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1993
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JTessage from
the President

7

he 1993 annual

I would like to express my appre-

report of the

ciation to all of the Sixth District’s direc-

Federal Reserve

tors for their valuable counsel throughout

Bank of Atlanta

the year. In particular, I want to acknowl-

features some of our accomplishments

edge those directors whose service ended

for the year along with the consolidated

in 1993-Simpson Russell, who served on

financial statements of the Atlanta,

the head office board; Merle L. Graser

Birmingham, Jacksonville, Miami,

and Hugh H. Jones, Jr., of the Jack-

M

Nashville, and New Orleans offices. The

sonville board; and James R. TuerfT, who

d

names of all directors and officers who

was chairman of the Nashville board.

served the Sixth District during the past
year are listed as well.
In addition to the review of the

Q)
Q)

My special thanks
go to outgoing Chairman of

the Atlanta Board of Direc-

year’s developments, this report includes

tors Edwin A. Huston, who

a discussion of measures of economic

served for two years in

performance, particularly as they relate

that position and two years

to the ultimate goal of economic policy-

as deputy chairman. I also

well-being. Output measures like gross

wish to recognize E.B.

domestic product and employment pro-

Robinson, Jr., who ended

vide valuable information but do not tell

his three-year tenure as a

the whole story. The essay reviews some

member of the Federal

of the recent attempts to bring measures

Advisory Council and who

of economic well-being more explicitly

previously served six years

into the policy debate and explores the

as a head office director.

I

problem confronting policymakers who
must attempt to shape policies that fos-

ter well-being in the absence of definitive
measurements.


http://fraser.stlouisfed.org/
C
Federal Reserve Bank of St. Louis

Robert P. Forrestal
President and Chief Executive Officer

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Y n Pursuit of
Economic Well-Being:
The Ultimate Policy Goal
In Search of a Measure
By Robert P. Forrestal

.le year 1993 was a good one for many areas of the world,
judging by several widely used measures of economic performance. In the United States gross domestic product (GDP)
expanded by nearly 3 percent. The inflation rate, as measured

by the consumer price index, declined from 3.1 percent in 1992 to 2.7 percent in 1993.
Likewise, certain foreign economies, particularly those in Latin America, which only a
few years ago had languished, enjoyed
another year of healthy GDP growth while
inflation remained much lower than had
been the case in most of the 1980s. The Sixth
Federal Reserve District, which encompasses
Alabama, Georgia, Florida, and parts of
Louisiana, Mississippi, and Tennessee, also

.

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had a good year, judging by employment statistics. Job growth outpaced that in the
nation by a margin of 1 percentage point, with Georgia and Florida-the
states in terms of population-doing




particularly well.

two largest

Despite this apparent good news on many fronts, there are other ways of looking at things-other

standards of performance that can lead to different conclusions.

Last August, for example, the U S . government announced revised GDP figures for the
period from 1990 t o 1992. The new numbers showed that the economy grew more in
1990 and 1992 than previously reported and that the recession was not as deep in 1991.
On the same day the government unveiled these figures, the results of a nationwide
survey showed that consumer confidence stood at a low and depressed level.
Even now that U S . economic growth seems quite strong, various troubling
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to
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questions persist. Is this GDP growth enabling people to enjoy longer and healthier
lives? Do individuals and families have time t o enjoy the increased material goods they
can purchase? In the Southeast, the good news about fast-growing states like Georgia
is diminished by concerns about the persistence of poverty and the low levels of many
quality-of-life indicators-statistics

showing high infant mortality rates, poor achieve-

ment test results coupled with a higher-than-national-average
percentage of high school
dropouts, and the extensive degree to which state residents are dependent on government transfer payments as a source of income. In certain developing economies, such
questions revolve around the environment. Is fast-paced growth resulting in significant
pollution? Is industrialization being accompanied by such rapid urbanization that public health is actually deteriorating?
The statistics, particularly GDP and employment, that seem to embody good
news right now are essentially output measures-that

is, measures of what

economies produce. Questions that raise other concerns about the meaning of such
data center on the concept of well-being, or what economists term welfare. Because
many policy objectives are specified in
terms of output measures, economic
policymakers such a s legislators, cen-

tral bankers, and state governors often
seem preoccupied with production
data. The Federal Reserve, for example, informs Congress twice a year oj

its forecasts for GDP, inflation, and
employment a s a means of ensuring

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that monetary policy is accountable to voters’ elected representatives. State budgets are typically predicated on forecasts of overall economic activity for the coming
year.

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Despite this seeming bias toward output measures, in fact the ultimate concern
of policymakers is with well-being; economic policy’s fundamental purpose is to improve
social welfare. Well-being is a n intrinsically subjective concept, however, and does not
readily lend itself to measurement and aggregation. We remain dependent on the fact
that the concepts of income and, by extension, output, are logically connected to wellbeing and that these types of data can provide insights beyond their literal significance.
Income is related to welfare in the sense that the more income individuals (or societies)
have, the greater their ability to purchase whatever makes them happy. In turn, output is related to income because the value of whatever is produced is equivalent to its
purchase price, reflecting the income available to purchase it.
This understanding of how well-being, income, and output are related is helpful. It is also important that the measures of output we have available are good ones
that have been developed over a n extended period. For gauging overall economic output, we have progressed from depending on narrow indicators of banking and industrial activity to having today’s comprehensive national income and products accounts. It

is still not easy to measure income, but its conceptual linkage to output is well specified
in a n accounting sense.
As helpful a s it is, this relationship between output, income, and well-being
does not hold a t every point in time, and even output measures are not perfect. Policymakers must nonetheless rely on the existing measures, incorporating their value
while recognizing their limitations and pursuing improvements and alternative ways

to approach the concept of well-being. This essay explores the problem of shaping
policies that foster well-being in the absence of definitive measurements and reviews
some recent attempts to bring measures of economic well-being more explicitly into
the policy debate.

Output, Income, and Well-being
Economics as a discipline has traditionally recognized the importance of wellbeing and the difficulty of measuring i t - e i t h e r in individuals or society as a whole. At
the individual level, economists know that preferences vary. Some people will be happiest spending $100 of income on tickets to a football game; others, on a classical music
concert. At the regional level, Atlanta may enjoy much more rapid growth than the rest
of Georgia, but that very fact may render life in a small South Georgia town preferable

to those who value the pleasures of rural scenery, long-time neighbors, a short commute




to and from work, and stability in general. Of course, differences in personal preferences can be dealt with a t the conceptual level by assuming that two individuals will
choose what makes them happiest given equal increases in income. This assumption
justifies policy measures that are likely to enhance income and, in turn, output.
Over the long term there is a close correlation between output measures like
GDP and others like employment and personal income. Indeed, in a n accounting sense,
national income equals a nation’s total output of goods and services consumed domestically (that is, not by foreigners through exports). In turn, of course, as job growth creates the opportunity for higher incomes, people, on average, are in a better economic
position to obtain the things that enhance their sense of well-being. What they obtain
need not be solely material but can range from purely physiological needs like a better
diet, roomier and safer living quarters, and nicer clothes to “higher” needs like a sense
of community and opportunities for entertainment and intellectual stimulation that
give a sense of self-esteem and self-actualization. However, as noted earlier, these relationships between output, income, and well-being do not always hold, especially in the
short run.

For instance, following natural disasters, such as a hurricane or a n earthquake,
GDP usually expands because of the rebuilding needed. However, this GDP growth
hardly captures the devastation wrought on the lives of those affected by the hurricane

or earthquake. Statistics on wealth and the capital stock can gauge the extent of loss
that has occurred in dollar terms. Even so, the psychic costs are immeasurable. It is ironic that efforts to restore individuals’ sense of well-being to what it was earlier-through
counseling and therapy, for instance-are

recorded as increases in output measures.

Consider also that in the Unit-

Economics a s a discipline has traditionally recognized the imporfunce of wellbeing and the difficulty of measuring
; w i t h e r in individuals or society a s a




ed States over the past twenty years,
output has increased thanks in part to
the fact that more people, particularly
women, have been entering the labor
force. In turn, two-wage-earner families
have higher incomes and have been creating increased demand for services out
of the home. These data tell only part of

the story, however. One cannot infer from the increase in gross domestic output
whether, for example, the second wage-earner began work outside the home out of

choice or the necessity to support a family. Women who have entered the work force
may have larger homes and more possessions but much less time to enjoy them. On
the other hand, they may experience more freedom of action and a greater sense of
self-fulfillment by participating in the workplace. Because of the myriad complexities
and variables, it would simply be inaccurate to use GDP-or
measures-as

income and employment

the basis for concluding t h a t social well-being has been either harmed

or enhanced as a result of this change in the participation of females in the labor
force.
Moreover, this issue illustrates the fact that GDP has certain shortcomings as
a n output measure. For example, GDP does not assign any value to the work done (primarily) by women in the home-child-rearing,

cleaning, cooking, and so forth. Only

when these activities take place outside the home and are accompanied by formal transactions-fees

for services-do

they become part of GDP, yet these activities obviously

have economic value.
Such criticisms of GDP need to be kept in perspective, however. As a n output
measure, GDP has the purpose of measuring overall economic activity, and it does so
far more effectively than its predecessors. For example, before a precise formulation of
GDP and other national income and product accounts was developed in the 1920s and

1930s, a widely used overall gauge of business activity was bank debits. This measure
logged all bank withdrawals and because of, for example, double-counting, it was clearly a much less refined view of what was going on in a n economy. Other measures
focused on key sectors like freight car loadings and pig iron production, but these were
much narrower in scope than today’s standard output measures.
Just how far we have come in
effectively measuring overall economic
activity can be seen if we compare GDP
statistics in the United States and
Europe with those in the former communist countries. These countries are simply
not geared to observing market transactions; instead, statistical agencies are
accustomed to tallying output of large
state-run enterprises, which are shrinking in the wake of the move away from central
planning to market reforms. The numerous exchanges between consumers and street




d

vendors, small shopkeepers, and new businesses are often overlooked in official statistics
because there is no appropriate record-keeping and collecting infrastructure in place.
Thus, output measures in these economies will have serious downward biases until their
components can be broadened and their implementation techniques improved.

New Welfare Measures
J u s t as the economics profession and policy-related organizations like the U.S.
Commerce Department have improved output measures over the years, there have
been efforts to relate the concepts of GDP and welfare in more refined ways. In the
1970s, James Tobin and William Nordhaus, for example, developed a measure of eco-

nomic welfare that estimated a value for and then netted out of total output those
expenditures-for

example, pollution abatement spending and police protection-

prompted by efforts to offset the adverse consequences of other activity. Firms that create pollution historically have not had to absorb the costs of dealing with its effects.
Instead, these are passed on to other individuals and society as a whole. Some of these
costs were never included in a n explicit valuation; others were counted as part of GDP
in such forms as increased medical expenditures or direct expenditures on abatement.
The Tobin and Nordhaus measure, by taking such costs into account, was a step toward
better gauging social welfare in relation to GDP.
Efforts to produce measures of well-being continue. Within, the past few years,
several international organizations-the

United Nations, the World Bank, and the International Monetary Fund ( I M F b h a v e
developed and begun to use alternative

bconomrsts and policymakers ulle

approaches to evaluating economic

actively reeking better ways to mew

development. In addition, the Inter-

sure well-being and f~ understand its

mlaiionship to income and oueut.

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American Development Bank this year
included in its annual report on economic and social propress in Latin
*

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America a special report on the availability of education, health care, and

nutrition to men and women throughout society because such investments promote
development in the long run while enhancing welfare in the present.
The United Nations has created a “Human Development Index” that measures

quality of life by focusing on life expectancy, educational standards, and individual pur-

chasing power in various countries. The results sometimes create a different impression
of a n economy’s performance than output data alone. According to the most recent
index (published in May 1993), for example, a developing Central American country
like Costa Rica ranks much higher in its human development score than in its total output per capita. Specifically, Costa Rica ranked 76th by total output per capita but 42d
by human development. This ranking reflects the fact that the average Costa Rican
lives longer, receives more education, and drinks cleaner water than residents of many
other nations.
In recent years, the World Bank has also moved away from relying solely on
growth in GDP per capita as a way to measure whether people are becoming better off.
In fulfilling its charter to help developing nations achieve the level of industrialized
nations, the World Bank has relied in the past on growth in aggregate output as its
standard. It has now moved toward incorporating measurements of poverty, based on

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consumption and income, and social indicators that reflect access to basic health care

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and education, such as infant mortality and adult literacy, into its overall view of

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growth.
The IMF has also changed the way that it compares living standards among
nations. One of the problems with international comparisons of economic performance
arises from the fact that there is no single unit of value among different countries. A
developing country may afford a higher living standard than would be indicated by simply “translating” a basket of goods in one economy into the prices of another. Vacuum
cleaners and dishwashers might be quite
expensive in a developing economy, but
housekeeping services, extremely cheap.
In the past, the IMF compared national
incomes on the basis of the exchange
value of currencies. Acknowledging the
differences in the prices of specific goods
and services, the IMF now compares
national incomes according to purchasing
power, bringing the focus more on comparisons of actual living standards from country

to country.
At the level of individual research, the new president of the American Economic Association, Amartya Sen, has developed a n approach t h a t uses, for example,




r

mortality data to evaluate economic development in various nations. Sen concludes
that measures of economic well-being such as the way nations handle famine, health
care, sexual and racial inequality, and poverty are better gauges of economic development than output, income, or wealth and that more attention should be paid to the former type of indicators.

Assessing the New Measures
It is clear that economists and policymakers are actively seeking better ways to
measure well-being and to understand its relationship to income and output. Many
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challenges remain, however. There are certainly technical questions that could be
raised in regard to each of the institutional measures (questions beyond the scope of
this discussion). At a more general level, a major concern is that there is no single or
composite measure of welfare comparable to GDP for output. Indexes like those mentioned above and others have a basic weighting problem.
That problem becomes apparent in looking at another new index of well-being,
the Index of Social Health, created by researchers at Fordham University. This measure attempts to reflect social well-being by considering such factors as drug abuse and
the lack of affordable housing. According to this gauge, social well-being in the United
States fell from around 70 in 1970 to about 36 in 1991. The problem facing policymakers in deciding how to react to such a report is that, while these are serious social problems that detract from the increasing prosperity the United States as a whole has enjoyed,
just how serious they are deemed to be varies from individual to individual. As with
other attempts to assess well-being, subjectivity becomes an issue. To achieve a single
final number for the index, its creators
must impose some standardization.
The same problem applies to
the U.N. index or other numerical indi-

cators like years of schooling or morbidity and mortality rates. Such measures
may have some wide social consensus in
developing economies but not necessari-

ly in those that are advanced. Thinking just of the United States, it is clear that a high
school education was once considered the basic necessity for effective participation in
the work force, and the country could take pride in educating the majority of its citizens
through this age level. Today, however, a high school diploma per se may be inadequate

for obtaining the kind of job that would enable a person to own a home. Yet we do not
know just how much or what kind of education is essential, and Americans would have

a problem as a society agreeing on what constitutes a basic education. Likewise, we cannot all agree on standards for health care or cleanliness in the environment. What may
be a luxury in a developing country may be deemed a necessity in a n industrialized
economy as the options available to larger numbers of people become much broader.
This observation also shows that standards of well-being, even at the individual level,
are not fixed but continually change.

Conclusion
Where does this discussion leave economists and policymakers? Clearly, it is
encouraging that economists have advanced their work on measures of output, income,
and others that define policy objectives. It is in the interest of policymakers to support
the continuation of such attempts. At the Federal Reserve Bank of Atlanta, efforts have
been made to refine our understanding of inflation, the savings rate, and consumer confidence. Welfare measures deserve resources too and are rightfully receiving increased
attention. While such work goes on, policymakers must carry out their responsibilities
on the basis of measures a t hand. In this ongoing process, the work to date can help provide insights to those who make-and

those who seek to understand and influence-

policy decisions on the various ways of gauging a n economy’s performance.

This essay i based on ideas first presented in a speech delivered at the symposium on “Society
s
and the University in the 21st Century” in Buenos Aires, Argentina, on October 19, 1993.




s i x t h District Highlights
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he Sixth District
continues to be
challenged by the
tremendous
changes that are reshaping the financial
services industry. Bank merger and acquisition activity both inside and outside the
District, the introduction of new technologies, and the advent of new payment system regulations particularly affected the
provision of financial services in 1993.
Despite these challenges, the District
achieved 99.6percent cost recovery for all
priced services, falling only slightly short
of its annual target of 100.5percent.
Check Collection. To enhance
existing services and to provide new products, the District embarked upon a twoyear program to set up new checkprocessing hardware and software in all
offices. New check-processing mainframe
computers were installed in the Atlanta,
Birmingham, and Jacksonville branches.

. .....-

Birmingham and Jacksonville also began
to use new software for check processing,
payor bank service delivery, and check
settlement and reconcilement. The District piloted a system that allows financial
institutions to use Fedline terminals for
sending electronic adjustments to the Federal Reserve in lieu of paper. In addition,
two District offices tested an optical disk

storage system that enhances the research
and retrieval of adjustment information.
As a result of the District’s efforts
to promote electronic delivery of payor
bank services, the number of customers
for such services increased by 51 percent
over 1992 levels. Approximately 17 percent of deposited volume was processed t o
provide MICR (magnetic ink character
recognition) line information to paying
banks. In late 1993 Sixth District offices
introduced the new MICR presentment
services price structure mandated for
implementation by all Reserve Banks in
January 1994.
In response to new collection
options available in the marketplace and in
anticipation of the Sam-e Day Settlement
(SDS) amendment to Regulation CC, to be
implemented in January 1994,Sixth District offices developed and announced several new products that provide customers with
more attractive pricing, later deadlines, and
fewer sorting requirements. SDS will
prompt financial institutions to evaluate the
cost effectiveness of presenting items for collection through the Federal Reserve versus
presenting them directly to the paying institution. Introducing several of the new services during the fourth quarter of 1993,
ahead of the 1994 requirements, signaled
the District’s commitment to addressing
financial institutions’ needs. Most District
offices also began offering ancillary services
such as Canadian check collection, amount
encoding, and return-item reclearing in

1993.Despite some volume losses associated
with mergers and acquisitions and some
financial institutions’ increasing use of
direct presentment in anticipation of SDS,
the District’s overall processed volume for
1993 was the same as in 1992.
Electronic Payments. By
midyear the District achieved its goal of
an all-electronic ACH, with 3,600 ACH
participants receiving items electronically.
The District implemented ACH processing
schedules that allow more frequent
deposits and deliveries throughout the
day. In addition, the District consolidated
all commercial ACH functions into the
Atlanta office (for a projected annual cost
while achieving
savings of $750,000)
healthy commercial year-over-year volume
growth of 23.4 percent-the highest in the
Federal Reserve System.
Both on-line and off-line funds
transfer services, which had a volume
growth of approximately 2.4 percent, were
consolidated into the Atlanta office. All
District branches implemented a significantly enhanced on-line net settlement
service.
Securities Services. By the end
of the year, the entire Federal Reserve System completed its formal withdrawal from
priced definitive safekeeping services. The
Sixth District will continue to maintain
definitive safekeeping collateral accounts.
The Jacksonville office, one of two consolidation sites for noncash processing in the
System, had taken over noncash processing
for all other Sixth District offices by
August and for the remaining Districts,
Dallas and St. Louis, by September.
Fiscal Services. For the Treasury
Tax and Loan function, the District successfully implemented a “voice response”
system that allows financial institutions to
submit an advice of credit for federal tax
deposits via telephone.




Cash Services. All District

offices began using a cash inventory model
developed through cooperation between
the District’s cash subcommittee and the
research department. The model, customized for each branch, predicts cash
requirements and helps determine the District’s annual new-note order from the U.S.
Treasury. In addition, the cash operations
staff helped the five offices of the San
Francisco District and the Philadelphia
Reserve Bank install a minicomputerbased cash automation system developed
by the Atlanta Bank.

s

upervision and
Regulation. The

Sixth District constituency of state
member banks remained stable at 118 institutions with $45.3 billion in assets. Top-tier
bank holding companies under supervision
totaled 656 with $253.2 billion in consolidated assets. The Reserve Bank‘s responsibility
for international organizations included 108
institutions with t t l assets of $25.5 billion.
oa
Passage of the Foreign Bank
Supervision Enhancement Act (FBSEA) significantly broadened the Federal Reserve’s
direct responsibilities for supervising international banking. The act requires Federal
Reserve approval for all applications by
international banks to establish offices in

the United States. One criterion the Federal
Reserve must verify is that the home country supervisor provides comprehensive
supervision on a consolidated basis. “his
requirement has proved difficult to monitor,
particularly in developing countries, thereby
resulting in material delays in international

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application processing. FBSEA also requires
annual examinations of U.S. offices of international banks. The Atlanta Fed entered
into a formal agreement with the State of
Florida for alternate examinations of that
state’s chartered international agencies; the
Bank has had a similar, informal agreement
with the State of Georgia for several years.
These arrangements significantly reduce
examination duplication for financially
sound institutions.
Examination and monitoring procedures were updated to correspond with continued implementation of the Federal
Deposit Insurance Corporation Improvement Act as well as to keep pace with
changes in the banking industry such as the
increased use of derivative financial instruments. Staff implemented new procedures,
in response to changes in Regulation Y, for
expanding the Bank‘s use of delegated
authority in processing bank and bank
holding company applications. Significant
progress was made in training the recently
expanded examination staff in the commercial bank, holding company, and consumer
and community affairs areas. The department installed a new midrange computer to
better meet its increasing automation needs.
Consumer and Community
Affairs. A presidential mandate to reform

the Community Reinvestment Act and the
implementation of the Truth in Savings
Act through Regulation DD brought new
challenges to the consumer and community
affairs staff. Examiners explored sophisticated new techniques for detecting
unequal treatment during fair lending
reviews of loan portfolios. Numerous educational programs and advisory services
were offered to help bankers better implement consumer protection regulations. The
staff continued to assist financial institutions in establishing community development corporations and consortia that

promote safe and profitable lending activities in low- and moderate-income neighborhoods. The staff also conducted
seminars on the Truth in Savings Act and
highlighted credit access issues and innovative lending solutions through newsletters and workshops.
Discount and Credit. During
1993, Regulation A, Extensions of Credit by
Federal Reserve Banks, was amended to
implement Section 142 of the Federal
Deposit Insurance Corporation Improvement Act, which places certain limitations
on the availability of Federal Reserve credit
for institutions in weak financial condition.
These provisions became effective December 19, 1993. The discount function prepared for the completion of policy changes
in the payments system risk program and
implemented internal guidelines to better
control risks associated with weakened
depository financial institutions.
The discount rate remained
unchanged at 3.0 percent in 1993.

esearch. In 1993
the research department analyzed a broad
range of policy-related issues. Staff members’
efforts to bring research to bear directly on
policy-making included proposals, conferences, and assistance to nations developing
financial and monetary policy institutions.
One of the year’s studies made
strides in developing a dynamic model of
the relationships between monetary and fiscal policies. Related research sought to separate specific economic impacts of monetary
policy from other influences, an important
step for analyzing the consequences of monetary policy actions.
Further innovative work considered
potential monetary shocks to the economy. One

analysis treated credit arising h m payments
system settlement practices as money and
developed an innovative proposal for controlling payments system risk. A related study
proposed a new analytic approach to measuring systemic payments system risk, and another traced the role of liquidity shocks in banking
panics during the national bankmg era.
In the area of international economic policy issues, one study cast doubt on
the long-run efficacy of widely adopted
“incomplete”macroeconomic policy coordination agreements. An analysis that expanded
a popular model of sovereign debt negotiations underlined possible reasons for the
length and unpredictability of these talks.
Additional research found that investment
in education contributed significantly to
long-term economic growth.
St& economists conducted several
studies on interest rates and inflation. One
of these outlined the complexities of using
the Treasury yield curve as an indicator of
future inflation; another proposed a model
for estimating bounds on the real rate of
interest before actual inflation rates are
known. Further research on the yield curve
tested and generally rejected a recently
developed yield curve model.
The role of regulatory intervention
in troubled financial institutions was central to much of the staffs analysis. In a
series of studies, the staff helped develop a
model that yielded an optimal intervention
strategy for troubled banks in which ownership and management are separately motivated, proposed an intervention strategy
under the provisions of the Federal Deposit
Insurance Corporation Improvement Act,
and analyzed determinants of savings and
loan failure during the early 1980s. In addition, one study pointed out the flaws in a
short-cut method of measuring interest rate
risk and proposed a convenient, more effective alternative while another analyzed the




influence of fixed costs in banks’ economies
of scale. More general financial research
explored the information content of asset
prices and the process through which expectations are formed.
Bringing together academic
experts and policymakers t o discuss the
policy relevance of recent research, the
department organized conferences on
macroeconomics, financial derivatives, and,
with the public affairs department, southeastern state fiscal issues. In addition, staff
economists served as advisors on financial
and monetary institutions in nations in
Eastern Europe and the Far East.
Public Affairs. As the economy
decelerated in early 1993, Congress scrutinized the Federal Reserve System’s
approach to monetary policy more closely.
All twelve Reserve Bank Presidents gave
testimony before the Senate Committee on
Banking, Housing, and Urban Affairs early
in the year, discussing economic conditions
in their districts and commenting on the
direction of monetary policy.
In addition to being involved in
preparing for this testimony, public affairs
staff continued their efforts to help the public,
the media, and educators better understand
the Fed’s role in the economy. Specifically,the
department held a teacher workshop called
“The Fed More than Just the Basics”for high
school teachers in Georgia and Alabama.

Efforts focused on international
issues included publicizing the Bank president’s views on the North American Free
Trade Agreement. In addition, the department, working with the National Association
of Business Economists, organized a conference in Miami on innovations in financing
trade and investment in the burgeoning

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market economies of Central and South
America. The department also arranged
meetings throughout the Bank for more than
thirty international delegations representing
mainly central banks and commercial banks
in such countries as Japan and Russia.
To aid in the current debate about
the benefits and risks of new financial
instruments and whether there is a need to
regulate them, the public affairs department, together with the research department, produced a book of readings on
financial derivatives. ”his reader brings
together the numerous articles written in
recent years by Atlanta Fed research economists about these complex and increasingly
popular financial instruments.
As part of the Bank’s ongoing efforts
to disseminate information and research that
can help strengthen the regional economy,
the public affairs department organized a
conference on the topic of “Financing Government in the Southeastern States.”Cosponsored by the research and public &airs
departments and Georgia State University’s
Policy Research Center, this fiscal capacity
conference gained the attention of state lawmakers and citizen gmups--a relatively new
audience for the Atlanta Fed. The department also built an extensive data base of
individuals involved in various ways with
economic development throughout the region
in order to develop a f i t f u l interchange of
information and services.
Statistical Reports. The statistical reports department produced and distributed a videotape providing answers to
the questions most frequently asked by
respondents filing Home Mortgage Disclosure Act reports. The staff also conducted
training sessions in Atlanta and Birmingham on procedures for filing the “Report of
Transaction Accounts, Other Deposits,
and Vault Cash,” presented a seminar in
Atlanta on reports prepared by agencies of

foreign banks, and initiated a series of
monthly staff training workshops on the
uses of statistical reports data.
Department staff headed a System
project to study the implications of interstate banking for data collection and analysis. Staff members were also involved in
organizing and conducting the System’s
training programs keyed to various reports
filed by depository institutions and in laying the groundwork for a revised version of
standard processing software.
Reporting began on a new series
collecting data on the condition of offshore
branches managed by U.S.-based offices of
foreign banks.

utomation Initiatives. In 1993

the District’s
automation
resources were focused on the transfer of
IBM mainframe computer processing from
Atlanta to three Federal Reserve consolidated processing sites. Funds transfer and
bookentry securities pldcessing were successfully moved to Richmond in April, and
remaining IBM mainframe applications processing was moved there in December. Also,
nationwide processing of daylight overdraft
reporting and pricing was centralized at the
East Rutherford, New Jersey, site in May.
With h l l y redundant backup processing
capabilities available at the Dallas consolidated site, the District’s electronic payment
services will now be even more reliable.
As part of a multiyear national
project, the Sixth District completed initial planning and site preparations for
the installation of a high-speed, highreliability communications network called
Fednet to support automation consolidation and to allow for future growth in electronic payment services.

1

The Cryptographic Development
and Support Project, under Sixth District
leadership, assisted the Federal Reserve’s
Automation Consolidation Project by developing security procedures and automated
processes for the transition of encryption
support to the System’s consolidation sites.
A system was installed at the East Rutherford consolidation center that will enhance
the management of encryption keys between consolidation sites and depository
institution terminal devices.
Software Development Projects. Programming staff in Atlanta completed development of new software for the
Federal Reserve’s expense accounting system, known as PACS (Planning and Control
System). The new PACS system is the Federal Reserve’s first major dienuserver
application to operate on multiple platforms
(PC and mainframe). It will be implemented at one of the System’s new consolidated
data-processing sites and eventually will be
used by most Federal Reserve Banks.
The Atlanta Fed also completed
development of the new centralized billing
(accounts receivable) system. The application
wl be implemented at one of the System’s
il
consolidated sites and will process work for all
twelve Reserve Banks beghungin early 1994.
Atlanta has continued the development, maintenance, and support of the PCbased Fedline customer interface product,
which provides financial institutions access
to Federal Reserve electronic payment and
information services. The District has also
been instrumental in defining the next generation of Fedline, which will offer support
of advanced operating platforms, new services, and enhanced operational features.
Programming staff in Atlanta continued to develop and support a system that
provides full automation to the District’s six
cash services departments. Offices in the
Philadelphia and San Francisco Districts




have also begun using this system. Atlanta
staff designed and developed a materialshandling interface to COM&a mechanical,
automated vault operation to the core cash
automation software.
Payments System Risk Initiatives. Software releases for accounting,

funds, securities, and Treasury Tax and
Loan items were implemented to support
revised procedures for measuring the
amount of overdrafts in reserve and
clearing accounts during the day. These
changes, which were approved by the
Board of Governors in September 1992
and became effective in October 1993, were
implemented to mitigate the risk daylight
overdrafts pose to the Federal Reserve and
the payments system. A new software system for monitoring and reporting daylight
overdraft activity was also tested and
installed. Reserve Bank staff conducted
seminars throughout the District to help
financial institutions understand the new
measurement procedures and to explain
the pricing of daylight overdrafts that will
take effect in April 1994.
F c l t e Management. The
aiiis
accounting, control, legal, public affairs, and
research departments, part of the systems
department, and the check adjustments unit

moved i t the 96,800square feet of space
no
leased in the Equitable Bddmg, freeing space
in the mainbdding to permit renovation of
its tightly constrained operations during 1994.
Human Resources. In October all
District offices implemented a new job evaluation program that revalued and assigned
new salary grades and ranges to all nonofficer jobs. The project, which involved more
than two years of staff work and was assisted
by an outside consultant, resulted in new job

5;:

w
Q

descriptions, an automated job evaluation
system, and a new salary structure based on
market pay practices. The new program
enables the Bank to better respond to
changing market factors and ensures that
Bank jobs are assigned appropriate value as
the business environment changes.
In January 1993, in an effort to
help contain increasing costs, the Bank implemented a new managed care medical benefit
to replace the traditional fee-for-service
indemnity plan. The Bank continued to sponsor seven HMOs throughout the District.
A District group reviewed the
Bank’s current leave policies and administrative procedures to ensure compliance
with the new Family and Medical Leave
Act of 1993 (FMLA), which took effect in
August. Information concerning the FMLA
was distributed to all staff members.
Employees in all District ofices
were counseled about revised policies
regarding sexual harassment and related
issues of employee relationships and
employee responsibilities. Employee relations counselors were established at each
office to supplement normal channels of
communication for problem resolution.
To support District employees
whose jobs were affected by automation
consolidation, human resources staff
offered programs including career assessment and transition planning.

he auditing
department used
one of the “big six”
accounting firms
to satisfy the “Audit Standards for Federal
Reserve Banks” requirement for periodic
1

iuditins




quality assurance reviews, marking the
first time an outside firm has reviewed
Sixth District auditing. The review evaluated compliance with the standards and
included several special-interest topics such
as cost effectiveness of internal audit
administration, management, and processes; audit coverage of the Bank’s automation
consolidation activities; and appropriateness of staff levels, qualifications, and
training. The outside firm’s report stated
that the department was in full compliance
with the standards and made several suggestions for consideration related to the
requested special interest topics.
Auditing was heavily involved in
the automation consolidation project, both
in assisting with the review of environmental software at the consolidated sites and in
monitoring and testing Atlanta systems
throughout the transition. Department staff
also monitored the controls on the production system in Atlanta prior to the move and
reviewed the management of the project.
Atlanta continued to serve as the
site for the System Center for Auditor Development (SCAD),
which aevelops Fed-specific
training programs for all auditors throughout the System. The department was in
charge of a Systemwide audit of check collection float activity. The General Auditor was
an active member of the System’s Conference of General Auditors and the Committee
on Audit Support Activities, and other District audit staff members served on several
System committees and subcommittees dealing with various audit functions.

number of prominent individuals
discussed important domestic
and international financial industry and
economic concerns as part of the Bank’s

1993 Distinguished Speakers Series.
Speakers included Federal Reserve Chairman Alan Greenspan; Federal Reserve Governors Edward Kelley, John LaWare, and
Wayne Angell; former White House Soviet
specialist Condoleezza Rice; Scott E. Pardee,
Chairman of Yamaichi International America, Inc.; A.W. Clausen, retired chairman,
BankAmerica Corporation; David D. Hale,
senior vice president and chief economist,
Kemper Financial Companies; and John G.
Medlin, Jr., chairman and chief executive
officer, Wachovia Corp.
German Ambassador Immo
Stabreit and Peter G. Rogge, Senior Vice
President and Head of Economics and Corporate Systems for Swiss Bank Corporation, spoke to audiences of Atlanta
business, academic, and community leaders. University of Florida president John
Lombardi spoke at a joint meeting of the
Sixth District's head office and branch
directors.
The Advisory Council on Small
Business, Agriculture, and Labor met twice
with President Forrestal and Atlanta Fed
staff to exchange views on business and
credit conditions in the region. President
Forrestal also met twice with the Financial




Institutions Advisory Committee, which
represents commercial banks, thrifts, and

secretary's OffSce
credit unions, to discuss issues of interest
to financial institutions.
In conjunction with his monetary
policy responsibilities, President Forrestal
also met periodically with leaders representing business, academic, financial, consumer,
labor, and other community interests
throughout the District to discuss current
economic and policy-related issues.
The Sixth District's Congressional
Liaison program was reactivated in 1993,
focusing on those who serve on the U.S.
Senate and House Banking Committees.
Participants included Georgia Representative John Linder, Alabama Representative
Spencer Bachus, and Florida Representatives Jim Bacchus and Bill McCollum.
Each toured the District branch nearest
his congressional district and met with
the branch's board of directors as well as
business, financial, and other community
leaders.

EDWIN HUSTON
A.
CHAIRMAN
Senior Executive Vice President-Finance
Ryder System, Inc.
Miami, Florida
LEO BENATAR
DEPUTY
CHAIRMAN
Chairman and President
Engraph, Inc.
Atlanta, Georgia
U

HUGH B R O W
M.
President and Chief Executive Officer
BAMSI, Inc.
Titusville, Florida

J. THOMAS
HOLTON
President
Sherman International Corp.
Birmingham, Alabama

VICTORIA JACKSON
B.
President and Chief Executive Officer
DSSProDiesel, Inc.
Nashville, Tennessee

Atlanta Directors, from left to right: (standing) Simpson Russell, W.H. Swain,
Edwin A. Huston (Chairman), J. Thomas Holton, James B. Williams; (seated) Victoria
B. Jackson, Andre M. Rubenstein. Not pictured: Leo Benatar (Deputy Chairman) and
Hugh M. Brown.




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

SIMPSON
RUSSELL
Chairman and President
The First National Bank of Florence
Florence, Alabama

W.H. SWAIN
Chairman
First National Bank
Oneida, Tennessee
JAMESWILLIAMS
B.
Chairman and Chief Executive Oficer
SunTrust Banks, Inc.
Atlanta, Georgia

FEDERAL
ADVISORY
COUNCIL
MEMBER

E.B. ROBINSON,
JR.
Chairman and Chief Executive Officer
Deposit Guaranty National Bank
Jackson, Mississippi

BIRMINGHAM
DONALD BOOMERSHINE
E.
CHAIRMAN
President
Better Business Bureau of
Central Alabama, Inc.
Birmingham, Alabama
S. EUGENE
ALLRED
Chairman, President, and
Chief Executive Officer
Frit Incorporated
Ozark, Alabama

JULIAN BANTON
w.

MARLIN MOORE,
D.
JR.
Chairman
Pritchett-Moore, Inc.
Tuscaloosa, Alabama

J. STEPHEN
NELSON
Chairman and Chief Executive Officer
First National Bank of Brewton
Brewton, Alabama

COLUMBUS
SANDERS
President
Consolidated Industries, Inc.
Huntsville, Alabama

Chairman, President and
Chief Executive Officer
SouthTrust Bank of Alabama, N.A.
Birmingham, Alabama

PATRICIA COMPTON
B.
President
Patco, Inc.
Georgiana, Alabama




#

Q
rl

Birmingham Directors, from left to right: (standing) S. Eugene Allred, Patncia B.
Compton, Marlin D. Moore, Jr., J. Stephen Nelson; (seated) Julian W. Banton,
Donald E. Boomershine (Chairman), Columbus Sanders.

1

I

RANCH DIRECTORS

(CONTINUED

JOAND. RUFFIER
CHAIRMAN

HUGH JONES, R .
H.
J
Chairman
Barnett Bank of Jacksonville, N.A.
Jacksonville, Florida

General Partner
Sunshine Cafes
Orlando, Florida

LANAJANELEWIS-BRENT
PERRY DAWSON
M.
President and Chief Executive Officer
Suncoast Schools Federal Credit Union
Tampa, Florida

SAMUEL VICKERS
H.
Chairman, President, and
Chief Executive Officer
Design Containers, Inc.
Jacksonville, Florida

MERLE GRASER
L.
Vice Chairman
SunBanWGulf Coast
Venice, Florida

ARNOLD HEGGESTAD
A.
William H. Dial Professor of
Banking and Finance
College of Business Administration
University of Florida
Gainesville, Florida

- IJacksonville Directors, from left to right (standing) Hugh H. Jones, Jr., Samuel
H. Vickers, Lana Jane Lewis-Brent, Merle L. Graser, Arnold A. Heggestad; (seated)
Perry M. Dawson, Joan D. Ruffier (Chairman).




President
Paul Brent Designer, Inc.
Panama City, Florida

2c

R. KIRK
LANDON
CHAIRMAN
Chairman and Chief Executive Of'ficer
American Bankers Insurance Group
Miami, Florida
ROBERTO BLANCO
G.
Vice Chairman and Chief Financial Officer
Republic National Bank of Miami
Miami, Florida

E. ANTHONY
NEWTON
President and Chief Executive Officer
Island National Bank and Trust Company
Palm Beach, Florida

L. TORNILLO, .
JR
Executive Vice President
United Teachers of Dade
Miami, Florida
PAT

DOROTHY WEAVER
C.
President
Intercap Investments, Inc.
Coral Gables, Florida
MICHAEL WILSON
T.
President
Vinegar Bend Farms, Inc.
Belle Glade, Florida

STEVEN SHIMP
C.
President
0-A-WFlorida, Inc.
Fort Myers, Florida

.

I

Miami Directors, from left to right: (standing) Michael T. Wilson, Dorothy C.
Weaver, Roberto G. Blanco, Steven C. Shimp; (seated) R. Kirk Landon (Chairman).
Not pictured: E. Anthony Newton and Pat L. Tornillo, Jr.




c

27

CH U I R

NUED,

JAMES
R. TUERFF
CHAIRMAN
President
American General Corporation
Nashville, Tennessee
E.
WILLIAMS W T , JR.
President and Chief Executive Officer
First National Bank of Knoxville
Knoxville, Tennessee

HAROLD BLACK
A.
James F. Smith, Jr., Professor
of Financial Institutions
College of Business Administration
University of Tennessee
Knoxville, Tennessee
D. HARRIS
President and Chief Executive Officer
Brentwood National Bank
Brentwood, Tennessee

JAMES

I

Nashville Directors, from left to right (standing) James D. Harris, William
Baxter Lee 111, Harold A. Black, Williams E. Arant, Jr.; (seated) Marguerite W
Sallee, James R. Tuerff(Chairman), Paula Lovell.




WILLIAM
BAXTER
LEE I11
Chairman and President
Southeast Services Corporation
Knoxville, Tennessee

PAULA
LOVELL
President
Lovell Communications, Inc.
Nashville, Tennessee
MARGUERITE SALLEE
W.
President and Chief Executive Officer
Corporate Child Care
Management Services
Nashville, Tennessee

NEW
ORLEANS
LUCIMARIAN ROBERTS
T.
CHAIRMAN
President
Mississippi Coast Coliseum Commission
Pass Christian, Mississippi

KAY L. NELSON
Managing Director
Nelson Capital Corporation
New Orleans, Louisiana
J O A SLAYDON
"

President
Louisiana AFL-CIO
Baton Rouge, Louisiana

President
Slaydon Consultants and
Insight Productions and Advertising
Baton Rouge, Louisiana

ANGUS COOPER
R.
I1
Chairman and Chief Executive Officer
Cooper/". Smith Corporation
Mobile, Alabama

THOMAS WALKER
E.
President and Chief Executive Officer
Bank of Forest
Forest, Mississippi

VICTOR
BUSSIE

HOWARD GAINES
C.
Chairman and Chief Executive Officer
First National Bank of Commerce
New Orleans. Louisiana




New Orleans Directors, from left to right: (standing) Kay L. Nelson, Victor Bussie,
Howard C. Gaines, J o Ann Slaydon; (seated) Thomas E. Walker, Lucimarian T.
Roberts (Chairman).Not pictured Angus R. Cooper 11.

I

I

1 1

,ORPORAIE

OFFICERS

ROBERT FORRESTAL
P.
President and Chief Executive Officer

W. RONNIE
CAL,DWELL*
Executive Vice President

JACK
GUY"*
First Vice President and
Chief Operating Officer

S E N I O R V I C E PRESIDENTS
RICHARD OLIVER*
R.
Senior Vice President

H. TERRY
SMITH*
Senior Vice President
SHEILA TSCHINKEL*
L.
Senior Vice President and
Director of Research

JOHN WALLACE**
M.
Senior Vice President and
General Auditor

EDMUND
WILLINGHAM
Senior Vice President and
General Counsel

* Management Committee
** Advisor to Management Committee

Management Committee Members, from left to right: (standing) Frederick R.
Herr, Jack Guynn, Robert P. Forrestal, W. Ronnie Caldwell, John M. Wallace; (seated) James D. Hawkins, H. Terry Smith, Sheila L. Tschinkel, Richard R. Oliver.




V I C E PRESIDENTS
LOISC. BERTHAUME
Vice President

JOHN KERR
R.
Vice President

CHRISTOPHER BROWN
G.
Vice President

B. FRANK
KING
Vice President and
Associate Director of Research

FRANCIS CRAVEN, JR.
J.
Vice President and
Director of Human Resources

BOBBIE MCCRACKIN
H.
Vice President and Public Affairs Officer

ANNE
M. DEBEER
Vice President

JAMES MCKEE
M.
Vice President

WILLIAM ESTESI11
B.
Vice President

JOHN PELICK
D.
Vice President

WILLIAM HUNTER
C.
Vice President

MARY ROSENBAUM
S.
Vice President

ZANE R. KELLEY
Vice President

RONALD ZIMMERMAN
N.
Vice President

ASSISTANT V I C E P R E S l D E N 7 S
JOHN ATKINSON
H.
Assistant Vice President

ALVIN PILKINTON,
L.
JR.
Assistant General Auditor

JOHN BRANSCOMB
R.
Assistant Vice President

TEDG. REDDY
I11
Assistant Vice President

DAVID CaRR
F.
Assistant Vice President

MARION RIVERS
P.
I11
Assistant Vice President

THOMAS CUNNINGHAM
J.
Research Officer

WILLIAM ROBERDS
T.
Research Officer

CHAPELLE DAVIS
D.
Assistant Vice President

RONALD ROBINSON
J.
Assistant Vice President

STEVEN FOLEY
J.
Assistant Vice President

MELINDA RUSHING
J.
Assistant Vice President

JAYNE
FOX-BRYAN
Assistant Vice President and
Corporate Secretary

LARRY SCHULZ
J.
Assistant Vice President

CYNTHIA GOODWIN
C.
Assistant Vice President
WILLIAM HERBERT
R.
Assistant Vice President

SUSAN
HOY
Assistant General Counsel

ROBERT SEXTON
T.
Assistant Vice President
LARRY WALL
D.
Research Officer
JESSIEWATSON
T.
Assistant Vice President

ADRIENNE WELLS
M.
ALBERT MARTIN
E.
I11
Assistant General Counsel

AMELIA MURPHY
A.
Assistant Vice President




Assistant Vice President
=AN
KIAN
WONG
Assistant Vice President

DONALD NELSON
E.

ROBERT LOVE
A.

Senior Vice President and
Branch Manager

Assistant Vice President

WILLIAM SMELT
H.
Assistant Vice President and
Assistant Branch Manager
Y




ROBERT MCKENZIE
I.
Assistant Vice President
WILLIAM POWELL
R.
Assistant Vice President

JAMES B O N
L. R W
Assistant Vice President

FREDERICK
R. HERR*
Senior Vice President and
Coordinating Branch Manager

ROBERT DOLE
G.

FREDERICFULLERTON
L.
Assistant Vice President

CHARLES PRIME
W.
Assistant Vice President

Assistant Vice President and
Assistant Branch Manager

ANDRE ANDERSON
T.
Assistant Vice President

JAMES HAWKINS*
D.
Senior Vice President and
Coordinating Branch Manager

ROBERT
J.

SLACK

Assistant Vice President and
Assistant Branch Manager

DANIEL MASLANEY
A.
Assistant Vice President

* Management Committee

JEFFREY WELTZIEN
L.
Assistant Vice President

KIMBERLY WINSTEL
K.
Assistant Vice President

JAMES CURRY
T.
Vice President and Branch Manager

JUAN

DEL BUSTO

FRED Cox
D.
Assistant Vice President

RAULDOMINGUEZ

Assistant Vice President and
Assistant Branch Manager

Assistant Vice President

VICKI ANDERSON
A.

Assistant Vice President

ROBERT
DE

ZAYAS

Assistant Vice President

SUZANNACOSTELLO
J.
Assistant Vice President

NASHVILLE
MELVYN PURCELL
K.
Vice President and Branch Manager

MARGARET THOMAS
A.
Assistant Vice President

LEEC. JONES
Assistant Vice President and
Assistant Branch Manager

JOEL WARREN
E.

WILLIAM DYKES
W.

Assistant Vice President

E. CHANNING WORKMAN, J R .
Assistant Vice President

Assistant Vice President

NEW
ORLEANS
ROBERT Musso
J.
Vice President and Branch Manager

EDWARD HUGHES
B.
Assistant Vice President
WILLIAM THOMPSON
E.
I11

AMY GOODMAN
S.
Assistant Vice President and
Assistant Branch Manager

Assistant Vice President

W. JEFFREY
DEVINE

Assistant Vice President

PATRICIA

Assistant Vice President




D . VAN

DE

GRAAF

L

TATkrrdEhCT O F CONDl77ON

DECEMBER 1 9 9 2
3 1,

ASSETS

Gold Certificate Account

$

Special Drawing Rights Certificate Account

503,000,000

DECEMBER 1 9 9 3
3 1,

$

509,000,000

318,000,000

318,000,000

38,246,964

55,405,739

10,228,575,482

13,696,686,093

1,304,767,107

775,094,869

57,015,133

61,112,427

Other Assets

2,296,550,712

2,500,066,076

Interdistrict Settlement Account

3,833,067,333

2,185,366,572

$18,579,222,731

$20,100,731,776

$13,231,945,372

$14,959,906,004

4,100,864,625

3,632,354,668

600,199,151

736,272,042

66,933,183

132,352,262

$17,999,942,331

$19,460,884,976

$

$

Coin
Loans and Securities
Items in Process of Collection
Bank Premises

Total Assets

Federal Reserve Notes
Deposits*
Deferred Credit Items
Other Liabilities

Total Liabilities

CAPITAL c c o u ~ r s
A
Capital Paid In
Surplus

289,640,200
289,640,200

Total Capital Accounts

$

Total Liabilities and Capital Accounts

$18,579,222,731

579,280,400

319,923,400
3 19,923,400

$

639,846,800

$20,100,731,776

* Includes depository

institution accounts, collected funds due to other Federal Reserve Banks, U.S. Treasurer-General
account, other and miscellaneous deposits




c

34
I

EARNINGS

AND

EXPENSES

Current Income
Current Expenses
Cost of Earnings Credits

Current Net Income
Net Additions (Deductions)*

DECEMBER 1 9 9 2
3 1,

3
DECEMBER1, 1 9 9 3

$ 873,609,356

$ 861,700,654

138,361,845

155,047,176

13,536,275

8,436,000

$ 721,711,236

$ 698,217,478

(94,804,216)

(18,793,851)

Assessment for Expenses of Board of Governors

11,888,400

13,209,600

Federal Reserve Currency Cost

15,152,205

16,958,398

3,010,027

3,084,435

$ 596,856,388

$646,171,194

$ 16,384,793

$ 18,375,321

533,630,395

597,512,673

46,841,200

30,283,200

$ 596,856,388

$ 646,171,194

Surplus January 1

$ 242,799,000

$ 289,640,200

Surplus December 31

$289,640,200

$ 319,923,400

Cost of Unreimbursed Treasury Services

Net Income before Payment to U.S. Treasury

DISTRIBUTION N m EARNINGS
OF
Dividends Paid
Payments to U.S. Treasury**
Transferred to Surplus

Total Income Distributed

SURPLUS
ACCOUNT

* Includes gaindosses on sales of U.S.
government securities and foreign exchange transactions
** Interest on Federal Reserve Notes




i

UMMARY O F oPERA77ONS
1993

1992

SERVICES
TO

PERCENT
CHANGE
FROM O N E

ITEMS

DEposrroRr N
IS

(THOUSANDS)
. ___ _
_
~

YEARAW

PERCENT
C A G
H N E

ITEMS

FROM O N E

(THOUSANDS)

Y A A O
E R G

Check Clearing
U.S. Government Checks Processed
Commercial Checks Processed

68,069
3,016,132*

-1.4
4.2

66,783
3,017,041

-1.9
0.03

Electronic Payments
ACH Commercial and Government
Payments Processed
Wire Transfers of Funds

307,455
9,949

17.5
4.5

357,467
10,185

16.3
2.4

98

0

50

4.2

98
51

0
2.8

1,187

-36.8

808

-31.9

56
460
64

-9.0
-26.8
-32.6

47
363
34

-16.8
-21.0
-47.4

5,875

-15.5

5,794

-1.4

Cash Services
Currency Orders Processed
Coin Orders Processed
Loans to Depository Institutions
Loans Processed**
Securities Services
On-Line Bookentry Transfers
Noncash Items Processed
Definitive Safekeeping Receipts
SERVICES TO

U.S.

TREASURY

U.S. Savings Bonds Issued
U.S. Savings Bonds Redeemed

79

- 68.5

59

-25.5

Other Treasury Issues
Issued
Redeemed

49
3

-27.9
0

38
3

-23.0
0

738

-1.2

815

10.4

695,200

-7.1

Deposits to Treasury Tax
and Loan Accounts
Food Coupons Destroyed

* Number differs from that previously reported.
** Numbers shown are actual, not thousands.




748,576

19.2




.04 Marietta Street, N.W
, "
.
.-.Ann.-.

, I ,

n
.

h

ncl
- ;hA
[ortk
iashville, Tennessee 37203-4407
,

New Orleans Branch
25 St. Charles Avem
Jew Orleans, Louisiana 1013C -3u

For additional c
D..L1:^

Am-:.."

l-

nta

I



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