The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
EXPLANATORY NOTE Following is an expanded explanation of the revision in the statistics on money supply and related measures incorporated in the previous release dated August 14, 1969* That reyistion was necessitated by a change in the Board's Regulation D, effective July 31, requiring member banks to include all "bills payable checks11 and so-called "London "checks" originating from transactions with foreign branches, as deposits subject to reserve requirements. The addition of these items to total bank deposits does not constitute a redefinition of the money supply to encompass a broader concept. The demand deposit component of money supply consists of gross demand deposits of private non-bank holders less cash items in process of collection by the banks. The Board's redefinition of gross demand deposits is intended to compensate for an £>veTSt^af<?THFnt— of- rash i tems^in^process-of an equal amount generated by transactions with foreign brandies and involving mainly the borrowing and repayment of Euro-dollarsi The cash items so generated, in the Board's opinion, represented an unwarranted reduction in reserve requirements to the extent that they were not matched by deposit items subject to reserve. Thus, the effect of the regulatory change is to reestablish the identity^in treatment of gross demand deposits and cash items in this respect, leaving net demand deposits #nd the concept of money supply unchanged. The rapid growth in Euro-dollar transactions, and in the volume of associated cash items, over recent years—and particularly during the first seven months of 1969--had resulted in an increasing downward bias in net demand deposits according to the traditional definition* This downward bias was abruptly eliminated in the first week in August and, in an effort to maintain continuity in the statistical series, the Federal Reserve obtained retrospective data jfrom the member banks most affected in order to correct the figures on money supply and related measures published earlier. Adjustment for the overstatement of cash items resulted in a somewhat faster growth rate in money supply over the period. For the interval from December 1968 to July 1969, for example, the money supply is now shown to have grown at a 4.1 per cent annual rate, as compared to thfe 2.4 per cent rate of increase indicated earlier. This correction is not to be confused with the regular annual revision of money supply statisticsa which will be forthcoming in September. That revision, as usual, will incorporate adjustments indicated by benchmark data (some of which is not yet available) fpr member and non-member banks combined and new seasonal factors which will take account of the month-to-month variations observed during the past year. August 21, 1969. FEDERAL RESERVE statistical release For Itartadiate release August 21, 1969. The seasonally adjusted money siipply increased $400 million in the week ending Atigtist 13, but the average level for the first two weeks of August was $400 million lower than in July. Time tad savings deposits declined further in the latest week to a level $2-3 billion below the July average* MONEY SUPPLY AND.TIME DEPOSITS (Averages o f daily figures, in billions of dollars) Seasonally adjusted Money Supply Period 1968—June July August September October November December 1969--January FebruaryMarch April 9 16 23 30 199.2 199.8 199.0 198.7 198.1 45.1 45.1 45.0 45.2 45.2 Aug. 6 p 13 p 198.5 198.9 45.3 45.5 2 Average of last 4 weeks ' p - Preliminary, 198.6 146.0 148.0 148.6 147.9 148.7 150.1 151.1 42.2 42.6 42.7 42.8 43.2 43.4 43.6 43.9 44.2 44.2 44.6 44.9 45.2 June July p Week ending: 1969—Julv 188.1 190^2 191.2 190.6 191.5 193.3 194.5 195.4 195.7 195.9 197.5 197.4 198. 2 199.1 May Demand deposit component Currency component _ . Total J 45.3 I S i ' i Time deposits adjusted (All commercial banks) 188.2 190.4 193.8 196.6 199.5 201.9 204.3 151.9 151.8 151.7 153.3 152.9 153.3 154.0 202.5 201.0 201.0 200.8 200.1 199.2 195.8 154.1 154.7 154.0 153.5 152.9 198.0 196.9 196.0 195.3 194.7 153.2 153.5 194.1 193.51 153.3 194.4 DEMAND DEPOSITS, CURRENCY, AND .RELATED ITEMS (Averages of daily figures, in billions of dollars. 1 — — • • I I 1 • — — < 1 Related deposits (All commercial banks) U.S. Gov't Time Currency [ Demand deposit component 1 component [ adjusted l, demand Money Supply Period Total , =42.4 42.7 42.7 42.9 43.7 44.3 144.3 145.7 145.2 147.0 149.0 151.2 156.4 201,3 194*3 194,4 198.5 193.7 196.3 197.0 43.5 43.4 43*8 43.9 44.3 44.8 45.3 157.8 150.9 150.7 154.6 149.5 151.5 151.7 202,1 201.6 202.0 201.6 200.9 199.6 196.2 4.7 6.6 4.5 5.1 8.8 5.7 5.3 195.5 196.6 197.3 194.6 44.8 45.0 44.8 44.6 150.7 151.6 152.4 150.0 200.6 200.3 199.6 198.9 5.4 4.0 5.4 8.0 9 16 23 30 197.6 197.7 198.1 195.6 195.7 44.9 45.9 45.3 45.2 44.9 152.8 151.8 152.8 150.4 150.8 198.4 197.3 196.4 195.7 195.1 6p 13 p. 196.8 195.7 151.3 150.1 194.7 194.3 1968--June July August September October November December 1969.—JanuaryFebruary March April May June July p Week ending: 1969—June 4 11 18 25 July Aug. Not seasonally adjusted.) 2 ! 186.2 188.0 187.8 189.7 191.8 194.8 200.7 1 41.9 i i ; | 45.5 • 45.6 1 m ^ — — I i Mm J : 188.6 190.8 194.4 196.2 199.1 200.7 202.5 5.4 5.7 ! 5.5 5.9 6.1 1 4.2 4.8 | 5.6 5.4 3.0 6.7 6.1 5.1 3.8 1 p - Preliminary. c - Corrected r _ Rev ised NOTE: Money supply consists of (1) demand deposits at aii commercial banKs, other than those due to domestic commercial banks and the U.S. Government, less cash items in process of collection and Federal Reserve float; (2) foreign demand balances at Federal Reserve Banks; and (3) currency outside the Treasury, the Federal Reserve and the vaults of all commercial banks. Time deposits adjusted are time deposits at all commercial banks other than those due to domestic commercial banks and the IKS. Government.
@FedFRASER