Federal Reserve Bulletin, 2003-12

Volume 89 • Number 12 • December 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 477 RECENT DEVELOPMENTS IN BUSINESS 497 LEGAL DEVELOPMENTS LENDING BY COMMERCIAL BANKS Various bank holding company, bank service After growing rapidly during much of the 1990s, corporation, and bank merger orders; and pendthe real value of commercial and industrial ing cases. (C&I) loans at domestic commercial banks and at U.S. branches and agencies of foreign banks AI FINANCIAL AND BUSINESS STATISTICS has fallen 19 percent since the beginning of These tables reflect data available as of 2001. The recent contraction in business loans the first week of November 2003. has been concentrated at large banking institutions and appears to stem from the com- A3 GUIDE TO TABLES bined effects of weak demand for credit and a tightening of lending standards and terms. The A4 Domestic Financial Statistics move toward a more-stringent lending posture, A42 Domestic Nonfinancial Statistics although partly cyclical, also reflects a reassess- A44 International Statistics ment of the risks and returns of C&I lending. This reassessment, in turn, is due partly to struc- A57 GUIDE TO SPECIAL TABLES AND tural changes in the market, including the STATISTICAL RELEASES increased participation of nonbank financial institutions, the growth of the secondary loan A58 INDEX TO STATISTICAL TABLES market, and the greater use of credit derivatives by some banks. A60 BOARD OF GOVERNORS AND STAFF 493 ANNOUNCEMENTS A62 FEDERAL OPEN MARKET COMMITTEE AND STAFF; ADVISORY COUNCILS Vice Chairman Ferguson and Governor Bernanke take oaths of office A64 FEDERAL RESERVE BOARD PUBLICATIONS Federal Open Market Committee statement A66 ANTICIPATED SCHEDULE OF RELEASE Approval of fee schedules for Federal Reserve DATES FOR PERIODIC RELEASES Bank priced services Approval of modified method for imputing A68 MAPS OF THE FEDERAL RESERVE SYSTEM priced-service income A70 FEDERAL RESERVE BANKS, BRANCHES, Joint agencies announce proposed treatment of AND OFFICES expected and unexpected losses under the new Basel Capital Accord A7I INDEX TO VOLUME 89 Release of minutes of Board's discount rate meetings Enforcement actions Staff changes Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in Business Lending by Commercial Banks William F. Bassett and Egon Zakrajsek, of the Board's 1. Real value of C&I loans at banks, 1988-2003 Division of Monetary Affairs, prepared this article. Jason Grimm and Steve Piraino provided research Billions of 1996 dollars assistance. 1,100 After growing rapidly during much of the 1990s, the inflation-adjusted value of commercial and industrial (C&I) loans at domestic commercial banks and at U.S. branches and agencies of foreign banks has fallen 19 percent since the beginning of 2001 (chart l).1 This striking decline in aggregate C&I loans masks important differences in lending patterns at domestically chartered institutions of different sizes and at U.S. branches and agencies of foreign i i i ii i i i i i i i i i i i i i i banks. A drop in loans at large domestic commercial 1989 1991 1993 1995 1997 1999 2001 2003 banks and at foreign institutions accounts for the NOTE. The data are monthly through October 2003 and are deflated by the entire contraction in C&I loans since January 2001.2 price deflator for business-sector output (1996 = 100). Here and in the following charts, shaded bars represent recessions as dated by the National In contrast, the real growth rate of business loans Bureau of Economic Research. See also text note 2. at small commercial banks, though it has declined SOURCE. Federal Reserve Board, Statistical Release H.8, "Assets and Liabilities of Commercial Banks in the United States" (www.federalreserve. appreciably, has averaged almost 4 percent annually gov/releases/h8); Bureau of Economic Analysis. since early 2001. The recent runoff in C&I loans this article focuses on business lending at domestic contrasts sharply with that of the early 1990s: The institutions, for two reasons.3 First, U.S. branches and earlier contraction in lending at large and small domestic banks was more uniform and was partly offset by a robust expansion of business loans at 3. For further discussion of foreign banking organizations, see Allen N. Berger and David C. Smith, "Global Integration in the foreign institutions (chart 2). Banking Industry," Federal Reserve Bulletin, vol. 89 (November Although branches and agencies of foreign banks 2003), pp. 451-60. are important participants in the C&I loan market, 2. Real growth rate of C&I loans, by type of bank, 1988-2003 1. C&I loans are business loans not secured by real estate. 2. Banks consist of the following types of institutions in the fifty Percent states and the District of Columbia: domestically chartered commercial banks that submit a weekly report of condition (large domestic); other domestically chartered commercial banks (small domestic); branches and agencies of foreign banks, and Edge Act and agreement corporations (foreign-related institutions). Banks exclude international banking facilities. The category of large domestic banks in the Federal Reserve's weekly H.8 statistical release, "Assets and Liabilities of Commercial Banks in the United States," includes about forty of the largest domestic commercial banks, which together account for about 55 percent of assets held by all domestic banks. Domestic institutions not included in the large bank category compose the small bank category. Large domestic banks constitute a universe; data for small domestic banks and foreign-related institutions are estimates based on weekly samples and on quarter-end condition reports. Data are adjusted for breaks caused by reclassifications of assets and liabilities. The data for large and small domestic banks are also adjusted to remove the estimated effects of mergers between these two groups. For further details about the H.8 release, see NOTE. The data are monthly through October 2003; change is for twelve www.federalreserve.gov/releases/h8. months. See also text note 2. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

478 Federal Reserve Bulletin • December 2003 agencies compete most directly with large domestic These institutions further tightened their commercial banks for customers in the C&I loan market. There- credit policies as the economy slipped into recession fore, the factors that depressed lending at large and as a substantial deterioration in the credit quality domestic banks over the past three years likely of their borrowers pushed delinquencies and chargeexerted a similar influence on foreign institutions. offs on C&I loans to high levels. Second, the analysis of business lending at branches The move toward a more stringent lending posture and agencies of foreign banks is complicated by the by domestic commercial banks before and during the pronounced downward trend in their share of C&I recent economic downturn, although partly cyclical, loans (chart 3). The reduced intermediation by for- has also been influenced by a reassessment of the eign institutions since the mid-1990s has been due risk-return tradeoff inherent in C&I lending, espelargely to a sharp pullback in business lending by the cially relative to the lax lending atmosphere of the U.S. branches and agencies of Japanese banks, many mid-1990s. These structural changes in the way comof which are saddled with a substantial volume of mercial banks price and allocate certain forms of nonperforming loans and face significant pressures business credit likely represent the cumulative effect on their capital positions. of significant institutional developments in the C&I The divergence between large and small domestic loan market since the late 1980s. In large part, these commercial banks in the growth of business loans developments have arisen from the increased particiover the past three years appears to stem from the pation of nonbank financial institutions in the syncombined effects of weakness in demand for C&I dicated loan market, which in turn has contributed loans from larger businesses and a relatively greater importantly to the growth of the secondary loan martightening of supply conditions at large banks. ket and of leveraged lending—that is, lending to Although sharp cutbacks in capital spending and large below-investment-grade borrowers. To the steep inventory runoffs since early 2001 have sig- extent that these markets are almost exclusively provnificantly reduced demand for C&I loans from bor- inces of large financial institutions, the reassessment rowers of all sizes, the decline in loan demand from of the attractiveness of syndicated and some forms larger corporate borrowers—which maintain lending of traditional C&I lending has disproportionately relationships mainly with large banks—has been affected large commercial banks and has contributed especially pronounced. The reduction in demand for to the divergence in business lending patterns business loans from larger firms has been exacer- between large and small domestic banks. bated by an evaporation of merger and acquisition In contrast to C&I loans, other forms of credit at (M&A) activity and a substitution of bond finance for domestic commercial banks have flowed relatively bank loans on firms' balance sheets. On the supply freely during the past several years. Although the side, large commercial banks tightened their credit growth of real bank credit declined notably during standards and began imposing more stringent loan the 2001 recession, it did not fall as low as it did terms well before the recent economic downturn. in the early 1990s, and its recovery has been much 3. Share of C&I loans held by U.S. branches and 4. Change in real value of bank credit, 1988-2003 agencies of foreign banks, 1988-2003 NOTE. The data are monthly through October 2003 and are deflated by the NOTE. The data are monthly through October 2003. GDP price deflator (1996 = 100); change is for twelve months. SOURCE. Federal Reserve Board, Statistical Release H.8. SOURCE. Federal Reserve Board, Statistical Release H.8. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in Business Lending by Commercial Banks 479 5. Measures of bank profitability, 1985-2003:Q3 fee-generating lines of business, commercial banks have remained highly profitable despite an increase Percent Percent in loan losses, especially on C&I loans (chart 5). Thus, in sharp contrast to the circumstances of the 16 — 1.4 ^ Return on equity early 1990s and despite some restrictions on the — 1.2 supply of business credit from large domestic com- 12 — , Return on assets — 1.0 mercial banks, the banking sector has remained well 10 — \ \ // capitalized and is poised to support growth in demand — .8 8 — '\ for business loans (chart 6). — .6 6 — \\ // — .4 4 — \ 2 — W — .2 FACTORS AFFECTING THE DEMAND + * + 0 — — 0 FOR C&I LOANS 1 1 1 1 1 1 1 1 1 1 1 1 1 i 1 1 1 1 I 1 1 1 1985 1988 1991 1994 1997 2000 2003 Between 1997 and 2000, spending on capital equip- NOTE. The return on equity and the return on assets are annual; for 2003, ment by businesses boomed. As a result, the gap they are estimates based on seasonally adjusted data through 2003:Q3. between capital expenditures and internally gener- SOURCE. Call Report. ated funds for the nonfarm nonfinancial corporate sector—relative to the output of the sector—shot up brisker (chart 4). In this cycle, bank credit has been from IV2 percent at the end of 1997 to more than buoyed by a substantial expansion of banks' real 4 percent at its peak in 2000 (chart 7). Concomitantly, estate portfolios and holdings of mortgage-backed the bull market in equities supported a frenzied pace securities. At the same time, the growth of consumer of mergers and acquisitions, for many of which comspending has held up well, allowing commercial mercial banks provided initial financing. Not surprisbanks to continue increasing their holdings of credit ingly, the expansion of C&I loans at both large and card and other types of consumer loans. Partly as a small domestic commercial banks reached doubleresult of the robust lending to households, a resilient digit annual rates over this period. commercial real estate loan market, and growth in The strong pace of corporate spending, however, proved unsustainable, and companies sharply reduced their capital expenditures as the economy 6. Regulatory capital ratios, 1990-2003:Q3 entered recession in March 2001. Firms also responded Percent quickly to falling sales by curtailing production to 7. Financing gap at nonfarm nonfinancial Total (tier 1 + tier 2) ratio corporations, 1988-2003:Q2 1991 1993 1995 1997 1999 2001 2003 NOTE. Regulatory capital ratios are seasonally adjusted. Tier 1 capital consists primarily of common equity (excluding intangible assets such as goodwill and net unrealized gains on investment account securities classified as available for sale) and certain perpetual preferred stock. Tier 2 capital consists primarily of subordinated debt, preferred stock not included in tier 1 U ! 1 1 I I I I i i I ! I 1 I I I 1 capital, and loan-loss reserves. Total capital is tier 1 plus tier 2 capital. 1989 1991 1993 1995 1997 1999 2001 2003 Risk-weighted assets are calculated by multiplying the amount of assets and the credit-equivalent amount of off-balance-sheet items (an estimate of the NOTE. The data are annual through 2002; for 2003, they are estimates potential credit exposure posed by the item) by the risk weight for each based on data through 2003 :Q2. The financing gap is the difference between category. The risk weights rise from 0 to 1 as the credit risk of the assets capital expenditures and internally generated funds, expressed as a fraction of increases. The leverage ratio is the ratio of tier 1 capital to average tangible output by the nonfarm nonfinancial corporate sector. assets. Tangible assets are equal to total assets less assets excluded from SOURCE. Federal Reserve Board, Statistical Release Z.l, "Flow of Funds common equity in the calculation of tier 1 capital. Accounts of the United States," table L.101 (www.federalreserve.gov/ SOURCE. Call Report. releases/zl). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

480 Federal Reserve Bulletin • December 2003 avoid an accumulation of inventories and associated 9. Change in real spending on equipment and software and the net percentage of banks reporting stronger financing costs. Compounding the reduction in demand for C&I loans as a result of increased capital demand for business credit, especially at large banks, expenditures, 1997:Q 1-2003 :Q4 was the steep drop in equity prices, which largely short-circuited M&A activity. With capital spending and merger activity dropping off, extensions of loans slumped. A sluggish recovery in an uncertain economic climate did little to lift business fixed investment in 2002, and businesses lacked an incentive to rebuild depleted inventory stocks. Although capital spending has picked up in 2003, a rebound in corporate profits, partly reflecting robust gains in productivity, has limited firms' needs for external funds. As Reporting stronger demand a result, the financing gap has remained at its preboom level. Credit demands to finance mergers and acquisitions have also remained weak despite a substantial rise in equity prices in 2003. i I i i i I i i i I i i i I i i i I 1 i i i I i i i 1 i I 1997 1998 1999 2000 2001 2002 2003 The cyclical fluctuations in demand for C&I loans NOTE. The data are quarterly; change is for four quarters. Net percentage is are evident in the responses to the Federal Reserve's the percentage of banks reporting stronger demand because of increased Senior Loan Officer Opinion Survey on Bank Lend- capital expenditures less the percentage reporting weaker demand because of reduced capital expenditures. ing Practices (informally, the bank lending prac- SOURCES. Federal Reserve Board, Senior Loan Officer Opinion Survey on tices survey, or BLPS).4 According to the survey, the Bank Lending Practices; Bureau of Economic Analysis. demand for C&I loans from small firms, as well as middle-market and large firms, has weakened con- A detailed look at the fluctuations in demand for tinuously since the middle of 2000 (chart 8). More- C&I loans is possible from 1997 onward because over, the reported weakening in demand has persisted respondents to the BLPS have been queried regularly considerably longer after the official end of the most since then about the factors affecting demand for recent recession than it did after the cyclical trough in business loans at their banks. Consistent with the March 1991. retrenchment in investment spending, the most cited reason for the reported decline in demand at respon- 4. For text of questions and tallies of responses in surveys con- dent banks since the end of 2000 has been a decrease ducted since the beginning of 1997, see www.federalreserve.gov/ in their customers' capital expenditures (chart 9). boarddocs/SnLoanSurvey. 10. Change in real nonfarm inventories and the net 8. Net percentage of banks reporting stronger demand percentage of banks reporting stronger demand for C&I loans, by size of borrower, 1991:Q4-2003:Q4 for C&I loans as a result of increased inventory financing needs, 1997:Q4-2003:Q4 Percent Percent Inventories + Reporting stronger demand 0 — Large and middle-market I I i I I I I I I 1 NOTE. The data are quarterly. Net percentage is the percentage of banks 1997 1998 1999 2000 2002 2003 reporting stronger demand less the percentage reporting the opposite. The definition for firm size sugggested for, and generally used by, survey NOTE. The data are quarterly; change is for four quarters. Net percentage is repondents is that large and middle-market firms have sales of more than the percentage of banks reporting stronger demand because of increased $50 million. inventory financing needs less the percentage reporting weaker demand SOURCE. Federal Reserve Board, Senior Loan Officer Opinion Survey on because of reduced inventory financing needs. Bank Lending Practices. SOURCE. See source note to chart 9. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in Business Lending by Commercial Banks 481 11. Net equity retirements by domestic corporations and activity—and support the view that large banks expethe net percentage of large banks reporting stronger rienced a relatively bigger drop in C&I loan demand demand for C&I loans as a result of increased M&A than did small banks. financing needs, 1998:Q1-2003:Q4 Another factor contributing to the weakness in demand for business loans since 2001 has been heavy corporate bond issuance, as firms have substituted longer-term debt for short-term debt obligations, such as C&I loans and commercial paper (chart 12). The runoff in commercial paper significantly reduced the demand for commercial paper backup lines of credit, which are provided mainly by large commercial banks.5 Accordingly, firms' preference for longerterm, public-market debt partly reduced the unused lines of credit at commercial banks (chart 13). Firms' decisions to lengthen the average maturity of their outstanding debt was importantly influenced by substantial declines in longer-term interest rates NOTE. The data are quarterly; change is for four quarters. In 1998, large in 2001 and 2002 (chart 14). In addition, ratings banks were those with assets of more than $15 billion; since 1999, large banks have been those with assets of more than $20 billion. Net percentage is agencies and investors reportedly pressured some the percentage of banks reporting stronger demand because of increased large corporations to strengthen their balance sheets M&A financing needs less the percentage reporting weaker demand because of reduced M&A financing needs. by reducing their reliance on short-term debt. The SOURCES. Federal Reserve Board, Senior Loan Officer Opinion Survey on restructuring of firms' balance sheets is reflected in Bank Lending Practices; Securities Data Company. the sharp drop in the ratio of short-term debt to total Similarly, the sharp inventory runoff since early 2001 debt outstanding from almost 40 percent in 1999 to is closely correlated with the net percentage of survey about 30 percent in the second quarter of 2003 respondents that reported a reduction in inventory- (chart 15). related financing needs (chart 10). On average, about half the largest banks on the survey panel—the insti- 5. In assigning a credit rating to an issuer of commercial paper, public rating agencies take into account the borrower's general credit tutions most likely to fund large M&A deals— quality as well as the borrower's ability to obtain from a financial indicated that their customers' needs for this type institution a line of credit that can be used to retire maturing paper in of financing had decreased over the past three years the event that it cannot be rolled over. Firms have a strong incentive to issue highly rated commercial paper because money market mutual (chart 11). These responses correspond reasonably funds—the primary holders of these securities—can hold only a well with movements in retired equity of domes- limited amount of lower-rated commercial paper. tic nonfinancial corporations—a proxy for M&A 13. Change in the amount of real unused business 12. Major components of net business credit lines at U.S. commercial banks, financing, 1992-2003 1991 :Q2-2003:Q3 Billions of dollars I I I I I I I I I 1 I I I 1993 1995 1997 1999 2001 2003 NOTE. Beginning in 2000, the data are semi-annual and are at seasonally NOTE. The data are quarterly and are deflated by the price deflator for adjusted annual rates. The data for 2003:H2 are projected from data through business-sector output (1996 = 100); change is for four quarters. October. SOURCE. Call Report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

482 Federal Reserve Bulletin • December 2003 14. Corporate bond yields, by rating, 1989-2003 August 2002 BLPS, one-fourth of banks with assets of less than $20 billion—institutions that in recent Percent years have experienced particularly strong growth in commercial real estate lending—reported that the volume of their commercial real estate loans that were used for commercial and industrial purposes (rather than the acquisition or improvement of real estate) had increased over the previous year. A small net percentage of those banks reported in the October 2003 BLPS that they had continued to experience an increase in demand for commercial real estate loans for which the proceeds were earmarked for commercial and industrial purposes. 2 1989 1991 1993 1995 1997 1999 2001 2003 NOTE. The data are monthly averages through October 2003. The AA and FACTORS AFFECTING THE SUPPLY BBB rates are calculated from bonds in the Merrill Lynch AA index and OF C&I LOANS BBB index, respectively, with seven to ten years of maturity remaining. The high-yield rate is the yield on the Merrill Lynch 175 high-yield index. The recent runoff in C&I loans appears to be related Commercial real estate lending may also have not only to weaker demand but also to tighter loan helped reduce demand for C&I loans. Over the past supply conditions. The effects from tighter supply, several years, nonresidential construction activity has however, do not seem to be as significant as they decelerated significantly, office vacancy rates have were in the early 1990s. Many large commercial increased, and commercial rents have declined. banks entered the previous decade with low levels of Nonetheless, this type of lending has been surpris- equity capital, partly because of considerable losses ingly well maintained during the recent cycle, and stemming from the Latin American debt crisis of the delinquency and charge-off rates on commercial real mid-1980s. The collapse of the commercial real estate estate loans have risen only moderately from very market in the early 1990s also impaired banks' profitlow levels. The continued growth of commercial real ability and further eroded their capital bases. At the estate loans may be due to efforts by some firms to same time, commercial banks were coming under lock in low long-term interest rates by substituting significant pressure from bank regulators and invesfixed-rate loans backed by real estate for traditional tors to rebuild their capital, pressure that was intensibusiness loans, which typically have shorter maturi- fied by the adoption of the Basel standards for riskties and carry floating rates. Indeed, according to the based capital. Because commercial banks are not required to hold risk-based capital against U.S. Trea- 15. Ratio of short-term debt to total credit-market debt sury securities, the attractiveness of these investfor nonfarm nonfinancial corporations, 1988-2003:Q2 ments rose relative to that of loans. Under these circumstances, commercial banks became increas- Percent ingly reluctant to lend to households or businesses. The inhospitable business-borrowing environment of the early 1990s is reflected in the significant net percentages of BLPS respondents that reported a tightening of lending standards in surveys conducted during that period (chart 16). The period was also marked by weak demand for credit, as households and businesses moved to strengthen their own balance sheets after heavy borrowing during the late 1980s. As the economy recovered from the 1990-91 recession, borrowers and banks rebuilt their balance J I I I 1 J I I I LJ L I I I I 1 sheets, and commercial banks expanded their lend- 1989 1991 1993 1995 1997 1999 2001 2003 ing. The industry's asset quality and profitability NOTE. The data are annual through 2002; for 2003, they are estimates improved, lifting banks' regulatory capital ratios based on data from 2003:Q2. SOURCE. Federal Reserve Board, Statistical Release Z.l, "Flow of Funds significantly above regulatory minimums. Partly Accounts of the United States," table L.102 (www.federalreserve.gov/ because of the brighter economic outlook, higher releases/zl). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in Business Lending by Commercial Banks 483 16. Net percentage of banks that reported tightening Small Businesses conducted by the National Federastandards for C&I loans, by size of borrower, tion of Independent Business (chart 17). 1990:Q2-2003:Q4 Market commentary, as well as narrow credit spreads on corporate debt instruments, also suggested that lending conditions had become very favorable for business borrowers, especially as the economy began to accelerate over the latter half of the 1990s. By the middle of 1998, bank supervisors and examiners had become increasingly concerned about banks' lending practices, as evidenced by statements from the Federal Reserve and other bank regulatory agencies. One statement urged banks to "continue to focus on the strength of the credit-risk management process, not only under favorable conditions, but also under stressful circumstances."6 The warnings of bank regulators took on a prophetic dimension in August 1998, when the Russian NOTE. The data are quarterly. Net percentage is the percentage of banks government announced a moratorium on servicing that reported a tightening of standards less the percentage that reported an official short-term debt and devalued the ruble. The easing. The definition for firm size suggested for, and generally used by, survey respondents is that large and middle-market firms have sales of more resulting shockwaves, exacerbated by difficulties at than $50 million. a prominent hedge fund, Long-Term Capital Man- SOURCE. Federal Reserve Board, Senior Loan Officer Opinion Survey on Bank Lending Practices. agement, led to turbulence in capital markets in the United States and elsewhere: Credit spreads balcapital levels, and better asset quality, commercial looned, and liquidity deteriorated. Although the U.S. banks by 1993 had begun easing their lending stan- economy remained strong and the Federal Open Mardards and accepting lower spreads on C&I loans and ket Committee eased monetary policy that fall in credit lines. Banks also reported easing nonprice three increments of 25 basis points each, commercial lending terms, such as loan covenants and collateral banks nevertheless seemed to respond by reassessrequirements, which are designed to protect banks ing the riskiness of their business lending. Abruptly if a borrower becomes impaired before the loan is reversing course, nearly half the respondents to the repaid. Over the same period, the net percentage of November 1998 BLPS indicated that they had tightsmall firms reporting that credit was harder to obtain ened business lending standards and terms over the declined considerably, according to the Survey of preceding three months, the highest net percentage that had reported doing so since early 1991. In 17. Net percentage of small businesses that reported addition, banks disproportionately imposed moremore difficulty in obtaining credit, 1988-2003:Q3 stringent commercial lending standards on large and middle-market borrowers, which they had apparently started to perceive as riskier credits. Although the net proportion of banks that reported tightening lending standards declined markedly in subsequent surveys, it remained positive, and other indicators also continued to suggest that the easy lending environment of the mid-1990s had come to an end. In late 1998, spreads on originations of new C&I loans—measured relative to estimated bank funding costs—increased significantly, as reported in the Federal Reserve's quarterly Survey of Terms of Business Lending (STBL) (chart 18). The wider spreads evident in the STBL were mirrored in a substantial jump of spreads and fees on syndicated NOTE. The net percentage is defined as the number of borrowers that reported more difficulty in obtaining credit less the number that reported 6. The Federal Reserve's Division of Banking Supervision and more ease in obtaining credit as a fraction of borrowers who sought credit during the previous three months. Regulation sent to the banks that it supervises a letter on lend- SOURCE. National Federation of Independent Business, Survey of Small ing standards for commercial loans. See letter SR 98-18, Businesses. www.federalreserve.gov/boarddocs/SRLETTERS/1998/SR9818.htm. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

484 Federal Reserve Bulletin • December 2003 18. Spread on C&I loans at domestic banks, 1997-2003:Q3 20. Delinquency and net charge-off rates on C&I loans at banks, by size of bank, 1988-2003:Q3 Basis points 240 Delinqu — 220 — 200 — 180 — 160 — 140 — 120 _L_J NOTE. Spread is the difference between the loan rate and the bank's funding cost, represented by a eurodollar or swap interest rate of comparable maturity. Net SOURCE. Federal Reserve Board, Survey of Terms of Business Lending. -2.5 loans, particularly for weak-investment-grade and —2.0 below-investment-grade borrowers, according to data collected by the Loan Pricing Corporation (LPC) (chart 19). Pricing of business loans and corporate bonds continued to hover in the new, elevated range Other even after the stock market resumed its upward — .5 + march, the liquidity of the bond market improved, — 0 and the U.S. economy continued to perform as well as it had in decades. Despite the tighter lending standards that banks put in place in late 1998 and the strong economic growth NOTE. The data are quarterly and seasonally adjusted. Delinquent loans are loans that are not accruing interest and those that are accruing interest but are during 1999 and the first half of 2000, the delin- more than thirty days past due. The delinquency rate is the end-of-period quency rate on C&I loans at large banks trended level of delinquent loans divided by the end-of-period level of outstanding loans. The net charge-off rate is the annualized amount of charge-offs over higher (chart 20). According to the January 2000 the period, net of recoveries, divided by the average level of outstanding BLPS, the deterioration in business loan quality since loans over the period. SOURCE. Call Reports. 19. All-in drawn spreads on syndicated loans of maturity greater than one year, by rating of borrower, 1998-2003 1998 was due partly to the reversion of delinquency Basis points Basis points rates to a more-normal long-run level and to problems that had developed in some industries, particu- B larly health care. But as the long bull market in stocks 125 — — 450 came to an end in spring 2000 and the economy began to show signs of slowing in the fall, delinquen- 100 — 400 cies and charge-offs on C&I loans at commercial banks accelerated. In light of this further deteriora- 75 — tion in asset quality, the November 2000 BLPS asked ^ — 350 / V BBB 50 — rj banks about the extent to which the rise in delinquencies on C&I loans had been in line with their expecta- — 300 25 — J tions. Although the smaller banks indicated that they had largely anticipated the gradual increase in delin- 1 1 1 1 1 1 I 1 quency rates, a significant net percentage of larger 1998 1999 2000 2001 2002 2003 banks on the survey panel reported that they were NOTE. Data are monthly through October 2003. All-in drawn spreads reflect the amount a lender will earn on a facility, considering all fees (except surprised by how much the quality of their C&I loan usage fees) and the libor spread, assuming the entire credit facility is drawn portfolios had deteriorated over the previous two down. SOURCE. Loan Pricing Corporation. years. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in Business Lending by Commercial Banks 485 21. Net percentage of banks that reported higher (chart 21). Evidence from other data sources corrobopremiums on riskier loans, by size of borrower, rated these qualitative responses from the BLPS: The 1998: Q4-2003: Q4 spreads on loans in the riskier categories in the STBL increased steadily during 2001 and the first half of Percent 2002, and they increased to a much greater extent than did the spreads on loans rated as having "low" or "minimal" risk (chart 22). The terrorist attacks of September 11, 2001, dramatically raised the overall level of economic uncertainty. Corporate balance sheets had already deteriorated, and corporate profitability had declined sharply during the year, accelerating the pace of ratings downgrades and increasing defaults on corporate debt (chart 23). The collapse of Enron in early December 2001 and subsequent corporate accounting scandals cast doubt on the quality of auditing and corporate I I 1 I l l I 1 I I I 1 I I I I I 1 1 1 I I—J I 1998 1999 2000 2001 2002 2003 governance. And the possibility that more firms NOTE. The data are quarterly. Net percentage is the percentage of banks would be found to have engaged in questionable eporting higher premiums less the percentage reporting lower premiums, accounting practices exacerbated the general sense of rhe definition for firm size suggested for, and generally used by, survey respondents is that large and middle-market firms have sales of more than $50 million. 23. Indicators of the credit quality of nonfinancial SOURCE. Federal Reserve Board, Senior Loan Officer Opinion Survey on Bank Lending Practices. corporations, 1990-2003:Q3 Responding to the worsening economic outlook Percent and the deterioration in their asset quality, large net Default rate on outstanding bonds percentages of banks began reporting in late 2000 - A and in 2001 that they had further tightened lending standards and had imposed higher spreads and fees on C&I loans for borrowers of all sizes. According to the respondents, the shift to a more-stringent lending posture also resulted from a reduced appetite for risk at their institutions, and nearly all banks reported that they had raised premiums charged on riskier C&I loans, especially for large and middle-market firms 22. Spread on C&I loans at domestic banks, by risk category of loan, 1997-2003:Q3 Ratings changes of nonfinancial corporations Basis points — 300 — 40 1991 1993 1995 1997 1999 2001 2003 — 50 NOTE. The default rate js monthly and extends through October 2003. The i i i i i i LJ 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 1997 1998 1999 2000 2001 2002 2003 outstanding at the end of the calendar quarter immediately preceding the NOTE. Spread is the difference between the loan rate and the bank's six-month period. The data on ratings changes are at an annual rate; for 2003, funding cost, represented by a eurodollar or swap interest rate of comparable they are the annualized values of monthly data through October. Debt maturity. High-risk loans are those in risk categories acceptable and upgrades and downgrades are expressed as percentages of the par values of classified. all bonds outstanding. SOURCE. Federal Reserve Board, Survey of Terms of Business Lending. SOURCE. Moody's Investors Service. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

486 Federal Reserve Bulletin • December 2003 uncertainty, especially for large business borrowers. for commercial paper carry the possibility that a However, small companies with straightforward busi- bank will end up as the "lender of last resort" for a ness models were less likely to have used ques- company shut out of the commercial paper market tionable accounting practices, and the NFTB's Survey because of a rapid deterioration in its own creditof Small Businesses showed little evidence that worthiness. To safeguard against such an occurrence, small firms were facing significantly tighter credit credit lines usually include covenants that, in theory, conditions. are designed to prevent a drawdown by a company With the uncertain economic climate and corporate that is experiencing financial distress. This possibility governance concerns, the net percentage of banks was generally considered remote, especially because, that reported tightening lending standards and terms before the past few years, issuers on the upper rungs in the BLPS remained elevated through the first half of the investment-grade ladder had rarely succumbed of 2002. In addition, responses to a question in the to sudden default. October 2001 BLPS indicated that almost one-half of Believing that commercial paper backup lines of banks had lowered their internal ratings on at least credit were unlikely to be drawn down and that, even 5 percent of their rated C&I loans over the previous if drawn, they were unlikely to result in a loss, many three months, and several banks had downgraded large banks reportedly offered backup lines to some more than 20 percent of these loans. These reported borrowers at very favorable terms. The first of these downgrades showed up in the STBL as banks beliefs was challenged amid the financial market assigned higher risk ratings to larger shares of newly turmoil in the early fall of 1998, when interest rate originated loans: The share of STBL loans rated as spreads in the commercial paper markets rose subhigh risk rose from about 30 percent in 2001 to stantially. Rather than issuing commercial paper in almost 50 percent in the first quarter of 2003 those circumstances, a few companies turned to their (chart 24). banks and drew down their revolving credit lines, As with outstanding business loans, commercial which at the time offered significantly more-attractive banks have also moved to limit their exposure to terms than those available in the commercial paper committed lines of credit since the middle of 1998. market. Because of these unanticipated draws, banks A large portion of these loan commitments have reduced the size and increased the costs of the lines traditionally been extended to large, investment-grade that they were offering to their large business customcorporate borrowers to support their commercial ers and reassessed the conditions under which the paper programs in the event of a temporary disrup- funds could be drawn (chart 25). tion in the market for commercial paper. Accord- The spate of defaults by highly rated corporate ingly, banks typically viewed the lines as unlikely to borrowers during the recent economic slowdown be drawn down for purposes other than weathering a raised questions about banks' second assumption general liquidity squeeze. Nevertheless, backup lines regarding the likelihood and size of potential losses in investment-grade lending.7 Indeed, even at the 24. Distribution of C&I loan volume at domestic banks, time of the May 2001 BLPS, large percentages of by risk category of loan, 1998-2003:Q3 banks reportedly had tightened their lending standards over the previous year on commercial paper backup lines, especially for firms with weaker com- • High mercial paper credit ratings. More than half the • Moderate respondents indicated that they had begun charging • Minimal and low higher up-front fees on backup lines and that they had increased the spreads that firms would pay if the lines were drawn. In addition, three-fourths of the domestic banks reported that commercial paper backup lines were unprofitable on a standalone basis but that firms used the bank to provide other services—such as cash management—that made the overall relation- 7. For example, WorldCom drew down about $2.5 billion in bank 1998 1999 2000 2001 2002 2003 lines just before revealing in June 2002 that it had substantially overstated its earnings; the company filed for bankruptcy the next NOTE. The data are annual for 1998-2001 and quarterly for 2002-2003:Q3. High-risk loans are those in risk categories acceptable and month. Banks holding these lines, however, invoked covenants in the classified. loan agreements that prevented WorldCom from drawing down the SOURCE. Federal Reserve Board, Survey of Terms of Business Lending. remainder of its reported $8 billion in credit lines. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in Business Lending by Commercial Banks 487 25. Net percentage of banks that reported tightening STRUCTURAL DEVELOPMENTS IN THE MARKET selected terms on credit lines, by size of borrower, FOR C&I LOANS 1996: Q2-2003: Q4 Over the past decade, commercial banks have seen a number of changes in the structure of the market for C&I loans, and these changes have significantly affected the dynamics of demand and supply at large banks. The rapid growth of the syndicated loan market, the effects of consolidation in the banking industry, and the growing attractiveness of loan assets to institutional investors have boosted the participation of nonbank financial institutions in the market for bank loans. These trends have spawned a relatively active secondary market, in which pieces of large syndicated loans are traded at market prices. The resulting availability of informative secondary prices on an increasing number of large loans has allowed commercial banks to manage their credit risk more effectively and to price new credit extensions more efficiently. The development of credit derivatives, although used primarily by just a few of the largest banks, has given bankers another tool to manage the riskiness of their loan portfolios. With better management information systems, banking organizations have improved their ability to evaluate and quantify their risk-adjusted returns on capital for various products. Unlike backup lines of credit, typical drawn business loans are profitable in themselves, but spreads on larger syndicated loans, 1996 1997 1998 1999 2000 2001 2002 2003 especially those to investment-grade firms, tend to be NOTE. See notes to chart 16. quite narrow. Banks are willing to participate in these credit arrangements in part because by doing so they ship profitable for the bank. Banks also noted that are more likely to establish a broader relationship they had moved to limit their risk by reducing the with the borrower, which could allow them to sell size of the loan commitments they were willing to additional fee-based services to the customer. Moreoffer, especially for lower-rated issuers of commer- over, banks earn substantial fees for arranging and cial paper. Not surprisingly, respondents indicated servicing these varied credit facilities for large borthat they had tightened standards and terms on credit rowers. In essence, these banks are moving away lines because they were increasingly concerned about from their previous "lend and hold" business practhe possible deterioration in the credit quality of tices toward a fee-oriented "originate and distribute" issuers and because they perceived a higher probabil- business model. ity that the lines would be drawn.8 Syndicated Loan Market 8. Over the past two years, asset-backed commercial paper (ABCP) issued by ABCP conduits administered by domestic commercial banks declined, after increasing in 2000 and 2001. The decline in ABCP In a syndicated loan, an arranger—almost exclusively conduits may have reflected not only reduced issuance of ABCP a large financial institution or a small group of large because of borrowers' preference for longer-term debt but also banks' institutions—acts like a bond underwriter by solicituncertainty about the accounting treatment of securitized assets. On January 17, 2003, the Financial Accounting Standards Board released ing a wide consortium of commercial banks and Interpretation 46, "Consolidation of Variable Interest Entities" institutional investors such as investment banks, (FIN 46), a rule that stipulates the accounting treatment for certain insurance companies, pension funds, and mutual structured finance vehicles, including ABCP conduits. FIN 46 raised the possibility that commercial banks would have to consolidate on their balance sheets the assets and liabilities of the ABCP conduits financial statements covering periods ending after December 15,2003, that they sponsored, an action that would require banks to set aside and banks are reportedly continuing to explore ways to avoid consoliadditional regulatory capital. FIN 46 is now slated for adoption for dation of their ABCP conduits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

488 Federal Reserve Bulletin • December 2003 funds to hold portions of the loan for a large corpo- LPC, over the past decade, investment-grade comparate borrower. This type of lending differs from a nies have accounted for an average of about twotraditional business loan model, in which a commer- thirds of gross issuance in the syndicated loan marcial bank originates the loan and keeps the entire loan ket.10 The share of gross issuance accounted for by on its books until maturity. Although the arranger(s) below-investment-grade firms, however, increased of a syndicated loan usually have a broad relationship somewhat over the past two years, partly reflecting with the borrower, as is the case in the traditional the greater refinancing by such firms and an increased lending model, many of the financial institutions in desire to hold these types of assets by nonbanks. the syndicate are typically not relationship lenders. Investment banks are also major participants in These financial institutions do not benefit from ancil- the syndicated loan market. During the evolution of lary business, and as a result, they are especially the market for business loans, customer demand for sensitive to the pricing and risk characteristics of the one-stop shopping and the entry of commercial bank loan itself. Their sensitivity, in turn, has reinforced affiliates into investment banking using section 20 banks' attempts to increase fees and spreads on large subsidiaries blurred many of the distinctions between business loans. investment banking and commercial banking.11 The According to the results of the Shared National Gramm-Leach-Bliley Act formally acknowledged Credit Survey (SNC), the volume of total commit- these market developments and further reduced or ments (the sum of outstanding loans and unused loan eliminated some restrictions on the capital market commitments) in the U.S. syndicated loan market activities of commercial bank affiliates. This deregugrew in real terms from about $900 billion in the lation, in turn, led investment banks to step up the early 1990s to almost $2 trillion at its peak in 2001; underwriting of syndicated loans so that they could the real volume of outstanding loans also roughly also offer a full range of financing options to their doubled over the same period (chart 26).9 In the corporate customers. However, investment banks' August 2000 BLPS, most banks with assets of more relatively smaller balance sheets, higher funding than $20 billion indicated that syndicated loans com- costs, and different traditional business models make posed a substantial percentage of their total C&I these institutions more reluctant than banks to retain loans outstanding, and seven banks indicated that the the loans that they underwrite, especially if the loans portion was greater than 50 percent. According to the by themselves are not profitable enough to meet the internal hurdle rates of investment banks. Investment banks are particularly averse to holding revolving 9. Each year, the Board of Governors of the Federal Reserve lines of credit, which can result in large, unexpected System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency conduct the Shared National Credit demands for funds that the investment bank must Survey, in which they collect data on the credit quality and other finance on short notice. Partly to mitigate these probcharacteristics of all C&I loans and loan commitments of more than lems and partly to compete better in the syndicated $20 million that are held by three or more supervised financial institutions. loan market, a few investment banks have acquired depository institutions or established them within 26. Real value of total commitments and debt their holding company structure. outstanding on syndicated loans. 1989-2003 Many other financial institutions—including insurance companies, prime rate funds, and pension funds—have reportedly participated in the syndicated loan market for more than a decade. More recently, the market is said to have piqued the interest of high-yield mutual funds and hedge funds. These institutional participants tend to be interested in term loans or facilities with high utilization, and they do 10. Gross issuance is defined as the sum of new loans and credit lines, increases in the size of existing credit agreements, and the refinancing of existing credit facilities. The LPC only recently began reporting net issuance—new loans and increases in existing credit facilities—separately from refinanced credits. 11. In April 1987, the Board of Governors of the Federal Reserve System reinterpreted section 20 of the Glass-Steagall Act, allowing NOTE. Commitments are outstanding debt plus unused commitments. The bank holding companies to establish subsidiaries to conduct certain data are deflated by the price deflator for business-sector output (1996 = 100). bank-ineligible investment banking activities, such as underwriting of SOURCE. Shared National Credit Survey (see text note 9). corporate bonds and equities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in Business Lending by Commercial Banks 489 not deal in ancillary businesses that investment and 1. Share of holdings of syndicated and adversely rated commercial banks may pursue through a relationship loan commitments, by type of lender, 2001-2003 with a borrower (for example, cash management and Percent bond underwriting). As a result, they are most likely Loan commitment and holder 2001 2002 2003 to purchase only drawn loans that they view as fully Total syndicated loan priced to reflect the riskiness of the borrower, and commitments they also prefer loans with longer maturities. Because U.S. banks 46 45 45 Foreign banking organizations 46 45 44 these characteristics are attached more often to Nonbanks1 10 11 below-investment-grade loans than to the lines of Own loan commitments that c re credit for investment-grade firms, institutional inves- adversely rated2 ' t"1 rVaH All institutions 5.7 8.4 9.3 tors hold a substantial share of riskier syndicated U.S. banks 5.1 6.4 5.8 Foreign banking organizatii 4.7 7.3 9.0 loans. Nonbanks' 14.6 23.0 24.4 Other important pieces of the institutional loan 1. Nonbanks include independent investment brokerages, investment vehimarket are special-purpose investment vehicles that cles, and other institutional investors. 2. These loan commitments are classified as "substandard," "doubtful," or purchase and hold loans (collateralized loan obliga- "loss." Substandard loans are characterized by the distinct possibility that the tions, or CLOs) or, more generally, loans in combina- bank will sustain some loss if the deficiencies are not corrected. An asset classified as doubtful has all the weaknesses inherent in one classified as substandard tion with other debt instruments (collateralized debt with the added characteristic that the weaknesses make the collection or liquiobligations, or CDOs). Most CLOs and CDOs are not dation in full highly questionable and improbable. Assets classified as loss are considered uncollectible and of such little value that their continuance as bankactively managed, partly because accounting convenable assets is not warranted, even though partial recovery may be effected in the tions make it more likely that actively managed struc- future. SOURCE. Shared National Credit Survey. tures will need to be consolidated onto the balance sheet of the sponsoring institution. CLOs and CDOs fund their investments primarily by issuing debt the October 2003 BLPS suggest that a substantial instruments, which are structured to match the inves- part of the increase in adversely rated credits at tors' risk-and-return profiles through a process called nonbanks may reflect purchases of distressed loans tranching.12 Financial institutions sponsor these vehi- from commercial banks. The most-often-cited reacles to profit from the fees earned for providing these sons that survey respondents gave for selling their products to their investment customers. Major com- adversely rated loans were to trim the overall credit mercial banks have also used CLOs to move dis- risk of their C&I loan portfolios and to reduce expotressed or otherwise unwanted loans off their balance sure to particular firms. sheets. The decline in the volume of C&I loans at commercial banks has been partly offset by increased Secondary Loan Market holdings of such loans by nonbanks, which the SNC defines as independent investment brokerages, invest- The growth of the syndicated loan market and the ment vehicles (such as CLOs), and other institutional increased participation of institutional investors investors. The SNC data show that the share of total helped spur the development of a secondary market syndicated loan commitments held by nonbanks has for trading pieces of syndicated loans. The real volincreased from 8 percent in 2001 to 11 percent in ume of loan trading in the secondary market has 2003 (table 1). Moreover, a significant and growing increased fairly steadily during the past decade, from portion of the holdings of nonbanks is made up of less than $20 billion a year in the early 1990s to more adversely rated credits, which increased to almost than $100 billion in recent years (chart 27). Trading one-fourth of their total commitments in 2003. Non- is most active in the below-investment-grade segbanks apparently stepped up the acquisition of ment of the market, according to data from the LPC, adversely rated credits because these loans have a and an increased percentage of the recent activity has relatively attractive yield-risk tradeoff and their been in distressed assets. The higher trading volumes workout can often be quite profitable. Responses to have made pricing somewhat more transparent for many of the largest and most-liquid loans, for which the industry has taken steps to determine and publish 12. The highest tranche pays investors the smallest return but has timely market quotes. Nonetheless, liquidity in the the least risk by virtue of having first claim on the cash flows generated by the underlying assets in the CLO or CDO. The middle secondary market for C&I loans is reportedly hamtranches pay somewhat higher rates of return in exchange for inves- pered by the assignment fees that banks charge loan tors' willingness to bear more risk. Investors in the lowest tranche are investors to cover the cost of transferring ownership paid only after all the higher tranches have been paid in full, thus exposing them to the first losses in the portfolio. in the pieces of loans that are traded. In addition, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

490 Federal Reserve Bulletin • December 2003 27. Real value of loans traded in the U.S. Credit Derivatives secondary market, 1991-2003:H1 Some of the largest commercial banks are increasingly using credit derivatives to help manage the riskiness of their business loan portfolios. In one of the most common forms of credit derivative—the credit default swap (CDS)—the beneficiary, an investor that will receive a payment if the issuer defaults or experiences another pre-specified adverse outcome, contracts with a guarantor, a financial institution that will pay the losses in that event.13 In return, the beneficiary pays the guarantor a fee equal to a specified number of basis points times the amount of credit protection that it wishes to purchase. The amount charged by the guarantor for the contract is 1991 1993 1995 1997 1999 2001 2003 based, of course, on the likelihood that the firm in NOTE. The data are deflated by the price deflator for business-sector output question will experience a specified adverse credit (1996= 100). event and on the expected value of the underlying SOURCE. Loan Pricing Corporation. debt instrument in such circumstances. The value of credit derivatives purchased and sold market participants note that the documentation by commercial banks has increased rapidly over the required to trade loans is substantial, and thus the past decade (chart 28). However, the overall number settlement period for loan trades is considerably of banks that transact in credit derivatives is quite longer than that for bond or equity trades. small: As of the third quarter of 2003, the ten The increased depth of the secondary loan market largest banks held 97 percent of the total credit and the availability of representative price quotes derivatives for which banks act as guarantors and have apparently allowed banks to manage their C&I 94 percent of the total credit derivatives for which loan portfolios more actively. Indeed, during the most banks are the beneficiaries. A few of the largest recent downturn, a significant number of banks sold banks also act as dealers in the market for credit distressed loans into the secondary market, a move derivatives and therefore hold substantial percentthat allowed them to accelerate charge-offs and ages of both the industry's beneficiary positions and thereby reduce delinquencies, as well as to reduce the its guarantor positions. Since 1997, when data on riskiness of the loans on their books. The existence of banks' holdings of credit derivatives first became representative market quotes on the prices of loans is available in the quarterly Reports of Condition and also important for institutional participants, many of Income (Call Reports), the U.S. banking sector has which mark their portfolios to market more regularly generally maintained a small net beneficiary position than do commercial banks to follow either market in credit derivatives. However, banks' position as a net beneficiary increased considerably in the first half convention or regulatory requirements. of 2003, perhaps because of a greater use of these The increased liquidity in the secondary loan marinstruments to hedge exposure in their C&I loan ket has reportedly led to some convergence in bond portfolios. and loan spreads, especially in the leveraged segment of the market. In the August 2002 BLPS, a significant Like corporate bonds and syndicated loans, CDSs percentage of larger banks indicated that they consid- are actively traded. Increasingly, loan investors are ered bond market prices to be helpful for monitor- presented with opportunities for arbitrage when the ing the credit quality of their business customers. In spreads among these three markets diverge. For addition, the pricing for many lines of credit is based example, if the CDS for a particular firm is yielding a on ratings grids, a practice that implies that the firm higher return than is a loan to the same firm, a bank pays a higher spread on its draws if its credit rating is downgraded and a lower spread if its credit rating is 13. The treatment of restructuring, in which a firm does not techniupgraded. Most recently, a few syndicated revolving cally default but rather changes the terms on its debt instruments, has credit lines have reportedly incorporated bond-linked presented problems during the development of the CDS market. The pricing, in which the spread charged on a draw from International Swaps and Derivatives Association has issued three sets of guidelines to clarify the way in which guarantors and beneficiaries the credit line is determined by the prevailing spread should treat restructuring, and it continues to work toward a standard on the company's bonds at the time of the draw. definition. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in Business Lending by Commercial Banks 491 28. Value of credit derivatives held by banks as guarantors Industry Consolidation and as beneficiaries, 1997-2003:Q3 Since the passage in 1994 of the Riegle-Neal Act, Billions of dollars which phased out many of the barriers to interstate • Notional amount held as guarantor branching by commercial banks, consolidation has — 400 • Notional amount held as beneficiary accelerated. The 100 largest banks now hold almost — 350 75 percent of total banking assets and 77 percent of outstanding C&I loans, up from 56 percent and — 250 66 percent, respectively, in 1994 (chart 29). Similarly, the ten largest commercial banks hold 43 per- — 200 cent of total banking assets and 47 percent of out- — 150 standing C&I loans, compared with 25 percent and — 100 28 percent, respectively, in 1994. These increases in industry concentration may be somewhat overstated • i r| J_J because of mergers that have occurred among banks Percent that were already within the same holding company; even so, a substantial number of mergers among the Share of credit derivatives held by ten largest banks largest holding companies have occurred over the same period. 100 One effect of consolidation on the C&I loan market is that it has left fewer commercial banks to participate in the syndication process. Reportedly, a merged 95 bank tends to offer smaller loans and credit lines in m 90 29. Concentration in the banking industry among the 10 largest and 100 largest banks, 1988-2003 :Q3 1997 1998 1999 2000 2001 2002 2003 Percent NOTE. Percentages are plotted at a quarterly frequency. Share of total industry assets SOURCE. Call Reports. — 90 — 80 — ^—" ' " — 70 that wishes to obtain credit exposure to that firm can SSllWW)) llaarrggeesstt choose to act as the guarantor on a CDS for the firm's — 60 bonds rather than making the loan. The increasing — — 50 10 largest use of CDSs in managing risk may have also resulted — - 40 in a greater willingness of banks to make loans to — — 30 companies for which they can purchase credit protec- —^ — 20 tion in the CDS market. — — 10 The January 2003 BLPS asked banks why they 1 1 1 I 1 1 1 1 1 1 1 1 1 1 I 1 1 11 used CDSs and how their participation in that market had affected the total amount of C&I loans that they Share of total outstanding C&I loans in banking industry —— 9900 made. The reasons most often cited by banks for — 80 selling CDS protection were that it was occasionally — — — s"^ 100 largest — 70 more profitable than direct lending and that it helped them diversify credit risk. Banks that had purchased — — 60 credit derivatives to protect against loan losses over- — 10 largest — 50 ' m S*/ whelmingly reported that they preferred buying credit y -J^ — 40 protection to selling a loan in the secondary market — 30 because the purchase of the CDS did not affect their — — 20 relationship with the borrower. On net, banks — 10 reported that the development of the CDS market had 1 1 1 ! 1 1 I 1 a small positive effect on their supply of business 1989 1991 1993 1995 1997 1999 2001 2003 loans. SOURCE. Call Reports. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

492 Federal Reserve Bulletin • December 2003 the syndicated loan market than the combined amount the sharp contraction in C&I loans during that period that the two predecessor banks had offered before the was reduced demand from creditworthy borrowers. merger. As a result, market participants have argued The second-most-important factor was that the detethat consolidation has reduced the capacity of the rioration in business credit quality had reduced the syndicated loan market to meet the credit demands of number of firms that banks viewed as creditworthy. some large corporate borrowers. On the other hand, Banks rated the incremental effect of their own efforts the increased number of institutional participants in to tighten lending standards as only the third-mostthat market should have at least partially offset such a important factor and stated that increases in spreads decline in lending capacity. and fees on business loans had the least effect on business loan flows. In the opinion of the banks responding to the BLPS, then, the decline in business CONCLUSION loans was clearly related more to reduced demand than to restrictions in supply. Despite the appreciable deterioration in asset quality Nonetheless, supply effects appear to have played and the reduced demand for credit by business boran important role. Staff research suggests that the rowers over the past several years, commercial banks large banks on the survey panel that most often have remained highly profitable and well capitalized. reported tightening credit standards from 1999 to the In contrast to the 1990-91 period, when large losses end of 2001 experienced the largest contraction in held down banks' earnings and eroded their capital, business lending whereas banks that reported tightenduring the recent recession banks were well posiing in only a few quarters or not at all had a smaller tioned to lend to creditworthy business customers decline in outstanding C&I loans and credit lines.14 willing to pay the higher loan fees and lending Asked why they had tightened lending standards, spreads that banks have increasingly demanded as however, respondents to the BLPS often mentioned part of their improved risk management. The ecoindustry-specific problems and the resulting decline nomic slowdown and the tightening of credit stanin the creditworthiness of firms in those industries. dards, however, sharply reduced the number of That the industries hit hardest by the economic creditworthy firms. Meanwhile, the customers that slowdown and other events at the beginning of remained creditworthy generally had less need for this decade—telecommunications and airlines, for external funds. example—traditionally borrowed from large banks To help determine the relative importance of the may have magnified the declines in C&I loans at various supply and demand factors contributing to those banks. • the runoff in C&I loans, the October 2002 BLPS asked banks to rank several possible reasons for the decline in business loans during the first nine months 14. See William F. Bassett and Mark Carlson, "Profits and Balance of that year. More than three-fourths of the respon- Sheet Developments at U.S. Commercial Banks in 2001," Federal dents indicated that the most important factor behind Reserve Bulletin, vol. 88 (June 2002), pp. 259-88. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

493 Announcements VICE CHAIRMAN FERGUSON AND GOVERNOR period confirms that spending is firming, and the BERNANKE TAKE OATHS OF OFFICE labor market appears to be stabilizing. Business pricing power and increases in core consumer prices Roger W. Ferguson, Jr., on October 28, 2003, took remain muted. the oath of office for a second four-year term as Vice The Committee perceives that the upside and Chairman of the Board of Governors of the Fed- downside risks to the attainment of sustainable eral Reserve System. The oath was administered, growth for the next few quarters are roughly equal. In in the presence of Vice Chairman Ferguson's wife, contrast, the probability, though minor, of an unwel- Annette L. Nazareth, by Chairman Alan Greenspan come fall in inflation exceeds that of a rise in inflain the Chairman's office. tion from its already low level. The Committee President Bush nominated Vice Chairman Fergu- judges that, on balance, the risk of inflation becoming son on September 10, 2003, and the Senate confirmed undesirably low remains the predominant concern for him on October 24, 2003. He originally took office the foreseeable future. In these circumstances, the on November 5, 1997, as a member of the Board to Committee believes that policy accommodation can fill an unexpired term. On July 26, 2001, he began a be maintained for a considerable period. new term on the Board that expires January 31, 2014. Voting for the FOMC monetary policy action were: His first term as Vice Chairman began October 5, Alan Greenspan, Chairman; Ben S. Bernanke; 1999. Susan S. Bies; J. Alfred Broaddus, Jr.; Roger W. Ferguson, Jr.; Edward M. Gramlich; Jack Guynn; Ben S. Bernanke, on November 14, 2003, took the Donald L. Kohn; Michael H. Moskow; Mark W. oath of office for a new term as a member of the Olson; Robert T. Parry; and Jamie B. Stewart, Jr. Board of Governors of the Federal Reserve System. The oath was administered by Chairman Alan Greenspan in the Chairman's office. Governor Bernanke's wife, Anna; daughter, Alyssa; and son, Joel, APPROVAL OF FEE SCHEDULES FOR FEDERAL were present. RESERVE BANK PRICED SERVICES President Bush announced his intention to nominate Governor Bernanke on September 9, 2003, and The Federal Reserve Board, on October 22, 2003, the Senate confirmed him on October 24, 2003. He approved fee schedules for Federal Reserve Bank originally took office on August 5, 2002, as a mem- priced services, effective January 2, 2004. ber of the Board to fill an unexpired term. The new From 1993 to 2002, the Reserve Banks recovered term begins February 1, 2004, and expires Janu- 98.8 percent of priced-services costs, including operary 31,2018. ating costs, imputed costs, and targeted return on equity (ROE, or net income), which amounts to a ten-year total net income of slightly less than $500 million. The Reserve Banks' underrecovery FEDERAL OPEN MARKET COMMITTEE reflects changes that are affecting the check service, STATEMENT which comprises about 85 percent of priced-services costs. Since the mid-1990s, there has been a national The Federal Open Market Committee decided on trend away from the use of checks that has affected October 28, 2003, to keep its target for the federal the entire industry. This trend, which is consistent funds rate at 1 percent. with the Federal Reserve's position of encouraging The Committee continues to believe that an accom- the use of more efficient electronic payment alternamodative stance of monetary policy, coupled with tives, has reduced the Reserve Banks' check volume. robust underlying growth in productivity, is provid- The Reserve Banks have undertaken aggressive ing important ongoing support to economic activity. initiatives to improve operational efficiencies, to The evidence accumulated over the intermeeting reduce their excess check processing capacity, and to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

494 Federal Reserve Bulletin • December 2003 reduce costs. First, the Reserve Banks will be com- APPROVAL OF MODIFIED METHOD FOR pleting a check modernization initiative later this IMPUTING PRICED-SERVICE INCOME year that will standardize the Reserve Banks' check processing operations. This initiative will enable the The Federal Reserve Board, on October 23, 2003, Reserve Banks to improve their operating efficiency announced modifications to the method for imputing and position them to reduce excess capacity. Second, priced-service income from clearing balance investthe Reserve Banks have begun a check restructuring ments. The Board approved these modifications at initiative that was announced earlier this year. Under an open meeting on October 22, 2003. The Federal this initiative, the Reserve Banks will continue to Reserve Banks impute this income when setting fees provide check services nationwide but will stop pro- and measuring actual priced-service cost recovery cessing checks at thirteen of their forty-five check each year. The Board requested comment on the processing offices, consolidate check adjustments changes in May 2003. operations into twelve of their forty-three check Clearing balances held at Reserve Banks are simiadjustment offices, and consolidate their check ad- lar to compensating balances held at correspondent ministrative functions. Third, the Reserve Banks have banks. Beginning in January 2004, Reserve Banks aggressively reduced costs in a variety of support and will impute the income from clearing balance investoverhead areas that contribute significant costs to the ments on the basis of a broader portfolio of investcheck service. ments than the three-month Treasury bills used today, Overall, the price level for Federal Reserve priced selected from instruments available to banks and services will increase about 4 percent in 2004 from subject to a risk-management framework that 2003 levels. The increase reflects an approximately includes criteria consistent with those used by bank 5 percent rise in check service fees combined with a holding companies and regulators in evaluating 1 percent drop in fees for the Reserve Banks' elec- investment risk. tronic payment services. The annual imputed investment return will be The 2004 fee schedule for each of the priced based on an underlying imputed investment portfolio, services, except the check service, is included in but will be implemented as a constant annual spread the attached Federal Register notice. Fee schedules over the three-month Treasury bill rate. for all priced services will be available on the Federal Reserve Banks' financial services web site at www.frbservices.org. JOINT AGENCIES ANNOUNCE PROPOSED The Board also approved, effective January 8, TREATMENT OF EXPECTED AND UNEXPECTED 2004, changing the earnings credit rate on clearing LOSSES UNDER THE NEW BASEL CAPITAL balances from the federal funds rate to 90 percent of ACCORD the three-month Treasury bill rate, and increasing the frequency with which depository institutions can The Federal Reserve Board and thrift agencies on change contracted clearing balances. October 30, 2003, issued a statement regarding the In addition, the Board approved the 2004 private- Basel Committee on Banking Supervision's request sector adjustment factor (PSAF) for Reserve Bank for comment on a modification to its proposed interpriced services of $179.7 million. The PSAF is an national capital standards. allowance for taxes and other imputed expenses that The modification deals with the treatment of would have to be paid and profits that would have to expected and unexpected losses. The Basel Commitbe earned if the Federal Reserve's priced services tee will accept comments from all interested parties were provided by a private business. The Monetary until December 31, 2003. Control Act of 1980 requires the Federal Reserve to recover the costs of providing priced services, including the PSAF, over the long run, to promote competi- RELEASE OF MINUTES OF BOARD'S DISCOUNT tion between the Reserve Banks and private-sector RATE MEETINGS service providers. The Reserve Banks estimate that they will recover The Federal Reserve Board, on November 6, 2003, 85.6 percent of all their priced services costs in 2003 released the minutes of its discount rate meetings and project that they will recover 93.6 percent of from September 2, 2003, through September 15, these costs in 2004. 2003. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 495 ENFORCEMENT ACTIONS • The promotions of Barbara J. Bouchard, Angela Desmond, James A. Embersit, Charles H. Holm, and The Federal Reserve Board, on November 4, 2003, William G. Spaniel to Deputy Associate Director; announced the issuance of a consent order of assess- and ment of a civil money penalty against the Gulf Bank, • The appointments of Jon D. Greenlee, Walt Miami, Florida, a state member bank. Gulf Bank, Miles, and William F. Treacy to Assistant Director. without admitting to any allegations, consented to the issuance of the order in connection with its alleged Stephen C. Schemering provides advice and guidviolations of the Board's Regulations implementing ance on the supervision operations of the division, the National Flood Insurance Act. which include risk management and supervision of The order requires Gulf Bank to pay a civil money large, complex banking organizations (both domestic penalty of $4,550, which will be remitted to the and foreign), and regional and community banking Federal Emergency Management Agency for deposit organizations. into the National Flood Mitigation Fund. Michael G. Martinson provides advice and guidance to the division by identifying and analyzing The Federal Reserve Board, on November 4, 2003, risks that affect the domestic and international bankannounced the execution of a written agreement by ing systems. and among the Bank of Gassaway, Gassaway, West Stephen M. Hoffman has responsibility for the Virginia; the West Virginia Division of Banking, supervisory operations of the division, which includes Charleston, West Virginia; and the Federal Reserve risk management and supervision of large, complex Bank of Richmond. banking organizations (both domestic and foreign), and regional and community banking organizations. Deborah R Bailey oversees and coordinates the FR STAFF CHANGES System's risk-focused supervision of domestic, large, and complex banking organizations. The Board of Governors has approved a restructuring Norah M. Barger is responsible for the developof the Division of Banking Supervision and Regula- ment of supervisory and risk-related regulations and tion. The principal objectives of the reorganization policies for the supervision of U.S. banks and bank are to: holding companies, foreign banks with operations in the United States, and for the international operations • enhance the division's ability to oversee major of U.S. banking organizations. supervisory risks (that is, credit, market and liquidity, Betsy Cross is responsible for the division's finanoperating and, or technological, and reputational) as cial institutions applications function. well as financial organizations risk management David M. Wright is responsible for the oversight of processes, market practices, risk exposures, and supervision of • establish a new section to strengthen the anti- credit risk associated with the activities of banking money laundering and Bank Secrecy Act examina- organizations. tion and enforcement programs, and Barbara J. Bouchard is responsible for the develop- • implement a national, coordinated approach to ment of supervisory and risk-related regulations and critical System supervisory technology initiatives. policies for financial institutions. Angela Desmond is Secretariat to the Large and As part of the reorganization, the Board is pleased Complex Banking Organizations Subcommittee and to announce the following officer actions and represents the division on Board and interagency appointments. projects, including homeland security and protection of the critical infrastructure. • The appointments of Steven C. Schemering and James A. Embersit is responsible for assessments Michael G. Martinson to Senior Adviser; of market and liquidity risks related to developments • The promotion of Stephen M. Hoffman to in the banking industry with attention to the capital Deputy Director; markets and government securities. • The promotions of Deborah R Bailey, Norah M. Charles H. Holm is responsible for the supervisory Barger, Betsy Cross, and David M. Wright to Associ- accounting, disclosure, and regulatory reporting funcate Director; tion of the division. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

496 Federal Reserve Bulletin • December 2003 William G. Spaniel is responsible for the System zations Section in 2000. Before joining the division, planning and evaluation, staff development, interna- Mr. Miles served as bank examiner for the Federal tional training and assistance, and division adminis- Deposit Insurance Corporation. He received the Spetration functions. cial Achievement Award in 2002 for his contributions to the large, complex, banking organizations supervisory program. Mr. Miles has a B.S. degree New Officers in finance from Oregon State University and is a Jon D. Greenlee is responsible for administering the chartered financial analyst and a certified public System's risk-focused supervision of regional domes- accountant. tic banking organizations. Mr. Greenlee joined the William F. Treacy is responsible for the devel- Board in March 2001 as the manager of the Regional opment and implementation of System supervisory Banking Organizations Section. Before joining the and examination policies and procedures, evaluating division, he was the Central Point of Contact (CPC) Board regulations, and the analyzing financial trends. for Wells Fargo and Company at the Federal Reserve Mr. Treacy joined the Board in 1992. He was also Bank of San Francisco. He holds a B.S. in finance an economist with the Federal Reserve Bank of and economics from Indiana State University. New York. Mr. Treacy holds a B.A. in economics and Walt Miles is responsible for the division's super- international relations from Cornell University, an visory program for large, complex banking organi- M.A. in economics and U.S. foreign policy from zations. Mr. Miles joined the Board in 1996. He was Johns Hopkins University School of Advanced Interpromoted to a senior supervisory financial analyst in national Studies, and a doctorate from George Washthe Domestic, Large, and Complex Banking Organi- ington University. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

497 Legal Developments FINAL RULE—AMENDMENT TO REGULATION D 1. The authority citation for Part 204 continues to read as follows: The Board of Governors of the Federal Reserve System (Board) is amending 12 C.F.R. Part 204, its Regulation D Authority: 12 U.S.C. 248(a), 248(c), 371a, 461, 601, 611, (Reserve Requirements of Depository Institutions), to and 3105. reflect the annual indexing of the low reserve tranche and of the reserve requirement exemption amount for 2004. 2. Section 204.9 is revised to read as follows: The Board is also announcing the annual indexing of the deposit cutoff level and the reduced reporting limit that Section 204.9—Reserve requirement ratios will be effective beginning in September 2004. The Regulation D amendments increase the amount of net transac- The following reserve requirement ratios are prescribed for tion accounts at each depository institution that are subject all depository institutions, banking Edge and agreement to a three percent reserve requirement in 2004 from corporations, and United States branches and agencies of $42.1 million to $45.4 million. This amount is known as foreign banks: the low reserve tranche. The Regulation D amendments also increase the amount of total reservable liabilities of Category Reserve Requirement each depository institution that are subject to a zero percent reserve requirement in 2004 from $6.0 million to $6.6 mil- Net transaction accounts: $0 to $6.6 million 00 ppeerrcceenntt ooff aammoouunntt.. lion. This amount is known as the reserve requirement Over $6.6 million and up to exemption amount. The adjustments to both of these $45.4 million 3 percent of amount. Over $45.4 million $1,164,000 plus 10 percent of amount amounts are derived using statutory formulas specified in over $45.4 million. the Federal Reserve Act. The Board is also announcing Nonpersonal time deposits 0 percent. Eurocurrency liabilities 0 percent. increases in two other amounts, the deposit cutoff level and the reduced reporting limit, that are used to determine the frequency with which depository institutions must submit deposit reports. The deposit cutoff level is being increased ORDERS ISSUED UNDER BANK HOLDING from $150.0 million in 2003 to $161.2 million in 2004, and COMPANY ACT the reduced reporting limit is being increased from $1.0 billion in 2003 to $1,074 billion in 2004. These amounts are indexed annually in order to reduce reporting burden for Orders Issued Under Section 3 of the Bank Holding smaller depository institutions. Thus, beginning in Septem- Company Act ber 2004, depository institutions will be required to file the FR 2900 report each week under the following conditions: Wells Fargo & Company if they have net transaction accounts over $6.6 million and San Francisco, California have total deposits of at least $161.2 million; or if they have net transaction accounts of $6.6 million or less but Order Approving the Acquisition of a Bank Holding have total deposits of at least $1,074 billion. Depository Company institutions will be required to file the FR 2900 report each quarter if they have net transaction accounts over $6.6 mil- Wells Fargo & Company ("Wells Fargo") has requested lion but have total deposits of less than $161.2 million. the Board's approval under section 3 of the Bank Holding Depository institutions will be required to file the FR 2910a Company Act ("BHC Act") (12 U.S.C. § 1842) to acquire report annually if they have net transaction accounts of all the voting shares of Pacific Northwest Bancorp $6.6 million or less but have total deposits greater than $6.6 million but less than $1,074 billion. Depository insti- ("Pacific Northwest") and thereby indirectly acquire tutions with $6.6 million or less in total deposits are not Pacific Northwest Bank ("PN Bank"), both in Seattle, required to file a deposit report. Washington. Notice of the proposal, affording interested persons an Effective November 6, 2003, 12 C.F.R. Part 204 is opportunity to submit comments, has been published amended as follows: (66 Federal Register 39,563 (2003)). The time for filing comments has expired, and the Board has considered the Part 204—Reserve Requirements of Depository proposal and all comments received in light of the factors Institutions (Regulation D) set forth in section 3 of the BHC Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

498 Federal Reserve Bulletin • December 2003 Wells Fargo, with total consolidated assets of approxi- all the facts of record, the Board is permitted to approve mately $363 billion, is the third largest commercial bank- the proposal under section 3(d) of the BHC Act. ing organization in the United States. Wells Fargo operates subsidiary depository institutions in Alaska, Arizona, Cali- Competitive Considerations fornia, Colorado, Idaho, Illinois, Iowa, Michigan, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Section 3 of the BHC Act prohibits the Board from approv- Dakota, Ohio, Oregon, South Dakota, Texas, Utah, Wash- ing a proposal that would result in a monopoly or would be ington, Wisconsin, and Wyoming. In Washington, Wells in furtherance of any attempt to monopolize the business of Fargo controls insured deposits of approximately $3 bil- banking in any relevant market. The BHC Act also prohiblion, representing approximately 4 percent of total deposits its the Board from approving a proposed bank acquisition of insured depository institutions in the state ("state depos- that would substantially lessen competition in any relevant its").1 In Oregon, Wells Fargo controls insured deposits of banking market unless the anticompetitive effects of the approximately $4 billion, representing approximately proposal are clearly outweighed in the public interest by 12 percent of state deposits. the probable effect of the proposal in meeting the convenience and needs of the community to be served.5 Pacific Northwest, with total consolidated assets of approximately $3.1 billion, is the 139th largest commercial Wells Fargo competes directly with Pacific Northwest in banking organization in the United States. Pacific North- eight banking markets in Washington and Oregon.6 The west also operates subsidiary depository institutions in Board has reviewed carefully the competitive effects of the Washington and Oregon. In Washington, Pacific Northwest proposal in each of these banking markets in light of all the controls insured deposits of approximately $1.8 billion, facts of record. In particular, the Board has considered the representing approximately 3 percent of state deposits. In number of competitors that would remain in the markets, Oregon, Pacific Northwest controls insured deposits of the relative shares of total deposits in depository instituapproximately $263 million, representing less than 1 per- tions in the markets ("market deposits") controlled by cent of state deposits. On consummation of this proposal, Wells Fargo and Pacific Northwest,7 the concentration level Wells Fargo would become the fourth largest commercial of market deposits and the increase in this level as meabanking organization in Washington, controlling deposits sured by the Herfindahl-Hirschman Index, ("HHI") under of approximately $5 billion, representing approximately the Department of Justice Merger Guidelines ("DOJ 7 percent of state deposits; Wells Fargo would remain the Guidelines"),8 other characteristics of the markets, and third largest commercial banking organization in Oregon commitments made by Wells Fargo to divest one branch. controlling deposits of $4 billion, representing, approximately 13 percent of state deposits. A. Banking Market With Divestiture In the Kittitas County banking market, Wells Fargo oper- Interstate Analysis ton law prohibits the interstate acquisition of a Washington bank that Section 3(d) of the BHC Act allows the Board to approve has existed for fewer than 5 years. This transaction would meet the an application by a bank holding company to acquire minimum age requirements imposed by Washington law. See Wash. control of a bank located in a state other than the home Rev. Code Ann. § 30.04.232 (2003). state of such bank holding company if certain conditions 5. 12 U.S.C. § 1842(c)(1). are met.2 For purposes of the BHC Act, the home state of 6. These banking markets, which are defined in Appendix A, are the Bremerton, Centralia, Kittitas County, Mount Vernon, Olympia, Wells Fargo is Minnesota, and Pacific Northwest is located Seattle, and Yakima markets, all in Washington, and the Portland, in Washington and Oregon.3 Based on a review of all the Oregon, market. facts of record, including relevant state statutes, the Board 7. Market share data are as of June 30, 2003, and are based on finds that all the conditions for an interstate acquisition calculations in which the deposits of thrift institutions are included at enumerated in section 3(d) are met in this case.4 In light of 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See, e.g., Midwest Financial Group, 75 Federal 1. Asset, deposit, and ranking data are as of June 30, 2002. In this Reserve Bulletin 386 (1989); National City Corporation, 70 Federal context, depository institutions include commercial banks, savings Reserve Board 743 (1984). Thus, the Board regularly has included banks, and savings associations. thrift deposits in the market share calculation on a 50 percent weighted 2. A bank holding company's home state is that state in which the basis. See, e.g., First Hawaiian, Inc., 11 Federal Reserve Bulletin 52 total deposits of all banking subsidiaries of such company were the (1991). largest on the later of July 1, 1966, or the date on which the company 8. Under the DOJ Guidelines, 49 Federal Register 26,823 (1984), a became a bank holding company. 12 U.S.C. § 1841(o)(4)(C). market is considered moderately concentrated if the post-merger HHI 3. For purposes of section 3(d) of the BHC Act, the Board consid- is between 1000 and 1800 and highly concentrated if the post-merger ers a bank to be located in the states in which the bank is chartered, HHI is more than 1800. The Department of Justice has informed the headquartered, or operates a branch. Board that a bank merger or acquisition generally will not be chal- 4. See 12 U.S.C. §§ 1842(d)(1)(A) and (B), 1842(d)(2)(A) and (B). lenged (in the absence of other factors indicating anticompetitive Wells Fargo is adequately capitalized and adequately managed, as effects) unless the post-merger HHI is at least 1800 and the merger defined by applicable law. In addition, on consummation of the increases the HHI by more than 200 points. The Department of Justice proposal, Wells Fargo would control less than 10 percent of the total has stated that the higher than normal HHI thresholds for screening amount of deposits of insured depository institutions in the United bank mergers for anticompetitive effects implicitly recognize the States and less than 30 percent of the total deposits of insured competitive effects of limited-purpose lenders and other nondeposidepository institutions in each of Oregon and Washington. Washing- tory financial institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 499 ates the sixth largest depository institution, controlling Based on all the facts of record, the Board concludes that $27.5 million in deposits, representing 8.6 percent of mar- consummation of the proposal would not have a signifiket deposits. Pacific Northwest operates the largest deposi- cantly adverse effect on competition or on the concentratory institution in the market, controlling $72.1 million in tion of banking resources in any of the banking markets in deposits, representing 22.6 percent of market deposits. On which Wells Fargo and Pacific Northwest compete or in consummation of the proposal, Wells Fargo would operate any other relevant banking market. Accordingly, based the largest depository institution in the market, controlling on all the facts of record and subject to completion of deposits of $99.6 million, representing approximately the proposed divestiture, the Board has determined that 31.3 percent of market deposits. competitive factors are consistent with approval of the To reduce the potential for adverse effects on compe- proposal. tition in the Kittitas County banking market, Wells Fargo has committed to divest to an out-of-market commercial Financial, Managerial, and Other Supervisory Factors banking organization one branch with a specified level of deposits sufficient to make the proposal consistent with Section 3 of the BHC Act requires the Board to consider Board precedent and with the thresholds in the DOJ Guide- the financial and managerial resources and future prospects lines.9 After consummation, and taking into account the of the companies and banks involved in the proposal and proposed divestiture, the Kittitas County banking market certain other supervisory factors. The Board has carefully would remain moderately concentrated. Wells Fargo would considered these factors in light of all the facts of record, become the fourth largest depository institution in the including reports of examination, other confidential supermarket, controlling deposits of approximately $67.5 mil- visory information received from the primary federal banklion, representing 21 percent of market deposits. The HHI ing agency that supervises each institution, and informawould decrease by 36 points to 1541. In addition, at least tion provided by Wells Fargo. Based on all the facts of eight competitors would remain in the banking market. record, the Board has concluded that considerations relating to the financial and managerial resources and future B. Banking Markets Without Divestitures prospects of Wells Fargo, Pacific Northwest, and PN Bank are consistent with approval, as are the other supervisory Consummation of the proposal without divestitures would factors under the BHC Act. be consistent with Board precedent and the DOJ Guidelines in all seven of the remaining banking markets Convenience and Needs Considerations in which Wells Fargo and Pacific Northwest compete directly.10 After consummation of the proposal, the seven In acting on a proposal under section 3 of the BHC Act, the markets would remain moderately concentrated, as mea- Board is required to consider the effects of the proposal on sured by the HHI, and changes in concentration would be the convenience and needs of the communities to be served modest in each of these markets. In addition, numerous and to take into account the records of the relevant insured competitors would remain in the markets. depository institutions under the Community Reinvestment Act ("CRA").11 The CRA requires the federal financial C. Views of Other Agencies and Conclusion supervisory agencies to encourage financial institutions to help meet the credit needs of local communities in which The Department of Justice also has conducted a detailed they operate, consistent with their safe and sound operareview of the competitive effects of the proposal and has tion, and requires the appropriate federal financial superviadvised the Board that, in light of the proposed divestiture, sory agency to take into account an institution's record of consummation of the proposal would not have a signifi- meeting the credit needs of its entire community, includcantly adverse effect on competition in any relevant bank- ing low- and moderate-income ("LMI") neighborhoods, in ing market. evaluating bank expansionary proposals. The Board has carefully considered the convenience and needs factor and the CRA performance records of the subsidiary depository 9. With respect to this market, Wells Fargo will execute, before institutions of Wells Fargo and Pacific Northwest, includconsummation of the proposal, a sales agreement for the proposed ing public comments on the effect the proposal would divestiture with a purchaser determined by the Board to be competi- have on the communities to be served by the resulting tively suitable and to complete the divestiture within 180 days after organizations. consummation of the proposal. Wells Fargo also has committed that, if it is unsuccessful in completing any divestiture within 180 days after consummation, it will transfer the unsold branch to an indepen- A. CRA Performance Evaluations dent trustee that is acceptable to the Board and will instruct the trustee to sell the branch promptly to one or more alternative purchasers As provided in the CRA, the Board has evaluated the acceptable to the Board. See BankAmerica Corporation, 78 Federal Reserve Bulletin 338 (1992); United New Mexico Financial Corpora- convenience and needs factor in light of examinations by tion, 77 Federal Reserve Bulletin 484 (1991). the appropriate federal supervisors of the CRA perfor- 10. These markets are the Bremerton, Centralia, Mount Vernon, mance records of the relevant insured depository institu- Olympia, Seattle, and Yakima markets in Washington and the Portland, Oregon, market. The effects of the proposal on the concentration of banking resources in these markets are described in Appendix B. 11. 12 U.S.C. §2901 et seq. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

500 Federal Reserve Bulletin • December 2003 tions. An institution's most recent CRA performance home purchase loans in moderate-income census tracts evaluation is a particularly important consideration in also exceeded the proportion of owner-occupied housing the applications process because it represents a detailed, units. Examiners reported that WF Bank enhanced its on-site evaluation of the institution's overall record of efforts to meet the credit needs of its assessment areas performance under the CRA by its appropriate federal through lending programs, such as the "Easy-To-Own No supervisor.12 Money Down," "Easy-To-Own California 1% Down," Wells Fargo's lead bank, Wells Fargo Bank, N.A., also and "Easy-To-Own 3% Down," which have flexible underin San Francisco ("WF Bank"), received an "outstanding" writing standards, low credit-score approvals, high loan-torating at its most recent CRA performance evaluation by value allowances, and a variety of down payment options. the Office of the Comptroller of the Currency ("OCC"), as Wells Fargo has conducted a significant amount of mortof October 1, 2001.13 All other subsidiary banks of Wells gage lending since the latest CRA performance examina- Fargo received either "outstanding" or "satisfactory" rat- tion. In 2002, WF Bank originated and purchased HMDAings at their most recent CRA performance evaluations.14 reportable loans totaling $88.6 billion, $7 billion of which PN Bank received a "satisfactory" rating at its most recent were in LMI census tracts.16 In the first six months CRA performance evaluation by the Federal Deposit Insur- of 2003, WF Bank originated and purchased HMDAance Corporation ("FDIC"), as of November 23, 1999. reportable loans totaling $57.2 billion, $4.8 billion of which were in LMI census tracts.17 B. CRA Performance of WF Bank Examiners reported that WF originated loans to small businesses in the assessment areas subject to a full-scope 1. Lending Test. In California, WF Bank received an review totaling $6 billion during the evaluation period. "outstanding" rating under the lending test. Examiners Examiners described WF Bank's distribution of small loans noted that WF Bank's overall geographic distribution of to businesses in the Los Angeles-Long Beach, Oakland, loans was good, and they characterized the bank's lending Orange County, San Diego, and San Jose MSAs as excelperformance in the San Francisco Metropolitan Statistical lent. In 2000, WF Bank had the largest market share of Area ("MSA") as excellent. In the assessment areas sub- small loans to businesses in LMI census tracts in the ject to a full-scope review,15 WF Bank originated or pur- assessment areas subject to a full-scope review. In the chased HMDA-reportable loans totaling $42.6 billion. In Orange County and Oakland MSAs, the portion of WF the San Francisco and Orange County MSAs, examiners Bank's small loans to businesses in low-income tracts reported that the proportion of WF Bank's home purchase exceeded the proportion of all businesses in LMI tracts. In loans in low-income census tracts exceeded the proportion the San Francisco MSA, the portion of WF Bank's small of owner-occupied units in those areas. In the San Fran- loans to business in moderate-income census tracts also cisco and San Jose MSAs, the proportion of WF Bank's exceeded the proportion of businesses in such tracts. Since its 2001 performance evaluation, WF Bank has offered Small Business Administration ("SBA") loans, 12. See Interagency Questions and Answers Regarding Community such as SBA 7(a) and SBAExpress, that help small busi- Reinvestment, 66 Federal Register 36,620 and 36,639 (2001). nesses obtain financing for which they would not otherwise 13. The overall rating for WF Bank is a composite of its state/ multistate ratings. WF Bank's performance in California was weighted qualify. WF Bank also offers "Community Express" loans more heavily than its performance in other areas in its overall rating through a pilot program developed by the SBA in collaboby examiners because more than 98 percent of its deposits and more ration with a national community group. To qualify for than 87 percent of its loans were in California during the evaluation Community Express loans applicants must meet certain period. Examiners rated WF Bank "outstanding" in California. At the size standards and conduct business in specific geographic time of the 2001 performance evaluation, WF Bank had 60 assessment areas in Arizona, California, Colorado, Idaho, Minnesota, Nevada, areas, usually LMI areas. In 2001, WF Bank introduced Oregon, Utah, and Washington. the Business Secured MasterCard. This credit card was 14. See Appendix C for the CRA ratings of the other subsidiary designed to help establish credit for small businesses and banks of Wells Fargo. One commenter expressed concern that the has credit limits from $1,000 to $100,000 and the option to performance of Wells Fargo HSBC Trade Bank, N.A., San Francisco progress to a partially secured or unsecured card after a ("Trade Bank"), was weak because its performance under the CRA was limited to qualified investments and community development year. Since 2001, a total of 1,711 Business Secured Masterservices, which examiners characterized as not being "innovative or Card accounts have been opened in California. complex." As noted in Appendix C, Trade Bank received a "satisfac- Examiners reported that, through its community develtory" rating at its most recent CRA evaluation. As a wholesale bank, its CRA activities are limited to community development investments opment lending, WF bank helped address a significant and services. Examiners described the community development investments and services provided by Trade Bank as being responsive to community needs. 16. One commenter recommended that Wells Fargo refer all quali- 15. In California, examiners conducted full-scope reviews for fied mortgage applicants from subprime affiliates to prime affiliates. the bank's Los Angeles-Long Beach, Oakland, Orange County, Wells Fargo has a program for referring qualified borrowers from San Diego, San Francisco, and San Jose MSAs assessment areas. The Wells Fargo Financial, Inc., Des Moines, Iowa ("WF Financial"), to review period for residential mortgage lending reportable under the Wells Fargo Home Mortgage, also in Des Moines ("WFHM"). Home Mortgage Disclosure Act ("HMDA") (12 U.S.C. § 2801 et seq.) 17. Commenters alleged that Wells Fargo aggressively markets and small business and small farm lending reportable under CRA was subprime loans to LMI borrowers. The Board has considered WF the last three quarters of 1998, calendar years 1999 and 2000, and the Bank's record of lending to borrowers in LMI areas as well as Wells first three quarters of 2001. Fargo's efforts to market prime and subprime loans in LMI areas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 501 need for affordable housing. WF Bank made 84 com- technology centers that primarily visit LMI areas; the munity development loans for affordable housing in the Wellsfargo.com Bus, which provides consumer education assessment areas subject to a full-scope review, totaling and travels throughout the United States; and mobile $312 million. These loans included a $20.8 million con- branches for use in emergencies and when traditional struction loan to build a 293-unit apartment complex in branches are unable to function. Examiners found that Anaheim, which will provide affordable housing to house- WF Bank's banking services are accessible to essentially holds earning between 45 and 50 percent of the average all portions of the assessment areas. During the evaluation median income, and a $10.5 million construction loan that period, WF Bank opened 28 branches and closed 199. helped build an 80-unit multifamily housing complex for Examiners reported that the bank's opening and closing families of low-income farm workers in Half Moon Bay. activity had a neutral impact on LMI areas. WF Bank also extended loans in the amounts of $7.5 mil- As of July 31, 2003, half of WF Bank's branches in lion and $1.7 million to finance the construction of California were in or within a mile of an LMI community. 195 units of affordable housing for LMI individuals in In 2001, WF Bank launched the Banking on Our Future San Jose. program, a computer-based financial literacy program fea- WF Bank made 108 community development loans, turing instructions for young adult and adult residents in totaling $658 million, to revitalize or stabilize LMI areas LMI areas. In May 2002, a Spanish language version of and to promote economic development. Wells Fargo has Banking on Our Future was introduced. represented that, since the performance evaluation in 2001, the bank has extended 71 community development loans in C. HMD A and Fair Lending Record California, totaling $122.2 million. The Board also has carefully considered Wells Fargo's 2. Investment Test. In California, WF Bank received an lending record in light of comments on HMDA data "outstanding" rating under the investment test. Examiners reported by its subsidiaries.19 The HMDA data reflect noted that WF Bank's investment and grant activities certain disparities in the rates of loan applications, originahelped address essential identified needs in the full-scope tions, and denials among members of different racial assessment areas. Community development investments groups and persons at different income levels in certain in those assessment areas subject to a full-scope review local areas.20 The 2001 and 2002 HMDA data indicate that totaled $162.4 million and included a $25 million invest- Wells Fargo's denial disparity ratios for African-American ment in limited partnerships that invest in apartment com- and Hispanic applicants generally were higher than the plexes in California that qualify for low-income housing denial disparity ratios for lenders in the aggregate for tax credits, and a $9 million investment in a real estate HMDA-reportable loans in the markets reviewed.21 Wells equity fund that provides equity to underutilized indus- Fargo's percentage of housing-related loan originations to trial and retail sites in LMI communities in Los Angeles. WF Bank also provided $1.5 million in grants to The Accelerated School, a charter school in South Central 19. Commenters criticized Wells Fargo for not differentiating between prime and subprime loans when reporting data under HMDA. Los Angeles. HMDA reporting requirements do not, however, distinguish between Since the evaluation in 2001, WF Bank has continued prime and subprime loans. Commenters also alleged, based on comto make community development investments and grants. parisons with county courthouse records, that Wells Fargo underre- In California in 2002, the bank's community development ports loans under HMDA, in part by mischaracterizing some closedend loans as open-end loans that do not have to be reported under investments totaled $54.5 million, and its grants totaled HMDA. Wells Fargo asserts that it reports all mortgage lending $18 million. During the first six months of 2003, WF activity in accordance with HMDA regulations, which provide a Bank's community development investments in California consistent disclosure format for all lenders, and acknowledges that totaled $41 million, and its grants totaled $9 million. although it occasionally uses an open-end deed of trust to secure a closed-end loan, such loans are in fact treated as closed-end loans. The Board notes that courthouse records would not necessarily correspond 3. Service Test. In California, WF Bank received an "outto reported HMDA data because not all lenders that record deeds of standing" rating under the service test.18 WF Bank's alter- trust are subject to HMDA's reporting requirements, and some transnative delivery systems include ATMs, banking by phone actions recorded in courthouse records are not subject to HMDA or mail, and Internet banking. During the evaluation period, reporting. 20. A commenter alleged that Wells Fargo failed to make enough the bank operated 874 branch offices and 6,611 ATMs. loans to LMI individuals and minorities in California. Another com- In addition, the bank provides Buses, which are mobile menter alleged that, based on 2001 HMDA data, WFHM denied home mortgage applications from African Americans and Hispanics more frequently than applications from whites in the Denver, Seattle, Albu- 18. One commenter criticized the fees charged by Wells Fargo for querque, Austin, and Houston MSAs. cashing noncustomer checks and other services and for failing to 21. The Board analyzed 2001 and 2002 HMDA data for Wells verify whether a check is valid by telephone. Wells Fargo has repre- Fargo's lending affiliates in their assessment areas in California, sented that, along with many of its competitors, the verification of Colorado, New Mexico, Texas, and Washington. The Board's review individual checks by telephone was terminated because of escalating included the HMDA data for WF Bank; Wells Fargo Bank West, N.A., account fraud. Although the Board has recognized that banks help Denver, Colorado; Wells Fargo Bank New Mexico, N.A., Albuquerserve the banking needs of their communities by making basic bank- que, New Mexico; Wells Fargo Bank Texas, N.A., Houston, Texas; ing services available at a nominal or no charge, the CRA does not WFHM; Wells Fargo Funding, Minneapolis, Minnesota; and WF require that banks limit the fees charged for services. Financial. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

502 Federal Reserve Bulletin • December 2003 borrowers in minority census tracts22 generally was less ing laws and regulations at the other subsidiary banks of than that of lenders in the aggregate in the markets.23 Wells Fargo in the performance evaluations listed in In 2002, however, Wells Fargo's housing-related loan Appendix C.25 originations to African-American individuals, as a percent- The record also indicates that Wells Fargo has taken age of its total HMDA-reportable lending, were equal to or steps to ensure compliance with fair lending laws.26 Wells exceeded that of the aggregate of all lenders in seven of the Fargo's corporate fair lending policy includes standards markets reviewed. Wells Fargo's housing-related loan relating to advertising and marketing, pricing, underwritoriginations to Hispanic individuals, as a percentage of its ing, compliance with fair lending laws, and customer sertotal HMDA-reportable lending, were also equal to or vice. The corporate fair lending policy also requires each exceeded that of the aggregate of all lenders in five of the Wells Fargo business that extends or supports the extension markets reviewed in 2002. Moreover, the HMD A data of credit to adopt Wells Fargo's corporate fair lending generally do not indicate that Wells Fargo is excluding any policy and implement policies and procedures consistent race or income segment of the population or geographic with the corporate fair lending policy. Policies adopted by areas on a prohibited basis.24 Wells Fargo businesses include comparative file analysis, a The Board is concerned when HMDA data for an institu- second review process, and self-assessment audits for fair tion indicates disparities in lending and believes that all lending compliance.27 In addition, Wells Fargo has implebanks are obligated to ensure that their lending practices mented fair lending policy training for executive manageare based on criteria that ensure not only safe and sound ment, sales management, operations management, sales lending, but also equal access to credit by creditworthy staff, operations staff, and consumer contact employees applicants regardless of their race or income level. The with loan origination responsibilities. Board recognizes, however, that HMDA data alone provide The Board has also considered the HMDA data in light an incomplete measure of an institution's lending in its of the programs described above and the overall perforcommunity because these data cover only a few categories mance of Wells Fargo's subsidiary banks under the CRA. of housing-related lending. HMDA data, moreover, pro- These established efforts demonstrate that the banks are vide only limited information about the covered loans. active in helping to meet the credit needs of their entire HMDA data, therefore, have limitations that make them an communities. inadequate basis, absent other information, for concluding that an institution has not assisted adequately in meeting its D. Branch Closings community's credit needs or has engaged in illegal lending discrimination. One commenter expressed concern about the possible Because of the limitations of HMDA data, the Board has effect of branch closings resulting from this proposal and considered these data carefully in light of other informa- suggested that Wells Fargo refrain from closing branches tion, including examination reports that provide an on-site in LMI census tracts or rural areas until it has discussed the evaluation of compliance by the subsidiary depository proposed branch closure with local community groups. institutions of Wells Fargo with fair lending laws. Examin- The Board has carefully considered the comment on poteners found no evidence of prohibited discrimination or other tial branch closings in light of all the facts of record. Wells illegal credit practices at any of the subsidiary depository Fargo has represented that it intends to implement its institutions controlled by Wells Fargo. Examiners identified no substantive violations of applicable fair lending 25. One commenter criticized the business relationship between laws and regulations at WF Bank. Examiners also iden- Wells Fargo Bank Minnesota, N.A., Minneapolis, Minnesota ("WF tified no substantive violations of applicable fair lend- Minnesota"), and Delta Funding Corp. ("Delta"), Woodbury, New York, a subprime lender that was subject to government actions regarding its consumer lending practices. Wells Fargo stated that with 22. For purposes of this HMDA analysis, minority census tract respect to Delta Funding, WF Minnesota's role is limited to that of a means a census tract with a minority population of 80 percent or more. trustee on bond issues secured by pools of mortgage loans that Delta 23. Several commenters expressed concern that low-income and originated. Wells Fargo represented that WF Minnesota has no role in minority communities have disproportionately high numbers of Wells the initial funding of the loans that are included in the mortgage pools Fargo subprime loans, but did not provide evidence to support this or in the establishment of Delta's business practices. assertion. Commenters also alleged that the subprime lending subsidi- 26. A commenter alleged that Wells Fargo does not accurately aries of Wells Fargo, including WF Financial and Island Finance report information about borrowers to credit bureaus. Wells Fargo has Credit Services, Inc., Des Moines, charge excessive interest rates. represented that it has policies in place to ensure proper reporting to Commenters did not explain, however, how the rates charged by these credit bureaus. In addition, in instances where an error occurs, Wells entities are excessive or provide any evidence that rates charged by Fargo tries to work with the customer to rectify the error as quickly as Wells Fargo do not reflect the customer's credit history, risk profile, or possible and send correct information to the credit reporting agency. other appropriate factors. The Board has considered these allegations 27. Some commenters have alleged that Wells Fargo uses decepin light of Wells Fargo's policies and procedures for ensuring compli- tive marketing tactics, such as misleading monthly payment compariance with the fair lending laws. sons that do not include the costs of taxes and insurance. Commenters 24. Other commenters alleged that Wells Fargo does not explain to also alleged that Wells Fargo's practice of mailing unsolicited loan borrowers that credit insurance is optional. Wells Fargo stated that it drafts is an abusive marketing tactic. Wells Fargo is required by does, in fact, present credit insurance to its customers as optional. One the Federal Trade Commission Act (15 U.S.C. §41 et seq.) to market commenter expressed concern that Wells Fargo sells single-premium products in a manner that is not unfair and deceptive. The Board has credit life insurance. Wells Fargo represented that it does not offer considered Wells Fargo's policies and procedures for ensuring that single-premium credit insurance on real-estate-secured products. their marketing efforts are consistent with the law. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 503 current branch activity policy at Bank. The policy includes should be, and hereby is, approved.30 In reaching this a review of branches proposed for relocation, closure, or conclusion, the Board has considered all the facts of record consolidation in low-income communities or where the in light of the factors that it is required to consider under distance exceeds two miles to the nearest Wells Fargo the BHC Act and other applicable statutes. The Board's branch. approval is specifically conditioned on compliance by The Board also has considered that federal banking law Wells Fargo with all the representations and commitments provides a specific mechanism for addressing branch clos- made in connection with the application, commitments ings.28 Federal law requires an insured depository institu- referred to in this order, and the receipt of all other regulation to provide notice to the public and the appropriate tory approvals. These representations, commitments, and federal supervisory agency before closing a branch. In conditions are deemed to be conditions imposed in writing addition, the Board notes that the OCC and FDIC, as the by the Board in connection with its findings and decision appropriate federal supervisors of Wells Fargo's subsidiary and, as such, may be enforced in proceedings under applibanks, will continue to review the branch closing records cable law. of the banks in the course of conducting CRA performance The transaction shall not be consummated before the examinations. fifteenth calendar day after the effective date of this order, and the proposal may not be consummated later than three E. Conclusion on Convenience and Needs months after the effective date of this order, unless such Considerations period is extended for good cause by the Board or by the Federal Reserve Bank of San Francisco, acting pursuant to In reviewing the effect of the proposal on the convenience delegated authority. and needs of the communities to be served, the Board has By order of the Board of Governors, effective Octocarefully considered the entire record, including comments ber 16, 2003. received and responses to the comments, evaluations of the performance of the insured depository institution subsidi- Voting for this action: Chairman Greenspan, Vice Chairman Ferguaries of Wells Fargo and Pacific Northwest under the CRA, son, and Governors Gramlich, Bies, Olson, Bernanke, and Kohn. and confidential supervisory information.29 The Board also considered information submitted by Wells Fargo concern- ROBERT DEV. FRIERSON Deputy Secretary of the Board ing WF Bank's performance under the CRA and its compliance with fair lending laws since its last CRA performance evaluation and the compliance of other Wells Fargo Appendix A lending subsidiaries with fair lending, HMDA, and other applicable laws. Banking Markets in which Wells Fargo and Pacific North- Based on all the facts of record, and for reasons diswest Compete Directly cussed above, the Board concludes that considerations relating to the convenience and needs factors, including the Washington Banking Markets CRA performance records of the relevant depository institutions, are consistent with approval of the proposal. Bremerton Conclusion The Bremerton Ranally Metropolitan Area ("RMA"), Poulsbo, and Kingston. Based on the foregoing and in light of all the facts of record, the Board has determined that the application 30. Several commenters requested that the Board hold a public hearing on the proposal. Section 3 of the BHC Act does not require the Board to hold a public hearing on an application unless the 28. Section 42 of the Federal Deposit Insurance Act (12 U.S.C. appropriate supervisory authority for any of the banks to be acquired § 183lr-1), as implemented by the Joint Policy Statement Regarding makes a timely written recommendation of denial of the application. Branch Closings (64 Federal Register 34,844 (1999)), requires that a The Board has not received such a recommendation from the appropribank provide the public with at least 30 days' notice and the appropri- ate supervisory authority. Under its rules, the Board also may, in ate federal supervisory agency with at least 90 days' notice before the its discretion, hold a public meeting or hearing on an application to date of the proposed branch closing. The bank also is required to acquire a bank if a meeting or hearing is necessary or appropriate to provide reasons and other supporting data for the closure, consistent clarify factual issues related to the application and to provide an with the institution's written policy for branch closings. opportunity for testimony. 12 C.F.R. 225.16(e). The Board has consid- 29. Commenters criticized Wells Fargo for funding unaffiliated ered carefully the commenters' requests in light of all the facts of payday lenders. Wells Fargo stated that its affiliates have provided record. In the Board's view, the public has had ample opportunity to credit facilities to payday lenders, often in conjunction with other submit comments on the proposal, and in fact, the commenters have major commercial lenders, and such lending represents an insignifi- submitted written comments that the Board has considered carefully cant percentage of its commercial lending portfolio. Wells Fargo in acting on the proposal. The commenters' requests fail to demonrepresented that it does not participate in the lending practices or strate why their written comments do not present their views adecredit review processes of payday lenders to which it extends credit. quately or why a meeting or hearing otherwise would be necessary or The Board notes that the OCC, as the primary federal supervisor of appropriate. For these reasons, and based on all the facts of record, the the subsidiary national banks of Wells Fargo engaged in providing Board has determined that a public hearing or meeting is not required credit to payday lenders, will continue to review the banks' lending or warranted in this case. Accordingly, the requests for a public activities in the course of conducting examinations. hearing on the proposal are denied. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

504 Federal Reserve Bulletin • December 2003 Centralia depository institution in the market, controlling $4.7 million in deposits, representing less than 1 percent of market Western Lewis County, including Centralia, Chehadeposits. On consummation of the proposal, Wells Fargo lis, Morton, Pe Ell, Toledo, and Winlock. would operate the seventh largest depository institution in the market, controlling deposits of $37.7 million, represent- Kittitas County ing 6.6 percent of market deposits. The HHI would increase 9 points to 1732. Eleven competitors would Kittitas County, including Cle Elum, Ellensburg, and remain in the market. Roslyn. Mount Vernon, Washington Mount Vernon Wells Fargo operates the ninth largest depository institu- Skagit County and northern Whidbey Island, including tion in the Mount Vernon banking market, controlling Anacortes, Burlington, Concrete, Coupeville, La Conner, $53.4 million in deposits, representing 3.2 percent of mar- Mount Vernon, Oak Harbor, and Sedro Woolley. ket deposits. Pacific Northwest operates the second largest depository institution in the market, controlling $313.2 mil- Olympia lion in deposits, representing 18.5 percent of market depos- The Olympia RMA and Hoodsport. its. On consummation of the proposal, Wells Fargo would operate the largest depository institution in the market, controlling deposits of $366.6 million, representing Seattle approximately 21.6 percent of market deposits. The HHI would increase 116 points to 1326. Twelve competitors The Seattle RMA, Camano City, and Eatonville. would remain in the market. Yakima Olympia, Washington The Yakima RMA. Wells Fargo operates the tenth largest depository institution in the Olympia banking market, controlling $49.2 mil- Oregon Banking Market lion in deposits, representing 3 percent of market deposits. Pacific Northwest is the seventeenth largest depository institution in the market, controlling $6.9 million in depos- Portland its, representing less than 1 percent of market deposits. On The Portland RMA, Banks, Molalla, Mount Angel, Saint consummation of the proposal, Wells Fargo would operate Helens, Scappoose, Vernonia, and Woodburn, Oregon; and the ninth largest depository institution in the market, con- Yacolt, Washington. trolling deposits of $56.1 million, representing approximately 3.4 percent of market deposits. The HHI would Appendix B increase 2 points to 1042. Seventeen competitors would remain in the market. Certain Banking Markets Without Divestitures Yakima, Washington Bremerton, Washington Wells Fargo operates the eighth largest depository insti- Wells Fargo operates the eighth largest depository institutution in the Bremerton banking market, controlling tion in the Yakima banking market, controlling $52.1 mil- $55.5 million in deposits, representing 4.4 percent of mar- lion in deposits, representing 4.6 percent of market deposket deposits. Pacific Northwest operates the sixth largest its. Pacific Northwest operates the seventh largest depository institution in the market, controlling $71.9 mil- depository institution in the market, controlling $54.3 million in deposits, representing 5.7 percent of market depos- lion in deposits, representing 4.8 percent of market deposits. On consummation of the proposal, Wells Fargo would its. On consummation of the proposal, Wells Fargo would operate the fourth largest depository institution in the operate the fifth largest depository institution in the marmarket, controlling deposits of $127.4 million, repre- ket, controlling deposits of $106.4 million, representing senting approximately 10 percent of market deposits. The approximately 9.5 percent of market deposits. The HHI HHI would increase 49 points to 1476. Fourteen competi- would increase 45 points to 1279. Eleven competitors tors would remain in the market. would remain in the market. Centralia, Washington Seattle, Washington Wells Fargo operates the seventh largest depository institu- Wells Fargo operates the fifth largest depository institution tion in the Centralia banking market, controlling $33 mil- in the Seattle banking market, controlling $2.4 billion in lion in deposits, representing 5.7 percent of market deposits, representing 6.3 percent of market deposits. deposits. Pacific Northwest operates the twelfth largest Pacific Northwest operates the eighth largest depository Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 505 institution in the market, controlling $784.7 million in deposits, representing 14.6 percent of market deposits. deposits, representing 2.1 percent of market deposits. On Pacific Northwest operates the tenth largest depository consummation of the proposal, Wells Fargo would operate institution in the market, controlling $262.8 million in the fourth largest depository institution in the market, deposits, representing 1.5 percent of market deposits. On controlling deposits of $3.2 billion, representing approxi- consummation of the proposal, Wells Fargo would remain mately 8.4 percent of market deposits. The HHI would the third largest depository institution in the market, conincrease 26 points to 1468. Sixty-seven competitors would trolling deposits of $2.8 billion, representing approxiremain in the market. mately 16.2 percent of market deposits. The HHI would increase 45 points to 1759. Thirty-two competitors would Portland, Oregon remain in the market. Wells Fargo operates the third largest depository institution in the Portland banking market, controlling $2.5 billion in Appendix C CRA Performance Evaluations of Wells Fargo's Subsidiary Banks Subsidiary Bank CRA Rating Date Agency Wells Fargo Bank Alaska, N.A., Outstanding March 8, 1999 OCC Anchorage, Alaska Wells Fargo Bank Arizona, N.A., Satisfactory August 2, 1999 OCC Phoenix, Arizona Wells Fargo Bank Illinois, N.A., Satisfactory June 12, 2000 OCC Galesburg, Illinois Wells Fargo Bank Indiana, N.A., Outstanding June 12, 2000 OCC Fort Wayne, Indiana Wells Fargo Bank Iowa, N.A., Satisfactory June 12, 2000 OCC Des Moines, Iowa Wells Fargo Bank Michigan, N.A., Outstanding April 19, 1999 OCC Marquette, Michigan Wells Fargo Bank Minnesota, N.A., Outstanding Feb. 1, 2000 OCC Minneapolis, Minnesota Wells Fargo Bank Montana, N.A., Satisfactory March 13, 2000 OCC Billings, Montana Wells Fargo Bank Nebraska, N.A., Satisfactory June 12, 2000 OCC Omaha, Nebraska Wells Fargo Bank Nevada, N.A., Satisfactory August 2, 1999 OCC Las Vegas, Nevada Wells Fargo Bank New Mexico, N.A., Satisfactory March 13, 2000 OCC Albuquerque, New Mexico Wells Fargo Bank North Dakota, N.A., Satisfactory March 13, 2000 OCC Fargo, North Dakota Wells Fargo Bank Northwest, N.A., Outstanding May 3, 1999 OCC Salt Lake City, Utah Wells Fargo Bank Ohio, N.A., Outstanding May 7, 2001 OCC Van Wert, Ohio Wells Fargo Bank South Dakota, N.A., Outstanding March 13, 2000 OCC Sioux Falls, South Dakota Wells Fargo Bank Texas, N.A., Satisfactory Nov. 1, 1999 OCC San Antonio, Texas Wells Fargo Bank West, N.A., Satisfactory Nov. 1, 1999 OCC Denver, Colorado Wells Fargo Bank Wisconsin, N.A., Satisfactory June 12, 2000 OCC Milwaukee, Wisconsin Wells Fargo Bank Wyoming, N.A., Satisfactory March 13, 2000 OCC Casper, Wyoming Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

506 Federal Reserve Bulletin • December 2003 CRA Performance Evaluations of Wells Fargo's Subsidiary Banks—Continued Subsidiary Bank CRA Rating Date Agency Wells Fargo Financial Bank, Outstanding Nov. 28,2001 FDIC Sioux Falls, South Dakota Wells Fargo Financial National Bank, Outstanding March 21, 1997 OCC Des Moines, Iowa (previously, Dial National Bank, Des Moines, Iowa) Wells Fargo HSBC Trade Bank, N.A., Satisfactory August 7, 2000 OCC San Francisco, California Wells Fargo & Company commercial banking organization in the United States and San Francisco, California the largest commercial banking organization in Colorado. Order Approving the Acquisition of a Bank Holding Interstate Analysis Company Section 3(d) of the BHC Act allows the Board to approve Wells Fargo & Company ("Wells Fargo") has requested an application by a bank holding company to acquire the Board's approval under section 3 of the Bank Hold- control of a bank located in a state other than the home ing Company Act ("BHC Act") (12 U.S.C. §1842) to state of such bank holding company if certain conditions acquire all the voting shares of Two Rivers Corporation are met.3 For purposes of the BHC Act, the home state of ("Two Rivers"), and thereby indirectly acquire Bank of Wells Fargo is Minnesota, and Wells Fargo proposes to Grand Junction ("GJ Bank"), both in Grand Junction, acquire a depository institution in Colorado. Based on a Colorado. review of all the facts of record, including a review of Notice of the proposal, affording interested persons an relevant state statutes, the Board finds that all the condiopportunity to submit comments, has been published tions for an interstate acquisition enumerated in sec- (66 Federal Register 38,340 (2003)). The time for filing tion 3(d) are met in this case.4 In light of all the facts of comments has expired, and the Board has considered the record, the Board is permitted to approve the proposal proposal and all comments received in light of the factors under section 3(d) of the BHC Act. set forth in section 3 of the BHC Act. Wells Fargo, with total consolidated assets of approxi- Competitive Considerations mately $363 billion and total insured domestic deposits of $210 billion, is the third largest commercial banking orga- Section 3 of the BHC Act prohibits the Board from approvnization in the United States. Wells Fargo operates subsidi- ing a proposal that would result in a monopoly or would be ary depository institutions in Alaska, Arizona, California, in furtherance of any attempt to monopolize the business of Colorado, Idaho, Illinois, Iowa, Michigan, Minnesota, banking in any relevant market. The BHC Act also prohib- Montana, Nebraska, Nevada, New Mexico, North Dakota, its the Board from approving a proposed bank acquisition Ohio, Oregon, South Dakota, Texas, Utah, Washington, that would substantially lessen competition in any relevant Wisconsin, and Wyoming. Wells Fargo controls approxi- banking market unless the anticompetitive effects of the mately 5.9 percent of total assets of insured commercial proposal are clearly outweighed in the public interest by banks and approximately 4.4 percent of total deposits of the probable effect of the proposal in meeting the conveinsured depository institutions in the United States.1 Wells nience and needs of the community to be served.5 Fargo is the largest commercial banking organization in Colorado, controlling deposits of $9.9 billion, representing 3. A bank holding company's home state is that state in which the approximately 18 percent of total deposits in insured total deposits of all banking subsidiaries of such company were the depository institutions in the state ("state deposits").2 largest on the later of July 1, 1966, or the date on which the company became a bank holding company. 12 U.S.C. § 1841(o)(4)(C). Two Rivers, with total consolidated assets of $72 mil- 4. See 12 U.S.C. §§ 1842(d)(1)(A) and (B), 1842(d)(2)(A) and (B). lion operates one depository institution in Colorado. Two Wells Fargo is adequately capitalized and adequately managed, as Rivers is the 97th largest depository organization in Colo- defined by applicable law. In addition, on consummation of the rado, controlling total deposits of $57.6 million, represent- proposal, Wells Fargo would control less than 10 percent of the total amount of deposits of insured depository institutions in the United ing less than 1 percent of state deposits. On consummation States and less than 30 percent of the total deposits of insured of the proposal, Wells Fargo would remain the third largest depository institutions in Colorado. Colorado law prohibits the interstate acquisition of a Colorado bank that has existed for fewer than 1. Asset, deposit, and national ranking data are as of December 31, than 5 years. This transaction would meet the minimum age require- 2002. In this context, depository institutions include commercial ments imposed by Colorado law. See Colo. Rev. Stat. §11-6.4-103 banks, savings banks, and savings associations. (2003). 2. State deposit and state ranking data are as of June 30, 2002. 5. 12 U.S.C. § 1842(c)(1). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 507 The subsidiary depository institutions of Wells Fargo Board is required to consider the effects of the proposal on and Two Rivers currently compete in the Grand Junction, the convenience and needs of the communities to be served Colorado, banking market.6 Consummation of the proposal and to take into account the records of the relevant insured would be consistent with the Department of Justice Merger depository institutions under the Community Reinvestment Guidelines ("DOJ Guidelines") and Board precedent.7 Act ("CRA").9 The Board has carefully considered the After consummation of the proposal, the market would convenience and needs factor and the CRA performance remain moderately concentrated, as measured by the HHI, records of the subsidiary banks of Wells Fargo and Two and numerous competitors would remain in the market.8 Rivers in light of all the facts of record. Wells Fargo's lead The Department of Justice also has advised the Board that bank, Wells Fargo Bank, N.A., San Francisco, California it believes that consummation of the proposal is not likely ("WF Bank"), received an "outstanding" rating at its most to have a significantly adverse effect on competition in any recent CRA performance evaluation by the Office of the relevant banking market. Based on all the facts of record, Comptroller of the Currency ("OCC"), as of October 1, the Board concludes that consummation of the proposal 2001. All other Wells Fargo subsidiary depository instituwould not have a significantly adverse effect on competi- tions received "outstanding" or "satisfactory" CRA rattion or on the concentration of banking resources in any ings at their most recent CRA performance evaluations.10 relevant banking market, and that competitive consider- As discussed in the Board's companion order of Octoations are consistent with approval. ber 16, 2003, approving the application by Wells Fargo to acquire Pacific Northwest Bancorp, Inc., Seattle, Washing- Financial, Managerial, and Other Supervisory Factors ton, Wells Fargo has implemented many programs to help meet the convenience and needs of the communities it Section 3 of the BHC Act requires the Board to consider serves and has taken steps to ensure compliance with fair the financial and managerial resources and future prospects lending laws.11 GJ Bank received a "satisfactory" rating of the companies and banks involved in the proposal and at its most recent CRA performance evaluation by the certain other supervisory factors. The Board has carefully Federal Deposit Insurance Corporation ("FDIC"), as of considered these factors in light of all the facts of record, August 12, 2002. including reports of examination, other confidential super- One commenter expressed concern about the effect of a visory information received from the primary federal bankbranch closing that may result from this proposal. The ing agency that supervises each institution, and informa- Board has carefully considered the comment on potential tion provided by Wells Fargo. Based on all the facts of branch closings in light of all the facts of record. Wells record, the Board has concluded that considerations relat- Fargo has represented that the branch in question is in a ing to the financial and managerial resources and future middle-income census tract and next door to a Wells Fargo prospects of Wells Fargo, Two Rivers, and GJ Bank are branch that is less than a mile from Wells Fargo's main consistent with approval, as are the other supervisory facoffice in Grand Junction. tors under the BHC Act. The Board also has considered that federal banking law provides a specific mechanism for addressing closings of Convenience and Needs Considerations branches of insured depository institutions.12 Federal law requires an insured depository institution to provide notice In acting on a proposal under section 3 of the BHC Act, the to the public and the appropriate federal supervisory agency before closing a branch. In addition, the Board 6. The Grand Junction banking market is defined as Mesa County, notes that the OCC and FDIC, as the appropriate fed- Colorado. 7. Under the DOJ Guidelines, 49 Federal Register 26,823 (1984), a market is moderately concentrated if the post-merger HHI is between 9. 12 U.S.C. §2901 et seq. 1000 and 1800. The Department of Justice has informed the Board 10. The Interagency Questions and Answers Regarding Commuthat a bank merger or acquisition generally will not be challenged (in nity Reinvestment provides that an institution's most recent CRA the absence of other factors indicating anticompetitive effects) unless performance evaluation is an important consideration in the applicathe post-merger HHI is at least 1800 and the merger increases the HHI tion process because it represents a detailed on-site evaluation of the by more than 200 points. The Department of Justice has stated that the institution's overall record of performance under the CRA by its higher than normal HHI thresholds for screening bank mergers for appropriate federal supervisor. 66 Federal Register 36,620 and 36,639 anticompetitive effects implicitly recognize the competitive effects of (2001). limited-purpose lenders and other nondepository financial institutions. 11. See Wells Fargo & Company, 89 Federal Reserve Bulletin 497 8. On consummation of the proposal, Wells Fargo would remain (2003) (Order dated October 16, 2003) ("Pacific Northwest Order"). the largest depository institution in the Grand Junction banking mar- The CRA ratings of Wells Fargo's other subsidiary banks are listed in ket, controlling deposits of $363.9 million, representing approxi- Appendix C of that order. The record of that application and the mately 31.3 percent of total deposits in insured depository institutions findings in the Pacific Northwest Order are incorporated into and in the market. The HHI would increase 261 points to 1556, and the made part of this order. market would remain moderately concentrated. These calculations use 12. Section 42 of the Federal Deposit Insurance Act (12 U.S.C. deposit and market share data as of June 30, 2003, and include the § 1831r-l), as implemented by the Joint Policy Statement Regarding deposits of thrift institutions at 50 percent. The Board previously has Branch Closings (64 Federal Register 34,844 (1999)), requires that a indicated that thrift institutions have become, or have the potential to bank provide the public with at least 30 days' notice and the appropribecome, significant competitors of commercial banks. See Midwest ate federal supervisory agency with at least 90 days' notice before the Financial Group, 75 Federal Reserve Bulletin 386 (1989); National date of the proposed branch closing. The bank also is required to City Corporation, 70 Federal Reserve Bulletin 143 (1984); and First provide reasons and other supporting data for the closure, consistent Hawaiian, Inc., 11 Federal Reserve Bulletin 52 (1991). with the institution's written policy for branch closings. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

508 Federal Reserve Bulletin • December 2003 eral supervisors of Wells Fargo's subsidiary banks, will Citigroup Inc. ("Citigroup"), a financial holding company continue to review the branch closing records of the ("FHC") within the meaning of the Bank Holding Combanks in the course of conducting CRA performance pany Act ("BHC Act"), has requested the Board's examinations.13 approval under section 4 of the BHC Act (12 U.S.C. Based on all the facts of record, and for reasons dis- § 1843) and the Board's Regulation Y (12 C.F.R. Part 225) cussed above, the Board concludes that considerations to retain all the voting shares of Phibro, Inc., New York, relating to the convenience and needs factors, including the New York ("Phibro"). Phibro engages in a variety of CRA performance records of the relevant depository insti- commodity-related activities, including trading in physical tutions, are consistent with approval of the proposal. commodities, an activity that the Board has not previously approved under the BHC Act. Citigroup currently owns Conclusion Phibro pursuant to the temporary grandfather authority provided by section 4(a)(2) of the BHC Act.1 Based on the foregoing and in light of all the facts of Regulation Y currently authorizes bank holding comparecord, the Board has determined that the application nies ("BHCs") to engage as principal in forward contracts, should be, and hereby is, approved. In reaching this con- options, futures, options on futures, swaps, and similar clusion, the Board has considered all the facts of record contracts, whether traded on exchanges or not, based on a in light of the factors that it is required to consider under rate, price, financial asset, nonfinancial asset, or group of the BHC Act and other applicable statutes. The Board's assets (other than a bank-ineligible security) ("Commodity approval is specifically conditioned on compliance by Derivatives"). Under Regulation Y, a BHC may conduct Wells Fargo with all the representations and commitments Commodity Derivatives activities subject to certain restricmade in connection with the application and the receipt tions that are designed to limit the BHC's activity to of all other regulatory approvals. These representations, trading and investing in financial instruments rather than commitments, and conditions are deemed to be conditions dealing directly in physical commodities. Under these imposed in writing by the Board in connection with its restrictions, a BHC may take and make delivery of physifindings and decision and, as such, may be enforced in cally settled derivatives involving commodities that a state proceedings under applicable law. member bank is permitted to own.2 For all other types of The transaction shall not be consummated before the physically settled derivatives,3 a BHC must make reasonfifteenth calendar day after the effective date of this order, able efforts to avoid delivery on such derivatives or must and the proposal may not be consummated later than three take and make delivery only on an instantaneous, passmonths after the effective date of this order, unless such through basis. Other than in the limited circumstances period is extended for good cause by the Board or by the described above in connection with Commodity Deriva- Federal Reserve Bank of San Francisco, acting pursuant to tives, Regulation Y generally does not permit BHCs to take delegated authority. or make delivery of nonfinancial commodities. By order of the Board of Governors, effective Octo- The BHC Act, as amended by the Gramm-Leach-Bliley ber 16, 2003. Act ("GLB Act"), permits a BHC to engage in activities that the Board had determined were closely related to Voting for this action: Chairman Greenspan, Vice Chairman Fergu- banking, by regulation or order, prior to November 12, son, and Governors Gramlich, Bies, Olson, Bernanke, and Kohn. 1999.4 The BHC Act permits a FHC to engage in a broad range of activities that are defined in the statute to be ROBERT DEV. FRIERSON financial in nature.5 Moreover, the BHC Act allows FHCs Deputy Secretary of the Board to engage in any activity that the Board determines, in consultation with the Secretary of the Treasury, to be Orders Issued Under Section 4 of the Bank Holding financial in nature or incidental to a financial activity.6 Company Act Citigroup Inc. New York, New York 1. Citigroup's grandfather rights expire on October 8, 2003. Citigroup originally acquired its interest in Phibro in October 1998 in Order Approving Notice to Engage in Activities connection with the merger between Travelers and Citicorp. See Travelers Group Inc., 84 Federal Reserve Bulletin 985 (1998). Complementary to a Financial Activity 2. State member banks may own, for example, investment-grade corporate debt securities, U.S. government and municipal securities, 13. The commenter also complained that some Wells Fargo cus- foreign exchange, and certain precious metals. tomers were required to travel to Queens, New York, after Wells 3. These derivative contracts would include instruments based on, Fargo closed an office of its nonbank subsidiary, Island Finance Credit for example, energy-related and agricultural commodities. Services, Inc. ("Island Finance"), a consumer finance company 4. 12 U.S.C. § 1843(c)(8). located in Bronx, New York. Island Finance has since ceased opera- 5. The Board determined by regulation before November 12, 1999, tions in the continental United States, Alaska, and Hawaii. However, that engaging as principal in Commodity Derivatives, subject to Wells Fargo continues to offer credit products in New York City, certain restrictions, was closely related to banking. Accordingly, including the Bronx, through offices of its subsidiary, Wells Fargo engaging as principal in BHC-permissible Commodity Derivatives is Home Mortgage, Inc., Des Moines, Iowa. The commenter raised other a financial activity for purposes of the BHC Act. See 12 U.S.C. concerns about Wells Fargo that have been addressed in the Pacific §1843(k)(4)(F). Northwest Order. 6. 12 U.S.C. §1843(k)(l)(A). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 509 In addition to these provisions, the BHC Act permits tions, a FHC would be able to use Commodity Trading FHCs to engage in any activity that the Board (in its sole Activity authority to take a Commodity Derivative to discretion) determines is complementary to a financial physical settlement rather than terminating, assigning, offactivity and does not pose a substantial risk to the safety or setting, or otherwise cash-settling the contract. soundness of depository institutions or the financial system The Board also notes that Citigroup contends that the generally.7 This authority is intended to allow the Board to existing restrictions of Regulation Y place FHCs at a permit FHCs to engage on a limited basis in an activity that significant bargaining disadvantage when operating in appears to be commercial rather than financial in nature, physically settled over-the-counter ("OTC") derivatives but that is meaningfully connected to a financial activity markets. According to Citigroup, counterparties to FHCs in such that it complements the financial activity.8 these markets are aware of the regulatory impediments that The only limitations on this complementary authority inhibit FHCs from taking derivative contracts to physical are that, in addition to finding a connection between the settlement. As a consequence, FHCs that participate in nonfinancial activity and a financial activity conducted by these markets can be forced to terminate or offset their the FHC, the Board must determine that the nonfinancial derivative contracts on uneconomic terms. In Citigroup's activity does not pose unacceptable risks to the safety and view, allowing FHCs to engage in Commodity Trading soundness of the FHC, its subsidiary depository institu- Activities would permit FHCs to compete in physically tions, or the U.S. financial system. The safety and sound- settled OTC derivatives markets more economically. ness requirement was added as part of a compromise in Moreover, authorizing Commodity Trading Activities which Congress rejected requests to allow unrestricted would enhance the ability of FHCs to efficiently provide a affiliations between depository institutions and nonfinan- full range of commodity-related services to their customcial companies. Moreover, the BHC Act provides that any ers. Granting FHCs increased flexibility to buy and sell FHC seeking to engage in a complementary activity must commodities in the spot market and to physically settle obtain the Board's prior approval under section 4(j) of the Commodity Derivatives likely would benefit customers by BHC Act. In reviewing such a proposal, the BHC Act enabling FHCs to transact more efficiently with customers requires the Board to consider whether performance of the in a wider variety of commodity markets and transaction activity by the FHC can reasonably be expected to produce formats. Approving Commodity Trading Activities as a public benefits that outweigh possible adverse effects.9 complementary activity also would enable FHCs to acquire As noted above, Citigroup has requested that the Board more experience in the markets for physical commodities expand the authority of FHCs to purchase and sell com- and thereby improve their understanding of commodity modities in the spot market and to take and make delivery derivatives markets and the profitability of their existing of physical commodities to settle Commodity Derivatives BHC-permissible commodity derivatives businesses. ("Commodity Trading Activities"). Commodity Trading It is also important to note that a number of non-BHC Activities substantially involve the commercial activities participants in the commodity derivatives markets, includof physically owning and disposing of assets such as oil, ing diversified financial companies, conduct Commodity natural gas, agricultural products, and other nonfinancial Trading Activities in connection with their commodity commodities. Moreover, the risks associated with conduct- derivatives business. These companies can, and regularly ing these activities are commercial risks not traditionally do, buy and sell commodities in the spot market and incurred or managed to a material extent by banking orga- physically settle commodity derivative contracts. Permitnizations. Accordingly, the Board does not believe that ting FHCs to engage in Commodity Trading Activities in Commodity Trading Activities may be construed at this connection with their commodity derivatives business time as incidental to a financial activity within the meaning would, therefore, enable FHCs to offer services that are of the GLB Act. The Board concludes, however, for the provided by a number of other financial intermediaries. reasons set forth below, that there is a reasonable basis for Based on the foregoing and all other facts of record, construing these activities as complementary to a financial the Board concludes that Commodity Trading Activities activity within the meaning of the GLB Act. involving a particular commodity complement the finan- A number of considerations support a Board determina- cial activity of engaging regularly as principal in BHCtion that Commodity Trading Activities are complemen- permissible Commodity Derivatives based on that tary to a financial activity. First, Commodity Trading commodity.10 Activities flow from the existing financial activities of As noted above, in order to authorize Citigroup to FHCs. In particular, Commodity Trading Activities would engage in Commodity Trading Activities as a complemenprovide FHCs with an alternative method of fulfilling their tary activity under the GLB Act, the Board also must obligations under otherwise BHC-permissible Commodity determine that the activities do not pose a substantial risk Derivatives. For example, if warranted by market condi- to the safety or soundness of depository institutions or the U.S. financial system generally.11 In addition, the Board 7. 12 U.S.C. § 1843(k)(l)(B). 8. See 145 Cong. Rec. H11529 (daily ed. Nov. 4,1999) (Statement 10. For example, Commodity Trading Activities involving all types of Chairman Leach) ("It is expected that complementary activities of crude oil would be complementary to engaging regularly as princiwould not be significant relative to the overall financial activities of pal in BHC-permissible Commodity Derivatives based on Brent crude the organization."). oil. 9. 12 U.S.C. § 1843(j)(2)(A). 11. 12 U.S.C. §1843(k)(l)(B). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

510 Federal Reserve Bulletin • December 2003 must determine that the performance of Commodity Trad- environmental risks. To minimize these risks, Citigroup ing Activities by Citigroup "can reasonably be expected to would not be authorized to produce benefits to the public, such as greater convenience, (i) Own, operate, or invest in facilities for the extraction, increased competition, or gains in efficiency, that outweigh transportation, storage, or distribution of commodities; possible adverse effects, such as undue concentration of or resources, decreased or unfair competition, conflicts of (ii) Process, refine, or otherwise alter commodities. In interests, or unsound banking practices." 12 conducting its Commodity Trading Activities, Citi- In order to limit the potential safety and soundness risks group will be expected to use appropriate storage and of Commodity Trading Activities, Citigroup has proposed transportation facilities owned and operated by third to engage in only a limited amount of Commodity Trading parties.15 Activities. As a condition of this order, the market value of commodities held by Citigroup as a result of Commodity Citigroup has indicated that it will mandate that Trading Activities must not exceed 5 percent of Citi- commodity storage facilities used by Citigroup have all group's consolidated tier 1 capital.13 Citigroup also must required governmental permits and provide to Citigroup a notify the Federal Reserve Bank of New York if the market certificate to that effect. Citigroup has further stated that value of commodities held by Citigroup as a result of its all commodity storage facilities will be inspected by or Commodity Trading Activities exceeds 4 percent of its on behalf of Citigroup before use and that Citigroup will tier 1 capital. physically inspect any commodity in storage every six In addition, Citigroup may take and make delivery only months. of physical commodities for which derivative contracts In addition, Citigroup has indicated that it will adopt have been approved for trading on a U.S. futures exchange additional standards for Commodity Trading Activities that by the Commodity Futures Trading Commission involve environmentally sensitive products, such as oil or ("CFTC") (unless specifically excluded by the Board) or natural gas. For example, Citigroup will require that the which have been specifically approved by the Board.14 owner of every vessel that carries oil on behalf of Citi- This requirement is designed to prevent Citigroup from group be a member of a protection and indemnity club and becoming involved in dealing in finished goods and other carry the maximum insurance for oil pollution available items, such as real estate, that lack the fungibility and from the club. Citigroup also will require every such vessel liquidity of exchange-traded commodities. to carry substantial amounts of additional oil pollution Permitting Citigroup to engage in the limited amount insurance from creditworthy insurance companies. Furtherand types of Commodity Trading Activities described more, Citigroup will place age limitations on vessels and above does not appear to pose a substantial risk to Citi- will require vessels to be approved by a major international group, its subsidiary depository institutions, or the U.S. oil company and have appropriate oil spill response plans financial system generally. Through its existing authority and equipment. Moreover, Citigroup will have a compreto engage in Commodity Derivatives, Citigroup already hensive backup plan in the event any vessel owner fails to may incur market risk associated with commodities. Per- respond adequately to an oil spill and will hire inspectors mitting Citigroup to buy and sell commodities in the spot to monitor the loading and discharging of vessels. market or physically settle Commodity Derivatives would Citigroup also has represented that it will have in place not appear to increase significantly the organization's specific policies and procedures for the storage of oil. In potential exposure to commodity price risk. addition to the general policies set forth above, Citigroup Adding Commodity Trading Activities would, however, will require all oil storage facilities it uses to carry a expose Citigroup to additional risks, including, but not significant amount of oil pollution insurance from a creditlimited to, storage risk, transportation risk, and legal and worthy insurance company and to have appropriate spill response plans and equipment. Citigroup also will have a 12. 12 U.S.C. §1843(j). comprehensive backup plan in the event the storage facility 13. Citigroup would be required to include in this 5 percent limit the market value of any commodities held by Citigroup as a result of owner fails to respond adequately to an oil spill. a failure of its reasonable efforts to avoid taking delivery under sec- Finally, Citigroup and its Commodity Trading Activities tion 225.28(b)(8)(ii)(B) of Regulation Y. In the past, the market value will remain subject to the general securities, commodities, of commodities held by BHCs as a result of an inability to avoid and energy laws and the rules and regulations (including delivery on Commodity Derivatives has not been material. the antifraud and antimanipulation rules and regulations) of 14. The particular commodity derivative contract that Citigroup takes to physical settlement need not be exchange-traded, but (in the the Securities and Exchange Commission, the CFTC, and absence of specific Board approval) futures or options on futures on the Federal Energy Regulatory Commission. the commodity underlying the derivative contract must have been The Board believes that Citigroup has the managerial approved for exchange trading by the CFTC. expertise and internal control framework to manage the The CFTC publishes annually a list of the CFTC-approved comrisks of taking and making delivery of physical commodimodity contracts. See Commodity Futures Trading Commission, FY 2002 Annual Report to Congress 124. With respect to granularity, the Board intends this requirement to permit Commodity Trading Activities involving all types of a listed commodity. For example, 15. Approving Commodity Trading Activities as a complementary Commodity Trading Activities involving any type of coal or coal activity, subject to limits and conditions, would not in any way restrict derivative contract would be permitted, even though the CFTC list the existing authority of Citigroup to deal in foreign exchange, prespecifically approves only Central Appalachian coal. cious metals, or any other bank-eligible commodity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 511 ties. In addition, Citigroup has the expertise and internal JPMorgan Chase Bank ("JPMCB"), a state member bank, controls to integrate effectively the risk management of has applied under section 18(c) of the Federal Deposit Commodity Trading Activities into Citigroup's overall risk Insurance Act (12 U.S.C. § 1828(c)) ("Bank Merger Act") management framework, including managing on a consoli- to acquire certain trust deposits from Bank One, National dated basis Citigroup's overall exposure arising from Association (Ohio), Bank One Trust Company, National commodity-related activities. Association, both in Columbus, Ohio, and Bank One, Approval of the proposal likely would benefit Citi- National Association (Chicago), Chicago, Illinois (the group's customers by enhancing the ability of Citigroup "Bank One Banks").1 to provide efficiently a full range of commodity-related Notice of the transaction, affording interested persons an services. Approving Commodity Trading Activities for opportunity to submit comments, has been given in accor- Citigroup also would enable the company to improve its dance with the Bank Merger Act and the Board's Rules of understanding of physical commodity and commodity Procedure (12 C.F.R. 262.3(b)). The time for filing comderivatives markets and its ability to serve as an effective ments has expired, and the Board has considered the procompetitor in physical commodity and commodity deriva- posal and all comments received in light of the factors set tives markets. forth in the Bank Merger Act. For these reasons, and based on Citigroup's policies and JPMCB, with total assets of $662 billion, is a wholly procedures for monitoring and controlling the risks of owned subsidiary of J.P. Morgan Chase & Co., New York, Commodity Trading Activities, the Board concludes that New York, the second largest banking organization in the consummation of the proposal does not pose a substantial United States, with total assets of $803 billion. The Bank risk to the safety and soundness of depository institutions One Banks are subsidiaries of the Bank One Corporation, or the financial system generally and can reasonably be also in Chicago, the sixth largest banking organization in expected to produce benefits to the public that outweigh the United States, with total assets of $299 billion. JPMCB any potential adverse effects. proposes to acquire certain trust relationships and related Based on all the facts of record, including the representa- trust deposits from the Bank One Banks. tions and commitments made by Citigroup in connection with the notice, and subject to the terms and conditions set Competitive Considerations forth in this order, the Board has determined that the notice should be, and hereby is, approved. The Board's determi- The Bank Merger Act prohibits the Board from approving nation is subject to all the conditions set forth in Regula- an application if the proposal would result in a monopoly tion Y, including those in section 225.7 (12 C.F.R. 225.7), or would be in furtherance of any attempt to monopoand to the Board's authority to require modification or lize the business of banking.2 The Bank Merger Act also termination of the activities of a BHC or any of its subsidi- prohibits the Board from approving a proposal that aries as the Board finds necessary to ensure compliance would substantially lessen competition or tend to create a with, or to prevent evasion of, the provisions and purposes monopoly in any relevant market, unless the Board finds of the BHC Act and the Board's regulations and orders that the anticompetitive effects of the proposed transaction issued thereunder. The Board's decision is specifically are clearly outweighed in the public interest by the probconditioned on compliance with all the commitments made able effects of the transaction in meeting the convenience in connection with the notice, including the commitments and needs of the communities to be served.3 and conditions discussed in this order. The commitments The Board has reviewed the competitive effects of the and conditions relied on in reaching this decision shall be proposal in the relevant markets in light of all the facts of deemed to be conditions imposed in writing by the Board record, including the number of competitors that would in connection with its findings and decision and, as such, remain in the markets, the relative market shares of may be enforced in proceedings under applicable law. JPMCB and the Bank One Banks, and other characteristics By order of the Board of Governors, effective October 2, of the markets. The proposed acquisition would have no 2003. adverse effect on the concentration of banking resources in any relevant banking market. Moreover, the Board has Voting for this action: Chairman Greenspan, Vice Chairman Fergu- received no objections to the proposal from the Departson, and Governors Gramlich, Bies, Olson, and Bernanke. Absent and ment of Justice or the other federal banking agencies. In not voting: Governor Kohn. light of all the facts of record, the Board concludes that consummation of the proposed transaction would not result ROBERT DEV. FRIERSON in a significantly adverse effect on competition or on the Deputy Secretary of the Board 1. The proposal is part of a larger transaction that also involves ORDERS ISSUED UNDER BANK MERGER ACT the acquisition of trust appointments from the Bank One Banks by J.P. Morgan Trust Company, National Association, Los Angeles, JP Morgan Chase Bank California ("IPMTC"). JPMTC has applied to the Office of the Comptroller of the Currency ("OCC") for prior approval of that New York, New York portion of the transaction. 2. 12 U.S.C. § 1828(c)(5)(A). Order Approving Acquisition of Trust Deposits 3. 12 U.S.C. § 1828(c)(5)(B). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

512 Federal Reserve Bulletin • December 2003 concentration of banking resources in any relevant banking Mortgage Disclosure Act ("HMDA"),7 that CMMC, a market, and that competitive factors are consistent with subsidiary of JPMCB,8 denied home mortgage loan appliapproval. cations from minorities more frequently than it denied applications from nonminorities in certain Metropolitan Financial and Managerial Factors Statistical Areas ("MSAs").9 The Bank Merger Act requires the Board to consider the A. Record of Performance under the CRA financial and managerial resources and future prospects of the institutions involved in this proposal. The Board has As provided in the CRA, the Board has evaluated the reviewed these factors in light of all the facts of record, convenience and needs factor in light of examinations including supervisory reports of examination assessing the by the appropriate federal supervisors of the CRA perforfinancial and managerial resources of JPMCB, information mance records of the relevant insured depository instituprovided by JPMCB, and public comments on the pro- tions. An institution's most recent CRA performance posal.4 In light of the managerial record of JPMCB and the evaluation is a particularly important consideration in the small size of the transaction relative to JPMCB's total applications process because it represents a detailed, deposits and assets, and based on all the facts of record, the on-site evaluation of the institution's overall record of Board concludes that the financial and managerial performance under the CRA by its appropriate federal resources and future prospects of the institutions involved supervisor.10 are consistent with approval of the proposal. JPMCB received an "Outstanding" rating at its most recent examination for CRA performance by the Federal Convenience and Needs Considerations Reserve Bank of New York, as of July 9, 2001.11 Examiners noted that JPMCB had excellent levels of community development lending and qualified investments and was In acting on a proposal under the Bank Merger Act, the considered a leader in providing community development Board is required to consider the effects of the proposal on services. the convenience and needs of the communities to be served.5 The Community Reinvestment Act ("CRA") requires the federal financial supervisory agencies to B. HMDA Data and Fair Lending Record encourage financial institutions to help meet the credit needs of local communities in which they operate, consis- The Board has carefully considered the lending records of, tent with safe and sound operation, and requires the appro- and HMDA data reported by, JPMCB, CMMC, and Chase priate federal financial supervisory agency to take into USA in light of the comments received.'2 The commenter account an institution's record of meeting the credit needs alleged, based on 2002 HMDA data, that CMMC disproof its entire community, including low- and moderate- portionately excluded or denied African-American and income ("LMI") neighborhoods, in evaluating a proposal Hispanic applicants for home mortgage loans in the Benton under the Bank Merger Act.6 Harbor MI; Boston, MA; Dallas, TX; Detroit, MI; Raleigh, NC; Richmond, VA; San Francisco, CA; St. Louis, MO; The Board has carefully considered the convenience and and Washington, DC MSAs.13 The commenter asserted needs factor and the CRA performance records of JPMCB in light of all the facts of record, including public com- 7. 12 U.S.C. §2801 et seq. ments on the proposal. A commenter opposing the pro- 8. CMMC became a subsidiary of JPMCB in March, 2002. Before posal has alleged, based on data submitted under the Home that time, CMMC was a subsidiary of Chase Manhattan Bank USA, N.A., Newark, Delaware ("Chase USA"), an affiliate of JPMCB. 9. The commenter also alleged that CMMC's purchase of certain 4. A commenter opposing the proposal cited press reports of mortgage loans on the secondary market enabled predatory lending by J.P. Morgan Chase & Co.'s connection to investigations, lawsuits, and an unaffiliated consumer lender. The Board notes that on discovering settlements relating to Enron Corp., and asserted that these issues that a small number of home mortgage loans acquired by CMMC reflected unfavorably on the managerial resources of JPMCB. The presented appraisal and valuation problems, which caused borrowers Board has considered this comment in light of the measures that to hold mortgages with balances greater than the value of their homes, J.P. Morgan Chase & Co. has taken and is continuing to take to CMMC took remedial steps, including discontinuing its relationship address these matters and strengthen the financial holding company's with the originator of those loans and offering to assist the affected risk-management practices. homeowners by reducing interest rates and principal balances. The commenter also provided press reports of litigation arising 10. See Interagency Questions and Answers Regarding Community from the acquisition of a small number of mortgage loans from a Reinvestment, 66 Federal Register 36,620 and 36,639 (2001). mortgage broker by Chase Manhattan Mortgage Corporation, Edison, 11. In addition, Chase USA received an "Outstanding" rating from New Jersey ("CMMC"), a subsidiary of JPMCB, and asserted that the OCC, as of March 3, 2003. Examiners commended Chase USA's JPMCB and CMMC lacked adequate policies and procedures for community development lending and flexible loan programs and monitoring the acquisition of loans on the secondary market. The noted that Chase USA's responsiveness to the credit and community Board has considered this information in light of the number of loans development needs of its assessment area, through high levels of involved; the information available to the management of JPMCB and qualified investments and grants, was excellent. CMMC at the time; the experience, policies, and procedures of the 12. The Board included data submitted by Chase USA in its review management of JPMCB and CMMC; and confidential supervisory because, as noted above, Chase USA was the parent of CMMC until information. March 2002. 5. 12 U.S.C. § 1828(c)(5). 13. In response, JPMCB noted that the commenter's analysis was 6. 12 U.S.C. §2901 et seq. based on data from only a few MSAs and included only conventional Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 513 that CMMC's denial ratios for minority applicants were conduct comparative file reviews for most of their loan higher than for nonminority applicants, and that those products. JPMCB and CMMC have a secondary review denial disparity ratios compared unfavorably with that of process that includes regression analysis of all applications the aggregate of lenders in the MSAs.14 to identify possible instances or indications of disparate The Board has reviewed data reported by JPMCB, treatment, and JPMCB indicates that when inappropriate CMMC, and Chase USA for all HMDA loans for the underwriting decisions are identified, it takes prompt cortwo-year period beginning January 1, 2001. The denial rective action, including sending offers of credit to indidisparity ratios reflected in the HMDA data reported by viduals whose applications were denied in error. In addi- JPMCB, CMMC, and Chase USA in 2002 generally tion, an independent review team, under the direction of were more favorable than, or comparable with, the ratios the fair lending unit, reviews applications identified by the reported by the aggregate of lenders in nine of the ten regression analysis and reports its findings to the audit markets reviewed. The ratio approximated, but was some- department quarterly. what less favorable than, that of the aggregate in the The Board also has considered the HMDA data in light Boston MSA. of other information, including the CRA performance The HMDA data do not indicate that JPMCB, CMMC, records of JPMCB, Chase Manhattan Bank, and Chase or Chase USA has excluded any segment of the population USA. The Board concludes that, in light of the entire or any geographic area on a prohibited basis. The Board, record, JPMCB's record of performance in helping to serve nevertheless, is concerned when the record of an institution the credit needs of its community is consistent with indicates disparities in lending and believes that all banks approval of the proposal. are obligated to ensure that their lending practices are based on criteria that ensure not only safe and sound Conclusion lending, but also equal access to credit by creditworthy applicants regardless of race or income level. The Board Based on the foregoing and all the facts of record, the recognizes, however, that HMDA data alone provide an Board has determined that the application should be, and incomplete measure of an institution's lending in its com- hereby is, approved. Approval of the application is specifimunity because these data cover only a few categories of cally conditioned on receipt of all required regulatory housing-related lending. HMDA data, moreover, provide approvals. For purposes of this action, the commitments only limited information about covered loans.15 HMDA and conditions relied on in reaching this decision are data, therefore, have limitations that make them an inade- conditions imposed in writing by the Board and, as such, quate basis, absent other information, for concluding that may be enforced in proceedings under applicable law. an institution has not assisted adequately in meeting its The proposal may not be consummated before the fifcommunity's credit needs or has engaged in illegal lending teenth calendar day after the effective date of this order, or discrimination. later than three months after the effective date of this order, Because of the limitations of HMDA data, the Board has unless such period is extended for good cause by the Board considered these data carefully in light of other informa- or by the Federal Reserve Bank of New York, acting tion, including examination reports that provide on-site pursuant to delegated authority. evaluations of compliance with fair lending laws by By order of the Board of Governors, effective Octo- JPMCB and its predecessor bank, Chase Manhattan ber 30, 2003. Bank.16 Examiners found no evidence of prohibited discrimination or other illegal credit practices at JPMCB, Voting for this action: Chairman Greenspan, Vice Chairman Fergu- Chase Manhattan Bank, Chase USA, or CMMC. son, and Governors Gramlich, Bies, Olson, Bernanke, and Kohn. The record also indicates that JPMCB and CMMC have taken several affirmative steps to ensure compliance with JENNIFER J. JOHNSON Secretary of the Board fair lending laws. Management at JPMCB and CMMC home purchase loans originated by CMMC in 2002, and that the sample, therefore, was too small to represent JPMCB's overall mortgage lending performance. 14. The denial disparity ratio equals the denial rate for a particular racial category (for example, African American) divided by the denial rate for whites. 15. The data, for example, do not account for the possibility that an institution's outreach efforts may attract a larger proportion of marginally qualified applicants than other institutions attract and do not provide a basis for an independent assessment of whether an applicant who was denied credit was, in fact, creditworthy. Credit history problems and excessive debt levels relative to income (reasons most frequently cited for a credit denial) are not available from HMDA data. 16. JP Morgan Chase Bank was formed after the merger of Chase Manhattan Bank and Morgan Guaranty Trust Company in the fourth quarter of 2001. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

514 Federal Reserve Bulletin • December 2003 APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Section 3 Applicant(s) Bank(s) Reserve Bank Effective Date 1867 Western Financial Corporation, Central Valley Bancorp, San Francisco October 14, 2003 Stockton, California Modesto, California Modesto Commerce Bank, Modesto, California Bancsouth Financial Corporation, The Bank of the South, Atlanta October 10, 2003 Crystal Springs, Mississippi Crystal Springs, Mississippi Clinton Financial Services, MHC, Clinton Savings Bank, Boston October 10, 2003 Clinton, Massachusetts Clinton, Massachusetts Wachusett Financial Services, Inc., Clinton, Massachuset Community Banks of Georgia, Inc., Community Bank of Pickens County, Atlanta October 23, 2003 Jasper, Georgia Jasper, Georgia Covenant Financial Corporation, Covenant Bank, St. Louis October 23, 2003 Clarksdale, Mississippi Clarksdale, Mississippi Sky Financial Group, Inc., GLB Bancorp, Inc., Cleveland October 3, 2003 Bowling Green, Ohio Mentor, Ohio Great Lakes Bank, Mentor, Ohio Tomah Bancshares, Inc., Wabeno Bancorporation, Inc., Minneapolis October 3, 2003 Tomah, Wisconsin Venice, Florida Timberwood Bank, Wabeno, Wisconsin Trustcompany Bancorp, The Trust Company of New Jersey, New York October 1, 2003 Jersey City, New Jersey Jersey City, New Jersey Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Cedar Investment Company, To engage, de novo, in the permissible Chicago October 23, 2003 Waverly, Iowa nonbanking activity of extending credit and servicing loans Miinchener Riickversicherungs- Hypo Real Estate Holding AG, New York September 29, 2003 Gesellschaft Aktiengesellschaft, Munich, Germany Miinchen, Germany HVB Real Estate Capital Corporation, New York, New York Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 515 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 The Farmers & Merchants Bank, Union Planters Bank, St. Louis October 1, 2003 Stuttgart, Arkansas National Association, Memphis, Tennessee Fifth Third Bank, Fifth Third Bank, Florida, Cleveland October 3, 2003 Grand Rapids, Michigan Naples, Florida Fifth Third Bank, Indiana Indianapolis, Indiana Fifth Third Bank, Kentucky, Louisville, Kentucky Fifth Third Bank, Northern Kentucky, Covington, Kentucky Lafayette Ambassador Bank, Premier Bank, Philadelphia October 3, 2003 Easton, Pennsylvania Doylestown, Pennsylvania Regions Bank, Inter Savings Bank, FSB, Atlanta October 9, 2003 Birmingham, Alabama Edina, Minnesota PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the Albrecht v. Board of Governors, No. 02-5325 (D.C. Cir., Federal Reserve Banks in which the Board of Governors is filed October 18, 2002). Appeal of district court order not named a party. dismissing challenge to the method of funding of the retirement plan for certain Board employees. Diehl McCarthy v. Board of Governors, No. 03-73997 (9th Community Bank & Trust v. United States, No. 01-571C Cir., filed October 28, 2003). Petition for review of an (Ct. Fed. CI., filed October 3, 2001). Action challenging order of prohibition issued by the Board on October 15, on constitutional grounds the failure to pay interest on 2003. reserve accounts held at Federal Reserve Banks. Ulrich v. Board of Governors, No. 03-73854 (9th Cir., filed Artis v. Greenspan, No. 01-CV-0400 (EGS) (D.D.C., com- October 24, 2003). Petition for review of an order of plaint filed February 22, 2001). Employment discrimiprohibition issued by the Board on October 15, 2003. nation action. On August 15, 2001, the district court Tavera v. Von Nothaus, et al., No. 03-763 (D. Oregon, filed consolidated the action with Artis v. Greenspan, No. 99- June 5, 2003). Civil rights action for violation of rights CV-2073 (EGS) (D.D.C., filed August 3, 1999), also an in connection with the plaintiff's prosecution for passing employment discrimination action. "Liberty dollar coins" as lawful money. Fraternal Order of Police v. Board of Governors, Carter v. Greenspan, No. 03-CV-1026 (D.D.C., filed No. 1:98CV03116 (WBB)(D.D.C„ filed December 22, May 9, 2003). Employment discrimination action. 1998). Declaratory judgment action challenging Board Apffel v. Board of Governors, No. 03-343 (S. D. Texas, regulation on labor-management relations at Reserve filed May 20, 2003). Freedom of Information Act case. Banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

516 Federal Reserve Bulletin • December 2003 To Readers of the Legal Developments Section of the Bulletin The materials currently contained in the Legal Develop- ing Act, can also be found at www.federalreserve.gov/ ments section of the Federal Reserve Bulletin are also boarddocs/legaldevelopments/ordersother/. available in various publications, in press releases, and on • Applications approved under the Bank Holding Company the Board's web site. The Board's Legal Developments web Act, the Bank Merger Act, the Federal Reserve Act, and site, launched in September 2002, provides a convenient the International Banking Act are listed in the Board's way of gaining access to material that has been published in weekly H.2 release "Actions of the Board, Its Staff, and the Bulletin for many years. The site is updated as orders the Federal Reserve Banks; Applications and Reports and actions are finalized. Received," which is available in paper copies by subscription from Publications Fulfillment and on the • Selected rulemaking actions (proposed and final) are first Board's web site at www.federalreserve.gov/releases/h2. issued as press releases, which are available on the • Enforcement actions are issued as press releases. Actions Board's web site at www.federalreserve.gov/boarddocs/ since 1997 are available at www.federalreserve.gov/ press/bcreg/2003/. They are then published in the Federal boarddocs/press/enforcement/2003/; actions since 1989 Register (www.gpoaccess.gov/fr/index.html). On the can be located by going to "Enforcement Actions" from Board's site, they can also be found in the Legal Devel- the Banking and Information and Regulation page at opments section of the Banking Information and Reg- www.federalreserve.gov/boarddocs/enforcement/. ulation page at www.federalreserve.gov/boarddocs/ legaldevelopments/rulemaking/. Interested persons may Paper copies of these documents are also available view proposals published for comment and comments upon request from the Board's Freedom of Information received at www.federalreserve.gov/generalinfo/foia/ Office. Requests may be submitted by facsimile (202-872- ProposedRegs.cfm. Comments on proposals may also be 7565); online at www.federalreserve.gov/generalinfo/foia/ submitted through this web site, by electronic mail, or in request.cfm; or by mail to the Secretary, Board of Govwriting. ernors of the Federal Reserve System, Freedom of • Board orders issued under the Bank Holding Company Information Office, Washington, DC 20551. Act, the Bank Merger Act, the Federal Reserve Act, and Pending cases are listed in the Board's Annual Report the International Banking Act are issued as attachments in the "Litigation" chapter and on the web site at to press releases, which are available from 1996 on the www.federalreserve.gov/boarddocs/legaldevelopments/ Board's web site at www.federalreserve.gov/boarddocs/ cases.htm. press/orders/2003/. Board orders issued under the Because it is available elsewhere in a more timely fash- Bank Holding Company Act can also be found at ion, much of the material currently being published in the www.federalreserve.gov/boarddocs/legaldevelopments/ Legal Developments section of the Bulletin will no longer ordersbhc/. Board orders issued under the Bank Merger be included in the Bulletin when it becomes a quarterly. Act, the Federal Reserve Act, and the International Bank- Only Board orders will be included. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A] 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 dealers—Transactions A4 Reserves and money stock measures A5 Reserves of depository institutions and Reserve Bank All U.S. government securities dealers— Positions and financing credit A28 Federal and federally sponsored credit A6 Reserves and borrowings—Depository agencies—Debt outstanding institutions Securities Markets and Corporate Finance Policy Instruments A29 New security issues—Tax-exempt state and local A7 Federal Reserve Bank interest rates governments and U.S. corporations A8 Reserve requirements of depository institutions A30 Open-end investment companies—Net sales A9 Federal Reserve open market transactions and assets A30 Domestic finance companies—Assets and liabilities Federal Reserve Banks A31 Domestic finance companies—Owned and managed A10 Condition and Federal Reserve note statements receivables All Maturity distribution of loans and securities Real Estate Monetary and Credit Aggregates A3 2 Mortgage markets—New homes A12 Aggregate reserves of depository institutions A3 3 Mortgage debt outstanding and monetary base A13 Money stock measures Consumer Credit A34 Total outstanding Commercial Banking Institutions— A34 Terms Assets and Liabilities A15 All commercial banks in the United States Flow of Funds 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

45 Federal Reserve Bulletin • December 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 A44 US. reserve assets A45 Foreign official assets held at Federal Reserve Interest and Exchange Rates Banks A56 Foreign exchange rates A45 Selected U.S. liabilities to foreign official institutions A57 GUIDE TO SPECIAL TABLES AND STATISTICAL RELEASES Reported by Banks in the United States A45 Liabilities to, and claims on, foreigners A58 INDEX TO STATISTICAL TABLES A46 Liabilities to foreigners A48 Banks' own claims on foreigners A49 Banks' own and domestic customers' claims on foreigners Reported by Nonbanking Business Enterprises in the United States A50 Liabilities to unaffiliated foreigners A52 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-7 Group of Seven e Estimated G-10 Group of Ten n.a. Not available GDP Gross domestic product n.e.c. Not elsewhere classified GNMA Government National Mortgage Association P Preliminary GSE Government-sponsored enterprise r Revised (Notation appears in column heading HUD Department of Housing and Urban when about half the figures in the column have Development been revised from the most recently published IMF International Monetary Fund table.) IOs Interest only, stripped, mortgage-backed securities * Amount insignificant in terms of the last decimal IPCs Individuals, partnerships, and corporations place shown in the table (for example, less than IRA Individual retirement account 500,000 when the smallest unit given is in millions) MMDA Money market deposit account 0 Calculated to be zero MSA Metropolitan statistical area Cell not applicable NAICS North American Industry Classification System ABS Asset-backed security NOW Negotiable order of withdrawal ATS Automatic transfer service OCDs Other checkable deposits BIF Bank insurance fund OPEC Organization of Petroleum Exporting Countries CD Certificate of deposit OTS Office of Thrift Supervision CMO Collateralized mortgage obligation PMI Private mortgage insurance CRA Community Reinvestment Act of 1977 POs Principal only, stripped, mortgage-backed securities FAMC Federal Agricultural Mortgage Corporation REIT Real estate investment trust FFB Federal Financing Bank REMICs Real estate mortgage investment conduits FFIEC Federal Financial Institutions Examination Council 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 GENERAL INFORMATION In many of the tables, components do not sum to totals because of include not fully guaranteed issues) as well as direct obligarounding. tions of the U.S. Treasury. Minus signs are used to indicate (1) a decrease, (2) a negative "State and local government" also includes municipalities, figure, or (3) an outflow. special districts, and other political subdivisions. "U.S. government securities" may include guaranteed issues of U.S. government agencies (the flow of funds figures also Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic Nonfinancial Statistics • December 2003 1.10 RESERVES AND MONEY STOCK MEASURES Percent annual rate of change, seasonally adjusted1 2002 2003 2003 MMoonneettaarryy oorr ccrreeddiitt aaggggrreeggaattee Q4 QI Q2 Q3 May June Julyr Aug.1" Sept. Reserves of depository institutions2 I Total 1.0 11.3 6.7 34.0 5.3 53.0 31.7 64.3 -34.2 2 Required -1.4 11.4 8.1 28.1 2.8 48.0 31.1 14.7 26.5 3 Nonborrowed 1.9 12.8 6.2 32.8 4.5 49.9 32.7 59.1 -30.6 4 Monetary base3 5.1 7.6 5.9 4.1 5.1 3.4 .6 9.7 3.4 Concepts of money* 5 Ml 4.9 7.5 9.2 8.9 20.3 13.3 5.5 7.3 2.0 6 M2 7.0 6.4 8.5r 9.0 18.lr 9.1' 10.1 8.4 -4.4 7 M3 7.8 5.6 6.4r 9.9 13. r 93' 17.8 3.4 -2.9 Nontransaction components 8 In M25 7.6 6.0 8.4r 9.0 17.5r 8.8r 11.3 8.8 -6.1 9 In M3 only6 9.5 3.9 1.8 12.0 2.2 8.2 34.9 -7.6 .2 Time and savings deposits Commercial banks 10 Savings, including MMDAs 16.8 13.6 16.5 20.5 23.5 21.5 28.3 19.1 -7.3 11 Small time7 -7.4 -7.1 -8.6 -14.8 -10.2 -10.9 -19.1 -16.6 -12.7 12 Large time8'9 -5.6 -4.5 2.1 30.2 7.0 -6.6 96.4 -3.9 -2.3 Thrift institutions 13 Savings, including MMDAs 20.0 21.9 24.6 21.0 40.5 13.2 21.5 22.2 10.5 14 Small time7 -6.0 -6.6 -9.0 -14.0 -11.8 -13.2 -14.6 -16.8 -12.0 15 Large time8 11.9 8.9 -2.1 16.4 -10.2 11.3 34.6 16.8 -2.9 Money market mutual funds 16 Retail -6.3 -9.9' -1.2' -7.1 10.7r -6.2r -12.5 -6.3 -12.2 17 Institution-only 2.1 -4.9 -14.7 12.5 -20.1 20.3 42.1 -19.6 6.1 Repurchase agreements and eurodollars 18 Repurchase agreements10 47.7 31.4 27.8 -17.2 19.3 6.3 -57.9 -8.5 4.9 19 Eurodollars10 28.9 19.2 32.0r 18.5 62.8r -1.8 26.9 26.7 -26.1 1. Unless otherwise noted, rates of change are calculated from average amounts outstand- time deposits, and retail money fund balances, each seasonally adjusted separately, and ing during preceding month or quarter. adding this result to seasonally adjusted M1. 2. Figures incorporate adjustments for discontinuities, or "breaks," associated with regula- M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more), (2) tory changes in reserve requirements (See also table 1.20.) balances in institutional money funds, (3) RP liabilities (overnight and term) issued by all 3. The seasonally adjusted, break-adjusted monetary base consists of (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 daily figures Average of daily figures for week ending on date indicated Factor 2003 2003 July Aug. Sept. Aug. 13 Aug. 20 Aug. 27 Sept. 3 Sept. 10 Sept. 17 Sept. 24 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 716,576 718,212 720,656 711,824 726,539 715,403 725,308 715,281 721,655 717,606 2 Securities held outright 652,630 653,374 655,412 653,072 653,446 653,644 653,881 654,525 655,767 655,990 U.S. Treasury2 652,620 653,364 655,402 653,062 653,436 653,634 653,871 654,515 655,757 655,980 4 Bills3 239,480 240,227 241,209 239,927 240,298 240,492 240,726 240,969 241,183 241,402 Notes and bonds, nominal3 398,853 398,853 399,372 398,853 398,853 398,853 398,853 398,959 399,595 399,595 6 Notes and bonds, inflation-indexed3 12,814 12,814 13,305 12,814 12,814 12,814 12,814 13,089 13,454 13,454 7 Inflation compensation4 1,473 1,470 1,516 1,467 1,471 1,474 1,478 1,499 1,525 1,529 8 Federal agency3 10 10 10 10 10 10 10 10 10 10 9 Repurchase agreements5 24,153 25,774 26,800 17,679 34,071 24,607 34,429 22,821 27,893 22,286 10 Loans to depository institutions 114 330 184 145 937 157 166 158 162 236 11 Primary credit 5 168 25 7 719 1 9 3 4 73 12 Secondary credit 0 15 0 0 66 0 0 0 0 0 N Seasonal credit 109 147 159 138 152 156 157 155 158 163 14 Float 147 346 -13 595 842 160 -490 308 -233 286 15 Other Federal Reserve assets 39,532 38,387 38,273 40,334 37,243 36,834 37,323 37,468 38,066 38,809 16 Gold stock 11,044 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 35,104 35,188' 35,268 35,168' 35,191' 35,214' 35,237 35,251 35,265 35,279 ABSORBING RESERVE FUNDS 19 Currency in circulation 694,590 695,356R 697,197 694,989' 694,728' 694,765' 700,111 698,503 696,235 695,980 20 Reverse repurchase agreements6 20,180 19,541 20,312 19,563 20,106 19,223 20,022 19,345 20,445 20,545 21 Foreign official and international accounts 20,180 19,541 20,312 19,563 20,106 19,223 20,022 19,345 20,445 20,545 22 Dealers 0 0 0 0 0 0 0 0 0 0 23 Treasury cash holdings 334 354 337 369 355 338 335 337 333 336 24 Deposits with Federal Reserve Banks, other than reserve balances 17,943 17,322 18,206 17,205 17,518 17,612 16,790 16,676 18,064 19,405 25 U.S. Treasury, general account 6,213 5,599 6,206 5,611 5,644 5,974 4,843 4,745 6,084 7,540 26 Foreign official 224 151 272 149 238 86 248 261 229 102 27 Service-related 11,192 11,280 11,467 11,157 11,331 11,246 11,455 11,392 11,481 11,494 28 Required clearing balances 10,864 10,909 11,191 10,912 10,912 10,910 10,912 11,219 11,219 11,226 29 Adjustments to compensate for float 327 372 276 245 419 337 543 173 262 268 30 Other 315 292 261 287 304 306 244 279 269 270 31 Other liabilities and capital 19,956 20,112 20,639 20,190 20,304 19,997 20,194 20,451 20,588 20,755 32 Reserve balances with Federal Reserve Banks7 .... 11,921 13,958 12,477 7,919 21,963 11,924 16,336 8,463 14,498 9,107 End-of-month figures Wednesday figures July Aug. Sept. Aug. 13 Aug. 20 Aug. 27 Sept. 3 Sept. 10 Sept. 17 Sept. 24 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 721,467 726,172 732,550 715,472 730,576 718,942 726,556 716,178 722,549 720,499 2 Securities held outright 652,913 653,909 656,126 653,288 653,526 653,681 653,941 655,602 655,953 656,003 3 U.S. Treasury2 652,903 653,899 656,116 653,278 653,516 653,671 653,931 655,592 655,943 655,993 4 Bills3 239,773 240,754 241,533 240,142 240,376 240,528 240,785 241,020 241,367 241,414 5 Notes and bonds, nominal3 398,853 398,853 399,595 398,853 398,853 398,853 398,853 399,595 399,595 399,595 6 Notes and bonds, inflation-indexed3 12,814 12,814 13,454 12,814 12,814 12,814 12,814 13,454 13,454 13,454 7 Inflation compensation4 1,462 1,478 1,533 1,469 1,472 1,476 1,479 1,523 1,526 1,530 8 Federal agency3 10 10 10 10 10 10 10 10 10 10 9 Repurchase agreements5 29,000 35,000 37,500 19,000 39,500 29,000 33,250 22,500 29,250 26,000 10 Loans to depository institutions 145 158 174 164 262 161 180 155 165 341 11 Primary credit 11 0 21 16 105 2 27 0 2 172 12 Secondary credit 0 0 0 0 0 0 0 0 0 0 13 Seasonal credit 133 158 154 148 157 159 153 154 162 170 14 Float -195 -265 -496 2,583 499 -458 1,995 134 -1,048 -974 15 Other Federal Reserve assets 39,605 37,371 39,246 40,438 36,789 36,558 37,189 37,788 38,229 39,128 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 35,145 35,237' 35,293 35,168' 35,191' 35,214' 35,237 35,251 35,265 35,279 ABSORBING RESERVE FUNDS 19 Currency in circulation 694,073 700,139' 698,144 695,939' 695,686' 697,414' 701,257 698,130 697,013 697,408 20 Reverse repurchase agreements6 19,827 20,190 24,983 19,138 20,344 19,119 18,757 19,719 18,972 18,801 21 Foreign official and international accounts 19,827 20,190 24,983 19,138 20,344 19,119 18,757 19,719 18,972 18,801 22 Dealers 0 0 0 0 0 0 0 0 0 0 23 Treasury cash holdings 364 335 341 358 338 335 338 333 335 341 24 Deposits with Federal Reserve Banks, other than reserve balances 18,219 16,350 19,046 17,683 18,246 17,050 16,906 16,798 19,270 18,674 25 U.S. Treasury, general account 6,356 4,589 7,224 5,720 6,533 5,441 4,525 5,039 7,247 6,837 26 Foreign official 318 81 82 525 81 81 686 80 270 82 27 Service-related 11,288 11,455 11,515 11,157 11,331 11,246 11,455 11,392 11,481 11,494 28 Required clearing balances 10,898 10,912 11,225 10,912 10,912 10,910 10,912 11,219 11,219 11,226 29 Adjustments to compensate for float 390 543 290 245 419 337 543 173 262 268 30 Other 258 225 224 281 301 282 240 287 272 262 31 Other liabilities and capital 19,674 20,251 21,164 20,043 19,884 19,912 20,080 20,347 20,225 20,648 32 Reserve balances with Federal Reserve Banks7 .... 17,696 17,387 17,409 10,722 24,511 13,570 17,697 9,345 15,242 13,149 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 U.S. 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 Nonfinancial Statistics • December 2003 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 2000 2001 2002 2003 Dec. Dec. Dec. Mar. Apr. May June July Aug. Sept. 1 Reserve balances with Reserve Banks2 7,022 9,053 9,926 9,840 10,598 11,405 11,297 12,157 14,107 12,470 2 Total vault cash3 45,246 43,918 43,368 43,088 41,991 41,636 41,961 42,657 43,034 43,079 3 Applied vault cash4 31,451 32,024 30,347 30,757 30,574 30,395 30,574 31,437 31,978r 31,940 4 Surplus vault cash5 13,795 11,894 13,021 12,331 11,417 11,241 11,386 11,220 1 l,056r 11,138 Total reserves6 38,473 41,077 40,274 40,597 41,172 41,801 41,872 43,594 46,084r 44,410 6 Required reserves 37,046 39,428 38,264 38,961 39,640 40,182 40,018 41,671 42,32 lr 42,905 7 Excess reserve balances at Reserve Banks7 1,427 1,649 2,009 1,636 1,532 1,619 1,854 1,924 3,763r 1,505 8 Total borrowing at Reserve Banks 210 67 80 22 29 55 161 130 329 181 9 Primary 14 8 3 87 21 168 23 10 Secondary 0 0 0 0 0 15 0 1 1 Seasonal 111 33 45 8 21 53 74 110 146 158 12 Adjustment 99 34 35 Biweekly averages of daily figures for two-week periods ending on dates indicated 2003 May 28 June 11 June 25 July 9 July 23 Aug. 6 Aug. 20 Sept. 3' Sept. 17 Oct. 1 1 Reserve balances with Reserve Banks2 13,116 11,050 11,437 11,453 12,644 12,099 14,940 14,141 11,506 13,122 ?, Total vault cash3 41,968 41,040 42,303 43,030 41,789 43,758 43,490 42,060 42,327 44,125 3 Applied vault cash4 31,211 29,854 30,798 31,534 30,545 32,890 31,551r 32,024 30,948 32,990 4 Surplus vault cash5 10,758 11,186 11,505 11,497 11,244 10,869 1 l,939r 10,036 11,379 11,135 5 Total reserves6 44,326 40,904 42,235 42,986 43,189 44,988 46,491' 46,165 42,454 46,112 6 Required reserves 42,712 38,909 40,631 40,744 41,601 42,836 40,805' 43,971 41,541 44,129 7 Excess reserve balances at Reserve Banks7 1,614 1,994 1,604 2,242 1,588 2,152 5,686' 2,194 913 1,983 8 Total borrowing at Reserve Banks 58 69 241 144 117 140 541 162 160 207 9 Primary 2 7 163 54 5 11 363 5 4 48 10 Secondary 0 0 0 0 1 0 33 0 0 0 11 Seasonal 56 63 78 90 111 129 145 157 157 159 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 credit1 Secondary credit2 Seasonal credit Federal Reserve Bank On On On 11/14/03 11/14/03 11/14/03 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 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 November 14, 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 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 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 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 5.00 5.00 21 4.50 4.50 2002—Nov. 61 . ... .. 0.75-1.25 0.75 Apr. 18 4.00^.50 4.00 0.75 0.75 20 4.00 4.00 2001—May 15 3.50-4.00 3.50 In effect Jan. 8, 2003 0.75 0.75 17 3.50 3.50 (end of program) 1. Available for very short terms as a backup source of liquidity to depository institutions 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 Monetary Statistics, 3. Available to help relatively small depository institutions meet regular seasonal needs for 1914-1941, and 1941-1970\ and the Statistical Digest, 1970-1979, 1980-1989, and funds that arise from a clear pattern of intrayearly movements in their deposits and loans and 1990-1995. See also the Board's Statistics: Releases and Historical Data web pages that cannot be met through special industry lenders. The discount rate on seasonal credit (http://www.federalreserve.gov/releases/H15/data.htm). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic NonfinancialS tatistics • December 2003 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Requirement Type of deposit Net transaction accounts2 1 $0 million-$6.6 million3 12/25/03 2 More than $6.6 million-$45.4 million4 12/25/03 3 More than $45.4 million5 12/25/03 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 25, 2003, 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 15, 2004, for institutions that report quarterly, the amount was increased foreign banks, and Edge Act corporations. from $42.1 million to $45.4 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 25, 2003, for depository institutions that report weekly, and with the period beginning January 15, 2004. for institutions that report quarterly, the exemption was raised from $6.0 million to $6.6 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 2003 TTyyppee ooff ttrraannssaaccttiioonn aanndd mmaattuurriittyy 22000000 22000011 22000022 Feb. Mar. Apr. May June July Aug. U.S. TREASURY SECURITIES2 Outright transactions Treasury bills 1 Gross purchases 8,676 15,503 21,421 4,161 1,863 3,543 1,684 1,032 808 981 2 Gross sales 0 0 0 0 0 0 0 0 0 0 3 Exchanges 477,904 542,736 657,931 53.860 47,424 51,834 76.354 60,706 68.544 56,098 4 For new bills 477,904 542,736 657,931 53,860 47,424 51,834 76.354 60,706 68,544 56,098 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 12,720 478 1,318 1,422 786 0 0 0 7 Gross sales 0 0 0 0 0 0 0 0 0 0 8 Maturity shifts 62,025 70,336 89,108 3,214 8,334 8,333 7,228 7,531 6,662 4,915 9 Exchanges -54,656 -72,004 -92,075 -13,313 -8,211 -7,293 -6,999 -6,700 ^1,996 -9,776 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 2,127 710 733 1,057 0 0 0 12 Gross sales 0 0 0 0 0 0 0 0 0 0 13 Maturity shifts -52,068 -45,211 -73,093 2,160 -8,334 -8,333 -1,513 -7,531 -6.662 -1,561 14 Exchanges 46,177 64,519 88,276 11,817 8,211 7,293 6,747 6,700 4,996 7,261 Five to ten years 15 Gross purchases 5,871 6,003 5,074 769 522 0 234 0 0 0 16 Gross sales 0 0 0 0 0 0 0 0 0 0 17 Maturity shifts -6,801 -21,063 -11,588 -3,877 0 0 -5,463 0 0 2,202 18 Exchanges 6,585 6,063 3,800 1,497 0 0 252 0 0 2,515 More than ten years 19 Gross purchases 5,833 8,531 2,280 0 50 0 0 0 0 0 20 Gross sales 0 0 0 0 0 0 0 0 0 0 21 Maturity shifts -3,155 -4,062 -4,427 -1,497 0 0 -252 0 0 -5,556 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 7,534 4,463 5,699 3,761 1,032 808 981 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 7,534 4,463 5,699 3,761 1,032 808 981 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 1,143,126 121,896 95,001 112,251 124,741 90,500 145,750 156,250 32 Gross sales 987,501 1,490,838 1,153,876 119,746 90,151 106,500 132,002 88,990 148,500 150,250 Matched sale-purchase agreements 33 Gross purchases 4,415,905 4,722,667 4,981,624 0 0 0 0 0 0 0 34 Gross sales 4,397,835 4,724,743 4,958,437 0 0 0 0 0 0 0 Reverse repurchase agreements4 35 Gross purchases 0 0 231,272 343,748 388,069 451,149 441,555 456,652 445,346 410,913 36 Gross sales 0 0 252,363 343,395 389,469 452,545 443,025 456,447 443,093 411,276 37 Net change in temporary transactions -79,195 4,800 -8,653 2 2,200 2,104 -8,731 -6,535 -491 5,637 38 Total net change in System Open Market Account . . -63,877 46,295 45,589 7,537 6,664 7,803 -4,971 -5,504 311 6,617 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 NonfinancialS tatistics • December 2003 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 2003 2003 Aug. 27 Sept. 3 Sept. 10 Sept. 17 Sept. 24 July Aug. Sept. Consolidated condition statement ASSETS 1 Gold certificate account 11,039 11,039 11,039 11,039 11,039 11,039 11,039 11,039 2 Special drawing rights certificate account 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 3 Coin 887 858 850 848 849 878 881 847 4 Securities, repurchase agreements, and loans 682,842 687,371 678,256 685,367 682,345 682,057 689,066 693,800 5 Securities held outright 653,681 653,941 655,602 655,953 656,003 652,913 653,909 656,126 6 U.S. Treasury2 653,671 653,931 655,592 655,943 655,993 652,903 653,899 656,116 7 Bills3 240,528 240,785 241,020 241,367 241,414 239,773 240,754 241,533 8 Notes and bonds, nominal3 398,853 398,853 399,595 399,595 399,595 398,853 398,853 399,595 9 Notes and bonds, inflation-indexed3 12,814 12,814 13,454 13,454 13,454 12,814 12,814 13,454 10 Inflation compensation4 1,476 1,479 1,523 1,526 1,530 1,462 1,478 1,533 11 Federal agency3 10 10 10 10 10 10 10 10 12 Repurchase agreements5 29,000 33,250 22,500 29,250 26,000 29,000 35,000 37,500 13 Loans 161 180 155 165 341 145 158 174 14 Items in process of collection 7,586 12,854 8,013 7,157 6,535 6,558 5,997 9,071 15 Bank premises 1,590 1,589 1,590 1,591 1,595 1,586 1,590 1,597 16 Other assets 35,389 35,449 36,186 36,633 37,521 38,004 35,729 37,636 17 Denominated in foreign currencies6 17,511 17,580 17,813 17,935 18,456 17,598 17,654 18,636 18 All other7 17,878 17,869 18,373 18,697 19,065 20,406 18,075 19,000 19 Total assets 741,534 751,360 738,134 744,835 742,084 742,321 746,503 756,190 LIABILITIES 20 Federal Reserve notes, net of F.R. Bank holdings 663,418 667,212 664,058 662,927 663,314 660,167 666,113 664,034 21 Reverse repurchase agreements8 19,119 18,757 19,719 18,972 18,801 19,827 20,190 24,983 7.7 Deposits 31,731 34,317 26,161 34,823 32,208 35,972 33,793 36,671 23 Depository institutions 25,927 28,866 20,755 27,034 25,027 29,041 28,898 29,141 24 U.S. Treasury, general account 5,441 4,525 5,039 7,247 6,837 6,356 4,589 7,224 25 Foreign official 81 686 80 270 82 318 81 82 7.6 Other 282 240 287 272 262 258 225 224 27 Deferred availability cash items 7,355 10,994 7,849 7,889 7,112 6,681 6,155 9,337 28 Other liabilities and accrued dividends9 2,204 2,195 2,215 2,204 2,245 2,143 2,195 2,227 29 Total liabilities 723,825 733,475 720,003 726,815 723,681 724,789 728,446 737,252 CAPITAL ACCOUNTS 30 Capital paid in 8,748 8,752 8,755 8,755 8,758 8,719 8,750 8,746 31 Surplus 8,380 8,380 8,380 8,380 8,380 8,327 8,380 8,380 32 Other capital accounts 580 752 996 885 1,265 486 927 1,811 33 Total capital 17,708 17,885 18,131 18,021 18,403 17,532 18,057 18,938 MEMO .34 Marketable securities held in custody for foreign official and international accounts310 949,401 961,027 964,040 959,339 968,067 936,251 951,036 982,329 35 U.S. Treasury 761,587 772,567 777,059 772,230 775,698 754,101 765,022 787,003 36 Federal agency 187,814 188,460 186,981 187,110 192,369 182,150 186,013 195,326 37 Securities lent to dealers 2,346 2,201 1,395 586 809 2,390 2,631 3,088 Federal Reserve notes and collateral statement .38 Federal Reserve notes outstanding 780,878 781,724 783,777 785,485 787,589 774,672 780,991 789,185 39 Less: Notes held by F.R. Banks not subject to collateralization 112,697 109,755 115,128 117,643 119,527 109,856 110,234 119,804 40 Federal Reserve notes to be collateralized 668,181 671,969 668.649 667,842 668,062 664,816 670,757 669,381 41 Collateral held against Federal Reserve notes 668,181 671,969 668,649 667,842 668,062 664,816 670,757 669,381 42 Gold certificate account 11,039 11,039 11,039 11,039 11,039 11,039 11,039 11,039 43 Special drawing rights certificate account 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 44 U.S. Treasury and agency securities pledged11 654,942 658,730 655,411 654,603 654,823 651,577 657,518 656,142 45 Other eligible assets 0 0 0 0 0 0 0 0 MEMO 46 Total U.S. Treasury and agency securities" 682,681 687,191 678,102 685,203 682,003 681,913 688,909 693,626 47 Less: face value of securities under reverse repurchase agreements12 19,124 18,762 19,724 18,976 18,805 19,831 20,198 24,989 48 U.S. Treasury and agency securities eligible to be pledged 663,558 668,429 658,377 666,226 663,198 662,081 668,711 668,637 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 Aug. 27 Sept. 3 Sept. 10 Sept. 17 Sept. 24 July Aug. Sept. 1 Total loans 161 180 155 165 341 145 158 174 2 Within 15 days 138 35 30 163 311 99 109 126 3 16 days to 90 days 23 145 125 2 30 45 48 49 4 91 days to 1 year 0 0 0 0 0 0 0 0 5 Total U.S. Treasury securities1 653,671 653,931 655,592 655,943 655,993 652,903 653,899 656,116 6 Within 15 days 50,191 45,481 45,911 52,664 52,428 36,979 35,599 30,538 7 16 days to 90 days 135,304 140,939 141,474 135,948 137,309 134,047 138,773 153,565 8 91 days to 1 year 160,830 162,179 161,449 160,569 159,492 172,745 172,179 158,709 9 Over 1 year to 5 years 180,033 178,017 178,018 178,019 178,020 184,345 180,033 184,556 10 Over 5 years to 10 years 50,384 50,385 51,655 51,656 51,658 44,823 50,384 51,659 11 Over 10 years 76,929 76,931 77,085 77,086 77,088 79,965 76,930 77,089 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 10 10 0 0 10 15 91 days to 1 year 10 10 10 0 0 10 10 0 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 29,000 33,250 22,500 29,250 26,000 29,000 35,000 37,500 20 Within 15 days 24,000 29,250 18,500 24,250 26,000 24,000 26,000 37,500 21 16 days to 90 days 5,000 4,000 4,000 5,000 0 5,000 9,000 0 22 Total reverse repurchase agreements2 19,119 18,757 19,719 18,972 18,801 19,827 20,190 24,983 23 Within 15 days 19,119 18,757 19,719 18,972 18,801 19,827 20,190 24,983 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 Nonfinancial Statistics • December 2003 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE' Billions of dollars, averages of daily figures 2003 IItteemm 11999999 22000000 22000011 22000022 DDeecc.. DDeecc.. DDeecc.. DDeecc.. Feb. Mar. Apr. May June July Aug.r Sept. Seasonally adjusted AAAADDDDJJJJUUUUSSSSTTTTEEEEDDDD FFFFOOOORRRR CCCCHHHHAAAANNNNGGGGEEEESSSS IIIINNNN RRRREEEESSSSEEEERRRRVVVVEEEE RRRREEEEQQQQUUUUIIIIRRRREEEEMMMMEEEENNNNTTTTSSSS2222 1111 TTTToooottttaaaallll rrrreeeesssseeeerrrrvvvveeeessss3333 41.81 38.54 41.24 40.22 40.82 40.97 40.81 40.99 42.80 43.93 46.28 44.96 2222 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss4444 41.49 38.33 41.18 40.14 40.80 40.95 40.78 40.93 42.63 43.80 45.95 44.78 3333 RRRReeeeqqqquuuuiiiirrrreeeedddd rrrreeeesssseeeerrrrvvvveeeessss 40.51 37.11 39.60 38.21 38.86 39.34 39.27 39.37 40.94 42.00 42.52 43.46 4444 MMMMoooonnnneeeettttaaaarrrryyyy bbbbaaaasssseeee5555 593.16 584.77 635.62 681.90 691.31 695.14 698.23 701.18 703.17 703.53 709.22 711.20 Not seasonally adjusted 5555 TTTToooottttaaaallll rrrreeeesssseeeerrrrvvvveeeessss6666 41.89 38.53 41.20 40.13 41.94 40.60 41.16 41.79 41.86 43.58 46.06 44.38 6666 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss 41.57 38.32 41.13 40.05 41.91 40.57 41.14 41.73 41.70 43.44 45.73 44.20 7777 RRRReeeeqqqquuuuiiiirrrreeeedddd rrrreeeesssseeeerrrrvvvveeeessss7777 40.59 37.10 39.55 38.12 39.97 38.96 39.63 40.17 40.00 41.65 42.30 42.88 8888 MMMMoooonnnneeeettttaaaarrrryyyy bbbbaaaasssseeee8888 600.72 590.06 639.91 686.23 690.25 693.91 697.83 701.58 703.33 705.80 709.18 709.20 NNNNOOOOTTTT AAAADDDDJJJJUUUUSSSSTTTTEEEEDDDD FFFFOOOORRRR CCCCHHHHAAAANNNNGGGGEEEESSSS IIIINNNN RRRREEEESSSSEEEERRRRVVVVEEEE RRRREEEEQQQQUUUUIIIIRRRREEEEMMMMEEEENNNNTTTTSSSS9999 9999 TTTToooottttaaaallll rrrreeeesssseeeerrrrvvvveeeessss11110000 41.65 38.47 41.08 40.27 41.94 40.60 41.17 41.80 41.87 43.59 46.08 44.41 11110000 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss 41.33 38.26 41.01 40.19 41.91 40.58 41.14 41.75 41.71 43.46 45.76 44.23 11111111 RRRReeeeqqqquuuuiiiirrrreeeedddd rrrreeeesssseeeerrrrvvvveeeessss 40.36 37.05 39.43 38.26 39.97 38.96 39.64 40.18 40.02 41.67 42.32 42.91 11112222 MMMMoooonnnneeeettttaaaarrrryyyy bbbbaaaasssseeee"""" 608.02 596.98 648.74 697.15 701.04 705.04 709.10 712.76 714.36 717.021" 720.49 720.68 11113333 EEEExxxxcccceeeessssssss rrrreeeesssseeeerrrrvvvveeeessss11112222 1.30 1.43 1.65 2.01 1.97 1.64 1.53 1.62 1.85 1.92 3.76 1.51 11114444 BBBBoooorrrrrrrroooowwwwiiiinnnnggggssss ffffrrrroooommmm tttthhhheeee FFFFeeeeddddeeeerrrraaaallll RRRReeeesssseeeerrrrvvvveeee .32 .21 .07 .08 .03 .02 .03 .06 .16 .13 .33 .18 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 MEASURES' Billions of dollars, averages of daily figures 2003 1999 2000 2001 2002 Dec. Dec. Dec. Dec. June July' Aug.' Sept. Seasonally adjusted Measures2 1 Ml 1,121.4 1,084.7 1,172.9 1,210.4 1,272.2 1,278.0 1,285.8 1,287.9 ? M2 4,649.9r 4,931.5 5,444.4r 5,791.6' 6,046.9' 6,097.8 6,140.7 6,118.4 3 M3 6,535.0r 7,099.4 8,004.3r 8,522.6r 8,775.4' 8,905.6 8,930.8 8,908.9 MI components 4 Currency3 517.7 531.5 581.9 627.3 646.5 646.2 649.2 653.0 Travelers checks4 8.3 8.0 7.8 7.5 7.9 8.2 8.0 7.8 6 Demand deposits5 352.1 306.9 326.1 297.1 322.5 322.6 322.2 316.9 7 Other checkable deposits6 243.4 238.2 257.2 278.5 295.3 301.0 306.3 310.2 Nontransaction components 8 In M2 3,528.5r 3,846.8 4,271.5r 4,581.3' 4,774.7' 4,819.8 4,855.0 4,830.5 9 In M3 only8 1,885.1 2,167.9 2,559.9 2,730.9 2,728.5 2,807.8 2,790.1 2,790.5 Commercial banks 10 Savings deposits, including MMDAs 1,288.8 1,422.9 1,734.6 2,047.9 2,227.6 2,280.1 2,316.4 2,302.3 11 Small time deposits9 634.6 699.5 634.2 591.0 566.4 557.4 549.7 543.9 12 Large time deposits'011 652.2 718.3 671.1 676.6 687.3 742.5 740.1 738.7 Thrift institutions 13 Savings deposits, including MMDAs 452.0 454.3 572.4 714.5 802.0 816.4 831.5 838.8 14 Small time deposits9 319.5 344.8 339.1 302.2 288.5 285.0 281.0 278.2 15 Large time deposits10 91.9 103.0 114.9 117.3 118.0 121.4 123.1 122.8 Money market mutual funds 16 Retail 833.6r 925.4 991.3r 925.8r 890.2' 880.9 876.3 867.4 17 Institution-only 634.8 788.8 1,190.3 1,234.5 1,143.8 1,183.9 1,164.6 1,170.5 Repurchase agreements and eurodollars 18 Repurchase agreements12 335.7 363.5 375.0 474.6 520.2 495.1 491.6 493.6 19 Eurodollars12 170.5 194.3 208.6 227.9 259.1 264.9 270.8 264.9 Not seasonally adjusted Measures2 20 Ml 1,147.8 1,112.1 1,202.9 1,240.3 1,269.4 1,274.4 1,279.6 1,275.5 21 M2 4,676.9r 4,966.9 5,487.4r 5,841.0' 6,015.9' 6,063.7 6,119.9 6,092.9 22 M3 6,577,6r 7,154.0 8,076.1' 8,600.2' 8,744.4' 8,846.9 8,880.8 8,830.4 Ml components 23 Currency3 521.7 535.6 585.4 630.6 647.7 648.7 650.4 651.0 24 Travelers checks4 8.4 8.1 7.9 7.7 7.7 7.8 7.8 7.7 25 Demand deposits5 371.7 326.7 348.1 317.5 318.8 320.1 321.2 312.7 26 Other checkable deposits6 246.0 241.6 261.5 284.5 295.2 297.8 300.2 304.1 Nontransaction components 27 In M27 3,529. lr 3,854.8 4,284.4r 4,600.7' 4,746.5' 4,789.2 4,840.3 4,817.4 28 In M3 only8 1,900.7 2,187.1 2,588.7 2,759.2 2,728.5 2,783.2 2,760.9 2,737.5 Commercial banks 29 Savings deposits, including MMDAs 1,288.7 1,427.5 1,742.4 2,060.4 2,217.5 2,264.2 2,307.9 2,297.6 30 Small time deposits9 635.6 700.6 635.1 591.7 565.7' 557.2 550.1 544.4 31 Large time deposits1011 653.6 718.5 670.0 675.0 691.8 742.4 739.0 739.8 Thrift institutions 32 Savings deposits, including MMDAs 451.9 455.8 575.0 718.9 798.3 810.7 828.4 837.1 33 Small time deposits9 320.0 345.4 339.6 302.5 288.1 284.9 281.2 278.4 34 Large time deposits10 92.1 103.0 114.7 117.0 118.8 121.4 122.9 123.0 Money market mutual funds 35 Retail 832.9r 925.5 992.3r 927.3' 876.8' 872.2 872.7 859.8 36 Institution-only 648.6 806.1 1,218.3 1,262.3 1,131.0 1,161.6 1,144.1 1,133.2 Repurchase agreements and eurodollars 37 Repurchase agreements12 334.7 364.2 376.5 476.4 529.5 496.6 488.1 479.3 38 Eurodollars12 171.7 195.2 209.1 228.5 257.4 261.3 266.8 262.3 Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic NonfinancialS tatistics • December 2003 NOTES TO TABLE 1.21 1. Latest monthly and weekly figures are available from the Board's H.6 (508) weekly ory institutions, the U.S. government, money market funds, and foreign banks and official statistical release. Historical data starting in 1959 are available from the Money and Reserves institutions. Seasonally adjusted M3 is calculated by summing large time deposits, institu- Projections Section, Division of Monetary Affairs, Board of Governors of the Federal tional money fund balances, RP liabilities, and eurodollars, each seasonally adjusted sepa- Reserve System, Washington, DC 20551. rately, and adding this result to seasonally adjusted M2. 2. Composition of the money stock measures is as follows: 3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of depository Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of institutions. depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all 4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers. commercial banks other than those owed to depository institutions, the U.S. government, and Travelers checks issued by depository institutions are included in demand deposits. foreign banks and official institutions, less cash items in the process of collection and Federal 5. Demand deposits at commercial banks and foreign-related institutions other than those Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of owed to depository institutions, the U.S. government, and foreign banks and official instituwithdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, tions, less cash items in the process of collection and Federal Reserve float. credit union share draft accounts, and demand deposits at thrift institutions. Seasonally 6. Consists of NOW and ATS account balances at all depository institutions, credit union adjusted Ml is computed by summing currency, travelers checks, demand deposits, and share draft account balances, and demand deposits at thrift institutions. OCDs, each seasonally adjusted separately. 7. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail M2: Ml plus (1) savings deposits (including MMDAs), (2) small-denomination time money fund balances. deposits (time deposits—including retail RPs—in amounts of less than $100,000), and (3) 8. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities balances in retail money market mutual funds. Excludes individual retirement accounts (overnight and term) issued by depository institutions, and (4) eurodollars (overnight and (IRAs) and Keogh balances at depository institutions and money market funds. Seasonally term) of U.S. addressees. adjusted M2 is calculated by summing savings deposits, small-denomination time deposits, 9. Small time deposits—including retail RPs—are those issued in amounts of less than and retail money fund balances, each seasonally adjusted separately, and adding this result to $100,000. All IRAs and Keogh accounts at commercial banks and thrift institutions are seasonally adjusted M1. subtracted from small time deposits. M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more) 10. Large time deposits are those issued in amounts of $100,000 or more, excluding those issued by all depository institutions, (2) balances in institutional money funds, (3) RP booked at international banking facilities. liabilities (overnight and term) issued by all depository institutions, and (4) eurodollars 11. Large time deposits at commercial banks less those held by money market funds, (overnight and term) held by U.S. residents at foreign branches of U.S. banks worldwide and depository institutions, the U.S. government, and foreign banks and official institutions. at all banking offices in the United Kingdom and Canada. Excludes amounts held by deposit- 12. Includes both overnight and term. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A15 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1 A. All commercial banks Billions of dollars Monthly averages Wednesday figures Account 2002 2003 2003 Sept. Mar. Apr. May June' July' Aug.' Sept. Sept. 3 Sept. 10 Sept. 17 Sept. 24 Seasonally adjusted Assets 1 Bank credit 5,721. lr 5,992.0' 6,026.5' 6,133.6' 6,189.8 6,201.7 6,188.9 6,194.4 6.203.7 6,230.3 6,190.7 6,157.0 2 Securities in bank credit 1,642.6 1,766.1 1,778.7 1,837.4 1,862.0 1,815.3 1,773.9 1,778.9 1,781.0 1,788.8 1,764.1 1,765.3 U.S. government securities 962.7 1,072.2 1,104.4 1,135.2 1,151.6 1,115.7 1,077.2 1,060.6 1,081.1 1,078.5 1,052.5 1,046.5 4 Other securities 679.9 693.9 674.3 702.2 710.4 699.6 696.7 718.3 699.9 710.3 711.5 718.7 5 Loans and leases in bank credit2 .... 4,078.5' 4,225.9' 4,247.8' 4,296.2' 4,327.8 4,386.4 4,415.0 4,415.5 4,422.7 4,441.5 4,426.6 4,391.8 6 Commercial and industrial 972.8r 947.7' 946.8' 938.5' 926.6 929.7 921.8 910.6 919.8 915.7 911.5 908.0 7 Real estate 1,937.4 2,095.1' 2,111.3' 2,134.2' 2,157.1 2,195.0 2,240.0 2,255.4 2,258.8 2,278.1 2,266.0 2,234.9 8 Revolving home equity 200.8 230.5 234.8' 238.4' 244.8 248.9 253.2 258.4 255.2 256.9 258.2 259.6 9 Other 1,736.7' 1,864.6' 1,876.5' 1,895.8' 1,912.3 1,946.1 1,986.8 1,997.0 2,003.7 2,021.2 2,007.8 1,975.2 in Consumer 582.9 586.9 584.6 589.9 595.8 596.3 597.0 602.0 599.8 601.0 605.5 603.7 II Security3 180.9 193.6 190.6 210.3 212.2 214.8 207.0 202.2 199.2 201.5 197.5 198.6 1? Other loans and leases 404.4' 402.6' 414.5' 423.2' 436.1 450.7 449.3 445.3 445.1 445.2 446.1 446.6 n Interbank loans 317.2 313.4' 304.9' 316.8' 320.2 321.7 327.0 308.0 307.7 300.6 302.7 308.6 14 Cash assets4 318.1 323.6 319.7 318.3 331.5 336.4 343.7 331.0 353.8 316.2 334.0 319.8 15 Other assets5 501.0 525.0 528.7 546.1 549.8 555.5 566.6 552.9 575.0 566.3 534.6 541.5 16 Total assets6 6,782.0r 7,077.5r 7,104.6 7,239.4 7,315.8 7,340.1 7,350.2 7,310.4 7,363.9 7,337.5 7,285.9 7,250.7 Liabilities 17 Deposits 4,478.4 4.585.6 4,612.6 4,643.4 4,702.4 4,748.2 4,799.7 4,775.7 4,816.3 4,766.2 4,773.6 4,766.0 18 Transaction 582.7 619.4 632.4 634.1 639.3 655.3 655.1 634.8 623.7 602.5 642.0 672.8 19 Nontransaction 3,895.7 3.966.3 3,980.2 4,009.3 4,063.1 4,092.9 4,144.6 4,140.9 4,192.6 4,163.7 4,131.6 4,093.2 20 Large time 1,044.0 1,001.6 985.5 999.2 1,003.3 1,021.2 1,031.8 1,041.6 1,033.2 1,047.9 1,037.2 1,046.8 21 Other 2,851.7 2,964.7 2,994.7 3,010.2 3,059.8 3,071.6 3,112.8 3,099.3 3,159.4 3,115.8 3,094.5 3,046.4 22 Borrowings 1,325.8 1.389.8 1,396.7 1,438.2 1,478.1 1,515.1 1,518.1 1,481.2 1,496.4 1,507.0 1,483.0 1,456.5 73 From banks in the U.S 415.9 397.3 397.1 389.8 408.5 410.6 416.0 403.2 403.9 395.7 411.8 404.5 24 From others 909.9 992.6 999.6 1,048.4 1,069.6 1,104.4 1,102.0 1,078.1 1,092.4 1,111.3 1,071.2 1,052.0 25 Net due to related foreign offices 92.7 135.8 139.3 146.5 126.4 143.0 126.8 130.7 124.9 135.6 130.7 113.4 26 Other liabilities 431.2 430.0' 434.7' 459.6' 469.9 438.7 428.5 439.2 454.6 446.7 426.2 425.5 27 Total liabilities 6,328.1r 6,541.2r 6,583.2r 6,687.7r 6,776.9 6,844.9 6,873.0 6,826.8 6,892.2 6,855.5 6,813.6 6,761.4 28 Residual (assets less liabilities)7 453.9' 536.3' 521.4' 551.7' 538.9 495.2 477.1 483.6 471.8 481.9 472.3 489.4 Not seasonally adjusted Assets 29 Bank credit 5,717.8' 5,980.8' 6,021.0' 6,128.2' 6,185.9 6,176.1 6,168.9 6,190.5 6,196.6 6,219.2 6,197.1 6,149.4 30 Securities in bank credit 1.641.4 1,771.1 1,776.5 1,835.1 1,855.9 1,800.1 1,766.6 1,777.6 1,782.5 1,789.9 1,762.9 1,761.2 31 U.S. government securities 962.5 1,077.2 1,104.3 1,133.2 1,146.9 1,107.5 1,073.2 1,060.5 1,083.0 1,081.2 1,052.6 1,044.6 3? Other securities 678.9 693.9 672.2 702.0 709.0 692.5 693.4 717.2 699.4 708.8 710.3 716.6 33 Loans and leases in bank credit2 .... 4,076.4' 4,209.7' 4,244.5' 4,293.1' 4,330.1 4,376.0 4,402.2 4,412.8 4,414.2 4,429.2 4,434.2 4,388.2 34 Commercial and industrial 971.2' 949.1' 950.6' 942.3' 930.7 930.8 918.0 908.9 915.8 910.3 911.1 907.2 35 Real estate 1,939.1' 2,086.1' 2,107.6' 2,138.0' 2,158.3 2,193.4 2,240.1 2,257.4 2,259.2 2,280.6 2,269.9 2,236.3 36 Revolving home equity 201.4 228.4 234.5' 239.6' 245.6 249.0 253.3 259.3 255.6 257.6 259.3 260.5 37 Other 1,737.7' 1,857.6 1,873.2' 1,898.4' 1,912.7 1,944.4 1,986.8 1,998.1 2,003.5 2,023.0 2,010.6 1,975.8 38 Consumer 581.9 584.7 581.8 588.7 592.4 590.7 593.2 600.0 597.3 597.8 604.3 602.7 39 Credit cards and related plans . . 230.9 219.6 215.6 221.5 223.2 219.9 219.9 222.8 223.0 221.3 226.5 224.7 40 Other 351.0 365.0 366.2 367.2 369.3 370.8 373.3 377.2 374.3 376.6 377.8 378.0 41 Security3 179.4 189.2 189.8 202.6 210.8 208.7 201.7 200.0 192.3 194.2 201.5 198.0 42 Other loans and leases 404.8' 400.7' 414.7' 421.6' 437.9 452.4 449.2 446.5 449.6 446.4 447.4 444.0 43 Interbank loans 309.6' 319.9' 316.0' 312.6' 321.4 317.1 321.1 301.1 311.4 300.3 298.6 289.1 44 Cash assets4 314.3 312.8 318.0 314.7 322.3 325.7 327.1 327.2 367.5 317.9 326.8 306.2 45 Other assets5 504.6 524.1 528.1 544.0 544.3 553.7 563.1 556.9 577.7 570.9 537.9 541.5 46 Total assets6 6,770.8r 7,060.8r 7,108.0 7,223.8r 7,298.3 7,297.7 7,303.9 7,299.7 7376.6 7,331.9 7,284.1 7,210.2 Liabilities 47 Deposits 4,441.7 4,592.8 4,637.7 4,636.4 4,691.5 4,718.8 4,749.8 4,739.4 4,805.5 4,751.0 4,735.5 4,690.3 48 Transaction 577.8 611.0 638.3 623.9 633.9 646.7 638.8 629.4 636.6 605.0 636.3 646.7 49 Nontransaction 3,863.9 3,981.8 3,999.4 4,012.5 4,057.6 4,072.1 4,111.0 4,110.0 4,168.9 4,145.9 4,099.1 4,043.6 50 Large time 1,023.5 1,004.3 989.9 1,002.8 1,001.4 1,010.1 1,015.6 1,022.5 1,014.4 1,028.5 1,016.0 1,027.3 51 Other 2,840.4 2,977.4 3,009.5 3,009.6 3,056.2 3,062.0 3,095.4 3,087.5 3,154.5 3,117.4 3,083.2 3,016.3 52 Borrowings 1,323.5 1,386.2 1,400.8 1,443.9 1,477.2 1,508.0 1,498.1 1,479.4 1,484.9 1,489.9 1,486.3 1,464.6 53 From banks in the U.S 409.1 400.7 401.2 392.2 406.7 407.3 411.5 396.4 398.9 386.2 405.5 398.5 54 From others 914.4 985.5 999.6 1,051.8 1,070.5 1,100.8 1,086.6 1,083.0 1,086.0 1,103.7 1,080.9 1,066.1 55 Net due to related foreign offices 95.1' 133.9 130.2 146.0 123.5 133.6 125.1 133.0 125.1 135.5 131.1 120.0 56 Other liabilities 433.5 426.6' 423.1' 458.8' 466.8 429.3 426.8 441.6 454.9 446.7 426.5 432.0 57 Total liabilities 6,293.8r 6,539.5r 6,591.8r 6,685.1r 6,759.0 6,789.8 6,799.7 6,793.4 6,870.5 6,823.0 6,779.4 6,706.9 58 Residual (assets less liabilities)7 477.0' 521.3' 516.2' 538.7' 539.3 507.9 504.2 506.4 506.1 508.9 504.6 503.3 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • December 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 2003 2003 Sept. Mar. Apr. May June' July' Aug.' Sept. Sept. 3 Sept. 10 Sept. 17 Sept. 24 Seasonally adjusted Assets 1 Bank credit 5,099.0r 5,328.5' 5,371.5' 5,464.0' 5,517.5 5,551.8 5,558.3 5,564.5 5,574.2 5,592.1 5,563.3 5,531.1 2 Securities in bank credit 1.392.7 1,482.3 1,501.4 1,548.8 1,573.6 1,547.6 1,506.4 1,505.5 1,508.7 1,515.3 1,496.0 1,494.1 3 U.S. government securities 873.1' 949.7 980.2 1,007.8 1,027.4 1,001.8 970.6 953.2 974.0 969.1 946.2 939.7 4 Other securities 519.6 532.6 521.1 541.0 546.2 545.8 535.7 552.3 534.7 546.2 549.8 554.3 5 Loans and leases in bank credit2 .... 3.706.3r 3,846.2' 3,870.1' 3,915.2' 3,943.9 4,004.2 4,052.0 4,059.0 4,065.5 4,076.8 4,067.2 4,037.0 6 Commercial and industrial 787.8r 776.0' 774.6' 768.1' 763.3 767.1 765.7 759.4 765.6 762.5 758.9 757.7 7 Real estate 1,918.4' 2,075.2' 2,092.3' 2,114.9' 2,137.6 2,175.6 2,220.9 2,236.5 2,239.9 2,259.2 2,247.1 2,216.1 8 Revolving home equity 200.8 230.5 234.8' 238.4' 244.8 248.9 253.2 258.4 255.2 256.9 258.2 259.6 y Other l,717.7r 1,844.7' 1,857.5' 1,876.5' 1,892.9 1,926.7 1,967.8 1,978.1 1,984.8 2,002.2 1,989.0 1,956.4 10 Consumer 582.9 586.9 584.6 589.9 595.8 596.3 597.0 602.0 599.8 601.0 605.5 603.7 11 Security3 85.7 72.2 72.4 91.4 90.3 95.9 95.4 88.9 88.6 83.4 84.1 85.7 12 Other loans and leases 331.4r 335.8' 346.2' 350.8' 356.8 369.3 373.0 372.2 371.6 370.8 371.6 373.9 13 Interbank loans 296.0 286.2' 282.5' 292.3' 289.5 288.5 294.6 277.4 274.2 267.4 273.3 278.3 14 Cash assets4 271.5 279.7 270.0 267.3 277.1 282.4 289.4 277.9 298.3 262.8 277.4 269.9 15 Other assets5 474.2 495.0 496.2 509.5 513.0 522.3 530.3 522.9 544.5 536.5 508.6 511.2 16 Total assets6 6,065.7r 6,313.4r 6,345.4 6,458.0 6,522.2 6,570.4 6,597.0 6,567.2 6,615.3 6,583.3 6,546.9 6,514.8 Liabilities 17 Deposits 3,986.1 4,137.2 4,178.0 4,210.0 4,259.8 4,294.8 4,344.5 4,324.7 4,367.5 4,311.2 4,323.9 4,312.1 18 Transaction 572.6 607.9 621.2 623.3 627.9 643.9 643.3 623.9 612.4 591.1 631.3 662.4 19 Nontransaction 3,413.4 3,529.4 3,556.8 3,586.7 3,631.9 3,650.9 3,701.2 3,700.8 3,755.2 3,720.1 3,692.6 3,649.7 20 Large time 568.1 583.6 582.2 595.7 590.4 586.2 600.2 604.9 604.9 607.4 600.3 607.0 21 Other 2,845.3 2,945.8 2,974.5 2,991.0 3,041.5 3,064.7 3,101.0 3,095.9 3,150.2 3,112.8 3,092.3 3.042.7 22 Borrowings 1,098.7 1,096.7 1,098.9 1,133.1 1,162.3 1,218.0 1,224.4 1,191.0 1,204.5 1,213.2 1,191.2 1,175.3 23 From banks in the U.S 393.3 363.6 369.7 358.5 373.8 373.9 382.2 369.5 368.6 366.2 376.4 372.6 24 From others 705.4 733.1 729.2 774.6 788.5 844.2 842.3 821.4 835.9 847.0 814.8 802.7 25 Net due to related foreign offices 177.4 219.6 212.2 224.3 208.3 229.0 230.3 230.2 225.6 235.6 224.9 213.5 26 Other liabilities 339.5r 335.3' 344.2' 352.8' 356.4 329.8 312.4 328.7 339.2 332.3 319.7 319.0 27 Total liabilities 5,601.7r 5,788.7r 5,833.2r 5,920.2r 5,986.9 6,071.7 6,111.7 6,074.6 6,136.7 6,092.3 6,059.6 6,020.0 28 Residual (assets less liabilities)7 464.0r 524.7' 512.2' 537.8' 535.4 498.8 485.3 492.6 478.6 491.0 487.3 494.8 Not seasonally adjusted Assets 29 Bank credit 5,099.3r 5,319.1' 5,366.2' 5,463.4' 5,517.1 5,533.6 5,544.8 5,564.7 5,576.6 5,589.3 5,571.0 5,525.4 30 Securities in bank credit 1,391.5 1,487.3 1,499.2 1,546.6 1,567.5 1,532.4 1,499.1 1,504.3 1,510.1 1.516.4 1,494.9 1,490.0 31 U.S. government securities 873.0 954.7 980.1 1,005.8 1,022.7 993.7 966.7 953.1 976.0 971.7 946.3 937.8 32 Other securities 518.6 532.6 519.1 540.8 544.8 538.7 532.4 551.2 534.2 544.7 548.6 552.2 33 Loans and leases in bank credit2 .... 3,707.7r 3,831.8' 3,867.0' 3,916.8' 3,949.6 4,001.3 4,045.7 4,060.4 4,066.5 4,072.9 4,076.1 4,035.4 34 Commercial and industrial 786.3' 775.9' 779.3' 773.7' 767.9 769.2 763.1 757.8 762.8 758.1 758.5 756.5 35 Real estate 1,920.0' 2,066.2' 2.088.6' 2,118.7' 2,138.9 2,174.0 2,221.0 2,238.5 2,240.3 2,261.6 2,251.0 2,217.5 36 Revolving home equity 201.4 228.4 234.5' 239.6' 245.6 249.0 253.3 259.3 255.6 257.6 259.3 260.5 37 Other 1,718.6' 1,837.8' 1,854.1' 1,879.1' 1,893.3 1,925.0 1,967.7 1,979.3 1,984.6 2,004.0 1,991.7 1,957.0 38 Consumer 581.9 584.7 581.8 588.7 592.4 590.7 593.2 600.0 597.3 597.8 604.3 602.7 39 Credit cards and related plans . . 230.9 219.6 215.6 221.5 223.2 219.9 219.9 222.8 223.0 221.3 226.5 224.7 40 Other 351.0 365.0 366.2 367.2 369.3 370.8 373.3 377.2 374.3 376.6 377.8 378.0 41 Security3 87.1 71.9 71.3 86.0 91.4 94.6 94.2 90.1 89.5 82.6 88.7 86.5 42 Other loans and leases 332.5' 333.1' 345.9' 349.7' 359.0 372.7 374.2 374.0 376.5 372.7 373.6 372.2 43 Interbank loans 288.4 292.6' 293.6' 288.0' 290.8 284.0 288.7 270.5 277.8 267.1 269.2 258.7 44 Cash assets4 268.0 270.1 270.4 265.3 270.5 274.7 275.0 274.5 313.8 266.1 271.3 255.7 45 Other assets5 477.8 493.4 495.8 507.3 509.1 521.6 527.3 527.0 547.1 540.9 511.9 511.4 46 Total assets6 6,058.4r 6,299.0r 6,351.3 6,448.7P 6,512.3 6,539.4 6,560.0 6,561.1 6,639.2 6,587.5 6,547.4 6,475.7 Liabilities 47 3,967.6 4,140.3 4,197.1 4,197.6 4,250.7 4,275.1 4,310.0 4,304.9 4,375.0 4,315.4 4,305.1 4,250.3 48 Transaction 567.5 599.8 627.7 613.5 622.9 635.3 627.3 618.3 625.3 593.8 625.6 635.9 49 Nontransaction 3,400.1 3,540.5 3,569.4 3,584.1 3,627.9 3.639.8 3,682.7 3,686.6 3,749.7 3,721.6 3,679.4 3,614.4 50 Large time 565.7 582.1 580.4 593.9 589.9 584.6 598.8 602.3 604.0 607.2 598.4 601.7 51 Other 2,834.4 2,958.4 2,989.1 2,990.2 3,037.9 3,055.2 3,084.0 3,084.2 3,145.6 3,114.5 3,081.1 3,012.7 52 Borrowings 1,096.4 1,093.0 1,103.1 1,138.9 1,161.4 1,211.0 1,204.5 1,189.1 1,193.0 1,196.1 1,194.5 1,183.4 53 From banks in the U.S 386.5 367.0 373.8 360.8 372.0 370.5 377.6 362.8 363.6 356.8 370.1 366.7 54 From others 709.9 726.0 729.3 778.0 789.4 840.5 826.8 826.3 829.5 839.3 824.4 816.8 55 Net due to related foreign offices 178.2 215.5 203.5 223.5 207.3 222.9 230.0 231.3 226.0 235.4 224.5 216.7 56 Other liabilities 340.9' 330.4' 332.8' 351.7' 354.9 323.1 311.9 330.0 339.7 332.2 319.3 322.6 57 Total liabilities 5,583.1r 5,779.2r 5,836.5r 5,911.7r 5,974.3 6,032.1 6,056.5 6,055.3 6,133.7 6,079.2 6,043.4 5,973.0 58 Residual (assets less liabilities)7 475.3' 519.8' 514.7' 537.0' 538.0 507.3 503.6 505.8 505.5 508.3 504.0 502.7 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A17 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued C. Large domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures AAAccccccooouuunnnttt 2002 2003 2003 Sept.r Mar.r Apr.' May' June' July' Aug.' Sept. Sept. 3 Sept. 10 Sept. 17 Sept. 24 Seasonally adjusted Assets 1 Bank credit 2,800.6 2,930.1 2,950.2 3,025.3 3,054.9 3,062.1 3,049.8 3,057.4 3,064.2 3,076.6 3,055.5 3,031.5 ? Securities in bank credit 745.5 803.7 810.6 857.1 880.8 845.7 801.2 804.7 805.3 809.4 797.3 796.5 U.S. government securities 432.7 477.1 493.8 520.5 536.7 504.4 469.4 456.9 473.7 467.5 451.5 446.5 4 Trading account 42.4 41.8 40.7 43.6 38.8 38.5 34.7 38.1 43.6 44.7 39.1 29.8 Investment account 390.3 435.3 453.1 476.9 497.9 465.9 434.7 418.8 430.1 422.8 412.4 416.7 6 Other securities 312.8 326.6 316.8 336.6 344.0 341.3 331.8 347.8 331.6 341.9 345.8 350.0 7 Trading account 171.3 171.6 161.5 183.4 187.9 172.6 162.3 178.3 163.3 173.5 176.7 180.7 8 Investment account 141.5 155.0 155.3 153.2 156.1 168.8 169.6 169.5 168.3 168.4 169.1 169.3 9 State and local government . . 28.4 30.1 30.9 31.3 32.2 32.3 31.4 31.5 31.2 31.4 31.4 31.6 in Other 113.1 124.9 124.4 121.9 123.9 136.5 138.2 138.1 137.1 137.1 137.7 137.6 11 Loans and leases in bank credit2 .... 2,055.1 2,126.3 2,139.6 2,168.2 2,174.2 2,216.4 2,248.6 2,252.8 2,258.9 2,267.2 2,258.2 2,235.0 17 Commercial and industrial 496.8 478.2 476.0 468.1 461.5 463.9 458.6 450.4 457.6 453.3 449.8 448.8 13 Bankers acceptances .0 .0 .0 .0 .0 .0 .0 .0 n.a. n.a. n.a. n.a. 14 Other 496.8 478.2 476.0 468.1 461.5 463.9 458.6 450.4 457.6 453.3 449.8 448.8 15 Real estate 929.5 1,038.3 1,044.0 1,058.8 1,066.5 1,090.5 1,123.8 1,139.5 1,141.4 1,157.0 1,148.9 1,123.1 16 Revolving home equity 127.6 147.8 150.4 152.9 156.4 160.1 163.7 168.1 165.4 166.9 167.8 169.4 17 Other 801.9 890.5 893.6 906.0 910.1 930.4 960.1 971.3 976.0 990.1 981.0 953.8 18 Consumer 319.5 314.2 312.8 313.0 314.6 312.1 313.2 316.5 314.6 316.6 318.3 318.2 19 Security3 78.6 64.1 64.3 82.6 80.9 86.6 86.0 79.6 79.3 74.3 74.9 76.4 20 Federal funds sold to and repurchase agreements with broker-dealers 68.6 52.6 52.4 63.0 63.5 68.7 66.8 62.1 61.7 56.7 58.7 58.4 71 Other 9.9 11.4 11.8 19.5 17.4 17.9 19.2 17.6 17.6 17.7 16.2 18.0 22 State and local government 13.1 12.5 12.4 12.4 12.7 13.0 13.3 13.4 13.3 13.3 13.3 13.5 23 Agricultural 8.3 7.9 7.7 7.5 7.4 7.3 7.4 7.5 7.5 7.5 7.5 7.4 24 Federal funds sold to and repurchase agreements with others 20.5 23.6 24.7 26.5 28.0 25.9 24.3 26.6 25.1 24.7 26.1 28.5 25 All other loans 68.9 77.1 88.2 89.5 91.8 107.2 112.6 110.1 110.6 111.0 110.1 109.9 26 Lease-financing receivables 120.0 110.5 109.4 109.8 110.7 109.9 109.4 109.3 109.5 109.5 109.4 109.2 27 Interbank loans 197.4 171.9 171.2 171.1 165.2 168.9 178.5 164.4 160.3 159.7 159.8 163.1 28 Federal funds sold to and repurchase agreements with commercial banks 101.8 100.4 99.2 100.8 97.8 97.8 99.0 95.6 94.2 90.6 94.9 97.4 29 Other 95.6 71.5 72.0 70.2 67.4 71.1 79.5 68.8 66.1 69.1 64.9 65.7 30 Cash assets4 148.6 148.4 135.9 132.9 140.4 142.1 146.8 139.4 157.5 130.7 139.0 131.0 31 Other assets5 329.2 347.6 347.3 356.6 359.3 364.2 367.6 358.3 376.0 375.6 345.9 347.2 32 Total assets6 3,431.9 3,553.0 3,560.5 3,641.6 3,675.6 3,693.7 3,698.6 3,675.7 3,713.8 3,698.9 3,656.4 3,628.6 Liabilities 33 Deposits 1,932.1 2,016.6 2,041.2 2,047.9 2,077.3 2,095.0 2,129.4 2,114.8 2,144.3 2,107.5 2,113.7 2,107.8 34 Transaction 274.5 291.2 296.4 297.5 300.4 307.4 304.3 291.0 284.6 273.1 297.3 312.9 35 Nontransaction 1,657.6 1,725.5 1,744.8 1,750.4 1,776.9 1,787.7 1,825.1 1,823.8 1,859.7 1,834.4 1,816.4 1,794.9 36 Large time 267.8 269.1 267.2 279.2 271.1 269.0 283.3 286.4 288.1 288.0 281.9 289.0 37 Other 1,389.8 1,456.3 1,477.5 1,471.3 1,505.8 1,518.7 1,541.9 1,537.4 1,571.6 1,546.4 1,534.5 1,505.8 38 Borrowings 744.8 699.8 697.5 723.0 746.8 794.4 786.2 751.1 772.8 773.4 749.1 728.5 39 From banks in the U.S 269.4 208.1 212.4 203.6 216.7 213.9 213.4 204.7 212.9 210.3 208.0 201.0 40 From others 475.4 491.7 485.2 519.4 530.1 580.5 572.8 546.4 559.9 563.1 541.1 527.5 41 Net due to related foreign offices 168.8 208.9 199.3 211.9 196.3 217.2 218.3 216.2 211.9 221.5 209.7 200.5 42 Other liabilities 273.2 255.6 264.7 272.7 277.0 249.2 231.7 248.7 257.5 252.4 240.7 239.7 43 Total liabilities 3,118.9 3,180.9 3,202.7 3,255.6 3,297.4 3,355.8 3,365.6 3,330.7 3,386.4 3,354.8 3,313.2 3,276.5 44 Residual (assets less liabilities)7 313.0 372.0 357.8 386.1 378.3 337.9 333.0 344.9 327.4 344.0 343.2 352.1 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Nonfinancial Statistics • December 2003 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued C. Large domestically chartered commercial banks—Continued Billions of dollars Monthly averages Wednesday figures AAAccccccooouuunnnttt 2002 2003 2003 Sept.' Mar.' Apr.' May' June' July' Aug.' Sept. Sept. 3 Sept. 10 Sept. 17 Sept. 24 Not seasonally adjusted Assets 45 Bank credit 2,798.5 2,923.9 2,946.7 3,026.3 3,056.8 3,049.0 3,039.5 3,055.6 3,067.3 3,073.5 3,059.5 3,020.8 46 Securities in bank credit 744.2 806.1 807.0 855.6 875.1 832.4 795.7 803.3 807.7 810.2 795.8 790.9 47 U.S. government securities 432.5 479.4 492.2 519.3 532.5 498.1 467.2 456.6 476.6 469.9 451.1 443.0 48 Trading account 42.4 42.1 40.6 43.5 38.5 38.0 34.6 38.1 43.9 44.9 39.1 29.6 49 Investment account 390.1 437.3 451.6 475.8 493.9 460.1 432.6 418.6 432.7 425.0 412.0 413.4 50 Mortgage-backed securities . 310.2 334.8 354.4 380.3 389.5 364.2 335.5 320.8 334.2 327.7 316.9 314.8 51 Other 79.8 102.5 97.2 95.5 104.4 95.9 97.1 97.7 98.5 97.3 95.2 98.6 52 One year or less 20.0 24.5 24.7 23.3 24.4 24.2 24.5 24.1 24.6 25.0 24.0 23.6 53 One to five years 46.8 57.6 55.5 55.4 57.6 51.5 52.8 53.1 54.4 52.4 52.1 53.3 54 More than five years .... 13.0 20.4 17.0 16.7 22.4 20.2 19.8 20.5 19.6 19.9 19.0 21.7 55 Other securities 311.7 326.7 314.7 336.3 342.6 334.3 328.5 346.7 331.1 340.3 344.6 347.8 56 Trading account 170.7 171.7 160.5 183.2 187.2 169.0 160.6 177.7 163.1 172.7 176.1 179.6 57 Investment account 141.0 155.0 154.3 153.1 155.4 165.3 167.9 169.0 168.0 167.7 168.5 168.2 58 State and local government . 28.4 30.1 30.7 31.3 32.1 31.6 31.1 31.4 31.1 31.2 31.3 31.4 59 Other 112.7 124.9 123.6 121.8 123.4 133.7 136.8 137.6 136.9 136.4 137.2 136.8 60 Loans and leases in bank credit2 . . . 2,054.3 2,117.9 2,139.7 2,170.7 2,181.8 2,216.7 2,243.7 2,252.2 2,259.6 2,263.2 2,263.8 2,229.9 61 Commercial and industrial 497.0 478.2 478.6 471.1 463.8 465.1 457.3 450.6 456.8 451.7 451.1 448.7 62 Bankers acceptances .0 .0 .0 .0 .0 .0 .0 .0 n.a. n.a. n.a. n.a. 63 Other 497.0 478.2 478.6 471.1 463.8 465.1 457.3 450.6 456.8 451.7 451.1 448.7 64 Real estate 930.5 1,031.5 1,042.2 1,063.2 1,069.0 1,090.6 1,124.7 1,140.8 1,142.8 1,160.0 1,151.7 1,122.4 65 Revolving home equity 128.0 146.2 150.4 154.0 157.4 160.6 164.2 168.7 166.2 167.5 168.5 169.6 66 Other 483.4 561.3 570.0 588.5 591.7 613.2 643.5 654.7 660.1 675.5 665.5 634.6 67 Commercial 319.1 323.9 321.8 320.7 319.9 316.8 316.9 317.5 316.5 317.0 317.7 318.1 68 Consumer 316.5 314.8 313.4 313.9 314.8 310.2 310.6 312.8 311.8 312.8 314.7 314.4 69 Credit cards and related plans . 118.6 105.9 103.6 103.9 104.9 100.0 99.7 99.2 100.1 99.5 100.8 100.4 70 Other 197.9 208.9 209.8 210.0 209.9 210.3 210.9 213.6 211.7 213.3 213.9 214.0 71 Security3 80.0 63.5 62.9 77.3 82.1 85.4 84.8 81.0 79.9 73.2 79.5 77.8 72 Federal funds sold to and repurchase agreements with broker-dealers 69.9 52.2 51.4 59.0 64.5 67.8 65.9 63.1 62.2 55.8 62.3 59.5 73 Other 10.1 11.3 11.6 18.3 17.6 17.6 18.9 17.9 17.7 17.4 17.2 18.3 74 State and local government 13.1 12.5 12.4 12.4 12.7 13.0 13.3 13.4 13.3 13.3 13.3 13.5 75 Agricultural 8.3 7.8 7.7 7.6 7.5 7.4 7.5 7.4 7.5 7.5 7.4 7.4 76 Federal funds sold to and repurchase agreements with others 20.5 23.6 24.7 26.5 28.0 25.9 24.3 26.6 25.1 24.7 26.1 28.5 77 All other loans 70.0 74.9 88.0 88.9 93.6 109.7 112.9 111.8 114.2 112.1 112.2 109.8 78 Lease-financing receivables 118.5 111.2 109.8 109.8 110.3 109.4 108.4 107.8 108.3 107.9 107.8 107.5 79 Interbank loans 191.5 171.9 174.5 171.8 169.4 169.0 173.4 159.0 158.4 151.6 157.3 155.4 80 Federal funds sold to and repurchase agreements with commercial banks 99.0 100.4 101.0 101.3 100.3 97.9 96.3 92.4 93.1 86.0 93.4 92.8 81 Other 92.5 71.5 73.4 70.5 69.1 71.1 77.1 66.5 65.3 65.6 63.9 62.6 82 Cash assets4 145.5 143.4 138.6 132.0 136.0 136.7 137.1 136.5 163.5 129.9 136.0 122.7 83 Other assets5 332.8 346.0 346.8 354.4 355.3 363.6 364.6 362.3 378.6 380.1 349.2 347.3 84 Total assets6 3,424.4 3,540.0 3,562.6 3,640.1 3,673.2 3,674.8 3,670.3 3,669.4 3,723.3 3,690.8 3,657.8 3,602.2 Liabilities 85 Deposits 1,924.5 2,014.7 2,048.6 2,043.6 2,077.7 2,089.1 2,113.0 2,106.3 2,152.6 2,111.1 2,107.8 2,073.0 86 Transaction 270.1 286.8 302.5 293.2 297.6 301.4 292.1 286.2 288.7 270.0 293.9 296.9 87 Nontransaction 1,654.4 1,727.9 1,746.1 1,750.4 1,780.2 1,787.6 1,820.9 1,820.1 1,863.9 1,841.1 1,813.8 1,776.2 88 Large time 265.4 267.7 265.4 277.3 270.7 267.4 281.8 283.8 287.2 287.8 279.9 283.7 89 Other 1,388.9 1,460.2 1,480.7 1,473.1 1,509.5 1,520.3 1,539.1 1,536.3 1,576.6 1,553.3 1,533.9 1,492.5 90 Borrowings 742.5 696.1 701.7 728.8 745.9 787.3 766.2 749.3 761.4 756.3 752.4 736.6 91 From banks in the U.S 262.6 211.5 216.5 205.9 214.8 210.5 208.9 197.9 207.9 200.8 201.6 195.0 92 From nonbanks in the U.S 479.9 484.6 485.2 522.8 531.0 576.8 557.4 551.4 553.5 555.5 550.8 541.5 93 Net due to related foreign offices 169.6 204.8 190.7 211.0 195.2 211.1 218.0 217.3 212.2 221.3 209.3 203.7 94 Other liabilities 274.6 250.7 253.3 271.7 275.5 242.4 231.2 250.0 258.0 252.4 240.4 243.3 95 Totalliabilities 3,111.1 3,166.4 3,194.3 3,255.1 3,294.4 3,330.0 3,328.4 3,322.8 3,384.1 3,341.2 3,309.9 3,256.6 96 Residual (assets less liabilities)7 313.2 373.6 368.3 385.0 378.8 344.9 341.8 346.7 339.2 349.6 347.9 345.6 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities 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 2003 2003 Sept.r Mar.' Apr.' May' June' July' Aug.' Sept. Sept. 3 Sept. 10 Sept. 17 Sept. 24 Seasonally adjusted Assets 1 Bank credit 2,298.4 2,398.4 2,421.3 2,438.7 2,462.6 2,489.7 2,508.5 2,507.1 2,510.0 2,515.5 2,507.8 2,499.6 2 Securities in bank credit 647.2 678.5 690.7 691.7 692.8 701.9 705.2 700.8 703.4 705.9 698.7 697.6 3 U.S. government securities 440.4 472.6 486.4 487.3 490.7 497.4 501.2 496.3 500.3 501.6 494.7 493.2 4 Other securities 206.8 206.0 204.3 204.4 202.2 204.4 203.9 204.5 203.1 204.4 204.0 204.4 5 Loans and leases in bank credit2 .... 1,651.2 1,719.9 1,730.5 1,747.0 1,769.7 1,787.9 1,803.3 1,806.2 1,806.6 1,809.6 1,809.1 1,802.0 6 Commercial and industrial 291.0 297.8 298.5 300.0 301.9 303.2 307.1 309.0 307.9 309.1 309.2 308.8 7 Real estate 989.0 1,036.9 1,048.2 1,056.0 1,071.1 1,085.1 1,097.1 1,097.1 1,098.5 1,102.2 1,098.3 1,093.0 8 Revolving home equity 73.2 82.6 84.3 85.5 88.3 88.9 89.4 90.3 89.8 90.1 90.4 90.3 9 Other 915.8 954.3 963.9 970.5 982.8 996.2 1,007.7 1,006.8 1,008.7 1,012.1 1,007.9 1,002.7 10 Consumer 263.4 272.7 271.8 276.9 281.2 284.2 283.8 285.5 285.2 284.4 287.2 285.5 11 Security3 7.2 8.1 8.2 8.9 9.4 9.3 9.4 9.2 9.3 9.0 9.3 9.3 12 Other loans and leases 100.6 104.3 103.8 105.1 106.1 106.1 106.0 105.4 105.6 104.8 105.2 105.4 13 Interbank loans 98.6 114.3 111.3 121.2 124.3 119.6 116.0 113.0 113.9 107.7 113.5 115.2 14 Cash assets4 122.9 131.4 134.1 134.3 136.7 140.3 142.6 138.4 140.8 132.1 138.4 138.9 15 Other assets5 145.0 147.4 149.0 152.9 153.8 158.1 162.7 164.7 168.5 160.8 162.7 164.1 16 Total assets6 2,633.9 2,760.5 2,784.9 2,816.4 2,846.6 2,876.7 2,898.4 2,891.6 2,901.5 2,884.5 2,890.6 2,886.2 Liabilities 17 Deposits 2,053.9 2,120.6 2,136.8 2,162.1 2,182.6 2,199.8 2,215.1 2,209.9 2,223.2 2,203.7 2,210.2 2,204.4 18 Transaction 298.1 316.7 324.8 325.8 327.6 336.5 339.0 332.9 327.8 318.0 334.0 349.5 19 Nontransaction 1,755.8 1,803.9 1,812.0 1,836.3 1,855.0 1,863.2 1,876.1 1,877.0 1,895.4 1,885.7 1,876.2 1,854.9 20 Large time 300.3 314.4 315.0 316.6 319.3 317.2 316.9 318.5 316.8 319.4 318.4 318.0 21 Other 1,455.5 1,489.5 1,497.0 1,519.7 1,535.7 1,546.0 1,559.1 1,558.5 1,578.6 1,566.3 1,557.8 1,536.9 22 Borrowings 353.9 396.9 401.4 410.1 415.5 423.7 438.3 439.9 431.7 439.8 442.1 446.9 23 From banks in the U.S 123.9 155.5 157.3 154.9 157.2 160.0 168.8 164.9 155.7 156.0 168.4 171.6 24 From others 230.0 241.4 244.1 255.2 258.4 263.7 269.5 275.0 276.0 283.8 273.7 275.2 25 Net due to related foreign offices 8.6 10.7 12.8 12.4 12.0 11.8 12.0 14.1 13.7 14.1 15.2 13.0 26 Other liabilities 66.3 79.6 79.5 80.0 79.4 80.6 80.7 80.0 81.7 79.8 78.9 79.3 27 Total liabilities 2,482.8 2,607.8 2,630.5 2,664.7 2,689.5 2,715.8 2,746.1 2,743.9 2,750.3 2,737.4 2,746.4 2,743.5 28 Residual (assets less liabilities)7 151.1 152.7 154.4 151.7 157.1 160.9 152.3 147.7 151.2 147.0 144.1 142.7 Not seasonally adjusted Assets 29 Bank credit 2,300.8 2,395.2 2,419.5 2,437.1 2,460.3 2,484.6 2,505.3 2,509.2 2,509.3 2,515.8 2,511.5 2,504.6 30 Securities in bank credit 647.3 681.2 692.2 690.9 692.4 700.0 703.4 701.0 702.5 706.2 699.1 699.1 31 U.S. government securities 440.5 475.3 487.9 486.5 490.2 495.6 499.5 496.4 499.4 501.8 495.2 494.8 32 Other securities 206.8 206.0 204.3 204.4 202.2 204.4 203.9 204.5 203.1 204.4 204.0 204.4 33 Loans and leases in bank credit2 .... 1,653.4 1,713.9 1,727.3 1,746.2 1,767.9 1,784.6 1,801.9 1,808.2 1,806.9 1,809.7 1,812.3 1,805.5 34 Commercial and industrial 289.3 297.7 300.7 302.6 304.1 304.1 305.8 307.3 306.1 306.4 307.5 307.7 35 Real estate 989.5 1,034.8 1,046.4 1,055.5 1,070.0 1,083.4 1,096.3 1,097.7 1,097.5 1,101.6 1,099.3 1,095.1 36 Revolving home equity 73.4 82.3 84.1 85.5 88.3 88.4 89.1 90.6 89.4 90.1 90.8 90.9 37 Other 916.1 952.5 962.3 969.9 981.7 995.0 1,007.3 1,007.1 1,008.1 1,011.5 1,008.5 1,004.2 38 Consumer 265.4 269.9 268.4 274.8 277.7 280.5 282.6 287.2 285.5 285.1 289.6 288.3 39 Credit cards and related plans . . 112.3 113.7 112.1 117.7 118.3 120.0 120.3 123.6 122.9 121.8 125.7 124.3 40 Other 153.1 156.2 156.3 157.2 159.4 160.5 162.4 163.6 162.7 163.3 163.9 164.0 41 Security3 7.1 8.4 8.4 8.7 9.3 9.2 9.4 9.1 9.7 9.4 9.2 8.7 42 Other loans and leases 102.1 103.2 103.3 104.6 106.8 107.4 107.8 106.9 108.1 107.2 106.8 105.7 4.3 Interbank loans 96.9 120.7 119.1 116.2 121.4 115.0 115.3 111.6 119.4 115.5 111.9 103.3 44 Cash assets4 122.5 126.7 131.8 133.2 134.4 138.0 137.9 137.9 150.2 136.2 135.3 133.0 45 Other assets5 145.0 147.4 149.0 152.9 153.8 158.1 162.7 164.7 168.5 160.8 162.7 164.1 46 Total assets6 2,634.0 2,759.0 2,788.7 2,808.7 2,839.1 2,864.6 2,889.8 2,891.7 2,915.9 2,896.7 2,889.6 2,873.5 Liabilities 47 Deposits 2,043.1 2,125.6 2,148.5 2,154.0 2,173.0 2,186.1 2,197.0 2,198.6 2,222.4 2,204.3 2,197.3 2,177.2 48 Transaction 297.4 313.1 325.1 320.3 325.3 333.9 335.2 332.1 336.6 323.7 331.7 339.0 49 Nontransaction 1,745.7 1,812.6 1,823.4 1,833.7 1,847.7 1,852.2 1,861.8 1,866.5 1,885.8 1,880.5 1,865.6 1,838.2 50 Large time 300.3 314.4 315.0 316.6 319.3 317.2 316.9 318.5 316.8 319.4 318.4 318.0 51 Other 1,445.4 1,498.1 1,508.4 1,517.1 1,528.4 1,535.0 1,544.9 1,548.0 1,569.0 1,561.2 1,547.2 1,520.2 52 Borrowings 353.9 396.9 401.4 410.1 415.5 423.7 438.3 439.9 431.7 439.8 442.1 446.9 53 From banks in the U.S 123.9 155.5 157.3 154.9 157.2 160.0 168.8 164.9 155.7 156.0 168.4 171.6 54 From others 230.0 241.4 244.1 255.2 258.4 263.7 269.5 275.0 276.0 283.8 273.7 275.2 55 Net due to related foreign offices 8.6 10.7 12.8 12.4 12.0 11.8 12.0 14.1 13.7 14.1 15.2 13.0 56 Other liabilities 66.3 79.6 79.5 80.0 79.4 80.6 80.7 80.0 81.7 79.8 78.9 79.3 57 Total liabilities 2,471.9 2,612.8 2,642.2 2,656.6 2,679.9 2,702.2 2,728.0 2,732.6 2,749.6 2,738.0 2,733.6 2,716.4 58 Residual (assets less liabilities)7 162.1 146.2 146.4 152.1 159.2 162.5 161.8 159.1 166.3 158.7 156.1 157.1 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Nonfinancial Statistics • December 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 2003 2003 Sept. Mar. Apr. May June July Aug. Sept. Sept. 3 Sept. 10 Sept. 17 Sept. 24 Seasonally adjusted Assets 1 Bank credit 622.1 663.5 655.0 669.6 672.3 649.9 630.6 629.9 629.5 638.2 627.4 625.9 2 Securities in bank credit 249.8 283.8 277.3 288.5 288.4 267.7 267.5 273.4 272.3 273.5 268.0 271.2 3 U.S. government securities 89.5 122.5 124.2 127.4 124.2r 113.9' 106.5r 107.4 107.1 109.4 106.3 106.8 4 Other securities 160.3 161.3 153.1 161.2 164.2' 153.8' 161.0' 166.0 165.2 164.1 161.7 164.4 5 Loans and leases in bank credit2 .... 372.2 379.7 377.7 381.0 383.9 382.2 363.1 356.6 357.2 364.7 359.4 354.7 6 Commercial and industrial 185.0 171.7 172.2 170.4 163.3 162.6' 156.1' 151.2 154.2 153.2 152.6 150.3 7 Real estate 19.0 19.8 19.0 19.3 19.4 19.4 19.1 18.8 18.9 18.9 18.9 18.8 8 Security3 95.2 121.4 118.1 118.9 121.8 118.9 111.6 113.4 110.5 118.1 113.4 112.8 y Other loans and leases 73.0 66.7 68.3 72.4 79.3 81.3' 76.3' 73.2 73.5 74.4 74.5 72.8 10 Interbank loans 21.2 27.2 22.4 24.6 30.7 33.1 32.4 30.6 33.6 33.2 29.4 30.4 ii Cash assets4 46.6 43.9 49.7 51.1 54.3 54.0 54.3 53.2 55.5 53.4 56.6 49.9 12 Other assets5 26.8 30.0 32.5 36.6 36.7 33.2 36.3 29.9 30.5 29.8 26.0 30.2 13 Total assets6 716.3 764.1 759.2 781.4 793.5 769.7 753.2 743.1 748.6 754.2 739.0 735.9 Liabilities 14 Deposits 492.3 448.4 434.6 433.4 442.6 453.4 455.2 451.0 448.8 455.0 449.7 453.8 15 Transaction 10.1 11.5 11.2 10.8 11.4 11.4 11.8 10.9 11.3 11.4 10.7 10.3 16 Nontransaction 482.2 436.9 423.4 422.6 431.2 442.0 443.4 440.1 437.5 443.6 439.0 443.5 17 Borrowings 227.1 293.2 297.7 305.1 315.8 297.0 293.6 290.3 291.9 293.8 291.8 281.2 18 From banks in the U.S 22.6 33.7 27.4 31.3 34.7 36.8 33.8 33.6 35.3 29.5 35.4 31.9 19 From others 204.5 259.5 270.3 273.7 281.1 260.3 259.8 256.7 256.6 264.3 256.4 249.3 20 Net due to related foreign ofifices -84.7 -83.8 -72.9 -77.9 -81.9 -86.0 -103.5 -99.6 -100.7 -100.0 -94.2 -100.1 21 Other liabilities 91.7 94.7 90.6 106.8 113.5 108.9 116.1 110.5 115.4 114.4 106.5 106.5 22 Total liabilities 726.4 752.5 750.0 767.4 790.0 773.3 761.4 752.2 755.4 763.2 753.9 741.4 23 Residual (assets less liabilities)7 -10.1 11.6 9.2 13.9 3.5 -3.6 -8.2 -9.0 -6.8 -9.1 -15.0 -5.4 Not seasonally adjusted Assets 24 Bank credit 618.5 661.7 654.9 664.8 668.8 642.4 624.1' 625.8 620.0 629.9 626.1 624.0 25 Securities in bank credit 249.8 283.8 277.3 288.5 288.4 267.7 267.5 273.4 272.3 273.5 268.0 271.2 26 US. government securities 89.5 122.5 124.2 127.4 124.2' 113.9' 106.5' 107.4 107.1 109.4 106.3 106.8 27 Trading account 16.1 37.2 39.8 43.1 43.1' 39.9' 38.7' 39.6 40.2 39.9 38.2 39.2 28 Investment account 73.4 85.4 84.4 84.3 81.1 74.0 67.9 67.8 66.9 69.5 68.1 67.5 29 Other securities 160.3 161.3 153.1 161.2 164.2' 153.8' 161.0' 166.0 165.2 164.1 161.7 164.4 30 Trading account 105.1 101.6 97.9 105.2 105.9' 96.5' 100.7' 103.6 104.5 103.6 101.4 104.0 31 Investment account 55.2 59.7 55.2 56.0 58.3 57.3 60.3' 62.3 60.7 60.5 60.4 60.4 32 Loans and leases in bank credit2 .... 368.7 377.9 377.6 376.3 380.4 374.8 356.6 352.4 347.7 356.4 358.1 352.8 33 Commercial and industrial 184.9 173.2 171.3 168.6 162.8 161.6' 154.9' 151.1 152.9 152.2 152.6 150.7 34 Real estate 19.0 19.8 19.0 19.3 19.4 19.4 19.1 18.8 18.9 18.9 18.9 18.8 35 Security3 92.3 117.3 118.5 116.6 119.3 114.1 107.5 109.9 102.7 111.6 112.9 111.4 36 Other loans and leases 72.4 67.6 68.8 71.8 78.9 79.7' 75.1' 72.5 73.1 73.7 73.8 71.8 37 Interbank loans 21.2 27.2 22.4 24.6 30.7 33.1 32.4 30.6 33.6 33.2 29.4 30.4 38 Cash assets4 46.3 42.7 47.5 49.4 51.8 51.1 52.1 52.8 53.7 51.8 55.6 50.5 39 Other assets5 26.8 30.7 32.4 36.7 35.3 32.1 35.8 29.9 30.6 30.0 26.0 30.1 40 Total assets6 712.4 761.8 756.7 775.1 786.1 758.2 743.9 738.6 737.4 744.4 736.6 734.5 Liabilities 41 Deposits 474.1 452.4 440.6 438.8 440.8 443.7 439.7 434.5 430.5 435.5 430.4 440.0 42 Transaction 10.3 11.1 10.6 10.4 11.0 11.4 11.5 11.1 11.2 11.3 10.7 10.8 43 Nontransaction 463.9 441.3 430.0 428.4 429.7 432.3 428.3 423.4 419.2 424.3 419.7 429.2 44 Borrowings 227.1 293.2 297.7 305.1 315.8 297.0 293.6 290.3 291.9 293.8 291.8 281.2 45 From banks in the U.S 22.6 33.7 27.4 31.3 34.7 36.8 33.8 33.6 35.3 29.5 35.4 31.9 46 From others 204.5 259.5 270.3 273.7 281.1 260.3 259.8 256.7 256.6 264.3 256.4 249.3 47 Net due to related foreign offices -83.1 -81.6 -73.3 -77.5 -83.7 -89.3 -104.9 -98.3 -100.8 -100.0 -93.4 -96.7 48 Other liabilities 92.6 96.3 90.3 107.1 111.9 106.3 114.9 111.6 115.3 114.5 107.2 109.4 49 Total liabilities 710.7 760.3 755.3 773.5 784.8 757.6 743.3 738.0 736.8 743.9 736.0 733.9 50 Residual (assets less liabilities)7 1.7 1.5 1.5 1.6 1.3 .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 2003 2003 Sept. Mar. Apr. May June July Aug. Sept. Sept. 3 Sept. 10 Sept. 17 Sept. 24 Not seasonally adjusted MEMO Large domestically chartered banks, adjusted for mergers 1 Revaluation gains on off-balance-sheet items8 117.2 115.1 105.7 128.1 135.0 111.7' 95.2' 114.9 100.1 111.1 114.8 116.6 2 Revaluation losses on off-balancesheet items8 98.6 91.3 81.4 105.1 110.0 85.4' 79.4 96.0 79.7 92.6 96.0 97.6 3 Mortgage-backed securities9 345.9 381.4 400.8 427.2' 436.8' 412.7 387.6 373.3 387.7 380.4 369.1 367.1 4 Pass-through 255.5r 276.3r 288.6 314.3 324.8 301.6' 274.1 262.6 274.2 268.3 259.6 256.9 5 CMO, REMIC, and other 90.4 105.2' 112.2 112.9 112.0' 111.1 113.5 110.7 113.5 112.1 109.4 110.2 6 Net unrealized gains (losses) on available-for-sale securities'0 11.3r 11.7 10.1 11.3' 13.0' 6.7' -.1' 2.5 -2.5 1.8 3.0 3.1 7 Off-shore credit to U.S. residents" .... 19.0 18.2 17.5 17.3 16.6 15.5 14.7 14.3 13.9 14.6 14.6 14.3 8 Securitized consumer loans12 142.3 152.9 154.6 155.3 157.3 161.6 162.5 160.8 162.1 160.9 159.7 160.1 9 Credit cards and related plans 125.0 136.7 138.7 139.4 140.6 144.0 144.5 144.3 144.4 144.3 143.3 143.8 10 Other 17.3 16.1 15.9 15.9 16.6 17.5 18.0 16.5 17.8 16.6 16.4 16.3 11 Securitized business loans12 17.8 15.8 10.0 10.2 9.9 8.4 7.2 7.9 6.8 8.1 8.1 8.0 Small domestically chartered commercial banks, adjusted for mergers 12 Mortgage-backed securities9 301.9r 325.4' 336.1 337.1 336.7' 331.8' 330.1' 328.2 330.7 330.5 325.1 329.2 13 Securitized consumer loans12 199.5 202.4 204.6 204.3 204.0 200.6 201.8 202.9 202.7 202.7 201.9 203.2 14 Credit cards and related plans 195.9 194.3 196.7 196.5 196.3 193.0 194.2 195.3 195.1 195.1 194.3 195.7 15 Other 3.6 8.1 7.9 7.8 7.7 7.6 7.6 7.6 7.6 7.6 7.6 7.6 Foreign-related institutions 16 Revaluation gains on oflf-balancesheet items8 63.0 65.4 64.9 73.6 72.6 65.3 65.9 67.8 68.0 67.1 64.9 68.8 17 Revaluation losses on off-balancesheet items8 61.7 63.6 62.4 72.6 72.6 64.9 64.9 66.9 67.0 66.3 64.0 67.8 18 Securitized business loans12 8.1 4.1 3.3 3.0 2.5 1.5 1.4 1.3 1.3 1.3 1.3 1.3 NOTE. Tables 1.26, 1.27, and 1.28 have been revised to reflect changes in the Board's H.8 acquiring bank. Balance sheet data for acquired banks are obtained from Call Reports, and a statistical release, "Assets and Liabilities of Commercial Banks in the United States." Table ratio procedure is used to adjust past levels. 1.27, "Assets and Liabilities of Large Weekly Reporting Commercial Banks," and table 1.28, 2. Excludes federal funds sold to, reverse RPs with, and loans made to commercial banks "Large Weekly Reporting U.S. Branches and Agencies of Foreign Banks," are no longer in the United States, all of which are included in "Interbank loans." being published in the Bulletin. Instead, abbreviated balance sheets for both large and small 3. Consists of reverse RPs with brokers and dealers and loans to purchase and carry domestically chartered banks have been included in table 1.26, parts C and D. Data are both securities. merger-adjusted and break-adjusted. In addition, data from large weekly reporting U.S. 4. Includes vault cash, cash items in process of collection, balances due from depository branches and agencies of foreign banks have been replaced by balance sheet estimates of all institutions, and balances due from Federal Reserve Banks. foreign-related institutions and are included in table 1.26, part E. These data are break- 5. Excludes the due-from position with related foreign offices, which is included in "Net adjusted. due to related foreign offices." The not-seasonally-adjusted data for all tables now contain additional balance sheet items, 6. Excludes unearned income, reserves for losses on loans and leases, and reserves for which were available as of October 2, 1996. transfer risk. Loans are reported gross of these items. 1. Covers the following types of institutions in the fifty states and the District of Columbia: 7. This balancing item is not intended as a measure of equity capital for use in capital domestically chartered commercial banks that submit a weekly report of condition (large adequacy analysis. On a seasonally adjusted basis, this item reflects any differences in the domestic); other domestically chartered commercial banks (small domestic); branches and seasonal patterns estimated for total assets and total liabilities. agencies of foreign banks, and Edge Act and agreement corporations (foreign-related institu- 8. Fair value of derivative contracts (interest rate, foreign exchange rate, other commodity tions). Excludes International Banking Facilities. Data are Wednesday values or pro rata and equity contracts) in a gain/loss position, as determined under FASB Interpretation No. 39. averages of Wednesday values. Large domestic banks constitute a universe; data for small 9. Includes mortgage-backed securities issued by U.S. government agencies. U.S. domestic banks and foreign-related institutions are estimates based on weekly samples and on government-sponsored enterprises, and private entities. quarter-end condition reports. Data are adjusted for breaks caused by reclassifications of 10. Difference between fair value and historical cost for securities classified as availableassets and liabilities. for-sale under FASB Statement No. 115. Data are reported net of tax effects. Data shown are The data for large and small domestic banks presented on pp. A17-19 are adjusted to restated to include an estimate of these tax effects. remove the estimated effects of mergers between these two groups. The adjustment for 11. Mainly commercial and industrial loans but also includes an unknown amount of credit mergers changes past levels to make them comparable with current levels. Estimated extended to other than nonfinancial businesses. quantities of balance sheet items acquired in mergers are removed from past data for the bank 12. Total amount outstanding. group that contained the acquired bank and put into past data for the group containing the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic NonfinancialS tatistics • December 2003 1.32 COMMERCIAL PAPER OUTSTANDING Millions of dollars, seasonally adjusted, end of period Year ending December 2003 IItteemm 1998 1999 2000 2001 2002 Mar. Apr. May June July Aug. 1 All issuers 1,163,303 1,403,023 1,619,274 1,458,870 1,347,997 1,341,270 1,342,147 1,365,704 1,324,911 1,347,286 1,336,910 Financial companies' 2 Dealer-placed paper, total2 614,142 786,643 963,070 967,748 976,163 946,773 961,002 1,003,088 974,116 994,384 976,065 3 Directly placed paper, total3 322,030 337,240 312,771 266,276 217,787 244,504 232,879 222,597 219,960 218,311 227,418 4 Nonfinancial companies4 227,132 279,140 343,433 224,847 154,047 149,993 148,266 140,020 130,835 134,591 133,427 1. Institutions engaged primarily in commercial, savings, and mortgage banking; sales, 3. As reported by financial companies that place their paper directly with investors. personal and mortgage financing; factoring, finance leasing, and other business lending; 4. Includes public utilities and firms engaged primarily in such activities as communicainsurance underwriting; and other investment activities. tions, construction, manufacturing, mining, wholesale and retail trade, transportation, and 2. Includes all financial-company paper sold by dealers in the open market. services. 1.33 PRIME RATE CHARGED BY BANKS Short-Term Business Loans1 Percent per year Average Average Date of change Rate Period rate rate 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 July Aug. Sept. Oct. 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 June July Aug. Sept. Aug. 29 Sept. 5 Sept. 12 Sept. 19 Sept. 26 MONEY MARKET INSTRUMENTS 1 Federal funds12-3 6.24 3.88 1.67 1.22 1.01 1.03 1.01 1.00 1.01 0.96 1.02 1.00 2 Discount window primary credit2-4 n.a. n.a. n.a. 2.20 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 Commercial paper*-5 6 Nonfinancial 3 1 -month 6.27 3.78 1.67 1.06 1.01 1.03 1.02 1.02 1.04 1.01 1.02 1.01 4 2-month 6.29 3.68 1.67 1.03 1.02 1.03 1.03 1.03 1.04 1.03 1.02 1.02 5 3-month 6.31 3.65 1.69 1.01 1.01 1.04 1.04 1.04 1.05 1.04 1.04 1.04 Financial 6 1-month 6.28 3.80 1.68 1.08 1.02 1.04 1.04 1.04 1.05 1.04 1.04 1.03 7 2-month 6.30 3.71 1.69 1.04 1.03 1.05 1.05 1.05 1.06 1.05 1.05 1.05 8 3-month 6.33 3.65 1.70 1.02 1.03 1.06 1.06 1.07 1.07 1.06 1.05 1.05 Certificates of deposit, secondary market3 7 9 1-month 6.35 3.84 1.72 1.10 1.05 1.07 1.07 1.07 1.08 1.07 1.07 1.07 10 3-month 6.46 3.71 1.73 1.04 1.05 1.08 1.08 1.09 1.10 1.08 1.08 1.07 11 6-month 6.59 3.66 1.81 1.02 1.06 1.13 1.13 1.14 1.16 1.12 1.12 1.12 12 Eurodollar deposits, 3-month3-8 6.45 3.70 1.73 1.03 1.04 1.07 1.08 1.07 1.09 1.07 1.10 1.07 U.S. Treasury bills Secondary market3-5 13 4-week n.a. 2.43 1.60 0.96 0.88 0.93 0.89 0.97 0.95 0.92 0.88 0.86 14 3-month 5.82 3.40 1.61 0.92 0.90 0.95 0.94 0.98 0.95 0.94 0.93 0.93 15 6-month 5.90 3.34 1.68 0.92 0.95 1.03 1.01 1.04 1.03 1.01 1.00 1.01 U.S. TREASURY NOTES AND BONDS Constant maturities5 16 1-year 6.11 3.49 2.00 1.01 1.12 1.31 1.24 1.35 1.33 1.22 1.21 1.22 17 2-year 6.26 3.83 2.64 1.23 1.47 1.86 1.71 1.98 1.92 1.69 1.65 1.66 18 3-year 6.22 4.09 3.10 1.51 1.93 2.44 2.23 2.55 2.51 2.25 2.16 2.15 19 5-year 6.16 4.56 3.82 2.27 2.87 3.37 3.18 3.49 3.51 3.23 3.10 3.07 20 7-year 6.20 4.88 4.30 2.84 3.45 3.96 3.74 4.04 4.05 3.79 3.68 3.63 21 10-year 6.03 5.02 4.61 3.33 3.98 4.45 4.27 4.49 4.52 4.34 4.23 4.16 22 20-year 6.23 5.63 5.43 4.34 4.92 5.39 5.21 5.38 5.42 5.27 5.18 5.09 Treasury long-term average'0-'' 23 25 years and above n.a. n.a. 5.41 4.45 5.00 5.41 5.23 5.37 5.41 5.30 5.22 5.13 STATE AND LOCAL NOTES AND BONDS Moody's series'2 24 Aaa 5.58 5.01 4.87 4.07 4.59 4.82 4.63 4.80 4.84 4.73 4.44 4.50 25 Baa 6.19 5.75 5.64 4.68 5.17 5.42 5.23 5.40 5.44 5.33 5.04 5.10 26 Bond Buyer series13 5.71 5.15 5.04 4.33 4.74 5.10 4.92 5.07 5.07 4.94 4.84 4.81 CORPORATE BONDS 27 Seasoned issues, all industries14 7.98 7.49 7.10 5.70 6.13 6.46 6.26 6.43 6.45 6.33 6.25 6.14 Rating group 28 Aaa15 7.62 7.08 6.49 4.97 5.49 5.88 5.72 5.87 5.90 5.78 5.72 5.59 29 Aa 7.83 7.26 6.93 5.72 6.07 6.31 6.13 6.28 6.31 6.20 6.12 6.01 30 A 8.11 7.67 7.18 5.92 6.35 6.64 6.42 6.61 6.63 6.50 6.40 6.29 31 Baa 8.37 7.95 7.80 6.19 6.62 7.01 6.79 6.97 6.96 6.86 6.77 6.68 MEMO Dividend-price ratio16 32 Common stocks 1.15 1.32 1.61 1.64 1.64 1.67 1.63 1.65 1.62 1.62 1.61 1.66 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:// 14. Daily figures are averages of Aaa, Aa, A, and Baa yields from Moody's Investors www.federalreserve.gov/releases/h 15/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 onfinancialS tatistics • December 2003 1.36 STOCK MARKET Selected Statistics 2003 IInnddiiccaattoorr 22000000 22000011 22000022 Jan. Feb. Mar. Apr. May June July Aug. Sept. Prices and trading volume (averages of daily figures) CCCCCCCooooooommmmmmmmmmmmmmooooooonnnnnnn ssssssstttttttoooooooccccccckkkkkkk ppppppprrrrrrriiiiiiiccccccceeeeeeesssssss (((((((iiiiiiinnnnnnndddddddeeeeeeexxxxxxxeeeeeeesssssss))))))) 1111111 NNNNNNNeeeeeeewwwwwww YYYYYYYooooooorrrrrrrkkkkkkk SSSSSSStttttttoooooooccccccckkkkkkk EEEEEEExxxxxxxccccccchhhhhhhaaaaaaannnnnnngggggggeeeeeee (((((((DDDDDDDeeeeeeeccccccc....... 33333331111111,,,,,,, 1111111999999966666665555555 ======= 55555550000000))))))) 6,806.46 6,407.95 5,571.46 5,055.78 4,738.56 4,724.22 4,977.45 5,269.96 5,583.60 5,567.94 5,580.87 5,748.80 2222222 IIIIIIInnnnnnnddddddduuuuuuussssssstttttttrrrrrrriiiiiiiaaaaaaalllllll 809.40 749.46 656.44 587.78 553.90 558.10 583.74 613.26 649.25 648.00 651.19 670.18 3333333 TTTTTTTrrrrrrraaaaaaannnnnnnssssssspppppppooooooorrrrrrrtttttttaaaaaaatttttttiiiiiiiooooooonnnnnnn 414.73 444.45 430.63 394.60 367.55 366.90 395.85 425.12 441.81 445.29 451.31 464.61 4444444 UUUUUUUtttttttiiiiiiillllllliiiiiiitttttttyyyyyyy 478.99 377.72 260.50 236.42 214.64 211.45 221.06 238.33 254.16 244.67 238.06 243.37 5555555 FFFFFFFiiiiiiinnnnnnnaaaaaaannnnnnnccccccceeeeeee 552.48 596.61 554.88 522.51 485.72 486.71 522.05 549.91 579.48 588.81 582.20 593.10 6666666 SSSSSSStttttttaaaaaaannnnnnndddddddaaaaaaarrrrrrrddddddd &&&&&&& PPPPPPPoooooooooooooorrrrrrr'''''''sssssss CCCCCCCooooooorrrrrrrpppppppooooooorrrrrrraaaaaaatttttttiiiiiiiooooooonnnnnnn (((((((1111111999999944444441111111^^^^^^^11111113333333 ------- 11111110000000)))))))1111111 1,427.22 1,194.18 993.94 895.84 837,62 846.62 890.03 935.96 988.00 992.54 989.53 1,019.44 7777777 AAAAAAAmmmmmmmeeeeeeerrrrrrriiiiiiicccccccaaaaaaannnnnnn SSSSSSStttttttoooooooccccccckkkkkkk EEEEEEExxxxxxxccccccchhhhhhhaaaaaaannnnnnngggggggeeeeeee (((((((AAAAAAAuuuuuuuggggggg....... 33333331111111,,,,,,, 1111111999999977777773333333 ======= 55555550000000)))))))2222222 922.22 879.08 860.11 824.64 818.84 822.34 837.92 894.74 962.46 959.26 960.50 990.40 VVVVVVVooooooollllllluuuuuuummmmmmmeeeeeee ooooooofffffff tttttttrrrrrrraaaaaaadddddddiiiiiiinnnnnnnggggggg (((((((ttttttthhhhhhhooooooouuuuuuusssssssaaaaaaannnnnnndddddddsssssss ooooooofffffff ssssssshhhhhhhaaaaaaarrrrrrreeeeeeesssssss))))))) 8888888 NNNNNNNeeeeeeewwwwwww YYYYYYYooooooorrrrrrrkkkkkkk SSSSSSStttttttoooooooccccccckkkkkkk EEEEEEExxxxxxxccccccchhhhhhhaaaaaaannnnnnngggggggeeeeeee 1,026,867 1,216,529 1,411,689 1,441,846 1,302,011 1,403,742 1,381,580 1,455,858 1,472,560 1,412,818 1,175,615 1,397,876 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 198,790 150,450 134,380 134,910 134,030 135,910 140,450 146,380 148,550 148,450 149,660 155,870 FFFFFFFrrrrrrreeeeeeeeeeeeee cccccccrrrrrrreeeeeeedddddddiiiiiiittttttt bbbbbbbaaaaaaalllllllaaaaaaannnnnnnccccccceeeeeeesssssss aaaaaaattttttt bbbbbbbrrrrrrroooooookkkkkkkeeeeeeerrrrrrrsssssss4444444 11111111111111 MMMMMMMaaaaaaarrrrrrrgggggggiiiiiiinnnnnnn aaaaaaaccccccccccccccooooooouuuuuuunnnnnnntttttttsssssss5555555 100,680 101,640 95,690 96,430 95,400 90,830 88,770 88,540 87,920 91,210 88,040 88,620 11111112222222 CCCCCCCaaaaaaassssssshhhhhhh aaaaaaaccccccccccccccooooooouuuuuuunnnnnnntttttttsssssss 84,400 78,040 73,340 66,200 67,260 68,860 70,080 71,270 74,350 76,170 72,000 74,760 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 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 1 Federal debt outstanding 5,834.5 5,970.3 6,032.4 6,153.3 6,255.4 6,433.0 6,487.7 6,697.1 6,810.3r 2 Public debt securities 5,807.5 5,943.4 6,006.0 6,126.5 6,228.2 6,405.7 6,460.8 6,670.1 6,783.2r 3 Held by public 3,338.7 3,393.8 3,443.7 3,463.5 3,552.6 3,647.4 3,710.8 3,816.3 3,923.9' 4 Held by agencies 2,468.8 2,549.7 2,562,4 2,662.9 2,675.6 2,758.3 2,750.0 2,853.8 2,859.4' 5 Agency securities 27.0 26.8 26.4 26.8 27.2 27.3 26.9 27.0 27.0' 6 Held by public 27.0 26.8 26.4 26.8 27.2 27.3 26.9 27.0 27.0' 7 Held by agencies .0 .0 .0 .0 .0 .0 .0 .0 .0' 8 Debt subject to statutory limit 5,732.6 5,871.4 5,935.1 6,058.3 6,161.4 6,359.4 6,400.0 6,625.5 6,737.6r 9 Public debt securities 5,732.4 5,871.2 5,935.0 6,058.1 6,161.1 6,359.1 6,399.8 6,625.3 6,736.3' 10 Other debt1 .2 .3 .2 .2 .3 .3 .2 .2 .3' MEMO 11 Statutory debt limit 5,950.0 5,950.0 5,950.0 6,400.0 6,400.0 6,400.0 6,400.0 7,384.0 7,384.0' 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 Q4 Ql Q2 Q3 1 Total gross public debt 5,776.1 5,662.2 5,943.4 6,405.7 6,405.7 6,460.8 6,670.1 6,783.2 By type 2 Interest-bearing 5,766.1 5,618.1 5,930.8 6,391.4 6,391.4 6,474.0 6,656.5 6,754.8 3 Marketable 3,281.0 2,966.9 2,982.9 3,205.1 3,205.1 3,331.8 3,379.0 3,460.6 4 Bills 737.1 646.9 811.3 888.8 888.8 955.0 927.8 918.2 5 Notes 1,784.5 1,557.3 1,413.9 1,580.8 1,580.8 1,622.9 1,713.7 1,799.4 6 Bonds 643.7 626.5 602.7 588.7 588.7 585.7 582.4 576.8 7 Inflation-indexed notes and bonds1 100.7 121.2 140.1 146.9 146.9 153.2 155.0 166.1 8 Nonmarketable2 2,485.1 2,651.2 2,947.9 3,186.3 3,186.3 3,142.2 3,277.6 3,294.2 9 State and local government series 165.7 151.0 146.3 153.4 153.4 148.8 140.5 148.4 10 Foreign issues3 31.3 27.2 15.4 11.2 11.2 12.2 11.7 11.0 11 Government 31.3 27.2 15.4 11.2 11.2 12.2 11.7 11.0 12 Public .0 .0 .0 .0 .0 .0 .0 .0 13 Savings bonds and notes 179.4 176.9 181.5 184.8 184.8 187.3 189.9 192.6 14 Government account series4 2,078.7 2,266.1 2,574.8 2,806.9 2,806.9 2,763.8 2,905.5 2,912.2 15 Non-interest-bearing 10.0 44.2 12.7 14.3 14.3 13.8 13.6 13.4 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 2,757.8 2,763.3 2,853.3 n.a. 17 Federal Reserve Banks6 478.0 511.7 551.7 629.4 629.4 641.5 652.1 656.1 18 Private investors 3,233.9 2,880.4 2,819.5 3,018.5 3,018.5 3,056.0 3,164.7 n.a. 19 Depository institutions 248.7 201.5 181.5 222.6 222.6 153.1 144.8 n.a. 20 Mutual funds 228.6 220.8 257.5 279.0 279.0 296.3 298.5 n.a. 21 Insurance companies 123.4 110.2 105.7 133.9 133.9 151.2 161.7 n.a. 22 State and local treasuries7 266.8 236.2 256.5 274.2 274.2 306.2 318.5 n.a. Individuals 23 Savings bonds 186.4 184.8 190.3 194.9 194.9 196.9 199.1 n.a. 24 Pension funds 321.0 304.1 281.6 289.9 289.9 244.2 254.5 n.a. 25 Private 109.8 108.4 104.2 113.6 113.6 66.9 69.1 n.a. 26 State and Local 211.2 195.7 177.4 176.3 176.3 177.2 185.4 n.a. 27 Foreign and international8 1,268.7 1,034.2 1,053.1 1,212.7 1,212.7 1,254.6 1,355.3 n.a. 28 Other miscellaneous investors7-9 590.3 588.7 493.3 433.8 433.8 443.4 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 • December 2003 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1 Millions of dollars, daily averages 2003 2003, week ending June July Aug. July 30 Aug. 6 Aug. 13 Aug. 20 Aug. 27 Sept. 3 Sept. 10 Sept. 17 Sept. 24 By type of security 1 U.S. Treasury bills 50,058 38,948 39,860 40,126 40,435 34,249 34,815 44,759 53,104 41,609 34.290 32,770 Treasury coupon securities by maturity 2 Three years or less 152,654 143,806 140,206 164,430 207,652 137,279 105,718 130,553 122,982 147,173 142,976 162,411 3 More than three but less than or equal to six years 131,546 137,381 130,035 155,688 195,179 140,241 92,726 114,815 105,559 161,479 159,283 125,444 4 More than six but less than or equal to eleven years 106,432 131,663 124,686 152,760 183,990 156,274 94,188 93,774 80,634 113,108 116,465 125,122 5 More than eleven 31,439 31,296 28,018 36,986 47,739 28,541 22,577 20,017 20,878 26,733 23,054 23,571 6 Inflation-indexed2 2,949 6,157 3,269 3,707 4,420 3,029 3,318 2,843 2,507 2,930 3,054 2,919 Federal agency and governmentsponsored enterprises 7 Discount notes 62,416 52,616 56,242 52,289 62,536 60,422 56,696 47,979 52,731 54,862 55,197 51,199 Coupon securities by maturity 8 Three years or less 13,029 11,854 11,450 13,121 13,116 11,799 11,489 11,299 7,521 12,588 9,160 10,934 9 More than three years but less than or equal to six years 10,171 8,078 4,614 7,761 6,465 5,548 3,768 3,642 3,118 8,657 7,463 6,569 10 More than six years but less than or equal to eleven years .... 9,211 6,822 5,213 6,657 8,628 6,174 3,564 4,190 2,663 4,188 6,996 10,417 11 More than eleven years 1,486 1,048 808 1,039 1,478 897 625 469 546 653 927 1,057 12 Mortgage-backed 228,360 242,916 195,712 199,351 239,283 311,505 167,495 104,888 116,685 278,078 229,370 131,204 Corporate securities 13 One year or less 140,708 129,914 134,241 118,830 127,184 130,215 148,655 129,006 135,471 140,254 124,492 130,534 14 More than one year 21,940 20,616 15,874 20,597 19,707 16,832 15,134 14,020 12,296 20,419 24,220 27,170 By type of counterparty With interdealer broker 15 U.S. Treasury 219,499 222,140 211,840 251,770 302,845 227,331 162,456 186,503 177,908 234,443 225,718 228,500 16 Federal agency and governmentsponsored enterprises 11,148 8,211 6,959 8,357 9,182 7,809 6,301 5,980 4,484 8,260 8,848 11,649 17 Mortgage-backed 62,176 64,153 51,205 55,577 57,774 75,236 51,455 27,525 36,569 64,171 60,806 38,334 18 Corporate 581 587 568 776 676 592 601 466 469 581 770 655 With other 19 U.S. Treasury 255,580 267,111 254,234 301,927 376,570 272,282 190,886 220,258 207,756 258,588 253,404 243,737 20 Federal agency and governmentsponsored enterprises 85,166 72,207 71,367 72,511 83,039 77,031 69,841 61,598 62,096 72,689 70,896 68,526 21 Mortgage-backed 166,185 178,763 144,506 143,774 181,508 236,269 116,041 77,363 80,116 213,906 168,564 92,870 22 Corporate 162,067 149,944 149,546 138,652 146,214 146,455 163,188 142,561 147,298 160,092 147,942 157,050 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 IItteemm,, bbyy ttyyppee ooff sseeccuurriittyy June July Aug. July 30 Aug. 6 Aug. 13 Aug. 20 Aug. 27 Sept. 3 Sept. 10 Sept. 17 Net outright positions2 1 U.S. Treasury bills 9,882 10,596 20,019 11,936 19,935 21,752 21,314 12,316 28,330 26,500 6,328 Treasury coupon securities by maturity 2 Three years or less -11,958 -18,548 -11,040 -17,454 -2,969 -9,011 -12,258 -13,423 -20,399 -20,614 -5,595 3 More than three years but less than or equal to six years -45,702 -54,366 -41,247 -56,769 —14,503 -39,039 -42,893 -41,277 -37,292 -33,677 -30,494 4 More than six but less than or equal to eleven years -11,295 -18,655 -12,959 -17,893 -16,455 -13.698 -10,152 -11,456 -13,963 -8,688 -2,718 5 More than eleven 680 4,869 2,871 6,455 2,835 1,742 3,593 3,448 2,631 927 ^190 6 Inflation-indexed 854 911 709 1,085 988 622 -30 1,137 986 1,476 1,815 Federal agency and governmentsponsored enterprises 7 Discount notes 61,088 59,856 43,786 49,592 41,628 53,754 42,795 37,515 4422,,228877 50,206 4488,,771166 Coupon securities, by maturity 8 Three years or less 17,246 15,782 13,291 15,413 10,228 12,736 14,789 14,235 14,587 14,410 11,414 9 More than three years but less than or equal to six years 2,400 4,399 681 5,704 1,714 806 588 176 -37 1,933 22 10 More than six but less than or equal to eleven years 4,057 5,336 2,787 4,137 3,262 3,304 2,470 2,709 1,858 3,609 3,081 11 More than eleven 2,748 2,204 1,476 1,771 1,569 1,635 1,545 1,363 1,137 1,174 1,528 12 Mortgage-backed 55,930 57,244 20,020 45,610 22,725 19,517 19,391 20,432 17,225 8,864 10,705 Corporate securities 13 One year or less 33,054 32,644 31,645 32,083 33,190 40,351 29,484 24,991 29,517 31,462 33,417 14 More than one year 58,821 65,577 80,204 79,440 80,653 81,434 80,703 78,508 79,473 80,780 86,674 Financing3 Securities in, U.S. Treasury 15 Overnight and continuing 739,231 726,387 726,152 714,798 756,459 688,920 724,763 723,335 753,204 759,982 744,634 16 Term 944,185 937,832 928,602 997,897 1,017,424 1,021,876 849,260 873,617 867,209 935,107 983,104 Federal agency and governmentsponsored enterprises 17 Overnight and continuing 151,751 147,727 161,323 140,723 154,493 162,483 158,073 166,970 165,344 176,133 116600,,776633 18 Term 254,853 245,668 233,519 244,102 240,508 244,190 230,255 227,890 219,924 222,302 223,068 Mortgage-backed securities 19 Overnight and continuing 36,223 37,704 37,545 37,599 34,959 41,193 44,250 32,481 32,165 36,958 33,998 20 Term 249,278 253,576 247,185 256,505 256,354 250,742 242,453 246,566 236,573 239,084 236,000 Corporate securities 21 Overnight and continuing 71,329 76,154 76,406 76,580 77,312 76,186 75,442 76,512 76,930 79,705 80,912 22 Term 28,474 30,092 30,044 29,804 29,791 29,847 30,339 29,529 31,154 31,014 31,149 MEMO Reverse repurchase agreements 23 Overnight and continuing 510,880 472,181 473,738 465,221 491,999 448,293 471,250 473,573 495,517 506,823 478,313 24 Term 1,297,890 1,288,014 1,264,124 1,343,545 1,359,981 1,364,600 1,179,112 1,209,353 1,189,124 1,253,067 1,295,598 Securities out, U.S. Treasury 25 Overnight and continuing 711,222 686,520 678,081 683,907 707,630 647,169 685,678 664,142 698,951 704,956 687,425 26 Term 849,957 832,743 848,932 889,446 935,844 939,314 762,225 802,880 792,725 854,923 907,685 Federal agency and governmentsponsored enterprises 27 Overnight and continuing 295,952 286,946 278,201 277,779 270,689 285,503 273,716 285,717 271,384 294,768 287,945 28 Term 195,981 190,018 179,519 184,957 183,815 190,915 178,610 171,018 169,600 172,032 171,935 Mortgage-backed securities 29 Overnight and continuing 356,571 372,739 358,960 368,093 359,630 382,491 360,126 355,273 321,189 313,464 348,854 30 Term 141,975 160,896 162,755 171,387 161,045 171,184 175,097 153,065 145,930 154,472 149,538 Corporate securities 31 Overnight and continuing 156,474 159,712 153,915 160,971 158,525 163,204 152,417 143,717 151,213 143,654 157,240 32 Term 26,437 27,191 31,618 27,500 32,432 31,792 31,862 32,042 28,927 29,719 27,748 MEMO Repurchase agreements 33 Overnight and continuing 1,305,120 1,276,928 1,235,582 11,,225577,,770022 1,261,321 1,248,439 1,237,390 1,216,190 1,205,246 1,224,407 1,250,787 34 Term 1,163,284 1,164,237 1,178,163 1,226,689 1,264,172 1,282,554 1,104,971 1,118,035 1,099,772 1,167,228 1,214,144 NOTE. Major changes in the report form filed by primary dealers included a break in many 2. Net outright positions include all U.S. government, federal agency, governmentseries as of the week ending July 4, 2001. Current weekly data may be found at the Federal sponsored enterprise, mortgage-backed, and corporate securities scheduled for immediate and Reserve Bank of New York web site (http://www.newyorkfed.org/pihome/statistics) under the forward delivery, as well as U.S. government securities traded on a when-issued basis Primary Dealer heading. between the announcement and issue date. 1. Data for positions and financing are obtained from reports submitted to the Federal 3. Figures cover financing U.S. government, federal agency, government-sponsored enter- Reserve Bank of New York by the U.S. government securities dealers on its published list of prise, mortgage-backed, and corporate securities. Financing transactions for Treasury primary dealers. Weekly figures are close-of-business Wednesday data. Positions for calendar inflation-indexed securities (TIIS) are reported in actual funds paid or received, except for days of the report week are assumed to be constant. Monthly averages are based on the pledged securities. TIIS that are issued as pledged securities are reported at par value, which number of calendar days in the month. is the value of the security at original issuance (unadjusted for inflation). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Nonfinancial Statistics • December 2003 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 2003 AAggeennccyy 11999999 22000000 22000011 22000022 Mar. Apr. May June July 1 Federal and federally sponsored agencies 1,296,477 1,616,492 1,851,632 2,121,057 n.a. n.a. n.a. n.a. n.a. 2 Federal agencies 26,502 26,376 25,666 276 26,886 26,450 26,500 27,015 26,992 3 Defense Department1 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 205 126 255 26,828 166 195 218 227 247 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 26,496 26,370 25,660 270 26,880 26,444 26,494 27,009 26,986 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 1,269,975 1,590,116 1,825,966 2,120,781 n.a. n.a. n.a. n.a. n.a. 1 1 Federal Home Loan Banks 382,131 529,005 594,404 623,740 687,573 706,215 717,900 712,447 704,276 12 Federal Home Loan Mortgage Corporation 287,396 360,711 426,899 565,071 n.a. n.a. n.a. n.a. n.a. 13 Federal National Mortgage Association 460,291 547,619 642,700 763,500 873,900 871,500 876,200 884,100 894,855 14 Farm Credit Banks8 63,488 68,883 74,181 76,673 86,802 87,591 89,007 89,130 90,020 15 Student Loan Marketing Association9 35,399 41,988 45,375 48,350 49,100 51,200 54,200 52,700 55,100 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 Corporation'' 1,261 1,261 1,261 1,261 1,261 1,261 1,261 1,261 1,261 18 Resolution Funding Corporation12 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 MEMO 19 Federal Financing Bank debt13 44,129 42,152 40,575 39,096 35,780 35,808 36,383 36,361 36,522 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 lending'4 25 Farmers Home Administration 9,500 6,665 5,275 n.a. n.a. n.a. n.a. n.a. n.a. 26 Rural Electrification Administration 14,091 14,085 13,126 13,876 14,750 14,760 14,793 15,383 15,419 27 Other 20,538 21,402 22,174 25,220 21,030 21,048 21,590 20,978 21,103 1. Consists of mortgages assumed by the Defense Department between 1957 and 1963 10. The Financing Corporation, established in August 1987 to recapitalize the Federal under family housing and homeowners assistance programs. Savings and Loan Insurance Corporation, undertook its first borrowing in October 1987. 2. Includes participation certificates reclassified as debt beginning Oct. 1, 1976. 11. The Farm Credit Financial Assistance Corporation, established in January 1988 to 3. On-budget since Sept. 30, 1976. provide assistance to the Farm Credit System, undertook its first borrowing in July 1988. 4. Consists of debentures issued in payment of Federal Housing Administration insurance 12. The Resolution Funding Corporation, established by the Financial Institutions claims. Once issued, these securities may be sold privately on the securities market. Reform, Recovery, and Enforcement Act of 1989, undertook its first borrowing in October 5. Certificates of participation issued before fiscal year 1969 by the Government National 1989. Mortgage Association acting as trustee for the Farmers Home Administration; the Department 13. The FFB, which began operations in 1974, is authorized to purchase or sell obligations of Health, Education, and Welfare; the Department of Housing and Urban Development; the issued, sold, or guaranteed by other federal agencies. Because FFB incurs debt solely for the Small Business Administration; and the Veterans Administration. purpose of lending to other agencies, its debt is not included in the main portion of the table to 6. Off-budget. avoid double counting. 7. Includes outstanding noncontingent liabilities: notes, bonds, and debentures. Includes 14. Includes FFB purchases of agency assets and guaranteed loans; the latter are loans Federal Agriculture Mortgage Corporation; therefore, details do not sum to total. Some data guaranteed by numerous agencies, with the amounts guaranteed by any one agency generally are estimated. being small. The Farmers Home Administration entry consists exclusively of agency assets, 8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, which is whereas the Rural Electrification Administration entry consists of both agency assets and shown on line 17. guaranteed loans. 9. Before late 1982, the association obtained financing through the Federal Financing Bank (FFB). Borrowing excludes that obtained from the FFB, which is shown on line 22. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets and Corporate Finance A29 1.45 NEW SECURITY ISSUES State and Local Governments Millions of dollars 2003 TTyyppee ooff iissssuuee oorr iissssuueerr,, 22000000 22000011 22000022 oorr uussee Feb. Mar. Apr. May' June' July' Aug.' Sept. I All issues, new and refunding' 180,403 292,027 364,073 30,171 28,268r 34,917r 36,052 48,346 33,139 26,076 25,621 By type of issue 2 General obligation 64,475 118,554 145,323 12,772 9,794 14,815 13,067 23,690 12,626 7,151 6,688 3 Revenue 115,928 170,047 214,788 17,399 18,475r 20,101' 22,985 24,656 20,513 18,925 18,934 By type of issuer 4 State 19,944 30,099 33,931 3,604 1,277 5,521 2,808 14,411 2,924 2,197 555 5 Special district or statutory authority2 121,185 197,462 259,070 20,893 19,777 23,917' 22,907 26,369 22,061 17,425 20,596 6 Municipality, county, or township 39,273 61,040 67,121 5,674 7,214' 5,478 10,337 7,567 8,154 6,453 4,470 7 Issues for new capital 154,257 200,363 243,181r 20,339 16,116r 24,714r 21,273 35,927 21,906 18,704 20,035 By use of proceeds 8 Education 38,665 50,054 57,894 7,067 5,354 7,591 7,109 6,128 4,951 6,992 4,764 9 Transportation 19,730 21,411 22,093 1,625 1,233 3,479 1,891 2,049 2,656 3,089 1,624 10 Utilities and conservation 11,917 21,917 33,404 183 599 842 1,008 2,016 446 746 207 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 1,076r 1,602 1,828 3,209 1,655 2,317 1,714 2,272 13 Other purposes 47,309 55,733 73,033 7,232r 3,724 8,396 5,603 19,878 6,685 3,734 8,352 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 2003 TTyyppee ooff iissssuuee,, ooffffeerriinngg,, oorr iissssuueerr 22000000 22000011 22000022 Jan. Feb. Mar. Apr. May June July Aug. 1 All issues' 1,079,727 1,541,821 1,429,298 127,304 134,957 155,821 125,223 170,003 179,615 126,114 119,840 2 Bonds2 944,810 1,413,267 1,318,863 120,177 127,818 149,928 116,861 161,265 163,726 116,806 110,158 By type of offering 3 Sold in the United States 822,012 1,356,879 1,232,618 113,951 118,567 144,315 114,277 149,437 147,835 104,875 103,683 4 Sold abroad 122,798 56,389 86,246 6,226 9,250 5,613 2,585 11,828 15,890 11,931 6,475 MEMO 5 Private placements, domestic 19,442 24,415 18,870 4,553 1,087 1,760 1,189 1,804 4,140 n.a. n.a. By industry group 6 Nonfinancial 258,804 459,560 282,484 28,461 26,991 27,514 22,153 48,353 52,139 28,425 17,556 7 Financial 686,006 953,707 1,036,379 91,716 100,826 122,414 94,708 112,912 111,587 88,381 92,603 8 Stocks3 311,941 230,049r 170,794r 7,127 7,139 5,893 8,362 8,738 15,889 9,308 9,682 By type of offering 9 Public 134,917 128,554 110,435 7,127 7,139 5,893 8,362 8,738 15,889 9,308 9,682 10 Private placement4 177,024 101,495' 60,359' 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 3,793 2,679 1,053 1,592 3,075 4,727 3,333 1,988 12 Financial 16,548 50,977 48,320 3,334 4,460 4,840 6,770 5,663 11,162 5,975 7,694 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 DomesticN onfinancialS tatistics • December 2003 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets1 Millions of dollars 2003 IItteemm 22000011 22000022RR Feb. Mar. Apr. May June July Aug.' Sept. 1 Sales of own shares2 1,806,474 1,825,732 122,321 140,643 141,465 142,688 157,773 153,832 139,162 142,332 2 Redemptions of own shares 1,677,266 1,702,677 113,643 129,337 112,109 118,794 130,024 139,690 125,013 127,100 3 Net sales3 129,208 123,055 8,678 11,306 29,356 23,894 27,749 14,142 14,149 15,232 4 Assets4 4,689,624 4,119,322 4,031,818 4,059,934 4,327,560 4,563,023 4,653,085 4,714,516 4,830,159 4,848,827 5 Cash5 219,620 208,479 199,546 214,146 230,032 232,836 236,547 220,372 226,089 231,898 6 Other 4,470,004 3,910,843 3,832,272 3,845,788 4,097,528 4,330,187 4,416,538 4,494,144 4,604,070 4,616,929 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 2002 2003 AAccccoouunntt 22000000 22000011 22000022 Qi Q2 Q3 Q4 Ql Q2 Q3 ASSETS 1 Accounts receivable, gross2 958.7 948.3 945.4 930.0 941.9 945.6 945.4 934.9 947.9 n.a. 2 Consumer 328.0 340.1 315.6 329.8 332.0 334.5 315.6 307.1 308.6 n.a. 3 Business 458.4 447.0 455.3 443.0 449.4 445.5 455.3 453.9 455.8 n.a. 4 Real estate 172.3 161.3 174.5 157.2 160.5 165.5 174.5 173.9 183.4 n.a. 5 LESS: Reserves for unearned income 69.7 60.6 57.0 59.5 58.5 58.0 57.0 54.2 53.8 n.a. 6 Reserves for losses 16.7 21.0 23.8 21.5 21.6 22.0 23.8 24.0 24.5 n.a. 7 Accounts receivable, net 872.3 866.7 864.5 849.0 861.9 865.6 864.5 856.7 869.6 n.a. 8 All other 461.5 523.4 584.7 515.2 530.6 558.0 584.7 610.9 655.9 n.a. 9 Total assets 1,333.7 1,390.1 1,449.3 1,364.2 1,392.5 1,423.6 1,449.3 1,467.7 1,525.5 n.a. LIABILITIES AND CAPITAL 10 Bank loans 35.9 50.8 48.0 49.4 56.9 74.9 48.0 47.3 53.2 n.a. 11 Commercial paper 238.8 158.6 141.5 137.0 130.8 143.1 141.5 127.3 145.3 n.a. Debt 12 Owed to parent 102.5 99.2 88.2 82.6 83.3 82.9 88.2 87.7 96.6 n.a. 13 Not elsewhere classified 502.2 567.4 624.9 574.4 597.2 584.9 624.9 639.1 657.9 n.a. 14 All other liabilities 301.8 325.5 339.0 329.1 331.5 343.4 339.0 344.4 359.1 n.a. 15 Capital, surplus, and undivided profits 152.5 188.6 207.6 191.7 192.9 194.5 207.6 221.9 213.5 n.a. 16 Total liabilities and capital 1,333.7 1,390.1 1,449.3 1,364.2 1,392.5 1,423.6 1,449.3 1,467.7 1,525.5 n.a. 1. Includes finance company subsidiaries of bank holding companies but not of 2. Before deduction for unearned income and losses. Excludes pools of securitized retailers and banks. Data are amounts carried on the balance sheets of finance compa- assets, nies; 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 2003 Mar. Apr. May June July Aug. Seasonally adjusted 1 Total 1,186.3 1,248.1 1,275.9 1,283.1 1,290.3 1,297.1 1,286.0 1,291.5 1,301.5 2 Consumer 465.0 514.8 518.6 521.7 525.3 523.6 516.8 516.2 520.8 3 Real estate 198.9 207.7 216.5 215.4 220.4 224.6 224.1 231.9 232.9 4 Business 522.3 525.6 540.9 546.0 544.6 548.9 545.1 543.5 547.7 Not seasonally adjusted 5 Total 1,192.8 1,255.3 1,283.4 1,286.3 1,293.4 1,297.4 1,293.1 1,288.0 1,292.4 6 Consumer 469.0 519.7 523.9 518.2 521.7 519.1 516.2 516.2 521.2 7 Motor vehicle loans 141.6 173.9 160.2 156.2 160.9 162.8 166.6 172.7 178.0 8 Motor vehicle leases 108.2 103.5 83.3 81.8 81.2 79.0 76.7 74.8 73.2 9 Revolving2 37.6 31.5 38.9 36.3 37.6 34.5 34.6 35.0 36.6 10 Other3 41.3 32.7 38.7 40.9 42.4 42.5 43.1 42.0 44.4 Securitized assets4 11 Motor vehicle loans 97.1 131.9 151.9 152.1 149.4 150.3 146.5 143.6 141.8 12 Motor vehicle leases 6.6 6.8 5.7 6.2 6.1 6.0 6.0 5.9 5.8 13 Revolving 19.6 25.0 31.1 30.7 30.6 30.7 29.5 29.2 28.8 14 Other 17.1 14.3 14.0 13.9 13.6 13.2 13.2 12.9 12.5 15 Real estate 198.9 207.7 216.5 215.4 220.4 224.6 224.1 231.9 232.9 16 One- to four-family 130.6 120.1 135.0 133.9 138.8 143.0 142.5 150.7 152.0 17 Other 41.7 41.2 39.5 40.1 40.4 40.7 40.9 40.8 40.8 Securitized real estate assets4 18 One- to four-family 24.7 40.7 39.7 39.2 38.9 38.6 38.4 38.1 37.8 19 Other 1.9 5.7 2.2 2.2 2.2 2.2 2.2 2.2 2.2 20 Business 525.0 527.9 543.0 552.8 551.4 553.7 552.9 539.9 538.3 21 Motor vehicles 75.5 54.0 60.7 65.3 64.1 68.0 69.9 61.9 60.9 22 Retail loans 18.3 16.1 15.4 16.3 16.8 17.1 17.2 17.7 17.6 23 Wholesale loans5 39.7 20.3 29.3 34.0 34.5 36.1 38.4 30.0 29.1 24 Leases 17.6 17.6 16.0 15.0 12.8 14.8 14.2 14.2 14.2 25 Equipment 283.5 289.4 292.1 287.5 286.0 284.5 283.4 281.0 281.1 26 Loans 70.2 77.8 83.3 78.0 79.0 77.6 77.5 76.3 76.7 27 Leases 213.3 211.6 208.8 209.5 207.0 207.0 205.9 204.7 204.4 28 Other business receivables6 99.4 103.5 102.5 101.1 103.0 103.1 102.6 102.9 102.0 Securitized assets4 29 Motor vehicles 37.8 50.1 50.2 53.1 53.1 52.2 50.0 46.7 47.0 30 Retail loans 3.2 5.1 2.4 2.2 2.2 2.2 2.2 2.2 2.2 31 Wholesale loans 32.5 42.5 45.9 48.6 48.6 47.8 45.6 42.3 42.7 32 Leases 2.2 2.5 1.9 2.2 2.2 2.2 2.1 2.1 2.1 33 Equipment 23.1 23.2 20.2 21.9 21.4 21.6 23.5 23.7 23.4 34 Loans 15.5 16.4 13.0 12.2 11.8 12.0 12.9 13.1 12.8 35 Leases 7.6 6.8 7.2 9.7 9.6 9.6 10.6 10.6 10.6 36 Other business receivables6 5.6 7.7 17.4 23.9 23.9 24.2 23.6 23.8 23.8 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 • December 2003 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 2003 IItteemm 22000000 22000011 22000022 Mar. Apr. May June July Aug. Sept. Terms and yields in primary and secondary markets PRIMARY MARKETS Terms1 1 Purchase price (thousands of dollars) 234.5 245.0 261.1 252.9 266.0 275.3 283.3 283.4 280.1 2 Amount of loan (thousands of dollars) .. . 177.0 184.2 197.0 184.2 205.0 210.7 213.7 214.4 212.1 3 Loan-to-price ratio (percent) 77.4 77.3 77.8 76.2 78.8 78.7 78.0 78.2 78.0 4 Maturity (years) 29.2 28.8 28.9 28.2 29.0 28.8 28.8 28.7 28.5 5 Fees and charges (percent of loan amount)' .70 .67 .62 .40 .62 .61 .64 .62 .66 Yield (percent per year) 6 Contract rate1 7.41 6.90 6.35 5.69 5.83 5.66 5.42 5.44 5.68 7 Effective rate1'3 7.52 7.00 6.44 5.75 5.92 5.75 5.51 5.53 5.77 8 Contract rate (HUD series)4 n.a. n.a. n.a. SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (section 203)5 n.a. 10 GNMA securities6 5.48 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 610,122 707,015 790,800 815,964 817,894 815,560 812,467 836,104 863,170 917,123 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 34,304 43,028 43,749 41,182 72,447 82,656 98,804 Mortgage commitments (during period) 15 Issued7 163,689 304,084 400,327 42,005 42,906 75,569 79,172 n.a. n.a. n.a. 16 To sell8 11,786 7,586 12,268 2,457 1,479 1,785 3,657 n.a. n.a. n.a. FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)8 17 Total 385,693 491,719 568,173 569,522 568,975 572,801 586,361 595,202 615,986 641,940 18 FHA/VA insured 3,332 3,506 4,573 3,540 n.a. n.a. n.a. n.a. n.a. n.a. 19 Conventional 382,361 488,213 563,600 565,982 n.a. n.a. n.a. n.a. n.a. n.a. Mortgage transactions (during period) 20 Purchases 174,043 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 21 166,901 389,611 547,046 59,065 51,737 66,175 58,124 70,269 91,198 83,982 22 Mortgage commitments contracted (during period)9 169,231 417,434 620,981 69,200 n.a. n.a. n.a. n.a. n.a. n.a. 1. Weighted averages based on sample surveys of mortgages originated by major institu- 6. Average net yields to investors on fully modified pass-through securities backed by tional lender groups for purchase of newly built homes; compiled by the Federal Housing mortgages and guaranteed by the Government National Mortgage Association (GNMA), Finance Board in cooperation with the Federal Deposit Insurance Corporation. assuming prepayment in twelve years on pools of thirty-year mortgages insured by the 2. Includes all fees, commissions, discounts, and "points" paid (by the borrower or the Federal Housing Administration or guaranteed by the Department of Veterans Affairs. seller) to obtain a loan. 7. Does not include standby commitments issued, but includes standby commitments 3. Average effective interest rate on loans closed for purchase of newly built homes, converted. assuming prepayment at the end of ten years. 8. Includes participation loans as well as whole loans. 4. Average contract rate on new commitments for conventional first mortgages; from U.S. 9. Includes conventional and government-underwritten loans. The Federal Home Loan Department of Housing and Urban Development (HUD). Based on transactions on the first Mortgage Corporation's mortgage commitments and mortgage transactions include activity day of the subsequent month. under mortgage securities swap programs, whereas the corresponding data for the Federal 5. Average gross yield on thirty-year, minimum-downpayment first mortgages insured by National Mortgage Association exclude swap activity. the Federal Housing Administration (FHA) for immediate delivery in the private secondary market. Based on transactions on first day of subsequent month. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate A33 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 2002 2003 TTyyppee ooff hhoollddeerr aanndd pprrooppeerrttyy 11999999 22000000 22000011 Q2 Q3 Q4 Qi Q2P 1 All holders 6,315,447 6,884,942 7,585,319 7,967,494 8,201,739 8,459,605 8,671,432 8,966,656 By type of property 2 One- to four-family residences 4,787,225 5,205,428 5,738,111 6,049,571 6,247,731 6,459,308 6,641,409 6,888,328 3 Multifamily residences 368,742 403,724 449,704 468,374 476,708 488,428 496,475 509,340 4 Nonfarm, nonresidential 1,056,516 1,166,933 1,281,168 1,329,097 1,353,685 1,387,110 1,407,138 1,439,720 5 102,964 108,858 116,336 120,452 123,614 124,759 126,410 129,268 By type of holder 6 Major financial institutions 2,394,271 2,618,969 2,791,076 2,861,224 2,981,790 3,089,824 3,166,701 3,279,551 7 Commercial banks2 1,495,420 1,660,054 1,789,819 1,873,362 1,962,198 2,058,426 2,099,352 2,192,983 8 One- to four-family 879,576 965,635 1,023,851 1,070,513 1,143,985 1,222,056 1,244,823 1,320,685 9 Multifamily 67,665 77,803 84,851 90,745 90,930 94,178 96,830 100,130 10 Nonfarm, nonresidential 516,333 582,577 645,619 675,119 689,481 704,167 718,996 732,508 11 Farm 31,846 34,039 35,498 36,985 37,802 38,025 38,704 39,660 12 Savings institutions3 668,064 722,974 758,236 742,744 773,652 781,378 815,873 833,625 13 One- to four-family 548,222 594,221 620,579 599,377 625,402 631,392 662,858 676,168 14 Multifamily 59,309 61,258 64,592 66,016 68,668 68,679 69,757 72,712 IS Nonfarm, nonresidential 60,063 66,965 72,534 76,799 79,022 80,730 82,669 84,150 16 Farm 470 529 531 552 560 577 589 595 17 Life insurance companies 230,787 235,941 243,021 245,118 245,939 250,019 251,476 252,943 18 One- to four-family 5,934 4,903 4,931 5,162 5,176 4,657 4,684 4,710 19 Multifamily 32,818 33,681 35,631 35,818 35,921 36,816 36,975 37,191 20 Nonfarm, nonresidential 179,048 183,757 188,376 190,050 190,698 195,040 196,232 197,377 21 Farm 12,987 13,600 14,083 14,088 14,144 13,506 13,585 13,665 22 Federal and related agencies 320,054 344,225 376,999 396,091 412,014 432,790 455,606 489,676 23 Government National Mortgage Association 7 6 8 8 8 5 6 7 24 One- to four-family 7 6 8 8 8 5 6 7 25 Multifamily 0 0 0 0 0 0 0 0 ?6 Farmers Home Administration4 73,871 73,323 72,452 71,970 72,030 72,377 69,988 69,930 77 One- to four-family 16,506 16,372 15,824 15,273 15,139 14,908 14,652 14,413 28 Multifamily 11,741 11,733 11,712 11,692 11,686 11,669 11,654 11,641 29 Nonfarm, nonresidential 41,355 41,070 40,965 41,188 41,439 42,101 40,093 40,352 30 Farm 4,268 4,148 3,952 3,817 3,766 3,700 3,590 3,525 31 Federal Housing Admin, and Dept. of Veterans Affairs 3,712 3,507 3,290 3,473 2,973 3,854 3,824 4,006 32 One- to four-family 1,851 1,308 1,260 1,254 1,252 1,262 1,255 1,247 .33 Multifamily 1,861 2,199 2,031 2,218 1,721 2,592 2,569 2,760 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 22 13 46 118 47 40 One- to four-family 25 7 2 4 2 7 19 8 41 Multifamily 29 9 3 4 2 9 23 9 42 Nonfarm, nonresidential 98 29 8 14 8 30 76 30 43 Farm 0 0 0 0 0 0 0 0 44 Federal National Mortgage Association 149,422 155,626 169,908 180,491 184,191 185,797 195,633 211,146 45 One- to four-family 141,195 144,150 155,060 164,038 167,006 172,226 180,829 195,079 46 Multifamily 8,227 11,476 14,848 16,453 17,185 13,571 14,804 16,067 47 Federal Land Banks 34,187 36,326 40,885 42,951 44,782 46,257 46,974 48,490 48 One- to four-family 2,012 2,137 2,406 2,527 2,635 2,722 2,764 2,853 49 Farm 32,175 34,189 38,479 40,424 42,147 43,535 44,210 45,637 50 Federal Home Loan Mortgage Corporation 56,676 59,240 62,792 58,872 60,934 63,887 64,388 65,672 51 One- to four-family 44,321 42,871 40,309 34,062 34,616 35,851 35,880 36,941 52 Multifamily 12,355 16,369 22,483 24,810 26,318 28,036 28,508 28,732 5.3 Mortgage pools or trusts5 2,946,546 3,226,058 3,700,582 3,971,458 4,052,418 4,161,020 4,265,292 4,386,908 54 Government National Mortgage Association 582,263 611,553 591,368 583,745 567,386 537,888 515,822 487,929 55 One- to four-family 565,189 592,624 569,460 559,549 542,208 512,098 489,063 460,430 56 Multifamily 17,074 18,929 21,908 24,196 25,178 25,790 26,759 27,499 57 Federal Home Loan Mortgage Corporation 749,081 822,310 948,409 1,053,261 1,058,176 1,082,062 1,073,016 1,051,141 58 One- to four-family 744,619 816,602 940,933 1,045,981 1,050,899 1,072,990 1,064,114 1,042,417 59 Multifamily 4,462 5,708 7,476 7,280 7,277 9,072 8,902 8,724 60 Federal National Mortgage Association 960,883 1,057,750 1,290,351 1,404,594 1,458,945 1,538,287 1,637,474 1,749,896 61 One- to four-family 924,941 1,016,398 1,238,125 1,349,442 1,402,929 1,478,610 1,576,495 1,687,263 62 Multifamily 35,942 41,352 52,226 55,152 56,016 59,677 60,979 62,633 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 654,319 734,445 870,454 929,858 967,911 1,002,783 1,038,980 1,097,942 69 One- to four-family6 455,021 499,834 591,200 638,300 669,300 691,600 725,100 767,800 70 Multifamily 41,952 47,529 53,537 55,234 56,582 59,034 59,169 61,448 71 Nonfarm, nonresidential 157,346 187,082 225,717 236,324 242,029 252,149 254,711 268,694 72 Farm 0 0 0 0 0 0 0 0 73 Individuals and others7 654,576 695,691 716,662 738,721 755,517 775,971 783,833 810,522 74 One- to four-family 456,009 492,429 506,669 525,893 540,187 558,434 564,262 587,991 75 Multifamily 75,076 75,457 78,252 78,639 79,127 79,228 79,478 79,735 76 Nonfarm, nonresidential 102,274 105,453 107,949 109,604 111,008 112,894 114,361 116,609 77 Farm 21,217 22,352 23,792 24,585 25,194 25,415 25,733 26,187 1. Multifamily debt refers to loans on structures of five or more units. 6. Includes securitized home equity loans. 2. Includes loans held by nondeposit trust companies but not loans held by bank trust 7. Other holders include mortgage companies, real estate investment trusts, state and local departments. credit agencies, state and local retirement funds, noninsured pension funds, credit unions, and 3. Includes savings banks and savings and loan associations. finance companies. 4. FmHA-guaranteed securities sold to the Federal Financing Bank were reallocated from SOURCE. Based on data from various institutional and government sources. Separation of FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 because of accounting nonfarm mortgage debt by type of property, if not reported directly, and interpolations and changes by the Farmers Home Administration. extrapolations, when required for some quarters, are estimated in part by the Federal Reserve. 5. Outstanding principal balances of mortgage-backed securities insured or guaranteed by Line 69 from Inside Mortgage Securities and other sources. the agency indicated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic Nonfinancial Statistics • December 2003 1.55 CONSUMER CREDIT1 Millions of dollars, amounts outstanding, end of period 2003 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 22000000 22000011 22000022 Mar.' Apr.' May' June' July' Aug. Seasonally adjusted 1 Total l,692,892r l,817,229r l,895,372r 1,919,005 1,930,277 1,941,278 1,941,740 1,947,825 1,957,239 2 Revolving 667,395 701,285 712,002 720,586 723,018 727,411 725,925 726,379 728,116 3 Nonrevolving2 1,025,498' 1,115,944' 1,183,370' 1,198,419 1,207,259 1,213,867 1,215,815 1,221,446 1,229,123 Not seasonally adjusted 4 Total l,727,666r l,853,675r l,932,865r 1,908,216 1,917,514 1,928,137 1,931,626 1,935,577 1,956,014 By major holder Commercial banks 541,470 558,421 587,165 575,275 576,936 582,413 584,294 582,490 588,262 6 Finance companies 220,503' 238,133' 237,790' 233,485 240,841 239,792 244,251 249,731 259,083 7 Credit unions 184,434 189,570 195,744 193,876 195,613 196,837 198,598 201,386 204,367 8 Savings institutions 64,557 69,070 68,494 68,418 70,116 71,871 73,570 73,452 73,335 9 Nonfinancial business 82,662 67,955 56,894 48.479 47,715 48,132 47,615 47,181 47,962 10 Pools of securitized assets3 530,013' 611,006' 657,202' 662,832 662,231 667,057 662,924 661,242 661,748 By major type of credit4 11 Revolving 693,020 727,297 737,993 713,458 719,216 722,972 722,771 720,543 725,838 12 Commercial banks 218,063 224,878 230,990 212,452 213,069 217,685 217,453 214,854 216,424 13 Finance companies 37,627 31,538 38,948 36,334 37,609 34,498 34,608 35,047 36,623 14 Credit unions 22,226 22,265 22,228 20,722 20,883 20,964 21.076 21,200 21,264 15 Savings institutions 16,560 17,767 16,225 15,980 17,022 18,099 19,141 18,919 18,697 16 Nonfinancial business 42,430 29,790 19,221 13,666 13,112 13,293 12,912 12,678 13,208 17 Pools of securitized assets' 356,114 401,059 410,381 414,304 417,520 418,432 417,581 417,844 419,622 18 Nonrevolving 1,034,646' 1,126.378' 1,194,871' 1,194,758 1,198,298 1,205,165 1,208,855 1,215,034 1,230,176 19 Commercial banks 323,407 333,543 356,175 362,823 363,866 364,728 366,841 367,635 371,838 20 Finance companies 182,876' 206,595' 198,842' 197,151 203,232 205,294 209,643 214,684 222,460 21 Credit unions 162,208 167,305 173,516 173,154 174,730 175,873 177,522 180,186 183,103 22 Savings institutions 47,997 51,303 52,269 52,438 53,094 53,773 54,429 54,533 54,638 23 Nonfinancial business 40,232 38,165 37,673 34,813 34,603 34,839 34,703 34,503 34,753 24 Pools of securitized assets3 173,899' 209,947' 246,821' 248,528 244,711 248,625 245,343 243,398 242,127 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 2003 IItteemm 22000000 22000011 22000022 Feb. Mar. Apr. May June July Aug. INTEREST RATES Commercial banks2 9.34 8.50 7.62' 7.11 7.05 6.77 13.90 13.22 12.54' 11.70 12.19 11.94 Credit card plan 15.71 14.89 13.42 13.20 n.a. 12.90 12.49 14.91 14.44 13.09 12.85 n.a. 12.82 n.a. 13.11 Auto finance companies 6.61 5.65 4.29 3.99 3.83 2.51 2.40 2.93 3.28 3.56 1133..5555 1122..1188 10.74 10.43 10.16 9.91 9.82 9.81 9.77 9.57 OTHER TERMS3 Maturity (months) 54.9 55.1 56.8 59.2 59.5 60.1 60.7 62.4 62.7 63.0 57.0 57.5 57.5 57.7 57.8 57.7 57.7 57.8 57.8 57.9 Loan-to-value ratio 92 91 94 97 96 97 97 97 95 93 99 100 100 99 99 99 99 100 100 100 Amount financed (dollars) 20,923 22,822 24,747 24,864 25,152 27,540 27,920 26,945 26,129 25,407 1144,,005588 1144,,441166 1144,,553322 1144,,223311 14,253 1144,,447755 1144,,556688 1144,,556677 1144,,663322 1144,,662233 1. The Board's series on amounts of credit covers most short- and intermediate-term credit 2. Data are available for only the second month of each quarter, extended to individuals. Data in this table also appear in the Board's G.19 (421) monthly 3. At auto finance companies, statistical release. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A35 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 2001 2002 2003 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr Q4 Q1 Q2 Q3 Q4 QL Q2 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors . . 788.1 1,041.9 1,030.9 853.5 1,114.4 1,163.5 992.5 1,628.8 1,338.3 1,539.0 1,243.4 2,523.8 By sector and instrument 2 Federal government 23.1 -52.6 -71.2 -295.9 -5.6 43.4 39.8 526.0 265.7 198.5 79.9 888.2 Treasury securities 23.2 -54.6 -71.0 -294.9 -5.0 44.2 41.6 524.2 264.2 198.1 81.5 887.7 4 Budget agency securities and mortgages -.1 2.0 -.2 -1.0 -.5 -.7 -1.8 1.8 1.6 .4 -1.6 .5 5 Nonfederal 765.0 1,094.5 1,102.1 1,149.3 1,120.0 1,120.1 952.6 1,102.8 1,072.5 1,340.5 1,163.5 1,635.6 By instrument 6 Commercial paper 13.7 24.4 37.4 48.1 -88.3 45.5 -144.4 -81.7 -17.4 -13.2 -15.2 -87.3 7 Municipal securities and loans 56.9 84.2 54.4 23.6 122.9 174.6 76.8 196.1 154.2 216.1 90.3 189.4 8 Corporate bonds 150.5 235.2 217.8 161.3 340.5 325.0 253.6 191.4 -29.0 114.4 178.6 309.6 9 Bank loans n.e.c 106.4 109.8 82.9 101.8 -82.0 -165.5 -16.4 -192.1 -124.5 -15.3 -55.3 -63.9 10 Other loans and advances 43.1 68.5 26.1 84.5 1.8 -119.7 -38.0 65.1 61.2 -.3 -14.5 80.7 11 Mortgages 322.4 485.8 563.3 563.9 699.1 725.7 702.8 825.8 920.4 1,045.9 886.7 1,141.0 1? Home 258.3 384.6 424.4 418.2 532.7 533.1 602.4 658.6 780.4 843.5 763.8 951.4 13 Multifamily residential 7.2 23.3 35.2 32.9 45.6 54.3 28.5 41.7 31.7 67.1 33.3 50.5 14 Commercial 53.8 71.3 98.0 106.2 113.4 131.6 65.0 116.5 95.2 130.8 83.2 127.8 15 Farm 3.1 6.5 5.8 6.5 7.5 6.8 6.9 9.1 13.1 4.6 6.4 11.3 16 Consumer credit 72.0 86.7 120.2 166.2 126.0 134.5 118.1 98.2 107.6 -7.1 93.0 66.2 By borrowing sector 17 Household 330.8 450.8 498.6 558.8 614.6 596.7 720.9 689.7 791.0 885.6 837.2 1,000.2 18 Nonfinancial business 392.7 576.1 565.0 575.1 399.6 381.2 162.9 229.7 140.2 267.2 252.1 460.3 19 Corporate 291.8 408.4 377.2 380.1 235.3 231.8 47.3 88.5 -2.9 107.6 134.2 311.5 20 Nonfarm noncorporate 94.7 159.7 182.4 184.1 156.8 141.1 110.3 132.7 128.8 156.3 113.4 146.0 21 Farm 6.2 8.0 5.5 10.9 7.5 8.3 5.3 8.5 14.2 3.4 4.6 2.8 22 State and local government 41.5 67.7 38.5 15.5 105.8 142.1 68.9 183.4 141.3 187.7 74.2 175.1 23 Foreign net borrowing in United States 71.8 31.2 13.0 57.0 -49.7 3.3 65.1 2.1 -44.0 1.1 18.4 -48.4 24 Commercial paper 3.7 7.8 16.3 31.7 -14.2 5.9 66.8 36.5 3.9 37.3 52.6 73.5 25 Bonds 61.4 22.8 1.9 15.2 -24.5 17.0 -14.5 -54.0 -35.3 -30.1 -29.4 -93.5 26 Bank loans n.e.c 8.5 6.6 .5 11.4 -7.3 -16.3 13.9 22.0 -11.7 -2.9 -4.0 -31.4 27 Other loans and advances -1.8 -6.0 -5.7 -1.3 -3.7 -3.3 -1.2 -2.4 -1.0 -3.2 -.8 3.0 28 Total domestic plus foreign 859.9 1,073.1 1,043.9 910.5 1,064.6 1,166.9 1,057.5 1,630.9 1,294.2 1,540.0 1,261.8 2,475.4 Financial sectors 29 Total net borrowing by financial sectors 662.2 1,085.6 1,073.5 821.8 934.0 964.4 866.1 867.2 858.5 1,102.7 1,002.6 871.8 By instrument 30 Federal government-related 212.9 470.9 592.0 433.5 629.3 591.8 691.1 487.8 420.8 616.4 452.0 460.4 31 Government-sponsored enterprise securities 98.4 278.3 318.2 234.1 290.8 306.5 191.3 141.7 249.1 321.5 179.7 209.8 32 Mortgage pool securities 114.6 192.6 273.8 199.4 338.5 285.3 499.8 346.1 171.6 294.9 272.3 250.6 33 Loans from U.S. government .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 449.3 614.7 481.6 388.3 304.7 372.6 175.0 379.4 437.7 486.4 550.6 411.4 35 Open market paper 166.7 161.0 176.2 127.7 -61.9 -13.6 -178.3 -109.1 84.3 -77.3 58.8 -93.6 36 Corporate bonds 218.9 310.2 207.5 212.3 317.3 361.1 351.1 434.6 194.4 684.4 432.5 497.7 37 Bank loans n.e.c 13.3 28.5 -14.4 -.4 13.1 17.7 -.6 31.2 81.9 -107.9 -42.7 21.0 38 Other loans and advances 35.6 90.2 107.1 42.5 34.9 8.9 -3.8 15.8 71.9 -17.4 105.5 -17.0 39 Mortgages 14.9 24.8 5.1 6.2 1.3 -1.6 6.6 7.0 5.3 4.7 -3.5 3.3 By borrowing sector 40 Commercial banking 46.1 72.9 67.2 60.0 52.9 44.1 24.4 12.6 62.3 100.3 76.1 85.1 41 Savings institutions 19.7 52.2 48.0 27.3 7.4 -68.6 -33.1 -12.2 37.1 -46.7 48.2 -30.3 47 Credit unions .1 .6 2.2 .0 1.5 4.4 2.4 2.0 3.1 .4 2.8 1.6 43 Life insurance companies .2 .7 .7 -.7 .6 1.4 2.4 1.2 2.0 2.5 4.4 1.5 44 Government-sponsored enterprises 98.4 278.3 318.2 234.1 290.8 306.5 191.3 141.7 249.1 321.5 179.7 209.8 45 Federally related mortgage pools 114.6 192.6 273.8 199.4 338.5 285.3 499.8 346.1 171.6 294.9 272.3 250.6 46 Issuers of asset-backed securities (ABSs) 202.2 321.4 212.3 201.9 292.3 416.8 258.3 230.6 195.8 389.9 315.2 286.7 47 Finance companies 57.8 57.1 70.7 81.9 1.3 -23.6 -28.9 83.9 110.9 7.4 -.2 153.8 48 Mortgage companies -4.6 .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 7.8 7.4 25.3 27.7 18.6 17.5 12.9 50 Brokers and dealers 8.1 7.2 -17.2 15.6 1.4 -18.9 -15.7 17.5 15.2 -24.0 38.4 -16.2 51 Funding corporations 79.9 40.0 91.5 -.4 -55.2 9.1 -42.2 18.5 -16.4 37.8 48.0 -83.6 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic NonfinancialS tatistics • December 2003 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1—Continued Billions of dollars; quarterly data at seasonally adjusted annual rates 2001 2002 2003 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999977 11999988 11999999 22000000 22000011 Q4 QI Q2 Q3 Q4 QL Q2 All sectors 5522 TToottaall nneett bboorrrroowwiinngg,, aallll sseeccttoorrss 1,522.2 2,158.7 2,117.4 1,732.3 1,998.7 2,131.2 1,923.6 2,498.1 2,152.7 2,642.7 2,264.4 3.347.2 5533 OOppeenn mmaarrkkeett ppaappeerr 184.1 193.1 229.9 207.6 -164.4 37.8 -255.9 -154.3 70.8 -53.3 96.3 -107.5 5544 UU..SS.. ggoovveerrnnmmeenntt sseeccuurriittiieess 236.0 418.3 520.7 137.6 623.8 635.2 730.9 1,013.8 686.5 814.9 531.9 1,348.6 5555 MMuunniicciippaall sseeccuurriittiieess 56.9 84.2 54.4 23.6 122.9 174.6 76.8 196.1 154.2 216.1 90.3 189.4 5566 CCoorrppoorraattee aanndd ffoorreeiiggnn bboonnddss 430.8 568.2 427.3 388.7 633.3 703.2 590.2 572.0 130.0 768.6 581.7 713.7 5577 BBaannkk llooaannss nn..ee..cc 128.2 145.0 69.0 112.8 -76.2 -164.0 -3.0 -139.0 -54.4 -126.1 -102.0 -74.3 5588 OOtthheerr llooaannss aanndd aaddvvaanncceess 76.9 152.7 127.5 125.6 32.9 -114.2 78.6 132.2 -20.9 90.1 66.7 5599 MMoorrttggaaggeess 337.3 510.6 568.5 570.1 700.4 724.1 709.4 832.8 925.7 1,050.6 883.2 1.144.3 6600 CCoonnssuummeerr ccrreeddiitt 72.0 86.7 120.2 166.2 126.0 134.5 118.1 98.2 107.6 -7.1 93.0 66.2 Funds raised through mutual funds and corporate equities 61 Total net issues 218.7 166.1 191.5 238.4 305.0 406.4 437.0 276.5 -83.6 291.0 288.7 400.4 62 Corporate equities -46.5 -113.4 .2 3.4 103.6 150.5 50.1 176.5 -120.7 84.1 99.6 52.0 63 Nonfinancial corporations -77.4 -215.5 -110.4 -118.2 -47.4 -4.2 -11.0 15.5 -141.2 -30.9 -80.1 -57.6 64 Foreign shares purchased by U.S. residents 57.6 101.4 114.3 106.7 109.1 83.9 -7.0 77.4 -51.3 51.6 132.5 56.0 65 Financial corporations -26.7 .8 -3.7 14.9 41.9 70.9 68.1 83.6 71.8 63.4 47.2 53.6 66 Mutual fund shares 265.1 279.5 191.2 235.0 201.4 255.9 386.9 100.0 37.1 206.9 189.1 348.4 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables F.2 through F4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A37 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 Q4 Qt Q2 Q3 Q4 Ql Q2 NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets 1,522.2 2,158.7 2,117.4 1,732.3 1,998.7 2,131.2 1,923.6 2,498.1 2,152.7 2,642.7 2,264.4 3,347.2 2 Domestic nonfederal nonfinancial sectors 15.5 250.9 257.1 -13.7 27.1 172.6 100.4 292.0 -116.4 132.6 -353.9 20.1 3 Household 25.5 119.1 247.1 -33.6 -.7 145.3 48.9 257.6 -170.5 127.2 -326.4 -67.5 4 Nonfinancial corporate business -12.7 -16.0 -15.6 19.4 -12.4 -17.1 69.3 -11.4 33.5 -42.4 54.9 34.4 5 Nonfarm noncorporate business 2.6 13.3 -2.9 1.3 2.0 2.0 3.3 3.3 2.8 4.0 -.2 4.1 6 State and local governments .1 134.5 28.4 -.8 38.1 42.4 -21.1 42.5 17.8 43.8 -82.1 49.1 7 Federal government 3.2 11.7 6.5 11.6 6.0 -1.5 9.3 -3.7 31.1 3.1 -18.3 -1.4 8 Rest of the world 259.6 167.7 96.6 129.5 234.6 274.7 248.0 458.0 393.9 351.0 359.5 1,055.8 9 Financial sectors 1,243.9 1,728.4 1,757.3 1,604.8 1,731.0 1,685.4 1,565.9 1,751.8 1,844.1 2,156.0 2,277.1 2,272.7 10 Monetary authority 38.3 21.1 25.7 33.7 39.9 85.1 81.6 43.4 67.3 118.7 32.3 25.0 11 Commercial banking 324.3 305.6 312.2 357.9 205.2 314.6 188.9 384.3 624.0 420.4 349.0 616.3 12 U.S.-chartered banks 274.9 312.1 318.6 339.5 191.6 275.0 168.2 343.8 599.9 463.3 305.6 547.7 13 Foreign banking offices in United States 40.2 -11.6 -17.0 23.9 -.6 -7.8 2.1 33.7 21.8 -32.8 23.3 12.2 14 Bank holding companies 5.4 -.9 6.2 -12.2 4.2 13.6 12.0 1.9 -1.6 .2 20.8 39.7 IS Banks in U.S.-affiliated areas 3.7 6.0 4.4 6.7 10.0 33.9 6.6 4.9 4.0 -10.2 -.7 16.8 16 Savings institutions -4.7 36.2 67.7 56.2 42.8 73.1 12.3 -23.5 80.3 72.5 189.4 88.0 17 Credit unions 16.8 18.9 27.5 28.0 41.5 60.5 58.3 61.8 6.1 44.4 43.5 71.2 18 Bank personal trusts and estates -25.0 -12.8 27.8 .8 -28.1 -28.1 1.0 .9 .8 .8 -19.3 -17.6 19 Life insurance companies 104.8 76.9 53.5 57.9 130.9 81.3 278.1 206.6 279.0 168.2 276.0 216.0 20 Other insurance companies 25.2 5.8 -3.0 -8.7 9.0 28.5 36.7 35.4 21.7 65.6 57.7 42.9 21 Private pension funds 45.7 -26.1 14.1 31.3 6.7 -20.9 47.1 22.1 40.2 .2 7.3 39.5 22 State and local government retirement funds 67.1 72.1 46.9 54.6 -17.7 -2.7 70.5 -54.5 -10.4 60.7 .1 62.7 2.3 Money market mutual funds 87.5 244.0 182.0 143.0 246.0 49.1 -239.1 -87.5 -75.7 301.2 -187.0 214.0 24 Mutual funds 80.9 127.3 48.4 21.0 126.0 139.3 243.3 41.9 162.7 118.4 220.2 213.0 25 Closed-end funds -2.9 5.2 8.5 -6.3 6.9 16.3 24.4 -2.6 -1.7 17.0 31.1 24.1 26 Government-sponsored enterprises 106.3 314.0 291.3 256.4 309.0 335.3 236.7 130.1 203.5 277.8 302.7 112.6 27 Federally related mortgage pools 114.6 192.6 273.8 199.4 338.5 285.3 499.8 346.1 171.6 294.9 272.3 250.6 28 Asset-backed securities issuers (ABSs) 163.8 281.7 194.1 172.1 266.2 394.1 234.1 208.4 173.2 368.1 291.4 266.1 29 Finance companies 23.1 77.3 97.1 108.6 -4.8 -99.6 -26.5 42.2 83.9 -14.8 -2.4 56.6 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 14.0 26.3 31.8 27.7 6.7 -8.6 31.0 32 Brokers and dealers 14.9 6.8 -34.7 68.9 92.4 -110.5 -219.5 402.8 -208.6 138.8 19.6 1.3 33 Funding corporations 50.4 -15.8 124.0 35.0 -95.8 60.4 6.1 -45.0 165.2 -324.3 374.5 ^3.3 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Net flows through credit markets 1,522.2 2,158.7 2,117.4 1,732.3 1,998.7 2,131.2 1,923.6 2,498.1 2,152.7 2,642.7 2,264.4 3,347.2 Other financial sources 35 Official foreign exchange .7 6.6 -8.7 -.4 4.3 .2 -3.0 12.9 24.6 4.9 4.9 .6 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 .0 .9 .6 2.4 .0 .6 1.6 38 Foreign deposits 107.7 6.5 61.1 134.2 30.7 9.6 -43.8 66.1 53.0 20.3 -73.7 78.6 39 Net interbank transactions -19.7 -31.8 15.0 15.1 -28.0 24.5 3.3 -166.5 62.4 170.0 -4.1 -123.5 40 Checkable deposits and currency 41.2 47.3 151.2 -71.4 204.3 278.1 -200.5 210.2 208.0 -43.7 271.3 94.2 41 Small time and savings deposits 97.1 152.4 45.1 188.8 267.2 329.7 288.3 215.6 323.4 257.2 261.6 437.6 42 Large time deposits 122.5 91.8 131.1 116.2 68.6 77.8 270.0 34.8 36.8 -140.2 191.6 43.4 43 Money market fund shares 155.9 287.2 249.1 233.3 428.6 379.8 -312.5 104.2 -196.6 337.6 -441.4 186.0 44 Security repurchase agreements 120.9 91.3 169.8 113.2 22.3 -138.3 119.4 362.4 -91.1 29.2 -50.4 564.3 45 Corporate equities -46.5 -113.4 .2 3.4 103.6 150.5 50.1 176.5 -120.7 84.1 99.6 52.0 46 Mutual fund shares 265.1 279.5 191.2 235.0 201.4 255.9 386.9 100.0 37.1 206.9 189.1 348.4 47 Trade payables 139.8 106.4 268.5 419.5 -73.4 -126.1 194.8 48.9 126.2 157.1 141.4 202.4 48 Security credit 111.0 103.2 104.4 146.1 3.1 -383.7 -190.7 -131.9 -69.6 44.1 229.8 641.8 49 Life insurance reserves 59.3 48.0 50.8 50.2 77.2 119.6 54.0 71.4 60.8 54.2 94.0 70.0 50 Pension fund reserves 201.4 217.4 181.8 209.0 210.8 158.0 148.8 191.7 287.2 232.7 269.5 245.5 51 Taxes payable 22.3 19.6 30.7 32.8 17.4 -55.2 7.2 40.5 53.8 7.2 55.2 45.1 52 Investment in bank personal trusts -53.0 —46.1 -8.1 56.6 -59.9 -57.7 -3.7 -2.4 -2.1 -1.3 -79.9 -43.7 53 Noncorporate proprietors' equity -40.7 -57.8 -62.4 -11.5 -18.6 8.4 1.5 -32.9 -83.9 -40.9 -22.1 8.0 54 Miscellaneous 496.9 953.3 1,125.5 1,371.8 683.1 200.5 120.3 641.9 876.1 160.6 789.2 908.8 55 Total financial sources 3,304.2 4,320.6 4,811.9 4,972.6 4,142.8 3,362.7 2,815.1 4,442.2 3,740.4 4,182.8 4,190.5 7,108.5 Liabilities not identified as assets (—) 56 Treasury currency -.2 -.1 -.7 -1.2 -.1 .0 -1.5 -.9 1.1 -1.1 -.2 .5 57 Foreign deposits 106.2 -8.5 42.8 78.5 11.1 -87.1 99.1 23.9 36.7 -70.4 112.7 58 Net interbank liabilities -19.9 3.8 .1 20.4 17.2 22.6 39.8 -13.0 16.7 -15.1 6.1 -42.2 59 Security repurchase agreements 63.2 57.7 35.7 122.6 -53.9 -166.2 156.9 227.6 -291.8 -62.0 112.2 292.4 60 Taxes payable 28.0 19.7 11.7 26.2 22.0 34.6 17.9 -52.2 21.5 -55.6 -20.2 -12.4 61 Miscellaneous -285.5 -208.5 -279.7 -527.2 -341.2 -278.7 -336.8 15.2 98.9 75.3 -329.2 129.1 Floats not included in assets (-) 62 Federal government checkable deposits -2.7 2.6 -7.4 9.0 5.7 -91.8 15.1 77.1 ^10.3 -51.7 153.1 -104.9 63 Other checkable deposits -3.9 -3.1 -.8 1.7 4.5 5.7 6.1 7.1 7.6 8.4 9.0 9.7 64 Trade credit -25.5 -43.3 6.8 22.4 -6.5 73.6 -26.6 -53.6 -14.8 18.5 -3.8 24.3 65 Total identified to sectors as assets 3,397.9 4,452.4 4,955.0 5,192.2 4,414.1 3,749.3 2,987.9 4,097.1 3,865.4 4,181.8 4,291.9 6,649.1 1. Data in this table also appear in the Board's Z. 1 (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares. F. 1 and F.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A81 Domestic Nonfinancial Statistics • December 2003 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period 2001 2002 2003 Q4 Ql Q2 Q3 Q4 Ql Q2 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 16,240.8 17,306.5 18,171.0 19,286.0 19,286.0 19,530.4 19,842.6 20,182.9 20,655.2 20,953.2 21,486.6 By sector and instrument 2 Federal government 3,752.2 3,681.0 3,385.1 3,379.5 3,379.5 3,430.3 3,451.4 3,540.8 3,637.0 3,700.6 3,806.9 3 Treasury securities 3,723.7 3,652.7 3,357.8 3,352.7 3,352.7 3,404.0 3,424.6 3,513.6 3,609.8 3,673.7 3,779.9 4 Budget agency securities and mortgages 28.5 28.3 27.3 26.8 26.8 26.3 26.8 27.2 27.3 26.9 27.0 5 Nonfederal 12,488.7 13,625.5 14,785.9 15,906.5 15,906.5 16,100.1 16,391.2 16,642.1 17,018.1 17,252.7 17,679.7 By instrument 6 Commercial paper 193.0 230.3 278.4 190.1 190.1 167.5 148.4 142.2 126.0 127.1 107.5 7 Municipal securities and loans 1,402.9 1,457.2 1,480.9 1,603.7 1,603.7 1,627.5 1,682.0 1,707.9 1,764.5 1,791.8 1,844.9 8 Corporate bonds 1,846.0 2,063.9 2,225.1 2,565.6 2,565.6 2,629.0 2,676.9 2,669.6 2,698.2 2,742.9 2,820.3 y Bank loans n.e.c 1,150.2 1,233.2 1,335.0 1,253.5 1,253.5 1,240.1 1,195.0 1,162.2 1,166.5 1,141.8 1,129.5 10 Other loans and advances 826.1 852.4 936.9 938.7 938.7 934.7 948.1 955.0 960.7 962.3 979.8 n Mortgages 5,640.4 6,238.1 6,802.0 7,501.1 7,501.1 7,665.4 7,879.6 8,112.8 8,369.4 8,578.9 8,872.6 12 Home 4,362.9 4,787.2 5,205.4 5,738.1 5,738.1 5,877.2 6,049.6 6,247.9 6,459.3 6,638.0 6,884.2 13 Multifamily residential 307.9 343.4 376.4 421.9 421.9 429.1 439.5 447.4 458.7 467.1 479.7 14 Commercial 873.0 1,005.1 1,111.4 1,224.7 1,224.7 1,241.0 1,270.1 1,293.9 1,326.6 1,347.4 1,379.4 IS Farm 96.6 102.3 108.9 116.3 116.3 118.1 120.4 123.6 124.8 126.4 129.3 16 Consumer credit 1,430.1 1,550.4 1,727.7 1,853.7 1,853.7 1,835.8 1,861.1 1,892.5 1,932.9 1,907.8 1,925.1 By borrowing sector 17 Households 6,012.0 6,511.0 7,080.8 7,695.4 7,695.4 7,812.5 7,996.6 8,200.1 8,467.2 8,610.8 8,874.2 18 Nonfinancial business 5,338.3 5,937.7 6,512.8 6,913.0 6,913.0 6,967.6 7,024.0 7,048.0 7,107.5 7,175.0 7,289.8 iy Corporate 3,790.7 4,202.2 4,582.4 4,818.3 4,818.3 4,845.7 4,864.2 4,854.1 4,872.9 4,912.5 4,987.7 20 Nonfarm noncorporate 1,383.7 1,566.1 1.750.2 1,907.0 1,907.0 1,934.7 1,968.0 1,999.0 2,039.0 2,067.5 2,104.1 21 Farm 163.9 169.4 180.2 187.7 187.7 187.1 191.8 194.9 195.6 194.9 198.1 22 State and local government 1,138.3 1,176.9 1,192.3 1,298.1 1,298.1 1,320.0 1,370.6 1,394.0 1,443.4 1,466.9 1,515.7 23 Foreign credit market debt held in United States 639.3 652.5 709.5 659.7 659.7 675.9 674.1 665.7 665.8 669.8 656.9 24 Commercial paper 72.9 89.2 120.9 106.7 106.7 123.6 130.2 134.0 142.8 155.7 173.1 25 Bonds 450.6 452.5 467.7 443.2 443.2 439.6 426.1 417.3 409.8 402.4 379.0 26 Bank loans n.e.c 58.7 59.2 70.5 63.2 63.2 66.7 72.2 69.3 68.6 67.6 59.7 27 Other loans and advances 57.1 51.6 50.3 46.6 46.6 46.0 45.5 45.1 44.6 44.1 45.0 28 Total credit market debt owed by nonfinancial sectors, domestic and foreign 16,880.1 17,958.9 18,880.5 19,945.7 19,945.7 20,206.3 20,516.6 20,848.6 21,320.9 21,623.0 22,143.5 Financial scctors 29 Total credit market debt owed by financial sectors 6,543.6 7,617.2 8,439.0 9,370.3 9,370.3 9,565.8 9,778.0 9,982.6 10,293.9 10,520.9 10,734.1 By instrument 30 Federal government-related 3,292.0 3,884.0 4,317.4 4,944.1 4,944.1 5,116.9 5,238.8 5,344.0 5,498.1 5,611.1 5,726.2 31 Government-sponsored enterprise securities . . . 1,273.6 1,591.7 1,825.8 2,114.0 2,114.0 2,161.8 2,197.2 2,259.5 2,339.9 2,384.8 2,437.2 32 Mortgage pool securities 2,018.4 2,292.2 2,491.6 2,830.1 2,830.1 2,955.1 3,041.6 3,084.5 3,158.2 3,226.3 3,289.0 33 Loans from U.S. government .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 3,251.6 3,733.2 4,121.5 4,426.2 4,426.2 4,448.9 4,539.2 4,638.6 4,795.8 4,909.8 5,007.8 35 Open market paper 906.7 1,082.9 1,210.7 1,148.8 1,148.8 1,090.9 1,046.9 1,049.5 1,078.7 1,076.5 1,036.5 36 Corporate bonds 1,878.7 2,086.3 2,298.5 2,615.8 2,615.8 2,707.4 2,823.6 2,878.9 3,031.9 3,144.7 3,276.2 37 Bank loans n.e.c 105.8 91.5 91.1 104.2 104.2 102.3 110.6 130.3 105.3 92.9 98.7 38 Other loans and advances 288.7 395.8 438.3 473.2 473.2 462.4 470.6 491.0 489.8 506.5 506.5 39 Mortgages 71.6 76.7 82.9 84.2 84.2 85.9 87.6 88.9 90.1 89.2 90.1 By borrowing sector 40 Commercial banks 188.6 230.0 266.7 296.0 296.0 295.8 310.2 318.7 325.6 324.8 336.7 41 Bank holding companies 193.5 219.3 242.5 266.1 266.1 269.0 264.2 271.8 286.4 302.8 319.0 42 Savings institutions 212.4 260.4 287.7 295.1 295.1 280.5 275.3 286.3 281.4 287.2 277.1 43 Credit unions 1.1 3.4 3.4 4.9 4.9 5.5 6.0 6.8 6.9 7.6 8.0 44 Life insurance companies 2.5 3.2 2.5 3.1 3.1 3.7 4.0 4.5 5.1 6.3 6.6 45 Government-sponsored enterprises 1,273.6 1,591.7 1,825.8 2,114.0 2,114.0 2,161.8 2,197.2 2,259.5 2,339.9 2,384.8 2,437.2 46 Federally related mortgage pools 2,018.4 2,292.2 2,491.6 2,830.1 2,830.1 2,955.1 3,041.6 3,084.5 3,158.2 3,226.3 3,289.0 47 Issuers of asset-backed securities (ABSs) 1,398.0 1.610.3 1,812.3 2,104.6 2,104.6 2,161.4 2,220.6 2,272.8 2,373.2 2,444.1 2,517.5 48 Brokers and dealers 42.5 25.3 40.9 42.3 42.3 38.4 42.8 46.6 40.6 50.2 46.2 49 Finance companies 625.5 696.1 778.0 779.2 779.2 763.8 788.9 808.0 822.6 813.6 856.3 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) 158.8 165.1 167.8 170.2 170.2 172.1 178.4 185.3 190.0 194.4 197.6 52 Funding corporations 412.6 504.0 503.7 448.4 448.4 442.6 432.8 421.5 447.9 462.7 426.8 All sectors 53 Total credit market debt, domestic and foreign . 23,423.8 25,576.1 27,319.4 29,316.0 29,316.0 29,772.1 30,294.7 30,831.2 31,614.9 32,143.9 32,877.5 54 Open market paper 1,172.6 1,402.4 1,610.0 1,445.6 1,445.6 1,382.0 1,325.5 1,325.7 1,347.5 1,359.2 1,317.1 55 U.S. government securities 7,044.2 7,564.9 7,702.5 8,323.6 8,323.6 8,547.2 8,690.2 8,884.8 9,135.1 9,311.7 9,533.1 56 Municipal securities 1,402.9 1,457.2 1,480.9 1,603.7 1,603.7 1,627.5 1,682.0 1,707.9 1,764.5 1,791.8 1,844.9 57 Corporate and foreign bonds 4,175.4 4,602.6 4,991.4 5,624.7 5,624.7 5,776.1 5,926.6 5,965.8 6,139.9 6,290.0 6,475.5 58 Bank loans n.e.c 1,314.8 1,383.8 1,496.6 1,421.0 1,421.0 1,409.1 1,377.8 1,361.7 1,340.4 1,302.3 1,287.9 59 Other loans and advances 1,171.9 1,299.9 1,425.5 1,458.4 1,458.4 1,443.1 1,464.3 1,491.1 1,495.1 1,512.9 1,531.3 60 Mortgages 5,712.0 6,314.8 6,884.9 7,585.3 7,585.3 7,751.3 7,967.2 8,201.7 8,459.5 8,668.2 8,962.6 61 Consumer credit 1,430.1 1,550.4 1,727.7 1,853.7 1,853.7 1,835.8 1,861.1 1,892.5 1,932.9 1,907.8 1,925.1 1. Data in this table appear in the Board's Z.l (780) quarterly statistical release, tables L.2 through L.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A39 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 2001 2002 2003 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999988 11999999 22000000 22000011 Q4 QL Q2 Q3 Q4 QL Q2 CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 23,423.8 25,576.1 27,319.4 29,316.0 29,316.0 29,772.1 30,294.7 30,831.2 31,614.9 32,143.9 32,877.5 2 Domestic nonfederal nonfinancial sectors 3,304.8 3,622.8 3,572.5 3,585.9 3,585.9 3,594.8 3,652.9 3,601.4 3,644.0 3,539.0 3,528.7 Household 2,256.3 2,564.4 2,490.1 2,475.8 2,475.8 2,493.8 2,539.0 2,477.1 2,497.6 2,422.1 2,384.9 4 Nonfinancial corporate business 241.5 226.0 249.4 237.1 237.1 231.6 229.5 238.9 249.3 239.5 249.4 Nonfarm noncorporate business 67.5 64.6 65.9 67.9 67.9 68.7 69.6 70.3 71.3 71.2 72.2 6 State and local governments 739.4 767.8 767.0 805.1 805.1 800.6 814.7 815.1 825.9 806.2 822.2 7 Federal government 221.5 261.1 272.7 278.7 278.7 281.0 280.1 287.9 288.7 284.1 283.7 8 Rest of the world 2,273.5 2,306.8 2,476.9 2,724.3 2,724.3 2,789.5 2,900.9 3,003.2 3,131.0 3,223.9 3,484.7 9 Financial sectors 17,624.1 19,385.4 20,997.4 22,727.1 22,727.1 23,106.8 23,460.8 23,938.7 24,551.1 25,096.9 25,580.3 10 Monetary authority 452.5 478.1 511.8 551.7 551.7 575.4 590.7 604.2 629.4 641.5 652.1 11 Commercial banking 4,336.1 4,648.3 5,006.3 5,210.5 5,210.5 5,231.3 5,328.3 5,476.2 5,614.9 5,673.6 5,829.1 17 U.S.-chartered banks 3,761.4 4,080.0 4,419.5 4,610.1 4,610.1 4,629.3 4,719.7 4,858.4 5,003.9 5,055.6 5,198.1 13 Foreign banking offices in United States 504.5 487.4 511.3 510.7 510.7 507.7 512.6 521.2 516.9 519.0 517.9 14 Bank holding companies 26.5 32.7 20.5 24.7 24.7 27.7 28.1 27.7 27.8 33.0 42.9 IS Banks in U.S.-affiliated areas 43.8 48.3 55.0 65.0 65.0 66.6 67.9 68.8 66.3 66.1 70.3 16 Savings institutions 964.7 1,032.4 1,088.6 1,131.4 1,131.4 1,134.7 1,130.9 1,153.8 1,166.8 1,214.4 1,238.8 17 Credit unions 324.2 351.7 379.7 421.2 421.2 434.3 452.9 455.3 463.9 473.2 494.2 18 Bank personal trusts and estates 194.1 222.0 222.8 194.7 194.7 195.0 195.2 195.4 195.6 190.8 186.4 19 Life insurance companies 1,828.0 1,886.0 1,943.9 2,074.8 2,074.8 2,141.2 2,192.3 2,265.7 2,307.8 2,373.0 2,426.7 20 Other insurance companies 521.1 518.2 509.4 518.4 518.4 527.6 536.4 541.9 558.3 572.7 583.4 21 Private pension funds 621.1 635.2 666.5 673.1 673.1 684.9 690.4 700.5 700.5 702.3 712.2 22 State and local government retirement funds 704.6 751.4 806.0 788.4 788.4 806.0 792.4 789.8 804.9 805.0 820.6 73 Money market mutual funds 965.9 1,147.8 1,290.9 1,536.9 1,536.9 1,496.9 1,419.6 1,405.7 1,511.6 1,485.5 1,480.3 7.4 Mutual funds 1,028.4 1,076.8 1,097.8 1,223.8 1,223.8 1,276.8 1,291.6 1,334.5 1,365.4 1,412.0 1,469.8 75 Closed-end funds 98.4 106.9 100.6 107.4 107.4 113.5 112.9 112.4 116.7 124.5 130.5 26 Government-sponsored enterprises 1,252.3 1,543.5 1,807.1 2,114.3 2,114.3 2,163.8 2,200.2 2,253.0 2,320.9 2,387.0 2,419.0 27 Federally related mortgage pools 2,018.4 2,292.2 2,491.6 2,830.1 2,830.1 2,955.1 3,041.6 3,084.5 3,158.2 3,226.3 3,289.0 28 Asset-backed securities (ABSs) issuers 1,219.4 1,413.6 1,585.7 1,851.9 1,851.9 1,902.6 1,956.2 2,002.9 2,097.8 2,162.8 2,231.0 29 Finance companies 645.5 742.6 851.2 846.4 846.4 834.4 848.2 860.8 867.6 861.1 879.2 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 42.5 49.1 57.0 63.9 65.6 63.5 71.2 3? Brokers and dealers 189.4 154.7 223.6 316.0 316.0 299.6 352.6 335.2 344.4 390.9 340.2 33 Funding corporations 152.3 276.0 311.0 216.7 216.7 206.3 191.2 214.6 167.2 236.2 225.5 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Total credit market debt 23,423.8 25,576.1 27,319.4 29,316.0 29,316.0 29,772.1 30,294.7 30,831.2 31,614.9 32,143.9 32,877.5 Other liabilities 35 Official foreign exchange 60.1 50.1 46.1 46.8 46.8 45.7 47.2 53.1 55.8 57.6 58.9 .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 24.7 24.8 25.5 25.5 25.6 26.0 38 Foreign deposits 624.9 686.1 820.3 851.0 851.0 840.1 856.6 869.8 874.9 856.5 876.1 39 Net interbank liabilities 189.4 202.4 221.2 191.4 191.4 162.4 131.4 150.7 205.9 175.5 155.6 40 Checkable deposits and currency 1,333.3 1,484.5 1,413.1 1,603.2 1,603.2 1,518.1 1,571.9 1,610.7 1,646.7 1,680.4 1,703.5 41 Small time and savings deposits 2,626.5 2,671.6 2,860.4 3,127.6 3,127.6 3,236.7 3,256.4 3,336.8 3,398.7 3,502.5 3,575.0 42 Large time deposits 805.3 936.4 1,052.6 1,121.1 1,121.1 1,178.9 1,188.7 1,199.9 1,171.5 1,209.1 1,222.4 43 Money market fund shares 1,329.7 1,578.8 1.812.1 2,240.7 2,240.7 2,203.3 2,151.2 2,105.9 2,223.9 2,156.2 2,120.8 44 Security repurchase agreements 913.8 1,083.6 1,196.8 1,231.8 1,231.8 1,262.4 1,343.1 1,313.7 1,336.8 1,323.1 1,453.5 45 Mutual fund shares 3,613.1 4,538.5 4,434.6 4,135.5 4,135.5 4,247.0 3,926.6 3,452.3 3,639.4 3,591.0 4,072.6 46 Security credit 572.2 676.6 822.7 825.9 825.9 778.0 745.6 726.3 738.8 796.6 957.4 47 Life insurance reserves 718.3 783.9 819.1 880.0 880.0 894.2 901.2 902.9 920.9 941.2 975.2 48 Pension fund reserves 8,210.5 9,067.6 9,070.9 8,681.1 8,681.1 8,812.9 8,329.4 7,725.4 8,005.7 7,923.8 8,562.9 49 Trade payables 2,073.8 2,342.3 2,761.8 2,688.4 2,688.4 2,715.3 2,717.9 2,767.1 2,820.1 2,834.2 2,874.4 50 Taxes payable 170.7 201.4 234.2 251.6 251.6 259.7 265.8 281.7 278.8 298.6 306.4 51 Investment in bank personal trusts 1,001.0 1,130.4 1,095.8 960.7 960.7 963.2 893.5 811.6 840.9 806.3 858.4 52 Miscellaneous 8,298.5 9,294.9 10,470.7 11,177.0 11,177.0 11,267.0 11,556.2 12,003.5 11,704.3 11,952.4 11,837.6 53 Total liabilities 55,993.9 62,332.2 66,477.2 69,356.5 69,356.5 70,183.9 70,204.6 70,170.3 71,505.6 72,276.6 74,516.6 Financial assets not included in liabilities (+) 54 Gold and special drawing rights 21.6 21.4 21.6 21.8 21.8 21.9 22.3 22.8 23.2 22.4 22.8 55 Corporate equities 15,547.3 19,522.8 17,627.0 15,316.0 15,316.0 15,243.6 13,344.2 10,951.6 11,875.2 11,422.2 13,253.6 56 Household equity in noncorporate business 4,279.4 4,510.0 4,743.3 4,824.6 4,824.6 4,848.0 4,912.8 4,974.3 5,020.1 5,069.5 5,105.0 Liabilities not identified as assets (—) 57 Treasury currency -6.4 -7.1 -8.5 -8.6 -8.6 -8.9 -9.1 -8.9 -9.1 -9.2 -9.1 58 Foreign deposits 525.5 568.2 646.6 657.7 657.7 636.0 660.7 666.7 675.9 658.3 686.5 59 Net interbank transactions -26.5 -28.5 -4.3 11.1 11.1 21.9 17.5 16.5 15.3 19.3 6.9 60 Security repurchase agreements 230.6 266.4 388.9 348.6 348.6 401.4 463.9 380.7 356.2 397.6 477.1 61 Taxes payable 121.2 129.4 146.3 121.7 121.7 110.7 163.6 155.0 154.9 144.8 152.4 62 Miscellaneous -1,934.5 -2,331.6 -3,422.0 -3,594.1 -3,594.1 -3,472.3 -3,502.4 -3,396.0 -3,504.0 -3,520.5 -3,787.7 Floats not included in assets (-) 63 Federal government checkable deposits -3.9 -9.8 -2.3 -12.3 -12.3 -9.6 -9.3 -14.8 -11.7 27.4 -17.1 64 Other checkable deposits 23.1 22.3 24.0 28.6 28.6 26.3 31.4 25.8 35.9 34.2 40.1 65 Trade credit 84.8 95.6 122.0 115.5 115.5 61.0 15.0 9.8 96.4 47.1 19.7 66 Totals identified to sectors as assets 76,110.3 86,905.3 90,179.0 90,988.8 90,988.8 91,677.9 89,795.0 87,418.1 89,717.7 90,106.5 94,422.0 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares. L.l and L.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • December 2003 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 2002 2003 2002 2003 2002 2003 Q4' Qlr Q2r Q3 Q4r Qir Q2r Q3 Q4r Q!r Q2r Q3 Output (1997=100) Capacity (percent of 1997 output) Capacity utilization rate (percent)2 1 Total industry 110.9 111.2 110.0 111.1 147.5 148.0 148.4 148.8 75.2 75.1 74.1 74.7 2 Manufacturing 111.7 112.0 111.1 112.0 152.0 152.4 152.8 153.2 73.5 73.5 72.7 73.2 3 Manufacturing (NAICS) 112.3 112.3 111.3 112.5 153.5 154.0 154.5 154.9 73.2 72.9 72.0 72.6 4 Durable manufacturing 123.9 124.3 123.1 125.5 175.7 176.9 178.0 179.1 70.5 70.3 69.1 70.1 5 Primary metal 87.0 86.6 82.9 83.1 112.8 112.8 112.9 113.0 77.1 76.8 73.4 73.5 6 Fabricated metal products 96.9 95.6 93.5 93.8 139.0 139.1 139.3 139.5 69.7 68.8 67.2 67.3 7 Machinery 86.1 86.0 86.0 86.5 129.0 128.7 128.3 128.0 66.7 66.8 67.0 67.6 8 Computer and electronic products 245.9 253.1 257.7 271.1 390.0 400.5 409.7 417.9 63.1 63.2 62.9 64.9 9 Electrical equipment, appliances, and components 94.6 93.7 92.9 93.2 127.7 127.4 127.1 126.8 74.1 73.5 73.1 73.5 10 Motor vehicles and parts 116.2 116.4 113.0 118.0 143.0 143.9 145.0 146.2 81.3 80.9 77.9 80.7 11 Aerospace and miscellaneous transportation equipment 95.1 94.4 94.0 94.2 147.8 147.8 147.8 147.8 64.3 63.8 63.6 63.8 12 Nondurable manufacturing 97.9 97.5 96.7 96.6 127.6 127.4 127.1 126.9 76.7 76.5 76.1 76.2 13 Food, beverage, and tobacco products .... 98.4 98.3 98.0 97.6 127.2 127.0 126.7 126.4 77.3 77.4 77.3 77.2 14 Textile and product mills 82.6 80.1 77.8 75.8 110.2 109.5 108.6 107.7 74.9 73.2 71.7 70.4 15 Paper 94.6 92.8 92.7 91.9 111.4 111.0 110.6 110.3 84.9 83.6 83.8 83.3 16 Petroleum and coal products 100.5 101.1 100.4 101.1 114.1 114.3 114.7 115.1 88.1 88.4 87.6 87.8 17 Chemical 104.4 104.9 104.5 105.5 143.2 143.6 144.0 144.4 72.9 73.1 72.6 73.0 18 Plastics and rubber products 104.0 103.7 102.6 103.2 130.7 130.3 129.6 128.9 79.5 79.6 79.1 80.1 19 Other manufacturing (non-NAICS) 101.6 105.6 106.4 104.9 128.9 128.3 127.8 127.4 78.9 82.3 83.2 82.3 20 Mining 93.3 93.3 93.1 93.5 110.3 110.1 110.0 109.8 84.6 84.7 84.7 85.1 21 Electric and gas utilities 113.0 113.1 109.2 111.9 129.5 131.2 132.6 133.9 87.2 86.3 82.4 83.5 MEMOS 22 Computers, communications equipment, and semiconductors 331.0 341.9 353.6 377.5 536.2 554.2 570.2 584.8 61.7 61.7 62.0 64.5 23 Total excluding computers, communications equipment, and semiconductors 100.1 100.2 98.9 99.6 131.3 131.3 131.4 131.4 76.3 76.3 75.3 75.7 24 Manufacturing excluding computers, communications equipment, and semiconductors 99.1 99.1 98.0 98.5 132.8 132.8 132.7 132.6 74.6 74.7 73.9 74.3 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 2003 series High Low High Low High Low Sept. Apr. May June' July' Aug.' Sept.P Capacity utilization rate (percent)2 1 Total industry 88.8 74.0 86.6 70.9 85.2 78.6 75.7 74.2r 74.1r 74.0 74.5 74.6 74.9 2 Manufacturing 88.1 71.5 86.3 68.7 85.6 77.2 74.2 72.7r 72.6' 72.7 73.0 73.0 73.5 3 Manufacturing (NAICS) 88.1 71.3 86.3 68.0 85.5 77.0 73.9 72. lr llff 72.0 72.5 72.4 73.0 4 Durable manufacturing 89.0 69.6 86.9 63.2 84.5 73.4 70.8 69. lr 69.0' 69.3 69.8 69.8 70.7 5 Primary metal 100.8 69.0 91.1 47.2 95.3 75.2 76.9 74.2r 72.8' 73.3 73.4 73.0 74.2 6 Fabricated metal products .... 91.8 70.3 83.3 62.0 80.3 71.1 70.1 67.5' (>1.0f 67.0 67.6 66.8 67.4 7 Machinery 94.3 74.4 93.1 58.4 84.6 72.8 67.2 66.5' 61.2' 67.3 67.0 67.6 68.1 8 Computer and electronic products 86.9 66.7 89.5 77.3 81.1 76.3 63.1 62.6' (tiff 63.1 64.2 65.2 65.2 9 Electrical equipment, appliances, and components 99.2 68.5 91.9 64.5 87.4 75.0 73.3 73.0' 72.7' 73.7 73.2 73.4 74.0 10 Motor vehicles and parts 95.7 55.6 96.3 45.3 89.7 56.5 82.1 78.2' 77.2' 78.3 80.0 78.6 83.5 11 Aerospace and miscellaneous transportation equipment. 74.9 65.9 84.2 69.6 88.9 81.9 65.2 63.4r 63.8' 63.6 63.4 64.0 63.9 12 Nondurable manufacturing 87.5 72.4 85.7 75.6 87.0 81.8 77.9 76.2' 76.1' 75.8 76.2 76.1 76.2 13 Food, beverage, and tobacco products 85.9 77.9 84.3 80.4 85.5 81.3 79.8 77.2' 77.3' 77.4 77.7 77.0 76.8 14 Textile and product mills .... 89.8 62.7 90.2 72.4 91.4 77.2 75.1 72.1' 71.6' 71.3 71.1 70.5 69.7 15 Paper 97.3 74.4 95.4 81.3 93.7 85.2 84.7 83.2' 83.8r 84.3 84.3 82.9 82.6 16 Petroleum and coal products . . 93.2 81.0 92.3 71.2 88.9 82.5 87.0 87.8' 88.6' 86.3 87.0 88.4 87.9 17 Chemical 84.8 68.8 83.1 68.1 85.6 80.8 74.2 73.4' 72.5' 71.8 72.4 73.2 73.5 18 Plastics and rubber products . . 96.4 61.6 89.9 70.5 91.3 77.2 80.2 78.7' 79.4' 79.2 79.6 80.1 80.5 19 Other manufacturing (non-NAICS). 85.5 75.0 88.2 85.7 90.7 79.1 79.3 82.8' 83^ 83.8 82.3 82.5 82.2 20 Mining 93.6 87.6 94.2 78.6 85.6 83.4 82.7 84.9' 84.3' 84.8 85.0 84.7 85.6 21 Electric and gas utilities 96.3 82.7 88.1 77.6 92.8 84.1 86.9 82.8' 83.1' 81.1 83.4 84.6 82.7 MEMOS 22 Computers, communications equipment, and semiconductors . 84.4 63.1 89.4 75.4 79.9 74.5 61.8 61.6' 61.9' 62.5 63.6 65.0 65.0 23 Total excluding computers, communications equipment, and semiconductors 89.1 74.3 86.7 70.7 85.6 78.8 76.7 75.4' 75.3r 75.1 75.6 75.6 76.0 24 Manufacturing excluding computers communications equipment, and semiconductors . 88.4 71.8 86.3 68.2 86.1 77.3 75.3 73.9 73.8' 73.9 74.2 74.0 74.6 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 November 2003. The recent annual revision will be described in an Industry Classification System, or NAICS, manufacturing plus those industries—logging and upcoming 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 • December 2003 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data seasonally adjusted 2002 2002 2003 ru roup pro- 2002 por- avg. tion Sept.r Oct.' Nov.r Dec.r Jan.' Feb/ Mar/ Apr.' May' June' July' Aug.' Sept.P Index(1997= 100) MAJOR MARKETS 1 Total IP 100.0 110.9 111.3 111.0 111.2 110.6 111.2 111.6 110.8 110.1 110.0 110.0 110.8 111.0 111.5 Market groups 2 Final products and nonindustrial supplies 58.9 107.9 108.2 108.0 107.8 107.3 108.1 108.6 107.9 106.9 107.1 106.8 107.5 107.8 108.1 3 Consumer goods 31.1 106.8 107.3 106.7 106.6 105.6 106.6 107.0 106.3 105.3 105.5 105.0 105.8 105.9 106.2 4 Durable 8.1 115.7 117.0 115.9 118.8 116.8 119.4 117.2 116.4 115.5 115.3 116.2 118.2 117.3 120.6 5 Automotive products 4.0 124.1 127.1 124.9 129.5 124.9 129.5 127.1 125.7 124.4 123.5 125.7 129.1 127.3 135.1 6 Home electronics 0.3 148.4 150.6 151.2 163.9 166.2 184.7 167.2 170.8 172.7 168.8 169.4 170.7 176.6 176.4 7 Appliances, furniture, carpeting 1.4 110.8 109.7 109.0 110.8 111.1 111.0 110.4 109.8 110.0 111.7 110.8 112.2 111.9 110.6 8 Miscellaneous goods 2.3 100.3 100.6 100.7 100.8 100.9 100.3 99.2 98.6 97.5 97.5 97.7 97.8 97.5 97.1 9 Nondurable 23.0 103.4 103.6 103.2 102.1 101.5 101.9 103.2 102.6 101.4 101.8 100.9 101.3 101.7 101.1 10 Non-energy 18.6 102.0 102.6 101.6 99.7 98.8 100.1 100.2 100.6 100.1 100.0 99.8 99.6 99.4 99.1 11 Foods and tobacco 10.4 100.7 101.2 99.8 96.9 96.0 97.6 97.1 97.6 96.9 97.1 97.1 97.3 96.3 95.8 12 Clothing 1.0 70.9 72.1 70.3 71.1 69.4 68.0 66.6 65.7 64.0 64.1 62.2 61.6 59.7 59.7 13 Chemical products 4.6 115.6 116.3 115.5 114.7 113.9 114.6 115.3 115.7 116.3 115.6 114.4 114.4 116.6 116.5 14 Paper products 2.1 103.9 104.7 105.5 104.6 102.8 106.3 108.5 109.6 108.6 109.0 110.2 108.4 108.8 108.4 15 Energy 4.4 110.0 108.6 110.8 113.5 114.3 110.7 117.6 112.1 108.5 110.4 107.1 109.8 112.3 110.5 16 Business equipment 10.0 109.5 109.3 108.8 109.6 109.2 109.8 110.6 110.0 108.7 108.6 109.0 109.3 110.0 110.8 17 Transit 1.8 84.5 82.1 80.4 80.1 77.9 78.1 76.7 76.2 75.0 74.3 74.0 73.9 74.0 75.9 18 Information processing 3.2 159.6 160.7 161.5 164.3 167.0 169.0 172.1 172.3 170.0 170.8 170.9 172.5 174.8 175.1 19 Industrial and other 5.1 90.5 90.6 90.2 90.5 89.7 89.8 90.6 89.8 88.9 88.8 89.4 89.5 89.8 90.2 20 Defense and space equipment 1.9 105.7 107.2 107.9 107.1 109.7 110.3 111.0 111.0 110.3 111.8 111.8 112.1 112.8 113.3 21 Construction supplies 4.3 103.1 103.4 103.2 102.8 102.1 102.7 101.9 101.2 100.6 100.8 100.8 101.5 101.9 102.2 22 Business supplies 11.2 110.7 111.1 111.7 111.0 110.9 111.8 112.6 111.9 111.1 111.0 110.6 111.5 111.8 111.5 23 Materials 41.1 115.1 115.7 115.3 115.9 115.3 115.5 115.8 114.7 114.5 114.1 114.4 115.4 115.5 116.5 24 Non-energy 30.5 118.9 120.0 119.5 119.8 119.0 119.4 119.3 118.7 118.3 117.9 118.3 119.2 119.3 120.6 25 Durable 19.2 132.5 134.1 134.0 134.3 133.0 134.0 133.7 132.7 132.2 132.1 133.1 134.6 134.9 136.8 26 Consumer parts 4.0 105.9 106.7 106.3 108.8 106.1 108.8 107.1 106.0 104.8 103.9 105.0 105.9 105.1 109.4 27 Equipment parts 6.8 199.4 203.8 203.2 203.5 203.0 203.9 205.2 205.1 206.0 207.9 210.5 214.2 217.1 219.4 28 Other 8.4 96.9 97.5 97.7 96.9 96.1 96.3 96.0 94.9 94.1 93.8 94.0 94.6 94.3 94.8 29 Nondurable 11.3 96.6 96.9 96.0 96.3 96.2 95.7 96.0 95.9 95.5 94.8 94.5 94.8 94.5 95.1 30 Textile 0.8 78.2 77.8 77.0 77.4 75.7 74.4 74.3 73.2 71.8 70.4 69.9 67.8 67.0 67.4 31 Paper 2.7 92.7 93.3 93.1 93.8 93.1 91.5 91.3 91.8 90.6 90.5 90.7 90.9 89.2 89.6 32 Chemical 4.2 100.1 100.5 98.9 99.2 99.6 99.5 100.1 99.6 100.2 98.1 97.0 98.5 99.3 100.7 33 Energy 10.6 100.5 99.7 99.8 100.9 101.0 100.6 101.7 99.8 100.2 99.6 99.6 100.9 101.0 101.1 SPECIAL AGGREGATES 34 Total excluding computers, communication equipment, and semiconductors 94.8 100.5 100.7 100.3 100.3 99.8 100.3 100.5 99.7 99.0 98.9 98.7 99.4 99.4 99.9 35 Total excluding motor vehicles and parts 93.3 110.6 110.9 110.8 110.6 110.3 110.6 111.3 110.5 109.9 109.9 109.7 110.4 110.7 110.8 Gross value (billions of 1996 dollars, annual rates) 36 Final products and nonindustrial supplies 58.9 2,726.7 2,738.9 2,728.0 2,741.3 2,723.8 2,742.2 2,749.6 2,730.1 2,704.8 2,708.8 2,700.9 2,729.6 2,734.4 2,752.1 37 Final products 43.4 2,054.0 2,064.4 2,050.9 2,068.2 2,053.0 2,066.7 2,072.7 2,058.7 2,038.0 2,041.0 2,037.6 2,059.6 2,061.1 2,080.3 38 Consumer goods 31.1 1,398.9 1,406.1 1,396.4 1,409.5 1,397.2 1,407.8 1,410.6 1,400.6 1,386.5 1,388.5 1,383.9 1,401.2 1,399.2 1,411.4 39 Equipment total 12.3 649.4 652.5 648.8 652.5 650.2 652.9 656.7 652.8 646.3 647.4 649.6 653.2 657.9 665.4 40 Nonindustrial supplies 15.5 672.6 674.4 677.0 673.0 670.8 675.4 676.8 671.3 666.8 667.7 663.3 669.9 673.3 671.7 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 2002 2002 NAICS pro- 2002 Group code2 por- avg. Sept.' Oct.' Nov.' Dec Apr.' May' June' July' Aug.' Sept Index (1997=100) INDUSTRY GROUPS 41 Manufacturing 83.5 111.8 112.5 111.9 111.9 111.3 112.0 112.1 111.8 111.1 111.0 111.2 111.8 111.8 112.6 42 Manufacturing (NAICS) 78.4 112.5 113.1 112.4 112.6 111.9 112.6 112.4 112.0 111.3 111.2 111.4 112.2 112.2 113.1 43 Durable manufacturing 42.6 122.9 123.8 123.5 124.5 123.6 124.8 124.5 123.6 122.8 122.8 123.6 124.8 124.9 126.8 44 Wood products 321 1.4 100.6 99.5 100.1 98.4 97.5 98.5 98.4 97.0 97.1 97.0 97.7 99.6 99.3 99.0 45 Nonmetallic mineral products 327 2.3 99.9 101.4 101.1 100.9 101.2 101.4 99.8 100.3 99.9 99.3 100.0 100.8 101.2 100.9 46 Primary metal 331 2.2 86.5 86.7 87.9 88.8 84.3 88.3 88.0 83.5 83.8 82.2 82.7 82.9 82.5 83.9 47 Fabricated metal products . 332 5.9 97.4 97.4 97.7 96.5 96.6 96.2 95.7 95.0 94.0 93.2 93.3 94.2 93.2 94.1 48 Machinery 333 5.2 86.8 86.8 86.1 86.5 85.6 85.2 86.5 86.3 85.4 86.2 86.3 85.9 86.5 87.1 49 Computer and electronic products 334 8.1 234.7 241.2 242.4 246.5 248.9 251.1 253.6 254.6 254.6 258.0 260.5 266.7 272.4 274.2 50 Electrical equipment, appliances, and components 335 2.3 96.4 93.8 94.1 94.8 94.8 93.5 94.6 93.0 92.8 92.4 93.6 92.9 93.1 93.7 51 Motor vehicles and parts . . 3361-3 6.7 114.5 117.0 115.1 118.9 114.6 118.7 116.0 114.4 113.0 112.0 113.8 116.6 115.0 122.5 52 Aerospace and miscellaneous transportation equipment 3364-9 3.6 97.5 96.4 95.7 94.6 94.8 94.7 94.1 94.3 93.7 94.2 94.0 93.8 94.5 94.4 53 Furniture and related products 337 1.7 103.4 104.1 103.1 103.8 102.0 103.9 103.1 101.5 101.0 100.8 100.3 101.2 100.6 100.5 54 Miscellaneous 339 3.2 116.0 115.9 116.0 116.8 119.0 119.1 118.9 118.8 117.1 116.6 117.2 116.6 115.5 115.8 55 Nondurable manufacturing . . 35.8 99.2 99.5 98.5 97.8 97.4 97.5 97.5 97.5 97.0 96.8 96.3 96.7 96.6 96.6 56 Food, beverage, and tobacco products .... 311,2 11.9 101.3 101.7 100.4 97.7 97.1 98.4 98.0 98.4 97.8 98.0 98.0 98.3 97.3 97.0 57 Textile and product mills . . 313,4 1.3 83.9 83.2 82.3 83.2 82.3 79.8 80.4 80.1 78.5 77.7 77.2 76.7 75.9 74.9 58 Apparel and leather 315,6 1.1 70.8 71.9 70.3 71.1 69.4 68.1 66.7 65.9 64.2 64.2 62.5 62.0 60.2 60.2 59 Paper 322 3.1 93.5 94.7 94.2 95.3 94.2 92.4 92.5 93.4 92.2 92.7 93.1 93.0 91.5 91.1 60 Printing and support 323 2.5 93.7 92.9 92.6 92.7 93.0 92.7 92.3 90.3 90.3 88.8 88.8 89.0 88.7 89.5 61 Petroleum and coal products 324 2.2 100.6 99.3 97.1 101.3 103.0 100.8 100.4 102.1 100.5 101.6 99.1 100.0 101.8 101.4 62 Chemical 325 10.0 105.3 105.9 104.7 104.3 104.0 104.5 105.3 105.0 105.6 104.4 103.5 104.5 105.6 106.3 63 Plastics and rubber products 326 3.8 104.3 105.1 104.7 103.9 103.4 103.4 103.8 103.9 102.2 103.0 102.5 102.8 103.2 103.5 64 Other manufacturing (non-NAICS) 1133,5111 5.1 102.0 102.5 102.8 101.6 100.5 103.7 106.0 107.0 106.0 106.1 107.0 105.0 105.1 104.6 65 Mining 21 6.8 93.0 91.3 91.8 93.8 94.2 93.4 93.3 93.1 93.4 92.7 93.2 93.4 93.0 94.0 66 Utilities 2211,2 9.8 111.3 111.6 113.4 112.8 112.8 112.3 116.4 110.8 109.4 110.2 107.9 111.3 113.3 111.0 67 Electric 2211 8.3 113.3 114.3 115.5 113.8 114.0 113.9 117.2 112.9 111.9 112.4 109.8 114.1 116.4 113.7 68 Natural gas 2212 1.5 99.9 96.3 101.5 106.5 105.2 102.6 110.8 99.4 96.5 98.0 97.5 96.7 97.6 97.0 69 Manufacturing excluding computers, communications equipment, and semiconductors 78.2 99.7 100.0 99.4 99.3 98.6 99.3 99.2 98.8 98.1 97.9 98.0 98.4 98.2 98.9 70 Manufacturing excluding motor vehicles and parts 76.8 111.6 112.1 111.6 111.3 111.0 111.5 111.8 111.6 110.9 110.9 110.9 111.4 111.5 111.8 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 November 2003. The recent annual revision will be described in an upcoming 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 • December 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 Q2 Q3 Q4 Ql Q2P 1 Balance on current account -411,458 -393,745 -480,861 -122,827 -122,724 -128,586 -138,707 -138,671 2 Balance on goods and services -375,384 -357,819 ^118,038 -104,888 -106,980 -116,116 -121,629 -123,408 3 Exports 1,070,054 1,007,580 974,107 243,696 247,815 246,151 247,377 247,991 4 Imports -1,445,438 -1,365.399 -1,392,145 -348,584 -354,795 -362,267 -369,006 -371,399 5 Income, net 19,605 10,689 -3,970 -4,458 -1,747 2,966 191 1,679 6 Investment, net 24,191 15,701 1,271 -3,106 -481 4,306 1,567 2,984 7 Direct 94,929 106,485 93,475 21,410 21,914 26,225 22,077 22,823 8 Portfolio -70,738 -90,784 -92,204 -24,516 -22,395 -21,919 -20,510 -19,839 9 Compensation of employees -4,586 -5,012 -5,241 -1,352 -1,266 -1,340 -1,376 -1,305 10 Unilateral current transfers, net -55,679 -46.615 -58,853 -13,481 -13,997 -15,436 -17,269 -16,942 11 Change in U.S. government assets other than official reserve assets, net (increase, -) -941 -486 -32 42 -27 -180 -70 -323 12 Change in U.S. official reserve assets (increase, -) -290 -4,911 -3,681 -1,843 -1,416 -812 83 -170 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -722 -630 ^175 -107 -132 -127 897 -102 15 Reserve position in International Monetary Fund 2,308 -3,600 -2,632 -1,607 -1,136 -541 -644 86 16 Foreign currencies -1,876 -681 -574 -129 -148 -144 -170 -154 17 Change in U.S. private assets abroad (increase, -) -568.567 -344,542 -175,272 -126,766 31,155 -43,910 -101,344 -106,172 18 Bank-reported claims2 -148,657 -134,945 -21,357 -69,254 52,999 -4,954 -27,795 -60,603 19 Nonbank-reported claims -138,790 -4,997 -31,880 -16,210 -11,862 -1,922 -11,998 -22,789 20 U.S. purchase of foreign securities, net -121,908 -84,637 15,801 -5,843 21,641 -5,364 -27,146 9,240 21 U.S. direct investments abroad, net -159,212 -119,963 -137,836 -35,459 -31,623 -31,670 -34,405 -32,020 22 Change in foreign official assets in United States (increase, +) 37,724 5,104 94,860 47,552 8,992 32,210 40,978 57,580 23 U.S. Treasury securities -10,233 10,745 43,144 15,138 1,415 27,630 22,288 33,232 24 Other U.S. government obligations 40,909 20,920 30,377 6,568 10,885 5,628 9,480 3,290 25 Other U.S. government liabilities2 -1,825 -2,309 137 365 464 -95 —437 -32 26 Other U.S. liabilities reported by U.S. banks2 5,746 -29,978 17,594 24,575 -4,607 -2,094 8,321 20,385 27 Other foreign official assets3 3,127 5,726 3,608 906 835 1,141 1,326 705 28 Change in foreign private assets in United States (increase, +) 988,415 760,427 612,123 173,690 132,486 165,238 201,026 197,693 29 U.S. bank-reported liabilities4 116,971 118,379 91,126 23,948 20,448 54,176 16,723 33,245 30 U.S. nonbank-reported liabilities 170,672 67,489 72,142 24,610 -8,102 8,863 74,848 3,189 31 Foreign private purchases of U.S. Treasury securities, net -76,949 -7,438 96,217 14,218 57,505 12,705 14,568 61,139 32 U.S. currency flows 1,129 23,783 21,513 7,183 2,556 7,249 4,927 1,458 33 Foreign purchases of other U.S. securities, net 455,318 406,633 291,492 104,187 45,880 66,964 55,574 86,525 34 Foreign direct investments in United States, net 321,274 151,581 39,633 -456 14,199 15,281 34,386 12,137 35 Capital account transactions, net5 -799 -1,062 -1,285 -286 -364 -358 -388 -325 36 Discrepancy -44,084 -20,785 -45,852 30,438 -48,102 -23,602 -1,578 -9,612 37 Due to seasonal adjustment 2,091 -12,409 1,744 9,479 702 38 Before seasonal adjustment -44.084 -20,785 -45,852 28,347 -35,693 -25,346 -11,057 -10,314 MEMO Changes in official assets 39 U.S. official reserve assets (increase, -) -290 -4,911 -3,681 -1,843 -1,416 -812 83 -170 40 Foreign official assets in United States, excluding line 25 (increase, +) 39,549 7,413 94,723 47,187 8,528 32,305 41,415 57,612 41 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) 12,000 -1,725 -8,132 838 -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 2003 AAsssseett 22000000 22000011 22000022 Mar. Apr. May June July Aug. Sept. Oct.p 1 Total 67,647 68,654 79,006 80,049 80,405 82,287 81,660 80,620 80,422 84,431 84,150 2 Gold stock1 11,046 11.045 11,043 11,043 11,043 11,044 11,044 11,043 11,043 11,043 11,043 3 Special drawing rights2-3 10,539 10,774 12,166 11,392 11,476 11,880 11,720 11,646 11,619 12,062 12,079 4 Reserve position in International Monetary Fund2 14,824 17,854 21,979 22,858 22,738 23,214 23,210 22,746 22,463 24,067 23,595 5 Foreign currencies4 31,238 28,981 33,818 34,756 35,148 36,149 35,686 35,185 35,297 37,259 37,433 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 2003 AAsssseett 22000000 22000011 22000022 Mar. Apr. May June July Aug. Sept.' Oct.p 1 Deposits 215 61 136 254 313 79 898 318 81 82c 155 Held in custody 2 U.S. Treasury securities2 594,094 592,630 678,106 710,955 702,041 727,142 747,089 743,308 754,469 772,222° 788,734 3 Earmarked gold3 9,451 9,099 9,045 9,045 9,040 9,031 9,004 9,004 8,977 8,971 8,971 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 2003 IItteemm 22000011 22000022'' Feb.' Mar.' Apr.' May' June' July' Aug.P 1 Total1 984,713 1,078,908 1,108,621 1,117,862 1,116,151 1,167,826 1,172,851 1,181,513 1,190,755 By type 2 Liabilities reported by banks in the United States2 120,571 144,478 152,065 149,795 150,983 175,052 167,423 167,540 168,089 3 U.S. Treasury bills and certificates3 161,719 190,372 196,368 206,043 200,352 210,065 209,957 205,807 214,185 U.S. Treasury bonds and notes 4 Marketable 454,306 464,415 469,440 471,451 471,085 486,334 500,804 513,142 512,095 5 Nonmarketable4 3,411 2,769 2,803 2,821 2,839 2,857 2,876 2,894 2,913 6 U.S. securities other than U.S. Treasury securities5 244,706 276,874 287,945 287,752 290,892 293,518 291,791 292,130 293,473 By area 7 Europe' 243,307 271,168 281,418 278,555 275,313 290,588 279,053 279,875 277,132 8 Canada 13,440 11,120 9,837 10,154 9,746 9,942 9,998 9,791 10,412 9 Latin America and Caribbean 71,103 63,321 63,237 62.988 62,859 65.311 71,055 72,976 72,989 10 632,466 704,598 725,568 740,110 739,764 774,704 781,904 789,049 800,776 11 Africa 15,167 15,338 15,939 15,215 15,834 15,656 15,829 15,788 15,712 12 Other countries 9,228 13,361 12,620 10,838 12,633 11,623 15,010 14,032 13,732 1. Includes the Bank for International Settlements. 5. Debt securities of U.S. government corporations and federally sponsored agencies, and 2. Principally demand deposits, time deposits, bankers acceptances, commercial paper, U.S. corporate stocks and bonds. negotiable time certificates of deposit, and borrowings under repurchase agreements. SOURCE. Based on U.S. Department of the Treasury data and on data reported to the 3. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official Treasury by banks (including Federal Reserve Banks) and securities dealers in the United institutions of foreign countries. States, and in periodic benchmark surveys of foreign portfolio investment in the United 4. Excludes notes issued to foreign official nonreserve agencies. Includes current value of States. zero-coupon Treasury bond issues to foreign governments as follows: Mexico, beginning March 1990, 30-year maturity issue; Venezuela, beginning December 1990, 30-year maturity issue; Argentina, beginning April 1993, 30-year maturity issue. 3.16 LIABILITIES TO, AND CLAIMS ON, FOREIGNERS Reported by Banks in the United States1 Payable in Foreign Currencies Millions of dollars, end of period 2002 2003 IItteemm 11999999 22000000 22000011 Sept. Dec. Mar. June 1 Banks' own liabilities 88,537 77,779 79,363 81,719 80,543 88,566 74,441 2 Deposits n.a. n.a. n.a. n.a. n.a. 50,582 43,505 3 Other liabilities n.a. n.a. n.a. n.a. n.a. 37,984 30,936 4 Banks' own claims 67,365 56,912 74,640 82,647 71,724 81,239 90,927 5 Deposits 34,426 23,315 44,094 47,779 34,287 36,710 42,129 6 Other claims 32,939 33,597 30,546 34,868 37,437 44,529 48,798 7 Claims of banks' domestic customers2 20,826 24,411 17,631 20,475 35,923 27,706 33,984 8 Deposits n.a. n.a. n.a. n.a. n.a. 5,065 4,742 9 Other claims n.a. n.a. n.a. n.a. n.a. 22,641 29,242 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 • December 2003 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 2003 IItteemm 22000000 22000011 22000022'' Feb.' Mar.' Apr.' May' June' July' Aug.P BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 1,511,410 1,630,417 1,975,993 2,073,501 2,138,944 2,194,839 2,215,245 2,208,494 2,273,809 2,251,386 2 Banks' own liabilities 1,077,636 1,174,976 1,400,467 1,491,269 1,558,708 1,613,567 1,613,181 1,600,569 1,679,131 1,647,633 By type of liability 3 Deposits2 221,248 188,005 175,231 793,940 813,917 829,641 812,890 853,304 867,154 833,339 4 Other 171,401 194,680 246,623 697,329 744,791 783,926 800.291 747,265 811,977 814,294 5 Of which: repurchase agreements3 0 151,071 190,134 306,051 339,673 378,842 390,974 361,754 410,221 412,308 6 Banks' custody liabilities4 433,774 455,441 575,526 582,232 580,236 581,272 602,064 607,925 594,678 603,753 By type of liability 7 U.S. Treasury bills and certificates5 177,846 186,115 235,316 238,514 249,925 244,246 252,646 251,684 249,145 257,395 8 Other negotiable and readily transferable instruments6 145,840 139,807 189,382 194,437 190,523 193,306 207,493 209,033 204,911 203,057 9 Of which: negotiable time certificates of deposit held in custody for foreigners 34,217 20,440 37,701 41,118 40,235 40,918 44,007 43,221 43,784 43,455 10 Of which: short-term agency securities7 0 59,781 74,417 76,846 75,863 76,645 84,830 83,423 80,667 80,943 11 Other 110,088 129,519 150,828 149,281 139,788 143,720 141,925 147,208 140,622 143,301 12 Nonmonetary international and regional organizations8 12,543 10,830 13,467 12,485 10,311 10,587 9,666 11,961 15,127 11,513 13 Banks' own liabilities 12,140 10,169 12,362 11,839 10,265 10,534 9,650 11,858 15,079 11,434 14 Deposits2 6,287 3,791 5,769 4,244 3,574 4,670 3,901 4,704 4,778 4,690 15 Other 5,853 6,378 6,593 7,595 6,691 5,864 5,749 7,154 10,301 6,744 16 Banks' custody liabilities4 403 661 1,105 646 46 53 16 103 48 79 17 U.S. Treasury bills and certificates5 252 600 1,089 621 4 33 3 13 13 11 18 Other negotiable and readily transferable instruments6 149 61 16 25 30 20 13 70 35 68 19 Other 2 0 0 0 12 0 0 20 0 0 20 Official institutions9 297,603 282,290 334,850 348.433 355,838 351,335 385,117 377,380 373,347 382,274 21 Banks' own liabilities 96,989 80,970 93,884 100,285 95,918 95,449 111,092 105,022 109,868 108,537 22 Deposits2 39,525 21,987 20,733 25,762 22,532 24,026 22,586 23,046 22,190 21,366 23 Other 57,464 58,983 73,151 74,523 73,386 71,423 88,506 81,976 87,678 87,171 24 Banks' custody liabilities4 200,614 201,320 240,966 248,148 259,920 255,886 274,025 272,358 263,479 273,737 25 U.S. Treasury bills and certificates5 153,010 161,719 190,372 196,368 206,043 200,352 210,065 209,957 205,807 214,185 26 Other negotiable and readily transferable instruments6 47,366 38,531 50.530 51,258 52,992 55,380 63,296 57,321 55,456 56,905 27 Other 238 1,070 64 522 885 154 664 5,080 2,216 2,647 28 Banks10 972,932 1,052,626 1,302,447 1,253,696 1,288,406 1,330,054 1,320,142 1,331,776 1,374,806 1,333,574 29 Banks' own liabilities 821,306 914,034 1,093,055 1,048,089 1,094,707 1,131,109 1,119,846 1,125,280 1,170,282 1,127,908 30 Deposits2 82,426 68,218 56,020 654,965 678,722 690,506 677,685 712,723 726,959 688,907 31 Other 53,893 53,525 58,422 393,124 415,985 440,603 442,161 412,557 443,323 439,001 32 Banks' custody liabilities4 151,626 138,592 209,392 205,607 193,699 198,945 200,296 206,496 204,524 205,666 33 U.S. Treasury bills and certificates5 16,023 11,541 25,031 21,278 23,535 23,103 20,509 20,295 22,486 23,469 34 Other negotiable and readily transferable instruments6 36,036 24,059 57,562 60.927 56,917 58,086 64,234 68,907 68,296 66,432 35 Other 99,567 102,992 126,799 123.402 113,247 117,756 115,553 117,294 113,742 115,765 36 Other foreigners " 228,332 284,671 325,229 458,887 484,389 502,863 500,320 487,377 510,529 524,025 37 Banks' own liabilities 147,201 169,803 201,166 331,056 357,818 376,475 372,593 358,409 383,902 399,754 38 Deposits2 93,010 94,009 92,709 108,969 109,089 110,439 108,718 112,831 113,227 118,376 39 Other 54,191 75,794 108,457 222,087 248,729 266,036 263,875 245,578 270,675 281,378 40 Banks' custodial liabilities 81,131 114,868 124,063 127,831 126,571 126,388 127,727 128,968 126,627 124,271 41 U.S. Treasury bills and certificates5 8.561 12,255 18,824 20,247 20,343 20,758 22,069 21,419 20,839 19,730 42 Other negotiable and readily transferable instruments6 62,289 77,156 81,274 82,227 80,584 79,820 79,950 82,735 81,124 79,652 43 Other 10,281 25,457 23,965 25,357 25,644 25,810 25,708 24,814 24,664 24,889 MEMO 44 Own foreign offices12 684,987 792,291 978,613 1,010,971 1,050,165 1,106,721 1,096,575 1,095,521 1,156,282 1,123,504 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 includc 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 2003 IItteemm 22000000 22000011 22000022RR Feb.' Mar.' Apr.' May' June July' Aug.p AREA OR COUNTRY 45 Total, all foreigners 1,511,410 1,630,417 1,975,993 2,073,501 2,138,944 2,194,839 2,215,245 2,208,494r 2,273,809 2,251,386 46 Foreign countries 1,498,867 1,619,587 1,962,526 4,122,032 4,257,266 4,368,504 4,411,158 4,393,066r 4,517,364 4,479,746 47 Europe 446,788 520,438 653,512 728,613 749,307 732,663 771,746 734,382' 785,337 761,210 48 Austria 2,692 2,922 2,818 2,975 3,074 3,079 3,691 4,427 4,330 5,023 49 Belgium13 33,399 6,546 9,536 6,925 8,817 8,290 5,974 4,572' 5,402 6,519 50 Denmark 3,000 3,618 5,037 6,684 6,840 5,172 7,302 5,040 2,595 1,418 51 Finland 1,411 1,446 1,693 1,861 845 1,007 2,291 2,159 3,315 3,641 5? France 37,833 49,056 40,399 38,849 40,489 41,668 46,808 44,936' 45,147 48,421 53 Germany 35,519 22,318 34,650 39,683 43,682 42,616 44.146 45,255' 51,707 50,572 54 Greece 2,011 2,307 2,975 2,925 2,019 1,397 1,634 2,096 1,965 1,740 55 Italy 5,072 6,215 5,568 5,409 5,761 6,775 6,275 6,760' 6,896 5,840 56 Luxembourg13 0 16,667 31,825 39,372 36,334 37,040 38,649 37,699' 37,868 37,377 57 Netherlands 7,047 12,363 10,839 16,398 13,734 15,235 16,086 15,529' 13,242 13,306 58 Norway 2,305 3,727 18,879 10,941 14,168 13,866 15,479 14,987' 20,945 17,884 59 Portugal 2,403 4,033 3,574 2,901 2,802 2,906 2,736 2,168 2,145 1,834 60 Russia 19,018 20,800 23,146 27,643 28,901 30,641 35,048 34,316 33,505 31,282 61 Spain 7,787 8,811 14,038 15,900 13,821 14,012 15,786 11,973 8,878 8,634 6? Sweden 6,497 3,375 4,647 4,004 4,611 6,811 6,309 5,736' 4,088 5,120 63 Switzerland 74,635 66,382 132,700 118,907 114,833 99,747 112,824 119,604' 134,124 118,494 64 Turkey 7,548 7,474 12,131 11,973 10,996 11,214 12,253 12,540 13,937 15,598 65 United Kingdom 167,757 204.107 185,970 280,855 305,481 305,906 310,539 275,581' 316,114 302,302 66 Channel Islands and Isle of Man14 0 36.024 47,539 24,741 24,235 21,528 23,864 21,740 21,640 23,334 67 Yugoslavia15 276 309 301 337 332 237 183 183 157 182 68 Other Europe and other former U.S.S.R.16 30,578 41,938 65,247 69,330 67,532 63,516 63,869 67,081' 57,337 62,689 69 Canada 30,982 27,240 27,323 30,046 32,318 30,839 33,397 37,456' 38,338 35,224 70 Latin America 120,041 118,025 107,051 104,504 105,266 106,979 105,816 107,766' 106,750 105,700 71 Argentina 19,451 10,704 10,874 10,611 10,711 10,002 9,769 9,884 10,473 9,888 7? Brazil 10,852 14,169 10,040 10,977 12,152 11,261 12,693 16,251' 15,599 19,966 73 Chile 5,892 4,939 6,064 5,808 5,749 5,098 5,535 4,725 4,589 4,754 74 Colombia 4,542 4,695 4,158 4,897 4,458 4,726 4,653 4,617 4,539 4,424 75 Ecuador 2,112 2,390 2,299 2,247 2,377 2,256 2,296 2,217 2,379 2,393 76 Guatemala 1,601 1,882 1,379 1,475 1,400 1,530 1,498 1,546 1,399 1,499 77 Mexico 32,166 39,871 36,109 34,823 36,172 38,594 34,972 33,732' 32,751 28,904 78 Panama 4,240 3,610 3,864 4,172 3,768 3,741 3,725 4,283' 4,152 3,954 79 Peru 1,427 1,359 1,363 1,368 1,340 1,382 1,619 1,512 1,533 1,432 80 Uruguay 3,003 3,172 2,807 2,460 2,752 2,880 2,885 3,136' 3,226 3,051 81 Venezuela 24,730 24,974 21,939 19,702 18,295 19,160 20,153 19,778' 20,448 19,902 82 Other Latin America17 10,025 6,260 6,155 5,964 6,092 6,349 6,018 6,085 5,662 5,533 83 Caribbean 573,337 194,744 195,115 211,440 223,892 212,423 222,685 228,704' 210,510 205,564 84 Bahamas 189,298 178,472 163,120 165,881 175,743 161,247 169,524 174,221' 156,239 155,949 85 Bermuda 9,636 10,469 24,666 38,572 41,253 44,230 45,958 43,887' 43,569 39,531 86 British West Indies18 367,197 0 0 0 0 0 0 0 0 0 87 Cayman Islands18 0 439,190 622,244 624,922 654,114 741,310 689,266 703,750' 738,598 743,399 88 Cuba 90 88 91 207 91 91 92 93 93 94 89 Jamaica 794 1,182 829 855 1,000 929 837 790 707 680 90 Netherlands Antilles 5,428 3,264 5,004 4,541 4,432 4,606 5,071 8,309' 8,941 8,115 91 Trinidad and Tobago 894 1,269 1,405 1,384 1,373 1,320 1,203 1,404 961 1,195 92 Other Caribbean17 0 12,113 11,674 12,187 12,218 12,423 13,162 15,799' 16,614 16,002 93 305,554 290,923 319,307 321,223 326,620 319,474 342,108 337,839' 333,934 343,107 China 94 Mainland 16,531 10,486 15,483 13,698 17,616 14,968 15,609 17,511' 19,287 20,879 95 Taiwan 17,352 17,561 18,693 24,147 20,203 21,392 23,500 20,784' 20,839 21,311 96 Hong Kong 26,462 26,003 33,066 35,796 32,971 34,479 33,705 35,193 35,799 39,543 97 4,530 3,676 7,951 8,844 8,683 9,279 9,394 7,942 8,347 10,773 98 Indonesia 8,514 12,383 14,123 12,419 11,938 12,029 11,891 10,478 8,857 9,647 99 Israel 8,053 7,870 7,477 10,496 12,076 10,892 10,282 9,706 10,030 10,122 100 Japan 150,415 154,887 161,487 166,524 175,184 165,973 179,813 175,754' 174,496 173,360 101 Korea (South) 7,955 8,997 8,940 7,065 6,953 6,873 7,878 9,152 9,394 12,811 10? Philippines 2,316 1,772 1,811 1,596 1,789 1,560 1,878 1,575 1,980 1,491 103 Thailand 3,117 4,743 7,605 5,035 5,289 5,741 5,293 5,534 4,729 4,575 104 Middle Eastern oil-exporting countries" 23,763 18,095 16,365 12,204 9,864 10,511 14,447 15,784 13,763 13,779 105 Other 36,546 24,450 26,306 23,399 24,054 25,777 28,418 28,426' 26,413 24,816 106 10,824 11,233 12,251 14,410 12,998 13,603 13,191 13,063 12,849 12,853 107 Egypt 2,621 2,778 2,655 3,624 3,549 3,607 3,536 3,295 2,966 2,966 108 Morocco 139 274 306 346 283 210 281 234 350 305 109 South Africa 1,010 711 1,114 2,405 1,806 2,018 2,172 2,028 2,067 2,178 110 Congo (formerly Zaire) 4 4 2 5 3 4 4 6 7 5 111 Oil exporting countries20 4,052 4,377 4,370 4,552 3,987 4,146 3,701 3,581 3,577 3,362 112 Other 2,998 3,089 3,804 3,478 3,370 3,618 3,497 3,919 3,882 4,037 113 Other countries 11,341 5,681 14,049 13,671 11,900 14,538 14,208 17,774 15,752 16,814 114 Australia 10,070 5,037 11,991 11,254 9,165 11,917 11,603 14,351 13,199 14,631 115 New Zealand21 0 232 1,796 1,940 2,175 2,123 2,039 2,959 2,252 1,889 116 All other 1,271 412 262 477 560 498 566 464 301 294 117 Nonmonetary international and regional organizations 12,543 10,830 13,467 12,485 10,311 10,587 9,666 11,961' 15,127 11,513 118 International22 11,270 9,331 11,282 10,617 8,889 9.503 8,486 10,906' 12,908 10,005 119 Latin American regional23 740 480 507 547 686 296 339 373 1,616 538 120 Other regional24 533 935 1,611 1,216 633 614 693 621 553 836 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." Digitized f1o8.r BFeRginAnSingE JRan uary 2001, data for the Cayman Islands replaced data for the British West Indies. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 International Statistics • December 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 2003 AArreeaa oorr ccoouunnttrryy 22000000 22000011 22000022 Feb. Mar. Apr. May June' July' Aug.P 1 Total, all foreigners 904,642 1,052,066 l,185,445r l,226,096r l,307,168r 1,332,089r 1328,450r 1,359,858 1380,877 1,339,061 2 Foreign countries 899,956 1,047,120 l,181,768r 2,445,470r 2,606,276r 2,654,926r 2,649,540r 2,708,854 2,754,714 2,672,012 3 Europe 378,115 462,418 487,004r 522,032' 542,168' 540,057' 570,453' 588,933 611,942 609,875 4 Austria 2,926 5,280 3,603 4,142 4,538 4,875 4,165 4,339 5,898 6,221 5 Belgium2 5,399 6,491 6,044 6,286 7,653 8,120 4,722 6,741 6,987 7,399 6 Denmark 3,272 1,105 1,109 428 748 648 495 1,737 1,314 1,993 7 Finland 7,382 10,350 8,518 9,191 9,462 11,893 8,130 9,191 7,447 7,136 8 France 40,035 60,866 47,705 48,395 46,458 54,726 52,852 55,435 56,055 58,406 9 Germany 36,834 30,044 22,481 22,526 22,260 19,908 20,453 22,985 27,264 28,401 10 Greece 646 367 477 295 314 234 214 207 190 214 11 Italy 7,629 4,205 3,753 3,011 4,022 4,536 4,133 6,251 6,101 6,199 12 Luxembourg2 0 1,323 3,407 4,360 3,149 4,472 6,436 6,214 6,132 5,801 13 Netherlands 17,043 16,039 23,133 16,031 21,169 18,128 19,769 18,731 20,556 22,903 14 Norway 5,012 6,236 13,885 9,809 11,091 11,672 11,039 15,866 21,058 8,716 Ii Portugal 1,382 1,603 2,226 2,342 1,929 2,260 2,457 2,406 2,331 2,150 16 Russia 517 594 877 729 1,107 699 755 815 863 829 17 Spain 2,603 3,260 5,371 3,258 2,485 2,916 2,374 2,117 1,626 1,884 18 Sweden 9,226 12,756 15,889 15,458 16,310 16,860 16,184 15,615 14,721 18,753 19 Switzerland 82,085 87,350 126,958 100,799' 106,937 80,950' 97,913' 103,025 102,683 91,470 20 Turkey 3,059 2,124 2,112 2,069 2,280 2,441 2,531 2,196 2,379 3,085 21 United Kingdom 144,938 201,185 176,953' 238,646' 238,433' 247,491' 262,411' 262,939 274,601 278,546 22 Channel Islands and Isle of Man3 0 4,478 17,457 27,785 35,018 38,641 44,454 44,692 45,857 47,778 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 6,472' 6,805 8,586' 8,966' 7,431 7,879 11,991 25 Canada 39,837 54,421 60,521 65,990 57,348 58,995 53,892 50,109 53,733 51,466 26 Latin America 76,561 69,762 56,642 55,547 56,091' 54,765 56,185' 55,632 54,815 55,654 27 Argentina 11,519 10,763 6,783 6,625 6,153' 6,082' 5,924' 6,005 5,493 5,341 28 Brazil 20,567 19,434 15,419 15,358 15,922' 15,341 16,393' 16,547 16,620 17,387 29 Chile 5,815 5,317 5,250 5,290 5,299 5,342 5,301 .5,276 5,751 5,844 30 Colombia 4,370 3,602 2,614 2,712 2,650 2,586' 2,484' 2,421 2,309 2,409 31 Ecuador 635 495 457 434 491 482 485 479 441 434 32 Guatemala 1,244 1,495 892 831 970 841 799 773 770 781 33 Mexico 17,415 16,522 15,658 14,994 14,792 14,629 15,416 14,640 14,331 14,269 34 Panama 2,933 3,061 1,915 1,861 1,887 1,964 1,903 1,986 1,696 1,793 35 Peru 2,807 2,185 1,411 1,438 1,400 1,448 1,493 1,541 1,479 1,447 36 Uruguay 673 447 255 308 324 321' 313 335 328 416 37 Venezuela 3,518 3,077 3,254 3,175 3,301 3,196 3,127 3,201 3,052 3,045 38 Other Latin America6 5,065 3,364 2,734 2,521 2,902 2,533 2,547 2,428 2,545 2,488 39 Caribbean 319,403 366,319 475,896' 470,012 524,385 547,903' 521,751 541,028 537,759 498,537 40 Bahamas 114,090 101,034 95,584 86,312 92,186 86,032' 91,506 96,660 89,217 74,036 41 Bermuda 9,260 7,900 9,902 17,034 23,343 21,351 21,552 21,734 23,973 20,649 42 British West Indies7 189,289 0 0 0 0 0 0 0 0 0 43 Cayman Islands7 0 245,750 359,259' 354,238 397,575 429,181 396,974 409,954 411,299 391,895 44 Cuba 0 0 0 0 0 0 0 0 0 0 45 Jamaica 355 418 321 349 381 376 309 327 377 380 46 Netherlands Antilles 5,801 6,729 6,690 7,658 6,751 7,009 7,104 7,134 6,736 7,204 47 Trinidad and Tobago 608 931 889 966 884 848 852 837 796 772 48 Other Caribbean6 0 3,557 3,251 3,455 3,265 3,106 3,454 4,382 5,361 3,596 49 Asia 77,829 85,990 93,551' 101,607 114,350 111177,,224400 111155,,330044 110099,,550099 111100,,776611 111111,,335577 China 50 Mainland 1,606 2,073 1,057 1,884 9,419 7,819 4,731 6,988 10,860 11,635 51 Taiwan 2,247 4,433 3,766' 5,703 8,272 5,349 5,689 5,395 6,452 6,150 52 Hong Kong 6,669 10,035 7,258 5,683 5,020 4,788 5,549 7,056 5,070 6,505 53 India 2,178 1,348 1,235 1,194 974 1,077 1,187 1,375 1,432 1,410 54 Indonesia 1,914 1,752 1,270 1,064 1,028 997 993 935 970 909 55 Israel 2,729 4,396 4,660 3,328 3,110 4,014 3,971 4,333 4,722 4,604 56 Japan 34,974 34,136 47,600 56,269 58,395 63,247 62,399 62,048 54,784 51,966 57 Korea (South) 7,776 10,653 11,118 13,938 13,047 14,841 13,237 7,058 12,988 12,437 58 Philippines 1,784 2,587 2,137 1,536 2,040 1,862 1,651 1,502 1,343 1,296 59 Thailand 1,381 2,499 1,167 707 1,393 1,263 1,658 1,222 1,317 1,601 60 Middle Eastern oil-exporting countries8 9,346 7,882 7,952 6,405 7,110 6,871 7,271 6,019 5,551 6,709 61 Other 5,225 4,196 4,331' 3,896 4,542 5,112 6,968 5,578 5,272 6,135 62 2,094 2,146 1,977 1,992 2,051 1,850 1,777 1,743 1,565 1,688 63 Egypt 201 416 487 544 558 551 446 412 411 369 64 Morocco 204 106 53 45 49 42 41 43 43 37 65 South Africa 309 761 617 577 565 47 lr 546 526 381 534 66 Congo (formerly Zaire) 0 0 0 0 0 0 0 0 0 0 67 Oil-exporting countries' 471 167 222 224 257 215 129 218 182 170 68 Other 909 696 598 602 622 571' 558 544 548 578 69 Other countries 6,117 6,064 6,177 5,555 6,745 6,653 5,408 7,473 6,782 7,429 70 Australia 5,868 5,677 5,566 5,033 5,944 5,892 4,594 6,583 6,023 6,740 71 New Zealand10 0 349 569 507 705 640 668 794 641 587 72 All other 249 38 42 15 96 121 146 96 118 102 73 Nonmonetary international and regional organizations" . . 4,686 4,946 3,677 3,361 4,030 4,626 3,680 5,431 3,520 3,055 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." 11. Excludes the Bank for International Settlements, which is included in "Other Europe." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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 2003 Feb. Mar.' Apr.' May' June' July' Aug/ 1 Total claims reported by banks 1,095,869 1,259,328 l,403,586r 1,575,053 1,656,867 2 Banks' own claims on foreigners 904,642 1,052,066 1,185,445' 1,226,096' 1,307,168 1,332,089 1,328,450 1,359,858 1,380,877 1,339,061 3 Foreign official institutions2 37,907 50,618 52,198 39,636' 48,472 47,722 49,048 43,233 55,365 57,353 4 Foreign banks3 725,380 844,865 970,357' 923,512' 964,810 987,415 977,873 1,005,884 1,020,658 959,471 5 Other foreigners4 141,355 156,583 162,890 262,948' 293,886 296,952 301,529 310,741 304,854 322,237 6 Claims on banks' domestic customers5 191,227 207,262 218,141 267,885 297,009 7 Non-negotiable deposits 100,352 82,566 80,269 107,789 121,784 8 Negotiable CDs 83,845 88,511 9 Other short-term negotiable instruments6 . . 78,147 114,287 13i,780 58,025 71,454 10 Otherclaims 12,728 10,409 6,092 18,226 15,260 MEMO 11 Non-negotiable deposits7 447,839' 466,014 497,269 463,085 476,342 481,820 466,628 12 Negotiable CDs7 2,221 2,621 1,741 2,198 771 1,456 1,368 13 Other short-term negotiable instruments7 9,810' 13,513 13,853 13,210 15,562 11,493 12,282 14 Otherclaims7 n.a. n.a. n.a. 766,226' 825,020 819,226 849,957 867,183 886,108 858,783 15 Own foreign offices8 630,137 744,498 892,340' 898,051 940,502 956,930 951,671 973,628 976,926 941,120 16 Loans collateralized by repurchase agreements9 137,979 161,585 245,798 287,043 311,728 319,597 310,325 345,043 359,671 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 • December 2003 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States Millions of dollars, end of period 2002 2003 TTyyppee ooff lliiaabbiilliittyy,, aanndd aarreeaa oorr ccoouunnttrryy 11999999 22000000 22000011 Mar. June Sept. Dec. Mar. June? 1 Total 53,020 73,904 66,679 74,887 70,431 68,225 67,664 73,828r 70,700 By type 2 Financial liabilities 27,980 47,419 41,034 46,408 42,826 41,311 39,561 45,455r 42,251 3 Short-term negotiable securities' n.a. n.a. n.a. n.a. n.a. n.a. n.a. 21,428r 18,242 4 Other liabilities' n.a. n.a. n.a. n.a. n.a. n.a. n.a. 2244,,002277'' 2244,,000099 Of which: 5 Borrowings' n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5,502' 3,287 6 Repurchase agreements' n.a. n.a. n.a. n.a. n.a. n.a. n.a. 23,276' 22,397 By currency 1 U.S. dollars n.a. 25,246 18,763 20,454 22.050 18,913 18,844 18,698' 17,510 8 Foreign currency2 n.a. 22,173 22,271 25,954 20,776 22,398 20,717 26,757' 24,741 y Canadian dollars n.a. n.a. n.a. n.a. n.a. n.a. n.a. 527 738 10 Euros n.a. n.a. n.a. n.a. n.a. n.a. n.a. 12,337' 10,019 n United Kingdom pounds sterling n.a. n.a. n.a. n.a. n.a. n.a. n.a. 7,209 6,919 12 Japanese yen n.a. n.a. n.a. n.a. n.a. n.a. n.a. 2,880 2,745 13 All other currencies n.a. n.a. n.a. n.a. n.a. n.a. n.a. 3,804 4,320 By area or country Financial liabilities 14 Europe 23,241 34,172 31,806 39,379 35,004 34,809 34,335 36,138' 32,639 15 Belgium-Luxembourg 31 147 154 119 120 232 144 1,164 410 16 France 1,659 1,480 2,841 3,531 4,071 3,517 5,243 2,782 3,376 17 Germany 1,974 2,168 2,344 2,982 2,622 2,865 2,923 3,343 2,901 18 Netherlands 1,996 2,016 1,954 1,946 1,935 1,915 1,825 1,797 1,790 19 Switerzerland 147 104 94 84 61 61 61 19 167 20 United Kingdom 16,521 26,362 22,852 28,694 24,338 24,303 22,531 25,878r 22,903 MEMO: 21 Euro area3 n.a. 7,587 8,798 9,991 10,107 10,369 11,211 10,100 9,485 22 Canada 284 411 955 1,067 1,078 583 591 493' 1,012 23 Latin America and Caribbean 892 4,125 2,858 1,547 1,832 1,088 1,504 3,816 4,495 24 Bahamas 1 6 157 5 5 0 23 334 4 25 Bermuda 5 1,739 960 836 626 588 990 3,046 4,244 26 Brazil 126 148 35 35 38 65 65 127 129 2/ British West Indies4 492 406 1,627 612 1,000 377 365 n.a. 28 Cayman Islands n.a. n.a. n.a. n.a. n.a. n.a. n.a. 25 37 29 Mexico 25 26 36 27 25 26 31 29 27 30 Venezuela 0 2 2 1 5 1 1 0 0 31 Asia 3,437 7,965 5,042 4,020 4,498 4,450 2,932 4,302' 3,412 32 Japan 3,142 6,216 3,269 3,299 2,387 2,447 1,832 2,043 1,909 33 Middle Eastern oil-exporting countries5 4 12 10 15 14 16 14 17 32 34 Africa 28 52 53 122 120 128 131 114' 112 35 Oil-exporting countries6 0 0 5 91 91 91 91 91 91 36 Another7 98 694 320 273 294 253 68 592 581 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 2002 2003 TTyyppee ooff lliiaabbiilliittyy,, aanndd aarreeaa oorr ccoouunnttrryy 11999999 22000000 22000011 Mar. June Sept. Dec. Mar. Junep 37 Commercial liabilities 25,040 26,485 25,645 28,479 27,605 26,914 28,103 28,373r 28,449 38 Trade payables 12,834 14,293 11,781 15,119 14,205 13,819 14,699 15 15 39 Advance payments and other liabilities n.a. 12,192 13,864 13,360 13,400 13,095 13,404 14 13 By currency 40 Payable in U.S. dollars 23,722 23,685 24,162 26,715 26,004 25,621 26,243 24,813' 25,190 41 Payable in foreign currencies2 1,318 2,800 1,483 1,764 1,601 1,293 1,860 3,560 3,259 42 Canadian dollars n.a. n.a. n.a. n.a. n.a. n.a. n.a. 114 146 43 Euros n.a. n.a. n.a. n.a. n.a. n.a. n.a. 1,074 940 44 United Kingdom pounds sterling n.a. n.a. n.a. n.a. n.a. n.a. n.a. 661 668 45 Japanese yen n.a. n.a. n.a. n.a. n.a. n.a. n.a. 242 154 46 All other currencies n.a. n.a. n.a. n.a. n.a. n.a. n.a. 1,469 1,351 By area or country Commercial liabilities 47 Europe 9,262 9,629 9,219 8,168 8,015 8,065 8,257 8,773' 9,853 48 Belgium-Luxembourg 140 293 99 105 94 134 141 186 202 49 France 672 979 734 713 827 718 765 873r 1,027 50 Germany 1,131 1,047 905 584 570 855 807 n.a. n.a. 51 Netherlands 507 300 1,163 236 312 506 590 729' 1,317 52 Switzerland 626 502 790 648 749 592 433 521' 464 53 United Kingdom 3,071 2,847 2,279 2,747 2,551 2,317 2,649 2,892' 3,304 MEMO 54 Euro area3 n.a. 4,518 5,141 3,673 3,718 4,258 4,200 4,359' 5,018 55 Canada 1,775 1,933 1,622 1,802 2,027 1,570 1,588 1,721' 1,749 56 Latin America and Caribbean 2,310 2.381 2,727 3,515 2,817 2,923 3,073 3,046' 3,249 57 Bahamas 22 31 52 23 12 14 51 59 11 58 Bermuda 152 281 591 433 422 468 538 525' 559 59 Brazil 145 114 290 277 320 290 253 246 267 60 British West Indies4 48 76 45 67 46 47 36 n.a. n.a. 61 Cayman Islands n.a. n.a. n.a. n.a. n.a. n.a. n.a. 80 20 62 Mexico 887 841 899 1,518 1,015 1,070 1,170 1,095' 906 63 Venezuela 305 284 166 281 204 327 177 143 456 64 Asia 9,886 10,983 10,517 13,116 12,866 12,462 13,382 13,119' 12,321 65 Japan 2,609 2,757 2,581 4,281 4,143 4,031 4,292 4,137 3,954 66 Middle Eastern oil-exporting countries5 2,493 2,832 2,639 3,289 3,432 3,857 3,979 3,546 3,062 67 Africa 950 948 836 1,000 916 876 827 927 631 68 Oil-exporting countries6 499 483 436 454 349 445 405 423 184 69 All other7 881 611 724 878 964 1,018 976 787' 646 MEMO 70 Financial liabilities to foreign affiliates8 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 11,598' 11,428 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 • December 2003 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States Millions of dollars, end of period 2002 2003 TTyyppee ooff ccllaaiimm,, aanndd aarreeaa oorr ccoouunnttrryy 11999999 22000000 22000011 Mar. June Sept. Dec. Mar.r Junep 1 Total 76,642 90,157 113,082 115,969 116,608 112,784 102,566 112,472 115,521 By type 2 Financial claims 40,231 53,031 81,287 85,359 87,331 84,038 71,389 83,023 83,464 3 Non-negotiable deposits n.a. 23,374 29,801 41,813 42,136 38,074 27,064 45,828 49,490 4 Negotiable securities n.a. 29,657 51,486 43,546 45,195 45,964 4444,,332255 33,,776677 33,,119977 Of which: 5 Negotiable CDs' n.a. n.a. n.a. n.a. n.a. n.a. n.a. 241 133 6 Other claims 21,665 29,657 51,486 43,568 45,188 4455,,995599 4444,,006644 3333,,442288 3300,,777777 Of which: 7 Loans' n.a. n.a. n.a. n.a. n.a. n.a. n.a. 12,674 15,638 8 Repurchase agreements' n.a. n.a. n.a. n.a. n.a. n.a. n.a. 6,599 3,010 By currency y U.S. dollars n.a. 46.157 74,471 79,722 82,353 79,307 65,070 75,944 71,755 1U Foreign currency2 n.a. 6,874 6,816 5,637 4,978 4,731 6,319 7,079 11,709 11 Canadian dollars n.a. n.a. n.a. n.a. n.a. n.a. n.a. 605 597 12 Euros n.a. n.a. n.a. n.a. n.a. n.a. n.a. 3,054 2,383 13 United Kingdom pounds sterling n.a. n.a. n.a. n.a. n.a. n.a. n.a. 22,,008833 2,560 14 Japanese yen n.a. n.a. n.a. n.a. n.a. n.a. n.a. 888800 875 15 All other currencies n.a. n.a. n.a. n.a. n.a. n.a. n.a. 457 5,294 By area or country Financial claims 16 Europe 13,023 23,136 26,118 36,032 37,003 32,139 29,018 34,749 33,386 1 / Belgium-Luxembourg 529 296 625 751 797 656 722 1,494 352 18 France 967 1,206 1,450 3,489 3.921 3,854 3,247 3,402 4,445 iy Germany 504 848 1,068 4,114 3,972 4,292 4,245 6,240 4,425 20 Netherlands 1,229 1,396 2,138 3,253 3,995 4,024 3,648 4,355 3,655 21 Switerzerland 643 699 589 308 1,010 1,135 383 1,497 1,178 22 United Kingdom 7,561 15,900 16,510 17,982 16,133 11,454 10,663 11,204 13,437 MEMO: 23 Euro area3 n.a. 5,580 8,626 16,903 18,689 18,542 17,281 20,494 17,301 24 Canada 2,553 4,576 6,193 5,471 5,537 5,485 5,013 5,643 5,879 25 Latin America and Caribbean 18,206 19,317 41,201 34,979 37,489 38,800 29,612 32,405 37,340 26 Bahamas 1,593 1,353 976 1,197 1,332 715 1,038 757 598 27 Bermuda 11 19 918 611 704 1,157 724 387 699 28 Brazil 1,476 1,827 2,127 1,892 2,036 2,226 2,286 2,324 2,104 2Y British West Indies4 12,099 12,596 32,965 27,328 29,569 30,837 21,528 n.a. 30 Cayman Islands n.a. n.a. n.a. n.a. n.a. n.a. n.a. 25,848 30,734 31 Mexico 1,798 2,448 3,075 2,777 2,823 2,871 2,921 1,780 1,906 32 Venezuela 48 87 83 79 60 71 104 161 169 33 Asia 5,457 4,697 6,430 6,414 5,754 6,041 5,358 7,596 5,361 34 Japan 3,262 1,631 1,604 2,051 1,146 1,481 1,277 11,,222266 1,246 35 Middle Eastern oil-exporting countries5 23 80 135 79 78 88 79 6688 166 36 Africa 286 411 414 390 431 379 395 358 486 37 Oil-exporting countries6 15 57 49 51 64 29 25 26 35 38 All other7 706 894 931 2,073 1,117 1,194 1,993 2,272 1,012 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 2002 2003 TTyyppee ooff ccllaaiimm,, aanndd aarreeaa oorr ccoouunnttrryy 11999999 22000000 22000011 Mar. June Sept. Dec. Mar.r Junep 39 Commercial claims 36,411 37,126 31,795 30,610 29,277 28,746 31,177 29,449 32,057 40 Trade receivables 32,602 33,104 27,513 25,845 24,716 24,171 26,385 24,740 25,824 41 Advance payments and other claims 3,809 4,022 4,282 4,765 4,561 4,575 4,792 4,709 6,233 By currency 42 Payable in U.S. dollars 34,204 33,401 29,393 26,864 25,361 25,441 26,481 19,806 21,885 43 Payable in foreign currencies2 2,207 3,725 2,402 3,746 3,916 3,305 4,696 9,643 10,172 44 Canadian dollars n.a. n.a. n.a. n.a. n.a. n.a. n.a. 1,351 1,279 45 Euros n.a. n.a. n.a. n.a. n.a. n.a. n.a. 1,803 1,753 46 United Kingdom pounds sterling n.a. n.a. n.a. n.a. n.a. n.a. n.a. 1,451 1,549 47 Japanese yen n.a. n.a. n.a. n.a. n.a. n.a. n.a. 545 537 48 All other currencies n.a. n.a. n.a. n.a. n.a. n.a. n.a. 4,493 5,054 By area or country Commercial claims 49 Europe 16,389 15,938 14,022 12,935 12,314 12,680 14,187 13,314 15,229 50 Belgium-Luxembourg 316 452 268 272 207 254 269 228 240 51 France 2,236 3,095 2,921 2,883 2,828 2,972 3,164 2,804 3,065 52 Germany 1,960 1,982 1,658 1,198 1,163 1,158 1,202 1,300 1,185 53 Netherlands 1,429 1,729 529 642 832 1,089 1,490 1,135 1,376 54 Switzerland 610 763 611 436 472 404 503 448 530 55 United Kingdom 5,827 4,502 3,833 3,579 3,387 3,236 3,727 3,718 4,480 MEMO 56 Euro area3 n.a. 8,819 7,961 7,237 7,106 7,707 8,580 8,105 8,988 57 Canada 2,757 3,502 2,818 2,760 2,752 2,623 2,790 2,564 2,913 58 Latin America and Caribbean 5,959 5,851 4,859 4,912 4,530 4,324 4,346 4,794 4,619 59 Bahamas 20 37 42 42 28 35 31 61 28 60 Bermuda 390 376 369 422 214 270 287 551 461 61 Brazil 905 957 954 837 829 862 750 734 781 62 British West Indies4 181 137 95 73 26 12 19 n.a. n.a. 63 Cayman Islands n.a. n.a. n.a. n.a. n.a. n.a. n.a. 59 16 64 Mexico 1,678 1,507 1,391 1,225 1,283 1,184 1,259 1,095 1,093 65 Venezuela 439 328 288 312 316 340 288 232 238 66 Asia 9,165 9,630 7,849 7,513 7,309 6,778 7,324 5,996 6,349 67 Japan 2,074 2,796 2,006 1,975 2,064 2,083 2,341 1,436 1,717 68 Middle Eastern oil-exporting countries5 1,573 1,024 850 657 889 819 818 617 742 69 Africa 631 672 645 630 605 637 584 636 432 70 Oil-exporting countries6 171 180 88 109 94 107 95 139 97 71 Allother7 1,537 1,533 1,602 1,860 1,767 1,704 1,946 2,145 2,515 MEMO 72 Financial claims on foreign affiliates8 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 11,915 14,033 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 • December 2003 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 2003 2003 TTrraannssaaccttiioonn,, aanndd aarreeaa oorr ccoouunnttrryy 22000011 22000022'' J A a u n g .- . Feb. Mar.' Apr.' May' June' July' Aug.p U.S. corporate securities STOCKS 1 Foreign purchases 3,051,332 3,209,760 1,993,451 201,408 236,668 233,275 273,263 311,954 267,033 253,119 2 Foreign sales 2,934,942 3,159,571 1,970,497 203,486 233,828 228,918 266,670 301,646 274,888 241,534 3 Net purchases, or sales (-) 116,390 50,189 22,954 -2,078 2,840 4,357 6,593 10,308 -7,855 11,585 4 Foreign countries 116,187 50,253 23,004 -2,080 2,860 4360 6,597 10,325 -7,865 11,580 5 Europe 88,099 32,909 14,885 1,900 1,360 250 1,526 8,129 -5,502 9,408 6 France 5,914 2,127 4,006 270 1,816 -1,647 642 -882 1,555 2,046 7 Germany 8,415 -129 1,540 -65 -780 -118 -260 4,452 -830 -796 8 Netherlands 10,919 4,307 774 -75 651 -1,090 262 921 -31 -230 9 Switzerland 3,456 2,787 -2,733 -990 -22 98 -901 -562 238 130 10 United Kingdom 38,493 15,172 -2,483 1,938 -258 777 -1,181 1,928 -7,864 4,938 11 Channel Islands and Isle of Man1 -698 -255 -27 -17 -42 46 -30 -65 -35 118 12 Canada 10,984 8,207 4,505 -1,594 2,376 2,540 -435 2,385 -1,440 2,192 13 Latin America and Caribbean -5,154 -15,419 -807 -2,253 -1,538 1,230 4,575 -1,198 870 611 14 Middle East2 1,789 -1,309 -450 -21 -51 -7 29 -68 -150 -110 15 Other Asia 20,726 22,676 6,101 2,774 478 -73 612 770 801 -548 16 Japan 6,788 12,336 -1,638 1,008 -60 -1,093 -677 -597 228 -1,008 17 -366 -72 114 -9 -29 68 -37 101 -35 17 18 Other countries 109 3,261 -1,344 -2,877 264 352 327 206 591 10 19 Nonmonetary international and regional organizations 203 -64 -50 2 -20 -3 -A -17 10 5 BONDS' 20 Foreign purchases 1,942,690 2,548,697 2,404,550 206,552' 306,789 305,997 381,880 351,934 323,913 299,675 21 Foreign sales 1,556,745 2,171,260 2,092,775 183,904' 262,898 264,263 322,432 322,061 285,661 271,168 22 Net purchases, or sales (-) 385,945 377,437 311,775 22,648r 43,891 41,734 59,448 29,873 38,252 28,507 23 Foreign countries 385,379 377,174 312,229 22,813r 43,960 41,324 59,684 30,368 37,988 28,526 24 Europe 195,412 167,168 142,644 16,235' 20,539 25,438 21,452 4,897 16,969 9,396 25 France 5,028 3,762 1,314 63 153 116 112 -77 306 -437 26 Germany 12,362 5,125 1,095 930' -233 -68 143 -726 263 244 27 Netherlands 1,538 -421 1,585 6W -3 -614 317 74 1,133 -45 28 Switzerland 5,721 8,621 6,672 800' 1,034 1,263 366 346 802 907 29 United Kingdom 152,772 109,913 88,208 6,820' 14,772 16,951 13,911 4,991 1100,,998888 3,815 30 Channel Islands and Isle of Man1 2,000 11,173 19,646 1,533 4,138 3,091 3,320 9 888844 1,251 31 Canada 4,595 -1,040 2,029 193 1,169 -894 1,428 -236 344 878 32 Latin America and Caribbean 77,019 82,985 80,254 -6,445' 10,227 1,725 25,924 12,430 16,864 12,910 33 Middle East2 2,337 2,263 1,336 36' -23 29 -277 170 510 289 34 Other Asia 106,400 121,440 82,958 12,669' 10,841 15,497 10,929 12,311 3,441 3,832 35 Japan 33,687 48,578 22,806 4,499' 1,364 8,540 3,885 4,712 -1,268 -2,844 36 Africa 760 860 1,855 80 779 147 110 241 143 302 37 Other countries -1,144 3,498 1,153 45 428 -618 118 555 -283 919 38 Nonmonetary international and regional organizations 566 263 -454 -165 -69 410 -236 -495 264 -19 Foreign securities 39 Stocks, net purchases, or sales (-) -50,113 -1,512 -48,811 -4,474 -5,363 2,073 -10,800 -5,231 -4,721 -13,402 40 Foreign purchases 1,397,664 1,267,633 828,256 83,683 91,096 100,054 99,777 116,975 129,487 112,562 41 Foreign sales 1,447,777 1,269,145 877,067 88,157 96,459 97,981 110,577 122,206 134,208 125,964 42 Bonds, net purchases, or sales (-) 30,502 28,446 37,023 4,297' 7,332 -2,416 14,049 11,738 3,006 1,021 43 Foreign purchases 1,160,102 1,372,042 1,359,556 118,683' 162,101 135,970 230,256 209,730 207,675 159,275 44 Foreign sales 1,129,600 1,343,596 1,322,533 114,386' 154,769 138,386 216,207 197,992 204,669 158,254 45 Net purchases, or sales (-), of stocks and bonds -19,611 26,934 -11,788 -177' 1,969 -343 3,249 6,507 -1,715 -12,381 46 Foreign countries -19,024 26,964 -11,744 -273r 1,988 -256 3,270 6,485 -1,679 -12,361 47 Europe -12,108 14,592 -1,259 -I^SO1 6,259 4,409 1,593 3,575 -4,379 -5,977 48 Canada 2,943 4,854 10,384 603 -302 -600 2,106 651 3,319 717 49 Latin America and Caribbean 4,315 4,484 -13,110 724' -3,353 -7,450 1,289 4,438 -4,767 3,985 50 Asia -11,869 2,631 -7,215 194 -971 3,456 -649 -1,456 3,298 -10,826 51 Japan -20,116 -10,060 -9,093 -1,447 1,557 2,218 1,509 -4,009 -2,776 -4,912 52 Africa -558 -377 152 -34 27 -11 5 139 153 -72 53 Other countries -1,747 780 -696 -110 328 -60 -1,074 -862 697 -188 54 Nonmonetary international and regional organizations -587 -30 -44 96 -19 -87 -21 22 -36 -20 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 2003 AArreeaa oorr ccoouunnttrryy 22000011 22000022'' Jan.- Feb. Mar.' Apr.' May' June' July' Aug.p Aug. 1 Total estimated 18,514 119,918 192,320 -957r 26,949 9,792 41,109 44,027 44,686 25,246 2 Foreign countries 19,200 117,907 192,608 -713r 27,000 9,844 40,793 44,124 45,626 24,849 3 Europe -20,604 43,678 69,429 -4,914r 253 7,739 6,132 20,629 21,886 15,954 4 Belgium2 -598 2,046 1,299 -1,379 -2,722 218 77 -82 267 1,549 Germany -1,668 -3,931 9,199 -211' -268 1,148 3,449 874 3,124 2,258 6 Luxembourg2 462 -1,609 1,524 358 83 33 -2 127 482 368 7 Netherlands -6,728 -17,020 5,424 1,360 959 4,425 2,216 659 364 ^•74 8 Sweden -1,190 2,923 2,214 190 522 -240 482 608 -163 393 9 Switzerland 1,412 -448 4,581 -1,050 1,067 -784 749 1,700 1,382 1,603 10 United Kingdom -7,279 61,606 37,709 -2,631' 2,845 571 -523 8,439 19,554 8,358 11 Channel Islands and Isle of Man3 -179 724 1,888 6' 37 140 550 973 124 69 17 Other Europe and former U.S.S.R -4,836 -613 5,591 -1,557 -2,270 2,228 -866 7,331 -3,248 1,830 13 Canada -1,634 -5,197 8,056 -1,871 1,782 820 -1,317 4,102 4,011 1,227 14 Latin America and Caribbean 4,272 20,020 25,423 4,680' 12,476 -6,109 10,705 -1,690 7,971 157 1 S Venezuela 290 -59 242 97 23 13 37 9 34 9 16 Other Latin America and Caribbean 14,726 20,859 23,664 3,619' 9,847 ^t,809 7,234 1,219 6,011 -1,257 17 Netherlands Antilles -10,744 -780 1,517 964 2,606 -1,313 3,434 -2,918 1,926 1,405 18 Asia 36,332 55,656 85,028 2,131' 11,904 7,178 25,236 18,693 9,590 7,931 19 Japan 16,114 30,498 60,820 5,425' -1,322 5,532 25,097 11,698 1,444 9,667 20 Africa -880 841 212 -43 -16 127 -59 86 80 -47 21 Other 1,714 2,909 4,462 -696 601 89 96 2,304 2,088 -373 22 Nonmonetary international and regional organizations -686 2,011 -288 -244 -51 -52 316 -97 -940 397 23 International -290 1,642 -174 -130 -109 85 381 177 -1,128 380 24 Latin American Caribbean regional 41 -3 -107 -38 -28 -37 -6 -3 4 16 MEMO 25 Foreign countries 19,200 117,907 192,608 -713' 27,000 9,844 40,793 44,124 45,626 24,849 26 Official institutions 3,474 10,109 47,680 4,832' 2,011 -366 15,249 14,470 12,338 -1,047 27 Other foreign 15,726 107,798 144,928 -5,545' 24,989 10,210 25,544 29,654 33,288 25,896 Oil-exporting countries 28 Middle East4 865 -3,880 -6,960 -4,253' -113 -2,772 -1,018 55 395 271 29 Africa5 -2 29 52 0 0 0 0 1 0 51 1. Official and private transactions in marketable U.S. Treasury securities having an 3. Before January 2001, these data were included in the data reported for the United original maturity of more than one year. Data are based on monthly transactions reports. Kingdom. Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab countries. Emirates (Trucial States). 2. Before January 2001, combined data reported for Belgium and Luxembourg. 5. Comprises Algeria, Gabon, Libya, and Nigeria. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics • December 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 May June July Aug. Sept. Oct. Exchange rates COUNTRY/CURRENCY UNIT 1 Australia/dollar2 58.15 51.69 54.37 64.68 66.52 66.07 65.18 66.35 69.48 2 Brazil/real 1.8301 2.3527 2.9213 2.9517 2.8887 2.8833 3.0053 2.9204 2.8628 3 Canada/dollar 1.4855 1.5487 1.5704 1.3840 1.3525 1.3821 1.3963 1.3634 1.3221 4 China, P.R./yuan 8.2784 8.2770 8.2770 8.2769 8.2771 8.2773 8.2770 8.2772 8.2768 5 Denmark/krone 8.0953 8.3323 7.8862 6.4268 6.3620 6.5425 6.6653 6.5953 6.3449 6 European Monetary Union/euro3 0.9232 0.8952 0.9454 1.1556 1.1674 1.1365 1.1155 1.1267 1.1714 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 7.7991 7.7988 7.7990 7.7990 7.7850 7.7427 9 India/rupee 45.00 47.22 48.63 47.11 46.70 46.22 45.96 45.85 45.40 10 Japan/yen 107.80 121.57 125.22 117.37 118.33 118.70 118.66 114.80 109.50 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 10.253 10.503 10.458 10.783 10.923 11.180 13 New Zealand/dollar2 45.68 42.02 46.45 57.56 58.15 58.64 58.29 58.43 60.20 14 Norway/krone 8.8131 8.9964 7.9839 6.8145 7.0093 7.2924 7.4096 7.2782 7.0331 15 Singapore/dollar 1.7250 1.7930 1.7908 1.7357 1.7351 1.7551 1.7533 1.7466 1.7345 16 South Africa/rand 6.9468 8.6093 10.5176 7.6604 7.8588 7.5458 7.3945 7.3060 6.9644 17 South Korea/won 1,130.90 1,292.01 1,250.31 1,201.23 1,194.14 1,181.16 1,178.60 1,165.40 1,169.34 18 Sri Lanka/rupee 76.964 89.602 95.773 97.231 97.236 97.153 96.975 95.284 94.560 19 Sweden/krona 9.1735 10.3425 9.7233 7.9213 7.8116 8.0929 8.2821 8.0426 7.6957 20 Switzerland/franc 1.6904 1.6891 1.5567 1.3111 1.3196 1.3611 1.3811 1.3743 1.3222 21 Taiwan/dollar 31.260 33.824 34.536 34.697 34.633 34.396 34.318 33.995 33.875 21 Thailand/baht 40.210 44.532 43.019 42.217 41.675 41.808 41.656 40.483 39.761 23 United Kingdom/pound2 151.56 143.96 150.25 162.24 166.09 162.21 159.39 161.55 167.92 24 Venezuela/bolivar 680.52 724.10 1,161.19 1,600.00 1,600.00 1,600.00 1,600.00 1,600.00 1,600.00 Indexes4 NOMINAL 25 Broad (January 1997-100)5 119.68 126.08 127.19 118.54 117.93 119.11 120.43 119.03 116.66 26 Major currencies (March 1973= 100)6 98.31 104.28 102.85 89.67 88.68 90.42 91.48 89.68 86.29 27 Other important trading partners (January 1997-100) 130.34 136.36 141.42 142.75 143.07 142.84 144.32 144.06 144.35 REAL 28 Broad (March 1973-100)5 104.47r 110.50' 110.88' 103.11' 102.83' 104.05' 105.35' 104.11' 101.86 29 Major currencies (March 1973=100)6 103.29 110.73 109.36 95.60' 94.63' 9673' 98.01' 96.21' 92.54 30 Other important trading partners (March 1973—100)7 114.81r 119.47' 122.29' 122.43' 123.21' 123.16' 124.58' 124.10' 123.96 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 September 30, 2002 February 2003 A58 December 31,2002 May 2003 A58 March 31,2003 August 2003 A58 June 30, 2003 November 2003 A58 Terms of lending at commercial banks November 2002 February 2003 A60 February 2003 May 2003 A60 May 2003 August 2003 A60 August 2003 November 2003 A60 Assets and liabilities of U.S. branches and agencies of foreign banks September 30, 2002 February 2003 A66 December 31, 2002 May 2003 A66 March 31, 2003 August 2003 A66 June 30, 2003 November 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 1989-2001 September 2002 A58 1990-2002 September 2003 A58 Disposition of applications for private mortgage insurance 1998-2001 September 2002 A67 1999-2002 September 2003 A67 Small loans to businesses and farms 1996-2001 September 2002 A70 1996-2002 September 2003 A70 Community development lending reported under the Community Reinvestment Act 2001 September 2002 A73 2002 September 2003 A73 STATISTICAL RELEASES—A List of Statistical Releases Published by the Federal Reserve is Printed Semiannually in the Bulletin Issue Page Schedule of anticipated release dates for periodic releases December 2003 A66 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

101 Federal Reserve Bulletin • December 2003 Index to Statistical Tables References are to pages A3-A56, although the prefix 'A" is omitted in this index. ACCEPTANCES, bankers (See Bankers acceptances) Federal Reserve Banks Assets and liabilities (See also Foreigners) Condition statement, 10 Commercial banks, 15-21 Discount rates (See Interest rates) Domestic finance companies, 30, 31 U.S. government securities held, 5, 10, 11, 25 Federal Reserve Banks, 10 Federal Reserve credit, 5, 6, 10, 12 Foreign-related institutions, 20 Federal Reserve notes, 10 Automobiles Federally sponsored credit agencies, 28 Consumer credit, 34 Finance companies Production, 42, 43 Assets and liabilities, 30 Business credit, 31 BANKERS acceptances, 5, 10 Loans, 34 Bankers balances, 15-21 (See also Foreigners) Paper, 22, 23 Bonds (See also U.S. government securities) Float, 5 New issues, 29 Flow of funds, 35-39 Rates, 23 Foreign currency operations, 10 Business loans (See Commercial and industrial loans) Foreign deposits in U.S. banks, 5 Foreign exchange rates, 56 Foreign-related institutions, 20 CAPACITY utilization, 40, 41 Foreigners Capital accounts Claims on, 46, 49-51, 53 Commercial banks, 15-21 Liabilities to, 45-^18, 52, 54, 55 Federal Reserve Banks, 10 Certificates of deposit, 23 Commercial and industrial loans GOLD Commercial banks, 15-21 Certificate account, 10 Weekly reporting banks, 17, 18 Stock, 5, 45 Commercial banks Government National Mortgage Association, 28, 32, 33 Assets and liabilities, 15-21 Commercial and industrial loans, 15-21 Consumer loans held, by type and terms, 34 INDUSTRIAL production, 42, 43 Real estate mortgages held, by holder and property, 33 Insurance companies, 25, 33 Time and savings deposits, 4 Interest rates Commercial paper, 22, 23, 30 Bonds, 23 Condition statements (See Assets and liabilities) Consumer credit, 34 Consumer credit, 34 Federal Reserve Banks, 7 Corporations Money and capital markets, 23 Security issues, 29, 55 Mortgages, 32 Credit unions, 34 Prime rate, 22 Currency in circulation, 5, 13 International capital transactions of United States, 44-55 Customer credit, stock market, 24 International organizations, 46, 47, 49, 52, 53 Investment companies, issues and assets, 30 Investments (See also specific types) DEBT (See specific types of debt or securities) Commercial banks, 4, 15-21 Demand deposits, 15-21 Federal Reserve Banks, 10, 11 Depository institutions Financial institutions, 33 Reserve requirements, 8 Reserves and related items, 4-6, 12 Deposits (See also specific types) LIFE insurance companies (See Insurance companies) Commercial banks, 4, 15-21 Loans (See also specific types) Federal Reserve Banks, 5, 10 Commercial banks, 15-21 Discount rates at Reserve Banks and at foreign central banks and Federal Reserve Banks, 5-7, 10, 11 foreign countries (See Interest rates) Financial institutions, 33 Discounts and advances by Reserve Banks (See Loans) Insured or guaranteed by United States, 32, 33 EURO, 56 MANUFACTURING Capacity utilization, 40, 41 FARM mortgage loans, 33 Production, 42, 43 Federal agency obligations, 5, 9-11, 26, 27 Margin requirements, 24 Federal credit agencies, 28 Member banks, reserve requirements, 8 Federal finance Mining production, 43 Debt subject to statutory limitation, and types and ownership of Monetary and credit aggregates, 4, 12 gross debt, 25 Money and capital market rates, 23 Federal Financing Bank, 28 Money stock measures and components, 4, 13 Federal funds, 23 Mortgages (See Real estate loans) Federal Home Loan Banks, 28 Mutual funds, 13, 30 Federal Home Loan Mortgage Corporation, 28, 32, 33 Federal Housing Administration, 28, 32, 33 Mutual savings banks (See Thrift institutions) Federal Land Banks, 33 Federal National Mortgage Association, 28, 32, 33 OPEN market transactions, 9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

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

A61 MARK W. OLSON DONALD L. KOHN BEN S. BERNANKE DIVISION OF CONSUMER DIVISION OF RESERVE BANK OPERATIONS AND COMMUNITY AFFAIRS AND PAYMENT SYSTEMS DOLORES S. SMITH, Director LOUISE L. ROSEMAN, Director GLENN E. LONEY, Deputy Director PAUL W. BETTGE, Associate Director SANDRA F. BRAUNSTEIN, 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, Acting 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

105 Federal Reserve Bulletin • December 2003 Federal Open Market Committee and Advisory Councils FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman TIMOTHY F. GEITHNER, 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 PI AN ALTO JAMIE B. STEWART, JR. CATHY E. MINEHAN WILLIAM POOLE STAFF VINCENT R. REINHART, Secretary and Economist ROBERT A. EISENBEIS, Associate Economist NORMAND R.V. BERNARD, Deputy Secretary CHARLES L. EVANS, Associate Economist MICHELLE A. SMITH, Assistant Secretary MARVIN S. GOODFRIEND, Associate Economist J. VIRGIL MATTINGLY, JR., General Counsel DAVID H. HOWARD, Associate Economist THOMAS C. BAXTER, JR., Deputy General Counsel JOHN P. JUDD, Associate Economist KAREN H. JOHNSON, Economist BRIAN F. MADIGAN, Associate Economist DAVID J. STOCKTON, Economist CHARLES S. STRUCKMEYER, Associate Economist THOMAS A. CONNORS, Associate Economist DAVID W. WILCOX, Associate Economist CHRISTINE M. CUMMING, 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 BYRON G. THOMPSON, 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

A63 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, Washington, District of Columbia SUSAN BREDEHOFT, Cherry Hill, New Jersey ELSIE MEEKS, Kyle, South Dakota CONSTANCE K. CHAMBERLIN, Richmond, Virginia PATRICIA MCCOY, Hartford, Connecticut ROBIN COFFEY, Chicago, Illinois MARK PINSKY, Philadelphia, Pennsylvania DAN DIXON, Washington, District of Columbia ELIZABETH RENUART, Boston, Massachusetts THOMAS FITZGIBBON, Chicago, Illinois DEBRA S. REYES, Tampa, Florida JAMES GARNER, Baltimore, Maryland BENSON ROBERTS, Washington, District of Columbia CHARLES GATSON, Kansas City, Missouri BENJAMIN ROBINSON III, Charlotte, North Carolina LARRY HAWKINS, Houston, Texas DIANE THOMPSON, East St. Louis, Illinois W. JAMES KING, Cincinnati, Ohio HUBERT VAN TOL, Sparta, Wisconsin EARL JAROLIMEK, Fargo, North Dakota CLINT WALKER, Wilmington, Delaware 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 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

107 Federal Reserve Bulletin • December 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, 2002. through October 1998. 723 pp. $20.00 each. ANNUAL REPORT: BUDGET REVIEW, 2003. THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A MULTI- FEDERAL RESERVE BULLETIN. Quarterly. $10.00 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, $15.00 per year or $3.00 each. 440 pp. $9.00 each. STATISTICAL SUPPLEMENT TO THE FEDERAL RESERVE BULLETIN. FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. Monthly. $25.00 per year or $2.50 each in the United States, December 1986. 264 pp. $10.00 each. its possessions, Canada, and Mexico. Elsewhere, $35.00 per RISK MEASUREMENT AND SYSTEMIC RISK: PROCEEDINGS OF A year or $3.00 each. JOINT CENTRAL BANK RESEARCH CONFERENCE. 1996. ANNUAL STATISTICAL DIGEST: period covered, release date, num- 578 pp. $25.00 each. ber of pages, and price. 1981 October 1982 239 pp. $ 6.50 1982 December 1983 266 pp. $ 7.50 EDUCATION PAMPHLETS 1983 October 1984 264 pp. $11.50 Short pamphlets suitable for classroom use. Multiple copies are 1984 October 1985 254 pp. $12.50 available without charge. 1985 October 1986 231 pp. $15.00 1986 November 1987 288 pp. $15.00 1987 October 1988 272 pp. $15.00 Consumer Handbook on Adjustable Rate Mortgages (also avail- 1988 November 1989 256 pp. $25.00 able in Spanish) 1980-89 March 1991 712 pp. $25.00 Consumer Handbook to Credit Protection Laws 1990 November 1991 185 pp. $25.00 A Guide to Business Credit for Women, Minorities, and Small 1991 November 1992 215 pp. $25.00 Businesses 1992 December 1993 215 pp. $25.00 Series on the Structure of the Federal Reserve System 1993 December 1994 281 pp. $25.00 The Board of Governors of the Federal Reserve System 1994 December 1995 190 pp. $25.00 The Federal Open Market Committee 1990-95 November 1996 404 pp. $25.00 Federal Reserve Bank Board of Directors 1996-2000 March 2002 352 pp. $25.00 Federal Reserve Banks A Consumer's Guide to Mortgage Lock-Ins 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? (also available in Spanish) The Payment System Handbook. $75.00 per year. Putting Your Home on the Loan Line Is Risky Business Federal Reserve Regulatory Service. Four vols. (Contains all four Handbooks plus substantial additional material.) $200.00 per year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

109 Federal Reserve Bulletin • December 2003 Maps of the Federal Reserve System ii '*f*'.f -A i .i iis ^ Bos ION w ^^ . .. .. a f ^ f TMjjg^^ Jh;-, 4.MR ETAN^' .J."P HILADELPHIA RICHMOND p a is \L \SK \ HAWAII LEGEND Both pages Facing page • Federal Reserve Bank city • Federal Reserve Branch city • Board of Governors of the Federal — Branch boundary Reserve System, Washington, D.C. NOTE The Federal Reserve officially identifies Districts by num- of Puerto Rico and the U.S. Virgin Islands; the San Franber and Reserve Bank city (shown on both pages) and by cisco Bank serves American Samoa, Guam, and the Comletter (shown on the facing page). monwealth of the Northern Mariana Islands. The Board of In the 12th District, the Seattle Branch serves Alaska, Governors revised the branch boundaries of the System and the San Francisco Bank serves Hawaii. most recently in February 1996. The System serves commonwealths and territories as follows: the New York Bank serves the Commonwealth Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A67 1-A 2-B 3-C 4-D 5-E ,. N ME Pittsburgh Baltimafig MD t ; x' VT HF-*" WV wv - NH \ Cincinnati Bullulo • Chariot ie CT " RI st BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G 8-H TN—*• •Nashville I- Birmingham-^- ^ m m sville Licksom i lie New Orleans Miami ATLANTA CHICAGO ST. LOUIS 9-1 MINNEAPOLIS 10-J - 12-L KANSAS CITY 11-K • -j&ir NM \ mm KL DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

111 Federal Reserve Bulletin • December 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 Timothy F. Geithner 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 Jeffrey S. Kane1 ATLANTA 30303 Paula Lovell Jack Guynn David M. Ratcliffe Patrick K. Barron James M. McKee1 Birmingham 35242 W. Miller Welborn Lee C. Jones Jacksonville 32231 William E. Flaherty Christopher L. Oakley Miami 33152 Brian E. Keeley James T. Curry III Nashville 37203 Whitney Johns Martin Melvyn K. Purcell1 New Orleans 70161 Dave Dennis Robert J. Musso1 CHICAGO* 60690 Robert J. Darnall Michael H. Moskow W. James Farrell Gordon R. G. Werkema Detroit 48231 Timothy D. Leuliette Glenn Hansen' 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 Robert A. Funk Richard K. Rasdall Denver 80217 Robert M. Murphy Pamela L. Weinstein Oklahoma City 73125 Patricia B. Fennell Dwayne E. Boggs Omaha 68102 A.F. Raimondo Steven D. Evans DALLAS 75201 Ray L. Hunt Robert D. McTeer, Jr. Patricia M. Patterson Helen E. Holcomb El Paso 79999 Gail Darling Robert W. Gilmer3 Houston 77252 Lupe Fraga Robert Smith III1 San Antonio 78295 Ron R. Harris James L. Stull1 SAN FRANCISCO 94120 George M. Scalise Robert T. Parry Sheila D. Harris John F. Moore Los Angeles 90051 William D. Jones Mark L. Mullinix2 Portland 97208 Karla S. Chambers Richard B. Hornsby Salt Lake City 84125 H. Roger Boyer Andrea P. Wolcott Seattle 98124 Mic R. Dinsmore 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

A69 Index to Volume 89 GUIDE TO PAGE REFERENCES IN MONTHLY ISSUES Issue Text "A" Pages Issue Text "A" pages Index to Index to tables tables January 1- 46 1-70 58 July 309-350 1-74 58 February 47- 92 1-86 70 August 351-394 1-80 70 March 93-150 1-74 58 September 395-416 1-86 74 April 151-190 1-68 58 October 417-450 1-74 58 May 191-242 1-80 70 November 451-476 1-82 70 June 243-308 1-74 58 December 477-516 1-76 58 The "A" pages consist of statistical tables and reference information. Statistical tables are indexed separately (see p. A58 of this issue). Pages Pages ACCOUNTANTS and accounting firms 77, 407 Bank Holding Company Act of 1956—Continued Adjustable rate mortgages, Spanish-language brochure 382 Applications approved under—Continued Aizcorbe, Ana M., article 1-32 Alpha Financial Group, Inc., Employee Stock Annual Report, Budget Review, 2002 272 Ownership Plan 446 Annual Report, 89th, 2002 272 Ambanc Financial Services, Inc 89 Anti-tying restrictions, comments sought 407 American Eagle Financial Corporation 188 Articles American Heartland Bancshares, Inc 348 An overview of consumer data and credit reporting 47-73 American Trust BanCorp 348 Capital standards for banks: The evolving Basel Amtrust, Inc 188 Accord 395-105 Arthur Financial Corporation 446 Global integration in the banking industry 451-60 Arvest Bank Group, Inc 305 Household financial management: The connection Arvest Holdings, Inc 305 between knowledge and behavior 309-22 Avest, Inc 391 Industrial production and capacity utilization: Backlund Investment Co 42 The 2002 historical and annual revision 151-76 BancFirst Corporation 473 Monetary policy reports to the Congress 93-124, 351-78 Bancorp V, Inc 305 Profits and balance sheet developments at U.S. Bancroft State Bancshares, Inc 190 commercial banks in 2002 243-70 Bancshares of Florida, Inc 190 Recent changes in U.S. family finances: Evidence from the Bancsouth Financial Corporation 514 1998 and 2001 Survey of Consumer Finances 1-32 Bank Capital Corporation 305 Recent changes to a measure of U.S. household debt BankFIRST Bancorp, Inc 42 service 417-26 Bank of Commerce Holdings, Inc 240 Recent developments in business lending by Bank of Granite Corporation 240 commercial banks 477-92 Bank of Hawaii Corporation 448 U.S. international transactions in 2002 191-203 Bank of the San Juans Bancorporation 348 Assets, family, 1998-2001 survey 8-21 Bank One Corporation 393 Audit services to institutions 205 Bank West Nevada Corporation 43 Automobile market 421 Bay View Capital Corporation 306 Availability of Funds and Collection of Checks BB&T Corporation 91 (Reg. CC) 323, 333, 407, 435 BCAC, Inc 473 Avery, Robert B., article 47-73 Bethlehem Financial Corporation 305 Bitterroot Holding Company 189 BAILEY, Deborah P., Associate Director, Division of Banking Blackhawk Bancorp, Inc 446 Supervision and Regulation, promotion 495 BNC Bancorp 43 Bank check services, Federal Reserve Banks 126 BNW Bancorp, Inc 240 Bank data reporting 380 Boston Private Financial Holdings, Inc 91 Bank Holding Companies and Change in Bank Control Bridge Street Financial, Inc 89 (Reg. Y) 178, 379, 385 Bridgewater Financial, MHC 188 Bank Holding Company Act of 1956 BSA Bankshares, Inc 305 Applications approved under BSA Delaware, Inc 305 ABM Holding Company 240 BTC Financial Corporation 43 Adams Bank & Trust 42 Buffalo Acquiror Sub, Inc 43 Adbanc, Inc 42 Buford Banking Group, Inc 188 Afin, Ltd 391 Business Bancshares, Inc 391 AIM Bancshares, Inc 391 CalWest Bancorp 391 Alapaha Holding Company 413 Campbell Hill Bancshares, Inc 446 Almancora, CVA, Belgium 240 Campbell State Company 188 Almanij, N.V., Belgium 240 Carver Financial Corporation 446 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

113 Federal Reserve Bulletin • December 2003 Pages Pages Bank Holding Company Act of 1956—Continued Bank Holding Company Act of 1956—Continued Applications approved under—Continued Applications approved under—Continued Cass Information Systems, Inc 349 FNB Corp 241 Castle Creek Capital, LLC 91 FNB Corporation 393 Castle Creek Capital Partners Fund Ila, LP 91 FOJ Management Company, LLC 447 Castle Creek Capital Partners Fund lib, LP 91 FOJ Partners, LP 447 CBS Banc Corp, Inc 305 FOJ Partners II, LP 447 CenterState Banks of Florida, Inc 89 Foundation Bancorp, Inc 240 Central Financial Corporation 305 Founders Group, Inc 348 Central Georgia Banking Company 392 Frances W. Arthur Irrevocable Trust #2 for the Central Missouri Shares, Inc 89 Benefit of Frances Oxner Jorgenson 447 Centra Ventures, Inc 392 Freedom Bancshares, Inc 473 Cera Beheersmaatschappij, N.V., Belgium 240 Friedman Billings Ramsey Group, Inc 43 Cera Holding, CVBA, Belgium 240 Frontenac Bancshares, Inc 189 Cera Stichting, VZW, Belgium 240 FT Bancshares, Inc 148 Citizens Bancorp 188 GB&T Bancshares, Inc 43 Citizens Bancshares Employee Stock Ownership Plan 348 Gemini Bancshares, Inc 392 Citizens Union Bancorp of Shelby ville, Inc 189 Georgia Commerce Bancshares, Inc 240 Coastal Financial Corporation 446 Gravett Bancshares, Inc 43 Coast Financial Holdings, Inc 188 Guaranty Corporation 305 Coffeyville Bancorp, Inc 446 Guaranty Federal Bancshares, Inc 392 Colonial BancGroup, Inc., The 473 HAO Management Company, LLC 447 Commerce Bancorp 89 HAO Partners, LP 447 Commerce Bancorp, Inc 43 HAO Partners II, LP 447 Commerzbank Aktiengesellschaft, Frankfurt, Germany .... 393 Harrodsburg First Financial Bancorp, Inc 90 Community Bancshares of Mississippi, Inc 305 Hazelhurst Investors, Inc 43 Community Bancshares of West Georgia, Inc 148 Healthcare Bancorp, Inc 240 Community Bankshares, Inc 43 Heartland Financial USA, Inc 393, 447 Community Financial Corporation 89 Heritage Bancshares, Inc 240 Community Guaranty Corporation 473 Heritage Oaks Bancorp 447 Cornerstone Bancshares, Inc 446 Herky Hawk Financial Corp 90 Country Bank Holding Company, Inc 446 Hinsbrook Bancshares, Inc 448 Crockett Delaware Bancshares, Inc 392 Hometown Bancorp, Inc 189 Danran Holding, Ltd., Tel Aviv, Israel 393 Hume Bancshares Acquisition Corp 447 Davis Bancorporation 43, 44 IBERIABANK Corporation 189 Davis Trust Financial Corporation 188 Independent Bank Corporation 349 DB Acquisition Corp 188 Independent Holdings, Inc 90 Denison Bancshares, Inc., of Holton 392 Industry Bancshares, Inc 447 DnB Holding ASA, Oslo, Norway 306 Industry Holdings, Inc 447 Eagle Community Bancshares, Inc 43 InfiCorp Holdings, Inc 473 Eagle Investment Company, Inc 91 Integra Bank Corporation 241 East Penn Financial Corporation 392, 473 Interchange Financial Services Corporation 240 Eden Financial Corporation 392 International Brotherhood of Boilermakers, Iron Ship Eggemeyer Advisory Corp 91 Builders, Blacksmiths, Forgers & Helpers 305 Elran (D.D.) Holdings, Ltd., Tel Aviv, Israel 393 Inwood Bancshares, Inc 392, 393 Elran (D.D.) Investments, Ltd., Tel Aviv, Israel 393 Inwood Delaware 393 Equity Bancshares, Inc 392 Inwood Delaware, Inc 392 Farmers Bancorp, Inc 43 Iroquois Bancorp, Inc 305 Farmers & Merchants Financial Services, Inc 474 ITLA Capital Corporation 45 Farmers State Bank of Fort Morgan, The, Colorado JCO Partners, LP 447 Employee Stock Ownership Plan 348 JCO Partners II, LP 447 FBOP Corporation 89 JCO Ventures, LLC 447 FBR Ashton, Limited Partnership 43 JDOB, Inc 392 FBR Opportunity Fund, Ltd 43 Jere J. Ruff Family, Limited Partnership II 348 FBR Small Cap Financial Fund 43 JW Bancorp, Inc 305 FEB Bancshares, Inc 148 Kankakee Bancorp, Inc 474 Financial Investors of the South, Inc 305 KBC Bank, N.V., Belgium 240 Finlayson Bancshares, Inc 188 KBC Bankverzekeringsholding, N.V., Belgium 240 First American Bancshares, Inc 305 KeyCorp 43 First BanCorp, San Juan, Puerto Rico 189 KSB Bancorp, Inc 473 First Bancorp, Troy, North Carolina 89 Lakeland Bancorp 447 First Bancorp, Inc 240 Lauritzen Corporation 447 First Banks, Inc 240 Lea M. McMullan Trust 189 First Carroll Bankshares, Inc 448 Liberty Bancshares, Inc 348, 392 First Crockett Bancshares, Inc 392 Liberty Financial Group, Inc 90 First Federal Financial Corporation of Kentucky 89 Liberty Financial Services, Inc 241 First Interstate Bancsystem, Inc 90 Liberty Shares, Inc 473 First Merchants Corporation 148 Liberty State Bank 392 First Mutual Bancorp of Illinois, Inc 189 Mahaska Investment Company 44 First National Bancorp, Inc 240 Mahaska Investment Company ESOP 44 First National Bank of Berryville Employee Stock MainSource Financial Group, Inc 348 Ownership Plan 448 Main Street Banks, Inc 348 First Okmulgee Corporation 189 Main Street Financial Services Corp 306 First Olathe Bancshares, Inc 148 Marco Community Bancorp, Inc 447 First Southern Bancorp, Inc 189 Marshfield Investment Company Emplyee Stock First State Associates, Inc 90 Ownership Plan and Trust 90 First State Bancorp 90 MB Financial, Inc 148 Five Star Bancorp 348 McCreary National Bancorp, Inc 306 F.N.B. Corporation 189, 240 Meadgen & White, Ltd 90 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 89 A71 Pages Pages Bank Holding Company Act of 1956—Continued Bank Holding Company Act of 1956—Continued Applications approved under—Continued Applications approved under—Continued Mechanics Banc Holding Company 241 Southwest Community Bancorp 189 Mercantile Bancorp, Inc 90, 392, 447 Southwest Florida Community Bancorp, Inc 44 Merchants and Manufacturers Bancorporation, Inc. ... 447, 448 SSB Holding Co., Inc 241 Merchants Merger Corp 447 Standard Bancshares, Inc 306 Merchants New Merger Corp 448 State Bankshares, Inc 91 Midwest Banc Holdings, Inc 44 Steele Street Bank Corporation 392 Minnwest Corporation 91 Sun Financial Corporation 44 MNB Holdings Corporation 392 Surrey Bancorp 241 Morton Bancorp, Inc 241 Synergy, MHC 44 Mountain Bancshares, Inc 306 Synergy Financial Group, Inc 44 MountainBank Financial Corporation 91, 306 Synovus Financial Corp 44, 91 Mount Hope Bankshares, Inc 473 Tate Interim, Inc 91 Munchener Ruckversicherungs-Gesellschaft TCB S-Corp, Inc 91 Aktiengesellschaft, Munich, Germany 392 TCF Financial Corporation 44, 306 Neighbors Bancshares, Inc 90 TeamCo, Inc 448 New CCB, Inc 90 Tidelands Bancshares, Inc 392 New Century Bancorp, Inc 473 Total Bancshares Corp 474 New City Bancorp, Inc 473 Tradition Bancshares, Inc 448 New West Banks of Colorado, Inc 90 Tradition Bancshares of Delaware, Inc 448 North American Bancshares, Inc 473 Triangle Financial Group, Inc 349 North Field Holdings Corp 44 Tropical Bancshares of Florida, Inc 148 North Field Savings Bank 44 UCB Financial Group, Inc 349 North Georgia Bancorp, Inc 306 Union Financial Bancshares, Inc 392 Northview Financial Corporation 393 United Bankshares, Inc 448 Northwest Equity Corporation 473 United Community Banks, Inc 189, 241 Ocean Bankshares, Inc 241 Utah Community Bancorp 189 Old O'Brien Banc Shares, Inc 90 Uwharrie Capital Corp 241 Olmsted Holding Corporation 148 Valley Commerce Bancorp 474 One Rich Hill Land, Ltd. Partnership 391 Vision Bancshares, Inc 91 One Rich Hill Mining, L.L.C 391 VSB Bancorp, Inc 241 OSB Delaware Financial Services, Inc 189 Waumandee Bancshares, Ltd 241 OSB Financial Services, Inc 189 Wayne Bancorp, Inc 306 Oswego Community Bank Employee Stock Wells Capital Management, Incorporated 89 Ownership Plan 448 Wells Fargo & Company 89, 188 Ozarks Heritage Financial Group, Inc 189 Wells Fargo Financial, Inc 188 Page Bancshares, Inc 473 Wells Fargo Financial Services, Inc 188 Pebblespring Holding Company 448 Wells Fargo Funds Managment, LLC 89 Peoples Bancshares Corp 448 West Bancorporation, Inc 448 Peotone Bancorp, Inc 348 WJR Corp 91 Pinnacle S-Corp, Inc 90 Orders issued under Plains Capital Corporation 90 Allied Irish Banks, p.l.c., Dublin, Ireland 208-11 PNB Bancshares, Inc 348 Arvest Bank Group, Inc 439-43 Prairieland Bancorp Employee Stock Ownership Plan BB&T Corporation 335-44 and Trust 90 Cathay Bancorp, Inc 468-73 Premier Bancshares, Inc 306, 348 Charles Schwab Corporation 300-02 Premier Delaware Bancshares 348 Citizens Financial Group, Inc 386-91 Prosperity Bancshares, Inc 474 Cooperatieve Centrale Raiffeisen-Boerenleebank B.A., PSB Group, Inc 306 Rabobank Nederland, Utrecht, The Netherlands .... 81-85 PSB Holdings, Inc 241 FBR TRS Holdings, Inc 219-22 Pulaski Investment Corporation 348 Forest Merger Corporation 219-22 Putnam Bancorp, MHC, Inc 241 Illini Corporation 85-87 Quality Bankshares, Inc 474 Mizuho Financial Group, Inc. Tokyo, Japan 181-85 RAM Security Holdings, Ltd 348 M&T Bank Corporation 222-34 RAM Security Holdings GP, Inc 348 RBC Centura Bank 139-45 Ravalli County Bankshares, Inc 189 RBC Centura Banks, Inc 139-45 Red River Bancshares, Inc 448 RBSG International Holdings, Ltd., Edinburg, Reliance Bancshares, Inc 306 Scotland 386-91 Reynolds,Teague, Thurman Financial Corp 90 Royal Bank of Canada, Montreal, Canada 139-45 Rio Delaware Corporation 474 Royal Bank of Scotland, pic, The, Edinburgh, Rio Financial Services, Inc 474 Scotland 386-91 River Bailey Bancorp, Inc 44 Royal Bank of Scotland Group, pic, The, Edinburgh Royal Palm Bancorp, Inc 348 Scotland 386-91 RTT Delaware Holdings, Inc 90 SouthTrust Bank 211-17 Ruff Management, LLC 241, 349 SouthTrust Corporation 211-17 Ruff Partners, Ltd 349 SouthTrust of Alabama, Inc 211-17 Scott County Bancorp, Inc 306 Wakashio Bank, Limited, The, Tokyo, Japan 217-19 Security First Bancshares, Inc 306 Woori Bank, Seoul, Korea 436-39 Service 1st Bancorp 349 Woori Finance Holdings Co., Ltd., Seoul, Korea 436-39 Shamdar Holdings, Ltd., Tel Aviv, Israel 393 Bank Holding Company Supervision Manual 130, 381 Shorebank Corporation 393 Banking industry, profits 253-58 Sky Financial Group 190 Banking organizations 206, 431, 451-60 Sleepy Hollow Bancorp, Inc 349 Bank Merger Act South Financial Group, Inc., The 448 Applications approved under South Shore Mutual Holding Company 392 Arvest Bank 307 South Texas Bancorp, Inc 392 Bay lake Bank 474 Southwest Bancorp, Inc 448 Bridge View Bank 242 Southwest Bancorporation of Texas, Inc 349 Central California Bank 349 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

115 Federal Reserve Bulletin • December 2003 Pages Pages Bank Merger Act—Continued Board of Governors—Continued Applications approved under—Continued Official staff changes—Continued Chippewa Valley Bank 307 Embersit, James A 495 Citizens Banking Company 45 Emerson, Marianne 207 Citizens Bank New Hampshire 393 English, Maureen P. 80, 207 Citizens Bank of Massachusetts 393 Faust, Jon 129 Comerica Bank 349 Fox, Lynn 384 Dallas Investment Company 449 Gillum, Gary 433 East Penn Bank 393 Greenlee, Jon D 495, 496 Farmers Bank & Trust Company 45 Hambley, Winthrop P. 433 First Bank 242 Hannan, Maureen 207 First Bank and Trust Company, The 242 Henderson, Dale 129 First Interstate Bank 92 Hoffman, Stephen M 495 First State Bank Southwest 307 Holm, Charles H 495 FNB Southeast 148 Hoskins, Lisa 384 Heritage Bank of Commerce 45 Hurt, Adrienne D 80 IBERIABANK 190 Johnson, Willene A 129 JPMorgan Chase Bank 393 Jones, William R 384 Midwest Bank & Trust Company 45 LaChapelle, Dorothy B 384 M&I Marshall Ilsley Bank 92 Leahy, Michael 129 Planters Bank and Trust Company of Virginia 449 Lindsey, David E 410 PNG Financial Bank 92 Lopez, John H 384 Ravenna Bank, The 474 Martin, Stephanie 129 Red River Bank 449 Martinson, Michael G 495 Second Bank & Trust 449 McNulty, Irene Shawn 80 Security Bank Minnesota 307 Michaels, James A 80 Sky Bank 190 Miles, Walt 495, 496 State Bank of La Crosse 242 Orphanides, Athanasios 383, 384 Suburban Community Bank 449 Peters, H. Fay 207, 410 UnionBank 190 Price, Tonda E 80, 273 United Bank 449 Ryback, William A 273 Univest Corporation of Pennsylvania 449 Schemering, Steven C 495 Univest National Bank 449 Smith, Michelle A 384, 433 Order issued under, Bank of Hawaii 87 Spaniel, William G 495, 496 Banks, U.S., new Basel Accord 400 Taylor, Robert F. 329 Banks' Own Claims on Unaffiliated Foreigners, Bulletin table, Treacy, William F. 495, 496 number 3.20, discontinued 383 Williams, David L 329 Barger, Norah M., Associate Director, Division of Banking Winn, Donald J 433 Supervision and Regulation 495 Wright, David M 495 Basel Capital Accord National Flood Insurance, guidance 77, 125 Advance notice of proposed rulemaking for 379 Rules for Collecting and Reporting Information 323 Article 395-105 Rules of Organization 331 Basel I 395, 396 Rules Regarding Equal Opportunity for Staff 275-300 Basel II 397^105, 408, 494 Thrift Institution and Advisory Councils 34 Consultative Paper 272 Bostic, Raphael W., article 47-73 Bassett, William F., article 477-92 Bouchard, Barbara J., Deputy Associate Director, Beneficial ownership reports, electronic filing system 409 Division of Banking Supervision and Regulation 495 Berger, Allen N., article 451-60 Braunstein, Sandra F„ Senior Associate Director, Bernanke, Governor Ben S 427, 493 Division of Consumer and Community Affairs 80, 273 Beverly, Sondra G., University of Kansas, article 309-22 Bulletin tables, discontinued Blanchard, Laricke, Special Assistant to the Board, Banks' Own Claims on Unaffiliated Foreginers, appointment 433 number 3.20 383 Board of Governors Claims on Foreign Countries held by U.S. and Foreign Consumer Advisory Council Offices of U.S. Banks, number 3.21 131 Meetings 178, 328, 467 Business sector, economic developments 101-06, 358-62 New member nominations and appointments 75-77, 323 Credit management meeting 327 CALEM, Paul S„ article 47-73 Discount rate meetings, minutes 37, 78, 128, 206, Canner, Glenn B., article 47-73 328, 383, 432, 467, 494 Capital, commercial banks 251, 431 Final enforcement decisions or orders (See Litigation, Capital accounts, U.S 200, 202 Final enforcement decisions or orders issued by Capital standards for banks: The evolving Basel Accord, Board of Governors) article 395-405 Index of orders or actions taken 61, 187, 347, 445 Carlson, Mark, article 243-70 Mail, negative anthrax test results 128 Cash-flow management 312-15 Members Cash services policy, comments sought 461 Bernanke, Governor Ben S 427, 493 Check processing, Availability of Funds and Collection of Ferguson, Vice Chairman Roger W., Jr 427, 493 Checks (Reg. CC) 323 Greenspan, Chairman Alan 271, 273 Check services, Federal Reserve Banks 126 Official staif changes Claims on Foreign Countries held by U.S. and Foreign Bailey, Deborah P. 495 Offices of U.S. Banks, Bulletin table 3.21, discontinued ... 131 Barger, Norah M 495 Clouse, James A., Deputy Associate Director, Division of Blanchard, Laricke 433 Monetary Affairs 383 Bouchard, Barbara J 495 Collection agency records 68-70 Braunstein, Sandra F 80, 273 Commercial and industrial loans 256, 477-92 Clouse, James A 383 Commercial Bank Examination Manual 78, 380 Cross, Betsy 495 Commercial bank Desmond, Angela 495 Balance sheet developments 245-49 Division of Banking Supervision and Regulation 495 Income and expenses, tables 260-70 Edwards, Cheryl L 383 Interest income and expense 254 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 89 A73 Pages Pages Commercial bank—Continued Export developments 108, 197 International operations 258 Extensions of Credit by Federal Reserve Banks Liabilities 251 (Reg. A), revisions 38-41, 119, 136, 411 Loans 245^17, 249-50, 255-58 Profitability 253-58 FAMILY finances, U.S., 1998 and 2001 Survey of Recent developments in lending, articles 243-70, 477-92 Consumer Finances, article 1-32 Securities holdings 250 Faust, Jon, Assistant Director, Division of International Commercial real estate 362 Finance 129 Consumer Advisory Council Federal flood insurance authority, guidance on lapse in 77 Meetings 178, 328, 467 Federal government, economic developments 106, 362-65 Members, officers, and nominations 75-77, 323 Federal Open Market Committee Consumer data, credit reporting, article 47-73 Discount rate change 379 Consumer Finances, comparison of 1998 and 2001 Discount rate meetings, minutes 37, 78, 128, 206, 328, surveys on 1-32 383, 432, 467, 494 Consumer Handbook on Adjustable Rate Mortgages, Spanish .. 382 Meeting schedule, 2004 326 Consumer rights, summary, Fair Credit Reporting Act 48 Rules of procedure, amendment 181 Consumer spending 98, 355 Statements 34, 125, 204, 271, 379, 406, 427, 493 Corporate profits 102-06, 359-62 Federal Reserve Banks Corrado, Carol, article 151-76 Bank check services 126 Counterfeiting 204, 327, 430, 464 Chairmen and deputy chairmen 462 Credit card account management, guidance on 35, 55, 127, 409 Cleveland, Sandra Pianalto appointed President 34 Credit management meeting and survey results 315, 327 Data collection, contract award to modernize 380 Credit reporting, consumer data, article 47-73 Fee schedules 493 Cross, Betsy, Associate Director, Division of Banking Income, preliminary figures 74 Supervision and Regulation 495 New York, President William J. McDonough, retirement — 125 Currency redesign and issuance 326, 429-31, 463-65 New York, Timothy F. Geithner appointed president 462 Current accounts, U.S 193, 199, 366 Priced-service income, imputing method 324 Customer identification program, final rules 271, 332 Federal Reserve Bulletin Legal Developments Section 450, 475, 516 DATA, credit reporting and consumers survey 70-73, 321 New publication schedule 433, 466 Debt Federal Reserve System, financial education and literacy Corporate 116-18 initiative 324 Financial intermediation 372-74 Fedwire Funds Service, expansion of online Household, article 417-26 operating hours 36, 325 Shorter-term 372 Ferguson, Vice Chairman Roger W., Jr 427, 493 Debt service ratio, article 417-26 Finance, business and household 100, 102-06, 355-58, 358-62 Depository institutions Household 100, 355-58 Discount window, guidelines on appropriate use 406 Financial accounts, final rules to identify new account Exemption thresholds 74, 461 customers 271, 332 Derivatives 252, 490 Financial education, online resource and literacy Desmond, Angela, Deputy Associate Director, Division of initiative 206, 324 Banking Supervision and Regulation 495 Financial management of households, practices 310-12 Disciplinary action, accountants and accounting firms 77, 407 Financial markets, economic developments 94-96, 113-20, Disclosure requirements, mortgage loans, annual fee-based 354-78, 370-75 trigger amounts announced 407 Financial obligations ratios 421, 424 Discount rate meetings, minutes 37, 78, 128, 206, 328, Financial system, white paper on sound practices 206 383, 432, 467, 494 Foreign banking organizations, online applications 431 Discount rates, primary and secondary lending 74 Foreign sector, economic developments 107-10, 120-24, Discount window, guidance on appropriate use and 365, 375-78 amendment to Reg. A 119, 406 Fox, Lynn, Senior Adviser, Office of the Staff Director 384 Dynan, Karen, article 417-26 GEITHNER, Timothy F., President, Federal Reserve Bank ECONOMIC developments, by sector of New York 462 Business 101-06, 358-62 Gillum, Gary, Senior Economist, Division of Monetary Financial markets 94-96, 113-20, 354-78, 370-75 Affairs 433 Foreign 107-10, 120-24, 365, 375-78 GlobalCash-Europe96 survey 453-58 Government 106, 362-65 Global counterfeiting, report 204 Household 98-101, 355-58 Global integration in the banking industry, article 451-60 Labor 110-13, 366-68 Government sector, economic developments 106, 362-65 Prices 112, 368-70 Government securities, U.S 36 Economy, U.S. Monetary policy reports 93-124, 351-78 Greenlee, Jon D., Assistant Director, Division of Banking Edwards, Cheryl L., Assistant Director, Division of Supervision and Regulation 495, 496 Monetary Affairs 383 Greenspan, Chairman Alan Electronic filing system, beneficial ownership reports 409 McDonough retirement 125 Electronic payments systems, retail, staff study summary 33 Statement on term in office 271 Embersit, James A., Deputy Associate Director, Division of Successful surgery 273 Banking Supervision and Regulation 495 Vice Chairman Ferguson and Governor Bernanke Emerging-market economies, developments 122-24, 377 nominations, statements 427 Emerson, Marianne, Director, Division of Information Technology 207 HAMBLEY, Winthrop P., Assistant to the Board, Employment 110, 366 Congressional Liaison Office 433 Enforcement actions (See Litigation, Final enforcement Hannan, Maureen, Deputy Director, Division of Information decisions or orders issued by Board of Governors) Technology 207 English, Maureen P., Associate Director, Division of Henderson, Dale, Senior Adviser, Division of International Consumer and Community Affairs 80, 207 Finance 129 Equal Credit Opportunity Act (Reg. B) 177 Hilfert, Marianne A., article 309-22 Equal opportunity, final rule amending 275-300 Hoffman, Stephen M., Deputy Director, Division of Equity markets 115 Banking Supervision and Regulation 495 Europe, international integration 452 Hogarth, Jeanne M., article 309-22 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

117 Federal Reserve Bulletin • December 2003 Pages Pages Holm, Charles H., Deputy Associate Director, Division of Litigation—Continued Banking Supervision and Regulation 495 Final enforcement decisions or orders issued by the Home equity lines of credit, Spanish-language brochure 383 Board of Governors—Continued Home Mortgage Disclosure Act (Reg. C), amendments ... 178, 331 Bank of Yellville 128 Homeowners, financial obligations and income 423 Butler, Marian L 179 Hoskins, Lisa, Assistant Director, Division of Reserve Bank Centennial Bank of the West 383 Operations and Payment Systems 384 Central State Bank 128 Household debt service, changes to measure of, article 417-26 Citizens Bank and Trust Company 329 Household financial management 100, 257, 309-22, 356-58 Community First Bank & Trust 383 Household sector, economic developments — 98-101, 355-58, 421 Community State Bank 432 Hurt, Adrienne D., Associate Director, Division of Consumer Del Rio, Eduardo 37 and Community Affairs 80 First Bank, Creve Coeur 179 First Farmers Bank and Trust 272 IDENTITY theft 129, 408 Frierson, Terry 179 Import developments 108, 198 Gulf Bank 495 Income LaSalle State Bank 129 Commercial banks 260-70 McCarthy, Susan Diehl 467 Family, 1998-2001 survey 3-6 Rowe, Cynthia 179 Federal Reserve Banks, preliminary figures 74 Sahlgren, Michael 179 Industrial and commercial loans 256, 477-92 Simmons First Bank of Russellville 129 Industrial economies, developments 121, 376 Skrobot, Dale and Betty 179 Industrial production and capacity utilization Staples, Lori H 329 Annual revision, change in publication date 37 Ulrich, Gene 467 Article 151-76 Van Stone, Craig 432 Information security risks, guidance on 128 WestLB AG, Dusseldorf, Germany 432 "Interagency Paper on Sound Practices to Strengthen the Index of orders or actions taken 42, 187, 347, 445 Resilience of the U.S. Financial System" 206 Pending cases involving the Board of Governors, Interbank Liabilities (Reg. F) 468 lists of 45, 92, 149, 190, 242, Interest income and expense, commercial banks 254 307, 350, 394, 449, 475 Interest rates 114, 419 Termination of enforcement actions issued by Board of Internal auditing, policy statement on 205 Governors International Banking Act of 1978 Allfirst Bank, The 433 Orders issued under Allfirst Financial, Inc 433 Bancolombia, S.A., Medellin, Colombia 234-36 Allied Irish Banks, p.l.c 433 BBVA Bancomer, S.A., Mexico City, Mexico 146 Banco Bilbao Vizcaya Argentario, S.A. 79 CITIC Ka Wah Bank Limited, Hong Kong Special Banco Popular de Puerto Rico 79 Administrative Region, People's Republic of Bank of Rogers 80 China 443-45 Belmont Bancorp 79 Daiwa Bank, Limited, The, Osaka, Japan 185-87 Cerritos Valley Bancorp 80 DEPFA BANK, pic, Dublin, Ireland 236 Cerritos Valley Bank 80 HSH Nordbank Aktiengesellschaft, Hamburg/Kiel, CSB Bancorp, Inc. 80 Germany 344 Daiwa Bank, Limited, The, Osaka, Japan 180, 273 Union Bank of Israel, Ltd., Tel Aviv, Israel 302-04 Daiwa Bank and Trust Company 180 Wakashio Bank, Limited, The, Tokyo, Japan 237-39 First Security Bancshares, Inc 180 International Banking Operations (Reg. K) .. 125, 137-39, 178, 324 Grimes Capital Corporation International monetary policy developments 120-24, 375-78 Guaranty Bank 180 International transactions, U.S., article 191-203 Guaranty Financial Corporation Investment income 199-201 Olathe Bancorporation, Inc 432 Investments PNC Financial Services Group, Inc., The 432 Fixed 101, 358 ShoreBank Cleveland 432 Household 317 United Central Bank 432 Inventory 102, 359 United States Trust Corporation 329 Residential 356 U.S. Trust Corporation 329 Iraq war, effect on U.S. financial markets 370 Valley Independent Bank 180 Written agreements approved by Federal Reserve Banks JOHNSON, Kathleen, article 417-26 BANKFIRST 272 Johnson, Willene A., Adviser, Division of International BANKFIRST Corporation 272 Finance 129 Bank of Gassaway 495 Jones, William R., Director, Management Division 384 Barnes Banking Company 207 Brickyard Bancorp, Inc 329 KAMIN, Steven B„ article 191-203 Citigroup, Inc 410 Kennickell, Arthur B., article 1-32 Consolidated Bank and Trust Company 432 Fifth Third Bancorp 207 LABOR markets, economic developments 110-12, 366-68 Fifth Third Bank 207 LaChapelle, Dorothy B., Assistant Director, Division of First American Bank 467 Reserve Bank Operations and Payment Systems 384 First Charter Bank 467 Leahy, Michael, Assistant Director, Financial Markets and First PREMIER Bank 467 International Banking Sections oversight, Division of First State Bank of West Manchester, The 273 International Finance 129 Gold Banc Corporation 432 Legal Developments Section, Bulletin 450, 475, 516 Gold Bank 432 Liabilities, commercial banks 251 HSBC Bank USA 273 Liabilities, family, 1998-2001 survey 21-28 LP. Morgan Chase & Co 409 Lindsey, David E., Deputy Director, Division of Monetary Legacy Bank 206 Affairs 410 Marathon Bank, The 329 Litigation Metamora Bancorp, Inc 79 Final enforcement decisions or orders issued by the Metamora State Bank 79 Board of Governors Midstate Bancorp, Inc 206 Agee, James C 179 NAB Bank 329 Arneson, Robert C 432 Premier Bank 272 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 89 A75 Pages Pages Litigation—Continued Regulations, Board of Governors—Continued Written agreements approved by Federal Reserve W, Transactions between Banks and Their Affiliates 35 Banks—Continued Y, Bank Holding Companies and Change in Bank PREMIER Bankcard, Inc 467 Control 178, 379, 385 Premier Financial Bancorp, Inc 129 Z, Truth in Lending 36, 204, 435 Ridgedale State Bank 432 CC, Availability of Funds and Collection of Southern Commercial Bank 383 Checks 323, 333, 407, 435 United National Corporation 467 Regulatory burden, comments sought 328 Loans Renters, financial obligations and income 423 Charge-offs of 257 Reporting and Disclosure Requirements for State Member Commercial and industrial at commercial banks, article .. 477-92 Banks with Securities Registered under the Securities Commercial bank 245-47, 249-50, 255-58 and Exchange Act of 1934 (Reg. H) 136 Commercial real estate 362 Reserve Requirements of Depository Institutions, International fees for 125, 137-39 (Reg. D) 38-41, 461, 497 Mortgage, disclosure requirements for 407 Residential investment 99, 356 Syndicated 427-29, 487-89 Retail electronic payments systems 33 Loan-to-deposit ratios issued, host state 327 Risk-based capital standards 431 Lopez, John H., Special Assistant to the Board, Office of Rules Board Members 384 Rules for Collecting and Reporting Information 323 Rules of Organization, amendment 331 MANAGEMENT of cash flow by households 312-15 Rules Regarding Equal Opportunity 275-300 Market structure and developments, commercial banks 487-92 Ryback, William A., Senior Associate Director, Division of Martin, Stephanie, Associate General Counsel, Monetary Banking Supervision and Regulation 273 and Reserve Bank Affairs, Legal Division 129 Martinson, Michael G., Senior Adviser, Division of Banking SARBANES-OXLEY Act, final rule implementing 125 Supervision and Regulation 495 Saving by households 316 McNulty, Irene Shawn, Associate Director, Division of Schemering, Steven C., Senior Adviser, Division of Banking Consumer and Community Affairs 80 Supervision and Regulation 495 Michaels, James A., Assistant Director, Division of Secondary loan market, commercial banks 489 Consumer and Community Affairs 80 Securities, U.S. government 36 Miles, Walt, Assistant Director, Division of Banking Securitized loans 257 Supervision and Regulation 495, 496 Security features, new $20 note 430, 464 Monetary aggregates 118, 132-35, 374 Shared National Credit, syndicated bank loans review 427-29 Monetary policy reports to the Congress 93-124, 351-78 Smith, David C., article 451-60 Money stock data, revision 132-35 Smith, Michelle A., Assistant to the Board and Director, Moore, Kevin B., article 1-32 Office of Board Members 384, 433 Mortgage banking activities and loans 178, 407 Spaniel, William G., Deputy Associate Director, Division of Banking Supervision and Regulation 495, 496 NATIONAL Communications System (NCS) 36 Staff Study summary, The future of retail electronic National Flood Insurance Program 77, 125 payments systems: Industry interviews and analysis 33 Net worth, family, 1998-2001, survey 6-8 State member banks, reporting and disclosure Note, new 20 dollar 326, 327, 429, 430, 463, 464 requirements (Reg. H) 136 Statements, Federal Open Market Committee .... 34, 125, 204, 271, ORPHANIDES, Athanasios, Adviser, Division of 379, 406, 427, 493 Monetary Affairs 383, 384 Statistical Bulletin tables, discontinued 131, 383, Statistical Supplement to the Federal Reserve Bulletin 433, 466 PENCE, Karen, article 417-26 Student loan data, new sources for DSR 420 Perli, Roberto, article 243-70 Survey on Consumer Finances (SCF), comparison of family Personal financial education and management 206, 409 finances using 1998 and 2001 1-32 Peters, H. Fay, Deputy Director and Acting Director, Syndicated loan market, commercial banks 427-29, 487-89 Management Division 207, 410 Pianolto, Sandra, appointed president, Federal Reserve TAYLOR, Robert F., Assistant Director, Division of Bank of Cleveland 34 Information Technology 329 Price, Tonda E„ Assistant Director, Division of Telecommunications service priority, for national security Consumer and Community Affairs 80, 273 and emergency preparedness 35 Priced-service income, imputing method 324, 494 Thrift Institutions Advisory Council, new members, Prices, economic developments 112, 195, 368-70 officers, and appointments 34 Publications Trade 107-10, 193, 196-99 Annual Report, 2002 272 Transactions between Banks and Their Affiliates (Reg. W) 35 Annual Report, Budget Review, 2002 272 Treacy, William F., Assistant Director, Division of Banking Bank Holding Company Supervision Manual 130, 381 Supervision and Regulation 495, 496 Commercial Bank Examination Manual 78, 380 Truth in Lending (Reg. Z) 36, 204, 435 Federal Reserve Bulletin 433 Twenty dollar note, redesign and issuance — 326, 429-31, 464-65 Putting Your Home on the Loan Line Is Risky Business 465 Statistical Supplement to the Federal Reserve Bulletin .. 433, 466 UNEMPLOYMENT 110, 366 Public records, types available 66-68 U.S. international transactions in 2002, article 191-203 USA PATRIOT Act, customer identification rules 332 REAL estate loans and receivables 362 Use and Counterfeiting of United States Currency Regulations, Board of Governors (See also Rules) Abroad, Part II, 204 A, Extensions of Credit by Federal Reserve Banks .. 38-41, 119, 136, 411 WHAT You Should Know about Home Equity Lines of B, Equal Credit Opportunity Act 177 Credit, brochure in Spanish 383 C, Home Mortgage Disclosure Act 178, 331 Williams, David L., Associate Director, Management D, Reserve Requirements of Depository Institutions .. 38-41, 497 Division 329 F, Interbank Liabilities 468 Winn, Donald J., Director, Office of Board Members 433 H, Reporting and Disclosure Requirements for State Wright, David M., Associate Director, Division of Banking Member Banks with Securities Registered under the Supervision and Regulation 495 Securities and Exchange Act of 1934 136 K, International Banking Operations 125, 137-39, 178, 324 ZAKRAJSEK, Egon, article 477-92 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

119 Federal Reserve Bulletin • December 2003 Publications of Interest FEDERAL RESERVE REGULATORY SERVICE To promote public understanding of its regulatory func- The Payment System Handbook deals with expedited tions, the Board publishes the Federal Reserve Regu- funds availability, check collection, wire transfers, and latory Service, a four-volume loose-leaf service con- risk-reduction policy. It includes Regulations CC, J, and taining all Board regulations as well as related statutes, EE, related statutes and commentaries, and policy interpretations, policy statements, rulings, and staff statements on risk reduction in the payment system. opinions. For those with a more specialized interest in For domestic subscribers, the annual rate is $200 for the Board's regulations, parts of this service are pub- the Federal Reserve Regulatory Service and $75 for lished separately as handbooks pertaining to monetary each handbook. For subscribers outside the United policy, securities credit, consumer affairs, and the pay- States, the price including additional air mail costs is ment system. $250 for the service and $90 for each handbook. These publications are designed to help those who The Federal Reserve Regulatory Service is also availmust frequently refer to the Board's regulatory materi- able on CD-ROM for use on personal computers. For a als. They are updated monthly, and each contains cita- standalone PC, the annual subscription fee is $300. For tion indexes and a subject index. network subscriptions, the annual fee is $300 for 1 con- The Monetary Policy and Reserve Requirements current user, $750 for a maximum of 10 concurrent Handbook contains Regulations A, D, and Q, plus users, $2,000 for a maximum of 50 concurrent users, related materials. and $3,000 for a maximum of 100 concurrent users. The Securities Credit Transactions Handbook con- Subscribers outside the United States should add $50 tains Regulations T, U, and X, dealing with exten- to cover additional airmail costs. For further informasions of credit for the purchase of securities, together tion, call (202) 452-3244. with related statutes, Board interpretations, rulings, All subscription requests must be accompanied by a and staff opinions. Also included is the Board's list of check or money order payable to the Board of Goverforeign margin stocks. nors of the Federal Reserve System. Orders should be The Consumer and Community Affairs Handbook addressed to Publications, mail stop 127, Board of Govcontains Regulations B, C, E, G, M, P, Z, A A, BB, and ernors of the Federal Reserve System, Washington, DC DD, and associated materials. 20551. GUIDE TO THE FLOW OF FUNDS ACCOUNTS • A new edition of Guide to the Flow of Funds Accounts and describes how the series is derived from source is now available from the Board of Governors. The new data. The Guide also explains the relationship between edition incorporates changes to the accounts since the the flow of funds accounts and the national income and initial edition was published in 1993. Like the earlier product accounts and discusses the analytical uses of publication, it explains the principles underlying the flow of funds data. The publication can be purchased, flow of funds accounts and describes how the accounts for $20.00, from Publications, Mail Stop 127, Board are constructed. It lists each flow series in the Board's of Governors of the Federal Reserve System, Washingflow of funds publication, "Flow of Funds Accounts of ton, DC 20551. the United States" (the Z.l quarterly statistical release), Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis