37,730 38,148 38,441 14 Gold stock 11,042 11,042 11,042 11,042 11,042 11,042 11,042 11,042 11,042 11,042 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 33,995 34,247R 34,303 34,096R 34,147' 34,197R 34,247 34,261 34,275 34,289 ABSORBING RESERVE FUNDS 17 Currency in circulation 661,144 664,116R 660,071 661,832R 660,951' 662,551' 665,859 663,837 661,603 660,751 18 Reverse repurchase agreements—triparty4 0 0 0 0 0 0 0 0 0 0 19 Treasury cash holdings 377 361 380 371 370 361 360 362 370 380 Deposits, other than reserve balances, with Federal Reserve Banks 2.0 Treasury 6,242 4,874 7,879 5,191 4,629 5,091 4,601 4,516 7,175 7,209 21 Foreign 164 86 150 79 89 77 128 75 139 75 22 Service-related balances and adjustments 10,220 10,184 10,170 10,155 10,161 10,144 10,184 10,177 10,117 10,245 23 Other 236 194 221 192 202 199 223 215 215 232 24 Other Federal Reserve liabilities and capital 18,940 19,526 19,719 19,710 19,205 19,365 19,378 19,018 19,260 19,276 25 Reserve balances with Federal Reserve Banks5 .... 8,940 12,104 13,682 6,413 17,193 7,123 14,796 9,219 9,614 9,552 1. Amounts of cash held as reserves are shown in table 1.12, line 2. 4. Cash value of agreements arranged through third-party custodial banks. These agree- 2. Includes securities loaned—fully guaranteed by U.S. government securities pledged ments are collateralized by U.S. government and federal agency securities. with Federal Reserve Banks—and excludes securities sold and scheduled to be bought back 5. Excludes required clearing balances and adjustments to compensate for float, under matched sale-purchase transactions. 3. Includes compensation that adjusts for the effects of inflation on the principal of inflation-indexed securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Nonfinancial Statistics • December 2002 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 1999 2000 2001 2002 Dec. Dec. Dec. Mar. Apr. May June July Aug.' Sept. 1 Reserve balances with Reserve Banks2 5,262 7,022 9,054 9,146 9,740 9,209 7,929 8,096 8,520 8,736 2 Total vault cash3 60,620 45,245 43,935 42,631 42,013 41,819 41,662 42,723 42,886 42,227 3 Applied vault cash4 36,392 31,451 32,024 31,151 31,156 31,033 30,642 31,296 31,338 30,185 4 Surplus vault cash5 24,228 13,794 11,911 11,480 10,857 10,786 11,021 11,427 11,547 12,042 5 Total reserves6 41,654 38,473 41,077 40,297 40,896 40,242 38,571 39,392 39,859 38,922 6 Required reserves 40,357 37,046 39,433 38,883 39,688 38,969 37,329 38,020 38,220 37,441 7 Excess reserve balances at Reserve Banks7 1,297 1,427 1,645 1,414 1,208 1,273 1,242 1,373 1,638 1,481 8 Total borrowing at Reserve Banks 320 210 67 79 71 112 142 191 333 229 9 Adjustment 179 99 34 59 21 7 6 16 148 60 10 Seasonal 67 111 33 20 50 105 136 176 185 169 11 Special Liquidity Facility8 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 2002 May 29 June 12 June 26 July 10 July 24 Aug. 7 Aug. 21 Sept. 4' Sept. 18 Oct. 2 1 Reserve balances with Reserve Banks2 10,011 7,878 7,979 7,909 8,266 8,024 7,697r 10,021 7,668 9,555 2 Total vault cash3 41,954 40,682 42,130 42,968 42,170 43,479 43,488 41,628 41,577 43,186 3 Applied vault cash4 31,858 29,441 31,444 31,438 30,738 32,213 31,35 lr 30,709 28,538 31,933 4 Surplus vault cash5 10,096 11,241 10,686 11,531 11,433 11,266 12,137r 10,919 13,039 11,252 5 Total reserves6 41,869 37,319 39,423 39,347 39,004 40,236 39,048 40,730 36,206 41,488 6 Required reserves 40,491 36,174 38,177 37,828 37,709 38,916 37,712r 38,446 35,233 39,682 7 Excess reserve balances at Reserve Banks7 1,378 1,145 1,246 1,518 1,294 1,320 l,336r 2,284 972 1,806 8 Total borrowing at Reserve Banks 127 116 151 194 189 194 195 626 167 170 9 Adjustment 10 3 4 27 9 14 9 438 4 1 10 Seasonal 117 113 147 168 180 180 186 188 163 170 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 credit1 Seasonal credit2 Extended credit3 FFeeddeerraall RReesseerrvvee BBaannkk 11/ O 15 n / 02 Effective date Previous rate 11/ O 15 n / 02 Effective date Previous rate 11/ O 15 n / 02 Effective date Previous rate Boston 0.75 11/7/02 1.25 1.45 11/14/02 1.75 1.95 11/14/02 2.25 New York 11/6/02 Philadelphia 11/7/02 Cleveland 11/7/02 Richmond 11/7/02 Atlanta 11/7/02 Chicago 11/7/02 St. Louis 11/7/02 Minneapolis 11/7/02 Kansas City 11/7/02 Dallas 11/6/02 San Francisco 0.75 11/6/02 1.25 1.45 11/14/02 1.75 1.95 11/14/02 2.25 Range of rates for adjustment credit in recent years4 (or F.R. Bank Range(or F.R. Bank Range (or F.R. Bank 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—July 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 3.5-4.5 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 Sept. 17 2.50-3.00 2.50 27 10-10.5 10 1992—July 2 3-3.5 3 18 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 2002—Nov. 6 0.75-1.25 0.75 7 0.75 0.75 1984—Apr. 9 8.5-9 9 1995—Feb. 1 4.75-5.25 5.25 13 9 9 9 5.25 5.25 In effect Nov. 15, 2002 0.75 0.75 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. 9 6-6.5 6.5 May 16 5.50-6.00 5.50 11 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; and Statistical Digest, 1996-2000. See also the Board's Statistics: be provided when exceptional circumstances (including sustained deposit drains, impaired Releases and Historical Data web pages (http://www.federalreserve.gov/releases/H15/ access to money market funds, or sudden deterioration in loan repayment performance) or data.htm). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Nonfinancial Statistics • December 2002 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Requirement TTyyppee ooff ddeeppoossiitt Percentage of Effective date deposits Net transaction accounts2 1 $0 million-$42.1 million3 33333 1111122222/////2222266666/////0000022222 2 More than $42.1 million4 1111100000 1111122222/////2222266666/////0000022222 00000 1111122222/////2222277777/////9999900000 00000 1111122222/////2222277777/////9999900000 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 26, 2002, 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 16, 2003, for institutions that report quarterly, foreign banks, and Edge Act corporations. the exemption was raised from $5.7 million to $6.0 million. 2. Transaction accounts include all deposits against which the account holder is permitted 4. The reserve requirement was reduced from 12 percent to 10 percent on April 2, 1992, to make withdrawals by negotiable or transferable instruments, payment orders of with- for institutions that report weekly, and on April 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 from 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 December 13, 1990, and to zero for the maintenance by check, draft, debit card, or similar order payable directly to third parties) are savings period that began December 27, 1990. For institutions that report quarterly, the reserve deposits, not transaction accounts. requirement on nonpersonal time deposits with an original maturity of less than 1.5 years was 3. The Monetary Control Act of 1980 requires that the amount of transaction accounts reduced from 3 percent to zero on January 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 October 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 26, 2002, 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 16, 2003, for institutions that report quarterly, the amount was increased deposits with an original maturity of less than 1.5 years (see note 5). from $41.3 million to $42.1 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 2002 TTyyppee ooff ttrraannssaaccttiioonn 11999999 22000000 22000011 aanndd mmaattuurriittyy Feb. Mar. Apr. May June July Aug. U.S. TREASURY SECURITIES2 Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 0 8,676 15,503 1,042 3,013 1,047 3,524 3,656 4,838 552299 2 Gross sales 0 0 0 0 0 0 0 0 0 0 Exchanges 464,218 477,904 542,736 54,619 48,483 45,376 70,978 53,015 45,828 63,083 4 For new bills 464,218 477,904 542,736 54,619 48,483 45,376 70,978 53,015 45,828 63,083 5 Redemptions 0 24,522 10,095 0 0 0 0 0 0 0 Others within one year 6 Gross purchases 11,895 8,809 15,663 2,894 1,455 2,709 2,826 0 1,104 445 7 Gross sales 0 0 0 0 0 0 0 0 0 0 8 Maturity shifts 50,590 62,025 70,336 7,537 0 14,515 6,714 0 11,052 8,987 9 Exchanges -53,315 -54,656 -72,004 -8,432 0 -15,522 -9,031 0 -14,183 -5,040 10 Redemptions 1,429 3,779 16,802 0 0 0 0 0 0 0 One to five years 11 Gross purchases 19,731 14,482 22,814 1,101 2,181 1,142 1,439 0 1,755 1,921 12 Gross sales 0 0 0 0 0 0 0 0 0 0 N Maturity shifts -44,032 -52,068 -45,211 -6,283 0 -14,515 -1,620 0 -11,052 -629 14 Exchanges 42,604 46,177 64,519 7,679 0 15,522 8,639 0 13,283 3,396 Five to ten years 15 Gross purchases 4,303 5,871 6,003 334 637 1,670 259 542 577 690 16 Gross sales 0 0 0 0 0 0 0 0 0 0 17 Maturity shifts -5,841 -6,801 -21,063 -501 0 0 -5,094 0 0 -6,714 18 Exchanges 7,578 6,585 6,063 753 0 0 391 0 900 1,645 More than ten years 19 Gross purchases 9,428 5,833 8,531 1,054 291 210 0 0 63 8800 20 Gross sales 0 0 0 0 0 0 0 0 0 00 21 Maturity shifts -717 -3,155 -4,062 -753 0 0 0 0 0 -1,645 22 Exchanges 3,133 1,894 1,423 0 0 0 0 0 0 0 All maturities 23 Gross purchases 45,357 43,670 68,513 6,425 7,577 6,777 8,048 4,198 8,336 3,665 24 Gross sales 0 0 0 0 0 0 0 0 0 0 25 Redemptions 1,429 28,301 26,897 0 0 0 0 0 0 0 Matched transactions 76 Gross purchases 4,413,430 4,415,905 4,722,667 367,906 393,273 436,936 466,807 447,555 513,400 495,729 27 Gross sales 4,431,685 4,397,835 4,724,743 368,060 393,151 437,881 469,046 448,330 511,902 497,031 Repurchase agreements 28 Gross purchases 281,599 0 0 0 0 0 0 00 0 00 29 Gross sales 301,273 0 0 0 0 0 0 0 0 0 30 Net change in U.S. Treasury securities 5,999 33,439 39,540 6,271 7,699 5,833 5,810 3,423 9,834 2,363 FEDERAL AGENCY OBLIGATIONS Outright transactions 31 Gross purchases 0 0 0 0 0 0 0 00 00 00 32 Gross sales 0 0 0 0 0 0 0 0 0 0 33 Redemptions 157 51 120 0 0 0 0 0 0 0 Repurchase agreements 34 Gross purchases 360,069 0 0 0 0 0 00 00 00 00 35 Gross sales 370,772 0 0 0 0 0 0 0 0 0 36 Net change in federal agency obligations -10,859 -51 -120 0 0 0 0 0 0 0 Reverse repurchase agreements 37 Gross purchases 0 0 0 0 0 0 0 0 0 00 38 Gross sales 0 0 0 0 0 0 0 0 0 0 Repurchase agreements 39 Gross purchases 304,989 890,236 1,497,713 101,749 70,850 102,200 106,426 98,850 68,750 8844,,000000 40 Gross sales 164,349 987,501 1,490,838 104,750 75,849 100,200 109,926 94,850 81,250 80,500 41 Net change in triparty obligations 140,640 -97,265 6,875 -3,001 -4,999 2,000 -3,500 4,000 -12,500 3,500 42 Total net change in System Open Market Account .. 135,780 -63,877 46,295 3,270 2,700 7,833 2,310 7,423 -2,666 5,863 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. Transactions include the rollover of inflation compensation into new securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Nonfinancial Statistics • December 2002 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 2002 2002 Aug. 28 Sept. 4 Sept. 11 Sept. 18 Sept. 25 July Aug. Sept. Consolidated condition statement ASSETS 1 Gold certificate account 11,038 11,038 11,038 11,038 11,038 11,038 11,038 11,038 2 Special drawing rights certificate account 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 3 Coin 1,021 1,020 1,028 1,052 1,066 947 1,031 1,085 Loans 4 To depository institutions 189 211 162 168 175 186 330 177 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 1 Repurchase agreements—triparty2 16,000 25,000 18,000 16,750 15,500 19,500 23,000 21,750 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 604,401 603,687 604,520 606,272 606,248 600,455 602,825 604,191 11 Bought outright4 604,401 603,687 604,520 606,272 606,248 600,455 602,825 604,191 12 Bills 203,772 203,055 203,886 204,297 204,269 202,969 202,196 202,210 13 Notes 294,640 294,641 294,643 295,879 295,881 291,777 294,640 295,882 14 Bonds 105,989 105,990 105,991 106,097 106,098 105,709 105,989 106,099 15 Held under repurchase agreements 0 0 0 0 0 0 0 0 16 Total loans and securities 620,600 628,908 622,692 623,200 621,933 620,151 626,165 626,129 17 Items in process of collection 6,626 13,213 7,258 7,351 6,858 6,498 5,419 2,116 18 Bank premises 1,522 1,520 1,520 1,523 1,522 1,519 1,520 1,519 Other assets 19 Denominated in foreign currencies5 16,279 16,392 16,055 16,061 15,995 16,140 16,240 16,130 20 All other6 19,977 19,738 20,149 20,615 20,967 22,053 20,127 20,597 21 Total assets 679,263 694,029 681,940 683,040 681,578 680,546 683,739 680,813 LIABILITIES 22 Federal Reserve notes 629,732 632,988 630,961 628,745 627,903 628,468 631,256 627,228 23 Reverse repurchase agreements—triparty2 0 0 0 0 0 0 0 0 24 Total deposits 23,216 30,622 24,419 27,578 27,471 25,825 27,570 31,418 25 Depository institutions 17,849 25,668 19,612 20,049 19,955 19,183 22,415 23,168 26 U.S. Treasury—General account 5,091 4,601 4,516 7,175 7,209 6,242 4,874 7,879 27 Foreign—Official accounts 77 128 75 139 75 164 86 150 28 Other 199 223 215 215 232 236 194 221 29 Deferred credit items 6,950 11,042 7,541 7,456 6,927 7,313 5,388 2,448 30 Other liabilities and accrued dividends7 2,392 2,405 2,425 2,392 2,432 2,363 2,412 2,422 31 Total liabilities 662,290 677,057 665,347 666,172 664,735 663,969 666,625 663,516 CAPITAL ACCOUNTS 32 Capital paid in 8,248 8,248 8,253 8,252 8,254 8,266 8,248 8,264 33 Surplus 7,312 7,312 7,312 7,312 7,312 7,312 7,312 7,312 34 Other capital accounts 1,413 1,413 1,028 1,304 1,278 999 1,554 1,722 35 Total liabilities and capital accounts 679,263 694,029 681,940 683,040 681,578 680,546 683,739 680,813 MEMO 36 Marketable U.S. government and federal agency securities held in custody for foreign official and international accounts 801,734 805,544 808,955 808,725 804,435 798,001 803,479 813,094 Federal Reserve note statement 37 Federal Reserve notes outstanding (issued to Banks) 747,489 747,342 748,071 749,620 751,047 748,243 747,686 751,190 38 LESS: Held by Federal Reserve Banks 117,757 114,354 117,110 120,875 123,143 119,775 116,430 123,962 39 Federal Reserve notes, net 629,732 632,988 630,961 628,745 627,903 628,468 631,256 627,228 Collateral held against notes, net 40 Gold certificate account 11,038 11,038 11,038 11,038 11,038 11,038 11,038 11,038 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 616,494 619,750 617,723 615,508 614,666 615,230 618,018 613,990 44 Total collateral 629,732 632,988 630,961 628,745 627,903 628,468 631,256 627,228 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 2002 2002 Aug. 28 Sept. 4 Sept. 11 Sept. 18 Sept. 25 July Aug. Sept. 1 Total loans 189 211 162 168 175 186 330 177 2 Within fifteen days' 178 74 50 157 152 151 293 131 3 Sixteen days to ninety days 11 137 111 11 24 35 37 47 4 91 days to 1 year 0 0 0 0 0 0 0 0 5 Total U.S. Treasury securities2 604,401 603,687 604,520 606,272 606,248 600,455 602,825 604,191 6 Within fifteen days' 25,257 16,947 18,171 26,020 24,435 21,605 12,470 13,316 7 Sixteen days to ninety days 123,556 129,569 129,519 123,579 125,775 124,250 123,482 128,403 8 Ninety-one days to one year 149,625 148,420 148,076 147,865 147,227 147,388 160,910 152,429 9 One year to five years 172,868 175,653 175,654 175,654 175,654 171,575 172,868 176,885 10 Five years to ten years 51,380 51,381 51,383 51,436 51,437 54,005 51,381 51,438 11 More than ten years 81,715 81,716 81,717 81,718 81,720 81,632 81,715 81,721 12 Total federal agency obligations 10 10 10 10 10 10 10 10 13 Within fifteen days' 0 0 0 0 0 0 0 0 14 Sixteen days to ninety days 0 0 0 0 0 0 0 0 15 Ninety-one days to one year 0 0 0 0 0 0 0 0 16 One year to five years 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 Nonfinancial Statistics • December 2002 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 2002 IItteemm D 19 e 9 c 8 . D 19 e 9 c 9 . 2 D 0 e 0 c 0 . 2 D 0 e 0 c 1 . Feb. Mar. Apr. May June July Aug. Sept. Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS2 1 Total reserves3 45.14 41.82 38.54 41.22 41.45 41.01 40.76 39.12 39.27 39.66 40.06 39.29 2 Nonborrowed reserves4 45.02 41.50 38.33 41.15 41.42 40.94 40.69 39.00 39.12 39.47 39.73' 39.06 3 Nonborrowed reserves plus extended credit5 45.02 41.50 38.33 41.15 41.42 40.94 40.69 39.00 39.12 39.47 39.73R 39.06 4 Required reserves 43.62 40.53 37.11 39.58 40.08 39.60 39.55 37.84 38.02 38.29 38.42 37.81 5 Monetary base6 513.55 593.12 584.04 634.41 646.18 649.65 653.95 657.91 664.07 668.75 671.06 671.39 Not seasonally adjusted 6 Total reserves7 45.31 41.89 38.53 41.20 42.47 40.27 40.85 40.18 38.49 39.30 39.75' 38.80 7 Nonborrowed reserves 45.19 41.57 38.32 41.13 42.44 40.19 40.78 40.06 38.35 39.11 39.41 38.57 8 Nonborrowed reserves plus extended credit5 45.19 41.57 38.32 41.13 42.44 40.19 40.78 40.06 38.35 39.11 39.41 38.57 9 Required reserves8 43.80 40.59 37.10 39.55 41.11 38.85 39.64 38.90 37.25 37.93 38.11 37.32 10 Monetary base9 518.27 600.72 590.06 639.91 645.71 649.23 653.29 658.00 662.84 668.76 669.23 669.54 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS10 11 Total reserves" 45.21 41.65 38.47 41.08 42.49 40.30 40.90 40.24 38.57 39.39 39.86 38.92 12 Nonborrowed reserves 45.09 41.33 38.26 41.01 42.46 40.22 40.83 40.13 38.43 39.20 39.53R 38.69 13 Nonborrowed reserves plus extended credit5 45.09 41.33 38.26 41.01 42.46 40.22 40.83 40.13 38.43 39.20 39.53' 38.69 14 Required reserves 43.70 40.36 37.05 39.43 41.12 38.88 39.69 38.97 37.33 38.02 38.22 37.44 15 Monetary base12 525.06 608.02 596.98 648.74 654.93 658.78 663.37 668.14 672.98 678.98 679.46 679.78 16 Excess reserves13 1.51 1.30 1.43 1.65 1.37 1.41 1.21 1.27 1.24 1.37 1.64 1.48 17 Borrowings from the Federal Reserve .12 .32 .21 .07 .03 .08 .07 .11 .14 .19 .33 .23 1. Latest monthly and biweekly figures are available from the Board's H.3 (502) weekly 8. To adjust required reserves for discontinuities that are due to regulatory changes in statistical release. Historical data starting in 1959 and estimates of the effect on required reserve requirements, a multiplicative procedure is used to estimate what required reserves reserves of changes in reserve requirements are available from the Money and Reserves would have been in past periods had current reserve requirements been in effect. Break- Projections Section, Division of Monetary Affairs, Board of Governors of the Federal 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 MEASURES1 Billions of dollars, averages of daily figures 2002 1998 1999 2000 2001 IItteemm Dec. Dec. Dec. Dec. June July Aug. Sept. Seasonally adjusted Measures1 1 Ml 1,096.5 1,124.4 1,088.9 1,179.3 1,189.9 1,197.8 1,184.0 1,192.3 2 M2 4,383.9 4,654.2 4,938.5 5,457.9 5,581.5r 5,641.2r 5,685.5 5,709.5 3 M3 6,041.3 6,544.5 7,115.1 8,033.2 8,175.8r 8,232.6r 8,306.2r 8,332.9 Ml 4 Currency3 459.3 516.9 530.1 579.9 611.1 615.1 617.1 617.8 5 Travelers checks4 8.2 8.3 8.0 7.8 8.2 8.6 8.4 8.0 6 Demand deposits3 378.4 354.5 309.9 330.4 305.1 303.8 288.9 293.1 7 Other checkable deposits6 250.5 244.7 240.9 261.2 265.5 270.3 269.7r 273.5 Nontransaction components 8 In M27 3,287.4 3,529.8 3,849.7 4,278.7 4,391.6 4,443.4 4,501.5 4,517.2 9 In M3 only8 1,657.4 1,890.3 2,176.5 2,575.2 2,594.3r 2,591.5r 2,620.7r 2,623.4 Commercial banks 10 Savings deposits, including MMDAs . . 1,187.5 1,289.1 1,423.7 1,745.8 l,884.8r 1,911.5r 1,963.4 1,991.1 11 Small time deposits9 626.1 635.0 699.1 638.9 617.5 613.4 607.9r 600.8 12 Large time deposits'o n 582.8 651.3 717.2 670.0 699.4 703.8r 705.5' 704.7 Thrift institutions 13 Savings deposits, including MMDAs . . 414.7 449.7 452.1 561.8 629.4 641.3' 654.4 666.0 14 Small time deposits9 325.6 320.4 344.5 334.4 308.5r 307.4 306.6' 305.0 15 Large time deposits10 88.6 91.1 102.9 114.0 110.2 110.3 111.8 112.4 Money market mutual funds 16 Retail 733.6 835.7 930.2 997.7 951.5 969.8 969.2 954.2 17 Institution-only 540.1 638.6 796.6 1,206.5 1,196.4 1,191.6 1,190.1 1,176.4 Repurchase agreements and eurodollars 18 Repurchase agreements'2 293.4 335.9 364.0 375.7 373.7 372.6 397.5 416.5 19 Eurodollars12 152.5 173.4 195.9 209.0 214.6' 213.2r 215.8' 213.4 Not seasonally adjusted Measures2 20 Ml 1,120.4 1,148.3 1,112.3 1,203.5 1,187.5 1,195.4' 1,179.2 1,183.6 ?.1 M2 4,404.0 4,675.0 4,962.2 5,482.9 5,570.4' 5,614.9' 5,660.1' 5,685.4 22 M3 6,070.1 6,576.2 7,150.3 8,071.4 8,161.6' 8,183.0' 8,254.2' 8,264.8 Ml components 23 Currency3 463.3 521.5 535.2 584.9 610.4 615.3 616.2 615.8 24 Travelers checks4 8.4 8.4 8.1 7.9 8.0 8.2 8.1 7.8 25 Demand deposits5 395.9 371.8 326.5 348.2 302.2 304.0 287.7 290.0 26 Other checkable deposits6 252.8 246.6 242.5 262.5 266.9 267.9' 267.3 269.9 Nontransaction components 27 In M27 3,283.6 3,526.7 3,849.9 4,279.4 4,382.9' 4,419.5 4,480.8 4,501.8 28 In M3 only8 1,666.1 1,901.2 2,188.0 2,588.5 2,591.2' 2,568.1' 2,594.2' 2,579.4 Commercial banks 29 Savings deposits, including MMDAs 1,186.0 1,288.8 1,426.9 1,750.2 1,889.6 1,907.6' 1,956.9' 1,986.9 30 Small time deposits9 626.5 635.7 700.0 639.6 614.5 611.4' 607.1' 601.3 31 Large time depositsl0'" 583.1 651.7 717.6 670.1 704.6 703.5' 702.9' 702.3 Thrift institutions 32 Savings deposits, including MMDAs 414.2 449.6 453.1 563.2 631.0 640.0' 652.2 664.6 33 Small time deposits9 325.8 320.8 345.0 334.8 307.0' 306.4 306.2' 305.3 34 Large time deposits10 88.6 91.2 103.0 114.0 111.0 110.3 111.4 112.0 Money market mutual funds 15 Retail 731.1 831.9 924.9 991.6 940.7 954.1 958.5 943.7 36 Institution-only 549.5 648.2 805.6 1,217.7 1,182.2 1,169.2 1,170.0 1,143.9 Repurchase agreements and eurodollars 37 Repurchase agreements12 290.4 334.7 364.2 376.5 378.8 373.8 396.7 410.0 38 Eurodollars12 154.5 175.4 197.6 210.2 214.6' 211.4' 213.2' 211.2 Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • December 2002 NOTES TO TABLE 1.21 1. Latest monthly and weekly figures are available from the Board's H.6 (508) weekly ory institutions, the U.S. government, money market funds, and foreign banks and official statistical release. Historical data starting in 1959 are available from the Money and Reserves institutions. Seasonally adjusted M3 is calculated by summing large time deposits, institu- Projections Section, Division of Monetary Affairs, Board of Governors of the Federal tional money fund balances, RP liabilities, and eurodollars, each seasonally adjusted sepa- Reserve System, Washington, DC 20551. rately, and adding this result to seasonally adjusted M2. 2. Composition of the money stock measures is as follows: 3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of depository Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of institutions. depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all 4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers. commercial banks other than those owed to depository institutions, the U.S. government, and Travelers checks issued by depository institutions are included in demand deposits. foreign banks and official institutions, less cash items in the process of collection and Federal 5. Demand deposits at commercial banks and foreign-related institutions other than those Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of owed to depository institutions, the U.S. government, and foreign banks and official instituwithdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, tions, less cash items in the process of collection and Federal Reserve float. credit union share draft accounts, and demand deposits at thrift institutions. Seasonally 6. Consists of NOW and ATS account balances at all depository institutions, credit union adjusted Ml is computed by summing currency, travelers checks, demand deposits, and share draft account balances, and demand deposits at thrift institutions. OCDs, each seasonally adjusted separately. 7. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail M2: Ml plus (1) savings deposits (including MMDAs), (2) small-denomination time money fund balances. deposits (time deposits—including retail RPs—in amounts of less than $100,000), and (3) 8. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities balances in retail money market mutual funds. Excludes individual retirement accounts (overnight and term) issued by depository institutions, and (4) eurodollars (overnight and (IRAs) and Keogh balances at depository institutions and money market funds. Seasonally term) of U.S. addressees. adjusted M2 is calculated by summing savings deposits, small-denomination time deposits, 9. Small time deposits—including retail RPs—are those issued in amounts of less than and retail money fund balances, each seasonally adjusted separately, and adding this result to $100,000. All IRAs and Keogh accounts at commercial banks and thrift institutions are seasonally adjusted Ml. subtracted from small time deposits. M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more) 10. Large time deposits are those issued in amounts of $100,000 or more, excluding those issued by all depository institutions, (2) balances in institutional money funds, (3) RP booked at international banking facilities. liabilities (overnight and term) issued by all depository institutions, and (4) eurodollars 11. Large time deposits at commercial banks less those held by money market funds, (overnight and term) held by U.S. residents at foreign branches of U.S. banks worldwide and depository institutions, the U.S. government, and foreign banks and official institutions. at all banking offices in the United Kingdom and Canada. Excludes amounts held by deposit- 12. Includes both overnight and term. 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 2001 2002 2002 Sept.r Mar.r Apr/ May' June' July' Aug.' Sept. Sept. 4 Sept. 11 Sept. 18 Sept. 25 Seasonally adjusted Assets 1 Bank credit 5,425.4 5,430.8 5,449.3 5,507.6 5,553.5 5,600.5 5,683.6 5,740.9 5,748.8 5,720.9 5,744.9 5,751.9 ? Securities in bank credit 1,437.7 1,482.3 1,501.7 1,536.9 1,565.8 1,597.1 1,636.1 1,646.6 1,675.0 1,636.5 1,633.2 1,647.0 U.S. government securities 803.3 847.1 868.1 893.6 910.6 920.7 949.1 966.1 978.3 964.4 958.2 964.3 4 Other securities 634.4 635.1 633.6 643.4 655.2 676.4 687.0 680.5 696.8 672.1 675.0 682.7 5 Loans and leases in bank credit2 .... 3,987.7 3,948.5 3,947.7 3,970.7 3,987.7 4,003.4 4,047.5 4,094.3 4,073.8 4,084.5 4,111.7 4,104.9 6 Commercial and industrial 1,066.0 1,025.4 1,009.3 1,004.7 997.7 985.2 985.5 978.8 984.5 980.6 978.5 979.8 7 Real estate 1,730.0 1,793.0 1,797.4 1,820.9 1,844.4 1,875.6 1,906.7 1,941.2 1,925.8 1,942.9 1,947.3 1,937.4 8 Revolving home equity 144.6 167.6 172.1 179.7 186.4 193.2 197.9 200.7 199.1 200.1 200.8 202.3 9 Other 1,585.4 1,625.4 1,625.3 1,641.2 1,658.1 1,682.4 1,708.8 1,740.5 1,726.7 1,742.8 1,746.6 1,735.1 in Consumer 552.3 562.7 567.6 570.8 570.4 566.8 577.0 585.1 582.7 583.0 586.6 586.4 11 Security3 176.8 160.1 166.8 168.6 168.8 175.2 174.6 179.6 175.2 173.8 189.0 186.5 1? Other loans and leases 462.6 407.3 406.6 405.8 406.4 400.6 403.8 409.6 405.6 404.2 410.2 414.7 n Interbank loans 346.2 269.8 270.7 288.4 282.4 287.8 303.5 314.9 313.8 305.9 316.4 318.2 14 Cash assets4 329.1 300.4 300.3 302.2 307.4 308.7 315.4 312.6 331.2 296.3 308.9 312.5 15 Other assets5 478.1 470.6 482.1 488.0 483.5 490.6 505.4 501.9 503.6 508.9 499.2 497.7 16 Total assets6 6,510.8 6,395.8 6,427.0 6,510.6 6,551.1 6,612.1 6,732.6 6,794.8 6,821.7 6,756.7 6,793.8 6,804.7 Liabilities 17 Deposits 4,220.3 4,311.4 4,334.2 4,368.6 4,392.8 4,433.0 4,475.7 4,485.7 4,527.1 4,475.3 4,469.5 4,472.7 18 Transaction 690.9 620.9 602.0 609.5 598.7 613.9 600.3 585.0 581.7 554.6 584.3 624.5 19 Nontransaction 3,529.4 3,690.5 3,732.3 3,759.1 3,794.1 3,819.1 3,875.4 3,900.7 3,945.4 3,920.7 3,885.2 3,848.1 7.0 Large time 966.3 1,026.1 1,042.9 1,046.2 1,039.3 1,048.8 1,048.4 1,042.7 1,048.4 1,044.7 1,044.3 1,037.6 71 Other 2,563.1 2,664.3 2,689.3 2,712.9 2,754.8 2,770.3 2,827.1 2,858.0 2,897.0 2,876.0 2,840.9 2,810.5 27, Borrowings 1,286.0 1,206.0 1,219.9 1,245.4 1,241.2 1,241.1 1,301.7 1,322.9 1,322.1 1,309.5 1,326.3 1,331.2 73 From banks in the U.S 436.3 381.2 381.4 384.0 379.3 385.5 404.4 415.8 419.3 420.7 416.1 408.4 74 From others 849.7 824.8 838.5 861.4 861.9 855.6 897.3 907.1 902.8 888.7 910.2 922.8 2.5 Net due to related foreign offices 173.0 109.4 103.7 92.2 90.9 90.8 91.1 99.6 96.3 102.3 116.6 92.8 26 Other liabilities 403.9 309.7 320.7 336.7 368.6 396.9 416.2 424.9 426.1 418.1 418.8 429.2 27 Total liabilities 6,083.1 5,936.5 5,978.5 6,042.9 6,093.5 6,161.8 6,284.7 6,333.1 6,371.6 6,305.2 6,331.2 6,325.8 28 Residual (assets less liabilities)7 427.7 459.3 448.6 467.6 457.6 450.3 447.8 461.7 450.1 451.5 462.6 478.9 Not seasonally adjusted Assets 79 Bank credit 5,420.1 5,424.9 5,446.1 5,501.5 5,548.0 5,573.9 5,661.1 5,734.1 5,735.5 5,709.9 5,746.8 5,740.5 30 Securities in bank credit 1,434.5 1,488.0 1,501.1 1,534.2 1,561.7 1,582.9 1,627.4 1,642.9 1,673.9 1,633.6 1,628.7 1,640.6 31 U.S. government securities 800.4 853.4 869.8 891.2 907.9 912.4 942.8 962.6 976.9 962.4 954.1 959.0 37 Other securities 634.2 634.6 631.2 642.9 653.8 670.5 684.6 680.2 697.0 671.3 674.6 681.6 33 Loans and leases in bank credit2 .... 3,985.6 3,936.9 3,945.1 3,967.3 3,986.3 3,990.9 4,033.7 4,091.2 4,061.6 4,076.3 4,118.1 4,099.9 34 Commercial and industrial 1,063.8 1,026.9 1,013.4 1,008.2 999.9 984.1 980.0 976.7 979.1 974.4 978.1 978.7 35 Real estate 1,731.7 1,785.4 1,794.1 1,823.5 1,845.4 1,875.0 1,907.8 1,943.3 1,926.4 1,945.7 1,950.5 1,939.0 36 Revolving home equity 145.3 166.0 171.5 180.1 186.5 193.0 198.0 201.7 199.7 201.1 202.1 203.5 37 Other 1,586.4 1,619.4 1,622.6 1,643.4 1,658.8 1,682.0 1,709.8 1,741.6 1,726.7 1,744.6 1,748.4 1,735.6 38 Consumer 551.6 560.0 564.2 569.0 566.2 560.9 573.5 584.7 580.9 581.3 587.3 587.2 39 Credit cards and related plans . . 217.0 220.0 223.5 222.8 221.0 215.4 224.5 231.4 229.6 228.6 233.7 233.2 40 Other 334.6 339.9 340.6 346.2 345.2 345.5 349.0 353.3 351.3 352.8 353.6 354.0 41 Security3 175.6 157.7 165.9 162.1 167.8 170.6 170.2 177.8 168.1 170.2 193.2 184.5 47 Other loans and leases 462.9 407.0 407.5 404.4 407.0 400.3 402.3 408.8 407.1 404.7 409.0 410.5 43 Interbank loans 338.3 274.7 280.6 285.0 284.5 282.0 297.1 307.2 316.4 306.0 308.5 294.9 44 Cash assets4 325.7 290.6 299.3 299.5 299.7 299.6 301.1 309.4 346.8 298.9 300.9 298.9 45 Other assets5 480.7 470.1 482.6 487.7 481.6 489.2 502.7 504.5 506.4 512.4 500.1 497.2 46 Total assets6 6,496.6 6,384.4 6,433.5 6,497.9 6,538.0 6,569.3 6,686.7 6,779.5 6,829.0 6,751.4 6,780.4 6,756.0 Liabilities 47 Deposits 4,190.6 4,316.7 4,358.4 4,361.6 4,380.6 4,403.7 4,428.7 4,453.6 4,519.8 4,464.6 4,428.8 4,402.8 48 Transaction 683.8 616.0 610.4 601.5 595.7 606.4 584.9 578.8 593.0 558.6 574.2 598.5 49 Nontransaction 3,506.8 3,700.8 3,748.0 3,760.1 3,784.9 3,797.2 3,843.8 3,874.8 3,926.8 3,906.0 3,854.6 3,804.4 50 Large time 953.8 1,027.0 1,045.5 1,049.8 1,037.0 1,037.7 1,032.7 1,028.2 1,031.8 1,029.0 1,027.7 1,024.5 51 Other 2,553.0 2,673.8 2,702.5 2,710.3 2,747.9 2,759.5 2,811.1 2,846.6 2,895.1 2,877.0 2,827.0 2,779.9 57 Borrowings 1,281.7 1,204.0 1,226.0 1,251.9 1,240.2 1,231.0 1,281.4 1,320.3 1,310.6 1,295.0 1,331.0 1,335.9 53 From banks in the U.S 427.9 385.4 386.4 385.2 376.8 381.4 399.2 409.0 413.4 411.8 410.2 401.3 54 From others 853.8 818.6 839.7 866.6 863.4 849.5 882.1 911.3 897.2 883.2 920.7 934.6 55 Net due to related foreign offices 173.6 111.1 95.1 91.7 87.0 81.7 88.2 100.1 94.3 101.1 115.8 98.7 56 Other liabilities 404.0 309.5 313.3 336.2 365.8 388.4 413.6 425.0 424.4 417.0 417.5 434.0 57 Total liabilities 6,049.9 5,941.4 5,992.9 6,041.4 6,073.5 6,104.7 6,211.8 6,299.1 6,349.1 6,277.7 6,293.1 6,271.4 58 Residual (assets less liabilities)7 446.7 443.0 440.6 456.6 464.4 464.5 474.9 480.4 479.8 473.7 487.3 484.6 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • December 2002 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and LiabilitiesContinued B. Domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures Account 2001 2002 2002 Sept.' Mar.' Apr.' May' June' July' Aug.' Sept. Sept. 4 Sept. 11 Sept. 18 Sept. 25 Seasonally adjusted Assets 1 Bank credit 4,833.5 4,833.2 4,851.4 4,910.6 4,948.1 4,991.7 5,066.0 5,125.0 5,126.1 5,105.9 5,122.3 5,138.1 2 Securities in bank credit 1,214.6 1,254.1 1,276.3 1,308.5 1,330.9 1,360.9 1,390.0 1,402.8 1,426.2 1,394.3 1,390.5 1,404.0 3 U.S. government securities 732.9 778.5 798.6 822.7 837.2 847.2 869.1 881.0 894.5 880.6 873.1 877.8 4 Other securities 481.7 475.6 477.7 485.9 493.7 513.7 520.9 521.8 531.7 513.7 517.4 526.2 3 Loans and leases in bank credit2 .... 3,618.9 3,579.0 3,575.2 3,602.1 3,617.1 3,630.7 3,676.0 3,722.2 3,699.9 3,711.6 3,731.8 3,734.1 6 Commercial and industrial 864.8 823.8 811.3 806.0 802.9 793.6 795.2 793.1 795.9 792.9 791.5 794.4 7 Real estate 1,711.4 1,773.7 1,778.0 1,801.6 1,824.8 1,855.9 1,886.9 1,921.3 1,906.0 1,923.0 1,927.3 1,917.4 8 Revolving home equity 144.6 167.6 172.1 179.7 186.4 193.2 197.9 200.7 199.1 200.1 200.8 202.3 9 Other 1,566.8 1,606.2 1,605.9 1,621.8 1,638.5 1,662.7 1,689.0 1,720.5 1,706.9 1,723.0 1,726.6 1,715.1 10 Consumer 552.3 562.7 567.6 570.8 570.4 566.8 577.0 585.1 582.7 583.0 586.6 586.4 11 Security3 96.9 81.4 82.9 88.8 84.1 86.6 85.6 86.0 81.9 81.1 89.1 95.1 12 Other loans and leases 393.5 337.3 335.4 334.9 334.9 327.9 331.3 336.6 333.4 331.5 337.3 340.7 13 Interbank loans 320.5 249.1 248.8 265.0 262.2 270.5 285.4 293.8 292.1 283.1 295.7 297.7 14 Cash assets4 285.4 256.1 253.6 256.9 261.9 263.6 270.5 268.9 285.6 253.7 264.5 268.7 15 Other assets5 444.6 440.5 451.3 457.4 450.7 456.9 471.6 469.5 469.7 476.6 467.2 465.8 16 Total assets6 5,816.2 5,703.5 5,730.0 5,814.6 5,847.5 5,907.5 6,018.6 6,082.0 6,098.3 6,044.2 6,074.5 6,095.1 Liabilities 17 Deposits 3,809.4 3,823.4 3,827.4 3,861.0 3,884.6 3,929.3 3,978.7 4,000.2 4,030.4 3,981.0 3,979.0 3,994.0 18 Transaction 678.4 610.8 591.4 598.6 587.8 603.3 589.4 574.0 570.0 543.8 574.0 613.5 19 Nontransaction 3,131.1 3,212.6 3,236.0 3,262.4 3,296.8 3,326.0 3,389.3 3,426.1 3,460.4 3,437.2 3,405.0 3,380.5 20 Large time 570.4 552.8 548.9 550.7 544.7 563.2 570.5 574.7 574.3 569.7 571.2 574.2 21 Other 2,560.7 2,659.8 2,687.1 2,711.7 2,752.0 2,762.8 2,818.7 2,851.5 2,886.1 2,867.6 2,833.8 2,806.3 22 Borrowings 1,068.5 1,017.2 1,029.3 1,055.3 1,047.4 1,038.0 1,087.0 1,099.3 1,094.9 1,090.5 1,104.2 1,106.1 23 From banks in the U.S 406.4 360.2 359.1 362.9 357.9 364.3 382.0 392.0 392.3 397.9 396.2 384.0 24 From others 662.1 657.0 670.2 692.4 689.5 673.7 705.0 707.3 702.6 692.6 708.0 722.0 25 Net due to related foreign offices 189.3 172.4 177.3 179.8 175.5 181.3 179.9 184.1 188.4 186.8 192.2 180.2 26 Other liabilities 319.4 241.1 252.7 264.2 286.9 309.5 322.7 335.0 333.5 331.2 330.4 338.8 27 Total liabilities 5,386.7 5,254.2 5,286.7 5,360.2 5394.4 5,458.0 5,568.3 5,618.6 5,647.3 5,589.5 5,605.8 5,619.1 28 Residual (assets less liabilities)7 429.5 449.4 443.3 454.4 453.1 449.5 450.3 463.4 451.0 454.8 468.7 476.0 Not seasonally adjusted Assets 29 Bank credit 4,831.2 4,827.3 4,848.2 4,908.4 4,945.6 4,971.0 5,049.7 5,121.4 5,122.0 5,100.8 5,125.1 5,127.7 30 Securities in bank credit 1,211.4 1,259.8 1,275.7 1,305.8 1,326.8 1,346.8 1,381.3 1,399.0 1,425.1 1,391.5 1,385.9 1,397.5 31 U.S. government securities 729.9 784.8 800.4 820.3 834.5 838.9 862.8 877.5 893.2 878.6 869.0 872.5 32 Other securities 481.4 475.0 475.3 485.4 492.3 507.9 518.5 521.6 532.0 512.9 517.0 525.0 33 Loans and leases in bank credit2 .... 3,619.8 3,567.5 3,572.5 3,602.7 3,618.8 3,624.3 3,668.4 3,722.4 3,696.8 3,709.3 3,739.1 3,730.1 34 Commercial and industrial 862.7 823.9 816.6 811.8 806.2 793.9 791.3 791.0 792.1 787.9 791.0 792.6 35 Real estate 1,713.0 1,766.2 1,774.7 1,804.2 1,825.8 1,855.2 1,888.0 1,923.4 1,906.6 1,925.8 1,930.5 1,919.0 36 Revolving home equity 145.3 166.0 171.5 180.1 186.5 193.0 198.0 201.7 199.7 201.1 202.1 203.5 37 Other 1,567.7 1,600.1 1,603.2 1,624.1 1,639.2 1,662.2 1,690.0 1,721.7 1,706.9 1,724.8 1,728.4 1,715.6 38 Consumer 551.6 560.0 564.2 569.0 566.2 560.9 573.5 584.7 580.9 581.3 587.3 587.2 39 Credit cards and related plans .. 217.0 220.0 223.5 222.8 221.0 215.4 224.5 231.4 229.6 228.6 233.7 233.2 40 Other 334.6 339.9 340.6 346.2 345.2 345.5 349.0 353.3 351.3 352.8 353.6 354.0 41 Security3 98.2 81.4 81.4 83.6 84.7 85.3 84.4 87.0 81.8 81.7 93.7 94.2 42 Other loans and leases 394.2 336.2 335.7 334.1 335.8 328.9 331.2 336.3 335.3 332.5 336.6 337.1 43 Interbank loans 312.5 254.1 258.7 261.6 264.3 264.7 279.1 286.1 294.7 283.2 287.9 274.3 44 Cash assets4 282.0 247.4 254.6 255.6 256.2 256.3 257.6 265.7 302.4 256.7 256.8 254.3 45 Other assets5 446.6 439.1 451.9 457.0 450.2 456.8 469.4 471.4 471.9 479.1 467.5 464.8 46 Total assets6 5,804.4 5,692.4 5,738.6 5,807.3 5,840.8 5,873.8 5,980.7 6,069.3 6,115.1 6,044.4 6,061.7 6,045.9 Liabilities 47 Deposits 3,789.7 3,826.6 3,847.8 3,848.9 3,874.2 3,909.0 3,946.1 3,980.1 4,039.4 3,985.7 3,952.7 3,931.3 48 Transaction 671.1 606.1 600.4 591.0 585.1 595.9 574.3 567.7 581.4 547.8 563.9 586.9 49 Nontransaction 3,118.6 3,220.5 3,247.4 3,257.9 3,289.1 3,313.2 3,371.8 3,412.4 3,458.0 3,438.0 3,388.8 3,344.5 50 Large time 567.9 551.3 547.2 548.9 544.0 561.1 568.9 572.1 573.5 569.2 568.8 568.7 51 Other 2,550.7 2,669.2 2,700.2 2,709.0 2,745.1 2,752.1 2,803.0 2,840.3 2,884.5 2,868.8 2,820.0 2,775.7 52 Borrowings 1,064.1 1,015.3 1,035.4 1,061.7 1,046.4 1,027.9 1,066.7 1,096.7 1,083.5 1,076.1 1,108.8 1,110.7 53 From banks in the U.S 398.0 364.4 364.0 364.1 355.4 360.2 376.8 385.2 386.4 389.0 390.4 377.0 54 From others 666.1 650.9 671.4 697.6 691.0 667.6 689.8 711.5 697.1 687.1 718.4 733.8 55 Net due to related foreign offices 188.8 171.0 170.6 179.4 174.3 176.1 179.0 183.6 187.4 185.8 190.9 182.1 56 Other liabilities 319.0 239.7 246.0 263.7 285.4 303.0 321.2 334.5 332.3 330.1 328.8 341.3 57 Total liabilities 5,361.7 5,252.6 5,299.8 5,353.7 5,380.3 5,416.1 5,512.9 5,594.9 5,642.6 5,577.7 5,581.2 5,565.5 58 Residual (assets less liabilities)7 442.7 439.8 438.8 453.7 460.5 457.7 467.7 474.4 472.5 466.7 480.5 480.5 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A17 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued C. Large domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures AAAccccccooouuunnnttt 2001 2002 2002 Sept/ Mar.r Apr.' May' June' July' Aug.' Sept. Sept. 4 Sept. 11 Sept. 18 Sept. 25 Seasonally adjusted Assets 1 Bank credit 2,699.8 2,560.2 2,561.7 2,577.4 2,597.0 2,630.7 2,678.6 2,715.3 2,721.5 2,696.2 2,714.5 2,730.8 7 Securities in bank credit 640.0 629.7 645.2 663.9 683.4 713.0 736.4 745.2 766.2 734.5 737.4 748.9 3 U.S. government securities 368.0 369.7 383.4 390.3 399.9 410.7 427.3 431.7 443.9 430.0 428.1 430.0 4 Trading account 37.9 32.7 38.1 43.0 42.4 43.1 48.0 42.6 55.2 43.2 44.4 37.4 5 Investment account 330.1 337.0 345.3 347.3 357.6 367.6 379.3 389.1 388.8 386.9 383.7 392.6 6 Other securities 272.0 260.0 261.8 273.6 283.5 302.3 309.1 313.5 322.3 304.5 309.3 318.9 7 Trading account 160.8 122.5 128.2 140.5 148.3 168.8 174.5 172.7 184.4 165.9 170.6 176.7 8 Investment account 111.2 137.5 133.6 133.1 135.2 133.5 134.6 140.8 137.9 138.5 138.7 142.3 9 State and local government .. 27.4 27.7 27.2 26.9 27.3 28.3 28.0 28.4 28.1 28.3 28.3 28.6 in Other 83.8 109.9 106.4 106.2 107.8 105.3 106.5 112.4 109.8 110.3 110.3 113.7 u Loans and teases in bank credit2 .... 2,059.8 1,930.5 1,916.4 1,913.5 1,913.5 1,917.7 1,942.3 1,970.1 1,955.2 1,961.7 1,977.1 1,981.9 12 Commercial and industrial 564.9 521.9 510.8 503.7 499.6 488.3 487.5 484.0 487.6 484.1 482.8 485.1 13 Bankers acceptances .0 .0 .0 .0 .0 .0 .0 .0 n.a. n.a. n.a. n.a. 14 Other 564.9 521.9 510.8 503.7 499.6 488.3 487.5 484.0 487.6 484.1 482.8 485.1 15 Real estate 853.5 847.6 845.6 847.2 861.1 881.2 900.2 921.0 911.1 921.9 925.5 918.4 16 Revolving home equity 92.4 105.3 108.5 112.1 116.5 121.3 124.2 126.0 124.5 125.7 126.3 127.5 17 Other 761.1 742.3 737.1 735.1 744.6 759.9 776.0 795.0 786.6 796.2 799.2 790.9 18 Consumer 256.9 247.1 245.5 245.4 241.2 241.8 247.3 252.8 250.7 252.1 253.1 254.2 19 Security3 88.4 73.8 75.7 81.5 76.5 78.7 77.5 77.8 73.9 73.2 80.8 86.5 20 Federal funds sold to and repurchase agreements with broker-dealers 61.8 61.2 63.3 69.2 64.5 66.2 66.1 67.8 63.7 63.2 7711..22 7766..00 21 Other 26.6 12.5 12.3 12.3 12.0 12.5 11.3 10.0 10.2 10.0 9.5 10.5 22 State and local government 14.9 13.3 13.1 13.0 13.0 12.8 12.9 13.0 12.9 12.9 12.9 13.0 23 Agricultural 9.9 9.4 9.2 9.2 9.1 9.0 8.2 8.2 8.1 8.2 8.2 8.2 24 Federal funds sold to and repurchase agreements with others 32.2 21.2 22.2 18.9 17.3 13.5 16.4 19.5 17.5 18.9 2200..11 2200..99 25 All other loans 107.2 65.8 65.2 67.0 69.0 66.0 66.4 68.0 67.2 64.2 67.9 69.8 26 Lease-financing receivables 131.9 130.4 129.2 127.7 126.8 126.3 126.1 125.8 126.2 126.1 125.8 125.8 27 Interbank loans 204.2 149.6 158.9 169.0 161.2 162.8 174.1 179.5 181.9 176.2 180.5 175.5 28 Federal funds sold to and repurchase agreements with commercial banks 129.4 78.3 85.7 84.7 75.0 75.1 84.4 86.7 92.7 85.9 9900..66 7777..55 29 Other 74.7 71.3 73.3 84.2 86.2 87.7 89.7 92.8 89.2 90.3 89.9 97.9 30 Cash assets4 176.6 142.3 139.3 140.8 142.6 142.0 146.4 143.8 158.0 134.2 140.1 142.9 31 Other assets5 318.3 293.3 302.6 308.2 303.0 309.3 317.7 312.4 313.2 316.8 309.7 313.3 32 Total assets6 3,360.4 3,100.6 3,118.4 3,151.2 3,159.7 3,200.7 3,273.5 3,308.2 3,331.2 3,280.5 3,302.0 3,319.6 Liabilities 33 Deposits 1,869.9 1,810.3 1,814.7 1,810.0 1,812.7 1,841.9 1,867.4 1,878.0 1,898.7 1,867.3 1,861.9 1,872.5 34 Transaction 378.4 305.7 288.9 290.5 286.1 291.5 281.5 267.4 270.3 250.9 265.8 288.3 35 Nontransaction 1,491.5 1,504.6 1,525.7 1,519.5 1,526.6 1,550.4 1,585.9 1,610.5 1,628.5 1,616.4 1,596.1 1,584.2 36 Large time 266.2 250.5 247.0 248.5 243.6 260.8 267.6 271.1 270.7 266.4 268.3 270.7 37 Other 1,225.3 1,254.1 1,278.7 1,271.0 1,283.0 1,289.6 1,318.3 1,339.4 1,357.8 1,350.0 1,327.8 1,313.5 38 Borrowings 714.5 636.8 646.6 665.3 655.5 642.0 676.2 671.5 676.5 669.5 677.1 671.6 39 From banks in the U.S 251.0 191.5 192.6 193.6 187.5 190.7 200.4 206.0 209.2 212.7 208.4 195.6 40 From others 463.5 445.4 453.9 471.7 468.0 451.4 475.8 465.5 467.3 456.8 468.7 476.0 41 Net due to related foreign offices 178.7 163.4 167.6 168.1 163.9 171.6 171.5 175.5 180.4 175.8 182.5 173.2 42 Other liabilities 257.4 169.8 180.9 188.9 210.2 232.9 243.3 254.2 253.9 249.9 248.4 258.1 43 Total liabilities 3,020.5 2,780.3 2,809.7 2,832.3 2,842.3 2,888.4 2,958.4 2,979.1 3,009.6 2,962.6 2,969.8 2,975.3 44 Residual (assets less liabilities)7 340.0 320.3 308.7 318.9 317.4 312.4 315.2 329.1 321.6 317.9 332.2 344.3 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Nonfinancial Statistics • December 2002 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued C. Large domestically chartered commercial banks—Continued Billions of dollars Monthly averages Wednesday figures AAAccccccooouuunnnttt 2001 2002 2002 Sept.' Mar.' Apr.' May' June' July' Aug.' Sept. Sept. 4 Sept. 11 Sept. 18 Sept. 25 Not seasonally adjusted Assets 45 Bank credit 2,695.8 2,559.1 2,561.3 2,577.3 2,597.1 2,615.4 2,665.3 2,709.8 2,718.9 2,691.4 2,713.9 2,715.4 46 Securities in bank credit 637.7 633.2 643.3 661.9 679.8 701.0 730.0 742.5 767.4 732.9 733.9 742.2 47 U.S. government securities 365.9 373.7 383.9 388.8 397.7 404.5 423.3 429.3 444.9 429.3 425.0 424.4 48 Trading account 37.7 33.1 38.2 42.8 42.2 42.4 47.6 42.4 55.3 43.1 44.1 36.9 49 Investment account 328.3 340.6 345.8 346.0 355.5 362.1 375.8 386.9 389.6 386.2 380.9 387.5 50 Mortgage-backed securities . 251.1 263.2 268.0 271.9 277.4 287.2 304.4 307.9 314.7 310.4 301.8 304.8 51 Other 77.2 77.5 77.7 74.0 78.1 74.9 71.4 79.0 74.9 75.8 79.1 82.7 52 One year or less 20.2 20.0 18.4 16.1 14.9 18.6 17.4 19.9 18.8 19.2 20.0 20.2 53 One to five years 34.7 45.3 46.4 45.1 49.9 43.6 42.2 46.3 44.1 44.2 45,9 48.1 54 More than five years .... 22.3 12.2 12.9 12.9 13.3 12.7 11.8 12.9 12.0 12.5 13.2 14.3 55 Other securities 271.8 259.4 259.4 273.1 282.1 296.5 306.7 313.3 322.5 303.7 308.9 317.8 56 Trading account 160.6 122.2 127.0 140.2 147.5 165.5 173.1 172.6 184.5 165.5 170.4 176.0 57 Investment account 111.1 137.2 132.4 132.9 134.5 131.0 133.6 140.7 138.0 138.2 138.5 141.7 58 State and local government . 27.4 27.6 27.0 26.9 27.2 27.7 27.8 28.4 28.1 28.2 28.3 28.5 59 Other 83.7 109.6 105.4 106.0 107.3 103.3 105.7 112.3 109.9 110.0 110.2 113.3 60 Loans and leases in bank credit2 . . . 2,058.1 1,926.0 1,917.9 1,915.4 1,917.4 1,914.4 1,935.3 1,967.2 1,951.5 1,958.4 1,980.0 1,973.2 61 Commercial and industrial 564.5 522.3 514.2 507.2 500.8 488.0 485.1 483.7 485.9 481.9 483.7 484.4 62 Bankers acceptances .0 .0 .0 .0 .0 .0 .0 .0 n.a. n.a. n.a. n.a. 63 Other 564.5 522.3 514.2 507.2 500.8 488.0 485.1 483.7 485.9 481.9 483.7 484.4 64 Real estate 853.8 843.0 844.3 850.6 863.0 881.4 900.6 921.4 911.9 924.1 926.8 916.7 65 Revolving home equity 92.8 104.3 108.1 112.6 117.0 121.5 124.6 126.5 125.3 126.4 127.0 127.8 66 Other 450.8 429.6 426.5 427.0 436.1 449.7 465.4 483.5 476.6 487.4 488.9 476.2 67 Commercial 310.2 309.0 309.7 311.0 310.0 310.2 310.7 311.4 310.1 310.3 311.0 312.7 68 Consumer 254.4 247.2 245.9 246.0 241.0 240.0 245.1 250.3 248.6 249.5 250.7 251.7 69 Credit cards and related plans . 85.5 75.3 73.4 73.4 71.0 69.9 72.5 74.8 74.5 74.5 75.1 75.8 70 Other 168.9 171.9 172.6 172.6 170.0 170.1 172.6 175.4 174.1 175.0 175.7 175.9 71 Security3 89.8 73.5 74.0 76.4 77.2 77.7 76.4 78.9 73.5 73.6 85.7 86.3 72 Federal funds sold to and repurchase agreements with broker-dealers 62.7 61.0 61.9 64.9 65.1 65.4 65.2 68.8 63.4 63.5 75.6 75.9 73 Other 27.1 12.5 12.1 11.5 12.1 12.3 11.2 10.1 10.1 10.1 10.1 10.5 74 State and local government 14.9 13.3 13.1 13.0 13.0 12.8 12.9 13.0 12.9 12.9 12.9 13.0 75 Agricultural 9.9 9.3 9.2 9.3 9.2 9.2 8.2 8.1 8.1 8.2 8.2 8.2 76 Federal funds sold to and repurchase agreements with others 33.1 21.2 22.2 18.9 17.3 13.5 16.4 19.5 17.5 18.9 20.1 20.9 77 All other loans 107.7 65.0 65.2 66.4 69.4 66.3 65.9 68.3 68.4 65.2 68.3 68.3 78 Lease-financing receivables 130.0 131.3 129.7 127.8 126.3 125.5 124.8 124.0 124.6 124.2 123.7 123.6 79 Interbank loans 198.7 149.8 162.8 170.2 166.2 161.8 169.5 174.5 178.8 171.3 177.4 166.2 80 Federal funds sold to and repurchase agreements with commercial banks 126.1 78.4 87.8 85.3 77.3 74.6 82.2 84.4 91.1 83.5 89.0 73.5 81 Other 72.6 71.4 75.0 84.8 88.9 87.2 87.3 90.2 87.6 87.8 88.4 92.8 82 Cash assets4 • 173.5 137.4 141.9 140.2 138.6 136.6 137.3 141.0 165.0 134.7 136.0 133.6 83 Other assets5 320.3 291.9 303.2 307.8 302.5 309.1 315.5 314.3 315.4 319.3 310.1 312.2 84 Total assets6 3,349.7 3,093.4 3,125.3 3,151.4 3,160.2 3,179.1 3,244.3 3,296.6 3,334.2 3,273.3 3,294.2 3,284.6 Liabilities 85 Deposits 1,860.5 1,808.9 1,822.1 1,804.5 1,811.2 1,833.8 1,851.0 1,869.2 1,905.5 1,873.6 1,850.9 1,837.0 86 Transaction 373.0 302.7 296.2 287.6 284.6 286.5 270.1 263.0 273.3 251.7 260.7 272.5 87 Nontransaction 1,487.6 1,506.2 1,525.9 1,516.9 1,526.7 1,547.3 1,580.9 1,606.2 1,632.3 1,621.9 1,590.2 1,564.5 88 Large time 263.7 249.0 245.3 246.7 242.8 258.6 265.9 268.5 269.9 265.9 265.9 265.2 89 Other 1,223.8 1,257.2 1,280.6 1,270.2 1,283.8 1,288.7 1,315.0 1,337.7 1,362.4 1,356.0 1,324.3 1,299.3 90 Borrowings 710.1 634.9 652.7 671.7 654.5 631.9 655.9 668.9 665.0 655.1 681.7 676.2 91 From banks in the U.S 242.6 195.7 197.6 194.8 184.9 186.6 195.2 199.2 203.2 203.8 202.5 188.5 92 From nonbanks in the U.S 467.6 439.2 455.1 476.9 469.6 445.3 460.7 469.7 461.7 451.3 479.2 487.7 93 Net due to related foreign offices 178.2 162.0 160.8 167.8 162.6 166.4 170.5 175.0 179.4 174.8 181.2 175.0 94 Other liabilities 257.0 168.4 174.1 188.4 208.7 226.5 241.8 253.7 252.8 248.9 246.7 260.6 95 Total liabilities 3,005.8 2,774.1 2,809.8 2,832.4 2,837.1 2,858.6 2,919.1 2,966.8 3,002.7 2,952.4 2,960.5 2,948.8 96 Residual (assets less liabilities)7 343.9 319.3 315.5 319.0 323.1 320.5 325.2 329.8 331.4 320.9 333.7 335.8 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 2001 2002 2002 Sept.r Mar.' Apr.' May' June' July' Aug.' Sept. Sept. 4 Sept. 11 Sept. 18 Sept. 25 Seasonally adjusted Assets 1 Bank credit 2,133.6 2,273.0 2,289.8 2,333.2 2,351.1 2,360.9 2,387.3 2,409.6 2,404.7 2,409.6 2,407.8 2,407.2 2 Securities in bank credit 574.6 624.4 631.1 644.6 647.5 647.9 653.6 657.6 660.0 659.8 653.1 655.1 3 U.S. government securities 364.9 408.8 415.2 432.3 437.3 436.5 441.8 449.3 450.5 450.6 445.0 447.8 4 Other securities 209.7 215.6 215.9 212.3 210.2 211.4 211.8 208.3 209.5 209.2 208.0 207.2 5 Loans and leases in bank credit2 .... 1,559.0 1,648.6 1,658.7 1,688.6 1,703.6 1,713.0 1,733.7 1,752.0 1,744.7 1,749.8 1,754.7 1,752.2 6 Commercial and industrial 299.9 301.9 300.5 302.2 303.3 305.2 307.7 309.0 308.4 308.8 308.7 309.3 7 Real estate 857.8 926.2 932.4 954.4 963.7 974.7 986.7 1,000.3 994.9 1,001.2 1,001.8 999.0 8 Revolving home equity 52.2 62.3 63.6 67.7 69.8 71.9 73.7 74.7 74.6 74.4 74.5 74.8 9 Other 805.6 863.9 868.8 886.7 893.9 902.8 913.0 925.6 920.3 926.8 927.3 924.2 10 Consumer 295.4 315.6 322.1 325.5 329.2 325.0 329.7 332.3 331.9 330.9 333.5 332.3 U Security3 8.5 7.6 7.2 7.3 7.6 7.9 8.1 8.3 8.0 7.9 8.3 8.6 1?. Other loans and leases 97.4 97.3 96.5 99.2 99.8 100.3 101.5 102.1 101.4 101.1 102.4 103.0 n Interbank loans 116.3 99.5 89.9 96.0 101.0 107.8 111.4 114.3 110.2 106.9 115.2 122.2 14 Cash assets4 108.8 113.8 114.2 116.1 119.3 121.6 124.1 125.1 127.6 119.5 124.4 125.8 15 Other assets5 126.3 147.2 148.7 149.2 147.7 147.6 153.9 157.1 156.5 159.9 157.5 152.5 16 Total assets6 2,455.8 2,602.9 2,611.7 2,663.4 2,687.8 2,706.8 2,745.0 2,773.8 2,767.1 2,763.8 2,772.5 2,775.5 Liabilities 17 Deposits 1,939.6 2,013.1 2,012.7 2,051.0 2,071.8 2,087.4 2,111.3 2,122.2 2,131.7 2,113.7 2,117.1 2,121.5 18 Transaction 300.0 305.1 302.5 308.1 301.7 311.8 307.9 306.6 299.7 292.9 308.2 325.2 19 Nontransaction 1,639.6 1,708.0 1,710.3 1,742.9 1,770.1 1,775.6 1,803.4 1,815.6 1,832.0 1,820.8 1,808.9 1,796.3 20 Large time 304.2 302.3 301.8 302.2 301.1 302.4 303.0 303.6 303.6 303.3 302.9 303.5 21 Other 1,335.4 1,405.7 1,408.4 1,440.7 1,469.0 1,473.2 1,500.4 1,512.0 1,528.3 1,517.6 1,506.0 1,492.8 22 Borrowings 354.0 380.4 382.7 390.0 391.9 395.9 410.8 427.8 418.5 421.0 427.1 434.5 23 From banks in the U.S 155.4 168.8 166.4 169.3 170.4 173.6 181.7 186.0 183.1 185.2 187.8 188.5 24 From others 198.6 211.6 216.3 220.7 221.5 222.4 229.1 241.8 235.4 235.8 239.2 246.0 25 Net due to related foreign offices 10.7 9.0 9.7 11.6 11.7 9.8 8.5 8.6 8.0 11.0 9.7 7.1 26 Other liabilities 62.0 71.3 71.9 75.3 76.7 76.6 79.4 80.8 79.5 81.3 82.0 80.7 27 Total liabilities 2,366.2 2,473.9 2,477.0 2,527.9 2,552.1 2,569.7 2,609.9 2,639.5 2,637.7 2,626.9 2,636.0 2,643.8 28 Residual (assets less liabilities)7 89.5 129.0 134.6 135.4 135.7 137.1 135.1 134.4 129.4 136.9 136.5 131.8 Not seasonally adjusted Assets 29 Bank credit 2,135.4 2,268.2 2,286.9 2,331.1 2,348.4 2,355.6 2,384.3 2,411.6 2,403.1 2,409.4 2,411.2 2,412.3 30 Securities in bank credit 573.7 626.7 632.3 643.9 647.0 645.8 651.3 656.5 657.7 658.5 652.1 655.4 31 U.S. government securities 364.0 411.1 416.4 431.5 436.8 434.3 439.5 448.2 448.2 449.3 444.0 448.1 32 Other securities 209.7 215.6 215.9 212.3 210.2 211.4 211.8 208.3 209.5 209.2 208.0 207.2 33 Loans and leases in bank credit2 .... 1,561.7 1,641.5 1,654.6 1,687.2 1,701.4 1,709.8 1,733.1 1,755.1 1,745.4 1,750.8 1,759.1 1,756.9 34 Commercial and industrial 298.2 301.6 302.4 304.6 305.4 305.8 306.2 307.3 306.2 306.0 307.3 308.2 35 Real estate 859.2 923.2 930.3 953.6 962.8 973.8 987.4 1,002.0 994.7 1,001.8 1,003.7 1,002.3 36 Revolving home equity 52.5 61.7 63.3 67.5 69.6 71.5 73.5 75.2 74.4 74.7 75.1 75.7 37 Other 806.7 861.5 867.0 886.0 893.2 902.3 913.9 926.8 920.3 927.1 928.6 926.6 38 Consumer 297.2 312.7 318.3 323.1 325.2 320.9 328.4 334.4 332.3 331.8 336.6 335.6 39 Credit cards and related plans . . 131.5 144.7 150.2 149.5 150.0 145.5 152.0 156.5 155.1 154.1 158.6 157.4 40 Other 165.7 168.0 168.1 173.6 175.2 175.4 176.4 177.9 177.2 177.7 178.0 178.1 41 Security3 8.4 7.9 7.4 7.2 7.5 7.7 8.0 8.1 8.3 8.1 8.0 7.9 42 Other loans and leases 98.7 96.1 96.2 98.8 100.5 101.6 103.1 103.4 103.8 103.1 103.5 103.0 43 Interbank loans 113.8 104.2 95.9 91.4 98.1 102.9 109.5 111.5 116.0 111.9 110.5 108.1 44 Cash assets4 108.4 110.0 112.6 115.4 U7.7 119.7 120.3 124.7 137.4 122.0 120.7 120.7 45 Other assets5 126.3 147.2 148.7 149.2 147.7 147.6 153.9 157.1 156.5 159.9 157.5 152.5 46 Total assets6 2,454.7 2,599.0 2,613.2 2,655.9 2,680.6 2,694.7 2,736.4 2,772.7 2,781.0 2,771.1 2,767.5 2,761.4 Liabilities 47 Deposits 1,929.2 2,017.7 2,025.6 2,044.3 2,062.9 2,075.2 2,095.2 2,110.8 2,133.9 2,112.1 2,101.9 2,094.4 48 Transaction 298.2 303.4 304.1 303.3 300.5 309.3 304.2 304.7 308.1 296.0 303.2 314.4 49 Nontransaction 1,631.0 1,714.3 1,721.5 1,741.0 1,762.4 1,765.9 1,790.9 1,806.2 1,825.8 1,816.1 1,798.7 1,780.0 50 Large time 304.2 302.3 301.8 302.2 301.1 302.4 303.0 303.6 303.6 303.3 302.9 303.5 51 Other 1,326.8 1,412.0 1,419.7 1,438.8 1,461.3 1,463.4 1,487.9 1,502.6 1,522.1 1,512.8 1,495.7 1,476.5 52 Borrowings 354.0 380.4 382.7 390.0 391.9 395.9 410.8 427.8 418.5 421.0 427.1 434.5 53 From banks in the U.S 155.4 168.8 166.4 169.3 170.4 173.6 181.7 186.0 183.1 185.2 187.8 188.5 54 From others 198.6 211.6 216.3 220.7 221.5 222.4 229.1 241.8 235.4 235.8 239.2 246.0 55 Net due to related foreign offices 10.7 9.0 9.7 11.6 11.7 9.8 8.5 8.6 8.0 11.0 9.7 7.1 56 Other liabilities 62.0 71.3 71.9 75.3 76.7 76.6 79.4 80.8 79.5 81.3 82.0 80.7 57 Total liabilities 2,355.9 2,478.5 2,490.0 2,521.2 2,543.2 2,557.5 2,593.8 2,628.1 2,639.9 2,625.3 2,620.7 2,616.6 58 Residual (assets less liabilities)7 98.8 120.6 123.2 134.7 137.4 137.2 142.6 144.6 141.1 145.8 146.8 144.7 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Nonfinancial Statistics • December 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 2001 2002 2002 Sept.' Mar.' Apr.' May' June' July' Aug.' Sept. Sept. 4 Sept. 11 Sept. 18 Sept. 25 Seasonally adjusted Assets 1 Bank credit 591.9 597.6 597.9 597.0 605.5 608.8 617.6 615.9 622.6 615.1 622.6 613.8 2 Securities in bank credit 223.1 228.1 225.4 228.4 234.9 236.2 246.1 243.8 248.8 242.2 242.7 243.0 3 U.S. government securities 70.4 68.6 69.5 70.9 73.4 73.5 80.0 85.2 83.8 83.8 85.1 86.5 4 Other securities 152.7 159.6 155.9 157.5 161.5 162.6 166.1 158.7 165.0 158.4 157.7 156.5 5 Loans and leases in bank credit2 .... 368.8 369.5 372.5 368.6 370.6 372.7 371.5 372.1 373.9 372.9 379.9 370.8 6 Commercial and industrial 201.2 201.6 198.0 198.7 194.8 191.6 190.3 185.7 188.6 187.7 187.0 185.4 7 Real estate 18.7 19.3 19.4 19.4 19.6 19.8 19.8 19.9 19.8 19.8 20.0 20.0 8 Security3 79.9 78.7 83.9 79.7 84.7 88.6 89.1 93.5 93.3 92.7 99.9 91.4 9 Other loans and leases 69.1 70.0 71.2 70.8 71.5 72.7 72.4 72.9 72.2 72.7 73.0 73.9 10 Interbank loans 25.7 20.6 21.9 23.4 20.2 17.3 18.1 21.1 21.7 22.8 20.6 20.6 11 Cash assets4 43.8 44.3 46.7 45.3 45.5 45.1 44.9 43.7 45.6 42.6 44.5 43.7 12 Other assets5 33.6 30.1 30.9 30.6 32.8 33.7 33.8 32.4 33.9 32.3 32.0 31.9 13 Total assets6 694.6 692.3 697.0 696.0 703.6 704.6 714.0 712.9 723.4 712.4 719.3 709.6 Liabilities 14 Deposits 410.8 488.0 506.9 507.6 508.3 503.7 497.1 485.5 496.6 494.3 490.4 478.7 15 Transaction 12.5 10.1 10.6 10.9 10.9 10.6 10.9 11.0 11.6 10.8 10.3 11.0 16 Nontransaction 398.3 477.9 496.3 496.7 497.3 493.1 486.2 474.6 485.0 483.4 480.2 467.7 17 Borrowings 217.6 188.7 190.6 190.1 193.8 203.1 214.7 223.6 227.2 219.0 222.2 225.1 18 From banks in the U.S 29.9 21.0 22.3 21.1 21.4 21.2 22.4 23.8 27.0 22.8 19.9 24.4 19 From others 187.7 167.8 168.3 169.1 172.4 181.9 192.3 199.8 200.1 196.1 202.3 200.8 20 Net due to related foreign offices -16.4 -63.0 -73.6 -87.6 -84.7 -90.5 -88.9 -84.5 -92.2 -84.5 -75.6 -87.4 21 Other liabilities 84.4 68.6 68.0 72.6 81.7 87.5 93.5 89.9 92.7 86.9 88.4 90.3 22 Total liabilities 696.4 682.3 691.8 682.7 699.1 703.7 716.4 714.6 724.3 715.7 725.4 706.8 23 Residual (assets less liabilities)7 -1.8 10.0 5.2 13.3 4.5 .9 -2.4 -1.7 -.9 -3.3 -6.1 2.9 Not seasonally adjusted Assets 24 Bank credit 589.0 597.6 597.9 593.1 602.4 602.8 611.5 612.6 613.6 609.2 621.7 612.8 25 Securities in bank credit 223.1 228.1 225.4 228.4 234.9 236.2 246.1 243.8 248.8 242.2 242.7 243.0 26 U.S. government securities 70.4 68.6 69.5 70.9 73.4 73.5 80.0 85.2 83.8 83.8 85.1 86.5 27 Trading account 12.7 9.1 9.3 10.0 10.4 10.5 12.8 14.3 14.3 14.4 14.2 14.3 28 Investment account 57.7 59.5 60.2 60.9 63.0 63.0 67.2 70.8 69.5 69.4 70.9 72.2 29 Other securities 152.7 159.6 155.9 157.5 161.5 162.6 166.1 158.7 165.0 158.4 157.7 156.5 30 Trading account 105.1 98.7 96.3 98.5 102.7 106.8 108.6 102.8 107.1 102.1 101.6 102.0 31 Investment account 47.6 60.8 59.6 59.0 58.7 55.8 57.5 55.9 57.9 56.3 56.0 54.6 32 Loans and leases in bank credit2 .... 365.9 369.4 372.5 364.7 367.5 366.7 365.4 368.8 364.8 367.0 379.0 369.8 33 Commercial and industrial 201.1 203.0 196.8 196.4 193.6 190.3 188.7 185.6 187.0 186.5 187.1 186.1 34 Real estate 18.7 19.3 19.4 19.4 19.6 19.8 19.8 19.9 19.8 19.8 20.0 20.0 35 Security3 77.4 76.4 84.5 78.5 83.1 85.3 85.8 90.7 86.3 88.5 99.5 90.3 36 Other loans and leases 68.6 70.8 71.9 70.4 71.2 71.4 71.1 72.5 71.8 72.2 72.4 73.4 37 Interbank loans 25.7 20.6 21.9 23.4 20.2 17.3 18.1 21.1 21.7 22.8 20.6 20.6 38 Cash assets4 43.8 43.2 44.8 43.8 43.5 43.3 43.5 43.7 44.4 42.2 44.1 44.6 39 Other assets5 34.2 31.0 30.7 30.7 31.4 32.4 33.3 33.1 34.5 33.2 32.6 32.4 40 Total assets6 692.3 691.9 694.9 690.6 697.2 695.4 706.0 710.2 713.8 707.0 718.7 710.0 Liabilities 41 Deposits 400.9 490.2 510.7 512.7 506.4 494.6 482.6 473.6 480.4 478.8 476.1 471.5 42 Transaction 12.7 9.9 10.1 10.5 10.6 10.6 10.6 11.1 11.6 10.8 10.3 11.6 43 Nontransaction 388.2 480.2 500.6 502.2 495.8 484.1 472.0 462.4 468.8 468.0 465.8 459.9 44 Borrowings 217.6 188.7 190.6 190.1 193.8 203.1 214.7 223.6 227.2 219.0 222.2 225.1 45 From banks in the U.S 29.9 21.0 22.3 21.1 21.4 21.2 22.4 23.8 27.0 22.8 19.9 24.4 46 From others 187.7 167.8 168.3 169.1 172.4 181.9 192.3 199.8 200.1 196.1 202.3 200.8 47 Net due to related foreign offices -15.2 -59.9 -75.5 -87.7 -87.3 -94.4 -90.8 -83.5 -93.1 -84.6 -75.1 -83.4 48 Other liabilities 85.0 69.8 67.3 72.5 80.4 85.3 92.4 90.5 92.1 86.9 88.7 92.7 49 Total liabilities 688.2 688.8 693.1 687.7 693.3 688.6 698.9 704.2 706.5 700.0 711.9 705.9 50 Residual (assets less liabilities)7 4.1 3.1 1.9 2.9 3.9 6.8 7.1 6.0 7.3 7.0 6.8 4.1 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A21 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued E Memo items Billions of dollars Monthly averages Wednesday figures AAAccccccooouuunnnttt 2001 2002 2002 Sept.' Mar.r Apr.r May1" June' July' Aug.' Sept. Sept. 4 Sept. 11 Sept. 18 Sept. 25 Not seasonally adjusted MEMO Large domestically chartered banks, adjusted for mergers 1 Revaluation gains on off-balance-sheet items8 100.4 73.2 73.3 80.8 92.9 105.8 112.3 119.1 125.2 107.7 118.7 123.6 2 Revaluation losses on off-balancesheet items8 84.9 52.5 57.5 61.7 75.2 89.2 93.7 100.0 105.7 89.7 99.8 104.6 3 Mortgage-backed securities9 273.7 299.2 302.0 306.1 312.5 319.9 338.0 343.4 348.6 343.8 335.1 342.1 4 Pass-through 210.4 201.3 203.2 210.4 224.6 236.3 253.3 254.6 260.7 256.2 249.0 252.9 5 CMO, REMIC, and other 63.4 98.0 98.8 95.7 88.0 83.6 84.7 88.8 87.9 87.7 86.1 89.2 6 Net unrealized gains (losses) on available-for-sale securities10 7.1 3.2 1.4 4.3 6.6 8.6 9.7 12.4 12.6 11.5 12.4 12.3 7 Off-shore credit to U.S. residents" .... 20.3 19.8 19.7 19.6 19.6 19.1 19.0 19.0 19.0 19.0 19.2 19.0 8 Securitized consumer loans12 98.9 95.9 96.2 96.4 100.3 104.1 102.3 101.5 101.3 101.4 101.3 101.2 9 Credit cards and related plans 88.3 83.6 84.3 84.9 88.1 89.0 87.2 86.8 86.3 86.5 86.5 86.8 10 Other 10.5 12.3 11.9 11.5 12.2 15.1 15.1 14.7 15.0 14.9 14.8 14.4 11 Securitized business loans12 20.0 17.7 17.1 16.7 16.6 17.0 17.7 17.6 17.7 17.7 17.8 17.2 Small domestically chartered commercial banks, adjusted for mergers 12 Mortgage-backed securities9 247.4 283.9 288.1 302.6 305.5 305.1 307.0 312.8 313.0 314.0 310.6 312.3 13 Securitized consumer loans12 236.9 247.1 246.1 246.8 246.7 242.1 240.4 238.1 239.7 239.8 235.9 237.9 14 Credit cards and related plans 228.6 239.4 238.2 239.2 239.7 238.5 237.3 235.1 236.7 236.8 232.9 234.9 15 Other 8.3 7.7 7.9 7.6 7.0 3.6 3.1 3.0 3.1 3.0 3.0 3.0 Foreign - related institutions 16 Revaluation gains on off-balancesheet items8 60.7 47.0 46.3 49.8 54.8 60.7 64.7 62.1 64.8 60.9 61.0 62.1 17 Revaluation losses on off-balancesheet items8 56.1 40.6 39.9 42.8 49.3 57.6 65.1 61.8 64.8 60.7 60.8 61.5 18 Securitized business loans12 13.2 12.4 11.3 10.5 9.9 9.4 9.1 8.1 8.9 8.0 8.2 7.9 NOTE. Tables 1.26, 1.27, and 1.28 have been revised to reflect changes in the Board's H.8 acquiring bank. Balance sheet data for acquired banks are obtained from Call Reports, and a statistical release, "Assets and Liabilities of Commercial Banks in the United States." Table ratio procedure is used to adjust past levels. 1.27, "Assets and Liabilities of Large Weekly Reporting Commercial Banks," and table 1.28, 2. Excludes federal funds sold to, reverse RPs with, and loans made to commercial banks "Large Weekly Reporting U.S. Branches and Agencies of Foreign Banks," are no longer in the United States, all of which are included in "Interbank loans." being published in the Bulletin. Instead, abbreviated balance sheets for both large and small 3. Consists of reverse RPs with brokers and dealers and loans to purchase and carry domestically chartered banks have been included in table 1.26, parts C and D. Data are both securities. merger-adjusted and break-adjusted. In addition, data from large weekly reporting U.S. 4. Includes vault cash, cash items in process of collection, balances due from depository branches and agencies of foreign banks have been replaced by balance sheet estimates of all institutions, and balances due from Federal Reserve Banks. foreign-related institutions and are included in table 1.26, part E. These data are break- 5. Excludes the due-from position with related foreign offices, which is included in "Net adjusted. due to related foreign offices." The not-seasonally-adjusted data for all tables now contain additional balance sheet items, 6. Excludes unearned income, reserves for losses on loans and leases, and reserves for which were available as of October 2, 1996. transfer risk. Loans are reported gross of these items. 1. Covers the following types of institutions in the fifty states and the District of 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 resta' J to include an estimate of these tax effects. remove the estimated effects of mergers between these two groups. The adjustment for 11. Mainly commercial and industrial loans but also includes an unknown amount of credit mergers changes past levels to make them comparable with current levels. Estimated extended to other than nonfinancial businesses. quantities of balance sheet items acquired in mergers are removed from past data for the bank 12. Total amount outstanding. group that contained the acquired bank and put into past data for the group containing the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Nonfinancial Statistics • December 2002 1.32 COMMERCIAL PAPER OUTSTANDING Millions of dollars, seasonally adjusted, end of period Year ending December 2002 IItteemm 1997 1998 1999 2000 2001 Mar. Apr. May June July Aug. 1 All issuers 966,699 1,163,303 1,403,023 1,615,341 1,438,764 1,358,114 1,351,516 1,366,259 1,327,569 1,345,922 1,375,414 Financial companies' 2 Dealer-placed paper, total2 513,307 614,142 786,643 973,060 989,364 964,070 972,268 989,957 986,489 959,798 863,215 3 Directly placed paper, total3 252,536 322,030 337,240 298,848 224,553 205,292 196,056 199,572 169,193 206,942 343,733 4 Nonfinancial companies4 200,857 227,132 279,140 343,433 224,847 188,753 183,192 176,730 171,887 179,182 168,466 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 Average Average Average Date of change Period rate rate rate 1999—Jan. 1 7.75 1999 .... 8.00 2000—Jan. 8.50 2001—Jan. . 9.05 July 1 8.00 2000 .... 9.23 Feb. 8.73 Feb. . 8.50 Aug. 25 8.25 2001 .... 6.91 Mar. 8.83 Mar. . 8.32 Nov. 17 8.50 Apr. 9.00 Apr. . 7.80 1999—Jan. 7.75 May 9.24 May . 7.24 2000—Feb. 3 8.75 Feb. 7.75 June 9.50 June . 6.98 Mar. 22 9.00 Mar. 7.75 July 9.50 July . 6.75 May 17 9.50 Apr. 7.75 Aug. 9.50 Aug. . 6.67 May 7.75 Sept. 9.50 Sept. 6.28 2001—Jan. 4 9.00 June 7.75 Oct. 9.50 Oct. . 5.53 Feb. 1 8.50 July 8.00 Nov. 9.50 Nov. . 5.10 Mar. 21 8.00 Aug. 8.06 Dec. 9.50 Dec. 4.84 Apr. 19 7.50 Sept. 8.25 May 16 7.00 Oct. 8.25 2002—Jan. 4.75 June 28 6.75 Nov. 8.37 Feb. 4.75 Aug. 22 6.50 Dec. 8.50 Mar. 4.75 Sept. 18 6.00 Apr. 4.75 Oct. 3 5.50 May 4.75 Nov. 7 5.00 June 4.75 Dec. 12 4.75 July 4.75 Aug. 4.75 Sept. 4.75 Oct. 4.75 1. The prime rate is one of several base rates that banks use to price short-term business Report. Data in this table also appear in the Board's H.15 (519) weekly and G.13 (415) loans. The table shows the date on which a new rate came to be the predominant one quoted monthly statistical releases. For ordering address, see inside front cover. by a majority of the twenty-five largest banks by asset size, based on the most recent Call Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A23 1.35 INTEREST RATES Money and Capital Markets Percent per year; figures are averages of business day data unless otherwise noted 2002 2002, week ending IItteemm 11999999 22000000 22000011 June July Aug. Sept. Aug. 30 Sept. 6 Sept. 13 Sept. 20 Sept. 27 MONEY MARKET INSTRUMENTS 1 Federal funds1'2-1 4.97 6.24 3.88 1.75 1.73 1.74 1.75 1.76 1.81 1.73 1.73 1.72 2 Discount window borrowing24 4.62 5.73 3.40 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 Commercial paper'-5 6 Nonfinancial 3 1-month 5.09 6.27 3.78 1.74 1.74 1.72 1.73 1.72 1.72 1.73 1.72 1.73 4 2-month 5.14 6.29 3.68 1.74 1.74 1.70 1.72 1.72 1.72 1.72 1.73 1.71 5 3-month 5.18 6.31 3.65 1.76 1.75 1.70 1.72 1.72 1.71 1.72 1.73 1.72 Financial 6 1 -month 5.11 6.28 3.80 1.75 1.74 1.72 1.74 1.75 1.74 1.74 1.74 1.75 7 2-month 5.16 6.30 3.71 1.77 1.75 1.72 1.74 1.74 1.74 1.74 1.75 1.74 8 3-month 5.22 6.33 3.65 1.78 1.76 1.71 1.74 1.75 1.73 1.74 1.75 1.73 Certificates of deposit, secondary market}J 9 1-month 5.19 6.35 3.84 1.80 1.78 1.76 1.78 1.78 1.77 1.78 1.78 1.78 10 3-month 5.33 6.46 3.71 1.81 1.79 1.73 1.76 1.76 1.75 1.77 1.77 1.75 11 6-month 5.46 6.59 3.66 1.92 1.84 1.72 1.74 1.76 1.73 1.76 1.77 1.72 12 Eurodollar deposits, 3-month3 8 5.31 6.45 3.70 1.81 1.78 1.72 1.75 1.76 1.74 1.75 1.76 1.74 U.S. Treasury bills Secondary market3-5 13 4-week n.a. n.a. 2.43 1.69 1.69 1.66 1.65 1.68 1.66 1.67 1.64 1.64 14 3-month 4.64 5.82 3.40 1.70 1.68 1.62 1.63 1.65 1.61 1.66 1.65 1.62 15 6-month 4.75 5.90 3.34 1.79 1.70 1.60 1.60 1.64 1.58 1.64 1.63 1.58 U.S. TREASURY NOTES AND BONDS Constant maturities9 16 1-year 5.08 6.11 3.49 2.20 1.96 1.76 1.72 1.80 1.70 1.78 1.73 1.68 17 2-year 5.43 6.26 3.83 2.99 2.56 2.13 2.00 2.19 2.02 2.12 2.01 1.93 18 3-year 5.49 6.22 4.09 3.49 3.01 2.52 2.32 2.56 2.36 2.45 2.32 2.22 19 5-year 5.55 6.16 4.56 4.19 3.81 3.29 2.94 3.29 3.03 3.08 2.93 2.79 20 7-year 5.79 6.20 4.88 4.60 4.30 3.88 3.50 3.84 3.60 3.63 3.47 3.35 21 10-year 5.65 6.03 5.02 4.93 4.65 4.26 3.87 4.21 3.98 4.00 3.84 3.73 22 20-year 6.20 6.23 5.63 5.65 5.51 5.19 4.87 5.12 4.93 4.95 4.83 4.79 Treasury long-term average10 '1 23 25 years and above n.a. n.a. n.a. 5.66 5.54 5.23 4.90 5.15 4.96 4.98 4.87 4.83 STATE AND LOCAL NOTES AND BONDS Moody's series12 24 Aaa 5.28 5.58 4.99 4.92 4.81 4.78 4.58 4.71 4.62 4.57 4.57 4.54 25 Baa 5.70 6.19 5.75 5.70 5.55 5.53 5.31 5.49 5.39 5.30 5.30 5.26 26 Bond Buyer series13 5.43 5.71 5.15 5.09 5.02 4.95 4.74 4.91 4.78 4.77 4.69 4.71 CORPORATE BONDS 27 Seasoned issues, all industries14 7.45 7.98 7.49 7.22 7.14 6.93 6.73 6.90 6.77 6.79 6.71 6.69 Rating group 28 Aaa15 7.05 7.62 7.08 6.63 6.53 6.37 6.15 6.33 6.21 6.21 6.12 6.10 29 Aa 7.36 7.83 7.26 7.07 6.98 6.84 6.63 6.84 6.70 6.69 6.60 6.56 30 A 7.53 8.11 7.67 7.24 7.15 6.95 6.76 6.94 6.79 6.81 6.73 6.71 31 Baa 7.88 8.37 7.95 7.95 7.90 7.58 7.40 7.51 7.40 7.43 7.37 7.39 MEMO Dividend-price ratiolb 32 Common stocks 1.25 1.15 1.32 1.58 1.76 1.72 1.80 1.71 1.77 1.73 1.82 1.89 NOTE. Some of the data in this table also appear in the Board's H.15 (519) weekly SOURCE: U.S. Department of the Treasury. statistical release. For ordering address, see inside front cover. 10. Based on the unweighted average of the bid yields for all Treasury fixed-coupon 1. The daily effective federal funds rate is a weighted average of rates on trades through securities with remaining terms to maturity of 25 years and over. New York brokers. 11. A factor for adjusting the daily long-term average in order to estaimate a 30-year rate 2. Weekly figures are averages of seven calendar days, ending on Wednesday of the can be found at http://www.treas.gov/offices/domestic-finance/debt-management/interest-rate/ current week; monthly figures include each calendar day in the month. ltcompositeindex.html. 3. Annualized using a 360-day year or bank interest. 12. General obligation bonds based on Thursday figures; Moody's Investors Service. 4. Rate for the Federal Reserve Bank of New York. 13. State and local government general obligation bonds maturing in twenty years are used 5. Quoted on a discount basis. in compiling this index. The twenty-bond index has a rating roughly equivalent to Moodys' 6. Interest rates interpolated from data on certain commercial paper trades settled by the A1 rating. Based on Thursday figures. Depository Trust Company. The trades represent sales of commercial paper by dealers or 14. Daily figures are averages of Aaa, Aa, A, and Baa yields from Moody's Investors direct issuers to investors (that is, the offer side). See the Board's Commercial Paper web Service. Based on yields to maturity on selected long-term bonds. pages (http://www.federalreserve.gov/releases/cp) for more information. 15. Effective December 7, 2001, the Moody's Aaa yield includes yields only for industrial 7. An average of dealer offering rates on nationally traded certificates of deposit. firms. Prior to December 7, 2001, the Aaa yield represented both utilities and industrial. 8. Bid rates for eurodollar deposits collected around 9:30 a.m. Eastern time. Data are for 16. Standard & Poor's corporate series. Common stock ratio is based on the 500 stocks in indication purposes only. the price index. 9. Yields on actively traded issues adjusted to constant maturities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Nonfinancial Statistics • December 2002 1.36 STOCK MARKET Selected Statistics 2002 IInnddiiccaattoorr 11999999 22000000 22000011 Jan. Feb. Mar. Apr. May June July Aug. Sept. Prices and trading volume (averages of daily figures) CCCCCCCooooooommmmmmmmmmmmmmooooooonnnnnnn ssssssstttttttoooooooccccccckkkkkkk ppppppprrrrrrriiiiiiiccccccceeeeeeesssssss (((((((iiiiiiinnnnnnndddddddeeeeeeexxxxxxxeeeeeeesssssss))))))) 1111111 NNNNNNNeeeeeeewwwwwww YYYYYYYooooooorrrrrrrkkkkkkk SSSSSSStttttttoooooooccccccckkkkkkk EEEEEEExxxxxxxccccccchhhhhhhaaaaaaannnnnnngggggggeeeeeee (((((((DDDDDDDeeeeeeeccccccc....... 33333331111111,,,,,,, 1111111999999966666665555555 ======= 55555550000000))))))) 619.52 643.71 606.03 581.74 569.55 600.74 587.58 575.75 544.36 486.11 491.84 471.04 2222222 IIIIIIInnnnnnnddddddduuuuuuussssssstttttttrrrrrrriiiiiiiaaaaaaalllllll 775.29 809.40 749.46 723.56 715.80 751.79 732.71 718.12 677.58 603.04 611.34 589.14 3333333 TTTTTTTrrrrrrraaaaaaannnnnnnssssssspppppppooooooorrrrrrrtttttttaaaaaaatttttttiiiiiiiooooooonnnnnnn 491.62 414.73 444.45 446.13 453.51 490.51 470.00 459.55 449.42 416.07 409.96 388.19 4444444 UUUUUUUtttttttiiiiiiillllllliiiiiiitttttttyyyyyyy 284.82 478.99 377.72 322.92 301.32 316.25 300.57 287.10 265.21 230.21 225.52 210.76 5555555 FFFFFFFiiiiiiinnnnnnnaaaaaaannnnnnnccccccceeeeeee 530.97 552.48 596.61 591.94 570.18 609.72 610.24 603.15 577.05 524.01 533.60 506.05 6666666 SSSSSSStttttttaaaaaaannnnnnndddddddaaaaaaarrrrrrrddddddd &&&&&&& PPPPPPPoooooooooooooorrrrrrr'''''''sssssss CCCCCCCooooooorrrrrrrpppppppooooooorrrrrrraaaaaaatttttttiiiiiiiooooooonnnnnnn (((((((1111111999999944444441111111^^^^^^^3333333======= 11111110000000)))))))''''''' 1,327.33 1,427.22 1,194.18 1,140.21 1,100.67 1,153.79 1,112.03 1,079.27 1,014.05 903.59 912.55 867.81 7777777 AAAAAAAmmmmmmmeeeeeeerrrrrrriiiiiiicccccccaaaaaaannnnnnn SSSSSSStttttttoooooooccccccckkkkkkk EEEEEEExxxxxxxccccccchhhhhhhaaaaaaannnnnnngggggggeeeeeee (((((((AAAAAAAuuuuuuuggggggg....... 33333331111111,,,,,,, 1111111999999977777773333333 -------55555550000000)))))))2222222 770.90 922.22 879.08 835.02 845.81 891.08 915.09 935.10 911.59 840.76 843.89 852.03 VVVVVVVooooooollllllluuuuuuummmmmmmeeeeeee ooooooofffffff tttttttrrrrrrraaaaaaadddddddiiiiiiinnnnnnnggggggg (((((((ttttttthhhhhhhooooooouuuuuuusssssssaaaaaaannnnnnndddddddsssssss ooooooofffffff ssssssshhhhhhhaaaaaaarrrrrrreeeeeeesssssss))))))) 8888888 NNNNNNNeeeeeeewwwwwww YYYYYYYooooooorrrrrrrkkkkkkk SSSSSSStttttttoooooooccccccckkkkkkk EEEEEEExxxxxxxccccccchhhhhhhaaaaaaannnnnnngggggggeeeeeee 799,554 1,026,867 1,216,529 1,401,913 1,362,830 1,321,351 1,280,714 1,215,786 1,539,282 1,848,962 1,317,105 1,370,143 9999999 AAAAAAAmmmmmmmeeeeeeerrrrrrriiiiiiicccccccaaaaaaannnnnnn SSSSSSStttttttoooooooccccccckkkkkkk EEEEEEExxxxxxxccccccchhhhhhhaaaaaaannnnnnngggggggeeeeeee 32,629 51,437 68,074 55,151 55,657 56,375 n.a. n.a. n.a. n.a. n.a. n.a. Customer financing (millions of dollars, end-of-period balances) 11111110000000 MMMMMMMaaaaaaarrrrrrrgggggggiiiiiiinnnnnnn cccccccrrrrrrreeeeeeedddddddiiiiiiittttttt aaaaaaattttttt bbbbbbbrrrrrrroooooookkkkkkkeeeeeeerrrrrrr-------dddddddeeeeeeeaaaaaaallllllleeeeeeerrrrrrrsssssss3333333 228,530 198,790 150,450 150,390 147,030 149,370 150,940 150,860 146,270 136,160 132,800 130,210 FFFFFFFrrrrrrreeeeeeeeeeeeee cccccccrrrrrrreeeeeeedddddddiiiiiiittttttt bbbbbbbaaaaaaalllllllaaaaaaannnnnnnccccccceeeeeeesssssss aaaaaaattttttt bbbbbbbrrrrrrroooooookkkkkkkeeeeeeerrrrrrrsssssss4444444 11111111111111 MMMMMMMaaaaaaarrrrrrrgggggggiiiiiiinnnnnnn aaaaaaaccccccccccccccooooooouuuuuuunnnnnnntttttttsssssss5555555 55,130 100,680 101,640 97,330 99,350 93,700 92,140 92,950 95,830 98,080 95,400 98,630 11111112222222 CCCCCCCaaaaaaassssssshhhhhhh aaaaaaaccccccccccccccooooooouuuuuuunnnnnnntttttttsssssss 79,070 84,400 78,040 75,110 72,730 69,790 68,540 66,120 68,280 68,860 63,700 67,550 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 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 2000 2001 2002 IItteemm Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 1 Federal debt outstanding 5,701.9 5,803.5 5,800.6 5,753.9 5,834.5 5,970.3 6,032.4 6,153.3 6,255.4 7 Public debt securities 5,674.2 5,662.2 5,773.7 5,726.8 5,807.5 5,943.4 6,006.0 6,126.5 6,228.2 3 Held by public 3,438.5 3,527.4 3,434.4 3,274.2 3,338.7 3,393.8 3,443.7 3,463.5 3,552.6 4 Held by agencies 2,235.7 2,248.7 2,339.4 2,452.6 2,468.8 2,549.7 2,562.4 2,662.9 2,675.6 5 Agency securities 27.7 27.4 26.8 27.1 27.0 26.8 26.4 26.8 27.2 6 Held by public 27.6 27.3 26.8 27.1 27.0 26.8 26.4 26.8 n.a. 7 Held by agencies .1 .1 .1 .0 .0 .0 .0 .0 n.a. 8 Debt subject to statutory limit 5,591.6 5,580.5 5,692.5 5,645.0 5,732.6 5,871.4 5,935.1 6,058.3 6,161.4 9 Public debt securities 5,591.4 5,580.2 5,692.3 5,644.8 5,732.4 5,871.2 5,935.0 6,058.1 6,161.1 10 Other debt1 .2 .2 .2 .2 .2 .3 .2 .2 .3 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 6,400.0 6,400.0 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 US. TREASURY Types and Ownership Billions of dollars, end of period 2001 2002 TTyyppee aanndd hhoollddeerr 11999988 11999999 22000000 22000011 Q4 Ql Q2 Q3 I Total gross public debt 5,614.2 5,776.1 5,662.2 5,943.4 5,943.4 6,006.0 6,126.5 6,228.2 By type 2 Interest-bearing 5,605.4 5,766.1 5,618.1 5,930.8 5,930.8 5,962.2 6,087.0 6,216.3 3 Marketable 3,355.5 3,281.0 2,966.9 2,982.9 2,982.9 3,003.3 3,024.8 3,136.6 4 Bills 691.0 737.1 646.9 811.3 811.3 834.4 822.5 868.3 5 Notes 1,960.7 1,784.5 1,557.3 1,413.9 1,413.9 1,411.7 1,446.9 1,521.5 6 Bonds 621.2 643.7 626.5 602.7 602.7 596.7 592.9 592.9 7 Inflation-indexed notes and bonds1 67.6 100.7 121.2 140.1 140.1 145.6 147.5 138.9 8 Nonmarketable2 2,249.9 2,485.1 2,651.2 2,947.9 2,947.9 2,958.9 3,062.2 3,079.6 9 State and local government series 165.3 165.7 151.0 146.3 146.3 141.1 142.8 144.3 10 Foreign issues3 34.3 31.3 27.2 15.4 15.4 14.6 13.3 12.5 11 Government 34.3 31.3 27.2 15.4 15.4 14.6 13.3 12.5 17 Public .0 .0 .0 .0 .0 .0 .0 .0 13 Savings bonds and notes 180.3 179.4 176.9 181.5 181.5 183.6 184.8 185.6 14 Government account series4 1,840.0 2,078.7 2,266.1 2,574.8 2,574.8 2,589.7 2,691.4 2,707.3 15 Non-interest-bearing 8.8 10.0 44.2 12.7 12.7 43.8 39.5 12.0 By holder1 16 U.S. Treasury and other federal agencies and trust funds 1,828.1 2,064.2 2,270.1 2,572.2 2,572.2 2,581.4' 2,686.0 n.a. 17 Federal Reserve Banks6 452.1 ,0r 511.7 551.7 551.7 575.4 590.7 604.2 18 Private investors 3,334.0 3,233.9 2,880.4 2,819.5 2,819.5 2,849.2 2,849.8 n.a. 19 Depository institutions 237.4 248.7 201.5 181.7 181.7 187.6 204.4 n.a. 7.0 Mutual funds 253.9 229.1 221.8 256.8 256.8 263.4 251.8 n.a. 21 Insurance companies 141.7 123.4 110.2 82.4 82.4 108.4 110.2 n.a. 22 State and local treasuries7 269.3 266.8 236.2 209.0 209.0 261.2 270.0 n.a. Individuals 73 Savings bonds 186.6 186.4 184.8 190.3 190.3 191.9 192.7 n.a. 74 Pension funds 330.2 321.0 304.1 289.3 289.3 293.3 297.5 n.a. 75 Private 112.5 109.8 108.4 103.3 103.3 106.3 107.5 n.a. 76 State and Local 217.7 211.2 195.7 186.0 186.0 187.0 190.0 n.a. 27 Foreign and international8 1,278.7 1,268.7 1,034.2 1,218.1 1,218.1 1,047.5 1,072.4 n.a. 28 Other miscellaneous investors7-9 636.3 591.5 588.3 390.8 390.8 560.7 n.a. 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

A26 Domestic Nonfinancial Statistics • December 2002 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1 Millions of dollars, daily averages 2002 2002, week ending June July Aug. July 31 Aug. 7 Aug. 14 Aug. 21 Aug. 28 Sept. 4 Sept. 11 Sept. 18 Sept. 25 By type of security 1 U.S. Treasury bills 42,869 42,178 42,257 48,688 36,025 47,719 44,464 37,804 49,793 44,674 48,206 45,376 Treasury coupon securities by maturity 2 Three years or less 123,577 135,856 130,594 141,638 118,681 138,667 116,346 143,589 143,322 118,131 110077,,775544 172,167 3 More than three but less than or equal to six years 92,356 107,925 109,759 126,178 139,409 116,080 100,084 82,617 111,873 110000,,229900 110099,,223311 9999,,441188 4 More than six but less than or equal to eleven years 77,695 80,832 89,647 87,212 90,304 106,144 93,992 70,579 83,573 74,353 83,124 85,916 5 More than eleven 19,744 20,675 19,554 24,319 17,067 25,060 22,049 14,546 18,288 14,290 26,841 25,918 6 Inflation-indexed2 2,460 3,994 2,042 2,543 2,089 2,456 2,111 1,367 2,408 2,104 2,796 2,408 Federal agency and governmentsponsored enterprises 7 Discount notes 52,908 55,917 50,486 58,870 52,940 48,736 46,327 50,022 60,279 40,553 49,186 50,967 Coupon securities by maturity 8 Three years or less 12,688 12,527 12,894 10,277 14,379 14,713 10,639 13,468 8,839 10,486 11,204 14,618 9 More than three years but less than or equal to six years 9,209 10,845 8,920 11,561 8,755 11,129 8,056 8,181 7,822 6,908 12,683 11,624 10 More than six years but less than or equal to eleven years .... 8,080 9,263 7,018 9,260 7,408 7,048 8,987 5,324 5,285 5,306 4,819 11,987 11 More than eleven years 993 966 1,081 857 717 1,085 1,523 1,108 812 1,171 1,022 1,198 12 Mortgage-backed 153,644 162,421 158,250 140,610 179,875 203,676 136,392 118,977 143,453 228,001 192,966 148,920 Corporate securities 13 One year or less 98,759 90,211 105,549 83,177 91,629 105,965 121,819 102,695 105,771 95,294 118,493 108,092 14 More than one year 18,584 15,545 15,327 16,710 15,005 14,518 15,718 17,171 12,568 15,135 20,906 21,826 By type of counterparty With interdealer broker 15 U.S. Treasury 169,496 185,034 181,302 200,437 187,263 200,780 178,072 157,783 184,572 163,619 180,012 205,152 16 Federal agency and governmentsponsored enterprises 11,753 12,940 10,840 14,162 13,188 12,514 9,739 9,004 8,131 7,697 9,342 14,221 17 Mortgage-backed 43,341 44,182 48,029 39,445 54,652 60,798 40,083 37,085 46,777 67,567 59,950 51,364 18 Corporate 353 321 308 308 294 297 330 339 240 324 346 463 With other 19 U.S. Treasury 189,206 206,426 212,551 230,140 216,311 235,347 200,975 192,719 224,685 190,223 197,941 226,051 20 Federal agency and governmentsponsored enterprises 72,124 76,577 69,560 76,663 71,011 70,198 65,793 69,099 74,906 56,728 69,572 76,175 21 Mortgage-backed 110,302 118,239 110,221 101,165 125,224 142,878 96,309 81,892 96,676 160,435 133,015 97,557 22 Corporate 116,990 105,436 120,568 99,579 106,340 120,186 137,207 119,528 118,098 110,105 139,052 129,455 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 All 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 2002 2002, week ending Item, by type ot security June July Aug. July 31 Aug. 7 Aug. 14 Aug. 21 Aug. 28 Sept. 4 Sept. 11 Sept. 18 Net outright positions2 1 U.S. Treasury bills 13,975 18,313 11,225 19,575 21,804 10,124 4,213 7,508 14,143 13,828 6,768 Treasury coupon securities by maturity 2 Three years or less -21,351 -21,724 -22,358 -21,290 -18,298 -23,284 -27,236 -23,172 -16,391 -16,805 -15,484 3 More than three years but less than or equal to six years -24,943 -27,887 -31,298 -33,519 -34,974 -31,241 -27,298 -29,855 -35,557 -34,322 -38,199 4 More than six but less than or equal to eleven years -19,472 -18,793 -10,829 -17,054 -10,130 -9,182 -10,234 -12,894 -12,873 -15,220 -17,548 5 More than eleven 6,658 9,643 9,542 11,101 9,739 10,112 9,266 9,445 8,621 10,336 8,210 6 Inflation-indexed 3,518 2,095 1,615 1,872 427 1,711 1,980 2,503 1,243 1,401 1,552 Federal agency and governmentsponsored enterprises 7 Discount notes 44,125 43,513 49,090 41,320 45,472 50,153 50,376 48,817 52,688 4455,,113300 45,651 Coupon securities, by maturity 8 Three years or less 12,609 13,689 14,220 13,994 13,339 16,620 12,840 13,243 16,180 14,166 13,262 9 More than three years but less than or equal to six years 2,630 2,940 3,172 2,165 2,684 4,583 4,032 1,866 2,061 1,124 3,037 10 More than six but less than or equal to eleven years 2,511 2,518 2,805 3,830 3,695 3.035 1,957 2,568 2,719 2,232 2,577 11 More than eleven 2,584 1,843 2,197 1,803 1,629 2,947 2,002 2,160 2,314 2,164 2,295 12 Mortgage-backed 19,395 27,103 19,408 27,681 24,872 22,143 16,190 15,121 17,788 16,350 17,696 Corporate securities 13 One year or less 30,969 26,671 25,138 23,446 23,171 29,677 26,343 21,913 23,845 24,123 24,064 14 More than one year 45,463 50,029 47,631 46,617 49,486 48,898 46,666 45,620 47,294 45,056 46,976 Financing3 Securities in, U.S. Treasury 15 Overnight and continuing 566,475 597,214 621,725 602,249 627,604 631,026 625,728 597,235 634,109 612,503 622,927 16 Term 769,738 783,021 851,220 852,442 892,391 908,520 787,326 827,454 825,997 891,493 935,987 Federal agency and governmentsponsored enterprises 17 Overnight and continuing 149,080 148,869 152,003 147,273 151,416 153,828 148,786 149,875 161,585 153,590 155,997 18 Term 266,594 286,823 297,317 286,177 290,934 305,585 294,282 300,758 291,973 308,592 305,214 Mortgage-backed securities 19 Overnight and continuing 35,635 36,290 43,387 36,506 36,092 40,775 42,019 50,438 53,245 49,137 47,826 20 Term 254,824 265,468 272,722 266,246 275,831 283,351 269,615 266,519 262,391 281,581 281,670 Corporate securities 21 Overnight and continuing 49,156 49,918 51,730 49,970 50,259 51,977 52,702 51,805 52,142 51,613 50,540 22 Term 23,012 21,166 23,156 21,711 22,798 22,740 22,913 23,367 25,040 25,570 25,875 MEMO Reverse repurchase agreements 23 Overnight and continuing 396,527 423,236 461,682 450,997 451,401 460,869 456,568 460,442 502,394 460,847 472,576 24 Term 1,173,796 1,208,829 1,296,922 1,261,119 1,335,463 1,373,965 1,227,783 1,268,169 1,255,637 1,356,560 1,398,606 Securities out, U.S. Treasury 25 Overnight and continuing 522,398 544,079 584,373 552,316 576,449 592,700 589,659 568,356 608,472 599,755 589,210 26 Term 721,751 741,879 791,145 801,354 846,923 861,847 724,309 750,927 745,822 812,927 861,050 Federal agency and governmentsponsored enterprises 27 Overnight and continuing 260,537 269,456 279,430 268,788 270,219 297,144 274,500 276,594 277,706 272,784 277,245 28 Term 205,253 214,229 225,030 203,265 220,026 227,274 221,624 230,341 227,020 242,059 239,226 Mortgage-backed securities 29 Overnight and continuing 287,396 306,489 314,045 289,367 295,699 330,789 318,907 320,480 291,424 288,941 318,178 30 Term 184,380 176,112 171,418 164,965 168,548 168,327 177,169 171,189 172,445 192,671 175,240 Corporate securities 31 Overnight and continuing 128,188 129,395 131,536 128,788 129,994 139,215 131,917 126,731 127,535 127,520 127,636 32 Term 17,131 16,983 18,074 17,344 18,816 17,765 18,123 17,291 18,773 20,515 20,281 MEMO Repurchase agreements 33 Overnight and continuing 1,035,629 1,079,724 1,148,724 1,076,329 1,106,192 1,188,133 1,157,495 1,139,562 1,156,919 1,129,897 1,153,515 34 Term 1,102,716 1,122,435 1,176,213 1,158,587 1,223,800 1,246,563 1,110,449 1,141,829 1,134,701 1,237,932 1,267,030 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

A28 Domestic Nonfinancial Statistics • December 2002 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 2002 AAggeennccyy 11999988 11999999 22000000 22000011 Mar. Apr. May June July 1 Federal and federally sponsored agencies 1,022,609 1,296,477 1,616,492 1,851,632 2,169,030 2,144,106 2,150,724 2,161,580 n.a. 2 Federal agencies 27,792 26,502 26.376 25,666 172 188 208 223 223 3 Defense Department1 6 6 6 6 6 6 6 6 6 4 Export-Import Bank23 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 26,379 26,331 26,450 26,826 26,541 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 25,660 166 182 202 217 217 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 2,168,858 2,143,918 2,150,516 2,161,357 n.a. 11 Federal Home Loan Banks 313,919 382,131 529,005 594,404 625,849 637,963 640,222 643,102 651,253 12 Federal Home Loan Mortgage Corporation 169,200 287,396 360,711 426,899 603,447 596,800 601,037 601,363 604,853 13 Federal National Mortgage Association 369.774 460,291 547,619 642,700 769,800 783,100 782,000 789,000 784,020 14 Farm Credit Banks8 63,517 63,488 68,883 74,181 79,002 79,186 80,258 80,951 81,265 15 Student Loan Marketing Association9 37,717 35,399 41,988 45,375 48,200 49,500 48,900 49,600 48,500 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 38,027 37,639 37,175 37,091 37,830 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 n.a. n.a. n.a. n.a. n.a. 7,6 Rural Electrification Administration 14,898 14,091 14,085 13,126 14,055 14,053 14,184 14,301 14,338 27 Other 20,110 20,538 21,402 22,174 23,972 23,586 22,991 22,790 23,492 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 (2. 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 A29 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 2002 TTyyppee ooff ii oo ss rr ss uu uu ee ss ee oo rr iissssuueerr,, 11999999 22000000 22000011 Feb. Mar. Apr. May June July Aug. Sept. 1 All issues, new and refunding1 215,427 180,403 270,566 20,175 23,842 23,261 32,858 36,315 25,771 28,918 27,313 By type of issue 2 General obligation 73,308 64,475 100,519 8,652 10,269 8,559 10,446 16,166 10,130 10,226 9,562 3 Revenue 142,120 115,928 170,047 11,523 13,574 14,702 22,413 20,149 15,642 18,692 17,751 By type of issuer 4 State 16,376 19,944 30,099 3,238 3,265 3,057 1,531 3,718 3,404 3,472 2,442 5 Special district or statutory authority2 152,418 111,695 179,427 11,950 15,479 15,520 23,866 27,283 16,007 20,144 19,105 6 Municipality, county, or township 46,634 39,273 61,040 4,987 5,098 4,683 7,461 5,315 6,361 5,302 5,767 7 Issues for new capital 161,065 154,257 192,161 13,248 16,856 17,115 20,663 23,727 19,189 19,392 15,022 By use of proceeds 8 Education 36,563 38,665 50,054 3,961 5,484 5,279 6,027 7,060 4,205 3,968 3,529 9 Transportation 17,394 19,730 21,411 613 1,633 773 1,795 3,351 3,251 4,413 1,398 10 Utilities and conservation 15,098 11,917 21,917 1,606 1,290 2,091 1,785 1,087 1,660 2,806 2,038 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 9,099 7,122 6,607 125 515 344 614 631 760 283 574 13 Other purposes 47,896 47,309 55,733 4,897 4,894 6,784 6,962 7,653 5,893 6,537 5,597 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 U.S. Corporations Millions of dollars 2002 TTyyppee ooff oo ii rr ss ss iiss uu ss ee uu ,, ee oo rr ff ffeerriinngg,, 11999999 22000000 22000011 Jan. Feb. Mar. Apr. May June July Aug. 1 All issues' 1,072,866 942,198 1,382,003 102,688 86,090 158,904 103,575 112,103 136,623 59,058 88,222 2 Bonds2 941,298 807,281 1,253,449 88,241 79,515 145,984 93,039 103,141 120,087 54,544 84,216 By type of offering 3 Sold in the United States 818.683 684,484 1,197,060 79,472 73,474 128,026 88,051 93,279 108,362 51,182 80,772 4 Sold abroad 122,615 122,798 56,389 8,770 6,041 17,958 4,989 9,862 11,725 3,362 3,444 MEMO 5 Private placements, domestic 24,703 18,370 8,734 0 0 0 0 4,506 3,068 0 0 By industry group 6 Nonfinancial 293,963 242,207 445,930 18,894 30,770 43,231 34,803 19,157 26,696 7,432 14,407 7 Financial 647,335 565,074 807,519 69,348 48,746 102,753 58,237 83,984 93,392 47,112 69,809 8 Stocks3 242,941r 312,689r 231,288r 14,447 6,575 12,920 10,536 8,962 16,536 4,514 4,006 By type of offering 9 Public 131,568 134,917 128,554 14,447 6,575 12,920 10,536 8,962 16,536 4,514 4,006 10 Private placement4 11 l,373r 177,772r 102,734r n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By industry group 11 Nonfinancial 110,284 118,369 77,577 9,579 4,024 . 4,893 7,834 6,633 11,608 1,833 539 12 Financial 21,284 16,548 50,977 4,868 2,551 8,027 2,702 2,329 4,928 2,681 3,467 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 for private placements are not available at a monthly frequency. 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

A30 Domestic Nonfinancial Statistics • December 2002 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets1 Millions of dollars 2002 IItteemm 22000000 22000011 Feb. Mar. Apr. May June July Aug.r Sept. 1 Sales of own shares2 2,279,315 1,806,474 141,463 170,326 164,504 154,987 138,520 170,946 151,136 125,942 2 Redemptions of own shares 2,057,277 1,677,266 123,013 130,661 140,524 138,052 144,153 200,148 136,210 126,762 3 Net sales3 222,038 129,208 18,450 39,665 23,980 16,935 -5,633 -29,202 14,926 -820 4 Assets4 5,123,747 4,689,624 4,623,041 4,814,961 4,704,886 4,693,928 4,434,603 4,124,186 4,170,641 3,901,609 5 Cash5 277,386 219,620 234,510 241,078 249,078 243,755 208,390 199,586 220,425 199,835 6 Other 4,846,361 4,470,004 4,388,531 4,573,883 4,455,808 4,450,173 4,226,213 3,924,600 3,950,216 3,701,774 1. Data include stock, hybrid, and bond mutual funds and exclude money market mutual 4. Market value at end of period, less current liabilities. funds. 5. Includes all U.S. Treasury securities and other short-term debt securities. 2. Excludes reinvestment of net income dividends and capital gains distributions and share SOURCE. Investment Company Institute. Data based on reports of membership, which issue of conversions from one fund to another in the same group. comprises substantially all open-end investment companies registered with the Securities and 3. Excludes sales and redemptions resulting from transfers of shares into or out of money Exchange Commission. Data reflect underwritings of newly formed companies after their market mutual funds within the same fund family. initial offering of securities. 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1 Billions of dollars, end of period; not seasonally adjusted 2001 2002 AAccccoouunntt 11999999 22000000 22000011 Ql Q2 Q3 Q4 Qlr Q2< Q3 ASSETS 1 Accounts receivable, gross2 845.4 958.7 948.3 954.5 988.8 967.8 948.3 930.0 941.9 943.4 2 Consumer 304.4 328.0 340.1 319.3 324.6 329.3 340.1 329.8 332.0 332.6 3 Business 395.1 458.4 447.0 459.1 481.9 451.1 447.0 443.0 449.4 445.5 4 Real estate 145.8 172.3 161.3 176.1 182.3 187.4 161.3 157.2 160.5 165.3 5 LESS; Reserves for unearned income 61.4 69.7 60.6 69.9 61.5 60.8 60.6 59.5 58.5 57.9 6 Reserves for losses 14.7 16.7 21.0 17.2 17.4 18.0 21.0 21.5 21.6 22.0 7 Accounts receivable, net 769.3 872.3 866.7 867.3 909.8 889.0 866.7 849.0 861.9 863.6 8 All other 406.6 461.5 523.4 474.8 458.9 478.7 523.4 515.2 530.6 557.7 9 Total assets 1,175.9 1,333.7 1390.1 1,342.1 1,368.7 1367.7 1,390.1 1364.2 1,392.5 1,421.2 LIABILITIES AND CAPITAL 10 Bank loans 35.4 35.9 50.8 41.6 45.3 44.5 50.8 49.4 56.9 74.9 11 Commercial paper 230.4 238.8 158.6 180.9 181.6 171.0 158.6 137.0 130.8 143.1 Debt 12 Owed to parent 87.8 102.5 99.2 97.2 93.4 91.7 99.2 82.6 83.3 82.8 13 Not elsewhere classified 429.9 502.2 567.4 533.8 542.1 555.8 567.4 574.4 597.2 584.4 14 All other liabilities 237.8 301.8 325.5 325.2 336.3 327.6 325.5 329.1 331.5 341.6 15 Capital, surplus, and undivided profits 154.5 152.5 188.6 163.5 170.0 177.2 188.6 191.7 192.9 194.4 16 Total liabilities and capital 1,175.9 1333.7 1,390.1 1342.1 1,368.7 1,367.7 1,390.1 1364.2 1392.5 1,421.2 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 A31 1.52 DOMESTIC FINANCE COMPANIES Owned and Managed Receivables1 Billions of dollars, amounts outstanding 2002 TTyyppee ooff ccrreeddiitt Mar. Apr. May June July Aug. Seasonally adjusted 1 Total 1,031.2 1,187.0 1,248.5 1,241.0 1,238.4 1,245.4 1,261.0' 1,271.lr 1,270.5 2 Consumer 410.2 465.2 514.6 520.0 521.0 521.8 527.7' 530.9' 525.5 3 Real estate 174.0 198.9 207.7 198.3 196.2 200.8 203.1 206.7 209.6 4 Business 446.9 522.8 526.2 522.7 521.1 522.8 530.2 533.5 535.4 Not seasonally adjusted 5 Total 1,036.4 1,192.2 1,253.7 1,245.8 1,243.8 1,248.5 l,267.2r 1,266.4' 1,262.5 6 Consumer 412.7 468.3 518.1 515.6 517.1 517.9 527.6' 531.3' 527.7 7 Motor vehicle loans 129.2 141.6 173.9 172.0r 168.9' 168.9' 170.5' 172.8' 169.4 8 Motor vehicle leases 102.9 108.2 103.5 97.5 96.8 96.1 96.4' 94.9' 90.5 9 Revolving2 32.5 37.6 31.5 28.0 29.7 30.1 32.1 36.1' 35.6 10 Other3 39.8 40.7 31.1 32.4 32.5 33.3 33.2 33.0 32.9 Securitized assets4 11 Motor vehicle loans 73.1 97.1 131.9 137.7r 142.2' 143.2' 145.0' 144.8' 149.0 12 Motor vehicle leases 9.7 6.6 6.8 6.5 6.3 6.3 6.2 6.1 6.0 13 Revolving 6.7 19.6 25.0 26.5 26.2 25.8 29.2 28.9 29.9 14 Other 18.8 17.1 14.3 15.1 14.4 14.3 15.0 14.7 14.4 15 Real estate 174.0 198.9 207.7 198.3 196.2 200.8 203.1 206.7 209.6 16 One- to four-family 108.2 130.6 120.1 120.4 116.9 120.4 121.8 125.7 128.7 17 Other 37.6 41.7 41.2 36.8 37.2 38.1 38.7 38.8 38.9 Securitized real estate assets4 18 One- to four-family 28.0 24.7 40.7 39.7 40.8 40.9 40.9 40.6 40.4 19 Other .2 1.9 5.7 1.4 1.4 1.4 1.7 1.7 1.7 20 Business 449.6 525.0 527.9 531.9 530.6 529.8 536.5 528.3 525.2 21 Motor vehicles 69.4 75.5 54.0 58.0 57.0 61.1 59.9 56.6 55.8 22 Retail loans 21.1 18.3 16.1 17.1 16.0 16.4 17.0 17.4 17.0 73 Wholesale loans5 34.8 39.7 20.3 22.8 23.0 26.9 25.8 22.3 22.2 24 Leases 13.6 17.6 17.6 18.0 18.0 17.8 17.1 16.9 16.6 25 Equipment 238.7 283.5 289.4 284.2 284.6 281.8 288.0 285.7 286.8 26 Loans 64.5 70.2 77.8 81.5 81.2 79.2 78.9 79.5 80.5 7.7 Leases 174.2 213.3 211.6 202.7 203.4 202.6 209.2 206.1 206.3 28 Other business receivables6 87.0 99.4 103.5 100.8 104.2 103.0 101.5 102.6 99.4 Securitized assets4 29 Motor vehicles 31.5 37.8 50.1 44.0 44.3 42.4 45.5 41.5 41.0 30 Retail loans 2.9 3.2 5.1 2.3 2.6 2.6 2.4 2.3 2.2 31 Wholesale loans 26.4 32.5 42.5 39.0 39.0 37.1 40.8 36.9 36.5 32 Leases 2.1 2.2 2.5 2.7 2.7 2.7 2.3 2.3 2.3 33 Equipment 14.6 23.1 23.2 25.4 20.8 21.9 21.7 21.6 22.0 34 Loans 7.9 15.5 16.4 18.5 14.2 15.2 15.0 15.0 15.4 35 Leases 6.7 7.6 6.8 6.9 6.7 6.6 6.7 6.7 6.6 36 Other business receivables6 8.4 5.6 7.7 19.5 19.6 19.6 19.9 20.3 20.1 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 reclassification of receivables among the three major categories (consumer, consumer goods, such as appliances, apparel, boats, and recreation vehicles. real estate, and business) and in discontinuities in some component series between May and 4. Outstanding balances of pools upon which securities have been issued; these balances June 1996. are no longer carried on the balance sheets of the loan originator. Includes finance company subsidiaries of bank holding companies but not of retailers and 5. Credit arising from transactions between manufacturers and dealers, that is, floor plan banks. Data in this table also appear in the Board's G.20 (422) monthly statistical release. For financing. ordering address, see inside front cover. 6. Includes loans on commercial accounts receivable, factored commercial accounts, and 1. Owned receivables are those carried on the balance sheet of the institution. Managed receivable dealer capital; small loans used primarily for business or farm purposes; and receivables are outstanding balances of pools upon which securities have been issued; these wholesale and lease paper for mobile homes, campers, and travel trailers. balances are no longer carried on the balance sheets of the loan originator. Data are shown Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Nonfinancial Statistics • December 2002 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 2002 Mar. Apr. May June July Aug. Sept. Terms and yields in primary and secondary markets PRIMARY MARKETS Terms1 1 Purchase price (thousands of dollars) 210.7 234.5 245.0 255.6 262.9 265.0 268.2 268.2 267.5 266.7 2 Amount of loan (thousands of dollars) 161.7 177.0 184.2 193.3 198.9 199.1 201.1 201.6 199.1 201.1 3 Loan-to-price ratio (percent) 78.7 77.4 77.3 78.2 77.7 77.2 77.1 77.5 77.3 77.6 4 Maturity (years) 28.8 29.2 28.8 29.1 28.8 29.0 29.0 29.1 29.0 29.1 5 Fees and charges (percent of loan amount)2 .77 .70 .67 .62 .64 .59 .56 .62 .59 .60 Yield (percent per year) 6 Contract rate1 6.94 7.41 6.90 6.66 6.65 6.51 6.38 6.28 6.17 6.09 7 Effective rate1-3 7.06 7.52 7.00 6.76 6.74 6.59 6.47 6.37 6.26 6.17 8 Contract rate (HUD series)4 7.45 n.a. 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 7.74 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 GNMA securities6 7.03 7.57 6.36 6.50 6.33 6.21 6.03 5.82 5.53 5.15 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 523,941 610,122 707,015 733,894 739,277 741,084 740,744 743,025 746,101 751,423 12 FHA/VA insured 55,318 61,539 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 13 Conventional 468,623 548,583 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 14 Mortgage transactions purchased (during period) 195,210 154,231 270,384 21,305 23,175 17,432 16,310 17,586 23,123 33,518 Mortgage commitments (during period) 15 Issued7 187,948 163,689 304,084 13,340 20,203 18,305 24,700 n.a. n.a. n.a. 16 To sell8 5,900 11,786 7,586 1,748 621 124 2,535 n.a. n.a. n.a. FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of periodf 17 Total 324,443 385,693 491,719 526,107 521,611 515,732 518,816 521,137 525,795 530,694 18 FHA/VA insured 1,836 3,332 3,506 3,332 3,298 2,571 3,649 n.a. n.a. n.a. 19 Conventional 322,607 382,361 488,213 522,775 518,313 513,161 515,167 n.a. n.a. n.a. Mortgage transactions (during period) 20 Purchases 239,793 174,043 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 21 Sales 233,031 166,901 389,611 42,545 40,704 29,831 30,767 29,335 34,937 46,369 22 Mortgage commitments contracted (during period)9 228,432 169,231 417,434 41,561 36,368 n.a. n.a. n.a. n.a. n.a. 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 3 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 2001 2002 TTyyppee ooff hhoollddeerr aanndd pprrooppeerrttyy 11999988 11999999 22000000 Q2 Q3 Q4 Q1 Q2P 1 All holders 5,715,556 6,320,508 6,885,322 7,211,919 7,407,178 7,589,577 7,753,640 7,965,275 By type of property 2 One- to four-family residences 4,365,968 4,790,601 5,203,674 5,457,068 5,600,299 5,732,523 5,871,131 6,040,743 3 Multifamily residences 331,602 369,251 406,530 426,806 440,753 454,715 462,579 473,950 4 Nonfarm, nonresidential 921,482 1,057,692 1,166,261 1,215,062 1,251,517 1,286,011 1,301,859 1,330,409 5 Farm 96,504 102,964 108,858 112,983 114,610 116,329 118,071 120,173 By type of holder 6 Major financial institutions 2,194,591 2,394,271 2,618,969 2,711,268 2,734,217 2,791,076 2,789,654 2,860,812 7 Commercial banks2 1,336,996 1,495,420 1,660,054 1,722,376 1,736,631 1,789,819 1,800,362 1,875,360 8 One- to four-family 797,004 879,576 965,635 997,206 987,682 1,023,851 1,018,478 1,072,111 9 Multifamily 54,632 67,665 77,803 80,315 83,949 84,851 86,719 90,759 10 Nonfarm, nonresidential 456,323 516,333 582,577 609,750 629,624 645,619 659,187 675,530 11 Farm 29,037 31,846 34,039 35,104 35,375 35,498 35,978 36,960 12 Savings institutions3 643,955 668,064 722,974 751,646 758,344 758,236 745,998 740,288 13 One- to four-family 533,501 548,222 594,221 616,004 620,392 620,579 605,171 597,803 14 Multifamily 57,037 59,309 61,258 63,399 64,405 64,592 65,199 65,985 15 Nonfarm, nonresidential 53,002 60,063 66,965 71,664 72,977 72,534 75,077 75,949 16 Farm 414 470 529 578 569 531 551 551 17 Life insurance companies 213,640 230,787 235,941 237,246 239,243 243,021 243,293 245,165 18 One- to four-family 6,590 5,934 4,903 5,005 5,091 4,931 4,938 4,838 19 Multifamily 31,522 32,818 33,681 33,856 33,885 35,631 35,671 35,943 20 Nonfarm, nonresidential 164,004 179,048 183,757 184,713 186,469 188,376 188,599 190,499 21 Farm 11,524 12,987 13,600 13,672 13,798 14,083 14,085 13,885 22 Federal and related agencies 291,961 320,054 344,225 356,817 363,001 376,999 385,027 396,091 23 Government National Mortgage Association 7 7 6 6 9 8 8 8 24 One- to four-family 7 7 6 6 9 8 8 8 25 Multifamily 0 0 0 0 0 0 0 0 26 Farmers Home Administration4 40,851 73,871 73,323 73,206 72,118 72,452 72,362 71,970 27 One- to four-family 16,895 16,506 16,372 16,153 15,916 15,824 15,665 15,273 28 Multifamily 11,739 11,741 11,733 11,720 11,710 11,712 11,707 11,692 29 Nonfarm, nonresidential 7,705 41,355 41,070 41,262 40,470 40,965 41,134 41,188 30 Farm 4,513 4,268 4,148 4,072 4,023 3,952 3,855 3,817 31 Federal Housing Admin, and Dept. of Veterans Affairs 3,674 3,712 3,507 2,918 3,155 3,290 3,361 3,473 32 One- to four-family 1,849 1,851 1,308 1,267 1,251 1,260 1,255 1,254 33 Multifamily 1,825 1,861 2,199 1,651 1,904 2,031 2,105 2,218 34 Resolution Trust Corporation 0 0 0 0 0 0 0 0 35 One- to four-family 0 0 0 0 0 0 0 0 36 Multifamily 0 0 0 0 0 0 0 0 37 Nonfarm, nonresidential 0 0 0 0 0 0 0 0 38 Farm 0 0 0 0 0 0 0 0 39 Federal Deposit Insurance Corporation 361 152 45 24 26 13 7 22 40 One- to four-family 58 25 7 4 4 2 1 4 41 Multifamily 70 29 9 5 5 3 1 4 42 Nonfarm, nonresidential 233 98 29 15 17 8 4 14 43 Farm 0 0 0 0 0 0 0 0 44 Federal National Mortgage Association 156,023 149,422 155,626 160,820 165,687 169,908 176,051 180,491 45 One- to four-family 147,594 141,195 144,150 147,730 151,786 155,060 160,300 164,038 46 Multifamily 8,429 8,227 11,476 13,090 13,901 14,848 15,751 16,453 47 Federal Land Banks 32,983 34,187 36,326 38,686 39,722 40,885 41,981 42,951 48 One- to four-family 1,941 2,012 2,137 2,276 2,337 2,406 2,470 2,527 49 Farm 31,042 32,175 34,189 36,410 37,385 38,479 39,511 40,424 50 Federal Home Loan Mortgage Corporation 57,085 56,676 59,240 61,542 59,638 62,792 59,624 58,872 51 One- to four-family 49,106 44,321 42,871 42,537 39,217 40,309 35,955 34,062 52 Multifamily 7,979 12,355 16,369 19,005 20,421 22,483 23,669 24,810 53 Mortgage pools or trusts5 2,581,297 2,948,245 3,231,415 3,432,654 3,583,240 3,715,692 3,869,212 3,986,440 54 Government National Mortgage Association 537,446 582,263 611,553 598,019 603,186 591,368 587,423 583,950 55 One- to four-family 522,498 565,189 592,624 577,228 581,796 569,460 564,327 559,754 56 Multifamily 14,948 17,074 18,929 20,792 21,391 21,908 23,096 24,196 57 Federal Home Loan Mortgage Corporation 646,459 749,081 822,310 873,750 927,490 948,409 1,012,478 1,053,261 58 One- to four-family 643,465 744,619 816,602 867,924 921,709 940,933 1,005,136 1,045,981 59 Multifamily 2,994 4,462 5,708 5,826 5,781 7,476 7,342 7,280 60 Federal National Mortgage Association 834,517 960,883 1,057,750 1,163,978 1,228,131 1,290,351 1,355,404 1,404,594 61 One- to four-family 804,204 924,941 1,016,398 1,116,534 1,177,995 1,238,125 1,301,374 1,349,442 62 Multifamily 30,313 35,942 41,352 47,444 50,136 52,226 54,030 55,152 63 Farmers Home Administration4 1 0 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 1 0 0 0 0 0 0 0 68 Private mortgage conduits 562,874 656,018 739,802 796,907 824,433 885,564 913,907 944,635 69 One- to four-family6 405,153 455,021 499,834 539,200 550,200 591,200 616,300 637,200 70 Multifamily 33,784 42,293 48,786 50,836 53,627 57,009 57,535 59,180 71 Nonfarm, nonresidential 123,937 158,704 191,182 206,871 220,606 237,355 240,072 248,255 72 Farm 0 0 0 0 0 0 0 0 73 Individuals and others7 647,708 657,938 690,714 711,181 726,719 705,811 709,748 721,932 74 One- to four-family 435,137 459,385 490,675 508,569 522,441 501,081 508,260 518,269 75 Multifamily 76,320 75,244 77,006 78,680 79,464 79,791 79,612 80,153 76 Nonfarm, nonresidential 116,277 102,092 100,681 100,786 101,354 101,154 97,786 98,974 77 Farm 19,974 21,217 22,352 23,147 23,460 23,786 24,091 24,536 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

A34 Domestic Nonfinancial Statistics • December 2002 1.55 CONSUMER CREDIT1 Millions of dollars, amounts outstanding, end of period 2002 11999999 22000000 22000011 Mar. Apr. May June July Aug. Seasonally adjusted 1 Total 1,416,316 1,560,634 1,667,928 1,689,131 1,697,386 1,706,722 1,713,492 1,726,044 1,730,216 2 Revolving 597,669 666,607 699,875 703,861 709,089 712,085 715,624 721,966 725,895 3 Nonrevolving2 818,647 894,027 968,053 985,270 988,297 994,637 997,868 1,004,078 1,004,321 Not seasonally adjusted 4 Total 1,446,127 1,593,116 1,701,856 1,677,964 1,684,724 1,694,140 1,706,298 1,716,765 1,731,996 By major holder Commercial banks 499,758 541,470 558,421 550,709 556,033 557,521 557,317 558,187 574,164 6 Finance companies 201,549 219,848 236,559 232,365 231,162 232,269 235,832 241,849 237,969 7 Credit unions 167,921 184,434 189,570 187,717 188,885 190,672 192,305 194,754 196,206 8 Savings institutions 61,527 64,557 69,070 68,598 67,742 66,858 66,002 69,284 69,971 9 Nonfinancial business 80,311 82,662 67,955 58,095 56,922 55,804 53,013 51,332 52,170 10 Pools of securitized assets3 435,061 500,145 580,281 580,480 583,981 591,016 601,829 601,359 601,517 By major type of credit4 11 Revolving 621,914 693,020 727,297 697,663 704,414 707,201 712,954 715,130 722,617 12 Commercial banks 189,352 218,063 224,878 216,126 221,261 218,368 215,852 214,994 226,416 13 Finance companies 32,483 37,627 31,538 27,967 29,686 30,073 32,131 36,113 35,614 14 Credit unions 20,641 22,226 22,265 20,813 20,852 20,878 20,984 21,233 21,233 13 Savings institutions 15,838 16,560 17,767 16,988 17.216 17,452 17,680 17,426 17,864 16 Nonfinancial business 42,783 42,430 29,790 22,402 21,357 20,359 17,859 16.467 16,747 1/ Pools of securitized assets3 320,817 356,114 401,059 393,367 394,043 400,071 408,448 408,897 404,743 18 Nonrevolving 824,213 900,095 974,559 980,300 980,310 986,939 993,345 1,001,635 1,009,379 19 Commercial banks 310,406 323,407 333,543 334,583 334,772 339,153 341,465 343,193 347,748 20 Finance companies 169,066 182,221 205,021 204,398 201,476 202,196 203,701 205,736 202,354 21 Credit unions 147,280 162,208 167,305 166,904 168,033 169,794 171,321 173,521 174,973 22 Savings institutions 45,689 47,997 51,303 51,610 50.526 49,406 48,322 51,858 52,107 23 Nonfinancial business 37,528 40,232 38,165 35,693 35,565 35,445 35,154 34,866 35,423 24 Pools of securitized assets3 114,244 144,031 179,222 187,113 189.938 190,945 193,382 192,462 196,774 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 mot or 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 2002 IItteemm 11999999 22000000 22000011 Feb. Mar. Apr. May June July Aug. INTEREST RATES Commercial banks2 1 48-month new car 8.44 9.34 8.50 7.50 n.a. n.a. 7.74 n.a. n.a. 5.95 2 24-month personal 13.39 13.90 13.22 11.72 n.a. n.a. 12.57 n.a. n.a. 11.28 Credit card plan 3 All accounts 15.21 15.71 14.89 13.65 n.a. n.a. 13.55 n.a. n.a. 13.37 4 Accounts assessed interest 14.81 14.91 14.44 12.98 n.a. n.a. 13.34 n.a. n.a. 13.26 Auto finance companies 5 New car 6.66 6.61 5.65 6.07 5.87 5.51 6.15 6.29 3.50 2.23 6 Used car 12.60 13.55 12.18 11.10 11.14 10.94 10.90 10.77 10.62 10.50 OTHER TERMS3 Maturity (months) 7 New car 52.7 54.9 55.1 56.4 56.4 55.9 57.3 58.6 59.1 59.4 8 Used car 55.9 57.0 57.5 57.8 57.7 57.7 57.8 57.7 57.7 57.6 Loan-to-value ratio 9 New car 92 92 91 89 90 93 92 92 95 96 10 Used car 99 99 100 100 100 101 101 100 100 100 Amount financed (dollars) 11 New car 19,880 20,923 22,822 22,741 23,065 23,535 23,324 23,115 24,802 26,208 12 Used car 13,642 14,058 14,416 14,049 14,149 14,363 14,700 14,787 14,843 14,815 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 5 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 2000 2001 2002 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999966 11999977 11999988 11999999 Q4 Q1 Q2 Q3 Q4 QI Q2 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .. 733.3 804.4 1,042.4 1,068.5 860.2 822.0 917.1 1,022.0 1,275.4 1,216.6 937.5 1,531.5 By sector and instrument 7 Federal government 144.9 23.1 -52.6 -71.2 -295.9 -306.1 -59.3 -215.8 209.3 43.4 39.8 451.3 3 Treasury securities 146.6 23.2 -54.6 -71.0 -294.9 -304.9 -57.0 -216.9 209.7 44.2 41.6 449.5 4 Budget agency securities and mortgages -1.6 -.1 2.0 -.2 -1.0 -1.2 -2.2 1.1 -.4 -.7 -1.8 1.8 5 Nonfederal 588.3 781.3 1,095.0 1,139.7 1,156.1 1,128.1 976.4 1,237.8 1,066.1 1,173.2 897.7 1,080.2 By instrument 6 Commercial paper -.9 13.7 24.4 37.4 48.1 -199.2 -133.4 -66.1 45.5 -155.7 -93.0 7 Municipal securities and loans 2.6 71.4 96.8 68.2 35.3 62.0 102.9 107.3 70.0 190.1 70.3 186.4 8 Corporate bonds 116.3 150.5 218.7 229.9 171.1 175.6 399.5 419.5 187.9 323.5 233.8 207.0 9 Bank loans n.e.c 70.4 106.4 108.2 82.8 101.7 75.1 -19.5 -121.0 -24.4 -164.5 -18.8 -183.2 10 Other loans and advances 28.7 59.5 82.1 57.1 101.5 127.8 .7 122.1 58.3 -104.2 -10.8 51.2 11 Mortgages 280.1 322.3 489.8 564.9 559.4 561.0 547.5 767.3 769.8 732.8 697.4 810.0 17 Home 241.7 258.3 387.7 424.6 413.5 399.9 423.2 607.6 559.2 530.5 601.8 648.8 n Multifamily residential 9.8 7.3 23.4 35.7 35.2 42.2 37.6 40.8 56.5 56.5 29.2 43.5 14 Commercial 25.8 53.5 72.2 98.8 104.2 116.8 82.3 107.0 147.1 139.0 59.6 109.4 15 Farm 2.7 3.1 6.5 5.8 6.5 2.1 4.3 11.9 7.0 6.7 6.7 8.3 16 Consumer credit 91.3 57.5 75.0 99.5 139.0 130.7 144.5 76.0 70.6 149.9 81.4 101.9 By borrowing sector 17 Household 339.8 332.7 454.8 498.0 541.0 515.1 506.3 650.4 661.2 623.2 770033..00 770055..55 18 Nonfinancial business 255.3 392.5 559.9 589.4 587.9 556.5 373.8 484.8 348.4 392.2 132.4 201.1 19 Corporate 183.1 291.6 392.1 401.6 406.3 386.4 205.9 303.3 190.2 242.8 16.9 78.6 7.0 Nonfarm noncorporate 67.3 94.7 159.7 182.4 170.7 159.4 162.2 170.1 153.8 141.1 110.3 114.8 71 Farm 4.9 6.2 8.0 5.5 10.9 10.8 5.7 11.5 4.4 8.3 5.1 7.7 22 State and local government -6.8 56.1 80.3 52.3 27.2 56.5 96.3 102.5 56.6 157.7 62.3 173.6 23 Foreign net borrowing in United States 88.4 71.8 43.2 25.2 65.7 65.1 -8.5 -50.5 -106.7 16.0 75.3 13.6 24 Commercial paper 11.3 3.7 7.8 16.3 31.7 48.9 -33.8 -3.8 -25.2 5.9 64.8 34.8 75 Bonds 67.0 61.4 34.9 14.1 23.9 9.1 21.4 -15.8 -83.9 29.7 -2.3 -41.0 26 Bank loans n.e.c 9.1 8.5 6.6 .5 11.4 12.0 14.3 -31.4 4.2 -16.3 13.9 22.1 27 Other loans and advances 1.0 -1.8 -6.0 -5.7 -1.3 -4.9 -10.4 .5 -1.8 -3.3 -1.2 -2.3 28 Total domestic plus foreign 821.7 876.2 1,085.6 1,093.7 925.9 887.0 908.6 971.5 1,168.8 1,232.5 1,012.8 1,545.1 Financial sectors 29 Total net borrowing by financial sectors 550.1 662.2 1,087.2 1,084.4 815.4 918.9 884.0 818.0 1,117.4 982.1 874.7 916.3 By instrument 30 Federal government-related 231.4 212.9 470.9 592.0 433.5 613.6 432.6 674.6 818.4 591.8 692.0 497.1 31 Government-sponsored enterprise securities 90.4 98.4 278.3 318.2 234.1 304.5 262.3 268.3 326.2 306.5 191.3 151.1 32 Mortgage pool securities 141.0 114.6 192.6 273.8 199.4 309.1 170.3 406.2 492.2 285.3 500.7 346.0 33 Loans from U.S. government .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 318.7 449.3 616.3 492.4 382.0 305.3 451.4 143.4 299.0 390.3 182.7 419.1 35 Open market paper 92.2 166.7 161.0 176.2 127.7 84.6 -83.8 -77.9 -72.2 -13.6 -178.3 -109.1 36 Corporate bonds 178.1 218.9 310.2 218.2 205.8 210.1 427.8 212.9 312.7 378.3 358.1 472.7 37 Bank loans n.e.c 12.6 13.3 30.1 -14.2 _ 2 -6.7 24.3 10.8 1.6 18.3 .2 31.9 38 Other loans and advances 27.9 35.6 90.2 107.1 42.5 15.5 90.6 -18.7 58.8 8.9 -3.9 16.7 39 Mortgages 7.9 14.9 24.8 5.1 6.2 1.8 -7.5 16.2 -1.9 -1.6 6.6 7.0 By borrowing sector 40 Commercial banking 13.0 46.1 72.9 67.2 60.0 39.0 138.1 -10.5 39.7 44.1 24.3 13.3 41 Savings institutions 25.5 19.7 52.2 48.0 27.3 20.1 55.5 3.4 39.4 -68.6 -33.1 -12.0 42 Credit unions .1 .1 .6 2.2 .0 1.0 -.6 .8 1.5 4.4 2.4 2.0 43 Life insurance companies 1.1 .2 .7 .7 -.7 -.7 -2.4 .1 3.5 1.4 2.4 1.2 44 Government-sponsored enterprises 90.4 98.4 278.3 318.2 234.1 304.5 262.3 268.3 326.2 306.5 191.3 151.1 45 Federally related mortgage pools 141.0 114.6 192.6 273.8 199.4 309.1 170.3 406.2 492.2 285.3 500.7 346.0 46 Issuers of asset-backed securities (ABSs) 150.8 202.2 321.4 223.4 196.2 305.2 288.7 195.6 317.7 435.7 267.6 273.4 47 Finance companies 50.6 57.8 57.1 70.3 81.2 15.6 -54.0 36.8 41.8 -25.3 -31.2 79.5 48 Mortgage companies 4.1 -4.6 1.6 .2 .1 1.0 .7 .6 .8 .6 .8 .7 49 Real estate investment trusts (REITs) 11.9 39.6 62.7 6.3 2.7 -8.1 -6.1 10.5 -2.4 7.8 7.4 25.3 50 Brokers and dealers -2.0 8.1 7.2 -17.2 15.6 -6.6 -23.7 35.6 12.6 -18.9 -15.7 17.5 51 Funding corporations 63.8 79.9 40.0 91.5 -.4 -61.2 55.3 -129.6 -155.7 9.1 —42.2 18.2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Nonfinancial Statistics • December 2002 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS '—Continued Billions of dollars; quarterly data at seasonally adjusted annual rates 2000 2001 2002 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999966 11999977 11999988 11999999 22000000 Q4 Qi Q2 Q3 Q4 Qi Q2 All sectors 52 Total net borrowing, all sectors 1,371.7 1,538.5 2,172.8 2,178.0 1,741.3 1,805.9 1,792.5 1,789.5 2,286.2 2,214.7 1,887.5 2,461.3 53 Open market paper 102.6 184.1 193.1 229.9 207.6 129.5 -316.8 -215.1 -163.5 37.8 -269.2 -167.3 54 U.S. government securities 376.3 236.0 418.3 520.7 137.6 307.5 373.3 458.8 1,027.8 635.2 731.8 948.4 55 Municipal securities 2.6 71.4 96.8 68.2 35.3 62.0 102.9 107.3 70.0 190.1 70.3 186.4 56 Corporate and foreign bonds 361.3 430.8 563.7 462.2 400.8 394.8 848.8 616.6 416.7 731.5 589.6 638.7 57 Bank loans n.e.c 92.1 128.2 145.0 69.0 112.8 80.4 19.2 -141.6 -18.6 -162.4 -4.6 -129.3 58 Other loans and advances 57.7 93.2 166.3 158.5 142.7 138.3 80.8 103.9 115.3 -98.7 -15.8 65.6 59 Mortgages 287.9 337.2 514.6 570.0 565.6 562.8 540.0 783.5 767.9 731.2 704.0 817.0 60 Consumer credit 91.3 57.5 75.0 99.5 139.0 130.7 144.5 76.0 70.6 149.9 81.4 101.9 Funds raised through mutual funds and corporate equities 61 Total net issues 232.9 185.3 113.7 156.9 197.2 -37.3 236.3 412.3 99.2 360.1 414.8 313.5 62 Corporate equities -4.7 -79.9 -165.8 -34.3 -37.8 -177.5 120.3 138.8 -61.2 104.2 28.0 206.2 63 Nonfinancial corporations -69.5 -114.4 -267.0 -143.5 -159.7 -367.5 -25.0 -70.7 -126.6 -25.0 -3.7 62.5 64 Foreign shares purchased by U.S. residents 82.8 57.6 101.3 114.3 103.6 96.6 86.1 222.9 43.5 74.7 -5.9 80.9 65 Financial corporations -18.1 -23.0 -.1 -5.1 18.3 93.5 59.1 -13.4 21.8 54.5 37.6 62.8 66 Mutual fund shares 237.6 265.1 279.5 191.2 235.0 140.2 116.0 273.5 160.4 255.9 386.8 107.2 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 A37 1.58 SUMMARY OF FINANCIAL TRANSACTIONS1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 2000 2001 2002 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999966 11999977 11999988 11999999 22000000 Q4 QL Q2 Q3 Q4 QL Q2 NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets 1,371.7 1,538.5 2,172.8 2,178.0 1,741.3 1,805.9 1,792.5 1,789.5 2,286.2 2,214.7 1,887.5 2,461.3 2 Domestic nonfederal nonfinancial sectors 108.8 29.5 255.0 265.1 -108.7 -292.4 -160.9 -188.9 30.1 21.9 207.5 172.5 Household 148.7 39.4 123.2 255.3 -111.7 -211.5 -180.5 -198.1 23.4 -28.4 154.0 118.8 4 Nonfinancial corporate business -10.2 -12.7 -16.0 -15.6 5.0 -84.2 -22.5 -24.6 -34.1 5.8 51.3 14.7 5 Nonfarm noncorporate business 4.0 2.6 13.3 -3.0 -1.2 _ 9 3.2 .3 3.3 2.0 3.3 3.3 6 State and local governments -33.7 .1 134.5 28.4 -.8 3.5 38.9 33.5 37.4 42.4 -1.1 35.7 7 Federal government -7.2 5.1 13.5 5.8 7.3 10.6 4.4 9.4 3.3 7.0 4.7 8.8 8 Rest of the world 379.6 259.6 172.5 139.7 225.9 332.2 325.7 254.9 269.2 432.5 171.8 566.1 9 Financial sectors 890.6 1,244.3 1,731.9 1,767.5 1,616.8 1,755.5 1,623.3 1,714.0 1,983.6 1,753.3 1,503.4 1,713.9 10 Monetary authority 12.3 38.3 21.1 25.7 33.7 13.8 39.0 26.9 8.4 85.1 81.6 43.4 11 Commercial banking 187.5 324.3 305.6 312.2 357.9 184.6 130.4 107.8 267.9 314.6 188.9 444.0 12 U.S.-chartered banks 119.6 274.9 312.1 318.6 339.5 95.3 92.3 156.5 242.5 275.0 168.2 403.6 13 Foreign banking offices in United States 63.3 40.2 -11.6 -17.0 23.9 88.7 34.5 -50.1 21.1 -7.8 2.1 33.6 14 Bank holding companies 3.9 5.4 -.9 6.2 -12.2 -3.2 7.3 -2.8 -1.4 13.6 12.0 1.9 15 Banks in U.S.-affiliated areas .7 3.7 6.0 4.4 6.7 3.8 -3.6 4.2 5.7 33.9 6.6 4.9 16 Savings institutions 19.9 -4.7 36.2 67.7 56.2 54.7 46.8 55.8 -4.7 73.1 12.3 -83.1 17 Credit unions 25.5 16.8 18.9 27.5 28.0 28.6 34.9 9.6 61.1 60.5 53.2 35.8 18 Bank personal trusts and estates -7.7 -25.0 -12.8 27.8 17.1 18.1 10.7 13.4 8.8 8.6 6.1 4.6 19 Life insurance companies 69.6 104.8 76.9 53.5 57.9 37.3 111.8 143.6 186.9 81.3 260.6 185.7 20 Other insurance companies 22.5 25.2 5.8 -3.0 -8.7 -11.7 2.1 .1 5.1 28.5 36.7 28.9 21 Private pension funds -4.1 47.6 -23.4 17.0 33.4 30.0 20.7 44.7 10.4 5.3 27.4 37.6 22 State and local government retirement funds 35.8 67.1 72.1 46.9 54.6 86.1 -70.7 77.0 -74.2 -2.7 70.5 5.3 23 Money market mutual funds 88.8 87.5 244.0 182.0 143.0 256.9 326.4 210.0 351.7 96.1 -296.8 -122.3 24 Mutual funds 48.9 80.9 127.3 48.4 21.0 40.4 93.0 169.1 102.7 139.3 243.1 56.6 25 Closed-end funds 4.6 -2.5 5.5 7.4 -4.1 -4.1 -1.7 -1.7 -1.7 -1.7 -1.7 -1.7 26 Government-sponsored enterprises 97.1 106.3 314.0 291.3 256.4 353.4 329.2 297.2 274.3 335.3 236.7 125.3 27 Federally related mortgage pools 141.0 114.6 192.6 273.8 199.4 309.1 170.3 406.2 492.2 285.3 500.7 346.0 28 Asset-backed securities issuers (ABSs) 120.5 163.8 281.7 205.2 166.4 276.3 260.7 167.3 292.2 412.9 243.4 251.2 29 Finance companies 18.9 23.1 77.3 97.0 108.0 39.4 8.9 112.1 —43.1 -100.5 -28.3 ^T.4 30 Mortgage companies 8.2 -9.1 3.2 .3 .2 2.0 1.4 1.1 1.7 1.2 1.6 1.4 31 Real estate investment trusts (REITs) 4.4 20.2 -5.1 -2.6 -6.3 -2.8 4.0 1.1 7.8 14.0 26.3 31.8 3? Brokers and dealers -15.7 14.9 6.8 -34.7 68.9 6.5 242.1 53.6 183.8 -109.8 -219.5 420.3 33 Funding corporations 12.6 50.4 -15.8 124.0 34.4 37.6 -136.7 -181.0 -147.8 27.0 60.2 -92.4 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Net flows through credit markets 1,371.7 1,538.5 2,172.8 2,178.0 1,741.3 1,805.9 1,792.5 1,789.5 2,286.2 2,214.7 1,887.5 2,461.3 Other financial sources 35 Official foreign exchange -6.3 .7 6.6 -8.7 -.4 4.9 -1.5 4.7 13.7 .2 --33..00 1122..99 36 Special drawing rights certificates -.5 -.5 .0 -3.0 -4.0 -4.0 .0 .0 .0 .0 .0 .0 37 Treasury currency .5 .5 .6 1.0 2.4 .0 -1.1 1.1 .0 .0 .0 .0 38 Foreign deposits 85.9 107.7 6.5 61.0 135.1 266.7 228.3 -175.9 41.5 17.9 -59.1 89.3 39 Net interbank transactions -51.6 -19.7 -31.8 15.0 15.1 22.1 -141.8 -25.4 -1.1 41.5 -1.2 -204.4 40 Checkable deposits and currency 15.7 41.2 47.3 151.2 -71.4 -40.7 164.1 155.2 212.1 278.9 3.2 287.9 41 Small time and savings deposits 97.2 97.1 152.4 45.1 188.8 289.0 266.9 242.1 230.3 329.7 259.7 247.1 42 Large time deposits 114.0 122.5 91.8 131.1 116.2 75.0 133.9 43.0 19.5 77.8 270.0 34.7 43 Money market fund shares 145.4 155.9 287.2 249.1 233.3 343.8 578.4 370.0 388.6 377.3 -315.7 103.4 44 Security repurchase agreements 41.4 120.9 91.3 169.8 113.2 -222.2 -94.3 114.0 221.0 -144.5 -53.6 255.3 45 Corporate equities -4.7 -79.9 -165.8 -34.3 -37.8 -177.5 120.3 138.8 -61.2 104.2 28.0 206.2 46 Mutual fund shares 237.6 265.1 279.5 191.2 235.0 140.2 116.0 273.5 160.4 255.9 386.8 107.2 47 Trade payables 123.3 139.8 106.4 268.6 170.2 123.4 186.4 -119.6 -47.3 -96.5 217.9 65.9 48 Security credit 52.4 111.0 103.2 104.4 146.1 58.9 -91.1 -73.9 530.2 -352.6 -203.7 -178.8 49 Life insurance reserves 44.5 59.3 48.0 50.8 50.2 47.3 62.3 52.2 74.7 119.6 93.9 83.4 50 Pension fund reserves 148.3 201.4 217.4 181.8 209.0 149.2 295.9 209.1 180.3 150.8 133.7 146.7 51 Taxes payable 19.5 22.3 19.6 23.2 21.7 25.3 4.3 14.8 104.9 -67.0 20.4 62.1 52 Investment in bank personal trusts -5.3 -49.9 -41.8 -6.5 -29.7 -28.0 -26.1 -22.7 -28.2 -28.2 -31.0 -32.7 53 Noncorporate proprietors' equity 5.5 -40.7 -57.8 -38.7 -10.2 -10.9 -19.7 -26.4 -45.3 -1.1 -12.4 -36.2 54 Miscellaneous 522.4 493.8 956.9 1,042.7 1,155.4 813.9 791.8 888.0 846.8 201.6 124.7 494.2 55 Total financial sources 2,957.1 3,287.1 4,290.1 4,772.9 4,379.6 3,682.5 4,365.6 3,852.1 5,127.1 3,480.2 2,746.2 4,205.8 Liabilities not identified as assets (—) 56 Treasury currency -.4 -.2 -.1 -.7 -1.2 -3.3 -3.6 -.5 -1.4 .0 -2.4 -.7 57 Foreign deposits 59.4 106.2 -8.5 42.6 55.9 215.2 182.1 -166.8 54.5 -28.8 -36.6 130.9 58 Net interbank liabilities -3.3 -19.9 3.8 .1 20.4 52.9 21.8 17.0 7.4 22.6 39.4 -11.2 59 Security repurchase agreements 2.4 63.2 57.7 35.7 118.6 -222.3 -277.2 124.6 124.8 -181.1 -9.7 85.8 60 Taxes payable 23.1 28.0 19.7 11.7 26.2 46.6 24.9 3.1 25.4 22.9 31.1 -29.0 61 Miscellaneous -177.4 -248.3 -158.9 -301.4 -404.9 -478.4 -209.3 -517.1 78.3 -188.6 -416.3 -77.5 Floats not included in assets (—) 62 Federal government checkable deposits .5 -2.7 2.6 -7.4 9.0 -.7 64.9 64.7 -23.0 -91.1 190.3 185.7 63 Other checkable deposits -4.0 -3.9 -3.1 -.8 1.7 2.5 3.6 3.9 5.0 5.7 6.1 7.1 64 Trade credit -25.7 -25.5 -43.3 2.8 26.1 120.7 48.1 28.6 -49.4 37.9 4.7 -86.1 65 Total identified to sectors as assets 3,082.7 3,390.1 4,420.3 4,990.3 4,527.9 3,949.4 4,510.2 4,294.5 4,905.5 3,880.8 2,939.5 4,000.8 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

A38 Domestic Nonfinancial Statistics • December 2002 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period 2000 2001 2002 Q4 Qi Q2 Q3 Q4 Qi Q2 Nonflnancial sectors 1 Total credit market debt owed by domestic nonflnancial sectors 15,243.1 16,285.5 17,388.7 18,267.9 18,267.9 18,508.1 18,680.0 18,995.3 19,376.3 19,610.2 19,904.1 By sector and instrument 2 Federal government 3,804.8 3,752.2 3,681.0 3,385.1 3,385.1 3,408.8 3,251.4 3,320.0 3,379.5 3,430.3 3,432.7 3 Treasury securities 3,778.3 3,723.7 3,652.7 3,357.8 3,357.8 3,382.0 3,224.3 3,293.0 3,352.7 3,404.0 3,405.9 4 Budget agency securities and mortgages 26.5 28.5 28.3 27.3 27.3 26.8 27.0 27.0 26.8 26.3 26.8 5 Nonfederal 11,438.3 12,533.3 13,707.7 14,882.8 14,882.8 15,099.4 15,428.7 15,675.3 15,996.8 16,180.0 16,471.4 By instrument 6 Commercial paper 168.6 193.0 230.3 278.4 278.4 253.2 223.3 201.3 190.1 167.5 148.4 7 Municipal securities and loans 1,367.5 1,464.3 1,532.5 1,567.8 1,567.8 1,597.5 1,629.8 1,635.3 1,685.4 1,707.5 1,759.5 8 Corporate bonds 1,610.9 1,829.6 2,059.5 2,230.6 2,230.6 2,330.4 2,435.3 2,482.3 2,563.2 2,621.6 2,673.4 9 Bank loans n.e.c 1,040.4 1,148.6 1,231.4 1,333.1 1,333.1 1,320.7 1,293.6 1,285.1 1,251.4 1,237.3 1,194.5 10 Other loans and advances 825.1 907.2 964.5 1,077.1 1,077.1 1,083.2 1,110.6 1,116.8 1,096.3 1,099.2 1,109.1 11 Mortgages 5,154.3 5,644.1 6,243.4 6,802.8 6,802.8 6,929.0 7,127.9 7,324.1 7,507.2 7,670.1 7,880.3 12 Home 3,978.3 4,366.0 4,790.6 5,204.1 5,204.1 5,299.1 5,458.1 5,601.7 5,734.2 5,873.2 6,043.1 13 Multifamily residential 284.6 308.0 343.9 379.2 379.2 388.6 398.8 412.9 427.0 434.3 445.2 14 Commercial 801.4 873.6 1,006.5 1,110.7 1,110.7 1,131.3 1,158.0 1,194.8 1,229.6 1,244.5 1,271.8 15 Farm 90.0 96.6 102.3 108.9 108.9 110.0 113.0 114.6 116.3 118.1 120.2 16 Consumer credit 1,271.6 1,346.6 1,446.1 1,593.1 1,593.1 1,585.3 1,608.1 1,630.5 1,703.3 1,676.7 1,706.2 By borrowing sector 17 Households 5,556.9 6,011.8 6,510.0 7,070.1 7,070.1 7,139.0 7,314.8 7,486.6 7,680.4 7,793.5 7,984.7 18 Nonflnancial business 4,761.9 5,321.7 5,945.5 6,533.4 6,533.4 6,652.9 6,776.0 6,848.1 6,933.8 6,983.6 7,035.8 19 Corporate 3,382.0 3,774.1 4,210.1 4,616.4 4.616.4 4,695.7 4,770.7 4,804.8 4,852.5 4,875.2 4,894.0 20 Nonfarm noncorporate 1,224.0 1,383.7 1,566.1 1,736.8 1,736.8 1,777.5 1,820.1 1,857.4 1,893.6 1,921.3 1,950.1 21 Farm 155.9 163.9 169.4 180.2 180.2 179.7 185.2 185.9 187.7 187.1 191.6 22 State and local government 1,119.5 1,199.8 1,252.1 1,279.3 1,279.3 1,307.5 1,337.8 1,340.6 1,382.5 1,402.8 1,450.9 23 Foreign credit market debt held in United States 607.9 651.3 676.7 742.3 742.3 740.4 726.1 701.7 704.9 724.2 725.6 24 Commercial paper 65.1 72.9 89.2 120.9 120.9 112.8 110.1 106.3 106.7 123.6 130.2 25 Bonds 427.7 462.6 476.7 500.6 500.6 505.9 502.0 481.0 488.4 487.9 477.6 26 Bank loans n.e.c 52.1 58.7 59.2 70.5 70.5 74.1 66.2 67.3 63.2 66.7 72.2 27 Other loans and advances 63.0 57.1 51.6 50.3 50.3 47.5 47.7 47.0 46.6 46.0 45.5 28 Total credit market debt owed by nonflnancial sectors, domestic and foreign 15,851.0 16,936.8 18,065.4 19,010.3 19,010.3 19,248.5 19,406.1 19,697.0 20,081.2 20,334.4 20,629.7 Financial sectors 29 Total credit market debt owed by financial sectors 5,458.0 6,545.2 7,629.6 8,457.0 8,457.0 8,657.3 8,858.0 9,128.0 9,404.7 9,602.3 9,826.8 By instrument 30 Federal government-related 2,821.1 3,292.0 3,884.0 4,317.4 4,317.4 4.422.9 4,591.6 4,796.2 4,944.1 5,117.1 5,241.4 31 Government-sponsored enterprise securities ... 995.3 1,273.6 1,591.7 1,825.8 1,825.8 1.888.7 1,955.8 2,037.4 2,114.0 2,161.8 2,199.6 32 Mortgage pool securities 1,825.8 2,018.4 2,292.2 2,491.6 2,491.6 2.534.2 2,635.7 2,758.8 2,830.1 2,955.3 3,041.8 33 Loans from U.S. government .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 2,636.9 3,253.2 3,745.6 4,139.6 4,139.6 4,234.4 4,266.4 4,331.9 4,460.6 4,485.2 4,585.4 35 Open market paper 745.7 906.7 1,082.9 1,210.7 1,210.7 1,180.8 1,144.5 1,110.2 1,148.8 1,090.9 1,046.9 36 Corporate bonds 1,568.6 1,878.7 2,096.9 2,314.7 2,314.7 2,424.3 2,485.7 2,569.6 2,647.6 2,741.0 2,866.7 37 Bank loans n.e.c 77.3 107.5 93.2 93.0 93.0 97.3 100.4 100.2 106.8 105.1 113.5 38 Other loans and advances 198.5 288.7 395.8 438.3 438.3 450.9 450.7 467.2 473.2 462.4 470.8 39 Mortgages 46.8 71.6 76.7 82.9 82.9 81.1 85.1 84.6 84.2 85.9 87.6 By borrowing sector 40 Commercial banks 140.6 188.6 230.0 266.7 266.7 273.8 274.7 281.4 296.0 295.8 310.4 41 Bank holding companies 168.6 193.5 219.3 242.5 242.5 266.5 269.0 272.7 266.1 269.0 264.2 42 Savings institutions 160.3 212.4 260.4 287.7 287.7 295.1 294.4 305.6 295.1 280.5 275.3 43 Credit unions .6 1.1 3.4 3.4 3.4 3.2 3.5 3.8 4.9 5.5 6.0 44 Life insurance companies 1.8 2.5 3.2 2.5 2.5 1.9 1.9 2.8 3.1 3.7 4.0 45 Government-sponsored enterprises 995.3 1,273.6 1,591.7 1,825.8 1,825.8 1,888.7 1,955.8 2,037.4 2,114.0 2,161.8 2,199.6 46 Federally related mortgage pools 1,825.8 2,018.4 2,292.2 2,491.6 2,491.6 2,534.2 2,635.7 2,758.8 2,830.1 2,955.3 3,041.8 47 Issuers of asset-backed securities (ABSs) 1,076.6 1,398.0 1,621.4 1.829.5 1,829.5 1,894.1 1,944.3 2,027.0 2,138.9 2,198.0 2,267.9 48 Brokers and dealers 35.3 42.5 25.3 40.9 40.9 35.0 43.9 47.1 42.3 38.4 42.8 49 Finance companies 568.3 625.5 695.7 776.9 776.9 756.2 769.0 771.2 776.7 760.8 784.7 50 Mortgage companies 16.0 17.7 17.8 17.9 17.9 18.1 18.2 18.5 18.6 18.8 19.0 51 Real estate investment trusts (REITs) 96.1 158.8 165.1 167.8 167.8 166.2 168.9 168.3 170.2 172.1 178.4 52 Funding corporations 372.6 412.6 504.0 503.7 503.7 524.3 478.6 433.6 448.4 442.6 432.8 All sectors 53 Total credit market debt, domestic and foreign. 21,309.1 23,482.0 25,694.9 27,467.3 27,467.3 27,905.8 28,264.1 28,825.0 29,485.9 29,936.8 30,456.5 54 Open market paper 979.4 1,172.6 1,402.4 1,610.0 1,610.0 1,546.8 1,477.9 1,417.8 1,445.6 1,382.0 1,325.5 55 U.S. government securities 6,625.9 7,044.2 7,564.9 7,702.5 7,702.5 7,831.7 7,842.9 8,116.2 8,323.6 8,547.4 8,674.1 56 Municipal securities 1,367.5 1,464.3 1,532.5 1,567.8 1,567.8 1,597.5 1,629.8 1,635.3 1,685.4 1,707.5 1,759.5 57 Corporate and foreign bonds 3,607.2 4,170.9 4,633.1 5,045.8 5,045.8 5,260.7 5,423.0 5,532.9 5,699.2 5,850.5 6,017.6 58 Bank loans n.e.c 1,169.8 1,314.8 1,383.8 1,496.6 1,496.6 1,492.1 1,460.2 1,452.6 1,421.4 1,409.1 1,380.2 59 Other loans and advances 1,086.5 1.253.0 1,412.0 1,565.7 1,565.7 1,581.6 1,609.0 1,631.1 1,616.0 1.607.6 1,625.4 60 Mortgages 5,201.1 5,715.7 6,320.1 6,885.7 6,885.7 7,010.0 7,213.0 7,408.7 7,591.4 7,756.0 7,967.9 61 Consumer credit 1,271.6 1,346.6 1,446.1 1,593.1 1,593.1 1,585.3 1,608.1 1,630.5 1,703.3 1,676.7 1,706.2 1. Data in this table appear in the Board's Z.l (780) quarterly statistical release, tables L.2 through LA. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A39 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 2000 2001 2002 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr Q4 QI Q2 Q3 Q4 QI Q2 CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 21,309.1 23,482.0 25,694.9 27,467.3 27,467.3 27,905.8 28,264.1 28,825.0 29,485.9 29,936.8 30,456.5 2 Domestic nonfederal nonfinancial sectors 3,105.2 3,352.1 3,678.1 3,540.8 3,540.8 3,474.9 3,407.5 3,397.3 3,452.7 3,475.0 3,497.4 3 Household 2,188.5 2,303.7 2,619.9 2,479.6 2,479.6 2,427.3 2,351.3 2,342.7 2,370.0 2,400.4 2,402.0 4 Nonfinancial corporate business 257.5 241.5 226.0 231.0 231.0 206.2 203.0 195.0 212.2 202.7 210.3 5 Nonfarm noncorporate business 54.2 67.5 64.4 63.2 63.2 64.0 64.1 64.9 65.4 66.2 67.1 6 State and local governments 605.0 739.4 767.8 767.0 767.0 777.4 789.1 794.6 805.1 805.6 818.0 7 Federal government 205.4 219.0 258.0 265.3 265.3 266.4 268.7 269.6 271.3 272.5 274.7 8 Rest of the world 2,097.7 2,278.2 2,354.6 2,621.1 2,621.1 2,706.0 2,766.8 2.837.5 2,954.4 3,000.6 3,139.1 9 Financial sectors 15,900.8 17,632.7 19,404.2 21,040.1 21,040.1 21,458.5 21,821.0 22,320.6 22,807.4 23,188.7 23,545.4 10 Monetary authority 431.4 452.5 478.1 511.8 511.8 523.9 535.1 534.1 551.7 575.4 590.7 11 Commercial banking 4,031.9 4,336.1 4,648.3 5,006.3 5,006.3 5,013.8 5,041.5 5,100.6 5,210.5 5,231.3 5,343.2 12 US.-chartered banks 3,450.7 3,761.4 4,080.0 4,419.5 4,419.5 4,420.8 4,463.5 4,513.5 4,610.1 4,629.3 4,734.6 13 Foreign banking offices in United States 516.1 504.5 487.4 511.3 511.3 516.6 501.3 509.3 510.7 507.7 512.6 14 Bank holding companies 27.4 26.5 32.7 20.5 20.5 22.3 21.6 21.3 24.7 27.7 28.1 15 Banks in U.S.-affiliated areas 37.8 43.8 48.3 55.0 55.0 54.1 55.1 56.5 65.0 66.6 67.9 16 Savings institutions 928.5 964.7 1,032.4 1,088.6 1,088.6 1,100.5 1,116.1 1,118.1 1,131.4 1,134.7 1,116.0 17 Credit unions 305.3 324.2 351.7 379.7 379.7 387.0 392.4 408.4 421.2 433.1 445.1 18 Bank personal trusts and estates 207.0 194.1 222.0 239.1 239.1 241.8 245.1 247.3 249.5 251.0 252.1 19 Life insurance companies 1,751.1 1,828.0 1,886.0 1,943.9 1,943.9 1,969.6 2,004.8 2,054.8 2,074.8 2,136.9 2,182.8 20 Other insurance companies 515.3 521.1 518.2 509.4 509.4 510.0 510.0 511.3 518.4 527.6 534.8 21 Private pension funds 674.6 651.2 668.2 701.6 701.6 706.8 718.0 720.6 721.9 728.7 738.1 22 State and local government retirement funds 632.5 704.6 751.4 806.0 806.0 788.3 807.6 789.0 788.4 806.0 807.3 23 Money market mutual funds 721.9 965.9 1,147.8 1,290.9 1,290.9 1,404.2 1,414.3 1,498.0 1,536.9 1,496.4 1,419.3 24 Mutual funds 901.1 1,028.4 1,076.8 1,097.8 1,097.8 1,113.9 1,160.3 1,188.2 1,223.8 1,276.8 1,295.3 25 Closed-end funds 98.3 103.8 111.2 106.4 106.4 106.0 105.6 105.2 104.7 104.3 103.9 26 Government-sponsored enterprises 938.3 1,252.3 1,543.5 1,807.1 1,807.1 1,877.7 1,956.1 2,026.1 2,114.3 2,163.8 2,199.0 27 Federally related mortgage pools 1,825.8 2,018.4 2,292.2 2,491.6 2,491.6 2,534.2 2,635.7 2,758.8 2,830.1 2,955.3 3,041.8 28 Asset-backed securities (ABSs) issuers 937.7 1,219.4 1,424.6 1,602.9 1,602.9 1,660.5 1,703.7 1,780.0 1,886.2 1,939.3 2,003.6 29 Finance companies 568.2 645.5 742.5 850.5 850.5 848.0 878.5 859.5 844.8 832.4 834.6 30 Mortgage companies 32.1 35.3 35.6 35.9 35.9 36.2 36.5 36.9 37.2 37.6 38.0 31 Real estate investment trusts (REITs) 50.6 45.5 42.9 36.6 36.6 37.6 37.9 39.8 43.3 49.9 57.9 32 Brokers and dealers 182.6 189.4 154.7 223.6 223.6 317.7 288.4 366.2 316.1 299.6 357.0 33 Funding corporations 166.7 152.3 276.0 310.4 310.4 281.0 233.5 177.7 202.3 208.7 185.1 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Total credit market debt 21,309.1 23,482.0 25,694.9 27,467.3 27,467.3 27,905.8 28,264.1 28,825.0 29,485.9 29,936.8 30,456.5 Other liabilities 35 Official foreign exchange 48.9 60.1 50.1 46.1 46.1 42.8 43.4 49.0 46.8 45.7 52.0 36 Special drawing rights certificates 9.2 9.2 6.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 37 Treasury currency 19.3 19.9 20.9 23.2 23.2 22.9 23.2 23.2 23.2 23.2 23.2 38 Foreign deposits 618.5 642.3 703.6 824.5 824.5 881.6 837.6 848.0 908.9 894.1 916.5 39 Net interbank liabilities 219.4 189.4 202.4 221.2 221.2 156.7 158.7 166.5 187.7 157.6 117.3 40 Checkable deposits and currency 1,286.1 1,333.3 1,484.5 1,413.1 1,413.1 1,404.9 1,448.4 1,485.1 1,601.4 1,567.2 1,640.5 41 Small time and savings deposits 2,474.1 2,626.5 2,671.5 2,860.3 2,860.3 2,962.6 2,992.3 3,047.5 3,127.5 3,229.5 3,257.1 42 Large time deposits 713.4 805.3 936.4 1,052.6 1,052.6 1,077.0 1,087.3 1,094.2 1,121.1 1,178.9 1,188.7 43 Money market fund shares 1,042.5 1,329.7 1,578.8 1,812.1 1,812.1 1,994.7 2,014.7 2,116.1 2,240.7 2,202.6 2,150.3 44 Security repurchase agreements 822.4 913.8 1,083.6 1,196.8 1,196.8 1,187.4 1,206.6 1,255.2 1,233.6 1,220.9 1,274.9 45 Mutual fund shares 2,989.4 3,613.1 4,538.5 4,434.6 4,434.6 3,990.4 4,259.5 3,753.1 4,135.5 4,246.9 3,908.8 46 Security credit 469.1 572.2 676.6 822.7 822.7 799.3 781.5 912.1 825.9 774.8 730.6 47 Life insurance reserves 665.0 718.3 783.9 819.1 819.1 823.0 840.3 844.0 880.0 904.2 914.5 48 Pension fund reserves 7,323.4 8,208.4 9,065.3 9,069.0 9,069.0 8,584.0 8,862.6 8,281.0 8,694.0 8,817.8 8,348.6 49 Trade payables 1,967.4 2,073.8 2,342.4 2,512.6 2,512.6 2,536.4 2,498.4 2,502.4 2,493.4 2,526.0 2,532.9 50 Taxes payable 151.1 170.7 193.9 215.6 215.6 223.3 222.5 251.4 229.9 241.3 252.8 51 Investment in bank personal trusts 942.5 1,001.0 1,130.4 1,019.4 1,019.4 929.1 964.4 859.6 912.0 907.8 842.0 52 Miscellaneous 6,733.2 7,633.8 8,489.4 9,387.4 9,387.4 9,838.8 10,118.2 10,496.0 10,083.1 10,106.0 10,346.8 5533 Total liabilities 4499,,880033..88 5555,,440022..66 6611,,665533..33 6655,,119999..99 6655,,119999..99 6655,,336622..99 66,625.8 6666,,881111..66 6688,,223322..99 6688,,998833..44 6688,,995566..22 Financial assets not included in liabilities (+) 54 Gold and special drawing rights 21.1 21.6 21.4 21.6 21.6 21.4 21.5 22.0 21.8 21.9 22.7 55 Corporate equities 13,301.7 15,577.3 19,581.2 17,611.9 17,611.9 15,323.0 16,254.3 13,645.0 15,209.3 15,228.5 13,339.3 56 Household equity in noncorporate business 4,052.7 4,285.7 4,544.3 4,797.8 4,797.8 4,852.0 4,874.6 4,919.4 4,877.1 4,908.4 4,971.8 Liabilities not identified as assets (—) 57 Treasury currency -6.3 -6.4 -7.1 -8.5 -8.5 -9.4 -9.5 -9.8 -9.8 -10.4 -10.6 58 Foreign deposits 535.0 542.8 585.7 627.4 627.4 673.0 631.3 644.9 694.1 685.0 717.7 59 Net interbank transactions -32.2 -26.5 -28.5 -4.3 -4.3 1.1 3.8 4.5 11.1 21.8 18.0 60 Security repurchase agreements 172.9 230.6 266.4 385.0 385.0 341.4 376.2 400.2 346.3 357.5 384.5 61 Taxes payable 104.2 121.2 121.9 127.7 127.7 111.9 131.7 148.6 100.0 92.3 150.6 62 Miscellaneous -1,376.6 -1,956.1 -2,447.0 -3,006.7 -3,006.7 -2,940.6 -2,881.4 -2,738.3 -3,207.4 -3,176.8 -3,235.6 Floats not included in assets (-) 63 Federal government checkable deposits -8.1 -3.9 -9.8 -2.3 -2.3 -2.8 -4.8 -5.9 -14.1 32.4 61.3 64 Other checkable deposits 26.2 23.1 22.3 24.0 24.0 21.1 25.5 19.2 28.6 26.3 31.4 65 Trade credit 128.1 84.8 91.7 117.7 117.7 84.6 63.8 48.7 134.0 87.8 36.9 66 Totals identified to sectors as assets 67,636.0 76,277.6 87,204.5 89,370.9 89,370.9 87,279.0 89,439.6 86,885.9 90,258.5 91,026.4 89,135.7 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares. L.l and L.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • December 2002 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 2001 2002 2001 2002 2001 2002 Q4 Qi Q2r Q3 Q4 Qi Q2 Q3 Q4 Qi Q2< Q3 Output (1992=100) Capacity (percent of 1992 output) Capacity utilization rate (percent)2 1 Total industry 137.2 138.1 139.5 140.7 183.6 184.1 184.5 185.0 74.7 75.0 75.6 76.1 2 Manufacturing 141.9 142.9 144.2 145.4 194.0 194.4 194.9 195.5 73.1 73.5 74.0 74.4 3 Primary processing3 164.5 168.0 172.4 175.0 224.5 225.3 226.2 227.2 73.3 74.6 76.2 77.0 4 Advanced processing4 129.3 129.2 129.0 129.4 177.2 177.4 177.7 177.9 73.0 72.8 72.6 72.7 5 Durable goods 174.1 176.1 178.4 180.4 248.5 249.4 250.4 251.5 70.1 70.6 71.3 71.7 6 Lumber and products 112.7 112.3 112.3 113.0 149.1 149.3 149.6 149.8 75.6 75.2 75.1 75.4 7 Primary metals 109.1 112.1 114.5 116.5 150.4 149.4 147.8 145.8 72.6 75.0 77.5 79.9 8 Iron and steel 104.0 109.3 114.8 118.2 146.2 144.4 141.5 137.9 71.2 75.7 81.2 85.7 9 Nonferrous 115.3 115.6 114.5 115.0 155.8 155.9 155.9 155.7 74.0 74.1 73.5 73.8 10 Industrial machinery and equipment 202.2 205.7 207.8 208.8 299.8 300.4 301.1 301.6 67.5 68.5 69.0 69.2 11 Electrical machinery 485.7 499.3 516.0 519.9 752.5 762.1 774.4 789.1 64.6 65.5 66.6 65.9 12 Motor vehicles and parts 165.1 173.7 181.2 190.3 222.9 224.2 225.4 226.7 74.1 77.5 80.4 83.9 13 Aerospace and miscellaneous transportation equipment 91.2 86.2 82.5 80.6 135.1 135.1 134.8 134.6 67.5 63.8 61.2 59.9 14 Nondurable goods 110.2 110.6 111.0 111.5 142.9 142.9 143.0 143.1 77.1 77.4 77.6 77.9 15 Textile mill products 82.4 84.9 86.5 86.4 115.4 114.4 113.4 112.5 71.5 74.3 76.2 76.8 16 Paper and products 105.8 104.4 106.9 109.1 139.0 139.0 138.8 138.5 76.1 75.1 77.0 78.8 17 Chemicals and products 122.4 122.9 123.3 125.8 158.6 158.9 159.7 160.7 77.2 77.4 77.2 78.2 18 Plastics materials 115.6 119.9 128.3 129.0 153.4 153.8 154.1 154.4 75.4 77.9 83.2 83.6 19 Petroleum products 113.7 116.2 116.0 114.7 122.7 122.9 123.0 123.2 92.7 94.6 94.3 93.1 20 Mining 98.6 96.3 95.5 95.8 112.6 112.9 112.9 112.9 87.6 85.3 84.6 84.8 21 Utilities 116.9 119.3 124.1 126.6 139.9 141.6 143.0 144.2 83.6 84.3 86.8 87.8 22 Electric 121.1 122.1 126.1 129.6 139.8 141.9 143.7 145.3 86.7 86.0 87.8 89.2 Footnotes appear on page A41. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A41 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1—Continued Seasonally adjusted 1973 1975 Previous cycle5 Latest cycle6 2001 2002 SSeerriieess High Low High Low High Low Sept. Apr. May Juner Julyr Aug/ Sept.p Capacity utilization rate (percent)2 1 Total industry 89.2 72.6 87.3 71.1 85.4 78.1 75.5 75.3 75.6 76.0 76.3 76.0 75.9 2 Manufacturing 88.5 70.5 86.9 69.0 85.7 76.6 73.7 73.6 74.0 74.3 74.6 74.4 74.2 3 Primary processing3 91.8 67.3 88.6 65.7 88.3 76.7 74.4 75.4 76.4 76.7 77.0 77.0 77.1 4 Advanced processing4 86.5 72.5 86.3 71.0 84.2 76.6 73.3 72.5 72.4 72.8 73.1 72.7 72.3 Durable goods 89.2 68.9 87.7 63.9 84.6 73.1 71.0 70.8 71.2 71.7 71.8 71.9 71.5 6 Lumber and products 88.7 61.2 87.9 60.8 93.6 75.5 78.2 74.7 74.8 75.9 75.6 75.1 75.5 7 Primary metals 100.2 65.9 94.2 45.1 92.7 73.7 77.4 75.6 77.9 78.9 77.6 80.8 81.4 8 Iron and steel 105.8 66.6 95.8 37.0 95.2 71.8 76.9 77.7 83.1 82.8 81.2 86.7 89.1 9 Nonferrous 90.8 59.8 91.1 60.1 89.3 74.2 77.8 73.2 72.4 74.8 73.6 74.5 73.3 10 Industrial machinery and equipment 96.0 74.3 93.2 64.0 85.4 72.3 68.6 68.7 69.2 69.2 68.7 70.0 69.0 11 Electrical machinery 89.2 64.7 89.4 71.6 84.0 75.0 64.8 66.0 67.2 66.8 66.1 65.8 65.8 12 Motor vehicles and parts 93.4 51.3 95.0 45.5 89.1 55.9 74.0 79.7 79.3 82.1 84.8 84.3 82.8 13 Aerospace and miscellaneous transportation equipment... 78.4 67.6 81.9 66.6 87.3 79.2 70.3 61.8 61.0 60.8 60.2 60.0 59.6 14 Nondurable goods 87.8 71.7 87.5 76.4 87.3 80.7 77.3 77.3 77.6 77.9 78.3 77.8 77.7 15 Textile mill products 91.4 60.0 91.2 72.3 90.4 77.7 74.1 76.3 76.6 75.9 78.1 76.3 76.0 16 Paper and products 97.1 69.2 96.1 80.6 93.5 85.0 78.9 75.8 78.0 77.2 78.4 78.5 79.4 17 Chemicals and products 87.6 69.7 84.6 69.9 86.2 79.3 76.3 76.7 77.2 77.6 78.5 78.0 78.1 18 Plastics materials 102.0 50.6 90.9 63.4 97.0 74.8 75.8 80.4 85.2 84.2 82.5 83.8 84.4 19 Petroleum products 96.7 81.1 90.0 66.8 88.5 85.1 91.5 95.0 94.3 93.6 93.4 93.2 92.8 20 Mining 94.3 88.2 96.0 80.3 88.0 87.0 90.9 84.4 84.2 85.1 84.8 85.3 84.4 21 Utilities 96.2 82.9 89.1 75.9 92.6 83.4 85.1 87.0 86.3 87.1 88.8 86.4 88.2 22 Electric 99.0 82.7 88.2 78.9 95.0 87.1 87.5 88.4 86.6 88.4 90.4 87.4 89.8 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; fabricated metals; semiconductors and related electronic components; and rates was released in November 2001. The recent annual revision is described in the March motor vehicle parts. 2002 issue of the Bulletin. For a description of the methods of estimating industrial 4. Advanced processing includes foods, tobacco, apparel, furniture and fixtures, printing production and capacity utilization, see "Industrial Production and Capacity Utilization: and publishing, chemical products such as drugs and toiletries, agricultural chemicals, leather Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 (February and products, machinery except semiconductors and related electronic components, transpor- 1997), pp. 67-92, and the references cited therein. For details about the construction of tation equipment except motor vehicle parts, instruments, and miscellaneous manufacturing. individual industrial production series, see "Industrial Production: 1989 Developments and 5. Monthly highs, 1978-80; monthly lows, 1982. Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. 6. Monthly highs, 1988-89; monthly lows, 1990-91. 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

A42 Domestic Nonfinancial Statistics • December 2002 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data seasonally adjusted „ 1 p 9 ro 9 - 2 2001 2001 2002 por- avg. tion Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Juner Julyr Aug/ Sept.P Index (1992= 100) MAJOR MARKETS 1 Total index 100.0 140.1 138.5 137.7 137.2 136.7 137.6 138.1 138.6 138.8 139.4 140.3 141.1 140.6 140.5 2 Products 60.8 129.4 127.7 126.8 126.7 126.5 126.7 126.9 127.4 127.0 127.3 128.0 128.5 127.9 127.6 3 Final products 46.3 132.0 130.0 129.2 129.4 129.1 129.3 129.4 129.6 129.2 129.3 130.2 130.9 130.1 129.5 4 Consumer goods, total 29.0 120.7 119.9 119.6 120.0 120.6 120.6 121.2 121.7 121.4 121.4 122.3 123.2 121.8 121.7 5 Durable consumer goods 5.8 151.3 151.8 146.2 152.1 156.2 154.5 155.4 156.8 157.9 159.0 161.1 164.3 162.3 160.8 6 Automotive products 2.5 149.9 152.5 145.4 155.4 160.7 158.3 158.1 159.6 162.4 162.7 169.0 174.6 173.8 172.2 1 Autos and trucks 1.6 160.5 163.9 154.5 170.7 177.8 175.0 173.4 173.7 179.0 178.2 185.8 197.1 195.1 192.9 8 Autos, consumer 0.9 94.0 92.7 86.9 94.8 101.1 101.2 110.5 102.5 104.1 102.3 104.5 107.2 102.0 95.5 9 Trucks, consumer 0.7 231.4 239.8 226.5 251.5 259.5 253.6 240.6 249.7 258.9 259.1 272.4 292.7 294.0 296.0 10 Auto parts and allied goods 0.9 133.5 134.8 131.3 131.3 133.6 132.0 134.0 137.4 136.2 138.3 142.3 138.7 139.8 139.5 11 Other 3.3 151.5 149.8 145.9 146.9 149.7 148.7 151.1 152.2 151.3 153.3 150.6 150.8 147.3 145.9 12 Appliances, televisions, and air conditioners 0.9 283.2 288.2 271.9 280.1 297.9 295.1 304.8 308.6 299.9 312.8 295.7 290.9 289.2 290.3 13 Carpeting and furniture 0.8 119.1 118.5 116.4 119.2 118.8 117.2 118.8 118.3 119.4 119.1 116.0 116.4 112.9 111.7 14 Miscellaneous home goods 1.6 114.2 110.5 109.2 107.5 108.0 108.0 108.7 110.0 109.8 110.4 111.5 112.6 109.3 107.6 15 Nondurable consumer goods 23.2 113.3 112.3 113.1 112.3 112.2 112.6 113.1 113.4 112.8 112.6 113.2 113.6 112.5 112.6 16 Foods and tobacco 10.4 108.8 107.7 108.2 108.6 109.0 109.2 109.7 110.4 109.9 109.3 109.7 109.4 108.0 107.7 17 Clothing 2.4 78.3 74.8 74.4 73.2 74.7 75.4 74.9 75.7 74.6 74.5 74.5 74.9 72.4 73.7 18 Chemical products 4.6 145.0 145.9 148.5 148.0 148.5 149.4 147.6 146.7 144.7 144.0 146.4 147.9 146.8 147.6 19 Paper products 2.9 105.5 105.1 103.9 102.1 100.2 98.8 98.1 98.5 96.7 97.7 98.9 99.1 100.2 99.8 20 Energy 3.0 117.4 114.8 116.9 113.4 111.6 113.5 118.3 118.4 120.8 121.6 120.7 122.4 120.4 121.7 21 Fuels 0.8 114.2 113.9 116.1 115.2 112.6 117.4 116.5 115.4 117.7 115.6 114.5 114.2 114.7 113.0 22 Residential utilities 2.1 119.2 115.0 117.0 112.0 110.7 111.1 118.9 119.7 122.1 124.4 123.7 126.3 123.1 125.9 23 Equipment 17.3 152.3 147.1 145.4 145.0 142.7 143.3 142.2 141.7 141.3 141.6 142.3 142.5 143.0 141.3 24 Business equipment 13.2 175.9 168.4 166.9 167.2 164.3 165.3 164.0 163.5 162.9 163.2 163.8 163.9 164.0 161.2 25 Information processing 5.4 279.5 266.0 267.9 269.1 265.5 268.2 267.9 269.1 266.6 265.1 265.1 264.5 263.8 264.5 26 Computer and office equipment 1.1 948.2 903.0 913.2 927.8 941.2 969.2 998.7 1,020.7 1,012.6 1,001.1 995.0 1,005.3 1,016.6 1,028.2 27 Industrial 4.0 125.1 119.6 119.4 118.3 114.5 116.1 113.5 113.6 113.3 116.5 116.0 115.5 117.3 115.1 28 Transit 2.5 127.6 124.6 119.2 118.6 118.7 116.4 116.8 114.1 113.8 111.9 113.2 114.9 111.5 107.5 29 Autos and trucks 1.2 145.8 143.6 136.2 143.6 151.4 150.5 155.7 154.6 158.6 159.2 165.4 171.3 166.9 160.2 30 Other 1.3 139.1 131.7 129.2 134.2 130.2 133.1 130.5 131.2 132.5 132.1 135.1 134.5 138.5 133.4 31 Defense and space equipment 3.4 74.0 73.8 74.2 74.3 74.7 74.9 74.9 74.9 75.3 75.7 76.1 76.7 78.0 79.2 32 Oil and gas well drilling 0.6 140.2 140.4 127.2 114.4 107.8 107.3 105.3 104.5 102.0 101.4 104.4 104.1 105.4 105.2 33 Manufactured homes 0.2 93.7 102.9 100.2 99.5 97.7 93.1 89.1 81.5 82.4 84.8 84.3 84.4 84.0 83.5 34 Intermediate products, total 14.5 121.4 120.7 119.6 118.9 118.6 118.9 119.4 120.8 120.3 120.9 121.5 121.4 121.3 121.8 35 Construction supplies 5.4 137.6 138.1 134.6 134.0 135.6 136.3 136.8 139.7 138.3 139.6 140.5 138.3 139.6 140.0 36 Business supplies 9.1 111.9 110.4 110.7 109.8 108.6 108.5 109.1 109.6 109.6 109.9 110.2 111.3 110.4 111.0 37 Materials 39.2 158.0 156.5 155.9 154.8 153.6 155.8 157.1 157.4 158.8 160.2 161.3 162.6 162.6 162.8 38 Durable goods materials 20.7 212.7 209.4 207.9 206.5 206.0 209.4 211.6 212.1 214.2 216.2 218.0 219.1 219.9 219.8 39 Durable consumer parts 4.0 155.8 155.3 152.3 155.0 157.5 161.4 162.9 163.4 165.8 166.0 167.5 171.7 171.3 169.7 40 Equipment parts 7.5 441.8 430.4 431.7 427.9 426.7 434.0 439.7 440.8 444.9 452.7 456.9 456.2 461.0 461.8 41 Other 9.2 125.2 123.8 122.5 120.5 119.0 120.5 121.5 121.8 122.7 123.6 124.5 124.4 124.7 124.9 42 Basic metal materials 3.1 113.7 113.3 111.0 106.7 101.9 106.9 107.9 109.0 108.1 109.9 111.2 109.4 112.8 112.8 43 Nondurable goods materials 8.9 104.2 104.2 104.7 103.1 101.1 103.3 103.4 104.1 104.8 107.1 107.1 107.9 108.1 108.3 44 Textile materials 1.1 90.8 89.0 87.2 84.7 84.5 84.9 87.4 90.3 88.8 89.7 87.9 91.7 88.8 88.5 45 Paper materials 1.8 108.6 110.5 112.4 106.9 103.1 106.9 103.3 103.2 105.8 109.1 106.4 109.1 109.9 110.3 46 Chemical materials 4.0 102.8 102.1 103.5 102.2 99.3 102.8 104.1 105.4 105.9 108.6 108.9 109.5 110.1 110.5 47 Other 2.1 109.8 110.2 108.8 110.4 111.2 110.4 110.0 108.9 109.5 110.9 113.2 111.3 111.7 112.0 48 Energy materials 9.6 103.3 103.1 102.6 102.6 101.6 101.6 102.6 102.1 103.0 102.4 103.3 105.2 103.8 104.2 49 Primary energy 6.2 98.8 99.4 98.2 98.8 97.9 97.6 97.7 96.9 97.6 96.5 97.8 98.6 98.1 97.9 50 Converted fuel materials 3.4 111.7 109.3 110.9 109.1 107.9 108.6 111.6 112.0 113.3 113.4 113.8 117.8 114.6 116.3 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.3 139.8 138.0 137.5 136.6 135.8 136.7 137.3 137.8 137.8 138.5 139.2 139.6 139.3 139.3 52 Total excluding motor vehicles and parts 95.3 139.0 137.2 136.8 135.8 134.9 135.8 136.3 136.7 136.7 137.4 137.9 138.4 138.0 138.0 53 Total excluding computer and office equipment 98.4 134.2 132.8 132.0 131.5 130.9 131.7 132.2 132.6 132.8 133.4 134.3 135.0 134.6 134.4 54 Consumer goods excluding autos and trucks . . 27.5 118.5 117.6 117.8 117.2 117.4 117.6 118.3 118.8 118.2 118.2 118.7 119.0 117.7 117.7 55 Consumer goods excluding energy 26.1 121.1 120.6 119.9 120.8 121.7 121.5 121.5 122.1 121.4 121.4 122.5 123.3 122.0 121.7 56 Business equipment excluding autos and trucks 12.0 179.7 171.5 170.8 170.1 165.7 167.0 164.7 164.4 163.1 163.3 163.1 162.4 163.1 160.9 57 Business equipment excluding computer and office equipment 12.0 146.8 140.6 139.0 139.1 136.3 136.8 135.2 134.5 134.0 134.4 135.1 135.0 135.0 132.4 58 Materials excluding energy 29.6 175.7 173.7 173.0 171.5 170.3 173.4 174.7 175.3 176.9 179.1 180.3 181.2 181.8 181.9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A43 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued Monthly data seasonally adjusted 1992 2001 2002 GGrroouupp c S o I d C e 2 p p r o o r - - 2 aa 0 vv 0 gg 1 .. tion Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Juner July' Aug.' Sept." Index(1992= 100) MAJOR INDUSTRIES 59 Total index 100.0 140.1 138.5 137.7 137.2 136.7 137.6 138.1 138.6 138.8 139.4 140.3 141.1 140.6 140.5 60 Manufacturing 85.4 144.8 142.9 142.1 142.0 141.6 142.6 142.9 143.4 143.4 144.2 145.0 145.7 145.4 145.1 61 Primary processing 31.0 167.9 166.6 165.6 164.4 163.5 166.6 168.0 169.4 170.3 172.9 173.8 174.7 175.1 175.3 62 Advanced processing 54.4 132.0 129.8 129.1 129.5 129.3 129.3 129.0 129.1 128.7 128.7 129.5 130.0 129.4 128.8 63 Durable goods 44.8 179.3 176.1 173.9 174.3 174.1 175.7 176.0 176.6 177.2 178.4 179.7 180.4 180.8 180.0 64 Lumber and products ' ' 24 2.1 113.0 116.4 112.8 112.4 113.0 112.9 111.0 112.9 111.6 111.8 113.5 113.2 112.5 113.2 65 Furniture and fixtures 25 1.4 138.7 135.1 133.5 134.8 135.4 133.6 135.0 134.8 134.8 134.7 132.5 134.0 133.1 131.6 66 Stone, clay, and glass products 32 2.1 130.8 129.9 130.3 128.8 126.3 127.7 127.8 127.7 129.6 130.0 129.9 130.0 129.6 130.2 67 Primary metals 33 3.1 116.9 116.4 113.6 110.2 103.6 111.3 111.8 113.1 112.1 115.2 116.2 113.6 117.8 118.1 68 Iron and steel 331,2 1.8 112.6 112.7 110.4 107.1 94.6 107.1 110.6 110.2 110.7 117.5 116.2 113.0 119.6 121.9 69 Raw steel 331PT 0.1 102.8 105.8 99.5 95.1 85.5 100.0 101.3 101.2 101.2 100.9 108.4 108.5 113.2 119.0 70 Nonferrous 333-6,9 1.4 122.3 121.2 117.6 114.1 114.2 116.5 113.5 116.8 114.1 112.9 116.5 114.7 116.1 114.1 71 Fabricated metal products .. 34 5.0 130.4 128.7 127.5 127.2 129.1 128.7 127.7 127.9 128.2 130.0 130.6 131.5 130.8 129.7 72 Industrial machinery and equipment 35 7.8 213.3 205.1 202.8 203.4 200.4 204.5 205.3 207.1 206.8 208.3 208.4 207.1 211.0 208.1 73 Computer and office equipment 357 1.6 1,088.0 1,035.7 1,049.1 1,067.2 1,087.0 1,118.5 1,155.8 1,185.5 1,177.6 1,165.2 1,158.6 1,170.1 1,183.2 1,196.8 74 Electrical machinery 36 7.1 504.2 484.6 484.8 485.1 487.3 494.0 500.8 503.1 507.9 520.1 520.1 518.3 519.3 522.1 75 Transportation equipment .. 37 9.4 128.5 128.5 124.6 127.2 129.1 128.2 128.9 128.2 129.6 128.8 131.8 134.4 133.9 132.1 76 Motor vehicles and parts . 371 4.7 162.9 164.2 157.3 165.9 172.1 171.8 174.5 174.9 179.3 178.8 185.5 191.9 191.1 188.1 77 Autos and light trucks . 371PT 2.5 154.1 156.6 147.4 162.7 169.6 167.1 166.9 166.2 171.1 170.3 177.4 187.9 185.8 183.2 78 Aerospace and miscellaneous transportation equipment 372-6,9 4.7 96.3 95.0 93.8 91.0 88.9 87.4 86.4 84.7 83.3 82.3 82.0 81.0 80.7 80.1 79 Instruments 38 5.4 115.3 112.8 113.6 113.7 112.8 113.8 112.4 112.8 112.2 111.6 111.8 112.7 112.4 113.0 80 Miscellaneous 39 1.3 117.5 114.5 113.6 110.7 114.1 114.6 114.6 116.4 115.8 117.8 119.8 119.5 118.6 117.7 81 Nondurable goods 40.6 111.4 110.5 110.8 110.2 109.7 110.3 110.5 110.9 110.5 111.0 111.4 112.0 111.3 111.3 82 Foods ' ' 20 9.6 112.9 111.7 112.2 113.0 114.0 113.5 113.7 114.4 114.0 113.2 113.6 113.4 112.4 112.2 83 Tobacco products 21 1.6 93.8 92.7 92.8 92.7 90.8 93.1 95.0 95.3 94.4 94.5 95.1 94.5 92.2 90.7 84 Textile mill products 22 1.8 86.7 85.9 83.0 81.9 82.5 82.5 85.1 87.2 86.7 86.8 85.8 88.1 85.9 85.3 85 Apparel products 23 2.2 93.1 89.4 87.8 87.3 88.8 89.4 88.4 89.5 88.3 88.7 88.7 89.3 86.9 87.0 86 Paper and products 26 3.5 108.1 109.7 108.1 106.2 103.1 105.1 103.5 104.5 105.3 108.3 107.1 108.7 108.7 109.9 87 Printing and publishing .... 27 6.8 101.6 99.7 99.8 98.9 97.3 96.6 96.0 95.4 94.9 95.3 96.0 96.2 96.4 96.2 88 Chemicals and products .... 28 10.0 121.1 121.0 123.2 122.4 121.4 123.0 122.9 122.8 122.2 123.3 124.2 126.0 125.4 125.9 89 Petroleum products 29 1.4 114.3 112.1 114.9 114.0 112.2 114.8 117.2 116.7 116.9 116.0 115.2 115.0 114.9 114.4 90 Rubber and plastics 30 3.5 136.8 136.5 134.4 133.4 134.8 134.7 136.6 139.1 139.2 140.2 142.1 141.9 141.7 141.6 91 Leather and products 31 0.3 63.1 61.4 60.0 59.2 58.4 60.3 60.1 60.0 59.5 59.2 59.5 61.1 59.1 61.0 92 Mining 6.8 101.3 102.1 99.5 99.0 97.4 97.0 96.6 95.4 95.3 95.1 96.0 95.7 96.3 95.3 93 Metal 10 0.4 88.4 91.2 85.6 80.0 80.1 75.2 78.2 80.0 75.3 77.3 79.0 75.6 76.4 77.0 94 Coal 12 1.0 111.7 111.7 106.5 106.6 105.8 104.5 107.0 99.0 101.8 101.7 103.3 101.6 103.1 108.5 95 Oil and gas extraction 13 4.8 96.1 97.0 94.8 94.5 92.6 92.0 91.2 90.6 90.3 89.7 90.3 90.6 91.0 88.4 96 Stone and earth minerals 14 0.6 132.6 131.2 129.6 129.5 129.8 133.7 132.5 132.2 132.5 134.7 136.2 135.4 136.1 136.4 97 Utilities 7.8 119.8 118.1 119.4 116.2 115.2 115.7 120.3 121.8 123.9 123.3 124.9 127.8 124.6 127.6 98 Electric 491,3PT 6.2 123.1 121.0 122.3 121.8 119.3 119.8 121.9 124.6 126.6 124.4 127.5 130.9 126.9 131.0 99 Gas 492,3PT 1.6 109.1 106.9 108.0 96.2 100.5 101.0 113.7 111.4 113.9 119.1 114.9 115.6 115.3 114.2 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 80.7 143.9 141.7 141.3 140.6 139.7 140.8 140.9 141.5 141.2 142.1 142.5 142.7 142.5 142.3 101 Manufacturing excluding computers and office equipment 83.8 138.0 136.2 135.4 135.3 134.8 135.8 135.9 136.4 136.4 137.2 138.0 138.6 138.4 138.0 102 Computers, communications equipment, and semiconductors 5.6 1,048.5 994.8 1,002.4 1,002.5 1,006.0 1,032.2 1,065.5 1,077.4 1,088.0 1,107.5 1,117.7 1,116.5 1,122.9 1,135.6 103 Manufacturing excluding computers and semiconductors 81.3 121.2 119.9 119.1 118.9 118.4 119.1 119.0 119.3 119.2 119.8 120.5 120.9 120.7 120.2 104 Manufacturing excluding computers, communications equipment, and semiconductors 79.8 118.2 117.0 116.3 116.1 115.7 116.4 116.4 116.7 116.6 117.2 117.8 118.4 118.1 117.7 Gross value (billions of 1996 dollars, annual rates) MAJOR MARKETS 105 Products, total 100.0 2,720.1 2,694.5 2,669.6 2,679.2 2,683.2 2,686.4 2,694.3 2,707.4 2,704.2 2,710.7 2,731.7 2,744.9 2,732.6 2,720.5 106 Final 77.2 2,101.5 2,075.1 2,056.7 2,070.6 2,075.1 2,076.9 2,080.4 2,084.4 2,085.6 2,088.7 2,106.2 2,121.4 2,108.9 2.094.0 107 Consumer goods 51.9 1,303.7 1,298.5 1,291.1 1,301.9 1,313.7 1,312.6 1,318.7 1,324.4 1,325.9 1,326.5 1,337.6 1,349.4 1,336.9 1.333.1 108 Equipment 25.3 797.4 773.1 761.0 763.5 753.5 757.1 753.3 750.5 750.1 752.9 759.2 761.8 763.4 750.5 109 Intermediate 22.8 618.9 619.4 612.9 608.8 608.3 609.7 614.0 623.0 618.6 622.0 625.6 623.7 623.8 626.5 1. Data in this table appear in the Board's G.17 (419) monthly statistical release. The data Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 (February 1997), pp. are also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The 67-92, and the references cited therein. For details about the construction of individual latest historical revision of the industrial production index and the capacity utilization rates industrial production series, see "Industrial Production: 1989 Developments and Historical was released in November 2001. The recent annual revision is described in the March 2002 Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. issue of the Bulletin. For a description of the methods of estimating industrial production and 2. Standard Industrial Classification. capacity utilization, see "Industrial Production and Capacity Utilization: Historical Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 International Statistics • December 2002 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted except as noted1 2001 2002 IItteemm ccrreeddiittss oorr ddeebbiittss 11999999 22000000 22000011 Q2 Q3 Q4 Qi Q2 1 Balance on current account -292,856 -410,341 -393,371 -99,234 -91,331 -95,086 -112,454 -129,959 7 Balance on goods and services -262,237 -378,681 -358,290 -93,324 -79,778 -88,028 -95,492 -110,613 3 Exports 957,146 1,064,239 998,022 256,766 242,325 232,930 233,252 243,752 4 Imports -1,219,383 -1,442,920 -1,356,312 -350,090 -322,103 -320,958 -328,744 -354,365 5 Income, net 18,138 21,782 14,382 6,006 807 6,521 -946 -6,286 6 Investment, net 23,877 27,651 20,539 7,526 2,345 8,102 682 ^1,628 7 Direct 75,009 88,862 102,595 27,832 23,908 28,602 22,069 17,671 8 Portfolio -51,132 -61,211 -82,056 -20,306 -21,563 -20,500 -21,387 -22,299 9 Compensation of employees -5,739 -5,869 -6,157 -1,520 -1,538 -1,581 -1,628 -1,658 10 Unilateral current transfers, net -48,757 -53,442 -49,463 -11,916 -12,360 -13,579 -16,016 -13,060 11 Change in U.S. government assets other than official reserve assets, net (increase, -) 2,750 -941 -186 -783 77 143 133 1122 12 Change in U.S. official reserve assets (increase, -) 8,747 -290 -4,911 -1,343 -3,559 -199 390 -1,843 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) 10 -722 -630 -156 -145 -140 -109 -107 15 Reserve position in International Monetary Fund 5,484 2,308 -3,600 -1,015 -3,242 83 652 -1,607 16 Foreign currencies 3,253 -1,876 -681 -172 -172 -142 -153 -129 17 Change in US. private assets abroad (increase, -) ^189,066 -605,258 -365,565 -77,910 28,460 -100,032 -26,441 -139,002 18 Bank-reported claims2 -76,263 -148,657 -128,705 -685 69,576 -83,682 727 -72,676 19 Nonbank-reported claims -95,466 -150,805 -14,358 9,670 -9,479 37,210 65 -26,976 20 U.S. purchase of foreign securities, net -128,436 -127,502 -94,662 -51,764 10,087 -26,090 2,047 -9,987 21 U.S. direct investments abroad, net -188,901 -178,294 -127,840 -35,131 -41,724 -27,470 -29,280 -29,363 22 Change in foreign official assets in United States (increase, +) 43,666 37,640 5,224 -20,831 16,882 5,086 7,641 47,062 23 U.S. Treasury securities 12,177 -10,233 10,745 -20,798 15,810 16,760 -582 15,193 24 Other U.S. government obligations 20,350 40,909 20,920 9,932 -216 7,630 7,296 6,548 25 Other U.S. government liabilities2 -2,740 -1,909 -1,882 -791 89 -504 -790 -20 26 Other U.S. liabilities reported by U.S. banks2 12,964 5,746 -30,278 -10,202 -782 -20,507 991 24,415 27 Other foreign official assets3 915 3,127 5,719 1,028 1,981 1,707 726 926 28 Change in foreign private assets in United States (increase, +) 698,813 978,346 747,582 202,441 1,007 245,711 105,855 174,151 29 U.S. bank-reported liabilities4 54,232 116,971 110,667 55,003 -45,567 85,598 -11,051 34,889 30 U.S. nonbank-reported liabilities 78,383 174,251 82,353 -5,307 -25,154 1,170 32.345 25,956 31 Foreign private purchases of U.S. Treasury securities, net -44,497 -76,965 -7,670 -14,685 -15,470 27,229 -7,282 1,386 32 U.S. currency flows 22,407 1,129 23,783 2,772 8,203 10,497 4,525 7,183 33 Foreign purchases of other U.S. securities, net 298,834 455,213 407,653 113,556 64,787 99,320 71,095 103,771 34 Foreign direct investments in United States, net 289,454 307,747 130,796 51,102 14,208 21,897 16,223 966 35 Capital account transactions, net5 -3,340 837 826 207 206 205 208 200 36 Discrepancy 31,286 7 10,701 -2,547 48,258 -55,828 24,668 49,379 37 Due to seasonal adjustment 875 -10,286 1,721 10,019 827 38 Before seasonal adjustment 31,286 7 10,701 -3,422 58,544 -57,549 14,649 48,552 MEMO Changes in official assets 39 U.S. official reserve assets (increase, -) 8,747 -290 -1,911 -1,343 -3,559 -199 390 --11,,884433 40 Foreign official assets in United States, excluding line 25 (increase, +) 46,406 39,549 7,106 -20,040 16,793 5,590 8,431 47,082 41 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) 1,621 12,000 -1,725 -1,699 ^1,081 3,382 --88,,553322 999933 1. Seasonal factors are not calculated for lines 11-16, 18-20, 22-35, and 38^-1. 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 A45 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 2002 AAsssseett 11999999 22000000 22000011 Mar. Apr. May June July Aug. Sept. Oct.? 1 Total 71,516 67,647 68,654 67,574 67,844 69,579 74,696 74,751 75,307 75,860 75,499 2 Gold stock1 11,048 11,046 11,045 11,044 11,044 11,044 11,044 11,042 11,042 11,042 11,042 3 Special drawing rights2 3 10,336 10,539 10,774 10,809 10,988 11,297 11,645 11,575 11,752 11,710 11,700 4 Reserve position in International Monetary Fund2 17,950 14,824 17,854 17,078 16,184 16,498 19,841 19,863 20,043 20,857 20,586 5 Foreign currencies4 32,182 31,238 28,981 28,643 29,628 30,740 32,166 32,271 32,470 32,251 32,171 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 2002 AAsssseett 11999999 22000000 22000011 Mar. Apr. May June July Aug. Sept. Oct." 1 Deposits 71 215 61 256 Ill 127 90 164 86 150 89 Held in custody 2 U.S. Treasury securities2 632,482 594,094 592,630 593,865 589,531 605,501 619,226 635,036 638,003 644,381 647,165 3 Earmarked gold3 9,933 9,451 9,099 9,098 9,091 9,084 9,077 9,071 9,064 9,057 9,050 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

A46 International Statistics • December 2002 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 2000 2000 2001 2002 IItteemm 11999999 Mar.6 Mar.6 Dec. Dec. May' June July Aug.P 1 Total1 888800006666,,,,333311118888 888822229999,,,,222299990000 999955558888,,,,777722225555 999977775555,,,,333300004444 999988887777,,,,555577772222 1111,,,,000011113333,,,,888855555555 1111,,,,000044443333,,,,222299992222 1111,,,,000044448888,,,,000088887777 1111,,,,000044448888,,,,444433333333 By type 2 Liabilities reported by banks in the United States2 111133338888,,,,888844447777 111133336666,,,,555577777777 111133336666,,,,555577777777 111144444444,,,,555599993333 111122223333,,,,444422229999 111133339999,,,,000033336666 111144448888,,,,999900008888 111144443333,,,,111144442222 111133337777,,,,222222229999 3 U.S. Treasury bills and certificates3 111155556666,,,,111177777777 111166664444,,,,777788881111 111166664444,,,,777788881111 111155553333,,,,000011110000 111166661111,,,,777711119999 111166662222,,,,555511116666 111177776666,,,,111177778888 111188888888,,,,444488886666 111188889999,,,,333300001111 U.S. Treasury bonds and notes 4 Marketable 444422222222,,,,222266666666 444433330000,,,,222244443333 444466665555,,,,111111111111 444455550000,,,,888833332222 444455554444,,,,333300006666 444455552222,,,,888844442222 444455555555,,,,000000003333 444444449999,,,,777733335555 444455550000,,,,333377770000 5 Nonmarketable4 6666,,,,111111111111 5555,,,,777733334444 5555,,,,777733334444 5555,,,,333344448888 3333,,,,444411111111 3333,,,,111199999999 3333,,,,000000000000 3333,,,,000022220000 3333,,,,000044440000 6 U.S. securities other than U.S. Treasury securities5 88882222,,,,999911117777 99991111,,,,999955555555 111188886666,,,,555522222222 222222221111,,,,555522221111 222244444444,,,,777700007777 222255556666,,,,222266662222 222266660000,,,,222200003333 222266663333,,,,777700004444 222266668888,,,,444499993333 By area 7 Europe1 222244444444,,,,888800005555 222255551111,,,,888811115555 222233338888,,,,555544448888 222244440000,,,,333322225555 222244443333,,,,444455552222 222244448888,,,,000000007777 222255553333,,,,999988885555 222255556666,,,,555533339999 222255555555,,,,222244443333 8 Canada 11112222,,,,555500003333 11113333,,,,666688883333 11115555,,,,000011116666 11113333,,,,777722227777 11113333,,,,444444440000 11111111,,,,999944447777 11111111,,,,000099995555 11110000,,,,666688882222 11110000,,,,888888886666 9 Latin America and Caribbean 77773333,,,,555511118888 77777777,,,,111199995555 77770000,,,,888888884444 77770000,,,,444444442222 77771111,,,,111100003333 66665555,,,,333322221111 66664444,,,,333377778888 66662222,,,,777700009999 66661111,,,,888888887777 10 Asia 444466663333,,,,777700003333 444477774444,,,,222266669999 666611112222,,,,111111116666 666622226666,,,,000011117777 666633335555,,,,111188880000 666666664444,,,,000077774444 666688887777,,,,666644445555 666699992222,,,,333300009999 666699993333,,,,333322226666 7777,,,,555522223333 7777,,,,999977779999 11113333,,,,555500004444 11114444,,,,666699990000 11115555,,,,111166667777 11114444,,,,888855550000 11115555,,,,111100002222 11115555,,,,222233333333 11115555,,,,222255557777 12 Other countries 4444,,,,222266666666 4444,,,,333344449999 8888,,,,666655555555 11110000,,,,111100001111 9999,,,,222222228888 9999,,,,666655554444 11111111,,,,000088885555 11110000,,,,666611113333 11111111,,,,888833332222 1. Includes the Bank for International Settlements. 6. Data in the two columns shown for this date reflect different benchmark bases for 2. Principally demand deposits, time deposits, bankers acceptances, commercial paper, foreigners' holdings of selected U.S. long-term securities. Figures in the first column are negotiable time certificates of deposit, and borrowings under repurchase agreements. comparable to those for earlier dates; figures in the second column are based in part on a 3. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official benchmark survey as of end-March 2000 and are comparable to those shown for following institutions of foreign countries. dates. 4. Excludes notes issued to foreign official nonreserve agencies. Includes current value of SOURCE. Based on U.S. Department of the Treasury data and on data reported to the zero-coupon Treasury bond issues to foreign governments as follows: Mexico, beginning Treasury by banks (including Federal Reserve Banks) and securities dealers in the United March 1990, 30-year maturity issue; Venezuela, beginning December 1990, 30-year maturity States, and in periodic benchmark surveys of foreign portfolio investment in the United issue; Argentina, beginning April 1993, 30-year maturity issue. States. 5. Debt securities of U.S. government corporations and federally sponsored agencies, and U.S. corporate stocks and bonds. 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 2001 2002 IItteemm 11999988 11999999 22000000 Sept. Dec. Mar. June 1 Banks' liabilities 101,125 88,537 77,779 92,557 89,627 78,238 93,228 2 Banks' claims 78,162 67,365 56,912 69,116 75,872 80,095 93,274 3 Deposits 45,985 34,426 23,315 36,364 45,382 50,313 56,045 4 Other claims 32,177 32,939 33,597 32,752 30,490 29,782 37,229 5 Claims of banks' domestic customers2 20,718 20,826 24,411 20,885 17,631 16,454 16,005 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 A47 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 2002 IItteemm 11999999 22000000 22000011 Feb.' Mar. Apr. May June July' Aug.p BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 1,408,740 1,511,410 1,655,381' 1,623,270 l,660,955r 1,690,356' 1,714,564' 1,731,188' 1,708,927 1,765,240 2 Banks' own liabilities 971,536 1,077,636 l,180,417r 1,132,871 1,168,062' 1,208,236' 1,218,557' 1,198,097' 1,178,287 1,224,600 3 Demand deposits 42,884 33,365 33,603r 30,888 36,471' 31,392' 32,060' 34,600 32,558 31,428 4 Time deposits2 163,620 187,883 155,466' 143,881 141,730' 139,284' 136,391' 130,408' 123,892 124,988 5 Other3 155,853 171,401 199,727r 216,362 209,517' 224,885' 235,758' 237,427' 257,083 261,930 6 Own foreign offices4 609,179 684,987 791,621' 741,740 780,344' 812,675' 814,348' 795,662' 764,754 806,254 7 Banks' custodial liabilities5 437,204 433,774 474,964 490,399 492,893 482,120 496,007 533,091 530,640 540,640 8 U.S. Treasury bills and certificates6 185,676 177,846 188,028 187,862 189,640 183,012 191,266 208,279 222,361 225,605 9 Short-term agency securities7 n.a. n.a. 65,534 67,736 68,670 69,525 75,157 83,613 67,985 68,968 10 Other negotiable and readily transferable instruments8 132,617 145,840 91,147 92,425 93,771 95,378 94,061 96,154 102,502 105,265 11 Other 118,911 110,088 130,255 142,376 140,812 134,205 135,523 145,045 137,792 140,802 12 Nonmonetary international and regional organizations9 15,276 12,542 10,807' 15,454 12,127' 14,441' 12,129 11,568 11,495 10,540 13 Banks' own liabilities 14,357 12,140 10,169' 14,554 10,935' 13,427' 11,756 11,138 10,993 9,986 14 Demand deposits 98 41 35 31 22 19 14 32 15 34 15 Time deposits2 10,349 6,246 3,756' 5,483 7,024' 6,194' 6,730 6,401 7,394 6,294 16 Other1 3,910 5,853 6,378 9,040 3,889 7,214 5,012 4,705 3,584 3,658 17 Banks' custodial liabilities5 919 402 638 900 1,192 1,014 373 430 502 554 18 U.S. Treasury bills and certificates6 680 252 577 859 1,105 970 328 407 481 532 19 Short-term agency securities7 n.a. n.a. 40 24 21 21 18 0 0 0 20 Other negotiable and readily transferable instruments8 233 149 21 17 21 21 27 23 21 22 21 Other 6 1 0 0 45 2 0 0 0 0 22 Official institutions10 295,024 297,603 285,148' 296,663 285,689' 288,927' 301,552' 325,086 331,628 326,530 23 Banks' own liabilities 97,615 96,989 83,828' 84,175 79,553' 83,948' 86,402' 92,972 93,555 86,992 24 Demand deposits 3,341 3,952 2,988 1,513 2,651 1,827 2,002 1,707 2,146 1,946 25 Time deposits2 28,942 35,573 19,467' 16,182 14,197' 15,331' 15,514' 14,551' 13,458 14,381 26 Other3 65,332 57,464 61,373' 66,480 62,705' 66,790' 68,886' 76,714' 77,951 70,665 27 Banks' custodial liabilities5 197,409 200,614 201,320 212,488 206,136 204,979 215,150 232,114 238,073 239,538 28 U.S. Treasury bills and certificates6 156,177 153,010 161,719 164,076 161,312 155,770 162,516 176,178 188,486 189,301 29 Short-term agency securities7 n.a. n.a. 36,351 45,085 40,826 45,910 49,374 51,634 45,257 45,208 30 Other negotiable and readily transferable instruments8 41,182 47,366 2,180 2,307 2,785 2,702 2,455 3,280 3,496 3,834 31 Other 50 238 1,070 1,020 1,213 597 805 1,022 834 1,195 32 Banks" 900,379 972,932 1,071,951' 1,029,116 1,082,790' 1,103,022' 1,113,832' 1,102,18a 1,054,781 1,098,293 33 Banks' own liabilities 728,492 821,306 913,813' 866,845 907,999' 936,200' 940,930' 913,776' 875,061 914,010 34 Unaffiliated foreign banks 119,313 136,319 122,192' 125,105 127,655' 123,525' 126,582' 118,114' 110,307 107,756 35 Demand deposits 17,583 15,522 13,091' 12,785 16,361' 12,185' 12,875 14,620 12,790 11,804 36 Time deposits2 48,140 66,904 53,105' 45,945 45,304' 43,727' 41,364' 37,094 31,780 33,899 37 Other3 53,590 53,893 55,996' 66,375 65,990' 67,613' 72,343' 66,400' 65,737 62,053 38 Own foreign offices4 609,179 684,987 791,621' 741,740 780,344' 812,675' 814,348' 795,662' 764,754 806,254 39 Banks' custodial liabilities5 171,887 151,626 158,138 162,271 174,791 166,822 172,902 188,404 179,720 184,283 40 U.S. Treasury bills and certificates6 16,796 16,023 13,477 10,378 11,374 13,016 14,442 16,110 17,497 17,737 41 Short-term agency securities7 n.a. n.a. 7,831 3,596 7,399 3,456 6,924 12,439 2,876 2,975 42 Other negotiable and readily transferable instruments8 45,695 36,036 33,102 34,325 36,832 37,267 37,377 36,557 43,450 45,103 43 Other 109,396 99,567 103,728 113,972 119,186 113,083 114,159 123,298 115,897 118,468 44 Other foreigners 198,061 228,333 287.475' 282,037 280,349' 283,966' 287,051' 292,354' 311,023 329,877 45 Banks' own liabilities 131,072 147,201 172,607' 167,297 169,575' 174,661' 179,469' 180,211' 198,678 213,612 46 Demand deposits 21,862 13,850 17,489 16,559 17,437' 17,361' 17,169' 18,241 17,607 17,644 47 Time deposits2 76,189 79,160 79,138' 76,271 75,205' 74,032' 72,783' 72,362 71,260 70,414 48 Other3 33,021 54,191 75,980' 74,467 76,933' 83,268' 89,517' 89,608' 109,811 125,554 49 Banks' custodial liabilities5 66,989 81,132 114,868 114,740 110,774 109,305 107,582 112,143 112,345 116,265 50 U.S. Treasury bills and certificates6 12,023 8,561 12,255 12,549 15,849 13,256 13,980 15,584 15,897 18,035 51 Short-term agency securities7 n.a. n.a. 21,312 19,031 20,424 20,138 18,841 19,540 19,852 20,785 52 Other negotiable and readily transferable instruments8 45,507 62,289 55,844 55,776 54,133 55,388 54,202 56,294 55,535 56,306 53 Other 9,459 10,282 25,457 27,384 20,368 20,523 20,559 20,725 21,061 21,139 MEMO 54 Negotiable time certificates of deposits in custody for foreigners 30,345 34,217 20,440 22,831 21,498 24,061 22,587 27,490 28,011 28,149 55 Repurchase agreements7 n.a. n.a. 150,806' 132,738 128,168' 141,443' 154,803' 159,627' 180,775 192,269 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 for foreign customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 International Statistics • December 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 2002 IItteemm 11999999 22000000 220000iirr Feb. Mar. Apr. May June July Aug.p AREA OR COUNTRY 56 Total, all foreigners 1,408,740 1,511,410 1,655,381 l,623,270r 1,660,955' 1,690,356' 1,714,564' 1,731,188' 1,708,927' 1,765,240 57 Foreign countries 133,464 1,498,867 1,644,574 l,607,816r l,648,828r l,675,916r l,702,435r l,719,620r l,697,432r 1,754,698 58 Europe 441,810 446,788 521,331 518,252' 520,279' 541,083' 539,824' 529,742' 525,065' 547,331 59 Austria 2,789 2,692 2,922 3,053 3,144 3,363 3,096 3,563 2,862 3,537 60 Belgium12 44,692 33,399 6,557 6,574r 7,921 6,607 6,723 6,066' 6,462 6,272 61 Denmark 2,196 3,000 3,626 2,944 2,852 2,801 3,455 3,416 3,507' 4,090 62 Finland 1,658 1,411 1,446 1,159 1,682 1,239 1,198 1,197 3,503 1,498 63 France 49,790 37,833 49,056 41,324r 35,160' 36,396' 36,174 35,390 39,809 35,447 64 Germany 24,753 35,519 22,375 23,298 25,664 25,584' 26,643' 25,188 27,754' 27,046 65 Greece 3,748 2,011 2,307 2,856 2,560 2,285 2,700 3,570 2,815 2,677 66 Italy 6,775 5,072 6,354 4,917 5,356 4,948 4,620' 4,694' 3,914' 3,440 67 Luxembourg12 n.a. n.a. 16,894 14,427 14,005 13,967 14,893 15,469 15,237' 15,680 68 Netherlands 8,143 7,047 12,411 13,779 13,729' 11,030 12,045 10,439 9,568' 11,522 69 Norway 1,327 2,305 3,727 4,871 7,703 6,470 7,681 11,164 14,540 10,047 70 Portugal 2,228 2,403 4,033 4,799 5,416 5,051 4,905 4,616 3,496 3,055 71 Russia 5,475 19,018 20,800 20,841 21,423 22,113 24,211 25,060 24,189 24,195 72 Spain 10,426 7,787 8,811 10,233 9,406 10,737 9,764 11,032 10,394' 12,423 73 Sweden 4,652 6,497 3,375 3,700 3,412 2,495 5,677 4,176 4,815' 5,709 74 Switzerland 63,485 74,635 66,403 94,661 107,645 129,007 114,220 99,588 85,247 101,660 75 Turkey 7,842 7,548 7,474 11,518 11,515 11,671 11,216 9,908 10,701 12,393 76 United Kingdom 172,687 167,757 204,396 171,553' 162,629' 164,217' 172,034' 175,785' 175,246' 183,099 77 Channel Islands and Isle of Man13 n.a. n.a. 36,059 37,198 38,013 38,070 38,602 38,735 39,286' 38,069 78 Yugoslavia14 286 276 309 317 296 265 273 267 279 276 79 Other Europe and other former U.S.S.R.15 28,858 30,578 41,996 44,230 40,748 42,767 39,694 40,419 41,441' 45,196 80 Canada 34,214 30,982 27,247 27,416 28,251' 26,228' 24,434' 24,075' 26,355' 24,604 81 Latin America 117,495 120,041 118,016 115,020' 112,933 111,661 110,009 105,982 105,695' 106,415 82 Argentina 18,633 19,451 10,704 10,371' 11,622 11,795 11,653 11,356 11,297' 11,432 83 Brazil 12,865 10,852 14,169 12,874' 14,628 14,076 12,892 12,968 12,537 12,051 84 Chile 7,008 5,892 4,939 5,140' 5,299 6,326 6,643 6,121 6,396 5,798 85 Colombia 5,669 4,542 4,695 4,587 4,159 4,226 4,273 4,010 3,872 3,718 86 Ecuador 1,956 2,112 2,390 2,363 2,269 2,342 2,294 2,259 2,324 2,266 87 Guatemala 1,626 1,601 1,882 1,821 1,812 1,782 1,335 1,319 1,323 1,384 88 Mexico 30,717 32,166 39,870 40,809' 35,700 34,879 35,250 32,440 33,297' 34,915 89 Panama 4,415 4,240 3,610 3,604 3,350 3,336 3,273 3,894 3,143 3,154 90 Peru 1,142 1,427 1,359 1,347 1,548 1,225 1,270 1,417 1,502 1,353 91 Uruguay 2,386 3,003 3,164 2,537' 2,913 2,648 2,410 2,373 1,885 2,614 92 Venezuela 20,192 24,730 24,974 22,952 22,937 22,380 22,333 21,738 21,771 21,547 93 Other Latin America16 10,886 10,025 6,260 6,615 6,696 6,646 6,383 6,087 6,348 6,183 94 Caribbean 461,200 573,337 665,866 633,338' 663,045' 673,108' 698,131' 704,615' 695,359' 733,907 95 Bahamas 135,811 189,298 179,208 147,795' 171,415' 164,499 172,604 179,725 160,784' 172,812 96 Bermuda 7,874 9,636 10,539 11,181 10,238 11,096 13,419 15,646 18,372' 21,962 97 British West Indies17 312,278 367,197 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 98 Cayman Islands17 n.a. n.a. 458,268 458,464' 464,461' 478,218' 493,272' 488,069' 493,704' 510,913 99 Cuba 75 90 88 89 89 90 93 96 92 99 100 Jamaica 520 794 1,182 1,103 1,115 1,047 996 924 931 948 101 Netherlands Antilles 4,047 5,428 3,264 3,152 3,800 5,745 3,312 3,757 3,950' 10,548 102 Trinidad and Tobago 595 894 1,269 1,547 1,406 1,791 1,634 1,593 1,691 1,803 103 Other Caribbean16 n.a. n.a. 12,048 10,007' 10,521' 10,622' 12,801' 14,805 15,835' 14,822 J 04 319,489 305,554 294,496 295,443' 303,928' 306,459 312,668 336,488 326,463' 322,781 China 105 Mainland 12,325 16,531 10,498 21,165 16,723 22,336 22,410 20,779 18,102 18,808 106 Taiwan 13,603 17,352 17,633 21,422 20,352 24,371 21,733 23,480 19,068' 20,103 107 Hong Kong 27,701 26,462 26,494 23,109 22,307' 24,613 27,275 29,018 30,713' 26,971 108 India 7,367 4,530 3,708 4,133 4,478 4,045 4,980 7,061 7,369 7,234 109 Indonesia 6,567 8,514 12,383 11,441 11,220 11,875 12,623 13,871 13,589 13,805 110 Israel 7,488 8,053 7,870 9,433 9,600 9,541 8,965 8,954 9,757 7,952 111 Japan 159,075 150,415 155,314 151,010' 166,222' 157,689 161,589 179,654 176,445' 174,319 112 Korea (South) 12,988 7,955 9,019 6,500 5,568 5,972 6,592 6,826 7,038 6,845 113 Philippines 3,268 2,316 1,772 1,429 1,530 1,671 1,544 1,754 2,080 1,572 114 Thailand 6,050 3,117 4,743 5,035 5,432 4,940 5,060 5,966 4,591 5,113 115 Middle Eastern oil-exporting countries18 21,314 23,763 20,035 14,938 16,693 15,453 18,128 16,582 15,467' 16,668 116 Other 41,743 36,546 25,027 25,828' 23,803 23,953 21,769 22,543 22,244' 23,391 117 9,468 10,824 11,365 11,722 11,762 11,645 11,664' 11,830 12,103' 12,128 118 Egypt 2,022 2,621 2,778 3,961 3,857 3,606 3,605 3,672 3,411 3,179 119 Morocco 179 139 274 197 127 234 230 307 265 307 120 South Africa 1,495 1,010 839 668 800 636 683 685 724' 777 121 Congo (formerly Zaire) 14 4 4 2 1 6 7 n.a. 1 n.a. 122 Oil-exporting countries19 2,914 4,052 4,377 3,763 3,911 3,828 3,561' 3,522 3,757 3,940 123 Other 2,844 2,998 3,093 3,131 3,066 3,335 3,578 3,644 3,945 3,925 124 Other countries 9,788 11,341 6,253 6,625 8,630 5,732 5,705 6,888 6,392' 7,532 125 Australia 8,377 10,070 5,599 5,811 7,632 4,801 4,706 6,031 5,422' 6,473 126 New Zealand20 n.a. n.a. 242 407 443 533 510 494 613' 644 127 All other 1,411 1,271 412 407 555 398 489 363 357 415 128 Nonmonetary international and regional organizations 15,276 12,543 10,807 15,454' 12,127' 14,441' 12,129 11,568 11,495 10,542 129 International21 12,876 11,270 9,308 13,715' 9,874' 12,262' 10,851 10,490 10,097 9,422 130 Latin American regional22 1,150 740 480 520 731 954 644 342 386 402 131 Other regional23 1,250 533 935 1,140 1,441 1,158 550 645 894 643 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 A49 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 2002 AArreeaa oorr ccoouunnttrryy 11999999 22000000 22000011 Feb. Mar. Apr.' May' June' July' Aug.P 1 Total, all foreigners 793,139 904,642 l,055,169r l,014,828r l,062,040r 1,103,935 1,089,474 1,110,469 1,048,126 1,086,289 2 Foreign countries 788,576 899,956 l,050,223r l,011,001r l,056,527r 1,099,790 1,084,700 1,106,223 1,043,490 1,082,042 3 Europe 311,686 378,115 461,276r 470,718r 490,587' 527,756 511,409 504,174 464,552 483,076 4 Austria 2,643 2,926 5,006 3,903 4,199 3,431 3,558 3,963 4,046 4,597 5 Belgium2 10,193 5,399 6,366r 5,111' 4,849 4,387 4,019 5,197 7,126 4,840 6 Denmark 1,669 3,272 1,105 1,024 1,545 1,122 1,062 1,248 856 1,546 7 Finland 2,020 7,382 10,350 14,410 14,469 13,092 14,279 16,517 13,718 16,230 8 France 29,142 40,035 60,670 54,766r 55,184 58,004 58,207 58,766 59,104 51,798 9 Germany 29,205 36,834 29,902 29,275 33,395 34,281 29,033 28,891 26,156 26,072 10 Greece 806 646 330 385 357 364 354 330 393 438 11 Italy 8,496 7,629 4,205 4,329 5,101 5,036 4,050 4,378 5,568 4,442 12. Luxembourg2 n.a. n.a. 1,267 2,954 3,414 3,453 3,552 3,547 3,526 3,067 13 Netherlands 11,810 17,043 15,927 15,278 15,498 16,892 16,294 16,440 13,679 18,232 14 Norway 1,000 5,012 6,249 4,435 7,026 6,572 8,301 8,526 9,433 10,578 15 Portugal 1,571 1,382 1,603 1,998 1,795 2,083 1,594 1,780 1,995 1,823 16 Russia 713 517 594 612 1,659 951 826 1,145 867 842 17 Spain 3,796 2,603 3.2601 4,987 4,847 3,484 3,130 3,081 3,336 3,589 18 Sweden 3,264 9,226 12,544 13,474 12,008 11,589 13,348 13,814 14,932 14,618 19 Switzerland 79,158 82,085 87,333 114,402 115,388 150,258 137,532 119,244 87,969 106,281 20 Turkey 2,617 3,059 2,124 3,163 3,154 3,012 2,953 2,662 2,410 2,515 21 United Kingdom 115,971 144,938 201,201r 184,126' 196,007' 198,660 198,194 203,627 198,151 202,178 22 Channel Islands and Isle of Man3 n.a. n.a. 4,478 3,955 3,836 3,755 3,835 4,246 4,962 5,076 23 Yugoslavia4 50 50 n.a. n.a. n.a. 2 1 n.a. n.a. n.a. 24 Other Europe and other former U.S.S.R.5 7,562 8,077 6,762 7,465 6,856 7,328 7,287 6,772 6,325 4,314 25 Canada 37,206 39,837 54,421 52,876' 56,897' 57,078 57,451 60,593 63,237 60,310 26 Latin America 74,040 76,561 69,762 68,782' 69,505' 69,524 65,502 66,851 63,194 62,214 27 Argentina 10,894 11,519 10,763 10,334 9,892 9,722 9,235 11,019 8,202 8,090 28 Brazil 16,987 20,567 19,434 19,352 19,837 20,138 18,797 19,019 18,512 17,945 29 Chile 6,607 5,815 5,317 5,166 5,399 5,226 4,950 4,874 4,949 4,960 30 Colombia 4,524 4,370 3,602 3,547 3,711 3,643 3,516 3,266 3,216 3,158 31 Ecuador 760 635 495 491 478 495 519 500 462 479 32 Guatemala 1,135 1,244 1,495 1,651 1,413 1,329 905 882 871 861 33 Mexico 17,899 17,415 16,522 16,561 17,081 17,356 16,448 16,266 16,349 16,015 34 Panama 3,387 2,933 3,061r 2,783' 2,799' 2,764 2,751 2,599 2,466 2,433 35 Peru 2,529 2,807 2,185 2,090 2,048 2,019 1,923 1,833 1,748 1,649 36 Uruguay 801 673 447 444 503 477 357 324 314 527 37 Venezuela 3,494 3,518 3,077 3,315 3,463 3,472 3,353 3,337 3,306 3,291 38 Other Latin America6 5,023 5,065 3,364r 3,048' 2,881' 2,883 2,748 2,932 2,799 2,806 39 Caribbean 281,128 319,403 370,945r 331,468' 348,912' 345,459 360,258 374,459 345,580 367,915 40 Bahamas 99,066 114,090 101,034 87,303 98,079 94,279 107,269 108,369 96,886 95,704 41 Bermuda 8,007 9,260 7,900 5,628 7,770 9,722 8,380 11,088 11,723 11,847 42 British West Indies7 167,189 189,289 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 43 Cayman Islands7 n.a. n.a. 250,376r 228,089' 231,341' 231,683 234,758 243,369 225,681 248,107 44 Cuba 0 0 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 45 Jamaica 295 355 418 384 418 413 408 361 350 353 46 Netherlands Antilles 5,982 5,801 6,729 6,050 7,137 5,390 5,578 6,859 6,387 7,334 47 Trinidad and Tobago 589 608 931 955 971 935 834 862 881 877 48 Other Caribbean6 n.a. n.a. 3,557 3,059' 3,196' 3,037 3,031 3,551 3,672 3,693 49 75,143 77,829 85,882 79,010 82,774' 91,687 83,143 92,344 99,269 100,476 China 50 Mainland 2,110 1,606 2,073 2,418 4,161 6,044 4,857 6,047 7,832 5,904 51 Taiwan 1,390 2,247 4,407 4,128 4,531 3,349 3,261 6,520 6,863 7,443 52 Hong Kong 5,903 6,669 9,995 7,359 6,499 6,457 5,350 5,596 6,606 6,531 53 India 1,738 2,178 1,348 1,217 1,225 1,276 1,414 1,462 1,083 1,293 54 Indonesia 1,776 1,914 1,752 1,644 1,701 1,677 1,564 1,571 1,553 1,457 55 Israel 1,875 2,729 4,396 4,195 2,875 4,413 3,747 3,411 4,647 4,952 56 Japan 28,641 34,974 34,125 30,732 31,333' 37,787 32,937 36,394 35,926 37,559 57 Korea (South) 9,426 7,776 10,622 12,776 13,865' 15,020 13,326 14,856 17,903 18,953 58 Philippines 1,410 1,784 2,587 1,681 2,065 1,718 1,332 1,995 1,857 1,593 59 Thailand 1,515 1,381 2,499 745 1,467 752 716 730 1,160 1,175 60 Middle Eastern oil-exporting countries8 14,267 9,346 7,882 7,341 9,239 9,143 9,555 9,061 8,960 8,975 61 Other 5,092 5,225 4,196 4,774 3,813 4,051 5,084 4,701 4,879 4,641 6? Africa 2,268 2,094 2,095 1,966 2,108 1,967 1,877 2,069 1,914 1,887 63 Egypt 258 201 416 331 358 333 337 418 405 324 64 Morocco 352 204 106 97 88 85 85 79 77 72 65 South Africa 622 309 710 692 786 672 559 649 545 601 66 Congo (formerly Zaire) 24 0 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 67 Oil-exporting countries9 276 471 167 201 211 234 247 232 227 247 68 Other 736 909 696 645 665 643 649 691 660 643 69 Other countries 7,105 6,117 5,842 6,181 5,744 6,319 5,060 5,733 5,744 6,164 70 Australia 6,824 5,868 5,455 5,430 4,972 5,692 4,633 5,272 5,345 5,616 71 New Zealand10 n.a. n.a. 349 732 762 586 406 455 392 541 72 All other 281 249 38 19 10 41 21 6 7 7 73 Nonmonetary international and regional organizations" .. 4,563 4,686 4,946 3,827 5,513 4,147 4,774 4,246 4,636 4,247 1. Reporting banks include all types of depository institutions as well as some brokers and 6. Before January 2001, "Other Latin America" and "Other Caribbean" were reported as dealers. combined "Other Latin America and Caribbean." 2. Before January 2001, combined data reported for Belgium-Luxembourg. 7. Beginning 2001, Cayman Islands replaced British West Indies in the data series. 3. Before January 2001, data included in United Kingdom. 8. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab 4. Since December 1992, has excluded Bosnia, Croatia, and Slovenia. Emirates (Trucial States). 5. Includes the Bank for International Settlements and European Central Bank. Since 9. Comprises Algeria, Gabon, Libya, and Nigeria. December 1992, has included all parts of the former U.S.S.R. (except Russia) and Bosnia, 10. Before January 2001, included in "All other." Croatia, and Slovenia. 11. Excludes the Bank for International Settlements, which is included in "Other Europe." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 International Statistics • December 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 2002 Feb. Mar.' Apr.' May' June' July' Aug.p 1 Total 944,937 1,095,869 1,257,548 1,262,395 1,317,275 2 Banks' claims 793.139 904,642 1,055,169 l,014,828r 1,062,040 1,103,935 1,089,474 1,110,469 1,048,126 1,086,289 3 Foreign public borrowers 35,090 37,907 49,486 50,034 55,562 52,772 49,524 51,042 61,151 61,541 4 Own foreign offices2 529,682 630,137 749,124 720,569r 754,029 787,312 782,182 793,226 719,970 758,165 5 Unaffiliated foreign banks 97,186 95,243 100,367 92,209' 95,127 95,081 89,279 92,444 91,946 86,225 6 Deposits 34,538 23,886 26,189 25,978 26,306 22,778 21,598 24,012 24,449 19,051 7 Other 62,648 71,357 74,178 66,231' 68,821 72,303 67,681 68,432 67,497 67,174 8 All other foreigners 131,181 141,355 156,192 152,016' 157,322 168,770 168,489 173,757 175,059 180,358 9 Claims of banks' domestic customers3 151,798 191,227 202,379 200,355 206,806 10 Deposits 88,006 100,352 92,546 87,634 86,353 11 Negotiable and readily transferable instruments4 51,161 78,147 94,016 98,050 106,740 12 Outstanding collections and other claims 12,631 12,728 15,817 14,671 13,713 MEMO 13 Customer liability on acceptances 4,553 4,257 2,588 2,139 2,353 14 Banks' loans under resale agreements5 n.a. n.a. 137,655 125,625' 117,383 137,154 134,901 152,383 162,975 164,355 15 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States6 31,125 53,153 60,711 55,177 61,417 57,884 48,488 62,161 57,552 52,982 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 2001 2002 MMaattuurriittyy,, bbyy bboorrrroowweerr aanndd aarreeaa22 11999988 11999999 22000000 Sept. Dec. Mar. June 1 Total 250,418 267,082 274,009 298,924 305,020 304,274 311,790 By borrower 2 Maturity of one year or less 186,526 187,894 186,103 178,458 200,097 188,573 202,995 3 Foreign public borrowers 13,671 22,811 21,399 19,994 27,293 26,725 26,490 4 All other foreigners 172,855 165,083 164,704 158,464 172,804 161,848 176,505 5 Maturity of more than one year 63,892 79,188 87,906 120,466 104,923 115,701 108,795 6 Foreign public borrowers 9,839 12,013 15,838 25,844 21,324 26,936 22,690 7 All other foreigners 54,053 67,175 72,068 94,622 83,599 88,765 86,105 By area Maturity of one year or less 8 Europe 68,679 80,842 142,464 70,700 83,090 79,694 82,238 9 Canada 10,968 7,859 8,323 7,897 10,072 7,763 8,060 10 Latin America and Caribbean 81,766 69,498 151,840 75,562 70,648 69,178 78,788 11 Asia 18,007 21,802 43,371 19,381 29,693 24,554 28,389 12 Africa 1,835 1,122 2,263 707 1,104 1,124 918 13 All other3 5,271 6,771 11,717 4,211 5,490 6,260 4,602 Maturity of more than one year 14 Europe 14,923 22,951 57,770 41,597 34,067 39,813 34,877 15 Canada 3,140 3,192 3,174 4,292 3,633 3,362 3,349 16 Latin America and Caribbean 33,442 39,051 82,684 52,651 47,382 48,744 51,291 17 Asia 10,018 11,257 19,536 17,491 15,190 19,444 14,916 18 Africa 1,232 1,065 1,567 798 769 669 856 19 All other3 1,137 1,672 5,954 3,637 3,882 3,669 3,506 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 A51 3.21 CLAIMS ON FOREIGN COUNTRIES Held by US. and Foreign Offices of U.S. Banks1 Billions of dollars, end of period 2000 2001 2002 AArreeaa oorr ccoouunnttrryy 11999988 11999999 June Sept. Dec. Mar. June Sept. Dec. Mar. June 1 Total 1,051.6 945.5 991.0 954.4 1,027.3 1,141.1 1,137.0 l,282.1r 913.0r 798.5r 865.5 2 G-10 countries and Switzerland 217.7 243.4 313.6 280.3 300.7 334.6 336.3 291.8 406.4r 324.6r 348.2 3 Belgium and Luxembourg 10.7 14.3 13.9 13.0 14.2 15.2 13.0 14.3 19.1 16.4 17.0 4 France 18.4 29.0 32.6 29.0 29.6 30.0 35.8 34.4 39.1 33.4 42.3 5 Germany 30.9 38.7 31.5 37.6 45.1 45.0 51.4 40.9 42.9 49.2 52.0 6 Italy 11.5 18.1 20.5 18.6 21.3 20.3 23.6 22.6 20.9 19.0 20.3 7 Netherlands 7.8 12.3 16.0 17.5 18.4 22.1 18.6 20.7 19.3 23.7 20.9 8 Sweden 2.3 3.0 3.5 4.3 3.6 4.7 4.7 5.1 5.3 5.5 6.2 9 Switzerland 8.5 10.3 13.8 10.9 13.2 13.7 13.3 12.8 12.4 13.5 14.0 10 United Kingdom 85.4 79.3 138.2 112.8 115.6 140.2 126.2 93.8 195.2r 111.8r 120.5 11 Canada 16.8 16.3 18.2 18.5 16.7 15.4 21.3 20.3 19.1 16.9r 18.3 12 Japan 25.4 22.1 25.4 18.1 23.0 28.0 28.3 26.8 33.1 35.3 36.7 13 Other industrialized countries 69.0 68.4 75.3 73.7 74.5 75.2 70.0 70.6 70.5r 69.9 78.4 14 Austria 1.4 3.5 2.8 3.5 4.1 3.8 3.6 4.4 4.8 5.1 5.7 IS Denmark 2.2 2.6 1.2 1.8 1.9 3.1 2.7 2.7 2.6 3.5 2.9 16 Finland 1.4 .9 1.2 2.8 1.5 1.4 1.2 1.3 1.1 2.1 1.5 17 Greece 5.9 6.0 6.7 6.4 8.3 4.1 3.6 3.6 3.2 3.3 3.7 18 Norway 3.2 3.3 4.6 8.5 8.3 10.2 7.9 6.2 8.1 9.0 10.6 19 Portugal 1.4 1.0 2.0 1.5 2.0 1.9 1.4 1.4 1.6 1.8 1.8 20 Spain 13.7 12.1 12.2 10.5 10.3 12.4 12.4 13.7 12.1 12.1 13.3 21 Turkey 4.8 4.8 5.6 5.6 5.9 5.0 4.5 4.1 3.9 5.3 4.3 22 Other Western Europe 10.4 6.8 7.9 8.3 6.5 7.1 6.9 7.2 8.3 8.4 9.0 23 South Africa 4.4 3.8 4.6 4.2 3.6 4.1 3.8 4.4 4.1 3.3 3.5 24 Australia 20.3 23.5 26.3 20.5 22.1 21.9 22.1 21.6 20.6 15.9 22.2 25 OPEC2 27.1 31.4 32.1 31.4 28.9 27.9 27.1 27.4 27.3 27.5 26.7 26 Ecuador 1.3 .8 .7 .6 .6 .6 .6 .6 .6 .6 .6 27 Venezuela 3.2 2.8 2.9 2.9 2.5 2.7 2.6 2.6 2.4 2.4 2.2 28 Indonesia 4.7 4.2 4.1 4.4 4.6 4.4 4.2 4.0 3.7 3.6 3.3 29 Middle East countries 17.0 23.1 23.8 22.4 20.3 19.7 19.3 19.9 20.3 20.6 20.2 30 African countries 1.0 .5 .7 1.2 .8 .5 .4 .4 .3 .3 .4 31 Non-OPEC developing countries 143.4 149.4 158.1 149.5 145.5 150.1 157.6 201.6 203.3 195.9 196.0 Latin America 32 Argentina 23.1 23.2 21.6 21.4 21.4 20.9 19.8 19.2 19.2 12.8 12.3 33 Brazil 24.7 27.7 28.3 28.5 28.8 29.4 30.9 30.9 28.0 26.6 24.8 34 Chile 8.3 7.4 8.1 7.3 7.6 7.3 7.0 6.4 7.0 7.1 7.1 35 Colombia 3.2 2.5 2.4 2.4 2.4 2.4 2.4 2.5 2.5 2.4 2.4 36 Mexico 18.9 18.7 20.4 17.5 15.7 16.7 16.3 60.0 68.2 67.1 63.5 37 Peru 2.2 1.7 2.1 2.1 2.0 2.0 2.0 1.9 1.8 1.5 1.5 38 Other 5.4 5.9 6.7 6.2 6.3 8.6 8.3 8.1 8.9 7.9 7.4 Asia China 39 Mainland 3.0 3.6 3.8 3.4 2.9 3.2 6.7 5.9 5.0 7.0 8.6 40 Taiwan 13.3 12.0 12.6 12.8 10.8 11.2 10.7 10.8 12.2 12.6 16.1 41 India 5.5 7.7 8.2 5.8 9.1 6.5 11.8 14.1 6.9 6.3 5.9 42 Israel 1.1 1.8 1.5 1.1 2.7 2.2 2.0 3.2 3.7 2.4 2.4 4.3 Korea (South) 13.7 15.2 21.7 21.4 15.5 19.9 19.3 19.3 18.5 22.4 24.4 44 Malaysia 5.6 6.1 6.8 6.9 7.1 6.5 6.7r 6.1 6.7 6.4 6.3 45 Philippines 5.1 6.2 5.3 4.7 5.1 5.2 5.4 5.2 5.6 5.4 5.3 46 Thailand 4.7 4.1 4.0 3.9 4.0 4.2 4.2 3.9 5.1 4.0 3.5 47 Other Asia 2.9 2.9 1.9 1.7 1.9 1.7 1.8 1.6 1.9 1.9 2.0 Africa 48 Egypt 1.3 1.4 1.3 1.1 1.1 1.2 1.2 1.4 1.2 1.3 1.5 49 Morocco .5 .4 .3 .4 .3 .3 .3 .3 .1 .1 .1 50 Zaire .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa3 1.0 1.0 .9 .8 .7 .7 .7 .8 .7 .7 .8 52 Eastern Europe 5.5 5.2 9.4 9.0 10.1 9.5 9.5 10.2 10.1 10.6 12.8 53 Russia4 2.2 1.6 1.5 1.4 1.0 1.5 1.5 1.6 1.6 2.8 2.8 54 Other 3.3 3.6 7.9 7.6 9.1 8.0 8.0 8.5 8.5 7.9 10.0 55 Offshore banking centers 93.9 59.9 60.6 59.4 76.3 71.4 58.1 73.lr 72.0 56.6 90.6 56 Bahamas 35.4 13.7 8.8 9.3 13.5 7.0 .0 1.1 7.5 7.5 10.9 57 Bermuda 4.6 8.0 6.3 6.3 9.0 7.9 5.7 7.6 7.6 8.1 12.7 58 Cayman islands and other British West Indies 12.8 1.3 5.1 5.9 14.6 13.6 11.9 21.8r 16.4 5.0 27.8 59 Netherlands Antilles 2.6 1.7 2.6 1.9 1.9 2.9 1.7 5.8 2.8 3.3 2.8 60 Panama5 3.9 3.9 3.3 2.5 3.2 3.8 3.4 3.5 3.2 3.3 3.2 61 Lebanon .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 .2 62 Hong Kong, China 23.3 21.0 20.7 20.6 18.7 21.5 22.3 17.9 18.9 15.7 16.5 63 Singapore 11.1 10.1 13.6 12.6 15.2 14.6 12.9 15.2 15.5 13.5 16.6 64 Other .2 .1 .1 .1 .2 .1 .1 .0 .1 .0 .0 65 Miscellaneous and unallocated7 495.1 387.9 342.1 351.1 391.2 472.4 478.6 607.6 123.4 113.4 112.9 1. The banking offices covered by these data include U.S. offices and foreign branches of 2. Organization of Petroleum Exporting Countries, shown individually; other members of U.S. banks, including U.S. banks that are subsidiaries of foreign banks. Offices not covered OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United include U.S. agencies and branches of foreign banks. Beginning March 1994, the data include Arab Emirates), and Bahrain and Oman (not formally members of OPEC). large foreign subsidiaries of U.S. banks. The data also include other types of U.S. depository 3. Excludes Liberia. Beginning March 1994 includes Namibia. institutions as well as some types of brokers and dealers. To eliminate duplication, the data 4. As of December 1992, excludes other republics of the former Soviet Union. are adjusted to exclude the claims on foreign branches held by a U.S. office or another foreign 5. Includes Canal Zone. branch of the same banking institution. 6. Foreign branch claims only. These data are on a gross claims basis and do not necessarily reflect the ultimate country 7. Includes New Zealand, Liberia, and international and regional organizations. risk or exposure of U.S. banks. More complete data on the country risk exposure of U.S. banks are available in the quarterly Country Exposure Lending Survey published by the Federal Financial Institutions Examination Council. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 International Statistics • December 2002 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States Millions of dollars, end of period 2001 2002 TTyyppee ooff lliiaabbiilliittyy,, aanndd aarreeaa oorr ccoouunnttrryy 11999988 11999999 22000000 Mar. June Sept. Dec. Mar. Junep 1 Total 46,570 53,044 73,904 73,655 68,028 53,526 66,718 74,035 70,696 2 Payable in dollars 36,668 37,605 48,931 46,526 41,734 35,347 42,957 46,805 48,620 3 Payable in foreign currencies 9,902 15,415 24,973 27,129 26,294 18,179 23,761 27,230 22,076 By type 4 Financial liabilities 19,255 27,980 47,419 47,808 41,908 27,502 41,034 45,588 42,365 5 Payable in dollars 10,371 13,883 25,246 23,201 17,655 11,415 18,763 20,122 21,892 6 Payable in foreign currencies 8,884 14,097 22,173 24,607 24,253 16,087 22,271 25,466 20,473 7 Commercial liabilities 27,315 25,064 26,485 25,847 26,120 26,024 25,684 28,447 28,331 8 Trade payables 10,978 12,857 14,293 12,481 13,127 11,740 11,820 14,872 14,193 9 Advance receipts and other liabilities 16,337 12,207 12,192 13,366 12,993 14,284 13,864 13,575 14,138 10 Payable in dollars 26,297 23,722 23,685 23,325 24,079 23,932 24,194 26,683 26,728 11 Payable in foreign currencies 1,018 1,318 2,800 2,522 2,041 2,092 1,490 1,764 1,603 By area or country Financial liabilities 12 Europe 12,589 23,241 34,172 37,422 32,785 22,083 31,806 38,697 34,682 13 Belgium and Luxembourg 79 31 147 112 98 76 154 119 120 14 France 1,097 1,659 1,480 1,553 1,222 1,538 2,841 3,531 4,071 15 Germany 2,063 1,974 2,168 2,624 2,463 1,994 2,344 2,802 2,622 16 Netherlands 1,406 1,996 2,016 2,169 1,763 1,998 1,954 1,951 1,939 17 Switzerland 155 147 104 103 93 92 94 84 61 18 United Kingdom 5,980 16,521 26,362 28,812 25,363 14,819 22,852 28,180 23,859 19 Canada 693 284 411 718 628 436 955 942 946 20 Latin America and Caribbean 1,495 892 4,125 3,632 2,100 414 2,858 1,547 1,832 21 Bahamas 7 1 6 18 40 5 157 5 5 22 Bermuda 101 5 1,739 1,837 461 47 960 836 626 23 Brazil 152 126 148 26 21 22 35 35 38 24 British West Indies 957 492 406 1,657 1,508 243 1,627 612 1,000 25 Mexico 59 25 26 31 20 24 36 27 25 26 Venezuela 2 0 2 1 1 3 2 1 5 27 Asia 3,785 3,437 7,965 5,324 5,639 3,869 5,042 4,010 4,491 28 Japan 3,612 3,142 6,216 4,757 3,297 3,442 3,269 3,299 2,387 29 Middle Eastern oil-exporting countries' 0 4 11 15 8 9 10 15 14 30 Africa 28 28 52 38 61 59 53 122 120 31 Oil-exporting countries2 0 0 0 0 0 5 5 91 91 32 All other3 665 98 694 674 695 672 320 270 294 Commercial liabilities 33 Europe 10,030 9,262 9,629 8,792 8,723 8,855 9,230 8,372 8,735 34 Belgium and Luxembourg 278 140 293 251 297 160 99 105 96 35 France 920 672 979 689 665 892 735 701 860 36 Germany 1,392 1,131 1,047 982 1,017 966 908 584 551 37 Netherlands 429 507 300 349 343 343 1,163 463 692 38 Switzerland 499 626 502 623 697 683 790 637 776 39 United Kingdom 3,697 3,071 2,847 2,542 2,706 2,296 2,280 2,747 2,754 40 Canada 1,390 1,775 1,933 1,625 1,957 1,569 1,633 1,798 2,043 41 Latin America and Caribbean 1,618 2,310 2,381 2,166 2,293 2,879 2,729 3,454 2,727 42 Bahamas 14 22 31 5 31 44 52 23 12 43 Bermuda 198 152 281 280 367 570 591 433 403 44 Brazil 152 145 114 239 279 312 290 277 320 45 British West Indies 10 48 76 64 21 28 45 67 46 46 Mexico 347 887 841 792 762 884 901 1,457 959 47 Venezuela 202 305 284 243 218 242 166 281 205 48 Asia 12,342 9,886 10,983 11,542 11,384 11,114 10,532 12,969 12,951 49 Japan 3,827 2,609 2,757 2,431 2,377 2,421 2,592 4,281 4,301 50 Middle Eastern oil-exporting countries' 2,852 2,551 2,832 3,359 3,087 3,053 2,642 3,142 3,204 51 Africa 794 950 948 1,072 1,115 938 836 976 951 52 Oil-exporting countries2 393 499 483 566 539 471 436 454 409 53 Other3 1,141 881 614 650 648 669 724 878 924 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 A53 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States Millions of dollars, end of period 2001 2002 TTyyppee ooff ccllaaiimm,, aanndd aarreeaa oorr ccoouunnttrryy 11999988 11999999 22000000 Mar. June Sept. Dec. Mar. Junep 1 Total 77,462 76,669 90,157 107,705 97,470 94,076 113,155 102,058 102,592 7 Payable in dollars 72,171 69,170 79,558 94,932 87,690 83,292 103,937 92,486 93,550 3 Payable in foreign currencies 5,291 7,472 10,599 12,773 9,780 10,784 9,218 9,572 9,042 By type 4 Financial claims 46,260 40,231 53,031 74,255 61,891 60,015 81.287 71,696 7733,,662233 Deposits 30,199 18,566 23,374 25.419 25,381 22,391 29,801 28,128 28,312 6 Payable in dollars 28,549 16,373 21,015 23,244 23,174 19.888 27,850 26,317 26,499 7 Payable in foreign currencies 1,650 2,193 2,359 2,175 2,207 2,503 1,951 1,811 1,813 8 Other financial claims 16,061 21,665 29,657 48,836 36,510 37,624 51,486 43,568 45,311 9 Payable in dollars 14,049 18,593 25,142 41,417 32,038 32,076 46,621 39,553 41,998 10 Payable in foreign currencies 2,012 3,072 4,515 7,419 4,472 5,548 4,865 4,015 3,313 11 Commercial claims 31,202 36,438 37,126 33,450 35,579 34,061 31,868 30,362 28,969 17 Trade receivables 27,202 32,629 33,104 28,958 30,631 29.328 27,586 25,597 24,395 13 Advance payments and other claims 4,000 3,809 4,022 4,492 4,948 4.733 4,282 4,765 4,574 14 Payable in dollars 29,573 34,204 33,401 30,271 32.478 31.328 29,466 26,616 25,053 15 Payable in foreign currencies 1,629 2,207 3,725 3,179 3,101 2,733 2,402 3,746 3,916 By area or country Financial claims 16 Europe 12,294 13,023 23,136 31,855 23,975 23,069 26,118 23,671 23,656 17 Belgium and Luxembourg 661 529 296 430 262 372 625 751 797 18 France 864 967 1,206 3,142 1,376 1,682 1,450 1,801 2,312 19 Germany 304 504 848 1,401 1,163 1,112 1,068 941 1,302 20 Netherlands 875 1,229 1,396 2,313 1.072 954 2,138 1,820 1,847 21 Switzerland 414 643 699 613 653 665 589 308 295 22 United Kingdom 7,766 7,561 15,900 20,938 15,913 15,670 16,510 14,023 11,684 23 Canada 2,503 2,553 4,576 4,847 4,787 4,254 6,193 5,291 5,248 24 Latin America and Caribbean 27,714 18,206 19,317 28,791 24,403 26,099 41,201 35,001 37,511 75 Bahamas 403 1,593 1.353 561 818 649 976 1,197 1,332 26 Bermuda 39 11 19 1,729 426 80 918 611 704 27 Brazil 835 1,476 1,827 1,648 1,877 2,065 2,127 1,892 2.036 78 British West Indies 24,388 12,099 12,596 21,227 17,505 19,234 32,965 27,350 29,591 29 Mexico 1,245 1,798 2,448 2,461 2,633 2,910 3,075 2,777 2,823 30 Venezuela 55 48 87 38 66 80 83 79 60 31 Asia 3,027 5,457 4,697 7,215 6,829 5,274 6,430 6,489 5,826 32 Japan 1,194 3,262 1,631 3,867 1,698 1,761 1,604 2,009 1,093 33 Middle Eastern oil-exporting countries' 9 23 80 86 76 100 135 79 78 .34 Africa 159 286 411 430 476 456 414 390 431 35 Oil-exporting countries2 16 15 57 42 35 83 49 51 64 36 All other' 563 706 894 1,117 1,421 891 931 854 951 Commercial claims 37 Europe 13,246 16,389 15,938 13,775 14,469 14,381 14,036 12,708 11,897 38 Belgium and Luxembourg 238 316 452 395 403 354 268 272 210 39 France 2,171 2,236 3,095 3,479 3,190 3.062 2,922 2,883 2,827 40 Germany 1,822 1,960 1,982 1,586 1,993 1,977 1,662 1,198 1,163 41 Netherlands 467 1,429 1,729 757 863 844 529 415 381 42 Switzerland 483 610 763 634 473 514 611 436 472 43 United Kingdom 4,769 5,827 4,502 3,562 3,724 3,571 3,839 3,579 3,395 44 Canada 2,617 2,757 3,502 3.392 3,470 3,116 2,855 2,760 2,755 45 Latin America and Caribbean 6,296 5,959 5,851 5.144 6,033 5,590 4,874 4,891 4,659 46 Bahamas 24 20 37 20 39 35 42 42 28 47 Bermuda 536 390 376 407 650 526 369 422 215 48 Brazil 1,024 905 957 975 1,363 1,183 958 837 840 49 British West Indies 104 181 137 130 135 124 95 73 26 50 Mexico 1,545 1,678 1,507 1,350 1,375 1,442 1,401 1,225 1,295 51 Venezuela 401 439 328 292 321 301 288 312 317 52 Asia 7,192 9,165 9,630 8,985 9,499 8,704 7,855 7,513 7,287 53 Japan 1,681 2,074 2,796 2,560 3,148 2,438 2,007 1,975 2,055 54 Middle Eastern oil-exporting countries' 1,135 1,625 1,024 966 1,040 919 851 657 886 55 Africa 711 631 672 773 601 838 645 630 611 56 Oil-exporting countries2 165 171 180 165 102 170 88 109 94 57 Other3 1,140 1,537 1,572 1,381 1,507 1,432 1,603 1,860 1,760 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

A54 International Statistics • December 2002 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 2002 2002 TTrraannssaaccttiioonn,, aanndd aarreeaa oorr ccoouunnttrryy 22000000 22000011 Jan.- Aug. Feb. Mar. Apr.' May' June' July' Aug." U.S. corporate securities STOCKS 1 Foreign purchases 3,605,196 3,051,332' 2,172,916 259,946 286,549' 272,125 274,543 248,562 318,210 257,264 2 Foreign sales 3,430,306 2,934,942' 2,129,520 257,845 279,632' 264,298 274,889 244,549 308,555 252,651 3 Net purchases, or sales (-) 174,890 116,390' 43,396 2,101 6,917 7,827 -346 4,013 9,655 4,613 4 Foreign countries 174,903 116,187' 43,464 2,104 6,932 7,834 -324 3,997 9,582 4,602 5 Europe 164,656 88,099' 26,407 4,442 6,810 2,591 -2,548 -653 3,205 3,830 6 France 5,727 5,914 1,674 304 405 1,202 -1,270 -1,249 38 942 7 Germany 31,752 8,415 194 429 332 56 -48 -131 -595 -328 8 Netherlands 4,915 10,919 2,452 100 192 -663 41 36 1,440 900 y Switzerland 11,960 3,456 1,151 566 569 814 89 -710 -341 -306 10 United Kingdom 58,736 38,493' 11,999 1,323 3,110 -324 -1,829 1,117 1,829 2,801 11 Channel Islands and Isle of Man' n.a. -698 -339 -103 -113 -63 -3 -2 73 -47 12 Canada 5,956 10,984 7,102 457 598 1,262 546 373 1,939 1,336 13 Latin America and Caribbean -17,812 -5,154' -10,195 -4,495 302 1,989 -703 -673 -1,318 -3,850 14 Middle East2 9,189 1,789 -1,090 -165 -901 -273 -30 198 43 -58 lb Other Asia 12,494 20,726' 18,818 1,634 245 2,143 2,253 3,986 4,755 3,231 16 Japan 2,070 6,788 14,449 194 1,002 1,244 3,116 3,193 3,660 2,249 17 415 -366 -53 5 -26 -41 9 -1 3 -34 18 Other countries 5 109 2,475 226 -96 163 149 767 955 147 19 Nonmonetary international and regional organizations -11 203 -67 -2 -15 -7 -22 16 73 11 BONDS3 20 Foreign purchases 1,208,386 1,942,690' 1,654,252 168,724 219,825' 217,286 219,553 204,684 221,223 221,413 21 Foreign sales 871,416 1,556,745' 1,407,347 155,237 173,729' 175,072 174,562 171,729 205,574 189,475 22 Net purchases, or sales (-) 336,970 385,945' 246,905 13,487 46,096' 42,214 44,991 32,955 15,649 31,938 23 Foreign countries 337,074 385,380' 247,190 13,217 46,275' 42,229 45,121 32,806 15,970 31,907 24 Europe 180,917 195,412' 108,013 4,619 21,125' 20,875 19,149 20,019 3,152 10,927 25 France 2,216 5,028 2,531 14 578 380 350 462 192 487 26 Germany 4,067 12,362 3,633 -253 1,545 385 132 681 680 370 21 Netherlands 1,130 1,538 -505 550 -173 732 -49 -518 393 55 28 Switzerland 3,973 5,721 6,866 826 -102 247 1,412 1,109 1,406 1,825 29 United Kingdom 141,223 152,772' 73,256 1,740 16,381' 15,540 15,309 13,022 -330 3,718 30 Channel Islands and Isle of Man1 n.a. 2,000 1,734 14 309 20 92 -14 -20 1,203 31 Canada 13,287 4,595 1,633 -243 869 385 -193 923 -611 165 32 Latin America and Caribbean 59,444 77,019' 62,241 6,077 13,133' 8,487 15,618 2,936 1,840 9,707 33 Middle East1 2,076 2,338 1,703 342 377 9 -172 24 125 578 34 Other Asia 78,794 106,400' 70,142 2,094 10,321 12,438 10,608 8,521 10,336 9,026 35 Japan 39,356 33,687' 21,430 -957 -466 8,509 5,046 3,290 4,754 1,975 36 Africa 938 760 653 22 34 95 13 330 112 77 37 Other countries 1,618 -1,144 2,805 306 416 -60 98 53 1,016 1,427 38 Nonmonetary international and regional organizations -70 566 -285 270 -179 -15 -130 149 -321 31 Foreign securities 39 Stocks, net purchases, or sales (-) -13,088 -50,113 6,465 -2,723 5,503' -3,561 -7,927 —4,983 13,285 3,049 40 Foreign purchases 1,802,185 1,397,664 887,683 95,364 116,435' 114,999 113,418 111,699 139,500 92,879 41 Foreign sales 1,815,273 1,447,777 881,218 98,087 110,932' 118,560 121,345 116,682 126,215 89,830 42 Bonds, net purchases, or sales (-) -4,054 30,423 23,206 2,245 7,333 461 6,871 5,730 7,707 -1,583 43 Foreign purchases 958,932 1,159,185 865,865 89,172 109,465 99,383 124,357 118,365 120,212 111,361 44 Foreign sales 962,986 1,128,762 842,659 86,927 102,132 98,922 117,486 112,635 112,505 112,944 45 Net purchases, or sales (-), of stocks and bonds -17,142 -19,690 29,671 -478 12,836' -3,100 -1,056 747 20,992 1,466 46 Foreign countries -17,278 -19,102 29,739 -467 12,931' -3,204 -1,105 781 21,082 1,441 47 Europe -25,386 -12,117 14,964 588 13,620' -4,805 647 -4,639 11,407 563 48 Canada -3,888 2,943 6,115 -289 -764 1,565 56 2,240 1,918 8 49 Latin America and Caribbean -15,688 4,245 3,847 -1,469 1,353 -1,106 -1,699 2,785 1,939 -600 50 Asia 24,488 -11,869 5,148 614 -949 2,220 381 342 4,990 1,028 51 Japan 20,970 -20,116 392 -660 -2,789 998 -518 -871 3,453 379 52 Africa 943 -557 -591 62 -72 -1,141 -118 8 205 393 53 Other countries 2,253 -1,747 258 29 -257 63 -372 45 623 49 54 Nonmonetary international and regional organizations 150 -587 -70 -13 -95 104 49 -34 -90 25 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 A55 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions1 Millions of dollars; net purchases, or sales (-) during period 2002 2002 AArreeaa oorr ccoouunnttrryy 22000000 22000011 Jan- Feb. Mar.' Apr.' May' June' July' Aug." Aug. 1 Total estimated -54,032 18,514' 22,391 3,107r 15,518 -12,528 -539 10,896 21,023 1,120 2 Foreign countries -53,571 19,200' 21,399 2,783r 15,369 -12,838 -39 10,773 21,117 705 3 Europe -50,704 -20,604r -10,588 377r 8,194 -8,844 -6,274 -371 4,533 -1,811 4 Belgium2 73 -598 1,875 -263 410 -71 8 292 274 1,333 5 Germany -7,304 -1,668 -7,008 -277 1,759 -115 649 -587 -2,930 -2,041 6 Luxembourg2 n.a. 462 -1,065 -126 79 -325 -166 85 -84 -14 7 Netherlands 2,140 -6,728 -21,579 812 -3,891 -3,295 -9,328 -2,487 147 -1,439 Sweden 1,082 -1,190 354 -230 269 103 55 192 -169 471 9 Switzerland -10,326 1,412 150 -115 973 -1,262 341 359 246 -705 10 United Kingdom -33,669 -1,219' 19,632 2,394r 8,236 -5,996 2,312 1,820 10,278 378 11 Channel Islands and Isle of Man3 n.a. -179 1,256 47 -251 -35 84 793 177 444 17. Other Europe and former U.S.S.R -2,700 -4,836 -4,203 -1,865 610 2,152 -229 -838 -3,406 -238 13 Canada -550 -l,634r -6,521 1,204 1,753 -1,223 454 -1,634 -2,011 -1,671 14 Latin America and Caribbean -4,914 4,272r 5,643 -2,954' ^t60 -1,500 7,939 6,382 4,602 -11,831 15 Venezuela 1,288 290 89 -12 -7 -18 6 160 -58 -15 16 Other Latin America and Caribbean -11,581 14,726' 11,082 168r 8,802 -1,918 1,933 3,298 3,736 -7,434 17 Netherlands Antilles 5,379 -10,744 -5,528 -3,110 -9,255 436 6,000 2,924 924 -4,382 18 Asia 1,639 36,332' 29,714 3,442' 6,107 -1,543 -2,826 5,838 12,931 15,668 19 Japan 10,580 16,114r 12,742 2,036r -1,855 3,019 195 2,454 7,651 6,573 20 Africa -114 -880 831 134 70 -176 -38 299 112 495 21 Other 1,372 1,714' 2,320 580 -295 448 706 259 950 -145 22 Nonmonetary international and regional organizations -461 -686 992 324 149 310 -500 123 -94 415 23 International -483 -290 880 52 199 398 -240 -21 -64 418 24 Latin American Caribbean regional 76 41 -17 15 -5 -41 -14 28 11 -4 MEMO 25 Foreign countries -53,571 19,200r 21,399 2,783' 15,369 -12,838 -39 10,773 21,117 705 26 Official institutions -6,302 3,474 -3,936 -2,177 5,233 -1,451 -69 2,161 -5,268 635 27 Other foreign ^17,269 15,726' 25,335 4,960' 10,136 -11,387 30 8,612 26,385 70 Oil-exporting countries 2X Middle East 3,483 865 -997 50 137 1,382 -753 -249 -1,338 -1,010 29 Africa5 0 -2 -26 -1 2 -25 0 0 0 -2 1. Official and private transactions in marketable US. 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

A56 International Statistics • December 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 2002 May June July Aug. Sept. Oct. Exchange rates COUNTRY/CURRENCY UNIT 1 Australia/dollar2 64.54 58.15 51.69 54.98 56.82 55.38 54.13 54.65 55.02 2 Brazil/real 1.8207 1.8301 2.3527 2.4753 2.7144 2.9414 3.1082 3.3548 3.7966 3 Canada/dollar 1.4858 1.4855 1.5487 1.5502 1.5318 1.5456 1.5694 1.5761 1.5780 4 China, P.R./yuan 8.2783 8.2784 8.2770 8.2770 8.2767 8.2768 8.2767 8.2760 8.2772 5 Denmark/krone 6.9900 8.0953 8.3323 8.1098 7.7775 7.4807 7.5948 7.5752 7.5732 6 European Monetary Union/euro3 1.0653 0.9232 0.8952 0.9170 0.9561 0.9935 0.9781 0.9806 0.9812 7 Greece/drachma 306.30 365.92 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 8 Hong Kong/dollar 7.7594 7.7924 7.7997 7.7994 7.8000 7.8000 7.8008 7.7999 7.7995 9 India/rupee 43.13 45.00 47.22 49.02 48.98 48.79 48.62 48.46 48.39 10 Japan/yen 113.73 107.80 121.57 126.38 123.29 117.90 118.99 121.08 123.91 11 Malaysia/ringgit 3.8000 3.8000 3.8000 3.8000 3.8000 3.8000 3.8000 3.8000 3.8000 12 Mexico/peso 9.553 9.459 9.337 9.510 9.767 9.779 9.839 10.071 10.094 13 New Zealand/dollar2 52.94 45.68 42.02 46.10 48.86 48.09 46.35 47.02 48.18 14 Norway/krone 7.8071 8.8131 8.9964 8.2050 7.7533 7.4694 7.6042 7.5018 7.4873 15 Singapore/dollar 1.6951 1.7250 1.7930 1.8004 1.7831 1.7524 1.7553 1.7682 1.7843 16 South Africa/rand 6.1191 6.9468 8.6093 10.1615 10.1841 10.1032 10.5878 10.5967 10.3058 17 South Korea/won 1,189.84 1,130.90 1,292.01 1,262.20 1,219.70 1,179.99 1,197.51 1,211.61 1,240.19 18 Sri Lanka/rupee 70.868 76.964 89.602 96.318 96.408 96.266 96.281 96.207 96.402 19 Sweden/krona 8.2740 9.1735 10.3425 10.0642 9.5376 9.3474 9.4610 9.3400 9.2846 20 Switzerland/franc 1.5045 1.6904 1.6891 1.5889 1.5399 1.4718 1.4972 1.4931 1.4932 21 Taiwan/dollar 32.322 31.260 33.824 34.454 33.889 33.272 33.884 34.573 34.947 21 Thailand/baht 37.887 40.210 44.532 42.817 42.160 41.257 42.193 42.893 43.641 23 United Kingdom/pound2 161.72 151.56 143.96 145.98 148.37 155.65 153.68 155.63 155.75 24 Venezuela/bolivar 606.82 680.52 724.10 985.80 1,212.07 1,317.38 1,379.73 1,458.39 1,440.50 Indexes4 NOMINAL 25 Broad (January 1997-100)5 116.87 119.67 126.09 127.35 125.96 124.20 125.64 126.67 127.69 26 Major currencies (March 1973=100)® 94.07 98.32 104.32 104.09 101.42 98.97 100.35 100.68 101.24 27 Other important trading partners (January 1997-100)7 129.94 130.33 136.34 139.71 140.70 140.47 141.69 143.71 145.28 REAL 28 Broad (March 1973-100)5 100.78 104.32 110.42 111.16' 109.91' 108.38' 109.73' 110.51' 111.25 29 Major currencies (March 1973=100)6 97.06 103.17 110.73 110.63' 107.80' 105.27' KftW 107.2C 108.19 30 Other important trading partners (March 1973=100)7 114.26 114.53 119.21 121.10' 121.86' 121.57' 122.78' 124.16' 124.60 1. Averages of certified noon buying rates in New York for cable transfers. Data in this 4. Starting with the February 2002 Bulletin, revised index values resulting from the table also appear in the Board's G.5 (405) monthly statistical release. For ordering address, periodic revision of data that underlie the calculated trade weights are reported. For more see inside front cover. information on the indexes of the foreign exchange value of the dollar, see Federal Reserve 2. U.S. cents per currency unit. Bulletin, vol. 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 1,936.27 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

A57 Guide to Special Tables and Statistical Releases SPECIAL TABLES—Data Published Irregularly, with Latest Bulletin Reference Title and Date Issue Page Assets and liabilities of commercial banks September 30, 2001 February 2002 A64 December 31, 2001 May 2002 A64 March 31, 2002 August 2002 A58 June 30, 2002 November 2002 A58 Terms of lending at commercial banks November 2001 February 2002 A66 February 2002 May 2002 A66 May 2002 August 2002 A60 August 2002 November 2002 A60 Assets and liabilities of U.S. branches and agencies of foreign banks September 30,2001 March 2002 A65 December 31,2001 May 2002 A72 March 31,2002 August 2002 A66 June 30, 2002 November 2002 A66 Pro forma financial statements for Federal Reserve priced services* 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 2000 September 2001 A64 2001 September 2002 A58 Disposition of applications for private mortgage insurance 2000 September 2001 A73 2001 September 2002 A69 Small loans to businesses and farms 2000 September 2001 A76 2001 September 2002 A70 Community development lending reported under the Community Reinvestment Act 2000 September 2001 A79 2001 September 2002 A58 STATISTICAL RELEASES—A List of Statistical Releases Published by the Federal Reserve is Printed Semiannually in the Bulletin Issue Page Schedule of anticipated release dates for periodic releases December 2002 A66 NOTE. The pro forma financial statements for Federal Reserve priced services were discontinued in the Bulletin after the January 2002 issue. Year-end figures for 2001 are available in the Board's 88th Annual Report, 2001 (http://www.federalreserve.gov/boarddocs/rptcongress). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

104 Federal Reserve Bulletin • December 2002 Index to Statistical Tables References are to pages A3-A56, although the prefix "A" is omitted in this index. ACCEPTANCES, bankers (See Bankers acceptances) Federal Reserve Banks Assets and liabilities (See also Foreigners) Condition statement, 10 Commercial banks, 15-21 Discount rates (See Interest rates) Domestic finance companies, 30, 31 U.S. government securities held, 5, 10, 11, 25 Federal Reserve Banks, 10 Federal Reserve credit, 5, 6, 10, 12 Foreign-related institutions, 20 Federal Reserve notes, 10 Automobiles Federally sponsored credit agencies, 28 Consumer credit, 34 Finance companies Production, 42, 43 Assets and liabilities, 30 Business credit, 31 BANKERS acceptances, 5, 10 Loans, 34 Bankers balances, 15-21 (See also Foreigners) Paper, 22, 23 Bonds (See also U.S. government securities) Float, 5 New issues, 29 Flow of funds, 35-39 Rates, 23 Foreign currency operations, 10 Business loans (See Commercial and industrial loans) Foreign deposits in U.S. banks, 5 Foreign exchange rates, 56 Foreign-related institutions, 20 CAPACITY utilization, 40, 41 Foreigners Capital accounts Claims on, 46, 49-51, 53 Commercial banks, 15-21 Liabilities to, 45-48, 52, 54, 55 Federal Reserve Banks, 10 Certificates of deposit, 23 Commercial and industrial loans GOLD Commercial banks, 15-21 Certificate account, 10 Weekly reporting banks, 17, 18 Stock, 5, 45 Commercial banks Government National Mortgage Association, 28, 32, 33 Assets and liabilities, 15-21 Commercial and industrial loans, 15-21 Consumer loans held, by type and terms, 34 INDUSTRIAL production, 42, 43 Real estate mortgages held, by holder and property, 33 Insurance companies, 25, 33 Time and savings deposits, 4 Interest rates Commercial paper, 22, 23, 30 Bonds, 23 Condition statements (See Assets and liabilities) Consumer credit, 34 Consumer credit, 34 Federal Reserve Banks, 7 Corporations Money and capital markets, 23 Security issues, 29, 55 Mortgages, 32 Credit unions, 34 Prime rate, 22 Currency in circulation, 5, 13 International capital transactions of United States, 44—55 Customer credit, stock market, 24 International organizations, 46, 47, 49, 52, 53 Investment companies, issues and assets, 30 Investments (See also specific types) DEBT (See specific types of debt or securities) Commercial banks, 4, 15-21 Demand deposits, 15-21 Federal Reserve Banks, 10, 11 Depository institutions Financial institutions, 33 Reserve requirements, 8 Reserves and related items, 4-6, 12 Deposits (See also specific types) LIFE insurance companies (See Insurance companies) Commercial banks, 4, 15-21 Loans (See also specific types) Federal Reserve Banks, 5, 10 Commercial banks, 15-21 Discount rates at Reserve Banks and at foreign central banks and Federal Reserve Banks, 5-7, 10, 11 foreign countries (See Interest rates) Financial institutions, 33 Discounts and advances by Reserve Banks (See Loans) Insured or guaranteed by United States, 32, 33 EURO, 56 MANUFACTURING Capacity utilization, 40, 41 FARM mortgage loans, 33 Production, 42, 43 Federal agency obligations, 5, 9-11, 26, 27 Margin requirements, 24 Federal credit agencies, 28 Member banks, reserve requirements, 8 Federal finance Mining production, 43 Debt subject to statutory limitation, and types and ownership of Monetary and credit aggregates, 4, 12 gross debt, 25 Money and capital market rates, 23 Federal Financing Bank, 28 Money stock measures and components, 4, 13 Federal funds, 23 Mortgages (See Real estate loans) Federal Home Loan Banks, 28 Mutual funds, 13, 30 Federal Home Loan Mortgage Corporation, 28, 32, 33 Federal Housing Administration, 28, 32, 33 Mutual savings banks (See Thrift institutions) Federal Land Banks, 33 Federal National Mortgage Association, 28, 32, 33 OPEN market transactions, 9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A59 PRICES Stock market, selected statistics, 24 Stock market, 24 Stocks (See also Securities) Prime rate, 22 New issues, 29 Production, 42, 43 Prices, 24 Student Loan Marketing Association, 28 REAL estate loans Banks, 15-21, 33 THRIFT institutions, 4 (See also Credit unions and Savings Terms, yields, and activity, 32 institutions) Type and holder and property mortgaged, 33 Time and savings deposits, 4, 13, 15-21 Reserve requirements, 8 Treasury cash, Treasury currency, 5 Reserves Treasury deposits, 5, 10 Commercial banks, 15-21 Depository institutions, 4—6 U.S. GOVERNMENT balances Federal Reserve Banks, 10 Commercial bank holdings, 15-21 U.S. reserve assets, 45 Treasury deposits at Reserve Banks, 5, 10 Residential mortgage loans, 32, 33 U.S. government securities Retail credit and retail sales, 34 Bank holdings, 15-21, 25 Dealer transactions, positions, and financing, 27 SAVING Federal Reserve Bank holdings, 5, 10, 11, 25 Flow of funds, 33, 34, 35-39 Foreign and international holdings and transactions, 10, 25, 55 Savings deposits (See Time and savings deposits) Open market transactions, 9 Savings institutions, 33, 34, 35-39 Outstanding, by type and holder, 25, 26 Securities (See also specific types) Rates, 23 Federal and federally sponsored credit agencies, 28 U.S. international transactions, 44-55 Foreign transactions, 54 Utilities, production, 43 New issues, 29 Prices, 24 Special drawing rights, 5, 10, 44, 45 VETERANS Affairs, Department of, 32, 33 State and local governments Holdings of U.S. government securities, 25 WEEKLY reporting banks, 17, 18 New security issues, 29 Rates on securities, 23 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

A61 MARK W. OLSON DONALD L. KOHN BEN S. BERNANKE 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 BILLY J. SAULS, Assistant Director DONALD A. SPICER, Assistant Director DIVISION OF INFORMATION TECHNOLOGY 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 RAYMOND ROMERO, Assistant Director ROBERT F. TAYLOR, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

108 Federal Reserve Bulletin • December 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 BEN S. BERNANKE DONALD L. KOHN ANTHONY M.SANTOMERO ROGER W. FERGUSON, JR. ROBERT D. MCTEER, JR. GARY H. STERN EDWARD M. GRAMLICH ALTERNATE MEMBERS J. ALFRED BROADDUS, JR. MICHAEL H. MOSKOW JAMIE B. STEWART, JR. JACK GUYNN ROBERT T. PARRY STAFF VINCENT R. REINHART, Secretary and Economist CHRISTINE M. CUMMING, Associate Economist NORMAND R.V. BERNARD, Deputy Secretary DAVID H. HOWARD, Associate Economist GARY P. GILLUM, Assistant Secretary DAVID E. LINDSEY, Associate Economist MICHELLE A. SMITH, Assistant Secretary LORETTA J. MESTER, Associate Economist J. VIRGIL MATTINGLY, JR., General Counsel STEPHEN D. OLINER, Associate Economist THOMAS C. BAXTER, JR., Deputy General Counsel ARTHUR J. ROLNICK, Associate Economist KAREN H. JOHNSON, Economist HARVEY ROSENBLUM, Associate Economist DAVID J. STOCKTON, Economist MARK S. SNIDERMAN, Associate Economist THOMAS A. CONNORS, Associate Economist DAVID W. WILCOX, Associate Economist DINO KOS, Manager, System Open Market Account FEDERAL ADVISORY COUNCIL DAVID A. DABERKO, President L. M. BAKER, JR., Vice President 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 MICHAEL E. O'NEILL, Twelfth District JAMES ANNABLE, Co-Secretary WILLIAM J. KORSVIK, Co-Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A63 CONSUMER ADVISORY COUNCIL DOROTHY BROADMAN, Falls Church, Virginia, Chairman RONALD A. REITER, San Francisco, California, Vice Chairman ANTHONY S. ABBATE, Saddlebrook, New Jersey PATRICK LIDDY, Cincinnati, Ohio JANIE BARRERA, San Antonio, Texas RUHI MAKER, Rochester, New York KENNETH BORDELON, Baton Rouge, Louisiana OSCAR MARQUIS, Park Ridge, Illinois TERESA A. BRYCE, St. Louis, Missouri PATRICIA MCCOY, Cambridge, Massachusetts MANUEL CASANOVA, JR., Brownsville, Texas JEREMY NOWAK, Philadelphia, Pennsylvania CONSTANCE K. CHAMBERLIN, Richmond, Virginia ELIZABETH RENUART, Boston, Massachusetts ROBERT M. CHEADLE, Ada, Oklahoma DEBRA REYES, Tampa, Florida ROBIN COFFEY, Chicago, Illinois BENSON ROBERTS, Washington, District of Columbia LESTER WM. FIRSTENBERGER, Pittsfield, New Hampshire AGNES BUNDY SCANLAN, Boston, Massachusetts THOMAS FITZGIBBON, Chicago, Illinois RUSSELL W. SCHRADER, San Francisco, California LARRY HAWKINS, Houston, Texas FRANK TORRES, III, Washington, District of Columbia EARL JAROLIMEK, Fargo, North Dakota HUBERT VAN TOL, Sparta, Wisconsin THRIFT INSTITUTIONS ADVISORY COUNCIL MARK H. WRIGHT, San Antonio, Texas, President KAREN L. MCCORMICK, Port Angeles, Washington, Vice President JOHN B. DICUS, Topeka, Kansas HERBERT M. SANDLER, Oakland, California RONALD S. ELIASON, Provo, Utah 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 KEVIN E. PIETRINI, Virginia, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

110 Federal Reserve Bulletin • December 2002 Federal Reserve Board Publications For ordering assistance, write PUBLICATIONS, MS-127, Board Rates for subscribers outside the United States are as follows of Governors of the Federal Reserve System, Washington, DC and include additional air mail costs: 20551, or telephone (202) 452-3244, or FAX (202) 728-5886. You Federal Reserve Regulatory Service, $250.00 per year. may also use the publications order form available on the Board's Each Handbook, $90.00 per year. World Wide Web site (http://www.federalreserve.gov). When a FEDERAL RESERVE REGULATORY SERVICE FOR PERSONAL charge is indicated, payment should accompany request and be COMPUTERS. CD-ROM; updated monthly. made payable to the Board of Governors of the Federal Reserve Standalone PC. $300 per year. System or may be ordered via Mastercard, Visa, or American Network, maximum 1 concurrent user. $300 per year. Express. Payment from foreign residents should be drawn on a Network, maximum 10 concurrent users. $750 per year. 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, 2001. 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 1996-2000 March 2002 352 pp. $25.00 Businesses Series on the Structure of the Federal Reserve System The Board of Governors of the Federal Reserve System SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES OF The Federal Open Market Committee CHARTS. Weekly. $30.00 per year or $.70 each in the United Federal Reserve Bank Board of Directors States, its possessions, Canada, and Mexico. Elsewhere, Federal Reserve Banks $35.00 per year or $.80 each. A Consumer's Guide to Mortgage Lock-Ins REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL A Consumer's Guide to Mortgage Settlement Costs RESERVE SYSTEM. A Consumer's Guide to Mortgage Refinancings ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— Home Mortgages: Understanding the Process and Your Right Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. to Fair Lending Vol. II (Irregular Transactions). 1969. 116 pp. Each volume How to File a Consumer Complaint about a Bank (also available $5.00. in Spanish) GUIDE TO THE FLOW OF FUNDS ACCOUNTS. January 2000. In Plain English: Making Sense of the Federal Reserve 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. Privacy Choices for Your Personal Financial Information The Payment System Handbook. $75.00 per year. When Is Your Check Not a Check? 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

A65 STAFF STUDIES: Only Summaries Printed in the 167. A SUMMARY OF MERGER PERFORMANCE STUDIES IN BANK- BULLETIN ING, 1980-93, AND AN ASSESSMENT OF THE "OPERATING Studies and papers on economic and financial subjects that are of PERFORMANCE" AND "EVENT STUDY" METHODOLOGIES, by Stephen A. Rhoades. July 1994. 37 pp. general interest. Staff Studies 1-158, 161, 163, 165, 166, 168, and 169 are out of print, but photocopies of them are available. Staff 170. THE COST OF IMPLEMENTING CONSUMER FINANCIAL REGU- LATIONS: AN ANALYSIS OF EXPERIENCE WITH THE TRUTH Studies 165-174 are available on line at www.federalreserve.gov/ IN SAVINGS ACT, by Gregory Elliehausen and Barbara R. pubs/staffstudies. Requests to obtain single copies of any paper or Lowrey. December 1997. 17 pp. to be added to the mailing list for the series may be sent to 171. THE COST OF BANK REGULATION: A REVIEW OF THE EVI- Publications. 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

112 Federal Reserve Bulletin • December 2002 ANTICIPATED SCHEDULE OF RELEASE DATES FOR PERIODIC RELEASES OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (PAYMENT MUST ACCOMPANY REQUESTS) Annual Annual Approximate Corresponding Period or date to Release number and title mail fax release Bulletin rate rate days1 which data refer table numbers2 Weekly Releases H.2. Actions of the Board: $55.00 n.a. Friday Week ended Applications and Reports previous Received Saturday H.3. Aggregate Reserves of $20.00 n.a. Thursday Week ended 1.20 Depository Institutions and previous the Monetary Base3 Wednesday H.4.1. Factors Affecting Reserve Balances $20.00 n.a. Thursday Week ended 1.11, 1.18 of Depository Institutions and previous Condition Statement of Wednesday Federal Reserve Banks3 H.6. Money Stock Measures3 $35.00 n.a. Thursday Week ended 1.21 Monday of previous week H.8. Assets and Liabilities of $30.00 n.a. Friday Week ended 1.26A-F Commercial Banks in the previous United States3 Wednesday H. 10. Foreign Exchange Rates3 $20.00 $20.00 Monday Week ended 3.28 previous Friday H. 15. Selected Interest Rates3 $20.00 $20.00 Monday Week ended 1.35 previous Friday Monthly Releases G.5. Foreign Exchange Rates3 $ 5.00 $ 5.00 First of month Previous month 3.28 G. 15. Research Library— No charge N/A First of month Previous month Recent Acquisitions G.17. Industrial Production and $15.00 n.a. Midmonth Previous month 2.12, 2.13 Capacity Utilization3 $ 5.00 $ 5.00 Fifth working day Second month 1.55, 1.56 G.19. Consumer Credit3 of month previous $ 5.00 n.a. End of month Second month 1.51, 1.52 G.20. Finance Companies3 previous Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A67 Annual Annual Approximate Corresponding Period or date to Release number and title mail fax release Bulletin which data refer rate rate days1 table numbers2 Quarterly Releases E.2. Survey of Terms of Business $ 5.00 n.a. Midmonth of February, May, 4.23 Lending3 March, June, August, and September, and November December E.7. List of Foreign Margin Stocks No charge n.a. March and March and September September E. 11. Geographical Distribution of $ 5.00 n.a. 15th of March, Previous quarter Assets and Liabilities of June, Major Foreign Branches of September, and U.S. Banks December E. 15. Agricultural Finance Databook $ 5.00 n.a. End of March, January, April, June, July, and September, and October December E.16. Country Exposure Lending $ 5.00 n.a. January, April, Previous quarter Survey3 July, and October Z. 1. Flow of Funds Accounts $25.00 n.a. Second week of Previous quarter 1.57, 1.58, of the United States: March, June, 1.59, 1.60 Flows and Outstandings3 September, and December 1. Please note that for some releases, there is normally a certain vari- 2. The data in some releases are also reported in the Bulletin statistical ability in the release date because of reporting or processing procedures. appendix. Moreover, for all series unusual circumstances may, from time to time, 3. These releases are also available on the Board's web site, result in a release date being later than anticipated. www.federalreserve.gov/releases. n.a. Not available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

114 Federal Reserve Bulletin • December 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

A69 L-A - 2-B 3-C 4-D 5_EJII1L Pittj^gh N* MD * wv - •Charlotte Buffalo DE NJ NY BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6—F 7-G Birmingham^-J^ New Orleans FLy ATLANTA CHICAGO IM oo 't z JD MINNEAPOLIS 10-J . 1122--LL AALLAASSKKAA •• '' // • RRAAUUPPAAOORR,, •• __ KANSAS CITY H-K 1 I PTEO S;ui Antonio ••%% ^^ SSBBSSSSHHmmBBBBBBmm HHAAWWAAIIII FF^^ ""••""""AAAALL DALLAS SSAANN FFRRAANNCCIISSCCOO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

116 Federal Reserve Bulletin • December 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. Walter' 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 35242 V. Larkin Martin Lee C. Jones Jacksonville 32231 Marsha G. Rydberg Christopher L. Oakley 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 Glenn Hansen ST. LOUIS 63166 Charles W. Mueller William Poole Walter L. Metcalfe, Jr. W. LeGraride Rives Little Rock 72203 A. Rogers Yarnell, II Robert A. Hopkins Louisville 40232 J. Stephen Barger 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 Robert M. Murphy Maryann Hunter1 Oklahoma City 73125 Patricia B. Fennell Dwayne E. Boggs Omaha 68102 Bob L. Gottsch Steven D. Evans DALLAS 75201 H. B. Zachry, Jr. Robert D. McTeer, Jr. Patricia M. Patterson Helen E. Holcomb El Paso 79999 Gail Darling Sammie C. Clay Houston 77252 Edward O. Gay lord Robert Smith III1 San Antonio 78295 Ron Harris 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 Richard B. Hornsby Salt Lake City 84125 H. Roger Boyer Andrea P. Wolcott Seattle 98124 BoydE. Givan D.Kerry 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

A71 Index to Volume 88 GUIDE TO PAGE REFERENCES IN MONTHLY ISSUES Issue Text "A" PiCge s Issue Text "A" pages Index to Index to tables tables January 1- 66 1-82 66 July 313-332 1-72 58 February 67-140 1-90 76 August 333-404 1-84 70 March 141-200 1-80 68 September 405-426 1-86 74 April 201-234 1-74 64 October 427^144 1-74 58 May 235-258 1-92 76 November 445-468 1-84 70 June 259-312 1-78 64 December 469-512 1-80 58 The "A" pages consist of statistical tables and reference information. Statistical tables are indexed separately (see p. A58 of this issue). Pages Pages ANNUAL Report: Budget Review, 2002 290 Bank Holding Company Act of 1956—Continued Annual Report, 88th, 2001 289 Applications approved under—Continued Anthrax tests, Board of Governors 20, 321 BancMidwest Corporation 466 Arthur Anderson LLP, SEC accepts financial BancorpSouth, Inc 198 statements audited by 214 Bancshares Holding Corp 134 Articles Bancshares of Florida, Inc 421 An investigation of co-movements among the growth Bank Montreal, Montreal, Canada 466 rates of the G-7 countries 427-37 Bankmont Financial Corp 466 Consumers and credit disclosures: Credit cards Banknorth Group, Inc 309, 401, 508 and credit insurance 201-13 BANKshares, Inc., THE 310 Evolution of the Federal Reserve's intraday Bankshares of Hawley, Inc 401 credit policies 67-84 Baraboo Bancorporation, Inc., The 309 Financial literacy: An overview of practice, research, Bayerische Hypo- und Vereinsbank AG, Munich, and policy 445-57 Germany 310 Industrial production and capacity utilization: Bayerishe Landesbank Girozentrale, Munich, Germany ... 257 2001 annual revision 173-87 Baylor Bancshares, Inc 198 Monetary policy reports to the Congress 142-72, 333-59 Baylor/Delaware Corporation 198 Mortgage refinancing in 2001 and early 2002 469-81 BB&T Corporation 199, 422 Profits and balance sheet developments at Bedias Financial Corporation 134 U.S. commercial banks in 2001 259-88 Bedias Holdings, Inc 134 Proposed revision to the Federal Reserve's Beltline Bancshares, Inc 508 discount window lending programs 313-19 Bement Bancshares, Inc 465 Retail fees of depository institutions, 1997-2001 405-13 BFM Bancshares, Inc 256 Survey of finance companies, 2000 1-14 Black Diamond Financial Group, Inc 330 Use of checks and other noncash payment instruments BOK Financial Corporation 442 in the United States 360-73 Border Bancshares, Inc 256 U.S. international transactions in 2001 235-47 Bryan Family Management Trust 198 Bryan-Heritage Limited Partnership 198 BANK Holding Companies and Change in Bank Buerge Bancshares, Inc 198 Control (Reg. Y) 91, 294 Caixa Geral de Depositos, S.A., Lisbon, Portugal 465 Bank holding companies, SEC guidance, audited financial Capital Bank Corporation 134, 508 statements 214 Capital Corp. of the West 400 Bank Holding Company Act of 1956 Capitol Bancorp, Ltd 62 Applications approved under Carolina National Corporation 329 Access National Corporation 329 Cavalry Bancorp, Inc 134 Allegheny Bancshares, Inc 508 CBA Bancshares, Inc 198 Allegiant Bancorp, Inc 257, 330, 466 CenterState Banks of Florida, Inc 421 Allfirst Financial, Inc 443 Central Bancshares, Inc 231 Allianz AG, Munich, Germany 310 Central Financial Corporation 134 Allied Irish Banks, pic, Dublin, Ireland 443 Central Texas Bankshare Holdings, Inc 134 Almancora CVA, Belgium 442 Century Bancshares, Inc 309 American West Bancorp 421 Cera Beheersmaatschappij, N.V., Belgium 442 Ames National Corporation 329 Cera Holding CVBA, Belgium 442 Andrews Holding Company 198 CFB Holding Company 134 Arthur State Bancshares, Inc 509 CGD-USA Holding Company, Inc 465 Aviston Financial Corporation 442 Charter-Michigan Bancorp 329 Banc Corporation 232 Charter One Financial, Inc 329 Bancfirst Ohio Corp 134 Chesnee State Bancshares, Inc 509 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

118 Federal Reserve Bulletin • December 2002 Pages Pages Bank Holding Company Act of 1956—Continued Bank Holding Company Act of 1956—Continued Applications approved under—Continued Applications approved under—Continued Chittenden Corporation 231 F.N.B. Corporation 198 CIB Marine Bancshares, Inc 510 FOJ Management Company, LLC 509 Citizens Bancshares Employee Stock Ownership Plan 231 FOJ Partners, II, L.P. 508 Citizens Bank Holding Company 329 FOJ Partners, L.P. 508 CNB Bancorp, Inc 256 Folkston Investors, LLC 231 Coastal Community Investments, Inc 256 Four Oaks Fincorp, Inc 510 Colonial BancGroup, Inc., The 442 Frances W. Arthur Irrevocable Trust, No. 2 for the Colony Bankcorp, Inc 257 Benefit of Frances Oxner Jorgenson 509 Colorado County Investment Holdings, Inc 134 Franklin Bancorp, Inc 508 Commerce Bancshares, Inc 508 Generations Bancshares, Inc 465 Commerce Financial Corporation 442 Gifford Bancorp, Inc., Employee Stock Ownership Plan ..310 Commerce Holding Corporation 508 Gold Banc Corporation, Inc 510 Commercial Bancorp 465 Goodenow Bancorporation 443 Commercial Bancshares, Inc 309 Grace Investment Company, Inc 401 Community First Financial Corporation 329, 442 Grand Bankshares, Inc 135 Community First Financial Group, Inc 136 Grant County State Bancshares, Inc., Employees Community State Bancshares, Inc 134 Stock Ownership Plan 231, 256 Community Valley Bancorp 329 Greater Sacramento Bancorp 508 Concord EFS, Inc 257 Guaranty Bancorp, Inc 255 Countryside Square Bancshares, Inc 421 Guaranty Financial Services, Inc 465 County Bancorp, Inc 401 HAO Management Company, LLC 508 Credit Riviere Corporation 256 HAO Partners II, L.P. 508 CRSB Bancorp, Inc 309 HAO Partners, L.P. 508 Crystal Valley Financial Corporation 510 Hardin County Bancorp, Inc 198 C&S Bancorporation, Inc 198 Harris Bankcorp, Inc 466 CSB Financial Corporation 329 Hazen Bancorporation, Inc 465 Cypress Bankshares, Inc 508 Heritage Group, Inc 330 Dakota Bancshares, Inc 231 HomeTown Financial Services, Inc 256 Delaware West Financial, Inc 422 Hometown Independent Bancorp, Inc 401 Denison Capital Enhancement Trust 421 Hometown Independent Bancorp, Inc., Employee Stock Docking Bancshares, Inc. 309 Ownership Plan & Trust 401 Dunlap Iowa Holding Co 62 Hoosac Financial Services, Inc 310 EuroBancshares, Inc 309 IB Bancshares, Inc 508 Exchange Bankshares Corporation 257 IBC Bancorp, Inc 402 FBOP Corporation 136, 199 Identrus, LLC 255, 310 FCB Florida Bancorporation, Inc 329 Jane Austin Chapman Limited Partnership, L.P. 198 Fidelity Company 508 JCO Partners II, L.P. 508 Financial Corporation of Louisiana 508 JCO Partners, L.P. 508 Firstate Bancorp, Inc 134 JCO Ventures, LLC 508 First Bancshares of Texas, Inc 421 J.R. Montgomery Bancorporation, Inc 329 First Bank of Miami Shares, Inc 466 KBC Bank N.V., Belgium 442 First Banks, Inc 134, 510 KBC Bankverzekerings Holding N.V., Belgium 442 First California Northern Bancorp 62 Kilmichael Bancorp, Inc 509 First Capital Investments, L.L.C 329 Krey Company, Ltd 256 First Charter Corporation 198 Krum Bancshares, Inc 135 First Citizens Bancorporation of Krum Bancshares of Delaware, Inc 135 South Carolina, Inc 309, 401 Landesbank Baden-Wurttemberg, Stuttgart, Germany 136 First Citizens Bancshares, Inc 329 LandMark Financial Holding Company 466 First Columbia Bancorp, Inc 135 Lauritzen Corporation 231, 465 First Community Bancshares, Inc 256, 402 Lauritzen Enterprises 198 First Delta Bankshares, Inc 421, 442 Legends Financial Holdings, Inc 310 First Financial Bancorp 310 Liberty Bancshares, Inc 310 First Financial Corporation 310 Linn Holding Company 509 First Financial Holdings, MHC 421 Local Financial Corporation 509 First Financial of Renton, Inc 421 Local Oklahoma Bank, N.A 509 First Georgia Holding, Inc 421 Lost Pines Bancshares, Inc 402 First Mariner Bancorp 402 Lubco Bancshares, Inc 256 First Merchants Corporation 231 Macatawa Bank Corporation 198, 231 First Midland Nevada Corp 421 Mahaska Investment Company 199 First Midwest Acquisition Corporation 422 Mainline Bankshares of Portland, Inc 136 First Mutual of Richmond, Inc 402 MainStreet BankShares, Inc 421 First National Bank of Berryville Employee Malvern Bancshares, Inc 135 Stock Ownership Trust 62 Manito Bank Services, Inc 62 First National of Illinois, Inc 198 Marion County Bancshares, Inc 256 First National of Nebraska, Inc 198 Marquette Financial Companies 509 First Reliance Bancshares, Inc 231 Marshall Bancorp, Inc 329 First Security Group 421 Marshall & Ilsley Corporation 136, 231, 422, 443 First Sentry Bancshares, Inc 135 Maunesha Bancshares, Inc 231 First Service Financial Company 231 MCB Financial Group, Inc 465 First Sleepy Eye Bancorporation, Inc 465 Mcintosh County Bank Holding Company, Inc 465 First Southern Bancorp 135 McLaughlin Bancshares, Inc 135 First Staunton Bancshares, Inc 256 McLaughlin Delaware Bancshares, Inc 135 First York BanCorp 329, 442 Meader Insurance Agency, Inc 199, 402 Flatlrons Bank Holding Company 135 Mercantile Bancorp, Inc 199 Florida Community Banks, Inc 310 Mercantile Bankshares Corporation 255 FNB Corp 401 Merchants and Manufacturers Bancorporation, Inc 509 FNB Corporation 135 Merchants Merger Corp 509 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 88 A73 Pages Pages Bank Holding Company Act of 1956—Continued Bank Holding Company Act of 1956—Continued Applications approved under—Continued Applications approved under—Continued Mesaba Bancshares, Inc 135 Southwest Company 467 Metavante Corporation 136 Sparkassenverband Baden-Wurttemberg, Stuttgart, Metropolitan Bancorp, Inc 329 Germany 136 Metropolitan Bank Group, Inc 329, 401 Spector Properties, Inc 135 MidCarolina Financial Corporation 329 State Bancshares of Ulen, Inc 330 Mid-Missouri Bancshares, Inc 421 State Bank of Hawley Employee Stock Ownership Midwest Banc Holdings, Inc 136 Plan and Trust 401 Midwest Bankers' Bancorporation, Inc 329 State Bank & Trust Company Employee Stock Midwest Financial and Investment Services, Inc 136 Ownership Plan 466 Minnwest Corporation 467 State Capital Corporation 466 Monticello Bancshares, Inc 401 Sterling Bancorporation, Inc 442 Morrill Bancshares, Inc 467 Sterling Bancshares, Inc 442 Mountain National Bancshares, Inc 401 Sumitomo Mitsui Financial Group, Inc., Tokyo, Japan .... 510 Munchener Ruckverischerungs-Gesellschaft Summit Bancshares, Inc 509 Aktiengesellschaft In Munchen, Munich, Germany ... 310 Sun Community Bancorp, Limited 62 National Bancshares Corporation 257 Sunstate Bancshares, Inc 330 NB&T Financial Group, Inc., Employee Stock Superior National Bank Holding Company 135 Ownership Plan 135 Synovus Financial Corp 401 Nebraska Bankshares, Inc 421 TCSB Bancorp 232 New Frontier Bancorp 231 Tennessee Central Bancshares, Inc 402 New Met Financial Corporation 465 Tennessee Valley Financial Holdings, Inc 232 Nicolet Bankshares, Inc 330 Texas Regional Bancshares, Inc 199, 509 NorCal Community Bancorp 330 Texas Regional Delaware, Inc 199, 509 Northern Plains Investment, Inc 199 Texas United Bancshares, Inc 402 North Fork Bancorporation 442 Today's Bancorp, Inc 422, 466 North Star Holding Company, Inc 465 TransCommunity Bankshares, Incorporated 466 North State Bancorp 330 Tri-County Bancorp, Inc 135 Northwest Bancshares, Inc 135 Tri-County Bancshares, Inc 422 Northwest Delaware, Inc 135 TrustCo Bank Corp NY 230 Odin Bancshares, Inc 231 UNB Corp 136 Orchid Financial Bancorp, Inc 421 Union Planters Corporation 199 Oswego Community Bank Employee Stock United Bancor, Ltd 136 Ownership Plan 465 United Community Bankshares of Florida 443 Outsource Delaware Holdings, Inc 311 United Financial, Inc 443 Outsource Holdings, Inc 311 United National Bancorp 422 Overton Delaware Corporation 421 Valley Commerce Bancorp 510 Overton Financial Corporation 421 Valley View Bancshares, Inc 136 Pacific State Bancorp 330 VB Bancshares, Inc 508 P.C.B. Bancorp, Inc 466 Wadena Bankshares, Inc 401 Peoples Bancorp 330 Washington Trust Bancorp, Inc 232 People's Community BancShares, Inc 401 Wausa Bancshares, Inc 232 Peoples State Bancorp, Inc 330 Wells Fargo & Company 255 PHSB Financial Corporation 135 Westfield Financial, Inc 136 Pinnacle Bancorp, Inc 421 Westfield Mutual Holding Company 136 Pipestone County Bancorp 422 West Financial, Inc 422 Plainville Bancshares, Inc 135 West Point Bancorp, Inc 136 Planters Financial Group, Inc 466 Wheeler Bancshares, Inc 466 Plaza Bancorp, Inc 329 Williamstown Mutual Holding Company 199 Port Financial Corp 422 Wishek Bancorporation, Inc 466 Premier Holdings, Ltd 135 Woodruff State Bancshares, Inc 509 Prosperity Bancshares 422, 466 Orders issued under PRP Bancorp, Inc 62 Banc West Corporation 221-27 Putnam-Greene Financial Corporation 509 BNP Paribas, Paris, France, 97-99, 221-27 Randolph Bancorp 442 Charter-Michigan Bancorp, Inc 297-303 Regions Financial Corporation 256 Charter One Financial, Inc 297-303 Resource Bankshares, Inc 509 Chickasaw Banc Holding Company 99-101 R&G Financial Corporation 330 Chinatrust Financial Holding Company, Ltd., Richey Bancorporation, Inc 422 Taipei, Taiwan 303-07 Richmond Mutual Bancorporation, Inc 402 Citigroup, Inc 485-502 Riverdale Bancshares, Inc 231 Citizens Financial Group, Inc 51-58 Riverside Central Florida Banking Company 135 First York Ban Corp. 251-53 Rockhold BanCorp 466 Herky Hawk Financial Corporation 463-65 Royal Bank of Scotland Group, pic, The, Independence Bancshares, Inc 101-03 Edinburgh, Scotland 255 RBC Centura Bank 385-92 Salin Bancshares, Inc 510 RBC Centura Banks, Inc 385-92 Savanna-Thomson Investment, Inc 311 RBSG International Holdings, Ltd., SBN Community Bancorp, Inc 256 Edinburgh, Scotland 51-58 SCB Bancorp, Inc 509 Royal Bank of Canada, Montreal, Canada 385-92 Security Bancorp of Tennessee, Inc 422 Royal Bank of Scotland Group, pic, The, Security Bank Holding Company 508 Edinburgh, Scotland 51-58 Sibley Capital Enhancement Trust 422 Royal Bank of Scotland, pic, The, Signature Bancorp, Inc 231 Edinburgh, Scotland, 51-58 South Coastal Holdings, MHC, Inc 330 SinoPac Holdings, Taipei, Taiwan 307-09 Southern Community Bancorp 422 Wells Fargo & Company 103-22 South Group Bancshares, Inc 135 Wesbanco, Inc 191-94 SouthTrust Corporation 62, 232 Bank Holding Company Supervision Manual 21, 415 SouthTrust of Alabama, Inc 62, 232 Banking Opportunities in Indian Country, conference 484 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

120 Federal Reserve Bulletin • December 2002 Pages Pages Banking organizations 289, 376 Board of Governors—Continued Bank Merger Act Members—Continued Applications approved under Kohn, Governor Donald L 438 American Heritage Bank 257 Meyer, Governor Laurence H 85 Arvest Bank 200, 257, 331 Olson, Governor Mark W. 15, 85 Bank of Mulberry 200, 232 Membership lists 64, 138, 424 Bank, The 232 Official staff changes Blue River Federal Savings Bank 510 Clark, Tillena 24 Colonial Bank 62, 444 Clouse, James 23 Comerica Bank-California 136 English, William 23 Community Banks of Southern Colorado 311 Fox, Lynn 23 CornerStone State Bank 510 Gagnon, Joseph 461 Dakota Bank 423 Helkie, William 461 Equity Bank 402 Kamin, Steven B 461 Farmers State Bank of Madelia, Inc 423 Massey, Raymond H 24 Fifth Third Bank, Indiana 136 Mowry, Sharon 24 First American Bank, Fort Dodge, Iowa 331 Porter, Richard 23 First American Bank, Sioux City, Iowa 331 Romero, Raymond 216 First Bank 137 Sauls, Billy 484 First Bank and Trust Company, The 137 Sheets, Nathan 461 First Bank of Medicine Lodge 510 Smith, Michelle 23 First State Bank of Taos 423 Spicer, Donald L 484 Florida Keys Bank 137 Stehm, Jeff 23 Fuji Bank and Trust Company, The 510 Stevens, Richard 323 Heritage Bank of Commerce 510, 511 Taylor, Robert 24 Industrial Bank of Japan Trust Company, The 257 Walton, Jack K. II 23 Iowa State Bank 137 Wascher, William L 439 Johnson Bank 257, 467 West, Mary 439 Midwest Bank and Trust Company 444 Whitesell, William 23 M&I Marshall & Ilsley Bank 258 Winn, Donald 23 Pacific State Bank 232 Thrift Institutions Advisory Council 86 Pinnacle Bank 423, 467 Virtual tour 377 Potomac Valley Bank 137, 200 Branch deposits, interstate, rules 376, 383 RBC Centura Bank 257 Braunstein, Sandra, article 445-57 Regions Bank 232, 402 Business Sand Ridge Bank 511 Finance 341-44 S.B.C.P. Bancorp, Inc 423 Loans 262-64 SBCP Mergersub, Inc 423 Sector, economic development, 149-54 Security Bank 137 Southern Financial Bank 423 CANNER, Glenn, article 469-81 Southern Security Bank 137 Capacity utilization 176 SouthTrust Bank 62, 232 Capital State Bank of Cross Plains 423 Accounts, U.S 245-47 State Bank of Howards Grove 311 Commercial banks 268 State Bank & Trust Company, The 232 Flows, U.S 245 Texas State Bank 200,511 Guidelines 26-51, 89, 91, 248, 293 Town and Country Bank of Springfield 232 Standards, risk-based 293 Union State Bank 331 Carlson, Mark, article 259-88 United States Trust Company of New York 200 Cash-out and mortgage refinancing 475 Virginia Heartland Bank 331 Chairmen and deputy chairmen, 2003, Federal Vista Bank, N.A 423 Reserve Banks 458 Orders approved under Checking accounts and check use 18, 360-73, 406, 414 SunTrust Bank 122-31 Clark, Tillena, Assistant Director, Division of Information Orders issued under Technology, rotational assignment completed 24 Banco Popular de Puerto Rico 194 Clearing House Interbank Payments System (CHIPS) 69 Bank of Orange County 417 Clouse, James, appointed Assistant Director, Division Westamerica Bank 392-97 of Monetary Affairs 23 Bank transactions, regulation 483 Code of Federal Regulations, Reserve Bank Directors— Bassett, William F., article 259-88 Actions and Responsibilities, removed 251 Bernanke, Governor Ben S., sworn in 438 Coleman, Stacy Panigay, article 67-84 Bies, Governor Susan Schmidt, sworn in 15, 85 Commercial and industrial loans 262, 273 Board of Governors (See also Federal Reserve System) Commercial Bank Examination Manual 322 Anthrax tests 20, 321 Commercial bank Consumer Advisory Council 86, 215, 375, 461 Balance sheets 260-70 Discount rate meetings, minutes 20, 89, 190, 249, 321, Capital 268 Derivatives transactions 269 349, 415, 439, 461 Developments, article 259-88 Division of Reserve Bank Operations and Payment Income and expenses, tables 278-88 Systems, reorganization 23 Interest income and expense 271 Division of Support Services, merger with Management International operations 276 Division 23 Liabilities 268 Final enforcement orders and decisions (See Litigation, Loans 262-64, 274 Final enforcement decisions or orders issued by Noninterest income and expenses 272 Board of Governors) Profitability 270-76 Index of orders or actions taken 61, 229, 328, 441 Securities holdings 267 Members Bernanke, Governor Ben S 438 Conference, "Banking Opportunities in Indian Country" 484 Bies, Governor Susan Schmidt 15, 85 Consumer Advisory Council Gramlich, Governor Edward M 439 Meetings 86, 215, 375, 461 Kelley, Governor Edward W., Jr 15 Members and officers, appointments 86 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 88 A73 Pages Pages Consumer Advisory Council—Continued Federal Open Market Committee—Continued Nominations sought 375 Domestic policy directives 15, 188, 214, 320, Security procedures 215 375, 438, 458, 482 Consumer credit disclosures 17, 201-13, 295 Meeting minutes, reprints discontinued in Bulletin 21 Consumer Guide on Privacy Notices 189 Meeting schedule, 2003 414 Consumer privacy regulations, guidance for financial Federal Reserve Act institutions 18 Orders issued under Consumer spending 147, 337-39 Annapolis Banking and Trust Company, The 131 Corporate profits 151-54, 341-44 JPMorgan Chase Bank 325 Corrado, Carol, article 173-87 Federal Reserve Banks Credit Chairmen and deputy chairmen, 2003 458 Credit, extension of 25, 91, 482 Card lending, guidance on account management and loss Income, preliminary figures 88 allowances 415, 439 Federal Reserve notes, redesign 376 Disclosures, revision 17 Federal Reserve System, intraday credit policies, article 67-84 Insurance users, survey 208-13 Federal Trade Commission Act, Greenspan letter 320 Primary, secondary, seasonal 316, 319 Fedwire book-entry securities and transfer systems 69 Receivables, revolving 6 Fee-based trigger, adjustment on dollar amount 460 Currency redesign 376 Fees, depository institutions, 1997-2001, article 405-13 Finance companies, 2000, article on survey 1-14 DAYLIGHT overdraft fees and ways to measure 71, 77 Finance, household 148 Debt, U.S. and consumer 354, 447 Financial Depository institutions Accounts, proposal to identify new account customers 414 Check payments 362 Flows, U.S 346 Fees 406 Institutions, advisory regarding fraud schemes 321 Increase in exemption threshold 88, 91 Literacy: An overview of practice, research, SEC guidance, audited financial statements 214 and policy, article 445-57 Derivatives transactions 269 Literacy training 448, 452 Directives, Federal Open Market Committee 15, 188, 214, 320, Markets, economic developments 143-45, 146-72, 334, 375, 438, 458, 482 336-59, 351 Disclosure requirements 20, 201-13, 460 System, white paper on sound practices 438 Discount rates 15, 25, 91, 316 Foreign sector, economic developments 157-59, 236, 356-59 Discount rate meetings, minutes 20, 89, 190, 249, 321, Foreign transactions in 2001, article 235^17 415, 439, 461 Fox, Lynn, assignment, Office of Board Members 23 Discount window lending, proposed revision 313-19, 320 Fraud schemes, advisory 321 Division of Reserve Bank Operations and Payment Systems, reorganization 23 GAGNON, Joseph., Assistant Director, Division of Domestic Open Market Operations, reprint International Finance, assignment 461 discontinued in Bulletin 21 G-7 countries, growth, article 427-37 Domestic policy directives, FOMC 15, 188, 214, 320, Gerdes, Geoffrey R., article 360-73 375, 438, 458, 482 Gilbert, Charles, article 173-87 Doyle, Brian M., article 427-37 Goods and services, trade developments 239-43 Durkin, Thomas A., article 201-13 Government sector, economic developments 154 Dynan, Karen E„ articles 1-14, 469-81 Gramlich, Governor Edward M„ announcement 439 Greenspan, Chairman Alan, Federal Trade Commission Act ... 320 ECONOMIC developments, U.S., by sector Growth rates of the G-7 countries, article 427-37 Business 149-54, 340-44 Financial markets 143-45, 163-68, 334, 336-59, 351 HANNAN, Timothy H., article 405-13 Foreign 156-59, 346 Helkie, William L. Government 154-56, 344-46 Appointed Senior Adviser, Division of International Household 147^19, 337-40 Finance 461 Labor markets 159-61, 348 Article 235-47 Prices 161-63, 350-56 Homebuyers counseling programs 450 Economy, U.S. Home-equity lending practices, amendment 92-97 Performance Home Mortgage Disclosure Act (Reg. C) 91, 188, 289, Foreign transactions 236 375, 379-83 Monetary policy reports 142-72, 333-59 Household Projections 145, 335 Check payments 368 Electronic payments 360-73, 368 Debt 339 Emerging market economies 171 Loans 264, 274 Employment 348 Sector, economic developments 147—49 Enforcement actions (See Litigation, Final enforcement Housing investment 338 decisions or orders issued by Board of Governors) Humphrey Hawkins Report (See Monetary Policy Reports English, William, appointed Assistant Director, Division of to the Congress) Monetary Affairs 23 Equipment loans and leases by finance companies 3 IMPORT prices 242 Equity prices, investment, capital guidelines 89, 164, 353 Income and expenses, commercial banks 271-72 Evolution of the Federal Reserve's intraday credit Tables 278-88 policies, article 67-84 Income, Federal Reserve Banks, preliminary figures 88 Export prices 240 Industrial production and capacity utilization Extensions of Credit by Federal Reserve Banks; Article 173-87 Change in Discount Rate (Reg. A) 25, 91, 482 Index weights 177 Reprints discontinued in Bulletin 20 FAUST, Jon, article 427-37 Revision 177 Federal government use of checks 369 Tables 179-87 Federal Open Market Committee Insufficient funds, fees 409 Discount rate change 15, 25, 91, 316 Interest income and expenses, commercial banks 271-72 Discount rate meetings, minutes 20, 89, 190, 249, 321, Interest rates 415, 439, 461 Commercial banks, tables 278-88 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

122 Federal Reserve Bulletin • December 2002 Pages Pages Interest rates—Continued Litigation—Continued Financial markets 351-53 Written agreements—Continued Monetary policy report on 163 Allied Irish Banks, pic, Dublin, Ireland 323 International Bank of Little Rock 23 Developments, monetary policy 169-72, 356-59 Byron Center State Bank 484 Operations, commercial banks 276 Cerritos Valley Bancorp 23 Transactions, article 235-47 Community First Bank and Trust 416 International Banking Act of 1978 First American Bancorp, Inc 416 Orders issued under First American Bank 416 Allgemeine HypothekenBank Rheinboden AG, First State Bank of Warner 89 Frankfurt, Germany 196 Madison Bank 377 Artesia Banking Corporation, S.A., Brussels, MSB Shares, Inc 216 Belgium 253-55 New Century Bank 216 Banca Comerciala Romana, S.A., Bucharest, O.A.K. Financial Corporation 484 Romania 326-28 PNC Financial Services Group, Inc 416 Caixa de Aforros de Vigo, Ourense e Pontevedra, Rurban Financial Corp 416 Vigo, Spain 132 State Bank and Trust Company 416 China Merchants Bank, Shenzhen, People's Republic Loans of China 503 Business 262-64 Eurohypo Aktiengesellschaft, Frankfurt, Germany 504-06 Commercial and industrial 262 Fortis Bank S.A./N.V., Brussels, Belgium 506 Commercial banks, performance 273, 274 Hamburgische Landesbank Girozentrale, Hamburg, Electronic 215 Germany 397 Household 264 ICICI Bank Limited, Mumbai, India 227 Loss provisions 275 Jamaica National Building Society, Kingston, Jamaica .... 59 Mortgage, disclosure requirements 20, 25 Landesbank Schleswig-Holstein Girozentrale, Loan-to-deposit ratios 376 Kiel, Germany 399 Loss, credit card lending, guidance on account Nordea Bank Finland, Pic, Helsinki, Finland 418 management 415, 439 Interstate branch deposits 376, 383 Intraday credit policies 67-84 MADIGAN, Brian F„ article 313-19 Investigation of co-movements among the growth rates Management Division, merger with of the G-7 countries, article 427-37 Support Services Division 23 Investment income, net and portfolio 244-45 Massey, Raymond H. Associate Director, Division of Investments 150-51, 340-41 Information Technology, retirement 24 Membership, Board of Governors, lists 64, 138, 424 JOHNSON, Kathleen W., article 1-14 Membership of State Banking Institutions in the Federal Reserve System (Reg. H) 26-51, 91, 293-95, 384 KAMIN, Steven B., Deputy Associate Director, Division of Meyer, Governor Laurence H., resignation 85 International Finance, assignment 461 Monetary aggregates 167, 353 Kelley, Governor Edward W., Jr., resignation 15 Monetary policy reports to the Congress 142-72, 333-59 Kohn, Governor Donald L., sworn in 438 Money stock data, revision 216-20 Morin, Norman, article 173-87 LABOR markets, economic developments 159-61, 348 Mortgage loans LAN equipment 178 Disclosure requirements 20, 25 Liabilities, commercial banks 268 Lending practices 446 Litigation Refinancing 469-81, 475 Final enforcement decisions or orders issued by Board of Motor vehicle finance, retail and wholesale 4 Governors Mowry, Sharon, Assistant Director, Division of Information AmTrade International Bank of Georgia 461 Technology, rotational assignment 24 Bank of the Orient 323 Broadstreet, Inc 461 NELSON, William R„ article 313-19 Cabrera, Pedro 323 Noncash payments 369 Chaing, William 416 NOW account fees 407 Community Bank of Granbury 291 DeRosa, Edward 323 OIL imports 242 Dexia Bank Belgium, S.A., Brussels, Belgium 89 Oil prices, 2001 237 Dexia Credit Local de France, Paris, France, Olson, Governor Mark W., sworn in 15, 85 Brussels, Belgium 89 "On Us" checks 364 Dexia, S.A., Brussels, Belgium 89 Overdraft fees 409 Gulf Bank 23 Kuo, Joseph C.C 416 PARALLEL-OWNED banking organizations, guidance 289 Kuo, Lih Yuh 416 Passmore, Wayne, article 469-81 Lee, Paul 416 Payment system risk, policy 16, 73, 360-73, 438 New Century Bank 216 Personal information, access 384 PNC Financial Services Group, Inc 416 Porter, Richard, appointed Senior Adviser, Division of State Bank of India, Mumbai, India 22 Monetary Affairs 23 United Central Bank 484 Prices, economic developments 161-63, 350-56 Yao, Ching-Tseh 416, 484 Primary credit 316 Index of orders or actions taken 61, 229, 328, 441 Privacy Act, rules regarding access to personal information — 384 Pending cases involving the Board of Privacy Choices for Personal Financial Information 189 Governors, lists of 63, 137, 200, 233, Privacy, consumer 18, 189 258, 311, 331, 403, Profitability, commercial banks 270-76 423, 444, 467, 511 Publications Termination of enforcement action issued by Annual Report, 2001 289 Board of Governors Annual Report: Budget Review, 2002 290 Bank of New York 377 Bank Holding Company Supervision Manual 21,415 Written agreements approved by Federal Reserve Banks Commercial Bank Examination Manual 322 Allfirst Bank 323 Privacy Choices for Personal Financial Information 189 Allfirst Financial, Inc 323 Statistical Digest, 1996-2000 216 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 88 A73 Pages Pages Publications—Continued Statistical appendix, Bulletin tables, ten discontinued 290 When is Your Check Not a Check? Electronic Statistical Digest, 1996-2000 216 Check Conversion 249 Stehm, Jeff, assignment, Division of Reserve Bank Operations 23 REAL estate loans and receivables 2, 5-6, 274, 380 Stevens, Richard, retirement 323 Recourse obligations, banking organizations 17 Stop-payment order, fees 409 Refinancing and cash-out 475 Support Services Division, merger with Refinancing, mortgages, article 469-81 Management Division 23 Regulations (See also Rules) Survey of finance companies, 2000, article 1-14 Board of Governors Syndicated loans 459 A, Extensions of Credit by Federal Reserve Banks; Change in Discount Rate 25, 91, 482 TABLES, Bulletin statistical, ten discontinued 290 C, Home Mortgage Disclosure Act 91, 188, 289, Taylor, Robert, appointed Assistant Director, Division of 375, 379-83 Information Technology 24 D, Reserve Requirements of Depository Testimony of Federal Reserve Officials, reprints in Bulletin Institutions 25, 92-97, discontinued 21 248, 295, 463, 485 Thrift holding companies, SEC guidance, audited financial H, Membership of State Banking Institutions statements 214 in the Federal Reserve System 26-51, 91, Thrift Institutions Advisory Council, new members, 293, 384 officers, appointments 86 W, Transactions between Banks and Their Affiliates 483 Trade Y, Bank Holding Companies and Change Deficit, U.S 239-43, 346 in Bank Control 91, 294 Foreign countries 156 Z, Truth in Lending 17, 25, 92-97, 248, 295, 463 G-7 countries 428 Reserve Bank Directors—Actions and Responsibilities, Goods and services 239-43 removed from Code of Federal Regulations 251 Transactions between Banks and Their Affiliates (Reg. W.) .... 483 Reserve Requirements of Depository Institutions Treasury and Federal Reserve Foreign Exchange Operations, (Reg. D) 25, 92-97, 248, 295, 463, 485 reprints in Bulletin, discontinued 21 Residential investment 148 Truth in Lending Act, mortgage loans, disclosure Retail fees of depository institutions, 1997-2001, article .... 405-13 requirements 25, 206 Retail payment systems 18 Truth in Lending (Reg. Z) Riegle-Neal Interstate Banking and Branching Consumer credit disclosures 17, 206, 248, 295 Efficiency Act 376, 383 Predatory lending, amendment 17, 92-97 Romero, Raymond, appointed Assistant Director, Rules for mortgage transactions 25, 463 Division of Information Technology 216 Rules Regarding Access to Personal Information UNILATERAL transfers 245 under the Privacy Act 384 United States and G-7 growth 434 Use of checks and other noncash payment instruments SAULS, Billy, appointed Assistant Director, in the United States, article 360-73 Management Division 484 Savings accounts 408, 414 VIRTUAL tour on Board's web site 377 Secondary credit 319 Securities WALTON, Jack K. II Commercial bank holdings 267 Article 360-73 Firms, capital guidelines 248 Assistant Director, Division of Reserve Bank Operations Government, "white paper" release on changes and Payment Systems, appointed 23 in settlements 321 Wascher, William L., Assistant Director, Division of State member banks 214 Research and Statistics, new assignment 439 September 11, 2001, effects on economy .... 81, 142, 165, 267, 321 Welch, Carolyn, article 445-57 Sheets, Nathan, Assistant Director, Division of International West, Mary, appointed Assistant Director, Division of Finance, assignment 461 Research and Statistics 439 Slowinski, Samuel M., article 1-14 When is Your Check Not a Check? Electronic Check Smith, Michelle, Assistant Director, Conversion 249 Office of Board Members, promoted 23 White Paper on Sound Practices to Strengthen the Spicer, Donald L., appointed Assistant Director, Resilience of the U.S. Financial System 438 Management Division 484 White paper on government securities, release 321, 438 State and local government spending 346 Whitesell, William, promoted to Deputy Associate Director, State banking institutions, membership guidelines ... 26-51, 293-95 Division of Monetary Affairs 23 State member banks, equity hedges 214 Winn, Donald, appointed Director, Office of Board Members .. 23 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

124 Federal Reserve Bulletin • December 2002 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, S750 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, mail stop 127, Board of Govcontains Regulations B, C, E, G, M, P, Z, AA, BB, and ernors of the Federal Reserve System, Washington, DC DD, and associated materials. 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, Mail Stop 127, Board are constructed. It lists each flow series in the Board's of Governors of the Federal Reserve System, Washingflow of funds publication, "Flow of Funds Accounts of ton, DC 20551. the United States" (the Z.l quarterly statistical release), Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A79 Federal Reserve Statistical Releases Available on the Commerce Department's Economic Bulletin Board The Board of Governors of the Federal Reserve Sys- For further information regarding a subscription to tem makes some of its statistical releases available to the economic bulletin board, please call (202) 482the public through the U.S. Department of Com- 1986. The releases transmitted to the economic bullemerce's economic bulletin board. Computer access tin board, on a regular basis, are the following: to the releases can be obtained by subscription. Reference Number Statistical release Frequency of release H.3 Aggregate Reserves Weekly/Thursday H.4.1 Factors Affecting Reserve Balances Weekly/Thursday H.6 Money Stock Weekly/Thursday H.8 Assets and Liabilities of Insured Domestically Chartered Weekly/Monday and Foreign Related Banking Institutions H.10 Foreign Exchange Rates Weekly/Monday H.15 Selected Interest Rates Weekly/Monday G.5 Foreign Exchange Rates Monthly/end of month G.17 Industrial Production and Capacity Utilization Monthly/midmonth G.19 Consumer Installment Credit Monthly/fifth business day Z. 1 Flow of Funds Quarterly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis