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CONFIDENTIAL (FR)

December 16, 1977

CLASS II - FOMC

SUPPLEMENT
CURRENT ECONOMIC AND FINANCIAL CONDITIONS

Prepared for the
Federal Open Market Committee

By the Staff
Board of Governors
of the Federal Reserve System

TABLE OF COTE-TNTS

THE DOMESTIC UOfTINANCIAL ECONC4!Y
Auto sales ....................................................
Business inventories ..........................................

Page
1
1

TABLES:
Business inventories .........................................

Inventory ratios ........................................
THE DOMESTIC FINAICIAL ECO1,OMY
TABLE:
Interest rates..................................................

6

INTERNATIONAL DEVELOPETS

German monetary policy and capital control measures ............

3

APPENDICES
Bank Credit Revision
Changes in Bank Lending Practices

A-i
B-1

SUPPLEMENTAL NOTES
The Domestic Nonfincial
Auto sales.

Economy
Sales of new domestic-model autos in the

first ten days of December were at an 8.6 million unit annual rate.
This is up from the November rate of 8.3 million per year but still
below the 8.9 million rate in the third quarter.
Business inventories.

The book value of manufacturing and

trade inventories increased at a $14.3 billion annual rate in October (p),
off sharply from the $31.9 billion rate now indicated for September
and the $26.4 billion rate during the third quarter as a whole.
(Revised figures for trade establishments for September have lifted
these gains from the $22.9 billion annual rate and $23.4 billion rate
gains indicated by the preliminary estimates for September and the
third quarter, respectively.)

The overall inventory-sales ratio for

all manufacturing and trade in October edged down to 1.46 from 1.47
in September.
The book value of inventories held by retail and wholesale
trade establishments in October increased at a $6.3 billion annual
rate with somewhat more than half at merchant wholesalers handling
durable goods.

This moderate October buildup followed a $19.2 billion

rate rise in September when about two thirds of the advance was in
stocks of wholesalers.

Stocks of retail stores have increased

only modestly compared with gains at both manufacturing and
wholesale trade.

-2-

BUSINESS INVENTORIES
(Change at annual rates in seasonally
adjusted book values billions of dollars)

1976

Manufacturing and trade
Manufacturing
Durable
Nondurable
Trade, total
Wholesale
Retail
Auto

1977

0111

Sept. Oct.(p)

32.1
17.8
10.9
6.8

26.4
9.4
5.5
3.9

31.9
12.7
4.0
8.7

14.3
8.0
3.5
4.5

14.3
2.6
11.8
2.4

17.1
4.7
12.4
1.3

19.2
12.3
6.9
-7.1

6.3
3.5
2.8
2.1

QIV

QII QIII
33.8
14.2
6.8
7.5

29.5
15.4
6.7
8.6

19.6
11.6
8.0
.1

14.1
4.1
10.1
4.8

11.4 34.2
6.5 11.2
6.4
7.8
.0 3.3
4.9
3.5
1.5
1.3

23.0
12.0
11.1
2.2

INVENTORY RATIOS
1976
o0III
OTV
Inventory to sales:
Manufacturing and trade
Manufacturing
Durable
Nondurable
Trade, total

Wholesale
Retail
Inventories to unfilled orders:
Durable manufacturing

QI

olI

1.49
1.66
2.04
1.25

1.46

1.46

1.58
1.94
1.20

1.58

1.34
1.24

1.47

1.34
1.24
1.42

1.43

1.21
1.45

.640

.632

.635

.631

1.51
1.67
2.04

1.27
1.36
1.24

1977
_IIll..SmDt.

Qct.(p

1.94

1.48
1.59
1.93

1.47
1.57
1.91

1.46
1.57
1.90

1.20

1.22

1.21

1.21

1.34

1.37
1.23

1.37

1.35
1.24

1.48

1.24
1.48

.640

.640

1.44
.629

-3-

The Domestic Financial Economy

No textual addendums to the Greenbook were required,
the usual updating of interest rate developments is

but

contained in

the

table on page 6.

International Developments
German monetary policy and capital control measures.
On December 15, the Bundesbank announced its monetary growth target for
1978, reductions in its discount and Lombard rates, and several measures
restricting inflows of foreign capital to Germany.

1/

The target growth rate for central bank money1/
1978 is 8 per cent, in annual average terms.

(CBM)

for

This is the fourth

successive year the Bundesbank has announced an 8 per cent CBM growth
target (and for the last three the target has been stated in terms
of annual average growth).

The 8 per cent target for 1978 is higher

than the figure recommended by the government's council of economic experts
(6-7 per cent).
Actual CBM growth has exceeded the 8 per cent target rate
in each of the three years a target has been in effect:

by 1.6 per

cent in 1975, 1.2 per cent in 1976, and a projected 1 per cent in
1977.

For 1977 the Bundesbank also announced an additional guideline,

that between the fourth quarter of 1976 and the fourth quarter of 1977,
CBM should not grow by more than 6-7 per cent.

1/

The projected growth

Central bank money in Germany is defined as currency in circulation
plus minimum reserves (at January 1974 reserve ratios) on banks' domestic
liabilities.

-4rate for the fourth quarter of 1977 over a year earlier is 9.5
per cent.
Effective December 16, the German discount and Lombard rates
are cut by 1/2 percentage point each, to 3 and 3.5 per cent, respectively.
This is the first change in the discount rate since September, 1975, when

it was reduced from 4 to 3.5 per cent.

It is reported that the

rate cuts, in conjunction with the capital controls announced December 15,
are meant to help moderate the upward pressure on the Deutsche mark
exchange rate.
The measures restricting foreign capital inflows announced
December 15 constitute a reimposition of several of the capital
controls removed in 1974 and 1975.

Reserve ratios on banks' foreign

liabilities, which are currently the same as those on domestic
liabilities, are to be raised effective

January 1 (with the reserve

ratio for sight deposits rising from 12.75 to 20 per cent,
ratios for less liquid deposits rising by smaller amounts).
special 100 per cent minimum reserve requirement is
also effective

and the
A

to be imposed,

January 1, on the growth of banks' foreign liabilities

(growth will be measured against the average level of foreign liabilities from September 16 to December 15,

1977).

Effective immediately,

the Bundesbank will refuse permission for foreign purchases of German
securities with maturities of two to four years.
Higher reserve ratios for foreign bank deposits than for
domestic deposits were last in effect from June 1, 1971, to August 1,
1975.

A special reserve requirement on the growth of foreign liabili-

-5ties was last in effect from April 1, 1970, to January 1, 1974.

Foreign

purchases of German bonds were not permitted by the Bundesbank from
June 29, 1972, to August 19, 1975.

-- 6-INTEREST RATES
(One day quotes--in per cent)

1977
Highs

1977
Lows

Nov.

14

Dec.

15

Short-Term Rates
Federal funds (Wkly avg.)

6.58(11/9)

4.47(1/5)

6.42(11/16)

6.49(12/14

4.39(4/28)
4.63(1/10)
4.66(1/3)

6.09

4.88(1/5)

6.56
6.58
7.06

6.01
6.63
6.55

Euro-dollars

6.36(10/13)
6.63(12/15)
6.73(11/3)
7.44(10/13)

CD's (NYC) 90 days
Most often quoted new

6.70(12/14)

4.50(1/5)

6.60(11/9)

6.70(12/14

6.55(10/13)
6.75(10/18)

4.54(1/3)
4.63(1/7)

6.39
6.59

6.36
6.64

6.92(11/9)

4.65(1/5)

6.92(11/9)

6.85(12/1

6.64(10/13)

4.66(1/3)

6.50

6.48

7.08(12/14)

5.00(1/5)

7.00(11/9)

3.65(10/14)

2.65(1/7)

3.55(11/10)

7.08(12/14
3.60(12/16

7.34(11/2)

5.73(1/3)
6.50(1/3)

7.18
7.38
7.72

7.27
7.57
7.86

8.08
8.96

8.37(12/16)

7.87(1/5)
8.77(9/9)
7.90(1/5)
7.95(1/5)

8.92(11/11)
8.26(11/11)

8.19(12/1'
8.97(12/11
8.36p(12/1
8.37p(12/2

Municipal
Bond Buyer Index

5.93(2/2)

5.45(11/17)

5.51(11/10)

5.55

Mortgage--average yields in
FNMA auction

8.89(12/12)

8.46(1/12)

8.86

8.89(12/12

3-month
Treasury bills (bid)
Comm. paper (90-119 days)
Bankers' acceptances

7.13

6-month

Treasury bills (bid)
Comm. paper (4-6 mos.)
CD's (NYC) 180 days
Most often quoted new
1-year
Treasury bills (bid)

CD's (NYC)
Most often quoted new
Prime municipal note
Intermediate- and Long-Term
Treasury (constant maturity)
3-year
7-year
20-year
Corporate
Seasoned Aaa
Baa
Aaa Utility New Issue
Recently Offered

7.58(11/1)
7.86(12/15)
8.19(12/14)
9.18(2/25)
8.36(12/16)

7.20(1/3)

A-1

APPENDIX A*
BANK CREDIT REVISION
The commercial bank credit figures used in this month's analysis
of financial developments reflect revisions based on the June 30, 1977,
Call Report. This appendix explains the effects of these revisions on
previous estimates of loans and investments.
June Call Report data indicated that growth in commercial bank
credit was somewhat larger over the first half of 1977 than the previous
partially estimated data had indicated. The seasonally adjusted annual
rate of growth in total loans and investments over that period was 1.3

percentage points higher than estimated--11.8 per cent after revision
compared with 10.5 per cent before revision as shown in Table I. The
new higher level for total bank credit reflected an upward revision in
loans, offset in part by small downward revisions in holdings of U.S.
Treasury securities and other securities.
The level of the total bank credit series was raised $5.0 billion
as of June 1977, and the level of the total loan series was raised by
$5.4 billion as shown in Table II. The revisions in total loans and in
total investments were considerably smaller on the June 1977 Call date

than on either of the two Calls in 1976, but were somewhat larger than
the average revision of the 1974 and 1975 Calls. For loans, however, the
smaller revision in 1977 was due in large part to offsetting errors in
estimated components. Levels of U.S. Treasury securities and "other
securities" were lowered by $0.1 billion and $0.3 billion, respectivelyconsiderably less than the average revisions of other recent years.
Revisions in the original monthly estimates reflect three
sources of error, as discussed below.
1. Nonmember bank credit estimates. Data from the June Call
Report suggest that total credit at nonmember banks (including loans to
domestic commercial banks) increased between December 31, 1976 and June 29,

1977 by $8.7 billion more than previously estimated.1/

Loans were

*Prepared by Mary Jane Harrington, Economist, and Edward R. Fry, Senior
Economist, Banking Section, Division of Research and Statistics.
1/ Initial estimates for nonmember banks are for the last-Wednesday of
each month. These estimates are based on data reported weekly by

the smaller member banks, using ratios derived from Call Reports
that relate nonmember amounts to the amounts reported by smaller
member banks. Previous estimates reflected Call Report relationships
as of December 31, 1976.

Data for member banks are reported weekly.

A-2
$3.1 billion higher. By historical standards, these revisions are very
large (only those for June 1976 were larger) and they indicate comparatively much stronger growth at nonmember banks than might be suggested
by their share of outstanding bank credit in December 1976. Estimates of
U.S. Treasury security holdings were raised $0.5 billion while those for
"other securities" were unchanged. Nonmember estimates were revised
for earlier months back through January 1977-i.e., to the previous Call
Report benchmark.
Also, the revised levels were carried forward from
June 1977 into the current monthly estimates.
Revisions of levels for
recent months, however, had little effect on changes in bank credit for
those months.
2. Estimates of domestic interbank loans. The bank credit
series measures credit extended to the nonbank public and thus excludes
loans to domestic commercial banks. Such interbank loans, including
Federal funds transactions as well as other loans to banks, are estimated
on the basis of data reported each Wednesday by member banks. Nonmember
estimates rely on data reported by small member banks and Call Report
ratios of nonmember to small member interbank loans. Based on the June
1977 Call, the total interbank loan estimate was raised $3.4 billion,
the largest revision that has occurred in this series. Interbank loans
at small member banks declined substantially between December 31, 1976,
and June 30, 1977, and those at insured nonmember banks also declined
somewhat. However, loans at noninsured banks grew relatively rapidly.
The latter growth reflected in large part expansion in loans at U.S.
branches of foreign commercial banks. On balance, these diverse changes
resulted in an increase in the ratio of interbank loans at nonmember banks
to those at small member banks from 107 per cent in December to 143 per
cent in June, a new high. While this ratio is extremely volatile,
estimates since June assume that nonmember interbank loans will continue
high. In the third quarter, reports of U.S. branches of foreign banks
indicate that interbank loans increased sharply further.
Because of their extreme volatility, interbank loans are
difficult to estimate, and these estimates frequently are a major source
of error in bank credit estimates. However, in the first half of 1977,
revisions in interbank loans and in total loans (including interbank)
were in the same direction. Thus, the upward revision in loans adjusted
(excluding interbank), the concept used in the bank credit series, was
considerably smaller than the revision in total loans.
3. "Window-dressing" estimates. When the last-Wednesday current
reporting date differs from the Call Report date, as usually happens, an
estimate of the difference in levels between these two dates is included
in the initial bank credit estimates for the June 30 and December 31 Call
dates. The change between the Wednesday and Call dates is termed "window
dressing," and, frequently in the past, estimates of this change have
However, the actual
contributed substantially to benchmark revisions.

A-3
change in total bank credit between June 29 and June 30 ($4.4 billion)
was close to the estimated change ($4.6 billion).
The estimated "windowdressing" change in

total loans, was low-$3.5 billion compared with an

actual $4.2 billion-while that in investments was too high--$1.1 billion
compared with an actual $0.2 billion. Among loan categories, "window
dressing" for business loans was overestimated by $0.5 billion and for
loans to nonbank financial institutions by $0.9 billion. "Window dressing"
was underestimated by small amounts for real estate and security loans,
but by a substantial $1.7 billion for "other loans."
"Window-dressing" errors affect only the June levels and monthly
changes involving June--e.g., the upward revision, on this account, in
total loans in June lowered the increase in July by a corresponding
amount.
Or, conversely, in the case of business loans, the smaller
"window-dressing" increase in June addded to the increase in July.
Changes in other months were not affected by this factor.
There is an additional source of error that may be involved in
original monthly estimates but which cannot be measured directly in the
caseof the June 30, 1977 Call. Errors in the original reported member
bank data which are incorporated directly into the credit series and the
indirect effects on estimates for nonmember banks can only be determined
when the last-Wednesday reporting date coincides with a Call date. Such
reporting errors sometimes have been substantial in the past when it was
possible to cross-check reports for the same date.
Taking account of both revisions in nonmember bank and "windowdressing" estimates, the net effects on major loan categories varied
considerably.
Both business loans and real estate loans were $2.0
billion higher on June 30 than previously estimated, relatively large
revisions for both these components.
Consumer loans, which were revised
to the June 30 benchmark level previously in conjunction with revision of
the Consumer Credit series, were increased by $0.9 billion. The level of
security loans was raised by $0.8 billion, about half due to the "windowdressing" error. Agricultural loans and loans to nonbank financial institutions were both lowered--by $0.5 and $1.9 billion, respectively. The
large downward revision in loans to nonbank financial institutions reflected
in part a substantial "window-dressing" error; these loans actually declined
rather than increasing, as estimated, between June 29 and June 30.
The
level of "other loans" was $2.1 billion higher on June 30 than estimated.
For the July-October 1977 period, the higher nonmember bank
estimating ratios established from the June Call Report were used to
Accordingly, the estimated
derive revised estimates for nonmember banks.
level of the commercial bank credit series was raised in all of these
from previous
months. After July, however, monthly changes differed little
estimates. As noted earlier, "window-dressing errors" affect levels only
for June, but this, of course, affects third quarter growth rates.
On balance, the most significant effects of this benchmark revision were to confirm and raise the already strong estimated growth rates
in business, real estate, and consumer loans over the first half of 1977.

Table I
COMMERCIAL BANK CREDIT 1/
2/
COMPARISON OF OLD AND REVISED RATES OF GROWTH
(Seasonally adjusted changes at annual percentage rates)
Total Loans & US Treasury
Investments 3/ Securities
Old
Revised Old Revis ed
1977--1st half
1st quarter
2nd quarter
3rd quarterp/
1977

10.5

9.5
11.2
8.5

Revised

10.1

12.2

14.1

16.8

.5
12.1
8.4

9.1
11.5

14.4

10.5
14.0
13.7

8.1
11.9
7.5

11.4
12.6
10.2

12.6
15.1
16.1

15.0
17.9
16.3

-8.8

5.7
5.6
-9.6

4.9
9.7
12.5

6.0
11.2
14.0

3.3
9.2
11.8

7.3
11.8
14.9

12.1
12.8
12.6

14.5
13.5
16.5

-6.9
22.0
1.1

28.3
6.3
3.9

27.5
7.1
1.6

14.5
9.4
10.4

16.8
11.5
13.3

13.6
6.4
15.3

15.4
9.5
12.6

14.1
13.1
17.6

17.1
16.8
18.9

-27.4
-3.5
3.8 -36.3

-18.3
-5.8
-34.9

9.4
7.8
4.6

11.8
8.5
4.6

16.0
16.4
10.4

13.9
16.5
10.4

8.2
12.5
1.9

13.7
13.5
3.0

14.3
16.4
16.9

15.6

-27.7

-27.6

12.3

11.5

20.9

20.9

24.0

26.1

13.7

14.3

10.6
12.6
8.6

25.9
6.6
-22.0

26.7

4.7
15.9
10.9

-4.9
57.0
24.8

-3.7
58.1
24.8

15.7
12.0
9.6

-9.3
21.0
8.0

14.0

Julyp/
August
p/
September p/

9.3
12.3
3.7

9.5
12.3

October p/

I/

Old

Real
Estate
Old Revised

12.4

16.2

April
May
June

13.6

13.5

8.9

Business
Loans 3/

10.4

16.4

3.7
14.7

10.3

Total3/
LoansOld Revised

6.3

11.8

January
February
March

10.0

Other
Securities
Old Revised

5.4
-19.4

6.7

.5
12.9
7.3
4.9

5.6

18.3
14.4

Last-Wednesday-of-month series except for June and December which are adjusted to the last business day
of the month.
2/ Data revised to reflect adjustments to June 30, 1977 Call Report benchmarks,
3/ Includes outstanding amounts of loans reported as sold outright by banks to their own foreign branches,
nonconsolidated nonbank affiliates of the banks holding company (if not a bank) and nonconsolidated
nonbank subsidiaries of holding companies.
/--Preliminary.

Table II
1
SEASONALLY ADJUSTED COMMERCIAL BANK CREDIT /
COMPARISON OF OLD AND REVISED LEVELS2/
(In billions of dollars)

Total Loans &
Investments
Old Revised
1977--January
February
March

US Treasury
Securities
Old Revised

Other
Securities
Old Revised

Totals/
Loans3/
Old Revised

Business
LoansOld Revised

Real
Estate
Old Revised

791.3
801.8
809.1

96.9
101.5
103.6

97.0
101.7
103.8

148.8
149.5
148.4

148.9
149.6
148.4

544.9
549.3
555.0

545.4
550.5
556.9

182.4
183.8
185.6

183.0
184.8
187.1

150.5
152.1
153.7

150.8
152.5
154.6

April
May
June

816.4
823.4
829.5

819.7
827.9
834.5

102.8
104.6
105.3

103.2
105.1
105.2

151.9
152.7
153.2

151.8
152.7
152.9

561.7
566.1
571.0

564.7
570.1
576.4

187.7
188.7
191.1

189.5
191.0
193.0

155.5
157.2
159.5

156.8
159.0
161.5

Julyp/
Augustp/
Septemberp/

835.9
844.5
847.1

841.1
849.7
852.4

102.9
102.6
99.5

103.6
103.1
100.1

154.4
155.4
156.0

154.4
155.5
156.1

578.6
586.5
591.6

583.1
591.1
596.2

192.4
194.4
194.7

195.2
197.4
197.9

161.4
163.6
165.9

163.6
166.1
168.1

Octoberp/

1/

790.6
800.3
807.0

856.7

862.0

97.2

97.8

157.6

157.6

601.9

606.6

198.6

202.2

167.8

170.1

Last-Wednesday-of-month series except for June and December which are adjusted to the last business day
of the month.
2/ Data revised to reflect adjustments to June 30, 1977 Call Report benchmarks.
3/ Includes outstanding amounts of loans reported as sold outright by banks to their own foreign branches,
nonconsolidated nonbank affiliates of the banks holding company (if not a bank) and nonconsolidated
nonbank subsidiaries of holding companies.
/--Preliminary.

B-1

APPENDIX B*
CHANGES IN BANK LENDING PRACTICES
Of the 121 senior lending officers at large banks responding to
the Lending Practices Survey taken in mid-November, about 40 per cent
reported that business loan demand was moderately stronger than three
months before. About 45 per cent of the respondents anticipated strengthening demand in the coming months, somewhat lower than the 55 per cent
expecting stronger loan demand at the time of the August survey. While
changes in loan policies appear somewhat mixed, moves toward a firming of
price and nonprice terms of lending noted in the August survey are more
apparent in the latest survey.
During 1977 expectations of stronger business loan demand have
been consistently high and justified by subsequent loan growth, in contrast
to the generally lackluster tone set both by expectations and subsequent
expansion of loans last year.
In at least one of the surveys this year,
over 80 per cent of the respondents considered their loan demand to have
The
strengthened and over 90 per cent expected further strengthening.
cumulative number of respondents reporting weakness or expecting weaker
demand was less than 15 per cent in the four surveys.
Between the August and November surveys, the prime rate charged
by major banks was increased from 6-3/4 per cent to 7-3/4 per cent in
four increments.
About one-third of the panel in November reported that
interest rate terms at their banks were firmer than three months before,
somewhat higher than the one-fifth of respondents in August reporting a
firming on interest rates. A number of banks reported easier rate policies,
and virtually all of these were from banks with over $1 billion in deposits.
These very large money center banks have in many cases not shared in the
growth of business loans this year, and a few have been the subject of
recent press reports concerning more aggressive competition for business
borrowers and new loan programs with interest rates below prime.
On nonprice terms, there are still more respondents reporting
an easing of compensating balance requirements than are reporting firmer
requirements, but the number of banks showing firmer policies has been
growing.
The banks reporting firmer requirements generally tended to be
banks under $1 billion, while those reporting easier compensating balance
terms were the very largest banks. Nearly all respondents reported that
standards of creditworthiness were essentially unchanged and that there
were no changes in their policies regarding credit lines or loan applicaA small but noticeable number of banks appears to be easing modertions.
ately their policies regarding the maturity of term loans to businesses.

*Prepared by Perry D. Quick, Economi , Banking Section,
Division of Research and Statistics.

B-2

About the same number of lending officers indicate more willingness to make term business loans in the November survey as did in August;
however, a larger number of respondents report some reluctance to lend to
businesses for maturities greater than one year. The pattern of responses
concerning other categories of loans appears about in line with other
recent surveys, with respondents showing an increasing disposition to
make loans to households--both mortgages and consumer loans-and to engage
in participation loans with correspondents.

PAGE 01

TABLE 1
SURVEY OF CHANGES IN BANK LENDING PRACTICES
AT SELELTED LARGE BANKS IN THE U.S.
1/
(STATUS OF POLICY ON NOVEMBER 15, 1977
COMPARED TO THREE MONTHS EARLIER)
(NUMBER OF BANKS & PERCENT OF TOTAL BANKS REPORTING)
(QUARTERLY

MUCH
STRONGER

TOTAL
BANKS

PCT

bANKS

PCT

MODERATELY
STRONb6k

ESSENTIALLY
UNCHANGED

MODERATELY
WEAKER

BANKS

BANKS

BANKS

PCT

PCT

PCT

MUCH
WEAKER
BANKS

PCT

STRENGTH OF DEMAND FOR COMMERCIAL ANL
INDUSTRIAL LOANS (AFTER ALLOWANCE FUR
BANK'S USUAL SEASONAL VARIATION)
COMPARED TO

121

THREE MONTHS AGO

ANTICIPATED DEMAND

IN NEXT 3 MONTHS

100.0

0

0.0

47

38.8

69

57.1

5

4.1

121

100.0

0

0.0

54

44.6

66

54.6

1

0.8

ANSWERING
QUESTION
BANKS
LENDING TO NONFINANCIAL

PLT

MUCH
FIRMER
POLICY
bANKS

PCT

1MODERATELY
FIRMER
POLICY

ESSENTIALLY
UNCHANGED
POLICY

bANKS

BANKS

PCT

PCT

MODERATELY
EASIER
POLICY
BANKS

PCT

BUSINESSES

TERMS AND CONDITIONS:
INTEREST

RATES

100.0

STANDARDS

CF CREDIT WORTHINESS

MATURITY OF TERM LOANS
REVIEWING CREDIT

13.2

10.7

70.3

18.2

100.0

BALANCES

54.5

0.8

95.8

100.0

COMFENSATING OR SUPPORTING

29.8

luO.O

CHARGED

3.3

b4.3

1.7
11.6

LINES OR LOAN APPLICATIONS

ESTABLIHED CUSTOMERS

121

100.0

3.3

94.2

NEW CUSTOMERS

1 1

100.0

5.0

86.3

121

100.0

3.3

92.6

iI

100.0

7.4

b6.8

LOCAL

SERVICE

AREA CUSTOMERS

NONLOCAL StRVICE AREA

CUSTOMERS

1/ SURVEY OF LENDIN6 PRAC1ICE4 AT
AS OF NOVEMBER 15, 1977.

1iZ LARGE BANKS REPORTING IN THE FEDERAL RESERVE

QUARTERLY INTEREST

RATE SURVEY

MUCH
EASIER
POLICY
BANKS

PC1

TABLE

FACTORS RELATING

BANKS

PAGE 02

MODERATELY
FIRMER
POLICY

PCT

ESSENTIALLY
UNCHANGED
POLICY

MODERATELY
EASIER
POLICY

bANKS

BANKS

BANKS

PCT

PCT

PCT

MUCH
EASIER
POLICY
BANKS

PCT

TO APPLICANT 2/

VALUE AS DEPOSITOR OR
SOURCE OF COLLATERAL BUSINESS

121

"NUNCAPT1VE"

100.0

105

86.7

121

i00.0

115

95.1

Ll2

THE LOAN

INTENDED USE OF

LNDING TL

PCT

(CONTINUED)

MUCH
FIKMER
POLICY

ANSWERING
QUESTION
BANKS

1

100.0

87.6

121

100.0

94.2

121

100.0

95.0

121

100.0

89.2

FINANCE COMPANItS

TtRMS AND CONUITIUNS:
INTcRte.

RATI~ CHARGEL

COMPENSAIING OK SUPPURIING
ENFCLCEMENI GC

KEQUlREMENT-L

cALANCt

ES7AbLIsHING NEW UR

BALANCEs

LARGER

CREDIT

LINLS

ANSWERINu
QLESTION
PCT

BANK.
TYPES LF

WILLINLNESS TU MAKE UTHER

CONSUMER
SINGLE

INSIALMENI

1AMILY

MULTI-FAMILY
ALL

CTHER

MUKIGAGE
MORTGAGE

MLRTGAGL

PARTICIPATION
LORREaPONUNT

LOANS
LUANS

LOANS

PLT

ES5ENTIALLY
UNCHANGED

MODERATELY
MORE
WILLING

bANKS

bANKS

BANKS

PCT

PCT

PCT

76.1

20

16.5

101

84.1

17

14.2

100.0

102

65.0

14

11.7

118

100.0

110

93.3

4

3.4

120

100.0

105

87.5

13

10.8

120

100.0

103

85.9

13

10.8

140

100.0

103

b5.b

b

0.7

120

100.0

120

92

100.0

LuANS WITH

bANKa

LuANS TO bkOkERS

2/

LOANS

BANKS

MUDERATELY
LESS
WILLING

LLANS
121

TERM LOANS TU ouSINESSE

CUNSIERAbLY
LEb
WILLING

FIRMER MEANS THE FACTORS WERE
FACTORS,
FOS THEmRetUESTS, AND EASIER MEANS THEY WERE LESS
LRtIT

CONSIDERtD
IMPORTANT.

MORE

IMPORTANT

IN

MAKING DECISIONS

FOR APPROVING

CONSIDERABLY
MURE
WILLING
BANKS

PCT

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