H.4.1 Factors Affecting Reserve Balances of Depository Institutions

For Release at 4:30 P.M. Eastern time December 19, 2002 The H.4.1 Statistical Release (“Factors Affecting Reserve Balances of Depository Institutions and Condition Statement of Federal Reserve Banks”) has been reformatted to accommodate the Federal Reserve’s switch from arranging matched sale-purchase transactions to arranging reverse repurchase agreements. The Federal Reserve began using reverse repurchase agreements, instead of matched sale-purchase transactions, on December 13. Reverse repurchase agreements—sales of securities under agreements to repurchase—are fundamentally equivalent to matched sale-purchase transactions, and they are commonly used in financial markets. Like matched sale-purchase transactions, reverse repurchase agreements will be arranged with foreign official and international accounts and with primary dealers. The accounting treatment of reverse repurchase agreements differs from that of matched sale-purchase transactions. Matched sale-purchase transactions were accounted for as an outright sale, and the securities sold under these agreements were removed from securities held outright. In contrast, reverse repurchase agreements are accounted for as financing transactions in which the securities pledged remain in total outright holdings of securities by the Federal Reserve Banks, and a liability is recognized until the transaction matures. For the week ended December 18, the weekly average data for Treasury bills held outright incorporate the depressing effect of the matched sale-purchase transaction arranged on December 12 and the shift to reverse repurchase agreements for the remaining days in the statement week. One-week and one-year changes shown in table 1 and in table 2 for Treasury bills held outright and other measures that include these holdings are quite large relative to typical movements because of the accounting changes.

FEDERAL RESERVE statistical release H.4.1 Factors Affecting Reserve Balances of Depository Institutions and Condition Statement of Federal Reserve Banks December 19, 2002 1. Factors Affecting Reserve Balances of Depository Institutions Millions of dollars Reserve Bank credit, related items, and Averages of daily figures reserve balances of depository institutions Week ended Change from week ended Wednesday at Federal Reserve Banks Dec 18, 2002 Dec 11, 2002 Dec 19, 2001 Dec 18, 2002 Reserve Bank credit 692,654 + 21,905 + 65,300 698,649 Securities held outright 626,479 + 16,564 + 72,238 629,407 U.S. Treasury1 626,469 + 16,564 + 72,238 629,397 Bills2 223,757 + 16,558 + 37,582 226,682 Notes and bonds, nominal2 389,219 0 + 31,813 389,219 Notes and bonds, inflation-indexed2 12,242 0 + 2,531 12,242 Inflation compensation3 1,250 + 5 + 311 1,253 Federal agency2 10 0 0 10 Repurchase agreements4 28,179 + 6,179 - 8,414 30,000 Loans to depository institutions 55 - 154 + 8 45 Adjustment credit 6 - 158 - 6 2 Seasonal credit 49 + 3 + 14 43 Extended credit 0 0 0 0 Float -61 - 1,535 - 791 994 Other Federal Reserve assets 38,003 + 853 + 2,261 38,202 Gold stock 11,043 0 - 2 11,043 Special drawing rights certificate account 2,200 0 0 2,200 Treasury currency outstanding5 34,469 + 14 + 1,471 34,469 Total factors supplying reserve funds 740,365 + 21,918 + 66,768 746,360 Currency in circulation5 675,416 + 1,126 + 44,989 678,678 Reverse repurchase agreements6 18,202 + 18,202 + 18,202 21,905 Foreign official and international accounts 18,202 + 18,202 + 18,202 21,905 Dealers 0 0 0 0 Treasury cash holdings 370 - 6 - 70 360 Deposits with F.R. Banks, other than reserve balances 17,217 + 2,210 + 1,707 17,880 U.S. Treasury, general account 5,959 + 1,852 + 95 6,595 Foreign official 148 + 10 - 142 172 Service-related 10,900 + 346 + 1,766 10,900 Required clearing balances 10,450 + 168 + 1,869 10,450 Adjustments to compensate for float 450 + 177 - 103 450 Other 210 + 2 - 11 213 Other liabilities and capital 20,203 + 404 + 2,237 19,907 Total factors, other than reserve balances, absorbing reserve funds 731,409 + 21,937 + 67,066 738,729 Reserve balances with Federal Reserve Banks 8,957 - 18 - 297 7,631 Memo (off-balance-sheet items): Marketable securities held in custody for foreign official and international accounts2,7 846,299 + 10,830 . . . 847,705 U.S. Treasury 685,293 + 5,307 . . . 685,673 Federal agency 161,005 + 5,522 . . . 162,032 Securities lent to dealers 151 + 98 - 2,775 675 Note: Components may not sum to totals because of rounding. . . . not available. 1. Includes securities lent to dealers, which are fully collateralized by other U.S. Treasury securities. Daily average data for U.S. Treasury bills held outright were net of $ 2,926 million in matched sale-purchase transactions, all of which were with foreign official and international accounts. No matched sale-purchase transactions were outstanding on the Wednesday statement date. 2. Face value of the securities. 3. Compensation that adjusts for the effects of inflation on the original face value of inflation-indexed securities. 4. Cash value of agreements, which are collateralized by U.S. Treasury and federal agency securities. 5. Estimated. 6. Cash value of agreements, which are collateralized by U.S. Treasury securities. 7. Includes U.S. Treasury STRIPS and other zero coupon bonds at face value. Sources: Federal Reserve Banks and the U.S. Department of the Treasury.

H.4.1 2. Consolidated Statement of Condition of All Federal Reserve Banks Millions of dollars Change since Eliminations from Assets, liabilities, and capital consolidation Wednesday Wednesday Wednesday Dec 18, 2002 Dec 11, 2002 Dec 19, 2001 Assets Gold certificate account 11,039 0 - 6 Special drawing rights certificate account 2,200 0 0 Coin 1,035 + 3 - 44 Securities, repurchase agreements, and loans 659,452 + 18,624 + 66,114 Securities held outright 629,407 + 20,450 + 73,813 U.S. Treasury1 629,397 + 20,450 + 73,813 Bills2 226,682 + 20,444 + 40,198 Notes and bonds, nominal2 389,219 0 + 30,765 Notes and bonds, inflation-indexed2 12,242 0 + 2,531 Inflation compensation3 1,253 + 6 + 318 Federal agency2 10 0 0 Repurchase agreements4 30,000 - 750 - 7,700 Loans 45 - 1,076 + 1 Items in process of collection (1,219) 8,800 - 1,316 - 301 Bank premises 1,534 + 2 + 16 Other assets5 36,540 + 661 + 1,013 Total assets (1,219) 720,601 + 17,976 + 66,794 Liabilities Federal Reserve notes, net of F.R. Bank holdings 645,599 + 3,155 + 42,663 Reverse repurchase agreements6 21,905 + 21,905 + 21,905 Deposits (0) 24,923 - 6,948 + 148 Depository institutions 17,943 - 8,082 + 1,171 U.S. Treasury, general account 6,595 + 1,089 - 579 Foreign official 172 + 33 - 450 Other (0) 213 + 12 + 5 Deferred availability cash items (1,219) 8,266 - 257 - 132 Other liabilities and accrued dividends7 2,418 - 33 - 187 Total liabilities (1,219) 703,111 + 17,821 + 64,397 Capital accounts Capital paid in 8,376 + 17 + 1,021 Surplus 7,312 0 + 587 Other capital accounts 1,802 + 138 + 790 Total capital 17,489 + 154 + 2,396 Note: Components may not sum to totals because of rounding. 1. Includes securities lent to dealers, which are fully collateralized by other U.S. Treasury securities. 2. Face value of the securities. 3. Compensation that adjusts for the effects of inflation on the original face value of inflation-indexed securities. 4. Cash value of agreements, which are collateralized by U.S. Treasury and federal agency securities. 5. Includes assets denominated in foreign currencies, which are revalued daily at market exchange rates. 6. Cash value of agreements, which are collateralized by U.S. Treasury securities. 7. Includes exchange-translation account reflecting the daily revaluation at market exchange rates of foreign exchange commitments. 3. Maturity Distribution of Loans and Securities, December 18, 2002 Millions of dollars U.S. Treasury Federal agency Reverse securities1 securities Repurchase Maturity Loans repurchase Weekly Weekly agreements2 Holdings Holdings agreements2 changes changes Within 15 days 43 47,253 + 27,298 0 0 23,000 21,905 16 days to 90 days 3 134,262 - 7,573 0 0 7,000 0 91 days to 1 year 0 140,816 + 719 10 + 10 . . . . . . Over 1 year to 5 years . . . 173,935 0 0 - 10 . . . . . . Over 5 years to 10 years . . . 53,295 + 2 0 0 . . . . . . Over 10 years . . . 79,836 + 3 0 0 . . . . . . All 45 629,397 + 20,450 10 0 30,000 21,905 Note: Components may not sum to totals because of rounding. . . . Not applicable. 1. Includes the original face value of inflation-indexed securities and compensation that adjusts for the effects of inflation on the original face value of such securities. 2. Cash value of agreements classified by remaining maturity of the agreements.

H.4.1 4. Statement of Condition of Each Federal Reserve Bank on December 18, 2002 Millions of dollars Kansas San Assets, liabilities, and capital Total Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis City Dallas Francisco Assets Gold certificate account 11,0 3 9 5 3 3 4,3 6 4 4 3 0 5 2 2 8 1 9 9 2 6 1,0 8 0 3 4 6 1 7 9 3 0 9 4 8 5 1,046 Special drawing rights certificate acct. 2,2 0 0 1 1 5 8 7 4 8 3 1 0 4 1 4 7 1 6 6 2 1 2 7 1 3 0 6 6 9 8 234 Coin 1,0 3 5 4 8 3 4 6 3 4 7 1 4 7 1 1 1 1 3 1 6 1 3 7 6 9 1 6 8 119 Securities, repurchase agreements, and loans 659,4 5 2 36,0 6 2 277,6 4 7 24,2 0 2 34,7 2 7 49,0 8 9 44,8 2 2 74,0 7 1 22,3 9 3 9,8 4 8 18,6 1 5 13,9 7 3 54,001 Securities held outright 629,4 0 7 36,0 6 2 247,6 4 7 24,2 0 2 34,7 2 7 49,0 8 9 44,8 1 6 74,0 6 9 22,3 8 0 9,8 3 9 18,6 0 5 13,9 6 9 54,001 U.S. Treasury1 629,3 9 7 36,0 6 1 247,6 4 3 24,2 0 2 34,7 2 7 49,0 8 8 44,8 1 6 74,0 6 8 22,3 8 0 9,8 3 9 18,6 0 5 13,9 6 8 54,000 Bills2 226,6 8 2 12,9 8 8 89,1 9 1 8,7 1 7 12,5 0 7 17,6 8 0 16,1 4 1 26,6 7 6 8,0 6 0 3,5 4 4 6,7 0 1 5,0 3 1 19,448 Notes and bonds3 402,7 1 5 23,0 7 3 158,4 5 3 15,4 8 6 22,2 2 0 31,4 0 9 28,6 7 5 47,3 9 2 14,3 2 0 6,2 9 5 11,9 0 4 8,9 3 8 34,551 Federal agency2 1 0 1 4 0 1 1 1 1 0 0 0 0 1 Repurchase agreements4 30,0 0 0 0 30,0 0 0 0 0 0 0 0 0 0 0 0 0 Loans 4 5 0 0 0 0 0 6 2 1 3 9 1 0 5 1 Items in process of collection 10,0 1 9 5 4 1 1,0 7 1 5 2 0 5 8 5 9 3 4 9 5 0 4 8 9 6 3 1 4 8 6 6 4 7 3 3 2 2,833 Bank premises 1,5 3 4 9 1 1 8 5 4 9 1 5 2 1 3 0 2 7 9 1 1 6 4 3 1 2 6 5 0 1 4 0 173 Other assets5 36,5 4 0 1,9 0 7 12,7 7 6 1,1 6 2 2,4 7 3 5,4 4 3 2,4 4 4 3,7 3 8 9 6 0 6 2 6 9 5 1 8 0 0 3,261 Interdistrict settlement account 0 - 6,1 9 2 +29,3 0 5 - 5,2 4 3 - 5,5 5 5 - 1,9 9 1 - 4,0 5 9 -16,0 2 5 - 3,5 4 0 + 4,0 0 4 - 2,7 6 5 +13,8 2 9 - 1,768 Total assets 721,8 2 0 33,1 0 5 326,2 5 5 21,2 6 6 33,0 5 6 54,7 1 8 45,6 4 0 63,8 1 2 20,9 6 5 15,3 3 5 17,9 4 2 29,8 2 4 59,900 Note: Components may not sum to totals because of rounding. 1. Includes securities lent to dealers, which are fully collateralized by other U.S. Treasury securities. 2. Face value of the securities. 3. Includes the original face value of inflation-indexed securities and compensation that adjusts for the effects of inflation on the original face value of such securities. 4. Cash value of agreements, which are collateralized by U.S. Treasury and federal agency securities. 5. Includes assets denominated in foreign currencies, which are revalued daily at market exchange rates.

H.4.1 4. Statement of Condition of Each Federal Reserve Bank on December 18, 2002 (continued) Millions of dollars Kansas San Assets, liabilities, and capital Total Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Dallas City Francisco Liabilities Federal Reserve notes outstanding 762,43 5 33,2 8 0 330,8 9 6 25,5 9 9 32,8 6 1 54,7 6 8 58,8 5 1 64,8 7 3 22,1 8 1 15,1 5 7 20,0 9 1 36,7 0 3 67,177 Less: notes held by F.R. Banks 116,83 6 4,6 7 4 28,2 8 6 7,4 5 1 4,7 7 2 9,8 8 9 18,1 8 9 8,6 5 4 3,4 9 0 1,9 9 8 4,2 4 9 9,0 2 8 16,156 Federal Reserve notes, net 645,59 9 28,6 0 5 302,6 0 9 18,1 4 9 28,0 8 9 44,8 7 9 40,6 6 2 56,2 1 9 18,6 9 1 13,1 5 9 15,8 4 2 27,6 7 4 51,021 Reverse repurchase agreements1 21,90 5 1,2 5 5 8,6 1 9 8 4 2 1,2 0 9 1,7 0 8 1,5 6 0 2,5 7 8 7 7 9 3 4 2 6 4 8 4 8 6 1,879 Deposits 24,92 3 1,5 1 3 9,4 3 9 1,1 9 0 1,5 9 0 2,9 3 0 1,3 0 1 2,1 7 7 6 2 5 4 1 2 5 1 4 7 0 7 2,525 Depository institutions 17,94 3 1,5 0 9 2,5 4 6 1,1 8 8 1,5 8 6 2,8 7 1 1,2 9 8 2,1 7 3 6 2 3 4 1 1 5 1 2 7 0 4 2,521 U.S. Treasury, general account 6,59 5 0 6,5 9 5 0 0 0 0 0 0 0 0 0 0 Foreign official 17 2 2 1 4 8 1 3 7 2 3 1 1 1 1 3 Other 21 3 2 1 4 9 1 2 5 1 1 1 1 0 1 3 1 Deferred availability cash items 9,48 5 6 7 2 1,0 0 5 4 7 1 5 7 1 6 9 3 8 6 4 7 9 8 3 4 7 6 7 8 4 2 4 4 7 9 2,483 Other liabilities and accrued dividends2 2,41 8 1 4 6 7 3 8 1 0 5 1 4 3 2 6 3 1 9 3 2 5 5 1 0 4 8 3 9 6 9 1 200 Total liabilities 704,33 0 32,1 9 1 322,4 1 0 20,7 5 7 31,6 0 1 50,4 7 3 44,5 7 9 62,0 2 8 20,5 4 5 14,6 7 5 17,5 2 4 29,4 3 8 58,109 Capital Capital paid in 8,37 6 4 3 6 1,8 0 1 2 4 2 7 0 2 2,0 7 3 4 7 5 8 5 1 1 9 9 3 4 0 2 0 1 1 8 6 870 Surplus 7,31 2 4 1 8 1,5 0 4 2 2 1 6 6 5 1,7 5 7 5 3 5 7 9 3 1 4 9 1 1 8 1 9 1 1 6 4 796 Other capital 1,80 2 5 9 5 4 1 4 6 8 8 4 1 5 5 1 1 4 0 7 2 2 0 2 2 6 3 7 126 Total liabilities and capital 721,82 0 33,1 0 5 326,2 5 5 21,2 6 6 33,0 5 6 54,7 1 8 45,6 4 0 63,8 1 2 20,9 6 5 15,3 3 5 17,9 4 2 29,8 2 4 59,900 Note: Components may not sum to totals because of rounding. 1. Cash value of agreements, which are collateralized by U.S. Treasury securities. 2. Includes exchange-translation account reflecting the daily revaluation at market exchange rates of foreign exchange commitments. 5. Collateral Held against Federal Reserve Notes: Federal Reserve Agents' Accounts Millions of dollars Wednesday Federal Reserve notes and collateral Dec 18, 2002 Federal Reserve notes, net of F.R. Bank holdings 645,599 Collateral held against Federal Reserve notes 645,599 Gold certificate account 11,039 Special drawing rights certificate account 2,200 U.S. Treasury and agency securities pledged1 632,361 Other eligible assets 0 Memo: Total U.S. Treasury and agency securities1 659,407 Less: face value of securities under reverse repurchase agreements 21,913 U.S. Treasury and agency securities eligible to be pledged 637,494 Note: Components may not sum to totals because of rounding. 1. Includes face value of U.S. Treasury and agency securities held outright, compensation to adjust for the effects of inflation on the original face value of inflation-indexed securities, and cash value of repurchase agreements.