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Federal Reserve Bank
o f New York

SEVENTY-EIGHTH
ANNUAL REPORT
For the Year
Ended
December 31, 1992

S e co n d F ederal R eserve D istric t




FEDERAL RESERVE BANK OF NEW YORK

March 10, 1993

To the Depository Institutions in the
Second Federal Reserve District
I am pleased to transmit the Seventy-eighth Annual Report of the Federal
Reserve Bank of New York. This year’s Annual Report contains the text of two
speeches that I have delivered in recent weeks.
The first one of these, which is entitled “ The Trilogy of Central Banking in a
Contemporary Setting,” was delivered to the Mid-Winter Meeting of the New York
State Bankers Association on January 27, 1993. Among other things, that address
points to the very considerable progress that has been made over recent years in
winding down inflation and rebuilding the underlying strength of banking and
financial institutions and the banking and financial system as a whole. It further
suggests that while those efforts still have a way to go, a continuation and
sustainment of these trends could bode very well indeed for the intermediate to
longer term performance of the U.S. economy.
The second address, which is entitled “ Reflections on the Reform Process,”
was delivered before the Economic Club of New York on February 9, 1993. This
address contains my personal reflections on progress, problems, and prospects for
the wholly unprecedented economic and political reform process that is under way in
Russia and the other newly independent republics of the former Soviet Union.
While these two addresses cover very different subject matters, both should
be of vital importance to us all. I hope you will find them of interest.




E. Gerald Corrigan
President

Contents:

Page

THE TRILOGY OF CENTRAL BANKING IN A
CONTEMPORARY SETTING .....................................................................

5

REFLECTIONS ON THE REFORM PROCESS
IN RUSSIA ................................................................................................................

14

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

23

Changes in Directors and Senior Officers.....................................................................

26

List of Directors and Officers.........................................................................................

29




Seventy-eighth Annual Report
Federal Reserve Bank o f New York

THE TRILOGY OF CENTRAL BANKING IN A
CONTEMPORARY SETTING
E. Gerald Corrigan
President
I am delighted to be with you today to deliver my ninth and last address as President of
the Federal Reserve Bank of New York to the Mid-Winter Meeting of the New York
State Bankers Association. While I can fully understand the reasons why your meeting
is being held here in Washington, I must say that it feels a bit strange to be here for this
purpose. Indeed, as I am something of a traditionalist, it strikes me as akin to holding
the New York City Marathon in Washington. Of course it could be done, but it simply
would not be the same.
Having said that, I fully recognize that the decision to hold your meeting here in
Washington is based in part on a desire to drive home the point that the regulatory
burden now facing banking institutions is a matter of such overriding concern that this
departure from tradition is both appropriate and necessary. Since I share many of those
concerns, I will turn to that subject later in my remarks.

I have viewed the essence of central banking in terms of what I call the trilogy of
central banking activities and responsibilities. That trilogy, of course, refers to the
control of inflation through monetary policy; ensuring the safety and stability of
the banking and financial system through supervisory and prudential policies and
programs; and ensuring the efficiency, integrity, and safety of the payments
system through a combination of sound operating practices and policies.
Before turning to that subject, however, I hope you will bear with me as I reflect on
the sweep of events over the past eight years or so, in part with a view toward placing
some of the challenges of today and tomorrow in a broader context.
As many of you know, I have viewed the essence of central banking in terms of what I
call the trilogy of central banking activities and responsibilities. That trilogy, of course,
refers to the control of inflation through monetary policy; ensuring the safety and
stability of the banking and financial system through supervisory and prudential
policies and programs; and ensuring the efficiency, integrity, and safety of the payments




5

system through a combination of sound operating practices and policies. Within the
framework of the trilogy— and drawing on the use of the word trilogy in a literary
context— I have always maintained that the essence of the trilogy can never be grasped
by looking at any one of its parts. Rather, it is a package deal in that its true significance
can only be found in the manner in which each of the elements of the trilogy interacts
with the others to form a common theme. And that common and unifying theme is
overall economic and financial stability.

When we succeed in getting all three of the elements of the trilogy working
together in the proper direction, the result in terms of overall economic
performance will be positive; but when any one of the elements of the trilogy is not
working in the right direction, economic performance and prospects will suffer
accordingly, and as failure in one area ultimately contaminates the others,
performance and prospects will worsen.

That is, when we succeed in getting all three of the elements of the trilogy working
together in the proper direction, the result in terms of overall economic performance
will be positive; but when any one of the elements of the trilogy is not working in the
right direction, economic performance and prospects will suffer accordingly, and as
failure in one area ultimately contaminates the others, performance and prospects will
worsen. Fortunately, I believe we can now say with some confidence— and after long
and painful experiences to the contrary— that we may be on the verge of getting it right
with regard to all three elements of the trilogy.
Most important, the evidence is now strong that the inflation genie is largely back in
the bottle, even if the cost of achieving that result has been very high and has been
incurred over a very long period of time. But the pain and suffering associated with that
long adjustment process should not, even in retrospect, have surprised us because
economic history tells us in wholly unmistakable terms that there is no painless way to
tame the inflationary process once it takes hold.
That is why, even today, with the outlook for inflation seeming to be so benign, we
must remain vigilant and we must staunchly resist those voices that would suggest that a
“ little more” inflation may not be all that bad, especially if it brings a lot more growth.
Above all, we must vigorously resist any suggestion that a “ little more” inflation is
something we can live with because we can fine-tune policy and somehow “ cap” the
inflation rate at some moderately higher, but stable, rate. I say to you in point blank
terms that such an approach will not work, and when it does not work, I can absolutely


6


guarantee that there will be no witch doctor nor any magic medicine that will be capable
of reversing that “ little more” inflation without incurring substantial costs in terms of
higher unemployment and lost output.
We as a nation are at a crossroad. We are within striking distance of patterns of
performance with regard to inflation that will place us in lockstep with, or perhaps even

We are within striking distance of patterns of performance with regard to
inflation that will place us in lockstep with, or perhaps even ahead of, the best
performing nations in the world with regard to preserving the purchasing power
of the dollar.. .. And we can achieve that goal even as economic activity improves.

ahead of, the best performing nations in the world with regard to preserving the
purchasing power of the dollar— a currency that, I might add, is still the currency of
choice for much of the world’s trade and finance. And we can achieve that goal even as
economic activity improves, as I expect it will. In those circumstances, our capacity to
deal effectively with many of the other economic problems that have plagued us over the
past decade or more— including our external competitiveness— will be enhanced
dramatically. On the other hand, if we slip, if we falter, if we succumb to the temptations
of expediency, we will pay the price, and in the highly competitive and highly integrated
world of the nineties and beyond, that price may be very high indeed.

The battle against inflation is never over and the very minute that a society
declares victory in that battle is likely to be the very minute that the seeds of the
next round of inflation are sown, with all of their painful and inevitable
consequences for the future.
This, of course, is simply another way of saying that the battle against inflation is
never over and the very minute that a society declares victory in that battle is likely to be
the very minute that the seeds of the next round of inflation are sown, with all of their
painful and inevitable consequences for the future.
If monetary policy and the effort to control and contain inflation rightly stand at the
center of the trilogy, the safety and stability of the banking and financial system surely
stand very close at hand. Here, too, I need not remind this audience that the last decade
or so has been extraordinarily difficult. Indeed, throughout the eighties and into the
early nineties we have seen more financial disturbances— some clearly involving




7

potential systemic consequences— than in any period of similar duration since the
depression-plagued era of the 1930s.
The laundry list of events and their consequences and potential consequences are
known to all, even if some of the diagnostics as to why these things occurred are not yet

Throughout the eighties and into the early nineties we have seen more financial
disturbances—some clearly involving potential systemic consequences—than in
any period of similar duration since the depression-plagued era of the 1930s.
fully understood. Putting those unanswered questions aside for now, I believe it can be
said that over this period we managed to dodge several bullets— high caliber bullets, I
might add. I believe it also can now be said that the banking and financial system is well
along in the process of rehabilitation and that signs of much needed rebuilding of muscle
tone in our banking and financial institutions are taking hold in a broad and convincing
manner.

I believe it also can now be said that the banking and financial system is well along
in the process of rehabilitation and that signs of much needed rebuilding of
muscle tone in our banking and financial institutions are taking hold in a broad
and convincing manner.
But here, too, we are at a crossroad. That is, will the period ahead— a period in which
private credit demands are likely to strengthen— be one in which the painful lessons of
the past are remembered or will better times see a gradual erosion and ultimate reversal
of the gains we have seen? One would hope— given all that has occurred— that the
answer to that question can only be that the lessons of the eighties were so harsh that
dictates of prudence, caution, and discipline are not likely to be forgotten or reversed for
many, many years to come. But experience also tells us that as economic activity
improves, those “ animal instincts” have a way of reasserting themselves.
That risk, however remote it may seem today, is the primary reason why I believe that
even as we seek to address the legitimate problem of regulatory overkill, we must not
relax the core elements of sound supervisory policy. Those core elements of sound
supervisory policy include comprehensive annual examinations, meaningful prudential
standards in such areas as capital adequacy, liquidity, risk management systems, credit
concentrations, and rigorous control of off-balance sheet activities, and above all,

8



insistence on rigorous management attention to credit generation and credit monitoring
systems. Indeed, in some of these areas, further strengthening of supervisory policies
may be needed even as we seek to reduce regulatory burdens in other areas. In saying
this, I am mindful that there are those who believe that the Basle capital standards
should be relaxed or significantly modified because, they argue, these standards
somehow or other caused the so-called credit crunch.

I believe that even as we seek to address the legitimate problem of regulatory
overkill, we must not relax the core elements of sound supervisory policy.
I simply do not accept that view, in part because I believe that the credit crunch was
fundamentally a demand-driven response to the debt and credit excesses of the 1980s.
That is not to say that supply side forces were wholly absent, but it is to say that such
supply side forces were not the primary cause of the credit slowdown. And more often
than not, where supply side forces were at work at individual institutions, they should
have been! Indeed, the only major shortcoming of the Basle capital standards that I can
readily think of is that they were not put in place soon enough. In these circumstances,
and given that all internationally active U.S. banking institutions exceed the Basle

Any retreat from these [Basle capital] standards on the part of the United States
would, in my view, be a colossal mistake, if not a national embarrassment.
capital minimums— and typically by large margins— any retreat from these standards
on the part of the United States would, in my view, be a colossal mistake, if not a
national embarrassment.
It is in our national interest for the U.S. banking and financial system to be seen as the
bedrock of the international banking and financial system. If we look down the road,
that goal may be within reach, but it will only be reached if the global marketplace sees
U.S. institutions as the unquestioned leaders in financial and managerial strength. To
come full circle in that regard will require progressive federal banking reform legisla­
tion— a subject I will return to shortly. But even the most progressive reform will never
be a substitute for underlying strength on the part of individual institutions. Nor will it
alter the need for that core of sound supervisory policies I spoke of earlier.
To put this in perspective, we have come a long way in rebuilding the second leg of
the trilogy. Our financial institutions are not yet all that they can be or all that they should




9

be, but they are surely moving in the right direction. As that process continues, the
foundation for greater economic strength and stability in our country will also grow.
The third leg of the trilogy— the plumbing of the financial system as I like to call it—
also is an area in which great progress has been made. Indeed, partly because events
conspired to force our attention on the importance of the payments system, the back
office has now become part of the front office in that top management in central banks,
commercial banks, and other financial institutions now focuses large amounts of time
and money on ensuring the reliability and integrity of payments, settlement, and
clearance systems for the full range of financial instruments, including derivatives. The
payments system is now even a subject of serious attention in the hallowed halls of
academia.
I regard all of this— starting importantly with our ability to guard against systemic
problems— as a very large plus for the future. I am also mindful that in this particular
area, some of the incentives to make needed improvements grew out of adversity. For
example, I can still vividly remember that Thursday and Friday in November 1985 when
a software problem caused a major computer outage at a large clearing bank. If ever
there was a silver lining behind a cloud, there was one in that case because it provided a
forceful reminder of the need to look at these operating systems in a very different light.
Given all of the events that were to follow— not the least of which was the continued
astronomical growth in the speed, volume, and complexity of transactions flows— I
believe that the lessons learned from that seemingly isolated computer outage have
served us very well indeed.
More recently, efforts to upgrade operating, risk management, and control systems
have taken on new elements of urgency as financial innovations continue to add new
elements of complexity and interconnection to payment, clearance, and settlement
systems on a national and global scale. Great progress has been made in this regard, but
it is an enormously complex task that is far from finished.

I believe it is now widely recognized and accepted that overall economic and
financial stability is inextricably related to the strength of this third leg of the
trilogy [payments systems].
The bottom line, however, is that I believe it is now widely recognized and accepted
that overall economic and financial stability is inextricably related to the strength of this
third leg of the trilogy. One does not have to be a rocket scientist to see that if that third
leg were to fracture, the other two legs would be in jeopardy. The irony may be that


10


while one need not be a rocket scientist to understand this, I sometimes wonder if the
rocket scientists of contemporary banking and finance may not be among the last to
grasp this point.
It is often said that where you stand depends on where you sit. There is some truth to
that, but regardless of where one sits or where one stands, it must be said that in the
areas I have mentioned— and in others I have not mentioned— a genuine measure of
progress has been made in rebuilding the economic and financial fundamentals that can
serve our nation and each of us very well in the years ahead. But we are by no means out
of the woods. To mention just a few areas of continuing concern:
• Questions remain about the sustainability of the improved pattern of eco­
nomic activity we have seen over the past two quarters in a setting in which
economic developments in much of the rest of the industrial world are not
encouraging.
• The intermediate- and long-term outlook for the budget deficit can only be
described as alarming in that it represents a major threat to our national well­
being and our economic standing in the world’s community of nations.
• There are new questions as to whether contemporary banking and financial
practices— including their transnational characteristics— may bring with
them the potential for periodic bouts of credit-induced economic and finan­
cial instability.
• Finally, and closer to home for this group, we have been singularly unsuc­
cessful in efforts to reform and modernize the basic legislative framework
within which our banking and financial system operates. I, for one, hope that
the new Administration and the new Congress will place this pressing need
high on the national agenda. Hoping not to sound immodest, I continue to
believe that the framework I introduced before this audience in January 1987
still represents a useful starting point for progressive and broad-based
reform.
While on the subject of banking reform, let me turn briefly to the subject of regulatory
burden. In this connection, I and several of my associates at the New York Fed had a
very useful “ shirt sleeve” discussion on this subject just last Friday with a cross-section
of banks of different sizes from the Second Federal Reserve District. While that
discussion produced a number of useful specific insights and suggestions, I want to
make several more general comments on this subject.
• First, while I agree fully that regulatory and supervisory policy has drifted into




the realm of “ micromanagement,” finding meaningful remedies in the very
short run will not be easy. I say that in part because the goals of banking
regulation and supervision have, overtime, become multifaceted. That is, while
the central objective of supervisory law and regulation remains the safety and
soundness of the banking system, a range of other socially and/or economically
desirable objectives have been introduced to the supervisory process over the
years. As long as we have a system with multiple objectives— a situation that is
not likely to change— sorting out and putting in place major reductions in the
regulatory burden will not be easy. This is particularly the case in a setting in

While I agree fully that regulatory and supervisory policy has drifted into the
realm of “micromanagement,” finding meaningful remedies in the very short run
will not be easy.. . . As long as we have a system with multiple objectives—a
situation that is not likely to change—sorting out and putting in place major
reductions in the regulatory burden will not be easy.

which many of the meaningful items that appear on many “ wish lists” for
reducing the regulatory burden are items that are a direct or indirect outgrowth
of the outdated legal structure of our banking and financial system.
• Second, whether one likes it or not, it must be recognized that current patterns
of what appear to be regulatory overkill— a phenomenon that is not unique to
the United States— reflect an important element of public and political backlash
to earlier events, especially the appearance of abuse. Perhaps that backlash is
misplaced, perhaps it is unfair, but it is there. The reason why it is important to
recognize that reality— however distasteful it may be— stems, of course, from
the obvious fact that the easiest way to ensure that the pendulum swings back is
for bankers and other practitioners to redouble their efforts to achieve the
highest standards of prudence, discipline, and ethics in the day-to-day conduct
of their business.
• Third, notwithstanding the above, and notwithstanding the fact that construc­
tive steps in the direction of regulatory relief can be taken within the context of
existing law, truly meaningful changes can only come through the legislative
process. And, at least as I see it, those changes can best be evaluated and
rationalized in a setting in which the basic reform of the banking system of
which I spoke earlier is on the table. That may be wishful thinking and, if so, so
be it. On the other hand, it may be the only way we have a realistic chance of


12


arriving at a broadly sensible and coherent solution to a series of closely
interrelated structural and regulatory problems. To put it more bluntly, since
piecemeal solutions have not worked in the past, would it be wise to assume that
they will produce the desired result this time around? While it will require extra
effort, the comprehensive approach may offer the only realistic chance of
getting it right.
That, it seems to me, is an appropriate note for me to close my remarks. Before I do
that, however, let me go back to the note on which I closed my first address to this group
almost eight years ago to the day. At that time, I said:
Let me now conclude with a few words about the Federal Reserve Bank of New
York. The bank is perhaps a bit mysterious and certainly is imposing even in its
physical characteristics. Yet there cannot be— either to us or to you— an imagi­
nary fence around that grand Florentine structure on Liberty Street. The ultimate
strength of the bank rests in its roots being planted firmly in the community. That
means that a free flow of dialogue on the pressing issues of the day must be high
on our agenda.
I then went on to say:
Dialogue does not guarantee consensus, but it does help to ensure that as we go
about discharging our public responsibilities with the sense of purpose and
integrity that should be expected of the central bank, we will have the most
informed judgments possible. We approach our tasks with an open door and an
open mind, and at the same time with a steady eye on the public interest, as we are
given the wisdom to see it.
Others will have to judge how well or how poorly we performed relative to that selfimposed mandate, but one thing I can say with confidence is that I and my associates
gave it our best shot.




13

REFLECTIONS ON THE REFORM PROCESS IN RUSSIA
E. Gerald Corrigan
President
I am honored to have this opportunity to join my good friend Bob Strauss in addressing
you on the vitally important subject of the economic and political reform process in the
Russian Federation * While it probably does not need to be said, the views I will outline
tonight are mine and mine alone. Also, while my remarks are largely confined to the
situation in Russia, they would generally apply to the other nations of the former Soviet
Union as well.
Seeking to condense into a brief address the complexities and dynamics of one of the
most historic events of the twentieth century is, of course, impossible. What I will do,
therefore, is share with you a number of rather broad-brushed insights and impressions
that I have accumulated in the twenty months since President Yeltsin first visited the
Federal Reserve Bank of New York in June 1991. I also will share with you some
thoughts as to what I believe must be done to solidify further the prospects for reform in
Russia over the period ahead.

My starting point is to stress, as forcefully as I can, how complex this situation
really is and how misleading it can be to judge it using conventional Western
standards. In the economic sphere, for example, there is virtually no room for the
transplanting to Russia of ideas, concepts, and experiences with economic reform
efforts in other countries except at the highest level of generality.
My starting point is to stress, as forcefully as I can, how complex this situation really
is and how misleading it can be to judge it using conventional Western standards. In the
economic sphere, for example, there is virtually no room for the transplanting to Russia
of ideas, concepts, and experiences with economic reform efforts in other countries
except at the highest level of generality. In human terms, we are all mindful of— if not
awed by— the legendary patience of the Russian people. But few of us can begin to
grasp the daily hardships that are faced, not by a small minority of the population, but by
a sizable fraction of the citizenry. We also tend to forget that the economic and political
doctrines and values that we hold so dear are doctrines and values that have been forged

^Remarks before the Economic Club of New York, New York Hilton, New York City, February 9, 1993.


14


over centuries. In contrast, our friends in Russia have embarked on a course of
immediate and simultaneous economic and political reform that, considering its start­
ing point, is unprecedented.
The obstacles to be overcome in Russia are almost incomprehensible. For one thing,

We also tend to forget that the economic and political doctrines and values that
we hold so dear are doctrines and values that have been forged over centuries. In
contrast, our friends in Russia have embarked on a course of immediate and
simultaneous economic and political reform that, considering its starting point,
is unprecedented.

there are no obvious points of national reference in either political or economic terms,
nor is there any institutional memory that can be brought to bear in charting the future.
There are complex economic and financial interdependencies within and among the
republics— interdependencies that in many ways are quite artificial and can be traced,
in part, to the demonic genius of Stalin’s efforts to achieve political control through
elements of forced economic interdependencies. There are vast monopolies, quasi­
monopolies, and bureaucracies— typically having no ideological content whatsoever—
but each with a large vested interest in the past. Finally, there are complex issues
growing out of the ethnic, religious, and cultural differences within a heterogeneous
population spread out over a truly massive land area. We tend to forget, for example,
that Russia spans eleven time zones.
Our ability to place the Russian situation in perspective also is hampered by a number
of popular myths about Russia and Russians. For one thing, it is sometimes suggested
that the Russians are not “ entrepreneurial.” That view is simply bunk. In many ways,
the Russians wrote the book and that is how they survived seventy-five years of tyranny
and repression. As another example, it is sometimes suggested that the Russian people
do not relate to the West or, even worse, do not trust the West, especially the United
States. Based on my experience, and for most Russians, that too is bunk. Indeed, from
what I have seen, the Russian people have an almost idealized admiration for the United
States which, I sense, grows in part out of their recognition that we— as a large
country— have managed to blend ethnic, cultural, and religious differences into a
source of national strength and pride.
With that perspective in mind, let me now turn to the economic reform process— a
process that began in earnest only a little more than a year ago. We know, and the




15

Russians know, that economic adjustment and reform must start with the standard
general menu of monetary and fiscal discipline, price liberalization, and liberalization
of trade and currency systems. We also know, and the Russians also know, that even the
best macroeconomic policies are necessary but not sufficient conditions for success.
That is, sufficiency comes only when macro policies are effectively blended with
appropriate micro or structural policies, particularly in certain strategic industries or
sectors of the economy.

Even the best macroeconomic policies are necessary but not sufficient conditions
for success. That is, sufficiency comes only when macro policies are effectively
blended with appropriate micro or structural policies, particularly in certain
strategic industries or sectors of the economy. In the Russian case, the gap
between necessity and sufficiency is very wide indeed.
In the Russian case, the gap between necessity and sufficiency is very wide indeed.
For example, the continued presence of monopolies and poor distribution systems
makes the supply side effects of price liberalization slow and uncertain, at best.
Similarly, the initial and inevitable instability associated with the reform process tends
to generate a flourishing underground economy— a phenomenon we have seen in many
countries. While the underground economy helps to provide more goods, more jobs,
and more competition, it also cuts significantly into tax collections, thereby aggravating
the budget deficit. It also produces, at least in the short term, visible and potentially
troublesome differences in relative incomes and standards of living.

While the dynamics of the inflation process in Russia are very complex, it is hard
to escape the fact that the severity of the current problem is not fundamentally
rooted in the monetary sphere. This is particularly the case since at least until
now, budgetary deficits have had to be financed by printing money.
Despite these and many other obstacles, I believe it is fair to say that the initial phase
of the economic reform process went better than many had expected. Unfortunately, it is
also fair to say that beginning in the late summer of 1992, conditions began to slip. More
recently, that slippage has taken on dangerous proportions as inflation has escalated
sharply, approaching or reaching the proportions of a classical and highly destructive
hyperinflation. The associated breakdown in financial discipline is being aggravated by


16


a renewed buildup in intra-enterprise and intra-republic debt and payment backlogs,
which are both a cause and an effect of the inflation problem. While the dynamics of the
inflation process in Russia are very complex, it is hard to escape the fact that the severity
of the current problem is not fundamentally rooted in the monetary sphere. This is
particularly the case since at least until now, budgetary deficits have had to be financed

While it would be wrong to understate the current problems in Russia, it would be
even more erroneous to conclude that the situation is void of continuing and
important signs of progress.
by printing money. It is also hard to escape the fact that checking and ultimately
reversing the current inflation problem will be very difficult in political terms, espe­
cially with the April referendum waiting in the wings.
While it would be wrong to understate the current problems in Russia, it would be
even more erroneous to conclude that the situation is void of continuing and important
signs of progress. Let me briefly cite a number of those distinctly more positive signs:
• First and foremost, there is an ample supply of progressive and energetic leaders
in the Russian government who are strongly committed to the reform process
and who have a clear sense of the programs and policies that are necessary for
success. Indeed, I would go one step further and say that there are also many,
many industrial leaders who may differ with the government on matters of
priority and timing but who are nevertheless committed to the goals of both
economic and political reform. I say this notwithstanding occasional press
reports in the West to the effect that these differences about tactics and timing
are deeply rooted in the ideology of the past.
• Second, at the microeconomic level, I strongly suspect that much more is
occurring in the Russian economy than is widely recognized and certainly much
more than is captured in the official statistics. For example, based on my visits
over time, I can not help but notice the number of relatively well-stocked new
shops and stores that have sprung up in Moscow and the generally increased
availability of goods of all kinds even if, unfortunately, the prices are very high
for the typical Russian citizen.
• Third, the Russian privatization program has had a greater measure of success in
a shorter period of time than I, frankly, would have thought possible.
• Fourth, important initial steps have been made in the codification of laws and




17

regulations in a wide range of commercial and financial endeavors.
• Fifth, slowly but surely, and with a measure of success, foreign investors are
establishing operations in Russia— often on a joint venture basis.
• Sixth, and perhaps of special importance, this winter— unlike last winter— will
pass without fear of food shortages with all of the human and political problems
associated with such fears, much less such a reality.
Looked at in this light, the obvious question before us is whether the evident

I believe the chances are good, very good, that the process of political and
economic reform has passed the point of no return. In saying that, I hasten to add
that the process will not be a straight line; mistakes and misjudgments will occur;
personalities will change.
problems can be contained and controlled as further progress is made in strengthening
and broadening the areas in which progress is being achieved. In seeking to shed some
light on that question, I begin with a central observation that may strike you as a clear
case of a fool rushing in where a brave man dares not go: namely, I believe the chances
are good, very good, that the process of political and economic reform has passed the
point of no return. In saying that, I hasten to add that the process will not be a straight
line; mistakes and misjudgments will occur; personalities will change. Let me also
forcefully stress that the risks of reversal— however great or small they may be— carry
with them such dire consequences for the world that we have no choice but to shape our
attitudes and our policies with a view toward suppressing those risks to the point where
they are negligible or nonexistent— a condition that certainly is not the case today.
There are many elements needed to ensure success. One that strikes me as particu­
larly important is the continued courage and leadership of President Yeltsin. Perhaps we
all have come to expect too much of political leaders. Perhaps the world has become so
complex that the lofty vision of the man for all seasons is now no more than a dream. But
if there is a man for all seasons in the contemporary Russian setting, that man is Boris
Yeltsin.
Looking to the future, it is clear that the period immediately ahead is of vital
importance. The Russians, for their part, must redouble their efforts in an extremely
difficult economic and political setting. Since I see nothing to be gained and much to be
lost in engaging in a lengthy public discourse about what I, as an outsider, think the
details of Russian policy should be, I have no intention of broaching the specifics of that

18




subject tonight. I will, however, make the general observation that quickly achieving a
measure of monetary and financial discipline strikes me as a must. I also will make the
general observation that aggressive efforts in key sectors such as banking, agriculture,
energy, and defense conversion must command high priority. Finally, the underpinnings

Since I see nothing to be gained and much to be lost in engaging in a lengthy
public discourse about what I, as an outsider, think the details of Russian policy
should be, I have no intention of broaching the specifics of that subject tonight. I
will, however, make the general observation that quickly achieving a measure of
monetary and financial discipline strikes me as a must.

of a healthy economy, including such items as the tax collection system, the collection
of relevant and reliable economic statistics, and the workings of the payments system,
must be made to work better as soon as possible.
Closer to home, attitudes and policies in the West and in the United States in
particular are also crucial. Before we turn briefly to those subjects, a more general
observation should be made. Namely, when Russian leaders, but especially when
Western leaders, stress the virtues of a market economy, and even the virtues of

When Russian leaders, but especially when Western leaders, stress the virtues of
a market economy, and even the virtues of democracy, many Russian citizens do
not have a clear vision of what those terms of art really mean. Absent that vision,
confidence about the future is, of course, elusive. For many Russian citizens,
grasping that vision of the future is understandably clouded by the fact that they
are worse off today than they were even a year or two ago.
democracy, many Russian citizens do not have a clear vision of what those terms of art
really mean. Absent that vision, confidence about the future is, of course, elusive. For
many Russian citizens, grasping that vision of the future is understandably clouded by
the fact that they are worse off today than they were even a year or two ago. Their vision
also is clouded by the very obvious disparities in the well-being of the relative few who
are doing very well and the many who are not. As an example, while I neither speak nor
understand Russian, I have the suspicion that the words “ merchant” and “ speculator”
are often used interchangeably and that the connotation of both is not particularly
becoming.




19

Against that background, I believe that there are several key points of reference that
should help guide Western attitudes and policy formulation toward Russia and the other
Republics of the Commonwealth of Independent States. Those points of reference
include the following:
• First, we should embrace the philosophy that we want to help them do what they
think is right for their country rather than force-feed detailed approaches and
techniques that may have been very successful here or in other settings, but
simply are not relevant to Russia.
• Second, while we admire the patience of the Russians, we too must be patient

First, we should embrace the philosophy that we want to help them [the Russians]
do what they think is right for their country rather than force-feed detailed
approaches and techniques that may have been very successful here or in other
settings, but simply are not relevant to Russia— Second, while we admire the
patience of the Russians, we too must be patient and recognize that they are
seeking to achieve in a very short time what it took us centuries to achieve. I also
might add that even after centuries, it is quite evident that we do not exactly have
it perfected— Third, we must not judge either failures or successes by Western
standards, or at least by Western standards alone— Fourth, we need to
recognize more fully that thinking small may be more relevant than thinking big.
To put it differently, unless there is true progress at the micro level of the economy,
even the most brilliantly conceived and executed macro policies will bear only
limited fruit. In this regard, the underpinnings of the economic and financial
system of which I spoke earlier—or the plumbing as I like to call it—warrant
special attention---- Fifth, while a vision of the future is needed, that vision will
come only slowly and it will come only if there are some quick and visible success
stories.
and recognize that they are seeking to achieve in a very short time what it took us
centuries to achieve. I also might add that even after centuries, it is quite evident
that we do not exactly have it perfected.
• Third, we must not judge either failures or successes by Western standards, or at
least by Western standards alone.
• Fourth, we need to recognize more fully that thinking small may be more
relevant than thinking big. To put it differently, unless there is true progress at

20




the micro level of the economy, even the most brilliantly conceived and
executed macro policies will bear only limited fruit. In this regard, the under­
pinnings of the economic and financial system of which I spoke earlier— or the
plumbing as I like to call it— warrant special attention.
• Fifth, while a vision of the future is needed, that vision will come only slowly
and it will come only if there are some quick and visible success stories.
This is neither the time nor the place to attempt to spell out in detail what these
principles might imply in terms of concrete policy initiatives. I will say, however, that it
is my fervent hope that the Clinton Administration— working with its partners in the
Group of Seven governments— will move swiftly and decisively to sharpen policies and
programs aimed at facilitating the economic and political reform process in Russia and
elsewhere in the Commonwealth of Independent States. In this connection, I believe a
great deal can be done, even with budget constraints and pressing agendas of domestic
needs. I will also say— in the category of quick victories— that it is in the interest of
both sides to complete a debt restructuring agreement quickly that explicitly recognizes
that multiyear debt service relief— but not debt forgiveness— is needed and is in the

It is my fervent hope that the Clinton Administration—working with its partners
in the Group of Seven governments—will move swiftly and decisively to sharpen
policies and programs aimed at facilitating the economic and political reform
process in Russia and elsewhere in the Commonwealth of Independent States.
interest of the debtor and the creditors alike.
Finally, based on my admittedly imperfect impressions, I believe that a great deal of
effort is needed on both sides to better shape and coordinate technical assistance
programs from the West. And based on my own experience with the work of the
Russian-American Bankers Forum, I believe such programs will have a greater poten­
tial for success to the extent that they enlist, on a large scale, volunteers from the private
sector who know how to get things done. It is one thing to write and talk about what
needs to be done but it is quite another to help get it done in the trenches. Therefore, it is

The Russian people do understand, embrace, and cherish a vision of freedom.
Every one of us has a very large stake in seeing to it that we do all we can to
ensure that this vision of freedom becomes a lasting reality, for ultimately their
freedom is our freedom.




21

my conviction that “ hands-on” private sector practitioners can play a vital and unique
role in assisting the process of economic reform in Russia, and I intend to continue to do
all I can to facilitate that effort.
In closing, ladies and gentlemen, let me offer one last thought. I said earlier that I
believe the chances for ultimate success in this venture for mankind are good, very
good. But to emphasize, they are far from certain. I also said that many Russians do not
clearly comprehend, or have a vision of, a market economy or democracy. But the
Russian people do understand, embrace, and cherish a vision of freedom. Every one of
us has a very large stake in seeing to it that we do all we can to ensure that this vision of
freedom becomes a lasting reality, for ultimately their freedom is our freedom.


22


Financial Statements
STATEMENT OF EARNINGS AND EXPENSES FOR
THE CALENDAR YEARS 1992 AND 1991
(In Dollars)

1992
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 ( n e t) .......................
Profit on foreign exchange............................................
All o th e r ..........................................................................
Total additions
Deductions from current net earnings:
Loss on foreign exchange ............................................
All o th e r ..........................................................................
Total deductions

Net additions (deductions)
Assessments by the Board of Governors:
Board expenditures .......................................................
Federal Reserve currency costs ....................................

Total assessments
Net earnings available for distribution

Distribution of net earnings:
Dividends p a i d ...............................................................
Transferred to surplus ...................................................
Payments to United States Treasury
(interest on Federal Reserve notes) .........................




Net earnings distributed

1991

7,554,618,896
182,100,578

8,321,208,854
214,693,548

7,372,518,318

8,106,515,306

47,361,641
—
39,331

49,980,606
97,121,050
37,427

47,400,972

147,139,083

313,796,613
3,251,312

—
14,052,900

317,047,925

14,052,900

(269,646,953)

133,086,183

37,396,200
101,456,057

31,222,600
100,248,786

138,852,257
6,964,019,108

131,471,386
8,108,130,103

49,868,773
113,600,200

43,267,767
104,367,350

6,800,550,135

7,960,494,986

6,964,019,108

8,108,130,103

23

STATEMENT OF CONDITION
(In Dollars)
Assets

Dec. 31, 1992

Dec. 31,1991

Gold certificate account ........................................
Special drawing rights certificate account .............

4,041,613,390
2,808,000,000
13,054,000

3,913,778,047
3,395,000,000
15,532,123

Total

6,862,667,390

7,324,310,170

0

7,000,000

114,768,971,286
7,463,000,000

105,022,220,206
15,345,150,000

2,105,691,764
631,000,000

2,382,137,667
552,850,000

Total loans and securities

124,968,663,050

123,309,357,873

Other assets:
Cash items in process of collection .......................
Bank premises.......................................................
All other$ ............................................................

1,352,273,818
137,086,999
9,679,651,553

968,700,956
127,101,346
10,525,101,074

Total other assets

11,169,012,370

11,620,903,376

Advances..............................................................
United States government securities:
Bought outrightt...................................................
Held under repurchase agreements........................
Federal agency obligations:
Bought outright.....................................................
Held under repurchase agreements........................

Interdistrict settlement account..............................
Total assets

(19,514,352,117)

(12,000,155,993)

123,485,990,693

130,254,415,426

tIncludes securities loaned — fully secured .......
371,100,000
676,950,000
t Includes assets denominated in foreign currencies revalued monthly at market rates.


24


STATEMENT OF CONDITION
(In Dollars)
Liabilities

Dec. 31, 1992

Dec. 31,1991

Federal Reserve notes (net)....................................

105,028,039,615

100,834,171,266

Reserve and other deposits:
Depository institutions .........................................
United States Treasury — general account...........
Foreign — official accounts ................................
Other ..................................................................

7,530,921,887
7,491,658,567
107,180,093
193,642,896

6,460,525,291
17,696,902,345
858,904,306
639,546,133

15,323,403,443

25,655,878,075

629,032,265
735,474,170

865,763,335
1,355,761,950

Total other liabilities
Total liabilities

1,364,506,435
121,715,949,493

2,221,525,285
128,711,574,626

Capital accounts:
Capital paid i n .......................................................
Surplus ................................................................

885.020.600
885.020.600

771.420.400
771.420.400

Total capital accounts

1,770,041,200

1,542,840,800

Total liabilities and capital accounts

123,485,990,693

130,254,415,426

Total deposits
Other liabilities:
Deferred availability cash items ............................
All o th er...............................................................




25

Changes in Directors and Senior Officers
CHANGES IN DIRECTORS. In December 1992, member banks in Group 2 elected
Robert G. Wilmers a Class A director of the Bank, and William C. Steere, Jr., a Class B
director, both for three-year terms beginning January 1,1993. Mr. Wilmers, Chairman,
President, and Chief Executive Officer of Manufacturers and Traders Trust Company,
Buffalo, N.Y., succeeded Victor J. Riley, Jr., Chairman, President, and Chief Execu­
tive Officer of KeyCorp, Albany, N.Y., who had served as a Class A director since
January 1990. Mr. Steere, Chairman of the Board and Chief Executive Officer of Pfizer
Inc., New York, N .Y , succeeded John A. Georges, Chairman and Chief Executive
Officer of International Paper, Purchase, N .Y , who had served as a Class B director
since February 1987.
Also in December, the Board of Governors of the Federal Reserve System redesig­
nated Ellen V. Futter Chairman of the Board and Federal Reserve Agent for the year
1993. Ms. Futter, President of Barnard College, New York, N. Y., has been serving as a
Class C director since January 1988; she served as Deputy Chairman from September
1988 through December 1991 and has been serving as Chairman and Federal Reserve
Agent since January 1992.
At the same time, the Board of Governors reappointed Maurice R. Greenberg Deputy
Chairman for the year 1993. Mr. Greenberg, who is Chairman and Chief Executive
Officer of American International Group, Inc., New York, N .Y , has been serving as a
Class C director since June 1988 and as Deputy Chairman since January 1992.
In January 1993, the Board of Governors reappointed Cyrus R. Vance a Class C
director for the term beginning January 1,1993. Mr. Vance, who is presiding partner of
the New York law firm of Simpson Thacher & Bartlett, has been a Class C director since
January 1989 and served as Chairman of the Board and Federal Reserve Agent for the
years 1989-91.
Buffalo Branch. In October 1992, the Board of Governors reappointed Herbert L.
Washington a director of the Buffalo Branch for a three-year term beginning January 1,
1993. In addition, the board of directors of this Bank redesignated him Chairman of the
Board of the Buffalo Branch for the year 1993. Mr. Washington, who is the owner of
HLW Fast Track, Inc., Rochester, N .Y , has been serving as a director of the Buffalo
Branch since June 1990 and as Chairman of the Branch Board since January 1992.
In September 1992, the board of this Bank appointed George W. Hamlin IV a Branch
director for a three-year term beginning January 1, 1993. On the Branch Board, Mr.
Hamlin, President and Chief Executive Officer of The Canandaigua National Bank and

2
 6


Trust Company, Canandaigua, N.Y., succeeded Wilbur F. Beh. Mr. Beh, formerly
Chief Executive Officer of First National Bank of Rochester, Rochester, N.Y., and
President of Atlanta National Bank, Atlanta, N.Y., had been a director of the Branch
since January 1990.
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:
Don N. Ringsmuth, Counsel, resigned from the Bank effective June 13, 1992. Mr.
Ringsmuth joined the Bank in 1970 and became an officer in 1976.
In July, Peter D. Sternlight, Executive Vice President, Open Market Group,
announced his retirement, effective December 1, 1992, after forty-two years of distin­
guished service.
Effective July 17, 1992:
Richard G. Davis, formerly Senior Vice President and Director of Research, was
appointed Executive Vice President and Director of Research.
Roberta J. Puschel, formerly Senior Vice President, was appointed Executive Vice
President and assigned responsibility for the newly formed International Banking
Group, consisting of the Central Bank Financial Services Function (formerly the
Foreign Relations Function) and the International Bank Examinations Function. Her
assignment to the Accounting Function continues.
Kathleen A. O ’Neil, Vice President, formerly assigned to the Bank Examinations
Function, was assigned to the International Bank Examinations Function.
The Financial Markets Group was established, consisting of the Open Market,
Foreign Exchange, International Financial Markets, and Market Surveillance Func­
tions. Responsibility for Foreign Exchange and International Financial Markets was
assigned to William J. McDonough, Executive Vice President. He also assumed
responsibility for Open Market and Market Surveillance following Mr. Sternlight’s
retirement in December.
Peter Ryerson Fisher, formerly Assistant Vice President, Foreign Exchange Func­
tion, was appointed Vice President in that Function.
Terrence J. Checki, formerly Vice President, Foreign Relations Function, was
assigned to the newly formed Office of the President, with the title of Assistant to the
President.
Bradley K. Sabel was promoted to the level of Vice President, retaining the title of
Counsel.




27

Effective August 1, 1992:
John E. Flanagan, General Auditor, retired after completing more than forty years of
service with the Bank.
Robert M. Abplanalp, formerly Senior Vice President, Operations Group, was
appointed General Auditor of this Bank by the Board of Governors of the Federal
Reserve System.
Irwin D. Sandberg, Senior Vice President, Central Bank Financial Services Func­
tion, retired effective February 1,1993, after completing more than thirty-two years of
service with the Bank.

28



Directors of the Federal Reserve Bank of New York

DIRECTORS

Term expires Dec. 31

Class

B a r b a r a H a r d i n g ........................................................................................................................................
Chairman and Chief Executive Officer,
The Phillipsburg National Bank and Trust Company, Phillipsburg, N.J.

1993

A

T h o m a s G . L a b r e c q u e ..............................................................................................................................
Chairman and Chief Executive Officer,
The Chase Manhattan Bank (National Association), New York, N.Y.

1994

A

R o b e r t G . W i l m e r s .....................................................................................................................................
Chairman, President, and Chief Executive Officer,
Manufacturers and Traders Trust Company, Buffalo, N.Y.

1995

A

R a n d V. A r a s k o g ..........................................................................................................................................
Chairman, President, and Chief Executive,
ITT Corporation, New York, N.Y.

1993

B

R o b e r t E . A l l e n ...........................................................................................................................................
Chairman and Chief Executive Officer, AT&T, New York, N.Y.

1994

B

W il l ia m C . S t e e r e , J r ................................................................................................................................
Chairman and Chief Executive Officer,
Pfizer Inc., New York, N.Y.

1995

B

E l l e n V. F u t t e r , Chairman and Federal Reserve Agent ..............................................................
President, Barnard College, New York, N.Y.

1993

C

M a u r i c e R . G r e e n b e r g , D eputy C h a irm a n ......................................................................................
Chairman and Chief Executive Officer,
American International Group, Inc., New York, N.Y.

1994

C

C y r u s R . Va n c e .............................................................................................................................................
Presiding Partner, Simpson Thacher & Bartlett, New York, N.Y.

1995

C

DIRECTORS—BUFFALO BRANCH
J o s e p h J. C a s t ig l ia ......................................................................................................................................
President and Chief Executive Officer,
Pratt & Lambert, Inc., Buffalo, N.Y.

1993

S u s a n A . M c L a u g h l in ..............................................................................................................................
General Credit Manager, Eastman Kodak Company, Rochester, N.Y.

1993

C h a r l e s M . M it s c h o w ..............................................................................................................................
Chairman of the Board, Western Region,
Marine Midland Bank, N .A ., Buffalo. N.Y.

1994

R ic h a r d H . P o p p .............................................................................................................................................
Operating Partner, South view Farm, Castile, N.Y.

1994

D o n a l d L . R u s t .............................................................................................................................................
Plant Manager, Tonawanda Engine Plant,
GM Powertrain Division, General Motors Corporation, Buffalo, N.Y.

1994

G e o r g e W. H a m l in I V .................................................................................................................................
President and Chief Executive Officer,
The Canandaigua National Bank and Trust Company, Canandaigua, N.Y.

1995

H e r b e r t L. W a s h i n g t o n , Chairman ...................................................................................................
Owner, HLW Fast Track, Inc., Rochester, N.Y.

1995




29

Advisory Groups

FEDERAL ADVISORY COUNCIL
SECOND DISTRICT MEMBER AND ALTERNATE MEMBER
C h a r l e s S . S a n f o r d , J r . , Member
Chairman and Chief Executive Officer, Bankers Trust Company, New York, N.Y.
G e o r g e J. V o j t a , Alternate Member
Vice Chairman, Bankers Trust Company, New York, N.Y.

ACADEMIC ADVISORY PANEL
B en S. B e r n a n k e
Princeton University
A l a n S. B l in d e r
Princeton University
P h il l ip D . C a g a n
Columbia University
R u d ig e r W. D o r n b u s c h
Massachusetts Institute of Technology
M a r t in S . F e l d s t e in
Harvard University
S t a n l e y F is c h e r
Massachusetts Institute of Technology
B e n ja m in M . F r ie d m a n
Harvard University
P eter B. K enen
Princeton University
Pa u l R . K r u g m a n
Massachusetts Institute of Technology
B u r t o n G . M a l k ie l
Princeton University
F r e d e r ic k S . M is h k in
Columbia University
W il l ia m P o o l e
Brown University
R o b e r t J. S h il l e r
Yale University
W il l ia m L . S il b e r
New York University
L aw rence H. S um m ers
International Bank for Reconstruction and Development
L a w r e n c e J. W h it e
New York University

30



ADVISORY COUNCIL ON
SMALL BUSINESS AND AGRICULTURE
R ic h a r d C . C a l l
My-T Acres, Inc., Batavia, N.Y.
C h r is t o p h e r C . C o l l in s
President, Nuttall Gear Corporation, Niagara Falls, N.Y.
B e n it o R . F e r n a n d e z
President, Brooklyn Manor Group, Brooklyn, N.Y.
H e n r y F. H e n d e r s o n , J r .
President, H.F. Henderson Industries, West Caldwell, N.J.
R o g e r A. L e w
President, Wormuth Brothers Foundry, Athens, N.Y.
F r a n k A. N i g r e l l i
President and Chief Executive Officer
Knight Manufacturing Co., Lindenhurst, N.Y.
Toni N orm an
President, Ranor Inc., Englewood, N.J.
Jo a n S n y d e r
The American Family Farm, Inc., Stuyvesant, N.Y.
P e t e r G. T e n E y c k II
President, Indian Ladder Farms, Altamont, N.Y.

INTERNATIONAL CAPITAL MARKETS
ADVISORY COMMITTEE
Steering Committee
M a th is C a b ia l l a v e t t a
Executive Vice President and Member of the Executive Board
Union Bank of Switzerland
Zurich, Switzerland
L e w is W. C o l e m a n
Vice Chairman of the Board
World Banking Group
Bank of America
San Francisco, Calif.
R ic h a r d B . F ish e r
Chairman, Morgan Stanley and Co., Inc.
New York, N.Y.

Other Members

THRIFT INSTITUTIONS ADVISORY PANEL

B r u c e C . G a l lo w a y
Senior Executive Vice President
Corporate Banking
Royal Bank of Canada
Toronto, Canada

D a v id E. A . C a r s o n
President, People’s Bank, Bridgeport, Conn.

Jo h n M . H e n n e s s y
President and Chief Executive Officer
CS First Boston, Inc.
New York, N. Y
K a r e n N. H o r n
Chairman and Chief Executive Officer
Bank One, Cleveland, N.A.
Cleveland, Ohio
H id e o I s h ih a r a
President
IBJ Leasing Company, Ltd.
Tokyo, Japan
Ja n K a l f f
Member of the Managing Board
ABN/Amro Bank
Amsterdam, The Netherlands
H enry K au fm a n
President
Henry Kaufman and Company, Inc.
New York, N.Y.

H e r b e r t G . C h o r b a jia n
President and Chief Executive Officcr, Albany Savings Bank
Albany, N.Y.
S p e n c e r S. C ro w
President, Maple City Savings and Loan Association
Hornell, N .Y
H e n ry D r e w it z
Chairman, Astoria Federal Savings and Loan Association
Lake Success, N.Y.
J o s e p h P. G e m m e l l
Chairman, President and Chief Executive Officcr
Bankers Savings, Perth Amboy, N.J.
W il l ia m J. L a r a ia
Chairman and Chief Executive Officer
Apple Bank for Savings, New York, 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.
W il l i a m F. O l s o n
Chairman and President, Peoples Westchester Savings Bank
Hawthorne, N.Y.

K o ic h i K im u r a
Deputy President
Daiwa Securities Co., Ltd.
Tokyo,Japan
H . O n n o R u d in g
Vice Chairman
Citicorp-Citibank
New York, N .Y
E u g e n e B. S h a n k s , Jr .
President
Bankers Trust New York Corporation
New York, N.Y.
I n g . R ic a r d o G u a ja r d o T o u c h e
Director General
Bancomer
La Colonia Xoco, Mexico
A n d r ew M . Tu ck ey
Chairman
Baring Brothers & C o ., Limited
London, England
A l e x is W o l k e n s t e in
Directeur General Adjoint
Credit Lyonnais
Paris, France




31

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

J a m e s H . O l t m a n , First Vice President

S u z a n n e C u t l e r , Executive Vice President
Operations
R i c h a r d G . D a v is , Executive Vice President and

E r n e s t T. P a t r i k i s , Executive Vice President and

General Counsel
Legal

Research and Statistics

R o b e r t a J. P u s c h e l , Executive Vice President
International Banking; Accounting

C h e s t e r B. F e l d b e r g , Executive Vice President
Bank Supervision; Loans and Credits

I s r a e l S e n d r o v i c , Executive Vice President
Automation and Telecommunications

Director of Research

W i l l i a m J. M c D o n o u g h , Executive Vice President
Financial Markets

ACCOUNTING
R o b e r ta
R ic h a rd
L eon R.
D o n a ld

J. P u s c h e l , Executive Vice President
J. G e l s o n , Vice President
H o lm e s , Assistant Vice President
R . A n d e r s o n , Manager, Accounting Department

AUDIT
R o b e r t M. A b p l a n a l p , General Auditor
R o b e r t J. A m b r o s e , Assistant General Auditor
L o r e t t a G . A n s b r o , Audit Officer
E d w a r d J. C h u r n e y , Manager, Auditing Department
I r a M. L e v i n s o n , Manager, Audit Analysis Department

AUTOMATION AND
TELECOMMUNICATIONS GROUP
I s r a e l S e n d r o v i c , Executive Vice President

SYSTEMS DEVELOPMENT
R a l p h A. C a n n , III, Senior Vice President
Om P. B a g a r i a , Vice President
P a t r i c i a Y. J u n g , Vice President
M o n ik a K . N o v ik , Assistant Vice President
C l a u d i a H . C o u c h , Manager, Funds Transfer Systems

Department
VlERA A. C r o u t , Manager, Advanced Technology Staff
C h r i s t o p h e r M . K e l l , Systems Development Officer
M i c h a e l J. R e c u p e r o , Manager, Operations Systems

Department
P e t e r S m e j k a l , Manager, Operations Systems Department
M a r i e J. V e it, Manager, Funds Transfer Systems Department
M iria m I. W i e b o l d t , Manager, Administrative and Office

Support Systems Department

BANK SUPERVISION GROUP
C h e s t e r B . F e l d b e r g , Executive Vice President

AUTOMATION PLANNING AND SUPPORT
J a m e s H . G a v e r , Vice President

BANKING APPLICATIONS

DATA PROCESSING

W i l l i a m L . R u t l e d g e , Senior Vice President
J o h n S. C a s s id y , Assistant Vice President
D a v id L . F a n g e r , Manager, Banking Applications Department

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 r a l d H a y d e n , Assistant Vice President
L e o n a r d E . F r i e d m a n , Manager, Fedwire and

Communications Operations Department
P e t e r M . G o r d o n , Manager, Contingency Operations and

Quality Assurance Department
L e n n o x A . M y r i e , Manager, General Computer Operations

Department
I s a a c B . O b s t f e l d , Data Processing Officer, Operations and

Communications Support Department
SHARON T. W o n g , Manager, Operations and Communications
Support Department
SECURITY CONTROL
R a l p h A . C a n n , III, Senior Vice President
H e r b e r t W . W h i t e m a n , J r . , Vice President
R i c h a r d P. P a s s a d i n , Security Officer

32



b a n k in g s t u d i e s a n d a n a l y s i s
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 , Assistant Vice President
G a r y H a b e r m a n , Adviser
B e v e r l y J. H i r t l e , Manager, Banking Studies Department
M a n u e l J. S c h n a id m a n , Manager, Bank Analysis

Department
DOMESTIC BANK EXAMINATIONS
W i l l i a m L . R u t l e d g e , Senior Vice President
C h r i s t i n e M . C u m m in g , Vice President
R o b e r t A. O ’S u l l i v a n , Vice President
J a m e s K . H o d g e t t s , Assistant Vice President
M a r g a r e t E . B r u s h , Examining Officer, Domestic Banking

Department

Officers (Continued)
BANK SUPERVISION GROUP (C o n t i n u e d )

INTERNATIONAL fin a n c ia l m a r k e t s

DOMESTIC BANK EXAMINATIONS ( C o n t i n u e d )

C h a r l e s M. L u c a s , Senior Vice President
W i l l e n e A. J o h n s o n , Assistant Vice President
P a u l DiLEO, Senior International Economist

J o s e p h L . G a l a t i , Manager, Specialized Examinations

Department
F r e d C . H e r r i m a n , J r . , Manager, Domestic Banking

Department
E l i z a b e t h S . I r w in - M c C a u g h e y , Manager, Compliance

MARKET SURVEILLANCE
M a r y R . C l a r k i n , Vice President
M a r y S u e F i s h e r , Assistant Vice President
E d w a r d J. O z o g , Assistant Vice President

Examinations Department
B a r b a r a A . K l e i n , Manager, Domestic Banking Department
J e a n n e t t e M . P o d g o r s k i , Manager, Specialized

Examinations Department
A l b e r t J. R u b b o , Examining Officer, Domestic Banking

Department
D o n a l d E . S c h m id , Manager, Domestic Banking Department
p a y m e n ts s y s te m s t u d i e s
J. A n d r e w S p i n d l e r , Senior Vice President
C h r i s t o p h e r J. M c C u r d y , Vice President
L a w r e n c e M . S w e e t, Senior International Economist
su p e r v is io n s u p p o r t

W i l l i a m L. R u t l e d g e , Senior Vice President
G e o r g e R . J u n c k e r , Vice President
D a v id L. R o b e r t s , Vice President
J a m e s P. B a r r y , Manager, Supervision Support Department

CORPORATE PLANNING GROUP
D o n a l d T. V a n g e l , Vice President
PERSONNEL
C a r l W . T u r n ip s e e d , Vice President
R o b e r t C . S c r i v a n i , Assistant Vice President
E v e l y n E . K e n d e r , Manager, Personnel Department
E l i z a b e t h G . M i n d l i n , Manager, Personnel Department
p la n n in g a n d c o n t r o l
N i r m a l V. M a n e r i k a r , Assistant Vice President
N a t h a n B e d n a r s h , Manager, Management Information

Department

OPEN MARKET
J o a n E . L o v e t t , Senior Vice President
B e t s y B u t t r i l l W h ite , Vice President
R o b e r t 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 Market Department
A n n - M a r ie M e u l e n d y k e , Manager, Open Market

Department

FUNDS AND SECURITIES GROUP
C a r o l W. B a r r e t t , Vice President
ELECTRONIC PAYMENTS
P a u l B . B e n n e t t , Vice President
D a n i e l C . B o l w e l l , Assistant Vice President
H e n r y F. W ie n e r , Assistant Vice President
A n d r e w H e ik a u s , Manager, Funds Transfer Department
P a t r i c i a H i l t , Manager, Securities Transfer Department
M i c h a e l W. M o w b r a y , Manager, Electronic Operations

Support Department
f is c a l s e r v ic e s

W h i t n e y R . I r w i n , Vice President
P a u l i n e E. C h e n , Assistant Vice President
C h r i s t i n a H . R y a n , Manager, Safekeeping Department
J o h n J. S t r i c k , Manager, Savings Bond Department
J o A n n e M . V a l k o v i c , Manager, Government Bond

Department

INTERNATIONAL BANKING GROUP
R o b e r t a J. P u s c h e l , Executive Vice President
c e n t r a l b a n k f in a n c ia l s e rv ic e s
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, Central Bank Financial Services

Department
H i l d o n G . J a m e s , Manager, Central Bank Financial Services
EQUAL EMPLOYMENT OPPORTUNITY
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 Opportunity Officer

Department
F r a n c i s J. R e i s c h a c h , Manager, Central Bank Financial

Services Department
INTERNATIONAL BANK EXAMINATIONS

FINANCIAL MARKETS GROUP
W i l l i a m J. M c D o n o u g h , Executive Vice President
FOREIGN EXCHANGE
M a r g a r e t L . G r e e n e , Senior Vice President
P e t e r R y e r s o n F i s h e r , Vice President
D a n i l o G . D u n g c a , Manager, Foreign Exchange Department

DlNO K o s, Foreign Exchange Trading Officer




K a t h l e e n A . O ’N e i l , Vice President
N a n c y B e r c o v i c i , Assistant Vice President
L e o n K o r o b o w , Adviser
B o n n ie E . L o o p e s k o , Assistant Vice President
T h o m a s P. M c Q u e e n e y , Assistant Vice President
W i l l i a m J. M i l u s i c h , Manager, Far Eastern Examinations

Department
A l b e r t Toss, Examining Officer
W a l t e r W . Z u n i c , Manager, European Examinations

Department

33

Officers (Continued)
LEGAL
E r n e s t T. P a t r i k i s , Executive Vice President and General

EROC ADMINISTRATIVE SERVICES
J o h n M . E ig h m y , Senior Vice President

Counsel
T h o m a s C . B a x t e r , J r . , Counsel
J o y c e M . H a n s e n , 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
D e b r a W . C o o k , Counsel
H a e R a n Kim, Counsel
E r i c A. M a r t i n , Counsel
L i s a B . S c h w a r t z , Counsel
W e b s t e r B . W h i t e , Counsel

SERVICE
R o b e r t V. M u r r a y , Vice President
W i l l i a m J. K e l l y , Manager, Protection Department
J o s e p h R . P r a n c l , J r . , Manager, Food and Office Services

Department

PUBLIC INFORMATION
LOANS AND CREDITS
C h e s t e r B . F e l d b e r g , Executive Vice President
B a r b a r a L. W a l t e r , Vice President
J a n e t K. R o g e r s , Assistant Vice President
OFFICE OF THE PRESIDENT
T e r r e n c e J. C h e c k i, Assistant to the President
M i c h e l e S. G o d f r e y , Assistant to the President, and

Corporate Secretary
D o r o t h y M . S o b o l , Assistant to the President

P e t e r B a k s t a n s k y , Vice President
S t e v e n M a l i n , Manager, Public Information Department

RESEARCH AND STATISTICS GROUP
R i c h a r d G. D a v is , Executive Vice President and Director of

Research
RESEARCH
M . A k b a r A k h t a r , Vice President and Assistant Director of

Research

OPERATIONS GROUP
S u z a n n e C u t l e r , Executive Vice President
BANK SERVICES
B r u c e A. C a s s e l l a , Bank Services Officer
BUILDING SERVICES
J o h n F. S o b a l a , Vice President
P a u l L . M c E v ily , Assistant Vice President
J a s o n M . S t e r n , Assistant Vice President
J o s e p h D . J. DeMARTlNl, Manager, Administrative Support

Services Department
J o s e p h C. M e e h a n , Manager, Building Services Department
J e r o m e P. P e r l o n g o , Manager (Night Officer)
CASH
J o h n M. E ig h m y , Senior Vice President
J o s e p h P. B o t t a , Vice President
M a r t i n P. C u siC K , Assistant Vice President
R o b e r t G. K r a u s , Manager, Operations Support Department
T h o m a s J. L a w l e r , Manager
L. W e n d y W e b b , Manager, Paying and Receiving Department
M i c h a e l L. Z im m e r m a n , Manager, Currency Verification

Department
CHECK
J o h n M. E ig h m y , Senior Vice President
S t e v e n J. G a r o f a l o , Vice President
F r e d A . D e n e s e v ic h , Regional Check Manager (East

Rutherford Operations Center)
A n g u s J. K e n n e d y , Regional Check Manager (Utica Office)
A n t h o n y N. S a g l i a n o , Regional Check Manager (Jericho

Office)
K e n n e t h M. L e f f l e r , Check Officer
M a t t h e w J. P u g l i s i , Manager, Check Services Department

♦On leave of absence.

34




E d w a r d J. F r y d l , Vice President and Assistant Director of

Research
A . S t e v e n E n g l a n d e r , Senior Research Officer*
R o b e r t N. M c C a u le y , Senior Research Officer
C h a r l e s A . P i g 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
J o h n W e n n i n g e r , Senior Research Officer
R i c h a r d M . C a n t o r , Research Officer and Senior Economist
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 ic k o k , Research Officer and Senior Economist
B r u c e K a s m a n , Research Officer and Senior Economist
C h a r l e s S t e i n d e l , Research Officer and Senior Economist
sta t istic s

S u s a n F. M o o r e , Vice President
E l a i n e D . M a u r i e l l o , Assistant Vice President
P a u l a B . S c h w a r t z b e r g , Manager, International Reports

and Support Department

SECRETARY’S OFFICE
M i c h e l e S. G o d f r e y , Assistant to the President, and

Corporate Secretary
E t h a n S. H a r r i s , Assistant Secretary
R o n a B . S t e i n , Assistant Secretary

Officers (Continued)

Officers—Buffalo Branch
J a m e s O. A s t o n , Vice President and Branch Manager

AUTOMATED SYSTEMS; GENERAL DIRECTION OF OPERATIONS;
MANAGEMENT INFORMATION

BANK SERVICES AND PUBLIC INFORMATION; CHECK;
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 , Operations Officer

CASH; CENTRAL OPERATIONS; CREDIT, DISCOUNT,
AND FISCAL AGENCY
G a r y S. W e i n t r a u b , Cashier

BUILDING OPERATING; CASH; SERVICE




D a v id P. S c h w a r z m u e l l e r , Operations Officer

35

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