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I . -6 A d FEDERAL RESERVE BANKOF ATLANTA 0 . 4 .. 2ssage from the President ........................ 3 Price Stability-What Does It Mean in Practice?......................................... < I ............................ I - xth District Highlights '3 ...................................................... I -' 1- I fficers........................................................ -' 3 Financial Statements .................................. 26 Directors c c , A n - 0 w February 12,1993 r he 1992 a d u a l report of the Federal sider this vital issue from a very practical Reserve Bank of Atlanta features standpoiiiy. * . some of our accomplishments fo; the year I 4 .c along with the consolidated financial state- .I would like to exprkss my appreciation to c ” ments of the Atlanta, Birmingham, Jack-. all of the Sixth District’s directors for their sonville, Miami, Nashville, and New Orlea& valuable’ counsel throughout the year. In par- offices. The names &fall directors and officers ticular, I want to acknowledge those directors who served the ,SixthDistrict during the-past whose service ended in 199;-Saundra vear are listed as well. Gray,’ who served as a head office director and * H. * was previously on the Jacksonville b a n c h I I n addition to the review of the year’s board;Robert M. Barrett and Nelda P.Stephen- developments, this report includes p dis- son, of the Bimringhamboard; A. Gordon Oliv- cussion of inflation. In particular, the essay, er, of the Miami board; and Joel B. Bullard, -9 m . . b presents my pdrsonal views about how aggres- Jr., Earl 750. Lundy, and A. Hartie Spence, of sively the Fed can pursue the goal of price the New Orleans board. r. P stability, given certain limitations on our abili\ # ty to measure inflation precisely and the prefkrences of American society regarding the \ acceptable costs of achieving lower inflation. with idation at its lowest rate in more than Robert P: Forrestal two decades, it is a0 appropriate time bp con- President and Chief Executive Officer- r - A G E .? * / ver the last several years the United States has witneised a-lively debate over the c appropriateness of price stability as a goal of economic policy. With inflatibn at its lowest levels since the late 1960s and the economy entering a.new expansion phase, I believe the timq is ripe for considering the goal of price c stability and what it meani from a practical standpoint. .* Y ROBERT P. FORRESTAL We are not presently experiencing the problem of accelefating price pressures. Last year the increase in the consumer price index (CPI) averaged 3 percent, and the moderate improvement, v P expected in economic growth in 1993 2nd 1994 suggests that overall price pressures are not like’ ly to worsen ‘over that period. I b W These developments suggest*that Federal Reserve policymakers such as myself . 3 should take stock of the progress that has been made toward the goal of price stability and provide financial markets, consume;, and businesspebple some sense of the direction‘that the * inflation debate will ta’ke in the years to come. This essay does sooby considering two issues. - 1 . First, as a way to show the difficulty of precisely gauging progress toward the goal of price stability, some of the problems surrounding our ability to measure inflation are noted. Second, even if these technical problems could be satisfactorily resolved,-the case can be made that the ,rate of measured inflation consistent with socially desired output growth is not necessarily zero. I would l i e to emphasize that the discussion that follows, coverkg both the signifkan6e of measurement problems and the limitations on the Fed’s anti-inflationary p6sture that arise from > preferegces of American society, represents my personal viGws, on the subject and not necessarily those of the Federal Reservesystem. However, I regard these views as grounded in the social compact between @icy institutions like the Federal Reserve and the political proqesses that me/” ated them. ; There are, to be sure,. many broader unresolved issues reg?rding inflation. Some - are technical; others are policy choices. poes the availability of sophisticated ‘financial innova*ions reduce inflation’s distortions? Are the redistributional effects of inflation always a net cost 3 AGE < ‘ . 4 c to society? How much worse is a bghly volatile but low average &ation rate than a constant low-rate?These are only .. a few exampks. w I 4 Notwithstanding such questions, past experiences with high and volatile inflation in the United States and lessons from other countries have produckd a general recognition of the - e -hportance of l i m i ~to inflation. w e n policymakers.acknowledge and commit to keeping M a - ' -tion within these limits, the cost of achieving and maintaining them can be minimized. A longterm commitmeqt of this sort does not imply that inflation.may not rise above or fall below these bounds over a short horizon as long as we ensure that policy will act to return inflation to a rate within them. * ' In addifion to this broad consensus on *e 1 benefits of price stability, there isagreement' on the profound role of monetary policy in this process. It is generally accepted that over the short run-say, during a business cyde-mohetary policy can affect both output and prices but that over longer periods *e effects of monetaZy policy on nonfiincial economic aaivity are neutral and only the price effects persist. Given this observation, clearly there are some limits on the extent to which monetary policy can offset or smooth over short-e ' term disruptions or shock5 without subverting a long-term commitment to price stability. Acknowledging these limitations, however, does not constrain monetary policy to follow nar- . rowly defined rules. Thus,even though the benefits of price stability are well understood and there is widespread comnsus about the role of monetary policy in achieving it, there is still codid&able room for debate about how aggressively this goal should be pursped. That 'subject is the focus of the statement that follqws. The essay uses the current juncture of low inflation and an * economy at the start of ah expansion to highlight how an understanding of what we can achieve . . does not always tell us what we should do. I I I HE FED'SRENEWED d I -4. €though price stability, along with full employ- ment, has been an explicit w n o m i c policy goal I- COMMITMENT T( . for several generations, the reduction of inflation * to 3 percent is largely' the result of a dekision made several years ;go by the Fed to reemp$size its determination to PRICE STABILlTY achieve price sltability. After dropping fqom double-digit levels ~~ 4 9 .in me late 1970s ana early 1980s to the 4 percent to 4 1/2 percent range by 1984, the CPI I seemed stahed at that rate for the &st of the decade except for occasional flukuations. The most noticeable deceiemion in the inflation rate occurred in 1986, when a sharp decline irroil prices . . , offset increases in other consumer goods, resulting in-an annual average CPI increase of only 1.9 percent. Still, core inflation-that is, the rate of pice increases % goods and services exclusive of volatile items like food and energy-did not appear to budge. Then in the late 1980s price pressures began to mount. The CPI rate jumped from * 3.7 percent in 1987 to 4.1 percent in 1988 and to 4.8 percent in 1989. While the Fed began moving to counter these forces, a broader discussion initiated at that time focused on the U.S. central bank’s goal of price stabiliv and what it meant. While no formal definition was officially adopt-9 ed by the Fed, an informal consensus developed around the “working definition” of price stability as a reductioh in price pressures to a point where idation ,is Lot a factor in economic decision making. Over d e next several years inflation was brought down from a 5.4 percent annual average increase in 1990 to 3 percent in 1992. Tith the exception of 1986, last year’s * inflation rate was the lowest since 1967. . Y Thus, even @ough the connection between this working definitionaf,inflation and the price indexes available to measure that concept is imperfect, we are at a critical juhcture. It is time to ask if the goal of price stability has, in effect, been achieved. If so, where 80 we go’ from here? I believe that a brief review of technical proble‘ms surrounding the measurement of inflation provides convincing evidence that the U.S. economy is indeed close to price stability. Beyond these issdes, however, social preferences in the United States may constrain b monetary policymakers from immediately and completely resisting price pressures that might arise in the bture. In other words, the lower bound to the measured rate of inflation consistent with pdce stability is greater than zero. n seeking to attain most goals, organizations -T I F F I C U L TI ES determine an appropriate set of measures that -, gauge progress as well as-ultimate success or I N MEASUR] NG failure. Central banks can use various measures of price . - changes, ranging from price indexes of cryde cohnodities , INFLATION and finished producer goods to a broad measure based on output-the GDP deflator. The following discussion focuses 011 ? the most wide1y”used measire * of inflation in this country, the consumer price index. However, the arguments also apply to.the other price measures because no index is free from problems. - . a than 360 categories of products The CPI represents a “babtet of goods”-more and services purchased by consumers, ranging from food aRd shelter to more discretionary items like cars and entertainment. Each category is given a fxed weight accprding fo its estimated - * ' share of consumer expenditures in the base period. One problem with the CPI is that these weights vary between periods .as consumers shift from relatively more expensive products to less costly sub$titutes. For example,-if oil prices jump sharply, consumers will \ gradually use fewer products that are qnergy-intensive and instead buy more fuel-efficient & cars and homes. Shifts can ?cur more quickly, of course, among goods with many close * substitutes. Unfortunately, these shifts cannot be' measured continuysly. Instead, weights are - adjusted only at an interval of many years. In the interim, a price index may still assign an old weight to, say, gasoline prices even though many people have switched to public transpitation or sinaller cars. The result may be 3 biased estimate, and the bias may w d in the direction of overstating inflation. ' W Another s'ignihcafit problem with the CPI is that it only imperfectly captures improvements in quality that take place over &e. Technologhl progress effectively creates new health cap products a d procedures under old names as the pace of technical change quickens. F& instance, our intuition regarding the way pkscription drug prices are m & d would be to expect largely the same set of drugs to be suneyed over time. If they were, the pric& of certain antibiab, which have been decking, would work to pull down the B I . Howeveq the CPi method- ology is to use, for example, pharmacies' prices for the last ten pmscriptions pwdmsed on a particular day of the month and to compare prescdption drug,expenses over time, not individual drug prices. his methodology more truly reflects actual spending, which encompasses purchases of. new, more expekive drugb like AZT and beta-blockea However, this practice represents a-compromise in the sense that the basket of drugs is not held constant and thus theindex does not provide a-pure g k g e of price chinges. The result of this very reasonable effort to incorporate , quality improvements is a probable up6ard'bias in the CPI for this component. There *aresimilar challenges for measuring other components as well. There are also problems associated with the need to _-. b rn-res. use indiRct or imputed ' 9 . In a worldaf scarce resources, including scarce resopces for statistical colleetion by the federal government, not every product orservice can bk directly observed and,measured in an ideal way. Statisticians must develop proxy measures, which inevitably have a certain degree of arbitrariness about them. For example, the portion of income devoted to sheher costs is imputed in a complex way that attempts to gauge the cost of owner-occupied housing-by c a b bting an equivalent rental rate. While the current approach is theoretically pure, actual calculationi are far less intuitive than an e'arkr method that used mortgage payments and other direct costs. Reasonable people may agre*e that one approach makes' more &&e, 'but neither is unambiguously the "tight" method. a _ I - 8 W This brief review of measurement problems associ$ted with the CPI illustrates the ‘difficulty of specrfying the CPI rate that is equivalent to price stability. Estimates vary as to the * b extent that $flationmay be mismeasured ?s a result: However, there is some recognition that . the net effect,is to overstate it, and these biases become proportionately more distorting as the id-ation rate declines. Thus, achieving “zero inflation” could represent deflation, a condition that certainly, would, contrary to the Fed’s price stability goal,. play a role in economic decision mak- * ing. &e corollary of this observation is that achieving the goal of price stability &plies a lower level for CPI inflation that is greater than zero. -_ coufd be satisfactorily resolved, I believe there is another, even more importar$ reason that I the optimal inflation rat. is not necessarily the minimal AND I N F L A T I O N inflation rate. This reason int&es the concept of a social’compact-between U.S. society and its policy-making institu&ons--and the costs indbenefits of reaching price stability. .* W In an economy with stable prices, resources are allocated to their most efficient dses. In turn, lhng-run gi-owth tends to be higherkcause fun& are directed toward investments 4 that raise the ecogpmy’s productive capacjty. The situation is quite different when prices are rise ing and these pressures are not expected to be restrained. Resources tend to be directed toward e inflation hedges like gold, ieal estate, or other fixed sets or toward the costs entailed in con- stant portfolio shifts that are necessary to minimize idation’s effects on other assets. W e price stability is clearly preterable: at the same time achieving price staeility is not without costs, especially in the short k n . If monetary policy is used to lower inflation but the policy is not anticipated or perceived as credible by economic deeisionmakers, then the short-term resource cost of + - - fighting inflation can be very high. Output may fall or not -grow as rapidly as otherwise,‘*.and . unemployment may rise considerably. I believe‘these costs are significant and that policy should - take into consideration the situation . +inwhich a large number of people are thrown out of work and many businesses are disrupted. .. c c u In most advanced economies, policy institutions were created over the last century to mitigate the transition costs of neq5sary economic corrections. In the nineteenth century, business cycle fluctuations were much sharper than they are ’today. Imbalances were corrected Y . by sharp implosions in financial markets, severe contractions in output, and costly dislocations of resources. Priees’also tended to fall across the board, sometimes quite dramatically. Then eco-. nomic growth began afresh. -’) . , , i A . . While such swift and clean ad@tm&ts haye a certain theoretical attractiveness, these abrupt changes were U M ~ costly Y for those adversely affected. Sometimes, in the . rush of a collapse, sound businesses, banks, and. households were fmkally ruined because their assets were not liquid and thky lacked thq time to find sources to liquildate them. Over e time, a variety of economic policy institutions and measures we% established to mitigate and c attemate this process. “+s broadly ameliorative a s Gof macroeconomic pc$icy has been reaffirmed formally as recently asJ978,when Congress began requiring the Fed to report to the le&lature . twice a year in regard to its goals for e c o n o a c growth, employment, and d a t i o n . ‘I% I &, believe the Fed, like other policy institutions that .act on behalf Of k e t y , must kegp public prefererices in mind when pursuing social goals. & a practical\maiter, this‘ & o b l i m o n may * mean that*none 0f.the transitions should be excessively traumatic. .- a 0 L YCLIC ?ICE , e he way this social compact operatesTn,today’s setting can be seen more clearly if we consider I ‘ two si6ations in which inflation might begin to mount-fiit, as a result of cyclical dynamics and, second, iq PRESSURES ’response to an external and totally unexpecteh event that jolts the economy, such as an oil price shock. 1n.the former m e , where bottlenecks begin to develop in response to ggowth at a ratt’ faster than the economy’s potential to-expand, the textbook a p p m h calls for the central bank B to restrah money and d t growth by raising short-term interest rates. While &agreein princi- t ple, I nonetheless see certain limitations on the-monetary authority, given the situation with the other hand of macroeconomic policy makingl-fiscal policy. * . * - * ’ Fiscal policy- has -become handicapped by the large federal budget deficits’that were built up during the 1980s and continue in the 1990s. As a result, we saw in the recent’ recession that fiscal policy was essentially unavailable as a’ countercyclical fool. In turn, all of society’s-attentionaas focused on the Fed to counter rising unemployment and shrinkjng * output. .L b From my pempktive, udess a F u n d deficit reduction plan is implemented, mon- etary .policy is likely 50 be the o d y countercyclical policy available for a number of years. Tl4s \ L r situation, as I see it, makes it impossible for the Fed to focus solely on price stability as the.goal of monetary policy. It would siniply be too costly‘in ten& of output and ufiemployment, in my opinion, to implement immediately the .full policy restraint necessary to bring inflatidn back -, within the accepted AGE --’ IC, bo~;ldsin *- 1 coq in the short run ’ *would be too high. In such circumstances, I believe that the Fed must take a more gradual paw toward the goal of price stability. W Taking a detour from the course toward noninflationary growth in such circumI ,stances should not be interp’reted to mean. that the Fed has becoqe more tolerant of inflation; . c rather, the success we have had in lowering inflation during the past few years should give economic decisionmakers confidence that the Fed would quickly return to a posture of minimizing I price pressures. - A T e n the second scenario in which inflation niight rise, eonsider what should happen if a s h k k like. the oil price increases of the 1970s were to recur. There are those who would say that maintaining the course towird price stability shouldrem8in the paramount goal of the Fed in such circumstances. They- believe that the long- I= L I N EXTERNAL SHOCK AND I I INFLATION term benefits of price stability overwhelmingly outweigh any short-run costs of resisting inflation. In particular, they would be willing for society to incur a drop in output and a rise in joblessness whlle prices of other goods adjusted to thk new higher price of energy. Some prices would fall; some might rise, and the mix of output would shift. Such’a radical reallocation of resources would lead to temporarily higher unemployment and lower ouput as part of the adjustment process. . - ~ ~ c W Those who would countenance such social costs in order to resist inflation argue * that resources would be reallocated efficiently. They point out that if the impact of higher energy prices we& only partly rFsisted, the price leverwould rise generally (and.perhaps permanently) during the adjustment. As a result, they note, .resources would likely be dlocated4o inflation hedges rather than to investments that add to productivity but may take longer-to reach fruition. In their calculus, the lied should not stray from the path towardprice stability because long-term growth will suffer. W Others, I among them, believe that in the case of such a shock the central bank should not completely resist the ensuing price pressures. Rather, some of these m a t be accepted in the form of a temporarily higher CPI growth ratesin order to make the short-run drop in output and employment less’severe. W The role of monetary policy as the sole available tool of macroeconomic policy prices. is a factor here just as it was in the hypothetical case of a cyclically induced run-up in .b Through targeted taxation and spending measures, fiscal poliey would be quite capable of 4 * addressing the imbalances between particular ectors of the economy that might arise in the wake of a shock. Taxes could be raiqd on certain activities' that may be receiving what is \ deemed an undeserved windfall; sect03 thzt are disproportionately harmed could be subsidized through special &grarqs. - In contra&: k n e t a r y policy can be.exerclsed only bluntly, via the Fed's influence on short-rerd interest rates and 00 money held in the form of bank. reseyves, Without fiscal policy as an offsetting force, monetary policymakers have only one w3y 3 ' . *a to mitigate the'uneven impacts of a shock: by choosing to accept part of the pass-through to higher prices during the transition while making it clear that this course is merely a temporary detour from a noninflationary growth path. * . As in-the case of a cyclical acceleration k price: and a constrained response by - the central bank, parkid acooGociation'of a shock should not be interpretkd as vacillation-by the Fed viA-vis its stated goal. It seems to me that the credibility'the Fed has achiived,in the past few years in nxktcfng inflarion gives the central bank m o k flexibility under such circumstances to meet its complex social mandate. . . . I he foregoing discussion explains why there is X I ETY'S , a lower bound on price stability that is above Mation. what happens if society underestimates.the long-tegm-costs of Mation or if society sedks & to use inflation to solve its debt pqhlem? This issue is not at all a hypckhetical one, in view of the a ' large federal budget deficits. Several attempts to a d k s s the deficit problem have failed, reflecting . the fact that knerkans have so far been unable to agnee on an equitable distribution of theJur~ den associated with cutting'programs or raising taxes. "he social deadlock suggests that theF is an underlyins, almost unconscious, bias that favors greater 'dation because it is much easier to pay back what has been borrowed yesw terday or today in less valuable; inflated dollars of tomorrow. N o formal.dqcisions would need to be made, no votes cast, but a de facto tax woulh be levied, in effect &ucing thedebt out.r stagding. I strongly prefer an outright decision on the deficit through the political process. How- - ever, if.such an agreement cannot be reached and inflation were to b e a to rise sharply, the Fed itself would need to act as the stalwarmppe; bound by refusing to *monetize the federal debt. Again, the credibility that we haye achieved over the past several s a r s in* &refully w h g 1 ing price pr6sures out of the-economy should lend credence to our assertion that we will do L a - C so. Of c o u k , historical experience suggests that the bkst way to maintain this Credibility over - '. . time is by having a central bank that has some degree of independence from those who are c * r r . responsible for making Bscal-policy. , * he Federal Reserve System has succeeded in lowering inflation to a significantly slower rate than that of the 1970s and 1980s. Because of measuremeit biases in gauges ‘like the consumer price index, I believe that the’current actual rate of inflation is not far from price stability. As the economic expansion proceeds and resource use increases, price pressures could begin to mount. I firmly believe that the Federal Reserve System should gently but steadfastly resist such an acceleration in the inflation rate, bearing in mind the absence of fiscal policy as a counter&lical tool. If pn adverse shock were to occur, price pressures could be accommodated 3 and measured inflation wouu rise for a while. In neither’case should such policy responses be . interpreted as signalinb an eventual return to the high inflation of the 1970s or even a wavering by the Fed .from its commitment to achieving price stability. Instead, economic decisionmakers should recognize the Fed’s proven determination to keep the economy on a noninflationary growth path. Ebbs and flows in the degree of anti-inflationary pressure coming from Fed policymakers reflect an appropriate flexibility in meeting the central bank’s gdals, goals that embody the preferences of American society as a whole. I 2 dmxs and Pdces. Dur- safekeeping volume dropped District alsg served as the devel- ing 1992 the volume of about 33 percent. The volume opment site of the System’s new of these,services continutid to softwace for the delivery of pay- check collection and electronicsi e 1 I ‘securitieswere eligible to be ti04 MICR ( k e t i c ink maintainedor collected through character recorntion) capture, the Sixth Federal Reserve Dis- these services. and key account totals. rayor triet’s six of€ices-in Atlanta, I The District fully recavered bank services volmne grew Birmingham,Jacksonvile, Miami, the $91.6 million total cost (plus approximately 25 percent as the Nashville, and New Orl& aprivate &or customer base increased 44 per- . continued to e d . These tor) of prov&g F I N A N C I A L SERVICES I or bank services d c h as mea- ’ decline because fewer physical payments services provided by - d adjustment facp r i d services cent, reflecting the ~istrict’s offices procesed 3 billion in 1992, and many of its $ces commitment to encourage the checks,about 4 percent more remain among the lowest in the use of electronic services in 6 . 9 check collection. than ?!N’s%olumeand 1.1 bil- Fe&dReserveSystem. lion more than any other Federal WChe!ckCollcctlon. InOcto- mEkcmmicppyments.In Reserve District. Basic wire trans- ber the first phase of a pew sys- 1992 the District became a leader fer volume incmwed 5 percent, . and ACH commercialv?lume tem for the on-linesettlement of foiikard collection items and achieving an all-electronic auto- rose about 25 percent over 1991. return items (OSCAR) was mated clearinghouse CALH by : W For each Gf the securities ser- implemented in the Birmingham mid-1993. vices-bookentry ttansfers, ofice. The system, to begin District A& endpoints remain defmitive safekeeping, and operating in other District to be converted to electronic n o n d collectio-voLme ofices in 1993, si.kamlines delivery, with 1,251 converted declined in 1992 from 1991 lev- $heck processing by automating els. The number of bookentry . the associated settlement and transfers originated on-line fell accounting functions. During in systemiiie efforts m . . tbward 4 4 - than ten Sixth - - through 1992. To further improve the level of service to customers, , the Distkt implemented an on- about 9 percent,’reflecting vol- 1992 the District participated in line user “help desk“ that allows ume losses caused by regions€ developing an automated adjust- all Fed ofices to log andtrack and mergers in ‘consolidations . ment system (knoyn as FAS- customer assistance requesrs and the Southeast. Noncash coliec- TRAC) and rewriting the Federal also initiated a voice response tion volume was down approxi- ReGrve System’s Unisys-based system for ACH return items and k t e l y 27 percent, and definitive check processing sofcwafe. The notifications of change. : * i \ 8 HNonyhColkxtionand porate services division, all Dis- but by August 26 the branch Deaaitivesak!~con- trict branches completed conyer- had restored all operations an3 solidatkm.AsoneoftheFeded 4 Reserve’s four regionalnoncash based system that facilitates co~ectionprocessing sites, the automated logging, tracking, Atlanta Fed‘sJacksonviue Branch ( . continued its d d a t i o n of Syse ‘tem*m&on and bond process- and kporting for cash ship upervision and Regula- ments. Developed by the Sixth don.With the conversion * tion software is scheduled to noncash items in september. implemented in two other Fed- Jacksonviue also began props- eral Reserve Districts in 1943 , Atlanta, Miami, and N & h l e of twenty nonmember bank District, the new cash automa- ing, adcling RichmondDistrict ing for paying agents in the functions. sion to a new minicomputer- > % d - UPERVISION AND REGULATION and has engaged the inter& of subsidiaries of a major institu- several other Districts. tion to Federal Reserve membership effective July 1, 1992, Hmrlcaae A u d f e ! ~A. major zones. The District’s definitive challenge the Sixth ~istrictfaced the number of sixth District in 1992 was maintaining service state member banks grew 20 Birmingham,to reduce cqxs and levels when Hu.picane Andrew percent (to 120) and aggregate in- hit southern Florida on August 24 assets, increased about 56 per- safekeeping services were fiuther . consolidated in a single &ce, efficiency as the System / I cent (to $42.8 billion). This larg- pursues its planned withdrawal and Louisiana two days later. from proGding these service~by Damage in L o u i s b bypassed er constituency called for a yearend1993 New Orleans, but the catas- significant increase in commer- trophic destruction in Miami cial and consumer affairs eFmi- crea;ed extreme operational CW, nation staff. Staff additions were ficulties for the Fed branch also required to handle new F - W serdces. The Jack-. s o n d e office succeshlly implemented the p Origmal d ‘ , Issue-application(PCOI), a>ew there. Nevertheless, the Miami responsibilities mandated by the Treasury Direct subsystem that office, powered by an emergen- Feder& DepositJnsurand: Cor- provides servicing sftes an alter- ’ cy generator and staffed by a poration Improvement Act of native means of entering Trea- corps of employees, remained 1991 (FDICIA). This act sets sury tender data during Treasury open. Using contingency plans, forth an array of regulatory Direct mainframe downtime. electronic funds transfers were responsibili6es, from savings Jacksonville was one of six Fed- maintained via computer link- ’ disclosures and an enhanced eral Reserve pilot sites for this ages to +e Atlanta office, and Fed role h foreign bank super- system, which is the fm. Trea- branch staff handled a high 901- vision to a course of “prompt sury Direct program to use per- ume of c q h distribution to meet correctire action” whereby spe- sonal computers.’ the increased local need. Check cific supervisory actions are pre- clearing was delayed until the scribed dependent on an branch had regained MI power: institution’s capialevel. For Cash Servke~:Wlth support from automation staff in the cor-’ 0 - -., . e -* +- . example, the international BCO~andcommuntty affairs examin& have expanded examination stak grew approxi- Affaits..The communityaffairs the scope of thei fair-lending mately 85 percent to meet the staff have conducted research on reviews,using HMDA data to act's requirement that all foreign barriers to lending in law- and mget s a c loan applications agencies and representative moderate-income and rural areas as a way of probing potential offices be examined annually that has contributed to the unequal treatment. The depart- for safety and soundness. To debate on%thesoundness and address the automation effectiveness of loan programs resources to thorough +%%s- of the larger staff and a broader targeted to these areas. Sharing mepts of spte member banks' set of responsibilitie& the this informatioh through a performance wder the Cornmu- department investigated*a num- newsletter, speeches, and con- niyReinv&ent befof automation alternatives ferences sisnificantly w e d affairs staff have also been great- and identifted an appmpria{e community development activity ly affectedky FDICIA provi- computer system forqurchase througbut the District. The staff sions,-including ~ m t in h in 1993. provided technicalassistance to Savings an-d the required exami- help create four new loan nation of foreign branches locat- , pools-with total committed ed in the Sixth District for * The number of new 'staff in the depaitment intensified . < ' almost $150 mil- ment has dqoted additional 4ct. Consumer - compliance with consumer pro- a l p d y h e m a n d i g training resou~cesOf requirements. Atlanta staff, who lion4o;community deyelop tection regulations. were involved in developing ment lending. In addition, staff ;+&credit. Like members kisted three ~ i ~ t r i ~ tothq areas of the supervision . and implementing a rigorous financial o+tions curriculum for examiner training I t . h,seaing and regulation division, the dis- up community development cor- count function was also affected Board of Governors in 1%), porations. These initiatives will by the passage of FDICIA. One have taken a similar role in a help finahce affoqble single- of the law's provisions, designed program to integrate Federal and mukifamily housing and to help ensure the least costly Reserve examiner training with small. business development . resolution of problem institu- the FDIC's. The District also throughout the District. and ceAification adopted by the * ~ I8 -i L continued its support for various tions and thus avoid excessive During 1992, the second year. * System initiatives by contribut- of collection and analysis of I ing substantial resources to spe- e w n d e d 1990 Home-Mortgage .cial exanhations and criminal Disclosure Act (HMDA) data, drain onthe deposit insurance fund, involves raising the Fed's . potential liab&ty in lending to failing institutions. Through investigatio9, task forces, and increased attention was f@ providing chairmanship of the the annual Shared National on fair-lending issues,.parti&- Federal Reseke System's-Sub-' ly on apparint disparities in the sommittee on Discounts Ad Credit review, the coordinated review of large natidnal credits by federal regulatory agencies. * Ab treatment of minority loan appli- . cants. Atlanta Fed consumer I) -Credits, the Sixth District positively influenced System lending 0 ,- e4 k policy re&rdhg these provisions of changes in monetary policy development, a model that often of FDICIA i s we! is other dis- from the impacts of konomic underlies long-term local 9 count practice; In addition, the shocks, charted the effect of regional ckonomic planning. discount function staff assumed monetary policy on the Treasury W The staff also cokidered responsibility for coordinating yield curvg, and developed a issues arising from thq rapid the Distrkt’s risk management finance-biased model of foreign - 4 changes in the nation’s financial 4 and monitoring program for exchange rate determination. institutions and markets and accountholdeg. Institutions are The foreign sector also received their regulation. .One study cul- * monitored to determine whether, . attention in a stqdy that indicates , W t e d in a proposal for avoiding f m c @ distress through excess credit exposure exists, some adverse effects of exshange whether daylight overdraft.cdt rate variability on intemtional limits are suitable, and whether a trade flows and in work on for- discoynt window lending policy. malizing structures necessary for Another study went beyond international pqlic;y coordination. banking to compare and co 3 “high-risk”designation should be assigned,,and the fmdings are ~ cmrcktjng bank closing.and 5 Research on cthe information communicated to appropriate the nation’s pension insurance confidence .content ofas consumer well as the role of parties within the Reserve Bgnk. - H The &count rate was low- system with its insurance system . cent to 3.0 percent on July 2. - survey and employment infor- - .C In research related to bank mation irr forecasting industrial consolidation, staff members . h called into question claims of. ness of data often relied on to cost savings from bank mergers d. Issuesplated monitor the domestic economy. as well as widely held explana- to the.Federal&eie’s . -regional economic conditions, tions of variations in bank prdf- As an additional aid to tracking responiibilities occupied the itability among banking markets. , Financial economists also studied banks’ merger motivations publicly available sur- - vey of activity at manufacturing and their choice of capital research department in 1992, a plants in the Southeast. instruments. This work, which year of continued slow econom- H In research on long-term extended the departmtnt’s ic growth and financial uncer- trknds in economic activity, two inquiries intp the structure Of . tainty. Reacting to recent c * studies address the contribution - production in the financial ser- difficulties in settjng moneta+ of capital, both human and vices industries, led to policy goals and evaluating the physical, to economic &wth ence for experts oaefficiency in economy’s near-term path while a third provides a history financial institutions. involved work on seyi-al issues. and critique questioning the H S& W examined the problems usefulned of the ecopomic base % confer- continued to explore developments in financial mar- 4 involved in separatjng the results L * model of regional economic . , . &hestaff developed a -SEARCH ’ - - production assesses the useful- monetary and financial policy , for depository‘intermediari4s. surveys ered once in 1992, from 3.5 per- 21 4 kets and insmqents and *eir + . * c * policy Eplications. A conference near-term prospects for the The department updated and held-early in the year brought Southeast's economy and $e le@s@Ed two of its ma3 popular together expem in f m c i a l mar- financial services industry. In plllphle$s-oneon~ kets and new desvative financial conjunctiofiwith a series of edu- counterfeitcunrencyandanother instruments with policymakers iR catioh activitiesto Commemo- onthe~andfunctionsd . " I public policy issues among aca- rate the New York Stock demic economists who specialize staff organized a seminar on reg- newsletterreportingresearchdiVi- in finance. The staff also devel- ulatory issuesjn banking and s@ activities. oped, tested, a d outlined the securities markGts. H Stadstid-. an attempt to raise intemt in impliations df models for securi- the Federal Resenre System. It also 2 Exchange's 2ooch anniversary, cooidinatedahdproddanew 0 Depart- 4 u H As part of its outreach to eco- ment staff developed special ties pricing, pathdependent node educators, the depart- mechanisms for monitoring ~ p t i o nand ~ , mortgagehacked ment, along with the Louisiana changes resulting from numer- securities. Council on EcononUc Education & 0 ous revisions €0Regulation D 1 Research staff also assisted and the Dallas Fed, taught an during the year, includinga cash services in /developing a internagonal economics course reduction in reserve require- currency inventory model that for high school teachers at the -men&,closingof loopholes, may help cash services target University df New Orleans. Stal3 reducing the lag in counting the apount of currency to order members also developed a cur- vaat cash as a component of from the u.S. ~ m u r y . riculum guide to a€company an required reserves, and doubling article in Regional Updateon - the amount of carryover permit- Public AtTaim. Conferences and seminars on international understanding the unemploy- trade, fmancial regulation, and ment rate. . ted between reserve mainte- . LT nance periods. The department -* . In addition, ;he Bank caspon- also provided staff at the Board sored the Fifth Special Financial of Governors-andthe New'York educational progmms in 1992.A mnference of the American Federal Reserve Bank with early conference titled Tconpmic. Committee on As& Development in the Southeast- Studies, a consortium of aca- Taking a Giant Step Fo&ard'' demics and policymakers broight speciaiists and practi- ' involved in the economies of 8 W Data in the National tioners together to discuss devel- Asia and the pacifii Rim.Much Information Center ,data base opment issues ranging from of the discussia)? corwemed were further d i p 3 as staff gath- regional development were a major part of the department's c1 s housing and the environment to- Economic -European monetary union, and - information about the effects of . ings at. depository institutio~S. these changes on reserve hold- ered and entered more precise 1 exports and financing. A region-, a1 roundgble, cosponsored with participants included central .bankers from Germany and the National Association of Busi- France as well as a number of ness Economists, focused on Asian countries. I . . J information for commercial banks' branches and the repre-. , sentative offices of foreia insti* * tutiom in the Sixth District. The t . . . department assumed responsibilI ity for gathering and processing the risk of the me'. Home Mortgage Disclosure Act a Systemwide conversion, the' repom. r c *Sixth District As p%rc of 5 also begun 4 b new softwmfor the Federal Reserve's ex- accounting system, kno& as PACS (Plan- replacing its data communica- ning and Control System). The research apd yxdysis group and tion system. The project, wbich new system will be the Federal ;Killextend through 1995, Reserve's fvst major application involves installing a high-speed, to operate on multiple (PC and hgh-reliability network to s u p mainframe) platformi. ~0ftGire ' formed to help build on the d y t i c a l content of the departb ,- ment's work. Atlanta staff . designpd begq'to develop W Within the department a a trainingacivisory group were . inpxtant step f6r minimizing port the conso!idated p r o c e d g data and the growtkin el-- development is scheduled to trained personnel at the Miami Of Branch in'report prepadion for tronic payment services. Edge Act corporations and for- WpaymtntssystemRts)r~~ beginning in January 1994;,at ,eign bank agencies. m. TIE ~ a n k piepami for least six R-rve further payments system risk pol- eventually usi: the new system. be completed by August 1993, . with implementation in Atlanta - . B a e will . icy changes approved by the signficant resources toward ' Board of Governors. ring 1992 ed the design inJuly for a new software rei- for a&unting, centdized billing (accounts securities, funds, and Treasury receivabl?) -@at will p m c Cess all twelve Resew: Banks' 3RPORATE S E R V I C E S ~ * I billingopektions at one of the preparing formflsfefring its implemented M supportthese' system's new consolidateci data IBM mainframe cOmputer pro- changes, which include *&ions processingsitesi cessing to three Federal Reserve (eff&&,ve in October 1993) to w cdnsolidated processing sites procedures for meaS;ring thi involved in the development, amount of overdrafts itl reserve maintenance, and support of in 1993. The consolidation, . announced in late 1991, is and clearing accounts during the e , he Distric;~ntinuesto Fedlii;e,aPC-basedsoftware * 4 intendEd to make the Federal &y. In addition, Reserve Bank pioduct through which financial Reserve's electronic p a p e n t staff used interfacing software to institutions nationwide access services even more reliable and test new &flight ov- to rovide a &ore uniform level toring software and began prepa- electronic payments, account of customer service nationwide. rations to host sefninars in 1993 information, and cash ordering Atlanta computer staff have to help institutions review t h e and deposits. P - installed and have begun exten- 1 1 moni- -polidjl changes. F e r a l Reserve services such as W The Bank continued its lead- sive testing of much of the soft- W SoftWareDevelopment ership in a System project to ware that will run in the prefects. Programming staff in enhance'payments data security consolidated environment, an Atlanta completed the detailed using a message authentication .AP ' code (MAC), a form of digit& approved to enmuage key staff Bank's comprehensive, autdmat- signature that indicates whether members to remain with the ed m~nankes~urce iRf0r;nation an electronic message ha^ Bank during h e w i t i o n and to system. The data base provides modified, during transit. & h a r e fatilitate start-up operations at considerable support to Bank . d hadware cokponents for the conmiidat& sites. SO far! management in setting person- . - seven individuals from the MAC system'were tested ne1 policies and obj&es, par- Atlanta Bank have aqxpted jobs ticularly affumatve action goak; verified the soundnep of the at the comolii3ationsites. The maintains information critical to. 'technical specifications, but the Bank is also assisting staff mem- managing the W project is still in the develop- . bets who may notbe retained tion and benefits pgramq and mentalstages. once consolidation is pmplete: enhances the Bank's automated ing the ACH system, &ch a m I n t e r i m ~ d i w m h d o n . Several meetin& held with out- s compensa- payroll system.' In 1-92 the Bank leased office 'side pf&ionals were designed H In 1% the Bank's,manage- space to accommdite Atlanta to help individuals prepare for &nt approved a newmanaged the change. staff d W g the period required .,. care a - m a c h for administering ' health benefits, The new plan, TQ ensure compliance with to study, plan, $sign, and con4 in effect struct facilities @at w ill meet the Americans with Disabilities long-term facilities needs*f the Act hplemented in' 1992;all head ofice.A% aqditional ing and employment practices 28,500 square feet leased at the were reviewed, resulting in 55 Park Place ofice tower modificatons to & e % a n ~ s ' allowed relocatioa of the statisti- employment applicition form cal reports department from the .kci,dthir appropriate changes. 6 of January 1, rW3,. will replace the indemnity plan. hir- 1 * It is designed to help contain Y cost ~ * increases in healthbenefits wfiile providing employeeS I . improved benefits at discount& w grices.A I G ~savings for the Marietta Street building and, In addition, extensive &&ng Bank are expected to range expansion of space' occupied by sess@nswere held at each of fro@ $500,000 to $800,0o0or the District's six offies.to more. Existing HMO options will departfhent at Park Place In infm sup- continue to be offered at each additictn, a seven-year lease was ment staff of the act's implia- signed for %,so0 square feet in. tions, and special procedures the Equitable Building, adequate were estabkhed to help depart- space To house several depart- ments i d e n w essenkl job ments that will relocate to these fui~ctiorkin order to comply offices duririg 1993. with specific provisions of the thg supervision and regulation . and manage- 6ranch office. .r he District's audit management implemented'a 6 a ' & number of organizational ~ H u m a n W . T o s u p UDITI port the Federal Reserve System's qutomati2n consoiidationstia- I department staff completed an changes in 1992 chat better'pre- zI 1 effectively in an environment of he Bank's 1992 Distin- Helsinki School of Economi- increasingly consolidated Disqct guished Speakers Series spoke to audiences of Atlanta featured a variety of prominent and System operations. The * structure of audits was ais0 f: ECRETARY'S changed somewhat to improve b~siness,ziademic, and commu- OFFICE w I their quality, effectiveness, and individuals including former U.S. the Advisory Council on Small efficiency. Senator and Presidential Chief of . Business, Agriculture, and W Audit emphasis was added in Staff Howard Baker, Secretary of Labor held two meetings to a number of areas of autgmation Health and Human Services exchange views with President including enviromheitai soft- Louis Sullivan, the late FDIC Forrestal and Atlanta Fed staff ware products, data security, Chairman d l & Taylor, finan- on business and credit condi- -B" 5 . microcomputer applications, and ' cia1 advisor JohnG. Heimann, . tions in the region. President the IBM AS/400.The department Confehce Board President pres- Forrestal also met twice with continued to provide audit cov- ton Townley, Federal Reserve the Financial Institutions AFfvi- erage and monitoring for both - Chairman Alan Greenspan, Fed- sory Committee, which repre- era1 Reserve Governors Sus'an sents commercial banks, thrifts, Phillips and Lawrence Lindsey, and credit unions: to discuss W The Bistrict continued to and economist Norman Robert- . some provisidx of FDICIA serve as-the site for the System son.All discussed domestic and such as prompf corrective Centa for Auditor Devklopment international financial 'industry action and new real estate lend- (SCAD), a tqining unit that and economic concerns. Ryder ing standards. c develops Fed-specifi auditing System Chiirman Anthony System and District s o b a r e . development projects. - 8 In conjunction with his mone- r, programs and negotiates con- Burns spoke to a joint meeting tary policy re'sponsibilities, tracts for external training ser- of the Sixth District's head office President Forrestal also met . vices on behalf of the Sysgm's and branch directors.T h r e e d i ~ - 'periodically with leaders repre- . audit community. In collabora- tinguished international figures- senting business, academic, tion with SCAD, auditipg cpor- Andn5s Rozental, Deputy Foreign financial, consumer, labor, and dinated and conducted the first Minister of Mexico; Carlos Rojo, other community interests SCAD Symposium on ~ o c a l Under Secretary of the Ministry throughout the District to dis-' of .Econohy for Argentina; and cus4 current economic and policy- JaakkoHonko, Chancellor of the related issues. . Area Networks and Personal Computers. ' ' 1. e - IARD OF DIRECTORS . A EDWINA. HUSTON > CHAIW Senior Executive Vice President-Fice Ryder System, Inc. Miami,Florida - - I & J. THOMAS HOLTOV President Sherman InternationalCorp. Birmingham, Alabama U VIC~ORIA B . JACKSON President and Chief Executive Officer DSSfiroDiesel, Inc. Nashville, Tennessee LEO BENATA~ DEPUTY~CHAIRMAN Chairman and President Engraph, Inc. : Atlanta, Georgia W.H. SWAIN Chairman' First National Bank Oneida, Tennessee J- B. chairman and,Chief Executive Of€icer SunT~ustBanks, Inc. Atlanta, Georgia AND& M. RUBENSTEIN HUGHM. BROWN President and Chief Executiw Officer Chairman and Chief Executive Officer Rubenstein Brothers, Inc. New Orleans, Louisiana T SIMPSONRUSSELL Chairmanandpresident The First Nad%nal Bank of Florence Florence, Alabama 4 Geqini SpMgs Farm DeBary, Florida I ? A N C H DIRECTORS E.B. ROBINSON,JR. %airman and Chief Executive Officer Deposit Guaranty Nation$ Bank lackson, Mississippi - . 1 I 6lRMlNGHAM ROBERTM. BARREIT Chaand President The First National Bank of Wetumpk . Wetumpka, Alabama N E ~ P. A STEPHENSON CHAIRMAN F'resident Nelda Stephenson acha;olet, Jnc. Florence, Alabama DONALD E. BOOMERSHINE 'President Better Business Buieau of C e n w Alabama, Inc. Birmingham, Alabama S . EUGENEALLRED chairman,President, and Chief Executive O!X Frit Incorporated Ozark, Alabama MARLIN JULIAN W. BANTON Chairman, President, andChief Executive officer SouthTrust Bank of Ala&, Birmingham, Alabama s. MOORE,JR. C W Pritchet-Moore,Inc. Tuscaloosa, Alabama N.A. 2 JACK~ONVILLE &AJANELENC?S-BRENT CHAIRMAN ' ARNOLD A. H E G G E S - F ~ William H. Dial Professor of. ' President Paul Brent Designer, Inc. Panama City, Florida Bg and Finance College of Business Administration University of Florida G a i n e d e , Florida .PERRY M. DAWSON Presideht ancXhief Executive Officer Suncoast Schools Federal credit Union Tampa,Flo~+& G E R L E L. GRASER . Chairman and ghief Executive Offi& First Natio.4 Bank of V q i c e Venice,Florida . COLUMBUS SANDERS President. Consolidated Industries, Inc. H u n M e , Alabama . HUGHH. JONES, JR. chairman and Chief Executive m c e r Bamett Bank of Jacksonville, N.A. Jacksonville, Florida JoAND. RWTIER Member Florida Board of Regents Orlando, Florida 4 SAMUEL H . VICKERS Chairman, President, and Chief Executive officer Design C o n m e n , Inc. Jacksonde, Florida . m I > . I - MICHAEL T. WILSON President Viegar Ekhd Farms,Inc. M e Glade, Florida ViChaimunandC&efFinan&dolEcer Republic I+xkmal Bank of Miami Miami, mlida , Thecitiwnsandsouthem National Bank of Florida R. KIRK LANDON ChilirmanandChiefEx~Officer American Bankers Insuprr)ceGroup Mqp, Plofida b STEVE% c.SHIhaP president ' O-A-IWIorida, Inc. Fort Myers, Florida I, PATL. TOTO, JR. Executive Vice president United Teachers oflhde Miami,nolida , A. GORDON OWW (resigned) Presi&ntandChief&ecutiveOfEcer R O B ~ O G. BLANCO ' a E. ~ O N NEWTON Y -Fwsident wvrd National Bank P a Beach, Florida -c . . c MIAMI # DOROTHY C . WEAVER President Intercap I n v d hc coral Gables, Florida t FortIauderdale,Floirda~ - , NASHVILLE &OLDA.BLACK - JAM& - D . HARRIS huRGuERITE CHAIRMAN president and Chief Executive Officer FirstAmericanBankDistinguished Professor and Head DepQttment of Finance C~tlegeof Busmess Acbhhtratim UnivAity of ~ennessee Knoxville, Tennessee Brentwood National Bank Brentwood, Tennessee ' WILUAMS E. ARANT, JR. &e.s?ent wd Chief Exeaitive Officer First Natiopal Bank of Knoxville - . Knoxville,Tenne+see JAMESR. TtmRpp b%VProDieseI,hc. Nashville, Tennessee Amgican General Life and Accident 6 * * t President and Chief Executive OtXcer Nashville, 'EkuKssee . w. LUNDY chairmanand Chief Executive ofticer I P i National Bank of Vicksbug CHAIRhUN Vicksburg, Mississippi . JoBl B. BULLAR~, JR. (resigned) . Presidht Joe BullaFd Automotive companies , Mobile, Alabama - VICTORIA B. J A ~ (resigned) N F % & i i tand Chief Executive Officer WILLIAM BAXTWLEE I11 chairman and President .southeast senrices corporation Knoxville, ~ e n n e s s e ~ ' VICTO~BUSSIE HOWARD C . GAINES chairman and Chief Executive Officer First National Bank of Commerce CorpOnteQlildcare Managementserrices Nashville, T e n n e k e Insurance company . NEW ORLEANS President LouisianaApGcIo BatonRwge,Louisiana + w. ShLLEE president and chief Executive &cer . r XAYL. NELSON ManagingDireaor Nelson Capital Corpwation ?veworleans,Louisiana LUCIMARLW T. ROBERTS President Mississippi Coast Coliseum Commission Pass Christian. 1cIississiobi JO ANN SLAYDON ' president Slaydon Consultants and 'Insight F'roductions and Advertising Baton Rouge, L O U ~ S ~ M A. HARTIE SPENCE (resi@ed) president Calcasieu Marine National Bank Lake charles,touisiana . . . R O ~ E RP. T FORRESTAL President and Chief Executive officer . H. t - SHEILAL. TSCHINKEL* Vice President and D M o r of Research EDMUNDWILLINGHAM Senior Vice President and General Counsel‘ TERRY S?* M. WALLACE** Senior Vice President and GeneralAuditor- ,- JOHN *Menagement* VICE PREYDENTS LOIS C. B E R ~ M E vice President ZANE-R. KELLEY Vice President CHRISTOPHER G. BROW Vice P p i d e n t JOHN w a s J. CRAVEN, JR. Vice President and B. FRANK KING Vice President and - . - . DireaorofHumank&s- R. ~ R R * M V i S U t -c O o~m m i d e e M. McKEE . ViceMident JAMES JOHN V i e President - D. PELlCK Vice President . - A”EM.DEBEER Vice President MARYS. ROSENBAUM Vicepresident RONALD N.ZIh5MERMAN- VicePresident ’ WILUAM C. HUNTER Vice President & I H. ATKINSON Assistant Vice President JOHN + D SUSAN i HOY A F. ChdR ~ E. V N 111 AssistantGeneralCounsel # THOMAS J. CUNNINGHAM Researchmcer W CWELLED. DAVIS Assistant Vice President L. PIJXINTON, JR. Assistad Gen@ Auditor JAYNE . COX-BRYAN Assistant Vice President and Corporate secretary i LARRYJ. SCHULZ Assistant Vice President ROBERTT. SEXTON A s s i i t Vice President A. MUR~HY t vice President LARRYD. WALL Research Officer ALVIN 4 T. WATSUN A s s i t Vice President TED G . m D Y I11 JESSIE Assistant Vice President L P. RIVERS 111 Assistant Vice‘President -*ON WILLIAM T. ROBERDS WILLLUM R. HERBERT &istant Vice President , I * B. ESTE~ I11 Assistant Vice President MELINDAJ. RUSHING Assistant Vice President &ERT NANCYR. MCCRUMMEN(retired> Assistant Vice President Assistant Vice President %I- RONALDJ. ROBINSON Assistant Vice President Assistant General counsel R. BRANSCOMB t Vice president . JOHN W e * . !$mor Senior Vice President I A L D v * Executive Vim president chiefoperatingofficer PRE~IDENTS RICHARD R. O m * Seniorvicepresident - w. PPONNIE c W First V i e President and . SENIOR VICE JACK G ResearchORcer , ADRIENNE-M. WELLS’ Assistant vice President KIAN KLW W ~ N G Assistant V i q President . - ATLANTA I Assistant Vice President W ~ D L YM. N BASSLER (retired) Vice President and Assistant Branch Manager Senior Vice President and ", coordiaatingBranch Manager # . ROBERTI. MCKENZJE Assiitant &e President JAMEg L. BROWN DONALD E. NEISONSenior Vice Presidqt and Branch Manager ROBERTA. LOVE Assistant Vice President WILLIAM R. PO-LL FREDERIC L. FULLERTON Assistant Vice President C H A R L E S w . PRIME Assistant Vice President a . I Assistant Vice President EDWARDB. HUGHES Assistant Vice President ROBERTG. DOLE Assistant Vice President and Assistant Branch Manager . c . ' JACKSONVILLE J~ME D. S HAWKINS* Senior Vice President and Coordinating Branch-Manager DANIEL A. MASLANEY Assistant Vice President &ERLY,K. W r ~ s r e ~ Assistant vice PreJident . L. WELTZIENA s s i i t Vice President JEFTREY ROBERTJ. SLACK ' Assistant Vice President and e i s t a n t Branch Maxxger MIAMI JAMES T. CURRY Vice President apd Branch Manager JUW D E L BUST0 Asfistant Vice President and Assistant Branch Manager . * r - .- I- . VICKIA.ANDERSON Assistant Vice President FREDD.COX Assistant Vice President RAULDOMINGUEZ Assistant Vice President a - ROBERTDE h Y A S Assistant Vice President NASHVILLE M E L V Y N K. PURCELL Vice President and Branch Manager WILLIAM W. D m s Assistant Vice President E. WARREN A s s i i t Vice President JOEL L \ . LEE C. JONES , Assiint Vice Preident and ,Mistant Branch Manager . MARGARETA."HOMAS Assistant Vice President * - - E. CHANNING WORKMAN, JR. Assistant Vice President i NEW ORLEANS ROBERTJ. M U S S ~ . Vice President and Branch Manager 'AMYS.GOODMAN Assistant Vice President PATkCIA D. V A N DE Assistant Vice b i d e n t WILLIAM H. SMELT Assistant Vice President and AssistantBranchManager . GRAAF ?- A . ATEMENT O F C O N D I T I O N - &31,1991 $ -31,1992 479,000,000. 503,000,000 $ 3o33ooo.m 318,000,000 46,309,635 38,246,964 9,115,275,522 10,228,575,482 IC 895,199,642 1,304,767,107 56962,197 57,015,133 3,003,780,421 2,296,550,712 . 1,987,388,156 a 3,833,067,333 3 Total Assets $15,886,914,563 $18,579,222,731 3 F e d e d Reserve Nabs $1 1,425,796,490 $13,231,945,372 3,101,919,515 4,100,864,625 792,359,948 81,241,610 600,199,151 TotafLiabiiities $15,401,317,563 $17,999,942,331 Total Capital Accounts $ Total Liabilities and Capid Accounts $15,886,915,563 DePosiw 485,598,000 66,933,183 $ 579,280,400 $18,579,222,731 'Includes depssitory institution accounts, mlkged funds due to other Federal Reserve Banks, U.S. Treasurer-Genet-al.accwnr, other and m i q b m u.depoSiu s . TATEMENT OF .li - EAu"G8ANDExpBNsEs , current Income -31,*1991 _. $8737509,356 * 129,128,941 1 costofEamingscredits 31, i992 $!297,067,482* I Current Expe;lses EARNINGS A N D EXPENSES 138,361,845 ' 13482,866 -\ I 13,536275# 4 I b* Current Net Income - Net Additions (Deductions)' '1 * * $854,455,675 $721,711,236 38,592,616 W,i304,216) 10,430,300 11,888,400 11,484,999 15;152,ao5 I -m,ent for ~xpensesof ~ o a r of c ~Cdvemors Federal Rese~eCurrency Cost Cost . of*U n r e i m b d lfeasury Services - 6,844,689 w 3,010,027 a li \ -$864,288,303 Net Income before Payment to US. Treasury O N . OF NET Dividen+ Paid $5%,856,388 * L > . I , a $ 14,806,390 $16,384,793 852,190,013 533,630,395 (2,708,100) 46,841,200 I Payments to U.S. Treasury (Inten?st on Federal Resenre Notes) D T r a x @ d to Surplus - e $864,288,303 - T e d Income Distributed - * S u R . P W s ~ m Surplus January 1 Surplus December 31 I - $596,856,388 . - ~~ . $245,507,100 $242,799,000 . - $242,799,000 .I. $289,640,200 checkclearing 1 q.s. Govem!nent checks processed 69,034 Commemal * checksProcessed . 2,890,085 -6.8 2.6 \ ) -1.4 @069 f 3,’000,989 c Electdic Payments A~cOmmercial~Govemment Payments processed WE Transfers of Funds .‘S -. 261,681 9,522 10.7 4.9 307,455 * 9,949 98 48 -14.0 -2.0 ‘98 P h 1,878 16.9 securitiesse&ces 6,954 a v . U.S. Savings Bonds Redeemed 0 50, 4.2 1,187 -5.8 . 56 -9.0 460 -64 -26.8 .42.6 251 - Redeemed . 2.5 5,875 .-15.5 -23s 79 * ‘4 b -OtherTreasury Issues ’Issued -1 c &-Line Bookermy Transfers Noncash Items Processed Definitive %&keeping Receipts U.S. Savings Bonds Issued - 17.5 4.5- -68.5 .. . r w .68 -23.6 49 -27.9 3 -40.9 3 e o c 74? 628,244 -9.9 36.5 - +. v . 738 -1.2 .748.57@ 19.2 . This annual report was prepared by the Public Affairs Department of the Federal Reserve Bank of Atlanta. Design: Carole L. Starkey. .FEDERAL RESERVE B A N K O F ATLA-NTA HeadMFlceaadhta 104 Marietta W e t , N.W. I - . Btrmingham, Alabama 35203-2104 -J- &OO water street ' 6 Miami, Florida 33178-2425 NahvilkBranch 301 Eighth Averme, North Nashville, Tennessee 37203-4407 ~OrleaasBrancb . 525 St, Charles Avmuc New Orleans, Louisiana 70130-3480 printed on recycled paper