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https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Collection: Paul A. Volcker Papers Call Number: MC279 Box 13 Preferred Citation: Congressional Correspondence, 1986 March-April; Paul A. Volcker Papers, Box 13; Public Policy Papers, Department of Rare Books and Special Collections, Princeton University Library Find it online: http://finclingaids.princeton.edu/collections/MC279/c310 and https://fraser.stlouisfed.org/archival/5297 The digitization ofthis collection was made possible by the Federal Reserve Bank of St. Louis. From the collections of the Seeley G. Mudd Nlanuscript Library, Princeton, NJ These documents can only be used for educational and research purposes ("fair use") as per United States copyright law. By accessing this file, all users agree that their use falls within fair use as defined by the copyright law of the United States. They further agree to request permission of the Princeton University Library (and pay any fees, if applicable) if they plan to publish, broadcast, or otherwise disseminate this material. This includes all forms of electronic distribution. Copyright The copyright law of the United States (Tide 17, United States Code) governs the making of photocopies or other reproductions of copyrighted material. Under certain conditions specified in the law, libraries and archives are authorized to furnish a photocopy or other reproduction. One of these specified conditions is that the photocopy or other reproduction is not to be "used for any purpose other than private study, scholarship or research." If a user makes a request for, or later uses, a photocopy or other reproduction for purposes not permitted as fair use under the copyright law of the United States, that user may be liable for copyright infringement. Policy on Digitized Collections Digitized collections are made accessible for research purposes. Princeton University has indicated what it knows about the copyrights and rights of privacy, publicity or trademark in its finding aids. However, due to the nature of archival collections, it is not always possible to identify this information. Princeton University is eager to hear from any rights owners, so that it may provide accurate information. When a rights issue needs to be addressed, upon request Princeton University will remove the material from public view while it reviews the claim. Inquiries about this material can be directed to: Seeley G. Mudd Manuscript Library 65 Olden Street Princeton, NJ 08540 609-258-6345 609-258-3385 (fax) mudd@princeton.edu https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BOARD OF GOVERNORS OF THE . FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 205SI April 30, 1986 PAUL A. VOLCKER CHAIRMAN The Honorable Rudy Boschwitz United States Senate 20510 Washington, D.C. Dear Rudy: Thank you for your letter of April 15 on behalf of Mr. Belay F. Bakonyi regarding his interest in employment with the Federal Reserve Board. Mr. Let for the I have asked our Division of Personnel to contact Bakonyi directly about their review of his qualifications. me assure you that he will be given careful consideration all appropriate positions which are to be filled now or in near future. We appreciate having your recommendation on behalf of Mr. Bakonyi. Sincerely, ril-tALI k),4_ KW:CO:pte (V-98, 86-2015) bcc: Ms. Warehime Mrs. Mallardi (2).- https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis % PETE V DOMENICI NEW MEXICO CHAIRMAN WILLIAM L ARMSTRONG COLORADO NANCY IICIVDON KASSEBAUM KANSAS RUDY BOSCHWITZ MINNESOTA ORc!IN G HATCH. UTAH PARK ANDREWS NORTH DAKOTA STEVEN D SYMMS IDAHO CHARLES E GRASSLEY IOWA ROBERT W KASTEN WISCONSIN DAN QUAYLE INDIANA SLADE GORTON WASHINGTON JOHN C DANFORTH MISSOURI LAWTON CHILES. FLORIDA ERNEST F HOLLINGS SOUTH CAROLINA J BENNETT JOHNSTON, LOUISIANA JIM SASSER, TENNESSEE GARY HART, COLORADO HOWARD M METZENBAUM, OHIO DONALD W RIEGLE, JR . MICHIGAN DANIEL PATRICK MOYNIHAN. NEW YORK J JAMES EXON, NEBRASKA FRANK R LAUTENBERG, NEW JERSEY STEPHEN BELL, STAFF DIRECTOR RICHARD N BRANDON, MINORITY STAFF DIRECTOR 'United tates eStnatt COMMITTEE ON THE BUDGET WASHINGTON, DC 20510 April 15, 1986 A( The Honorable Paul A. Volcker Chairman Federal Reserve System 20th and C Streets, N.W. Washington, D.C. 20551 0 0 ' Dear Paul: Bakonyi, who ha I am writing to you on behalf of Belay F. Federal Reserve System. expressed an interest in working for the Mr. Bakonyi, he Although I am not personally acquainted with opinion I hold in high comes recommended to me by a friend whose regard. Mr. Bakonyi has As you can see from the enclosed resume, rnational banking and extensive experience in in managing inte For the past sea—yekrs he has corporate business activities. tional Operatioryt5 at the served as Vice President for European rieD,de includes City Bank of Minneapolis. His prior expe a d Zurich, in positions in Portugal, Munich, Copenhagen areas of corporate marketing and sales. tfon that would t Mr. Bakonyi seeks a challenging posi I would sinc9fely s advantage of his background and abilitie yi's impressiVe appreciate your consideration of Mr. Bak qualifications. Thank you. Rudy Boschwitz RB/km https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Removal Notice The item(s) identified below have been removed in accordance with FRASER's policy on handling sensitive information in digitization projects due to personally identifiable information. Citation Information Document Type: Resume Citations: Number of Pages Removed: 4 Resume, Bela F. Bakonyi, 1986. Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 PAUL A. VOLCKER CHAIRMAN April 29, 1986 The Honorable Don Bonker Chairman Subcommittee on International Economic Policy & Trade Committee on Foreign Affairs A702 HOB Annex 1 Washington, D.C. 20515 Dear Mr. Chairman: posed amendments to the I understand that you have pro SA") in your draft bill, the Bank Export Services Act ("BE s to 86. As the Subcommittee expect 19 of Act t en em nc ha En rt po Ex , 1986, I thought it would be mark up the bill on April 29 some comments on the draft bill. useful to provide you with ry because there has been very These comments are prelimina t. limited time to review the draf s to ensure that the The Board fully supports effort and expanding export sector ong str a has es at St United and firms, as well as s rie ust ind of ge ran ad bro a encompassing port king organizations, through ex ban at th e rol ic if ec sp aware the y in this effort. As you are trading companies, can pla 82, of rt Trading Company Act of 19 po Ex the of r so on sp key permit as a the legislation was designed to , II le Tit was A BES ch whi of te in promoting the export ipa tic par to s on ti za ni ga or banking ntaining a manner consistent with mai in es ic rv se and s od go U.S. has is the balance the Board at Th s. es dn un so and ty fe bank sa ng this statute. sought to maintain in applyi visions of the BESA in Your draft bill would amend pro sions present few Two of the proposed revi five respects. s other three raise seriou the t bu , ms le ob pr y or is superv g ty and soundness of bankin fe sa the to d ate rel s on questi l address those three wil I . Cs ET in ing est inv s organization proposals first. l liates -- The draft bil fi Af h wit ns io ct sa an Tr 1. k and its affiliated ETC ban a n wee bet ons cti nsa tra would exempt Reserve n 23A of the Federal io ct se of ts en em ir qu re from the ns with ect banks from transactio ot pr to er ord In Act. ercial ed upon arms-length comm bas be t no may at th h es ns wit affiliat the amount of transactio ts mi li 23A n tio sec s, nt judgme https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Honorable Don Bonker Page 2 requirements an affiliate and requires that certain collateral those be met. The Board as a matter of policy rarely waives ETCs requirements but has done so in one area with respect to ts. We where it believed the risks were within acceptable limi establish have concluded that it would be a serious mistake to ion 23A. a total exemption for ETCs from the requirements of sect away 2. Capital Adequacy -- The draft bill would take investment by a the Board's discretion to disapprove a proposed s of an U.S. banking organization in an ETC solely on the basi uacy is adeq assets to equity ratio of less than 25:1. Capital an ETC and a critical determinant of the financial strength of developments. of its ability to withstand unexpected adverse judging the The Board's flexible case-by-case approach to propose to equity ratios of ETCs in which banking organizations International invest is in line with Congress' directive in the agencies Lending Supervision Act that the bank regulatory adequate "cause banking institutions to achieve and maintain U.S. banks capital by establishing minimum levels of capital." total assets are now required to maintain a minimum capital to ification for a ratio of 6 percent. There appears to be no just l of 4 percent statutory rule allowing a minimum capital leve suggest, when their for ETCs, as the draft bill would seem to range of banking businesses are likely to be outside the normal operations and therefore present greater risks. d amend 3. Exporting services -- The draft bill woul cipally that prin the definition of an ETC to include companies themselves or export goods and services produced by the ETCs statute would any of their affiliates. This revision of the service company, permit banking organizations to invest in any regardless of regardless of the nature of its business, and if its services whether it provides an export related service, are sold to foreign customers. this We are convinced that the practical effect of Congressionally proposal as written would be to change the U.S. exports and intended emphasis in the Act from promoting commercial banks, employment to providing a vehicle by which overseas service through the medium of an ETC, could acquire ed States trade or organizations without any benefit to the Unit would thus have the balance of payments position. The proposal Act to promote U.S. effect of changing the incentive in the the public policy exports, while potentially undermining banking and commerce. objectives embodied in the separation of should be addressed Such important public policy issues nical changes in the directly and not indirectly through tech BESA. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ' The Honorable Don Bonker Page 3 proposed As I have already noted, two of your questions related to revisions to the BESA appear to raise few organizations. the safety and soundness of U.S. banking on calculation However, one of the proposals, discussed below, ut Congressional of U.S. -export revenues raises questions abo s. intent in establishing ETCs to foster U.S. export few Calculation of Export Revenues -- There are 1. revision to the supervisory problems presented by the proposed e outside the United BESA that would include revenues from trad other countries as States and the value of countertrade between t. The Board's export revenues for purposes of the revenues tes s derive more regulations, requiring that bank-affiliated ETC ing U.S. goods and than 50 percent of their revenues from export tory of the services, were based upon the legislative his gress as As I have noted, ETCs were viewed by Con statute. Under the orts. important vehicles for the promotion of exp that would involve draft bill ETCs could engage in transactions vices. Such a result few, if any, exports of U.S. goods and ser of Congressional would amount to a substantial alteration e the export of U.S. intent as to the purposes of ETCs to promot goods and services. the Inventory -- The draft bill would prohibit 2. unt of goods that Board from imposing a dollar limit on the amo on a case-by-case ETCs may maintain in inventory other than s such a case-by-case basis. In fact the Board currently employ No unnecessary. approach so the amendment to the BESA is e. tut n of the sta problems would be presented by a clarificatio tee would give I would appreciate it if your Subcommit ticularly the first serious thought as to the effects of par I feel they raise ve. three proposed i4 revisions discussed abo ETCs to promote U.S. important questions about the purpose of ine the public policy exports and could significantly underm and commerce in the Bank g kin ban of n tio ara sep the in ed odi emb s to bolster the capital Holding Company Act as well as effort banking system from undue of U.S. banks and to protect the testimony a I am enclosing for your information the risk. Subcommittee on representative of the Board delivered to your issues in greater detail. April 22, 1986, which discusses these Siyerely, RRT:MB bcc: Ms. Tigert . Mr. Bradfield . Mrs. Mallardi (2) Enclosure (Mr. Fred Dahl's statement of 4/22/86) /blaatii/A- CC: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Honorable Dante B. Fascell The Honorable William S. Broomfield The Honorable Toby Roth .11 a BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 April 29, 1986 PAUL A. VOLCKER CHAIRMAN The Honorable Richard G. Lugar United States Senate Washington, D.C. 20510 Dear Senator Lugar: I appreciate very much your letter of April 15 concerning Professor William Dunkelberg's interest in a vacancy on the Board. As I noted in my letter to you last August, his credentials seem to be such that they would qualify him for consideration by the Administration, which will make the appointment. I must point out, however, a problem that you should take into account. The Chicago Federal Reserve District, where Professor Dunkelberg resides, is already represented by Governor Seger. Sincerely, SMR:vcd (V-97, 86-2000) bcc: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Steve Roberts Mrs. Mallardi (2), RICHA°D G. LUGAR COMMITTEES SNDIANA FOREIGN RELATIONS SH 30f SENATE OFFICE BUILDING ,NASHINGTON. DC 20510 202-224-4814 AGRICULTURE. NUTRITION AND FORESTRY United eStates eSenate WASHINGTON, D.C. 20510 Se4CT COMMIE ON INTELLIGENCE 11 r" -2 0 "10 r-r Izs. =D April 15, 1986 Mr. Paul A. Volcker Chairman Board of Governors of the Federal Reserve System Constitution Avenue & 21st Street Washington, D.C. 20551 Dear Paul: It has come to my attention that there is a vacancy on the Board of Governors at the Federal Reserve and that Professor William Dunkelberg has reapplied for this position. I would once again like to support Prof. Dunkelberg for appointment to the Board. Prof. Dunkelberg's background and knowledge of economics is outstanding. His service with various industrial, business and government agencies speak for themselves as do his numerous publications and presentations. As a fellow Hoosier, I am extremely proud of his accomplishments and believe that he is superbly qualified to serve on the Board of Governors of the Federal Reserve System. Prof. Dunkelberg is a talented individual and possesses the intellectual potential to make a strong impact with his public If I can provide you with further information, please service. do not hesitate to contact me. Sincerely, ichard G. Lugar United States Senator RGL:ln cc: Mr. Robert Tuttle, Director of White House Personnel https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Co c-+ BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, O. C. 20551 PAUL A. VOLCKER April 29, 1986 CHAIRMAN The Honorable William Proxmire United States Senate Washington, D.C. 20510 Dear Senator Proxmire: Thank you for your letter to me and other Board members concerning the uniform adjustable rate mortgage disclosure proposal which is under consideration by the Federal Financial Institutions Examination Council. As you know, the Board and the other agencies have been working for quite some time to develop a common approach to ARM disclosures. Although some of our Board members have been involved with this issue recently through their service on the FFIEC, our full Board has not considered the issue since we first proposed amending Regulation Z last year. I can assure you that when the recommendations of the FFIEC are presented for Board consideration, we will take your concerns very seriously. Again, thank you for giving us the benefit of your views. Sincerely, SLEV.t. GLG:vcd (V-100, 86-2029) bcc: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mr. Garwood Mrs. Mallardi (2)v/ 110-\) JAKE GARN, UTAH, CHAIRMAN AHN HEINZ. PENNSYLVANIA WIUJAM PROXMIRE, WISCONSIN WILLIAM L ARMSTRONG, COLORADO ALAN CRAAISTON, C.ALIFORNIA ALFONSE M ()AMATO. NEW YORK DONALD W RIEGLE, JFL, MICHIGAN SLADE GORTON, WASHINGTON PAUL S. SARSANES, MARYLAND MACK MATTINGLY. GEORGIA CHRISTOPHER J. DODD. CONNECTICUT CHIC HECHT, NEVADA ALAN J DIXON, ILLINOIS PHIL GRAA4M, TEXAS JIM SASSER. TENNESSEE M. DANNY WALL STAFF DIRECTOR KENNETH A. McLEAN, MINORITY STAFF DIRECTOR United e$tatts e$enate COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS WASHINGTON, DC 20510 April 22, 1986 The Honorable Paul A. Volcker Chairman of the Board of Governors of the Federal Reserve System 20th & C Streets NW Washington, DC 20551 Dear Mr. Chairman: I have learned that the Federal Financial Institutions Examination Council will soon make a final deon on its adjustable rate mortgage (ARM) disclosure recommendation. While I have no particular problem with the disclosure about which there has already been a tentative agreement, I strongly believe that this sS-called historical disclosure falls far short of meeting consumer needs. Indeed, since interest rates have generally declined over the last several years, a disclosure based only on recent historical experience can be quite leading regarding future risk. Unless we have somehow managed to repeal the business cycle, interest rates will continue to fluctuate and we will have periods of rising rates as well as falling rates. Consumers thus need a preapplication disclosure showing the maximum payments they might have to make under the actual terms of the loan. While I applaud the federal banking regulators for their effort to come to agreement on this issue, standardized ARM disclosures are not as important as good ones. Both the present Comptroller regulations and the proposed Truth-in-Lending regulations put out for comment last spring contain a version of the "worst case" disclosure that I believe is necessary. I hope the recommendation of the FFIEC does not represent a retreat from these important consumer safeguards. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis FEDERAL DEPOSIT INSURANCE CORPORATION BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM April 23, 1986 The Honorable Fernand J. St Germain Chairman Committee on Banking, Finance and Urban Affairs House of Representatives 20515 Washington, D.C. - Dear Chairman St Germain: By letter of April 8, we, together with the Comptroller of the Currency, wrote to you asking that Congress extend and liberalize the emergency acquisition provisions of the Cam St Germain Depository Institutions Deregulation Act of 1982. Congress has now passed a 90-day extension of that Act. With respect to liberalizing the emergency acquisition provisions, in that letter we recommended a number of changes designed to strengthen the ability of the regulators to deal with problem situations including authority to permit the out-of-state acquisition of failing banks and the out-of-state acquisition of a bank holding company when the failing bank exceeds the statutory size threshold and represents a sizeable part of the holding company system. We also recommended that the asset size of banks eligible to be acquired be reduced from $500 million to $250 million. We are forwarding to you at this time proposed legislation to implement these recommendations. The Comptroller of the Currency has initiated the Administration's formal review of this bill. It is our hope that Congress will be able to consider these matters at the earliest opportunity. Sincerely, L. William Seidman Paul A. Volcker Enclosure IDENTICAL LETTERS SENT TO: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Chrmn. Garn, Sen. Proxmire and Cong. Wylie • 99TH CONGRESS 2nd Session H.R. IN THE HOUSE OF REPRESENTATIVES April , 1986 introduced the following bill, which was referred to the Mr. Committee on A BILL To preserve the authority of the Federal banking supervisory agencies to arrange interstate acquisitions and mergers for failed and failing banks, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • - 2 _ SHORT TITLE. This Act may be cited as the "Financial Institutions Emergency SEC. 1 Acquisitions Amendments of 1986." ASSISTED EXTRAORDINARY ACQUISITIONS Section 13(f) of the Federal Deposit Insurance Act (12 U.S.C. SEC. 2 1823(f)) is amended-- (1) by amending paragraph (1) to read as follows: med Whenever the appropriate Federal banking agency is infor g acquiring, that an out-of-State bank or holding company is considerin $250,000,000 or directly or indirectly, an insured bank with total assets of notify the more that is in danger of closing, such agency shall (A) taking any action Corporation of such, (6) consult with the Corporation before Corporation with with respect to any such acquisition, and (C) provide the notice of any final action taken. "(B) of this Except as provided in paragraph (9), the provisions with any acquisition by or subsection shall be used exclusively in connection ct to which the merger with an out-of-State bank or holding company with respe https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -3 Corporation provides assistance under its powers in subsection (c) and shall not be applicable if the Corporation does not provide such assistance. Nothing contained in this subsection shall be construed to limit the Corporation's powers in subsection (c) to assist a transaction." (2) by striking out "$500,000,000" in subparagraph (2)(A) and inserting in lieu thereof "$250,000,000". (3) by amending subparagraph (3) to read as follows: "(3)(A)(i) Whenever the appropriate Federal or State chartering authority has certified in writing that an insured bank with total assets of $250,000,000 or more (as determined from its most recent report of condition) is in danger of closing, the insured bank may merge with or its assets may be purchased by and its liabilities assumed by another depository institution, including an insured depository institution located in the State where the insured bank is chartered but established by an out-of-State bank or holding company, or its shares may be acquired by an out-of-State bank or holding company. -.. "(ii) Whenever the appropriate Federal or State chartering authority has certified in writing that one or more insured bank subsidiaries of a holding company are in danger of closing and such bank or banks hold aggregate https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 0 % - 4 - assets equal to $250,000,000 or more (as determined from their most recent reports of condition) and such bank or banks represent 33 percent or more of the total assets of all insured bank subsidiaries (as determined from their' most recent reports of condition) of such holding company, an out-of-State bank or holding company may (a) purchase the shares of or otherwise acquire the holding company that controls such bank or banks and all of such holding company's subsidiary banks or (b) purchase the shares or otherwise acquire any such bank or banks in danger of closing and/or establish one or more newly chartered banks located in the State where such banks in danger of closing are chartered for the purpose of merging with or purchasing the assets and assuming the liabilities of such banks, provided the aggregate total assets of such banks that are acquired equal $250,000,000 or more. Any out-of-State bank or holding company which, pursuant to clause (b), purchases shares of, or establishes a newly chartered bank for the purpose of merging with or acquiring the assets and assuming the liabilities of, such bank or banks in danger of closing may purchase the shares of or otherwise acquire any bank which is affiliated with such bank or banks. N "(iii) The Corporation may assist a merger or acquisition permitted under subparagraph (A) only where the board of directors or trustees of the or insured bank has requested in writing that the Corporation assist a merger a purchase. "(6) Whenever the Corporation provides assistance, directly or indirectly, under the authority of subsection (c), to an.insured bank and such bank was eligible at the time such assistance was given to be acquired by https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis - 5 _ (A), the an out-of-State bank or holding company, pursuant to subparagraph it was bank shall remain eligible to be acquired, to the same extent that eligible when assistance was granted, by an out-of-State bank or holding g. company so long as the Corporation's assistance remains outstandin If, at iated the time such assistance was granted to an insured bank or to affil other insured banks, such bank's or banks' parent holding company or bank or affiliated banks were eligible also to be acquired by an out-of-State n eligible holding company, pursuant to subparagraph (A)(ii), they shall remai tance was for such acquisition to the same extent as they were when the assis granted, so long as such assistance remains outstanding. "(C) Where otherwise lawfully required, a transaction under this supervisor of paragraph (3) must be approved by the primary Federal or State all parties thereto. Before assisting a merger or acquisition permitted under subparagraph (A) or taking final action under subparagraph (B), the in which the Corporation shall consult the State bank supervisor of the State bank in danger of closing is chartered. opportunity, "(ii) The State bank supervisor shall be given a reasonable of the and in no event less than forty-eight hours, to object to the use provisions of this paragraph. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I NO. - 6 _ If the State supervisor objects during such period, the "( i i i ) vote Corporation may use the authority of this paragraph only by a unanimous of the Board of Directors. The Board of Directors shall provide to the State supervisor, as soon as practicable, a written certification of its determination." (4) (4) by redesignating subparagraphs (i) through (iii) of paragraph as subparagraphs (A) through (C), respectively. (5) by amending newly redesignated subparagraph (4)(A) to read as follows: "(A) Neither section 3(d) of the Bank Holding Company Act of 1956, law, nor section 408(e)(3) of the National Housing Act, any provision of State retention the constitution of any State, shall bar approval, consummation or that an of an acquisition authorized under paragraph (2) or (3), except ownership is out-of-State bank may make such an acquisition only if such otherwise specifically authorized." (6) By adding new subparagraphs (D) and (E) to paragraph (4) as follows: "(D) tly or An out-of-State bank holding company that acquires, direc entitled to indirectly, a bank under paragraph (2) or (3) shall thereafter be politan or acquire additional banks located in the three largest metro https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis mIMENk in which consolidated metropolitan statistical areas or cities in any State ng company that the acquired bank is located to the same extent as a bank holdi the Bank is principally located (as such term is defined in section 3(d) of Holding Company Act of 1956) in such State. "(E) control A holding company which, directly or indirectly, acquires or (3) shall of one or more banks or a holding company under paragraph (2) the result of not, by reason of such acquisition or expansion, be required as prevented from the law of any State to divest any other bank or banks or be company." acquiring, directly or indirectly, any other banks or holding (7) by striking "to permit" in paragraph (5). (8) "bank" the by striking out "closed" the second time it appears and sixth time it appears in subparagraph (6)(A). (9) as by redesignating subparagraphs (B) and (C) in paragraph (8) subparagraph subparagraphs (D) and (E), respectively, and by inserting after (A) the following new subparagraphs: "(B) a bank is 'in danger of closing' if "(i) of its the bank is not likely to be able to meet the demands there is no depositors or pay its obligations in the normal course and assistance; or reasonable prospect for it to do so without federal https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis - 8 _ "(ii) the bank has incurred or is likely to incur losses that will deplete all or substantially all of its capital and there is no reasonable or prospect for replenishment of the bank's capital without federal assistance; "(iii) other grounds exist or are likely to exist under applicable State law for closing the bank; and "(C) banks are 'affiliated' if each is a subsidiary (as defined in section 2(d) of the Bank Holding Company Act of 1956) of the same holding company; and" (10) by adding a new paragraph (9) to read as follows: "(9) Nothing in this subsection shall prevent the Corporation, in its of an sole discretion, from assisting, directly or indirectly, the acquisition open or closed insured bank by an out-of-State bank or holding company where such an acquisition is otherwise authorized under applicable State law." (11) by adding a new paragraph (10) to read as follows: nce "(10) In any transaction authorized under this subsection, no assista company that by the Corporation shall be provided to a subsidiary of a holding is not an insured bank." https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -9 UNASSISTED EXTRAORDINARY ACQUISITIONS SEC. 3. Section 3(d) of the Bank Holding Company Act (12 U.S.C. 1842(d)) is amended by designating the first paragraph thereof as paragraph (1) and inserting at the end thereof the following new paragraphs: "(2) Notwithstanding the provisions of paragraph (1) of this subsection or any provision of state law or the constitution of any state, "(A) a bank holding company may acquire and retain the shares or assets of-- (i) a bank located in another state if such bank has total assets of $250 million or more and is in danger of closing; or (ii) two or more affiliated banks in danger of closing that together hold assets that total $250 million or more and that represent 33 percent of the total assets of all affiliated banks; "(B) a bank holding company that acquires a bank or banks in danger of closing under subparagraph (A) may acquire a bank holding company that any controls such bank or banks and/or may acquire the assets or shares of bank affiliated with such bank or banks, provided in either case that the total assets of such bank or banks in danger of closing represent at least 33 percent of the total assets of all affiliated banks; https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis - 10 L. "(C) of a A bank holding company that acquires the assets or shares acquire additional bank in danger of closing under subparagraph (A) or (B) may metropolitan banks located in the three largest metropolitan or consolidated ired pursuant to statistical areas or cities in any state in which a bank acqu ing company that is this paragraph is located to the same extent as a bank hold state; principally located (as defined in paragraph (1) hereof) in such "(D) of one or A bank holding company that acquires and retains control such acquisition more banks pursuant to this paragraph shall not, by reason of or be prevented or retention, be required to divest any other bank or banks from acquiring any other banks. "(3) ts of a A bank holding company may not acquire the shares or asse unless the bank or bank holding company under paragraph (2)(A) or (B) such bank or of a acquisition has been approved by the board of directors of bank holding company that controls such bank. federal or A bank is in danger of closing if the appropriate state chartering atthority certifies in writing that: (i) nds of its the bank is not likely to be able to meet the dema and there is no depositors or pay its obligations in the normal course assistance; or reasonable prospect for it to do so without federal (ii) that will the bank has incurred or is likely to incur losses e is no reasonable deplete all or substantially all of its capital and ther federal assistance; 01 prospect for replenishment of the bank's capital without https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis _ _ under applicable (iii) other grounds exist or are likely to exist State law for closing the bank. "(6) a subsidiary of A bank is affiliated with another bank if each is the same bank holding company. "(C) basis of its most The assets of a bank shall be determined on the recent report of condition. company that No bank in danger of closing or bank holding cussions relating to the controls such bank shall enter into any dis unless-acquisition of such bank under paragraph (2) (i) which such bank the State bank supervisor for each state in n notified of such proposed or its affiliated banks is located has bee discussions, and (ii) ted to arrange such bank or bank holding company has attemp ance under section 13(c) of the an acquisition that does not require assist provisions of paragraph e tat ers int the of use or Act nce ura Ins t Federal Deposi aph (2)(A) or (6) must describe (2). An application submitted under paragr satisfy this requirement to y pan com g din hol k ban or k ban h suc by efforts made posals submitted. and the reasons for the rejection of any pro https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis - 12- "(B) Before approving an application pursuant to paragraph (2) shall involving a bank in danger of closing or its affiliated banks, the Board bank or consult the State bank supervisor of the State or States in which the banks are located. "(C) The State bank supervisor or supervisors shall be given a object reasonable opportunity, and in no event less than forty-eight hours, to to approval of the application. "(D) Except as provided in subparagraph (E), the Board shall not subparagraph approve the application if, during the notice period provided in (C), such State bank supervisor certifies to the Board that-- (i) a person or persons have, prior to the notice period in of the banks subparagraph (C), offered or attempted to offer to acquire each assistance under in danger of closing in a transaction that does not require interstate section 13(c) of the Federal Deposit Insurance Act or use of the provisions of paragraph (2), and (ii) bank such person or persons, in the judgment of such State approvals necessary supervisor, are likely to be able to secure all regulatory all applicable to consummate such acquisition promptly, and to comply with https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1 - 13 ents, including financial and managerial and other regulatory requirem out impairing the recapitalizing all such banks in danger of closing with ons. financial resources of the acquiring person or pers "(E) rmines that The Board may approve the application if the Board dete supervisor under the person or persons certified by the State bank necessary to obtain subparagraph (D) do not have the financial resources resources to regulatory approval to acquire such bank, including the out impairing the recapitalize all such banks in danger of closing with or that such person or financial resources of the acquiring person or persons, requirements. persons do not meet other applicable regulatory "(6) appropriate If the Board has received a certification from the paragraph (2) or section federal or state chartering authority pursuant to bank is in danger of 13(f) of the Federal Deposit Insurance Act that a and hearing requirements of closing, the Board may dispense with the notice ion received to acquire section 3(b) of this Act with respect to any applicat the post-approval waiting such bank or its affiliated banks and may reduce if the Board finds that period of section 11 of this Act to five days or, able failure of any such immediate action is necessary to prevent the prob banks, eliminate such period." https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis - 14 - WAIVER OF NOTICE REQUIREMENTS SEC. 4. Section 4(c)(8) of the Bank Holding Company Act (12 U.S.C. as 1843(c)(8)) is amended by adding a new sentence to the end thereof to read follows: connection "In the event an application is filed under this paragraph in bank in with an application by a bank holding company to acquire control of a of this danger of closing or its affiliated banks pursuant to section 3(d)(2) Act or section 13(f) of the Federal Deposit Insurance Act, the Board may and the dispense with the notice and hearing requirement of this paragraph notice Board may approve or deny the application under this paragraph without or hearing." • SUNSET PROVISIONS SEC. 5. (a) Section 141(a) of the Garn-St Germain Depository ing out Institutions Act of 1982 (12 U.S.C. 1464 note) is amended by strik "April 15, 1986" and inserting in lieu thereof "April 15, 1991". (b) amended Effective upon April 15, 1991, the provisions of law amendments. by this Act shall be amended to read as they would without such (c) amendment The repeal or termination by this section 5 of any authorized while made by this Act shall have no effect on any action taken or such amendment was in effect. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1.1..... BOARD OF GOVERNORS OF THE • CO •. i1 •0 • ••1 F.--• • —k L-, • -1.. .....es L., • •..<••_v. FEDERAL RESERVE SYSTEM WASHINGTON, DE. 20SSI April 21, 1986 RLS RAL •.• • •. •. The Honorable Tom Harkin United States Senator 307 Federal Building Box H Council Bluffs, Iowa 51502 Dear Senator Harkin: Thank you for your letter of April 11 on behalf of your constituent, Mr. R. S. Presson, who expressed concern about a recent attempt to take over Union Carbide. I am enclosing a copy of the Board's final action on its interpretation of Regulation G dealing with the applicability of the margin lending restrictions to the purchase of debt securities to finance corporate takeovers. After review of the comments, the Board decided to adopt the proposed interpretation with certain clarifications and modifications. The interpretation incorporates the Board's view that the existing provisions of Regulation G apply to a limited category of transactions where debt securities are issued by a shell corporation to finance a tender offer for the stock of a target company. The Board believes that the interpretation is an appropriate measure to assure that the existing requirements in the margin regulations are applied in a fair and uniform manner. During the Board meeting at which the interpretation was adopted, Chairman Volcker noted that the broader issues of the growth of debt and increased leveraging could not be addressed through margin requirements, but were a function of basic economic incentives including tax considerations. He also indicated that these issues needed to be considered in an appropriate forum and that it would be healthy if they were debated in Congress and elsewhere. Sincerely, Si Donald J. Winn Donald J. Winn Assistant to the Board Enclosure (1/10/86 P.R.) (MB:DJW):CO:vcd (V-95, 86-1946) bcc: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mrs. Mallardi V/ TOM HARKIN K•N (202) 224-3254 TTY (202) 225-1904 C0s4MMUS. AGRICULTURE United eStates tnate I APPROPRIATIONS SMALL BUSINESS WASHINGTON, DC 20510 April 11, 1986 Paul A. Volcker, Chairman Federal keserve System 20th St. & Constitution Ave., NW Washington, D.C. 20551 Dear Paul: Enclosed is a letter I recently received from Mr. R.S. Presson, Plant Manager of Union Carbide Corporation in Red Oak, Iowa. I would like to express my inte rest on behalf of Mr. Presson and his concern about "junk bond takeovers." Please address the concerns raised in the letter and send your response to me at 307 Federal Building, Box H, Council Bluffs, Iowa 51502, phone 712/325.5533. co cn 2°, 70 Thank you in advance for your assi stance. -- __ - rrl ••••.1 e•-•... ...m.• Sincerely, c--• 1-.--' r" c"=" rvi 7-x5 .. 2 r.) r.4 . 1 dlr.'''. —c •••••••• rn ..i.... , om Harkin United States Senator TH/sk Enclosure STATE OFFICES: 307 FEDERAL BLDG BOX H COUNCIL BLUFFS. IA 51502 (712) 325-5533 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 210 WALNUT ST ROOM 733 FEDERAL BLDG DES MOINES IA 50309 (515) 284-4574 BOX 4489 LINDALE MALL CEDAR RAPIDS, IA 52407 (319) 393-6374 131 E 4TH ST 3143 FEDERAL BLDG DAVENPORT IA 52801 (319) 322-1338 v. • UNION CARBIDE CORPORATION PD BOX 374, RED OAK, IOWA 51566 Battery Products https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Honorable Tom Harkin U. S. Senator 317 Hart Senate Office Building Washington, D. C. 20510 Dear Senator Harkin: As you may be aware, on December 10th GAF Corporation commenced a partial offer to acquire shares of Union Carbide Corporation in an effort to gain control of Union Carbide. As a plant manager of Union Carbide's Battery Products plant in Red Oak, Iowa, I am writing to advise you of Union Carbide's response to date, because I know that you are concerned, as we are, about the potential impact upon Union Carbide's employees, customers, suppliers, and communities. Enclosed is a detailed description of Union Carbide's response to GAF's bid. Following are the main points of interest: The GAF $68 per share offer could do serious damage to our employees, communities where we operate, customers and suppliers, since GAF will be under intense pressure to dispose of assets quickly to service its short-term acquisition debt. Union Carbide is offering its shareholders a superior alternative to GAF's grossly inadequate and unfair offer. As an employer of almost 400 employees in Red Oak, Iowa we ask your support and urge you to voice your concern to Federal Reserve Chairman Paul Volcker about the potentially negative effects of highly leveraged junk bond takeovers on target corporations, their employees, customers, suppliers and communities. Thank you very much for your attention and your concern. to keep you posted of additional developments. Sincerely, R. S. Presson Plant Manager ' RSP/deb Enclosure I will try 'Po BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 205S1 April 21, 1986 PAUL A. VOLCKER CHAIRMAN The Honorable Fernand J. St Germain Chairman Subcommittee on Financial Institutions Supervision, Regulation and Insurance Committee on Banking, Finance and Urban Affairs House of Representatives Washington, D.C. 20515 Dear Chairman St Germain: This is in response to your letter dated January 11, 1986, in which you requested our views on the contents of H.R. 3567. The purpose of this proposed legislation is to improve the quality of supervisory examinations by addressing issues relating to examiner salaries and training and the accreditation of state banking departments. This would be done • the responsibilities of the Federal Financial by broadening Institutions Examination Council with respect to these matters and, in the process, redesignating this body as the Federal Depository Institutions Examination Council. We share many of the broad objectives of the proposed legislation--and, indeed, have taken steps to achieve many of these objectives--but we have reservations, as discussed below, concerning some of the specific provisions of the bill. The bill proposes to assure adequate compensation for examiners by instructing the redesignated Examination Council to conduct regional studies of private sector pay scales for jobs • skills and responsibilities comparable to those of requiring federal depository institution examiners. The Council would further classify federal examiners on the basis of these studies and require the federal depository institution regulatory a• gencies to adhere to these pay scales, rather than those • enerally •applicable to the federal g overnment, in establishing g examiner salaries. To assure this result, the proposed legislation provides that the depository institution regulatory agencies would not be subject to the budget and appropriation g encies that review procedures otherwise established for a• receive public funding. We, of course, strongly believe that it is critical for the federal agencies to maintain staffs of highly qualified examiners. Thus, we support the objective of establishing salary levels for examiners that are competitive with compensation for similar work in the private sector. In this connection, I would point out that Federal Reserve examiners, as employees 5f the Federal Reserve Banks, are not now subject to https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Honorable Fernand J. St Germain Page Two federal government pay scales and that salaries for our examiners are currently set to be commensurate with those offered by local banks and financially related organizations.1/ Consequently, in the case of the Federal Reserve, this legislation would be unnecessary. However, I cannot speak for the other federal banking agencies whose examiner salaries are subject to federal pay constraints and who may, therefore, have different views on this matter. In considering the issue of examiner compensation, I believe we must be sensitive to the continuing need to control costs and to contribute to the government-wide efforts to achieve necessary budgetary savings pursuant to the objectives of the Gramm -Rudman-Hollings Amendment. Although the Federal Reserve System is not covered by the reductions mandated by Gramm-Rudman, I have publicly expressed the Board's position that it will revise its budget in a manner that is consistent with the spirit of Gramm-Rudman. (In so conforming its budget, I would note the Board is increasing the number of on-site examinations and the number of bank examiners in order to meet growing supervisory concerns regarding the banks and bank holding companies that are under the Board's regulatory authority.) In my view, again without commenting for the other federal agencies, the reassignment of the management of bank examiners to a new administrative body would not improve bank supervision and, at the same time, would result in an increase in administrative costs. Thus, I believe that the Federal Reserve can best achieve the objectives of H.R. 3567 and 1/ https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis In this connection we would note that in seeking to provide the Counc‘l with the authority to determine the salary of bank examiners, the statutory language of section 2(d) of H.R. 3567 incorrectly amends section 11(1) of the Federal Reserve Act, 12 U.S.C. 248(1). Section 11(1) of the Federal Reserve Act provides that the Board shall fix the salaries of Board employees; it does not address the issue of Reserve Bank salaries. As discussed above, Federal Reserve examiners are generally employees of the Reserve Banks, not the Board, and their compensation is determined by the Reserve Bank that employs them. Accordingly, to effect the purposes of H.R. 3567, section 2(d) would have to be changed to amend section 4 paragraph 22 of the Federal Reserve Act, 12 U.S.C. 307, which authorizes the manner in which Federal Reserve Bank employees are paid. • The Honorable Fernand J. St Germain Page Three conform its budget to the spirit of Gramm-Rudman under its existing agency authority. H.R. 3567 also proposes to consolidate all federal agency training programs under the Council and mandates a study and report to Congress by the Council on the feasibility of establishing a graduate education program for examiners. We believe that important benefits and efficiencies can be realized from the coordination of examiner training, and the banking agencies have already consolidated a number of common training functions under the auspices of the existing Examination Council. The Council also serves as an essential vehicle for coordinating other training efforts in order to minimize duplication and realize appropriate economies. In light of the progress achieved thus far, we see limited additional benefits flowing from the proposed legislation, although we recognize that efforts to develop additional common programs can and should continue. Examiner education is, of course, essential to maintaining a staif of highly qualified field personnel, and the federal banking agencies, in conjunction with the existing Examination Council, are working to enhance training for examiners generally and for senior examiners in particular. In this regard, we believe that the provision in H.R. 3567 regarding a graduate education program for examiners has merit, ing and is worthy of careful consideration. It is my understand that the Examination Council has already instructed its staff y and the member agencies to undertake a study of the feasibilit of an advanced graduate educational program, and I am certain that the Council would share its findings and recommendations with the Congress. The proposed legislation charges the Federal Depository Institutions Examination Council with the responsibility for establishing standards for judging the adequacy of the examination programs of state banking agencies and for conducting the reviews of individual states. In carrying out these duties, and Council would have to establish standards for the frequency quality of examinations and for the adequacy of examination resources and training. The legislation would prohibit a n federal regulatory agency from relying on any state examinatio state's in lieu of conducting its own federal examination if the examinations were deemed to be inadequate by the Council under re the established review procedure. The bill would also requi fy the Council to establish and administer a program to certi state bank examiners. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Honorable Fernand J. St Germain Page Four The Board has supported the principle of the certification of state examination programs in connection with the recommendations of the Bush Task Group on the Regulation of Financial Services. However, we believe that this objective should be pursued within the framework of the type of reforms set forth by the Bush Commission report, rather than being implemented on a piecemeal basis. As you may recall, the Bush Commission recommended that the Federal Reserve would initially become responsible for the federal regulation of all statechartered banks and, subject to the Federal Reserve's certification of individual states, would transfer many of the current federal supervisory responsibilities for these institutions to the state banking agencies. Under the Bush Commission proposal, standards for the certification of the states were to be established jointly by the federal banking agencies. Thus, the Bush Commission proposed to lodge responsibility at the federal level for supervising state-chartered institutions, while ensuring appropriate involvement of the other interested federal banking agencies in establishing certification criteria. An important advantage of the Bush recommendations that is absent from the approach proposed in H.R. 3567 is that, under the Bush proposal, the agency that ultimately would be held accountable at the federal level for the safety and soundness of statechartered banks would also have the requisite legal authority for certifying those states whose examinations would be utilized to achieve this critical goal. This seems preferable, from the standpoint of accountability, to the alternative of assigning the function of certifying the states to an administrative entity that does not have statutory responsibility for supervising banks or for dealing with the consequences of troubled banks and banking emergencies. While we would not support the approach to state certification contained in H.R. 3567, I would point out that the federal agencies that have statutory responsibility for supervising state-chartered institutions have established numerous arrangements in which the agencies coordinate their supervisory efforts with the states. In particular, the Federal Reserve has established arrangements in which we use examinations conducted by the states in lieu of our own on an alternate year or more frequent basis, provided the states wish to participate in such programs and have the resources and procedures in place for conducting adequate examinations. Moreover, recently the Federal Reserve initiated programs to expand, where appropriate, its use of examination reports prepared by state examiners and, in this context, considerations of the type suggested in H.R. 3567, such as the frequency and quality of examinations and the adequacy of resources and training programs, would be https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Honorable Fernand J. St Germain Page Five this relevant in implementing these programs. To facilitate Board process and strengthen examiner training generally, the for recently authorized the provision of scholarship funds Bank examiner training to the Education Foundation of State financial Supervisors and instructed Reserve Banks to provide Federal assistance directly to state bank examiners to attend ing Reserve training schools. Thus, we believe we are work ting a toward many of the objectives of H.R. 3567 without enac this certification procedure with the problems inherent in legislation. For the reasons set forth in this letter, I do not believe that H.R. 3567 presents the best framework for I do believe strengthening the bank examination staff. However, legisthat progress on many of the underlying goals of this state lation--i.e., the maintenance at both the federal and adequate levels of staffs of fully qualified examiners and that work examination programs--is extremely important, and critical concern toward these ends is and will continue to be a of the Federal Reserve. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Sincerely, S Paul MB:FS:pte/vcd (V-9, Vice Chairman bcc: Mr. Bradfield Mr. Struble Legal Records Mrs. Mallardi 86-137) Martin (2) / (2) / VOI—frc•t- • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 RAL RE.'" • • •..• • • PAUL A. VOLCKER January 17, 1986 CHAIRMAN The Honorable Fernand J. St Germain Chairman Subcommittee on Financial Institutions Supervision, Regulation and Insurance Committee on Banking, Finance and Urban Affairs House of Representatives Washington, D.C. 20515 Dear Chairman St Germain: I an pleased to acknowledge receipt of your letter of January 11 requesting comment on H.R. 3567, a bill to improve the quality of examinations of depository institutions. This bill is now being analyzed, and I expect to have a response to you in the near future. Sincerely, SiEcu.". CO:vcd (V-9, 86-137) bcc: Welford Farmer Fred Struble Mike Bradfield Mrs. Mallardi (2) 10/ OHIO CHALMERS P .1••• LEACH. IOWA STEWART S McKINNEY, Boopetcricuy NORMAN D. SHUMWAY CALIFORNIA etu McCOLLU1A FLORIDA GEORGE C WORTLEY NEW YORK DAVID DREIER. CALIFORNIA STAN PARRIS. VIRGINIA MARGE ROUKEMA. NEW JERSEY DOUG BEREUTER. NEBRASKA STEVE SARI LITT. TEXAS TOSY ROTH. WIEICONSM FERNAND J. ST GERMAIN. RHODE ISLAND. CHAIRMAN FRANK ANNUNZIO. ILLINOIS CARROLL HUBBARD. JR , KENTUCKY DOUG BARNARD. JR.. GEORGIA JOHN J LAFALCE. NEW YORK MARY ROSE OAKAR OHIO BRUCE F VENT°. MINNESOTA ROBERT GARCIA NEW YORK CHARLES E SCHUMER. NEW YORK BARNEY FRANK, MASSACHUSETTS RICHARD H LEHMAN, CALIFORNIA JIM COOPER. TENNESSEE BUDDY ROEMER, LOUISIANA MARCY KAPTUR. OHIO BILL NELSON. FLORIDA PAUL E KANJORSKI. PENNSYLVANIA BART GORDON TENNESSEE THOMAS J. MANTON, NEW YORK https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis U.S. HOUSE OF REPRESENTATIVES SUBCOMMITTEE ON FINANCIAL INSTITUTIONS SUPERVISION, REGULATION AND INSURANCE OF THE COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS NINETY-NINTH CONGRESS WASHINGTON, DC 20515 January 11, 1986 Honorable Paul A. Volcker Chairman, Board of Governors Federal Reserve System Washington, D.C. 20551 ...••••• -••• 41.••••• Dear Chairman Volcker: Enclosed you will find a copy of H.R. 3567, a bill designed to improve the quality of examinations of depository institutions. I would appreciate having your camment and evaluation of this measure. ce ely, tAke nand J airman FJStG:dDv 114;o St Germain •••• https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 99TH CONGRESS 1ST SESSION H.R.3567 y institutions, and for other tor osi dep of ons ati min exa of y lit qua To improve the purposes. TATIVES IN THE HOUSE OF REPRESEN OCTOBER 16, 1985 E, Mr. E, Mr. ST GERMAIN, Mr. WYLI IN ND LU . Mr f, sel him r (fo ER RP Mr. CA Of ER, Mr. COOPER, Mr. DREIER DL AN CH Mr. , ER UT RE BE Mr. , TT BARTLE ER, Mr. GORDON, Mr. ST FU Mr. K, AN FR . Mr , CH EI DR ER California, Mr. E, MT. SKI, MS. KAPTUR, Mr. LAFALC OR NJ . KA Mr D, AR BB HU Mr. R, LE HI Mr. Mr. MCKINNEY, Mr. MCMILLAN, , SS LE ND CA MC . Mr an, hig Mic Of LEVIN ON Of Florida, Mr. RIDGE, LS NE . Mr , AL NE . Mr , LL HE TC MI MANTON, Mr. WIRTH, SCHUMER, Mr. SHUMWAY, Mr. . Mr A, EM UK RO . Mrs , TH RO Mr. was uced the following bill; which rod int Y) LE RT WO . Mr and , RG BE OT Mr. GR g, Finance and Urban Affairs referred to the Committee on Bankin A BILL of depository ns io at in am ex of y lit qua e th e ov pr im To institutions, and for other purposes. 1 2 tives Representaof e us Ho d an te na Se e th by d te ac Be it en ngress assembled, Co in a ic er Am of es at St ed it Un e th of 3 SECTION 1. SHORT TITLE. 4 y Institution or it os ep "D e th as ed cit be y ma t This Ac ". 1985 5 Examination Improvement Act of 6 7 DERAL EXAMINERS. SEC. 2. COMPENSATION OF FE (a) REGIONAL PAY SCALES. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2 (1) ESTABLISHMENT 1 OF REGIONS.—The Deposi- s redesignated (a l ci un Co n io at in am Ex tory Institutions tal United en in nt co e th de vi di l by section 7(a)) shal proximate the ap l al sh h ic wh s ct ri st States into 12 di regulans io ut it st in ry to si po de districts of the Federal proximation is ap ch su nt te ex e th tory agencies to 2 3 4 5 6 possible. 7 (2) STUDY OF 8 ATE SECTOR COMPARABLE PRIV PAY SCALES. 9 (A) IN 10 11 12 13 14 15 16 17 GENERAL.—The nts of compenou am e th e in rm te de to duct a study of employee benefits e lu va e th d an , to id sation pa rs employed to di au d an s nt ta un co provided for, ac region estabch ea in th wi or ct se e in the privat m functions or rf pe o h w ) (1 h ap lished under paragr d by Federal me or rf pe s on ti nc fu similar to the examiners. (B) FACTORS TO 18 19 COUNT.—In 20 identify the 21 22 23 24 25 Council shall con- BE TAKEN INTO AC- e Council shall making such study, th amounts of e th n ee tw be ip sh relation provided with ts fi ne be d an to id compensation pa and the rs to di au or s nt ta un respect to such acco education and of nt ou am e th length of service, gree of difficulty de e th d an nt ou am training, the supervisory of nt te ex e th d, me of the work perfor •HR 3567 EH https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis z 3 1 or managerial responsibility, and such other fac- 2 tors as the Council may determine to be appro- 3 priate. 4 (3) CLASSIFICATION OF FEDERAL EXAMINER PO- 5 SITIONS.—The Council shall devise a system for clas- 6 sifying Federal examiners on the basis of the factors 7 described to in paragraph (2) and such other factors as 8 the Council may determine to be appropriate. In devel- 9 oping such classification system, the Council shall con- 10 sider the manner in which examiners were classified by 11 the Federal depository institutions regulatory agencies 12 and regional banks, branches, or offices of such agen- 13 cies before the date of the enactment of this Act. 14 (4) REGIONAL PAY SCALES REQUIRED TO BE ES- 15 TABLISHED.—The Council shall establish a rate of pay 16 for each position in the classification system established 17 under paragraph (3) within each region established 18 under paragraph (1). The rate of pay established for 19 each position within each region shall be comparable to 20 the average amount of compensation paid to private 21 sector accountants and auditors within the region 22 whose positions most closely correspond to the position 23 in the classification system, as determined by the 24 Council on the basis of the results of the study con- 25 ducted under paragraph (2). In establishing such rates •HR 3567 IH https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4 ny differa t n u o c c a to in ke all ta of pay, the Council sh provided on ts fi ne be of e lu va ence in the average and auditors s nt ta un co ac or ct behalf of private se Federal ed id ov pr ts fi ne be e of and the average valu 1 2 3 4 examiners. 5 6 7 8 9 COMPLY O T D E R I U Q E R S ENCIE (b) REGULATORY AG LE.—Each A C S Y A P D N A M E T ION SYS WITH CLASSIFICAT nd each a y c n e g a ry to la stitutions regu Federal depository in which emy c n e g a h c u s of , or office regional bank, branch ners shalli m a x e l a r e d e F s oy pl 10 sitions in po to s r e n i m a x e l a (1) assign such Feder 11 established m e t s y s on ti ca fi si as cl compliance with the 12 on (a)(3); and ti ec bs su r e d n u 13 compliance in s on ti si po h c u s (2) establish pay for 14 nder subsecu d he is bl ta es e al sc with the regional pay 15 16 tion (a)(4). L ALLOWE V A R T ; S T N E M N SSIG (C) TEMPORARY A 17 ons the ti la gu re y b e cil shall prescrib n u o C e h T . S E C N A 18 19 manner in whichr temporary fo d e n i m r e t e d e b l (1) rates of pay shal 20 region in e th e id ts ou s r e Federal examin of s t n e m n g i s s a 21 mployed; and e y rl la gu re e ar y e which th 22 expenses el av tr r fo e bl mounts allowa a e th ) 2 ( 23 s performing r e n i m a x e l a r e d e ermined for F t e d e b l al sh 4 2 oyment. l p m e of es ac pl from their regular y a w a es ti du 25 •HR 3567 M 5 ENDMENTS.(d) TECHNICAL AND CONFORMING AM Federal Re(1) Subsection (1) of section 11 of the 1 2 dserve Act (12 U.S.C. 248(1)) is amende d in(A) by striking out "shall be fixed" an 3 4 subject to serting in lieu thereof "shall be fixed, on Examisection 2(b) of the Depository Instituti 5 6 7 8 d nation Improvement Act of 1985,"; an d. (B) by striking out the proviso at the en 11 5240 of the (2) The second paragraph of section amended by strikRevised Statutes (12 U.S.C. 481) is Secretary of the ing out "with the approval of the 12 Treasury". 9 10 13 14 15 16 17 18 19 20 21 22 23 24 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 5240 of the (3) The third paragraph of section ended by strikRevised Statutes (12 U.S.C. 482) is am ing in lieu thereof ing out "The Comptroller" and insert sitory Institution po De e th of b) 2( n tio sec to ct je ub "S , the CompExamination Improvement Act of 1985 troller". h designated (4) The first sentence of the paragrap ral Deposit Insurthe "Fifth" of section 9 of the Fede ded by inserting ance Act (12 U.S.C. 1819) is amen tory Institution si po De e th of b) 2( n tio sec to t ec bj su "( 85)" after "cornExamination Improvement Act of 19 pensation". •HR 3567 111 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 6 e Federal th of 12 n io ct se of ) (a on (5) Subsecti (a)) is amended 32 14 C. S. U. 2 (1 t Ac nk Ba an Home Lo sation" and inserten mp co e th x fi nd "a t ou ng ki ri by st 2(b) of the n io ct se to ct je ub (s nd "a f eo ing in lieu ther Improvement Act n io at in am Ex n io ut it st In ry to Deposi 1 2 3 4 5 of 1985) fix the compensation". Loan Bank me Ho l ra de Fe e th of 19 n io (6) Sect 6 7 dAct (12 U.S.C. 1439) is amende compensae th x fi nd "a t ou ng ki ri st by (A) 8 9 12 nd (subject to "a f eo er th eu li in g in rt se in d an " tion Institution Examisection 2(b) of the Depository fix the compen) 85 19 of t Ac t en em ov pr nation Im 13 sation", and 10 11 14 15 16 17 18 19 20 21 22 23 24 25 nd sentence. (B) by striking out the seco of the Federal a) 9( 20 n io ct se of ) (4 h ap (7) Paragr )) is amended by (a 89 17 C. S. U. 2 (1 t Ac n Credit Unio inserting in d an " on ti sa en mp co r ei striking out "fix th the Depository of b) 2( n io ct se to t ec bj lieu thereof "(su 1985) fix of t Ac t en em ov pr Im n Institution Examinatio their compensation". (c) of the Feder08 10 n io ct se of ) (1 h ap gr (8) Para uncil Act of Co n io at in am Ex ns io ut al Depository Instit ent made by seedm en am e th by ed at gn si 1978 (as rede 1)) is amended by )( (c 07 33 C. S. U. 2 (1 )) (1 tion 7(b) le 5, United tit of ns io is ov pr e th to ct striking out "subje •HR 3567 111 7 1 2 3 e service, iv it et mp co e th to ng States Code, relati y rates,". a p e l u d e h c S l a r e n e fication, and G AL DEPOSI- SEC. 3. 4 R TATUS OF FEDE S Y C N E G A T N E INDEPEND REGULATORY RY INSTITUTIONS TO PURPOSE.-It 5 6 this 1 classi- AL (a) CONGRESSION nd (with respect a e, id ov pr to n io ct se AGENCIES. is the purpose of to certain Federal clarify that to ) es ci en ag ry to utions regula 7 depository instit enactment of this e th of te da e th re effect befo 8 certain laws in that— g, in id ov pr s a d e u r t s n 9 Act shall be co ral depository e d e F of ns io at er (1) because the op 10 funds deh t i w id pa e ar es regulatory agenci ns io ut it st in 11 institutions ry to si po de e th n o m assessments o r f d ve ri 2 1 t from public o n d n a te la gu re es which such agenci 13 e budget th to t ec bj su e b t o agencies shall n h c u s , s d n u f 14 tablished for es s e r u d e c o r p w revie and appropriation 15 nding; and u f ic bl pu e iv ce re h c agencies whi 16 d provide n a y a p to d e s u ause the funds c e b ) 2 ( 17 s are derived e i c n e g a h c u s of ees benefits for employ 18 ds, such n u f ic bl pu m o r f t ssessments and no a h c u s m o r f 19 and regulas w a l e th to t ec shall not be subj s e e y o l p m e 0 2 to public emle ab ic pl ap es at d St tions of the Unite 21 ed by the ib cr es pr on ti la gu ncluding any re (i s ee oy pl 2 2 Secretary of e h t r o t n e m e g a l Man Office of Personne 23 cers and fi of of y a p of te relating to the ra y r u s a e r T e th • 24 ited States). n U e h t of s e e y o l p m e 25 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis •HR 3567 113 •-•/.....-••••• 8 2 . (b) INDEPENDENT AGENCY STATUS T SUBJECT TO (1) OFFICERS AND EMPLOYEES NO 3 ates Code, is St ed it Un 5, e tl Ti . WS LA E IC CIVIL SERV 4 amended- 1 rnment cor(A) in section 103 (defining Gove e semicolon the th re fo be g in rt se in by ), on ti pora ral Deposit Insurfollowing: "(other than the Fede Savings and l ra de Fe e th d an n io at or rp ance Co 5 6 7 8 Loan Insurance Corporation)"; pendent esde in g in in ef (d 4 10 n io ct se in (B) 9 I 10 the Postal Rate r "o t ou ng ki ri st by , t) en hm is tabl eu thereof ", the Commission" and inserting in li of Governors d ar Bo e th , on si is mm Co te Postal Ra , the Federal em st Sy e rv se Re l ra de Fe e th of National Credit Home Loan Bank Board, and the 11 12 13 14 15 Union Administration"; 16 105 (defining Executive f the followeo er th d en e th at ng di ad agency), by does not include rm te h uc "S : ce en nt se w ne g in the Currency."; the Office of the Comptroller of ing officer), by (D) in section 2104 (defin following new sube th f eo er th d en e th at ng di ad (C) in section 17 18 19 20 21 22 section: 23 24 ., https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis "(C) FEDERAL DEPOSITORY 25 TORY AGENCIES.—Except •HR 3567 EH GULAINSTITUTIONS RE ovided to the extent otherwise pr 9 ent of this m t c a n e e h t f o er the date t f a d e t c a n e t c 1 by an A ection, s b u s s i h t o t e c plicit referen x e s e k a m h c i h 2 subsection w treated as e b l l a h s s e i t i t n e following e h t f o y n a f o r e 3 no offic s of this title: e s o p r u p r o f r e c i 4 an off Reserve l a r e d e F e h t f ernors o 1) Board of Gov ( " 5 System. 6 Currency. e h t f o r e l l o r t Comp 2) Office of the ( " 7 orporation. C e c n a r u s n I t i s 3) Federal Depo ( " 8 Board. k n a B n a o L e m ) Federal Ho 4 ( " 9 ce Corpon a r u s n I n a o L ngs and 5) Federal Savi ( " 10 ration. 11 n."; and o i t a r t s i n i m d A redit Union C l a n o i t a N ) 6 ( " 12 loyee), by p m e g n i n i f e d ( 2105 (E) in section w sub13 e n g n i w o l l o f e d thereof th n e e h t t a g n i d ad 14 ction: e s 5 1 NS REGULAO I T U T I T S N I POSITORY E D L A R E D E F ) "(f 16 provided e s i w r e h t o t n t to the exte p e c x E — . S E I C 17 TORY AGEN ent of this m t c a n e e h t f ter the date o f a d e t c a n e t c 18 by an A section, b u s s i h t o t e c licit referen p x e s e k a m h c i h 19 subsection w be treated l l a h s s e i t i t n e he following t f o y n a f o e e 20 no employ his title: t f o s e s o p r u p r o f 21 as an officer Reserve l a r e d e F e h t overnors of G f o d r a o B ) 1 ( " 22 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 23 24 25 System. Currency. e h t f o r e l l o r t e Comp "(2) Office of th rporation. o C e c n a r u s n I osit "(3) Federal Dep HR 3567 HI 2 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 10 1 2 3 ank Board. B n a o L e m o H l a r e "(4) Fed nce Corpoa r u s n I n a o L d n a s "(5) Federal Saving ration. stration.". ni mi Ad n o i n U it ed "(6) National Cr 4 DGET AND U B O T T C E J B U S (2) AGENCIES NOT 5 101 of title 31, 1 n o i t c e S — . W E I V APPROPRIATION RE 6 t "or the ou ng ki ri st y b d e d n is ame United States Code, 7 ereof "the Suth eu li in g in rt se d in Supreme Court" an 8 to audit t ec bj su is h c i h w rt, or any agency u o C e m e r p 9 section 714". r e d n u l a r e n e G r e by the Comptroll 10 he Act entitled T — . Y L P P A T O N L L (C) PRIOR ACT SHA 11 rvice of the se l vi ci e iv ut ec ex ding the classified 12 "An Act exten and any , 0 4 9 1 , 6 2 r e b m approved Nove d n a ." es at St d e t i 13 Un pply to any a t o n l al sh t c A sued under such is r de or e v i t u c e x E 14 made subparas t n e m d n e m a e ee to whom th 15 officer or employ on (b)(1) apply. ti ec bs su of ) E ( d n a ) 16 graphs(D In the case . S E E Y O L P M E ENTS TO PAY M S S E S S A ) d ( 17 pository institude l a r e d e F y n a nt imposed by 18 of any assessme ions reguut it st in ry to si po gency on the de a ry to la gu re s on ti 19 t of any such n u o m a e th of n ency, the portio 20 lated by such ag nd benea n o i t a s n e p m o c used to provide is h c i h w t n e m s s e s s 21 a shall not be y c n e g a h c u s and employees of rs ce fi of r fo ts fi 2 2 on contained in ti ta mi li y n a of s e nt for purpos 23 taken into accou h assessment. c u s of t n u o m a e th n 24 any other law o MENTS. D N E M A G N I M R O F ICAL AND CON N H C E T ) e ( 5 2 •flit 3567 III 11 1 (1)(A) Subsection (a) of section 714 of title 31, 2 United States Code, is amended by striking out "and" 3 and by inserting before the period the following: ", the 5 Federal Home Loan Bank Board, the Federal Home Loan Banks, the Federal Savings and Loan Insurance 6 Corporation, and the National Credit Union Adminis- 7 tration". 4 (B) The heading for such section 714 is amended 8 to read as follows: 9 10 TITUTIONS Y "SEC. 714. AUDIT OF FEDERAL DEPOSITOR INS 11 REGULATORY AGENCIES AND DEPOSITORY IN- 12 STITUTIONS EXAMINATIONS COUNCIL.". 13 (2) Subsection (b) of section 7 of the First Defi- 14 ciency Appropriation Act, fiscal year 1936 (15 U.S.C. 16 712a(b)) is amended by striking out paragraphs 1. and 11. and by redesignating paragraphs 2. through 12. as 17 paragraphs (1) through (10), respectively. 15 18 (3) The third proviso of the provision appearing 20 under the heading "FEDERAL HOME LOAN BANK ADMINISTRATION" in title I of the Independent Offices 21 Appropriation Act, 1944 (12 U.S.C. 1439a) is amend- 19 23 ed by striking out ", subject to subsections (a) and (b) of section 7 of the First Deficiency Appropriation Act, 24 1936". 22 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis •HR 3567 IH https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12 (4) Paragraph (5) of section 402(c) of the National of sing Act (12 U.S.C. 1726(c)(5)) and section 19 1 Hou 2 4 9) the Federal Home Loan Bank Act (12 U.S.C. 143 are each amended by striking out the last sentence. 5 (5) Subsection (b) of section 7 of the Federal De- 3 7 posit Insurance Act (12 U.S.C. 1817(b)) is amended by : adding at the end thereof the following new paragraph 8 "(9) AMOUNTS RECEIVED 6 9 NOT APPROPRIATED amount received by the Corporation pursuant assessment under this section may be construed to be FUNDS.—No 10 to any 11 Government funds or appropriated money.". (12 (6) Section 404 of the National Housing Act 12 13 thereof U.S.C. 1727) is amended by adding at the end 14 the following new subsection: 15 "(j) AMOUNTS RECEIVED NOT APPROPRIATED nt No amount received by the Corporation pursua any deposit 17 to any premium assessed under this section or to be Govern18 required under this section may be construed 16 FUNDS. 19 ment funds or appropriated money.". Federal (7) The last sentence of section 19 of the nded me Loan Bank Act (12 U.S.C. 1439) (as ame 20 21 Ho 23 before the by paragraph (4)) is amended by inserting h assessperiod "; amounts received pursuant to suc 24 t funds ments may not be construed to be Governmen 25 or appropriated money". 22 •HR 3567 LH 13 1 (8) Subsection (a) of section 18 of the Federal 2 Home Loan Bank Act (12 U.S.C. 1439(a)) is hereby 3 repealed. 4 (9) Subsection (b) of section 18 of the Federal 5 Home Loan Bank Act (12 U.S.C. 1439(b)) is amended 6 by adding at the end thereof the following new sen- 7 tence: "No amount received by the board pursuant to 8 any assessment under this subsection may be construed 9 to be Government funds or appropriated money." 10 (10) Section 105 of the Federal Credit Union Act 11 (12 U.S.C. 1755) is amended by adding at the end 12 thereof the following new subsection: 13 "(f) AMOUNTS RECEIVED NOT APPROPRIATED 14 FUNDS.—No amount received by the Board pursuant to any 15 fee assessed under this section and no amount referred to in 16 subsection (e)(3) shall be construed to be Government funds 17 or appropriated money.". 18 (11) Subsection (c) of section 18 of the Federal 19 Home Loan Bank Act (12 U.S.C. 1438) is amended- 20 (A) in paragraph (1), by striking out ", and 21 subject to any limitation hereon which may here- 22 after be imposed in appropriation Acts,"; 23 (B) in paragraph (5), by striking out ", and 24 obligations and expenditures of the board and 25 such agencies in connection with this subsection https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis •HR 3567 111 ' https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 14 1 shall not be considered as administrative ex- 2 penses"; and 3 (C) in the first sentence of paragraph (6), by 4 striking out "(A) annually prepare and submit a 5 budget program as provided in title I of the Gov- 6 ernment Corporation Control Act with regard to 7 wholly owned Government corporations, and for 8 purposes of this sentence, the terms 'wholly 9 owned Government corporations' and 'Govern- 10 ment corporations', wherever used in such title, 11 shall include the board, and (B)"; and 12 (D) in the second sentence of paragraph (6), 13 by striking out "first budget program shall be for 14 the first full fiscal year beginning on or after the 15 date of the enactment of this subsection, and the". 16 (12) Paragraph (6) of the Reorganization Plan 17 18 Numbered 6 of 1961, as ratified and affirmed by the Act entitled "An Act to prevent disruption of the 20 structure and functioning of the Government by ratifying all reorganization plans as a matter of law." and 21 approved October 19, 1984 (98 Stat. 2705), is hereby 22 repealed. 19 24 (13) The provision appearing under the heading "LIMITATION ON ADMINISTRATIVE AND EXAMINA- 25 TION EXPENSES, FEDERAL HOME LOAN BANK 23 •HR 3567 EH ••••••••••••••••••110.••••••..... .•' 15 1 BOARD" in title 111 of the Independent Offices Appro- 2 priation Act, 1961 (12 U.S.C. 1438a) is amended by 3 striking out the second proviso. 4 (14) Paragraph (9) of section 5(d) of the Home 5 Owners' Loan Act of 1933 (12 U.S.C. 1464(d)(9)) is 6 amended by striking out the last sentence. 7 (15) Paragraph (3) of section 407(m) of the Na- 8 tional Housing Act (12 U.S.C. 1730(m)(3)) is amended 9 by striking out the second to last sentence. 10 (16) Paragraph (6) of section 408(h) of the Na- 11 tional Housing Act (12 U.S.C. 1730a(h)(6)) is hereby 12 repealed. 13 (17) Paragraph (1) of section 209(b) of the Feder- 14 al Credit Union Act (12 U.S.C. 1789(b)) is hereby 15 repealed. 16 (18) Paragraph (2) of section 9101 of title 31, 17 United States Code, is amended by adding at the end 18 thereof the following new subparagraph: "(K) The Federal Savings and Loan Insur- 19 20 ance Corporation.". 21 (19) Paragraph (3) of section 9101 of title 31, 22 United States Code, is amended by striking out sub- 23 paragraph (E) thereof. 24 25 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis (20) Section 714 of title 31, United States Code, is amended— •HR 3567 EH 'Wm& https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 16 ured bank" each (A) by striking out "ins serting in lieu in d an s ar pe ap rm te e such 1 2 plac 3 4 stitution"; and in ry to si po de ed ur ns "i f thereo eof the follower th d en e th at ng di ad (B) by 5 ing new subsection: of this sectiones os rp pu or —F S. ON TI NI "(e) DEFI ITUTION.—The ST IN RY TO SI PO DE D RE "(1) INSU stitution' meansterm 'insured depository in the meaning n hi it (w nk ba d re su in y "(A) an h) of the Federal 3( n io ct se by rm te ch su given to 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Deposit Insurance Act), ion (within the ut it st in d re su in y an "(B) by section 401(a) of rm te ch su to n ve gi g meanin , and the National Housing Act) union (within the it ed cr d re su in y an "(C) section 101(7) of by rm te ch su to n ve gi g meanin Act. the Federal Credit Union he term 'bank —T Y. AN MP CO G IN LD HO K "(2) BAN g company in ld ho nk ba y an s an holding company' me rm by section te ch su to n ve gi g in (within the mean of 1956) t Ac y an mp Co g in ld 2(a)(1) of the Bank Ho y (within the an mp co g in ld ho an lo d and any savings an n 408(1)(D) of the io ct se by rm te ch su to meaning given .. National Housing Act).". •HR 3567 Ill 17 3 tutes (12 (21) Section 324 of the Revised Sta and shall perU.S.C. 1) is amended by striking out ", ion of the Secform his duties under the general direct 4 retary of the Treasury". 1 2 tutes (12 (22) Section 328 of the Revised Sta to be appointU.S.C. 8) is amended by striking out ", of the Treasury,". ed and classified by the Secretary ts made by sub(e) EFFECTIVE DATE.—The amendmen 5 6 7 8 tion (b)(1) shall apply with sec sub of ) (E d an ) (D hs ap gr ra pa 9 ointed or employed after 10 respect to officers and employees app t. 11 the date of the enactment of this Ac RVICE EMPLOYEE.—Each SE L VI CI OF ER SF AN TR (0 12 tory agency may estab13 Federal depository institutions regula 14 lish a procedure for15 16 17 18 19 20 any officer (1) transferring out of the civil service would no longer or employee of any such agency who 5, United States be subject to the provisions of title this section but Code, under the amendments made by ch amendments for the prospective application of su under subsection (e), and 21 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis imbursement (2) providing such compensation or re equitable to the agency determines to be fair and 22 as 23 24 the loss of any compensate such officer or employee for ts which results efi ben ee oy pl em d te la mu cu ac or rights 25 from such transfer. •HR 3567 M https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 18 ER TRAINING. OF FEDERAL EXAMIN C. 4. CONSOLIDATION 1 SE hereby declared to is It .— CY LI PO L NA IO (a) CONGRESS 2 programs for l al e at id ol ns co to ss re 3 be the policy of the Cong of such States as s er in am ex nd (a s er in 4 training Federal exam h may otherwise be ic wh ) ms ra og pr ch su in e 5 may participat ions regulatory ut it st in ry to si po de l ra 6 conducted by the Fede nducted by the co d an d he is bl ta es ol ho 7 agencies in one sc pository InDe l ra de Fe e th of ) (d 1006 8 Council under section s redesignated (a 78 19 of t Ac l ci un Co n 9 stitutions Examinatio manner a in )) (1 b) 7( n io ct se de by 10 by the amendment ma 11 which would 12 13 14 15 16 17 18 19 ity education for al qu gh hi m, or if un a e (1) provid deral deFe ch ea by ed oy pl em the Federal examiners ency; and ag ry to la gu re ns io ut it st in pository oying additional pl em r fo e bl la ai av y ne (2) make mo ication of pl du t en rr cu e th g examiners by eliminatin l depository ra de Fe e th by d te uc nd training programs co d costan t en ci fi ef an in es ci institutions regulatory agen effective manner. CONSOLIDATED G N I T N E M E L P M I R O F (b) PROPOSAL 20 a proposal p lo ve de l al sh l ci un Co —The 21 TRAINING PROGRAM. with respect to ss re ng Co e th of cy li po 22 for implementing the hool. In desc e on in ng ni ai tr aminer 23 the consolidation of ex considerl al sh l ci un Co e th , al os 24 veloping the prop would be suffium ul ic rr cu rd da an st (1) whether a 25 or whether s er in am ex l ra de Fe cient for training all 26 •HR 3567 III 19 1 2 3 4 5 6 7 8 particular training needs exis t with respect to each Federal depository institutions regulatory agency which would require additional cour ses for examiners employed by each such agency; (2) whether the faculty shou ld consist primarily of professional educators or pr ofessional examiners and the extent to which both educators and examiners should be appointed to the facu lty; 9 (3) the manner in which the school would be ad10 ministered as a consolidated tr aining institution; and 11 (4) the manner in which the cost of operating the 12 school would be distributed am ong the Federal deposi13 tory institutions regulatory ag encies. 14 (c) REPORT TO CONGREss.-Before the end of the 615 month period beginning on the date of the enactment of th is 16 Act, the Council shall subm it a report of the Council's pr o17 posal under subsection (b) to the Committee on Banking, Fi18 nance, and Urban Affairs of the House of Representative s 19 and the Committee on Bank ing, Housing, and Urban Affair s 20 of the Senate. The report sh all contain21 (1) a detailed statement of th e findings and con22 elusions of the Council with re spect to the implementa23 tion of Congressional policy on the consolidation of el24 aminer training in one school; ii https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis •HR 3567 W https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 20 1 (2) the Council's recommendations for such legis- 2 lation as it considers necessary or appropriate in order 3 to consolidate such training in the manner proposed by 4 the Council; and 5 5 (3) the amount of money which the Council esti• 6 mates each Federal depository institutions regulatory 7 agency would save as a result of consolidating the 8 training of Federal examiners in one school. 9 SEC. 5. GRADUATE DEGREE PROGRAM IN FINANCIAL MANAGEMENT ANALYSIS. 10 11 (a) IN GENERAL.—The Council shall study the feasibili- 12 ty of establishing a graduate degree program in financial 13 management analysis for officers and employees of Federal 14 depository institutions regulatory agencies and State deposi15 tory institutions supervisory agencies. In studying the feasi16 bility of establishing such program, the Council shall17 18 19 (1) estimate the cost of establishing and operating such a program; (2) consider whether- 20 (A) such program should be conducted direct- 21 ly by the Council or by a Federal depository insti- 22 tutions regulatory agency, 23 (B) such program should be conducted in 24 conjunction with the training school referred to in 25 section 4(a), or •HR 3567 111 21 1 (C) the Council should enter into an agree- 2 ment with a private or State institution of higher 3 education to conduct the program and issue any 4 degree established under such program either in 5 conjunction with a similar degree program already 6 conducted by such institution or as separate program; and • I • 8 (3) consider what minimum requirements should 9 be established for the admission of any individual into 10 the program, including prerequisites relating to the un- 11 dergraduate or other education of such individual, the 12 experience such individual has had in the field of de- 13 pository institution examination at the time of such ad- 14 mission, and the length of service with the Federal de- 15 pository institutions regulatory agency or State deposi- 16 tory institutions supervisory agency by which such in- 17 dividual is employed at the time of such admission. 18 (b) REPORT TO CONGRESS. 19 (1) REPORT REQUIRED.—Before the end of the 1- 20 year period beginning on the date of the enactment of 21 this Act, the Council shall submit a report of the 22 Council's study of the feasibility of establishing a grad- 23 uate degree program in financial management analysis 24 to the Committee on Banking, Finance, and Urban Af- 25 fairs of the House of Representatives and the Commit- https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis •IN 3567 III 22 1 the tee on Banking, Housing, and Urban Affairs of 2 Senate. 3 ; https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4 (2) FINDINGS AND CONCLUSIONS.—The report required under subsection (a) shall contain 6 (A) a detailed statement of the findings and conclusions of the Council with respect to such 7 study; 5 (B) the Council's recommendations for such 8 10 legislation as it considers necessary or appropriate in order to establish such program in the manner 11 proposed by the Council; and 9 13 (C) the estimated cost of establishing and ed conducting the program in the manner propos 14 by the Council. 12 15 16 17 18 19 20 21 22 infor(3) AGENCY APPROVAL.—In addition to the required mation described in paragraph (2), the report not each under paragraph (1) shall indicate whether or ncy has Federal depository institutions regulatory age in such approved the proposal of the Council contained reasons report and, if any such agency has not, the (to the given by such agency for any failure to approve extent the Council has such information). •HR 3567 IH 23 • 1 SEC. 6. MINIMUM REQUIREMENTS FOR STATE EXAMINATIONS 2 OF FEDERALLY REGULATED OR INSURED IN- 3 STITUTIONS. 4 (a) CONGRESSIONAL PURPOSE.—It is the purpose of 5 this section6 (1) to establish a uniform procedure for reviewing, 7 with the consent of the States, the adequacy of State 8 examinations of depository institutions which are also 9 subject to examinations by Federal depository institu- 10 tions regulatory agencies; and • 11 (2) to prohibit Federal depository institutions reg- 12 ulatory agencies from relying on any such State exami- 13 nations in lieu of conducting their own examinations of 14 such depository institutions if the State examinations 15 are deemed inadequate pursuant to such review or the 16 State refuses to allow such review to be made. 17 (b) ESTABLISHMENT OF MINIMUM REQUIREMENTS.- 18 (1) IN GENERAL—In consultation with the liaison 19 committee established by the Council pursuant to sec- 20 tion 1007 of the Federal Depository Institutions Ex- 21 amination Council Act of 1978 (as redesignated by the 22 amendment made by section 7(b)(1)), the Council shall 23 establish minimum requirements for examinations of 24 depository institutions by State depository institution 25 supervisory agencies in order for any such examination • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis a *Mt 3567 IE https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 24 1 ed adequate for em de to on uti tit ins ry to si po de y an of 2 purposes of Federal law. tablishing the es In . EW VI R RE FO IA ER IT CR ) (2 3 paragraph (1) for in d be ri sc de ts en em ir qu m re mu ni mi isory agency, the any State depository institution superv 4 5 ting toCouncil shall establish standards rela of deposi(A) the frequency of examinations 6 7 tory institutions, 8 of such (B) the quality and thoroughness 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 examinations, r classify(C) the standards and procedures fo actices, ing loans and supervising lending pr examinof er mb nu e th n ee tw be o ti ra e th (D) institution ry to si po de e at St y an by ed oy pl ers em of depository supervisory agency and the number iners, institutions examined by such exam experience of (E) the education, training, and individuals emexaminers, supervisors, and other lved in convo in e ar o wh cy en ag ch su by ployed ations, and ducting or supervising such examin procedures as (F) such other conditions and appropriate. the Council may determine to be REVIEW.—At least QUEST FOR PERMISSION TO (c) RE shall request l ci un Co e th , ar ye ar nd le ca 24 once during each y agency which or is rv pe su n io ut it st in ry to si po de 25 each State •HR 3567 111 25 1 conducts examinations of depository institutions within such 2 State which are also subject to examinations by a Federal 3 depository institutions regulatory agency to allow the Council 4 to conduct a review, in accordance with subsection (d), of the 5 administration of such examinations by such State agency. 6 • (d) REVIEW.- 7 (1) IN GENERAL. If, pursuant to a request under 8 subsection (c), the Council receives permission to 9 review the administration of examinations by a State 10 depository institution supervisory agency, the Council 11 shall determine whether such agency meets the mini- 12 mum requirements established under subsection (b) in 13 administering such examinations. 14 (2) PROCEDURES. The Council shall prescribe 15 by regulations the procedures for conducting any 16 review under paragraph (1). 17 (e) NOTIFICATION OF FAILURE TO MEET MINIMUM https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 18 REQUIREMENT.19 (1) IN GENERAL-If, at any time, the Council 20 determines a State depository institution supervisory 21 agency does not meet the minimum requirements es- 22 tablished under subsection (b), the Council shall notify 23 the head of such agency of such determination. Such 24 determination and notice shall not be made public by 25 the Council. •HR 3567 111 [ https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 26 notice under ny —A N. IO AT AN PL EX (2) DETAILED a report conby d ie an mp co ac be l al sh on this subsecti the circumstances by of n io at an pl ex ed il ta de a taming not to be in d un fo s wa cy en ag e th h reason of whic established under ts en em ir qu re e th th wi ce complian 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 subsection (b). DEFICIENCY. E TH G IN DY ME RE R FO OD (3) PERI described in paragraph n io at in rm te a de ng ki ma Upon basis of all the e th on e, ib cr es l pr al sh l (1), the Counci od of time it will ri pe e th , se ca e th of s ce circumstan giving rise cy en ci fi de e th re cu to cy provide to the agen y action under an ng ki ta re fo be n io at in rm to such dete be exy ma ed ib cr es pr so od ri subsection (f). The pe pt that the ce ex , on ti re sc di s it in l ci tended by the Coun uding any such cl in , se ca y an in ed ib cr period so pres years. extensions, shall not exceed 3 INSTITUTIONS RY TO SI PO DE L RA DE (f) NOTICE TO FE depository institue at St y an If . ES CI EN REGULATORY AG 19 tion supervisory agencycil under subun Co e th by t es qu re y an s (1) refuse 20 ministration ad e th ew vi re to on section (c) for permissi 21 ch agency, or su by ns io at in am ex of 22 giving rise to a cy en ci fi de y an dy me re to s (2) fail 23 n the period hi it 'w 1) )( (e on ti ec bs su r determination unde 24 subsection (e)(3), r de un l ci un Co e th by d of time allowe 25 •Mt 3567 111 /1. 4. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 27 l depository institutions ra de Fe ch ea ify not ll sha l ci un Co e th 1 comply. If any to e lur fai or l usa ref ch su of cy en ag ry 2 regulato utions which are subject to tit ins ry to si po de of ns io at in am ex 3 gional banks, re by d te uc nd co e ar cy en ag ch su by n 4 examinatio , the agency shall cy en ag ch su of s ice off r he ot or , es 5 branch other office of any notice or , ch an , br nk ba ch su ch ea ify not 6 preceding sentence. 7 received by such agency under the ATE EXAMINATIONS PROST ON CE AN LI RE LE SO ) (g 8 FECT.—While any notice EF IN IS CE TI NO E IL WH D TE BI HI 9 ate depository inSt y an to t ec sp re th wi (f) on ti ec bs su 10 under , no Federal depositoect eff in is cy en ag y or is rv pe su ion tut 11 sti regional bank, no d an cy en ag ry to la gu re ons 12 ry instituti may rely on any cy en ag ch su y an of ice off r he ot or , 13 branch agency in lieu of cone at St ch su by n io at in am ex of rt po 14 re r any Federal de un ed ir qu re e is rw he ot ns io at in am 15 ducting ex Federal agency. ch su by ed ib cr es pr on ti la gu re y an 16 law or ATE EXAMINERS.—The ST OF N IO AT IC IF RT CE ) (h 17 certification proer in am ex e at St a ish abl est ll 18 Council sha shall, at the request l ci un Co e th m, ra og pr ch su r de Un . 19 gram supervisory agencyon uti tit ins ry to si po de e at St y an of 20 n, training, and experience io at uc ed e th ew vi re ) (1 21 in subsection (b)(2)(E); and to ed rr fe al re du vi di in y an of 22 vidual as the di in ch su of ts tes ch su er st ni mi (2) ad 23 Council considers appropriate, 24 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 28 m 1 to determine whether such individual is qualified to perfor h 2 the functions of the position held by such individual with suc ts 3 agency. If the Council determines that such individual mee ) 4 the minimum standards established under subsection (b)(2)(E ifi5 with respect to such position, the Council shall issue a cert 6 cate of qualification to such individual. 7 8 9 10 11 12 (i) TECHNICAL AND CONFORMING AMENDMENTS.(1) The eighth paragraph of section 9 of the Federal Reserve Act (12 U.S.C. 326) is amended by adding at the end thereof the following new sentence: "The directors shall not approve any examination by any State authority while any notice under section 6(f) 14 eof the Depository Institution Examination Improv such ment Act of 1985 is in effect with respect to 15 authority.". 13 16 17 18 19 of (2) The second sentence of section 7(a)(2)(A) U.S.C. the Federal Deposit Insurance Act (12 r than 1817(a)(2)(A)) is amended by inserting "(othe any such commission, board, or authority with respect 21 y to which a notice under section 6(f) of the Depositor 5 is Institution Examination Improvement Act of 198 22 m in effect)" after "authority" the first place such ter 23 appears in such sentence. 20 (3) The second to last sentence of section 8 of the eral Home Loan Bank Act (12 U.S.C. 1428) is 24 25 Fed •fiR 3567 111 29 1 amended by inserting "(and any State examination 2 with respect to which a notice under section 6(f) of the 3 Depository Institution Examination Improvement Act 4 of 1985 is in effect shall be deemed inadequate)" after 5 "Home Loan Banks". 6 (4) Subsection (d) of section 204 of the Federal 7 Credit Union Act (12 U.S.C. 1784(d)) is amended by 8 inserting "(other than any such commission, board, or 9 authority with respect to which a notice under section 10 6(f) of the Depository Institution Examination Im- 11 provement Act of 1985 is in effect)" after "credit 12 union". • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 13 SEC. 7. REDESIGNATION OF EXAMINATION COUNCIL AS DE- 14 POSITORY INSTITUTIONS EXAMINATION COUN- 15 CIL. 16 (a) IN GENERAL.—The Financial Institutions Examina- 17 tion Council established by section 1004 of the Federal Fi18 nancial Institutions Examination Council Act of 1978 is 19 hereby redesignated as the "Depository Institutions Exami20 nation Council". Any reference in any law, regulation, docu21 ment, record, or other paper of the United States to the Fi22 nancial Institutions Examination Council shall be deemed to 23 be a reference to the Depository Institutions Examination 24 Council. 25 (b) TECHNICAL AND CONFORMING AMENDMENTS. •HR 3567 111 30 1 (1) Section 1001 of Federal Financial Institutions 2 Examination Council Act of 1978 is amended to read 3 as follows: 4 5 "SEC. 1001. SHORT TITLE. This title may be cited as the 'Federal Depository Insti- 6 tutions Examination Council Act of 1978'.". • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 7 (2) The Federal Depository Institutions Examina- 8 tion Council Act of 1978 (12 U.S.C. 3301 et seq.) (as 9 redesignated by paragraph (1)) is amended— 10 (A) by striking out "Financial Institutions" 11 each place such term appears in such Act and in- 12 serting in lieu thereof "Depository Institutions", 13 and 14 (B) by striking out "financial institutions" 15 each place such term appears in such Act and in- 16 serting in lieu thereof "depository institutions". 17 (3) The heading of title X of the Financial Institu- 18 tions Regulatory and Interest Rate Control Act of 19 1978 is amended by striking out "FINANCIAL" and 20 inserting in lieu thereof "DEPOSITORY". 21 (4) Paragraph (3) of section 1003 of the Federal Awl 22 Depository Institutions Examination Council Act of 23 1978 (as redesignated by paragraph (1)) is amended to 24 read as follows: ti •IR 3567 III 31 1 "(3) the term 'depository institution' has the 2 meaning given to such term by section 19(b)(1)(A) of 3 the Federal Reserve Act. 4 (5) Sections 304(1) and 310(a) of the Home Mort- 5 gage Disclosure Act of 1975 (12 U.S.C. 2803(f) and 6 2809) are each amended by striking out "Financial In- 7 stitutions" and inserting in lieu thereof "Depository 8 Institutions". 9 (6) Subsection (e) of section 1112 of the Right to 10 Financial Privacy Act of 1978 (12 U.S.C. 3412(e)) is 11 amended by striking out "Financial Institutions" and 12 inserting in lieu thereof "Depository Institutions". • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 13 (7) Sections 714(a) and 718(a) of title 31, United 14 States Code, are each amended by striking out "Finan- 15 cial Institutions" and inserting in lieu thereof "Deposi- 16 tory Institutions". 17 SEC. 8. DEFINITIONS. 18 For purposes of this Act- 19 (1) COUNCIL.—The term "Council" means the 20 Depository Institutions Examination Council (as redes- 21 ignated by section 7(a). 22 (2) FEDERAL DEPOSITORY INSTITUTIONS REGU- 23 LATORY AGENCIES. The term "Federal depository 24 institutions regulatory agencies" has the meaning given 25 to such term by section 1003(1) of the Federal Deposi- •HR 3567 M https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 32 1 tory Institutions Examination Council Act of 1978 (as 2 redesignated by the amendment made by section 3 7(b)(1)), except that for purposes of sections 3 and 5 4 such term also includes the Federal Savings and Loan 5 Insurance Corporation. 6 (3) DEPOSITORY INSTITUTION.—The term 'de- 7 pository institution' has the meaning given to such 8 term by section 19(b)(1)(A) of the Federal Reserve Act. 9 (4) INSTITUTION OF HIGHER EDUCATION.—The 10 term "institution of higher education" has the meaning 11 given to such term by section 1201(a) of the Higher 12 Education Act of 1965. 13 (5) FEDERAL EXAMINER.—The term "Federal 14 examiner" means any individual employed by a Feder- 15 al depository institutions regulatory agency or a re- 16 gional bank, branch, or other office of such agency 17 whose duties involve the examination of depository 18 institutions. 0 • •HR 3567 IH 1 ...•••.. • of GOve •. BOARD OF GOVERNORS OF THE *41, *0 •.„ FEDERAL RESERVE SYSTEM WASHINGTON, O. C. 20551 RE /4L •• • PAUL A. VOLCKER CHAIRMAN April 17, 1968 The Honorable Jack Kemp House of Representatives Washington, D.C. 20515 Lear Mr. Kemp: The question of whether the Federal Open Market Committee should, as it now does, withhold its directive on open market operations for a period of six to eight weeks after the meeting at which it is adopted--i.e., until after a subsequent meeting—has been much discussed over the years. You ask, in your letter of March 24, that we again consider a change in that procedure. All of us share your objective of wanting to assure that monetary policy decisions contribute to the stability and efficiency of financial markets. In that context, it should be recognized that we do publish our basic monetary policy decisions eMbodied in long-term growth rates for the aggregates very shortly after adoption in February and July of each year. They are discussed and evaluated in the Congress and by the public generally. If we change those decisions or make significant changes in operating procedures or guidelines, they too are announced promptly, as are of course any changes in the discount rate. It is the operating or implementing decisions of the FOMC in the pursuit of continuing basic policy goals that are withheld for six to eight weeks. This has been done in part to avoid the risk that immediate publication will in practice add to volatility in markets, particularly at those times of uncertainty when there is a premium on orderly market processes. The problem arises because frequently operating decisions are necessarily conditional, and market participants will attemict to protect themselves against various outcames even if not implemented, thereby enhancing market volatility. In a broader sense, all these operational decisions are conditional, and subject to change as conditions change-yet publication of the directive might well be interpreted as an implied commitment for some period of time. What we actually do in markets, and the related reserve results, does, of course, receive ample publicity. I might also add that immediate release of short-run operational decisions would likely make them a focus of debate that more constructively and https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 14, The Honorable Jack Kemp -2- properly should be, and are, brought to bear on the kinds of broader issues ccnsidered when our basic policy stance is announced. In any event, as you know there are a number of new members of the FD. As they have a dhance to have experience with the process, I intend to review these matters with them once again, as in the past. ' erely, sp attPQ)(4/1 PAVolcker:SHAxilrod:pjd CCS 86-1582 V-81 bcc: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis r. Axilrod Hrs. Mallardi (2) JACK KEMP 31ST DISTRICT OF NEW YORK Congrus of thc11nitd tats COMMITTEES: APPROPRIATIONS SUBCOMMITTEE: FOREIGN OPERATIONS RANKING MEMBER tont of Representatiuts i33ashington, 20515 PLEASE RESPOND 0 WASHINGTON OFFICE: 2252 RAYBURN OFFICE BUILDING WASHINGTON,D.C. 20515 (202) 225 5265 DISTRICT OFFICES: kA (:1 1101 FEDERAL BUILDING 111 WEST HURON STREET BUFFALO, NEW YORK 14202 (716) 846-4123 BUDGET March 24, 1986 0 4. ..Wp AWN▪▪S S TR Cer• Os)7aaYsa o 017. Hon. Paul A. Volcker, Chairman Board of Governors of the Federal Reserve System Twentieth Street and Constitution Avenue NW Washington, D.C. 20551 r— c,f- 5.1% —e: rin Dear Mr. Chairman: I am writing to ask the Board of Governors to consider a change in the Federal Open Market Committee's current procedure of withholding its monetary policy decisions from the public for a period of six to eight weeks, that is, until after a subse quent Committee meeting has been held. I believe greater confidence in Federal Reserve decisions will result from a more timel y release of the F.O.M.C.'s policy changes -- preferably within twenty-four hours. Legislation to accomplish this has somet imes been offered in Congress, but the question could be resol ved most easily by the Board itself. The hallmark of modern financial, trade, and economic markets is the near-instantaneous worldwide availability of information. In this environment the tradition of withholdin g monetary policy decisions which might have enormous effec ts on global economic conditions often results in rumors and uncertainties which cause unnecessary volatility and specu lation in financial markets. Many prominent economists as well as members of Congress believe the stability and efficiency of world markets would be improved by allowing the Open Market Committee's decisions to be published immediately. I hope the members of the Board of Governors will consider this suggestion as a further step toward strengthening the public's trust and faith in the independence of the Federal Reserve System. Sincerely,41..mwma JCK EMP er of JK:htii https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ongress oo r GOliz• BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 April 14, 1986 The Honorable Ron de Lugo House of Representatives Washington, D.C. 20515 Dear Mr. de Lugo: Thank you for your letter of January 28 regarding the supervisory authority over certain of the banks located in the Virgin Islands. You expressed concern with the rate of lending in relation to deposits of these banks. In your letter, you requested that your office be advised when the Federal Reserve System receives an application for a deposit facility in the Virgin Islands. The Board's staff has been instructed to notify you of any such applications. There are currently four national banks with a total of 16 Virgin Island branches. These are Chase Manhattan Bank, N.A., New York, New York (8 branches), Citibank, N.A., New York, New York (1 branch), First Pennsylvania Bank, N.A., Philadelphia, Pennsylvania (5 branches), and Bank of America NT&SA, San Francisco, California (2 branches). None of these banks has established a branch in the Virgin Islands since 1976. Under the Board's regulations, a bank that is a member of the Federal Reserve System, including a national bank, must file an application or prior notification to establish its initial branch in a foreign country. (The definition of "foreign country" includes the Virgin Islands, for the purposes of these regulations.) A member bank that has a branch in a foreign country may establish additional branches in that country under the Board's "General Consent" procedures, and only has to notify the Board after establishment of the branch. Accordingly, only a member bank that does not currently have a branch in the Virgin Islands would have to file a prior notification or application with the Federal Reserve before establishing a branch there. With respect to your question about the number of large cash transactions by banks in the Virgin Islands, the Federal Reserve System does not directly monitor their cash transactions. The U.S. banks that have a branch presence in the Virgin Islands are national banks and are under the supervision of the Comptroller of the Currency. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ••• The Honorable Ron de Lugo Page Two - I hope this information is useful. if I can be of further assistance. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Please let me know Sincerely, SiDonald J. Winn Donald J. Winn Assistant to the Board DK:CO:DJW:vcd/pte (V-33, 86-552) bcc: Don Kline Mrs. Mallardi / Action assigned Mr. Taylor RONDELUGO WASHINGTON OFFICE L.ELEGATE, VIRGIN ISLANDS 2238 RAYBURN HOUSE OFFICE BUILDING WASHINGTON, D C 20515 12021 225 1790 COMMITTEE ON INTERIOR AND INCULAR AFFAIRS SUBCOMMITTEES Tongress of tbe Unita) ttites PUBLIC LANDS NATIONAL PARKS AND RECREATION House of Etpresentatiurs COMMITTEE ON PUBLIC WORKS AND TRANSPORTATION SUBCOMMITTEES atthington, 13.T. 211515 January 28, 1986 AVIATION DISTRICT OFFICES U S FEDERAL BUILDING - BOX 808 ST THOMAS, VIRGIN ISLANDS 00801 18091 774-4408 P 0 BOX 5996 SUNNY ISLE SHOPPING CENTER ST CROIX, VIRGINA ISLANDS 00820 18091 778 5900 SURFACE TRANSPORTATION WATER RESOURCES POST OFFICE AND CIVIL SERVICE COMMITTEE SUBCOMMITTEE POSTAL OPERATIONS AND SERVICES Paul A. Volcker, Chairman Board of Governors Federal Reserve System Twentieth and Constitution Avenue NW Washington DC, 20551 Dear Chairman Volcker; In recent weeks I have been studying the federal reports available on banking operations in the Virgin Islands. The Federal Financial Institutions Examination Council, under the leadership of Robert J. Lawrence, Executive Secretary, has been especially helpful in this effort, and I commend it to you as an excellent example of effective public information. The purpose of this letter, however, is to focus on the supervisory authority of the Federal Reserve System over certain of the banks located in the Virgin Islands. In examining the limited information on overall banking operations in the Virgin Islands, I am concerned by the low rate of lending in relation to deposits. When lending is held below 50% of the deposits from individuals, partnerships or corporations, I question whether banks in the Virgin Islands are meeting their continuing and affirmative obligation to help meet the credit needs of the local community. To help me explore this issue further, please have your office advise me anytime the Federal Reserve System receives an application for a deposit facility in the Virgin Islands. Based on the historical performance of the applicant, I may want to comment on or protest against the awarding of the application. I am making a similar request of the other federal supervisory agencies. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis , t Page 2 Paul A. Volcker January 28, 1986 Finally, to gain additional insight into the operations of the local banking industry, I would be interested in the number of large cash transactions which are reported to the Federal Reserve from the banks over which it exercises supervisory authority in the Virgin Islands, and whether this number is above or below the level you would expect for similar communities in the United States. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Sincerely, . •ALD Ron • Lugo of Congress Me • cc: Robert J. Lawrence Executive Secretary Federal Financial Institutions Examination Council 1776 G Street NW, Suite 701 Washington, DC 20006 RdL/bp BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20SSI RAUL A. VOLCKER CHAIRMAN April 14, 1986 The Honorable Bob Packwood Room 259 Russell Senate Office Building First and Constitution, N.E. Washington, D. C. 20510 Dear Bob: I have reviewed the Department of the Treasury's suggested modifications in the transition rule that you have proposed as part of the limitations on the availability of foreign tax credits for withholding taxes on the interest income that financial institutions receive from cross border loans. I agree with the Treasury that a less abrupt transition rule for bank loans to developing countries would be more consistent with the ongoing international cooperative efforts to deal with the complex external financing problems of those countries. We support the Treasury's proposal to give banks with loans outstanding to certain debtor countries more flexibility to restructure those loans and to broaden the transition period. We may have further technical comments as the Senate Finance Committee continues its deliberations on the tax bill. Sincerely, oiOgia?x cc: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Honorable Russell B. Long The Honorable James A. Baker III BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20SSI April 10, 1986 PAUL A. VOLCKER CHAIRMAN The Honorable Lloyd Bentsen United States Senate 20510 Washington, D.C. Dear Senator Bentsen: Thank you for your letter of April 4 in which you endorsed and urged rapid implementation of the program for assisting farm banks and their customers that was outlined in the joint statement issued by the Federal Reserve, the OCC and the FDIC when they appeared before the Senate Committee on Banking, Housing and Urban Affairs on March 11. I am pleased to report that on the day the joint statement was issued, our Reserve Banks were instructed by phone to generally conform their practices and procedures to the policies outlined therein. Moreover, on March 28, a letter was sent to the officers in charge of supervision and regulation at the Federal Reserve Banks to provide them with written guidelines to be followed in implementing these policies. A copy of this letter is enclosed. You will note that the letter directs the Reserve Banks to employ the same set of policies in supervising energy banks as farm banks. This inclusion of energy banks was agreed to by all three banking agencies in response to the wishes expressed by many members of Congress. Sincerely, Sc; Enclosure (FS:)CO:pte (V-91, 86-1801) bcc: Mrs. Mallardi (2) ,/ https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Action assigned 11r. StruLle LLO'r D BEVSEN TEXAS tato mate WASHINGTON, DC 20510 COMMITTEES: FINANCE ENVIRONMENT AND PUBLIC WORKS JOINT ECONOMIC JOINT COMMITTEE ON TAXATION SELECT COMMITTEE ON INTELLIGENCE 1:1"1 c5.) c-3) etz:3 ;"--* April 4, 1986 7: 71 r -al ' , cr - --7 : S (I) The Honorable Paul A. Volcker Chairman Federal Reserve System Washington, D.C. 20551 \-!.? Dear Mr. Chairman: On March 11 the Senate Banking Committee was presented with a joint statement of the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Comptroller of the Currency which outlined changes in regulatory policies towards agricultural lenders. I endorse the objectives of that joint statement, and T urge those agencies with regulatory authority to move as rapidly as possible to implement these new regulatory policies, and to notify all banking institutions of the policy changes that can be utilized for the purpose of restructuring agricultural debt. In addition, I believe that the severity of the drop in oil prices warrants similar regulatory changes being applied to the energy sector of the economy. Lending decisions are now being made for the 1986 growing season. Many Texas farmers have already planted. Agricultural lenders need the flexibility that the new regulatory climate would afford if they are to be able to avoid unnecessary foreclosures. Prospects for legislation to codify the principles set forth in the joint statement appear to be several weeks away, so that it now appears that modification of regulations within existing authority offers the best means for dealing with the immediate credit decisions for the current growing season. I urge you to work to implement these needed changes in agricultural and energy loan policies as soon as possible. Sincerely, 46.tetif Lloyd https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis entsen DISTRICT OFFICES W.G.(BILL) HEFNER P0.BOX 385 101 UNION STREET, SOUTH CONCORD, NC 28025 (704) 933-1615 OR 786-1612 8TH DISTRICT NORTH CAROLINA 2161 RAYBURN HOUSE OFFICE BUILDING WASHINGTON, DC 20515 (202) 225-3715 Congress of the United tats COMMITTEES COMMITTEE ON APPROPRIATIONS SUBCOMMITTEE ON DEFENSE CHAIRMAN SUBCOMMITTEE ON MILITARY CONSTRUCTION COMMITTEE ON THE BUDGET iloust of Represtntatims Washington, BC 205)5 April 10, 1986 P 0 BOX 4220 HOME SAVINGS AND LOAN BLDG 507 WEST INNES STREET, SUITE 225 SALISBURY, NC 28144 (704) 636-0635 6r rl ' efrrq P0. BOX 1503 202 EAST FRANKLIN STREET ROCKINGHAM, NC 28379 (919) 997-2070 -•-rt MI cri c=4 4=, The Honorable Paul A. Volcker Chairman Federal Reserve Board 20th St. & Constitution Ave. Washington, DC 20551 r-- —n ••••.11. c=' G—D r-r1 • 4:=7 Dear Mr. Chairman: cP Cip I am writing to invite your participation as a guest speker—at my second annual 8th District Chamber of Commerce Washington Issues Seminar. A large group from my district will be in Washington on Tuesday, June 10 and Wednesday, June 11, 1986 to attend the Seminar in the Cannon Caucus Room. Last year's one day seminar was so well attended and successful that I was asked to repeat it again this year and to expand it into a two-day affair. In preparing for this year's program, I did a survey of the chamber members to determine what issues they would like to have addressed and what speakers should be chosen to cover these issues. They were unanimous in their selection of you as a prominent official to address them. Mr. Chairman, I share their choice and will consider it a personal favor if you will take time out of your busy schedule to share your thoughts with my Eighth District constituents on one of the two afternoons June 10 and 11. The Seminar will be held in the Cannon Caucus Room. I will be glad to talk with you personally about this, aidrTTYappreciate your staff talking with Bill McEwen in my office about the arrangements. With kindest regards, I am Sincerely, ds BILL HEFNER Member of Congress BH/md https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, O. C. 20551 April 8, 1986 „RAI R. • •..• • The Honorable Lawton Chiles United States Senate Washington, D.C. 20510 Dear Senator Chiles: Thank you for your March 17 letter inquiring about the Federal Reserve's proposed addition to the Official Staff Commentary to Regulation E that would clarify the requirements for preauthorized electronic fund transfers from a consumer account. (We have enclosed a copy of the proposed commentary.) Specifically, you ask for our views on points raised by a number of your constituents who are concerned about the proposal. They question whether it is necessary to interpret the term "in writing" found in the preauthorized transfer provisions so as to exclude a tape recording, and whether consumers have been defrauded by abuse of the Electronic Fund Transfer Act's preauthorized transfer provisions. The proposed addition to the commentary, question 10-18.75, would clarify the statutory and regulatory requirement that preauthorized electronic fund transfers (EFTs) must be authorized by the consumer in writing. The proposal responds to inquiries about whether the written authorization requirement could be met by the payee--the person wishing to debit the consumer's account by preauthorized EFTs--signing an authorization as the consumer's agent, after having solicited the consumer's authorization for preauthorized EFTs over the telephone. The question is an interpretation of § 204.10(b) of Regulation E, which is based on § 907(a) of the Electronic Fund Transfer Act. (Copies of these provisions are enclosed). Section 907(a) of the Act states: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A preauthorized electronic fund transfer from a consumer's account may be authorized by the consumer only in writing, and a copy of such authorization shall be provided to the consumer when made. (Emphasis added.) The Honorable Lawton Chiles Page Two The position taken in the proposal was thought to best reflect the staEutory language and carry out the legislative intent. In our opinion the usual and customary meaning • of the word "writing" does not include tape recorded conversations. More importantly, we do not believe such a position is consistent with the language of the EFT Act and Regulation E provisions regarding authorizations for preauthorized EFTs, or, more generally, with other provisions in the Consumer Credit Protection Act and the Board's regulations implementing that Act. The reason the staff specifically addressed the issue of whether a "tape recording" constitutes a "wrng" in the proposal is that this issue was raised by a telemarketing company that signs authorizations as the consumer's agent based on a tape recorded telephone conversation. The company argued that a tape recording was a wrng and that the requirement for authorization "by the consumer only in writing" (emphasis added) wIs met by the tape recorded telephone conversation. The proposal reflects our belief that such an interpretation of the word "writing" would render the statutory and regulatory proons meaningless by, in effect, allowing oral authorizations for preauthorized EFTs. Since the staff is simply proposing to interpret the existing statutory and regulatory provisions in question 10-18.75, we do not believe the presence or absence of fraud or abuse is determinative of whether the position is correct. The EFT Act was not premised on problems or abuses in the EFT area, but was intended to establish the rights and responsibilities of consumers and financial institutions. (See § 902 of the EFT Act.) This is not to say, however, that there is no evidence of consumer problems. Some of the inquiries we received prior to issuing the proposal, and some of the comments that we received on the proposal, do indicate problems with allowing authorizations for preauthorized EFTs from a consumer's account to be made over the telephone instead of in writing. (Enclosed is a letter from a state attorney general on this point.) In addition, we have seen consumer complaints that were sent to other state and federal agencies indicating that some consumer problems have not been satisfactorily resolved by companies uzing preauthorized EFTs based on oral, tape-recorded authorizations. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Honorable Lawton Chiles Page Three I hope that this information is helpful. know if -I can be of further assistance. Sincerely, 2.cna1d .1.J. V. 77 Donald J. Winn Assistant to the Board Enclosures GH:DJW:pte (V-76, 86-1512) bcc: Jerry Hurst / Mrs. Mallardi Paula Hillery (w/copy of incoming) https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Please let me Action assigled flr. Garwood COMWTTEES LAWTON CHILES M-ORMA APPROPRI ATIONS BUDGET GOVERNMENTAL AFFAIRS Zfafez Zenate SPECIAL COM M ITTEE ON AGING DEMOCRATIC STEERING COM MITTEE March 17, 1986 The Honorable Paul Volker, Chairman Board of Governors of the Federal Reserve System 20th Street and Constitution Avenue, NW Washington, D.C. 20551 Dear Chairman Volker: I have recently been contacted by a number of businesses and individuals regarding their concerns over amendments proposed by the Federal Reserve Board to Section 907 of the Electronic Fund Transfer Act. Specifically, they are concerned that the FRB is performing a legislative function and pre-empting the power of Congress by proposing definitions that are inconsistent with the legislation enacted by Congress. I would appreciate your comments and views on the following points raised by my constituents. First, to what extent have consumers been defrauded by abuses of the Electronic Fund Transfer Act provisions? Assuming that some fraud has occurred, necessitating action by the FRB to protect their interest, have the industries that utilized electronic transfers been able to resolve, to the consumers' satisfaction, these charges of fraud? Secondly, why does the FRB find it necessary to define the word "writing" when the EFT Act contains no special, limng or restrictive definition of the word? It is my understanding that the usual and customary meaning of the word "writing" does include tape recorded conversation, so I am expressly interested in the FRB's rationale for asserting that tape recording does not constitute "writing". I look forward to hearing from shortly. With kind personal regards, I am Most sincerely,/ // //7-IAWTON CHILES LC/mfj https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org ____,-.-7_ Federal Reserve Bank of St. Louis DEPARTMENT OF THE TREASURY WASHINGTON April 8, 1986 Dear Mr. Leader: The health and integrity of the market for the obligations of the United States, its agencies, and related entities is important for the protection of the savings of our citizens, and an important element in the ability of the government to finance its debt at the least possible cost to them as taxpayers. At the same time, effective financing and implementation of fiscal and monetary policy requires that the government securities market continue to operate quickly and efficiently. For these reasons, we strongly support responsible regulation of this market. In June 1985, we agreed on the basic principles for such legislation: registration of all brokers and dealers; financial responsibility, record-keeping, and audit rules; and regulations directly affecting market safety such as collateralization of repurchase agreements. We agreed that the Treasury would be appropriate as rule-maker, acting in close consultation with the Federal Reserve, and that the Securities and Exchange Commission and bank regulators should be the enforcement agencies. The business relationship of the primary dealers with the Federal Reserve should remain unchanged. We wish to reiterate our full agreement with these principles including Treasury's primary role as rule-maker. We would be pleased to work with you so that this important legislation can be enacted soon. Sincerely, 444440se names A. Baker, III Secretary of the Treasury Paul A. Volcker Chairman of the Board of Governors of the Federal Reserve System The Honorable Robert Dole Majority Leader United States Senate Washington, D.C. 20510 '- deer,. zPa, hn S.R. Shad airman ecurities and Exchange Commission BOARD OF GOVERNORS • WASHINGTON, O. C. 20551 April 8, 1986 PAUL A. VOLCKER C HAI R M AN The Honorable Stephen L. Neal U.S. House of Representatives Washington, D.C. 20515 Dear Steve: I very much appreciate the thoughts included in your letter of March 14, 1986. I welcome the chance to exchange ideas and to answer questions about ambiguities in Board actions -- and I will secretly confess what you already know: that ambiguities do sometimes occur, whether because of substance, lack of clarity, or misinterpretation. I look forward to a continued dialogue with one of the most thoughtful members of Congress. Your March 14 letter indicates that you are puzzled about my statement that the Board's margin requirement interpretation applies only in those cases where control over the acquiror is not assured. Let me take a minute to explain how we came to that conclusion. The Board's ruling applies only to the shell corporation that has virtually no business operations, no regular business function other than to acquire and hold the margin stock of the target company, and substantially no assets or cash" flow to support borrowing other than the margin stock to be acquired. In this situation, we have agreed to apply a rebuttable presumption that the creditors have nothing to look to but margin stock for repayment of their loan and thus, unless rebutted, the margin rules are applicable. Critics of the interpretation say that in reality the lenders are looking to the assets of the target company as the economic resource on which repayment will be based. We concluded that in many situations in which financing is undertaken by a shell corporation, it may take a considerable amount of time before the shell corporation actually obtains control, and in many others there is no assurance that it will obtain control at all. In the interim, there is no security for the credit extended by the lenders other than the margin stock. In fact, the typical disclosure statement contains this very warning and, in many cases, informs the buyer of the debt that there will be insufficient resources to support payment of interest, to say nothing of repayment of principal, if there is any significant delay in obtaining control. With the multiplication of defensive devices adopted by takeover candidates, this is not merely a theoretical concern. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis •-• OF THE FEDERAL RESERVE SYSTEM The Honorable Stephen L. Neal Page 2 We recognized, however, that there are cases in which control would be assured. For example, if there is agreement to merge at the time the financing is undertaken, it is clear that there will be no significant hiatus between the time of the financing and the time that the assets of the target are available to satisfy the debt. We found that this would also be the situation in the event of a so-called short-form merger, that is, where a tender is made for a sufficient amount of stock so that the acquirer has the right under many state laws to merge with the target without the consent of the shareholders. In this case too, the Board found that a presumption that the lender would be relying on the margin stock in the shell corporation situation would not be appropriate. In short, we decided that where achievement of control is in doubt, where disclosure statements say it is in doubt, and the borrowing is to be undertaken by a shell corporation without other assets, it is reasonable to conclude that the lenders are Where it is assured relying on the margin stock for repayment. that the acquiror will obtain control, we concluded that such a We also decided that the presumption is inappropriate. presumption is inappropriate where the borrower is an operating company with substantial assets or cash flow and thus the lenders can look to these resources as the basis for repayment. So constructed, I am confident that the rule is carefully circumscribed and will have a limited impact only on those situations to which Congress intended the margin rules to where the lenders are relying "directly or indirectly" on apply: the margin stock. I feel the markets have come to understand this after a period of some confusion, generated in part by press speculation about what we were expected to decide, rather than what was actually decided. This assessment is borne out by the fact that in spite of the concern that we would be forced to act as a takeover review board and would be deluged with applications for interpretation, we have had only one minor request for clarification of the rules. Please let me know if I can be of any further help. MB:PAV:cmk (V-88, 86-1659) bcc: Mr. Bradfield Mrs. Mallardi (2) v/ Legal Records (2) G.C. Log #87 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis OFFICE OF THE COMPTROLLER OF THE CURRENCY FEDERAL DEPOSIT INSURANCE CORPORATION BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM April 8, 1986 The Honorable Fernand J. St Germain Chairman Committee on Banking, Finance, and Urban Affairs U.S. House of Representatives Washington, D.C. 20515 Dear Chairman St Germain: We are writing to express our joint request that the sition Congress extend and liberalize the emergency acqui ns provisions of the Garn-St Germain Depository Institutio This legislation, which now provides Deregulation Act of 1982. s of for interstate acquisitions of failed banks with asset $500 million or more, will expire on April 15, 1986. most The emergency acquisition provisions have been ions in useful in broadening the available range of solut Application of these provisions dealing with problem banks. at a has resulted in major savings for the insurance fund We believe that, particularly in present crucial time. of the circumstances, these provisions should be extended, some limitations in their use removed and their scope broadened. for The existing statutory provisions do not provide part of a the situation where a failing bank is an integral Use of the statute in these larger banking organization. d bank situations requires dismemberment of existing, establishe effects in holding company systems with potentially disruptive In generally. the local community and the banking system more iated addition, by failing to provide for acquisition of affil company banks within a holding company structure or the holding ing law itself or for future expansion in the state, exist banking organization at a severe places the acquired aphic bank competitive disadvantage in states that limit geogr expansion other than through a holding company. that https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis a Moreover, the existing statutory provisions require for bank have failed in order to be eligible The Honorable Fernand J. St Germain Page 2 until out-of-state acquisition. By requiring the FDIC to wait bed and a bank actually fails, the FDIC's options are circumscri since, the costs to the insurance fund are materially increased be once a bank fails, its value to a potential acquiror may In our view, it would be more substantially diminished. and constructive and less destabilizing to the local community and the banking system generally to authorize bank management of the regulators to act if a bank is clearly in danger closing. Finally, in order to be eligible for out-of-state acquisition, a failed bank under the current provision must not have assets of at least $500 million. This limitation does address situations involving smaller banks which are of banking significant size and importance in the local or state t be community that they serve, but whose capital needs canno supplied by in-state organizations. Based on our experience during the past four years and desirable on the current outlook, four specific changes appear we have to address the weaknesses in the emergency legislation described. that Congress permit the First, we recommend of failed out-of-state acquisition of failing banks, as well as Second, an option should be made available for banks. of a bank out-of-state acquisition of the bank subsidiaries the failing holding company or the holding company itself when hold and bank (or banks) exceeds the statutory size thres system, and represents a sizeable part of the holding company the bank (or the appropriate chartering authority certifies Third, an out-of-state banks) as being in danger of closing. rights as an acquirer should be afforded the same expansion Fourth, we recommend that the asset in-state organization. the emergency size of banks eligible to be acquired pursuant to least provisions be reduced from $500 million to at $250 million. e future, It seems unavoidable that over the foreseeabl will have there will continue to be situations in which banks continue to problems so severe that they will be unable to tal and fresh operate without an infusion of additional capi have It is thus vital that banking supervisors management. ns quickly and adequate tools to deal with such situatio t on local effectively in order to minimize their impac s on the communities or regions and to avoid repercussion banking system generally. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • The Honorable Fernand J. St Germain Page 3 Accordingly, we strongly recommend that the emergency acquisition provisions of the Garn-St Germain Act be extended We will with the strengthening provisions we have recommended. implement our to legislation proposed forwa-rding be recommendations in the near future. Sincerely, /wa i 1/171-7t Robert L. Clarke L. William Seidman IDENTICAL LETTERS ALSO SENT TO: CHAIRMAN GARN SENATOR PROXMIRE CONG. WYLIE https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Paul A. Volcker •• Oi Govt • .• BOARD OF GOVERNORS OF THE •0 • • -4 H. • • FEDERAL RESERVE SYSTEM WASHINGTON,0 C. 20551 • v1" PAUL A. VOLCKER RAL RES April 4, 1986 • • •..• • • CHAIRMAN The Honorable Fernand J. St Germain Chairman Subcommittee on Financial Institutions Supervision, Regulation and Insurance Committee on Banking, Finance and Urban Affairs House of Representatives Washington, D.C. 20515 Dear Chairman St Germain: We are enclosing the statistical information you requested in your letter of March 17 as modified to reflect subsequent discussions with your staff on the form, content, and availability of the information to be submitted. Interagency meetings have been held to coordinate the compilation of the information and to eliminate duplication of effort. Each page of the submission contains a footnote indicating the agency source. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Please let me know if we can be of further assistance. Sincerely, Enclosure FS:vcd (V-75, 86-1495) Vice Chairman Martin bcc: Fred Struble „-Mrs. Mallardi (2)( i https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis STATISTICAL INFORMATION REQU ESTED BY THE SUBCOMMITTEE ON FINANCIAL INSTITUTIONS SUPERVISION, REGULATIQN AND INSURANCE OF THE HOUSE COMMITTEE ON BANK ING, FINANCE, AND URBAN AFFA IRS Submitted by: Comptroller of the Currency Federal Deposit Insurance Corp oration Federal Reserve Board op April 4, 1986 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AGRICULTURE: ITEM 1(A) CONCENTRATION OF BANK AGRICULTURAL LOANS BY STATE DATA FOR INSURED COMMERCIAL BAN KS (Dollars in Millions) TOTAL AGRICULTURAL LOANS 5TATE ALABAMA ALASKA ARIZONA ARKANSAS CALIFORNIA COLORADO CONNECTICUT DELAWARE D.C. FLORIDA GEORGIA HAWAII IDAHO ILLINOIS INDIANA IOWA KANSAS KENTUCKY LOUISIANA MAINE MARYLAND MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI MISSOURI MONTANA NEBRASKA NEVADA NEW HAMPSHIRE NEW JERSEY NEW MEXICO NEW YORK NORTH CAROLINA NORTH DAKOTA OHIO OKLAHOMA OREGON PENNSYLVANIA RHODE ISLAND SOUTH CAROLINA SOUTH DAKOTA TENNESSEE TEXAS .UTAH VERMONT VIRGINIA WASHINGTON WEST VIRGINIA WISCONSIN WYOMING TOTAL Definition: $372.8 11.8 569.3 691.6 4.117.7 925.7 26.4 53.3 13.3 561.9 611.6 51.3 694.0 3,046.4 1,640.1 3.855.5 2.552.4 1.113.5 542.7 28.6 219.2 55.9 789.8 2,440.2 635.6 1.919.2 754.0 2.862.4 16.4 5.4 33.9 271.1 1.082.9 445.6 1,021.8 1.054.5 1.604.4 392.6 699.6 7.0 129.3 1.341.8 ', 666.7 3,969.6 135.3 57.6 374.0 961.6 84.7 1.680.7 281.0 $47,473.5 PERCENT OF INSURED COMMERCIAL BANK AGRICULTURAL LOANS ' 0.8% 0.0 1.2 1.5 8.7 1.9 0.1 0.1 0.0 1.2 1.3 0.1 1.5 6.4 3.5 8.1 5.4 2.3 1.1 0.1 0.5 0.1 1.7 5.1 1.3 4.0 1.6 6.0 0.0 0.0 0.1 0.6 2.3 0.9 2.2 2.2 3.4 0.8 1.5 0.0 0.3 2.8 1.4 8.4 0.3 0.1 0.8 2.0 0.2 3.5 DA 100.0% Agricultural banks have ratios of agr icultural loans (production loans and real estate loa ns farmland) to total loans net of unearn secured by ed income of twenty-five percent or more. Source: Call Reports OCC (4/86) 2 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AGRICULTURE: ITEM 1(A) CONCENTRATION OF BANK AGRICU LTURAL LOANS BY STATE DATA FOR NATIONAL BANKS (Dollars in Millions) TOTAL AGRICULTURAL LOANS DTATE ALABAMA ALASKA ARIZONA ARKANSAS CALIFORNIA COLORADO CONNECTICUT DELAWARE D.C. FLORIDA GEORGIA HAWAII IDAHO ILLINOIS INDIANA IOWA KANSAS KENTUCKY LOUISIANA MAINE MARYLAND MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI MISSOURI MONTANA NEBRASKA NEVADA NEW HAMPSHIRE NEW JERSEY NEW MEXICO NEW YORK NORTH CAROLINA NORTH DAKOTA OHIO OKLAHOMA OREGON PENNSYLVANIA RHODE ISLAND SOUTH CAROLINA SOUTH DAKOTA TENNESSEE TEXAS UTAH VERMONT VIRGINIA WASHINGTON WEST VIRGINIA WISCONSIN WYOMING TOTAL Definition: $93.3 5.8 493.2 277.3 3,469.1 583.3 20.3 1.8 13.3 284.0 142.5 0.0 419.4 1,361.4 463.3 814.4 892.8 325.6 104.4 14.5 150.6 38.1 202.9 783.3 157.4 457.8 377.7 1,334.2 13.2 1.8 23.4 161.2 617.7 241.2 345.7 545.1 874.9 269.5 354.3 6.9 59.9 590.0 195.3 2,499.3 92.5 20.4 197.6 796.7 32.8 359.8 174.6 $21.755.9 , PERCENT OF NATIONAL DANK AGRICULTURAL LOANS 0.4% 0.0 2.3 1.3 15.9 2.7 0.1 0.0 0.1 1.3 0.7 0.0 1.9 6.3 2.1 3.7 4.1 1.5 0.5 0.1 0.7 0.2 0.9 3.6 0.7 2.1 1.7 6.1 0.1 0.0 0.1 0.7 2.8 1.1 1.6 2.5 4.0 1.2 1.6 0.0 0.3 2.7 0.9 11.5 0.4 0.1 0.9 3.7 0.2 1.7 • LI 100.0% Agricultural banks have ratios of (production loans and real estate agricultural loans loans secured by farmland) to total loans net of une arned income of twenty-five percent or more. Source: Call Reports OCC (4/86) 3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AGRICULTURE: ITEM 1(A) CONCENTRATION OF BANK AGRICULTURAL LOAN S BY STATE DATA FOR STATE MEMBER BANKS (Dollars in Millions) TOTAL AGRICULTURAL LOANS STATE PERCENT OF STATE MEMBER DANK AGRICULTURAL LOANS ALABAMA ALASKA ARIZONA ARKANSAS CALIFORNIA COLORADO CONNECTICUT DELAWARE D.C. FLORIDA GEORGIA HAWAII IDAHO ILLINOIS INDIANA IOWA KANSAS KENTUCKY LOUISIANA MAINE MARYLAND MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI MISSOURI MONTANA NEBRASKA NEVADA NEW HAMPSHIRE NEW JERSEY NEW MEXICO NEW YORK NORTH CAROLINA NORTH DAKOTA OHIO OKLAHOMA OREGON PENNSYLVANIA RHODE ISLAND SOUTH CAROLINA SOUTH DAKOTA TENNESSEE TEXAS UTAH VERMONT VIRGINIA WASHINGTON WEST VIRGINIA WISCONSIN WYOMING _OA 1,4 TOTAL $3,760.4 100.0% Definition: $45.3 00.0 3.3 11.3 236.4 137.9 00.0 15.0 00.0 60.2 23.6 00.0 58.8 218.9 208.0 308.8 127.0 133.7 33.2 2.3 2.2 16.4 234.7 90.3 4.4 126.1 164.7 41.9 00.0 0.2 1.5 8.1 405.6 00.0 17.4 262.1 59.6 11.7 13.1 00.0 3.6 225.0 35.7 142.5 12.5 00.0 111.5 5.1 19.8 67.8 1.2% 0.0 0.1 0.3 6.3 3.7 0.0 0.4 0.0 1.6 0.6 0.0 1.6 5.8 5.5 8.2 3.4 3.6 0.9 0.1 0.1 0.4 6.2 2.4 0.1 3.4 4.4 1.1 0.0 0.0 0.0 0.2 10.8 0.0 0.5 7.0 1.6 0.3 0.3 0.0 0.1 6.0 0.9 3.8 0.3 0.0 3.0 0.1 0.5 1.8 Agricultural banks have ratios of agricultural loans (production loans and real estate loans secu red by farmland) to total loans net of unearned inco me of twenty-five percent or more. Source: Call Reports OCC (4/86) 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AGRICULTURE: ITEM 1(A) CONCENTRATION OF BANK AGRICULTURAL LOAN S BY STATE DATA FOR STATE NON-MEMBER BANKS (Dollars in Millions) TOTAL AGRICULTURAL LOANS 5TATE ALABAMA ALASKA ARIZONA ARKANSAS CALIFORNIA COLORADO CONNECTICUT DELAWARE D.C. FLORIDA GEORGIA HAWAII IDAHO ILLINOIS INDIANA IOWA KANSAS KENTUCKY LOUISIANA MAINE MARYLAND MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI MISSOURI MONTANA NEBRASKA NEVADA NEW HAMPSHIRE NEW JERSEY NEW MEXICO NEW YORK NORTH CAROLINA NORTH DAKOTA OHIO OKLAHOMA OREGON PENNSYLVANIA RHODE ISLAND SOUTH CAROLINA SOUTH DAKOTA TENNESSEE TEXAS UTAH VERMONT VIRGINIA WASHINGTON WEST VIRGINIA WISCONSIN WYOMING TOTAL Definition: $234.2 5.9 72.7 403.0 412.3 204.5 6.1 36.5 00.0 217.8 445.5 51.2 215.8 1.466.1 968.8 2,732.3 1.532.6 654.2 405.2 11.8 66.4 1.3 352.1 1.566.6 473.8 1.335.4 211.6 1.486.2 3.2 3.3 9.0 101.8 59.6 204.4 658.7 247.3 669.9 111.4 332.2 0.1 65.8 526.7 , 435.8 1,327.8 30.3 37.1 65.0 159.8 32.0 1,253.2 52./ $21.957.2 PERCENT OF STATE NON-MEMBER BANK AGRICULTURAL LOANS 1.1% 0.0 0.3 1.8 1.9 0.9 0.0 0.2 0.0 1.0 2.0 0.2 1.0 6.7 4.4 12.4 7.0 3.0 1.8 0.1 0.3 0.0 1.6 7.1 2.2 6.1 1.0 6.8 0.0 0.0 0.0 0.5 0.3 0.9 3.0 1.1 3.1 0.5 1.5 0.0 0.3 2.4 2.0 6.0 0.1 0.2 0.3 0.7 0.1 5.7 _Al 100.0% Agricultural banks have ratios of agricult ural loans (production loans and real estate loans secu farmland) to total loans net of unearned incored by me of twenty-five percent or more. Source: Call Reports OCC (4/86) . 5 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AGRICULTURE: ITEM 1(B) CONCENTRATION OF AGRICULTUAL BANKS BY STATE DATA FOR INSURED COMMERCIAL BANKS NUMBER OF AGRICULTURAL BANKS STATE PERCENT OF INSURED COMMERCIAL AGRICULTURAL BANKS ALABAMA ALASKA ARIZONA ARKANSAS CALIFORNIA COLORADO CONNECTICUT DELAWARE D.C. FLORIDA GEORGIA HAWAII IDAHO ILLINOIS INDIANA IOWA KANSAS KENTUCKY LOUISIANA MAINE MARYLAND MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI MISSOURI MONTANA NEBRASKA NEVADA NEW HAMPSHIRE NEW JERSEY NEW MEXICO NEW YORK NORTH CAROLINA NORTH DAKOTA OHIO OKLAHOMA OREGON PENNSYLVANIA RHODE ISLAND SOUTH CAROLINA SOUTH DAKOTA TENNESSEE TEXAS UTAH .VERMONT VIRGINIA WASHINGTON WEST VIRGINIA WISCONSIN WYOMING _21 111 TOTAL 3.731 100.0% Definition: 19 _ 45 1 69 6 40 11 391 77 505 403 75 24 3 14 377 24 260 78 378 1 6 4 2 139 48 155 5 2 -* 2 121 25 208 2 2 16 172 1 0.5% 1.2 0.0 1.8 0.2 1.1 0.3 10.5 2.1 13.5 10.8 2.0 0.6 0.1 0.4 10.1 0.6 7.0 2.1 10.1 0.0 0.2 0.1 0.1 3.7 1.3 4.2 0.1 0.1 0.1 3.2 0.7 5.6 0.1 0.1 0.4 4.6 Agricultural banks have ratios of (production loans and real estate agricultural loans loans secured by farmland) to total loans net of une arned income of twenty-five percent or more. Source: Call Reports OCC(4/86) 6 AGRICULTURE: ITEM 1(B) CONCENTRATION OF AGRICULTUAL BANKS BY STATE DATA FOR NATIONAL BANKS NUMBER OF AGRICULTURAL BANKS 5TATE r https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ALABAMA ALASKA ARIZONA ARKANSAS CALIFORNIA COLORADO CONNECTICUT DELAWARE D.C. FLORIDA GEORGIA HAWAII IDAHO ILLINOIS INDIANA IOWA KANSAS KENTUCKY LOUISIANA MAINE MARYLAND MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI MISSOURI MONTANA NEBRASKA NEVADA NEW HAMPSHIRE NEW JERSEY NEW MEXICO NEW YORK NORTH CAROLINA NORTH DAKOTA OHIO OKLAHOMA OREGON PENNSYLVANIA RHODE ISLAND SOUTH CAROLINA SOUTH DAKOTA TENNESSEE TEXAS -UTAH VERMONT VIRGINIA WASHINGTON WEST VIRGINIA WISCONSIN WYOMING TOTAL Definition: 1 — — 6 36 — — — 1 — — 1 108 15 71 90 12 2 — — — 2 67 1 30 30 98 1 — — 4 2 — 24 11 59 '2 — — 17 I 1 97 — — 3 20 _2 821 PERCENT OF NATIONAL AGRICULTURAL BAN KS 0.1% — 0.7 4.; — — — 0.1 — — 0.1 13.2 1.8 8.6 11.0 1.5 0.2 — — _ 0.2 8.2 0.1 3.7 3.7 11.9 0.1 — — 0.5 0.2 — 2.9 1.3 7.2 — 0.2 — 2.1 0.1 11.8 — — — 0.4 2.4 __1,1 100.0% Agricultural banks have rati a of agricultural loans (production loans and real est farmland) to total loans net ate loans secured by twenty—five percent or more. of unearned income of Source: Call Reports OCC (4/86) 7 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AGRICULTURE: ITEM 1(B) CONCENTRATION OF AGRICULTU AL BANKS BY STATE DATA FOR STATE MEMBER BANKS NUMBER OF AGRICULTURAL BANKS *STATE ALABAMA ALASKA ARIZONA ARKANSAS CALIFORNIA COLORADO CONNECTICUT. DELAWARE D.C. FLORIDA GEORGIA HAWAII IDAHO ILLINOIS INDIANA IOWA KANSAS KENTUCKY LOUISIANA MAINE MARYLAND MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI MISSOURI MONTANA NEBRASKA NEVADA NEW HAMPSHIRE NEW JERSEY NEW MEXICO NEW YORK NORTH CAROLINA NORTH DAKOTA OHIO OKLAHOMA OREGON PENNSYLVANIA RHODE ISLAND SOUTH CAROLINA SOUTH DAKOTA TENNESSEE TEXAS UTAH VERMONT VIRGINIA WASHINGTON WEST VIRGINIA WISCONSIN WYOMING TOTAL Definition: — _ _ _ _ 7 _ — — 1 — — 3 24 14 26 13 1 1 — — — 4 13 — 11 23 6 — — — — — — 3 14 8 2 — — — 20 ;; 12 — 1 1 5 fi 219 PERCENT OF STATE rEmBER AGRICULTURAL BANK — _ • • •••• 1••• 3.2 _ _ — 0.5 — — 1.4 11.0 6.4 11.9 5.9 0.5 0.5 — — — 1.8 5.9 — 5.0 10.5 2.7 — — — — — — 1.4 6.4 3.7 0.9 — — — 9.1 5.5 — — 0.5 0.5 2.3 Zal 100.0% Agricultural banks have rat (production loans and rea ios of agricultural loans l estate loans secured by farmland) to total loans ne twenty—five percent or more t of unearned income of . Source: Call Reports OCC (4/86) 8 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AGRICULTURE: ITEM 1(B) CONCENTRATION OF AGRICULTUAL BANKS BY STATE DATA FOR STATE NON-MEMBER BAN KS NUMBER OF AGRICULTURAL BANKS STATE PERCENT OF STATE NON-MEMBER AGRICULTURAL BANKS ALABAMA ALASKA ARIZONA ARKANSAS CALIFORNIA COLORADO CONNECTICUT DELAWARE D.C. FLORIDA GEORGIA HAWAII IDAHO ILLINOIS INDIANA IOWA KANSAS KENTUCKY LOUISIANA MAINE MARYLAND MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI MISSOURI MONTANA NEBRASKA NEVADA NEW HAMPSHIRE NEW JERSEY NEW MEXICO NEW YORK NORTH CAROLINA NORTH DAKOTA OHIO OKLAHOMA OREGON PENNSYLVANIA RHODE ISLAND SOUTH CAROLINA SOUTH DAKOTA TENNESSEE TEXAS UTAH VERMONT VIRGINIA WASHINGTON WEST VIRGINIA WISCONSIN WYOMING 147 ..---ii _Al TOTAL 2.691 100.0% Definition: 18 39 1 26 4 40 7 259 48 408 300 62 21 3 0.7% 1.4 0.0 1.0 ••• 0.1 1.5 . 8 297 23 219 25 274 2 2 2 112 23 88 3 2 84 24 99 2 1 12 ., ' 0.3 9.6 1.8 15.2 11.1 2.3 0.8 0.1 0.3 11.0 0.9 8.1 0.9 10.2 0.1 0.1 0.1 4.2 0.9 3.3 0.1 0.1 3.1 0.9 3.7 0.1 0.0 0.4 5.5 Agricultural banks have ratios of (production loans and real estate agricultural loans loans secured by farmland) to total loans nit of une arned income of twenty-five percent or more. Source: Call Reports OCC (4/86) 9 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AGRICULTURE: ITEM I(C) CONCENTRATION OF AGRICULTURAL BANKS WITH IN EACH STATE DATA FOR INSURED COMMERICAL BANKS NUMBER OF AGRICULTURAL BANKS FATE ALABAMA ALASKA ARIZONA ARKANSAS CALIFORNIA COLORADO CONNECTICUT DELAWARE D.C. FLORIDA GEORGIA HAWAII IDAHO ILLINOIS INDIANA IOWA KANSAS KENTUCKY LOUISIANA MAINE MARYLAND MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI MISSOURI MONTANA NEBRASKA NEVADA NEW HAMPSHIRE NEW JERSEY NEW MEXICO NEW YORK NORTH CAROLINA NORTH DAKOTA OHIO OKLAHOMA OREGON PENNSYLVANIA RHODE ISLAND SOUTH CAROLINA SOUTH DAKOTA TENNESSEE TEXAS UTAH VERMONT VIRGINIA WASHINGTON WEST VIRGINIA WISCONSIN WYOMING TOTAL Definition: PERCENT OF INSURED COMMERICAL BANKS IN STATE 19 45 1 69 6 40 11 391 77 505 403 75 24 3 7.9% 17.4 0.2 15.1 1.5 10.8 42.3 31.7 20.8 81.2 64.7 22.5 8.0 3.3 3.9 51.4 16.4 38.6 46.2 83.4 6.3 6.3 2.1 3.2 78.5 15.1 29.1 7.5 0.6 2.7 88.3 8.7 10.7 3.7 14 377 24 260 78 378 1 6 4 2 139 48 155 5 2 2 121 25' 208 2 2 16 172 1.2 16.3 30.0 Ll 11,4 3.731 26.1% ••• Agricultural banks have ratios of agricultural loans (production loans and real estate loans secu red by farmland) to total loans net of unearned inco me of twenty-five percent or more. Source: Call Reports OCC(4/86) 10 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AGRICULTURE: ITEM 1(C) CONCENTRATION OF AGRICULTURAL BANKS WITHIN EACH STATE DATA FOR NATIONAL BANKS NUMBER OF AGRICULTURAL BANKS 5TATE PERCENT OF NATIONAL BANKS IN STATE ALABAMA ALASKA ARIZONA ARKANSAS CALIFORNIA COLORADO CONNECTICUT DELAWARE D.C. FLORIDA GEORGIA HAWAII IDAHO ILLINOIS INDIANA IOWA KANSAS KENTUCKY LOUISIANA MAINE MARYLAND MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI MISSOURI MONTANA NEBRASKA NEVADA NEW HAMPSHIRE NEW JERSEY NEW MEXICO NEW YORK NORTH CAROLINA NORTH DAKOTA OHIO OKLAHOMA OREGON PENNSYLVANIA RHODE ISLAND SOUTH CAROLINA SOUTH DAKOTA TENNESSEE TEXAS UTAH VERMONT VIRGINIA WASHINGTON WEST VIRGINIA WISCONSIN WYOMING 20 ._..2 16.8 IL, TOTAL 821 16.7% Definition: 1 - 1.9% - 6 7.3 36 1 1 108 15 71 90 12 2 2 67 1 30 30 98 1 4 2 24 11 59 2 17 1 97 3 15.1 =MP 0.7 _ 14.3 27.1 13.6 64.5 53.9 15.4 2.8 1.7 31.6 3.0 23.8 54.5 81.7 16.7 _ 8.9 1.9 55.8 7.6 25.5 1.1 68.0 1.7 9.2 12.5 Agricultural banks have ratios of agri (production loans and real estate loa cultural loans ns secured by farmland) to total loans net of unearned income of twenty-five percent or more. Source: Call Reports OCC (4/86) 11 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AGRICULTURE: ITEM 1(C) CONCENTRATION OF AGRICULTURAL BANKS WITHIN EACH STATE DATA FOR STATE MEMBER BANKS STATE ALABAMA ALASKA ARIZONA ARKANSAS CALIFORNIA COLORADO CONNECTICUT DELAWARE D.C. FLORIDA GEORGIA HAWAII IDAHO ILLINOIS INDIANA IOWA KANSAS KENTUCKY LOUISIANA MAINE MARYLAND MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI MISSOURI MONTANA NEBRASKA NEVADA NEW HAMPSHIRE NEW JERSEY NEW MEXICO NEW YORK NORTH CAROLINA NORTH DAKOTA OHIO OKLAHOMA OREGON PENNSYLVANIA RHODE ISLAND SOUTH CAROLINA SOUTH DAKOTA TENNESSEE TEXAS UTAH .VERMONT VIRGINIA WASHINGTON WEST VIRGINIA WISCONSIN WYOMING TOTAL Definition: NUMBER OF AGRICULTURAL BANKS _ — — PERCENT OF STATE iEMBER BANKS IN STATE — — — MOD •••• 7 — — _ 1 — — 3 24 14 26 13 1 1 — — — 4 13 — 11 23 6 — — — — — — 3 14 a 2 — . — — 29 12 1 1 5 i 10.3 — — — 1.8 — — 100.0 35.8 34.1 70.3 65.0 14.3 16.7 — — — 4.9 38.2 — 29.7 56.1 66.7 — — — — — — 75.0 20.3 36.4 15.4 — — 80.; 17.1 — — 1.2 33.3 22.7 _...fi 24,11 219 20.5% Agricultural banks have ratios of (production loans and real estate agricultural loans loans secured by farmland) to total loans net of une arned income of twenty—five percent or more. Source: Call Reports OCC (4/86) 12 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AGRICULTURE: ITEM I(C) CONCENTRATION OF AGRICULTU RAL BANKS WITHIN EACH STATE DATA FOR STATE NON-MEMBER BANKS NUMBER OF AGRICULTURAL BANKS EEL ALABAMA ALASKA ARIZONA ARKANSAS CALIFORNIA COLORADO CONNECTICUT DELAWARE D.C. FLORIDA GEORGIA HAWAII IDAHO ILLINOIS INDIANA IOWA KANSAS KENTUCKY LOUISIANA MAINE MARYLAND MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI MISSOURI MONTANA NEBRASKA NEVADA NEW HAMPSHIRE NEW JERSEY NEW MEXICO NEW YORK NORTH CAROLINA NORTH DAKOTA OHIO OKLAHOMA OREGON PENNSYLVANIA RHODE ISLAND SOUTH CAROLINA SOUTH DAKOTA TENNESSEE TEXAS UTAH VERMONT VIRGINIA WASHINGTON WEST VIRGINIA WISCONSIN WYOMING 147 ---_fi TOTAL 2,691 Definition: 18 39 1 26 4 40 7 259 48 408 300 62 21 3 - 8 297 23 219 25 274 2 2 2 112 23 88 3 '2 84 24 4 99 2 1 12 PERCENT OF STATE NON-MEMBER BANKS IN STATE 11.2% 22.7 0.4 17.4 4•IM . 2.2 13.2 43.8 33.8 21.8 85.9 68.8 25.0 9.4 5.0 5.0 60.9 20.9 42.9 34.2 84.6 4.4 3.9 4.3 86.2 21.9 31.4 6.5 4.1 96.6 10.9 12.3 6.1 2.4 16.9 33.9 a& 32.4% Agricultural banks have rat (production loans and real ios of agricultural loans estate loans secured by farmland) to total loans net twenty-five percent or more. of unearned income of Source: Call Reports OCC (4/86) 13 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AGRICULTURE: ITEM 11(A) NONPERFORMING LOANS AS A PER T OF GROSS LOANS AT AGRICULUTRAL AND NON-AGCEN RICULTURAL BANKS DATA FOR INSURED COMMERCIAL BANKS AGRICULTURAL BANKS 1985 1985 1985 1985 Q4 Q3 Q2 Ql 4.9% 4.9 4.7 4.8 19&4Q4 1984 Q3 1984 Q2 1984 Q1 3.8 3.6 3.5 3.6 1983 1983 1983 1983 Q4 Q3 Q2 Q1 3.0 3.0 2.9 2.9 1982 Q4 2.4 NON-AGRICULTURAL BANKS 2.7% 3.0 3.0 3.1 3.0 3.1 3.2 3.3 3.3 3.8 3.8 3.7 3.4 Definitions: Aggregate nonper forming ns (loans 90 days or more past due and nonaccruingloa loa divided by aggregate gross ns and renegotiated loans) loans and leases. Agricultural banks have ios of agricultural loans (production loans and rearat l est farmland) to total loans net ate loans secured by twenty-five percent or more. of unearned income of Source: Call Reports OCC (4/86) 14 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AGRICULTURE: ITEM II(A) NONPERFORMING LOANS AS A PERCENT OF GROSS LOANS AT AGRICULUTRAL AND NON-AGRICULTURA L BANKS DATA FOR NATIONAL BANKS AGRICULTURAL BANKS NON-AGRICULTURAL IANKS 1985 1985 1985 1985 Q4 Q3 Q2 Q1 5.2% 5.4 5.0 5.0 2.9% 3.2 3.2 3.2 1984 1984 1984 1984 Q4 Q3 Q2 Q1 4.0 3.8 3.8 3.7 3.2 3.3 3.5 3.6 1983 1983 1983 1983 Q4 Q3 Q2 Q1 3.1 3.0 2.9 2.9 3.6 4.1 4.1 4.0 1982 Q4 2.4 3.6 Definitions: Aggregate nonperformin g loans ans 90 days or more past due and nonaccruing loans(lo and divided by aggregate gross loans andrenegotiated loans) leases. Agricultural banks have ratios of agr icultural loans (production loans and real estate loa ns farmland) to total loans net of unearn secured by ed income of twenty-five percent or more. Source: Call Reports OCC (4/86) 15 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AGRICULTURE: ITEM 11(A) NONPERFORMING LOANS AS A PERCENT OF GROSS LOANS AT AGRICULUTRAL AND NON-AGRICULTURA L BANKS DATA FOR STATE MEMBER BANKS AGRICULTURAL BANKS NON-AGRICULTURAL BANKS 1985 1985 1985 1985 Q4 Q3 Q2 Q1 4.5% 4.6 4.5 4.3 2.6% 3.1 3.1 3.1 1984 1984 1984 1984 Q4 Q3 Q2 Q1 3.4 3.3 3.2 3.4 3.0 3.1 3.1 2.8 1983 1983 1983 1983 Q4 Q3 Q2 Q1 3.1 3.1 2.9 2.9 2.9 3.3 3.3 3.2 1982 Q4 2.7 Definitions: 4 2.9 Aggregate nonperforming loans (loans 90 days or more past due and nonaccruing loans and ren divided by aggregate gross loans and egotiated loans) leases. Agricultural banks have ratios of (production loans and real estate agricultural loans loa farmland) to total loans net of unearnns secured by ed income of twenty-five percent or more. Source: Call Reports OCC (4/86) • 16 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AGRICULTURE: ITEM II(A) NONPERFORMING LOANS AS A PERCENT OF GROSS LOANS AT AGRICULUTRAL AND NON-AGRICULTURAL BANK S DATA FOR STATE NON-MEMBER BANKS AGRICULTURAL BANKS NON-AGRICULTURAL BANKS 1985 1985 1985 1985 Q4 Q3 Q2 Ql 4.8% 4.7 4.5 4.7 2.4% 2.5 2.4 2.5 1984 1984 1984 1984 Q4 Q3 Q2 Q1 3.7 3.5 3.4 3.5 2.4 2.5 2.5 2.7 1983 1983 1983 1983 Q4 Q3 Q2 Q1 2.9 3.0 2.8 3.0 2.7 3.1 3.1 3.2 1982 Q4 2.5 3.0 Definitions: Aggregate nonperforming loan s (loans 90 days or more past due and nonaccruing loans and renegoti divided by aggregate gross loans and leas ated loans) es. Agricultural banks have ratios of agricult ural loans (production loans and real estate loans secu red by farmland) to total loans net of unearned inco me of twenty-five percent or more. Source: Call Reports OCC (4/86) , 17 AGRICULTURE: ITEM II(B) FAILURES BY TYPE OF BANK 1982 1983 7 1984 1985 7 25 62 12 27 38 53 56 12 8 3 1 2 0 42 48 79 120 24 Agriculture Banks Other Commercial Banks Savings Banks Total 1986* AGRICULTURAL BANK FAILURES BY CHARTER CLASS 1982 1983 1984 1985 1986* National Banks 2 2 5 10 5 State Member Banks 0 0 1 4 1 State Non-member Banks 5 5 19 48 6 7 7 25 62 12 Total * Failures through March 27, 1986. Definition: Agricultural banks have ratios of agricultural loans . (production loans and real estate loans secure d by • farmland) to total loans net of unearned inc ome of twenty-five percent or more. Source: FDIC. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 18 AGRICULTURE: ITEM II(C) PROBLEM COMMERCIAL BANKS BY TYPE OF BANK Ag Banks Dec. 1982 June 1983 Dec. 1983 June 1984 Dec. 1984 June 1985 Dec. 1985 Feb. 1986 Definition: * Other Commercial Banks * Total * 106 (22.0) 375 (78.0) 481 146 (24.2) 457 (75.8) 603 231 (34.3) 440 (65.6) 671 288 (36.1) 512 (63.9) 800 334 (35.5) 606 (64.5) 940 437 (39.8) 661 (60.2) 1,098 468 (40.5) 668 (59.5) 1,156 Agricultural banks have ratios of (production loans and real estate agricultural loans loans secured by farmland) to total loans net of unearned income of twenty-five percent or more. Problem banks are defined as tho se rated composite 4 and 5 on the CAMEL rating system . *Agricultural banks not segregate d prior to June 1983. Numbers in parentheses indicate percent of total problem commer cial banks. Source: FDIC. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 19 AGRICULTURE: ITEM IND) PROJECTED FARM-BANK FAILURES AND ASSETS OF FAILED BANKS UNDER HIGH, MEDIUM, AND LOW LOSS SCENARIOS Number of Banks High 116 Medium 72 Low Note: 38 1986 Assets (millions of dollars) 2,975 1,662 813 1987 Number of Banks Assets (millions of dollars) 1988 Number of Banks Assets (millions of dollars) 133 3,119 82 1,867 73 2,006 35 827 49 1,423 5 160 The medium loss scenario assumes that farm-loan losses would be equ al to about 3 percent of farm-loans annually in 1986-1987, and then drop slightly to 2.5 percent in 1988. The 3 percent los s rate would be roughly equal to tha t experienced at commercial banks in 198 5. The high loss scenario assumes loss rates of 4.5 percent in 1986-87 and 3.5 percent in 1988, while loss rates und er the low loss scenario are equal to 2 percent in 1988-87, and 1 percent in 1988. Source: FDIC. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 20 AGRICULTURE: ITEMS III(A), AND III(C) PROBLEM AGRICULTURAL BANKS THAT ARE IN ONE-BANK COMMUNITIES , low. April 1, 1986 Number of agricultural banks in one-bank communities 2,268 Number of problem banks by charter class: National Banks 51 State Member Banks 11 State Non-member Banks 203 Total problem banks Definitions: 265 Agricultural banks have ratios of agricultural loans (production loans and real estate loa ns secured by farmland) to total loans net of unearn ed income of twenty-five percent or more. One-bank communities are located outside of Standard Metropolitan Statistical Areas and are determined from Call Report files to have only one bank. e 'F Source: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis FDIC. .111 1=1ft- AGRICULTURE: ITEM III(B) AGRICULTURAL BANK FAILURES IN ONE-BANK COMMUNITIES 1982 1983 1984 1985 National Banks 1 1 3 5 1 State Member Banks 0 0 0 2 1 State Nonmember Banks 4 2 15 36 5 5 3 18 43 7 Total 1986* AGRICULTURAL BANK FAILURES IN ONE-BANK TOWNS THAT WERE PAYOFFS 1982 1983 1984 1985 1986 National Banks 1 1 0 2 0 State Member Banks 0 0 0 0 0 State Nonmember Banks 2 1 0 9 1 3 2 02/ 11 1 Total Definitions: Agricultural banks have ratios of agricultural loans (production loans and real estate loans secured by farmland) to total loans net of unearned income of twenty-five percent or more. One-bank communities are located outside of Standard Metropolitan Statistical Areas and are determined from Call Report files to have only one bank. I/ No deposit payoffs but there were 3 deposit transfers. lb *Failures through March 27, 1986. Source: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis FDIC. 22 ENERGY: ITEM I SNC ENERGY LOANS AND COMMITMENTS 1/ (Dollars in Millions) Total $ Energy Loans and Commitments Outstanding 1977 1978 1979 1980 1981 1982 1983 1984 1985 6,837 . 8,705 10,076 15,939 20,515 38,146 46,293 56,908 48,981 $ Classifications S/S D 280 50 357 76 397 47 243 0 90 283 965 195 5,405 423 4,531 884 6,962 1,066 Loss Total 0 48 0 0 0 25 390 741 410 330 480 ' 444 243 373 1,185 6,218 6,155 8,438 Capital Total (Equity + Class. % Loss Res.) of Cap. 33,770 37,264 40,504 44,264 50,289 59,718 66,798 72,532 86,194 1.0 1.3 1.1 0.5 0.7 2.0 9.3 8.5 9.8 Weighted 2/ Total Clas-s-. % of Cap. .24 .42 .25 .11 .32 .53 2.52 2.88 2.71 1/ This information is der ived from the annual interagency program for review and classification of Shared National Credits (SN C). A SNC is defined as any loan or group of loans to a borrower aggregating $20 million or more, either outstanding or committed under a formal lending agreement and (a) shared at its inception by two or more banks; or (b) a portion of which is sold to one or more banks with the purchasing bank assuming its pro-rata sha re of the credit risk. Therefore, the above data are not meant to represent the full exte credits. Energy credits are those wlth SIC codes 131 nt of classified energy 1, 1321, 1381, 1382, 1389, 2911 or 3533. 2/ The ratios repres ent classified loans in the Shared weighted on the basis of 20 percent of substandard National Credit Program loans plus 50 percent of doubtful loans plus 100 percent of loss loans to equity capital plus loan loss reserves as reflected in the June 30 Call Report s for 1977 through 1985. All figures are weighted averages. Source: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Federal Reserve Board 23 1 SNC ENERGY LOANS AND COMMITMENTS 25 INSTITUTIONS WITH LARGEST SNC ENERGY EXPOSU RE (Dollars in Millions) Total Energy Credits 1982 1983 1984 1985 Total .* Assets $20,442 $280,682 19,355 26,757 14,667 193,607 280,844 155,523 Classified Energy Credits $ 617 3,476 3,279 3,091 Energy Credits/ Total Assets (%) Class. Credits/ Total Energy Credits (%) Number of Lenders by Asset Size <300 300-1,000 >1,000 7.3 3.0 7 6 12 10.0 18.0 9 3 13 9.5 12.3 7 2 16 9.4 21.1 9 6 10 Note: The above information is derived from the annual interagency program for review and classification of Shared National Credits (SNC). SNC A is def ine d as any loan or group of loans to a borrower aggregating $20 million or mor e, either outstanding or committed und er a ing agreement and (a) shared at its inc eption by two or more banks; or (b) a por formal lendIs sold to one or more banks with the tion of which purchasing bank assuming its pro-rata sha re risk. Therefore, the above data are not of the credit meant to represent the full extent of cla energy credits. Energy credits are tho ssified se with SIC codes of 1311, 1321, 1381, 138 or 3533. 2, 1389, 2911 To determine the 25 largest exposures, fir each institution to determine its relati st, energy credits were divided by total assets for ve exposure. The resulting ratio was use institutions in order from most exposed to least exposed, and then the instituti d to rank largest ratios were selected. Only ins ons with the titutions with a ratio of greater than five percent were included. Prior to 1982, fewer tha n 25 institutions had energy credits gre ater or equal to five percent of assets. NI -P https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis It was not possible to select a matched sample of 25 institutions for all time the 25 largest ratios were chosen for each year according to the procedure abo periods, so ve. The number of lenders by asset size is shown to indicate the variation in the sample. Source: Federal Reserve Board. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis LENDING TO LESS DEVELOPED NA TIONS: ITEM I 25 E.16(126) COUNTRY EXPOSURE LENDING SURVEY1 SEPTEMBER 1985 1/ TABLE I AMOUNTS OWED TO U.S. BANKS BY FOREIGN BORROI•itRS 2/3/ (INCLUDES ADJUSTMENTS TO REFLECT GUARANTEES AND INDIRECT BORROWINGS) (AMOUNTS IN MILLIONS OF DOLLARS) AMOUNTS OWED/ TOTAL AMOUNT PORTION OF TOTAL'S/. TOTAL AMOUNT AMOUNTS 5/ BY BORROWERS IN OWED BY COUNTRY THAT IS GUARANTEED OWED BORROWE6- BY OTHER COUNTRIES OF BORROWERS BY RESIDENTS OF LESS AMOUNTS FOREIGN OFFICES GUARANTEED BY RESIDENCE OTHER COUNTRIES GUARANTEED OF REPORTED NON -BANKS IN BORROWINGS BORROWINGS COUNTRY'S BANKS REPORTED COUNTRY OF BANKS OF NONBANKS TOTAL AMOUNTS OWED U.S. BANKS AFTER ADJUSTMENTS FOR GUARANTEES AND EXTERNAL BORROWING 0-10 AND SWITZERLAND BELGIUM-LUXEMBOURG CANADA FRANCE GERMANY, FEDERAL REPUBLIC OF ITALY JAPAN NETHERLANDS SWEDEN SWITZERLAND UNITED KINGDOM TOTALS 8196.0 11144.2 11378.6 4747.1 7100.2 15509.6 2569.9 3348.9 3183.3 42250.1 109428.4 2537.5 443.2 1282.6 278.3 247.8 225.7 261.7 172.3 85.4 21120.0 26654.7 144.7 604.8 102.5 296.7 97.1 158.9 360.7 20.7 316.7 2299.6 4402.7 5513.8 10096.1 9993.4 4172.0 6755.2 15125.0 1947.5 3155.9 2781.1 18830.5 78370.9 973.1 4890.4 5610.5 3209.2 4006.2 32523.1 1527.2 214.5 1114.0 3561.2 57629.6 1202.6 588.9 881.0 800.3 486.0 1611.3 461.1 203.4 675.5 3815.2 10725.9 7689.6 15575.5 16485.0 8181.6 11247.5 49259.4 3935.9 3573.9 4570.7 26207.0 146726.4 ON 0-10 DEVELOPED COUNTRIES AUSTRALIA AUSTRIA DENMARK FINLAND GREECE ICELAND IRELAND, REPUBLIC OF NEW ZEALAND NORWAY PORTUGAL SOUTH AFRICA SPAIN TURKEY OTHER TOTALS 5784.1 1598.4 2457.1 2038.6 2772.8 255.8 1201.2 1036.5 3523.4 1432.5 3441.1 4289.9 2244.3 251.6 32327.9 • 45.8 20.3 15.0 70.8 41.2 1.0 93.3 6.5 12.0 128.7 197.6 186.9 8.0 27.0 854.3 399.3 23.0 89.4 113.4 172.0 21.1 37.0 61.4 320.6 73.5 179.6 364.8 225.9 84.5 2165.7 5339.0 1555.1 2352.7 1854.4 2559.6 233.7 1070.8 968.5 3190.8 1230.3 3063.9 3738.1 2010.4 140.1 29307.8 1744.6 358.3 522.3 164.4 27.4 . 7.0 392.0 189.1 72.5 455.1 135.0 698.7 6.5 1.0 4774.4 486.8 125.0 262.4 61.6 232.1 .0 75.4 35.3 437.6 21.0 116.8 51.5 9.0 14.3 1929.1 7570.6 2038.4 3137.4 2080.5 2819.1 240.8 1538.2 1193.0 3701.0 1706.4 3315.8 4488.3 2025.9 155.4 36011.3 ASTERN EUROPE ALBANIA BULGARIA CZECHOSLOVAKIA GERMAN DEMOCRATIC REPUBLIC HUNGARY POLAND ROMANIA U.S.S.R. YUGOSLAVIA TOTALS .0 108.5 114.5 384.9 720.9 627.5 206.5 156.6 2388.3 4708.1 .0 3.7 .0 7.4 11.8 .0 4.8 102.9 130.6 .0 .0 3.0 2.0 30.3 18.1 1.0 25.2 140.0 219.6 .0 108.5 107.8 382.9 683.2 597.6 205.5 126.6 2145.4 4357.8 .0 .0 .0 121.5 .0 8.9 .0 15.0 5.0 150.5 .o .o 3.0 10.4 1.0 .0 2.9 .0 57.8 75.1 108.5 110.8 514.8 684.2 606.6 208.4 141.6 2208.2 4583.5 967.4 2184.8 65.7 2.0 5.5 1.0 48.2 221.4 14.8 917.2 1957.8 49.9 3.6 .0 .0 40.0 5.1 15.5 960.8 1962.9 65.4 EC MEMBERS ALGERIA ECUADOR GABON https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis .o .o PEC MEMBERS INDONESIA IRAN IRAQ KUWAIT LIBYA NIGERIA QATAR SAUDI ARABIA UNITED ARAB EMIRATES VENEZUELA TOTALS COUNTRY EXPOSURE LENDING SURVEY' SEPTEMBER 1985 TABLE I AMOUNTS OWED TO U. S. BANKS BY FOREIGN BO (INCLUDES ADJUSTMENTS TO RROWERS REFLECT GUARANTEES AND INDIRECT BORROWINGS) (AMOUNTS IN MILLIONS OF DOLLARS) TOTAL AMOUNT PORT AMOUNTS OWED TOTAL AMOUNT AMOUNTS OWED BY COUNTRY THAT ION OF TOTAL IS GU BY AR AN BORROWERS IN TE ED OWED OF BORROWERS BORROWED BY BY RESIDENTS OF OT HE R COUNTRIES LESS AMOUNTS FOREIGN OF RESIDENCE OTHER COUNTRIES FI CE S GU AR ANTEED BY OF REPORTED BORROWINGS BORROWINGS GUARANTEED NON-BANKS IN COUNTRY'S BANKS REPORT OF BANKS OF NONBANKS ED COUNTRY 2957.6 2.1 663.5 846.2 36.0 1431.4 13.8 1742.1 615.9 10221.0 21748.0 8.7 .0 408.1 11.4 .0 91.0 .0 28.0 81.1 22.1 658.9 N-OIL EXP DEV COUNTRIE S-LATIN AM A CARIBBEAN ARGENTINA • 8193.9 BOLIVIA 8.2 144.9 BRAZIL 4.2 22 90 3.6 469.8 CHILE 6196.8 223.6 COLOMBIA 2615.4 115.7 COSTA RICA 446.7 DOMINICAN REPUBLIC 2.6 484.0 EL SALVADOR 20.2 110.0 37.3 GUATEMALA 134.1 HONDURAS 23.3 136.7 JAMAICA 9.1 26 2.7 MEXICO .4 25186.7 386.6 NICARAGUA 134.6 PARAGUAY .0 19 0.4 PERU .0 1862.0 35.4 TRINIDAD AND TOBAGO 148.6 URUGUAY .0 923.4 OTHER 2.4 119.5 51.4 TOTALS 70194.7 1390.4 N-OIL EXP DEV COUNTRIE S-ASIA HINA.MAINLAND 491.4 .0 HINA.TAIWAN 21 19.2 120.0 NDIA 883.2 11.0 SRAEL 16 74.1 124.0 ORDAN 227.2 8.1 OREA, SOUTH 98 93.4 844.7 ALAYSIA 1477.0 4.5 'AKISTAN 176.7 1.1 HILIPPINES 5475.3 156.5 YRIA 28.2 .0 HAILAND 1892.3 49.7 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 511.6 2.0 81.7 35.0 11.0 313.5 10.2 215.0 60.8 430.2 1955.6 2437.3 .1 173.7 799.8 25.0 1026.8 3.6 1499.0 474.0 9768.6 19133.4 108.7 .0 .2 243.2 .0 .0 19.0 168.5 100.3 138.8 782.4 583.5 7.0 945.2 189.7 53.5 26.5 42.3 15.5 32.6 27.1 102.2 1417.1 1.0 4.8 177.3 22.6 30.7 18.3 3697.6 7602.1 133.7 21488.5 5783.3 2446.1 417.5 421.4 57.2 78.1 100.4 160.1 23382.9 133.5 185.6 1649.1 126.0 890.3 49.8 65106.6 854.7 2.0 2228.4 15.1 107.1 .0 .0 .0 .0 .0 .0 1207.4 .0 .0 1.3 .0 .0 3.0 4419.1 .0 69.3 16.7 73.2 13.7 211.0 60.0 1.1 268.2 2.0 64.6 491.4 1929.9 855.5 1476.9 205.4 8837.6 1412.5 174.4 5050.5 26.2 1778.0 551.6 183.6 368.1 86.9 122.3 838.9 171.3 19.0 127.6 .0 311.7 139.5 .0 .0 22.0 .0 30.0 .0 208.4 8.7 35.4 504.6 PAGE 2 TOTAL AMOUNTS OWED U.S. BANKS AFTER ADJUSTMENTS FOR GUARANTEES AND EXTERNAL BORROWING 2685.5 .1 173.9 1065.0 25.0 1056.8 22.6 1876.0 583.1 9942.9 20420.5 36.8 .0 214.9 68.4 5.4 4.0 .0 .5 .1 .0 .0 193.1 .0 2.0 4.2 2.2 2.6 .3 534.8 8493.7 135.7 23931.9 5866.9 2558.7 421.5 421.4 57.7 78.2 100.4 160.1 24783.5 133.5 187.6 1654.7 128.2 892.9 53.1 70060.6 73.7 170.0 86.7 335.0 2.0 753.8 68.4 21.8 47.3 1.0 10.3 1116.8 2283.5 1310.4 1898.8 329.8 10430.5 1652.2 215.2 5225.4 27.2 2100.1 COUNTRY EXPOSURE LENDING SURVEY TABLE I AMOUNTS OWED TO U.S. BANKS : SEPTEMBER 1985 BY FOREIGN BORROWERS (INCLUDES ADJUSTMENTS TO REFLECT GUA RANTEES AND INDIRECT BORROWING S) (AMOUNTS IN MILLIONS OF DOLLARS) TOTAL AMOUNT OWED BY COUNTRY OF BORROWERS RESIDENCE • NON-OIL EXP DEV COUNTRIES-ASIA OTHER TOTALS NON -OIL EXP DEV COUNTRIES-AFRIC A CAMEROON EGYPT GHANA IVORY COAST KENYA MALAWI MOROCO SENEGAL SUDAN TUNISIA ZAIRE ZAMBIA OTHER TOTALS OFFSHORE BANKING CENTERS BAHAMAS BAHRAIN BERMUDA BRITISH WEST INDIES HONG KONG LEBANON LIBERIA MACAO NETHERLANDS ANTILLES PANAMA SINGAPORE TOTALS https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis TOTAL AMOUNT OWED LESS AMOUNTS GUARANTEED AMOUNTS BORROWED BY FOREIGN OFFICES OF REPORTED COUNTRY'S BANKS AMOUNTS OWED BY BORROWERS IN OTHER COUNTRIES GUARANTEED BY NON -BANKS IN REPORTED COUNTRY TOTAL AMOUNTS OWED U.S. BANKS AFTER ADJUSTMENTS FOR GUARANTEES AND EXTERNAL BORROWING 929.1 25267.7 72.7 1392.4 185.2 965.2 671.1 22910.0 36.9 2818.2 4.3 1574.5 712.4 27302.8 225.3 1025.8 11.1 422.8 82.4 45.6 945.3 63.4 71.6 228.5 25.3 89.0 684.7 3921.3 .0 216.1 .0 1.0 .0 .0 119.5 .0 .4 3.5 .0 .0 13.9 354.4 91.3 135.6 9.1 9.6 6.4 1.0 3.2 .0 4.4 63.0 15.0 28.2 245.0 611.8 134.0 674.1 2.0 412.2 76.0 44.6 822.6 63.4 66.8 162.0 10.3 60.8 425.8 2955.0 .0 44.4 .0 .0 .0 3.0 10.0 .0 1.0 .0 .0 .0 2.0 60.4 5.0 4.6 1.0 .0 .0 .0 9.0 .2 .0 .0 .0 .0 5.7 25.6 139.0 723.1 3.0 412.2 76.0 47.6 841.6 63.6 67.8 162.0 10.3 60.8 433.6 3041.1 6258.3 5375.5 1501.6 789.4 592.6 3.8 8588.1 8174.6 6716.3 3207.4 88.0 .8 1574.9 1.0 239.8 152.2 1039.7 192.7 3076.8 959.3 6127.7 4537.4 35804.4 23394.5 INTERNATIONAL & REGIONAL ORGANI ZATIONS AFRICAN REGIONAL .7 ASIAN REGIONAL 2.0 E. EUROPEAN REGIONAL .0 IN 489 .7 LATIN AMERICAN REGIONAL 17.1 MIDDLE EASTERN REGIONAL 99. 0 W. EUROPEAN REGIONAL 368.8 TOTALS 977.3 Grand Totals 304378.0 CO PORTION OF TOTAL THAT IS GUARANTEED BY RESIDENTS OF OTHER COUNTRIES BORROWINGS BORROWINGS OF BANKS OF NONBANKS PAGE 3 .0 .0 .0 2.0 .0 .0 .0 2.0 54832.4 319.2 79.6 297.2 138.7 987.7 24.4 1447.5 1.5 589.4 1138.9 349.2 5373.6 .0 .0 .0 13.0 1.0 .0 .0 14.0 19406.1 563.5 632.5 291.6 274.7 2521.1 62.8 126.4 86.1 257.5 978.5 1241.0 7036.2 .7 2.0 .0 474.7 16.1 99.0 368.8 961.3 230139.4 28.0 212.9 1.0 34.8 196.7 24.4 .0 .0 5.0 29.0 169.1 701.0 .0 .0 .0 4.0 10.0 .0 5.6 19.6 71355.4 49.4 16.9 54.9 13.0 530.5 5.3 4.9 5.8 47.5 57.6 216.0 1002.0 .0 1.0 .0 15.0 11.0 .0 40.0 67.0 16438.8 641.0 862.4 347.5 322.5 3248.4 92.5 131.3 91.9 310.0 1065.1 1626.2 8739.3 .7 3.0 .0 493.7 37.1 99.0 414.4 1047.9 317933.7 TABLE II AMOUNTS OWED TO U.S . BANKS BY FOREIGN BORROWERS = SEPTEM (DATA BY TYPE OF BORROWER AND MATURITY DISTRIBUTION) BER 1985 (AMOUNTS IN MILLIONS OF DOL LARS) COUNTRY G-10 AND SWITZERLAND BELGIUM-LUXEMBOURG CANADA FRANCE GERMANY, FEDERAL REPUBLIC OF ITALY JAPAN NETHERLANDS SWEDEN SWITZERLAND UNITED KINGDOM TOTALS NON 0-10 DEVELOPED COUNTR IES AUSTRALIA AUSTRIA DENMARK FINLAND GREECE ICELAND IRELAND, REPUBLIC OF NEW ZEALAND NORWAY PORTUGAL SOUTH AFRICA SPAIN TURKEY OTHER TOTALS ASTERN EUROPE ALBANIA BULGARIA CZECHOSLOVAKIA GERMAN DEMOCRATIC REP UBLIC HUNGARY POLAND ROMANIA U.S.S.R. YUGOSLAVIA TOTALS PEC MEMBERS ALGERIA ECUADOR GABON INDONESIA https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis TOTAL AMOUNT OWED (BY RESIDENCE PORTION OF TOTAL OWED BY OF BORROWER) BANKS PUBLIC PRIVATE BORROWERS NONBANK BORROWERS 8196.0 6792.9 11144.2 5548.0 11378.6 8482.1 4747.1 1650.9 7100.2 3986.7 15509.6 9132.5 2569.9 1010.5 3348.9 2143.7 3183.3 1481.8 42250.1 30817.2 109428.4 71046.7 5784.1 691.0 1598.4 4 1128.1 2457.1 759.0 2038.6 1045.8 2772.8 161.7 255.8 77.0 1201.2 291.0 1036.5 70.2 3523.4 1005.1 1432.5 557.9 3441.1 2231.3 4289.9 1762.3 2244.3 551.5 251.6 44.8 32327.9 10377.3 581.8 426.2 1619.6 787.3 2055.7 182.6 215.7 467.4 155.9 1269.7 7762.3 480.0 362.5 232.8 381.2 864.7 98.2 664.3 186.1 148.0 778.6 180.3 1035.7 1473.8 32.1 6918.8 .0 108.5 114.5 384.9 720.9 627.5 206.5 156.6 2388.3 4708.1 .0 14.1 71.4 293.7 119.7 164.1 10.1 20.4 1253.9 1947.6 .0 90.0 39.1 72.2 598.7 453.4 196.4 128.0 910.6 2488.7 967.4 2184.8 65.7 2957.6 420.9 185.2 .0 257.6 421.9 1817.7 53.2 828.1 821.2 5169.8 1276.8 2308.8 1057.7 6194.4 1343.7 737.7 1545.5 10163.1 30619.2 PAGE 1 MATURITY OF DISTRIBUTION OF AMOUNTS OWED ONE YEAR OVER ONE OVER 5 AND UNDER TO 5 YEARS YEARS 7442.9 7319.0 9090.9 3046.8 4401.7 12481.6 1871.9 2612.3 2568.8 36438.7 87275.0 437.3 1527.5 1301.8 1319.5 1746.3 2477.5 287.9 383.9 262.2 3702.1 13446.3 4613.0 107.7 1465.2 611.5 1746.4 80.6 245.8 780.0 2370.2 95.9 1029.4 1491.8 218.8 174.7 15031.7 2619.5 1280.5 1553.2 1417.6 961.2 120.8 542.0 405.6 1719.4 745.7 2810.2' 2191.5 1188.8 131.3 17687.8 1581.7 201.4 620.2 470.4 1203.5 81.0 319.3 280.0 991.8 559.1 574.5 1411.5 918.5 99.5 9312.9 .0 4.4 4.0 18.9 2.4 10.0 .0 8.2 223.7 271.7 .0 88.5 73.9 314.5 363.6 180.3 99.0 63.3 978.8 2162.3 .0 20.0 40.5 69.0 262.7 319.2 102.0 79.9 1123.0 2016.5 .0 .0 .0 1.3 94.6 127.9 5.5 13.4 286.4 529.2 304.5 1060.4 35.9 1673.7 325.2 766.9 22.7 811.7 337.7 357.3 7.0 472.1 124.5 181.7 12.5 1871.9 315.7 2297.7 985.8 380.7 952.2 550.4 410.0 352.7 352.3 2109.2 8707.0 1582.9 116.5 283.5 150.6 608.0 54.0 339.7 350.8 812.1 127.6 56.4 686.8 137.0 20.8 5327.1 TABLE II AMOUNTS OWED TO U.S. BANKS BY FOREIGN BORROWERS ' SEPTEM (DATA BY TYPE OF BORROWER AND MATURITY DISTRIBUTION) BER 1985 (AMOUNTS IN MILLIONS OF DOL LARS) COUNTRY OPEC MEMBERS IRAN IRAQ KUWAIT LIBYA NIGERIA QATAR SAUDI ARABIA UNITED ARAB EMIRATES VENEZUELA TOTALS TOTAL AMOUNT OWED (BY RESIDENCE PORTION OF TOTAL OWED BY OF BORROWER) BANKS PUBLIC PRIVATE BORROWERS NONBANK BORROWERS 2.1 663.5 846.2 36.0 1431.4 13.8 1742.1 615.9 10221.0 21748.0 .0 511.6 589.1 10.0 331.0 .0 374.3 325.7 2250.1 5256.0 NON-OIL EXP DEV COUNTRIES-LAT IN AM & CARIBBEAN ARGENTINA 8193.9 1562.0 BOLIVIA 144.9 17.7 BRAZIL 22903.6 7193.4 CHILE 6196.8 2657.4 COLOMBIA 261 5.4 979.7 COSTA RICA 446 .7 21.8 DOMINICAN REPUBLIC 48 4. 0 37 .2 EL SALVADOR 110.0 64.4 GUATEMALA 134.1 32.3 HONDURAS 136 .7 20.6 JAMAICA 262.7 .9 MEXICO 251 86.7 4170.2 NICARAGUA 134.6 11.4 PARAGUAY 190 .4 7.3 PERU 186 2.0 316 .0 TRINIDAD AND TOBAGO 148 .6 .5 URUGUAY 923.4 36.8 OTHER 119 .5 62 .8 TOTALS 70194.7 17193.0 ON-OIL EXP DEV COUNTRIES-ASIA CHINA,MAINLAND 491.4 280.0 CHINA,TAIWAN 21 19 .2 82 8.3 INDIA 883.2 202.8 ISRAEL 1674.1 1162.0 JORDAN 22 7. 2 95.8 KOREA, SOUTH 989 3.4 489 5.0 MALAYSIA 147 7.0 193 .5 PAKISTAN 176.7 16.8 PHILIPPINES 5475.3 870.1 SYRIA 28.2 20.5 THAILAND 1892.3 999.5 OTHER 929.1 238.7 TOTALS 25267.7 9803.6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis .0 150.9 29.0 15.0 971.6 .0 29.0 162.2 5053.3 9532.2 2.1 1.0 228.0 11.0 128.8 13.7 1338.7 127.9 2917.5 6959.7 4496.0 104.2 11933.8 2624.3 1017.1 384.0 381.4 34.6 58.1 69.9 257.3 13346.2 118.1 126.4 1280.7 141.1 786.9 48.5 37209.3 2135.7 22.9 3776.3 915.0 618.5 40.8 65.3 10.8 43.7 46.1 4.5 7670.2 5.0 56.6 265.1 7.0 99.7 8.2 15792.2 128.0 625.0 302.4 320.3 102.3 2044.2 720.2 101.7 3335.9 3.7 170.6 318.2 8173.1 83.2 665.7 378.0 191.7 29.1 2954.2 563.2 58.1 1269.2 4.0 722.0 372.1 7290.9 PAGE 2 MATURITY OF DISTRIBUT ION OF AMOUNTS OWED ONE YEAR OVER ONE OVER 5 AND UNDER TO 5 YEARS YEARS 2.1 383.1 783.3 36.0 946.5 9.8 1259.4 499.5 8527.1 15521.7 5212.1 131.9 8675.5 2277.5 1487.3 149.7 290.3 63.5 75.4 97.0 101.9 8177.5 98.6 91.2 1226.1 67.5 343.7 96.7 28664.2 418.2 1323.4 421.6 1187.2 156.8 6566.7 371.2 98.1 2804.4 28.2 1497.8 335.8 15210.1 .0 279.3 62.9 .0 404.8 3.0 282.1 94.0 1347.6 4400.6 .0 1.1 .0 .0 80.1 1.0 200.6 22.4 346.1 1825.6 2365.0 616.6 10.0 3.0 8691.3 5536.8 2921.2 998.0 713.1 414.9 236.5 60.5 178.9 14.7 45.4 1.0 54.7 4.0 37.4 2.2 123.6 37.2 10135.4 6873.7 12.9 23.1 89.2 10.0 496.8 139.0 44.2 36.8 553.4 26.2 14.8 8.0 26724.3 14806.0 38.e 562.8 263.6 416.3 51.8 2216.9 714.2 78.6 2045.6 .0 313.8 463.1 7165.9 34.4 232.8 197.9 70.4 18.6 1109.8 391.5 .0 625.2 .0 80.5 130.1 2891.6 TABLE II AMOUNTS OW ED TO U.S. BANKS (DATA BY TYPE OF BORROWER BY FOREIGN BORROWERS: SEPTEMBER 1985 AND MATU TY DISTRIBUTI , ON) (AMOUNTS IN MILLIONS OF RI DOLLARS) TOTAL AMOUNT OWED (BY RESIDENCE PO RTION OF TOTAL OWED BY OF BORROWER) BANKS PUBLIC PRIVATE BORROWERS NONBANK BORROWERS NON-OIL EXP DEV COUNTR IE S-A FR ICA CAMEROON 225.3 EGYPT 16.8 76.0 132.5 1025.8 GHANA 675.6 113.0 23 7.2 11.1 IVORY COAST 1.0 8.1 2. 0 422.8 KENYA 15.8 348.2 58 .8 82.4 MALAWI 2.4 23.3 56.7 45.6 MOROCO 17.6 24.0 4.0 94 5. SENEGAL 3 506.5 395.7 43.1 63.4 SUDAN 2.0 34.2 27.2 71.6 TUNISIA 15.4 52.9 3.3 228.5 ZAIRE 74.7 141.8 12 .0 25.3 ZAMBIA .0 25.3 .0 89.0 OTHER 3.1 77.1 8.8 68 4.7 .141.1 TOTALS 372.2 17 1.4 3921.3 1472.0 1692.2 75 7. 0 OFFSHORE BANKING CENTER S BAHAMAS 6258.3 BAHRAIN 5786.8 33.0 438.3 1501.6 BERMUDA 1406.5 43.0 52.1 592.6 BRITISH WEST INDIES 55.5 59.0 47 8.0 8588.1 HONG KONG 8383.4 67.7 13 7. 0 6716.3 LEBANON 4286.4 82.7 23 47 .2 88.0 LIBERIA 41.6 1.3 45.1 1574.9 MACAO 11.4 50.9 15 12 .6 239.8 NETHERLANDS ANTILLES 214.7 7.0 18 .1 10 39.7 PANAMA 248.4 22.9 768.3 3076.8 1162.4 SINGAPORE 381.0 15 33.3 61 27 .7 5130.3 TOTALS 113.8 88 3.5 35804.4 26727.8 862.5 82 13 .9 INTERNATIONAL & REGION AL ORGANIZATIONS AFRICAN REGIONAL .7 ASIAN REGIONAL .7 .0 2.0 E. EUROPEAN REGIONAL 2.0 .0 .0 INTERNATIONAL .0 0 489.7 LATIN AMERICAN REGION 489.7 AL 0 17 .1 MIDDLE EASTERN REGION 17.1 .0 99.0 W. EUROPEAN REGIONAL AL 99.0 .0 368.8 368.8 TOTALS .0 977.3 977.3 .0 )0001 GRAND **** ** TOTALS ** 304378.0 143824.4 75616.8 84936.7 PAGE 3 COUNTRY LAI ....J https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MATURITY OF DISTRIBU TION OF AMOUNTS OWED ONE YEAR OVER ONE OVER 5 AND UNDER TO 5 YEARS YEARS 59.7 758.4 6.4 147.9 62.7 34.8 711.9 38.0 55.2 140.5 17.8 45.1 429.4 2508.4 153.6 211.8 4.7 177.0 18.7 10.7 222.0 22.6 4.3 64.8 7.5 19.8 188.3 1106.2 12.0 55.5 .0 97.9 1.0 .0 11.4 2.7 12.1 23.2 .0 24.0 66.9 306.7 5946.9 1456.2 445.4 8416.5 5694.2 80.6 527.6 225.6 538.3 1962.5 5683.9 30978.2 234.6 38.4 65.1 118.6 638.0 5.4 704.9 7.9 333.2 748.2 271.7 3166.3 76.7 7.0 82.0 53.0 384.1 2.0 342.4 6.3 168.1 366.0 172.1 1659.8 .7 1.0 .0 147.0 1.0 97.0 119.4 366.1 .0 .0 .0 128.5 2.0 .0 104.4 234.9 .0 1.0 .0 214.2 14.1 2.0 145.0 376.3 200374.0 67574.2 36429.7 TABLE III CROSS BORDER AND NON-LOCAL CURRENCY CONT INGENT CLAIMS' SEPTEMBER 1985 (IN MILLIONS OF DOLLARS) TOTAL (BY COUNTRY OR RESIDENCE) 0-10 AND SWITZERLAND BELGIUM-LUXEMBOURG CANADA FRANCE GERMANY, FEDERAL REPUBLIC OF ITALY JAPAN NETHERLANDS SWEDEN SWITZERLAND UNITED KINGDOM TOTALS NON 0-10 DEVELOPED COUNTRIES AUSTRALIA AUSTRIA DENMARK FINLAND OR ICELAND IRELAND, REPUBLIC OF NEW ZEALAND NORWAY PORTUGAL SOUTH AFRICA SPAIN TURKEY OTHER TOTALS EASTERN EUROPE ALBANIA BULGARIA CZECHOSLOVAKIA GERMAN DEMOCRATIC REPUBLIC HUNGARY POLAND ROMANIA U.S.S.R. YUGOSLAVIA TOTALS OPEC MEMBERS ALGERIA ECUADOR GABON INDONESIA IRAN IRAQ https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis PORTION OF TOTAL CONSISTING OF LETTERS OF CREDIT OTHER COMM. COMMITMENTS GUARANTEED BY RESIDENTS OF OTHER COUNTRY COMMITMENTS TO RESIDENTS OF OTHER COUNTRIES GUARANTEED BY RESIDENTS OF REPORTED COUNTRIES 1477.8 5173.4 6782.4 2312.9 2488.5 4632.4 1453.5 3086.7 3465.2 11965.3 42838.5 258.8 683.4 1003.7 1122.0 247.4 1100.3 432.7 409.0 2022.0 2878.1 10157.9 1219.0 4489.9 5778.7 1190.9 2241.0 3532.1 1020.7 2677.7 1443.1 9087.1 32680.5 189.5 152.7 270.3 85.4 54.9 65.5 194.8 44.1 233.4 2077.3 3368.2 1424.9 318.6 1027.8 426.4 264.6 1403.4 263.5 183.8 432.9 3271.9 9018.1 4907.3 623.6 1273.8 570.8 'N 736.9 40.2 748.5 1134.3 1795.7 405.3 372.9 1402.2 540.4 62.2 14614.7 1687.9 138.4 169.5 214.0 195.0 4.1 133.7 470.6 419.5 183.8 134.9 317.1 317.9 23.9 4410.8 3219.4 485.2 1104.3 356.8 541.8 36.1 614.8 663.7 1376.2 221.5 238.0 1085.1 222.5 38.3 10203.8 236.1 6.1 35.2 33.7 37.5 .1 166.6 316.2 200.3 87.0 87.2 96.3 58.7 14.2 1375.3 168.4 31.3 125.0 18.3 44.1 .0 25.0 43.0 118.2 2.0 20.5 86.2 .0 3.0 685.2 .0 26.0 8.1 112.1 97.7 36.8 40.4 19.0 110.1 450.4 488.6 280.9 51.2 1267.9 1.3 65.3 .0 10.0 .1 2.3 23.0 22.9 33.3 1.0 21.0 113.6 .0 16.0 8.0 109.8 74.7 13.9 7.1 18.0 89.1 336.7 145.6 166.1 14.8 459.1 1.3 37.4 343.0 114.7 36.4 808.7 .0 27.9 .o .o .o PAGE 1 TOTAL COMM. AFTER AJUSTMENT FOR GUARANTEES 2713.2 5339.3 7540.0 2653.9 2698.2 5970.3 1522.1 3226.4 3664.7 13159.8 48488.4 4839.7 648.8 1363.6 555.4 743.5 40.1 606.9 861.1 1713.7 320.3 306.2 1392.1 481.7 51.0 13924.6 4.0 16.9 9.6 .0 .0 13.3 43.8 .0 .0 .0 5.0 .0 2.0 .0 .0 .5 7.5 .0 26.0 8.1 113.1 80.8 29.2 40.4 19.0 97.3 414.0 74.0 131.9 15.0 262.1 1.3 13.7 7.0 1.4 .0 136.7 .0 1.0 421.6 150.3 36.2 1142.4 .0 52.6 TABLE III CROSS BORDER AND NON-LOCAL CURRENCY CONT INGENT CLAIMS: SEPTEMBER 1985 (IN MILLIONS OF DOLLARS) TOTAL (BY COUNTRY OR RESIDENCE) OPEC MEMBERS KUWAIT LIBYA NIGERIA QATAR SAUDI ARABIA UNITED ARAB EMIRATES VENEZUELA TOTALS PORTION OF TOTAL CONSISTING OF LETTERS OF CREDIT OTHER COMM. COMMITMENTS GUARANTEED BY RESIDENTS OF OTHER COUNTRY COMMITMENTS TO RESIDENTS OF OTHER COUNTRIES GUARANTEED BY RESIDENTS OF REPORTED COUNTRIES PAGE 2 TOTAL COMM. AFTER AJUSTMENT FOR GUARANTEES 179.7 23.9 372.6 12.4 1142.5 199.5 627.1 4713.3 110.7 12.9 216.0 5.4 663.8 162.2 419.1 2414.8 69.0 11.0 156.6 7.0 478.7 37.3 208.0 2298.5 2.8 .0 131.4 .9 230.7 16.2 131.1 1011.2 NON-OIL EXP DEV COUNTRIES-LATIN AM & CARIBBEAN ARGENTINA 1049.0 BOLIVIA 19.9 BRAZIL 1326 .5 CHILE 513. 1 COLOMBIA 525. 4 COSTA RICA 65.4 DOMINICAN REPUBLIC 24.9 EL SALVADOR 103. 8 GUATEMALA 71.2 HONDURAS 45.0 JAMAICA 22.4 MEXICO 1575.6 NICARAGUA .0 PARAGUAY 55.0 PERU 289.6 TRINIDAD AND TOBAGO 57.0 URUGUAY 12.3 OTHER 27.0 TOTALS 5783.8 13.4 .0 .0 1.0 31.6 13.8 .3 206.2 190.3 23.9 241.1 12.5 943.4 197.1 496.3 3908.2 225.9 13.8 287.4 196.8 131.0 17.9 21.9 78.4 34.1 45.0 20.2 865.5 .0 36.5 101.1 4.0 5.5 21.2 2106.9 823.0 6.1 1039.1 316.3 394.4 47.5 3.0 25.4 37.1 .0 2.2 710.0 .0 18.5 188.4 53.0 6.8 5.8 3676.9 45.0 2.6 499.4 43.0 215.9 42.2 15.1 38.5 39.2 28.6 6.1 518.4 .0 6.8 149.6 9.0 5.5 10.2 1675.5 7.8 .0 29.9 4.1 .2 .0 .0 .0 .0 .0 .0 19.2 .0 .0 1.0 .0 .0 .0 62.2 1011.7 17.3 857.0 474.2 309.7 23.2 9.7 65.3 32.0 16.3 16.3 1076.4 .0 48.2 140.9 48.0 6.8 16.8 4170.5 235.9 1112.8 615.0 221.1 65.3 2321.7 316.0 228.5 735.8 27.8 514.9 565.6 6960.9 63.8 703.9 423.2 114.3 30.4 1337.0 172.6 110.5 342.7 26.8 189.7 170.3 3685.6 172.1 408.9 191.8 106.8 34.9 984.6 143.4 118.0 393.0 1.0 325.2 395.3 3275.2 4.0 110.7 26.0 47.1 7.2 206.0 13.7 4.1 122.2 1.0 10.2 151.4 703.6 75.3 82.5 25.2 31.2 2.8 322.2 2.0 15.0 5.9 .0 13.6 7.0 582.8 307.2 1084.6 614.2 205.2 60.9 2437.9 304.3 239.4 619.5 26.8 518.3 421.2 6840.0 64.1 632.9 8.7 433.0 55.4 199.9 48.7 99.8 .0 9.3 NON-OIL EXP DEV COUNTRIES-ASIA CHINA,MAINLAND CHINA,TAIWAN INDIA ISRAEL JORDAN KOREA, SOUTH MALAYSIA PAKISTAN PHILIPPINES SYRIA THAILAND OTHER TOTALS NON-OIL EXP DEV COUNTRIES-AFRICA CAMEROON EGYPT https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 15.4 542.4 _ TABLE III CROSS BORDER AND NON-LOCAL CURRENCY CONTINGENT CLAIMS' SEPTEMBER 1985 (IN MILLIONS OF DOLLARS) TOTAL (BY COUNTRY OR RESIDENCE) PORTION OF TOTAL CONSISTING OF LETTERS OF CREDIT OTHER COMM. COMMITMENTS GUARANTEED BY RESIDENTS OF OTHER COUNTRY COMMITMENTS TO RESIDENTS OF OTHER COUNTRIES GUARANTEED BY RESIDENTS OF REPORTED COUNTRIES PAGE 3 TOTAL COMM. AFTER AJUSTMENT FOR GUARANTEES NON-OIL EXP DEV COUNTRIES-AFRICA GHANA IVORY COAST KENYA MALAWI MOROCO SENEGAL SUDAN TUNISIA ZAIRE ZAMBIA OTHER TOTALS 24.3 57.1 74.0 1.7 71.9 17.6 24.8 156.6 5.3 59.2 406.3 1596.1 15.3 24.0 16.8 .4 41.1 16.6 24.4 5.0 5.3 36.0 306.1 932.8 9.0 33.1 57.2 1.3 30.8 1.0 .4 151.6 .0 23.2 100.2 663.2 16.0 11.1 6.2 1.3 17.4 .0 1.8 87.5 .6 17.1 138.3 445.8 4.7 .0 .0 .0 .0 .0 4.0 .0 .0 .0 3.2 21.2 13.0 46.0 67.8 .4 54.5 17.6 27.0 69.1 4.7 42.1 271.2 1171.5 OFFSHORE BANKING CENTERS BAHAMAS BAHRAIN BERMUDA BRITISH WEST INDIES HONG KONG LEBANON LIBERIA MACAO NETHERLANDS ANTILLES PANAMA SINGAPORE TOTALS 184.2 ,125.2 2877.8 213.6 2423.1 140.5 345.2 11.1 595.2 587.2 880.4 8383.9 111.6 91.2 2309.5 160.5 1622.4 99.3 70.9 2.0 223.1 395.6 473.0 5559.5 72.6 34.0 568.3 53.0 800.7 41.2 274.3 9.1 372.1 191.6 407.4 2824.4 68.5 11.3 1712.1 156.6 986.4 33.4 3a3.6 .8 441.2 391.2 195.3 4305.7 227.1 15.4 28.2 86.0 266.6 5.1 2.0 .0 8.6 25.3 313.1 977.5 342.8 129.3 1193.9 142.9 1703.3 112.2 38.6 10.3 162.6 221.3 998.1 5055.8 13.1 .0 .0 76.0 3.1 22.0 85.8 200.0 .o .o .o .o 3.1 22.0 10.8 35.9 13.1 .0 .0 76.0 .0 .0 75.0 164.1 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 258.5 12.7 .0 .0 271. 13.1 .0 .0 334.5 15.9 22.0 85.8 471.4 85542.0 29418.3 56123.6 12929.4 11832.2 84444.8 INTERNATIONAL & REGIONAL ORGANIZATIONS AFRICAN REGIONAL ASIAN REGIONAL E. EUROPEAN REGIONAL INTERNATIONAL LATIN AMERICAN REGIONAL MIDDLE EASTERN REGIONAL W. EUROPEAN REGIONAL TOTALS GRAND **** ** TOTALS )0( MEN https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ' COUNTRY EXPOSURE LENDING SURVEY: SEPTEMBE R 1985 TABLE I AMOUNTS OWED TO U.S. BANKS BY FORE IGN BORROWERS (INCLUDES ADJUSTMENTS TO REFLECT GUARANTE ES AND INDIRECT BORROWINGS) (AMOUNTS IN MILLIONS OF DOLLARS) 9 MONEY CENTER BANKS AMOUNTS OWED TOTAL AMOUNT PORTION OF TOTAL TOTAL AMOUNT AMOUNTS BY BORROWERS IN OWED BY COUNTRY THAT IS GUARANTEED OWED BORR OWED BY OTHE R COUNTRIE OF BORROWERS BY RESIDENTS OF LESS AMOUNTS FOREIGN OFFICES GUARANTEED BY S RESIDENCE OTHER COUNTRIES GUARANTEED OF REPORTED NON-BANKS IN *BORROWINGS BORROWINGS COUNTRY'S BANKS REPORTED COUNTRY OF BANKS OF NONBANKS PAGE 1 TOTAL AMOUNTS OWED U.S. BANKS AFTER ADJUSTMENTS FOR GUARANTEES AND EXTERNAL BORROWING -10 AND SWITZERLAND BELGIUM-LUXEMBOURG CANADA FRANCE GERMANY, FEDERAL REPUBLIC OF ITALY JAPAN NETHERLANDS SWEDEN SWITZERLAND UNITED KINGDOM TOTALS 5078.8 6344.6 7147.4 3861.0 4323.4 10574.0 1656.8 1363.3 2204.6 21341.1 63895.0 1128.8 125.0 386.2 122.0 121.0 55.0 127.5 59.0 42.0 7961.6 10128.1 130.2 418.2 91.0 253.9 91.9 88.2 246.1 11.0 311.3 1968.9 3610.7 3819.8 5801.4 6670.2 3485.1 4110.5 10430.8 1283.2 1293.3 1851.3 11410.6 50156.2 265.4 1248.9 1552.2 874.5 1378.7 11247.8 313.1 57.0 181.6 830.4 17949.6 ON 6-10 DEVELOPED COUNTRIES AUSTRALIA AUSTRIA DENMARK FINLAND GREECE ICELAND IRELAND, REPUBLIC OF NEW ZEALAND NORWAY PORTUGAL SOUTH AFRICA SPAIN TURKEY OTHER TOTALS 1133.2 362.9 768.9 513.8 398.3 905.8 335.3 142.7 517.9 3295.9 8374.7 5218.4 7413.2 8991.3 4873.4 5887.5 22584.4 1931.6 1493.0 2550.8 15536.9 76480.5 3852.6 989.8 1901.9 1223.6 2363.7 214.5 847.7 642.3 2762.7 952.8 2413.8 2938.9 1578.9 190.3 22873.5 .... 1.0 5.3 3.0 .0 35.0 .0 75.2 3.0 5.0 38.0 79.0 86.9 6.0 3.0 340.4 337.1 23.0 87.4 113.0 170.7 20.0 37.0 54.0 272.5 73.2 132.1 355.8 109.1 80.0 1864.9 3514.5 961.5 1811.5 1110.6 2158.0 194.5 735.5 585.3 2485.2 841.6 2202.7 2496.2 1463.8 107.3 20668.2 194.5 93.9 107.6 62.0 14.0 .0 83.7 38.0 9.0 232.6 73.0 232.5 2.0 1.0 1143.8 ASTERN EUROPE ALBANIA BULGARIA CZECHOSLOVAKIA GERMAN DEMOCRATIC REPUBLIC HUNGARY POLAND ROMANIA U.S.S.R. YUGOSLAVIA TOTALS 238.8 63.0 235.4 54.4 186.0 .0 69.0 13.0 408.7 8.0 74.4 41.0 9.0 13.0 1413.7 3947.8 1118.4 2154.5 1227.0 2358.0 194.5 888.2 636.3 2902.9 1082.2 2350.1 2769.7 1474.8 121.3 23225.7 .0 96.0 84.4 287.7 465.3 442.8 177.0 143.2 1533.6 3230.0 11.0 .0 4.8 72.8 92.3 .0 .0 3.0 1.0 21.0 13.1 1.0 17.0 93.0 149.1 .0 96.0 77.7 286.7 444.3 418.7 176.0 121.4 1367.8 2988.6 6.0 5.0 11.0 685.7 1406.3 2.0 .0 48.0 194.8 635.7 1211.5 .o .o 'EC MEMBERS ALGERIA ECUADOR https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis .o .o 3.7 .0 .0 .o .o .o .o .o .o .o .0 .0 3.0' .0 .0 .0 .0 .0 37.0 40.0 .0 96.0 80.7 286.7 444.3 418.7 176.0 127.4 1409.8 3039.6 39.0 .0 674.7 1211.5 • COUNTRY EXPOSURE LENDING SURVEY: SEPTEMBER 1985 TABLE I AMOUNTS OWED TO U.S. BANKS BY FOREIGN BORROWERS (INCLUDES ADJUSTMENTS TO REFLECT GUARANTEES AND INDIRECT BORROWINGS) (AMOUNTS IN MILLIONS OF DOLLARS) 9 MONEY CENTER BANKS AMOUNTS OWED TOTAL AMOUNT PORTION OF TOTAL TOTAL AMOUNT AMOUNTS BY BORROWERS IN OWED BY COUNTRY THAT IS GUARANTEED OWED BORROWED BY OTHER COUNTRIES OF BORROWERS BY RESIDENTS OF LESS AMOUNTS FOREIGN OFFICES GUARANTEED BY RESIDENCE OTHER COUNTRIES GUARANTEED OF REPORTED NON-BANKS IN BORROWINGS BORROWINGS COUNTRY'S BANKS REPORTED COUNTRY OF BANKS OF NONBANKS OPEC MEMBERS GABON INDONESIA IRAN IRAQ KUWAIT LIBYA NIGERIA QATAR SAUDI ARABIA UNITED ARAB EMIRATES VENEZUELA TOTALS 52.7 2460.7 .0 537.2 665.1 36.0 1118.9 12.7 1571.6 496..3 7250.3 16293.5 PAGE 2 TOTAL AMOUNTS OWED U.S. BANKS AFTER ADJUSTMENTS FOR GUARANTEES AND EXTERNAL BORROWING 1.0 3.5 .0 362.0 11.4 .0 84.0 .0 28.0 47.8 15.0 554.7 14.5 423.5 .0 80.2 32.0 11.0 251.9 10.2 190.5 53.4 265.9 1575.9 37.2 2033.7 .0 95.0 621.7 25.0 783.0 2.5 1353.1 395.1 6969.4 14162.9 .0 46.9 .0 .0 97.2 .0 .0 14.0 117.7 28.0 79.5 383.3 15.5 90.0 .0 .0 22.0 .0 30.0 .0 203.1 8.7 31.2 439.5 52.7 2170.6 .0 95.0 740.9 25.0 813.0 16.5 1673.9 431.8 7080.1 14985.7 NON-OIL EXP DEV COUNTRIES-LATIN AM 81 CARIBBEAN ARGENTINA 5679.4 3.0 BOLIVIA 80.0 2.0 BRAZIL 15512.0 334.5 CHILE 3783.3 158.5 COLOMBIA 1911.6 102.0 COSTA RICA 225.7 1.0 DOMINICAN REPUBLIC 349.6 7.0 EL SALVADOR 46.5 16.0 GUATEMALA 51.9 .0 HONDURAS 74.9 .0 JAMAICA 216.3 .3 MEXICO 14185.4 137.0 NICARAGUA 84.1 .0 PARAGUAY 163.8 .0 PERU 1087.0 25.0 TRINIDAD AND TOBAGO 119.0 .0 URUGUAY 713.8 .0 OTHER 41.9 2.0 TOTALS 44326.2 788.3 461.7 5.0 645.7 92.9 24.5 6.9 33.3 2.8 2.2 12.5 79.4 623.1 1.0 4.0 88.4 3.0 16.6 9.0 2112.0 5214.7 73.0 14531.8 3531.9 1785.1 217.8 309.3 27.7 49.7 62.4 136.6 13425.3 83.1 159.8 973.6 116.0 697.2 30.9 41425.9 731.0 2.0 1407.7 13.0 64.0 .0 .0 .0 .0 .0 .0 463.0 .0 .0 1.0 .0 .0 .0 2681.7 16.8 .0 64.0 55.0 3.0 2.0 .0 .0 .0 .0 .0 47.0 .0 2.0 4.0 2.0 .0 .0 195.8 5962.5 75.0 16003.5 3599.9 1&52.1 219.8 309.3 27.7 49.7 62.4 136.6 13935.3 83.1 161.8 978.6 118.0 697.2 30.9 44303.4 .0 58.1 16.0 38.0 12.6 162.5 59.7 .6 186.5 342.0 1153.9 677.1 961.5 169.6 5151.8 1041.7 171.6 3502.7 332.3 30.2 144.0 59.0 48.2 165.9 81.4 17.0 95.2 71.0 118.3 11.0 61.0 .0 473.0 60.4 21.8 4.0 745.3 1302.4 832.1 1081.5 217.8 5790.7 1183.5 210.4 3601.9 NON-OIL EXP DEV COUNTRIES-ASIA CHINA,MAINLAND CHINA,TAIWAN INDIA ISRAEL JORDAN KOREA, SOUTH MALAYSIA PAKISTAN PHILIPPINES https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 342.0 1236.0 704.1 1059.0 185.2 5753.0 1103.4 172.2 3812.2 .0 24.0 11.0 59.5 3.0 438.7 2.0 .0 123.0 COUNTRY EXPOSURE LENDING SURVEY: SEPTEMBER 1985 TABLE I AMOUNTS OWED TO U.S. BANKS BY FOREIGN BORROWERS (INCLUDES ADJUSTMENTS TO REFLECT GUARANTEES AND INDIRECT BORROWINGS) (AMOUNTS IN MILLIONS OF DOLLARS) 9 MONEY CENTER BANKS AMOUNTS OWED TOTAL AMOUNT PORTION OF TOTAL TOTAL AMOUNT AMOUNTS BY BORROWERS IN OWED BY COUNTRY THAT IS GUARANTEED OWED BORROWED BY OTHER COUNTRIES OF BORROWERS BY RESIDENTS OF LESS AMOUNTS FOREIGN OFFICES GUARANTEED BY RESIDENCE OTHER COUNTRIES GUARANTEED OF REPORTED NON-BANKS IN BORROWINGS BORROWINGS COUNTRY'S BANKS REPORTED COUNTRY OF BANKS OF NONBANKS NON-OIL EXP DEV COUNTRIES-ASIA SYRIA THAILAND OTHER TOTALS PAGE 3 TOTAL AMOUNTS OW U.S. BANKS AFTER ADJUSTMENTS FOR GUARANTEES AND EXTERNAL BORROW' 12.5 1228.4 751.6 16359.6 .0 32.2 43.1 736.5 .0 55.5 178.0 767.5 12.5 1140.7 530.5 14855.6 .0 138.1 5.0 1116.3 1.0 7.5 2.0 831.0 13.5 1286.3 537.5 16802.9 176.2 744.0 7.0 314.0 810 39.2 688.0 58.5 65.9 216.9 22.7 82.7 562.7 3058.8 .0 119.0 .0 1.0 .0 .0 62.0 .0 .0 2.5 .0 .0 1.0 185.5 89.0 122.1 5.0 6.5 5.4 1.0 3.0 .0 3.8 63.0 12.5 26.2 218.0 555.5 87.2 502.9 2.0 306.5 75.6 38.2 623.0 58.5 62.1 151.4 10.2 56.5 343.7 2317.8 .0 17.0 .0 .0 .0 3.0 7.0 .0 1.0 .0 .0 .0 2.0 30.0 5.0 4.0 1.0 .0 .0 .0 5.0 .2 .0 .0 .0 .0 5.0 20.2 92.2 523.9 3.0 306.5 75.6 41.2 635.0 58.7 63.1 151.4 10.2 56.5 350.7 2368.0 1501.7 946.6 483.4 2104.7 4113.3 70.5 1169.7 154.0 752.6 1764.2 3466.5 16527.2 915.6 507.2 .0 1849.4 1568.7 .8 1.0 100.1 107.0 200.1 2116.0 7365.9 257.5 74.6 296.0 91.0 864.5 22.0 1106.4 .7 467.8 908.5 317.3 4406.3 328.6 364.8 187.4 164.3 1680.1 47.7 62.3 53.2 177.8 655.6 1033.2 4755.0 7.0 85.4 1.0 .0 43.6 20.0 .0 .0 5.0 17.0 43.1 222.1 42.9 2.0 39.0 3.0 425.1 5.3 .0 5.8 20.7 25.9 204.4 774.1 378.5 452.2 227.4 167.3 2148.8 73.0 62.3 59.0 203.5 698.5 1280.7 5751.2 INTERNATIONAL 8 REGIONAL ORGANIZATIONS AFRICAN REGIONAL .7 ASIAN REGIONAL 1.0 E. EUROPEAN REGIONAL .0 INTERNATIONAL 293.0 LATIN AMERICAN REGIONAL 4.0 MIDDLE EASTERN REGIONAL 99.0 W W. EUROPEAN REGIONAL ..4 170.8 TOTALS 568.5 Grand Totals 187132.3 .0 .0 .0 2.0 .0 .0 .0 2.0 .0 .0 .0 10.0 1.0 .0 .0 11.0 20193.7 15052.9 .7 1.0 .0 281.0 3.0 99.0 170.8 555.5 151885.7 .0 .0 .0 4.0 10.0 .0 2.0 16.0 23553.8 .0 1.0 .0 .0 1.0 .0 10.0 12.0 12101.0 .7 2.0 .0 285.0 14.0 99.0 182.8 583.5 187540.5 40N-OIL EXP DEV COUNTRIES-AFRICA CAMEROON EGYPT GHANA IVORY COAST KENYA I MALAWI MOROCO SENEGAL SUDAN TUNISIA ZAIRE ZAMBIA OTHER TOTALS OFFSHORE BANKING CENTERS BAHAMAS BAHRAIN BERMUDA BRITISH WEST INDIES HONG KONG LEBANON LIBERIA MACAO NETHERLANDS ANTILLES PANAMA I SINGAPORE TOTALS https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis .11 TABLE II AMOUNTS OWED TO U.S. BANKS BY FOREIGN BORROWERS: SEPTEMBER 1985 (DATA BY TYPE OF BORROWER AND MATURITY DISTRIBUTION) (AMOUNTS IN MILLIONS OF DOLLARS) 9 MONEY CENTER BANKS COUNTRY 0-10 AND SWITZERLAND BELGIUM-LUXEMBOURG CANADA FRANCE GERMANY, FEDERAL REPUBLIC OF ITALY JAPAN NETHERLANDS SWEDEN SWITZERLAND UNITED KINGDOM TOTALS NON 0-10 DEVELOPED COUNTRIES AUSTRALIA AUSTRIA DENMARK FINLAND GREECE ICELAND IRELAND, REPUBLIC OF NEW ZEALAND NORWAY PORTUGAL SOUTH AFRICA SPAIN TURKEY OTHER TOTALS EASTERN EUROPE ALBANIA BULGARIA CZECHOSLOVAKIA GERMAN DEMOCRATIC REPUBLIC HUNGARY POLAND ROMANIA U.S.S.R. YUGOSLAVIA TOTALS OPEC MEMBERS ALGERIA w ECUADOR 00 GABON https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis TOTAL AMOUNT OWED (BY RESIDENCE PORTION OF TOTAL OWED BY OF BORROWER) BANKS PUBLIC ATE BORROWERS PRIV NONBANK BORROWERS PAGE 1 MATURITY OF DISTRIBUTION OF AMOUNTS OWED ONE YEAR OVER ONE OVER 5 AND UNDER TO 5 YEARS YEAR S 5078.8 3825.1 6344.6 2000.3 7147.4 4779.0 3861.0 1070.4 4323.4 2213.2 10574.0 5192.8 1656.8 467.8 1363.3 555.7 2204.6 688. 21341.1 . 12190.03 63895.0 32982.6 482.5 212.8 1270.3 707.0 1404.3 142.8 96.7 216.7 139.3 662.6 5335.0 771.2 4131.5 1098.1 2083.6 705.9 5238.4 1092.3 590.9 1377.0 8488.5 25577.4 4451.5 3242.8 5540.3 2418.5 2591.6 8218.2 1243.4 908.0 1774.5 17249.2 47638.0 365.3 1220.7 903.2 1110.1 1119.6 1921.1 200.6 309.5 252.3 2374.8 9777.2 262.0 1881.1 703.9 332.4 612.2 434.7 212.8 145.8 177.8 1717.1 6479.8 3852.6 989.8 1901.9 1223.6 2363.7 214.5 847.7 642.3 2762.7 952.8 2413.8 2938.9 1578.9 190.3 22873.5 250.9 580.4 314.4 328.7 123.0 42.7 195.9 19.3 453.8 332.8 1444.9 1201.7 371.6 12.0 5672.1 323.5 323.8 180.1 326.1 676.3 93.4 458.0 145.5 136.4 565.1 85.0 774.2 1022.3 21.0 5130.7 3278.2 85.6 1407.4 568.8 1564.4 78.4 193.8 477.5 2172.5 54.9 883.9 963.0 185.0 157.3 12070.7 1533.6 753.3 1082.8 695.3 806.9 93.7 411.2 187.3 1125.8 469.0 1964.2 1476.4 866.4 90.9 11556.8 1176.0 152.0 575.2 411.8 1028.6 69.1 197.4 214.8 906.7 393.0 418.7 1001.3 609.5 86.1 7240.2 1143.0 84.5 243.9 116.5 528.2 51.7 239.1 240.2 730.2 90.8 30.9 461.2 103.0 13.3 4076.5 .0 96.0 84.4 287.7 465.3 442.8 177.0 143.2 1533.6 3230.0 .0 9.0 59.4 231.7 49.0 101.0 3.0 17.2 810.1 1280.4 .0 87.0 22.0 48.0 416.3 341.8 174.0 126.0 580.5 1795.6 .0 .0 3.0 8.0 .0 .0 .0 .0 143.0 154.0 .0 76.0 60.3 238.0 217.9 127.0 93.0 54.5 641.9 1508.6 .0 20.0 24.1 48.7 187.4 223.1 80.0 75.3 692.1 1350.7 .0 .0 .0 1.0 60.0 92.7 4.0 13.4 199.6 370.7 685.7 1406.3 52.7 296.7 116.7 .0 339.0 1174.3 40.5 50.0 115.3 12.2 227.5 758.4 25.2 233.8 384.5 20.6 224.4 263.4 6.9 TABLE II AMOUNTS OWED TO U.S. BANKS BY FOREIGN BORROWER S: (DATA BY TYPE OF BORROWER AND MATURITY DISTRIBU SEPTEMBER 1985 TION) (AMOUNTS IN MILLIONS OF DOLLARS) 9 MONEY CENTER BANKS COUNTRY OPEC MEMBERS INDONESIA IRAN IRAQ KUWAIT LIBYA NIGERIA QATAR SAUDI ARABIA UNITED ARAB EMIRATES VENEZUELA TOTALS TOTAL AMOUNT OWED (BY RESIDENCE PORTION OF TOTAL OWED BY OF BORROWER) BANKS PUBLIC PRIVATE BORROWERS NONBANK BORROWERS 2460.7 94.8 .0 .0 537.2 426.0 665.1 444.2 36.0 10.0 1118.9 273.2 12.7 .0 1571.6 330.4 496.3 236.7 7250.3 1328.4 16293.5 • 3557.1 hNON-OIL EXP DEV COUNTRIES-LATIN AM 8 CARIBBEAN ARGENTINA 5679.4 BOLIVIA 80.0 BRAZIL 15512.0 CHILE 3783.3 COLOMBIA 1911.6 COSTA RICA 225.7 DOMINICAN REPUBLIC 349.6 EL SALVADOR 46.5 GUATEMALA 51.9 HONDURAS 74.9 JAMAICA 216.3 MEXICO 14185.4 NICARAGUA 84.1 PARAGUAY 163.8 PERU 1087.0 TRINIDAD AND TOBAGO 119.0 URUGUAY 713.8 OTHER 41.9 TOTALS 44326.2 NNON-OIL EXP DEV COUNTRIES-ASIA CHINA,MAINLAND CHINA,TAIWAN INDIA ISRAEL JORDAN KOREA, SOUTH MALAYSIA PAKISTAN PHILIPPINES SYRIA THAILAND CA, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 342.0 1236.0 704.1 1059.0 185.2 5753.0 1103.4 172.2 3812.2 12.5 1228.4 PAGE 2 MATURITY OF DISTRIBUTION OF AMOUNTS OWED ONE YEAR OVER ONE OVER 5 AND UNDER TO 5 YEARS YEARS 682.1 .0 110.2 29.0 15.0 736.7 .0 25.0 150.9 4058.3 7361.0 1683.8 .0 1.0 191.9 11.0 109.0 12.7 1216.2 108.7 1863.6 5375.4 1378.3 .0 293.4 617.4 36.0 749.3 9.7 1107.4 399.1 5989.6 11591.3 685.7 .0 242.8 47.7 .0 308.3 3.0 264.6 83.8 962.2 3237.0 396.7 .0 1.0 .0 .0 61.3 .0 199.6 13.4 298.5 1465.2 831.5 4.0 3928.7 1298.1 630.4 2.0 17.4 17.3 .0 .0 .3 2243.0 11.4 1.0 160.9 .0 19.1 8.5 9173.6 3257.9 68.5 8873.2 1844.7 813.1 204.8 298.6 23.0 23.6 39.3 213.6 8116.1 72.7 113.1 761.1 112.0 639.7 29.3 25504.3 1590.0 7.5 2710.1 640.5 468.1 18.9 33.6 6.2 28.3 35.6 2.4 3826.3 .0 49.7 165.0 7.0 55.0 4.1 9648.3 3617.0 77.0 5615.1 1413.1 1016.4 60.9 202.3 23.6 27.0 53.9 75.3 4565.2 63.1 70.2 701.6 65.0 231.3 28.0 17906.0 1573.4 3.0 5943.6 1756.9 535.1 140.9 142.3 21.9 21.2 20.0 103.8 6006.1 6.0 83.6 301.7 37.0 464.5 6.9 17167.9 489.0 .0 3953.3 613.3 360.1 23.9 5.0 1.0 3.7 1.0 37.2 3614.1 15.0 10.0 83.7 17.0 18.0 7.0 9252.3 162.0 385.5 115.9 795.0 59.0 2086.0 107.1 14.1 457.9 11.5 515.1 113.0 456.5 267.9 129.0 98.2 1353.8 529.8 100.5 2384.4 .0 148.4 67.0 394.0 320.3 135.0 28.0 2313.2 466.5 57.6 969.9 1.0 564.9 286.0 722.4 304.3 817.2 119.0 3619.8 256.6 94.3 1635.0 12.5 939.7 29.0 372.7 234.5 209.8 47.6 1299.5 579.0 77.9 1690.0 .0 216.8 27.0 140.9 165.3 32.0 18.6 833.7 267.8 .0 487.2 .0 71.9 TABLE II AMOUNTS OWED TO U.S. BANKS BY FOREIGN BORROWERS: SEPTEMBER 1985 (DATA BY TYPE OF BORROWER AND MATURITY DIST RIBUTION) (AMOUNTS IN MILLIONS OF DOLLARS) 9 MONEY CENTER BANKS COUNTRY TOTAL AMOUNT OWED (BY RESIDENCE PORTION OF TOTAL OWED BY OF BORROWER) BANKS PUBLIC PRIVATE BORROWERS NONBANK BORROWERS NON-OIL EXP DEV COUNTRIES-ASIA OTHER TOTALS PAGE 3 MATURITY OF DISTRIBUTION OF AMOUNTS OHED ONE YEAR OVER ONE OVER 5 AND UNDER TO 5 YEARS YEARS 751.6 16359.6 135.1 4844.2 282.6 5864.1 333.9 5651.3 225.3 9032.1 412.2 5169.0 114.1 2158.5 176.2 744.0 7.0 314.0 81.0 39.2 688.0 58.5 65)9 216.9 22.7 82.7 562.7 3058.8 16.0 422.0 1.0 15.0 2.0 13.8 328.9 2.0 15.0 63.7 .0 3.0 112.4 994.8 72.0 101.3 4.0 254.3 23.3 21.4 327.2 29.3 49.9 141.2 22.7 75.0 298.5 1420.1 88.2 220.7 2.0 44.7 55.7 4.0 31.9 27.2 1.0 12.0 .0 4.7 151.8 643.9 49.1 568.8 5.0 112.1 61.7 29.8 554.7 37.8 50.3 134.7 17.5 44.0 361.8 2027.3 115.1 119.7 2.0 115.8 18.3 9.4 123.9 18.1 4.0 62.0 5.2 14.7 143.4 751.6 12.0 55.5 .0 86.1 1.0 .0 9.4 2.6 11.6 20.2 .0 24.0 57.5 279.9 1501.7 946.6 483.4 2104.7 4113.3 70.5 1169.7 154.0 752.6 1764.2 3466.5 16527.2 1179.6 861.9 12.0 1972.4 2223.0 35.8 7.0 145.1 127.2 258.1 2591.0 9413.1 12.2 36.0 59.0 27.0 76.0 .0 39.6 7.0 12.3 252.9 102.3 624.3 309.9 48.7 412.4 105.3 1814.3 34.7 1123.1 1.9 613.1 1253.2 773.2 6489.8 INTERNATIONAL & REGIONAL ORGANIZATIONS AFRICAN REGIONAL .7 ASIAN REGIONAL 1.0 E. EUROPEAN REGIONAL .0 INTERNATIONAL 293.0 LATIN AMERICAN REGIONAL 4.0 MIDDLE EASTERN REGIONAL 99.0 W. EUROPEAN REGIONAL 170.8 TOTALS 568.5 Grand Totals 187132.3 1255.1 906.6 359.4 2013.3 3235.0 63.5 384.8 144.2 376.5 902.6 3082.3 12723.3 200.4 33.0 45.0 55.8 537.8 5.0 524.9 7.0 248.8 580.5 219.4 2457.6 46.2 7.0 79.0 35.6 340.5 2.0 260.0 2.8 127.3 281.1 164.8 1346.3 .0 .0 .0 .0 .0 .0 .0 .0 67917.9 .7 1.0 .0 293.0 4.0 99.0 170.8 568.5 53603.6 .0 .0 .0 .0 .0 .0 .0 .0 65610.8 .7 .0 .0 136.0 1.0 97.0 68.4 303.1 114286.5 .0 .0 .0 52.0 1.0 .0 23.4 76.4 47227.6 .0 1.0 .0 105.0 2.0 2.0 79.0 189.0 25618.2 NON-OIL EXP DEV COUNTRIES-AFRICA CAMEROON EGYPT GHANA IVORY COAST KENYA MALAWI MOROCO SENEGAL SUDAN TUNISIA ZAIRE ZAMBIA OTHER TOTALS OFFSHORE BANKING CENTERS BAHAMAS BAHRAIN BERMUDA BRITISH WEST INDIES HONG KONG LEBANON LIBERIA MACAO NETHERLANDS ANTILLES PANAMA SINGAPORE TOTALS https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis TABLE III CROSS BORDER AND NON-LOCAL CURRENCY CONTINGENT CLAIMS : SEPTEMBER 1985 (IN MILLIONS OF DOLLARS) 9 MONEY CENTER BANKS TOTAL (BY COUNTRY OR RESIDENCE) G-10 AND SWITZERLAND BELGIUM-LUXEMBOURG CANADA FRANCE GERMANY, FEDERAL REPUBLIC OF ITALY JAPAN NETHERLANDS SWEDEN SWITZERLAND UNITED KINGDOM TOTALS PORTION OF TOTAL CONSISTING OF LETTERS OF CREDIT OTHER COMM. COMMITMENTS GUARANTEED BY RESIDENTS OF OTHER COUNTRY COMMITMENTS TO RESIDENTS OF OTHER COUNTRIES GUARANTEED BY RESIDENTS OF REPORTED COUNTRIES 160.9 504.4 738.1 972.8 205.0 876.7 363.9 406.8 1864.0 2334.6 8427.2 1077.6 3640.1 4701.3 877.8 1960.3 2312.6 836.7 2232.0 1303.6 7625.7 26567.7 170.8 104.0 265.0 73.6 51.9 55.2 139.0 44.0 222.4 1791.0 2916.9 1378.4 216.6 892.3 211.0 233.3 727.9 206.6 159.8 386.0 2807.5 7219.4 2446.1 4257.1 6066.7 1988.0 2346.7 3862.0 1268.2 2754.6 3331.2 10976.8 39297.4 3893.3 589.8 2572.4 459.5 1017.2 303.8 477.8 30.1 580.9 496.5 1310.6 114.0 188.3 948.2 200.3 38.3 8737.9 226.0 6.0 35.2 33.7 37.5 .1 158.1 316.2 196.2 16.8 41.0 87.1 32.4 14.0 1200.3 95.5 8.0 87.0 5.7 41.2 .0 25.0 34.3 109.0 2.0 14.0 83.2 .0 2.0 506.9 3762.8 591.8 1212.6 460.8 670.7 34.1 556.8 649.5 1627.9 271.0 281.3 1188.4 418.6 46.4 11772.7 .0 .0 .0 16.0 8.1 81.2 59.6 23.6 27.1 9.0 26.7 251.3 390.0 60.1 32.1 923.9 .0 488.8 667.0 34.2 689.9 931.4 1715.1 285.8 308.3 1192.3 451.0 58.4 12466.1 1320.9 130.3 143.6 185.0 189.2 4.1 109.0 434.9 404.5 171.8 120.0 244.1 250.7 20.1 3728.2 EASTERN EUROPE ALBANIA BULGARIA CZECHOSLOVAKIA GERMAN DEMOCRATIC REPUBLIC HUNGARY POLAND ROMANIA U.S.S.R. YUGOSLAVIA TOTALS .0 16.0 8.1 85.2 59.6 24.6 27.1 9.0 31.7 261.3 .0 .0 .1 1.0 8.0 13.1 27.0 1.0 10.0 60.2 .0 16.0 8.0 84.2 51.6 11.5 .1 8.0 21.7 201.1 .0 4.0 .0 3.0 .0 .0 5.0 12.0 .0 .0 .0 .0 .0 2.0 .0 .0 .0 2.0 457.0 178.8 47.1 1032.7 1.3 141.7 107.8 13.8 383.3 1.3 315.3 71.0 33.3 649.4 .0 74.0 118.7 15.0 203.1 1.3 7.0 .0 .0 94.3 .0 •Pb https://fraser.stlouisfed.org 0 Federal Reserve Bank of St. Louis TOTAL COMM. AFTER AJUSTMENT FOR GUARANTEES 1238.5 4144.5 5439.4 1850.6 2165.3 3189.3 1200.6 2638.8 3167.6 9960.3 34994.9 NON 0-10 DEVELOPED COUNTRIES AUSTRALIA AUSTRIA DENMARK FINLAND GREECE ICELAND IRELAND, REPUBLIC OF NEW ZEALAND NORWAY PORTUGAL SOUTH AFRICA SPAIN TURKEY OTHER TOTALS OPEC MEMBERS ALGERIA ECUADOR GABON IN IRAN PAGE 1 TABLE III CROSS BORDER AND NON-LOCAL CURRENCY CONTINGENT CLAIMS: SEPTEMBER 1985 (IN MILLIONS OF DOLLARS) 9 MONEY CENTER BANKS TOTAL (BY COUNTRY OR RESIDENCE) OPEC MEMBERS IRAQ KUWAIT LIBYA NIGERIA QATAR SAUDI ARABIA UNITED ARAB EMIRATES VENEZUELA TOTALS 16.0 117.1 17.0 308.4 11.3 997.0 181.1 536.8 3901.6 NON-OIL EXP DEV COUNTRIES-LATIN AM & CARIBBEAN ARGENTINA 801. .7 BOLIVIA 2.1 BRAZIL 1007.5 CHILE 402.2 COLOMBIA 445.6 COSTA RICA 18.0 DOMINICAN REPUBLIC 15.7 EL SALVADOR 19.4 GUATEMALA 33.0 HONDURAS 3.0 JAMAICA 11.2 MEXICO 1140.3 NICARAGUA .0 PARAGUAY 53.2 PERU 209.6 TRINIDAD AND TOBAGO 48.0 URUGUAY 7.8 OTHER 17.6 TOTALS 4235.9 NON-OIL EXP DEV COUNTRIES-ASIA CHINA,MAINLAND 188.4 CHINA,TAIWAN 942.4 INDIA 557.4 ISRAEL 179.3 JORDAN 55.7 KOREA, SOUTH 1907.2 MALAYSIA 292.3 PAKISTAN 222.4 PHILIPPINES 520.7 SYRIA 21.3 THAILAND 347.0 OTHER 537.3 TOTALS 5771.4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis PORTION OF TOTAL CONSISTING OF LETTERS OF CREDIT OTHER COMM. COMMITMENTS GUARANTEED BY RESIDENTS OF OTHER COUNTRY COMMITMENTS TO RESIDENTS OF OTHER COUNTRIES GUARANTEED BY RESIDENTS OF REPORTED COUNTRIES PAGE 2 TOTAL COMM. AFTER AJUSTMENT FOR GUARANTEES 14.0 71.1 10.0 182.8 5.3 606.0 145.8 334.6 2017.5 2.0 46.0 7.0 125.6 6.0 391.0 35.3 202.2 1884.1 2.0 .8 .0 114.2 .9 226.3 16.0 111.6 883.9 1.0 13.3 .0 .0 .0 27.4 12.0 .0 155.0 15.0 129.6 17.0 194.2 10.4 798.1 177.1 425.2 3172.7 156.1 1.0 170.7 133.7 70.0 6.0 12.7 3.4 4.0 3.0 10.2 537.0 .0 34.7 61.6 4.0 2.0 12.3 1222.4 645.6 1.1 836.8 268.5 375.6 12.0 3.0 16.0 29.0 .0 1.0 603.3 .0 18.5 148.0 44.0 5.8 5.3 3013.5 28.3 1.1 374.1 33.0 214.0 4.0 .8.7 .0 22.0 .1 4.0 412.9 .0 5.5 127.2 .0 4.9 5.4 1245.2 6.6 .0 28.5 4.0 .0 .0 .0 .0 .0 .0 .0 15.0 .0 .0 1.0 .0 .0 .0 55.1 780.0 1.0 661.9 373.2 231.6 14.0 7.0 19.4 11.0 2.9 7.2 742.4 .0 47.7 83.4 48.0 2.9 12.2 3045.8 62.4 596.6 381.2 78.7 27.8 1135.4 171.7 106.4 243.1 20.3 105.1 148.8 3077.5 126.0 345.8 176.2 100.6 27.9 771.8 120.6 116.0 277.6 1.0 241.9 388.5 2693.9 .0 110.7 26.0 36.0 7.0 199.0 13.7 2.1 63.4 1.0 10.0 145.9 614.8 59.0 62.2 18.1 21.0 2.2 275.0 2.0 15.0 2.0 .0 11.1 5.0 472.6 247.4 893.9 549.5 164.3 50.9 1983.2 280.6 235.3 459.3 20.3 348.1 396.4 5629.2 TABLE III CROSS BORDER AND NON-LOCAL CURRENCY CONTINGENT CLAIMS: SEPTEMBER 1985 (IN MILLIONS OF DOLLARS) 9 MONEY CENTER BANKS TOTAL (BY COUNTRY OR RESIDENCE) PORTION OF TOTAL CONSISTING OF LETTERS OF CREDIT OTHER COMM. COMMITMENTS GUARANTEED BY RESIDENTS OF OTHER COUNTRY COMMITMENTS TO RESIDENTS OF OTHER COUNTRIES GUARANTEED BY RESIDENTS OF REPORTED COUNTRIES PAGE 3 TOTAL COMM. AFTER AJUSTMENT FOR GUARANTEES NON-OIL EXP DEV COUNTRIES-AFRICA CAMEROON EGYPT GHANA IVORY COAST KENYA MALAWI MOROCO SENEGAL SUDAN TUNISIA ZAIRE ZAMBIA OTHER TOTALS 48.2 510.4 24.0 47.4 73.5 1.7 31.9 17.6 1.5 155.1 4.7 56.8 246.8 1219.6 5.2 315.3 15.0 19.4 16.3 .4 2.1 16.6 1.1 4.5 4.7 33.6 163.8 598.0 43.0 195.1 9.0 28.0 57.2 1.3 29.8 1.0 .4 150.6 .0 23.2 83.0 621.6 38.0 87.8 16.0 11.0 6.1 1.3 17.4 .0 1.5 87.5 .0 17.1 76.1 359.8 3.0 20.1 10.2 431.7 12.0 36.4 67.4 .4 14.5 17.6 4.0 67.6 4.7 39.7 173.7 879.9 OFFSHORE BANKING CENTERS BAHAMAS BAHRAIN BERMUDA BRITISH WEST INDIES HONG KONG LEBANON LIBERIA MACAO NETHERLANDS ANTILLES PANAMA SINGAPORE TOTALS 149.2 106.2 2253.1 198.3 2068.4 116.3 317.4 1.5 514.5 456.2 749.1 6930.2 82.9 72.2 1774.1 146.3 1334.8 85.0 59.4 1.0 196.0 282.2 382.0 4415.9 66.3 34.0 479.0 52.0 733.6 31.3 258.0 .5 318.5 174.0 367.1 2514.3 50.0 10.0 1474.0 151.3 910.3 32.1 291.7 .2 394.8 348.6 124.1 3787.1 222.8 15.4 11.0 85.0 253.1 4.3 2.0 .0 5.4 24.2 312.0 935.2 322.0 111.6 790.1 132.0 1411.2 88.5 27.7 1.3 125.1 131.8 937.0 4078.3 12.0 .o .o .o .o .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 257.0 2.0 .0 259.0 12.0 .0 .0 333.0 3.0 22.0 85.8 455.8 11020.0 9625.3 68583.1 INTERNATIONAL 8 REGIONAL ORGANIZATIONS AFRICAN REGIONAL ASIAN REGIONAL E. EUROPEAN REGIONAL INTERNATIONAL LATIN AMERICAN REGIONAL MIDDLE EASTERN REGIONAL W. EUROPEAN REGIONAL TOTALS GRAND *m** mx TOTALS ** 76.0 1.0 22.0 85.8 196.8 1,0 22.0 10.8 33.8 12.0 .0 .0 76.0 .0 .0 75.0 163.0 69977.8 23580.7 46397.1 .o .o .0 9.1 4.0 .0 .0 .0 .o .o 4.0 .0 .0 •0 NMI https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis COUNTRY EXPOSURE LENDING TABLE I AMOUNTS OWED TO U.S. SURVEY: SEPTEMBER 1985 BANKS BY FOREIGN BORROWERS (INCLUDES ADJUSTMENTS TO REFLEC T GUARANTEES AND INDIRECT BOR ROWINGS) (AMOUNTS IN MILLIONS OF DOL LARS) 15 OTHER LARGE BANKS TOTAL AMOUNT AMOUNTS OWED PORTION OF TOTAL AMOUNT AMOUNTS OWED BY COUNTRY THAT IS GUATOTAL BY BORROWERS IN RANTEED OWED BORROWED BY OF BORROWERS OTH BY RESIDENTS OF ER COUNTRIES LESS AMOUNTS FOREIGN OFFICES RESIDENCE . GUA OTHER COUNTRIES RAN TEE D BY GUARANTEED OF REPORTED NON-BANKS IN BORROWINGS BORROWINGS COUNTRY'S BANKS REPORTED COU OF BANKS OF NONBANKS NTRY 0-10 AND SWITZERLAND BELGIUM-LUXEMBOURG CANADA FRANCE GERMANY, FEDERAL REPUBLIC OF ITALY JAPAN NETHERLANDS SWEDEN SWITZERLAND UNITED KINGDOM TOTALS 1544.9 2353.4 2184.3 358.2 1401.1 2817.1 427.5 608.4 541.6 8385.9 20622.8 626.8 174.7 456.4 38.1 38.5 53.3 28.8 .0 12.8 5031.7 6461.2 NON 0-10 DEVELOPED COUNTRIES AUSTRALIA AUSTRIA DENMARK FINLAND GREECE ICELAND IRELAND, REPUBLIC OF NEW ZEALAND NORWAY PORTUGAL SOUTH AFRICA SPAIN TURKEY OTHER TOTALS 1289.0 307.8 304.5 280.9 261.4 24.8 214.4 251.9 371.3 241.9 738.8 706.8 448.9 12.5 5455.6 23.5 5.0 .0 2.0 6.2 1.0 18.1 2.3 .0 22.2 111.6 40.0 2.0 .0 234.0 9.5 10.0 41.2 146.4 87.1 13.9 11.2 426.4 745.9 .0 .0 .0 2.0 .0 .0 .0 13.0 15.0 238.4 297.3 5.6 .0 3.7 .0 EASTERN EUROPE BULGARIA CZECHOSLOVAKIA GERMAN DEMOCRATIC REPUBL IC HUNGARY POLAND ROMANIA U.S.S.R. YUGOSLAVIA TOTALS OPEC MEMBERS ALGERIA ECUADOR GABON -1:=b 4:b https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 8.0 162.3 11.3 34.9 .1 68.9 103.9 9.7 1.4 285.4 686.1 PAGE 1 TOTAL AMOUNTS OWED U.S. BANKS AFTER ADJUSTMENTS FOR GUARANTEES AND EXTERNAL BORROWING 910.0 2016.4 1716.6 285.1 1362.5 2694.9 294.7 598.7 527.4 3068.6 13475.4 328.6 1169.0 1996.8 853.2 1246.3 9197.2 376.5 34.0 310.0 901.1 16413.0 30.8 .0 .0 .0 .3 .0 .0 7.2 2.0 .0 12.4 3.0 66.2 .1 122.0 1234.7 302.8 304.5 278.9 254.9 23.8 196.2 242.3 369.3 219.7 614.8 663.8 380.7 12.4 5099.5 467.9 95.4 160.4 41.2 8.4 2.0 182.6 49.7 41.0 92.6 43.0 169.5 1.5 .0 1355.4 208.0 34.6 4.5 .0 41.1 .0 .0 14.2 9.9 13.0 25.4 .0 .0 .0 350.9 1910.7 432.8 469.5 320.2 304.4 25.8 378.9 306.2 420.3 325.3 683.3 833.3 382.2 12.4 6805.9 .0 .0 .0 3.0 5.0 .0 8.2 5.9 22.1 9.5 10.0 41.2 141.4 82.1 13.9 3.0 407.4 708.7 .0 .0 10.0 .0 .0 .0 9.0 .0 19.0 .0 .0 10.0 .0 .0 2.9 .0 12.0 24.9 9.5 10.0 61.2 141.4 82.1 16.8 12.0 419.4 752.6 .2 238.2 293.4 5.3 3.6 .0 .0 .2 .3 33.9 114.8 56.6 117.7 58.9 169.9 34.7 24.2 117.2 271.1 999.3 .0 .0 .0 1272.6 3300.4 3770.0 1256.1 2667.7 12062.0 706.0 657.0 954.7 4240.9 30887.8 241.8 293.4 5.3 •1 COUNTRY EXPOSURE LENDING SURV SEPTEMBER 1985 TABLE I AMOUNTS OWED TO U.S. BANKEY: S BY FOREIGN BORROWERS (INCLUDES ADJUSTMENTS TO REFLECT GUAR ANTEES AND INDIRECT BORROWINGS) (AMOUNTS IN MILLIONS OF DOLLARS) 15 OTHER LARGE BANKS AMOUNTS OWED TOTAL AMOUNT PORTION OF TOTAL TOTAL AMOUNT AMOUNTS BY BORROWERS IN OWED BY COUNTRY THAT IS GUARANTEED OWED BORROWED BY OF BORROWERS OTHER COUN BY RESIDENTS OF LESS AMOUNTS FOREIGN OFFICES GUARANTE TRIES RESIDENCE ED BY OTHER COUNTRIES GUARANTEED REPO OF RTED NON -BAN KS IN - BORROWINGS BORROWINGS COUN TRY' S BANK S REPO RTED COUN TRY OF BANKS OF NONBANKS OPEC MEMBERS INDONESIA IRAN IRAQ KUWAIT LIBYA NIGERIA QATAR SAUDI ARABIA UNITED ARAB EMIRATES VENEZUELA TOTALS 377.2 2.0 78.3 97.7 .0 187.8 .0 94.6 82.2 1722.6 3184.3 5.2 .0 3.1 .0 .0 4.9 .0 .0 15.8 2.0 34.7 NON-OIL EXP DEV COUNTRIES-LATIN AM & CARIBBEAN ARGENTINA 1592.0 '1.0 BOLIVIA 37.0 1.9 BRAZIL 4108.9 79.7 CHILE 1091.4 35.4 COLOMBIA 364. 2 3.0 COSTA RICA 124. 4 1.0 DOMINICAN REPUBLIC 64.0 12.2 EL SALVADOR 6.8 1.6 GUATEMALA 13.8 .0 HONDURAS 30.4 1.6 JAMAICA 18.1 .1 MEXICO 4832.6 61.5 NICARAGUA 40.5 .0 PARAGUAY 3.7 .0 PERU 442.1 1.8 TRINIDAD AND TOBAGO 22.1 .0 URUGUAY 123.3 1.4 OTHER 24.7 5.4 TOTALS 12940.5 207.7 ON-OIL EXP DEV COUNTRIES-ASIA CHINA,MAINLAND 96.6 .0 CHINA,TAIWAN 505. 8 37.0 INDIA 151.1 .0 ISRAEL 269. 4 64.5 JORDAN 9.5 .1 KOREA, SOUTH 2697.5 336.6 MALAYSIA 265.6 1.5 PAKISTAN 1.7 1.1 PHILIPPINES 1188.6 14.5 SYRIA 3.0 .0 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis PAGE 2 TOTAL AMOUNTS OWED U.S. BANKS AFTER ADJUSTMENTS FOR GUARANTEES AND EXTERNAL BORROWING 77.5 2.0 1.5 2.0 .0 35.0 .0 11.1 7.4 98.1 235.4 294.4 .0 73.7 95.7 .0 147.9 .0 83.5 59.0 1622.4 2914.1 36.8 .0 .2 100.0 .0 .0 5.0 35.8 43.3 44.0 268.7 38.5 .0 .0 .0 .0 .0 .0 1.0 .0 .0 39.5 369.7 .0 73.9 195.7 .0 147.9 5.0 120.3 102.3 1666.4 3222.3 82.6 .5 168.4 56.7 22.5 8.4 .3 4.0 5.5 11.0 11.0 308.6 .0 .6 69.6 19.6 5.6 9.1 784.1 1508.4 34.6 3860.7 999.3 338.7 115.0 51.5 1.2 8.3 17.8 7.0 4462.4 40.5 3.1 370.7 2.5 116.3 10.2 11948.6 99.5 .0 529.9 1.0 34.1 .0 .0 .0 .0 .0 .0 386.1 .0 .0 .0 .0 .0 .0 1050.7 17.0 .0 127.3 6.0 2.0 2.0 .0 .0 .0 .0 .0 75.3 .0 .0 .0 .2 .0 .0 229.8 1624.9 34.6 4518.0 1006.3 374.8 117.0 51.5 1.2 8.3 17.8 7.0 4923.9 40.5 3.1 370.7 2.7 116.3 10.2 13229.2 96.6 457.7 150.4 185.3 8.3 2326.2 264.1 .6 1114.3 1.0 167.8 50.1 94.7 16.4 35.1 277.4 57.8 2.0 14.9 .0 2.5 19.2 74.1 3.0 .0 144.7 5.0 .0 36.0 .0 267.0 527.0 319.3 204.7 43.4 2748.4 326.9 2.6 1165.2 1.0 .o 11.1 .7 19.6 1.1 34.6 .o .o 59.7 2.0 COUNTRY EXPOSURE LENDING SURVEYS SEPTEMBER 1985 TABLE I AMOUNTS OWED TO U.S. BANKS BY FOREIGN BORROWERS (INCLUDES ADJUSTMENTS TO REFLECT GUARANTEES AND INDIRECT BORROWINGS) (AMOUNTS IN MILLIONS OF DOLLARS) 15 OTHER LARGE BANKS AMOUNTS OWED TOTAL AMOUNT PORTION OF TOTAL TOTAL AMOUNT AMOUNTS BY BORROWERS IN OWED BY COUNTRY THAT IS GUARANTEED OWED BORROWED BY OTHER COUNTRIES OF BORROWERS BY RESIDENTS OF LESS AMOUNTS FOREIGN OFFICES GUARANTEED BY RESIDENCE OTHER COUNTRIES GUARANTEED OF REPORTED NON-BANKS IN BORROWINGS BORROWINGS COUNTRY'S BANKS REPORTED COUNTRY OF BANKS OF NONBANKS NON-OIL EXP DEV COUNTRIES-ASIA THAILAND OTHER TOTALS PAGE 3 TOTAL AMOUNTS OWED U.S. BANKS AFTER ADJUSTMENTS FOR GUARANTEES AND EXTERNAL BORROWING 514.5 76.2 5779.8 11.3 19.3 486.0 8.6 4.5 142.0 494.6 52.4 5151.7 105.6 1.0 823.0 2.2 2.0 288.8 602.4 55.4 6263.6 24.8 189.6 2.0 43.6 .4 4.2 94.6 2.4 .7 6.6 2.0 3.9 71.8 (.46.8 .0 50.1 .0 .0 .0 .0 13.5 .0 .4 1.0 .0 .0 5.1 70.1 1.3 10.7 2.0 .0 .0 .0 .2 .0 .3 .0 2.0 .0 18.3 34.8 23.5 128.8 .0 43.6 .4 4.2 80.9 2.4 .0 5.6 .0 3.9 48.4 341.9 .0 20.4 .0 .0 .0 .0 3.0 .0 .0 .0 .0 .0 .0 23.4 .0 .6 .0 .0 .0 .0 4.0 .0 .0 .0 .0 .0 .0 4.6 23.5 149.8 .0 43.6 .4 4.2 87.9 2.4 .0 5.6 .0 3.9 48.4 369.9 993.3 415.4 48.3 1987.2 1707.6 7.4 227.2 84.3 99.4 783.1 1472.4 7826.0 813.0 221.6 .0 1946.0 1092.3 .0 .0 50.6 26.3 548.2 1272.0 5970.2 32.5 5.0 .0 17.7 88.6 2.4 198.1 .8 44.5 68.4 29.4 487.6 147.7 188.7 48.3 23.5 526.6 5.0 29.0 32.9 28.6 166.5 170.9 1368.0 6.0 69.4 .0 .0 61.0 1.9 .0 .0 .0 7.0 17.4 162.7 3.0 14.1 9.0 2.0 102.3 .0 .0 .0 12.7 23.7 t. 11.6 178.4 156.8 272.3 57.4 25.5 689.9 6.9 29.0 32.9 41.3 197.2 199.9 1709.3 INTERNATIONAL & REGIONAL ORGANIZATIONS INTERNATIONAL 112.0 LATIN AMERICAN REGIONAL 4.0 W. EUROPEAN REGIONAL 166.0 TOTALS 282.0 .o .o .o .o .o .o .o .o 112.0 4.0 166.0 282.0 .o .o .o .o 10.0 10.0 30.0 50.0 122.0 14.0 196.0 332.0 13479.2 2514.4 41290.3 20116.1 2166.4 63572.8 NON-OIL EXP DEV COUNTRIES-AFRICA CAMEROON EGYPT GHANA IVORY COAST KENYA MALAWI MOROCO SENEGAL SUDAN TUNISIA ZAIRE ZAMBIA OTHER TOTALS OFFSHORE BANKING CENTERS BAHAMAS BAHRAIN BERMUDA BRITISH WEST INDIES HONG KONG LEBANON LIBERIA MACAO NETHERLANDS ANTILLES PANAMA SINGAPORE TOTALS GRAND )000( )0( TOTALS )0( MN** https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 57284.0 , TABLE II AMOUNTS OWED TO U.S. BANKS BY FOREIGN BORROWERS: SEPTEMBER 1985 (DATA BY TYPE OF BORROWER AND MATURITY DISTRIBUTION) (AMOUNTS IN MILLIONS OF DOLLARS) 15 OTHER LARGE BANKS COUNTRY TOTAL AMOUNT OWED (BY RESIDENCE PORTION OF TOTAL OWED BY OF BORROWER) BANKS PUBLIC PRIVATE BORROWERS NONBANK BORROWERS 60-10 AND SWITZERLAND BELGIUM-LUXEMBOURG CANADA FRANCE GERMANY, FEDERAL REPUBLIC OF ITALY JAPAN NETHERLANDS SWEDEN SWITZERLAND UNITED KINGDOM TOTALS PAGE 1 MATURITY OF DISTRIBUTION OF AMOUNTS OWED ONE YEAR OVER ONE OVER 5 AND UNDER TO 5 YEARS YEARS 1544.9 2353.4 2184.3 358.2 1401.1 2817.1 427.5 608.4 541.6 8385.9 20622.8 1507.1 1505.3 1870.9 191.7 846.4 2119.3 135.0 468.8 444.7 6893.3 15982.9 16.3 6/.2 230.3 18.9 360.6 32.4 119.0 72.6 5.5 413.9 1337.2 21.4 780.7 83.1 147.5 194.0 665.3 173.4 67.0 91.3 1078.5 3302.6 1517.3 2060.1 1856.8 274.9 929.2 2478.9 242.3 499.4 403.2 7455.8 17718.3 23.2 123.7 175.3 56.8 301.8 310.0 50.4 44.1 2.8 746.9 1835.2 4.3 169.5 152.2 26.5 170.0 28.2 134.7 64.9 135.6 183.1 1069.2 NNON 0-10 DEVELOPED COUNTRIES AUSTRALIA AUSTRIA DENMARK FINLAND GREECE ICELAND IRELAND, REPUBLIC OF NEW ZEALAND NORWAY PORTUGAL SOUTH AFRICA SPAIN TURKEY OTHER TOTALS /289.0 307.8 304.5 280.9 261.4 24.8 214.4 251.9 371.3 241.9 738.8 706.8 448.9 12.5 5455.6 210.2 285.2 263.3 254.6 30.3 24.8 52.7 25.8 261.4 132.9 636.0 340.3 144.3 5.3 2667.6 127.8 18.6 25.0 16.1 112.4 .0 113.6 11.7 8.9 85.7 53.6 114.5 275.2 6.6 970.0 950.9 4.0 16.2 10.2 118.7 .0 48.0 214.3 101.0 23.2 49.1 251.9 29.3 .6 1817.9 623.7 288.1 276.4 253.6 98.1 18.5 68.9 141.5 285.0 170.3 616.2 437.5 243.0 6.0 3527.2 340.7 17.7 12.1 12.2 124.3 5.3 89.0 26.9 28.2 53.2 100.8 135.3 178.4 6.4 1130.8 324.6 2.0 16.0 15.1 39.0 1.0 56.4 83.4 58.0 18.4 21.8 134.0 27.5 .1 797.4 EASTERN EUROPE BULGARIA CZECHOSLOVAKIA GERMAN DEMOCRATIC REPUBLIC N HUNGARY POLAND ROMANIA U.S.S.R. YUGOSLAVIA TOTALS 9.5 10.0 41.2 146.4 87.1 13.9 11.2 426.4 745.9 5.1 10.0 32.3 37.5 40.4 3.2 3.0 255.7 387.3 .0 .0 .0 108.9 42.7 10.7 .0 148.0 310.4 4.4 .0 8.9 .0 4.0 .0 8.2 22.5 48.1 9.5 1.0 23.2 87.0 13.2 4.4 6.7 188.3 333.5 .0 9.0 17.6 35.4 55.7 ,8.0 4.5 200.7 331.0 .0 .0 .3 24.0 18.1 1.5 .0 37.3 81.3 238.4 297.3 5.6 377.2 112.3 13.4 .0 149.8 52.9 265.3 5.3 92.7 73.1 18.5 .3 134.7 66.6 130.7 4.6 243.5 69.7 134.8 1.0 84.4 102.1 31.8 .0 49.2 OPEC MEMBERS ALGERIA ECUADOR GABON INDONESIA l 4=1. ft...4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis v , TABLE II AMOUNTS OWED TO U.S. BANKS BY FOREIGN BORROWERS* SEPTEMBER 1985 (DATA BY TYPE OF BORROWER AND MATURITY DISTRIBUTION) (AMOUNTS IN MILLIONS OF DOLLARS) 15 OTHER LARGE BANKS COUNTRY OPEC MEMBERS IRAN IRAQ KUWAIT LIBYA NIGERIA QATAR SAUDI ARABIA UNITED ARAB EMIRATES VENEZUELA TOTALS TOTAL AMOUNT OWED (BY RESIDENCE PORTION OF TOTAL OWED BY OF BORROWER) BANKS PUBLIC PRIVATE BORROWERS NONBANK BORROWERS 2.0 78.3 97.7 .0 187.8 .0 94.6 82.2 1722.6 3184.3 F AGE 2 MATURITY OF DISTRIBUTION OF AMOUNTS OWED ONE YEAR OVER ONE OVER 5 AND UNDER TO 5 YEARS YEARS .0 37.6 82.2 .0 48.1 .0 31.1 60.7 597.4 1133.0 .0 40.7 .0 .0 129.1 .0 .6 11.3 537.5 1135.7 2.0 .0 15.5 .0 10.5 .0 62.8 10.2 587.5 915.4 2.0 51.7 91.7 .0 136.6 .0 85.6 66.2 1512.9 2392.7 .0 26.5 6.0 .0 36.5 .0 8.0 10.0 204.1 581.1 .0 .1 .0 .0 14.6 .0 1.0 6.0 5.5 210.4 NON-OIL EXP DEV COUNTRIES-LATIN AM 8 CARIBBEAN ARGENTINA 1592.0 472.7 BOLIVIA 37.0 7.8 BRAZIL 4108.9 1799.4 CHILE 1091.4 579.4 COLOMBIA 364.2 241.3 COSTA RICA 124.4 12.8 DOMINICAN REPUBLIC 64.0 17.9 EL SALVADOR 6.8 1.6 GUATEMALA 13.8 5.4 HONDURAS 30.4 7.0 JAMAICA 18.1 .1 MEXICO 4832.6 852.2 NICARAGUA 40.5 .0 PARAGUAY 3.7 1.4 PERU 442.1 97.2 TRINIDAD AND TOBAGO 22.1 .5 URUGUAY 123.3 8.7 OTHER 24.7 10.3 TOTALS 12940.5 4116.0 751.3 27.6 1666.7 388.6 69.0 101.5 42.1 2.6 2.0 21.4 18.0 2192.6 35.5 1.0 281.6 21.6 99.1 11.2 5733.7 368.0 1.6 642.7 123.4 53.9 10.1 4.0 2.6 6.4 2.0 .0 1787.7 5.0 1.3 63.3 .0 15.5 3.2 3090.8 1035.9 36.9 1770.7 488.3 281.7 45.3 43.7 6.8 8.9 20.0 10.2 1716.5 29.2 3.7 307.7 1.5 68.6 16.8 5892.8 470.3 .1 1462.7 466.9 61.2 55.0 20.3 .0 4.8 10.2 7.9 1923.7 6.0 .0 104.6 1.0 52.7 6.9 4654.6 85.8 .0 875.4 136.1 21.2 24.0 .0 .0 .1 .2 .0 1192.3 5.3 .0 29.8 19.6 1.9 1.0 2393.0 6.0 94.1 28.4 33.8 4.1 414.1 130.3 .0 707.0 .0 18.7 14.2 9.1 170.9 50.6 4.6 1.1 517.0 72.4 .0 220.2 3.0 131.7 12.1 92.6 326.2 100.2 215.1 5.3 2007.2 96.9 1.7 893.9 3.0 421.8 52.0 2.0 127.0 21.2 46.7 4.2 520.9 72.9 .0 195.4 .0 86.5 20.5 2.0 52.5 29.7 7.6 .0 169.3 95.6 .0 99.2 .0 6.1 3.7 NON-OIL EXP DEV COUNTRIES-ASIA CHINA,MAINLAND CHINA,TAIWAN INDIA ISRAEL JORDAN KOREA, SOUTH MALAYSIA PAKISTAN PHILIPPINES SYRIA -P THAILAND oo OTHER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 96.6 505.8 151.1 269.4 9.5 2697.5 265.6 1.7 1188.6 3.0 514.5 76.2 81.4 240.7 72.1 231.0 4.3 1766.3 62.9 1.7 261.3 .0 364.0 49.9 TABLE II AMOUNTS OWED TO U.S. BANKS BY FOREIGN BORR OWERS' SEPTEMBER 1985 (DATA BY TYPE OF BORROWER AND MATURITY DISTRIBU TION) (AMOUNTS IN MILLIONS OF DOLLARS) 15 OTHER LARGE BANKS COUNTRY TOTAL AMOUNT OWED (BY RESIDENCE PORTION OF TOTAL OWED BY OF BORROWER) BANKS PUBLIC PRIVATE .BORROWERS NONBANK BORROWERS NON-OIL EXP DEV COUNTRIES-ASIA TOTALS PAGE 3 MATURITY OF DISTRIBUTION OF AMOUNTS OWED ONE YEAR OVER ONE OVER 5 AND UNDER TO 5 YEARS YEARS 5779.8 3135.9 0.8 1193.0 4216.3 NON-OIL EXP DEV COUNTRIES-AFRICA CAMEROON EGYPT GHANA IVORY COAST KENYA MALAWI MOROCO SENEGAL SUDAN TUNISIA ZAIRE ZAMBIA OTHER TOTALS 1097.5 465.9 24.8 189.6 2.0 43.6 .4 4.2 94.6 .4 2.4 .7 6.6 2.0 3.9 71.8 446.8 .0 173.0 .0 .3 .4 3.8 58.6 .0 .4 6.0 .0 .1 19.4 262.0 .0 7.2 2.0 38.7 .0 .4 30.8 2.4 .3 .6 2.0 1.8 42.2 128.6 24.8 9.4 .0 4.6 .0 .0 5.2 .0 .0 .0 .0 2.0 10.1 56.2 6.9 125.0 1.0 19.0 .0 4.0 76.8 .2 .7 3.6 .0 .3 46.0 283.6 17.9 64.6 1.0 20.7 .4 .2 17.8 2.1 .0 .0 2.0 3.5 22.9 153.2 OFFSHORE BANKING CENTERS BAHAMAS BAHRAIN BERMUDA BRITISH NEST INDIES HONG KONG LEBANON LIBERIA MACAO NETHERLANDS ANTILLES PANAMA SINGAPORE TOTALS .0 .0 .0 3.9 .0 .0 .0 .1 .0 3.0 .0 .0 2.9 9.9 993.3 415.4 48.3 1987.2 1707.6 7.4 227.2 84.3 99.4 783.1 1472.4 7826.0 885.2 405.0 6.2 1958.3 1308.8 4.0 1.6 68.1 45.2 675.6 1362.1 6720.3 12.0 7.0 24.1 9.0 78.2 96.0 3.4 42.1 14.7 392.4 3.4 219.9 16.2 54.2 83.4 101.3 1027.3 983.7 410.0 43.1 1955.5 1597.5 7.0 63.6 79.9 67.3 715.5 1422.8 7346.4 9.1 5.4 5.2 25.7 77.0 .4 99.4 .9 25.1 34.9 42.3 325.5 .4 .0 .0 6.0 33.0 .0 64.1 3.5 7.0 32.7 7.3 154.0 .o .0 .o .o 112.0 4.0 166.0 282.0 .o .o .o .o 7.0 .0 38.0 45.0 17.0 1.0 65.0 83.0 88.0 3.0 63.0 154.0 34405.3 11426.9 11451.7 41756.2 10192.3 5335.4 INTERNATIONAL 8 REGIONAL ORGANIZATIONS INTERNATIONAL 112.0 LATIN AMERICAN REGIONAL 4.0 W. EUROPEAN REGIONAL 166.0 TOTALS 282.0 ?mot GRAND *mmx X1( TOTALS 10( 57284.0 LO https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis .o 14.2 6.3 .0 5.6 .o .o • TABLE III CROSS BORDER AND NON -LOCAL CURRENCY -CONTI NGENT CLAIMS: SEPTEMBER 198 (IN MILLIONS OF DOLLARS) 5 15 OTHER LARGE BANKS TOTAL (BY COUNTRY OR RESIDENCE) 0-10 AND SWITZERLAND BELGIUM-LUXEMBOURG CANADA FRANCE GERMANY, FEDERAL REPUBL IC OF ITALY JAPAN NETHERLANDS SWEDEN SWITZERLAND UNITED KINGDOM TOTALS NON 0-10 DEVELOPED COU NTRIES AUSTRALIA AUSTRIA DENMARK FINLAND GREECE ICELAND IRELAND, kEPUBLIC OF NEW ZEALAND NORWAY PORTUGAL SOUTH AFRICA SPAIN TURKEY OTHER TOTALS EASTERN EUROPE BULGARIA CZECHOSLOVAKIA GERMAN DEMOCRATIC REP UBLIC HUNGARY POLAND ROMANIA U.S.S.R. YUGOSLAVIA TOTALS PEC MEMBERS ALGERIA ECUADOR GABON INDONESIA IRAN IRAQ https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 64.4 753.0 965.2 312.4 146.7 741.1 157.7 181.2 226.2 1404.4 4952.8 * PORTION OF TOTAL CONSISTING OF LETTERS OF CREDIT OTHER COMM. 13.3 101.1 159.9 73.1 37.2 107.3 35.6 2.1 128.0 265.3 923.4 51.1 651.9 805.3 239.3 109.4 633.8 122.0 179.1 98.2 1139.0 4029.4 COMMITMENTS GUARANTEED BY RESIDENTS OF OTHER COUNTRY 7.7 40.8 4.5 11.8 3.0 6.0 55.8 .1 7.9 282.7 420.4 .830.5 ' 4.5 23.2 28.8 41.5 6.0 55.5 168.1 57.3 97.5 53.2 81.1 65.7 3.3 1516.5 274.4 .8 5.1 26.8 5.8 .0 23.6 32.6 4.4 3.8 7.6 42.7 60.6 3.3 491.8 556.0 3.7 18.1 2.0 35.7 6.0 31.9 135.5 52.8 93.7 45.6 38.4 5.1 .0 1024.7 9.0 .1 .0 .0 ..0 '.0 7.8 .0 .1 70.2 42.1 7.0 15.7 .2 152.2 .0 .0 23.0 .0 10.2 13.2 .0 60.9 107.4 .0 .0 1.0 .0 9.8 6.2 .0 8.0 25.0 .0 .0 22.0 .0 .4 7.0 .0 52.9 82.3 .o .o .o .o 6.6 .o .o .o 24.9 26.3 1.1 148.5 .0 19.3 3.9 15.9 .0 26.4 .0 3.4 21.0 10.4 1.1 122.0 .0 15.9 COMMITMENTS TO RESIDENTS OF OTHER COUNTRIES GUARANTEED BY RESIDENTS OF REPORTED COUNTRIES 39.5 34.8 77.5 174.7 25.0 348.1 28.3 17.0 38.0 229.0 1012.2 23.6 13.0 23.0 12.6 2.9 .0 .0 5.3 8.1 .0 5.3 .0 .0 1.0 95.0 .0 .0 5.0 6.6 5.0 .0 1.2 .0 .0 16.0 .0 1.7 .0 29.7 .0 .0 .0 PAGE 1 TOTAL COMM. AFTER AJUSTMENT FOR GUARANTEES 96.2 747.0 1038.3 475.4 168.8 1083.2 130.2 198.1 256.3 1350.7 5544.6 845.1 17.4 46.2 41.5 44.4 6.0 47.7 173.4 65.3 27.3 16.4 74.2 50.0 4.1 1459.3 .0 .0 28.0 .0 3.6 13.2 .0 60.9 105.8 24.9 25.1 1.1 162.2 .0 17.6 TABLE III CROSS BORDER AND NON-L OCAL CURRENCY CONTINGENT CLAIMSt SEPTEMBER 198 5 (IN MILLIONS OF DOLLARS) 15 OTHER LARGE BANKS TOTAL (BY COUNTRY OR RESIDENCE) OPEC MEMBERS KUWAIT LIBYA NIGERIA QATAR SAUDI ARABIA UNITED ARAB EMIRATES VENEZUELA TOTALS 34.2 1.9 45.5 .0 94.2 17.6 49.4 463.2 NON -OIL EXP DEV COUNTRIESLATIN AM .3 CARIBBEAN ARGENTINA 195.0 BOLIVIA 2.0 BRAZIL 177 ,9 CHILE 61.2 COLOMBIA 54.5 COSTA RICA 13.4 DOMINICAN REPUBLIC 7.0 EL SALVADOR 2.6 GUATEMALA 3.4 HONDURAS 15. 2 JAMAICA 4.5 MEXICO 241.4 NICARAGUA .0 PARAGUAY 1.8 PERU 51.6 TRINIDAD AND TOBAGO .0 URUGUAY 3.8 OTHER 6.8 TOTALS 842.5 NON-OIL EXP DEV COUNTRIES -ASIA CHINA,MAINLAND 46.0 CHINA,TAIWAN 66.8 INDIA 38.0 ISRAEL 3.6 JORDAN 1.1 KOREA, SOUTH 232.0 MALAYSIA 18.7 PAKISTAN 3.0 PHILIPPINES 110 .9 SYRIA 4.1 THAILAND 128.4 OTHER 20.9 TOTALS 673.7 LY1 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis PORTION OF TOTAL CONSISTING OF LETTERS OF CREDIT OTHER COMM. COMMITMENTS GUARANTEED BY RESIDENTS OF OTHER COUNTRY 29.2 1.9 20.8 .0 37.9 15.6 45.6 200.9 5.0 .0 24.7 .0 56.2 2.0 3.8 262.3 2.9 .2 6.5 39.5 45.6 2.0 75.1 35.1 38.4 1.6 7.0 2.6 3.4 15.2 4.5 182.5 .0 1.8 14.5 .0 3.1 6.3 438.9 149.4 .0 102.8 26.1 16.1 11.8 .0 .0 .0 .0 .0 58.9 .0 .0 37.1 .0 .7 .5 403.6 11.2 1.5 88.6 5.0 1.9 8.2 6.4 2.4 2.4 15.2 .0 77.2 .0 1.3 14.8 .0 .5 3.2 239.9 1.0 56.2 24.6 3.6 1.1 127.3 .9 3.0 32.1 4.1 74.6 14.4 343.1 45.0 10.6 13.4 .0 .0 104.6 17.8 .0 78.8 .0 53.8 6.5 330.5 .0 .0 11.0 .0 4.0 .o .o .o .2 .0 .0 2.0 57.8 .0 .2 5.2 69.4 COMMITMENTS TO RESIDENTS OF OTHER COUNTRIES GUARANTEED BY RESIDENTS OF REPORTED COUNTRIES .o .o .o 1.0 .0 1.5 .0 32.2 1.2 .0 1.4 .0 .2 2.8 16.1 20.3 5.1 .2 .6 36.3 .0 .o 1.9 .0 .2 2.0 82.7 PAGE 2 TOTAL COMM. AFTER AJUSTMENT FOR GUARANTEES 34.2 1.9 34.5 1.0 91.2 18.9 42.9 455.8 185.0 .5 90.7 56.2 52.8 5.2 .6 .2 1.0 .0 4.5 164.1 .0 .5 36.8 .0 3.3 3.6 605.3 58.1 87.1 43.1 3.8 1.5 268.3 18.7 1.0 55.0 4.1 128.4 17.7 687.1 TABLE III CROSS BORDER AND NON-LOCAL CURRENCY CONTINGENT CLAIMS: SEPTEMBER 1985 (IN MILLIONS OF DOLLARS) 15 OTHER LARGE BANKS TOTAL (BY COUNTRY OR RESIDENCE) NON-OIL EXP DEV COUNTRIES-AFR ICA CAMEROON EGYPT GHANA IVORY COAST KENYA MALAWI MOROCO SENEGAL SUDAN TUNISIA ZAIRE ZAMBIA OTHER TOTALS OFFSHORE BANKING CENTERS BAHAMAS BAHRAIN BERMUDA BRITISH WEST INDIES HONG KONG LEBANON LIBERIA MACAO NETHERLANDS ANTILLES PANAMA SINGAPORE TOTALS INTERNATIONAL 8 REGIONAL ORGANI ZATIONS INTERNATIONAL LATIN AMERICAN REGIONAL W. EUROPEAN REGIONAL TOTALS **** GRAND **** ** TOTALS ** https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 14.6 57.6 .3 3.2 .5 .0 .0 .0 .3 1.5 .6 2.4 8.5 89.5 5.0 2.0 347.8 8.0 236.5 9.2 22.4 9.6 30.7 55.3 66.1 792.9 PORTION OF TOTAL CONSISTING OF LETTERS OF CREDIT OTHER COMM. 2.2 54.6 .3 1.2 .5 .0 .0 .0 .3 .5 .6 2.4 7.5 70.1 5.0 2.0 266.8 7.5 190.6 9.2 9.4 1.0 2.2 46.7 40.8 581.5 12.4 3.0 .0 2.0 .0 .0 .0 .0 .0 1.0 .0 .0 1.0 19.4 .0 .0 81.0 .5 45.8 .0 13.0 8.6 28.5 8.6 25.3 211.4 COMMITMENTS GUARANTEED BY RESIDENTS OF OTHER COUNTRY 10.7 6.0 .0 .1 .1 .o .0 .0 .3 .0 .6 .0 3.2 21.0 .8 1.3 .90.9 1.2 43.8 1.3 14.2 .6 10.5 8.1 22.2 195.2 COMMITMENTS TO RESIDENTS OF OTHER COUNTRIES GUARANTEED BY RESIDENTS OF REPORTED COUNTRIES .0 .2 .7 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .9 PAGE 3 TOTAL COMM. AFTER AJUSTMENT FOR GUARANTEES 3.9 51.8 1.0 3.1 .4 .0 .0 .0 .0 1.5 .0 2.4 5.3 69.4 4.3 .0 11.8 .0 11.9 .6 .0 .0 .2 .1 1.1 30.0 8.5 .7 268.6 6.8 204.5 8.5 8.2 9.0 20.4 47.3 45.0 627.7 .o .o .o .o .o .o .o .o .o .o .o .o .o .o .o .o 1.5 9.1 .0 10.6 1.5 9.1 .0 10.6 9438.9 3075.1 6363.8 1144.5 1271.5 9565.9 i OPEC MEMBERS GABON INDONESIA IRAN IRAQ KUWAIT LIBYA NIGERIA QATAR SAUDI ARABIA UNITED ARAB EMIRATES VENEZUELA I TOTALS COUNTRY EXPOSURE LENDING SURVEY: SEPTEMBER TABLE I AMOUNTS OWED TO U.S. BANKS BY FOREIGN 1985 BORROWERS (INCLUDES ADJUSTMENTS TO REFLECT GUARANTEES AND INDIRECT BORROWINGS) (AMOUNTS IN MILLIONS OF DOLLARS) ALL OTHER BANKS (EXCLUDING THE 9 AND 15 LARGE ST) AMOUNTS OWED TOTAL AMOUNT PORTION OF TOTAL TOTAL AMOUNT AMOUNTS BY BORROHERS IN OWED BY COUNTRY THAT IS GUARANTEED OWED BORRO WED BY OTHER COWT OF BORROWERS BY RESIDENTS OF LESS AMOUNTS FOREIGN OFFICES GUARANTEED RIES BY RESIDENCE OTHER COUNTRIES GUARANTEED OF REPORTED NON -BANK S IN BORROWINGS BORROWINGS COUNTRY'S BANKS REPORTED COUNTRY OF BANKS OF NONBANKS 7.4 119.7 .1 48.0 83.4 .0 124.6 1.0 75.9 37.3 1248.1 2270.2 .0 .0 .0 43.0 .0 .0 2.1 .0 .0 17.5 5.1 69.5 ., NON-OIL EXP DEV COUNTRIES-LATIN AM 8 CARIBBEAN ARGENTINA 922.4 4.2 BOLIVIA 27.9 .3 BRAZIL 3282.7 55.5 CHILE 1322.0 29.7 COLOMBIA 339.5 10.7 COSTA RICA 96.5 .6 DOMINICAN REPUBLIC 70.4 1.0 EL SALVADoR 56.7 19.7 GUATEMALA 68.4 23.3 HONDURAS 31.4 7.5 JAMAICA 28.3 .0 MEXICO 6168.6 188.0 NICARAGUA 9.9 .0 PARAGUAY 22.9 .0 PERU 332.8 8.6 TRINIDAD AND TOBAGO 7.5 .0 URUGUAY 86.3 1.0 OTHER 52.9 44.0 I, TOTALS 12927.9 394.3 NON-OIL EXP DEV COUNTRIES-ASIA CHINA,MAINLAND CHINA,TAIWAN INDIA ISRAEL JORDAN KOREA, SOUTH MALAYSIA PAKISTAN fHILIPPINES https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 52.7 377.4 28.0 345.6 32.5 1442.9 107.9 2.8 474.5 .0 59.0 .0 .0 5.0 69.4 1.0 .0 18.9 .0 10.5 • .0 .0 1.0 .0 26.6 .0 13.4 .0 66.2 144.3 PAGE 2 TOTAL AMOUNTS OWED U.S. BANKS AFTER ADJUSTMENTS FOR GUARANTEES AND EXTERNAL BORROWING 7.4 109.1 .1 5.0 82.4 .0 25.0 .0 .0 46.0 95.9 1.0 62.4 19.8 1176.8 2056.3 .0 .0 15.0 29.0 15.3 130.4 39.1 1.5 131.1 40.1 6.5 11.2 8.7 8.7 24.9 3.6 11.8 485.4 .0 .2 19.3 .0 8.5 .2 801.4 879.0 26.1 3096.0 1252.0 322.3 84.7 60.6 28.3 20.1 20.2 16.5 5495.1 9.9 22.7 304.8 7.5 76.7 8.7 11732.1 24.2 .0 290.7 1.1 9.0 .0 .0 .0 .0 358.3 .0 .0 .3 .0 .0 3.0 686.6 70.7 .0 .0 .2 .0 2.6 .3 109.2 906.3 26.1 3410.4 1260.6 331.7 84.7 60.6 28.8 20.2 20.2 16.5 5924.2 9.9 22.7 305.4 7.5 79.4 12.0 12528.0 .0 .1 .0 15.6 52.7 318.3 28.0 330.0 27.5 1359.6 106.6 2.2 433.5 51.5 103.3 129.4 11.5 39.0 395.6 32.1 .0 17.5 .1 32.5 1.6 271.0 2.0 136.1 3.0 .0 7.3 104.4 454.1 159.0 612.5 68.6 1891.4 141.7 2.2 458.3 .o 13.9 .3 .5 22.0 .o .o .o .o .0 11.0 .o .o .0 .0 .o .0 4.3 .0 4.2 25.6 3.0 .0 23.6 7.4 .4 .o .o .5 .1 .o .o 7.4 145.1 .1 5.0 128.4 .o 95.9 1.0 81.7 48.9 1196.3 2212.4 COUNTRY EXPOSURE LENDING SURVEY: SEPTEMBER 1985 TABLE I AMOUNTS OWED TO U.S. BANKS BY FOREIGN (INCLUDES ADJUSTMENTS TO REFLECT GUARANTEES AND INDI BORROWERS RECT BORROWINGS) (AMOUNTS IN MILLIONS OF DOLLARS) ALL OTHER BANKS (EXCLUDING THE 9 AND 15 LARGEST) AMOUNTS OWED TOTAL AMOUNT PORTION OF TOTAL TOTAL AMOUNT AMOUNTS BY BORROWERS IN OWED BY COUNTRY THAT IS GUARANTEED OWED BORR OWED BY OTHE R COUNTRIES OF BORROWERS BY RESIDENTS OF LESS AMOUNTS FOREIGN OFFICES GUARANTEED BY RESIDENCE OTHER COUNTRIES GUARANTEED OF REPORTED NON-BANKS IN BORROWINGS BORROWINGS COUNTRY'S BANKS REPORTED COUNTRY OF BANKS OF NONBANKS 0-10 AND SWITZERLAND BELGIUM-LUXEMBOURG CANADA FRANCE GERMANY, FEDERAL REPUBLIC OF ITALY JAPAN NETHERLANDS SWEDEN SWITZERLAND UNITED KINGDOM TOTALS 1572.3 2446.2 2046.8 527.8 1375.6 2118.5 485.6 1377.1 437.0 12523.1 24910.5 PAGE 1 TOTAL AMOUNTS OWED U.S. BANKS AFTER ADJUSTMENTS FOR GUARANTEES AND EXTERNAL BORROWING 781.8 143.5 439.9 118.2 88.3 117.4 105.4 113.3 30.6 812'6.6 10065.4 6.5 24.3 .2 7.9 5.1 1.8 10.7 .0 4.0 45.2 105.9 783.9 2278.2 1606.6 401.7 1282.1 1999.3 369.5 1263.8 402.4 4351.2 14739.2 379.1 2472.4 2061.5 1481.5 1381.2 12078.0 837.5 123.5 622.3 1829.6 23267.0 35.5 111.2 55.5 168.8 28.8 535.6 91.1 36.5 40.4 248.2 1351.8 1198.5 4861.9 3723.7 2052.1 2692.2 14613.0 1298.2 1423.9 1065.2 6429.1 39358.1 642.4 300.8 250.6 534.0 147.7 16.4 139.0 142.2 389.3 237.8 288.5 644.1 216.4 48.8 3998.7 21.3 10.0 12.0 68.8 .0 .0 .0 1.1 7.0 68.5 7.0 60.0 .0 24.0 279.9 31.4 .0 2.0 .4 1.0 1.1 .0 .2 46.1 .3 35.1 6.0 50.6 4.4 178.7 589.7 290.8 236.6 464.8 146.7 15.3 139.0 140.8 336.2 168.9 246.4 578.0 165.8 20.4 3540.0 1082.2 169.0 -254.3 61.1 5.0 5.0 125.6 101.4 22.5 129.8 19.0 296.7 3.0 .0 2275.1 EASTERN EUROPE ALBANIA BULGARIA CZECHOSLOVAKIA GERMAN DEMOCRATIC REPUBLIC HUNGARY POLAND ROMANIA U.S.S.R. YUGOSLAVIA TOTALS 40.0 27.4 22.5 7.2 5.0 .9 6.4 8.1 19.0 .0 17.0 10.5 .0 1.3 164.5 1712.0 487.2 513.4 533.2 156.7 20.4 271.1 250.4 377.7 28.8 282.4 885.3 168.8 21.7 5979.7 .0 3.0 20.1 55.9 109.2 97.6 15.6 2.2 428.3 732.2 .0 .0 .0 .0 5.4 .8 .0 .0 17.1 23.3 .0 .0 .0 1.0 6.3 .0 .0 .0 41.0 48.3 .0 3.0 20.1 54.9 97.5 96.8 15.6 2.2 370.1 660.5 .0 .0 .0 111.5 .0 8.9 .0 .0 .0 120.5 3PEC MEMBERS ALGERIA ECUADOR .0 1 .0 '.0 .4 1.0 .0 .0 .0 8.8 10.2 .0 3.0 20.1 166.9 98.5 105.8 15.6 2.2 378.9 791.2 43.3 481.1 .0 1.8 .0 26.4 43.3 452.9 .0 .0 1.0 5.1 44.3 458.0 NON G-10 DEVELOPED COUNTRIES AUSTRALIA AUSTRIA DENMARK FINLAND GREECE ICELAND IRELAND, REPUBLIC OF NEW ZEALAND NORWAY PORTUGAL SOUTH AFRICA SPAIN TURKEY OTHER TOTALS https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis COUNTRY EXPOSURE LENDIN TABLE I AMOUNTS OWED TO U.SG SURVEY: SEPTEMBER 1985 . BANKS BY FOREIGN BORROW (INCLUDES ADJUSTMENTS TO REF ERS LECT GUARANTEES AND INDIRE CT BORROWINGS) (AMOUNTS IN MILLIONS OF DOL LARS) ALL OTHER BANKS (EXCLUDING THE 9 AND 15 LARGEST) TOTAL AMOUNT PORTION OF TOTAL AMOUNTS OWED TOTAL AMOUNT AMOUNTS OWED BY COUNTRY THAT IS BY BORROWERS IN GUA RAN TEE D OWED OF BORROWERS BORROWED BY BY RESIDENTS OF OTH ER COUNTRIES LESS AMOUNTS FOREIGN OFFICE RESIDENCE OTHER COUNTRIES S GUA RAN TEE D BY GUARANTEED OF REPORTED BORROWINGS BORROWINGS NON -BANKS IN COUNTRY'S BANKS REPORTED OF BANKS OF NONBANKS COUNTRY NON-OIL EXP DEV COUNTRIES -ASIA SYRIA 12.7 .0 THAILAND .0 12.7 149 .0 .4 6.2 OTHER .0 .5 142 .7 68. 101 0 .2 10.3 .6 2.7 TOTALS 88.2 30.9 3128.2 169.8 .3 55.6 2902.6 878.9 NON -OIL EXP DEV COUNTRIES 454.6 -AF RIC A CAMEROON 24.3 .0 EGYPT 1.0 23.3 .0 92.2 47.0 GHANA .o 2.8 42.4 7.0 2.1 .0 IVORY COAST .o 2.1 .0 .0 65.2 • .0 KENYA .0 3.1 62.1 .0 1.0 .0 MALAWI .0 1.0 .0 .0 2.2 .0 MOROCO .0 .0 2.2 .0 162 .7 44. 0 SENEGAL .0 .o 118.7 .0 2.5 .0 SUDAN .0 .o 2.5 .0 5.0 .0 TUNISIA .0 .3 4.7 .0 5.0 .0 ZAIRE .0 .0 5.0 .0 .6 .0 ZAMBIA .0 .5 .1 .0 2.4 .0 OTHER .0 2.0 .4 .0 50.2 7.8 .0 8.7 TOTALS 33.7 .0 415.7 98.8 .7 21.5 295.3 7.0 OFFSHORE BANKING CENTERS .8 BAHAMAS 3763.3 3646.8 BAHRAIN 29.2 87.2 15.0 139 .6 60.6 BERMUDA 3.5 .0 79. 0 58. 1 60. 8 3.8 BRITISH WEST INDIES .8 1.2 55. 8 .0 4496.2 4379.2 HONG KONG 30.0 6.9 86. 9 34.8 895.4 546.4 LEBANON 34.5 8.0 314.4 92. 1 10. 1 .0 LIBERIA .0 3.1 10.1 2.5 178.0 .0 MACAO 143.0 .0 35.0 .0 1.5 1.5 NETHERLANDS ANTILLES 4.9 .0 .0 .0 187.6 59.4 PANAMA 77.1 .0 51. 0 .0 529 .4 211 .0 I SINGAPORE 162.0 1. 1 156 .4 5.0 1188.7 1149.3 2.5 8%0 TOTALS 36. 9 108.6 11451.1 10058.3 479.7 .0 913.1 316 .1 INTERNATIONAL & REGIONAL 49. 4 ORGANIZATIONS AFRICAN REGIONAL .0 .0 ASIAN REGIONAL .0 .0 .0 1.0 .0 INTERNATIONAL .0 .0 1.0 .0 84. 7 .0 LATIN AMERICAN REGIONAL 3.0 .0 81.7 .0 9.1 .0 MIDDLE EASTERN REGIONAL .0 5.0 9.1 .0 .0 .0 W. EUROPEAN REGIONAL .0 .0 0 .0 32.0 .0 .0 .0 TOTALS 32. 0 3.6 126.8 .0 3.0 .0 Grand Totals 123 .8 3.6 59961.7 21159.4 5.0 1838.8 36963.4 27685.5 2171.3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis PAGE 3 TOTAL AMOUNTS OWED U.S. BANKS AFTER ADJUSTMENTS FOR GUARANTEES AND EXTERNAL BORROWING 12.7 211.3 119.5 4236.3 23.3 49.4 .0 62.1 .0 2.2 118.7 2.5 4.7 5.0 .1 .4 34.4 303.2 105.7 137.9 62.7 129.7 409.7 12.6 40.0 .0 65.1 169.4 145.5 1278.7 .0 1.0 86.7 9.1 .0 35.6 132.4 66820.3 TABLE II AMOUNTS OWED TO U.S. BANKS BY FOREIGN BORROWERS, SEPTEMBER 1985 (DATA BY TYPE OF BORROWER AND MATURITY DISTRIBUTI ON) (AMOUNTS IN MILLIONS OF DOLLARS) ALL OTHER BANKS (EXCLUDING THE 9 AND 15 LARGEST COUNTRY 6-10 AND SWITZERLAND BELGIUM-LUXEMBOURG CANADA FRANCE GERMANY, FEDERAL REPUBLIC OF ITALY JAPAN NETHERLANDS SWEDEN SWITZERLAND UNITED KINGDOM TOTALS TOTAL AMOUNT OWED (BY RESIDENCE PORTION OF TOTAL OWED BY OF BORROWER) BANKS PUBLIC PRIVATE BORROWERS NONBANK BORROWERS PAGE 1 MATURITY OF DISTRIBUTION OF AMOUNTS OWED ONE YEAR OVER ONE OVER 5 AND UNDER TO 5 YEARS YEARS 1572.3 2446.2 2046.8 527.8 1375.6 2118.5 485.6 1377.1 437.0 12523.1 24910.5 1460.7 2042.3 1832.2 388.7 927.1 1820.4 407.6 1119.2 348.7 11733.8 22081.1 82.9 14.6.2 119.0 61.4 290.7 7.4 .0 178.0 11.1 193.2 1090.1 28.6 257.6 95.6 77.7 157.7 290.7 78.0 79.8 77.1 596.0 1739.2 1474.1 2016.0 1693.8 353.4 880.8 1784.5 386.2 1204.8 391.0 11733.6 21918.7 NON G-10 DEVELOPED COUNTRIES AUSTRALIA AUSTRIA DENMARK FINLAND GREECE ICELAND IRELAND, REPUBLIC OF NEW ZEALAND NORWAY PORTUGAL SOUTH AFRICA SPAIN TURKEY OTHER TOTALS 48.8 183.0 223.2 152.6 324.8 246.4 36.9 30.3 7.1 580.4 1833.8 49.4 247.0 129.7 21.8 169.9 87.5 62.5 142.0 38.9 209.0 1157.9 642N 300.8 250.6 534.0 147.7 16.4 139.0 142.2 389.3 237.8 288.5 644.1 216.4 48.8 3998.7 229.9 262.5 181.2 462.5 8.3 9.4 42.3 25.1 289.9 92.2 150.3 220.3 35.5 27.5 2037.5 28.6 20.1 27.7 39.0 76.0 4.8 92.7 28.9 2.7 127.8 41.7 146.9 176.3 4.5 818.1 383.8 18.1 41.6 32.5 63.3 2.2 4.0 88.1 96.7 17.8 96.4 276.8 4.5 16.8 1143.0 462.2 239.1 193.9 468.7 56.2 8.5 61.9 76.7 308.5 106.4 229.8 277.6 79.3 34.4 2603.7 64.9 31.7 32.9 46.3 50.6 6.6 32.9 38.2 56.9 112.9 55.0 274.8 130.5 7.0 941.8 EASTERN EUROPE ALBANIA BULGARIA CZECHOSLOVAKIA GERMAN DEMOCRATIC REPUBLIC HUNGARY POLAND ROMANIA U.S.S.R. YUGOSLAVIA TOTALS 115.3 30.0 23.6 19.0 40.8 1.3 44.2 27.2 23.9 18.4 3.7 91.6 6.5 7.4 453.1 .0 3.0 20.1 55.9 109.2 97.6 15.6 2.2 428.3 732.2 .0 .0 2.0 29.7 33.2 22.7 3.9 .2 188.1 279.9 .0 3.0 17.1 24.2 73.5 68.9 11.7 2.0 182.1 382.7 .0 58.1 69.5 .0 3.0 12.6 53.3 58.6 40.1 1.6 2.1 148.6 320.2 OPEC MEMBERS ALGERIA ECUADOR GABON .0 .0 7.4 2.6 39.9 40.3 14.0 .1 230.2 334.8 43.3 481.1 7.4 11.9 55.0 .0 30.0 378.1 7.4 1.4 47.9 .0 10.3 171.3 6.1 21.7 247.6 1.1 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis .0 1.0 2.0 2.4 6.0 .0 .0 .o .o .o .o 10.6 17.0 .o .o 49.4 77.1 11.2 62.1 TABLE II AMOUNTS OWED TO U.S. BANKS BY FOREIGN BORROWERS 3 SEPTEMBER 1985 (DATA BY TYPE OF BORROWER AND MATURI TY DISTRIBUTION) (AMOUNTS IN MILLIONS OF DOLLARS) ALL OTHER BANKS (EXCLUDING THE 9 AND 15 LARGEST COUNTRY OOPEC MEMBERS INDONESIA IRAN IRAQ KUWAIT LIBYA NIGERIA QATAR SAUDI ARABIA UNITED ARAB EMIRATES VENEZUELA TOTALS TOTAL AMOUNT OWED (BY RESIDENCE PORTION OF TOTAL OWED BY OF BORROWER) BANKS PUBLIC PRIVATE BORROWERS NONBANK BORROWERS 119.7 .1 48.0 83.4 .0 124.6 1.0 75.9 37.3 1248.1 2270.2 13.0 .0 48.0 62.7 .0 9.7 .0 12.7 28.3 324.3 565.8 NNON-OIL EXP DEV COUNTRIES-LATIN AM 8 CARIBBEAN ARGENTINA 922..4 257.8 BOLIVIA 27.9 5.9 BRAZIL 3282.7 1465.3 CHILE 1322.0 779.8 COLOMBIA 339 .5 108.0 COSTA RICA 96. 5 6.9 DOMINICAN REPUBLIC 70. 4 1.9 EL SALVADOR 56. 7 45. 5 GUATEMALA 68. 4 26. 9 HONDURAS 31.4 13.6 JAMAICA 28. 3 .5 MEXICO 6168.6 1075.0 NICARAGUA 9.9 .0 PARAGUAY 22. 9 4.9 PERU 332.8 57.9 TRINIDAD AND TOBAGO 7.5 .0 URUGUAY 86. 3 9.0 OTHER 52.9 44.0 TOTALS 12927.9 3903.4 NNON-OIL EXP DEV COUNTRIES-ASIA CHINA,MAINLAND 52.7 36.6 CHINA,TAIWAN 377 .4 202 .1 INDIA 28. 0 14. 8 ISRAEL 345 .6 136 .0 JORDAN 32.5 32.5 KOREA, SOUTH 144 2.9 104 2.7 MALAYSIA 107 .9 23. 5 PAKISTAN 2.8 1.0 PHILIPPINES 474.5 150.9 SYRIA 12.7 9.0 THAILAND 149.4 120.4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis PAGE 2 MATURITY OF DISTRIBUTION OF AMOUNTS OWED ONE YEAR OVER ONE OVER 5 AND UNDER TO 5 YEARS YEARS 53.3 .0 .0 .0 .0 105.7 .0 3.4 .0 457.4 1035.5 53.4 .1 .0 20.6 .0 9.2 1.0 59.7 9.0 466.3 668.8 51.8 .1 38.0 74.2 .0 60.5 .0 66.4 34.1 1024.5 1537.6 41.5 .0 10.0 9.2 .0 60.0 .0 9.5 .2 181.3 582.4 26.2 .0 .0 .0 .0 4.1 1.0 .0 3.0 42.1 150.0 486.8 8.1 1393.8 391.0 135.0 77.7 40.7 9.0 32.5 9.2 25.7 3037.4 9.9 12.3 238.0 7.5 48.0 8.0 5971.3 177.7 13.8 423.5 151.0 96.4 11.8 27.7 2.0 9.0 8.5 2.1 2056.1 .0 5.6 36.8 .0 29.2 .9 3053.1 559.2 18.0 1289.6 376.0 189.2 43.5 44.3 33.1 39.5 23.1 16.4 1895.8 6.2 17.3 216.7 1.0 43.8 51.9 4865.3 321.3 6.9 1284.9 697.4 116.7 40.5 16.3 23.5 28.7 7.2 11.9 2205.5 .9 5.6 90.5 6.2 36.1 1.0 4901.8 41.8 3.0 708.1 248.5 33.5 12.5 9.7 .0 .2 1.0 .0 2067.3 2.8 .0 25.4 .2 6.3 .0 3160.7 9.0 74.4 6.1 157.5 .0 276.3 60.1 1.2 244.4 3.7 3.5 7.1 100.8 7.1 52.1 .0 123.9 24.3 .5 79.1 .0 25.4 39.6 274.8 17.1 154.9 32.5 939.6 17.6 2.1 275.4 12.7 136.2 7.6 63.1 7.9 159.8 .0 396.5 62.2 .7 160.2 .0 10.5 5.4 39.4 2.9 30.8 .0 106.7 28.0 .0 38.8 .0 2.5 TABLE II AMOUNTS OWED TO U.S . BANKS BY FOREIGN BORROWERS' SEPTEMBER 1985 (DATA BY TYPE OF BORROWER AND MATURITY DISTRIBUTION) (AMOUNTS IN MILLIONS OF DOLLAR S) ALL OTHER BANKS (EXCLUDING THE 9 AND 15 LARGEST coartity NON -OIL EXP DEV COUNTRIES-AS IA OTHER TOTALS TOTAL AMOUNT OWED (BY RESIDENCE POR TION OF TOTAL OWED BY OF BORROWER) BANKS PUBLIC PRIVATE BORROWERS NONBANK BORROWERS NON -OIL EXP DEV COUNTRIES -AFRICA CAMEROON EGYPT GHANA IVORY COAST KENYA MALAWI MOROCO SENEGAL SUDAN TUNISIA ZAIRE ZAMBIA OTHER TOTALS OFFSHORE BANKING CENTERS BAHAMAS BAHRAIN BERMUDA BRITISH WEST INDIES HONG KONG LEBANON LIBERIA MACAO NETHERLANDS ANTILLES PANAMA SINGAPORE TOTALS https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MATURITY OF DISTRIBUTION OF AMOUNTS OWED ONE YEAR OVER ONE OVER 5 AND UNDER TO 5 YEARS YEARS 101.2 3128.2 53.7 1823.5 21.4 858.1 26.1 446.6 58.5 1961.6 30.4 899.3 12.3 267.2 24.3 92.2 2.1 65.2 1.0 2.2 162.7 2.5 5.0 5:0 .6 2.4 50.2 415.7 .8 80.6 .0 .5 .0 .0 119.0 .0 .0 5.0 .0 .0 9.3 215.2 4.0 4.5 2.1 55.2 .0 2.2 37.7 2.5 2.7 .0 .6 .3 31.4 143.5 19.5 7.1 .0 9.5 1.0 .0 6.0 .0 2.3 .0 .0 2.1 9.4 56.9 3.6 64.6 .4 16.8 1.0 1.0 80.4 .0 4.2 2.2 .3 20.6 27.5 1.7 40.5 .0 1.1 80.3 2.4 .3 2.8 .3 1.6 22.0 201.3 .0 .0 .0 7.9 .0 .0 2.0 .0 .5 .0 .o .o 6.5 16.9 3763.3 3721.9 139.6 139.6 60.8 37.3 4496.2 4452.6 895.4 754.5 10.1 1.8 178.0 2.8 1.5 1.5 187.6 76.0 529.4 228.7 1188.7 1177.2 11451.1 10594.4 INTERNATIONAL 8 REGIONAL ORGANIZATIONS AFRICAN REGIONAL .0 ASIAN REGIONAL .0 1.0 .0 INTERNATIONAL 84.7 .0 LATIN AMERICAN REGIONAL 9.1 .0 MIDDLE EASTERN REGIONAL .0 .0 W. EUROPEAN REGIONAL 32. 0 .0 TOTALS 126.8 .0 *XX' GRAND *XX1( ** TOTALS )0( 59961.7 41501.2 CO PAGE 3 8.8 .0 .0 26.5 .4 1.3 5.7 .0 10.6 104.0 2.5 159.9 32.4 .0 23.5 17.0 140.4 7.0 169.5 .0 101.0 196.7 9.0 696.7 .8 21.6 197.4 3708.0 139.6 42.9 4447.7 861.6 10.1 79.1 1.5 94.4 344.4 1178.7 10908.4 25.1 .0 14.9 37.1 23.2 .0 80.6 .0 59.3 132.8 10.0 383.2 30.1 .0 3.0 11.4 10.6 .0 18.3 .0 33.8 52.2 .0 159.4 .0 1.0 84.7 9.1 .0 32.0 126.8 .0 .0 .0 .0 .0 .0 .0 4.0 .0 .0 13.0 18.0 59.5 .0 .0 16.0 75.5 .0 21.2 9.1 .0 3.0 33.3 10586.3 7874.2 44331.3 10154.3 5476.0 .0 1.0 .0 .0 .0 TABLE III CROSS BORDER AND NON-LOCAL CURRENCY CONT INGENT CLAIMS: SEPTEMBER 1985 (IN MILLIONS OF DOLLARS) ALL OTHER BANKS (EXCLUDING THE 9 AND 15 LARGEST) TOTAL (BY COUNTRY OR RESIDENCE) 6-10 AND SWITZERLAND BELGIUM-LUXEMBOURG CANADA FRANCE GERMANY, FEDERAL REPUBLIC OF ITALY JAPAN NETHERLANDS SWEDEN SWITZERLAND UNITED KINGDOM TOTALS NON 0-10 DEVELOPED COUNTRIES AUSTRALIA AUSTRIA DENMARK FINLAND GREECE ICELAND IRELAND, REPUBLIC OF NEW ZEALAND NORWAY PORTUGAL SOUTH AFRICA SPAIN TURKEY OTHER TOTALS EASTERN EUROPE ALBANIA BULGARIA CZECHOSLOVAKIA GERMAN DEMOCRATIC REPUBLIC HUNGARY POLAND ROMANIA U.S.S.R. YUGOSLAVIA TOTALS OPEC MEMBERS ALGERIA ECUADOR GABON INDONESIA IRAN https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis PORTION OF TOTAL CONSISTING OF LETTERS OF CREDIT OTHER COMM. 174.9 275.8 377.7 149.8 176.4 702.0 95.1 266.7 71.3 600.6 2890.8 84.6 77.9 105.6 76.0 5.1 116.3 33.1 .1 29.9 278.2 807.3 90.3 197.9 272.1 73.8 171.3 585.7 62.0 266.6 41.3 322.4 2083.4 183.5 29.3 89.8 53.1 28.3 .0 3.1 34.8 23.3 22.0 11.4 128.7 23.7 .5 632.0 92.6 7.3 20.8 2.1 .0 .0 1.1 3.1 10.5 8.2 7.3 30.2 6.6 .5 190.8 90.9 22.0 69.0 51.0 28.3 .0 2.0 31.7 12.8 13.8 4.1 98.5 17.1 .0 441.2 .o 10.0 .o .o 10.0 .o 3.9 38.1 2.0 .1 10.0 17.5 81.6 .3 15.0 .0 .1 .0 3.0 28.4 6.7 75.8 3.0 86.6 42.4 1.0 49.3 .o .o .o .o .o .o 3.6 23.1 2.0 .o 10.0 14.5 53.2 6.7 33.3 2.0 37.3 .o COMMITMENTS GUARANTEED BY RESIDENTS OF OTHER COUNTRY 11.0 7.9 .8 .o .o 4.3 .o .o 3.1 3.6 30.8 1.1 .o .o .o .o .o .7 .o 4.0 .o 4.1 2.2 10.6 .0 22.7 .o .o .o .o COMMITMENTS TO RESIDENTS OF OTHER COUNTRIES GUARANTEED BY RESIDENTS OF REPORTED COUNTRIES 170.9 335.1 434.9 190.5 182.7 1025.0 123.7 273.7 77.1 832.3 3646.4 49.3 10.3 15.0 231.7 39.6 104.8 53.1 28.3 .0 2.4 38.2 20.4 22.0 8.5 129.5 13.1 .5 692.6 .o .o .o .o 3.4 1.1 .o 1.2 3.0 .o .o 83.3 .o .o .o .o .o .o 12.0 43.0 .o TOTAL COMM. AFTER AJUSTME FOR GUARANTEE 7.0 67.2 58.0 40.7 6.2 327.3 28.6 7.0 8.8 235.4 786.5 16.9 8.3 25.2 PAGE 1 .0 10.0 .0 3.9 21.2 2.0 .1 .5 .5 .o 1.4 .0 12.7 .o 10.0 9.7 56.9 6.7 65.1 3.0 56.3 .o lr . TABLE III CROSS BORDER AND NON-LOCAL CURR ENCY CONTINGENT CLAIMS: SEPTEMBER 1985 (IN MILLIONS OF DOLLARS) ALL OTHER BANKS (EXCLUDING THE 9 AND 15 LARG EST) TOTAL (BY COUNTRY OR RESIDENCE) OPEC MEMBERS IRAQ KUWAIT LIBYA NIGERIA QATAR SAUDI ARABIA UNITED ARAB EMIRATES VENEZUELA TOTALS 30.0 28.4 5.0 18.6 1.1 51.3 PORTION OF TOTAL CONSISTING OF LETTERS OF CREDIT OTHER COMM. COMMITMENTS GUARANTEED BY RESIDENTS OF OTHER COUNTRY 40.8 348.5 20.0 10.3 1.0 12.3 .1 19.9 .8 38.8 196.4 10.0 18.0 4.0 6.2 1.0 31.4 .0 2.0 152.0 10.0 2.0 .0 6.2 .0 1.5 .0 13.0 87.8 NON -OIL EXP DEV COUNTRIES-LATIN AM & CARI BBEAN ARGENTINA 52.2 BOLIVIA 15.8 BRAZIL 141. 1 CHILE 49.6 COLOMBIA "25.3 COSTA RICA 33.9 DOMINICAN REPUBLIC 2.2 EL SALVADOR 81.8 GUATEMALA 34.8 HONDURAS 26.8 JAMAICA 6.7 MEXICO 193. 8 NICARAGUA .0 PARAGUAY .0 PERU 28.4 TRINIDAD AND TOBAGO 9.0 URUGUAY .7 OTHER 2.6 TOTALS 705.4 24.2 10.8 41.6 27.9 22.6 10.3 2.2 72.4 26.7 26.8 5.5 146.0 .0 .0 25.0 .0 .4 2.6 445.6 27.9 5.0 99.5 21.7 2.7 23.6 .0 9.4 8.1 .0 1.2 47.8 .0 .0 3.3 9.0 .3 .0 259.8 5.5 .0 36.7 5.0 .0 30.0 .0 36.1 14.8 13.3 2.1 28.2 .0 .0 7.6 9.0 .1 1.6 190.3 .4 51.0 17.4 32.0 1.5 74.2 .0 1.1 67.4 2.4 10.0 7.1 265.0 1.1 52.5 2.2 6.2 7.0 108.1 5.0 2.0 36.6 .0 29.5 .3 250.7 ON-OIL EXP DEV COUNTRIES-ASIA CHINA,MAINLAND CHINA,TAIWAN INDIA ISRAEL JORDAN KOREA, SOUTH MALAYSIA PAKISTAN PHILIPPINES SYRIA THAILAND OTHER TOTALS https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis .6 1.5 103.6 19.6 38.2 8.5 182.4 5.0 3.1 104.1 2.4 39.5 7.4 515.7 .o .o .o 7.0 .0 .0 1.0 .o .o .3 19.4 COMMITMENTS TO RESIDENTS OF OTHER COUNTRIES GUARANTEED BY RESIDENTS OF REPORTED COUNTRIES .o .1 .o .0 .0 4.2 .3 .3 19.0 .o .o .0 .1 .0 .0 .0 .0 .0 .0 .0 4.2 .0 .0 .0 .0 .o .o 4.3 .2 .0 2.0 10.0 .0 10.9 .o .o 2.0 .0 2.3 .0 27.4 PAGE 2 TOTAL COMM. AFTER AJUSTMENT FOR GUARANTEES 20.0 26.5 5.0 12.3 1.1 54.0 1.1 28.1 279.6 46.7 15.8 104.4 44.7 25.3 3.9 2.1 45.7 20.0 13.4 4.6 169.8 .0 .0 20.7 .0 .6 1.0 519.3 1.7 103.6 21.6 37.1 8.5 186.3 5.0 3.1 105.1 2.4 41.8 7.1 523.7 4 II TABLE III CROSS BORDER AND NON-LOCAL CURRENCY CONTINGENT CLAIM S' SEPTEMBER 1985 (IN MILLIONS OF DOLLARS) ALL OTHER BANKS (EXCLUDING THE 9 AND 15 LARGEST) TOTAL (BY COUNTRY OR RESIDENCE) NON-OIL EXP DEV COUNTRIES-AFRICA CAMEROON 1 EGYPT GHANA IVORY COAST KENYA MALAWI MOROCO SENEGAL SUDAN TUNISIA ZAIRE ZAMBIA OTHER TOTALS OFFSHORE BANKING CENTERS BAHAMAS BAHRAIN BERMUDA BRITISH WEST INDIES HONG KONG LEBANON LIBERIA MACAO NETHERLANDS ANTILLES PANAMA SINGAPORE TOTALS INTERNATIONAL 8 REGIONAL ORGANIZATIONS AFRICAN REGIONAL ASIAN REGIONAL INTERNATIONAL LATIN AMERICAN REGIONAL MIDDLE EASTERN REGIONAL W. EUROPEAN REGIONAL TOTALS M** GRAND **** JEN TOTALS ** cm https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4 PORTION OF TOTAL CONSISTING OF LETTERS OF CREDIT OTHER COMM. COMMITMENTS GUARANTEED BY RESIDENTS OF OTHER COUNTRY COMMITMENTS TO RESIDENTS OF OTHER COUNTRIES GUARANTEED BY RESIDENTS OF REPORTED COUNTRIES PAGE 3 TOTAL COMM. AFTER AJUSTMENT FOR GUARANTEES 1.3 64.9 .0 6.5 .0 .0 40.0 .0 23.0 .0 .0 .0 151.0 -g86.9 1.3 63.1 .0 3.4 .0 .0 39.0 .0 23.0 .0 .0 .0 134.8 264.7 .0 1.8 .0 3.1 .0 .0 1.0 .0 .0 .0 .0 .0 16.2 22.1 .0 6.0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 59.0 65.0 30.0 17.0 276.9 7.2 118.2 14.9 5.4 .0 50.0 75.6 65.1 660.8 23.7 17.0 268.6 6.7 96.9 5.0 2.1 .0 24.9 66.6 50.1 562.0 6.3 .0 8.3 .5 21.3 9.9 3.3 .0 25.1 9.0 15.0 98.7 17.7 .0 147.2 4.1 32.3 .0 2.7 .0 35.9 34.4 49.0 323.3 5.4 1.0 1.6 .2 .0 .0 3.0 1.0 .0 12.3 12.3 17.0 135.1 4.0 87.5 15.2 2.7 .0 17.1 42.2 16.1 349.7 1.1 .0 .0 2.1 .0 .0 3.2 .0 .0 .0 2.1 .0 .0 2.1 1.1 .0 .0 .0 .0 .0 1.1 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 1.6 .0 .0 1.7 1.1 .0 .0 3.8 .0 .0 5.0 6125.2 2762.5 3362.7 764.9 935.3 6295.7 • • • • - • • o o o o o o o o o o o 0 2 .2 .o .o 1.3 58.9 .0 6.5 .0 .0 40.0 .0 23.0 .0 .0 .0 92.2 222.1 fi 1/ All data are on a fully consolidated basis and cover 197 U.S. banki ng organizations. 2/ The data in the table cover only cross-border and non-local currency lending. These result from a U.S. hank's office in one country lending to residents of another country or lending in a curre ncy other than that of the borrower's country. 3/ In addition to the lending covered in the tables, hanks reported $95.8 billion in local currency loans and other claims and $68.0 billion in local currency liabilities held by their forei gn offices on residents of the country in which the office was located (e.g., Deutsche Mark loans to German residents booked at the German branch of the reporting U.S. hank). These types of local currency assets are excluded from the data in the tables. 4/ These columns show the amount owed to U.S. hanks by borrowers resid ing in one country that is guaranteed by residents of another country. The guarantor can he a government entity, a bank, or a private non-hank entity. Amounts owed U.S. banks by a branch in the reported country, where the head office of the borrowing hank is outside the reported country, are treated as being guaranteed and are included in column 2. 5/ Includes amounts borrowed by the foreign branches of banks headq uartered in the reported country. Also, includes guarantees and similar instruments issued by the reported country's hanks that cover repayment of borrowing by non-residents. 6/ Amount guaranteed by non-hank entities in the repor _ ted country that cover amounts owed U.S. hanks by borrowers locat,Pd outside of the reported country (e.g., a guarantee issued by a German company to cover a U.S. hank horrlwing by its Relgian subsidiary would be reported in this column on the German country line). The total capital of the reporting hanks, including equity, subordinat ed dehentures, and resPrvos flr loan losses is: all reporting banks $101.9 billion: nine money center hanks S40.7 billion: fifteen other large hanks 100.0 billion; and all other reporting hanks $41.2 billion. The total assets of the reporting banks are: all reporting hanks , $1,470 billion: nine money center hanks, 3616 billion; fifteen other large hanks $279 billion; and all other reporting banks $575 billion. r https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis LENDING TO LESS DEVELOPED NATIONS: ITEM II, PART I TOTAL ADJUSTED CLAIMS ON FOREIGN BORROWERS OF 24 LARGE U.S. BANK LENDERS (Dollars in Millions) Organizations Total Adjusted 1/ Claims 9 Largest $187,540.5 Next 15 Total 63,572.8 $251,113.3 As of 9-30-85 1/ Claims are adjusted to reflect guarantees by parties _ in other countries, including the United States. Source: Federal Reserve Board 63 EXPOSURES OF THE TOP 24 U.S. INTERNATIONAL LENDERS TO SELECTED LDCs (1) (as of 9/30/85 - Millions of $) Citicorp. BankAmerica Corp. Chase Manhattan Corp. Manufacturers Hanover Corp. Chemical NY Corp. J.P. Morgan Co., Inc. Bankers Trust N.Y. Corp. First Chicago Corp. Continental Illinois Corp. First Interstate Bankcorp Mellon National Corp. Irving Bank Corp. Security Pacific Corp. Wells Fargo Co. Marine Midland Banks Bank of New York RepublicBank Texas Commerce Bancshares Bank of Boston InterFirst Corp. Republic N.Y. Corp. NBD Bancorp Crocker National Corp. First City Bancorp (1) 825 1,345 808 364 232 , Brazil 3,339 2,674 2,595 1,969 1,448 1,959 858 816 466 530 497 384 572 580 657 272 248 327 214 152 181 Chile 688 Mexico 2,822 2,730 1,673 1,672 1,458 1,160 1,271 885 561 741 461 363 520 518 362 256 270 301 Nigeria Philippines 1,386 249 262 184 163 As reported on the publicly available "Country Exposure Information Report" (FFIEC 009a) for 9/30/85. Banks report their exposure to individual countries on a confidential basis and, except for those exposures which exceed the lesser of 1 percent of total assets or 20 percent of primary capital, they are not subject to public disclosure. The absence of an amount in any column indicates that the bank's outstandings to that country (if any) do not meet the threshold for disclosure. Reported amounts are claims outstanding (excluding local currency claims), after adjustmen t for third country guarantees. Crt Source: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Federal Reserve Board and Comptroller of the Currency Venezuela 1,458 1,271 1,015 720 320 462 268 301 G3d013A30 SS31 Argentina . LENDING TO LESS DEVELOPED NATIONS: ITEM III 1 DEBT RESCHEDULINGS SINCE 1980 ARGENTINA _ Rescheduling of $9.9 billion in 1982-85 puhlic sector maturities. (Terms: 10 years with 3 years grace) _ Rescheduling of $3.5 billion in 1984-85 private sector maturities through the issuance of government promissory notes. Notes are used to either repay the private debt, resulting in a public sector obligation or guarantee the private sector obligation. (Terms: 10 years with 3 years grace) _ Rescheduling of $5 billion in 1982-83 private sector maturities through the issuance of government promissory notes or bonds. Notes and bonds were used in the same manner as above. (Terms: 5 years with 3 years grace) March 1986 _ Agreement in principle reached to reschedule $6.1 billion in 1985 public and private sector maturities. $9.7 billion in 1986 maturities will be extended for one year and included in an anticipated multi-year rescheduling in early 1987. The signing of this refinancing is expected by mid-year. (Terms: 7 years with 5 years grace) January 1984 - Rescheduling of $5 billion in 1984 public and private sector maturities. (Terms: 9 years with 5 years grace) February 1983 - Rescheduling of $4.9 billion in 1983 public and private sector maturities. (Terms: 8 years with 2 1/2 years grace) November 1985 _ Rescheduling of $6 billion 1985-87 public and private sector maturities. (Terms: 12 years with 6 years grace) July 1983 - Rescheduling of $3.4 billion in 1983-84 public and private sector maturities. (Terms: 8 years with 4 years grace) August 1985 November 1982 BRAZIL CHILE https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 65 LI LENDING TO LESS DEVELOPED NATIONS: ITEM III a MEXICO March/August 1985 - Rescheduling of $43.7 billion in 1985-90 public sector maturities. Includes $23.6 billion in 1987-90 public sector maturities previously rescheduled in August 1983. (Terms: 14 years with 1 year grace) August 1983 - Rescheduling of $23.6 billion in August 1982 to December 1984 public sector maturities. (Terms: 8 years with 4 years grace) May 1983 - Under an institution established by the Government (FICORCA), approximately $12 billion of a total $18 billion in private sector debt has been registered. FICORCA provides foreign exchange at preferential rates to facilitate debt servicing in the private sector, assuming the borrower reaches a rescheduling agreement with its creditor banks. (Terms: 6-8 years with 3-4 years grace) - Rescheduling of $1.8 billion in short-term trade transactions. (Terms: 3 years with 6 months grace) - Rescheduling of $5.8 billion in October 1983 to December 1986 public and private sector maturities. (Terms: 10 years with 5 years grace) - Rescheduling of $20 billion in 1983-88 public sector matures. (Terms: 12 1/2 years with no grace) NIGERIA July/September 1983 PHILIPPINES VENEZUELA February 1986 In Process Source: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Since early 1984, approximately $7 billion in private sector debt has been registered with RECADI, qualifying for preferential exchange to service debt. This is conditioned on a rescheduling agreement between the borrower (Terms: 7 years with 2 and creditor I. years grace) IMF data, summarized and updated by OCC. 66 .•• Of GOVER•• .• BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, 0. C. 20551 RA L RS April 2, 1986 PAUL A. VOLCKER CHAIRMAN The Honorable William L. Armstrong United States Senate 20510 Washington, D.C. Dear Senator Armstrong: Thank you for your letter of March 26 in which you endorsed and urged rapid implementation of the program for assisting farm banks and their customers that was outlined in the joint statement issued by the Federal Reserve, the OCC and the FDIC when they appeared before the Senate Committee on Banking, Housing and Urban Affairs on March 11. I am pleased to report that on the day the joint statement was issued, our Reserve Banks were instructed by phone to generally conform their practices and procedures to the policies outlined therein. Moreover, late last week, after legislative action to codify the program appeared to have been delayed for at least several weeks, a letter was sent to the officers in charge of supervision and regulation at the Federal Reserve Banks to provide them with written guidelines to be followed in implementing these policies. A copy of this letter is enclosed. You will note that the letter directs the Reserve Banks to employ the same set of policies in supervising energy banks as farm banks. This inclusion of energy banks was agreed to by all three banking agencies in response to the wishes expressed by many members of Congress. Sincerely, S/Paul A. Volc,ker Enclosure IDENTICAL LETTERS ALSO SENT TO THE ATTACHED LIST. FS:pte (V-85, 86-1641) bcc: Fred Struble Mrs. Mallardi (2) ./ https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3:5 Senators: William L. Armstrong David L. Boren Edward Zorinsky Jesse Helms James A. McClure Nancy Landon Kassebaum Steven D. Symms Howell Heflin Don Nickles Arlen Specter Charles E. Grassley Mitch McConnell Dave Durenberger Donald W. Riegle, Jr. Gary Hart Strom Thurmond Jeremiah Denton Rudy Boschwitz Mack Mattingly Paul Simon Orrin Hatch Phil Gramm John Warner David Pryor Bob Kasten Mark Andrews Al Simpson Slade Gorton John Danforth Sam Nunn Paula Hawkins Jim Abdnor Bob Dole https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 0 WILLIAM L. ARMSTRONG COLORADO 804RD OF ¶Unitd,tatts RS or ;OVERNO THE Ernate FEDERAL RESERVE SYSTEM 1986 MAR 28 WASHINGTON, DC 20510 March 26, Mr. Robert L. Clarke, Comptroller of the Currency 1986 AM 10: 54 OFFICE. RECEIVED r THE CHAIRMAN Mr. Paul Volcker, Chairman, Federal Reserv e Board Mr. L. William Seidman, Chairman, Federal Deposit Insurance Corp. Mr. James A. Baker, Secretary of the Treasu ry Mr. Richard E. Lyng, Secretary of Agriculture Gentlemen: On March 11 the Senate Banking Committee was presented with a Joint Statement of the Federal Reserve Board, the FDIC, and the office of the Comptroller General which outlined changes in regulatory policies toward agricultural lenders. The purpose of this joint letter is to endorse the objectives of the joint statement, to urge the agencies with regulatory authority to move as rapidly as possible to implement these new regulatory policies, and to notify all banking institutions of the policy changes that can be utilized for the purpose of restructuring agricultural debt. Lending decisions are now being made for the 1986 growing season and agricultural lenders need the flexibility that the new regulatory climate would afford if they are to be able to avoid unnecessary foreclosures. Prospects for legislation to codify the principles set forth in the joint statement appear to be several weeks away, so that it now appears that modification of regulations within existing authority offers the best means for dealing with the immediate credit decisions for the current growing season. Sincerely, Wil lam L. Armstrong Daid L. Boren https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mr. Robert L. Clarke, Mr. Paul Volcker, Mr. L. William Seidman, Mr. James A. Baker, Mr. Richard E. Lyng March 25, 1986 Page 2 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2 ;1: ( eit•tst.t. ames A. McClure a31A.4 . 1 Nan y Landon Kassebaum Gary Hart Strom Thurmond enton Don Nickles Adirk Vb. /.. Rud Boschiwitz Ma Mat ingly • Paul Simol • Mitch McConnell Dave Durenberger Orrin Hatch Phil Gramm Mr. Robert L. Clarke, Mr. Paul Volcker, Mr. L. Willi am Seidman, Mr. James A. Baker, Mr. Richard E. Lyng March 25, 1986 Page 3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis John Warner John Danforth Sam Nunn • ataet. Bob Kasten ews Jim Abdnor at, Iiav, Al Simpson Slade Gorton Bob Dole .0f G°Ve • I BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, O. C. 20SSI 4 April 2, 1986 PAUL A. VOLCKER CHAIRMAN The Honorable Pete V. Domenici United States Senate Washington, D.C. 20510 Dear Senator Domenici: Thank you for your communication in which you endorsed and urged rapid implementation of the program for assisting farm banks and their customers that was outlined in the joint statement issued by the Federal Reserve, the OCC and the FDIC when they appeared before the Senate Committee on Banking, Housing and Urban Affairs on March 11. I am pleased to report that on the day the joint statement was issued, our Reserve Banks were instructed by phone to generally conform their practices and procedures to the policies outlined therein. Moreover, late last week, after legislative action to codify the program appeared to have been delayed for at least several weeks, a letter was sent to the officers in charge of supervision and regulation at the Federal Reserve Banks to provide them with written guidelines to be followed in implementing these policies. A copy of this letter is enclosed. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis You will note that the letter directs the Reserve Banks to employ the same set of policies in supervising energy banks as farm banks. This inclusion of energy banks was agreed to by all three banking agencies in response to the wishes expressed by many members of Congress. ly, Si ncere Notchet PaJI S Enclosure FS:DJW:pte (Per telephone conversation.) bcc: Fred Struble Mrs. Mallardi (2) BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 April 2, 1986 PAUL A. VOLCKER CHAIRMAN The Honorable Michael L. Strang House of Representatives 20515 Washington, D.C. Dear Mr. Strang: Thank you for your letter of March 26 in which you endorsed and urged rapid implementation of the program for assisting farm banks and their customers that was outlined in the joint statement issued by the Federal Reserve, the OCC and the FDIC when they appeared before the Senate Committee on Banking, Housing and Urban Affairs on March 11. I am pleased to report that on the day the joint statement was issued, our Reserve Banks were instructed by phone to generally conform their practices and procedures to the policies outlined therein. Moreover, late last week, after legislative action to codify the program appeared to have been delayed for at least several weeks, a letter was sent to the officers in charge of supervision and regulation at the Federal Reserve Banks to provide them with written guidelines to be followed in implementing these policies. A copy of this letter is enclosed. You will note that the letter directs the Reserve Banks to employ the same set of policies in supervising energy banks as farm banks. This inclusion of energy banks was agreed to by all three banking agencies in response to the wishes expressed by many members of Congress. Sincerely, S Paul A. Yolcker Enclosure https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis IDENTICAL LETTER ALSO SENT TO CONG. HANK BROWN. FS:pte (V-86, 86-1642 & 86-1643) bcc: Fred Struble Mrs. Mallardi (2) MICHAEL L. STRANG r 3o DISTRICT, COLORADO WASHINGTON OFFICE: Room 1331 LONGWORTH HOUSE OFFICE BUILDING 202-225-4761 INTERIOR AND INSULAR AFFAIRS COMMITTEE SUBCOMMITTEES ENERGY AND THE ENVIRONMENT PUBLIC LANDS WATER AND POWER RESOURCES SELECT COMMITTEE ON NARCOTICS ABUSE AND CONTROL DISTRICT OFFICES: 228 SOUTH UNION AVENUE PUEBLO, CO 81003 303-543-7572 Congref‘cs of tbe Inittb tate55 30ousit of Repre5Sentatitio: i,r141 assbington, C 20515 March 26, 1986 FEDERAL BUILDING 400 ROOD AVENUE Room 126 GRAND JUNCTION, CO 81501 303-242-2400 835 SECOND AVENUE Room 138 WEST BUILDING DURANGO, CO 81301 303-259-5477 Mr. Robert L. Clarke Comptroller of the Currency Mr. Paul Volcker Chairman, Federal Reserve Board Mr. L. William Seidman Chairman, Federal Deposit Insurance Corp. The Honorable James A. Baker Secretary of the Treasury The Honorable Richard E. Lyng Secretary of Agriculture Gentlemen: We are writing to urge you to implement several immediate changes in regulatory policy affecting the farm credit crisis, as proposed in your joint statement to the Senate Banking Committee on March 11, 1986. As you recall, your proposal set forth a joint effort by the Federal Reserve Board, the FDIC and the Office of the Comptroller General to ease regulatory policy constraints on private commercial banks in three basic areas: (1) minimum capital requirements; (2) forbearance through debt restructuring, and (3) automatic charge-off of restructured loans. We believe implementation of these actions will make available immediate and much needed relief on the part of private commercial banks in working with their farm customers. Lending decisions are now being made for the 1986 growing season and agricultural lenders need the flexibility that the new regulatory climate would afford if they are to be able to avoid unnecessary foreclosures. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis F =MEM , • • ... -2 - This action is needed now because legislation to address these and related issues set forth in your joint statement appear to be several weeks away. Since the planting season is upon us, the modification of regulations within existing authority offers one of the best means of dealing with the immediate credit decisions for the current growing season. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis With best wishes, incerely, • Hank Brown Member of Congress Michael L. Strang Member of Congress BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. E. 20551 April 1, 1986 The Honorable Frank Annunzio Chairman Subcommittee on Consumer Affairs and Coinage Committee on Banking, Finance and Urban Affairs House of Representatives Washington, D.C. 20515 Dear Chairman Annunzio: Thank you for your letter of February 20, addressed to Chairman Volcker, regarding an inquiry you received from Mrs. Muriel Levitt concerning the delayed redemption of her savings bond by the Federal Reserve Bank of Chicago. We contacted the Chicago Reserve Bank and Mrs. Levitt's bank, Skokie Trust and Savings, and determined that Mrs. Levitt's transaction was first received by the Chicago Reserve Bank on December 3, but that it had to be returned to her bank on December 16 because the transaction lacked Mrs. Levitt's bank-certified signature on the back of the bond. Mrs. Levitt's bank resubmitted the transaction on January 10 and the Chicago Reserve Bank issued her redemption check on February 12. We regret the processing delays which occurred at the Chicago Reserve Bank in December and in January-February. These delays were due primarily to heavy savings bond volume and problems with the Reserve Bank's automated savings bonds processing system. The Reserve Bank is currently in the process of replacing that system; the new system should alleviate backlog problems. We regret the delays being experienced at the Chicago Reserve Bank. Please assure Mrs. Levitt that every effort is being made to deal with this problem in the best, most costeffective manner possible. Please also advise Mrs. Levitt that, because of the problem she has already experienced, Mr. Warren Potts, the Assistant Vice President responsible for savings bonds at the Chicago Reserve Bank, has promised special handling for the rest of her savings bonds if she or her bank will forward them to his attention at the Chicago Reserve Bank. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Honorable Frank Annunzio Page Two I hope this information proves helpful. know if I can be of any further assistance. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Please let me Sincerely, S/Conalcl, J. Winn Donald J. Winn Assistant to the Board DDeC:CO;vcd (1/V-58, 86-931) bcc: Mr. Warren Potts (FRBk. of Chicago) Messrs. Allison, McEntee, Bennett, Manypenny; Ms. DeCorleto Mrs. Mallardi Action assigned Mr. Allison FRANK Ai NUNZIO, ILLINOIS, CHAIRMAN FFRNAND J. ST GERMAIN. RHODE ISLAND HENcY B. GONZALEZ, TEXAS PARAEN J. MITCHELL, MARYLAND STEPHEN L. NEAL, NORTH CAROLINA DOUG BARNARD, JR , GEORGIA BRUCE A. MORRISON, CONNECTICUT U.S. HOUSE OF REPRESENTATIVES JOHN HILER, INDIANA CHALMERS P WYLIE, OHIO THOMAS J. RIDGE. PENNSYLVANIA TOB I ROTH, WISCONSIN JIM KOLBE, ARIZONA NINETY-NINTH CONGRESS SUBCOMMITTEE ON CONSUMER AFFAIRS AND COINAGE CURTIS A. PRINS, STAFF DIRECTOR OF THE COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS TELEPHONE:(202) 226-3280 ROOM 212 HOUSE OFFICE BUILDING ANNEX No. 1 WASHINGTON. DC 20515 February 20, 1986 Honorable Paul A. Volcker Chairman Board of Governors Federal Reserve System 20th Street and Constitution Avenue, N.W. Washington, D.C. 2.0551 Dear Mr. Chairman: Enclosed is a copy of a letter I received from my constituent, Mrs. Muriel Levitt, regarding a problem she is having cashing a United States Series E Savings Bond. The bond was sent to the Federal Reserve Bank of Chicago by Skokie Trust and Savings at the end of November, 1985. To date, Mrs. Levitt has not received a satisfactory response to her inquiries. I would appreciate your investigation and report on the status of Mrs. Levitt's savings bond. With every best wish, Sincerely, Frank Annunzio Chairman Enclosure https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • RECEIVED 71.ei< fib .1 8 1986 oei&-et-ti Lit ort.:1 -r - ki,:;M9).a rirc--ce-t/ elyruci az4-1 )(.4, Le AG4ir) r .. CI" S , Z NJA( 0. D. z6er,e_:., (";2 7,/qi-K 2 2i2 /7 .4(26 c--/L_03 cietti) ez-te, sea • e i t / 4 2 ; 2 i)z2-1 l e zx t ,s 71 1, 2 z t I : , 4 4 0 1 ; , e z i , 71, e 4 e z2/ a ke,‹„2?„,,e, ,43_4_,Li ok,at ,ff-r-f-trv 1.,4-ef lotz, e,/1Z1-/ 40,et, -4.-e-z;Atf lejz 4 n " 2 7 4 . 0 44 c-e 2 a ,---1 a swjak. 7.-4-;_t.,(/ re. kAt,. if/.44,J . 9 p 2 t4 , ei (1. d 4 : oe,L,t1Itz- 4 a/ 4./A j de4,--c/ t-e-e-oto fadi ze 12 ce, --,:rjet.?../ -CAT/ a 71.1 ev-a4c-e https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ' -- 66 01 A 1-0-1(-€ (- G-c ••1 , - I 1(, dz., -1( dck_e- ,f1,4 LA" 11-?47t-27./ ef-ed-f"-f _ A ie1 14 x-41 tftvzz, • C A p --e/2 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 6144t-iirA/ - x,Z, / f /7ç 44 01.1ti.44 - r7 -de4 (y4g,ki cz, a https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, O. C. 20551 April 1, 1986 PAUL A. VOLCKER CHAIRMAN The Honorable Jake Garn Chairman Committee on Banking, Housing and Urban Affairs United States Senate 20510 Washington, D.C. Dear Chairman Cam: Thank you for your letter of March 27, urging that the Federal Reserve put in place, at the earliest possible date, the program for assisting farm banks and their customers that was outlined in the statement issued jointly by the Federal Reserve, the OCC and the FDIC at your Committee's hearing on March 11. I am pleased to report that on the day the joint statement was issued, our Reserve Banks were instructed by phone to generally conform their practices and procedures to the policies outlined therein. Moreover, late last week, after legislative action to codify the program appeared to have been delayed for at least several weeks, a letter was sent to the officers in charge of supervision and regulation at the Federal Reserve Banks to provide them with written guidelines to be followed for implementing these policies. A copy of this letter is enclosed. You will note that the letter directs the Reserve Banks to employ the same set of policies in supervising energy banks as farm banks. This inclusion of energy banks was agreed to by all three banking agencies in response to the wishes expressed by many members of Congress. Sincerely, S/Paul A. Volcker Enclosure (Ltr. dtd. 3/28/86 to Officers in Charge of Supervision at Each F.R. Bank from Mr. Wm. Taylor) FS:pte (V-84, 86-1640) bcc: Mr. Struble Mrs. Mallardi (2)' JAKE GARN, UTAH, CHAIRMAN JOHN HEINZ. PENNSYLVANIA WILLIAM L ARMSTRONG. COLORADO ALVJNSE M D'AMATO, NEW YORK SADE GORTON. WASHINGTON MACK MATTiNGLY, GEORGIA CHIC HECHT, NEVADA PHIL GRAMM, TEXAS WILLIAM PROXMIRE, WISCONSIN ALAN CRANSTON. CALIFORNIA DONALD W RIEGLE, JR.. MICHIGAN PAUL S SARBANES. MARYLAND CHRISTOPHER J DODD. CONNECTICUT ALAN J DIXCN. ILLINOIS JIM SASSER, TENNESSEE M DANNY WALL. STAFF DIRECTOR KENNETH A McLEAN, MINORITY STAFF DIRECTOR https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis DilARO OF OVER NOR re. FEDERAL United states estnuIkk. RESERVE SYSTEM COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS WASHINGTON, DC 20510 March 27, 1986 411, MR 28 AK 11: 02 RECEIVED OFFICE OF THE CHAIRHAli Honorable Paul A. Volcker Chairman Federal Reserve Board 20th & Constitution Ave. N.W. Washington, D.C. 20551 Dear Chairman Volcker: As you recall, I wrote you on December 20, 1985 requesting that your agency do an analysis of the effect of the farm crisis on financial institutions which are prima rily engaged in agricultural lending. Subsequently, we have had numerous meetings and the Banking Committee held two days of hearings specifically on this important matter. At the March 11, 1986, hearing, you and the other bank regulators issued a joint statement outlining actions the agencies thought appropriate to ease the transition pains experienced by both agricultural and energy institutio ns and their borrowers. Your suggestions included, among other things, a program of capital forebearance and implementation of F.A.S. 15, a method of accounting designed to encourage the restructuring of loans. Those recommendations would go a long way to ease the strains while maintainin g an adequate supervisory framework and the credibility of regulatory and public financial statements. As we worked toward a legislative solution, your recommendations were refined as a result of continued imput from interested parties. Earlier this week the Committee unanimously reported a measure which mirrors and codifies your final suggestions. Passage of the legislation would ensure quick and complete implementation of the assistance program. Unfortunately, uncooperative members of the Senate prevented consideration of this much needed legislation. Therefore, I urge you at the earliest possible date to put in place a program that will achieve the objectives you outlined on March 11. I look forward to continue working with you on this matter. Sincerely, Ja Garn Cha rman JG:mdk % . ow BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 PAUL A. VOLCKER April 1, 1986 CHAIRMAN The Honorable Augustus F. Hawkins Chairman Committee on Education and Labor House of Representatives Washington, D.C. 20515 Dear Chairman Hawkins: Thank you for the opportunity to comment on H.R. 1398, the proposed Income and Jobs Action Act of 1985. I want to assure you that the Federal Reserve shares many of the goals of the sponsors of this bill. Economic policies that foster the creation of jobs for all persons willing and able to work became an explicit objective of Federal Reserve policy with the passage of the original Employment Act of 1946 and was reaffirmed in the Full Employment and Balanced Growth Act of 1978. As a key sponsor of that legislation, you, of course, know that it also mandates that the Federal Reserve promote a range of objectives--maximum employment, reasonable price stability, moderate long-term interest rates, increased real income, balanced economic growth, adequate productivity, and achievement of an improved trade balance. In our semiannual reports to the Congress, we have stressed on many occasions the need to strike some balance among these objectives, with our overall goal to sustain economic growth while maintaining progress toward price stability. Certainly, our current progress against inflation has taken considerable time and has resulted in strains on some sectors of the economy. I would also note that some sectors have also been affected by continuing large budget and trade deficits. Despite continuing strains and imbalances the reduction in inflation has, I believe, brightened prospects for the nation's longer run growth and our ability to reduce unemployment. Thus, one of my concerns regarding your bill is the possibiLity that some of its individual proposals would work to limit future progress against inflation by lowering productivity and by raising costs and prices. For example, the staged reduction in paid worktime without loss in weekly earnings and full fringe benefits for part-time work would raise business costs https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis % re" The Honorable Augustus F. Hawkins Page Two and exacerbate inflationary pressures unless accompanied by improved productivity performance. More broadly, the public and private planning efforts envisioned by the legislation also could prove costly if they were to reduce significantly the flexibility of business and to constrain private decisionmaking. At the same time, I recognize that macroeconomic policies alone may not quickly be able to reduce unemployment to the very low levels that the 1978 Act set as its goals. In our dynamic economy, technological advance demands new skills from the workforce, geographical shifts in jobs are ongoing, and the competitive position of many of our industries in the world economy has changed. Typically, adjustment of labor and capital to such developments does not occur totally smoothly. Thus, to the extent that programs along the lines of those you propose could ease these transitions, they could be useful in reducing some of the unemployment of resources that develops from structural change. Nevertheless, even in the case of programs designed to assist in relocation, retraining of workers, and conversion of idled facilities, the potential benefits must be weighed against the costs. Section 6 of the proposed bill does recognize the need to free up federal funds from other areas or to assure that the programs undertaken generate sufficient revenues to pay for themselves. Although I applaud your efforts to make the Conversion Planning Fund "deficit-neutral," I am skeptical about our ability to project the dollar value of the benefits with any precision. Again, I want to reaffirm the Federal Reserve's commitment to achieving the goals set out in the Employment Act and the Humphrey-Hawkins Act. However, as my comments indicate, I have serious concerns that some of the specific provisions of this bill may not prove to be effective in promoting balanced economic growth and could have adverse inflationary consequences. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Sincerely, SIP_aul A. Volcker JZ:JZ:CO:SMR:vcd/pte (V-67, 86-1268) bcc: J. Zickler J. Zeisel R. Walls Mrs. Mallardi (2) , • 4 ek041042.0*Z. CtotOtk. 0 • 4 400 Amt•C•4:2&.• MINORITY MEMBERS: M•JORITY MEMBERS rus F. HAWKINS, CALIFORNIA, CI4A1.-MAIM WILLIAM D FORD, MICHIGAN JOSEPH M GAYDOS. PENNSYLVANIA WILLIAM (BILL) CLAY, MISSOURI MARIO BIAGGI, NEIN YORK AUSTIN J. MURPHY. PENNSYLVANIA DALE E. KILDEE. MICHIGAN PAT YVILLIAMS, MONTANA MATTHEW G. MARTINEZ. CALIFORNIA MAJOR R. OWENS. NEW YORK FREDERICK C BOUCHER, VIRGINIA CHARLES A. HAYES. ILLINOIS CARL C. PERKINS. KENTUCKY TERRY L BRUCE, ILLINOIS STEPHEN J. SOLAR/. NEW YORK MERVYN M DYMALLY. CAUFORNIA DENNIS E ECKART, OHIO TIMOTHY J. PENNY, MINNESOTA CHEIT6R 6. ATKINS. MASSACMLISETTi https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis COMMITTEE ON EDUCATION AND LABOR u.s. HOUSE OF REPRESENTATIVES JEFFORDS, VERMONT JAMES WILLIAM F. GOODLING, PENNSYLVANIA E. THOMAS COLEMAN, MISSOURI THOMAS E PETRI, WISCONSIN MARGE ROUKEMA. NEW JERSEY STEVE GUNDERSON, WISCONSIN STEVE BARTLETT. TEXAS ROD CHANDLER, WASHINGTON THOMAS J. TAUKE, IOWA JOHN R McKERNAN, JA., MAINE RICHARD K. ARMEY. TEXAS HARRIS W FAWELL ILLINOIS PAUL B. HENRY, MICHIGAN 2181 RAYBURN HOUSE OFFICE BUILDING WASHINGTON, DC 20515 February 28, 1986 Mr. Paul A. Volcker Chairman Board of Governors of the Federal Reserve System Constitution Avenue and 21st Street 20551 Washington, D.C. Dear Mr. Volcker: Enclosed are three copies of H.R. 1398, the Income and Jobs Action Act of 1985. The Committee would appreciate havirg the views of your Agency with regard to this legislation, submitted in triplicate, at the earliest opportunity. With kindest regards, Sincerely, Augustu Chairman AFH:clf Enclosures . Hawkins TELEPHONES: MAJORITV—(202) 225-4527 MINORFTY—(202) 225-3725 1 • t.. •. '"*......4atyt +0'1" _ • at https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 99TH CONGRESS 2D SESSION H.R 1398 H R. and a full employment society by To promote genuine and sustainable recovery ment Act of 1946 and the Full extending and fully implementing the Employ Employment and Balanced Growth Act of 1978. IN THE HOUSE OF REPRESENTATIVES MARCH 5, 1985 Mr. CONYERS, Mr. WEISS, Mrs. COLMr. HAYES (for himself, Mr. HAWKINS, , Mr. SAVAGE, Mr. DELLUMS, LINS, Mr. CLAY, Mr. OWENS, Mr. STOKES following bill; which was referred and Mr. EVANS of Illinois) introduced the Labor, Armed Services, Governjointly to the Committees on Education and an Affairs, and Ways and Means ment Operations, Banking, Finance and Urb JULY 15, 1985 , MT. RANGEL, Mr. KILDEE, Mr. nois Illi Of Y GRA MT. : sors spon al tion Addi KAPTUR, Mr. FAZIO, Mr. CROCKLELAND, Mrs. BURTON of California, MS. LER of California, Mr. KOLTER, ETT, Mr. MARTINEZ, Mr. TOWNS, Mr. MIL Mr. DYMALLY, and Mr. PERMr. BERMAN, Mr. MINETA, MT. MITCHELL, KINS JANUARY 21, 1986 MT. TRAFICANT, Mr. MURPHY, MT. Additional sponsors: Mr. LEHMAN of Florida, gton, MTS. BOXER, Mr. DIXON, FROST, Mr. WHEAT, Mr. LOWRY Of Washin and Mr. MOAKLEY A BILL ry and a full employTo promote genuine and sustainable recove enting the Emment society by extending and fully implem ment and Balployment Act of 1946 and the Full Employ anced Growth Act of 1978. t.r.s.aseiL . •".r\Let•'ilia'^! • ,,,,44,-.164•••••• 2 1 Be it enacted by the Senate and House of Representa- 2 lives of the United States of America in Congress assembled, SHORT TITLE 4 SECTION 1. This Act may be cited as the "Income and 5 Jobs Action Act of 1985". 6 7 THE RIGHT TO EARN A LIVING SEC. 2. (a) Every adult American able and willing to 8 earn a living through paid work has the right to a free choice 9 among opportunities for useful, productive and fulfilling paid 10 employment (part- or full-time) at decent wages or for self11 employment. 12 (b) All Federal departments, agencies, and commissions 13 shall plan and carry out their policies, programs, projects, 14 and budgets in a manner that will contribute to establishing 15 and maintaining conditions under which all adult Americans ••• https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 16 may freely exercise this right. 17 (c) Neither the Federal Reserve System nor any Federal 18 department, agency, or commission may directly or indirectly 19 promote recession, stagnation, or involuntary unemployment 20 as a means of reducing wages and salaries or inflation. 21 THE EIGHT TO AN ADEQUATE STANDARD OF LIVING OF 22 AMERICANS UNABLE TO WORK FOR PAY 23 SEC. 3. (a) Every adult American unable to work for 24 pay has the right to an adequate standard of living that rises 25 with increases in the wealth and productivity of the society. •HI 1398 SC https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3 1 (b) No adult American shall be judged unable to work 2 merely because of the unavailability of suitable paid employ3 ment opportunities at a given time or place or because of the 4 lack of previous employment. 5 (c) In the absence of such opportunities and until such 6 opportunities can be provided under section 2, an adult 7 American able and willing to work for pay shall be provided 8 with whatever income is required to maintain a moderate 9 level -of living, as defined by the Bureau of Labor Statistics. 10 11 CONVERSION TO EXPANDING CIVILIAN SECTORS SEC. 4. (a) In the first annual message at the beginning 12 of the first session of the Congress after the enactment of this 13 Act, the President shall include specific proposals for a Con14 version Planning Fund, to be administered by such agencies 15 as the President shall determine. 16 (b) The purpose of such Fund shall be to promote short- 17 and long-term plans for coping with declines in civilian or 18 military activities by developing specific policies, programs, 19 and projects (including but not limited to feasibility studies, 20 education, training on the job, and inducements for whatever 21 increased labor mobility may be necessary and desirable) for 22 the expansion of economic activities in sectors where a4ldi23 tional or improved goods or services are needed. 24 (c) In addition to such other funds as may be authorized, 25 such Fund shall include no less than 1 percent of the amount •B 1398 SC https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4 1 appropriated for military purposes during each subsequent 4 2 year. 3 LOCALLY BASED OVER-ALL PLANNING 4 SEC. 5. (a) Within six months after the date of enact- 5 ment of this Act and thereafter in each annual economic 6 report and budget message, the President shall transmit to Congress a staged program to create conditions under which 8 the rights set forth in sections 2 and 3 may be fully and freely 9 enjoyed and to set forth how the Fund created by section 4 10 may be most productively used. 11 (b) Such program shall be designed to prevent or coun- 12 terbalance undue concentration of Federal or corporate 13 power by fostering recovery and full employment planning 14 by 15 (1) town, city, county, and State governments and 16 their agencies in urban, suburban, and agricultural 17 areas of the country; 18 (2) small and large business enterprises; labor or- 19 ganizations and trade unions; the unemployed; non- 20 profit, voluntary, and cooperative organizations (includ- 21 ing neighborhood, tenant and home owners' associa- 22 tions and corporations); women; and racial and ethnic 23 minorities; 24 (3) broad-based local partnerships in which the 25 groups referred to in paragraphs (1) and (2) cooper- 26 ate— WI 1398 SC https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 5 eir areas, inth in s ed ne t me un ss se as to ) (A isure as well as le y ar nt lu vo r fo ed ne e th g in elud come, employment for goods, services, adequate in tivities; at good wages, and volunteer ac labor resources (B) to survey the supply of al, and technical on si es of pr , al ri ge na ma of and eting such needs; skills that might be used in me for obtaining l ia nt te po e th e yz al an to ) (C mbinations of prinecessary funds from various co due reliance on un t ou th wi s ce ur so ic bl pu d an vate 1 2 3 4 5 6 7 8 9 10 Federal funding; 11 future (through e th r fo s al go p lo ve de to ) (D 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and the year 2000) of their area; es conducted ti vi ti ac e th of t gh li e th in (E) ugh (D), to initiate ro th ) (A s ph ra ag ar bp su r de un that attain prompt high priority action projects rough both private th s al go ch su rd wa to ss re prog et and non-market and public agencies and mark processes. gned to promote condisi de be l al sh m ra og pr ch (c) Su imized by disct vi le op pe by t en rm we po em tions for more selfsalaries, fringe benes, ge wa , ng ni ai tr , ng ri hi in crimination erning race, nc co e ic ud ej pr of s si ba e th fits, or promotion on station in life, polit, on gi li re e, ag , er nd ge , nd ou ethnic backgr personal disability. ical or sexual orientation, or •B 1.196 SC 6 1 (d) Such program shall include, but need not be limited 2 to, general and specific policies and projects designed3 (1) to provide quick action through reductions in 4 real and nominal interest rates, voluntary work-sharing 5 arrangements, and a. program of private and public 6 works and services to use the abilities of the unem- 7 ployed in repairing and improving the Nation's infra- 8 structure of private industry, public facilities, human 9 services, and natural resources; 10 (2) to provide improved Federal incentives for 11 small and large business enterprises; labor organiza- 12 tions and trade unions; the unemployed; and non-profit, 13 voluntary, and cooperative organizations (including 14 neighborhood, tenant, and home owners' associations 15 and corporations), with the receipt of any Federal in- 16 centives by larger corporations conditioned on their 17 performance in living up to well-defined standards of 18 corporate responsibility, including the obligation regu- 19 larly to certify compliance with laws and regulations 20 governing working conditions, labor relations, affirma- 21 tive action, environmental protection, taxation, election 22 contributions, and bribery at home or abroad; 23 (3) to provide for Federal grants to promote cre- 24 ative initiatives by local and State governments and 0111 1398 SC -•••••••11.- https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • 7 ' p. • 1 their agencies in planning and budgeting for genuine 2 recovery and a full employment society; 3 (4) to promote staged reductions in paid working 4 time by reducing the average work week in manufac- '5 turing to no more than 35 hours without any cone- 6 sponding loss in weekly wages; L https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 7 8 (5) to vastly increase the opportunities for voluntary part-time employment with full fringe benefits; 9 (6) to take such other steps as may be needed to 10 cope with the threat of increased unemployment caused 11 by the increased use of technology; 12 (7) to provide for vastly improved education, 13 training, and retraining of managers, technicians, the 14 employed, and the unemployed; 15 (8) to prevent plant closings through all feasible 16 means (including conversion to other forms of produc- 17 lion and ownership) and provide standards (including 18 measures such as appropriate advance notice, termina- 19 tion payments, and extension of health benefits) for any 20 corporation planning to close, substantially reduce, or 21 relocate its operations; 22 23 24 (9) to promote conversion from military to civilian production; and (10) to control inflation. WM 13% SC 1 8 I• IMPLEMENTATION 1 2 SEC. 6. (a) As part of the annual program developed by 3 the President under section 5, the President shall transmit in 4 the annual economic report to Congress a short- and long5 range schedule for implementing the purposes of this Act. 6 (b) The implementation schedule shall include, but need 7 not be limited to8 (1) reductions in the military budget; 9 (2) recommendations for https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis revenues 10 through the reduction or elimination of wasteful tax ex- 11 penditures and other loopholes in the tax laws; 12 (3) reduction in interest payments on the Federal 13 debt by reductions in both real and nominal. interest 14 rates and Federal deficits; 15 •• increased 16 (4) recommendations for the appropriate use and direction of public and private pension funds; and 17 (5) the creation or promotion of private and public 18 development banks, particularly in neighborhoods and 19 other areas of high unemployment and poverty. 20 (c) The implementation schedule shall include, but need 21 not be limited to22 (1) the promotion of educational activities within 23 each State on locally-based overall planning, with spe- 24 cial attention to educational processes that promote 25 and use the creative abilities of small, medium, and •HR 1398 SC .0.11.111•1••••• • 9 1 2 uneme h t d n a s n o i t a labor organiz f o , s s e n i s u b e larg rative ore p o o c d n a y r a t n onprofit volu ployed, and of n ganizations; and ditions for n o c e h t g n i p o l eve timetables for d ) 2 ( 4 is Act. h t f o s l a o g y c i l o p in attaining the s s e r g o r p 5 ved in the l o v n i s e i c n e g a proposed by s y a l t u o y n A ) d ( 6 d in terms not e t n e s e r p e b l l a f this Act sh o n o i t a t n e m e l p 7 im ted with a u p m o c , s y a l t u o ut also of net b s y a l t u o s s o r g f 8 only o mploye l a n o i t i d d a t c mediate impa m i y n a f o n o i t 9 full estima ave in10 ment may h he number of t g n i c u d e r y b s reducing outlay ) 1 ( 11 on, public i t a s n e p m o c t n unemployme g n i v i e c e r e l p o e p 12 ithout necesw ( s t n e m y a p r e f ns e, and other tra c n a t s i s s a 13 rom imf g n i t l u s e r s y a reduced outl g n i d u l c n i ly ri sa 14 ty); and e f a s d n a h t l a e h ents in public m e v o r p 5 1 more inf o t l u s e r a s a eceipts increasing tax r ) 2 ( 16 ecurity and s l a i c o s o t t c e j ub earning income s s l a u d i v i d 17 rticulara p , s e s i r p r e t n e ore business m d n a s e x a t e m inco 18 stable, and e r o m , r e g r a l e s, earning th s e n i s u b l l a m s y l 19 ions of t i d n o c r e d n u e l l profits possib a t o t d e z i d i s b u s less 20 oyment. l p m e ll fu 21 0 3 •HR 1398 SC is. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis APR'1 loP h. 0. , Co-ittco o!, njt•:':tatcs • Jr. f'fairs lot IP accom4ncp i1t srlstlie. Act, I af!- tn Pfaytirel,vnts of the 1;nvPrnr4ent in tt). suDit tme Roard's ninth i,ylenteticn of its ihiHinistrativv ouriu r knnt.#61 unOer yPo.. Sincerely, S/Eaul_A. Wicker Irlentical letters also sent to: 9.6 JM:TB:sm President of the Senate - Georye Rush Speaker of the House of Representatives Thomas P. O'Neill, Jr. Chairman Glenn English, Subcommittee on Government Information, Justice, and kvicultore Committee on c,overnritent Operations House of Representatives Washinton, P.C. 205P1 David Durenberger, Chairman, Subcommittee on Intergovernmental Relations of Senate Comm. on Governmental Affairs Lawton Chiles, Ranking Minority Member, Subcommitee on Intergovernmental Relations, Committee on Governmental Affairs, U.S. Senate r I t ANNUAL REPORT TO CONGRESS ON THE GOVERNMENT IN THE SUNSHINE ACT FOR 1985 Board of Governors of the Federal Reserve System March 27, 1986 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Al_ I In I accordance with the Government in the Sunshine Act (5 U.S.C. §552b), the Board of Governors of the Federal Reserve System submits the following information to the Congress for 1985: (1) Meetings. (a) Meetings of the Board. -- Total number of open 22 Total number of closed 101 Total number of partially-closed Total number of meetings (b) 0 123 Meetings of the Committee on Employee Benefits. Total number of open 0 Total number of closed 1 Total number of partially-closed 0 _ Total number of meetings 1 (2) Reasons for closing or partially closing meetings. (a) Meetings of the Board -- Specific exemptions. Exemption https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis , Number of meetings 2 8 9(A)(i) 9(B) 1 10 3 1 2,8 4,8 8,9(A)(i) 8,9(A)(ii) 8,9(B) 9(A)(ii), 10 1 7 12 3 1 1 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -2Number of meetings Exemption (b) 2,4,8 2,6,8 2,8,9(A)(i) 2,8,10 4,6,8 4,8,9(A)(i) 4,8,9(A)(ii) 4,8,10 6,8,9(A)(i) 6,8,9(B) 6,8,10 8,9(A)(i), 9(A)(ii) 8,9(A)(i), 9B 8,9(A)(i), 10 2 2 7 1 2 6 1 2 1 1 1 1 3 1 2,458,9(A)(i) 2,458,9(A)(ii) 2,5,8,9(A)(ii) 2,8,9(A)(i), 9(8) 2,8,9(A)(i), 10 2,8,9(A)(ii), 9(8) 4,8,9(A)(i), 9(A)(ii) 4,8,9(A)(i), 9(8) 8,9(A)(1), 9(A)(ii), 9(B) 8,9(A)(i), 9(B), 10 3 1 1 1 2 1 1 4 2 1 2,4,6,8,9(B) 2,4,6,8,10 2,4,8,9(A)(i), 9(A)(ii) 2,4,8,9(A)(i), 9(B) 2,458,9(A)(i), 10 2,8,9(A)(i), 9(A)(ii), 9(B) 4,8,9(A)(1), 9(A)(ii), 9(B) 4,8,9(A)(ii), 9(B), 10 6,7,8,9(A)(ii), 9(B) 6,8,9(A)(i), 9(B), 10 1 1 2 1 1 1 1 1 1 1 2,4,6,8,9(A)(i), 9(8) 4,6,8,9(A)(i), 9(A)(ii), 9(B) 1 1 Committee on Employee Benefits -- Specific exemptions. Number of meetings Exemptions 2 1 Total 1 % https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis _ 3- (c) Policy regarding budget meetings, Congressional testimony, and briefings by staff. The Board's practice is to consider its budget and the budgets of the Federal Reserve Banks in open meetings. During 1985, the Board considered ten requests for testimony in closed session, based on the following exemptions: Number of Testimonies Exemption 2 3 1 3 1 8 9(A)(i) 9(A)(ii) 9(B) 9(B), 10 When exemptions are no longer applicable to testimony considered in closed session, the Board effectively opens the items to the public by making available a record of the proceedings, either in minutes or recorded form, through the Freedom of Information Office. In the case of the ten Congressional statements considered in closed session, six of the discussions have now been released in full to the public. The Act applies to "meetings," which are defined as certain deliberations that "determine or result in the joint conduct or disposition of official agency business." At times the staff briefs Board members at sessions that do not involve such deliberations. These sessions include, for example, the weekly economic briefing of the Board by the staff. (3) Description of litigation. No Sunshine Act litigation against the Board was initiated, conducted, or concluded during calendar year 1985. % • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4- (4) Use of notation voting. The Board uses a notation voting procedure on a limited basis, generally for routine, noncontroversial disposition. matters that require expedited Items handled by this procedure are distributed to each Board member for written vote and comment. Any Board member may refer a circu- lated item to the Board's meeting agenda if discussion is needed. Records of actions taken by the Board under notation voting and related background material are available through the Board's Freedom of Information Office in accordance with the Board's Rules Regarding Availability of Information. (5) Steps to provide meaningful public observation of open meetings. To help the public, those who attend the Board's open meetings receive copies of staff documents considered in connection with each agenda item, subject to the Freedom of Information Act, and they receive a descriptive agenda summarizing the issues to be discussed at each open meeting. The Board also provides a pamphlet explaining the applicability of the Sunshine Act to the Board's proceedings, as well as photographs of the Board members and charts of the Board members' seating arrangements at the Board Room table. After each meeting a representative of the Public Affairs Office is available to answer specific questions about the proceedings. Those unable to attend open meetings may hear a recording of the discussion in the Board's Freedom of Information Office, and they may order a copy of the recording for $5 per cassette tape. Under the Board's Rules Regarding Public Observation of Meetings, the Public Affairs Office handles requests to record or photograph open meetings. That Office granted all requests made during 1985. • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -5 _ (6) Public notice of agency meetings. (a) Methods of notification and location of notices. In addition to publishing notice in the Federal Register, the Board posts advance notices of meetings in the Board's Freedom of Information and Public Affairs Offices and in the Treasury Department's press room. The Board also sends copies to approximately 190 persons on its Sunshine mailing list and to the Associated Press city wire. invite the public to address All notices inquiries to the Board's Public Affairs Office, which can provide details about any meeting. The Public Affairs Office also provides recorded telephone announcements of (1) open meetings, and matters to be considered, seven business days before each meeting, and (2) any bank and bank holding company applications scheduled for a closed meeting, two business days before each meeting. changed advance and written If an open meeting is notice of the change is unlikely to be received, the Board's staff telephones media representatives who regularly attend such sessions and individuals known to have an interest in particular matters on the agenda. (b) Number of days of advance notice of meetings. The chart below indicates the number of days' advance notice that was given for all meetings of the Board other than meetings closed solely under expedited procedures. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -6January 1 - December 31, 1985 Number of Meetings Advance Notice 12 11 10 9 8 7 1 5 41 3 38 23 days days days days days days 3 Less than 7 days' notice Total 114 meetings In addition, 9 meetings were held solely under expedited procedures and were announced at the earliest practicable time: one was announced seven days before the meeting; two were announced two days before the meeting; four were announced the day of the meeting; and two were announced the day after the meeting. The Committee on Employee Benefits held one meeting, which was announced eight days in advance of the meeting. (7) Public interest considerations in opening or closing a meeting. In submitting nonexpedited matters to Board members for a vote on whether to close the meeting, the Board's staff makes a recommendation as to whether an item should be open or closed. This recommendation takes into consideration not only the applicability of Sunshine exemptions, but also a staff judgment about the extent to which the public interest would be served by an open meeting. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -7- The Board's regulation relating to expedited procedures (12 CFR 261b.7) identifies types of matters that ordinarily are discussed only in closed session. These examples were determined to be the proper subject of a closed session after full deliberation by the Board of all relevant considerations, including principally the public Any Board interest. member, immediately before the formal vote on whether to close a given meeting, may initiate a reexamination of the presumed basis for closing. (8) Release of transcripts, recordings and minutes of closed meetings. (a) Procedures for withholding transcripts, recordings or minutes. During any closed meeting of the Board, a separate vote is taken to authorize the withholding recordings or minutes of the meeting. of information from transcripts, Any withheld information is subse- quently reviewed to verify the applicability of the exemptions. (b) Procedures for periodic review of withheld information. The Board maintains a record of all minutes and recorded items from closed meetings that are withheld from the public. Those items with a predictable release date are reviewed regularly to see if they are still exempt under the Sunshine Act. For example, recordings of a Board discus- sion regarding the acquisition of new computer equipment would ordinarily be released after bids have been accepted and a contract awarded. Other recorded items and minutes withheld without a specific release date are also reviewed periodically for possible release. I -8- (c) Procedures to make available to the public transcripts, recordings and minutes. The record of each Board meeting is made available to the public in the Board's Freedom of Information Office as promptly as possible after the meeting, unless the Board has voted to withhold, either temporarily or permanently, the discussion, or portions of it, under appropriate The record is usually in the form of either minutes exemptions in the Act. or cassette tape recordings. Public files in the Freedom of Information Office indicate the availability of the record of each agenda item. Any subjects withheld, either temporarily or permanently, are indicated, along with applicable exemptions. Material that is withheld temporarily is released as soon as a determination has been made that the exemptions under which it was withheld are no longer applicable. The public may examine minutes in the Freedom of Information Office and may purchase copies at ten cents per page. The Office has a Beginning with the Board meeting of copy machine for the public's use. October 23, 1985, microfiche copies of the Board's minutes are available at a cost of $3.00, plus $.25 per fiche. The Office also has space and equip- ment to let the public listen to tape recordings, and cassettes may be -ordered for $5 apiece. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis (d) Description of index system to assist public in obtaining and using transcripts, recordings and minutes of open and closed meetings. The Board's Freedom of Information Office maintains an index of Board actions, including actions taken at meetings and by notation voting, and those taken under delegated Federal Reserve Banks. authority by Board officials and the Copies of the index covering July 4, 1967, through December 1984 are available on microfilm, upon request to the Secretary of the Board, at a cost of $13.25 per roll, and on microfiche for the period - https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -9- since then at a cost of $3.00, plus $.25 per fiche. In addition, the Board publishes a weekly index providing identifying information about matters issued, adopted, or promulgated by the Board on a current basis. Back issues of this index are available at a cost of ten cents a page for copying, and current issues are distributed free. The Board's subject index, a copy of which is attached, refers to the appropriate meeting date. Background information on each meeting, copies of minutes, and information regarding the availability of transcripts, recordings, and minutes for individual agenda items are accessible in public files, which are arranged chronologically by the dates of meetings. (e) Tabulation of requests for transcripts or opportunity to listen to closed meeting recordings. During 1985 there were no requests by the public for a copy of a transcript. A tabulation of requests to listen to recordings of closed meetings is not maintained, because the Board makes these recordings available across a public counter unless the information is withheld under an exempt ive provision of the Sunshine Act. (9) Procedure for handling requests to open a meeting. Any person may request in writing to the Secretary of the Board that an announced closed meeting, or a portion of the meeting, be open to public observation. Upon the request of any member of the Board, a recorded vote will be taken whether to open that meeting to public observation. 4 -104 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis (10) Formal complaints on Sunshine procedures and practices. The Board received no formal complaints on its Sunshine procedures and practices during 1985. (11) Guidance to members and staff regarding ex parte communications. A copy of the general memorandum to members of the Board and staff with respect to the ex parte provisions of the Government in the Sunshine Act has been provided in earlier reports. . .•• Of .v . i. e• . • .. GOVtRA• BOARD OF GOVERNORS .vo • .0 .,, OF THE FEDERAL RESERVE SYSTEM 1 A' • ..4 rn • .., WASHINGTON, O. C. 20551 (-). <4, • PAUL A. VOLCKER •.RAL RES. • •...• April 1, 1986 CHAIRMAN The Honorable Chalmers P. Wylie Ranking Minority Member Committee on Banking, Finance and Urban Affairs House of Representatives Washington, D.C. 20515 Dear Mr. Wylie: s Thank you for your letter of March 19 in which you stated your strong support for the policies that the Federal Reserve and other banking agencies have agreed to employ to assist agricultural banks and borrowers. We concur that these policies will provide much needed relief to farm banks and their customers during the difficult transition period the agricultural sector is going through. I would note, moreover, that the Federal Reserve and other federal banking agencies, taking into account the serious dislocations that are being caused by the sharp declines in oil and gas prices and responding to the wishes expressed by many members of the Congress, have also agreed to follow these policies in supervising energy banks. In your letter you urge the policies be implemented as expeditiously as possible. I am pleased to report that, on the day after the joint policy statement was issued, our Reserve Banks were instructed by phone to generally conform their practices and procedures to the policies outlined in the joint statement. Moreover, last week, after legislative action to codify the program appeared to have been delayed for at least several weeks, a letter was sent to the officers in charge of supervision and regulation at the Reserve Banks to provide them with more detailed, written guidelines for implementing these policies. A copy of this letter is enclosed. Sincerely, IS/Paul Enclosure (ltr. dated 3/28/86 from William Taylor) FMS:vcd (V-80, 86-1525) bcc: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mr. Struble Mrs. Mallardi (2) , FERNAD J ST GERMAIN. RHODE ISLAND, CHAIRMAN HENRY B GONZALEZ, TEXAS FRANK ANNUNZIO. ILLINOIS /I'ARREN J MITCHELL. MARYLAND WALTER E FAUNTROY. DISTRICT OF COLUMBIA STEPHEN L NEAL, NORTH CAROLINA CARROLL HUBBARD, JR.. KENTUCKY JOHN J. LAFALCE. NEW YORK STAN LUNDINE. NEW YORK MARY ROSE OAKAR, OHIO BRUCE F VENT°, MINNESOTA DOUG BARNARD. JR . GEORGIA ROBERT GARCIA, NEW YORK CHARLES E SCHUMER. NEW YORK BARNEY FRANK, MASSACHUSETTS BUDDY ROEMER, LOUISIANA RICHARD H LEHMAN, CALIFORNIA BRUCE A MORRISON, CONNECTICUT JIM COOPER. TENNESSEE MARCY KAPTUR, OHIO BEN ERDREICH. ALABAMA SANDER M LEVIN, MICHIGAN THOMAS R CARPER. DELAWARE ESTEBAN E TORRES. CALIFORNIA GERALD D KLECZKA. WISCONSIN BILL NELSON Fl ORIDA PAUL E KANJORSKI PENNSYLVANIA BART GORDON TENNESSEE THOMAS J MANTON. NEW YORK JAIME B FUSTER. PUERTO RICO CHALMERS P YVYLIE OHIO STEWART B McKINNEY. CONNECTICUT JIM LEACH. IOWA NORMAN D SHUMWAY, CALIFORNIA STAN PARRIS. VIRGINIA BILL McCOLLUM. FLORIDA GEORGE C WORTLEY, NEW YORK MARGE ROUKEMA. NEW JERSEY DOUG BEREUTER. NEBRASKA DAVID DREIER. CALIFORNIA JOHN MILER. INDIANA THOMAS J RIDGE, PENNSYLVANIA STEVE BARTLETT. TEXAS TOBY ROTH, WISCONSIN ROD CHANDLER, WASHINGTON AL McCANDLESS, CALIFORNIA JOHN E GROTBERG. ILLINOIS JIM KOLBE, ARIZONA .1. ALEX McMILUOI. NORTH C.AROUNA U.S. HOUSE OF REPRESENTATIVES COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS NINETY-NINTH CONGRESS 2129 RAYBURN HOUSE OFFICE BUILDING WASHINGTON, DC 20515 (202) 225-1217 March 19, 1986 The Honorable Paul A. Volcker Chairman Board of Governors Federal Reserve System Washington, D. C. 20551 Cr) Cr) 2=7 Dear Mr. Chairman: I want to commend you for the action you took in conjunction with the other regulators last week in announcing the new Regulatory Policies Toward Agricultural Lenders. The problems faced by agricultural banks and borrowers ultimately will be eliminated only when the agriculture problem itself is eliminated. The lower dollar and lower interest rates will help, but it is obvious that we still face several years of significant pressure on our agricultural community. Your provisions providing for capital forebearance, flexibility in debt restructuring, and changes in the way renegotiated debt is reported should provide much needed temporary relief during this transition period. In this regard, I would like to urge you to formally implement these new provisions as expeditiously as possible. Moreover, issuance of uniform capital forebearance guidelines by the three agencies would appear to be particularly helpful. Thank you for your consideration on this matter. Sincer Cha ers Ranking CPW:tcf https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Wylie mber https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20SSI PAUL A. VOLCKER March 31, 1986 CHAIRMAN The Honorable Ed Jones Chailman Subcommittee on Conservation, Credit, and Rural Development Committee on Agriculture House of Representatives Washington, D.C. 20515 Dear Chairman Jones: Thank you for your letter of March 25 inviting the Federal Reserve to participate in your Subcommittee's hearing on problems affecting commercial agricultural lenders. I am pleased to let you know that Governor Wayne D. Angell will appear on behalf of the Board on Wednesday, April 9, at 2:00 p.m. Sincerely, SiPaw. A (.101 drei CO:vcd (V-83, 86-1600) bcc: Governor Angell Don Kohn Bill Taylor Mrs. Mallardi (2) t'/' - ED JONES TENNESSEE, CHAIRMAN I. TNOMAS COLEMAN MISSOURI, RANKING MINORITY MEMBER -. -j 4 7 • 14" JIM WEAVER OREGON DAN GLICKMAN KANSAS TOM DASCHLE. SOUTH DAKOTA CHARLES W STENHOLM TEXAS ROBIN TALLON. SOUTH CAROLINA LANE EVANS. ILLINOIS ROBERT LINDSAY THOMAS. GEORGIA RICHARD H STALLINGS, IDAHO GEORGE E BROWN. JR . CALIFORNIA 11.6. jt)ousSr of Repregentatibto Committee on E (KIKA) DE LA GARZA TEXAS, EX OFFICIO MEMBER JAMES M JEFFORDS VERMONT SID MORRISON WASHINGTON STEVE GUNDERSON WISCONSIN COOPER EVANS IOWA WEBB FRANKLIN MISSISSIPPI EDWARD R MADIGAN ILLINOIS. EX OFFICIO MEMBER agrirulturt SUSAN ADKINS MINORITY CONSULTANT fitubcommittet on Constrbation, Cubit, anb Rural 31Dtbrlopnunt ROBERT A CASHDOLLAR, STAFF DIRECTOR Room 1301, Iongtvortb out OffittuiIbing aSbington, )11)C 20515 March 25, 1986 F=1:2 C7 ' The Honorable Paul A. Volcker Chairman of the Board of Governors The Federal Reserve System Constitution Avenue & 21st Street, N.W. Washington, D.C. 20551 Dear Mr. Chairman: This is to respectfully request your appearance as a witness before the Subcommittee on Conservation, Credit, and Rural Develems opment on April 9, 1986, to present testimony regarding probl The hearing will be affecting Caiiiiii-e-reialTicultural lenders. with conducted in Room 1302, Longworth House Office Building, I would like for sessions beginning at 10:00 a.m. and 2:00 p.m. you to appear during the 2:00 p.m. session. Among the specific topics your testimony should address are: (1) your assessment of the extent to which agricultural lenders are affected by the current farm depression; (2) problems, current these to responses regulatory including actions already taken or under consideration; (3) your legislative recommendations for H.R. 3868, "Farm Credit Partnership Act" (copy enclosed); and (4) your legislative recommendations for Titles II and III of H.R. 4267 (copy enclosed). the Committee rules require 75 copies of witnesses' statements to be submitted at least two days prior to the hearing. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis - 2 - Your cooperation and assistance in this matter will be Please have your staff contact Jim Johnson greatly appreciated. or Bob Cashdollar of the Subcommittee staff at 225-1867 for further information about the hearing and to assist in scheduling your appearance. With kindest regards and best wishes, I am cerely Ed Jone Chairman EJ:jjj Enclosures https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis % https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 99TH CONGRESS 1ST SESSION H.R.3868 To provide an opportunity for agricultural borrowers to restructure loans from commercial lenders and Farm Credit System institutions in order to maintain the viability of their farming operations and thus preserve the family farm system as the backbone of American agriculture. IN THE HOUSE OF REPRESENTATIVES DECEMBER 5, 1985 Mr. PANETTA (for himself, Mr. DE LA GARZA, Mr. JONES of Tennessee, Mr. STANGELAND, Mr. ENGLISH, Mr. PENNY, Mr. EVANS of Iowa, Mr. THOMAS of Georgia, Mr. MORRISON of Washington, Mr. SYNAR, and Mr. STALLINGS) introduced the following bill; which was referred to the Committee on Agriculture A BILL To provide an opportunity for agricultural borrowers to restructure loans from commercial lenders and Farm Credit System institutions in order to maintain the viability of their farming operations and thus preserve the family farm system as the backbone of American agriculture. 1 Be it enacted by the Senate and House of Representa- 2 tives of the United States of America in Congress assembled, 3 4 TITLE I—SHORT TITLE SEC. 101. This Act may be cited as the "Farm Credit 5 Partnership Act". https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis f. 2 1 2 TITLE II DEFINITIONS SEC. 201. For the purposes of this Act, as used in the 3 term: 4 (a) "Borrower" means any individual, family corpora- 5 tion, or family partnership who or which derives not less than 6 50 per centum of gross annual income for not less than four 7 out of the past five years from production of raw agricultural 8 products, including livestock or poultry and the products of 9 aquaculture, and who or which, on the date of enactment of 10 this Act, holds from a lender a loan or loans for agricultural 11 purposes which is substandard. 12 (b) "Lender" means any commerical bank, savings and 13 loan association, credit union, insurance company, or institu14 tion (defined in subsection (c)), which includes subsidiaries 15 and affiliates of the above which has agreed to participate in 16 the interest subsidy and loan reduction programs established 17 pursuant to this Act and has been designated in a State plan 18 approved by the Secretary under title II of this Act. 19 (c) "Institution" means any bank or association of the 20 Farm Credit System established under the Farm Credit Act 21 of 1971, as amended, section 2001 of title 12, United States 22 Code, and the following. 23 (d) "State" means each of the several States of the 24 United States, the District of Columbia, the Commonwealths 25 of Puerto Rico and the Northern Mariana Islands, the United HR 3868 Ill 3 1 States Virgin Islands, Guam, American Samoa and, to the 2 extent the Secretary of Agriculture determiens it to be feasi3 ble and appropriate, the Trust Territory of the Pacific Is4 lands. 5 (e) "State agency" means the official or agency desig- 6 nated by the State to administer the programs established by 7 this Act in that State. 8 SEC. 202. Assistance to any borrower under this Act 9 shall be limited to an aggregate outstanding amount, includ10 ing principal and interest, which does not exceed $400,000 in • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 11 the case of an individual, and $600,000 in the case of a 12 family corporation or family partnership. In order to qualify 13 for assistance a borrower must demonstrate to the satisfac14 tion of the lender: 15 (a) average gross annual sales in excess of 16 $30,000 for not less than three of the preceding five 17 tax years; (b) a debt to asset ratio in excess of 40 per 18 19 centum; 20 (c) ability, based upon past performance as a ca- 21 pable producer, to repay the debt after restructuring 22 pursuant to this Act where such restructuring is jointly 23 agreed to by borrower and lender. 24 SEC. 203. (a) Subject to the availability of funds provid- 25 ed pursuant to subsection (e) of this section, the Secretary of HR 3868 IH 1 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4 1 Agriculture (hereinafter referred to as the Secretary) in con2 sultation and cooperation with the Secretary of the Treasury, 3 Controller of the Currency, Chairman of the Federal Reserve 4 Board, Governor of the Farm Credit Administration, Federal l 5 Deposit Insuance Corporation, and each State agency, shal ral 6 establish a cooperative Federal-State-Lender Agricultu the re7 Loan Interest Subsidy (AgLIS) Program in which, at te shall 8 quest of a State, borrowers and lenders within the Sta the year 9 be provided an opportunity to participate. During artment of 10 beginning on the date of the United States Dep in this 11 Agriculture's approval of a State's plan, as defined er may 12 section and ending on a date one year later a borrow respect to 13 apply to a lender for an interest rate subsidity with der out14 any agricultural loan to that borrower from that len ation by a 15 standing on October 1, 1985. Upon such applic this Act 16 borrower who or which qualifies for assistance under restructured 17 and agreement by the lender, the loan shall be such a 18 within ninety days of date of such application in l be fixed 19 manner that the interest rate of the borrower shal the loan, 20 for a period of three years or the remaining term of borrower's 21 whichever is less, at a rate equal to the rate of the tage points. 22 loan as of December 1, 1985, less up to 5 percen subsidy, 2 per23 Of the up to 5 percentage point reduction or through the 24 centage points shall be paid by the Secretary percentage point 25 State agency to the lender, not less than 1 RR 3868 Ill 1 5 er 1 nor more than 2 percentage points shall be paid to the lend 2 by the State, and, subject to the provisions of section 301(b) er. 3 of this Act, 1 percentage point shall be borne by the lend 4 Any State which requests participation in the program but idy 5 declines to bear that State's share of the interest subs e 6 shall nonetheless be required to file and implement a Stat 7 plan as required by this section, but shall be ineligible for this 8 reimbursement of administrative expenses as provided by interest 9 section. The term to maturity of any debt for which than 10 subsidy is provided under this section shall not be less • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis h sub11 the term to maturity of the debt outstanding before suc ured 12 sidy is provided. Payments on such debt shall be restruct rued 13 in accordance with the borrower's ability to repay. Acc g shall 14 interest on such outstanding debt prior to restructurin to the 15 not be capitalized but shall be paid by the borrower loan 16 lender prior to any retirement of principal under the nce 17 agreement as restructured pursuant to this Act. Any bala years 18 of principal and interest outstanding at the end of three repaid as 19 on any loan restructured under this Act shall be rest not 20 agreed between borrower and lender at a rate of inte lender on 21 to exceed the standard rate then charged by the 22 loans with comparable maturities for similar purposes. on (b)(1)(A) From the sums available pursuant,to subsecti provi24 (e) of this section the Secretary shall, subject to the e agen25 sions of this subsection and subsection (c), pay to Stat 23 LIR 3868 111 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 6 $600,000,000 for each ed ce ex to t no m su e at eg gr ag an 1 cies finance the to 89 19 d an , 88 19 , 87 19 , 86 19 s ar 2 of the fiscal ye rest subsidies prote in an lo al ur lt cu ri ag of e ar sh s y' 3 Secretar ntributing to the subsidy, co es at St in d, an s, er nd le to d de 4 vi strative expenses ni mi ad e at St ed ov pr ap e th of um 5 50 per cent stance. 6 related to the provision of such assi e agency for at St ch ea to ts en ym pa or t en ym (B) The pa 7 nts as the Secreou am or nt ou am ch su in be l al sh 8 any year ed the expenditures by ce t ex no l al sh d an e in rm te de y ma 9 tary of the Secren io is ov pr e th r fo ar ye at th ng ri 10 that State du participating lenders to y id bs su st re te in e th of e ar sh 11 tary's r subsection de un ed ov pr ap e at St e th of an pl e 12 according to th y, 50 per centum id bs su e th to ng ti bu ri nt co es at St 13 (c) and, in rative expenses. st ni mi ad e at St ed ov pr d ap te la re e 14 of th ovisions of subpr e th to t ec bj su l, al sh y ar et (2) The Secr 15 icable year, at such pl ap e th r fo e at St ch ea to y pa , 16 section (c) determine, y ma y ar et cr Se e th as er nn 17 times and in such ma to subsection nt ua rs pu e at St e th by d te ma ti 18 the amount es any prior of nt te ex e th to d se ea cr in 19 (c)(1)(A)(iv), reduced or the Secretary h ic wh nt me ay rp de un t en rr 20 overpayment or cu ction and with rese is th r de un de ma en be s ha 21 determines made under en be y ad re al t no s ha nt me st 22 spect to which adju 23 this subsection. lenders to rer ei th d an s er ow rr bo r (c)(1)(A) In order fo 24 each State shall , ar ye y an r fo t Ac is th 25 ceive benefits under Mt 3868 111 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 7 1 have a plan for the year approved by the Secretary under this 2 section. By June 1, 1986, and March 1 of each year hereaf3 ter, in which the interest subsidy is available, if the State 4 wishes borrowers and their lenders to receive benefits, it 5 shall submit a plan which6 (i) designates a single agency which shall be re- 7 sponsible for the administration, or supervision of the 8 administration, of the program for the provision of such 9 subsidy; (ii) assesses the interest subsidy needs of borrow- 10 11 ers residing in the State; 12 (iii) describes the program for the provision of 13 such interest subsidy, including the lenders to whom 14 such subsidy will be paid and any agencies designated 15 to provide such payments, which program must meet 16 such requirements as the Secretary may prescribe; 17 (iv) estimates the amount of expenditures neces- 18 sary for the provision of the interest subsidy, and, in 19 States contributing to the interest subsidy, related ad- 20 ministrative expenses up to the amount allocated by 21 the Secretary for payment in that State out of the total 22 amount available for payment pursuant to subsection 23 (b)(1)(A); 24 (v) requires any institution participating in the 25 programs established by this Act to provide to any bor- B 3868 IH https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 8 3 erforming berower whose loan is, or becomes, nonp t and thirty tween the date of enactment of this Ac tion 203(a); sec in d ine def e dat ng di e en th to or pri days 4 and 1 2 5 6 e Secre(vi) includes such other information as th tary may require. e or disapprove any ov pr ap ll sha y ar et cr Se e Th (i) (B) 7 later than no ) (A ph ra ag ar bp su to nt ua rs pu d te 8 plan submit years, in which it nt ue eq bs su in , 15 il Apr d an , 86 , 19 15 ly 9 Ju ove any plan which 10 is submitted. The Secretary shall appr (A). If a plan ph ra ag ar bp su of ts en em ir qu e re th th wi es 11 compli mply with any of the co t no es do it e us ca be d ve ro pp sa di is 12 etary shall, cr Se e th ph ra ag ar bp su t tha of ts 13 requiremen notify the appro), (ii (B) ph ra ag ar bp in su ed id ov pr as pt 14 exce l not be made to it wil ts en ym pa t tha cy en ag e at St ate pri 15 plan applies e th h ic wh to ar ye e th for ) (b n tio 16 under subsec re is no longer any the t tha ied isf sat is y ar et cr e Se th il unt 17 satisfied, so is y ar et cr Se e th il unt d an , ly mp co to 18 such failure . 19 the Secretary shall make no payments the denial of payments d en sp su y ma y ar et cr Se e ) Th (ii 20 e Secretary th as iod per ch su for (i) (B) ph ra ag 21 under subpar payments of apld ho th wi d tea ins d an e at ri op pr ap es in rm 22 dete provisions of to d ate rel es ns pe ex ve ati str ini 23 proved State adm interest subsidy, in e th to ing but tri con es at St in e 24 assistanc an applies, until pl e th h ic wh to ar ye e th for t, 25 whole or in par HR 3868 Ill 44, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ;9 longer any failure to 1 the Secretary is satisfied that there is no aph (A), at which agr par sub of nts eme uir req the h wit ply com 2 . 3 time such withheld payments shall be paid annual audit of an for e vid pro l shal te Sta The (A) (2) 4 ision of the inter5 expenditures under its program for the prov within sixty days 6 est subsidy described in subsection (b)(1)(A), subsidy is pro7 of the end of each year in which the interest ary the findings 8 vided and shall promptly report to the Secret 9 of such audit. 10 11 12 13 14 15 which (B) Within sixty days of the end of each year in l provide the the interest subsidy is available the State shal ments reSecretary with a statement as to whether the pay the exceived under subsection (b) for that year exceeded t is aupenditures by it during that year for which paymen such thorized under this section, and if so, by how much, and 16 other information as the Secretary may require. tantial (C)(i) If the Secretary finds that there is a subs 17 requirements 18 failure by the State to comply with any of the require19 of subparagraphs (A) and (B), or to comply with the on of a plan 20 ments of subsection (c)(1)(A) in the administrati ary shall, 21 approved under subsection (c)(1)(B), the Secret the State 22 except as provided in subparagraph (C)(ii), notify not be made 23 agency in the State that further payments will satisfied that 24 to it under subsection (b) until the Secretary is , and until 25 there will no longer be any such failure to comply H.R. 3868 IH---2 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 10 1 the Secretary is so satisfied, the Secretary shall make no 2 further payments. 3 (ii) The Secretary may suspend the termination of pay- 4 ments under subparagraph (C)(i) for such period as the Secre5 tary determines appropriate, and instead withhold payments 6 of approved State administrative expenses related to provi7 sion of assistance in States contributing to the interest subsi8 dy, in whole or in part, until the Secretary is satisfied that 9 there will no longer be any failure to comply with the re10 quirements of subparagraphs (A) and (B) and subsection 11 (c)(1)(A), at which time such withheld payments shall be paid. 12 (iii) Upon finding under subparagraph (C)(i) of a substan- 13 tial failure to comply with any of the requirements of sub14 paragraphs (A) and (B) and subsection (c)(1)(A), the Secre15 tary may, in addition to or in lieu of any action taken under 16 subparagraphs (C)(i) and (C)(ii), refer the matter to the Attor17 ney General with a request that injunctive relief be sought to 18 require compliance by the State and upon suit by the Attor19 ney General in an appropriate district court of the United 20 States and a showing that noncompliance has occurred, ap21 propriate injunctive relief shall issue. 22 (d) The Secretary shall provide for review and, in the 23 discretion of the Secretary, audit of the program for which 24 payments are made under this section, and may, as the Sec- HR 3868 IH 1 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 11 States technical ase th to e id ov pr e, bl ca ti ac 1 retary deems pr such a program. to t ec sp re th wi ce an st si 2 ed such sums as at ri op pr ap be to ed iz or th (e) There is au 3 isions of this section. ov pr e th t ou y rr ca to y ar ss 4 may be nece sly and in a ou ti di pe ex e bl la ai av ce an st 5 In order to make assi cretary is authorSe e th er nn ma d te up rr te in 6 consistent and un d facilities an l ne on rs pe s, nd fu e th e iz il 7 ized and directed to ut lture, including cu ri Ag of nt me rt pa De es 8 of the United Stat ation (CCC), and of or rp Co it ed Cr y it od mm 9 those of the Co sistance is reas e os wh cy en ag e at St 10 any other Federal or S Program. HowLI Ag e th t ou y rr ca d an h 11 quired to establis ensuing apxt ne e th an th r te la t no l, al 12 ever, the Congress sh any sums adof t en em rs bu im re ll fu e id 13 propriation act prov orized to approprith au is d an n io ct se is th to 14 vanced pursuant necessary be y ma as m ra og Pr S LI Ag 15 ate such sums for the cipated Federal ti an of te ma ti es s y' ar 16 based on the Secret 17 costs. ity to monitor or th au e th ve ha l al sh cy (f) The State agen 18 y lender found in An . a) 3( 20 n io ct se th wi ce 19 lender's complian ive further ce re to le ib ig el be t no l al sh 20 violation of that section t. 21 payments under this Ac tion as the ac ke ta y ma n io ut it st SEC. 204. (a) An in 22 ing loan made nd ta ts ou an on ng ti ul fa 23 result of a borrower de er only if— any borrow 24 by such institution to HR 3868 EH https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • 12 1 (1) a thirty-day notice of availability of assistance 2 under this Act has been provided as required by sec- 3 tion 203(c)(1)(A)(v) of this Act, and 4 (2) any such borrower who has applied for assist- 5 ance has been determined not to qualify for assistance 6 under this section. 7 SEC. 205. (a) Provisions of this title shall become effec- 8 tive in a particular State upon adoption of that State's State 9 plan. 10 TITLE III AGRICULTURAL LOAN PRINCIPAL REDUCTION 11 12 SEC. 301. (a) GENERAL RULES.—For the purposes of 13 this title, the term a "qualified institution" means an institu14 tion the deposits of which are insured under the Federal De15 posit Insurance Act (12 U.S.C. 1823) or insured or guaran16 teed under State law. 17 (b) Any lender participating in the programs provided 18 under this Act may during the period beginning thirty days 19 after the date of enactment write down the outstanding prin20 cipal balance on the loan or loans of such borrower by such 21 amount, as will permit such borrower to qualify for assist22 ance. The balance of the principal remaining after such write23 down and the accrued interest attributable thereto shall be 24 rescheduled for payment. The borrower shall'not be liable for 25 repayment of that portion of the outstanding principal bal- HR 3868 IH https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 13 ac1 ance written down pursuant to this section nor for the 2 crued interest attributable thereto. l (c) Any loan which has had the outstanding principa ance written down pursuant to this section, is also eligible 3 4 bal 5 for the interest subsidy once that program is in place. the (d) If the write-down of principal needed to enable 6 equals or 7 borrower to qualify for assistance under this Act outstanding, 8 exceeds 15 per centum of the principal balance portion of 9 the qualified institution shall not be liable for any II of this 10 the cost of the interest subsidy provided under title only such 11 Act. In such case the interest subsidy shall total e, if such 12 amount as is paid by the Secretary and the Stat 13 State is contributing to the interest subsidy. ATION SEC. 302. (a) FARMERS HOME ADMINISTR 14 beginning on 15 GUARANTEES.—Effective only for the period tember 30, 16 the date of enactment of this Act and ending Sep nt Act (7 17 1988, the Consolidated Farm and Rural Developme the end 18 U.S.C. 1921 et seq.) is further amended by adding at 19 thereof the following new section: carry "SEc. 351. (a) The Secretary shall establish and loan pro21 out in accordance with this section a guaranteed tion Pro22 gram pursuant to the Agricultural Loan Cancella 20 23 gram established by this title. 24 "(b) For purposes of this section— HR 3868 IH https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 14 "(1) An Agricultural Loan Cancellation Program 1 2 shall not- 3 "(A) be limited to cancellation of not more 4 than 30 per centum of the first $500,000 of agri- 5 cultural loans made to an individual farmer 6 ($750,000 in the case of a partnership or corpora- 7 tion engaged in farming); and 8 "(B) be limited to borrowers with gross sales 9 in excess of $30,000 debt to asset ratios in excess 10 of 40 per centum prior to cancellation, and debt 11 to asset ratios of less than 100 per centum after 12 cancellation; 13 "(2) The term 'qualified institution' means an in- 14 stitution the deposits of which are insured under the 15 Federal Deposit Insurance Act (12 U.S.C. 1823) or in- 16 sured or guaranteed under State law; and 17 "(3) The term 'restructured loan' means the agri- 18 cultural loan that results after loan cancellations made 19 under paragraph (1). 20 "(c) Upon the request of a qualified institution, the Sec- 21 retary shall issue a guarantee to such qualified institution in 22 an amount equal to 90 per centum of the amount of principal 23 forgiven pursuant to the Agricultural Loan Cancellation Pro24 gram of this section: Provided, That- "(1) the guarantee period is ten years; 25 HR 3868 IH https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 15 num; "(2) the guarantee declines by ten per an gible for "(3) the restructured loan will not be eli 1 2 other guarantees under this title; 3 4 tructured "(4) the guaranteed portion of the res titution can only be exercised if the qualified ins 5 loan 6 lead financial is totally liquidated by the lender's 7 regulator; s section "(5) restructured loans pursuant to thi 8 9 shall not be transferable; and 10 11 12 13 14 15 16 a titution as "(6) the loss incurred by a qualified ins tion shall result of a loan cancellation under this sec lments over a tal ins al nu an al equ in d ize ogn rec be that if such period of not to exceed ten years, except tion of which institution forecloses on any loan a por ire remaining was forgiven under this section, the ent loan shall be balance of the forgiven portion of that charged off in the year of the foreclosure. tion (c) shall be issued by sec sub r de un es te an ar Gu d) "( 18 qualified institution 19 the Secretary upon certification by the 17 20 that such institutionthan 4 per "(1) has net worth equal to or greater 21 22 centum of its assets; and 23 Loan Can"(2) has implemented an Agricultural tion (b). lation Program in accordance with subsec 24 cel 16 1 "(e) The amendments made by this sectio n shall apply 2 with respect to loan principal cancellat ions which are put into 3 effect during the period as defined in sec tion 301(b).". 4 TITLE TV—MISCELLANEOUS PROVIS IONS 5 SEC. 401. Recognizing the severe econom ic problems 6 confronted by many agricultural banks and the regulatory re7 sponsibilities of the Federal Deposit Insurance Corporation 8 (FDIC), the Comptroller of the Curren cy (CCC), and the 9 Federal Reserve System, these bank regulatory agencies 10 shall develop within thirty days of ena ctment of this Act an 11 Inter-Agency Agricultural Task For ce to assist commercial 12 agricultural banks and their borrow ers to work through the 13 present economic problems and to fac ilitate commercial bank 14 lending to agriculture in the future. Spe cifically, the Inter15 Agency Task Force should: 16 17 18 19 20 21 22 23 24 25 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis (1) review existing regulations and policies to facilitate agricultural lending; (2) work with field office personnel to avoid conflicts and inconsistencies between the agencies; (3) consider meaningful alternatives to assist cor nmercial banks in providing agricultural fin ancing by regulatory or statutory changes including accounting changes, interest rate buydowns, or other simila r methods for assisting banks. Require that no lat er than March 1, 1986, and semiannually thereafter, each HI 3868 IH 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 ( 16 17 f 18 19L 20A 21 22 ai 23 si https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 17 1 Agency shall report of its findings and recommenda- 2 tions to the Committee on Agriculture of the House of 3 Representatives, the Committee on Agriculture, Nutri- 4 tion, and Forestry of the Senate, Committee on Bank- 5 ing, Finance and Urban Affairs of the House of Repre- 6 sentatives, and the Committee on Banking, Housing, 7 and Urban Affairs of the Senate. 8 SEC. 402. The provisions of the constitution or law of 9 any State imposing any penalty, limitation, or moratorium 10 relating to fixed rate mortgages shall not apply to any exten11 sion of credit in the form of a fixed rate mortgage made under 12 this Act. SEC. 403. Whoever embezzles, misapplies, steals, or oh- 13 14 tains by fraud, false statements, or forgery, any funds, assets, 15 or property provided or financed under this section shall be 16 fined not more than $10,000 or imprisoned for not more than 17 five years, or both. SEC. 404. There are authorized to be issued such regu- 18 19 lations as may be necessary to carry out the provisions of this 20 Act. 21 SEC. 405. There are hereby authorized to be appropri- 22 ated such sums as may be required to carry out the provi23 sions of this Act. 0 HI 3868 IH https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 99TH CONGRESS 2D SESSION H.R.4267 sed income to producers ea cr in e id ov pr to 49 19 Act of To amend the Agricultural ops of such commodcr 90 19 h ug ro th 86 19 e for th t to of wheat and feed grains d Rural Development Ac an rm Fa ed at id ol ns Co te ities, to amend the d to require the interest ra an m ra og pr nt me st ju ad provide by law for a debt money to the lending of st co e th an th r te ea gr not for buy-down loans to be rposes. institution, and for other pu ESENTATIVES R P E R F O E S U O H E H IN T FEBRUARY 27, 1986 R, Mr. ENGLISH, Mr. ME LK VO . Mr E, HL elf, Mr. DASC North Mr. BEDELL (for hims Illinois, Mr. DORGAN of of S AN EV . Mr , AN . PENNY, Mr. GLICKM IAMS, Mr. SIKORSKI, Mr LL WI . Mr Y, RD CU MC . Dakota, Mr. SYNAR, Mr IER, and Mr. ALEXANME EN ST KA . Mr , ma laho ittee on WATKINS, Mr. JONES of Ok s referred to the Comm wa h ic wh l; bil g in ow ll fo DER) introduced the Agriculture A BILL ovide increased pr to 49 19 of t Ac al To amend the Agricultur grains for the 1986 ed fe d an t ea wh of s income to producer to amend the s, ie it od mm co ch su through 1990 crops of pment Act to provide lo ve De l ra Ru d an Consolidated Farm require the to d an m ra og pr nt stme by law for a debt adju greater than the t no be to s an lo wn interest rate for buy-do ution, and for other it st in g in nd le e th cost of money to purposes. of Representae us Ho d an te na Se e Be it enacted by th 1 ngress assembled, Co in a ic er Am of es at 2 tives of the United St https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2 1 TITLE I WHEAT AND FEED GRAINS 2 SECTION 101. PRODUCTION ACREAGES, MARKETING CERTIFI- 3 CATES, AND MINIMUM LOAN RATES FOR THE 4 1986 THROUGH 1990 CROPS OF WHEAT AND 5 FEED GRAINS. 6 Effective only for the 1986 through 1990 crops, the Ag- 7 ricultural Act of 1949 (7 U.S.C. 1461 et seq.) is amended by 8 adding at the end thereof a new title VI as follows: 9 "TITLE VI—PRODUCTION ACREAGES, MARKET10 [NO CERTIFICATES, AND MINIMUM LOAN 11 RATES FOR THE 1986 THROUGH 1990 CROPS 12 OF WHEAT AND FEED GRAINS 13 "FINDINGS AND POLICY 14 "SEc. 601.(a) Congress finds that- 15 "(1) wheat and feed grains are essential ag-rieul- 16 tural commodities for the Nation, are produced 17 throughout the United States by hundreds of thousands 18 of farmers, and along with their products flow in sub- 19 stantial amounts through instrumentalities of interstate 20 and foreign commerce from producers to consumers; 21 "(2) abnormally excessive and abnormally defi- 22 cient supplies of wheat and feed grains on the country- 23 wide market acutely and directly affect, burden, and 24 obstruct interstate and foreign commerce; and •HR 4267 EH https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3 1 "(3) interstate and foreign commerce in wheat and 2 feed grains, and their products, should be protected 3 from burdensome surpluses and disruptive shortages, a 4 supply of the commodities should be maintained to 5 meet domestic consumption needs and export demand, 6 and soil and water resources of the Nation should not 7 be squandered in the production of surplus burdensome 8 supplies of the commodities. 9 "(b) It hereby is declared to be the policy of Congress • 10 that it is in the interest of the general welfare to assist in the 11 marketing of wheat and feed grains for domestic consumption 12 and export; to regulate interstate and foreign commerce in 13 the commodities to the extent necessary to provide an order14 ly, adequate, and balanced flow of the commodities in inter15 state and foreign commerce; and to provide loans and other 16 means to maintain farm income for producers of the commod17 ities, reduce excess production, and enable consumers to 18 obtain an adequate and steady supply of such commodities at 19 fair prices. 20 21 "CONSUMER SAFEGUARDS "SEc. 602. The powers conferred under this title shall 22 not be used to discourage the production of supplies of food 23 and animal feed sufficient to meet normal domestic and 24 export needs, as determined by the Secretary. In carrying 25 out the purposes of this title, the Secretary shall give due 26 regard to the maintenance of a continuous and stable supply •HR 4267 15 - —or https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4 1 of agricultural commodities from domestic production ade2 quate to meet consumer demand at prices fair both to produc3 ers and consumers. 4 "NATIONAL MARKETING CERTIFICATE PROGRAM-WH EAT 5 "SEc. 603. (a) Notwithstanding any other provision of 6 this Act, in the case of the 1986 through 1990 crops of 7 wheat, the Secretary shall make available to producers on 8 each farm loans and purchases for such crop of wheat for an 9 amount of wheat produced on the farm equal to the individual 10 farm program acreage for the crop, as determined under sec11 tion 107D (as limited under subsection (b)), times the farm's 12 program yield for the crop of wheat, as determined by the 13 Secretary. Loans and purchases shall be made available 14 during the marketing year for any such crop of wheat at such 15 level as the Secretary determines will maintain the competi16 tive relationship of wheat to other grains in domestic and 17 export markets after taking into consideration the cost of pro18 ducing wheat, supply and demand conditions, and world 19 prices for wheat, except that the level of wheat loans and 20 purchases for the 1986 through 1990 marketing years may 21 not be established at less than $5.00 per bushel of wheat. 22 "(b) Notwithstanding the provisions of section 107D, in 23 the case of the 1986 through 1990 crops of wheat, the indi24 vidual farm program acreages for such crop may not be es25 tablished at less than 65 per centum of each farm's wheat 26 crop acreage base for the crop •HI 4267 Ill 5 ke available to producma l al sh y ar et cr Se e Th A) )( "(c)(1 1 e 1986 through th r fo es at ic if rt ce g in et rk ma 2 ers on each farm onal marketing certifiti na a h ic wh r fo t ea wh of 3 1990 crops rketing cerma ch su of nt ou am e Th . ct fe 4 cate program is in ef a farm for a crop on s er uc od pr e th to e bl la ai 5 tificates made av ined by multiplying rm te de t ea wh of nt ou am an 6 shall equal crop, as detere th r fo e ag re ac m ra og pr 7 the individual farm der subsection (b)), un d te mi li s (a 7D 10 n io ct se 8 mined under t, as deterea wh of op cr e th r fo d el yi m 9 by the farm's progra y a farm's program ma t en ev no In y. ar et cr Se 10 mined by the than the farm's program ss le be t ea wh of op cr a 11 yield for of wheat. 12 yield for the 1985 crop available to importers ke ma y ma y ar et cr Se e "(B) Th 13 ucts imported od pr t ea wh or t ea wh r fo 14 marketing certificates rough 1990 crops th 86 19 e th r fo ar ye g in et 15 during the mark ing certificate program et rk ma al on ti na a h ic wh r 16 of wheat fo eat or wheat wh ed rt po im ch su of es ti ti an 17 is in effect. The qu at may be imported th nt ou am e th ed ce ex t no l 18 products shal of measures on ti si po im e th om fr g in lt su 19 under restrictions re nt Act of 1933, me st ju Ad al ur lt cu ri Ag e th of 20 under section 22 ing Agreement Act of et rk Ma al ur lt cu ri Ag e th 21 reenacted by 22 1937. icable to a crop of pl ap e at ic if rt ce g in et rk ma "(2)(A) A 23 producer to ch su e iz or th au l al sh er uc od 24 wheat issued to a pr n, an amount of io ct ri st re t ou th wi , te na do 25 market, barter, or https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis •HR 4267 IH https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 6 certificate. g n i t e k r a m h c u amount of s e h t o t l a u q e 1 wheat domestid e t a n o d r o , d eted, bartere k r a m e b t o n y 2 Wheat ma ate, except c i f i t r e c g n i t e k without a mar r e c u d o r p a y 3 cally b ate may c i f i t r e c g n i t e k ed by a mar i n a p m o c c a t o n 4 that wheat purposes on r e h t o r o , n o an consumpti m u h , d e e f r o f 5 be used transe s i w r e h t o r o d r may be sol o , r e c u d o r p e h t 6 the farm of or export. f r e c u d o r p e h t tity of 7 ferred by n a u q a o t e l b a ificate applic t r e c g n i t e k r a m "(B) A 8 l authorl a h s r e t r o p m i s issued to an t c u d o r p t a e h w 9 wheat or without re, e t a n o d r o , r e market, bart o t r e t r o p m i h c 10 ize su al to the u q e s t c u d o r p t eat or whea h w f o t n u o m a n 11 striction, a wheat prodr o t a e h W . e t ing certifica t e k r a m h c u s f o 12 amount mestically o d d e t a n o d r , bartered, o d e t e k r a m e b t o 13 ucts may n certificate. g n i t e k r a m a orter without te that a 14 by an imp c i f i t r e c g n i t e ed by a mark i n a p m o c c a t a e "(3) Wh 15 eligible for e b l l a h s t r o p x sferred for e n a r t e s i w r e h t o ided in v o 16 is sold or r p s a , t a e on such wh t n e m y a p e v i t n ince 17 an export 1. 18 section 61 ertificate that c g n i t e k r a m panied by a m o c c a t a e h W ) "(4 purchased 19 d n a y l l a c i t nated domes o d r o , d e r e t r a b d, 20 is markete wheat may h c u s f o r e s u a domestic y b d e r i u q c a e s i by the d 21 or otherw e n i m r e t e d s payment, a e v i t n e c n i n a r e fo thereof s t 22 be eligibl c u d o r p heat and the w h c u s t a h t e r to assu wheat h c u 23 Secretary, s r o f t e k omestic mar d e h t n i e v i t peti 24 remain com products. 25 and wheat •HR 4267 LH https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 7 vests "(5) If for any crop, wheat that the producer har keted, eeds the amount of the commodity that may be mar 1 2 exc keting cer3 bartered, or donated by the producer under a mar an consumption, 4 tificate, the excess may be used for feed, hum or sold or 5 or other purposes on the farm of the producer such excess 6 otherwise transferred for export. In addition, marketing year 7 may be carried over by the producer from one ed under a cer8 to the succeeding marketing year and market the extent that 9 tificate in the succeeding marketing year to for marketing 10 (A) the total amount of such wheat available keting year from 11 under a certificate from the farm in the mar s not exceed the 12 which such commodity is carried over doe available to the 13 amount of the marketing certificates made total amount 14 producers on the farm for that crop, and (B) the certificate in the 15 of wheat available for marketing under a of the amount of 16 succeeding marketing year (that is, the sum wheat produced 17 such wheat carried over and the amount of in the succeed18 on the farm eligible for marketing certificates marketing certifi19 ing year) does not exceed the amount of the farm for the 20 cates made available to the producers on 21 succeeding marketing year. producer "(6) Marketing certificates made available to a be transan importer of wheat or wheat products shall not 22 23 or tes accompany ica tif cer h suc t tha ent ext the to ept exc e, abl 24 fer ed, bartered, or do25 wheat or wheat products that are market •HI 4267 III •• iiprownr• ..Fr."‘Fripp,r•Tr.-7 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 8 1 nated under paragraph (2), and any such transfer that does 2 not accompany wheat or wheat products shall render such 3 certificates null and void. 4 "(7) Wheat harvested in a calendar year in which mar- 5 keting certificates are made available to producers for the 6 marketing year beginning therein may not be marketed by a 7 producer under a certificate prior to the date on which such 8 marketing year begins. 9 "(8) No person may purchase or otherwise acquire an 10 amount of wheat in excess of the amount of wheat that may 11 be marketed, bartered, or donated under marketing certifi12 cates issued under this title and held or readily available, 13 except wheat that must be exported may be acquired as pro14 vided under paragraph (2). 15 "(9) If marketing certificates for wheat are not made 16 available to producers for any crop, all previous marketing 17 certificates applicable to wheat shall be terminated, effective 18 as of the first day of the marketing year for such crop of 19 wheat. 20 "(10) Except as otherwise provided in this title, the dis- 21 aster payment, program yield, program acreage, acreage re22 duction, paid diversion, and related 'provisions of section 23 107D shall apply to producers of wheat for which a national 24 marketing certificate program is in effect under this title. •ffit 4267 IR https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 9 "PENALTIES WITH RESPECT TO WHEAT 1 2 3 4 5 6 provision "SEC. 604. (a)(1) Notwithstanding any other n (b), if a producer of this Act, except as provided in subsectio a wheat profails to comply with any term or condition of ll be ineligigram conducted under this title, the producer sha s Act for the ble for any loan, purchase, or payment under thi 7 crop of wheat involved. 8 9 10 11 12 13 14 15 ing the "(2) Except as provided in subsection (c), dur which marketing marketing year for any crop of wheat for ers, if any person certificates are made available to produc than for export markets, barters, or donates wheat other section 603 or without marketing certificates issued under at for domestic markets, barters, or donates an amount of whe person is permitted use in excess of the amount of wheat the certificates, the Secto market, barter, or donate under such 16 retary shall17 son in "(A) assess a civil penalty against such per minimum amount equal to three times the current 18 an 19 tered, or doloan rate for the wheat so marketed, bar 20 nated, or 21 22 23 24 25 se the "(B) with respect to a producer, decrea farm program number of acres of the farm's individual ote to prodev y ma er duc pro h suc at whe for e eag acr by a number duction for the succeeding crop of wheat the production of acres that, if planted, would result in HR 4267 IH 2 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 10 1 of a quantity sufficient to satisfy the penalty referred to 2 in subparagraph (A). 3 "(3) If a person, knowingly purchases or otherwise ac- 4 quires an amount of wheat for any purpose other than export 5 in excess of the amount of wheat that may be marketed, bar6 tered, or donated by such person under marketing certificates 7 issued under this title and held or readily available to such 8 person, the Secretary shall assess a civil penalty against such 9 person in an amount equal to three times the current mini10 mum loan rate for the wheat so purchased or acquired. 11 "(b) If a producer fails to comply fully with the terms 12 and conditions of a wheat program conducted under this title 13 and the Secretary believes the failure should not preclude the 14 making of loans, purchases, or payments under this Act to 15 the producer, the Secretary may make loans, purchases, or 16 payments in such amounts as the Secretary determines to be 17 equitable in relation to the severity of the program violation. "(c) If the Secretary otherwise determines that the pen19 alties provided for in subsection (a) are not warranted by the 20 severity of the program violation, the Secretary may reduce 18 21 or waive such penalties. 22 23 "(d) Penalties collected under this section shall be it deposited into the account of the Commodity Cred 24 Corporation. •HR 4267 W 11 marketing, barr fo s ie lt na pe d an ns io it ib oh pr "(e) The 1 rwise acquiring wheat he ot or , ng si ha rc pu , ng ti na do 2 tering, l apply to wheat in al sh 3 60 n io ct se or n io ct se 3 set out in this products of wheat, to d an , rm fo d se es oc pr or d 4 unprocesse t products into ea wh or t ea wh ch su of on si 5 prior to the conver iate-use products ed rm te or in ts uc od pr r he ot or 6 end-use food s separate it s se lo t uc od t pr ea wh or t 7 in which the whea https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 8 identity. 9 ED E PROGRAM—FE AT IC IF RT CE G IN ET RK MA L "NATIONA GRAINS 10 y other provision an g in nd ta hs it tw No 1) )( (a 5. "SEC. 60 11 crops of 90 19 h ug ro th 86 19 e th of se 12 of this Act, in the ca ble to producers la ai av ke ma l al sh y ar et cr Se 13 feed grains, the ch crop of feed grains su r fo s se ha rc pu d an s an lo 14 on each farm farm equal to e th on ed uc od pr ns ai gr ed 15 for an amount of fe the crop, as deterr fo e ag re ac m ra og pr rm fa 16 the individual ection (b)), bs su r de un d te mi s li (a 5C 10 17 mined under section , as determined by op cr e th r fo d el yi m ra og pr 18 times the farm 19 the Secretary. ailable during av de ma be l al sh s se ha rc pu d "(2) Loans an 20 rn at such level as co of op cr ch su y an r fo ar ye 21 the marketing etitive relamp co e th in ta in ma ll wi es 22 the Secretary determin ic and export st me do in ns ai gr r he ot to ns 23 tionship of feed grai e cost of producing th n io at er id ns co to in ng ki ta 24 markets after world prices d an , ns io it nd co nd ma de d 25 feed grains, supply an loans and purrn co of l ve le e th at th pt ce 26 for feed grains, ex 0111 4267 III OOP https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12 1 chases for the 1986 through 1990 marketing years may not 2 be established at less than $3.50 per bushel of corn. 3 "(3) Loans and purchases shall be made available for a vely, at 4 crop of grain sorghums, barley, oats, or rye, respecti le 5 such level as the Secretary determines is fair and reasonab made 6 in relation to the level most loans and purchases are ider7 available for corn under this subsection, taking into cons to corn 8 ation the feeding value of such commodity in relation 9 and other factors specified in section 401(b) of this Act. "(b) Notwithstanding the provisions of section 107D, in 10 ns, the 11 the case of the 1986 through 1990 crops of feed grai not be 12 individual farm program acreages for such crop may m's feed 13 established at less than 80 per centum of each far 14 grains crop acreage base for the crop. duc"(c)(1)(A) The Secretary shall make available to pro of the 1986 16 ers on each farm marketing certificates for any national mar17 through 1990 crops of feed grains for which a unt of such 18 keting certificate program is in effect. The amo ducers on a 19 marketing certificates made available to the pro grains deter20 farm for a crop shall equal an amount of feed m acreage for 21 mined by multiplying the individual farm progra (as limited under 22 the crop, as determined under section 105C d for the crop, as 23 subsection (b)), by the farm's program yiel may a farm's pro24 determined by the Secretary. In no event 15 •EIR 4267 111 13 than the farm's ss le be ns ai gr ed fe of op cr 1 gram yield for a crop of feed grains. 85 19 e th r fo d el yi m ra og pr 2 to importers e bl la ai av ke ma y ma y ar et cr "(B) The Se 3 ed grain products fe or ns ai gr ed fe r fo es at ic if rt 4 marketing ce ar for any of the 1986 ye g in et rk ma e th ng ri du 5 imported ich a national marwh r fo ns ai gr ed fe of s op cr 6 through 1990 . The quantities of such ct fe ef in is m ra og pr e at ic if 7 keting cert n products shall not exceed ai gr ed fe or ns ai gr ed fe ed 8 import der restrictions resulting un ed rt po im be y ma at th 9 the amount 22 of the Agrin io ct se r de un es ur as me of on 10 from the impositi ted by the Agriculac en , re 33 19 of t Ac nt me st ju 11 cultural Ad ement Act of 1937. 12 tural Marketing Agre icable to a crop of pl ap e at ic if rt g ce in et rk ma A "(2)(A) 13 such producer e iz or th au l al sh er uc od pr a 14 feed grains issued to ction, an amount ri st re t ou th wi , te na do or , 15 to market, barter such marketing certifiof nt ou am e th to l ua eq ns 16 of feed grai , or donated ed er rt ba , ed et rk ma be t no y 17 cate. Feed grains ma marketing certificate, a t ou th wi er uc od pr a by 18 domestically marketing cera by d ie an mp co ac t no ns ai 19 except that feed gr nsumption, or other co n ma hu , ed fe r fo ed us 20 tificate may be sold or othbe y ma or , er uc od pr e th of 21 purposes on the farm er for export. uc od pr e th by d re er sf an tr 22 erwise icable to a quantity of pl ap e at ic if rt ce g in et rk ma "(B) A 23 importer shall an to ed su is ts uc od pr n ai gr 24 feed grains or feed donate, without or , er rt ba , et rk ma to er rt po 25 authorize such im https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis •HR 4267 EH https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 14 1 restriction, an amount of feed grains or feed grain products 2 equal to the amount of such marketing certificate. Feed 3 grains or feed grain products may not be mar keted, bartered, 4 or donated domestically by an importer without a marketing 5 certificate. 6 "(3) Feed grains accompanied by a marketing cert ificate 7 that are sold or otherwise transferred for exp ort shall be eli8 gible for an export incentive on such feed grai ns, as provided 9 in section 611. 10 "(4) Feed grains accompanied by a market ing certificate 11 that are marketed, bartered, or donated domest ically and 12 purchased or otherwise acquired by a dom estic user of such 13 feed grains may be eligible for an incentive payment, as de14 termined by the Secretary, to ensure that such feed grains 15 and the products thereof remain competitive in the domestic 16 market for such feed grains and feed grain produc ts. 17 "(5) If for any crop, feed grains that the producer har 18 vests exceed the amount of the commodity tha t may be mar19 keted, bartered, or donated by the producer und er a market20 ing certificate, the excess may be used for feed, human con21 sumption, or other purposes on the farm .of the pro ducer, or 22 sold or otherwise transferred for export. In addi tion, such 23 excess may be carried over by the producer from one market24 ing year to the succeeding marketing year and marketed 25 under a certificate in the succeeding marketing year to the •HR 4267 HI 15 1 extent that (A) the total amount of such feed grains available 2 for marketing under a certificate from the farm in the market3 ing year from which such commodity is carried over does not 4 exceed the amount of the marketing certificates made avail5 able to the producers on the farm for that crop, and (B) the I. 6 total amount of feed grains available for marketing under a 7 certificate in the succeeding marketing year (that is, the sum 8 of the amount of such feed grains carried over and the 9 amount of feed grains produced on the farm eligible for mar10 keting certificates in the succeeding year) does not exceed the 11 amount of marketing certificates made available to the pro12 ducers on the farm for the succeeding marketing year. 13 "(6) Marketing certificates made available to a producer 14 or an importer of feed grains or feed grain products shall not 15 be transferable, except to the extent that such certificates 16 accompany feed grains or feed grain products that are mar17 keted, bartered, or donated under paragraph (2), and any 18 such transfer that does not accompany feed grains or feed 19 grain products shall render such certificates null and void. 20 "(7) Feed grains harvested in a calendar year in which 21 marketing certificates are made available to producers for the 22 marketing year beginning therein may not be marketed by a 23 producer under a certificate prior to the date on which such 24 marketing year begins. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4011R 4267 111 11% https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 16 1 "(8) No person may purchase or otherwise acquire an 2 amount of feed grains in excess of the amount of feed grains 3 that may be marketed, bartered, or donated under marketing 4 certificates issued under this title and held or readily avail5 able, except that feed grains that must be exported may be 6 acquired as provided under paragraph (2). 7 "(9) If marketing certificates for feed grains are not 8 made available to producers for any crop, all previous mar9 keting certificates applicable to feed grains shall be terminat10 ed, effective as of the first day of the marketing year for such 11 crop of feed grains. 12 "(10) Except as otherwise provided in this title, the dis- 13 aster payment, program yield, program acreage, acreage re14 duction, paid diversion, and related provisions of section 15 105C shall apply to feed grains and producers of feed grains 16 for which a national marketing certificate program is in effect 17 under this title. 18 19 "PENALTIES WITH RESPECT TO FEED GRAINS "SEC. 606. (a)(1) Notwithstanding any other provision 20 of this Act, except as provided in subsection (b), if a producer 21 fails to comply with any term or condition of a feed grain 22 program conducted under this title, the producer shall be in23 eligible for any loan, purchase, or payment under this Act for 24 the crop of feed grains involved. 25 "(2) Except as provided in subsection (c), during the 26 marketing year for any crop of feed grains for which a mar0111 4267 111 17 ers if any person 1 keting certificate is made available to produc er than for export 2 markets, barters, or donates feed grains oth er section 605 or 3 without a marketing certificate issued und er than for dooth ins gra d s fee ate don or s, ter bar s, ket mar 4 the commodity the 5 mestic use in excess of the amount of donate under such or , ter bar , ket mar to ted mit per is son 6 per 7 certificates, the Secretary shallin "(A) assess a civil penalty against such person 8 10 rent minimum an amount equal to three times the cur bartered, or loan rate for the feed grains so marketed, 11 donated, or 9 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis se the "(B) with respect to a producer, decrea farm program l dua ivi ind m's far the of es acr of er mb nu may devote to acreage for feed grains such producer grains by a production for the succeeding crop of feed 12 13 14 15 17 result in the number of acres that, if planted, would y the penalty production of a quantity sufficient to satisf 18 referred to in subparagraph (A). 16 19 otherwise ac"(3) if a person knowingly purchases or pose other than res an amount of feed grains for any pur 20 qui grains that may be d fee of nt ou am the of ess exc in ort 21 exp h person under marketsuc by d ate don or ed, ter bar ed, ket mar 22 d or readily hel d an le tit s thi r de un ued iss tes ica 23 ing certif shall assess a civil ary ret Sec the , son per h suc to ble ila 24 ava an amount equal to three in son per h suc t ins aga y alt pen 25 on 4267 W https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 18 1 times the current minimum loan rate for the feed grains so 2 purchased or acquired. 3 "(b) If a producer fails to comply fully with the terms 4 and conditions of a feed grain program conducted under this 5 title and the Secretary believes the failure should not pre6 clude the making of loans, purchases, or payments under this 7 Act to the producer, the Secretary may make loans, pur8 chases, or payments in such amounts as the Secretary deter9 mines to be equitable in relation to the severity of the pro10 gram violation. 11 "(c) If the Secretary otherwise determines that the pen- 12 alties provided for in subsection (a) are not warranted by the 13 severity of the program violation, the Secretary may reduce 14 or waive such penalties. 15 "(d) Penalties collected under this section shall be 16 deposited into the account of the Commodity Credit 17 Corporation. 18 "(e) The prohibition and penalties for marketing, barter- 19 ing, donating, purchasing, or otherwise acquiring feed grains 20 set out in this section and section 605 shall apply to feed 21 grains in unprocessed or processed form, and to products of 22 feed grains, prior to the conversion of such feed grains or feed 23 grain products into end-use food or other products or inter24 mediate-use products in which the feed grains or feed grain 25 product loses its separate identity. on 4267 W 19 1 2 "PROGRAM BASES "SEc. 607. Notwithstanding any other provis ion of law, 3 for the 1986 through 1990 crops of whe at or feed grains for 4 which a national marketing certificate program is in effect, no 5 producer of such crop, may adjust the producer's crop acre6 age base for the crop and the producer' s base for such crop 7 shall be as determined by the Secretary. 8 "FEES OR QUANTITATIVE LIM ITATIONS 9 "SEc. 608. In carrying out the provisions of this title, 10 the Secretary shall advise the President , as necessary, under 11 section 22 of the Agricultural Adjustment Act of 1933, reen12 acted by the Agricultural Marketing Agr eements Act of 13 1937, of the need to impose fees or qua ntitative limitations 14 on any article or articles that may be imported, to ensure 15 that such article or articles that may be imported do not 16 render ineffective the loan and purchase pro grams authorized 17 under this title. 18 "TRANSITION REGULATIONS 19 "SEc. 609. (a) The Secretary may issue suc h regula20 tions as the Secretary determines necessary to carry out this 21 title, including procedures to ensure the equ itable treatment 22 of producers with wheat or feed grains und er loan at such 23 time that the marketing certificate program aut horized under 24 this title takes effect. 25 "(b) The procedures prescribed under subsectio n (a) 26 shall offer such producers the opportunity to extend the https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis WE 4267 111 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ilM1=11111 20 1 period of such loans, forfeit the grain securing such loans, or 2 continue to store such grain in a manner that will reduce to 3 the Government the cost of otherwise acquiring and Storing 4 such grain. In no case shall such procedures require produc- 5 ers to redeem grain held under section 110. 6 "USE OF THE COMMODITY CREDIT CORPORATION 7 "SEc. 610. The Secretary shall carry out programs pro- it 8 vided for under this title through the Commodity Credit 9 Corporation. "EXPORT INCENTIVES 10 11 "SEC. 611. The Secretary of Agriculture shall provide 12 agricultural commodities or cash, or both to the extent neces- 13 sary to reduce to world price levels, as determined by the 14 Secretary, the cost to exporters (including the cost of acquisi- 15 tion, handling, and an amount that reflects a fair return to 16 such exporters) of grain purchased for export by such export17 ers and accompanied by a marketing certificate as provided 18 under this title.". 19 20 SEC. 102. TECHNICAL AMENDMENTS. (a) 1938 ACT.—Effective for each of the 1986 through 21 1990 crops of wheat and feed grains, the Agricultural Ad22 justment Act of 1938 is amended by 23 (1) in section 301(b)(6)- 24 (A) inserting "(excluding wheat and corn 25 with respect to any crop in which a program is in •'; https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 21 1 effect under title VI of the Agricultural Act of 2 1949", and 3 (B) adding at the end thereof the following: 4 "(D) 'Market', in the case of wheat and feed 5 grains of any crop for which a program is in effect 6 under title VI of the Agricultural Act of 1949, 7 means to dispose of by voluntary or involuntary 8 sale or exchange."; 9 (2) inserting "or title VI of the Agricultural Act 10 of 1949" after "this Act" both places that phrase ap- 11 pears in section 372(d); 12 (3) in section 373- 13 (A) striking out "corn" both places that word 14 appears in the first sentence of subsection (a) and 15 inserting in lieu thereof "feed grains"; 16 (B) inserting "and title VI of the Agricultur- 17 al Act of 1949" after "this title" in the second 18 sentence of subsection (a); and 19 (C) striking out "corn, wheat" in subsection 20 (b) and inserting in lieu thereof "feed grains", and 21 inserting "and title VI of the Agricultural Act of 22 1949" after "this title"; 23 (4) in section 375(a), inserting "other feed 24 grains," after "corn", and inserting "or title VI of the 25 Agricultural Act of 1949" after "this title"; and 0H1 4267 W https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis •).) .10•••I 2 ltual Act (5) inserting ''and title VI of the Agricu it appears in of 1949" after "this title" both places 3 section 376. 4 (b) 1949 1 ACT.—Effective for each of the 1986 through , section 401(c) of the 5 1990 crops of wheat and feed grains 1(c)) is amended by 142 C. S. U. (7 49 19 of t Ac ral ltu icu 6 Agr following: "Compliance 7 inserting after the first sentence the under title VI, if pro8 by the producer with requirements crop, shall be required a for ect eff in are Vi le tit er und s am 9 gr 10 as a condition of price support.". TITLE II—DEBT ADJUSTMENT 11 12 PROGRAM. SEC. 201. DEBT ADJUSTMENT lopment Act (7 ve De l ra Ru d an rm Fa ted ida sol Con e Th 13 adding at the end thereof by d de en am is .) seq et 21 19 C. S. U. 14 15 the following: provide a debt adll sha ary ret Sec e Th (a) 3. 35 . Ec "S 16 this section referred to as in ter naf rei (he m ra og pr nt tme jus 17 18 the 'program') utilizing19 "(1) new operating loans; and 20 "(2) new farm ownership loans ed in this section, in vid pro ise erw oth as ept exc d, tee 21 guaran of this Act other than this s ion vis pro the h wit e anc ord acc 22 23 section. on 4267 ILl https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 23 1 "(b) A guarantee under the pro gram shall be for the 2 equivalent of 90 per centum of pri ncipal and accrued interest 3 of the new loan. 4 "(c) Guarantees may be made under the program only 5 with respect to new loans to ope rators of not larger than 6 family farms who7 8 9 10 "(1) do not have the ability to repay the ir existing loans under current terms and condition s; or "(2) do not have adequate security for their existing loans without debt adjustment. 11 "(d)(1) A lender whose loan is gua ranteed under the 12 program shall permanently cancel existing indebtedness, to 13 that lender, of the operator to whom the new loan is made, to 14 the extent necessary to assure that such new loan will show 15 a positive cash flow for at least a 5 -year period. 16 17 18 19 20 "(2) For the purposes of this sectio n, a loan shows a positive cash flow if, for the period suc h cash flow is to be examined, anticipated cash inflows are at least 100 per centum of anticipated cash outflows. Su ch anticipated cash inflows and outflows shall include all ant icipated cash inflows 21 and outflows from farm and nonfarm activities, but shall ex22 elude capital expenditures. 23 "(e)(1) A cancellation under this subsectio n shall be— eHR 4267 111 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 24 1 "(A) an immediate cancellation of existing indebt- 2 edness (including principal or accrued interest, or both 3 such principal and accrued interest); 4 "(B) a reduction in the interest rate; or 5 "(C) a combination of such an immediate cancella- 6 tion and such a reduction; 7 so that the outstanding amount of the original debt (including 8 both principal and accrued interest) is directly or in effect 9 reduced by not less than 10 per centum. 10 "(2) Whatever method is used under paragraph (1) to that 11 effect the cancellation, the Secretary shall by rule assure ng 12 there results the same level of Federal risk exposure, duri new 13 each year of that exposure, under the guarantee of the the 14 loan as there would under an immediate cancellation of 15 equivalent percentage. 16 "(f) The interest rate on a loan guaranteed under the to the 17 program shall not exceed the rate of the cost of funds shall 18 lender at the time such contract is made. The Secretary on an 19 make a payment to the lender of an amount equal, ction for 20 annualized basis, to 1 percentage point of the redu 21 each ten per centum of the debt written off. 22 23 "(g) The Secretary may prescribe additional terms and conditions to be met by the lender and the borrower with 24 respect to loans guaranteed under the program. •HR 4267 111 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • 25 1 "(h) The Secretary may issue regulations to carry out 2 this section.". 3 4 5 TITLE III AGRICULTURAL LOAN LOSSES SEC. 301. ACCOUNTING AND RELATED EVALUATIONS Section 13 of the Federal Deposit Insurance Act (12 6 U.S.C. 1823) is amended by adding at the end thereof the 7 following: 8 "(j)(1) The appropriate Federal banking agency shall 9 permit an agricultural bank to take the actions referred to in 10 paragraph (2) if it finds that there is no evidence that fraud or 11 criminal abuse on the part of the bank led to the losses re12 ferred to in paragraph (2). 13 "(2)(A) Any loss on any qualified agricultural loan that 14 an agricultural bank would otherwise be required to show on 15 its annual financial statement for any year between Decem16 her 31, 1984, and January 1, 1990, may be amortized on its 17 financial statements over a period of not to exceed 10 years, 18 as specified in regulations issued by the appropriate Federal 19 banking agency. 20 "(B) An agricultural bank may reappraise the value of 21 any real estate or other property, real or personal, that it 22 acquired coincident to the making of a qualified agricultural 23 loan and that it owned on January 1, 1985, and any such 24 additional property that it acquires prior to January 1, 1990. 25 Any loss that such bank would otherwise be required to show •HR 4267 III • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 26 1 on its annual financial statements as the result of such reap2 praisal may be amortized on its financial statements over a 3 period of not to exceed 10 years, as specified in regulations 4 issued by the appropriate Federal banking agency. 5 "(3) The appropriate Federal banking agency may issue 6 regulations implementing this subsection with respect to 7 banks that it supervises. 8 '410 "(4) As used in this subsection- 9 "(A) the term 'agricultural bank' means a bank 10 which is significantly involved in agricultural lending, 11 as determined by the appropriate Federal banking 12 agency, and the deposits of which are insured by the 13 Federal Deposit Insurance Corporation; and 14 "(B) the term 'qualified agricultural loan' means a 15 loan made to finance the production of agricultural 16 products or livestock in the United States, a loan se- 17 cured by farmland or farm machinery, or such other 18 category of loans as the appropriate Federal banking 19 agency may deem eligible.". 0 •HR 4267 IH BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 PAUL A. VOLCKER March 31, 1986 CHAIRMAN The Honorable W. Henson Moore House of Representatives Washington, D.C. 20515 Dear Mr. Moore: Thank you for your letter of March 13 requesting information concerning the Federal Reserve System's effort to develop second generation currency processing equipment. The Federal Reserve System has entered into research and development contracts with REI, G&D, and Toshiba for the design and fabrication of prototype second generation currency processing equipment. It is important to note that these research and development agreements are "fixed price" in nature and that the Federal Reserve System has not entered into a "funding" relationship with any of the three named vendors. As a result of these contracts, the companies have developed prototype currency processors, utilizing varying technical approaches, which are now being tested at three Reserve Bank locations. The Federal Reserve System contracts with each vendor, REI, G&D, and Toshiba, contain a confidentiality clause which prohibits the disclosure of information regarding the contract to third parties. Thus, we are precluded from unilaterally releasing information concerning the contract prices without the express permission of each individual vendor. You have also requested additional information concerning the selection process of second generation currency processing equipment. In the initial prototype development phase, 23 vendors were invited to provide prototype proposals. As a result of this phase, two United States companies and two foreign companies were awarded prototype development contracts in 1983. Of these vendors, REI, G&D, and Toshiba successfully completed prototype processors. These prototype processors are currently being tested to determine whether they meet Federal Reserve requirements. The Federal Reserve System is now entering the second phase of the procurement project wherein priced equipment production and maintenance proposals will be solicited from REI, G&D, and Toshiba. The proposal solicitation and evaluation will https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • The Honorable W. Henson Moore Page Two be conducted pursuant to the Federal Reserve System's Uniform Acquisition Guidelines, and foreign vendors' equipment prices will be inflated by 6 percent prior to comparison with U.S. vendors' prices in compliance with the spirit of the Buy American Act. It is anticipated that the request for proposal ("RFP") document, which is currently being drafted by Federal Reserve personnel, will be supplied to the vendors during May 1986. Since the RFP will inform the vendors of the Federal Reserve's requirements, advance publication could compromise the fairness of the procurement. We would be pleased, however, to provide you with a copy of the RFP at the same time it is made available to the vendors. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Sincerely, Si Paul A. Volcker RBS:CO:vcd/pte (V-74, 86-1471) bcc: Mr. Sese Mr. Bennett Mr. Allison Mrs. Mallardi (2) Action assigned :':essrs. •Allison & Donkler W. HENSON MOORE WASHINGTON OFFICE 6TH DISTRICT, LOUISIANA 2183 RAYBURN HousE OFFICE BUILDING WASHINGTON, DC 20515 (202) 225-3901 COMMITTEE ON WAYS AND MEANS DISTRICT OFFICES: • HEALTH SUBCOMMITTEE 236 FEDERAL BUILDING 750 FLORIDA STREET BATON ROUGE, LA 70801 (504) 344-7679 COMMITTEE ON THE BUDGET Congrefs5 of tbe 11)tattli nittb: MOBILE OFFICE HAMMOND TELEPHONE (504) 345-4929 34ousse of Repret(entatibet4 ensbington, IID 20515 2 0; March 13, 1986 1, cn --T-1 --a rn Z5 -in ril Eg Pt 73 I= rtl 74 c= ...„.10 ---4-1 —*I) rm —4 C7:', ... a =ri" ...4 Mr. Paul C. Volcker Chairman, Board of Governors Federal Reserve System Washington, D.C. 20551 co c., A Cr) ....04 CI —'1 G.> cr 0• ' m21: CD 73 ,.... -.0 •••••• cp cm xr- Dear Mr. Volcker: in A member of my staff has been talking with Fed staff both being Washington as well as in Cleveland about the development work conducted on a second generation currency processing machine. It is my understanding that the Fed is funding three companies -- REI, Dallas, Texas; G&D from Germany; and Toshiba from Japan. It is also my understanding that the amounts of funds which these companies are receiving cannot be released to interested parties without the approval by these companies of the release of this information. I would appreciate your confirming these statements and providing any additional information on the selection process and how the final decision on which company will be selected to manufacture these I am particularly interested in the machines will be made. may criteria and any considerations regarding foreign companies which be used in the selection process. A prompt response will be greatly appreciated. With kindest personal regards, I remain Sincerely yours, W. Henson Moore Member of Congress WHM:dla https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis •• • •• • •• of GOtrt •. .9 0 0 BOARD OF GOVERNORS • OF THE FEDERAL RESERVE SYSTEM •0 •"I • •-k LU i•-• • • WASHINGTON, D. C. 20551 tIN March 28, 1986 .RAL RES • •..• • The Honorable Patricia Schroeder Member of Congress 1600 Emerson Street Denver, Colorado 80218 Re: Eisenman/cd Dear Ms. Schroeder: I am writing in further response to your letter of February 20 on behalf of your constituent, Ms. Athena J. Eisenman, concerning her termination of employment with the Denver Branch of the Federal Reserve Bank of Kansas City. The Kansas City Reserve Bank has completed its review of this matter and has furnished the following information. Ms. Eisenman was employed by the Denver Branch for approximately two and one-half, ending on February 6, 1986. During her employment, Ms. Eisenman was placed in three different job assignments in an unsuccessful effort to find a position with which she was satisfied and in which she performed well. Ultimately, her dissatisfaction appeared to affect her job performance and her ability or willingness to cooperate with co-workers and supervisors. These circumstances led to the termination of her employment. Ms. Eisenman did not file a "civil rights suit", but rather an administrative claim with the Colorado Civil Rights Commission and the United States Equal Employment Opportunity Commission in September of 1984. That claim was resolved at the administrative level in October of 1984 through execution of a no-fault settlement agreement. The filing and settlement of that administrative action had no bearing on the decision to terminate Ms. Eisenman's employment, and her termination in no way violated the terms of the settlement. With respect to the materials that Ms. Eisenman has requested, consistent with Reserve Bank policy, the Bank has sent to Ms. Eisenman copies of the following documents: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Honorable Patricia Schroeder Page Two 1. personnel file material; 2. a job S escription of the last position she held; 3. Ms. Eisenman's medical file as maintained by the staff nurse; 4. the Reserve Bank's Employee Manual; and 5. the Reserve Bank's copy of the Settlement Agreement filed with the Colorado Civil Rights Commission (Ms. Eisenman received her own copy at the time the agreement was executed). The Reserve Bank does not prepare a written statement of termination and has not developed a training manual for the last position that Ms. Eisenman held. Supervisory notes and other internal memoranda are excluded from release under Reserve Bank policy. I hope this information is useful. if we can be of further assistance. Please let me know Sincerely, S/Donabd J. Winn Donald J. Winn Assistant to the Board Note: Incoming corres. returned JRB:CO:vcd (V-62, 86-965) bcc: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis James R. Bowen, Senior VP, FRBk. of Kansas City Wally Wood Mrs. Mallardi BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20 551 PAUL A. VOLCKER March 27, 1986 CHAIRMAN The Honorable Fernand J. St Germain Chairman Subcommittee on Financial Institutions Supervision, Regulation and Insurance Committee on Banking, Finance and Urban Affairs House of Representatives Washington, D.C. 20515 Dear Chairman St Germain: Thank you for your letter of March 17 asking the Federal Reserve to participate in your Subcommittee's hearing on the condition of the banking system in the areas of agricultural lending, energy lending, and lending to less developed countries. I am pleased to let you know that Vice Chairman Preston Martin will appear on behalf of the Board on Wednesday, April 9, at 10:00 a.m. Sincerely, CO:vcd (V-75, 86-1495) bcc: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Vice Chairman Martin Mr. Struble Mrs. Mallardi (2)\,/ • FERNAND J. ST GERMAIN. RHODE ISLAND. CHAIRMAN 'FRANK NN;111)4Z10. ILLINOIS CARROLL HUBBARD, JR.. KENTUCKY DO'JG BARNARD. JR.. GEORGIA JOAN J. L•FALCE, NEW YORK MARY ROSE OAKAR. OHIO BRUCE F VENTO, MINNESOTA ROBERT GARCIA. NEW YORK CHARLES E. SCHUMER. NEW YORK BARNEY FRANK. MASSACHUSETTS RICHARD H LEHMAN. CALIFORNIA JIM COOPER. TENNESSEE BUDDY ROEMER. LOUISIANA MARCY KAPTUR. OHIO BILL NELSON. FLORIDA PAUL E. KANJORSKI. PENNSYLVANIA BART GORDON, TENNESSEE THOMAS J MANTON, NEW YORK A‘,,aiting Chairman's decision; Fred Struble draftiny statement CHALMERS P V/YUE OHIO JIM LEACH. IOWA STEWART B. McKINNEY. CONNECTICUT NORMAN D. SHUMWAY. CALIFORNIA BILL NIcCOLLUM, FLORIDA GEORGE C WORTIFf. NEW YORK DAVID DREIER, CALIFORNIA STAN PARRIS. VIRGINIA MARGE ROUKEMA. NEW JERSEY DOUG BEREUTER NEBRASKA STEVE BARTLETT, TEXAS TORY ROTH, WISCONSIN U.S. HOUSE OF REPRESENTATIVES SUBCOMMITTEE ON FINANCIAL INSTITUTIONS SUPERVISION, REGULATION AND INSURANCE OF THE COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS NINETY-NINTH CONGRESS ROOM B-303 RAYBURN HOUSE OFFICE BUILDING WASHINGTON, DC 20515-6051 March 17, 1986 Honorable Paul A. Volcker Chairman, Board of Governors Federal Reserve System 20th and Constitution Avenue, N.W. Washington, D.C. 20551 Dear Mr. Volcker: To assist this Subcommittee in the discharge of its responsibilities, you, or your designee, are requested to appear on Wednesday, April 9, 1986, in Room 2128, Rayburn House Office Building, at 10:00 a.m., to provide testimony to the Subcommittee on the nature and the magnitude of bank difficulties in the areas of agricultural lending, energy lending, and lending to less developed countries. You are specifically asked to testify on the following matters of concern to the Subcommittee. 1. In terms as precise as your resources permit, what is the nature and magnitude of bank difficulties in: (a) agricultural lending, (b) energy lending, and (c) lending to less developed nations? You are specifically requested to include in your testimony the information and statistics, as discussed with your staff, listed on the attached pages. 2. Are there any changes in existing law or regulation affecting bank capital requirements or accounting practices that should, in your judgment, be implemented to ameliorate conditions in the farm, energy, and developing nation lending areas? In accordance with Committee Rules, please deliver 175 copies of your prepared statement to Room B303 Rayburn House Office Building twenty-four hours in advance of your scheduled appearance. Your statement in its entirety will be included in the hearing record and, if delivered as requested, the statement will be made available to all Subcommittee Members in advance of the hearing. To provide all Subcommittee Members with sufficient time for questioning, the oral presentation of your prepared statement must be limited to ten minutes. Sin erely, • FJStG:dTv https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis n J. St Germain rman % - . • Please provide the needed information and statistics specified below. AGRICULTURE I. Agriculture States (A) The states in which bank agricultural loans are concentrated and the percentages of concentration in each state; (B) The states that account for the majority of agricultural banks and the number of agricultural banks in each of those states; (C) The states in which over half of the banks are agricultural banks; and (D) The states with the greatest number of agricultural banks with the number of agricultural banks in each state. II. Agricultural Banks (A) Problem loans at agricultural banks as compared with non—agricultural banks, expressed as classified assets as a percentage of gross capital funds, on a quarterly basis from the fourth quarter of 1982 to the present: (B) The number of agricultural bank failures yearly from 1982 to the present, as compared with the number of other commercial bank failures and savings bank failures for each year during the same time period; (C) The number of problem agricultural banks semiannually from 1982 to the present, as compared with the number of other problem banks semiannually during the same time period; and (D) The projected number of agricultural bank failures and the total assets involved for 1986, and the estimated number of problem agricultural banks and the total assets projected for 1986. III. I I i One—bank Communities From 1982 to the present, on a yearly basis, the number of: (A) Agricultural banks that were the only banks in their communities; (B) Failed agricultural banks that were the only banks in their communities; and (C) Problem agricultural banks that were the only banks in their communities. ENERGY I. Classified Energy Loans The percentage of classified energy loans as a percentage of equity plus loan loss reserves, for banks in the following size categories: (A) Assets under $300 million (B) Assets between $300 million and $1 billion (C) Assets over $1 billion, II. Large Energy Lenders Annual statistics since 1980 on the 25 largest energy lending institutions having energy loans constituting at least 5.0% of total assets on the: (A) Dollar value of energy loans and size of that dollar value expressed as a percentage of totals assets; and (B) Dollar value and percentage of total energy loans deemed to be classified or non—performing loans by the banking regulatory agencies. . le https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis % LENDING TO LESS DEVELOPED NATIONS I. Breakdown of total public and private foreign debt On a country—by—country basis, the total amount of privat e sector debt, public sector debt, and total debt owed U.S. financial institutions in , the following size categories: (A) Assets under $300 million (B) Assets between $300 million and $1 billion (C) Assets over $1 billion. II. Foreign debt of largest U.S. institutions by country The total amount of foreign debt held by the largest 25 U.S. financial institutions; and a breakdown by institution of the amount of this foreign lending to Mexico, Brazil, Argentina, Nigeria, Venezuela, Chile, and the Philippines, with a similar breakdown of how much of this debt has been deemed to be classified or non—performing by the banking regulatory agencies. III. Debt restructuring https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The extent of debt restructurings since 1980 for the 7 debtor nations listed in section II to U.S. financial institutions. BOARD OF- GOVERNORS ii OF THE FEDERAL RESERVE SYSTEM WASHINGTON, O. C. 20SSI PAUL A. VOLCKER March 26, 1986 •••• CHAIRMAN The Honorable Vic Fazio House of Representatives Washington, D.C. 20515 Dear Mr. Fazio: Thank you for your letter of January 29 regarding a GAO report (GAO/RCED-86-50) on the Kettleman Hills hazardous waste disposal facility and the Federal Reserve Bank of San Francisco's use of that facility. The enclosed staff report indicates that the Reserve Bank is in compliance with all applicable federal, state, and local statutes, ordinances and regulations governing the handling and disposal of its hazardous waste. Also, all waste sent to Kettleman Hills met all required operating specifications as approved by the Environmental Protection Agency Let me assure you that the Federal Reserve System will continue to comply with all the EPA requirements on the disposal of currency and food coupon residue. If further discussion or clarification is needed, your staff may wish to contact Mr. Theodore E. Allison, Staff Director for Federal Reserve Bank Activities, at 452-2793. Sincerely, • Enclosure RSP:TEA:LSF:vcd/pte (V-32, 86-521) bcc: Mr. Robert T. Parry (FRBk. of San Francisco) https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mr. Douglas Shaw (FRBk. of San Francisco) Mr. Allison Ms. Pianalto Mrs. Mallardi (2) 0/ • 4, March 26, 1986 Staff Report to Congressman Fazio on Use of the Kettleman Hills Hazardous Waste Disposal Facility The Kettleman Hills Hazardous Waste Disposal Facility, operated by Chemical Waste Management, Inc. (CWM), is fully licensed by state and federal authorities to receive hazardous waste. Kettleman Hills is used by the Los Angeles Branch of the Federal Reserve Bank of San Francisco for the disposal of destroyed currency and food coupons. All waste sent to Kettleman Hills met all operating specifications as outlined in the CWM facilities waste analysis plan as approved by the Environmental Protection Agency (EPA). The EPA stopped using the Kettleman Hills facility as a Superfund cleanup dump site because of alleged technical violations which, in fact, were never proven in any proceedings. No direction was ever given by the EPA to the San Francisco Federal Reserve Bank to cease dumping at the site. Also, the operators of Kettleman Hills were not aware of the EPA policy until advised by contractors. Only after the operators questioned the EPA about it was the EPA's policy put in writing. It appears that the EPA did not consider the alleged violations to be serious enough to close the site. The Subcommittee on Oversight and Investigations of the House of Representatives Committee on Energy and Commerce asked that the General Accounting Office (GAO) look into the federal https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -2 agencies' use of the Kettleman Hills facility after the EPA had cited the facility for violations. The GAO report concluded that federal agencies continued to dispose of hazardous waste at the Kettleman Hills facility after the site had been banned from receiving Superfund cleanup wastes. However, it emphasized that no policy or procedure exists which prohibits federal agencies from continuing to use a disposal site which is accused of experiencing environmental problems. Furthermore, federal agencies are not being provided with information on facilities that are experiencing environmental violations. Therefore, federal agencies have difficulty in assessing the compliance status of the facilities and determining if use of a facility should be avoided. The GAO report recommends that federal agencies should not dispose of hazardous waste at disposal facilities that the EPA has determined were experiencing significant Resource Conservation and Recovery Act environmental problems. However, most of the disposal facilities licensed to receive hazardous waste appear to be experiencing significant environmental problems. Therefore, it was deemed inappropriate for the Reserve Bank to incur increases in operating costs by seeking another facility to be used for disposal of wastes when Kettleman Hills was still a state -certified and an EPA-certified site. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Using this facility appears to have been--and still to osal be--the only economical and practical solution for the disp are of currency and food coupon residue while other solutions being thoroughly investigated. Since the toxicity in the destroyed currency and food Bank coupons was discovered, the San Francisco Federal Reserve l has complied with all applicable federal, state, and loca ling and statutes, ordinances, and regulations governing the hand disposal of its hazardous waste. Furthermore, extensive efforts currency are being made to seek out alternatives to dumping the and food coupon residue. Incineration and recycling possibili- ties are being explored as possible alternatives. In any event, the the problem appears to be resolved for the present since Kettleman Hills facility is no longer under citation. In 1983, the Bureau of Engraving and Printing removed the lead from the ink used to print currency. The Department of ula for Agriculture also removed the lead from the printing form food coupons in 1983. Although it will take time for the old is all money and food coupons to wear out to the point that it to destroyed, the situation is improving and will continue improve over time. Eventually, therefore, the residue from be suitable destroyed currency and food coupons will once again for ordinary waste disposal sites. very We wish to emphasize that the Federal Reserve took food stamps seriously the discovery that shredded currency and https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • -4- in California were regarded as hazardous under the state's regulation. All Federal Reserve offices in the country were directed to have their shredded currency and food stamps analyzed against federal and local environmental standards. All offices except those in California, where the state standard differs considerably from those of the federal government, were found to be in compliance, and the two California offices immediately made new provisions to dispose of their materials. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis JAAt WAN. I.ITA/4. CHAIRMAN JOHN HEINZ. PENNSYLVANLA WILLIAM L ARMSTRONG. COLORADO ALFONSE M. 0 AMATO. NEW `MOM SLADE GORTON. WASHINGTON MACE MATTINGLY. GEORGIA CHIC HECHT, NEVADA PHIL GRAMM, TEXAS WIUJAM PROXMIRE. WISCONSIN ALAN CRANSTON. CAUFORNLA DONALD W RIEGLF_ JR, MICHIGAN PAUL S. SAABANES. MARYLAND CHRISTOPHER J. DODO, CONNECTICUT ALAN DIXON. IUJNOIS JIM SASSER. TENNESSEE M. DANNY WALL STAFF DIRECTOR ICENNETH A. McliAlt MINORITY STAFF DIRECTOR • nittd aStatcs eSenatt COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS WASHINGTON, DC 20510 aoARo OF NORS OF ;OVER THE FEDERAL RESERVE SISft7! 1986 MAR 28 AM II: 25. RECEIVED OFFICE OF 711E March 25, 1986 The Honorable James A. Baker III Secretary Department of the Treasury 1500 Pennsylvania Ave., N.W. Washington, D.C. 20220 Dear Mr. Secretary: The International Banking Act of 1978 embodies the principle of national treatment. Foreign banks in the U.S. enjoy an equality of competitive opportunity with our own domestic banks under that principle. Congre ss adopted the national treatment principle in the expectation that our trading partners would take steps to accord the foreign operations of U.S. banks a similar equality of competitive opportunity. The 1978 Act required the Treasury Department to study the then-existing foreign competitive environment for our institutions, and in 1979, Treasury completed its "Report to Congress on Foreign Government Treatment of U.S. Commercial Banking Organizations." That report identified many instances where U.S. banks seeking to operate abroad did not receive national treatment from our trading partners. I have remained concerned over the continued slowness of progress by some of our trading partners toward treatment of our institutions with.the same fairness that we treat theirs. In 1983, I introduced 16gislation that would require the Comptroller of the Currency, when acting on an application by a foreign bank to open a U.S. branch, to consider the treatment of U.S. banks in the applicant bank's home country. In early 1984, I requested an update of the 1979 report. That new report, which the Treasury Department published in July, 1984, showed some progress had been made, but certain countries continued to maintain their barriers against U.S. participation. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Honorable James A. Baker III March 25, 1986 Page 2 I have actively pursued this issue through meetings with government officials and bank representatives from Canada and in several countries in the Pacific Basin, to discuss and push for competitive equity . The Banking Committee also held one day of hearings in Septem ber of 1984 on the subject of national treatment. One of the principal recommendations of the hearing was that there be a frequent updating of the national treatment study. While improvement is taking place, I am not at all satisfied with the rate of change, and I remain concerned about the degree of change in certain cou ntries and the total lack of improvement in other countr ies. In order to get a clear assessment of wha t the current situation is, I would appreciate your pro viding this committee with an updated national treatment report as soon as possible. Since publication of the Treasury's 1984 report, the ability of U.S. institutions to export the ir expertise in electronic funds transfer systems has contin ued to increase in importance. Opening foreign markets to our exports of such new technologies should be part of our eff ort to reduce our balance of payments deficits. Recent events, moreover, highlight the fac t that the national treatment issue is broader than just the commercial banking segment of the financial services industry. While the Japanese government continues discrimin atory restrictions on securities activities of U.S. firms in Tokyo, three Japanese firms are seeking approval from the Federal Reserve Bank of New York to become primar y dealers in U.S. government securities. In preparing an updated report on national treatment as practiced by our trading partners, I would apprec iate your giving special attention to the EFTS issue and you r broadening the study to cover all segments of the fin ancial services industry. 044E1 Sincerely, cc: The The The The The https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Hon. Hon. Hon. Hon. Hon. George P. Shultz Paul A. Volcker L. William Seidman Robert L. Clarke John S.R. Shad .• •• of Govi ••• 4' .•*0 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 March 25, 1986 PAUL A. VOLCKER CHAIRMAN The Honorable George Bush President of the United States Senate 20510 Washington, D.C. Dear Mr. Vice President: In accordance with the requirements of the Freedom of Information Act, I am submitting the Annual Report of the Federal Open Market Committee of the Federal Reserve System covering the implementation of its administrative responsibilities under the Act during the calendar year 1985. Sincerely, SI Paul A. Volcker Enclosure https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NB:pte bcc: Mr. Barnard Mrs. Mallardi (2) / Identical letters also sent to: Speaker O'Neill Chairman Roth Chairman English . .. ▪ GOIrt .•• of .• 0 -"T4, • •01- /%;)- v),\ 0 • •G o •0 • • •-k BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, 0. C. 20551 cr. PAUL A. VOLCKER March 21, 1986 CHAIRMAN The Honorable Raymond J. McGrath House of Representatives Washington, D.C. 20515 Dear Mr. McGrath: Thank you for your letter of March 11 concerning overtures being made by a foreign firm to supply a covert counterfeit deterrence system for use on U.S. currency. The Federal Reserve is now pursuing the development of prototypes of two such systems through contracts with U.S. firms that were selected as a result of earlier competitive procurements. This action is being guided by an interagency steering committee chaired by the Treasurer of the United States. This committee was set up by the Secretary of the Treasury to coordinate the various roles of the Federal Reserve and Treasury in counterfeit deterrence and to advise him on related matters. Work under the two contracts has progressed satisfactorily to the point of planning for the procurement of operating systems. Various approaches to this procurement are being considered, including a solicitation of bids. A foreign firm submitted an unsolicited proposal for a currency authentication system to the Board of Governors in November 1984. This proposal was carefully reviewed and originally rejected by the interagency steering committee because it did not appear to offer sufficient advantage to warrant changing the course of prototype development. It is now being reevaluated to see if it deserves consideration under the procurement options being examined. In execution of its responsibilities, the interagency steering committee is carefully weighing the security implications of having a currency authentication system supplied by a non-U.S. firm. Any consideration of bids from non-U.S. firms will proceed in accordance with existing Department of Defense regulations on industrial security, which are very detailed and exacting. I can assure you that I understand your concerns about the matter and appreciate your correspondence. Sincerely, (JMD):CO:vcd (V-73,86-1470) bcc: Mr. Denkler Mr. Allison Mrs. Mallardi (2)\// https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis L RAYMOND J. McGRATH 5TH DISTRICT, NEW YORK MEMBER COMMITTEE ON WAYS AND MEANS SUBCOMMITTEE ON SELECT REVENUE MEASURES SUBCOMMITTEE ON OVERSIGHT Action assigned f:essrs. Allison Congre.eq‘ of tbe Ziniteb a Denkler tateci ji)ouZe of RepretientatibesS 04: afSbington, Me 20515 WASHINGTON OFFICE: Room 205 CANNON HOUSE OFFICE BUILDING (202) 225-5516 DISTRICT OFFICE 203 ROCKAWAY AVENUE VALLEY STREAM, NY 11580 (516) 872-9550 March 11, 1986 The Honorable Paul Volcker Chairman Federal Reserve System Twentieth & Constitution Ave., N.W. Washington, New York 20551 Dear Mr. Volcker I am writing to express my concern over potential security risks affecting the Covert Currency Authentication Program. Two U.S. firms were awarded initial contracts to offer systems for protecting U.S. currency from worldwide counterfeiting in 1983. It is my understanding that a foreign firm had initially competed in the bid process but was disqualified because it was unwilling to disclose vital information critical to the security of the currency. A second phase of this project is now open to competitive bids. It is possible that the foreign firm which lost the initial bid will once again compete. I am very concerned that a foreign firm unwilling to conform to the standards of our competitive process may become involved in this most sensitive program to safeguard our currency. It would be extremely illadvised to involve a foreign competitor in such a project if it were trying to sell to the U.S. Government any part of a system which is presently known to other governments or foreign banking communities. I am quite surprised that foreign entities were even allowed to bid at all on such a sensitive contract. It would seem inimical to our national security and the program itself to even consider a foreign firm in a covert currency authentication program. I would appreciate being informed of the status of the competition, and whether any foreign film:, are being allowed to compete. In addition, if such firms are permitted to compete, I would like to know what security measures are being instituted to insure the integrity of the program. Sincerely Raymond J. McGrath Member of Congress RJM/rrbr https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BOARD OF GOVERNORS • OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 March 20, 1986 The Honorable Charles McC. Mathias, Jr. United States Senate Washington, D.C. 20510 Dear Senator Mathias: Thank you for your letter of February 27 requesting comment on the enclosed correspondence from your constituents, Mr. James L. Dunbar, Sr., and Mr. Peter L. Babb, concerning the proposed addition of armored car services to the list of permissible nonbanking activities for bank holding companies in the Board's Regulation Y. This activity is one of a number of proposed additions to the list of permissible activities that are part of a rulemaking proceeding pending before the Board. For your information, I have enclosed a copy of the press release requesting comment on the proposed rule change. Your constituents' comments have been included in the public comment file on this proposal and will be carefully considered by the Board before it makes a final decision on whether to permit the armored car activity for bank holding companies. The Board has not yet scheduled the matter for final consideration. You may be assured I will keep your office advised when the Board takes action on the proposed rulemaking or should the status of the proposal change in any respect. Sincerely, Donald J. Winn Assistant to the Board Enclosures https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CO:vcd (V-77, 86-1513,1514) bcc: Kay Bondehagen Paula Hillery (w/copy of incoming) Mrs. Mallardi,/ CLO drafting response CHARLES McC. MATHIAS, JR. MARYLAND United e5tates nate WASHINGTON, DC 20510 February 27, 1986 The Hon. Paul A. Volcker Federal Reserve Board Washington, D.C. 20551 Dear Chairman Volcker: Because of the desire of this office to be responsive all inquiries and communications, your consideration of the attached correspondence from Mr. Peter L. Babb and Mr. James L. Dunbar, Sr. is requested. Your findings and views, in duplicate form, along with return of the enclosure, will be appreciated. Please reply to the attention of Mr. Rhodes. With best wishes, Sincerely, Charles McC. Mathias, Jr. United States Senator CM:gr Enclosure https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • Federal Armored Express, Inc. 7675 Canton Center Dr. Baltimore, MD 301 /2B5-7000 Telex No. 322883 Mailing Address: Post Office Box 333 January Baltimore, MO 21203-0333 9, 1986 Senator Charles McC Mathais, Jr. United States Senate Washington, DC 20510 Dear Senator Mathais: Offices: Baltimore, MD Boston, MA Charlotte, NC Cincinnati, OH Cleveland, OH Colmar, PA Cumberland, MD Durham, NC Fayetteville, NC Greensboro, NC Indianapolis, IN Los Angeles, CA Milwaukee, WI Myrtle Beech, SC Norfolk, VA Pennesuken, NJ Pittsburgh, PA Raleigh, NC Richmond, VA Rockville, MD Springfield, VA Tempe. FL Washington. DC Wilmington, NC Winston-Salem, NC https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I wrote to you in 1984 to express my deep concerns regarding the changes in Regulation Y being considered by the Board of Governors of the Federal Reserve System. Specifically, I objected to the Federal Reserve allowing bank holding companies to operate armored car services. I understand the Board of Governors will be considering the proposed changes to Regulation Y in January. Since I believe it would be unfair to allow banks to compete with our firm, please contact Mr. Paul A. Volcker, Chairman of the Federal Reserve Board, and let him know that you oppose this new activity for banks. I appreciate your assistance in this matter. informed of your progress. Very truly yours, Ja s L., unbar, Sr. / r Chilef Executive Officer Please keep me Annureb Oransport cruices, Jur. January 24, 1986 -49TPW- PETER BABB Pre dent The Honorable Charles McC. Mathias, Jr. 358 Russell Office Building Washington, D.c. 20510 Dear Senator Mathias: I am writing to you to express my deep concern regarding certain activities currently being considered by the Federal Reserve Board for classification as permissible activities for bank holding companies, under Federal Reserve Regulation "Y". Specifically, I would like to object to proposed activity Number 4, 'Armored Car Services.' The proposal to allow banks to engage in armored car service would cause irreparable damage to the armored car industry, the great majority of banks themselves, and the welfare of your constituents. This proposal would result in drastically reduced banking and armored car service to the public, unfair competition within both industries, unsound banking policies and loss of confidence in the banking industry by the general public. In a nutshell, this proposed activity would benefit only the narrow economic interests of a handful of oversized financial institutions, at the expense of the American people. Armored car service is not an extension of banking service; it is a separate industry. As such, the Federal Reserve has overreached its authority in even considering this issue. A matter of this import can only be decided by you and your colleagues in the legislative branch. I understand the Federal Reserve Board will vote on this proposal soon. Please contact Mr. Paul A. Volcker, Chairman of the Federal Reserve Board, and let him know that you oppose this new activity for banks. your actions in this matter. Please keep me med. Very truly yours, PA TAN ARMORED TRANSPORT SERVICES, INC. J 3825 Penn-Belt Place Forestville, Maryland 20747 PLB/jaw 301/420-7781 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Pe er L. Babb President BOARD OF GOVERNORS lb •%-Ua4- ig) OF THE FEDERAL RESERVE SYSTEM • •-‘ WASHINGTON, D. C. 20551 • . RAIL RtS March 18, 1986 The Honorable Dan Burton House of Representatives Washington, D.C. 20515 Dear Mr. Burton: Thank you for your letter requesting comment on correspondence you received from Mr. Robert E. Cochran. Mr. Cochran requested a publication on the Federal Reserve that "details the ownership, physical makeup and vested powers that can be relied on as truthful." I have enclosed a copy of the Federal Reserve Act of 1913, which established the Federal Reserve System. In addition, I hope the following comments will be useful to Mr. Cochran in understanding the Federal Reserve System. The Federal Reserve System, having been established by Congress in 1913, is not a "private corporation." It is made up of twelve regional Federal Reserve Banks which are supervised by the Board of Governors in Washington. The Reserve Banks are corporate instrumentalities of the Unitad States, and were established by Congress for public purposes. The Board is an agency of the Federal Government, and its seven members are appointed by the President with the advice and consent of the Senate. For Mr. Cochran's information, I have enclosed biographical sketches of the present members of the Board. The stock of the Federal Reserve Banks is held entirely by the more than 5,000 commercial banks that are members of the Federal Reserve System. In addition to state -chartered member banks which have voluntarily joined the Federal Reserve System, all national banks which are chartered by the Comptroller of the Currency, an official of the Department of the Treasury, are required by law to be members of the Federal Reserve System. These banks hold the stock of the Federal Reserve Banks. However, ownership of that stock is in the nature of an obligation incident to membership and does not carry with it the attributes of control and financial interest ordinarily attached to stock ownership in corporations that are operated for the purpose of making a profit. As provided in the Federal Reserve Act (Section 5), each commercial bank that is a member of the Federal Reserve System is required to subscribe to the stock of its Federal Reserve Bank in an amount equal to 6 percent of the https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Honorable Dan Burton Page Two paid-in capital stock and surplus of the member bank--of the 6 percent subscription required, half (or 3 percent) is paid in, and half is subject to call. The stock may not be sold or pledged as security for loans, and dividends are limited by law to 6 percent per annum. The Federal Reserve Act also provides that any surplus resulting from the liquidation of a Federal Reserve Bank shall be paid to the United States Government, and not the stockholding member banks. There is no connection between the financing of the public debt and the issuing of Federal Reserve notes. The Federal Reserve does not print money and pay it to the Treasury in exchange for bonds. The U.S. Treasury receives its funds from two sources--taxes and borrowing--and does not finance its deficits by borrowing from the Federal Reserve. Federal law does not permit the Treasury to borrow directly from the Federal Reserve. When it is necessary to raise funds, the Department of the Treasury sells Treasury bills, notes, or bonds to the general public. The Treasury is not permitted to sell these obligations directly to the Federal Reserve. The Federal Reserve, however, in conducting its monetary policy operations, may purchase such obligations in the secondary market from others who may have purchased them directly from the Treasury. Similarly, the Federal Reserve also may sell these securities on ary the open market at any time, again depending on current monet policy. These transactions are intended to influence member bank reserves, as is described in more detail in the enclosed booklet, "The Federal Reserve System--Purposes and Functions." With respect to the interest paid by the U.S. Government on the national debt, it should be noted that the Federal Reserve is not the sole owner of the Federal debt and held only g $182 billion of the $1,946 billion U.S. public debt outstandin te at the end of 1985. The balance of the debt is held by priva investors or individuals, commercial banks, insurance companies, and other investors who have purchased Treasury bills, notes, bonds or other securities. While the Federal Reserve does receive interest ($16.8 billion during 1985) on the government debt obligations it holds, it should also be noted that the Federal Reserve is not operated for a profit. The Federal Reserve returns all earnings (including interest received on U.S. government debt obligations) in excess of expenses to the Treasury; in calendar year 1985 payments to the Treasury by the Federal Reserve amounted to more than $17 billion. In recent about years, the Federal Reserve has turned over to the Treasury 90 percent of total earnings. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Honorable Dan Burton Page Three With respect to the issuance of Federal Reserve notes, your which constitute the bulk of the nation's currency, I hope constituent will find the following information useful. Section 16 of the Federal Reserve Act (12 U.S.C. § 411) provides that Federal Reserve notes may be issued at the discretion of the Board of Governors. In fact, Federal Reserve notes are issued in response to the public's growing needs for currency. As the economy expands, currency is needed by the public in order to carry out transactions. New currency is put in circulation to facilitate the public's need for cash. The amount of notes that may be issued, however, is not unlimited. For example, the amount of notes in circulation is constrained by Section 16 of the Federal Reserve Act, which requires that Federal Reserve notes be backed by collateral security with a value at least equal to the notes issued. The Federal Reserve . Act also specifies the types of collateral that are acceptable In actual practice, the Federal Reserve System distributes Federal Reserve notes in the following manner: a. Federal Reserve notes are printed at the Bureau of Engraving and Printing in Washington, D.C., as directed by the Comptroller of the Currency, an office of the United States Treasury Department. The Federal Reserve pays the costs of printing the notes, which is currently about two and one-half cents per note. b. Upon request of the Board of Governors, the Comptroller of the Currency orders Cie shipment of notes to the Federal Reserve Bank. c. The Reserve Bank holds the notes in its vaults until they are requested by depository institutions. d. Each time a depository institution orders notes, the Reserve Bank charges the amount to the ordering bank's account with the Reserve Bank, and the Reserve Bank increases its net liability for Federal Reserve notes outstanding. When the notes are sent to the requesting institution, Reserve Banks are required to pledge collateral in an amount equal to the sum of notes sent. e. Members of the public receive Federal Reserve notes when they cash checks or make withdrawals from depository institutions. When the public has on hand more notes than currently needed, the excess is deposited with banks and other https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Honorable Dan Burton Page Four depository institutions, and the process just described reverses itself. From this description, it is clear that the issuance of Federal Reserve notes does not involve lending the notes back to the government, and that the American taxpayer does not pay interest on Federal Reserve notes in circulation. In closing, I think it is important to point out that although the Board is an independent agency, the Congress does have ultimate authority over the Federal Reserve and oversees the activities of the System through relevant committees. The Board is required by law to make an annual report to the Congress, and members of the Board, especially the Chairman, are called upon frequently to testify before Congressional committees. Moreover, the general goals of the Federal Reserve have been set forth in the Full Employment and Balanced Growth Act of 1978, in which Congress laid out for the Federal Reserve, as well as for the President, the directives of promoting full employment, balanced growth of real income, adequate productivity growth, and reasonable price stability. I hope this information is helpful. if I can be of further assistance. Please let me know Sincerely, SI Donald 11 , Donald J. Winn Assistant to the Board Enclosures https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CO:vcd (V-18, 86-350) bcc: Mrs. Mallardi DAN BURTON WASHINGTON OFFICE: 6TH DISTRICT. INDIANA 120 CANNON BUILDING WASHINGTON, DC 20515 TELEPHONE- (202) 225-2276 DEPUTY WHIP COMMITTEES FOREIGN AFFAIRS POST OFFICE AND CIVIL SERVICE VETERANS AFFAIRS SELECT COMMITTEE ON CHILDREN, YOUTH AND FAMILIES CO-CHAIRMAN Congress of th Unitd eStats CONGRESSIONAL AUTO CAUCUS MEMBER REPUBLICAN TASK FORCE ON AGRICULTURE CONGRESSIONAL STEEL CAUCUS CONGRESSIONAL HUMAN RIGHTS CAUCUS tout of Represtotatiqs gashington, BC 20515 January 7, 1986 DISTRICT OFFICES: 8900 KEYSTONE AT THE CROSSING SUITE 1050 INDIANAPOLIS, IN 46240 TELEPHONE:(317) 848-0201 TOLL-FREE (800) 382-6020 922 MERIDIAN PLAZA ANDERSON, IN 46016 TELEPHONE:(317) 649-6887 fit Chairman Paul Volcker Federal Reserve System 20th Street & Constitution, N.W. Washington, D.C. 20551 Dear Chairman Volcker: Enclosed is a copy of a letter from my constituent, Robert E. Cochran, with questions about the Federal Reserve System. I would appreciate you sending me a letter answering his questions. Thank you in advance for your attention to this matter. any questions, please contact Linda in my Washington office. ely, Burton Member of Congress DB:lsd https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis If you have • ' SceeLd\ U) DECEMBER ccso w's-c)‘ -1)11_ C7(2AkA c12 AJ4e-q 6, 1985 REPRESENTATIVE DAN BURTON 120 CANNON OFFICE BUILDING WASHINGTON D. C. 20515 L iouptk azs -2-74) REP, BURTON: I WOULD LIKE A COMPREHENSIVE REVIEW OF THE FEDERAL RESERVE SYSTEM. DO YOU HAVE, OR CAN YOU TELL ME OF A PUB LICATION THAT DETAILS THE OWNERSHIP, PHYSICAL MAKEUP AND VESTED POW ERS THAT CAN BE RELIED ON AS TRUTHFUL. MY INTEREST HAS BEEN SPURED BY DR. ED AND NANCY FITZGERALD ON THEIR TAPE "BIBLICAL PERSPECTIVE OF THE NEW AGE MOVENENT",PUBLISHED BY THE CHRISTIAN TAPE LIBRARY INC, 330 N. RANGEL INE ROAD, CARMEL, IN. 46032. DR. FITZGERALDHAS MADE SOME STATEMENT S ABOUT OWNERSHIP, TO WHOM THE NATIONAL DEBT IS OWED, WHO ARE MEMBERS, WHO CONTROLS THE PRINTING OF OUR MONEY AND CONTROLS THE INTEREST RATES AMONG OTHER THINGS. I COULD HARDLY BELIEVE HIS STATEMENTS/3 0 WILL APPRECIATE YOUR HELP IN THIS MATTER. ROBERT E. COCHRAN . 5830 LAUREL HALL DRIVE INDIANAPOLIS, IN. 46226 177., https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis •1 • .0 I co •. . •0 • -pi • -A of GOvi •. BOARD OF GOVERNORS . i; i•-• • t• • (4.. 4.• c.X5 RAL RE-.• ',...,• OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 PAUL A. VOLCKER March 18, 1986 CHAIRMAN The Honorable Carlos J. Moorhead House of Representatives Washington, D.C. 20515 Dear Mr. Moorhead: Thank you for your letter of February 6 concerning overtures being made by a foreign firm to supply a covert counterfeit deterrence system for use on U.S. currency. The Federal Reserve is now pursuing the development of prototypes of two such systems through contracts with U.S. firms that were selected as a result of earlier competitive procurements. This action is being guided by an interagency steering committee chaired by the Treasurer of the United States. This committee was set up by the Secretary of the Treasury to coordinate the various roles of the Federal Reserve and Treasury in counterfeit deterrence and to advise him on related matters. Work under the two contracts has progressed satisfactorily to the point of planning for the procurement of operating systems. Various approaches to this procurement are being considered, including a solicitation of bids. A foreign firm submitted an unsolicited proposal for a currency authentication system to the Board of Governors in November 1984. This proposal was carefully reviewed and originally rejected by the interagency steering committee because it did not appear to offer sufficient advantage to warrant changing the course of prototype development. It is now being reevaluated to see if it deserves consideration under the procurement options being examined. In execution of its responsibilities, the interagency steering committee is carefully weighing the security implications of having a currency authentication system supplied by a non-U.S. firm. Any consideration of bids from non-U.S. firms will proceed in accordance with existing Department of Defense regulations on industrial security, which are very detailed and exacting. I can assure you that I understand your concerns about the matter and appreciate your correspondence. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Sincerely, IDENTICAL LTR. TO CONG. ROBERT K. DORNAN JMD:LSF:vcd (V-43, 86-658,659) bcc: Mr. Denkler Mr. Allison Mrs. Mallardi (2) Congrems of tbe tiniteb tatai jiptuSe of Repregentatibeti 14%1 asSbington, Or 20515 FED to February 6, 1986 The Honorable Paul A. Volcker Chairman Federal Reserve System Twentieth Street and Constitution Avenue, N.W. Washington, D.C. 20551 Dear Paul: We are writing to express our concerns over potential security risks affecting the Covert Currency Authentication Program. In 1983 two U.S. firms were awarded initial contracts to offer systems for protecting U.S. currency from worldwide counterfeiting. We understand that a foreign firm had initially competed in the bid process but was disqualified because it was unwilling to disclose vital information critical to the security of our currency. A second phase of this project is now open to competitive bids. It is possible that the foreign firm which lost the initial bid will again compete. We are deeply concerned that a foreign firm unwilling to play by the rules from the outset may become involved in this most sensitive program to safeguard our currency. It would be extremely ill-advised to involve a foreign competitor in such a project if it were trying to sell to the U.S. Government any part of a system which is presently known to other governments or foreign banking communities. Frankly, we are surprised that foreign entities are eligible to bid at all and wonder whether or not a prohibition on foreign bids was ever considered. In addition, we would appreciate knowing what measures, if any, are being taken to insure that strict security is maintained should a foreign concern become involved in the project. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Sincerely, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 March 18, 1986 The Honorable Fernand J. St Germain Chairman Subcommittee on Financial Institutions Supervision, Regulation and Insurance Committee on Banking, Finance and Urban Affairs House of Representatives Washington, D.C. 20515 Dear Mr. Chairman: Thank you for your letter of January 17 asking for comment on correspondence from Ms. Karyl-Lynn K. Zietz regarding a complaint that she has against State Street Bank and Trust Company, Boston, Massachusetts. We have contacted State Street Bank's trust department and have asked them to substantiate the basis for their actions. When we have received this information from State Street, we will be in a position to determine if there have been any violations of any federal statutes or regulations. Once we have made this determination, we will contact you so that you may respond to Ms. Zietz directly. Sincerely, Dozald r Donald J. Winn Assistant to the Board JRA:vcd (V-39, 86-634) bcc: Joe Alexander (for follow-up) Mrs. Mallardis.,— FtRPIAND J SyERMAIN, RHODE ISLAND. CHAIRMAN FRANK ANNUN IO. ILLINOIS CA9F-OLL HUBBARD. JR KENTUCKY DOt/G BARNARD. JR . GEORGIA JOHN J LAFALCE, NEW YORK MARY ROSE OAKAR. OHIO BRUCE F VENTO, MINNESOTA ROBERT GARCIA. NEW YORK CHARLES E SCHUMER. NEW YORK BARNEY FRANK. MASSACHUSETTS RICHARD H LEHMAN. CALIFORNIA JIM COOPER. TENNESSEE BUDDY ROEMER, LOUISIANA MARCY KAPTUR. OHIO BILL NELSON. FLORIDA PAUL E KANJORSKI. PENNSYLVANIA BART GORDON. TENNESSEE THOMAS J. MANTON. NEW YCIFIK IUiItt!Ii1*U6IfTiUflfi U.S. HOUSE OF REPRESENTATIVES SUBCOMMITTEE ON FINANCIAL. INSTITUTIONS SUPERVISION, REGULATION AND INSURANCE CHALMERS WYLIE. OHIO JIM LEACH, IOWA STEWART B McKINNEY, CONNECTICUT NORMAN D. SHUMWAY. CAUFORNIA BILL McCOLLUM. FLORIDA GEORGE C 1NORTLEY NEW YORK DAVID DREIER. CALIFORNIA STAN PARRiS. VIRGINIA MARGE ROUKEMA. NEW JERSEY DOUG BEREUTER. NEBRASKA STEVE BARTLETT. TEXAS S . ROTH, WISCONSAN OFTHE COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS NINETY-NINTH CONGRESS WASHINGTON, DC 20515 January 17, 1986 t-. Mr. Paul Volcker Chairman Board of Governors Federal Reserve System 20th and Constitution Avenue, N.W. Washington, D.C. 20551 I Dear Chairman Volcker: Enclosed you will find correspondence I have received from Ms. Karyl-Lynn K. Zietz involving the payment of interest on certain funds held in trust by a financial institution. Inasmuch as the State Street Bank and Trust is sdiction, I would appreciate a within your supervisory review and comment on Ms. Zietz's situation sent to me so that I may respond to her directly. Sincerely, • d J. an Enclosure FJStG:kTk https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis t Germain (A•Ch Karyl-Lynn K. Zietz November 27, 1985 CE1VED Chairman of Subcommittee on Financial Institutions Fernand J. St Germain B - 303 RHOB Washington D.C. 20515 Dear EiS5 Ittee on Financial Institirt77 Congressman , State Street Bank and Trust Company in Boston, Massachusetts held of mine for 12 days without paying me any interest. over As you can see from the attached letters, I requested the interest . (Approximately $215 at their Money for the 12 days on the Market Fund rate.) They refused. The excuse: they don't know the values of the account and therefore can't distribute the funds and can't invest them. But the fact remains, the bank has my and is earning interest on my money, but not paying me any interest. I think the practice is a disgrace and the excuses nonsense. Banks should not be permitted to cheat customers out of interevt due then on their money with such impunity. cal I would be most grateful if you could investigate this unethi practice as well as arrange that I collect the interest due me for . these 12 days that State Street Bank held my Thank you for your help in advance. Sincerely, IT Karyl-Lynn K. Ziet Enclosures https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Daytime phone September 18, 1985 T - 13939 State Street Bank and Trust Company icer Ms. Joan Preiss, Senior Trust Off 225 Franklin Street Boston, Massachusetts 02110 Personal Trust Department https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Dear Joan, 12th. There is no problem ber tem Sep ed dat ck che the for you nk Tha beginning of October, as I will my receiving the rest of the funds the be out of town until October 6th. receive full interest on In the final calculation, I do expect to . advanced me the my trust until September 12th, the date you st until that day, this interest Since my trust was earning full intere me. belongs to my trust and therefore due week er of my funds beginning the second I look forward to the remain 4 in October. Sincerely, Karyl-Lynn K. Zie tateStreet Saabs Street Bank and Mist Company PG Box 351 Boston, Massachusetts 02101 October 16, 1985 T-13939 Ms. Karyl-Lynn K. Zietz Dear Karyl-Lynn: , representing the Enclosed is a check for balance due you from your revocable trust. The value of the Taxable Bond Fund units that you held as of August 30th in the beginning of . We paid you was fecs-01, . Since we held that September, so we owed you cLAzr amount for the balance of the month, we owe you interest stment lq.4441A for September. At the Mone Mark that As far as any Fund rate for September, that would be r"; other interest, we do not feel there is anything elae due, We have to wait 10 to 12 days to distribute an account in ,) A" r the common trust funds because it takes that long for the values to be calculated and monies to be distributed to the °- '"1' ta accounts. We cannot invest it for that period of time because then we would have to wait another month for the 14°4' interest from the Money Market Fund to be posted. / 2, L,14 Lt ••-•• .T • 01. •. Joan S. Preiss Senior Trust Officer -• •-• - .7 ifwt-.7 JSP;cp 14416mk_ t. Enclosures -tcr— • ..--trfunk-r--.• • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • ••••••• ..• • • .•,0Of GO ' 4 • 80i —OVERNORS `HE • co 11 •rn IahhffluIIr RAL RES • •.• • • FEDERA. RE.SERVE SYSTEM ‘/VA -IINGTON, D. C. 20551 March 17, 1986 PAUL A. VOLCKER CHAIRMAN The Honorable Walter E. Fauntroy Chairman Subcommittee on Domestic Monetary Policy Committee on Banking, Finance and Urban Affairs House of Representatives Washington, D.C. 20515 Dear Walter: Thank you for your letter of March 13 regarding your hearing on the economic implications of the recent unemployment figures. I am pleased to let you know that the following Federal Reserve Bank Presidents will testify at the hearing: Mr. Frank E. Morris of the Federal Reserve Bank of Boston, Mr. Robert H. Boykin of the Federal Reserve Bank of Dallas, and Mr. Robert T. Parry of the Federal Reserve Bank of San Francisco. They are looking forward to appearing before your Subcommittee on Wednesday, March 19, at 10:00 a.m. Sincerely, siyauj. 4.. Y10.10»:.4.1 CO:DJW:pte (V-72, 86-1434) bcc: Mrs. Mallardi (2) https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis WALTER E FAUNTROY. DISTRICT OF COLUMBIA, CHAIRMAN STEPHEN L NEAL. NORTH CAROLINA DOUG BARNARD JR . GEORGIA CARROLL HUBBARD. JR . KENTUCKY BUDDY ROEMER LOUISIANA JIM COOPER. TENNESSEE THOMAS R CARPER DELAWARE BEN ERDREICH. ALABAMA H2-109 ANNEX NO 2 WASHINGTON, DC 20515 (202) 226-7315 BILL McCOLLUM. FLORIDA JOHN HILER, INDIANA JIM LEACH, IOWA STEVE BARTLETT, TEXAS THOMAS J RIDGE, PENNSYLVANIA ROD CHANDLER, WASHINGTON U.S. HOUSE OF REPRESENTATIVES SUBCOMMITTEE ON DOMESTIC MONETARY POLICY OF THE COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS NINETY-NINTH CONGRESS WASHINGTON, DC 20515 March 13, 1986 The Honorable Paul A. Volcker, Chairman Board of Governors of the Federal Reserve System 20th & Constitution Avenue, NW Washington, DC 20551 Dear Paul: The Subcommittee on Domestic Monetary Policy will meet on Wednesday, ,March 19, 1986, to take testimony in examination of the economic implications of the recent 700,000 surge in civilian This unemployment as reported by the Bureau of Labor Statistics. unusual increase was concentrated in certain groups in the economy -- one-quarter was among Hispanics and almost three-quarters was the -- with two-thirds of among workers aged 25 and over unemployment increase apparently occurring in just three states: California, Texas, and Illinois. I would very much like an assessment of these unemployment statistics as a whole and in their components from the viewpoint of I would like, therefore, the affected Federal Reserve districts. that one or more of the Presidents of the Reserve Banks in the noted states appear and give their views on this matter. Additionally, it occurs to me that it might be useful to hear the views of a Federal affected bank president whose District is district Reserve differently. I would also like an assessment of the changing composition of the labor force (the shift from manufacturing to service industry, for example), the regional impacts associated with the increase in in the consequences of the decline the February statistic, productivity on future employment in the United States in these districts, and whether there might be some correlation in these shifts and the changes in the employment statistics. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis s 2 The Honorable Paul A. Volcker March 13, 1986 I would also be interested in an assessment of the differences between the 700,000 unemployment increase in the Household Survey Data as compared to the 225,000 increase in the non-agricultural payrolls in the Establishment Survey Data. I am concerned, in this instance about the validity of the statistics and whether Reserve Bank officials believe these statistics can be relied upon. Finally, I would like some comment on the impact of part-time and temporary employment on the longer run composition of the labor force in the several Districts. The hearing will commence at 10:00 AM in Room 2222 of the Rayburn House Office Building on Wednesday, March 19, 1986. Under the Committee Rules, witnesses are asked to provide the Subcommittee with 100 copies of their testimony 48 hours prior to the hearing. I would be most appreciative if the Reserve Bank Presidents who testify meet this request. If you have any questions concerning this invitation, please contact Howard Lee, Staff Director of the Subcommittee, at 226-7315. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Sincerely yours, Walter E. Fauntroy Subcommittee Chairman BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 March 14, 1986 PAUL A. VOLCKER CHAIRMAN The Honorable Paula Hawkins Chairman Subcommittee on Agricultural Credit and Rural Electrification Committee on Agriculture, Nutrition and Forestry United States Senate 20510 Washington, D.C. Dear Paula: I am responding to your letter of March 10 in which you lems of farmers, reviewed the current economic and financial prob face of these noted the great difficulties that farmers, in the gations, and problems, are having in servicing their debt obli st and urged Federal bank regulators to take steps to assi to aid both encourage a restructuring of farm loans in order farmers and farm banks. Let me begin by saying I fully share your concerns banks. Thus, about the current problems of our farmers and farm Office of the I am happy to report that the Federal Reserve, the sit Insurance Comptroller of the Currency and the Federal Depo cies to help Corporation have agreed on a set of supervisory poli alleviate these problems. by I am enclosing a copy of a joint statement issued before the the agencies in conjunction with their appearance irs on Senate Committee on Banking, Housing and Urban Affa In addition, Tuesday of this week that outlines these policies. Chairman Martin I am enclosing a copy of the testimony that Vice s provide a delivered at the hearing. I believe these material problems of good presentation of our assessment of the current currently the farm sector and of various proposals the Congress clear a has under review for dealing with these problems and agencies. statement of the policies agreed to by the banking d in the Restructuring of farm debt is specifically addresse joint policy statement. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ce. Please let me know if I can be of further assistan Sincerely, ..§/Pa'.4 A.. Voick;. Enclosures FS:DJW:pte (V-71, 86-1337) bcc: Fred Struble 4, .•• ofGovk-4,••.. .* o• BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 March 11, 1986 The Honorable E (Kika) de la Garza House of Representatives 20515 Washington, D.C. Dear Mr. de la Garza: Thank you for your letter of February 20 requesting comment on correspondence you received from Mr. Charles Hanson concerning the staff commentary to the Board's Regulation E (Electronic Fund Transfers). A proposed addition to the commentary, question 10-18.75, would clarify the statutory and regulatory requirement that preauthorized electronic fund transfers (EFTs) must be authorized by the consumer in writing. We have enclosed a copy of the proposed commentary. The proposal responds to inquiries about whether the written authorization requirement could be met by the payee--the person wishing to debit the consumer's account by preauthorized EFTs--signing an authorization as the consumer's agent, after having solicited the consumer's authorization for preauthorized EFTs over the telephone. Since question 10-18.75 is a proposed addition to the commentary, a final decision on adopting it will only be made after careful consideration of all public comments; however, the question is an interpretation of § 205.10(b) of Regulation E, which is based on § 907(a) of the Electronic Fund Transfer Act. (Copies of these provisions are enclosed.) Section 907(a) of the Act states the following: A preauthorized electronic fund transfer from a consumer's account may be authorized by the consumer only in writing, and a copy of such authorization shall be provided to the consumer when made. (Emphasis added.) The position taken in the Board's proposal was thought to best reflect the statutory language and carry out the legislative intent. Payees could, of course, continue to ask and encourage customers to pay by preauthorized EFTs, provided they obtain the customer's signature on a written authorization following the telephone conversation. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Honorable E (Kika) de la Garza Page Two There is a difference in the rules for preauthorizing EFTs and for authorizing credit card transactions. The divergent rules are based directly on the underlying statutes: the Truth in Lending Act--the statute governing credit card transactions--contains no limitation similar to that established by § 907 of the Electronic Fund Transfer Act. One reason for this variance in treatment is that the nature of the accounts accessed in the two types of transactions is quite different. Electronic fund transfers involve a consumer asset account, such as a checking or savings account; thus unauthorized transactions could have an immediate adverse impact on the consumer, by depleting an account of funds needed to pay housing or living expenses, for example. Credit card transactions, on the other hand, involve a credit account and will first show up on a billing statement. Therefore, any unauthorized transactions charged to the customer's account would not result in immediate adverse effects on the consumer. Your constituent's comments have been included in the public comment file on this proposal. Please let me know if I can be of further assistance. Sincerely, Donald J. Winn Assistant to the Board Enclosures JH:CO:pte (V-69, 86-1291) bcc: Jerry Hurst of incoming) i Paula Hillery (w/copy Mrs. Mallardi‘J https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • •• • • sz:. (;( : ) VE •• BOARD OF GOVERNORS t , C1 ' 1: 1(..--\ 0 • .•• 0 /-/41la •• •0 ••„ ‘41HR OF THE FEDERAL RESERVE SYSTEM /- • RALREs • •.. • • • WASHINGTON, D. C. 20551 RAUL A. VOLCKER March 10, 1986 CHAIRMAN The Honorable Marge Roukema House of Representatives Washington, D.C. 20515 Dear Ms. Roukema: During the hearing before the House Banking Committee In February 19, you requested any further comment I might have on employment figures. I have furnished the enclosed response to the Committee for inclusion in the record of the hearing. Please let me know if I can be of further assistance. Sincerely, Enclosure cc: bcc: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Cal Rosenberg, House Banking Cmte. (for inclusion in hrg. record) Mr. Kichline Mrs. Mallardi (2) i/ Insert page 58 (hearing on February 19, 1986) Chairman Volcker subsequently furnished the following information in response to a request from Congresswoman Roukema: The data most often used to analyze industry employment patterns are collected by the Bureau of Labor Statistics (BLS) frS m a survey of nonfarm establishments. The accuracy and intCrpretation of the data are, of course, subject to a number of difficulties including adjustment for normal seasonal va tion, the failures and formations of businesses, and possible response errors often associated with surveys of this type. Nevertheless, over longer periods of time, these data have been consistent with trends reported in other measures of economic performance. Table 1 contains information on employment trends in some selected industries based on the BLS establishment survey. Although employment growth was broadly based in the 1960s, the data indicate that the growth of factory jobs slowed sharply in the 1970s. The falloff in manufacturing payrolls was exacer- bated during the 1979-1982 period when manufacturing employment growth dropped nearly 5 percent per year. Since that time, about one-half of the manufacturing jobs lost during the 1979-1982 period have been recovered. In contrast to the experience in manufacturing, employment in trade and services continued to climb at a brisk pace during the 1970s, and even rose somewhat during the 1979-1982 period. In the current ex- pansion, the trade and service industries have continued to https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2 account for most of the newly created jobs, with particularly strong gains evident at eating and drinking places, and business and personal service establishments. Some further insight into the reemployment opportunities of workers who lost their jobs is available from a special survey of displaced workers compiled by the BLS. According to this survey, which studied workers whose jobs were abolished or plants shut down between January 1979 and 1984, about 60 percent of the workers who had been at their jobs at least three years before they were displaced were reemployed when surveyed in January 1984. As shown in Table 2, the industry distribution of workers displaced closely resembles the distribution of employment for reemployed workers in January 1984. Although reemploy- ment patterns do show some shift out of manufacturing into services, it appears that many displaced workers either found new jobs in the manufacturing sector or were recalled to their old jobs. It is worth noting, however, that displaced manu- facturing workers were more likely to be unemployed in January 1984 than were workers displaced from service-sector jobs. Overall, the data suggest that the strong demand for service workers in recent years has been met primarily by new entrants to the labor force or less tenured unemployed persons rather than by experienced displaced manufacturing workers. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -3 - Although many of these more experienced production workers have https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis returned to work as well, they generally were able to find reemployment within the manufacturing sector. Table 1 EMPLOYMENT TRENDS IN SELECTED INDUSTRIES (Based on nonagricultural establishment data) Share of total employment (1985-Q4) (percent) Total nonfarm - - - Average Annual Percent Change' - - 1982 to 1979 to 1959 to 1969 to 1985 1982 1979 1969 100.0 2.9 2.5 -.7 3.7 83.3 2.6 2.4 -.7 4.1 Manufacturing 19.6 1.9 .4 -4.7 2.3 Retail trade 17.9 3.1 3.2 .2 5.2 5.8 4.5 6.2 2.0 6.0 12.0 2.7 2.2 -.6 3.8 6.1 3.3 3.5 2.0 4.1 22.6 4.7 4.4 3.2 5.3 Personal services 1.1 1.3 -.3 1.0 7.13 Business services 4.6 8.3 6.3 2.9 11.3 .6 n •a • 14.5 9.2 15.13 6.4 7.0 5.7 5.0 2.3 Private Eating and drinking places Other Finance, insurance, and real estate Services Computers and data processing2 Health services 1. Percent changes from fourth quarter to fourth quarter. 2. Data available starting 1972. 3. Average annual percent change from 1982-Q3 to 1985-Q3. n.a.--Not available. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Table 2 Displaced Workers by Industry' Industry of Lost Job Percent Thousands 2 Job Industry of New Percent Thousands 4700 100.0 2810 100.0 Construction 401 8.5 253 9.0 Manufacturing 2483 52.8 1418 50.5 1675 35.6 954 34.0 808 17.2 464 16.5 Transportation and public utilities 336 7.1 191 6.8 Trade 732 15.6 399 14.2 Finance and Services 599 12.7 378 13.5 Total Private Durables Nondurables 1. Taken from a survey sponsored by the Employment and Training Administration and conducted as a supplement to tha January 1984 Current Population Survey. Displaced workers were defined as persons who (1) lost a job between January 1979 and January 1984, (2) had worked at least three years in that job, and (3) lost it because of the closing down or moving of a plant or company, slack work, or the abolishment of a position or shift. 2. Includes only persons with jobs in January 1984. Another 1.9 million displaced workers either were unemployed or out of the labor force in that month.
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