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FEDERAL
RESERVE BANK
OF ATLANTA







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2ssage from the President ........................

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Price Stability-What Does It
Mean i Practice?.........................................
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xth District Highlights ............................

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Directors

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fficers........................................................

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Financial Statements ..................................

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w February 12,1993

r

he 1992 a d u a l report of the Federal

sider this vital issue from a very practical

Reserve Bank of Atlanta features

standpoiiiy.

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some of our accomplishments fo; the year
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along with the consolidated financial state-

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would like to exprkss my appreciation to

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ments of the Atlanta, Birmingham, Jack-.
sonville, Miami, Nashville, and New Orlea&

valuable’ counsel throughout the year. In par-

offices. The names &fall directors and officers

ticular, I want to acknowledge those directors

who served the ,SixthDistrict during the-past
”

all of the Sixth District’s directors for their

whose service ended in 199;-Saundra

vear are listed as well.

Gray,’ who served as a head office director and

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H.

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was previously on the Jacksonville b a n c h
I I n addition to the review of the year’s

board;Robert M. Barrett and Nelda P.Stephen-

developments, this report includes p dis-

son, o the Bimringhamboard; A. Gordon Olivf

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cussion o inflation. In particular, the essay,

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er, o the Miami board; and Joel B. Bullard,

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presents my pdrsonal views about how aggres-

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Jr., Earl 750. Lundy, and A. Hartie Spence, o

sively the Fed can pursue the goal of price

the New Orleans board.

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stability, given certain limitations on our abili\

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ty to measure inflation precisely and the prefkrences of American society regarding the
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acceptable costs of achieving lower inflation.
with idation at its lowest rate in more than

Robert P Forrestal
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two decades, it is a0 appropriate time bp con-

President and Chief Executive Officer-




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ver the last several years the United States has witneised a-lively debate over the
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appropriateness of price stability as a goal of economic policy. With inflatibn at its
lowest levels since the late 1960s and the economy entering a.new expansion phase,
I believe the timq is ripe for considering the goal of price
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stability and what it meani from a practical standpoint.

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Y ROBERT FORRESTAL
P.

We are not presently experiencing the problem o accelefating price pressures. Last year the
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increase in the consumer price index (CPI) averaged 3 percent, and the moderate improvement,
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P expected in economic growth in 1993 2nd 1994 suggests that overall price pressures are not like’

ly to worsen ‘over that period.
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W These developments suggest*that Federal Reserve policymakers such as myself
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should take stock of the progress that has been made toward the goal of price stability and provide financial markets, consume;, and businesspebple some sense of the direction‘that the
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inflation debate will ta’ke in the years to come. This essay does sooby considering two issues.

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. First, as a way to show the difficulty of precisely gauging progress toward the goal of price stability, some of the problems surrounding our ability to measure inflation are noted. Second,
even if these technical problems could be satisfactorily resolved,-the case can be made that the
,rate of measured inflation consistent with socially desired output growth is not necessarily zero.
I would l i e to emphasize that the discussion that follows, coverkg both the signifkan6e of

measurement problems and the limitations on the Fed’s anti-inflationary p6sture that arise from
>

preferegces of American society, represents my personal viGws, on the subject and not necessarily those of the Federal Reservesystem. However, I regard these views as grounded in the social
compact between @icy institutions like the Federal Reserve and the political proqesses that me/”

ated them.

;

There are, to be sure,. many broader unresolved issues reg?rding inflation. Some

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are technical; others are policy choices. poes the availability of sophisticated ‘financial innova*ions reduce inflation’s distortions? Are the redistributional effects of inflation always a net cost




3

AGE

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to society? How much worse is a bghly volatile but low average &ation rate than a constant

low-rate?These are only .. few exampks.
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Notwithstanding such questions, past experiences with high and volatile inflation
in the United States and lessons from other countries have produckd a general recognition of the
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-hportance o l i m i ~ inflation. w e n policymakers.acknowledge and commit to keeping M a f
to

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-tion within these limits, the cost o achieving and maintaining them can be minimized. A longf
term commitmeqt of t i sort does not imply that inflation.may not rise above or fall below
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these bounds over a short horizon as long as we ensure that policy will act to return inflation to
a rate within them.
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In addifion to t i broad consensus on *e 1 benefits of price stability, there ishs
agreement' on the profound role of monetary policy in this process. It is generally accepted
that over the short run-say, during a business cyde-mohetary

policy can affect both output

and prices but that over longer periods *e effects of monetaZy policy on nonfiincial economic aaivity are neutral and only the price effects persist. Given this observation, clearly
there are some limits on the extent to which monetary policy can offset or smooth over short-e

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term disruptions or shock5 without subverting a long-term commitment to price stability.
Acknowledging these limitations, however, does not constrain monetary policy to follow nar-

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rowly defined rules.

Thus,even though the benefits of price stability are well understood and there is
widespread comnsus about the role of monetary policy in achieving it, there is still codid&able room for debate about how aggressively t i goal should be pursped. That 'subject is the
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focus o the statement that follqws. The essay uses the current juncture of low inflation and an
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economy at the start of ah expansion to highlight how an understanding o what we can achieve
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does not always tell us what we should do.

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HE

FED'SRENEWED

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€though price stability, along with full employ-

ment, has been an explicit w n o m i c policy goal

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COMMITMENT T(

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for several generations, the reduction of inflation
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to 3 percent is largely' the result of a dekision made several

years ;go by the Fed to reemp$size its determination to

PRICE STABILlTY

achieve price sltability. After dropping fqom double-digit levels

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.in me late 1970s ana early 1980s to the 4 percent to 4 1/2 percent range by 1984, the CPI
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seemed stahed at that rate for the &st of the decade except for occasional flukuations. The most
noticeable deceiemion in the inflation rate occurred in 1986, when a sharp decline irroil prices




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offset increases in other consumer goods, resulting in-an annual average CPI increase o only 1.9 perf
cent. Still, core inflation-that is, the rate of pice increases

% goods and services exclusive of

volatile items like food and energy-did not appear to budge.
Then in the late 1980s price pressures began to mount. The CPI rate jumped from

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3.7 percent in 1987 to 4.1 percent in 1988 and to 4.8 percent in 1989. While the Fed began moving to counter these forces, a broader discussion initiated at that time focused on the U.S. central
bank’s goal of price stabiliv and what it meant. While no formal definition was officially adopt9

ed by the Fed, an informal consensus developed around the “working definition” of price stability as a reductioh in price pressures to a point where idation ,is Lot a factor in economic
decision making. Over d e next several years inflation was brought down from a 5.4 percent
annual average increase in 1990 to 3 percent in 1992. Tith the exception of 1986, last year’s
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inflation rate was the lowest since 1967. .
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Thus, even @ough the connection between this working definitionaf,inflation
and the price indexes available to measure that concept is imperfect, we are at a critical juhcture. It is time to ask if the goal of price stability has, in effect, been achieved. If so, where 80
we go’ from here? I believe that a brief review of technical proble‘ms surrounding the measurement of inflation provides convincing evidence that the U.S. economy is indeed close to price
stability. Beyond these issdes, however, social preferences in the United States may constrain
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monetary policymakers from immediately and completely resisting price pressures that might
arise in the bture. In other words, the lower bound to the measured rate of inflation consistent
with pdce stability is greater than zero.

n seeking to attain most goals, organizations

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I F F I C U L TI ES

determine an appropriate set of measures that

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gauge progress as well as-ultimate success or

I N MEASUR]
NG

failure. Central banks can use various measures of price
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changes, ranging from price indexes of cryde cohnodities
,

INFLATION

and finished producer goods to a broad measure based on
output-the

GDP deflator. The following discussion focuses

011

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the most wide1y”used measire

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of inflation in this country, the consumer price index. However, the arguments also apply to.the

other price measures because no index is free from problems.

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than 360 categories of products

The CPI represents a “babtet of goods”-more

and services purchased by consumers, ranging from food aRd shelter to more discretionary
items like cars and entertainment. Each category is given a fxed weight accprding fo its estimated



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share of consumer expenditures in the base period. One problem with the CPI is that these
weights vary between periods .as consumers shift from relatively more expensive products to less costly sub$titutes. For example,-if oil prices jump sharply, consumers will
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gradually use fewer products that are qnergy-intensive and instead buy more fuel-efficient
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cars and homes. Shifts can ?cur more quickly, of course, among goods with many close

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substitutes.
Unfortunately, these shifts cannot be' measured continuysly. Instead, weights are

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adjusted only at an interval o many years. In the interim, a price index may still assign an old
weight to, say, gasoline prices even though many people have switched to public transpitation
or sinaller cars. The result may be 3 biased estimate, and the b a may w d in the direction of
is
overstating inflation.
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W Another s'ignihcafit problem with the CPI is that it only imperfectly captures

improvements in quality that take place over &e. Technologhl progress effectively creates new
health cap products a d procedures under old names as the pace of technical change quickens.

F& instance, our intuition regarding the way pkscription drug prices are m & d would be to
expect largely the same set of drugs to be suneyed over time. If they were, the pric& o certain
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antibiab, which have been decking, would work to pull down the B I . Howeveq the CPi method-

ology is to use, for example, pharmacies' prices for the ls ten pmscriptions pwdmsed on a particuat
lar day o the month and to compare prescdption drug,expenses over time, not individual drug
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prices. his methodology more truly reflects actual spending, which encompasses purchases of.
new, more expekive drugb like AZT and beta-blockea However, this practice represents a-compromise in the sense that the basket of drugs is not held constant and thus theindex does not

provide a-pure g k g e of price chinges. The result of this very reasonable effort to incorporate

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quality improvements is a probable up6ard'bias in the CPI for t i component. There *aresimilar
challenges for measuring other components as well.
There are also problems associated with the need to

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rn-res.

use

indiRct or imputed '

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In a worldaf scarce resources, including scarce resopces for statistical colleetion by

the federal government, not every product orservice can bk directly observed and,measured in

an ideal way. Statisticians must develop proxy measures, which inevitably have a certain degree
of arbitrariness about them. For example, the portion of income devoted to sheher costs is
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imputed in a complex way that attempts to gauge the cost o owner-occupied housing-by c a b bting an equivalent rental rate. While the current approach is theoretically pure, actual calculationi are far less intuitive

than an e'arkr method that used mortgage payments and other direct

costs. Reasonable people may agre*e that one approach makes' more &&e, 'but neither is

unambiguously the "tight" method.
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W This brief review of measurement problems associ$ted with the CPI illustrates the

‘difficulty of specrfying the CPI rate that is equivalent to price stability. Estimates vary as to the

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extent that $flationmay be mismeasured ?s a result: However, there is some recognition that

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the net effect,is to overstate it, and these biases become proportionately more distorting as the
id-ation rate declines. Thus, achieving “zero inflation” could represent deflation, a condition that
certainly, would, contrary to the Fed’s price stability goal,. play a role in economic decision mak-

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ing. &e corollary of this observation is that achieving the goal of price stability &plies a lower
level for CPI inflation that is greater than zero.

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coufd be satisfactorily resolved, I believe there
is another, even more importar$ reason that

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the optimal inflation rat. is not necessarily the minimal

AND I N F L A T I O N

inflation rate. This reason int&es the concept of a social’compact-between U.S. society and
its policy-making institu&ons--and the costs indbenefits of reaching price stability.
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W In an economy with stable prices, resources are allocated to their most efficient
dses. In turn, lhng-run gi-owth tends to be higherkcause fun& are directed toward investments
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that raise the ecogpmy’s productive capacjty. The situation is quite different when prices are rise
ing and these pressures are not expected to be restrained. Resources tend to be directed toward
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inflation hedges like gold, ieal estate, or other fixed

s t
es

or toward the costs entailed in con-

stant portfolio shifts that are necessary to minimize idation’s effects on other assets. W e price
stability is clearly preterable: at the same time achieving price staeility is not without costs, especially in the short k n . If monetary policy is used to lower inflation but the policy is not anticipated or perceived as credible by economic deeisionmakers, then the short-term resource cost of
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- fighting inflation can be very high. Output may fall or not -grow as rapidly as otherwise,‘*.and
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unemployment may rise considerably. I believe‘these costs are significant and that policy should

- take into consideration the situation +inwhich a large number of people are thrown out of work
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and many businesses are disrupted.

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In most advanced economies, policy institutions were created over the last century to mitigate the transition costs of neq5sary economic corrections. In the nineteenth century,

business cycle fluctuations were much sharper than they are ’today. Imbalances were corrected
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. by sharp implosions in financial markets, severe contractions in output, and costly dislocations
of resources. Priees’also tended to fall across the board, sometimes quite dramatically. Then eco-.

nomic growth began afresh.
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While such swift and clean ad@tm&ts haye a certain theoretical attractiveness,
these abrupt changes were

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costly for those adversely affected. Sometimes, in the .
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rush o a collapse, sound businesses, banks, and. households were fmkally ruined
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because

their assets were not liquid and thky lacked thq time to find sources to liquildate them. Over
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time, a variety of economic policy i s i u i n and measures we% established to mitigate and
ntttos
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attemate t i process.
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“+s broadly ameliorative a of macroeconomic pc$icy
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has been reaffirmed

formally as recently asJ978,when Congress began requiring the Fed to report to the le&lature .

twice a year in regard to its goals for e c o n o a c growth, employment, and d a t i o n . ‘ % ,
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believe the Fed, like other policy institutions that .act on behalf Of k e t y , must kegp public
prefererices in mind when pursuing s c a goals. & a practical\maiter, this‘ & o b l i m o n may
oil

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mean that*none 0f.the transitions should be excessively traumatic.

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YCLIC

?ICE

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he way this social compact operatesTn,today’s
setting can be seen more clearly if we consider

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two si6ations in which inflation might begin to
mount-fiit, as a result o cyclical dynamics and, second, i
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PRESSURES

’response to an external and totally unexpecteh event that jolts the economy, such as an ol price
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shock. 1n.the former m e , where bottlenecks begin to develop in response to ggowth at a ratt’
faster than the economy’s potential to-expand, the textbook a p p m h calls for the central bank
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to restrah money and d

t growth by raising short-term interest rates. While &agreein princi-

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ple, I nonetheless see certain limitations on the-monetary authority, given the situation with the
other hand of macroeconomic policy makingl-fiscal policy.
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Fiscal policy- has -become handicapped by the large federal budget deficits’that

were built up during the 1980s and continue in the 1990s. As a result, we saw in the recent’
recession that fiscal policy was essentially unavailable as a’ countercyclical fool. In turn, all of
society’s-attentionaas focused on the Fed to counter rising unemployment and shrinkjng
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output.

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From my pempktive, udess a F u n d deficit reduction plan is implemented, mon-

etary .policy is likely 50 be the o d y countercyclical policy available for a number of years. Tl4s
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situation, as I see it, makes it impossible for the Fed to focus solely on price stability as the.goal
o monetary policy. It would siniply be too costly‘in ten& of output and ufiemployment, in my
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opinion, to implement immediately the .full policy restraint necessary to bring inflatidn back
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within the accepted

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bo~;ldsin

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1 coq in the short run

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*would be too high. In such circumstances, I believe that the Fed must take a more gradual paw
toward the goal of price stability.
W Taking a detour from the course toward noninflationary growth in such circumI

,stances should not be interp’reted to mean. that the Fed has becoqe more tolerant of inflation;

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rather, the success we have had in lowering inflation during the past few years should give economic decisionmakers confidence that the Fed would quickly return to a posture of minimizing
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price pressures.

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n the second scenario in which inflation niight
rise, eonsider what should happen if a s h k k like.
the oil price increases of the 1970s were to recur.

There are those who would say that maintaining the course
towird price stability shouldrem8in the paramount goal of
the Fed in such circumstances. They- believe that the long-

I=
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EXTERNAL

SHOCK AND

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INFLATION

term benefits of price stability overwhelmingly outweigh any short-run costs of resisting inflation. In particular, they would be willing for society to incur a drop in output and a rise in

f
joblessness whlle prices of other goods adjusted to thk new higher price o energy. Some prices
would fall; some might rise, and the mix of output would shift. Such’a radical reallocation of
resources would lead to temporarily higher unemployment and lower ouput as part of the
adjustment process.

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W Those who would countenance such social costs in order to resist inflation argue

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that resources would be reallocated efficiently. They point out that if the impact of higher energy prices we& only partly rFsisted, the price leverwould rise generally (and perhaps permanent.
ly) during the adjustment. As a result, they note, .resources would likely be dlocated4o inflation
hedges rather than to investments that add to productivity but may take longer-to reach fruition.
In their calculus, the lied should not stray from the path towardprice stability because long-term
growth will suffer.
W Others, I among them, believe that in the case of such a shock the central bank

should not completely resist the ensuing price pressures. Rather, some of these m a t be accepted in the form of a temporarily higher CPI growth ratesin order to make the short-run drop in

output and employment less’severe.
W The role of monetary policy as the sole available tool of macroeconomic policy

prices.
is a factor here just as it was in the hypothetical case of a cyclically induced run-up in .b
Through targeted taxation and spending measures, fiscal poliey would be quite capable of



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addressing the imbalances between particular ectors of the economy that might arise in the
wake of a shock. Taxes could be raiqd on certain activities' that may be receiving what is

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deemed an undeserved windfall; sect03 thzt are disproportionately harmed could be subsidized through special &grarqs.

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In contra&: k n e t a r y policy can be.exerclsed only bluntly, via

the Fed's influence on short-rerd interest rates and 00 money held in the form of bank.
reseyves, Without fiscal policy as an offsetting force, monetary policymakers have only one w3y
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to mitigate the'uneven impacts of a shock: by choosing to accept part of the pass-through to

higher prices during the transition while making it clear that this course is merely a temporary
detour from a noninflationary growth path.
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As in-the case of a cyclical acceleration k price: and a constrained response by

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the central bank, parkid acooGociation'of a shock should not be interpretkd as vacillation-by
the Fed viA-vis its stated goal. It seems to me that the credibility'the Fed has achiived,in the

past few years in nxktcfng inflarion gives the central bank m o k flexibility under such circumstances to meet its complex social mandate.
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he foregoing discussion explains why there is

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a lower bound on price stability that is above

Mation. what happens if society underestimates.the long-tegm-costs o Mation or if society sedks
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to use inflation to solve its debt pqhlem? This issue is not at al a hypckhetical one, in view of the
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large federal budget deficits. Several attempts to a d k s s the deficit problem have failed, reflecting
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the fact that knerkans have so far been unable to agnee on an equitable distribution of theJur~

den associated with cutting'programs or raising taxes.
"he social deadlock suggests that theF is an underlyins, almost unconscious, bias

that favors greater 'dation because it is much easier to pay back what has been borrowed yesw

terday or today in less valuable; inflated dollars o tomorrow. N o formal.dqcisions would need
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to be made, no votes cast, but a de facto t x woulh be levied, in effect &ucing thedebt outa
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stagding. I strongly prefer an outright decision on the deficit through the political process. How-

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ever, if.such an agreement cannot be reached and inflation were to b e a to rise sharply, the
Fed itself would need to act as the stalwarmppe; bound by refusing to *monetize the federal
debt. Again, the credibility that we haye achieved over the past several s a r s in* &refully w h g 1

ing price pr6sures out of the-economy should lend credence to our assertion that we will do
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so. Of c o u k , historical experience suggests that the bkst way to maintain t i Credibility over
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time is by having a central bank that has some degree o independence from those who are
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responsible for making Bscal-policy.
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he Federal Reserve System has succeeded in
lowering inflation to a significantly slower rate
than that of the 1970s and 1980s. Because of measuremeit biases in gauges ‘like
the consumer price index, I believe that the’current actual rate of inflation is not far from price
stability. As the economic expansion proceeds and resource use increases, price pressures could
begin to mount. I firmly believe that the Federal Reserve System should gently but steadfastly
resist such an acceleration in the inflation rate, bearing in mind the absence of fiscal policy as a
counter&lical tool. If pn adverse shock were to occur, price pressures could be accommodated
3

and measured inflation wouu rise for a while. In neither’case should such policy responses be

.

interpreted as signalinb an eventual return to the high inflation of the 1970s or even a wavering
by the Fed .from its commitment to achieving price stability. Instead, economic decisionmakers
should recognize the Fed’s proven determination t keep the economy on a noninflationary
o
growth path. Ebbs and flows in the degree of anti-inflationary pressure coming from Fed policymakers reflect an appropriate flexibility in meeting the central bank’s gdals, goals that embody
the preferences of American society as a whole.




I

dmxs and Pdces. Dur-

h
District alsg served as t e devel-

ing 1992 the volume of
2

safekeeping volume dropped
about 33 percent. The volume

opment site of the System’s new

o these,services continutid to
f

softwace for the delivery of pay-

check collection and electronicsi

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or bank services d c h as mea-

’ decline because fewer physical

payments services provided by

I

‘euiis
s c r t ewere eligible to be

ti04 MICR ( k e t i c ink

maintainedor collected through

character recorntion) capture,

the Sixth Federal Reserve Dis-

these services.

and key account totals. rayor

triet’s six of€ices-in Atlanta,

I District fully recavered
The

bank services volmne grew

Birmingham,Jacksonvile, Miami,

the $91.6 million total cost (plus

approximately 25 percent as the

Nashville, and New Orl&

aprivate &or

customer base increased 44 per-

. continued to e d . These

tor) of prov&g

F I N A N C I A L SERVICES

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adjustment facp r i d services

cent, reflecting the ~istrict’s

o f c s procesed 3 billion
fie

in 1992, and many of its $ces

commitment to encourage the

checks,about 4 percent more

remain among the lowest in the

use o electronic services in
f

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check collection.

than ?!N’s%olumeand 1.1 bil-

Fe&dReserveSystem.

lion more than any other Federal

WChe!ckCollcctlon. InOcto-

mEkcmmicppyments.In

Reserve District. Basic wire trans-

ber the first phase o a pew sysf

1992 the District became a leader

fer volume incmwed 5 percent,

.
and ACH commercialv?lume

tem for the on-linesettlement o
f
foiikard collection items and

achieving an all-electronic auto-

rose about 25 percent over 1991.

return items (OSCAR) was

mated clearinghouse CALH by :

W For each Gf the securities ser-

implemented in the Birmingham

mid-1993.

vices-bookentry ttansfers,

ofice. The system, to begin

District A& endpoints remain

defmitive safekeeping, and

operating in other District

to be converted to electronic

n o n d collectio-voLme

ofices in 1993, si.kamlines

delivery, with 1,251 converted

declined in 1992 from 1991 lev-

$heck processing by automating

els. The number o bookentry .
f

the associated settlement and

transfers originated on-line fell

accounting functions. During

in systemiiie efforts

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tbward

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than ten Sixth

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- through 1992. To further improve
the level of service to customers,

,

the Distkt implemented an on-

about 9 percent,’reflecting vol-

1992 the District participated in

line user “help desk“ that allows

ume losses caused by regions€

developing an automated adjust-

all Fed ofices to log andtrack

‘consolidations and mergers in
.

ment system (knoyn as FAS-

customer assistance requesrs and

the Southeast. Noncash coliec-

TRAC) and rewriting the Federal

also initiated a voice response

tion volume was down approxi-

ReGrve System’s Unisys-based

system for ACH return items and

k t e l y 27 percent, and definitive

check processing sofcwafe. The

notifications of change.

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HNonyhColkxtionand

porate services division, all Dis-

but by August 26 the branch

Deaaitivesak!~con-

trict branches completed conyer-

had restored all operations an3

solidatkm.AsoneoftheFeded
Reserve’s four regionalnoncash

based system that facilitates

co~ection
processing sites, the

automated logging, tracking,

Atlanta Fed‘sJacksonviue Branch

(
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continued its d d a t i o n of Syse

‘temm&on and bond process*

and kporting for cash ship

upervision and Regula-

ments. Developed by the Sixth

don.With the conversion
*
of twenty nonmember bank

District, the new cash automa-

ing, adcling RichmondDistrict

tion software is scheduled to

noncash items in september.

implemented in two other Fed-

Jacksonviue also began props-

eral Reserve Districts in 1943

ing for paying agents in the

-

UPERVISION AND

REGULATION

Atlanta, Miami, and N & h l e

and has engaged the inter& of

subsidiaries of a major institu-

several other Districts.

,

tion to Federal Reserve membership effective July 1, 1992,

Hmrlcaae A u d f e ! ~A major
.

zones. The District’s definitive

challenge the Sixth ~istrict
faced

the number of sixth District

in 1992 was maintaining service

state member banks grew 20

Birmingham,to reduce cqxs and

levels when Hu.picane Andrew

percent (to 120) and aggregate

in

lrd
hit southern F o i a on August 24

assets, increased about 56 per-

safekeeping services were fiuther

. consolidated in a single &ce,
efficiency as the System

/

I

cent (to $42.8 billion). This larg-

pursues its planned withdrawal

and Louisiana two days later.

from proGding these service~by

Damage in L o u i s b bypassed

er constituency called for a

yearend1993

New Orleans, but the catas-

significant increase in commer-

trophic destruction in M a i
im

cial and consumer affairs eFmi-

crea;ed extreme operational CW,

nation staff. Staff additions were

ficulties for the Fed branch

also required to handle new

F

-

W serdces. The Jack-.

s o n d e office succeshlly
implemented the

p Origmal

d

‘

,

Issue-application(PCOI), a>ew

there. Nevertheless, the Miami

responsibilities mandated by the

Treasury Direct subsystem that

office, powered by an emergen-

Feder& DepositJnsurand: Cor-

provides servicing sftes an alter- ’

cy generator and staffed by a

poration Improvement Act of

native means of entering Trea-

corps of employees, remained

1991 (FDICIA). This act sets

sury tender data during Treasury

open. Using contingency plans,

forth an array of regulatory

Direct mainframe downtime.

electronic funds transfers were

responsibili6es, from savings

Jacksonville was one of six Fed-

maintained via computer link- ’

disclosures and an enhanced

eral Reserve pilot sites for this

ages to +e Atlanta office, and

Fed role h foreign bank super-

system, which is the f .
mTrea-

branch staff handled a high 9 1
0-

vision to a course of “prompt

sury Direct program to use per-

ume of c q h distribution to meet

correctire action” whereby spe-

sonal computers.’

the increased local need. Check

cific supervisory actions are pre-

clearing was delayed until the

scribed dependent on an

branch had regained MI power:

institution’s capialevel. For

Cash Servke~:
Wlth support

from automation staff in the cor-’

0

-




-.,

.

e

-*

-+

4

functions.

sion to a new minicomputer-

>

%

d

example, the international

affairs examin& have expanded

examination stak g e approxirw

Affaits..The communityaffairs

the scope o thei fair-lending
f

mately 85 percent to meet the

staff have conducted research on

reviews,using HMDA data to

act's requirement that all foreign

barriers to lending in law- and

mget s a c loan applications

agencies and representative

moderate-income and rural areas

as a way o probing potential
f

offices be examined annually

that has contributed to the

unequal treatment. The depart-

for safety and soundness. To

debate on%the
soundness and

address the automation

effectiveness o loan programs
f

resources to thorough + % % s

of the larger staff and a broader

targeted to these areas. Sharing

mepts o spte member banks'
f

set of responsibilitie& the

ti informatioh through a
hs

performance wder the Cornmu-

department investigated*a num-

newsletter, speeches, and con-

niyReinv&ent

befof automation alternatives

ferences sisnificantly w
e
d

affairs staff have also been great-

and identifted an appmpria{e

community development activity

ly affectedky FDICIA provi-

computer system forqurchase

througbut the District. The staff

sions,-including ~ m t in
h

in 1993.

.

BCO~andcommuntty

provided technicalassistance to

Savings an-d the required exami-

help create four new loan

nation of foreign branches locat- ,

pools-with total committed

ed in the Sixth Dsrc for
itit

*

The number of new 'staff in
the depaitment

intensified

.

<

'

almost $150 mil-

ment has dqoted additional

4ct. Consumer

-

compliance with consumer pro-

a l p d y h e m a n d i g training

resou~ces
Of

requirements. Atlanta staff, who

lion4o;community deyelop
-

tection regulations.

were involved in developing

ment lending. In addition, staff

; & r dt
+ ce i.

Like

members kisted t r e ~ i ~ t r i ~ tothq areas of the supervision
he

. and implementing a rigorous

financial o+tions

curriculum for examiner training

I

t

.

h,seaing

and regulation division, the dis-

up community development cor-

count function was also affected

Board of Governors in 1%),

porations. These initiatives will

by the passage o FDICIA. One
f

have taken a similar role in a

help finahce affoqble single-

of the law's provisions, designed

program to integrate Federal

and mukifamily housing and

to help ensure the least costly

Reserve examiner training with

small. business development

. resolution of problem institu-

the FDIC's. The District also

throughout the District.

and ceAification adopted by the

*
~

I8

-i

L

continued its support for various

tions and thus avoid excessive

During 1992, the second year.

*
System initiatives by contribut-

of collection and analysis of

I

ing substantial resources to spe-

e w n d e d 1990 Home-Mortgage

.cial exanhations and criminal

Disclosure Act (HMDA) data,

drain onthe deposit insurance
fund, involves raising the Fed's

.

potential liab&ty in lending to

failing institutions. Through

investigatio9, task forces, and

increased attention was f@

f
providing chairmanship o the

the annual Shared National

on fair-lending issues,.parti&-

Federal Reseke System's-Sub-'

ly on apparint disparities in the

sommittee on Discounts Ad

Credit review, the coordinated
review of large natidnal credits
by federal regulatory agencies.




*

A
b

treatment of m n r t loan appliioiy

.

cants. Atlanta Fed consumer
I
)

-Credits, the Sixth District positively influenced System lending

0

,-

e
4

k

policy re&rdhg these provisions

of changes in monetary policy

development, a model that often

o FDICIA i s w! is other disf
e

from the impacts of konomic

underlies long-term local 9

count practice; In addition, the

shocks, charted the effect of

regional ckonomic planning.

discount function staff assumed

monetary policy on the Treasury

W The staff also cokidered

responsibility for coordinating

yield curvg, and developed a

issues arising from thq rapid

the Distrkt’s risk management

f
finance-biased model o foreign

-

4

changes in the nation’s financial

4

and monitoring program for

exchange rate determination.

institutions and markets and

accountholdeg. Institutions are

The foreign sector also received

their regulation. One study cul.-

*

monitored to determine whether, . attention in a stqdy that indicates

W t e d in a proposal for avoiding f m c @ distress through

excess credit exposure exists,
whether daylight overdraft.cdt
,

some adverse effects of exshange
rate variability on intemtional

lmt are suitable, and whether a
iis

trade flows and in work on for-

discoynt window lending policy.

malizing structures necessary for

Another study went beyond

international pqlic;y coordination.

banking to compare and co

3

“high-risk”designation should

be assigned,,and the fmdings are

~

cmrcktjng bank closing.and

5

Research on c information
the

communicated to appropriate

the nation’s pension insurance

.content of consumer confidence
as well as the role of

parties within the Reserve Bgnk.

-

H The &count rate was low-

system with its insurance system

survey and employment infor-

-

- .C In research related to bank

mation irr forecasting industrial

.

cent to 3.0 percent on July 2.

consolidation, staff members

.

h

-

-

production assesses the useful-

called into question claims of.

ness o data often relied on to
f

cost savings from bank mergers

d.
Issuesplated

monitor the domestic economy.

as well as widely held explana-

to the.Federal&eie’s .

-regional economic conditions,

tions of variations in bank prdf-

monetary and financial policy

As an additional aid to tracking

itability among banking markets.
Financial economists also studied banks’ merger motivations

publicly available sur-

-

vey o activity at manufacturing
f

and their choice of capital

research department in 1992, a

plants in the Southeast.

instruments. This work, which

year of continued slow econom-

H In research on long-term

extended the departmtnt’s

ic growth and financial uncer-

trknds in economic activity, two

inquiries intp the structure Of .

tainty. Reacting to recent

c

*

studies address the contribution

-

production in the financial ser-

difficulties in settjng moneta+

vices industries, led to

policy goals and evaluating the

physical, to economic &wth

ence for experts oaefficiency in

economy’s near-term path

while a third provides a history

financial institutions.

involved work on seyi-al issues.

and critique questioning the

H S&

W examined the problems

,

of capital, both human and

usefulned of

the ecopomic base

% confer-

continued to explore

developments in financial mar-

4

involved in separatjng the results
L




* model

o regional economic
f

.

kets and insmq
ents and *eir

+

responiibilities occupied the

,

.

&hestaff developed a

-SEARCH

’

,

for depository‘intermediari4s.

surveys

ered once in 1992, from 3.5 per-

21

4

.

*

c

*

policy Eplications. A conference

near-term prospects for the

The department updated and

held-early in the year brought

Southeast's economy and $
e

le@s@Ed o is ma3 popular
two f t

together expem in f m c i a l mar-

financial services industry. In

plllphle$s-oneon~

kets and new desvative financial

conjunctiofiwith a series of edu-

counterfeitcunrencyandanother

instruments with policymakers iR

catioh activitiesto Commemo-

onthe~andfunctionsd

.

"

I

public policy issues among aca-

rate the New York Stock

demic economists who specialize

staff organized a seminar on reg-

newsletterreportingresearchdiVi-

in finance. The staff also devel-

ulatory issuesjn banking and

s@ activities.

oped, tested, a d outlined the

securities markGts.

H Stadstid-.

an attempt to raise intemt in

impliations df models for securi-

the Federal Resenre System. It also
2

Exchange's 2ooch anniversary,

cooidinatedahdproddanew

0

Depart-

4

u

H As part of its outreach to eco-

ment staff developed special

ties pricing, pathdependent

node educators, the depart-

mechanisms for monitoring

~ p t i o nand mortgagehacked
~,

ment, along with the Louisiana

changes resulting from numer-

securities.

Council on EcononUc Education

&
0

ous revisions €0Regulation D

1

Research staff also assisted

and the Dallas Fed, taught an

during the year, includinga

cash services in /developing a

internagonal economics course

reduction in reserve require-

currency inventory model that

for high school teachers at the

-men&,closingof loopholes,

may help cash services target

f
University d New Orleans. Stal3

reducing the lag in counting

the apount of currency to order

members also developed a cur-

vaat cash as a component of

from the u.S. ~ m u r y .

riculum guide to a€company an

required reserves, and doubling

article in Regional Updateon -

f
the amount o carryover permit-

Public AtTaim. Conferences
and seminars on international

understanding the unemploy-

trade, fmancial regulation, and

ment rate.

.

ted between reserve mainte-

.
LT
nance periods. The department

-*

.

In addition, ;he Bank caspon-

also provided staff at the Board

sored the Fifth Special Financial

of Governors-andthe New'York

educational progmms in 1992.A

mnference of the American

Federal Reserve Bank with early

conference titled Tconpmic.

Committee on As&

Development in the Southeast-

Studies, a consortium o acaf

Taking a Giant Step Fo&ard''

demics and policymakers

broight speciaiists and practi- '

involved in the economies o
f
8

W Data in the National

tioners together to discuss devel-

Asia and the pacifii R m Much
i.

Information Center ,data base

opment issues ranging from

of the discussia)? corwemed

were further d i p 3 as staff gath-

regional development were a
major part o the department's
f
c1

s

housing and the environment to-

Economic

-European monetary union, and

-

information about the effects of

.

ings at. depository institutio~S.

these changes on reserve hold-

ered and entered more precise
1

exports and financing. A region-,
a1 roundgble, cosponsored with

participants included central
.bankers from Germany and

the National Association o Busif

France as well as a number of

ness Economists, focused on

Asian countries.



I

.

.

J

information for commercial
banks' branches and the repre-.

,
sentative o f c s o foreia instifie f
*
* tutiom in the Sixth District. The

t

. .
. department assumed responsibilI

inpxtant step f6r minimizing

ity for gathering and processing

the risk of the m
e
'.

Home Mortgage Disclosure Act

designpd begq'to develop

a Systemwide conversion, the'

repom.

*Sixth District

As pr o
%c f

5 also begun

b

new softwmfor the Federal
Reserve's exsystem, kno&

4

accounting

as PACS (Plan-

W Within the department a

replacing its data communica-

ning and Control System). The

research apd yxdysis group and

r c

tion system. The project, wbich

new system will be the Federal

;Killextend through 1995,

Reserve's fvst major application

involves installing a high-speed,

to operate on multiple (PC and

hgh-reliability network to s u p

mainframe) platformi. ~0ftGire

a trainingacivisory group were

'

formed to help build on the
d y t i c a l content o the departf
b

,-

ment's work. Atlanta staff

.

port the conso!idated p r o c e d g
data and the growtkin el--

development is scheduled to

trained personnel at the Miami
Branch in'report prepadion for

tronic payment services.

Edge Act corporations and for-

WpaymtntssystemRts)r~~

beginning in January 1994;,at

,eign bank agencies.

mTIE ~ a n k
.
piepami for

least six R-rve

further payments system risk pol-

.

Of

eventually usi: the new system.

be completed by August 1993,

.

with implementation in Atlanta

-

.

B a e will .

icy changes approved by the

Board o Governors. ring 1992
f
software rei- for a&unting,

centdized billing (accounts

rauy
securities, funds, and T e s r

signficant resources toward

'

ed the design inJuly for a new
receivabl?) - a
@t

will p m

c

Cess all twelve Resew: Banks'
3RPORATE S E R V I C E S

I

billingopektions at one of the

preparing formflsfefring its

system's new consolidateci data

changes, which include *&ions

processingsitesi

cessing to three Federal Reserve
*

implemented M supportthese'

IBM mainframe cOmputer pro-

~

(eff&&,ve in October 1993) to

w

cdnsolidated processing sites

procedures for meaS;ring thi

involved in the development,

f
amount o overdrafts itl reserve

maintenance, and support o
f

in 1993. The consolidation,

.

announced in late 1991, is

and clearing accounts during the

e

,

he Distric;~ntinues
to

Fedlii;e,aPC-basedsoftware

*

4

intendEd to make the Federal

&y. In addition, Reserve Bank

pioduct through which financial

Reserve's electronic p a p e n t

staff used interfacing software to

i s i u i n nationwide access
ntttos

services even more reliable and

test new &flight o v

to rovide a &ore uniform level

toring software and began prepa-

electronic payments, account

of customer service nationwide.

rations to host sefninars in 1993

information, and cash ordering

Atlanta computer staff have

to help i s i u i n review t h e
ntttos

and deposits.

P

-

installed and have begun exten-

1

1

moni-

-polidjl changes.

F e r a l Reserve services such as

W The Bank continued its lead-

sive testing of much of the s f ot

W SoftWareDevelopment

ership in a System project to

ware that will run in the

prefects. Programming staff in

enhance'payments data security

consolidated environment, an

Atlanta completed the detailed

using a message authentication




.AP

'

code (MAC), a form o digit&
f

approved to enmuage key staff

Bank's comprehensive, autdmat-

signature that indicates whether

members to remain with the

ed m~nankes~urce
iRf0r;nation

an electronic message ha^

Bank during h e w i t i o n and to

system. The data base provides

modified, during transit. & h a r e

f t l t t start-up operations at
aiiae

considerable support to Bank

.

d hadware cokponents for

the conmiidat& sites. SO far!

management in setting person-

.

-

seven individuals from the

MAC system'were tested

ne1 policies and obj&es,

par-

Atlanta Bank have aqxpted jobs

ticularly affumatve action goak;

verified the soundnep o the
f

a the comolii3ationsites. The
t

maintains information critical to.

'technical specifications, but the

Bank is also assisting staff mem-

managing the W

project is still in the develop-

.

bets who may notbe r t i e
eand

tion and benefits pgramq and

mentalstages.

once consolidation is pmplete:

enhances the Bank's automated

ing the ACH system, &ch

a

m I n t e r i m ~ d i w m h d o n . Several meetin& held with out-

s compensa-

payroll system.'

In 1-92 the Bank leased office

'side pf&ionals were designed

H In 1% the Bank's,manage-

space to accommdite Atlanta

to help individuals prepare for

&nt approved a newmanaged

the change.

staff d W g the period required

.,.

care a - m a c h for administering

'

health benefits, The new plan,

TQ ensure compliance with

to study, plan, $sign, and con4

in effect

struct facilities @at w l meet
i
l

the Americans with Disabilities

long-term facilities needs*f the

Act hplemented in' 1992;all

head ofice.A% aqditional

ing and employment practices

28,500 square feet leased at the

were reviewed, resulting i
n

55 Park Place ofice tower

modificatons to & e % a n ~ s '

allowed relocatioa of the statisti-

employment applicition form

cal reports department from the

.kci,dthir appropriate changes.

6 of January 1, rW3,.

will replace the indemnity plan.

hir-

1

*

It is designed to help contain
Y

cost
~

*

increases in healthbenefits

wfiile providing employeeS
I

improved benefits at discount&
w
g i e .A I G ~savings for the
rc s

Marietta Street building and,

Bank are expected to range

expansion of space' occupied by

.

In addition, extensive &&ng
sess@nswere held at each of

fro@ $500,000 to $800,0o0or

the District's six offies.to

more. Existing HMO options will

departfhent at Park Place In

if
n
m sup-

continue to be offered at each

additictn, a seven-year l a e was
es

ment staff o the act's impliaf

signed for %,so0 square feet in.

tions, and special procedures

the Equitable Building, adequate

were estabkhed to help depart-

o
space T house several depart-

ments i d e n w essenkl job

ments that will relocate to these

fui~ctiork order to comply
in

offices duririg 1993.

with specific provisions o the
f

thg supervision and regulation

.

and manage-

6ranch office.

.r

he District's audit management implemented'a
6

a

'

&

number o organizational
f

~ H u m a n W . T o s u p

UDITI

port the Federal Reserve System's

qutomati2n consoiidationsa
t i




I

department staff completed an

changes in 1992 chat better'pre-

zI

1

effectively in an environment of

he Bank's 1992 Distin-

f
Helsinki School o Economi-

increasingly consolidated Disqct

guished Speakers Series

spoke to audiences of Atlanta

featured a variety o prominent
f

and System operations. The
*

structure of audits was ais0

f: ECRETARY'S

changed somewhat to improve

b~siness,
ziademic, and commu-

OFFICE

w

I

their quality, effectiveness, and

individuals including former U.S.

the Advisory Council on Small

efficiency.

Senator and Presidential Chief o . Business, Agriculture, and
f

W Audit emphasis was added in

Staff Howard Baker, Secretary of

Labor held two meetings to

a number of areas of autgmation

Health and Human Services

exchange views with President

including enviromheitai s f ot

Louis Sullivan, the late FDIC

Forrestal and Atlanta Fed staff

ware products, data security,

Chairman d l & Taylor, finan-

on business and credit condi-

-B"

5

. microcomputer applications, and ' cia1 advisor JohnG. Heimann,

.

tions in the region. President

the IBM AS/400.The department

Confehce Board President pres-

Forrestal also met twice with

continued to provide audit cov-

ton Townley, Federal Reserve

the Financial Institutions AFfvi-

erage and monitoring for both -

Chairman Alan Greenspan, Fed-

sory Committee, which repre-

era1 Reserve Governors Sus'an

sents commercial banks, thrifts,

Phillips and Lawrence Lindsey,

and credit unions: to discuss

W The Bistrict continued to

and economist Norman Robert- .

some provisidx of FDICIA

serve as-the site for the System

son.A l discussed domestic and
l

such as prompf corrective

Centa for Auditor Devklopment

international financial 'industry

action and new real estate lend-

(SCAD), a tqining unit that

and economic concerns. Ryder

ing standards. c

develops Fed-specifi auditing

System Chiirman Anthony

System and District s o b a r e

.

development projects.

-

8

In conjunction with his mone-

r,

programs and negotiates con-

Burns spoke to a joint meeting

tary policy re'sponsibilities,

tracts for external training ser-

of the Sixth District's head office

President Forrestal also met

. vices on behalf of the Sysgm's

and branch directors.T h r e e d i ~ -

'periodically with leaders repre-

. audit community. In collabora-

tinguished international figures-

senting business, academic,

tion with SCAD, auditipg cpor-

Andn5s Rozental, Deputy Foreign

financial, consumer, labor, and

dinated and conducted the first

Minister of Mexico; Carlos Rojo,

other community interests

SCAD Symposium on ~ o c a l

Under Secretary of the Ministry

throughout the District to dis-'

of .Econohy for Argentina; and

cus4 current economic and policy-

JaakkoHonko, Chancellor of the

related issues.

. Area Networks and Personal
Computers.




'

'

1.

e

-

IARD OF DIRECTORS

.

A
EDWINA. HUSTON

>

CHAIW

Senior Executive Vice President-Fice
Ryder System, Inc.
Miami,Florida

-

-

I
&

J. THOMAS HOLTOV
President
Sherman InternationalCorp.
Birmingham, Alabama
U

VIC~ORIA JACKSON
B.
President and Chief Executive Officer
DSSfiroDiesel, Inc.
Nashville, Tennessee

LEO BENATA~
DEPUTY~CHAIRMAN
Chairman and President
Engraph, Inc. :
Atlanta, Georgia

W.H. SWAIN
Chairman'
F r t National Bank
is
Oneida, Tennessee

J-

B.

chairman and,Chief Executive Of€icer
SunT~ust
Banks, Inc.
Atlanta, Georgia

AND& M. RUBENSTEIN

HUGH BROWN
M.
President and Chief Executiw Officer

Chairman and Chief Executive Officer
Rubenstein Brothers, Inc.
New Orleans, Louisiana

T

SIMPSON
RUSSELL
Chairmanandpresident
The First Nad%nal Bank of Florence
Florence, Alabama

4

Geqini SpMgs Farm
DeBary, Florida

I

? A N C H DIRECTORS

E.B. ROBINSON,
JR.
%airman and Chief Executive Officer
Deposit Guaranty Nation$ Bank
lackson, Mississippi

-

.

1

I

6lRMlNGHAM

ROBERTM. B R E T
A R I
Chaand President
The First National Bank of Wetumpk
.
Wetumpka, Alabama

N E ~ P. STEPHENSON
A
C AR A
H I M N

F'resident
Nelda Stephenson acha;olet, Jnc.
Florence, Alabama

DONALD BOOMERSHINE
E.
'President
Better Business Buieau of
Cn Alabama, Inc.
ew
Birmingham, Alabama

S . EUGENE
ALLRED
chairman,President, and
Chief Executive O
!
X
Frit Incorporated
Ozark, Alabama

MARLIN

JULIAN W. BANTON
Chairman, President, andChief Executive officer
SouthTrust Bank of Ala&,
Birmingham, Alabama

s.

M O E JR.
O R ,

C
W
Pritchet-Moore,Inc.
Tuscaloosa, Alabama
N.A.

2

JACK~ONVILLE
&AJANELENC?S-BRENT
C A R A
H I M N

'

ARNOLD A. H E G G E S - F ~
William H. Dial Professor of.

'

President
Paul Brent Designer, Inc.
Panama City, Florida

B
g
and Finance
College of Business Administration
University of Florida
G a i n e d e , Florida

.PERRY DAWSON
M.

Presideht ancXhief Executive Officer
Suncoast Schools Federal credit Union
Tampa,Flo~+&
GRE
EL

L. G A E
R SR

.

Chairman and ghief Executive Offi&
First Natio.4 Bank o V q i c e
f
Venice,Florida



.

COLUMBUS SANDERS
President.
Consolidated Industries, Inc.
H u n M e , Alabama

.

HUGH JONES, JR.
H.

chairman and Chief Executive m c e r
Bamett Bank o Jacksonville, N.A.
f
Jacksonville, Florida

JoAND. RWTIER
Member
Florida Board of Regents
Orlando, Florida

4

SAMUEL . VICKERS
H
Chairman, President, and
Chief Executive officer
Design C o n m e n , Inc.
Jacksonde, Florida .

m

I

>

.

I

-

MICHAEL WILSON
T.
President
Viegar Ekhd Farms,Inc.
M e Glade, Florida

PATL. TOTO,
JR.
Executive Vice president
United Teachers oflhde
Miami,nolida
,

A. GORDON OWW (resigned)
Presi&ntandChief&ecutiveOfEcer

R O B ~ O BLANCO
G.

ViChaimunandC&efFinan&dolEcer
Republic I+xkmal Bank o Miami
f
Miami, mlida
,

Thecitiwnsandsouthem
National Bank of Florida

R. KIRK LANDON
ChilirmanandChiefEx~Officer
American Bankers Insuprr)ceGroup
Mqp, Plofida
b

'

a

E. ~ O N NEWTON
Y
-Fwsident
wvrd N t o a Bank
ainl
P a Beach, Florida

c

.

.

c

MIAMI

#

DOROTHYWEAVER
C.
President
Intercap I n v d hc
coral Gables, Florida

S E E c.SHIhaP
T V %
president
'
O-A-IWIorida, Inc.
Fort Myers, Florida

I,

t

FortIauderdale,Floirda~

-

,

NASHVILLE
&OLDA.BLACK

JM
A &

-

D .

HARRIS

huRGuERITE

C AR A
H I M N

FirstAmericanBankDistinguished
Professor and Head
DepQttment o Finance
f
C~tlege Busmess Acbhhtratim
of
UnivAity o ~ennessee
f
Knoxville, Tennessee

-

president and Chief Executive Officer

Brentwood National Bank
Brentwood, Tennessee

Amgican General Life and Accident

6

*

President and Chief Executive OtXcer

Nashville, 'EkuKssee

WILLIAM
BAXTW
LEE I11
chairman and President
.southeast senrices corporation
Knoxville, ~ e n n e s s e ~ '
*

.

w. LUNDY

chairmanand Chief Executive ofticer
I
P i National Bank of Vicksbug

C AR U
H I h N

Vicksburg, Mississippi

.

J B B. BULLAR~,(resigned)
o l
JR.

.

Presidht
Joe BullaFd Automotive companies ,
Mobile, Alabama

-

HOWARD . GAINES
C
chairman and Chief Executive Officer
First National Bank of Commerce

t

Insurance company

.

VICTO~
BUSSIE




JAMES TtmRpp
R.

b%VProDieseI,hc.
Nashville, T n e s e
ense

NEW
ORLEANS

President
LouisianaApGcIo
BatonRwge,Louisiana

CorpOnteQlildcare
Managementserrices
Nashville, T e n n e k e

VICTORIA J A ~ (resigned)
B.
N
F%&iit
and Chief Executive Officer

'

WILUAMS ARANT, JR.
E.
&e.s?ent w Chief Exeaitive Officer
d
F r t Natiopal Bank o Knoxville
is
f
- .
Knoxville,Tenne+see

+

w. ShLLEE

president and c i f Executive &cer
he

.

r

XAYL. NELSON
ManagingDireaor
Nelson Capital Corpwation
?veworleans,Louisiana
LUCIMARLW T. ROBERTS
President
Mississippi Coast Coliseum Commission
Pass Christian. 1cIississiobi

JO ANN SLAYDON

' president
Slaydon Consultants and
'Insight F'roductions and Advertising
Baton Rouge, L O U ~ S ~ M
A. HARTIE
SPENCE
(resi@ed)
president
Calcasieu Marine National Bank
Lake charles,touisiana

.

.

.

R O ~ E RP. FORRESTAL
T
President and Chief Executive officer

.

H.

t

-

SHEILA TSCHINKEL*
L.
Vice President and
D M o r o Research
f

EDMUND
WILLINGHAM
Senior Vice President and
General Counsel‘

TERRY
S*
?
M. WALLACE**
Senior Vice President and
GeneralAuditor- ,
-

JOHN

*Menagement*

VICE PREYDENTS
LOIS C. B E R ~ M E
vice President

JOHN

w s J. CRAVEN,
a
JR.
Vice President and

-

ZANE-R. KELLEY
Vice President

CHRISTOPHER BROW
G.
Vice P p i d e n t

B. FRANK KING
Vice President and

-

.

-

.

DireaorofHumank&s-

R.

~

R

R

*

M

V

i

S

U

t

- c o~ m i d e e
O m

M. McKEE .
ViceMident

JAMES

JOHN

V i e President

-

D.

PELlCK

Vice President

.

-

A”EM.DEBEER
Vice President

MARYS ROSENBAUM
.
Vicepresident
RONALD N.ZIh5MERMAN-

VicePresident

’

WILUAM HUNTER
C.
Vice President

& I

H. ATKINSON
Assistant Vice President

JOHN

+

D

SUSAN

i

HOY

RONALD ROBINSON
J.
Assistant Vice President

Assistant General counsel

R. BRANSCOMB
t Vice president
.

JOHN

W

e *

.

!mr
$ o

Senior Vice President

I

A L D v *

Executive Vim president

chiefoperatingofficer

PRE~IDENTS

RICHARD R. O m *
Seniorvicepresident

-

w. PPONNIE c

W

First V i e President and

.

SENIOR
VICE

JACK G

A F. ChdR
~

E. V
N 11
1
AssistantGeneralCounsel

MELINDAJ. RUSHING
Assistant Vice President

&ERT

,

NANCY MCCRUMMEN
R.
(retired>
Assistant Vice President

Assistant Vice President
#

THOMASCUNNINGHAM
J.
R s ac m e
ee r h c r

W

CWELLED. DAVIS
Assistant Vice President

LARRYJ. SCHULZ
Assistant Vice President

L. PIJXINTON, JR.
Assistad Gen@ Auditor

%IJAYNE

.

COX-BRYAN

Assistant Vice President and
Corporate secretary

LARRY WALL
D.
Research Ofcr
fie

ALVIN

4

T. WATSUN
A s s i t Vice President

TED G . m D Y I 1
1

JESSIE

Assistant Vice President
L

P. RIVERS 1 1
1
Assistant Vice‘President
-O
* N

WILLIAM ROBERDS
T.
WILLLUM
R. HERBERT
&istant Vice President




ROBERTT. SEXTON
A s s i i t Vice President

A. MUR~HY
t vice President
I

*

B ESTE~ 1
.
I
1

Assistant Vice President

i

ResearchORcer

,

ADRIENNE-M. W L S
E L’
Assistant vice President
KIAN KLW W ~ N G
Assistant V i q President

.

-

ATLANTA
I

Assistant Vice President
ROBERTA. LOVE
Assistant Vice President

Senior Vice President and

" coordiaatingBranch Manager
,

#

a

WILLIAM PO-LL
R.

FREDERIC FULLERTON
L.
Assistant Vice President

W ~ D L Y N BASSLER
M.
(retired)
Vice President and
Assistant Branch Manager

.

ROBERTI. MCKENZJE
Assiitant &e President

JAMEg L. BROWN

DONALD NEISONE.
Senior Vice Presidqt and
Branch Manager

CHARLES w . P I E
RM
Assistant Vice President

.
I

Assistant Vice President

EDWARDB. HUGHES
Assistant Vice President

ROBERT DOLE
G.
Assistant Vice President and
Assistant Branch Manager .

c

.

'

JACKSONVILLE
J~MES
D.

HAWKINS*
Senior Vice President and
Coordinating Branch-Manager

DANIEL MASLANEY
A.
Assistant Vice President

&ERLY,K. W r ~ s r e ~
Assistant vc PreJident
ie

.

L WELTZIEN.
A s s i i t Vice President

JEFTREY

ROBERTJ. SLACK '
Assistant Vice President and
e i s t a n t Branch Maxxger

MIAMI
J M S T. CURRY
A E
Vice President apd Branch Manager
JUW D E L BUST0
Asfistant Vice President and
Assistant Branch Manager

.
*
r

-

.-

I
-

.

VICKIA.
ANDERSON
Assistant Vice President
FREDD.COX
Assistant Vice President

RAULDOMINGUEZ
Assistant Vice President

a

-

ROBERTDE h Y A S
Assistant Vice President

NASHVILLE
M E L V Y N K. P R E L
U CL
Vice President and Branch Manager

WILLIAM D m s
W.
Assistant Vice President

E. W R E
A RN
A s s i i t Vice President

JOEL

L

\

.

LEE C. JONES
, Assiint Vice Preident and
,Mistant Branch Manager

.

MARGARETA."HOMAS

Assistant Vice President

*

-

-

E. CHANNING
WORKMAN,
JR.
Assistant Vice President

i

NEW
ORLEANS
ROBERTJ. M U S S ~
. Vice President and Branch Manager

'AMYS.GOODMAN

Assistant Vice President

PATkCIA D. V A N DE
Assistant Vice b i d e n t

WILLIAM SMELT
H.
Assistant Vice President and
AssistantBranchManager .




G A F
R A

?-

A

.

ATEMENT O F C O N D I T I O N

-

&31,1991
$

-119
3,92

479,000,000.

503,000,000

$

3o33ooo.m

318,000,000

46,309,635

38,246,964

9,115,275,522

10,228,575,482

IC

895,199,642

1,304,767,107

56962,197

57,015,133

3,003,780,421

2,296,550,712

.

1,987,388,156

a

3,833,067,333
3

Total Assets

$15,886,914,563

$18,579,222,731

3

F e d e d Reserve Nabs

$1 1,425,796,490

$13,231,945,372

3,101,919,515

4,100,864,625

792,359,948
81,241,610

600,199,151

TotafLiabiiities

$15,401,317,563

$17,999,942,331

T t l Capital Accounts
oa

$

Total Liabilities and Capid Accounts

$15,886,915,563

DePosiw

485,598,000

66,933,183

$

579,280,400

$18,579,222,731

'Includes depssitory institution accounts, mlkged funds due to other Federal Reserve Banks, U.S. Treasurer-Genet-al.accwnr, other
and m i q b m u s
.depoSiu




.

TATEMENT OF

.i
l

-

EAu"G8ANDExpBNsEs

,

current Income

-1*91
3,19

_.

$8737509,356

*

129,128,941

1

costofEamingscredits

3 , i992
1

$!297,067,482*

I

Current Expe;lses

EARNINGS N D EXPENSES
A

138,361,845

'

13482,866

-\

I

13,536275
#
4

I

b
*

Current Net Income

$854,455,675
38,592,616

W,i304,216)

10,430,300

*

*

$721,711,236

11,888,400

11,484,999

-

Net Additions (Deductions)'

'
1

15;152,ao5

I

-m,ent

for ~xpenses ~ o a r of~Cdvemors
of
c

Federal Rese~e
Currency C s
ot
Cost of*U n r e i m b d lfeasury Services
.

-

6,844,689

w

3,010,027

a
li
\

-$864,288,303

Net Income before Payment to US. T e s r
rauy

O
N

.

OF N T
E

$5%,856,388

*
L

>

.

I

,

a

$ 14,806,390

$16,384,793

852,190,013

533,630,395

(2,708,100)

Dividen+ Paid

46,841,200

I

Payments to U.S. Treasury (Inten?st on Federal Resenre Notes)

D

T r a x @ d to Surplus

-

e

$864,288,303

- T e d Income Distributed

-

*

S u R . P W s ~ m

Surplus January 1
Surplus December 31




I

-

$596,856,388

.

-

~~

. $245,507,100
$242,799,000
.

-

$242,799,000
.I.

$289,640,200

checkclearing

1

q.s. Govem!nent checks processed

69,034

Commemal checksProcessed
*

.

2,890,085

-6.8
26
.

\

)

-1.4

@069

f

3,’000,989

c

Electdic Payments
A~cOmmercial~Govemment
Payments processed
WE Transfers of Funds

.‘S

261,681
9,522

-.

10.7
49
.

307,455
* 9,949

98
48

-40
1.
-.
20

‘98

1,878

1.
69

securitiesse&ces

42
.

-5.8

56

6,954

v

Redeemed




.

-68
2.

.42.6

251

-

25
.

5,875

.-15.5

-3
2s

79

*

‘4

b

-OtherTreasury Issues
’Issued

-1

-.
90

460
-64

a

. U.S. Savings Bonds Redeemed

-

50,

.

c

&-Line Bookermy Transfers
Noncash Items Processed
Definitive %&keeping Receipts

U.S. Savings Bonds Issued

0

1,187

P
h

1.
75
45
.-

-68.5
.
.

. r w

.68

-23.6

49

-79
2.

3

-40.9

3

e o

c

7?
4
628,244

-.
99

36.5

-

+.

738

v

.

-.
12

.748.57@

1.
92

.




This annual report was prepared by the Public Affairs Department
of the Federal Reserve Bank of Atlanta. Design: Carole L. Starkey.

.FEDERAL RESERVE

B A N K O F ATLA-NTA

HeadMFlceaadhta
104 Marietta W e t , N.W.

I

-

. Btrmingham, Alabama 35203-2104

-J

&OO water street '

6

Miami, Florida 33178-2425

NahvilkBranch
301 Eighth Averme, North
Nashville, Tennessee 37203-4407

~OrleaasBrancb

.

525 St, Charles Avmuc
New Orleans, Louisiana 70130-3480




printed on recycled paper


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102