Federal Reserve Bulletin, 2003-05

Volume 89 • Number 5 • May 2003 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 • Marianne M. Emerson • Jennifer J. Johnson • Karen H. Johnson • Stephen R. Malphrus • J. Virgil Mattingly, Jr. • Vincent R. Reinhart • Louise L. Roseman • 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 191 U.S. INTERNATIONAL TRANSACTIONS IN Minutes of discount rate meetings 2002 Enforcement actions After slightly narrowing during the cyclical Staff changes slowdown of 2001, the U.S. current account deficit widened in 2002, as it had over the pre- 208 LEGAL DEVELOPMENTS vious decade. Two-thirds of the increase in the deficit last year was attributable to an increase Various bank holding company, bank service in the deficit for trade in goods and services. corporation, and bank merger orders; and pend- In addition, net investment income receded as ing cases. receipts from abroad declined more than payments on foreign investments in the United AI FINANCIAL AND BUSINESS STATISTICS States. The record $503 billion U.S. current These tables reflect data available as of account deficit registered in 2002 was financed March 27, 2003. by continued high levels of private capital inflows and stepped-up foreign official pur- A3 GUIDE TO TABLES chases of U.S. assets. If economic activity picks up in the United A4 Domestic Financial Statistics States and in its major trading partners later this A42 Domestic Nonfinancial Statistics year, as most forecasters expect, the U.S. exter- A44 International Statistics nal deficit likely will widen as U.S. imports of goods and services rise by a greater amount than A57 GUIDE TO SPECIAL TABLES AND U.S. exports of goods and services. The decline STATISTICAL RELEASES in the dollar from early 2002 to date is unlikely to restrain the widening of the deficit by much, A70 INDEX TO STATISTICAL TABLES as it has been relatively small and its effects will be spread over a number of years. A72 BOARD OF GOVERNORS AND STAFF 204 ANNOUNCEMENTS A74 FEDERAL OPEN MARKET COMMITTEE AND STAFF; ADVISORY COUNCILS Federal Open Market Committee directive Revisions to official staff commentary on Regu- A76 FEDERAL RESERVE BOARD PUBLICATIONS lation Z A78 MAPS OF THE FEDERAL RESERVE SYSTEM Joint Federal Reserve and Treasury report on global counterfeiting A80 FEDERAL RESERVE BANKS, BRANCHES, Update of interagency policy statement on inter- AND OFFICES nal auditing Interagency paper on sound practices to strengthen the resilience of the U.S. financial system Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 2002 Steven B. Kamin, of the Board's Division of Inter- deficit in goods and services to rise to $436 billion in national Finance, prepared this article. Faith E. 2002 (table 1). Darling provided research assistance. A swing in the balance on investment income, from a $21 billion surplus in 2001 to a $5 billion After slightly narrowing during the cyclical slow- deficit in 2002, reflected primarily a decline in net down of 2001, the U.S. current account deficit wid- direct investment income. Increases in the profitabilened in 2002, as it had over the previous decade. ity of foreign direct investment in the United States Two-thirds of the increase in the deficit last year was last year helped to boost payments to foreigners attributable to an increase in the deficit for trade in above the abnormally low levels of 2001. Receipts on goods and services. In addition, net investment U.S. direct investment abroad were held back by income receded as receipts from abroad declined continued economic slack and low profits in many more than payments on foreign investments in the foreign economies. The deficit in portfolio income United States. rose very slightly but would have increased consid- Most of the rise in the trade deficit in 2002 was the erably more were it not for the low levels of interest result of an increase in the value of imported goods rates at home and abroad. and services. Imports had declined sharply in the The record $503 billion current account deficit previous year in response to the slowdown in U.S. registered in 2002 was also a record as a share of economic activity, and as activity accelerated in 2002, GDP—4.8 percent (chart 1). The counterpart of this imports reversed much of their earlier decline. deficit was a $474 billion surplus in the financial Although the pace of expansion also began to pick up account balance, an increase of $92 billion over the in the economies of the United States' foreign trading 2001 financial account surplus. The rise in the surpartners last year, the value of U.S. exports declined plus was attributable primarily to stepped-up foreign for the second year in a row, albeit to a much smaller official purchases of U.S. assets; changes in the comextent than in 2001.1 These movements caused the ponents of private capital flows largely offset each other. The statistical discrepancy in the U.S. international accounts also rose. 1. In fact, as discussed below, although the value of exports for An implication of the large U.S. current account 2002 as a whole was below its 2001 level, exports actually rose from deficits in recent years has been that, taken together, the fourth quarter of 2001 to the fourth quarter of 2002. 1. U.S. international transactions, 1998-2002 Billions of dollars except as noted Item 1998 1999 2000 2001 2002 Change, 2001-02 Trade in goods and services, net -167 -262 -379 -358 -436 -77 Goods, net -247 -346 ^52 -427 -484 -57 Services, net 80 84 74 69 49 -20 Investment income, net 13 24 28 21 -5 -26 Compensation of employees, net -5 -6 -6 -6 -6 0 Unilateral current transfers, net -45 -49 -53 -49 -56 -7 Current account balance -204 -293 -393 -503 -110 Official capital, net -27 55 36 0 93 94 Private capital, net 91 210 373 382 381 -1 Financial account balance 64 265 409 382 474 92 Capital account balance 1 -3 1 1 1 0 Statistical discrepancy 139 31 0 11 29 18 MEMO Current account as percent of GDP -2.3 -3.2 -4.2 -3.9 -4.8 -.9' NOTE. Here and in the following tables, components may not sum to totals SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis because of rounding. (BEA), U.S. international transactions accounts. 1. Percentage point change. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

192 Federal Reserve Bulletin • May 2003 1. U.S. external balances, 1970-2002 slowdown in 2001, increases in the prices of oil and other primary commodities, the reversal of the Percent of GDP dollar's appreciating trend, and movements in real returns at home and abroad. U.S. Economic Activity After remaining unchanged during 2001, U.S. real GDP increased 2.9 percent between the fourth quarter of 2001 and the fourth quarter of 2002 (table 2). Economic conditions turned up notably during the first half of the year. Household spending on both personal consumption items and housing remained solid, businesses curtailed their inventory liquidation 1972 1977 1982 1987 1992 1997 2002 and began to raise spending on some types of capital NOTE. The data are annual. SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis equipment, and private employment began to edge (BEA). higher. For the first half of 2002, real GDP grew 3.1 percent at an annual rate. the economies of the rest of world have been running However, the momentum of the recovery dimina current account surplus (see box "The Foreign ished somewhat as the year progressed. Concerns Counterpart to the U.S. Current Account Deficit"). about corporate governance weighed on financial markets, and a rise in international tensions boosted oil prices and exacerbated uncertainties already faced MAJOR ECONOMIC INFLUENCES ON U.S. by businesses about the economic outlook. By mid- INTERNATIONAL TRANSACTIONS summer, stock prices had declined, risk spreads widened, and liquidity eroded in corporate debt markets. Several factors had a significant influence on U.S. These developments, combined with a high degree of international transactions in 2002: the emergence underlying caution on the part of businesses, contribof the U.S. and foreign economies from the cyclical uted to continued weak capital spending. With for- 2. Change in real GDP in the United States and abroad, 1999-2002 Percent, annual rate 2001 2002 AArreeaa 11999999 22000000 22000011 22000022 || HI H2 HI H2 United States 4.3 2.3 .1 2.9 -1.1 1.2 3.1 2.7 Total foreign 4.9 4.2 .1 2.8 -.2 .4 3.6 2.1 Asian emerging markets1 8.6 6.1 1.0 5.5 -.9 2.9 6.9 4.2 China 4.1 8.0 7.5 8.0 8.0 7.1 8.9 7.1 Indonesia 5.3 6.4 1.7 3.8 6.2 -2.6 10.7 -2.7 Korea 13.8 5.1 4.2 7.0 3.3 5.0 8.0 6.1 Malaysia 11.8 6.2 -.6 5.5 -3.3 2.2 6.1 4.9 Philippines 5.1 3.7 3.9 5.8 4.0 3.7 5.6 5.9 Taiwan 5.9 4.5 -1.8 4.1 -6.9 3.5 4.8 3.4 Latin America2 4.4 4.4 -1.5 1.1 -1.5 -1.4 1.8 .5 Argentina -.9 -1.9 -10.3 -4.0 -1.1 -18.6 -10.5 2.9 Brazil 3.5 4.0 -.7 3.4 .0 -1.4 3.5 3.3 Mexico 5.6 4.7 -1.5 2.1 -2.0 -1.0 3.2 .9 Venezuela -4.1 5.6 .9 J|~16.7 2.2 -.4 -17.0 -16.4 39 Canada 5.7 3.5 .8 BQ .4 1.2 5.2 2.6 European Union3 3.7 2.7 .6 RSi 1.1 .1 1.5 1.3 Japan -.5 5.1 -2.4 NOTE. Aggregate measures are weighted by moving bilateral shares in U.S. 3. Member countries are Austria, Belgium, Denmark, Finland, France, exports of merchandise. Annual data are four-quarter changes. Half-yearly data Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, are calculated as Q4/Q2 or Q2/Q4 changes at an annual rate. Sweden, and the United Kingdom. 1. Weighted average of China, Hong Kong, Indonesia, Korea, Malaysia, SOURCE. Various national sources; Federal Reserve seasonal adjustments in Philippines, Singapore, Taiwan, and Thailand. some cases. 2. Weighted average of Argentina, Brazil, Chile, Colombia, Mexico, and Venezuela. Of ob -1.6 -3.2 2.9 2.7 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 2002 193 The Foreign Counterpart to the U.S. Current Account Deficit The counterpart of the current account deficit in the United recorded in the mid-1980s (chart B). Finally, the largest States is an aggregate current account surplus in the rest of single counterpart to the U.S. imbalance is the global statisthe world. Current account balances are influenced by a tical discrepancy, which is the negative of the sum of the variety of factors that differ from country to country, and world's current accounts (chart C). In principle, the world's those of foreign economies exhibit quite diverse move- current accounts should sum to zero, but because of statistiments as the US. current account changes. In the 1980s, cal problems and misreporting of payments and receipts, the during the last large run-up in the U.S. current account statistical discrepancy is generally not zero and can somedeficit, much of the imbalance was matched by current times be quite large. Increases in oil revenues earned by account surpluses in the economies of the European Union countries whose international transactions are not well (EU) and Japan. For example, in 1987, the U.S. current reported, along with rising cross-border holdings of assets account deficit reached $161 billion, or 3.4 percent of GDP, (returns on which also are frequently underreported), may while the EU countries and Japan recorded current account explain some of the growth of the discrepancy in recent surpluses of $28 billion and $85 billion respectively years. (chart A). This state of affairs was broadly consistent with the importance of these two areas in U.S. trade at the time: Together, the EU countries and Japan accounted for about B. Current account balances, United States and Asian 40 percent of U.S. exports and imports. It was also consis- emerging markets, 1975-2002 tent with the especially marked rise in the foreign exchange value of the dollar against the currencies of those countries Billions of dollars in the mid-1980s. The most recent rise in the US. current account deficit has been associated with a distribution of counterpart surpluses abroad that differs somewhat from the 1980s pattern. As in the mid-1980s, Japan is running a surplus, although at about $110 billion last year it is only moderately larger than in 1987, even as the U.S. deficit is currently about three times as large as it was then. The European Union's surplus last year was only about $50 billion, a small counterpart to the U.S. deficit. Conversely, the Asian emerging-market economies, whose share of US. imports has risen from about 16 percent in the mid-1980s to about 24 percent more recently, ran a current account surplus of nearly $120 bil- 1977 1982 1987 1992 1997 2002 lion in 2002, a considerably larger balance than they NOTE. The data are annual. The Asian emerging markets are China, Hong Kong, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan, and Thailand. For 2002, balances for some Asian economies are estimates. A. Current account balances, United States, Japan, and SOURCE. BEA; IMF, World Economic Outlook database. the European Union, 1975-2002 Billions of dollars C. U.S. current account balance and aggregate statistical discrepancy for all countries, 1975-2002 Billions of dollars 200 1977 1982 1987 1992 1997 2002 NOTE. The data are annual. For membership of the European Union, see note 3 of table 2 in the main text. The European Union balance is calculated as the sum of the balances of individual European Union 1977 1982 1987 1992 1997 2002 countries. SOURCE. BEA; International Monetary Fund (IMF), World Economic NOTE. The data are annual. Outlook database. SOURCE. BEA; IMF, World Economic Outlook database. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

194 Federal Reserve Bulletin • May 2003 eign demand for U.S. products weakening as well, In the emerging-market economies last year, ecomanufacturers trimmed production during the fall. nomic performance diverged considerably between Employment in the private sector declined again, and Asia and Mexico, on the one hand, and the rest of the unemployment rate moved up, reaching 6 percent Latin America, on the other. The Asian emergingin December. For the second half of 2002, the growth market economies generally performed well in 2002; of real GDP declined to 2.7 percent at an annual rate, they were led, as in previous years, by China, where and for the fourth quarter it was only 1.4 percent. real GDP again expanded more than 7 percent. Of the other emerging Asian economies, Korea recorded the strongest growth. The economy grew more rapidly in Foreign Economic Activity the first half of the year, when global demand for high-tech products rose most quickly and domestic After a pronounced slowdown in 2001, economic demand (especially consumption) surged; growth activity accelerated in the economies of U.S. trading slowed in the second half of the year as global partners in 2002 as it did in the United States. Higher high-tech demand weakened and tensions over growth abroad reflected a number of factors, includ- North Korea intensified. Other economies in the ing monetary and fiscal stimulus, reductions in the region, including some of the larger Southeast Asian pace of inventory liquidation, and the effect of economies and Taiwan, also exhibited strong perforincreasing economic activity in the United States. mance in the first half of 2002 followed by some The pickup in growth abroad, as in the United States, weakening of growth in the second. was concentrated in the first half of last year, as a One of the few bright spots in Latin America last strong rally in the high-tech exporting economies of year was the Mexican economy—boosted by the U.S. emerging-market Asia was joined by robust growth recovery, its growth was moderate for the year as a in Canada and, to a lesser extent, Mexico. Growth whole despite some late slowing. Conversely, much in other regions—including the euro area and South of South America was beset by adverse economic, America—remained subdued. As the U.S. economy financial, and political developments. In Brazil, ecodecelerated in the second half, the pace of recovery nomic activity managed to expand in 2002, despite slowed in Asia and Canada, while performance considerable financial volatility surrounding the remained lackluster in much of the rest of the world. October presidential election. Argentine GDP con- The Canadian economy registered the strongest tracted further in 2002 after declining 10 percent in performance among the major foreign economies last 2001, although financial and economic conditions year despite some slowing in the second half. Its appeared to stabilize in the second half of the year. strength reflected robust growth of consumption and Output plunged in Venezuela in the midst of extreme residential construction as well as an end to inventory economic and political turmoil, including a coup runoffs early in the year. As a net oil exporter, Canada attempt in April and a national strike declared in has also benefited from the high level of oil prices, December. and because it is less dependent on high-tech production than is the United States, it likewise suffered less from the on-going weakness in that sector. Primary-Commodity Prices The Japanese economy grew during 2002, although the pace of growth was barely enough to offset the Oil prices began 2002 at less than $20 per barrel for decline in output that took place in 2001. Japanese West Texas intermediate (chart 2), having declined growth was driven mainly by exports, with smaller considerably in the previous year amidst widespread contributions coming from increased consumption economic weakness. Much of the decline occurred and a slower pace of inventory reduction. However, after the events of September 11, 2001, in response to private investment spending and conditions in labor a fall in jet fuel consumption, weaker economic activmarkets remained weak, and deflation continued. ity, and reassurances of stable supply from Saudi Economic performance in the euro area was quite Arabia. However, oil prices began rising again in sluggish last year. Although exports were up, growth February and March of 2002 in response to both in consumption was modest, and private investment improving global economic activity and a productiondeclined. Economic weakness was especially pro- limiting agreement among OPEC and some major nounced in some of the larger countries—Germany, non-OPEC producers. As a consequence of this Italy, and, to a lesser extent, France—while growth agreement, actual production declined, albeit not to in some of the smaller euro-area countries was more the extent implied by the agreed limits. Heightened robust. tensions in the Middle East, along with severe politi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 2002 195 2. Oil prices, 1986-2002 Coast, which produces a substantial fraction of the world's cocoa. Production restraint by copper produc- Dollars per barrel ers led to a slight gain in the price of that commodity. Finally, the price of gold shot up more than 20 percent last year, most likely in response to heightened global tensions. U.S. Price Competitiveness Changes in the price competitiveness of U.S. export and import-competing industries last year were primarily the result of changes in the foreign exchange value of the dollar, as well as relative movements in 1986 1990 1994 1998 2002 inflation rates at home and abroad. The price-adjusted broad dollar index is a measure of the foreign NOTE. The data are monthly. SOURCE. Wall Street Journal; BEA. exchange value of the dollar in terms of the currencies of the United States' principal trading partners, cal turmoil in Venezuela, also put upward pressure on adjusted for relative movements in U.S. and foreign oil prices. A strike in Venezuela, which began on inflation rates. Having appreciated substantially since December 2, 2002, caused already meager crude oil the mid-1990s, the broad real dollar index extended inventories in the United States to fall to levels not its mild upward trend into the early part of 2002 seen since the 1970s; the reduced inventories exacer- (chart 4). However, the dollar weakened sharply in bated the effect of the reduced production on oil late spring and early summer amid deepening conprices. cerns about U.S. corporate governance and profitabil- Prices of nonfuel primary commodities (chart 3) ity. Around that time, market analysts also appeared also picked up somewhat last year after falling to become more worried about the growing U.S. steadily throughout much of 2001. Most of the current account deficit and its potential negative increase in prices reflected decreases in supply. influence on the future value of the dollar. After Adverse weather in many parts of the world reduced strengthening a bit around midyear as growth prosharvests and sent prices of several agricultural pects for other major economies appeared to dim, the commodities—wheat, soybeans, and cotton— broad real dollar index dropped again late in the year soaring, albeit from very depressed levels. Also, as geopolitical tensions intensified; it registered a cocoa prices rose because of a civil war in Ivory 13A percent decline for the year as a whole. 3. Price of world nonfuel primary commodities, 1993-2002 4. Foreign exchange value of the U.S. dollar, 1990-2002 1995 = 100 1996= 100 — — 105 — — 100 — — 95 — — 90 — — 85 — 1—- 80 — \ R — 75 — ^ — 70 — 65 1 1 1 1 1 1 1 1 1 1 1 1 1 1994 1996 1998 2000 2002 1990 1992 1994 1996 1998 2000 2002 NOTE. The data are monthly. The price shown is a weighted average of NOTE. The data are monthly. Each data series is a price-adjusted index of forty-five prices. foreign currency units per dollar. The broad index covers a large group of SOURCE. IMF, International Financial Statistics, index of nonfuel primary important U.S. trading partners. The major currencies index covers the commodity prices in dollars. currencies that are widely traded in international financial markets. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

196 Federal Reserve Bulletin • May 2003 In 2002, the dollar depreciated against all of the DEVELOPMENTS IN U.S. TRADE IN GOODS AND major currencies—those currencies that trade widely SERVICES in international financial markets—but the magnitude of these declines varied. The dollar showed particular The U.S. trade deficit in goods and services, having weakness against the euro; the dollar's decline of narrowed significantly in 2001, widened in 2002 and 16 percent more than reversed a substantial portion thereby resumed its trend of the past decade (table 3). of its rise against the euro in the preceding couple of The $77 billion expansion of the trade deficit last years. The dollar declined about 10 percent against year reflected a $51 billion rise in the nominal value the yen last year. Relative to the Canadian dollar, of imports and a $26 billion reduction—the second however, the U.S. dollar declined only 1 percent on annual decline—in exports. balance. Movements in the annual totals of exports and Even as the dollar declined 7 percent on a price- imports from 2001 to 2002, however, obscure imporadjusted basis against the major currencies last tant movements of these trade figures over the course year, it appreciated 41/2 percent against a weighted of last year. Nominal exports of goods and services average of the currencies of other U.S. trading part- hit their recent low in the fourth quarter of 2001 and ners. This appreciation occurred despite a decline then recovered substantially in the second and third in the dollar against the currencies of Asian quarters of 2002 before reversing some of these gains emerging-market economies and is accounted for in the fourth quarter (chart 5). Hence, while the almost entirely by a rise of the dollar against the average value of exports in 2002 was below its 2001 Mexican peso. level, owing to its very depressed level at the start of 3. U.S. international trade in goods and services, 2000-2002 Billions of dollars except as noted Percent change, Change 2001-02 IItteemm 22000000 22000011 22000022 2000-01 2001-02 Year over year Q4 to Q4 Balance (exports less imports) -379 -358 -436 20 -77 Exports 1,064 998 972 -66 -26 -3 5 Services 292 279 289 -13 10 4 14 Goods 772 719 683 -53 -36 -5 2 Capital equipment 357 322 291 -35 -31 -10 -1 Aircraft and parts 48 53 51 5 -2 -4 -1 Computer equipment1 56 48 39 -8 -9 -19 -7 Semiconductors 60 45 42 -15 -3 -6 5 Telecommunications equipment 31 28 22 -3 -6 -20 -13 Other machinery and equipment 162 149 137 -13 -12 -8 0 Industrial supplies 173 160 157 -12 -3 -2 8 Automotive vehicles and parts 80 75 78 -5 3 4 4 Consumer goods 89 88 84 -1 -4 -4 1 Foods, feeds, and beverages 48 49 50 2 0 0 2 Other 25 24 23 -1 -1 -5 3 Imports 1,443 1,356 1,407 -87 51 4 14 Services 219 210 240 -8 30 14 19 Goods 1,224 1,146 1,167 -78 21 2 13 Oil 120 104 104 -17 0 0 46 Non-oil 1,104 1,042 1,063 -62 21 2 10 Capital equipment 347 298 284 -49 -14 -5 5 Aircraft and parts 26 31 26 5 -6 -18 -17 Computer equipment1 90 74 75 -16 1 2 8 Semiconductors 48 30 26 -18 -4 -14 6 Telecommunications equipment ... 33 25 23 -8 -1 -6 18 Other machinery and equipment ... 150 138 134 -12 -4 -3 6 Industrial supplies 182 173 166 -9 -7 -4 12 Automotive vehicles and parts 196 190 204 -6 14 7 11 Consumer goods 282 284 308 2 23 8 16 Foods, feeds, and beverages 46 47 50 1 3 7 10 Other 51 51 52 -1 1 2 1 1. Computers, accessories, peripherals, and parts. SOURCE. BEA, U.S. international transactions accounts. . . . Not applicable. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 2002 197 5. U.S. imports and exports, 2000-2002 Measured both in terms of nominal values (table 3) and quantities (table 4), imports rose faster than exports between the fourth quarter of 2001 and the fourth quarter of 2002. Imports grew faster than exports despite the fact that real GDP here and abroad grew at about the same rate last year. This development is consistent, however, with a historical pattern in which the responsiveness of U.S. imports to income in the United States has been greater than the responsiveness of U.S. exports to income in the rest of the world. Moreover, because capital goods constitute a greater fraction of U.S. exports than they do of U.S. imports, the weakness in investment spending both here and abroad last year weighed more heavily I I I I I I I I I I I I L 2000 2001 2002 on exports than on imports. Finally, although the NOTE. The data are quarterly and seasonally adjusted. dollar depreciated last year, the lagged effects of its SOURCE. BEA. earlier appreciation continued to support imports while restraining exports. the year, these receipts actually grew about 5 percent between the fourth quarter of 2001 and the fourth quarter of 2002 (table 3). Similarly, nominal imports Exports of goods and services rose much more rapidly on a Q4-to-Q4 basis (14 percent) than they did on a year- The 5 percent rise in the nominal value of exported over-year basis (4 percent). goods and services between the fourth quarter of 2001 and the fourth quarter of 2002 reflects much 4. Change in the quantity of U.S. exports and imports of goods and services, 1999-2002 stronger growth in exports of services than of goods. Percent change from fourth quarter to fourth quarter Services receipts rose 14 percent over this period after having declined sharply in 2001; much of the Item 1999 2000 2001 2002 rebound was in receipts from foreign travelers in the Exports 5 7 -11 4 United States, which recovered somewhat in 2002 Services 3 5 -9 11 following a plunge immediately after the Septem- Goods 6 8 -12 1 ber 11 terrorist attacks. Receipts from foreigners for Capital equipment1 7 13 -21 -1 other services moved up smartly as well. Aircraft and parts -17 -14 -4 -3 Computer equipment2 13 23 -24 -2 In contrast, nominal exports of goods rose only Semiconductors 34 27 -35 8 Other machinery and equipment ... 8 14 -20 -2 2 percent in 2002 (Q4 to Q4); they were held back by a 1 percent decline in export sales of capital goods. Industrial supplies 7 7 -7 3 Automotive vehicles and pans 3 1 -5 3 This slowing likely reflected the pronounced weak- Consumer goods 5 6 -6 2 Foods, feeds, and beverages 3 3 5 -6 ness of investment spending during the recent global Other -1 6 -6 5 slowdown, even as consumption spending held up Imports 12 11 -8 10 more strongly. Especially large percentage declines Services ....... ii.V.'.yj&vit, fj,... 6 11 -9 12 in exports of computer and telecommunication equip- Goods 13 11 -8 10 ment were consistent with continued weakness in the Oil -3 13 0 4 high-tech sector (as well as trend declines in com- Non-oi! 15 11 -9 10 puter prices), while the slight rise in exports of semi- Capital equipment1 19 17 -21 7 Aircraft and parts -2 22 3 -20 conductors reversed very little of their pronounced Computer equipment2 26 14 -14 14 decline in 2001. Semiconductors 34 23 -51 9 Other machinery and equipment . 15 17 -21 10 Outside of the capital goods sector, exports of l i ^ M t r t T H T f iT BBSS! SIPS Industrial supplies 8 -5 8 industrial supplies grew substantially over the course Automotive vehicles and parts 14 2 -2 10 of 2002, but most of this increase reflected higher Consumer goods I7H 16 -5 17 Foods, feeds, and beverages 11 6 5 6 prices rather than a sharp pick-up in quantities. Other 5 16 o 5 Exports of automotive products also showed some NOTE. Quantities are measured in chained (1996) dollars. strength; the increase was more than accounted for 1 Data for telecommunications equipment not separately calculated. 2. Computers, accessories, peripherals, and parts. by higher shipments of vehicles and parts to Canada. SOURCE. BEA, national income and product accounts; Federal Reserve The relatively flat dollar-value of sales of food, feed, Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

198 Federal Reserve Bulletin • May 2003 5. Distribution of U.S. exports of goods, 6. Change in the prices of U.S. exports and imports by selected regions and countries, 2000-2002 of goods and services, 1999-2002 Billions of dollars except as noted Percent change from fourth quarter to fourth quarter 2001-02 Item 1999 2000 2001 2002 DDeessttiinnaattiioonn 22000000 22000011 22000022 Percent Exports 0 1 -2 2 Change change, Q4 to Q4 Services 1 2 -2 2 Goods 0 1 -2 1 AH 772 719 683 -36.2 2.0 Capital equipment -1 0 -1 -1 Western Europe 179 171 154 -17.8 -1.8 Aircraft and parts 2 5 5 3 Computer equipment -7 -A -4 -5 Canada 179 163 161 -2.4 6.2 Semiconductors -4 -5 -6 -3 Other machinery and equipment 0 1 0 0 Latin America 170 159 148 -10.6 -.6 Mexico 111 101 97 -3.8 1.1 Industrial supplies 4 4 -7 5 Other 59 58 51 -6.8 -3.6 Automotive vehicles and parts 1 1 0 1 Consumer goods 0 0 0 -1 Asia 194 173 167 -5.6 3.3 Foods, feeds, and beverages -4 0 -1 7 Japan 63 56 50 -6.2 -2.3 Other 1 1 -2 2 Emerging markets1 .. 130 117 118 .6 5.8 Imports 3 3 -5 4 Other 50 52 52 .3 4.8 Services 0 3 3 7 1. China, Hong Kong, Indonesia, Korea, Malaysia, Philippines, Singapore, 4 3 -7 3 Taiwan, and Thailand. SOURCE. BEA, U.S. international transactions accounts. Oil 94 31 -36 40 Non-oil -1 1 -4 0 Capital equipment -4 -2 -3 -2 and beverages abroad reflected the offsetting effects Aircraft and parts 2 4 3 2 Computer equipment -11 -5 -12 -4 of a sharp contraction in exported quantities of these Semiconductors -3 -2 -3 -3 Other machinery and equipment ... -1 -1 -1 -2 products, in part resulting from poor harvests, and corresponding increases in their prices. Industrial supplies 4 11 -13 4 Automotive vehicles and parts 1 1 0 0 The distribution of U.S. sales of goods to different Consumer goods -1 -1 -1 -1 Foods, feeds, and beverages -3 -2 -3 4 parts of the world in 2002 (table 5) was substantially Other 0 1 -2 1 influenced by the economic performance of our trad- NOTE. Price indexes are chain-weighted. See also notes to table 4. ing partners. Exports of goods to those regions showing the strongest performance last year—Canada, the After declining in 2001 in response to the slow- Asian emerging-market economies, and Mexico— down in global growth, export prices rose 2 percent moved up on a Q4-to-Q4 basis, while sales to weaker last year (Q4 to Q4, table 6); they were boosted by economies—those of western Europe, Japan, and higher global growth, an associated firming of com- South America—declined. The rise over the course modity prices (including petroleum prices), and perof 2002 in sales to Canada, which account for haps some effects from the weakening dollar. Sernearly a quarter of U.S. goods exports, was primarily vices prices recovered as demand for travel moved accounted for by automotive products, industrial sup- back up from lows reached after the events of plies, and consumer goods and was driven by strong September 11, 2001. Weather-related supply disruphousehold spending. Capital goods, which represent tions drove up prices of foods, feeds, and beverages the largest end-use category of sales to Canada, 7 percent, while higher costs of petroleum products, remained about flat. Exports to the Asian emerging- natural gas, lumber, and steel led to a 5 percent rise market economies were boosted primarily by higher in prices of industrial supplies. Prices of exported sales of industrial supplies (especially chemicals) capital equipment edged down again last year and and capital goods. In both western Europe and reflected trend declines in the prices of computers Japan, where economic activity has continued to be and semiconductors. restrained by weak business investment, mild declines in U.S. goods exports resulted almost entirely from reductions in sales of capital goods. Imports The quantity of exports rose 4 percent in 2002 (Q4 to Q4) after declining sharply the previous year The value of imports rose 14 percent from the fourth (table 4). As with movements in their value, the quarter of 2001 to the fourth quarter of 2002 (table 3), quantity of exported services rose considerably faster though this gain in part reflects a bounce-back from than that of goods. Exports of all major categories the depressed levels reached in the aftermath of rose except for foods, feeds, and beverages, which September 11, 2001. Services, rebounding especially declined markedly, and capital equipment. quickly, rose 19 percent over the same period. As on Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 2002 199 the exports side, a surge in travel-related spending by the demand for goods tends to fluctuate over the U.S. residents abroad following the lows reached course of the business cycle more than does the after September 11, 2001, accounted for much of demand for services and hence more than does GDP this increase, although other types of services rose as a whole; therefore, non-oil goods imports are also as well. Imports of goods also rose briskly over the likely to fluctuate more widely than total GDP. To course of last year, with increases on a Q4-to-Q4 illustrate, the quantity of non-oil imports declined basis registered for both the oil and non-oil 9 percent in 2001 (Q4 to Q4), when U.S. activity had categories. slowed but did not decline; non-oil imports then rose 10 percent in 2002, when U.S. growth picked up to only about 3 percent.2 Third, as noted earlier, over Oil Imports long periods of time, U.S. imports have tended to grow more rapidly than U.S. GDP (even as exports The value of oil imports rose 46 percent from the have grown more in line with the GDP of U.S. fourth quarter of 2001 to the fourth quarter of 2002 trading partners). Finally, imports were likely buoyed (table 3). This sharp rise primarily reflected a 40 per- by the value of the dollar, which remained quite cent rebound in the price of imported oil last year strong by historical standards, notwithstanding some from its low level at the end of 2001. Additionally, declines over the course of the year. the pickup in U.S. economic growth in 2002 led Prices of non-oil imports were flat last year after to a small rise in the quantity of oil imports on a falling 4 percent in 2001 (table 6). Higher commodity Q4-to-Q4 basis; the quantity of oil imports was also prices, as well as the effects of the fall in the dollar boosted by some bounce-back from unusually later in the year, led to notable increases in the prices depressed levels immediately after September 11, of imported industrial supplies and foods, feeds, and 2001, when travel fell off sharply. With domestic oil beverages. However, prices of computers and semiconsumption last year exceeding the sum of imported conductors extended their persistent declines, while and domestically produced oil, oil inventories still-weak demand in global manufacturing likely declined. contributed to further declines in the prices of other machinery and equipment as well as consumer goods. A brisk 7 percent rise in services prices last year Non-oil Imports probably reflected the decline in the dollar. The quantity of non-oil imports rose 10 percent in 2002 (Q4 to Q4, table 4), reversing a decline of DEVELOPMENTS IN THE NONTRADE CURRENT similar magnitude in the previous year. Reflecting the ACCOUNT consumer-led nature of U.S. real GDP growth last year, increases were led by double-digit gains in real The major components of the current account other imports of automotive products and consumer goods. than trade in goods and services are investment Imports of industrial supplies and capital equipment income and unilateral transfers. rose more moderately, with the latter being held back by a 20 percent decline in imports of aircraft and parts, which are quite volatile. Imports of both com- Investment Income puter equipment and semiconductors bounced back in 2002 after sharp declines the previous year, but Net investment income is the difference between the increases in the larger "Other machinery and equip- income that U.S. residents earn on their holdings of ment" category were more moderate and were well foreign assets (receipts) and the income that foreignbelow the pace of the previous year's decline. ers earn on their holdings of U.S. assets (payments). Several factors contributed to the substantial If the rates of return on both of these holdings were growth in the quantity of non-oil imports last year, equal, then movements in net investment income which considerably outpaced the rise in U.S. GDP. First, as noted above, imports were unusually depressed in the fourth quarter of 2001, so some of 2. Analogously, the quantity of U.S. goods exports declined 12 percent from the fourth quarter of 2000 to the fourth quarter of 2001, the subsequent growth reflected a return to more when foreign growth declined to about zero. With foreign growth normal levels. Second, U.S. non-oil imports, and trad- having recovered to nearly 3 percent in 2002, however, it is not clear able goods in general, are particularly cyclically sen- why the growth of real goods exports rose only to 1 percent. This slow growth reflected an anomalous decline in December that was partially sitive. This sensitivity may result from the fact that reversed in January 2003. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

200 Federal Reserve Bulletin • May 2003 6. U.S. net international investment: 7. U.S. direct investment abroad: Position and income, 1980-2002 Position and receipts, 1980-2002 Billions of dollars Billions of dollars Billions of dollars Billions of dollars Net income 1,500 — 150 / Receipts ' ' • l i i i n i i in 500 — — 50 1,200 — 120 1,000 — 900 — 90 W'" i Position 1,500 — 600 — 60 2,000 300 — 30 I I I I II I I 1 I I I I II I I I I I II I I I I Lil milium 1982 1986 1990 1994 1998 2002 1982 1986 1990 1994 1998 2002 NOTE. The data are annual. The net position is the average of the year-end NOTE. The data are annual. The position is the average of the year-end positions for the current and previous years. The year-end position for 2002 current-cost measures for the current and previous years. The year-end was constructed by adding the recorded portfolio investment flows during position for 2002 was constructed by adding the recorded direct investment 2002 to the recorded year-end position for 2001. The net position excludes capital flows and current-cost adjustment during 2002 to the recorded U.S. holdings of gold. year-end position for 2001. SOURCE. BEA; Federal Reserve Board. SOURCE. BEA; Federal Reserve Board. would exactly mirror movements in the net interna- direct investment in the United States—declined tional investment position, that is, the difference $25 billion in 2002, to $78 billion (table 7). A small between U.S. holdings of foreign assets and foreign increase in direct investment receipts was outweighed holdings of U.S. assets. The net international invest- by a much larger rise in payments last year. ment position turned negative in 1986 and has The $2 billion pickup in receipts on U.S. direct declined progressively further since then as large net investment abroad last year was relatively meager, financial inflows have financed the United States' considering that the U.S. gross direct investment posicurrent account deficits (chart 6). Even as foreign tion abroad rose roughly $100 billion (chart 7) and acquisition of U.S. assets has substantially outpaced that total foreign growth rebounded after stagnating U.S. acquisition of foreign assets, however, net in 2001. However, profits are likely to be related investment income remained positive until 2002 more to the level of capacity utilization than to the (table 7), as rates of return on U.S. holdings abroad— growth of real GDP as such. Foreign growth picked primarily through direct investments—have exceeded up last year but probably not enough to substantially returns on foreign holdings in the United States. increase resource utilization and profits. Moreover, more than half of U.S. direct investment is in Europe, where growth remained low relative to that in the Direct Investment Income United States or other U.S. trading partners. All of Net direct investment income—receipts from U.S. these factors likely held back the growth of receipts direct investment abroad less payments on foreign on U.S. direct investment abroad last year. 7. U.S. international investment: Receipts and payments, 1998-2002 Billions of dollars Change, Item 1998 1999 2000 2001 2002 2001-02 Net investment income 13 24 28 21 -5 -26 Direct investment Net income 66 75 89 103 78 -25 Receipts 104 128 150 126 128 2 Payments 38 53 61 23 50 27 Portfolio investment Net income -53 -51 -61 -82 -83 -1 Receipts 153 160 201 155 114 -41 Payments 206 211 262 237 197 -40 SOURCE. BEA, U.S. international transactions accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 2002 201 8. Foreign direct investment in the United States: 9. Net portfolio investment: Position and payments, 1980-2002 Position and income, 1980-2002 Billions of dollars Billions of dollars Billions of dollars Billions of dollars ^UlJilJlJM 300 — 30 61)0 — — 60 Net position -1 900 — 90 1,200 — Net income 1 I 1 I M I I I I I I 1 I I 1982 1986 1990 1994 1998 2002 NOTE. See notes to chart 7. NOTE. The data are annual. The net position is the Federal Reserve Board's estimate of the average position during the year. Through 2001 these estimates are based on quarterly financial flows and year-end position In contrast to receipts, payments rose a substantial estimates published by the BEA. For 2002, the average is based on year-end 2001 position data and quarterly financial flows during 2002. The net $27 billion last year, bouncing back after a $38 bil- position excludes U.S. gold holdings and foreign holdings of U.S. currency. lion decline in 2001. A small increase in foreign SOURCE. BEA; Federal Reserve Board. direct investment holdings in the United States to net debtor, and it followed the general contour of (chart 8) explains some of the increase in payments. the net investment position in subsequent years. More More importantly, increases in the profitability of recently, however, declines in interest rates have foreign investments in the U.S. last year followed tended to reduce both payments and receipts, thereby abnormally low levels in 2001 and helped to boost leading the deficit in portfolio income to widen more payments. The recovery in these profits was wideslowly than it would have otherwise. This effect was spread, but the industries that fell most sharply in particularly pronounced last year, when the negative 2001—manufacturing and wholesale trade—showed net income balance widened only $1 billion, to the largest growth in 2002. $83 billion. Portfolio Investment Income Unilateral Transfers Portfolio receipts represent the dividend and interest Unilateral transfers include government grant and income that U.S. residents receive on their holdings pension payments as well as private transfers to and of foreign financial assets, whereas portfolio payments represent the dividends and interest that for- 10. Rate of return on U.S. portfolio investments, eigners receive on their holdings of U.S. financial 1980-2002 assets. The Bureau of Economic Analysis (BEA) estimates these payments and receipts by applying estimates of the interest or dividend-payout rates for various assets to estimates of the holdings of those assets. Portfolio investment income does not include capital gains or losses associated with changes in asset prices. Movements in net portfolio income—receipts minus payments—have tracked movements in the U.S. net portfolio investment position fairly closely (chart 9) because rates of return on portfolio investments in the United States and abroad are quite similar (chart 10). Net portfolio income turned nega- I I I I I 1 I I I I I tive in 1985, the same year that the net portfolio 1982 1986 1990 1994 1998 2002 investment position moved from that of net creditor NOTE. The data are annual. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

202 Federal Reserve Bulletin • May 2003 from foreigners. In 2002, the deficit on net unilateral have been driven by a flight to safety among investransfers widened to $56 billion. tors. Private foreign direct investment in the United States also fell off substantially, from $131 billion in 2001 to $30 billion in 2002. FINANCIAL AND CAPITAL ACCOUNT The decline in the demand for claims on the U.S. TRANSACTIONS private sector last year may have been associated The counterpart of the increased U.S. current account with increased concerns about future profitability and deficit last year was a rise in net financial inflows of returns; these concerns were perhaps prompted by foreign savings. In recent years, net private capital the uneven recovery of the U.S. economy and the inflows have accounted for most of the overall net continued poor performance of equity markets. Simiinflows required to finance the current account defi- lar concerns may have prompted an analogous pullcit, and 2002 was no exception. However, even as the back of U.S. investments abroad. Private U.S. net current account deficit rose to a record $503 billion purchases of foreign securities plummeted from last year, net private capital inflows remained about $95 billion in 2001 to about zero last year. This drop unchanged at $381 billion, while net official inflows reflected net sales of foreign bonds by U.S. private jumped to $93 billion (table 8). investors for the second consecutive year as well as A prominent theme in last year's capital flows was sharply reduced purchases of foreign stocks. U.S. the reduced demand by private foreign entities for direct investment abroad held up, but that was due U.S. corporate assets. Private foreign net purchases of to U.S. corporations not repatriating earnings and all U.S. securities declined $62 billion in 2002. Net extending more credit to their foreign affiliates; new purchases of U.S. corporate and other bonds and of equity capital channeled toward direct investment corporate stocks fell $41 billion and $63 billion abroad fell from $50 billion in 2001 to $27 billion respectively. These declines were only partially offset last year. by a positive $43 billion swing of flows into U.S. With private foreign purchases of U.S. assets fall- Treasury and agency securities; these flows appear to ing about as much as private U.S. purchases of 8. Composition of U.S. capital flows, 1997-2002 Billions of dollars 2002 -- 11999977 11999988 11999999 22000000 22000011 22000022 HI H2 Current account balance -128 -204 -293 -410 -393 -503 -240 -263 Capital account balance 0 1 -3 1 1 1 0 0 Financial account balance 219 64 265 409 382 474 160 314 Official capital, net 18 -27 55 36 0 93 54 40 Foreign official assets in the United States 19 -20 44 38 5 97 55 42 U.S. official reserve assets -1 -7 9 0 -5 -4 -1 -2 Other U.S. government assets 0 0 3 -1 0 0 0 0 Private capital, net 201 91 210 373 382 381 107 274 Net inflows reported by U.S. banking offices 8 4 -22 -32 -18 92 -47 138 Securities transactions, net 173 49 126 251 305 340 155 185 Private foreign net purchases (+) of U.S. securities 292 185 254 378 400 338 163 175 Treasury securities 130 29 -44 -77 -8 53 -12 66 Agency bonds 26 5 43 96 86 68 35 33 Corporate and other bonds 67 106 143 166 202 161 104 57 Corporate stocks 69 46 113 192 119 56 36 19 U.S. net purchases (-) of foreign securities -119 -136 -128 -128 -95 2 -8 10 Bonds -61 -35 -14 -24 12 21 11 10 Stocks -58 -101 -114 -104 -107 -19 -18 0 Stock swaps -3 -96 -123 -80 -45 -3 -2 -1 Direct investment, net 1 36 101 129 3 -93 -50 —43 Foreign direct investment in the United States 106 179 289 308 131 30 14 16 U.S. direct investment abroad -105 -143 -189 -178 -128 -124 -64 -59 Foreign holdings of U.S. currency 25 ,7 22 1 24 22 12 10 Other -5 -15 -17 23 68 21 37 -16 Statistical discrepancy -91 139 31 0 11 29 79 -51 SOURCE. BEA, U.S. international transactions accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 2002 203 foreign assets, private net capital flows were about PROSPECTS FOR 2003 unchanged last year, even as the current account deficit rose $110 billion. Most of this shortfall in Forecasters generally expect that rates of economic private financing was made up by a substantial rise in growth will pick up both in the United States and in official net capital inflows to $93 billion, with nearly its major trading partners later this year and in 2004. all of the remaining shortfall showing up in the Assuming this acceleration of activity takes place as statistical discrepancy. The higher pace of these expected, the U.S. external deficit likely will widen as acquisitions last year may have reflected the desire of U.S. imports of goods and services rise by a greater some foreign authorities to restrain the rise in their amount than U.S. exports of goods and services. The currencies' value against the dollar by intervening in decline in the dollar that has been observed from foreign exchange markets. This explanation is sug- early 2002 to date is unlikely to restrain the widening gested by the concentration of foreign official inflows of the deficit by much, as it has been relatively in the second and fourth quarters of last year, when small—about 5 percent for the broad real dollar the foreign exchange value of the dollar registered its index—and its effects will be spread over a number largest declines. of years. In fact, the initial effect of a depreciation of Capital account transactions, which consist mainly the dollar is generally to raise the U.S. current account of debt forgiveness and wealth transfers associated deficit temporarily, since it raises import prices, with immigration, netted to $1 billion last year, the and hence the value of imports, more rapidly than it same amount as in the previous two years. stimulates sales of exports. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

204 Announcements FEDERAL OPEN MARKET COMMITTEE replacing an accepted credit card with one or more DIRECTIVE cards. In addition, the commentary revisions discuss the The Federal Open Market Committee decided on disclosure of private mortgage insurance premiums March 18, 2003, to keep its target for the federal and the selection of Treasury security yields for deterfunds rate unchanged at 1 VA percent. mining whether a mortgage loan is covered by provi- While incoming economic data since the January sions in Regulation Z that implement the Home Ownmeeting have been mixed, recent labor market indi- ership and Equity Protection Act. cators have proven disappointing. However, the hesi- At the time the proposed commentary revisions tancy of the economic expansion appears to owe were published in December 2002, the Board also importantly to oil price premiums and other aspects requested comment and information from the pubof geopolitical uncertainties. The Committee believes lic about the design and operation of overdraft or that as those uncertainties lift, as most analysts "bounced check" protection services. Board staff is expect, the accommodative stance of monetary pol- continuing to gather information on these services icy, coupled with ongoing growth in productivity, and will determine at a later date whether additional will provide support to economic activity sufficient to guidance for financial institutions is warranted under engender an improving economic climate over time. Regulation Z or other laws. In light of the unusually large uncertainties cloud- The revisions are effective April 1, 2003. The date ing the geopolitical situation in the short run and their for mandatory compliance is October 1, 2003. apparent effects on economic decisionmaking, the Committee does not believe it can usefully characterize the current balance of risks with respect to the JOINT FEDERAL RESERVE AND TREASURY prospects for its long-run goals of price stability and REPORT ON GLOBAL COUNTERFEITING sustainable economic growth. Rather, the Committee decided to refrain from making that determination The Federal Reserve Board and the Treasury Departuntil some of those uncertainties abate. In the current ment on March 14, 2003, issued a joint report to circumstances, heightened surveillance is particularly Congress stating that procedures to combat internainformative. tional counterfeiting of U.S. currency are becoming Voting for the FOMC monetary policy action were more effective. Alan Greenspan, Chairman; William J. McDonough, U.S. dollars are held and widely used around the Vice Chairman; Ben S. Bernanke; Susan S. Bies; world, and the popularity and ubiquity of the dollar J. Alfred Broaddus, Jr.; Roger W. Ferguson, Jr.; make it a potential target for counterfeiters. The Edward M. Gramlich; Jack Guynn; Donald L. Kohn; incidence of counterfeiting has declined markedly Michael H. Moskow; Mark W. Olson; and Robert T. with the introduction of the 1996-series currency. An Parry. upcoming new series currency, to be introduced later this year, will further enhance the security of U.S. banknotes. The report, The Use and Counterfeiting of United REVISIONS TO OFFICIAL STAFF COMMENTARY States Currency Abroad, Part II, mandated by the ON REGULATION Z Congress as part of the Anti-Terrorism and Effective Death Penalty Act of 1996, represents a comprehen- The Federal Reserve Board on March 28, 2003, sive review of the international use and counterfeitissued revisions to the official staff commentary that ing of U.S. currency. The report details how the applies and interprets the requirements of Regula- combined efforts of the Treasury, United States tion Z, which implements the Truth in Lending Act. Secret Service, and Federal Reserve have held the The commentary revisions discuss the status of incidence of counterfeiting at relatively low nominal certain credit-card-related fees and the rules for levels. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

205 "We continue to improve our currency and resist According to the report, advances in reprographic efforts by counterfeiters the world over to produce and computer technology will continue to necessitate and pass counterfeit U.S. notes," said Treasury Sec- new and innovative responses to maintain the overall retary John W. Snow. "Only by such efforts can we security of U.S. currency. These efforts will include guarantee that our currency will continue to remain a further security enhancements to the currency design, symbol of American strength and stability." enhanced cooperation with international law enforce- "U.S. currency continues to hold an important ment agencies and additional training of foreign law place in the payment system at home and abroad and enforcement, and financial officials in counterfeit maintaining its integrity is of utmost concern to the detection. Federal Reserve," said Roger Ferguson, Vice Chair- The report is available online at http:// man of the Board of Governors of the Federal www.federalreserve.gov/boarddocs/rptcongress/ Reserve System. "A secure currency precludes the counterfeit2003.pdf. need for businesses, merchants and the public to expend significant resources and time validating the genuineness of currency. When payment systems UPDATE OF INTERAGENCY POLICY STATEMENT work well, the economy functions more efficiently." ON INTERNAL AUDITING This second report to the Congress on the use and counterfeiting of U.S. currency abroad provides fur- The federal banking and thrift regulatory agencies on ther evidence that improved note designs have been March 17, 2003, revised their guidance on the indemore difficult for counterfeiters to copy. The result pendence of accountants who provide institutions has been much smaller proportions of counterfeits of with both external and internal audit services to new design notes among notes processed at Federal reflect the provisions of the Sarbanes-Oxley Act of Reserve Banks. 2002. According to the report, efforts to protect U.S. The updated Interagency Policy Statement on the currency continue to be effective. The incidence of Internal Audit Function and Its Outsourcing, which counterfeiting is low, with approximately one coun- replaces a policy issued in 1997, also reflects the terfeit note per 10,000 notes worldwide. The U.S. agencies' experience with the 1997 policy and incor- Secret Service is working closely with overseas banks porates recent developments in internal auditing. It and law enforcement agencies to help suppress coun- was issued by the Board of Governors of the Federal terfeiting activities. Reserve System, the Federal Deposit Insurance Cor- The report highlights important steps the U.S. poration, the Office of the Comptroller of the Curgovernment is currently taking to combat global rency, and the Office of Thrift Supervision. counterfeiting: The Sarbanes-Oxley Act and recently adopted Securities and Exchange Commission (SEC) rules • The Secret Service web site allows law enforce- prohibit an accounting firm from acting as the exterment agencies and currency handlers worldwide to nal auditor of a public company during the same report instances of counterfeiting and to learn more period that the firm provides internal audit services to about the characteristics of a suspect note. the company. The revised policy statement separately • The Federal Reserve Bank of New York has discusses the applicability of this prohibition to instiestablished overseas cash depots at foreign com- tutions that are public companies; insured depository mercial banks. These facilities allow overseas dollar institutions with $500 million or more in assets that users to obtain new U.S. currency more efficiently are subject to the annual audit and reporting requireand increase the repatriation rate of worn and old- ments of section 36 of the Federal Deposit Insurance design U.S. currency. Act; and nonpublic institutions that are not subject to • U.S. enforcement agencies are working with their section 36. overseas counterparts to target cities and countries The existing guidelines for institutions subject to that first receive counterfeit notes in the wholesale section 36 provide for their external auditors to meet distribution chain. the SEC's independence requirements. Auditors for these institutions, whether or not they are public The study concludes that overseas holdings of U.S companies, should comply with the prohibition on currency ranged between $340 billion and $370 bil- internal audit outsourcing in the SEC's rules. lion out of the roughly $620 billion in U.S. currency The policy statement encourages nonpublic instiheld outside U.S. depository institutions in the last tutions not subject to section 36, which includes quarter of 2002. nonpublic depository institutions with less than Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

206 Federal Reserve Bulletin • May 2003 $500 million in assets, to refrain from outsourcing ONLINE RESOURCE ON PERSONAL FINANCIAL internal audit activities to their external auditor. If EDUCATION such an institution decides to use the same firm for both internal and external audit work, however, the The Federal Reserve Board on March 28, 2003, audit committee should document its consideration announced the launch of an online resource for of the independence issues associated with this researchers, educators, program directors, and others arrangement. interested in advancing financial education programs. In addition to changes related to the Sarbanes- The Financial Education Research Center was Oxley Act, the agencies enhanced the 1997 policy developed by the Federal Reserve Bank of Chicago statement's discussion of the responsibilities of the to promote excellence in financial education by board of directors and senior management with encouraging research and disseminating information respect to the internal audit function and its place- through its repository of research studies and listings ment within an organization, its management and of major financial education programs throughout staffing, and the communication of concerns and the country. The Center is housed on the Chicago weaknesses in accounting and internal control. The Reserve Bank's web site (www.chicagofed.org/ policy also reiterates the need for institutions to cedric/index.cfm). maintain strong systems of internal control, includ- The Federal Reserve Board and the twelve Federal ing internal controls over financial and regulatory Reserve Banks undertake a variety of educational reporting, and high-quality internal audit programs. programs and partnerships with financial education Expanded guidance has been provided on the use of providers. The Financial Education Research Center independent reviews of significant internal controls is one aspect of the Federal Reserve's efforts to by small institutions that do not have a formal inter- increase awareness and further the implementation of nal audit manager or staff. The policy statement effective financial education programs and initiatives. also includes guidance for examiners on address- To date, little broad-based empirical data have been ing concerns they may have about the adequacy of gathered regarding the most effective means for the internal audit function or related outsourcing improving individuals' personal financial practices. arrangements. The online center is an additional tool for those interested in supporting financial education. Inquiries regarding the submission of material for INTERAGENCY PAPER ON SOUND PRACTICES inclusion on the site should be directed to TO STRENGTHEN THE RESILIENCE OF THE U.S. cedric@chi.frb.org. FINANCIAL SYSTEM Three federal regulatory agencies on April 8, 2003, issued an "Interagency Paper on Sound Practices to MINUTES OF DISCOUNT RATE MEETINGS Strengthen the Resilience of the U.S. Financial System." Among other things, the Board of Governors The Federal Reserve Board on March 28, 2003, of the Federal Reserve System, the Office of the released the minutes of its discount rate meetings Comptroller of the Currency, and the Securities and from January 6 to January 27, 2003. Exchange Commission identified sound practices to strengthen the resilience of critical U.S. financial markets and minimize the immediate systemic effects of a wide-scale disruption. ENFORCEMENT ACTIONS On September 5, 2002, the agencies published for comment a draft of the paper in the Federal Register. The Federal Reserve Board on March 17, 2003, The agencies have incorporated many of the sugges- announced the execution of a written agreement by tions that were made. The final paper, which applies and between Midstate Bancorp, Inc., Hinton, Oklamost directly to the clearing and settlement activities homa and the Federal Reserve Bank of Kansas City. of a limited number of financial institutions, provides The Federal Reserve Board also announced the more flexibility to firms in managing geographic execution of a written agreement by and among the dispersion of backup facilities and staffing arrange- Legacy Bank, Hinton, Oklahoma, the Federal ments, and takes into account other considerations Reserve Bank of Kansas City, and the Oklahoma relevant to cost-effective implementation of sound State Banking Department. The Legacy Bank is a practices. subsidiary of Midstate Bancorp, Inc. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 207 The Federal Reserve Board on March 21, 2003, managed all of the division's critical operations announced the execution of a written agreement through a series of progressively more responsible by and between Barnes Banking Company, Kays- assignments. Ms. Emerson has served as Deputy ville, Utah, and the Federal Reserve Bank of Director of the Division of Information Technology San Francisco. since 1999 and as Acting Director since 2002. Maureen Hannan was appointed to the official staff The Federal Reserve Board on March 27, 2003, in 1998 and had oversight responsibility for the colannounced the execution of a written agreement by lection and editing of the Board's micro economic and among Fifth Third Bancorp, Cincinnati, Ohio; and financial statistical data. Ms. Hannan has reprethe Fifth Third Bank, Cincinnati, Ohio; the Federal sented the Board on many Federal Reserve, inter- Reserve Bank of Cleveland; and the State of Ohio agency, and private-sector forums addressing infor- Department of Commerce, Division of Financial mation technology issues. Institutions. H. Fay Peters will have oversight responsibility for the day-to-day operations of the Management Division, including Human Resources, Finance and STAFF CHANGES Accounting, Facilities, and the security program for the Board's premises and personnel. Ms. Peters Maureen R English, Associate Director in the Divi- joined the Federal Reserve System in 1982 as an sion of Consumer and Community Affairs, retired attorney at the Federal Reserve Bank of Boston and from the Board on April 3, 2003, after nearly twenty- was Assistant Counsel and Assistant Corporate Secseven years of service. retary when she left the Boston Bank in 1988 for a Senior Counsel position at the Federal Reserve Bank The Board of Governors has also approved the of Minneapolis. She was promoted in 1999 to Vice following officer promotions and appointment: President and Equal Employment Opportunity (EEO) Officer. Ms. Peters has a B.S. degree in business • The promotions of Marianne Emerson to Direcadministration from Northeastern University and a tor and Maureen Hannan to Deputy Director in the J.D. degree from the Boston University School of Division of Information Technology; Law. • • The appointment of H. Fay Peters as Deputy Director in the Management Division. Marianne Emerson was appointed to the official staff as an Assistant Director in 1990 and has since Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

208 Legal Developments ORDERS ISSUED UNDER BANK HOLDING expired, and the Board has considered the proposal and all COMPANY ACT comments received in light of the factors set forth in sections 3 and 4 of the BHC Act. Orders Issued Under Section 3 of the Bank Allied Irish, with total assets of $87.3 billion, is the Holding Company Act largest banking organization in Ireland.4 Through Allfirst, it operates banks in Delaware, the District of Columbia, Allied Irish Banks, p.I.e. Maryland, Pennsylvania, and Virginia. Allied Irish also Dublin, Ireland operates a branch in New York, New York, and representative offices in Atlanta, Georgia; Chicago, Illinois; Order Approving Acquisition of Shares of a Bank Los Angeles, California; Philadelphia, Pennsylvania; Holding Company San Francisco, California; and White Plains, New York. M&T, with total consolidated assets of $34.1 billion, Allied Irish Banks, p.l.c. ("Allied Irish"), a bank holding is the 33rd largest commercial banking organization in company within the meaning of the Bank Holding Com- the United States.5 M&T operates banks in Maryland, pany Act ("BHC Act"), has requested the Board's New York, Pennsylvania, and West Virginia. approval under section 3 of the BHC Act (12 U.S.C. § 1842) to acquire up to 25 percent of the voting shares of Interstate Analysis M&T Bank Corporation (" M&T")1 and thereby indirectly acquire shares of M&T's subsidiary banks, including its Section 3(d) of the BHC Act allows the Board to approve lead subsidiary bank, Manufacturers and Traders Trust an application by a bank holding company to acquire Company, both in Buffalo, New York ("Trust Com- control of a bank located in a state other than the home pany").2 In addition, Allied Irish has requested the Board's state of the bank holding company if certain conditions are approval under section 4(c)(8) and (j) of the BHC Act met. For purposes of the BHC Act, the home state of Allied (12 U.S.C. § 1843(c)(8) and (j)) and section 225.24 of the Irish is Maryland, and Allied Irish proposes to acquire Board's Regulation Y (12 C.F.R. 225.24) to acquire shares banks in Maryland, New York, Pennsylvania, and West of nonbanking subsidiaries of M&T.3 Allied Irish also Virginia.6 has applied under section 211.22(b)(2) of Regulation K The Board may not approve a proposal subject to sec- (12 C.F.R. 211.22(b)(2)) to change its home state for pur- tion 3(d) if, after consummation, the applicant would conposes of the International Banking Act (12 U.S.C. §3101 trol more than 10 percent of the total deposits of insured et seq. "IBA") from Maryland to New York. depository institutions in the United States.7 In addition, Notice of the proposal, affording interested persons an the Board may not approve a proposal if, after consummaopportunity to comment, has been published (67 Federal tion, the applicant would control 30 percent or more of the Register 69,223 (2002)). The time for filing comments has total deposits of insured depository institutions in any state in which both the applicant and the organization to be 1. Under the terms of the proposal, Allied Irish would sell its wholly owned subsidiary bank holding company, Allfirst Financial 4. Asset data and ranking are as of September 30, 2002, and are Inc., Baltimore, Maryland ("Allfirst"), to M&T in exchange for the based on the exchange rate then available. shares of M&T and other consideration. M&T and Trust Company 5. Asset data and ranking are as of September 30, 2002. All other have filed related applications with the Board to acquire Allfirst and banking data are as of June 30, 2002, unless otherwise noted. Allfirst's nonbanking subsidiaries; to merge Allfirst's lead subsidiary 6. A bank holding company's home state is the state in which the bank, Allfirst Bank, also in Baltimore, into Trust Company; and for total deposits of all banking subsidiaries of the company were the Trust Company to retain and operate branches at the locations of largest on July 1, 1966, or the date on which the company became a Allfirst Bank's offices. By order dated today, the Board has approved bank holding company, whichever is later. 12 U.S.C. § 1841(o)(4)(C). the M&T proposal. M&T Bank Corporation (Order dated March 11, For purposes of section 3(d) of the BHC Act, the Board considers a 2003) ("M&T Order"). bank to be located in the states in which the bank is chartered, 2. M&T's other subsidiary bank is M&T Bank, N.A., Oakfield, headquartered, or operates a branch. New York. Pursuant to the IBA and section 211.22(b)(2) of Regulation K 3. Allied Irish proposes to acquire shares in: (1) Martindale Andres (12 C.F.R. 211.22(b)(2)), Allied Irish has applied to change its home & Company, LLC, West Conshohocken, Pennsylvania, and thereby state from Maryland to New York on consummation of the proposed engage in financial and investment advisory activities pursuant to transaction. The Board has determined that Allied Irish satisfies the section 225.28(b)(6) of Regulation Y (12 C.F.R. 225.28(b)(6)); and criteria for changing its home state and that allowing the proposed (2) Keystone Financial Life Insurance Corporation, Phoenix, Ari- change would be consistent with competitive equity between foreign zona, and thereby engage in providing credit insurance as principal, and domestic banks. agent, or broker pursuant to section 225.28(b)(ll) of Regulation Y 7. 12 U.S.C. § 1842(d)(2)(A). Insured depository institutions (12 C.F.R. 225.28(b)(ll)). include all insured banks, savings banks, and savings associations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

209 acquired operate an insured depository institution, or such ruary 14, 2003, contingent on consummation of M&T's higher or lower percentage as established by state law.8 acquisition of Allfirst. On consummation of this proposal and the related acqui- Allied Irish's capital levels exceed the minimum levels sition of Allfirst by M&T, Allied Irish would control less that would be required under the Basel Capital Accord, and than 1 percent of the total deposits of insured depository its capital levels are considered equivalent to the capital institutions in the United States. Allied Irish would levels that would be required of a U.S. banking organizacontrol less than 30 percent of total deposits held by tion. Based on all the facts of record, the Board concludes insured depository institutions in Maryland, New York, or that the financial and managerial resources and future Pennsylvania.9 prospects of the organizations involved in the proposal are All other requirements of section 3(d) of the BHC Act consistent with approval. are met. Allied Irish is adequately capitalized and ade- Section 3 of the BHC Act also provides that the Board quately managed, as defined by applicable law. In addition, may not approve an application involving a foreign bank M&T's subsidiary banks have been in existence for the unless it is "subject to comprehensive supervision or reguminimum time required by applicable state law.10 In view lation on a consolidated basis by the appropriate authorities of all the facts of record, the Board is permitted to approve in the bank's home country." 13 The home country supervithe proposal under section 3(d) of the BHC Act. sor of Allied Irish is the Central Bank of Ireland ("CBI"), which is responsible for the supervision and regulation of Financial, Managerial, and Supervisory Considerations Irish financial institutions. In approving applications under the BHC Act, the Board The BHC Act requires the Board to consider the financial previously has determined that Irish banks, including and managerial resources and future prospects of the com- Allied Irish, are subject to comprehensive consolidated panies and banks involved in a proposal and certain other supervision by the CBI.14 In this case, the Board finds that supervisory factors.11 In assessing the financial and mana- the CBI continues to supervise Allied Irish in substantially gerial strength of Allied Irish and its subsidiaries, the the same manner as it supervised Irish banks at the time of Board has reviewed information provided by Allied Irish, those previous determinations. Based on this finding and confidential supervisory and examination information, and all the facts of record, the Board concludes that Allied Irish publicly reported and other financial information. continues to be subject to comprehensive supervision on a Since May 2002, Allied Irish has been subject to a consolidated basis by its home country supervisor. written agreement with the Federal Reserve Bank of Rich- In addition, section 3 of the BHC Act requires the Board mond, the Maryland Commissioner of Financial Regula- to determine that a foreign bank has provided adequate tion, and the Central Bank of Ireland (the "Written Agree- assurances that it will make available to the Board such ment") that addresses matters related to foreign exchange information on its operations and activities and those of its trading losses resulting from the illicit activities of a trader affiliates that the Board deems appropriate to determine employed by Allfirst Bank. Among other things, the Writ- and enforce compliance with the BHC Act.15 The Board ten Agreement required Allied Irish to conduct a compre- has reviewed the restrictions on disclosure in relevant hensive and timely review of its U.S. operations, including jurisdictions in which Allied Irish operates and has commurisk management and internal controls, and required Allied nicated with relevant government authorities concerning Irish to submit a plan to the three regulatory agencies for access to information. In addition, Allied Irish previously improving the oversight of its U.S. operations. The Board has carefully considered Allied Irish's record of compli- exchange trading losses. The commenter asserted that the questions ance with the requirements of the Written Agreement and associated with the management of Allied Irish were of greater concludes that its record is consistent with approval of this concern because Allied Irish would be able to place four directors on proposal.12 The Written Agreement was lifted as of Feb- the board of directors of M&T, thereby giving it more influence over M&T than it could exercise by virtue of its shareholdings alone. As noted above, the Board has carefully considered the record of Allied 8. 12 U.S.C. § 1842(d)(2)(B)-(D). Irish's management in complying with the terms of the Written 9. Maryland's deposit cap is the same as that set forth in sec- Agreement. tion 3(d)(2)(B) of the BHC Act. See Md. Code Ann., Fin. Inst. 13. 12 U.S.C. § 1842(c)(3)(B). Under Regulation Y, the Board uses § 5-906(b) (Michie 2001) (30 percent). New York and Pennsylvania the standards enumerated in Regulation K to determine whether do not have deposit caps applicable to the proposal. a foreign bank that has submitted an application under section 3 of 10. N.Y. Banking Law § 142-a(l) (5 years). Maryland, Pennsyl- the BHC Act is subject to consolidated home country supervision. vania and West Virginia do not have minimum age requirements See 12 C.F.R. 225.13(a)(4). Regulation K provides that a foreign bank applicable to the proposal. The Board also has taken into account the will be considered to be subject to comprehensive supervision or record of compliance of the subsidiary depository institutions of regulation on a consolidated basis if the Board determines that the Allied Irish and M&T with applicable state community reinvestment bank is supervised and regulated in such a manner that its home laws. country supervisor receives sufficient information on the worldwide 11. One commenter expressed concern about the future prospects operations of the bank, including its relationship to affiliates, to assess of the organizations under the proposal. Allied Irish has acknowl- the bank's overall financial condition and its compliance with law and edged it would be deemed to control M&T for purposes of the BHC regulations. See 12 C.F.R. 211.24(c)(l)(ii). Act and would be required to serve as a source of strength for M&T 14. See Anglo Irish Bank Corporation, pic, 85 Federal Reserve after consummation. See 12 C.F.R. 225.4(a)(1). Bulletin 587 (1999); Allied Irish Banks, pic, 83 Federal Reserve 12. The Board also has carefully considered a comment requesting Bulletin 607 (1997). closer scrutiny of the application and notice in light of the foreign 15. See, e.g., 12 U.S.C. § 1842(c)(3)(A). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

210 Federal Reserve Bulletin • May 2003 has committed to make available to the Board such infor- Allied Irish's New York branch controls deposits of mation on the operations of Allied Irish and its affiliates $1.5 billion, representing less than 1 percent of market that the Board deems necessary to determine and enforce deposits. M&T operates the 20th largest depository institucompliance with the BHC Act and other applicable federal tion in the market, controlling deposits of approximately law. Allied Irish also previously has committed to cooper- $4.1 billion, representing less than 1 percent of market ate with the Board to obtain any waivers or exemptions deposits. On consummation of the proposal, Allied Irish that may be necessary to enable Allied Irish and its affili- would control deposits of $5.6 billion. The market would ates to make such information available to the Board. remain unconcentrated under the DOJ Merger Guidelines In light of these commitments, the Board concludes that and the HHI (907 points) would remain unchanged. Based Allied Irish has provided adequate assurances of access to on all the facts of record, the Board concludes that consumany appropriate information that the Board may request. mation of the proposal would not result in any significantly Based on these and all the facts of record, the Board adverse effects on competition or on the concentration of concludes that the supervisory factors it is required to banking resources in the New York market or in any other consider are consistent with approval. relevant banking market. Competitive Considerations Convenience and Needs Considerations As part of the Board's review under section 3 of the BHC In acting on proposals under section 3 of the BHC Act, the Act, the Board has considered carefully the competitive Board is required to consider the effect of the proposal on effects of the proposal in light of all the facts of record. As the convenience and needs of the communities to be discussed in detail in the M&T Order, the Board concluded served.19 The Board has carefully reviewed the effect of that the combination of M&T and Allfirst would not likely the proposal on convenience and needs considerations in result in any significantly adverse effects on competition or light of all the facts of record, including comments received on the concentration of banking resources in any of the on the proposal and the records of performance of the banking markets in which M&T or Allfirst operate banks. relevant depository institutions under the Community Rein- Based on all the facts of record, the Board concludes that vestment Act ("CRA").20 In the M&T Order, the Board competitive considerations related to the M&T and Allfirst reviewed the records of CRA performance of the relevant aspects of this proposal are consistent with approval for the insured depository institutions and considered other inforreasons discussed in the M&T Order and incorporated mation relating to the convenience and needs factor. Based herein. on all the facts of record, the Board concludes that con- Allied Irish operates a branch and M&T operates a bank venience and needs considerations are consistent with in the Metropolitan NY-NJ-PA-CT banking market approval for the reasons discussed in the M&T Order and ("New York market").16 The Board has reviewed the incorporated herein. competitive effects of the proposal in this banking market in light of all the facts of record, including the number of Nonbanking Activities competitors that would remain in the market, the relative share of total deposits in depository institutions in the Allied Irish also has filed notice under section 4(c)(8) and market ("market deposits")17 controlled by Allied Irish (j) of the BHC Act to acquire nonbanking subsidiaries of and M&T, the concentration level of market deposits and M&T. The Board has determined by regulation that the the increase in this level as measured by the Herfindahl- types of activities for which notice has been provided are Hirschman Index ("HHI") under the Department of Justice closely related to banking for purposes of section 4(c)(8) of Merger Guidelines ("DOJ Merger Guidelines"), and other the BHC Act and, therefore, permissible for bank holding characteristics of the market.18 companies.21 To approve this notice, the Board must determine that 16. The New York market is defined as New York City; Dutchess, the proposed activities "can reasonably be expected to Nassau, Orange, Putnam, Rockland, Suffolk, Sullivan, Ulster, and produce benefits to the public . . . that outweigh possible Westchester Counties in New York; Bergen, Essex, Hudson, Hunter- adverse effects, such as undue concentration of resources, don, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Susdecreased or unfair competition, conflicts of interests, or sex, Union, Warren, and portions of Mercer Counties in New Jersey; Pike County in Pennsylvania; and Fairfield and portions of Litchfield unsound banking practices." 22 and New Haven Counties in Connecticut. As part of its evaluation of the public interest factors, the 17. Market share data are as of June 30, 2002, and are based on Board considers the financial condition and managerial calculations in which the deposits of thrift institutions are included at resources of the notificant and its subsidiaries, including 50 percent. See First Hawaiian, Inc., 77 Federal Reserve Bulletin 52 (1991). 18. Under the DOJ Merger Guidelines, 49 Federal Register 26,823 higher than normal HHI thresholds for screening bank mergers for (1984), a market is considered unconcentrated if the post merger HHI anticompetitive effects implicitly recognize the competitive effects of is under 1000. The Department of Justice has informed the Board that limited-purpose lenders and other nondepository financial institutions. a bank merger or acquisition generally will not be challenged (in the 19. 12 U.S.C. § 1842(c)(2). absence of other factors indicating anticompetitive effects) unless the 20. 12 U.S.C. § 2901 etseq. post merger HHI is at least 1800 and the merger increases the HHI by 21. See 12 C.F.R. 225.28(b)(6) and (11). more than 200 points. The Department of Justice has stated that the 22. 12 U.S.C. §1843(j)(2)(A). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 211 the companies to be acquired, and the effect of the pro- imposed in writing in connection with its findings and posed transaction on those resources. For the reasons noted decision and, as such, may be enforced in proceedings above, and based on all the facts of record, the Board has under applicable law. concluded that financial and managerial considerations are The acquisition of up to 25 percent of M&T may not be consistent with approval of the proposal. consummated before the fifteenth calendar day after the The Board also has considered the competitive effects of effective date of this order, or later than three months after the proposed transaction under section 4 of the BHC Act. the effective date of this order, unless such period is Allied Irish and M&T compete in providing credit-related extended for good cause by the Board or the Federal insurance and financial and investment advisory services. Reserve Bank of Richmond, acting pursuant to delegated The markets for these nonbanking activities are regional, authority. national, or international in scope and are unconcentrated. By order of the Board of Governors, effective March 11, The record in this case also indicates that there are numer- 2003. ous providers of these services. Based on all the facts of record, the Board concludes that consummation of the Voting for this action: Chairman Greenspan, Vice Chairman Ferguproposal would have a de minimus effect on competition son, and Governors Gramlich, Bies, Olson, Bernanke, and Kohn. for the relevant nonbanking activities. The Board concludes that the conduct of the proposed ROBERT DEV. FRIERSON Deputy Secretary of the Board nonbanking activity within the framework of Regulation Y and Board precedent is not likely to result in adverse effects, such as undue concentration of resources, conflicts SouthTrust Corporation of interests, or unsound banking practices, that would SouthTrust of Alabama, Inc. outweigh the public benefits of the proposal, such as SouthTrust Bank increased customer convenience and gains in efficiency. All in Birmingham, Alabama Accordingly, based on all the facts of record, the Board has determined that the balance of public interest factors that Order Approving the Acquisition of Bank Holding the Board must consider under the standard in section 4(j) Companies, Merger of Banks, and Establishment of of the BHC Act is consistent with approval of Allied Branches Irish's notice. SouthTrust Corporation ("SouthTrust") and its wholly Conclusion owned subsidiary, SouthTrust of Alabama, Inc. ("South- Trust Alabama"), both bank holding companies subject to the provisions of the Bank Holding Company Act ("BHC Based on the foregoing, and in light of all facts of record, Act"), have requested the Board's approval under secthe Board has determined that the applications and notice tion 3 of the BHC Act (12 U.S.C. §1842) to acquire should be, and hereby are, approved. In reaching its conclu- Founders Bancshares ("Founders") and its wholly owned sion, the Board has considered all the facts of record in subsidiaries, Skillman Bancshares ("Skillman") and light of the factors it is required to consider under the BHC Founders National Bank ("Founders Bank"), all in Dallas, Act and the IB A. The Board's approval is specifically Texas. SouthTrust's subsidiary bank, SouthTrust Bank conditioned on compliance by Allied Irish with all the ("SouthTrust Bank"), a state member bank in Birmingcommitments and representations made or relied on in ham, has requested the Board's approval under secconnection with the application and notice and with the tion 18(c) of the Federal Deposit Insurance Act (12 U.S.C. conditions stated or referred to in this order. The Board's § 1828(c)) ("Bank Merger Act") to merge with Founders determination also is conditioned specifically on the Bank, with SouthTrust Bank as the surviving entity.1 In Board's receiving access to information on the operations addition, SouthTrust Bank proposes to retain and operate or activities of Allied Irish and any of its affiliates that the branches at the main and branch offices of Founders Bank.2 Board determines to be appropriate to assess and enforce Notice of the proposal, affording interested persons an compliance by Allied Irish and its affiliates with applicable opportunity to comment, has been published in accordance federal statutes. The Board's determination on the nonwith the relevant statutes and the Board's Rules of Probanking activities also is subject to all the terms and cedure (12 C.F.R. 262.3(b)) in the Federal Register conditions set forth in Regulation Y, including those in sections 225.7 and 225.25(c) (12 C.F.R. 225.7 and 225.25(c)), and to the Board's authority to require such modification or termination of the activities of a bank 1. Under the proposal, SouthTrust Alabama would acquire all the holding company or any of its subsidiaries as the Board issued and outstanding stock of Founders. Simultaneously with the finds necessary to ensure compliance with, and to prevent acquisition of Founder's stock, Founders and Skillman would merge evasion of, the provisions of the BHC Act and the Board's with and into SouthTrust Alabama and Founders Bank would merge regulations and orders thereunder. For purposes of this with and into SouthTrust Bank. 2. See 12 U.S.C. §§321 & 1831u. The Founders Bank offices to be action, the commitments and conditions relied on by the acquired by SouthTrust Bank are at 9696 Skillman Street and 10600 Board in reaching its decision are deemed to be conditions Forest Lane, both in Dallas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

212 Federal Reserve Bulletin • May 2003 (68 Federal Register 3,029 (2003)) and locally. As required Financial and Managerial Considerations by the BHC Act and the Bank Merger Act, reports on the competitive effects of the merger were requested from The BHC Act and the Bank Merger Act require the Board the U.S. Attorney General and the relevant banking agen- to consider the financial and managerial resources and cies. The time for filing comments has expired, and the future prospects of the companies and banks involved in a Board has considered the applications and all comments proposal and certain other supervisory factors under the received in light of the factors set forth in section 3 of the BHC Act. In assessing the financial and managerial BHC Act, the Bank Merger Act, and the statutory provi- strength of SouthTrust and its subsidiaries, the Board has sions that govern the retention and operation of interstate reviewed information provided by SouthTrust, confidential branches. supervisory and examination information, and publicly SouthTrust, with total assets of $50.8 billion, is the reported and other financial information. Based on all the largest banking organization in Alabama. SouthTrust oper- facts of record, the Board concludes that the financial and ates depository institutions in Alabama, Florida, Georgia, managerial resources and future prospects of the organiza- Mississippi, North Carolina, South Carolina, Tennessee, tions involved in the proposal are consistent with approval, and Texas. SouthTrust Bank is the 19th largest depository as are other supervisory factors under the BHC Act. institution in Texas, controlling deposits of approximately $1.8 billion, representing less than 1 percent of total depos- Competitive Considerations its of insured depository institutions in the state ("state deposits").3 Founders Bank is the 230th largest depository Section 3 of the BHC Act and the Bank Merger Act institution in Texas, controlling deposits of $102.5 million, prohibit the Board from approving a proposal that would representing less than 1 percent of state deposits. On conresult in a monopoly or would be in furtherance of an summation of the proposal, SouthTrust Bank would attempt to monopolize the business of banking. The BHC become the 18th largest depository institution in Texas, Act and the Bank Merger Act also prohibit the Board from controlling deposits of approximately $1.9 billion, repreapproving a proposed bank acquisition that would substansenting less than 1 percent of state deposits. tially lessen competition in any relevant banking market unless the anticompetitive effects of the proposal are clearly outweighed in the public interest by the probable Interstate Analysis effect of the proposal in meeting the convenience and needs of the community to be served.6 Section 3(d) of the BHC Act allows the Board to approve SouthTrust Bank and Founders Bank compete directly in an application by a bank holding company to acquire the Dallas, Texas, banking market ("Dallas banking marcontrol of a bank located in a state other than the home ket").7 SouthTrust Bank is the 21st largest depository state of the bank holding company if certain conditions institution in the market, controlling less than 1 percent of are met. For purposes of the BHC Act, the home state total deposits in depository institutions in the market of SouthTrust is Alabama, and SouthTrust proposes to ("market deposits").8 Founders Bank is the 41st largest acquire a bank in Texas.4 Based on a review of all the facts depository institution in the market, also controlling less of record, including a review of relevant state statutes, the than 1 percent of market deposits. On consummation of the Board finds that all conditions for an interstate acquisition enumerated in section 3(d) are met in this case.5 In light of proposal, SouthTrust Bank would become the 16th largest depository institution in the market, controlling less than all the facts of record, the Board is permitted to approve 1 percent of market deposits. the proposal under section 3(d) of the BHC Act. The Board has reviewed the competitive effects of the proposal in the Dallas banking market in light of all the facts of record, including the number of competitors that 3. Asset data are as of December 31, 2002. Deposit and state would remain in the market, the relative share of market ranking data are as of June 30, 2002, and are adjusted to reflect deposits controlled by SouthTrust Bank and Founders mergers and acquisitions completed through December 6, 2002. In Bank, the concentration level of market deposits and the this context, depository institutions include commercial banks, savings banks, and savings associations. increase in this level as measured by the Herfindahl- 4. See 12 U.S.C. § 1841(o)(4)(C). Hirschman Index ("HHI") under the Department of Justice 5. 12 U.S.C. § 1842(d)(1)(A) & (B), 1842(d)(2)(A) & (B). South- Trust is well capitalized and well managed, as defined by applicable law. Founders Bank has been in existence and operated for the 6. 12 U.S.C. § 1842(c)(1)(A) & (B); 12 U.S.C. § 1828(c)(5)(A) minimum period of time required by Texas law. On consummation of &(B). the proposal, SouthTrust would control less than 10 percent of the 7. The Dallas banking market is defined as Dallas and Rockwall total amount of deposits of insured depository institutions in the Counties, Denton and Lewisville in Denton County, McKinney and United States. SouthTrust also would control less than 20 percent of Piano in Collin County, Forney and Terrell in Kaufman County, the total deposits of insured depository institutions in Texas, the Midlothian, Waxahachie and Ferris in Ellis County, and Grapevine maximum percentage of total deposits in the state that is permitted and Arlington in Tarrant County, all in Texas. under state law to be controlled by a bank holding company after an 8. Market share data are as of June 30, 2002, and are based on interstate acquisition. See Tx. Fin. Code Ann. §202.002. All other calculations in which the deposits of thrift institutions are included at requirements under section 3(d) of the BHC Act also would be met on 50 percent. See First Hawaiian, Inc., 77 Federal Reserve Bulletin 52 consummation of the proposal. (1991). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 213 Merger Guidelines ("DOJ Guidelines"), and other charac- African Americans in North Carolina, Alabama, Missisteristics of the market.9 sippi, and Georgia and stated that the denial rates sug- The Department of Justice has reviewed the proposal gested that SouthTrust Bank did not offer, or use effecand advised the Board that consummation would not likely tively, flexible mortgage lending products. In addition, all have a significantly adverse effect on competition in any five commenters criticized SouthTrust Bank's record of relevant market. In addition, no federal banking agency has providing community development investments and serindicated that the proposal raises competitive issues. vices in one or more of the bank's assessment areas.11 Based on all the facts of record, the Board concludes that consummation of the proposal would not result in any A. CRA Performance Evaluations significantly adverse effects on competition or on the concentration of banking resources in the Dallas banking mar- As provided in the CRA, the Board has evaluated the ket or in any other relevant banking market. convenience and needs factor in light of examinations of the CRA performance records of the relevant depository Convenience and Needs Considerations institutions by the appropriate federal supervisors. An institution's most recent CRA performance evaluation is a In acting on this proposal, the Board also must consider the particularly important consideration in the applications proconvenience and needs of the communities to be served cess because it represents a detailed, on-site evaluation of and take into account the records of performance of the the institution's overall record of performance under the relevant insured depository institutions under the Commu- CRA by its appropriate federal supervisor.12 nity Reinvestment Act (12 U.S.C. §2901 et seq.) ("CRA"). SouthTrust Bank received a "satisfactory" CRA rating The CRA requires the federal supervisory agencies to at its most recent CRA performance evaluation, as of encourage insured depository institutions to help meet the April 2, 2001, from the Federal Reserve Bank of Atlanta. credit needs of local communities in which they operate, Founders Bank also received a "satisfactory" CRA rating consistent with safe and sound operation. The CRA at its most recent CRA performance evaluation, as of requires the appropriate federal financial supervisory December 12, 1997, from the Office of the Comptroller of agency to take into account an insured depository insti- the Currency. SouthTrust has indicated that it intends to tution's record of meeting the credit needs of its entire implement the CRA-related programs and activities and community, including low- and moderate-income ("LMI") to offer the CRA-related products of SouthTrust Bank at neighborhoods, in evaluating bank expansion proposals. the offices of Founders Bank on consummation of the The Board has considered carefully the effects of the proposal. proposal on the convenience and needs of the communities to be served in light of all the facts of record, including B. SouthTrust Bank's CRA Performance Record confidential supervisory information, comments received on the proposal, information on the performance under 1. Lending Test. Examiners rated SouthTrust Bank overthe CRA of the relevant insured depository institutions, all "high satisfactory" under the lending test at its most publicly available data, and information submitted by recent CRA performance examination for the review period SouthTrust. January 1, 1999, through December 31, 2000.13 Examiners The Board received comments from five community concluded that the bank's lending reflected a good responorganizations opposing the proposal and expressing con- siveness to the credit needs of its assessment areas. They cerns about the record of SouthTrust Bank in meeting the indicated that during the review period, SouthTrust Bank convenience and needs of the communities it serves. Four bought or originated 58,175 HMDA loans, totaling of the commenters criticized SouthTrust Bank's record of $6.1 billion, in its assessment areas. Moreover, examiners lending to LMI and minority borrowers and borrowers in commended SouthTrust Bank for originating more than LMI census tracts in several of the bank's assessment areas 90 percent of its small business, HMDA, and small farm in Alabama, Georgia, Mississippi, North Carolina, and loans in its assessment areas. Examiners also noted that South Carolina.10 These commenters also criticized South- Trust Bank's high denial rates of mortgage applications by 11. Commenters requested that SouthTrust Bank develop relationships with community development credit unions and other commu- 9. Under the DOJ Guidelines, 49 Federal Register 26,823 (1984), nity organizations and enter into commitments with specific commuthe HHI for the Dallas banking market would not increase and would nity organizations/Neither the CRA nor the federal banking agencies' remain moderately concentrated at 1,262 points. The Department of CRA regulations require depository institutions to make pledges or Justice has informed the Board that a bank merger or acquisition enter into agreements with any organization. Instead, the Board generally will not be challenged (in the absence of other factors focuses on the existing record of an applicant and the programs that indicating anticompetitive effects) unless the post-merger HHI is at the applicant has in place to meet the credit needs of the communities least 1800 and the merger increases the HHI by more than 200 points. it serves. See Fifth Third Bancorp, 80 Federal Reserve Bulletin 838 10. The commenters alleged, among other things, that SouthTrust (1994). Bank and its wholly owned subsidiary, SouthTrust Mortgage Corpora- 12. See Interagency Questions and Answers Regarding Community tion ("SouthTrust Mortgage"), engaged in disparate treatment of Reinvestment, 66 Federal Register 36,620 and 36,639 (2001). minority and nonminority individuals in mortgage lending by citing 13. Examiners took into account the home mortgage originations data submitted under the Home Mortgage Disclosure Act, 12 U.S.C. and purchases of SouthTrust Bank and SouthTrust Mortgage in evalu- §2801 etseq. ("HMDA"). ating the performance of SouthTrust Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

214 Federal Reserve Bulletin • May 2003 SouthTrust Bank's lending data reflected a good distribu- geographic areas in Alabama, North Carolina, South Carotion of lending in geographies of different income levels lina, and Tennessee. and a good distribution of lending to borrowers of different Although examiners criticized the bank's lending and income levels and businesses of different sizes. assigned ratings of "low satisfactory" in some assessment As noted above, several commenters asserted that areas, examiners also commended the bank's lending per- SouthTrust Bank's rate of denial for African-American formance in other areas and assigned the bank "high applicants in some areas suggested that the bank did not satisfactory" ratings under the lending test in those areas. offer, or use effectively, flexible lending products. Examin- For example, the bank received "high satisfactory" ratings ers reported that SouthTrust Bank used flexible lending under the lending test statewide in Alabama, Florida, and practices in serving the credit needs of its assessment areas, Texas. After considering SouthTrust Bank's entire record which included a variety of affordable housing programs. in all the assessment areas reviewed, examiners assigned a In addition, since the examination, SouthTrust represented "high satisfactory" rating under the lending test for the that SouthTrust Bank and SouthTrust Mortgage have made bank as a whole. 2,821 loans totaling more than $258 million through afford- Similarly, in considering the convenience and needs able loan programs. SouthTrust also represented that it factor under the BHC Act and the Bank Merger Act, the continues to offer a variety of affordable housing programs, Board has considered the overall record of lending of including a no-down-payment program that offers a fixed SouthTrust Bank in all the markets in which it participates. rate mortgage with no down payment and no closing costs. The Board has reviewed carefully the examiners' evalua- Moreover, SouthTrust offers a first-time homebuyer pro- tion of the bank's lending performance in the assessment gram designed for LMI borrowers to obtain financing for a areas reviewed and the conclusions on the bank's overall home in circumstances where a traditional loan program record of lending in the performance evaluation. In addiwould not be available to them because of loan-to-value or tion, the Board has considered supervisory information, down-payment requirements. information provided by SouthTrust, and publicly avail- Examiners found that SouthTrust Bank made a rela- able information on the bank's record of lending since the tively high amount of community development loans, total- examination in certain assessment areas, including those ing $174.2 million. These loans funded the construction, areas highlighted by the commenters. renovation, and purchase of affordable single and multi- 2. Investment Test. Examiners rated SouthTrust Bank family housing and industrial development in such areas "high satisfactory" for its record of responding to the as Birmingham ($1.9 million), Tampa, Florida ($15.7 mil- community development needs of its overall assessment lion), Atlanta, Georgia ($3.8 million), Biloxi, Mississippi area through investments and stated that the bank made ($404,000), Raleigh, North Carolina ($7.7 million), significant use of community development investments to Charleston, South Carolina ($200,000), Memphis, Tennes- support community development initiatives. Examiners see ($2.8 million), and Beaumont, Texas ($1.3 million). indicated that the bank made a significant level of qualified SouthTrust reported that during 2001 and 2002, the bank community development investments and grants, which made more than 600 community development loans that totaled more than $146 million during the assessment totaled more than $250 million throughout its assessment period.15 Examiners also noted that SouthTrust Bank's areas. These loans exceeded the amounts indicated in the investment portfolio totaled approximately $9.9 billion following states: Alabama ($38 million), Georgia ($22 mil- as of December 31, 2000. Overall, examiners found that lion), Mississippi ($36 million), North Carolina ($14 mil- SouthTrust Bank showed good responsiveness to credit lion), and South Carolina ($8 million). and community development needs. Commenters cited criticisms of SouthTrust Bank's Examiners indicated that SouthTrust Bank exhibited lending performance and ratings assigned to the bank in an excellent responsiveness to credit and community develseveral assessments areas in the bank's overall assessment opment needs in Alabama through its investment activities area.14 Commenters noted that the bank received "low and reported that the bank invested approximately $31 milsatisfactory" ratings under the lending test for Mississippi lion in community development financial institution investand North Carolina. In addition, commenters noted that ments ("CDFI investments"), low-income housing tax examiners characterized SouthTrust Bank's geographic credits, and municipal bonds.16 In Georgia, SouthTrust distribution of mortgage loans and small business loans in Bank invested approximately $14 million in municipal North Carolina as poor. One commenter also noted that the bonds and Federal National Mortgage Association wraps bank's lending to borrowers of different income levels in Mississippi was considered by examiners to be poor. Sev- 15. SouthTrust represented that since its most recent performance eral commenters pointed out examiner criticisms of South- evaluation, it has increased the amount of its qualified investments for community development purposes by an additional $90 million. Trust Bank's community development lending in certain 16. CDFI investments are investments by depository institutions in private-sector financial intermediaries, including credit unions, that have community development as their primary purpose. One com- 14. In addition to the bankwide ratings, examiners also assigned menter criticized the bank's commitment to community development overall ratings and separate ratings under the lending, investment and in Alabama outside the Birmingham MSA. The Board notes that service tests for SouthTrust Bank's performance in six states, five SouthTrust Bank received an "outstanding" rating under the investmultistate Metropolitan Statistical Areas ("MSAs"), and six other ment test in Alabama, which included a review of the bank's assess- MS As that are part of the bank's assessment areas. ment areas outside Birmingham. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 215 ("FNMA wraps").17 Examiners also commended the bank community development services and stated that personnel for making an in-kind donation of a vacant branch in used their financial expertise to provide financial services Georgia to a local business that conducts job training, to benefit residents in the bank's assessment areas. Examincredit counseling, and home ownership seminars to LMI ers also noted that the services provided were highly individuals. Examiners reported that during the review responsive to affordable housing needs in SouthTrust period, SouthTrust Bank made qualifying investments of Bank's assessment areas. $14.4 million in North Carolina, more than $3.5 million in Mississippi, and $1.7 million in Tennessee.18 C. HMD A SouthTrust represented that since the most recent examination, SouthTrust Bank has undertaken other mea- The Board also has carefully considered SouthTrust's lendsures to provide economic and community support to ing record in light of public comments received by the projects and programs that assist LMI and minority popula- Board on HMDA data reported by SouthTrust.20 In considtions. SouthTrust stated that the bank provided a branch ering this proposal, the Board has reviewed publicly availlocation for a community development credit union and able HMDA data for 2000 and 2001 from SouthTrust conducted three faith-based empowerment conferences in Bank, SouthTrust Mortgage, and lenders that operate in Alabama. In addition, SouthTrust Bank hired a technical SouthTrust Bank's assessment areas, and preliminary assistance manager to provide investment and technical HMDA data from 2002 from SouthTrust Bank and Southassistance to community development credit unions, com- Trust Mortgage.21 Moreover, the Board has reviewed munity development corporations, and nonprofit organi- information about the loan underwriting processes of zations in Alabama and North Carolina. SouthTrust also SouthTrust Bank and SouthTrust Mortgage, including stated that SouthTrust Bank received approval from the management and audit functions governing loan underwrit- Federal Home Loan Bank of Atlanta for funding from the ing, the credit review processes, and fair lending training Economic Development and Growth Enhancement Pro- provided to personnel. gram to support an organization in Augusta, Georgia, that The HMDA data generally indicate disparities in the rate will construct an office building in a low-income census SouthTrust denies applications by African Americans comtract. In addition, SouthTrust represented that the bank pared with those by nonminority applicants in many of the obtained funding from the same Federal Home Loan Bank markets reviewed. In addition, the data generally indicate to support initiatives of six local housing organizations that that the number and dollar volume of HMDA-reportable serve LMI persons and their communities, including orga- loan originations by SouthTrust to African-American and nizations in North Carolina. LMI borrowers and borrowers in LMI census tracts, as a 3. Service Test. Examiners rated SouthTrust Bank an percentage of its total HMDA-reportable lending in 2000 overall "low satisfactory" in its most recent performance and 2001, were below the percentage of the HMDAevaluation for its provision of community development and reporting lenders in the aggregate in many of the areas retail banking services.19 Examiners found SouthTrust reviewed. Bank's delivery systems and branch locations reasonably The Board is concerned when the record of an institution accessible, and that its hours of operation were convenient indicates disparities in lending and believes that all banks to most portions of its overall assessment area. Examiners are obligated to ensure that their lending practices are noted that 18 percent of the bank's total branches were in based on criteria that ensure not only safe and sound LMI areas, which was highly representative of the number lending but also equal access to credit by creditworthy of families and businesses in LMI census tracts in South- applicants regardless of their race, gender, or national Trust Bank's assessment areas. In addition, examiners origin. The Board recognizes, however, that HMDA data found that SouthTrust Bank provided an adequate level of alone provide an incomplete measure of an institution's lending in its community because these data cover only a 17. FNMA wraps are investments in pools of mortgages backed by few categories of housing-related lending. HMDA data, investment-grade bond issuances used to aid in CRA initiatives, such moreover, provide only limited information about the covas affordable housing projects. ered loans.22 HMDA data, therefore, have limitations that 18. Commenters underscored that examiners gave SouthTrust Bank "low satisfactory" ratings under the investment test for Mississippi and the Charlotte MSA, and "needs to improve" ratings in the 20. Based on 2001 HMDA data, commenters criticized South- Augusta, Georgia, and Chattanooga, Tennessee, MSAs. However, Trust's record of home mortgage lending to African Americans, LMI examiners gave the bank "high satisfactory" ratings under the invest- borrowers, or borrowers in LMI census tracts in certain of the bank's ment test in Georgia, North Carolina, and Tennessee. In addition, assessment areas in Alabama, North Carolina, and South Carolina. SouthTrust represented that since the last performance evaluation, it Commenters also expressed concern about the bank's high rate of made three investments in the Augusta MSA, totaling $2.4 million, denials for African-American applicants in certain assessment areas in and one in the Chattanooga MSA, totaling more than $911,000. Alabama, Georgia, Mississippi, North Carolina, and South Carolina. SouthTrust also represented that since the performance evaluation, 21. As a part of its review, the Board has evaluated the HMDA SouthTrust Bank has made community development investments of data for SouthTrust Bank and SouthTrust Mortgage, separately and $44 million in Georgia, $9.7 million in Tennessee, $12 million in combined, in certain markets. Mississippi, and $18 million in North Carolina. 22. The data do not, for example, account for the possibility that an 19. Commenters noted that SouthTrust Bank was rated "low satis- institution's outreach efforts may attract a larger proportion of marginfactory" on the service test in North Carolina and the Chattanooga ally qualified applicants than other institutions attract and do not MSA. provide a basis for independent assessment of whether an applicant Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

216 Federal Reserve Bulletin • May 2003 make them an inadequate basis, absent other information, The record indicates that SouthTrust has sound CRA for concluding that an institution has not assisted ade- performance overall in a number of areas. The record also quately in meeting its community's credit needs or has indicates that there are opportunities for improvement in engaged in illegal lending discrimination. SouthTrust Bank's overall satisfactory CRA record, and Because of the limitations of HMDA data, the Board has in particular, its HMDA lending record, and the Board considered these data carefully in light of other informa- encourages SouthTrust to pursue those opportunities. tion, including confidential supervisory information, Based on all the facts of record, and for the reasons examination reports that provide on-site evaluation of the discussed above, the Board concludes that considerations compliance with fair lending laws by SouthTrust Bank and relating to the convenience and needs of the communities SouthTrust Mortgage, and the overall lending and com- to be served, including the CRA performance records of munity development activities of SouthTrust. At the last the institutions involved in the proposal, are consistent examination, examiners found no violations of the substan- with approval of the proposal.23 tive provisions of fair lending and consumer protection laws at SouthTrust Bank or SouthTrust Mortgage and no Conclusion evidence of prohibited discrimination or other illegal credit practices. Based on the foregoing and all facts of record, the Board In addition, the SouthTrust HMDA data generally indi- has determined that the applications should be, and hereby cate that the volume of home mortgage originations are, approved. In reaching its conclusion, the Board has increased significantly from 2000 to 2001, and the percent- considered all the facts of record in light of the factors that age increases in originations in the markets reviewed were it is required to consider under the BHC Act, the Bank comparable with those of the aggregate of lenders. The Merger Act, and the statutory provisions that govern the volume of HMDA loans to African Americans, LMI bor- retention and operation of interstate branches. rowers, and borrowers in LMI census tracts also increased The Board's approval is specifically conditioned on between 2000 and 2001 in a number of the markets compliance by SouthTrust and SouthTrust Bank with all reviewed. Moreover, the 2001 HMDA data indicate that the commitments and representations made in connection the ratio of denial rates of applications from African with the applications. These commitments, representations, Americans compared with denial rates for nonminorities and conditions are deemed to be conditions imposed in was comparable with this ratio for the aggregate of lenders writing by the Board in connection with its findings and in many of the markets reviewed. decisions and, as such, may be enforced in proceedings As noted above, SouthTrust has in place a number of under applicable law. programs designed to help meet the credit needs of its The proposed transactions may not be consummated communities, and examiners found that SouthTrust Bank before the fifteenth calendar day after the effective date of has engaged in substantial lending throughout its assess- this order, or later than three months after the effective date ment areas. In addition, SouthTrust has represented that it of this order, unless such period is extended for good cause has undertaken several initiatives since its most recent by the Board or the Federal Reserve Bank of Atlanta, performance evaluation and implemented additional pro- acting pursuant to delegated authority. grams in an effort to improve its lending to minority and By order of the Board of Governors, effective March 19, LMI individuals and in LMI areas. 2003. D. Conclusion on Convenience and Needs Voting for this action: Chairman Greenspan, Vice Chairman Fergu- Considerations son, and Governors Gramlich, Bies, Olson, Bernanke, and Kohn. In reviewing the effect of the proposal on the convenience ROBERT DEV. FRIERSON Deputy Secretary of the Board and needs of the communities to be served, the Board has considered carefully all the facts of record, including the comments received and the responses to the comments, evaluations of the performance of SouthTrust Bank and 23. Several commenters suggested that SouthTrust provided the Board with insufficient information when describing how it meets the Founders Bank under the CRA, the relevant HMDA data convenience and needs of the communities it serves, and requested for SouthTrust Bank and SouthTrust Mortgage, other infor- that SouthTrust provide the Board with specific information about its mation provided by SouthTrust, and confidential supervi- lending operations, level and types of community development loans sory information. The Board also has reviewed information and investments, and policies, practices, and initiatives for affordable loan products. The Board has accumulated a significant record in this submitted by SouthTrust on its CRA performance and case, including examination reports on the CRA and compliance activities to help ensure compliance with fair lending laws records of SouthTrust, comments received from the public, informasince the last performance evaluation. tion from SouthTrust in the application and in responses to requests for additional information from the Board, and responses by South- Trust to the commenters. The Board has carefully evaluated the effect who was denied credit was, in fact, creditworthy. Credit history of the proposal on the convenience and needs of the communities to problems and excessive debt levels relative to income (reasons most be served in light of all the information in the record and concludes frequently cited for a credit denial) are not available from HMDA that the record in this case is sufficient to warrant consideration of and data. action on the proposal at this time. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 217 The Wakashio Bank, Limited including the records of performance of the relevant Tokyo, Japan insured depository institutions under the Community Reinvestment Act ("CRA");7 the availability of information Order Approving the Formation of a Bank Holding needed to determine and enforce compliance with the BHC Company Act and other applicable federal banking laws; and, in the case of applications involving a foreign bank, whether The Wakashio Bank, Limited, Tokyo, Japan ("Wakashio"), the bank is subject to comprehensive supervision and has requested the Board's approval under section 3 of the regulation on a consolidated basis by its home country Bank Holding Company Act ("BHC Act") (12 U.S.C. supervisor.8 § 1842) to become a bank holding company by merging The Board has considered these factors in light of a with its affiliate, Sumitomo Mitsui Banking Corporation, record that includes information provided by Wakashio, also in Tokyo ("SMBC"), and by acquiring Manufacturers SMFG, and SMBC; confidential supervisory and examina- Bank, Los Angeles, California ("Bank").1 Wakashio does tion information from various federal agencies; and pubnot propose to expand the banking or nonbanking opera- licly reported financial and other information. The Board tions of SMBC in the United States or to acquire or control also has considered information from the Financial Serany additional U.S. banks.2 vices Agency of Japan ("FSA"), the primary home country Notice of the proposal, affording interested persons an supervisor of SMBC. The Board notes that the FSA has opportunity to submit comments, has been published issued a preliminary approval of the proposed restructur- (68 Federal Register 5640 (2003)). The time for filing ing. In addition, the Board has considered all comments comments has expired, and the Board has considered the received on the proposal. proposal and all comments received in light of the factors set forth in section 3 of the BHC Act. Competitive Considerations SMBC, with total consolidated assets equivalent to $857.1 billion, ranks fourth among the world's commercial Section 3 of the BHC Act prohibits the Board from approvbanks by assets.3 Bank, SMBC's subsidiary depository ing a proposal that would result in a monopoly. The BHC institution, has total consolidated assets of $1.1 billion and Act also prohibits the Board from approving a proposed controls deposits of $825.8 million, representing less than bank acquisition that would substantially lessen competi- 1 percent of total deposits of insured depository institutions tion in any relevant banking market unless the anticompetiin California.4 Wakashio has total assets of $4 billion and tive effects of the proposal are clearly outweighed in the controls no U.S. depository institutions.5 public interest by the probable effect of the proposal in meeting the convenience and needs of the community to be Factors Reviewed by the Board served.9 This proposal represents an internal reorganization of existing operations and would not result in either an The BHC Act sets forth the factors that the Board must expansion of operations or an acquisition of an additional consider when reviewing the formation of a bank holding bank in the United States. Based on all the facts of record, company or the acquisition of a bank.6 These factors are the Board concludes that consummation of the proposal the competitive effects of the proposal in the relevant would not have a significantly adverse effect on competigeographic markets; the financial and managerial resources tion or on the concentration of banking resources in any and future prospects of the companies and banks involved; relevant banking market. the convenience and needs of the community to be served, Financial and Managerial Considerations 1. The merger of Wakashio and SMBC is scheduled to take place on March 17, 2003. Wakashio would be the surviving entity and The Board has carefully considered the financial and manawould be renamed Sumitomo Mitsui Banking Corporation ("New gerial resources and future prospects of Wakashio, SMBC, SMBC"). Before the merger, Sumitomo Mitsui Financial Group, Inc., also in Tokyo ("SMFG") and the parent holding company of and Bank and the effect the proposed transaction would Wakashio and SMBC, plans to transfer ownership of Bank from have on such resources in light of all the facts of record, SMBC to SMFG. SMFG has committed to promptly transfer Bank to which include the examination records of Bank. The Board New SMBC in accordance with required approvals and applicable has also consulted with the FSA. The transaction confers waiting periods. 2. The Board has separately approved Wakashio's application to some accounting and regulatory benefits in Japan under acquire the U.S. branches of SMBC. See The Wakashio Bank, Limited standards applied by the FSA. (Order dated March 14, 2003). No expansion or restructuring of existing U.S. operations 3. Asset and ranking data are as of September 30, 2002. would result from the proposed reorganization. In addition, 4. Asset, deposit, and state ranking data are as of June 30, 2002. In the proposal would not materially affect the management this context, depository institutions include commercial banks, savings associations, and savings banks. of SMBC's operations, including its subsidiary insured 5. Asset data are as of September 30, 2002. depository institution, in the United States. The corporate 6. A commenter has questioned the permissibility of a recently announced investment by The Goldman Sachs Group, Inc., New York, New York, in SMFG. The Board has previously reviewed this trans- 7. 12 U.S.C. §2901 et seq. action and has not found that the proposal would cause Goldman to 8. See 12 U.S.C. § 1842(c). control SMFG for purposes of the BHC Act. 9. 12 U.S.C. § 1842(c)(1). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

218 Federal Reserve Bulletin • May 2003 reorganization would be effected through the exchange of response, and reports of examinations of Bank's CRA shares. No debt would be issued by Wakashio, SMBC, or performance. Based on the review of the entire record and any of its subsidiaries as part of the transactions that would for the reasons discussed above, the Board concludes that effect the reorganization. This transaction results in no considerations relating to the convenience and needs facsubstantive change in the capital of SMBC. tor, including the CRA performance record of the relevant In this light, and based on all the facts of record, the depository institution, is consistent with approval. Board concludes that the financial and managerial resources and future prospects of Wakashio, SMBC, and Other Supervisory Considerations Bank are consistent with approval. Section 3 of the BHC Act also provides that the Board may Convenience and Needs Factor not approve an application involving a foreign bank unless the bank is subject to comprehensive supervision or regula- The Board has carefully considered the effects of the tion on a consolidated basis by the appropriate authorities proposal on the convenience and needs of the communities in the bank's home country.13 The Board previously deterto be served in light of all the facts of record, including a mined, in applications under the International Banking Act comment received on the proposal, information on the and the BHC Act, that certain Japanese commercial banks performance under the CRA of the relevant subsidiary were subject to comprehensive consolidated supervision by insured depository institution received from the Federal their home country supervisor.14 In this case, the Board has Deposit Insurance Corporation ("FDIC"), publicly avail- determined that on consummation of the transaction, New able data, and information submitted by Wakashio. As SMBC would be supervised on substantially the same noted above, the U.S. operations of SMBC and Bank would terms and conditions as these banks. remain unaffected by the proposed reorganization. In addition, section 3 of the BHC Act requires the Board The Board has long held that consideration of the con- to determine that a foreign bank has provided adequate venience and needs factor includes a review of the records assurances that it will make available to the Board such of the relevant depository institutions under the CRA. As information on its operations and activities and those of its provided in the CRA, the Board evaluates an institution's affiliates that the Board deems appropriate to determine record of performance in light of examinations by the and enforce compliance with the BHC Act.15 The Board appropriate federal supervisor. An institution's most recent has reviewed the restrictions on disclosure in jurisdictions CRA performance evaluation is a particularly important where Wakashio would have material operations and has consideration in the applications process because it repre- communicated with relevant government authorities consents a detailed, on-site evaluation of the institution's over- cerning access to information. Wakashio has committed all record of performance under the CRA by its appropriate that, to the extent not prohibited by applicable law, it will federal supervisor.10 make available to the Board such information on the opera- Bank received a "satisfactory" rating at its most recent tions of New SMBC and its affiliates that the Board deems CRA performance evaluation by its primary federal super- necessary to determine and enforce compliance with the visor, the FDIC, as of October 22, 2001.11 In reviewing the effect of the proposal on the conve- its assessment area and that almost half of the loans originated in its nience and needs of the communities to be served, the Los Angeles and Orange County assessment areas were made to businesses in low- and moderate-income census tracts. The examiners Board has carefully considered all the facts of record, also stated that Bank's low loan penetration among small businesses including the views of the commenter,12 Wakashio's was given less weight in the bank's overall rating because of its primary target market and business strategy. 10. See Interagency Questions and Answers Regarding Community Examiners rated Bank "high satisfactory" under the lending test, in Reinvestment, 66 Federal Register 36,620 and 36,639 (2001). part because they concluded that it had an outstanding record of 11. The commenter noted that Bank received a "low satisfactory" originating and maintaining community development loans, and they rating in its performance evaluation under the investment test. described the bank as a leader in community development lending. Although examiners determined that Bank had not acted in a leader- 13. 12 U.S.C. § 1842(c)(3)(B). Under Regulation Y, the Board uses ship role relative to community development investments, they consid- the standards enumerated in Regulation K to determine whether a ered its investments to be responsive to the needs identified in Bank's foreign bank that has applied under section 3 of the BHC Act is assessment areas, including those neighborhoods designated as low- subject to consolidated home country supervision. See 12 C.F.R. and moderate-income. Wakashio states that Bank has substantially 225.13(a)(4). Regulation K provides that a foreign bank will be improved its community development investments since the date of considered to be subject to comprehensive supervision or regulation the last evaluation, noting that Bank currently has approximately on a consolidated basis if the Board determines that the bank is $8.3 million in community development investments. These invest- supervised or regulated in such a manner that its home country ments include $5 million in a CRA-qualified fund investment that supervisor receives sufficient information on the worldwide operations closed in December 2002. of the bank, including its relationship to any affiliates, to assess the 12. The commenter also noted that the section of the examination bank's overall financial condition and its compliance with law and addressing the lending test stated that the distribution of small busi- regulation. See 12 C.F.R. 211.24(c)(1). ness loans reflected poor dispersion among businesses with gross 14. See The Sumitomo Bank, Limited, 82 Federal Reserve Bulletin annual revenue of $1 million or less. Bank has defined its business 369 (1996); Mizuho Holdings, Inc., 86 Federal Reserve Bulletin 776 strategy as serving manufacturers, distributors, wholesalers, import- (2000); UJF Holdings, Inc., 87 Federal Reserve Bulletin 270 (2001); ers, and commercial real estate developers that have revenues of more and Mitsubishi Tokyo Financial Group, Inc., 87 Federal Reserve than $5 million and require loans of more than $1 million. The Bulletin 349 (2001). examiners noted that Bank's business lending was well distributed in 15. See 12 U.S.C. § 1842(c)(3)(A). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 219 BHC Act and other applicable federal law. Wakashio also Friedman, Billings, Ramsey Group, Inc., Arlington, Virhas committed to cooperate with the Board to obtain any ginia ("FBRG"), a financial holding company within the waivers or exemptions that may be necessary to enable its meaning of the Bank Holding Company Act ("BHC Act"), affiliates to make any such information available to the has submitted applications and notices on behalf of Forest Board. In light of these commitments, the Board has con- Merger Corporation ("Forest") and Forest's wholly owned cluded that Wakashio has provided adequate assurances subsidiary, FBR TRS Holdings, Inc. ("Holdings"), under of access to any appropriate information the Board may sections 3 and 4 of the BHC Act in connection with a request. For these reasons, and based on all the facts of reorganization of FBRG and its subsidiaries. Forest and record, the Board has concluded that the supervisory fac- Holdings (jointly, "Applicants"), which are currently tors it is required to consider under section 3(c)(3) of the owned and controlled by FBRG, have requested the BHC Act are consistent with approval. Board's approval under section 3 of the BHC Act (12 U.S.C. § 1842) to become bank holding companies and to acquire control of FBRG, FBR Asset Investment Corpo- Conclusion ration, Arlington ("Asset"), FBR Bancorp, Inc., Arlington ("Bancorp"), a financial holding company, and FBR Based on the foregoing and in light of all the facts of National Bank & Trust, Bethesda, Maryland ("Bank").1 record, the Board has determined that the application On consummation of the proposal, FBRG and Asset would should be, and hereby is, approved. In reaching its conclube merged with and into Forest, with Forest as the survivsion, the Board has considered all the facts of record in ing corporation, and Forest would be renamed Friedman, light of the factors that it is required to consider under Billings, Ramsey Group, Inc. ("New FBR"). the BHC Act and other applicable statutes. The Board's As part of this proposal, Applicants have also filed approval is specifically conditioned on compliance by elections to become financial holding companies pursuant Wakashio, SMBC, SMFG, and New SMBC with all the to section 4(k) and (/) of the BHC Act (12 U.S.C. § 1843(k) representations and commitments made in connection with & (/)) and section 225.82 of the Board's Regulation Y the application, with the conditions stated or referred to in (12 C.F.R. 225.82). this order, and on the receipt by Wakashio of all necessary Notice of the proposal, affording interested persons regulatory approvals. These representations, commitments, an opportunity to submit comments, has been published and conditions are deemed to be conditions imposed in (68 Federal Register 1,851; 3,531; and 3,885 (2003)). The writing by the Board in connection with its findings and time for filing comments has expired, and the Board has decision and, as such, may be enforced in proceedings considered the proposal and all comments received in light under applicable law. of the factors set forth in sections 3 and 4 of the BHC Act. The banking transaction shall not be consummated FBRG, with total consolidated assets of $496 million, is before the fifteenth calendar day after the effective date of a bank holding company that qualifies as a financial holdthis order, and the transaction may not be consummated ing company and is engaged primarily in securities underlater than three months after the effective date of this order, writing and dealing, securities brokerage, investment adviunless such period is extended for good cause by the Board or by the Federal Reserve Bank of San Francisco, acting pursuant to delegated authority. 1. In connection with the reorganization, Applicants have also By order of the Board of Governors, effective March 14, requested the Board's approval under section 3 to acquire interests in 2003. the following banks: 5.2 percent of the voting shares of ITLA Capital Corporation, a bank holding company that controls Imperial Capital Bank, both in La Jolla, California; voting authority over 5.58 percent Voting for this action: Chairman Greenspan, Vice Chairman Ferguof the voting shares of Pacific Crest Capital, Inc., a bank holding son, and Governors Gramlich, Bies, Olson, Bernanke, and Kohn. company that controls Pacific Crest Bank, both in Agoura Hills, California; voting authority over 5.77 percent of the voting shares of ROBERT DEV. FRIERSON Hingham Institution for Savings, Hingham, Massachusetts; voting Deputy Secretary of the Board authority over 9.7 percent of the voting shares of Bancorp Rhode Island, Inc., Providence, a bank holding company that controls Bank Rhode Island, East Providence, both in Rhode Island; voting authority Orders Issued Under Sections 3 and 4 of the Bank over 5.1 percent of the voting shares of The Banc Corporation, Holding Company Act Birmingham, a bank holding company that controls The Bank, Warrior, both in Alabama; and voting authority over approximately 5.1 percent of the voting shares of Pacific Union Bank, Los Angeles, Forest Merger Corporation California. Arlington, Virginia Applicants have also requested the Board's permission under section 4 to acquire interests in the following savings associations: voting authority over 5.74 percent of the voting shares of First Bell Bancorp, FBR TRS Holdings, Inc. Inc., Pittsburgh, parent company of Bell Federal Savings and Loan Arlington, Virginia Association, Bellevue, both in Pennsylvania; voting authority over 5.67 percent of the voting shares of Quaker City Bancorp, Inc., parent company of Quaker City Bank, both in Whittier, California; and Order Approving Formation of Bank Holding voting authority over 6.1 percent of the voting shares of Hawthorne Companies and Determination on Financial Holding Financial Corporation, parent company of Hawthorne Savings, F.S.B., Company Elections both in El Segundo, California. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

220 Federal Reserve Bulletin • May 2003 sory, and merchant banking activities.2 In the United States, Financial, Managerial, and Other Supervisory FBRG conducts its securities and advisory activities Considerations through several subsidiaries subject to regulation by the Securities and Exchange Commission ("SEC"), including The BHC Act requires the Board to consider the financial Friedman, Billings, Ramsey & Co., Inc., Arlington, a and managerial resources and future prospects of the combroker-dealer registered with the SEC under section 15 of panies and banks involved in a proposal and certain other the Securities Exchange Act of 1934 (15 U.S.C. §78o). supervisory factors. In evaluating the financial and mana- Bank is the only bank controlled by FBRG and, with assets gerial factors, the Board has reviewed confidential examiof $90.2 million, it is the 107th largest depository institu- nation and other supervisory information evaluating the tion in Maryland. Bank controls deposits of approximately financial and managerial strength of Applicants; FBRG and $33.4 million in the state, representing less than 1 percent its affiliates, including its regulated subsidiaries; and Bank. of deposits in depository institutions in Maryland.3 After consummation of the proposal, New FBR would elect to be treated as a real estate investment trust ("REIT") under the Internal Revenue Code ("IR Code").5 Factors Governing Board Review of Transaction New FBR and its subsidiaries and affiliates would continue to engage only in activities that are permissible for a The BHC Act sets forth the factors that the Board must financial holding company under section 4(k) of the BHC consider when reviewing the formation of a bank holding Act. company or the acquisition of a bank. These factors are the Certain requirements applicable to New FBR under the competitive effects of the proposal in the relevant geo- IR Code might limit its ability to serve as a source of graphic markets; the financial and managerial resources financial strength to Bank, because the requirements may and future prospects of the companies and banks involved limit the amount of capital available to a bank subsidiary in the proposal; the convenience and needs of the commuof a bank holding company that is organized as a REIT.6 nities to be served, including the records of performance Applicants note, however, that New FBR may downstream under the Community Reinvestment Act (12 U.S.C. §2901 capital to Holdings and retain income earned at the Holdet seq.) ("CRA") of the insured depository institutions ings level to support the operations of Bank.7 involved in the transaction, and other supervisory factors. Applicants have also stated that, for a variety of business The Board has considered these factors in light of a reasons unrelated to the BHC Act requirements, Applicants record that includes information provided by FBRG, confiintend to discontinue being financial holding companies dential supervisory and examination information from variand to limit the activities of Bank to those of a limitedous federal agencies, and publicly reported financial and purpose trust company. In particular, Applicants have comother information. In addition, the Board has considered a mitted that, within six months of consummation of the public comment received on the proposal. proposed reorganization, Bank will limit its operations so that it no longer meets the definition of a bank under Competitive Considerations section 2(c)(1) of the BHC Act. New FBR would then cease to be a bank holding company. Section 3 of the BHC Act prohibits the Board from approv- Bank is currently well capitalized under relevant federal ing a proposal that would result in a monopoly or would be guidelines, and all the subsidiaries of FBRG that are subin furtherance of any attempt to monopolize the business of ject to regulatory capital requirements exceed the required banking in any relevant market. The BHC Act also prohib- minimum capital levels. The Board notes that after its the Board from approving a proposed bank acquisition accounting for certain requirements under the IR Code, that would substantially lessen competition in any relevant New FBR would have, pro forma, more than adequate banking market unless the anticompetitive effects of the capital to support the ongoing operations of Bank for six proposal are clearly outweighed in the public interest by months. the probable effect of the proposal in meeting the conve- The Board has carefully considered the financial and nience and needs of the community to be served.4 This managerial resources of Applicants and Bank in light of all proposal represents an internal reorganization of the exist- the facts of record, including commitments made by Appliing operations of FBRG and would not result in either an expansion of operations or the acquisition of an additional 5. See 12 U.S.C. §§856-860. bank. There is also no evidence in this case that the 6. Under the IR Code, the amount of non-REIT assets that a REIT transaction would lessen competition or create a monopoly may hold in a taxable REIT subsidiary, which is subject to taxation at in any relevant market. Based on all the facts of record, the ordinary corporate rates, is limited to 20 percent of the REIT's total assets. See 12 U.S.C. § 856(c). A REIT is also required to distrib- Board has determined that competitive factors are consisute 90 percent of its net income to its shareholders each year. See tent with approval of the proposal. 12 U.S.C. § 857(a). Holdings, which would be the parent of Bancorp and Bank, would be organized as a taxable REIT subsidiary. 7. Applicants note that income earned by a taxable REIT subsidi- 2. Asset data for FBRG are as of September 30, 2002. ary is not subject to the mandatory distribution requirement until paid 3. Asset data for Bank are as of December 31, 2002. Deposit and as a dividend to the REIT. Moreover, funds invested by a REIT in its ranking data are as of June 30, 2002. taxable REIT subsidiary are not subject to the mandatory distribution 4. 12 U.S.C. § 1842(c)(1). requirement. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 221 cants, and has concluded that considerations relating to the The Board has reviewed in detail Bank's record of financial and managerial resources and future prospects of performance under the CRA, as well as information prethe organizations involved are consistent with approval, as sented by Applicants related to the convenience and needs are other supervisory factors. factor. Before its acquisition by FBRG, Bank, then doing business as Rushmore Trust and Savings, FSB ("Rush- Convenience and Needs Considerations more"), received an overall rating of "satisfactory" from its primary federal supervisor, the Office of Thrift Super- In acting on a proposal under section 3 of the BHC Act, the vision ("OTS"), at its most recent evaluation for CRA Board is required to consider the effects of the proposal on performance, as of June 1999.11 the convenience and needs of the communities to be served Each of the institutions in which Applicants would have and take into account the records of the relevant depository an investment of less than 10 percent also received a institutions under the CRA.8 The CRA requires the federal "satisfactory" or better rating from its federal supervisory financial supervisory agencies to encourage financial insti- agency in its most recent examination for CRA perfortutions to help meet the credit needs of local communities mance.12 Moreover, examiners found no evidence of proin which they operate, consistent with safe and sound hibited discrimination, other illegal credit practices, or operation, and requires the appropriate federal supervisory violations of the fair lending laws at any of the depository agency to take into account the credit needs of its entire institutions involved in the proposal. community, include low- and moderate-income neighbor- Based on all the facts of record, the Board has concluded hoods, in evaluating bank holding company formation pro- that considerations related to the convenience and needs of posals. The Board has, therefore, carefully considered the the communities to be served, including the CRA perforeffect of the proposal on the convenience and needs of the mance records of the institutions involved, are consistent communities to be served in light of all the facts of record, with approval. including a comment received on the proposal, and the records of the relevant depository institutions under the Nonbanking Activities CRA.9 The Board has long held that consideration of the conve- In connection with the reorganization, Applicants have nience and needs factor includes a review of the records of also filed notices under section 4(c)(8) and (j) of the BHC the relevant depository institutions under the CRA. In this Act to retain interests of greater than 5 percent of the case, the Board notes that the proposal would effect a voting shares of three savings and loan associations held corporate reorganization and would not result in an expan- by FBRG and thereby engage in operating savings and sion of operations or the acquisition of an additional bank. loan associations.13 To approve the notices, the Board must In addition, FBRG holds a small number of shares as a determine that the proposed acquisitions may reasonably passive minority investor in several depository institutions be expected to produce benefits to the public that outweigh over which it exercises no control. possible adverse effects, such as undue concentration of As provided in the CRA, the Board evaluates the record resources, decreased or unfair competition, conflicts of of performance of an institution in light of examinations by interests, or unsound banking practices.14 the appropriate federal supervisors of the CRA perfor- FBRG has indicated that it expects the proposal would mance records of that institution. An institution's most improve the financial position and future business prosrecent CRA performance evaluation is a particularly impor- pects of the organization. The proposal also represents a tant consideration in the applications process because it reorganization of FBRG, and would not entail the acquisirepresents a detailed, on-site evaluation of the institution's tion of any new banking interests or commencement of any overall record of performance under the CRA by its appro- new nonbanking activities. Therefore, the Board has conpriate federal supervisor.10 and often controlling factor in the consideration of an institution's 8. See 12 U.S.C. § 2903(a)(2). CRA record. See 66 Federal Register 36,620 and 36,639 (2001). 9. The commenter expressed concern about several institutions in 11. Rushmore converted to a national bank immediately prior to its which Applicants would hold less than a 10 percent voting interest acquisition by FBRG in 2001. by asserting that Home Mortgage Disclosure Act (12 U.S.C. §2801 12. These institutions received the following ratings from the fedet seq.) ("HMDA") data reported by Hingham Institution for Savings eral supervisors as of the dates indicated: (1) Hingham, "satisfactory," ("Hingham") and Bell Federal Savings and Loan Association Federal Deposit Insurance Corporation ("FDIC"), January 2001; ("Bell") revealed a pattern of excluding African-American and His- (2) Bell, "satisfactory, " OTS, June 2001; (3) Imperial Capital Bank, panic communities and individuals in the Boston, Massachusetts, and "satisfactory," FDIC, March 2001; (4) Pacific Crest Bank, "satisfac- Pittsburgh, Pennsylvania, Metropolitan Statistical Areas ("MSA"). tory," FDIC, September 2002; (5) Quaker City Bank, "outstanding," The commenter also made a similar allegation based on a review of OTS, June 2001; (6) Hawthorne Savings Bank, F.S.B., "outstanding," the HMDA data of Pacific Crest Mortgage Company for loans made OTS, July 2002; (7) Bank Rhode Island, "satisfactory," FDIC, in the Riverside County, California, MSA. Pacific Crest Mortgage is July 2002; (8) The Bank, "satisfactory," Federal Reserve Bank of not affiliated with any company involved in this proposal. Atlanta, September 2001; and (9) Pacific Union Bank, "outstanding," The commenter also objected to one institution's participation in a FDIC, April 2001. loan program based on anticipated tax refunds. The Board notes that 13. The Board has previously determined that operating a savings neither FBRG nor its subsidiaries or affiliates makes this type of loan. association is closely related to banking for purposes of section 4(c)(8) 10. The Interagency Questions and Answers Regarding Commu- of the BHC Act. See 12 C.F.R. 225.28(b)(4)(ii). nity Reinvestment provide that a CRA examination is an important 14. See 12 U.S.C. § 1843(j)(2)(A). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

222 Federal Reserve Bulletin • May 2003 eluded that the conduct of the proposed nonbanking activi- Financial Holding Company Elections ties within the framework established in this order, prior orders, and Regulation Y is unlikely to result in any of the Applicants have also filed with the Board elections to adverse effects noted above that would not be outweighed become financial holding companies pursuant to secby the public benefits of the proposal, such as gains in tion 4(k) and (I) of the BHC Act and section 225.82 of efficiency. Regulation Y. Applicants have certified that Bank is well Accordingly, based on all the facts of record, the Board capitalized and well managed and have provided all the has determined that the balance of public interest factors information required under Regulation Y. that it must consider under the standard of section 4(j) of The Board has reviewed the examination ratings the BHC Act is favorable and consistent with approval. received by Bank under the CRA and other relevant examinations and information. Based on all the facts of record, the Board has determined that these elections to become Conclusion Regarding Bank Holding Company financial holding companies will become effective on con- Formation summation of the proposal, if on that date Bank remains well capitalized and well managed and has at least a Based on the foregoing, the Board has determined that satisfactory CRA rating. the applications and notices should be, and hereby are, approved.15 In reaching its conclusion, the Board has con- By order of the Board of Governors, effective March 14, 2003. sidered all the facts of record in light of the factors the Board is required to consider under the BHC Act. Voting for this action: Chairman Greenspan, Vice Chairman Fergu- The Board's approval is specifically conditioned on son, and Governors Gramlich, Bies, Olson, Bernanke, and Kohn. compliance by Applicants with all the commitments made in connection with the applications and notices. For pur- ROBERT DEV. FRIERSON poses of this action, the commitments relied on by the Deputy Secretary of the Board Board in reaching its decision are deemed to be conditions imposed in writing by the Board in connection with its findings and decision and, as such, may be enforced in M&T Bank Corporation proceedings under applicable law. Buffalo, New York The banking acquisitions shall not be consummated before the fifteenth calendar day after the effective date of Order Approving the Acquisition of a Bank Holding this order, and the proposal shall not be consummated later Company, Merger of Banks, and Establishment of than three months after the effective date of this order, Branches unless such periods are extended for good cause by the Board or the Federal Reserve Bank of Richmond, acting M&T Bank Corporation ("M&T"), a bank holding compursuant to delegated authority. pany within the meaning of the Bank Holding Company Act ("BHC Act"), has requested the Board's approval under section 3 of the BHC Act (12 U.S.C. § 1842) to 15. The commenter requested that the Board hold a hearing on the merge with Allfirst Financial Inc. ("Allfirst") and thereby proposal. Section 3 of the BHC Act does not require the Board to hold acquire Allfirst's subsidiary banks, including its lead suba public hearing on an application unless the appropriate supervisory sidiary bank, Allfirst Bank, both in Baltimore, Maryland.1 authority for the bank to be acquired makes a timely written recom- In addition, M&T has requested the Board's approval mendation of denial of the application. The Board has not received such a recommendation from the appropriate supervisory authority. under section 4(c)(8) and (j) of the BHC Act (12 U.S.C. The Board's regulations provide for a hearing under section 4 of the § 1843(c)(8) and (j)) and section 225.24 of the Board's BHC Act if there are disputed issues of material fact that cannot be Regulation Y (12 C.F.R. 225.24) to acquire the nonbanking resolved in some other manner. 12 C.F.R. 225.25(a)(2). Under its subsidiaries of Allfirst.2 M&T also has filed notice under rules, the Board also may, in its discretion, hold a public meeting or section 4(c)(13) of the BHC Act (12 U.S.C. § 1843(c)(13)) hearing on an application to acquire a bank if a meeting or hearing is necessary or appropriate to clarify factual issues related to the applica- and subpart A of the Board's Regulation K (12 C.F.R. 211, tion and to provide an opportunity for testimony. 12 C.F.R. 225.16(e). subpart A) to acquire certain foreign investments con- The Board has considered carefully the commenter's request in trolled by Allfirst. light of all the facts of record. In the Board's view, the public has had ample opportunity to submit comments on the proposal, and in fact, the commenter has submitted a written comment that the Board has considered carefully in acting on the proposal. The request fails to identify disputed issues of fact that are material to the Board's decision that would be clarified by a public meeting or hearing. 1. Allfirst's other subsidiary bank is Allfirst Financial Center, N.A., Moreover, the commenter's request fails to demonstrate why its Millsboro, Delaware ("Allfirst Delaware"). M&T would acquire Allwritten comments do not present its views adequately or why a first from Allied Irish Banks, p.l.c., Dublin, Ireland ("Allied Irish"), in meeting or hearing would otherwise be necessary or appropriate. For exchange for shares of M&T and other consideration. Allied Irish has these reasons, and based on all the facts of record, the Board has filed a related application to acquire the shares of M&T. By order determined that a public meeting or hearing is not required or war- dated today, the Board has approved the Allied Irish proposal. Allied ranted in this case. Accordingly, the request for a hearing on the Irish Banks, p.l.c. (Order dated March 11, 2003). proposal is denied. 2. The nonbanking subsidiaries are listed in Appendix A. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 223 M&T's lead bank, Manufacturers and Traders Trust in the United States, with total consolidated assets of Company, also in Buffalo ("Trust Company"), a state $52.4 billion, representing less than 1 percent of total member bank, has applied under section 18(c) of the Fed- banking assets. M&T would remain the sixth largest bankeral Deposit Insurance Act (12 U.S.C. § 1828(c)) (the ing organization in Pennsylvania, controlling deposits of "Bank Merger Act") to merge with Allfirst Bank, with $8.1 billion, representing approximately 4.3 percent of Trust Company as the surviving institution. In addition, state deposits, and the second largest banking organization Trust Company proposes to retain and operate branches at in Maryland, controlling deposits of approximately $8 bilthe locations of the main office and branches of Allfirst lion, representing approximately 11.3 percent of state Bank,3 including Allfirst Bank's foreign branch in George deposits.6 Town, Cayman Islands. Notice of the proposal, affording interested persons an Interstate Analysis opportunity to submit comments, has been published in accordance with the BHC Act, the Bank Merger Act, and Section 3(d) of the BHC Act allows the Board to approve the Board's Rules of Procedure (12 C.F.R. 262.3(b)) in the an application by a bank holding company to acquire Federal Register (67 Federal Register 69,223 (2002)) and control of a bank located in a state other than the home locally. As required by the Bank Merger Act, reports on the state of the bank holding company if certain conditions are competitive effects of the merger were requested from the met. The Board may not approve a proposal subject to United States Attorney General, Federal Deposit Insurance section 3(d) if, after consummation, the applicant would Corporation, and the Office of the Comptroller of the control more than 10 percent of the total deposits of Currency. The time for filing comments has expired, and insured depository institutions in the United States.7 In the Board has considered the proposal and all comments addition, the Board may not approve a proposal if, after received in light of the factors set forth in sections 3 and 4 consummation of the proposal, the applicant would control of the BHC Act, the Bank Merger Act, and the statutory 30 percent or more of the total deposits of insured deposiprovisions that govern the retention and operation of inter- tory institutions in any state in which both the applicant state branches. and the organization to be acquired operate an insured M&T, with total consolidated assets of $34.1 billion, is depository institution, or such higher or lower percentage the 33rd largest commercial banking organization in the as established by state law.8 United States, controlling less than 1 percent of the total For purposes of the BHC Act, the home state of M&T is assets of insured commercial banks in the United States New York, the home state of Allfirst is Maryland, and ("total banking assets").4 M&T operates banks in Mary- Allfirst's subsidiary banks are located in Delaware, the land, New York, Pennsylvania, and West Virginia. M&T is District of Columbia, Maryland, Pennsylvania, and Virthe sixth largest banking organization in New York, con- ginia.9 On consummation of the proposal, M&T would trolling deposits of $15.7 billion, representing approxi- control less than 1 percent of the total deposits of insured mately 3 percent of total deposits in depository institutions depository institutions in the United States.10 M&T would in the state ("state deposits").5 M&T is the sixth largest control less than 30 percent of total deposits held by banking organization in Pennsylvania, controlling deposits insured depository institutions in Maryland or Pennsylof $4.5 billion, representing approximately 2.4 percent of vania, the only states in which both M&T and Allfirst state deposits, and the seventeenth largest banking organi- operate banks.11 zation in Maryland, controlling deposits of $470 million, All other requirements of section 3(d) of the BHC Act representing less than 1 percent of state deposits. are met. M&T is adequately capitalized and adequately Allfirst, with total consolidated assets of $18.3 billion, is managed, as defined by applicable law. In addition, Allthe 46th largest commercial banking organization in the first's subsidiary banks have been in existence for the United States, controlling less than 1 percent of total bank- minimum age requirements established by applicable state ing assets. The banks owned by Allfirst operate in Delaware, the District of Columbia, Maryland, Pennsylvania, 6. M&T does not currently control deposits in Delaware, the Disand Virginia. Allfirst is the second largest banking organi- trict of Columbia, or Virginia, so the percentage of deposits in those states would not increase on consummation of this proposal. zation in Maryland, controlling deposits of $7.5 billion, 7. 12 U.S.C. § 1842(d)(2)(A). Insured depository institutions representing approximately 10.6 percent of state deposits, include all insured banks, savings banks, and savings associations. and the eighth largest banking organization in Pennsyl- 8. 12 U.S.C. § 1842(d)(2)(BMD). vania, controlling deposits of $3.6 billion, representing 9. A bank holding company's home state is the state in which the approximately 1.9 percent of state deposits. total deposits of all banking subsidiaries of the company were the largest on July 1, 1966, or the date on which the company became a After consummation of the proposal, M&T would bank holding company, whichever is later. 12 U.S.C. § 1841(o)(4)(C). become the 22nd largest commercial banking organization For purposes of section 3(d) of the BHC Act, the Board considers a bank to be located in the states in which the bank is chartered, 3. See 12 U.S.C §§321, 601, and 1831u. The branches are listed in headquartered, or operates a branch. Appendix B. 10. Data are as of June 30, 2002. 4. Asset data are as of September 30, 2002. 11. Maryland's deposit cap is the same as that set forth in sec- 5. Unless otherwise noted, depository institutions include commer- tion 3(d)(2)(B) of the BHC Act. See Md. Code Ann., Fin. Inst. cial banks, savings banks, and savings associations. Deposit data are §5-906(b) (Michie 2001) (30 percent). Pennsylvania does not have a as of June 30, 2002. deposit cap applicable to the proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

224 Federal Reserve Bulletin • May 2003 law.12 Based on a review of all the facts of record, includ- Consummation of the proposal would be consistent with ing a review of relevant state statutes, the Board finds that Board precedent and the DOJ Guidelines in all relevant all conditions for an interstate acquisition enumerated in banking markets. After consummation of the proposal, one section 3(d) are met in this case. In light of all the facts of market would remain unconcentrated and six markets record, the Board is permitted to approve the proposal would remain moderately concentrated as measured by the under section 3(d) of the BHC Act. HHI. The Department of Justice has reviewed the proposal and advised the Board that its consummation would not Competitive Factors likely have a significantly adverse effect on competition in any relevant banking market. In addition, no banking The Bank Merger Act and section 3 of the BHC Act agency has indicated that the proposal raises competitive prohibit the Board from approving a proposal that would issues. Based on these and all the facts of record, the Board result in a monopoly or be in furtherance of a monopoly.13 concludes that consummation of the proposal is not likely The acts also prohibit the Board from approving a proposal to result in any significantly adverse effects on competition that would substantially lessen competition in any relevant or on the concentration of banking resources in the banking banking market unless the anticompetitive effects of the markets noted above or in any other relevant banking proposal in that banking market are clearly outweighed in market. the public interest by the probable effect of the proposal in meeting the convenience and needs of the community to be Financial, Managerial, and Other Supervisory Factors served.14 M&T and Allfirst compete directly in seven banking The Bank Merger Act and section 3 of the BHC Act also markets.15 The Board has reviewed carefully the competi- require that the Board consider the financial and managetive effects of the proposal in each of these banking mar- rial resources and future prospects of the organizations kets in light of all the facts of record, including the number involved in a proposal as well as certain other supervisory of competitors that would remain in the markets, the rela- factors under the BHC Act.18 The Board has considered tive share of total deposits in depository institutions con- carefully the financial and managerial resources and future trolled by M&T and Allfirst in the markets ("market depos- prospects of M&T, Allfirst, and their respective subsidiary its"),16 the concentration level of market deposits and the banks and other supervisory factors in light of all the facts increase in this level as measured by the Herfindahl- of record, including comments received on the proposal, Hirschman Index ("HHI") under the Department of Justice reports of examination and other confidential supervisory Merger Guidelines ("DOJ Guidelines"),17 and other char- information assessing the financial and managerial acteristics of the markets. resources of the organizations, and information provided by M&T and Allfirst. Based on all the facts of record, the Board concludes that considerations relating to the finan- 12. Pursuant to 12 U.S.C. § 1842(d)(l)(B)(ii), the applicable age cial and managerial resources and future prospects of the requirement for the District of Columbia is five years. See D.C. Code organizations involved are consistent with approval, as are Ann. §26-706.01(a). Delaware, Maryland, Pennsylvania, and Virginia the other supervisory factors that the Board must consider do not have minimum age requirements applicable to the proposal. The Board also has taken into account M&T's record of compliance under section 3 of the BHC Act. with applicable state community reinvestment laws. 13. 12 U.S.C. §§ 1828(c)(5)(A) and 1842(c)(1)(A). Convenience and Needs Factor 14. See 12 U.S.C. §§ 1828(c)(5)(B) and 1842(c)(1)(B). 15. The markets are described in Appendix C. The proposal's effects on the concentration of banking resources in them are dis- In acting on proposals under the Bank Merger Act and cussed in Appendix D. section 3 of the BHC Act, the Board is required to consider 16. Deposit and market share data are based on annual branch the effect of the proposal on the convenience and needs of reports filed as of June 30, 2002, and on calculations in which the the communities to be served.19 The Community Reinvestdeposits of thrift institutions are included at 50 percent. The Board has previously indicated that thrift institutions have become, or have the ment Act (12 U.S.C. §2901 et seq.) ("CRA") requires that potential to become, significant competitors of commercial banks. each insured depository institution be assessed on its record See, e.g., Midwest Financial Group, 75 Federal Reserve Bulletin 386 of meeting the credit needs of its entire community, includ- (1989); National City Corporation, 70 Federal Reserve Bulletin 743 ing low- and moderate-income ("LMI") neighborhoods, (1984). Thus, the Board regularly has included thrift deposits in the calculation of market share on a 50 percent weighted basis. See, e.g., consistent with safe and sound operation of the institution. First Hawaiian, Inc., 77 Federal Reserve Bulletin 52 (1991). The CRA requires the Board, in evaluating proposals under 17. Under the DOJ Guidelines, 49 Federal Register 26,823 (1984), the Bank Merger Act and section 3 of the BHC Act, to take a market is considered unconcentrated if the post merger HHI is under into account the CRA performance records of the insured 1000, and moderately concentrated if the post merger HHI is between depository institutions involved.20 The Board has carefully 1000 and 1800. The Department of Justice has informed the Board considered the convenience and needs factor and the CRA that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless performance records of each subsidiary bank of M&T and the post merger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The Department has stated that the higher than normal HHI thresholds for screening bank mergers for anticom- 18. 12 U.S.C. §§ 1828(c)(5) and 1842(c). petitive effects implicitly recognize the competitive effects of limited- 19. 12 U.S.C. §§ 1828(c)(5) and 1842(c)(2). purpose lenders and other nondepository financial institutions. 20. 12 U.S.C. §§ 2903(a)(2) and 2902(4). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 225 Allfirst in light of all the facts of record, including public ment, and service performance tests.24 Examiners characcomments on the proposal. terized the level of Trust Company's responsiveness to retail credit needs in its assessment areas as excellent. Trust Company and its affiliates originated and purchased A. Summary of Public Comments more than $4.3 billion of HMDA-reportable loans during the review period. Examiners concluded that Trust Com- Two commenters submitted letters about the proposal. One pany's lending was good in terms of overall geographic commenter contended, based on data submitted under the distribution and distribution to borrowers of different Home Mortgage Disclosure Act (12 U.S.C. §2801 et seq.) income levels. ("HMDA"), that M&T engaged in disparate treatment of minority individuals in home mortgage lending, and that Examiners stated that Trust Company offered a number M&T denied loan applications from minorities more fre- of innovative and flexible lending products to increase quently than it denied applications from nonminorities. lending in LMI geographies and to LMI borrowers, includ- The other commenter asserted that M&T's branch distribu- ing Federal Housing Administration ("FHA") mortgages, tion in the New York Consolidated Metropolitan Statistical which were offered throughout Trust Company's assess- Area ("CMSA") was inadequate, and that although 30 per- ment areas. During the review period, Trust Company cent of the tracts in the assessment area were LMI tracts, made 674 mortgage loans totaling $40 million through a only 14 percent of M&T's branches were in LMI tracts. program that featured below-market interest rates, reduced That commenter also expressed concern about M&T's down-payment requirements, and other favorable terms. commitment to retaining branches in New York City's Trust Company made more than 19,800 small business LMI neighborhoods. loans during the review period, totaling more than $2.5 billion.25 Examiners noted that Trust Company had a good distribution of loans to businesses of different sizes B. CRA Performance Examinations throughout its assessment areas. Examiners characterized Trust Company's community An institution's most recent CRA performance evaluation development lending performance as excellent. During the is a particularly important consideration in the applications evaluation period, Trust Company extended qualified comprocess because it represents a detailed evaluation of the munity development loan commitments totaling $294 milinstitution's overall record of performance under the CRA lion and issued $35 million in letters of credit for affordby its appropriate federal supervisor.21 Both of M&T's able housing and other community development purposes. subsidiary banks received ratings of "satisfactory" or bet- Examiners concluded that Trust Company's $92 million ter in the most recent examinations of their CRA perforin loan commitments to LMI healthcare facility projects mance. Trust Company, which accounts for approximately for the elderly indicated a high level of responsiveness to 98 percent of the total consolidated assets of M&T, community credit needs in light of the large elderly populareceived an "outstanding" rating from the Federal Reserve tion in many of Trust Company's assessment areas. Bank of New York, as of June 2002 ("2002 Evaluation"). Examiners stated that Trust Company's community Trust Company also received an "outstanding" rating from development investments exhibited excellent responsivethe New York State Banking Department, as of April 2000. ness to the most urgent credit and community development M&T Bank, National Association, Oakfield, New York, needs in its assessment areas. Trust Company's qualified received a "satisfactory" rating from the Office of the investments totaled $56 million, including investments of Comptroller of the Currency, as of January 2000. $40 million during the evaluation period. Examiners Allfirst Bank received a "satisfactory" rating from the reported that $7 million in investments were for revitaliz- Federal Reserve Bank of Richmond, as of January 2001 ing inner cities, which examiners described as a critical ("2001 Evaluation").22 M&T has stated that it intends to need in Trust Company's assessment areas in upstate retain Allfirst Bank's CRA program and structure after New York. Examiners also noted grants totaling $1.1 milconsummation of the proposal to assist M&T in ascertainlion to a school in an LMI area, which examiners considing the needs of the communities served by Allfirst. ered to be a nonroutine investment. Examiners concluded that Trust Company's branches C. CRA Performance of Trust Company were readily accessible to all portions of its assessment areas.26 Examiners stated that Trust Company also Overview: In the 2002 Evaluation,23 Trust Company received "outstanding" ratings under the lending, invest- 24. Trust Company elected to have the Federal Reserve Bank of New York ("FRBNY") consider the lending activity in its assessment areas by certain Trust Company subsidiaries and affiliates, including 21. See Interagency Questions and Answers Regarding Community M&T Mortgage Corporation and M&T Real Estate, Inc., both in Reinvestment, 66 Federal Register 36,620 and 36,639 (2001). Buffalo, New York, and subsidiaries of Trust Company, and M&T 22. Allfirst Delaware does not grant credit to the public in the Bank, National Association, a direct subsidiary of M&T. ordinary course of business, and it is treated as a special purpose bank 25. For purposes of this analysis, small business loans are business that is not subject to evaluation under the CRA. See 12 C.F.R. loans with an original amount of $1 million or less. 25.11(b)(3). 26. One commenter referred to portions of the previous CRA 23. The 2002 Evaluation covered a review period of January 1, evaluation of Trust Company, as of June 2000 ("2000 Evaluation"), 2000, through December 31, 2001. which assessed Trust Company's branch distribution as weak in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

226 Federal Reserve Bulletin • May 2003 enhanced distribution of banking services through ATMs, Company's distribution of HMDA-reportable loans to on-line banking, telephone banking, and other alternative moderate-income borrowers as good. To assist LMI bordelivery systems. They further noted that Trust Company rowers in New York, Trust Company offered loans through offered Lifeline Checking Accounts, an electronic benefits the Federal National Mortgage Association (Fannie Mae) transfer program, low-fee checking accounts for nonprofit "Get Started" program, as well as FHA mortgages and organizations, and other products designed to directly or flexible mortgages through the State of New York Mortindirectly assist LMI individuals. gage Association. Examiners described Trust Company as a leader in pro- During the review period, Trust Company originated viding community development services. During the and purchased nearly 16,000 small business or small farm review period, Trust Company employees participated in loans in New York, totaling almost $2 billion. Examiners more than 400 workshops, seminars, and conferences stated that Trust Company's distribution of loans among throughout its assessment areas and provided technical businesses of different sizes was good. assistance to more than 100 organizations that addressed Examiners described Trust Company's community the needs of LMI individuals and communities. Trust development lending performance as excellent.29 Trust Company also participated in the Federal Home Loan Company's loan commitments in New York during the Bank Affordable Housing Program by sponsoring 24 grant review period totaled $246 million, and Trust Company applications to construct and rehabilitate housing for LMI also provided $30 million in letters of credit. Examiners individuals. reported that Trust Company's community development New York. In the 2002 Evaluation, Trust Company lending for affordable housing, an identified credit need in received an "outstanding" rating under the lending test in Trust Company's assessment areas, totaled $136 million. its New York assessment areas.27 During the review period, In the 2002 Evaluation, Trust Company received an Trust Company originated or purchased HMDA-reportable "outstanding" rating under the investment test in its loans in New York totaling more than $3.36 billion. Exam- New York assessment areas. Examiners stated that Trust iners reported that in 2000, Trust Company's 3 percent Company's level of qualified community development market share of deposits in its assessment areas compared investments, which totaled $44 million, exhibited excellent favorably with its 3 percent market share of all HMDA- responsiveness to credit and community development needs reportable loans originated or purchased in New York in New York. More than $20 million of the investments State. were invested on a statewide basis, including $10 million in Examiners concluded that the distribution of Trust Com- collateral trust notes to develop affordable housing, $5 milpany's HMDA-reportable loans among borrowers of differ- lion in mortgage-backed securities to fund loans to LMI ent income levels was good, as was the geographic dis- borrowers, and $4 million to community development orgatribution of its lending. Examiners stated that Trust nizations. Examiners reported that Trust Company also Company's distribution of HMDA-reportable loans to low- invested $2 million in projects qualifying for low-income income borrowers was adequate and consistent with avail- housing tax credits and contributed $4 million to support able lending opportunities, which had been limited by charitable community development projects and programs. economic conditions and by disparities between housing Trust Company received an "outstanding" rating under prices and income levels.28 Examiners characterized Trust the service test in the New York assessment areas. Examiners stated that Trust Company's branches were readily accessible to all geographies and to individuals of different service to LMI census tracts in the New York-Northern New Jersey- Long Island-Connecticut Consolidated Metropolitan Statistical Area income levels and that variations in products and services ("New York CMSA"). The 2002 Evaluation rated Trust Company as did not inconvenience LMI individuals or customers in "outstanding" for its performance under the service test in the New LMI geographies. Examiners also reported that Trust Com- York CMSA. The 2002 Evaluation noted that an increased percentage pany organized or participated in many workshops on of Trust Company's branches in the New York CMSA were in LMI affordable housing and financial literacy. In addition, Trust census tracts compared with 2000, and that a number of branches were contiguous to LMI census tracts in the New York CMSA. Company employees served on the boards and committees Examiners also reported in the 2002 Evaluation that Trust Company's of organizations that addressed the needs of LMI individualternative delivery systems enhanced its distribution of banking als and communities. services in the New York CMSA. 27. Trust Company's New York assessment areas in the 2002 Evaluation consisted of a portion of the New York CMSA; the 29. One commenter urged that Trust Company increase its commu- Buffalo-Niagara Falls, Rochester, Albany-Schenectady-Troy, Utica- nity development lending to nonprofit organizations and its staffing Rome, Binghamton, and Jamestown Metropolitan Statistical Areas levels for community development programs in New York City. The ("MSAs"); portions of the Syracuse and Elmira MSAs; Seneca, CRA requires that, in considering an acquisition proposal, the Board Tompkins, Wyoming, Cattaraugus, Sullivan, and Ulster Counties; and carefully review the actual performance records of the relevant deposiportions of Courtland, Steuben, and Allegany Counties. tory institutions in helping to meet the credit needs of their communi- 28. One commenter, citing the 2000 Evaluation, asserted that Trust ties. Neither the CRA nor the federal banking agencies' CRA regula- Company's lending to low-income borrowers in the New York CSMA tions require depository institutions to provide commitments for future was weak. The 2002 Evaluation noted that Trust Company's perfor- performance or staffing levels. Trust Company's CRA-related activimance exceeded the performance of lenders in the aggregate ("aggre- ties will be reviewed by the FRBNY in future performance evaluagate lenders") in the New York CMSA and that the high cost of real tions, and its CRA performance record will be considered in any estate and the relatively low incomes in the New York CSMA limited subsequent applications by Trust Company to acquire a depository home ownership opportunities for low-income families. institution. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 227 Pennsylvania. Examiners noted that during the review investments in agencies engaged in community revitalizaperiod, Trust Company significantly expanded its presence tion totaled $1.5 million and that its grants to community in Pennsylvania as a result of Trust Company's merger development organizations totaled more than $1 million. in October 2000 with Keystone Financial Bank, National Trust Company received an "outstanding" rating under Association, Harrisburg, Pennsylvania.30 Accordingly, the service test in the Pennylvania assessment areas. Exam- Trust Company was engaged in integrating and developing iners stated that Trust Company's branches were readily products, systems, and staff during the review period. accessible to all geographies and to individuals of different The 2002 Evaluation rated Trust Company's perfor- income levels and that variations in products and services mance under the lending test as "high satisfactory" in its did not inconvenience LMI individuals or customers in Pennsylvania assessment areas. During the review period, LMI geographies. Examiners also reported that Trust Com- Trust Company originated or purchased HMDA-reportable pany organized or participated in many workshops on loans in Pennsylvania totaling more than $757 million. affordable housing and financial literacy. In addition, Trust Examiners concluded that the geographic distribution of Company employees served on the boards and committees Trust Company's HMDA-reportable loans was good, as of organizations that addressed the needs of LMI individuwas distribution among borrowers of different income lev- als and communities. els. Examiners characterized Trust Company's distribution of HMDA-reportable loans to moderate-income borrowers D. CRA Performance of Allfirst Bank as good and its distribution to low-income borrowers as adequate. During the review period, Trust Company made In the 2001 Evaluation, Allfirst Bank received "high satis- 286 home purchase loans in Pennsylvania through its factory" ratings under the lending, investment, and service Opportunity Loan program, which focuses on LMI borrow- performance tests.31 Allfirst Bank originated and purchased ers and features reduced down-payment requirements, HMDA-reportable loans totaling more than $750 million in prepurchase counseling, and options for financing closing its assessment areas during the review period. Examiners costs. concluded that the overall distribution of loans to borrow- During the review period, Trust Company originated ers of different income levels was good, and loan penetraand purchased more than 2,100 small business loans in tion for LMI geographies ranged from good to excellent in Pennsylvania, totaling more than $247 million. Examiners Allfirst Bank's assessment areas. reported that Trust Company's distribution of loans among Examiners noted that Allfirst Bank assisted LMI borrowbusinesses of different sizes was good. ers in obtaining affordable housing by offering FHA and Examiners described Trust Company's community Department of Veterans Affairs ("VA") loans and other development lending performance as good. Trust Com- mortgage loans through state and local affordable housing pany's loan commitments totaled $43 million, and Trust programs. In 2000, Allfirst Bank originated 459 mortgage Company also provided $5 million in letters of credit loans through these programs, totaling $93.4 million. to support economic development. Examiners noted that Allfirst Bank made more than 6,100 small business loans Trust Company's lending commitments for affordable in its assessment areas during the review period, totaling housing totaled $16 million and that its commitments for more than $695 million. Examiners stated that the bank's economic development totaled $26 million. record of lending to businesses of different sizes ranged In the 2002 Evaluation, Trust Company received an from adequate to good, while its small business loan pen- "outstanding" rating under the investment test in its Penn- etration for LMI geographies ranged from good to excelsylvania assessment areas. Examiners stated that Trust lent. Examiners noted that Allfirst Bank originated 108 Company's level of qualified community development Small Business Administration loans, totaling $21 million investments, which totaled $11.4 million, demonstrated during 2000. Examiners reported that Allfirst Bank made a strong responsiveness to credit and community developrelatively high level of community development loans durment needs. Examiners favorably cited Trust Company's ing the review period, totaling almost $101 million. $2.3 million investment in a small business investment Allfirst Bank's qualified community development investcompany that financed small- and medium-sized manufacments during the review period consisted primarily of turing, distribution, and service companies in eastern Penninvestments in projects qualifying for low-income housing sylvania. Examiners also noted that Trust Company's tax credits. Examiners noted that the bank had created the Allfirst Affordable Housing Fund, which promoted afford- 30. Before the review period, Trust Company's Pennsylvania able housing by facilitating investment in projects qualifybranches operated in the Scranton-Wilkes-Barre-Hazleton MSA. ing for low-income housing tax credits and by providing After the merger with Keystone Financial Bank, National Association, Trust Company's Pennsylvania assessment areas for the review period bridge financing to developers. During the review period, consisted of the Pennsylvania portions of the Philadelphia- Allfirst Bank also made community development grants Wilmington-Atlantic City, PA-NJ-DE-MD CMSA; the Harrisburg- and contributions totaling $3.3 million. Lebanon-Carlisle, Scranton-Wilkes-Barre-Hazleton, Altoona, State Examiners considered Allfirst Bank's branch and ATM College, Reading, York, Allentown-Bethlehem-Easton, and Williamlocations to be readily accessible to all portions of the sport MSAs, in Pennsylvania; a portion of the Lancaster MSA, in Pennsylvania; and Adams, Bedford, Bradford, Clearfield, Clinton, Franklin, Huntingdon, Monroe, Montour, Northumberland, Schuylkill, 31. The 2001 Evaluation covered a review period of January 1, Snyder, Sullivan, Tioga, and Union Counties. 1999, through December 31, 2000. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

228 Federal Reserve Bulletin • May 2003 bank's assessment areas. Examiners also noted that Allfirst Because of the limitations of HMDA data, the Board has Bank provided affordable homebuying workshops and carefully considered the data and comments in light of seminars and counseling to small business owners. other information. Examiners conducting a fair lending review of Trust Company in connection with the 2002 E. HMDA Data Evaluation reviewed loan applications from the Buffalo MSA and found that credit criteria were consistently The Board also has considered M&T's lending record in applied to all applicants regardless of race. Examiners light of comments on the 2001 HMDA data reported by discovered no evidence of prohibited discrimination or M&T's subsidiaries. The Board notes that 2001 HMDA other illegal credit practices. The Board has also considdata indicate that M&T's denial disparity ratio for His- ered the HMDA data in light of the overall lending records panic applicants was higher than the denial disparity of M&T and Allfirst. Those records, which include the ratio for the aggregate lenders in five of the six MSAs programs discussed above, show that the organizations' reviewed.32 In addition, M&T's denial disparity ratio for subsidiary banks make credit available to all applicant African Americans was higher than the denial disparity groups and significantly help to meet the credit needs of ratios for aggregate lenders in the two MSAs in which, of their communities, including LMI areas. the six MSAs reviewed, M&T made most of its mortgage loans. The data reviewed also indicate that the percentages F. Conclusion on the Convenience and Needs Factor of M&T's total HMDA-reportable loans to African- American and Hispanic individuals in 2001 were below the In reviewing the proposal's effect on the convenience and percentages for the aggregate lenders in three MSAs and needs of the communities to be served by the combined above the percentages for the aggregate lenders in three organization, the Board has carefully considered the entire MSAs.33 Finally, the percentage of M&T's total HMDA- record, including the public comments received and reports reportable loans to LMI individuals in 2001 exceeded the of examinations of the CRA performance of the institupercentage for the aggregate lenders in five of the six tions involved. Based on all the facts of record, and for the MSAs reviewed. reasons discussed above, the Board concludes that consid- The Board is concerned when an institution's record erations relating to the convenience and needs factor, indicates disparities in lending and believes that all banks including the CRA performance records of the releare obligated to ensure that their lending practices are vant insured depository institutions, are consistent with based on criteria that ensure not only safe and sound approval of the proposal. banking, but also equal access to credit by creditworthy applicants regardless of their race or income level. The Nonbanking Activities Board recognizes, however, that HMDA data alone provide an incomplete measure of an institution's lending in its M&T also has filed notice under section 4(c)(8) and (j) of community because the data cover only a few categories of the BHC Act to acquire nonbanking subsidiaries of Allfirst. housing-related lending. HMDA data, moreover, provide The Board has determined by regulation that the types of only limited information about the covered loans.34 HMDA activities for which notice has been provided are closely data, therefore, have limitations that make the data an related to banking for purposes of section 4(c)(8) of the inadequate basis, absent other information, for concluding BHC Act and, therefore, permissible for bank holding that an institution has not adequately assisted in meeting its companies.35 M&T has committed to conduct the nonbankcommunity's credit needs or has engaged in illegal lending ing activities in accordance with the Board's regulations discrimination. and orders governing these activities for bank holding companies. To approve this notice, the Board must determine that 32. The denial disparity ratio compares the denial rate for minority loan applicants with that for nonminority applicants. The Board the proposed activities "can reasonably be expected to reviewed the 2000 and 2001 HMDA data for Trust Company and its produce benefits to the public . . . that outweigh possible affiliates in the following MSAs: Buffalo, New York City, and adverse effects, such as undue concentration of resources, Nassau-Suffolk, New York; Philadelphia and Harrisburg, Pennsyldecreased or unfair competition, conflicts of interests, or vania; and Baltimore, Maryland. The Board's review included the unsound banking practices."36 HMDA data for M&T Mortgage Corporation and M&T Real Estate, Inc. As part of its evaluation of the public interest factors, the 33. The data indicate that the percentages of Trust Company's total Board considered the financial condition and managerial HMDA-reportable loans to minorities were not markedly below the resources of M&T and its subsidiaries, including the compercentages for the aggregate lenders in the three MSAs in which panies to be acquired, and the effect of the proposed Trust Company lagged those lenders. transaction on those resources. For the reasons noted 34. The data, for example, do not account for the possibility that an institution's outreach efforts may attract a larger proportion of margin- above, and based on all the facts of record, the Board has ally qualified applicants than other institutions attract and do not concluded that financial and managerial considerations are provide a basis for an independent assessment of whether an applicant consistent with approval of the proposal. who was denied credit was, in fact, creditworthy. Credit history problems and excessive debt levels relative to income (reasons most frequently cited for a credit denial) are not available from HMDA 35. See 12 C.F.R. 225.28(b)(1), (3), (6), (11), and (14). data. 36. 12 U.S.C. §1843(j)(2)(A). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 229 The Board also has considered the competitive effects of notices should be, and hereby are, approved.38 In reaching the proposed transaction under section 4 of the BHC Act. its conclusion, the Board has considered all the facts of To the extent that M&T and Allfirst offer different types of record in light of the factors it is required to consider under nonbanking products or services, the proposal would not the BHC Act, the Bank Merger Act, the Federal Reserve result in a significant loss of competition. M&T and Allfirst Act, and the statutory factors it is required to consider compete directly in the following activities: originating and when reviewing an application for retaining and operating servicing capital equipment leases, providing credit-related branches.39 The Board's approval is specifically condiinsurance, providing commercial real estate lending ser- tioned on compliance by M&T with all the commitments vices, and providing financial and investment advisory made in connection with these applications and notices and services. The markets for these nonbanking activities are with the conditions stated or referenced in this order. The regional, national, or international in scope and are uncon- Board's determination on the nonbanking activities also is centrated. The record in this case also indicates that there subject to all the terms and conditions set forth in Reguare numerous providers of these services. Based on all the lation Y, including those in sections 225.7 and 225.25(c) facts of record, the Board concludes that consummation of (12 C.F.R. 225.7 and 225.25(c)), and to the Board's authorthe proposal would have a de minimis effect on competi- ity to require such modification or termination of the tion for the relevant nonbanking activities. activities of a bank holding company or any of its subsidi- M&T has indicated that consummation of the proposal aries as the Board finds necessary to ensure compliance would provide customers of the two organizations with with, and to prevent evasion of, the provisions of the BHC access to services across a broader geographic area. M&T Act and the Board's regulations and orders thereunder. For also has asserted that customers of both organizations purposes of this action, the commitments and conditions would gain access to a broader variety of nonbanking relied on by the Board in reaching its decision are deemed products, including investment products and insurance to be conditions imposed in writing by the Board in conproducts. nection with its findings and decision and, as such, may be enforced in proceedings under applicable law. The Board concludes that the conduct of the proposed nonbanking activities within the framework of Regula- The banking acquisitions shall not be consummated tion Y and Board precedent is not likely to result in adverse before the fifteenth calendar day after the effective date of effects, such as undue concentration of resources, conflicts this order, and the proposal shall not be consummated later of interests, or unsound banking practices, that would than three months after the effective date of this order, outweigh the public benefits of the proposal discussed unless such period is extended for good cause by the Board above. Accordingly, based on all the facts of record, the or by the Federal Reserve Bank of New York, acting Board has determined that the balance of public interest pursuant to delegated authority. factors that the Board must consider under the standard in By order of the Board of Governors, effective March 11, section 4(j) of the BHC Act is consistent with approval of 2003. M&T's notice. Trust Company also intends to operate Allfirst's existing Voting for this action: Chairman Greenspan, Vice Chairman Fergulimited-purpose foreign branch in George Town, Cayman son, and Governors Gramlich, Bies, Olson, Bernanke, and Kohn. Islands, under section 25 of the Federal Reserve Act and the general consent provisions of section 211.3(b) of Regu- ROBERT DEV. FRIERSON Deputy Secretary of the Board lation K (12 C.F.R. 211.3(b)). Trust Company has made certain commitments in connection with this acquisition. In addition, M&T has provided notice under section 4(c)(13) 38. One commenter suggested, particularly in light of the 2000 of the BHC Act (12 U.S.C. § 1843(c)(13)) and section 211.9 Evaluation, that the Board condition its approval of the proposal on a of the Board's Regulation K (12 C.F.R. 211.9)) of its requirement that M&T commit to keep the branches Trust Company operates in LMI neighborhoods in the New York City area open for intention to acquire certain foreign investments controlled ten years and open five new branches there within the next two years. by Allfirst.37 The Board has concluded that all the factors it As previously noted, the 2002 Evaluation rated Trust Company "outis required to consider under the Federal Reserve Act, the standing" both in the delivery of retail and community development BHC Act, and the Board's Regulation K in connection services in all assessment areas and for its performance on the service with this notice are consistent with approval. test in the New York CMSA. See also discussion in footnote 29. 39. One commenter requested that the Board extend the comment period on the proposal. The Board has accumulated a significant Conclusion record in this case, including reports of examination, supervisory information, public reports and information, and considerable public comment. In the Board's view, commenters have had ample opportu- Based on the foregoing, and in light of all the facts of nity to submit their views and, in fact, they have provided substantial record, the Board has determined that the applications and written submissions that have been considered carefully by the Board in acting on the proposal. Moreover, the BHC Act and Regulation Y require the Board to act on proposals submitted under those provisions within certain time periods. 12 U.S.C. §§ 1842(b) and 1843(j)(l); 12 C.F.R. 225.15(d) and 225.24(d). Based on a review of all the facts 37. These investments are in Compania La Proa, Ltd., George of record, the Board has concluded that the record in this case is Town, Cayman Islands, and Bemberg Industrial, S.A., Buenos Aires, sufficient to warrant Board action at this time and that an extension of Argentina. the comment period is not warranted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

230 Federal Reserve Bulletin • May 2003 APPENDIX A 5910 York Road, Baltimore 432 South Broadway, Baltimore Nonbanking Subsidiaries of Allfirst to be 5738 Ritchie Highway, Baltimore Acquired Under the Notice 32 York Road, Towson 7500 B Connelley Drive, Hanover 1. Allfirst Mortgage Corporation, Baltimore, Maryland, 11325 Seven Locks Road, Potomac and thereby engage in extending credit and servicing 405 Sunburst Highway, Cambridge loans pursuant to section 225.28(b)(1) of Regulation Y 823 South Salisbury Boulevard, Salisbury (12 C.F.R. 225.28(b)(1)); 155 East Carroll Street, Salisbury 2. Loans USA, Inc., Pasadena, Maryland, and thereby 705 Frederick Road, Baltimore engage in extending credit and servicing loans pursuant 17724 Garland Groh Boulevard, Hagerstown to section 225.28(b)(1) of Regulation Y (12 C.F.R. 37660 Mohawk Drive, Charlotte Hall 225.28(b)(1)); 6304 Kirby Road, Clinton 3. Allfirst Leasing Corporation, Baltimore, Maryland, and 10431 York Road, Cockeysville thereby engage in leasing personal or real property 4511 Knox Road, College Park pursuant to section 225.28(b)(3) of Regulation Y 10025 Governor Warfield Parkway, Columbia (12 C.F.R. 225.28(b)(3)); 26 North Court Street, Frederick 4. Zirkin-Cutler Investments, Inc., Bethesda, Maryland, 19 East Cross Street, Baltimore and thereby engage in financial and investment advisory 632 East Bayfront Road, Deale activities pursuant to section 225.28(b)(6) of Regula- 126 Market Street, Denton tion Y (12 C.F.R. 225.28(b)(6)); 15850 Crabbs Branch Way, Rockville 5. Allfirst Life Insurance Corporation, Phoenix, Arizona, One Bank Street & Quince Orchard Road, Gaithersburg and thereby engage in providing credit insurance 6395 Dobbin Road, Columbia as principal, agent, or broker pursuant to sec- 930 Dual Highway, Hagerstown tion 225.28(b)(ll) of Regulation Y (12 C.F.R. 17 Center Place, Dundalk 225.28(b)(ll)); and 10090 Southern Maryland Boulevard, Dunkirk 6. Williams, Daniels & Associates, Inc., Baltimore, Mary- 8314 Pulaski Highway, Baltimore land, and thereby engage in data processing activities 3150 Solomon's Island Road, Edgewater pursuant to section 225.28(b)(14) of Regulation Y 1325-D Liberty Road, Sykesville (12 C.F.R. 225.28(b)(14)). One Boxridge Drive, Abingdon 809 Eastern Boulevard, Baltimore APPENDIX B 3700 Donnell Drive, Forestville 11807 Livingston Road, Fort Washington Branches to be Established by Trust Company 1201 Agora Drive, Suite 1-A, Bel Air 5585 Spectrum Drive, Frederick District of Columbia 20 East Franklin Street, Baltimore 555 12th Street, N.W. Frederick Towne Mall, 1301 West Patrick Street, 1730 Pennsylvania Avenue, N.W. Frederick 1899 L Street, N.W. 215 North Frederick Avenue, Gaithersburg 5630 Connecticut Avenue, N.W. 12914 Middlebrook Road, Germantown 500 C Street, S.W. 223 Glebe Road, Easton 6434 Georgia Avenue, N.W. 7560 South Ritchie Highway, Glen Burnie 2865 Alabama Avenue, S.E. 12041 Georgia Avenue, Wheaton 1680 K Street, N.W. 7599 Greenbelt Road, Greenbelt 2440 Wisconsin Avenue, N.W. 100 North Greene Street, Baltimore 2620 Connecticut Avenue, N.W. 1200 North Main Street, Hampstead 279 North Pennsylvania Avenue, Hancock Maryland 212 Mount Carmel Road, Parkton 776 East 25th Street, Baltimore 715 North Howard Street, Baltimore 207 West Bel Air Avenue, Aberdeen 120 Shawan Road, Hunt Valley 801 Elkridge Landing Road, Linthicum Heights 5642 Baltimore National Pike, Baltimore 101 Big Elk Mall, Elkton 400 East Pratt Street, Baltimore 25 South Charles Street, Baltimore 34th & Charles Street, Baltimore D Street & Arnold Avenue, Andrews Air Force Base 10420 Montgomery Avenue, Kensington 1230 Bay Dale Drive, Arnold 3706 Howard Avenue, Kensington 5 South Bond Street, Bel Air 60 Kent Town Market, Chester 12 Office Street, Bel Air 6267 Kenwood Avenue, Baltimore 579 Baltimore Pike, Bel Air 8640 Guilford Road, B-90, Columbia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 231 10410 Campus Way South, Largo 405 Washington Avenue, Towson 14060 Baltimore Boulevard, Laurel University Hospital, 22 South Greene Street, 9600 Medical Center Drive, Rockville First Floor, Baltimore 2525 Pot Springs Road, Lutherville-Timonium 14700 Main Street, Upper Marlboro 7900 Ritchie Highway, Suite 207, Glen Burnie 17301 Valley Mall Drive, Hagerstown 1115 Merritt Boulevard, Baltimore 11175 Mall Circle, Waldorf 21006 Frederick Road, Germantown 118 New Market Place, Gambrills 12831 Coastal Highway, Ocean City 199 Thomas Johnson Drive, Frederick 101 West Washington Street, Hagerstown 26075 Ridge Road, Damascus 8812 Waltham Woods Road, Baltimore 4126 East Joppa Road, Baltimore 2730 North Salisbury Boulevard, Salisbury 448 Prospect Boulevard, Frederick 200 Northern Avenue, Hagerstown 943 Pulaski Highway, Havre de Grace 5100 Campbell Boulevard, White Marsh 3331 Corridor Market Place, Laurel 18216 Downsville Pike, Hagerstown 1001 Twin Arch Road, Mount Airy 5805 Stevens Forest Road, Columbia 6093 Spring Ridge Parkway, Frederick 491 Olde Mill Shopping Center Road, Millersville 67 West Street, Annapolis 3221 Spartan Drive, Olney 625-A Baltimore Boulevard, Westminster 1409 Pulaski Highway, Edgewood 4800 Hampden Lane, Bethesda 38 West Ridgely Road, Timonium 561 East Ordnance Road, Glen Burnie 9780 Grofs Mill Drive, Owings Mills 6262 Oxon Hill Road, Oxon Hill Pennsylvania 9840 Reisterstown Road, Owings Mills 109 West Market Street, York 7904 Harford Road, Baltimore 1123 North George Street, York 2027 Somerville Road, Annapolis 121 West Market Street, York 3470 Annapolis Road, Baltimore 21 East Market Street, York 13409 Pennsylvania Avenue, Hagerstown 800 East Market Street, York 2301 Cleanleigh Drive, Baltimore 960 South George Street, York 8675 Bel Air Road, Baltimore 710 East Main Street, Annville 3717 Old Court Road, Pikesville 1275 Baltimore Street, Hanover 3741 Old Court Road, Pikesville 248 North Mill Street, Birdsboro 19616-M Fisher Avenue, Poolesville 200 East Philadelphia Avenue, Boyertown 10128 River Road, Potomac 835 East Philadelphia Avenue, Boyertown 510 Solomon's Island Road North, Prince Frederick 801 East Philadelphia Avenue, Suite 2, Boyertown 126 Chartley Boulevard, Reisterstown 510 West Broad Street, Bethlehem 2841 Tome Highway, Colora 2715 North Meridian Boulevard, Wyomissing 8493 Fort Smallwood Road, Pasadena 3045 Market Street, Camp Hill 4 Courthouse Square, Rockville 750 Lombard Road, Red Lion 51 West Edmonston Drive, Rockville 2 West High Street, Carlisle 5201 Roland Avenue, Baltimore 812 '/2 West High Street, Carlisle 222 Phillip Morris Drive, Salisbury 375 South Cedar Crest Boulevard, Allentown 7615 Bellona Avenue, Towson 44 Lincoln Way West, Chambersburg 7005 Security Boulevard, Baltimore 55 South Main Street, Chambersburg 5724 Wabash Avenue, Baltimore 1603 Manheim Pike, Lancaster 929 West Seventh Street, Frederick 4950 Jonestown Road, Harrisburg 534 Ritchie Highway, Severna Park 369 Locust Street, Columbia 456-D Ritchie Highway, Severna Park 900 Country Club Road, Red Lion 576 Ritchie Highway, Severna Park 105 Dart Drive, Hanover 8737 Colesville Road, Silver Spring 6960 Delta Road, Delta 87 High Street, Waldorf 3995 Carlisle Road, Dover 110 West Market Street, Snow Hill 4200 Derry Street, Harrisburg 5230 North Point Boulevard, Baltimore 1701 Oregon Pike, Lancaster 3401 Eastern Avenue, Baltimore 500 Eisenhower Drive, Hanover 9125 Baltimore National Pike, Ellicott City 4000 Perkiomen Avenue, Reading St. Paul & Saratoga Streets, Baltimore 482 Fishing Creek Road, Etters 504 East Ridgeville Boulevard, Mount Airy Market & Main Streets, Fawn Grove 400 Englar Road, Westminster 50 North Fifth Street, Reading 12200 Tech Road, Silver Spring 69 East Forrest Avenue, Shrewsbury 9625 Deereco Road, Timonium 202 West High Street, Gettysburg Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

232 Federal Reserve Bulletin • May 2003 255 South Spring Garden Street, Carlisle 441 West Main, Mount Joy 44 Natural Springs Road, Gettysburg 1802 Roosevelt Avenue, York 701-703 South Antrim Way, Greencastle 1475 Kenneth Road, York 2001 Lincoln Way East, Chambersburg 1200 Market Street, Lemoyne 1000 Haines Road, York 1401 West Market Street, York 5528 Carlisle Pike, Mechanicsburg 1847 Columbia Avenue, Lancaster 13 Baltimore Street, Hanover 2903 North 7th Street, Harrisburg 3502 Paxton Street, Harrisburg 400 North Third Street, Womelsdorf 213 Market Street, Harrisburg 750 Hellam Street, Wrightsville 730 Main Street, Hellertown 800 Penn Avenue, Wyomissing 740 West Chocolate Avenue, Hershey 2801 East Market Street, York 344 South 10th Street, Lemoyne 4711 Horseshoe Pike, Honey Brook Virginia 8 East Main Street, Hummelstown 43911 Farmwell Hunt Plaza, Ashburn 3621 Old Philadelphia Pike, Intercourse 14245-R Centreville Square, Store 8, Centreville 3201 Lehigh Street, Allentown 21099 Dulles Towne Circle, Sterling 4120 Linglestown Road, Linglestown 1025 Herndon Parkway, Herndon 2100 North Second Street, Harrisburg 345 East Market Street, Leesburg 301 North George Street Ext., Manchester 10254 Main Street, Fairfax 5219 Simpson Ferry Road, Mechanicsburg 6832 Old Dominion Drive, McLean 2075 Scotland Avenue, Chambersburg 1416 North Point Village Center, Reston 10 North Main Street, Mercersburg Bowman & Fountain Drives, Reston 21 George Street, Reading 21700 Town Center Plaza, Sterling 210 East Main Street, New Holland 8601 Westwood Center Drive, Vienna 370 North 7th Street, Lebanon 10697 Braddock Road, Fairfax 2775 Paxton Street, Harrisburg 2551 Walnut Street, Penbrook Cayman Islands 1750 Philadelphia Avenue, Chambersburg 425 Westminster Avenue, Hanover Cardinal Avenue, George Town 2186 East High Street, Pottstown 2055 South Queen Street, York 837 Quentin Road, Lebanon APPENDIX C 425 Loucks Road, York 11973 Buchanan Trail East, Waynesboro Banking Markets in which M&T and Allfirst 5021 Route 873, Schnecksville Compete Directly One West Lancaster Avenue, Shillington 1990 Carlisle Road, York Maryland 35-39 East King Street, Shippensburg Hagerstown Washington County, Maryland; and 200 Luther Road, Shrewsbury Fulton County, Pennsylvania. 2421 Old Philadelphia Pike, Lancaster 4830 Penn Avenue, Sinking Spring Pennsylvania 33 Roth Church Road, Spring Grove Harrisburg Cumberland, Dauphin, Juniata, Lebanon, 160 Spring Street, Reading and Perry Counties. 903 State Drive, Lebanon One South Front Street, Steelton Lancaster Lancaster County. 10 North Main Street, Stewartstown Lehigh Valley Carbon, Lehigh, and Northampton 430 Stouffer Avenue, Chambersburg Counties. 75 Main Street, Strausstown 423 North Enola Road, Enola Philadelphia Bucks, Chester, Delaware, Montgomery, 10 Penn Newberry Commons, Etters and Philadelphia Counties, Pennsylvania; 1250 West Tilghman Street, Allentown and Burlington, Camden, Gloucester, and 2 West Franklin Street, Topton Salem Counties, the City of Trenton, and 4435 Pottsville Pike, Reading the townships of Ewing, Hamilton, and 4206 Union Deposit Road, Harrisburg Lawrence, New Jersey. 1355 East Lehman Street, Lebanon Reading Berks County. 28 Walnut Bottom Road, Shippensburg 1629 South Market Street, Elizabethtown York Adams and York Counties. 1603 Lincoln Highway, East, Lancaster Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 233 APPENDIX D APPENDIX D— CONTINUED Data for Banking Markets in which M&T and Lehigh Valley Allfirst operates the 20th largest deposi- Allfirst Compete Directly tory institution in the market, controlling deposits of approximately $108.1 mil- Maryland lion, representing approximately 1.4 percent of market deposits. M&T operates Hagerstown Allfirst operates the largest depository the 25th largest depository institution institution in the market, controlling in the market, controlling deposits of deposits of approximately $496.9 milapproximately $44.3 million, representlion, representing approximately ing less than 1 percent of market depos- 16.8 percent of market deposits. M&T its. On consummation of the proposal, operates the fourth largest depository M&T would operate the 14th largest institution in the market, controlling depository institution in the market, deposits of approximately $339.7 milcontrolling deposits of approximately lion, representing approximately $152.5 million, representing approxi- 11.4 percent of market deposits. On conmately 2 percent of market deposits. The summation of the proposal, M&T would HHI would increase by 2 points to 1193. operate the largest depository institution in the market, controlling deposits of Philadelphia M&T operates the 15th largest deposiapproximately $836.6 million, repretory institution in the market, controlling senting 28.2 percent of market deposits. deposits of approximately $696.5 mil- The HHI would increase by 384 points lion, representing approximately less to 1461. than 1 percent of market deposits. Allfirst operates the 95th largest depository insti- Pennsylvania tution in the market, controlling deposits Harrisburg Allfirst operates the largest depository of approximately $42.1 million, repreinstitution in the market, controlling senting less than 1 percent of market deposits of approximately $1.07 billion, deposits. On consummation of the prorepresenting approximately 13.4 percent posal, M&T would operate the 15th largof market deposits. M&T operates the est depository institution in the market, eighth largest depository institution in controlling deposits of approximately the market, controlling deposits of $738.5 million, representing 1 percent approximately $432.5 million, represent- of market deposits. The HHI would ing approximately 5.4 percent of market increase by 1 point to 1057. deposits. On consummation of the pro- Reading Allfirst operates the fourth largest posal, M&T would operate the largest depository institution in the market, depository institution in the market, controlling deposits of approximately controlling deposits of approximately $1.5 billion, representing 18.8 percent $525.6 million, representing approxiof market deposits. The HHI would mately 12.1 percent of market deposits. increase by 146 points to 909. M&T operates the 11th largest depository institution in the market, controlling Lancaster Allfirst operates the seventh largest deposits of approximately $110.9 mildepository institution in the market, lion, representing 2.6 percent of market controlling deposits of approximately deposits. On consummation of the pro- $266.5 million, representing approxi- posal, M&T would operate the fourth mately 4.4 percent of market deposits. largest depository institution in the mar- M&T operates the 19th largest deposi- ket, controlling deposits of approxitory institution in the market, controlling mately $636.5 million, representing deposits of approximately $12.9 million, 14.7 percent of market deposits. The representing less than 1 percent of mar- HHI would increase by 71 points to ket deposits. On consummation of the 1333. proposal, M&T would operate the seventh largest depository institution in the market, controlling deposits of approximately $279.4 million, representing 4.6 percent of market deposits. The HHI would increase by 2 points to 1269. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

234 Federal Reserve Bulletin • May 2003 APPENDIX D— CONTINUED held, with no individual or entity controlling more than 10 percent of voting shares. York Allfirst operates the largest depository Bank engages in commercial and retail banking institution in the market, controlling and international trade services through more than deposits of approximately $1.38 billion, 320 branches, and it engages in leasing, trust, fiduciary, representing approximately 24.9 percent asset management, investment banking, and securities of market deposits. M&T operates the brokerage services through several subsidiaries. In addi- 14th largest depository institution in the tion, Bank operates bank subsidiaries in Panama and the market, controlling deposits of approxi- Cayman Islands. Bank does not have any operations in the mately $61.3 million, representing United States. approximately 1.1 percent of market The proposed agency would complement and expand deposits. On consummation of the pro- Bank's current business. It primarily would offer corporate posal, M&T would operate the largest banking, correspondent banking, international trade, pridepository institution in the market, vate banking, cash management, and portfolio investment controlling deposits of approximately services. $1.44 billion, representing approximately In order to approve an application by a foreign bank to 26 percent of market deposits. The HHI establish an agency in the United States, the IBA and would increase by 55 points to 1227. Regulation K require the Board to determine that the foreign bank applicant engages directly in the business of banking outside of the United States and has furnished to the Board the information it needs to assess the application ORDERS ISSUED UNDER INTERNATIONAL adequately. The Board also shall take into account whether BANKING ACT the foreign bank and any foreign bank parent is subject to comprehensive supervision or regulation on a consolidated Bancolombia, S.A. basis by its home country supervisor (12 U.S.C. Medellin, Colombia § 3105(d)(2); 12 C.F.R. 211.24).3 The Board may also take into account additional standards as set forth in the IBA Order Approving Establishment of an Agency and Regulation K (12 U.S.C. §3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)-(3)). Bancolombia, S.A. ("Bank"), Medellin, Colombia, a for- The IBA includes a limited exception to the general eign bank within the meaning of the International Banking requirement relating to comprehensive, consolidated super- Act ("IBA"), has applied under section 7(d) of the IB A vision (12 U.S.C. §3105(d)(6)). This exception provides (12 U.S.C. § 3105(d)) to establish an agency in Miami, that, if the Board is unable to find that a foreign bank Florida. The Foreign Bank Supervision Enhancement Act seeking to establish a branch, agency, or commercial lendof 1991, which amended the IBA, provides that a foreign ing company is subject to comprehensive supervision or bank must obtain the approval of the Board to establish an regulation on a consolidated basis by the appropriate agency in the United States. Notice of the application, affording interested persons an opportunity to comment, has been published in a newspa- making certain strategic business decisions. Suramericana and Argos are considered to control Bank for purposes of the Bank Holding per of general circulation in Miami, Florida (Miami Daily Company Act of 1956, as amended ("BHC Act"), and the IBA and Business Review, April 1, 2002). The time for filing comare considered to be "ultimate parents" of Bank for purposes of ments has expired, and the application and all comments Regulation K. The 37.9 percent of Bank's voting shares not owned by received have been considered. Grupo-associated companies are widely held, with no single indi- Bank, with total consolidated assets of approximately vidual or entity owning 5 percent or more of voting shares. 3. In assessing this standard, the Board considers, among other $4.3 billion, is the largest commercial bank in Colomfactors, the extent to which the home country supervisors: bia.1 Bank's shares are publicly traded in Colombia and the United States. Suramericana de Inversiones S.A. (i) Ensure that the bank has adequate procedures for monitoring and controlling its activities worldwide; ("Suramericana"), a Colombian insurance company, and (ii) Obtain information on the condition of the bank and its subsidi- Compania de Cementos Argos, S.A. ("Argos"), a Colom- aries and offices through regular examination reports, audit bian industrial company, control approximately 53 percent reports, or otherwise; of Bank's shares.2 Bank's remaining shares are widely (iii) Obtain information on the dealings with and relationship between the bank and its affiliates, both foreign and domestic; (iv) Receive from the bank financial reports that are consolidated on a 1. Unless otherwise indicated all data are as of December 31, 2002. worldwide basis or comparable information that permits analysis 2. Due to significant cross-shareholdings, Suramericana and Argos of the bank's financial condition on a worldwide consolidated are subsidiaries of each other. Suramericana and Argos are part of a basis; loosely associated group of Colombian financial services and indus- (v) Evaluate prudential standards, such as capital adequacy and risk trial companies collectively referred to as Grupo Empresarial Antioasset exposure, on a worldwide basis. queno ("Grupo"). Other Grupo-associated companies own a combined 9.1 percent of Bank's voting shares. Grupo is not a legal entity These are indicia of comprehensive, consolidated supervision. No and has no formal status under Colombian corporate, securities, or single factor is essential, and other elements may inform the Board's banking laws, although Grupo companies informally coordinate when determination. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 235 authorities in its home country, the Board may nevertheless of the Financial Action Task Force ("FATF"), although approve an application by such foreign bank if: FATF's recommendations have been taken into account by Bank in developing its manuals, internal procedures, and (i) The appropriate authorities in the home country of the training courses. foreign bank are actively working to establish arrange- Bank has taken measures to ensure compliance with ments for the consolidated supervision of such bank; Colombian law and regulations, including implementing and policies and procedures related to "know-your-customer" (ii) All other factors are consistent with approval practices, suspicious transaction reporting, record keeping, (12 U.S.C. §3105(d)(6)(A)). and employee training.5 An internal central compliance unit monitors Bank's adherence to these policies and In deciding whether to exercise its discretion to approve procedures. an application under authority of this exception, the Board Based on all the facts of record, it has been determined shall also consider whether the foreign bank has adopted that Bank's home country authorities are actively working and implemented procedures to combat money laundering to establish arrangements for the consolidated supervision (12 U.S.C. §3105(d)(6)(B)). The Board also may take into of Bank, and that considerations relating to the steps taken account whether the home country of the foreign bank is by Bank and its home country to combat money laundering developing a legal regime to address money laundering or are consistent with approval under this standard. is participating in multilateral efforts to combat money The additional standards set forth in the IBA (12 U.S.C. laundering (12 U.S.C. §3105(d)(6)(B)). §3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)) have also been As noted above, Bank engages directly in the business of taken into account. The Superintendency has no objection banking outside the United States. Bank also has provided to the establishment of the proposed agency. the Board with information necessary to assess the applica- Bank must comply with the minimum capital standards tion through submissions that address the relevant issues. of the Basel Capital Accord ("Accord"), as implemented With respect to supervision by home country authorities, by Colombia. Bank's capital is in excess of the minimum the Board previously has determined, in connection with levels that would be required by the Accord and is considan application involving another bank in Colombia, that ered equivalent to the capital that would be required of a the bank's home country authorities were working to estab- U.S. banking organization. Managerial and other financial lish arrangements for the consolidated supervision of the resources of Bank are also considered consistent with bank.4 Bank is supervised by the Colombia Superinten- approval, and Bank appears to have the experience and dency of Banking on substantially the same terms and capacity to support the proposed agency. Bank has estabconditions as that other bank. lished controls and procedures for the proposed agency to The Colombian government has taken a number of steps ensure compliance with U.S. law, as well as controls and to combat money laundering. In the past decade, Colombia procedures for its worldwide operations generally. has enacted legislation to prevent money laundering and With respect to access to information about the operahas established a regulatory infrastructure to assist this tions of Bank and its parents, the restrictions on disclosure effort. Colombia has established a Financial Information in relevant jurisdictions in which Bank and its parents and Analysis Unit in the Ministry of Finance, which is operate have been reviewed and communications with responsible for gathering and centralizing information from relevant government authorities regarding access to inforpublic and private entities in Colombia, as well as analyz- mation have been conducted. Bank and its parents have ing such information. The Prosecutor General's office has committed to make available to the Board such informaestablished a unit to investigate and prosecute money laun- tion on the operations of Bank and any of its affiliates that dering cases and forfeiture actions. In addition, the Super- the Board deems necessary to determine and enforce comintendency has issued circulars that require financial insti- pliance with the IBA, the BHC Act, and other applicable tutions to establish systems for the prevention of money federal law. To the extent that the provision of such inforlaundering. mation to the Board may be prohibited by law, Bank and Colombia participates in international fora that address its parents have committed to cooperate with the Board to the issues of asset forfeiture and the prevention of money obtain any necessary consents or waivers that might be laundering. Colombia is a party to the 1988 U.N. Conven- required from third parties for disclosure of such information Against Illicit Traffic in Narcotic Drugs and Psychotro- tion. In addition, subject to certain conditions, the Superintendency may share information on Bank's operations with pic Substances ("Convention"), and the United States has other supervisors, including the Board. In light of these certified that Colombia has taken adequate measures to commitments and other facts of record, and subject to the achieve full compliance with the goals and objectives of condition described below, Bank has provided adequate the Convention. Colombia also has signed the U.N. Conassurances of access to any necessary information that the vention against Transnational Organized Crime and is a Board may request. member of the Organization of American States Inter- American Drug Abuse Control Commission Experts Group to Control Money Laundering. Colombia is not a member 5. Bank's foreign bank subsidiaries have adopted the same policies 4. Banco de Bogota, S.A., 87 Federal Reserve Bulletin 552 (2001). and procedures for the prevention of money laundering. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

236 Federal Reserve Bulletin • May 2003 On the basis of all the facts of record, and subject to the Bank, with total assets of approximately $146 billion, commitments made by Bank and its parents, as well as the is the largest bank in Ireland.1 Bank was formed in 2002 as terms and conditions set forth in this order, Bank's appli- part of a reorganization of the DEPFA Group. In that cation to establish an agency should be, and hereby is, reorganization, the group's public finance business was approved.6 Should any restrictions on access to informa- separated from its real property business. Bank is the tion on the operations or activities of Bank and its affiliates parent company of the public finance business, which subsequently interfere with the Board's ability to obtain includes DEPFA Deutsche Pfandbriefbank AG, Frankfurt, information to determine and enforce compliance by Bank Germany. DEPFA Holding Verwaltungsgesellschaft mBH or its affiliates with applicable federal statutes, the Board ("DEPFA Holding"), Dusseldorf, Germany, owns may require or recommend termination of any of Bank's 40.8 percent of Bank. DEPFA Holding also owns 40.8 perdirect or indirect activities in the United States. Approval cent of Aareal Bank AG, Wiesbaden, Germany, which took of this application also is specifically conditioned on com- over all the real property business formerly conducted by pliance by Bank and its parents with the commitments members of the DEPFA Group. DEPFA Holding is an made in connection with this application and with the investment vehicle for eight primarily financial institutions conditions in this order.7 The commitments and conditions in Germany, Switzerland, and France. No other sharereferred to above are conditions imposed in writing in holder owns more than 5 percent of the shares of Bank. connection with this decision and may be enforced in Bank is a qualifying foreign banking organization under proceedings under 12 U.S.C. §1818 against Bank and its Regulation K. affiliates. Bank currently operates a U.S. nonbanking subsidiary, By order, approved pursuant to authority delegated by DEPFA USA Inc., New York, New York, that provides the Board, effective March 27, 2003. research and advisory services in the areas of economics, banking, and capital markets. ROBERT DEV. FRIERSON Bank seeks to establish the New York agency to expand Deputy Secretary of the Board the range of services offered and activities in the United States. On establishment of the proposed agency, Bank intends to liquidate DEPFA USA Inc. and transfer its assets DEPFA BANK pic and business to the agency. In addition, the proposed Dublin, Ireland agency would provide a range of services to U.S. municipalities and government-sponsored entities. Order Approving Establishment of an Agency In order to approve an application by a foreign bank to establish an agency in the United States, the IBA and DEPFA BANK pic ("Bank"), Dublin, Ireland, a foreign Regulation K require the Board to determine that the bank within the meaning of the International Banking Act foreign bank applicant engages directly in the business of ("IBA"), has applied under section 7(d) of the IBA banking outside the United States and has furnished to the (12 U.S.C. §3105(d)) to establish an agency in New York, Board the information it needs to assess the application New York. The Foreign Bank Supervision Enhancement adequately. The Board also shall take into account whether Act of 1991, which amended the IBA, provides that a the foreign bank and any foreign bank parent is subject to foreign bank must obtain the approval of the Board to comprehensive supervision or regulation on a consolidated establish an agency in the United States. basis by its home country supervisor (12 U.S.C. Notice of the application, affording interested persons § 3105(d)(2); 12 C.F.R. 211.24).2 The Board may also take an opportunity to comment, has been published in a into account additional standards as set forth in the IBA newspaper of general circulation in New York, New York (New York Post, October 3, 2002). The time for filing comments has expired, and all comments have been considered. 1. Asset data are as of June 30, 2002. 2. In assessing this standard, the Board considers, among other factors, the extent to which the home country supervisors: (i) Ensure that the bank has adequate procedures for monitoring and controlling its activities worldwide; (ii) Obtain information on the condition of the bank and its subsidiaries and offices through regular examination reports, audit 6. Approved by the Director of the Division of Banking Super- reports, or otherwise; vision and Regulation, with the concurrence of the General Counsel, (iii) Obtain information on the dealings with and relationship between pursuant to authority delegated by the Board. See 12 C.F.R. the bank and its affiliates, both foreign and domestic; 265.7(d)(12). (iv) Receive from the bank financial reports that are consolidated on a 7. The Board's authority to approve the establishment of the pro- worldwide basis or comparable information that permits analysis posed agency parallels the continuing authority of the State of Florida of the bank's financial condition on a worldwide consolidated to license offices of a foreign bank. The approval of this application basis; does not supplant the authority of the State of Florida, or its agent, the (v) Evaluate prudential standards, such as capital adequacy and risk Florida Department of Banking and Finance, to license the proposed asset exposure, on a worldwide basis. These are indicia of comoffice of Bank in accordance with any terms or conditions that it may prehensive, consolidated supervision. No single factor is essenimpose. tial, and other elements may inform the Board's determination. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 237 and Regulation K (12 U.S.C. §3105(d)(3)-(4); 12 C.F.R. Bank and any of its affiliates that the Board deems neces- 211.24(c)(2)-(3)). sary to determine and enforce compliance with the IBA, As noted above, Bank engages directly in the business of the Bank Holding Company Act, and other applicable banking outside the United States. Bank also has provided federal law. To the extent that the provision of such inforthe Board with information necessary to assess the applica- mation to the Board may be prohibited by law or othertion through submissions that address the relevant issues. wise, Bank and DEPFA Holding have committed to coop- With respect to supervision by home country authorities, erate with the Board to obtain any necessary consents or the Federal Reserve previously has determined, in connec- waivers that might be required from third parties for disclotion with applications involving other banks in Ireland, that sure of such information. In light of these commitments those banks were subject to home country supervision on a and other facts of record, and subject to the condition consolidated basis.3 Bank is supervised by the banking described below, it has been determined that Bank and regulatory authorities in Ireland on substantially the same DEPFA Holding have provided adequate assurances of terms and conditions as those other banks. Based on all the access to any necessary information that the Board may facts of record, it has been determined that Bank is subject request. to comprehensive supervision on a consolidated basis by On the basis of all the facts of record, and subject to the its home country supervisor. commitments made by Bank and DEPFA Holding, as well The Board has also taken into account the additional as the terms and conditions set forth in this order, Bank's standards set forth in section 7 of the IBA and Reg- application to establish an agency in New York, New York, ulation K (see 12 U.S.C. §3105(d)(3)-(4); 12 C.F.R. is hereby approved.4 Should any restrictions on access to 211.24(c)(2)-(3)). The home country supervisor of Bank information on the operations or activities of Bank and its has no objection to the establishment of the proposed affiliates subsequently interfere with the Board's ability to agency. obtain information to determine and enforce compliance by Ireland's risk-based capital standards are consistent with Bank or its affiliates with applicable federal statutes, the those established by the Basel Capital Accord. Bank's Board may require termination of any of Bank's direct or capital is in excess of the minimum levels that would be indirect activities in the United States. Approval of this required by the Basel Capital Accord and is considered application also is specifically conditioned on compliance equivalent to capital that would be required of a U.S. by Bank with the commitments made in connection with banking organization. Managerial and other financial this application and with the conditions in this order.5 The resources of Bank also are considered consistent with commitments and conditions referred to above are condiapproval, and Bank appears to have the experience and tions imposed in writing by the Board in connection with capacity to support the proposed agency. In addition, Bank this decision and may be enforced in proceedings under 12 U.S.C. § 1818 against Bank and its affiliates. has established controls and procedures for the proposed agency to ensure compliance with U.S. law, as well as By order, approved pursuant to authority delegated by controls and procedures for its worldwide operations the Board, effective March 21, 2003. generally. Ireland is a member of the Financial Action Task Force ROBERT DEV. FRIERSON and subscribes to its recommendations on measures to Deputy Secretary of the Board combat money laundering. In accordance with these recommendations, Ireland has enacted laws and developed regulatory standards to deter money laundering. Money The Wakashio Bank, Limited laundering is illegal in Ireland, and financial institutions Tokyo, Japan are required to establish internal policies, procedures, and systems for the detection and prevention of money launder- Order Approving Establishment of Branches ing throughout their worldwide operations. Bank has policies and procedures to comply with these laws and reg- The Wakashio Bank, Limited, Tokyo, Japan ("Wakashio"), ulations that are monitored by governmental entities a foreign bank within the meaning of the International responsible for anti-money laundering compliance. Banking Act ("IBA"), has applied under section 7(d) of With respect to access to information about Bank's the IBA (12 U.S.C. §3105(d)) to establish branches in operations, the Board has reviewed the restrictions on Los Angeles and San Francisco, California, and New York, disclosure in relevant jurisdictions in which Bank operates and has communicated with relevant government authorities regarding access to information. Bank and its ultimate 4. Approved by the Director of the Division of Banking Superviparent, DEPFA Holding, have committed to make availsion and Regulation, with the concurrence of the General Counsel, able to the Board such information on the operations of pursuant to authority delegated by the Board. 5. The Board's authority to approve the establishment of the proposed agency parallels the continuing authority of the State of 3. See Anglo Irish Bank Corporation pic, 85 Federal Reserve New York to license offices of a foreign bank. The Board's approval Bulletin 587 (1999); Allied Irish Banks, p.l.c., 83 Federal Reserve of this application does not supplant the authority of the New York Bulletin 607 (1997); Bank of Ireland, 81 Federal Reserve Bulletin 511 State Banking Department to license the proposed agency of Bank in (1995). accordance with any terms or conditions that it may impose. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

238 Federal Reserve Bulletin • May 2003 New York.1 The Foreign Bank Supervision Enhancement quately. The Board also shall take into account whether the Act of 1991, which amended the IBA, provides that a foreign bank and any foreign bank parent is subject to foreign bank must obtain the Board's approval to establish comprehensive supervision or regulation on a consolidated a branch in the United States. basis by its home country supervisor (12 U.S.C. Notice of the application, affording interested persons an §3105(d)(2); 12 C.F.R. 211.24).7 The Board may also take opportunity to comment, has been published in a news- into account additional standards as set forth in the IBA paper of general circulation in Los Angeles, California and Regulation K (12 U.S.C. §3105(d)(3)-(4); 12 C.F.R. (Los Angeles Times, January 21, 2003); San Francisco, 211.24(c)(2)). California (San Francisco Chronicle, January 21, 2003); As noted above, Wakashio engages directly in the busiand New York, New York (New York Times, January 28, ness of banking outside the United States. Wakashio also 2003). The time for filing comments has expired, and all has provided the Board with information necessary to comments have been considered.2 assess the relevant issues in the application. The Board has Wakashio, with consolidated assets of approximately previously determined, in applications under the IBA and $4 billion,3 is a community bank that serves individuals Bank Holding Company Act ("BHCA"), that certain Japaand small businesses in the Tokyo metropolitan area. nese commercial banks were subject to comprehensive Wakashio was a subsidiary of Sumitomo Mitsui Banking consolidated supervision by their home country super- Corporation ("SMBC"), also in Tokyo.4 As part of an visor.8 In this case, the Board has determined that on internal reorganization on January 17, 2003, Wakashio consummation of the transaction, New SMBC would be became a direct subsidiary of Sumitomo Mitsui Financial supervised on substantially the same terms and conditions Group ("SMFG"), the top-tier holding company of as these banks. SMBC.5 SMBC plans to merge with and into Wakashio, Based on all the facts of record, the Board has deterwith Wakashio as the surviving entity.6 mined that New SMBC would be subject to comprehensive SMBC has three branches in the United States that offer supervision on a consolidated basis by its home country general commercial banking services for Japanese and supervisor after consummation of the proposal. U.S. corporate customers. On the merger of SMBC into The additional standards set forth in section 7 of the Wakashio, New SMBC would acquire these branches. IBA and Regulation K (see 12 U.S.C. §3105(d)(3)-(4); The proposed branches would continue the operations 12 C.F.R. 211.24(c)(2)) have also been taken into account. and activities of the former SMBC branches. The trans- The FSA has no objection to the establishment of the action confers some accounting and regulatory benefits in proposed branches. Japan under standards applied by the Financial Services Japan has enacted laws, and the FSA has promulgated Agency of Japan ("FSA"). No expansion or restructuring implementing regulations, designed to prevent money launof existing U.S. operations would result from the proposed dering. The laws and regulations require financial institureorganization. In addition, the proposal would not materi- tions, including savings banks, to establish and implement ally affect the management of SMBC's operations, includ- policies, procedures, and controls for preventing and ing its subsidiary insured depository institution, in the detecting money laundering and to report certain cash United States. The corporate reorganization would be transactions and suspicious transactions to appropriate effected through the exchange of shares. No debt would be authorities. Compliance with applicable laws and regulaissued by Wakashio, SMBC, or any of its subsidiaries as tions is monitored by the FSA and the institution's external part of the transactions that would effect the reorganization. This transaction results in no substantive change in the capital of SMBC. 7. In assessing this standard, the Board considers, among other In order to approve an application by a foreign bank to factors, the extent to which the home country supervisors: establish branches in the United States, the IBA and Regu- (i) Ensure that the bank has adequate procedures for monitoring and lation K require the Board to determine that the foreign controlling its activities worldwide; (ii) Obtain information on the condition of the bank and its subsidibank applicant engages directly in the business of banking aries and offices through regular examination reports, audit outside of the United States and has furnished to the Board reports, or otherwise; the information it needs to assess the application ade- (iii) Obtain information on the dealings with and relationship between the bank and its affiliates, both foreign and domestic; (iv) Receive from the bank financial reports that are consolidated on a 1. The Board has separately approved Wakashio's application to worldwide basis or comparable information that permits analysis become a bank holding company with respect to Manufacturers Bank, of the bank's financial condition on a worldwide consolidated Los Angeles, California. See The Wakashio Bank, Limited (Order basis; dated March 14, 2003) ("Section 3 Order"). (v) Evaluate prudential standards, such as capital adequacy and risk 2. One comment was received. See Section 3 Order for a discusasset exposure, on a worldwide basis. These are indicia of comsion of the concerns expressed by the commenter. prehensive, consolidated supervision. No single factor is essen- 3. Asset data are as of September 30, 2002. Dollar amounts are tial, and other elements may inform the Board's determination. converted from Japanese yen at ¥121.65 = US $1. 4. SMBC, with total consolidated assets equivalent to $857.1 bil- 8. See The Sumitomo Bank, Limited, 82 Federal Reserve Bulletin lion, ranks fourth among the world's commercial banks by assets. 369 (1996); Mizuho Holdings, Inc., 86 Federal Reserve Bulletin 776 5. SMFG was formed in December 2002. (2000); UJF Holdings, Inc., 87 Federal Reserve Bulletin 270 (2001); 6. Wakashio would be renamed Sumitomo Mitsui Banking Corpo- and Mitsubishi Tokyo Financial Group, Inc., 87 Federal Reserve ration ("New SMBC") on consummation of the merger. Bulletin 349 (2001). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 239 auditors. Wakashio has policies and procedures to comply ditions set forth in this order, Wakashio's application to with these laws and regulations. establish branches is hereby approved. Should any restric- Financial factors are considered consistent with approval tions on access to information on the operations or activiof this non-expansionary reorganization. Managerial ties of New SMBC and its affiliates subsequently interfere resources of Wakashio also are considered consistent with with the Board's ability to obtain information to determine approval, and Wakashio appears to have the experience and enforce compliance by New SMBC or its affiliates and capacity to support the proposed branches. In addition, with applicable federal statutes, the Board may require or Wakashio has established controls and procedures for the recommend termination of any of New SMBC's direct or proposed branches to ensure compliance with U.S. law, as indirect activities in the United States. Approval of this well as controls and procedures for its worldwide opera- application also is specifically conditioned on compliance tions generally. by New SMBC with the commitments made in connection With respect to access to information about Wakashio's with the application and with the conditions in this order.9 operations, the restrictions on disclosure in relevant juris- The commitments and conditions referred to above are dictions in which Wakashio operates have been reviewed conditions imposed in writing by the Board in connecand the relevant government authorities have been commu- tion with this decision and may be enforced in proceednicated with regarding access to information. Wakashio ings under 12 U.S.C. §1818 against New SMBC and its has committed to make available to the Board such infor- affiliates. mation on the operations of New SMBC and any of its By order of the Board of Governors, effective March 14, affiliates that the Board deems necessary to determine and 2003. enforce compliance with the IBA, the BHCA, and other applicable federal law. To the extent that the provision of Voting for this action: Chairman Greenspan, Vice Chairman Fergusuch information to the Board may be prohibited by law or son, and Governors Gramlich, Bies, Olson, Bernanke, and Kohn. otherwise, Wakashio has committed to cooperate with the Board to obtain any necessary consents or waivers that ROBERT DEV. FRIERSON might be required from third parties for disclosure of such Deputy Secretary of the Board information. In addition, subject to certain conditions, the FSA may share information on Wakashio's operations with other supervisors, including the Board. In light of these 9. The authority to approve the establishment of the proposed commitments and other facts of record, and subject to the branches parallels the continuing authority of the States of California condition described below, the Board has determined that and New York to license offices of a foreign bank. The approval of Wakashio has provided adequate assurances of access to this application does not supplant the authority of those states or their any necessary information that the Board may request. agents, the California Department of Financial Institutions or the New York State Banking Department ("Departments"), to license the pro- On the basis of all the facts of record, and subject to the posed offices of New SMBC in accordance with any terms or condicommitments made by Wakashio, and the terms and con- tions that the Departments may impose. Legal Developments continue on page 240. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

240 Federal Reserve Bulletin • May 2003 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 ABM Holding Company, Citizens State Bank, Kansas City March 12, 2003 Miltonvale, Kansas Miltonvale, Kansas Bank of Commerce Holdings, Inc., The Bank of Commerce, Atlanta March 14, 2003 Sarasota, Florida Sarasota, Florida Bank of Granite Corporation, First Commerce Corporation, Richmond March 6, 2003 Granite Falls, North Carolina Charlotte, North Carolina BNW Bancorp, Inc., Bank NorthWest, San Francisco March 5, 2003 Bellingham, Washington Bellingham, Washington Cera Stichting VZW, LBS Bank, New York March 24, 2003 Belgium New York, New York Cera Beheersmaatschappij N.V., Nova Ljubljanska Banka d.d, Belgium Ljubljana, Slovenia Cera Holding CVBA, Belgium Almancora CVA, Belgium Almanij N.V., Belgium KBC Bankverzekeringsholding N.V., Belgium KBC Bank N.V., Belgium First Bancorp, Inc., First Commonwealth Bank, Richmond March 20, 2003 Lebanon, Virginia Wise, Virginia First Banks, Inc., Bank of Ste. Genevieve, St. Louis March 3, 2003 St. Louis, Missouri Sainte Genevieve, Missouri Allegiant Bancorp, Inc., St. Louis, Missouri First National Bancorp, Inc., Montana First National Bancorporation, Minneapolis March 19, 2003 Libby, Montana Kalispell, Montana Montana First National Bank, Kalispell, Montana F.N.B. Corporation, Charter Banking Corporation, Atlanta March 15, 2003 Naples, Florida Tampa, Florida Southern Exchange Bank, Tampa, Florida Foundation Bancorp, Inc., Foundation Bank, San Francisco March 5, 2003 Bellevue, Washington Bellevue, Washington Georgia Commerce Bancshares, Inc., Georgia Commerce Bank, Atlanta March 5, 2003 Atlanta, Georgia Atlanta, Georgia Healthcare Bancorp, Inc., First BankCentre, Kansas City March 21, 2003 Broken Arrow, Oklahoma Broken Arrow, Oklahoma Heritage Bancshares, Inc., Heritage Bank, Kansas City March 21, 2003 Topeka, Kansas Topeka, Kansas Interchange Financial Services Bridge View Bancorp, New York March 19, 2003 Corporation, Englewood Cliffs, New Jersey Saddle Brook, New Jersey Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 241 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Liberty Financial Services, Inc., Liberty National Bank, Chicago February 28, 2003 Sioux City, Iowa Sioux City, Iowa Frontier Bank, Rock Rapids, Iowa Rock Rivers Bancorp., Rock Rapids, Iowa Mechanics Banc Holding Company, Mechanics Bank, St. Louis March 6, 2003 Water Valley, Mississippi Water Valley, Mississippi Morton Bancorp, Inc., Bank of Morton, Atlanta March 6, 2003 Morton, Mississippi Morton, Mississippi Putnam Bancorp MHC, Inc., Putnam Savings Bank, Boston March 11, 2003 Putnam, Connecticut Putnam, Connecticut PSB Holdings, Inc., Putnam, Connecticut Ruff Management, LLC, Ruff Family Partners, Ltd., Dallas March 19, 2003 Longview, Texas Longview, Texas Surrey Bancorp, Surrey Bank & Trust, Richmond March 6, 2003 Mount Airy, North Carolina Mount Airy, North Carolina United Community Banks, Inc., First Georgia Holding, Inc., Atlanta March 14, 2003 Blairsville, Georgia Brunswick, Georgia First Georgia Bank, Brunswick, Georgia Uwharrie Capital Corp., Cabarrus Bank & Trust Company, Richmond March 19, 2003 Albemarle, North Carolina Concord, North Carolina VSB Bancorp, Inc., Victory State Bank, New York February 28, 2003 Staten Island, New York Staten Island, New York Waumandee Bancshares, Ltd., Waumandee State Bank, Minneapolis March 11, 2003 Waumandee, Wisconsin Waumandee, Wisconsin Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date FNB Corp., Dover Mortgage Company, Richmond March 25, 2003 Asheboro, North Carolina Charlotte, North Carolina Integra Bank Corporation, Integra Reinsurance Company, Ltd., St. Louis March 7, 2003 Evansville, Indiana Turks and Caicos Islands, British West Indies Integra Bank, National Association, Evansville, Indiana Ocean Bankshares, Inc., Ocean Bank, Atlanta March 12, 2003 Miami, Florida Miami, Florida SSB Holding Co., Inc., To engage de novo in the nonbanking Chicago March 11, 2003 Baxter, Iowa activity of extending credit and servicing loans Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

242 Federal Reserve Bulletin • May 2003 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 Bridge View Bank, Interchange Bank, New York March 19, 2003 Englewood Cliffs, New Jersey Saddle Brook, New Jersey First Bank, First Bank & Trust, St. Louis March 14, 2003 Creve Coeur, Missouri San Francisco, California The First Bank and Trust Company, First Commonwealth Bank, Richmond March 20, 2003 Lebanon, Virginia Wise, Virginia State Bank of La Crosse, First National Bank, Minneapolis March 21, 2003 La Crosse, Wisconsin La Crescent, Minnesota PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the seeking damages for personal injury. On March 30, Federal Reserve Banks in which the Board of Governors is 2003, the district court granted the government's motion not named a party. to dismiss the action. Sedgwick v. United States, No. 02-5378 (D.C. Circuit, filed Community Bank & Trust v. United States, No. 01-571C November 26, 2002). Appeal of the dismissal of appel- (Ct. Fed. CI., filed October 3, 2001). Action challenging lant's claim for a declaratory judgment under the Fed- on constitutional grounds the failure to pay interest on eral Tort Claims Act and the Constitution regarding the reserve accounts held at Federal Reserve Banks. banking agencies' alleged failure to intervene on his behalf in civil litigation involving a regulated institution. Artis v. Greenspan, No. 01-CV-0400 (EGS) (D.D.C., com- On March 20, 2003, the court of appeals summarily plaint filed February 22, 2001). Employment discriminaaffirmed the district court's dismissal of the action. tion action. On August 15, 2001, the district court consolidated the action with Artis v. Greenspan, No. 99-CV- Albrecht v. Board of Governors, No. 02-5325 (D.C. Cir., 2073 (EGS) (D.D.C., filed August 3, 1999), also an filed October 18, 2002). Appeal of district court order employment discrimination action. dismissing challenge to the method of funding of the retirement plan for certain Board employees. Fraternal Order of Police v. Board of Governors, No. 1:98CV03116 (WBB)(D.D.C., filed December 22, Caesar v. United States, No. 02-0612 (EGS) (D.D.C.), 1998). Declaratory judgment action challenging Board removed on April 1, 2002 from No. 02-1502 (D.C. regulation on labor-management relations at Reserve Superior Court, originally filed March 1, 2002). Action Banks. 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 U.S. 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 ALL 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

A2 Federal Reserve Bulletin • May 2003 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 A51 Banks' own claims on unaffiliated foreigners A58 INDEX TO STATISTICAL TABLES 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 Agricultural Mortgage Corporation REMICs Real estate mortgage investment conduits FFB Federal Financing Bank RHS Rural Housing Service FHA Federal Housing Administration RP Repurchase agreement FHLBB Federal Home Loan Bank Board RTC Resolution Trust Corporation FHLMC Federal Home Loan Mortgage Corporation SCO Securitized credit obligation FmHA Farmers Home Administration SDR Special drawing right FNMA Federal National Mortgage Association SIC Standard Industrial Classification FSA Farm Service Agency 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 Financial Statistics • May 2003 1.10 RESERVES AND MONEY STOCK MEASURES Percent annual rate of change, seasonally adjusted1 2002 2002 2003 MMoonneettaarryy oorr ccrreeddiitt aaggggrreeggaattee Ql Q2 Q3 Q4 Oct. Nov. Dec. Jan.' Feb. Reserves of depository institutions1 1 Total -12.6 -13.5 -2.0 .3 -2.1 15.4 13.0 14.7 4.4 2 Required -12.3 -12.4 -4.8 -2.1 -4.5 13.9 1.6 26.0 -3.1 3 Nonborrowed -12.2 -14.0 -3.5 1.2 .6 11.5 19.0 16.3 4.4 4 Monetary base3 8.8 7.5 6.9 5.0 5.1 5.7 7.5 6.7 10.0 Concepts of money* 5 Ml 5.7 -.6 3.1 4.5 11.2 -.9 7.8 1.7 19.3 6 M2 6.7 4.1 9.1 7.1 8.3 8.1 3.2 6.0 11.2 7 M3 5.8 4.1 7.7 7.5 .8 17.2 7.5r -.7 7.7 Nontransaction components 8 In M25 7.0 5.4 10.8 7.8 7.5 10.5 1.9 7.2 9.1 9 In M3 only6 3.8 4.2 4.5 8.2 -15.3 37.2 16.9r -15.2 .2 Time and savings deposits Commercial banks 10 Savings, including MMDAs 20.4 15.1 20.1 16.9 14.3 20.9 3.6 18.6 15.8 11 Small time7 -16.1 -6.3 -6.3 -9.1 -8.7 -7.3 -9.0 -8.0 -8.5 12 Large time8-9 5.1 12.4 3.7 -4.0 9.9 -13.3 -32.6 14.6 18.4 Thrift institutions 13 Savings, including MMDAs 31.0 24.0 20.5 20.5 22.3 13.9 21.7 21.3 26.9 14 Small time7 -12.3 -16.6 -12.3 -6.5' -5.9 —4.4 -2.8r -5.2 -6.8 15 Large time8 1.5 -8.1 -3.2 11.1 10.7 16.9 15.6 13.4 2.0 Money market mutual funds 16 Retail -7.8 -9.2 4.7 -4.4 -2.8 1.9 -8.0 -14.6 -3.7 17 Institution-only 3.5 3.9 -.8 1.9 -41.3 68.7 25.0 -35.3 -20.1 Repurchase agreements and eurodollars 18 Repurchase agreements10 3.0 -.7 27.5 45.0 -4.8 55.3 77.7 -23.8 34.0 19 Eurodollars10 3.6 -4.7 .2 14.6r 11.6 12.0 7.9' 10.1 -19.0 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 M1. 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 (I) 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 $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 RESERVE BALANCES OF DEPOSITORY INSTITUTIONS1 Millions of dollars Average of Average of daily figures for week ending on date indicated daily figures Jan. 15 Jan. 22 Jan. 29 Feb. 5 Feb. 12 Feb. 19 Feb. 26 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 690,026 694,979 696,613 692,996 696,984 690,574 694,474 691,400 701,766 696,923 2 Securities held outright 621,828 629,416 631,830 629,416 629,416 629,416 629,415 629,951 631,009 634,932 3 U.S. Treasury2 621,818 629,406 631,820 629,406 629,406 629,406 629,405 629,941 630,999 634,922 4 Bills3 219,169 226,682 228,026 226,682 226,682 226,682 226,682 226,941 227,294 230,030 5 Notes and bonds, nominal3 389,156 389,219 390,305 389,219 389,219 389,219 389,219 389,504 390,217 391,412 6 Notes and bonds, inflation-indexed3 12,242 12,242 12,242 12,242 12,242 12,242 12,242 12,242 12,242 12,242 7 Inflation compensation4 1,251 1,263 1,247 1,263 1,263 1,263 1,261 1,253 1,245 1,238 8 Federal agency3 10 10 10 10 10 10 10 10 10 10 9 Repurchase agreements5 29,476 25,395 24,558 24,428 27,036 20,143 24,393 19,285 30,067 23,321 10 Loans to depository institutions 89 28 19 16 19 52 15 31 19 13 11 Primary credit6 0 15 15 6 12 45 11 28 14 10 12 Secondary credit6 0 0 0 0 0 0 0 0 0 0 13 Seasonal credit 46 11 4 11 7 7 4 3 5 4 14 Adjustment credit6 42 2 0 0 0 0 0 0 0 0 15 Float 604 565 977 -291 786 744 577 1,698 831 1,322 16 Other Federal Reserve assets 38,029 39,575 39,229 39,426 39,726 40,220 40,074 40,436 39,840 37,335 17 Gold stock 11,043 11,043 11,043 11,043 11,043 11,043 11,043 11,043 11,043 11,043 18 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 19 Treasury currency outstanding 34,539 34,597 34,650 34,597 34,597 34,597 34,597 34,630 34,657 34,684 ABSORBING RESERVE FUNDS 20 Currency in circulation 678,660 677,745 680,336 676,426 675,941 674,782 675,778 678,459 682,830 682,262 21 Reverse repurchase agreements7 12,862 18,534 18,222 18,152 18,567 18,397 18,483 18,949 17,925 17,738 22 Foreign official and international accounts .. . 12,862 18,534 17,954 18,152 18,567 18,397 18,483 17,878 17,925 17,738 23 Dealers 0 0 268 0 0 0 0 1,071 0 0 24 Treasury cash holdings 370 366 354 369 368 360 360 356 358 347 25 Deposits with Federal Reserve Banks, other than reserve balances 16,074 17,053 16,236 16,755 17,637 18,034 16,456 15,954 16,157 16,510 26 U.S. Treasury, general account 4,891 5,773 5,053 5,244 6,133 7,162 5,392 4,681 5,048 5,249 27 Foreign official 134 126 125 173 113 114 108 115 132 111 28 Service-related 10,808 10,907 10,819 11,128 11,166 10,538 10,724 10,918 10,730 10,904 29 Required clearing balances 10,407 10,484 1100,,333300 10,538 10,539 10,355 10,355 10,317 10,315 10,337 30 Adjustments to compensate for float 402 423 448899 590 627 183 368 601 415 567 31 Other 242 247 239 210 225 221 232 239 247 245 32 Other liabilities and capital 20,061 19,651 19,664 19,738 19,916 19,873 19,513 19,450 19,659 19,964 33 Reserve balances with Federal Reserve Banks8 . 9,781 9,469 9,693 9,395 12,395 6,968 11,724 6,104 12,738 8,029 End-of-month figures Wednesday figures Dec. Jan. Feb. Jan. 15 Jan. 22 Jan. 29 Feb. 5 Feb. 12 Feb. 19 Feb. 26 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 708,078 697,826 701,055 698,283 711,435 692,303 687,800 691,731 706,863 700,685 2 Securities held outright 629,416 629,416 636,921 629,416 629,416 629,416 629,411 630,957 631,273 636,006 3 U.S. Treasury2 629,406 629,406 636,911 629,406 629,406 629,406 629,401 630,947 631,263 635,996 4 Bills3 226,682 226,682 230,843 226,682 226,682 226,682 226,682 227,238 227,561 230,606 5 Notes and bonds, nominal3 389,219 389,219 392,593 389,219 389,219 389,219 389,219 390,217 390,217 391,913 6 Notes and bonds, inflation-indexed3 12,242 12,242 12,242 12,242 12,242 12,242 12,242 12,242 12,242 12,242 7 Inflation compensation4 1,263 1,263 1,233 1,263 1,263 1,263 1,257 1,250 1,242 1,235 8 Federal agency3 10 10 10 10 10 10 10 10 10 10 9 Repurchase agreements5 39,500 24,750 26,900 30,000 36,750 20,500 27,750 20,746 34,496 25,750 10 Loans to depository institutions 40 7 5 15 13 11 15 4 17 6 11 Primary credit6 0 1 1 5 6 4 13 0 13 1 12 Secondary credit6 0 0 0 0 0 0 0 0 0 0 13 Seasonal credit 31 6 4 10 7 7 2 4 4 5 14 Adjustment credit6 9 0 0 0 0 0 0 0 0 0 15 Float 418 3,768 4 -507 5,372 1,961 -9,649 -516 3,838 1,307 16 Other Federal Reserve assets 38,703 39,884 37,225 39,359 39,884 40,414 40,273 40,541 37,239 37,616 17 Gold stock 11,043 11,043 11,043 11,043 11,043 11,043 11,043 11,043 11,043 11,043 18 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 19 Treasury currency outstanding 34,597 34,597 34,710 34,597 34,597 34,597 34,597 34,630 34,657 34,684 ABSORBING RESERVE FUNDS 20 Currency in circulation 687,518 674,736 681,634 676,076 676,437 675,733 677,992 681,216 684,226 682,915 21 Reverse repurchase agreements7 21,091 18,370 18,018 17,813 18,523 18,466 17,986 17,604 17,850 17,421 22 Foreign official and international accounts 21,091 18,370 18,018 17,813 18,523 18,466 17,986 17,604 17,850 17,421 23 Dealers 0 0 0 0 0 0 0 0 0 0 24 Treasury cash holdings 367 361 343 369 360 361 356 360 348 343 25 Deposits with Federal Reserve Banks, other than reserve balances 16,356 16,558 15,406 16,785 17,635 17,882 16,782 14,777 15,553 16,246 26 U.S. Treasury, general account 4,420 5,509 4,268 5,192 6,119 7,030 5,664 3,527 4,407 4,950 27 Foreign official 136 102 224 253 122 100 148 103 134 154 28 Service-related 10,648 10,724 10,721 11,128 11,166 10,538 10,724 10,918 10,730 10,904 29 Required clearing balances 10,534 10,356 10,336 10,538 10,539 10,355 10,355 10,317 10,315 10,337 30 Adjustments to compensate for float 114 368 385 590 627 183 368 601 415 567 31 Other 1,152 223 193 213 228 214 246 228 281 238 32 Other liabilities and capital 18,977 19,478 19,739 19,631 19,549 19,574 19,274 19,265 19,665 19,699 33 Reserve balances with Federal Reserve Banks8 .... 11,608 16,163 13,868 15,449 26,771 8,127 3,250 6,383 17,121 11,988 1. Amounts of vault cash held as reserves are shown in table 1.12, line 2. 6. The Federal Reserve Banks began offering primary credit and secondary credit on 2. Includes securities lent to dealers, which are fully collateralized by other U.S. Treasury January 9, 2003. The adjustment credit program was discontinued. securities. 7. Cash value of agreements, which are fully collateralized by U.S. Treasury securities. 3. Face value of the securities. The Federal Reserve Banks began using these agreements on December 13, 2002. 4. Compensation that adjusts for the effect of inflation on the original face value of 8. Excludes required clearing balances and adjustments to compensate for float. inflation-indexed securities. 5. Cash value of agreements, which are fully collateralized by U.S. Treasury and federal agency securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Financial Statistics • May 2003 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RRReeessseeerrrvvveee ccclllaaassssssiiifffiiicccaaatttiiiooonnn 2000 2001 2002 2002 2003 Dec. Dec. Dec. Aug. Sept. Oct. Nov. Dec. Jan. Feb. 11111 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 7,022 9,053 9,873 8,520 8,731 8,836 9,695 9,873 10,004 9,807 22222 TTTTToooootttttaaaaalllll vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh33333 45,245 43,919 43,334 42,892 42,231 42,933 42,144 43,334 46,210 45,939 33333 AAAAAppppppppppllllliiiiieeeeeddddd vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh44444 31,451 32,024 30,300 31,335 30,176 29,849 29,446 30,300 32,738 32,066 44444 SSSSSuuuuurrrrrpppppllllluuuuusssss vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh55555 13,794 11,895 13,033 11,557 12,055 13,084 12,698 13,033 13,471 13,873 55555 TTTTToooootttttaaaaalllll rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss66666 38,473 41,077 40,173 39,854 38,907 38,685 39,141 40,173 42,743 41,873 66666 RRRRReeeeeqqqqquuuuuiiiiirrrrreeeeeddddd rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss 37,046 39,428 38,176 38,217 37,431 37,134 37,525 38,176 41,082 39,966 77777 EEEEExxxxxccccceeeeessssssssss rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss77777 1,427 1,649 1,997 1,637 1,476 1,550 1,616 1,997 1,660 1,908 88888 TTTTToooootttttaaaaalllll bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnnggggg aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 210 67 80 333 229 143 272 80 27 25 99999 PPPPPrrrrriiiiimmmmmaaaaarrrrryyyyy 12 21 1111100000 SSSSSeeeeecccccooooonnnnndddddaaaaarrrrryyyyy 0 0 1111111111 SSSSSeeeeeaaaaasssssooooonnnnnaaaaalllll 111 ' 33 45 185 169 120 ' 60 ' 45 13 5 1111122222 AAAAAdddddjjjjjuuuuussssstttttmmmmmeeeeennnnnttttt 99 34 35 148 60 23 211 35 2 Biweekly averages of daily figures for two-week periods ending on dates indicated 2002 2003 Oct. 30 Nov. 13 Nov. 27 Dec. 11 Dec. 25 Jan. 8 Jan. 22 Feb. 5 Feb. 19 Mar. 5 11111 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 9,634 8,864 10,497 9,559 10,408 9,200 10,894 9,336 9,431 10,654 22222 TTTTToooootttttaaaaalllll vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh33333 42,465 41,720 42,605 41,827 43,740 45,148 44,363 50,026 46,005 43,567 33333 AAAAAppppppppppllllliiiiieeeeeddddd vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh44444 30,573 28,302 30,514 29,419 30,292 31,935 31,500 35,378 30,911 32,024 44444 SSSSSuuuuurrrrrpppppllllluuuuusssss vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh55555 11,892 13,418 12,092 12,408 13,448 13,213 12,863 14,648 15,095 11,543 55555 TTTTToooootttttaaaaalllll rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss66666 40,207 37,166 41,010 38,978 40,700 41,135 42,394 44,714 40,342 42,678 66666 RRRRReeeeeqqqqquuuuuiiiiirrrrreeeeeddddd rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss 38,688 35,492 39,441 37,394 38,225 39,495 40,631 43,196 38,009 41,215 77777 EEEEExxxxxccccceeeeessssssssss rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss77777 1,519 1,674 1,569 1,583 2,475 1,640 1,763 1,518 2,332 1,463 88888 TTTTToooootttttaaaaalllll bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnnggggg aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 111 366 214 133 57 36 18 34 25 21 99999 PPPPPrrrrriiiiimmmmmaaaaarrrrryyyyy 9 28 21 17 1111100000 SSSSSeeeeecccccooooonnnnndddddaaaaarrrrryyyyy 0 0 0 0 1111111111 SSSSSeeeeeaaaaasssssooooonnnnnaaaaalllll 107 67 ' 57 50 48 ' 29 9 6 4 5 1111122222 AAAAAdddddjjjjjuuuuussssstttttmmmmmeeeeennnnnttttt 4 299 157 83 10 8 1. Data in this table also appear in the Board's H.3 (502) weekly statistical release. For 4. All vault cash held during the lagged computation period by "bound" institutions (that ordering address, see inside front cover. Data are not break-adjusted or seasonally adjusted. is, those whose required reserves exceed their vault cash) plus the amount of vault cash 2. Excludes required clearing balances and adjustments to compensate for float and applied during the maintenance period by "nonbound" institutions (that is, those whose vault includes other off-balance-sheet "as-of * adjustments. cash exceeds their required reserves) to satisfy current reserve requirements. 3. Vault cash eligible to satisfy reserve requirements. It includes only vault cash held by 5. Total vault cash (line 2) less applied vault cash (line 3). those banks and thrift institutions that are not exempt from reserve requirements. Dates 6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash (line 3). refer to the maintenance periods in which the vault cash can be used to satisfy reserve 7. Total reserves (line 5) less required reserves (line 6). 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 Primary credit1 Secondary credit2 Seasonal credit3 Federal Reserve Bank On On On 4/11/03 4/11/03 4/11/03 Boston New York . . . Philadelphia . Cleveland . . . Richmond . .. Atlanta Chicago St. Louis Minneapolis . Kansas City . Dallas San Francisco Range of rates for primary credit Range (or F.R. Bank Range (or F.R. Bank Range (or F.R. Bank Effective date level)—All of Effective date level)—All of Effective date level)—All of F.R. Banks N.Y. F.R. Banks N.Y. F.R. Banks N.Y. In effect Jan. 9, 2003 2.25 2.25 (beginning of program) of rates for adjustment credit in recent years4 Range(or F.R. Bank Range (or F.R. Bank Range (or F.R. Bank level)—All of level)—All of Effective date level)—All of F.R. Banks N.Y. F.R. Banks N.Y. F.R. Banks N.Y. In effect Dec. 31, 1995 5.25 5.25 2000—Feb. 2 5.00-5.25 5.25 2001—June 27 3.25-3.50 3.25 4 5.25 5.25 29 3.25 3.25 1996—Jan. 31 ... 5.00-5.25 5.00 Mar. 21 5.25-5.50 5.50 Aug. 21 3.00-3.25 3.00 Feb. 3 . .. 5.00 5.00 23 5.50 5.50 23 3.00 3.00 May 16 5.50-6.00 5.50 Sept. 17 2.50-3.00 2.50 1998—Oct. 15 ... 4.75-5.00 4.75 19 6.00 6.00 18 2.50 2.50 16 ... 4.75 4.75 Oct. 2 2.00-2.50 2.00 Nov. 17 . . . 4.50-4.75 4.50 2001—Jan. 3 5.75-6.00 5.75 4 2.00 2.00 19 ... 4.50 4.50 4 5.50-5.75 5.50 Nov. 6 1.50-2.00 1.50 5 5.50 5.50 8 1.50 1.50 1999—Aug. 24 ... 4.50-4.75 4.75 31 5.00-5.50 5.00 Dec. 11 1.25-1.50 1.25 26 ... 4.75 4.75 Feb. 1 5.00 5.00 13 1.25 1.25 Nov. 16 . . . 4.75-5.00 4.75 Mar. 20 4.50-5.00 4.50 18 . . . 5.00 5.00 21 4.50 4.50 2002—Nov. 6 0.75-1.25 0.75 Apr. 18 4.00-4.50 4.00 7 0.75 0.75 20 4.00 4.00 2001—May 15 3.50-4.00 3.50 In effect Jan. 8, 2003 0.75 0.75 17 3.50 3.50 (end of program) 1. Available for very short terms as a backup source of liquidity to depository institutions into account rates charged by market sources of funds and ordinarily is reestablished on the that are in generally sound financial condition in the judgment of the lending Federal Reserve first business day of each two-week reserve maintenance period. Bank. 4. Was available until January 8, 2003, to help depository institutions meet temporary 2. Available in appropriate circumstances to depository institutions that do not qualify for needs for funds that could not be met through reasonable alternative sources. For earlier data, primary credit. see the following publications of the Board of Governors: Banking and Monetary Statistics, 3. Available to help relatively small depository institutions meet regular seasonal needs for 1914-1941, and 1941-1970-, and the Statistical Digest, 1970-1979, 1980-1989, and funds that arise from a clear pattern of intrayearly movements in their deposits and loans and 1990-1995. See also the Board's Statistics: Releases and Historical Data web pages that cannot be met through special industry lenders. The discount rate on seasonal credit takes (http://www.federalreserve.gOv/releases/H 15/data.htm). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Nonfinancial Statistics • May 2003 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Requirement TTyyppee ooff ddeeppoossiitt Percentage of deposits Effective date Net transaction accounts2 1 $0 million-$6 million3 000000 111111222222//////222222666666//////000000222222 333333 111111222222//////222222666666//////000000222222 3 More than $42.1 million5 111111000000 111111222222//////222222666666//////000000222222 000000 111111222222//////222222777777//////999999000000 000000 111111222222//////222222777777//////999999000000 1. Required reserves must be held in the form of deposits with Federal Reserve Banks or 4. The Monetary Control Act of 1980 requires that the amount of transaction accounts vault cash. Nonmember institutions may maintain reserve balances with a Federal Reserve against which the 3 percent reserve requirement applies be modified annually by 80 percent of Bank indirectly, on a pass-through basis, with certain approved institutions. For previous the percentage change in transaction accounts held by all depository institutions, determined reserve requirements, see earlier editions of the Annual Report or the Federal Reserve as of June 30 of each year. Effective with the reserve maintenance period beginning Bulletin. Under the Monetary Control Act of 1980, depository institutions include commercial December 26, 2002, for depository institutions that report weekly, and with the period banks, savings banks, savings and loan associations, credit unions, agencies and branches of beginning January 16, 2003, for institutions that report quarterly, the amount was increased foreign banks, and Edge Act corporations. from $41.3 million to $42.1 million. 2. Transaction accounts include all deposits against which the account holder is permitted 5. 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 6. 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. Under the Garn-St Germain Depository Institutions Act of 1982, the Board adjusts the reduced from 3 percent to zero on January 17, 1991. amount of reservable liabilities subject to a zero percent reserve requirement each year for the The reserve requirement on nonpersonal time deposits with an original maturity of 1.5 succeeding calendar year by 80 percent of the percentage increase in the total reservable years or more has been zero since October 6, 1983. liabilities of all depository institutions, measured on an annual basis as of June 30. No 7. The reserve requirement on eurocurrency liabilities was reduced from 3 percent to zero corresponding adjustment is made in the event of a decrease. The exemption applies only to in the same manner and on the same dates as the reserve requirement on nonpersonal time accounts that would be subject to a 3 percent reserve requirement. Effective with the reserve deposits with an original maturity of less than 1.5 years (see note 5). maintenance period beginning December 26, 2002, for depository institutions that report weekly, and with the period beginning January 16, 2003, for institutions that report quarterly, the exemption was raised from $5.7 million to $6.0 million. 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 2003 TTyyppee ooff ttrraannssaaccttiioonn aanndd mmaattuurriittyy 22000000 22000011 22000022 July Aug. Sept. Oct. Nov. Dec. Jan. U.S. TREASURY SECURITIES2 Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 8,676 15,503 21,421 4,838 529 750 0 250 00 00 2 Gross sales 0 0 0 0 0 0 0 0 0 0 Exchanges 477,904 542,736 657,931 45,828 63,083 53,314 62,947 51,394 53,374 71,075 4 For new bills 477,904 542,736 657,931 45,828 63,083 53,314 62,947 51,394 53,374 71,075 5 Redemptions 24,522 10,095 0 0 0 0 0 0 0 0 Others within one year 6 Gross purchases 8,809 15,663 12,720 1,104 445 1,286 0 0 0 0 7 Gross sales 0 0 0 0 0 0 0 0 0 0 8 Maturity shifts 62,025 70,336 89,108 11,052 8,987 11,174 6,143 3,688 13,448 6,216 9 Exchanges -54,656 -72,004 -92,075 -14,183 -5,040 -15,189 -5,435 -1,419 -12,059 -6,834 10 Redemptions 3,779 16,802 0 0 0 0 0 0 0 0 One to five years U Gross purchases 14,482 22,814 12,748 1,755 1,921 0 0 0 339 00 12 Gross sales 0 0 0 0 0 0 0 0 0 0 N Maturity shifts -52,068 -45,211 -73,093 -11,052 -629 -11,174 -6,143 -2,380 -13,448 -6,216 14 Exchanges 46,177 64,519 88,276 13,283 3,396 15,189 5,435 1,308 12,059 6,834 Five to ten years 15 Gross purchases 5,871 6,003 5,074 577 690 51 0 0 314 00 tft Gross sales 0 0 0 0 0 0 0 0 0 0 17 Maturity shifts -6,801 -21,063 -11,588 0 -6,714 0 0 722 0 0 18 Exchanges 6,585 6,063 3,800 900 1,645 0 0 111 0 0 More than ten years 19 Gross purchases 5,833 8,531 2,280 63 80 0 0 0 0 0 20 Gross sales 0 0 0 0 0 0 0 0 0 0 21 Maturity shifts -3,155 -4,062 -4,427 0 -1,645 0 0 -2,030 0 0 22 Exchanges 1,894 1,423 0 0 0 0 0 0 0 0 All maturities 23 Gross purchases 43,670 68,513 54,242 8,336 3,665 2,087 0 250 653 0 24 Gross sales 0 0 0 0 0 0 0 0 0 0 25 Redemptions 28,301 26,897 0 0 0 0 0 0 0 0 Matched transactions ?6 Gross purchases 4,415,905 4,722,667 4,981,624 513,400 495,729 449,250 429,029 378,381 195,565 0 27 Gross sales 4,397,835 4,724,743 4,958,437 511,902 497,031 449,986 425,399 377,535 175,820 0 Repurchase agreements 28 Gross purchases 0 0 00 0 0 00 00 00 00 00 29 Gross sales 0 0 0 0 0 0 0 0 0 0 Reverse repurchase agreements 30 Gross purchases 0 0 0 0 0 0 0 0 231,272 339922,,553300 31 Gross sales 0 0 0 0 0 0 0 0 252,363 389,810 32 Net change in U.S. Treasury securities 33,439 39,540 77,430 9,834 2,363 1,351 3,630 1,096 -693 2,720 FEDERAL AGENCY OBLIGATIONS Outright transactions 33 Gross purchases 0 0 0 0 0 0 0 0 0 00 34 Gross sales 0 0 0 0 0 0 0 0 0 0 35 Redemptions 51 120 0 0 0 0 0 0 0 0 Repurchase agreements 36 Gross purchases 0 0 0 0 0 00 00 00 00 00 37 Gross sales 0 0 0 0 0 0 0 0 0 0 38 Net change in federal agency obligations -51 -120 0 0 0 0 0 0 0 0 TRIPARTY OBLIGATIONS Repurchase agreements 39 Gross purchases 890,236 1,497,713 1,143,126 68,750 84,000 93,500 72,000 111133,,550011 112,750 113355,,774499 40 Gross sales 987,501 1,490,838 1,153,876 81,250 80,500 94,750 77,250 101,501 101,750 150,499 41 Net change in triparty obligations -97,265 6,875 -10,750 -12,500 3,500 -1,250 -5,250 12,000 11,000 -14,750 42 Total net change in System Open Market Account . . -63,877 46,295 66,680 -2,666 5,863 101 -1,620 13,096 10,307 -12,030 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 DomesticN onfinancialS tatistics • May 2003 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 2003 2002 2003 Jan. 29 Feb. 5 Feb. 12 Feb. 19 Feb. 26 Dec. Jan. Feb. Consolidated condition statement ASSETS 1 Gold certificate account 11,039 11,039 11,039 11,039 11,039 11,039 11,039 11,039 2 Special drawing rights certificate account 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 3 Coin 1,111 1,134 1,142 1,123 1,100 988 1,148 1,104 4 Securities, repurchase agreements, and loans 649,927 657,177 651,707 665,786 661,761 668,956 654,173 663,826 5 Securities held outright 629,416 629,411 630,957 631,273 636,006 629,416 629,416 636,921 6 U.S. Treasury2 629,406 629,401 630,947 631,263 635,996 629,406 629,406 636,911 7 Bills3 226,682 226,682 227,238 227,561 230,606 226,682 226,682 230,843 8 Notes and bonds, nominal3 389,219 389,219 390,217 390,217 391,913 389,219 389,219 392,593 9 Notes and bonds, inflation-indexed3 12,242 12,242 12,242 12,242 12,242 12,242 12,242 12,242 10 Inflation compensation4 1,263 1,257 1,250 1,242 1,235 1,263 1,263 1,233 11 Federal agency3 10 10 10 10 10 10 10 10 12 Repurchase agreements5 20,500 27,750 20,746 34,496 25,750 39,500 24,750 26,900 13 Loans 11 15 4 17 6 40 7 5 14 Items in process of collection 9,250 8,959 7,829 14,167 9,197 10,291 9,038 6,051 15 Bank premises 1,543 1,539 1,541 1,557 1,557 1,543 1,540 1,554 16 Other assets 38,747 38,611 38,833 35,548 36,130 37,031 38,225 35,745 17 Denominated in foreign currencies6 17,299 17,178 16,977 17,180 17,330 16,913 17,075 17,246 18 All other7 21,448 21,432 21,856 18,368 18,800 20,118 21,151 18,499 19 Total assets 713,818 720,659 714,292 731,420 722,984 732,048 717,363 721,519 LIABILITIES 20 Federal Reserve notes, net of F.R. Bank holdings 642,604 644,880 648,083 651,036 649,670 654,272 641,644 648,366 21 Reverse repurchase agreements8 18,466 17,986 17,604 17,850 17,421 21,091 18,370 18,018 22 Deposits 25,671 29,814 21,565 32,828 28,898 28,249 31,982 29,446 23 Depository institutions 18,327 23,756 17,707 28,006 23,556 22,541 26,147 24,761 24 U.S. Treasury, general account 7,030 5,664 3,527 4,407 4,950 4,420 5,509 4,268 25 Foreign official 100 148 103 134 154 136 102 224 26 Other 214 246 228 281 238 1,152 223 193 27 Deferred availability cash items 7,503 8,704 7,775 10,040 7,296 9,459 5,890 5,950 28 Other liabilities and accrued dividends9 2,242 2,231 2,277 2,249 2,276 2,217 2,267 2,277 29 Total liabilities 696,486 703,616 697,304 714,004 705,561 715,288 700,152 704,057 CAPITAL ACCOUNTS 30 Capital paid in 8,399 8,404 8,404 8,434 8,440 8,380 8,400 8,456 31 Surplus 8,380 8,380 8,357 8,380 8,380 8,380 8,380 8,380 32 Other capital accounts 552 260 227 603 603 0 431 626 33 Total capital 17,332 17,043 16,988 17,416 17,423 16,760 17,211 17,462 MEMO 34 Marketable securities held in custody for foreign official and international accounts310 858,621 868,037 872,033 878,685 880,187 855,053 863,815 888,946 35 U.S. Treasury 687,352 697,891 698,215 706,434 702,807 690,003 694,983 710,187 36 Federal agency 171,269 170,145 173,818 172,250 177,380 165,050 168,832 178,759 Federal Reserve note and collateral statement 37 Federal Reserve notes, net of F.R. Bank holdings 642,604 644,880 648,083 651,036 649,670 654,272 641,644 648,366 38 Collateral held against Federal Reserve notes 642,604 644,880 648,083 651,036 649,670 654,272 641,644 648,366 39 Gold certificate account 11,039 11,039 11,039 11,039 11,039 11,039 11,039 11,039 40 Special drawing rights certificate account 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 41 U.S. Treasury and agency securities pledged" 629,365 631,641 634,094 637,798 636,432 641,034 628,405 635,128 42 Other eligible assets 0 0 751 0 0 0 0 0 MEMO 43 Total U.S. Treasury and agency securities" 649,916 657,161 651,703 665,769 661,756 668,916 654,166 663,821 44 Less: face value of securities under reverse repurchase agreements12 18,472r 17,992 17,610 17,856 17,427 21,098 18,379 18,028 45 U.S. Treasury and agency securities eligible to be pledged .... 631,445' 639,169 634,094 647,913 644,329 647,818 635,787 645,794 1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly statistical 8. Cash value of agreements, which are fully collateralized by U.S. Treasury securities. release. For ordering address, see inside front cover. The Federal Reserve Banks began using these agreements on December 13, 2002. 2. Includes securities lent to dealers, which are fully collateralized by other U.S. Treasury 9. Includes exchange-translation account reflecting the daily revaluation at market securities. exchange rates of foreign exchange commitments. 3. Face value of the securities. 10. Includes U.S. Treasury STRIPS and other zero coupon bonds at face value. 4. Compensation that adjusts for the effect of inflation on the original face value of 11. Includes face value of U.S. Treasury and agency securities held outright, compensation inflation-indexed securities. to adjust for the effect of inflation on the original face value of inflation-indexed securities, 5. Cash value of agreements, which are fully collateralized by U.S. Treasury and federal and cash value of repurchase agreements. agency securities. 12. Face value of agreements, which are fully collateralized by U.S. Treasury securities. 6. Valued daily at market exchange rates. The Federal Reserve Banks began using these agreements on December 13, 2002. 7. Includes special investment account at the Federal Reserve Bank of Chicago in Treasury bills maturing within ninety days. 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 2003 2002 2003 Jan. 29 Feb. 5 Feb. 12 Feb. 19 Feb. 26 Dec. Jan. Feb. 1 Total loans 11 15 4 17 6 40 7 5 2 Within fifteen days' 11 13 0 17 6 35 6 5 3 Sixteen days to ninety days 0 2 4 0 0 5 1 0 4 91 days to 1 year 0 0 0 0 0 0 0 0 5 Total U.S. Treasury securities2 629,406 629,401 630,947 631,263 635,996 629,406 629,406 636,911 6 Within fifteen days' 49,592 45,981 44,507 46,317 45,075 27,444 32,974 23,882 7 Sixteen days to ninety days 130,709 134,667 136,637 131,154 133,699 154,225 147,674 146,519 8 Ninety-one days to one year 143,207 142,243 142,780 145,010 146,752 141,840 142,243 147,029 9 One year to five years 174,818 175,434 175,832 177,990 178,982 172,758 175,436 187,927 10 Five years to ten years 51,240 51,239 51,356 50,961 51,659 53,300 51,240 51,727 11 More than ten years 79,840 79,837 79,834 79,831 79,828 79,840 79,840 79,827 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 10 10 10 10 10 10 10 10 16 One year to five years 0 0 0 0 0 0 0 0 17 Five years to ten years 0 0 0 0 0 0 0 0 18 More than ten years 0 0 0 0 0 0 0 0 1. Holdings under repurchase agreements are classified as maturing within fifteen days in 2. Includes compensation that adjusts for the effects of inflation on the principal of accordance with maximum maturity of the agreements. inflation-indexed securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic NonfinancialS tatistics • May 2003 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 2002 2003 11999999 22000000 22000011 22000022 IItteemm DDeecc.. DDeecc.. DDeecc.. DDeecc.. July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Seasonally adjusted AAAADDDDJJJJUUUUSSSSTTTTEEEEDDDD FFFFOOOORRRR CCCCHHHHAAAANNNNGGGGEEEESSSS IIIINNNN RRRREEEESSSSEEEERRRRVVVVEEEE RRRREEEEQQQQUUUUIIIIRRRREEEEMMMMEEEENNNNTTTTSSSS2222 1111 TTTToooottttaaaallll rrrreeeesssseeeerrrrvvvveeeessss3333 41.81 38.54 41.24 40.12 39.67 39.98 39.25 39.18 39.69 40.12 40.61 40.76 2222 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss4444 41.49 38.33 41.18 40.04 39.48 39.64 39.02 39.04 39.41 40.04 40.58 40.73 3333 RRRReeeeqqqquuuuiiiirrrreeeedddd rrrreeeesssseeeerrrrvvvveeeessss 40.51 37.11 39.60 38.12 38.30 38.34 37.78 37.63 38.07 38.12 38.95 38.85 4444 MMMMoooonnnneeeettttaaaarrrryyyy bbbbaaaasssseeee5555 593.14 584.72 635.56 681.77 666.91 669.93 671.45 674.30 677.52 681.77 685.59' 691.28 Not seasonally adjusted 5555 TTTToooottttaaaallll rrrreeeesssseeeerrrrvvvveeeessss6666 41.89 38.53 41.20 40.03 39.32 39.74 38.78 38.54 38.98 40.03 42.73 41.87 6666 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss 41.57 38.32 41.13 39.95 39.13 39.41 38.55 38.40 38.71 39.95 42.70 41.85 7777 RRRReeeeqqqquuuuiiiirrrreeeedddd rrrreeeesssseeeerrrrvvvveeeessss7777 40.59 37.10 39.55 38.03 37.94 38.10 37.31 36.99 37.37 38.03 41.07 39.96 8888 MMMMoooonnnneeeettttaaaarrrryyyy bbbbaaaasssseeee8888 600.72 590.06 639.91 686.17 668.75 669.31 669.71 671.48 676.66 686.17 688.27' 690.17 NNNNOOOOTTTT AAAADDDDJJJJUUUUSSSSTTTTEEEEDDDD FFFFOOOORRRR CCCCHHHHAAAANNNNGGGGEEEESSSS IIIINNNN RRRREEEESSSSEEEERRRRVVVVEEEE RRRREEEEQQQQUUUUIIIIRRRREEEEMMMMEEEENNNNTTTTSSSS9999 9999 TTTToooottttaaaallll rrrreeeesssseeeerrrrvvvveeeessss11110000 41.65 38.47 41.08 40.17 39.41 39.85 38.91 38.69 39.14 40.17 42.74 41.87 11110000 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss 41.33 38.26 41.01 40.09 39.22 39.52 38.68 38.54 38.87 40.09 42.72 41.85 11111111 RRRReeeeqqqquuuuiiiirrrreeeedddd rrrreeeesssseeeerrrrvvvveeeessss 40.36 37.05 39.43 38.18 38.04 38.22 37.43 37.13 37.53 38.18 41.08 39.97 11112222 MMMMoooonnnneeeettttaaaarrrryyyy bbbbaaaasssseeee"""" 608.02 596.98 648.74 697.09 678.98 679.55 679.96 681.83 687.23 697.09 699.18' 700.96 11113333 EEEExxxxcccceeeessssssss rrrreeeesssseeeerrrrvvvveeeessss11112222 1.30 1.43 1.65 2.00 1.37 1.64 1.48 1.55 1.62 2.00 1.66 1.91 11114444 BBBBoooorrrrrrrroooowwwwiiiinnnnggggssss ffffrrrroooommmm tttthhhheeee FFFFeeeeddddeeeerrrraaaallll RRRReeeesssseeeerrrrvvvveeee .32 .21 .07 .08 .19 .33 .23 .14 .27 .08 .03 .03 1. Latest monthly and biweekly figures are available from the Board's H.3 (502) weekly would have been in past periods had current reserve requirements been in effect. Breakstatistical release. Historical data starting in 1959 and estimates of the effect on required adjusted required reserves include required reserves against transactions deposits and nonperreserves of changes in reserve requirements are available from the Money and Reserves sonal time and savings deposits (but not reservable nondeposit liabilities). Projections Section, Division of Monetary Affairs, Board of Governors of the Federal 8. The break-adjusted monetary base equals (1) break-adjusted total reserves (line 6), plus Reserve System, Washington, DC 20551. (2) the (unadjusted) currency component of the money stock, plus (3) (for all quarterly 2. Figures reflect adjustments for discontinuities, or "breaks," associated with regulatory reporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all changes in reserve requirements. (See also table 1.10.) those weekly reporters whose vault cash exceeds their required reserves) the break-adjusted 3. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, break- difference between current vault cash and the amount applied to satisfy current reserve adjusted required reserves (line 4) plus excess reserves (line 16). requirements. 4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally adjusted, 9. Reflects actual reserve requirements, including those on nondeposit liabilities, with no break-adjusted total reserves (line 1) less total borrowings of depository institutions from the adjustments to eliminate the effects of discontinuities associated with regulatory changes in Federal Reserve (line 17). reserve requirements. 5. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally 10. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy reserve adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency requirements. component of the money stock, plus (3) (for all quarterly reporters on the "Report of 11. The monetary base, not break-adjusted and not seasonally adjusted, consists of (1) total Transaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporters reserves (line 11), plus (2) required clearing balances and adjustments to compensate for float whose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted at Federal Reserve Banks, plus (3) the currency component of the money stock, plus (4) (for difference between current vault cash and the amount applied to satisfy current reserve all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault requirements. Cash" and for all those weekly reporters whose vault cash exceeds their required reserves) the 6. Break-adjusted total reserves equal break-adjusted required reserves (line 9) plus excess difference between current vault cash and the amount applied to satisfy current reserve reserves (line 16). requirements. Since February 1984, currency and vault cash figures have been measured over 7. To adjust required reserves for discontinuities that are due to regulatory changes in the computation periods ending on Mondays. reserve requirements, a multiplicative procedure is used to estimate what required reserves 12. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14). 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 2003 1999 2000 2001 2002 IItteemm Dec. Dec. Dec. Dec. Nov. Dec. Jan. Feb. Seasonally adjusted Measures2 1 Ml 1,121.9 1,084.9 1,173.4 1,210.5 1,202.7 1,210.5 1,212.2' 1,231.7 2 M2 4,648.0 4,926.9 5,440.6 5,796.5 5,781.3 5,796.5 5,825.7' 5,880.0 3 M3 6,528.6 7,090.5 7,993.5 8,511.1' 8,458.3 8,511.1' 8,506.0' 8,560.7 Ml cot 4 Currency3 517.5 531.0 581.4 626.7 623.0 626.7 630.2 635.3 5 Travelers checks4 8.3 8.0 7.8 7.5 7.5 7.5 7.6 7.6 6 Demand deposits5 352.2 306.7 325.6 296.4 294.0 296.4 295.4 305.2 7 Other cl 244.0 239.2 258.8 279.9 278.3 279.9 279.1 283.6 Nontrai 8 In M27 3,526.0 3,842.0 4,267.1 4,586.0 4,578.6 4,586.0 4,613.5 4,648.3 9 In M3 only8 1,880.6 2,163.6 2,552.9 2,714.6r 2,677.0 2,714.6' 2,680.2' 2,680.7 Commercial banks 10 Savings deposits, including MMDAs 1,288.8 1,422.3 1,734.5 2,047.4 2,041.3 2,047.4 2,079.1 2,106.4 11 Small tii 634.7 698.8 634.2 583.6 588.0 583.6 579.7 575.6 12 Large ti 650.2 717.4 670.8 683.2 702.3 683.2 691.5' 702.1 Thrift i, 13 Savings deposits, including MMDAs 449.6 451.7 569.0 710.3 697.7 710.3 722.9 739.1 14 Small tii 320.3 344.4 338.7 300.3' 301.0 300.3' 299.0' 297.3 15 Large tii 91.0 102.9 114.9 116.7 115.2 116.7 118.0 118.2 Money 16 Retail 832.7 924.8 990.7 944.3 950.6 944.3 932.8 929.9 17 Instituti 634.4 788.2 1,189.7 1,233.0 1,207.8 1,233.0 1,196.7 1,176.7 Repurchase agreements and eurodollars 18 Repurchase agreements12 335.7 363.5 375.0 468.6 440.1 468.6 459.3 472.3 19 Eurodollars12 169.2 191.5 202.5 213.0' 211.6 213.0' 214.8' 211.4 Not seasonally adjusted Measures2 20 Ml 1,148.3 1,112.3 1,203.5 1,240.4 1,201.4 1,240.4 1,219.3 1,217.6 ?1 M2 4,675.0 4,962.3 5,483.5 5,845.8 5,795.8 5,845.8 5,834.8 5,862.3 22 M3 6,571.1 7,145.0 8,065.2 8,588.6r 8,474.1' 8,588.6' 8,549.9' 8,590.4 Ml components 23 Currency3 521.5 535.2 584.9 629.9 622.6 629.9 628.01 634.4 24 Travelers checks4 8.4 8.1 7.9 7.7 7.6 7.7 7.7 7.7 25 Demand deposits5 371.8 326.5 347.6 316.8 296.1 316.8 300.1 296.7 26 Other checkable deposits6 246.6 242.5 263.2 286.0 275.0' 286.0 283.4 278.8 Nontransaction components 27 In M27 3,526.7 3,849.9 4,280.0 4,605.4 4,594.4 4,605.4 4,615.4' 4,644.8 28 In M3 only8 1,896.2 2,182.8 2,581.7 2,742.8' 2,678.3 2,742.8' 2,715.2' 2,728.0 Commercial banks 29 Savings deposits, including MMDAs 1,288.8 1,426.9 1,742.3 2,060.0' 2,054.5 2,060.^ 2,074.5' 2,095.5 30 Small time deposits9 635.7 700.0 635.2 584.3 589.4 584.3 579.8 575.4 31 Large time deposits1011 651.7 717.6 669.7 681.6 704.5 681.6 685.8' 698.2 Thrift institutions 32 Savings deposits, including MMDAs 449.6 453.1 571.5 714.7 702.2 714.7 721.3 735.3 33 Small time deposits9 320.8 345.0 339.2 300.7 301.7 300.7 299.1 297.2 34 Large time deposits10 91.2 103.0 114.7 116.4 115.5 116.4 117.0 117.5 Money market mutual funds 35 Retail 832.0 925.0 991.8 945.8 946.6 945.8 940.8 941.3 36 Institution-only 648.2 805.6 1,217.7 1,260.8 1,211.8 1,260.8 1,234.0 1,214.1 Repurchase agreements and eurodollars 37 Repurchase agreements12 334.7 364.2 376.5 470.4 435.5 470.4 462.8 483.4 38 Eurodollars12 170.4 192.4 203.0 213.6' 211.0 213.6' 215.6' 214.7 Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • May 2003 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 M1. 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 2002 2002 2003 2003 Feb. Aug. Sept.' Oct.' Nov.' Dec.' Jan.' Feb. Feb. 5 Feb. 12 Feb. 19 Feb. 26 Seasonally adjusted Assets 1 Bank credit 5438.9 5,672.8 5,730.1 5,759.9 5,837.8 5,886.6 5,892.3 5,970.8 5,936.8 5,958.2 5,971.3 5,992.1 7 Securities in bank credit 1488.5 1,632.9 1,643.5 1,643.8 1,688.6 1,715.1 1,722.4 1,768.8 1,745.6 1,756.3 1,770.4 1,784.0 3 U.S. government securities 832.6' 946.1' 962.8 972.4 1,001.6 1,012.6 1,013.3 1,037.9 1,028.1 1,029.1 1,038.8 1,047.4 4 Other securities 655.9r 686.8' 680.8 671.4 687.0 702.5 709.1 730.9 717.5 727.2 731.5 736.6 Loans and leases in bank credit2 .... 3,950.4 4,039.9 4,086.5 4,116.1 4,149.2 4,171.5 4,169.9 4,202.0 4,191.1 4,201.9 4,200.9 4,208.1 6 Commercial and industrial 1,028.8 981.3' 974.6 968.2 966.1 964.1 958.9 952.3 952.6 952.0 954.1 951.5 7 Real estate 1,789.2 1,902.0' 1,936.4 1,968.3 2,000.3 2,021.0 2,039.0 2,069.4 2,062.3 2,074.4 2,065.2 2,070.1 8 Revolving home equity 162.2 197.7 200.9 204.9 207.8 212.4 216.9 222.1 220.3 220.6 222.2 223.9 9 Other 1,627.0 1,704.3' 1,735.5 1,763.4 1,792.6 1,808.5 1,822.1 1,847.3 1,842.0 1,853.8 1,843.0 1,846.2 in Consumer 564.4 574.7 582.7 584.5 585.0 586.1 591.7 593.9 592.7 592.2 596.6 594.7 n Security3 153.4 176.7 181.4 183.1 186.6 191.6 176.8 184.0 177.6 182.0 183.7 189.1 i? Other loans and leases 414.6 405.2' 411.5 412.0 411.1 408.7 403.5 402.4 405.8 401.3 401.4 402.7 n Interbank loans 278.3 305.6 318.3 326.8 328.4 331.5 309.4 306.3 312.1 291.7 308.7 311.9 14 Cash assets4 297.6 318.1 317.2 318.4 314.8 317.7 314.4 315.0 322.9 310.1 320.0 306.8 15 Other assets5 489.3' 499.8' 499.0 512.4 518.4 518.1 517.3 539.9 539.3 548.1 544.7 529.7 16 Total assets6 6,428.6r 6,721.3r 6,789.6 6,842.1 6,923.7 6,978.2 6,956.6 7,054.9 7,034.3 7,031.4 7,067.3 7,063.1 Liabilities 17 Deposits 4,268.1 4,460.5 4,473.5 4,483.0 4,500.2 4,484.2 4,503.2 4,534.2 4,547.6 4,522.9 4,534.8 4,521.9 18 Transaction 624.9 599.1 584.0 611.3 606.1 613.8 606.1 607.0 588.1 587.9 621.7 627.4 19 Nontransaction 3,643.2 3,861.4 3,889.5 3,871.8 3,894.1 3,870.4 3,897.1 3,927.2 3,959.5 3,934.9 3,913.1 3,894.6 20 Large time 1,011.5 1,049.2 1,043.3 1,020.0 1,002.3 977.9 988.0 1,002.4 1,007.5 999.3 1,001.0 1,001.4 21 Other 2,631.7 2,812.2 2,846.2 2,851.7 2,891.8 2,892.5 2,909.1 2,924.8 2,952.0 2,935.6 2,912.1 2,893.2 22 Borrowings 1,231.7 1,292.7 1,322.3 1,332.9 1,365.2 1,397.3 1,335.3 1,370.5 1,365.8 1,349.2 1,361.9 1,398.1 ?3 From banks in the U.S 393.9r 404.9' 416.0 414.9 420.6 415.8 378.5 383.4 391.3 371.5 380.0 390.5 74 From others 837.7' 887.8' 906.2 918.0 944.5 981.6 956.8 987.1 974.5 977.6 981.8 1,007.5 25 Net due to related foreign offices 109.5 94.1 100.3 119.4 122.3 150.3 151.4 142.5 142.2 153.0 150.6 129.8 26 Other liabilities 338.9 430.4 435.4 440.0 444.4 453.7 460.1 476.6 454.0 475.6 485.8 477.7 27 Total liabilities 5,948.2 6,277.7 6,331.4 6,375.3 6,432.1 6,485.5 6,450.0 6,523.8 6,509.6 6,500.6 6,533.1 6,527.5 28 Residual (assets less liabilities)7 480.4' 443.6' 458.2 466.8 491.6 492.7 506.5 531.2 524.7 530.7 534.3 535.6 Not seasonally adjusted Assets 29 Bank credit 5,444.1 5,650.4 5,723.2 5,763.9 5,854.4 5,923.5 5,912.0 5,977.3 5,951.9 5,967.9 5,971.6 5,993.7 30 Securities in bank credit 1,496.0 1,624.3 1,639.8 1,643.1 1,692.8 1,724.1 1,732.4 1,778.4 1,756.7 1,765.0 1,779.9 1,792.3 31 U.S. government securities 839.6' 939.8' 959.3 968.6 1,002.5 1,018.3 1,019.6 1,046.9 1,037.5 1,037.7 1,047.6 1,055.6 3? Other securities 656.4' 684.5' 680.5 674.5 690.4 705.8 712.7 731.5 719.1 727.3 732.3 736.7 33 Loans and leases in bank credit2 .... 3,948.1 4,026.1 4,083.4 4,120.8 4,161.6 4,199.3 4,179.6 4,198.9 4,195.3 4,202.9 4,191.7 4,201.4 34 Commercial and industrial 1,027.7 975.8' 972.4 969.4 967.4 963.9 954.8 951.1 950.1 950.2 952.8 950.8 35 Real estate 1,784.0 1,903.1' 1,938.5 1,970.5 2,005.4 2,025.8 2,038.1 2,063.5 2,059.0 2,071.9 2,057.7 2,061.1 36 Revolving home equity 162.2 197.8 201.9 205.5 208.5 212.6 216.6 222.0 220.3 221.0 222.3 223.5 37 Other 1,621.9 1,705.3' 1,736.6 1,765.0 1,796.9 1,813.2 1,821.5 1,841.4 1,838.7 1,850.9 1,835.4 1,837.6 38 Consumer 566.7 571.2 582.2 585.1 587.5 596.1 600.1 596.7 597.5 595.8 599.3 596.5 39 Credit cards and related plans . . 223.6 224.4 231.2 232.1 231.5 238.5 235.4 228.6 226.0 224.8 232.0 231.5 40 Other 343.2 346.8 351.0 353.0 356.0 357.7 364.7 368.1 371.6 371.0 367.3 365.0 41 Security3 155.1 172.2 179.6 185.5 190.3 200.5 182.5 186.9 183.5 185.9 182.3 192.9 42 Other loans and leases 414.5 403.8' 410.7 410.3 410.9 413.0 404.3 400.7 405.1 399.1 399.5 400.1 43 Interbank loans 277.0 299.2 310.5 321.5 332.3 338.4 307.2 305.2 312.7 291.7 305.2 306.9 44 Cash assets4 298.9 303.8 314.1 320.7 324.7 338.4 328.0 316.0 317.3 302.5 336.1 308.4 45 Other assets5 488.3' 497.2' 501.5 511.1 519.6 521.5 519.3 539.1 541.8 548.5 541.1 526.7 46 Total assets6 6,432.5r 6,675.4r 6,774.1 6,842.1 6,955.1 7,045.9 6,989.9 7,060.2 7,046.7 7,033.6 7,076.4 7,058.2 Liabilities 47 Deposits 4,284.0 4,413.7 4,441.4 4,467.9 4,520.0 4,533.9 4,527.6 4,551.8 4,570.6 4,542.4 4,554.8 4,528.8 48 Transaction 619.7 583.8 577.8 606.1 611.7 641.3 618.4 602.0 583.0 577.2 623.5 620.6 49 Nontransaction 3,664.3 3,829.9 3,863.6 3,861.8 3,908.3 3,892.6 3,909.2 3,949.8 3,987.6 3,965.2 3,931.3 3,908.2 50 Large time 1,018.7 1,033.5 1,028.7 1,013.9 1,009.3 991.8 1,000.1 1,009.3 1,017.3 1,008.7 1,005.6 1,007.0 51 Other 2,645.7 2,796.4 2,834.9 2,847.9 2,899.0 2,900.7 2,909.1 2,940.5 2,970.4 2,956.5 2,925.8 2,901.2 52 Borrowings 1,234.6 1,272.6 1,319.7 1,334.9 1,368.3 1,397.0 1,348.4 1,373.2 1,374.5 1,350.9 1,367.5 1,394.3 53 From banks in the U.S 398.9' 399.7' 409.2 413.1 417.8 417.2 383.2 388.3 396.4 376.0 385.9 394.4 54 From others 835.7' 872.9' 910.5 921.7 950.5 979.7 965.2 984.9 978.1 974.9 981.6 999.9 55 Net due to related foreign offices 116.2 91.1 100.9 118.7 125.9 156.7 158.8 149.3 147.4 159.3 157.6 139.2 56 Other liabilities 344.0 427.6 435.5 440.1 450.1 460.8 468.4 484.3 460.3 482.6 494.0 488.2 57 Total liabilities 5,978.8 6,205.0 6,297.5 6,361.6 6,464.3 6,548.4 6,503.3 6,558.5 6,552.7 6,535.2 6,573.9 6,550.5 58 Residual (assets less liabilities)7 453.7' 470.4' 476.6 480.5 490.8 497.5 486.6 501.7 494.0 498.4 502.5 507.7 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • May 2003 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities '—Continued B. Domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures Account 2002 2002 2003 2003 Feb. Aug. Sept. Oct.' Nov.' Dec.' Jan.' Feb. Feb. 5 Feb. 12 Feb. 19 Feb. 26 Seasonally adjusted Assets 1 Bank credit 4,846.7 5,051.9 5,111.3 5,145.6 5,216.8 5,251.9 5,267.4 5,334.0 5,304.1 5,324.5 5,337.0 5,351.9 2 Securities in bank credit 1,255.0 1,383.0 1,396.0 1,398.3 1,439.3 1,451.2 1,456.9 1,492.8 1,471.2 1,480.2 1,495.6 1,508.5 3 U.S. government securities 763.2r 864.3' 876.1' 883.5 908.7 911.6 911.9 931.7 923.1 923.1 933.5 940.3 4 Other securities 491.8' 518.7' 520.0' 514.7 530.7 539.6 545.0 561.1 548.1 557.1 562.1 568.1 5 Loans and leases in bank credit2 .... 3,591.8 3,668.9 3,715.3 3,747.3 3,777.5 3,800.7 3,810.5 3,841.2 3,832.9 3,844.3 3,841.4 3,843.5 6 Commercial and industrial 830.6 791.4' 789.1' 787.0 787.1 786.0 784.0 780.9 780.4 780.5 782.4 780.5 7 Real estate 1,771.8 1,883.2' 1,917.4' 1,948.8 1,980.5 2,001.6 2,020.2 2,051.5 2,044.4 2,056.5 2,047.4 2,052.1 8 Revolving home equity 162.2 197.7 200.9 204.9 207.8 212.4 216.9 222.1 220.3 220.6 222.2 223.9 9 Other 1,609.6 1,685.5' 1,716.5' 1,743.9 1,772.7 1,789.1 1,803.3 1,829.4 1,824.2 1,835.9 1,825.2 1,828.2 10 Consumer 564.4 574.7 582.7 584.5 585.0 586.1 591.7 593.9 592.7 592.2 596.6 594.7 11 Security3 78.5 86.2 86.7 86.0 81.5 81.4 71.4 72.9 70.5 73.7 73.8 73.7 12 Other loans and leases 346.5 333.5' 339.5' 341.0 343.3 345.6 343.2 342.0 344.9 341.3 341.2 342.5 13 Interbank loans 258.1 287.1 296.7' 301.9 301.8 299.7 278.5 275.4 283.0 260.9 278.3 279.6 14 Cash assets4 255.3 271.6 271.2 273.3 274.1 275.2 276.5 279.2 286.7 274.8 284.1 270.9 15 Other assets5 459.7' 470.8' 470.5' 477.3 480.4 476.9 470.6 492.2 489.5 499.8 498.1 482.5 16 Total assets6 5,744.8r 6,006.8r 6,075. lr 6,123.1 6,197.8 6,228.4 6,216.6 6,304.2 6,287.0 6,283.8 6,320.6 6,307.9 Liabilities 17 Deposits 3,797.8 3,965.5 3,987.4 4,016.7 4,051.7 4,060.2 4,071.2 4,087.3 4,096.9 4,077.8 4,093.6 4,072.6 18 Transaction 614.7 589.1 573.9 601.5 596.6 604.3 596.3 597.2 578.7 578.5 612.2 617.4 19 Nontransaction 3,183.1 3,376.4 3,413.5 3,415.1 3,455.0 3,455.9 3,474.9 3,490.1 3,518.3 3,499.3 3,481.4 3,455.2 20 Large time 553.7 569.9 573.3 571.3 571.6 570.3 580.4 586.2 588.8 584.5 588.1 583.7 21 Other 2,629.5 2,806.5 2,840.2 2,843.8 2,883.5 2,885.5 2,894.5 2,903.9 2,929.5 2,914.8 2,893.3 2,871.5 22 Borrowings 1,043.0 1,078.9 1,098.2 1,099.0 1,110.6 1,114.4 1,057.4 1,087.2 1,089.8 1,070.0 1,088.3 1,100.8 23 From banks in the U.S 371.9' 383.2' 393.3' 391.7 395.1 385.9 347.3 351.9 361.5 347.4 348.3 352.3 24 From others 671.1' 695.7' 704.9' 707.3 715.5 728.5 710.1 735.3 728.2 722.6 740.0 748.5 25 Net due to related foreign offices 170.0 179.7 184.1 191.9 196.8 211.4 223.2 224.1 218.7 227.4 227.3 225.2 26 Other liabilities 259.3 333.6 342.7 340.3 345.3 353.8 363.2 377.8 356.7 380.1 381.9 380.4 27 Total liabilities 5,270.1 5,557.7 5,612.4 5,647.9 5,704.4 5,739.7 5,715.0 5,776.4 5,762.1 5,755.2 5,791.1 5,779.0 28 Residual (assets less liabilities)7 474.7' 449.2' 462.7' 475.2 493.4 488.7 501.6 527.7 524.9 528.6 529.5 528.9 Not seasonally adjusted Assets 29 Bank credit 4,847.9 5,035.6 5,107.8 5,149.6 5,230.7 5,279.7 5,279.9 5,335.4 5,311.7 5,327.1 5,335.7 5,348.4 30 Securities in bank credit 1,262.5 1,374.3 1,392.3 1,397.6 1,443.6 1,460.2 1,466.9 1,502.4 1,482.2 1,489.0 1,505.1 1,516.8 31 U.S. government securities 770.2' 858.01 872.6' 879.7 909.5 917.3 918.2 940.7 932.5 931.7 942.2 948.6 32 Other securities 492.2' 516.3' 519.7' 517.9 534.1 542.9 548.7 561.6 549.7 557.3 562.9 568.2 33 Loans and leases in bank credit2 .... 3,585.4 3,661.3 3,715.5 3,752.0 3,787.1 3,819.5 3,813.0 3,833.1 3,829.5 3,838.1 3,830.6 3,831.6 34 Commercial and industrial 827.9 787.5' 787.1' 787.6 786.9 784.3 779.2 778.3 777.5 777.3 779.5 778.4 35 Real estate 1,766.7 1,884.3' 1,919.5' 1,950.9 1,985.6 2,006.4 2,019.3 2,045.6 2,041.1 2,054.0 2,039.9 2,043.1 36 Revolving home equity 162.2 197.8 201.9 205.5 208.5 212.6 216.6 222.0 220.3 221.0 222.3 223.5 37 Other 1,604.5 1,686.5' l,7I7.6r 1,745.5 1,777.1 1,793.8 1,802.7 1,823.5 1,820.8 1,832.9 1,817.6 1,819.6 38 Consumer 566.7 571.2 582.2 585.1 587.5 596.1 600.1 596.7 597.5 595.8 599.3 596.5 39 Credit cards and related plans . . 223.6 224.4 231.2 232.1 231.5 238.5 235.4 228.6 226.0 224.8 232.0 231.5 40 Other 343.2 346.8 351.0 353.0 356.0 357.7 364.7 368.1 371.6 371.0 367.3 365.0 41 Security3 77.8 85.0 87.7 88.3 83.9 84.4 71.2 72.3 69.6 72.2 72.3 73.6 42 Other loans and leases 346.3 333.4' 339.1' 340.1 343.1 348.2 343.3 340.2 343.7 338.9 339.6 340.0 43 Interbank loans 256.8 280.7 288.8 296.5 305.7 306.6 276.3 274.3 283.6 260.9 274.9 274.7 44 Cash assets4 255.6 258.7 268.0 274.7 281.6 293.3 288.0 279.4 279.9 266.1 299.4 272.1 45 Other assets5 458.2' 468.6' 472.5' 476.6 481.8 479.2 471.4 490.5 490.6 499.1 494.3 478.8 46 Total assets6 5,743.2' 5,968.9r 6,062.3r 6,122.8 6,224.3 6,283.3 6,239.5 6,302.7 6,289.1 6,276.6 6,327.1 6,296.9 Liabilities 47 Deposits 3,808.3 3,933.0 3,967.4 4,009.0 4,067.9 4,098.2 4,085.7 4,099.8 4,112.4 4,090.8 4,110.6 4,074.1 48 Transaction 609.3 574.0 567.6 596.2 602.1 631.2 608.4 592.1 573.4 567.6 613.6 610.5 49 Nontransaction 3,199.0 3,359.1 3,399.9' 3,412.7 3,465.8 3,467.0 3,477.3 3,507.7 3,539.0 3,523.2 3,497.0 3,463.5 50 Large time 555.6 568.3 570.7 572.5 575.1 573.4 583.1 588.3 591.5 587.8 590.1 584.3 51 Other 2,643.4 2,790.8 2,829.1 2,840.2 2,890.7 2,893.6 2,894.2 2,919.3 2,947.4 2,935.4 2,906.9 2,879.2 52 Borrowings 1,045.9 1,058.8 1,095.6 1,101.0 1,113.7 1,114.0 1,070.6 1,089.9 1,098.5 1,071.7 1,093.9 1,097.0 53 From banks in the U.S 376.9' 378.1' 386.5' 390.0 392.3 387.3 352.1 356.8 366.6 351.8 354.1 356.1 54 From others 669.0' 680.8' 709.1' 711.0 721.4 726.7 718.5 733.1 731.9 719.9 739.8 740.9 55 Net due to related foreign offices 173.8 178.7 183.6 192.5 201.5 215.6 228.1 228.8 223.1 231.5 232.5 231.1 56 Other liabilities 263.2 332.0 342.2 341.2 351.7 359.4 369.8 384.0 362.5 385.5 388.9 388.4 57 Total liabilities 5,291.2' 5,502.6 5,588.8 5,643.7 5,734.8 5,787.2 5,754.3 5,802.4 5,796.5 5,779.5 5,825.9 5,790.6 58 Residual (assets less liabilities)7 452.0' 466.3' 473.5' 479.1 489.5 496.1 485.3 500.3 492.6 497.1 501.1 506.3 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities 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 2002 2002 2003 2003 Feb. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Feb. 5 Feb. 12 Feb. 19 Feb. 26 Seasonally adjusted Assets 1 Bank credit 2,628.1' 2,724.9' 2,763.0' 2,775.9' 2,828.6' 2,855.2' 2,863.8' 2,914.4 2,888.1 2,908.8 2,915.2 2,929.5 ? Securities in bank credit 631.0 736.9 745.8 743.7 780.1 787.9 794.1 829.7 805.3 816.6 833.8 848.3 3 U.S. government securities 360.9r 427.5' 432.0' 435.2' 455.4' 455.4' 456.6' 475.9 463.7 467.4 479.3 486.7 4 Trading account 33.6 48.0 42.6 37.8 48.1 44.5 41.3 54.7 48.5 54.6 53.9 60.3 Investment account 3213' 379.5' 389.3' 397.5' 407.4' 410.9' 415.2' 421.2 415.2 412.8 425.3 426.4 6 Other securities 270.1' 309.4' 313.9' 308.4' 324.7' 332.5' 337.5' 353.9 341.6 349.2 354.5 361.5 7 Trading account 130.0 174.5 172.7 161.5 171.8 176.2 183.2 199.7 187.5 194.9 199.9 207.9 8 Investment account 140.2' mc 141.1' 146.9' 152.9' 156.4' 154.3' 154.2 154.1 154.3 154.6 153.6 9 State and local government . . 27.8 28.0 28.4 28.7 29.1 29.4 29.6 29.8 29.8 29.9 29.7 29.8 in Other 112.4' 106.9' 112.8' 118.2' 123.8' 127.0' 124.7' 124.4 124.3 124.5 124.9 123.7 II Loans and leases in bank credit2 .... 1,997.0' 1.988.01, 2,017.2' 2,032.3' 2,048.4 2,067.2' 2,069.7' 2,084.7 2,082.8 2,092.2 2,081.4 2,081.2 1? Commercial and industrial 528.7 487.7 484.2 481.1' 479.3' 477.1' 474.4' 469.0 469.0 469.1 469.9 468.6 n Bankers acceptances .0 .0 .0 .0 .0 .0 .0 .0 n.a. n.a. n.a. n.a. 14 Other 528.7 487.7 484.2 481.1' 479.3' 477.1' 474.4' 469.0 469.0 469.1 469.9 468.6 is Real estate 855.2 902.2' 923.1' 942.0' 965.0 983.9 1,000.0 1,021.5 1,018.0 1,027.0 1,017.6 1,019.4 16 Revolving home equity 101.9 124.6 126.8 129.5 131.7 135.7 138.9 141.8 140.7 140.9 141.5 142.8 17 Other 753.4 777.7' 796.3' 812.5' 833.2 848.3 861.1 879.8 877.4 886.2 876.1 876.6 18 Consumer 293.8' 289.7' 296.5' 296.9' 295.2 294.7' 296.2' 294.4 295.6 295.7 294.2 293.1 19 Security3 70.7 78.2 78.5 77.6 73.2 73.0 62.9 64.3 61.9 65.3 65.1 64.8 20 Federal funds sold to and repurchase agreements with broker-dealers 57.6 66.3 67.9 66.8 62.0 62.0 51.9 53.2 51.2 5533..88 5533..22 5544..44 71 Other 13.1 11.9 10.5 10.8 11.3 11.0 11.0 11.1 10.6 11.5 12.0 10.4 27 State and local government 13.8 12.9 13.0 12.9 12.1 11.8 11.9 12.2 11.9 12.2 12.1 12.3 23 Agricultural 9.6 8.2 8.2 8.1 8.1 8.1 8.1 7.8 7.9 7.8 7.8 7.7 24 Federal funds sold to and repurchase agreements with others 23.3 16.6 19.8 19.2 18.5 22.4 22.9 23.2 25.0 2233..00 2222 22 2233..66 75 All other loans 70.5 66.4' 68.1' 70.2' 74.0' 74.4' 73.6' 72.5 73.5 72.2 72.8 72.1 26 Lease-financing receivables 131.3 126.1 125.9 124.2 123.0 121.8 119.9 119.8 119.9 119.8 119.7 119.7 27 Interbank loans 158.8 176.5 182.0 181.7 180.3 178.7 156.1 149.3 158.9 140.9 151.7 146.5 28 Federal funds sold to and repurchase agreements with commercial banks 85.2 86.8 89.2 84.0 87.3 85.3 86.7 8800..11 89.1 7722..00 8822..66 7777..44 ?9 Other 73.5 89.7 92.9 97.7 93.0 93.4 69.4 69.1 69.8 68.9 69.1 69.1 30 Cash assets4 143.4 146.9 144.4 144.1 145.0 146.6 145.8 146.3 151.2 142.1 150.6 140.6 31 Other assets5 318.5' 325.6' 323.4' 332.3' 332.4' 327.1' 320.7' 337.7 334.2 342.8 344.1 331.2 32 Total assets6 3,204.0r 3,330.7r 3,369.9r 3,391.1r 3,443.2r 3,464.8r 3,442.6r 3,503.5 3,488.5 3,490.7 3,517.2 3,503.6 Liabilities 33 Deposits 1,804.2 1,872.9 1,883.6 1,899.9 1,924.4 1,936.4 1,946.8' 1,946.1 1,961.4 1,946.7 1,949.7 1,924.9 34 Transaction 311.1 282.4 268.4 286.9 282.6 288.5 283.1 283.2 270.5 271.6 295.1 293.6 35 Nontransaction 1,493.1 1,590.5 1,615.2 1,612.9 1,641.8 1,647.9 1,663.7' 1,662.9 1,690.9 1,675.1 1,654.7 1,631.3 36 Large time 252.0 268.3 270.8 266.4 265.2' 261.4' 272.1' 275.0 278.8 274.8 277.2 270.6 37 Other 1,241.1 1,322.1 1,344.4 1,346.6 1,376.6' 1,386.5' 1,391.6' 1,388.0 1,412.1 1,400.3 1,377.5 1,360.7 38 Borrowings 711.0 720.6 724.0 721.7 733.5 724.9 652.9 679.5 681.2 659.5 677.8 696.7 39 From banks in the U.S 251.3 251.3 258.0 257.8 264.2 246.3 192.9 194.3 204.3 188.4 190.1 195.4 40 From others 459.7 469.3 466.0 463.9 469.3 478.7 460.0 485.2 476.9 471.1 487.7 501.3 41 Net due to related foreign offices 159.1 171.2 175.4 179.5 185.5 199.0 208.0' 211.1 203.6 214.9 214.6 212.4 42 Other liabilities 199.3 267.3 274.5 271.3 274.4 283.2 286.1' 298.0 277.6 300.9 302.4 299.7 43 Total liabilities 2,873.6 3,032.0 3,057.5 3,072.3 3,117.8 3,143.6 3,093.8 3,134.7 3,123.8 3,121.9 3,144.6 3,133.7 44 Residual (assets less liabilities)7 330.5' 298.6' 312.5' 318.8' 325.4' 321.2' 348.8' 368.8 364.6 368.8 372.6 369.9 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 DomesticN onfinancial Statistics • May 2003 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 2002 2002 2003 2003 Feb. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Feb. 5 Feb. 12 Feb. 19 Feb. 26 Not seasonally adjusted Assets 45 Bank credit 2,632.9' 2,711.6' 2,757.5' 2,774.6' 2,836.7' 2,869.6' 2,874.6' 2,919.6 2,897.1 2,913.3 2,920.0 2,931.1 46 Securities in bank credit 636.8 730.6 743.1 744.2 784.5 794.1 802.8 837.3 814.7 822.7 841.9 854.6 47 U.S. government securities 366.2' 423.5' 429.5' 432.6' 456.5' 458.2' 461.7' 482.9 471.5 473.3 486.6 493.0 48 Trading account 34.1 47.6 42.4 37.6 48.2 44.8 41.8 55.5 49.3 55.3 54.8 61.1 49 Investment account 332.1' 375.9' 387.1' 395.1' 408.3' 413.5' 419.9' 427.4 422.2 418.0 431.8 431.9 50 Mortgage-backed securities . 258.3 304.7 308.2 313.1 324.6 317.0 323.1 329.4 324.2 322.5 333.7 332.7 51 Other 73.7' 71.3' 79.0' 82.0' 83.7' 96.5' 96.7' 98.0 97.9 95.6 98.1 99.2 52 One year or less 17.1' 17.2' 19.8' 21.7' 23.0' 24.0' 21.2' 22.7 20.0 22.6 22.9 23.9 5 3 One to five years 44.5 42.2 46.3 49.9 47.1 56.2 58.2 56.9 59.3 56.8 56.8 56.0 54 More than five years .... 12.1 11.8 12.9 10.4 13.5 16.3 17.4 18.4 18.6 16.2 18.5 19.4 55 Other securities 270.6' 307.1' 313.6' 311.6' 328.1' 335.8' 341.1' 354.4 343.2 349.4 355.3 361.6 56 Trading account 130.2 173.1 172.6 163.2 173.6 177.9 185.1 200.0 188.4 195.0 200.4 208.0 57 Investment account 140.4' 133.9' 141.0' 148.4' 154.5' 157.9' 156.0' 154.4 154.9 154.4 154.9 153.6 58 State and local government . 27.8 27.8 28.4 29.0 29.4 29.7 30.0 29.8 29.9 29.9 29.7 29.8 59 Other 112.6' 106.1' 112.7' 119.4' 125.0' 128.3' 126.0' 124.6 124.9 124.5 125.2 123.7 60 Loans and leases in bank credit2 . . . 1,996.1' 1,981.0' 2,014.3' 2,030.4' 2,052.1 2,075.5' 2,071.8' 2,082.3 2,082.4 2,090.6 2,078.1 2,076.5 61 Commercial and industrial 527.6 485.3 483.8 481.9' 480.1' 475.3' 470.5' 467.9 467.5 467.5 468.8 467.8 62 Bankers acceptances .0 .0 .0 .0 .0 .0 .0 .0 n.a. n.a. n.a. n.a. 63 Other 527.6 485.3 483.8 481.9' 480.1' 475.3' 470.5' 467.9 467.5 467.5 468.8 467.8 64 Real estate 852.0 902.7' 923.5' 940.9' 966.9 985.8 999.4 1,017.8 1,016.1 1,025.7 1,012.9 1,012.9 65 Revolving home equity 102.0 124.9 127.3 129.5 131.9 135.2 138.3 141.9 140.7 141.3 141.9 142.8 66 Other 438.5' 465.2' 482.9' 495.3 518.7 534.5' 544.7' 559.3 559.2 568.2 554.6 552.9 67 Commercial 311.5' 312.6' 313.4' 316.1' 316.4 316.0' 316.4' 316.6 316.2 316.2 316.4 317.2 68 Consumer 296.2' 287.5' 294.0' 293.9' 294.0' 297.8' 301.0' 297.3 299.3 298.9 297.2 295.6 69 Credit cards and related plans . 122.2' 114.7' 118.4' 116.8' 114.0 116.5' 115.2' 109.7 109.5 109.3 110.1 110.0 70 Other 174.1 172.8 175.6 177.2 180.0 181.3 185.7 187.6 189.8 189.6 187.1 185.5 71 Security3 70.0 77.1 79.7 80.0 75.3 75.9 62.9 63.7 61.0 63.7 63.8 64.9 72 Federal funds sold to and repurchase agreements with broker-dealers 57.0 65.3 69.0 68.8 63.7 64.5 51.9 52.7 50.5 52.5 52.1 54.5 73 Other 13.0 11.7 10.7 11.1 11.6 11.4 11.0 11.0 10.5 11.2 11.7 10.4 74 State and local government 13.8 12.9 13.0 12.9 12.1 11.8 11.9 12.2 11.9 12.2 12.1 12.3 75 Agricultural 9.5 8.2 8.2 8.0 8.0 8.1 8.1 7.7 7.8 7.8 7.7 7.6 76 Federal funds sold to and repurchase agreements with others 24.7 16.6 19.8 19.2 18.5 22.4 22.9 23.2 25.0 23.0 22.2 23.6 II All other loans 69.5 65.9' 68.3' 70.1' 74.5' 76.2' 73.3' 71.5 72.3 70.5 72.3 71.0 78 Lease-financing receivables 132.8 124.8 124.0 123.6 122.7 122.3 121.9 121.1 121.5 121.2 121.0 120.9 79 Interbank loans 157.0 172.0 177.0 177.3 182.1 182.9 155.7 147.6 157.0 139.6 149.7 114433..88 80 Federal funds sold to and repurchase agreements with commercial banks 84.3 84.6 86.8 82.0 88.2 87.3 86.5 79.2 88.1 71.3 81.5 76.0 81 Other 72.7 87.4 90.2 95.3 93.9 95.5 69.2 68.3 69.0 68.2 68.2 67.8 82 Cash assets4 144.1 137.9 141.6 145.1 148.0 157.5 154.4 147.0 147.2 137.9 161.2 141.1 83 Other assets5 316.9' 323.4' 325.4' 331.6' 333.9' 329.4' 321.5' 335.9 335.3 342.1 340.3 327.6 84 Total assets6 3,206.Or 3,301.4r 3,358.4r 3r386.0r 3,457.3r 3,496.4r 3,462.5r 3,505.7 3,492.5 3,488.6 3,526.6 3,499.3 Liabilities 85 Deposits 1,810.7 1,856.4 1,874.8 1,896.8 1,933.4 1,952.6 1,950.5' 1,954.2 1,966.8 1,955.0 1,962.8 1,927.5 86 Transaction 307.7 271.0 264.0 283.0 285.5 305.0 291.0 280.1 265.6 264.9 297.3 289.9 87 Nontransaction 1,502.9 1,585.5 1,610.9 1,613.9 1,647.9 1,647.6 1,659.5' 1,674.1 1,701.3 1,690.1 1,665.5 1,637.6 88 Large time 253.9 266.7 268.3 267.6 268.7' 264.5' 274.8 277.1 281.6 278.1 279.2 271.2 89 Other 1,249.0 1,318.8 1,342.6 1,346.3 1,379.2' 1,383.2' 1,384.7' 1,396.9 1,419.7 1,412.0 1,386.3 1,366.4 90 Borrowings 714.0 700.6 721.4 723.6 736.6 724.5 666.1 682.2 690.0 661.3 683.4 692.9 91 From banks in the U.S 256.2 246.1 251.1 256.0 261.3 247.7 197.7 199.2 209.4 192.9 196.0 199.2 92 From nonbanks in the U.S 457.7 454.4 470.3 467.6 475.3 476.8 468.4 483.0 480.6 468.3 487.5 493.7 93 Net due to related foreign offices 162.8 170.2 175.0 180.2 190.2 203.2 212.9' 215.8 208.0 218.9 219.9 218.3 94 Other liabilities 203.3 265.7 274.0 272.2 280.8 288.9 292.7' 304.2 283.4 306.3 309.4 307.7 95 Total liabilities 2,890.7 2,992.9 3,045.2 3,072.8 3,141.1 3,169.3 3,122.2 3,156.4 3,148.2 3,141.5 3,175.5 3,146.4 96 Residual (assets less liabilities)7 315.3' 308.4' 313.2' 313.2' 316.3' 327.1' 340.3' 349.4 344.2 347.0 351.1 352.8 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 2002 2002 2003 2003 Feb. Aug. Sept. Oct.' Nov.' Dec.' Jan.' Feb. Feb. 5 Feb. 12 Feb. 19 Feb. 26 Seasonally adjusted Assets 1 Bank credit 2,218.7' 2,326.9' 2,348.4' 2,369.7 2,388.3 2,396.7 2,403.6 2,419.6 2,416.0 2,415.6 2,421.7 2,422.4 7 Securities in bank credit 624.0 646.0 650.2 654.6 659.2 663.3 662.9 663.1 665.9 663.6 661.8 660.2 U.S. government securities 402.3 436.8 444.1 448.3 453.2 456.3 455.3 455.9 459.4 455.7 454.2 453.6 4 Other securities 221.6 209.2 206.1 206.3 206.0 207.0 207.5 207.2 206.5 207.9 207.6 206.6 5 Loans and leases in bank credit2 .... 1,594.7' 1,680.9' 1,698.1' 1,715.0 1,729.1 1,733.5 1,740.7 1,756.5 1,750.2 1,752.1 1,760.0 1,762.2 6 Commercial and industrial 301.8' 303.7' 305.0' 305.9 307.9 308.9 309.6 311.9 311.4 311.4 312.5 311.9 7 Real estate 916.5 980.9' 994.2' 1,006.7 1,015.6 1,017.7 1,020.3 1,029.9 1,026.4 1,029.4 1,029.9 1,032.7 8 Revolving home equity 60.3 73.1 74.1 75.4 76.1 76.8 78.0 80.3 79.6 79.7 80.7 81.0 9 Other 856.2 907.8' 920.1' 931.4 939.5 940.9 942.2 949.6 946.8 949.7 949.1 951.7 10 Consumer 270.6' 285.0' 286.1' 287.7 289.7 291.4 295.5 299.5 297.1 296.5 302.4 301.6 11 Security3 7.8 8.0 8.2 8.4 8.3 8.4 8.5 8.6 8.6 8.5 8.7 8.9 17 Other loans and leases 97.9 103.3 104.6 106.4 107.6 107.0 106.8 106.6 106.7 106.2 106.6 107.1 n Interbank loans 99.3 110.6 114.6 120.2 121.5 121.0 122.4 126.1 124.1 120.0 126.7 133.1 14 Cash assets4 111.9 124.7 126.8' 129.1 129.1 128.6 130.7 132.9 135.5 132.8 133.6 130.3 15 Other assets5 141.2 145.2 147.1 145.0 147.9 149.7 149.8 154.6 155.3 157.0 154.0 151.2 16 Total assets6 2,540.7r 2,676.2r 2,705.2r 2,732.0 2,754.6 2,763.6 2,774.1 2,800.7 2,798.5 2,793.1 2,803.3 2,804.3 Liabilities 17 Deposits 1,993.6 2,092.6 2,103.9' 2,116.8 2,127.3 2,123.8 2,124.4 2,141.2 2,135.5 2,131.1 2,143.8 2,147.8 18 Transaction 303.6 306.7 305.5 314.6 314.1 315.8 313.3 314.1 308.2 306.9 317.1 323.8 19 Nontransaction 1,690.0 1,785.9 1,798.4' 1,802.2 1,813.2 1,807.9 1,811.2 1,827.2 1,827.3 1,824.2 1,826.7 1,823.9 70 Large time 301.7 301.6 302.5 304.9 306.4 308.9 308.3 311.2 310.0 309.7 310.9 313.1 71 Other 1,388.4 1,484.3 1,495.9 1,497.3 1,506.8 1,499.0 1,502.9 1,515.9 1,517.3 1,514.5 1,515.8 1,510.9 77 Borrowings 332.0 358.3 374.2 377.4 377.1 389.5 404.5 407.7 408.6 410.4 410.5 404.1 73 From banks in the U.S 120.6' 131.9' 135.3' 133.9 131.0 139.6 154.4 157.5 157.2 158.9 158.1 156.9 74 From others 211.3' 226.3' 238.8' 243.4 246.1 249.9 250.1 250.2 251.4 251.5 252.3 247.2 75 Net due to related foreign offices 10.9 8.5 8.6 12.3 11.3 12.4 15.2 13.0 15.1 12.6 12.6 12.8 26 Other liabilities 60.0 66.3 68.2 69.0 70.9 70.5 77.1 79.8 79.1 79.2 79.5 80.7 27 Total liabilities 2,396.5 2,525.6r 2,554.9 2,575.5 2,586.6 2,596.2 2,621.2 2,641.7 2,638.3 2,633.3 2,646.5 2,645.4 28 Residual (assets less liabilities)7 144.2' 150.5' 150.3' 156.5 168.0 167.5 152.8 159.0 160.2 159.8 156.9 158.9 Not seasonally adjusted Assets 79 Bank credit 2,215.0' 2,324.0' 2,350.4' 2,375.0 2,394.0 2,410.1 2,405.3 2,415.8 2,414.6 2,413.8 2,415.8 2,417.3 30 Securities in bank credit 625.7 643.7 649.2 653.4 659.0 666.1 664.1 665.0 667.5 666.3 663.3 662.2 31 U.S. government securities 404.0 434.4 443.0' 447.1 453.1 459.1 456.6 457.8 461.1 458.4 455.7 455.6 37 Other securities 221.6 209.2 206.1 206.3 206.0 207.0 207.5 207.2 206.5 207.9 207.6 206.6 33 Loans and leases in bank credit2 .... 1,589.3' 1,680.3' 1,701.2' 1,721.6 1,735.0 1,744.0 1,741.2 1,750.8 1,747.1 1,747.5 1,752.5 1,755.1 34 Commercial and industrial 300.4 302.2' 303.3' 305.8 306.8 309.0 308.6 310.3 310.0 309.8 310.7 310.5 35 Real estate 914.6 981.6' 995.9' 1,010.0 1,018.7 1,020.6 1,019.9 1,027.8 1,025.0 1,028.2 1,027.0 1,030.2 36 Revolving home equity 60.2 72.9 74.6 75.9 76.6 77.4 78.3 80.1 79.6 79.7 80.4 80.6 37 Other 854.5 908.7' 921.3' 934.1 942.0 943.2 941.6 947.7 945.4 948.5 946.6 949.5 38 Consumer 270.5' 283.7' 288.2' 291.2 293.6 298.3 299.1 299.4 298.3 296.9 302.1 300.9 39 Credit cards and related plans . . 101.4' 109.7' 112.8' 115.3 117.5 122.0 120.2 118.9 116.5 115.5 121.9 121.4 40 Other 169.1 174.1 175.4 175.9 176.0 176.4 178.9 180.5 181.8 181.4 180.2 179.5 41 Security3 7.8 7.9 8.0 8.3 8.6 8.6 8.3 8.6 8.6 8.4 8.5 8.7 47 Other loans and leases 96.0 104.9 105.8 106.4 107.3 107.5 105.3 104.6 105.1 104.2 104.3 104.7 43 Interbank loans 99.8 108.7 111.8 119.2 123.6 123.8 120.6 126.7 126.5 121.4 125.2 130.9 44 Cash assets4 111.5 120.9 126.4 129.6 133.6 135.8 133.7 132.4 132.7 128.2 138.1 131.0 45 Other assets5 141.2 145.2 147.1 145.0 147.9 149.7 149.8 154.6 155.3 157.0 154.0 151.2 46 Total assets6 2,537.2r 2,667.5r 2,704.0r 2,736.8 2,766.9 2,786.9 2,777.0 2,797.0 2,796.7 2,788.0 2,800.5 2,797.6 Liabilities 47 Deposits 1,997.7 2,076.6 2,092.6 2,112.1 2,134.5 2,145.5 2,135.3 2,145.6 2,145.5 2,135.8 2,147.9 2,146.5 48 Transaction 301.6 303.0 303.6 313.3 316.5 326.2 317.5 312.0 307.8 302.7 316.3 320.6 49 Nontransaction 1,696.1 1,773.6 1,789.0 1,798.8 1,817.9 1,819.4 1,817.8 1,833.6 1,837.7 1,833.1 1,831.5 1,825.9 50 Large time 301.7 301.6 302.5 304.9 306.4 308.9 308.3 311.2 310.0 309.7 310.9 313.1 51 Other 1,394.4 1,472.0 1,486.5 1,493.9 1,511.5 1,510.4 1,509.5 1,522.4 1,527.7 1,523.4 1,520.6 1,512.9 57 Borrowings 332.0 358.3 374.2 377.4 377.1 389.5 404.5 407.7 408.6 410.4 410.5 404.1 53 From banks in the U.S 120.6' 131.9' 135.3' 133.9 131.0 139.6 154.4 157.5 157.2 158.9 158.1 156.9 54 From others 211.3' 226.3' 238.8' 243.4 246.1 249.9 250.1 250.2 251.4 251.5 252.3 247.2 55 Net due to related foreign offices 10.9 8.5 8.6 12.3 11.3 12.4 15.2 13.0 15.1 12.6 12.6 12.8 56 Other liabilities 60.0 66.3 68.2 69.0 70.9 70.5 77.1 79.8 79.1 79.2 79.5 80.7 57 Total liabilities 2,400.5 2,509.6 2,543.6 2,570.8 2,593.8 2,618.0 2,632.1 2,646.1 2,648.2 2,638.0 2,650.5 2,644.1 58 Residual (assets less liabilities)7 136.6' 157.9' 160.3' 166.0 173.2 169.0 144.9 150.9 148.4 150.0 150.0 153.5 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Nonfinancial Statistics • May 2003 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities '—Continued E. Foreign-related institutions Billions of dollars Monthly averages Wednesday figures Account 2002 2002 2003 2003 Feb. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Feb. 5 Feb. 12 Feb. 19 Feb. 26 Seasonally adjusted Assets 1 Bank credit 592.2 620.9 618.7 614.3' 621.0' 634.7 624.9 636.8 632.6 633.7 634.4 640.2 2 Securities in bank credit 233.5 250.0 247.5' 245.5' 249.3' 263.9 265.5 276.0 274.4 276.1 274.8 275.6 3 U.S. government securities 69.4 81.8 86.7 88.9' 92.9' 101.0' 101.4' 106.2 105.0 106.0 105.4 107.1 4 Other securities 164.2 168.1 160.8 156.6' 156.3' 162.9' 164.1' 169.8 169.5 170.1 169.4 168.5 5 Loans and leases in bank credit2 .... 358.6 370.9 371.2' 368.8' 371.7' 370.8 359.4 360.8 358.2 357.6 359.6 364.6 6 Commercial and industrial 198.2 189.9 185.4' 181.2' m.(y 178.1' 174.9' 171.4 172.2 171.4 171.7 171.0 7 Real estate 17.4 18.8 19.0 19.5 19.8 19.4 18.7 17.9 17.9 17.9 17.8 18.0 8 Security3 74.9 90.5 94.8 97.1 105.1 110.2 105.4 111.1 107.1 108.3 109.9 115.4 y Other loans and leases 68.1 71.7 72.0 71.0 67.8 63.1 60.3 60.4 61.0 60.0 60.2 60.2 10 Interbank loans 20.2 18.5 21.7 24.9 26.6 31.8 30.9 30.9 29.1 30.8 30.4 32.2 li Cash assets4 42.3 46.5 46.0 45.1' 40.7' 42.5 37.9 35.8 36.1 35.3 35.9 35.9 12 Other assets5 29.5 29.0 28.4' 35.1 38.0 41.2 46.7 47.7 49.8 48.2 46.6 47.2 13 Total assets6 683.8 714.5 714.5 719.0r 725.9 749.8 739.9r 750.8 747.3 747.6 746.8 755.2 Liabilities 14 Deposits 470.3 495.1 486.0 466.4 448.5 424.0 432.0 446.9 450.7 445.1 441.2 449.3 15 Transaction 10.2 10.1 10.1 9.7' 9.5 9.5 9.7 9.7 9.4 9.5 9.6 10.0 16 Nontransaction 460.0 485.0 475.9 456.6 439.1 414.5 422.2 437.1 441.3 435.6 431.6 439.3 17 Borrowings 188.7 213.8 224.1' 233.9 254.6 282.9 277.9 283.3 276.0 279.2 273.6 297.3 18 From banks in the U.S 22.0 21.6 22.7 23.1 25.5 29.9 31.2 31.5 29.8 24.2 31.8 38.2 19 From others 166.7 192.1 201.4' 210.7 229.1 253.0 246.7 251.8 246.2 255.0 241.8 259.1 20 Net due to related foreign offices -60.5 -85.6 -83.7' -72.5' -74.5' -61.1' -71.8' -81.6 -76.4 -74.4 -76.6 -95.3 21 Other liabilities 79.6 96.8 92.7 99.7 99.1 99.9 97.0 98.8 97.2 95.5 103.9 97.2 22 Totalliabilities 678.1 720.0 719.1 121.4' 121.1' 745.8 735.0r 747.4 747.5 745.4 742.0 748.5 23 Residual (assets less liabilities)7 5.7 -5.5 -4.6 -8.4 -1.8 4.0 4.9 3.4 -.1 2.2 4.8 6.7 Not seasonally adjusted Assets 24 Bank credit 596.2 614.7 615.4 614.3' 623.8' 643.8 632.1' 641.8 640.3 640.9 635.9 645.3 25 Securities in bank credit 233.5 250.0 247.5' 245.5' 249.3' 263.9 265.5 276.0 274.4 276.1 274.8 275.6 26 U.S. government securities 69.4 81.8 86.7 88.9' 92.9' 101.0' 101.4' 106.2 105.0 106.0 105.4 107.1 27 Trading account 10.5' 13.0 15.2 18.6 20.2 30.3 31.6 34.4 33.1 33.7 33.5 36.5 28 Investment account 58.9' 68.8 71.5 70.3' 72.8' 70.7' 69.8' 71.8 71.9 72.2 71.8 70.6 29 Other securities 164.2 168.1 160.8 156.6' 156.3' 162.9' 164.1' 169.8 169.5 170.1 169.4 168.5 30 Trading account 101.4 109.8 103.9 100.5 99.3 99.7 98.9 97.9 99.5 97.2 96.5 97.4 31 Investment account 62.7 58.4 56.9 56.2' 57.1' 63.3 65.2' 72.0 70.0 72.9 73.0 71.1 32 Loans and leases in bank credit2 .... 362.6 364.8 367.9 368.8' 374.5' 379.8' 366.6 365.8 365.8 364.8 361.1 369.8 33 Commercial and industrial 199.8 188.3 185.4 181.8' 180.5' 179.6' 175.6 172.8 172.6 173.0 173.3 172.4 34 Real estate 17.4 18.8 19.0 19.5 19.8 19.4 18.7 17.9 17.9 17.9 17.8 18.0 35 Security3 77.3 87.2 91.9 97.2 106.4 116.0 111.2 114.7 113.9 113.8 110.0 119.2 36 Other loans and leases 68.2 70.4 71.6 70.2 67.8 64.8 61.0 60.5 61.4 60.2 59.9 60.1 37 Interbank loans 20.2 18.5 21.7 24.9 26.6 31.8 30.9 30.9 29.1 30.8 30.4 32.2 38 Cash assets4 43.2 45.1 46.1 46.0' 43.1' 45.1 39.9 36.5 37.4 36.4 36.7 36.2 39 Other assets5 30.1 28.6 29.0 34.5 37.8 42.3 47.9 48.6 51.2 49.4 46.8 47.9 40 Total assets6 689.3 706.5 711.7 719.3r 730.9 762.6 750.4r 757.5 757.6 757.1 749.4 761.3 Liabilities 41 Deposits 475.7 480.6 474.0 458.9 452.2' 435.7 441.8 452.0 458.2 451.6 444.2 454.7 42 Transaction 10.4 9.8 10.3 9.9 9.6 10.2 10.0 9.9 9.6 9.6 9.9 10.0 43 Nontransaction 465.3 470.8 463.8' 449.1' 442.5 425.5 431.9 442.1 448.6 442.0 434.3 444.7 44 Borrowings 188.7 213.8 224.1' 233.9 254.6 282.9 277.9 283.3 276.0 279.2 273.6 297.3 45 From banks in the U.S 22.0 21.6 22.7 23.1 25.5 29.9 31.2 31.5 29.8 24.2 31.8 38.2 46 From others 166.7 192.1 201.4' 210.7 229.1 253.0 246.7 251.8 246.2 255.0 241.8 259.1 47 Net due to related foreign offices -57.6 -87.6 -82.7 -73.8' -75.6' -58.9' -69.3 -79.5 -75.7 -72.2 -74.9 -91.9 48 Other liabilities 80.8 95.6 93.3 98.9 98.3 101.4 98.6' 100.3 97.7 97.1 105.2 99.8 49 Totalliabilities 687.6 702.4 708.7r 717.9r 729.5r 761.2 749.0r 756.1 756.2 755.7 748.0 759.9 50 Residual (assets less liabilities)7 1.8' 4.1 3.1 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.4 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A21 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued F. Memo items Billions of dollars Monthly averages Wednesday figures AAAccccccooouuunnnttt 2002 2002 2003 2003 Feb. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Feb. 5 Feb. 12 Feb. 19 Feb. 26 Not seasonally adjusted MEMO Large domestically chartered banks, adjusted for mergers 1 Revaluation gains on off-balance-sheet items8 81.7 112.3 119.1 110.9 117.1 124.4 130.5 143.3 131.7 139.6 142.5 150.3 2 Revaluation losses on off-balancesheet items8 59.7 94.2 100.5 94.2 100.8 105.6 108.8 121.2 110.9 117.9 119.8 127.5 3 Mortgage-backed securities9 296.8 338.5 343.9 355.2 370.4 363.1 368.8 374.8 369.9 368.0 379.1 377.3 4 Pass-through 200.2 253.7 255.0 261.7 274.6 265.6 271.2 276.5 269.9 268.2 282.1 281.4 5 CMO, REMIC, and other 96.7 84.8 88.9 93.5 95.8 97.4 97.6 98.3 99.9 99.8 97.0 95.9 6 Net unrealized gains (losses) on available-for-sale securities10 3.5 9.1 11.5 12.5 11.8 11.0 12.2 12.1 11.6 11.6 11.9 12.4 7 Off-shore credit to U.S. residents11 .... 19.8 19.0 19.0 18.4 18.5 18.7 18.3 18.2 18.2 18.4 18.1 18.4 8 Securitized consumer loans12 132.2' 142.8r 141.9' 144.3' 148.5' 150.1' 149.7' 150.6 150.8 150.5 150.0 151.1 9 Credit cards and related plans 120.7 125.5 125.0 127.5 131.4 133.2 132.2 134.8 134.9 134.6 134.2 135.3 10 Other 11.6r 17.3' 16.9' 16.9' n.(y 16.9' 17.5' 15.8 15.9 15.9 15.8 15.8 11 Securitized business loans12 19.4 17.8 17.8' 17.8' 17.4' 17.2' 16.9' 17.2 17.1 17.3 17.2 17.1 Small domestically chartered commercial banks, adjusted for mergers 12 Mortgage-backed securities9 276.3' 295.1r 300.4' 303.3' 305.3' 307.2' 306.7 312.5 312.4 312.0 312.3 311.0 13 Securitized consumer loans12 207.6 202.1 199.9 198.3 198.7 201.2 205.6 204.5 206.2 206.0 204.1 202.5 14 Credit cards and related plans 200.0 199.0 195.9 189.3 189.8 192.5 197.1 196.0 197.7 197.6 195.6 194.1 15 Other 7.6 3.1 3.9 8.9 8.9 8.7 8.5 8.4 8.5 8.5 8.5 8.4 Foreign-related institutions 16 Revaluation gains on off-balancesheet items8 53.0 65.1 62.5 61.9 63.2 64.0 66.5 66.5 67.8 65.9 65.5 66.6 17 Revaluation losses on off-balancesheet items8 48.0 64.8 61.5 60.2 60.4 60.1 63.0 65.1 65.5 63.6 64.6 65.8 18 Securitized business loans12 13.0 9.1 8.1 7.6 7.3 6.9 5.8 4.8 4.8 4.8 4.9 4.8 NOTE. Tables 1.26, 1.27, and 1.28 have been revised to reflect changes in the Board's H.8 acquiring bank. Balance sheet data for acquired banks are obtained from Call Reports, and a statistical release, "Assets and Liabilities of Commercial Banks in the United States." Table ratio procedure is used to adjust past levels. 1.27, "Assets and Liabilities of Large Weekly Reporting Commercial Banks," and table 1.28, 2. Excludes federal funds sold to, reverse RPs with, and loans made to commercial banks "Large Weekly Reporting U.S. Branches and Agencies of Foreign Banks," are no longer in the United States, all of which are included in "Interbank loans." being published in the Bulletin. Instead, abbreviated balance sheets for both large and small 3. Consists of reverse RPs with brokers and dealers and loans to purchase and carry domestically chartered banks have been included in table 1.26, parts C and D. Data are both securities. merger-adjusted and break-adjusted. In addition, data from large weekly reporting U.S. 4. Includes vault cash, cash items in process of collection, balances due from depository branches and agencies of foreign banks have been replaced by balance sheet estimates of all institutions, and balances due from Federal Reserve Banks. foreign-related institutions and are included in table 1.26, part E. These data are break- 5. Excludes the due-from position with related foreign offices, which is included in "Net adjusted. due to related foreign offices." The not-seasonally-adjusted data for all tables now contain additional balance sheet items, 6. Excludes unearned income, reserves for losses on loans and leases, and reserves for which were available as of October 2, 1996. transfer risk. Loans are reported gross of these items. 1. Covers the following types of institutions in the fifty states and the District of Columbia: 7. This balancing item is not intended as a measure of equity capital for use in capital domestically chartered commercial banks that submit a weekly report of condition (large adequacy analysis. On a seasonally adjusted basis, this item reflects any differences in the domestic); other domestically chartered commercial banks (small domestic); branches and seasonal patterns estimated for total assets and total liabilities. agencies of foreign banks, and Edge Act and agreement corporations (foreign-related institu- 8. Fair value of derivative contracts (interest rate, foreign exchange rate, other commodity tions). Excludes International Banking Facilities. Data are Wednesday values or pro rata and equity contracts) in a gain/loss position, as determined under FASB Interpretation No. 39. averages of Wednesday values. Large domestic banks constitute a universe; data for small 9. Includes mortgage-backed securities issued by U.S. government agencies, U.S. domestic banks and foreign-related institutions are estimates based on weekly samples and on government-sponsored enterprises, and private entities. quarter-end condition reports. Data are adjusted for breaks caused by reclassifications of 10. Difference between fair value and historical cost for securities classified as availableassets and liabilities. for-sale under FASB Statement No. 115. Data are reported net of tax effects. Data shown are The data for large and small domestic banks presented on pp. A17-19 are adjusted to restated to include an estimate of these tax effects. remove the estimated effects of mergers between these two groups. The adjustment for 11. Mainly commercial and industrial loans but also includes an unknown amount of credit mergers changes past levels to make them comparable with current levels. Estimated extended to other than nonfinancial businesses. quantities of balance sheet items acquired in mergers are removed from past data for the bank 12. Total amount outstanding. group that contained the acquired bank and put into past data for the group containing the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Nonfinancial Statistics • May 2003 1.32 COMMERCIAL PAPER OUTSTANDING Millions of dollars, seasonally adjusted, end of period Year ending December 2002 2003 IItteemm 1998 1999 2000 2001 2002 Aug. Sept. Oct. Nov. Dec. Jan. 1 All issuers 1,163,303 1,403,023 1,615,341 1,438,764 1,321,517 1,375,414 1,338,119 1,350,182 1,351,428 1,321,517 1,345,460 Financial companies1 2 Dealer-placed paper, total2 614,142 786,643 973,060 989,364 949,683 863,215 856,037 973,150 982,239 949,683 955,386 3 Directly placed paper, total3 322,030 337,240 298,848 224,553 217,787 343,733 322,729 219,581 211,574 217,787 236,820 4 Nonfinancial companies4 227,132 279,140 343,433 224,847 154,047 168,466 159,353 157,451 157,615 154,047 153,254 1. Institutions engaged primarily in commercial, savings, and mortgage banking; sales, 3. As reported by financial companies that place their paper directly with investors. personal and mortgage financing; factoring, finance leasing, and other business lending; 4. Includes public utilities and firms engaged primarily in such activities as communicainsurance underwriting; and other investment activities. tions, construction, manufacturing, mining, wholesale and retail trade, transportation, and 2. Includes all financial-company paper sold by dealers in the open market. services. 1.33 PRIME RATE CHARGED BY BANKS Short-Term Business Loans1 Percent per year Date of change Rate Period Av r e a r te a ge Av r e a r te a ge Av r e a r t a e ge 2000—Jan. 1 8.50 2000 9.23 2001—Jan. 9.05 2002—Jan. 4.75 Feb. 3 8.75 2001 6.91 Feb. 8.50 Feb. 4.75 Mar. 22 9.00 2002 4.67 Mar. 8.32 Mar. 4.75 May 17 9.50 Apr. 7.80 Apr. 4.75 2000—Jan 8.50 May 7.24 May 4.75 2001—Jan. 4 9.00 Feb 8.73 June 6.98 June 4.75 Feb. 1 8.50 Mar 8.83 July 6.75 July 4.75 Mar. 21 8.00 Apr. 9.00 Aug. 6.67 Aug. 4.75 Apr. 19 7.50 May 9.24 Sept. 6.28 Sept. 4.75 May 16 7.00 June 9.50 Oct. 5.53 Oct. 4.75 June 28 6.75 July 9.50 Nov. 5.10 Nov. 4.35 Aug. 22 6.50 Aug 9.50 Dec. 4.84 Dec. 4.25 Sept. 18 6.00 Sept 9.50 Oct. 3 5.50 Oct 9.50 2003—Jan. 4.25 Nov. 7 5.00 Nov 9.50 Feb. 4.25 Dec. 12 4.75 Dec 9.50 Mar. 4.25 2002—Nov. 7 4.25 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 2003 2003, week ending IItteemm 22000000 22000011 22000022 Nov. Dec. Jan. Feb. Jan. 31 Feb. 7 Feb. 14 Feb. 21 Feb. 28 MONEY MARKET INSTRUMENTS 1 Federal fundsl 2-3 6.24 3.88 1.67 1.34 1.24 1.24 1.26 1.24 1.29 1.22 1.30 1.24 2 Discount window primary credit2'4 n.a. n.a. n.a. n.a. n.a. n.a. 2.25 2.25 2.25 2.25 2.25 2.25 Commercial paper3-5-6 Nonfinancial 3 1-month 6.27 3.78 1.67 1.34 1.31 1.25 1.24 1.24 1.23 1.24 1.25 1.25 4 2-month 6.29 3.68 1.67 1.35 1.32 1.26 1.25 1.24 1.26 1.23 1.25 1.25 5 3-month 6.31 3.65 1.69 1.36 1.31 1.26 1.26 1.24 1.24 1.26 1.27 1.25 Financial 6 1-month 6.28 3.80 1.68 1.34 1.31 1.26 1.25 1.25 1.25 1.24 1.25 1.25 7 2-month 6.30 3.71 1.69 1.37 1.32 1.27 1.25 1.25 1.25 1.26 1.24 1.25 8 3-month 6.33 3.65 1.70 1.37 1.32 1.27 1.25 1.25 1.25 1.25 1.25 1.25 Certificates of deposit, secondary market3,7 9 1-month 6.35 3.84 1.72 1.39 1.37 1.29 1.27 1.27 1.27 1.27 1.27 1.27 10 3-month 6.46 3.71 1.73 1.39 1.34 1.29 1.27 1.27 1.27 1.26 1.27 1.27 11 6-month 6.59 3.66 1.81 1.40 1.36 1.30 1.27 1.27 1.27 1.26 1.27 1.27 12 Eurodollar deposits, 3-month3'8 6.45 3.70 1.73 1.39 1.35 1.29 1.26 1.26 1.26 1.26 1.27 1.26 U.S. Treasury bills Secondary market3'5 13 4-week n.a. 2.43 1.60 1.24 1.18 1.15 1.18 1.15 1.15 1.16 1.17 1.21 14 3-month 5.82 3.40 1.61 1.23 1.19 1.17 1.17 1.16 1.15 1.16 1.17 1.19 15 6-month 5.90 3.34 1.68 1.27 1.24 1.20 1.18 1.17 1.17 1.17 1.18 1.18 U.S. TREASURY NOTES AND BONDS Constant maturities9 16 1-year 6.11 3.49 2.00 1.49 1.45 1.36 1.30 1.32 1.32 1.30 1.30 1.27 17 2-year 6.26 3.83 2.64 1.92 1.84 1.74 1.63 1.72 1.69 1.63 1.62 1.57 18 3-year 6.22 4.09 3.10 2.32 2.23 2.18 2.05 2.16 2.14 2.06 2.04 1.96 19 5-year 6.16 4.56 3.82 3.05 3.03 3.05 2.90 3.01 3.02 2.94 2.87 2.76 20 7-year 6.20 4.88 4.30 3.64 3.63 3.60 3.45 3.56 3.55 3.50 3.42 3.31 21 10-year 6.03 5.02 4.61 4.05 4.03 4.05 3.90 4.01 3.98 3.95 3.89 3.78 22 20-year 6.23 5.63 5.43 5.04 5.01 5.02 4.87 4.96 4.92 4.91 4.88 4.78 Treasury long-term average10-1' 23 25 years and above n.a. n.a. 5.41 5.10 5.06 5.07 4.93 5.00 4.95 4.97 4.95 4.86 STATE AND LOCAL NOTES AND BONDS Moody's series12 24 Aaa 5.58 5.01 4.87 4.77 4.70 4.72 4.57 4.72 4.68 4.59 4.52 4.48 25 Baa 6.19 5.75 5.64 5.62 5.57 5.61 5.48 5.59 5.58 5.50 5.44 5.38 26 Bond Buyer series" 5.71 5.15 5.04 4.95 4.85 4.90 4.81 4.90 4.88 4.83 4.79 4.74 CORPORATE BONDS 27 Seasoned issues, all industries14 7.98 7.49 7.10 6.88 6.77 6.72 6.50 6.63 6.53 6.52 6.50 6.43 Rating group 28 Aaa15 7.62 7.08 6.49 6.31 6.21 6.17 5.95 6.09 5.99 5.97 5.96 5.89 29 Aa 7.83 7.26 6.93 6.71 6.63 6.59 6.34 6.48 6.37 6.37 6.35 6.28 30 A 8.11 7.67 7.18 6.89 6.80 6.77 6.63 6.73 6.65 6.66 6.65 6.57 31 Baa 8.37 7.95 7.80 7.62 7.45 7.35 7.06 7.21 7.10 7.09 7.06 6.97 MEMO Dividend-price ratio16 32 Common stocks 1.15 1.32 1.61 1.73 1.77 1.81 1.91 1.86 1.93 1.93 1.89 1.89 NOTE. Some of the data in this table also appear in the Board's H.15 (519) weekly 8. Bid rates for eurodollar deposits collected around 9:30 a.m. Eastern time. Data are for statistical release. For ordering address, see inside front cover. indication purposes only. 1. The daily effective federal funds rate is a weighted average of rates on trades through 9. Yields on actively traded issues adjusted to constant maturities. New York brokers. 10. Based on the unweighted average of the bid yields for all Treasury fixed-coupon 2. Weekly figures are averages of seven calendar days, ending on Wednesday of the securities with remaining terms to maturity of 25 years and over. current week; monthly figures include each calendar day in the month. 11. A factor for adjusting the daily long-term average in order to estimate a 30-year rate 3. Annualized using a 360-day year or bank interest. can be found at http://www.treas.gov/offices/domestic-finance/debt-management/interest-rate/ 4. The rate charged for primary credit under an amendment to the Board's Regulation A, ltcompositeindex.html. which became effective January 9, 2003. This rate replaces that for adjustment credit, which 12. General obligation bonds based on Thursday figures; Moody's Investors Service. was discontinued after January 8, 2003. For further information, see: http:// 13. State and local government general obligation bonds maturing in twenty years are used www.federalreserve.gov/boarddocs/press/bcreg/2002/200210312/default.htm. The rate is that in compiling this index. The twenty-bond index has a rating roughly equivalent to Moody's reported for the Federal Reserve Bank of New York. Historical series for the rate on A1 rating. Based on Thursday figures. adjustment credit is available at: http://www.federalreserve.gov/releases.gov/releases/hl5/ 14. Daily figures are averages of Aaa, Aa, A, and Baa yields from Moody's Investors data.htm. Service. Based on yields to maturity on selected long-term bonds. 5. Quoted on a discount basis. 15. Effective December 7, 2001, the Moody's Aaa yield includes yields only for industrial 6. Interest rates interpolated from data on certain commercial paper trades settled by the firms. Prior to December 7, 2001, the Aaa yield represented both utilities and industrial. Depository Trust Company. The trades represent sales of commercial paper by dealers or 16. Standard & Poor's corporate series. Common stock ratio is based on the 500 stocks in direct issuers to investors (that is, the offer side). See the Board's Commercial Paper web the price index. pages (http://www.federalreserve.gov/releases/cp) for more information. SOURCE: U.S. Department of the Treasury. 7. An average of dealer offering rates on nationally traded certificates of deposit. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic NonfinancialS tatistics • May 2003 1.36 STOCK MARKET Selected Statistics 2002 2003 IInnddiiccaattoorr 22000000 22000011 22000022 June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Prices and trading volume (averages of daily figures) CCCCCCCooooooommmmmmmmmmmmmmooooooonnnnnnn ssssssstttttttoooooooccccccckkkkkkk ppppppprrrrrrriiiiiiiccccccceeeeeeesssssss (((((((iiiiiiinnnnnnndddddddeeeeeeexxxxxxxeeeeeeesssssss))))))) 1111111 NNNNNNNeeeeeeewwwwwww YYYYYYYooooooorrrrrrrkkkkkkk SSSSSSStttttttoooooooccccccckkkkkkk EEEEEEExxxxxxxccccccchhhhhhhaaaaaaannnnnnngggggggeeeeeee (((((((DDDDDDDeeeeeeeccccccc....... 33333331111111,,,,,,, 1111111999999966666665555555 ======= 55555550000000))))))) 6,806.46 6,407.95 5,571.46 5,755.89 5,139.94 5,200.62 4,980.65 4,862.70 5,104.89 5,075.76 5,055.78 4,738.56 2222222 IIIIIIInnnnnnnddddddduuuuuuussssssstttttttrrrrrrriiiiiiiaaaaaaalllllll 809.40 749.46 656.44 677.58 603.04 611.34 589.14 574.45 597.75 593.15 587.78 553.90 3333333 TTTTTTTrrrrrrraaaaaaannnnnnnssssssspppppppooooooorrrrrrrtttttttaaaaaaatttttttiiiiiiiooooooonnnnnnn 414.73 444.45 430.63 449.42 416.07 409.96 388.19 383.41 405.03 401.39 394.60 367.55 4444444 UUUUUUUtttttttiiiiiiillllllliiiiiiitttttttyyyyyyy 478.99 377.72 260.50 265.21 230.21 225.52 210.76 207.83 229.41 236.71 236.42 214.64 5555555 FFFFFFFiiiiiiinnnnnnnaaaaaaannnnnnnccccccceeeeeee 552.48 596.61 554.88 577.05 524.01 533.60 506.05 494.06 523.50 519.72 522.51 485.72 6666666 SSSSSSStttttttaaaaaaannnnnnndddddddaaaaaaarrrrrrrddddddd &&&&&&& PPPPPPPoooooooooooooorrrrrrr'''''''sssssss CCCCCCCooooooorrrrrrrpppppppooooooorrrrrrraaaaaaatttttttiiiiiiiooooooonnnnnnn (((((((1111111999999944444441111111^^^^^^^3333333------- 11111110000000)))))))''''''' 1,427.22 1,194.18 993.94 1,014.05 903.59 912.55 867.81 854.63 909.93 899.18 895.84 837.62 7777777 AAAAAAAmmmmmmmeeeeeeerrrrrrriiiiiiicccccccaaaaaaannnnnnn SSSSSSStttttttoooooooccccccckkkkkkk EEEEEEExxxxxxxccccccchhhhhhhaaaaaaannnnnnngggggggeeeeeee (((((((AAAAAAAuuuuuuuggggggg....... 33333331111111,,,,,,, 1111111999999977777773333333 ------- 55555550000000)))))))2222222 922.22 879.08 860.11 911.59 840.76 843.89 852.03 807.38 820.62 823.77 824.64 818.84 VVVVVVVooooooollllllluuuuuuummmmmmmeeeeeee ooooooofffffff tttttttrrrrrrraaaaaaadddddddiiiiiiinnnnnnnggggggg (((((((ttttttthhhhhhhooooooouuuuuuusssssssaaaaaaannnnnnndddddddsssssss ooooooofffffff ssssssshhhhhhhaaaaaaarrrrrrreeeeeeesssssss))))))) 8888888 NNNNNNNeeeeeeewwwwwww YYYYYYYooooooorrrrrrrkkkkkkk SSSSSSStttttttoooooooccccccckkkkkkk EEEEEEExxxxxxxccccccchhhhhhhaaaaaaannnnnnngggggggeeeeeee 1,026,867 1,216,529 1,411,689 1,539,282 1,848,962 1,317,105 1,370,143 1,619,896 1,427,254 1,210,332 1,441,846 1,302,011 9999999 AAAAAAAmmmmmmmeeeeeeerrrrrrriiiiiiicccccccaaaaaaannnnnnn SSSSSSStttttttoooooooccccccckkkkkkk EEEEEEExxxxxxxccccccchhhhhhhaaaaaaannnnnnngggggggeeeeeee 51,437 68,074 n.a. n.a. n.a. n.a. 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 198,790 150,450 134,380 146,270 136,160 132,800 130,210 130,570 133,060 134,380 134,910 134,030 FFFFFFFrrrrrrreeeeeeeeeeeeee cccccccrrrrrrreeeeeeedddddddiiiiiiittttttt bbbbbbbaaaaaaalllllllaaaaaaannnnnnnccccccceeeeeeesssssss aaaaaaattttttt bbbbbbbrrrrrrroooooookkkkkkkeeeeeeerrrrrrrsssssss4444444 11111111111111 MMMMMMMaaaaaaarrrrrrrgggggggiiiiiiinnnnnnn aaaaaaaccccccccccccccooooooouuuuuuunnnnnnntttttttsssssss5555555 100,680 101,640 95,690 95,830 98,080 95,400 98,630 96,620 91,240 95,690 96,430 95,400 11111112222222 CCCCCCCaaaaaaassssssshhhhhhh aaaaaaaccccccccccccccooooooouuuuuuunnnnnnntttttttsssssss 84,400 78,040 73,340 68,280 68,860 63,700 67,550 66,780 67,380 73,340 66,200 67,260 Margin requirements (percent of market value and effective date)6 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 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 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 1 Federal debt outstanding 5,803.5 5,800.6 5,753.9 5,834.5 5,970.3 6,032.4 6,153.3 6,255.4 6,433.0 2 Public debt securities 5,662.2 5,773.7 5,726.8 5,807.5 5,943.4 6,006.0 6,126.5 6,228.2 6,405.7 3 Held by public 3,527.4 3,434.4 3,274.2 3,338.7 3,393.8 3,443.7 3,463.5 3,552.6 3,647.4 4 Held by agencies 2,248.7 2,339.4 2,452.6 2,468.8 2,549.7 2,562.4 2,662.9 2,675.6 2,758.3 5 Agency securities 27.4 26.8 27.1 27.0 26.8 26.4 26.8 27.2 27.3 6 Held by public 27.3 26.8 27.1 27.0 26.8 26.4 26.8 27.2 27.3 7 Held by agencies .1 .1 .0 .0 .0 .0 .0 .0 .0 8 Debt subject to statutory limit 5,580.5 5,692.5 5,645.0 5,732.6 5,871.4 5,935.1 6,058.3 6,161.4 6,359.4 9 Public debt securities 5,580.2 5,692.3 5,644.8 5,732.4 5,871.2 5,935.0 6,058.1 6,161.1 6,359.1 10 Other debt1 .2 .2 .2 .2 .3 .2 .2 .3 .3 MEMO 11 Statutory debt limit 5,950.0 5,950.0 5,950.0 5,950.0 5,950.0 5,950.0 6,400.0 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 U.S. TREASURY Types and Ownership Billions of dollars, end of period 2002 TTyyppee aanndd hhoollddeerr 11999999 22000000 22000011 22000022 Ql Q2 Q3 Q4 1 Total gross public debt 5,776.1 5,662.2 5,943.4 6,405.7 6,006.0 6,126.5 6,228.2 6,405.7 By type 2 Interest-bearing 5,766.1 5,618.1 5,930.8 6,391.4 5,962.2 6,087.0 6,216.3 6,391.4 3 Marketable 3,281.0 2,966.9 2,982.9 3,205.1 3,003.3 3,024.8 3,136.6 3,205.1 4 Bills 737.1 646.9 811.3 888.8 834.4 822.5 868.3 888.8 5 Notes 1,784.5 1,557.3 1,413.9 1,580.8 1,411.7 1,446.9 1,521.5 1,580.8 6 Bonds 643.7 626.5 602.7 588.7 596.7 592.9 592.9 588.7 7 Inflation-indexed notes and bonds' 100.7 121.2 140.1 146.9 145.6 147.5 138.9 146.9 8 Nonmarketable2 2,485.1 2,651.2 2,947.9 3,186.3 2,958.9 3,062.2 3,079.6 3,186.3 9 State and local government series 165.7 151.0 146.3 153.4 141.1 142.8 144.3 153.4 10 Foreign issues3 31.3 27.2 15.4 11.2 14.6 13.3 12.5 11.2 11 Government 31.3 27.2 15.4 11.2 14.6 13.3 12.5 11.2 12 Public .0 .0 .0 .0 .0 .0 .0 .0 1.3 Savings bonds and notes 179.4 176.9 181.5 184.8 183.6 184.8 185.6 184.8 14 Government account series4 2,078.7 2,266.1 2,574.8 2,806.9 2,589.7 2,691.4 2,707.3 2,806.9 15 Non-interest-bearing 10.0 44.2 12.7 14.3 43.8 39.5 12.0 14.3 By holder5 16 U.S. Treasury and other federal agencies and trust funds 2,064.2 2,270.1 2,572.2 2,757.8 2,581.4 2,686.0 2,701.3 2,757.8 17 Federal Reserve Banks6 478.0 511.7 551.7 629.4 575.4 590.7 604.2 629.4 18 Private investors 3,233.9 2,880.4 2,819.5 3,018.5 2,849.2 2,849.8 2,924.8 3,018.5 19 Depository institutions 248.7 201.5 181.5 223.2 187.6 204.4 210.4 223.2 20 Mutual funds 228.6 220.8 257.5 278.1 264.9 250.0 253.6 278.1 21 Insurance companies 123.4 110.2 105.7 117.4 108.4 110.3 116.0 117.4 22 State and local treasuries7 266.8 236.2 256.5 274.2 261.2 271.7 269.4 274.2 Individuals 23 Savings bonds 186.4 184.8 190.3 194.9 191.9 192.7 193.3 194.9 24 Pension funds 321.0 304.1 281.6 284.2 293.3 286.0 284.9 284.2 25 Private 109.8 108.4 104.2 111.4 106.3 108.8 110.9 111.4 26 State and Local 211.2 195.7 177.4 172.8 187.0 177.2 174.1 172.8 27 Foreign and international8 1,268.7 1,034.2 1,053.1 1,174.2 1,056.5 1,068.1 1,128.6 1,174.2 28 Other miscellaneous investors7-9 590.3 588.7 493.3 n.a. 485.4 466.5 471.1 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 NonfinancialS tatistics • May 2003 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1 Millions of dollars, daily averages 2002 2003 2003, week ending Nov. Dec. Jan. Jan. 1 Jan. 8 Jan. 15 Jan. 22 Jan. 29 Feb. 5 Feb. 12 Feb. 19 Feb. 26 By type of security 1 U.S. Treasury bills 48,070 44,252 39,484 44,452 40,845 37,031 40,224 38,052 44,310 37,510 38,707 44,677 Treasury coupon securities by maturity 2 Three years or less 141,467 98,091 122,814 50,663 116,047 139,902 108,177 124,329 122,494 114,312 95,291 126,063 3 More than three but less than or equal to six years 118,430 78,534 119,127 36,370 141,958 132,622 104,298 98,307 110,023 128,243 97,747 104,503 4 More than six but less than or equal to eleven years 98,012 61,252 75,346 28,264 69,120 88,242 70,103 73,479 73,820 88,227 90,878 83,004 5 More than eleven 20,833 15,748 16,002 10,331 14,469 16,369 16,861 16,642 15,594 22,002 17,694 23,597 6 Inflation-indexed2 2,603 2,380 3,969 1,532 7,402 3,292 2,746 2,451 3,316 3,248 2,185 3,477 Federal agency and governmentsponsored enterprises 7 Discount notes 51,785 54,947 56,755 57,667 62,335 54,697 58,095 51,741 57,810 54,206 61,150 51,402 Coupon securities by maturity 8 Three years or less 12,727 8,787 12,752 5,492 12,515 13,891 10,728 11,844 16,818 1100,,333366 88,,779911 1100,,665577 9 More than three years but less than or equal to six years 8,893 6,270 10,444 2,588 11,226 9,346 11,343 9,738 11,206 11,438 7,708 1100,,225599 10 More than six years but less than or equal to eleven years .... 7,383 5,976 6,839 2,243 5,839 8,773 6,408 6,852 5,337 4,550 7,782 5,445 11 More than eleven years 1,219 897 988 813 821 1,527 694 941 761 585 2,009 936 12 Mortgage-backed 194,006 153,693 201,113' 77,533 276,025 241,250 135,934 152,512 165,350 254,910 181,176 177,764 Corporate securities 13 One year or less 111,148 101,904 109,068' 83,300 105,664 112,043 118,518 103,376 105,468 104,604 118,895 115,302 14 More than one year 22,421 15,482 22,404 4,126 18,492 24,116 19,841 26,287 23,318 24,000 18,873 20,942 By type of counterparty With interdealer broker 15 U.S. Treasury 205,144 137,745 170,999 70,851 171,563 182,096 158,681 164,015 183,940 189,323 115566,,667722 117700,,663366 16 Federal agency and governmentsponsored enterprises 10,018 7,381 10,127 4,273 9,649 10,618 10,771 10,233 8,541 8,885 7,844 7,883 17 Mortgage-backed 49,075 36,156 54,576' 16,842 69,875 58,790 35,992 50,663 52,743 75,820 54,089 52,611 18 Corporate 431 433 616 64 543 677 524 661 714 553 368 466 With other 19 U.S. Treasury 224,271 162,512 205,741 100,760 218,277 235,361 183,729 189,245 185,617 204,218 185,828 214,685 20 Federal agency and governmentsponsored enterprises 71,989 69,496 77,652 64,530 83,086 77,615 76,497 70,884 83,390 72,229 79,595 70,814 21 Mortgage-backed 144,931 117,537 146,537' 60,692 206,150 182,460 99,943 101,849 112,607 179,089 127,088 125,153 22 Corporate 133,138 116,953 130,855' 87,362 123,613 135,481 137,835 129,002 128,072 128,051 137,400 135,779 NOTE. Major changes in the report form filed by primary dealers induced a break in the backed, and corporate securities scheduled for immediate and forward delivery, as well as all dealer data series as of the week ending July 4, 2001. Current weekly data may be found at the U.S. government securities traded on a when-issued basis between the announcement and Federal Reserve Bank of New York web site (http:www.newyorkfed.org/pihome/statistics) issue date. Data do not include transactions under repurchase and reverse repurchase (resale) under the Primary Dealer heading. agreements. Averages are based on the number of trading days in the week. 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. 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 2003 2003, week ending item, by type ot security Nov. Dec. Jan. Jan. 1 Jan. 8 Jan. 15 Jan. 22 Jan. 29 Feb. 5 Feb. 12 Feb. 19 Net outright positions2 1 U.S. Treasury bills 21,827 27,911 23,749 22,849 30,612 27,776 20,672 15,946 24,171 31,778 40,149 Treasury coupon securities by maturity 2 Three years or less -25,283 -22,860 -19,950 -26,020 -24,014 -25,729 -20,489 -9,703 -16,436 -18,025 -15,372 3 More than three years but less than or equal to six years -30,766 -33,784 -33,546 -32,883 -25,657 -31,449 -38,417 -38,614 -34,042 -27,510 -29,391 4 More than six but less than or equal to eleven years -15,248 -19,587 -18,697 -19,408 -18,584 -18,828 -17,603 -19,813 -18,197 -13,268 -13,100 5 More than eleven 1,106 1,813 4.522 3,706 4,264 4,833 5,075 4,250 3,759 3,220 5,155 6 Inflation-indexed 1,402 4,312 1,268 3,195 708 740 1,387 2,028 1,038 2,222 2,071 Federal agency and governmentsponsored enterprises 7 Discount notes 51,259 51,664 55,562 41,205 53,082 58,959 48,878 61,236 63,066 57,514 5544,,557733 Coupon securities, by maturity 8 Three years or less 16,344 18,834 15,969 19,754 18,118 13,441 16,572 15,243 15,827 19,734 16,576 9 More than three years but less than or equal to six years -407 587 4,501 100 3,059 4,289 4,879 5,459 7,812 9,268 6,025 10 More than six but less than or equal to eleven years 1,556 2,333 1,521 2,197 1,410 2,399 1,155 1,107 1,236 207 822 11 More than eleven 2,994 2,757 2,200 2,453 2,571 2,239 2,043 1,982 1,958 2,095 2,203 12 Mortgage-backed 8,176 12,650 23,387 20,316 12,043 20,425 25,035 33,740 32,996 28,681 21,290 Corporate securities 13 One year or less 21,645 25,588 25,810 22,714 23,602 25,656 26,446 26,498 30,987 25,718 30,300 14 More than one year 50,912 55,865 53,119 59,712 54,642 54,930 52,358 50,787 48,978 48,276 53,681 Financing3 Securities in, U.S. Treasury 15 Overnight and continuing 614,961 605,390 629,534 628,260 632,534 642,916 623,757 618,617 631,268 641,428 673,773 16 Term 937,618 918,379 716,731 606,042 670,679 702,996 722,327 770,564 773,324 798,446 622,685 Federal agency and governmentsponsored enterprises 17 Overnight and continuing 145,420 143,451 153,105 156,702 159,469 147,538 149,462 154,502 156,371 159,292 162,395 18 Term 315,176 294,633 228,176 211,024 227,203 224,307 230,440 232,573 230,380 231,468 216,628 Mortgage-backed securities 19 Overnight and continuing 48,995 35,872 37,003 42,826 47,571 35,239 36,140 29,138 33,821 37,946 51,364 20 Term 277,966 274,185 250,974 227,205 253,088 251,774 247,109 257,452 243,508 248,270 242,632 Corporate securities 21 Overnight and continuing 49,184 49,163 58,162 55,493 57,743 57,928 58,051 58,759 60,079 60,680 61,367 22 Term 26,247 24,654 24,045 24,697 23,962 23,881 24,357 23,645 24,887 24,964 24,702 MEMO Reverse repurchase agreements 23 Overnight and continuing 456,710 440,006 425,659 478,500 446,333 423,856 408,808 415,652 427,199 446,710 492,350 24 Term 1,404,106 1,352,627 1,058,223 896,060 1,016,245 1,043,024 1,063,055 1,119,107 1,109,413 1,140,885 943,789 Securities out, U.S. Treasury 25 Overnight and continuing 573,787 585,423 586,166 617,379 579,704 597,525 582,890 582,617 577,312 593,721 633,936 26 Term 875,065 842,700 656,962 523,487 621,245 647,239 659,977 702,113 714,152 742,013 564,162 Federal agency and governmentsponsored enterprises 27 Overnight and continuing 276,128 271,376 293,172 266,398 297,118 283,500 281,190 308,888 313,538 310,052 330011,,773366 28 Term 245,811 232,535 153,444 147,595 156,350 152,494 154,818 150,466 155,138 160,989 149,215 Mortgage-backed securities 29 Overnight and continuing 316,240 300,834 334,095 291,863 286,744 329,449 363,297 367,868 316,794 307,924 363,780 30 Term 170,818 170,735 153,932 140,737 166,052 154,005 150,152 149,285 147,341 152,537 146,900 Corporate securities 31 Overnight and continuing 133,692 135,776 135,890 133,477 137,182 136,059 133,222 135,480 142,755 137,209 143,942 32 Term 20,946 17,694 19,581 16,264 17,394 19,070 21,393 20,537 21,002 22,395 22,240 MEMO Repurchase agreements 33 Overnight and continuing 1,139,287 1,127,804 1,159,110 1,124,399 1,119,989 1,154,848 1,166,601 1,200,763 1,156,305 1,149,294 1,238,659 34 Term 1,279,914 1,233,261 951,521 799,181 931,963 940,780 953,180 986,973 1,003,848 1,043,656 846,904 NOTE. Major changes in the report form filed by primary dealers included a break in many 2. Net outright positions include all U.S. government, federal agency, governmentseries as of the week ending July 4, 2001. Current weekly data may be found at the Federal sponsored enterprise, mortgage-backed, and corporate securities scheduled for immediate and Reserve Bank of New York web site (http://www.newyorkfed.org/pihome/statistics) under the forward delivery, as well as U.S. government securities traded on a when-issued basis Primary Dealer heading. between the announcement and issue date. 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). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Nonfinancial Statistics • May 2003 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 2002 AAggeennccyy 11999999 22000000 22000011 22000022 Aug. Sept. Oct. Nov. Dec. 1 Federal and federally sponsored agencies 1,616,492 1,851,632 2,121,057 n.a. 2,226,713 2,269,256 2,289,622 2,305,945 n.a. 2 Federal agencies 26,376 25,666 276 n.a. 164 304 318 342 n.a. 3 Defense Department1 6 6 6 n.a. 6 6 6 6 n.a. 4 Export-Import Bank2-3 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5 Federal Housing Administration4 126 255 26,828 n.a. 26,274 27,170 26,725 26,863 n.a. 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 26,370 25,660 270 n.a. 158 298 312 336 n.a. 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 1,590,116 1,825,966 2,120,781 2,351,037 2,226,549 2,268,952 2,289,304 2,305,607 2,351,037 11 Federal Home Loan Banks 529,005 594,404 623,740 674,841 659,258 668,703 679,209 674,847 674,841 12 Federal Home Loan Mortgage Corporation 360,711 426,899 565,071 648,894 603,135 623,267 625,328 643,201 648,894 13 Federal National Mortgage Association 547,619 642,700 763,500 851,000 789,900 800,300 804,800 811,700 851,000 14 Farm Credit Banks8 68,883 74,181 76,673 85,088 81,658 82,741 83,145 83,884 85,088 15 Student Loan Marketing Association9 41,988 45,375 48,350 47,900 49,500 50,800 54,200 48,700 47,900 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 42,152 40,575 39,096 n.a. 42,825 39,604 37,084 37,418 n.a. Lending to federal and federally sponsored agencies 20 Export-Import Bank3 n.a. 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 6,665 5,275 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 26 Rural Electrification Administration 14,085 13,126 13,876 n.a. 13,599 14,029 14,058 14,209 n.a. 27 Other 21,402 22,174 25,220 n.a. 29,226 25,575 23,026 23,209 n.a. 1. Consists of mortgages assumed by the Defense Department between 1957 and 1963 10. The Financing Corporation, established in August 1987 to recapitalize the Federal under family housing and homeowners assistance programs. Savings and Loan Insurance Corporation, undertook its first borrowing in October 1987. 2. Includes participation certificates reclassified as debt beginning Oct. 1, 1976. 11. The Farm Credit Financial Assistance Corporation, established in January 1988 to 3. On-budget since Sept. 30, 1976. provide assistance to the Farm Credit System, undertook its first borrowing in July 1988. 4. Consists of debentures issued in payment of Federal Housing Administration insurance 12. The Resolution Funding Corporation, established by the Financial Institutions claims. Once issued, these securities may be sold privately on the securities market. Reform, Recovery, and Enforcement Act of 1989, undertook its first borrowing in October 5. Certificates of participation issued before fiscal year 1969 by the Government National 1989. Mortgage Association acting as trustee for the Farmers Home Administration; the Department 13. The FFB, which began operations in 1974, is authorized to purchase or sell obligations of Health, Education, and Welfare; the Department of Housing and Urban Development; the issued, sold, or guaranteed by other federal agencies. Because FFB incurs debt solely for the Small Business Administration; and the Veterans Administration. purpose of lending to other agencies, its debt is not included in the main portion of the table to 6. Off-budget. avoid double counting. 7. Includes outstanding noncontingent liabilities: notes, bonds, and debentures. Includes 14. Includes FFB purchases of agency assets and guaranteed loans; the latter are loans Federal Agriculture Mortgage Corporation; therefore, details do not sum to total. Some data guaranteed by numerous agencies, with the amounts guaranteed by any one agency generally are estimated. being small. The Farmers Home Administration entry consists exclusively of agency assets, 8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, which is whereas the Rural Electrification Administration entry consists of both agency assets and shown on line 17. guaranteed loans. 9. Before late 1982, the association obtained financing through the Federal Financing Bank (FFB). Borrowing excludes that obtained from the FFB, which is shown on line 22. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets and Corporate Finance A29 1.45 NEW SECURITY ISSUES State and Local Governments Millions of dollars 2002 2003 TTyyppee ooff ii oo ss rr ss uu uu ee ss ee oo rr iissssuueerr,, 22000000 22000011 22000022 July Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 All issues, new and refunding1 180,403 291,937 364,030 28,113 31,691 27,422 44,574 37,188 27,549 26,731 29,928 By type of issue 2 General obligation 64,475 118,554 145,323 12,352 13,187 9,628 18,595 11,023 8,431 8,112 12,723 3 Revenue 115,928 170,047 214,788 15,642 18,692 17,751 24,074 24,942 18,961 17,049 17,206 By type of issuer 4 State 19,944 30,099 33,931 3,404 3,472 2,442 4,199 2,109 1,670 1,927 3,404 5 Special district or statutory authority2 121,185 197,462 259,070 18,229 23,104 19,171 31,793 28,296 20,151 17,979 20,892 6 Municipality, county, or township 39,273 61,040 67,121 6,361 5,302 5,767 6,678 5,570 5,570 5,290 5,632 7 Issues for new capital 154,257 200,322 243,431 19,872 20,632 15,140 30,230 26,563 19,888 18,645 20,196 By use of proceeds 8 Education 38,665 50,054 57,894 4,205 3,968 3,529 5,209 3,743 5,292 4,823 5,908 9 Transportation 19,730 21,411 22,093 3,251 4,413 1,398 1,476 1,250 1,060 1,417 1,618 10 Utilities and conservation 11,917 21,917 33,404 1,660 2,806 2,038 6,922 8,379 2,031 2,196 173 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 7,122 6,607 7,227 760 283 574 1,225 821 796 422 1,022 13 Other purposes 47,309 55,733 73,033 5,893 6,537 5,597 6,996 7,189 4,992 7,400 8,340 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 2003 TTyyppee ooff iissssuuee,, ooffffeerriinngg,, 22000000 22000011 22000022 oorr iissssuueerr June July Aug. Sept. Oct. Nov. Dec. Jan. 1 All issues1 1,079,727 1,541,821 1,429,298 149,753 68,426 97,665 135,176 93,439 119,659 127,061 123,736 2 Bonds2 944,810 1,413,267 1,318,863 133,217 63,912 93,659 127,881 85,606 109,726 120,183 116,609 By type of offering 3 Sold in the United States 822,012 1,356,879 1,232,618 121,491 60,549 90,215 123,449 81,409 104,112 114,332 110,383 4 Sold abroad 122,798 56,389 86,246 11,725 3,362 3,444 4,432 4,197 5,614 5,851 6,226 MEMO 5 Private placements, domestic 18,370 8,734 n.a. 3,068 0 0 65 0 3,525 5,060r 4,700 By industry group 6 Nonfinancial 258,804 459,560 282,484 27,693 7,624 14,960 19,988 14,906 22,029 20,751 28,461 7 Financial 686,006 953,707 1,036,379 105,524 56,288 78,699 107,893 70,700 87,697 99,433 88,148 8 Stocks3 311,941 230,632 170,673 16,536 4,514 4,006 7,295 7,833 9,933 6,878 7,127 By type of offering 9 Public 134,917 128,554 110,435 16,536 4,514 4,006 7,295 7,833 9,933 6,878 7,127 10 Private placement4 177,024 102,078 60,238 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By industry group 11 Nonfinancial 118,369 77,577 62,115 11,608 1,833 539 2,754 3,731 4,533 4,154 3,793 12 Financial 16,548 50,977 48,320 4,928 2,681 3,467 4,541 4,102 5,400 2,724 3,334 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 olferings, 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 NonfinancialS tatistics • May 2003 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets1 Millions of dollars 2002 2003 IItteemm 22000011 22000022 July Aug. Sept. Oct. Nov. Dec. Jan.r Feb. 1 Sales of own shares2 1,806,474 1,826,045 170,946 151,136 125,408 164,959 137,914 134,383 152,647 121,632 2 Redemptions of own shares 1,677,266 1,702,671 200,148 136,210 126,760 167,039 122,125 135,213 138,951 113,018 3 Net sales3 129,208 123,374 -29,202 14,926 -1,352 -2,080 15,789 -830 13,696 8,614 4 Assets4 4,689,624 4,119,322 4,124,186 4,170,641 3,899,858 4,059,765 4,249,351 4,119,322 4,060,568 4,032,773 5 Cash5 219,620 208,479 199,586 220,425 199,778 204,019 219,213 208,479 212,792 200,060 6 Other 4,470,004 3,910,843 3,924,600 3,950,216 3,700,080 3,855,746 4,030,138 3,910,843 3,847,776 3,832,713 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 22000000 22000011 22000022 Q2 Q3 Q4 Ql Q2 Q3 Q4 ASSETS 1 Accounts receivable, gross2 959.4 948.5 945.5 988.9 967.9 948.5 930.1 942.1 945.8 945.5 2 Consumer 328.7 340.2 315.7 324.7 329.4 340.2 329.9 332.1 334.7 315.7 3 Business 458.4 447.0 455.3 481.9 451.1 447.0 443.0 449.4 445.5 455.3 4 Real estate 172.3 161.3 174.5 182.3 187.4 161.3 157.2 160.5 165.5 174.5 5 LESS: Reserves for unearned income 69.8 60.6 57.7 61.6 60.8 60.6 59.5 58.5 58.0 57.7 6 Reserves for losses 16.7 21.0 24.0 17.4 18.0 21.0 21.5 21.6 22.1 24.0 7 Accounts receivable, net 872.9 866.8 863.8 909.9 889.1 866.8 849.1 862.0 865.7 863.8 8 All other 461.2 523.4 588.5 458.9 478.7 523.4 515.2 530.5 558.0 588.5 9 Total assets 1,334.1 1,390.2 1,452.3 1,368.8 1,367.8 1,390.2 1,364.3 1,392.5 1,423.7 1,452.3 LIABILITIES AND CAPITAL 10 Bank loans 35.9 50.8 57.6 45.3 44.5 50.8 49.4 56.9 74.9 57.6 11 Commercial paper 238.8 158.6 141.5 181.6 171.0 158.6 137.0 130.8 143.1 141.5 Debt 12 Owed to parent 102.6 99.2 87.5 93.4 91.7 99.2 82.6 83.3 82.9 87.5 13 Not elsewhere classified 502.3 567.4 621.3 542.2 555.8 567.4 574.5 597.2 584.9 621.3 14 All other liabilities 301.9 325.6 336.6 336.4 327.6 325.6 329.2 331.5 343.4 336.6 15 Capital, surplus, and undivided profits 152.5 188.7 207.9 170.0 177.2 188.7 191.7 192.9 194.5 207.9 16 Total liabilities and capital 1,334.1 1,390.2 1,452.3 1,368.8 1,367.8 1,390.2 1,364.3 1,392.5 1,423.7 1,452.3 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 2003 TTyyppee ooff ccrreeddiitt Aug.' Sept.' Oct.' Nov.' Dec.' Jan. Seasonally adjusted 1 Total l,186.3r l,246.7r 1,270.3 1,269.9 1,267.2 1,266.4 1,270.3 1,270.3 1,276.0 ?, Consumer 465. r 513.4r 513.3 524.7 523.0 517.7 513.8 513.3 518.2 3 Real estate 198.9 207.7 216.5 209.6 207.9 211.7 214.2 216.5 217.0 4 Business 522.3r 525.6r 540.6 535.5 536.2 537.0 542.3 540.6 540.8 Not seasonally adjusted 5 Total l,192.9r l,253.9r 1,277.7 1,261.2 1,260.9 1,263.6 1,268.0 1,277.7 1,278.6 6 Consumer 469.0r 518.3' 518.5 525.2 523.0 519.0 517.7 518.5 519.5 7 Motor vehicle loans 141.6 173.9 160.2 170.3 176.5 169.9 159.8 160.2 160.1 8 Motor vehicle leases 108.2 103.5 83.3 90.5 88.5 86.7 85.2 83.3 81.9 9 Revolving2 38.3' 31.7' 39.1 36.7 37.4 37.5 37.2 39.1 39.6 10 Other3 40.7 31.1 33.1 33.0 32.3 31.3 31.4 33.1 33.3 Securitized assets4 11 Motor vehicle loans 97.1 131.9 151.9 144.4 138.9 144.1 153.9 151.9 154.3 12 Motor vehicle leases 6.6 6.8 5.7 6.0 6.0 5.9 5.8 5.7 5.7 13 Revolving 19.6 25.0 31.1 29.9 29.1 29.2 30.2 31.1 30.4 14 Other 17.1 14.3 14.0 14.4 14.4 14.4 14.2 14.0 14.2 15 Real estate 198.9 207.7 216.5 209.6 207.9 211.7 214.2 216.5 217.0 16 One- to four-family 130.6 120.1 135.0 128.7 126.5 130.5 132.8 135.0 135.9 17 Other 41.7 41.2 39.5 38.8 39.0 39.0 39.3 39.5 39.4 Securitized real estate assets4 18 One- to four-family 24.7 40.7 39.7 40.4 40.1 40.1 39.9 39.7 39.4 19 Other 1.9 5.7 2.2 1.7 2.2 2.2 2.2 2.2 2.2 20 Business 525.0 527.9 542.7 526.4 530.0 532.9 536.1 542.7 542.1 21 Motor vehicles 75.5 54.0 60.7 56.0 56.9 57.3 58.2 60.7 58.6 ??. Retail loans 18.3 16.1 15.4 17.2 17.6 18.0 15.7 15.4 15.2 23 Wholesale loans5 39.7 20.3 29.3 22.2 23.3 23.5 26.7 29.3 27.5 24 Leases 17.6 17.6 16.0 16.6 15.9 15.9 15.8 16.0 15.9 25 Equipment 283.5 289.4 292.1 287.5 289.2 288.4 288.4 292.1 291.3 26 Loans 70.2 77.8 83.3 81.4 82.8 81.9 82.2 83.3 83.8 27 Leases 213.3 211.6 208.8 206.1 206.4 206.5 206.2 208.8 207.5 28 Other business receivables6 99.4 103.5 102.5 99.8 99.4 97.0 95.7 102.5 104.7 Securitized assets4 79 Motor vehicles 37.8 50.1 50.2 41.0 43.8 47.0 50.4 50.2 50.3 30 Retail loans 3.2 5.1 2.4 2.2 2.2 1.9 2.5 2.4 2.4 31 Wholesale loans 32.5 42.5 45.9 36.5 39.3 42.8 45.6 45.9 46.1 32 Leases 2.2 2.5 1.9 2.3 2.3 2.3 2.3 1.9 1.8 33 Equipment 23.1 23.2 20.2 22.0 21.6 23.9 24.3 20.2 20.1 34 Loans 15.5 16.4 13.0 15.4 14.8 17.2 17.6 13.0 12.9 35 Leases 7.6 6.8 7.2 6.6 6.7 6.7 6.7 7.2 7.2 36 Other business receivables6 5.6 7.7 17.1 20.1 19.1 19.2 19.2 17.1 17.1 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 I. 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 • May 2003 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 2002 2003 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Terms and yields in primary and secondary markets PRIMARY MARKETS Terms1 1 Purchase price (thousands of dollars) 234.5 245.0 261.1 267.5 266.7 258.7 256.7 266.9 278.9 235.1 2 Amount of loan (thousands of dollars) 177.0 184.2 197.0 199.1 201.1 195.0 193.3 205.1 214.0 179.3 3 Loan-to-price ratio (percent) 77.4 77.3 77.8 77.3 77.6 77.7 77.4 79.0 79.3 78.0 4 Maturity (years) 29.2 28.8 28.9 29.0 29.1 28.8 28.4 28.7 28.9 28.3 5 Fees and charges (percent of loan amount)2 .70 .67 .62 .59 .60 .63 .61 .64 .79 .37 Yield (percent per year) 6 Contract rate1 7.41 6.90 6.35 6.17 6.09 6.00 5.99 5.95 6.00 5.76 7 Effective rate1-3 7.52 7.00 6.44 6.26 6.17 6.09 6.08 6.04 6.12 5.82 8 Contract rate (HUD series)4 n.a. 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 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 GNMA securities6 7.57 6.36 5.81 5.53 5.15 5.31 5.29 5.17 5.18 5.03 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 610,122 707,015 790,800 746,101 751,423 751,347 760,759 790,800 810,609 816,747 12 FHA/VA insured 61,539 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 13 Conventional 548,583 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 14 Mortgage transactions purchased (during period) 154,231 270,384 370,641 23,123 33,518 32,853 47,807 67,891 57,281 40,420 Mortgage commitments (during period) 15 Issued7 163,689 304,084 400,327 42,555 58,055 68,463 53,286 30,769 n.a. n.a. 16 To sell8 11,786 7,586 12,268 1,292 1,016 1,121 520 1,555 n.a. n.a. FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period f 17 Total 385,693 491,719 568,173 525,795 530,694 536,389 549,380 568,173 568,494 561,534 18 FHA/VA insured 3,332 3,506 4,573 4,195 4,634 4,724 4,019 4,573 n.a. n.a. 19 Conventional 382,361 488,213 563,600 521,600 526,060 531,665 545,361 563,600 n.a. n.a. Mortgage transactions (during period) 20 Purchases 174,043 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 21 Sales 166,901 389,611 547,046 34,937 46,369 60,516 62,354 73,184 48,169 41,831 22 Mortgage commitments contracted (during period)9 169,231 417,434 615,981 44,401 57,793 73,639 74,340 91,223 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 11999999 22000000 22000011 Q4 Ql Q2 Q3 Q4P 1 All holders 6,320,135 6,894,097 7,597,732 7,597,732 7,763,084 7,978,272 8,209,225 8,476,304 By type of property 2 One- to four-family residences 4,790,601 5,208,604 5,738,228 5,738,228 5,876,695 6,048,445 6,245,941 6,459,659 3 Multifamily residences 369,003 405,430 453,100 453,100 461,198 472,262 479,919 496,733 4 Nonfarm, nonresidential 1,057,568 1,171,205 1,290,069 1,290,069 1,307,076 1,337,136 1,359,812 1,394,692 5 Farm 102,964 108,858 116,336 116,336 118,116 120,428 123,553 125,220 By type of holder 6 Major financial institutions 2,394,271 2,618,969 2,791,076 2,791,076 2,789,654 2,860,853 2,981,236 3,087,646 7 Commercial banks2 1,495,420 1,660,054 1,789,819 1,789,819 1,800,362 1,873,203 1,961,908 2,059,079 8 One- to four-family 879,576 965,635 1,023,851 1,023,851 1,018,478 1,070,522 1,143,938 1,222,461 9 Multifamily 67,665 77,803 84,851 84,851 86,719 90,743 90,929 94,169 10 Nonfarm, nonresidential 516,333 582,577 645,619 645,619 659,187 674,972 689,288 704,454 11 Farm 31,846 34,039 35,498 35,498 35,978 36,966 37,753 37,995 12 Savings institutions3 668,064 722,974 758,236 758,236 745,998 742,732 773,689 781,255 13 One- to four-family 548,222 594,221 620,579 620,579 605,171 599,402 625,424 631,399 14 Multifamily 59,309 61,258 64,592 64,592 65,199 66,009 68,668 67,840 15 Nonfarm, nonresidential 60,063 66,965 72,534 72,534 75,077 76,768 79,036 81,435 16 Farm 470 529 531 531 551 552 560 581 17 Life insurance companies 230,787 235,941 243,021 243,021 243,293 244,918 245,639 247,312 18 One- to four-family 5,934 4,903 4,931 4,931 4,938 5,162 5,176 5,210 19 Multifamily 32,818 33,681 35,631 35,631 35,671 35,818 35,921 36,161 20 Nonfarm, nonresidential 179,048 183,757 188,376 188,376 188,599 189,850 190,398 191,666 21 Farm 12,987 13,600 14,083 14,083 14,085 14,088 14,144 14,275 22 Federal and related agencies 320,054 344,225 376,999 376,999 385,027 396,091 412,014 437,100 23 Government National Mortgage Association 7 6 8 8 8 8 8 5 24 One- to four-family 7 6 8 8 8 8 8 5 25 Multifamily 0 0 0 0 0 0 0 0 26 Farmers Home Administration4 73,871 73,323 72,452 72,452 72,362 71,970 72,030 72,377 27 One- to four-family 16,506 16,372 15,824 15,824 15,665 15,273 15,139 14,908 28 Multifamily 11,741 11,733 11,712 11,712 11,707 11,692 11,686 11,669 29 Nonfarm, nonresidential 41,355 41,070 40,965 40,965 41,134 41,188 41,439 42,101 30 Farm 4,268 4,148 3,952 3,952 3,855 3,817 3,766 3,700 31 Federal Housing Admin, and Dept. of Veterans Affairs 3,712 3,507 3,290 3,290 3,361 3,473 2,973 3,854 32 One- to four-family 1,851 1,308 1,260 1,260 1,255 1,254 1,252 1,262 33 Multifamily 1,861 2,199 2,031 2,031 2,105 2,218 1,721 2,592 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 152 45 13 13 7 22 13 46 40 One- to four-family 25 7 2 2 1 4 2 7 41 Multifamily 29 9 3 3 1 4 2 9 42 Nonfarm, nonresidential 98 29 8 8 4 14 8 30 43 Farm 0 0 0 0 0 0 0 0 44 Federal National Mortgage Association 149,422 155,626 169,908 169,908 176,051 180,491 184,191 190,501 45 One- to four-family 141,195 144,150 155,060 155,060 160,300 164,038 167,006 171,490 46 Multifamily 8,227 11,476 14,848 14,848 15,751 16,453 17,185 19,011 47 Federal Land Banks 34,187 36,326 40,885 40,885 41,981 42,951 44,782 45,863 48 One- to four-family 2,012 2,137 2,406 2,406 2,470 2,527 2,635 2,699 49 Farm 32,175 34,189 38,479 38,479 39,511 40,424 42,147 43,164 50 Federal Home Loan Mortgage Corporation 56,676 59,240 62,792 62,792 59,624 58,872 60,934 63,887 51 One- to four-family 44,321 42,871 40,309 40,309 35,955 34,062 34,616 35,851 52 Multifamily 12,355 16,369 22,483 22,483 23,669 24,810 26,318 28,036 53 Mortgage pools or trusts5 2,947,690 3,231,401 3,714,706 3,714,706 3,869,374 3,986,827 4,065,965 4,182,833 54 Government National Mortgage Association 582,263 611,553 591,368 591,368 587,204 583,745 567,428 537,927 55 One- to four-family 565,189 592,624 569,460 569,460 564,108 559,549 542,250 512,137 56 Multifamily 17,074 18,929 21,908 21,908 23,096 24,196 25,178 25,790 57 Federal Home Loan Mortgage Corporation 749,081 822,310 948,409 948,409 1,012,478 1,053,261 1,058,176 1,082,062 58 One- to four-family 744,619 816,602 940,933 940,933 1,005,136 1,045,981 1,050,899 1,072,990 59 Multifamily 4,462 5,708 7,476 7,476 7,342 7,280 7,277 9,072 60 Federal National Mortgage Association 960,883 1,057,750 1,290,351 1,290,351 1,355,404 1,404,594 1,458,945 1,538,287 61 One- to four-family 924,941 1,016,398 1,238,125 1,238,125 1,301,374 1,349,442 1,402,929 1,478,610 62 Multifamily 35,942 41,352 52,226 52,226 54,030 55,152 56,016 59,677 63 Farmers Home Administration4 0 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 0 0 0 0 0 0 0 0 68 Private mortgage conduits 655,463 739,788 884,578 884,578 914,288 945,227 981,416 1,024,557 69 One- to four-family6 455,021 499,834 591,200 591,200 616,300 638,300 669,300 694,800 70 Multifamily 42,045 48,894 56,591 56,591 57,339 58,783 59,446 62,987 71 Nonfarm, nonresidential 158,398 191,060 236,787 236,787 240,649 248,144 252,669 266,770 72 Farm 0 0 0 0 0 0 0 0 73 Individuals and others7 658,120 699,503 714,950 714,950 719,029 734,502 750,010 768,724 74 One- to four-family 459,385 495,605 506,786 506,786 514,043 524,741 538,393 555,356 75 Multifamily 75,244 75,799 78,593 78,593 78,426 78,979 79,462 79,627 76 Nonfarm, nonresidential 102,274 105,747 105,780 105,780 102,425 106,201 106,973 108,237 77 Farm 21,217 22,352 23,792 23,792 24,135 24,581 25,183 25,504 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 • May 2003 1.55 CONSUMER CREDIT1 Millions of dollars, amounts outstanding, end of period 2002 2003 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 22000000 22000011 22000022rr Aug.' Sept.' Oct.' Nov.' Dec.' Jan. Seasonally adjusted 1 Total l,559,469r l,666,816r 1,726,401 1,725,418 1,726,912 1,727,992 1,725,125 1,726,401 1,738,729 2 Revolving 667,332' 701,285' 712,398 720,651 717,653 717,279 716,376 712,398 715,661 3 Nonrevolving2 892,137' 965,531' 1,014,002 1,004,766 1,009,260 1,010,713 1,008,749 1,014,002 1,023,068 Not seasonally adjusted 4 Total l,593,051r 1,701,856 1,762,262 1,724,225 1,721,809 1,727,420 1,735,697 1,762,262 1,753,711 By major holder Commercial banks 541,470 558,421 587,355 572,443 575,730 577,428 580,385 587,355 582,635 6 Finance companies 219,783' 236,559 232,269 239,857 246,072 238,571 228,241 232,269 230,111 / Credit unions 184,434 189,570 195,744 195,488 195,884 197,072 196,807 195,744 195,164 8 Savings institutions 64,557 69,070 68,591 70,055 65,094 66,272 67,413 68,591 67,635 9 Nonfinancial business 82,662 67,955 56,912 52,101 49,170 49,075 49,812 56,912 52,892 10 Pools of securitized assets3 500,145 580,281 621,391 594,281 589,859 599,003 613,040 621,391 625,274 By major type of credit4 11 Revolving 692,955' 727,297 738,404 718,353 711,670 710,701 717,668 738,404 727,120 12 Commercial banks 218,063 224,878 231,449 224,695 226,193 224,897 226,237 231,449 221,818 13 Finance companies 37,561' 31,538 38,948 36,528 37,280 37,351 37,014 38,948 38,388 14 Credit unions 22,226 22,265 22,228 21,449 21,304 21,119 21,260 22,228 21,645 13 Savings institutions 16,560 17,767 16,193 17,869 14,758 15,242 15,710 16,193 15,811 16 Nonfinancial business 42,430 29,790 19,221 16,747 14,129 14,100 14,315 19,221 16,547 17 Pools of securitized assets3 356,114 401,059 410,365 401,064 398,005 397,992 403,132 410,365 412,911 18 Nonrevolving 900,095 974,559 1,023,858 1,005,872 1,010,139 1,016,719 1,018,029 1,023,858 1,026,591 19 Commercial banks 323,407 333,543 355,906 347,748 349,537 352,531 354,148 355,906 360,817 20 Finance companies 182,221 205,021 193,321 203,329 208,792 201,219 191,226 193,321 191,723 21 Credit unions 162,208 167,305 173,516 174,039 174,580 175,953 175,547 173,516 173,519 22 Savings institutions 47,997 51,303 52,398 52,186 50,335 51,031 51,703 52,398 51,824 23 Nonfinancial business 40,232 38,165 37,691 35,354 35,041 34,975 35,497 37,691 36,346 24 Pools of securitized assets3 144,031 179,222 211,026 193,217 191,854 201,011 209,908 211,026 212,363 1. The Board's series on amounts of credit covers most short- and intermediate-term credit 3. Outstanding balances of pools upon which securities have been issued; these balances extended to individuals, excluding loans secured by real estate. Data in this table also appear are no longer carried on the balance sheets of the loan originator. in the Board's G.19 (421) monthly statistical release. For ordering address, see inside front 4. Totals include estimates for certain holders for which only consumer credit totals are cover. available. 2. Comprises motor vehicle loans, mobile home loans, and all other loans that are not included in revolving credit, such as loans for education, boats, trailers, or vacations. These loans may be secured or unsecured. 1.56 TERMS OF CONSUMER CREDIT1 Percent per year except as noted 2002 2003 IItteemm 22000000 22000011 22000022 July Aug. Sept. Oct.' Nov. Dec. Jan. INTEREST RATES Commercial banks2 1 48-month new car 9.34 8.50 6.71 n.a. 5.95 n.a. n.a. 5.67 n.a. n.a. 2 24-month personal 13.90 13.22 11.59 n.a. 11.28 n.a. n.a. 10.78 n.a. n.a. Credit card plan 3 All accounts 15.71 14.89 13.42 n.a. 13.37 n.a. n.a. 13.13 n.a. n.a. 4 Accounts assessed interest 14.91 14.44 13.09 n.a. 13.26 n.a. n.a. 12.78 n.a. n.a. Auto finance companies 5 New car 6.61 5.65 4.29 3.58 2.17 2.29 2.62 3.41' 3.50 3.13 6 Used car 13.55 12.18 10.74' 10.59 10.46 10.44 10.59 10.70' 10.48 10.37 OTHER TERMS3 Maturity (months) 7 New car 54.9 55.1 56.8 58.9 59.2 58.4 57.4 57.2 57.5 58.5 8 Used car 57.0 57.5 57.5' 57.8 57.6 57.5 57.4 56.9 56.7 57.5 Loan-to-value ratio 9 New car 92 91 94' 95 97 97 96 95 96 96 10 Used car 99 100 100 100 100 100 101 100 100 100 Amount financed (dollars) 11 New car 20,923 22,822 24,747r 25,092 26,455 26,331 26,099 26,104' 26,647 26,443 12 Used car 14,058 14,416 14,532' 14,701 14,679 14,801 14,702 14,610' 14,639 14,499 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 A35 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 2001 2002 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999977 11999988 22000000 Q2 Q3 Q4 Ql Q2 Q3 Q4 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .. 789.9 1,046.2 1,031.6 840.9 1,125.9 1,082.6 1,285.8 1,193.0 966.2 1,627.6 1,298.0 1,563.2 By sector and instrument ? Federal government 23.1 -52.6 -71.2 -295.9 -5.6 -215.8 209.3 43.4 39.8 526.0 265.7 198.5 Treasury securities 23.2 -54.6 -71.0 -294.9 -5.0 -216.9 209.7 44.2 41.6 524.2 264.2 198.1 4 Budget agency securities and mortgages -.1 2.0 -.2 -1.0 -.5 1.1 -.4 -.7 -1.8 1.8 1.6 .4 5 Nonfederal 766.8 1,098.8 1,102.8 1,136.8 1,131.5 1,298.4 1,076.4 1,149.5 926.4 1,101.6 1,032.3 1,364.7 By instrument 6 Commercial paper 13.7 24.4 37.4 48.1 -88.3 -133.4 -66.1 45.5 -144.4 -81.7 -17.4 -13.2 7 Municipal securities and loans 56.9 84.2 54.4 23.6 119.2 132.4 80.4 170.0 74.6 195.4 156.9 224.9 8 Corporate bonds 150.5 235.2 217.8 161.3 340.5 444.5 191.4 325.0 253.7 191.4 -29.1 116.8 9 Bank loans n.e.c 106.4 108.2 82.8 101.7 -82.7 -125.1 -24.3 -166.0 -17.2 -192.8 -125.0 -33.6 in Other loans and advances 59.5 82.1 46.0 95.0 29.3 132.3 59.4 -107.3 -19.2 77.2 77.6 4.0 11 Mortgages 322.3 489.8 564.9 568.2 704.7 767.5 770.2 733.0 696.6 831.3 911.3 1,064.8 1? Home 258.3 387.7 424.6 418.4 530.9 608.3 560.0 531.1 601.3 657.3 778.7 854.7 n Multifamily residential 7.3 23.4 35.7 34.0 47.9 40.8 56.5 56.5 29.3 44.4 29.5 63.3 14 Commercial 53.5 72.2 98.8 109.2 118.4 106.5 146.7 138.6 59.2 120.6 90.1 140.2 15 Farm 3.1 6.5 5.8 6.5 7.5 11.9 7.0 6.8 6.9 9.1 13.1 6.5 16 Consumer credit 57.5 75.0 99.5 139.0 108.8 80.2 65.4 149.4 82.3 80.8 57.9 1.0 By borrowing sector 17 Household 332.7 454.8 498.0 546.0 611.8 661.4 656.9 621.7 704.9 684.1 755.7 883.1 18 Nonfinancial business 392.5 576.3 566.3 575.4 417.6 520.6 352.6 390.2 154.9 234.8 132.6 285.0 19 Corporate 291.6 408.6 378.5 380.4 253.3 339.1 194.4 240.8 39.3 93.6 -10.5 125.8 70 Nonfarm noncorporate 94.7 159.7 182.4 184.1 156.8 170.1 153.8 141.1 110.3 132.7 128.8 155.2 ?1 Farm 6.2 8.0 5.5 10.9 7.5 11.5 4.4 8.3 5.3 8.5 14.2 4.0 22 State and local government 41.5 67.7 38.5 15.5 102.2 116.5 67.0 137.6 66.6 182.7 144.0 196.5 23 Foreign net borrowing in United States 71.8 43.2 25.2 65.7 -37.4 -50.5 -106.7 16.0 77.3 15.1 -32.1 29.6 24 Commercial paper 3.7 7.8 16.3 31.7 -14.2 -3.8 -25.2 5.9 66.8 36.5 3.9 37.3 75 Bonds 61.4 34.9 14.1 23.9 -12.1 -15.8 -83.9 29.7 -2.3 -11.0 -22.5 -1.0 26 Bank loans n.e.c 8.5 6.6 .5 11.4 -7.3 -31.4 4.2 -16.3 13.9 22.0 -11.7 -2.8 27 Other loans and advances -1.8 -6.0 -5.7 -1.3 -3.7 .5 -1.8 -3.3 -1.2 -2.4 -1.8 -3.9 28 Total domestic plus foreign 861.7 1,089.4 1,056.7 906.6 1,088.5 1,032.2 1,179.1 1,208.9 1,043.4 1,642.7 1,265.9 1,592.8 Financial sectors 29 Total net borrowing by financial sectors 662.2 1,087.2 1,073.3 809.0 958.5 828.2 1,113.5 976.5 869.8 870.0 852.1 1,097.7 By instrument 30 Federal government-related 212.9 470.9 592.0 433.5 629.3 674.6 818.4 591.8 691.1 487.8 420.9 642.5 31 Government-sponsored enterprise securities 98.4 278.3 318.2 234.1 290.8 268.3 326.2 306.5 191.3 141.7 249.1 347.6 32 Mortgage pool securities 114.6 192.6 273.8 199.4 338.5 406.2 492.2 285.3 499.8 346.1 171.8 294.9 33 Loans from U.S. government .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 449.3 616.3 481.3 375.5 329.2 153.7 295.1 384.7 178.7 382.2 431.2 455.2 35 Open market paper 166.7 161.0 176.2 127.7 -61.9 -77.9 -72.2 -13.6 -178.3 -109.1 84.3 -76.5 36 Corporate bonds 218.9 310.2 207.1 199.3 341.1 223.2 308.8 372.7 354.1 435.8 188.6 617.6 37 Bank loans n.e.c 13.3 30.1 -14.2 -.2 13.8 10.8 1.6 18.3 .2 31.9 82.3 -70.6 38 Other loans and advances 35.6 90.2 107.1 42.5 34.9 -18.7 58.8 8.9 -3.9 16.7 71.9 -17.2 39 Mortgages 14.9 24.8 5.1 6.2 1.3 16.2 -1.9 -1.6 6.6 7.0 4.1 1.9 By borrowing sector 40 Commercial banking 46.1 72.9 67.2 60.0 52.9 -10.5 39.7 44.1 24.3 13.3 62.2 93.5 41 Savings institutions 19.7 52.2 48.0 27.3 7.4 3.4 39.4 -68.6 -33.1 -12.1 37.1 -47.1 47 Credit unions .1 .6 2.2 .0 1.5 .8 1.5 4.4 2.4 2.0 3.1 .4 43 Life insurance companies .2 .7 .7 -.7 .6 .1 3.5 1.4 2.4 1.2 2.0 2.5 44 Government-sponsored enterprises 98.4 278.3 318.2 234.1 290.8 268.3 326.2 306.5 191.3 141.7 249.1 347.6 45 Federally related mortgage pools 114.6 192.6 273.8 199.4 338.5 406.2 492.2 285.3 499.8 346.1 171.8 294.9 46 Issuers of asset-backed securities (ABSs) 202.2 321.4 212.3 189.7 317.6 205.9 313.9 430.0 263.6 241.6 194.1 356.3 47 Finance companies 57.8 57.1 70.3 81.2 -.2 36.8 41.8 -25.3 -31.2 80.2 106.4 19.2 48 Mortgage companies -4.6 1.6 .2 .1 .7 .6 .8 .6 .8 .7 .7 .7 49 Real estate investment trusts (REITs) 39.6 62.7 6.3 2.7 2.5 10.5 -2.4 7.8 7.4 25.3 26.6 15.1 50 Brokers and dealers 8.1 7.2 -17.2 15.6 1.4 35.6 12.6 -18.9 -15.7 17.5 15.2 -24.1 51 Funding corporations 79.9 40.0 91.5 -.4 -55.2 -129.6 -155.7 9.1 ^12.2 12.4 -16.4 38.7 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic NonfinancialS tatistics • May 2003 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS '—Continued Billions of dollars; quarterly data at seasonally adjusted annual rates 2001 2002 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999977 11999988 11999999 22000000 22000011 Q2 Q3 Q4 Ql Q2 Q3 Q4 All sectors 52 Total net borrowing, all sectors 1,523.9 2,176.7 2,130.0 1,715.6 2,047.1 1,860.4 2,292.6 2,185.4 1,913.3 2,512.7 2,118.0 2,690.5 53 Open market paper 184.1 193.1 229.9 207.6 -164.4 -215.1 -163.5 37.8 -255.9 -154.3 70.8 -52.4 54 U.S. government securities 236.0 418.3 520.7 137.6 623.8 458.8 1,027.8 635.2 730.9 1,013.8 686.7 841.0 55 Municipal securities 56.9 84.2 54.4 23.6 119.2 132.4 80.4 170.0 74.6 195.4 156.9 224.9 56 Corporate and foreign bonds 430.8 580.2 439.1 384.4 669.5 651.9 416.3 727.4 605.5 586.2 136.9 733.4 57 Bank loans n.e.c 128.2 145.0 69.0 112.8 -76.2 -145.7 -18.5 -164.0 -3.0 -139.0 -54.3 -107.0 58 Other loans and advances 93.2 166.3 147.4 136.2 60.4 114.2 116.5 -101.8 -24.2 91.5 147.6 -17.2 59 Mortgages 337.2 514.6 570.0 574.4 706.0 783.8 768.2 731.4 703.1 838.3 915.4 1,066.7 60 Consumer credit 57.5 75.0 99.5 139.0 108.8 80.2 65.4 149.4 82.3 80.8 57.9 1.0 Funds raised through mutual funds and corporate equities 61 Total net issues 218.7 165.9 191.2 236.1 301.9 419.9 151.8 397.9 437.6 282.4 -77.1 271.6 62 Corporate equities -46.4 -113.7 .0 1.1 100.5 146.4 -8.6 142.0 50.7 182.4 -114.2 66.7 63 Nonfinancial corporations -77.4 -215.5 -110.4 -118.2 -47.4 -57.9 -108.6 -4.2 -8.0 17.9 -130.8 -39.9 64 Foreign shares purchased by U.S. residents 57.6 101.3 114.3 103.6 106.8 222.9 43.5 74.7 -5.9 79.7 -50.6 52.7 65 Financial corporations -26.6 .6 ^t.O 15.7 41.1 -18.6 56.5 71.5 64.6 84.8 67.3 54.0 66 Mutual fund shares 265.1 279.5 191.2 235.0 201.4 273.5 160.4 255.9 386.9 100.0 37.1 204.9 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables F.2 through F4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A3 7 1.58 SUMMARY OF FINANCIAL TRANSACTIONS1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 2001 2002 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999977 11999988 11999999 22000000 22000011 Q2 Q3 Q4 Ql Q2 Q3 Q4 NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets 1,523.9 2,176.7 2,130.0 1,715.6 2,047.1 1,860.4 2,292.6 2,185.4 1,913.3 2,512.7 2,118.0 2,690.5 2 Domestic nonfederal nonfinancial sectors 15.4 259.1 227.3 -116.6 -24.1 -117.2 70.5 92.5 155.9 272.5 -240.2 150.2 Household 25.3 127.3 217.3 -140.6 -52.7 -101.1 53.8 18.2 101.3 223.4 -250.4 148.6 4 Nonfinancial corporate business -12.7 -16.0 -15.6 23.4 -11.5 -29.5 -44.5 29.9 52.3 3.2 -5.5 -41.3 5 Nonfarm noncorporate business 2.6 13.3 -2.9 1.3 2.0 .3 3.3 2.0 3.3 3.3 -2.2 -1.0 6 State and local governments .1 134.5 28.4 -.8 38.1 13.1 57.9 42.4 -1.1 42.5 17.8 43.8 7 Federal government 5.1 13.5 5.8 7.3 6.0 9.4 3.3 7.0 4.7 8.8 6.8 10.3 8 Rest of the world 259.6 172.5 139.7 225.9 320.6 254.9 269.2 432.5 171.8 542.6 450.0 503.0 9 Financial sectors 1,243.9 1,731.6 1,757.2 1,599.0 1.744.6 1,713.4 1,949.6 1,653.4 1,580.9 1,688.8 1,901.4 2,027.0 10 Monetary authority 38.3 21.1 25.7 33.7 39.9 26.9 8.4 85.1 81.6 43.4 67.3 118.7 11 Commercial banking 324.3 305.6 312.2 357.9 205.2 107.8 267.9 314.6 188.9 384.3 624.0 442.6 12 U.S.-chartered banks 274.9 312.1 318.6 339.5 191.6 156.5 242.5 275.0 168.2 343.8 599.9 462.8 13 Foreign banking offices in United States 40.2 -11.6 -17.0 23.9 -.6 -50.1 21.1 -7.8 2.1 33.7 21.8 -31.3 14 Bank holding companies 5.4 -.9 6.2 -12.2 4.2 -2.8 -1.4 13.6 12.0 1.9 -1.6 .2 15 Banks in U.S.-affiliated areas 3.7 6.0 4.4 6.7 10.0 4.2 5.7 33.9 6.6 4.9 4.0 10.9 16 Savings institutions —4.7 36.2 67.7 56.2 42.8 55.8 -4.7 73.1 12.3 -23.5 79.7 73.4 17 Credit unions 16.8 18.9 27.5 28.0 41.5 9.6 61.1 60.5 58.3 41.1 39.9 37.3 18 Bank personal trusts and estates -25.0 -12.8 27.8 .8 -28.1 -28.1 -28.0 -28.1 1.0 .9 .8 .8 19 Life insurance companies 104.8 76.9 53.5 57.9 130.9 143.6 186.9 81.3 260.6 175.1 267.6 156.1 20 Other insurance companies 25.2 5.8 -3.0 -8.7 9.0 .1 5.1 28.5 36.7 35.4 21.7 28.2 21 Private pension funds 47.6 -23.4 17.0 33.4 20.3 44.7 10.4 5.3 27.4 46.2 35.9 14.4 22 State and local government retirement funds 67.1 72.1 46.9 54.6 -17.7 77.0 -74.2 -2.7 70.5 -54.5 -10.4 9.4 23 Money market mutual funds 87.5 244.0 182.0 143.0 246.0 245.3 311.8 49.1 -241.3 -86.7 -74.4 301.2 74 Mutual funds 80.9 127.3 48.4 21.0 126.0 169.1 102.7 139.3 243.3 41.9 162.7 128.9 25 Closed-end funds -2.9 5.2 8.2 -6.3 7.1 -4.9 23.9 16.6 21.6 -.4 -3.3 -1.8 2.6 Government-sponsored enterprises 106.3 314.0 291.3 256.4 309.0 297.2 274.3 335.3 236.7 129.0 204.4 319.5 27 Federally related mortgage pools 114.6 192.6 273.8 199.4 338.5 406.2 492.2 285.3 499.8 346.1 171.8 294.9 28 Asset-backed securities issuers (ABSs) 163.8 281.7 194.1 159.9 291.4 177.6 288.3 407.3 239.4 219.4 171.5 334.5 29 Finance companies 23.1 77.3 97.0 108.0 -5.7 112.1 -43.3 -100.5 -28.2 39.6 80.0 -21.2 30 Mortgage companies -9.1 3.2 .3 .2 1.4 1.1 1.7 1.2 1.6 1.4 1.5 1.5 31 Real estate investment trusts (REITs) 20.2 -5.1 -2.6 -6.3 6.7 1.1 7.8 14.0 26.3 31.8 27.6 8.1 32 Brokers and dealers 14.9 6.8 -34.7 68.9 92.4 53.4 184.5 -110.5 -219.5 402.8 -208.6 147.5 33 Funding corporations 50.4 -15.8 124.0 41.0 -112.2 -182.3 -127.4 -1.2 63.7 -84.5 226.6 -366.9 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Net flows through credit markets 1,523.9 2,176.7 2,130.0 1,715.6 2,047.1 1,860.4 2,292.6 2,185.4 1,913.3 2,512.7 2,118.0 2,690.5 Other financial sources 35 Official foreign exchange .7 6.6 -8.7 -.4 4.3 4.7 13.7 .2 -3.0 12.9 2244..66 44..99 36 Special drawing rights certificates -.5 .0 -3.0 -4.0 .0 .0 .0 .0 .0 .0 .0 .0 37 Treasury currency .5 .6 1.0 2.4 1.3 1.3 2.2 .0 .9 .6 2.4 .0 38 Foreign deposits 107.7 6.5 61.0 135.1 28.0 -175.9 41.5 17.9 -59.1 53.3 68.7 122.1 39 Net interbank transactions -19.7 -31.8 15.0 15.1 -31.7 -25.4 -1.1 41.5 12.9 -164.6 59.0 118.2 40 Checkable deposits and currency 41.2 47.3 151.2 -71.4 204.3 151.4 215.0 278.1 -171.9 178.0 211.5 -36.1 41 Small time and savings deposits 97.1 152.4 45.1 188.8 267.2 242.1 230.3 329.7 259.7 249.0 327.6 272.9 42 Large time deposits 122.5 91.8 131.1 116.2 68.6 43.0 19.5 77.8 270.0 34.9 27.8 -110.1 43 Money market fund shares 155.9 287.2 249.1 233.3 428.6 370.0 386.1 379.8 -315.7 103.4 -192.6 337.6 44 Security repurchase agreements 120.9 91.3 169.8 113.2 22.3 117.8 212.7 -138.3 119.4 362.4 -91.1 -17.1 45 Corporate equities -46.4 -113.7 .0 1.1 100.5 146.4 -8.6 142.0 50.7 182.4 -114.2 66.7 46 Mutual fund shares 265.1 279.5 191.2 235.0 201.4 273.5 160.4 255.9 386.9 100.0 37.1 204.9 47 Trade payables 139.8 106.4 268.6 425.4 -67.3 -69.6 -185.8 -160.9 182.1 27.2 160.2 89.8 48 Security credit 111.0 103.2 104.4 146.1 3.1 -73.9 561.3 -383.7 -190.7 -131.9 -69.6 -13.1 49 Life insurance reserves 59.3 48.0 50.8 50.2 77.2 52.2 74.7 119.6 93.9 92.2 119.7 97.5 50 Pension fund reserves 201.4 217.4 181.8 209.0 208.4 209.1 180.3 148.2 137.0 145.5 317.2 236.7 51 Taxes payable 22.3 19.6 30.7 32.8 17.5 14.8 104.9 -54.8 3.6 40.4 48.5 23.4 52 Investment in bank personal trusts -53.0 -46.1 -8.1 56.6 -59.9 -62.2 -57.3 -57.7 -3.7 -2.4 -2.1 -1.3 53 Noncorporate proprietors' equity -40.7 -57.8 -62.4 -11.5 -18.6 -26.4 -34.3 8.4 1.5 -32.9 -86.2 -33.7 54 Miscellaneous 456.7 889.0 1,036.3 1,413.5 774.6 974.1 935.6 317.6 207.1 640.1 942.1 528.1 55 Total financial sources 3,265.9 4,274.0 4,734.9 5,002.2 4,277.0 4,027.4 5,143.8 3,506.7 2,895.0 4,403.2 3,908.4 4,582.1 Liabilities not identified as assets (—) 56 Treasury currency -.2 -.1 -.7 -1.2 -.1 -.3 .9 .0 -1.5 -.9 1.1 -1.1 57 Foreign deposits 106.2 -8.5 42.6 55.9 11.1 -166.8 55.3 -27.5 -33.6 94.8 50.8 115.0 58 Net interbank liabilities -19.9 3.8 .1 20.4 17.2 17.0 7.4 22.6 39.8 -9.5 13.2 -17.0 59 Security repurchase agreements 63.2 57.7 35.7 122.6 -53.9 129.8 106.3 -166.2 157.9 224.3 -285.7 -24.7 60 Taxes payable 28.0 19.7 11.7 26.2 22.1 3.1 25.4 35.0 14.3 -52.3 16.2 -47.6 61 Miscellaneous -285.4 -226.9 -291.4 -370.5 -252.3 -480.5 37.0 -314.4 -300.9 33.8 98.3 53.1 Floats not included in assets (-) 62 Federal government checkable deposits -2.7 2.6 -7.4 9.0 5.7 60.9 -20.1 -91.8 15.1 77.1 -10.3 -51.7 63 Other checkable deposits -3.9 -3.1 -.8 1.7 4.5 3.9 5.0 5.7 6.1 7.1 7.6 8.4 64 Trade credit -25.5 -43.3 6.8 32.4 12.5 6.3 -28.3 50.5 -36.3 -92.8 -27.0 -39.5 65 Total identified to sectors as assets 3,406.0 4,472.0 4,938.4 5,105.8 4,510.2 4,453.8 4,955.0 3,992.9 3,033.9 4,121.7 4,074.1 4,587.3 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares. F.l and F.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A93 DomesticN onfinancial Statistics • May 2003 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING' Billions of dollars, end of period 2001 2002 Q2 Q3 Q4 Qi Q2 Q3 Q4 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 16,240.5 17,306.8 18,166.8 19,293.3 18,600.5 18,918.3 19,293.3 19,533.3 19,848.3 20,179.3 20,657.1 By sector and instrument 2 Federal government 3,752.2 3,681.0 3,385.1 3,379.5 3,251.4 3,320.0 3,379.5 3,430.3 3,451.4 3,540.8 3,637.0 3 Treasury securities 3,723.7 3,652.7 3,357.8 3,352.7 3,224.3 3,293.0 3,352.7 3,404.0 3,424.6 3,513.6 3,609.8 4 Budget agency securities and mortgages 28.5 28.3 27.3 26.8 27.0 27.0 26.8 26.3 26.8 27.2 27.3 5 Nonfederal 12,488.4 13,625.8 14,781.7 15,913.8 15,349.1 15,598.3 15,913.8 16,103.0 16,396.9 16,638.5 17,020.0 By instrument 6 Commercial paper 193.0 230.3 278.4 190.1 223.3 201.3 190.1 167.5 148.4 142.2 126.0 7 Municipal securities and loans 1,402.9 1,457.2 1,480.9 1,600.1 1,547.0 1,555.1 1,600.1 1,623.3 1,677.6 1,704.2 1,763.1 8 Corporate bonds 1,846.0 2,063.9 2,225.1 2,565.6 2,436.5 2,484.4 2,565.6 2,629.0 2,676.9 2,669.6 2,698.8 9 Bank loans n.e.c 1,148.6 1,231.4 1,333.1 1,251.0 1,293.6 1,285.1 1,251.0 1,237.3 1,192.1 1,159.1 1,158.8 10 Other loans and advances 907.2 953.5 1,059.6 1,088.8 1,103.6 1,110.1 1,088.8 1,089.6 1,106.0 1,116.9 1,123.7 11 Mortgages 5,644.1 6,243.4 6,811.6 7,516.3 7,136.9 7,333.1 7,516.3 7,679.1 7,894.6 8,125.5 8,392.3 12 Home 4,366.0 4,790.6 5,209.0 5,739.9 5,463.4 5,607.3 5,739.9 5,878.8 6,050.8 6,248.7 6,462.9 13 Multifamily residential 308.0 343.9 378.0 425.8 397.6 411.7 425.8 433.2 444.3 451.6 467.5 14 Commercial 873.6 1,006.5 1,115.8 1,234.2 1,162.9 1,199.6 1,234.2 1,249.0 1,279.1 1,301.6 1,336.7 15 Farm 96.6 102.3 108.9 116.3 113.0 114.6 116.3 118.1 120.4 123.6 125.2 16 Consumer credit 1,346.6 1,446.1 1,593.1 1,701.9 1,608.2 1,629.3 1,701.9 1,677.2 1,701.3 1,720.9 1,757.4 By borrowing sector IV Households 6,011.8 6,510.0 7,075.1 7,686.8 7,322.8 7,493.5 7,686.8 7,802.1 7,987.8 8,183.3 8,443.8 18 Nonfinancial business 5,338.2 5,938.9 6,514.3 6,932.5 6,774.1 6,847.3 6,932.5 6,985.1 7,042.8 7,064.9 7,134.3 19 Corporate 3,790.6 4,203.5 4,583.9 4,837.8 4,755.4 4,790.5 4,837.8 4,863.2 4,883.0 4,871.0 4,899.8 20 Nonfarm noncorporate 1,383.7 1,566.1 1,750.2 1,907.0 1,833.5 1,870.8 1,907.0 1,934.7 1,968.0 1,999.0 2,038.7 21 Farm 163.9 169.4 180.2 187.7 185.2 185.9 187.7 187.1 191.8 194.9 195.7 22 State and local government 1,138.3 1,176.9 1,192.3 1,294.5 1,252.2 1,257.6 1,294.5 1,315.8 1,366.2 1,390.3 1,442.0 23 Foreign credit market debt held in United States 651.3 676.7 742.3 704.9 726.1 701.7 704.9 724.2 725.6 720.2 727.4 24 Commercial paper 72.9 89.2 120.9 106.7 110.1 106.3 106.7 123.6 130.2 134.0 142.8 25 462.6 476.7 500.6 488.4 502.0 481.0 488.4 487.9 477.6 472.0 471.7 26 Bank loans n.e.c 58.7 59.2 70.5 63.2 66.2 67.3 63.2 66.7 72.2 69.3 68.6 27 Other loans and advances 57.1 51.6 50.3 46.6 47.7 47.0 46.6 46.0 45.5 44.9 44.2 28 Total credit market debt owed by nonfinancial sectors, domestic and foreign 16,891.8 17,983.5 18,909.1 19,998.2 19,326.6 19,620.0 19,998.2 20,257.5 20,573.8 20,899.5 21,384.4 Financial sectors 29 Total credit market debt owed by financial sectors 6,545.2 7,618.5 8,439.5 9,395.3 8,851.0 9,120.1 9,395.3 9,591.8 9,804.7 10,007.6 10,317.7 By instrument 30 Federal government-related 3,292.0 3,884.0 4,317.4 4,944.1 4,591.6 4,796.2 4,944.1 5,116.9 5,238.8 5,344.1 5,504.7 31 Government-sponsored enterprise securities .. . 1,273.6 1,591.7 1,825.8 2,114.0 1,955.8 2,037.4 2,114.0 2,161.8 2,197.2 2,259.5 2,346.4 32 Mortgage pool securities 2,018.4 2,292.2 2,491.6 2,830.1 2,635.7 2,758.8 2,830.1 2,955.1 3,041.6 3,084.5 3,158.3 33 Loans from U.S. government .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 3,253.2 3,734.6 4,122.0 4,451.2 4,259.4 4,323.9 4,451.2 4,474.9 4,565.9 4,663.6 4,813.1 35 Open market paper 906.7 1,082.9 1,210.7 1,148.8 1,144.5 1,110.2 1,148.8 1,090.9 1,046.9 1,049.5 1,078.9 36 Corporate bonds 1,878.7 2,085.9 2,297.2 2,638.3 2,478.8 2,561.6 2,638.3 2,730.6 2,847.1 2,901.0 3,037.3 37 Bank loans n.e.c 107.5 93.2 93.0 106.8 100.4 100.2 106.8 105.1 113.5 133.3 117.7 38 Other loans and advances 288.7 395.8 438.3 473.2 450.7 467.2 473.2 462.4 470.8 491.2 490.0 39 Mortgages 71.6 76.7 82.9 84.2 85.1 84.6 84.2 85.9 87.6 88.6 89.1 By borrowing sector 40 Commercial banks 188.6 230.0 266.7 296.0 274.7 281.4 296.0 295.8 310.4 318.9 326.1 41 Bank holding companies 193.5 219.3 242.5 266.1 269.0 272.7 266.1 269.0 264.2 271.8 284.3 42 Savings institutions 212.4 260.4 287.7 295.1 294.4 305.6 295.1 280.5 275.3 286.4 281.3 43 Credit unions 1.1 3.4 3.4 4.9 3.5 3.8 4.9 5.5 6.0 6.8 6.9 44 Life insurance companies 2.5 3.2 2.5 3.1 1.9 2.8 3.1 3.7 4.0 4.5 5.1 45 Government-sponsored enterprises 1,273.6 1,591.7 1,825.8 2,114.0 1,955.8 2,037.4 2,114.0 2,161.8 2,197.2 2,259.5 2,346.4 46 Federally related mortgage pools 2,018.4 2,292.2 2,491.6 2,830.1 2,635.7 2,758.8 2,830.1 2,955.1 3,041.6 3,084.5 3,158.3 47 Issuers of asset-backed securities (ABSs) 1,398.0 1,610.3 1,812.0 2,129.5 1,937.3 2,019.1 2,129.5 2,187.7 2,249.6 2,301.5 2,393.5 48 Brokers and dealers 42.5 25.3 40.9 42.3 43.9 47.1 42.3 38.4 42.8 46.6 40.6 49 Finance companies 625.5 695.7 776.9 776.7 769.0 771.2 776.7 760.8 784.9 802.9 820.4 50 Mortgage companies 17.7 17.8 17.9 18.6 18.2 18.5 18.6 18.8 19.0 19.2 19.3 51 Real estate investment trusts (REITs) 158.8 165.1 167.8 170.2 168.9 168.3 170.2 172.1 178.4 185.1 188.8 52 Funding corporations 412.6 504.0 503.7 448.4 478.6 433.6 448.4 442.6 431.3 420.0 446.6 All sectors 53 Total credit market debt, domestic and foreign . 23,437.1 25,602.0 27,348.6 29,393.6 28,177.5 28,740.1 29,393.6 29,849.3 30,378.5 30,907.1 31,702.2 54 Open market paper 1,172.6 1,402.4 1,610.0 1,445.6 1,477.9 1,417.8 1,445.6 1,382.0 1,325.5 1,325.7 1,347.7 55 U.S. government securities 7,044.2 7,564.9 7,702.5 8,323.6 7,842.9 8,116.2 8,323.6 8,547.2 8,690.2 8,884.9 9,141.7 56 Municipal securities 1,402.9 1,457.2 1,480.9 1,600.1 1,547.0 1,555.1 1,600.1 1,623.3 1,677.6 1,704.2 1,763.1 57 Corporate and foreign bonds 4,187.4 4,626.4 5,022.9 5,692.3 5,417.3 5,527.0 5,692.3 5,847.5 6,001.6 6,042.6 6,207.8 58 Bank loans n.e.c 1,314.8 1,383.8 1,496.6 1,421.0 1,460.2 1,452.6 1,421.0 1,409.1 1,377.8 1,361.7 1,345.1 59 Other loans and advances 1,253.0 1,400.9 1,548.2 1,608.6 1,602.0 1,624.4 1,608.6 1,598.0 1,622.3 1,653.0 1,658.0 60 Mortgages 5,715.7 6,320.1 6,894.5 7,600.5 7,222.0 7,417.8 7,600.5 7,764.9 7,982.2 8,214.2 8,481.4 61 Consumer credit 1,346.6 1,446.1 1,593.1 1,701.9 1,608.2 1,629.3 1,701.9 1,677.2 1,701.3 1,720.9 1,757.4 1. Data in this table appear in the Board's Z.l (780) quarterly statistical release, tables L.2 through L.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A39 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 2001 2002 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999988 22000000 Q2 Q3 Q4 Q1 Q2 Q3 Q4 CREDIT MARKET DEBT OUTSTANDING2 1 23,437.1 25,602.0 27,348.6 29,393.6 28,177.5 28,740.1 29,393.6 29,849.3 30,378.5 30,907.1 31,702.2 2 Domestic nonfederal nonfinancial sectors 3,312.6 3,600.8 3,455.5 3,417.8 3,366.5 3,359.6 3,417.8 3,442.6 3,498.9 3,417.2 3,502.3 Household 2,264.1 2,542.4 2,373.1 2,306.9 2,290.6 2,282.7 2,306.9 2,337.9 2,374.6 2,292.7 2,362.6 4 Nonfinancial corporate business 241.5 226.0 249.4 237.9 225.4 214.8 237.9 230.4 235.0 235.4 240.1 <5 Nonfarm noncorporate business 67.5 64.6 65.9 67.9 66.6 67.4 67.9 68.7 69.6 69.0 68.8 6 State and local governments 739.4 767.8 767.0 805.1 784.0 794.6 805.1 805.6 819.7 820.1 830.9 7 Federal government 219.0 258.0 265.3 271.3 268.7 269.6 271.3 272.5 274.7 276.4 279.0 8 Rest of the world 2,278.2 2,354.6 2,621.1 2,954.4 2,766.8 2,837.5 2,954.4 3,000.6 3,133.2 3,249.5 3,371.3 9 Financial sectors 17,627.3 19,388.7 21,006.7 22,750.1 21,775.4 22,273.4 22,750.1 23,133.5 23,471.8 23,964.0 24,549.6 10 Monetary authority 452.5 478.1 511.8 551.7 535.1 534.1 551.7 575.4 590.7 604.2 629.4 11 Commercial banking 4,336.1 4,648.3 5,006.3 5,210.5 5,041.5 5,100.6 5,210.5 5,231.3 5,328.3 5,476.2 5,620.5 17 U.S.-chartered banks 3,761.4 4,080.0 4,419.5 4,610.1 4,463.5 4,513.5 4,610.1 4,629.3 4,719.7 4,858.4 5,003.8 N Foreign banking offices in United States 504.5 487.4 511.3 510.7 501.3 509.3 510.7 507.7 512.6 521.2 517.3 14 Bank holding companies 26.5 32.7 20.5 24.7 21.6 21.3 24.7 27.7 28.1 27.7 27.8 15 Banks in U.S.-affiliated areas 43.8 48.3 55.0 65.0 55.1 56.5 65.0 66.6 67.9 68.8 71.6 16 Savings institutions 964.7 1,032.4 1,088.6 1,131.4 1,116.1 1,118.1 1,131.4 1,134.7 1,130.9 1,153.7 1,166.9 17 Credit unions 324.2 351.7 379.7 421.2 392.4 408.4 421.2 434.3 447.7 458.5 465.3 18 Bank personal trusts and estates 194.1 222.0 222.8 194.7 208.8 201.8 194.7 195.0 195.2 195.4 195.6 19 Life insurance companies 1,828.0 1,886.0 1,943.9 2,074.8 2,004.8 2,054.8 2,074.8 2,136.9 2,180.1 2,250.7 2,289.6 70 Other insurance companies 521.1 518.2 509.4 518.4 510.0 511.3 518.4 527.6 536.4 541.9 548.9 71 Private pension funds 651.2 668.2 701.6 721.9 718.0 720.6 721.9 728.7 740.3 749.3 752.9 77 State and local government retirement funds 704.6 751.4 806.0 788.4 807.6 789.0 788.4 806.0 792.4 789.8 792.1 73 Money market mutual funds 965.9 1,147.8 1,290.9 1,536.9 1,414.3 1,494.9 1,536.9 1,496.4 1,419.3 1,405.7 1,511.6 74 Mutual funds 1,028.4 1,076.8 1,097.8 1,223.8 1,160.3 1,188.2 1,223.8 1,276.8 1,291.6 1,334.5 1,368.0 75 Closed-end funds 98.4 106.6 100.3 107.4 97.3 103.3 107.4 112.8 112.8 111.9 111.5 76 Government-sponsored enterprises 1,252.3 1,543.5 1,807.1 2,114.3 1,956.1 2,026.1 2,114.3 2,163.8 2,199.9 2,252.9 2,336.7 77 Federally related mortgage pools 2,018.4 2,292.2 2,491.6 2,830.1 2,635.7 2,758.8 2,830.1 2,955.1 3,041.6 3,084.5 3,158.3 78 Asset-backed securities (ABSs) issuers 1,219.4 1,413.6 1,585.4 1,876.8 1,696.6 1,772.1 1,876.8 1,928.9 1,985.3 2,031.5 2,118.1 79 Finance companies 645.5 742.5 850.5 844.8 878.5 859.5 844.8 832.4 845.6 857.1 862.4 30 Mortgage companies 35.3 35.6 35.9 37.2 36.5 36.9 37.2 37.6 38.0 38.3 38.7 31 Real estate investment trusts (REITs) 45.5 42.9 36.6 43.3 37.9 39.8 43.3 49.9 57.9 64.8 66.8 37 Brokers and dealers 189.4 154.7 223.6 316.0 288.4 366.4 316.0 299.6 352.6 335.2 346.6 33 Funding corporations 152.3 276.0 317.0 206.3 239.5 188.8 206.3 210.3 185.4 224.1 166.1 RELATION OF LIABILITIES TO FINANCIAL ASSETS 3344 2233,,443377..11 25,602.0 2277,,334488..66 2299,,339933..66 2288,,117777..55 2288,,774400..11 2299,,339933..66 2299,,884499..33 3300,,337788..55 3300,,990077..11 3311,,770022..22 Other liabilities 35 Official foreign exchange 60.1 50.1 46.1 46.8 43.4 49.0 46.8 45.7 47.2 53.1 55.8 36 Special drawing rights certificates 9.2 6.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 37 Treasury currency 19.9 20.9 23.2 24.5 23.9 24.5 24.5 24.7 24.8 25.5 25.5 38 Foreign deposits 642.3 703.6 824.5 908.9 837.6 848.0 908.9 894.1 907.4 924.6 955.2 39 Net interbank liabilities 189.4 202.4 221.2 187.7 158.7 166.5 187.7 161.1 130.6 149.0 191.3 40 Checkable deposits and currency 1,333.3 1,484.5 1,413.1 1,603.2 1,449.6 1,487.1 1,603.2 1,525.2 1,571.0 1,610.7 1,648.6 41 Small time and savings deposits 2,626.5 2,671.6 2,860.4 3,127.6 2,992.4 3,047.6 3,127.6 3,229.6 3,257.6 3,339.0 3,404.9 47 Large time deposits 805.3 936.4 1,052.6 1,121.1 1,087.3 1,094.2 1,121.1 1,178.9 1,188.7 1,197.7 1,176.8 43 Money market fund shares 1,329.7 1,578.8 1,812.1 2,240.7 2,014.7 2,115.4 2,240.7 2,202.6 2,150.3 2,105.9 2,223.9 44 Security repurchase agreements 913.8 1,083.6 1,196.8 1,231.8 1,205.4 1,251.9 1,231.8 1,262.4 1,343.1 1,313.7 1,325.2 45 Mutual fund shares 3,613.1 4,538.5 4,434.6 4,135.5 4,259.5 3,753.1 4,135.5 4,247.0 3,926.6 3,452.3 3,634.6 46 Security credit 572.2 676.6 822.7 825.9 781.5 919.9 825.9 778.0 745.6 726.3 724.5 47 Life insurance reserves 718.3 783.9 819.1 880.0 840.3 844.0 880.0 904.2 915.2 927.9 958.4 48 Pension fund reserves 8,208.4 9,065.3 9,069.0 8,693.4 8,862.6 8,281.0 8,693.4 8,822.2 8,328.1 7,732.4 8,053.3 49 Trade payables 2,073.8 2,342.4 2,767.9 2,700.6 2,756.4 2,725.7 2,700.6 2,724.3 2,721.6 2,779.2 2,815.4 50 Taxes payable 170.7 201.4 234.2 251.7 241.2 270.1 251.7 258.9 265.0 279.6 280.7 51 Investment in bank personal trusts 1,001.0 1,130.4 1,095.8 960.7 1,024.6 916.5 960.7 963.2 893.5 811.6 840.9 52 Miscellaneous 7,617.2 8,499.5 9,717.2 10,505.4 10,491.8 10,919.8 10,505.4 10,539.1 10,829.7 11,304.4 11,394.1 53 Total liabilities 55,341.1 61,578.0 65,761.2 68,841.3 67,250.6 67,456.6 68,841.3 69,612.6 69,626.9 69,642.2 71,413.3 Financial assets not included in liabilities (+) 54 Gold and special drawing rights 21.6 21.4 21.6 21.8 21.5 22.0 21.8 21.9 22.3 22.8 23.2 55 Corporate equities 15,577.3 19,581.2 17,611.9 15,245.5 16,281.6 13,673.4 15,245.5 15,264.1 13,363.0 10,960.1 11,734.5 56 Household equity in noncorporate business 4,285.7 4,523.1 4,753.2 4,837.2 4,817.0 4,865.2 4,837.2 4,864.4 4,933.7 4,983.6 5,021.8 Liabilities not identified as assets (—) 57 Treasury currency -6.4 -7.1 -8.5 -8.6 -8.8 -8.6 -8.6 -8.9 -9.1 -8.9 -9.1 58 Foreign deposits 542.8 585.7 627.4 694.9 631.6 645.4 694.9 686.5 710.2 722.9 751.7 59 Net interbank transactions -26.5 -28.5 -4.3 11.1 3.8 4.5 11.1 21.9 18.4 16.5 14.9 60 Security repurchase agreements 230.6 266.4 388.9 348.5 379.4 398.7 348.5 401.6 463.3 381.6 366.5 61 Taxes payable 121.2 129.4 146.3 121.8 150.5 167.3 121.8 109.9 162.8 152.8 156.8 62 Miscellaneous -1,972.7 -2,427.9 -2,902.8 -3,147.0 -2,806.3 -2,643.0 -3,147.0 -3,105.7 -3,140.6 -3,033.6 -3,036.1 Floats not included in assets (—) 63 Federal government checkable deposits -3.9 -9.8 -2.3 -12.3 -3.6 -4.0 -12.3 -9.6 -9.3 -14.8 -11.7 64 Other checkable deposits 23.1 22.3 24.0 28.6 25.5 19.2 28.6 26.3 31.4 25.8 35.9 65 Trade credit 84.8 95.6 128.0 140.5 61.8 52.0 140.5 85.7 33.0 25.5 91.6 66 Totals identified to sectors as assets 76,232.7 87,077.5 89,751.1 90,768.3 89,936.9 87,385.5 90,768.3 91,555.1 89,685.8 87,340.6 89,832.3 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 • May 2003 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 2002 2002 2002 Q1 Q2 Q3 Q4r Ql Q2 Q3 Q4 Ql Q2 Q3 Q4r Output (1997=100) Capacity (percent of 1997 output) Capacity utilization rate (percent)2 1 Total industry 109.3 110.5 111.4 110.5 145.4 145.9 146.2 146.6 75.1 75.7 76.2 75.4 2 Manufacturing 110.5 111.4 112.3 111.3 150.5 150.9 151.1 151.4 73.4 73.9 74.3 73.5 3 Manufacturing (NAICS) 110.8 111.8 112.6 111.6 151.8 152.2 152.5 152.8 73.0 73.5 73.8 73.0 4 Durable manufacturing 119.7 121.2 122.3 121.5 171.5 172.5 173.4 174.2 69.8 70.2 70.5 69.8 5 Primary metal 84.9 85.6 85.9 86.0 112.7 112.0 111.4 110.8 75.3 76.4 77.1 77.6 6 Fabricated metal products 98.0 99.1 99.5 99.1 139.0 139.3 139.4 139.6 70.5 71.2 71.3 71.0 7 Machinery 87.5 88.6 88.7 86.7 129.9 129.9 129.9 129.9 67.3 68.2 68.3 66.7 8 Computer and electronic products 216.2 219.6 222.6 224.3 344.0 350.1 355.4 360.3 62.9 62.7 62.6 62.3 9 Electrical equipment, appliances. and components 97.6 98.3 97.7 97.2 129.6 129.1 128.6 128.2 75.3 76.1 75.9 75.8 10 Motor vehicles and parts 112.8 116.8 121.7 120.0 144.9 145.9 147.1 148.4 77.9 80.0 82.7 80.9 11 Aerospace and miscellaneous transportation equipment 90.8 87.6 85.9 85.1 145.7 145.5 145.3 145.1 62.3 60.2 59.1 58.6 12 Nondurable manufacturing 99.1 99.7 100.1 98.9 127.9 127.7 127.5 127.3 77.5 78.1 78.5 77.7 13 Food, beverage, and tobacco products .... 100.8 100.8 100.1 98.8 125.9 125.8 125.7 125.6 80.1 80.2 79.7 78.7 14 Textile and product mills 82.1 83.3 82.9 81.3 112.8 112.3 111.7 111.1 72.8 74.2 74.2 73.2 15 Paper 91.7 94.2 95.7 96.7 114.5 114.2 114.0 113.8 80.1 82.5 84.0 85.0 16 Petroleum and coal products 103.3 103.3 102.3 102.8 114.7 114.9 115.2 115.7 90.1 89.9 88.7 88.9 17 Chemical 104.9 105.3 106.4 104.1 141.0 141.2 141.2 141.3 74.4 74.6 75.3 73.7 18 Plastics and rubber products 103.6 106.6 107.3 105.6 134.8 134.2 133.6 132.9 76.9 79.4 80.4 79.4 19 Other manufacturing (non-NAICS) 105.2 104.6 106.0 105.9 131.1 130.3 129.5 128.7 80.3 80.3 81.8 82.3 20 Mining 94.0 93.4 93.5 93.8 110.3 110.2 110.1 110.2 85.2 84.8 84.9 85.1 21 Electric and gas utilities 105.6 110.2 112.5 111.5 123.5 125.5 127.6 129.7 85.5 87.8 88.2 86.0 MEMOS 22 Computers, communications equipment, and semiconductors 282.2 290.3 295.5 300.3 456.8 466.7 475.3 483.3 61.8 62.2 62.2 62.1 23 Total excluding computers, communications equipment, and semiconductors 99.6 100.6 101.3 100.4 130.3 130.4 130.5 130.6 76.5 77.1 77.6 76.8 24 Manufacturing excluding computers, communications equipment, and semiconductors 99.2 99.9 100.5 99.5 132.7 132.6 132.6 132.6 74.8 75.3 75.8 75.1 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 cycle3 Latest cycle4 2002 2002 2003 SSeerriieess High Low High Low High Low Feb. Sept. Oct. Nov.r Dec.' Jan.' Feb.? Capacity utilization rate (percent)2 1 Total industry 88.8 74.0 86.6 70.8 85.1 78.6 75.1 76.0 75.5 75.6 75.1 75.6 75.6 2 Manufacturing 88.0 71.6 86.3 68.6 85.5 77.2 73.4 74.1 73.7 73.7 73.2 73.6 73.4 3 Manufacturing (NAICS) 88.1 71.4 86.3 67.9 85.5 77.0 73.0 73.6 73.1 73.3 72.7 73.0 72.9 4 Durable manufacturing 88.9 69.6 87.0 63.1 84.5 73.4 69.8 70.2 69.9 70.2 69.2 70.0 69.6 5 Primary metal 100.9 68.9 91.3 47.2 95.3 75.2 75.7 76.5 78.9 77.8 76.1 77.1 76.0 6 Fabricated metal products .... 91.8 69.6 83.1 61.7 80.1 71.0 70.6 71.2 71.5 70.7 70.8 70.9 70.3 7 Machinery 94.2 74.2 92.8 58.3 84.7 72.9 67.2 67.9 66.8 67.3 66.1 66.7 67.0 8 Computer and electronic products 87.0 66.9 89.8 77.3 81.5 76.4 62.6 62.5 62.5 62.3 61.9 62.5 62.9 9 Electrical equipment, appliances, and components 99.3 68.5 91.9 64.4 87.5 75.0 75.4 75.1 75.3 75.6 76.5 75.9 76.5 10 Motor vehicles and parts 95.3 55.3 96.2 45.2 90.0 56.6 78.3 82.1 80.0 83.5 79.1 82.4 80.1 11 Aerospace and miscellaneous transportation equipment. 75.0 66.3 84.6 69.8 88.9 81.9 62.4 59.0 58.9 58.4 58.5 58.9 58.6 12 Nondurable manufacturing 87.5 72.5 85.7 75.6 86.9 81.8 77.4 78.4 77.8 77.7 77.5 77.4 77.5 13 Food, beverage, and tobacco products 85.9 78.0 84.3 80.2 85.5 81.3 80.1 79.5 79.2 78.5 78.3 78.6 78.2 14 Textile and product mills .... 89.8 62.8 90.1 72.3 91.1 77.1 72.5 73.8 73.0 73.5 73.0 72.0 72.5 15 Paper 97.4 74.7 95.6 81.3 94.0 85.4 80.2 84.4 84.1 85.1 85.7 83.0 84.0 16 Petroleum and coal products . . 93.2 81.0 92.3 71.1 88.9 82.5 90.7 87.6 86.1 89.8 90.7 88.1 88.4 17 Chemical 85.0 68.9 83.0 67.9 85.6 80.8 74.1 75.1 74.1 73.8 73.3 73.3 73.7 18 Plastics and rubber products . . 96.3 61.6 90.5 70.5 91.2 77.1 76.6 80.4 79.9 79.6 78.8 79.2 79.4 19 Other manufacturing (non-NAICS). 85.7 75.7 88.1 85.7 90.2 79.1 80.0 82.8 82.7 81.9 82.3 82.6 83.2 20 Mining 93.6 87.6 94.2 78.6 85.6 83.3 85.4 83.8 83.9 85.0 86.6 85.0 85.8 21 Electric and gas utilities 96.2 82.7 87.9 77.2 92.6 84.2 85.2 88.4 86.9 86.4 84.8 87.8 88.5 MEMOS 22 Computers, communications equipment, and semiconductors . 84.5 63.1 89.9 75.6 80.4 74.6 61.6 62.0 62.3 62.4 6611..66 62.3 6633..11 23 Total excluding computers, communications equipment, and semiconductors 89.1 74.3 86.6 70.5 85.5 78.8 76.4 77.5 76.9 77.0 76.5 77.0 77.0 24 Manufacturing excluding computers communications equipment, and semiconductors . 88.3 71.9 86.3 68.1 86.1 77.3 74.8 75.7 75.2 75.3 74.7 75.1 74.9 Note. The statistics in the G.17 release cover output, capacity, and capacity utilization in the data are also available on the Board's web site http://www.federalreserve.gov/releases/gl7. industrial sector, which the Federal Reserve defines are manufacturing, mining, and electric The latest historical revision of the industrial production index and the capacity utilization and gas utilities. Manufacturing consists of those industries included in the North American rates was released in December 2002. The recent annual revision is described in the April Industry Classification System, or NAICS, manufacturing plus those industries—logging and 2003 issue of the Bulletin. newspaper, periodical, book, and directory publishing—that have traditionally been consid- 2. Capacity utilization is calculated as the ratio of the Federal Reserve's seasonally ered manufacturing and included in the industrial sector. adjusted index of industrial production to the corresponding index of capacity. 1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. The 3. Monthly highs, 1978-80; monthly lows, 1982. 4. Monthly highs, 1988-89; monthly lows, 1990-91. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Nonfinancial Statistics • May 2003 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data seasonally adjusted _ 1992 2002 2003 Group p p r o o r - - 2 a 0 v 0 g 2 . tion Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov.r Dec.' Jan.' Feb.f Index(1997= 100) MAJOR MARKETS 1 Total IP 100.0 110.5 109.2 109.6 110.1 110.4 110.8 111.6 111.3 111.2 110.6 110.8 110.1 111.0 111.1 Market groups 2 Final products and nonindustrial supplies 60.8 109.3 108.5 108.9 109.1 109.3 109.6 110.1 109.8 109.8 109.1 109.3 108.3 109.3 109.3 3 Consumer goods 29.0 107.5 106.7 107.4 107.5 107.3 107.8 108.5 107.8 107.9 107.0 107.8 106.7 107.8 107.5 4 Durable 5.8 117.3 115.3 115.7 116.5 117.2 118.6 120.0 119.3 118.7 117.0 121.0 117.8 120.5 118.7 5 Automotive products 2.5 125.4 121.3 121.7 123.8 124.2 127.4 130.6 130.6 129.3 125.9 132.4 125.9 131.3 128.4 6 Home electronics 0.4 142.9 153.1 150.2 139.9 143.8 135.3 137.0 135.4 142.6 140.1 142.1 145.3 144.1 143.2 7 Appliances, furniture, carpeting 1.3 106.9 107.9 108.1 108.2 109.1 107.5 106.9 104.5 104.6 104.9 107.1 107.8 105.9 106.4 8 Miscellaneous goods 1.6 98.5 97.1 98.2 98.1 98.9 100.2 99.2 98.3 97.8 98.2 98.3 98.7 99.3 98.2 9 Nondurable 23.2 104.1 103.6 104.4 104.4 103.9 104.1 104.6 103.8 104.2 103.6 103.3 102.9 103.5 103.6 10 Non-energy 20.2 102.6 103.0 103.5 102.8 102.2 102.8 102.8 102.4 102.6 102.0 101.3 100.9 101.2 101.1 11 Foods and tobacco 10.4 99.5 100.2 100.8 100.4 100.0 100.2 99.8 99.2 99.1 98.7 97.9 97.4 97.9 97.2 12 Clothing 2.4 72.4 72.7 74.4 72.7 72.9 72.9 73.2 71.3 72.1 70.2 70.6 70.0 70.0 69.7 13 Chemical products 4.6 119.1 119.9 120.1 118.5 116.8 118.3 119.5 119.0 119.5 118.3 118.0 117.1 117.0 117.6 14 Paper products 2.9 108.1 106.6 107.2 106.0 106.2 107.2 107.1 108.4 109.8 110.0 108.8 109.1 109.8 110.8 15 Energy 3.0 112.0 107.1 109.4 112.8 112.5 110.9 114.0 111.6 112.8 111.8 114.0 113.3 115.6 116.9 16 Business equipment 13.2 107.3 108.1 107.8 107.7 108.0 108.0 107.3 108.1 106.9 106.0 106.1 104.7 105.6 105.6 17 Transit 2.5 81.2 86.9 84.8 83.2 82.0 81.1 80.2 81.1 79.7 77.3 77.9 75.0 75.2 74.1 18 Information processing 5.4 153.8 154.3 155.5 154.7 154.9 154.9 153.5 153.7 152.1 153.1 152.8 152.6 155.9 156.2 19 Industrial and other 5.3 91.5 90.5 90.3 91.1 91.9 92.2 92.0 92.9 92.0 91.2 91.1 90.0 90.3 90.6 20 Defense and space equipment 3.4 101.2 99.7 99.8 99.9 100.6 101.2 101.2 101.9 102.0 102.5 101.7 102.3 104.0 104.2 21 Construction supplies 5.4 104.0 103.1 104.0 104.0 104.6 104.5 104.4 104.8 104.5 104.2 103.8 102.8 103.0 102.8 22 Business supplies 9.1 121.9 119.4 119.7 120.7 121.5 121.8 123.2 122.6 123.6 123.1 122.5 122.0 123.5 124.4 23 Materials 39.2 112.2 110.2 110.7 111.6 112.2 112.6 113.8 113.6 113.4 112.8 113.1 112.8 113.4 113.8 24 Non-energy 29.6 115.8 113.7 114.0 115.0 115.8 116.4 117.2 117.4 117.2 116.7 116.7 116.2 116.8 116.8 25 Durable 20.7 128.1 125.6 125.8 127.1 127.8 128.6 129.4 130.0 129.5 129.5 129.7 128.5 130.2 130.1 26 Consumer parts 4.0 110.9 109.2 109.2 110.8 110.1 110.4 113.4 112.3 112.4 111.7 114.6 111.5 115.0 113.0 27 Equipment parts 7.5 182.7 177.6 177.6 179.8 182.3 183.6 184.2 186.3 185.7 185.7 185.3 184.6 186.6 189.1 28 Other 9.2 97.1 95.9 96.0 96.7 97.2 97.9 97.7 98.3 97.7 98.0 97.2 96.9 97.4 97.1 29 Nondurable 8.9 97.0 95.4 95.9 96.5 97.3 97.6 98.4 98.2 98.3 97.1 97.0 97.3 96.4 96.8 30 Textile 1.1 77.6 76.3 77.7 77.8 78.2 78.5 79.6 77.8 78.4 77.2 77.0 75.6 75.8 75.8 31 Paper 1.8 95.0 92.6 91.9 93.3 94.8 93.6 95.8 96.1 96.7 96.8 96.9 98.7 96.1 96.8 32 Chemical 4.0 99.1 97.2 98.8 99.6 100.4 100.6 101.3 100.7 100.2 98.2 97.9 97.4 97.2 97.7 33 Energy 9.6 98.7 97.1 97.9 98.6 98.5 98.6 101.0 99.3 99.1 98.4 99.4 99.7 100.5 101.8 SPECIAL AGGREGATES 34 Total excluding computers, communication equipment, and semiconductors 94.7 100.5 99.6 99.9 100.3 100.5 100.8 101.5 101.2 101.2 100.5 100.6 100.0 100.7 100.7 35 Total excluding motor vehicles and parts 94.3 110.0 108.9 109.4 109.7 110.1 110.3 110.8 110.5 110.5 110.0 109.8 109.6 110.1 110.4 Gross value (billions of 1996 dollars, annual rates) 36 Final products and nonindustrial supplies 100.0 2,793.3 2,774.9 2,787.1 2,796.7 2,802.2 2,809.9 2,828.0 2,821.5 2,817.8 2,793.6 2,817.8 2,785.7 2,812.0 2,808.1 37 Final products 77.2 2,018.6 2,006.4 2,013.9 2,020.7 2,021.4 2,028.7 2,042.2 2,038.1 2,031.4 2,010.8 2,037.3 2,011.2 2,031.1 2,024.2 38 Consumer goods 51.9 1,384.7 1,371.5 1,380.1 1,386.3 1,384.8 1,390.2 1,404.1 1,395.9 1,394.3 1,379.1 1,402.0 1,384.5 1,399.1 1,392.6 39 Equipment total 25.3 624.9 627.5 625.4 625.3 628.1 629.9 627.9 633.6 627.7 622.6 624.4 615.9 620.7 621.0 40 Nonindustrial supplies 22.8 774.6 768.5 773.2 776.1 780.9 781.3 785.9 783.5 786.6 783.2 780.5 774.6 781.0 784.1 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 2002 2003 NAICS pro- 2002 GGrroouupp code2 por- avg. tion Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov.1" Dec.r Jan.r Feb/ Index(1997= 100) INDUSTRY GROUPS 41 Manufacturing 85.4 111.4 110.4 110.7 111.0 111.4 111.9 112.3 112.4 112.1 111.4 111.6 110.8 111.5 111.4 42 Manufacturing (NAICS) 79.1 111.7 110.8 111.0 111.4 111.9 112.2 112.7 112.8 112.4 111.7 112.0 111.1 111.8 111.7 43 Durable manufacturing 43.0 121.1 119.8 119.8 120.5 121.2 121.8 122.2 122.7 122.0 121.5 122.2 120.7 122.3 121.9 44 Wood products ' ' 321 1.5 100.5 99.9 101.7 100.8 101.0 102.2 101.9 102.5 100.7 99.2 98.3 96.7 99.4 98.2 45 Nonmetallic mineral products 327 2.0 108.0 106.4 106.6 107.4 107.7 106.6 107.7 108.5 109.8 109.3 110.2 109.2 109.3 109.7 46 Primary metal 331 2.7 85.6 85.3 85.1 84.6 85.9 86.2 85.0 87.6 85.0 87.6 86.2 84.2 85.2 84.1 47 Fabricated metal products . 332 5.3 99.0 98.2 98.2 98.4 99.7 99.3 99.7 99.3 99.4 99.8 98.7 98.9 99.1 98.3 48 Machinery 333 5.7 87.9 87.3 88.0 88.3 88.5 88.9 88.4 89.4 88.2 86.8 87.4 85.8 86.6 87.0 49 Computer and electronic products 334 8.8 220.4 215.5 216.9 217.9 220.0 220.8 221.5 223.0 223.2 224.2 224.5 224.1 227.5 230.4 50 Electrical equipment, appliances, and components 335 2.5 97.8 97.7 96.8 97.2 98.9 98.7 98.4 98.0 96.5 96.6 97.0 98.0 97.2 9988..00 51 Motor vehicles and parts .. 3361-3 5.7 117.3 113.4 113.3 115.9 115.8 118.6 122.1 122.0 121.1 118.3 123.9 117.8 123.1 120.2 52 Aerospace and miscellaneous transportation equipment 3364-9 4.5 87.6 90.9 89.5 88.3 87.6 86.9 85.7 86.3 85.7 85.5 84.8 84.9 85.5 8855..00 53 Furniture and related products 337 1.5 101.3 102.6 101.7 101.8 101.5 101.6 101.4 100.5 101.4 100.7 100.6 99.3 99.0 99.3 54 Miscellaneous 339 2.8 109.6 107.8 107.4 109.6 110.2 110.7 110.6 110.2 109.1 109.3 108.6 110.1 109.2 109.0 55 Nondurable manufacturing . . 36.1 99.5 99.0 99.5 99.5 99.7 99.9 100.4 100.0 100.0 99.1 98.9 98.7 98.5 98.6 56 Food, beverage, and tobacco products .... 311,2 10.9 100.2 100.8 101.4 101.0 100.6 100.9 100.5 100.0 99.9 99.5 98.6 98.3 98.7 98.1 57 Textile and product mills .. 313,4 1.8 82.5 81.8 83.0 82.9 83.6 83.4 83.9 82.5 82.3 81.3 81.7 81.0 79.7 80.2 58 Apparel and leather 315,6 2.2 72.2 72.5 74.1 72.5 72.7 72.6 73.0 71.2 71.8 70.2 70.5 69.8 69.9 69.6 59 Paper 322 3.3 94.6 91.8 91.6 93.0 95.0 94.7 95.2 95.8 96.1 95.7 96.8 97.5 94.4 95.5 60 Printing and support 323 2.8 97.8 96.9 95.2 95.5 96.2 95.5 98.4 98.6 99.9 99.5 98.4 99.6 101.1 101.1 61 Petroleum and coal products 324 1.4 102.9 104.0 103.5 104.2 103.4 102.4 103.0 102.7 101.0 99.4 103.9 105.0 102.1 102.7 62 Chemical 325 10.3 105.1 104.6 105.2 105.1 105.0 105.7 106.9 106.2 106.1 104.6 104.2 103.6 103.6 104.3 63 Plastics and rubber products 326 3.4 106.0 103.3 105.1 105.7 106.7 107.4 107.5 107.3 107.2 106.4 105.8 104.6 105.1 105.2 64 Other manufacturing (non-NAICS) 1133,5111 4.3 105.5 104.9 105.0 104.1 104.2 105.5 105.0 105.8 107.1 106.7 105.4 105.7 106.1 106.8 65 Mining 21 6.6 93.8 94.2 93.6 93.4 93.4 93.5 94.4 93.9 92.2 92.3 93.6 95.4 93.7 94.6 66 Utilities 2211,2 10.1 110.2 105.2 108.0 110.6 110.1 110.1 113.7 110.4 113.3 112.1 112.1 110.5 114.9 116.4 67 Electric 2211 8.6 111.8 107.1 110.1 112.5 111.2 111.4 115.7 112.2 115.8 113.7 113.3 112.2 116.8 118.1 68 Natural gas 2212 1.6 97.5 95.0 96.9 100.2 104.4 103.2 102.7 100.8 99.9 103.6 105.8 101.6 105.1 107.4 69 Manufacturing excluding computers, communications equipment, and semiconductors 78.0 99.8 99.2 99.4 99.5 99.9 100.2 100.6 100.6 100.4 99.7 99.8 9999..11 99.6 9999..44 70 Manufacturing excluding motor vehicles and parts 77.6 110.9 110.2 110.5 110.5 111.0 111.3 111.4 111.5 111.3 110.8 110.5 111100..22 110.5 111100..66 Note. The statistics in the G. 17 release cover output, capacity, and capacity utilization in the 1. Data in this table appear in the Board's G.17 (419) monthly statistical release. The data industrial sector, which the Federal Reserve defines are manufacturing, mining, and electric are also available on the Board's web site http://www.federalreserve.gov/releases/gl7. The and gas utilities. Manufacturing consists of those industries included in the North American latest historical revision of the industrial production index and the capacity utilization rates Industry Classification System, or NAICS, manufacturing plus those industries—logging and was released in December 2002. The recent annual revision is described in the April 2003 newspaper, periodical, book, and directory publishing—that have traditionally been consid- issue of the Bulletin. ered manufacturing and included in the industrial sector. 2. North American Industry Classification System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 International Statistics • May 2003 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted except as noted1 2001 2002 IItteemm ccrreeddiittss oorr ddeebbiittss 22000000 22000011 22000022 Q4 Ql Q2 Q3 Q4P 1 Balance on current account ^110,341 -393,371 -503,427 -95,086 -112,542 -127,697 -126,337 -136,854 2 Balance on goods and services -378,681 -358,290 ^135,542 -88,028 -95,629 -109,446 -110,257 -120,213 3 Exports 1,064,239 998,022 971,864 232,930 232,959 244,251 248,917 245,740 4 Imports -1,442,920 -1,356,312 -1,407,406 -320,958 -328,588 -353,697 -359,174 -365,953 5 Income, net 21,782 14,382 -11,862 6,521 -982 -5,324 -3,007 -2,553 6 Investment, net 27,651 20,539 -5,424 8,102 636 -3,675 -1,462 -927 7 Direct 88,862 102,595 77,947 28,602 22,023 18,749 18,626 18,548 8 Portfolio -61,211 -82,056 -83,371 -20,500 -21,387 -22,424 -20,088 -19,475 9 Compensation of employees -5,869 -6,157 -6,438 -1,581 -1,618 -1,649 -1,545 -1,626 10 Unilateral current transfers, net -53,442 -49,463 -56,023 -13,579 -15,931 -12,927 -13,073 -14,088 11 Change in U.S. government assets other than official reserve assets, net (increase, -) -941 ^t86 379 143 133 42 -27 231 12 Change in U.S. official reserve assets (increase, -) -290 -4,911 -3,681 -199 390 -1,843 -1,416 -812 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -722 -630 -475 -140 -109 -107 -132 -127 15 Reserve position in International Monetary Fund 2,308 -3,600 -2,632 83 652 -1,607 -1,136 -541 16 Foreign currencies -1,876 -681 -574 -142 -153 -129 -148 -144 17 Change in U.S. private assets abroad (increase, -) -605,258 -365,565 -152,867 -100,032 -26,707 -129,544 41,714 -38,334 18 Bank-reported claims2 -148,657 -128,705 -3,072 -83,682 727 -68,655 53,815 11,041 19 Nonbank-reported claims -150,805 -14,358 -28,489 37,210 65 -16,693 -4,226 -7,635 20 U.S. purchase of foreign securities, net -127,502 -94,662 2,222 -26,090 2,047 -9,675 18,543 -8,693 21 U.S. direct investments abroad, net -178,294 -127,840 -123,528 -27,470 -29,546 -34,521 -26,418 -33,047 22 Change in foreign official assets in United States (increase, +) 37,640 5,224 96,630 5,086 7,641 47,252 9,534 32,203 23 U.S. Treasury securities -10,233 10,745 43,656 16,760 -582 15,193 1,415 27,630 24 Other U.S. government obligations 40,909 20,920 30,357 7,630 7,296 6,548 10,885 5,628 25 Other U.S. government liabilities2 -1,909 -1,882 158 -504 -790 54 1,001 -107 26 Other U.S. liabilities reported by U.S. banks2 5,746 -30,278 18,831 -20,507 991 24,531 ^1,602 -2,089 27 Other foreign official assets3 3,127 5,719 3,628 1,707 726 926 835 1,141 28 Change in foreign private assets in United States (increase, +) 978,346 747,582 533,734 245,711 105,959 157,159 119,786 150,827 29 U.S. bank-reported liabilities4 116,971 110,667 94,605 85,598 -11,051 32,240 18,793 54,623 30 U.S. nonbank-reported liabilities 174,251 82,353 49,736 1,170 32,345 21,056 -3,804 139 31 Foreign private purchases of U.S. Treasury securities, net -76,965 -7,670 53,155 27,229 -7,282 -5,124 52,856 12,705 32 U.S. currency flows 1,129 23,783 21,513 10,497 4,525 7,183 2,556 7,249 33 Foreign purchases of other U.S. securities, net 455,213 407,653 284,611 99,320 71,095 104,404 46,494 62,618 34 Foreign direct investments in United States, net 307,747 130,796 30,114 21,897 16,327 -2,600 2,891 13,493 35 Capital account transactions, net5 837 826 708 205 208 200 156 144 36 Discrepancy 7 10,701 28,524 -55,828 24,918 54,431 -43,410 -7,405 37 Due to seasonal adjustment 1,721 10,269 1,504 -13,991 2,228 38 Before seasonal adjustment 7 10,701 28,524 -57,549 14,649 52,927 -29,419 -9,633 MEMO Changes in official assets 39 U.S. official reserve assets (increase, -) -290 -4,911 -3,681 -199 390 -1,843 --11,,441166 --881122 40 Foreign official assets in United States, excluding line 25 (increase, +) 39,549 7,106 96,472 5,590 8,431 47,198 8,533 32,310 41 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) 12,000 -1,725 -8,132 3,382 -8,532 838 -1,289 851 1. Seasonal factors are not calculated for lines 11-16, 18-20, 22-35, and 38^41. 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 2003 AAsssseett 11999999 22000000 22000011 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.P 1 Total 71,516 67,647 68,654 75,307 75,860 75,499 75,690 79,006 78,434 78,579 80,049 2 Gold stock1 11,048 11,046 11,045 11,042 11,042 11,042 11,043 11,043 11,043 11,043 11,043 3 Special drawing rights23 10,336 10,539 10,774 11,752 11,710 11,700 11,855 12,166 11,298 11,368 11,392 4 Reserve position in International Monetary Fund2 17,950 14,824 17,854 20,043 20,857 20,586 20,480 21,979 21,953 21,686 22,858 5 Foreign currencies4 32,182 31,238 28,981 32,470 32,251 32,171 32,312 33,818 34,140 34,482 34,756 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 2003 AAsssseett 11999999 22000000 22000011 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.p 1 Deposits 71 215 61 86 150 89 78 136 102 224 254 Held in custody 2 U.S. Treasury securities2 632,482 594,094 592,630 638,003 644,381 647,165 669,092 678,106 683,837 700,341 710,955 3 Earmarked gold3 9,933 9,451 9,099 9,064 9,057 9,050 9,045 9,045 9,045 9,045 9,045 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 • May 2003 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 2002 2003 IItteemm 22000000rr 22000011rr Julyr Aug.r Sept. Oct. Nov. Dec. Jan.? 1 Total1 975,304 987,568 1,046,327 1,048,990 1,050,056 1,048,005 1,069,610 1,082,363 1,087,200 By type 2 Liabilities reported by banks in the United States2 144,593 123,425 141,870 138,281 143,028 136,637 138,414 140,935 136,962 3 U.S. Treasury bills and certificates3 153,010 161,719 187,997 188,805 185,187 188,474 190,111 190,375 194,762 U.S. Treasury bonds and notes 4 Marketable 450,832 454,306 449,736 450,371 446,860 446,307 462,884 469,592 468,956 5 Nonmarketable4 5,348 3,411 3,020 3,040 3,058 3,078 3,097 2,769 2,786 6 U.S. securities other than U.S. Treasury securities5 221,521 244,707 263,704 268,493 271,923 273,509 275,104 278,692 283,734 By area 7 Europe1 240,325 243,448 256,529 255,235 260,423 254,343 265,751 273,052 270,065 8 Canada 13,727 13,440 10,682 10,886 10,097 10,300 10,975 11,079 10,455 9 Latin America and Caribbean 70,442 71,103 62,863 62,026 62,227 64,289 63,002 63,244 62,016 10 Asia 626,017 635,180 690,405 693,752 690,902 692,351 701,172 706,287 718,275 11 Africa 14,690 15,167 15,233 15,257 14,514 15,524 15,602 15,338 14,589 12 Other countries 10,101 9,228 10,613 11,832 11,891 11,196 13,106 13,361 11,798 1. Includes the Bank for International Settlements. 5. Debt securities of U.S. government corporations and federally sponsored agencies, and 2. Principally demand deposits, time deposits, bankers acceptances, commercial paper, U.S. corporate stocks and bonds. negotiable time certificates of deposit, and borrowings under repurchase agreements. SOURCE. Based on U.S. Department of the Treasury data and on data reported to the 3. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official Treasury by banks (including Federal Reserve Banks) and securities dealers in the United institutions of foreign countries. States, and in periodic benchmark surveys of foreign portfolio investment in the United 4. Excludes notes issued to foreign official nonreserve agencies. Includes current value of States. zero-coupon Treasury bond issues to foreign governments as follows: Mexico, beginning March 1990, 30-year maturity issue; Venezuela, beginning December 1990, 30-year maturity issue; Argentina, beginning April 1993, 30-year maturity issue. 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 2002 IItteemm 11999999 22000000 22000011 Mar. June' Sept.r Dec. 1 Banks' liabilities 88,537 77,779 79,363 74,955 89,823 81,719 80,541 2 Banks' claims 67,365 56,912 74,840 77,746 90,622 85,165 76,618 3 Deposits 34,426 23,315 44,094 46,778 51,860 44,511 33,085 4 Other claims 32,939 33,597 30,746 30,968 38,762 40,654 43,533 5 Claims of banks' domestic customers2 20,826 24,411 17,631 16,642 15,848 20,475 33,632 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 3.20 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 2002 2003 IItteemm 22000000 22000011 22000022 July Aug. Sept. Oct. Nov. Dec. Jan.p BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 1,511,410 1,636,538 1,818,537' 1,705,426 1,763,311 1,748,201 1,834,787 1,776,379 l,818,537r 1,764,072 7 Banks' own liabilities 1,077,636 1,181,097 1,274,247' 1,179,129 1,225,442 1,218,213 1,305,746 1,242,296 1.274,247' 1,221,152 3 Demand deposits 33,365 33,603 35,273' 32,558 31,428 32,027 31,607 35,051 35,273' 32,499 4 Time deposits2 187,883 158,139r 134,716' 128,215 128,345 123,330 131,119' 128,414' 134,716' 130,468 Other3 171,401 197,064' 251,787' 253,602 259,415 274,658 265,120' 258,584' 251,787' 272,384 6 Own foreign offices4 684,987 792,291 852,471' 764,754 806,254 788,198 877,900 820,247 852,471' 785,801 7 Banks' custodial liabilities5 433,774 455,441 544,290 526,297 537,869 529,988 529,041 534,083 544,290 542,920 8 U.S. Treasury bills and certificates6 177,846 186,115 229,511 224,429 227,338 224,733 223,569 226,302 229,511 231,363 9 Short-term agency securities7 n.a. 59,781 73,475 70,872 72,848 71,048 69,223 66,579 73,475 68,323 10 Other negotiable and readily transferable instruments8 145,840 80,026 90,673 88,061 90,697 90,986 91,288 90,332 90,673 92,892 11 Other 110,088 129,519 150,631 142,935 146,986 143,221 144,961 150,870 150,631 150,342 12 Nonmonetary international and regional organizations9 12,542 10,830 13,503 11,495 10,540 11,796 13,153 12,253 13,503 14,578 13 Banks' own liabilities 12,140 10,169 12,396 10,993 9,986 11,008 12,538 11,475 12,396 13,874 14 Demand deposits 41 35 44 15 34 52 61 42 44 37 11 Time deposits2 6,246 3,756 5,759' 7,394 6,294 5,702 6,201' 5,235' 5,759' 5,214 16 Other3 5,853 6,378 6,593' 3,584 3,658 5,254 6,276' 6,198' 6,593' 8,623 17 Banks' custodial liabilities5 402 661 1,107 502 554 788 615 778 1,107 704 18 US. Treasury bills and certificates6 252 600 1,089 481 532 764 597 760 1,089 687 19 Short-term agency securities7 n.a. 40 0 0 0 0 0 0 0 0 20 Other negotiable and readily transferable instruments8 149 21 18 21 22 18 18 18 18 17 21 Other 1 0 0 0 0 6 0 0 0 0 77 Official institutions10 297,603 285,144' 331,310' 329,867 327,086 328,215 325,111 328,525 331,310' 331,724 73 Banks' own liabilities 96,989 83,824' 90,738' 93,571 89,340 96,513 91,466 93,476 90,738' 90,681 74 Demand deposits 3,952 2,988 2,535 2,146 1,946 1,900 2,915 3,658 2,535 1,978 Time deposits2 35,573 19,68CF 17,583' 13,879 14,733 13,588 14,400' 13,521' 17,583' 14,653 26 Other3 57,464 61,156' 70,620' 77,546 72,661 81,025 74,151' 76,297' 70,620' 74,050 71 Banks' custodial liabilities5 200,614 201,320 240,572 236,296 237,746 231,702 233,645 235,049 240,572 241,043 28 U.S. Treasury bills and certificates6 153,010 161,719 190,375 187,997 188,805 185,187 188,474 190,111 190,375 194,762 2.9 Short-term agency securities7 n.a. 36,351 48,469 45,184 45,131 44,082 42,767 42,479 48,469 43,712 30 Other negotiable and readily transferable instruments8 47,366 2,180 1,664 2,281 2,615 1,489 1,624 1,658 1,664 1,573 31 Other 238 1,070 64 834 1,195 944 780 801 64 996 3? Banks" 972,932 1,053,084' 1,168,124' 1,059,823 1,100,445 1,086,278 1,186,464 1,129,198 1,168,124' 1,106,675 33 Banks' own liabilities 821,306 914,492' 973,235' 875,066 911,686 901,654 998,919 936,035 973,235' 911,924 34 Unaffiliated foreign banks 136,319 122,201' 120,764' 110,312 105,432 113,456 121,019 115,788 120,764' 126,123 35 Demand deposits 15,522 13,091 14,168 12,790 11,804 11,391 10,989 12,214 14,168 11,746 36 Time deposits2 66,904 55,565' 40,424' 34,871 36,120 33,605 38,333 39,190 40,424' 39,425 37 Other3 53,893 53,545' 66,172 62,651 57,508 68,460 71,697 64,384 66,172 74,952 38 Own foreign offices4 684,987 792,291 852,471' 764,754 806,254 788,198 877,900 820,247 852,471' 785,801 39 Banks' custodial liabilities5 151,626 138,592 194,889 184,757 188,759 184,624 187,545 193,163 194,889 194,751 40 U.S. Treasury bills and certificates6 16,023 11,541 21,308 20,087 20,463 20,079 19,253 18,887 21,308 20,240 41 Short-term agency securities7 n.a. 2,078 6,448 4,837 5,256 5,620 7,206 6,775 6,448 6,884 42 Other negotiable and readily transferable instruments8 36,036 21,981 40,722 41,468 41,954 41,694 41,433 41,414 40,722 42,124 43 Other 99,567 102,992 126,411 118,365 121,086 117,231 119,653 126,087 126,411 125,503 44 Other foreigners 228,333 287,480 305,600' 304,241 325,240 321,912 310,059 306,403 305,600' 311,095 45 Banks' own liabilities 147,201 172,612 197,878' 199,499 214,430 209,038 202,823 201,310 197,878' 204,673 46 Demand deposits 13,850 17,489 18,526' 17,607 17,644 18,684 17,642 19,137 18,526' 18,738 47 Time deposits2 79,160 79,138 70,950' 72,071 71,198 70,435 72,185 70,468 70,950' 71,176 48 Other3 54,191 75,985 108,402 109,821 125,588 119,919 112,996 111,705 108,402 114,759 49 Banks' custodial liabilities5 81,132 114,868 107,722 104,742 110,810 112,874 107,236 105,093 107,722 106,422 50 U.S. Treasury bills and certificates6 8,561 12,255 16,739 15,864 17,538 18,703 15,245 16,544 16,739 15,674 51 Short-term agency securities7 n.a. 21,312 18,558 20,851 22,461 21,346 19,250 17,325 18,558 17,727 52 Other negotiable and readily transferable instruments8 62,289 55,844 48,269 44,291 46,106 47,785 48,213 47,242 48,269 49,178 53 Other 10,282 25,457 24,156 23,736 24,705 25,040 24,528 23,982 24,156 23,843 MEMO 54 Negotiable time certificates of deposits in custody for foreigners 34,217 20,440 26,084 29,399 29,847 29,700 29,198 26,435 26,084 25,596 55 Repurchase agreements7 n.a. 151,143' 190,134' 190,092' 200,141' 213,172' 200,313' 190,283' 190,134' 207,282 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 • May 2003 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued Payable in US. dollars Millions of dollars, end of period 2002 2003 IItteemm 22000000 22000011 22000022 July Aug. Sept. Oct. Nov. Dec. Jan." AREA OR COUNTRY 56 Total, all foreigners 1,511,410 1,636,538 l,818,537r 1,705,426 1,763,311 1,748,201 1,834,787 1,776,379 l,818,537r 1,764,072 57 Foreign countries 1,498,867 1,625,708 l,805,034r 1,693,931 1,752,769 1,736,404 1,821,634 1,764,126 l,805,034r 1,749,494 58 Europe 446,788 521,331 627,556' 533,768 557,099 577,947 658,663 615,393 627,556' 564,559 59 Austria 2,692 2,922 2,473 2,862 3,537 3,081 3,053 2,442 2,473 2,186 60 Belgium12 33,399 6,557 8,611 6,462 6,270 8,389 7,420 8,032 8,611 8,812 61 Denmark 3,000 3,626 4,880 3,478 4,061 3,112 3,004 3,339 4,880 6,497 62 Finland 1,411 1,446 1,693 3,503 1,498 1,259 5,170 2,646 1,693 2,583 63 France 37,833 49,056 39,640 39,809 35,447 37,915 38,515 40,752 39,640 36,731 64 Germany 35,519 22,375 34,398 27,832 27,081 31,334 31,558 32,025 34,398 31,940 65 Greece 2,011 2,307 2,975 2,816 2,677 2,612 3,358 3,348 2,975 3,205 66 Italy 5,072 6,354 4,744 3.900 3,426 3,439 5,029 5,564 4,744 4,240 67 Luxembourg12 n.a. 16,894 28,626 24,294 25,436 25,750 25,680 27,747 28,626 30,538 68 Netherlands 7,047 12,411 10,722 6,012 8,208 7,650 7,974 7,922 10,722 10,560 69 Norway 2,305 3,727 18,867 14,540 10,049 17,747 18,895 14,677 18,867 17,723 70 Portugal 2,403 4,033 3,575 3,496 3,055 3,695 3,220 3,092 3,575 3,448 71 Russia 19,018 20,800 23,147 24,189 24,196 25,252 24,407 25,444 23,147 24,378 72 Spain 7,787 8,811 14,031 10,400 12,429 12,596 12,825 15,576 14,031 14,851 73 Sweden 6,497 3,375 4,656 4,815 5,709 4,137 4,857 3,859 4,656 3,767 74 Switzerland 74,635 66,403 131,506 85,614 102,088 105,386 182,152 141,208 131,506 105,352 75 Turkey 7,548 7,474 12,131 10,701 12,393 12,790 11,226 11,749 12,131 12,754 76 United Kingdom 167,757 204,396 181,890 176,397 184,152 183,756 184,483 182,109 181,890 168,423 77 Channel Islands and Isle of Man13 n.a. 36,059 45,728 39,432 38,215 38,982 40,070 38,935 45,728 26,327 78 Yugoslavia14 276 309 301 279 276 280 316 332 301 353 79 Other Europe and other former U.S.S.R.15 30,578 41,996 52,962' 42,937 46,896 48,785 45,451 44,595 52,962' 49,891 80 Canada 30,982 27,251 24,959' 26,629 24,887 24,946 26,570 24,278 24,959' 27,831 81 Latin America 120,041 118,025 107,139' 106,225 106,960 104,151 106,894 104,000 107,139' 106,100 82 Argentina 19,451 10,704 11,218 11,574 11,686 11,223 12,091 11,644 11,218 11,252 83 Brazil 10,852 14,169 10,037 12,556 12,070 11,586 11,587 10,275 10,037 10,586 84 Chile 5,892 4,939 6,065 6,427 5,830 5,494 5,827 5,361 6,065 5,592 85 Colombia 4,542 4,695 4,158 3,874 3,719 4,509 3,847 4,644 4,158 4,147 86 Ecuador 2,112 2,390 2,305 2,324 2,266 2,374 2,155 2,258 2,305 2,403 87 Guatemala 1,601 1,882 1,381 1,330 1,384 1,535 1,500 1,386 1,381 1,436 88 Mexico 32,166 39,871 36,152 33,401 35,071 32,486 34,665 32,615 36,152 36,878 89 Panama 4,240 3,610 3,924' 3,155 3,161 3,210 3,564 3,668 3,924' 3,969 90 Peru 1,427 1,359 1,363' 1,515 1,366 1,369 1,300 1,360 1,363' 1,364 91 Uruguay 3,003 3,172 2,807' 1,919 2,648 2,613 2,583 2,604 2,807' 2,681 92 Venezuela 24,730 24,974 21,887' 21,796 21,571 21,355 21,661 22,313 21,887' 19,952 93 Other Latin America16 10,025 6,260 5,842' 6,354 6,188 6,397 6,114 5,872 5,842' 5,840 94 Caribbean 573,337 646,987 703,670' 675,898 714,660 682,464 693,544 680,223 703,670' 711,120 95 Bahamas 189,298 178,472 162,196 160,425 172,518 166,477 159,867 145,993 162,196 168,679 96 Bermuda 9,636 10,539 23,827 20,436 24,968 24,692 23,158 25,765 23,827 27,015 97 British West Indies17 367,197 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 98 Cayman Islands17 n.a. 440,038 498,960 472,200 488,770 472,969 491,972 488,997 498,960 495,704 99 Cuba 90 88 91 92 99 92 92 94 91 93 100 Jamaica 794 1,182 829 931 948 932 856 828 829 883 101 Netherlands Antilles 5,428 3,264 5,019 3,940 10,538 4,381 5,293 5,476 5,019 6,329 102 Trinidad and Tobago 894 1,269 1,405 1,691 1,803 1,562 1,471 1,580 1,405 1,359 103 Other Caribbean16 n.a. 12,135 11,343' 16,183 15,016 11,359 10,835 11,490 11,343' 11,058 104 Asia 305,554 294,496 318,081 330,208 326,731 325,748 314,770 316,539 318,081 318,878 China 105 Mainland 16,531 10,498 15,504 18,108 18,810 14,623 15,854 14,489 15,504 13,544 106 Taiwan 17,352 17,633 18,678' 19,077 20,111 21,727 23,270 23,602 18,678' 22,200 107 Hong Kong 26,462 26,494 33,048 34,508 31,034 31,701 30,118 31,348 33,048 36,781 108 India 4,530 3,708 7,953 7,379 7,253 7,502 7,196 7,507 7,953 8,074 109 Indonesia 8,514 12,383 14,110 13,589 13,805 13,098 12,316 12,916 14,110 12,858 110 Israel 8,053 7,870 7,185 9,765 7,960 11,619 9,105 8,882 7,185 9,593 111 Japan 150,415 155,314 161,331 178,001 175,993 171,821 162,043 163,981 161,331 162,110 112 Korea (South) 7,955 9,019 8,932 7,039 6,846 6,563 6,288 6,548 8,932 7,410 113 Philippines 2,316 1,772 1,793 2,081 1,573 2,064 1,589 1,462 1,793 1,364 114 Thailand 3,117 4,743 7,605 4,591 5,113 5,044 7,022 8,698 7,605 6,666 115 Middle Eastern oil-exporting countries18 23,763 20,035 16,364 14,234 15,435 15,993 14,352 11,633 16,364 15,176 116 Other 36,546 25,027 25,578' 21,836 22,798 23,993 25,617 25,473 25,578' 23,102 117 10,824 11,365 12,240' 12,110 12,103 11,115 11,905 11,989 12,240' 11,177 118 Egypt 2,621 2,778 2,652 3,411 3,179 2,538 2,545 2,493 2,652 2,494 119 Morocco 139 274 306 302 312 329 335 254 306 259 120 South Africa 1,010 839 1,114 694 747 747 662 701 1,114 725 121 Congo (formerly Zaire) 4 4 2 1 n.a. 86 n.a. 2 2 3 122 Oil-exporting countries19 4,052 4,377 4,370 3,757 3,940 3,670 4,635 4,983 4,370 4,126 123 Other 2,998 3,093 3,796' 3,945 3,925 3,745 3,728 3,556 3,796' 3,570 124 Other countries 11,341 6,253 11,389' 9,093 10,329 10,033 9,288 11,704 11,389' 9,829 125 Australia 10,070 5,599 9,333 7,506 8,593 7,917 7,547 9,338 9,333 8,235 126 New Zealand20 n.a. 242 1,796 1,230 1,321 1,592 1,257 2,120 1,796 1,320 127 All other 1,271 412 26(f 357 415 524 484 246 260' 274 128 Nonmonetary international and regional organizations 12,543 10,830 13,503 11,495 10,542 11,797 13,153 12,253 13,503 14,578 129 International21 11,270 9,331 11,720 10,097 9,422 9,567 11,725 10,582 11,720 13,175 130 Latin American regional22 740 480 508 386 402 394 561 478 508 373 131 Other regional23 533 935 1,208 894 643 1,766 789 1,120 1,208 936 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 2003 AArreeaa oorr ccoouunnttrryy 22000000 22000011 22000022 July Aug. Sept. Oct. Nov.' Dec.' Jan.p 1 Total, all foreigners 904,642 1,055,069 l,081,939r 1,049,279' 1,086,492' 1,065,276' 1,152,959' 1,096,437 1,081,939 1,074,533 2 Foreign countries 899,956 1,050,123 1,078,262' l,044,643r 1,082,245' 1,062,638' 1,150,287' 1,093,119 1,078,262 1,071,374 3 Europe 378,115 461,176 484,398' 465,040' 483,246' 470,920' 543,269' 490,644 484,398 446,749 4 Austria 2,926 4,981 3,603' 4,216' 4,467' 4,336 3,876 4,224 3,603 4,334 Belgium2 5,399 6,391 6,044' 7,126 5,140 4,814' 5,590 5,784 6,044 6,251 6 Denmark 3,272 1,105 1,109 856 1,546 1,633' 1,534 940 1,109 1,563 7 Finland 7,382 10,350 8,518 13,718 16,230 15,812 14,821 9,028 8,518 9,832 8 France 40,035 60,620 47,705' 59,052 51,798 51,083 47,065 54,089 47,705 45,914 9 Germany 36,834 29,902 22,481' 26,156 26,072 23,344 21,101 22,103 22,481 23,395 10 Greece 646 330 477' 393 438 408 388 331 477 296 11 Italy 7,629 4,205 3,753' 5,568 4,442 5,092' 3,984 3,945 3,753 3,171 1? Luxembourg2 n.a. 1,267 3,407 3,526 3,067 2,847 2,818 3,224 3,407 3,901 13 Netherlands 17,043 15,908 23,133' 13,660 18,232 17,691 13,284 15,572 23,133 19,188 14 Norway 5,012 6,236 13,885 9,420 10,578 11,036 11,848 11,464 13,885 18,606 15 Portugal 1,382 1,603 2,226 1,995 1,823 2,006 2,000 2,134 2,226 2,356 16 Russia 517 594 877' 867 842 801 858 787 877 1,025 17 Spain 2,603 3,260 5,395 3,336 3,589 4,675 3,183 4,776 5,395 4,154 18 Sweden 9,226 12,544 15,326 15,172' 14,618 13,970 15,366 15,239 15,326 15,329 19 Switzerland 82,085 87,333 127,133' 87,969 106,281 103,920 184,039 134,425 127,133 87,562 70 Turkey 3,059 2,124 2,112 2,410 2,515 2,474 2,622 2,532 2,112 2,021 21 United Kingdom 144,938 201,183 174,711 198,313' 202,178 194,937' 195,936' 183,482 174,711 168,492 22 Channel Islands and Isle of Man3 n.a. 4,478 17,457' 4,962 5,076 5,926 7,281 11,304 17,457 24,393 73 Yugoslavia4 50 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 24 Other Europe and other former U.S.S.R.5 8,077 6,762 5,046 6,325 4,314 4,115 5,675 5,261 5,046 4,966 25 Canada 39,837 54,421 61,665' 63,235 60,310 62,838' 57,522 59,896 61,665 65,867 76 Latin America 76,561 69,762 56,642' 63,194 62,214 60,377 59,261 58,257 56,642 54,482 71 Argentina 11,519 10,763 6,783 8,202 8,090 7,663 7,608 7,253 6,783 6,663 28 Brazil 20,567 19,434 15,419 18,512 17,945 17,266 16,863 15,871 15,419 14,520 ?9 Chile 5,815 5,317 5,250 4,949 4,960 5,118 5,142 5,358 5,250 5,077 30 Colombia 4,370 3,602 2,614 3,216 3,158 3,078 2,834 2,758 2,614 2,406 31 Ecuador 635 495 457 462 479 467 451 451 457 439 3? Guatemala 1,244 1,495 892 871 861 925 907 889 892 896 33 Mexico 17,415 16,522 15,658' 16,349 16,015 15,805 15,367 15,828 15,658 15,268 34 Panama 2,933 3,061 1,915 2,466 2,433 1,959 2,021 1,961 1,915 1,730 35 Peru 2,807 2,185 1,411 1,748 1,649 1,599 1,504 1,484 1,411 1,403 36 Uruguay 673 447 255 314 527 345 319 292 255 255 37 Venezuela 3,518 3,077 3,254' 3,306 3,291 3,301 3,389 3,231 3,254 3,202 38 Other Latin America6 5,065 3,364 2,734 2,799 2,806 2,851 2,856 2,881 2,734 2,623 39 Caribbean 319,403 370,945 373,712' 345,965' 367,940' 347,780' 373,472' 372,683 373,712 392,193 40 Bahamas 114,090 101,034 95,584' 96,911' 95,729' 91,171' 96,151' 93,839 95,584 97,278 41 Bermuda 9,260 7,900 9,902 11,723 11,847 11,304 12,196 9,902 9,902 10,987 4? British West Indies7 189,289 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 4.3 Cayman Islands7 n.a. 250,376 257,075' 226,041' 248,107 234,435 252,908' 257,645 257,075 273,082 44 Cuba 0 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 45 Jamaica 355 418 321 350 353 463 429 393 321 304 46 Netherlands Antilles 5,801 6,729 6,690 6,387 7,334 6,194 7,427 6,744 6,690 6,445 47 Trinidad and Tobago 608 931 889 881 877 916 920 912 889 865 48 Other Caribbean6 n.a. 3,557 3,251' 3,672 3,693 3,297 3,441 3,248 3,251 3,232 49 77,829 85,882 93,691' 99,551 100,484 112,441' 109,359 104,181 93,691 103,074 China 50 Mainland 1,606 2,073 1,057 7,832 5,904 7,256 8,515 6,575 1,057 4,799 51 Taiwan 2,247 4,407 3,772 6,954 7,443 8,656 8,599 7,034 3,772 6,573 52 Hong Kong 6,669 9,995 7,263' 6,614 6,531 8,481 5,778 6,849 7,263 6,490 53 India 2,178 1,348 1,235 1,083 1,293 1,258 999 921 1,235 1,128 54 Indonesia 1,914 1,752 1,238 1,553 1,457 1,426 1,390 1,360 1,238 1,191 55 Israel 2,729 4,396 4,660 4,647 4,952 5,067 4,710 3,836 4,660 5,186 56 Japan 34,974 34,125 47,608' 35,947 37,559 45,058 42,252 47,071 47,608 48,814 57 Korea (South) 7,776 10,622 11,326 18,065 18,961 17,404 19,439 14,293 11,326 14,473 58 Philippines 1,784 2,587 2,137 1,857 1,593 2,134 1,843 1,555 2,137 2,424 59 Thailand 1,381 2,499 1,167 1,160 1,175 1,841 1,205 756 1,167 830 60 Middle Eastern oil-exporting countries8 9,346 7,882 7,952' 8,960 8,975 8,619 9,253 8,251 7,952 8,004 61 Other 5,225 4,196 4,276' 4,879 4,641 5,241' 5,376 5,680 4,276 3,162 62 Africa 2,094 2,095 1,977' 1,914 1,887 1,891 1,818 1,693 1,977 1,945 63 Egypt 201 416 487 405 324 332 326 428 487 511 64 Morocco 204 106 53 77 72 58 50 52 53 53 65 South Africa 309 710 617 545 601 576 554 435 617 545 66 Congo (formerly Zaire) 0 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 67 Oil-exporting countries9 471 167 222 227 247 303 261 225 222 240 68 Other 909 696 598' 660 643 622 627 553 598 596 69 Other countries 6,117 5,842 6,177 5,744 6,164 6,391 5,586 5,765 6,177 7,064 70 Australia 5,868 5,455 5,566 5,345 5,616 5,589 5,088 5,303 5,566 6,212 71 New Zealand10 n.a. 349 569 392 541 789 485 439 569 833 72 All other 249 38 42 7 7 13 13 23 42 19 73 Nonmonetary international and regional organizations" . . 4,686 4,946 3,677 4,636 4,247 2,638 2,700 3,318 3,677 3,159 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 • May 2003 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 2003 July Aug.' Sept.' Oct.' Nov.' Dec.' Jan.P 1 Total 1,095,869 1,254,863 1,291,900 1,255,390 1,291,900 2 Banks' claims 904,642 1,055,069 1,081,939 1,049,279' 1,086,492 1,065,276 1,152,959 1,096,437 1,081,939 1,074,533 3 Foreign public borrowers 37,907 49,404 48,750 61,067 61,541 61,299 63,404 56,300 48,750 58,167 4 Own foreign offices2 630,137 749,124 788,477 720,222' 758,142 734,022 823,669 777,040 788,477 762,482 5 Unaffiliated foreign banks 95,243 100,367 81,159 92,921' 86,420 94,905 94,875 98,942 81,159 88,568 6 Deposits 23,886 26,387' 20,680 24,449 19,051 24,213 26,742 28,210 20,680 22,372 7 Other 71,357 73,980R 60,479 68,472' 67,369 70,692 68,133 70,732 60,479 66,196 8 All other foreigners 141,355 156,174 163,553 175,069' 180,389 175,050 171,011 164,155 163,553 165,316 9 Claims of banks' domestic customers3 191,227 199,794 209,961 190,114 209,961 10 Deposits 100,352 93,565 79,512 86,862 79,512 11 Negotiable and readily transferable instruments4 78,147 90,412 124,159 90,919 124,159 12 Outstanding collections and other claims 12,728 15,817 6,290 12,333 6,290 MEMO 13 Customer liability on acceptances 4,257 2,588 2,450 2,353 2,450 14 Banks' loans under resale agreements5 n.a. 137,979' 161,585 170,823' 172,949 166,568 166,176 156,299 161,585 183,013 15 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States6 53,153 60,745 44,316 57,572 53,100 52,530 55,284 46,840 44,316 45,559 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-Reported Data A51 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 2002 MMaattuurriittyy,, bbyy bboorrrroowweerr aanndd aarreeaa22 11999999 22000000 22000011 Mar.r Juner Sept.r Dec." 1 Total 267,082 274,009 305,326 308,286 317,207 330,807 293,096 By borrower 2 Maturity of one year or less 187,894 186,103 200,240 214,373 236,219 250,076 212,972 3 Foreign public borrowers 22,811 21,399 27,501 31,875 33,061 42,665 31,569 4 All other foreigners 165,083 164,704 172,739 182,498 203,158 207,411 181,403 5 Maturity of more than one year 79,188 87,906 105,086 93,913 80,988 80,731 80,124 6 Foreign public borrowers 12,013 15,838 21,324 22,945 17,576 18,192 16,948 7 All other foreigners 67,175 72,068 83,762 70,968 63,412 62,539 63,176 By area Maturity of one year or less 8 Europe 80,842 142,464 83,233 85,848 88,641 92,111 83,172 9 Canada 7,859 8,323 10,072 8,227 8,928 7,731 6,933 10 Latin America and Caribbean 69,498 151,840 70,648 82,258 98,152 96,796 87,143 11 Asia 21,802 43,371 29,693 30,543 34,710 48,210 30,323 12 Africa 1,122 2,263 1,104 1,124 918 896 726 13 All other3 6,771 11,717 5,490 6,373 4,870 4,332 4,675 Maturity of more than one year 14 Europe 22,951 57,770 34,230 37,372 33,159 33,587 33,543 15 Canada 3,192 3,174 3,633 3,129 2,619 2,772 2,990 16 Latin America and Caribbean 39,051 82,684 47,382 35,537 32,142 31,376 32,172 17 Asia 11,257 19,536 15,190 13,563 8,688 9,128 6,920 18 Africa 1,065 1,567 769 720 907 812 845 19 Allother3 1,672 5,954 3,882 3,592 3,473 3,056 3,654 Note. Owing to changes in reporting requirements, this table will be discontinued in the 2. Maturity is time remaining until maturity, third quarter of 2003 after publication of the end-December 2003 data. 3. Includes nonmonetary international and regional organizations. 1. Reporting banks include 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

A52 International Statistics • May 2003 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 June Sept. Dec. Mar. June Sept. 1 Total 46,570 53,044 73,904 68,028 53,526 66,718 74,867r 70,638r 68,644 2 Payable in dollars 36,668 37,605 48,931 41,734 35,347 42,957 47,062r 48,103 44,815 3 Payable in foreign currencies 9,902 15,415 24,973 26,294 18,179 23,761 27,805' 22,535' 23,829 By type 4 Financial liabilities 19,255 27,980 47,419 41,908 27,502 41,034 46,408r 42,826' 41,311 Payable in dollars 10,371 13,883 25,246 17,655 11,415 18,763 20,367 21,892 18,775 6 Payable in foreign currencies 8,884 14,097 22,173 24,253 16,087 22,271 26,041' 20,934' 22,536 7 Commercial liabilities 27,315 25,064 26,485 26,120 26,024 25,684 28,459' 27,812' 27,333 8 Trade payables 10,978 12,857 14,293 13,127 11,740 11,820 14,872 13,959 13,558 y Advance receipts and other liabilities 16,337 12,207 12,192 12,993 14,284 13,864 13,587' 13,853' 13,775 10 Payable in dollars 26,297 23,722 23,685 24,079 23,932 24,194 26,695' 26,211 26,040 n Payable in foreign currencies 1,018 1,318 2,800 2,041 2,092 1,490 1,764 1,601' 1,293 By area or country Financial liabilities 12 Europe 12,589 23,241 34,172 32,785 22,083 31,806 39,392' 35,011' 34,817 13 Belgium and Luxembourg 79 31 147 98 76 154 119 120 232 14 France 1,097 1,659 1,480 1,222 1,538 2,841 3,531 4,071 3,517 15 Germany 2,063 1,974 2,168 2,463 1,994 2,344 2,982 2,622 2,865 16 Netherlands 1,406 1,996 2,016 1,763 1,998 1,954 1,951 1,939 1,918 17 Switzerland 155 147 104 93 92 94 84 61 61 18 United Kingdom 5,980 16,521 26,362 25,363 14,819 22,852 28,630' 24,188' 24,175 19 Canada 693 284 411 628 436 955 1,067' 1,078' 583 20 Latin America and Caribbean 1,495 892 4,125 2,100 414 2,858 1,547 1,832 1,088 21 Bahamas 7 1 6 40 5 157 5 5 0 22 Bermuda 101 5 1,739 461 47 960 836 626 588 23 Brazil 152 126 148 21 22 35 35 38 65 24 British West Indies 957 492 406 1,508 243 1,627 612 1,000 377 25 Mexico 59 25 26 20 24 36 27 25 26 26 Venezuela 2 0 2 1 3 2 1 5 1 27 Asia 3,785 3,437 7,965 5,639 3,869 5,042 4,010 4,491 4,458 28 Japan 3,612 3,142 6,216 3,297 3,442 3,269 3,299 2,387 2,447 2y Middle Eastern oil-exporting countries' 0 4 11 8 9 10 15 14 16 30 Africa 28 28 52 61 59 53 122 120 128 31 Oil-exporting countries2 0 0 0 0 5 5 91 91 91 32 All other3 665 98 694 695 672 320 270 294 253 Commercial liabilities 33 Europe 10,030 9,262 9,629 8,723 8,855 9,230 8,384' 8,468 8,745 34 Belgium and Luxembourg 278 140 293 297 160 99 105 94 134 3b France 920 672 979 665 892 735 713' 827 718 36 Germany 1,392 1,131 1,047 1,017 966 908 584 570 855 37 Netherlands 429 507 300 343 343 1,163 463 765 1,186 38 Switzerland 499 626 502 697 683 790 637 749 592 39 United Kingdom 3,697 3,071 2,847 2,706 2,296 2,280 2,747 2,551 2,317 40 Canada 1,390 1,775 1,933 1,957 1,569 1,633 1,798 2,027 1,570 41 Latin America and Caribbean 1,618 2,310 2,381 2,293 2,879 2,729 3,454 2,744' 2,850 42 Bahamas 14 22 31 31 44 52 23 12 14 43 Bermuda 198 152 281 367 570 591 433 422 468 44 Brazil 152 145 114 279 312 290 277 320 290 45 British West Indies 10 48 76 21 28 45 67 46 47 46 Mexico 347 887 841 762 884 901 1,457 958 997 47 Venezuela 202 305 284 218 242 166 281 204 327 48 Asia 12,342 9,886 10,983 11,384 11,114 10,532 12,969 12,693 12,274 49 Japan 3,827 2,609 2,757 2,377 2,421 2,592 4,281 4,143 4,031 50 Middle Eastern oil-exporting countries1 2,852 2,551 2,832 3,087 3,053 2,642 3,142 3,259 3,669 51 Africa 794 950 948 1,115 938 836 976 916 876 52 Oil-exporting countries2 393 499 483 539 471 436 454 349 445 53 Other3 1,141 881 614 648 669 724 878 964 1,018 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 June Sept. Dec. Mar. June Sept. 1 Total 77,462 76,669 90,157 97,470 94,076 113,155 115,764r 116,148r 112,099r 2 Payable in dollars 72,171 69,170 79,558 87,690 83,292 103,937 106,192' 107,106' 103,877' 3 Payable in foreign currencies 5,291 7,472 10,599 9,780 10,784 9,218 9,572 9,042 8,222 By type 4 Financial claims 46,260 40,231 53,031 61,891 60,015 81,287 85,381 87,324 84,033 Deposits 30,199 18,566 23,374 25,381 22,391 29,801 41,813 42,136 38,074 6 Payable in dollars 28,549 16,373 21,015 23,174 19,888 27,850 40,002 40,323 36,382 7 Payable in foreign currencies 1,650 2,193 2,359 2,207 2,503 1,951 1,811 1,813 1,692 8 Other financial claims 16,061 21,665 29,657 36,510 37,624 51,486 43,568 45,188 45,959 9 Payable in dollars 14,049 18,593 25,142 32,038 32,076 46,621 39,553 41,875 42,734 10 Payable in foreign currencies 2,012 3,072 4,515 4,472 5,548 4,865 4,015 3,313 3,225 11 Commercial claims 31,202 36,438 37,126 35,579 34,061 31,868 30,383' 28,824' 28,066' 17 Trade receivables 27,202 32,629 33,104 30,631 29,328 27,586 25,618' 24,263' 23,491' 13 Advance payments and other claims 4,000 3,809 4,022 4,948 4,733 4,282 4,765 4,561 4,575 14 Payable in dollars 29,573 34,204 33,401 32,478 31,328 29,466 26,637' 24,908' 24,761' 15 Payable in foreign currencies 1,629 2,207 3,725 3,101 2,733 2,402 3,746 3,916 3,305 By area or country Financial claims 16 Europe 12,294 13,023 23,136 23,975 23,069 26,118 35,933 36,863 32,007' 17 Belgium and Luxembourg 661 529 296 262 372 625 751 797 656 18 France 864 967 1,206 1,376 1,682 1,450 3,489 3,921 3,854 19 Germany 304 504 848 1,163 1,112 1,068 4,114 3,972 4,292 70 Netherlands 875 1,229 1,396 1,072 954 2,138 3,253 3,995 4,024 71 Switzerland 414 643 699 653 665 589 308 1,010 1,135 22 United Kingdom 7,766 7,561 15,900 15,913 15,670 16,510 17,910 16,037 11,351' 23 Canada 2,503 2,553 4,576 4,787 4,254 6,193 5,471 5,537 5,485 74 Latin America and Caribbean 27,714 18,206 19,317 24,403 26,099 41,201 35,001 37,511 38,822 75 Bahamas 403 1,593 1,353 818 649 976 1,197 1,332 715 76 Bermuda 39 11 19 426 80 918 611 704 1,157 77 Brazil 835 1,476 1,827 1,877 2,065 2,127 1,892 2,036 2,226 78 British West Indies 24,388 12,099 12,596 17,505 19,234 32,965 27,350 29,591 30,859 79 Mexico 1,245 1,798 2,448 2,633 2,910 3,075 2,777 2,823 2,871 30 Venezuela 55 48 87 66 80 83 79 60 71 31 Asia 3,027 5,457 4,697 6,829 5,274 6,430 6,489 5,826 6,121 32 Japan 1,194 3,262 1,631 1,698 1,761 1,604 2,009 1,093 1,421' 33 Middle Eastern oil-exporting countries1 9 23 80 76 100 135 79 78 88 34 Africa 159 286 411 476 456 414 390 431 379 35 Oil-exporting countries2 16 15 57 35 83 49 51 64 29 36 All other1 563 706 894 1,421 891 931 2,097 1,156 1,259 Commercial claims 37 Europe 13,246 16,389 15,938 14,469 14,381 14,036 12,708 11,861 12,000' 38 Belgium and Luxembourg 238 316 452 403 354 268 272 207 254' 39 France 2,171 2,236 3,095 3,190 3,062 2,922 2,883 2,828 2,972 40 Germany 1,822 1,960 1,982 1,993 1,977 1,662 1,198 1,163 1,158 41 Netherlands 467 1,429 1,729 863 844 529 415 379 409 42 Switzerland 483 610 763 473 514 611 436 472 404' 43 United Kingdom 4,769 5,827 4,502 3,724 3,571 3,839 3,579 3,387 3,236' 44 Canada 2,617 2,757 3,502 3,470 3,116 2,855 2,760 2,752 2,623' 45 Latin America and Caribbean 6,296 5,959 5,851 6,033 5,590 4,874 4,912' 4,530r 4,324' 46 Bahamas 24 20 37 39 35 42 42 28 35' 47 Bermuda 536 390 376 650 526 369 422 214 270 48 Brazil 1,024 905 957 1,363 1,183 958 837 829 862' 49 British West Indies 104 181 137 135 124 95 73 26 12 50 Mexico 1,545 1,678 1,507 1,375 1,442 1,401 1,225 1,283 1,184' 51 Venezuela 401 439 328 321 301 288 312 316 340' 57 Asia 7,192 9,165 9,630 9,499 8,704 7,855 7,513 7,309 6,778' 53 Japan 1,681 2,074 2,796 3,148 2,438 2,007 1,975 2,064 2,083 54 Middle Eastern oil-exporting countries' 1,135 1,625 1,024 1,040 919 851 657 889 819 55 Africa 711 631 672 601 838 645 630 605' 637 56 Oil-exporting countries2 165 171 180 102 170 88 109 94' 107 57 Other3 1,140 1,537 1,572 1,507 1,432 1,603 1,860 1,767 1,704' 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 • May 2003 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 2003 2002 2003 TTrraannssaaccttiioonn,, aanndd aarreeaa oorr ccoouunnttrryy 22000011 22000022 Jan.- Jan. July Aug. Sept. Oct. Nov. Dec. Jan.P U.S. corporate securities STOCKS 1 Foreign purchases 3,051,332 3,158,811 212,558 318,210 257,265 206,729 297,181 264,359 216,659 212,558 1 Foreign sales 2,934,942 3,109,280 216,056 308,557 252,651 213,195 293,565 257,879 214,243 216,056 3 Net purchases, or sales (-) 116,390 49,531 -3,498 9,653 4,614 -6,466 3,616 6,480 2,416 -3,498 4 Foreign countries 116,187 49,585 -3,475 9,580 4,603 -6,451 3,610 6,473 2,400 -3,475 5 Europe 88,099 33,143 -1,887 3,204 3,830 -5,154 2,187 4,407 4,883 -1,887 6 France 5,914 2,128 206 38 942 -936 982 -323 676 206 7 Germany 8,415 -122 -64 -595 -328 -1,175 276 31 518 -64 8 Netherlands 10,919 4,544 671 1,440 900 4 760 629 792 671 9 Switzerland 3,456 2,678 -721 -341 -306 -949 -176 1,581 909 -721 10 United Kingdom 38,493 15,322 -2,758 1,828 2,801 -1,232 1,403 2,062 784 -2,758 11 Channel Islands and Isle of Man1 -698 -255 -2 73 -41 -21 94 23 -22 -2 12 Canada 10,984 7,453 19 1,939 1,336 -772 342 47 746 19 13 Latin America and Caribbean -5,154 -15,477 -3,088 -1,319 -3,849 -2,903 -2,874 2,692 -2,348 -3,088 14 Middle East2 1,789 -1,295 -52 43 -58 46 -90 -232 71 -52 15 Other Asia 20,726 22,667 1,313 4,755 3,231 2,012 3,985 -775 -894 1,313 16 Japan 6,788 12,337 561 3,660 2,249 238 -7 -961 -1,131 561 17 Africa -366 -80 38 3 -34 36 -22 -16 -20 38 18 Other countries 109 3,174 182 955 147 284 82 350 -38 182 19 Nonmonetary international and regional organizations 203 -53 -23 73 11 -15 6 7 16 -23 BONDS3 20 Foreign purchases 1,942,690 2,545,007 224,521 221,130 220,918 208,602 217,402 259,305 207,380 224,521 21 Foreign sales 1,556,745 2,171,357r 180,746 205,389 189,016 183,671 185,366 218,351 178,510r 180,746 22 Net purchases, or sales (-) 385,945 373,650r 43,775 15,741 31,902 24,931 32,036 40,954 28,870r 43,775 23 Foreign countries 385,380 373,371r 43,919 16,072 31,871 25,022 31,632 40,914 28,684r 43,919 24 Europe 195,412 163,516' 24,301 3,253 10,891 11,758 16,532 17,116 10.526r 24,301 25 France 5,028 3,744 1,044 183 483 252 1,089 383 -434 1,044 26 Germany 12,362 5,155 545 693 366 -390 -71 558 1,249 545 27 Netherlands 1,538 -431 206 393 55 -35 149 -61 -19 206 28 Switzerland 5,721 8,521 1,154 1,406 1,825 356 355 743 304 1,154 29 United Kingdom 152,772 105,810r 12,279 -233 3,690 7,374 9,852 8,812 6,768r 12,279 30 Channel Islands and Isle of Man1 2,000 11,173 5,420 -20 1,203 1,342 2,239 4,917 959 5,420 31 Canada 4,595 -1,047 -1,172 -610 166 -383 540 -757 -2,180 -1,172 32 Latin America and Caribbean 77,019 82,833 6,564 1.840 9,706 3,464 4,339 5,471 7,379 6,564 33 Middle East2 2,338 2,274 591 125 578 40 196 387 -120 591 34 Other Asia 106,400 121,439 13,593 10,336 9,026 9,602 10,126 18,374 12,944 13,593 35 Japan 33,687 48,451 4,025 4,754 1,975 6,135 5,505 10,456 4,863 4,025 36 Africa 760 860 53 112 77 171 -18 56 28 53 37 Other countries -1,144 3,496 -11 1,016 1,427 370 -83 267 107 -11 38 Nonmonetary international and regional organizations 566 279 -144 -331 31 -91 404 40 186 -144 Foreign securities 39 Stocks, net purchases, or sales (-) -50,113 -2,287 -5,532 13,299 3,061 790 -6,196 -1,004 -2,713 -5,532 40 Foreign purchases 1,397,664 1,257,735 89,817 139,307 92,731 87,080 100,708 101,780 81,804 89,817 41 Foreign sales 1,447,777 1,260,022 95,349 126,008 89,670 86,290 106,904 102,784 84,517 95,349 42 Bonds, net purchases, or sales (-) 30,502 28,406' -1,811 7,722 -1,749 1,064 6,920 2,269 -5,157r -1,811 43 Foreign purchases 1,160,102 1,377,017 140,390 120,870 112,167 126,078 123,139 137,931 117,917 140,390 44 Foreign sales 1,129,600 1,348,61 lr 142,201 113,148 113,916 125,014 116,219 135,662 123,074' 142,201 45 Net purchases, or sales (-), of stocks and bonds -19,611 26,119r -7,343 21,021 1,312 1,854 724 1,265 -7,870r -7,343 46 Foreign countries -19,023 26,153r -7,394 21,111 1,287 1,876 671 1,277 -7,884r -7,394 47 Europe -12,108 14,909r -4,564 11,479 568 1,420 679 6,119 -9,057' -4,564 48 Canada 2,943 4,698 4,086 1,917 4 -585 -1,326 -204 712 4,086 49 Latin America and Caribbean 4,315 4,564 -7,843 1,897 -755 -521 -32 518 1,045 -7,843 50 Asia -11,869 1,584 370 4,990 1,028 1,018 1,694 -5,256 -987 370 51 Japan -20,116 -9,119 -617 3,453 379 -862 13 -6,617 -2,039 -617 52 Africa -557 -383 -48 205 393 -39 104 100 40 ^18 53 Other countries -1,747 783 605 623 49 583 -448 0 363 605 54 Nonmonetary international and regional organizations -587 -37 51 -90 25 -22 53 -12 14 51 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 2003 2002 2003 AArreeaa oorr ccoouunnttrryy 22000011 22000022 Jan.- July Aug. Sept. Oct. Nov. Dec. Jan.P Jan. 1 Total estimated 18,514 83,202 1,783 18,097 -3,226 31,141 6,742 21,097 14,290 1,783 2 Foreign countries 19,200 81,245 1,400 18,331 -3,639 31,106 5,994 21,177 13,961 1,400 3 Europe -20,604 1,627 891 608 -6,859 11,087 838 8,847 3,186 891 4 Belgium2 -598 1,741 3,371 252 1,349 -138 -210 513 -193 3,371 5 Germany -1,668 -6,709 -1,183 -3,725 -2,599 -1,096 -469 1,658 1,610 -1,183 6 Luxembourg2 462 -1,609 75 -84 -14 -265 61 -139 -201 75 7 Netherlands -6,728 -15,929 -4,084 171 -700 1,436 -2,856 1,427 3,261 ^1,084 8 Sweden -1,190 2,924 422 -169 471 234 -203 1,652 902 422 9 Switzerland 1,412 -508 -86 246 -705 1,150 -1,727 2,389 -2,543 -86 10 United Kingdom -7,279 21,924 1,313 6,515 -4,878 12,703 5,071 -45 -2,739 1,313 11 Channel Islands and Isle of Man3 -179 714 -11 177 444 -43 -116 -299 -84 -11 12 Other Europe and former U.S.S.R -4,836 -921 1,074 -2,775 -227 -2,894 1,287 1,691 3,173 1,074 13 Canada -1,634 -2,392 -666 -1,327 -1,558 2,236 -2,449 3,165 1,028 -666 14 Latin America and Caribbean 4,272 22,027 -1,892 4,745 -11,841 7,753 7,219 -1,758 6,074 -1,892 15 Venezuela 290 -59 20 -58 -15 -79 5 -1 -73 20 16 Other Latin America and Caribbean 14,726 22,866 2,675 3,879 -7,444 5,516 4,485 319 1,652 2,675 17 Netherlands Antilles -10,744 -780 -4,587 924 -4,382 2,316 2,729 -2,076 4,495 -4,587 18 Asia 36,332 55,403 2,630 13,230 16,024 9,987 -54 10,607 3,626 2,630 19 Japan 16,114 29,731 3,512 7,691 6,676 13,096 -1,313 2,120 2,731 3,512 20 Africa -880 841 84 112 495 -93 12 -17 90 84 21 Other 1,714 3,739 353 963 100 136 428 333 -43 353 22 Nonmonetary international and regional organizations -686 1,957 383 -234 413 35 748 -80 329 383 23 International -290 1,642 170 -64 418 -45 329 314 164 170 24 Latin American Caribbean regional 41 -3 -15 11 29 4 -19 0 -15 MEMO 25 Foreign countries 19,200 81,245 1,400 18,331 -3,639 31,106 5,994 21,177 13,961 1,400 26 Official institutions 3,474 15,286 -636 -5,268 635 -3,511 -553 16,577 6,708 -636 27 Other foreign 15,726 65,959 2,036 23,599 ^t,274 34,617 6,547 4,600 7,253 2,036 Oil-exporting countries 28 Middle East4 865 ^1,062 509 -1,133 -808 —412 913 -139 -3,815 509 29 Africa5 -2 29 0 0 -2 —1 0 1 55 0 1. Official and private transactions in marketable U.S. Treasury securities having an 3. Before January 2001, these data were included in the data reported for the United original maturity of more than one year. Data are based on monthly transactions reports. Kingdom. Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab countries. Emirates (Trucial States). 2. Before January 2001, combined data reported for Belgium and Luxembourg. 5. Comprises Algeria, Gabon, Libya, and Nigeria. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics • May 2003 3.28 FOREIGN EXCHANGE RATES AND INDEXES OF THE FOREIGN EXCHANGE VALUE OF THE US. DOLLAR1 Currency units per U.S. dollar except as noted 2002 2003 Oct. Nov. Dec. Jan. Feb. Mar. Exchange rates COUNTRY/CURRENCY UNIT 1 Australia/dollar2 58.15 51.69 54.37 55.02 56.13 56.24 58.29 59.56 60.15 2 Brazil/real 1.8301 2.3527 2.9213 3.7966 3.5924 3.6268 3.4375 3.5955 3.4567 3 Canada/dollar 1.4855 1.5487 1.5704 1.5780 1.5715 1.5592 1.5414 1.5121 1.4761 4 China, P.R./yuan 8.2784 8.2770 8.2770 8.2772 8.2772 8.2777 8.2775 8.2780 8.2773 5 Denmark/krone 8.0953 8.3323 7.8862 7.5732 7.4201 7.2874 6.9980 6.8920 6.8807 6 European Monetary Union/euro3 0.9232 0.8952 0.9454 0.9812 1.0013 1.0194 1.0622 1.0785 1.0797 7 Greece/drachma 365.92 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 8 Hong Kong/dollar 7.7924 7.7997 7.7997 7.7995 7.7994 7.7988 7.7994 7.7995 7.7991 y India/rupee 45.00 47.22 48.63 48.39 48.29 48.15 47.96 47.75 47.68 10 Japan/yen 107.80 121.57 125.22 123.91 121.61 121.89 118.81 119.34 118.69 N Malaysia/ringgit 3.8000 3.8000 3.8000 3.8000 3.8000 3.8000 3.8000 3.8000 3.8000 12 Mexico/peso 9.459 9.337 9.663 10.094 10.195 10.225 10.622 10.945 10.905 13 New Zealand/dollar2 45.68 42.02 46.45 48.18 49.73 51.08 53.98 55.39 55.37 14 Norway/krone 8.8131 8.9964 7.9839 7.4873 7.3157 7.1557 6.9138 7.0004 7.2760 15 Singapore/dollar 1.7250 1.7930 1.7908 1.7843 1.7653 1.7532 1.7363 1.7451 1.7551 16 South Africa/rand 6.9468 8.6093 10.5176 10.3058 9.6509 8.9479 8.6949 8.2858 8.0506 17 South Korea/won 1,130.90 1,292.01 1,250.31 1,240.19 1,210.20 1,206.61 1,176.45 1,190.37 1,237.20 18 Sri Lanka/rupee 76.964 89.602 95.773 96.402 96.426 96.705 96.813 96.880 96.943 iy Sweden/krona 9.1735 10.3425 9.7233 9.2846 9.0652 8.9303 8.6368 8.4837 8.5440 20 Switzerland/franc 1.6904 1.6891 1.5567 1.4932 1.4658 1.4388 1.3765 1.3602 1.3614 21 Taiwan/dollar 31.260 33.824 34.536 34.947 34.673 34.799 34.571 34.734 34.721 21 Thailand/baht 40.210 44.532 43.019 43.641 43.353 43.318 42.773 42.897 42.783 23 United Kingdom/pound2 151.56 143.96 150.25 155.75 157.11 158.63 161.75 160.79 158.25 24 Venezuela/bolivar 680.52 724.10 1,161.19 1,440.50 1,358.61 1,328.29 1,714.45 1,736.21 1,600.00 Indexes4 NOMINAL 25 Broad (January 1997=100)5 119.68 126.08 127.19 127.63 126.33 125.70 124.21 124.12 123.56 26 Major currencies (March 1973=100)6 98.31 104.28 102.85 100.93 99.53 98.62 96.03 95.02 94.28 27 Other important trading partners (January 1997-11X1) 130.34 136.36 141.42 145.69 144.85 144.87 145.72 147.35 147.26 REAL 28 Broad (March 1973-100)5 104.58r 110.60r 110.99r 111.35r 109.85r 109.00r 107.84r 107.98' 107.76 29 Major currencies (March 1973=100)6 103.62r 111.06r 109.68r 107.75r 106.16r 104.91r 102.43' 101.82r 101.02 30 Other important trading partners (March 1973-1001 114.54 119.19 122.00r 125.46r 123.96r 123.60r 124.25r 125.50r 126.15 1. Averages of certified noon buying rates in New York for cable transfers. Data in this 4. Starting with the March 2003 Bulletin, revised index values resulting from the periodic table also appear in the Board's G.5 (405) monthly statistical release. For ordering address, revision of data that underlie the calculated trade weights are reported. For more information see inside front cover. on the indexes of the foreign exchange value of the dollar, see Federal Reserve Bulletin, vol. 2. U.S. cents per currency unit. 84 (October 1998), pp. 811-818. 3. The euro is reported in place of the individual euro area currencies. By convention, the 5. Weighted average of the foreign exchange value of the U.S. dollar against the currencies rate is reported in U.S. dollars per euro. The bilateral currency rates can be derived from the of a broad group of U.S. trading partners. The weight for each currency is computed as an euro rate by using the fixed conversion rates (in currencies per euro) as shown below: average of U.S. bilateral import shares from and export shares to the issuing country and of a measure of the importance to U.S. exporters of that country's trade in third country markets. Euro equals 6. Weighted average of the foreign exchange value of the U.S. dollar against a subset of 13.7603 Austrian schillings 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 March 31, 2002 August 2002 A58 June 30, 2002 November 2002 A58 September 30, 2002 February 2003 A58 December 31, 2002 May 2003 A58 Terms of lending at commercial banks May 2002 August 2002 A60 August 2002 November 2002 A60 November 2002 February 2003 A60 February 2003 May 2003 A60 Assets and liabilities of U.S. branches and agencies of foreign banks March 31, 2002 August 2002 A66 June 30, 2002 November 2002 A66 September 30, 2002 February 2003 A66 December 31, 2002 May 2003 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 1988-2000 September 2001 A64 1989-2001 September 2002 A58 Disposition of applications for private mortgage insurance 1997-2000 September 2001 A73 1998-2001 September 2002 A67 Small loans to businesses and farms 1996-2000 September 2001 A76 1996-2001 September 2002 A70 Community development lending reported under the Community Reinvestment Act 2000 September 2001 A79 2001 September 2002 A73 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 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 Special Tables • May 2003 4.20 DOMESTIC AND FOREIGN OFFICES Insured Commercial Bank Assets and Liabilities Consolidated Report of Condition, December 31, 2002 Millions of dollars except as noted Banks with Banks with foreign offices' domestic IItteemm TToottaall Do t m ot e a s l tic offices only2 Total Domestic Total 1 Total assets 6,949,219 6,213,963 4,663,640 3,928,385 2,285,579 2 Cash and balances due from depository institutions 377,188 283,998 270,062 176,872 107,126 3 Cash items in process of collection, unposted debits, and currency and coin n.a. n.a. 135,145 132,863 n.a. 4 Cash items in process of collection and unposted debits n.a. n.a. n.a. 104,136 n.a. 5 Currency and coin n.a. n.a. n.a. 28,728 n.a. 6 Balances due from depository institutions in the United States n.a. n.a. 28,674 23,620 n.a. 7 Balances due from banks in foreign countries and foreign central banks n.a. n.a. 94,283 8,510 n.a. 8 Balances due from Federal Reserve Banks n.a. n.a. 11,959 11,878 n.a. 9 Total securities, held-to-maturity (amortized cost) and available-for-sale (fair value) 1,306,931 n.a. 758,489 n.a. 548,442 10 U.S. Treasury securities 62,988 n.a. 39,333 n.a. 23,655 11 U.S. government agency and corporation obligations (excludes mortgage-backed securities) 220,598 n.a. 85,982 n.a. 113344,,661155 12 Issued by U.S. government agencies 6,924 n.a. 3,962 n.a. 2,962 13 Issued by U.S. government-sponsored agencies 213,674 n.a. 82,020 n.a. 131,654 14 Securities issued by states and political subdivisions in the United States 102,231 n.a. 35,851 n.a. 66,380 15 Mortgage-backed securities (MBS) 690,990 n.a. 453,050 n.a. 237,939 16 Pass-through securities 451,724 n.a. 316,906 n.a. 134,818 17 Guaranteed by GNMA 89,872 n.a. 61,130 n.a. 28,742 18 Issued by FNMA and FHLMC 352,379 n.a. 247,362 n.a. 105,017 19 Other pass-through securities 9,473 n.a. 8,414 n.a. 1,059 20 Other mortgage-backed securities (includes CMOs, REMICs, and stripped MBS) 239,266 n.a. 136,145 n.a. 103,121 21 Issued or guaranteed by FNMA, FHLMC or GNMA 158,915 n.a. 85,600 n.a. 73,315 22 Collateralized by MBS issued or guaranteed by FNMA, FHLMC, or GNMA 12,770 n.a. 11,416 n.a. 1,354 23 All other mortgage-backed securities 67,580 n.a. 39,128 n.a. 28,452 24 Asset-backed securities 104,281 n.a. 56,264 n.a. 48,017 25 Credit card receivables 39,923 n.a. 22,919 n.a. 17,003 26 Home equity lines 34,026 n.a. 20,547 n.a. 13,479 27 Automobile loans 12,910 n.a. 4,536 n.a. 8,373 28 Other consumer loans 1,373 n.a. 916 n.a. 457 29 Commercial and industrial loans 6,402 n.a. 3,208 n.a. 3,194 30 Other 9,648 n.a. 4,137 n.a. 5,511 31 Other debt securities 103,335 n.a. 73,647 n.a. 29,688 32 Other domestic debt securities 38,987 n.a. 14,029 n.a. 24,958 33 Foreign debt securities 64,348 n.a. 59,618 n.a. 4,730 34 Investments in mutual funds and other equity securities with readily determinable fair value 22,508 n.a. 14,361 n.a. 8,147 35 Federal funds sold and securities purchased under agreements to resell 311,011 262,718 224,673 176,380 86,338 36. Federal funds sold in domestic offices 169,549 169,549 88,747 88,747 80,802 37 Securities purchased under agreements to resell 141,462 93,169 135,926 87,633 5,536 38 Total loans and leases (gross) and lease-financing receivables (net) 4,079,650 3,800,525 2,644,964 2,365,840 1,434,686 39 LESS: Unearned income on loans 3,370 2,328 2,303 1,261 1,067 40 LESS: Loans and leases held for sale 238,325 n.a. 194,256 n.a. 44,069 41 Total loans and leases (net of unearned income) 3,837,955 n.a. 2,448,405 n.a. 1,389,550 42 LESS: Allowance for loan and lease losses 74,430 n.a. 51,496 n.a. 22,934 43 Loans and leases, net of unearned income and allowance 3,763,525 n.a. 2,396,909 n.a. 1,366,616 Total loans and leases, gross, by category 44 Loans secured by real estate 2,049,257 2,018,448 1,175,435 1,144,626 887733,,882222 45 Construction and land development n.a. 205,239 n.a. 100,932 104,307 n.a. 37,995 n.a. 6,921 31,074 47 One- to four-family residential properties n.a. 1,151,957 n.a. 752,607 399,350 48 Revolving, open-end loans, extended under lines of credit n.a. 214,598 n.a. 152,284 62,315 Closed-end loans secured by one- to four-family residential properties 49 Secured by first liens n.a. 848,666 n.a. 546,389 330022,,227777 50 Secured by junior liens n.a. 88,692 n.a. 53,934 34,758 51 Multifamily (five or more) residential properties n.a. 71,709 n.a. 37,220 34,489 52 Nonfarm nonresidential properties n.a. 551,549 n.a. 246,946 304,603 53 Loans to depository institutions and acceptances of other banks 133,469 110,478 123,821 100,830 9,648 54 Commercial banks in the United States n.a. n.a. 91,915 83,047 n.a. 55 Other depository institutions in the United States n.a. n.a. 13,125 13,114 n.a. n.a. n.a. 18,781 4,669 n.a. 57 Loans to finance agricultural production and other loans to farmers 46,523 45,956 10,611 10,043 35,913 58 Commercial and industrial loans 903,886 773,325 668,146 537,585 235,741 59 U.S. addressees (domicile) n.a. n.a. 542,361 528,245 n.a. 60 Non-U.S. addressees (domicile) n.a. n.a. 125,785 9,339 n.a. 61 Loans to individuals for household, family, and other personal expenditures (includes 649,139 587,357 401,726 339,944 247,414 226,143 205,825 146,044 125,726 80,099 63 Other revolving credit plans 38,272 25,624 31,793 19,144 6,480 64 Other consumer loans (including single-payment, installment, and all student loans) 384,724 355,909 223,889 195,073 160,836 65 Obligations (other than securities) of states and political subdivisions in the United States (includes nonrated industrial development obligations) 21,352 21,306 12,798 12,752 88,,555544 114,907 90,515 103,607 79,215 11,300 67 Loans to foreign governments and official institutions 5,847 2,143 5,837 2,133 10 109,060 88,372 97,771 77,082 11,290 69 Loans for purchasing and carrying securities n.a. n.a. n.a. 11,781 n.a. 70 All other loans (excludes consumer loans) n.a. n.a. n.a. 65,301 n.a. 71 Lease-financing receivables 161,116 153,140 148,821 140,845 12,295 396,487 n.a. 391,465 n.a. 5,023 73 Premises and fixed assets (including capitalized leases) 78,335 n.a. 45,946 n.a. 32,389 74 Other real estate owned 4,382 n.a. 1,853 n.a. 2,529 75 Investments in unconsolidated subsidiaries and associated companies 8,763 n.a. 8,289 n.a. 474 76 Customers' liability on acceptances outstanding 5,736 n.a. 5,514 n.a. 222 77 Net due from own foreign offices, Edge Act and agreement subsidiaries, and IBFs n.a. n.a. n.a. 17,240 n.a. 78 Intangible assets 121,594 n.a. 100,006 n.a. 21,588 79 Goodwill 84,365 n.a. 68,613 n.a. 15,752 80 Other intangible assets 37,230 n.a. 31,393 n.a. 5,836 81 All other assets 336,943 n.a. 266,181 n.a. 70,762 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A59 4.20 DOMESTIC AND FOREIGN OFFICES Insured Commercial Bank Assets and Liabilities—Continued Consolidated Report of Condition, December 31, 2002 Millions of dollars except as noted Banks with Banks with foreign offices1 domestic IItteemm TToottaall DDoo tt mm oott ee aa ss ll ttiicc offices only2 Total Domestic Total 82 Total liabilities, minority interest, and equity capital 6,949,219 n.a. 4,663,640 n.a. 2,285,579 83 Total liabilities 6,305,772 5,570,516 4,243,594 3,508,338 2,062,179 84 Total deposits 4,649,751 3,992,179 2,968,116 2,310,544 1,681,635 85 Individuals, partnerships, and corporations (include all certified and official checks) 4,185,655 3,701,964 2,634,532 2,150,842 1,551,122 86 U.S. government n.a. 30,074 n.a. 28,569 1,505 87 States and political subdivisions in the United States n.a. 196,795 n.a. 90,014 106,781 88 Commercial banks and other depository institutions in the United States 100,179 53,024 78,452 31,297 21,727 89 Banks in foreign countries 113,122 9,625 112,636 9,139 486 90 Foreign governments and official institutions (including foreign central banks) 23,273 697 23,259 683 14 91 Total transaction accounts n.a. 701,200 n.a. 378,953 322,247 92 Individuals, partnerships, and corporations (include all certified and official checks) n.a. 595,638 n.a. 315,242 280,396 93 U.S. government n.a. 2,480 n.a. 1,441 1,039 94 States and political subdivisions in the United States n.a. 59,812 n.a. 28,392 31,419 95 Commercial banks and other depository institutions in the United States n.a. 35,464 n.a. 26,361 9,103 96 Banks in foreign countries n.a. 7,358 n.a. 7,080 278 97 Foreign governments and official institutions (including foreign central banks) n.a. 449 n.a. 438 12 98 Total demand deposits n.a. 525,432 n.a. 326,122 199,310 99 Total nontransaction accounts n.a. 3,290,979 n.a. 1,931,591 1,359,389 100 Individuals, partnerships, and corporations (include all certified and official checks) n.a. 3,106,326 n.a. 1,835,600 1,270,726 101 U.S. government n.a. 27,595 n.a. 27,129 466 102 States and political subdivisions in the United States n.a. 136,984 n.a. 61,622 75,362 103 Commercial banks and other depository institutions in the United States n.a. 17,560 n.a. 4,936 12,624 104 Banks in foreign countries n.a. 2,267 n.a. 2,060 208 105 Foreign governments and official institutions (including foreign central banks) n.a. 247 n.a. 245 2 106 Federal funds purchased and securities sold under agreements to repurchase 554,168 510,029 427,300 383,161 126,868 107 Federal funds purchased in domestic offices 213,919 213,919 156,904 156,904 57,015 108 Securities sold under agreements to repurchase 340,249 296,110 270,396 226,257 69,853 109 Trading liabilities 243,966 n.a. 243,281 n.a. 685 110 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) 550,582 519,868 340,479 309,765 210,104 111 Banks' liability on acceptances executed and outstanding 5,754 3,949 5,532 3,727 222 112 Subordinated notes and debentures to deposits 94,097 n.a. 85,741 n.a. 8,357 113 Net due to own foreign offices, Edge Act and agreement subsidiaries, and IBFs n.a. n.a. n.a. 141,260 n.a. 114 All other liabilities 207,454 n.a. 173,145 n.a. 34,309 115 Minority interest in consolidated subsidiaries 12,259 n.a. 10,388 n.a. 1,871 116 Total equity capital 631,187 n.a. 409,659 n.a. 221,529 MEMO 117 Trading assets at large banks2 396,263 211,562 391,280 206,579 4,983 118 U.S. Treasury securities (domestic offices) n.a. 25,833 n.a. 24,739 1,094 119 U.S. government agency obligations (excluding MBS) n.a. 13,219 n.a. 12,502 717 120 Securities issued by states and political subdivisions in the United States n.a. 1,507 n.a. 1,153 354 121 Mortgage-backed securities n.a. 11,322 n.a. 9,558 1,764 122 Other debt securities n.a. 33,257 n.a. 33,003 254 123 Other trading assets n.a. 19,947 n.a. 19,640 306 124 Trading assets in foreign offices 104,970 0 104,970 0 0 125 Revaluation gains on interest rate, foreign exchange rate, and other commodity and equity contracts 186,209 106,478 185,716 105,985 493 126 Total individual retirement (IRA) and Keogh plan accounts n.a. 165,562 n.a. 76,320 89,242 127 Total brokered deposits n.a. 241,327 n.a. 108,420 132,907 128 Fully insured brokered deposits n.a. 167,213 n.a. 66,599 100,614 129 Issued in denominations of less than $100,000 n.a. 91,534 n.a. 31,672 59,862 130 Issued in denominations of $100,000, or in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less n.a. 75,678 n.a. 34,926 40,752 131 Money market deposit accounts (MMDAs) n.a. 1,451,953 n.a. 970,515 481,437 132 Other savings deposits (excluding MMDAs) n.a. 569,392 n.a. 341,551 227,841 133 Total time deposits of less than $100,000 n.a. 699,080 n.a. 300,656 398,424 134 Total time deposits of $ 100,000 or more n.a. 570,554 n.a. 318,868 251,686 135 Number of banks 7,867 7,867 128 n.a. 7,739 NOTE. The notation "n.a." indicates the lesser detail available from banks that do not have Foreign offices include branches in foreign countries, Puerto Rico, and US.-affiliated foreign offices, the inapplicability of certain items to banks that have only domestic offices, or insular areas; subsidiaries in foreign countries; all offices of Edge Act and agreement the absence of detail on a fully consolidated basis for banks that have foreign offices. corporations wherever located; and international banking facility (IBF). 1. All transactions between domestic and foreign offices of a bank are reported in "net due 2. Components of "Trading Assets at Large Banks" are reported only by banks that from" and "net due to" lines. All other lines represent transactions with parties other than the reported trading assets of $2 million or more any quarter of the preceding calendar year. domestic and foreign offices of each bank. Because these intra-office transactions are nullified by consolidation, total assets and total liabilities for the entire bank may not equal the sum of assets and liabilities, respectively, of the domestic and foreign offices. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 Special Tables • May 2003 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, February 3-7, 2003 A. Commercial and industrial loans made by all commercial banks' Weighted- WWeeiigghhtteedd-- Amount of loans (percent) e a f v f e e r c a ti g v e e AAAmmm lllooo ooo aaa uuu nnn nnn sss ttt ooofff AAAvvveeerrr sss aaa iii ggg zzz eee eee llloooaaannn mm aavv aatt ee uu rr rr aa ii gg ttyy ee 33 loan rate (((mmmiiilllllliiiooonnnsss (((ttthhhooouuusssaaannndddsss ooofff Secured by SSuubbjjeecctt ttoo Made under (percent)2 ooofff dddooollllllaaarrrsss))) dddooollllllaaarrrsss))) Days collateral CCaallllaabbllee pprree pp pp ee aa nn yy aa mm llttyy ee nntt commitment LOAN RISK5 1 All commercial and industrial loans 3.20 66,047 412 377 41.9 10.1 25.5 71.7 2 Minimal risk 2.14 2,394 384 295 44.6 6.3 38.6 80.7 3 Low risk 2.50 9,435 798 508 19.0 6.2 30.8 64.0 4 Moderate risk 3.36 18,363 359 548 50.8 20.3 16.1 83.4 5 Other 3.38 26,034 491 258 46.7 5.0 28.3 70.3 By maturity/repricing interval6 6 Zero interval 3.92 12,186 216 452 56.3 18.0 8.1 73.5 7 Minimal risk 1.64 871 714 315 66.6 5.6 63.2 87.9 8 Low risk 2.56 3,178 692 294 19.1 4.0 4.0 28.0 9 Moderate risk 4.25 4,467 194 505 70.3 29.7 5.1 91.2 10 Other 5.20 3,325 167 580 67.1 16.3 2.3 88.4 11 Daily 2.81 22,643 540 234 29.6 12.0 27.9 62.7 12 Minimal risk 1.81 362 1,398 24 6.5 12.0 * 96.5 13 Low risk 2.02 2,479 1,911 101 7.5 4.4 80.4 77.1 14 Moderate risk 3.01 4,232 452 736 39.0 41.0 3.2 65.0 15 Other 2.62 10,408 802 70 30.5 3.1 23.6 58.6 16 2 to 30 days 2.95 18,785 624 383 37.1 5.4 35.3 77.0 17 Minimal risk 2.64 582 348 183 27.0 7.0 21.3 81.7 18 Low risk 2.56 2,396 886 1213 9.5 6.0 17.6 88.1 19 Moderate risk 2.79 5,393 730 446 36.1 8.0 29.6 89.4 20 Other 3.25 7,873 586 173 49.1 2.5 48.3 69.7 21 31 to 365 days 3.28 9,313 485 345 50.9 4.7 29.7 76.1 22 Minimal risk 2.40 511 208 461 51.7 2.3 44.4 60.5 23 Low risk 2.93 1,051 458 374 54.4 14.6 34.0 78.8 24 Moderate risk 3.23 3,116 461 343 58.5 3.4 31.4 86.7 25 Other 3.78 3,152 962 388 55.4 4.0 31.0 83.5 Months 26 More than 365 days 4.70 2,783 245 41 78.7 5.7 4.3 82.5 27 Minimal risk 4.08 62 103 39 59.3 .1 34.0 45.6 28 Low risk 4.85 182 212 51 81.7 28.2 4.2 81.7 28 Moderate risk . . 4.42 1,068 245 36 68.6 5.1 2.0 83.6 30 Other 4.75 1,202 421 43 89.6 2.4 4.2 89.5 Weighted- Weighted- average average risk maturity/ rating5 repricing interval6 Days SIZE OF LOAN (thousands of dollars) 31 1-99 5.33 2,853 3.4 132 82.7 27.6 2.2 84.8 32 100-999 4.47 9,683 3.4 114 70.3 17.9 6.9 88.1 33 1,000-9,999 3.32 19,801 3.4 81 38.5 8.9 23.3 78.3 34 10,000 or more 2.58 33,710 3.3 47 32.2 7.1 34.1 61.9 BASE RATE OF LOAN4 35 Prime7 4.72 16,572 3.4 64 70.6 21.0 1.7 89.6 36 Fed funds 1.98 14,465 3.4 16 2.4 2.0 35.9 60.1 37 Other domestic 2.51 5,266 3.0 23 16.9 32.7 47.5 23.2 38 Foreign 2.90 17,926 3.4 93 47.4 3.6 46.8 79.3 39 Other 3.34 11,818 3.3 135 52.6 4.8 3.8 70.7 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A61 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, February 3-7, 2003—Continued B. Commercial and industrial loans made by all domestic banks1 W ( l e p a o f e e v a f i r e e n g c r c h e a r t t n i a g e v t t e d ) e e 2 - A o ( f m m l d o o il o a u l l i n n l o s a t n r o s s ) f ( A th v o d e u r o s a s l i g l a z a e n e r d s l ) s o a o n f W m a e v a D i t e g u a r h y r a i t s g t e y e d 3 - S c e o c l u la re te d r a b l y Amount of loan p s S re p ( u p p e b e a n j r e y a c c m l e t t y n e t t o n ) t c M om ad m e i u tm nd e e n r t LOAN RISK5 1 All commercial and industrial loans 3.68 39,831 258 579 55.0 16.6 4.0 2 Minimal risk 2.15 1,531 250 343 63.5 9.8 37.6 3 Low risk 2.69 6,188 559 669 22.8 9.5 5.1 55.5 4 Moderate risk 3.59 14,504 291 664 59.9 25.3 2.4 81.5 5 Other 4.65 10,477 210 581 72.4 12.3 2.0 85.7 By maturity/repricing interval6 6 Zero interval 3.89 11,162 202 444 58.1 19.7 8.7 71.1 7 Minimal risk 1.63 869 717 316 66.5 5.7 63.4 87.8 8 Low risk 2.39 2,871 649 242 15.6 4.4 4.1 20.3 9 Moderate risk 4.27 4,202 184 496 72.4 31.6 5.4 90.6 10 Other 5.30 2,875 148 621 73.4 18.9 2.7 11 Daily 3.66 9,874 243 557 50.5 27.4 1.0 76.0 12 Minimal risk 1.88 77 329 173 30.3 55.9 83.4 13 Low risk 3.03 490 420 191 38.2 22.2 1.3 79.3 14 Moderate risk 3.20 3,620 393 871 45.6 47.9 1.3 60.1 15 Other 4.34 2,227 183 360 65.2 14.6 .1 81.6 16 2 to 30 days 3.28 9,898 356 679 44.1 9.5 1.0 86.3 17 Minimal risk 2.76 323 199 314 48.6 12.5 .1 90.1 18 Low risk 2.77 1,848 759 1,531 9.7 7.8 .1 92.8 19 Moderate risk 2.89 3,385 506 678 47.1 10.7 .3 88.2 20 Other 4.47 2,533 206 433 67.7 7.6 .3 82.1 21 31 to 365 days 3.54 5,942 326 369 63.4 7.3 5.3 77.4 22 Minimal risk 2.93 193 79 256 88.4 6.1 1.4 44.0 23 Low risk 2.93 796 365 355 56.3 19.3 23.1 75.4 24 Moderate risk 3.64 2,151 327 403 76.3 4.9 2.2 87.3 25 Other 4.22 1,573 577 468 74.1 8.1 4.9 91.8 26 More than 365 days 4.69 2,781 245 78.7 5.8 4.3 82.5 27 Minimal risk 4.08 62 103 59.3 .1 34.0 45.6 28 Low risk 4.85 182 212 81.7 28.2 4.2 81.7 28 Moderate risk ... 4.42 1,068 245 68.6 5.1 2.0 83.6 30 Other 4.75 1,200 421 89.5 2.4 4.2 89.5 Weighted- Weighted- average average risk maturity/ rating5 repricing interval® Days SIZE OF LOAN (thousands of dollars) 31 1-99 5.34 2,823 3.4 134 83.2 27.9 1.9 32 100-999 4.56 8,762 3.4 122 75.2 19.7 2.3 88.3 33 1,000-9,999 3.61 12,794 3.2 113 51.8 13.8 2.6 83.5 34 10,000 or more 2.94 15,453 2.8 85 41.0 15.2 6.6 66.2 BASE RATE OF LOAN4 35 Prime7 4.69 15,817 3.4 66 72.1 1.4 89.3 36 Fed funds 1.89 3,284 2.4 44 8.1 .7 29.5 37 Other domestic 2.41 2,771 2.9 35 32.0 62.2 .1 42.2 38 Foreign 3.13 8,928 3.2 154 51.8 7.2 10.7 79.7 39 Other 3.50 9,031 2.9 173 52.3 6.3 4.3 84.9 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 Special Tables • May 2003 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, February 3-7, 2003—Continued C. Commercial and industrial loans made by large domestic banks' Weighted- Amount of Average loan W a e v i e g r h a t g e e d - Amount of loans (percent) ( l e p o f e a f r e n c c e r t n i a v t t ) e e 2 o ( f m l d o i o l a l l i n l o a s n r s s ) (tho d u o s s l i l a z a n e r d s s ) of ma D tu ay ri s t y3 S c e o c l u la re te d r a b l y p S re p u p e b a n je y a c m lt t y e t o n t c M om ad m e i u tm nd e e n r t LOAN RISK5 1 All commercial and industrial loans 3.49 34,391 417 548 51.5 15.4 3.5 79.4 2 Minimal risk 1.72 1,127 538 230 62.9 9.0 39.8 81.7 3 Low risk 2.32 5,378 2,139 625 14.1 7.1 5.4 55.2 4 Moderate risk 3.37 12,892 555 612 56.6 24.8 1.9 81.5 5 Other 4.55 9,150 286 567 69.8 10.2 1.0 86.9 By maturity/repricing interval6 6 Zero interval 3.64 8,649 440 399 51.1 16.5 9.0 69.5 7 Minimal risk 1.19 589 1,530 148 66.3 .7 75.9 85.6 8 Low risk 2.00 2,423 4,691 107 5.3 .5 4.2 17.1 9 Moderate risk 4.11 3,389 336 496 69.4 32.1 5.3 91.6 10 Other 5.35 2,232 261 679 69.3 14.0 2.3 88.6 11 Daily 3.63 9,119 252 529 49.7 28.2 77.8 12 Minimal risk 1.71 74 554 178 27.4 58.2 84.9 13 Low risk 2.76 431 611 153 30.2 20.8 1.4 81.0 14 Moderate risk 3.03 3,330 455 773 42.0 49.4 .0 57.0 15 Other 4.26 2,108 189 356 63.7 15.0 .0 83.6 16 2 to 30 days 3.23 9,139 444 684 42.9 8.5 87.4 17 Minimal risk 2.73 301 212 323 48.8 13.4 89.5 18 Low risk 2.66 1,796 1,751 1,562 7.7 7.1 93.0 19 Moderate risk 2.78 3,206 812 631 44.9 8.4 .2 87.7 20 Other 4.43 2,307 230 401 65.5 7.1 .0 80.8 21 31 to 365 days 3.24 5,188 1,994 378 60.2 6.0 4.5 78.1 22 Minimal risk 1.66 130 1,282 255 94.4 6.3 1.4 41.0 23 Low risk 2.20 644 3.304 362 47.2 23.7 28.3 71.2 24 Moderate risk 3.43 2,023 2,292 393 76.0 4.3 2.3 88.9 25 Other 4.07 1,415 1,552 500 71.7 3.8 .0 92.1 26 More than 365 days 4.09 2,126 895 75.1 94.1 27 Minimal risk 2.43 26 639 84.7 97.5 28 Low risk 2.60 83 1,443 66.9 .0 92.6 28 Moderate risk . . 3.92 868 1,081 62.9 4.0 1.7 94.6 30 Other 4.38 1,020 1,180 1.6 3.4 96.1 Weighted- Weighted- average average risk maturity/ rating5 repricing interval® Days SIZE OF LOAN (thousands of dollars) 31 1-99 4.68 1,572 3.6 45 81.0 27.9 .7 90.8 32 100-999 4.24 6,391 3.5 65 70.7 16.2 1.1 93.7 33 1,000-9,999 3.62 11,315 3.3 109 51.5 13.7 2.4 87.8 34 10,000 or more 2.95 15,112 2.9 40.3 15.1 5.6 66.0 BASE RATE OF LOAN4 35 Prime7 4.52 12,563 3.4 54 68.3 18.8 92.0 36 Fed funds 1.87 3,217 2.4 25 7.9 8.2 28.8 37 Other domestic 2.31 2,679 3.0 12 30.2 63.9 41.1 38 Foreign 3.12 8,522 3.2 159 51.4 6.2 10.0 79.8 39 Other 3.30 7,410 2.9 119 49.8 5.8 3.1 93.5 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A63 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, February 3-7, 2003—Continued D. Commercial and industrial loans made by small domestic banks1 W ( e l p a o f e e v a f i r e e n g c r c h e a t r t n i g a e v t t e d ) e e 2 - A o ( f m m l d o o il o a u l l i n n l o s a t n r o s s ) f ( A th v o d e u r o s a s l i g l a z a e n e r d s l ) s o a o n f W m a e a v D i t e g u a r h y r a i t s g t e y e d 3 - S c e o c l u la re te d r a b l y Amount of loan p s S re ( p u p p e b e a n j r e y a c c m l e t t y n e t t o n ) t c M om ad m e i u tm nd e e n r t LOAN RISK5 1 All commercial and industrial loans 4.89 5,440 75 776 77.1 24.3 7.3 68.5 2 Minimal risk 3.34 405 100 722 65.1 12.1 31.3 78.3 3 Low risk 5.20 810 95 996 25.0 3.3 57.6 4 Moderate risk 5.35 1,613 60 1,115 86.1 29.0 6.6 81.0 5 Other 5.40 1,327 74 676 90.4 26.6 9.4 77.0 By maturity/repricing interval6 6 Zero interval 4.75 2,512 70 621 81.9 30.9 7.7 76.5 7 Minimal risk 2.56 280 339 771 66.8 16.2 37.3 92.6 8 Low risk 4.50 448 115 1,149 71.1 25.4 3.6 37.7 9 Moderate risk 4.95 813 64 494 84.9 29.5 6.0 86.4 10 Other 5.12 643 59 426 87.8 35.9 3.9 80.4 11 Daily 4.07 755 854 60.2 18.4 6.5 53.9 12 Minimal risk 13 Low risk 5.01 59 129 422 95.5 32.3 66.9 14 Moderate risk 5.16 290 153 1,938 86.2 30.9 16.4 95.4 15 Other 5.62 119 111 419 92.9 8.1 1.0 46.0 16 2 to 30 days 3.97 759 105 624 58.9 22.1 1.3 72.6 17 Minimal risk 3.25 22 109 179 46.5 1.2 1.2 98.7 18 Low risk 6.29 52 37 373 78.0 31.8 2.5 86.1 19 Moderate risk 4.90 178 65 1,529 86.7 53.7 1.1 98.4 20 Other 4.86 226 99 740 11.8 2.8 95.2 21 31 to 365 days 5.59 754 308 84.9 16.6 10.7 72.5 22 Minimal risk 5.53 64 259 76.4 5.5 1.4 50.0 23 Low risk 5.99 152 328 94.7 .8 .9 93.1 24 Moderate risk 6.99 128 561 80.7 15.1 1.1 62.1 25 Other 5.52 159 189 96.2 46.5 47.9 89.2 26 More than 365 days 6.66 655 73 90.4 16.5 9.9 44.8 27 Minimal risk 5.28 36 64 40.9 .2 58.6 8.2 28 Low risk 6.73 99 124 94.1 51.7 7.7 72.7 28 Moderate risk . .. 6.61 199 56 93.3 9.7 3.3 35.4 30 Other 6.83 180 91 93.8 6.7 9.0 51.9 Weighted- Weighted- average average risk maturity/ rating5 repricing interval" Days SIZE OF LOAN (thousands of dollars) 31 1-99 6.18 1,251 3.1 243 86.0 27.8 3.5 77.2 32 100-999 5.43 2,371 3.2 277 87.4 28.9 5.4 73.8 33 1,000-9,999 3.55 1,478 2.8 143 53.6 14.7 4.1 51.0 34 10,000 or more BASE RATE OF LOAN4 35 Prime7 5.35 3,255 3.2 110 87.0 31.8 3.3 78.9 36 Fed funds 3.03 67 1.9 932 17.4 39.7 31.7 63.8 37 Other domestic 5.48 91 2.7 695 85.9 11.8 4.4 72.8 38 Foreign 3.37 407 2.6 46 59.2 27.8 26.0 77.1 39 Other 4.40 1,621 2.6 420 63.8 8.3 9.9 45.2 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 Special Tables • May 2003 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, February 3-7, 2003—Continued E. Commercial and industrial loans made by U.S. branches and agencies of foreign banks1 Weighted- WWeeiigghhtteedd-- Amount of loans (percent) ( e l p a o f e v a f r e e n c r c e a r t n i g a v t t e ) e e 2 AAA ooo ((( fff mmm mmm lll ddd ooo ooo iii ooo lll aaa uuu lll lll iii nnn nnn lll ooo aaa sss ttt nnn rrr ooo sss sss ))) fff ((( AAA ttthhh vvv ooo ddd eee uuu ooo rrr sss aaa sss lll iii lll ggg aaa zzz aaa nnn eee eee rrr ddd sss lll ))) sss ooo aaa ooo nnn fff mm aavv aa D tt ee uu a rr y rr aa ii s gg tt yy ee 33 S c e o c l u la re te d r a b l y CCaallllaabbllee pp SS rree pp uu pp ee bb aa nn jjee yy aa cc mm lltt tt yy ee tt nn oo tt c M om ad m e i u tm nd e e n r t bbaa cc ss oo ee MM mm pp oo mm rr ss ii tt oo cc nn iinn gg LOAN RISK5 1 All commercial and industrial loans 2.47 26,216 4,691 87 21.9 .3 58.1 62.1 Fed funds 2 Minimal risk 2.11 863 8,425 220 11.1 40.3 80.6 Fed funds 3 Low risk 2.12 3,247 4,359 202 11.8 79.8 80.1 Fed funds 4 Moderate risk 2.51 3,859 3,104 112 16.6 1.8 67.6 90.9 Foreign 5 Other 2.52 15,558 5,170 58 29.4 .0 46.0 60.0 Fed funds By maturity/repricing interval6 6 Zero interval 4.27 1,024 1,095 551 37.0 .0 1.2 99.4 Prime 7 Minimal risk 8 Low risk 4.11 307 1,832 784 51.7 3.3 100.0 Foreign 9 Moderate risk 3.95 265 1,263 682 37.1 .6 100.0 Prime 10 Other 4.58 450 819 293 26.7 .1 98.7 Other 11 Daily 2.16 12,769 9,819 14 13.5 .0 48.8 52.4 Fed funds 12 Minimal risk 13 Low risk 1.77 1,989 15,256 81 : 99.9 76.6 Fed funds 14 Moderate risk 1.90 612 4,150 1 14.0 93.8 Fed funds 15 Other 2.15 8,181 10,544 1 21.0 30.0 52.4 Fed funds 16 2 to 30 days 2.59 8,886 3,836 66 29.2 .8 73.4 66.7 Foreign 17 Minimal risk 18 Low risk 1.86 548 2,031 218 9.0 76.8 72.1 Foreign 19 Moderate risk 2.60 2,008 2,888 41 17.5 3.5 79.2 91.4 Foreign 20 Other 2.67 5,339 4,733 56 40.3 .1 71.1 63.9 Foreign 21 31 to 365 days 2.81 3,371 3,526 303 29.0 72.7 73.8 Foreign 22 Minimal risk * 23 Low risk 2.94 255 2,194 431 48.7 : 68.0 89.5 Foreign 24 Moderate risk 2.31 965 5,181 211 18.8 96.4 85.3 Foreign 25 Other 3.34 1,578 2,890 310 36.7 57.1 75.2 Foreign Months 26 More than 365 days * * * * * * * * * 27 Minimal risk . . . * * * * * * * * * 28 Low risk * * * * * * * * * 28 Moderate risk . . * * * * * * * * * 30 Other * * * * * * * * * Weighted- Weighted- average average risk maturity/ rating5 repricing interval" Days SIZE OF LOAN (thousands of dollars) 31 1-99 4.46 31 3.9 28 34.4 3.5 24.8 85.9 Prime 32 100-999 3.55 921 3.5 31 23.0 1.3 50.8 86.0 Foreign 33 1,000-9,999 2.80 7,007 3.6 22 14.3 .1 61.0 68.9 Foreign 34 10,000 or more 2.29 18,257 3.8 15 24.7 .3 57.3 58.3 Fed funds Average size (thousands of dollars) BASE RATE OF LOAN4 35 Prime7 5.28 755 3.6 23 38.0 10.1 8.6 95.8 690 36 Fed funds 2.00 11,181 3.6 8 .8 46.2 69.1 7,205 37 Other domestic 2.62 2,495 4.1 10 .1 100.0 2.1 6,784 38 Foreign 2.67 8,998 3.6 33 43.1 82.7 78.9 4,383 39 Other 2.82 2,788 4.5 9 53.5 .0 2.0 24.9 5,347 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A65 NOTES TO TABLE 4.23 NOTE. The Survey of Terms of Business Lending collects data on gross loan extensions 5. A complete description of these risk categories is available from the Banking Analysis made during the first full business week in the mid-month of each quarter. The authorized Section, Mail Stop 81, Board of Governors of the Federal Reserve System, Washington, DC panel size for the survey is 348 domestically chartered commercial banks and 50 U.S. 20551. The category "Moderate risk" includes the average loan, under average economic branches and agencies of foreign banks. The sample data are used to estimate the terms of conditions, at the typical lender. The category "Other" includes loans rated "acceptable" as loans extended during that week at all domestic commercial banks and all U.S. branches and well as special mention or classified loans. The weighted-average risk rating published for agencies of foreign banks. Note that the terms on loans extended during the survey week may loans in rows 31-39 are calculated by assigning a value of "1" to minimal risk loans; "2" to differ from those extended during other weeks of the quarter. The estimates reported here are low risk loans; "3" to moderate risk loans, "4" to acceptable risk loans; and "5" to special not intended to measure the average terms on all business loans in bank portfolios. mention and classified loans. These values are weighted by loan amount and exclude loans 1. As of March 31, 2001, assets of the large banks were at least $4 billion. Median total with no risk rating. Some of the loans in lines 1,6, 11, 16, 21, 26, and 31-39 are not rated for assets for all insured banks were roughly $80 million. Assets at all U.S. branches and agencies risk. averaged $2.7 billion. 6. The maturity/repricing interval measures the period from the date the loan is made until 2. Effective (compounded) annual interest rates are calculated from the stated rate and it first may reprice or it matures. For floating-rate loans that are subject to repricing at any other terms of the loans and weighted by loan amount. The standard error of the loan rate for time—such as many prime-based loans—the maturity/repricing interval is zero. For floatingall commercial and industrial loans in the current survey (line 1, column 1) is 0.10 percentage rate loans that have a scheduled repricing interval, the maturity/repricing interval measures point. The chances are about two out of three that the average rate shown would differ by less the number of days between the date the loan is made and the date on which it is next than this amount from the average rate that would be found by a complete survey of the scheduled to reprice. For loans having rates that remain fixed until the loan matures universe of all banks. (fixed-rate loans), the matuirty/repricing interval measures the number of days between the 3. Average maturities are weighted by loan amount and exclude loans with no stated date the loan is made and the date on which it matures. Loans that reprice daily mature or maturities. reprice on the business day after they are made. Owing to weekends and holidays, such loans 4. The most common base pricing rate is that used to price the largest dollar volume of may have maturity/repricing intervals in excess of one day; such loans are not included in the loans. Base pricing rates include the prime rate (sometimes referred to as a bank's "base" or "2 to 30 day" category. "reference" rate); the federal funds rate; domestic money market rates other than the prime 7. For the current survey, the average reported prime rate, weighted by the amount of loans rate and the federal funds rate; foreign money market rates; and other base rates not included priced relative to a prime base rate, was 4.31 percent for all banks, 4.25 percent for large in the foregoing classifications. domestic banks, 4.55 percent for small domestic banks, and 4.27 percent for U.S. branches and agencies of foreign banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Special Tables • May 2003 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, December 31, 20021 Millions of dollars except as noted All states2 New York California Illinois IItteemm in I c T B l o u F t d a s i l 3 n g o IB nl F y s 3 inc T I l B o u F t d a s i l n g I o B n F ly s inc T I l B o u F t d a s i l n g I o B n F ly s inc T I l B o u F t d a s i l n g I o B n F ly s 1 Total assets4 1,007,168 125,560 872,801 98,716 18,164 5,123 34,618 4,964 2 Claims on nonrelated parties 771,347 49,208 677,852 46,605 16,102 1,308 32,487 94 3 Cash and balances due from depository institutions 59,688 18,416 53,581 17,765 1,060 476 782 50 4 Cash items in process of collection and unposted debits 2,266 0 2,234 0 1 0 22 0 5 Currency and coin (U.S. and foreign) 12 n.a. 9 n.a. 1 n.a. 0 n.a. 6 Balances with depository institutions in United States 40,712 9,000 36,304 8,624 798 244 695 50 7 U.S. branches and agencies of other foreign banks (including their IBFs) 33,936 8,463 29,911 8,151 613 194 655 5500 X Other depository institutions in United States (including their IBFs) 6,775 537 6,392 474 185 50 40 0 9 Balances with banks in foreign countries and with foreign central banks 15,645 9,416 14,114 9,141 236 232 34 0 10 Foreign branches of U.S. banks 393 322 373 302 20 20 0 0 11 Banks in home country and home-country central banks 4,218 1,964 3,032 1,964 0 0 7 0 12 All other banks in foreign countries and foreign central banks 11,034 7,129 10,709 6,874 216 212 27 0 13 Balances with Federal Reserve Banks 1,055 n.a. 921 n.a. 25 n.a. 31 n.a. 14 Total securities and loans 424,554 23,642 356,180 21,716 14,611 813 25,561 43 15 Total securities, book value 130,729 4,273 115,871 3,954 1,483 269 4,285 2 16 U.S. Treasury 16,877 n.a. 15,470 n.a. 60 n.a. 1,262 n.a. 17 Obligations of U.S. government agencies and corporations 28,619 n.a. 26,854 n.a. 74 n.a. 1,272 n.a. IX Other bonds, notes, debentures, and corporate stock (including state and local securities) 85,233 4,273 73,547 3,954 1,349 269 1,751 2 19 Securities of foreign governmental units 9,441 2,739 9,028 2,670 67 40 298 2 20 Mortgage-backed securities 23,282 0 20,625 0 237 0 0 0 21 Other asset-backed securities 14,944 56 9,422 56 0 0 0 0 22 All other 37,566 1,478 34,473 1,229 1,045 229 1,453 0 23 Federal funds sold and securities purchased under agreements to resell 120,433 6,267 119,394 6,252 241 15 348 0 24 Depository institutions in the United States 30,063 4,077 29,408 4,062 241 15 0 0 25 Other 90,370 2,190 89,986 2,190 0 0 348 0 26 Total loans, gross 294,159 19,381 240,579 17,771 13,154 545 21,284 42 27 LESS: Unearned income on loans 334 12 270 10 26 1 8 0 28 EQUALS: Loans, net 293,825 19,369 240,309 17,762 13,128 544 21,276 42 Total loans, gross, by category 29 Real estate loans 19,028 64 15,047 6644 3,132 0 6600 00 30 Loans to depository institutions and acceptances of other banks 68,772 6,575 56,024 5,550 2,165 439 6,176 41 31 Commercial banks in United States (including their IBFs) 4,531 977 3,537 563 686 268 5 0 32 U.S. branches and agencies of other foreign banks 3,008 947 2,050 533 682 268 0 0 33 Other commercial banks in United States 1,523 30 1,487 30 5 0 5 0 34 Other depository institutions in United States (including their IBFs) . . . 29 0 29 0 0 0 0 0 35 Banks in foreign countries 11,694 5,312 9,632 4,701 221 171 862 41 36 Foreign branches of U.S. banks 267 229 267 229 0 0 0 0 37 Other banks in foreign countries 11,426 5,083 9,364 4,472 221 171 862 41 38 Loans to other financial institutions 52,518 286 42,826 286 1,258 0 5,309 0 39 Commercial and industrial loans 186,947 11,036 152,144 10,512 7,458 85 14,062 1 40 U.S. addressees (domicile) 150,369 80 120,618 80 6,957 0 12,475 0 41 Non-U.S. addressees (domicile) 36,578 10,956 31,526 10,432 501 85 1,587 1 42 Loans to foreign governments and official institutions (including foreign central banks) 4,533 1,596 3,830 1,547 216 22 280 0 43 Loans for purchasing or carrying securities (secured and unsecured) 10,143 0 9,807 0 0 0 150 0 44 All other loans 3,973 109 3,421 98 184 0 101 0 45 Lease financing receivables (net of unearned income) 763 0 307 0 0 0 456 0 46 U.S. addressees (domicile) 710 0 307 0 0 0 403 0 47 Non-U.S. addressees (domicile) 53 0 0 0 0 0 53 0 48 Trading assets 131,914 176 116,806 176 25 0 4,131 0 49 All other assets 34,757 708 31,891 696 165 5 1,666 1 50 Customers' liabilities on acceptances outstanding 843 n.a. 401 n.a. 45 n.a. 374 n.a. 51 U.S. addressees (domicile) 386 n.a. 312 n.a. 44 n.a. 30 n.a. 52 Non-U.S. addressees (domicile) 457 n.a. 89 n.a. 1 n.a. 344 n.a. 53 Other assets including other claims on nonrelated parties 33,914 708 31,490 696 120 5 1,292 1 54 Net due from related depository institutions5 235,822 76,353 194,949 52,112 2,062 3,815 2,131 4,871 55 Net due from head office and other related depository institutions5 235,822 n.a. 194,949 n.a. 2,062 n.a. 2,131 n.a. 56 Net due from establishing entity, head office, and other related depository institutions5 n.a. 76,353 n.a. 52,112 n.a. 3,815 n.a. 4,871 57 Total liabilities4 1,007,168 125,560 872,801 98,716 18,164 5,123 34,618 4,964 58 Liabilities to nonrelated parties 888,732 112,308 777,460 85,885 10,493 5,008 30,954 4,922 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A67 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, December 31, 2002'—Continued Millions of dollars except as noted All states2 New York California Illinois IItteemm ex I c T B l o u F t d a s i l 3 n g o IB nl F y s 3 exc T I l B o u t F d a s i l n g I o B n F ly s exc T I l B o u F t d a s i l n g I o B n F ly s exc T I l B o u t F d a s i l n g I o B n F ly s 59 Total deposits and credit balances 413,366 74,253 354,840 57,243 4,485 2,161 11,462 2,673 60 Individuals, partnerships, and corporations (including certified and official checks) 327,458 8,379 274,723 44,,441188 3,944 114499 1100,,993355 9 61 U.S. addressees (domicile) 311,869 256 264,607 256 2,574 0 10,887 0 6? Non-U.S. addressees (domicile) 15,589 8,122 10,116 4,162 1,370 149 4488 9 63 Commercial banks in United States (including their IBFs) 50,406 8,113 47,184 7,378 495 240 552255 227 64 U.S. branches and agencies of other foreign banks 16,155 7,101 15,650 6,403 35 240 0 227 65 Other commercial banks in United States 34,251 1,012 31,534 975 460 0 525 0 66 Banks in foreign countries 8,357 30,893 7,963 24,422 24 991 0 681 67 Foreign branches of U.S. banks 1,054 3,914 1,054 2,918 0 54 0 434 68 Other banks in foreign countries 7,303 26,979 6,909 21,505 24 937 0 248 69 Foreign governments and official institutions (including foreign central banks) 6,851 26,868 66,,550099 2211,,002255 6 778811 11 11,,775566 70 All other deposits and credit balances 20,293 0 18,462 0 16 0 00 0 71 Transaction accounts and credit balances (excluding IBFs) 9,587 n.a. 7,931 n.a. 275 n.a. 201 n.a. 72 Individuals, partnerships, and corporations (including certified and official checks) 7,677 n.a. 6,170 n.a. 223399 n.a. 119999 n.a. 73 U.S. addressees (domicile) 4,907 n.a. 4,554 n.a. 85 n.a. 194 n.a. 74 Non-U.S. addressees (domicile) 2,770 n.a. 1,617 n.a. 155 n.a. 5 n.a. 75 Commercial banks in United States (including their IBFs) 82 n.a. 82 n.a. 0 n.a. 0 n.a. 76 U.S. branches and agencies of other foreign banks 15 n.a. 15 n.a. 0 n.a. 0 n.a. 77 Other commercial banks in United States 67 n.a. 67 n.a. 0 n.a. 0 n.a. 78 Banks in foreign countries 1,366 n.a. 1,279 n.a. 24 n.a. 0 n.a. 79 Foreign branches of U.S. banks 1 n.a. 1 n.a. 0 n.a. 0 n.a. 80 Other banks in foreign countries 1,365 n.a. 1,279 n.a. 24 n.a. 0 n.a. 81 Foreign governments and official institutions (including foreign central banks) 353 n.a. 330022 n.a. 3 n.a. 11 n.a. 82 All other deposits and credit balances 109 n.a. 97 n.a. 9 n.a. 00 n.a. 83 Nontransaction accounts (including MMDAs, excluding IBFs) 403,779 n.a. 346,909 n.a. 4,210 n.a. 11,261 n.a. 84 Individuals, partnerships, and corporations (including certified and official checks) 319,782 n.a. 268,553 n.a. 33,,770055 n.a. 1100,,773366 n.a. 85 U.S. addressees (domicile) 306,962 n.a. 260,053 n.a. 2,490 n.a. 10,693 n.a. 86 Non-U.S. addressees (domicile) 12,820 n.a. 8,500 n.a. 1,216 n.a. 43 n.a. 87 Commercial banks in United States (including their IBFs) 50,324 n.a. 47,102 n.a. 495 n.a. 525 n.a. 88 U.S. branches and agencies of other foreign banks 16,139 n.a. 15,635 n.a. 35 n.a. 0 n.a. 89 Other commercial banks in United States 34,184 n.a. 31,467 n.a. 460 n.a. 525 n.a. 90 Banks in foreign countries 6,992 n.a. 6,684 n.a. 0 n.a. 0 n.a. 91 Foreign branches of U.S. banks 1,053 n.a. 1,053 n.a. 0 n.a. 0 n.a. 92 Other banks in foreign countries 5,939 n.a. 5,631 n.a. 0 n.a. 0 n.a. 93 Foreign governments and official institutions (including foreign central banks) 6,498 n.a. 66,,220066 n.a. 2 n.a. 00 n.a. 94 All other deposits and credit balances 20,184 n.a. 18,364 n.a. 7 n.a. 0 n.a. 95 IBF deposit liabilities n.a. 74,253 n.a. 57,243 n.a. 2,161 n.a. 2,673 96 Individuals, partnerships, and corporations (including certified and official checks) n.a. 8,379 n.a. 44,,441188 n.a. 114499 n.a. 9 97 US. addressees (domicile) n.a. 256 n.a. 256 n.a. 0 n.a. 0 98 Non-U.S. addressees (domicile) n.a. 8,122 n.a. 4,162 n.a. 149 n.a. 9 99 Commercial banks in United States (including their IBFs) n.a. 8,113 n.a. 7,378 n.a. 240 n.a. 227 100 U.S. branches and agencies of other foreign banks n.a. 7,101 n.a. 6,403 n.a. 240 n.a. 227 101 Other commercial banks in United States n.a. 1,012 n.a. 975 n.a. 0 n.a. 0 102 Banks in foreign countries n.a. 30,893 n.a. 24,422 n.a. 991 n.a. 681 103 Foreign branches of U.S. banks n.a. 3,914 n.a. 2,918 n.a. 54 n.a. 434 104 Other banks in foreign countries n.a. 26,979 n.a. 21,505 n.a. 937 n.a. 248 105 Foreign governments and official institutions (including foreign central banks) n.a. 26,868 n.a. 2211,,002255 n.a. 778811 n.a. 11,,775566 106 All other deposits and credit balances n.a. 0 n.a. 0 n.a. 0 n.a. 0 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Special Tables • May 2003 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, December 31, 20021—Continued Millions of dollars except as noted All states2 New York California Illinois IItteemm in I c T B l o u F t d a s i l 3 n g o IB nl F y s 3 inc T I l B o u t F d a s i l n g I o B n F ly s inc T I l B o u t F d a s i l n g I o B n F ly s inc T I l B o u t F d a s i l n g I o B n F ly s 107 Federal funds purchased and securities sold under agreements to repurchase 211,984 20,375 195,675 14,434 914 254 7,374 1,488 108 Depository institutions in the United States 32,043 3,867 24,117 2,839 602 239 3,671 520 109 Other 179,941 16,508 171,558 11,595 311 15 3,704 968 110 Other borrowed money 79,191 16,880 68,341 13,462 2,755 2,580 4,967 759 111 Owed to nonrelated commercial banks in United States (including their IBFs) 13,355 3,797 12,052 3,206 509 376 489 170 112 Owed to U.S. offices of nonrelated U.S. banks 7,337 917 6,915 832 198 85 189 0 113 Owed to U.S. branches and agencies of nonrelated foreign banks 6,017 2,880 5,137 2,374 311 291 300 170 114 Owed to nonrelated banks in foreign countries 11,916 10,378 9,610 8,220 1,566 1,536 591 589 115 Owed to foreign branches of nonrelated U.S. banks 957 802 782 690 132 112 0 0 116 Owed to foreign offices of nonrelated foreign banks 10,959 9,576 8,828 7,530 1,434 1,424 591 589 117 Owed to others 53,921 2,705 46,679 2,037 679 668 3,888 0 118 All other liabilities 109,937 800 101,361 747 179 13 4,478 3 119 Branch or agency liability on acceptances executed and outstanding 780 n.a. 448 n.a. 45 n.a. 225588 n.a. 120 Trading liabilities 78,117 46 72,344 45 15 0 2,975 1 121 Other liabilities to nonrelated parties 31,041 754 28,569 702 119 13 1,245 2 122 Net due to related depository institutions5 118,437 13,253 95,342 12,831 7,671 115 3,664 42 123 Net due to head office and other related depository institutions5 118,437 n.a. 95,342 n.a. 7,671 n.a. 3,664 n.a. 124 Net due to establishing entity, head office, and other related depository institutions5 n.a. 13,253 n.a. 12,831 n.a. 115 n.a. 4422 MEMO 125 Holdings of own acceptances included in commercial and industrial loans 575 n.a. 353 n.a. 1 n.a. 134 n.a. 126 Commercial and industrial loans with remaining maturity of one year or less (excluding those in nonaccrual status) 84,079 n.a. 61,891 n.a. 4,316 n.a. 9,619 n.a. 127 Predetermined interest rates 32,544 n.a. 19,752 n.a. 2,013 n.a. 6,859 n.a. 128 Floating interest rates 51,534 n.a. 42,139 n.a. 2,303 n.a. 2,760 n.a. 129 Commercial and industrial loans with remaining maturity of more than one year (excluding those in nonaccrual status) 94,298 n.a. 82,897 n.a. 2,976 n.a. 3,990 n.a. 130 Predetermined interest rates 16,826 n.a. 15,309 n.a. 424 n.a. 425 n.a. 131 Floating interest rates 77,473 n.a. 67,588 n.a. 2,552 n.a. 3,565 n.a. Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A69 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, December 31, 2002'—Continued Millions of dollars except as noted All states2 New York California Illinois IItteemm ex I c T B l o u F t d a s i l 3 n g o IB nl F y s 3 exc T IB l o u t F d a s i l n g I o B n F ly s exc T IB l o u t F d a s i l n g I o B n F ly s exc T IB l o u t F d a s i l n g I o B n F ly s 111133332222 CCCCoooommmmppppoooonnnneeeennnnttttssss ooooffff ttttoooottttaaaallll nnnnoooonnnnttttrrrraaaannnnssssaaaaccccttttiiiioooonnnn aaaaccccccccoooouuuunnnnttttssss,,,, iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ttttoooottttaaaallll ddddeeeeppppoooossssiiiittttssss aaaannnndddd ccccrrrreeeeddddiiiitttt bbbbaaaallllaaaannnncccceeeessss 413,231 n.a. 356,113 n.a. 4,063 n.a. 11,276 n.a. 111133333333 TTTTiiiimmmmeeee ddddeeeeppppoooossssiiiittttssss ooooffff $$$$ 111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee 396,718 n.a. 341,029 n.a. 4,054 n.a. 11,226 n.a. 111133334444 TTTTiiiimmmmeeee CCCCDDDDssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee wwwwiiiitttthhhh rrrreeeemmmmaaaaiiiinnnniiiinnnngggg mmmmaaaattttuuuurrrriiiittttyyyy ooooffff mmmmoooorrrreeee tttthhhhaaaannnn 11112222 mmmmoooonnnntttthhhhssss 16,513 n.a. 15,084 n.a. 9 n.a. 51 n.a. All states2 New York California Illinois Total Total Total Total including IBFs including IBFs including IBFs including IBFs IBFs3 only3 IBFs only IBFs only IBFs only 111133335555 IIIImmmmmmmmeeeeddddiiiiaaaatttteeeellllyyyy aaaavvvvaaaaiiiillllaaaabbbblllleeee ffffuuuunnnnddddssss wwwwiiiitttthhhh aaaa mmmmaaaattttuuuurrrriiiittttyyyy ggggrrrreeeeaaaatttteeeerrrr tttthhhhaaaannnn oooonnnneeee ddddaaaayyyy iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ooootttthhhheeeerrrr bbbboooorrrrrrrroooowwwweeeedddd mmmmoooonnnneeeeyyyy 37,357 n.a. 34,359 n.a. 1,777 n.a. 345 n.a. 111133336666 NNNNuuuummmmbbbbeeeerrrr ooooffff rrrreeeeppppoooorrrrttttssss ffffiiiilllleeeedddd6666 289 0 154 0 56 0 18 0 1. Data are aggregates of categories reported on the quarterly form FFIEC 002, "Report of either because the item is not an eligible IBF asset or liability or because that level of detail is Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks." The form was first not reported for IBFs. From December 1981 through September 1985, IBF data were used for reporting data as of June 30, 1980, and was revised as of December 31, 1985. From included in all applicable items reported. November 1972 through May 1980, U.S. branches and agencies of foreign banks had filed a 4. Total assets and total liabilities include net balances, if any, due from or owed to related monthly FR 886a report. Aggregate data from that report were available through the Federal banking institutions in the United States and in foreign countries (see note 5). On the former Reserve monthly statistical release G. 11, last issued on July 10, 1980. Data in this table and in monthly branch and agency report, available through the G. 11 monthly statistical release, the G. 11 tables are not strictly comparable because of differences in reporting panels and in gross balances were included in total assets and total liabilities. Therefore, total asset and total definitions of balance sheet items. liability figures in this table are not comparable to those in the G. 11 tables. 2. Includes the District of Columbia. 5. Related depository institutions includes the foreign head office and other U.S. and 3. Effective December 1981, the Federal Reserve Board amended Regulations D and Q to foreign branches and agencies of a bank, a bank's parent holding company, and majoritypermit banking offices located in the United States to operate international banking facilities owned banking subsidiaries of the bank and of its parent holding company (including (IBFs). Since December 31, 1985, data for IBFs have been reported in a separate column. subsidiaries owned both directly and indirectly). These data are either included in or excluded from the total columns as indicated in the 6. In some cases, two or more offices of a foreign bank within the same metropolitan area headings. The notation "n.a." indicates that no IBF data have been reported for that item, file a consolidated report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Federal Reserve Bulletin • May 2003 Index to Statistical Tables References are to pages A3-A69, although the prefix 'A" is omitted in this index. ACCEPTANCES, bankers (See Bankers acceptances) Federal Land Banks, 33 Assets and liabilities (See also Foreigners) Federal National Mortgage Association, 28, 32, 33 Commercial banks, 15-21, 58-59 Federal Reserve Banks Domestic finance companies, 30, 31 Condition statement, 10 Federal Reserve Banks, 10 Discount rates (See Interest rates) Foreign banks, U.S. branches and agencies, 66-9 U.S. government securities held, 5, 10, 11, 25 Foreign-related institutions, 20 Federal Reserve credit, 5, 6, 10, 12 Automobiles Federal Reserve notes, 10 Consumer credit, 34 Federally sponsored credit agencies, 28 Production, 42, 43 Finance companies Assets and liabilities, 30 BANKERS acceptances, 5, 10 Business credit, 31 Bankers balances, 15-21, 66-9 (See also Foreigners) Loans, 34 Bonds (See also U.S. government securities) Paper, 22, 23 New issues, 29 Float, 5 Rates, 23 Flow of funds, 35-9 Business loans (See Commercial and industrial loans) Foreign banks, U.S. branches and agencies, 66-9 Foreign currency operations, 10 CAPACITY utilization, 40, 41 Foreign deposits in U.S. banks, 5 Capital accounts Foreign exchange rates, 56 Commercial banks, 15-21, 58-59 Foreign-related institutions, 20 Federal Reserve Banks, 10 Foreigners Certificates of deposit, 23 Claims on, 46, 49-51, 53 Commercial and industrial loans Liabilities to, 45-8, 52, 54, 55 Commercial banks, 15-21, 58-59, 66-9 Weekly reporting banks, 17, 18 GOLD Commercial banks Certificate account, 10 Assets and liabilities, 15-21, 58-59 Stock, 5, 45 Commercial and industrial loans, 15-21, 58-59, 60-5 Government National Mortgage Association, 28, 32, 33 Consumer loans held, by type and terms, 34, 60-5 Real estate mortgages held, by holder and property, 33 INDUSTRIAL production, 42, 43 Terms of lending, 58-59 Insurance companies, 25, 33 Time and savings deposits, 4 Interest rates Commercial paper, 22, 23, 30 Bonds, 23 Condition statements (See Assets and liabilities) Commercial banks, 60-5 Consumer credit, 34 Consumer credit, 34 Corporations Federal Reserve Banks, 7 Security issues, 29, 55 Money and capital markets, 23 Credit unions, 34 Mortgages, 32 Currency in circulation, 5, 13 Prime rate, 22, 60-5 Customer credit, stock market, 24 International capital transactions of United States, 44-55 International organizations, 46, 47, 49, 52, 53 DEBT (See specific types of debt or securities) Investment companies, issues and assets, 30 Demand deposits, 15-21 Investments (See also specific types) Depository institutions Commercial banks, 4, 15-21, 60-5 Reserve requirements, 8 Federal Reserve Banks, 10, 11 Reserves and related items, 4—6, 12, 58-59 Financial institutions, 33 Deposits (See also specific types) Commercial banks, 4, 15-21, 58-59 LIFE insurance companies (See Insurance companies) Federal Reserve Banks, 5, 10 Loans (See also specific types) Discount rates at Reserve Banks and at foreign central banks and Commercial banks, 15-21, 58-59, 60-5 foreign countries (See Interest rates) Federal Reserve Banks, 5-7, 10, 11 Discounts and advances by Reserve Banks (See Loans) Financial institutions, 33 Foreign banks, U.S. branches and agencies, 66-9 EURO, 56 Insured or guaranteed by United States, 32, 33 FARM mortgage loans, 33 MANUFACTURING Federal agency obligations, 5, 9-11, 26, 27 Capacity utilization, 40, 41 Federal credit agencies, 28 Production, 42, 43 Federal finance Margin requirements, 24 Debt subject to statutory limitation, and types and ownership of Member banks, reserve requirements, 8 gross debt, 25 Mining production, 43 Federal Financing Bank, 28 Monetary and credit aggregates, 4, 12 Federal funds, 23 Money and capital market rates, 23 Federal Home Loan Banks, 28 Money stock measures and components, 4, 13 Federal Home Loan Mortgage Corporation, 28, 32, 33 Mortgages (See Real estate loans) Federal Housing Administration, 28, 32, 33 Mutual funds, 13, 30 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A71 Mutual savings banks (See Thrift institutions) Stock market, selected statistics, 24 Stocks (See also Securities) OPEN market transactions, 9 New issues, 29 Prices, 24 PRICES Student Loan Marketing Association, 28 Stock market, 24 Prime rate, 22, 60-5 THRIFT Institutions, 4 (See also Credit unions and Savings Production, 42, 43 institutions) Time and savings deposits, 4, 13, 15-21, 58-59 REAL estate loans Treasury cash, Treasury currency, 5 Banks, 15-21, 33 Treasury deposits, 5, 10 Terms, yields, and activity, 32 Type and holder and property mortgaged, 33 US. GOVERNMENT balances Reserve requirements, 8 Commercial bank holdings, 15-21 Reserves Treasury deposits at Reserve Banks, 5, 10 Commercial banks, 15-21 U.S. government securities Depository institutions, 4-6 Bank holdings, 15-21, 25 Federal Reserve Banks, 10 Dealer transactions, positions, and financing, 27 U.S. reserve assets, 45 Federal Reserve Bank holdings, 5, 10, 11, 25 Residential mortgage loans, 32, 33 Foreign and international holdings and transactions, 10, 25, 55 Retail credit and retail sales, 34 Open market transactions, 9 Outstanding, by type and holder, 25, 26 SAVING Rates, 23 Flow of funds, 33, 34, 35-9 U.S. international transactions, 44-55 Saving deposits (See Time and savings deposits) Utilities, production, 43 Savings institutions, 33, 34, 35-9 Securities (See also specific types) VETERANS Affairs, Department of, 32, 33 Federal and federally sponsored credit agencies, 28 Foreign transactions, 54 WEEKLY reporting banks, 17, 18 New issues, 29 Prices, 24 YIELDS (See Interest rates) Special drawing rights, 5, 10, 44, 45 State and local governments Holdings of U.S. government securities, 25 New security issues, 29 Rates on securities, 23 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Federal Reserve Bulletin • May 2003 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 INTERNATIONAL FINANCE DONALD J. WINN, Assistant to the Board and Director KAREN H. JOHNSON, Director LYNN S. FOX, Assistant to the Board DAVID H. HOWARD, Deputy Director MICHELLE A. SMITH, Assistant to the Board THOMAS A. CONNORS, Associate Director WINTHROP P. HAMBLEY, Deputy Congressional Liaison DALE W. HENDERSON, Senior Adviser JOHN LOPEZ, Special Assistant to the Board RICHARD T. FREEMAN, Deputy Associate Director ROSANNA PIANALTO-CAMERON, Special Assistant to the Board STEVEN B. KAMIN, Deputy Associate Director DAVID W. SKIDMORE, Special Assistant to the Board WILLIAM L. HELKIE, Senior Adviser JON W. FAUST, Assistant Director LEGAL DIVISION JOSEPH E. GAGNON, Assistant Director J. VIRGIL MATTINGLY, JR., General Counsel WILLENE A. JOHNSON, Adviser SCOTT G. ALVAREZ, Associate General Counsel MICHAEL P. LEAHY, Assistant Director RICHARD M. ASHTON, Associate General Counsel D. NATHAN SHEETS, Assistant Director STEPHANIE MARTIN, Associate General Counsel RALPH W. TRYON, Assistant Director KATHLEEN M. O'DAY, Associate General Counsel ANN E. MISBACK, Assistant General Counsel DIVISION OF RESEARCH AND STATISTICS STEPHEN L. SICILIANO, Assistant General Counsel DAVID J. STOCKTON, Director KATHERINE H. WHEATLEY, Assistant General Counsel EDWARD C. ETTIN, Deputy Director CARY K. WILLIAMS, Assistant General Counsel DAVID W. WILCOX, Deputy Director MYRON L. KWAST, Associate Director OFFICE OF THE SECRETARY STEPHEN D. OLINER, Associate Director JENNIFER J. JOHNSON, Secretary PATRICK M. PARKINSON, Associate Director ROBERT DEV. FRIERSON, Deputy Secretary LAWRENCE SLIFMAN, Associate Director MARGARET M. SHANKS, Assistant Secretary CHARLES S. STRUCKMEYER, Associate Director JOYCE K. ZICKLER, Deputy Associate Director DIVISION OF BANKING SUPERVISION J. NELLIE LIANG, Assistant Director AND REGULATION S. WAYNE PASSMORE, Assistant Director RICHARD SPILLENKOTHEN, Director DAVID L. REIFSCHNEIDER, Assistant Director STEPHEN C. SCHEMERING, Deputy Director JANICE SHACK-MARQUEZ, Assistant Director HERBERT A. BIERN, Senior Associate Director WILLIAM L. WASCHER III, Assistant Director ROGER T. COLE, Senior Associate Director MARY M. WEST, Assistant Director WILLIAM A. RYBACK, Senior Associate Director ALICE PATRICIA WHITE, Assistant Director GERALD A. EDWARDS, JR., Associate Director GLENN B. CANNER, Senior Adviser STEPHEN M. HOFFMAN, JR., Associate Director DAVID S. JONES, Senior Adviser JAMES V. HOUPT, Associate Director THOMAS D. SIMPSON, Senior Adviser JACK P. JENNINGS, Associate Director MICHAEL G. MARTINSON, Associate Director DIVISION OF MONETARY AFFAIRS MOLLY S. WASSOM, Associate Director HOWARD A. AMER, Deputy Associate Director VINCENT R. REINHART, Director NORAH M. BARGER, Deputy Associate Director DAVID E. LINDSEY, Deputy Director BETSY CROSS, Deputy Associate Director BRIAN F. MADIGAN, Deputy Director DEBORAH P. BAILEY, Assistant Director WILLIAM C. WHITESELL, Deputy Associate Director BARBARA J. BOUCHARD, Assistant Director JAMES A. CLOUSE, Assistant Director ANGELA DESMOND, Assistant Director WILLIAM B. ENGLISH, Assistant Director JAMES A. EMBERSIT, Assistant Director RICHARD D. PORTER, Senior Adviser CHARLES H. HOLM, Assistant Director NORMAND R.V. BERNARD, Special Assistant to the Board WILLIAM G. SPANIEL, Assistant Director DAVID M. WRIGHT, Assistant Director WILLIAM C. SCHNEIDER, JR., Project Director, National Information Center Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A73 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, Senior Associate Director JEFFREY C. MARQUARDT, Associate Director ADRIENNE D. HURT, Associate Director KENNETH D. BUCKLEY, Assistant Director IRENE SHAWN MCNULTY, Associate Director JOSEPH H. HAYES, JR., Assistant Director JAMES A. MICHAELS, Assistant Director EDGAR A. MARTINDALE III, Assistant Director TONDA E. PRICE, Assistant Director MARSHA W. REIDHILL, Assistant Director JEFF J. STEHM, Assistant Director OFFICE OF JACK K. WALTON II, Assistant Director STAFF DIRECTOR FOR MANAGEMENT STEPHEN R. MALPHRUS, Staff Director OFFICE OF THE INSPECTOR GENERAL SHEILA CLARK, EEO Programs Director BARRY R. SNYDER, Inspector General DONALD L. ROBINSON, Deputy Inspector General MANAGEMENT DIVISION WILLIAM R. JONES, Director H. FAY PETERS, Deputy 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, Director MAUREEN T. HANNAN, Deputy 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

A74 Federal Reserve Bulletin • May 2003 Federal Open Market Committee and Advisory Councils FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman WILLIAM J. MCDONOUGH, Vice Chairman SUSAN SCHMIDT BIES EDWARD M. GRAMLICH MICHAEL H. MOSKOW BEN S. BERNANKE JACK GUYNN MARK W. OLSON J. ALFRED BROADDUS, JR. DONALD L. KOHN ROBERT T. PARRY ROGER W. FERGUSON, JR. ALTERNATE MEMBERS THOMAS M. HOENIG SANDRA PIANALTO JAMIE B. STEWART, JR. CATHY E. MINEHAN WILLIAM POOLE STAFF VINCENT R. REINHART, Secretary and Economist CHRISTINE M. CUMMING, Associate Economist NORMAND R.V. BERNARD, Deputy Secretary ROBERT A. EISENBEIS, Associate Economist GARY P. GILLUM, Assistant Secretary MARVIN S. GOODFRIEND, Associate Economist MICHELLE A. SMITH, Assistant Secretary DAVID H. HOWARD, Associate Economist J. VIRGIL MATTINGLY, JR., General Counsel WILLIAM C. HUNTER, Associate Economist .THOMAS C. BAXTER, JR., Deputy General Counsel JOHN P. JUDD, Associate Economist KAREN H. JOHNSON, Economist DAVID E. LINDSEY, Associate Economist DAVID J. STOCKTON, Economist CHARLES S. STRUCKMEYER, Associate Economist THOMAS A. CONNORS, Associate Economist DAVID W. WILCOX, Associate Economist DINO KOS, Manager, System Open Market Account FEDERAL ADVISORY COUNCIL L. PHILLIP HUMANN, President ALAN G. MCNALLY, 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 JERRY A. GRUNDHOFER, Ninth District MARTIN G. MCGUINN, Fourth District CAMDEN R. FINE, Tenth District FRED L. GREEN III, Fifth District GAYLE M. EARLS, 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

A75 CONSUMER ADVISORY COUNCIL RONALD A. REITER, San Francisco, California, Chairman AGNES BUNDY SCANLAN, Boston, Massachusetts, Vice Chairman ANTHONY S. ABBATE, Saddlebrook, New Jersey J. PATRICK LIDDY, Cincinnati, Ohio JANIE BARRERA, San Antonio, Texas RUHI MAKER, Rochester, New York KENNETH P. BORDELON, Baton Rouge, Louisiana OSCAR MARQUIS, Park Ridge, Illinois SUSAN BREDEHOFT, Cherry Hill, New Jersey ELSIE MEEKS, Kyle, South Dakota MANUEL CASANOVA, JR., Brownsville, Texas PATRICIA MCCOY, Cambridge, Massachusetts CONSTANCE K. CHAMBERLIN, Richmond, Virginia MARK PINSKY, Philadelphia, Pennsylvania ROBIN COFFEY, Chicago, Illinois ELIZABETH RENUART, Boston, Massachusetts DAN DIXON, Washington, District of Columbia DEBRA S. REYES, Tampa, Florida THOMAS FITZGIBBON, Chicago, Illinois BENSON ROBERTS, Washington, District of Columbia JAMES GARNER, Baltimore, Maryland BENJAMIN ROBINSON III, Charlotte, North Carolina CHARLES GATSON, Kansas City, Missouri DIANE THOMPSON, East St. Louis, Illinois LARRY HAWKINS, Houston, Texas HUBERT VAN TOL, Sparta, Wisconsin W. JAMES KING, Cincinnati, Ohio CLINT WALKER, Wilmington, Delaware EARL JAROLIMEK, Fargo, North Dakota THRIFT INSTITUTIONS ADVISORY COUNCIL KAREN L. MCCORMICK, Port Angeles, Washington, President WILLIAM J. SMALL, Defiance, Ohio, Vice President MICHAEL J. BROWN, SR., Ft. Pierce, Florida KIRK KORDELESKI, Bethpage, New York JOHN B. DICUS, Topeka, Kansas D. TAD LOWREY, Brea, California RICHARD J. DRISCOLL, Arlington, Texas GEORGE W. NISE, Philadelphia, Pennsylvania CURTIS L. HAGE, Sioux Falls, South Dakota KEVIN E. PIETRINI, Virginia, Minnesota OLAN O. JONES, JR., Kingsport, Tennessee ROBERT F. STOICO, Swansea, Massachusetts Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Federal Reserve Bulletin • May 2003 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 States, its possessions, Canada, and Mexico. Elsewhere, Federal Reserve Bank Board of Directors $35.00 per year or $.80 each. Federal Reserve Banks 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

All 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 PERFORMANCE" AND "EVENT STUDY" METHODOLOGIES, Studies and papers on economic and financial subjects that are of by Stephen A. Rhoades. July 1994. 37 pp. general interest. Staff Studies 1-158, 161, 163, 165, 166, 168, and 170. THE COST OF IMPLEMENTING CONSUMER FINANCIAL REGU- 169 are out of print, but photocopies of them are available. Staff LATIONS: AN ANALYSIS OF EXPERIENCE WITH THE TRUTH Studies 165-174 are available on line at www.federalreserve.gov/ IN SAVINGS ACT, by Gregory Elliehausen and Barbara R. pubs/stajfstudies. Requests to obtain single copies of any paper or Lowrey. December 1997. 17 pp. to be added to the mailing list for the series may be sent to 171. THE COST OF BANK REGULATION: A REVIEW OF THE EVI- Publications. 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. 175. THE FUTURE OF RETAIL ELECTRONIC PAYMENTS SYSTEMS: Rhoades. February 1992. 11 pp. INDUSTRY INTERVIEWS AND ANALYSIS, Federal Reserve 164. THE 1989-92 CREDIT CRUNCH FOR REAL ESTATE, by Staff, for the Payments System Development Committee, James T. Fergus and John L. Goodman, Jr. July 1993. Federal Reserve System. December 2002. 27 pp. 20 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Federal Reserve Bulletin • May 2003 Maps of the Federal Reserve System a — f t l B M l l W i l M — f c t k. ^^^^^SmSSBmJSBSSmKm MM**. BOSTON 1211m _ Q ' flfjEW YORK CHICAGO • t ^4J L sU ° ^DELPHIA • RICHMOND ST. LOUIS —— HHlMlflliellillAllil V 6 • An AM A JBHP WMmmm ALASKA 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

A79 1-A 2-B 3-C 4-D 5-E Pittsburgh Baltimo»i MD ^ PA ^ / / NH * Cincinnati Buffalo Wk MA ^ / KY ^ ^ RI BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 7-G S-H - i lsville ATLANTA CHICAGO ST. LOUIS 9-1 MM MI •m MINNEAPOLIS 10-J 12-L CO Omaha® MO Den KM Oklahoma Cit\ OK KANSAS CITY 11-K NM El Paso San Antonio ' '"'AZ DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 Federal Reserve Bulletin • May 2003 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 James J. Norton Cathy E. Minehan Samuel O. Thier Paul M. Connolly NEW YORK* 10045 Peter G. Peterson William J. McDonough John E. Sexton Jamie B. Stewart, Jr. Buffalo 14240 Marguerite D. Hambleton Barbara L. Walter1 PHILADELPHIA 19105 Glenn A. Schaeffer Anthony M. Santomero Ronald J. Naples William H. Stone, Jr. CLEVELAND* 44101 Robert W. Mahoney Sandra Pianalto Charles E. Bunch Robert Christy Moore Cincinnati 45201 Dennis C. Cuneo Barbara B. Henshaw Pittsburgh 15230 Roy W. Haley Robert B. Schaub RICHMOND* 23219 Wesley S. Williams, Jr. J. Alfred Broaddus, Jr. Vacancy Walter A. Varvel Baltimore 21203 Owen E. Herrnstadt William J. Tignanelli1 Charlotte 28230 Michael A. Almond Dan M. Bechter1 ATLANTA 30303 Paula Lovell Jack Guynn David M. Ratcliffe Patrick K. Barron James M. McKee1 Birmingham 35242 W. Miller Welborn Lee C. Jones Jacksonville 32231 William E. Flaherty Christopher L. Oakley Miami 33152 Brian E. Keeley James T. Curry III Nashville 37203 Whitney Johns Martin Melvyn K. Purcell1 New Orleans 70161 Dave Dennis Robert J. Musso1 CHICAGO* 60690 Robert J. Darnall Michael H. Moskow W. James Farrell Gordon R. G. Werkema Detroit 48231 Timothy D. Leuliette Glenn Hansen1 ST. LOUIS 63166 Charles W. Mueller William Poole Walter L. Metcalfe, Jr. W. LeGrande Rives Little Rock 72203 Vick M. Crawley Robert A. Hopkins Louisville 40232 Norman Pfau, Jr. Thomas A. Boone Memphis 38101 Gregory M. Duckett 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 Richard H. Bard Thomas M. Hoenig Vacancy Richard K. Rasdall Denver 80217 Robert M. Murphy Maryann Hunter1 Oklahoma City 73125 Patricia B. Fennell Dwayne E. Boggs Omaha 68102 A.F. Raimondo Steven D. Evans DALLAS 75201 Ray L. Hunt Robert D. McTeer, Jr. Patricia M. Patterson Helen E. Holcomb El Paso 79999 Gail Darling Robert W. Gilmer3 Houston 77252 Lupe Fraga Robert Smith III1 San Antonio 78295 Ron R. Harris James L. Stull1 SAN FRANCISCO 94120 George M. Scalise Robert T. Parry Sheila D. Harris John F. Moore Los Angeles 90051 William D. Jones Mark L. Mullinix2 Portland 97208 Karla S. Chambers Richard B. Hornsby Salt Lake City 84125 H. Roger Boyer Andrea P. Wolcott Seattle 98124 Mic R. Dinsmore 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 3. Acting Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis