Federal Reserve Bulletin, 2003-08

Volume 89 • Number 8 • August 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 351 MONETARY POLICY REPORT TO THE 379 ANNOUNCEMENTS CONGRESS Federal Open Market Committee directive The subpar performance of the U.S. economy Approval of final rule modifying Regulation Y extended into the first half of 2003. Although accommodative macroeconomic policies and Agencies issue advance notice of proposed rulecontinued robust productivity growth helped to making for the New Basel Capital Accord sustain aggregate demand, businesses remained Regulators award contract to modernize colleccautious about spending and hiring. All told, tion of bank data real gross domestic product continued to rise in the first half of the year but less quickly than the Publication of the May 2003 update to the Comeconomy's productive capacity was increasing, mercial Bank Examination Manual and margins of slack in labor and product mar- Publication of the June 2003 update to the Bank kets thereby widened further. As a result, under- Holding Company Supervision Manual lying inflation remained low—and, indeed, seems to have moved down another notch. In Publication of Spanish-language consumer financial markets, longer-term interest rates fell, brochures on net, over the first half of the year as the Discontinuance of statistical table 3.20 decline in inflation and the subdued performance of the economy led market participants to Minutes of Board discount rate meetings conclude that short-term interest rates would be Enforcement actions lower than previously anticipated. These lower interest rates helped to sustain a rally in equity Staff changes prices that had begun in mid-March. The Federal Reserve expects economic activ- 385 LEGAL DEVELOPMENTS ity to strengthen later this year and in 2004, in Various bank holding company, bank service part because of the accommodative stance of corporation, and bank merger orders; and pendmonetary policy and the broad-based improveing cases. ment in financial conditions. In addition, fiscal policy is likely to be stimulative as the pro- A1 FINANCIAL AND BUSINESS STATISTICS visions of the Jobs and Growth Tax Relief Reconciliation Act of 2003 go into effect and as These tables reflect data available as of defense spending continues to ramp up. Severe June 26, 2003. budgetary pressures are causing state and local governments to cut spending and to increase A3 GUIDE TO TABLES taxes and fees, but these actions should offset A4 Domestic Financial Statistics only a portion of the impetus from the federal A40 Domestic Nonfinancial Statistics sector. Moreover, the continued favorable per- A44 International Statistics formance of productivity growth should lift household and business incomes and thereby A57 GUIDE TO SPECIAL TABLES AND encourage capital spending. Given the ongoing STATISTICAL RELEASES gains in productivity and the existing margin of resource slack, aggregate demand could grow at A70 INDEX TO STATISTICAL TABLES a solid pace for some time before generating upward pressure on inflation. All BOARD OF GOVERNORS AND STAFF Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 FEDERAL OPEN MARKET COMMITTEE AND A78 MAPS OF THE FEDERAL RESERVE SYSTEM STAFF; ADVISORY COUNCILS A80 FEDERAL RESERVE BANKS, BRANCHES, A76 FEDERAL RESERVE BOARD PUBLICATIONS AND OFFICES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress Report submitted to the Congress on July 15, 2003, trended lower. At the conclusion of its May meeting, pursuant to section 2B of the Federal Reserve Act the Federal Open Market Committee (FOMC) indicated that, whereas the risks to the outlook for economic growth were balanced, the risk of an unwel- MONETARY POLICY AND THE come substantial fall in inflation from its already low ECONOMIC OUTLOOK level, though minor, exceeded that of a pickup in inflation. In the weeks that followed, market partici- The subpar performance of the U.S. economy pants pushed down the expected future path of the extended into the first half of 2003. Although accomfederal funds rate, which contributed to the fall in modative macroeconomic policies and continued longer-term interest rates and a further rise in equity robust productivity growth helped to sustain aggreprices. gate demand, businesses remained cautious about spending and hiring. All told, real gross domestic At the time of the June FOMC meeting, the availproduct continued to rise in the first half of the year able evidence did not yet compellingly demonstrate but less quickly than the economy's productive that a material step-up in economic growth was under capacity was increasing, and margins of slack in way, though some indicators did point to a firming in labor and product markets thereby widened further. spending and a stabilization in the labor and product As a result, underlying inflation remained low—and, markets. The Committee concluded that a slightly indeed, seems to have moved down another notch. In more expansive monetary policy would be warranted financial markets, longer-term interest rates fell, on to add further support to the economic expansion. net, over the first half of the year as the decline in The Committee's assessment and ranking of the risks inflation and the subdued performance of the econ- to the outlook for economic growth and inflation omy led market participants to conclude that short- were the same as in May. term interest rates would be lower than previously The Federal Reserve expects economic activity to anticipated. These lower interest rates helped to strengthen later this year and in 2004, in part because sustain a rally in equity prices that had begun in of the accommodative stance of monetary policy and mid-March. the broad-based improvement in financial conditions. During the first quarter of the year, the economy's In addition, fiscal policy is likely to be stimulative prospects were clouded by the uncertainties surround- as the provisions of the Jobs and Growth Tax Relief ing the onset, duration, and potential consequences of Reconciliation Act of 2003 go into effect and as war in Iraq. War-related concerns provided a sizable defense spending continues to ramp up. Severe budboost to crude oil prices; as a result, households faced getary pressures are causing state and local governhigher bills for gasoline and heating oil, and many ments to cut spending and to increase taxes and fees, firms were burdened with rising energy costs. These but these actions should offset only a portion of the concerns also caused consumer confidence to sag and impetus from the federal sector. Moreover, the conadded to a general disinclination of firms to spend, tinued favorable performance of productivity growth hire, and accumulate inventories. Caution was appar- should lift household and business incomes and ent in financial markets as well, and investors bid thereby encourage capital spending. Given the ongodown the prices of equities in favor of less-risky ing gains in productivity and the existing margin of securities. resource slack, aggregate demand could grow at a solid pace for some time before generating upward The swift prosecution of the war in Iraq resolved pressure on inflation. some of these exceptional uncertainties but by no means all of them. Nonetheless, oil prices receded, and the improvement in the economic climate was sufficient to cause stock prices to rally, risk spreads Monetary Policy, Financial Markets, and the on corporate securities to narrow, and consumer con- Economy over the First Half of 2003 fidence to rebound. At the same time, the incoming economic data—much of which reflected decisions During the weeks before the January meeting of the made before the war—remained mixed, and inflation FOMC, geopolitical developments and the uneven Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

352 Federal Reserve Bulletin • August 2003 Selected interest rates NOTE. The data are daily and extend through July 9,2003. The dates on the the main credit program offered at the discount window by terminating the horizontal axis are those of scheduled FOMC meetings and of any adjustment credit program and beginning the primary credit program. intermeeting policy actions. On January 9, 2003, the Federal Reserve changed tone of economic data releases created substantial relative safety of fixed-income instruments; that prefuncertainty. Businesses had continued to reduce their erence induced declines in yields on Treasury securipayrolls and postpone capital expenditures. However, ties and high-quality corporate bonds and a drop in the absence of fresh revelations of lapses in corpo- stock prices. Consumer outlays also softened after rate governance or accounting problems and some January, although low mortgage rates and rising increased appetite for risk on the part of investors incomes were still providing support for household helped push down yields on corporate debt, which spending. Businesses continued to trim workforces encouraged firms to issue bonds to reduce their and cut capital spending. financing costs and restructure their balance sheets. When the Committee met on March 18, full-scale Meanwhile, moderate gains in household income military conflict in Iraq seemed imminent. In an and historically low mortgage rates underpinned still- environment of considerable uncertainty, the FOMC considerable demand for housing. Retail sales, par- had to weigh whether economic sluggishness was ticularly those of motor vehicles, also were strong at largely related to worries about the war, and hence the end of 2002 despite some drop-off in consumer would lift once the outcome was decided, or was confidence. Core inflation seemed to be on a declin- indicative of deep-seated restraints on economic ing trend, although the foreign exchange value of the activity. The Committee, which reasoned that it could dollar had depreciated, and top-line inflation was not make such a distinction in the presence of so being boosted by a sizable run-up in energy prices. much uncertainty, left the funds rate unchanged and The substantial slack in resource utilization, as well declined to characterize the balance of risks with as the solid gains in labor productivity, led members respect to its dual goals. However, the Committo the view that consumer price inflation—by then tee noted that, given the circumstances, heightalready very low—was unlikely to increase meaning- ened surveillance would be particularly informative, and it held a series of conference calls during fully. Against that backdrop, the Committee members late March and April to discuss the latest economic continued to believe that economic fundamentals developments. were in place to support a pickup in the growth of economic activity during the year ahead. Accord- Some of the uncertainty was resolved by the quick ingly, the FOMC decided at the January meeting to end to major military action in Iraq. Equity prices and leave interest rates unchanged and assessed the risks consumer confidence rose while oil prices and risk as balanced with respect to its dual goals of sustain- spreads on corporate debt fell. Fiscal policy seemed able economic growth and price stability. set to become even more stimulative given the pros- In subsequent weeks, economic performance pect of increased spending on defense and homeland proved disappointing. The increasing likelihood of security as well as the likely enactment of additional war in Iraq was accompanied by a steep rise in crude tax cuts. Part of the federal stimulus, however, was thought likely to be offset by the efforts of state and oil prices and considerable volatility in financial marlocal governments to close their budget gaps. kets. For much of that period, investors sought the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 353 Economic reports were generally disappointing. prudent to add further support for economic expan- Industrial production declined in March, and capacity sion, and it lowered the target for the federal funds utilization fell to a twenty-year low. The employment rate 25 basis points, to 1 percent. The FOMC continreports for March and April indicated that private ued to view the risks to economic growth as balanced nonfarm payrolls had continued to fall. Although and again noted that the minor probability of substanorder backlogs for nondefense capital goods had risen tial further disinflation exceeded the probability of recently, businesses generally remained reluctant to a pickup in inflation from its current low level. But invest in new capacity. because of the considerable amount of economic In light of the financial and policy stimulus already slack prevailing and the economy's ability to expand in place, the FOMC left the federal funds rate without putting upward pressure on prices, the Comunchanged at its May meeting. To provide more mittee indicated that the small chance of an unwelspecific guidance about its views, the FOMC come substantial decline in the inflation rate was included in its announcement separate assessments of likely to remain its predominant concern for the the risks to the outlook for economic growth and foreseeable future. inflation as well as the overall balance between the two. The Committee viewed the upside and downside risks to economic growth as balanced, but it per- Economic Projections for 2003 and 2004 ceived a higher probability of an unwelcome substantial fall in inflation than of a pickup in inflation from The members of the Board of Governors and the its current low level. The Committee considered that Federal Reserve Bank presidents, all of whom particithe overall balance of risks to its dual objectives was pate in the deliberations of the FOMC, expect ecoweighted toward weakness. That said, members con- nomic activity to accelerate in the second half of this cluded that there was only a remote possibility that year and to gather additional momentum in 2004. resource utilization would remain so low that the The central tendency of the FOMC participants' foredisinflation process would cumulate to produce a casts for the increase in real GDP over the four declining overall price level for an extended period. quarters of 2003 spans a narrow range of 2xh percent to 23/4 percent, which, given the modest increase in Financial market participants reacted strongly to real GDP in the first quarter, implies a noticeable this characterization of risks, believing that the Compickup in growth as the year progresses. The central mittee's focus on leaning against appreciable disintendency for projections of real GDP growth in 2004 flation implied that monetary policy would be more spans a range of 33A percent to 43/4 percent. The accommodative and remain so for longer than previcivilian unemployment rate is expected to be between ously thought. Investors pushed down the expected path of the federal funds rate in the weeks following Economic projections for 2003 and 2004 the meeting. Intermediate- and long-term interest Percent rates fell significantly and spurred another round of long-term bond issuance. The resulting decline in Federal Reserve Governors and real interest rates helped sustain the rally in equity Reserve Bank presidents IInnddiiccaattoorr prices. Central Range Between the May and June meetings, a few tenta- tendency tive signs suggested that the pace of economic activ- 2003 ity might be firming. Industrial production and retail CCCChhhhaaaannnnggggeeee,,,, ffffoooouuuurrrrtttthhhh qqqquuuuaaaarrrrtttteeeerrrr sales edged up in May, available data indicated that ttttoooo ffffoooouuuurrrrtttthhhh qqqquuuuaaaarrrrtttteeeerrrr1111 NNNNoooommmmiiiinnnnaaaallll GGGGDDDDPPPP 3'/2-43/4 33/4-4'/2 employment had stopped declining, residential RRRReeeeaaaallll GGGGDDDDPPPP 2V4-3 21/2-2% investment remained strong, and survey measures of PPPPCCCCEEEE cccchhhhaaaaiiiinnnn----ttttyyyyppppeeee pppprrrriiiicccceeee iiiinnnnddddeeeexxxx 1-1% VA-l'A consumer sentiment and business conditions were AAAAvvvveeeerrrraaaaggggeeee lllleeeevvvveeeellll,,,, ffffoooouuuurrrrtttthhhh qqqquuuuaaaarrrrtttteeeerrrr CCCCiiiivvvviiiilllliiiiaaaannnn uuuunnnneeeemmmmppppllllooooyyyymmmmeeeennnntttt rrrraaaatttteeee 6-61/4 6-6'/4 well above the levels of earlier in the year. Financial conditions had improved markedly, but businesses 2004 reportedly remained somewhat averse to new invest- CCCChhhhaaaannnnggggeeee,,,, ffffoooouuuurrrrtttthhhh qqqquuuuaaaarrrrtttteeeerrrr ment projects, in part because of significant unused ttttoooo ffffoooouuuurrrrtttthhhh qqqquuuuaaaarrrrtttteeeerrrr1111 NNNNoooommmmiiiinnnnaaaallll GGGGDDDDPPPP 43/4-6'/2 5l/4-6'/4 capacity. They also seemed reluctant to expand their RRRReeeeaaaallll GGGGDDDDPPPP 3'/2-5'/4 3%-43/4 workforces until they viewed a sustained pickup in PPPPCCCCEEEE cccchhhhaaaaiiiinnnn----ttttyyyyppppeeee pppprrrriiiicccceeee iiiinnnnddddeeeexxxx 3/4-2 i-m aggregate demand as more certain. AAAAvvvveeeerrrraaaaggggeeee lllleeeevvvveeeellll,,,, ffffoooouuuurrrrtttthhhh qqqquuuuaaaarrrrtttteeeerrrr CCCCiiiivvvviiiilllliiiiaaaannnn uuuunnnneeeemmmmppppllllooooyyyymmmmeeeennnntttt rrrraaaatttteeee 5'/2-6'/4 51/2-6 With inflation already low and inflation expecta- 1. Change from average for fourth quarter of previous year to average for tions subdued, the Committee judged that it would be fourth quarter of year indicated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

354 Federal Reserve Bulletin • August 2003 6 percent and 6V4 percent in the fourth quarter of Change in PCE chain-type price index 2003 and to decline to between 5Vi percent and 6 percent by the fourth quarter of 2004. Inflation is anticipated to be quite low over the next year and a half. The chain-type price index for personal consumption expenditures (PCE) rose 13A percent over the four quarters of 2002, and most FOMC participants expect inflation to run somewhat lower this year and then to hold fairly steady in 2004. The central tendency of projections for PCE inflation is 1 lA percent to 1V2 percent in 2003 and 1 percent to 1V2 percent in 2004. ECONOMIC AND FINANCIAL DEVELOPMENTS IN 2003 NOTE. The data are for personal consumption expenditures (PCE). Economic activity in the United States remained slug- prices, which soared during the winter, retreated gish in the first half of 2003. Businesses continued during the spring, and more recently firmed. Core to be reluctant to undertake new projects given the inflation—which excludes the direct effects of food unusual degree of uncertainty in the economic envi- and energy prices—was held to a low level by slack ronment, and the softness in activity abroad crimped in resource utilization and continued sizable advances the demand for U.S. exports. However, consumer in labor productivity. spending grew moderately, housing activity retained As a result of slow economic growth and the considerable vigor, and defense spending picked up. prospect that inflation would remain very subdued, Real GDP rose at an annual rate of just 1 Vi percent in the federal funds rate was maintained at the accomthe first quarter and appears to have posted another modative level of PA percent for much of the first modest gain in the second quarter. With output half of the year. Intermediate- and longer-term yields growth remaining tepid and labor productivity rising declined, in some cases to their lowest levels on at a fairly robust pace, firms continued to trim pay- record. Equity prices, which through mid-March had rolls in the first half of 2003, though job losses in the fallen in response to weaker-than-expected economic private sector were a little smaller than they had news and rising geopolitical tensions, began a broad been, on average, in 2002. rally as it became clear that the war in Iraq would For much of the first half of the year, headline begin imminently. The apparent increase in investors' inflation news was shaped by movements in energy appetite for risk also helped push down risk spreads on corporate bonds and triggered inflows to equity and high-yield bond mutual funds. Since the begin- Change in real GDP ning of the year, the foreign exchange value of the dollar has depreciated nearly 5 percent against the broad group of currencies of our major trading partners. Households and businesses have taken advantage of the decline in intermediate-term and long-term interest rates from their already low levels, mostly by refinancing debt at ever more favorable rates. Partly as a result, household credit quality was little changed over the first half of the year, and household debt continued to expand at a rapid pace as mortgage interest rates fell to their lowest levels in more than three decades. Business balance sheets strengthened noticeably, and many measures of corporate credit performance showed some improvement. Still, net NOTE. Here and in subsequent charts, except as noted, change for a given borrowing by businesses continued to be damped by period is measured to its final quarter from the final quarter of the preceding the softness in investment spending. period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 355 Change in real income and consumption Personal saving rate Percent, annual rate • Disposable personal income • Personal consumption expenditures — 6 10 Q1 _L_J ! I i I 1 il 1 1 1 I I II I 1 I 11 1 1 I 1 1 I 1 ™ 2001 2003 1983 1987 1991 1995 1999 2003 NOTE. The data are quarterly; the reading for 2003:Q2 is the average for The Household Sector April and May. Consumer Spending The rise in real consumption expenditures so far in Consumer spending continued to increase in the first 2003 has about matched the growth in real disposable half of 2003, though not as quickly as in the past few personal income (DPI), which has been restrained by years. In total, real personal consumption expendi- the poor job market and by the surge in consumer tures (PCE) rose at an annual rate of 2 percent in the energy prices early in the year. Real DPI rose about first quarter and likely posted another moderate 2]/ percent at an annual rate between the fourth 4 advance in the second quarter. Purchases of new light quarter of 2002 and May after having increased at a motor vehicles were sustained by the automakers' considerably faster pace in 2002; the larger increase use of increasingly aggressive price and financing in real DPI in 2002 in part reflected the effects of the incentives. Spending on goods other than motor vehi- tax cuts enacted in 2001. cles rose briskly in the first quarter, though that was Among other key influences on consumption, largely because of the high level of spending around household wealth grew about in line with nominal the turn of the year; the data through May suggest a DPI in the fourth quarter of 2002 and the first quarter further increase for this category in the second quar- of 2003 after having fallen sharply over the preceding ter. In contrast, outlays on services rose only slowly two years. While the rebound in the stock market in over the first five months of the year as weakness the second quarter should help the wealth-to-income lingered in a number of categories, including air ratio recoup some of the ground it lost earlier, housetravel and recreation. holds likely have not yet completed the adjustment of Wealth-to-income ratio Consumer sentiment 1966 = 100 1991 1994 1997 2000 2003 NOTE. The data are quarterly and extend through 2003:Q1. The NOTE. The data are monthly and extend through June 2003. wealth-to-income ratio is the ratio of household net worth to disposable SOURCE. University of Michigan Survey Research Center and The Conpersonal income. ference Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

356 Federal Reserve Bulletin • August 2003 their spending to the earlier drop in wealth. Mean- rently are very favorable, mainly because of the low while, the high level of mortgage refinancing in mortgage rates. recent quarters has bolstered consumer spending by The available indicators provide differing signals allowing homeowners to reduce their monthly pay- on the magnitude of recent increases in home prices, ments, pay down more costly consumer debt, and in but, in general, they point to smaller gains than those many cases cash out some of the equity that has recorded a year or two ago. Notably, over the year accumulated during the upswing in house prices over ending in the first quarter, the constant-quality price the past few years. Reflecting these influences, the index for new homes rose just 2Vi percent, one of the personal saving rate averaged 3V2 percent over lowest readings of the past few years. Meanwhile, the the first five months of the year—about the same as four-quarter increase in the repeat-sales price index the annual average for 2002 but more than 1 percent- for existing homes, which topped out at 8V2 percent age point above that for 2001. in 2001, was 6V2 percent in the first quarter. Still, the Consumer confidence, which has exhibited some share of income required to finance the purchase of a sharp swings in recent years, remained volatile in the new home, adjusted for variations over time in strucfirst half of 2003. After having declined markedly tural characteristics, has continued to move down as over the second half of 2002, survey readings from mortgage rates have dropped, and it is now very low both the Michigan Survey Research Center and the by historical standards. Conference Board took another tumble early this year Activity in the multifamily sector appears to have on concerns about the potential consequences of a slipped somewhat this year, perhaps in part because war in Iraq. With the combat in Iraq largely over and the strong demand for single-family homes may be the stock market recovering, confidence rose appre- cutting into the demand for apartments. Multifamily ciably, on net, in the spring. starts totaled 325,000 units at an annual rate over the first five months of the year, a pace 6 percent below that for 2002 as a whole. In addition, vacancy rates Residential Investment for multifamily rental properties rose further in the first quarter, and apartment rents continued to fall. Housing activity remained robust in the first half of this year, as very low mortgage interest rates apparently offset much of the downward pressure from the Household Finance soft labor market. In the single-family sector, starts averaged an annual rate of 1.39 million units over the Household real estate debt grew rapidly in the first first five months of the year—2 percent greater than half of the year with the support of the brisk pace of the rapid pace for 2002 as a whole. In addition, sales home sales, rising home prices, and falling mortgage of new and existing homes moved to exceptionally interest rates. Indeed, according to Freddie Mac, the high levels. According to the Michigan survey, con- average rate on thirty-year conventional home mortsumers' assessments of homebuying conditions cur- gages fell sharply until June, though it has edged Mortgage rates Private housing starts Percent Millions of units, annual rate Fixed rate —- 9.0 — 8.0 — 7.0 — 6.0 Adjustable rate Multifamily — 5.0 — 4.0 1991 1993 1995 1997 1999 2001 2003 NOTE. The data, which are weekly and extend through July 9, 2003, are NOTE. The data are quarterly; the readings for 2003 :Q2 are the averages for contract rates on thirty-year mortgages. April and May. SOURCE. Federal Home Loan Mortgage Corporation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 357 Mortgage applications for purchases and refinancings Mutual fund investment flows Billions of dollars • Equity — 30 • Bond and hybrid — 25 12,000 — 20 — 15 I I II 8,000 — 10 4,000 10 1998 1999 2000 2001 2002 2003 2000 2001 2002 2003 NOTE. The data are weekly and extend through July 4, 2003. The index for NOTE. Data are expressed at a monthly rate. Estimates for 2003:Q2 are purchases is seasonally adjusted by Federal Reserve Board staff. based on monthly data for April and May. SOURCE. Mortgage Bankers Association. SOURCE. Investment Company Institute. back up in recent weeks and now stands at about A major use of the proceeds from both cash-out 5Vi percent. Applications for mortgages to purchase refinancing and home equity loans reportedly has homes rose well above the already elevated level of been to pay down credit card and other higher-cost last year. Sales of existing homes, in particular, add consumer debt. Indeed, in line with those reports, significantly to the level of mortgage debt because consumer debt advanced at a relatively subdued the purchaser's mortgage is typically much larger 4'/ percent annual rate in the first quarter. The growth 2 than the seller's had been. The pace of mortgage of revolving debt was about 5 percent at an annual refinancing—which adds to borrowing because rate, and nonrevolving debt expanded at a 3Vi percent households often increase the size of their mortgages annual rate. The growth of consumer debt picked when they refinance—set consecutive quarterly up in the spring; the acceleration in part reflected records in the first and second quarters of 2003 in somewhat higher motor vehicle sales that boosted response to the declines in mortgage rates. According the nonrevolving component, which in turn offset a to Freddie Mac, more than 40 percent of the refinanc- deceleration in revolving credit. Meanwhile, the averings in the first quarter were "cash-out" refinancings, age interest rates charged on credit cards and on new and the amount of equity extracted likely set a record car loans at auto finance companies this year have in the first half of this year. The combination of rising remained near the low end of their recent ranges. home prices and low interest rates also energized In total, household debt grew at a 10 percent annual home equity lending during the first half of 2003. rate in the first quarter, a pace about unchanged from Delinquency rates on selected types of household loans Bond mutual fund investment flows Billions of dollars • High-yield • Government • Other rl l dU J I L J I I L Li_ ifrj'jfr- A, * rnitififftf 1991 1993 1995 1997 1999 2001 2003 2000 2001 2002 2003 NOTE. The data are quarterly and extend through 2003:Q1. NOTE. Data are expressed at a monthly rate. Estimates for 2003.Q2 are SOURCE. For mortgages, the Mortgage Bankers Association; for auto loans, based on monthly data for April and May. the Big Three automakers; for credit cards, Moody's Investors Service. SOURCE. Investment Company Institute. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

358 Federal Reserve Bulletin • August 2003 last year's. Despite the marked rise of this debt over Change in real business fixed investment the past several quarters, the aggregate debt-service burden of households ticked down in both the fourth Percent, annual rate quarter of 2002 and the first quarter of this year— Q Structures periods during which borrowing rates fell and the average maturity of household debt rose. Although households continued to borrow at a rapid pace in the second quarter, the declines in mortgage interest rates and an elevated level of refinancing imply that the debt-service burden was likely little changed. The credit quality of household debt remained fairly stable in the first quarter. The delinquency rates both on residential mortgages and on credit card loans edged down in the first quarter, though persistently high delinquencies among subprime borrowers remain a problem area. Delinquency rates on auto • High-tech equipment and software | Other equipment excluding transportation — 40 loans at captive finance companies have edged up in recent months from their very low levels of the past — 30 few years. However, lenders probably anticipated some increase as the plethora of new vehicle loans I issued in late 2001 and early 2002 seasoned. The fact that a large number of households declared — bankruptcy in the first half of the year suggests that 1 • some households continue to experience considerable distress. — In a continuation of the trend during the second half of 2002, households invested heavily in bond 1997 1998 1999 2000 2001 2002 2003 mutual funds—and relatively safe bond funds at NOTE. High-tech equipment consists of computers and peripheral equipthat—during the first quarter of 2003 and disinvested ment and communications equipment. from equity funds. However, starting in March, households showed a growing willingness to pur- tions area. But other key determinants of equipment chase shares of riskier funds. As corporate credit spending are reasonably favorable. The aggressive quality improved and risk-free interest rates fell actions taken by firms over the past few years to to record lows, a significantly larger portion of the boost productivity and trim costs have provided a lift investment in bond mutual funds flowed into corpo- to corporate profits and cash flow. In addition, low rate bond funds—including high-yield funds—at the interest rates and a rising stock market are helping expense of government bond funds. Inflows to equity hold down firms' cost of capital, as is the partialmutual funds reportedly resumed in mid-March and expensing investment tax incentive. In addition, techcontinued through June. nological advances continue to depress the relative price of computers at a time when stretched-out replacement cycles have apparently widened the gap The Business Sector between the latest technology and that embodied in many of the machines currently in use. Fixed Investment Real spending on E&S fell at an annual rate of nearly 5 percent in the first quarter. The outlays were Investment in equipment and software (E&S) contin- restrained by a sharp decline in spending on transporues to languish. Firms reportedly remain reluctant to tation equipment, especially motor vehicles; excludundertake new projects because of the uncertainty ing that category, spending posted a small gain. Real about the economic outlook and heightened risk aver- outlays on high-tech equipment and software rose at sion in the wake of last year's corporate governance an annual rate of about 11 percent in the first quarter, and accounting problems. Excess capacity—in addi- a bit faster than they had in 2002. Real purchases of tion to being a factor weighing on nonresidential computers and peripheral equipment remained on the construction—also is limiting demand for some types moderate uptrend that has been evident since such of equipment, most notably in the telecommunica- spending bottomed out in 2001, and outlays on com- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 359 munications equipment picked up after an extended Change in real business inventories period of weakness. Meanwhile, investment outside the transportation and high-tech areas dropped back a bit. Real E&S spending appears to have turned up in the second quarter, in part because of a step-up in the pace of real computer investment. However, incoming data suggest that outlays on communications equipment did not repeat their first-quarter spurt. The data on shipments of capital goods point to moderate increases in spending outside of high-tech and transportation in the second quarter; moreover, backlogs of unfilled orders for equipment in this broad category have risen some this year after having declined over the preceding two years. Nonresidential construction remained weak in the first half of 2003. Although real construction outlays over the first five months of 2003, and, with only a were off only a little in the first quarter, they had few exceptions, inventories appear reasonably well fallen nearly 16 percent in 2002, and partial data aligned with sales. for the second quarter point to continued softness. The downturn in spending has been especially pronounced in the office sector, where vacancy rates Corporate Profits and Business Finance have surged and rents have plunged. Spending on industrial facilities also has fallen dramatically over Before-tax profits of nonfarm, nonfinancial corporathe past couple of years; it has continued to contract tions grew at a 6V2 percent annual rate in the first in recent quarters and is unlikely to improve much in quarter of 2003, and they constituted 8V2 percent of the absence of a significant rise in factory operating the sector's first-quarter GDP, the highest proportion rates. Construction expenditures on other commercial since the third quarter of 2000. Focusing on the buildings (such as those for retail, wholesale, and companies that make up the S&P 500, earnings per warehouse space), which had declined less than did share for the first quarter were up about 7 percent at a outlays for other major categories of nonresidential quarterly rate from the fourth quarter of 2002 and construction over the past couple of years, moved up were 11 percent higher than four quarters earlier. in the first quarter of 2003, but they too have shown Although oil companies accounted for the majority of some renewed softness lately. One bright spot is the the four-quarter increase, earnings from the financial, drilling and mining sector, in which outlays have utility, and consumer durable sectors were also strong risen sharply this year in response to higher natural gas prices. Before-tax profits of nonfinancial corporations as a percent of sector GDP Inventory Investment Most businesses have continued to keep a tight rein on inventories after the massive liquidation in 2001. Real inventory investment in the first quarter was a meager $5 billion at an annual rate and occurred entirely in the motor vehicle industry, where sagging sales and ambitious production early in the year created a noticeable bulge in dealer stocks, especially of light trucks. In the second quarter, the automakers reduced assemblies and expanded incentives to bolster sales, but these steps were sufficient only to I I I II I I I I I I I 11 I II I I I I I I I I M I I I reduce stocks a little, and inventories remained 1978 1983 1988 1993 1998 2003 high relative to sales through June. Apart from the NOTE. The data are quarterly and extend through 2003:Q1. Profits are from domestic operations of nonfinancial corporations, with inventory valuation motor vehicle industry, firms reduced stocks, on net, and capital consumption adjustments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

360 Federal Reserve Bulletin • August 2003 Financing gap and net equity retirement Corporate bond yields at nonfarm nonfinancial corporations Percent Billions of dollars High yield Net equity retirement Financing gap NOTE. The data are weekly averages and extend through July 9 except for NOTE. The data are annual through 2002; for 2003, they are estimates the high-yield series, which extends through July 7. The A A rate is calculated based on data from 2003 :Q1. The financing gap is the difference between from bonds in the Merrill Lynch AA index with seven to ten years of maturity capital expenditures and internally generated funds. Net equity retirement is remaining. The high-yield rate is the yield on the Merrill Lynch 175 the difference between equity retired through share repurchases, domestic high-yield index. cash-financed mergers, or foreign takeovers of U.S. firms and equity issued in public or private markets, including funds invested by venture capital partnerships. well. Volatile and declining equity prices in the first quarter brought initial public offerings (IPOs) to a standstill during the first four months of this year. and exceeded the market's conservative expectations One small IPO was undertaken in May, and another by larger-than-usual margins. The recent depreciation one came to market in June. With regard to seasoned of the dollar substantially boosted revenues of U.S. equity offerings, a war-related lull in March and multinational corporations, but the hedging of cur- April held the average monthly pace of issuance this rency risk likely limited the extent to which sales year well below last year's level. Most of these gains showed through to profits. offerings have been from energy firms and utilities Net equity retirements in the first quarter of 2003 that have used the proceeds primarily to reduce leverwere probably a shade larger than in the fourth quarage and increase liquidity. ter of 2002, as the decline in gross new issuance more than offset lower gross retirements. Equity retire- The net debt growth of nonfinancial corporate busiments from cash-financed mergers were a bit below ness was just 3 percent at an annual rate in the first their pace in the past two years, and share repur- quarter, as rising profits and lower outlays for fixed chases appear to be running somewhat slower as and working capital held down corporations' need for external funds. Nonetheless, low interest rates continued to attract firms to the bond market during the first Major components of net business financing half of 2003, and issuance ran well ahead of its rate of the second half of 2002. Moreover, a large fraction Billions of dollars of the issues were from below-investment-grade • Commercial paper firms, which likely were responding to the even - • J00* - 600 sharper fall in their borrowing rates than investmentg Bank loans Sum of major grade firms enjoyed. A substantial portion of the components proceeds of recent bond issues have been slated to pay down commercial paper and commercial and — 200 industrial (C&I) loans, and each of those components + contracted markedly during the first half of the year. — 0 Another factor contributing to the weakening in demand for C&I loans this year was the absence of — 200 merger and acquisition activity, according to the Federal Reserve's Senior Loan Officer Opinion Survey 2001 2002 2003 on Bank Lending Practices. NOTE. Seasonally adjusted annual rate for nonfarm nonfinancial corporate The runoff in C&I loans appears related more to a business. The sum of major components is quarterly. The data for 2003:Q2 are estimated. decrease in demand than to a tightening of supply Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 361 Standards and demand for C&I loans to large Ratings changes of nonfinancial corporations and medium-sized firms at domestic banks Percent Percent Upgrades Net percent tightening standards Net percent reporting stronger demand 1995 1996 1997 1998 1999 2000 2001 2002 2003 NOTE. Data are at an annual rate; for 2003, they are the annualized values NOTE. The data are based on a survey generally conducted four times per of monthly data through May. Debt upgrades and downgrades are expressed year; the last reading is from the April 2003 survey. Large and medium-sized as a percentage of the par value of all bonds outstanding. firms are those with annual sales of $50 million or more. Net percentage is SOURCE. Moody's Investors Service. the percentage reporting a tightening less the percentage reporting an easing. SOURCE. Federal Reserve, Senior Loan Officer Opinion Survey on Bank nonbank financial institutions purchased a record Lending Practices. amount of new syndicated loans during the first quarter of this year; the buyers were reportedly attracted conditions, and bank credit appears to remain availin part by improving liquidity in the secondary loan able for qualified business borrowers. The net fracmarket. tion of banks in the Senior Loan Officer Opinion Survey that reported having tightened lending stan- The decline in both short- and long-term interest dards and terms on C&I loans during the first part of rates, combined with slow increases in total business the year decreased markedly, and the Survey of Small debt, contributed to a further reduction in the net Business by the National Federation of Independent interest burden of nonfinancial corporations during Business showed that the net percentage of small the first quarter. Moreover, by issuing bonds and businesses believing credit had become more difficult paying down short-term debt, businesses have subto obtain hovered near the middle of its recent range. stantially lengthened the overall maturity of their Moreover, in the April Senior Loan Officer Opinion debt, thus reducing their near-term repayment obliga- Survey, a number of banks reported that they had tions. These developments, together with higher profeased lending terms in response to increased competition for C&I loans from nonbank lenders. Indeed, Default rate on outstanding bonds and C&I delinquency rate data from Loan Pricing Corporation indicate that Percent Net interest payments of nonfinancial corporations relative to cash flow — 6.0 Percent — 5.0 \ ~ — 4.0 \ -K / / J] — 3.0 N. C&I delinquency rate/ J VI H ~~ 2 0 \ Default rate on ' I V outstanding bonds J\ «J 1 -, 1 1 1 T V X^ i V ^ s rM | | | 1 1 1991 1993 1995 1997 1999 2001 2003 NOTE. The default rate is monthly and extends through June 2003. The C&I delinquency rate is quarterly and extends through 2003:Q1. The default rate for a given month is the face value of bonds that defaulted in the six months ending in that month divided by the face value of all bonds outstanding at the end of the calendar quarter immediately preceding the NOTE. The data are quarterly and extend through 2003:Q1. six-month period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

362 Federal Reserve Bulletin • August 2003 itability, have helped most measures of corporate down significantly. In addition, newly formed pools credit performance to improve this year. The number that include high-profile properties reportedly have of ratings downgrades continued to exceed upgrades been diversified to further protect investors from but by a notably smaller margin than last year. The losses due to acts of terrorism. six-month trailing bond default rate declined considerably in the first half of the year. The four-quarter The Government Sector moving average of recovery rates on defaulted bonds improved a bit in the first quarter, although it Federal Government remained at the low end of its range of the past several years. The delinquency rate on C&I loans at The federal budget deficit has widened significantly commercial banks also moved down some in the first as a consequence of the persistent softness in receipts quarter, albeit to a level well above that of the late and legislative actions affecting both spending and 1990s. taxes. Over the first eight months of the current fiscal year—October to May—the deficit in the unified Commercial Real Estate budget was $292 billion, nearly $150 billion larger than that recorded during the comparable period last The growth of debt backed by commercial real estate year. Moreover, recent policy actions are projected to remained robust this year despite some deterioration boost the deficit significantly over the remainder of in that sector's underlying fundamentals. In the first the fiscal year. In particular, receipts will be reduced quarter of 2003, the expansion of debt was driven appreciably by several provisions of the Jobs and by lending at commercial banks and was spread Growth Tax Relief Reconciliation Act of 2003, about equally across broadly defined types of com- including advance refund checks for the 2003 incremercial real estate loans. Although the issuance ment to the child tax credit, downward adjustments to of commercial-mortgage-backed securities (CMBS) withholding schedules for individual taxpayers, and slowed somewhat in the first quarter from the rapid the sweetening of the partial-expensing investment pace of the second half of last year, issuance appears incentive for businesses. In addition, outlays will to have rebounded strongly in the second quarter. be boosted by the supplemental appropriations for Despite continued increases in vacancy rates and defense and foreign aid and by additional grants to declines in the rents charged for various types of the states. If the latest projection from the Congrescommercial properties, the credit quality of commer- sional Budget Office is realized, the unified deficit cial mortgages has yet to show appreciable signs will increase from $158 billion in fiscal 2002 to more of deterioration. At commercial banks, delinquency than $400 billion in fiscal 2003. rates on commercial mortgages edged up only The deterioration in the unified budget has been slightly in the first quarter of 2003 from their histori- mirrored in a sharp downswing in federal saving— cally low levels of recent years. Delinquency rates on CMBS, which were stable in 2002 at about the midpoint of their recent range, have also risen just a bit Federal receipts and expenditures this year. Respondents to the April 2003 Senior Loan Officer Opinion Survey attributed the resiliency of the credit quality of commercial real estate loans in part to borrowers' ability to refinance at lower interest rates; they also mentioned that the many borrowers with substantial equity positions in the mortgaged properties have an extra incentive to remain current. Banks also pointed to their having tightened lending standards and terms, including maximum loan-tovalue ratios, well in advance of the current downturn. In line with the assessment that, to date, credit quality in the sector remains good, spreads on CMBS over Treasuries have remained in the lower half of the ranges observed over the past few years. Market reports indicate that CMBS issuers generally have NOTE. The budget data are from the unified budget; through 2002 they are had access to terrorism insurance for the underlying for fiscal years (October through September), and GDP is for Q4 to Q3. For 2003, the budget data are for the twelve months ending in May, and GDP is properties, and the cost of that insurance has come for 2002:Q2 to 2003:Q1. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 363 Net national saving couple of years reflects in part a reversal of the capital gains bonanza of the late 1990s and the tax reductions enacted in 2001. (Capital gains are not included in the NIPA income measure, which, by design, includes only income from current production.) In addition, the change in the distribution of income in the late 1990s, which concentrated more income in the upper tax brackets, may have been reversed some during the past couple of years. Federal spending during the first eight months of fiscal year 2003 was 6V2 percent higher than during the same period last year; excluding the drop in net interest outlays, spending was more than IV2 percent higher. Spurred by the war in Iraq, defense spending 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 has moved up another 15 percent thus far this year; NOTE. The data are quarterly and extend through 2003:Q1. Nonfederal outlays for homeland security have risen briskly as saving is the sum of personal and net business saving and the current surplus well. Expenditures for income security programs, or deficit of state and local governments. which include the temporary extended unemployment compensation program, also have risen at a essentially, the unified surplus or deficit adjusted fairly rapid rate. Though growth in spending on to conform to the accounting practices followed in Medicare and Medicaid, taken together, has slowed the national income and product accounts (NIPA). a bit this year, the rising cost and utilization of Indeed, net federal saving, which accounts for the medical care continue to put upward pressure on depreciation of government capital, fell from a high these programs. of a positive 2 percent of GDP in 2000 to a negative Expenditures for consumption and gross invest- 2Vi percent of GDP in the first quarter of 2003. With ment, the part of federal spending that is included in little change, on balance, in nonfederal domestic sav- GDP, rose just slightly in real terms in the first ing over this period, the downswing in federal saving quarter as a sizable increase in nondefense purchases showed through into net national saving, which was was nearly offset by a surprising decline in defense equal to less than 1 percent of GDP in the first spending. The dip in defense spending followed sevquarter, compared with the recent high of 6V2 percent eral quarters of large increases; with the supplemenof GDP in 1998. If not reversed over the longer haul, tal appropriation in place, defense spending in the such low levels of national saving could eventually second quarter appears to have resumed its rapid impinge on the formation of private capital that con- growth. tributed to the improved productivity performance of Federal debt held by the public advanced at a the past half-decade. 2Va percent annual rate in the first quarter and Federal receipts in the first eight months of the remained at just below 35 percent of nominal GDP. current fiscal year were nearly 3 percent lower than during the comparable period of fiscal 2002 after Change in real government expenditures adjusting for some shifts in the timing of payments on consumption and investment during the fall of 2001. Individual receipts were especially weak: Although withheld taxes, which tend to move in line with wages and salaries, held up fairly well (after adjusting for changes in tax law) during this period, nonwithheld payments, which are more sensitive to capital income, dropped sharply. This spring's net final payments, which are largely payments on the previous year's liabilities, were exceptionally soft for a second year in a row; in combination with the information on withheld and estimated payments, they imply that individual liabilities continued to shrink as a percentage of the NIPA tax base in 2002. The substantial drop in the ratio of liabilities to NIPA income over the past Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

364 Federal Reserve Bulletin • August 2003 Federal government debt held by the public entities boosted their outlays considerably, in large part because of rising health care costs and increased Percent of nominal GDP demands for security-related spending. The fiscal difficulties have been especially acute at the state level. And although local governments generally — v / \ have fared somewhat better, many are now facing — 45 reductions in assistance from cash-strapped states. According to the NIPA, the state and local sector's \ Vy-— 35 aggregate current deficit rose to about $50 billion in 2002—or Vi percent of GDP, the largest annual deficit relative to GDP on record—and that gap exceeded — 25 $65 billion at an annual rate in the first quarter of 2003. 1 II 1 1 1 1 II III Almost all states and most localities are subject to 1963 1973 1983 1993 2003 balanced budget and other statutory rules that force NOTE. Through 2002, the data for debt are year-end figures, and the them to address fiscal imbalances. These rules typicorresponding value for GDP is for Q4 at an annual rate; the final observation cally apply to operating budgets, and governments is for 2003 :Q1. Excludes securities held as investments of federal government accounts. have taken a variety of actions to meet their budgetary requirements for fiscal 2003 and to pass acceptable budgets for fiscal 2004, which started on July 1 During the first half of the year, the Treasury in most states and many localities. Strategies have announced several changes in its debt management, included drawing upon accumulated reserves, issuing including the reintroduction of three-year notes and bonds, and, in some cases, using one-time measures regular reopenings of certain five-year and ten-year such as moving payments into the next fiscal year and notes, to position itself better to address the widening selling assets. Increases in taxes and fees also have federal deficit. These steps have the consequences of become more widespread. Still, spending restraint lengthening the average maturity of its outstanding has remained an important component of the adjustdebt and trimming the size of some of its auctions. ment. Governments—especially at the state level— The Treasury also noted that it would be increasing have held the line on hiring and have limited their the frequency and size of its auctions of inflationoutlays for a variety of other goods and services. In indexed securities. the NIPA, real expenditures for consumption and Beginning in February 2003, the Treasury needed gross investment in the state and local sector rose to take steps to avoid exceeding the level of the only Vz percent over the year ending in the first statutory debt ceiling and employed several accountquarter, compared with increases averaging more than ing devices to which market participants have 3!/2 percent per year over the preceding five years. become accustomed. It also temporarily suspended the issuance of the type of Treasury debt instrument in which the proceeds of advance refundings by state State and local government current surplus or deficit and local governments are allowed to be invested. No adverse reaction in financial markets was apparent Percent of GDP during this period, however, and a bill increasing the debt ceiling $984 billion, to $7,384 trillion, was enacted on May 23. State and Local Governments On the whole, the budget situation at state and local governments remains grim. Like the federal government, states and localities were running sizable budgetary surpluses in the late 1990s and now face large deficits. After having enacted a series of tax reductions in the second half of the 1990s, they subse- 1983 1987 1991 1995 1999 2003 quently saw their receipts eroded by weak incomes NOTE. The data, which are quarterly, are on a national income and product account basis and extend through 2003:Q1. The current surplus or deficit and the falling stock market. At the same time, these excludes social insurance funds. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 365 Available data point to continued softness in such quarter, little changed from the previous quarter but spending in the second quarter. significantly larger than the outcome for last year as a The pace of gross issuance of municipal bonds whole. The increase over last year is attributable remained robust in the first half of the year; it was primarily to lower net interest and dividend payfueled in part by the needs of state and local govern- ments. Net unilateral transfers and other income were ments to finance capital spending, which is not sub- a negative $74 billion, down from a negative $67 bilject to balanced budget requirements. Long-term debt lion in the fourth quarter. issuance was heavily used for new education and Real exports of goods and services fell 1XU percent transportation projects. Declining yields on munici- at an annual rate in the first quarter; this decline, like pal debt and high short-term borrowing demands also that in the previous quarter, reflected in part slow provided important impetus to debt issuance. Despite economic growth of our major trading partners. continued fiscal pressures on many state and local Within this total, exports of goods increased nearly governments, the credit quality of municipal bonds 2 percent after declining sharply in the fourth quarter has shown some signs of stabilizing. Although the of last year. Moderate increases in most trade catespread of BBB-rated over AAA-rated municipal bond gories were partly offset by a decrease in exports of yields has widened somewhat, the number of munici- capital goods (particularly aircraft and computers). pal bond upgrades by S&P has slightly exceeded the Meanwhile, real exports of services declined about number of downgrades so far this year. The yields on 8 percent in the first quarter, mainly because of a drop municipal bonds declined more slowly than the yields in receipts from foreign travelers. Prices of exported on Treasury securities of comparable maturity over goods and services, which rose nearly 4 percent at an much of the first half of the year; these moves low- annual rate in the first quarter, were boosted by rising ered the yield differential from the tax-advantaged prices of services and industrial supplies (mainly status of municipal securities. goods with a high energy component). Prices of exported capital goods, automotive products, and consumer goods showed little change in the first quarter. The External Sector U.S. real imports of goods and services declined Trade and the Current Account 61/4 percent at an annual rate in the first quarter following four quarters of increases. Imports of oil, In the first quarter of 2003, the U.S. current account other industrial supplies, aircraft, and services (prideficit amounted to $544 billion at an annual rate, or marily U.S. travel abroad) all dropped sharply. about 5 percent of GDP, a somewhat higher percent- Imports of automotive products decreased for the age than in any quarter of last year. The deficit on second consecutive quarter, but imports of machinery trade in goods and services widened $22 billion in the and consumer goods rose. The price of imported first quarter, to $486 billion, as the value of imports goods jumped 12 percent at an annual rate in the first rose more than that of exports. U.S. net investment quarter, mainly resulting from spikes in the prices income registered a $16 billion surplus in the first of natural gas and oil. The price of imported goods excluding fuels rose about 2 percent in the first U.S. trade and current account balances Change in real imports and exports of goods and services Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

366 Federal Reserve Bulletin • August 2003 Prices of oil and of nonfuel commodities U.S. international securities transactions January 2001 = 100 Dollars per barrel Billions of dollars Private foreign purchases of U.S. securities Bonds, net — • Equities, net Nonfuel NOTE. The data are monthly and extend through June 2003. The oil price is Private U.S. purchases of foreign securities the spot price of West Texas intermediate crude oil. The price of nonfuel commodities is a weighted average of thirty-nine primary-commodity prices [ ; Bonds, net 75 from the International Monetary Fund. •I Equities, net — 50 quarter, the fourth consecutive quarter of small increases, in part because of the depreciation of the dollar since early 2002. Slight declines in prices of 25 imported capital goods, automotive products, and consumer goods were offset by small increases in other categories. The spot price of West Texas intermediate crude oil rose to a twelve-year high of nearly $38 per barrel 2000 2001 2002 2003 in mid-March as the United States moved closer to SOURCE. Department of Commerce and the Federal Reserve Board. war in Iraq and as a nationwide strike slowed Venezuelan oil production to a trickle. With the com- response to downward pressures on the foreign mencement of military action in Iraq and the rela- exchange value of the dollar. U.S. residents, who had tively rapid conclusion of the war, prices fell to less sold foreign securities on net last year, recorded than $26 per barrel by late April. Downward pressure sizable net purchases in the first quarter of this year: on prices was also exerted by increased produc- Relatively large purchases of foreign equities outtion from some OPEC countries, particularly Saudi weighed further sales of bonds. Arabia, Kuwait, and Venezuela, where oil production Direct investment into the United States, after recovered substantially relative to the first quarter. being restrained in 2002 by a slowdown of global In early June, oil prices moved back above $30 per mergers and acquisitions, picked up in the first quarbarrel after it became apparent that Iraqi exports of ter of 2003, as merger activity resumed. U.S. direct oil would return more slowly than market partici- investment abroad was steady in 2002 and the first pants had previously expected. quarter of 2003. The Financial Account The Labor Market The U.S. current account deficit continued to be Employment and Unemployment financed in large part by private flows into U.S. bonds and by foreign official inflows. Private foreign pur- The demand for labor has weakened further this year, chases of U.S. securities, which slowed in the latter though the pace of job losses appears to have slowed part of 2002, stepped down a bit more in the first somewhat. After having fallen an average of 55,000 quarter of 2003, owing in part to weaker demand for per month in 2002, private payroll employment U.S. equities. In contrast, inflows into the United declined 35,000 per month, on average, in the first States from official sources, which surged in 2002, quarter of 2003 and 21,000 per month in the second picked up further in the first half of 2003 partly in quarter. The civilian unemployment rate, which had Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 367 Net change in payroll employment remained soft in the first quarter but posted a sizable gain in the second quarter. Employment in the information sector, which includes telecommunications, publishing, and Internet-related services, continued to decrease, though a shade less rapidly than over the preceding two years. Demand for workers in retail trade, leisure and hospitality, and transportation and utilities remained lackluster. The unemployment rate was little changed in the first quarter, but it subsequently turned up. In June, it stood at 6.4 percent, V2 percentage point higher than the average in the fourth quarter of 2002 and about 2V2 percentage points above the lows reached in 2000. The rise in the unemployment rate over the I I I I I I I I I I 1 I I I 1993 1995 1997 1999 2001 2003 spring was chiefly driven by the ongoing softness in labor demand. Most recently, it also coincided with been fluctuating around 53A percent since late 2001, an uptick in labor force participation. That uptick was little changed in the first quarter but moved up in notwithstanding, the participation rate has trended the spring. In June, it stood at 6.4 percent. down over the past couple of years, a slide mainly The manufacturing sector has continued to shed reflecting declines for adult men and younger jobs this year. On average, factory payrolls fell persons. 55,000 per month over the first half of 2003— essentially as fast as over 2002 as a whole. Employment declines were widespread, but the metals, Productivity and Labor Costs machinery, and computers and electronics industries continued to be especially hard hit. The weakness Labor productivity has continued to post solid gains in manufacturing also cut into employment at help- in recent quarters as businesses have remained relucsupply firms and at wholesale trade establishments, tant to expand their payrolls and instead have focused although help-supply jobs increased noticeably in on cutting costs in an environment of sluggish—and May and June. uncertain—demand. According to the currently pub- Apart from manufacturing and related industries, lished data, output per hour worked in the nonfarm private employment increased slightly, on net, in the business sector rose at an annual rate of 2 percent in first half after having been about unchanged in 2002. the first quarter and 2Vi percent over the four quarters Employment in the financial activities sector rose ending in the first quarter. Though the recent gains briskly, in part because of the boom in mortgage are down from the very rapid increases in late 2001 refinancings. Construction employment, which had and 2002, they are similar to those achieved in the been essentially unchanged, on net, since 1999, second half of the 1990s. However, whereas the Civilian unemployment rate Change in output per hour Percent, annual rate 4 QI _ 11 I I 1 i i I I I i M I i i i i i I I I i i i i i i i i i i i i i 11 1973 1983 1993 2003 1993 1995 1997 1999 2001 2003 NOTE. The data extend through June 2003. NOTE. Nonfarm business sector. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

368 Federal Reserve Bulletin • August 2003 Measures of change in hourly compensation cent and roughly in line with the rise indicated by the ECI. Prices Headline inflation numbers have been heavily influenced by movements in energy prices, but underlying inflation has remained subdued and according to some measures has even moved somewhat lower. Reflecting the surge in energy prices, the chain-type price index for personal consumption expenditures (PCE) increased at an annual rate of 2% percent in the first quarter, about 1 percentage point faster than the increase over 2002 as a whole; this index moved down in April and May as energy prices retreated. NOTE. The data extend through 2003 :Q1. For nonfarm compensation, change is over four quarters; for the employment cost index (ECI), change is PCE prices excluding food and energy—the so-called over the twelve months ending in the last month of each quarter. Nonfarm core PCE price index—were nearly unchanged durcompensation is for the nonfarm business sector; the ECI is for private industry excluding farm and household workers. ing the spring, and the twelve-month change in this series stood at VA percent in May, compared with earlier productivity gains were driven importantly by a reading of l3A percent over the preceding twelve an expansion of the capital stock, the recent gains months. appear to have come mainly from efficiency- In the main, the quiescence of underlying inflation enhancing changes in organizational structures and reflects continued slack in labor and product markets better use of the capital already in place. and the robust productivity gains of recent years. In The employment cost index (ECI) for private non- addition, inflation expectations have remained in farm businesses increased about 33A percent over the check—and, indeed, may have subsided a bit further. twelve months ending in March—only a shade less For example, according to the Michigan Survey Rethan over the preceding year but more than !/2 per- search Center, the median expectation for inflation centage point below the increases of a few years over the coming year was running about 2 percent in earlier. The deceleration in hourly compensation over May and June, compared with 2Vi percent to 3 perthe past few years has been concentrated in wages, cent over much of the preceding few years. Readings for which gains slowed from about 4 percent per year on this measure had been considerably higher earlier in 2000 and 2001 to 3 percent over the year ending in the year, when energy prices were rising, and it this March. The slowing in wage growth primarily is difficult to know whether the decline of late was reflects the effects of the soft labor market and lower driven chiefly by the retreat in energy prices during rates of price inflation; in addition, employers may be exerting more restraint on wages to offset some of the Change in consumer prices upward pressure on total compensation from rising benefit costs. The increase in benefits was especially * ; ' ^ ' ^ ^ ' y S f i P ^ y ^ ^ i y < P e r c e n t, annual rate sharp in the first quarter of 2003; in that period, • Consumer price index employers stepped up their contributions to defined- g Chain-type price index for PCE benefit retirement plans in response to declines in the market value of plan assets, and health insurance costs continued to increase rapidly. In total, benefit costs rose 6 percent over the year ending in March. The growth in compensation per hour in the nonfarm business sector—an alternative measure of hourly compensation based on the NIPA—has swung widely in recent years. Fluctuations in the value of stock option exercises, which are excluded from the ECI, likely have contributed importantly to these swings. In any event, the increase in this measure over the year ending in the first quarter was 3 lA per- NOTE. Change for 2003 is from December 2002 to May 2003 at an annual rate; changes for earlier periods are from December to December. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 369 the spring. Non-oil import prices posted a sizable the price of owner-occupied housing was up only increase in the first quarter after having been little 2Vi percent after having risen 414 percent over the changed in 2002, but the first-quarter rise was due preceding period. But prices for some other types of largely to a spike in the price of imported natural gas, services accelerated. Most notably, the prices of which should not have much effect on core consumer financial services provided by banks without explicit price inflation. Given the decline in the dollar from charge turned up after having decreased over the its peak in early 2002, non-oil import prices will preceding two years; because these prices cannot be probably trend up modestly in coming quarters. derived from market transactions and thus must PCE energy prices rose sharply in the first quarter be imputed, they are difficult to measure and tend to but turned down in the spring, a pattern largely be volatile from year to year. mirroring the swings in crude oil prices. Gasoline Increases in the core consumer price index (CPI) prices, which had already been elevated in late 2002 also have been very small recently, and the twelveby weather-related supply disruptions, increased fur- month change in this measure slowed from 2xh perther early this year as crude oil costs rose and whole- cent in May 2002 to IV2 percent in May 2003—a sale margins remained large; by June 1, gasoline somewhat greater deceleration than in core PCE prices had reversed that increase, and they have prices. The greater deceleration in the CPI is primachanged little, on net, since that time. Natural gas rily accounted for by its narrower scope and different prices also soared in early 2003 as tight inventories weighting structure than the PCE measure. In particuwere depleted further by unusually cold weather; lar, it excludes the imputed prices of financial sersince the unwinding of February's dramatic spike, vices rendered without explicit charge as well as prices have held in a narrow range. Inventories of several other categories for which market prices are natural gas have increased significantly of late, but not available; these non-market-based prices have they are still low enough to raise concerns about the accelerated notably recently. In fact, when the nonpossibility of future price spikes in the event of a heat market categories are stripped from the core PCE wave later this summer or an unusually cold winter. index, the remaining components show a deceleration Reflecting the higher natural gas input costs, PCE close to that in the core CPI. Another consideration is electricity prices rose substantially over the first five that housing costs have a much larger weight in the months of 2003 after having fallen some in 2002. CPI than in the PCE index, partly because of the Increases in core consumer prices of both goods CPI's narrower coverage. Thus, the smaller price and services have slowed over the past year, with the increases for housing services of late have a bigger deceleration most pronounced for goods. Prices for damping effect on core CPI inflation, just as the hefty core PCE goods fell 2lA percent over the year ending increases in this category in 2001 and 2002 tended to in May after having decreased 1 percent over the lift the CPI relative to the PCE index. preceding twelve months. Meanwhile, the rise in Broader price measures likewise point to low inflaprices for non-energy services totaled 23A percent tion over the year ending in the first quarter. In over the year ending in May, a little less than over the particular, the chain-type price index for GDP rose preceding period. Among the major types of services, only 1V2 percent over that period, about the same as during the comparable period four quarters ear- Change in consumer prices excluding food and energy lier. Meanwhile, the price index for gross domestic purchases—which is defined as the prices paid Twelve-month percent change Alternative measures of price change Percent — 3 2001 2002 "A A \ Consumer price index Price measure to to 2002 2003 Chain-type ft — 2 Gross domestic product 11..44 11..66 Gross domestic purchases ..88 22..33 Personal consumption expenditures ..99 22..22 Excluding food and energy 11..55 11..55 Chain-type price index for PCE — 1 Chained CPI ..99 22..55 Excluding food and energy 11..99 11..44 Fixed-weight Consumer price index 11..33 22..99 1 1 1 1 1 1 1 1 1 1 1 1 1 J Excluding food and energy 22..55 11..88 1993 1995 1997 1999 2001 2003 NOTE. Changes are based on quarterly averages and are measured from Q1 NOTE. The data extend through May 2003. to Ql. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

370 Federal Reserve Bulletin • August 2003 for consumption, investment, and government Interest rates on selected Treasury securities purchases—increased 2lA percent, up from 3/4 percent during the preceding period. The upswing mainly reflects the effect of higher energy prices and roughly matches the acceleration in total PCE prices; the price indexes for construction and government purchases also recorded somewhat larger increases than they had over the preceding period. U.S. Financial Markets On balance, major stock indexes have climbed noticeably this year, government and corporate interest rates have declined, and risk spreads, which had dropped significantly late last year, have fallen NOTE. The data are weekly averages and extend through July 9. further. That short burst of optimism was quickly damped by subsequent economic reports that were decidedly Before the War in Iraq less rosy, a jump in oil prices in response to the looming prospect of war in Iraq, and increased ten- The year began on an optimistic note in financial sions with North Korea. Measures of uncertainty, markets, in part owing to the release of a surprisingly such as implied volatility, moved up in several marstrong report from the Institute for Supply Manage- kets. Major equity indexes slid and by mid-March ment and the announcement of a larger-than-expected were off about 4 percent to 9 percent from the beginpackage of proposed tax cuts, which included elimi- ning of the year. Investors also came to believe that nation of the personal federal income tax on many the onset of FOMC tightening would occur later than corporate dividend payments. In addition, yields and they had earlier believed, a shift in perception that risk spreads on corporate bonds had dropped signifi- was reflected in lower yields on Treasury bonds. cantly in the fourth quarter of 2002, partly in reaction Yields on investment-grade corporate bonds fell to the absence of new revelations of accounting about in line with those on Treasuries, and investors irregularities and to the improved outlook for corpo- appeared to be substituting high-quality bonds for rate credit quality. Money market futures rates appar- equities as part of a broader flight to fixed-income ently embedded an expectation that the FOMC would securities over this period. By contrast, yields on begin increasing the federal funds rate as early as below-investment-grade bonds rose a bit, on balance, mid-summer 2003. between mid-January and mid-March, a move that left their risk spreads higher as well. Major stock price indexes After the War in Iraq Once it became clear that military action in Iraq was imminent, a robust rally erupted in both the equity and bond markets, as some of the uncertainties apparently dissipated and investors began to show a greater appetite for riskier assets. Equity indexes jumped about 8 percent in the two weeks bracketing the President's ultimatum to Saddam Hussein, and prices climbed an additional 3 percent through the end of April, partly on the release of generally better-thanexpected earnings reports for the first quarter. Gains in share prices were fairly widespread and included technology, defense, petroleum, and especially financial companies. NOTE. The data are weekly averages and extend through July 9. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 371 Spreads of corporate bond yields over June. Implied volatility of the S&P 100 index, which the ten-year Treasury yield had been elevated earlier in the year, fell substantially with the conclusion of major hostilities in Iraq; it is Percentage points Percentage points now near the bottom of its range of the past several years. Moreover, downward revisions to analysts' earnings expectations for the year ahead have been the smallest since early 2000. The tax package passed in late May, which included a cut in taxes on capital gains and dividends, may have provided some additional impetus to equity prices. The FOMC decided on June 25 to reduce the target federal funds rate 25 basis points, to 1 percent, but some observers had been anticipating a cut of 50 basis points. In addition, markets appeared to read the Committee's assessment of economic prospects as more upbeat than expected. Partly as a result, NOTE. The data are weekly averages and extend through July 9 except for yields on longer-dated Treasury securities reversed a the high-yield series, which extends through July 7. The spreads compare the portion of their previous decline in the weeks followyields on Merrill Lynch AA, BBB, and 175 indexes with the yield on the ten-year off-the-run Treasury note. ing the meeting. Yields on high-quality corporate bonds rose about in line with Treasuries over the The easing of tensions also put upward pressure same period, but yields on speculative-grade bonds on Treasury yields, but additional disappointing eco- edged up only slightly, and risk spreads narrowed nomic data offset the diminished safe-haven demands further. Forward-looking economic indicators were and left those rates down, on balance, during the generally positive, and stock price indexes—the period covering the war in Iraq and its immediate Nasdaq, in particular—continued to trend higher. aftermath. Yields on corporate bonds also declined, On net, the constant-maturity yield on the two-year in part because of strengthened corporate balance Treasury note has fallen 24 basis points this year, to sheets, the reduction in uncertainty, and perhaps 1.37 percent as of July 9, while the yield on the because investors began to search for higher returns. ten-year Treasury bond has fallen 10 basis points, Moreover, according to one widely used measure, to 3.73 percent. Over the same period, the spreads on speculative-grade bonds tumbled about Wilshire 5000 is up 15 V2 percent, and the Nasdaq has 150 basis points, to about 520 basis points, from surged more than 30 percent. As a result of the mid-March until mid-May, and then fluctuated some- decline in real interest rates, the spread between the what before ending June near that level. The rally in twelve-month forward earnings-price ratio for the below-investment-grade bonds was particularly evident in sectors that had previously experienced some of the greatest widening of spreads—telecom, energy Implied S&P 100 volatility trading, and utilities; the interest in these sectors further indicated investors' increased appetite for Percent risk. A stubbornly sluggish economy and rapid growth of productivity muted both inflation and inflation expectations, inducing the FOMC to begin pointing to a further substantial decline in inflation as a concern at its May meeting. Market participants took this to imply that short-term rates would be held along a lower path for longer than they had previously expected. This shift in expectations triggered a further decline in intermediate- and long-term yields. With long-term inflation expectations apparently only little changed, the decline in yields translated into a sizable decline in real interest rates. NOTE. The data are weekly averages and extend through July 9. The series That drop in real interest rates was among several shown is the implied volatility of the S&P 100 stock price index as calculated from the prices of options that expire over the next several months. factors providing a boost to equity prices in May and SOURCE. Chicago Board Options Exchange. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

372 Federal Reserve Bulletin • August 2003 S&P 500 forward earnings-price ratio C&I loan rate spreads, by internal risk rating and the real interest rate Basis points Percent Acceptable /XT""— — 300 S&P 500 earnings-price ratio — A — 250 — \l — 200 Moderate — — 150 — ^^ — 100 Low — 50 Real interest rate Il I I I! 1 1 1 1 1997 1998 1999 2000 2001 2002 2003 1991 1993 1995 1997 1999 2001 2003 NOTE. The data are quarterly and extend through 2003:Q2. Spreads are over a market interest rate of comparable maturity. Low-risk loans are those NOTE. The data are monthly and extend through June 2003. The in risk categories "minimal" and "low." earnings-price ratio is based on I/B/E/S consensus estimates of earnings over SOURCE. Federal Reserve, Survey of Terms of Business Lending. the coming year. The real rate is estimated as the difference between the ten-year Treasury rate and the five-year to ten-year expected inflation rate from the FRB Philadelphia survey. reportedly in part because some of the large inflows to high-yield mutual funds were used to purchase S&P 500 and the real ten-year yield remains wide distressed loans and because of the expectation that despite the run-up in stock prices. many outstanding loans would continue to be prepaid with the proceeds of bond refinancing. Interest rates on commercial paper also dropped to Shorter-term Debt Markets very low levels in the first half of 2003. Risk spreads in this market were relatively stable and near the The average interest rate on commercial and indus- bottom of the range observed over the past several trial loan originations—a substantial majority of years, in part because of businesses' efforts to which have adjustable interest rates—has fallen to its strengthen their balance sheets and improve their lowest level since the start of the Federal Reserve's liquidity. Survey of Terms of Business Lending in 1977. The survey also indicates that risk spreads on these loans receded a bit over the first half of 2003 after having Debt and Financial Intermediation trended up for most of the past several years. Prices in the secondary loan market have risen this year, The debt of all domestic nonfinancial sectors— government, businesses, and households—grew at a 6V2 percent annual rate in the first quarter, down from Average C&I loan rate, domestic banks 8 percent in the fourth quarter of 2002 but still well in Percent excess of the growth of nominal GDP. The proportion of the new credit supplied by depository institutions rose significantly in the second half of last year and remained at about 25 percent in the first half of this year. In large part, the jump reflects the sector's support of the booming mortgage market—through both direct lending and the acquisition of mortgagebacked securities—which has more than offset weak business lending. At commercial banks, revenues — 3 from mortgage-related activities reportedly helped 2 sustain profits in the first quarter at the elevated levels 1 of the past several years despite some erosion in net interest margins. 1991 1993 1995 1997 1999 2001 2003 The delinquency rate on all loans and leases at NOTE. The data are quarterly and extend through 2003:Q2. SOURCE. Federal Reserve, Survey of Terms of Business Lending. banks edged down further during the first quarter, to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 373 Change in domestic nonfinancial debt Measures of bank profitability Percent Percent Percent Percent NOTE. Through 2002 the data are annual; for 2003 they are seasonally adjusted data for Q1. Nonfederal SOURCE. Call Report. cial sectors in the first quarter. The share of net lending supplied by mutual funds increased notably to almost 10 percent in the first quarter, and with the continuation of strong flows to bond mutual funds, Federal, held by public Delinquency rates on selected types of loans at banks Percent NOTE. The data are annual; the observations for 2003 are annualized values for Ql. The total consists of nonfederal debt and federal debt held by the public. Nonfederal debt consists of the outstanding credit market debt of state and local governments, households, nonprofit organizations, nonfinancial businesses, and farms. Federal debt held by the public excludes securities held as investments of federal government accounts. , Commercial real estate its lowest level in two years. Increases in the delin- Commercial and industrial quency rates on commercial real estate loans and non-credit-card consumer loans were offset by declines in those on residential real estate loans, credit card loans, and business loans. For business and credit card loans, however, the delinquency rates Percent at banks remain elevated, and the recent improvement likely reflects, in part, the effect of the tightening of lending standards and terms that has been reported for some time now in the Senior Loan Credit card Officer Opinion Survey. On a seasonally adjusted basis, the ratio of loan-loss provisions to assets declined in the final quarter of last year, and it was Other consumer about unchanged from that still-elevated level in the first quarter of 2003. In addition to the buffer against Residential real estate future losses provided by their high profitability and substantial provisions, virtually all banks—98 percent by assets—remain well capitalized. Among nondepository financial institutions, issuers of asset-backed securities provided about 13 per- NOTE. The data are quarterly, seasonally adjusted, and extend through 2003:Q1. cent of the total credit extended to domestic nonfinan- SOURCE. Call Report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

374 Federal Reserve Bulletin • August 2003 Net percentage of domestic banks tightening standards on In early June, Freddie Mac replaced its top three loans to households executives amid questions about its accounting practices. The spreads on longer-term Freddie Mac debt Percent widened a bit, and its stock price declined sharply; the prices of Fannie Mae securities also declined but to a lesser extent. On net, there appears to be little, if any, spillover into broader financial markets. Monetary Aggregates Through the first half of 2003, the growth rate of M2 was buoyed by several factors and remained elevated. The rising level of mortgage refinancing causes money growth to accelerate because the associated prepayments on mortgage-backed securities that are NOTE. The data are based on a survey generally conducted four times per temporarily held in escrow accounts increase liquid year; the last reading is from the April 2003 survey. Net percentage is the deposits. Demand for M2 was also supported by the percentage reporting a tightening less the percentage reporting an easing. SOURCE. Federal Reserve, Senior Loan Officer Opinion Survey on Bank decline in short-term market interest rates, which Lending Practices. further reduced the opportunity cost of holding money. Precautionary demand for safe and liquid M2 they likely were large suppliers in the second quarter assets also likely buttressed the growth of M2 in the as well. Meanwhile, available data suggest that insur- run-up to the war in Iraq. ance companies likely accounted for about 7 percent In contrast, mutual fund flows related to the bond of total credit extended during the first half of the market rally and the post-war pickup in the stock year, a proportion near the top of the range seen since market may have siphoned funds from M2. Retail the mid-1990s. money market mutual funds and small time deposits Government-sponsored enterprises (GSEs) pro- both experienced net outflows during the first half of vided 11 percent of the net lending (net acquisition the year. While some of that money continued to feed of credit market instruments) in the first quarter, an the extraordinary growth of liquid deposits, it is amount roughly in line with their level in the second likely that a portion was redirected to long-term half of 2002. The duration gaps in the portfolios of mutual funds. the housing GSEs were maintained near their targets. After having weakened significantly in 2002, growth of M3 slowed further in the first half of 2003. Much of this year's slowdown can be attributed to Regulatory capital ratios of commercial banks M2 growth rate Percent Total (tier 1 + tier 2) ratio I I I I I I I J I I I I I I I I I 1991 1993 1995 1997 1999 2001 2003 I" NOTE. The data, which are quarterly and extend through 2003:Q1, are 1991 1993 1995 1997 1999 2001 2003 ratios of capital to risk-weighted assets. Tier 1 capital consists primarily of common equity and certain perpetual preferred stock. Tier 2 capital consists NOTE. M2 consists of currency, travelers checks, demand deposits, other primarily of subordinated debt, preferred stock not included in tier 1 capital, checkable deposits, savings deposits (including money market deposit and a limited amount of loan-loss reserves. accounts), small-denomination time deposits, and balances in retail money SOURCE. Call Report. market funds. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 375 M2 velocity and opportunity cost Official interest rates in selected foreign industrial countries > ^le Percentage points, ratio scale i mp M2 velocity United Kingdom Canada NOTE. The data are quarterly. They extend through 2003:Q1 for velocity NOTE. The data are as of month-end and extend through June 2003. The and 2003:Q2 for opportunity cost. The velocity of M2 is the ratio of nominal interest rates shown are the call money rate for Japan, the overnight rate for gross domestic product to the stock of M2. The opportunity cost of holding Canada, the refinancing rate for the euro area, and the repurchase rate for the M2 is a two-quarter moving average of the difference between the United Kingdom. three-month Treasury bill rate and the weighted average return on assets included in M2. political uncertainties, higher oil prices, slow growth M3 growth rate in the United States, persistent weakness in global high-tech sectors, and continued negative wealth effects from past declines in equity prices all weighed on foreign growth. Foreign economic expansion appeared to remain weak in the second quarter despite the reduction in uncertainty associated with Iraq. Indicators suggest that manufacturing activity abroad has not picked up; instead, industrial production declined in April and May, on average, relative to the first quarter in Japan, Germany, and France. Concerns over the spread of the SARS virus appear to have hurt growth in the second quarter in several Asian developing economies and in Canada. Central banks in several major foreign industrial countries moved to ease monetary policy during the first half of this year. The European Central Bank and NOTE. M3 consists of M2 plus large-denomination time deposits, balances in institutional money market funds, repurchase-agreement liabilities (overnight and term), and eurodollars (overnight and term). Equity indexes in selected foreign industrial countries rapid runoffs of institutional money market mutual Week ending January 5, 2001 = 100 funds. The runoffs were, in turn, partially the result of an unwinding of the strength late last year and the fact that interest rates paid by those funds declined faster than the interest rates paid by the underlying assets this year. The drop in institutional money funds has been offset by growth in eurodollar deposits and repurchase agreements. International Developments United Kingdom Economic activity abroad was sluggish in the first quarter of 2003, with real output in the euro area and NOTE. The data are weekly. The last observations are the average of Japan little changed from the previous quarter. Geo- trading days through July 9, 2003. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

376 Federal Reserve Bulletin • August 2003 Equity indexes in selected emerging markets States. The Bank of Japan (BOJ) maintained shortterm interest rates at near-zero levels, further expanded its target for current account balances held by financial institutions at the BOJ, and took some additional measures to add stimulus to the economy. In the first quarter, foreign financial markets were influenced by heightened anxieties ahead of the war in Iraq, but those concerns appeared to diminish as the war proceeded. Foreign equity prices declined in the first quarter, but they have since recovered. Broad stock indexes for the major industrial countries are up on balance since the beginning of the year but, with the exception of Japan, they have gained less than in the United States. Long-term interest rates in most foreign industrial countries fell during the first half of the year because prospects for inflation diminished, NOTE. The data are weekly. The last observations are the average of trading days through July 9, 2003. Developing Asia consists of China, Hong growth sputtered, and market participants began to Kong, India, Indonesia, Malaysia, Pakistan, the Philippines, Singapore, South expect that policy interest rates would remain low for Korea, Taiwan, and Thailand. an extended period. Asset prices in emerging markets, particularly in Latin America, picked up during the central banks of the United Kingdom, Sweden, the first half of this year; equity prices rose signifi- Switzerland, Norway, and New Zealand all cut officantly, and risk spreads on emerging-market bonds cial interest rates. The pace of monetary easing in narrowed. Bonds issued by a number of emerging- Europe picked up toward midyear, when inflation market economies included collective action clauses pressures dissipated amid growing slack, currency (CACs) that are designed to facilitate a debt restrucappreciation vis-a-vis the dollar, and the decline in oil turing in the event of default; this development had prices after the conflict in Iraq. In contrast, the Bank little noticeable effect on spreads. of Canada raised interest rates twice in the spring, in The dollar's foreign exchange value continued to a continued effort to contain inflation. The Bank of decrease in the first half of 2003. Since the end of Canada left rates unchanged in June, however, in 2002, the dollar has depreciated on a trade-weighted response to a sharp appreciation of the Canadian basis nearly 5 percent against the currencies of a dollar and a drop in Canadian inflation in April, some broad group of US. trading partners. The dollar has slackening of demand in labor markets in May, and declined 13 percent against the Canadian dollar and concerns about the pace of activity in the United more than 7 percent on net against the euro but has fallen less than 1 percent versus the Japanese yen. U.S. dollar nominal exchange rate, broad index During the first quarter, the dollar appeared to react to concerns about the war in Iraq, falling when news indicated a heightened risk of hostilities and strengthening as concerns appeared to abate. After the resolution in April of major hostilities, the dollar fell further, and market commentary focused more on the financing needs posed by the large and growing U.S. current account deficit. Industrial Economies The euro-area economy stagnated in the first quarter of 2003. Consumer spending continued to expand at a modest rate and inventory investment grew, but NOTE. The data are monthly and are in foreign currency units per dollar. business fixed investment fell sharply and exports The last observation is the average of trading days through July 9, 2003. The declined. The German economy contracted in the broad index is a weighted average of the foreign exchange values of the U.S. dollar against the currencies of a large group of major U.S. trading partners. first quarter and continued to underperform the euro- The index weights, which change over time, are derived from U.S. export area average, in part owing to a fiscal tightening shares and from U.S. and foreign import shares. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 377 U.S. dollar exchange rate against tinued strength in domestic demand, as Canada's selected major currencies strong labor and housing markets kept propelling the economy. However, exports declined in the first quar- Week ending January 5, 2001 = 100 ter, largely because of a drop in exports of industrial supplies and forestry products to the United States. 110 More recently, employment declined slightly in April and May, and the unemployment rate moved up. The outbreak of the SARS virus in Toronto hurt Canadian — 100 travel and tourism, and weak U.S. demand slowed the Canadian manufacturing sector. In June, employment — 90 rebounded, but the gain was almost all in part-time work, and manufacturing employment continued to — 80 fall. I . I . . I . I i i I i i l i i i i i l i i I i 1 2001 2002 2003 Emerging-Market Economies NOTE. The data are weekly. Last observations are the average of trading days through July 9, 2003. Exchange rates are in foreign currency units per Economic growth in the Asian developing countries dollar. slowed in the first quarter, brought down by weakness in business investment and consumer spending. undertaken to bring the budget deficit into line with In South Korea, growth of real GDP turned negative limits set out in the euro area's Stability and Growth in the first quarter after a rapid expansion in 2002. Pact. The rise in the exchange value of the euro over the past year has begun to hurt euro-area manufactur- U.S. dollar exchange rates and bond spreads ers; exports have leveled off while imports have for selected emerging markets continued to rise. Recent indicators have shown little rebound in the pace of euro-area activity following Week ending January 5,2001 = 100 Week ending January 5, 2001 = 100 the conclusion of the Iraq war, and business and Exchange rates consumer sentiment have remained sour. Core inflation has slowed from its 2002 peak, and headline 360 — X — 220 inflation, which was temporarily boosted by oil prices, recently has fallen to the 2 percent upper limit Argentine peso i/ f \rvAs" —180 of the ECB's definition of price stability. Economic growth in the United Kingdom slowed 200 Brazilian REAL^ J Y — 140 to a crawl in the first quarter, but recent indicators— /V Vrf^-s/ Mexican peso such as consumer confidence and industrial 120 — — >C — 100 production—suggest that the pace has been some- Korean won what stronger during the past few months. Growth of consumption has slowed but continues to be held up 1 • 1 . , . t • , 1 , , i , . 1 , 1 by a strong labor market and by past gains in housing Percentage points Percentage points prices, although lately these prices have decelerated. Bond spreads The Japanese economy barely grew in the first 80 — j ! Brazil — 20 quarter after expanding almost 2XA percent in 2002. r Business investment continued to grow in the first V^W 60 — Argentina A \ — 15 quarter, and private consumption increased despite stagnating incomes; however, residential and public investment both fell sharply, and exports declined 40 — / J \ — 10 because of the weak global economy. The severity of consumer price deflation lessened somewhat, partly 20 — J Mexico ^ because of the spike in energy prices. Japanese banks continued to be weighed down by bad loans. i • ! < . 1 . . 1 , , ! . . 1 . , 1t il.l , 1I . 1 1 . 1 1 , , 1 , : ! , 1 Canada's economy maintained a moderate pace of 2001 2002 2003 expansion in the first quarter, but recent indicators NOTE. The data are weekly averages. Last observations are the average of suggest that growth of real GDP slowed in the second trading days through July 9, 2003. Exchange rates (top panel) are in foreign currency units per dollar. Bond spreads (bottom panel) are the J.P. Morgan quarter. First-quarter growth was supported by con- Emerging Market Bond Index (EMBI+) spreads over U.S. Treasuries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

378 Federal Reserve Bulletin • August 2003 Tensions with North Korea contributed to a decline in economic policies in response to the financial crisis consumer and business sentiment, but these indica- that erupted in mid-2002. The growth slowdown tors have stabilized in the past couple of months. The largely reflected a continued weakening in domestic Hong Kong economy also contracted, following demand, but exports also deteriorated. Monthly inflastrong growth in the second half of last year. The tion has come down since early this year, and Brazil's SARS outbreak held down both personal consump- central bank recently lowered slightly its benchmark tion and tourism in the first quarter, and even more interest rate. The Lula administration's efforts to negative effects are likely to be seen in the second- implement social security and tax reforms have bolquarter data. Although the Chinese economy has also stered investor confidence. Financial conditions in been adversely affected by SARS, it has been sus- Brazil have improved markedly: Equity prices have tained by strong export growth and investment. Chi- risen more than 20 percent so far this year, the real nese inflation has moved back into positive territory has gained more than 20 percent against the U.S. on a twelve-month basis, largely owing to higher dollar, and credit spreads on Brazilian government prices for energy and food. debt have narrowed more than 600 basis points. The Mexican economy contracted in the first quar- The Argentine economy has started to turn around ter, and exports and business confidence have from the sharp contraction that occurred in the wake declined in recent months. Consumer price inflation of the devaluation and default in late 2001, but the has come down recently, a decline helped in part by level of economic activity remains far below prethe net appreciation of the Mexican peso since early crisis levels, and many of Argentina's structural prob- March. Measures of inflation expectations suggest lems have not been addressed. The Argentine peso that market participants expect the central bank to appreciated more than 20 percent against the dollar come close to achieving its inflation target this year. during the first half of the year. In July, Argentina Brazilian economic growth stagnated in the first implemented controls on short-term capital inflows in quarter largely as a result of the tightening of macro- an effort to stabilize the appreciating currency. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

379 Announcements FEDERAL OPEN MARKET COMMITTEE and Dallas, decreasing the discount rate at the DIRECTIVE banks from 214 percent to 2 percent, effective immediately. The Federal Open Market Committee decided on June 25, 2003, to lower its target for the federal funds rate 25 basis points, to 1 percent. In a related action, APPROVAL OF FINAL RULE MODIFYING the Board of Governors approved a 25 basis point REGULATION Y reduction in the discount rate, to 2 percent. The Committee continues to believe that an accom- The Federal Reserve Board on June 30, 2003, modative stance of monetary policy, coupled with announced its approval of a final rule that modifies still robust underlying growth in productivity, is Regulation Y (Bank Holding Companies and Change providing important ongoing support to economic in Bank Control) to allow bank holding companies activity. Recent signs point to a firming in spending, engaged in permissible derivatives activities to transmarkedly improved financial conditions, and labor fer title to commodities underlying derivative conand product markets that are stabilizing. The econ- tracts on an instantaneous, pass-through basis. omy, nonetheless, has yet to exhibit sustainable The Board will publish its final rule in the Federal growth. With inflationary expectations subdued, the Register shortly, and the rule will become effective Committee judged that a slightly more expansive August 4, 2003. monetary policy would add further support for an economy that it expects to improve over time. The Committee perceives that the upside and AGENCIES ISSUE ADVANCE NOTICE OF downside risks to the attainment of sustainable PROPOSED RULEMAKING FOR THE NEW growth for the next few quarters are roughly equal. In BASEL CAPITAL ACCORD contrast, the probability, though minor, of an unwelcome substantial fall in inflation exceeds that of a The Federal Reserve Board on July 11, 2003, decided pickup in inflation from its already low level. On to issue an interagency advance notice of proposed balance, the Committee believes that the latter con- rulemaking (ANPR) seeking public comment on the cern is likely to predominate for the foreseeable implementation of the New Basel Capital Accord in future. the United States. The Board also decided to seek Voting for the FOMC monetary policy action were comment on draft interagency supervisory guidance Alan Greenspan, Chairman; Ben S. Bernanke; on internal-ratings based systems for corporate cred- Susan S. Bies; J. Alfred Broaddus, Jr.; Roger W. its and draft guidance on advanced measurement Ferguson, Jr.; Edward M. Gramlich; Jack Guynn; approaches (AMA) for measuring operational risk. Donald L. Kohn; Michael H. Moskow; Mark W. The New Basel Capital Accord, which is being Olson; and Jamie B. Stewart, Jr. developed by the Basel Committee on Banking Voting against the action was Robert T. Parry. Supervision, builds on and, for certain banks, replaces President Parry preferred a 50 basis point reduction the Basel Capital Accord of 1988, which is the framein the target for the federal funds rate. In taking work for capital adequacy standards for large, interthe discount rate action, the Federal Reserve Board nationally active banks and the basis for the riskapproved the requests submitted by the Boards based capital adequacy standards now in place for all of Directors of the Federal Reserve Banks of U.S. banks and bank holding companies. Boston, New York, St. Louis, Kansas City, and The ANPR, developed by the Board, the Office of San Francisco. the Comptroller of the Currency, the Federal Deposit The Federal Reserve Board on June 26, 2003, Insurance Corporation, and the Office of Thrift approved actions by the Boards of Directors of Supervision, presents an overview of the proposed the Federal Reserve Banks of Philadelphia, Cleve- implementation in the United States of the advanced land, Richmond, Atlanta, Chicago, Minneapolis, approaches to determining capital requirements for Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

380 Federal Reserve Bulletin • August 2003 credit risk and operational risk. The agencies antici- lect, process, and distribute quarterly bank financial pate that comments will be useful in shaping further reports. refinements to the framework as the Basel Committee This step involves awarding a contract, through the completes its work on the New Accord and, after Federal Deposit Insurance Corporation (FDIC), to that, in developing a Notice of Proposed Rulemaking Unisys Corporation, McLean, Virginia. Unisys, with to implement the New Accord in the United States. its development team of Microsoft, Pricewaterhouse- "The proposed accord would be dramatically more Coopers, IDOM, EDGAR Online, UBMatrix, and risk sensitive and transparent and would provide a V-Tech Solutions, will create a flexible solution, higher degree of market discipline. It would thus based on proven technologies, that incorporates Intercontribute to a safer and sounder banking system here net delivery using promising new innovations such as and abroad," said Board Vice Chairman Roger W. the XBRL business reporting language. Ferguson, Jr. "Though it has been in development for The new business process, which will be phased in some time, it is not cast in stone. I hope the industry through 2004, will consolidate the collection, editing, and public will provide the U.S. agencies with rigor- and access of quarterly bank financial reports into a ous comments that can help us think through the central data repository, which will be accessible by remaining issues and, possibly, simplify an admit- banking regulators, financial institutions, and the pubtedly complex framework." lic. The new model is also expected to reduce burden Specifically, the ANPR provides that large, interna- on the industry while providing data to the public in a tionally active banking organizations that meet more timely and flexible manner. certain size or foreign-exposure thresholds would Initial system development and pilot projects will be required to meet rigorous supervisory standards take place over the next eighteen months. During that and implement the advanced internal-ratings-based time the FDIC, the Board of Governors of the Federal (A-IRB) approach for credit risk and the AM A for Reserve System, and the Office of the Comptroller of operational risk. It describes the A-IRB approach to the Currency will work with the industry to define credit risk and its application to particular portfolios data standards, streamline the collection and validaof credit exposures (wholesale, retail, and equity) as tion of the data, and prepare for the rollout of the new well as the A-IRB approach to credit risk mitigation central data repository. The first reports are expected and for securitization exposures. The ANPR also to be filed under the new system effective with the provides guidance and supervisory standards for the September 2004 Call Report. AMA for operational risk, outlines the proposed The ten-year, fixed-price contract of $39 million approaches for supervisory review and disclosure includes short-term systems development costs and (Pillars 2 and 3 in the New Accord), and seeks long-term operating costs. comment on certain competitive considerations. The draft supervisory guidance on internal-ratingsbased systems for corporate credits describes the PUBLICATION OF THE MAY 2003 UPDATE essential components and characteristics of an accept- TO THE COMMERCIAL BANK EXAMINATION able A-IRB framework, including rating assignment, MANUAL validation, quantification, data maintenance, and The May 2003 update to the Commercial Bank oversight and control mechanisms. The draft supervisory guidance on the AMA for operational risk sets Examination Manual, Supplement No. 18, has been forth expectations for banking organizations for cal- published and is now available. The Manual comculating operational risk exposure under the proposed prises the Federal Reserve System's regulatory, framework and outlines requirements for governance, supervisory, and examination guidance for state measurement, monitoring, and control of operational member banks. The new supplement includes the risk. following subjects: 1. The Interagency Policy Statement on the Internal Audit Function and Its Outsourcing. The March 17, 2003, REGULATORS AWARD CONTRACT TO policy statement supercedes a 1997 interagency policy MODERNIZE COLLECTION OF BANK DATA statement on internal auditing. This new policy conveys recent developments in internal auditing and addresses supervisory concerns, policies, practices, and procedures The Federal Financial Institutions Examination about the internal audit function and its outsourcing. Super- Council (FFIEC) on June 17, 2003, announced the visory guidance is also provided on the independence of first step in an interagency effort to modernize and accountants, especially those who provide both internal streamline the way that federal bank regulators col- and external audit services to institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 381 Provisions of the 2002 Sarbanes-Oxley Act and asso- Examiners should consult with a registered state member ciated SEC rules are also addressed within the 2003 policy bank's management to ensure that the required reports statement. Banking institutions that are subject to sec- have been filed with the Federal Reserve Board pursuant tion 36 of the Federal Deposit Insurance Act—essentially to section 208.36(a) of Regulation H. Some of the most those with $500 million or more in assets—should comply common SEC forms that must be filed under the 1934 Act with the Sarbanes-Oxley Act prohibition on internal audit and the Sarbanes-Oxley Act are listed and discussed. outsourcing to an external auditor. The examination objectives, examination procedures, and internal control ques- 7. The Board's January 6, 2003, Revision to Subpart D tionnaire were revised to consider the new provisions of Regulation K, Sections 211.41-43. The definition and within this policy statement. (See SR letters 03-5 and detailed components of the allocated transfer-risk reserve 02-20.) (ATRR) are discussed, as stated in the rule (effective February 10, 2003). The rule also provides that international loan 2. An Interagency Advisory on Mortgage Banking. This fees are to be accounted for in accordance with GAAR February 25, 2003, advisory highlights various supervisory concerns regarding the valuation and hedging of mortgage- 8. The Use of the Federal Reserve's Statistically Based servicing assets and similar mortgage banking assets. Sampling Approach for Loan Reviews at Certain Com- Supervisory guidance is also provided on sound risk- munity Banks. The use of a statistically based sampling management practices pertaining to valuation and model- approach to loan reviews is discussed as an alternative ing processes, management information systems, and inter- to the traditional target-coverage approach. The loannal audit involved with mortgage banking activities. The sampling program is directed toward banks currently havexamination objectives, examination procedures, and inter- ing a CAMELS composite and asset-quality rating of 1 or nal control questionnaire were also revised. (See SR letter 2 and also having assets of less than $ 1 billion. Examina- 03-4.) tion objectives and examination procedures are provided. (See SR letter 02-19.) 3. The Interagency Guidance on Supervisory Account Management and the Allowance for Loan and Lease Losses 9. The FFIEC Interagency Guidance on Authentication (ALLL) Methodology for Credit Card Lending. In addition in an Electronic Banking Environment. This August 8, to setting forth supervisory expectations for credit card 2001, guidance provides a discussion of the risks and credit line management, over-limit practices, minimum needed risk-management measures and controls pertaining payments, negative amortization, and workout and forbear- to existing and emerging authentication practices. The proance practices, this January 8, 2003, guidance clarifies cesses are addressed for verifying the identity of prospecvarious reporting requirements related to income recogni- tive customers and for the authentication of existing custion and the ALLL. The credit card lending examination tomers who use online systems, such as Internet banking procedures were also revised and expanded. These credit services. (See SR letter 01-20.) card lending examination procedures also include the credit card lending examination procedures that are currently A more detailed summary of changes is included found in examination modules. The examination objectives with the update package. The Manual and updates, and the internal control questionnaire were also revised. (See SR letter 03-1.) including pricing information, are available from Publications Fulfillment, Mail Stop 127, Board of 4. The Board's October 31, 2002, Approval of an Governors of the Federal Reserve System, Washing- Amendment to Regulation A. This revised rule (effective ton, DC 20551 (or charge by facsimile: 202-728- January 9, 2003) sets forth the Federal Reserve's primary 5886). The Manual is also available on the Board's and secondary credit programs, which replace the adjustment and extended credit programs. The seasonal credit public web site at www.federalreserve.gov/ program is essentially unchanged. boarddocs/supmanual/. 5. The Board's November 22, 2002, Approval of Regulation W. Regulation W (effective April 1, 2003) applies to transactions with affiliates under the statutory provisions of PUBLICATION OF THE JUNE 2003 UPDATE sections 23A and 23B of the Federal Reserve Act. The rule TO THE BANK HOLDING COMPANY facilitates compliance with these statutes, provides new SUPERVISION MANUAL exemptions, and combines the statutory restrictions on transactions between a member and its affiliates that were The June 2003 update to the Bank Holding Company found within the previously issued Board interpretations and exemptions. (See SR letter 03-2.) Supervision Manual, Supplement No. 24, has been published and is now available. The Manual com- 6. Examiner Guidance on the Review of Regulatory prises the Federal Reserve System's regulatory, Reports, Considering the Provisions of the Securities and supervisory, and inspection guidance for bank hold- Exchange Act of 1934 (as amended by the Sarbanes-Oxley ing companies. The new supplement includes the Act of2002). The Board was given the authority to adminfollowing subjects: ister and enforce certain provisions of the 1934 Act and the Sarbanes-Oxley Act with respect to state member banks that have a class of securities registered under section 12(b) 1. Interagency Policy Statement on the Internal Audit or 12(g) of the 1934 Act (registered state member banks). Function and its Outsourcing. This 2003 policy statement Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

382 Federal Reserve Bulletin • August 2003 incorporates recent developments in internal auditing and (TPA), on behalf of an insurance company, is an activity addresses supervisory concerns, policies, practices, and that is permissible for an FHC under the BHC Act. A TPA procedures pertaining to the internal audit function and its provides one or more insurance companies with certain outsourcing. Supervisory guidance is provided on the inde- administrative and related services that support and assist pendence of accountants who provide institutions with in the sale of insurance products by the insurance company. both internal and external audit services. The policy state- The Board's General Counsel issued a July 10, 2002, ment supersedes a 1997 statement. opinion that opined that an FHC, under section 4(k)(4)(B) Provisions of the 2002 Sarbanes-Oxley Act and asso- of the BHC Act, could provide as a third-party administraciated SEC rules are also addressed within the 2003 policy tor certain listed services to a third-party insurance comstatement. Banking institutions that are subject to sec- pany in connection with the sale and underwriting of tion 36 of the Federal Deposit Insurance Act—essentially insurance products. those with $500 million or more in assets—should comply c. Providing Flood Zone Determination Services. On with the Sarbanes-Oxley Act prohibition on internal audit July 9, 2002, the Board's Legal Division issued an opinion outsourcing to an external auditor. In addition to FDIC- on the planned provision of flood zone determination serinsured depository institutions, the policy statement applies vices by a BHC's proposed majority-owned joint venture to U.S. financial holding companies (FHCs), bank holding company. The company would provide mortgage lenders companies (BHCs), and the U.S. operations of foreign with ongoing flood-zone tracking services in connection banking organizations. The inspection objectives and with making mortgage loans. The flood determination serinspection procedures have been updated to reflect the vices would be offered as a separate service in connection revised policy statement. (See SR letters 03-5 and 02-20.) with providing real estate appraisals. Board staff confirmed The Sarbanes-Oxley Act also governs extensions of that providing such flood zone determination services is an credit to BHC officials. Insider lending restrictions are essential part of mortgage lending and within the scope of imposed on public companies. Except for a few exemp- permissible activities related to extending credit under tions, the act prohibits a publicly owned BHC (public section 225.28(b)(2) of Regulation Y. BHC) and its subsidiaries from extending credit, or arrang- d. Combined-Balance Discount. On November 26, ing for another entity to extend credit, in the form of a 2002, the Board's General Counsel issued an opinion for personal loan to any director or executive officer of the effecting combined-balance discounts. The General Counpublic BHC. sel opined that members of a household or family, taken together, may be considered a "customer" for the purposes 2. A February 7, 2003, Board Interpretation of Regula- of the combined-balance discount safe harbor, as found in tion K for International Banking Organizations. Effective section 225.7(b) of Regulation Y. The Board's General February 19, 2003, the interpretation applies to the under- Counsel determined that the term "customer," as used in writing by foreign banks of securities to be distributed in that section, may include separate individuals (1) who are the United States. The interpretation clarifies that a foreign all members of the same "immediate family" (as defined bank that wishes to engage in such activity must either be in section 225.41(b)(3) of Regulation Y) and (2) who a financial holding company (FHC) or have authority to reside at the same address. A combined-balance discount engage in underwriting activity under section 4(c)(8) of the program cannot be operated in an anti-competitive manner. BHC Act. A foreign bank's underwriting of securities to be distributed in the United States is considered an activity A more detailed summary of changes is included conducted in the United States, regardless of the location at with the update package. The Manual and updates, which the underwriting risk is assumed and the underwritincluding pricing information, are available from ing fees are booked. Publications Fulfillment, Mail Stop 127, Board of Governors of the Federal Reserve System, Washing- 3. The Board's January 6, 2003, Revision to Subpart D ton, DC 20551 (or charge by facsimile: 202-728of Regulation K, Sections 211.41-43. The definition, detailed components, and computation of the allocated 5886). The Manual is also available on the Board's transfer-risk reserve (ATRR) are discussed, as stated in the public web site at www.federalreserve.gov/ rule (effective February 10, 2003). The rule also provides boarddocs/supmanual/. that international loan fees are to be accounted for in accordance with GAAP. 4. Board Staff Legal Opinions PUBLICATION OF SPANISH-LANGUAGE a. Providing Insurance Claims Administration and CONSUMER BROCHURES Insurance Risk Management Services. The Board's General Counsel issued a July 10, 2002, opinion that an insur- The Federal Reserve Board on July 1, 2003, ance agency that is owned by an FHC may engage, under announced the publication of Spanish-language versection 4(k)(4)(B) of the BHC Act, in certain cited insurance claims administration activities and insurance risk- sions of two popular consumer brochures, in both management services when they are conducted by an insur- print and electronic formats. ance agent or broker in connection with its other insurance Guia para el consumidor sobre hipotecas a tasa sales. ajustable (ARM) (Consumer Handbook on Adjustb. Acting as a Third-Party Administrator on Behalf of able Rate Mortgages) provides an overview of an Insurance Company. A BHC that elected to become an FHC asked whether acting as a third-party administrator adjustable-rate mortgages (ARMs) and how they Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 383 work. The guide describes features, such as interest and between Southern Commercial Bank, St. Louis, rate and payment caps, that consumers should look Missouri, and the Federal Reserve Bank of St. Louis. for when shopping for an ARM. It also contains a glossary of pertinent terms and a checklist to help The Federal Reserve Board on June 24, 2003, consumers shop and compare mortgage offers. Con- announced the issuance of a Consent Order of sumers applying for an adjustable-rate mortgage Assessment of a Civil Money Penalty against the should receive a copy of the guide from their lenders. Centennial Bank of the West, Fort Collins, Colorado, Lo que usted deberia saber sobre las lineas de a state member bank. Centennial Bank of the West, credito con garantia hipotecaria (What You Should without admitting to any allegations, consented to the Know about Home Equity Lines of Credit) explains issuance of the order in connection with its alleged how a home equity line of credit differs from a more violations of the Board's regulations implementing traditional home equity loan. The guide contains the National Flood Insurance Act. information to help consumers compare interest rates The order requires Centennial Bank of the West to and plan features, and addresses the costs of main- pay a civil money penalty of $3,000, which will be taining the line of credit and repayment options. A remitted to the Federal Emergency Management glossary and shopping checklist are also included. Agency for deposit into the National Flood Mitiga- Consumers applying for a home equity line of credit tion Fund. should receive a copy of this information from their lenders. The Federal Reserve Board on June 24, 2003, Guia para el consumidor sobre hipotecas a announced the issuance of a Consent Order of tasa ajustable (ARM) is available on the Board's Assessment of a Civil Money Penalty against the web site at www.federalreserve.gov/pubs/arms/ Community First Bank & Trust, Celina, Ohio, a state arms_spanish.htm. Lo que usted deberia saber sobre member bank. las lineas de credito con garantia hipotecaria Community First Bank & Trust, without admitting can be found on the Board's web site at to any allegations, consented to the issuance of the www.federalreserve.gov/pubs/equity/ order in connection with its alleged violations of the equity_spanish.htm. Board's regulations implementing the National Flood Print copies of both publications may be ordered Insurance Act. from Publications Fulfillment, Mail Stop 127, Wash- The order requires Community First Bank & Trust ington, DC 20551 (202-452-3245). The first 100 cop- to pay a civil money penalty of $5,500, which will be ies are free of charge. remitted to the Federal Emergency Management Agency for deposit into the National Flood Mitigation Fund. DISCONTINUANCE OF STATISTICAL TABLE 3.20 Publication of table 3.20, "Banks' Own Claims on STAFF CHANGES Unaffiliated Foreigners," in the statistical appendix of the Federal Reserve Bulletin was discontinued as The Board of Governors has approved the promotion of the July 2003 issue. The table was discontinued of James A. Clouse to Deputy Associate Director, because the data, as published by maturity, are no and the appointments of Cheryl L. Edwards to Assislonger available. tant Director and Athanasios Orphanides to Adviser in the Division of Monetary Affairs. James A. Clouse will continue to have oversight MINUTES OF BOARD DISCOUNT RATE responsibility for the Money and Financial Market MEETINGS Analysis Section, including its work on systemic risk monitoring, the functioning of financial markets, and The Federal Reserve Board on July 3, 2003, released discount window policies. In addition, Mr. Clouse the minutes of its discount rate meetings from will take a more active role in the management of the March 31 to May 5, 2003. division. Cheryl L. Edwards will be responsible for the ENFORCEMENT ACTIONS System's Statistics and Reserves application (STAR), the function that coordinates the uniform implemen- The Federal Reserve Board on June 16, 2003, tation and reporting of reserve requirements throughannounced the execution of a written agreement by out the System. Ms. Edwards joined the Federal Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

384 Federal Reserve Bulletin • August 2003 Reserve Bank of New York in 1987 as an economist Bank budgets. Ms. LaChapelle joined the Board in in the Research Department. From 1988 through 1977 as a statistical clerk in the then Division of Data 1992, she was an economist and then senior econo- Processing. She resigned from the Board staff in mist in the Open Market Group. She joined the 1979 to pursue her bachelors in business administra- Board's staff in 1993 as an economist in the Mone- tion from George Mason University, which she tary and Reserve Analysis Section. Ms. Edwards received in 1983. She returned to the Board in 1983 holds a Ph.D. in economics from the University of and has had positions of increasing responsibility in Michigan. RBOPS' Information Systems and Reserve Bank Athanasios Orphanides will take an active role in Planning and Control sections. She became manager recruiting professional staff, participating in prepar- of the Reserve Bank Planning and Control Section in ing material for FOMC meetings and shaping the 1999. Ms. LaChapelle is a two-time recipient of the division's research agenda. Mr. Orphanides joined Board's Special Achievement Award for exemplary the Board in 1990 as an economist in the Monetary performance. Studies Section and was promoted to senior econo- Lisa Hoskins will oversee the division's Adminismist in 1996. In recent years, he has focused his work tration and Information Systems functions. Ms. Hoskon monetary policy issues, and his papers relying on ins began working in the System in 1985, as a manreal-time data have had an important influence on the agement intern with the New Orleans Branch of the economic profession's thinking about the conduct of Federal Reserve Bank of Atlanta. She joined the monetary policy in the 1970s. Mr. Orphanides holds a Board in 1988 as a financial services analyst in Ph.D. in economics from the Massachusetts Institute RBOPS. Over the years, she has had positions of of Technology. increasing responsibility in the Fiscal Agency and Wholesale Payments sections. Since May 1998, The Board of Governors has approved the follow- Ms. Hoskins has served as Assistant to the Director, ing changes of assignments in the Office of Board with responsibility for the division's administrative Members and the Office of the Staff Director for function and various special projects. During this Management (OSDM), effective June 29, 2003. time she also has served as Co-Secretariat to the Lynn Fox will become Senior Adviser in the Office Committee on Employee Benefits. Ms. Hoskins of the Staff Director. She will work on a part-time received a bachelor's degree and master's degree basis for OSDM and the Management Division. in management from Loyola University in Michelle A. Smith, Assistant to the Board, will New Orleans. assume the role of Acting Division Director for the Office of Board Members. She will continue in her William R. Jones, Director of the Management role as head of the Public Affairs Office. Division, retired on Friday, August 1, 2003, after thirty years of service to the Board. The Division of Reserve Bank Operations and Payment Systems announced the appointments of John H. Lopez, Special Assistant to the Board in Dorothy B. LaChapelle and Lisa Hoskins to Assistant the Office of Board Members, retired on Friday, Director. August 1, 2003, after four and one-half years of Dorothy B. LaChapelle will lead the division pro- service to the Board and more than thirty-four years grams responsible for overseeing Reserve Bank of government service. • financial and cost accounting functions and Reserve Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

385 Legal Developments FINAL RULE—AMENDMENT TO REGULATION Y asset, or group of assets, other than a bank-ineligible security,1 if: The Board of Governors of the Federal Reserve System (the Board) is amending 12 C.F.R. Part 225, its Regula- (1) A state member bank is authorized tion Y (Bank Holding Companies and Change in Bank to invest in the asset underlying the Control). The amendment would permit bank holding com- contract; panies to (i) take and make delivery of title to commodi- (2) The contract requires cash settlement; ties underlying commodity derivative contracts on an (3) The contract allows for assignment, instantaneous, pass-through basis; and (ii) enter into cer- termination, or offset prior to delivery tain commodity derivative contracts that do not require or expiration, and the company— cash settlement or specifically provide for assignment, (i) makes every reasonable effort to termination, or offset prior to delivery. avoid taking or making delivery of the asset underlying the contract; or Effective August 1, 2003, 12 C.F.R. Part 225 is amended as follows: (ii) receives and instantaneously transfers title to the underlying asset, by operation of contract Part 225—Bank Holding Companies and Change in and without taking or making Bank Control (Regulation Y) physical delivery of the asset; or (4) The contract does not allow for 1. The authority citation for Part 225 continues to read as assignment, termination, or offset follows: prior to delivery or expiration and is based on an asset for which futures Authority: 12 U.S.C. 1817(j)(13), 1818, 1828(o), 1831i, contracts or options on futures con- 1831p-l, 1843(c)(8), 1843(k), 1844(b), tracts have been approved for trad- 1972(1), 3106, 3108, 3310, 3331-3351, 3907, ing on a U.S. contract market by the and 3909. Commodity Futures Trading Commission, and the company— (i) makes every reasonable effort to 2. Section 225.28 is amended by revising paraavoid taking or making delivery graph (b)(8)(ii)(B) to read as follows: of the asset underlying the contract; or Section 225.28—List of permissible nonbanking (ii) receives and instantaneously activities transfers title to the underlying asset, by operation of contract and without taking or making physical delivery of the asset. (b) (8) (ii) (B) Forward contracts, options, futures, options on futures, swaps, and similar contracts, whether traded on exchanges or not, based on any rate, price, financial asset (including gold, silver, platinum, 1. A bank-ineligible security is any security that a state member palladium, copper, or any other metal bank is not permitted to underwrite or deal in under 12 U.S.C. 24 and approved by the Board), nonfinancial 335. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

386 Federal Reserve Bulletin • August 2003 ORDERS ISSUED UNDER BANK HOLDING Port operates one subsidiary depository institution in COMPANY ACT Massachusetts that controls $1.1 billion in deposits, representing less than 1 percent of total U.S. insured deposits. Orders Issued Under Section 3 of the Bank On consummation of this proposal, Citizens, with total Holding Company Act consolidated assets of $68.5 billion, would remain the 20th largest commercial banking organization in the United The Royal Bank of Scotland Group pic States, controlling deposits of $46.8 billion.5 Edinburgh, Scotland Interstate Analysis The Royal Bank of Scotland pic Edinburgh, Scotland Section 3(d) of the BHC Act allows the Board to approve an application by a bank holding company to acquire RBSG International Holdings Ltd. control of a bank holding company or bank located in a Edinburgh, Scotland state other than the home state of the applicant if certain conditions are met. The Board may not approve a proposal Citizens Financial Group, Inc. subject to section 3(d) if, after consummation, the appli- Providence, Rhode Island cant would control more than 10 percent of total U.S. insured deposits.6 In addition, the Board may not approve a Order Approving the Acquisition of Bank Holding proposal if, after consummation, the applicant would con- Companies trol 30 percent or more of the total deposits in insured depository institutions in any state in which both the appli- The Royal Bank of Scotland Group pic ("RBS Group"), cant and the organization to be acquired operate insured The Royal Bank of Scotland pic ("RBS"), RBSG Inter- depository institutions, or such higher or lower percentage national Holdings Ltd., and Citizens Financial Group, Inc. as established by state law.7 ("Citizens") (collectively, "Applicants") have requested For purposes of the BHC Act, the home state of Citizens the Board's approval under section 3 of the Bank Holding is Rhode Island and the home state of Port and Cambridge Company Act ("BHC Act") (12 U.S.C. § 1842) to acquire is Massachusetts. Based on a review of all the facts of all the voting shares of Port Financial Corp., Brighton, record, including a review of relevant state statutes, the Massachusetts ("Port"), and thereby indirectly acquire Board finds that all conditions for an interstate acquisition Cambridgeport Bank; and up to 9.9 percent of Cambridge enumerated in section 3(d) are met in this case.8 In light of Bancorp ("Cambridge"), which controls Cambridge Trust all the facts of record, the Board is permitted to approve Company, all in Cambridge, Massachusetts.1 the proposal under section 3(d) of the BHC Act. Notice of the proposal, affording interested persons an opportunity to submit comments, has been published Factors Under the Bank Holding Company Act (66 Federal Register 26,297 (2003)). The time for filing comments has expired, and the Board has considered the The BHC Act sets forth the factors that the Board must proposal and all comments received in light of the factors consider when reviewing the formation of bank holding set forth in section 3 of the BHC Act. companies or the acquisition of banks. These factors are RBS Group, with total consolidated assets equivalent to the competitive effects of the proposal in the relevant approximately $663 billion, is the fifth largest banking geographic markets; the convenience and needs of the organization in the world.2 Citizens, with total consoli- community to be served, including the records of perfordated assets of $67 billion, is the 20th largest commercial banking organization in the United States.3 Citizens oper- 5. If the total assets of Cambridge were included in the proposal, ates subsidiary depository institutions in Rhode Island, Citizens would become the 19th largest commercial banking organiza- Massachusetts, Connecticut, New Hampshire, Delaware, tion in the United States, with total consolidated assets of $69.2 biland Pennsylvania that control approximately $45.7 billion lion, controlling deposits of $47.3 billion, representing approximately in deposits, representing approximately 1 percent of total 1 percent of total U.S. insured deposits. 6. 12 U.S.C. 1842(d)(2)(A). deposits in insured depository institutions in the United 7. 12 U.S.C. 1842(d)(2)(B)-(D). States ("total U.S. insured deposits").4 8. Massachusetts imposes a deposit cap of 30 percent and a minimum age requirement of three years. See Mass. Gen. Laws ch. 167, §39B (2003). Citizens would control less than 30 percent of total 1. Port controls Brighton Investment Corporation, Brighton, Mas- deposits held by insured depository institutions in Massachusetts, the sachusetts ("Brighton"), which owns 7.16 percent of the voting only state in which Citizens, Port, and Cambridge all operate banks. securities of Cambridge. As part of the proposed transaction, the Citizens is adequately capitalized and adequately managed, as defined shares of Cambridge currently held by Brighton would be transferred by applicable law. In addition, the subsidiary banks of Port and to Citizens, and Brighton would cease to exist. Cambridge have been in existence for the minimum age requirements 2. Foreign asset and ranking data are as of December 31, 2002. established by applicable state law. See 12 U.S.C. §§ 1842(d)(1)(A) 3. Asset and domestic ranking data are as of March 31, 2003. and (B), 1842(d)(2)(A) and (B). Applicants meet the capital and 4. Deposit data are as of June 30, 2002, unless otherwise noted. managerial requirements established under applicable law. Finally, Insured depository institutions include all insured banks, savings Applicants would control less than 10 percent of total U.S. insured banks, and savings associations. deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 387 mance of the insured depository institutions involved in banking resources in any relevant banking market, and that the transaction under the Community Reinvestment Act competitive considerations are consistent with approval.14 ("CRA");9 the financial and managerial resources and future prospects of the companies and banks involved in Convenience and Needs Considerations the proposal; the availability of information to determine and enforce compliance with the BHC Act and other In acting on a proposal under section 3 of the BHC Act, the applicable federal banking laws; and, in the case of appli- Board is required to consider its effects on the convenience cations involving a foreign bank such as RBS, whether the and needs of the communities to be served and to take into foreign bank is subject to comprehensive supervision and account the records of the relevant insured depository regulation on a consolidated basis by its home country institutions under the CRA. The CRA requires the federal supervisor.10 financial supervisory agencies to encourage financial insti- The Board has considered these factors in light of a tutions to help meet the credit needs of local communities record that includes information provided by Applicants, in which they operate, consistent with safe and sound confidential supervisory and examination information, pub- operation, and requires the appropriate federal financial licly reported financial and other information, and public supervisory agency to take into account an institution's comments submitted on the proposal. The Board also has record of meeting the credit needs of its entire community, consulted with and considered information provided by the including low- and moderate-income ("LMI") neighborprimary home country supervisor of RBS Group and vari- hoods, in evaluating bank expansionary proposals. The ous federal and state supervisory agencies, including the Board has carefully considered the convenience and needs Federal Deposit Insurance Corporation ("FDIC") and the factor and the CRA performance records of the subsidiary Massachusetts Division of Banks. depository institutions of Citizens, Port, and Cambridge in light of all the facts of record, including public comments on the effect the proposal would have on the communities Competitive Considerations to be served by the institutions resulting from this proposal. Section 3 of the BHC Act prohibits the Board from approv- A commenter opposing the proposal has alleged, based ing a proposal that would result in a monopoly or be in on data submitted under the Home Mortgage Disclosure furtherance of a monopoly. The BHC Act also prohibits the Act ("HMDA"),15 that Citizens has engaged in disparate Board from approving a proposal that would substantially treatment of minority individuals in its assessment areas lessen competition in any relevant banking market unless with respect to home mortgage lending. This commenter the anticompetitive effects of the proposal in that banking also objected to Applicants' past branch closings and the market are clearly outweighed in the public interest by the lack of specificity in these applications on possible branch probable effects of the proposal in meeting the conve- closings. Finally, the commenter expressed concern about nience and needs of the community to be served.11 Citizens' record of lending to small businesses. The subsidiary depository institutions of Citizens and Port currently compete in the Boston, Massachusetts, bank- A. Record of Performance under CRA ing market ("Boston banking market").12 Consummation of the proposal would be consistent with the Department of As provided in the CRA, the Board has evaluated the Justice Merger Guidelines ("DOJ Guidelines").13 Based convenience and needs factor in light of examinations on all the facts of record, the Board concludes that consum- by the appropriate federal supervisors of the CRA permation of the proposal would not have a significantly formance records of the relevant insured depository adverse effect on competition or on the concentration of institutions. An institution's most recent CRA performance evaluation is a particularly important consideration in the applications process because it represents a detailed, on-site evaluation of the institution's overall record of performance under the CRA by its appropriate federal 9. 12U.S.C. §2901 etseq. 10. See 12 U.S.C. § 1842(c). supervisor.16 11. See 12 U.S.C. § 1842(c)(1). 12. The Boston banking market is defined as the Boston Ranally Metropolitan Area and the town of Lyndeboro in Hillsborough 14. On consummation of the proposal, Citizens would remain the County, New Hampshire. third largest depository institution in the Boston banking market, 13. Under the DOJ Guidelines, 49 Federal Register 26,823 (1984), controlling deposits of $15.2 billion, representing approximately a market in which the post-merger Herfindahl-Hirschman Index 15 percent of total deposits in insured depository institutions in this ("HHI") is between 1000 and 1800 is considered to be moderately market. The HHI would increase 15 points to 1470. These data are concentrated. The Department of Justice has informed the Board that a based on calculations in which the deposits of thrift institutions are bank merger or acquisition generally will not be challenged (in the included at 50 percent. The Board previously has indicated that thrift absence of other factors indicating anticompetitive effects) unless institutions have become, or have the potential to become, significant the post-merger HHI is at least 1800 and the merger or acquisition competitors of commercial banks. See Midwest Financial Group, increases the HHI by at least 200 points. The Department of Justice 75 Federal Reserve Bulletin 386 (1989); National City Corporation, has stated that the higher than normal HHI thresholds for screening 70 Federal Reserve Bulletin 743 (1984). bank mergers or acquisitions for anticompetitive effects implicitly 15. 12 U.S.C. §2801 et seq. recognize the competitive effects of limited-purpose lenders and other 16. See Interagency Questions and Answers Regarding Community nondepository financial institutions. Reinvestment, 66 Federal Register 36,620 and 36,639 (2001). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

388 Federal Reserve Bulletin • August 2003 Citizens Bank of Massachusetts, Boston, Massachusetts by the aggregate of lenders in each of the markets ("CBMA"), and most of Citizens' other subsidiary deposi- reviewed.20 tory institutions received "outstanding" ratings at their Importantly, the HMDA data do not indicate that the most recent CRA performance examinations by the FDIC, Citizens Banks have excluded any segment of the populaas of October 12, 1999.17 Cambridgeport Bank received a tion or geographic areas on a prohibited basis. The Board, "satisfactory" rating at its most recent CRA performance nevertheless, is concerned when the record of an institution examination by the FDIC, as of October 16, 2002. Cam- indicates disparities in lending and believes that all banks bridge Trust Company received a "satisfactory" rating at are obligated to ensure that their lending practices are its most recent performance examination by the FDIC, as based on criteria that ensure not only safe and sound of October 29, 2001. In addition, the Board has evaluated lending, but also equal access to credit by creditworthy substantial information submitted by Citizens concern- applicants regardless of their race or income level. The ing the CRA performance of its subsidiary banks ("the Board recognizes, however, that HMDA data alone provide Citizens Banks") since their 1999 performance evalua- an incomplete measure of an institution's lending in its tions and has considered the lending policies, practices, community because these data cover only a few categories and data of Citizens' affiliate, Citizens Mortgage Company of housing-related lending. HMDA data, moreover, pro- ("CMC").18 vide only limited information about covered loans.21 HMDA data, therefore, have limitations that make them an inadequate basis, absent other information, for concluding B. HMDA Data and Fair Lending Record that an institution has not assisted adequately in meeting its community's credit needs or has engaged in illegal lending The Board also has carefully considered Citizens' lending discrimination. record in light of the comments on HMDA data reported by its subsidiaries. Based on 2001 HMDA data, the com- Because of the limitations of HMDA data, the Board has menter alleged that the Citizens Banks disproportionately considered these data carefully in light of other informaexcluded or denied African-American and Hispanic appli- tion, including examination reports that provide an on-site cants for home mortgage loans in various Metropolitan evaluation of compliance by the Citizens Banks with fair Statistical Areas ("MSAs") in Rhode Island, Massachu- lending laws. Examiners found no evidence of prohibited setts, and Connecticut. discrimination or other illegal credit practices at any Applicants note that the commenter has failed to appro- subsidiary depository institution controlled by Citizens. priately reflect the effect of the mortgage lending activities The record also indicates that Citizens has taken a number of CMC. HMDA data for 2001 indicate that CMC origi- of affirmative steps to ensure compliance with fair lending nated almost 90 percent of the conventional home purchase laws. The Citizens Banks have a second-look policy and mortgages attributed to the Citizens Banks by examiners in procedure that employs a two-pronged approach to the their CRA evaluation of these banks. If CMC's mortgage review of credit decisions for compliance with its fair lending is included, the percentage of originations to lending policy. Under this policy, a committee conducts a African Americans, Hispanics, and individuals residing in weekly review of marginal approvals and denials to meaminority census tracts generally exceed or approximate the sure consistency in the application of investor underwriting percentage for the aggregate of lenders in the MSAs cited guidelines, and the quality control department conducts a by the commenter.19 The Board notes that the Citizens quarterly statistically based regression analysis of all appli- Banks' denial disparity ratios reported for African- cations to identify possible instances or indications of American and Hispanic applicants in 2002 were gener- disparate treatment. In addition, Citizens has established a ally lower than, or comparable with, the ratios reported formal fair lending committee and a mandatory, ongoing program in which all employees receive training on compliance with fair lending and other consumer protection laws. The Board also has considered the HMDA data in light 17. Citizens Bank of Rhode Island, Providence, Rhode Island ("CBRI"); Citizens Bank of Connecticut, New London, Connecticut; of the Citizens Banks' overall performance under the CRA, and Citizens Bank of New Hampshire, Manchester, New Hampshire, which demonstrates that these institutions are active in all received "outstanding" ratings at their most recent CRA perfor- helping to meet the credit needs of their entire communimance examinations. Citizens Bank of Pennsylvania, Philadelphia, Pennsylvania ("CBPA"), and Citizens Bank, Wilmington, Delaware ("CBDE"), are de novo banks that have not yet been rated for performance under the CRA. United States Trust Company, Boston, 20. The denial disparity ratio equals the denial rate of a particular Massachusetts, a subsidiary of Citizens, is a limited-purpose trust racial category (e.g., African Americans) divided by the denial rate for company and, therefore, not subject to the CRA. whites. 18. CMC is a subsidiary of CBRI. CMC's HMDA data were 21. The data, for example, do not account for the possibility that an considered in the 1999 evaluation of the lending records of the institution's outreach efforts may attract a larger proportion of margin- Citizens Banks by the FDIC. ally qualified applicants than other institutions attract and do not 19. For purposes of this HMDA analysis, "minority census tracts" provide a basis for an independent assessment of whether an applicant means census tracts with a minority population of 80 percent or more. who was denied credit was, in fact, creditworthy. Credit history The lending data of the aggregate of lenders represent the cumulative problems and excessive debt levels relative to income (reasons most lending for all financial institutions that have reported HMDA data in frequently cited for a credit denial) are not available from HMDA a given market. data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 389 ties.22 The Board believes that, when viewed in light of the business lending efforts and noted that the subject county entire record, the HMDA data indicate that the banks' has only two low-income census tracts, which are both records of performance in helping to serve the credit needs predominantly residential. of their communities are consistent with approval of the The Board notes that CBMA has consistently been the proposal. Small Business Administration's top lender in Massachusetts when ranked by number of loans originated. FDIC C. Branch Closings examiners stated that the percentage of Citizens' small business loans in LMI census tracts in its assessment areas Commenter expressed concern about the possible effect of generally exceeded the percentage of small businesses in branch closings that might result from this proposal. The those census tracts and the small business lending of the Board has carefully considered the comments on potential aggregate of lenders in these markets. FDIC examiners branch closings in light of all the facts of record. also reported that CBMA's lending to businesses with less Citizens has represented that it will follow its existing than $1 million in gross annual revenues exceeded the branch closure policy before closing or consolidating any amount of lending to those businesses by the aggregate of branches acquired as a result of this proposal. Under this lenders in 2000 and 2001. policy, Citizens will review a number of factors before closing or consolidating a branch, including the impact on E. Conclusion on Convenience and Needs the community, the business viability of the branch, the Considerations impact on access to credit, and ensuring that the branch closing has no discriminatory effect. The most recent CRA In reviewing the proposal's effect on the convenience and examinations of Citizens' subsidiary depository institu- needs of the communities to be served by the combined tions indicated satisfactory records of opening and closing organization, the Board has carefully considered the entire branches. record, including the public comments received, reports of The Board also has considered that federal banking law examinations of the CRA performance of the institutions provides a specific mechanism for addressing branch clos- involved, and confidential supervisory information from ings.23 Federal law requires an insured depository institu- the FDIC. The record and examinations show that the tion to provide notice to the public and to the appropriate Citizens Banks have a variety of programs in place that are federal supervisory agency before closing a branch. In designed to meet the credit and banking needs of their addition, the Board notes that the FDIC, as the appropriate communities, including LMI areas.24 Based on all the facts federal supervisor of the Citizens Banks, will continue to of record and for the reasons discussed above, the Board review the branch closing records of the banks in the concludes that considerations relating to the convenience course of conducting CRA performance examinations. and needs factor, including the CRA performance records of the relevant depository institutions, are consistent with D. Small Business Lending approval. Commenter expressed concerns about CBMA's small busi- Financial, Managerial, and Other Supervisory Factors ness lending in one county in the Boston banking market, alleging that CBMA made few small business loans in The BHC Act requires the Board to consider the financial LMI census tracts. Applicants responded that one county and managerial resources and future prospects of the comdoes not provide a complete picture of Citizens' small panies and banks involved in an acquisition.25 In assessing the financial and managerial strength of Applicants and the 22. Commenter also repeated an allegation considered in Appli- banks to be acquired, the Board has reviewed informacants' application to acquire CBPA and CBDE (the "Mellon pro- tion provided by Applicants, confidential supervisory and posal") that Applicants indirectly support predatory lending by a examination information, publicly reported and other finannumber of unaffiliated consumer lenders through the securitization cial information, and public comments.26 In addition, the activities and warehouse lending services of Applicants' subsidiary, Greenwich Capital Markets, Greenwich, Connecticut ("GCM"). Applicants have stated that GCM continues to conduct due diligence 24. These programs include the Soft Second Program offered in reviews in connection with its securitization activities. The Board participation with the Massachusetts Housing Partnership in Boston, carefully considered this comment and Applicants' response to the which allows income-eligible borrowers the opportunity to reduce the comments in light of all the facts of record in approving the Mellon principal amount and monthly payment on their first mortgage, proposal. See The Royal Bank of Scotland Group pic, 88 Federal thereby eliminating the need for private mortgage insurance. CBMA Reserve Bulletin 51 (2002) ("RBS Order"). Commenter has not offers an affordable mortgage program for LMI borrowers through the provided any new information that would warrant a different conclu- Massachusetts Association of Community Organizations for Reform sion in this proposal. Now with below-market rates, liberal qualifying ratios, and low- 23. Section 42 of the Federal Deposit Insurance Act (12 U.S.C. downpayment requirements. CBMA's Appleseed Program also offers § 1831r-l), as implemented by the Joint Policy Statement Regarding mortgage refinancing at fixed rates to senior-citizen homeowners Branch Closings (64 Federal Register 34,844 (1999)), requires that a victimized by mortgage scams. bank provide the public with at least 30 days' notice and the appropri- 25. See 12 U.S.C. § 1842(c)(2). ate federal supervisory agency with at least 90 days' notice before the 26. Commenter also repeated allegations made in connection with date of the proposed branch closing. The bank also is required to the Mellon proposal that Applicants had inadequate records on human provide reasons and other supporting data for the closure, consistent rights and the environment. These assertions were based on actions with the institution's written policy for branch closings. taken outside the United States, and commenter asserted that the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

390 Federal Reserve Bulletin • August 2003 Board consulted relevant supervisory authorities in the home country supervisor of RBS Group is the FSA, which United Kingdom. is responsible for the supervision and regulation of United In evaluating financial factors in expansion proposals by Kingdom financial institutions. banking organizations, the Board consistently has consid- In approving applications under the BHC Act and the ered capital adequacy to be especially important. In addi- International Banking Act (12 U.S.C. §3101 et seq.) tion, the capital ratios of RBS Group on a consolidated ("IBA"), the Board previously has determined that United basis and RBS would continue to exceed the minimum Kingdom banks, including RBS, were subject to home levels that would be required under the Basel Capital country supervision on a consolidated basis.29 In this case, Accord. These ratios are considered equivalent to the the Board finds that the FSA continues to supervise RBS capital ratios that would be required of a U.S. banking in substantially the same manner as it supervised United organization. Kingdom banks at the time of those determinations. Based The Board also has considered the managerial resources on this finding and all the facts of record, the Board of Applicants, including the examination records of Citi- concludes that RBS continues to be subject to comprehenzens and its subsidiary depository institutions by the appro- sive supervision on a consolidated basis by its home counpriate federal financial supervisory agencies.27 In addition, try supervisor. the Board has considered the plans of Applicants to imple- In addition, section 3 of the BHC Act requires the Board ment the proposal, including their available managerial to determine that a foreign bank has provided adequate resources and record of successfully integrating acquisi- assurances that it will make available to the Board such tions into existing operations. After reviewing all the facts information on its operations and activities and those of its of record, the Board concludes that Applicants, includ- affiliates that the Board deems appropriate to determine ing the subsidiary depository institutions of Citizens, have and enforce compliance with the BHC Act.30 The Board adequate managerial resources and appropriate risk- has reviewed the restrictions on disclosure in relevant management systems in place. Based on these and all the jurisdictions in which RBS Group operates and has comfacts of record, the Board concludes that the financial and municated with relevant government authorities concernmanagerial resources and future prospects of Applicants ing access to information. In addition, RBS Group and and their subsidiary banks are consistent with approval. RBS previously have committed to make available to the Section 3 of the BHC Act also provides that the Board Board such information on the operations of RBS Group may not approve an application involving a foreign bank and its affiliates that the Board deems necessary to deterunless the bank is subject to comprehensive consolidated mine and enforce compliance with the BHC Act, the IBA, supervision or regulation on a consolidated basis by the and other applicable federal laws. RBS Group and RBS appropriate authorities in the bank's home country.28 The also previously have committed to cooperate with the Board to obtain any waivers or exemptions that may be activities of RBS Group and its affiliates in Indonesia allegedly necessary to enable RBS Group and its affiliates to make ignored human rights concerns, damaged the environment, or caused such information available to the Board. In light of these other societal harm. The Board noted in the RBS Order that these commitments, the Board concludes that RBS Group and contentions contained no allegations of illegality or of actions that RBS have provided adequate assurances of access to any would affect the safety and soundness of the institutions involved in appropriate information that the Board may request. Based the proposal, and that they were outside the limited statutory factors that the Board is authorized to consider when reviewing an application on these and all the facts of record, the Board concludes under the BHC Act. See Western Bancshares, Inc. v. Board of Gover- that the supervisory factors it is required to consider are nors, 480 F.2d 749 (10th Cir. 1973). consistent with approval. 27. Commenter alleged, without providing any material information, that RBS does not have appropriate anti-money-laundering safeguards in place. The Board has considered this allegation in light Conclusion of supervisory and examination reports on RBS's operations in the United States, consultations with the United Kingdom's Financial Based on the foregoing and in light of all the facts of Services Authority ("FSA"), and confidential information received record, the Board has determined that the applications from the FSA concerning RBS's record of compliance with antimoney-laundering laws. Commenter also reiterated contentions made should be, and hereby are, approved.31 In reaching this in connection with the Mellon proposal, based on press reports, that a CBMA branch might have wired money abroad on behalf of an on a consolidated basis if the Board determines that the bank is organization suspected of funding al-Qaida. The Board previously supervised or regulated in such a manner that its home country considered this allegation in light of consultations with other federal supervisor receives sufficient information on the worldwide operations agencies, confidential information concerning the allegations, Citi- of the bank, including its relationship to any affiliates, to assess the zens' record of compliance with anti-money-laundering laws, regula- bank's overall financial condition and its compliance with law and tions, and government directives related to official sanctions lists. regulation. See 12 C.F.R. 211.24(c)(1). The Board concluded that the Mellon proposal was consistent with 29. See The RBS Order; see also Abbey National Treasury Services approval, and the commenter has presented no new facts that would pic, 87 Federal Reserve Bulletin 750 (2001). support a different conclusion in this proposal. See RBS Order. 30. See 12 U.S.C. § 1842(c)(3)(A). 28. 12 U.S.C. § 1842(c)(3)(B). Under Regulation Y, the Board uses 31. Commenter also requested that the Board hold a public hearing the standards enumerated in Regulation K to determine whether a on the proposal. Section 3 of the BHC Act does not require the Board foreign bank that has applied under section 3 of the BHC Act is to hold a public hearing on an application unless the appropriate subject to consolidated home country supervision. See 12 C.F.R. supervisory authority for any of the banks to be acquired makes a 225.13(a)(4). Regulation K provides that a foreign bank will be timely written recommendation of denial of the application. The considered to be subject to comprehensive supervision or regulation Board has not received such a recommendation from the appropriate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 391 conclusion, the Board has considered all the facts of record ments referred to in this order, and the receipt of all other in light of the factors that it is required to consider under regulatory approvals. These representations, commitments, the BHC Act and other applicable statutes. The Board's and conditions are deemed to be conditions imposed in approval is specifically conditioned on compliance by writing by the Board in connection with its findings and Applicants with all the representations and commitments decision and, as such, may be enforced in proceedings made in connection with the applications, prior commit- under applicable law. The transaction shall not be consummated before the fifteenth calendar day after the effective date of this order, supervisory authority. Under its rules, the Board also may, in its and the proposal may not be consummated later than three discretion, hold a public meeting or hearing on an application to acquire a bank if a meeting or hearing is necessary or appropriate to months after the effective date of this order, unless such clarify factual issues related to the application and to provide an period is extended for good cause by the Board or by the opportunity for testimony. 12 C.F.R. 225.16(e). The Board has consid- Federal Reserve Bank of Boston, acting pursuant to deleered carefully commenter's request in light of all the facts of record. gated authority. In the Board's view, the public has had ample opportunity to submit comments on the proposal, and in fact, commenter has submitted By order of the Board of Governors, effective June 30, written comments that the Board has considered carefully in acting on 2003. the proposal. The commenter's request fails to demonstrate why its written comments do not present its views adequately or why a Voting for this action: Chairman Greenspan, Vice Chairman Fergumeeting or hearing otherwise would be necessary or appropriate. For son, and Governors Gramlich, Bies, Olson, Bernanke, and Kohn. these reasons, and based on all the facts of record, the Board has determined that a public hearing or meeting is not required or warranted in this case. Accordingly, the request for a public hearing on the ROBERT DEV. FRIERSON proposal is denied. Deputy Secretary of the Board APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Applicant(s) Bank(s) Effective Date One Rich Hill Mining, L.L.C., F & M Bancorporation, June 6, 2003 Forth Worth, Texas Tulsa, Oklahoma One Rich Hill Land Ltd. Partnership, The F & M Bank and Trust Company, Forth Worth, Texas Tulsa, Oklahoma 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 AIM Bancshares, Inc., The First National Bank of Littlefield, Dallas June 20, 2003 Levelland, Texas Littlefield, Texas Avest, Inc., Grandview Bancshares, Inc., Dallas June 19, 2003 Cleburne, Texas Grandview, Texas Afin, Ltd., Cleburne, Texas Business Bancshares, Inc., The Business Bank of St. Louis, St. Louis June 19, 2003 Clayton, Missouri Clayton, Missouri CalWest Bancorp, South County Bank, N.A., San Francisco June 13, 2003 Rancho Santa Margarita, California Rancho Santa Margarita, California Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

392 Federal Reserve Bulletin • August 2003 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Central Georgia Banking Company, State Bank of Cochran, Atlanta June 13, 2003 Cochran, Georgia Cochran, Georgia Centra Ventures, Inc., Falcon National Bank, Minneapolis June 13, 2003 St. Cloud, Minnesota Foley, Minnesota Denison Bancshares, Inc. of Holton, Countryside Bank, Kansas City June 9, 2003 Holton, Kansas Meriden, Kansas East Penn Financial Corporation, East Penn Bank, Philadelphia June 2, 2003 Emmaus, Pennsylvania Emmaus, Pennsylvania Eden Financial Corporation, Laguna Bancshares, Inc., Dallas June 4, 2003 San Angelo, Texas Big Lake, Texas Laguna Bancshares of Delaware, Inc., Dover, Delaware Big Lake Bank, National Association, Big Lake, Texas Equity Bancshares, Inc., National Bank of Andover, Kansas City June 11, 2003 Wichita, Kansas Andover, Kansas First Crockett Bancshares, Inc., First National Bank of Crockett, Dallas June 11,2003 Crockett, Texas Crockett, Texas Crockett Delaware Bancshares, Inc., Wilmington, Delaware Gemini Bancshares, Inc., Integrity Bank & Trust, Kansas City May 30, 2003 Monument, Colorado Monument, Colorado Guaranty Federal Bancshares, Inc., Guaranty Federal Savings Bank, St. Louis June 11, 2003 Springfield, Missouri Springfield, Missouri In wood Bancshares, Inc., WB&T Bancshares, Inc., Dallas June 19, 2003 Dallas, Texas Duncanville, Texas Inwood Delaware, Inc., WB&T Delaware, Inc., Dover, Delaware New Castle, Delaware Western Bank and Trust, Duncanville, Texas JDOB, Inc., First National Bank of Hinckley, Minneapolis June 25, 2003 Sandstone, Minnesota Hinckley, Minnesota Liberty Bancshares, Inc., First Federal Capital Corporation, Minneapolis June 9, 2003 St. Paul, Minnesota La Crosse, Wisconsin Liberty State Bank, First Federal Capital Bank, St. Paul, Minnesota La Crosse, Wisconsin Mercantile Bancorp, Inc., New Frontier Bancshares, Inc., St. Louis June 6, 2003 Quincy, Illinois St. Charles, Missouri MNB Holdings Corporation, Mission National Bank, San Francisco June 24, 2003 San Francisco, California San Francisco, California Miinchener Ruckversicherungs- Commerzbank Aktiengesellschaft, New York June 9, 2003 Gesellschaft Aktiengesellschaft, Frankfurt, Germany Munich, Germany South Shore Mutual Holding South Shore Co-operative Bank, Boston June 23, 2003 Company, Weymouth, Massachusetts Weymouth, Massachusetts South Texas Bancorp, Inc., Kingsville State Bancshares, Inc., Dallas June 6, 2003 Hebbronville, Texas Kingsville, Texas Steele Street Bank Corporation, Steele Street State Bank, Kansas City June 18, 2003 Denver, Colorado Denver, Colorado Tidelands Bancshares, Inc., Tidelands Bank, Richmond June 11,2003 Mt. Pleasant, South Carolina Mt. Pleasant, South Carolina Union Financial Bancshares, Inc., Provident Community Bank, Richmond June 25, 2003 Union, South Carolina National Association, Union, South Carolina Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 393 Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Bank One Corporation, To expand its aggregate investment Chicago June 20, 2003 Chicago, Illinois in community welfare and development activities Commerzbank Aktiengesellschaft, Commerzbank Capital Markets New York June 6, 2003 Frankfurt, Germany Corporation, New York, New York FNB Corporation, Bedford Bancshares, Inc., Richmond June 23, 2003 Christiansburg, Virginia Bedford, Virginia Heartland Financial USA, Inc., HTLF Capital Corp., Chicago June 11, 2003 Dubuque, Iowa Dubuque, Iowa Inwood Bancshares, Inc., Inwood Asset Management, Inc., Dallas June 13, 2003 Dallas, Texas Dallas, Texas Inwood Delaware, Dover, Delaware Northview Financial Corporation, Northview Mortgage, LLC., Chicago June 18, 2003 Northfield, Illinois Northfield, Illinois Shorebank Corporation, To conduct the following activities: Chicago June 20, 2003 Chicago, Illinois (1) financial and investment advisory activities; (2) private placement services; and (3) administrative services Sections 3 and 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Danran Holding Ltd., Signature Bank, New York June 13,2003 Tel Aviv, Israel New York, New York Shamdar Holdings Ltd., Tel Aviv, Israel Elran (D.D.) Investments Ltd., Tel Aviv, Israel Elran (D.D.) Holdings Ltd., Tel Aviv, Israel 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 East Penn Bank, East Penn Interim Bank, Philadelphia June 2, 2003 Emmaus, Pennsylvania Emmaus, Pennsylvania JPMorgan Chase Bank, Citizens Bank of Connecticut, New York, New York New London, Connecticut Citizens Bank of Massachusetts, Citizens Bank of Pennsylvania, New York May 29, 2003 Boston, Massachusetts Philadelphia, Pennsylvania Citizens Bank New Hampshire, Citizens Bank of Rhode Island, Manchester, New Hampshire Providence, Rhode Island Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

394 Federal Reserve Bulletin • August 2003 PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the Community Bank & Trust v. United States, No. 01-571C Federal Reserve Banks in which the Board of Governors is (Ct. Fed. Cl„ filed October 3, 2001). Action challenging not named a party. on constitutional grounds the failure to pay interest on reserve accounts held at Federal Reserve Banks. Tavera v. Von Nothaus, et al., No. 03-763 (D. Oregon, filed Artis v. Greenspan, No. 01-CV-0400 (EGS) (D.D.C., com- June 5, 2003). Civil rights action for violation of rights plaint filed February 22, 2001). Employment discriminain connection with the plaintiffs prosecution for passing tion action. On August 15, 2001, the district court con- "Liberty dollar coins" as lawful money. solidated the action with Artis v. Greenspan, No. 99-CV- Apffel v. Board of Governors, No. 03-343 (S. D. Texas, 2073 (EGS) (D.D.C., filed August 3, 1999), also an filed May 20, 2003). Freedom of Information Act case. employment discrimination action. Albrecht v. Board of Governors, No. 02-5325 (D.C. Cir., Fraternal Order of Police v. Board of Governors, filed October 18, 2002). Appeal of district court order No. 1:98CV03116 (WBB)(D.D.C„ filed December 22, dismissing challenge to the method of funding of the 1998). Declaratory judgment action challenging Board retirement plan for certain Board employees. regulation on labor-management relations at Reserve 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 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 A22 Commercial paper outstanding A22 Prime rate charged by banks on short-term Selected Measures business loans A23 Interest rates—Money and capital markets A40 Output, capacity, and capacity utilization A24 Stock market—Selected statistics A42 Industrial production—Indexes and gross value Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

50 Federal Reserve Bulletin • August 2003 INTERNATIONAL STATISTICS Securities Holdings and Transactions A54 Foreign transactions in securities Summary Statistics A55 Marketable U.S. Treasury bonds and A44 U.S. international transactions notes—Foreign transactions A45 U.S. reserve assets A45 Foreign official assets held at Federal Reserve Interest and Exchange Rates Banks A56 Foreign exchange rates A46 Selected U.S. liabilities to foreign official institutions A57 GUIDE TO SPECIAL TABLES AND STATISTICAL RELEASES Reported by Banks in the United States A46 Liabilities to, and claims on, foreigners SPECIAL TABLES A47 Liabilities to foreigners A49 Banks' own claims on foreigners A58 Assets and liabilities of commercial banks, A50 Banks' own and domestic customers' claims on March 31, 2003 foreigners A60 Terms of lending at commercial banks, A51 Banks' own claims on unaffiliated foreigners May 2003 A66 Assets and liabilities of U.S. branches and Reported by Nonbanking Business agencies of foreign banks, March 31, 2003 Enterprises in the United States A52 Liabilities to unaffiliated foreigners A70 INDEX TO STATISTICAL TABLES A53 Claims on unaffiliated foreigners Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A3 Guide to Tables SYMBOLS AND ABBREVIATIONS c Corrected G-10 Group of Ten e Estimated GDP Gross domestic product n.a. Not available GNMA Government National Mortgage Association n.e.c. Not elsewhere classified GSE Government-sponsored enterprise P Preliminary HUD Department of Housing and Urban r Revised (Notation appears in column heading Development when about half the figures in the column have IMF International Monetary Fund been revised from the most recently published IOs Interest only, stripped, mortgage-backed securities table.) IPCs Individuals, partnerships, and corporations * Amount insignificant in terms of the last decimal IRA Individual retirement account place shown in the table (for example, less than MMDA Money market deposit account 500,000 when the smallest unit given 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 • August 2003 1.10 RESERVES AND MONEY STOCK MEASURES Percent annual rate of change, seasonally adjusted1 2002 2003 2003 MMoonneettaarryy oorr ccrreeddiitt aaggggrreeggaattee Q2' Q3r Q4< Qir Jan.r Feb.r Mar.r Apr/ May Reserves of depository institutions2 1 Total -13.5 -2.2 1.0 11.3 15.3 2.6 4.5 -4.9 5.3 2 Required -12.4 -4.9 -1.4 11.4 25.6 -5.2 14.9 -1.9 2.9 3 Nonborrowed -14.0 -3.7 1.9 12.8 16.9 2.7 4.6 -5.1 4.5 4 Monetary base3 7.4 6.9 5.1 7.6 6.7 9.8 6.7 5.3 5.0 Concepts of money4 5 Ml -.6 3.0 4.9 7.4 2.4 20.1 3.2 .3 20.3 6 M2 3.8 8.8 7.0 6.5 6.1 11.3 2.8 4.7 17.6 7 M3 4.0 7.2 7.7 5.1 -.5 5.7 2.9 1.8 13.1 Nontransaction components 8 In M25 5.0 10.4 7.6 6.3 7.1 8.9 2.7 5.8 16.8 9 In M3 only6 4.4 3.8 9.2 2.1 -14.4 -6.2 3.0 -4.6 3.2 Time and savings deposits Commercial banks 10 Savings, including MMDAs 15.1 20.1 16.8 13.6 18.8 16.0 4.3 17.7 23.4 11 Small time7 -5.8 -4.0 -7.3 -7.2 -7.1 -7.6 -6.8 -9.3 -11.2 12 Large time8-9 12.1 2.0 -5.6 -4.3 14.4 -3.7 9.7 2.6 22.1 Thrift institutions 13 Savings, including MMDAs 24.3 20.5 20.0 21.9 20.8 26.9 19.4 18.9 40.2 14 Small time7 -16.6 -10.5 -6.0 -6.5 -6.4 -10.0 -6.0 -4.9 -9.8 15 Large time8 -8.0 -2.6 11.9 8.9 12.3 .0 -8.1 2.0 -10.2 Money market mutual funds 16 Retail -11.4 .9 -6.3 -8.8 -15.9 -4.6 -5.5 -19.7 7.7 17 Institution-only 3.9 -.7 2.1 -4.9 -35.0 -19.8 -13.1 -22.4 -20.1 Repurchase agreements and eurodollars 18 Repurchase agreements10 -.7 27.5 45.7 29.8 -22.9 36.4 44.6 18.5 12.7 19 Eurodollars10 -1.8 -3.5 28.9 .8 15.3 -31.2 -16.0 11.9 50.4 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 (I) large-denomination time deposits (in amounts of $100,000 or more), (2) tory changes in reserve requirements (See also table 1.20.) balances in institutional money funds, (3) RP liabilities (overnight and term) issued by all 3. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally depository institutions, and (4) eurodollars (overnight and term) held by U.S. residents at adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency foreign branches of U.S. banks worldwide and at all banking offices in the United Kingdom component of the money stock, plus (3) (for all quarterly reporters on the "Report of and Canada. Excludes amounts held by depository institutions, the U.S. government, money Transaction Accounts, Other Deposits and Vault Cash" and for all weekly reporters whose market funds, and foreign banks and official institutions. Seasonally adjusted M3 is calculated vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference by summing large time deposits, institutional money fund balances, RP liabilities, and between current vault cash and the amount applied to satisfy current reserve requirements. eurodollars, each seasonally adjusted separately, and adding this result to seasonally adjusted 4. Composition of the money stock measures is as follows: M2. Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of 5. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all money fund balances, each seasonally adjusted separately. commercial banks other than those owed to depository institutions, the U.S. government, and 6. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities foreign banks and official institutions, less cash items in the process of collection and Federal (overnight and term) issued by depository institutions, and (4) eurodollars (overnight and Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of term) of U.S. addressees, each seasonally adjusted separately. withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, 7. Small time deposits—including retail RPs—are those issued in amounts of less than credit union share draft accounts, and demand deposits at thrift institutions. Seasonally $100,000. All IRA and Keogh account balances at commercial banks and thrift institutions adjusted Ml is computed by summing currency, travelers checks, demand deposits, and are subtracted from small time deposits. OCDs, each seasonally adjusted separately. 8. Large time deposits are those issued in amounts of $100,000 or more, excluding those M2: Ml plus (1) savings (including MMDAs), (2) small-denomination time deposits (time booked at international banking facilities. deposits—including retail RPs—in amounts of less than $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 Factor 2003 2003 Mar. Apr. May Apr. 16 Apr. 23 Apr. 30 May 7 May 14 May 21 May 28 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 701,365 710,451 714,217 711,288 709,715 715,874 708,240 714,344 711,802 720,472 2 Securities held outright 639,323 645,586 649,309 645,669 646,852 647,057 647,419 647,817 650,403 650,852 3 U.S. Treasury2 639,313 645,576 649,299 645,659 646,842 647,047 647,409 647,807 650,393 650,842 4 Bills3 231,580 235,465 237,126 235,713 235,855 236,035 236,375 236,754 237,390 237,672 a Notes and bonds, nominal3 394,110 395,917 397,882 395,760 396,776 396,776 396,776 396,776 398,707 398,853 6 Notes and bonds, inflation-indexed3 12,353 12,814 12,814 12,814 12,814 12,814 12,814 12,814 12,814 12,814 7 Inflation compensation4 1,270 1,380 1,477 1,371 1,396 1,422 1,443 1,463 1,482 1,502 8 Federal agency3 10 10 10 10 10 10 10 10 10 10 9 Repurchase agreements5 23,356 25,792 26,121 26,821 23,893 28,751 20,537 25,644 24,608 31,857 10 Loans to depository institutions 24 30 57 36 28 30 50 51 56 59 11 Primary credit 17 8 4 16 4 0 4 2 2 2 12 Secondary credit 0 0 0 0 0 0 0 0 0 0 13 Seasonal credit 7 22 53 20 24 29 46 49 54 57 14 Float 595 -115 -350 -285 -405 225 113 -7 -869 -413 15 Other Federal Reserve assets 38,066 39,158 39,080 39,046 39,347 39,811 40,120 40,839 37,603 38,116 16 Gold stock 11,043 11,043 11,043 11,043 11,043 11,043 11,043 11,043 11,043 11,043 17 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 18 Treasury currency outstanding 34,754 34,830 34,892 34,826 34,840 34,854 34,868 34,882 34,896 34,910 ABSORBING RESERVE FUNDS 19 Currency in circulation 683,798 687,334 690,706 687,616 687,514 687,208 688,775 689,679 689,890 693,563 20 Reverse repurchase agreements6 18,755 20,639 21,137 20,745 20,552 20,949 21,325 20,641 20,415 21,598 21 Foreign official and international accounts 18,715 20,564 21,137 20,745 20,552 20,949 21,325 20,641 20,415 21,598 22 Dealers 40 75 0 0 0 0 0 0 0 0 23 Treasury cash holdings 369 356 351 357 360 350 341 343 350 359 24 Deposits with Federal Reserve Banks, other than reserve balances 16,842 19,183 18,232 17,811 20,679 20,129 18,593 18,775 18,563 17,050 25 U.S. Treasury, general account 5,339 7,533 6,678 6,470 8,927 8,763 7,113 7,139 6,899 5,543 26 Foreign official 163 118 122 120 106 132 102 86 116 160 27 Service-related 11,118 11,261 11,178 10,980 11,313 11,008 11,109 11,291 11,280 11,105 28 Required clearing balances 10,601 10,835 10,849 10,820 10,829 10,829 10,882 10,882 10,819 10,820 29 Adjustments to compensate for float 517 426 329 160 484 179 227 409 461 285 30 Other 221 270 254 241 333 225 269 259 266 242 31 Other liabilities and capital 19,732 20,024 20,300 19,941 20,145 20,165 20,331 20,438 20,280 20,281 32 Reserve balances with Federal Reserve Banks7 .... 9,865 10,989 11,626 12,885 8,548 15,170 6,987 12,592 10,443 15,773 End-of-month figures Wednesday figures Mar. Apr. May Apr. 16 Apr. 23 Apr. 30 May 7 May 14 May 21 May 28 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 710,555 724,444 719,092 723,322 710,247 724,444 710,520 720,072 713,790 722,207 2 Securities held outright 641,474 647,281 651,127 646,795 646,901 647,281 647,580 647,947 650,735 650,869 3 U.S. Treasury2 641,464 647,271 651,117 646,785 646,891 647,271 647,570 647,937 650,725 650,859 4 Bills3 232,706 236,249 237,933 235,814 235,895 236,249 236,529 236,877 237,568 237,683 5 Notes and bonds, nominal3 394,621 396,776 398,853 396,776 396,776 396,776 396,776 396,776 398,853 398,853 6 Notes and bonds, inflation-indexed3 12,814 12,814 12,814 12,814 12,814 12,814 12,814 12,814 12,814 12,814 7 Inflation compensation4 1,322 1,431 1,517 1,380 1,406 1,431 1,450 1,470 1,489 1,508 8 Federal agency3 10 10 10 10 10 10 10 10 10 10 9 Repurchase agreements5 31,750 37,501 30,240 38,000 24,500 37,501 22,251 30,752 26,251 32,000 10 Loans to depository institutions 30 35 80 46 30 35 59 60 55 62 11 Primary credit 25 0 15 23 3 0 6 4 1 0 12 Secondary credit 0 0 0 0 0 0 0 0 0 0 13 Seasonal credit 4 35 65 23 27 35 53 56 54 62 14 Float -1,197 -101 -599 -626 -685 -101 154 302 -1,050 1,172 15 Other Federal Reserve assets 38,499 39,728 38,244 39,107 39,500 39,728 40,476 41,011 37,800 38,103 16 Gold stock 11,043 11,043 11,044 11,043 11,043 11,043 11,043 11,043 11,043 11,043 17 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 18 Treasury currency outstanding 34,798 34,854 34,924 34,826 34,840 34,854 34,868 34,882 34,896 34,910 ABSORBING RESERVE FUNDS 19 Currency in circulation 685,791 688,723 692,303 688,924 688,475 688,723 690,743 690,950 691,902 694,786 20 Reverse repurchase agreements6 19,418 20,814 22,285 19,801 19,991 20,814 20,667 21,073 20,709 21,857 21 Foreign official and international accounts 19,418 20,814 22,285 19,801 19,991 20,814 20,667 21,073 20,709 21,857 22 Dealers 0 0 0 0 0 0 0 0 0 0 23 Treasury cash holdings 373 340 375 361 352 340 342 349 356 375 24 Deposits with Federal Reserve Banks, other than reserve balances 18,474 22,135 17,804 20,138 20,937 22,135 17,564 18,876 19,262 16,303 25 U.S. Treasury, general account 6,746 10,583 6,505 8,821 9,285 10,583 6,050 7,199 7,608 4,825 26 Foreign official 254 313 79 101 105 313 145 122 126 129 27 Service-related 11,263 11,008 11,003 10,980 11,313 11,008 11,109 11,291 11,280 11,105 28 Required clearing balances 10,978 10,829 10,833 10,820 10,829 10,829 10,882 10,882 10,819 10,820 29 Adjustments to compensate for float 285 179 170 160 484 179 227 409 461 285 30 Other 211 231 217 236 234 231 259 264 247 243 31 Other liabilities and capital 20,230 20,049 19,973 19,871 19,804 20,049 20,109 20,053 19,968 19,818 32 Reserve balances with Federal Reserve Banks7 .... 14,312 20,479 14,520 22,296 8,770 20,479 9,204 16,895 9,731 17,221 1. Amounts of vault cash held as reserves are shown in table 1.12, line 2. 5. Cash value of agreements, which are fully collateralized by U.S. Treasury and federal 2. Includes securities lent to dealers, which are fully collateralized by other US. Treasury agency securities. securities. 6. Cash value of agreements, which are fully collateralized by U.S. Treasury securities. 3. Face value of the securities. 7. Excludes required clearing balances and adjustments to compensate for float. 4. Compensation that adjusts for the effect of inflation on the original face value of inflation-indexed securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Financial Statistics • August 2003 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 2000 2001 2002 2002 2003 Dec. Dec. Dec.r Nov/ Dec/ Jan/ Feb/ Mar/ Apr/ May 1 Reserve balances with Reserve Banks2 7,022 9,053 9,926 9,758 9,926 10,075 9,860 9,840 10,598 11,405 2 Total vault cash3 45,246' 43,918r 43,368 42,236 43,368 46,209 45,942 43,088 41,991 41,636 3 Applied vault cash4 31,451 32,024 30,347 29,457 30,347 32,794 32,079 30,757 30,574 30,396 4 Surplus vault cash5 13,795r 1 l,894r 13,021 12,780 13,021 13,415 13,863 12,331 11,417 11,241 5 Total reserves6 38,473 41,077 40,274 39,214 40,274 42,869 41,939 40,597 41,172 41,800 6 Required reserves 37,046 39,428 38,264 37,576 38,264 41,162 39,973 38,961 39,640 40,183 7 Excess reserve balances at Reserve Banks7 1,427 1,649 2,009 1,638 2,009 1,707 1,965 1,636 1,532 1,618 8 Total borrowing at Reserve Banks 210 67 80 272 80 27 25 22 29 55 9 Primary 12 21 14 8 3 10 Secondary 0 0 0 0 0 11 Seasonal 111 33 45 60 45 13 5 8 21 53 12 Adjustment 99 34 35 211 35 2 Biweekly averages of daily figures for two-week periods ending on dates indicated 2003 Feb. 5r Feb. 19' Mar. 5r Mar. 19r Apr. 2r Apr. 16 Apr. 30 May 14 May 28 June 11 1 Reserve balances with Reserve Banks2 9,400 9,432 10,781 9,502 9,843 9,452' 11,852 9,772 13,116 11,041 2 Total vault cash3 50,025 46,009 43,570 42,205 43,918 41,682' 42,024' 41,432 41,968 41,040 3 Applied vault cash4 35,383 30,922 32,043 29,379 31,830 29,833 31,136 29,696 31,211 29,857 4 Surplus vault cash5 14,642 15,088 11,527 12,826 12,089 11,849' 10,889' 11,736 10,758 11,183 5 Total reserves6 44,783 40,354 42,824 38,881 41,672 39,285' 42,987 39,468 44,326 40,898 6 Required reserves 43,203 38,018 41,221 37,215 40,058 37,784 41,436 37,924 42,712 38,918 7 Excess reserve balances at Reserve Banks7 1,580 2,335 1,603 1,665 1,614 1,501' 1,551 1,543 1,614 1,979 8 Total borrowing at Reserve Banks 34 25 21 32 11 33 29 51 58 69 9 Primary 28 21 17 23 3 15 2 3 2 7 10 Secondary 0 0 0 0 0 0 0 0 0 0 11 Seasonal 6 4 5 9 8 18 27 48 56 63 12 Adjustment 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 Primary credit' Secondary credit2 Seasonal credit- Federal Reserve Bank 7/1 O 8 n / 03 Effective date Previous rate 7/1 O 8 n / 03 7/1 O 8 n / 03 Boston 6/25/03 6/25/03 New York . . . 6/25/03 6/25/03 Philadelphia . 6/26/03 6/26/03 Cleveland . . . 6/26/03 6/26/03 Richmond . . . 6/26/03 6/26/03 Atlanta 6/26/03 6/26/03 Chicago 6/26/03 6/26/03 St. Louis 6/26/03 6/26/03 Minneapolis . 6/26/03 6/26/03 Kansas City . 6/25/03 6/25/03 Dallas 6/26/03 6/26/03 San Francisco 6/25/03 6/25/03 2.75 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) 2003—June 25 2.00-2.25 2.00 26 2.00 2.00 In effect July 18, 2003 2.00 2.00 Range of rates for adjustment credit in recent years4 Range(or F.R. Bank Range (or F.R. Bank Range (or F.R. Bank Effective date level)—-All of level)—All of level)—All of F.R. Banks N.Y. F.R. Banks N.Y. F.R. Banks N.Y. In effect Dec. 31, 1995 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 Apr. 2 1 1 8 4.0 4 0 . ^ 5 1 0 . 50 4 4 . . 5 0 0 0 2002—Nov. 6 1 . . . .. . 0.7 0 5 . - 7 1 5 . 25 0 0 . . 7 7 5 5 20 4.00 4.00 2001—May 15 3.50^1.00 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 takes into account rates charged by market sources of funds and ordinarily is reestablished on that are in generally sound financial condition in the judgment of the lending Federal Reserve the 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 Monetan 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 (http://www.federalreserve.gOv/releases/H 15/data.htm). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Financial Statistics • August 2003 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Requirement Type of deposit Net transaction accounts2 1 $0 million-$6 million1 12/26/02 2 More than $6 million-$42.1 million4 12/26/02 3 More than $42.1 million5 12/26/02 4 Nonpersonal time deposits6 12/27/90 5 Eurocurrency liabilities7 12/27/90 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 Oct. Nov. Dec. Jan. Feb. Mar. Apr. U.S. TREASURY SECURITIES2 Outright transactions Treasury bills 1 Gross purchases 8,676 15,503 21,421 0 250 0 0 4,161 1,863 3,543 2 Gross sales 0 0 0 0 0 0 0 0 0 0 3 Exchanges 477,904 542,736 657,931 62,947 51,394 53,374 71,075 53,860 47,424 51,834 4 For new bills 477,904 542,736 657,931 62,947 51,394 53,374 71,075 53,860 47,424 51,834 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 0 0 0 0 478 1,318 1,422 7 Gross sales 0 0 0 0 0 0 0 0 0 0 8 Maturity shifts 62,025 70,336 89,108 6,143 3,688 13,448 6,216 3,214 8,334 8,333 9 Exchanges -54,656 -72,004 -92,075 -5,435 -1,419 -12,059 -6,834 -13,313 -8,211 -7,293 10 Redemptions 3,779 16,802 0 0 0 0 0 0 0 0 One to five years 11 Gross purchases 14,482 22,814 12,748 0 0 339 0 2,127 710 733 12 Gross sales 0 0 0 0 0 0 0 0 0 0 13 Maturity shifts -52,068 -45,211 -73,093 -6,143 -2,380 -13,448 -6,216 2,160 -8,334 -8,333 14 Exchanges 46,177 64,519 88,276 5,435 1,308 12,059 6,834 11,817 8,211 7,293 Five to ten years 13 Gross purchases 5,871 6,003 5,074 0 0 314 0 769 522 0 16 Gross sales 0 0 0 0 0 0 0 0 0 0 17 Maturity shifts -6,801 -21,063 -11,588 0 722 0 0 -3,877 0 0 18 Exchanges 6,585 6,063 3,800 0 111 0 0 1,497 0 0 More than ten years 19 Gross purchases 5,833 8,531 2,280 0 0 0 0 0 50 0 20 Gross sales 0 0 0 0 0 0 0 0 0 0 21 Maturity shifts -3,155 ^T,062 -4,427 0 -2,030 0 0 -1,497 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 0 250 653 0 7,534 4,463 5,699 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 26 Net change in U.S. Treasury securities 15,369 41,616 54,242 0 250 653 0 7,534 4,463 5,699 FEDERAL AGENCY OBLIGATIONS Outright transactions 27 Gross purchases 0 0 0 0 0 0 0 0 0 0 28 Gross sales 0 0 0 0 0 0 0 0 0 0 29 Redemptions 51 120 0 0 0 0 0 0 0 0 30 Net change in federal agency obligations -51 -120 0 0 0 0 0 0 0 0 TEMPORARY TRANSACTIONS Repurchase agreements3 31 Gross purchases 890,236 1,497,713 1,143,126 72,000 113,501 112,750 135,749 121,896 95,001 112,251 32 Gross sales 987,501 1,490,838 1,153,876 77,250 101,501 101,750 150,499 119,746 90,151 106,500 Matched sale-purchase agreements 33 Gross purchases 4,415,905 4,722,667 4,981,624 429,029 378,381 195,565 0 0 0 0 34 Gross sales 4,397,835 4,724,743 4,958,437 425,399 377,535 175,820 0 0 0 0 Reverse repurchase agreements4 35 Gross purchases 0 0 231,272 0 0 231,272 392,530 343,748 388,069 451,149 36 Gross sales 0 0 252,363 0 0 252,363 389,810 343,395 389,469 452,545 37 Net change in temporary transactions -79,195 4,800 -8,653 -1,620 12,847 9,654 -12,029 2 2,200 2,104 38 Total net change in System Open Market Account .. -63,877 46,295 45,589 -1,620 13,096 10,307 -12,029 7,537 6,664 7,803 1. Sales, redemptions, and negative figures reduce holdings of the System Open Market 3. Cash value of agreements, which are collateralized by U.S. government and federal Account; all other figures increase such holdings. agency obligations. 2. Transactions exclude changes in compensation for the effects of inflation on the 4. Cash value of agreements, which are collateralized by U.S. Treasury securities, principal of inflation-indexed securities. Transactions include the rollover of inflation compensation into new securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Financial Statistics • August 2003 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 2003 2003 Apr. 30 May 7 May 14 May 21 May 28 Mar. Apr. May Consolidated condition statement ASSETS 1 Gold certificate account 11,039 11,039 11,039 11,039 11,039 11,038 11,039 11,040 2 Special drawing rights certificate account 2,200 2.200 2,200 2,200 2,200 2,200 2,200 2,200 3 Coin 1,021 1,003 983 950 920 1,106 1,021 924 4 Securities, repurchase agreements, and loans 684,817 669,890 678,759 677,041 682,931 673,253 684,817 681,447 5 Securities held outright 647,281 647,580 647,947 650,735 650,869 641,474 647,281 651,127 6 U.S. Treasury2 647,271 647,570 647,937 650,725 650,859 641,464 647,271 651,117 7 Bills3 236,249 236,529 236.877 237,568 237,683 232,706 236,249 237,933 8 Notes and bonds, nominal3 396,776 396,776 396,776 398,853 398,853 394,621 396,776 398,853 9 Notes and bonds, inflation-indexed3 12,814 12,814 12,814 12,814 12,814 12,814 12,814 12,814 10 Inflation compensation4 1,431 1,450 1,470 1,489 1,508 1,322 1,431 1,517 11 Federal agency3 10 10 10 10 10 10 10 10 12 Repurchase agreements5 37,501 22,251 30,752 26,251 32,000 31,750 37,501 30,240 13 Loans 35 59 60 55 62 30 35 80 14 Items in process of collection 8,173 9,556 7,078 6,609 10,632 2,129 8,173 5,684 15 Bank premises 1,577 1,578 1,580 1,581 1,581 1,557 1,577 1,579 16 Other assets 38,412 39,141 39,670 36,208 36,514 37,190 38,412 36,689 17 Denominated in foreign currencies6 17,579 17,897 18,063 18,174 18,108 17,383 17,579 18,080 18 All other7 20,832 21,244 21,607 18,034 18,405 19,807 20,832 18,609 19 Total assets 747,239 734,407 741,309 735,628 745,817 728,474 747,239 739,563 LIABILITIES 20 Federal Reserve notes, net of F.R. Bank holdings 655,226 657,217 657,396 658,309 661,167 652,467 655,226 658,674 21 Reverse repurchase agreements8 20,814 20,667 21,073 20,709 21,857 19,418 20,814 22,285 22 Deposits 43,007 27,872 35,188 29,144 33,558 33,998 43,007 32,470 23 Depository institutions 31,880 21,417 27,603 21,162 28,360 26,787 31,880 25,669 24 U.S. Treasury, general account 10,583 6,050 7,199 7,608 4,825 6,746 10,583 6,505 25 Foreign official 313 145 122 126 129 254 313 79 26 Other 231 259 264 247 243 211 231 217 27 Deferred availability cash items 8,142 8,542 7,599 7,498 9,417 2,362 8,142 6,161 28 Other liabilities and accrued dividends9 2,270 2,294 2,333 2,304 2,326 2,232 2,270 2,329 29 Total liabilities 729,460 716,592 723,589 717,964 728,326 710,476 729,460 721,919 CAPITAL ACCOUNTS 30 Capital paid in 8,545 8,564 8,568 8,562 8,574 8,505 8,545 8,575 31 Surplus 8,380 8,380 8,380 8,380 8,380 8,380 8,380 8,380 32 Other capital accounts 854 871 772 722 537 1,113 854 689 33 Total capital 17,779 17,816 17,720 17,664 17,491 17,998 17,779 17,644 MEMO 34 Marketable securities held in custody for foreign official and international accounts310 893,534 895,358 901,212 924,397 928,892 901,060 893,534 931,570 35 U.S. Treasury 713,499 713,153 718,995 740,006 741,441 720,666 713,499 741,378 36 Federal agency 180,035 182,205 182,217 184,391 187,451 180,393 180,035 190,191 Federal Reserve note and collateral statement 37 Federal Reserve notes, net of F.R. Bank holdings 655,226 657,217 657,396 658,309 661,167 652,467 655,226 658,674 38 Collateral held against Federal Reserve notes 659,280 661,189 661,356 662,445 665,319 652,467 659,280 662,789 39 Gold certificate account 11,039 11,039 11,039 11,039 11,039 11,038 11,039 11,040 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 pledged11 646,042 647,950 648,117 649,206 652,080 639,229 646,042 649,549 42 Other eligible assets 0 0 0 0 0 0 0 0 MEMO 43 Total U.S. Treasury and agency securities" 684,782 669,831 678,699 676,986 682,869 673,224 684,782 681,367 44 Less: face value of securities under reverse repurchase agreements12 20,821 20,674 21,079 20,715 21,863 19,425 20,821 22,295 45 U.S. Treasury and agency securities eligible to be pledged .... 663,961 649,157 657,620 656,271 661,006 653,798 663,961 659,072 1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly statistical 7. Includes special investment account at the Federal Reserve Bank of Chicago in Treasury release. For ordering address, see inside front cover. bills maturing within ninety days. 2. Includes securities lent to dealers, which are fully collateralized by other U.S. Treasury 8. Cash value of agreements, which are fully collateralized by U.S. Treasury securities. securities. 9. Includes exchange-translation account reflecting the daily revaluation at market 3. Face value of the securities. exchange rates of foreign exchange commitments. 4. Compensation that adjusts for the effect of inflation on the original face value of 10. Includes U.S. Treasury STRIPS and other zero coupon bonds at face value. inflation-indexed securities. 11. Includes face value of U.S. Treasury and agency securities held outright, compensation 5. Cash value of agreements, which are fully collateralized by U.S. Treasury and federal to adjust for the effect of inflation on the original face value of inflation-indexed securities, agency securities. and cash value of repurchase agreements. 6. Valued daily at market exchange rates. 12. Face value of agreements, which are fully collateralized by U.S. Treasury securities. 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 Loans and Securities Millions of dollars Wednesday End of month TTTyyypppeee ooofff hhhooollldddiiinnnggg aaannnddd mmmaaatttuuurrriiitttyyy 2003 2003 Apr. 30 May 7 May 14 May 21 May 28 Mar. Apr. May 1 Total loans 35 59 60 55 62 30 35 80 2 Within 15 days 28 20 15 42 49 30 28 66 3 16 days to 90 days 7 39 45 13 14 0 7 14 4 91 days to 1 year 0 0 0 0 0 0 0 0 5 Total U.S. Treasury securities' 647,271 647,570 647,937 650,725 650,859 641,464 647,271 651,117 6 Within 15 days 46,750 46,850 46,792 51,747 51,749 24,647r 46,750r 36,449 7 16 days to 90 days 126,284 131,587 132,509 137,386 138,094 146,179 126,284 153,457 8 91 days to 1 year 153,916 157,125 156,610 154,489 153,894 149,328 153,916 154,081 9 Over 1 year to 5 years 188,832 180,504 180,509 180,465 180,470 189,111 188,832 180,472 10 Over 5 years to 10 years 51,538 51,544 51,550 46,663 46,669 52,290 51,538 46,672 11 Over 10 years 79,952 79,960 79,968 79,975 79,983 79,908 79,952 79,987 12 Total federal agency securities 10 10 10 10 10 10 10 10 13 Within 15 days 0 0 0 0 0 0 0 0 14 16 days to 90 days 0 0 0 0 0 0 0 0 15 91 days to 1 year 10 10 10 10 10 10 10 10 16 Over 1 year to 5 years 0 0 0 0 0 0 0 0 17 Over 5 years to 10 years 0 0 0 0 0 0 0 0 18 Over 10 years 0 0 0 0 0 0 0 0 19 Total repurchase agreements2 37,501 22,251 30,752 26,251 32,000 31,750 37,501 30,240 20 Within 15 days 33,500 18,251 25,752 20,251 29,000 21,750 33,500 22,240 21 16 days to 90 days 4,001 4,000 5,000 6,000 3,000 10,000 4,001 8,000 22 Total reverse repurchase agreements2 20,814 20,667 21,073 20,709 21,857 19,418 20,814 22,285 23 Within 15 days 20,814 20,667 21,073 20,709 21,857 19,418 20,814 22,285 24 16 days to 90 days 0 0 0 0 0 0 0 0 Note. Components may not sum to totals because of rounding. 2. Cash value of agreements classified by remaining maturity of the agreements. 1. Includes the original face value of inflation-indexed securities and compensation that adjusts for the effect of inflation on the original face value of such securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Financial Statistics • August 2003 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 2002 2003 1999 2000 2001 2002 IItteemm Dec. Dec. Dec. Dec.r Oct.' Nov.' Dec.' Jan.' Feb.' Mar.' Apr.' May Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS2 1 Total reserves3 41.81 38.54 41.24 40.22 39.17 39.76 40.22 40.73 40.82 40.97 40.81 40.99 2 Nonborrowed reserves4 41.49 38.33 41.18 40.14 39.03 39.49 40.14 40.70 40.80 40.95 40.78 40.93 3 Required reserves 40.51 37.11 39.60 38.21 37.64 38.12 38.21 39.02 38.86 39.34 39.27 39.37 4 Monetary base5 593.16' 584.77' 635.62' 681.90 674.25 677.61 681.90 685.72 691.31 695.14 698.21 701.14 Not seasonally adjusted 5 Total reserves6 41.89 38.53 41.20 40.13 38.53 39.05 40.13 42.85 41.94 40.60 41.16 41.79 6 Nonborrowed reserves 41.57 38.32 41.13 40.05 38.39 38.78 40.05 42.83 41.91 40.57 41.14 41.73 7 Required reserves1 40.59 37.10 39.55 38.12 37.00 37.42 38.12 41.15 39.97 38.96 39.63 40.17 8 Monetary base8 600.72 590.06 639.91 686.23 671.43 676.72 686.23 688.33 690.25 693.91 697.81 701.53 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS9 9 Total reserves10 41.65 38.47 41.08 40.27 38.67 39.21 40.27 42.87 41.94 40.60 41.17 41.80 10 Nonborrowed reserves 41.33 38.26 41.01 40.19 38.53 38.94 40.19 42.84 41.91 40.58 41.14 41.75 11 Required reserves 40.36 37.05 39.43 38.26 37.14 37.58 38.26 41.16 39.97 38.96 39.64 40.18 12 Monetary base" 608.02 596.98 648.74 697.15 681.78 687.29 697.15 699.25 701.04 705.04 709.08 712.71 13 Excess reserves12 1.30 1.43 1.65 2.01 1.54 1.64 2.01 1.71 1.97 1.64 1.53 1.62 14 Borrowings from the Federal Reserve .32 .21 .07 .08 .14 .27 .08 .03 .03 .02 .03 .06 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 2003 1999 2000 2001 2002 IItteemm Dec.r Dec/ Dec.r Dec/ Feb/ Mar/ Apr.' May Seasonally adjusted Measures2 1 Ml 1,121.4 1,084.7 1,172.9 1,211.1 1,233.8 1,237.1 1,237.4 1,258.3 7 M2 4,649.7 4,931.3 5,444.4 5,792.0 5,876.0 5,889.9 5,912.8 5,999.3 3 M3 6,534.9 7,099.2 8,004.4 8,519.1 8,556.3 8,576.8 8,589.5 8,683.1 Ml components 4 Currency3 517.7 531.5 581.9 627.3 636.1 640.2 643.1 664455..77 Travelers checks4 8.3 8.0 7.8 7.5 7.6 7.5 7.4 7.5 6 Demand deposits5 352.1 306.9 326.1 297.7 306.5 304.4 304.5 315.7 7 Other checkable deposits6 243.4 238.2 257.2 278.6 283.6 284.9 282.3 289.4 Nontransaction components 8 In M27 3,528.3 3,846.7 4,271.6 4,580.9 4,642.2 4,652.8 4,675.4 4,740.9 9 In M3 only8 1,885.1 2,167.9 2,559.9 2,727.1 2,680.3 2,686.9 2,676.6 2,683.8 Commercial banks 10 Savings deposits, including MMDAs 1,288.8 1,422.9 1,734.6 2,047.8 2,107.6 2,115.2 2,146.4 2,188.3 11 Small time deposits9 634.6 699.5 634.2 591.1 583.9 580.6 576.1 570.7 12 Large time deposits10,11 652.2 718.3 671.1 676.7 682.7 688.2 689.7 702.4 Thrift institutions 13 Savings deposits, including MMDAs 452.0 454.3 572.4 714.4 743.1 755.1 767.0 792.7 14 Small time deposits9 319.5 344.8 339.1 302.1 298.0 296.5 295.3 292.9 15 Large time deposits10 91.9 103.0 114.9 117.3 118.5 117.7 117.9 116.9 Money market mutual funds 16 Retail 833.4 925.2 991.3 925.5 909.7 905.5 890.6 889966..33 17 Institution-only 634.8 788.8 1,190.3 1,234.5 1,178.7 1,165.8 1,144.0 1,124.8 Repurchase agreements and eurodollars 18 Repurchase agreements'2 335.7 363.5 375.0 470.7 475.7 449933..44 501.0 550066..33 19 Eurodollars12 170.5 194.3 208.6 227.9 224.8 221.8 224.0 233.4 Not seasonally adjusted Measures2 70 Ml 1,147.8 1,112.1 1,202.9 1,241.0 1,219.5 1,238.6 1,253.5 1,251.8 71 M2 4,676.8 4,966.7 5,487.4 5,841.4 5,858.0 5,922.4 5,979.6 5,964.6 22 M3 6,577.5 7,153.8 8,076.1 8,596.7 8,586.1 8,638.3 8,651.1 8,658.5 Ml components 23 Currency3 521.7 535.6 585.4 630.6 635.2 639.9 643.3 664466..44 74 Travelers checks4 8.4 8.1 7.9 7.7 7.7 7.7 7.5 7.5 75 Demand deposits5 371.7 326.7 348.1 318.2 298.0 303.3 308.3 308.3 26 Other checkable deposits6 246.0 241.6 261.5 284.6 278.7 287.8 294.4 289.5 Nontransaction components 77 In M2 3,529.0 3,854.7 4,284.4 4,600.4 4,638.4 4,683.8 4,726.1 4,712.8 28 In M3 only8 1,900.7 2,187.1 2,588.7 2,755.3 2,728.1 2,716.0 2,671.5 2,693.9 Commercial banks 29 Savings deposits, including MMDAs 1,288.7 1,427.5 1,742.4 2,060.4 2,096.6 2,126.3 2,170.9 2,177.4 30 Small time deposits9 635.6 700.6 635.1 591.7 583.8 579.8 575.1 570.0 31 Large time deposits'01' 653.6 718.5 670.0 675.0 678.9 686.0 688.2 708.3 Thrift institutions 32 Savings deposits, including MMDAs 451.9 455.8 575.0 718.8 739.2 759.1 775.8 788.8 3.3 Small time deposits9 320.0 345.4 339.6 302.5 297.9 296.1 294.8 292.6 34 Large time deposits10 92.1 103.0 114.7 117.0 117.8 117.3 117.6 117.9 Money market mutual funds 35 Retail 832.7 925.3 992.4 927.0 920.9 922.6 909.4 884.1 36 Institution-only 648.6 806.1 1,218.3 1,262.3 1,216.2 1,187.5 1,141.1 1,118.9 Repurchase agreements and eurodollars 37 Repurchase agreements12 334.7 364.2 376.5 472.5 486.9 499.5 497.2 513.6 38 Eurodollars'2 171.7 195.2 209.1 228.5 228.4 225.7 227.3 235.2 Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Financial Statistics • August 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 (I) 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 Liabilities' A. All commercial banks Billions of dollars Monthly averages Wednesday figures Account 2002 2002 2003 2003 May Nov.' Dec.' Jan.' Feb.' Mar.' Apr.' May May 7 May 14 May 21 May 28 Seasonally adjusted Assets 1 Bank credit 5,492.4' 5,837.8 5,894.7 5,889.1 5,965.3 5,995.0 6,028.4 6,115.7 6,082.2 6,116.3 6,110.5 6,132.9 7 Securities in bank credit l,529.2r 1,679.3 1,708.7 1,702.6 1,746.0 1,757.9 1,769.8 1,826.6 1,803.1 1,818.4 1,824.3 1,845.0 U.S. government securities 889.7 1,004.3 1,020.1 1,022.6 1,051.0 1,063.5 1,095.4 1,126.9 1,118.3 1,120.6 1,122.5 1,138.4 4 Other securities 639.5r 675.0 688.6 680.1 695.0 694.4 674.4 699.7 684.8 697.8 701.9 706.6 Loans and leases in bank credit2 .... 3,963.3 4,158.5 4,186.0 4,186.5 4,219.3 4,237.2 4,258.6 4,289.1 4,279.1 4,297.8 4,286.2 4,288.0 6 Commercial and industrial 999.3r 968.0 966.0 961.5 955.2 949.7 947.8 936.9 939.2 939.8 937.2 936.1 7 Real estate 1,818.7 2,007.9 2,030.0 2,048.1 2,080.8 2,094.7 2,111.0 2,134.2 2,137.5 2,142.0 2,129.4 2,122.9 8 Revolving home equity 178.9 209.2 213.8 217.7 222.2 229.3 233.3 236.9 234.6 235.9 237.2 238.4 9 Other 1,639.7 1,798.8 1,816.1 1,830.4 1,858.6 1,865.4 1,877.8 1,897.2 1,902.9 1,906.1 1,892.2 1,884.5 in Consumer 568.4' 585.6 588.1 591.9 591.8 586.9 583.9 587.9 585.1 587.1 588.2 590.1 n Security3 169.9 185.8 189.5 174.8 181.3 194.1 193.4 199.4 193.0 200.1 198.8 202.4 17 Other loans and leases 407.0' 411.2 412.4 410.2 410.3 411.7 422.5 430.8 424.3 428.9 432.6 436.4 n Interbank loans 287.7 325.5 328.4 307.3 305.0 314.2 307.1 318.6 317.4 327.2 313.6 317.0 14 Cash assets4 302.5 315.4 316.9 313.7 318.3 325.8 321.9 325.2 321.1 322.9 322.4 340.4 15 Other assets5 482.4 510.1 508.1 508.1 531.9 521.9 527.5 554.1 549.0 551.8 551.0 560.3 16 Total assets6 6,489.3r 6,912.0 6,971.4 6,941.1 7,043.5 7,080.2 7,109.3 7,237.7 7,193.8 7,242.2 7,221.3 7,274.5 Liabilities 17 Deposits 4,350.2 4.509.3 4,487.4 4,506.9 4,535.4 4,585.7 4,613.4 4,646.5 4,621.3 4,663.7 4,626.4 4,659.8 18 Transaction 610.0 605.9 611.3 608.0 613.7 619.5 632.3 633.5 601.9 634.0 640.1 673.1 19 Nontransaction 3,740.2 3,903.4 3,876.1 3,899.0 3,921.6 3,966.1 3,981.1 4,013.0 4,019.4 4,029.7 3,986.3 3,986.7 70 Large time 1,040.1 1,005.7 978.6 979.4 995.2 1,001.6 985.3 999.0 988.7 998.3 1,001.6 1,002.2 7.1 Other 2,700.1 2,897.6 2,897.6 2,919.6 2,926.4 2,964.5 2,995.7 3,014.0 3,030.6 3,031.4 2,984.7 2,984.4 22 Borrowings 1,240.4 1,366.1 1,397.3 1,331.2 1,362.7 1,384.2 1,393.0 1,426.2 1,419.6 1,413.1 1,417.8 1,445.0 From banks in the U.S 383.4 421.9 417.5 380.8 388.1 397.4 397.4 389.9 392.6 388.0 385.9 388.3 74 From others 857.0 944.2 979.8 950.4 974.6 986.7 995.6 1,036.4 1,027.0 1,025.1 1,031.9 1,056.7 75 Net due to related foreign offices 88.4' 122.0 152.0 161.2 150.6 144.8 151.4 160.9 178.2 155.2 159.5 162.1 26 Other liabilities 342.4 431.5 442.5 446.4 460.0 453.9 458.4 483.4 466.7 490.8 490.0 479.8 27 Total liabilities 6,021.4r 6,428.8 6,479.2 6,445.7 6,508.6 6,568.5 6,616.2 6,717.0 6,685.8 6,722.8 6,693.7 6,746.7 28 Residual (assets less liabilities)7 467.9' 483.2 492.2 495.4 534.9 511.7 493.1 520.7 508.0 519.4 527.7 527.9 Not seasonally adjusted Assets 7,9 Bank credit 5,487.4' 5,853.2 5,928.7 5,906.2 5,968.7 5,983.8 6,023.0 6,111.1 6,083.9 6,112.4 6,101.0 6,122.9 30 Securities in bank credit 1,527.3' 1,682.6 1,715.3 1,713.0 1,755.1 1,762.9 1,767.6 1,824.4 1,801.7 1,816.1 1,821.3 1,840.3 31 U.S. government securities 888.1 1,006.0 1,024.4 1,027.4 1,057.4 1,068.5 1,095.3 1,124.9 1,115.4 1,118.5 1,121.0 1,135.0 37 Other securities 639.3' 676.5 691.0 685.6 697.8 694.4 672.4 699.4 686.3 697.6 700.3 705.4 33 Loans and leases in bank credit2 .... 3,960.1 4,170.6 4,213.4 4,193.2 4,213.6 4,221.0 4,255.4 4,286.7 4,282.2 4,296.3 4,279.7 4,282.6 34 Commercial and industrial l,003.0r 968.0 964.7 955.6 953.2 951.0 951.5 940.7 945.7 943.5 940.4 937.7 35 Real estate 1,821.6 2,012.5 2,034.5 2,048.5 2,076.5 2,085.7 2,107.4 2,138.0 2,140.7 2,147.7 2,133.0 2,126.2 36 Revolving home equity 179.8 209.0 213.4 217.0 222.5 227.2 233.0 238.1 236.0 237.2 238.4 239.5 37 Other 1,641.8 1,803.4 1,821.1 1,831.5 1,854.0 1,858.5 1,874.4 1,899.9 1,904.7 1,910.4 1,894.7 1,886.7 38 Consumer 566.9' 588.0 597.0 599.6 595.0 584.6 581.1 586.7 583.7 586.3 587.5 588.9 39 Credit cards and related plans . . 222.6 231.6 238.5 234.0 225.8 219.6 215.2 220.4 218.4 219.7 219.9 223.6 40 Other 344.3' 356.4 358.4 365.6 369.1 365.0 365.9 366.3 365.4 366.6 367.6 365.4 41 Security3 163.0 190.2 200.1 181.0 183.0 189.6 192.7 192.3 188.5 192.2 189.7 195.7 47 Other loans and leases 405.6' 412.0 417.0 408.5 405.9 409.9 422.7 429.1 423.6 426.7 429.1 434.1 43 Interbank loans 284.8 330.6 335.4 304.0 302.2 320.8 318.3 314.3 318.6 321.8 303.8 307.7 44 Cash assets4 299.3 325.2 339.1 329.7 318.8 314.9 320.5 321.4 314.8 316.5 305.2 349.3 45 Other assets5 480.5 513.6 512.9 511.9 529.4 521.1 526.9 552.1 552.7 553.7 545.7 552.4 46 Total assets6 6,476.2' 6,946.0 7,039.5 6,974.9 7,041.9 7,063.7 7,113.1 7,222.7 7,193.9 7,228.2 7,179.5 7,256.1 Liabilities 47 Deposits 4,344.7 4,524.3 4,538.2 4,530.3 4,556.3 4,592.8 4,638.5 4,639.5 4,626.6 4,655.4 4,599.4 4,647.8 48 Transaction 600.3 613.5 644.1 622.0 606.1 611.1 638.2 623.3 591.2 622.0 617.1 669.5 49 Nontransaction 3,744.5 3,910.8 3,894.1 3,908.2 3,950.2 3,981.6 4,000.3 4,016.2 4,035.5 4,033.4 3,982.2 3,978.4 50 Large time 1,045.1' 1,009.6 991.3 996.0 1,005.8 1,004.3 989.7 1,002.6 994.0 1,000.7 1,004.1 1,006.7 51 Other 2,699.3 2,901.2 2,902.8 2,912.3 2,944.3 2,977.3 3,010.6 3,013.6 3,041.5 3,032.6 2,978.1 2,971.6 57 Borrowings 1,245.7 1,367.4 1,396.5 1,344.3 1,364.9 1,380.5 1,397.2 1,431.9 1,437.6 1,422.3 1,417.1 1,442.5 53 From banks in the U.S 385.6 418.6 419.3 385.4 391.6 400.8 401.5 392.2 398.6 391.5 386.7 387.9 54 From others 860.1 948.8 977.2 958.9 973.2 979.7 995.7 1,039.7 1,039.0 1,030.8 1,030.5 1,054.6 55 Net due to related foreign offices 88.3' 125.9 158.2 165.3 156.1 142.7 141.7 160.4 173.0 154.4 159.3 166.4 56 Other liabilities 341.9 437.5 449.5 450.2 466.3 450.3 445.9 482.6 460.7 489.1 489.7 484.8 57 Total liabilities 6,020.6r 6,455.1 6,542.3 6,490.0 6,543.5 6,566.3 6,623.3 6,714.4 6,698.0 6,721.1 6,665.5 6,741.5 58 Residual (assets less liabilities)7 455.6' 490.8 497.2 484.9 498.4 497.3 489.7 508.3 495.9 507.1 514.0 514.6 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • August 2003 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued B. Domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures Account 2002 2002 2003 2003 May Nov. Dec.' Jan.' Feb.' Mar.' Apr.' May May 7 May 14 May 21 May 28 Seasonally adjusted Assets 1 Bank credit 4,897.5 5,217.8' 5,258.7 5,261.1 5,324.4 5,337.2 5,378.1 5,454.1 5,429.0 5,457.3 5,450.7 5,462.7 2 Securities in bank credit 1,299.7 1,431.5 1,447.1 1,439.7 1,472.7 1,480.1 1,498.5 1,544.3 1,528.4 1,538.1 1,539.9 1,558.2 3 U.S. government securities 816.5 910.8 918.2 918.7 940.5 947.1 976.5 1,002.6 998.2 998.3 996.9 1,010.3 4 Other securities 483.2 520.7 528.9 521.0 532.3 533.0 521.9 541.7 530.2 539.9 543.0 547.9 5 Loans and leases in bank credit2 .... 3,597.9 3,786.3' 3,811.7 3,821.4 3,851.7 3,857.2 3,879.6 3,909.7 3,900.6 3,919.1 3,910.9 3,904.5 6 Commercial and industrial 803.3 789.0' 787.6 784.3 781.0 778.0 775.5 767.3 768.0 768.4 767.6 767.6 7 Real estate 1,800.6 1,988.0' 2,010.5 2,028.4 2,061.0 2,074.9 2,092.0 2,115.0 2,118.3 2,122.8 2,110.2 2,103.7 8 Revolving home equity 178.9 209.2 213.8 217.7 222.2 229.3 233.3 236.9 234.6 235.9 237.2 238.4 y Other 1,621.6 1,778.8' 1,796.6 1,810.7 1,838.8 1,845.6 1,858.7 1,878.1 1,883.7 1,887.0 1,873.0 1,865.3 1U Consumer 568.4r 585.6' 588.1 591.9 591.8 586.9 583.9 587.9 585.1 587.1 588.2 590.1 n Security3 88.8 81.1 79.4 71.5 73.2 72.2 72.4 80.9 76.1 82.1 83.3 80.8 12 Other loans and leases 336.7' 342.6' 346.1 345.4 344.7 345.2 355.8 358.7 353.1 358.7 361.6 362.3 13 Interbank loans 264.5 300.0 298.3 279.1 278.0 286.7 283.1 294.0 293.4 304.2 289.6 290.5 14 Cash assets4 256.5 273.0 272.3 273.6 279.6 282.7 276.7 273.0 270.9 271.2 270.1 286.6 15 Other assets5 456.3 475.5' 472.2 468.8 491.9 486.9 489.5 506.6 504.3 503.3 505.8 510.2 16 Total assets6 5,799.5 6,190.0 6,225.4 6,206.0 6,297.5 6,317.3 6,352.2 6,452.1 6,422.1 6,460.4 6,440.7 6,474.3 Liabilities 17 Deposits 3,846.3 4,056.7 4,061.9 4,080.4 4,092.5 4,137.2 4,177.0 4,207.7 4,189.2 4,224.7 4,187.3 4,219.9 18 Transaction 599.4 596.7 602.1 598.2 603.5 608.1 621.0 622.4 590.2 623.4 629.4 662.0 19 Nontransaction 3,247.0 3,460.0 3,459.8 3,482.2 3,489.0 3,529.2 3,556.0 3,585.3 3,599.0 3,601.2 3,557.9 3,557.9 20 Large time 549.0 571.4 569.9 577.6 583.5 583.6 582.1 595.3 594.0 593.8 594.3 598.7 21 Other 2,697.9 2,888.6 2,889.9 2,904.6 2,905.5 2,945.6 2,974.0 2,990.0 3,005.0 3,007.5 2,963.6 2,959.2 22 Borrowings 1,050.9 1,114.9 1,119.4 1,062.1 1,092.7 1,095.9 1,099.1 1,124.4 1,119.4 1,119.1 1,122.6 1,133.2 23 From banks in the U.S 362.7 396.7 387.5 349.8 357.0 363.7 369.9 358.1 361.4 357.0 355.0 355.7 24 From others 688.2 718.2' 731.9 712.3 735.7 732.1 729.2 766.3 758.0 762.1 767.6 777.5 25 Net due to related foreign offices 180.2 196.3 212.1 231.5 229.1 229.2 228.0 238.7 254.1 232.7 237.8 238.1 26 Other liabilities 268.1 332.2' 340.3 346.0 355.2 354.1 363.1 373.5 362.9 377.5 378.8 370.2 27 Total liabilities 5,345.5 5,700.0 5,733.7 5,720.0 5,769.5 5,816.4 5,867.2 5,944.4 5,925.6 5,954.0 5,926.6 5,961.5 28 Residual (assets less liabilities)7 454.0 489.9' 491.7 486.0 528.0 501.0 485.0 507.7 496.6 506.4 514.1 512.9 Not seasonally adjusted Assets 29 Bank credit 4,896.8 5,229.6' 5,282.7 5,270.5 5,323.4 5,327.9 5,372.8 5,454.2 5,433.8 5,457.5 5,447.9 5,457.1 30 Securities in bank credit 1,297.9 1,434.8 1,453.7 1,450.1 1,481.9 1,485.1 1,496.3 1,542.1 1,527.1 1,535.8 1,536.8 1,553.5 31 U.S. government securities 814.9 912.5 922.4 923.5 946.8 952.1 976.4 1,000.6 995.3 996.1 995.4 1,006.8 32 Other securities 483.0 522.3 531.3 526.6 535.1 533.0 519.9 541.5 531.8 539.7 541.4 546.7 33 Loans and leases in bank credit2 .... 3,598.9 3,794.8' 3,829.1 3,820.4 3,841.6 3,842.8 3,876.5 3,912.1 3,906.7 3,921.7 3,911.0 3,903.6 34 Commercial and industrial 809.2 787.7' 784.9 778.3 777.6 777.8 780.3 773.0 776.3 774.0 772.8 771.4 35 Real estate 1,803.5 1,992.5' 2,015.0 2,028.8 2,056.8 2,065.9 2,088.4 2,118.8 2,121.5 2,128.5 2,113.9 2,107.0 36 Revolving home equity 179.8 209.0 213.4 217.0 222.5 227.2 233.0 238.1 236.0 237.2 238.4 239.5 37 Other 1,623.7 1,783.5' 1,801.7 1,811.8 1,834.3 1,838.7 1,855.4 1,880.7 1,885.5 1,891.3 1,875.5 1,867.5 38 Consumer 566.9' SSS.O' 597.0 599.6 595.0 584.6 581.1 586.7 583.7 586.3 587.5 588.9 39 Credit cards and related plans .. 222.6 231.6 238.5 234.0 225.8 219.6 215.2 220.4 218.4 219.7 219.9 223.6 40 Other 344.3' 356.4' 358.4 365.6 369.1 365.0 365.9 366.3 365.4 366.6 367.6 365.4 41 Security3 83.5 83.4 83.4 70.7 72.0 71.9 71.3 76.1 72.4 76.2 77.8 75.7 42 Other loans and leases 335.8' 343.2' 348.8 343.0 340.2 342.5 355.5 357.5 352.9 356.7 359.1 360.5 43 Interbank loans 261.6 305.1' 305.4 275.9 275.2 293.3 294.3 289.6 294.6 298.8 279.9 281.2 44 Cash assets4 254.8 280.4 291.3 286.6 279.1 273.0 277.3 271.0 266.3 266.1 255.0 297.2 45 Other assets5 454.3 479.1' 475.9 471.2 488.9 485.3 489.0 504.4 507.3 504.3 500.6 502.7 46 Total assets6 5,792.0 6,218.0 6,279.2 6,227.7 6,289.8 6,302.9 6,358.3 6,443.4 6,426.3 6,451.0 6,407.7 6,462.5 Liabilities 47 Deposits 3,834.6 4,071.6 4,101.8 4,087.5 4,103.3 4,140.3 4,196.2 4,195.3 4,187.6 4,211.4 4,156.1 4,201.4 48 Transaction 590.1 604.0 634.1 612.0 595.8 600.0 627.5 612.7 580.0 611.9 607.0 658.6 49 Nontransaction 3,244.5 3,467.6 3,467.7 3,475.6 3,507.4 3,540.3 3,568.7 3,582.6 3,607.6 3,599.4 3,549.1 3,542.8 50 Large time 547.4 575.4 572.7 578.9 584.4 582.1 580.2 593.5 592.2 591.0 592.2 596.8 51 Other 2,697.1 2,892.2 2,895.0 2,896.7 2,923.0 2,958.2 2,988.5 2,989.2 3,015.4 3,008.4 2,956.8 2,946.0 52 Borrowings 1,056.3 1,116.2 1,118.5 1,075.2 1,094.9 1,092.2 1,103.2 1,130.1 1,137.3 1,128.3 1,121.8 1,130.7 53 From banks in the U.S 365.0 393.5 389.2 354.4 360.5 367.1 374.0 360.5 367.4 360.5 355.7 355.3 54 From others 691.3 722.7 729.3 720.8 734.4 725.1 729.2 769.6 769.9 767.9 766.1 775.4 55 Net due to related foreign offices 179.6 201.5 216.6 233.1 233.4 224.9 218.7 237.8 249.0 230.3 237.7 241.7 56 Other liabilities 267.3 339.1 346.1 348.0 360.6 348.8 351.0 372.4 357.0 374.4 378.6 374.7 57 Total liabilities 5,337.8 5,728.4 5,783.0 5,743.8 5,792.1 5,806.2 5,869.1 5,935.7 5,930.9 5,944.4 5,894.3 5,948.5 58 Residual (assets less liabilities)7 454.2 489.6 496.1 483.9 497.7 496.7 489.2 507.7 495.3 506.5 513.4 514.0 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A17 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities'—Continued C. Large domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures AAAccccccooouuunnnttt 2002 2002 2003 2003 May' Nov.r Dec.' Jan.' Feb.' Mar.' Apr.' May May 7 May 14 May 21 May 28 Seasonally adjusted Assets 1 Bank credit 2,638.9 2,832.2 2,861.3 2,858.7 2,905.2 2,902.4 2,922.7 2,987.4 2,969.3 2,991.6 2,983.9 2,992.7 7 Securities in bank credit 664.7 769.6 778.9 773.1 804.2 801.8 808.6 855.1 839.5 846.9 850.9 870.4 .3 U.S. government securities 391.0 454.9 457.0 459.8 478.4 475.1 491.8 518.5 512.0 512.5 514.4 528.8 4 Trading account 42.9 47.9 44.6 41.2 54.5 41.8 40.7 43.6 37.8 60.7 35.2 40.4 Investment account 348.1 407.0 412.4 418.5 424.0 433.2 451.1 474.9 474.2 451.8 479.2 488.4 6 Other securities 273.7 314.7 321.9 313.3 325.7 326.7 316.8 336.6 327.5 334.3 336.4 341.6 7 Trading account 140.4 161.0 164.9 160.0 172.6 171.6 161.5 183.4 175.5 180.8 182.0 188.5 8 Investment account 133.4 153.7 157.0 153.3 153.1 155.1 155.3 153.2 152.0 153.5 154.5 153.1 9 State and local government . . 26.9 29.3 29.5 29.4 29.6 30.1 30.9 31.3 30.7 31.2 31.5 31.7 in Other 106.5 124.4 127.5 123.9 123.5 125.0 124.4 121.9 121.3 122.3 122.9 121.4 II Loans and leases in bank credit2 .... 1,974.1 2,062.6 2,082.4 2,085.6 2,101.0 2,100.6 2,114.0 2,132.3 2,129.8 2,144.8 2,133.0 2,122.3 12 Commercial and industrial 510.3 485.6 483.5 480.8 475.8 472.0 469.6 461.4 462.9 462.9 461.7 460.9 13 Bankers acceptances .0 .0 .0 .0 .0 .0 .0 .0 n.a. n.a. n.a. n.a. 14 Other 510.3 485.6 483.5 480.8 475.8 472.0 469.6 461.4 462.9 462.9 461.7 460.9 15 Real estate 854.4 970.3 990.6 1,006.7 1,028.3 1,035.2 1,041.4 1,056.8 1,063.8 1,065.6 1,051.4 1,044.7 16 Revolving home equity 112.7 133.0 136.9 140.0 142.5 147.9 150.5 152.8 151.4 152.3 153.0 153.9 17 Other 741.7 837.3 853.7 866.7 885.9 887.3 890.9 903.9 912.4 913.3 898.3 890.8 18 Consumer 289.1 296.6 296.8 296.9 294.9 291.4 289.9 290.1 289.0 290.1 290.3 290.0 19 Security3 82.0 73.1 71.3 63.1 64.5 63.6 63.8 71.7 67.1 73.1 74.3 71.5 20 Federal funds sold to and repurchase agreements with broker-dealers 69.8 62.3 60.9 52.4 53.8 52.2 52.0 58.0 54.0 58.7 60.8 5566..88 21 Other 12.2 10.8 10.4 10.6 10.7 11.4 11.8 13.8 13.2 14.4 13.6 14.7 22 State and local government 13.1 12.2 11.9 12.0 12.3 12.5 12.4 12.4 12.3 12.4 12.4 12.5 23 Agricultural 9.3 8.2 8.2 8.1 7.8 7.8 7.7 7.5 7.5 7.5 7.5 7.4 24 Federal funds sold to and repurchase agreements with others 19.5 18.9 24.7 23.6 23.6 23.2 24.4 26.2 23.3 28.1 26.6 2266..55 25 All other loans 67.7 73.9 74.4 75.4 75.1 76.6 87.6 88.9 86.7 87.7 91.4 91.3 26 Lease-financing receivables 128.7 123.9 120.9 119.0 118.7 118.3 117.3 117.4 117.3 117.4 117.4 117.6 27 Interbank loans 176.6 185.5 183.2 157.0 153.5 162.5 161.6 161.4 165.4 173.7 156.9 152.3 28 Federal funds sold to and repurchase agreements with commercial banks 91.0 91.1 88.7 88.2 83.4 91.9 90.5 92.1 94.7 104.0 86.2 8844..33 79 Other 85.6 94.4 94.5 68.8 70.1 70.6 71.1 69.3 70.7 69.8 70.7 68.0 30 Cash assets4 143.4 146.8 147.9 147.6 149.0 149.3 141.2 138.5 136.9 137.1 133.4 150.2 31 Other assets5 315.1 333.8 330.3 327.1 347.0 339.9 339.8 349.6 346.1 345.8 350.4 354.1 32 Total assets6 3,229.5 3,453.8 3,478.9 3,445.7 3,510.0 3,509.2 3,521.2 3,592.7 3,573.6 3,604.1 3,580.3 3,605.3 Liabilities 33 Deposits 1,829.7 1,943.4 1,952.4 1,962.3 1,962.9 1,981.5 2,005.6 2,012.4 2,004.9 2,027.7 1,998.0 2,015.6 34 Transaction 296.6 285.8 289.1 286.3 288.5 288.8 293.8 294.9 274.9 298.9 297.6 317.7 35 Nontransaction 1,533.1 1,657.6 1,663.4 1,675.9 1,674.4 1,692.7 1,711.8 1,717.5 1,730.0 1,728.8 1,700.4 1,697.9 36 Large time 249.4 265.4 261.4 269.7 272.4 267.8 266.0 277.8 278.4 276.3 277.1 280.1 37 Other 1,283.7 1,392.2 1,402.0 1,406.2 1,402.0 1,424.9 1,445.9 1,439.7 1,451.6 1,452.5 1,423.3 1,417.9 38 Borrowings 722.2 741.7 730.4 655.1 682.2 688.5 686.2 703.5 690.3 702.1 698.7 715.9 39 From banks in the U.S 250.6 269.4 249.4 193.6 196.2 204.7 208.9 200.2 202.4 201.5 194.3 197.3 40 From others 471.6 472.3 481.1 461.4 485.9 483.8 477.4 503.3 487.9 500.6 504.4 518.6 41 Net due to related foreign offices 168.5 185.0 199.7 216.4 216.5 218.5 215.2 226.3 239.8 221.8 225.8 225.3 42 Other liabilities 205.0 265.4 276.0 274.6 278.7 273.7 282.0 290.0 283.2 294.2 293.8 284.3 43 Total liabilities 2,925.4 3,135.4 3,158.6 3,108.3 3,140.2 3,162.3 3,189.0 3,232.1 3,218.2 3,245.9 3,216.3 3,241.2 44 Residual (assets less liabilities)7 304.1 318.3 320.3 337.4 369.8 346.9 332.3 360.6 355.4 358.2 364.0 364.1 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Nonfinancial Statistics • August 2003 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities '—Continued C. Large domestically chartered commercial banks—Continued Billions of dollars Monthly averages Wednesday figures AAAccccccooouuunnnttt 2002 2002 2003 2003 Mayr Nov.r Dec.' Jan.' Feb/ Mar.r Apr/ May May 7 May 14 May 21 May 28 Not seasonally adjusted Assets 45 Bank credit 2,639.6 2,840.5 2,873.8 2,866.0 2,907.3 2,896.3 2,919.2 2,989.1 2,975.2 2,992.0 2,982.4 2,989.8 46 Securities in bank credit 663.6 774.0 784.0 781.7 812.5 804.1 805.0 853.6 838.4 844.9 849.0 866.7 47 U.S. government securities 390.1 457.8 459.8 462.8 483.9 477.3 490.2 517.3 509.4 510.8 514.1 526.4 48 Trading account 42.8 48.2 44.9 41.5 55.1 42.1 40.6 43.5 37.7 60.5 35.2 40.3 49 Investment account 347.3 409.6 414.9 421.3 428.9 435.3 449.6 473.8 471.7 450.2 478.9 486.1 50 Mortgage-backed securities . 272.9 325.5 317.8 323.8 330.0 333.2 352.9 378.7 379.2 356.7 383.5 388.7 51 Other 74.4 84.1 97.1 97.5 98.8 102.0 96.7 95.0 92.5 93.6 95.4 97.4 52 One year or less 16.0 23.2 24.1 21.3 22.9 24.4 24.6 23.2 22.6 23.8 23.1 23.2 53 One to five years 45.4 47.4 56.6 58.6 57.4 57.4 55.2 55.2 54.5 54.9 55.1 55.8 54 More than five years .... 13.0 13.6 16.4 17.5 18.6 20.3 16.9 16.7 15.4 14.9 17.2 18.3 55 Other securities 273.5 316.2 324.3 318.9 328.5 326.8 314.8 336.3 329.1 334.1 334.9 340.4 56 Trading account 140.2 161.8 166.1 162.9 174.1 171.7 160.5 183.2 176.4 180.7 181.1 187.8 57 Investment account 133.3 154.5 158.1 156.0 154.4 155.1 154.3 153.1 152.7 153.4 153.8 152.6 58 State and local government . 26.9 29.4 29.7 30.0 29.8 30.1 30.7 31.3 30.9 31.2 31.4 31.6 59 Other 106.4 125.0 128.4 126.1 124.6 125.0 123.6 121.8 121.8 122.2 122.4 121.0 60 Loans and leases in bank credit2 . . . 1,976.0 2,066.5 2,089.8 2,084.3 2,094.9 2,092.2 2,114.2 2,135.5 2,136.7 2,147.1 2,133.4 2,123.0 61 Commercial and industrial 513.7 485.8 480.9 476.2 473.8 471.9 472.2 464.5 468.2 465.6 464.4 462.4 62 Bankers acceptances .0 .0 .0 .0 .0 .0 .0 .0 n.a. n.a. n.a. n.a. 63 Other 513.7 485.8 480.9 476.2 473.8 471.9 472.2 464.5 468.2 465.6 464.4 462.4 64 Real estate 857.9 973.0 991.9 1,005.6 1,024.1 1,028.3 1,039.5 1,061.1 1,068.1 1,071.4 1,055.0 1,048.2 65 Revolving home equity 113.5 132.7 136.0 139.1 142.8 146.2 150.4 154.0 152.7 153.4 154.2 154.9 66 Other 427.8 520.5 536.6 546.2 561.0 561.7 570.5 589.1 596.8 599.6 582.9 575.7 67 Commercial 316.5 319.8 319.3 320.2 320.2 320.4 318.6 318.0 318.6 318.3 317.9 317.5 68 Consumer 289.8 295.3 299.3 301.7 298.1 292.0 290.5 291.0 290.0 291.0 291.1 291.0 69 Credit cards and related plans . 116.2 114.6 117.3 115.3 109.7 105.9 103.5 103.8 103.0 103.3 102.9 105.1 70 Other 173.6 180.6 182.0 186.4 188.3 186.1 187.0 187.1 187.0 187.7 188.2 185.9 71 Security3 76.8 75.1 75.2 62.6 63.5 63.1 62.5 67.1 63.4 67.3 69.1 66.8 72 Federal funds sold to and repurchase agreements with broker-dealers 65.3 64.0 64.3 52.1 52.9 51.8 50.9 54.3 50.9 54.0 56.5 53.1 73 Other 11.4 11.1 10.9 10.6 10.6 11.3 11.6 12.9 12.4 13.3 12.6 13.7 74 State and local government 13.1 12.2 11.9 12.0 12.3 12.5 12.4 12.4 12.3 12.4 12.4 12.5 75 Agricultural 9.4 8.1 8.2 8.2 7.8 7.8 7.6 7.5 7.5 7.5 7.5 7.5 76 Federal funds sold to and repurchase agreements with others 19.5 18.9 24.7 23.6 23.6 23.2 24.4 26.2 23.3 28.1 26.6 26.5 77 All other loans 67.3 74.8 76.5 73.6 71.7 74.4 87.4 88.3 86.5 86.3 89.8 90.8 78 Lease-financing receivables 128.7 123.3 121.2 120.8 120.0 119.1 117.7 117.4 117.6 117.4 117.4 117.4 79 Interbank loans 177.4 187.0 187.7 160.2 151.8 162.6 164.9 162.1 165.9 173.9 155.7 154.3 80 Federal funds sold to and repurchase agreements with commercial banks 91.4 91.8 90.9 90.0 82.5 92.0 92.4 92.5 95.0 104.1 85.6 85.3 81 Other 86.0 95.2 96.8 70.2 69.3 70.6 72.5 69.6 70.9 69.9 70.2 68.9 82 Cash assets4 142.6 149.9 159.6 156.4 148.9 144.2 144.0 137.5 134.7 135.2 124.8 156.4 83 Other assets5 313.1 337.3 334.1 329.5 344.0 338.3 339.3 347.4 349.2 346.8 345.2 346.7 84 Total assets6 3,228.1 3,470.6 3,511.3 3,467.7 3,506.9 3,496.3 3,523.6 3,591.8 3,580.4 3,603.5 3,563.6 3,602.8 Liabilities 85 Deposits 1,825.5 1,950.2 1,968.9 1,963.2 1,966.9 1,979.6 2,013.0 2,008.0 2,002.8 2,022.3 1,983.4 2,010.2 86 Transaction 292.5 289.7 309.4 295.2 284.2 284.4 300.0 290.6 269.2 294.4 286.3 318.0 87 Nontransaction 1,533.0 1,660.6 1,659.5 1,668.0 1,682.7 1,695.2 1,713.1 1,717.4 1,733.7 1,727.8 1,697.1 1,692.2 88 Large time 247.8 269.4 264.3 271.0 273.3 266.4 264.1 276.0 276.7 273.5 275.0 278.1 89 Other 1,285.2 1,391.2 1,395.2 1,397.0 1,409.4 1,428.8 1,449.0 1,441.4 1,457.0 1,454.3 1,422.1 1,414.0 90 Borrowings 727.5 743.0 729.6 668.2 684.4 684.8 690.4 709.2 708.3 711.3 698.0 713.4 91 From banks in the U.S 252.8 266.1 251.1 198.2 199.7 208.1 213.0 202.6 208.4 205.0 195.0 196.9 92 From nonbanks in the U.S 474.7 476.9 478.4 470.0 484.6 476.7 477.4 506.6 499.9 506.3 503.0 516.5 93 Net due to related foreign offices 168.0 190.2 204.2 218.0 220.8 214.2 205.9 225.4 234.7 219.4 225.7 229.0 94 Other liabilities 204.2 272.4 281.8 276.6 284.1 268.5 269.8 288.9 277.3 291.1 293.6 288.8 95 Total liabilities 2,925.2 3,155.8 3,184.5 3,125.9 3,156.1 3,147.1 3,179.1 3,231.5 3,223.1 3,244.1 3,200.7 3,241.3 96 Residual (assets less liabilities)7 302.9 314.8 326.9 341.8 350.7 349.1 344.4 360.3 357.4 359.4 363.0 361.5 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities 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 Mayr Nov/ Dec/ Jan/ Feb/ Mar/ Apr.' May May 7 May 14 May 21 May 28 Seasonally adjusted Assets 1 Bank credit 2,258.7 2,385.6 2,397.4 2,402.5 2,419.2 2,434.8 2,455.4 2,466.7 2,459.7 2,465.6 2,466.9 2,470.0 7 Securities in bank credit 635.0 661.9 668.1 666.6 668.5 678.3 689.8 689.3 688.9 691.3 689.0 687.8 3 U.S. government securities 425.5 455.9 461.1 459.0 462.0 472.0 484.7 484.1 486.1 485.7 482.4 481.5 4 Other securities 209.5 206.0 207.0 207.7 206.5 206.2 205.1 205.2 202.7 205.5 206.5 206.3 Loans and leases in bank credit2 .... 1,623.7 1,723.7 1,729.3 1,735.8 1,750.7 1,756.6 1,765.6 1,777.4 1,770.9 1,774.3 1,777.9 1,782.2 6 Commercial and industrial 293.0 303.4 304.1 303.5 305.3 306.0 305.9 305.9 305.1 305.5 305.9 306.8 7 Real estate 946.1 1,017.7 1,019.8 1,021.7 1,032.7 1,039.7 1,050.6 1,058.2 1,054.5 1,057.3 1,058.9 1,059.0 8 Revolving home equity 66.2 76.2 77.0 77.7 79.7 81.4 82.8 84.1 83.2 83.6 84.2 84.5 9 Other 879.9 941.5 942.9 944.0 953.0 958.3 967.8 974.1 971.4 973.7 974.7 974.5 in Consumer 279.4 288.9 291.3 295.0 296.9 295.5 294.0 297.8 296.1 296.9 297.9 300.1 ii Security3 6.8 8.0 8.0 8.4 8.6 8.6 8.6 9.1 9.0 9.0 9.0 9.3 l?. Other loans and leases 98.3 105.6 106.0 107.2 107.2 106.8 106.5 106.3 106.0 105.6 106.2 107.0 n Interbank loans 87.8 114.6 115.1 122.2 124.4 124.2 121.5 132.6 128.0 130.4 132.8 138.2 14 Cash assets4 113.1 126.3 124.4 126.0 130.6 133.5 135.5 134.5 133.9 134.1 136.7 136.3 15 Other assets5 141.2 141.8 141.8 141.7 144.9 147.0 149.7 157.0 158.2 157.5 155.4 156.0 16 Total assets6 2,570.0 2,736.2 2,746.4 2,760.3 2,787.5 2,808.1 2,831.0 2,859.4 2,848.5 2,856.3 2,860.4 2,869.0 Liabilities 17 Deposits 2,016.7 2,113.3 2,109.5 2,118.1 2,129.7 2,155.7 2,171.4 2,195.3 2,184.3 2,196.9 2,189.4 2,204.3 18 Transaction 302.8 310.9 313.0 311.9 315.0 319.3 327.2 327.5 315.3 324.5 331.8 344.3 19 Nontransaction 1,713.9 1,802.5 1,796.4 1,806.2 1,814.6 1,836.4 1,844.2 1,867.8 1,869.0 1,872.4 1,857.5 1,860.0 20 Large time 299.6 306.0 308.4 307.8 311.1 315.7 316.1 317.5 315.5 317.5 317.2 318.7 21 Other 1,414.3 1,496.4 1,488.0 1,498.4 1,503.6 1,520.7 1,528.1 1,550.3 1,553.4 1,554.9 1,540.3 1,541.3 22 Borrowings 328.7 373.2 388.9 407.1 410.6 407.4 412.8 420.9 429.1 417.0 423.8 417.3 23 From banks in the U.S 112.1 127.3 138.1 156.2 160.8 159.1 161.0 157.9 159.0 155.5 160.7 158.4 24 From others 216.6 245.9 250.8 250.8 249.8 248.3 251.8 263.0 270.1 261.5 263.2 259.0 25 Net due to related foreign offices 11.6 11.3 12.4 15.1 12.6 10.7 12.8 12.4 14.3 10.9 12.1 12.7 26 Other liabilities 63.1 66.8 64.3 71.4 76.5 80.3 81.2 83.6 79.7 83.3 85.0 85.9 27 Total liabilities 2,420.1 2,564.6 2,575.1 2,611.7 2,629.3 2,654.1 2,678.3 2,712.2 2,707.3 2,708.1 2,710.3 2,720.3 28 Residual (assets less liabilities)7 149.9 171.6 171.3 148.6 158.2 154.0 152.7 147.1 141.2 148.2 150.1 148.8 Not seasonally adjusted Assets 29 Bank credit 2,257.1 2,389.1 2,408.9 2,404.5 2,416.1 2,431.5 2,453.6 2,465.1 2,458.7 2,465.5 2,465.5 2,467.3 30 Securities in bank credit 634.3 660.8 669.7 668.4 669.4 680.9 691.3 688.5 688.6 690.9 687.9 686.8 31 U.S. government securities 424.8 454.7 462.6 460.7 462.8 474.7 486.2 483.3 485.9 485.4 481.3 480.5 32 Other securities 209.5 206.0 207.0 207.7 206.5 206.2 205.1 205.2 202.7 205.5 206.5 206.3 33 Loans and leases in bank credit2 .... 1,622.9 1,728.3 1,739.3 1,736.1 1,746.7 1,750.6 1,762.3 1,776.6 1,770.0 1,774.6 1,777.6 1,780.6 34 Commercial and industrial 295.5 301.9 303.9 302.1 303.8 305.9 308.1 308.5 308.0 308.3 308.4 309.0 35 Real estate 945.7 1,019.5 1,023.1 1,023.2 1,032.8 1,037.6 1,048.8 1,057.7 1,053.4 1,057.1 1,058.8 1,058.8 36 Revolving home equity 66.3 76.4 77.4 77.9 79.7 81.0 82.6 84.1 83.3 83.8 84.2 84.5 37 Other 879.4 943.1 945.7 945.3 953.0 956.6 966.3 973.6 970.1 973.4 974.7 974.3 38 Consumer 277.1 292.7 297.7 297.8 296.9 292.6 290.6 295.7 293.8 295.3 296.3 298.0 39 Credit cards and related plans . . 106.4 116.9 121.2 118.7 116.1 113.8 111.7 116.6 115.4 116.4 117.0 118.5 40 Other 170.7 175.8 176.5 179.1 180.8 178.9 178.9 179.1 178.4 178.9 179.4 179.5 41 Security3 6.7 8.3 8.2 8.1 8.5 8.8 8.8 9.0 9.0 8.8 8.7 8.9 42 Other loans and leases 97.9 106.0 106.3 104.9 104.7 105.7 106.0 105.7 105.8 105.0 105.3 105.8 43 Interbank loans 84.1 118.1 117.7 115.8 123.4 130.7 129.4 127.5 128.7 124.9 124.2 126.9 44 Cash assets4 112.2 130.5 131.8 130.2 130.2 128.8 133.2 133.4 131.6 130.9 130.3 140.9 45 Other assets5 141.2 141.8 141.8 141.7 144.9 147.0 149.7 157.0 158.2 157.5 155.4 156.0 46 Total assets6 2,563.9 2,747.4 2,767.8 2,760.0 2,782.9 2,806.7 2,834.7 2,851.6 2,845.9 2,847.4 2,844.1 2,859.7 Liabilities 47 Deposits 2,009.1 2,121.4 2,132.9 2,124.4 2,136.4 2,160.7 2,183.2 2,187.3 2,184.8 2,189.1 2,172.7 2,191.2 48 Transaction 297.6 314.3 324.7 316.8 311.7 315.6 327.6 322.1 310.9 317.5 320.8 340.6 49 Nontransaction 1,711.5 1,807.1 1,808.2 1,807.5 1,824.7 1,845.1 1,855.6 1,865.2 1,873.9 1,871.6 1,852.0 1,850.6 50 Large time 299.6 306.0 308.4 307.8 311.1 315.7 316.1 317.5 315.5 317.5 317.2 318.7 51 Other 1,411.9 1,501.1 1,499.8 1,499.7 1,513.6 1,529.4 1,539.5 1,547.7 1,558.4 1,554.1 1,534.7 1,532.0 52 Borrowings 328.7 373.2 388.9 407.1 410.6 407.4 412.8 420.9 429.1 417.0 423.8 417.3 53 From banks in the U.S 112.1 127.3 138.1 156.2 160.8 159.1 161.0 157.9 159.0 155.5 160.7 158.4 54 From others 216.6 245.9 250.8 250.8 249.8 248.3 251.8 263.0 270.1 261.5 263.2 259.0 55 Net due to related foreign offices 11.6 11.3 12.4 15.1 12.6 10.7 12.8 12.4 14.3 10.9 12.1 12.7 56 Other liabilities 63.1 66.8 64.3 71.4 76.5 80.3 81.2 83.6 79.7 83.3 85.0 85.9 57 Total liabilities 2,412.6 2,572.7 2,598.6 2,617.9 2,636.0 2,659.1 2,690.0 2,704.2 2,707.9 2,700.3 2,693.6 2,707.2 58 Residual (assets less liabilities)7 151.3 174.8 169.3 142.1 146.9 147.6 144.7 147.4 138.0 147.1 150.5 152.5 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Nonfinancial Statistics • August 2003 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued E. Foreign-related institutions Billions of dollars Monthly averages Wednesday figures Account 2002 2002 2003 2003 May Nov. Dec. Jan.' Feb.' Mar.' Apr.' May May 7 May 14 May 21 May 28 Seasonally adjusted Assets 1 Bank credit 594.9r 620.0' 635.9' 628.0 640.9 657.8 650.3 661.7 653.2 659.0 659.8 670.2 2 Securities in bank credit 229.5' 247.8' 261.6' 262.9 273.3 277.8 271.3 282.3 274.7 280.3 284.5 286.8 3 U.S. government securities 73.2 93.5 101.9' 103.8 110.6 116.4 118.9 124.3 120.1 122.4 125.6 128.1 4 Other securities 156.3' 154.3' 159.7' 159.1 162.7 161.4 152.5 158.0 154.6 157.9 158.9 158.7 5 Loans and leases in bank credit2 .... 365.4 372.2 374.3 365.1 367.6 380.0 379.0 379.4 378.5 378.7 375.3 383.4 6 Commercial and industrial 195.9 179. Of 178.4 177.2 174.1 171.7 172.2 169.5 171.2 171.4 169.6 168.5 7 Real estate 18.1 20.0 19.5 19.7 19.7 19.8 19.0 19.2 19.2 19.2 19.2 19.2 8 Security3 81.1 104.7 110.1 103.4 108.1 122.0 121.0 118.5 116.9 117.9 115.5 121.6 9 Other loans and leases 70.3' 68.6 66.3' 64.8 65.6 66.5 66.8 72.2 71.2 70.2 71.1 74.1 10 Interbank loans 23.3 25.5 30.0 28.1 27.0 27.5 24.0 24.7 24.0 23.0 23.9 26.5 11 Cash assets4 46.0 42.3 44.6 40.1 38.7 43.0 45.2 52.2 50.2 51.8 52.3 53.8 12 Other assets5 26.1 34.6 35.9 39.3 39.9 35.0 38.0 47.5 44.8 48.5 45.1 50.1 13 Total assets6 689.8r 722.0r 746.1r 735.1 746.1 762.9 757.1 785.6 771.7 781.8 780.7 800.2 Liabilities 14 Deposits 503.8 452.6 425.5 426.6 442.9 448.4 436.3 438.7 432.1 439.0 439.0 439.9 15 Transaction 10.6 9.2 9.2 9.7 10.3 11.5 11.3 11.0 11.7 10.6 10.7 11.1 16 Nontransaction 493.2 443.3 416.4' 416.8 432.6 436.9 425.0 427.7 420.4 428.5 428.4 428.8 17 Borrowings 189.4 251.2 277.9' 269.1 270.0 288.3 294.0 301.8 300.3 294.0 295.3 311.8 18 From banks in the U.S 20.6 25.2 30.0 31.0 31.1 33.7 27.5 31.8 31.2 31.0 31.0 32.6 19 From others 168.8 226.0 247.9 238.1 238.9 254.6 266.4 270.1 269.1 263.0 264.3 279.1 20 Net due to related foreign offices -91.7' -74.3' -60.1' -70.4 -78.4 -84.4 -76.6 -77.8 -75.9 -77.5 -78.4 -76.0 21 Other liabilities 74.3 99.3 102.1 100.5 104.8 99.9 95.2 109.9 103.8 113.3 111.1 109.6 22 Total liabilities 675.9r 728.8r 745.6r 725.7 739.2 752.2 749.0 772.7 760.3 768.8 767.1 785.2 23 Residual (assets less liabilities)7 14.0' -6.8' .5' 9.4 6.9 10.7 8.1 12.9 11.5 13.0 13.6 15.0 Not seasonally adjusted Assets 24 Bank credit 590.6' 623.6' 646.0' 635.7 645.3 656.0 650.2 657.0 650.1 654.9 653.1 665.8 25 Securities in bank credit 229.5' 247.8' 261.6' 262.9 273.3 277.8 271.3 282.3 274.7 280.3 284.5 286.8 26 U.S. government securities 73.2 93.5 101.9' 103.8 110.6 116.4 118.9 124.3 120.1 122.4 125.6 128.1 27 Trading account 10.1 20.3 30.6 32.6 36.4 37.1 39.5 43.0 42.1 40.7 42.5 45.2 28 Investment account 63.1 73.2 71.3 71.2 74.2 79.3 79.4 81.4 78.0 81.7 83.1 82.9 29 Other securities 156.3' 154.3' 159.7' 159.1 162.7 161.4 152.5 158.0 154.6 157.9 158.9 158.7 30 Trading account 99.9' 100.4 101.2' 101.9 102.0 101.7 98.1 105.1 102.2 105.0 105.9 105.9 31 Investment account 56.4' 53.9' 58.4' 57.2 60.7 59.7 54.3 52.9 52.3 53.0 53.0 52.8 32 Loans and leases in bank credit2 .... 361.2 375.8 384.3 372.8 372.0 378.2 378.9 374.7 375.5 374.6 368.6 379.0 33 Commercial and industrial 193.8 180.3 179.8 177.3 175.6 173.2 171.3 167.7 169.5 169.6 167.6 166.2 34 Real estate 18.1 20.0 19.5 19.7 19.7 19.8 19.0 19.2 19.2 19.2 19.2 19.2 35 Security3 79.5 106.8 116.7 110.4 111.0 117.7 121.3 116.2 116.1 116.0 111.9 120.0 36 Other loans and leases 69.8 68.7' 68.3 65.5 65.7 67.4 67.2 71.6 70.7 69.9 70.0 73.6 37 Interbank loans 23.3 25.5 30.0 28.1 27.0 27.5 24.0 24.7 24.0 23.0 23.9 26.5 38 Cash assets4 44.5 44.7 47.8 43.1 39.7 41.9 43.2 50.5 48.5 50.4 50.2 52.1 39 Other assets5 26.2 34.5 37.0 40.7 40.5 35.8 37.8 47.7 45.4 49.4 45.1 49.7 40 Total assets6 684.2r 727.9r 760.4r 747.2 752.1 760.8 754.8 779.3 767.6 777.3 771.8 793.6 Liabilities 41 Deposits 510.2 452.7 436.4' 442.7 453.0 452.5 442.3 444.1 439.0 444.0 443.3 446.4 42 Transaction 10.2 9.5 10.0 10.0 10.3 11.1 10.7 10.6 11.1 10.1 10.1 10.9 43 Nontransaction 500.0 443.1 426.4 432.7 442.8 441.3 431.6 433.6 427.8 434.0 433.2 435.6 44 Borrowings 189.4 251.2 277.9' 269.1 270.0 288.3 294.0 301.8 300.3 294.0 295.3 311.8 45 From banks in the U.S 20.6 25.2 30.0 31.0 31.1 33.7 27.5 31.8 31.2 31.0 31.0 32.6 46 From others 168.8 226.0 247.9 238.1 238.9 254.6 266.4 270.1 269.1 263.0 264.3 279.1 47 Net due to related foreign offices -91.3' -75.6' -58.4' -67.8 -77.3 -82.2 -77.0 -77.4 -76.0 -76.0 -78.4 -75.3 48 Other liabilities 74.5 98.4 103.3 102.2 105.7 101.5 94.9 110.2 103.8 114.7 111.1 110.1 49 Total liabilities 682.9r 726.7r 759.3r 746.2 751.4 760.1 754.2 778.7 767.1 776.7 771.3 793.0 50 Residual (assets less liabilities)7 1.3' 1.3' 1.1' 1.0 .8 .6 .6 .6 .6 .6 .6 .6 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities 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 May Nov. Dec. Jan. Feb.' Mar.' Apr. May May 7 May 14 May 21 May 28 Not seasonally adjusted MEMO Large domestically chartered banks, adjusted for mergers 1 Revaluation gains on off-balance-sheet items8 80.8 105.2 112.5 107.6 116.8 115.1 105.7 128.1 120.5 127.2 128.8 130.2 2 Revaluation losses on off-balancesheet items8 62.2 89.0 93.8 86.2 94.9 91.3 81.4 105.1 97.6 105.2 106.4 106.8 3 Mortgage-backed securities9 307.3' 371.2' 363.9' 369.6' 375.6 380.0 399.3 425.6 425.4 403.8 430.8 435.4 4 Pass-through 210.8 274.6 265.7 271.2 276.5 275.8 288.1' 313.8 312.2 290.7 320.1 326.1 5 CMO, REMIC, and other 96.6' 96.6' 98.2' 98.4' 99.1 104.1 111.2 111.8 113.3 113.0 110.7 109.4 6 Net unrealized gains (losses) on available-for-sale securities10 4.3 11.3 10.7 11.8' 11.7 11.7 10.6' 12.1 11.5 11.5 12.2 12.1 7 Off-shore credit to U.S. residents" .... 19.6 18.5 18.7 18.3 18.2 18.2 17.5 17.3 17.2 17.2 17.5 17.4 8 Securitized consumer loans12 135.8 148.5 150.1 149.7 150.6 152.5 154.2 155.0 154.3 154.1 155.0 156.1 9 Credit cards and related plans 122.3 131.4 133.2 132.2 134.8 136.7 138.7 139.4 139.3 139.2 140.1 139.3 10 Other 13.5 17.0 16.9 17.5 15.8 15.8 15.5 15.5 15.0 14.9 14.9 16.8 11 Securitized business loans12 17.1 17.4 17.2 16.9 17.2 16.8 16.5 17.0 17.1 17.1 17.0 16.6 Small domestically chartered commercial banks, adjusted for 12 Mortgage-backed securities9 293.9' 307.0' 310.5' 310.0' 315.8 327.1 336.5' 335.2 338.2 338.2 333.7 331.3 13 Securitized consumer loans12 207.6 198.7 201.3 205.4' 204.2 202.8 205.2' 205.0 205.4 204.5 204.2 205.4 14 Credit cards and related plans 200.0 189.8 192.5 197.01 195.8 194.3 196.9' 196.8 197.1 196.3 196.0 197.2 15 Other 7.6 8.9 8.7 8.5 8.4 8.5 8.3 8.2 8.2 8.2 8.2 8.2 Foreign-related institutions 16 Revaluation gains on off-balancesheet items8 50.0 63.3 64.1 67.0' 67.1 65.2 63.8' 73.5 70.8 73.5 74.7 74.2 17 Revaluation losses on off-balancesheet items8 42.8 60.3 60.1 63.0' 64.9 63.4 61.6' 72.6 68.5 72.5 74.3 73.6 18 Securitized business loans12 10.5 7.2 6.8 5.6 4.6 4.1 3.3' 3.0 3.0 3.0 3.0 2.9 NOTE. Tables 1.26, 1.27, and 1.28 have been revised to reflect changes in the Board's H.8 acquiring bank. Balance sheet data for acquired banks are obtained from Call Reports, and a statistical release, "Assets and Liabilities of Commercial Banks in the United States." Table ratio procedure is used to adjust past levels. 1.27, "Assets and Liabilities of Large Weekly Reporting Commercial Banks," and table 1.28, 2. Excludes federal funds sold to, reverse RPs with, and loans made to commercial banks "Large Weekly Reporting U.S. Branches and Agencies of Foreign Banks," are no longer in the United States, all of which are included in "Interbank loans." being published in the Bulletin. Instead, abbreviated balance sheets for both large and small 3. Consists of reverse RPs with brokers and dealers and loans to purchase and carry domestically chartered banks have been included in table 1.26, parts C and D. Data are both securities. merger-adjusted and break-adjusted. In addition, data from large weekly reporting US. 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 NonfinancialS tatistics • August 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 Nov.r Dec/ Jan/ Feb/ Mar/ Apr. 1 All issuers 1,163,303 1,403,023 1,619,274 1,458,870 1,347,997 1,377,217 1,347,997 1,373,133 1,346,782 1,341,270 1,342,147 Financial companies1 2 Dealer-placed paper, total2 614,142 786,643 963,070 967,748 976,163 1,008,028 976,163 983,059 952,868 946,773 961,002 3 Directly placed paper, total3 322,030 337,240 312,771 266,276 217,787 211,574 217,787 236,820 239,037 244,504 232,879 4 Nonfinancial companies4 227,132 279,140 343,433 224,847 154,047 157,615 154,047 153,254 154,876 149,993 148,266 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 2000—Jan. 1 8.50 2000 9.23 2001—Jan. 9.05 2002—Jan. Feb. 3 8.75 2001 6.91 Feb. 8.50 Feb. Mar. 22 9.00 2002 4.67 Mar. 8.32 Mar. May 17 9.50 Apr. 7.80 Apr. 2000—Jan 8.50 May 7.24 May 2001—Jan. 4 9.00 Feb 8.73 June 6.98 June Feb. 1 8.50 Mar. 8.83 July 6.75 July Mar. 21 8.00 Apr 9.00 Aug. 6.67 Aug. Apr. 19 7.50 May 9.24 Sept. 6.28 Sept. May 16 7.00 June 9.50 Oct. 5.53 Oct. June 28 6.75 July 9.50 Nov. 5.10 Nov. Aug. 22 6.50 Aug 9.50 Dec. 4.84 Dec. Sept. 18 6.00 Sept 9.50 Oct. 3 5.50 Oct 9.50 2003—Jan. Nov. 7 5.00 Nov 9.50 Feb. Dec. 12 4.75 Dec 9.50 Mar. Apr. 2002—Nov. 7 4.25 May June 2003—June 27 4.00 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 2003 2003, week ending IItteemm 22000000 22000011 22000022 Feb. Mar. Apr. May May 2 May 9 May 16 May 23 May 30 MONEY MARKET INSTRUMENTS 1 Federal f nd 12 3 66..2244 33..8888 11..6677 11..2266 1 25 11..2266 1 26 1.28 1.26 1.25 1.27 1.24 22..2255 2.25 22..2255 2.25 2.25 2.25 2.25 2.25 2.25 Commercial paper3-5-6 Nonfinancial 6.27 3.78 1.67 1.24 1.21 1.22 1.21 1.22 1.20 1.22 1.21 1.23 6.29 3.68 1.67 1.25 1.20 1.21 1.20 1.21 1.20 1.20 1.19 1.20 6.31 3.65 1.69 1.26 1.19 1.20 1.19 1.20 1.19 1.19 1.18 1.21 Financial 6.28 3.80 1.68 1.25 1.23 1.24 1.24 1.24 1.24 1.24 1.23 1.24 6.30 3.71 1.69 1.25 1.22 1.23 1.22 1.24 1.22 1.23 1.21 1.22 6.33 3.65 1.70 1.25 1.21 1.23 1.20 1.24 1.21 1.21 1.19 1.20 Certificates of deposit, secondary market3-1 6.35 3.84 1.72 1.27 1.25 1.26 1.26 1.26 1.25 1.26 1.26 1.26 6.46 3.71 1.73 1.27 1.23 1.24 1.22 1.24 1.23 1.23 1.21 1.22 6.59 3.66 1.81 1.27 1.20 1.23 1.19 1.22 1.21 1.21 1.16 1.17 6.45 3.70 1.73 1.26 1.21 1.23 1.21 1.23 1.22 1.22 1.19 1.20 U.S. Treasury bills Secondary market3,5 2.43 1.60 1.18 1.16 1.14 1.06 1.09 1.06 0.98 1.07 1.17 5.82 3.40 11..6611 1.17 1.13 1.13 1.07 1.11 1.09 1.05 1.04 1.09 55..9900 33..3344 11..6688 11..1188 1.13 1.14 1.08 1.13 1.11 1.08 1.05 1.07 U.S. TREASURY NOTES AND BONDS Constant maturities9 6.11 3.49 2.00 1.30 1.24 1.27 1.18 1.25 1.23 1.20 1.13 1.13 6.26 3.83 2.64 1.63 1.57 1.62 1.42 1.56 1.48 1.44 1.36 1.33 18 3-year 6.22 4.09 3.10 2.05 1.98 2.06 1.75 1.99 1.86 1.76 1.65 1.60 6.16 4.56 3.82 2.90 2.78 2.93 2.52 2.88 2.70 2.52 2.35 2.32 20 7-year 6.20 4.88 4.30 3.45 3.34 3.47 3.07 3.42 3.25 3.07 2.90 2.90 21 10-year 6.03 5.02 4.61 3.90 3.81 3.96 3.57 3.92 3.77 3.56 3.38 3.39 22 20-year 6.23 5.63 5.43 4.87 4.82 4.91 4.52 4.82 4.70 4.51 4.34 4.38 Treasury long-term average'0,n nn..aa.. nn..aa.. 55..4411 44..9933 4.90 44..9999 4.61 4.90 4.81 4.62 4.42 4.46 STATE AND LOCAL NOTES AND BONDS Moody's series12 5.58 5.01' 4.87 4.57 4.51 4.60 4.16 4.33 4.06 4.32 4.10 3.98 25 Baa 6.19 5.75 5.64 5.48 5.32 5.34 4.91 5.20 4.99 4.90 4.84 4.63 55..7711 55..1155 55..0044 44..8811 4.76 4.74 4.41 4.58 4.50 4.35 4.30 4.31 CORPORATE BONDS 7.98 7.49 7.10 6.50 6.42 6.32 5.88 6.16 6.03 5.88 5.73 5.75 Rating group 28 Aaa15 7.62 7.08 6.49 5.95 5.89 5.74 5.22 5.56 5.42 5.23 5.01 5.05 29 Aa 7.83 7.26 6.93 6.34 6.28 6.22 5.85 6.09 5.97 5.84 5.72 5.74 30 A 8.11 7.67 7.18 6.63 6.54 6.45 6.08 6.33 6.20 6.08 5.95 5.97 31 Baa 8.37 7.95 7.80 7.06 6.95 6.85 6.38 6.68 6.52 6.39 6.23 6.24 MEMO Dividend-price ratio16 11..1155 11..3322 11..6611 11..9911 1.92 1.81 1.72 1.74 1.73 1.72 1.74 1.70 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 discounts made and advances extended under the Federal Re- ltcompositeindex.html. serve's primary credit discount window program, which became effective January 9, 2003. 12. General obligation bonds based on Thursday figures; Moody's Investors Service. This rate replaces that for adjustment credit, which was discontinued after January 8, 2003. 13. State and local government general obligation bonds maturing in twenty years are used For further information, see http://www.federalreserve.gov/boarddocs/press/bcreg/2002/ in compiling this index. The twenty-bond index has a rating roughly equivalent to Moody's 200210312/default.htm. The rate reported is that for the Federal Reserve Bank of New York. A1 rating. Based on Thursday figures. Historical series for the rate on adjustment credit is available at: http.7/ 14. Daily figures are averages of Aaa, Aa, A, and Baa yields from Moody's Investors www.federalreserve.gov/releases/hl5/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 DomesticN onfinancial Statistics • August 2003 1.36 STOCK MARKET Selected Statistics 2002 2003 IInnddiiccaattoorr 22000000 22000011 22000022 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May 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 4,980.65 4,862.70 5,104.89 5,075.76 5,055.78 4,738.56 4,724.22 4,977.45 5,269.96 2222222 IIIIIIInnnnnnnddddddduuuuuuussssssstttttttrrrrrrriiiiiiiaaaaaaalllllll 809.40 749.46 656.44 589.14 574.45 597.75 593.15 587.78 553.90 558.10 583.74 613.26 3333333 TTTTTTTrrrrrrraaaaaaannnnnnnssssssspppppppooooooorrrrrrrtttttttaaaaaaatttttttiiiiiiiooooooonnnnnnn 414.73 444.45 430.63 388.19 383.41 405.03 401.39 394.60 367.55 366.90 395.85 425.12 4444444 UUUUUUUtttttttiiiiiiillllllliiiiiiitttttttyyyyyyy 478.99 377.72 260.50 210.76 207.83 229.41 236.71 236.42 214.64 211.45 221.06 238.33 5555555 FFFFFFFiiiiiiinnnnnnnaaaaaaannnnnnnccccccceeeeeee 552.48 596.61 554.88 506.05 494.06 523.50 519.72 522.51 485.72 486.71 522.05 549.91 6666666 SSSSSSStttttttaaaaaaannnnnnndddddddaaaaaaarrrrrrrddddddd &&&&&&& PPPPPPPoooooooooooooorrrrrrr'''''''sssssss CCCCCCCooooooorrrrrrrpppppppooooooorrrrrrraaaaaaatttttttiiiiiiiooooooonnnnnnn 11111111111111999999944444441111111 44444443333333 ------- 11111110000000)))))))''''''' 1,427.22 1,194.18 993.94 867.81 854.63 909.93 899.18 895.84 837.62 846.62 890.03 935.96 7777777 AAAAAAAmmmmmmmeeeeeeerrrrrrriiiiiiicccccccaaaaaaannnnnnn SSSSSSStttttttoooooooccccccckkkkkkk EEEEEEExxxxxxxccccccchhhhhhhaaaaaaannnnnnngggggggeeeeeee (((((((AAAAAAAuuuuuuuggggggg....... 33333331111111,,,,,,, 1111111999999977777773333333 ------- 55555550000000)))))))2222222 922.22 879.08 860.11 852.03 807.38 820.62 823.77 824.64 818.84 822.34 837.92 894.74 VVVVVVVooooooollllllluuuuuuummmmmmmeeeeeee ooooooofffffff tttttttrrrrrrraaaaaaadddddddiiiiiiinnnnnnnggggggg (((((((ttttttthhhhhhhooooooouuuuuuusssssssaaaaaaannnnnnndddddddsssssss ooooooofffffff ssssssshhhhhhhaaaaaaarrrrrrreeeeeeesssssss))))))) 8888888 NNNNNNNeeeeeeewwwwwww YYYYYYYooooooorrrrrrrkkkkkkk SSSSSSStttttttoooooooccccccckkkkkkk EEEEEEExxxxxxxccccccchhhhhhhaaaaaaannnnnnngggggggeeeeeee 1,026,867 1,216,529 1,411,689 1,370,143 1,619,896 1,427,254 1,210,332 1,441,846 1,302,011 1,403,742 1,381,580 1,455,858 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 198,790 150,450 134,380 130,210 130,570 133,060 134,380 134,910 134,030 135,910 140,450 146,380 FFFFFFFrrrrrrreeeeeeeeeeeeee cccccccrrrrrrreeeeeeedddddddiiiiiiittttttt bbbbbbbaaaaaaalllllllaaaaaaannnnnnnccccccceeeeeeesssssss aaaaaaattttttt bbbbbbbrrrrrrroooooookkkkkkkeeeeeeerrrrrrrsssssss4444444 11111111111111 MMMMMMMaaaaaaarrrrrrrgggggggiiiiiiinnnnnnn aaaaaaaccccccccccccccooooooouuuuuuunnnnnnntttttttsssssss5555555 100,680 101,640 95,690 98,630 96,620 91,240 95,690 96,430 95,400 90,830 88,770 88,540 11111112222222 CCCCCCCaaaaaaassssssshhhhhhh aaaaaaaccccccccccccccooooooouuuuuuunnnnnnntttttttsssssss 84,400 78,040 73,340 67,550 66,780 67,380 73,340 66,200 67,260 68,860 70,080 71,270 Margin requirements (percent of market value and effective date)6 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 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 2001 2002 2003 IItteemm Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 1 Federal debt outstanding 5,800.6 5,753.9 5,834.5 5,970.3 6,032.4 6,153.3 6,255.4 6,433.0 6,487.7 2 Public debt securities 5,773.7 5,726.8 5,807.5 5,943.4 6,006.0 6,126.5 6,228.2 6,405.7 6,460.8 3 Held by public 3,434.4 3,274.2 3,338.7 3,393.8 3,443.7 3,463.5 3,552.6 3,647.4 3,710.8 4 Held by agencies 2,339.4 2,452.6 2,468.8 2,549.7 2,562.4 2,662.9 2,675.6 2,758.3 2,750.0 Agency securities 26.8 27.1 27.0 26.8 26.4 26.8 27.2 27.3 26.9 6 Held by public 26.8 27.1 27.0 26.8 26.4 26.8 27.2 27.3 26.9 7 Held by agencies .1 .0 .0 .0 .0 .0 .0 .0 .0 8 Debt subject to statutory limit 5,692.5 5,645.0 5,732.6 5,871.4 5,935.1 6,058.3 6,161.4 6,359.4 6,400.0 9 Public debt securities 5,692.3 5,644.8 5,732.4 5,871.2 5,935.0 6,058.1 6,161.1 6,359.1 6,399.8 10 Other debt1 .2 .2 .2 .3 .2 .2 .3 .3 .2 MEMO 11 Statutory debt limit 5,950.0 5,950.0 5,950.0 5,950.0 5,950.0 6,400.0 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 2003 TTyyppee aanndd hhoollddeerr 11999999 22000000 22000011 22000022 Q2 Q3 Q4 Ql 1 Total gross public debt 5,776.1 5,662.2 5,943.4 6,405.7 6,126.5 6,228.2 6,405.7 6,460.8 By type 2 Interest-bearing 5,766.1 5,618.1 5,930.8 6,391.4 6,087.0 6,216.3 6,391.4 6,474.0 3 Marketable 3,281.0 2,966.9 2,982.9 3,205.1 3,024.8 3,136.6 3,205.1 3,331.8 4 Bills 737.1 646.9 811.3 888.8 822.5 868.3 888.8 955.0 5 Notes 1,784.5 1,557.3 1,413.9 1,580.8 1,446.9 1,521.5 1,580.8 1,622.9 6 Bonds 643.7 626.5 602.7 588.7 592.9 592.9 588.7 585.7 7 Inflation-indexed notes and bonds1 100.7 121.2 140.1 146.9 147.5 138.9 146.9 153.2 8 Nonmarketable2 2,485.1 2,651.2 2,947.9 3,186.3 3,062.2 3,079.6 3,186.3 3,142.2 9 State and local government series 165.7 151.0 146.3 153.4 142.8 144.3 153.4 148.8 10 Foreign issues3 31.3 27.2 15.4 11.2 13.3 12.5 11.2 12.2 11 Government 31.3 27.2 15.4 11.2 13.3 12.5 11.2 12.2 12 Public .0 .0 .0 .0 .0 .0 .0 .0 13 Savings bonds and notes 179.4 176.9 181.5 184.8 184.8 185.6 184.8 187.3 14 Government account series4 2,078.7 2,266.1 2,574.8 2,806.9 2,691.4 2,707.3 2,806.9 2,763.8 15 Non-interest-bearing 10.0 44.2 12.7 14.3 39.5 12.0 14.3 13.8 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 2,686.0 2,701.3 2,757.8 2,763.3 17 Federal Reserve Banks6 478.0 511.7 551.7 629.4 590.7 604.2 629.4 641.5 18 Private investors 3,233.9 2,880.4 2,819.5 3,018.5 2,849.8 2,924.8 3,018.5 3,055.6 19 Depository institutions 248.7 201.5 181.5 223.2 204.4 210.4 223.2 152.8 20 Mutual funds 228.6 220.8 257.5 278.1 250.0 253.6 278.1 299.9 21 Insurance companies 123.4 110.2 105.7 117.4 110.3 116.0 117.4 140.3 22 State and local treasuries7 266.8 236.2 256.5 274.2 271.7 269.4 274.2 273.4 Individuals 23 Savings bonds 186.4 184.8 190.3 194.9 192.7 193.3 194.9 196.9 24 Pension funds 321.0 304.1 281.6 284.2 286.0 284.9 284.2 294.6 25 Private 109.8 108.4 104.2 111.4 108.8 110.9 111.4 116.3 26 State and Local 211.2 195.7 177.4 172.8 177.2 174.1 172.8 178.3 27 Foreign and international8 1,268.7 1,034.2 1,053.1 1,174.2 1,068.1 1,128.6 1,174.2 1,250.5 28 Other miscellaneous investors7 9 590.3 588.7 493.3 n.a. 466.5 471.1 n.a. n.a. 1. The U.S. Treasury first issued inflation-indexed securities during the first quarter of 8. Includes nonmarketable foreign series Treasury securities and Treasury deposit funds. 1997. Excludes Treasury securities held under repurchase agreements in custody accounts at the 2. Includes (not shown separately) securities issued to the Rural Electrification Administra- Federal Reserve Bank of New York. tion, depository bonds, retirement plan bonds, and individual retirement bonds. 9. Includes individuals, government-sponsored enterprises, brokers and dealers, bank 3. Nonmarketable series denominated in dollars, and series denominated in foreign cur- personal trusts and estates, corporate and noncorporate businesses, and other investors. rency held by foreigners. SOURCES. Data by type of security, U.S. Treasury Department, Monthly Statement of the 4. Held almost entirely by U.S. Treasury and other federal agencies and trust funds. Public Debt of the United States', data by holder, Federal Reserve Board of Governors, Flow 5. Data for Federal Reserve Banks and U.S. government agencies and trust funds are actual of Funds Accounts of the United States and U.S. Treasury Department, Treasury Bulletin, holdings; data for other groups are Treasury estimates. unless otherwise noted. 6. U.S. Treasury securities bought outright by Federal Reserve Banks, see Bulletin table 1.18. 7. In March 1996, in a redefinition of series, fully defeased debt backed by nonmarketable federal securities was removed from "Other miscellaneous investors" and added to "State and local treasuries." The data shown here have been revised accordingly. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Financial Statistics • August 2003 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions' Millions of dollars, daily averages 2003 2003, week ending item Feb. Mar. Apr. Apr. 2 Apr. 9 Apr. 16 Apr. 23 Apr. 30 May 7 May 14 May 21 May 28 By type of security 1 U.S. Treasury bills 42,383 48,449 45,958 50,824 47,273 48,767 44,202 41,294 48,151 52,457 47,436 43,048 Treasury coupon securities by maturity 2 Three years or less 116,714 126,659 118,650' 126,390 100,933 111,472 115,270 143,154 152,603 165,286 156,854 197,753 3 More than three but less than or equal to six years 111,100 117,650 98,983 109,566 110,875 91,447 76,090 108,709 142,386 161,206 127,244 129,030 4 More than six but less than or equal to eleven years 85,141 93,192 72,089 80,619 78,135 73,636 52,114 77,064 91.107 140,383 127,759 115,527 5 More than eleven 20,817 21,768 19,829 17,546 18,625 17,791 20,615 23,356 25,240 36,135 48,728 41,092 6 Inflation-indexed2 2,995 2,987 3,092 2,681 2,663 2,579 2,578 4,610 3,658 4,603 4,171 5,284 Federal agency and governmentsponsored enterprises 7 Discount notes 56,333 52,936 52,188 55,959 48,924 49,128 54,850 54,874 60,610 57,864 64,649 56,480 Coupon securities by maturity 8 Three years or less 11,391 14,229 11,020 11,733 9,836 15,487 7,469 10,293 10,964 12,070 10,625 11,418 9 More than three years but less than or equal to six years 10,878 11,502 9,753 9,029 7,359 11,394 6,077 13,738 8,939 10,909 13,081 8,265 10 More than six years but less than or equal to eleven years .... 5,875 7,006 5,166 5,528 4,184 6,264 4,935 5,089 6,354 11,403 7,517 5,180 11 More than eleven years 1,071 1,584 647 1,008 695 556 574 606 1,083 1,088 806 1,292 12 Mortgage-backed 204,993 241,417 216,931 177,785 262,926 226,348 178,265 208,109 213,423 340,957 274,423 189,863 Corporate securities 13 One year or less 111,264 124,603 125,402 127,672 116,708 131,411 134,729 119,717 125,049 122,813 121,051 112,448 14 More than one year 22,114 23,239 20,592 20,756 19,998 19,597 18,935 23,442 24,252 23,979 23,839 19,941 By type of counterparty With interdealer broker 15 U.S. Treasury 176,738 191,462 164,812 178,616 165,695 161,332 141,913 180,206 217,238 256,307 239,215 236,013 16 Federal agency and governmentsponsored enterprises 8,572 10,578 8,077 9,517 7,440 8,255 6,256 9,417 9,205 12,318 11,705 9,092 17 Mortgage-backed 61,573 68,952 56,005 52,375 65,872 61,531 44,644 51,151 60,669 84,136 83,652 60,189 18 Corporate 518 488 554 450 593 528 639 513 565 561 520 459 With other 19 U.S. Treasury 202,410 219,244 193,790' 209,009 192,809 184,361 168,956 217,980 245,907 303,762 272,977 295,721 20 Federal agency and governmentsponsored enterprises 76,975 76,678 70,697 73,738 63,558 74,573 67,650 75,183 78,745 81,016 84,971 73,544 21 Mortgage-backed 143,420 172,465 160,926 125,410 197,055 164,817 133,620 156,958 152,754 256,821 190,770 129,674 22 Corporate 132,860 147,355 145,441 147,978 136,114 150,481 153,025 142,646 148,735 146,232 144,369 131,930 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 2003 2003, week ending item, Dy type or security Feb. Mar. Apr. Apr. 2 Apr. 9 Apr. 16 Apr. 23 Apr. 30 May 7 May 14 May 21 Net outright positions2 1 U.S. Treasury bills 33,405 36,519 21,878 45,980 41,995 15,473 14,430 8,728 11,484 -2,080 9,121 Treasury coupon securities by maturity 2 Three years or less -13,349 -11,710 -15,269 -13,477 -13,489 -17,619 -18,824 -11,657 -7,464 -9,227 -13,977 3 More than three years but less than or equal to six years -30,605 -39,305 -46,833 ^12,417 ^4,737 -45,186 -45,140 -53,532 ^15,717 -46,088 -38,952 4 More than six but less than or equal to eleven years -13,246 -12,408 -12,234 -11,108 -9,103 -11,431 -12,093 -16,629 -15,158 -9,276 -7,723 5 More than eleven 4,742 5,513 5,442 6,102 6,179 6,447 3,992 4,960 3,931 2,540 3,386 6 Inflation-indexed 2,051 2,502 1,544 1,718 1,747 1,491 1,756 1,131 801 -876 -265 Federal agency and governmentsponsored enterprises 7 Discount notes 56,067 54,393 55,454 55,688 58,847 53,653 57,218 52,029 61,273 62,664 65,205 Coupon securities, by maturity 8 Three years or less 18,206 19,765 19,419 18,191 17,044 21,148 20,129 19,707 20,045 21,951 20,462 9 More than three years but less than or equal to six years 7,076 4,786 3,770 4,104 2,301 4,592 3,305 4,786 4,363 5,553 5,007 10 More than six but less than or equal to eleven years 1,050 2,292 3,328 2,467 2,467 3,472 3,090 4,527 2,698 6,165 4,296 11 More than eleven 2,261 2,357 2,351 2,584 2,351 2,318 2,335 2,335 2,115 2,238 2,437 12 Mortgage-backed 27,290 44,922 46,326 46,340 41,394 46,185 37,859 59,860 36,798 31,002 44,600 Corporate securities 13 One year or less 26,844 26,170 29,461 23,967 24,926 35,531 30,292 28,663 26,298 26,662 26,542 14 More than one year 49,821 48,917 48,800 48,240 46,324 48,471 44,341 56,222 59,734 59,672 58,358 Financing3 Securities in, U.S. Treasury 15 Overnight and continuing 649,602 655,300 656,984 675,478 651,078 647,614 673,494 650,467 658,335 674,963 733,053 16 Term 711,711 784,955 791,597 721,631 761,654 790,110 801,467 833,145 853,703 904,041 852,721 Federal agency and governmentsponsored enterprises 17 Overnight and continuing 156,551 153,551 152,545 152,954 157,895 155,053 150,786 146,328 147,218 156,168 159,250 18 Term 225,453 239,424 229,326 233,058 228,195 226,628 231,370 230,043 245,895 240,647 240,514 Mortgage-backed securities 19 Overnight and continuing 41,472 39,251 40,105 38,566 38,380 41,891 44,676 35,912 50,046 41,449 43,397 20 Term 245,796 249,003 244,815 238,006 245,287 241,007 249,090 245,823 243,138 244,968 253,912 Corporate securities 21 Overnight and continuing 61,244 65,856 66,811 65,940 67,249 66,857 67,275 66,112 65,481 66,830 69,146 22 Term 24,535 25,792 25,873 26,213 25,268 25,200 25,834 27,094 27,003 26,943 26,978 MEMO Reverse repurchase agreements 23 Overnight and continuing 462,703 469,568 461,743 471,313 451,009 446,480 472,923 473,825 443,299 461,384 519,203 24 Term 1,044,314 1,127,240 1,117,241 1,044,426 1,094,613 1,120,931 1,138,122 1,136,101 1,202,046 1,240,502 1,189,810 Securities out, U.S. Treasury 25 Overnight and continuing 613,714 638,051 621,314 646,310 621,782 609,219 619,018 628,097 632,456 647,324 712,522 26 Term 651,391 717,308 729,460 653,341 704,869 738,073 746,060 750,585 791,361 830,945 759,014 Federal agency and governmentsponsored enterprises 27 Overnight and continuing 302,428 286,453 282,367 275,200 298,578 281,035 274,600 277,302 278,820 308,347 306,901 28 Term 156,795 176,180 175,326 175,608 169,972 178,341 182,232 170,678 185,100 186,157 184,162 Mortgage-backed securities 29 Overnight and continuing 336,090 328,058 334,764 318,715 312,190 344,936 365,482 321,032 319,815 375,991 370,458 30 Term 149,392 153,495 152,637 152,363 152,014 153,907 160,428 144,276 147,211 157,160 149,444 Corporate securities 31 Overnight and continuing 138,598 141,619 143,957 142,979 139,104 146,876 142,668 147,458 145,762 146,716 148,460 32 Term 22,083 22,184 22,754 22,155 22,502 22,622 22,529 23,533 24,436 24,722 25,647 MEMO Repurchase agreements 33 Overnight and continuing 1,190,429 1,195,376 1,187,404 1,181,620 1,182,304 1,186,084 1,211,085 1,171,794 1,176,253 1,269,699 1,325,129 34 Term 944,456 1,022,027 1,027,811 951,615 998,909 1,044,691 1,051,033 1,038,380 1,095,866 1,143,555 1,061,290 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 (TI1S) 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 NonfinancialS tatistics • August 2003 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 2002 2003 AAggeennccyy 11999999 22000000 22000011 22000022 Nov. Dec. Jan. Feb. Mar. 1 Federal and federally sponsored agencies 1,616,492 1,851,632 2,121,057 2,351,039 2,305,945 2,351,039 n.a. n.a. n.a. 2 Federal agencies 26,376 25,666 276 2 342 2 26,929 26,408 26,886 3 Defense Department' 6 6 6 6 6 6 6 6 6 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 26,828 26,863 26,828 354 152 166 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 25,660 270 270 336 270 26,923 26,402 26,880 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 2,305,607 2,351,037 n.a. n.a. n.a. II Federal Home Loan Banks 529,005 594,404 623,740 674,841 674,847 674,841 672,304 684,495 687,573 12 Federal Home Loan Mortgage Corporation 360,711 426,899 565,071 648,894 643,201 648,894 n.a. n.a. n.a. 13 Federal National Mortgage Association 547,619 642,700 763,500 851,000 811,700 851,000 860,300 871,000 873,900 14 Farm Credit Banks8 68,883 74,181 76,673 85,088 83,884 85,088 85,206 86,045 86,802 15 Student Loan Marketing Association9 41,988 45,375 48,350 47,900 48,700 47,900 50,700 50,900 49,100 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 Corporation11 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 37,017 37,418 37,017 35,992 35,794 35,780 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 14,489 14,209 14,489 14,714 14,750 14,750 27 Other 21,402 22,174 25,220 22,528 23,209 22,528 21,278 21,044 21,030 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). BoiTowing 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 iissssuuee oorr iissssuueerr,, 22000000 22000011 22000022 oorr uussee Oct. Nov. Dec. Jan. Feb.' Mar.' Apr.' May 1 All issues, new and refunding1 180,403 292,003r 364,007r 44,575'" 37,150 27,417r 26,987r 30,036 27,880 34,731 33,600 By type of issue 2 General obligation 64,475 118,554 145,323 18,595 11,023 8,431 8,112 12,732 10,056 14,770 11,856 3 Revenue 115,928 170,047 214,788 24,074 24,942 18,961 17,049 17,304 17,824 19,961 21,744 By type of issuer 4 State 19,944 30,099 33,931 4,199 2,109 1,670 1,927 3,654 1,277 5,521 2,816 5 Special district or statutory authority2 121,185 197,462 259,070 31,793 28,296 20,151 17,979 20,733 19,622 23,828 21,566 6 Municipality, county, or township 39,273 61,040 67,121 6,678 5,570 5,570 5,290 5,649 6,981 5,381 9,218 7 Issues for new capital 154,257 200,363r 243,286r 30,140r 26,505r 19,754r 18,840r 20,242 15,926 24,642 19,922 By use of proceeds 8 Education 38,665 50,054 57,894 5,209 3,743 5,292 4,823 7,035 5,284 7,580 6,022 9 Transportation 19,730 21,411 22,093 1,476 1,250 1,060 1,417 1,625 1,233 3,479 1,769 10 Utilities and conservation 11,917 21,917 33,404 6,922 8,379 2,031 2,196 176 594 587 1,129 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 1,225 821 796 422 1,084 1,707 1,816 3,059 13 Other purposes 47,309 55,733 73,033 6,996 7,189 4,992 7,400 7,178 3,678 8,564 5,555 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 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 All issues' 942,198 1,382,003 1,262,606 118,947 82,726 105,754 107,916 109,628 113,772 136,530 114,220 2 Bonds2 807,281 1,253,449 1,152,171 111,652 74,893 95,821 101,038 102,501 106,633 130,637 105,858 By type of offering 3 Sold in the United States 684,484 1,197,060 1,065,925 107,219 70,696 90,207 95,187 96,275 97,383 125,025 103,273 4 Sold abroad 122,798 56,389 86,246 4,432 4,197 5,614 5,851 6,226 9,250 5,613 2,585 MEMO 5 Private placements, domestic 18,370 16,385 16,224 65 0 3,525 5,060 4,700 0 0 0 By industry group 6 Nonfinancial 242,207 445,930 267,183 17,121 14,560 20,500 19,614 27,119 26,222 25,865 21,940 7 Financial 565,074 807,519 884,988 94,531 60,333 75,321 81,424 75,382 80,411 104,773 83,918 8 Stocks3 311,941 230,632 170,673 7,295 7,833 9,933 6,878 7,127 7,139 5,893 8,362 By type of offering 9 Public 134,917 128,554 110,435 7,295 7,833 9,933 6,878 7,127 7,139 5,893 8,362 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 2,754 3,731 4,533 4,154 3,793 2,679 1,053 1,592 12 Financial 16,548 50,977 48,320 4,541 4,102 5,400 2,724 3,334 4,460 4,840 6,770 1. Figures represent gross proceeds of issues maturing in more than one year; they are the 2. Monthly data include 144(a) offerings. principal amount or number of units calculated by multiplying by the offering price. Figures 3. Monthly data cover only public offerings. exclude secondary offerings, employee stock plans, investment companies other than closed- 4. Data for private placements are not available at a monthly frequency. end, intracorporate transactions, Yankee bonds, and private placements listed. Stock data SOURCE. Securities Data Company and the Board of Governors of the Federal Reserve include ownership securities issued by limited partnerships. System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Nonfinancial Statistics • August 2003 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets1 Millions of dollars 2002 2003 IItteemm 22000011 22000022RR Oct. Nov. Dec. Jan. Feb. Mar. Apr/ May 1 Sales of own shares2 1,806,474 1,825,890 164,959 137,914 134,383 152,647 122,321 140,643 141,465 143,217 2 Redemptions of own shares 1,677,266 1,702,657 167,039 122,125 135,213 138,951 113,643 129,337 112,109 119,065 3 Net sales3 129,208 123,233 -2,080 15,789 -830 13,696 8,678 11,306 29,356 24,152 4 Assets4 4,689,624 4,119,322 4,059,765 4,249,351 4,119,322 4,060,568 4,031,818 4,059,934 4,327,560 4,563,228 5 Cash5 219,620 208,479 204,019 219,213 208,479 212,792 199,546 214,146 230,032 234,039 6 Other 4,470,004 3,910,843 3,855,746 4,030,138 3,910,843 3,847,776 3,832,272 3,845,788 4,097,528 4,329,189 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 2003 AAccccoouunntt 22000000 22000011 22000022 Q3 Q4 Ql Q2 Q3 04 Ql ASSETS 1 Accounts receivable, gross2 958.7 948.3 945.4 967.8 948.3 930.0 941.9 945.6 945.4 934.8 2 Consumer 328.0 340.1 315.6 329.3 340.1 329.8 332.0 334.5 315.6 307.0 3 Business 458.4 447.0 455.3 451.1 447.0 443.0 449.4 445.5 455.3 453.9 4 Real estate 172.3 161.3 174.5 187.4 161.3 157.2 160.5 165.5 174.5 174.0 5 LESS: Reserves for unearned income 69.7 60.6 57.0 60.8 60.6 59.5 58.5 58.0 57.0 54.2 6 Reserves for losses 16.7 21.0 23.8 18.0 21.0 21.5 21.6 22.0 23.8 24.0 7 Accounts receivable, net 872.3 866.7 864.5 889.0 866.7 849.0 861.9 865.6 864.5 856.7 8 All other 461.5 523.4 584.7 478.7 523.4 515.2 530.6 558.0 584.7 610.9 9 Total assets 1,333.7 1,390.1 1,449.3 1,367.7 1,390.1 1,364.2 1,392.5 1,423.6 1,449.3 1,467.6 LIABILITIES AND CAPITAL 10 Bank loans 35.9 50.8 48.0 44.5 50.8 49.4 56.9 74.9 48.0 47.3 11 Commercial paper 238.8 158.6 141.5 171.0 158.6 137.0 130.8 143.1 141.5 127.3 Debt 12 Owed to parent 102.5 99.2 88.2 91.7 99.2 82.6 83.3 82.9 88.2 87.7 13 Not elsewhere classified 502.2 567.4 624.9 555.8 567.4 574.4 597.2 584.9 624.9 639.1 14 All other liabilities 301.8 325.5 339.0 327.6 325.5 329.1 331.5 343.4 339.0 344.4 15 Capital, surplus, and undivided profits 152.5 188.6 207.6 177.2 188.6 191.7 192.9 194.5 207.6 221.8 16 Total liabilities and capital 1,333.7 1,390.1 1,449.3 1,367.7 1,390.1 1,364.2 1,392.5 1,423.6 1,449.3 1,467.6 1. Includes finance company subsidiaries of bank holding companies but not of retailers 2. Before deduction for unearned income and losses. Excludes pools of securitized assets, and banks. Data are amounts carried on the balance sheets of finance companies; securitized pools are not shown, as they are not on the books. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets and Corporate Finance A31 1.52 DOMESTIC FINANCE COMPANIES Owned and Managed Receivables1 Billions of dollars, amounts outstanding 2002 2003 Nov. Dec. Jan. Feb. Mar. Apr. Seasonally adjusted 1 Total 1,185.6 1,246.6 1,270.2 1,270.2 1,270.2 1,274.1 1,267.3 1,274.4 1,280.0 2 Consumer 464.4 513.3 513.1 513.7 513.1 517.3 510.6 513.6 515.2 3 Real estate 198.9 207.7 216.5 214.2 216.5 215.4 215.6 215.4 220.2 4 Business 522.3 525.6 540.6 542.3 540.6 541.5 541.2 545.4 544.5 Not seasonally adjusted 5 Total 1,192.2 1,253.7 1,277.6 1,267.9 1,277.6 1,276.7 1,267.6 1,277.7 1,283.2 6 Consumer 468.3 518.1 518.4 517.6 518.4 518.5 510.8 510.2 511.6 7 Motor vehicle loans 141.6 173.9 160.2 159.8 160.2 160.2 162.3 156.0 160.6 8 Motor vehicle leases 108.2 103.5 83.3 85.2 83.3 81.9 80.3 81.8 81.2 9 Revolving2 37.6 31.5 38.9 37.0 38.9 38.7 37.3 36.4 37.4 in Other3 40.7 31.1 33.1 31.4 33.1 33.1 32.6 32.9 33.0 Securitized assets4 ii Motor vehicle loans 97.1 131.9 151.9 153.9 151.9 154.3 148.7 152.3 149.7 12 Motor vehicle leases 6.6 6.8 5.7 5.8 5.7 5.7 5.6 6.2 6.1 13 Revolving 19.6 25.0 31.1 30.2 31.1 30.4 30.1 30.7 30.6 14 Other 17.1 14.3 14.0 14.2 14.0 14.2 13.8 13.9 13.0 15 Real estate 198.9 207.7 216.5 214.2 216.5 215.4 215.6 215.4 220.2 16 One- to four-family 130.6 120.1 135.0 132.8 135.0 134.1 134.3 133.9 138.8 17 Other 41.7 41.2 39.5 39.3 39.5 39.6 39.9 40.1 40.3 Securitized real estate assets4 18 One- to four-family 24.7 40.7 39.7 39.9 39.7 39.4 39.1 39.2 38.9 19 Other 1.9 5.7 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2n Business 525.0 527.9 542.7 536.1 542.7 542.8 541.3 552.1 551.4 21 Motor vehicles 75.5 54.0 60.7 58.2 60.7 58.6 60.3 65.3 64.1 22 Retail loans 18.3 16.1 15.4 15.7 15.4 15.1 14.8 16.3 16.8 23 Wholesale loans5 39.7 20.3 29.3 26.7 29.3 27.5 30.5 34.0 34.5 24 Leases 17.6 17.6 16.0 15.8 16.0 15.9 15.0 15.0 12.8 25 Equipment 283.5 289.4 292.1 288.4 292.1 292.0 288.9 287.5 286.9 26 Loans 70.2 77.8 83.3 82.2 83.3 80.1 80.3 78.0 79.4 27 Leases 213.3 211.6 208.8 206.2 208.8 211.8 208.6 209.5 207.5 28 Other business receivables6 99.4 103.5 102.5 95.7 102.5 104.7 104.4 101.1 102.6 Securitized assets4 29 Motor vehicles 37.8 50.1 50.2 50.4 50.2 50.3 50.9 53.1 53.1 3n Retail loans 3.2 5.1 2.4 2.5 2.4 2.4 2.3 2.2 2.2 31 Wholesale loans 32.5 42.5 45.9 45.6 45.9 46.1 46.8 48.6 48.6 32 Leases 2.2 2.5 1.9 2.3 1.9 1.8 1.8 2.2 2.2 33 Equipment 23.1 23.2 20.2 24.3 20.2 20.1 19.4 21.9 21.4 34 Loans 15.5 16.4 13.0 17.6 13.0 12.9 12.3 12.2 11.8 35 Leases 7.6 6.8 7.2 6.7 7.2 7.2 7.1 9.7 9.6 36 Other business receivables6 5.6 7.7 17.1 19.2 17.1 17.1 17.3 23.3 23.2 NOTE. This table has been revised to incorporate several changes resulting from the before deductions for unearned income and losses. Components may not sum to totals benchmarking of finance company receivables to the June 1996 Survey of Finance Compa- because of rounding. nies. In that benchmark survey, and in the monthly surveys that have followed, more detailed 2. Excludes revolving credit reported as held by depository institutions that are subsidibreakdowns have been obtained for some components. In addition, previously unavailable aries of finance companies. data on securitized real estate loans are now included in this table. The new information has 3. Includes personal cash loans, mobile home loans, and loans to purchase other types of resulted in some reclassification of receivables among the three major categories (consumer, consumer goods, such as appliances, apparel, boats, and recreation vehicles. real estate, and business) and in discontinuities in some component series between May and 4. Outstanding balances of pools upon which securities have been issued; these balances June 1996. are no longer carried on the balance sheets of the loan originator. Includes finance company subsidiaries of bank holding companies but not of retailers and 5. Credit arising from transactions between manufacturers and dealers, that is, floor plan banks. Data in this table also appear in the Board's G.20 (422) monthly statistical release. For financing. ordering address, see inside front cover. 6. Includes loans on commercial accounts receivable, factored commercial accounts, and 1. Owned receivables are those carried on the balance sheet of the institution. Managed receivable dealer capital; small loans used primarily for business or farm purposes; and receivables are outstanding balances of pools upon which securities have been issued; these wholesale and lease paper for mobile homes, campers, and travel trailers. balances are no longer carried on the balance sheets of the loan originator. Data are shown Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic NonfinancialS tatistics • August 2003 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 2002 2003 Nov. Dec. Jan. Feb. Mar. Apr. May Terms and yields in primary and secondary markets PRIMARY MARKETS Terms1 1 Purchase price (thousands of dollars) 234.5 245.0 261.1 256.7 266.9 278.9 235.1 252.9 266.0 275.3 2 Amount of loan (thousands of dollars) 177.0 184.2 197.0 193.3 205.1 214.0 179.3 184.2 205.0 210.7 3 Loan-to-price ratio (percent) 77.4 77.3 77.8 77.4 79.0 79.3 78.0 76.2 78.8 78.7 4 Maturity (years) 29.2 28.8 28.9 28.4 28.7 28.9 28.3 28.2 29.0 28.8 5 Fees and charges (percent of loan amount)2 .70 .67 .62 .61 .64 .79 .37 .40 .62 .61 Yield (percent per year) 6 Contract rate1 7.41 6.90 6.35 5.99 5.95 6.00 5.76 5.69 5.83 5.66 7 Effective rate1-3 7.52 7.00 6.44 6.08 6.04 6.12 5.82 5.75 5.92 5.75 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 5.29 5.17 5.18 5.03 4.94 4.97 4.55 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) II Total 610,122 707,015 790,800 760,759 790,800 810,609 816,747 815,964 817,894 815,560 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 47,807 67,891 57,281 40,420 34,304 43,028 43,749 Mortgage commitments (during period) 15 Issued1 163,689 304,084 400,327 53,286 30,769 27,814 52,479 42,005 n.a. n.a. 16 To sell8 11,786 7,586 12,268 520 1,555 2,717 1,241 2,457 n.a. n.a. FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)* 17 Total 385,693 491,719 568,173 549,380 568,173 568,494 561,534 569,522 568,975 572,801 18 FHA/VA insured 3,332 3,506 4,573 4,019 4,573 4,256 3,796 3,540 n.a. n.a. 19 Conventional 382,361 488,213 563,600 545,361 563,600 564,238 557,738 565,982 n.a. n.a. Mortgage transactions (during period) 21) 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 62,354 73,184 48,169 41,831 59,065 51,737 66,175 22 Mortgage commitments contracted (during period)9 169,231 417,434 620,981 74,340 91,223 55,057 48,446 69,200 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 Q4 1 All holders 6,318,668' 6,890,112' 7,600,717r 7,600,717r 7,764,707' 7,983,403' 8,216,087' 8,485,921 By type of property 2 One- to four-family residences 4,787,225r 5,205,428' 5,738,111' 5,738,111' 5,875,739' 6,049,597' 6,247,731' 6,459,996 3 Multifamily residences 369,982' 405,410' 453,569' 453,569' 461,227' 472,71c 480,353' 498,407 4 Nonfarm, nonresidential 1,058,498' 1,170,417' 1,292,701' 1,292,701' 1,309,610' 1,340,644' 1,364,389' 1,401,701 5 102,964 108,858 116,336 116,336 118,131' 120,452' 123,614' 125,818 By type of holder 6 Major financial institutions 2,394,271 2,618,969 2,791,076 2,791,076 2,788,410' 2,861,012' 2,981,490' 3,090,033 7 Commercial banks2 1,495,420 1,660,054 1,789,819 1,789,819 1,799,118' 1,873,362' 1,962,198' 2,059,267 8 One- to four-family 879,576 965,635 1,023,851 1,023,851 1,017,001' 1,070,513' 1,143,985' 1,222,443 9 Multifamily 67,665 77,803 84,851 84,851 86,676' 90,745' 90,930' 94,178 10 Nonfarm, nonresidential 516,333 582,577 645,619 645,619 659,452' 675,119' 689,481' 704,621 II Farm 31,846 34,039 35,498 35,498 35,990' 36,985' 37,802' 38,025 12 Savings institutions3 668,064 722,974 758,236 758,236 745,998 742,732 773,652' 781,378 13 One- to four-family 548,222 594,221 620,579 620,579 605,171 599,402 625,402' 631,392 14 Multifamily 59,309 61,258 64,592 64,592 65,199 66,009 68,668 68,679 15 Nonfarm, nonresidential 60,063 66,965 72,534 72,534 75,077 76,768 79,022' 80,730 16 Farm 470 529 531 531 551 552 560 577 17 Life insurance companies 230,787 235,941 243,021 243,021 243,293 244,918 245,639 249,387 18 One- to four-family 5,934 4,903 4,931 4,931 4,938 5,162 5,176 5,255 19 Multifamily 32,818 33,681 35,631 35,631 35,671 35,818 35,921 36,470 20 Nonfarm, nonresidential 179,048 183,757 188,376 188,376 188,599 189,850 190,398 193,301 21 Farm 12,987 13,600 14,083 14,083 14,085 14,088 14,144 14,361 22 Federal and related agencies 320,054 344,225 376,999 376,999 385,027 396,091 412,014 437,641 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 149,422 155,626 169,908 169,908 176,051 180,491 184,191 190,648 45 One- to four-family 141,195 144,150 155,060 155,060 160,300 164,038 167,006 171,637 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 46,257 48 One- to four-family 2,012 2,137 2,406 2,406 2,470 2,527 2,635 2,722 49 Farm 32,175 34,189 38,479 38,479 39,511 40,424 42,147 43,535 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 2,949,768' 3,231,228' 3,715,980' 3,715,980' 3,869,277' 3,987,579' 4,067,069' 4,182,140 54 Government National Mortgage Association 582,263 611,553 591,368 591,368 587,204 583,745 567,386' 537,880 55 One- to four-family 565,189 592,624 569,460 569,460 564,108 559,549 542,208' 512,090 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 657,541' 739,615' 885,852' 885,852' 914,191' 945,979' 982,562' 1,023,911 69 One- to four-family6 455,021 499,834 591,200 591,200 616,300 638,300 669,300 691,900 70 Multifamily 43,192' 49,215' 57,402' 57,402' 57,758' 59,577' 60,227' 63,919 71 Nonfarm, nonresidential 159,328' 190,566' 237,250' 237,250' 240,134' 248,102' 253,036' 268,092 72 Farm 0 0 0 0 0 0 0 0 73 Individuals and others7 654,576' 695,691' 716,661' 716,661' 721,993' 738,721' 755,514' 776,107 74 One- to four-family 456,009r 492,429' 506,669' 506,669' 514,560' 525,893' 540,187' 558,434 75 Multifamily 75,076' 75,457' 78,252' 78,252' 78,085' 78,639' 79,127' 79,228 76 Nonfarm, nonresidential 102,274 105,453' 107,949' 107,949' 105,210' 109,604' 111,005' 112,826 77 Farm 21,217 22,352 23,792 23,792 24,138' 24,585' 25,194' 25,619 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 • August 2003 1.55 CONSUMER CREDIT1 Millions of dollars, amounts outstanding, end of period 2002 2003 Nov.' Dec.' Jan.' Feb.' Mar.' Apr. Seasonally adjusted 1 Total 1,559,532 1,666,816 1,726,123 1,724,965 1,726,123 1,741,301 1,743,890 1,745,039 1,752,755 2 Revolving 667,395 701,285 712,007 716,071 712,007 715,063 718,554 721,168 722,569 3 Nonrevolving2 892,137 965,531 1,014,116 1,008,894 1,014,116 1,026,239 1,025,336 1,023,872 1,030,185 Not seasonally adjusted 4 Total 1,593,116 1,701,856 1,761,971 1,735,538 1,761,971 1,756,284 1,742,884 1,734,777 1,741,308 By major holder 5 Commercial banks 541,470 558,421 587,165 580,259 587,165 582,065 581,490 575,259 576,202 6 Finance companies 219,848 236,559 232,269 228,241 232,269 232,099 232,291 225,245 230,997 7 Credit unions 184,434 189,570 195,744 196,807 195,744 195,164 194,438 193,082 194,777 8 Savings institutions 64,557 69,070 68,494 67,397 68,494 68,854 69,178 69,537 69,911 9 Nonfinancial business 82,662 67,955 56,894 49,799 56,894 52,838 49,563 48,477 47,705 10 Pools of securitized assets3 500,145 580,281 621,405 613,035 621,405 625,266 615,923 623,177 621,716 By major type of credit4 11 Revolving 693,020 727,297 737,998 717,363 737,998 726,511 718.774 714,033 718,769 12 Commercial banks 218,063 224,878 230,990 225,931 230,990 220,535 218,821 212,418 212,828 13 Finance companies 37,627 31,538 38,948 37,015 38,948 38,733 37,348 36,350 37,436 14 Credit unions 22,226 22,265 22,228 21,260 22,228 21,645 21,161 20,830 20,988 15 Savings institutions 16,560 17,767 16,225 15,710 16,225 16,141 16,064 15,979 16,144 16 Nonfinancial business 42,430 29,790 19,221 14,315 19,221 16,547 14,203 13,666 13,112 17 Pools of securitized assets3 356,114 401,059 410,386 403,132 410,386 412,911 411,177 414,790 418,262 18 Nonrevolving 900,096 974,559 1,023,973 1,018,175 1,023,973 1,029,773 1,024,110 1,020,744 1,022,539 19 Commercial banks 323,407 333,543 356,175 354,327 356,175 361,529 362,669 362,841 363,374 20 Finance companies 182,221 205,021 193,321 191,226 193,321 193,366 194,944 188,895 193,561 21 Credit unions 162,208 167,305 173,516 175,547 173,516 173,519 173,277 172,252 173,789 22 Savings institutions 47,997 51,303 52,269 51,687 52,269 52,713 53,114 53,558 53,767 23 Nonfinancial business 40,232 38,165 37,673 35,484 37,673 36,291 35,360 34,811 34,593 24 Pools of securitized assets3 144,031 179,222 211,019 209,903 211,019 212,355 204,746 208,387 203,454 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 Oct. Nov. Dec. Jan. Feb. Mar. Apr. INTEREST RATES Commercial banks2 1 48-month new car 9.34 8.50 6.71 n.a. 5.67 n.a. n.a. 7.11 n.a. n.a. 2 24-month personal 13.90 13.22 11.59 n.a. 10.78 n.a. n.a. 11.62 n.a. n.a. Credit card plan 3 All accounts 15.71 14.89 13.42 n.a. 13.13 n.a. n.a. 13.20 n.a. n.a. 4 Accounts assessed interest 14.91 14.44 13.09 n.a. 12.78 n.a. n.a. 12.85 n.a. n.a. Auto finance companies 5 New car 6.61 5.65 4.29 2.62 3.41 3.50 3.13 3.99 3.83 2.51 6 Used car 13.55 12.18 10.74 10.59 10.70 10.48 10.37 10.43 10.16 9.91 OTHER TERMS3 Maturity (months) 7 New car 54.9 55.1 56.8 57.4 57.2 57.5 58.5 59.2 59.5 60.1 8 Used car 57.0 57.5 57.5 57.4 56.9 56.7 57.5 57.7 57.8 57.7 Loan-to-value ratio 9 New car 92 91 94 96 95 96 96 97 96 97 10 Used car 99 100 100 101 100 100 100 99 99 99 Amount financed (dollars) 11 New car 20,923 22,822 24,747 26,099 26,104 26,647 26,443 24,864 25,152 27,540 12 Used car 14,058 14,416 14,532 14,702 14,610 14,639 14,499 14,231 14,253 14,475 1. The Board's series on amounts of credit covers most short- and intermediate-term credit 2. Data are available for only the second month of each quarter, extended to individuals. Data in this table also appear in the Board's G.19 (421) monthly 3. At auto finance companies, statistical release. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A3 5 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 2001 2002 2003 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr zUUl Q3 Q4 Ql Q2 Q3 Q4 Ql Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .. 789.9 1,044.6 1,031.4 848.4 1,134.6 1,298.4 1,187.6 973.1 1,643.2 1,312.5 1,612.8 1,338.8 By sector and instrument 7 Federal government 23.1 -52.6 -71.2 -295.9 -5.6 209.3 43.4 39.8 526.0 265.7 198.5 79.9 3 Treasury securities 23.2 -54.6 -71.0 -294.9 -5.0 209.7 44.2 41.6 524.2 264.2 198.1 81.5 4 Budget agency securities and mortgages -.1 2.0 -.2 -1.0 -.5 -.4 -.7 -1.8 1.8 1.6 .4 -1.6 5 Nonfederal 766.8 1,097.2 1,102.6 1,144.3 1,140.2 1,089.0 1,144.1 933.3 1,117.2 1,046.8 1,414.3 1,258.9 By instrument 6 Commercial paper 13.7 24.4 37.4 48.1 -88.3 -66.1 45.5 -144.4 -81.7 -17.4 -13.2 -15.2 7 Municipal securities and loans 56.9 84.2 54.4 23.6 122.8 83.1 174.6 76.6 196.2 156.8 238.2 162.2 8 Corporate bonds 150.5 235.2 217.8 161.3 340.5 191.4 325.0 253.6 191.4 -29.0 114.4 178.6 9 Bank loans n.e.c 106.4 109.8 82.9 101.8 -82.0 -23.5 -165.5 -16.4 -192.1 -124.5 3.3 -54.9 in Other loans and advances 59.5 82.1 46.0 95.0 29.3 59.4 -107.3 -19.2 77.2 77.6 6.4 -6.6 i I Mortgages 322.3 486.6 564.6 567.5 709.2 774.0 737.3 700.0 834.9 914.3 1,068.1 919.1 17, Home 258.3 384.6 424.4 418.2 532.7 561.5 533.1 602.4 658.6 780.4 846.2 783.4 n Multifamily residential 7.3 23.2 35.7 33.9 47.9 56.4 56.4 29.1 44.2 29.0 70.1 37.2 14 Commercial 53.5 72.2 98.8 108.9 121.1 149.1 141.0 61.6 123.0 91.8 142.9 95.3 is Farm 3.1 6.5 5.8 6.5 7.5 7.0 6.8 6.9 9.1 13.2 8.8 3.1 16 Consumer credit 57.5 75.0 99.5 147.0 108.7 70.6 134.5 83.0 91.3 69.1 -2.9 75.7 By borrowing sector 17 Household 332.7 452.6 497.9 553.9 613.7 663.7 608.9 706.9 695.9 768.5 900.8 884499..22 18 Nonfinancial business 392.5 576.9 566.2 574.9 420.8 355.6 393.1 157.8 237.8 134.4 303.7 263.4 19 Corporate 291.6 409.2 378.4 380.0 256.5 197.3 243.7 42.2 96.6 -8.7 139.8 148.7 20 Nonfarm noncorporate 94.7 159.7 182.4 184.1 156.8 153.8 141.1 110.3 132.7 128.8 156.3 113.3 21 Farm 6.2 8.0 5.5 10.9 7.5 4.4 8.3 5.3 8.5 14.3 7.6 1.3 22 State and local government 41.5 67.7 38.5 15.5 105.7 69.7 142.1 68.7 183.5 143.9 209.8 146.3 23 Foreign net borrowing in United States 71.8 43.2 25.2 65.7 -37.4 -106.7 16.0 78.8 13.4 -31.9 12.6 21.3 24 Commercial paper 3.7 7.8 16.3 31.7 -14.2 -25.2 5.9 66.8 36.5 3.9 37.3 52.6 75 Bonds 61.4 34.9 14.1 23.9 -12.1 -83.9 29.7 -2.3 -41.0 -23.1 -16.9 -25.6 76 Bank loans n.e.c 8.5 6.6 .5 11.4 -7.3 4.2 -16.3 13.9 22.0 -11.7 -2.9 ^t.O 27 Other loans and advances -1.8 -6.0 -5.7 -1.3 -3.7 -1.8 -3.3 .3 -4.1 -1.0 -4.9 -1.8 28 Total domestic plus foreign 861.7 1,087.8 1,056.6 914.1 1,097.2 1,191.7 1,203.5 1,051.9 1,656.5 1,280.7 1,625.4 1,360.1 Financial sectors 29 Total net borrowing by financial sectors 662.2 1,085.6 1,073.1 808.9 958.3 1,112.7 975.9 869.1 875.5 856.7 1,093.8 1,002.7 Bv instrument 3n Federal government-related 212.9 470.9 592.0 433.5 629.3 818.4 591.8 691.1 487.8 420.8 616.3 452.4 31 Government-sponsored enterprise securities 98.4 278.3 318.2 234.1 290.8 326.2 306.5 191.3 141.7 249.1 321.5 179.7 32 Mortgage pool securities 114.6 192.6 273.8 199.4 338.5 492.2 285.3 499.8 346.1 171.6 294.9 272.7 33 Loans from U.S. government .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 449.3 614.7 481.2 375.4 329.0 294.3 384.1 178.0 387.7 435.9 477.4 550.2 35 Open market paper 166.7 161.0 176.2 127.7 -61.9 -72.2 -13.6 -178.3 -109.1 84.3 -77.3 -53.5 36 Corporate bonds 218.9 310.2 207.1 199.3 341.5 308.9 372.7 354.2 442.0 192.6 675.6 589.2 37 Bank loans n.e.c 13.3 28.5 -14.4 -.4 13.1 .7 17.7 -.6 31.2 81.9 -107.9 -42.7 38 Other loans and advances 35.6 90.2 107.1 42.5 34.9 58.8 8.9 -3.9 16.7 71.9 -17.5 60.7 39 Mortgages 14.9 24.8 5.1 6.2 1.3 -1.9 -1.6 6.6 7.0 5.3 4.7 -3.5 Bv borrowing sector 40 Commercial banking 46.1 72.9 67.2 60.0 52.9 39.7 44.1 24.3 13.3 62.2 100.2 76.1 41 Savings institutions 19.7 52.2 48.0 27.3 7.4 39.4 -68.6 -33.1 -12.1 37.1 -46.7 3.4 42 Credit unions .1 .6 2.2 .0 1.5 1.5 4.4 2.4 2.0 3.1 .4 2.8 43 Life insurance companies .2 .7 .7 -.7 .6 3.5 1.4 2.4 1.2 2.0 2.5 4.4 44 Government-sponsored enterprises 98.4 278.3 318.2 234.1 290.8 326.2 306.5 191.3 141.7 249.1 321.5 179.7 45 Federally related mortgage pools 114.6 192.6 273.8 199.4 338.5 492.2 285.3 499.8 346.1 171.6 294.9 272.7 46 Issuers of asset-backed securities (ABSs) 202.2 321.4 212.3 189.7 318.0 314.0 430.1 263.7 241.7 198.5 393.5 326.9 47 Finance companies 57.8 57.1 70.3 81.2 -.2 41.8 -25.3 -31.2 80.2 106.4 -4.9 32.5 48 Mortgage companies -16 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 49 Real estate investment trusts (REITs) 39.6 62.7 6.3 2.7 2.5 -2.4 7.8 7.4 25.3 27.7 18.6 17.5 50 Brokers and dealers 8.1 7.2 -17.2 15.6 1.4 12.6 -18.9 -15.7 17.5 15.2 -24.0 38.4 51 Funding corporations 79.9 40.0 91.5 -.4 -55.2 -155.7 9.1 -42.2 18.5 -16.4 37.8 48.1 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 DomesticN onfinancialS tatistics • August 2003 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS '—Continued Billions of dollars; quarterly data at seasonally adjusted annual rates 2001 2002 2003 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999977 11999988 11999999 22000000 22000011 Q3 Q4 Q1 Q2 Q3 Q4 QL All sectors 52 Total net borrowing, all sectors 1,523.9 2,173.4 2,129.7 1,722.9 2,055.5 2,304.5 2,179.4 1,921.0 2,532.0 2,137.3 2,719.1 2,362.7 53 Open market paper 184.1 193.1 229.9 207.6 -164.4 -163.5 37.8 -255.9 -154.3 70.8 -53.3 -16.1 54 U.S. government securities 236.0 418.3 520.7 137.6 623.8 1,027.8 635.2 730.9 1,013.8 686.5 814.8 532.3 55 Municipal securities 56.9 84.2 54.4 23.6 122.8 83.1 174.6 76.6 196.2 156.8 238.2 162.2 56 Corporate and foreign bonds 430.8 580.2 439.1 384.4 669.9 416.4 727.4 605.5 592.4 140.5 773.0 742.2 57 Bank loans n.e.c 128.2 145.0 69.0 112.8 -76.2 -18.5 -164.0 -3.0 -139.0 -54.4 -107.5 -101.6 58 Other loans and advances 93.2 166.3 147.4 136.2 60.4 116.5 -101.8 -22.7 89.7 148.5 -16.0 52.4 59 Mortgages 337.2 511.4 569.7 573.7 710.5 772.1 735.7 706.5 841.9 919.5 1,072.8 915.6 60 Consumer credit 57.5 75.0 99.5 147.0 108.7 70.6 134.5 83.0 91.3 69.1 -2.9 75.7 Funds raised through mutual funds and corporate equities 61 Total net issues 218.7 166.0 191.5 235.3 302.7 146.0 397.2 439.3 279.3 -82.5 294.1 250.5 62 Corporate equities ^6.5 -113.5 .2 .3 101.3 -14.4 141.3 52.4 179.3 -119.6 87.2 47.5 63 Nonfinancial corporations -77.4 -215.5 -110.4 -118.2 -47.4 -108.6 -4.2 -9.8 16.1 -140.3 -27.9 -62.0 64 Foreign shares purchased by U.S. residents 57.6 101.3 114.3 103.6 106.8 43.5 74.7 -5.9 79.7 -51.1 51.7 79.9 65 Financial corporations -26.7 .8 -3.7 14.9 41.9 50.7 70.9 68.1 83.6 71.8 63.4 29.6 66 Mutual fund shares 265.1 279.5 191.2 235.0 201.4 160.4 255.9 386.9 100.0 37.1 206.9 203.0 1. Data in this table also appear in the Board's Z. 1 (780) quarterly statistical release, tables F.2 through F4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A3 5 1.58 SUMMARY OF FINANCIAL TRANSACTIONS1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 2001 2002 2003 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999977 11999988 11999999 22000000 22000011 Q3 Q4 QI Q2 Q3 Q4 QI NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets 1,523.9 2,173.4 2,129.7 1,722.9 2,055.5 2,304.5 2,179.4 1,921.0 2,532.0 2,137.3 2,719.1 2,362.7 7 Domestic nonfederal nonfinancial sectors 15.3 259.1 227.0 -102.3 -26.8 67.8 79.1 146.8 310.7 -197.5 198.9 -79.5 Household 25.3 127.3 217.1 -134.2 -54.6 12.3 47.2 104.4 282.9 -241.0 217.6 -81.2 4 Nonfinancial corporate business -12.7 -16.0 -15.6 31.4 -12.4 -5.7 -12.5 40.2 -18.0 27.9 -61.5 49.1 5 Nonfarm noncorporate business 2.6 13.3 -2.9 1.3 2.0 3.3 2.0 3.3 3.3 -2.2 -1.0 -5.2 6 State and local governments .1 134.5 28.4 -.8 38.1 57.9 42.4 -1.1 42.5 17.8 43.8 —42.1 7 Federal government 5.1 13.5 5.8 7.3 6.0 3.3 7.0 6.2 7.1 7.6 14.2 —.6 8 Rest of the world 259.6 172.5 139.7 225.9 320.6 269.2 432.5 171.8 542.6 463.5 394.8 462.7 9 Financial sectors 1,243.9 1,728.4 1,757.2 1,592.0 1,755.7 1,964.2 1,660.8 1,596.2 1,671.6 1,863.7 2,111.2 1,980.2 10 Monetary authority 38.3 21.1 25.7 33.7 39.9 8.4 85.1 81.6 43.4 67.3 118.7 32.3 11 Commercial banking 324.3 305.6 312.2 357.9 205.2 267.9 314.6 188.9 384.3 624.0 441.6 349.5 17 U.S.-chartered banks 274.9 312.1 318.6 339.5 191.6 242.5 275.0 168.2 343.8 599.9 463.3 305.6 13 Foreign banking offices in United States 40.2 -11.6 -17.0 23.9 -.6 21.1 -7.8 2.1 33.7 21.8 -32.8 23.3 14 Bank holding companies 5.4 -.9 6.2 -12.2 4.2 -1.4 13.6 12.0 1.9 -1.6 .2 20.8 IS Banks in U.S.-affiliated areas 3.7 6.0 4.4 6.7 10.0 5.7 33.9 6.6 4.9 4.0 10.9 -.2 16 Savings institutions -4.7 36.2 67.7 56.2 42.8 -4.7 73.1 12.3 -23.5 80.3 72.5 193.6 17 Credit unions 16.8 18.9 27.5 28.0 41.5 61.1 60.5 58.3 23.2 44.8 44.4 43.5 18 Bank personal trusts and estates -25.0 -12.8 27.8 .8 -28.1 -28.0 -28.1 1.0 .9 .8 .8 -19.3 19 Life insurance companies 104.8 76.9 53.5 57.9 130.9 186.9 81.3 260.6 175.1 267.6 143.4 162.2 20 Other insurance companies 25.2 5.8 -3.0 -8.7 9.0 5.1 28.5 36.7 35.4 21.7 49.0 41.7 21 Private pension funds 47.6 -23.4 17.0 33.4 16.3 29.6 -10.5 52.9 29.2 58.4 9.3 22.0 22 State and local government retirement funds 67.1 72.1 46.9 54.6 -17.7 -74.2 -2.7 70.5 -54.5 -10.4 60.7 2.0 2.3 Money market mutual funds 87.5 244.0 182.0 143.0 246.0 311.8 49.1 -239.1 -88.8 -74.4 301.2 -187.0 24 Mutual funds 80.9 127.3 48.4 21.0 126.0 102.7 139.3 243.3 41.9 162.7 118.4 233.1 2.5 Closed-end funds -2.9 5.2 8.5 -6.3 6.9 19.8 16.3 24.4 -2.6 -1.7 17.0 7.7 26 Government-sponsored enterprises 106.3 314.0 291.3 256.4 309.0 274.3 335.3 236.7 129.0 204.4 256.6 257.4 27 Federally related mortgage pools 114.6 192.6 273.8 199.4 338.5 492.2 285.3 499.8 346.1 171.6 294.9 272.7 2.8 Asset-backed securities issuers (ABSs) 163.8 281.7 194.1 159.9 291.9 288.4 407.3 239.5 219.5 175.9 371.7 303.1 29 Finance companies 23.1 77.3 97.0 108.1 -5.7 -43.3 -100.5 -28.2 39.6 80.0 -22.4 -12.4 30 Mortgage companies -9.1 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 31 Real estate investment trusts (REITs) 20.2 -5.1 -2.6 -7.1 6.7 7.8 14.0 26.3 31.8 27.7 6.7 -8.6 37 Brokers and dealers 14.9 6.8 -34.7 68.9 92.4 184.5 -110.5 -219.5 402.8 -208.6 138.8 12.6 33 Funding corporations 50.4 -15.8 124.0 35.0 -95.8 -126.3 23.4 50.1 -61.1 156.6 -312.0 275.2 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Net flowst hrough credit markets 1,523.9 2,173.4 2,129.7 1,722.9 2,055.5 2,304.5 2,179.4 1,921.0 2,532.0 2,137.3 2,719.1 2,362.7 Other financial sources 35 Official foreign exchange .7 6.6 -8.7 -.4 4.3 13.7 .2 -3.0 12.9 24.6 4.9 4.9 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 2.2 .0 .9 .6 2.4 .0 .6 38 Foreign deposits 107.7 6.5 61.0 135.1 28.0 41.5 17.9 -59.1 53.3 51.8 55.7 79.2 39 Net interbank transactions -19.7 -31.8 15.0 15.1 -28.0 30.6 24.5 3.3 -163.0 58.9 170.0 187.5 40 Checkable deposits and currency 41.2 47.3 151.2 -71.4 204.3 215.0 278.1 -200.5 210.2 208.0 -33.4 272.9 41 Small time and savings deposits 97.1 152.4 45.1 188.8 267.2 230.3 329.7 288.3 215.6 323.4 271.9 260.5 42 Large time deposits 122.5 91.8 131.1 116.2 68.6 19.5 77.8 270.0 34.8 36.8 -125.5 191.4 43 Money market fund shares 155.9 287.2 249.1 233.3 428.6 386.1 379.8 -312.5 100.3 -192.6 337.6 -441.4 44 Security repurchase agreements 120.9 91.3 169.8 113.2 22.3 212.7 -138.3 119.4 362.4 -91.1 29.2 -41.7 45 Corporate equities -46.5 -113.5 .2 .3 101.3 -14.4 141.3 52.4 179.3 -119.6 87.2 47.5 46 Mutual fund shares 265.1 279.5 191.2 235.0 201.4 160.4 255.9 386.9 100.0 37.1 206.9 203.0 47 Trade payables 139.8 106.4 268.6 419.4 -73.0 -137.9 -126.7 190.9 45.0 122.3 135.8 91.9 48 Security credit 111.0 103.2 104.4 146.1 3.1 561.3 -383.7 -190.7 -131.9 -69.6 44.1 181.5 49 Life insurance reserves 59.3 48.0 50.8 50.2 77.2 74.7 119.6 93.9 92.2 119.7 74.3 85.1 50 Pension fund reserves 201.4 217.4 181.8 209.0 210.8 176.4 158.0 137.0 151.0 282.5 203.2 229.9 51 Taxes payable 22.3 19.6 30.7 32.8 17.4 104.9 -55.2 6.0 42.8 53.6 15.1 30.8 52 Investment in bank personal trusts -53.0 -46.1 -8.1 56.6 -59.9 -57.3 -57.7 -3.7 -2.4 -2.1 -1.3 -65.6 53 Noncorporate proprietors' equity ^10.7 -57.8 -62.4 -11.5 -18.6 -34.3 8.4 1.5 -32.9 -83.9 ^T6.8 -21.9 54 Miscellaneous 456.7 909.8 1,043.4 1,386.3 613.1 705.6 86.5 76.2 640.6 693.4 33.8 556.1 55 Total financial sources 3,265.8 4,291.7 4,742.1 4,975.4 4,124.9 4,995.5 3,295.5 2,778.2 4,442.8 3,592.9 4,182.0 4,215.0 Liabilities not identified as assets (—) 56 Treasury currency -.2 -.1 -.7 -1.2 -.1 .9 .0 -1.5 -.9 1.1 -1.1 -.1 57 Foreign deposits 106.2 -8.5 42.6 79.3 8.3 55.3 -38.5 -68.4 105.6 24.1 31.4 117.1 58 Net interbank liabilities -19.9 3.8 .1 20.4 17.2 7.4 22.6 39.8 -9.5 13.2 -15.1 6.2 59 Security repurchase agreements 63.2 57.7 35.7 122.6 -53.9 106.3 -166.2 156.9 220.6 -280.9 -66.9 -106.8 60 Taxes payable 28.0 19.7 11.7 26.2 22.0 25.4 34.6 16.7 ^19.9 21.3 -47.7 -41.9 61 Miscellaneous -285.4 -206.1 -279.6 -391.4 -251.1 159.3 -341.4 -277.5 98.7 93.8 30.4 ^176.6 Floats not included in assets (-) 62 Federal government checkable deposits -2.7 2.6 -7.4 9.0 5.7 -20.1 -91.8 15.1 77.1 ^T0.3 -51.7 153.1 63 Other checkable deposits -3.9 -3.1 -.8 1.7 4.5 5.0 5.7 6.1 7.1 7.6 8.4 9.0 64 Trade credit -25.5 -43.3 6.8 34.3 -6.5 -23.1 78.2 -52.7 -57.3 -20.4 -19.1 -37.4 65 Total identified to sectors as assets 3,405.9 4,469.0 4,933.7 5,074.6 4,378.8 4,679.2 3,792.3 2,943.6 4,051.5 3,773.3 4,313.3 4,592.4 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. El and F.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A86 Domestic Nonfinancial Statistics • August 2003 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period 2001 2002 2003 Transaction ratecrnrv or sprtnr 11999988 11999999 Q3 Q4 Q1 Q2 Q3 Q4 Ql Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 16,238.9 17,305.0 18,164.5 19,299.7 18,922.4 19,299.7 19,541.3 19,857.5 20,190.4 20,685.1 21,009.2 By sector and instrument 2 Federal government 3,752.2 3,681.0 3,385.1 3,379.5 3,320.0 3,379.5 3,430.3 3,451.4 3,540.8 3,637.0 3,700.6 3 Treasury securities 3,723.7 3,652.7 3,357.8 3,352.7 3,293.0 3,352.7 3,404.0 3,424.6 3,513.6 3,609.8 3,673.7 4 Budget agency securities and mortgages 28.5 28.3 27.3 26.8 27.0 26.8 26.3 26.8 27.2 27.3 26.9 5 Nonfederal 12,486.7 13,624.0 14,779.4 15,920.2 15,602.4 15,920.2 16,111.0 16,406.1 16,649.6 17,048.1 17,308.6 By instrument 6 Commercial paper 193.0 230.3 278.4 190.1 201.3 190.1 167.5 148.4 142.2 126.0 127.1 / Municipal securities and loans 1,402.9 1,457.2 1,480.9 1,603.6 1,557.5 1,603.6 1,627.3 1,681.9 1,708.4 1,770.6 1,815.9 8 Corporate bonds 1,846.0 2,063.9 2,225.1 2,565.6 2,484.4 2,565.6 2,629.0 2,676.9 2,669.6 2,698.2 2,742.9 y Bank loans n.e.c 1,150.2 1,233.2 1,335.0 1,253.5 1,287.5 1,253.5 1,240.1 1,195.0 1,162.2 1,171.1 1,146.5 10 Other loans and advances 907.2 953.5 1,059.6 1,088.8 1,110.1 1,088.8 1,089.6 1,106.0 1,116.9 1,124.3 1,128.0 n Mortgages 5,640.9 6,239.9 6.807.4 7,516.6 7,332.4 7,516.6 7,680.2 7,896.7 8,128.3 8,395.9 8,613.5 12 Home 4,362.9 4,787.2 5,205.4 5,738.1 5,605.0 5,738.1 5,877.2 6,049.6 6,247.9 6,460.0 6,643.6 13 Multifamily residential 307.8 343.8 377.6 425.5 411.4 425.5 432.8 443.9 451.1 468.7 478.0 14 Commercial 873.6 1,006.5 1,115.5 1,236.6 1,201.4 1,236.6 1,252.0 1,282.8 1,305.7 1,341.4 1,365.3 lb Farm 96.6 102.3 108.9 116.3 114.6 116.3 118.1 120.4 123.6 125.8 126.7 16 Consumer credit 1,346.6 1,446.1 1,593.1 1,701.9 1,629.3 1,701.9 1,677.2 1,701.3 1,722.0 1,762.0 1,734.8 By borrowing sector 1/ Households 6,009.6 6,507.8 7,072.7 7,686.4 7,492.5 7,686.4 7,802.0 7,988.1 8,185.0 8,454.4 8,603.3 18 Nonfinancial business 5,338.8 5,939.4 6,514.3 6,935.8 6,849.8 6,935.8 6,989.1 7,047.6 7,070.1 7,144.2 7,214.4 iy Corporate 3,791.2 4,204.0 4,583.9 4,841.1 4,793.1 4,841.1 4,867.2 4,887.7 4,876.2 4,908.5 4,951.8 20 Nonfarm noncorporate 1,383.7 1,566.1 1,750.2 1,907.0 1,870.8 1,907.0 1,934.7 1,968.0 1,999.0 2,039.0 2,067.5 21 Farm 163.9 169.4 180.2 187.7 185.9 187.7 187.1 191.8 194.9 196.6 195.1 22 State and local government 1,138.3 1,176.9 1,192.3 1,298.0 1,260.0 1,298.0 1,319.9 1,370.5 1,394.5 1,449.5 1,490.9 23 Foreign credit market debt held in United States 651.3 676.7 742.3 704.9 701.7 704.9 724.5 725.5 720.2 723.1 727.8 24 Commercial paper 72.9 89.2 120.9 106.7 106.3 106.7 123.6 130.2 134.0 142.8 155.7 25 Bonds 462.6 476.7 500.6 488.4 481.0 488.4 487.9 477.6 471.8 467.6 461.2 2b Bank loans n.e.c 58.7 59.2 70.5 63.2 67.3 63.2 66.7 72.2 69.3 68.6 67.6 27 Other loans and advances 57.1 51.6 50.3 46.6 47.0 46.6 46.4 45.5 45.0 44.2 43.4 28 Total credit market debt owed by nonfinancial sectors, domestic and foreign 16,890.2 17,981.7 18,906.9 20,004.6 19,624.0 20,004.6 20,265.8 20,583.0 20,910.6 21,408.3 21,737.0 Financial sectors 29 Total credit market debt owed by financial sectors 6,543.6 7,616.8 8,437.6 9,393.2 9,118.1 9,393.2 9,589.5 9,803.8 10,007.8 10,317.0 10,543.9 By instrument 30 Federal government-related 3,292.0 3,884.0 4.317.4 4,944.1 4,796.2 4,944.1 5,116.9 5,238.8 5,344.0 5,498.1 5,611.2 31 Government-sponsored enterprise securities . .. 1,273.6 1,591.7 1,825.8 2,114.0 2,037.4 2,114.0 2,161.8 2,197.2 2,259.5 2,339.9 2,384.8 32 Mortgage pool securities 2,018.4 2,292.2 2,491.6 2,830.1 2,758.8 2,830.1 2,955.1 3,041.6 3,084.5 3,158.2 3,226.4 33 Loans from U.S. government .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 3,251.6 3,732.8 4,120.1 4,449.1 4,321.9 4,449.1 4,472.6 4,564.9 4,663.8 4,818.9 4,932.7 35 Open market paper 906.7 1,082.9 1,210.7 1,148.8 1,110.2 1,148.8 1,090.9 1,046.9 1,049.5 1,078.7 1,048.4 36 Corporate bonds 1,878.7 2,085.9 2,297.2 2,638.7 2,562.1 2,638.7 2,731.1 2,849.1 2,904.0 3,054.8 3,206.8 37 Bank loans n.e.c 105.8 91.5 91.1 104.2 97.8 104.2 102.3 110.6 130.3 105.3 92.9 38 Other loans and advances 288.7 395.8 438.3 473.2 467.2 473.2 462.4 470.8 491.2 489.9 495.4 3y Mortgages 71.6 76.7 82.9 84.2 84.6 84.2 85.9 87.6 88.9 90.1 89.2 By borrowing sector 40 Commercial banks 188.6 230.0 266.7 296.0 281.4 296.0 295.8 310.4 318.9 325.8 325.0 41 Bank holding companies 193.5 219.3 242.5 266.1 272.7 266.1 269.0 264.2 271.8 286.4 302.8 42 Savings institutions 212.4 260.4 287.7 295.1 305.6 295.1 280.5 275.3 286.4 281.4 276.0 43 Credit unions 1.1 3.4 3.4 4.9 3.8 4.9 5.5 6.0 6.8 6.9 7.6 44 Life insurance companies 2.5 3.2 2.5 3.1 2.8 3.1 3.7 4.0 4.5 5.1 6.3 45 Government-sponsored enterprises 1,273.6 1,591.7 1,825.8 2,114.0 2,037.4 2,114.0 2,161.8 2,197.2 2,259.5 2,339.9 2,384.8 46 Federally related mortgage pools 2,018.4 2,292.2 2,491.6 2,830.1 2,758.8 2,830.1 2,955.1 3,041.6 3,084.5 3,158.2 3,226.4 47 Issuers of asset-backed securities (ABSs) 1,398.0 1,610.3 1,812.0 2,130.0 2,019.5 2,130.0 2,188.1 2,250.0 2,303.0 2,404.3 2,478.1 48 Brokers and dealers 42.5 25.3 40.9 42.3 47.1 42.3 38.4 42.8 46.6 40.6 50.2 49 Finance companies 625.5 695.7 776.9 776.7 771.2 776.7 760.8 784.9 802.9 814.4 813.6 50 Mortgage companies 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 51 Real estate investment trusts (REITs) 158.8 165.1 167.8 170.2 168.3 170.2 172.1 178.4 185.3 190.0 194.4 52 Funding corporations 412.6 504.0 503.7 448.4 433.6 448.4 442.6 432.8 421.5 447.9 462.7 All sectors 53 Total credit market debt, domestic and foreign . 23,433.8 25,598.4 27,344.4 29,397.8 28,742.1 29,397.8 29,855.3 30,386.8 30,918.4 31,725.2 32,281.0 54 Open market paper 1,172.6 1,402.4 1,610.0 1,445.6 1,417.8 1,445.6 1,382.0 1,325.5 1,325.7 1,347.5 1,331.1 55 U.S. government securities 7,044.2 7,564.9 7,702.5 8,323.6 8,116.2 8,323.6 8,547.2 8,690.2 8,884.8 9,135.1 9,311.8 56 Municipal securities 1,402.9 1,457.2 1,480.9 1,603.6 1,557.5 1,603.6 1,627.3 1,681.9 1,708.4 1,770.6 1,815.9 57 Corporate and foreign bonds 4,187.4 4,626.4 5,022.9 5,692.7 5,527.4 5,692.7 5,848.0 6,003.6 6,045.5 6,220.6 6,410.9 58 Bank loans n.e.c 1,314.8 1,383.8 1.496.6 1,421.0 1,452.6 1,421.0 1,409.1 1,377.8 1,361.7 1,345.0 1,307.0 59 Other loans and advances 1,253.0 1,400.9 1,548.2 1,608.6 1,624.4 1,608.6 1,598.4 1,622.3 1,653.1 1,658.4 1,666.8 60 Mortgages 5,712.5 6,316.6 6,890.3 7,600.8 7,417.0 7,600.8 7,766.1 7,984.3 8,217.2 8,486.0 8,702.8 61 Consumer credit 1,346.6 1,446.1 1,593.1 1,701.9 1,629.3 1,701.9 1,677.2 1,701.3 1,722.0 1,762.0 1,734.8 1. Data in this table appear in the Board's Z.l (780) quarterly statistical release, tables L.2 through L.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A3 5 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 2001 2002 2003 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999988 11999999 22000000 22000011 Q3 Q4 Ql Q2 Q3 Q4 Ql CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 23,433.8 25,598.4 27,344.4 29,397.8 28,742.1 29,397.8 29,855.3 30,386.8 30,918.4 31,725.2 32,281.0 2 Domestic nonfederal nonfinancial sectors 3,312.6 3,600.5 3,461.6 3,421.2 3,362.6 3,421.2 3,443.6 3,506.8 3,434.0 3,535.9 3,501.6 Household 2,264.1 2,542.1 2,379.3 2,311.1 2,279.7 2,311.1 2,342.9 2,394.4 2,314.9 2,402.0 2,387.9 4 Nonfinancial corporate business 241.5 226.0 249.4 237.1 220.9 237.1 226.3 223.0 230.0 234.2 225.1 5 Nonfarm noncorporate business 67.5 64.6 65.9 67.9 67.4 67.9 68.7 69.6 69.0 68.8 67.5 6 State and local governments 739.4 767.8 767.0 805.1 794.6 805.1 805.6 819.7 820.1 830.9 821.2 7 Federal government 219.0 258.0 265.3 271.3 269.6 271.3 272.9 274.6 276.6 280.1 279.9 8 Rest of the world 2,278.2 2,354.6 2,621.1 2,954.4 2,837.5 2,954.4 3,000.6 3,133.2 3,252.9 3,347.6 3,466.3 9 Financial sectors 17,624.1 19,385.4 20,996.4 22,750.9 22,272.4 22,750.9 23,138.2 23,472.2 23,955.0 24,561.6 25,033.1 10 Monetary authority 452.5 478.1 511.8 551.7 534.1 551.7 575.4 590.7 604.2 629.4 641.5 11 Commercial banking 4,336.1 4,648.3 5,006.3 5,210.5 5,100.6 5,210.5 5,231.3 5,328.3 5,476.2 5,620.2 5,679.0 17. U.S.-chartered banks 3,761.4 4,080.0 4,419.5 4,610.1 4,513.5 4,610.1 4,629.3 4,719.7 4,858.4 5,003.9 5,055.6 N Foreign banking offices in United States 504.5 487.4 511.3 510.7 509.3 510.7 507.7 512.6 521.2 516.9 519.0 14 Bank holding companies 26.5 32.7 20.5 24.7 21.3 24.7 27.7 28.1 27.7 27.8 33.0 IS Banks in U.S.-affiliated areas 43.8 48.3 55.0 65.0 56.5 65.0 66.6 67.9 68.8 71.6 71.5 16 Savings institutions 964.7 1,032.4 1,088.6 1,131.4 1,118.1 1,131.4 1,134.7 1,130.9 1,153.8 1,166.8 1,215.5 17 Credit unions 324.2 351.7 379.7 421.2 408.4 421.2 434.3 443.2 455.3 463.9 473.2 18 Bank personal trusts and estates 194.1 222.0 222.8 194.7 201.8 194.7 195.0 195.2 195.4 195.6 190.8 19 Life insurance companies 1,828.0 1,886.0 1,943.9 2,074.8 2,054.8 2,074.8 2,136.9 2,180.1 2,250.6 2,286.5 2,323.3 70 Other insurance companies 521.1 518.2 509.4 518.4 511.3 518.4 527.6 536.4 541.9 554.1 564.5 7.1 Private pension funds 651.2 668.2 701.6 717.9 720.6 717.9 731.2 738.5 753.1 755.4 760.9 22 State and local government retirement funds 704.6 751.4 806.0 788.4 789.0 788.4 806.0 792.4 789.8 804.9 805.4 23 Money market mutual funds 965.9 1,147.8 1,290.9 1,536.9 1,494.9 1,536.9 1,496.9 1,419.3 1,405.7 1,511.6 1,485.5 74 Mutual funds 1,028.4 1,076.8 1,097.8 1,223.8 1,188.2 1,223.8 1,276.8 1,291.6 1,334.5 1,365.4 1,415.3 75 Closed-end funds 98.4 106.9 100.6 107.4 103.3 107.4 113.5 112.9 112.4 116.7 118.6 26 Government-sponsored enterprises 1,252.3 1,543.5 1,807.1 2,114.3 2,026.1 2,114.3 2,163.8 2,199.9 2,252.9 2,320.9 2,375.8 27 Federally related mortgage pools 2,018.4 2,292.2 2,491.6 2,830.1 2,758.8 2,830.1 2,955.1 3,041.6 3,084.5 3,158.2 3,226.4 78 Asset-backed securities (ABSs) issuers 1,219.4 1,413.6 1,585.4 1,877.3 1,772.5 1,877.3 1,929.4 1,985.7 2,033.0 2,128.9 2,196.8 2.9 Finance companies 645.5 742.5 850.5 844.8 859.5 844.8 832.4 845.6 857.1 862.0 853.1 30 Mortgage companies 32.1 32.1 32.1 32.1 32.1 32.1 32.1 32.1 32.1 32.1 32.1 31 Real estate investment trusts (REITs) 45.5 42.9 35.8 42.5 39.0 42.5 49.1 57.0 63.9 65.6 63.5 37 Brokers and dealers 189.4 154.7 223.6 316.0 366.4 316.0 299.6 352.6 335.2 344.4 389.2 33 Funding corporations 152.3 276.0 311.0 216.7 193.0 216.7 217.3 198.2 219.5 175.1 219.3 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Total credit market debt 23,433.8 25,598.4 27,344.4 29,397.8 28,742.1 29,397.8 29,855.3 30,386.8 30,918.4 31,725.2 32,281.0 Other liabilities 35 Official foreign exchange 60.1 50.1 46.1 46.8 49.0 46.8 45.7 47.2 53.1 55.8 57.6 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 24.5 24.5 24.7 24.8 25.5 25.5 25.6 38 Foreign deposits 642.3 703.6 824.5 908.9 848.0 908.9 894.1 907.4 920.4 934.3 954.1 39 Net interbank liabilities 189.4 202.4 221.2 191.4 174.4 191.4 162.4 132.3 150.7 205.9 223.4 40 Checkable deposits and currency 1,333.3 1,484.5 1,413.1 1,603.2 1,487.1 1,603.2 1,518.1 1,571.9 1,610.7 1,649.3 1,683.4 41 Small time and savings deposits 2,626.5 2,671.6 2,860.4 3,127.6 3,047.6 3,127.6 3,236.7 3,256.4 3,336.8 3,402.4 3,505.9 42 Large time deposits 805.3 936.4 1,052.6 1,121.1 1,094.2 1,121.1 1,178.9 1,188.7 1,199.9 1,175.2 1,212.7 43 Money market fund shares 1,329.7 1,578.8 1,812.1 2,240.7 2,115.4 2,240.7 2,203.3 2,150.3 2,105.9 2,223.9 2,156.2 44 Security repurchase agreements 913.8 1,083.6 1,196.8 1,231.8 1,251.9 1,231.8 1,262.4 1,343.1 1,313.7 1,336.8 1,325.3 45 Mutual fund shares 3,613.1 4,538.5 4,434.6 4,135.5 3,753.1 4,135.5 4,247.0 3,926.6 3,452.3 3,639.4 3,586.8 46 Security credit 572.2 676.6 822.7 825.9 919.9 825.9 778.0 745.6 726.3 738.8 784.5 47 Life insurance reserves 718.3 783.9 819.1 880.0 844.0 880.0 904.2 915.2 927.9 951.4 968.7 48 Pension fund reserves 8,208.4 9,065.3 9,069.0 8,695.8 8,281.0 8,695.8 8,824.7 8,331.9 7,732.0 8,014.2 7,936.1 49 Trade payables 2,073.8 2,342.4 2,761.9 2,688.8 2,705.4 2,688.8 2,714.8 2,716.4 2,764.6 2,812.4 2,814.1 50 Taxes payable 170.7 201.4 234.2 251.6 270.1 251.6 259.4 266.1 282.0 281.0 294.7 51 Investment in bank personal trusts 1,001.0 1,130.4 1,095.8 960.7 916.5 960.7 963.2 893.5 811.6 840.9 806.3 52 Miscellaneous 7,638.0 8,527.4 9,717.9 10,343.0 10,816.7 10,343.0 10,345.1 10,634.3 11,043.4 11,013.6 11,281.9 53 Total liabilities 55,358.7 61,602.4 65,751.7 68,677.5 67,343.2 68,677.5 69,420.1 69,440.9 69,377.4 71,028.1 71,900.4 Financial assets not included in liabilities (+) 54 Gold and special drawing rights 21.6 21.4 21.6 21.8 22.0 21.8 21.9 22.3 22.8 23.2 22.4 55 Corporate equities 15,548.5 19,545.7 17,606.5 15,267.1 13,684.2 15,267.1 15,292.8 13,393.0 10,993.2 11,833.9 11,370.5 56 Household equity in noncorporate business 4,279.4 4,510.0 4,748.4 4,831.0 4,857.0 4,831.0 4,857.4 4,925.5 4,981.5 5,024.3 5,068.7 Liabilities not identified as assets (-) 57 Treasury currency -6.4 -7.1 -8.5 -8.6 -8.6 -8.6 -8.9 -9.1 -8.9 -9.1 -9.2 58 Foreign deposits 542.8 585.7 650.9 715.6 668.9 715.6 698.5 724.9 731.0 738.8 768.1 59 Net interbank transactions -26.5 -28.5 -4.3 11.1 4.5 11.1 21.9 18.4 16.5 15.3 19.4 60 Security repurchase agreements 230.6 266.4 388.9 348.6 398.7 348.6 401.4 462.1 381.6 356.0 342.6 61 Taxes payable 121.2 129.4 146.3 121.7 167.3 121.7 110.4 163.9 155.2 157.1 141.0 62 Miscellaneous -1,951.9 -2,395.2 -3,394.2 -3,637.3 -3,125.1 -3,637.3 -3,589.1 -3,609.5 -3,510.4 -3,483.5 -3,527.3 Floats not included in assets (-) 63 Federal government checkable deposits -3.9 -9.8 -2.3 -12.3 -4.0 -12.3 -9.6 -9.3 -14.8 -11.7 27.4 64 Other checkable deposits 23.1 22.3 24.0 28.6 19.2 28.6 26.3 31.4 25.8 35.9 34.2 65 Trade credit 84.8 95.6 122.0 115.5 16.4 115.5 56.5 10.0 2.4 78.1 22.6 66 Totals identified to sectors as assets 76,194.3 87,020.6 90,205.4 91,114.5 87,769.0 91,114.5 91,884.7 89,998.9 87,596.4 90,032.6 90,543.3 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 • August 2003 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 2002 2003 2002 2003 2002 2003 SSeerriieess Q2 Q3 Q4 Qlr Q2 Q3 Q4 Qlr Q2 Q3 Q4 Qlr Output (1997=100) Capacity (percent of 1997 output) Capacity utilization rate (percent)2 1 Total industry 110.5 111.4 110.4 110.5 145.9 146.2 146.6 147.0 75.7 76.2 75.3 75.2 2 Manufacturing 111.4 112.3 111.2 111.0 150.9 151.1 151.4 151.7 73.9 74.3 73.5 73.2 3 Manufacturing (NAICS) 111.8 112.6 111.5 111.3 152.2 152.5 152.8 153.2 73.5 73.8 73.0 72.6 4 Durable manufacturing 121.2 122.3 121.4 121.2 172.5 173.4 174.2 175.0 70.2 70.5 69.7 69.3 i Primary metal 85.6 85.9 86.0 84.0 112.0 111.4 110.8 110.7 76.4 77.1 77.6 75.9 6 Fabricated metal products 99.1 99.5 98.9 97.1 139.3 139.4 139.6 139.8 71.2 71.3 70.8 69.5 V Machinery 88.6 88.7 86.7 87.2 129.9 129.9 129.9 129.8 68.2 68.3 66.7 67.2 8 Computer and electronic products 219.6 222.6 224.4 227.8 350.1 355.4 360.3 365.9 62.7 62.6 62.3 62.2 9 Electrical equipment, appliances. and components 98.3 97.7 96.8 95.6 129.1 128.6 128.2 128.0 76.1 75.9 75.5 74.7 10 Motor vehicles and parts 116.8 121.7 120.0 120.4 145.9 147.1 148.4 149.9 80.0 82.7 80.8 80.4 11 Aerospace and miscellaneous transportation equipment 87.6 85.9 85.1 85.8 145.5 145.3 145.1 145.1 60.2 59.1 58.7 59.1 12 Nondurable manufacturing 99.7 100.1 98.8 98.5 127.7 127.5 127.3 127.2 78.1 78.5 77.6 77.4 13 Food, beverage, and tobacco products .... 100.8 100.1 98.8 98.3 125.8 125.7 125.6 125.5 80.2 79.7 78.7 78.4 14 Textile and product mills 83.3 82.9 81.2 79.1 112.3 111.7 111.1 110.6 74.2 74.2 73.1 71.5 15 Paper 94.2 95.7 95.8 93.5 114.2 114.0 113.8 113.5 82.5 84.0 84.2 82.4 16 Petroleum and coal products 103.3 102.3 102.8 102.6 114.9 115.2 115.7 116.1 89.9 88.7 88.9 88.4 1/ Chemical 105.3 106.4 104.1 105.4 141.2 141.2 141.3 141.5 74.6 75.3 73.7 74.5 18 Plastics and rubber products 106.6 107.3 105.6 105.3 134.2 133.6 132.9 132.4 79.4 80.4 79.4 79.5 19 Other manufacturing (non-NAICS) 104.6 106.0 106.0 107.0 130.3 129.5 128.7 128.2 80.3 81.8 82.3 83.4 20 Mining 93.4 93.5 93.7 93.1 110.2 110.1 110.2 110.3 84.8 84.9 85.1 84.4 21 Electric and gas utilities 110.2 112.5 111.5 114.3 125.5 127.6 129.7 131.5 87.8 88.2 86.0 86.9 MEMOS 22 Computers, communications equipment, and semiconductors 290.3 295.5 300.4 306.2 466.7 475.3 483.3 493.3 62.2 62.2 62.2 62.1 23 Total excluding computers, communications equipment, and semiconductors 100.6 101.3 100.3 100.3 130.4 130.5 130.6 130.8 77.1 77.6 76.8 76.6 24 Manufacturing excluding computers, communications equipment, and semiconductors 99.9 100.5 99.4 99.1 132.6 132.6 132.6 132.6 75.3 75.8 75.0 74.7 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 High Low High Low High Low May Dec. Jan. Feb.' Mar.' Apr.' Mayp Capacity utilization rate (percent)2 1 Total industry 88.8 74.0 86.6 70.8 85.1 78.6 75.7 74.9 75.3 75.3 74.8 74.3 74.3 2 Manufacturing 88.0 71.6 86.3 68.6 85.5 77.2 73.9 73.0 73.3 73.3 73.1 72.5 72.6 3 Manufacturing (NAICS) 88.1 71.4 86.3 67.9 85.5 77.0 73.5 72.5 72.8 72.7 72.4 71.8 71.9 4 Durable manufacturing 88.9 69.6 87.0 63.1 84.5 73.4 70.3 69.1 69.8 69.3 68.7 68.3 68.3 5 Primary metal 100.9 68.9 91.3 47.2 95.3 75.2 76.7 76.1 76.9 77.0 73.8 74.4 73.5 6 Fabricated metal products .... 91.8 69.6 83.1 61.7 80.1 71.0 71.6 70.4 70.1 69.5 68.9 68.3 68.8 7 Machinery 94.2 74.2 92.8 58.3 84.7 72.9 68.2 66.0 66.8 67.4 67.3 67.0 66.8 8 Computer and electronic products 87.0 66.9 89.8 77.3 81.5 76.4 62.8 62.0 62.3 62.2 62.3 62.1 62.5 9 Electrical equipment, appliances, and components 99.3 68.5 91.9 64.4 87.5 75.0 76.7 75.6 74.7 75.1 74.3 74.0 74.6 10 Motor vehicles and parts 95.3 55.3 96.2 45.2 90.0 56.6 79.3 79.1 82.3 80.1 78.7 77.4 76.3 11 Aerospace and miscellaneous transportation equipment . 75.0 66.3 84.6 69.8 88.9 81.9 60.2 58.7 59.3 59.0 59.1 58.9 59.5 12 Nondurable manufacturing 87.5 72.5 85.7 75.6 86.9 81.8 78.1 77.2 77.2 77.4 77.6 76.9 77.1 13 Food, beverage, and tobacco products 85.9 78.0 84.3 80.2 85.5 81.3 80.0 78.3 78.5 78.2 78.4 78.0 78.1 14 Textile and product mills .... 89.8 62.8 90.1 72.3 91.1 77.1 74.5 72.8 70.7 71.7 72.2 71.2 70.7 15 Paper 97.4 74.7 95.6 81.3 94.0 85.4 83.2 83.5 81.9 81.9 83.3 82.1 82.1 16 Petroleum and coal products . . 93.2 81.0 92.3 71.1 88.9 82.5 90.0 90.7 88.0 87.7 89.4 87.3 88.5 17 Chemical 85.0 68.9 83.0 67.9 85.6 80.8 74.4 73.2 73.8 74.9 74.8 74.3 74.1 18 Plastics and rubber products . . 96.3 61.6 90.5 70.5 91.2 77.1 79.5 78.8 79.1 79.5 80.0 79.1 80.0 19 Other manufacturing (non-NAICS). 85.7 75.7 88.1 85.7 90.2 79.1 80.0 82.4 82.0 83.9 84.4 83.4 83.6 20 Mining 93.6 87.6 94.2 78.6 85.6 83.3 84.8 86.4 84.9 84.1 84.1 84.3 85.0 21 Electric and gas utilities 96.2 82.7 87.9 77.2 92.6 84.2 87.7 84.8 87.8 88.4 84.6 84.3 83.4 MEMOS 22 Computers, communications equipment, and semiconductors . 84.5 63.1 89.9 75.6 80.4 74.6 62.3 61.7 61.8 62.1 62.3 62.5 62.5 23 Total excluding computers, communications equipment, and semiconductors 89.1 74.3 86.6 70.5 85.5 78.8 77.1 76.4 76.8 76.8 76.2 75.7 75.7 24 Manufacturing excluding computers communications equipment, and semiconductors . 88.3 71.9 86.3 68.1 86.1 77.3 75.3 74.5 74.9 74.8 74.6 73.9 74.0 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 • August 2003 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data seasonally adjusted 1992 2002 2003 U „ roup p p r o o r - - 2 a 0 v 0 g 2 . tion May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb.' Mar.' Apr.' Mayp Index(1997= 100) MAJOR MARKETS 1 Total IP 100.0 110.5 110.4 110.8 111.6 111.3 111.2 110.6 110.8 109.9 110.7 110.7 110.1 109.4 109.6 Market groups 2 Final products and nonindustrial supplies 60.8 109.3 109.3 109.6 110.1 109.8 109.8 109.1 109.3 108.2 109.1 109.3 108.8 108.1 108.2 3 Consumer goods 29.0 107.5 107.3 107.8 108.5 107.8 107.9 107.0 107.8 106.6 107.7 107.8 107.3 106.6 106.5 4 Durable 5.8 117.3 117.2 118.6 120.0 119.3 118.7 117.0 121.0 117.8 120.5 118.5 117.9 117.0 116.3 5 Automotive products 2.5 125.4 124.2 127.4 130.6 130.6 129.3 125.9 132.4 125.9 131.3 128.8 127.4 126.1 124.4 6 Home electronics 0.4 142.9 143.8 135.3 137.0 135.4 142.6 140.1 142.1 145.3 152.7 145.9 152.0 155.0 156.6 7 Appliances, furniture, carpeting 1.3 106.9 109.1 107.5 106.9 104.5 104.6 104.9 107.1 107.7 105.4 105.5 105.7 105.7 107.1 8 Miscellaneous goods 1.6 98.5 98.9 100.2 99.2 98.3 97.8 98.2 98.3 98.7 98.7 96.9 96.2 95.0 94.8 y Nondurable 23.2 104.1 103.9 104.1 104.6 103.8 104.2 103.6 103.3 102.8 103.4 104.1 103.7 103.0 103.1 10 Non-energy 20.2 102.6 102.2 102.8 102.8 102.4 102.6 102.0 101.3 100.8 101.1 101.6 101.8 101.1 101.1 n Foods and tobacco 10.4 99.5 100.0 100.2 99.8 99.2 99.1 98.7 97.9 97.4 97.6 97.2 97.4 96.8 96.9 12 Clothing 2.4 72.4 72.9 72.9 73.2 71.3 72.1 70.2 70.6 69.9 69.7 69.1 68.0 66.4 66.0 13 Chemical products 4.6 119.1 116.8 118.3 119.5 119.0 119.5 118.3 118.0 116.9 117.9 120.2 120.6 120.1 119.9 14 Paper products 2.9 108.1 106.2 107.2 107.1 108.4 109.8 110.0 108.8 109.0 108.3 110.2 111.1 109.9 110.4 15 Energy 3.0 112.0 112.5 110.9 114.0 111.6 112.8 111.8 114.0 113.3 115.7 117.2 113.8 113.3 113.3 16 Business equipment 13.2 107.3 108.0 108.0 107.3 108.1 106.9 106.0 106.1 104.6 105.6 105.9 105.5 104.9 104.9 17 Transit 2.5 81.2 82.0 81.1 80.2 81.1 79.7 77.3 77.9 75.4 75.7 74.5 73.9 73.1 72.7 18 Information processing 5.4 153.8 154.9 154.9 153.5 153.7 152.1 153.1 152.8 152.7 155.1 156.3 158.0 157.9 159.3 19 Industrial and other 5.3 91.5 91.9 92.2 92.0 92.9 92.0 91.2 91.1 89.7 90.4 90.8 89.9 89.2 88.9 20 Defense and space equipment 3.4 101.2 100.6 101.2 101.2 101.9 102.0 102.5 101.7 102.3 104.1 104.8 105.1 104.7 106.4 21 Construction supplies 5.4 104.0 104.6 104.5 104.4 104.8 104.5 104.2 103.8 102.4 102.3 101.8 101.4 100.5 100.8 22 Business supplies 9.1 121.9 121.5 121.8 123.2 122.6 123.6 123.1 122.5 121.9 122.8 123.7 122.5 121.5 121.7 23 Materials 39.2 112.2 112.2 112.6 113.8 113.6 113.4 112.8 113.1 112.4 113.0 112.8 112.0 111.5 111.7 24 Non-energy 29.6 115.8 115.8 116.4 117.2 117.4 117.2 116.7 116.7 115.6 116.0 115.9 115.4 114.7 114.9 25 Durable 20.7 128.0 127.8 128.6 129.4 130.0 129.5 129.5 129.7 128.1 129.1 128.6 127.6 126.9 127.4 26 Consumer parts 4.0 110.8 110.1 110.4 113.4 112.3 112.4 111.7 114.6 111.1 113.8 111.9 110.8 109.7 109.7 27 Equipment parts 7.5 182.6 182.3 183.6 184.2 186.3 185.7 185.7 185.3 184.4 186.0 186.2 185.9 186.1 187.5 28 Other 9.2 97.1 97.2 97.9 97.7 98.3 97.7 98.0 97.2 96.4 96.3 96.3 95.1 94.5 94.8 29 Nondurable 8.9 97.0 97.3 97.6 98.4 98.2 98.3 97.1 97.0 96.5 96.2 96.4 96.7 95.8 95.7 30 Textile 1.1 77.6 78.2 78.5 79.6 77.8 78.4 77.2 77.0 75.3 74.1 74.2 73.8 72.9 72.0 31 Paper 1.8 94.8 94.8 93.6 95.8 96.1 96.7 96.8 96.9 95.8 94.4 93.6 94.7 93.1 93.5 32 Chemical 4.0 99.1 100.4 100.6 101.3 100.7 100.2 98.2 97.9 97.3 98.3 99.2 99.4 98.8 98.4 33 Energy 9.6 98.7 98.5 98.6 101.0 99.3 99.1 98.4 99.4 99.7 100.9 100.8 99.2 99.2 99.4 SPECIAL AGGREGATES 34 Total excluding computers, communication equipment, and semiconductors 94.7 100.5 100.5 100.8 101.5 101.2 101.2 100.5 100.6 99.8 100.5 100.5 99.8 99.1 99.2 35 Total excluding motor vehicles and parts 94.3 110.0 110.1 110.3 110.8 110.5 110.5 110.0 109.8 109.3 109.8 110.1 109.5 108.9 109.2 Gross value (billions of 1996 dollars, annual rates) 36 Final products and nonindustrial supplies 100.0 2,793.1 2,802.2 2,809.9 2,828.0 2,821.5 2,817.8 2,793.6 2,817.8 2,783.5 2,808.6 2,807.2 2,792.6 2,774.3 2,775.4 37 Final products 77.2 2,018.6 2,021.4 2,028.7 2,042.2 2,038.1 2,031.4 2,010.8 2,037.3 2,010.7 2,032.1 2,028.9 2,020.7 2,008.2 2,008.1 38 Consumer goods 51.9 1,384.6 1,384.8 1,390.2 1,404.1 1,395.9 1,394.3 1,379.1 1,402.0 1,384.1 1,399.9 1,395.8 1,389.5 1,379.6 1,378.3 39 Equipment total 25.3 624.9 628.1 629.9 627.9 633.6 627.7 622.6 624.4 615.8 620.9 622.5 620.9 618.8 620.5 40 Nonindustrial supplies 22.8 774.4 780.9 781.3 785.9 783.5 786.6 783.2 780.5 772.8 776.4 778.3 771.8 766.0 767.2 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 Group N c A od 1 e C 2 S p p r o o r - - 2 a 0 v 0 g 2 . May June July Aug. Sept. Apr.' Mayp Index(1997=100) INDUSTRY GROUPS 41 Manufacturing 85.4 111.4 111.4 111.9 112.3 112.4 112.1 111.4 111.6 110.6 111.1 111.1 110.9 110.1 110.3 42 Manufacturing (NAICS) 79.1 111.7 111.9 112.2 112.7 112.8 112.4 111.7 112.0 110.8 111.5 111.3 111.0 110.2 110.4 43 Durable manufacturing 43.0 121.1 121.2 121.8 122.2 122.7 122.0 121.5 122.2 120.5 121.9 121.3 120.5 119.9 120.2 44 Wood products 321 1.5 100.5 101.0 102.2 101.9 102.5 100.7 99.2 98.3 96.9 97.4 96.5 95.3 96.7 96.7 45 Nonmetallic mineral products 327 2.0 107.9 107.7 106.6 107.7 108.5 109.8 109.3 110.2 108.0 109.7 108.0 108.0 106.8 107.7 46 Primary metal 331 2.7 85.6 85.9 86.2 85.0 87.6 85.0 87.6 86.2 84.1 85.0 85.2 81.7 82.4 81.5 47 Fabricated metal products . 332 5.3 99.0 99.7 99.3 99.7 99.3 99.4 99.8 98.7 98.3 97.9 97.1 96.3 95.5 96.2 48 Machinery 333 5.7 87.9 88.5 88.9 88.4 89.4 88.2 86.8 87.4 85.8 86.7 87.4 87.3 86.9 86.6 49 Computer and electronic products 334 8.8 220.4 220.0 220.8 221.5 223.0 223.2 224.2 224.5 224.5 226.6 227.5 229.1 229.8 232.5 50 Electrical equipment, appliances, and components 335 2.5 97.7 98.9 98.7 98.4 98.0 96.5 96.6 97.0 96.9 95.7 96.1 95.0 94.6 95.4 51 Motor vehicles and parts . . 3361-3 5.7 117.3 115.8 118.6 122.1 122.0 121.1 118.3 123.9 117.8 122.9 120.0 118.4 116.7 115.5 52 Aerospace and miscellaneous transportation equipment 3364-9 4.5 87.6 87.6 86.9 85.7 86.3 85.7 85.5 84.8 85.2 86.0 85.6 85.7 85.4 86.3 53 Furniture and related products 337 1.5 101.3 101.5 101.6 101.4 100.5 101.4 100.7 100.6 98.9 98.8 98.6 97.3 96.4 96.4 54 Miscellaneous 339 2.8 109.5 110.2 110.7 110.6 110.2 109.1 109.3 108.6 110.0 109.5 109.4 108.7 107.2 107.5 55 Nondurable manufacturing . . 36.1 99.5 99.7 99.9 100.4 100.0 100.0 99.1 98.9 98.3 98.2 98.5 98.7 97.8 97.9 56 Food, beverage, and tobacco products .... 311,2 10.9 100.2 100.6 100.9 100.5 100.0 99.9 99.5 98.6 98.3 98.5 98.2 98.3 97.8 97.9 57 Textile and product mills . . 313,4 1.8 82.5 83.6 83.4 83.9 82.5 82.3 81.3 81.7 80.8 78.4 79.2 79.7 78.4 77.7 58 Apparel and leather 315,6 2.2 72.2 72.7 72.6 73.0 71.2 71.8 70.2 70.5 69.7 69.7 69.0 68.0 66.4 65.9 59 Paper 322 3.3 94.4 95.0 94.7 95.2 95.8 96.1 95.7 96.8 95.0 93.0 93.0 94.5 93.0 92.9 60 Printing and support 323 2.8 97.8 96.2 95.5 98.4 98.6 99.9 99.5 98.4 98.9 99.1 97.7 96.4 95.4 96.4 61 Petroleum and coal products 324 1.4 102.9 103.4 102.4 103.0 102.7 101.0 99.4 103.9 105.0 102.0 101.8 103.9 101.6 103.1 62 Chemical 325 10.3 105.1 105.0 105.7 106.9 106.2 106.1 104.6 104.2 103.4 104.4 106.0 105.9 105.3 105.0 63 Plastics and rubber products 326 3.4 106.0 106.7 107.4 107.5 107.3 107.2 106.4 105.8 104.6 104.9 105.3 105.7 104.4 105.3 64 Other manufacturing (non-NAICS) 1133,5111 4.3 105.5 104.2 105.5 105.0 105.8 107.1 106.7 105.4 105.9 105.3 107.5 108.1 106.7 106.8 65 Mining 21 6.6 93.8 93.4 93.5 94.4 93.9 92.2 92.3 93.6 95.2 93.6 92.8 92.8 93.1 93.9 66 Utilities 2211,2 10.1 110.2 110.1 110.1 113.7 110.4 113.3 112.1 112.1 110.5 115.0 116.3 111.7 111.8 111.0 67 Electric 2211 8.6 111.8 111.2 111.4 115.7 112.2 115.8 113.7 113.3 112.2 116.8 118.0 113.6 113.7 112.6 68 Natural gas 2212 1.6 97.5 104.4 103.2 102.7 100.8 99.9 103.6 105.8 101.6 105.4 107.5 101.2 102.1 102.1 69 Manufacturing excluding computers, communications equipment, and semiconductors 78.0 99.8 99.9 100.2 100.6 100.6 100.4 99.7 99.8 98.8 99.3 99.2 98.9 98.0 98.2 70 Manufacturing excluding motor vehicles and parts 77.6 110.9 111.0 111.3 111.4 111.5 111.3 110.8 110.5 109.9 110.1 110.3 110.2 109.5 109.8 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 • August 2003 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted except as noted1 2002 2003 IItteemm ccrreeddiittss oorr ddeebbiittss 22000000'' 22000011'' 22000022'' Ql' Q2' Q3' Q4' Qlp 1 Balance on current account -411,458 -393,745 -480,861 -106,728 -122,827 -122,724 -128,586 -136,112 2 Balance on goods and services -375,384 -357,819 -418,038 -90,057 -104,888 -106,980 -116,116 -121,567 3 Exports 1,070,054 1,007,580 974,107 236,442 243,696 247,815 246,151 247,848 4 Imports -1,445,438 -1,365,399 -1,392,145 -326,499 -348,584 -354,795 -362,267 -369,415 5 Income, net 19,605 10,689 -3,970 -733 ^1,458 -1,747 2,966 2,571 6 Investment, net 24,191 15,701 1,271 550 -3,106 -481 4,306 3,942 7 Direct 94,929 106,485 93,475 23,924 21,410 21,914 26,225 24,477 8 Portfolio -70,738 -90,784 -92,204 -23,374 -24,516 -22,395 -21,919 -20,535 9 Compensation of employees -4,586 -5,012 -5,241 -1,283 -1,352 -1,266 -1,340 -1,371 10 Unilateral current transfers, net -55,679 -46,615 -58,853 -15,938 -13,481 -13,997 -15,436 -17,116 11 Change in US. government assets other than official reserve assets, net (increase, -) -941 -486 -32 133 42 -27 -180 37 12 Change in U.S. official reserve assets (increase, -) -290 -4,911 -3,681 390 -1,843 -1,416 -812 83 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -722 -630 -475 -109 -107 -132 -127 897 15 Reserve position in International Monetary Fund 2,308 -3,600 -2,632 652 -1,607 -1,136 -541 -644 16 Foreign currencies -1,876 -681 -574 -153 -129 -148 -144 -170 17 Change in U.S. private assets abroad (increase, -) -568,567 -344,542 -175,272 -35,750 -126,766 31,155 -43,910 -76,017 18 Bank-reported claims2 -148,657 -134,945 -21,357 -148 -69,254 52,999 -4,954 -24,392 19 Nonbank-reported claims -138,790 -4,997 -31,880 -1,886 -16,210 -11,862 -1,922 3,134 20 U.S. purchase of foreign securities, net -121,908 -84,637 15,801 5,367 -5,843 21,641 -5,364 -25,785 21 U.S. direct investments abroad, net -159,212 -119,963 -137,836 -39,083 -35,459 -31,623 -31,670 -28,974 22 Change in foreign official assets in United States (increase, +) 37,724 5,104 94,860 6,106 47,552 8,992 32,210 35,870 23 U.S. Treasury securities -10,233 10,745 43,144 -1,039 15,138 1,415 27,630 18,099 24 Other U.S. government obligations 40,909 20,920 30,377 7,296 6,568 10,885 5,628 9,380 25 Other U.S. government liabilities2 -1,825 -2,309 137 -597 365 464 -95 -694 26 Other U.S. liabilities reported by U.S. banks2 5,746 -29,978 17,594 -280 24,575 -4,607 -2,094 7,759 27 Other foreign official assets3 3,127 5,726 3,608 726 906 835 1,141 1,326 28 Change in foreign private assets in United States (increase, +) 988,415 760,427 612,123 140,707 173,690 132,486 165,238 152,782 29 U.S. bank-reported liabilities4 116,971 118,379 91,126 -7,446 23,948 20,448 54,176 25,003 30 U.S. nonbank-reported liabilities 170,672 67,489 72,142 46,771 24,610 -8,102 8,863 32,636 31 Foreign private purchases of U.S. Treasury securities, net -76,949 -7,438 96,217 11,789 14,218 57,505 12,705 13,487 32 U.S. currency flows 1,129 23,783 21,513 4,525 7,183 2,556 7,249 4,927 33 Foreign purchases of other U.S. securities, net 455,318 406,633 291,492 74,461 104,187 45,880 66,964 50,944 34 Foreign direct investments in United States, net 321,274 151,581 39,633 10,607 -456 14,199 15,281 25,785 35 Capital account transactions, net5 -799 -1,062 -1,285 -277 -286 -364 -358 -340 36 Discrepancy ^4,084 -20,785 ^15,852 —4,581 30,438 -48,102 -23,602 23,697 37 Due to seasonal adjustment 8,579 2,091 -12,409 1,744 8,916 38 Before seasonal adjustment -44,084 -20,785 -45,852 -13,160 28,347 -35,693 -25,346 14,781 MEMO Changes in official assets 39 U.S. official reserve assets (increase, -) -290 —4,911 -3,681 390 -1,843 -1,416 -812 83 40 Foreign official assets in United States, excluding line 25 (increase, +) 39,549 7,413 94,723 6,703 47,187 8,528 32,305 36,564 41 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) 12,000 -1,725 -8,132 -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. 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 2002 2003 AAsssseett 11999999 22000000 22000011 Nov. Dec. Jan. Feb. Mar. Apr. May June? 1 Total 71,516 67,647 68,654 75,690 79,006 78,434 78,579 80,049 80,405 82,287 81,660 2 Gold stock1 11,048 11,046 11,045 11,043 11,043 11,043 11,043 11,043 11,043 11,044' 11,044 3 Special drawing rights2,3 10,336 10,539 10,774 11,855 12,166 11,298 11,368 11,392 11,476 11,880 11,720 4 Reserve position in International Monetary Fund2 17,950 14,824 17,854 20,480 21,979 21,953 21,686 22,858 22,738 23,214 23,210 5 Foreign currencies4 32,182 31,238 28,981 32,312 33,818 34,140 34,482 34,756 35,148 36,149 35,686 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A45 3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS1 Millions of dollars, end of period 2002 2003 AAsssseett 11999999 22000000 22000011 Nov. Dec. Jan. Feb. Mar. Apr. May Junep 1 Deposits 71 215 61 78 136 102 224 254 313 79 898 Held in custody 2 U.S. Treasury securities2 632,482 594,094 592,630 669,092 678,106 683,837 700,341 710,955 702,041 727,142 747,089 3 Earmarked gold3 9,933 9,451 9,099 9,045 9,045 9,045 9,045 9,045 9,040 9,031 9,004 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. 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 2002 2003 IItteemm 22000000 22000011 Oct. Nov. Dec. Jan. Feb. Mar. Apr? 1 Total1 975,303 987,567 1,047,933 1,069,536 1,082,290 1,090,034 1,109,422 1,118,854 1,115,440 By type 2 Liabilities reported by banks in the United States2 144,593 123,425 136,721 138,496 141,018 140,071 149,463 148,778 150,546 3 U.S. Treasury bills and certificates3 153,010 161,719 188,474 190,111 190,375 194,762 196,344 206,153 200,462 U.S. Treasury bonds and notes 4 Marketable 450,832 454,306 446,152 462,729 469,437 468,682 471,223 471,705 469,288 5 Nonmarketable4 5,348 3,411 3,078 3,097 2,769 2,786 2,803 2,821 2,839 6 U.S. securities other than U.S. Treasury securities5 221,520 244,706 273,508 275,103 278,691 283,733 289,589 289,397 292,305 By area 7 Europe1 240,325 243,448 254,425 265,831 273,136 273,174 280,721 277,422 271,829 8 Canada 13,727 13,440 10,300 10,975 11,079 10,455 9,796 9,813 9,705 9 Latin America and Caribbean 70,442 71,103 64,289 63,002 63,244 62,016 63,220 62,965 63,131 10 Asia 626,016 635,179 692,195 701,016 706,130' 718,000 727,124 742,599 742,306 11 Africa 14,690 15,167 15,524 15,602 15,338 14,589 15,939 15,215 15,834 12 Other countries 10,101 9,228 11,198 13,108 13,361 11,798 12,620 10,838 12,633 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 US. 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 2003 IItteemm 11999999 22000000 22000011 June Sept. Dec.' Mar. 1 Banks' own liabilities 88,537 77,779 79,363 89,823 81,719 80,543 88,583 2 Deposits n.a. n.a. n.a. n.a. n.a. n.a. 50,582 3 Other liabilities n.a. n.a. n.a. n.a. n.a. n.a. 38,001 4 Banks' own claims 67,365 56,912 74,640 90,609' 82,647' 71,724 81,242 5 Deposits 34,426 23,315 44,094 56,22 lr 47,779r 34,287 54,194 6 Other claims 32,939 33,597 30,546 34,388 34,868 37,437 27,048 7 Claims of banks' domestic customers2 20,826 24,411 17,631 15,848 20,475 33,659 27,706 8 Deposits n.a. n.a. n.a. n.a. n.a. n.a. 5,065 9 Other claims n.a. n.a. n.a. n.a. n.a. n.a. 22,641 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

A46 International Statistics • August 2003 3.17 LIABILITIES TO 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 Oct. Nov. Dec. Jan. Feb. Mar.' Apr.P BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 1,511,410 1,636,538 l,818,240r l,834,387r l,776,074r l,818,240r 1,783,978 l,945,083r 2,007,773 2,064,952 2 Banks' own liabilities 1,077,636 1,181,097 1,274,227 1,305,674 1,242,279 1,274,227 1,241,101 1,390,064' 1,452,668 1,499,066 By type of liability 3 Deposits2 221,248 191,742 171,802 164,057 165,306 171,802 165,384 729,978' 754,107 826,168 4 Other 171,401 197,064 249,954 263,717 256,726 249,954 271,711 660,086' 698,561 672,898 5 Of which: repurchase agreements3 0 151,143 190,134 200,313 190,283 190,134 210,349 306,017 338,528 378,839 6 Banks' custody liabilities4 433,774 455,441 544,013r 528,713' 533,795' 544,013' 542,877 555,019 555,105 565,886 By type of liability / U.S. Treasury bills and certificates5 177,846 186,115 229,480r 223,538' 226,272' 229,480' 231,366 233,814 245,814 242,527 8 Other negotiable and readily transferable instruments6 145,840 139,807 163,657r 159,985' 156,453' 163,657' 160,802 172,225 169,899 179,939 9 Of which: negotiable time certificates of deposit held in custody for foreigners 34,217 20,440 26,040' 29,154' 26,391' 26,040' 25,596 27,876 28,400 30,821 10 Of which: short-term agency securities7 0 59,781 73,078 68,834 66,226 73,078 67.933 74,851 73,651 77,004 11 Other 110,088 129,519 150,876' 145,190' 151,070' 150,876' 150,709 148,980 139,392 143,420 12 Nonmonetary international and regional organizations8 12.543 10,830 13,467' 13,067' 12,219' 13,467' 14,624 12,085 9,377 8,983 13 Banks' own liabilities 12,140 10,169 12,362 12,454 11,443 12,362 13,921 11,439 9,331 8,930 14 Deposits2 6,287 3,791 5,769 6,178 5,245 5,769 5,298 6,305 5,039 5,261 15 Other 5,853 6,378 6,593 6,276 6,198 6,593 8,623 5,134 4,292 3,669 16 Banks' custody liabilities4 403 661 1,105' 613' 776' 1,105' 703 646 46 53 17 U.S. Treasury bills and certificates5 252 600 1,089 597 760 1,089 687 621 4 33 18 Other negotiable and readily transferable instruments6 149 61 16' 16' 16r 16' 16 25 30 20 19 Other 2 0 0 0 0 0 0 0 12 0 20 Official institutions9 297,603 285,144 331,393' 325,195 328,607 331,393' 334,833 345,807 354,931 351,008 21 Banks' own liabilities 96,989 83,824 90,822 91,550 93,558 90,822 93,790 98,178 95,278 95,203 22 Deposits2 39,525 22,668 20,629 17,736 17,525 20,629 17,162 25,430 21,952 23,967 23 Other 57,464 61,156 70,193 73,814 76,033 70,193 76,628 72,748 73,326 71,236 24 Banks' custody liabilities4 200,614 201,320 240,571' 233,645 235,049 240,571' 241,043 247,629 259,653 255,805 25 U.S. Treasury bills and certificates5 153,010 161,719 190,375 188,474 190,111 190,375 194,762 196,344 206,153 200,462 26 Other negotiable and readily transferable instruments6 47,366 38,531 50,132' 44,391 44,137 50,132' 45,285 50,763 52,615 55,189 27 Other 238 1,070 64 780 801 64 996 522 885 154 28 Banks10 972,932 1,053,084 1,164,864 1,184,129 1,127,288 1,164,864 1,118,064 1,137,559' 1,165,412 1,209,655 29 Banks' own liabilities 821,306 914,492 969,975 996,584 934,125 969,975 923,313 943,871' 984,516 1,019,289 30 Deposits2 82,426 68,656 52,738 48,053 51,088 52,738 49,286 584,017' 614,022 687,275 31 Other 53,893 53,545 64,766 70,631 62,790 64,766 70,021 359,854' 370,494 332,014 32 Banks' custody liabilities4 151,626 138,592 194,889 187,545 193,163 194,889 194,751 193,688 180,896 190,366 33 U.S. Treasury bills and certificates5 16,023 11,541 21,308 19,253 18,887 21,308 20,240 18,166 20,730 21,989 34 Other negotiable and readily transferable instruments6 36,036 24,059 46,773 48,250 47,836 46,773 48,618 52,120 48,346 51,753 35 Other 99,567 102,992 126,808 120,042 126,440 126,808 125,893 123,402 111,820 116,624 36 Other foreigners" 228,332 287,480 308.516' 311,996' 307,960' 308,516' 316,457 449,632' 478,053 495,306 37 Banks' own liabilities 147,201 172,612 201,068 205,086 203,153 201,068 210,077 336,576' 363,543 375,644 38 Deposits2 93,010 96,627 92,666 92,090 91,448 92,666 93,638 114,226' 113,094 109,665 39 Other 54,191 75,985 108,402 112,996 111,705 108,402 116,439 222,350 250,449 265,979 40 Banks' custodial liabilities 81,131 114,868 107,448' 106,910' 104,807' 107,448' 106,380 113,056 114,510 119,662 41 U.S. Treasury bills and certificates5 8,561 12,255 16,708' 15,214' 16,514r 16,708' 15,677 18,683 18,927 20,043 42 Other negotiable and readily transferable instruments6 62,289 77,156 66,736' 67,328' 64,464' 66,736' 66,883 69,317 68,908 72,977 43 Other 10,281 25,457 24,004' 24,368' 23,829' 24,004' 23,820 25,056 26,675 26,642 MEMO 44 Own foreign offices12 684,987 792,291 852,471 877,900 820,247 852,471 804,006 911,571' 948,628 996,038 1. Reporting banks include all types of depository institutions as well as some banks/ 9. Foreign central banks, foreign central governments, and the Bank for International financial holding companies and brokers and dealers. Excludes bonds and notes of maturities Settlements. longer than one year. Effective February 2003, coverage is expanded to include liabilities of 10. Excludes central banks, which are included in "Official institutions." Includes posibrokers and dealers to affiliated foreign offices. tions with affiliated banking offices also included in memo line (44) below. 2. Non-negotiable deposits and brokerage balances. 11. As of February 2003, includes positions with affiliated non-banking offices also 3. Data available beginning January 2001. included in memo line (44) below. 4. Financial claims on residents of the United States, other than long-term securities, held 12. For U.S. banks, includes amounts owed to own foreign branches and foreign subsidiby or through reporting banks for foreign customers. Effective February 2003, also includes aries consolidated in the quarterly Consolidated Reports of Condition filed with bank loans to U.S. residents in managed foreign offices of U.S. reporting institutions. regulatory agencies. For agencies, branches, and majority-owned subsidiaries of foreign 5. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official banks, consists principally of amounts owed to the head office or parent foreign office, and to institutions of foreign countries. foreign branches, agencies, or wholly owned subsidiaries of the head office or parent foreign 6. Principally bankers acceptances, commercial paper, negotiable time certificates of bank. Effective February 2003, includes amounts owed to affiliated foreign offices of U.S. deposit, and short-term agency securities. brokers and dealers. 7. Data available beginning January 2001. 8. Principally the International Bank for Reconstruction and Development, the Inter- American Development Bank, and the Asian Development Bank. Excludes "holdings of dollars" of the International Monetary Fund. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A47 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued Payable in U.S. dollars Millions of dollars, end of period 2002 2003 IItteemm 22000000 22000011 22000022RR Oct.r Nov.r Dec.r Jan. Feb/ Mar/ Apr.P AREA OR COUNTRY 45 Total, ail foreigners 1,511,410 1,636,538 1,818,240 1,834,387 1,776,074 1,818,240 1,783,978 1,945,083 2,007,773 2,064,952 46 Foreign countries 1,498,867 1,625,708 1,804,773 1,821,320 1,763,855 1,804,773 1,769,354 3,865,996 3,996,792 4,111,938 47 Europe 446,788 521,331 627,535 658,589 615,353 627,535 566,318 708,269 726,094 722,328 48 Austria 2,692 2,922 2,473 3,053 2,442 2,473 2,186 2,330 2,125 2,110 49 Belgium13 33,399 6,557 8,610 7,419 8,031 8,610 8,858 5,454 7,742 6,668 50 Denmark 3,000 3,626 4,880 3,004 3,339 4,880 6,497 6,603 6,751 2,160 51 Finland 1,411 1,446 1,693 5,170 2,646 1,693 2,583 1,861 845 939 52 France 37,833 49,056 39,636 38,511 40,748 39,636 36,731 39,679 39,885 41,279 53 Germany 35,519 22,375 34,394 31,554 32,021 34,394 31,940 39,653 43,617 42,456 54 Greece 2,011 2,307 2,975 3,358 3,348 2,975 3,205 2,908 2,002 1,378 55 Italy 5,072 6,354 4,826 5,109 5,642 4,826 4,421 4,812 5,000 6,450 56 Luxembourg13 0 16,894 28,623 25,677 27,744 28,623 30,538 35,998 32,926 36,765 57 Netherlands 7,047 12,411 10,705 7,926 7,907 10,705 12,094 16,258 13,708 15,207 58 Norway 2,305 3,727 18,867 18,895 14,677 18,867 17,723 10,936 14,163 13,866 59 Portugal 2,403 4,033 3,574 3,219 3,091 3,574 3,448 2,879 2,802 2,906 60 Russia 19,018 20,800 23,147 24,407 25,444 23,147 24,378 27,648 28,918 30,656 61 Spain 7,787 8,811 14,030 12,822 15,574 14,030 14,850 16,042 13,919 14,177 6? Sweden 6,497 3,375 4,654 4,855 3,857 4,654 3,767 4,006 4,611 6,816 63 Switzerland 74,635 66,403 131,489 182,116 141,175 131,489 105,350 119,422 114,442 100,321 64 Turkey 7,548 7,474 12,130 11,225 11,748 12,130 12,754 11,973 10,996 11,541 65 United Kingdom 167,757 204,396 181,838 184,432 182,057 181,838 168,424 278,738 301,249 306,644 66 Channel Islands and Isle of Man14 0 36,059 45,728 40,070 38,935 45,728 26,327 23,024 21,715 21,404 67 Yugoslavia15 276 309 301 316 332 301 353 337 332 237 68 Other Europe and other former U.S.S.R.16 30,578 41,996 52,962 45,451 44,595 52,962 49,891 57,708 58,346 58,348 69 Canada 30,982 27,251 24,956 26,568 24,275 24,956 27,880 28,600 31,989 29,206 70 Latin America 120,041 118,025 107,030 106,781 103,892 107,030 106,090 103,836 104,483 106,548 71 Argentina 19,451 10,704 11,217 12,090 11,643 11,217 11,252 10,543 10,654 9,954 7? Brazil 10,852 14,169 10,037 11,587 10,275 10,037 10,586 10,989 12,151 11,240 73 Chile 5,892 4,939 6,064 5,826 5,360 6,064 5,591 5,806 5,712 5,061 74 Colombia 4,542 4,695 4,158 3,847 4,644 4,158 4,147 4,886 4,453 4,721 75 Ecuador 2,112 2,390 2,299 2,149 2,252 2,299 2,397 2,239 2,369 2,248 76 Guatemala 1,601 1,882 1,381 1,500 1,386 1,381 1,436 1,474 1,397 1,529 77 Mexico 32,166 39,871 36,141 34,654 32,604 36,141 36,876 34,736 36,010 38,433 78 Panama 4,240 3,610 3,842 3,479 3,586 3,842 3,969 4,109 3,678 3,660 79 Peru 1,427 1,359 1,363 1,300 1,360 1,363 1,364 1,361 1,331 1,375 80 Uruguay 3,003 3,172 2,806 2,582 2,603 2,806 2,681 2,458 2,751 2,886 81 Venezuela 24,730 24,974 21,883 21,656 22,310 21,883 19,951 19,594 18,206 19,105 82 Other Latin America17 10,025 6,260 5,839 6,111 5,869 5,839 5,840 5,641 5,771 6,336 83 Caribbean 573,337 194,814 193,318 190,690 179,690 193,318 206,210 210,983 223,153 211,562 84 Bahamas 189,298 178,472 162,179 159,850 145,976 162,179 170,120 165,928 175,721 161,208 85 Bermuda 9,636 10,539 23,813 23,147 25,754 23,813 27,426 38,086 40,552 43,422 86 British West Indies18 367,197 0 0 0 0 0 0 0 0 0 87 Cayman Islands18 0 440,038 498,957 491,970 488,995 498,957 511,973 524,084 551,635 629,329 88 Cuba 90 88 91 92 94 91 93 207 91 91 89 Jamaica 794 1,182 829 856 828 829 883 851 996 929 90 Netherlands Antilles 5,428 3,264 5,001 5,274 5,458 5,001 6,329 4,527 4,420 4,592 91 Trinidad and Tobago 894 1,269 1,405 1,471 1,580 1,405 1,359 1,384 1,373 1,320 92 Other Caribbean17 0 12,135 11,341 10,831 11,488 11,341 11,057 11,654 11,770 12,322 93 Asia 305,554 294,496 318,008 314,697 316,468 318,008 318,818 319,650 326,718 318,609 China 94 Mainland 16,531 10,498 15,504 15,853 14,488 15,504 13,544 13,694 17,618 14,994 95 Taiwan 17,352 17,633 18,626 23,216 23,549 18,626 22,147 24,040 20,099 21,274 96 Hong Kong 26,462 26,494 33,034 30,104 31,334 33,034 36,777 35,758 32,964 34,437 97 India 4,530 3,708 7,953 7,196 7,507 7,953 8,074 8,836 8,672 9,267 98 Indonesia 8,514 12,383 14,109 12,315 12,915 14,109 12,858 12,419 11,943 12,039 99 Israel 8,053 7,870 7,185 9,105 8,882 7,185 9,593 10,159 11,736 10,821 100 Japan 150,415 155,314 161,330 162,042 163,980 161,330 162,110 166,409 176,338 166,060 101 Korea (South) 7,955 9,019 8,932 6,288 6,548 8,932 7,410 7,044 6,730 6,859 107 Philippines 2,316 1,772 1,793 1,589 1,462 1,793 1,364 1,528 1,764 1,549 103 Thailand 3,117 4,743 7,605 7,022 8,698 7,605 6,666 5,033 5,287 5,739 104 Middle Eastern oil-exporting countries'9 23,763 20,035 16,364 14,352 11,633 16,364 15,176 12,197 9,858 10,370 105 Other 36,546 25,027 25,573 25,615 25,472 25,573 23,099 22,533 23,709 25,200 106 Africa 10,824 11,365 12,240 11,905 11,989 12,240 11,177 14,390 12,980 13,591 107 Egypt 2,621 2,778 2,652 2.545 2,493 2,652 2,494 3,624 3,549 3,607 108 Morocco 139 274 306 335 254 306 259 346 283 210 109 South Africa 1,010 839 1,114 662 701 1,114 725 2,406 1,807 2,019 110 Congo (formerly Zaire) 4 4 2 0 2 2 3 5 3 4 111 Oil-exporting countries20 4,052 4,377 4,370 4,635 4,983 4,370 4,126 4,552 3,987 4,146 112 Other 2,998 3,093 3,796 3,728 3,556 3,796 3,570 3,457 3,351 3,605 113 Other countries 11,341 6,253 11,388 9,289 11,705 11,388 9,831 11,532 9,574 12,474 114 Australia 10,070 5,599 9,332 7,548 9,339 9,332 8,237 9,120 6,842 9,854 115 New Zealand21 0 242 1,796 1,257 2,120 1,796 1,320 1,940 2,175 2,123 116 All other 1,271 412 260 484 246 260 274 472 557 497 117 Nonmonetary international and regional organizations 12,543 10,830 13,467 13,067 12,219 13,467 14,624 12,085 9,377 8,983 118 International22 11,270 9,331 11,282 11,295 10,246 11,282 12,859 10,217 7,955 7,899 119 Latin American regional23 740 480 507 560 477 507 372 547 686 296 120 Other regional24 533 935 1,611 1,134 1,423 1,611 1,299 1,216 633 614 13. Before January 2001, data for Belgium-Luxembourg were combined. 19. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab 14. Before January 2001, these data were included in data reported for the United Emirates (Trucial States). Kingdom. 20. Comprises Algeria, Gabon, Libya, and Nigeria. 15. In February 2003, Yugoslavia changed its name to Serbia and Montenegro. Data for 21. Before January 2001, these data were included in "All other." other entities of the former Yugoslavia recognized as independent states by the United States 22. Principally the International Bank for Reconstruction and Development. Excludes are reported under "Other Europe." "holdings of dollars" of the International Monetary Fund. 16. Includes the Bank for International Settlements and the European Central Bank. 23. Principally the Inter-American Development Bank. 17. Before January 2001, data for "Other Latin America" and "Other Caribbean" were 24. 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." 18. 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

A48 International Statistics • August 2003 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 Oct. Nov. Dec. Jan. Feb. Mar. Apr.P 1 Total, all foreigners 904,642 1,055,069 1,080,271 1,151,438 1,094,649 1,080,271 1,083,390 l,138,619r l,219,025r 1,234,275 2 Foreign countries 899,956 1,050,123 1,076,594 1,148,738 1,091,331 1,076,594 1,080,231 2,270,528r 2,429,990' 2,459,298 3 Europe 378,1 15 461,176 484,047 542,565 489,943 484,047 446,105 522,959 543,358' 541,394 4 Austria 2,926 4,981 3,603 3,876 4,224 3,603 4,334 4,142' 4,538 4,875 5 Belgium2 5,399 6,391 6,044 5,590 5,784 6,044 6,273 6,605r 7,971 8,439 6 Denmark 3,272 1,105 1,109 1,534 940 1,109 1,563 1,098 1,449 1,044 7 Finland 7,382 10,350 8,518 14,821 9,028 8,518 9,832 9,191 9,462 11,893 8 France 40,035 60,620 47,705 47,065 54,089 47,705 45,914 48,595 46,658' 54,926 9 Germany 36,834 29,902 22,481 21,101 22,103 22,481 23,395 22,525 22,259' 19,844 10 Greece 646 330 477 388 331 477 296 295 314 234 11 Italy 7,629 4,205 3,753 3,984 3,945 3,753 3,177 3,002 4,212 4,726 12 Luxembourg2 0 1,267 3,407 2,818 3,224 3,407 3,901 4,360 3,149 4,472 13 Netherlands 17,043 15,908 23,133 13,284 15,572 23,133 19,188 16,508 21,835 18,784 14 Norway 5,012 6,236 13,885 11,848 11,464 13,885 18,606 9,809 11,091 11,672 15 Portugal 1,382 1,603 2,226 2,000 2,134 2,226 2,356 2,342 1,929 2,260 16 Russia 517 594 877 858 787 877 1,025 728 1,107 699 17 Spain 2,603 3,260 5,371 3,159 4,752 5,371 4,154 3,452 2,577 3,008 18 Sweden 9,226 12,544 15,889 15,366 15,239 15,889 15,329 15,458 16,310 16,860 19 Switzerland 82,085 87,333 126,958 184,039 134,425 126,958 87,562 101,202 106,935' 81,560 20 Turkey 3,059 2,124 2,112 2,622 2,532 2,112 2,021 2,069 2,280 2,441 21 United Kingdom 144,938 201,183 173,996 195,256 182,805 173,996 167,820 237,752 237,497' 247,035 22 Channel Islands and Isle of Man3 0 4,478 17,457 7,281 11,304 17,457 24,393 27,767 34,994 38,611 23 Yugoslavia4 50 0 0 0 0 0 0 0 0 0 24 Other Europe and other former U.S.S.R.5 8,077 6,762 5,046 5,675 5,261 5,046 4,966 6,059 6,791 8,010 25 Canada 39,837 54,421 60,584 56,705 58,809 60,584 65,085 66,132 57,831 59,090 26 Latin America 76,561 69,762 56,642 59,261 58,257 56,642 54,482 55,412 55,942' 54,617 27 Argentina 11,519 10,763 6,783 7,608 7,253 6,783 6,663 6,615 6,149 6,077 28 Brazil 20,567 19,434 15,419 16,863 15,871 15,419 14,520 15,329 15,899' 15,324 29 Chile 5,815 5,317 5,250 5,142 5,358 5,250 5,077 5,220 5,228 5,271 30 Colombia 4,370 3,602 2,614 2,834 2,758 2,614 2,406 2,710 2,650' 2,587 31 Ecuador 635 495 457 451 451 457 439 428 46(F 445 32 Guatemala 1,244 1,495 892 907 889 892 896 831 970 841 33 Mexico 17,415 16,522 15,658 15,367 15,828 15,658 15,268 14,993 14,788' 14,625 34 Panama 2,933 3,061 1,915 2,021 1,961 1,915 1,730 1,856 1,882 1,959 35 Peru 2,807 2,185 1,411 1,504 1,484 1,411 1,403 1,438 1,399 1,447 36 Uruguay 673 447 255 319 292 255 255 300 324 322 37 Venezuela 3,518 3,077 3,254 3,389 3,231 3,254 3,202 3,171 3,293 3,188 38 Other Latin America6 5,065 3,364 2,734 2,856 2,881 2,734 2,623 2,521 2,900 2,531 39 Caribbean 319,403 370,945 373,712 373,472 372,683 373,712 402,454 381,394' 434,477' 448,057 40 Bahamas 114,090 101,034 95,584 96,151 93,839 95,584 97,456 86,313 92,186 86,031 41 Bermuda 9,260 7,900 9,902 12,196 9,902 9,902 12,511 17,031 23,339 21,346 42 British West Indies7 189,289 0 0 0 0 0 0 0 0 0 43 Cayman Islands7 0 250,376 257,075 252,908 257,645 257,075 281,641 265,643r 307,700' 329,369 44 Cuba 0 0 0 0 0 0 0 0 0 0 45 Jamaica 355 418 321 429 393 321 304 349 381 376 46 Netherlands Antilles 5,801 6,729 6,690 7,427 6,744 6,690 6,445 7,657 66,,775500 7,008 47 Trinidad and Tobago 608 931 889 920 912 889 865 965 888811 846 48 Other Caribbean6 0 3,557 3,251 3,441 3,248 3,251 3,232 3,436 3,240 3,081 49 Asia 77,829 85,882 93,455 109,359 104,181 9933,,445555 110033,,009966 110011,,445500 111144,,118855'' 111166,,999933 China 50 Mainland 1,606 2,073 1,057 8,515 6,575 1,057 4,799 1,884 9,418 7,819 51 Taiwan 2,247 4,407 3,772 8,599 7,034 3,772 6,563 5,695 8,259 5,349 52 Hong Kong 6,669 9,995 7,258 5,778 6,849 7,258 6,490 5,652 4,987 4,767 53 India 2,178 1,348 1,235 999 921 1,235 1,128 1,170 960 1,050 54 Indonesia 1,914 1,752 1,238 1,390 1,360 1,238 1,223 1,059 1,023 992 55 Israel 2,729 4,396 4,660 4,710 3,836 4,660 5,182 3,328 3,110 4,014 56 Japan 34,974 34,125 47,600 42,252 47,071 47,600 48,818 56,265 58,391 63,241 57 Korea (South) 7,776 10,622 11,118 19,439 14,293 11,118 14,473 13,936 13,045' 14,834 58 Philippines 1,784 2,587 2,137 1,843 1,555 2,137 2,424 1,533 2,040 1,862 59 Thailand 1,381 2,499 1,167 1,205 756 1,167 830 696 1,382 1,252 60 Middle Eastern oil-exporting countries8 9,346 7,882 7,952 9,253 8,251 7,952 8,004 6,405 7,110 6,874 61 Other 5,225 4,196 4,261 5,376 5,680 4,261 3,162 3,827 4,460 4,939 62 Africa 2,094 2,095 1,977 1,790 1,693 1,977 1,945 1,992 2,051 1,850 63 Egypt 201 416 487 326 428 487 511 544 558 551 64 Morocco 204 106 53 50 52 53 53 45 49 42 65 South Africa 309 710 617 554 435 617 545 577 565 468 66 Congo (formerly Zaire) 0 0 0 0 0 0 0 0 0 0 67 Oil-exporting countries9 471 167 222 233 225 222 240 224 257 215 68 Other 909 696 598 627 553 598 596 602 622 574 69 Other countries 6,117 5,842 6,177 5,586 5,765 6,177 7,064 5,925 7,151 7,648 70 Australia 5,868 5,455 5,566 5,088 5,303 5,566 6,212 5,403 6,350 6,887 71 New Zealand10 0 349 569 485 439 569 833 507 705 640 72 All other 249 38 42 13 23 42 19 15 96 121 73 Nonmonetary international and regional organizations" . . 4,686 4,946 3,677 2,700 3,318 3,677 3,159 3,355 4,030 4,626 1. Reporting banks include all types of depository institutions as well as bank/financial 5. Includes the Bank for International Settlements and the European Central Bank. holding companies and brokers and dealers. Effective February 2003, coverage is expanded to 6. Before January 2001, "Other Latin America" and "Other Caribbean" were reported as include claims of brokers and dealers on affiliated foreign offices and cross-border brokerage combined "Other Latin America and Caribbean." balances. 7. Beginning 2001, Cayman Islands replaced British West Indies in the data series. 2. Before January 2001, combined data reported for Belgium-Luxembourg. 8. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab 3. Before January 2001, data included in United Kingdom. Emirates (Trucial States). 4. In February 2003, Yugoslavia changed its name to Serbia and Montenegro. Data for 9. Comprises Algeria, Gabon, Libya, and Nigeria. other entities of the former Yugoslavia recognized as independent states by the United States 10. Before January 2001, included in "All other." are reported under "Other Europe." ) I. 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

Nonbank-Reported Data A49 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 Oct. Nov. Dec. Jan. Feb.r Mar.r Apr.p 1 Total claims reported by banks 1,095,869 1,254,863 1,298,412' 1,298,412r 261,698 2 Banks' own claims on foreigners 904,642 1,055,069 1,080,271 1,151,438 1,094,649 1,080,271 1,083,390 1,138,619 1,219,025 1,234,275 3 Foreign official institutions2 37,907 49,404 48,750 63,404 56,300 48,750 62,004 39,677 50,957 47,837 4 Foreign banks3 725,380 849,491 868,631 917,047 874,469 868,631 854,787 835,110 873,291 888,378 5 Other foreigners4 141,355 156,174 162,890 170,987 163,880 162,890 166,599 263,832 294,777 298,060 6 Claims on banks' domestic customers5 191,227 199,794 218,141r 218,141r 261,698 7 Non-negotiable deposits 100,352 93,565 80,269r 80,269r 98,891 8 Negotiable CDs 87,925 9 Other short-term negotiable instruments6 . . 78,147 90,412 131,780r 13 i,780r 58,025 10 Other claims 12,728 15,817 6,092r 6,092' 16,857 MEMO 11 Non-negotiable deposits7 354,153 371,860 394,368 12 Negotiable CDs7 2,221 2,621 1,741 13 Other short-term negotiable instruments7 17,775 21,306 14,652 14 Other claims7 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 764,470 823,238 823,514 15 Own foreign offices8 630,137 749,124 787,198 822,172 775,527 787,198 768,492 806,238 847,355 854,911 16 Loans collateralized by repurchase agreements9 137,979 161,585 166,176 156,299 161,585 185,804 245,798 287,043 311,728 1. For banks' claims, data are monthly; for claims of banks' domestic customers, data are 6. Primarily bankers acceptances and commercial paper. Prior to February 2003, also for the quarter ending with the month indicated. includes negotiable certificates of deposit. Reporting banks include all types of depository institutions as well as banks/financial 7. Data available beginning February 2003. holding companies and brokers and dealers. Effective February 2003, coverage is expanded to 8. For U.S. banks, includes amounts due from own foreign branches and foreign subsidiinclude claims of brokers and dealers on affiliated foreign offices and cross-border balances, aries consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory dealers. agencies. For agencies, branches, and minority-owned subsidiaries of foreign banks, consists 2. Prior to February 2003, reflects claims on all foreign public borrowers. principally of amounts due from the head office or parent foreign bank, and from foreign 3. Includes positions with affiliated banking offices also included in memo line (15) below. branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank. 4. As of February 2003, includes positions with affiliated non-banking offices also included Effective February 2003, includes amounts due from affiliated foreign offices of U.S. brokers in memo line (15) below. and dealers. 5. Assets held by reporting banks in the accounts of their domestic customers. Effective 9. Data available beginning January 2001. March 2003, includes balances in off-shore sweep accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 International Statistics • August 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 11999999rr 22000000'' 22000011'' Sept.' Dec.' Mar.' June' Sept.' Dec. 1 Total 53,020 73,904 66,679 53,476 66,679 74,887 70,431 68,225 67,664 By type 2 Financial liabilities 27,980 47,419 41,034 27,502 41,034 46,408 42,826 41,311 39,561 3 Short-term negotiable securities1 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 4 Other liabilities1 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Of which: 5 Borrowings' n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 6 Repurchase agreements' n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By currency / U.S. dollars n.a. 25,246 18,763 n.a. n.a. 20,454 22,050 18,913 18,844 8 Foreign currency2 n.a. 22,173 22,271 n.a. n.a. 25,954 20,776 22,398 20,717 9 Canadian dollars n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 Euros n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 11 United Kingdom pounds sterling n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 12 Japanese yen n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 13 All other currencies n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By area or country Financial liabilities 14 Europe 23,241 34,172 31,806 22,083 31,806 39,379 35,004 34,809 34,335 15 Belgium-Luxembourg 31 147 154 76 154 119 120 232 144 16 France 1,659 1,480 2,841 1,538 2,841 3,531 4,071 3,517 5,243 17 Germany 1,974 2,168 2,344 1,994 2,344 2,982 2,622 2,865 2,923 18 Netherlands 1,996 2,016 1,954 1,998 1,954 1,946 1,935 1,915 1,825 19 Switerzerland 147 104 94 92 94 84 61 61 61 20 United Kingdom 16,521 26,362 22,852 14,819 22,852 28,694 24,338 24,303 22,531 MEMO: 21 Euro area3 n.a. 7,587 8,798 n.a. n.a. 9,991 10,107 10,369 11,211 22 Canada 284 411 955 436 955 1,067 1,078 583 591 23 Latin America and Caribbean 892 4,125 2,858 414 2,858 1,547 1,832 1,088 1,504 24 Bahamas 1 6 157 5 157 5 5 0 23 25 Bermuda 5 1,739 960 47 960 836 626 588 990 26 Brazil 126 148 35 22 35 35 38 65 65 27 British West Indies4 492 406 1,627 243 1,627 612 1,000 377 365 28 Cayman Islands n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 29 Mexico 25 26 36 24 36 27 25 26 31 30 Venezuela 0 2 2 3 2 1 5 1 1 31 Asia 3,437 7,965 5,042 3,869 5,042 4,020 4,498 4,450 2,932 32 Japan 3,142 6,216 3,269 3,442 3,269 3,299 2,387 2,447 1,832 33 Middle Eastern oil-exporting countries5 4 12 10 9 10 15 14 16 14 34 Africa 28 52 53 28 53 122 120 128 131 35 Oil-exporting countries6 0 0 5 5 5 91 91 91 91 36 All other7 98 694 320 672 320 273 294 253 68 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A51 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States—Continued Millions of dollars, end of period 2001 2002 TTyyppee ooff lliiaabbiilliittyy,, aanndd aarreeaa oorr ccoouunnttrryy 11999999rr 22000000rr 22000011rr Sept.r Dec.' Mar.r June' Sept.' Dec. 37 Commercial liabilities 25,040 26,485 25,645 25,974 25,645 28,479 27,605 26,914 28,103 38 Trade payables 12,834 14,293 11,781 11,690 11,781 15,119 14,205 13,819 14,699 39 Advance payments and other liabilities n.a. 12,192 13,864 n.a. n.a. 13,360 13,400 13,095 13,404 By currency 40 Payable in U.S. dollars 23,722 23,685 24,162 23,891 24,162 26,715 26,004 25,621 26,243 41 Payable in foreign currencies2 1,318 2,800 1,483 2,083 1,483 1,764 1,601 1,293 1,860 42 Canadian dollars n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 43 Euros n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 44 United Kingdom pounds sterling n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 45 Japanese yen n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 46 All other currencies n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By area or country Commercial liabilities 47 Europe 9,262 9,629 9,219 8,836 9,219 8,168 8,015 8,065 8,257 48 Belgium-Luxembourg 140 293 99 160 99 105 94 134 141 49 France 672 979 734 891 734 713 827 718 765 50 Germany 1,131 1,047 905 955 905 584 570 855 807 51 Netherlands 507 300 1,163 343 1,163 236 312 506 590 52 Switzerland 626 502 790 683 790 648 749 592 433 53 United Kingdom 3,071 2,847 2,279 2,296 2,279 2,747 2,551 2,317 2,649 MEMO 54 Euro area3 n.a. 4,518 5,141 n.a. n.a. 3,673 3,718 4,258 4,200 55 Canada 1,775 1,933 1,622 1,557 1,622 1,802 2,027 1,570 1,588 56 Latin America and Caribbean 2,310 2,381 2,727 2,878 2,727 3,515 2,817 2,923 3,073 57 Bahamas 22 31 52 44 52 23 12 14 51 58 Bermuda 152 281 591 570 591 433 422 468 538 59 Brazil 145 114 290 312 290 277 320 290 253 60 British West Indies4 48 76 45 28 45 67 46 47 36 61 Cayman Islands n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 62 Mexico 887 841 899 883 899 1,518 1,015 1,070 1,170 63 Venezuela 305 284 166 242 166 281 204 327 177 64 Asia 9,886 10,983 10,517 11,096 10,517 13,116 12,866 12,462 13,382 65 Japan 1,775 1,933 1,622 1,557 1,622 1,802 2,027 1,570 1,588 66 Middle Eastern oil-exporting countries5 2,493 2,832 2,639 3,002 2,598 3,289 3,432 3,857 3,979 67 Africa 950 948 836 938 836 1,000 916 876 827 68 Oil-exporting countries6 499 483 436 471 436 454 349 445 405 69 All other7 881 611 724 669 724 878 964 1,018 976 MEMO 70 Financial liabilities to foreign affiliates8 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 1. Data available beginning March 2003. 6. Comprises Algeria, Gabon, Libya, and Nigeria. 2. Foreign currency detail available beginning March 2003. 7. Includes nonmonetary international and regional organizations. 3. Comprises Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, 8. Data available beginning March 2003. Includes financial liabilities to foreign affiliates Netherlands, Portugal, and Spain. As of December 2001, also includes Greece. of insurance underwriting subsidiaries of Bank/Financial Holding Companies and other 4. Beginning March 2003, data for the Cayman Islands replaced data for the British West financial intermediaries. These data are not included in lines 1-6 above. Indies. 5. Comprises Bahrain, Iran, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 International Statistics • August 2003 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 11999999'' 22000000'' 22000011'' Sept.' Dec.' Mar.' June' Sept.' Dec. 1 Total 76,642 90,157 113,082 93,988 113,082 115,969 116,608 112,784 102,566R By type 2 Financial claims 40,231 53,031 81,287 60,015 81,287 85,359 87,331 84,038 71,389' 3 Non-negotiable deposits n.a. 23,374 29,801 n.a. n.a. 41,813 42,136 38,074 27,064' 4 Negotiable securities n.a. 29,657 51,486 n.a. n.a. 43,546 45,195 45,964 44,325' Of which: 5 Negotiable CDs' n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 6 Other claims 21,665 29,657 51,486 37,624 51,486 43,568 45,188 45,959 44,064' Of which: 7 Loans' n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 8 Repurchase agreements' n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By currency 9 US. dollars n.a. 46,157 74,471 n.a. n.a. 79,722 82,353 79,307 65,070' 10 Foreign currency2 n.a. 6,874 6,816 n.a. n.a. 5,637 4,978 4,731 6,319' 11 Canadian dollars n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 12 Euros n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 13 United Kingdom pounds sterling n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 14 Japanese yen n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 15 All other currencies n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By area or country Financial claims 16 Europe 13,023 23,136 26,118 23,069 26,118 36,032 37,003 32,139 29,018r 17 Belgium-Luxembourg 529 296 625 372 625 751 797 656 722 18 France 967 1,206 1,450 1,682 1,450 3,489 3,921 3,854 3,247 19 Germany 504 848 1,068 1,112 1,068 4,114 3,972 4,292 4,245' 20 Netherlands 1,229 1,396 2,138 954 2,138 3,253 3,995 4,024 3,648 21 Switerzerland 643 699 589 665 589 308 1,010 1,135 383 22 United Kingdom 7,561 15,900 16,510 15,670 16,510 17,982 16,133 11,454 10,663' MEMO: 23 Euro area3 n.a. 5,580 8,626 n.a. n.a. 16,903 18,689 18,542 17,281' 24 Canada 2,553 4,576 6,193 4,254 6,193 5,471 5,537 5,485 5,013' 25 Latin America and Caribbean 18,206 19,317 41,201 26,099 41,201 34,979 37,489 38,800 29,612' 26 Bahamas 1,593 1,353 976 649 976 1,197 1,332 715 l,038r 27 Bermuda 11 19 918 80 918 611 704 1,157 724' 28 Brazil 1,476 1,827 2,127 2,065 2,127 1,892 2,036 2,226 2,286' 29 British West Indies4 12,099 12,596 32,965 19,234 32,965 27,328 29,569 30,837 21,528' 30 Cayman Islands n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 31 Mexico 1,798 2,448 3,075 2,910 3,075 2,777 2,823 2,871 2,921' 32 Venezuela 48 87 83 80 83 79 60 71 104' 33 Asia 5,457 4,697 6,430 5,274 6,430 6,414 5,754 6,041 5,358' 34 Japan 3,262 1,631 1,604 1,761 1,604 2,051 1,146 1,481 1,277' 35 Middle Eastern oil-exporting countries5 23 80 135 100 135 79 78 88 79' 36 Africa 286 411 414 428 414 390 431 379 395' 37 Oil-exporting countries6 15 57 49 83 49 51 64 29 25' 38 All other7 706 894 931 891 931 2,073 1,117 1,194 1,993' Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A53 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States—Continued Millions of dollars, end of period 2001 2002 TTyyppee ooff ccllaaiimm,, aanndd aarreeaa oorr ccoouunnttrryy 11999999RR 22000000'' 22000011'' Sept.' Dec.' Mar.' June' Sept.' Dec. 39 Commercial claims 36,411 37,126 31,795 33,973 31,795 30,610 29,277 28,746 31,177' 40 Trade receivables 32,602 33,104 27,513 29,240 27,513 25,845 24,716 24,171 26,385' 41 Advance payments and other claims 3,809 4,022 4,282 4,733 4,282 4,765 4,561 4,575 4,792' By currency 42 Payable in US. dollars 34,204 33,401 29,393 31,240 29,393 26,864 25,361 25,441 26,481' 43 Payable in foreign currencies2 2,207 3,725 2,402 2,733 2,402 3,746 3,916 3,305 4,696' 44 Canadian dollars n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 45 Euros n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 46 United Kingdom pounds sterling n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 47 Japanese yen n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 48 All other currencies n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By area or country Commercial claims 49 Europe 16,389 15,938 14,022 14,364 14,022 12,935 12,314 12,680 14,187' 50 Belgium-Luxembourg 316 452 268 353 268 272 207 254 269' 51 France 2,236 3,095 2,921 3,061 2,921 2,883 2,828 2,972 3,164' 52 Germany 1,960 1,982 1,658 1,973 1,658 1,198 1,163 1,158 1,202' 53 Netherlands 1,429 1,729 529 843 529 642 832 1,089 1,49C 54 Switzerland 610 763 611 514 611 436 472 404 503R 55 United Kingdom 5,827 4,502 3,833 3,564 3,833 3,579 3,387 3,236 3,727' MEMO 56 Euro area5 n.a. 8,819 7,961 n.a. n.a. 7,237 7,106 7,707 8,580' 57 Canada 2,757 3,502 2,818 3,076 2,818 2,760 2,752 2,623 2,790' 58 Latin America and Caribbean 5,959 5,851 4,859 5,567 4,859 4,912 4,530 4,324 4,346 59 Bahamas 20 37 42 35 42 42 28 35 31 60 Bermuda 390 376 369 526 369 422 214 270 287 61 Brazil 905 957 954 1,176 954 837 829 862 750 62 British West Indies4 181 137 95 124 95 73 26 12 19 63 Cayman Islands n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 64 Mexico 1,678 1,507 1,391 1,427 1,391 1,225 1,283 1,184 1,259 65 Venezuela 439 328 288 301 288 312 316 340 288 66 Asia 9,165 9,630 7,849 8,697 7,849 7,513 7,309 6,778 7,324 67 Japan 2,074 2,796 2,006 2,437 2,006 1,975 2,064 2,083 2,341 68 Middle Eastern oil-exporting countries5 1,573 1,024 850 892 833 657 889 819 818 69 Africa 631 672 645 838 645 630 605 637 584 70 Oil-exporting countries6 171 180 88 170 88 109 94 107 95 71 Allother7 1,537 1,533 1,602 1,431 1,602 1,860 1,767 1,704 1,946 MEMO 72 Financial claims on foreign affiliates8 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 1. Data available beginning March 2003. 6. Comprises Algeria, Gabon, Libya, and Nigeria. 2. Foreign currency detail available beginning March 2003. 7. Includes nonmonetary international and regional organizations. 3. Comprises Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, 8. Data available beginning March 2003. Includes financial liabilities to foreign affiliates Netherlands, Portugal, and Spain. As of December 2001, also includes Greece. of insurance underwriting subsidiaries of Bank/Financial Holding Companies and other 4. Beginning March 2003, data for the Cayman Islands replaced data for the British West financial intermediaries. These data are not included in lines 1-8 above. Indies. 5. Comprises Bahrain, Iran, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • August 2003 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 2003 2002 2003 TTrraannssaaccttiioonn,, aanndd aarreeaa oorr ccoouunnttrryy 22000011 22000022 Jan.- Apr. Oct. Nov. Dec. Jan. Feb. Mar. Apr.P U.S. corporate securities STOCKS 1 Foreign purchases 3,051,332 3,202,907 888,010 297,181 264,359 216,659 216,695 201,372 236,668 233,275 2 Foreign sales 2,934,942 3,153,465 885,684 293,565 257,879 214,243 219,477 203,461 233,828 228,918 3 Net purchases, or sales (-) 116,390 49,442 2,326 3,616 6,480 2,416 -2,782 -2,089 2,840 4,357 4 Foreign countries 116,187 49,495 2,370 3,610 6,473 2,400 -2,759 -2,091 2,860 4,360 5 Europe 88,099 33,006 1,321 2,187 4,407 4,883 -2,187 1,898 1,360 250 6 France 5,914 2,127 645 982 -323 676 206 270 1,816 -1,647 7 Germany 8,415 -127 -1,029 276 31 518 -64 -67 -780 -118 8 Netherlands 10,919 4,535 -148 760 629 792 366 -75 651 --11,,009900 y Switzerland 3,456 2,656 -1,638 -176 1,581 909 -724 -990 -22 9988 10 United Kingdom 38,493 15,173 -302 1,403 2,062 784 -2,761 1,938 -258 779 n Channel Islands and Isle of Man1 -698 -255 -17 94 23 -22 -2 -17 -42 44 12 Canada 10,984 7,433 4,802 342 47 746 1,480 -1,594 2.376 2,540 13 Latin America and Caribbean -5,154 -15.436 -5,658 -2,874 2,692 -2,348 -3,089 -2,261 -1,538 1,230 14 Middle East2 1,789 -1,293 -151 -90 -232 71 -72 -21 -51 -7 lb Other Asia 20,726 22,682 4,466 3,985 -775 -894 1,288 2,773 478 -73 16 Japan 6,788 12,337 416 -7 -961 -1,131 561 1,008 -60 --11,,009933 1/ -366 -72 68 -22 -16 -20 38 -9 -29 6688 18 Other countries 109 3,175 -2,478 82 350 -38 -217 -2,877 264 352 19 Nonmonetary international and regional organizations 203 -53 -44 6 7 16 -23 2 -20 -3 BONDS3 20 Foreign purchases 1,942,690 2,549,825 1,051,129 217,402 259,305 207,380 228,445 207,458 307,651 307,575 21 Foreign sales 1,556,745 2,172,047 894,341 185,366 218,351 178,510 180,749 184,557 263,306 265,729 22 Net purchases, or sales (-) 385,945 377,778 156,788 32,036 40,954 28,870 47,696 22,901 44,345 41,846 23 Foreign countries 385,379 377,515 156,756 31,632 40,914 28,684 47,840 23,066 44,414 41,436 24 Europe 195,412 167,572 89,996 16,532 17,116 10,526 27,942 16,318 20,746 24,990 2b France 5,028 3,771 1,659 1,089 383 ^34 1,092 63 142 362 26 Germany 12,362 5.149 1,409 -71 558 1,249 545 999 -180 45 27 Netherlands 1,538 -406 123 149 -61 -19 118 611 -2 -604 28 Switzerland 5,721 8,521 4,310 355 743 304 1,154 859 1,034 1,263 29 United Kingdom 152,772 109,836 54,567 9,852 8,812 6,768 15,960 6,826 14,772 17,009 30 Channel Islands and Isle of Man1 2,000 11,173 13,787 2,239 4,917 959 5,420 1,533 4,138 2,696 31 Canada 4,595 -1,037 -424 540 -757 -2,180 -892 193 1,169 -894 32 Latin America and Caribbean 77,019 82,837 12,367 4,339 5,471 7,379 6,564 -6,379 10,217 1,965 33 Middle East2 2,337 2,315 651 196 387 -120 591 42 37 -19 34 Other Asia 106,400 121,470 53,259 10,126 18,374 12,944 13,593 12,767 11,038 15,861 3b Japan 33,687 48,482 18,626 5,505 10,456 4,863 4,025 44,,556666 1,456 8,579 36 Africa 760 860 1,059 -18 56 28 53 8800 779 147 37 Other countries -1,144 3,498 -152 -83 267 107 -11 45 428 -614 38 Nonmonetary international and regional organizations 566 263 32 404 40 186 -144 -165 -69 410 Foreign securities 39 Stocks, net purchases, or sales (—) -50,113 -1,629 -14,661 -6,156 -981 -2,751 -6,893 -4,474 -5,365 2,071 40 Foreign purchases 1,397,664 1,260,278 369,467 100,763 101,821 81,804 94,622 83,683 91,102 100,060 41 Foreign sales 1,447,777 1,261,907 384,128 106,919 102,802 84,555 101,515 88,157 96,467 97,989 42 Bonds, net purchases, or sales (-) 30,502 28,406 8,682 6,920 2,269 -5,157 -1,915 4,493 7,315 -1,211 43 Foreign purchases 1,160,102 1,377,020 582,115 123,139 137,931 117,917 140,513 122,893 166,837 151,872 44 Foreign sales 1,129,600 1,348,614 573,433 116,219 135,662 123,074 142,428 118,400 159,522 153,083 45 Net purchases, or sales (-), of stocks and bonds -19,611 26,777 -5,979 764 1,288 -7,908 -8,808 19 1,950 860 46 Foreign countries -19,024 26,814 -5,990 711 1,300 -7,922 -8,829 -77 1,969 947 47 Europe -12,108 15,407 4,018 674 6,105 -9,095 -5,090 -1,592 6,268 4,432 48 Canada 2,943 4,849 3,591 -1,281 -167 712 3,890 603 -302 -600 49 Latin America and Caribbean 4,315 4,562 -16,675 -32 518 1,045 -7,886 862 -3,381 -6,270 50 Asia -11,869 1,591 2,418 1,694 -5,256 -987 -261 194 -971 3,456 51 Japan -20,116 -9,119 1,095 13 -6,617 -2,039 -1,233 -1,447 1,557 2,218 52 Africa -558 -379 -73 104 100 40 -55 -34 27 -11 53 Other countries -1,747 784 731 -448 0 363 573 -110 328 -60 54 Nonmonetary international and regional organizations -587 -37 11 53 -12 14 21 96 -19 -87 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 Area or country 20UI ZUVZ Jan. - Apr Oct. Nov. Dec. Jan. Feb. Mar. Apr.P 1 Total estimated 18,514 121,698 29,315 6,742 21,097 14,290 1,751 -4,703 25,550 6,717 2 Foreign countries 19,200 119,687 29,279 5,994 21,177 13,961 1,368 -4,459 25,601 6,769 3 Europe -20,604 44,169 -1,327 838 8,847 3,186 890 -7,520 -191 5,494 4 Belgium2 -598 2,046 -512 -210 513 -193 3,371 -1,379 -2,722 218 5 Germany -1,668 -3,910 -534 -469 1,658 1,610 -1,183 -257 -270 1,176 6 Luxembourg2 462 -1,609 549 61 -139 -201 75 358 83 33 7 Netherlands -6,728 -17,020 2,659 -2,856 1,427 3,261 -4,085 1,360 959 4,425 8 Sweden -1,190 2,923 894 -203 1,652 902 422 190 522 -240 9 Switzerland 1,412 -508 -853 -1,727 2,389 -2,543 -86 -1,050 1,067 -784 10 United Kingdom -7,279 60,995 1,651 5,071 -45 -2,739 1,313 -2,912 3,256 -6 11 Channel Islands and Isle of Man3 -179 714 175 -116 -299 -84 -11 9 37 140 12 Other Europe and former U.S.S.R -4,836 538 -5,356 1,287 1,691 3,173 1,074 -3,839 -3,123 532 13 Canada -1,634 -5,198 33 -2,449 3,165 1,028 -698 -1,871 1,782 820 14 Latin America and Caribbean 4,272 21,116 5,522 7,219 -1,758 6,074 -1,891 3,384 11,179 -7,150 15 Venezuela 290 -59 153 5 -1 -73 20 97 23 13 16 Other Latin America and Caribbean 14,726 21,955 7,699 4,485 319 1,652 2,676 2,323 8,550 -5,850 17 Netherlands Antilles -10,744 -780 -2,330 2,729 -2,076 4,495 -4,587 964 2,606 -1,313 18 Asia 36,332 55,850 24,552 -54 10,607 3,626 2,630 2,287 12,246 7,389 19 Japan 16,114 30,730 13,428 -1,313 2,120 2,731 3,512 5,580 -1,221 5,557 20 Africa -880 841 152 12 -17 90 84 -43 -16 127 21 Other 1,714 2,909 347 428 333 -43 353 -696 601 89 22 Nonmonetary international and regional organizations -686 2,011 36 748 -80 329 383 -244 -51 -52 23 International -290 1,642 16 329 314 164 170 -130 -109 85 24 Latin American Caribbean regional 41 -3 -118 4 -19 0 -15 -38 -28 -37 MEMO 25 Foreign countries 19,200 119,687 29,279 5,994 21,177 13,961 1,368 -4,459 25,601 6,769 26 Official institutions 3,474 15,131 -149 -553 16,577 6,708 -755 2,541 482 -2,417 27 Other foreign 15,726 104,556 29,428 6,547 4,600 7,253 2,123 -7,000 25,119 9,186 Oil-exporting countries 28 Middle East4 865 -3,918 -6,221 913 -139 -3,815 509 —4,252 128 -2,606 29 Africa5 -2 29 0 0 1 55 0 0 0 0 1. Official and private transactions in marketable US. Treasury securities having an 3. Before January 2001, these data were included in the data reported for the United original maturity of more than one year. Data are based on monthly transactions reports. Kingdom. Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab countries. Emirates (Trucial States). 2. Before January 2001, combined data reported for Belgium and Luxembourg. 5. Comprises Algeria, Gabon, Libya, and Nigeria. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics • August 2003 3.28 FOREIGN EXCHANGE RATES AND INDEXES OF THE FOREIGN EXCHANGE VALUE OF THE U.S. DOLLAR1 Currency units per U.S. dollar except as noted 2003 Jan. Feb. Mar. Apr. May June Exchange rates COUNTRY/CURRENCY UNIT 1 Australia/dollar2 58.15 51.69 54.37 58.29 59.56 60.15 61.00 64.68 66.52 2 Brazil/real 1.8301 2.3527 2.9213 3.4375 3.5955 3.4567 3.1090 2.9517 2.8887 3 Canada/dollar 1.4855 1.5487 1.5704 1.5414 1.5121 1.4761 1.4582 1.3840 1.3525 4 China, P.R./yuan 8.2784 8.2770 8.2770 8.2775 8.2780 8.2773 8.2772 8.2769 8.2771 5 Denmark/krone 8.0953 8.3323 7.8862 6.9980 6.8920 6.8807 6.8381 6.4268 6.3620 6 European Monetary Union/euro3 0.9232 0.8952 0.9454 1.0622 1.0785 1.0797 1.0862 1.1556 1.1674 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 7.7994 7.7995 7.7991 7.7996 7.7991 7.7988 9 India/rupee 45.00 47.22 48.63 47.96 47.75 47.68 47.39 47.11 46.70 10 Japan/yen 107.80 121.57 125.22 118.81 119.34 118.69 119.90 117.37 118.33 11 Malaysia/ringgit 3.8000 3.8000 3.8000 3.8000 3.8000 3.8000 3.8000 3.8000 3.8000 12 Mexico/peso 9.459 9.337 9.663 10.622 10.945 10.905 10.589 10.253 10.503 13 New Zealand/dollar2 45.68 42.02 46.45 53.98 55.39 55.37 55.18 57.56 58.15 14 Norway/krone 8.8131 8.9964 7.9839 6.9138 7.0004 7.2760 7.2032 6.8145 7.0093 15 Singapore/dollar 1.7250 1.7930 1.7908 1.7363 1.7451 1.7551 1.7771 1.7357 1.7351 16 South Africa/rand 6.9468 8.6093 10.5176 8.6949 8.2858 8.0506 7.6634 7.6604 7.8588 17 South Korea/won 1,130.90 1,292.01 1,250.31 1,176.45 1,190.37 1,237.20 1,231.10 1,201.23 1,194.14 18 Sri Lanka/rupee 76.964 89.602 95.773 96.813 96.880 96.943 97.004 97.231 97.236 19 Sweden/krona 9.1735 10.3425 9.7233 8.6368 8.4837 8.5440 8.4314 7.9213 7.8116 20 Switzerland/franc 1.6904 1.6891 1.5567 1.3765 1.3602 1.3614 1.3783 1.3111 1.3196 21 Taiwan/dollar 31.260 33.824 34.536 34.571 34.734 34.721 34.824 34.697 34.633 21 Thailand/baht 40.210 44.532 43.019 42.773 42.897 42.783 42.929 42.217 41.675 23 United Kingdom/pound2 151.56 143.96 150.25 161.75 160.79 158.25 157.39 162.24 166.09 24 Venezuela/bolivar 680.52 724.10 1,161.19 1,714.45 1,736.21 1,600.00 1,600.00 1,600.00 1,600.00 Indexes4 NOMINAL 25 Broad (January 1997-100)5 119.68 126.08 127.19 124.21 124.12 123.56 122.54 118.54 117.93 26 Major currencies (March 1973=100)6 98.31 104.28 102.85 96.03 95.02 94.28 93.98 89.67 88.68 27 Other important trading partners (January 1997—100)7 130.34 136.36 141.42 145.72 147.35 147.26 145.15 142.75 143.07 REAL 28 Broad (March 1973-100)5 104.47 110.50 110.88 107.69 107.91 107.71 106.61 103.06r 102.52 29 Major currencies (March 1973=IOO)6 103.29 110.73 109.36 102.13 101.47 100.83 100.34 95.51' 94.44 30 Other important trading partners (March 1973—100)7 114.81 119.48 122.30 124.44 125.97 126.42 124.32 122.44' 122.69 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 June 30, 2002 November 2002 A58 September 30, 2002 February 2003 A58 December 31, 2002 May 2003 A58 March 31,2003 August 2003 A58 Terms of lending at commercial banks August 2002 November 2002 A60 November 2002 February 2003 A60 February 2003 May 2003 A60 May 2003 August 2003 A60 Assets and liabilities of U.S. branches and agencies of foreign banks June 30, 2002 November 2002 A66 September 30, 2002 February 2003 A66 December 31, 2002 May 2003 A66 March 31, 2003 August 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 June 2003 A66 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 Special Tables • August 2003 4.20 DOMESTIC AND FOREIGN OFFICES Insured Commercial Bank Assets and Liabilities Consolidated Report of Condition, March 31, 2003 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 7,075,325 6,331,054 4,663,268 3,918,997 2,412,058 2 Cash and balances due from depository institutions 375,218 282,111 264,362 171,256 110,855 3 Cash items in process of collection, unposted debits, and currency and coin n.a. n.a. 128,450 125,988 n.a. 4 Cash items in process of collection and unposted debits n.a. n.a. n.a. 104,749 n.a. 5 Currency and coin n.a. n.a. n.a. 21,239 n.a. 6 Balances due from depository institutions in the United States n.a. n.a. 28,369 23,224 n.a. 7 Balances due from banks in foreign countries and foreign central banks n.a. n.a. 92,773 7,345 n.a. 8 Balances due from Federal Reserve Banks n.a. n.a. 14,771 14,699 n.a. 9 Total securities, held-to-maturity (amortized cost) and available-for-sale (fair value) 1,355,531 n.a. 783,801 n.a. 571,730 10 U.S. Treasury securities 63,717 n.a. 41,415 n.a. 22,302 11 U.S. government agency and corporation obligations (excludes mortgage-backed securities) 221199,,002200 n.a. 8844,,116622 n.a. 113344,,885588 12 Issued by U.S. government agencies 7,089 n.a. 4,253 n.a. 2,837 13 Issued by U.S. government-sponsored agencies 211,930 n.a. 79,909 n.a. 132,021 14 Securities issued by states and political subdivisions in the United States 103,613 n.a. 35,046 n.a. 68,567 15 Mortgage-backed securities (MBS) 749,562 n.a. 484,719 n.a. 264,844 16 Pass-through securities 486,864 n.a. 335,595 n.a. 151,269 17 Guaranteed by GNMA 87,242 n.a. 58,637 n.a. 28,605 18 Issued by FNMA and FHLMC 390,398 n.a. 269,046 n.a. 121,352 19 Other pass-through securities 9,224 n.a. 7,911 n.a. 1,312 20 Other mortgage-backed securities (includes CMOs, REMICs, and stripped MBS) 262,698 n.a. 149,124 n.a. 113,574 21 Issued or guaranteed by FNMA, FHLMC or GNMA 179,601 n.a. 96,781 n.a. 82,820 22 Collateralized by MBS issued or guaranteed by FNMA, FHLMC, or GNMA 13,210 n.a. 11,865 n.a. 1,345 23 All other mortgage-backed securities 69,887 n.a. 40,477 n.a. 29,410 24 Asset-backed securities 97,637 n.a. 53,781 n.a. 43,856 25 Credit card receivables 37,649 n.a. 22,424 n.a. 15,225 26 Home equity lines 31,095 n.a. 19,266 n.a. 11,829 27 Automobile loans 13,271 n.a. 5,646 n.a. 7,625 28 Other consumer loans 1,411 n.a. 951 n.a. 461 29 Commercial and industrial loans 4,446 n.a. 1,415 n.a. 3,031 30 Other 9,765 n.a. 4,081 n.a. 5,684 31 Other debt securities 104,537 n.a. 74,971 n.a. 29,567 32 Other domestic debt securities 37,092 n.a. 12,360 n.a. 24,732 33 Foreign debt securities 67,445 n.a. 62,610 n.a. 4,835 34 Investments in mutual funds and other equity securities with readily determinable fair value 17,445 n.a. 9,708 n.a. 7,737 35 Federal funds sold and securities purchased under agreements to resell 348,528 300,565 238,993 191,030 109,535 36 Federal funds sold in domestic offices 189,373 189,373 88,451 88,451 100,921 37 Securities purchased under agreements to resell 159,155 111,192 150,542 102,579 8,613 38 Total loans and leases (gross) and lease-financing receivables (net) 4,113,674 3,831,372 2,612,403 2,330,101 1,501,271 39 LESS: Unearned income on loans 3,444 2,417 2,376 1,349 1,067 40 LESS: Loans and leases held for sale 241,694 n.a. 197,853 n.a. 43,841 41 Total loans and leases (net of unearned income) 3,868,536 n.a. 2,412,174 n.a. 1,456,362 4? LESS: Allowance for loan and lease losses 74,971 n.a. 50,713 n.a. 24,257 43 Loans and leases, net of unearned income and allowance 3,793,566 n.a. 2,361,461 n.a. 1,432,105 Total loans and leases, gross, by category 44 Loans secured by real estate 2,089,555 2,058,440 11,,117722,,669900 1,141,576 991166,,886655 45 Construction and land development n.a. 210,559 n.a. 98,862 111,697 46 n.a. 38,704 n.a. 6,853 31,851 47 One- to four-family residential properties n.a. 1,172,109 n.a. 757,743 414,365 48 Revolving, open-end loans, extended under lines of credit n.a. 228,622 n.a. 156,350 72,273 Closed-end loans secured by one- to four-family residential properties 49 n.a. 885588,,115577 n.a. 552,111 330066,,004466 50 Secured by junior liens n.a. 85,329 n.a. 49,283 36,047 51 Multifamily (five or more) residential properties n.a. 73,786 n.a. 37,259 36,527 52 Nonfarm nonresidential properties n.a. 563,283 n.a. 240,858 322,425 53 Loans to depository institutions and acceptances of other banks 157,165 129,627 139,356 111,819 17,808 54 Commercial banks in the United States n.a. n.a. 89,822 76,116 n.a. 55 Other depository institutions in the United States n.a. n.a. 31,657 31,647 n.a. 56 Banks in foreign countries n.a. n.a. 17,878 4,056 n.a. 57 Loans to finance agricultural production and other loans to farmers 43,933 43,368 9,686 9,121 34,247 58 Commercial and industrial loans 898,698 771,310 649,889 522,501 248,809 59 U.S. addressees (domicile) n.a. n.a. 526,068 512,832 n.a. 60 Non-U.S. addressees (domicile) n.a. n.a. 123,821 9,669 n.a. 61 Loans to individuals for household, family, and other personal expenditures (includes 636,809 575,259 338888,,996688 327,418 247,841 6? 207,543 187,672 113344,,333344 114,463 73,209 63 Other revolving credit plans 37,332 24,746 30,765 18,179 6,567 64 Other consumer loans (including single-payment, installment, and all student loans) 391,934 362,841 223,869 194,776 168,065 65 Obligations (other than securities) of states and political subdivisions in the United States (includes nonrated industrial development obligations) 2211,,881122 2211,,881122 1122,,995544 1122,,995544 88,,885588 66 111,963 86,107 99,513 73,656 1122,,445500 67 Loans to foreign governments and official institutions 5,967 2,043 5,888 1,964 79 68 105,996 84,063 93,624 71,692 12,371 69 Loans for purchasing and carrying securities n.a. n.a. n.a. 14,421 n.a. 70 All other loans (excludes consumer loans) n.a. n.a. n.a. 57,271 n.a. 71 Lease-financing receivables 153,740 145,450 139,348 131,057 14,393 77 393,132 n.a. 389,407 n.a. 3,725 73 Premises and fixed assets (including capitalized leases) 79,725 n.a. 45,959 n.a. 33,766 74 Other real estate owned 4,533 n.a. 1,800 n.a. 2,733 75 Investments in unconsolidated subsidiaries and associated companies 9,088 n.a. 8,610 n.a. 478 76 Customers' liability on acceptances outstanding 5,626 n.a. 5,364 n.a. 262 77 Net due from own foreign offices, Edge Act and agreement subsidiaries, and IBFs n.a. n.a. n.a. 23,288 n.a. 78 Intangible assets 126,001 n.a. 100,896 n.a. 25,106 79 Goodwill 86,495 n.a. 68,812 n.a. 17,683 80 39,506 n.a. 32,084 n.a. 7,422 81 342,684 n.a. 264,763 n.a. 77,921 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, March 31, 2003 Millions of dollars except as noted Banks with Banks with foreign offices' 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 7,075,325 n.a. 4,663,268 n.a. 2,412,058 83 Total liabilities 6,421,177 5,676,906 4,245,567 3,501,296 2,175,610 84 Total deposits 4,738,491 4,086,101 2,966,171 2,313,781 1,772,320 85 Individuals, partnerships, and corporations (include all certified and official checks) 4,271,018 3,799,151 2,635,846 2,163,978 1,635,172 86 U.S. government n.a. 20,434 n.a. 19,082 1,351 87 States and political subdivisions in the United States n.a. 204,340 n.a. 91,749 112,591 88 Commercial banks and other depository institutions in the United States 97,946 52,879 75,167 30,100 22,779 89 Banks in foreign countries 118,328 8,374 117,942 7,988 386 90 Foreign governments and official institutions (including foreign central banks) 25,757 923 25,717 883 40 91 Total transaction accounts n.a. 692,537 n.a. 361,939 330,598 92 Individuals, partnerships, and corporations (include all certified and official checks) n.a. 590,964 n.a. 303,325 287,639 93 U.S. government n.a. 2,018 n.a. 1,171 847 94 States and political subdivisions in the United States n.a. 57,661 n.a. 26,039 31,622 95 Commercial banks and other depository institutions in the United States n.a. 35,514 n.a. 25,243 10,270 96 Banks in foreign countries n.a. 5,806 n.a. 5,595 211 97 Foreign governments and official institutions (including foreign central banks) n.a. 574 n.a. 566 8 98 Total demand deposits n.a. 519,761 n.a. 314,835 204,927 99 Total nontransaction accounts n.a. 3,393,565 n.a. 1,951,843 1,441,722 100 Individuals, partnerships, and corporations (include all certified and official checks) n.a. 3,208,187 n.a. 1,860,653 1,347,533 101 U.S. government n.a. 18,415 n.a. 17,911 504 102 States and political subdivisions in the United States n.a. 146,680 n.a. 65,710 80,969 103 Commercial banks and other depository institutions in the United States n.a. 17,366 n.a. 4,857 12,509 104 Banks in foreign countries n.a. 2,569 n.a. 2,394 175 105 Foreign governments and official institutions (including foreign central banks) n.a. 348 n.a. 316 32 106 Federal funds purchased and securities sold under agreements to repurchase 571,700 529,592 434,858 392,750 136,843 107 Federal funds purchased in domestic offices 236,681 236,681 168,777 168,777 67,904 108 Securities sold under agreements to repurchase 335,019 292,911 266,081 223,973 68,938 109 Trading liabilities 234,127 n.a. 233,367 n.a. 761 110 Other borrowed money (includes mortgage indebtedness and obligations under capitalized 539,600 499,873 327,180 287,453 212,420 111 Banks' liability on acceptances executed and outstanding 5,635 4,283 5,372 4,021 262 112 Subordinated notes and debentures to deposits 94,696 n.a. 85,726 n.a. 8,970 113 Net due to own foreign offices, Edge Act and agreement subsidiaries, and IBFs n.a. n.a. n.a. 135,584 n.a. 114 All other liabilities 236,928 n.a. 192,893 n.a. 44,035 115 Minority interest in consolidated subsidiaries 12,307 n.a. 10,168 n.a. 2,139 116 Total equity capital 641,841 n.a. 407,532 n.a. 234,309 MEMO 117 Trading assets at large banks2 392,796 205,937 389,132 202,273 3,664 118 U.S. Treasury securities (domestic offices) n.a. 27,575 n.a. 27,392 183 119 U.S. government agency obligations (excluding MBS) n.a. 8,205 n.a. 7,923 281 120 Securities issued by states and political subdivisions in the United States n.a. 1,299 n.a. 1,049 250 121 Mortgage-backed securities n.a. 5,247 n.a. 3,332 1,915 122 Other debt securities n.a. 36,455 n.a. 36,186 270 123 Other trading assets n.a. 21,544 n.a. 21,281 263 124 Trading assets in foreign offices 105,820 0 105,820 0 0 125 Revaluation gains on interest rate, foreign exchange rate, and other commodity and equity contracts 186,650 105,611 186,148 105,110 502 126 Total individual retirement (IRA) and Keogh plan accounts n.a. 167,012 n.a. 73,083 93,930 127 Total brokered deposits n.a. 267,491 n.a. 131,020 136,471 128 Fully insured brokered deposits n.a. 171,299 n.a. 64,765 106,534 179 Issued in denominations of less than $ 100,000 n.a. 93,279 n.a. 32,301 60,978 130 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. 78,020 n.a. 32,464 45,557 131 Money market deposit accounts (MMDAs) n.a. 1,522,672 n.a. 1,000,654 522,018 132 Other savings deposits (excluding MMDAs) n.a. 594,548 n.a. 348,037 246,510 133 Total time deposits of less than $100,000 n.a. 689,918 n.a. 280,864 409,054 134 Total time deposits of $100,000 or more n.a. 586,426 n.a. 322,287 264,139 135 Number of banks 7,844 7,844 121 n.a. 7,723 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 • August 2003 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 5-9, 2003 A. Commercial and industrial loans made by all commercial banks' Weighted- Weighted- Percent of amount of loans (percent) Commitment status Amount of Average average maturity/repri R c i i s n k g 2 i a n n t d e rval3 of loans l ( e o p f a e f n e r c c r e t a i n v t t e e ) 4 o ( f m l d o i o l a l l i n l o s a n r s s ) (th l o d o u o a s n ll a a n s r i d s z ) s e of ma D tu a r y i s t y5 S c e o c l u la re te d r a b l y p S re u p p b e a n je y a c m l t t y e t o n t P c e o r m c u e m n n d i t t e m m r e a n d t e LOAN RISK5 1 All commercial and industrial loans 3.32 61,825 450 461 38.0 23.9 31.5 73.1 2 Minimal risk 2.45 1,662 378 306 22.7 9.8 20.9 73.2 3 Low risk 2.38 11,211 1,043 434 13.0 29.5 15.9 71.4 4 Moderate risk 3.46 21,043 468 642 45.0 19.8 35.2 84.6 5 Other 3.77 20,013 424 329 47.3 22.5 36.2 72.0 By maturity/repricing interval 6 Zero interval 4.21 14,623 297 44.9 7.2 70.4 81.7 7 Minimal risk 3.92 282 219 828 36.1 3.9 69.8 97.0 8 Low risk 2.66 3,599 1,231 407 9.3 3.0 37.1 51.4 9 Moderate risk 4.32 5,587 309 803 56.0 4.5 86.0 95.5 10 Other 5.25 4,811 224 540 59.4 14.0 77.8 90.4 11 Daily 2.79 24,175 616 228 31.0 25.3 66.7 12 Minimal risk 1.81 540 2,251 16 1.9 3.1 85.1 13 Low risk 2.00 3,775 2,500 243 7.8 66.1 6.0 77.3 14 Moderate risk 2.74 7,028 687 359 35.6 11.6 21.3 74.0 15 Other 2.96 8,503 692 103 36.8 17.1 28.3 60.1 16 2 to 30 days 2.77 9,448 661 194 34.5 32.3 8.1 64.8 17 Minimal risk 1.87 401 1,235 196 18.2 17.6 3.3 43.2 18 Low risk 2.03 1,343 760 127 27.2 15.9 6.5 62.6 19 Moderate risk 2.68 2,664 775 216 37.2 30.5 8.1 78.8 20 Other 3.30 3,775 600 216 41.1 44.5 9.4 68.2 21 31 to 365 days 3.16 9,022 516 540 40.2 31.1 11.6 82.7 22 Minimal risk 2.41 380 245 564 37.5 21.4 28.3 72.9 23 Low risk 2.36 2,211 818 839 9.8 22.0 3.8 97.3 24 Moderate risk 3.47 3,144 438 480 59.4 33.8 11.3 90.5 25 Other 3.75 1,956 581 476 60.0 27.5 18.8 87.4 26 More than 365 days 4.80 4,247 280 53.2 27.1 77.0 27 Minimal risk 5.57 57 58 86.1 21.2 54.8 28 Low risk 5.52 227 126 83.5 1.5 19.8 84.2 28 Moderate risk .. 4.32 2,506 463 35.6 48.2 20.5 88.9 30 Other 5.45 871 302 75.4 17.9 37.0 68.4 Weighted- Weighted- average average risk maturity/ rating2 repricing interval* Days SIZE OF LOAN (thousands of dollars) 31 1-99 5.28 2,478 3.4 244 85.9 1.8 73.9 83.3 32 100-999 4.54 8,699 3.4 187 74.0 7.2 67.2 88.4 33 1,000-9,999 3.50 19,231 3.4 127 37.8 26.8 30.5 74.8 34 10,000 or more 2.73 31,417 3.1 107 24.4 28.4 18.9 67.0 Average size (thousands of dollars) BASE RATE OF LOAN4 35 Prime7 4.79 19,479 3.5 107 60.4 3.8 204.0 87.7 36 Other 2.65 42,346 3.1 140 27.7 33.1 1015.0 66.4 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, May 5-9, 2003—Continued B. Commercial and industrial loans made by all domestic banks1 maturity/repri R c i i s n k g 2 i a n n t d e rval3 of loans W l ( e o a p f e a v e f i n e e r g c c r h r a e t a t i g n e v t e t e d e ) 4 - A o ( f m m l d o o i o l a u l l i n n l o s a t n r s o s ) f (th l A o d o u o a v n s l e l a r a n s a r i d g s z ) s e e of W m a e a v D i t e g u a r h r y a i t s g t e y e d 5 - S c e o c l P u la r e e t r e d c r e a b n l y t of am p S o re u p u p b e n a n j t e y a o c m l f t t y e l t o n o t a ns (percent) P c e o r m c u e m C n n d i t o t e m m m r e m a n d i t e t m ent status LOAN RISK5 1 All commercial and industrial loans 3.62 39,618 299 601 51.1 13.5 40.8 78.7 2 Minimal risk 2.71 797 190 404 45.8 .1 30.5 51.7 3 Low risk 2.24 6,886 673 314 20.2 28.9 11.6 64.4 4 Moderate risk 3.64 17,284 395 742 51.5 16.0 40.4 84.1 5 Other 4.59 9,500 214 607 73.1 5.7 58.1 87.2 By maturity/repricing interval 6 Zero interval 4.06 11,504 240 577 55.4 1.1 70.3 76.7 7 Minimal risk 3.43 174 139 324 58.6 .5 56.6 95.1 8 Low risk 2.04 2,522 881 109 13.2 14.6 30.6 9 Moderate risk 4.38 5,189 290 827 58.8 1.4 88.4 95.1 10 Other 5.09 3,275 158 597 83.8 1.6 86.4 86.0 11 Daily 3.22 12,740 335 441 44.4 41.8 79.8 12 Minimal risk 1.67 131 819 66 7.9 12.9 38.6 13 Low risk 2.12 2,283 1,690 392 12.8 71.4 10.0 90.8 14 Moderate risk 2.98 5,323 532 460 44.8 12.1 27.5 67.9 15 Other 4.28 2,325 199 421 60.8 .5 71.4 85.9 16 2 to 30 days 2.95 5,827 447 247 44.3 10.6 73.7 17 Minimal risk 1.88 255 851 275 24.5 5.2 34.4 18 Low risk 2.07 1,046 619 116 34.9 5.1 8.3 61.2 19 Moderate risk 2.71 1,889 620 271 43.6 15.7 4.8 82.6 20 Other 4.19 1,686 297 338 62.7 12.5 19.6 95.2 21 31 to 365 days 3.39 5,117 317 506 61.7 17.0 86.6 22 Minimal risk 3.06 179 119 1,025 78.2 57.2 42.5 23 Low risk 2.45 805 322 576 25.8 37.3 8.0 94.1 24 Moderate risk 3.47 2,298 337 529 72.2 22.9 13.8 92.1 25 Other 3.83 1,282 471 493 76.1 11.2 24.2 93.6 26 More than 365 days 4.83 4,175 275 54.1 27.6 78.3 27 Minimal risk 5.57 57 58 86.1 21.2 54.8 28 Low risk 5.52 227 126 83.5 1.5 19.8 84.2 28 Moderate risk . .. 4.33 2,470 456 36.1 48.9 20.8 90.2 30 Other 5.54 835 290 78.6 14.3 38.6 71.4 Weighted- Weighted- average average risk maturity/ rating2 repricing interval3 Days SIZE OF LOAN (thousands of dollars) 31 1-99 5.30 2,454 3.4 246 86.5 1.6 74.2 32 100-999 4.62 8,011 3.4 201 78.0 3.0 70.3 33 1,000-9,999 3.61 12,148 3.3 188 54.0 12.1 37.5 80.7 34 10,000 or more 2.92 17,004 2.8 186 31.3 21.1 24.5 72.0 Average size (thousands of dollars) BASE RATE OF LOAN4 35 Prime7 16,179 3.4 128 69.5 1.4 172.0 89.9 36 Other 23,439 2.9 238 38.4 21.8 615.0 71.0 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 Special Tables • August 2003 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 5-9, 2003—Continued C. Commercial and industrial loans made by large domestic banks' Weighted- Weighted- Percent of amount of loans (percent) Commitment status maturity/repri R c i i s n k g 2 i a n n t d e rval3 of loans l ( e o a p f a v e f n e e r c r c r a e t a i g n v t e t e e ) 4 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 (th l A o d o u o a v n s l e l a r a n s a r i d g s z ) s e e of m a a v D t e u a r r y a i s g t y e 5 S c e o c l u la re te d r a b l y p S re u p p b e a n je y a c m l t t y e t o n t Prime based P c e o r m c u e m n n d t i t e m m r e a n d t e LOAN RISK5 1 All commercial and industrial loans 3.37 34,007 497 576 46.3 15.1 37.8 80.9 2 Minimal risk 1.94 578 1,077 373 35.2 .2 29.0 41.4 3 Low risk 1.94 6,287 2,681 259 13.4 31.4 6.6 64.0 4 Moderate risk 3.39 15,341 770 725 46.9 17.5 37.3 84.3 5 Other 4.48 7,893 282 571 68.5 5.7 55.0 90.7 By maturity/repricing interval6 6 Zero interval 3.89 9,112 435 595 48.2 .9 78.4 7 Minimal risk 2.92 82 329 224 70.0 1.1 73.2 95.5 8 Low risk 1.73 2,261 6,546 73 4.6 5.7 27.2 9 Moderate risk 4.27 4,367 546 53.3 1.4 87.0 96.3 10 Other 5.27 2,376 217 79.4 1.1 87.6 93.3 11 Daily 3.16 11,994 366 444 42.9 40.8 12 Minimal risk 1.65 129 1,114 66 6.9 12.3 38.0 13 Low risk 2.05 2,215 2,935 395 10.2 73.6 7.3 92.4 14 Moderate risk 2.87 5,050 633 458 42.3 12.7 25.9 66.4 15 Other 4.24 2,221 218 412 59.4 .5 70.2 86.2 16 2 to 30 days 2.81 5,205 681 241 41.9 5.8 75.4 17 Minimal risk 1.54 228 3.506 246 15.7 .7 26.8 18 Low risk 2.00 1,014 1,314 85 33.5 5.3 7.6 60.0 19 Moderate risk 2.56 1,796 1,247 248 41.2 16.1 2.9 82.7 20 Other 4.04 1,458 362 352 57.2 14.0 8.0 95.0 21 31 to 365 days 2.96 4,485 1,545 538 59.5 15.9 90.1 22 Minimal risk 2.24 127 2,090 2,186 75.3 71.1 32.5 23 Low risk 2.01 724 2,126 573 18.1 40.2 2.9 94.5 24 Moderate risk 3.02 2,022 1,901 562 70.8 25.7 12.6 93.6 25 Other 3.68 1,220 1,090 500 75.8 11.7 24.4 95.1 26 More than 365 days 4.21 3,018 1,128 39.3 24.3 83.9 27 Minimal risk 2.93 10 374 41.1 2.6 78.6 28 Low risk 3.90 71 561 51.9 3.2 29.2 94.6 28 Moderate risk .. . 3.91 2,022 1,716 24.7 57.7 14.2 94.8 30 Other 5.07 550 572 68.3 12.8 40.0 74.8 Weighted- Weighted- average average risk maturity/ rating2 repricing interval Days SIZE OF LOAN (thousands of dollars) 31 1-99 4.63 1,287 3.6 95 83.3 1.3 81.4 90.5 32 100-999 4.23 5,680 3.5 99 73.5 2.5 72.2 94.2 33 1,000-9,999 3.49 10,312 3.3 172 51.2 13.4 35.1 86.1 34 10,000 or more 2.91 16,727 2.8 187 31.2 21.5 24.5 72.5 Average size (thousands of dollars) BASE RATE OF LOAN4 35 Prime7 4.56 12,861 3.4 64.7 .7 240.0 93.3 36 Other 2.65 21,146 2.9 35.1 23.9 1,424.0 73.4 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, May 5-9, 2003—Continued D. Commercial and industrial loans made by small domestic banks' Risk2 and W a e v i e g r h a t g e e d - Am lo o a u n n s t of l A oa v n e r s a i g z e e W m a e a v i t e g u r h r a i t g t e y e d 5 - Percent of amount of loans (percent) Commitment status maturity/repricing interval3 of loans l e o f a f n e c r t a iv te e 4 o ( f m d i o ll l i l o a n r s s ) (tho d u o s ll a a n r d s) s of Secured by p S re u p b a je y c m t e t n o t Perc u e n n d t e m r ade (percent) Days collateral penalty commitment LOAN RISK5 1 All commercial and industrial loans 5.12 5,610 758 80.5 59.1 65.3 2 Minimal risk 4.75 218 480 73.9 34.4 79.1 3 Low risk 5.30 599 918 92.0 1.9 64.0 69.1 4 Moderate risk 5.58 1,943 873 87.5 4.4 65.4 82.7 5 Other 5.14 1,606 798 95.7 5.5 73.3 70.4 By maturity/repricing interval 6 Zero interval 4.68 2,392 496 82.9 83.6 70.4 7 Minimal risk 3.88 92 92 397 48.5 41.9 94.8 8 Low risk 4.69 261 104 459 87.8 91.7 60.5 9 Moderate risk 4.94 822 83 505 88.0 1.4 96.0 10 Other 4.61 92 599 95.6 3.0 83.0 11 Daily 4.18 143 2.6 57*. 3 12 Minimal risk 13 Low risk 4.56 114 283 97.5 .2 97.7 38.8 14 Moderate risk 5.06 273 135 482 90.9 .8 56.8 95.6 15 Other 5.16 104 70 583 90.7 .6 97.3 80.6 16 2 to 30 days 4.12 622 115 296 64.3 2.3 50.9 59.5 17 Minimal risk 4.78 27 113 546 100.0 44.2 99.4 18 Low risk 4.44 32 35 1,174 80.9 31.1 98.3 19 Moderate risk 5.65 93 58 734 88.7 8.0 40.6 81.6 20 Other 5.10 228 139 261 97.5 3.0 94.0 96.1 21 31 to 365 days 6.43 632 284 77.3 24.6 61.8 22 Minimal risk 5.06 52 199 85.2 23.3 67.0 23 Low risk 6.37 82 601 94.2 12.0 52.9 90.5 24 Moderate risk 6.81 276 82.5 2.1 22.4 80.9 25 Other 6.65 62 83.1 1.1 21.7 64.1 26 More than 365 days 6.43 1,157 93 92.7 36.0 63.7 27 Minimal risk 6.14 47 49 95.8 25.2 49.6 28 Low risk 6.26 156 93 97.9 15.6 79.4 28 Moderate risk . .. 6.26 448 106 87.3 9.1 50.7 69.6 30 Other 6.45 285 148 98.6 17.3 35.7 64.8 Weighted- Weighted- average average risk maturity/ rating2 repricing interval3 Days SIZE OF LOAN (thousands of dollars) 31 1-99 6.03 1,166 3.1 409 90.0 1.9 66.4 75.3 32 100-999 5.56 2,331 3.2 449 88.8 4.3 65.6 74.9 33 1,000-9,999 4.25 1,836 3.3 275 69.8 4.4 50.9 50.5 34 10,000 or more Average size (thousands of dollars) BASE RATE OF LOAN4 35 Prime7 . 5.15 3,318 3.4 243 88.2 4.1 81.0 76.9 36 Other . 5.09 2,293 3.0 551 69.2 3.0 99.0 48.6 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 Special Tables • August 2003 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 5-9, 2003—Continued E. Commercial and industrial loans made by U.S. branches and agencies of foreign banks1 Weighted- Weighted- Percent of amount of loans (percent) Commitment status maturity/repri R c i i s n k g 2 i a n n t d e rval3 of loans l e o a f a v f n e e r c r a t a i g v t e e e 4 A ( m m lo o il a u li n n o s t n s o f (th l A o o u a v n s e a r n s a i g d z e s e of m av at e u r r a i g ty e 5 Secured by Subject to Percent made (percent) of dollars) dollars) collateral prepayment under Days penalty commitment LOAN RISK5 1 All commercial and industrial loans 2.80 22,208 4,386 220 14.6 42.4 14.9 63.0 2 Minimal risk 2.21 865 4,532 235 1.5 18.7 12.0 93.0 3 Low risk 2.60 4,325 8,332 620 1.5 30.6 22.8 82.5 4 Moderate risk 2.63 3,759 3,119 183 15.4 37.4 11.0 86.5 5 Other 3.02 10,514 3,857 94 24.0 37.7 16.5 58.3 By maturity/repricing interval6 6 Zero interval 3,*1 19 7 Minimal risk 8 Low risk 4.14 1,076 17,857 1,093 10.2 100.0 9 Moderate risk 3.57 398 1,841 451 20.4 45.8 55.1 100.0 10 Other 5.58 1,536 1,854 360 7.3 40.5 59.4 99.9 11 Daily 2.32 11,436 8,963 15 52.1 12 Minimal risk 1.85 409 5,095 1 100.0 13 Low risk 1.81 1,491 9,376 24 .1 58.1 56.7 14 Moderate risk 2.00 1,705 7,543 71 7.0 10.0 1.8 93.0 15 Other 2.46 6,178 9,893 1 27.7 23.3 12.0 50.4 16 2 to 30 days 2.49 3,621 2,872 50.4 17 Minimal risk 18 Low risk 1.87 297 3,774 162 .1 53.6 67.6 19 Moderate risk 2.59 775 1,978 58 21.7 66.6 16.3 69.5 20 Other 2.59 2,089 3,346 126 23.7 70.4 1.1 46.5 21 31 to 365 days 3,906 22 Minimal risk 23 Low risk 2.31 1,405 6,824 991 .6 13.3 1.4 99.1 24 Moderate risk 3.48 846 2,306 342 24.6 63.5 4.6 86.4 25 Other 3.60 674 1,048 444 29.4 58.4 8.6 75.8 26 More than 365 days 27 Minimal risk 28 Low risk 28 Moderate risk . . 30 Other Weighted- Weighted- average average risk maturity/ rating2 repricing interval3 Days SIZE OF LOAN (thousands of dollars) 31 1-99 3.77 4.0 29.2 21.5 41.9 88.2 32 100-999 3.65 3.5 27.1 55.6 31.3 86.4 33 1,000-9,999 3.30 7,083 3.7 10.1 52.0 18.7 64.7 34 10,000 or more 2.51 14,412 3.4 16.1 37.1 12.2 61.0 Average size (thousands of dollars) BASE RATE OF LOAN4 35 Prime7 5.30 3,301 3.6 15.9 15.9 2,306 76.5 36 Other 2.36 18,907 3.5 14.4 47.0 5,206 60.6 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A65 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 5-9, 2003—Continued F. Commercial and industrial loans by date pricing terms were set and commitment status Weightedaverage DDaa aa tt nn ee dd pp cc rrii oo cc mm iinn mm gg ii tt tt ee mm rrmm eenn ss tt ww ss ee ttaa rree ttuu ss ss eett WW ll ee oo aa ff ee aa vv ff ii nn ee ee gg rr cc hh rr aa tt aa tt ii gg ee vv tt ee ee dd ee 44 -- AA oo (( ff mm mm ll dd oo oo iill oo aa uu ll ll ii nn nn ll oo ss aa tt nn rr ss oo ss )) ff (( AA tthh vv oo dd ee uu rr oo ss aa ss ll ii gg ll aa zz aa ee nn ee rr dd ss ll )) ss oo aa oo nn ff rr WW iiss aa kk ee vv ii ee gg rr rr aa hh aa tt tt gg ii ee nn ee dd gg -- 22 r m i e n p a t r t e u i r c r v i i a n ty l g Percent of amount of loans ((ppeerrcceenntt)) Days S c e o c l u la re te d r a b l y p S re u p p e b a n je y a c m l t t y e t n o t P b r a i s m ed e All commercial banks 1 During survey week 2.91 33,214 698 3.2 125 31.9 33.3 18.0 2 Not under commitment 2.79 16,646 713 3.4 115 31.3 35.0 14.4 3 Informal commitment 2.57 12,488 1,178 3.0 83 19.6 41.4 8.5 4 Formal commitment 4.42 4,080 300 3.3 295 72.3 1.5 61.2 Prior to survey week9 5 Up to 90 days 4.48 2,570 235 3.4 758 60.2 35.9 44.3 6 91 to 365 days 3.85 4,306 200 3.2 107 63.1 12.0 54.1 7 More than 365 days 3.75 10,345 415 3.5 93 41.4 18.2 38.9 Domestic banks 8 During survey week 3.34 18,515 411 2.9 216 45.4 23.2 27.3 9 Not under commitment 2.99 8,428 380 2.7 213 36.8 1.6 19.3 10 Informal commitment 3.14 6,092 653 2.8 164 40.1 67.8 16.2 11 Formal commitment 4.39 3,996 294 3.3 301 71.8 .8 61.1 Prior to survey week9 12 Up to 90 days 4.51 2,329 215 3.3 832 59.5 32.0 46.9 13 91 to 365 days 3.93 3,301 156 3.3 132 76.0 3.8 62.6 14 More than 365 days 3.67 6,697 288 3.3 136 55.9 2.2 46.5 Large domestic banks 15 During survey week 2.94 15,094 1,285 2.8 168 38.5 27.5 22.5 16 Not under commitment 2.49 6,482 1,058 2.6 168 28.3 .7 13.3 17 Informal commitment 2.86 5,536 1,302 2.8 135 34.5 73.9 10.9 18 Formal commitment 4.03 3,076 2,252 3.4 226 67.1 .3 62.6 Prior to survey week9 19 Up to 90 days 4.26 1,808 411 3.4 977 51.7 39.2 37.5 20 91 to 365 days 3.68 2,730 239 3.3 94 73.4 4.5 56.8 21 More than 365 days 3.63 6,462 331 3.3 126 55.1 2.1 45.2 Small domestic banks 22 During survey week 5.11 3,421 103 3.4 430 76.0 4.4 48.8 23 Not under commitment 4.66 1,945 121 3.3 366 65.1 4.5 39.4 24 Informal commitment 5.86 556 110 3.8 449 95.1 7.1 69.5 25 Formal commitment 5.60 919 75 3.2 552 87.3 2.6 55.9 Prior to survey week9 26 Up to 90 days 5.37 521 81 3.1 329 86.6 6.8 79.4 27 91 to 365 days 5.13 570 59 3.0 313 88.0 .6 90.4 28 More than 365 days 4.60 236 63 3.1 420 77.5 3.3 81.8 Foreign banks 29 During survey week 2.36 14,698 5,948 3.7 11 15.0 46.0 6.2 30 Not under commitment 2.58 8,218 7,052 4.2 14 25.8 69.3 9.4 31 Informal commitment 2.02 6,396 5,033 3.2 7 .0 16.3 1.2 32 Formal commitment * * * * * * * * Prior to survey week9 33 Up to 90 days 4.20 240 2,279 3.6 46 67.6 74.0 19.3 34 91 to 365 days 3.58 1,006 2,634 3.0 28 21.0 38.7 26.0 35 More than 365 days 3.89 3,647 2,181 3.9 15 14.9 47.6 24.8 NOTE. The Survey of Terms of Business Lending collects data on gross loan extensions next scheduled to reprice. For loans having rates that remain fixed until the loan matures made during the first full business week in the mid-month of each quarter. The authorized (fixed-rate loans), the "maturity/repricing" interval measures the number of days between the panel size for the survey is 348 domestically chartered commercial banks and 50 U.S. date the loan is made and the date on which it matures. Loans that reprice daily mature or branches and agencies of foreign banks. The sample data are used to estimate the terms of reprice on the business day after they are made. Owing to weekends and holidays, such loans loans extended during that week at all domestic commercial banks and all U.S. branches and may have "maturity/repricing" intervals in excess of one day; such loans are not included in agencies of foreign banks. Note that the terms on loans extended during the survey week may the 2 to 30 day category. differ from those extended during other weeks of the quarter. The estimates reported here are 4. Effective (compounded) annual interest rates are calculated from the stated rate and not intended to measure the average terms on all business loans in bank portfolios. other terms of the loans and weighted by loan amount. The standard error of the loan rate for 1. As of March 31, 2001, assets of the large banks were at least $4 billion. Median total all commercial and industrial loans in the current survey (line 1, column 1) is 0.10 percentage assets for all insured banks were roughly $80 million. Assets at all U.S. branches and agencies point. The chances are about two out of three that the average rate shown would differ by less averaged $2.7 billion. than this amount from the average rate that would be found by a complete survey of the 2. A complete description of these risk categories is available at "http:// universe of all banks. www.federalreserve.gov/boarddoc s/reportforms/ReportDetail.cfm?WhichFormId=FR_2028a/ 5. Average maturities are weighted by loan amount and exclude loans with no stated s." The category "Moderate risk" includes the average loan, under average economic maturities. conditions, at the typical lender. The "Other" category includes loans rated "Acceptable" as 6. For loans made under formal commitments, the average time interval between the date well as special mention or classified loans. The weighted-average risk rating published for on which the loan pricing was set and the date on which the loan was made, weighted by the loans in rows 31-36 are calculated by assigning a value of "1" to minimal risk loans; "2" to loan amount. For loans under informal commitment, the time interval is zero. low risk loans; "3" to moderate risk loans, "4" to acceptable risk loans; and "5" to special 7. Prime-based loans are based on the lending bank's own prime rate, any other lender's mention and classified loans. These values are weighted by loan amount and exclude loans prime rate, a combination of prime rates, or a publicly reported prime rate. Loans with with no risk rating. Some of the loans in table rows 1,6, 11, 16, 21, 26, and 31-36 are not "other" base rates include loan rates expressed in terms of any other base rate (e.g., the rated for risk. federal funds rate or LIBOR) and loans for which no base rate is used to determine the loan 3. The "maturity/repricing" interval measures the period from the date the loan is made rate. until it first may be repriced or matures. For floating-rate loans that are subject to repricing at 8. For the current survey, the average reported prime rate, weighted by the amount of loans any time—such as many prime-based loans—the maturity/repricing interval is zero. For priced relative to a prime base rate, was 4.27 percent for all banks, 4.25 percent for large floating-rate loans that have a scheduled repricing interval, the maturity/repricing interval domestic banks, and 4.25 percent for U.S. branches and agencies of foreign banks. measures the number of days between the date the loan is made and the date on which it is 9. For loans made under formal commitments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Special Tables • August 2003 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 20031 Millions of dollars except as noted All states2 New York California Illinois Item 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 1 Total assets4 1,040,935 117,055 916,528 93,547 17,105 4,931 33,095 3,117 2 Claims on nonrelated parties 789,936 47,825 707,202 44,399 15,651 1,127 32,916 1,177 3 Cash and balances due from depository institutions 62,821 19,213 55,345 17,393 1,208 593 1,770 1,093 4 Cash items in process of collection and unposted debits 2,495 0 2,449 0 1 0 28 0 Currency and coin (U.S. and foreign) 18 n.a. 14 n.a. 1 n.a. 0 n.a. 6 Balances with depository institutions in United States 38,260 7,539 33,267 6,343 833 262 1,453 843 7 U.S. branches and agencies of other foreign banks (including their IBFs) 31,938 6,979 27,461 5,846 612 212 11,,338855 884433 8 Other depository institutions in United States (including their IBFs) 6,322 560 5,807 497 221 50 68 0 9 Balances with banks in foreign countries and with foreign central banks 21,029 11,674 18,717 11,050 338 331 277 250 10 Foreign branches of U.S. banks 155 89 134 69 20 20 0 0 11 Banks in home country and home-country central banks 5,809 2,713 4,149 2,688 25 25 4 0 12 All other banks in foreign countries and foreign central banks 15,066 8,872 14,434 8,293 293 286 274 250 13 Balances with Federal Reserve Banks 1,019 n.a. 898 n.a. 35 n.a. 11 n.a. 14 Total securities and loans 418,478 22,915 357,880 21,416 13,925 466 25,317 81 15 Total securities, book value 135,070 4,560 124,085 4,195 1,533 282 4,914 1 16 U.S. Treasury 19,175 n.a. 17,009 n.a. 60 n.a. 1,994 n.a. 17 Obligations of U.S. government agencies and corporations 23,381 n.a. 22,563 n.a. 82 n.a. 408 n.a. 18 Other bonds, notes, debentures, and corporate stock (including state and local securities) 92,514 4,560 84,514 4,195 1,391 282 2,513 1 19 Securities of foreign governmental units 8,936 2,852 8,455 2,781 62 35 368 11 2.0 Mortgage-backed securities 33,484 0 28,773 0 220 0 822 00 21 Issued or guaranteed by U.S. government agencies 28,493 0 25,981 0 220 0 822 0 77 Other 4,992 0 2,792 0 0 0 0 0 73 Other asset-backed securities 9,953 57 9,878 57 0 0 0 0 24 All other 40,141 1,651 37,409 1,356 1,109 247 1,322 0 25 Federal funds sold 24,326 5,085 23,203 5,008 348 64 250 0 26 With depository institutions in the U.S 15,929 3,405 14,816 3,335 345 64 250 0 27 With others 8,397 1,680 8,387 1,673 3 0 0 0 28 Securities purchased under agreements to resell 111,933 0 111,807 0 0 0 106 0 29 With depository institutions in the U.S 13,469 0 13,449 0 0 0 0 0 30 With others 98,464 0 98,358 0 0 0 106 0 31 Total loans, gross 283,807 18,367 234,146 17,232 12,415 185 20,404 8800 3? LESS: Unearned income on loans 399 12 352 10 23 1 1 00 33 EQUALS: Loans, net 283,408 18,355 233,795 17,222 12,392 184 20,402 80 Total loans, gross, by category 34 Real estate loans 18,987 53 1144,,991144 53 33,,118833 00 5533 00 35 Loans to depository institutions and acceptances of other banks 65,697 6,307 54,440 5,717 1,808 78 6,153 8800 36 Commercial banks in United States (including their IBFs) 2,340 520 1,647 406 376 10 5 00 37 U.S. branches and agencies of other foreign banks 1,559 489 896 376 371 10 0 0 38 Other commercial banks in United States 781 31 751 31 5 0 5 0 39 Other depository institutions in United States (including their IBFs) .. . 0 0 0 0 0 0 0 0 40 Banks in foreign countries 9,854 5,390 8,049 4,963 148 6688 886600 30 41 Foreign branches of U.S. banks 89 46 89 46 0 00 00 0 4? Other banks in foreign countries 9,764 5,344 7,960 4,917 148 68 860 30 43 Loans to other financial institutions 53,503 398 44,744 348 1,284 0 5,288 50 44 Commercial and industrial loans 177,151 10,461 144,841 9,960 6,981 85 13,319 0 4S U.S. addressees (domicile) 142,869 124 115,181 124 6,447 0 12,024 0 46 Non-U.S. addressees (domicile) 34,282 10,337 29,661 9,836 534 85 1,295 0 47 Loans to foreign governments and official institutions (including foreign central banks) 4,133 1,474 33,,440066 1,441 257 2222 227788 00 48 Loans for purchasing or carrying securities (secured and unsecured) .... 10,760 4 10,464 0 0 0 99 0 49 All other loans 6,324 68 5,731 61 186 0 97 0 50 Lease financing receivables (net of unearned income) 755 0 351 0 0 0 404 0 51 U.S. addressees (domicile) 714 0 351 0 0 0 364 0 52 Non-U.S. addressees (domicile) 40 0 0 0 0 0 40 0 ST Trading assets 136,545 168 125,594 168 22 0 4,314 0 54 U.S. Treasury and agency securities 32,490 0 32,293 0 2 0 0 0 55 Other trading assets 104,055 168 93,300 168 20 0 4,313 0 56 All other assets 35,834 443 33,374 413 148 3 1,159 3 57 Customers' liabilities on acceptances outstanding 504 n.a. 413 n.a. 36 n.a. 30 n.a. 58 U.S. addressees (domicile) 390 n.a. 329 n.a. 35 n.a. 26 n.a. 59 Non-U.S. addressees (domicile) 115 n.a. 85 n.a. I n.a. 5 n.a. 60 Other assets including other claims on nonrelated parties 35,329 443 32,960 413 112 3 1,129 3 61 Net due from related depository institutions5 250,999 69,230 209,326 49,148 1,454 3,803 179 1,940 67 Net due from head office and other related depository institutions5 250,999 n.a. 209,326 n.a. 1,454 n.a. 179 n.a. 63 Net due from establishing entity, head office, and other related depository institutions5 n.a. 69,230 n.a. 49,148 n.a. 33,,880033 n.a. 11,,994400 64 Total liabilities4 1,040,935 117,055 916,528 93,547 17,105 4,931 33,095 3,117 65 Liabilities to nonrelated parties 915,209 102,566 812,842 79,427 9,708 4,787 28,928 3,086 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, March 31, 2003'—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 5 n g o IB nl F y s 3 exc T I l B o u t F d a s l i ng I o B n F ly s exc T I l B o u t F d a s l i ng I o B n F ly s exc T I l B o u t F d a s i l ng I o B n F ly s 66 Total deposits and credit balances 429,151 70,314 377,610 55,075 3,918 2,768 12,774 1,480 67 Individuals, partnerships, and corporations (including certified and official checks) 333,398 8,027 286,132 4,231 33,,441188 156 1122,,119955 6 68 U.S. addressees (domicile) 318,248 235 276,764 235 1,999 0 12,040 0 69 Non-U.S. addressees (domicile) 15,150 7,791 9,368 3,995 1,419 156 155 6 70 Commercial banks in United States (including their IBFs) 58,633 5,736 56,102 5,368 460 103 475 0 71 U.S. branches and agencies of other foreign banks 18,718 4,948 18,305 4,632 0 83 0 0 7? Other commercial banks in United States 39,915 788 37,797 736 460 20 475 0 73 Banks in foreign countries 8,385 27,595 8,065 21,518 21 1,661 100 348 74 Foreign branches of U.S. banks 1,335 2,050 1,334 1,369 0 121 0 59 75 Other banks in foreign countries 7,050 25,546 6,730 20,149 21 1,540 100 290 76 Foreign governments and official institutions (including foreign central banks) 8,197 28,956 8,113 23,958 1133 884499 2 11,,112266 77 All other deposits and credit balances 20,538 0 19,198 0 6 0 1 0 78 Transaction accounts and credit balances (excluding IBFs) 9,184 n.a. 7,247 n.a. 305 n.a. 190 n.a. 79 Individuals, partnerships, and corporations (including certified and official checks) 8,066 n.a. 6,294 n.a. 227755 n.a. 118877 n.a. 80 U.S. addressees (domicile) 5,326 n.a. 4,935 n.a. 79 n.a. 185 n.a. 81 Non-U.S. addressees (domicile) 2,739 n.a. 1,358 n.a. 196 n.a. 2 n.a. 82 Commercial banks in United States (including their IBFs) 105 n.a. 105 n.a. 0 n.a. 0 n.a. 83 U.S. branches and agencies of other foreign banks 7 n.a. 7 n.a. 0 n.a. 0 n.a. 84 Other commercial banks in United States 99 n.a. 98 n.a. 0 n.a. 0 n.a. 85 Banks in foreign countries 685 n.a. 573 n.a. 21 n.a. 0 n.a. 86 Foreign branches of U.S. banks 30 n.a. 30 n.a. 0 n.a. 0 n.a. 87 Other banks in foreign countries 655 n.a. 543 n.a. 21 n.a. 0 n.a. 88 Foreign governments and official institutions (including foreign central banks) 254 n.a. 221133 n.a. 3 n.a. 2 n.a. 89 All other deposits and credit balances 74 n.a. 62 n.a. 6 n.a. 1 n.a. 90 Nontransaction accounts (including MMDAs, excluding IBFs) 419,967 n.a. 370,364 n.a. 3,613 n.a. 12,583 n.a. 91 Individuals, partnerships, and corporations (including certified and official checks) 325,333 n.a. 279,839 n.a. 33,,114433 n.a. 1122,,000088 n.a. 92 U.S. addressees (domicile) 312,922 n.a. 271,829 n.a. 1,921 n.a. 11,856 n.a. 93 Non-U.S. addressees (domicile) 12,411 n.a. 8,010 n.a. 1,222 n.a. 153 n.a. 94 Commercial banks in United States (including their IBFs) 58,527 n.a. 55,997 n.a. 460 n.a. 475 n.a. 95 U.S. branches and agencies of other foreign banks 18,711 n.a. 18,299 n.a. 0 n.a. 0 n.a. 96 Other commercial banks in United States 39,816 n.a. 37,699 n.a. 460 n.a. 475 n.a. 97 Banks in foreign countries 7,700 n.a. 7,492 n.a. 0 n.a. 100 n.a. 98 Foreign branches of U.S. banks 1,305 n.a. 1,305 n.a. 0 n.a. 0 n.a. 99 Other banks in foreign countries 6,396 n.a. 6,187 n.a. 0 n.a. 100 n.a. 100 Foreign governments and official institutions (including foreign central banks) 7,943 n.a. 77,,990000 n.a. 1100 n.a. 00 n.a. 101 All other deposits and credit balances 20,463 n.a. 19,136 n.a. 0 n.a. 0 n.a. 102 IBF deposit liabilities n.a. 70,314 n.a. 55,075 n.a. 2,768 n.a. 1,480 103 Individuals, partnerships, and corporations (including certified and official checks) n.a. 8,027 n.a. 4,231 n.a. 115566 n.a. 66 104 U.S. addressees (domicile) n.a. 235 n.a. 235 n.a. 0 n.a. 00 105 Non-U.S. addressees (domicile) n.a. 7,791 n.a. 3,995 n.a. 156 n.a. 6 106 Commercial banks in United States (including their IBFs) n.a. 5,736 n.a. 5,368 n.a. 103 n.a. 0 107 U.S. branches and agencies of other foreign banks n.a. 4,948 n.a. 4,632 n.a. 83 n.a. 0 108 Other commercial banks in United States n.a. 788 n.a. 736 n.a. 20 n.a. 0 109 Banks in foreign countries n.a. 27,595 n.a. 21,518 n.a. 1,661 n.a. 348 110 Foreign branches of U.S. banks n.a. 2,050 n.a. 1,369 n.a. 121 n.a. 59 111 Other banks in foreign countries n.a. 25,546 n.a. 20,149 n.a. 1,540 n.a. 290 112 Foreign governments and official institutions (including foreign central banks) n.a. 28,956 n.a. 23,958 n.a. 849 n.a. 11,,112266 113 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 • August 2003 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 2003•—Continued Millions of dollars except as noted All states2 New York California Illinois IItteemm inc I 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 ng I o B n F ly s inc T I l B o u t F d a s i l ng I o B n F ly s inc T I l B o u t F d a s i l ng I o B n F ly s 114 Federal funds purchased 83,339 15,033 65,709 9,604 782 295 4,659 904 115 With depository institutions in the U.S 30,223 2,666 20,689 1,169 724 237 1,728 122 116 With others 53,116 12,367 45,019 8,436 58 58 2,932 782 117 Securities sold under agreements to repurchase 158,577 1,717 157,650 1,717 226 0 671 0 11S With depository institutions in the U.S 5,848 0 5,838 0 10 0 0 0 119 With others 152,730 1,717 151,812 1,717 216 0 671 0 120 Other borrowed money 67,537 15,035 58,502 12,593 1,862 1,717 4,727 698 121 Owed to nonrelated commercial banks in United States (including their IBFs) 9,989 3,065 9,281 2,694 333 234 281 125 122 Owed to U.S. offices of nonrelated U.S. banks 4,775 558 4,578 553 64 5 121 0 123 Owed to U.S. branches and agencies of nonrelated foreign banks 5,214 2,507 4,704 2,141 269 229 160 125 124 Owed to nonrelated banks in foreign countries 11,260 9,777 9,747 8,369 840 820 583 573 125 Owed to foreign branches of nonrelated U.S. banks 1,760 1,442 1,694 1,416 47 27 0 0 126 Owed to foreign offices of nonrelated foreign banks 9,500 8,334 8,053 6,953 793 793 583 573 127 Owed to others 46,287 2,193 39,474 1,529 689 663 3,863 0 128 All other liabilities 106,291 467 98,296 437 152 7 4,617 4 129 Branch or agency liability on acceptances executed and outstanding 532 n.a. 435 n.a. 36 n.a. 30 n.a. 130 Trading liabilities 78,316 43 72,614 43 11 0 3,358 1 131 Other liabilities to nonrelated parties 27,443 424 25,247 395 105 7 1,229 3 132 Net due to related depository institutions5 125,726 14,489 103,686 14,121 7,396 144 4,167 31 133 Net due to head office and other related depository institutions5 125,726 n.a. 103,686 n.a. 7,396 n.a. 4,167 n.a. 134 Net due to establishing entity, head office, and other related depository institutions5 n.a. 14,489 n.a. 14,121 n.a. 144 n.a. 31 MEMO 135 Holdings of own acceptances included in commercial and industrial loans 509 n.a. 349 n.a. 2 n.a. 98 n.a. 136 Commercial and industrial loans with remaining maturity of one year or less (excluding those in nonaccrual status) 78,209 n.a. 58,769 n.a. 4,050 n.a. 8,036 n.a. 137 Predetermined interest rates 30,829 n.a. 19,460 n.a. 1,903 n.a. 6,027 n.a. 138 Floating interest rates 47,380 n.a. 39,309 n.a. 2,147 n.a. 2,009 n.a. 139 Commercial and industrial loans with remaining maturity of more than one year (excluding those in nonaccrual status) 90,089 n.a. 78,496 n.a. 2,818 n.a. 4,773 n.a. 140 Predetermined interest rates 14,944 n.a. 13,365 n.a. 340 n.a. 411 n.a. 141 Floating interest rates 75,145 n.a. 65,130 n.a. 2,478 n.a. 4,362 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, March 31, 2003 '—Continued Millions of dollars except as noted All states2 New York California Illinois IItteemm ex I c T B l o u F t d a s i l 3 n g o IB nl F y s 3 exc T IB l o u F t d a s i l ng I o B n F ly s exc T I l B o u t F d a s i l ng I o B n F ly s exc T I l B o u t F d a s i l ng I o B n F ly s 111144442222 CCCCoooommmmppppoooonnnneeeennnnttttssss ooooffff ttttoooottttaaaallll nnnnoooonnnnttttrrrraaaannnnssssaaaaccccttttiiiioooonnnn aaaaccccccccoooouuuunnnnttttssss,,,, iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ttttoooottttaaaallll ddddeeeeppppoooossssiiiittttssss aaaannnndddd ccccrrrreeeeddddiiiitttt bbbbaaaallllaaaannnncccceeeessss 442,350 n.a. 391,011 n.a. 3,454 n.a. 12,700 n.a. 111144443333 TTTTiiiimmmmeeee ddddeeeeppppoooossssiiiittttssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee 413,684 n.a. 365,199 n.a. 3,445 n.a. 12,542 n.a. 111144444444 TTTTiiiimmmmeeee CCCCDDDDssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee wwwwiiiitttthhhh rrrreeeemmmmaaaaiiiinnnniiiinnnngggg mmmmaaaattttuuuurrrriiiittttyyyy ooooffff mmmmoooorrrreeee tttthhhhaaaannnn 11112222 mmmmoooonnnntttthhhhssss 28,666 n.a. 25,812 n.a. 10 n.a. 158 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 111144445555 IIIImmmmmmmmeeeeddddiiiiaaaatttteeeellllyyyy aaaavvvvaaaaiiiillllaaaabbbblllleeee ffffuuuunnnnddddssss wwwwiiiitttthhhh aaaa mmmmaaaattttuuuurrrriiiittttyyyy ggggrrrreeeeaaaatttteeeerrrr tttthhhhaaaannnn oooonnnneeee ddddaaaayyyy iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ooootttthhhheeeerrrr bbbboooorrrrrrrroooowwwweeeedddd mmmmoooonnnneeeeyyyy 28,521 n.a. 26,811 n.a. 1,250 n.a. 192 n.a. 111144446666 NNNNuuuummmmbbbbeeeerrrr ooooffff rrrreeeeppppoooorrrrttttssss ffffiiiilllleeeedddd6666 284 0 151 0 56 0 17 0 1. Data are aggregates of categories reported on the quarterly form FFIEC 002, "Report of either because the item is not an eligible IBF asset or liability or because that level of detail is Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks." The form was first not reported for IBFs. From December 1981 through September 1985, IBF data were used for reporting data as of June 30, 1980, and was revised as of December 31, 1985. From included in all applicable items reported. November 1972 through May 1980, U.S. branches and agencies of foreign banks had filed a 4. Total assets and total liabilities include net balances, if any, due from or owed to related monthly FR 886a report. Aggregate data from that report were available through the Federal banking institutions in the United States and in foreign countries (see note 5). On the former Reserve monthly statistical release G.l 1, last issued on July 10, 1980. Data in this table and in monthly branch and agency report, available through the G. 11 monthly statistical release, the G. 11 tables are not strictly comparable because of differences in reporting panels and in gross balances were included in total assets and total liabilities. Therefore, total asset and total definitions of balance sheet items. liability figures in this table are not comparable to those in the G. 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 • August 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, 45, 48-49, 52-53 Commercial and industrial loans Liabilities to, 45-7, 50-51, 54, 55 Commercial banks, 15-21, 58-59, 66-9 Weekly reporting banks, 17, 18 GOLD Commercial banks Certificate account, 10 Stock, 5, 45 Assets and liabilities, 15-21, 58-59 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 INDUSTRIAL production, 42, 43 Real estate mortgages held, by holder and property, 33 Insurance companies, 25, 33 Terms of lending, 60-5 Interest rates Time and savings deposits, 4 Bonds, 23 Commercial paper, 22, 23, 30 Condition statements (See Assets and liabilities) Commercial banks, 60-5 Consumer credit, 34 Consumer credit, 34 Corporations Federal Reserve Banks, 7 Money and capital markets, 23 Security issues, 29, 55 Mortgages, 32 Credit unions, 34 Prime rate, 22, 60-5 Currency in circulation, 5, 13 International capital transactions of United States, 44—55 Customer credit, stock market, 24 International organizations, 45, 46, 48, 50-3 Investment companies, issues and assets, 30 DEBT (See specific types of debt or securities) Investments (See also specific types) Demand deposits, 15-21 Commercial banks, 4, 15-21, 60-5 Depository institutions Federal Reserve Banks, 10, 11 Reserve requirements, 8 Financial institutions, 33 Reserves and related items, 4-6, 12 Deposits (See also specific types) LIFE insurance companies (See Insurance companies) Commercial banks, 4, 15-21, 58-59 Loans (See also specific types) Federal Reserve Banks, 5, 10 Commercial banks, 15-21, 58-59, 60-5 Discount rates at Reserve Banks and at foreign central banks and Federal Reserve Banks, 5-7, 10, 11 foreign countries (See Interest rates) Financial institutions, 33 Discounts and advances by Reserve Banks (See Loans) Foreign banks, U.S. branches and agencies, 66-9 Insured or guaranteed by United States, 32, 33 EURO, 56 MANUFACTURING FARM mortgage loans, 33 Capacity utilization, 40, 41 Federal agency obligations, 5, 9-11, 26, 27 Production, 42, 43 Federal credit agencies, 28 Margin requirements, 24 Federal finance Member banks, reserve requirements, 8 Debt subject to statutory limitation, and types and ownership of Mining production, 43 gross debt, 25 Monetary and credit aggregates, 4, 12 Federal Financing Bank, 28 Money and capital market rates, 23 Federal funds, 23 Money stock measures and components, 4, 13 Federal Home Loan Banks, 28 Mortgages (See Real estate loans) Federal Home Loan Mortgage Corporation, 28, 32, 33 Mutual funds, 13, 30 Federal Housing Administration, 28, 32, 33 Mutual savings banks (See Thrift institutions) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A71 OPEN market transactions, 9 Stock market, selected statistics, 24 Stocks (See also Securities) PRICES New issues, 29 Stock market, 24 Prices, 24 Prime rate, 22, 60-5 Student Loan Marketing Association, 28 Production, 42, 43 THRIFT institutions, 4 (See also Credit unions and Savings REAL estate loans institutions) Banks, 15-21, 33 Time and savings deposits, 4, 13, 15-21, 58-59 Terms, yields, and activity, 32 Treasury cash, Treasury currency, 5 Type and holder and property mortgaged, 33 Treasury deposits, 5, 10 Reserve requirements, 8 Reserves U.S. GOVERNMENT balances Commercial banks, 15-21 Commercial bank holdings, 15-21 Depository institutions, 4—6 Treasury deposits at Reserve Banks, 5, 10 Federal Reserve Banks, 10 U.S. government securities U.S. reserve assets, 45 Bank holdings, 15-21, 25 Residential mortgage loans, 32, 33 Dealer transactions, positions, and financing, 27 Retail credit and retail sales, 34 Federal Reserve Bank holdings, 5, 10, 11, 25 Foreign and international holdings and transactions, 10, 25, 55 SAVING Open market transactions, 9 Flow of funds, 33, 34, 35-9 Outstanding, by type and holder, 25, 26 Saving deposits (See Time and savings deposits) Rates, 23 Savings institutions, 33, 34, 35-9 U.S. international transactions, 44-55 Securities (See also specific types) Utilities, production, 43 Federal and federally sponsored credit agencies, 28 Foreign transactions, 54 VETERANS Affairs, Department of, 32, 33 New issues, 29 Prices, 24 WEEKLY reporting banks, 17, 18 Special drawing rights, 5, 10, 44 State and local governments YIELDS (See Interest rates) 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 • August 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 MICHELLE A. SMITH, Assistant to the Board DAVID H. HOWARD, Deputy Director WINTHROP P. HAMBLEY, Deputy Congressional Liaison THOMAS A. CONNORS, Associate Director ROSANNA PIANALTO-CAMERON, Special Assistant to the Board DALE W. HENDERSON, Senior Adviser DAVID W. SKIDMORE, Special Assistant to the Board RICHARD T. FREEMAN, Deputy Associate Director STEVEN B. KAMIN, Deputy Associate Director LEGAL DIVISION WILLIAM L. HELKIE, Senior Adviser J. VIRGIL MATTINGLY, JR., General Counsel JON W. FAUST, Assistant Director SCOTT G. ALVAREZ, Associate General Counsel JOSEPH E. GAGNON, Assistant Director RICHARD M. ASHTON, Associate General Counsel WILLENE A. JOHNSON, Adviser STEPHANIE MARTIN, Associate General Counsel MICHAEL P. LEAHY, Assistant Director KATHLEEN M. O'DAY, Associate General Counsel D. NATHAN SHEETS, Assistant Director ANN E. MISBACK, Assistant General Counsel RALPH W. TRYON, Assistant Director STEPHEN L. SICILIANO, Assistant General Counsel KATHERINE H. WHEATLEY, Assistant General Counsel DIVISION OF RESEARCH AND STATISTICS CARY K. WILLIAMS, Assistant General Counsel DAVID J. STOCKTON, Director EDWARD C. ETTIN, Deputy Director OFFICE OF THE SECRETARY DAVID W. WILCOX, Deputy Director JENNIFER J. JOHNSON, Secretary MYRON L. KWAST, Associate Director ROBERT DEV. FRIERSON, Deputy Secretary STEPHEN D. OLINER, Associate Director MARGARET M. SHANKS, Assistant Secretary PATRICK M. PARKINSON, Associate Director LAWRENCE SLIFMAN, Associate Director DIVISION OF BANKING SUPERVISION CHARLES S. STRUCKMEYER, Associate Director AND REGULATION JOYCE K. ZICKLER, Deputy Associate Director RICHARD SPILLENKOTHEN, Director J. NELLIE LIANG, Assistant Director STEPHEN C. SCHEMERING, Deputy Director S. WAYNE PASSMORE, Assistant Director HERBERT A. BIERN, Senior Associate Director DAVID L. REIFSCHNEIDER, Assistant Director ROGER T. COLE, Senior Associate Director JANICE SHACK-MARQUEZ, Assistant Director GERALD A. EDWARDS, JR., Associate Director WILLIAM L. WASCHER HI, Assistant Director STEPHEN M. HOFFMAN, JR., Associate Director MARY M. WEST, Assistant Director JAMES V. HOUPT, Associate Director ALICE PATRICIA WHITE, Assistant Director JACK P. JENNINGS, Associate Director GLENN B. CANNER, Senior Adviser MICHAEL G. MARTINSON, Associate Director DAVID S. JONES, Senior Adviser MOLLY S. WASSOM, Associate Director THOMAS D. SIMPSON, Senior Adviser HOWARD A. AMER, Deputy Associate Director NORAH M. BARGER, Deputy Associate Director DIVISION OF MONETARY AFFAIRS BETSY CROSS, Deputy Associate Director DEBORAH P. BAILEY, Assistant Director VINCENT R. REINHART, Director DAVID E. LINDSEY, Deputy Director BARBARA J. BOUCHARD, Assistant Director ANGELA DESMOND, Assistant Director BRIAN F. MADIGAN, Deputy Director JAMES A. EMBERSIT, Assistant Director JAMES A. CLOUSE, Deputy Associate Director CHARLES H. HOLM, Assistant Director WILLIAM C. WHITESELL, Deputy Associate Director WILLIAM G. SPANIEL, Assistant Director CHERYL L. EDWARDS, Assistant Director DAVID M. WRIGHT, Assistant Director WILLIAM B. ENGLISH, Assistant Director WILLIAM C. SCHNEIDER, JR., Project Director, RICHARD D. PORTER, Senior Adviser National Information Center ATHANASIOS ORPHANIDES, Adviser NORMAND R. V. BERNARD, Special Assistant to the Board 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 LISA HOSKINS, Assistant Director TONDA E. PRICE, Assistant Director DOROTHY LACHAPELLE, Assistant Director EDGAR A. MARTINDALE III, Assistant Director OFFICE OF MARSHA W. REIDHILL, Assistant Director STAFF DIRECTOR FOR MANAGEMENT JEFF J. STEHM, Assistant Director JACK K. WALTON II, Assistant Director STEPHEN R. MALPHRUS, Staff Director SHEILA CLARK, EEO Programs Director OFFICE OF THE INSPECTOR GENERAL LYNN S. FOX, Senior Adviser BARRY R. SNYDER, Inspector General MANAGEMENT DIVISION DONALD L. ROBINSON, Deputy Inspector General H. FAY PETERS, Deputy Director STEPHEN J. CLARK, Associate Director DARRELL R. PAULEY, 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 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Federal Reserve Bulletin • August 2003 Federal Open Market Committee and Advisory Councils FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman Vacant, 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 JOHN P. JUDD, Associate Economist THOMAS C. BAXTER, JR., Deputy General Counsel DAVID E. LINDSEY, Associate Economist KAREN H. JOHNSON, Economist CHARLES S. STRUCKMEYER, Associate Economist DAVID J. STOCKTON, Economist DAVID W. WILCOX, Associate Economist THOMAS A. CONNORS, 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 Vacant, 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, Hartford, Connecticut 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 • August 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 RISK MEASUREMENT AND SYSTEMIC RISK: PROCEEDINGS OF A 1982 December 1983 266 pp. $ 7.50 JOINT CENTRAL BANK RESEARCH CONFERENCE. 1996. 1983 October 1984 264 pp. $11.50 578 pp. $25.00 each. 1984 October 1985 254 pp. $12.50 1985 October 1986 231 pp. $15.00 1986 November 1987 288 pp. $15.00 EDUCATION PAMPHLETS 1987 October 1988 272 pp. $15.00 Short pamphlets suitable for classroom use. Multiple copies are 1988 November 1989 256 pp. $25.00 available without charge. 1980-89 March 1991 712 pp. $25.00 1990 November 1991 185 pp. $25.00 1991 November 1992 215 pp. $25.00 Consumer Handbook on Adjustable Rate Mortgages (also avail- 1992 December 1993 215 pp. $25.00 able in Spanish) 1993 December 1994 281 pp. $25.00 Consumer Handbook to Credit Protection Laws 1994 December 1995 190 pp. $25.00 A Guide to Business Credit for Women, Minorities, and Small 1990-95 November 1996 404 pp. $25.00 Businesses 1996-2000 March 2002 352 pp. $25.00 Series on the Structure of the Federal Reserve System The Board of Governors of the Federal Reserve System The Federal Open Market Committee SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES OF Federal Reserve Bank Board of Directors CHARTS. Weekly. $30.00 per year or $.70 each in the United Federal Reserve Banks States, its possessions, Canada, and Mexico. Elsewhere, A Consumer's Guide to Mortgage Lock-Ins $35.00 per year or $.80 each. A Consumer's Guide to Mortgage Settlement Costs REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL A Consumer's Guide to Mortgage Refinancings RESERVE SYSTEM. Home Mortgages: Understanding the Process and Your Right ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— to Fair Lending Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. How to File a Consumer Complaint about a Bank (also available Vol. II (Irregular Transactions). 1969. 116 pp. Each volume in Spanish) $5.00. In Plain English: Making Sense of the Federal Reserve GUIDE TO THE FLOW OF FUNDS ACCOUNTS. January 2000. Making Sense of Savings 1,186 pp. $20.00 each. Welcome to the Federal Reserve FEDERAL RESERVE REGULATORY SERVICE. Loose-leaf; updated When Your Home is on the Line: What You Should Know monthly. (Requests must be prepaid.) About Home Equity Lines of Credit (also available in Spanish) Consumer and Community Affairs Handbook. $75.00 per year. Keys to Vehicle Leasing (also available in Spanish) Monetary Policy and Reserve Requirements Handbook. $75.00 Looking for the Best Mortgage (also available in Spanish) per year. Privacy Choices for Your Personal Financial Information Securities Credit Transactions Handbook. $75.00 per year. When Is Your Check Not a Check? The Payment System Handbook. $75.00 per year. Federal Reserve Regulatory Service. Four vols. (Contains all four Handbooks plus substantial additional material.) $200.00 per year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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 Studies and papers on economic and financial subjects that are of PERFORMANCE" AND "EVENT STUDY" METHODOLOGIES, by Stephen A. Rhoades. July 1994. 37 pp. general interest. Staff Studies 1-158, 161, 163, 165, 166, 168, and 169 are out of print, but photocopies of them are available. Staff 170. THE COST OF IMPLEMENTING CONSUMER FINANCIAL REGU- LATIONS: AN ANALYSIS OF EXPERIENCE WITH THE TRUTH Studies 165-174 are available on line at www.federalreserve.gov/ IN SAVINGS ACT, by Gregory Elliehausen and Barbara R. pubs/staffstudies. Requests to obtain single copies of any paper or Lowrey. December 1997. 17 pp. to be added to the mailing list for the series may be sent to 171. THE COST OF BANK REGULATION: A REVIEW OF THE EVI- Publications. DENCE, by Gregory Elliehausen. April 1998. 35 pp. 172. USING SUBORDINATED DEBT AS AN INSTRUMENT OF MAR- 159. NEW DATA ON THE PERFORMANCE OF NONBANK SUBSIDI- KET DISCIPLINE, by Study Group on Subordinated Notes ARIES OF BANK HOLDING COMPANIES, by Nellie Liang and and Debentures, Federal Reserve System. December 1999. Donald Savage. February 1990. 12 pp. 69 pp. 160. BANKING MARKETS AND THE USE OF FINANCIAL SER- 173. IMPROVING PUBLIC DISCLOSURE IN BANKING, by Study VICES BY SMALL AND MEDIUM-SIZED BUSINESSES, by Group on Disclosure, Federal Reserve System. March 2000. Gregory E. Elliehausen and John D. Wolken. September 35 pp. 1990. 35 pp. 174. BANK MERGERS AND BANKING STRUCTURE IN THE UNITED 162. EVIDENCE ON THE SIZE OF BANKING MARKETS FROM MORT- STATES, 1980-98, by Stephen Rhoades. August 2000. 33 pp. GAGE LOAN RATES IN TWENTY CITIES, by Stephen A. 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 • August 2003 Maps of the Federal Reserve System 1 m STON 3%W JKN EW YORK Phit ADELPHIA W -V... - • Q-^^JEV: i i • i,, . • » LEGEND fietf/i 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 MB Pittsburgh BaltimoteBMD NY /" A • 1 X 'Cincinnati Bufialo MA- CT : ^ KI BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G S-H Birmingham isville Miami ATLANTA CHICAGO ST. LOUIS 9-1 (Hateaa.'; MINNEAPOLIS 10-J 12-L MO 11-K AZ DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 Federal Reserve Bulletin • August 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. Thomas J. Mackell, Jr. Walter A. Varvel Baltimore 21203 Owen E. Herrnstadt William J. Tignanelli1 Charlotte 28230 Michael A. Almond Dan M. Bechter1 ATLANTA 30303 Paula Lovell JackGuynn 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 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 LupeFraga Robert Smith III1 San Antorrio 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 Mark Gould •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