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Federal Reserve Bank of New York S E V E N T Y -F IF T H A N N U A L R EPO R T For the Year Ended December 31,1989 Second Federal Reserve District FEDERAL RESERVE BANK OF NEW YORK March 7, 1990 To the Depository Institutions in the Second Federal Reserve District I am pleased to send you the Seventy-fifth Annual Report of the Federal Reserve Bank of New York. The report contains the Sixth Deshmukh Memorial Lecture, delivered in Bombay, India, on January 11, 1990. The lecture provides a retrospective look at developments in the 1980s with a view toward identifying important lessons from the experience of that decade. Against the background of reflections on the past, I offer some thoughts on economic priorities for the future. I hope you will find these reflections on the 1980s interesting. E. Gerald Corrigan President Contents: Page REFLECTIONS ON THE 1980s.................................. 5 Financial Statements................................................................................................................. 23 Changes in Directors and Senior O fficers.......................................................................... 26 List of Directors and O fficers................................................................................................ 29 Seventy-fifth Annual Report Federal Reserve Bank o f New York REFLECTIONS ON THE 1980s E. Gerald Corrigan President Mr. Governor, distinguished guests, and ladies and gentlemen: I am honored to appear before you today to deliver the Sixth Deshmukh Memorial Lecture. Governor Deshmukh’s long and distinguished career in public service—including his tenure as the first Governor of the Reserve Bank of India— still serves as a source of inspiration to all who know of the man and his commitment to sound policies. He fully grasped the need to shape policies with a view toward long-term results, with emphasis not only on their economic consequences but also an appreciation of their social and humane implications. The period of Governor Deshmukh’s association with the Reserve Bank of India— including his role as a delegate to the Bretton Woods Conference— was surely a difficult if not turbulent era, but were he still alive, I feel safe in suggesting that he would have regarded the decade of the 1980s as equally challenging in many respects, especially for central bankers. With that in mind, my purpose today is to share with you some of my own reflections on the 1980s, with a view toward seeking to identify what lessons we can learn from the experience of the past decade and how those lessons might help us in the nineties as we seek to secure sustained noninflationary growth in our national and international economic systems. Even the most cursory review of the broad sweep of economic and financial developments over the past ten years serves as a forceful reminder of just how much the world economy had to digest in a relatively short period of time. Even the most cursory review of the broad sweep of economic and financial developments over the past ten years serves as a forceful reminder of just how much the world economy had to digest in a relatively short period of time. The decade began with much of the world caught up in a virulent inflation the likes of which many countries had not experienced in a peacetime setting in decades. Not surprisingly, that burst of 5 inflation gave rise to major imbalances in economic performance, culminating in a deep recession that for a number of countries— my own included— was the most severe economic downturn since the 1930s. In that same period, the debt problems of many developing countries exploded onto the scene, bringing with them an enormously complex series of economic and social problems for the debtor countries but also placing truly dangerous strains on the international banking system. Even as the world economy began to recover from the recession of the early 1980s, it was quite clear that powerful forces— some technological, some political, and some competitive—were to radically transform the economic and financial setting in which governments, businesses, and households would have to manage their economic affairs. In few places were those changes more apparent than in financial markets, where the interrelated forces of technological change, innovation, and deregulation induced changes of several orders of magnitude in the manner in which national and global financial markets operated. Partly as a result of these forces, volatility— at times of extreme proportions—became the order of the day in financial markets. The stock market drop of October 1987 provided a vivid, indeed somewhat frightening, reminder of the risks to our collective economic well-being that can be associated with excessive churning and volatility in financial markets. Yet despite the LDC debt crisis, the stock market shock, and numerous other disruptions in banking and financial and commodity markets, overall economic per formance—especially in the industrialized world—panned out remarkably well over most of the decade. Indeed, in a number of countries—the United States included—the Yet despite the LDC debt crisis, the stock market shock, and numerous other disruptions in banking and financial and commodity markets, overall economic performance—especially in the industrialized world—panned out remarkably well over most of the decade. duration of the economic expansion has been of record proportions. More generally, the growth in world trade has continued to outpace the growth in overall output, and protectionist pressures have been reasonably well contained even in the face of truly massive imbalances in trade and current account positions. Outside of the major industrialized countries, developments in the 1980s were distinctly more mixed. To be sure, a number of newly industrialized countries— notably on the Pacific rim— showed powerful economic growth over the period and in the process chalked up very large trade and current account surpluses. Perhaps the most 6 C hart 1. R EAL G NP G R O W TH D e sp ite u n p re c e d e n te d s tru c tu ra l c h a n g e s in th e e c o n o m ic an d finan cial e n viro n m e n t, o ve ra ll e c o n o m ic p e rfo rm a n c e in th e in d u s tria lize d w o rld fa re d re m a rk a b ly w e ll, on a v e ra g e , o v e r th e 19 8 0 s , . . . w ith m o s t of th e c o u n trie s , in c lu d in g th e th re e la rg e s t e c o n o m ie s , e x p e rie n c in g c o n tin u e d e c o n o m ic e x p a n s io n a fte r th e 1982 tro u g h . Estimate t Sources: International Monetary Fund. World Econom ic Outlook: Organization for Econom ic Cooperation and Development, OECD Econom ic Outlook: U.S. Bureau of Econom ic Analysis. * Industrial countries include all OECD member countries except Turkey. t 1989 data for the United States are preliminary. 7 graphic example of this is to be found in the case of Taiwan, whose foreign exchange reserves are now significantly greater than those of Saudi Arabia at the peak of oil prices in the early 1980s. In a number of other important cases, major economic strides were made. In this regard, India certainly stands out as one of the countries that has made major gains, as illustrated by both the pronounced acceleration in the trend rate of Outside of the major industrialized countries, developments in the 1980s were distinctly more mixed___The events of the 1980s in much of the developing world must, on balance, be regarded as disappointing___ growth in GDP and the ongoing efforts to increase efficiency and competitiveness. But for many countries, especially in Africa and Latin America, the 1980s were indeed a dark decade. Sadly, in more than a few instances, living standards today remain below the levels that had been achieved at the end of the 1970s and in the early 1980s. Nevertheless, in a growing number of heavily indebted developing countries, important progress has been made, especially in the recent past. In short, the events of the 1980s in much of the developing world must, on balance, be regarded as disappointing. On the other hand, we can claim a measure of satisfaction with developments in the industrialized world. But that sense of satisfaction must be tempered. For example, it would be tempting to conclude that we have somehow come to master our economic fate such that things that at one time seemed to be a matter of great concern are no longer particularly important. For example, I am struck by the number of commentators in the United States who look back at the 1980s and conclude that concerns about the United States’ internal and external deficits were misplaced. After all, they would argue, these deficits did not stand in the way of the longest peacetime expansion in history, during which the underlying inflation rate remained essentially stable at 4 to 4.5 percent for several years running. It will, I am sure, come as no surprise to you when I say that I do not share that view. Not only do I continue to view the U.S. deficits as unsustainable over time, but I surely do not find an inflation rate of 4 to 4.5 percent in any way cause for celebration. Not only do I continue to view the U.S. deficits as unsustainable over time, but I surely do not find an inflation rate of 4 to 4.5 percent in any way cause for celebration. That, of C h a rt 2 . C O N S U M E R P R IC E IN F L A T IO N : C H A N G E S IN P E R S O N A L C O N S U M P T IO N D EFLA TO R S P ric e inflation fell s h a rp ly follow in g th e 1982 re ce s s io n and re m a in e d e x ce p tio n a lly s tab le in th e In d u stria l c o u n trie s a s a g r o u p , . . . Percentage change a h d infla tio n in th e th re e la rg e s t e c o n o m ie s s h o w e d o n ly v e r y s lig h t a c c e le ra tio n e v e n as th e e x p a n s io n c o m p le te d Its s e v e n th y e a r. 1979 1980 1982 1983 1984 1985 1987 1988 1989 Estimate j* Sources: International Monetary Fund, World Econom ic Outlook; Organization for Econom ic Cooperation and Develop ment, OECD Econom ic Outlook; U.S. Bureau of Econom ic Analysis. * industrial countries include all OECD member countries except Turkey. 1 1989 data for the United States are preliminary. 9 course, is simply another way of saying that the impressive performance of the U.S. economy and other industrialized countries’ economies over much of the 1980s cannot be allowed to lull us into a false sense of comfort and security about prospects for the 1990s. Our success in managing economic and financial affairs in the 1990s will, in no small way, depend on the extent to which we take advantage of the experience of the 1980s in framing approaches to economic policy. Looked at in that light, it seems to me that there are several very important lessons to be learned from what we experienced in the 1980s. They are: The first lesson of the 1980s could probably apply to almost any decade but may be especially relevant for the 1980s and that is the utmost need to be cautious about the extremes of economic doctrine and theory. Indeed, whether we are speaking of the Keynesian, the monetarist, the supply sider, the rational expectationalist, or any other school of thought, single-minded approaches to public policy can be very misleading, if not dangerous. Let me cite just two examples in support of this The first lesson of the 1980s could probably apply to almost any decade but may be especially relevant for the 1980s and that is the utmost need to be cautious about the extremes of economic doctrine and theory. Indeed, whether we are speaking of the Keynesian, the monetarist, the supply sider, the rational expectationalist, or any other school of thought, single-minded approaches to public policy can be very misleading, if not dangerous. view. First, there can be no doubt that cuts in tax rates in the United States that were conceived in the context of a supply side view of economics played a major role in the record expansion in the United States. However, it is also true that those same tax cuts contributed to the budget deficit problem, just as it can be said that the major gains in productivity and savings suggested by the supply side school simply did not materialize. Second, the enormous shifts in monetary velocity that we experienced at times during the 1980s make it quite clear that the pursuit of any strict monetarist approach to monetary policy would have been disastrous. That, of course, is not to say that the supply side or monetarist approaches are not helpful schools of economic thought, for clearly both have much to offer. But it is to say that economics and theology don’t mix. The second important lesson of the 1980s is the compelling evidence that 10 inflation is fundamentally in conflict with stable and growing economies. Whether we look at the industrial world, the developing world, the east, the west, the north, or the south, what we see is that reasonable performance on the inflation front is associated with higher levels of overall economic performance, while high and rising rates of inflation are universally associated with instability and subpar patterns of economic activity. Moreover, it is also true that the economic and social Inflation is fundamentally in conflict with stable and growing economies. Whether we look at the industrial world, the developing world, the east, the west, the north, or the south, what we see is that reasonable performance on the inflation front is associated with higher levels of overall economic performance, while high and rising rates of inflation are universally associated with instability and subpar patterns of economic activity. costs of correcting inflation, once it has taken hold, are very great indeed. Taking the United States as an example, there is no question in my mind that the depth of the 1981-82 recession was directly related to the severity of inflation that preceded it, just as I have no doubt that the extraordinary duration of the current expansion is importantly related to our relative success in keeping the inflation rate from accelerating in any significant way. As another example, I would also argue that many of the root causes of the debt problem which still plagues so many developing nations today can be traced back to the inflationary environment of the late 1970s and early 1980s. Similarly, I would argue that it is no coincidence that the individual debtor countries in the developing world that have had the greater measure of success in working their way out of the debt problem are the ones that, on balance, have had the best perform ance in coping with inflation. Against that background, one would think that broad-based public and political support for monetary policies designed to keep inflation rates in check would be a given. Unfortunately, I do not sense that is the case, especially when it comes to support for preemptive policies that work to head off rises in the inflation rate before they are actually reflected in statistics and in behavior and expectations. In other words, while the evidence is overwhelming that inflation should be viewed as the economic equivalent of public enemy number one, there is often little or no public support for policies aimed at restricting rises in the inflation rate before they become a reality. A little inflation or a little more inflation always seems so benign 11 C hart 3. W ORLD S T O C K M A R K E TS IN T H E 1980s In line w ith o v e ra ll e c o n o m ic p e rfo rm a n c e , s to c k m a rk e ts e x p e rie n c e d la rg e g a in s , on a v e ra g e , o v e r th e 1 9 8 0 s . . . . V O L A T IL IT Y O F W O R LD S T O C K M A R K E TS * B u t th e p o w e rfu l an d in te rre la te d fo rc e s of te c h n o lo g ic a l c h a n g e , in n o v a tio n , and d e re g u la tio n c o n trib u te d to s u b s ta n tia l v o la tility in fin a n cia l m a rk e ts . * Quarterly percentage deviation from twelve-month moving average of stock prices; end-of-quarter value used in calculation of dispersion. 12 as it occurs. But, as we all have learned the hard way, there is no such thing as a little more inflation because once the process takes hold, it cumulates. In my judgment, this is the first and foremost reason why central banks should While the evidence is overwhelming that inflation should be viewed as the economic equivalent of public enemy number one, there is often little or no public support for policies aimed at restricting rises in the inflation rate before they become a reality. have an appropriate degree of independence from short-term political pressures, even though I fully recognize that the degree and form of that independence will vary from country to country. In that connection, I draw some comfort from the fact that in a number of countries, ranging from Chile to New Zealand, to South Korea, and to Sweden, efforts are now underway or have been recently completed to enhance the degree of independence of their central banks. In this regard, let me also add that I find it more than a bit ironic that there are some in the United States who seem to want to go in just the opposite direction by reducing the independence of our central bank. A third important lesson to be learned from the 1980s is that international cooperation on economic and financial affairs is both necessary and can be made to work. For example, in the 1980s we witnessed several extraordinary examples of In the 1980s we witnessed several extraordinary examples of international cooperation at its best, including the initial efforts to contain and stabilize the problems growing out of the LDC debt crisis, the emergence of internationally accepted bank capital standards, the extraordinary speed and relative ease with which the European economic integration has proceeded, and the close collaboration among financial authorities in the time frame of the October 1987 stock market break. international cooperation at its best, including the initial efforts to contain and stabilize the problems growing out of the LDC debt crisis, the emergence of internationally accepted bank capital standards, the extraordinary speed and relative ease with which the European economic integration has proceeded, and the close collaboration among financial authorities in the time frame of the October 1987 stock market break. 13 More generally, I regard the post-Plaza Accord efforts of the Group of Five (G-5) and Group of Seven (G-7) aimed at improved coordination of macroeconomic policy as a distinct plus, even though I recognize that that process is not without its critics. To some extent, however, the critics of the process may have exaggerated expectations about what realistically can emerge from these efforts. At the extreme, there are those who would seem to regard any meeting of the G-7 that does not yield some dramatic policy initiative as a failure. I simply do not see it that way. To the contrary, from my experience, the simple fact of face-to-face discussion of issues of mutual concern on matters pertaining to economic policy produces the highly valuable result of making all the parties to the discussion more sensitive to the problems and perspectives of others. Accordingly, the measure of success for a meeting of the G-7, the Interim Committee, or the G-10 Central Bank Governors in Basle is not whether there is some major policy change in a communique or, for that matter, whether there even is a communique. Rather, the measure of success is the ability of the participants to grasp more fully all the dimensions of their own situation and the situation of others and their ability to frame their own policies in a manner in which the sensitivities to the problems and perspectives of others loom larger rather than smaller. Looked at in that light, I firmly believe that the broad process of collaboration and cooperation on economic and financial matters is necessary and desirable and that our success in such efforts during the 1980s was a significant net plus for the well-being of the world economy. I firmly believe that the broad process of collaboration and cooperation on economic and financial matters is necessary and desirable and that our success in such efforts during the 1980s was a significant net plus for the well-being of the world economy. Afourth important lesson of the 1980s is that the globalization, innovativeness, and deregulation of financial markets have proven to be very much a two-edged sword. On the one hand, there is little doubt that these developments have expanded the choices for savers and investors, reduced the cost of financial transactions, improved the allocation of saving and investment nationally and internationally, and increased the competitiveness and efficiency of financial institutions and financial markets. But, and this is a very large but, there is also no doubt— at least in my mind—that these same forces have also increased volatility in financial markets and introduced new and highly complex elements of risk— possibly even increasing systemic risk—while at the same time contributing to the 14 C hart 4. CUR R EN T A C C O U N T BALANCES T h e im p re s s iv e o v e ra ll e c o n o m ic p e rfo rm a n c e in th e in d u s tria l c o u n trie s h a s be e n a c c o m p a n ie d w ith m a s s iv e e x te rn a l a c c o u n t im b a la n c e s in th e th re e la rg e s t e c o n o m ie s ,. . . Billions of dollars 50 0 -50 -100 -150 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 Estimate * a n d , a s a g ro u p , in d u s tria l c o u n trie s h a v e s h o w n s ig n ific a n t e x te rn a l d e fic its th ro u g h m u c h of th e 19 8 0 s. B illions of dollars Industrial Countries f 0 -10 -20 -30 -40 -50 -60 -70 -80 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 Estimate Sources: International Monetary Fund, World Economic Outlook; Organization for Econom ic Cooperation and Develop ment, OECD Econom ic Outlook; U.S. Bureau of Econom ic Analysis. * 1989 data for the United States are preliminary. Industrial countries include all OECD member countries except Turkey. 15 apparent condition of overcrowding we are seeing in international and wholesale financial markets. Another very troubling phenomenon that seems to grow out of this process is the manner in which credit flows to individual borrowers— whether a company or a country—can suddenly stop. That is, up to a point, credit flows are almost automatic, even as the creditworthiness of the borrower may be deteriorat ing. But once the threshold of concern about creditworthiness is reached, the flow The globalization, innovativeness, and deregulation of financial markets have proven to be very much a two-edged sword. On the one hand, there is little doubt that these developments have expanded the choices for savers and investors, reduced the cost of financial transactions, [and] improved the allocation of saving and investment nationally and internationally.. . . But, and this is a very large but, there is also no doubt—at least in my mind—that these same forces have also increased volatility in financial markets and introduced new and highly complex elements of risk—possibly even increasing systemic risk__ of credit can come to a full and harsh halt. From one perspective, that may illustrate the marketplace working at its best, but from another, it may imply that we have a financial system that is more prone to rather abrupt and potentially destabilizing shocks. Leaving that particular issue aside, it seems to me that the characteristics of financial markets and institutions as they have evolved over the decade of the 1980s leave an enormous burden on those who manage and those who supervise such markets and institutions. This burden is all the more compelling when evident pressures on profit margins and spreads can give rise to overly aggressive, if not outright speculative, business strategies on the part of individuals or individual firms. In these circumstances, it seems to me important that central bankers and other supervisory authorities should not feel the slightest bit apologetic—even in this age of deregulation— about insisting that prudential standards in such areas as capital adequacy, liquidity, avoidance of concentrations, and the presence of strong risk management and controls systems are the first order of business for financial institutions. The final major lesson of the 1980s I want to touch on may be the most dramatic and that, of course, would be the sweeping trend toward more open, more competitive, and more market-oriented economic systems at the national level. Even before the recent stunning developments in Eastern Europe and the Soviet Union, the handwriting was on the wall as the gap in performance between more 16 open and more market-oriented economies relative to closed and governmentally controlled systems became more apparent, as illustrated by the comparative patterns of economic development in the Pacific Basin relative to Latin America. It seems to me important that central bankers and other supervisory authorities should not feel the slightest bit apologetic—even in this age of deregulation— about insisting that prudential standards in such areas as capital adequacy, liquidity, avoidance of concentrations, and the presence of strong risk management and controls systems are the first order of business for financial institutions. This is not to suggest that relative economic performance alone accounts for the recent astonishing turn of events in so many countries. On the other hand, and especially in this age of information technology, there can be little doubt that the relative shortcomings of tightly controlled economic systems are an important driving force in these developments. The great challenge, of course, is for the community of nations to do all that it can in support of this shift in direction— a responsibility which falls heavily on all of the major industrialized nations, with particular emphasis, in my judgment, on the United States. Against the backdrop of those reflections on the 1980s, allow me to close with a few comments about the key priorities as we enter the 1990s. Looking first to the major industrial countries as a group, it seems clear to me that the priorities are fourfold: first, Even before the recent stunning developments in Eastern Europe and the Soviet Union, the handwriting was on the wall as the gap in performance between more open and more market-oriented economies relative to closed and governmentally controlled systems became more apparent, as illustrated by the comparative patterns of economic development in the Pacific Basin relative to Latin America. to keep inflation in check, recognizing that many if not most such countries are already in the “yellow zone” with regard to the potential for some buildup in inflationary forces; second, to redouble efforts to reduce the massive trade and current account imbalances among these nations. This is important in its own right but it is especially important in view of the clear and pressing need to redirect international savings flows 17 C h a rt 5. E X TE R N A L D E B T O F D EVELO P IN G C O U N TR IE S O n b a la n c e , e c o n o m ic p e rfo rm a n c e in m u c h of th e d e v e lo p in g w o rld w a s d is a p p o in tin g d u rin g th e 19 8 0 s. E x te rn a l d e b t le v e ls d o u b le d o v e r th e d e c a d e . Billions of U.S. dollars 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 E X T E R N A L D E B T R A T IO S O F T H E B A K E R F IF T E E N C O U N T R I E S F o r m a n y c o u n trie s , d e b t s e rv ic e b u rd e n s re m a in e d v e r y h ig h , c o n trib u tin g to s u b s ta n tia l s tra in s on th e in te rn a tio n a l b a n k in g s y s te m a n d c a u s in g e c o n o m ic d ifficu ltie s in th e d e b to r c o u n trie s . Percent 30 25 20 15 10 1979 Source: 1980 1981 1982 1983 1984 1985 1986 International Monetary Fund, World Econom ic Outlook, October 1987-89. 18 1987 1988 1989 away from countries such as the United States and the United Kingdom and toward developing countries and the nations of Eastern Europe; third, to do all that can be done through financial support, technical assistance, and technological transfer to help narrow the gap in economic performance and living standards between the industrial countries and the other nations of the world; and finally, to resist protectionist pressures strongly and, more positively, to seek out opportunities to reduce and eliminate trade barriers even in such politically difficult areas as services— including financial serv ices— and agricultural products. As for the United States itself, there are several areas of particular emphasis. For our own sake and for the well-being of the world economy, we simply must do a much better job of coming to grips with the savings imbalance in the U.S. economy. To me that means eliminating the budget deficit, even though the private savings rate may be expected to rise somewhat simply on the basis of demographics. As a corollary to this, For our own sake and for the well-being of the world economy, we simply must do a much better job of coming to grips with the savings imbalance in the U.S. economy. To me that means eliminating the budget deficit, even though the private savings rate may be expected to rise somewhat simply on the basis of demographics. the U.S. economy also needs a large and sustained increase in net private investment, especially in manufacturing, in order to generate the supply of exports that is critical to the shrinkage of our trade deficit. Indeed, I can see no way in which there can be an orderly reduction in the U.S. trade deficit (and a corresponding cut in our claims on the world’s savings) unless a significant fraction of that adjustment takes the form of higher exports of manufactured goods—especially “high-tech” goods—to industrialized and newly industrialized nations. For developing nations it is very clear that the dictates of the 1990s will be impor tantly captured in two words: competitiveness and creditworthiness. Both of these words presuppose the pursuit of sound macroeconomic and structural policies on the part of individual countries. There is nothing new about that. What will be new, or at least different, will be the extent to which the marketplace will distinguish between strong performance and weak performance. Developing countries, by definition, need external capital flows to develop. In the 1990s, I suspect that competition for such capital flows will be especially keen in a context in which there will simply not be enough official money to go around. For that reason, the countries that stand the better 19 C h art 6. W ORLD TR A D E A N D O U T P U T E v e n w ith c o n tin u in g la rg e e x te rn a l im b a la n c e s fo r s o m e c o u n trie s a n d g ro u p s off c o u n trie s , o v e ra ll w o rld tra d e e x p a n d e d s u b s ta n tia lly o v e r th e 19 8 0 s a n d o u tp a c e d w o rld o u tp u t in th e s e c o n d half of th e d e c a d e . Index 1979 = 100 150 140 130 120 110 100 ____ I_____ I_____ I_____ I_____ I_____ I_____ I_____ I_____ I_____ I_____ 90 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 Estimate In th e 198 0s, w o rld o u tp u t g ro w th a v e ra g e d ju s t b e lo w 3 p e rc e n t, a ra te s ig n ific a n tly lo w e r th a n th a t of th e p re c e d in g d e c a d e . Percentage change 4 3 2 1 0 1979 Source: 1980 1981 1982 1983 1984 International Monetary Fund, World Econom ic O utlook. 20 1985 1986 1987 1988 1989 Estimate chances for success will be the countries that are able to attract private capital flows, whether in the form of capital reflows, direct investment, capital market funding, or conventional bank loans. This is precisely the reason why shortsighted efforts by some countries to finance themselves by accumulating interest arrearages or by ill-conceived programs of debt reduction can be so very dangerous to the countries’ own long-run interests. That is not to say— as we have seen—that it is impossible to assemble For developing nations it is very clear that the dictates of the 1990s will be importantly captured in two words: competitiveness and creditworthiness. Both of these words presuppose the pursuit of sound macroeconomic and structural policies on the part of individual countries__ The marketplace will distinguish between strong performance and weak performance___The countries that stand the better chances for success will be the countries that are able to attract private capital flows, whether in the form of capital reflows, direct investment, capital market funding, or conventional bank loans. constructive, innovative, and market-sensitive approaches to reducing debt service burdens. However, it is to say that where such approaches are necessary, they should be framed in a manner that is clearly sensitive to the ongoing need to preserve constructive relationships between the individual country and private sources of fresh credit and finance. It is also to say that countries that follow sound policies which permit them to satisfy their financial obligations in a manner that strengthens their credit standing will be the ones that are much closer to the front of the long line of those seeking external financing during the decade of the nineties. If those are a few thoughts on priorities for the industrial nations, developing nations, and the United States in particular, there is one final thought that applies to all nations. That is, as I look to the 1990s, the need for a still higher level of international cooperation is clear. Consistent with that, I believe the case for increased financial, political, and moral support for the key multinational official institutions is compelling. Here I have in mind not just the International Monetary Fund, the World Bank, and the Regional Development Banks but also and perhaps especially the General Agreement on Tariffs and Trade. Our successes or failures in the Uruguay round will go a long way— for better or worse— in setting the tone for the balance of the decade. In this regard, let me also say that I would hope and expect—for both substantive and symbolic reasons—that the United States Congress will act swiftly and harmoniously to pass the legislation that is needed to put in place the U.S. share of the contemplated IMF quota 21 increase, once the details on the quota increase are worked out. A failure to do so, even in the face of our obvious budgetary problems, would in my view send all of the wrong signals at just the point in time when the opportunities for progress on so many fronts are so great. As I look to the 1990s, the need for a still higher level of international cooperation is clear. Consistent with that, I believe the case for increased financial, political, and moral support for the key multinational official institutions is compelling. Here I have in mind not just the International Monetary Fund, the World Bank, and the Regional Development Banks but also and perhaps especially the General Agreement on Tariffs and Trade. In closing, ladies and gentlemen, I wish I could say to you that having navigated reasonably well the uncharted waters of the 1980s, we could safely look forward to clear sailing for the 1990s. But you know and I know, that is not in the charts. We also know, however, that it is within our capacity to forge policies and programs to materially enhance prospects for success and progress. We also know that if we opt for the expedient, if we concern ourselves only about today, or even worse, if we concern ourselves only about ourselves, we will fail. I, for one, see the 1990s as a time of enormous opportunity and look forward to it in that spirit. 22 Financial Statements STATEMENT OF EARNINGS AND EXPENSES FOR THE CALENDAR YEARS 1988 AND 1989 (In Dollars) Total current earnings ................................................... Net expenses .................................................................. Current net earnings Additions to current net earnings: Profit on sales of United States government securities and federal agency obligations (net) ....................... Profit on foreign exchange............................................ All other.......................................................................... Total additions ................................................................ Deductions from current net earnings: Loss on foreign exchange ............................................ All other.......................................................................... Total deductions............................................................. 1989 1988 7,493,515,660 204,827,641 6,380,785,220 166,458,976 7,288,688,019 6,214,326,244 4,735,164 341,988,861 25,922 7,264,559 — 990,764 346,749,947 8,255,323 6,163,601 134,871,105 6,058,959 6,163,601 140,930,064 Net additions (deductions) Assessment by the Board of Governors: Board expenditures ....................................................... Federal Reserve currency costs .................................... 340,586,346 (132,674,741) 24,011,500 59,997,193 22,217,800 53,879,756 Total assessments 84,008,693 76,097,556 Net earnings available for distribution 7,545,265,672 6,005,553,947 Distribution of net earnings: Dividends p a id ................................................................ Transferred to surplus ................................................... Payments to United States Treasury (interest on Federal Reserve notes) ......................... 34,813,338 41,891,000 33,109,144 24,741,350 7,468,561,334 5,947,703,453 Net earnings distributed 7,545,265,672 6,005,553,947 565,787,250 41,891,000 541,045,900 24,741,350 607,678,250 565,787,250 Surplus account Surplus— beginning of year ........................................ Transferred from net earnings...................................... Surplus— end of year 23 STATEMENT OF CONDITION (In Dollars) Assets Dec. 29, 1989 Dec. 30, 1988 Gold certificate account ............................................ Special drawing rights certificate account ............... C o in .............................................................................. 3,410,129,070 2,896,000,000 12,696,701 3,309,987,701 1,489,000,000 14,119,621 6,318,825,771 4,813,107,322 27,050,000 33,700,000 79,933,787,512 1,592,000,000 79,854,640,160 4.760.465.000 2,299,795,914 525,000,000 2,380,814,655 2.100.735.000 84,377,633,426 89,130,354,815 Other assets: Cash items in process of collection ......................... Bank prem ises............................................................. All othert .................................................................... 1,069,632,891 46,821,784 10,529,084,442 1,234,629,280 31,911,552 4,461,809,404 Total other assets Interdistrict settlement account.................................. 11,645,539,117 (928,160,980) 5,728,350,236 113,601,755 Total A dvances...................................................................... United States government securities: Bought outright*......................................................... Held under repurchase agreements........................... Federal agency obligations: Bought outright........................................................... Held under repurchase agreements........................... Total loans and securities Total assets 101,413,837,334 99,785,414,128 * Includes securities loaned— fully secured ............. 722,900,000 2,382,700,000 tIncludes assets denominated in foreign currencies revalued monthly at market rates. 24 STATEMENT OF CONDITION (In Dollars) Liabilities Dec. 29, 1989 Dec. 30, 1988 Federal Reserve notes (n e t)........................................ 81,921,144,179 78,077,575,955 Reserve and other deposits: Depository institutions ............................................... United States Treasury— general account ............... Foreign— official accounts ........................................ Other ............................................................................ 8,129,648,144 6,216,516,022 479,687,058 503,672,693 9,198,734,175 8,656,496,496 236,550,840 310,581,213 15,329,523,917 18,402,362,724 821,635,003 2,126,177,735 795,092,310 1,378,808,639 Total other liabilities 2,947,812,738 2,173,900,949 Total liabilities 100,198,480,834 98,653,839,628 Capital paid i n .............................................................. Surplus ........................................................................ 607.678.250 607.678.250 565.787.250 565.787.250 Total capital accounts 1,215,356,500 1,131,574,500 Total liabilities and capital accounts 101,413,837,334 99,785,414,128 Total deposits Other liabilities: Deferred availability cash items ................................ All other* .................................................................... Capital accounts * Includes outstanding foreign exchange commitments revalued at market rates. 25 Alfred Hayes, who was President of this Bankfrom 1956 to 1975, died on October 21,1989. He led the Bank with clear vision in an era marked by great challenges and rapid change. He is remembered as a champion of responsible fiscal and monetary policies and as a vigorous spokesman for broad-based economic cooperation among nations. We also remember him for his pride in the institution he served, his kind and gentle manner, and his absolutely uncompromis ing integrity. Changes in Directors and Senior Officers CHANGES IN DIRECTORS. In August 1989, the Board of Governors of the Federal Reserve System reappointed Cyrus R. Vance a Class C director for the three-year term beginning January 1,1990, and redesignated him Chairman of the board of directors and Federal Reserve Agent for the year 1990. Mr. Vance, presiding partner of the New York law firm of Simpson Thacher & Bartlett, has been serving as a Class C director and as Chairman and Federal Reserve Agent since January 1989. Also in August, the Board of Governors reappointed Ellen V. Futter Deputy Chair man for the year 1990. Ms. Futter, President of Barnard College, New York, N.Y., has been serving as a Class C director since January 1988 and as Deputy Chairman since September 1988. In December 1989, member banks in Group 2 elected Victor J. Riley, Jr., a Class A director and reelected John A. Georges a Class B director, both for three-year terms beginning January 1, 1990. Mr. Riley, Chairman and President of KeyCorp, Albany, N.Y., succeeded Alberto M. Paracchini, Chairman of Banco de Ponce, Ponce, Puerto Rico, who had served as a Class A director since January 1987. Mr. Georges, Chairman of International Paper, Purchase, N.Y., has been serving as a Class B director since February 1987. Buffalo Branch. In August 1989, the board of this Bank appointed Wilbur F. Beh a director of the Buffalo Branch for a three-year term beginning January 1,1990. Mr. Beh, Chief Executive Officer of First National Bank of Rochester, Rochester, N.Y., suc ceeded Harry J. Sullivan, President of Salamanca Trust Company, Salamanca, N.Y., who had served as a Branch director since January 1987. At the same time, the board of this Bank redesignated Mary Ann Lambertsen Chairman of the Branch board for the year 1990. Mrs. Lambertsen, Vice PresidentHuman Resources and Information Systems of Fisher-Price, Division of The Quaker 26 Oats Company, East Aurora, N. Y., has been a director of the Branch and Chairman of the Branch board since January 1986. Also in August, the Board of Governors of the Federal Reserve System reappointed Matthew Augustine a director of the Buffalo Branch for a three-year term beginning January 1, 1990. Mr. Augustine, President and Chief Executive Officer of Eltrex Industries, Inc., Rochester, N. Y., has been a director of the Branch since January 1986. CHANGES IN SENIOR OFFICERS. The following changes in the official staff at the level of vice president and above have occurred since the publication of the previous Annual Report: Stephen G. Thieke, Executive Vice President, Credit and Capital Markets Group, resigned from the Bank effective August 1, 1989, after completing more than twenty years of distinguished service. Mr. Thieke joined the Bank’s staff in 1969 and became an officer in 1974. Chester B. Feldberg, formerly Senior Vice President, was appointed Executive Vice President, effective June 9,1989, and assigned as the officer in charge of the Credit and Capital Markets Group. Charles M. Lucas, Senior Vice President, was assigned responsibility for the Dealer Surveillance Function, effective June 9, 1989, in addition to his responsibility for the International Capital Markets Staff. J. Andrew Spindler, formerly Vice President, was appointed Senior Vice President, effective June 16, 1989, and assigned to the Bank Supervision Group. Christopher J. McCurdy, formerly Assistant Vice President, was appointed Vice President, effective June 16, 1989, and assigned to the International Capital Markets Staff. Effective January 1, 1990: Israel Sendrovic, formerly Senior Vice President, was appointed Executive Vice President and assigned as the officer in charge of the Automation and Telecommunica tions Group. Cathy E. Minehan, Senior Vice President, was assigned additional responsibility as the officer in charge of the newly reorganized Funds, Securities and Accounts Group. Robert M. Abplanalp, Vice President responsible for senior oversight of the Cash Processing and Check Processing Functions, was also assigned special responsibility for Baiikwide coordination of transition planning for the Bank’s operations center to be constructed in East Rutherford, New Jersey. 27 James O. Aston, Vice President, formerly assigned as the officer in charge of the Personnel Function, was assigned to the Buffalo Branch in anticipation of the retire ment, effective April 1, 1990, of John T. Keane, Vice President and Branch Manager. Ralph A. Cann, III, Vice President, formerly assigned senior oversight of the Accounting Function and the Planning and Control Function, was assigned as the officer in charge of the Systems Development Function. James H. Gaver, formerly Assistant Vice President, was appointed Vice President and assigned to the Automation and Telecommunications Group. Patricia Y. Jung, formerly Assistant Vice President, was appointed Vice President and assigned to the Systems Development Function. David L. Roberts, formerly Assistant Vice President, was appointed Vice President and assigned to the Foreign Group. Carl W. Turnipseed, formerly Assistant Vice President, was appointed Vice Presi dent and assigned as the officer in charge of the Personnel Function. Donald T. Vangel, formerly Assistant Vice President, was appointed Vice President and assigned as the officer in charge of the newly established Corporate Planning Group. Betsy Buttrill White, Vice President, formerly assigned to the Banking Studies and Analysis Function, was assigned to the Open Market Function. 28 Directors of the Federal Reserve Bank of New York D IR E C T O R S Term expires Dec. 31 Class J. K irby F o w l e r ................................................................................................................................. President and Chief Executive Officer, The Flemington National Bank and Trust Company, Remington, N.J. 1990 A Jo hn F. M c G illic u d d y .................................................................................................................... Chairman of the Board, Manufacturers Hanover Trust Company, New York, N.Y. 1991 A V ictor J. R iley , J r ............................................................................................................................... Chairman of the Board and President, KeyCorp, Albany, N.Y. 1992 A John F. W e l c h , J r ................................................................................................................................ Chairman of the Board, GE, Fairfield, Conn. 1990 B R ic h a rd L. G elb ............................................................................................................................... Chairman of the Board, Bristol-Myers Squibb Company, New York, N.Y. 1991 B Joh n A. G eorges ............................................................................................................................... Chairman of the Board, International Paper, Purchase, N.Y. 1992 B E llen V. F u t t e r , Deputy Chairman ............................................................................................. President, Barnard College, New York, N.Y. 1990 C M aurice R. G r e e n b e r g .................................................................................................................... President and Chief Executive Officer, American International Group, Inc., New York, N.Y. 1991 C C yrus R. Va n c e , Chairman and Federal Reserve Agent ......................................................... Presiding Partner, Simpson Thacher & Bartlett, New York, N.Y. 1992 C DIRECTORS—BUFFALO BRANCH Paul E. M c S w eeney ........................................................................................................................ Executive Vice President, United Food and Commercial Workers District Union (Local 1), AFL-CIO, Amherst, N.Y. 1990 N o rm a n W. S i n c l a i r ........................................................................................................................ Chairman of the Board, Lockport Savings Bank, Lockport, N.Y. 1990 M ary A nn L a m b e r t sen , Chairman ............................................................................................. Vice President-Human Resources and Information Systems, Fisher-Price, Division of The Quaker Oats Company, East Aurora, N.Y. 1991 R ic h a rd H. P o p p ................................................................................................................................. Operating Partner, South view Farm, Castile, N.Y. 1991 R obert G. W i l m e r s ........................................................................................................................... Chairman of the Board, Manufacturers and Traders Trust Company, Buffalo, N.Y. 1991 M atthew A u g u s t i n e ........................................................................................................................ President and Chief Executive Officer, Eltrex Industries, Inc., Rochester, N.Y. 1992 W ilbur F. B e h ...................................................................................................................................... Chief Executive Officer, First National Bank of Rochester, Rochester, N.Y. 1992 29 Advisory Groups F E D E R A L A D V IS O R Y C O U N C IL S E C O N D D IS T R IC T M E M B E R A N D A L T E R N A T E M E M B E R W i l l a r d C . B u t c h e r , M em ber Chairman o f the Board, The Chase Manhattan Bank (National Association), New York, N.Y. T h o m a s G . L a b r e c q u e , Alternate M ember President, The Chase Manhattan Bank (National Association), New York, N.Y. A D V IS O R Y C O U N C IL O N S M A L L B U S IN E S S A N D A G R IC U L T U R E R o b e r t W . B i t z , Chairman President, Plainville Turkey Farm, Inc., Plainville, N.Y. G eorge E. A llen Manager and President, Allenwaite Farms, Inc., Schaghticoke, N.Y. I r v in g S . C a p l a n President, National Army Stores Corp., Malone, N.Y. H arry G . C h arlsto n President, Apollo Audio-Visual, Ronkonkoma, N.Y. Ju d y C o l u m b u s President, Judy Columbus, Inc., Realtors, Rochester, N.Y. Pa t r ic ia A . D u n c a n s o n President, Duncanson Electric C o., Inc., Long Island City, N.Y. Je r r i S h e r m a n H e s s o l President, Jerri Sherman Ltd., New York, N.Y. C h a r l e s L . L a in President, Pine Island Turf Nursery, Inc., Sussex, N.J. Ja m e s R . S h a w President, Shaw Aero D evices, Inc., Wainscott, N.Y. T H R IF T IN S T IT U T IO N S A D V IS O R Y P A N E L D a v id E . A . C a r s o n President, People’s Bank, Bridgeport, Conn. H e r b e r t G . C h o r b a j ia n President and Chief Operating Officer, Albany Savings Bank, Albany, N.Y. S pencer S . C row Chairman and President, Maple City Savings and Loan Association, Hom ell, N.Y. B e a t r ic e R . D ’A g o s t in o President and Chief Executive Officer, New Jersey Savings Bank. Somerville, N.J. H e n r y D r e w it z Chairman and President, Astoria Federal Savings and Loan Association, Jackson Heights, N.Y. Jo h n T. M o r g a n Former Chairman, American Savings Bank, FSB, White Plains, N.Y. G e r a l d T. M u r p h y President, Garden State Corporate Central Credit Union, Hightstown, N.J. R o b e r t B . O ’B r i e n , J r . Chairman and President, Carteret Savings Bank, FA, Morristown, N.J. W il l ia m F. O l s o n Chairman and President, Peoples Westchester Savings Bank, Hawthorne, N.Y. 30 Officers of the Federal Reserve Bank of New York E . G e r a l d C o r r i g a n , President Ja m e s H . O l t m a n , F irst Vice President S a m Y. C r o s s , Executive Vice President Foreign F r e d e r ic k C . S c h a d r a c k , Executive Vice President Bank Supervision S u z a n n e C u t l e r , Executive Vice President Operations I s r a e l S e n d r o v i c , Executive Vice President Automation and Telecommunications C h e s t e r B . F e l d b e r g , Executive Vice President Credit and Capital Markets P e t e r D . S t e r n l ig h t , Executive Vice President Open Market E r n e s t T. Pa t r i k i s , Executive Vice President and G eneral Counsel Legal AUDIT Jo h n E . F l a n a g a n , G eneral Auditor R o b e r t J. A m b r o s e , Assistant G eneral Auditor L o r e t t a G . A n s b r o , Audit Officer E l iz a b e t h S . I r w i n -M c C a u g h e y , Manager, Auditing D epartm ent I r a L e v i n s o n , Manager, Audit Analysis D epartm ent AUTOMATION AND TELECOMMUNICATIONS GROUP ISRAEL S e n d r o v i c , Executive Vice President JAMES H. G a v e r , Vice President V ie r a A . C r o u t , Manager, A dvanced Technology Staff C h r is t o p h e r M . K e l l , Systems D evelopm ent Officer JOSEPH E . M c C o o l , Manager, Funds Transfer Systems D epartm ent M a r ie J. V e it , Manager, Funds Transfer Systems D epartm ent M ir ia m I. W ie b o l d t , Manager, Administrative and Office Support Systems D epartm ent BANK SUPERVISION GROUP F r e d e r ic k C . S c h a d r a c k , Executive Vice President J. A n d r e w S p i n d l e r , Senior Vice President BANK EXAMINATIONS DATA PROCESSING P e t e r J. F u l l e n , Vice President R o n a l d J. C l a r k , Assistant Vice President G e o r g e L u k o w i c z , Assistant Vice President P e t e r M . G o r d o n , Manager, O perations and Communications Support D epartm ent G e r a l d H a y d e n , Manager, G eneral Computer Operations D epartm ent Jo h n C . H e i d e l b e r g e r , M anager (Evening Officer) K e n n e t h C . M o n t g o m e r y , Manager, Contingency O perations and Q uality Assurance Departm ent L e n n o x A . M y r i e , M anager, Fedwire and Communications O perations D epartm ent SYSTEMS DEVELOPMENT R a l p h A . C a n n , III, Vice President O m P. B a g a r i a , Vice President Pa t r ic ia Y. J u n g , Vice President M o n i k a K . N o v i k , Assistant Vice President CLAUDIA H . C o u c h , Manager, Funds Transfer Systems D epartm ent R o b e r t A. O ’S u l l i v a n , Vice President K a t h l e e n A. O ’N e i l , Vice President and C h ief Financial Examiner W il l ia m L . R u t l e d g e , Vice President JAMES K . H o d g e t t s , C h ief Compliance Examiner L e o n K o r o b o w , A dviser M a r g a r e t E . B r u s h , Assistant C h ief Examiner, Compliance Examinations D epartm ent B a r b a r a A . K l e i n , Examining Officer, International Banking D epartm ent A . Jo h n M a h e r , Assistant C hief Examiner, S pecialized Examinations D epartm ent T h o m a s P. M c Q u e e n e y , Assistant C h ief Examiner, International Banking D epartm ent G e r a l d P M i n e h a n , Assistant C h ief Examiner, M ultinational Banking D epartm ent A l b e r t T o s s , Assistant C hief Examiner, D om estic Banking D epartm ent W a l t e r W . Z u n i c , Examining Officer, International Banking D epartm ent 31 Officers (Continued) BANKING APPLICATIONS PAYMENTS SYSTEM STUDIES W i l l i a m L . R u t l e d g e , Vice President Jo h n S . C a s s i d y , A ssistant Vice President Ja m e s P. B a r r y , Manager, Supervision Support D epartm ent R o b e r t a J. G r e e n , Senior Vice President G e o r g e R . Ju n c k e r , Vice President A n d r e w T. H o o k , Senior International Economist LAWRENCE M. S w e e t , Senior International Economist BANKING STUDIES AND ANALYSIS J. A n d r e w S p i n d l e r , Senior Vice President A r t u r o E s t r e l l a , A ssistant Vice President P e t e r S . H o l m e s , Banking Research Officer* M a r k E . L e v o n i a n , Manager, Banking Studies Departm ent D o n a l d E . S c h m i d , Manager, Bank A nalysis D epartm ent EQUAL e m p l o y m e n t o p p o r t u n it y P e t e r B a k s t a n s k y , Vice President D o n a l d R . M o o r e , Equal Employment O pportunity Officer C O R P O R A T E P L A N N IN G G R O U P D o n a l d T. V a n g e l , Vice President F O R E IG N G R O U P S a m Y. C r o s s , Executive Vice President PERSONNEL C a r l W . T u r n i p s e e d , Vice President M i c h e l e S . G o d f r e y , Assistant Vice President and Secretary R o b e r t C . S c r i v a n i , A ssistant Vice President E v e l y n E . K e n d e r , Manager, Personnel D epartm ent E l a i n e D . M a u r i e l l o , Manager, Personnel Departm ent PLANNING AND CONTROL NlRMAL V. MANERIKAR, Assistant Vice President NATHAN B e d n a r s h , Manager, M anagement Information D epartm ent SECRETARY’S OFFICE MlCHELE S . G o d f r e y , Assistant Vice President and Secretary W il l e n e A . Jo h n s o n , Assistant Vice President and Assistant Secretary T h e o d o r e N . O p p e n h e i m e r , Assistant Secretary FOREIGN EXCHANGE M a r g a r e t L . G r e e n e , Senior Vice President D a v id L . R o b e r t s , Vice President W il l e n e A. Jo h n s o n , Assistant Vice President and Assistant Secretary Pa u l D iL e o , Manager, Foreign Exchange D epartm ent MlCHAEL J. Pa u l u s , Foreign Exchange Trading Officer FOREIGN RELATIONS I r w in D . S a n d b e r g , Senior Vice President T e r r e n c e J. C h e c k i , Vice President D a v id L . R o b e r t s , Vice President G e o r g e W . R y a n , Vice President G e o r g e H . B o s s y , Manager, D eveloping Nations Staff HlLDON G . Ja m e s , Manager, Foreign Relations D epartm ent F r a n c i s J. R e i s c h a c h , Manager, Foreign Relations D epartment C R E D IT A N D C A P IT A L M A R K E T S G R O U P C h e s t e r B . F e l d b e r g , Executive Vice President F U N D S , S E C U R IT IE S A N D A C C O U N T S G R O U P C a t h y E. M i n e h a n , Senior Vice President DEALER SURVEILLANCE CHARLES M . L u c a s , Senior Vice President B a r b a r a L . W a l t e r , Vice President G a r y H a b e r m a n , Adviser E d w a r d J. O z o g , A ssistant Vice President ACCOUNTING R ic h a r d J. G e l s o n , Vice President L e o n R . H o l m e s , Assistant Vice President D o n a l d R . A n d e r s o n , Manager, Accounting D epartm ent Ja n e t K . R o g e r s , Manager, Accounting D epartm ent in t e r n a t io n a l c a p it a l m a r k e t s C h a r l e s M . L u c a s , Senior Vice President C h r is t o p h e r J. M c C u r d y , Vice President C h r i s t i n e M . C u m m i n g , A ssistant Vice President A n d r e w T. H o o k , Senior International Economist B o n n i e E . L o o p e s k o , Senior International Economist l o a n s a n d c r e d it s R o b e r t a J. G r e e n , Senior Vice President Jo h n W e n n i n g e r , A ssistant Vice President *On leave of absence. 32 ELECTRONIC PAYMENTS C a r o l W . B a r r e t t , Vice President D a n ie l C . B o l w e l l , Assistant Vice President H . Jo h n C o s t a l o s , A dviser H e n r y F. W i e n e r , Assistant Vice President A n d r e w H e i k a u s , Manager, Funds Transfer D epartm ent Pa t r ic ia H ilt -L u p a c k , Manager, Securities Transfer D epartm ent M i c h a e l W . M o w b r a y , Manager, Electronic O perations Support Departm ent Officers (Continued) ELECTRONIC SECURITY AND SECURITY CONTROL CASH PROCESSING H e r b e r t W . W h i t e m a n , J r ., Security A dviser R ic h a r d P. Pa s s a d i n , Security Officer R o b e r t M . A b p l a n a l p , Vice President M a r t in P. C u s i c k , Assistant Vice President E d w a r d J. C h u r n e y , Manager, Paying and Receiving D epartm ent LlLLIE S . W e b b , Manager, Currency Verification Departm ent M ic h a e l L . Z i m m e r m a n , Manager, O perations Support D epartment FISCAL SERVICES W h it n e y R . I r w i n , Vice President Pa u l i n e E . C h e n , Assistant Vice President CHRISTINA H . R y a n , Manager, Government Bond D epartm ent Jo h n J. S t r i c k , Manager, Savings Bond D epartm ent Jo A n n e M . V a l k o v i c , Manager, Safekeeping D epartm ent LEGAL E r n e s t T. P a t r ik is , Executive Vice President and General Counsel T h o m a s C . B a x t e r , J r ., A ssociate G eneral Counsel Jo y c e E . M o t y l e w s k i , A ssociate G eneral Counsel D o n N . R i n g s m u t h , A ssociate G eneral Counsel P e t e r R y e r s o n F i s h e r , Counsel* B r a d l e y K . S a b e l , Counsel R a l e i g h M . T o z e r , Counsel E r ic A . M a r t i n , A ssociate Counsel W e b s t e r B . W h i t e , A ssociate Counsel CHECK PROCESSING R o b e r t M . A b p l a n a l p , Vice President Jo h n F. S o b a l a , Vice President F r e d A . D e n e s e v i c h , Regional M anager (Cranford Office) S t e v e n J. G a r o f a l o , Assistant Vice President A n g u s J. K e n n e d y , Regional M anager (U tica Office) ANTHONY N. S a g l i a n o , Regional M anager (Jericho Office) K e n n e t h M . L e f f l e r , Check Processing Officer M a t t h e w J. P u g l i s i , Manager, Check Services Departm ent SERVICE Jq h n M . E ig h m y , Vice President R o b e r t V. M u r r a y , Vice President W il l ia m J. K e l l y , Manager, Protection Departm ent J e r o m e P. P e r l o n g o , M anager (Night Officer) JOSEPH R . P r a n c l , J r ., Manager, Food and Office Services D epartm ent OPEN MARKET GROUP P e t e r D . S t e r n l ig h t , Executive Vice President Jo a n E . L o v e t t , Vice President B e t s y B u t t r il l W h i t e , Vice President ROBERT W . D a b b s , Assistant Vice President K e n n e t h J. G u e n t n e r , Assistant Vice President S a n d r a C . K r i e g e r , Manager, Open M arket D epartm ent A n n -M a r ie MEULENDYKE, Manager, Open M arket Departm ent TECHNICAL DEVELOPMENT Jo s e p h P. B o t t a , Vice President T h o m a s J. L a w l e r , M anager PUBLIC INFORMATION P e t e r B a k s t a n s k y , Vice President OPERATIONS GROUP S u z a n n e C u t l e r , Executive Vice President BANK SERVICES H o w a r d F. C r u m b , Senior Bank Services Officer B r u c e A . C a s s e l l a , Bank Services Officer BUILDING SERVICES Jo h n M . E i g h m y , Vice President Ja s o n M . S t e r n , A ssistant Vice President Pa u l L . M c E v il y , Assistant Vice President Jo s e p h D . J. D e M a r t i n i , Manager, Administrative Support Services D epartm ent JOSEPH C. M e e h a n , Manager, Building Services D epartm ent RESEARCH AND STATISTICS GROUP RICHARD G. D a v i s , Senior Vice President and D irector of Research RESEARCH M . A k b a r A k h t a r , Vice President and A ssistant D irector o f Research Pa u l B . B e n n e t t , Vice President and Economic A dviser E d w a r d J. F r y d l , Vice President and Assistant D irector o f Research *On leave of absence. 33 Officers (C ontinued) A . S t e v e n E n g l a n d e r , Senior Research Officer CHARLES A . P ig o t t , Senior Research Officer L a w r e n c e J. R a d e c k i , Senior Research Officer* K a u s a r H a m d a n i , Research Officer and Senior Economist S u s a n A . H i c k o k , Research Officer and Senior Economist R o b e r t N . M c C a u l e y , Research Officer and Senior Economist D o r o t h y M . S o b o l , Research Officer and Senior Economist CHARLES S t e i n d e l , Research Officer and Senior Economist STATISTICS S u s a n F. M o o r e , Vice President N a n c y B e r c o v ic i , Assistant Vice President Pa u l a B . S c h w a r t z b e r g , Manager, International Reports and Support D epartm ent Officers—Buffalo Branch Jo h n T. K e a n e , Vice President and Branch M anagerf Ja m e s O . A s t o n , Vice Presidentf AUTOMATED SYSTEMS; GENERAL DIRECTION OF OPERATIONS; MANAGEMENT INFORMATION BANK SERVICES AND PUBLIC INFORMATION; PERSONNEL; PROTECTION P e t e r D . L u c e , Assistant Vice President R o b e r t J. M c D o n n e l l , O perations Officer CASH; CENTRAL OPERATIONS; CREDIT, DISCOUNT, AND FISCAL AGENCY BUILDING OPERATING; CHECK; SERVICE D a v id P. S c h w a r z m u e l l e r , O perations Officer G a r y S . W e i n t r a u b , Cashier *On leave of absence. tO n April 1, 1990, Mr. Keane will retire and Mr. Aston will become Vice President and Branch Manager. 34 THE SECOND FEDERAL RESERVE DISTRICT CANADA PLATTSBURG OGDENSBURG WATERTOWN GLENS FALLS UTICA OSWEGO SYRACUSE ROCHESTER SCHENECTADY MASS NEW YORK ALBANY • BUFFALO BINGHAMTON JAMESTOWN • ELMIRA POUGHKEEPSIE CONN. BRIDGEPORT • JERICHO HEAD OFFICE TERRITORY 1 BUFFALO BRANCH TERRITORY
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