greenbooks · September 17, 1973

Greenbook/Tealbook

Prefatory Note

The attached document represents the most complete and accurate version available based on original copies culled from the files of the FOMC Secretariat at the Board of Governors of the Federal Reserve System. This electronic document was created through a comprehensive digitization process which included identifying the bestpreserved paper copies, scanning those copies, 1 and then making the scanned versions text-searchable. 2 Though a stringent quality assurance process was employed, some imperfections may remain. Please note that some material may have been redacted from this document if that material was received on a confidential basis. Redacted material is indicated by occasional gaps in the text or by gray boxes around non-text content. All redacted passages are exempt from disclosure under applicable provisions of the Freedom of Information Act.

In some cases, original copies needed to be photocopied before being scanned into electronic format. All scanned images were deskewed (to remove the effects of printer- and scanner-introduced tilting) and lightly cleaned (to remove dark spots caused by staple holes, hole punches, and other blemishes caused after initial printing).

A two-step process was used. An advanced optical character recognition computer program (OCR) first created electronic text from the document image. Where the OCR results were inconclusive, staff checked and corrected the text as necessary. Please note that the numbers and text in charts and tables were not reliably recognized by the OCR process and were not checked or corrected by staff.

Content last modified 6/05/2009.

CONFIDENTIAL (FR)

SUPPLEMENT CURRENT ECONOMIC AND FINANCIAL CONDITIONS

Prepared for the Federal Open Market Committee

September 14, 1973

By the Staff Board of Governors of the Federal Reserve System

SUPPLEMENTAL NOTES

The Domestic Economy Book value of retail inventories rose at a $2.1 billion annual rate in July--off sharply from the $9.5 billion in June.

For

total manufacturing and trade, the July rate of increase was $18.0 billion and the second quarter average rate was $22.9 billion. Manufacturing and trade sales rose rapidly in July and the inventory-sales ratio declined from 1.44 in June to 1.41 in July--quite low by historical standards,

On a quarterly average sales basis, the

ratio went from 1.46 in the first quarter to 1.45 in the second. Manufacturers anticipated, when surveyed in June, that the book value of their inventories would increase at an annual rate of $10.4 billion in the current quarter and $7.2 billion in the fourth quarter.

The actual second quarter rate of $11.2 billion was consid-

erably greater than had been anticipated in the earlier surveys. Manufacturers expect sales to increase by 1.7 percent in the third quarter and to slip by 0.1 percent in the fourth.

Inventory-

shipments ratios of 1.60 and 1.63 are expected for the third and fourth quarters, respectively, compared with an actual second quarter ratio of 1.60. As described in the Greenbook, the Board's index of industrial production declined 0.2 percent from July to August because of a 23 percent curtailment in auto and truck assemblies resulting from special circumstances.

Apart from this sector, the index increased

0.5 percent. sharply.

In early September, output of autos and trucks increased

The following table presents industrial production, by major

groups. INDUSTRIAL PRODUCTION (1967=100, seasonally adjusted)

1972 Aug.

June

1973 July

Aug.

Total index

116.3

125.6

126.5

126.2

Consumer goods

124.3

131.8

132.3

130.3

Business equip. Defense equip.

107.2 78.1

122.1

123.5

123.9

15.6

80.2

81.8

81.9

4.9

Materials steel

118.8 108.1

129.1 119.9

130.6 120.0

130.9 120.0

Autos* 8.5 10.2 *Seasonally adjusted annual rat e.

10.3

8.0

Percent change from

Month ago

A year ago

-.2

8.5

-1.5

4.8

10.2 --

-22.3

11.0

-5.9

New homes sold by merchant builders dropped a tenth further in

July, to a seasonally adjusted annual rate of 596,000 units, the lowest since December 1970.

Partly reflecting this development, builders'

stocks of homes for sale advanced to a record 9 months' supply at the July rate of sales.

Even so, the median price of new homes sold con-

tinued higher and, at $33,700, was more than a fifth above a year earlier and still above the median price of homes for sale. The median price of existing homes sold also rose further in July--to $30,020, with sales of such homes remaining comparatively strong at a level nearly a tenth above a year earlier.

- 3 SALES, Homes sold 1/

STOCKS AND PRICES OF NEW SINGLE FAMILY HOMES Homes for sale 2/

Months' supply

(Thousands of units)

Median price of: Homes sold Homes for sale (Thousands of dollars)

1972 QIII

733

386

6.3

28.0

27.1

QIV

761

402

6.3

29.1

28.3

QII (p)

733 684

426 432

7.0 7.6

30.4 32.7

29.4 31.2

May (r) June

706 669

424 432

7.2 7.8

32.0 33.2

30.9 31.2

July

596

446

9.0

33.7

31.4

1973

1/ 2/

SAAR. SA, end of period.

The Domestic Financial Situation Only fragmentary date are available for deposit flows at nonbank thrift institutions in early September.

At a sample of 17

large New York City mutual savings banks, net deposit outflows during the first 5 business days of September were slightly below those recorded during the comparable period in August.

Moreover, the FHLBB

staff estimates that S&L's experienced a deposit inflow of about $100 million during the first 10 days of the month.

(At the request of the

FHLBB, the intra-monthly estimates are to be considered confidential and for internal use only.) Average interest rates on new commitments for conventional mortgages on new homes increased 30 basis points further in August, At 8.70 percent,

according to the HUD(FHA) field office opinion survey.

the rate exceeded the previous high of 8.60 percent registered in mid1970.

Average rates for loans on existing homes also rose sharply--by

35 basis points to a new high of 8.75 percent.

Even so, the average

spread favoring gross yields on new-home mortgages over new issues of high-grade utility bonds remained relatively narrow.

(Data are

confidential until released by HUD.) The FHA secondary market yield was not reported for August due to the small number of transactions at the new regulatory ceiling rate of 8.50 percent that became effective on August 25.

AVERAGE RATES AND YIELDS ON NEW-HOME MORTGAGES

Primary market: Conventional loans Spread Level (basis points) (percent)

Secondary market: FHA-insured loans Spread Level (basis Discounts (points) points) (percent)

1971 - Low High

7.55 7.95

-36 52

7.32 7.97

-27 31

1972 - Low High

7.55 7.70

15 61

7.45 7.57

5 48

3.7 4.7

1973 - Jan. Feb. Mar. Apr. May June July Aug.

7.70 7.75 7.80 7.90 7.95 8.05 8.40 8.70

32 35 31 44 44 41 34 34

7.55 7.56 7.63 7.73 7.79 7.89 8.19 1/ 2/

17 16 14 27 28 25 18 1/ 2/

4.5 4.6 5.2 5.9 6.4 7.2 9.4 1/ 2/

2.5e 7.8

NOTE:

FHA series: interest rates on conventional first mortgages (excluding additional initial fees and charges) are rounded by FHA to the nearest 5 basis points. On FHA loans carrying the 7 percent ceiling rate in effect since mid-February 1971, a change of 1.0 points in discount is associated with a change of 12 to 14 basis points in yield. Gross yield spread is average mortgage return, before deducting servicing costs, minus average yield on new Aaa utility bonds.

Estimated.

On Data are for loans bearing the former ceiling rate of 7 percent. July 6, this rate was raised to 7-3/4 percent and then to 8-1/2 percent on August 25. Not reported.

CONFIDENTIAL UNTIL RELEASED BY HUD

- 6 -

Federal finance.

Legislation passed by the Senate and intro-

duced in the Rouse would provide for an immediate 5.9 percent increase in Social Security benefits.

If enacted by November 1, an estimated

$2.0 billion would be added to Federal outlays in fiscal year 1974 (an annual rate of $3.4 billion).

Actual payment of any increase,

however, would not occur until the spring of 1974 because of the demands currently being made on the Social Security Administration in its efforts to assume, by January 1, 1974, full responsibility for providing assistance to the aged, blind, and disabled, programs previously administered by the States.

CORRECTIONS: Page I-9:

Percent per year change in personal consumption expenditures for nondurable goods projected for 1974 is 11.6 percent.

Page I-10:

Line 9, the correct figure is 610,000 units, rather than 800,000.

- 7 -

INTEREST RATES 1973 Highs

Lows

Aug. 20

Sept. 13

Short-Term Rates Federal funds (wkly. avg.) 3-month Treasury bills (bid) Comm. paper (90-119 day) Bankers' acceptances Euro-dollars CD's (prime NYC) 60-89 day Most often quoted new 6-month Treasury bills (bid) Comm. paper (4-6 mo.) Federal agencies CD's (prime NYC) 180-269 day Most often quoted new

10.79(9/5)

5.61(1/3)

9.05(8/14) 10.50(9/13) 11.00(9/13) 11.69(8/9)

5.12(1/4)

8.79

5.63(1/12) 5.75(1/11) 5.81(1/5)

10.25 10.75 11.50

8.86 10.50 11.00 11.44

10.50(9/12)

5.38(1/3)

10.38(8/15)

10.50(9/12)

9.00(9/13) 10.50(9/13) 9.83(9/12)

5.38(1/4) 5.63(1/12) 5.64(1/3)

8.77 10.25 9.49

9.00 10.50 9.47

10.39(8/15)

10.74(9/12)

9.38(8/15)

5.63(1/3)

9.38(8/15)

9.25(9/12)

8.50(9/13) 9.49(8/13)

5.40(1/4) 5.86(1/2)

8.29 9.33

8.50 9.10

8.50(9/12)

5.75(1/3)

8.50(8/15)

8.50(9/12)

6.00(8/8)

3.20(1/3)

5.70(8/15)

5.25(9/12)

8.13(8/7)

6.23(1/4)

7.83(8/7)

6.04(1/3)

7.50 7.58

7.35 7.38

7.77(8/24) 8.68(8/30)

7.10(1/2)

7.88(1/12)

7.77 8.59

7.63 8.64

8.52(8/8)

7.29(1/10)

8.30(8/15)

7.74(9/12)

Municipal Bond Buyer Index

5.59(8/1)

5.00(1/17)

5.47(8/15)

5.18(9/12)

Mortgage--implicit yield in FNMA auction 1/

9.27(9/4)

7.69(1/8)

8.71(8/6)

9.27(9/4)

1-year Treasury bills (bid) Federal agencies CD's (prime NYC) Most often quoted new Prime municipals Intermediate and Long-term Treasury coupon issues 5-years 20-years Corporate Seasoned Aaa Baa New Issue Aaa Utility

Yield on short-term forward commitment after allowance for commitment fee and required purchase and holding of FNMA stock. Assumes discount on 30year loan amortized over 15 years.

SUPPLEMENTAL APPENDIX A BANK LENDING PRACTICES AS OF MID-AUGUST * More than three-quarters of the banks participating in the Quarterly Survey of Changes in Bank Lending Practices reported stronger demand for commercial and industrial loans over the three month period ending August 15. (See Table 1.) The 125 banks reporting in the Survey have significantly tightened both price and nonprice terms of lending.

A large number of banks commented that the higher cost of funds was the major reason for tightening credit, and many indicated that state usury

laws prevented them from making

home mortgages.

However, more than half

of the banks expect commercial and industrial loan demand to remain stable or decrease in the quarter beginning August 16.

Continuing and strongly reinforcing the trend of the two surveys earlier this year, the terms of lending tightened considerably across the country. Interest rates lead the move toward more restrictive credit conditions. More than 90 per cent of the respondents had adopted a firmer interest policy, reflected in the prime rate increases from 7 per cent to 9-1/4 per cent during the three month period.

But there were still many

comments that the prime rate was unrealistically low and that the spread between the cost of funds and loan rates was too narrow or even negative. There was evidence of tightening in all nonprice terms of lending. The increased restrictiveness was significant in all areas, but was especially noticeable in compensating balances. The banks reported closer scrutiny of borrowers and the purpose of loans. There was a much more restrictive stance on new loan applications and enlarging credit lines--particularly from new or nonlocal customers. Many banks reported that loans were not being given for acquisitions or for speculation in inventories or real estate, but were granted only for "constructive" purposes to steady customers. But despite the more restrictive credit conditions generally, almost 90 per cent of the reporting banks indicated that their willingness to make consumer loans is the same or greater than three months earlier. As shown in Tables 2 and 3, the pattern of tightening emerged consistently in both large and small banks and in every region of the country.

Prepared by Paul W. Boltz, Economist, Banking Section, Division of Research and Statistics.

NOT FOR

PUBLICATION OR

QUOTATION

TABLE LENDING BANK IN CHANGES OF SURVEY QUARTERLY AT

(STATUS

OF POLICY ON (NUMBER OF

PRACTICES SELECTED LARGE BANKS IN THE U.S. 1/ AUGUST 15, 1973 COMPARED TO THREE MONTHS EARLIER) BANKS & PERCENT OF TOTAL BANKS REPORTING) MoCH STHONGFP

TOTAL HANKS

rCT

HANKS

MOnFRATELY STRONG.ER

PrT

RANKS

PCT

FSSENTIALLY UNCHANGED

MODFRATFLY wEAKER

RANKS

HANKS

PCT

MUCH EAKFR BANKS

PCT

STRENGTH AND COMMERCIAL FOR DEMAND OF INDUSTRIAL FOR ALLOWANCE (AFTER LOANS BANK'S VARIATION) SEASONAL USUAL rP

COMPA'0L)

ANTTCIAT~I-

AI0

TmI-o'- IONTHS

IN NEXT

0rmiNn

3 MONTHS

17%

100.0

19.?

56.

21.6

125

10n.0

9.6

1Hi.4

43.2

MUCH FIRMF POLICY

ANSWFRING

OUFSTIN RANKS L-ENOINb TFRMS

FIII"F INANCIAL

PCT

MUUERATELY EASIER POLICY

RANKq

PANKS

8ANKS

PCT

USISTSFs

PoTES riAcGFn

COMPFAIrSATIN

STANDIA-lOS MATUITY REVIEWIN( ETAtR

1) ,SI)PPUPTINIt

CR1-TT

IF TF-m

IALANCf-S

wOTHINFrr

LOAn1S

ISFI ) CIISTOMFPS

CI§STOMFkq

NONLUCAL S';FVICE

?N A

6'4 .

10 (

32.8

3(1.4

IOn .u

21.6

4?.4

I no.0

17.6

52.0

100i.1)

121)

100.0

rSTMFPS

1?b

100.0

ARFA CUJSTO(MES

I b

In.0

AREA

I no. Q

7-1

OR LOAN APPLICATIONS

rFI)IT LINkS

LOCAL qEPVICF

HANI4S

FSSFNTIALLY UNCHANGED POLICY

AND CntITTO'Ic:

INTE~k~r

NEW

PCT

MODEPATELY FIRMFR POLICY

SURVEY OF LENnINA PRACTICES AS OF AUGUST 15, 197J.

AT 125 LANGE RANKS

REPORTING

4 A. ri

4106

57.6

'11.4

12.0

1.0

46.4

44.0

46.4

36. o

17.6

IN THE

FEDERAL

RFSFVE

QUARTFRLY

INTFREST

HATE SURVEY

MUCH EASIER POLICY HANKS

PCT

NOT

TAHLE

OR PUBLICATION

FOR QUOTATION

"UCH FINMEt POLICY

ANSWFPING oUSTI'i HANKS

PCT

(CONTINIIED)

RANKS

PeT

MODEPATFI Y FIRFMR POLTrY HANKS

PCT

FSSENTIALLY UNCHANGED POLICY

MODFPAILLY EASIEH POLICY

RANKS

PCT

HANK

PCT

MUCH EASIER POLICY BANKS

PCT

FACTORS PELATIN( TO APPLICANT 2/ VALUE AS DFrOSITUP ON SOURCE OF COLLATERAL RUSINESS

125

100.0

39.?

36.A

24.0

U.0

0.0

INTENPFO U~F OF THE

1?5

100.0

34.4

35.

30.4

0.0

125

100.0

32.8

26.4

40.8

0.O

0.0

HALANCFS

125

100.0

12.0

21.h

66.4

().0

0.0

EOUIRFMENTS

125

100.0

16.0

16.0)

48.0

)U.U

0.0

125

100.0

5?.n

24.H

22.4

0.8

0.0

LOAN

LENDING TO "NONCAPTTVF" FINANCE COMPANIES TERMS

AND COI)ITIUNqZ

INTEHRqT PATES CHaRGED COMPENSATING OR SIIPPORTING ENFOHCEMFNT OF

nAI ANCF

ESTABLISHING NFW OR LARGEP CHFDIT LINES

ANSwFRING QUFSTTON RANKS WILLINGNFSS TO MAKE

RANKS

PCT

ODERATFLY LFcR WILLTNG RANKS

PCT

FSSENTIALLY UNCHANGED

MODERATFLY MORE WILLING

RANKS

HANKS

PCT

CUNSIDERABLY MORE WILLING BANKS

PCT

OTHER TYPES OF LOANS 125

100.l)

24.0

42.4

32.8

U.8

0.0

INSTALMENT LOANS

1?4

Ino00.

2.4

4.7

10U

M2.3

4.b

0.H

FAMILY MORTGAGE LOANS

122

100.0

20.5

32.n

44.2

3.3

0.0

121

100.0

29.R

35.

34.7

o.u

0.0

121

100.0

27.3

43.0

29.?

U.U

0.0

125

n100.

8.0

16.m

68 h4.4

0.0

124

100.0

?6.6

29.')

l.0

0.0

TERM LOANS CONSUMER SINGLE

PCT

CONSIDERAPLYY LESS WILLINr

TO HItSTNESSES

MULTI-FAMILY

MORTGAGE LOANS

ALL OTHER MORTGAGE LOANS PARTICIPATION

LOANS

CORRESPONDENT

HANKS

LOANS TO HROKFRS

I4TH

2/ FOR THESF FACTORS, FIRMFP MEaNS THE FACTORS wERF CONSIDERED FORF TMPOITANT TN AND FASTER MEANS THEY WFRF LESS IMPORTANT. CREDIT RFOUESTSb

44.

MAKING DECISIONS FOR APPUOVIN(,

NOT

FOR OR PUBLICATION QUOTATION

TABLE

GROUPED BANKS AT PRACTICES LENDING BANK IN CHANGES QUARTERLY OF COMPARISON

BY SIZE OF TOTAL (STATUS OF POLICY ON AUGUST 15, 1973. COMPARED TO THREE MONTHS EARLIER) (NUMBER OF BANKS IN EACH COLUMN AS PER CENT OF TOTAL BANKS ANSWERING QUESTION)

SI7F

MI)CH STRnNGCr

TOTAL $1

OF RANK

SI & (PJFR

IINnFR

OVrH

inn

Inn

10n

In0

TOTAL DFPn9STS

MOLIERATLLY qTPON(,ER

UN1FR tI

Si F OVER

IINI)FR $1

DEPOSITS

IN RILLIONS

FSSENTIALLY IINCHA NGED

MUOULATELY wFAK-

,%I & OVER

OVER

UNOER si

1 &

ONDL)H

MUCH WEA(ER 51 & OVER

UNOER Si

STRFNi(,T OF OFllMVuj FOR. CLIkMFLCI L Al' INDhUST-41AL I \N, IAFTFR Al LOWANCE FOR BANKI'" USUAL 'FAnOLAL VAHTATTON) COPAFll

THqtl'4 04TH';

APTICIPATti'

NFXT

DiA'Jf

A6O 3 MONTHS

mklrH

sl r. O)VFR

IKi)F.J

Inn

inn

Ion

Inn

110

Inn

1')

NEW CUISTO',FPS

Inn

inn

LOCAL SERVICE AkEa rITqTnMFRS

l0t

NONLOCAL SERVICE AREA Ch1STOMEFI

10in

Inn

LENDIN,

TERMCq

FSSFNTIALLY

FTRIAFR

['NClANCEl

$1 & OVFR

INtFP qj

IINDIFw

OVFR

,& & OVFR

INOE4 S1

MODERATELY LASILn

$1 & OVER

UNLOEH $i

MUCH

EASIER

S1 L OVER

Hi1SINES;FS

rNINFINANrIAL

AI' roi'HI ITI ONIc

INTERNT

KATE;

CHAQCGE

COMPLNqtTIN0W, SIPPORTINr OF

SThN0A'lrU mATUITY

CQ TFQ-

REVIFwlr. rwl)IJ ESTAtALISHFn

1/ SURVFY

MOnERATFLY

FTYWMFi

ToTAL

DIT

'4AI ANCt-S

wORTHTNl''r

LOANS L1Nts

LOAN

APPLICATI(I\s

CuTTEIwS

LENIINn PPACTirES

PILIO)N)

REPOWTING

THE

)

LARrE

FEDERAL

RANKS

RESERVE

(IEPOSITS

QUARTERLY

U1 RILLION OR

INTEREST

OATF

MORF) ANO

SURVEY

71 SHALL BANKS (UEPOSITS OF LESS THAN A1uGUST 159 1973.

UNDER Ui

NOT

QUOTATION TO

FOR

TARLF

PUBLICATION

(CnNTINJEn)

SI7E

PANK

kt IC 4.

NLJ'P' Fk

FIRM4FP OUFSTION

SiV.

INFI-

POLICY $1 0

UN, FP

F 4

TOTAL nFPOSTTSIN MILLIONS FSSENTIALLY MODERATELY MOnEqATELY EASIER UNCHANGED FIRMCR POLICY POLICY POLIrY iiNDFW Il

S1 L OVFP

k1 & PVER

uNDEn si

11 L OVER

uNoER $1

MUCH EASIER POLICY Si $ OVER

UNOER Si

2/ APPLICANT RELATING FACTORS TO VALUE AS OtPOSTTOP (IQ SOURCE OF COLLATERAL QUSI

INTENDED LENOING TO

ESS

THE LOAN

USE OF

100

10n

Ino

I(n

*'tONrCATIVF" FINANCF COMPANIES

TERMS ANfl CO OITTON-; INTEREqT

LA-EtI)

6;iTFS

I3o- StIPPOOTINr

COA4PENqATIN ENFORCFFNT

-F

HAL ANCFS

AALANCF PEuIRFMENTS

ESTABLTSNIN(- j.m

On LAPcE , CpFnIT LINES

CONSIDEkaSLY

NU-IZFP

%I k Ov R TO

WILLINNFqS LOAK',

TERM

CONSUIFr SINGLE

I!STALMEAT

FAMILY

OTHEP

LOANS

'-NnFP $1

()VFW

CONSIDEPAHLY

FSENTIALLY

N EU UC lH '1 4HANGOf OVER OVER

INDEP $1

wILLINI, $1

UVFR

ijEW 1l

iILLING

OVER

UNnER SI

LOANS

mURTGAGE mnT#rarE

MORTAAGF

PARTICIPATION COPRESPONDFNT

TYPES OF

OTHFR

OVFR

LFSS WILL TNG

JOSINFSSEl

NULTI-FAMILY ALL

MAKF

-INnFk si

MOOEA76LY

MOOERATELY

LFSS WILLINi-

ANSVEPINU QUFSThI ON

LOa&S RA'JKS

'aROKFQ

LOANS LOAP'S

)

10f)

LOANS WITH S10

Ion

wERF FTRME0 MFANS THE FACTOr FOR THESE FaCTOwq, ANO) EASIER MEANS THEY wFRF LESS CREDIT QI.uFST,

CONSIDEPEn ImPORTANT.

MORF

TMPOPTANT

MAKING DFCISIONS

FOR

APPROVING

NOT

QUOTATION

FORHOR PUBLICATION

TnAHLF 3

SELECTED AT PRACTICES LENDING BANK IN CHANGES OF SURVEY QUARTERLY ON POLICY OF STATUS

15, AUGUST (NUMBER

ALL ioSTS OF

rTRFPhIC,1'S,

)I-m0()

FUP

COM MWHCTAL

TON 3

,n-7HSI'

aiO

MUCH rlT.tINr(H4 MOIWtWATE Y ,THLGF4 FSSP.TAI IY IIi4CHANiFD MOLtPATFIY WFAIFF MUCH wFAKFQ ANTICIPATElO iOMANn THREE- 1ON71H, MUCH

wFaKF

JF a K(

To RUSINESgFS TERMS

ATLANTA

CHICST. ACO LOUIS

MTNNEAPOLIS

KANS. CITY

DALLAS

SAN FRAN

2 5 2 0 0

1 5 2 1 0

0 8 5 0 0

0 4

FOR

125

?4 71 ?7 3 0

4 11 5

7 0 0 0

48 54

4 3

9 10

0 0

2 6 b, 3 0 U

4 A nl (

4 5 2 0 0

1 9 2 1 0

2 4 4 0 0

3 10 2 0 0

3 3

2 1 0

1 1 1 0 0

11IJERATLY I u ()ICH

1 4 4

5 i

1 5

1 2

4 ?

s 7

2 2

2 1

3 5

2 6

3 0

0 0

2 0

a 0

a f

P 6 1 0 0

7 2 0 0 0

2 ) 1 0 0

1 1 0 0 0

7 2 0 a 0

5 6

3 7 5 0

4 2 3 0 0a

1 1 1 0 0

3 3 3 0 0

3 4 2 0 0

1 6 6 0

5 4

n f)

1 0

3 0

NNHFINANIAL

ANn rO.q)ITINS

INTERFqT

kATFs CHAWGFL

MUCH FItl-FR P(LrcY MOL)FRATELY FIHMF4 POLICY ESSFPTTALLY IINCjAN6Fn PIL IrY 4Oul)PATF1Y eAS19H POLICY MUCH EASIER PQLCy COMPENqATING

nALANCES

MUCH FIRMER POLTCY MODERATEly FIRMER POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY tASIFH POLICY MUCH EASIER POLICY

CLEVE- RICHLAND MONO

1',

SrTP0-i;'

LENONI,

PHTLADFL.

Nt-ET

MOLIPATIE YTwUII(,FR ESSI-1TTALLY IIm'C.44N(,H.)

NFw YORK TOTAL CITY 0UTcrnE

LARGE BANKS IN THE U.S. THREE MONTHS EARLIER

AmII

INnUsIPIAL LolV, (AFTFW ALLU'.ANCF RAN~lq (SUlFL ljSfONAL VARIATION) COMPAPPIl

HOSTON

1973 COMPARED TO OF BANKS)

SURVFY AS OF

OF LENDING PRACTICES AT AUGIISI 1ci 1973.

125 wfo 36 9 0 1

S 1

0 Q

5 3 0 0

4 3 1 0 U

5 1o 5 0 (

b) 2 ? 11 0

7 3 1 0 U

q 1 1) a 1)

H 3 0 0 0

7 5 0 1) 0

0 A 3 0

5 4 2 0 0

1 n

6 3 2 0 0

4 n 0

2 0 0

1?s 41 46 38 0 0

125 LARGE RANKS REPORTING

0 n

IN THE FEDERnL

5 0 0

RESERVE

5 3 2 0 0

QUARTERLY

INTEREST RATE

SURVEY

NOT

FOR

QUOTATION

TAALF 3 (CONTINIIED)

PUBLICATION

ALL OSTS

HOSNFw YORK TON TOTAL CITY OUTSIE

PHTLADFL.

rLEVE- WTCHLANO MONO

ATLAN-,CHICST. TA AGO LOUIS

MINNE- KANS. APOLIS CITY

DALLAS

SAN FRAN

LENDING TO NONFINANrIAL BUSINESSES TERMS ANn

CONI)TTIONR

STANOARDS uF

Cu3OTT wnRTHTNESS

125

MUCH FIRMER POLICY MODERATELY FIHMFR POLICY ESSENTIALLY UNCHANGFD POLICY MODERATELY FASIER POLICY MUCH EASIER POLICY

27 45 93 0 0

MATURITY OF

TERM LOANS

MUCH FIRMER POLTCY MODERATELY FIRMFR POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIFR POLICY MUCH EASIER POLICY REVIEWING CREDIT

2 2 4 0 0

3 5 1? 00 0

0 1 R 00 0

3 4 4 0 0

3 3 1 00 0

2 5 4 0 0

2 5 5 0 0

5 1 4 0 0

0 8 7 00 0

1 d 5 0 0

2 5 13 0 0

(

2 4 ) 0

1 1 2 0

1 4 6 0 0

0 6 6 0 0

3 1 6 0 o

n b 10 0 0

0 7 1 0 U

11 8 0 0

0 7 4 0U 0

1 1

0 7 4 0 0

1 4 7 0 0

1 5 4 0 0

S 2 1 0 0

13 4 3 0 0

h r J 0 0

7 4

4 1 1 0 n

7 3 1 0 0

7 4 1 0 0

0 3 b 0 0

2 9 9 0 0

1 1 b 0 0

1 6 4 0 0

0 7 4 0 0

1 6 5

1 6 2 0 0

1 0 2 0 0

5 1 3 0 0

2 5 2 0 0

1 4 8 0 0

3 e 0 0

2 1 0 0 0

4 3 2 0 0

3 3 3 0 0

0 2 10 1 0

) 6 9 0 0

3 J j 0 U

1 2 0 0 0

1 5 3 0 0

3 4 2 0 0

1 3 9 0 0

6 3 1 n 0

7 6 2 0 0

5 3 1 0 0

? 1 0 0 0

h 3 0 0 0

6 3 0 0 0

4 5 4 0 0

1 6 3 0 0

0 6 9 0 0

2 4

1 2 0 0 0

1 4 4 0

3 5 1

0 3 10 0 0

125 22 37 hb 1 0

1 0 u

INES OR LUANS

ESTARLISHEO CUSTOMFRS MUCH FIRMER UPLICY MOUFRATEI Y FIRMFW POLICY ESSFNTIALLY UNCHANGFD POLICY MODERATELY LASIFH POLICY MUCH EASIFP PULILY NEW CUSTOM-FS MUCH FIHIER POLICY MODERATELY FTHMFM POLICY FSSFNTIALLY UNCHANGF POLICY MODERATELY EASIER POLICY MUCH EASIER POLICY LOCAL SERVICE 4AEA CUSTOMFRS MUCH FIRMER POLICY MODERATELY FIRMFR POLICY ESSFMTIAILY UNCHANGED POLICY MODFkATELY EASIFH POLICY MUCH EaSIEN POLICY

125 13 60 52 0 0

1 4 0 0

125 72 38 15 U 0

u 0

125 12 58 55 0

1 ?

0 0

NOT FOR OR PUBLICATION QUOTATION

TAHLF 3

ALL oST;

HnS. TON

TOTAL

NFW YORK CITY OUTSIDE

(CONTINUED)

PHILADFL.

CLEVE- RTCHLAND MONO

ATLAN- CHICST. TA AGO LOUIS

MINNE- KANS. APOLIS CITY

DALLAS

SAN FRAN

LENDING TO NONFI[ANCIAL RUSINESSFS I 1tN'f OR LUANS

RFVIEw[NA rFoIT NONIOChL

,'VICF

hPFA C1'sT

MUCH FIMwmR POLICY MODERATELY TNMFR POLICY FSSFNTIALLY IINLHjANGFU POLICY MODERATELY EASIFR POLICY MUCH EASTER POLICY

125 5$ 45 2d

0 0

3 4 1 0 0

1 3 5 0 0

5 7 0 0

4 5 2 0 0

4 1 1 0

5 3 3 0 0

3 4 4 0 0

7 p p

2 2 0 0

n 0

2 7 2 0 0

8 2 2 0 0

6 3 1

5 4 2 0 0

3 10 2 0 0

5 4 0 0 0

2 1 0 0 0

7 1 1 0 0

6 2 1 0 0

4 6 3 0 0

3 9 0 0 0

4 3 3 0 0

6 6 3 0 0

5 3 1 0 0

2 1 0 0 0

3 3 3 0 0

6 3 0 0 0

3 4 6 0 0

6 1 4 0 0

4 5 3 0 0

3 5 2 0 0

3 9 3 0 0

4 1 4 0 0

0 2 1 0 0

3 3 3 0 0

3 4 a a 0

3 4 6 0 0

2 5 4 0 0

4 5 3 a 0

3 2 10 0 0

3 4 2 0 0

2 0 1 0 0

6 1 2 0 0

4 2 3 0 0

6 3 4

FACTORS WFLATIN6 Tn APPLICANT P/ VALUE AS OtPOSITOP OR SOUwCE OF COLLATE-AL MUSINFSq MUCH FTkh'FR POLTCY MODERATELY FINMFP POLICY ESSENTIALLY IINCHANGEI POLICY MODERATELY EASIFR POLICY MUCH EAEP PULICY INTENDFO

USE OF

LO40

MUCH FtRmFw POLICY MODERATELY FIRMFR POLICY ESSENTIALLY 'JNCHANGEO POLICY MODERATELY EASIFR POLICY MUCH EArItH PULTCY

125 49 &6 30 0 0

? 2 4 0 0

7 7

5 0

(

2 3 3 0 0

4 3

b 3 U

2 0 6 0 0

5 5 10 0 0

1)5 43 44 .38

0 0

LENDINb TO 'NONCAITIVE" FINANCE COMPANIES TERMS

ANn

CONLITIONS

INTERST RiTES LMAGEO MUCH FIwEH POLICY MODEPRATELY FIHMFR POLICY ESSENTIALLY (INCHANGFD POLICY MODERATELY EASIFR POLICY MUCH EASIER POLICY

1?5 41 33 51 0 0

? 1 6 0 0

2/ FOR THESE FACTURS. FIRMED MEANS THE FACTORS WERE CONSIDERED MORE CREDIT PEOUFSTS@ AND EASTER MEANS THEY WFRF LESS IMPORTANT.

IMPORTANT

4 4 0

MAKING DECISIONS

FOR

APPROVING

0 0

NOT FOR QUOTATION OR PUBLICATION

TARLE 3 (CONTINUED)

ALL USTS

HOSTON

NFW YORK TOTAL CITY OUTSIDE

PHILADFL.

CLEVE- RICHLAND MONO

ATLAN- CHICST. TA 'AGO LOUIS

MINNE- KANS. APOLIS CITY

DALLAS

SAN FRAN

LENDING TO "NONCAPTTVE" FINANCE COMPANIES TERMS AND CONDITIONS: SIZE OF COMPENSATING

AALANCEq

MUCH FIRMER POLICY MODERATELY FIRMER POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIER POLICY MUCH EASIER POLICY ENFORCEMENT OF BALANCE REQUIREMENT MUCH FIRMER POLICY MODERATELY FIHMFR POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIFR POLICY MUCH EASIER POLICY ESTABLISHING NE CREDIT LINES

1 0 7 0 0

1 7 12 0 0

0 2 7 0 0

1 4 3 0 0

1 14 b 0 0

0 6 3 0 0

3 2 3 0 0

10 5 4 1 0

5 2 2 0 0

2 4 2 0 0

3 9 8 0 0

0 1 7 0 0

0 1 17 1 0

0 1 5 a a

1 6 4 0 0

0 3 9 0 0

3 2 5 0 0

2 0 13 0 0

1 3 5 0 0

0 1 2 0 0

2 2 5 0 0

2 1 6 0 0

2 1 10 0 0

? n 4 0 0

2 4 5 0 0

1 4 7 0 0

3 4 3 0 0

2 3 in 0 0

1 3 5 0 0

0 0 3 0 0

3 2 4 0 0

2 3 4 0 0

2 4 7 0 0

5 3 2 1 0

5 3 3 0 0

6 5 1 0 0

5 3 2 0 0

5 7 3 0 0

5 3 1 0 0

e 1 0 0 0

8 0 1 0 0

6 1 2 0 0

7 0 6 0 0

0 5 4 0 0

3 4 4 0 U

4 0

1 8 2 0 0

2 6 3 1 0

3 5 2 0 0

0 9 6

2 1 0 0 0

4 3 2 0 0

4 0 0

2 3 8 0 0

0 0 8

0 1 9 1 0

0 0 11 0 0

0 4 6 2 0

0 1 A 1 0

0 1 14 0 0

0 0 B 1 0

0 1 2 0 0

1 3 5 0 0

1 0 7 1 0

1 0 11 0 1

1 5 5 0 0

125 20 45 60 0 0

8 2 0 0

125 65 31 28 1 0

1 P 0 0

OTHFR

TERM LOANS TO HUSTNESSES CONSIDERABLY LESS WILLING MODERATELY LESS wILLING ESSENTIALLY UNCHANGED MODERATELY MORE WILLING CONSIDERABLY MORE WILLING CONSUMER

15 27 83 0 0

nR LARGER

MUCH FIRMER POLICY MODERATELY FIRMFR POLICY ESSENTIALLY UNCHANGED POLICY MODERATELY EASIFR POLICY MUCH EASIER POLICY

WILLINGNFSS TO M 4 KE TYPES OF LOANS

125

INSTALMENT LOANS

CONSIDERABLY LESS WILLING MODERATELY LESS WILLING ESSENTIALLY UNCHANGED MODERATELY MORE WILLING CONSIDERAHLY MORE WILLING

125 30 53 41 1 0

? 0 0

)

124 3 12 102 6 1

1 0

6 n

NOT

FOR PUBLICATION OR QUOTATION

ALI OSTS WILLIN(3rFc2cz Jil TYPFS OF LI1tN SINGLF

u 'V r1f'C LU' 1

CON'lrFk4A LY LF( htlLING M0()L-;nTFI Y INS 4TLLINrC ESSP 'TTAI LY IjNCANiFD mOnE14ATtrLY klo WILLING COS1I0)F-"'LY "UI- wTLI-.J(, MULTIFAMILY

MowToA.3

LOANS

CDNS1IFA4LY LESS WILLING' MOUtwATFIY LI S% WILING !SS r.TI A I I CN Nfl.l MOVEPATUY ml) , WILL'i CONSI0FIPArLY f-OQE WILLIli, ALL

OTHEP m,)WTi;4.F LOANC

CQSTnfl4rHLY LPCS;rLLI,G MODj)ATEIY LESSILL1Nb FSSENTIAI LY IINLHAk(,F) MODEPATFI YV"t rwLLINC, CON1UF A-A-LYm0i ) wTLLIN(. PARTICIPTTU'A CORREP0NDI-1IT

LOAN-STIl4 iANWS

CONcT(JFP4-iLY LL'S 'VTLlIIu' MOURATELY LFr r ILLING ESSI:?'TT %LLY Ij1',C6N(;Fi) MO0EIATFn'Y,'E wrLi ING CONIPFPAI'LY M(0F AITtLIN'( LOANS

TO Hl OK-qS

CONSTOFR"LY LFSS WTLLIN'r MODFPATELY LFSS wILIAri ESSEN'TIALLY INICHAN(F0 MODERATELY mOwL WILLING CONSIOFRAiLY mOpr wrLLING

NUMBER OF RANAS

MOSNFW YORK TON TOTAL CITY UUTSIOE

(CnNTIN(IED)

PHTLAnEL.

CLEVELAND

RICH4MONO

4 1 1 n n

5 2 4 0 0

4 4 3 1 0

2 2 3 ? 0

1 4 in 0 0

1 4 4 a 0

2 1 0 a 0

1 5 3 0 0

1 1 7 0 0

2 3 ? 1 0

5 6 1 0 0

4 3 2 0 0

3 5 7 0 0

6 1 0 a

3 0 0 0 0

2 6 1 0 0

1 7 0 0

5 1

5 3 3 0 0

1 1

6 4 1 0 0

4 7 1 a 0

3 3 2 0

3 7 5 0 0

. 4 2 0 0

2 1 0 0 0

4 4 1 0 0

1 2 6 0 0

1 ?

1 6 4 0 0

2 4 6 0 n

0 6 4 n

n 3 12 0

1 1 7 0

0 1 2 0

1 4 4 a

2 2 4 1

0 3 10 0 0

4 6 1 0 0

3 3 6 0 0

4 3 3 0 0

3 2 4 0 0

3 3 7 0 0

0THF

MAK

F61-iTly

(CONTINUED) TAHLE 3

TABLE 3

ATLAN- CHICS1. TA AGO LOUIS

MINNE- KANS. APOLIS CITY

DALLAS

SAN FRAN

122 2!) 39 94 4 0

0 4 4 0

n 0 7 (I 0

3 7 1 o 0

1 6 n 0

A H n

2 M 1 0

le 36 43 42e 0 0

0 3 b 0 0

3 6 1 0

7 0 0

121 33 52 3t 0

0 5 2 0 0

0 1 5 II I

e 6 3 0 a

5 6 0 0

12* 10 4h 68 1 0

A S 3 ) 0

2 Q Q

2 3 3 0 a

5 4 11

2 4

9 4 n

v 0

n n

124 33 16 55 1) 0

125

5 2 4 0

0i 7 0 0

p 1 3 0 0

3 5 7 0 0

1 2 6 0 0

0 0 3 0 0

3 4 1 0 0

NOT FOR QUOTATION

PUBLICATION

TARLE 4

COMPARISON OF SELECTED

MAY

RESPONSES IN THE

MAY

15,

1973

NUMPER OF RANKS

AND

AUGUCT

AUGUST 159

SURVEYS

1973

NUMBFR OF RANKS WEAKER UNrHANGED STRONGFR

'TRFNGTH OF DE"AND FOR COMMFPCIAL AND INnljTPTAL LOANS COMPARED TO THREE MONTHS STRONGFP UNCHANGEO wEAKER

AGO

ANTICIPATED DEMAND THREE MONTHS HENCE STRONGER UNCHANGFn

WEAKFQ ANTrcIPATED OEMANd THPFE HONTHS HENCE STRO NGPQ UNCHANGED

WEAKER LFNi)TNr

INTEREST

NONFINANCIAL

HUSINFSSES

RATFS CHARGED FIRMER UNCHANGED EASIFR

COmPrNSATING OR SIUPPRTING RALANCES FI PRFR UNCHANGED EASIE STANnAons OF CRnIT nORTHINESS t FIR AFR UNCHANGED EASIER MATUPTTY OF

TERM LOANS FIRMFR UNCHANGED tASIER

COMPARED

68 PS 2

F'IMER

TO THREE MONTHS 14 13 0

INrHANGED

EASIER

NOT

FOR

PUBLICATION OR QUOTATION

TABLE 4 (CONTINUED) TA~RLF

4 (CnNTNIIED)

MAY 15,

1973

NUMBER OF BANKS WFVIFWTNt, rREDIT

LINES OR

LOAN

APPLICATION

FSTAALISREO) CUS OMFNS FIRFR UNCH ANGE LASIER NEW

CUJSTOMRS FIR'iER UNCHANGED EASIER

LOCAL SERVICE AREA CUSTOMERS EIRMFN UNCHANGED EASIER ARFA CUSTOMERS FIRMER UNCHANGFI) EAIFR

NONLnCAL SERVICE

EACTO~ R FIATIr-Mb TO

APPLICANT

VAt OF AS OEPOSITOW OP SOIkreE OF COLLATERAL ROSINESS FI PMFR UNCHANGFP EASIFR

ITENOEO USE

LENOINC TERMS

AND

INTEREST

OF THF LOAN F IMFR LiNCHANGED EASIER

'INO'ICAFJrIVE"

FI",ANCF

COMPFANIES

CONITIONS: RATFS CHARGFn FIRMFR UNCHAN Fn EASIER

COMPFNSATING OR SUPPORTING RALANCES FIRMER UNCHANGFO EASIFR

AUGUST

15s 1973

NUMBER OF RANKS UNrHANGED FIRMER

EASIkE

NOT

FOR QUOTATION

OR PUBLICATION

TAHLE 4

MAY

(CONTINUED)

15,

1973

NUMFR OF BANKS

AUGUST 1,o

1973

NUMRFR OF RANKS FIRMER UNCHANGED EASIER

LENDING TO "NONCAPTIVE" FINANCE COMPANIES TERMS AND rONDITIONS: ENFORCEMENT OF BALANCE REQUIREMENTS FIRMER UNCHANGED tASIER

19 A6 0

ESTARLISHING NEW OR LARGER CREDIT LINES FIRMFR UNCHANGFD EASIER

70 r5 n

WILLINANESS TO

LFSS

MAKE OTHER TYPFS OF LOANS

TERM LOANS TO BUSINESSES LESS UNCHANGED MORE CONSUMER

INSTALMENT LOANS LESS UNCHANGED MORE

SINGLE FAMILY MORTGAGE LOANS LESS UNCHANGED MORE

54 <R 3

1 111 12

1l 100 4

MULTI-FAMILY MORTGAGE LOANS LESS UNCHANGED MORE

10 9? 0

ALL OTHER MORTGAGE LOANS LESS UNCHANGED MORE PARTICIPATION LOANS WITH CORRESPONDENT LESS UNCHANGED MORE LOANS TO

BROKERS LESS UNCHANGED MORE

RA RANKS ?2 100 1

UNCHANGED

NOT FOR

QUOTATION PUBLICATION OR

TABLE 5 A CROSS-CLASSIFICATION

TaHLF L OF SELECTED RESPONSES

AUG.

15,

1973

NOMnFP OF RiNKS LIA'IOTN(.

NONFINANCIAL

YrlTF,.4ST RATFS

CHAR(Etn INrHANGt.D

rtJSToILRQ FIR14ER ESSENTIALLY

UNCHANOED

k ASIEk VAIUF 1,01uCF

A; A OF

FPOSITON

HUSINFSC

tbSc*NTIALLY E A"IER TO "'NO"CAPTIVl

TI'THOEST

WATES

r0a4PFNSATING

IJNCHANGEI)

FINANCE

CHARuEn F IRiFtR ErsENTIALLY EAC~ER

SUwVFY

AUGUST uGLJqT 15, 15. 1973 1973 NUMHFR OF RANKS ESSFNTIALLY I)NrHANGED EASIER FIRM ER

Cr0PEN'SATINA R4 3 0

OR SUPPORTING HALANCES 0 32 n 6 0 0

FSTAHl ISHED CUSTOMERS 73 37 is 0

JSF

CO"PENSATTNA 40 ONrHANGEO

'UPPOTI'4( PALArNLtS

F I4"FH ESSFNTrALLY E ASIER

INTENOED 71 1b 0

OF THE LOAN 24 14 0

COMPANTIL

OR SUPPORTING, 4ALANC S FIRM*R FSSENTIALLY ONCHANGLD LrslFA

COMPFN',ATINt3 OR

AUGu1ST

COLLATEKAL

F I OfMFk

I tNITNf,

THE

RUSINFSF%

F IR4FR F SENTT NLLY EAlSiER NEW

(INCHAN(iFV

SUPPORTING RaLANcFS 0 0 0

FNFORrFMLNT OF HALANCE '84 T 56 0 00

REQUIRFMENTS

FSTAHLISHING NEW OR LARGER CREDZT LINES 19 2 1 7 26 0 0 00

TABLE 5

NOT FOR QUOTATION OR PUBLICATION

(CONTINUED)

A CROSS-CLASSIFICATION OF SELECTED

AUG. 15,

RESPONSES IN THE

1973

NUMwFR OF BANKS WILLINiNESS TO MAKE TERM LOANS TO

BUSINESSES

SINGLE FAMILY MORTGAGE LOANS LESS ESSENTIALLY UNCHANGED MORE FAMILY MORTGAGE LOANS LESS ESSENTIALLY UNCHANGED MORF

TERM LOANS

AUGUST UGUST 15, 19 1973 1973 OF RANKS NUIMHF ESSFNTIALLY UNCHANGED LFS S

OTHFP TYPES OF LOANS

LESS ESSENTIALLY UNCHANGED MORE

SINGIF

AIJRIIST SURVEY

TO BUSINESSFS LFSS ESSENTIALLY IINCHANbtO MORE

TERM LOANS TO HUSINESSFS LESS ESSENTIALLY MORE

IJNCrANGED

TERM LOANS TO HUSINESSFS LESS ESSENTIALLY UNCHAdNGEn MORE

MATURITY OF TERM LOANS 49 34 9 31 0 1 MULTI-FAMILY ;7 21 1

MORTGAGE 6 33 3

ALL OTHER MORTGAGE 6 7 ?6 27 2 2

0 1 0 LOANS 0 0 0

LOANS 0

0 U

CONSUMER INSTALMENT LOANS 13 68 1 2 34 5 0 0 1 PARTICIPATION LOANS WITH CORRESPONOFNT RANKS 35 4H H 3, 0 1

n 1 0

LOANS TO RROKERS 55 28 14 26 0 1

0 0 n

NOT

FOR

QUOTATION

TABLE 5 (CONTINUED) TAHLF

PUBLICATION OR A

L ( CnNT IN[ IED

SURVEY AUGUST THE IN RESPONSES SELECTED OF CROSS-CLASSIFICATION

AmuiIST

AUG.

15,

OF 1TI41AGTH

T 'jfltiST, I A)

of'-Aii)

k oq rop-4F Hr] AL

L OAN,

AONTWNS AjI.O STRON6'- H ESSENTIALLY ONCHANGED wEAKFR

TIwE F

romPApti

THHFF MONTHS AGO STRONjF ESSENTIALLY UNrHANEID wE AIEH

7nREF

IONTHS

s rNO(l4(14 S St NTI ALL v vL AKE W roMP RH n

rI)

THkLF M0IMTHS

Asn

THkEF

INCHANrItO

ArO

THWFF

-Ij NTI-

ESSkNTIALLY

15 3

12 a

STANDARDS

14.1TURITY

l(I

IIN(H*AN(-L)

TERM 43

NFW

SUPPORTING B4ALANCE$ 0 nI

CREDIT 34 14

WORTHINESS (I

LOANS

CItSTOMFUS

130

0 7

n 0

ESSENTIALLY IINCHANC.ED WLAKFR

COMPI-14tf

CO4PENSATINS

)NC4ANC.I)

MONTHS '10

STRuN(,

INTERFST RATES rHARGED TO NONFINhNrIAL ROSINFSSLS I 4 91 0 ;)25 3 0) 0

C, 1

ElSSNTIALLY IE AK F

romp ARE n

RANKS

NtMMER OF RANKS )SSFNTIALIY IJNrHANGEDI EASIFN FIRM Ew

ANo

COMPNllEO

CrLOPltFI)

UrIJST 15, 1S, 1973 1971 AUGUST

1973

Ni ln, FR

SUwV0 Y

(-lOlNr'APTTVF FINANCE COMPANIES.) FNFORrEPENT OF HALANCE Rk(UIMEMFNTS 5, 40 0 H 19 0

WE AK4

rOMPARLD

TO THREF MONTHS aCO STRoNGFR ESSENTIALLY IJNrhANt4O WFAKFiR

(,IN-ONCAPTIVF FINANCE COMPANIES'$) FSTAHLISHINr NEW OR LARRER CREDIT LINES 78 le 1

NOT FOR OF PUBLICATION QUOTATION

TARLF

4 TABLE (CONuTINIIED) 5 (CONTINUED)

CROSS-CLASSIFICATION OF SELECTED

AUG.

AIiGIIST SURVEY

RESPONSES SURVEY AUGUST THE IN

15,

AUGUST JGOST 15, 1%.1973 1973

1973

NIJM,4FP OF RANKS E9SFNT!ALLY IINcHANGEO

NOM 'FR OF STqFNGTH OF ULMANO INnoSTRIAL LOANS

COMPAPEO

CONPARFO

FOR

COMMERCItL

TO THREP MONTHS AGO STRONGFR ESSENTIALLY UNCHANGED wEAKFN

HANKS

I-Fr'

MOPE

AOD

TNRFF MONTHS AGO 5TRONGFn ESSENrTIALLY UNCHANGEU wEAKER

WILLINGNESS TO MAKF TFuM IOANS TO HUSINESSES Al 26 14 13 1 2

1 0 0

W~ILINGNESC T0 MAKE CONSLIMER INCTALMENT 16 19 O1 25

4 P

n WILLINGNESS

COMPARED

TO THNI-F MONTHS 80(1 SrTRINGI P ESSkNTIALLY IJNirHAA4EOF L wEArNER

COMPARLD

LOANS

1 MAKE

SINGLF FAMIY

ORTGAGE LOANS

WILINGNESS TO MAKE

Co"PARED

THREF MONiTHS AGO STRONGFP ESSENTIALLY IINCHANIGEL tA KEN

THNFE MONTHS AGO STRUNbFR ESSENTIALLY IINCHANGEI) wEAKEH

COMPARED

THREE MONTHS AGO STRONGERP ESSENTIALLY UNCHANbELD WEAKER

2OMpaRFO

rHkEk MONTHS AGO STRONGPR ESsENTIALLY UNCHANGED wEAKER

MUI TI-FAMILY MORTGAGE q L1q *3

LOANS

WIlLINGNESS TO MAKF ALL OTHEN MNkOAGa LO&4S o4 ?4

WILLINGNESS TO HIKE PAITICIPATON LOANS COPkkFPONOENT HANKS 46 4h 7 20

wtILINrNESS TO MAKE LOANS TO RWnKERS

11 p

WITH

In (I

NOT

FOR

QUOTATION PUBLICATION OR

TAHLF r, (CONTINIIED) TABLE 5 (CONTINUED) A CROSS-CLASSIFICATION

OF SELECTED

RESPONSES

AUG. 15,

1973

NUL'FR OF RANKS STL)INIGTH IF )EANI' INnUST0AL LOANAS aNTICTPATFO

FOR COMwERCTAL

nEAhNO IN NEXT 3 MONTH; STRUNF A ESSENTIALLY UNCHANGED wEAKER

J)EMAN) IN NEXT 3 MONTHS S TRUI6 F N ESSENTIALLY lJNrHANGED -N ArEw

APTICIPATET

ANTICIRATti)

SURVEY THE AUGUST SURVFY A116ST

A OAUST

1973

N(JMRF OF RANKS ESSFNTIALLY UNCHANGED FIRM ER

FASIER

DJEMAND IN NEXT I 4ONTHS STNuNbFP ESSENTTALL Y UNCHA'4,LU wEAKEN

ftMANO IN NEXT 3 MONTHS STRONGER ESSENTIaLLY LJNCHANGEIJ .EAKFR

CnoMENSATINr OR SUPPORTING BALANCES 45 1 i

STANDARDS

QEIIANO IN NEAT 3 IONTHS ST8ONGFR ESSENTIALLY ULNCHANGED WEAKFN

OF CREDIT 24

-40 6

MATURTTY '2

TERM LOANS

NP w CUSTOMErS 53 7 49

WORTHINESS 0 0 0

( n

2f)

("AIONCAPTTVF FINANCE COMPANIES') ESTARLISHING NEW OR LARGER CREDIT LINES 51 Q 0 38 15 1 7 4 0

LFSS

ANTIrIRAATEL

AND

ANTICIRATED DEMAND IN NEXT 3 MONTHS STRnN GE SSNIIALLY LNCHANGED %P-AEAF AF TICIPATFI)

ESSENTIALLY INCHANGED

WILLINGNESS TO MAKE TFM IDANS TO RSINESSES 41 18 1 36 18 0 6 5 0

SUPPLEMENTAL APPENDIX B SURVEY OF TIME AND SAVINGS DEPOSITS - JULY 31,

1973

The July 31, 1973, Survey of Time and Savings Deposits (STSD) indicates that a large percentage of insured commercial banks raised their offering rates on all categories of time and savings deposits following the early July change in Regulation Q ceilings. Of those banks offering various classes of deposits, more than two-thirds were offering the ceiling rate on most deposit categories, with the highest proportion of deposits at ceiling rates accounted for by the longer-term deposits (Table 1). A smaller proportion of banks was offering the ceiling rate on passbook accounts, especially among the large banks; this apparently reflected a strategy of attempting to minimize interest costs on the stock of liabilities owned by the least interest-sensitive (or most liquid conscious) depositors, while offering more attractive rates to the more interest-sensitive depositors. However, about 17 per cent of sample banks planned to increase offering rates on deposits after the July 31 date of the survey, including higher rates on passbook accounts (Table 2). Only 38 per cent of insured commercial banks were issuing the new four year certificates exempt from Regulation Q ceilings (Table 3). Even though over 75 per cent of the larger banks were issuing these certificates, the 35 per cent of the banks with total deposits of less than $100 million issuing four year certificates were able to attract

40 per cent of the total amount of such deposits issued (Table 4).

The

relatively greater inflows at the smaller banks may reflect their higher offering rates. While banks with deposits over $100 million offered, on average, 7.165 per cent in four year certificates, the smaller banks' average offering rate was 7.244 per cent; these higher rates were probably designed to offset the competitive edge of the larger banks. Table 5 compares offering rates on the four year certificates at all insured commercial banks to FDIC-insured mutual savings banks and a sample of savings and loan associations. As indicated in the upper panel, while only 5 per cent of commercial banks were offering over 7.5 per cent, almost 17 per cent of the savings banks and 10 per cent of a sample of large S&L's were offering over this rate. As noted in the lower panel, the commercial banks offering over 7.5 per cent accounted for less than 10 per cent of all the four year certificates issued by commercial banks; at the FDIC-insured mutual savings banks, institutions offering over 7.5 per cent accounted for over 40

per cent of the outstanding four year certificates of savings banks at the end of July. Comparable data are not available for S&L's.

Prepared by Steven M. Roberts, Economist, Banking Section, Division of Research and Statistics.

- B2 -

In the three months ended July 31, 1973 (covering the period since the last STSD survey), all commercial banks gained $3.5 billion of small denomination time and savings deposits, IPC (Table 6); the table excludes the inflow of over $12 billion of time deposits in denomination of over $100,000 at insured commercial banks. All of the gain in small denomination deposits was at smaller banks; larger banks lost small denomination deposits in this period as their more interestsensitive deposits shifted to market securities.1/ In the three month period ending July 31, banks of all sizes apparently had massive conversions of shorter-term certificates (line 3a) to longer-term certificates (line 3b)--mostly the new four year certificate (line 3c). GEOGRAPHICAL DISTRIBUTION Table 7 to 10 provides STSD data by Federal Reserve District. Table 7 suggests the proportion of banks offering ceiling rates was similar in all districts except Minneapolis. The Boston, Atlanta, and San Francisco districts had the largest proportion of banks offering four year certificates. Table 8 indicates that San Francisco banks were offering the lowest average rates on four year certificates and Atlanta banks the highest average rate on such deposits. Table 9 also indicates that Atlanta, Boston, Chicago, and Dallas had the largest number of banks offering over 7.5 per cent on four year certificates. Finally, Table 10 indicates that 60 per cent of all outstanding four year certificates outstanding at the end of July were at banks in the Atlanta, Chicago, New York and Philadelphia Districts.

In August, after the date of the survey, these large banks again lost funds. From August 1 through August 29, the 328 weekly reporting banks had a net decrease in consumer type time and savings

deposits of $134 million.

Their savings deposits continued to

decline (by $1,056 million), but their IPC small-denomination time deposits rose by $922 million; this latter increase reflected four year certificate growth of $1,008 million.

STSD Special Table 1 Regulation Q Ceiling Changes and the Percentage of Issuing Banks Paying New Ceiling Rates on Small Denomination Time and Savings Deposits by Bank Size as of July 31. 1973

Regulation Q Ceilings

Percentage of Issuing Banks at New Q Ceilings (b) Deposits of 100-500 500 Million million or more

With Total

New

Total

less than 100 million

4.5

5.0

63.8

63.9

65.3

55.1

90 Days to 1 year

5.0

5.5

65.9

65.7

72.5

69.7

1 to 2-1/2 years

(a)

6.0

65.9

65.5

74.8

73.8

2-1/2 to 4 years

(a)

6.5

85.8

85.9

86.1

80.2

Maturity Savings

Old

Time Deposits:

(a) 5.5 % for Deposits 1 to 2 years and 5.75%forDeposits 2 years or more. (b) Memo:

See Table 3 for number of issuing banks. A significant number of banks in the STSD sample expected to make rate changes to the new Q Ceilings effective after the Survey date. Their responses are summarized in Table 2 and are not included in the above data.

Preliminary.

2 STSD SPECIAL TABLE Sample Banks Reporting Changes in Maximum Interest Rates Offered on Various Classes of Time and Savings Deposits to be Effective After the Survey Date, July 31, 1973 (Number of Banks in sample which Reported) ~

FEDERAL RESERVE DISTRICT

Number of Banks

Rates to Be Increased to Q Ceiling DI nonmnat-nn -------------

Responding

Savings

Less than one year

-r-Member Banks Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco

less than

One to 2-112 vears

T10.T00

2-1/2 to 4 vpyear

Four Years or Over Denomination of $1.000 to $100.000

4 1

New Offering ----

Increase RateE _-;;i

Decrease ~---I

7 25 10 7 7 18 23 5 14 4 5 11

hnemmer Total

284

111

136

144

Non Member

124

To al

408

192

228

243

169

Rates

STSD Special Table 3 Number and Percentage of Insured Commercial Banks Issuing Small Denominations Time and Savings Deposit by Deposit Maturity and Bank Size as of July 31, 1973 With Total Deposits of

Total Maturity Snvings

t anks I, suing

ior cent of Total

less ta" ,11 l M. nn

100-5D0 m.. m.linn

500 million or more

# Banks Tsnn,,n

Per cent nf Tntal

f# Banks Tasutino

Per cent f Total

# Banks T-Ranin

Per cent of Total

13,575

97.7

12,853

97.6

544

99.5

178

100.0

90 days to 1 year

13,142

94.5

12,419

94.2

545

99.8

178

100.0

1 to 2-1/2 years

13,160

94.7

12,446

94.5

539

98.7

175

98.3

2-1/2 to 4 years

8,067

58.0

7,437

56.5

467

85.5

162

91.0

5,249

37.8

4,689

35.6

419

76.7

140

79.1

Time Deposits:

r'enrs or over

$1,000 minimum

Total Number of Banks

Preliminary.

13,901

13,177

546

178

STSD SPECIAL TABLE 4 Frequency Distribution of Interest Rates Being Paid, and Amount Outstanding of Small Denomination Time Deposits With Original Maturity of Four Years or Over at All Insured Commercial Banks by Size

as of July 31, 1973

(Millions of dollars, not seasonally adjusted) WITH TOTAL DEPOSITS OF

Less than Rate Class (per cent)

Those not Issuing 5.500 or less 5.501 to 6,000 6.001 6,501 6.751 7.001 7.251 7.501 7.751 8,001 8.251

to to to to to to to to to

6,500 6,750 7.Q00 7,250 7.500 7.750 8,000 8.250 8,500

8.501 to 8,750 8.751 to 9,000 Total those issuing Memo: Average issuing rate

Total # Bank Amount Banks

100-500

100 million Amount Banks

500 million

million Amount Banks

or more # #Banks Amount Amount

8,651

8,488

127

38 103

55 132

29 85

15 8

5 14

13 68

5 5

27 56

97 77 2,982 522 1,146 67 197 3 14

92 11 1,262 371 1,081 27 180 35 57

67 71 2,702 448 1,030 60 184 0 11

63 8 528 123 412 22 122 0 4

22 5 208 52 89 5 13 2 3

25 3 263 82 200 4 51 16 53

8 0 71 21 27 1 1 1 0

4 0 471 166 469 1 7 19 0

0 6

0 2

0 6

0 0

3,309

4,689

1,311

419

779

140

00 2 5,249

7.197

Includes those banks which are no longer issuing. Preliminary.

7.244

7.196

7.146

1,219

B7 -

Table

Percentage Distribution of Offering Rates and Amounts at Commercial Banks, Mutual Savings Banks, and Savings and Loan Association (As of July 31, 1973)

Offering Rates

Insured Commercial

332 FDIC-Insured Mutual Savings Banks

Banks

(Per Cent)

Sample of 273 1/ Savings & Loan Associations-

( Number of Institutions ) Under 7.0 7.0 7.25 7.50 7. 75 8.00 or more

13. 9 48.9 9.9 21. 8 1.3 4.2

Total

Memo: Percentage of Institutions

9.8 46.5 11.0 14. 1 14. 1 2.7

40. 0 21 0 30.0 4.0 6.0

100.0

100 0

38.7

57.4

n.a.

offering 4 year certificates (Amount Outstanding)

44.7 18. 1 11.2 32. 7 0.8 8.4

'nder 7.0 7.0 7.25 7.50 7.75 8.00 or more

2.3 7.4 35. 1 5.7

100. 0

Total

n. a. n. a. n.a. n.a. n.a. n.a.

6.2 43.3

n. a.

100.0

Memo:

Dol'ar Current Outstand ini 1/

samp.

accounting

3.3 billion for 38 per cent

2.0 billion

of Savings and Loan deposits.

1.4 billion

- B8 -

Table 6 Net Changes in

Small Denominations IPC Time and Savings Deposits at all Insured Commercial Banks April 30, 1973 to July 31, 1973

(Million of Dollars, Not Seasonally adjusted)

Deposit Class

Total

Banks with Deposits of less than $100-$500 $100 million million

$500 million and over

1. Total IPC Time and Savings Deposits in Denominations of less than $100,000

3 553

2. 3.

1,786 1,761

2,387 1,639

-311

-3,173 4,940

-904 2 543

-545 998

-1,725 1,399

3,322

1,311

779

1,232

3a. 3b. 3c.

SAVINGS (Total) TIME DEPOSITS With Original Maturity of: less than 1'year 1 year or more Memo: 4 year certificates included in line 3b 1/

-616

453

-290 -326

1/ Four-year certificates are outstandings as of July 31. Weekly Reporting bank data suggest that about $600 million of these deposits were outstanding as of the end of June prior to the change in Regulation Q. * Preliminary.

STSD Special Table 7 Number of Banks Issuing and Of Those Banks , Per cent Which are at New Q Ceiling Rates By Districts July 31, 1973

Districts

Total # Banks in Districts

Savings # Banks 7 Issuing Issuing at Ceilin

90 Days to 1 Year # Banks % Issuing suing tIssuing Ce ng

SI I to 2-1/2 years # Banks 7% Issuing at Ceiling

2-1/2 to 4 Years # Banks % Issuing Issuing at Cpiling

4 Yes # Banks Issuing

or Moe (1000 % of Total

Boston

378

370

82.6

332

56.9

258

54 3

195

76 4

224

59 3

New York

506

503

52.7

504

49.0

476

50.6

334

62.0

213

42.1

Philadelphia

425

30.8

374

46.0

377

41.9

209

73.2

187

44 0

Cleveland

774

772

57.9

718

54.5

711

46.8

466

88.4

329

42 5

Richmond

747

70.3

654

75 2

690

76.8

401

88.8

260

34 8

Atlanta

1,764

63.2

1,709

73.7

1,655

74.6

1,122

89.5

1,051

59 6

Chicago

2,619

61.7

2,465

70.8

2,550

69.4

1,727

84.8

1,135

43 3

St.

1,398

1,290

62.5

1,340

75.1

1,343

72 9

714

95 0

348

Minneapolis

1,383

1,374

33.5

1,286

24.6

1,383

28.5

439

54.0

134

9 7

Kansas City

2,118

1,970

80.5

2,030

75 1

2,048

80.4

1,215

93.0

708

33 4

Dallas

1,390

1,341

93.1

1,352

78.8

1,296

75,5

936

92 2

426

30.6

398

59 3

377

67.9

377

72.7

316

84.8

234

58 8

13,900

13,573

63 8

13,141

65.9

13,164

65 9

8,074

85.8

5,249

Louis

San Francisco All Insured Commercial _/

There is no ceiling on rates for deposits ot four years or more with minimum denominations of $1,000. of deposits and the percentage of banks represented, regardless of issuing rates, are presented Preliminary.

24.9

37.8

The number of banks issuing these types

u .i/ ainimumY

STSD Special Table 8 Frequency Distribution of Interest Rates Being Paid and Amount Outstanding of Small Denomination Time Deposits with Original Maturity of Four Years or Over at all Insured Commercial Banks by Federal Reserve Districts

as of July 31, 1973 not seasonally adjusted)

(Millions of dollars, Federal

6.500 or less

Reserve

No.

District

Banks

Boston New York

6.501-7.000

7.001-7.250 Banks

Amt.

Banks

Amt.

12 44

21 91

35 119

17 86

85 25

7.251-7.500

No.

Amt. 19 41

7.501-8.000

Amt.

Banks

Att.

45 21

30 160

46 2

13 3

Banks

Over 8.001

Total

Avg.

No.

Amt.

Rate

Aml.

Bank

1 1

9 19

224 213

109 400

7.04 7.01

Banks

Philadelphia

103

186

187

356

7.22

Cleveland

264

159

329

290

7.14

Richmond Atlanta

5 54

7 54

124 451

14 148

48 185

49 143

75 261

87 110

8 90

9 82

0 11

0 66

260 1051

166 604

7.30 7.31

Chicago St. Louis

10 0

2 0

696 294

376 45

102 16

58 11

269 37

185 19

54 1

43 1

2 0

1 0

1135 348

664 76

7.22 7.17

Minneapolis

134

7.22

Kansas City

530

137

122

708

210

7.15

Dallas San Francisco

33 7

43 18

183 197

18 146

16 6

19 3

147 20

107 16

44 4

9 7

4 0

426 234

199 190

7.21 6.97

238

279

3057

1272

522

372

1147

1081

264

207

5249

3309

TOTAL Preliminary.

STSD Special Table 9 * Percentage Distribution of Interest Rates Being Paid and Amount Outstanding of Small Denomination Time Deposits with Original Maturity of Four Years or Over at all Insured Commercial Banks by Federal Reserve Districts as of July 31, 1973 Federal Reserve District

Boston New York

6.500 or less No. Amt. Banks

6.501-7.000 No. Amt. Banks

7.001-7.250 No. Amt Banks

Over 8.001 7.251-7.500 -7.501-8.000 No. No. No. Amt. Banks Amtt Banks Banks Amt.

5.4 20.7

19.3 22.8

15.6 55.9

15.6 21.5

37.9 11.7

17.4 10.3

20.1 9.9

27.5 40.0

20.5 0.9

11.9 0.8

Philadelphia Cleveland

6.4 7.9

8.4 3.8

47.1 80.2

28.9 54.8

0.5 1.8

2.5 3.8

43.9 8.2

52.2 34.1

2.1 1.9

Richmond Atlanta

1.9 5.1

4.2 8.9

47.7 42.9

8.4 24.5

18.5 17.6

29.5 23.7

28.8 24.8

52.4 18.2

Chicago St. Louis

0.9 0

0.3 0

61.3 84.5

56.6 59.2

9.0 4.6

8.7 14.5

23.7 10.6

27.9 25.0

Total No. Amt. Banks

0.5 0.9

8.3 4.6

100.0 100.0

8.0 3.5

0 0

100.0 100.0

3.1 8.6

5.5 13.6

0 1.0

0 11.1

100.0 100.0

4.8 0.3

6.5 1.3

0.3 0

0.2 0

100.0 100.0

Minneapolis

56.7

52.3

12.7

9.1

30.6

38.6

100.0

Kansas City

4.9

1.0

74.9

65.2

2.1

2.4

17.2

30.5

0.9

100.0

Dallas San Francisco

7.7 3.0

21.6 9.5

43.0 84.2

9.0 76.8

3.8 2.6

9.5 1.6

34.5 8.5

53.8 8.4

10.3 1.7

4.5 3.7

0.7 0

1.6 0

100.0 100.0

100.0 100,0

TOTAL

4.5

8.4

58.2

38.4

9.9

11.2

21.9

32.7

5.0

6.3

0.5

3.0

100.0

Preliminary.

STSD SPECIAL TABLE 10* Small Denomination Time Deposits With Original Maturity of Four Years or Over Number of Banks Offering and Amount Outstanding - Insured Commrcial Banks by Federal Reserve District and Deposit Size as of July 31, 1973 (Millions of dollars, not seasonally adjusted) WITH TOTAL DEPOSITS OF Federal Reserve

District

Total

# Banks

Less than

100-500

100 million

million

500 million or more

Amount

# Banks

Amount

# Banks

Amount

# Banks

Amount

224 213

109 400

188 136

34 32

30 53

34 120

8 24

41 247

Philadelphia

187

356

138

127

172

Cleveland

329

290

281

168

Boston Now York

260

166

217

Atlanta

1,051

604

988

333

185

Chicago St. Louis

1,135 348

664 76

1,036 330

293 58

78 13

124 5

20 5

247 14

Minneapolis Kansas City

134 708

44 210

123 677

21 186

7 26

9 19

3 5

14 5

Dallas San Francisco

426 234

199 190

396 180

147 29

27 32

23 25

3 22

29 135

5,249

3,309

4,689

1,311

419

779

141

1,219

Richmond

Total Preliminary.

Cite this document

APA

Federal Reserve (1973, September 17). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19730918_part3

BibTeX

@misc{wtfs_greenbook_19730918_part3,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1973},
  month = {Sep},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19730918_part3},
  note = {Retrieved via When the Fed Speaks corpus}
}