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Content last modified 6/05/2009.
CONFIDENTIAL
(FR)
SUPPLEMENT
CURRENT ECONOMIC AND FINANCIAL CONDITIONS
Prepared for the
Federal Open Market Committee
By the Staff
Board of Governors
of the Federal Reserve System
December 11,
1970
SUPPLEMENTAL NOTES
The Domestic Economy
Retail sales.
According to the advance report, sales of all
stores at retail declined half a per cent in November--primarily as a
result of continued weakness in strike-affected automotive sales.
Excluding automotive sales, which were off 5.0 per cent, the level of
sales was up 0.3 per cent from October.
Furniture and appliance sales
and general merchandise were unchanged from October, and sales of the
apparel group were strong for the second month in a row.
Compared
with a year earlier, total sales were up 7.3 per cent, excluding automotive stores; including autos, sales were up 2.9 per cent.
SALES OF RETAIL STORES
Billions of dollars
Per cent change
from previous month
1970
1970
Sept.
Oct.
Nov.
-1.3
-
Sept.
Oct.
Nov.
All stores
30.9
30.5
30.3
Total,
25.2
25.6
25.7
9.6
5.7
1.3
8.9
4.9
1.4
8.7
4.7
1.4
.6
2.4
-3.9
-7.0
-13.1
3.9
21.3
6.9
5.2
21.6
6.9
5.3
21.7
6.9
5.3
.2
.8
1.2
1.3
.2
1.8
excluding auto
Durable goods
Auto
Furniture & appliance
Nondurable
Food
General merchandise
Inventory anticipations.
.3
-
.1
1.4
.5
.3
-2.6
-5.0
0
-
.3
.1
.1
When surveyed in November, manu-
facturers anticipated increasing their rate of inventory growth (book
value) in the fourth quarter of 1970 to an annual rate of $4.8 billion
from $4 billion in the third quarter.
In the first quarter of 1971, a
further increase to an annual rate of $6.4 billion is expected.
The
survey's record of accuracy is spotty, even with respect to the direction of change in inventory accumulation.
Durable goods manufacturers expected some slowdown in the
fourth quarter and then acceleration in the first quarter of 1971 to a
rate higher than any achieved in 1970; "both steel and auto producers
project substantial inventory additions early next year," according to
the report.
Nondurable goods manufacturers anticipated a return from
no change in the third quarter of 1970 to relatively high rates in each
of the next two quarters.
Manufacturers expected sales to dip 1 per cent in the fourth
quarter and to rise 4-1/2 per cent in the first quarter of 1971.
Exclud-
ing motor vehicles, increases of 2 per cent are anticipated for both the
fourth and first quarters.
The Domestic Financial Situation
Money supply growth in November has been revised upward to a
seasonally adjusted annual rate of 4.5 per cent from the estimated 2.8
per cent shown in the Greenbook.
The revision was attributable to a
rise in privately-held demand deposits in late November that exceeded
earlier estimates.
As a result of this increase in demand deposits,
the adjusted credit proxy expanded at a slightly faster rate than previously estimated and is now estimated at a 7.8 per cent annual rate
of growth.
-3-
Mortgage market.
A new departure for Federal agency support
of the residential mortgage market was launched December 10, when the
Federal Home Loan Mortgage Corporation began to operate the first
formal market for participations in conventional first mortgage loans.
FHLMC has asked members of the Federal Home Loan Bank System to submit,
by December 23, offers to sell to FHLMC participating interests of
between 25 and 75 per cent in certain outstanding conventional home
and multifamily mortgages originated during 1970.
The participating
interests are to be evidenced by transferable participation certificates
issued in multiples of $100,000 each against a designated group of
mortgages, to yield FHLMC a fixed 8-1/2 per cent after servicing.
While individual sellers may offer certificates totaling not less than
$500,000 nor more than $5 million, FHLMC has placed no ceiling on the
aggregate amount of certificates it may buy.
At some later date,
FHLMC may resell the certificates, possibly by pooling them and then
issuing pass-through type securities against the pool.
Earlier this
year, FHLMC purchased $315 million in whole FRA and VA mortgages sold
by members of the FHLB System, and in another action entered into
commitments to buy an additional $200 million from them.
Sales of new homes by merchant builders declined in October.
However, the decline, which may have reflected seasonal adjustment
problems, was from an exceptionally high September rate and left the
October level more than three-tenths above a year earlier.
Homes
available for sale rose somewhat, but this reflected mainly an increase
in homes not yet completed.
Median prices of new homes sold, although unchanged in October,
at $22,700, were 7 per cent below a year earlier, owing mainly to the
shift in the mix of sales toward smaller, lower-priced units which has
been a particularly conspicuous feature of developments this year.
Median intended prices of homes available for sale edged off in October,
but remained near earlier highs and some $4,000 above comparable prices
of homes actually sold in that month.
Median prices of existing homes
sold, at $22,740 in October, were 4 per cent above a year earlier and
13 per cent above two years earlier.
While the year-to-year rise
suggested some downshift in the mix of such prices, the two-year rise
was about the same as has prevailed in most other months this year.
-5INTEREST RATES
1970
Highs
Lows
Nov. 16
Dec. 10
Short-Term Rates
Federal funds (weekly averages)
9.39 (2/18)
3-months
7.93 (1/6)
Treasury bills (bid)
8.75 (1/13)
Bankers' acceptances
10.50 (1/9)
Euro-dollars
8.30 (1/9)
Federal agencies
8.25 (2/1)
Finance paper
CD's (prime NYC)
Most often quoted new issue 6.75 (10/30)
9.25 (1/23)
Secondary market
6-month
Treasury bills (bid)
Bankers' acceptances
Commercial paper (4-6 months)
Federal agencies
7.99
8.88
9.13
8.50
(1/5)
(1/13)
(1/8)
(1/28)
4.91 (12/9)
5.80 (11/12)
4.91 (12/
4.80
5.38
6.62
4.97
5.38
5.30
6.00
7.31
5.78 (11/12)
6.25
4.90
5.50
7.29
4.97
5.38
(11/23)
(12/4)
(11/24)
(12/10)
(12/10)
5.00 (11/25) 5.75 (11/12)
5.50 (11/25) 6.35
5.50
5.70
4.92
5.50
5.63
5.13
5.46
6.12e
6.50
6.01 (11/12)
4.94
5.62e
5.75
6.38 (11/12)
6.50
5.62
5.80
(12/4)
(12/4)
(12/4)
(12/10)
5.13
CD's (prime NYC)
9.38 (1/23)
5.50 (12/2)
5.50 (12/2)
Treasury bills (bid)
7.62 (1/30)
4.78 (11/23) 5.38
4.91
CD's (prime NYC)
Most often quoted new issue
Prime municipals
7.50 (9/16)
5.50 (11/25) 6.38 (11/12)
2.95 (11/27) 3.10
5.62
5.60 (1/9)
Treasury coupon issues
5-years
20-years
8.30 (1/7)
7.73 (5/26)
5.85 (12/4)
6.16 (12/4)
6.63
6.68
5.95
6.25
Corporate
Seasoned Aaa
Baa
8.60 (6/24)
9.47 (8/28)
7.77 (12/10) 8.05
8.57 (3/10) 9.39
7.77
9.23
New Issue Aaa
9.30 (6/19)
7.74 (12/10) 8.40 (11/12)
7.74
Municipal
Bond Buyer Index
Moody's Aaa
7.12 (5/28)
6.95 (6/18)
5.33 (12/10) 6.12 (11/12)
5.15 (12/10) 5.95 (11/12)
5.33
5.15
Mortgage--implicit yield
in FNMA biweekly auction 1/
9.36 (1/2)
8.54 (12/7)
8.54 (12/
Most often quoted new issue
Secondary market
7.00 (10/7)
1-year
3.00
Intermediate and Long-term
1/
8.93 (11/2)
Yield on 6-month forward commitment after allowance for commitment fee and
required purchase and holding of FNMA stock
stock. Assumes discount on 30-year
loan amortized over 15 years.
e--estimated.
,
International developments
The following notes on changes in liabilities of U.S. banks
to their foreign branches amplify and supplement the account given on
page IV-5 of the Greenbook.
On Wednesday, November 25, liabilities to
branches totaled $8.8 billion (on the basis the staff generally uses in
reporting the Wednesday figures).
This was about $850 million below
the amount on October 28, four weeks earlier, $1.7 billion below the
average of 5 Wednesdays in September, and $3.5 billion below the average
of 4 Wednesdays in June.
From Wednesday,November 25 to Monday,November
30, there was a further reduction of over $600 million (partly estimated,
using daily data).
Much of this month-end drop should be viewed as a
fairly normal reflection of end-of-November conditions in European money
markets.
The Board's action on Regulation M was announced late in the
day on November 30.
In the next two days there was a substantial rise
in liabilities to branches.
While Eurodollar deposits of more than
overnight maturity are normally not settled until two days after the
contract, the increase in liabilities to branches from November 30 to
December 2 could have been affected by branch takings of overnight money
arranged in the first two days after the Board's announcement.
However,
it is reasonable to suppose that a considerable part of the rise of
about $500 million in liabilities from November 30 to Wednesday,December 2
was a normal reversal of a normal month-end drop.
In the following week, to Wednesday,December 9, there was
little net change.
This is contrary to the information that was available
in time for the Greenbook, which showed a substantial net increase in
liabilities to branches through Monday.
The daily data during the week
exhibited very large fluctuations, with liabilities rising or falling
by $200-400 million most days.
At the close of business on Wednesday,
December 9, liabilities to branches were virtually unchanged from a week
earlier, according to the preliminary indications given by the daily
data (which do not have complete coverage).
Three points are of interest.
(I) In the first week after
the month-end dip and recovery, which is also approximately the first
week in which the Board's action might have had an effect, there was a
cessation of the decline in U.S. banks' liabilities to their foreign
branches which had been going on pretty continuously since midyear.
This is not the first time that the decline has stopped for a week or
two, but this time the interest rate relationships have been highly
unfavorable for borrowing Eurodollars.
(2) The average level of borrowings through the first half of
the current reserve computation period now appears to be some half
billion dollars or more below the daily average in the preceding computation period (which ended November 25).
This is the result of the decline
through all the latter half of November, which was only partly offset by
the post-month-end recovery and bulge.
Between now and December 23 (the
end of the current period) the banks are likely to find rate relationships very unfavorable for an attempt to avoid new losses of historical
reserve-free bases.
(3) Different banks have been acting differently.
increased their borrowings since December 2.
Some have
On the other hand, one or
two banks that had previously given up substantial parts of their May
1969 bases have continued to reduce their borrowings.
The National Bank of Belgium reduced its discount rate
effective December 10 from 7 to 6-1/2 per cent.
Other discount rate
reductions since the November 13 Greenbook Supplement include two
changes in Germany, which are referred to on page IV-1 of this week's
Greenbook.
The first of these, from 7 to 6-1/2 per cent, took effect
November 18; the second was to 6 per cent, effective December 3.
The
Bundesbank's rate on advances ("Lombard rate") went from 9 to 8 to 7-1/2
per cent.
Corrections
Section III, page 6, beginning paragraph 2, all of page III-7
and III-8 should be shifted to follow III-16.
Section II, page 2 table, the figure in the first line, GNP,
second column, current projection, should be $5.4 billion instead of
$1.4.
Section II, page 8 GNP table.
tion were left out.
1970
proj.
3.0
19711970
pr.
pro.
pro.
0.8
Changes in Industrial produc-
Theyshould be:
I
-3.1
971
Projection
II
III
IV
-13.1
11.1
2.4
2.9
IV
5.7
Section II,
page 27, Table Wholesale Prices.
Please substitute
the following correctedtable.
WHOLESALE PRICES
(Seasonally adjusted percentage changes at annual rates)
Dec 1969
to
Mar 1970
All commodities
Farm and food products
Farm products
Processed foods & feeds
Industrial commodities
Selected groups
Fuels and related
products and power
Metals and metal products
Nonferrous metals 1/
Machinery and equipment
Finished goods
Producer finished goods
Consumer nonfoods
Nondurables
Durables
1/ Not seasonally adjusted.
Mar 1970
to
June 1970
June 1970
to
Sept 1970
Sept 1970
to
Oct 1970
Oct 1970
to
Nov 1970
4.0
6.8
5.0
8.7
1.1
-9.9
-14.9
6.2
3.9
8.9
12.2
5.6
2.5
-14.7
-28.5
-1.9
-1.1
-4.1
-17.1
3.9
3.1
4.5
2.9
7.8
0.0
.8
9.0
9.1
4.0
6.5
8.9
4.2
4.1
11.3
-1.0
-16.0
5.2
20.1
4.0
-7.0
5.9
12.4
-10.0
-23.1
2.4
4.3
2.2
2.1
3.0
2.9
2.9
3.0
2.4
4,8
3.3
3.5
3.1
12.1
11.5
4.4
22.7
2.4
2.1
3.1
3.4
SUPPLEMENTAL APPENDIX A:
SURVEY OF BANK LENDING PRACTICES*
Participants in the November 15, 1970, Survey of Bank Lending
Practices indicated a substantial shift in policy from the time of the
previous survey. With loans demands weakening and funds more readily
available, banks generally eased the terms and conditions on loans
and were particularly willing to lend to customers which had been
screened heavily during the past two years. Banks also indicated increased willingness to make selected major types of loans, including
term loans to businesses and mortgage loans.
Loan Demand
Banks reported that the demand for business loans generally
weakened during the three months ending November 15, 1970. A full
three-fifths of the respondents indicated slackened loan demand while
little more than one-third reported essentially unchanged demand.
Moreover, a sizable number of banks expected business loan demands to
weaken further during the next three months. These results represent
a clear break from the previous survey when participants reported
strengthening loan demands and an expectation of continuing strength;
however, the earlier survey was taken as of August 15 when financial
markets were still reacting to the Penn Central insolvency, and this
could have masked the underlying weakness in loan demands.
Terms and Conditions on Lending to Nonfinancial Businesses
A large majority of banks (nearly three-fourths of the
respondents) reported an easing of interest rates over the three-month
period, which was a reflection of the declines in the prime rate in
September and early November. Moreover, a third to a half of the
respondents reported easier policies in reviewing lines of credit for
both new and established customers and for local customers generally.
On the other hand, few banks reduced their compensating balance
requirements, and standards of credit worthiness applied to loan applicants were stiffened somewhat at a significant minority of banks. This
change presumably reflected increased quality consciousness in light of
the well-known difficulties of some larger business firms during the
summer and probably a concern over a possible rise in classified loans.
The easing reported in the November survey represents a
marked reversal in the trend of lending policy developments that had
prevailed over the preceding seven survey periods. During that time,
the lending posture of banks, in most respects, had remained restrictive,
as shown in Table 2A. In November, however, the net responses of
participants indicate a substantial shift toward ease, particularly in
interest rates and in reviewing credit lines. Moreover, the intended
use of the loan was receiving less scrutiny than had been the case earlier.
* -
Prepared by James Kichline, Economist, Banking Section, Division
of Research and Statistics.
SA - 2
Lending to Noncaptive Finance Companies
The easier lending posture of banks in regard to nonfinancial
business loans was carried over only in part to finance company loans.
While banks generally reduced the interest rates charged on finance
company loans, only 17 per cent of respondents indicated an easier
policy in establishing new or larger credit lines. Furthermore, compensating or supporting balance requirements and the endorsement of
such balances were stiffened on balance in the case of finance companies.
Willingness to Make Other Loans
The extent of the shift to an easier policy is indicated by
a considerable increase in bank willingness to make selected major types
of loans. Term loans to business were being considered more favorably
by thirty per cent of the banks in the survey, with an insignificant
number of banks less willing to make such loans. Banks also reported
a distinct trend toward increased willingness to extend mortgage
loans--single-family, multi-family, and other types of mortgage loans.
Variation by Size of Bank
There were relatively few differences in survey responses
among banks with $1 billion in deposits or more compared with smaller
banks. However, those banks that reported an increase in loan demand
over the past three months, or an expectation of stronger loan demand
in the forthcoming three months, were generally the smaller banks. The
smaller banks when reviewing credit lines also appeared to place a
greater priority on factors relating to the applicant--value as a depositor, for example--than did larger banks.
Those respondents who offered supplementary comments reported
their policy changes were directly related to reduced loan demands and
an increased availability of funds, as would be expected. Several banks
indicated specifically their concern about credit quality. A few banks
noted that the shift to an easier policy would now permit the extension
of credit for certain types of loans they had not made for some time,
such as loans for acquisition purposes.
TABLE 2A
NET RESPONSES OF BANKS IN LENDING PRACTICES SURVEYS
(In per cent)
Nov.
Feb.
1969
May
1969
J1969
Aug.
Nov.
1969
Feb.
1970
May
1970
Aug.
1970
25.6
54.4
60.0
30.6
28.0
-1.6
12.1
16.0
20.8
49.2
41.8
5.7
8.9
-8.0
11.2
13.6 -32.0
86.2
64.3
32.8
30.3
91.0
75.6
41.4
42.3
78.3
68.3
40.6
42.2
49.6
57.6
36.0
35.2
34.4
38.4
-12.8
22.4
17.6
-1.6
6.4
-4.1
15.4
32.5
61.7
30.9
47.2
80.2
46.7
'71.3
36.8
160.8
32.0
56.5
18.4
49.5
51.6
81.4
48.8
68.8
16.0
6.4
58.6
67.2
71.6
165.0
168.5
46.0
39.2
-26.4
2.4
3.2
4.8
53.3
22.9
29.5
54.9
50.8 i48.0
27.9 135.0
42.6 42.3
62.4 i 62.0
19.3
26.7
34.7
48.4
-0.8
48.8
4.2
30.8
40.1
42.5
64.3
17.2
45.5
57.5
62.0
65.9
26.9
49.7
58.3
62.5
48.0
24.2
30.4
36.3
42.3
21.6
17.7
19.7
22.2
12.8
-4.1
-8.2
3.4
9.9
18.7
34.2
38.4
40.0
48.4
59.3
31.5
36.1
10.6
20.5
5.6
20.3
______1968
!
Strength of loan demand(compared to 3 months ago)
Anticipated demand in next 3 months
Nov.
1970
-56.8
LENDING TO NONFINANCIAL BUSINESSES2/
Terms and Conditions
Interest rates charged
Compensating or supporting balances
Standards of credit worthiness
Maturity of term loans
r27.2
10.4
4.8
1.6
20.8
10.4
15.2
24.8
22.4
14.4
-73.6
-0.8
4.8
-7.2
5.6
17.6
5.6
22.6
1.6
6.4
-3.2
16.1
-32.0
-40.8
-33.6
-16.8
29.9
21.6
18.5
18.51
12.0
9.6
14.5
-16.0
6.4
16.0
21.6
18.4
Reviewing Credit Lines
Established customers
New customers
Local service area customers
Nonlocal service area customers
34.4
14.4
31.4
Factors Relating to Applicant
(Net percentage indicating
more important)
Value of depositor as source of
Business
-ended
use of loan
54.5
-9.6
2/
2
LENDING TO NONCAPTIVE FINANCE COMPANIESTerms and Conditions
Interest rates charged
Compensating or supporting balances
Enforcement of balance requirements
Establishing new or larger credit lines
21.7
30.7
32.2
9.7
-41.6
1.6
23.41 6.4
22.6 -10.4
12.1:
WILLINGNESS TO MAKE OTHER LOANS-3
Term loans to businesses
Consumer instalment loans
Single-family mortgage loans
Multi-family mortgage loans
All other mortgage loans
Participation loans with correspondent banks
Loans to brokers
15.3
-3.3
4.1
1.7
21.8
8.8
-28.8
-11.6
-25.6
-12.4
-15.4
-- I -24.2
5.0
-2.4
10.6
-9.6
-0.9
1/ Per cent of banks reporting stronger loan demand minus per cent of banks reporting
weaker loan demand. Positive number indicates net stronger loan demand, negative number
indicates net weaker loan demand.
2/ Per cent of banks reporting firmer lending policies minus per cent of banks reporting
weaker lending policies. Positive number indicates net firmer lending policies, negative
indicates net easier lending policies.
3/ Per cent of banks reporting less willingness to make loans minus per cent of banks more
ling to make loans.
Positive number indicates less willingness, negative number indicates
more willingness.
NOT FOR QUOTATION
OR PUBLICATION
TABLE
PAGE 11
1
QUARTERLY SURVEY OF CHANGES IN BANK LENDING PRACTICES
T
HE U.S.
1/
AT SELECTED LARGE BANKS IN
COMPARED TO THREE MONTHS
NOVEMBER 15, 1970
OF POLICY ON
(NUMBER OF BANKS & PERCENT OF TOTAL BANKS REPORTING)
(STATUS
MUCH
STRONGER
TOTAL
BANKS
pCT
BANKS
PCT
ESSENTIALLY
SNCHANG O)
MODERATeLY
WEAKEP
PCT
BANKS
BANKS
MODERATFLY
STRONGER
BANKS
EARLIER)
PCT
PCT
MUCH
WEIKER
B NKS
PCT
STRENGTH OF DEMAND FOR COMMERCIAL AND
INDUSTRIAL LOANS (AFTER
ALLOWANCE FOR
BANK'S USUAL SEASONAL VARIATION)
COMPARED
125
ANTICIPATED DEMAND IN NEXT 3
MONTHS
100.0
4
3.2
46
36.8
12
57.6
3
2.4
125
TO THREE MONTHS AGO
100.0
15
12.0
55
44.0
54
43.2
1
3.8
MUCH
FIPMER
POLICY
ANSWERING
QUESTION
BANKS
LENDING TO NONFINANCIAL
PCT
BANKS
PCT
MODFRATELY
FIRMER
PCLI Y
BANKS
PCT
ESSENTIALLY
UNCHANGED
P3LICV
MODEATELY
EASTER
(OLI:Y
BANKS
BANKS
PCT
PCT
BUSINESSES
TERMS AND CONDITIONS:
INTEREST RATES
COMPENSATING
CHARGEC
OR SUPPORTING
24.8
1 0O 0
100.0
BALANCES
92.9
67.?
ST NCARCS OF CREDIT WORTHINESS
MATURITY
REVIEWING
OF
TERM LOANS
CREDIT LINES OR LOAN
84 .8
100.0
APPLICATIONS
ESTABLISHED CUSTOMERS
2
100.0
1.6
NEW CUSTOMERS
100.0
B
6.4
LOCAL
100 .0
1
0.8
1 00.0
6
4.E
SERVICE AREA CUSTOMERS
NONLOCAL
1/
SURVEY
AS OF
SERVICE
AR EA CUSTOMERS
CF LENDING PRACTICES
NOVEMBER 15, 1970.
AT 125
LARGE BANKS
REPORTING
IN
THE
FEDERAL
RESERVE
QUARTERLY
I trFRFST
ATF
S (H VEY
MUCH
FA<IFR
POL I CY
BANKS
PCT
NCT FOR QUOTATION
OR
PUBLICATION
TABLE I
ANSWERING
QUESTION
BANKS
FACTORS
RELATING
TO
APPLICANT
PCT
MUCH
FIRMER
POLICY
BANKS
PAGF 3?
IKTINJED)
(CO
MODERATELY
FIRMER
POLICY
ESSENTIALLY
UNCHANGED
POLICY
PCT
ANKS
PCT
ANKS
PTT
MnOFRA TFrY
FASIER
POLICY
PCT
RANKS
124
100.0
2
1.6
5
4.0
110
R8.8
7
INTENDED USE
125
100.0
1
0.8
3
2.4
105
84.0
125
100.0
0
0.0
4
3.2
65
125
100.0
1
0.8
3
2.4
125
100.0
1
0.8
7
125
100.0
3
2.4
5
LENDING TO
THE LOAN
"NONCAPTIVE"
BANKS
PCT
2/
VALUE AS DEPOSITOR OR
SOURCE OF COLLATERAL BUSINESS
OF
MUC
EASIER
POLICY
FINANCE
5.6
0
0.0
16.
12.8
0
".0
52.0
51
40.8
5
4.0
119
95.2
2
1,6
0
0.3
5.6
117
93.6
0
0.0
0
0.0
4.0
96
76.8
21
16.8
0
0.0
COMPANIES
TERMS AND CONDITIONS:
INTEREST
RATES CHARGED
COMPENSATING OR
ENFCRCEMENT
OF
ESTABLISHING
SUPPORTING
BALANCES
BALANCE REQUIREMENTS
NEW OR LARGER CREDIT LINES
ANSWERING
QUESTION
BANKS
WILLINGNESS
TERM
TO MAKE
LOANS
CONSUMER
SINGLE
PCT
CONSIDERABLY
LESS
WILLING
BANKS
PCT
MODERATELY
LESS
KILL ING
ESSENTIALLY
UNCHANl GE
MODERATFLY
MORE
WILLI N
BANKS
RANKS
BANKS
PCT
PCT
P.T
CONS IOERS LY
MORE
WILLING
BANKS
PCT
OTHER TYPES OF LOANS
TO BUSINESSES
INSTALMENT
LOANS
FAMILY MORTGAGE
LOANS
125
100.0
0
0.0
2
1.6
85
68.0
38
30.4
0
0.
124
100.0
0
0.0
2
1.6
90
72.6
20
22.6
4
3.7
0.0
88
72.8
31
25.6
1
1.9
121
100.0
1
3.8
0
MULTI-FAMILY MORTGAGE LOANS
121
100.0
1
0.8
0
0.0
104
86.0
16
13.2
0
0.0
ALL OTHER
123
100.0
1
0.8
0
D .0
102
83.0
19
15.
1
0.
125
100.0
2
1.6
2
1.6
105
I4.0
16
12.3
"
.O
124
100.0
1
0.8
6
4.
109
97.
6.5
r
.0
MORTGAGE
PARTICIPATION
CORRESPONDENT
LOANS
2/
LOANS
BANKS
TC BROKERS
LOANS
WITH
FOR THESE FACTORS,
FIRMER MEANS THE FACTORS WERE CONSIDERED MORE
CREDIT REQUESTS, AND EASIER MEANS THEY WERE LESS IMPORTANT.
IMPORTANT
S3
IN MAKING DECISIONS FOR APPROVING
NOT FOR QUOTATION
PAGE
2
TABLE
OR PUBLICATION
OF QUARTERLY CHANGES IN BANK LENDING PRACTICES AT BANKS GROUPED BY SIZF 3F T-TAL
NOVEMBER 15, 1970, COMPARED TC THREE MONTHS EARLIER)
(STATUS OF POLICY ON
[NUMBER OF BANKS IN EACH COLUMN AS PER CENT OF TOTAL BANKS ANSWERING QUESTION)
COMPARISON
SIZE
TOTAL
$1 &
OVER
UNDER
$s
OF
BANK
$1 E
OVER
--
TOTAL
DEPOSITS
UNDER
$1
ESSENTIALLY
UNCHAN GEF
$1 r
OVER
OVER
UNDER
t5
I/
IN BILLIONS
MODERATELY
STRONGER
MUCH
STRONGER
DEPDSITS
3
LNDER
MnOERATELY
WEAKER
$i
OVER
UNDER
OVER
MUCH
WEAKFR
$1 E
UNDER
l$1
STRENGTH OF DEMAND FOR COMMERCIAL AND
INDUSTRIAL LOANS (AFTER ALLOWANCE FOR
BANK'S USUAL SEASONAL VARIATIONI
COMPARED
TO THREE MONTHS
ANTICIPATED DEMAND
AGO
100
100
0
0
0
5
24
45
72
49
4
1
100
NEXT 3 MONTHS
IN
100
0
0
6
15
47
43
47
41
0
1
TOTAL
$I E
OVE R
LENDING TO
NONFINANCIAL
UNDER
t
MODERATELY
FIRMER
MUCH
FIRMER
$1 &
OVER
UNDER
s$
ESSENTIALLY
UNCHANG ED
MODERATELY
WEAKER
tI F
OER
$t1
OVER
$1 &
OVER
UNDER
1
UNDER
$1
UNDER
t1
MUCH
WFAKER
$1 6
OVER
UNDER
s1
BUSINESSES
TERMS AND CONDITIONS:
INTEREST RATES CHARGED
100
100
0
0
2
0
28
64
73
COMPENSATING
100
100
3
0
2
4
92
93
6
100
100
0
0
6
10
90
96
4
100
100
2
0
0
5
94
90
OR
SUPPORTING BALANCES
STANDARDS OF CREDIT
MATURITY
REVIEWING
OF TERM
WORTHINESS
LOANS
CREDIT LINES
ESTABLISHED
OR
23
6
4
3
0
0
4
0
0
4
15
0
0
32
4
0
LOAN APPLICATIONS
100
100
0
0
0
3
64
65
32
NEW CUSTOMERS
100
100
0
0
2
9
4?
48
43
40
13
3
LOCAL
100
100
0
0
0
1
58
70
6
21
6
1
100
100
0
0
2
6
64
BO
30
14
4
0
SERVICE AREA CUSTOMERS
NONLOCIL
I/
CUSTOMERS
SERVICE
AREA CUSTOMERS
SURVEY OF LENDING PRACTICES AT
47 LARGE BANKS (DEPOSITS OF $1 BILL 19 OP MOPE) AND
78 SMALL
IANKS (DnFPSITS
SI BILLION) REPORTING IN THE FEDERAL RESERVE QUARTERLY INTEREST RATE SURVEY AS OF
NOVEMRER 15,
197".
OF
LFSS THAN
NOT
TABLE
OR PUBLICATION
FOR QUOTATION
SIZE
OF BANK
MUCH
FIRMER
POLICY
NUMBER
ANSHE RI NG
QUESTI ON
$1 &
OVER
FACTORS
UNDER
51
PAGE 04
2 (CONTINUED
$1 E
OVER
UNDER
$1
TOTAL DEPOSITS IN BILLION S
MODERATELY
MODERATELY
FSSENTIALLY
FIRMER
UNCHAN GED
EASIER
POL ICY
POLICY
POLICY
$1 &
OVER
UNDER
$1
$1 A
OVER
$1 £
OVEP
UNOER
$l
UNDER
$1
E
$t
OVER
UNDER
t$
RELATING TO APPLICANT 2/
VALUE AS DEPOSITOR OR
SOURCE OF COLLATERAL BUSINESS
100
100
100
10C
100
0
0
41
SUPPORTING BALANCES
100
100
1
0
0
BALANCE REQUIREMENTS
100
100
1
2
0
100
100
3
2
10
USE OF THE LOAN
INTENDED
TERMS AND
6
100
LENDING TO "NONCAPTIVE"
13
FINANCE COMPANIES
CONDITIONS:
INTEREST RATES CHARGED
COMPENSATING OR
ENFORCEMENT OF
ESTABLISHING
NEW OR LARGER CREDIT LINES
NUMBER
ANSWERING
QUESTI ON
$1 &
OVER
WILLINGNESS TO MAKE OTHER
UNDER
$l
CONSIDOERABLY
LESS
WILLING
$1 C
OVER
UNDER
$1
MODERATELY
LESS
wILLING
$1 t
OVER
ESSNFT
r
MODERATEL Y
AfORF
WILLING
LL Y
UNCHANGED
UNDER
I1
1 E
OVER
UNDER
$1
$1 &
OVER
UN DOE
51
C3OSTDERABLY
MORE
WILLING
$IE
OVER
UNDER
t$
TYPES OF LOANS
TERM LOANS TO BUSINESSES
2
1
66
T7
32
29
CONSUMER
0
3
79
6B
17
26
0
0
68
76
30
23
0
0
84
87
16
12
O
0O
81
17
.4
SINGLE
INSTALMENT LOANS
FAMILY MORTGAGE LOANS
MULTI-FAMILY
ALL OTHER
MORTGAGE
MORTGAGE
LOANS
LOANS
PARTICIPATION LOANS WITH
CORRESPONDENT BANKS
LOANS
2/
MUC-I
EASIER
TC BROKERS
P
100
100
4
0
0
13
13
100
100
2
0
9
6
6
FOR THESE FACTORS,
FIRMER MEANS THE FACTORS
CREDIT REQUESTS, AND EASIER MEANS THEY WERE
WERE CONSIDERED
LESS IMPORTANT.
MORE
IMPORTANT
IN MAKING
DECISIONS
0
FOR A PROVING
0
0
@FedFRASER