Full text of Federal Reserve Bulletin : April 1981

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V

o lum e

67 □

N

um ber

4 □

A

p r il

1981

FEDERAL RESERVE

BULLETIN
B o a rd o f G o v e rn o rs o f th e

F e d e ra l R e serv e

S y s te m

W a s h in g to n , D .C .

P u b l ic a t io

ns

Co

m m it t e e

Joseph R . C o yn e, Chairman □ Stephen H . A x ilro d □ John M . D e n k le r
Janet O . H a rt □ James L . K ich lin e □ N e a l L . Petersen □ E d w in M . T rum an
Naomi P. Salus, Coordinator

The F e d e r a l R e s e r v e B u l l e t i n is issued monthly under the direction of the staff publications committee. This committee is responsible for
opinions expressed except in official statements and signed articles. The artwork is provided by the Graphic Communications Section under the
direction of Peter G. Thomas. Editorial support is furnished by the Economic Editing Unit headed by Mendelle T. Berenson.




T a b le o f C o n te n ts

269

U .S . I n t e r n a t i o n a l Tr a n s a c t i o n s
i n 1980
Th e U .S . current account was in balance in
1980, essentially unchanged fro m 1979, de­
spite another large increase in the value o f
im ported oil.

277 N e w M o n e t a r y C o n t r o l
Procedure:
F in d i n g s a n d E v a l u a t i o n
Fr o m a Fe d e r a l R e se r v e S t u d y
Th e operating procedure proved flexible
enough to perm it some accom m odation in
the short run to last y ea r’ s unexpected
shifts in m oney dem and, and w orked to
lim it the extent to w hich changes in de­
mands fo r goods and services w ere reflect­
ed in actual m oney grow th.
291 I n d u s t r i a l P r o d u c t i o n
O utpu t rose about 0.4 percent in M arc h .
293 S t a t e m e n t s

to

C ongress

Paul A . V o lc k e r, C h airm an , B oard o f G o v ­
ernors, discusses the interrelationships o f
budgetary and m onetary policy and em pha­
sizes the im portance o f reducing taxes and
o f cutting back federal spending; he says
that reducing the federal budget deficit can
help head o ff tension in financial m arkets
and m ake room fo r private investm ent, be­
fore the H ouse C o m m ittee on the Budget,
M a rc h 27, 1981.
296 Theodore E . A llis o n , S taff D ire c to r fo r F e d ­
eral R eserve B ank A c tiv itie s , says that the
B oard supports the proposal by the B ureau
o f the M in t to introduce a zinc-based penny
and eventually to replace the predom inantly
copper one, before the Subcom m ittee on
Consum er A ffairs o f the H ouse C om m ittee
on Banking, Finance and U rb a n A ffairs,
M a rc h 31, 1981.



297 Fred erick H . S chultz, V ic e C hairm an,
B oard o f G overn ors, discusses the w ays in
w hich the F ed eral Reserve is attem pting to
understand and deal w ith the financial prob­
lems o f small businesses, before the House
C o m m ittee on Sm all Business, A p ril 7,
1981.
302 A n n o u n c e m e n t s
Issuance o f new Regulation Z .
A d option o f fee schedule fo r com m ercial
check-clearing and collection services.
M eeting o f C onsum er A d viso ry C ouncil.
Change in B oard staff.
A v a ila b ility o f revised list o f over-thecounter stocks that are subject to the
B o ard’s m argin regulations.
Publication o f Annual Statistical D igest,
1970-1979.
Adm ission o f eleven state banks to m em ­
bership in the F ed eral R eserve System .

3 11 R e c o r d o f P o l i c y A c t io n s o f t h e
F e d e r a l O p e n M a r k e t C o m m it t e e
A t its m eeting on F e b ru ary 2 -3 , 1981, the
C o m m ittee decided to specify ranges fo r
grow th o f M _1 A and M -1 B , adjusted fo r the
effects o f flow s in to N O W accounts, that
w ere */2 percentage point lo w e r than those
fo r 1980 and to retain the 1980 ranges fo r
M -2 and M -3 . Th u s, the C o m m ittee adopted
the follow in g ranges fo r grow th o f the m on­
etary aggregates o v e r the period fro m the
fourth q u arter o f 1980 to the fourth quarter
o f 1981: M - l A , 3 to 5 ‘/ 2 percent; M -1 B , 3*/2
to 6 percent; M -2 , 6 to 9 percent; and M -3 ,
6*/2 to 9 ‘/ 2 percent. T h e associated range fo r
grow th o f com m ercial bank credit was 6 to 9
percent.

F o r the period fro m D ecem b er to M a rc h ,
the C o m m ittee decided to seek behavior o f
reserve aggregates associated w ith grow th
o f M -1 A and M -1 B at annual rates o f 5 to 6
percent and in M -2 o f about 8 percent,
abstracting fro m the im pact o f flows into
N O W accounts. Those rates w ere associat­
ed w ith grow th o f M -1 A , M -1 B , and M -2
fro m the fourth quarter o f 1980 to the first
quarter o f 1981 at annual rates o f about 2
percent, 23/ 4 percent, and 7 percent respec­
tiv ely. I f it appeared during the period be­
fore the next regular m eeting that fluctua­
tions in the federal funds rate, taken over a
period o f tim e, w ith in a range o f 15 to 20
percent w ere like ly to be inconsistent w ith
the m onetary and related reserve paths, the
M an ager fo r D om estic O perations was
pro m p tly to no tify the C hairm an , who
w ould then decide w hether the situation
called fo r supplem entary instructions from
the C o m m ittee. In a telephone conference
on F eb ru ary 24, the C o m m ittee agreed to
accept some shortfall in grow th o f M -1 A
and M -1 B fro m the rates specified at the
m eeting on F e b ru ary 2 -3 .

319 L e g a l D e v e l o p m e n t s
Revised R egulation Z ; am endm ents to Reg­
ulations K and P; am endm ent to regulation
o f the D epository Institutions D eregulation




C o m m ittee; various bank holding com pany
and bank m erger orders; and pending cases.
373 D ir e c t o r s o f F e d e r a l R e s e r v e
Ba n k s a n d Br a n c h e s
L is t o f directors by F ed eral R eserve D is ­
trict.
Al

F in a n c i a l

A3
A 44
A 52
A 68

D om estic Fin an cial Statistics
D om estic N o nfinancial Statistics
In ternational Statistics
Special Tables

and

B u s in e s s S t a t is t ic s

A 67 G u id e t o Ta b u l a r P r e s e n t a t i o n ,
S t a t is t ic a l R e l e a s e s , a n d S p e c ia l
Ta b l e s

A 82 BOARD OF GOVERNORS AND STAFF
A 84 FEDERAL OPEN MARKET COMMITTEE
a n d S taff; A d v is o r y C o u n c il s
A 85 F e d e r a l R e s e r v e B a n k s ,
B r a n c h e s , a n d O f f ic e s
A86 Fed e ral R eser ve B o a r d
P u b l ic a t io n s
A 88 I n d e x
A90 M a p

to

of

S t a t is t ic a l Ta b l e s

Fe d e r a l R e s e r v e S yste m

U . S . I n t e r n a t io n a l T r a n s a c t io n s in

Lois E. Stekler o f the Board's Division o f Inter­
national Finance prepared this article.
The U .S . current account was in balance in 1980,
essentially unchanged fro m 1979. A lthough the
net result fo r all transactions fo r the tw o years
was the same, there w ere significant develop­
ments w ith in the trade account, the nontrade
current account, and the capital account.
The most striking aspect o f the current ac­
count in 1980 was the decline in the m erchandise
trade deficit despite a large increase in the value
o f oil im ports. E xports rem ained strong, w hile
nonpetroleum im ports w ere sharply cut by the
decline in U .S . econom ic a ctiv ity in the second
quarter. Th e volum e o f oil im ports fell about onefifth in 1980 as a result o f both slow er grow th in
gross national product and a reduction in the
ratio o f oil consum ption to G N P .
A fte r growing rapidly in 1979, the surplus on
nontrade current account fell slightly in 1980,
largely as a result o f a reduction in net direct
investm ent receipts. W e a k e r econom ic activity
in foreign countries, together w ith other factors
that held dow n the profits earned abroad by U .S .
petroleum com panies, accounted fo r most o f the
change.
In contrast to m any other countries, the U n it­
ed States was able to absorb the large increases
in oil prices in 1979 and 1980 and avoid a
deterioration in its current-account position.
This relatively sm ooth adjustm ent helped m ain­
tain the average value o f the dollar in 1980;
during the year, ho w ever, exchange rates fluctu­
ated w id ely. These m ovem ents m irrored not so
much changing prospects fo r the current account
as changing financial m arket conditions. In par­
ticular, the path o f the w eighted-average value o f
the dollar at tim es responded strongly to the
interest rate differential betw een investm ents de­
nom inated in dollars and in foreign currencies
(chart 1). T h e dollar appreciated sharply in the
first quarter, depreciated in the second, and after



1980

little change during the sum m er, appreciated
sharply again in the fourth quarter.
These relative m ovem ents in interest rates and
exchange rates both influenced and in turn w ere
influenced by private and official capital flows.
Because the current account was roughly in
balance in 1980, as it was in 1979, by definition
the sum o f all recorded capital flows plus the
statistical discrepancy also was equal to zero in
both years. H o w e v e r, the com position o f these
capital flows differed substantially betw een 1980
and 1979. In 1980 there w ere large net increases
in foreign official reserve assets in the U n ited
States, in contrast to large declines in 1979. A
com parison o f p rivate capital flows in the tw o
years is clouded by the rise in the statistical dis­
crepancy in the balance o f paym ents accounts in
1980. G en erally, the statistical discrepancy is
assumed to reflect unrecorded net private capital
flow s. The very large recorded net private out­
flow in 1980 was alm ost m atched by an equally
large unrecorded net inflow as m easured by the
statistical discrepancy.
1. Interest rate differential and the exchange value
March 1973=100

Percent per annum

A /

Interest rate
differential / \ A [

a

j

\
\

I

Dec.
1979

t

i

i

Mar.

!

j^ \j^

I

i

June
1980

i

i

l

Sept.

^Exchange value
of the U.S. dollar

)

l

I

Dec.

t

l

I

Mar.
1981

i

t

June

Exchange value of the U.S. dollar is the index of weighted-average
exchange value of the U.S. dollar against currencies of other Group of
Ten countries plus Switzerland using 1972-76 total trade weights.
Interest rate differential is the interest rate on three-month U.S.
CDs minus the weighted-average foreign three-month interest rate for
other G-10 countries plus Switzerland using 1972-76 total trade
weights.

270

Federal R eserve B u lletin □ A p ril 1981

2. A verage exchange value o f the U .S. dollar

M e r c h a n d is e Tr a d e

March 1973=100

Th e m erchandise trade deficit declined slightly to
$27.4 billion in 1980 despite a $19 billion increase
in the value o f im ported oil (table 1). M ovem en ts
o f the trade deficit during the year largely reflect­
ed the im pact on im ports o f fluctuations in U .S .
econom ic activ ity and a reduction in oil con­
sumption relative to G N P .
1.

U .S . m erch a n d ise trad e,
intern ation al a c c o u n ts b a sis
Billions of dollars, seasonally adjusted annual rate
1980
Item

1\ (V7Q
y/y

1980
Ql

Q2

Q3

Q4

Exports..........

182.1

221.8

Agricultural. ..
Nonagricultural

35.4
146.7

218.4 218.4 224.7 225.6

42.0
179.8

41.2
177.2

Imports..........

211.5 249.1 261.8 248.4 236.2 250.1

Petroleum___
Nonpetroleum.

Balance..........

60.0
151.5

78.9
170.2

86.3
175.5

38.6
179.8
83.8
164.6

43.5
181.2
68.9
167.2

44.5
181.0

76.7
173.5

-29.4 —27.4 -43.4 -30.0 -11.4 -24.6

So urce . U.S. Department of Commerce.

A g ricultural exports increased alm ost one-fifth
in value in 1980, despite the em bargo im posed in
January that lim ited grain exports to the Soviet
U n io n to 8 m illion m etric tons. Th e volum e o f
agricultural exports during 1980 averaged m ore
than 10 percent above the total fo r 1979 and was
alm ost as high as the record rate in the fourth
quarter o f 1979. A s other m ajor grain-exporting
countries increased th eir shipments to Russia,
the U n ite d States expanded its sales to nontraditional m arkets, particularly to Eastern E urope,
C hina, and L a tin A m e rica . A g ricultural export
prices, w hich had risen as a result o f the poor
Soviet and Eastern E uropean harvests in 1979,
w ere pushed up again in the second h a lf o f 1980
by the drought and poor harvests in the U n ited
States and several other countries.
Th e value o f nonagricultural exports increased
m ore than one-fifth in 1980; this grow th was
concentrated in the first quarter o f the year and
was spread over a w ide range o f com m odities
and regional export m arkets. Part o f the grow th
was attributable to price increases, but volum e
also increased substantially— by 6 percent over
1979. U .S . exports continued to benefit fro m the
lagged effects o f im provem ents in U .S . com peti­
tiveness resulting fro m the decline in dollar ex


1977

1979

1981

Price-adjusted dollar is weighted-average dollar multiplied by rela­
tive consumer prices (U.S. divided by foreign consumer prices).

change rates in late 1977 and in 1978 (chart 2).
A fte r the first quarter, ho w ever, export volum e
leveled off and then declined, as G N P in m ajor
foreign trading partners fell (chart 3). This de­
cline in export volum e was concentrated in in­
dustrial supplies and m achinery.
Th e econom ic dow nturn in E urope has intensi­
fied pressures in the E uropean C o m m unity fo r
protection and aid fo r certain industries, in clud­
ing steel, autom obiles, and petrochem icals. U .S .
exports o f petrochem icals and related products
(for exam ple, fe rtilize rs , synthetic fibers, and rug
yarns) have been the target o f dum ping com ­
plaints and quotas. E uropean producers have
charged that U .S . price controls on natural gas
subsidize U .S . production and give U .S . exp o rt­
ers an unfair price advantage. U .S . trade negotia­
tors, on the other hand, have argued that our
energy price controls do not constitute a subsidy
as defined by the G eneral A greem ent on Tariffs
and T rad e, and that lo w er raw m aterial costs
afford only a small part o f the advantage enjoyed
by U .S . producers. M o s t o f the U .S . advantage
is accounted fo r by m ore m odern equipm ent,
economies o f scale, and m uch higher rates o f
capacity utilization. Consultations betw een the
U n ited States and the E uropean C o m m unity on
these issues are continuing.
O il im ports rose to nearly $80 billion in 1980,
an increase o f 30 percent over 1979, as a result o f
higher prices; there was a substantial reduction
in volum e (table 2). T h e increases in petroleum
prices in 1979 continued through the first quarter

U.S. International Transactions in 1980

3. C hanges in real G N P in major countries
Percent

Changes are from previous quarter, seasonally adjusted. “Foreign”
is the weighted average of 10 countries.

o f 1980. F ro m A p ril to O ctober oil im port prices
increased only slightly, but the outbreak o f w ar
betw een Ira q and Ira n in S eptem ber disrupted
supplies and led to a substantial increase in spot
m arket prices. A t year-end the O rganization o f
Petroleum E xp o rtin g Countries (O P E C ) an­
nounced price increases o f 10 percent, w hich are
reflected in im ports in early 1981. Prices o f U .S .
oil im ports rose m ore than one-third fro m the
fourth quarter o f 1979 to the fourth quarter o f
1980, and averaged about $32 per barrel at the
end o f the year.
The volum e o f U .S . oil im ports dropped after
the first quarter o f 1980 and fo r the year as a
2.

Im ports o f p etro leu m and p r o d u cts,
intern ation al a c c o u n ts b a sis'
Price2
Quantity5
Year
(millions of
(dollars
barrels per day) per barrel)
3.75
4.14
5.00
6.83
6.61

2.16
2.43
2.57
3.33
10.98

2.9
3.6
4.7
8.4
26.6

1975...................
1976...................
1977...................
1978...................
1979...................
1980...................

6.50
7.81
9.27
8.72
8.81
7.09

11.45
12.14
13.29
13.31
18.67
30.46

27.0
34.6
45.0
42.3
60.0
78.9




w hole averaged 7 m illion barrels per day, dow n
one-fifth fro m 1979. This decline reflected slower
U .S . econom ic a c tiv ity , a reduced rate o f stockbuilding, and a continuation o f the decline in the
ratio o f U .S . oil consum ption to G N P as a result
o f conservation and the substitution o f other
energy sources. C u rtailm en t o f oil consum ption
relative to G N P was m uch sharper in the w ake o f
recent price increases than afte r the 1973-74
increases (chart 4). A lthough the percentage in­
crease in oil im port prices was higher in the
earlier period, the rate o f increase in the prices
paid by consumers was about the same because
o f the relaxation o f price controls in the later
period and because excise taxes on gasoline
changed little. Expectations o f continued price
increases m ay also have spurred adjustm ent after
the recent round o f oil price increases. Since
im ported oil accounts fo r only about 40 percent
o f U .S . consum ption, reductions in total con­
sum ption im p ly , ceteris paribus, larger percent­
age reductions in the value o f oil im ports.
4. Real import price o f petroleum and products and
ratio o f petroleum consum ption to real G N P
Ratio scale, 1973 Ql = 100

Value
(billions of
dollars)

1970...................
1971...................
1972...................
1973...................
1974...................

1. Includes imports into the U.S. Virgin Islands.
2. Annual averages.
S ource . U.S. Department of Commerce.

271

The real import price of petroleum and products is the average
quarterly unit value of U.S. imported oil deflated by the GNP price
index.
The ratio of consumption to GNP is a four-quarter moving average
of U.S. oil consumption (millions of barrels per day) divided by U.S.
real GNP.
S ources . U.S. Departments of Commerce and Energy.

N o npetroleum im ports rose about 12 percent
in value in 1980, e n tirely as a consequence o f
higher prices. T h e volum e o f these im ports,
w hich is highly sensitive to fluctuations in U .S .
econom ic a c tiv ity , began to decline in the second

272

Federal Reserve B u lletin □ A p ril 1981

quarter and by the fourth quarter was almost 4
percent below the year-earlier level. Part o f the
decline in im port volum e during 1980 was proba­
bly due also to the continued response o f demand
to previous im provem ents in the price com peti­
tiveness o f U .S . goods. Th e decrease in volum e
was concentrated in industrial supplies; only
m arginal declines w ere recorded in capital goods
and consum er goods im ports.
The slow dow n in U .S . econom ic a ctiv ity also
accentuated pressures fo r protection by certain
U .S . industries, particu larly autom obiles and
steel. In June the U n ite d A u to W orkers filed a
case before the In tern atio n al T rad e Com m ission
claim ing in jury due to im ports. H o w e v e r, the
IT C ruled that im ports w ere not the m ajor cause
o f the current econom ic problem s o f the dom es­
tic autom obile industry and that im port restric­
tions w ere not ju stified. Pressures fo r protection
have continued nevertheless, and the U n ited
States is currently tryin g to reach an understand­
ing w ith the Japanese regarding their car exports
to the U n ited States. Because o f the slump in
sales o f U .S .-p ro d u c e d cars, im ports fro m E u ­
rope and Japan averaged 27 percent o f total U .S .
car sales in 1980 com pared w ith 22 percent in
1979. A lthough the volum e o f new foreign car
sales was about the same in 1980 as in 1979, the
value o f im ports increased about 15 percent to
alm ost $19 billio n because prices w ere higher and
because new car inventories w ere gradually built
up from lo w levels early in the year. In the fourth
quarter the volum e o f foreign car im ports de­
clined som ewhat as sales leveled off.
As a result o f dum ping charges filed by the
U .S . Steel C o rpo ration against certain European
producers, the trigger-price m echanism (w hich
had in effect set a m inim um price fo r im ported
steel) was suspended fro m the end o f M a rc h to
the end o f O ctober 1980. Th e im pact o f the
suspension and reim position o f the trigger-price
m echanism on the aggregate steel im port data is
diflicult to assess. The value o f steel im ports was
alm ost the same in 1980 as in 1979, about $7
billion. V o lu m e was dow n, but im ports as a
percent o f supply in the U .S . m arket increased
slightly fro m 15 percent in 1979 to 16 percent in
1980. D uring the m onths w hen the trigger-price
m echanism was suspended, the threat o f retroac­
tive dum ping duties m ay have deterred foreign



exporters fro m low ering prices in order to ex­
pand sales.

Th e N o n t r a d e C u r r e n t A c c o u n t
N e t incom e on nontrade current-account items
(services and p rivate and governm ent transfers)
fell slightly in 1980, but still offset the m erchan­
dise trade deficit and produced a current-account
balance fo r the second year in a ro w (chart 5).
N e t direct investm ent receipts fe ll from $32
billion in 1979 to $28 billio n in 1980, after having
increased sharply in both 1978 and 1979 (table 3).
In part this fa ll was a consequence o f w eaker
econom ic a ctivity abroad, but in part it was the
result o f special nonrecurring transactions. D i­
rect investm ent receipts in the second quarter
w ere depressed by a capital loss associated w ith
the sale o f assets by a U .S .-o w n e d petroleum
com pany to a M id d le E astern country; paym ents
in the third quarter w ere increased by capital
gains associated w ith the sale o f holdings in the
U n ited States by a C anadian-ow ned com pany. In
contrast to net direct investm ent receipts, net
incom e fro m other p rivate investm ents rose,
reflecting higher interest rates in 1980.
5. U .S. trade, services and transfers, and
current-account balances,

Balance on current account includes goods, services, and private
and government transfers.
Annual data from the U.S. Department of Commerce.

U.S. International Transactions in 1980

3.

D ir ec t in v e stm e n t r ec e ip ts and p a y m e n ts

Billions of dollars
Item

1977

1978

1979

1980

Net...................................
Payments.........................
Receipts by industry........
Petroleum ....................
Manufacturing...............
Other ..........................

17.2

21.0

31.8

2.8

4.2
25.2
5.7

6.0

28.2
8.9
37.1
n.a.
n.a.
n.a.

20.1

5.7
7.5
7.0

10.6

8.9

37.8
13.2
13.6
10.9

n.a. Not available.
S o u r c e . U.S. Department of Commerce.

O f f ic ia l C a p it a l F l o w s
Foreign official reserve assets in the U n ited
States grew $16 billion in 1980 (table 4). This
inflow m ainly reflected increases in the official
holdings o f m em bers o f O P E C . D a ta published
by the D ep artm en t o f Com m erce covering all
O P E C investors (official plus p rivate) indicate
that the bulk o f these O P E C funds w ere placed in
securities issued by either the U .S . Treasury or
U .S . corporations. Th e liabilities o f banks in the
U n ited States to O P E C investors fell in 1980.
4.

C h ange in official r eser v e a s s e ts

Billions of dollars
1980
Item

1979

1980
Ql

Official reserve assets, net
inflow( + ) ...............
Increase ( - ) in U.S.
reserve assets1 .......
Increase (+) in foreign
official reserve assets
in the United States.
Industrial countries ...
OPEC.......................
Other .......................

—15.4

Q2 Q3

8.0 -10.5 8.3

-1.1 -8.2

-3.3

6.9

Q4
3.3

.5 -1.1 -4.3

-14.3 16.2 -7.2 7.8
-21.3
1.1 - 10.7 3.0
5.6 13.0
3.0 4.8
1.5 2.1
.5 *

8.0
2.4
4.4
1.2

7.6
6.4
.9
.3

1. Includes allocation of SDRs equal to $1,139 million in 1979 Ql
and $1,152 million in 1980 Ql.
*Negligible.
S o u r c e . U .S . Department of Commerce.

Th e official reserve holdings o f industrial
countries in the U n ite d States fe ll sharply during
the first quarter o f 1980, w hen the dollar was
strong, because o f these countries’ intervention
sales o f dollars and because o f swap repaym ents
by the U n ite d States. T h e ir holdings rose over
the rem ainder o f the year. In the final quarter o f
1980, w hen the value o f the dollar was rising
sharply, industrial countries added about $6 b il­



273

lion to their dollar holdings. A large part o f this
sum was acquired as a result o f swaps betw een
tw o European central banks and com m ercial
banks in their countries. These swaps w ere, in
effect, open m arket operations using dollar-de­
nom inated assets. Th e central banks bought dol­
lars spot and sim ultaneously sold them fo rw a rd ,
thereby providing liq u id ity in th eir ow n currency
to the dom estic banking systems o f the countries
involved.
D u ring 1980 the U .S . governm ent took advan­
tage o f periods w hen the dollar was strong to add
to its holdings o f foreign currencies. B y the end
o f 1980, U .S . foreign currency reserve assets
m ore than covered the T re a s u ry ’s debt denom i­
nated in foreign currencies resulting fro m the
sales o f the “ C a rter bon ds.”

P r iv a t e C a p it a l F l o w s
Th e analysis o f p rivate capital flows in 1980 is
clouded by the very large statistical discrepancy
in the U .S . balance o f paym ents accounts (chart
6). W h ile undoubtedly there are errors and om is­
sions in the reporting o f current-account transac­
tions, particularly service item s, sharp shifts in
the statistical discrepancy are generally assumed
to m easure net unrecorded p rivate capital flows.
In 1980 the large unrecorded inflow alm ost offset
the large net outflow through banks (table 5).
These tw o -w a y capital flows reflected the close
integration o f U .S . and offshore financial m ar­
kets: the use o f U .S . financial m arkets fo r in ter­
m ediation by foreigners and the conduct o f U .S .
dom estic interm ediation offshore.
In m uch o f 1979 and in the first quarter o f 1980,
U .S . banks borrow ed heavily fro m their ow n
offices in foreign countries in order to fund loans
in the U n ited States (table 6). A fte r the im posi­
tion o f the credit restraint program in M a rc h and
the slowing o f U .S . econom ic a ctiv ity , U .S .
banks repaid about $20 billio n in borrowings
from their ow n offices in foreign countries and
expanded th eir loans to nonbanks and to unaffili­
ated banking offices in foreign countries. A t the
same tim e, p rivate foreigners w ere increasing
their holdings o f assets in the U n ited States
(m uch o f it through unrecorded channels). L ittle
o f this inflow was placed directly in U .S . banks.

274

Federal R eserve B u lletin □ A p ril 1981

6. The statistical discrepancy in the
balance o f paym ents accounts

._____ •_________ _____

____

Billions of dollars
18

12

6

A Mm

ill

5

6
’60

’65

70

75

’80

Quarterly data from the Commerce Department.

These flows in opposite directions cannot be
explained by overall interest rate differentials
between the U n ite d States and foreign countries
or by exchange rate expectations, fo r these
w ould tend to produce flows by all p rivate asset
holders in the same direction. Instead, these tw ow ay flows are related to differences in prefer­
ences and opportunities faced by U .S . banks,
holders o f foreign w ealth , U .S . borrow ers, and
foreign borrow ers. F o r exam ple, borrow ing from
U .S . banks is only one o f m any sources o f funds
fo r U .S . corporations; these other sources are
tapped w hen m oney m arket rates are m ore fa vo r­

5.

able than U .S . bank rates. Increasingly U .S .
corporations have been able to borrow from
foreigners directly w ith o u t using U .S . banks as
interm ediaries. In some cases last year this bor­
row ing took the fo rm o f private placem ents o f
U .S . corporate securities w ith O P E C investors.
In other cases m ultination al corporations ob­
tained funds fro m th e ir offshore affiliates as a
substitute fo r borrow ing in the U n ited States to
finance dom estic operations. O v e ra ll, foreigners
made record net purchases o f U .S . corporate
securities in 1980.
As a result o f the increased com petition they
have faced fro m other form s o f interm ediation,
both foreign and dom estic, U .S . banks have
increasingly been m aking loans to customers at
rates below the p rim e. C re d it arrangem ents that
give U .S . corporations the option to borrow
at rates based on prim e or L ib o r (the Lon don
interbank offered rate) have spread. M a n y L ib o rbased loans have been booked offshore. O th er
things equal, this shifting o f loans to offshore
branches results in a capital outflow fro m U .S .
banks and a capital in flow through corporations.
In the second quarter o f 1980, after the im posi­
tion o f credit controls, p articularly the restric­
tions on the grow th o f bank credit, U .S . banks
low ered the prim e rate v ery slow ly, and a sub­
stantial gap appeared betw een the prim e rate and
other m oney m arket rates, including L ib o r.
M a n y corporations exercised their option to
switch to L ib o r-p ric e d loans, and loans to U .S .
residents (nonbanks) fro m the foreign branches
o f U .S . banks increased (chart 7).

U .S . in tern ation al tr a n sa c tio n s

Billions of dollars, seasonally adjusted, outflow ( - )
1980
Item

1979

1980
Ql

Net private capital flows ..............................
Change in net foreign portions of
banking offices in the United States1 ...
Net private securities transactions2 ...........
Net flows reported by nonbanking concerns
Net direct investment...............................
Net official reserve asset flows.....................
Current-account balance...............................
Other items.................................................
Seasonal adjustment discrepancy..................
Statistical discrepancy .................................




Q3

Q4

-5.0

-39.8

6.4

-24.8

-12.9

-8.3

6.8

-35.9
6.9
n.a.
-12.4

6.1

-25.3
-1.3
1.5

-

-4.7
3.4
n.a.
-7.2
3.3
.7
- 1.0
2.7
2.9

3.1
-.3
-14.6
-15.4
-.7
-2.7

8 .0
.1

-3.9

4.9

-.8

- 3.8
-10.5
- 2.6
-.4
- .1

23!8

1. Excluding liabilities to foreign official institutions.
Including private foreign purchases of U.S. Treasury obligations.
2.

Q2

35.6

7.1

.2

8.3
-2.4
-■1.1
1.5
18.7

n.a. Not available.
S o u r c e . U.S. Department of Commerce,

12.1
0

.9
-1.7
6.9
4.5
-1.4
-4.0
6.9

U.S. International Transactions in 1980

6.

275

C ap ital flo w s rep orted b y ban ks

Billions of dollars, outflow ( -)
11y/y
070

Item

1980
lyou
Ql

Change in net foreign positions of banking offices in the United States
(excluding liabilities to
foreign official institutions) ................................................................
Through interbank transactions
With own offices in foreign countries.....................................................
With unaffiliated banking offices in foreign countries...............................
Through nonbank transactions
Claims on nonbanks in foreign countries (increase, - ) ............................
Liabilities to private nonbanks in foreign countries (including
custody liabilities).............................................................................
Miscellaneous1 .........................................................................................

-

Q2

6.8

-35.9

6.1

-25.3

21.3
3.7

-12.3
-6.4

7.1
2.8

12.2

-11.9
1.0

2.3
-8.3

-6.3

Q3

-

Q4

12.1

-4.7

-18.2
- 2.2

-2.4
-4.7

-2.3

-.4

-3.6

-4.2

-3.8

-.5
-2.9

.9
-3.0

-.5
-.3

-.9

1.2

1.1

1. Miscellaneous includes custody claims and banks’ own claims and liabilities payable in foreign currencies.
U.S. Department of Commerce.

S ou rce.

The closer integration o f U .S . and offshore
financial m arkets and the increased com petition
faced by U .S . banks fro m offshore centers are
also reflected in the E u ro d o lla r holdings o f U .S .
residents. These holdings leveled o ff at about $60
billion in 1980, after grow ing rapidly in 1979. A
m ajor part o f these E u ro d o llar holdings was
acquired through m oney m arket m utual funds
and unit investm ent trusts.
As m entioned earlier, the statistical discrepan­
cy reached a record high in 1980. Several factors
m ay have com bined to swell capital inflows
through channels that w ere not adequately cov­
ered by the reporting system fo r U .S . interna­
tional transactions. D iversification o f invest-

ments in the U n ite d States by O P E C or other
foreign investors probably contributed to the
statistical discrepancy because investm ents in
real estate or p rivate placem ents o f corporate
securities are less lik e ly to be reported accurate­
ly than are bank deposits or holdings o f U .S .
Treasury securities. P olitical in stability abroad
m ay have provided an additional incentive fo r
private foreigners to invest in the U n ited States
in 1980. In addition, part o f the unrecorded
inflow in the second quarter resulted fro m the
omission fro m reports o f some Libor-based bank
loans to U .S . corporations.

O utlook
7. O ffshore branch loans to U .S. residents and
the prime r a te-L ib o r differential

Mar.
June
Sept.
Dec.
Mar.
_________ 1980______________________ 1981

Loans are credit extended to U.S. nonbank residents by offshore
branches of U.S. banks obtained from required reserve reports. Data
on the prime rate and the London interbank offered rate (Libor) are
from Salomon Brothers’ International Bond Market Roundup.



F ro m the first o f this year to m id -F eb ru ary the
average value o f the dollar relative to m ajor
foreign currencies rose sharply. D u ring the fo l­
low ing w eeks part o f that gain was reversed, but
at the end o f M a rc h the dollar rem ained about 10
percent above its average levels in 1979 and
1980. I f sustained, this appreciation, com bined
w ith an inflation perform ance that has been
worse on average than that o f other m ajor trading
nations, w ill put U .S . producers under greater
com petitive pressures and m ake it difficult to
sustain furth er reductions in the trade deficit.
Th e outlook fo r the trade balance is also
influenced by cyclical factors. T h e w idening o f
the m erchandise trade deficit in the first tw o
months o f 1981 reflects in part the im pact o f
m ore rapid U .S . econom ic grow th on im ports.
Th e value o f U .S . petroleum im ports is likely

276

Federal R eserve B u lletin □ A p ril 1981

to grow m ore slow ly in 1981 than in 1980. W o rld
supply has been increased as a result o f expand­
ed exports fro m Ira n and Ira q , and dem and has
been reduced by slow econom ic grow th in other
industrial countries and by the continued adjust­
m ent o f consumers to past price increases. B a r­




ring severe reductions in production abroad,
price increases are lik e ly to be relatively re­
strained during the next year. H o w e v e r, under
these circum stances the direct investm ent re­
ceipts o f U .S . oil com panies are not like ly to
increase substantially.
□

277

N ew

M o n e t a r y C o n tr o l P r o c e d u r e : F in d in g s

a n d E v a lu a tio n fr o m a F e d e r a l R e s e r v e S tu d y

This article, which appeared originally as an
appendix to the M onetary Policy R eport to Congress by the B oard o f Governors o f the Federal
Reserve S ystem , February 25, 1981, was pre­
pared by Stephen H. A xilrod, the Board's Staff
Director fo r M onetary and Financial Policy.
This paper review s experience w ith the new
m onetary control procedure established in O cto­
ber 1979 and evaluates im plications fo r current
and alternative control techniques. The new pro­
cedure in volved em ploying reserve aggregates—
on a d ay-to-day basis, nonborrow ed reserves—
as operating tools fo r achieving control o f the
m oney supply. Less emphasis was placed on
confining short-term fluctuations in the federal
funds rate— the overnight m arket rate reflecting
the dem and fo r and supply o f bank reserves. The
change in procedure, it should be pointed out,
represented a technical innovation rather than a
change in the broader objectives o f m onetary
policy or in the m onetary targets them selves.
Target ranges fo r various measures o f the m oney
supply, w ith the actual behavior o f m oney in the
course o f 1980, are shown in the chart.
T h e paper is divided into three sections. The
first presents an o v erv ie w o f findings about the
effects o f the new m onetary control procedure on
econom ic and financial behavior based on e vi­
dence gathered in staff p ap ers.1 Because the new
control procedure was designed to strengthen the
S ystem ’s ab ility to control the m oney supply, the
second section provides certain additional back­
ground analysis relevant to assessment o f the
role o f m oney as an interm ediate target fo r
m onetary policy. T h e third section contains an
evaluation o f the current operating procedure
and alternatives.

O v e r v ie w o f F i n d i n g s w it h
R e g a r d to E x p e r i e n c e
s in c e A d o p t io n o f N e w P r o c e d u r e
Questions investigated in review in g experience
w ith the new control procedure included, among
others, its im pact on precision o f m oney control,
v o la tility o f interest rates, the course o f econom ­
ic a ctiv ity , and exchange m arket conditions. O f
course, other influences on financial m arkets and
the broader econom y w ere surely o f fa r m ore
im portance than the p articular technical innova­
tions under consideration here. In d eed , a m ajor
problem has been to distinguish the im pacts o f
the new procedure per se fro m larger influences
operating on the econom y. This difficulty is
especially acute given the relativ e ly short period
o f tim e since the new procedure was im plem ent­
ed— a period o f tim e that m ay have been too
short fo r m arket participants to have fu lly adjust­
ed to the new enviro nm ent and a period o f tim e
in w hich m arkets w ere buffeted by changing
inflationary expectations, fiscal uncertainties,
credit controls, and oil price shocks.

R e la tio n b e tw e e n R e s e r v e s a n d M o n ey

1. O v e r the operating periods betw een meetings
o f the Federal O pen M a rk e t C o m m ittee, actual
nonborrow ed reserves fe ll below the Trading
D e s k ’s operating target by about 0.3 o f 1 percent
on average; the average absolute miss was about
0.4 o f 1 percent. These deviations reflected in
part errors in projection o f uncontrollable factors
affecting reserves (such as float). In addition, the
D esk at times accom m odated to variations rela­
tive to expectations in banks’ dem and fo r bor­
row ing in the course o f a bank statem ent w eek
1.
The staff papers are listed in the appendix and are (fo r exam ple, an unexpected willingness by
available on request from Publications Services, Board of
banks to obtain reserves by borrow ing heavily
Governors of the Federal Reserve System, Washington, D.C.
20551.
over a w eekend). T o ta l reserves cam e out some


278

Federal R eserve B u lletin □ A p ril 1981

G row th ranges and actual m onetary grow th
Billions of dollars

of dollars

The shaded lines reflect adjustments that should be made for
technical reasons to the original range for M-l A and M-l B to allow for
unanticipated shifts of existing deposits from demand deposits to
interest-bearing transactions accounts, such as ATS (automatic trans­
fer from savings) and related accounts. At the beginning of 1980 it
appeared that such shifts would have just a limited effect on growth of
M-l A and M-IB, and the longer-run growth range for M-l A was set
only V2 percentage point below the growth range for M-IB. Passage of
the Monetary Control Act later altered the financial environment by
making permanent the authority of banks to offer ATS accounts and

by permitting all institutions to offer NOW and similar accounts
beginning in 1981. As the year progressed, banks offered ATS
accounts more actively and more funds than expected were being
diverted to these accounts from demand deposits. Such shifts are
estimated to have depressed growth of M-l A over the year 1980 by 3/4
to 1 percentage point, and of M-lB by Vi to 3A of a percentage point,
more than had been originally anticipated. The shaded range allows
for these unanticipated shifts, and therefore in an economic sense
more accurately represents the intentions underlying the original
target.

w hat above interm eeting period paths, by about
0.2 o f a percent on average; the absolute miss
averaged about 0.8 o f a percent. T h e individual
interm eeting period misses reflected deviation o f
m oney stock fro m short-run targets, variations in
excess reserves, and m u ltip lie r adjustm ents to
the original path (to take account o f changes in
required reserves fo r a given level o f deposits)
that turned out to be incom plete.
2.
E conom etric evidence fro m sim ulations o f
m onthly m oney m arket m odels carried out w ith
various reserve m easures as operating targets
(nonborrow ed and total reserves and the m one­
tary base), given the existing institutional fram e­
w o rk , buttresses indications fro m last y e a r’s
actual experience that the relationship betw een
reserves and m oney is relativ e ly loose in the
short run. O v e r the o n e-year period since O c to ­
ber 1979, the m ean absolute erro r o f misses in the

level o f M - lB relative to target path during the
four- to seven-w eek operating periods betw een
F O M C meetings was a little over 0 .6 o f a per­
cent. This degree o f va ria b ility was in line w ith —
in some cases less than and in some cases m ore
than— m odel sim ulation results (holding various
reserve measures at predeterm ined target levels
fo r the sim ulations).2 In com paring the models
and the reserve technique actually used, it
should also be observed that m odel sim ulations
generally im plied m ore interest rate v aria b ility




2.
The root mean square errors o f actual m isses and
simulated model m isses ranged around 0.7 to 0.8 o f a percent
over short-run operating periods o f a month or so. This would
mean that, with disturbances similar to last year’s, two-thirds
o f the time M -IB would generally come within plus or minus
0.7 to 0.8 o f a percent o f the intermeeting target path over
approximately a one-month period (or, expressed in annual
rate terms, within a range o f plus or minus 8 to 10 percentage
points over such a period).

N ew M onetary Control Procedure: Findings and Evaluation

last year than proved to be the product o f the
technique actually in use.
3. In the m odel simulations o f the past year,
control o f m oney supply through strict adher­
ence to a total reserves or total m onetary base
target produced m ore slippage than control
through the nonborrow ed counterparts o f each.
This phenom enon largely reflects the presence o f
m ultiplier disturbances on the supply side that
w ould be generated, fo r exam ple, in the current
institutional enviro nm ent by changes in deposit
m ix and hence in required reserves fo r any given
level o f m oney supply. In the m odel sim ulations,
use o f total reserves or the total base as an
invariant target o v er the control period does not
perm it these disturbances to be cushioned by
changes in borrow ings.
4. Judgm ental predictions o f the m ultiplier re­
lationship betw een reserves or base measures
and m oney m ade since the shift in operating
procedure w ere generally superior to, though on
a fe w tests not significantly different fro m , fore­
casts derived fro m econom etric m odels.
5. O v e r a longer period than a m onth (or than
an interm eeting period) errors in the predicted
relationship betw een m oney and reserves m ay be
expected to average out; that is, over tim e,
errors in one direction tend to be offset by errors
in the other. Sim ulations o f the B o ard ’s m onthly
m odel suggest that such a process is at w o rk. In
actual operations over a one-year period since
O ctober 1979, the absolute miss in the level o f
M -1 B w hen in dividual misses relative to the
short-run target paths are averaged over three or
four interm eeting periods was reduced from a
little over 0.6 o f a percent (reported above) to
m ore than 0.4 o f a percent. This represents a
som ewhat sm aller reduction than w ould have
been expected fro m certain results and m ay have
reflected the nature o f unusually large, unantici­
pated successive m onth-to-m onth changes in
m oney dem and last year, first in one direction
and then in the other. These changes w ere relat­
ed in part to identifiable special factors such as
the im position and subsequent rem oval o f the
credit control program . A ccom m odation to such
special and tem porary factors, as they emerged,
m ight tend to lengthen the period over w hich
deviations fro m m onetary targets could be ex­
pected to average out, but w o u ld , by the same
token, tend to dam pen fluctuations in interest



279

rates that w ould not have contributed to better
control o f m oney over tim e.

Variability in M o n ey G row th
1. E valu atio n o f the v a ria b ility o f m oney supply
series is im portantly affected by the seasonal
adjustm ent process. Seasonal factors applied
during a current year are unable adequately to
reflect changing seasonal patterns in the course
o f that year; after a year is over, therefore,
reestim ation o f seasonal factors often tends to
smooth v a ria b ility . Based on current seasonal
adjustm ent factors fo r the year ju s t past (that is,
factors before seasonal revisions that take ac­
count o f the influence o f actual experience this
year), v aria b ility in w e e k ly , m onthly, and quar­
te rly grow th o f M -1 (and also M -2 ) was substan­
tia lly greater than in any year during the past
decade. H o w e v e r, w hen the v a ria b ility in m oney
grow th during the year fro m O ctober 1979 to
O ctober 1980 is com pared w ith v ariab ility in
earlier years— w ith earlier years adjusted using
seasonal factors that w ere current in those
years— nearly all o f the heightened v ariab ility in
w eekly grow th o f M -1 and a sizable portion o f
the m onthly and q uarterly v aria b ility are re­
m oved. W h ile this com parison m akes it seem
probable that seasonal facto r distortions are
overstating v aria b ility in the year ju s t past, the
extent cannot be assessed w ith confidence until a
num ber o f years have passed. In general, it
w ould appear that m oney has been m ore variable
over the past year— especially on a m onthly and
quarterly basis— though so fa r as can be judged
fro m the available data, still generally w ell w ith in
the range o f foreign experience w ith m oney sup­
ply v o la tility.
2.
The v aria b ility in m oney grow th o f the past
year appears to be related to an unusual com bi­
nation o f circum stances:
a.
There w ere large swings w ith in the year
in the dem and fo r m oney resulting fro m sharp
short-run variations in econom ic a ctiv ity caused
in large part by factors independent o f the new
m onetary control procedure, such as the im posi­
tion and subsequent rem oval o f the credit control
program . T h e im position and subsequent rem o v­
al o f the credit control program m ay have also
increased the varia b ility o f m oney grow th

280

F ederal Reserve B u lletin □ A p ril 1981

through a m ore direct channel, as the associated
large variation in bank loans was accom panied
by tem porary changes in dem and deposits— fo r
exam ple, as large loan repaym ents w ere in itially
made fro m existing dem and balances.
b.
In addition, econom etric evidence from
variety o f models suggests that there w ere “ un­
explained” factors other than econom ic activity
and interest rates causing substantial fluctuations
in m oney dem and. In particular, m oney levels
fell considerably short o f m odel simulations (giv­
en gross national product and interest rates) in
the second quarter, w hen m oney grow th was
negative. R e la tiv e ly rapid grow th in subsequent
quarters reflected in part a tendency fo r m oney
levels to m ove back tow ard m ore norm al rela­
tionships w ith G N P and interest rates.
3. The m oney targets on w hich reserve paths
w ere based reflected the intention to return m on­
ey over tim e to the long-run objective follow ing
divergences. In 1980 the target fo r narrow m oney
in the m onth follow in g the F O M C m eeting ty p i­
cally im plied m aking up about 30 percent o f the
difference betw een the projected level o f the
m oney stock in the m onth o f the m eeting and the
long-run target path. I f disturbances in 1980 had
been m ore representative o f those prevailing in
the 1970s, sim ulations using the B o ard ’s m onthly
m odel suggest that the reserve operating tech­
nique w ould have kept m oney closer to long-run
objectives on a m onth-by-m onth basis last year
than actually was the case. These simulations
also indicate a distinct trad e-o ff betw een v ariab il­
ity o f the federal funds rate— and m oney m arket
rates generally— and the speed w ith w hich at­
tempts are m ade to return the m oney stock to its
longer-term path once it moves off path. The
m ore rapid the attem pted return to path, the
larger are the im plied fluctuations in m oney
m arket rates.
4. In terp retatio n o f m oney supply v o la tility is
com plicated by the large am ount o f noise in
w eekly and m onthly changes in first-published
figures fo r the narrow m onetary aggregates (and
fo r m onthly changes in M -2 ) resulting fro m tran­
sitory variation and seasonal factor uncertainty.
Based on data fo r the 1973-79 period, the esti­
m ated standard deviation o f the noise factor fo r
m onthly changes in M -1 A and M -1 B is about $1.5
billion (4l/ 2 percent at an annual rate), and about
$3.3 billion fo r w e e kly changes. F o r M -2 , the



estim ated standard deviation o f noise in m onthly
grow th rates is 3V2 percent at an annual rate. The
noise factor declines fo r grow th rates over longer
periods o f tim e.
a

Variability o f In te re st R a te s
1. As expected, the federal funds rate has been
m ore variable on an in tra-d ay, in tra -w ee k ly , and
in ter-w eekly basis since the new procedure
was im plem ented. In tra -d a y and day-to-day v a ri­
ability has tended to be at least tw ice as large as
before, as have w e e kly changes after adjusting
fo r trend. This greater v aria b ility o f the federal
funds rate reflects the role o f nonborrow ed
reserves as an operating guide fo r the D esk.
2. There has also been heightened v ariab ility
o f interest rates on Treasury securities o f all
m aturities follow in g adoption o f the new operat­
ing procedure. Based on data fro m w hich c yc li­
cal m ovem ents w ere rem oved, the v ariab ility in
Treasury yields m easured on a w eekly average
basis has been at least tw ice as large as before
O ctober 1979.
3. The relationship over interest rate cycles
betw een the federal funds rate and yields on
Treasury securities o f all m aturities has been
essentially the same before and after O ctober
1979, suggesting that the underlying linkage be­
tw een the federal funds rate and other m arket
rates has rem ained aibout unchanged. A t the
same tim e, how ever, correlations betw een very
short-run nonsystem atic m ovem ents in the funds
rate and other m arket rates have increased sub­
stantially since the new procedure was im ple­
m ented. This higher correlation possibly reflects
the sensitivity o f m arket participants to day-today changes in the funds rate in last y e a r’s
uncertain environm ent but possibly also reflects
concurrent adjustm ents in m arket interest rates
generally, particu larly short rates, that tend to
occur as closer control is sought over the money
supply, given variations in m oney dem and.

E ffects on D o m e stic F inancial M a rkets
T h e swings in interest rates last year and the high
levels reached clearly affected behavior in finan­
cial m arkets. It is difficult to isolate the role o f

N ew Monetary Control Procedure: Findings and Evaluation

the new operating procedure, as such, in contrib­
uting to interest rate swings or changes in market
behavior. It is likely that large cyclical variations
in interest rates would have developed last year
in any event if the basic monetary aggregate
targets were pursued by other operating tech­
niques in the face of cyclical variations in money
and credit demands that were exceptionally large
and compressed in time. And adjustments that
took place in financial market behavior last year
largely represented adaptations that would have
been expected on the basis of past cyclical
experience—for example, constraints on housing
finance—or that were related to the special credit
control program. Market adjustments that might
have primarily reflected adaptations to the new
procedure as such are likely to be those more
associated with a perceived greater continuing
risk of short-term interest rate volatility—adjust­
ments that would be difficult to detect in an
environment like that of last year, which was
dominated by cyclical changes in credit flows, a
credit control program, and inflationary expecta­
tions.
1. M ortgage markets. Greater interest rate
volatility since October 1979 may have hastened
the trend in process for a number of years toward
more flexible mortgage instruments, such as
variable-rate, renegotiable, and equity participa­
tion mortgages. In addition, mortgage bankers
and other originators in their commitment poli­
cies appear to have attempted to avoid some of
the risk of interest rate changes occurring be­
tween the time a commitment is made and funds
are extended. They have done so by setting rates
or points at the time of closing, shortening the
period for guaranteed fixed-rate mortgage com­
mitments, and by imposing large nonrefundable
commitment fees to discourage cancellation if
rates should decline.
2. D ealer market fo r Treasury and agency
securities. Wider bid-ask spreads on Treasury
bills appear to have emerged last year. Evidence
on such spreads for coupon issues is difficult to
interpret; spreads rose considerably a few
months before introduction of the new proce­
dure, and thereafter remained wider than in
earlier years. Greater uncertainty about interest
rates may have influenced dealers to maintain



281

leaner inventory positions relative to transac­
tions; turnover of dealer inventories rose last
year as a very large expansion in gross transac­
tions outpaced the rise in the level of inventories.
3. Underwriting spreads on corporate bonds.
Underwriting spreads on corporate bonds issued
on a negotiated basis did not widen, on balance,
over the year since October 1979. However, data
on competitively bid issues suggest that spreads
on such issues have widened. This might tend to
raise bond costs, but any such effect last year
would appear to have been very small relative to
the more basic supply and demand conditions
affecting markets.
4. Commercial bank behavior. Bank behavior
last year was strongly influenced by a number of
factors other than the new procedure, such as the
imposition and removal of the special voluntary
credit restraint program, marginal reserve re­
quirements on managed liabilities, and increasing
reliance, especially by small banks, on money
market certificates as a source of funds. It is
difficult to detect changes in behavior associated
with the new procedure per se. There appears to
have been some increased reliance on floatingrate loans, especially for term loans, but this
trend was evident before October 1979.

5. Futures m arkets. Futures market activity
expanded rapidly in the period following October
1979, raising the possibility that the new proce­
dure led to an increased desire to hedge against
expected greater interest rate fluctuations. How­
ever, the expansion in activity represented a
continuation of a trend of recent years, as has
been the case with other market adaptations
noted above. It is virtually impossible to separate
growth in futures activity arising from attempts
to reduce exposure to interest rate risk in the
new environment from underlying trend growth
connected with increasing familiarization by the
public with the variety of financial futures instru­
ments that are becoming available.
6. Liquidity prem ium s. An attempt was made
to determine whether there was an increase last
year in liquidity premiums, manifested by a rise
in long-term rates relative to short-term rates.
Such a result might be expected if risk-averse

282

Federal R eserve Bulletin □ April 1981

financial market participants attempted to pro­
tect themselves from a perceived risk that the
new procedure would make for greater interest
rate variability and hence greater risk of capital
loss on holdings of longer-term issues. There
appears to be little, if any, evidence that liquidity
premiums became greater last year—although as
noted above there may have been some increase
of transaction costs in financial markets.

effects on the domestic price level, because price
increases caused by currency depreciation would
not be fully offset by the reverse effect of curren­
cy appreciation, is not supported by econometric
evidence. Therefore, the short-term variability of
exchange rates since October 1979 would not
itself appear to have raised the domestic price
level. Meanwhile, the underlying trend toward
appreciation since that time would have had a
favorable effect on the price level.

E xchange M a rk et a n d
O th e r E x te r n a l I m p a c ts

E c o n o m ic A c tiv ity

1. The spot value of the dollar appreciated more
than 5 percent in the 14-month period subsequent
to late September 1979, though there were pro­
nounced cycles that coincided with intermediateterm movements of interest rates in the United
States.
2. Day-to-day movement in money market
rates related to the new procedure could have
had some influence on very short-term exchange
rate volatility. Spot rates have displayed more
variability on a daily basis since the new proce­
dure was adopted, reflecting greater daily vari­
ability of interest rate differentials between U.S.
dollar assets and foreign currency assets. In
addition, the evidence on weekly and monthly
exchange rate movements suggests more vari­
ability, but the evidence is not so conclusive as
that for daily variability.
3. There is little evidence of a significant in­
crease in the variability of foreign interest rates,
except in Canada, on a monthly basis related to
the new procedure as such. Some countries,
especially developing countries with currencies
tied to the dollar and with inflexible interest rate
structures, appear to have experienced some
technical difficulties over this period connected,
for example, with the impact of interest rate
variability on financial flows.
4. The evidence does not suggest that the new
operating procedure has contributed to the vari­
able nature of gross U.S. international capital
flows since the fall of 1979. Significantly greater
contributing factors were the credit control pro­
gram and marginal reserve requirements on man­
aged liabilities.
5. The proposition that more short-term vari­
ability of exchange rates could have adverse

1. Assessing the contribution of the new proce­
dure as such to the pattern of economic activity
and inflationary expectations is complicated—as
noted at other points in this paper—by the force
of other factors that were importantly influencing
the markets for goods and services over the
recent period, including the effect of the basic
money supply targets themselves. Certain “fun­
damentals”—such as the previous sharp in­
crease in oil prices, the relatively low saving
rate, and the illiquid balance sheet of the house­
hold sector—suggest that economic activity
would have contracted in any event in 1980. In
addition, prices and real economic activity were
strongly influenced by the highly sensitive state
of inflationary psychology, the imposition and
removal of the credit control program that lasted
from mid-March to early July 1980, and the
erosion of fiscal restraint.
2.
Nevertheless, to the extent that the new
control procedure encouraged more prompt in­
terest rate adjustments in response to cyclical
fluctuations in money and credit demands, it
probably exerted some influence on the pattern
of economic activity. It may have hastened the
slowdown in economic activity—especially in
housing and possibly consumer durable goods—
in early 1980 and also hastened the recovery in
the summer, as interest rates advanced rapidly to
peak levels and then contracted sharply. Psycho­
logical reactions to the credit control program,
however, may have been an important influence
on the depth of the recession and the promptness
and strength of the subsequent rebound. There
was a sharp contraction in spending following
introduction of the program, and relief on the
part of both financial institutions and borrowers




New Monetary Control Procedure: Findings and Evaluation

as the program was phased out probably encour­
aged a sizable resurgence of spending.
3. In view of the lags in the response of capital
spending plans to changes in credit conditions,
the new procedure does not appear to have
exerted much influence on plant and equipment
spending during the past year. The timing of
inventory movements, by contrast, may have
been altered to the extent that the new procedure
had effects on the pattern of final sales and on
movements in short-term financing costs.
4. The new control procedure was adopted in
part to provide more assurance that inflation
would come under control (as money growth was
restrained), and thereby to reduce inflationary
expectations. It is difficult to measure inflation­
ary expectations, let alone to attribute changes to
a technical change in monetary control proce­
dures in so highly unsettled a period as last year.
Indirect evidence about inflation expectations
based on changes in interest rates is obviously
difficult to interpret, since interest rates are also
influenced by other factors. Some direct evi­
dence about consumer expectations of inflation
can be gleaned from the University of Michigan
index of consumer sentiment. No clear improve­
ment in inflationary attitudes is evident until the
spring, probably related in large part to the sharp
contraction of economic activity in the second
quarter. Also, according to the Michigan survey,
there did not appear to be any significant
worsening of expectations in the latter part of the
year as the economy strengthened.
5. The Board’s large-scale quarterly econo­
metric model, as well as two other much more
simplified models used for comparison, were
employed to help evaluate the extent to which
the actual fluctuations in money and interest
rates affected economic activity in the course of
the year. These models, of course, all suffer from
an inability to take account adequately of attitudinal changes and other behavioral factors relat­
ed to the special conditions of a particular year,
including any attitudinal changes that might be
occasioned by the shift in operating procedure.
Simulation results suggest that, because of long
response lags, the pattern of economic activity
last year would not have been particularly sensi­
tive to efforts at smoothing the quarter-to-quarter
pattern either of money growth or of interest rate
variations, though smoothing money growth had



283

slightly more impact. The smoothing of money
growth would have been at the cost of even
greater interest rate variability than was actually
observed over the last five quarters.

G e n e r a l C o n s id e r a t io n s

Evaluation of the current and alternative operat­
ing techniques to be discussed in the next section
depends very much on the role accorded inter­
mediate targets, particularly the monetary aggre­
gates, in the formulation of monetary policy.
This section examines advantages and disadvan­
tages involved in employing monetary aggre­
gates, or for that matter interest rates, as inter­
mediate targets and also examines certain
limitations on the feasible range of target set­
tings.

M o n e ta r y A g g r e g a te s
a s I n te r m e d ia te T a r g e ts

1. A dvantages
a. Money stock control tends to work to­
ward stabilizing GNP when the economy is buf­
feted by disturbances to spending on goods and
services and shifts in inflation expectations; such
factors appeared to be an important influence on
economic and financial behavior last year. If
spending surges unexpectedly, for example, as it
did in the second half of 1980, adherence to a
money stock target would automatically lead to
tighter financial markets, tending to offset some
of the surge in spending. Similarly, if spending
were to weaken unexpectedly—and very sub­
stantial weakness developed in the second quar­
ter of last year—efforts to hold to a money stock
target would lead automatically to lower market
rates of interest, which would tend to partially
restore spending to desired levels.
b. Current approaches emphasizing control
of monetary aggregates rest on the proposition
that planned deceleration in monetary growth
will lower inflation over time by limiting funds
available to finance price increases and encour­
aging expectations and behavioral patterns con­
sistent with reduced inflation.
c. By clearly communicating to the public
the Federal Reserve’s objectives for monetary

284

Federal R eserve Bulletin □ April 1981

policy, a monetary aggregates targeting proce­
dure enables private decisionmakers to plan their
activities better and to make wage and price
decisions that are more harmonious with noninflationary growth in money and credit.
Targeting on monetary aggregates involves
adjustments of market interest rates, in response
to underlying changes in demands for credit, that
might otherwise be unduly delayed, either on the
down- or on the up-side.
2. D isa d va n ta g es
a. Looseness in the relationship between
money demand and nominal GNP reduces the
significance of monetary aggregates as a target,
particularly in the short run. Unexpected shifts
in this relationship lead to undesirable interest
rate movements with strict adherence to money
supply targets. Last year, there was evidence of
looseness in this relationship. For example, as
noted earlier, econometric models suggest a siz­
able downward shift in the demand for money in
the second quarter, given actual GNP and inter­
est rates.
b. Attempts to achieve steady growth in
monetary aggregates on a month-by-month or
even quarter-by-quarter basis can lead to large
fluctuations in interest rates, given the high de­
gree of variability in short-run money flows and
the relatively interest-inelastic demand for mon­
ey over the near term. Large fluctuations in
interest rates have certain risks; for instance,
they might endanger financial institutions that
are unable to make timely compensating adjust­
ments in their balance sheets, adversely affect
the functions of securities and exchange mar­
kets, and lead to confusion about the basic thrust
of policy.
c. Money supply targeting procedures
might introduce recurrent cyclical responses of
economic activity following an economic distur­
bance. Whether this is a realistic risk depends on
the nature of response functions in the economy.
It would be a high risk in the degree that (1)
money demand was very insensitive to interest
rate changes (and thus interest rates would need
to change sharply to maintain steady money
growth in response to an exogenous disturbance
from the goods market), and (2) there was no
significant current impact on spending from such
changes in rates, but impacts were felt over later



periods. It would be difficult to attribute the
cyclical behavior of economic activity over the
past year to such a process, though, given model
estimates of the interest-elasticity of money de­
mand and of relatively long lags between interest
rates and spending (with such lags implying a
longer cycle than observed last year).
d.
The concept of money is elusive and is
becoming more so as new substitutes evolve for
traditional transaction media and as improve­
ments in financial technology facilitate the ability
of the public to shift funds about for payments
purposes.
I n te r e s t R a te s A s T a r g e ts

1. A d va n ta g es
a. Control over total spending can be
strengthened by greater emphasis on stabilizing
interest rates when disturbances stem mainly
from the monetary sector rather than from mar­
kets for goods and services.
b. Control over rates might make for greater
short-run stability in financial markets, since
market institutions might be relatively certain
about the terms and conditions under which they
can “ safely” meet near-term credit demands.
2. D isa d va n ta g es
a. It is very difficult to determine the appro­
priate interest rate level, particularly in an infla­
tionary environment in which shifting expecta­
tions of inflation are continuously altering the
relationship between real and nominal market
rates of interest.
b. Efforts to stabilize interest rates tend to
amplify economic cycles stemming from cyclical
variations in the demand for goods and services,
since by stabilizing rates, procyclical growth in
money and credit would be heightened. An up­
swing in the demand for goods and services, for
example, would be accompanied by an expan­
sion in the volume of money and credit. By
contrast, with a money stock targeting proce­
dure, resistance would be introduced automati­
cally through increases in interest rates.3
3.
Even with a money stock procedure such resistance
may not be sufficient to hold nominal GNP down to a
previously desired level if the upward shock in demand for
goods and services involves a rise in velocity—as it well
might if it resulted from, say, expansion in federal spending.

New Monetary Control Procedure: Findings and Evaluation

285

c.
While interest rate targets could in con­that such close control is needed to attain the
cept be adjusted promptly so as to minimize the
underlying economic objective of encouraging
likelihood of a procyclical monetary policy, in
noninflationary economic growth. Statistical in­
practice the institutional decisionmaking proce­
vestigation suggests that “ noise” alone accounts
dure often limits the ability to make sizable
for substantial variation in monthly money
growth rates. Moreover, model simulations indi­
adjustments in the target. This could constrain
cate that variations in money growth, above or
interest rate variations when rates are taken as
below targets, lasting a quarter or so are not
the intermediate target of monetary policy.
likely to have substantial economic effects.
4.
Uncertainties involving the relationship be­
tween money demand and GNP—as evidenced
L im ita tio n s in th e T a r g e tin g P r o c e s s
by unexpected variations in such demand last
year—suggest the need for a degree of flexibility
Regardless of whether monetary aggregates or
in target setting (ranges may be preferable to
interest rates are selected as intermediate tar­
point estimates) and also suggest the possibility
gets, there appear to be a number of limitations
that, at times, there may be a need for large
on the monetary authority’s range of choice of
deviations from predetermined targets or for
the particular target setting and the precision
changes in the targets. On the other hand, devi­
with which the target is pursued.
ations from target ranges involve the risk of
1. The particular target setting must take into
changes in market expectations that are counter­
account the capacity of the economy and finan­
productive (for example, when money supply
cial markets to adjust to the targets and the
runs strong relative to target, inflationary expec­
degree to which the implications of those targets
tations may be heightened, compounding the
can be understood by and are acceptable to the
difficulties of controlling inflation). In general,
larger public whose behavior patterns are in­
though, in the degree that there is success in
volved. Inflexibilities in wage and price determi­
achieving targets over time, expectations are less
nation, for example, have implications for the
likely to be adversely affected by short-run devi­
degree to which monetary targets can be re­
ations in money growth.
duced, without risking unduly adverse implica­
tions for economic activity in the short run. This
would be less of a limitation to the extent that
attitudinal shifts—in response to either an­
E v a l u a t io n o f Op e r a t in g P r o c e d u r e s
nounced monetary targets or other factors—
brought upward wage and price pressures down
Because the past year was in many ways excep­
in line with monetary targets. Experience of the
tional—and because a year, or 15 months, in any
past year has not yet provided a basis for believ­
event is too short a time frame within which to
judge whether observed relationships are acci­
ing that the lengthy lags between money growth
and price changes have been shortened signifi­
dental to the period or are lasting—evaluation of
cantly or that inflation expectations have begun
the new control procedure and of possible alter­
to respond more rapidly to the money control
natives must at best be quite tentative. The
choice of operating procedure would be influ­
procedure per se.
enced by the predictability of certain financial
2. The question may arise as to whether dis­
turbances in domestic or in foreign exchange
and economic relationships and by the capacity
of markets to adjust to operating techniques
markets may on occasion require short-run de­
without severe distortions—evidence about
partures from intermediate-term targets of mone­
which was presented in the first section. In
tary policy. However, these markets appear to
addition, the desirability of retaining the present
have adjusted to a substantial degree of interest
reserve procedure (with or without possible
rate or exchange rate fluctuation in the past year.
modifications), of shifting to an alternative re­
3. Precise month-by-month control of money
serve procedure, or indeed of shifting back en­
does not seem possible, given existing behavior
tirely to a federal funds rate operating guide
patterns in the economy and financial markets
depends in part on the value to be placed on
and institutional factors. Nor is there evidence



286

Federal R eserve Bulletin □ April 1981

relatively tight short-run control of money, given
uncertainties about the likely sources of potential
disturbances in economic and financial condi­
tions.
If there were complete certainty about eco­
nomic relationships, the choice of operating pro­
cedure would not be particularly critical, for a
given money stock target would be associated
with unique, known values for the federal funds
rate, nonborrowed reserves, and the monetary
base. And the monetary authority could achieve
its objectives no matter which of these instru­
ments was selected for operating purposes.
In practice, however, markets are continually
subject to disturbances that are not known in
advance. The principal kinds of disturbances are
those occurring in overall spending (the market
for goods and services), those occurring in the
demand for money (independently of GNP and
interest rates), and those affecting the supply
schedule for money (such as deposit mix or
banks’ demand for excess reserves). Moreover,
such disturbances—all of which were evident
last year—can be of a temporary or self-revers­
ing variety, or they can be permanent.
Alternative operating procedures tend to pro­
duce different outcomes for the pattern of inter­
est rates and money growth in the face of these
disturbances. With some procedures, and de­
pending on the source of the disturbance, inter­
est rates would be changed more, while with
others the money stock and other financial quan­
tities would absorb more of the impact. The
choice of operating procedure therefore in­
volves, among other things, judgments about
whether there is more risk to monetary policy’s
ultimate objective of noninflationary growth
from procedures that tend to emphasize interest
rates as operating targets with some implication
of a relatively gradual change in rates, or from
those that tend to work more directly against
money supply variations.

A ssessm en t o f
P r e s e n t O p e r a tin g P r o c e d u r e

The present reserve operating procedure proved
flexible enough to permit some accommodation
in the short run to unexpected shifts in money
demand, given GNP and interest rates, that



occurred last year. At the same time, the proce­
dure worked to limit the extent to which changes
in demands for goods and services (and thus in
transaction demands for money) were reflected
in actual money growth. Actual money growth
deviated from short-run targets last year, but
there were large accompanying changes in inter­
est rates that tended, over time, to set up forces
bringing money back toward path. Nonetheless,
money growth over time deviated more from
path than might have been expected relative to
the average degree of looseness that seems to
exist in reserve-to-money relationships.
Whereas the experience of last year may have
been atypical because of the nature of distur­
bances during the year, still a number of modifi­
cations to the operating procedure used since
October 1979 might be considered for their po­
tential value in reducing slippage in money rela­
tive to reserve paths. These modifications all
have certain disadvantages, however, that need
to be weighed against their varying advantages
for more precise monetary control, to the degree
that closer control in the short run is considered
desirable.
1.
Evidence of the past year suggests that
during an intermeeting period relatively prompt
downward (or upward) adjustments in the origi­
nal nonborrowed reserve path may be needed in
an effort to offset, over time, increased (or de­
creased) demand for borrowing when money is
strengthening (or weakening) relative to target.
As an alternative, more prompt upward (or
downward) adjustments in the discount rate
would tend to discourage (or encourage) borrow­
ing over time (in practice the actual level of
borrowing will not change until money demand
changes sufficiently to alter reserves demanded
to meet reserve requirements).4 These adjust­
4. Experience has demonstrated that it is difficult to deter­
mine in advance the appropriate level of borrowing to be
employed in constructing the nonborrowed reserve path
consistent with the short-run money supply target. This level
of borrowing would depend on a projection of market interest
rates consistent with the money supply target path and
knowledge of the willingness of depository institutions to
borrow, given the spread between market rates and the
discount rate, and could differ significantly from borrowing
levels based on or ranging around recent experience. In
attempting to forecast borrowings, evidence from models
may be usefully weighed along with judgmental assessment of
particular conditions at the time. However, in view of consid­
erable uncertainties about interest rate projections, the high
degree of year-to-year variability in the success with which

New Monetary Control Procedure: Findings and Evaluation

ments run the risk of increasing the volatility of
short-run interest rate movements in view of the
transitory fluctuations often experienced in
short-run money demand. However, they could
also dampen the amplitude of longer-term swings
of interest rates by more promptly leading to
adjustments by banks that bring money growth
back toward path.
2.
More fundamental changes in the adminis­
tration of the discount window and in the way
discount rates are structured and varied could be
considered for strengthening the relationship be­
tween reserves and money.
a. At an extreme, discount window borrow­
ing might be limited to emergency needs. This is
tantamount to adhering to a total reserves or
monetary base path. However, this would elimi­
nate the valuable buffering function of the dis­
count window. The window buffers the money
stock (and the markets) from disturbances affect­
ing the supply of money (such as changing de­
mands for excess reserves and changes in the
deposit mix affecting required reserves). Its role
in that respect was evident from the results of
model simulations showing a weak relationship
between total reserves or the monetary base and
money (when reserves or the base are treated as
exogenously determined). In addition, the dis­
count window cushions markets from the full
impact of variations in money demand that may
be transitory or which the FOMC may wish at
least partially to accommodate. Finally, lagged
reserve accounting requires access to the dis­
count window in the short run on occasions
when required reserves run above the nonbor­
rowed reserve path (if that path is to be main­
tained).5
b. Another approach to consider would be
to eliminate administrative guidelines at the dis­
count window and to substitute a graduated
discount rate schedule for adjustment credit—in
contrast to emergency and other longer-term
models project economic and financial relationships, and the
heightened variability in demands for discount window credit
evident last year, projections of borrowing demand from
interest rate forecasts and past bank behavior are subject to a
considerable degree of error.
5.
Even with contemporaneous instead of lagged reserve
accounting, it is by no means clear that banks would be able
to make needed adjustments reducing their required reserves
within a statement week—except at the expense of relatively
extreme interest rate movements.



287

types of discount window credit—based on, say,
size of borrowing. This approach would tend to
make the relationship between borrowing and
short-term market rates more certain by elim­
inating from the decision to borrow the uncer­
tainties connected with administrative guide­
lines. Also, it thereby transforms the highest
discount rate on the schedule into an upper limit
for the federal funds rate. There are, however,
legal questions about the System’s ability to use
size of borrowing as a criterion, administrative
problems in overseeing the adequacy of collater­
al and the financial condition of a vast number of
potential regular borrowers, and difficult ques­
tions with regard to the appropriate gradient for
the discount rate schedule. Too steep a gradient
risks undue market interest rate fluctuations,
particularly at times when borrowing demands
may be changing for transitory reasons, while
too flat a gradient—and at the limit a perfectly
flat one—would tend to eliminate the incentive of
banks to make portfolio adjustments that would
bring money supply back to target.
c. The recent policy of applying a surcharge
above the basic discount rate for frequent bor­
rowing (by larger banks) represents a step to­
ward a graduated discount rate structure within
the present administrative guidelines and tends,
when applied, to speed up the response of mar­
ket rates to overshoots or undershoots of money
relative to path. This approach has the attraction
of flexibility, but in practice it has proved diffi­
cult to assess because of the limited experience
with it thus far.
d. Another approach to speeding up the
response of banks within present administrative
guidelines would be to tie the discount rate to
market rates, either as a penalty rate or not.
However, this approach tends to limit flexibility
and raises the danger of upward or downward
ratcheting of market rates in the short run that
may be excessive for monetary control needs
and unduly disturbing to the functioning of mar­
kets.6 While a tied rate accelerates the response
6. This danger is greatest in the degree that the discount
rate is tied to a current or very recent market rate. If required
reserves expand rapidly in the current week, banks will have
to borrow the added required reserves that are not being
accommodated by the nonborrowed reserve target. As a
result market rates must rise to the point at which banks are
willing to borrow from the discount window. With an attempt
to maintain a “ penalty” discount rate, the new market rate

288

Federal R eserve Bulletin □ April 1981

of market rates, the change may be counterpro­
ductive—particularly if money behavior were
going to reverse itself naturally or if the rise in
borrowing were needed to moderate shocks from
the supply side—and could intensify short-run
money supply and interest rate cycles.
3. A closer short-run relationship between re­
serves and money could be attained by measures
that strengthen the link between required re­
serves and deposits in the particular money stock
that is being controlled. One such measure would
be a shift from lagged reserve accounting (LRA)
to contemporaneous reserve accounting (CRA),
a shift that the Board has already announced it is
contemplating. Such a shift would make the link
between current reserves and current deposits
stronger, though there still would be relatively
sizable slippage between reserves and money
from other sources. The monetary control ad­
vantages of CRA apply particularly to the short
run. They have to be weighed against (1) the
benefits of LRA for reducing the cost of reserve
management by the banks, (2) the contribution of
LRA to the Trading Desk’s ability to assess
reserve supply conditions, and (3) judgments
about the adequacy of monetary control under
LRA over a longer-term period.
4. The present relatively complicated reserve
requirement structure, even apart from LRA,
makes for considerable slippage in the relation
between reserves and money. While the Mone­
tary Control Act has tended to simplify the
required reserve structure, it will be a number of
years before the new structure is fully phased in.
Because of the unpredictability of shifts in de­
posit mix, in the ratio of currency to deposits, as
well as in banks’ demand for excess reserves,
judgmental multiplier adjustments to original
paths were made week-by-week last year as new
information was obtained. Model simulations
suggest money-reserve relationships would have
would therefore have to move temporarily above the discount
rate, which could not be maintained, in those circumstances,
above current market rates. Market rates would go up by the
amount needed to reestablish the normal spread of market
rates over the discount rate (that emerges from pressures
generated by discount window administration and banks’
reluctance to borrow). But this rise in rates may well bring
about a further rise in the discount rate if an attempt is made
to reestablish a “ penalty” rate, entailing yet a further rise in
market rates, so long as required reserves remain at an
advanced level.



otherwise been more variable on average. Thus,
there is no reason not to continue making such
adjustments, though it remains unclear, because
multiplier changes are so erratic, whether full
adjustment should be made to each week’s added
information.
5.
It appears from tentative results based on
the Board’s monthly money market model that
the faster the FOMC attempts to move back
toward the longer-run target for money, once off
target, the more likely is the long-run target to be
hit, assuming no federal funds rate constraint.
However, these results also suggest that the
more quickly a return to path is sought, the more
substantial fluctuations in money market rates
are likely to be. And experience of the past year
suggests these more substantial fluctuations
would be transmitted broadly through the rate
structure. Moreover, for a more rapid return
beyond a certain speed—perhaps around three
months—it seems as if the gain in reducing the
chance of departures from longer-term money
targets is small compared with the increasing
chance of a wider range of variability in money
market rates.
A s s e s s m e n t o f O th e r T a r g e tin g P r o c e d u r e s

1. M onetary base or total reserves
a.
The principal reason for adopting these
measures as day-to-day operating guides would
be to ensure more precise control of money.
However, there is no clear evidence that money
can be controlled moire closely through use of a
strict total reserves or monetary base operating
procedure under the present institutional frame­
work than through current procedures. Indeed,
most of the evidence suggested that these mea­
sures could produce more slippage because of
supply-side shocks to the money multiplier.
These shocks tend to be partially offset by
changes in borrowing with a nonborrowed re­
serves day-to-day operating target. Under a total
reserves or a base target, there would not auto­
matically be an offsetting tendency. In practice,
though, the precision of a total reserve or base
target would be improved through judgmental
adjustments to the reserve path that offset multi­
plier shifts. Improvements could also be effect­
ed, and the need for judgment reduced, by fur­
ther simplification of the reserve requirement

N ew Monetary Control Procedure: Findings and Evaluation

structure (such as removal of the reserve require­
ment on nonpersonal time deposits if the FOMC
mainly wishes to control narrow money) and by a
return to CRA. Whereas such changes would
tighten the linkage between reserves and money,
shifts between currency and deposits would still
tend to be a factor causing slippage—with model
simulations indicating greater slippage with the
monetary base as the operating target (which is
essentially currency plus total reserves) than
with total reserves. With a monetary base target,
short-run volatility in currency would lead to
large variations in money supply because
changes in the public’s holdings of currency
would need to be offset by equal changes in bank
reserves; and these changes in reserves would,
given the fractional reserve system, force a mul­
tiple change of deposits in the money supply.
With a reserves target, the changes in money
supply would be no larger than the currency
variation; consequently, money supply would be
less volatile with a reserves target.
b. In any event, strict adherence to total
reserve or base targets appears to be impractical
over short-run operating periods in the current
institutional setting. With the present LRA sys­
tem, it is clearly not feasible. If CRA were
adopted, such targets might become somewhat
more practical, though efforts to attain them
would accentuate short-run interest rate fluctua­
tions. Such fluctuations, given the inelasticity of
money demand relative to interest rates over the
short run, would stem from the inability of the
reserve supply to provide at least partial accom­
modation to transitory money demand varia­
tions, and would also result from remaining
multiplier slippage. In the process, borrowing at
the discount window would fluctuate widely, as
banks reacted to efforts by the Open Market
Desk to reach the total reserve target.
c. While there are practical questions about
the feasibility of targeting on total reserves (or
the base) on a day-to-day or week-to-week basis,
in a longer-run context a path for such reserve
aggregates, properly adjusted for multiplier
shifts, could serve as a general guide in helping to
make adjustments in the nonborrowed reserve
path or in indicating the need for a change in the
basic discount rate—as is, in fact, present prac­
tice. For example, when total reserves are run­
ning strong relative to their adjusted path, this



289

can be taken as an indication to hold back on the
supply of nonborrowed reserves relative to their
path (in order over time to offset the rise in
borrowing) or to raise the discount rate (in order
over time to discourage a rise in borrowing).
2. F ederal fu n d s rate ta rg et
a. Model simulations, given existing institu­
tional arrangements, indicated that in concept
slippage in short-run money stock targets could
be little different on the whole under a fundsrate-targeting regime than under a nonborrowed
reserves regime. However, in practice—to be
reasonably certain of attaining its long-run tar­
get—the FOMC would need to be willing to
move the funds rate quite actively when it was
the operating instrument and be able to predict
fairly well the appropriate extent, and indeed the
direction, of the required change. Uncertainties
in those respects were among the factors leading
to a shift toward reserve targeting.
b. A federal funds rate operating target
would have advantages if the FOMC wished to
provide more scope for being accommodative to
variations in money demand, either because of
uncertainties about the proper path of money
growth within its longer-run target band or be­
cause of a belief that money demand distur­
bances are more likely to occur than distur­
bances in the market for goods and services.
c. The federal funds rate range under the
current reserve operating procedure has been
much wider than under the earlier funds-ratetargeting regime. Moreover, the range under the
new procedure has generally been changed as the
limits were approached—a practice that has been
consistent with evidence suggesting that a wide
range of variation in the funds rate is a by­
product of efforts to attain tight control of the
money supply. In that context, a relatively nar­
row acceptable funds rate range would only have
advantages in the degree that the FOMC (1) felt
more scope could be given in a particular period,
for one reason or another, to variations of money
from a pre-set target, or (2) felt that narrow funds
rate limits provided a device that, given the need
to make judgments about sources of economic
and monetary disturbances, would prompt fur­
ther assessment of underlying monetary and
other conditions by the FOMC in the interval
between meetings.
□

290

Federal R eserve Bulletin □ April 1981

A P P E N D IX : M o n e ta r y C o n tr o l P r o je c t S t a f f P a p e r s

Davis, Richard G. “Monetary Aggregates and
the Use of Intermediate Targets in Monetary
Policy.”
Enzler, Jared J. “ Economic Disturbances and
Monetary Policy Responses.”
_____ and Lewis Johnson. “Cycles Resulting
from Money Stock Targeting.”
Greene, Margaret L. “The New Approach to
Monetary Policy—A View from the Foreign
Exchange Trading Desk at the Federal Re­
serve Bank of New York.”
Johnson, Dana, and others. “ Interest Rate Vari­
ability under the New Operating Procedures
and the Initial Response in Financial Mar­
kets.”
Keir, Peter. “Impact of Discount Policy Proce­
dures on the Effectiveness of Reserve Target­
ing.”




Levin, Fred J. and Paul Meek. “Implementing
the New Procedures: The View from the Trad­
ing Desk.”
Lindsey, David, and others. “Monetary Control
Experience under the New Operating Proce­
dures.”
Pierce, David A. “Trend and Noise in the Mone­
tary Aggregates.”
Slifman, Lawrence, and Edward McKelvey.
“The New Operating Procedures and Eco­
nomic Activity since October 1979.”
Tinsley, Peter A., and others. “ Money Market
Impacts of Alternative Operating Proce­
dures.”
Truman, Edwin M., aind others. “The New Fed­
eral Reserve Operating Procedure: An Exter­
nal Perspective.”

291

Industrial Production
R e le a s e d f o r p u b lic a tio n A p r il 15

Industrial production increased an estimated 0.4
percent in March, after a decline of similar
magnitude in February. Most of the March gain
was due to an increase in the output of autos,
trucks, and related parts; changes in other group­
ings were mixed. At 151.7 percent of the 1967
average, the March index was 8.0 percent above
its July 1980 low but slightly below its yearearlier level. Industrial output in the first quarter
of 1981 averaged 1.6 percent higher than in the
fourth quarter of 1980—a 6.6 percent rise at a
compound annual rate.
In market groupings, output of consumer
goods increased 0.5 percent in March, reflecting
a 7.6 percent rise in automotive products. Autos
were assembled at an annual rate of 6.5 million
units—about 12 percent more than in February—
and output of lightweight trucks for consumer
use also rose sharply. Production of home goods,
such as appliances, edged up in March, but
output of consumer nondurable goods decreased
slightly further. Following a small decline in
February, output of business equipment ad­
vanced 0.8 percent in March; this was due, in
large part, to sharp increases in production of
building and mining equipment and trucks. Out­

put of construction supplies edged down further
and remained more than 5 percent below their
level a year earlier.
Total materials output was little changed in
March. Durable goods materials increased 0.8
Seasonallyadjusted, ratioscale, 1967=100

- MANUFACTURING:
Nondurable^.

Federal Reserve indexes, seasonally adjusted. Latest figures:
March. Auto sales and stocks include imports.

Major market groupings
Percentage change from preceding month

1967 = 100

Feb.p

Mar.e

Nov.

Dec.

Jan.

Feb.

Mar.

Percentage
change,
Mar. 1980
to
Mar. 1981

151.1
149.6
147.8
146.9
137.9
150.5
178.0
100.7
156.1
145.0
153.4

151.7
150.3
148.8
147.7
141.6
150.2
179.5
101.0
156.2
144.4
153.7

1.7
1.0
1.2
1.0
2.4
.5
1.3
1.3
.7
1.6
2.8

1.1
.8
.5
-.2
-1.1
.1
1.9
.9
1.7
1.3
1.4

.5
.2
-.1
-.3
-2.0
.3
.4
.1
1.1
1.9
.9

-.4
-.4
-.3
-.2
-.4
-.1
-.3
-.1
-1.1
-1.6
-.3

.4
.5
.7
.5
2.7
-.2
.8
.3
.1
-.4
.2

-.3
.2
.7
-.6
-1.7
-.1
1.9
4.0
-1.3
-5.2
-1.0

Grouping
Total industrial production......
Products, total......................
Final products....................
Consumer goods..............
Durable ......................
Nondurable.................
Business equipment.........
Defense and space...........
Intermediate products.........
Construction supplies......
Materials.............................
p Preliminary.

e Estimated.




1981

1980

1981

N ote . Indexes are seasonally adjusted.

292

Federal R eserve Bulletin □ April 1981

Major industry groupings
Percentage change from preceding month

1967 = 100

Feb.p

Mar.e

Nov.

Dec.

Jan.

Feb.

Mar.

Percentge
change,
Mar. 1980
to
Mar. 1981

150.4
140.1
165.2
143.3
169.7

151.0
141.3
165.0
143.7
169.9

1.8
2.6
.9
3.0
.6

1.0
.9
1.0
2.4
-.7

.3
.5
.2
1.5
.4

-.5
-.9
-.1
1.3
-.8

.4
.9
-.1
.3
.1

-.7
-1.5
.2
8.0
-1.2

1981

Grouping
Manufacturing......
Durable ...........
Nondurable......
Mining...............
Utilities ..............
p

Preliminary.

e Estimated.

N o te .

Indexes are seasonally adjusted.

percent, mainly reflecting increases in the pro­
duction of parts for consumer durables and for
equipment. Output of nondurable goods materi­
als edged down further; and production of energy
materials declined, mainly because of strikerelated decreases in coal output.
In industry groupings, manufacturing output
increased 0.4 percent in March, after a decline of
0.5 percent in February. A 0.9 percent increase




1981

1980

in durable goods manufacturing reflected a siz­
able gain in production of motor vehicles and
parts and a moderate increase in machinery
output. Production of nondurable goods indus­
tries edged down again in March. Due to in­
creases in metal mining and oil and gas extrac­
tion, mining production increased slightly,
despite decreased coal output. Output of utilities
was little changed in March.

293

Statements to Congress
Statem ent by Paul A. Volcker, Chairman, Board
o f Governors o f the Federal R eserve System ,
before the Com m ittee on the Budget, U.S.
House o f R epresentatives, March 27, 1981.

I am pleased to be here to discuss our shared
concerns about the interrelationships of budget­
ary and monetary policy. I have the distinct
impression that there is a broad consensus about
the appropriate goals for economic policy, in­
cluding the priority need for a marked reduction
in inflation as a prerequisite for sustained growth
in employment, productivity, and real income.
The difficult task we have before us is to trans­
late that general consensus into effective action.
The administration has provided a firm lead in its
program for economic recovery. I hope that our
dialogue today will further contribute to this
process by enhancing mutual understanding of
our needs and policies.
In principle, it is broadly accepted that the
objective of monetary policy must be to restrain
growth in money and credit as part of the process
of turning back inflationary forces. Indeed, the
effort to control inflation has, until now, often
seemed to rely almost exclusively on monetary
policy. The consequence has been higher interest
rates and greater strains on our financial fabric
and on industries particularly dependent on cred­
it markets than would otherwise be necessary.
There is also understanding that no escape
from those financial pressures can be found in
expansive monetary policies. In the end, such an
approach would only aggravate the very infla­
tionary forces that underlie so many of the
difficulties in the economy and in financial mar­
kets. What is necessary is that other policies—
including most specifically the fiscal decisions
that are the province of this committee—be in
harmony with the need to deal forcefully with
inflation. In particular, I cannot stress too
strongly the need to change the strong upward
trend in federal spending that has characterized
recent years.



As you are painfully aware, inflation is not yet
receding. We did avoid a further ratcheting up in
the general rate of inflation last year, despite
another quantum jump in oil prices and strong
wage pressures. But that “holding action” has
been accompanied by little growth, on balance,
in economic activity since 1979, and unemploy­
ment is high in several important sectors of the
economy.
Moreover, inflationary expectations are now
deeply embedded in public attitudes, as reflected
in the practices and policies of individuals and
economic institutions. After years of false starts
in the effort against inflation, there is widespread
skepticism about the prospects for success.
Overcoming this legacy of doubt is a critical
challenge that must be met in shaping—and in
carrying out—all our policies.
Changing both expectations and actual price
performance will be difficult. But it is essential if
our economic future is to be secure.
Monetary policy inevitably has a crucial role in
this effort. It must be—and must be seen to be—
consistently directed toward curbing excessive
growth in money and credit. Such restraint is
inherent in the Federal Reserve’s commitment to
reduce the growth of money and credit over time
until inflationary pressures subside.
Our specific objectives for monetary and cred­
it growth in 1981 were presented to the House
and Senate banking committees last month.
Without going into detail here, these targets
point toward further reductions in the growth of
money and credit as compared with the rates of
increase in other recent years. In the context of
strong inflationary pressures, the targets are in­
tended to be restrictive, as they necessarily must
be if there is to be a winding down of the
inflationary process.
The need for that basic discipline is common to
virtually all schools of economic thought and is,
as you know, recognized in the administration’s
program for economic recovery. The only issue
for debate is how vigorously to proceed.

294

Federal R eserve Bulletin □ April 1981

I might also note that our efforts to keep
money growth within acceptable bounds will at
times be associated with substantial variations in
short-term interest rates in response to shifting
credit demands, changes in economic activity, or
other factors. Increases or declines in short-term
rates—such as have occurred recently—are
sometimes cited as an indication that Federal
Reserve “policy” is changing. But those inter­
pretations are misleading. Those interest rate
fluctuations typically reflect shifts in credit de­
mands and expectations about inflation and eco­
nomic activity, which can be volatile, and should
not call into question our intent to maintain firm
control on monetary growth over time. At times,
with inflation strong and the economy expand­
ing, restraint of money and credit expansion may
well be associated with high interest rates. But
those high interest rates are fundamentally a
reflection of the strength of inflation and exces­
sive credit demands; they are not in themselves a
policy objective. Indeed, over time, restraint on
money creation should lead to lower, not higher,
interest rates as inflation subsides.
It is clear that the process of reducing inflation
through monetary restraint can be painful. It
implies less money and credit than is needed to
support both the current rate of inflation and
sustained growth of real activity. Obviously, the
faster that inflation subsides, the greater will be
the scope for real gains in economic activity.
Monetary policy is, of course, designed to en­
courage and speed this disinflationary process.
But if strong cost pressures from wage settle­
ments, energy prices, or other factors persist or
accelerate, strains in financial markets will be
greater than otherwise, and real activity is likely
to remain constrained. All of that points up the
importance of other aspects of economic policy
and, in particular, the stance of fiscal policy, the
principal concern of this committee.
The Congress and the administration are now
in the process of making a fundamental reap­
praisal of the conduct of economic policy. The
focus of this effort is the administration’s farreaching proposals for tax cuts, spending reduc­
tions, and regulatory reforms. The design and
success of the program that emerges are critical
to the effort to reduce inflation and increase
productivity. I personally am encouraged by the
initial congressional reactions to the new direc­



tion proposed by the administration. There ap­
pears to be broad recognition of the nature and
urgency of our problems and a willingness to
bring to bear a new discipline on spending.
This committee and others will be debating, as
you must, the administration’s proposals. In my
view, it would be inappropriate for me or the
Federal Reserve to inject ourselves into consid­
eration of the precise form of the budget and tax
cuts. Rather, I will confine myself to some
general comments about the overall thrust of the
budget and how it interrelates with the problems
and purposes of monetary policy.
In that connection, I want to emphasize that
my judgments about appropriate budgetary deci­
sions are not heavily dependent on a particular
forecast about economic activity over the next
year or two. Of course, the actual budget results
for any fiscal year are in fact sensitive to what is
happening with respect to prices, unemploy­
ment, real income, and interest rates. But our
ability to forecast these variables with precision
is demonstrably limited. The range of uncertain­
ty is probably increased at a time of major new
policy initiatives and possible “external” shocks
because past relationships may be a less reliable
guide to the future.
I know you will need, in the end, to make
precise numerical assumptions in presenting the
budget. But rather than suggesting precisely
which assumptions are most plausible for fiscal
1982, I believe it more important to emphasize
certain basic and longer-run considerations that
seem to me valid whether or not growth or
inflation turns out moderately better or worse
next year than a particular forecast might sug­
gest. I emphasize the point because the problems
with which we are dealing are fundamental; they
have arisen over a long period of years; and the
solutions must be geared to the fundamentals
rather than to cyclical concerns, which to a
considerable degree are unpredictable in any
event. Put another way, I believe we have a clear
idea of where the major economic and financial
risks lie, and now the task is to minimize them.
Among the fundamental considerations is the
desirability, from the standpoint of economic
performance over time, of tax reduction. I have
little doubt that the growing level of taxes—
which relative to gross national product is ap­
proaching the highest level in our history, even

Statements to Congress

during war—is a factor in slowing growth, adding
to inflationary cost pressures, and distorting sav­
ings and investment decisions.
There is no dispute among economists that the
particular structure of taxes can have important
effects on incentives to work, to save, to invest,
and to bear risk. Consequently, to the extent
taxes can prudently be reduced, it is important
that the reductions be designed in a manner to
maximize the beneficial effects on incentives.
That is why, as I understand it, the administra­
tion has urged that tax proposals involving other
considerations be deferred.
What limits our ability to reduce taxes is, of
course, the potential budgetary deficits—deficits
that are already likely to be large in the period
immediately ahead. Given restrained growth in
money and credit, the sale of Treasury securities
to finance a deficit curtails the availability of
funds to private borrowers, potentially reducing
needed productive investment. As the deficits
become larger, the threat of extraordinary pres­
sures and strains on interest rates and financial
markets increases, and it is more difficult to
control the money supply and inflation. The risks
are increased to the extent deficits are incurred
when the economy is expanding.
That is why I emphasized at the start the
critical importance of cutting back as sharply as
possible the inexorable rise in federal spending.
In my judgment, that must be the keystone in the
arch of any new approach to economic policy—a
policy that can offer a real prospect of success in
dealing with inflation and in laying the ground­
work for lower interest rates and more vigorous
growth.
In approaching that job, we should bear in
mind the seemingly chronic tendency for actual
federal spending to exceed official estimates for
future fiscal years. Recent experience in that
regard has been particularly disturbing. We have
usually been overly optimistic in our assump­
tions about economic circumstances, overesti­
mating growth in the economy or underestimat­
ing inflation. To be sure, there will always be
errors in estimates, and in some circumstances—
an unexpected recession, for example—a tempo­
rary, automatic response of expenditures to dete­
riorating economic conditions may be appropri­
ate. But not all of the unanticipated expenditure
increases reflect new economic circumstances;



295

the tendency has been to add or enlarge pro­
grams and to underestimate their expenditure
requirements. If history is any guide, spending
tends to exceed intentions as we move from
initial budgetary planning to actual results, and I
would suggest that you appraise the risks in that
light.
I would also be cautious, in assessing budget­
ary prospects, of the view that increased busi­
ness and personal savings should be looked to as
a means of financing a deficit. Savings are excep­
tionally low today. I share the hope and expecta­
tion that new economic policies and declining
inflation will restore a more adequate level of
savings. But those savings, as and when they
materialize, are urgently needed to finance pro­
ductive investment and housing—they should
not be dissipated in financing prolonged huge
budgetary deficits.
For all those reasons, considerations of gener­
al economic policy suggest all the risks lie on the
side of cutting expenditures too little. I am
acutely aware of the difficulties and constraints
that you face—the need to increase defense
spending, to protect the truly needy, to pay
interest on the national debt, and to maintain
strength and continuity in other essential pro­
grams. In the broadest sense, those security,
social, and other requirements ultimately limit
what can be done to reduce spending. But looked
at from the standpoint of the need to reduce
inflation and to encourage economic growth, you
cannot, in my judgment, cut too much. Every
added dollar of spending cuts will provide more
assurance that needed tax reduction can be ac­
complished within a prudent budgetary frame­
work. Every step toward a reduced budgetary
deficit can only help head off tension in financial
markets and make room for private investment.
You know how difficult it has been in practice
to achieve a reasonable balance between federal
outlays and receipts. The record is clear; only
one surplus has occurred in the federal budget in
the past 20 years. We will not reach that objec­
tive in fiscal 1982. But we must not continue to
rationalize decisions that can only have the effect
of sustaining huge deficits indefinitely.
In setting the 1982 budget, we can meet two
crucial criteria that seem to me implicit in the
administration’s thinking. First, we can cut back
the upward trend in spending and significantly

296

Federal R eserve Bulletin □ April 1981

reduce the ratio of spending to the GNP. Second,
we can put the budget on a path that realistically
will produce balance and move into surplus as
the economy returns to levels of unemployment
and capacity utilization characteristic of most
recent years.
You are well aware that there are no easy
choices before you. But the wrong choice, it
seems to me, would be to let this opportunity
pass to change the direction of federal spending.
Then, the risk of prolonging inflation and unsatis­
factory economic performance and of great
strains in financial markets would be aggravated.
Surely, there is room for cutting if there is the

will, and the administration’s proposals for spe­
cific cuts over a broad array of programs point
the way.
The Federal Reserve has an indispensable role
to play in dealing with inflation. To be effective,
we must demonstrate that our own commitment
is strong, visible, and sustained. That is our
intention. But the effectiveness of our effort
depends on complementary fiscal, regulatory,
and other government policies. I feel sure that
we are in fundamental agreement about those
concepts. What remains is to confront unflinch­
ingly the hard decisions that this effort will
require.
□

Statem ent by Theodore E. Allison, S taff Director
fo r Federal R eserve Bank A ctivities, Board o f
Governors o f the Federal R eserve System , be­
fore the Subcom m ittee on Consumer Affairs o f
the Com m ittee on Banking , Finance and Urban
Affairs, U.S. H ouse o f R epresentatives, March

their intrinsic value.) Of course, the intentional
hoarding of the penny severely reduced supplies
available for monetary use. By March 1980, the
demand for pennies so greatly exceeded avail­
able supplies that the Federal Reserve began to
allocate them on a monthly basis. This allocation
program has had to be continued throughout
1980 and into 1981 because demand has contin­
ued to exceed supplies despite the fact that
copper prices are currently less than $0.90 per
pound.
The Bureau of the Mint proposes to change the
metallic composition of the penny from 95 per­
cent copper and 5 percent zinc to 97.6 percent
zinc and 2.4 percent copper. This change in
composition should reduce or eliminate the spec­
ulative demand for the one-cent coin, since the
price of zinc averaged less than $0.45 per pound
in 1980. Moreover, the change from copper to
zinc will result in a $50 million annual savings in
production costs when the conversion is fully
implemented, because of the lower price of zinc.
Other savings will accrue as well: The zinc penny
will weigh less, will use less material, will be
cheaper to transport, and can be produced with
less energy.
Based on historical experience, the introduc­
tion of the new penny may be accompanied by a
temporary surge in demand that will subside
after numismatic interests are fulfilled. More­
over, because production of the old copper pen­
ny will have to continue for awhile, there will
also be some increase in its demand for both
numismatic and speculative purposes. If it were

31, 1981.

I am pleased to present the views of the Federal
Reserve Board regarding the Treasury Depart­
ment’s plans to change the metallic composition
of the one-cent coin. The Federal Reserve has no
objection to the introduction of the zinc-based
penny and the eventual replacement of the pre­
dominantly copper one.
There are two reasons to support this step.
First, because the price of zinc is considerably
less than the price of copper, a zinc-based penny
will be cheaper to produce. Second, since copper
prices fluctuate substantially with cyclical and
other developments, we are exposed to the likeli­
hood of recurring speculative demand for copper
pennies from time to time, the effect of which
would severely limit their availability for mone­
tary use.
In February 1980, demand for pennies was
running 87 percent above the same period in
1979. This increase occurred rather suddenly,
when copper prices rose from $0.93 per pound in
December 1979 to a peak of $1.43 in February
1980. (When the price of copper rises above
$1.12 per pound, the total cost to produce a
penny exceeds its face value and, at $1.50 per
pound, it becomes profitable to melt pennies for



Statements to Congress

297

possible, the mint would build up excess inven­
tories equal to the anticipated temporary surge in
demand before the new penny was introduced.
This practice worked very successfully when the
bicentennial quarter was introduced in 1976, and
existing supplies were sufficient to meet numis­
matic demands as well as needs for monetary
use. Unfortunately, the Bureau of the Mint ap­
parently will be unable to generate adequate
excess inventories of the new penny to meet all
contingencies due to budget constraints and limi­
tations on the availability of the copper-coated
zinc blanks. The initial conversion from the old
to the new penny will take place just at the San
Francisco and West Point mint facilities, which
will be able to deliver only 300 million new
pennies per month starting in the fall of 1981.
Meanwhile, production of 700 million old pen­
nies per month will continue at the Philadelphia
and Denver facilities. Since the current demand
for pennies is running at around 1.4 billion per
month, total production of 1 billion a month will
mean continued allocations until full and mean­
ingful increases to production of the zinc penny
are completed.
These shortages are unavoidable given the
current constraints under which the mint is oper­
ating, and it is therefore recommended that the
conversion to the new penny take place as soon
as possible. While the inventories of copper
pennies at the mint and the Reserve Banks are
relatively low, we hope they will be sufficient to
respond to a moderate increase in demand during
the transition period.
Because the mint is considering freezing the
1981 date to increase the supply of the 1981 dated
coins, and because the new and old pennies will
be identical in appearance, not much numismatic
interest is expected. However, a dramatic in­
crease in the price of copper or in attention
generated by public discussion could aggravate
the shortage.

A minor concern of the Federal Reserve Sys­
tem relates to verifying coin deposits received
from the commercial banks that will contain a
mix of new and old pennies. At present, the
predominant means of verifying coin is by weigh­
ing it within certain tolerance ranges. However,
this method will no longer be accurate because
the new coin is 19 percent lighter. We believe
this difficulty can be resolved by statistical sam­
pling of coin deposits.
In evaluating the need for a new penny, the
possibility of eliminating pennies as a unit of
coinage should be considered. The point is often
made that such a step might raise the price level
slightly, because some prices might be rounded
up to the nearest nickel. However, the effect
would not be large or lasting because competitive
pressures would result in some rounding down as
well as up. There is precedent here and abroad
for eliminating outdated coins. For example, the
half cent circulated freely from 1793 until 1857,
when it was discontinued because it was judged
to be nonfunctional. Clearly a half-cent coin was
worth more in purchasing power in those years
than a penny today. We are not prepared at this
time to make a recommendation in this state­
ment, given the political and other aspects in­
volved. But, if the demand for the one-cent coin
were to decline significantly in the future, this
option would have to be carefully considered.
One other historical event is that during 1943,
when copper was at a premium due to the war
effort, the composition of the penny was changed
from copper to zinc-coated steel. However,
since this modified coin was rather unattractive
and somewhat resembled the existing dime, it
was unpopular with the general public. One
lesson to be learned from this experience is that
the new penny should be distinct from silvercolored coinage, as it will be.
In summary, the Board supports the mint’s
proposal to introduce a new zinc-based penny.

Statem ent by Frederick H. Schultz , Vice Chair­
man , B oard o f Governors o f the Federal R eserve
System , before the Com m ittee on Small Busi­
ness , U.S. H ouse o f R epresentatives , April 7,

I am pleased to have the opportunity to partici­
pate in these hearings on the effects of monetary
policy on small business. At the outset, I want to
emphasize that the financing problems of small
business are a subject very much on our minds at

1981.




298

Federal R eserve Bulletin □ April 1981

the Federal Reserve. We recognize that in many
key respects small businesses form the backbone
of the American economic system, providing
much of the employment, investment, technolog­
ical innovation, and competitive vigor that are so
important to the continued vitality of our econo­
my. At the same time, we are aware of the
problems small businesses are encountering in
the current financial and economic environment.
These are the problems that your committee
grappled with last year, and in my testimony I
will be commenting on the issues raised in the
report you published last fall on “ Federal Mone­
tary Policy and Its Effect on Small Business.”
Although I am glad to participate in your
deliberations on these issues, none of us can be
pleased that conditions have made it necessary
to hold hearings again on the same subject that
was of such concern more than a year ago. The
reason we are back is, I believe, the result of the
continuation and virulence of inflation over the
intervening period. Small businesses themselves
most frequently list inflation as their number one
problem, even ahead of high interest rates, gov­
ernment regulation, and taxation.
It is easy to see why this is so. Businesses—
whose survival depends on their ability to earn a
reasonable rate of return on their investments—
must be able to anticipate changes in product
sales and future income flows. The persistence of
generally rising prices greatly alters established
patterns of spending and saving, and creates an
environment in which it is particularly difficult to
discern underlying demand and supply relation­
ships. In particular, price adjustments that are
frequent and variable undermine the ability of
business managers to plan; profit flows are much
less predictable; and the risks of undertaking
new investments are greatly increased. Small
businesses are especially vulnerable to the prob­
lems associated with inflation. Unexpected shifts
in product demand are likely to be much more
devastating to a small firm whose activities typi­
cally are concentrated in a narrow range of
product lines or in a small geographic area. In
addition, the sluggish pace of economic activity
that has accompanied recent inflation has made it
more difficult to pass through cost increases to
customers.
Only by returning to a path of price stability



and lower inflationary expectations can this
country hope to obtain sound economic growth
and the kind of economic environment in which
businesses, small and large, can thrive. An es­
sential element in the effort to restore price
stability is the Federal Reserve’s commitment to
a responsible and disciplined monetary policy.
Experience over long periods and in many differ­
ent countries has shown that inflation cannot
persist in the absence of rapid monetary growth
to support it; it seems only sensible, therefore,
that the Federal Reserve work to bring down the
pace of money expansion over the long run to
noninflationary levels. This is the approach that
has governed monetary policy for well over two
years now.
Last year, as the Federal Reserve refused to
accommodate inflation-fed demands for money
and credit, interest rates rose substantially.
These rate advances also were given impetus by
concerns about inflation, the unexpected resil­
ience of the economy, and the growing federal
deficit, factors whose importance cannot be
overemphasized. Under circumstances like
those prevailing last year, the Federal Reserve
could not have attempted to hold down interest
rates without abdicating its commitment to
achieving targeted growth rates in the monetary
aggregates and thus its commitment to a policy
that would ultimately result in breaking the infla­
tion spiral.
Unfortunately, experience has shown that
when monetary policy carries a disproportionate
responsibility for restraining inflationary pres­
sures, the greatest burden falls on those sectors
of the economy that are heavily dependent on
financial intermediaries for credit—including
housing, farmers, and small businesses. There is
no question that small businesses have been
particularly hard hit by the high level of interest
rates. Because they typically have fewer alterna­
tive sources of funds, small firms rely heavily on
commercial banks for credit, and therefore much
of their borrowing is short or intermediate term.
As interest rates rise, small firms, which in
general already borrow at rates above those
extended to larger companies, experience sub­
stantial increases in financing costs that are not
readily passed on. Inflation, moreover, has
greatly enlarged their financing needs, thus in­

Statements to Congress

creasing their exposure to changes in credit
market conditions and perhaps increasing the
risk premiums they must pay for borrowed
funds.
On balance, 1980 was not a good year for the
economy in general and for small business in
particular. Not only did interest rates move to
unprecedented levels last year, but they also
behaved in an extraordinarily irregular and vola­
tile fashion. Such abrupt swings in the level of
activity and financial conditions obviously create
serious planning and adjustment problems for
businesses; small businesses probably find it
particularly difficult in the short run to alter
operating or financing practices in response to
such rapid changes in the environment. A num­
ber of factors contributed to the unusually sharp
fluctuations in rates last year, not the least of
which was the imposition of credit controls last
March, which had a profound impact on develop­
ments in the spring and summer. And demands
for money and credit fluctuated widely in re­
sponse to exceptional movements in real activi­
ty—including one of the sharpest declines in
output on record in the second quarter followed
by a surprisingly strong rebound in the third.
Although 1981 should have less violent ups
and downs, I certainly cannot assure you that the
months just ahead will offer a substantial im­
provement in overall economic conditions. We at
the Federal Reserve believe we have embarked
on a course that will eventually reduce inflation
and interest rates. But this will take time and we
recognize that, in the interim, there could be
considerable discomfort for many as we move to
a noninflationary environment. Inflation has be­
come deeply embedded in our economic system,
and there is no painless way out of our predica­
ment. In these circumstances, as we ponder
specific efforts that might smooth the transition,
it is unfortunately easier to state what we ought
not to do than it is to suggest what should be
done.
The question of interest rate volatility, for
example, is very troublesome, but the small
amount of additional short-run interest volatility
that may be resulting from the Federal Reserve’s
monetary control techniques must be weighed
against the advantages of better control over the
monetary aggregates. To seek to stabilize inter­



299

est rates by accommodating shifts in money and
credit demands can produce dangerous devi­
ations from targeted growth rates of the money
supply and make it more difficult to achieve
noninflationary growth of money and credit over
time. And in the process it can increase the
cyclical movements in rates that are far more
significant in their effects on the economy.
Similarly, many have called for the monetary
authorities to lower interest rates, but we see this
as a transitory short-run response that in the long
run would be detrimental to our financial well­
being. Although the Federal Reserve might be
successful in temporarily lowering short-term
rates by pouring reserves into the system and by
increasing growth of the money stock, such a
policy would only serve to exacerbate inflation­
ary pressures and produce even higher interest
rates down the road.
It also would be extremely unwise for the
Federal Reserve to get into the business of
setting guidelines or reserve allocation schemes
designed to channel credit flows to specific sec­
tors. Our experience with the credit restraint
program last year reinforces our reluctance in
this regard. I can assure you that administering
these controls proved to be a task filled with
intractable problems. The program was designed
to rely as much as possible on market forces,
given the basic objectives of the administration’s
anti-inflation effort, yet it demonstrated all too
plainly how difficult it is to implement desired
credit allocation policies. Business decisionmak­
ing is distorted in unanticipated and unintended
ways. Inequities multiply and require an unend­
ing chain of exemptions and qualifications. In the
short run, the confusion and uncertainty are
damaging to the economy; in the long run, the
market devises ways of circumventing the con­
trols; and in the meanwhile, attention may be
diverted from the fundamental policies needed to
achieve economic stability.
Nor should the Federal Reserve get involved
in setting terms on credit, such as requiring
banks to maintain dual prime lending rates. We
believe that the lending institutions are best able
to determine the requirements of their customers
and their own abilities to service those needs.
The lending rate appropriate for any particular
loan will vary depending, among other things, on

300

Federal R eserve Bulletin □ April 1981

the bank’s costs of funds, the borrower’s credit­
worthiness, and the purpose and terms of the
loan: These factors can only be evaluated by the
individual institution and the loan terms negotiat­
ed between bank and borrower.
Many banks, of course, tie rates on their loans
to small businesses to the prime lending rate. The
meaning of this practice has been called into
question recently by the phenomenon referred to
as “below-prime lending.” As you are aware,
some of the large commercial banks have made a
sizable share of their loans at interest rates that
are below prime. Indeed, our most recent data
indicate that about 70 percent of loans extended
in the first week of February at a selected sample
of the nation’s largest banks were at rates below
prime. Thus, the prime rate no longer seems to
be the lowest rate offered to prime or best
business customers—as it was in the past.
In a study of below-prime lending by the
Federal Reserve staff, however, it was clearly
demonstrated that loans at these discounted
rates are of a different nature than ordinary
business loans. They tend to be very large loans
that are extended for very short time periods,
with rates that are tied to money market rates. In
essence, they are loans designed to compete with
commercial paper issuance as a source of short­
term financing for very large corporations. This
suggests that the prime rate may still be a rele­
vant concept for the traditional type of business
loan and that discounting below prime need not
be construed as an attempt by the banks to
mislead their other business customers. Never­
theless, by grouping these different types of
business credit under one heading, considerable
confusion has arisen. I personally believe the
banks would do their customers a great service
by choosing different terminology to distinguish
these lending rates.
Before concluding, let me suggest some ways
in which the Federal Reserve is attempting to
understand better and to deal with the financial
problems of small businesses directly. First, as a
matter of continuing policy, the Board encour­
ages commercial banks to take account of the
special needs of their small customers. The vast
majority of the banks in this country are them­
selves small, local, and regional institutions,
whose economic well-being is inalterably tied to



the health and vitality of their local business
communities. Most of these institutions, I am
sure, give top priority to the needs of their small
business customers. Some large banks also have
developed active small business lending pro­
grams, and it is likely that such programs would
be initiated on a larger scale if bank manage­
ments were better informed of demand and po­
tential returns. Our staff and those of the Federal
Reserve Banks are working in a variety of ways
to learn more about the particular problems of
small businesses and about the types of programs
that have been instituted.
We are also seeking ways to increase the
availability of data on small business financing.
As noted in this committee’s report, the lack of a
substantial data base for small businesses makes
it impossible to quantify the impact of changing
financial and economic conditions on this sector
of the economy. In part the lack of data reflects
the difficulty of establishing uniform and useful
definitions of “ small business;” in addition, the
cost of collecting statistically reliable data for
this heterogeneous population has appeared pro­
hibitive. There are several projects currently
under way, however, that should give us a better
indication of what data are needed and the cost
of obtaining them. One of these projects—under
the guidance of an interagency task force on
small business finance—is specifically focusing
on the financing needs of small businesses. An
important part of the project is an interview
survey of small business lending practices at a
small sample of banks and other creditors. The
results of this survey will be available early next
year and should provide some insight into the
types of data that might feasibly be collected
from such lenders.
In summary, let me assure you that the Feder­
al Reserve has very much in mind the plight of
small business firms in the current inflationary
environment. We believe, however, that the best
course is to pursue with diligence those policies
that will return us to a world of price stability.
Any sign that the Federal Reserve is turning
away from its commitment to monetary restraint
would seriously undermine the credibility of our
fight against inflation, set back the progress that
has been made, and make it much more difficult
to break the embedded inflationary psychology.

Statements to Congress

At the same time, it is essential that the burden
of restraining inflation not rest solely on mone­
tary policy. The Congress, along with the admin­
istration, has at hand one of the most important
means for reducing the strains on private finan­
cial markets—that means is the implementation
of prudent and disciplined budgetary policies. A
large volume of government borrowing associat­
ed with huge federal deficits such as we have had
in recent years both raises the cost and reduces
the availability of funds to private borrowers—
the impact of this is most pronounced on housing
and small business finance. I strongly support
the administration’s efforts to reduce the growth
of budget outlays and the size of the deficit, and
ask that the Congress give these proposals seri­




301

ous consideration. I would be gravely con­
cerned, however, if the benefits achieved in
budget cuts were dissipated in excessive tax
reductions so that the financing needs of the
government remained large. Such a course
would worsen rather than ease the financial
pressures facing private businesses and all bor­
rowers.
While the process of reducing the grip of
inflation will require painful adjustments by all
sectors of the economy for some time to come, I
feel confident that adherence to our monetary
goals, accompanied by responsible fiscal policy,
will lead us to the kind of stable financial and
economic environment in which businesses can
operate efficiently and productively.
□

302

Announcements
N e w R e g u l a t io n Z

The Federal Reserve Board on March 26, 1981,
issued a restructured, shortened, and simplified
version of its Regulation Z, to implement the
Truth in Lending Simplification and Reform
Act.1
New Regulation Z covers the Truth in Lending
and Fair Credit Billing Acts.2 As part of its
simplification of Regulation Z, the Board re­
moved from the regulation the sections dealing
with the Consumer Leasing Act2 and issued them
as a separate Regulation M.3 At the same time,
the Board suggested, in letters to the chairmen of
the House and Senate banking committees, that
the Consumer Leasing Act be simplified. Pend­
ing congressional action, the Board suspended
efforts it had begun to simplify its consumer
leasing rules.
In issuing its new Regulation Z the Board
emphasized that it expects the simplified rules
for disclosure of the full cost of borrowing to help
both consumers and creditors:
The revised act and regulation reflect a growing
concern in the Congress and elsewhere that Truth in
Lending has not completely fulfilled its original pur­
poses. In the last decade, surveys indicate that Truth
in Lending has heightened consumers’ awareness and
understanding of the cost and terms of consumer
credit transactions. However, during the same period,
it has become increasingly evident that the act, as then
implemented, imposed highly complex and technical
requirements on creditors, produced disclosures that
sometimes obscured the important information to con­
sumers, and generated costly and burdensome litiga­
tion over technical interpretation of the regulation.
The revised regulation addresses these concerns in
its emphasis on disclosure of essential credit informa­
1. Title VI of the Depository Institutions Deregulation and
Monetary Control Act of 1980.
2. Contained in Title 1 of the Consumer Credit Protection
Act of 1968.
3. The text of new Regulation Z and of Regulation M,
(consolidating the Board’s rules under the Consumer Leasing
Act) may be obtained upon request from the Federal Reserve
Board or from the Federal Reserve Banks or Branches.



tion in a straightforward manner, and on reduction in
the number of technical disclosure burdens placed on
creditors. The regulation's focus on simplified disclo­
sure of material terms should benefit consumers by
providing a more useful basis for credit decisions, and
creditors by reducing the difficulty of compliance.

As required by the Truth in Lending Simplifi­
cation Act, new Regulation Z was effective April
1, 1981. The Board gave creditors the option of
continuing to comply with the existing regulation
until March 31, 1982. This provides time for both
creditors and borrowers to become familiar with
the new regulation, for changes to the use of new
disclosure forms, and for reprogramming of com­
puters and retraining of personnel.
To make compliance with the new rules easi­
er—and in this way to assist the public by
encouraging compliance—the Board provided, in
the new regulation, a series of standard disclo­
sure forms. Proper use of these forms will assure
compliance. The new forms were developed with
particular attention to the use of plain, nontech­
nical language, and are available on request from
the Federal Reserve Board, Banks, or Branches.
The principal changes in the new regulation,
together with related current rules and reasons
for the changes, are shown in the accompanying
table.
The Board began work on simplification of
Regulation Z in 1977. The Simplification Act was
enacted following Board suggestions that the
basic statute be changed to make possible sub­
stantial simplification of the implementing regu­
lation. The final simplified rules issued by the
Board reflect provisions of the new law and
consideration of some 1,000 comments received
on draft regulations twice proposed for public
comment during 1980. In its final form, the
Board’s new Regulation Z is some 40 percent
shorter than the current regulation; it is restruc­
tured to make it easier to use; its language has
been revised in the interests of simplicity and
readability; and under the Board’s Regulatory
Improvement Project, a review of all Federal

303

Current rule

Change

1. The regulation applies to “creditors”
who in the “ordinary course of business
regularly extend or arrange for the exten­
sion of consumer credit.”

“Creditor” defined as person who ex­
tends credit more than 25 times a year (or
more than 5 times in the case of transac­
tions secured by a dwelling).

To avoid the imprecision of “ordinary
course of business” and “regularly ex­
tends” and the need for further regula­
tory material.

2. Loans made by trusts, or arranged by
banks from trusts, are covered if made
“regularly in the ordinary course of busi­
ness.”

The 25-transaction test for determining
whether creditors are covered would be
applied to individual trusts, thereby ex­
cluding many trust loans.

Trust loans are usually made on preferen­
tial terms, usually to trust beneficiaries,
and due to their infrequency it is a sub­
stantial regulatory burden to maintain
procedures, training, and forms for isolat­
ed trust department loans. The proposal
would reduce the burden but still cover
large trust plans such as employee benefit
trusts.

3. Unusual transactions that may have
aspects of credit, but that do not lend
themselves to disclosures without com­
plex rules, are covered—for example,
layaway plans, letters of credit, and utili­
ty “budget plans.”

Exclude these transactions from cover­
age.

To remove a source of unnecessary regu­
latory detail and burden in situations
where disclosures are not particularly
meaningful.

4. Loans to finance rental property are
covered if the property is a “personal”
investment as opposed to a “business or
commercial” activity.

A clean test is substituted for the current
distinction between “personal” as op­
posed to “business” investment. Loans
to finance rental property that is not own­
er-occupied (or expected to be owner-oc­
cupied within 1 year) are excluded.
Loans for rental property containing three
or more units are excluded even if one unit
is occupied by the owner.

Current rule is ambiguous, causing uncer­
tainty and necessitating interpretative
opinions about what is “personal” and
what is “business.”

5. Credit for which no finance charge is
imposed is covered if it is payable by
agreement in more than four installments.
This has been deemed to include informal
arrangements.

Coverage limited to written agreements
unless a finance charge is involved. All
agreements involving a finance charge
continue to be covered.

To exclude informal arrangements not in­
volving a finance charge, such as those
frequently made by hospitals, doctors,
dentists, small tradespeople, and others
as an accommodation to their customers.

6. “Consummation,” the time by which
disclosures must be made, has been inter­
preted as occurring when the customer is
under “economic coercion” to go for­
ward with the transaction—for example,
by having paid a nonrefundable fee.

“Consummation” defined as a time when
a contractual relationship is created under
state law between the parties.

The “economic coercion” line of analysis
causes uncertainty and necessitates inter­
pretative opinions.

7. Disclosures must be made on the basis
of the “understanding” between the par­
ties, even if at variance from the legal ob­
ligation.

Disclosures based on the legally enforce­
able obligation.

To avoid uncertainties produced by dis­
closure based upon informal terms of re­
payment.

8. Creditors must redisclose before con­
summation if early disclosures become in­
accurate.

Creditors that make early disclosures
must redisclose only if the annual per­
centage rate varies by more than speci­
fied percentage.

To provide incentive for early disclosures
in order to facilitate credit shopping,
while assuring consumer of notice about
significant change in cost of credit.

9. New disclosures required when any
consumer credit transaction is assumed
by another customer.

New disclosures required only in assump­
tion of residential mortgage transaction.

To limit redisclosure responsibilities to
those assumptions in which consumer is
most likely to compare credit sources.

10. Most changes in terms on outstanding
obligations are considered “refinancings”
requiring all new disclosures.

“Refinancing” redefined to include only
those agreements that satisfy an old debt
and replace it with a new obligation.

Removes source of regulatory complexity
in identifying which changes in terms
constitute refinancing. Also focuses dis­
closure on what is likely to be a credit
shopping point.

11. Required terminology is specified in
open-end disclosures in addition to the
“annual percentage rate” and “finance
charge”—for example, the “previous bal­
ance,” “new balance,” “payments,” and
“periodic rate.”

Eliminate terminology requirements other
than “annual percentage rate” and “fi­
nance charge.”

Terminology requirements are a source of
regulatory detail and technical violation
and are not mandated by statute. Uni­
form open-end terminology is probably
now ingrained in the industry anyway.

12. The minimum payment is a required
disclosure in the initial open-end credit
disclosures.

Eliminate this requirement.

Not required by the statute, and will be
disclosed in most cases anyway.

13. Minimum finance charges must be
disclosed on periodic statements as a re­
minder to consumers of the charges that
may be imposed, even if the charges are
not imposed during the billing cycle.

Minimum and other flat charges must be
disclosed only if they were, in fact, im­
posed during the billing cycle.

Periodic statement overloaded with infor­
mation; no statutory requirement to re­
mind consumers of a minimum or other
types of flat charges.




Reason

304

Federal R eserve Bulletin □ April 1980

Current rule

Change

Reason

14. Debit cards assessing a deposit ac­
count with overdraft credit privileges are
subject to “credit card” provision making
issuer responsible for merchandise claims
against the merchant.

Such cards are exempt from this rule.

Applying this provision to debit cards
presents operational problems and proba­
bly exceeds congressional intent.

15. To impose $50 liability for unautho­
rized use of a credit card, card issuer
must have disclosed potential liability, ei­
ther on card or within two years prior to
unauthorized use. Disclosure must include
liability limit, fact that notice of loss or
theft may be oral or written, and address
for receiving notice.

Disclosure can be given at any time prior
to unauthorized use, and need not state
an address so long as some means of re­
ceiving notice (for example, telephone
number) is given.

Statute does not require anything more.

16. In irregular transactions, although
certain APR tolerances are permitted,
these are limited to several slight irregu­
larities and have no application to the
majority of complex transactions.

Provide a tolerance of V4 to 1 percent for
any transactions involving multiple ad­
vances or irregular payments.

To reduce regulatory complexity and cal­
culation difficulties.

17. No tolerance for finance charge dis­
closure.

A de minimis tolerance is provided: $5 if
amount financed is $1,000 or less; $10 if
more than $1,000.

To provide tolerance for minor mistakes,
as permitted by the act, while protecting
consumers against significant understate­
ments.

18. Creditor must disclose certain sums
as “required deposit balances” and take
them into account in calculating APR.

Credit need only disclose that a required
deposit has not been factored into APR
calculation.

Eliminates need for complicated APR
computation, while still apprising con­
sumers of effect of deposit on cost of
credit.

19. Creditors must provide example of
effect of variable-rate feature in real es­
tate transactions, based on l/4 of 1 per­
cent immediate increase.

Creditors must give example (designed by
the creditor) of variable-rate feature in
any closed-end transaction.

To help consumers better understand po­
tential effect of variable-rate feature on
payment schedule. Representative exam­
ple designed by creditor will make com­
pliance easier.

20. Itemization of amount financed must
be provided in all transactions. (Under
the simplification amendments to the stat­
ute, itemization need only be provided if
the customer requests it.)

In transactions subject to the Real Estate
Settlement Procedures Act (virtually all
home purchase transactions) the RESPA
closing cost disclosures would be deemed
to satisfy the Truth in Lending itemiza­
tion requirements.

Eliminates redundant disclosures and re­
duces federally required paperwork.

21. “Points” paid by the seller in a real
esta te transaction m ust be in clud ed in the
finance charge if paid, indirectly, by the
purchaser through an increase in pur­
chase.

Exclude seller’s points from the finance
buyer of the house would continue to be
disclosed as part of the finance charge.

To avoid difficulty in determining wheth­
er purchase prices have been specifically
increased to cover seller's points. Also,
to simplify disclosures.

22. Total cost of insurance must be dis­
closed in closed-end credit (rather than
unit cost—e.g., $1 per $1,000 of “amount
financed”) to exclude it from the finance
charge.

Allow unit cost disclosure in a limited
number of closed-end transactions (e.g.,
those made by mail or phone).

Current rule can be burdensome in some
cases.

23. Certain minor disclosures are re­
quired with specified language—e.g.,
“pickup payment,” “balloon payment,”
“trade-in.”

Deletion of requirements.

To omit detail with no substantive loss to
consumers.

24. Where there are advances under a
closed-end credit line, the dates of the
advances must be estimated and a single
disclosure made.

The creditor may either treat the arrange­
ment as a single transaction or, alterna­
tively, make disclosures for each draw
under the line.

To recognize that individual circum­
stances, best known to the creditor, may
make one disclosure method or the other
more meaningful and easier to compute.

25. A single integrated disclosure is re­
quired for construction loans involving
advances during construction and a set
amortization schedule after construction
is completed.

At the creditor’s option, the transaction
may be divided into two segments for dis­
closure—one for the construction phase
and one for the amortization.

To remove need for complicated calcula­
tions required to integrate construction
advances with amortization schedule,
where separate disclosures may also be
useful to consumers.

26. Extended disclosure of security inter­
ests and other terms relevant to postcon­
summation events like default and pre­
payment.

Elimination of disclosure details such as
whether security interest applies to “after-acquired” property.

To remove unnecessary technical materi­
al that does not aid credit shopping, com­
plicates disclosures, and causes unpro­
ductive litigation.

27. The three-day right of rescission
where a home is used as security (which
requires that no funds be disbursed dur­
ing the period) may be waived only if the
delay “will jeopardize welfare, health, or
safety or endanger property.”

Waiver may be made simply if consumer
determines there is a “bona fide personal
financial emergency” (the statutory lan­
guage).

To allow customers to obtain their money
promptly (for example, from a second
mortgage). Protection from overreaching
is still provided since the use of preprint­
ed forms to request a waiver is prohibit­
ed.




charge in all c a s e s . Points paid by the

Announcements

Current rule

305

Change

Reason

28. Specific rules apply for treatment of
“cash rebates” from the creditor or the
manufacturer.

At the creditor’s option, cash rebates
need not be incorporated into disclosures.

To avoid necessity for complex rules cov­
ering great variety of cash rebate situa­
tions.

29. In credit advertising an example of a
specific payment schedule must be
shown.

Creditors are given more flexibility in
showing terms of repayment in ads.

To allow creditor to determine most ap­
propriate way to describe its own plan.

30. Disclosure must be given in certain
type size, in certain locations, and not on
more than one page in open-end credit.

These requirements are deleted.

To reduce regulatory detail that inhibited
creditor flexibility and raised numerous
interpretive issues.

31. Creditors may make inconsistent
state-required disclosures, provided they
are so labeled.

Creditor may not give a state disclosure if
Board determines it directly contradicts
federal disclosures.

Avoids broad preemption (which Con­
gress apparently rejected) of state disclo­
sure laws, and permits creditors to con­
tinue to use integrated disclosure/contract
forms.

Reserve regulations, it has been examined line
by line to eliminate nonessential provisions and
to improve and modernize the regulation in other
respects.
The Board will publish in the near future a
commentary on the regulation to provide guid­
ance on its use and to incorporate certain de­
tailed material now in the existing regulation.
The commentary will deal with the substance of
some 1,500 staff interpretations issued over the
past decade. These interpretations will be re­
scinded effective April 1, 1982.
The Board said it had these principal objec­
tives in revising and simplifying Regulation Z:
1. To reduce substantially the burden of com­
pliance.
2. To assist small creditors, such as those
many consumers rely on, by streamlining regula­
tory requirements and by providing additional
guidance in the interpretive commentary that will
accompany the new regulation.
3. To assist the majority of consumers by
focusing the regulation on material disclosures
and the dominant objectives of the law.
4. To make the revised and simplified regula­
tion a model of rational regulation under consum­
er credit protection laws.
The revised regulation is characterized by the
following:
1. Exemption of a number of types of transac­
tions covered by the existing regulation, includ­
ing many informal credit arrangements by doc­
tors, hospitals, and small merchants; levelpayment plans by fuel dealers; retail lay away
plans; many refinancings of debts; and work-out
agreements for delinquent debts.
2. Deletion of a good deal of detail, such as



much required specified terminology and specifi­
cations for type size and location of disclosures.
3. Increased flexibility in a number of ways,
including allowing disclosure of interim and per­
manent construction financing as a single trans­
action or as two transactions; allowing a single
disclosure when a transaction combines both
credit sale and loan features; and permitting
advances made under a loan agreement to be
disclosed separately or as a single transaction.
4. Direct reduction of the burden of compli­
ance for creditors (which is reflected in costs to
the consumer) in such ways as permitting com­
pliance with relevant requirements of other agen­
cies (for example, compliance with the Depart­
ment of Housing and Urban Development’s
disclosure requirements for the amount financed
under the Real Estate Settlement Procedures
Act) to satisfy certain Truth in Lending require­
ments, and by simplifying compliance with the
requirement for a cooling-off period when credit
is advanced involving the use of a residence as
collateral.

Fe e S c h e d u l e f o r C h e c k C l e a r in g
C o l l e c t io n

and

The Federal Reserve Board has approved a fee
schedule for its commercial check clearing and
collection services, effective August 1, 1981.
The Board acted in accordance with the Mone­
tary Control Act of 1980, which requires the
Federal Reserve to set fees for System services
to depository institutions. The Board published a
proposed schedule of fees for check services in
August 1980 and adopted its fees for check

306

Federal R eserve Bulletin □ April 1980

services after consideration of comment re­
ceived; it adopted pricing principles and a sched­
ule of fees for other services last December. The
fee schedule reflects estimated 1981 direct and
indirect costs of providing check clearing and
collection services to depository institutions,
plus a private sector adjustment factor of 16
percent.
A description of the 1981 fee schedule follows.
The Monetary Control Act of 1980 requires that
“over the long run, fees shall be established on the
basis of all direct and indirect costs actually incurred
in providing the Federal Reserve services priced . . .
except that the pricing principles shall give due regard
to competitive factors and the provision of an ade­
quate level of such services nationwide.” The act also
requires that fees for Federal Reserve services take
into account “ the taxes that would have been paid and
the return on capital that would have been provided
had the services been furnished by a private business
firm.” This markup is referred to as the private sector
adjustment factor (PSAF).
The proposed fee schedule for Federal Reserve
Bank commercial check collection services published
by the Board in August 1980 was based on estimates of
the full direct and indirect costs during 1980 of provid­
ing these services, plus a 12 percent PSAF.
The revised fee schedule for commercial check
services, which will become effective on August 1,
1981, when access to these services is opened to all
depository institutions, is based on the estimated full
direct and indirect costs of providing these services in
1981, plus a 16 percent PSAF, which was adopted by
the Board on December 30, 1980, for use in calculating
1981 fee schedules. On average, for all services in all
offices, the 1981 fees are 11 percent higher than those
published for comment in August 1980 due principally
to the higher PSAF added to 1981 costs, operating
costs increasing more rapidly than volume from 1980
to 1981, and the substantial increase in the surcharge
for consolidated shipments (from 0.44 cent to 0.64 cent
per item), which reflects the higher interoffice trans­
portation costs associated with the System’s float
reduction effort. However, in the revised fee schedule,
the PSAF has not been applied to shipping costs
because shipping services (interoffice air transporta­
tion and intraoffice ground courier deliveries to facili­
tate presentment) are provided under contract to the
Federal Reserve from private companies whose prices
include the cost of taxes and financing. Consequently,
it would be inappropriate to impose an additional
PSAF to such shipping costs.
The 1981 fee schedule was calculated by the Federal
Reserve Banks by using a methodology similar to that
used to compute the fee schedule published by the
Board in August 1980. The methodology was standard­
ized among Federal Reserve districts and offices and
the derivation of full costs was based on the Federal



Reserve’s Planning and Control System (PACS). The
cost-accounting principles and procedures used by
Reserve Banks are described in System accounting
manuals available to the public.
The structure of the 1981 fee schedule differs from
those published earlier in one respect: it shows a
separate surcharge for consolidated shipments rather
than a separate price for each consolidated-shipment
deposit type. To calculate the total fee for deposit by
consolidated shipment, the surcharge is added to the
fee for direct deposits at the collecting Federal Re­
serve office. Since the consolidated shipment service
has been expanded from two to five deposit types, use
of the surcharge simplifies the price schedule.
The 1981 fee structure may be regarded as an
interim structure in two respects. First, while it covers
the deposit types described below, individual Federal
Reserve offices may, in 1981, expand or repackage
these services within this structure in response to local
demand to improve the efficiency of the payments
mechanism. For example, the group-sort deposit op­
tion may be offered by a greater number of Federal
Reserve offices, or additional services may be offered
that are combinations of existing services. (The groupsort, consolidated-shipment, and package-sort deposit
options may be combined for certain high volume
payer bank endpoints so that the Federal Reserve
office of first deposit could fine sort the deposit for
final presentment in other Federal Reserve office
territories.) Second, as stated in the Board’s Decem­
ber 30, 1980, notice, this fee structure may be changed
in 1982 to price separately return items and to provide
price incentives to encourage more efficient utilization
of resources in the check clearing and collection
service.
Finally, the Federal Reserve Banks, as announced
in the Board’s August 28, 1980, pricing proposal, are
engaged in the three-phase effort to reduce and/or
price float. The fee schedule for 1981 does, in fact,
reflect the higher costs of operational improvements
undertaken in 1981 to reduce float. Further recommen­
dations will be presented to the Board in 1981.
The 1981 fee schedule for commercial check serv­
ices shown in table 1 is described below.

Service D escriptions1
All checks collected through the Federal Reserve must
ultimately be presented for payment by the Federal
Reserve office responsible for serving the territory in
which the paying institution is located. Depository
institutions generally have two options for depositing
check cash letters with Federal Reserve offices.2 First,
all check cash letters may be deposited at the local
1. This description excludes Federal Reserve processing
of U.S. Treasury checks and postal money orders deposited
separately.
2. A cash letter contains a listing of individual checks and
the packaged checks.

Announcements

Federal Reserve office (the Federal Reserve office
whose territory includes the depositing institution).3
Second, appropriately sorted cash letters may be
3.
A depositing institution unfamiliar with Federal Reserve
territories should contact any Federal Reserve office to
determine the name and address of its local Federal Reserve
office.

307

deposited at the Federal Reserve office that serves the
territory in which the paying institution is located. Not
all services described below are available at all offices.
An institution should consult with its local Federal
Reserve office to ascertain the services available
there.
Cash letters deposited at the local Federal Reserve

Fee schedule for Federal Reserve commercial check services, by types of cash letter deposits,1
effective August 1, 1981
Cents per item

Sent to Federal
Reserve office

Boston
^
Lewiston
1............
Windsor Locks
New York
Buffalo
Jericho
Cranford
Utica
Philadelphia
Cleveland
Cincinnati
Pittsburgh
Columbus
Richmond
Baltimore
Charlotte
Columbia
Charleston
Atlanta
Birmingham
Jacksonville
Nashville
New Orleans
Miami
Chicago
Detroit
Des Moines
Indianapolis
Milwaukee
St. Louis
Little Rock
Louisville
Memphis
Minneapolis
Helena
Kansas City
Denver
Oklahoma City
Omaha
Dallas
Houston
San Antonio
El Paso
San Francisco
Los Angeles
Portland
Salt Lake City
Seattle

Accepted only from
institutions located in
the territory served by
the F.R. office
Mixed

Other
Fed

Accepted at the collecting Federal Reserve office from
institutions located in any F.R. office territory2
Non­
machineable3
City

Package
sort

Group
sort
1.65

1.81

4.29

1.60

1.81

.42

2.87

5.30

2.74

2.87

.47

1.66

3.99

1.51

1.66

.79

1.46

6.08

2.30

4.64

1.79

2.30

.87

1.98

5.33

1.92

4.16

1.48

1.92

.82

5.12

1.85
1.97
1.50
1.52
1.75

4.03
4.37
3.96
4.01
4.10

1.39
1.67
1.29
1.37
1.40

1.85
1.97
1.50
1.52
1.75

.67
.63
.49
.44
.52

5.54
5.86
5.24
4.68
5.30

1.86

4.15

1.46

1.86

.98

6.13

2.94
1.57
1.99
1.50
1.82

5.02
3.98
4.17
3.79
4.06

2.36
1.46
1.65
1.24
1.41

2.94
1.57
1.99
1.50
1.82

.94
.56
.73
.48
.61

6.29
3.97
5.88
3.23
3.59

2.51

4.54

2.06

2.51

.78

5.09

2.22
2.80
1.63
1.90
1.76

4.68
4.67
3.97
4.11
4.06

1.80
2.12
1.24
1.52
1.27

2.22
2.80
1.63
1.90
1.76

.62
.45
.72
.67
.46

2.10

5.60
7.55
7.98
6.94
6.26

2.22

4.64

1.74

2.22

.80

1.64

7.19

1.71

4.12

1.54

1.71

.58

.64

.64

.64

Consolidated shipment surcharge per item for
transportation from local Federal Reserve office to
collecting Federal Reserve office .........................

1. Depository institutions should consult with their local Federal
Reserve office about the availability of check services at any Federal
Reserve office, since all services are not available at all offices.
2. Accepted by a Federal Reserve office for presentment to deposi­
tory institutions located within that Federal Reserve office territory.



Country
or RCPC

5.54
9.04

7.99

.64

.64

3. This fee applies to cash letters that cannot be computer processed
by the Federal Reserve. It is not a surcharge. The availability schedule
for nonmachineable items is different from the availability schedule
for comparable machineable items.

308

Federal R eserve Bulletin □ April 1980

office are referred to generally as intraterritory depos­
its, while cash letters deposited at other Federal
Reserve offices are referred to as interterritory depos­
its. Interterritory deposits may be (1) delivered to the
local Federal Reserve office for shipping as “ consoli­
dated shipments” by using transportation provided by
the Federal Reserve, or (2) shipped as “ direct ship­
ments” to another Federal Reserve office by using
transportation provided by the sending depository
institution. In all instances, credit for cash letter
deposits is posted to accounts held at the local Federal
Reserve office of the depository institution even
though these cash letters may have been deposited at
another Federal Reserve office.
This description of services is not intended as a
comprehensive guide on how to use Federal Reserve
check collection services. Any depository institution
desiring to use Federal Reserve services is urged to
consult first with its local Federal Reserve office. A
depository institution that has a small number of
checks daily for collection may need to become famil­
iar only with the mixed cash letter service offered by
its local Federal Reserve office. Any institution wish­
ing to perform some preliminary work such as sorting
or interoffice shipping will have to become familiar
with all of the services shown in the fee schedule.
The following types of cash letter deposit services
are available:
Cash letters accepted only from institutions located
within the local Federal R eserve office territory. The

fees for the services described below can be found in
table 1 by reading across the row of fees listed for each
local Federal Reserve office.
“ Mixed” cash letters contain unsorted checks that
can be any mixture of city, country, and regional
check processing center (RCPC) checks. These cash
letters may also contain checks drawn on depository
institutions in other Federal Reserve territories and
U.S. Treasury checks and postal money orders. Each
Federal Reserve office has established a maximum
number of items (checks or other cash items) that may
be included in mixed cash letters.4 Only depository
institutions with cash letter deposits, which on average
do not exceed this maximum number of checks, are
eligible to deposit mixed cash letters. Credit for checks
in mixed cash letters is based on availability as calcu­
lated by the local Federal Reserve office.
“ Other Fed” cash letters contain checks drawn on
depository institutions located in Federal Reserve
territories other than the local Federal Reserve terri­
tory. Prices for collecting these checks reflect the
resources required to sort each check at two Federal
Reserve offices and to transport the items between
these offices. Other Fed cash letters may be deposited
only at the local Federal Reserve office.

4. An institution desiring to use this service should consult
with its local Federal Reserve office for additional informa­
tion.



Cash letters a ccepted from institutions located in
any Federal R eserve territory. The fees for check cash

letter deposits are determined according to the fees for
check processing at the collecting Federal Reserve
office, and can be found on the fee schedule by (1)
location of the office and (2) type of cash letter deposit.
For example, items drawn on designated city area
institutions within the Boston office territory are
“ Boston city items” and are identified by routing
symbols 0110 or 2110, and the fee is 1.60 cents per
item.5 In contrast, items drawn on institutions located
in the Indianapolis office RCPC zone are “Indianapo­
lis RCPC items” and are identified by routing symbols
0749 or 2749, and the fee for such items is 1.50 cents
per item. Consolidated shipments are subject to an
additional 0.64 cent per item transportation fee.
“ City” cash letters contain only checks drawn on
depository institutions located within the collecting
Federal Reserve office territory assigned city routing
symbols. These institutions are generally located in an
area that has been designated as the city check-clear­
ing zone by the collecting Federal Reserve office
When deposited at the collecting Federal Reserve
office, credit for city cash letters is immediate (that is,
funds are available on the same day if the cash letter is
received prior to the cut-off hour established by the
collecting Federal Reserve office).
“ RCPC” cash letters contain only checks that are
drawn on depository institutions in the collecting
Federal Reserve office territory that are located in
areas designated as RCPC zones and assigned RCPC
routing symbols.6 RCPC checks drawn on depository
institutions in RCPC zones are usually transported by
courier from the collecting Federal Reserve office for
presentment. When deposited at the collecting Federal
Reserve office, credit for RCPC cash letters is immedi­
ate (the same business day) if the cash letters are
deposited by 12:01 a.m.
“ Country” cash letters contain only checks that are
drawn on depository institutions located in the collect­
ing Federal Reserve office territory that are assigned
country routing symbols. These institutions are locat­
ed outside the designated city area of the collecting
Federal Reserve office and are also outside any RCPC
zone. Credit for country cash letters is available one
day after timely deposit at the collecting Federal
Reserve office.
Each “package-sort” cash letter contains checks
drawn only on a single institution located within the
5. A routing symbol is defined as the first four digits of the
routing transit number. For a listing of routing symbol
assignments by deposit type within Federal Reserve terri­
tories, depository institutions should contact their local Fed­
eral Reserve office for a copy of the booklet entitled “ Check
Collection, Federal Reserve System.” For a detailed discus­
sion of routing numbers, depository institutions should con­
sult the Rand McNally publication, “ Key to Routing Num­
bers.”
6. RCPC zones are designated areas within the territories
of Federal Reserve offices, but outside Federal Reserve
cities. In these zones the Federal Reserve is able to present
checks for payment and collection on the same day they are
deposited at the local Federal Reserve office.

Announcements

collecting Federal Reserve office territory and is pack­
aged for delivery to that institution. Reflecting the
sorting work done by the depositing institution, Feder­
al Reserve involvement is limited to presentment,
settlement, adjustments, and returns. As a result, the
fee for package sorts is lower than the fees for all other
categories of cash letters at the collecting Federal
Reserve, and later cut-off hours are applicable to
package-sort cash letters. Credit is passed by the local
Federal Reserve office according to the same availabil­
ity schedule for the type of items contained in the
package-sort cash letter (for example, city, country, or
RCPC).
Each “group-sort” cash letter contains checks of a
specific type (city, RCPC, or country) drawn on two or
more depository institutions that are designated by the
collecting Federal Reserve office. Because the depos­
iting institution has already done some sorting, this
service requires less handling by the Federal Reserve
than some other deposit types and the fee reflects this
difference. Later cut-off hours are applicable to groupsort cash letters and credit is passed to depositing
institutions by the local Federal Reserve office accord­
ing to the schedule for the type of items in the cash
letter—city, RCPC, and country items.

309

“ Direct-shipment” (direct sends) cash letters are
those for which transportation to the collecting Feder­
al Reserve office is arranged by the depositing institu­
tion. Fees for direct-shipment cash letter deposits are
the same as fees charged to local depository institu­
tions for the respective class of items at the collecting
Federal Reserve office. Cash letters eligible for direct
shipment are city, RCPC, country, nonmachineable,
package-sort, and group-sort. Credit for these deposits
is given by the local Federal Reserve office based on
availability schedules for direct shipments.
Nonm achineable cash letter deposits. Nonmachin­
eable cash letters contain checks that were rejected
from the reader-sorter equipment of a depositing finan­
cial institution, as well as those checks that are muti­
lated or cannot be computer processed. Fees for
nonmachineable checks reflect the additional manual
handling required to process these exception items.
Credit for nonmachineable checks is generally de­
ferred one day beyond normal availability for the same
type check (for example, credit for a city nonmachin­
eable check would be available the day after timely
deposit at the collecting Federal Reserve office).

Interterritory cash letters sent to other Federal
Reserve offices. Before an attempt is made to use

Fee Schedules

interterritory cash letter deposit services, an institu­
tion must obtain authorization from its local Federal
Reserve office to assure accurate and timely handling.
After obtaining authorization, depositing institutions
may send cash letters to the appropriate Federal
Reserve office other than the local Federal Reserve
office. The purpose of this method of deposit is to
improve availability, generally. Such interterritory de­
posits of cash letters must be destined for the collect­
ing Federal Reserve office; that is, the office responsi­
ble for presenting the items in the cash letters to the
payer institutions within its territory.
Depositing institutions should consult with their
local Federal Reserve office about the availability of
each cash letter service at other Federal Reserve
offices.
The two ways in which transportation of interterri­
tory deposits can be arranged, consolidated shipments
and direct shipments, are described below.
“ Consolidated shipment” cash letters are delivered
to the local Federal Reserve office for shipment to the
collecting Federal Reserve office. Since the items are
not processed by the local Federal Reserve office, the
total fee for these items is the sum of (1) a surcharge
for consolidated shipments to recover the cost of
transporting these checks between Federal Reserve
offices, and (2) the appropriate item fee at the collect­
ing Federal Reserve office. Cash letters eligible for
consolidated shipment are city, RCPC, country, nonmachineable, package-sort, and group-sort. Credit for
these deposits is given by the local Federal Reserve
office according to availability schedules for consoli­
dated shipments.

Each fee in the check service fee schedule covers
receiving, sorting, reconciling, and delivery. These
fees do not include charges for special intraoffice
deposit arrangements that individual Reserve Banks
may establish.
The per-item fees include the costs associated with
returns and adjustments. However, consideration is
being given to the establishment of separate prices for
return items. No charges will be made for postal
money orders or U.S. Treasury checks deposited
separately because such processing is conducted by
the Federal Reserve as part of its fiscal agency respon­
sibilities. When such items are not deposited separate­
ly, they will be assessed the same fee as commercial
checks deposited in mixed cash letters.
“ Collecting Federal Reserve office,” as used in
table 1, refers to the Federal Reserve office responsi­
ble for presenting cash letters to the institutions within
its territory. Thus, the local Federal Reserve office
would be the collecting Federal Reserve office if the
institution on which the checks are drawn is located
within the same Federal Reserve territory as the
depositing institution.




M e e t in g o f
C o n s u m e r A d v is o r y C o u n c il

The Federal Reserve Board has announced that
its Consumer Advisory Council met on April 1516, 1981.

310

Federal R eserve Bulletin □ April 1980

The Council, with 30 members who represent
a broad range of consumer and creditor interests,
advises the Board on its responsibilities regard­
ing consumer credit protection legislation. The
Council generally meets four times a year.

Ch a n g e in B o a r d S taff

The Board of Governors has announced the
appointment of David Michael Manies, Assistant
Vice President of the Federal Reserve Bank of
Kansas City, as Assistant Secretary of the Board
for a six-month period beginning April 1, 1981.
Mr. Manies replaces Jefferson Walker, who
has returned to the Federal Reserve Bank of
Richmond. Mr. Manies holds B.A. and M.A.
degrees from the University of Missouri at Kan­
sas City and attended the Colorado School of
Banking.

burden of assembling time series by providing a
single source of historical continuations of the
statistics carried regularly in the F e d e r a l R e ­
s e r v e B u l l e t i n . The D ig e st also offers a con­
tinuation of series that formerly appeared regu­
larly in the B u l l e t i n , as well as certain special,
irregular tables that the B u l l e t i n also once
carried. The domestic nonfinancial series includ­
ed are those for which the Board of Governors is
the primary source.
This issue of the D ig e st covers, in general,
data for the years 1971 through 1979. It serves to
maintain the historical series first published in
Banking and M on etary S ta tistics, 1941-70, and
for many series it supplants the earlier issues of
the D ig e st— for 1971-75, 1972-76, 1973-77, and
1974-78.
Copies of the D ig e st are available from Publi­
cations Services, Board of Governors of the
Federal Reserve System, Washington, D.C.
20551. The price is $20.00 per copy.

R e v is e d O T C S t o c k L is t

The Federal Reserve Board has published a
revised list of over-the-counter (OTC) stocks
that are subject to its margin regulations, effec­
tive April 3, 1981.
The list supersedes the revised list of OTC
margin stocks that was issued on October 6,
1980. Changes that have been made in the list,
which now includes 1,307 OTC stocks, are as
follows: 85 stocks have been included for the
first time; 20 stocks previously on the list have
been removed for substantially failing to meet
the requirements for continued listing; and 62
stocks have been removed because they are now
listed on a national securities exchange or be­
cause the companies were acquired by another
firm.
The list is available on request from Publica­
tions Services, Board of Governors of the Feder­
al Reserve System, Washington, D.C. 20551.

A d m is s io n o f S ta te B a n k s to
M e m b e r s h ip in th e F e d e r a l R e s e r v e
S ystem

N e w P u b l ic a t io n

Texas

The A nnual S ta tistic a l D ig e s t , 1971-1979 is now
available. This new ten-year D ig e st is designed
as a compact source of economic—and especial­
ly financial—data. The object is to lighten the

Virginia

The following banks were admitted to member­
ship in the Federal Reserve System during the
period March 11 through April 10, 1981:
California

Simi V a lley .......................... Simi Valley Bank
C olorado

B asalt........................................ Bank of Basalt
Carbondale...................... Roaring Fork Bank
G lenw ood .................. Valley Bank and Trust
Snow m ass........................ Bank of Snowmass
M ichigan

Kalamazoo . . . Old Kent Bank of Kalamazoo
M ontana

Bozeman . . . First Citizens Bank of Bozeman
O regon

N ew b erg........................ Newberg State Bank
M cAllen................................ Texas State Bank




H a y s i.................. Dickenson-Buchanan Bank
Timberville .Farmers and Merchants Bank of
Rockingham

311

Record o f Policy Actions of the
Federal Open Market Committee
M eetin g H eld
on F eb ru a ry 2 - 3 , 1981

D om estic Policy Directive
The information reviewed at this
meeting indicated that real gross na­
tional product expanded at a 5 per­
cent annual rate in the fourth quar­
ter. Average prices, as measured by
the fixed-weight price index for
gross domestic business product, in­
creased at an annual rate of about
9 l/ 2 percent. Over the year ending in
the fourth quarter of 1980, real GNP
was unchanged and nominal GNP
rose about 93/4 percent.
The index of industrial production
rose an estimated 1 percent in De­
cember, following substantial gains
in each of the four preceding
months. By December, the index
had regained much of the ground lost
earlier in the year. Capacity utiliza­
tion in manufacturing increased fur­
ther in December to 79.8 percent,
4.9 percentage points above its July
trough but well below earlier peaks.
Nonfarm payroll employment ex­
panded substantially in December
for the fifth consecutive month, and
the unemployment rate was essen­
tially unchanged at about l l/ 2 per­
cent. Growth in manufacturing em­
ployment slowed in December, but
the average workweek lengthened
0.3 hour to 40.2 hours.
The dollar value of retail sales
declined in December, according to
the advance report, after a sizable
gain over the preceding six months.
Sales of new automobiles were at an
annual rate of 9 million units in De­
cember, virtually unchanged from
the rate in the preceding five
months.



The Department of Commerce
survey of business spending plans
taken in November and December
suggested that expenditures for plant
and equipment would rise about 103/4
percent in 1981, following an expan­
sion of about 83/4 percent in 1980.
After allowance for respondents’ ex­
pectations for price increases, how­
ever, the survey results implied no
increase in real outlays for 1981.
In December private housing
starts remained at the annual rate of
about l l/ 2 million units recorded in
the previous three months. Newly
issued permits for residential con­
struction declined, and sales of both
new and existing houses fell some­
what.
Producer prices of finished goods
continued to rise at a rapid pace in
December, but the rate of increase
over the fourth quarter was consid­
erably below the exceptional pace in
the third quarter. Consumer prices
also rose at a rapid pace in Decem­
ber, reflecting not only continued
sharp advances in food prices and a
renewed upsurge in energy prices,
but sizable increases in most other
categories as well. Over the year
ending in December 1980, producer
prices of finished goods and consum­
er prices rose about l l 3/4 and 12V2
percent respectively, compared with
increases of about I2 V2 and \ 3 l/ 4
percent over the preceding year.
Over the last few months of 1980,
the rise in the index of average hour­
ly earnings was at about the rapid
pace recorded earlier in the year.
Over the year 1980 the index was up
9 x/2 percent compared with a rise of
about 8 percent over 1979.
In foreign exchange markets the

312

Federal R eserve Bulletin □ April 1981

trade-weighted value of the dollar
against major foreign currencies had
risen about 3 l/ 2 percent over the in­
terval since the Committee’s meet­
ing in December. There were diver­
gent changes against individual cur­
rencies: the dollar appreciated sub­
stantially against the German mark
and other continental European cur­
rencies, and depreciated somewhat
against the pound sterling, the Japa­
nese yen, and the Canadian dollar.
The U.S. trade deficit in the fourth
quarter of 1980 widened from the
exceptionally low rate in the third
quarter but remained substantially
less than the rate in the first half.
The value of exports rose slightly in
the fourth quarter, but the value of
imports increased by a larger
amount, mainly as a result of higher
oil imports.
At its meeting on December 1819, the Committee had decided that
open market operations in the period
until this meeting should be directed
toward expansion of reserve aggre­
gates associated with growth of
M-1 A, M-1B, and M-2 over the first
quarter along a path consistent with
the ranges for growth in 1981 con­
templated in July 1980, abstracting
from the effects of shifts into NOW
accounts; the midpoints of those
ranges were 4 l/ 4 percent, 43/4 per­
cent, and 7 percent respectively.1
The members agreed that some
shortfall in growth would be accept­
able in the near term if it developed
in the context of reduced pressures
in the money market. If it appeared

during the period before the next
regular meeting that fluctuations in
the federal funds rate, taken over a
period of time, within a range of 15
to 20 percent were likely to be incon­
sistent with the monetary and relat­
ed reserve paths, the Manager for
Domestic Operations was promptly
to notify the Chairman, who would
then decide whether the situation
called for supplementary instruc­
tions from the Committee.
During the course of the inter­
meeting period, incoming data for
the latter part of December and sub­
sequent weeks indicated that a
shortfall in growth of the monetary
aggregates, after adjustment for the
estimated effects of shifts into NOW
accounts, had developed from the
short-run objectives set forth by the
Committee. Required reserves con­
tracted in relation to the supply of
reserves being made available
through open market operations. Af­
ter the turn of the year, member
bank borrowings declined; they av­
eraged about $1.2 billion in the two
weeks ending January 14, compared
with about $1.6 billion in the preced­
ing four weeks. Nevertheless, the
federal funds rate remained in a
range of 19 to 20 percent, perhaps in
part because of unusually strong de­
mands for excess reserves and an
inclination of some banks to increase
their overnight borrowings in the
funds market in expectation of nearterm declines in interest rates. Bor­
rowings moved up to an average of
$1.8 billion in the statement week
ending January 28, while the funds
rate declined to a range of 17 to 18
1.
M-1 A comprises demand deposits at
percent in the days preceding this
commercial banks plus currency in circula­
meeting.
tion. M-1B comprises M-1 A plus negotiable
order of withdrawal (NOW) and automatic
M-1 A and M-1B declined in De­
transfer service (ATS) accounts at banks and
cember at annual rates of about 11
thrift institutions, credit union share draft
percent and 9 percent respectively.
accounts, and demand deposits at mutual
Growth in these aggregates in Janu­
savings banks. M-2 contains M-1B and sav­
ary was affected greatly by the intro­
ings and small-denomination time deposits at
all depository institutions, overnight repur­
duction of NOW accounts on a na­
chase agreements (RPs) at commercial banks,
tionwide basis as of December 31,
overnight Eurodollars held at Caribbean
1980. It had been anticipated that
branches of member banks by U.S. residents
shifts into NOW accounts would sig­
other than banks, and money market mutual
fund shares.
nificantly retard the growth of M-1 A




Record o f Policy Actions o f the FOMC

and enhance the growth of M-1B
during 1981. Such shifts during the
first few weeks of the year were
much larger than generally had been
expected, and available data sug­
gested a very sharp decline in M-l A
in January and a substantial rise in
M-1B. However, after adjustment
for shifts into NOW accounts based
on surveys of commercial banks and
other data, both M-l A and M-1B
were estimated to have risen moder­
ately in January.
Growth in M-2 slowed markedly
in December to an annual rate of
about 2% percent. Growth apparent­
ly accelerated to a relatively rapid
rate in January, however, as money
market mutual fund shares posted a
sizable increase and growth in smalland large-denomination time depos­
its remained substantial.
Growth in total credit outstanding
at U.S. commercial banks slowed
somewhat in December from the
rapid pace of other recent months.
The slowing reflected a deceleration
in the pace of investment acquisi­
tions and in expansion of loans, in­
cluding business loans. However,
the moderation in the growth of busi­
ness loans at commercial banks was
accompanied by stepped-up issu­
ance of commercial paper and long­
er-run debt instruments by nonfinan­
cial businesses. For the period from
the fourth quarter of 1979 to the
fourth quarter of 1980 total commer­
cial bank credit grew at an annual
rate of 7.9 percent, well within the 6
to 9 percent range adopted by the
Committee for the year.
Market interest rates fluctuated
considerably over the intermeeting
period but declined on balance from
their mid-December highs. At the
time of this meeting, short-term
rates were down about 2!/4 to 4V2
percentage points and long-term
rates about / 2 to 1 percentage point
from their December peaks. During
the intermeeting interval, the prime
rate charged by commercial banks
on short-term business loans was
raised to a record 2 1 percent and



subsequently reduced to 20 percent.
In home mortgage markets, average
rates on new commitments for fixedrate loans at savings and loan associ­
ations reached 14.95 percent in the
latter part of December and edged
off slightly in subsequent weeks.
The staff projections presented at
this meeting suggested that the
buoyancy of economic activity in the
final quarter of 1980 would extend
into the first quarter of the new year
but that over the four quarters of
1981 real GNP would change little
for the second consecutive year.
Such a sluggish performance of the
economy would be associated with
an increase in the rate of unemploy­
ment during 1981. The rise in the
fixed-weight price index for gross
domestic business product was pro­
jected to remain rapid, although not
quite so rapid in the second half of
the year as in the first half.
In the Committee’s discussion of
the economic situation and outlook,
members continued to stress the dif­
ficulties of forecasting output and
prices in the current environment of
high inflation and volatile expecta­
tions, and they recognized also the
uncertainties surrounding the imple­
mentation of the fiscal and other
economic policies soon to be an­
nounced by the new administration
inaugurated on January 20. In re­
sponse to a request to set forth their
views concerning the outlook, a
number of members expressed the
opinion that the most likely outcome
for the period through the fourth
quarter of 1981 was little change in
real GNP with a significant increase
in the unemployment rate, as pro­
jected by the staff. Other members
anticipated a small rise in real GNP
over the year, generally with some­
what less increase in unemployment,
and two members projected a small
decline in real GNP with a larger
increase in unemployment. All of the
members expected continuation of a
high rate of inflation over the year,
although the anticipated rates of in­
crease differed.

313

314

Federal R eserve Bulletin □ April 1981

by about l l/ 4 percentage points.
Alternatively, measured growth of
M-l A could be adjusted upward to
6V4 percent and that of M-IB adjust­
ed downward to 63/4 percent. With
either method of adjustment, growth
of each aggregate marginally exceed­
ed the upper bound of its range.
In contemplating ranges for 1981,
the Committee continued to face un­
usual uncertainties concerning the
forces affecting monetary growth, in
part because of sizable variations
evident in the demand for both nar­
rowly and broadly defined money in
relation to nominal GNP. In the cur­
rent year, moreover, relationships
among the measured rates of growth
for the monetary aggregates were
subject to large changes resulting
from the introduction of NOW ac­
counts on a nationwide basis as au­
thorized by the Monetary Control
Act of 1980. Specifically, shifts into
NOW accounts from demand depos­
its were expected to retard growth of
M-l A significantly while shifts from
savings deposits and other interestbearing assets would enhance
growth of M-IB. However, esti­
mates of the impact of such shifts on
measured growth of the two aggre­
gates could only be tentative, be­
cause of the overall size of the shift
and uncertainty about the ultimate
sources of the funds. In January, the
first month after their nationwide
authorization, NOW accounts ex­
panded far more than had been an­
ticipated. It was expected that the
flow of funds into NOW accounts
would subside in coming months,
and also that the proportion of the
funds representing shifts from de­
mand deposits would be gradually
reduced.
Shifts of funds into NOW ac­
counts were not expected to affect
growth of the broader monetary ag­
gregates significantly, because virtu­
ally all of the funds likely to be
shifted into such accounts are al­
2. M-3 is M-2 plus large-denomination time
ready
included in M-2. It was antici­
deposits at all depository institutions and term
pated, however, that growth of both
RPs at commercial banks and savings and
M-2 and M-3 would be somewhat
loan associations.

At this meeting, the Committee
completed the review, begun at the
meeting in December 1980, of the
ranges for growth of monetary ag­
gregates over the period from the
fourth quarter of 1980 to the fourth
quarter of 1981 within the frame­
work of the Full Employment and
Balanced Growth Act of 1978. At its
meeting in July 1980, the Committee
had reaffirmed ranges for growth
over the year ending in the fourth
quarter of 1980 of 3 V2 to 6 percent for
M-1A, 4 to 6V2 percent for M-IB, 6
to 9 percent for M-2, and 6 l/ 2 to 9l/2
percent for M-3, with an associated
range of 6 to 9 percent for growth of
commercial bank credit.2 For the
year ending in the fourth quarter of
1981, the Committee had tentatively
indicated reductions on the order of
V2 percentage point in the ranges for
growth of M-1A, M-IB, and M-2,
abstracting from institutional influ­
ences affecting the behavior of the
aggregates.
In reviewing the ranges for mone­
tary growth in 1981, the Committee
noted that from the fourth quarter of
1979 to the fourth quarter of 1980,
M-l A grew 5 percent; M-IB, 7!/4
percent; M-2, 9% percent; and M-3,
10 percent. For M-1A and M-IB,
however, acturi growth in 1980 was
not comparable to the Committee’s
ranges for the year. The ranges had
been established on the assumption
of virtually no further shifts into
ATS-NOW accounts from demand
and other accounts; but as the year
progressed, and particularly after
passage of the Monetary Control
Act, further significant shifts be­
came apparent. Taking account of
the estimated effects of such shifts,
which have no significance for mon­
etary policy, the basic range for
growth of M-IB in 1980 could be
adjusted upward by about V2 per­
centage point and the range for
M-l A could be adjusted downward




Record o f Policy Actions o f the FOMC

stronger in relation to growth of the
narrower aggregates, adjusted for
the flows into NOW accounts, than
projected in July 1980, when ranges
for 1981 were first considered. The
public has shown an increased pref­
erence for holding savings in depos­
its included in the nontransaction
component of M-2, as changes in
regulatory ceilings on interest rates
have made small time and savings
deposits more attractive relative to
market instruments and as money
market mutual funds have become
more popular.
In the Committee’s discussion of
its objectives for 1981, the members
agreed that some further reduction
in the ranges for monetary growth,
abstracting from the effects of shifts
into NOW accounts, was appropri­
ate in line with the longstanding goal
of contributing to a reduction in the
rate of inflation and providing the
basis for restoration of economic
stability and sustainable growth in
output of goods and services. The
members differed somewhat in their
views concerning the extent of the
reductions that might be made and
also about the particular aggregates
for which longer-run ranges should
be specified.
For M-1 A and M-1B, most mem­
bers favored specification of ranges,
abstracting from the NOW account
effect, that were V2 percentage point
lower than the ranges for 1980. One
member advocated a reduction of 1
percentage point, particularly be­
cause growth over 1980 had appre­
ciably exceeded the midpoints of the
adjusted ranges for that year. Anoth­
er member preferred not to specify
ranges for the narrower monetary
aggregates at all, because he be­
lieved that the NOW account effects
could not be reliably estimated. In
the view of one other member, con­
fusion could be lessened by focusing
attention entirely on M-1B, because
it would be less subject than M-1 A to
the distorting effects of the flows
into NOW accounts.
Members differed somewhat more



in their views concerning the broad­
er monetary aggregates, in part be­
cause of uncertainty about the po­
tential effects of interest rate
relationships on the behavior of the
nontransaction component. Reflect­
ing an expectation that growth of the
broader aggregates would increase
relative to that of the narrower ag­
gregates adjusted for expansion of
NOW accounts, a number of mem­
bers favored specification of ranges
slightly higher than those for 1980.
However, most members believed
that sufficient allowance for the pos­
sibility of relatively stronger growth
of the broader aggregates would be
made by reiterating the 1980 ranges
for them in association with ranges
for the narrower aggregates that
were V2 percentage point lower than
those for 1980. In this connection, it
was stressed that specification of
ranges rather than precise rates for
growth over the year inherently pro­
vided for some change in relative
rates of growth among the monetary
aggregates, and that growth of both
M-2 and M-3 might well be in the
upper portions of their ranges. Even
so, growth of the broader aggregates
would be less than actual growth in
1980. One member preferred to fo­
cus exclusively on the narrower ag­
gregates, not specifying ranges for
the broader aggregates.
At the conclusion of the discus­
sion, the Committee decided to
specify ranges for growth of M-1 A
and M-1B, adjusted for the effects of
flows into NOW accounts, that were
V2 percentage point lower than those
for 1980 and to retain the 1980 ranges
for M-2 and M-3. Thus, the Commit­
tee adopted the following ranges for
growth of the monetary aggregates
over the period from the fourth quar­
ter of 1980 to the fourth quarter of
1981: M-1 A, 3 to 5 l/ 2 percent; M-1B,
3V2 to 6 percent; M-2, 6 to 9 percent;
and M-3, 6 l/ 2 to 9 l/ 2 percent. The
associated range for growth of com­
mercial bank credit was 6 to 9 per­
cent. It was emphasized that at an
early date the Committee might wish

315

316

Federal R eserve Bulletin □ April 1981

to reconsider the longer-run ranges
in the light of developing conditions
and that in any case it would recon­
sider them in July within the frame­
work of the Full Employment and
Balanced Growth Act of 1978. It was
understood, moreover, that the dis­
torting effects of shifts into NOW
accounts would change during the
year and that other short-run factors
might cause considerable variation
in annual rates of growth from one
month to the next and from one
quarter to the next. The Committee
planned that periodically the staff
would provide estimates of the ef­
fects that shifts into ATS-NOW ac­
counts were having on the reported
data.
The Committee adopted the following
ranges for growth in monetary aggre­
gates for the period from the fourth quar­
ter of 1980 to the fourth quarter of 1981,
abstracting from the impact of introduc­
tion of NOW accounts on a nationwide
basis: M-1A, 3 to 5 l/ 2 percent; M-1B, 3V2
to 6 percent; M-2, 6 to 9 percent; and
M-3, 6 l/ 2 to 9 l/ 2 percent. The associated
range for bank credit is 6 to 9 percent.
Votes for this action: Messrs.
Volcker, Gramley, Guffey, Morris,
Partee, Rice, Roos, Schultz, Solo­
mon, Mrs. Teeters, and Mr. Winn.
Vote against this action: Mr. Wallich.

Mr. Wallich dissented from this
action because he thought that the
ranges adopted for growth of M-l A
and M-1B were too high. He be­
lieved that somewhat lower ranges
would provide for adequate mone­
tary growth in 1981, because he ex­
pected a further downward shift in
money demand and also because
growth of the monetary aggregates
over the past year generally had ex­
ceeded the specified ranges.
In reviewing its objectives for
monetary growth from December
1980 to March 1981 in light of the
ranges adopted for the year from the
fourth quarter of 1980 to the fourth
quarter of 1981, the Committee took
note of the recent behavior of the
monetary aggregates. Specifically,
growth of the aggregates in both the



third ami the fourth quarters of 1980
(quarterly average basis) had been
strong, more than compensating for
the weakness earlier in the year.
From the fourth quarter to January
1981, however, the annual rates of
growth of M-l A and M-1B had fallen
below the lower ends of the ranges
for 1981, reflecting the sharp de­
clines in those aggregates in Decem­
ber and the only partial recovery in
January.
In tlmt light, the members in gen­
eral agreed that operations in the
period before the next regular meet­
ing scheduled for March 31 should
be directed toward a gradual restora­
tion of growth of M-l A and M-1B
(adjusted for NOW account effects)
to rates consistent with their longerrun ranges. Almost all members
were willing to accept continuation
of relatively slow growth in relation
to the ranges for 1981 at least
through March in recognition that it
would generally compensate for the
rapid growth during the fourth quar­
ter of 1980, which carried growth for
the year slightly above the upper
bounds of the ranges for the year.
They differed somewhat over the
acceptable amount of growth. One
member preferred to direct opera­
tions toward raising growth of the
aggregates to the midpoints of their
1981 ranges by March.
In accepting the gradual approach
toward encouraging rates of mone­
tary growth consistent with the
ranges adopted for 1981, several
members commented on the danger
of potentially confusing interpreta­
tions of policy intentions and also of
possible instability in financial mar­
kets. It was observed, for example,
that efforts to raise monetary growth
promptly toward the longer-run
paths could have the undesirable
consequences of encouraging first
relatively rapid growth and then an
abrupt deceleration. A few members
also suggested that the gradual ap­
proach to making up the shortfall
would be acceptable provided that it
proved to be compatible with rela­

Record o f Policy Actions o f the FOMC

tive stability or some easing in mon­
ey market pressures.
At the conclusion of the discus­
sion, the Committee decided to seek
behavior of reserve aggregates asso­
ciated with growth of M-l A and
M-IB over the period from Decem­
ber to March at annual rates of 5 to 6
percent and in M-2 of about 8 per­
cent, abstracting from the impact of
flows into NOW accounts. Those
rates were associated with growth of
M-l A, M-IB, and M-2 from the
fourth quarter of 1980 to the first
quarter of 1981 at annual rates of
about 2 percent, 23/4 percent, and 7
percent respectively. The members
recognized that shifts into NOW ac­
counts would continue to distort
measured growth in M-l A and M-IB
to an unpredictable extent and that
operational paths would have to be
developed in the light of evaluation
of those distortions. If it appeared
during the period before the next
regular meeting that fluctuations in
the federal funds rate, taken over a
period of time, within a range of 15
to 20 percent were likely to be incon­
sistent with the monetary and relat­
ed reserve paths, the Manager for
Domestic Operations was promptly
to notify the Chairman, who would
then decide whether the situation
called for supplementary instruc­
tions from the Committee.
The following domestic policy di­
rective was issued to the Federal
Reserve Bank of New York:
The information reviewed at this meet­
ing suggests that real GNP expanded
substantially in the fourth quarter of 1980
and that prices on the average continued
to rise rapidly. In December industrial
production and nonfarm payroll employ­
ment expanded further, and the unem­
ployment rate was essentially unchanged
at about lV 2 percent. Retail sales de­
clined, however, following a sizable gain
over the preceding six months. Housing
starts were about unchanged for the third
month. Over the last few months of 1980,
the rise in the index of average hourly
earnings was at about the rapid pace
recorded earlier in the year.
The weighted average value of the
dollar in exchange markets has risen
further over the past six weeks. The



U.S. trade deficit in the final quarter of
1980 widened from the exceptionally low
rate in the third quarter but remained
substantially less than the rate in the first
half.
M-l A and M-IB declined sharply in
December; in January, after adjustment
of the actual figures for the estimated
effects of shifts into NOW accounts,
these aggregates recovered in part.
Growth in M-2 slowed markedly in De­
cember but accelerated in January.
Some moderation of the expansion in
commercial bank credit in December and
early January was accompanied by
stepped-up financing of nonfinancial
businesses through issuance of commer­
cial paper and longer-term debt instru­
ments. Market interest rates have de­
clined on balance from their highs of
mid-December.
The Federal Open Market Committee
seeks to foster monetary and financial
conditions that will help to reduce infla­
tion, encourage economic recovery, and
contribute to a sustainable pattern of
international transactions. The Commit­
tee agreed that these objectives would be
furthered by growth of M-l A, M-IB,
M-2, and M-3 from the fourth quarter of
1980 to the fourth quarter of 1981 within
ranges of 3 to 5% percent, 3 l/ 2 to 6
percent, 6 to 9 percent, and 6 l/ 2 to 9 l/ 2
percent respectively, abstracting from
the impact of introduction of NOW ac­
counts on a nationwide basis. The asso­
ciated range for bank credit was 6 to 9
percent. These ranges will be reconsid­
ered as conditions warrant.
In the short run the Committee seeks
behavior of reserve aggregates consis­
tent with growth in M-l A and M-IB from
December to March at annual rates of 5
to 6 percent and in M-2 at a rate of about
8 percent, abstracting from the impact of
flows into NOW accounts. These rates
are associated with growth of M-l A,
M-IB, and M-2 from the fourth quarter
of 1980 to the first quarter of 1981 at
annual rates of about 2 percent, 23/4
percent, and 7 percent respectively. It is
recognized that shifts into NOW ac­
counts will continue to distort measured
growth in M-l A and M-IB to an unpre­
dictable extent, and operational reserve
paths will be developed in the light of
evaluation of those distortions. If it ap­
pears during the period before the next
meeting that fluctuations in the federal
funds rate, taken over a period of time,
within a range of 15 to 20 percent are
likely to be inconsistent with the mone­
tary and related reserve paths, the Man­
ager for Domestic Operations is prompt­
ly to notify the Chairman, who will then
decide whether the situation calls for
supplementary instructions from the
Committee.

317

318

Federal R eserve Bulletin □ April 1981

Votes for this action: Messrs.
Volcker, Gramley, Guffey, Morris,
Partee, Rice, Roos, Schultz, Solo­
mon, and Winn. Votes against this
action: Mrs. Teeters and Mr. Wallich.

Mrs. Teeters dissented from this
action because she believed that the
specifications adopted for monetary
growth over the first quarter were
unduly restrictive. She preferred
specification of higher rates for mon­
etary growth over the first quarter,
consistent with the ranges adopted
for monetary growth over the whole
year, in association with a lower
intermeeting range for the federal
funds rate.
Mr. Wallich dissented from this
action because he preferred to set a
higher range for the federal funds
rate in order to help avoid a repeti­
tion of the sharp drop in interest
rates that had occurred in the second
quarter of 1980.
In late February, incoming data
indicated that M-1 A and M-1B, after
adjustment for the estimated effects
of shifts into NOW accounts, were
growing at rates well below those
consistent with the Committee’s ob­
jectives for the period from Decem­
ber to March. Consequently, mem­
ber bank demands for reserves had
eased in relation to the supply of
reserves being made available
through open market operations,
and member bank borrowings had
fallen appreciably. At the same time,
growth of M-2 and M-3 appeared to
be strong. These developments were
associated with a decline in the fed­

eral funds rate to around 15 percent,
the lower end of the range of 15 to 20
percent specified by the Committee,
raising the question of whether the
situation called for supplementary
instructions from the Committee.
In a telephone conference on Feb­
ruary 24, the Committee adopted the
following modification of the domes­
tic policy directive adopted on Feb­
ruary 3:
In light of the relatively strong growth
of M-2 cind M-3 and the substantial eas­
ing recently in money market conditions,
as well as uncertainties about the inter­
pretation of the behavior of M-1, the
Committee on February 24 agreed to
accept some shortfall in growth of M-1 A
and M-1B from the specified rates in the
domestic policy directive adopted on
February 3 as consistent with develop­
ments in the aggregates generally and the
objectives for the year.
Votes for this action: Messrs.
Volcker, Gramley, Guffey, Morris,
Partee, Rice, Schultz, Mrs. Teeters,
and Mr. Winn. Vote against this ac­
tion: Mr. Roos. Absent: Messrs. Sol­
omon and Wallich.

Mr. Roos dissented from this ac­
tion because he believed that it
would tend to prolong unduly the
shortfall in growth of M-1 A and
M-1B from the Committee’s ranges
for the year. In the circumstances,
he preferred to reduce the lower
limit of the intermeeting range for
the federal funds rate in order to
encourage a more prompt pickup in
growth of the narrowly defined mon­
etary aggregates.

Records of policy actions taken by the Federal Open Market Committee at each meeting, in
the form in which they will appear in the Board’s Annual Report, are made available a few
days after the next regularly scheduled meeting and are later published in the B u l l e t i n .



319

Legal Developments
R e v is io n

of

R e g u l a t io n Z

The Board of Governors has adopted a complete
revision of its Regulation Z (Truth in Lending). The
revision implements the Truth in Lending Simplifica­
tion and Reform Act (Title VI of the Depository
Institutions Deregulation and Monetary Control Act of
1980) and substantially alters the requirements and the
structure of the current regulation.
The new regulation becomes effective on April 1,
1981, but creditors have the option of continuing to
comply with current Regulation Z until March 31,
1982. Beginning April 1, 1982, creditors subject to
Regulation Z must comply with the revised regulation.
The Board has consolidated the consumer leasing
provisions contained in current Regulation Z, and is
publishing them as a separate regulation.
Effective April 1, 1981, Regulation Z is revised to
read as set forth below:

S u bpart C —C losed-E n d C redit
Section

226.17 General disclosure requirements.
226.18 Content of disclosures.
226.19 Certain residential mortgage transac­
tions.
226.20 Subsequent disclosure requirements.
226.21 Treatment of credit balances.
226.22 Determination of annual percentage
rate.
226.23 Right of rescission.
226.24 Advertising.

S u bpart D —M iscellan eou s
Section

226.25 Record retention.
226.26 Use of annual percentage rate in oral
disclosures.
226.27 Spanish language disclosures.
226.28 Effect on state laws.
226.29 State exemptions.

Appendix
Appendix
Appendix
Appendix
Appendix

A
B
C
D
E

Truth in Lending Revised Regulation Z
S u bpart A —G eneral
Section

226.1
226.2
226.3
226.4

Authority, purpose, coverage, orga­
nization, enforcement and liability.
Definitions and rules of construc­
tion.
Exempt transactions.
Finance charge.

Subpart B —O pen-E nd C redit
Section

226.5
226.6
226.7
226.8
226.9
226.10
226.11
226.12
226.13
226.14

General disclosure requirements.
Initial disclosure statement.
Periodic statement.
Identification of transactions.
Subsequent disclosure requirements.
Prompt crediting of payments.
Treatment of credit balances.
Special credit card provisions.
Billing error resolution.
Determination of annual percentage
rate.
226.15 Right of rescission.
226.16 Advertising.




Effect on state laws.
State exemptions.
Issuance of staff interpretations.
Multiple advance construction loans.
Rules for card issuers that bill on a
transaction-by-transaction basis.
Appendix F Annual percentage rate computations
for certain open-end credit plans.
Appendix G Open-end model forms and clauses.
Appendix H Closed-end model forms and clauses.
Appendix I Federal enforcement agencies.
Appendix J Annual percentage rate computations
for closed-end credit transactions.

Subpart A —G eneral

Section 226.1—Authority, Purpose, Coverage,
Organization, Enforcement and Liability
(a) Authority. This regulation, known as Regulation Z,
is issued by the Board of Governors of the Federal
Reserve System to implement the federal Truth in
Lending and Fair Credit Billing Acts, which are con­

320

Federal R eserve Bulletin □ April 1981

tained in Title I of the Consumer Credit Protection
Act, as amended (15 U.S.C. 1601 et seq.).
(b) Purpose. The purpose of this regulation is to
promote the informed use of consumer credit by
requiring disclosures about its terms and cost. The
regulation also gives consumers the right to cancel
certain credit transactions that involve a lien on a
consumer’s principal dwelling, regulates certain credit
card practices, and provides a means for fair and
timely resolution of credit billing disputes. The regula­
tion does not govern charges for consumer credit.
(c) Coverage.
(1) In general, this regulation applies to each individ­
ual or business that offers or extends credit when
four conditions are met: (i) the credit is offered or
extended to consumers; (ii) the offering or extension
of credit is done regularly;1 (iii) the credit is subject
to a finance charge or is payable by a written
agreement in more than 4 installments; and (iv) the
credit is primarily for personal, family, or household
purposes.
(2) If a credit card is involved, however, certain
provisions apply even if the credit is not subject to a
finance charge, or is not payable by a written
agreement in more than 4 installments, or if the
credit card is to be used for business purposes.
(d) Organization. The regulation is divided into sub­
parts and appendices as follows:
(1) Subpart A contains general information. It sets
forth: (i) the authority, purpose, coverage, and
organization of the regulation; (ii) the definitions of
basic terms; (iii) the transactions that are exempt
from coverage; and (iv) the method of determining
the finance charge.
(2) Subpart B contains the rules for open-end credit.
It requires that initial disclosures and periodic state­
ments be provided. It also describes special rules
that apply to credit card transactions, treatment of
payments and credit balances, procedures for re­
solving credit billing errors, annual percentage rate
calculations, rescission requirements, and advertis­
ing rules.
(3) Subpart C relates to closed-end credit. It con­
tains rules on disclosures, treatment of credit bal­
ances, annual percentage rate calculations, rescis­
sion requirements, and advertising.
(4) Subpart D contains rules on oral disclosures,
Spanish language disclosure in Puerto Rico, record

1. The meaning of “regularly” is explained in the definition of
“creditor” in § 226.2(a).



retention, effect on state laws, and state exemp­
tions.
(5) There are several appendices containing infor­
mation such as the procedures for determinations
about state laws, state exemptions and issuance of
staff interpretations, special rules for certain kinds
of credit plans, a list of enforcement agencies, and
the rules for computing annual percentage rates in
closed-end credit transactions.
(e) Enforcement and liability. Section 108 of the act
contains the administrative enforcement provisions.
Sections 112, 113, 130, 131, and 134 contain provisions
relating to liability for failure to comply with the
requirements of the act and the regulation.

Section 226.2—Definitions and Rules of
Construction
(a) Definitions. For purposes of this regulation, the
following definitions apply:
“A ct" means the Truth in Lending Act (15 U.S.C.

1601 et seq.).
“A dvertisem en t" means a commercial message in
any medium that promotes, directly or indirectly, a
credit transaction.
“Arranger o f credit ” means a person who regularly
arranges for the extension of consumer credit2 by
another person if:
(1) A finance charge may be imposed for that
credit, or the credit is payable by written agree­
ment in more than 4 installments (not including a
downpayment); and
(2) The person extending the credit is not a credi­
tor.
“Billing cycle” or “ cycle" means the interval be­
tween the days or dates of regular periodic state­
ments. These intervals shall be equal and no longer
than a quarter of a year. An interval will be consid­
ered equal if the number of days in the cycle does
not vary more than 4 days from the regular day or
date of the periodic statement.
“Board" means the Board of Governors of the
Federal Reserve System.

2. A person regularly arranges for the extension of consumer credit
only if it arranged credit more than 25 times (or more than 5 times for
transactions secured by a dwelling) in the preceding calendar year. If a
person did not meet these numerical standards in the preceding
calendar year, the numerical standards shall be applied to the current
calendar year.

Legal Developments

“Business d a y ” means a day on which a creditor’s
offices are open to the public for carrying on sub­
stantially all of its business functions. However, for
purposes of rescission under §§ 226.15 and 226.23,
the term means all calendar days except Sundays
and the legal public holidays specified in 5 U.S.C.
6103(a), such as New Year’s Day, Washington’s
Birthday, Memorial Day, Independence Day, Labor
Day, Columbus Day, Veterans Day, Thanksgiving
Day, and Christmas Day.
“ Card issuer’’ means a person that issues a credit
card or that person’s agent with respect to the
card.

“ Cardholder” means a natural person to whom a
credit card is issued for consumer credit purposes,
or a natural person who has agreed with the card
issuer to pay consumer credit obligations arising
from the issuance of a credit card to another natural
person. For purposes of § 226.12(a) and (b), the
term includes any person to whom a credit card is
issued for any purpose, including business, commer­
cial, or agricultural use, or a person who has agreed
with the card issuer to pay obligations arising from
the issuance of such a credit card to another person.
“ Cash p ric e” means the price at which a creditor, in
the ordinary course of business, offers to sell for
cash the property or service that is the subject of the
transaction. At the creditor’s option, the term may
include the price of accessories, services related to
the sale, service contracts and taxes and fees for
license, title, and registration. The term does not
include any finance charge.

“ Closed-end credit” means consumer credit other
than “ open-end credit” as defined in this section.
“ Consum er” means a cardholder or a natural per­
son to whom comsumer credit is offered or extend­
ed. However, for purposes of rescission under
§§ 226.15 and 226.23, the term also includes a natu­
ral person in whose principal dwelling a security
interest is or will be retained or acquired, if that
person’s ownership interest in the dwelling is or will
be subject to the security interest.
“ Consumer credit” means credit offered or extend­

321

“ C redit” means the right to defer payment of debt
or to incur debt and defer its payment.
“ Credit card” means any card, plate, coupon book,
or other single credit device that may be used from
time to time to obtain credit.
“ Credit sa le” means a sale in which the seller is a
creditor. The term includes a bailment or lease
(unless terminable without penalty at any time by
the consumer) under which the consumer:
(1) Agrees to pay as compensation for use a sum
substantially equivalent to, or in excess of, the
total value of the property and services involved;
and
(2) Will become (or has the option to become), for
no additional consideration or for nominal consid­
eration, the owner of the property upon compli­
ance with the agreement.

“ Creditor” means:
(1) A person (i) who regularly extends consumer
credit3 that is subject to a finance charge or is
payable by written agreement in more than 4
installments (not including a downpayment), and
(ii) to whom the obligation is initially payable,
either on the face of the note or contract, or by
agreement when there is no note or contract.
(2) An arranger of credit.
(3) For purposes of §§ 226.4(c)(8) (Discounts),
226.9(d) (Finance charge imposed at time of trans­
action), and 226.12(e) (Prompt notification of re­
turns and crediting of refunds), a person that
honors a credit card.
(4) For purposes of Subpart B, any card issuer
that extends either open-end credit or credit that
is not subject to a finance charge and is not
payable by written agreement in more than 4
installments.
(5) For purposes of Subpart B (except for the
finance charge
disclosures
contained
in
§§ 226.6(a) and 226.7(d) through (g) and the right
of rescission set forth in § 226.15) and Subpart C,
any card issuer that extends closed-end credit that
is subject to a finance charge or is payable by
written agreement in more than 4 installments.
“ D ow npaym ent” means an amount, including the
value of any property used as a trade-in, paid to a

ed to a consumer primarily for personal, family, or
household purposes.
“ Consum m ation” means the time that a consumer
becomes contractually obligated on a credit transac­
tion.



3. A person regularly extends consumer credit only if it extended
credit more than 25 times (or more than 5 times for transactions
secured by a dwelling) in the preceding calendar year. If a person did
not meet these numerical standards in the preceding calendar year, the
numerical standards shall be applied to the current calendar year.

322

Federal R eserve Bulletin □ April 1981

seller to reduce the cash price of goods or services
purchased in a credit sale transaction. A deferred
portion of a downpayment may be treated as part of
the downpayment if it is payable not later than the
due date of the second otherwise regularly sched­
uled payment and is not subject to a finance charge.
“D welling” means a residential structure that con­
tains 1 to 4 units, whether or not that structure is
attached to real property. The term includes an
individual condominium unit, cooperative unit, mo­
bile home, and trailer, if it is used as a residence.

“ Open-end credit” means consumer credit extend­
ed by a creditor under a plan in which:
(1) The creditor reasonably contemplates repeat­
ed transactions;
(2) The creditor may impose a finance charge
from time to time on an outstanding unpaid bal­
ance; and
(3) The amount of credit that may be extended to
the consumer during the term of the plan (up to
any limit set by the creditor) is generally made
available to the extent that any outstanding bal­
ance is repaid.
“Periodic rate ” means a rate of finance charge that
is or may be imposed by a creditor on a balance for a
day, week, month, or other subdivision of a year.
“P erson” means a natural person or an organiza­
tion, including a corporation, partnership, propri­
etorship, association, cooperative, estate, trust, or
government unit.

or interests in after-acquired property. For purposes
of disclosure under §§ 226.6 and 226.18, the term
does not include an interest that arises solely by
operation of law. However, for purposes of the right
of rescission under §§ 226.15 and 226.23, the term
does include interests that arise solely by operation
of law.
“ S ta te” means any state, the District of Columbia,
the Commonwealth of Puerto Rico, and any terri­
tory or possession of the United States.

(b) Rules o f construction. For purposes of this regula­
tion, the following rules of construction apply:
(1) Where appropriate, the singular form of a word
includes the plural form and plural includes singular.
(2) Where the words “ obligation” and “ transac­
tion” are used in this regulation, they refer to a
consumer credit obligation or transaction, depend­
ing upon the context. Where the word “ credit” is
used in this regulation, it means “ consumer credit”
unless the context clearly indicates otherwise.
(3) Unless defined in this regulation, the words used
have the meanings given to them by state law or
contract.
(4) Footnotes have the same legal effect as the text
of the regulation.

Section 226.3—Exempt Transactions
This regulation does not apply to the following:
(a) Business , com mercial, agricultural, or organiza­
tional credit.

means any finance
charge paid separately in cash or by check before or
at consummation of a transaction, or withheld from
the proceeds of the credit at any time.

(1) An extension of credit primarily for a business,
commercial or agricultural purpose.
(2) An extension of credit to other than a natural
person, including credit to government agencies or
instrumentalities.4

“Residential m ortgage transaction” means a trans­
action in which a mortgage, deed of trust, purchase
money security interest arising under an installment
sales contract, or equivalent consensual security
interest is created or retained in the consumer’s
principal dwelling to finance the acquisition or initial
construction of that dwelling.

(b) Credit over $25,000 not secured by real property or
a dwelling. An extension of credit not secured by real
property, or by personal property used or expected to
be used as the principal dwelling of the consumer, in
which the amount financed exceeds $25,000 or in
which there is an express written commitment to
extend credit in excess of $25,000.

“ Security interest” means an interest in property
that secures performance of a consumer credit obli­
gation and that is recognized by state or federal law.
It does not include incidental interests such as
interests in proceeds, accessions, additions, fix­
tures, insurance proceeds (whether or not the credi­
tor is a loss payee or beneficiary), premium rebates,

(c) Public utility credit. An extension of credit that
involves public utility services provided through pipe,

“Prepaid finance




ch arge”

4. Extensions of credit that are exempt under paragraph (a)(1) and
(2) remain subject to § 226.12(a) and (b) governing the issuance of
credit cards and the liability for their unauthorized use.

Legal Developments

wire, other connected facilities, or radio or similar
transmission (including extensions of such facilities), if
the charges for service, delayed payment, or any
discounts for prompt payment are filed with or regulat­
ed by any government unit. The financing of durable
goods or home improvements by a public utility is not
exempt.
(d) Securities or com m odities accounts. Transactions
in securities or commodities accounts in which credit
is extended by a broker-dealer registered with the
Securities and Exchange Commission or the Commod­
ity Futures Trading Commission.
(e) H ome fu el budget plans. An installment agreement
for the purchase of home fuels in which no finance
charge is imposed.

Section 226.4— Finance Charge
(a) Definition. The finance charge is the cost of con­
sumer credit as a dollar amount. It includes any charge
payable directly or indirectly by the consumer and
imposed directly or indirectly by the creditor as an
incident to or a condition of the extension of credit. It
does not include any charge of a type payable in a
comparable cash transaction.
(b) Examples o f finance charges. The finance charge
includes the following types of charges, except for
charges specifically excluded by paragraphs (c)
through (e) of this section:
(1) Interest, time price differential, and any amount
payable under an add-on or discount system of
additional charges.
(2) Service, transaction, activity, and carrying
charges, including any charge imposed on a check­
ing or other transaction account to the extent that
the charge exceeds the charge for a similar account
without a credit feature.
(3) Points, loan fees, assumption fees, finder’s fees,
and similar charges.
(4) Appraisal, investigation, and credit report fees.
(5) Premiums or other charges for any guarantee or
insurance protecting the creditor against the con­
sumer’s default or other credit loss.
(6) Charges imposed on a creditor by another per­
son for purchasing or accepting a consumer’s obliga­
tion, if the consumer is required to pay the charges
in cash, as an addition to the obligation, or as a
deduction from the proceeds of the obligation.
(7) Premiums or other charges for credit life, acci­
dent, health, or loss-of-income insurance, written in
connection with a credit transaction.
(8) Premiums or other charges for insurance against



323

loss of or damage to property, or against liability
arising out of the ownership or use of property,
written in connection with a credit transaction.
(9) Discounts for the purpose of inducing payment
by a means other than the use of credit.
(c) Charges excluded from the finance charge. The
following charges are not finance charges:
(1) Application fees charged to all applicants for
credit, whether or not credit is actually extended.
(2) Charges for actual unanticipated late payment,
for exceeding a credit limit, or for delinquency,
default, or a similar occurrence.
(3) Charges imposed by a financial institution for
paying items that overdraw an account, unless the
payment of such items and the imposition of the
charge were previously agreed upon in writing.
(4) Fees charged for participation in a credit plan,
whether assessed on an annual or other periodic
basis.
(5) Seller’s points.
(6) Interest forfeited as a result of an interest reduc­
tion required by law on a time deposit used as
security for an extension of credit.
(7) The following fees in a transaction secured by
real property or in a residential mortgage transac­
tion, if the fees are bona fide and reasonable in
amount:
(i) Fees for title examination, abstract of title,
title insurance, property survey, and similar pur­
poses.
(ii) Fees for preparing deeds, mortgages, and
reconveyance, settlement, and similar docu­
ments.
(iii) N otary, appraisal, and credit report fees.

(iv) Amounts required to be paid into escrow or
trustee accounts if the amounts would not other­
wise be included in the finance charge.
(8) Discounts offered to induce payment for a pur­
chase by cash, check, or other means, as provided
in § 167(b) of the act.
(d) Insurance.
(1) Premiums for credit life, accident, health, or
loss-of-income insurance may be excluded from the
finance charge if the following conditions are met:
(i) The insurance coverage is not required by the
creditor, and this fact is disclosed.
(ii) The premium for the initial term of insurance
coverage is disclosed. If the term of insurance is
less than the term of the transaction, the term of
insurance also shall be disclosed. The premium
may be disclosed on a unit-cost basis only in
open-end credit transactions, closed-end credit
transactions by mail or telephone under

324

Federal R eserve Bulletin □ April 1981

§ 226.17(g), and certain closed-end credit transac­
tions involving an insurance plan that limits the
total amount of indebtedness subject to coverage,
(iii) The consumer signs or initials an affirmative
written request for the insurance after receiving
the disclosures specified in this paragraph. Any
consumer in the transaction may sign or initial the
request.
(2) Premiums for insurance against loss of or dam­
age to property, or against liability arising out of the
ownership or use of property,5 may be excluded
from the finance charge if the following conditions
are met:
(i) The insurance coverage may be obtained from
a person of the consumer’s choice,6 and this fact
is disclosed.
(ii) If the coverage is obtained from or through
the creditor, the premium for the initial term of
insurance coverage shall be disclosed. If the term
of insurance is less than the term of the transac­
tion, the term of insurance shall also be disclosed.
The premium may be disclosed on a unit-cost
basis only in open-end credit transactions, closedend credit transactions by mail or telephone under
§ 226.17(g), and certain closed-end credit transac­
tions involving an insurance plan that limits the
total amount of indebtedness subject to coverage.
(e) Certain security interest charges. If itemized and
disclosed, the following charges may be excluded from
the finance charge:
(1) Taxes and fees prescribed by law that actually
are or will be paid to public officials for determining
the existence of or for perfecting, releasing, or
satisfying a security interest.
(2) The premium for insurance in lieu of perfecting a
security interest to the extent that the premium does
not exceed the fees described in paragraph (e)(1) of
this section that otherwise would be payable.
(f) Prohibited offsets. Interest, dividends, or other
income received or to be received by the consumer on
deposits or investments shall not be deducted in
computing the finance charge.

(a) Form o f disclosures.
(1) The creditor shall make the disclosures required
by this subpart clearly and conspicuously in writ­
ing,7 in a form that the consumer may keep.8
(2) The terms “finance charge” and “annual per­
centage rate,” when required to be disclosed with a
corresponding amount or percentage rate, shall be
more conspicuous than any other required disclo­
sure.9
(b) Time o f disclosures.
(1) Initial disclosures. The creditor shall furnish the
initial disclosure statement required by § 226.6 be­
fore the first transaction is made under the plan.
(2) Periodic statem ents.
(i) The creditor shall mail or deliver a periodic
statement as required by § 226.7 for each billing
cycle at the end of which an account has a debit or
credit balance of more than $1 or on which a
finance charge has been imposed. A periodic
statement need not be sent for an account if the
creditor deems it uncollectible, or if delinquency
collection proceedings have been instituted, or if
furnishing the statement would violate federal
law.
(ii) The creditor shall mail or deliver the periodic
statement at least 14 days prior to any date or the
end of any time period required to be disclosed
under § 226.7(j) in order for the consumer to avoid
an additional finance or other charge.10 A creditor
that fails to meet this requirement shall not collect
any finance or other charge imposed as a result of
such failure.
(c) Basis o f disclosures and use o f estim ates. Disclo­
sures shall reflect the terms of the legal obligation
between the parties. If any information necessary for
accurate disclosure is unknown to the creditor, it shall
make the disclosure based on the best information
reasonably available and shall state clearly that the
disclosure is an estimate.
(d) Multiple creditors; multiple consumers. If the
credit plan involves more than one creditor, only one

S u bpart B —O pen-E nd C redit

Section 226.5—General Disclosure
Requirements

5. This includes single interest insurance if the insurer waives all
right of subrogation against the consumer.
6. A creditor may reserve the right to refuse to accept, for
reasonable cause, an insurer offered by the consumer.



7. The disclosure required by § 226.9(d) when a finance charge is
imposed at the time of a transaction need not be written.
8. Disclosures made under § 226.10(b) about payment require­
ments, and the alternative summary billing rights statement provided
for in § 226.9(a)(2) need not be in a form that the consumer can keep.
9. The terms need not be more conspicuous when used under
§ 226.7(d) on periodic statements and in advertisements under
§ 226.16.
10. This timing requirement does not apply if the creditor is unable
to meet the requirement because of an act of God, war, civil disorder,
natural disaster, or strike.

Legal Developments

set of disclosures shall be given, and the creditors shall
agree among themselves which creditor must comply
with the requirements that this regulation imposes on
any or all of them. If there is more than one consumer,
the disclosures may be made to any consumer who is
primarily liable on the account. If the right of rescis­
sion under § 226.15 is applicable, however, the disclo­
sures required by §§ 226.6 and 226.15(b) shall be made
to each consumer having the right to rescind.
(e) Effect o f subsequent events. If a disclosure be­
comes inaccurate because of an event that occurs after
the creditor mails or delivers the disclosures, the
resulting inaccuracy is not a violation of this regula­
tion, although new disclosures may be required under
§ 226.9(c).

Section 226.6—Initial Disclosure Statement
The creditor shall disclose to the consumer, in termi­
nology consistent with that to be used on the periodic
statement, each of the following items, to the extent
applicable:
(a) Finance charge. The circumstances under which a
finance charge will be imposed and an explanation of
how it will be determined, as follows:
(1) A statement of when finance charges begin to
accrue, including an explanation of whether or not
any time period exists within which any credit
extended may be repaid without incurring a finance
charge. If such a time period is provided, a creditor
may, at its option and without disclosure, impose no
finance charge when payment is received after the
time period’s expiration.
(2) A disclosure of each periodic rate that may be
used to compute the finance charge, the range of
balances to which it is applicable,11 and the corre­
sponding annual percentage rate.12 When different
periodic rates apply to different types of transac­
tions, the types of transactions to which the periodic
rates apply shall also be disclosed.
(3) An explanation of the method used to determine
the balance on which the finance charge may be
computed.
(4) An explanation of how the amount of any fi­
nance charge will be determined,13 including a de­
11. A creditor is not required to adjust the range of balances
disclosure to reflect the balance below which only a minimum charge
applies.
12. If a creditor is offering a variable rate plan, the creditor shall
also disclose: (1) the circumstances under which the rate(s) may
increase; (2) any limitations on the increase; and (3) the effect(s) of an
increase.
13. If no finance charge is imposed when the outstanding balance is
less than a certain amount, no disclosure is required of that fact or of
the balance below which no finance charge will be imposed.



325

scription of how any finance charge other than the
periodic rate will be determined.
(b) Other charges. The amount of any charge other
than a finance charge that may be imposed as part of
the plan, or an explanation of how the charge will be
determined.
(c) Security interests. The fact that the creditor has or
will acquire a security interest in the property pur­
chased under the plan, or in other property identified
by item or type.
(d) Statem ent o f billing rights. A statement that out­
lines the consumer’s rights and the creditor’s responsi­
bilities under §§ 226.12(c) and 226.13 and that is sub­
stantially similar to the statement found in Appen­
dix G.

Section 226.7—Periodic Statement
The creditor shall furnish the consumer with a periodic
statement that discloses the following items, to the
extent applicable:
(a) Previous balance. The account balance outstand­
ing at the beginning of the billing cycle.
(b) Identification o f transactions. An identification of
each credit transaction in accordance with § 226.8.
(c) Credits. Any credit to the account during the
billing cycle, including the amount and the date of
crediting. The date need not be provided if a delay in
crediting does not result in any finance or other
charge.
(d) Periodic rates. Each periodic rate that may be
used to compute the finance charge, the range of
balances to which it is applicable,14 and the corre­
sponding annual percentage rate.15 If different periodic
rates apply to different types of transactions, the types
of transactions to which the periodic rates apply shall
also be disclosed.
(e) Balance on which finance charge com puted. The
amount of the balance to which a periodic rate was
applied and an explanation of how that balance was
determined. When a balance is determined without
first deducting all credits and payments made during
the billing cycle, that fact and the amount of the credits
and payments shall be disclosed.
14. See footnotes 11 and 13.
15. If a variable rate plan is involved, the creditor shall disclose the
fact that the periodic rate(s) may vary.

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Federal R eserve Bulletin □ April 1981

(f) Am ount o f finance charge. The amount of any
finance charge debited or added to the account during
the billing cycle, using the term “ finance charge.” The
components of the finance charge shall be individually
itemized and identified to show the amount(s) due to
the application of any periodic rates and the amount(s)
of any other type of finance charge. If there is more
than one periodic rate, the amount of the finance
charge attributable to each rate need not be separately
itemized and identified.
(g) Annual percentage rate. When a finance charge is
imposed during the billing cycle, the annual percent­
age rate(s) determined under § 226.14, using the term
“ annual percentage rate.”
(h) Other charges. The amounts, itemized and identi­
fied by type, of any charges other than finance charges
debited to the account during the billing cycle.
(i) Closing date o f billing cycle; new balance. The
closing date of the billing cycle and the account
balance outstanding on that date.
(j) Free-ride period. The date by which or the time
period within which the new balance or any portion of
the new balance must be paid to avoid additional
finance charges. If such a time period is provided, a
creditor may, at its option and without disclosure,
impose no finance charge when payment is received
after the time period’s expiration.
(k) Address fo r notice o f billing errors. The address to
be used for notice of billing errors. Alternatively, the
address may be provided on the billing rights state­
ment permitted by § 226.9(a)(2).

Section 226.8—Identification of Transactions
The creditor shall identify credit transactions on or
with the first periodic statement that reflects the
transaction by furnishing the following information, as
applicable.16

(1) Copy o f credit docum ent provided. When an
actual copy of the receipt or other credit document
is provided with the first periodic statement reflect­
ing the transaction, the transaction is sufficiently
identified if the amount of the transaction and either
the date of the transaction or the date of debiting the
transaction to the consumer’s account are disclosed
on the copy or on the periodic statement.
(2) Copy o f credit docum ent not provided—creditor
and seller sam e or related person(s). When the
creditor and the seller are the same person or related
persons, and an actual copy of the receipt or other
credit document is not provided with the periodic
statement, the creditor shall disclose the amount
and date of the transaction, and a brief identifica­
tion17 of the property or services purchased.18
(3) Copy o f credit docum ent not provided—creditor
and seller not sam e or related person(s). When the
creditor and seller are not the same person or related
persons, and an actual copy of the receipt or other
credit document is not provided with the periodic
statement, the creditor shall disclose the amount
and date of the transaction; the seller’s name; and
the city, and state or foreign country where the
transaction took place.19
(b) Nonsale credit. A nonsale credit transaction is
sufficiently identified if the first periodic statement
reflecting the transaction discloses a brief identifica­
tion of the transaction;20 the amount of the transac­
tion; and at least one of the following dates: the date of
the transaction, the date of debiting the transaction to
the consumer’s account, or, if the consumer signed the
credit document, the date appearing on the document.
If an actual copy of the receipt or other credit docu­
ment is provided and that copy shows the amount and

17. As an alternative to the brief identification, the creditor may
disclose a number or symbol that also appears on the receipt or other
credit document given to the consumer, if the number or symbol
reasonably identifies that transaction with that creditor, and if the
creditor treats an inquiry for clarification or documentation as a notice
of a billing error, including correcting the account in accordance with
(a) Sale credit. For each credit transaction involving
§ 226.13(e).
the sale of property or services, the following rules
18. An identification of property or services may be replaced by the
shall apply:
seller’s name and location of the transaction when: (1) the creditor and
the seller are the same person; (2) the creditor’s open-end plan has
fewer than 15,000 accounts; (3) the creditor provides the consumer
16. Failure to disclose the information required by this section shall with point-of-sale documentation for that transaction; and (4) the
not be deemed a failure to comply with the regulation if: (1) the
creditor treats an inquiry for clarification or documentation as a notice
creditor maintains procedures reasonably adpated to obtain and
of a billing error, including correcting the account in accordance with
provide the information and (2) the creditor treats an inquiry for
§ 226.13(e).
clarification or documentation as a notice of a billing error, including
19. The creditor may omit the address or provide any suitable
correcting the account in accordance with § 226.13(e). This applies to
designation that helps the consumer to identify the transaction when
transactions that take place outside a state, as defined in § 226.2(a),
the transaction (1) took place at a location that is not fixed; (2) took
whether or not the creditor maintains procedures reasonably adapted
place in the consumer’s home; or (3) was a mail or telephone order.
to obtain the required information.
20. See footnote 17.



Legal Developments

at least one of the specified dates, the brief identifica­
tion may be omitted.

Section 226.9—Subsequent Disclosure
Requirements
(a) Furnishing statem ent o f billing rights.
(1) Annual statem ent. The creditor shall mail or
deliver the billing rights statement required by
§ 226.6(d) at least once per calendar year, at inter­
vals of not less than 6 months nor more than 18
months, either to all consumers or to each consumer
entitled to receive a periodic statement under
§ 226.5(b)(2) for any one billing cycle.
(2) Alternative summary statem ent. As an alterna­
tive to paragraph (a)(1) of this section, the creditor
may mail or deliver, on or with each periodic
statement, a statement substantially similar to that
in Appendix G.
(b) D isclosures fo r supplem ental credit devices and
additional features.

(1) If a creditor, within 30 days after mailing or
delivering the initial disclosures under § 226.6(a),
adds a credit feature to the consumer’s account or
mails or delivers to the consumer a credit device for
which the finance charge terms are the same as
those previously disclosed, no additional disclo­
sures are necessary. After 30 days, if the creditor
adds a credit feature or furnishes a credit device
(other than as a renewal, resupply, or the original
issuance of a credit card) on the same finance charge
terms, the creditor shall disclose, before the con­
sumer uses the feature or device for the first time,
that it is for use in obtaining credit under the terms
previously disclosed.
(2) Whenever a credit feature is added or a credit
device is mailed or delivered, and the finance charge
terms for the feature or device differ from disclo­
sures previously given, the disclosures required by
§ 226.6(a) that are applicable to the added feature or
device shall be given before the consumer uses the
feature or device for the first time.
(c) Change in terms.
(1) Written notice required. Whenever any term
required to be disclosed under § 226.6 is changed or
the required minimum periodic payment is in­
creased, the creditor shall mail or deliver written
notice of the change to each consumer who may be
affected. The notice shall be mailed or delivered at
least 15 days prior to the effective date of the



327

change, unless the change has been agreed to by the
consumer, or a periodic rate or other finance charge
is increased as a result of the consumer’s delinquen­
cy or default.
(2) No notice under this section is required when
the change involves late payment charges, charges
for documentary evidence, or over-the-limit
charges; a reduction of any component of a finance
or other charge; suspension of future credit privi­
leges or termination of an account or plan ; or when
the change results from an agreement involving a
court proceeding, or from the consumer’s default or
delinquency (other than an increase in the periodic
rate or other finance charge).
(d) Finance charge im posed at time o f transaction.
(1) Any person, other than the card issuer, who
imposes a finance charge at the time of honoring a
consumer’s credit card, shall disclose the amount of
that finance charge prior to its imposition.
(2) The card issuer, if other than the person honor­
ing the consumer’s credit card, shall have no re­
sponsibility for the disclosure required by paragraph
(d)(1) of this section, and shall not consider any such
charge for purposes of §§ 226.6 and 226.7.

Section 226.10—Prompt Crediting of Payments

(a) General rule. A creditor shall credit a payment to
the consumer’s account as of the date of receipt,
except when a delay in crediting does not result in a
finance or other charge or except as provided in
paragraph (b) of this section.
(b) Specific requirements fo r paym ents. If a creditor
specifies, on or with the periodic statement, require­
ments for the consumer to follow in making payments,
but accepts a payment that does not conform to the
requirements, the creditor shall credit the payment
within 5 days of receipt.
(c) Adjustm ent o f account. If a creditor fails to credit
a payment, as required by paragraphs (a) or (b) of this
section, in time to avoid the imposition of finance or
other charges, the creditor shall adjust the consumer’s
account so that the charges imposed are credited to the
consumer’s account during the next billing cycle.

Section 226.11—Treatment of Credit Balances
When a credit balance in excess of $1 is created on a
credit account (through transmittal of funds to a credi­
tor in excess of the total balance due on an account,
through rebates of unearned finance charges or insur­

328

Federal R eserve Bulletin □ April 1981

ance premiums, or through amounts otherwise owed
to or held for the benefit of a consumer), the creditor
shall:
(a) Credit the amount of the credit balance to the
consumer’s account;
(b) Refund any part of the remaining credit balance
within 7 business days from receipt of a written
request from the consumer; and
(c) Make a good faith effort to refund to the con­
sumer by cash, check, or money order, or credit to a
deposit account of the consumer, any part of the
credit balance remaining in the account for more
than 6 months. No further action is required if the
consumer’s current location is not known to the
creditor and cannot be traced through the consum­
er’s last known address or telephone number.

Section 226.12—Special Credit Card Provisions
(a) Issuance o f credit cards. Regardless of the pur­
pose for which a credit card is to be used, including
business, commercial, or agricultural use, no credit
card shall be issued to any person except:
(1) In response to an oral or written request or
application for the card; or
(2) As a renewal of, or substitute for, an accepted
credit card.21
(b) Liability o f cardholder fo r unauthorized use.
(1) Limitation on amount. The liability of a card­
holder for unauthorized use22 of a credit card shall
not exceed the lesser of $50 or the amount of money,
property, labor, or services obtained by the unau­
thorized use before notification to the card issuer
under paragraph (b)(3) of this section.
(2) Conditions o f liability. A cardholder shall be
liable for unauthorized use of a credit card only if:
(i) The credit card is an accepted credit card;
(ii) The card issuer has provided adequate no­
tice23 of the cardholder’s maximum potential li­
ability and of means by which the card issuer may
21. For purposes of this section, “accepted credit card” means any
credit card that a cardholder has requested or applied for and
received, or has signed, used, or authorized another person to use to
obtain credit. Any credit card issued as a renewal or substitute in
accordance with this paragraph becomes an accepted credit card when
received by the cardholder.
22. “Unauthorized use” means the use of a credit card by a person,
other than the cardholder, who does not have actual, implied, or
apparent authority for such use, and from which the cardholder
receives no benefit.
23. “Adequate notice” means a printed notice to a cardholder that
sets forth clearly the pertinent facts so that the cardholder may
reasonably be expected to have noticed it and understood its meaning.
The notice may be given by any means reasonably assuring receipt by
the cardholder.



be notified of loss or theft of the card. The notice
shall state that the cardholder’s liability shall not
exceed $50 (or any lesser amount) and that the
cardholder may give oral or written notification,
and shall describe a means of notification (for
example, a telephone number, an address, or
both); and
(iii) The card issuer has provided a means to
identify the cardholder on the account or the
authorized user of the card.
(3) Notification to card issuer. Notification to a
card issuer is given when steps have been taken as
may be reasonably required in the ordinary course
of business to provide the card issuer with the
pertinent information about the loss, theft, or possi­
ble unauthorized use of a credit card, regardless of
whether any particular officer, employee, or agent
of the card issuer does, in fact, receive the informa­
tion. Notification may be given, at the option of the
person giving it, in person, by telephone, or in
writing. Notification in writing is considered given
at the time of receipt or, whether or not received, at
the expiration of the time ordinarily required for
transmission, whichever is earlier.
(4) Effect o f other applicable law or agreem ent. If
state law or an agreement between a cardholder and
the card issuer imposes lesser liability than that
provided in this paragraph, the lesser liability shall
govern.
(5) Business use o f credit cards. If 10 or more credit
cards are issued by one card issuer for use by the
employees of an organization, this section does not
prohibit the card issuer and the organization from
agreeing to liability for unauthorized use without
regard to this section. However, liability for unau­
thorized use may be imposed on an employee of the
organization, by either the card issuer or the organi­
zation, only in accordance with this section.
(c) Right o f cardholder to assert claims or defenses
against card issuer } 4

(1) General rule. When a person who honors a
credit card fails to resolve satisfactorily a dispute as
to property or services purchased with the credit
card in a consumer credit transaction, the card­
holder may assert against the card issuer all claims
(other than tort claims) and defenses arising out of
24. This paragraph does not apply to the use of a check guarantee
card or a debit card in connection with an overdraft credit plan, or to a
check guarantee card used in connection with cash advance checks.

Legal Developments

the transaction and relating to the failure to resolve
the dispute. The cardholder may withhold payment
up to the amount of credit outstanding for the
property or services that gave rise to the dispute and
any finance or other charges imposed on that
amount.25
(2) Adverse credit reports prohibited. If, in accor­
dance with paragraph (c)(1) of this section, the
cardholder withholds payment of the amount of
credit outstanding for the disputed transaction, the
card issuer shall not report that amount as delin­
quent until the dispute is settled or judgment is
rendered.
(3) Limitations. The rights stated in paragraphs
(c)(1) and (2) of this section apply only if:
(i) The cardholder has made a good faith attempt
to resolve the dispute with the person honoring
the credit card; and
(ii) The amount of credit extended to obtain the
property or services that result in the assertion of
the claim or defense by the cardholder exceeds
$50, and the disputed transaction occurred in the
same state as the cardholder’s current designated
address or, if not within the same state, within 100
miles from that address.26
(d) Offsets by card issuer prohibited.
(1) A card issuer may not take any action, either
before or after termination of credit card privileges,
to offset a cardholder’s indebtedness arising from a
consumer credit transaction under the relevant cred­
it card plan against funds of the cardholder held on
deposit with the card issuer.
(2) This paragraph does not alter or affect the right
of a card issuer acting under state or federal law to
do any of the following with regard to funds of a
cardholder held on deposit with the card issuer if the
25. The amount of the claim or defense that the cardholder may
assert shall not exceed the amount of credit outstanding for the
disputed transaction at the time the cardholder first notifies the card
issuer or the person honoring the credit card of the existence of the
claim or defense. To determine the amount of credit outstanding for
purposes of this section, payments and other credits shall be applied
to: (1) late charges in the order of entry to the account; then to (2)
finance charges in the order of entry to the account; and then to (3)
any other debits in the order of entry to the account. If more than one
item is included in a single extension of credit, credits are to be
distributed pro rata according to prices and applicable taxes.
26. The limitations stated in paragraph (c)(3)(ii) of this section shall
not apply when the person honoring the credit card: (1) is the same
person as the card issuer; (2) is controlled by the card issuer directly
or indirectly; (3) is under the direct or indirect control of a third person
that also directly or indirectly controls the card issuer; (4) controls the
card issuer directly or indirectly; (5) is a franchised dealer in the card
issuer’s products or services; or (6) has obtained the order for the
disputed transaction through a mail solicitation made by or participat­
ed in by the card issuer.



329

same procedure is constitutionally available to cred­
itors generally: obtain or enforce a consensual secu­
rity interest in the funds; attach or otherwise levy
upon the funds; or obtain or enforce a court order
relating to the funds.
(3) This paragraph does not prohibit a plan, if
authorized in writing by the cardholder, under
which the card issuer may periodically deduct all or
part of the cardholder’s credit card debt from a
deposit account held with the card issuer (subject to
the limitations in § 226.13(d)(1)).
(e) P rom pt notification o f returns and crediting o f
refunds.
(1) When a creditor other than the card issuer
accepts the return of property or forgives a debt for
services that is to be reflected as a credit to the
consumer’s credit card account, that creditor shall,
within 7 business days from accepting the return or
forgiving the debt, transmit a credit statement to the
card issuer through the card issuer’s normal chan­
nels for credit statements.
(2) The card issuer shall, within 3 business days
from receipt of a credit statement, credit the con­
sumer’s account with the amount of the refund.
(3) If a creditor other than a card issuer routinely
gives cash refunds to consumers paying in cash, the
creditor shall also give credit or cash refunds to
consumers using credit cards, unless it discloses at
the time the transaction is consummated that credit
or cash refunds for returns are not given. This
section does not require refunds for returns nor does
it prohibit refunds in kind.
(f) Discounts; tie-in arrangem ents. No card issuer
may, by contract or otherwise:
(1) Prohibit any person who honors a credit card
from offering a discount to a consumer to induce the
consumer to pay by cash, check, or similar means
rather than by use of a credit card or its underlying
account for the purchase of property or services; or
(2) Require any person who honors the card issuer’s
credit card to open or maintain any account or
obtain any other service not essential to the opera­
tion of the credit card plan from the card issuer or
any other person, as a condition of participation in a
credit card plan. If maintenance of an account for
clearing purposes is determined to be essential to
the operation of the credit card plan, it may be
required only if no service charges or minimum
balance requirements are imposed.
(g) Relation to Electronic Fund Transfer A ct and
Regulation E. For guidance on whether Regulation Z
or Regulation E applies in instances involving both

330

Federal R eserve Bulletin □ April 1981

credit and electronic fund transfer aspects, refer to
Regulation E, 12 CFR 205.5(c) regarding issuance and
205.6(d) regarding liability for unauthorized use. On
matters other than issuance and liability, this section
applies to the credit aspects of combined credit/elec­
tronic fund transfer transactions, as applicable.

Section 226.13—Billing Error Resolution27
(a) Definition o f billing error. For purposes of this
section, the term “ billing error” means:
(1) A reflection on or with a periodic statement of
an extension of credit that is not made to the
consumer or to a person who has actual, implied, or
apparent authority to use the consumer’s credit card
or open-end credit plan.
(2) A reflection on or with a periodic statement of
an extension of credit that is not identified in accor­
dance with the requirements of §§ 226.7(b) and
226.8
(3) A reflection on or with a periodic statement of
an extension of credit for property or services not
accepted by the consumer or the consumer’s desig­
nee, or not delivered to the consumer or the con­
sumer’s designee as agreed.
(4) A reflection on a periodic statement of the
creditor’s failure to credit properly a payment or
other credit issued to the consumer’s account.
(5) A reflection on a periodic statement of a compu­
tational or similar error of an accounting nature that
is made by the creditor.
(6) A reflection on a periodic statement of an exten­
sion of credit for which the consumer requests
additional clarification, including documentary evi­
dence.
(7) The creditor’s failure to mail or deliver a period­
ic statement to the consumer’s last known address if
that address was received by the creditor, in writing,
at least 20 days before the end of the billing cycle for
which the statement was required.
(b) Billing error n otice .28 A billing error notice is a
written notice29 from a consumer that:
27. A creditor shall not accelerate any part of the consumer’s
indebtedness or restrict or close a consumer’s account solely because
the consumer has exercised in good faith rights provided by this
section. A creditor may be subject to the forfeiture penalty under
§ 161(e) of the act for failure to comply with any of the requirements of
this section.
28. The creditor need not comply with the requirements of para­
graphs (c) through (g) of this section if the consumer concludes that no
billing error occurred and vountarily withdraws the billing error
notice.
29. The creditor may require that the written notice not be made on
the payment medium or other material accompanying the periodic
statement if the creditor so stipulates in the billing rights statement
required by §§ 226.6(d) and 226.9(a).



(1) Is received by a creditor at the address disclosed
under § 226.7(k) no later than 60 days after the
creditor transmitted the first periodic statement that
reflects the alleged billing error;
(2) Enables the creditor to identify the consumer’s
name and account number; and
(3) To the extent possible, indicates the consumer’s
belief and the reasons for the belief that a billing
error exists, and the type, date, and amount of the
error.
(c) Time fo r resolution; general procedures.
(1) The creditor shall mail or deliver written ac­
knowledgment to the consumer within 30 days of
receiving a billing error notice, unless the creditor
has complied with the appropriate resolution proce­
dures of paragraphs (e) and (f) of this section, as
applicable, within the 30-day period; and
(2) The creditor shall comply with the appropriate
resolution procedures of paragraphs (e) and (f) of
this section, as applicable, within two complete
billing cycles (but in no event later than 90 days)
after receiving a billing error notice.
(d) Rules pending resolution. Until a billing error is
resolved under paragraphs (e) or (f) of this section, the
following rules apply:
(1) Consumer's right to withhold disputed amount;
collection action prohibited. The consumer need not
pay (and the creditor may not try to collect) any
portion of any required payment that the consumer
believes is related to the disputed amount (including
related finance or other charges).30 If the cardholder
maintains a deposit account with the card issuer and
has agreed to pay the credit card indebtedness by
periodic deductions from the cardholder’s deposit
account, the card issuer shall not deduct any part of
the disputed amount or related finance or other
charges if a billing error notice is received any time
up to 3 business days before the scheduled payment
date.
(2) Adverse credit reports prohibited. The creditor
or its agent shall not (directly or indirectly) make or
threaten to make an adverse report to any person
about the consumer’s credit standing, or report that
an amount or account is delinquent, because the
30. A creditor is not prohibited from taking action to collect any
undisputed portion of the item or bill; or from deducting any disputed
amount and related finance or other charges from the consumer’s
credit limit on the account; or from reflecting a disputed amount and
related finance or other charges on a periodic statement, provided that
the creditor indicates on or with the periodic statement that payment
of any disputed amount and related finance or other charges is not
required pending the creditor’s compliance with this section.

Legal Developments

consumer failed to pay the disputed amount or
related finance or other charges.
(e) Procedures if billing error occurred as asserted. If
a creditor determines that a billing error occurred as
asserted, it shall within the time limits in paragraph
(c)(2) of this section:
(1) Correct the billing error and credit the consum­
er’s account with any disputed amount and related
finance or other charges, as applicable; and
(2) Mail or deliver a correction notice to the con­
sumer.
(f) Procedures if different billing error or no billing
error occurred. If, after conducting a reasonable inves­
tigation,31 a creditor determines that no billing error
occurred or that a different billing error occurred from
that asserted, the creditor shall within the time limits
in paragraph (c)(2) of this section:
(1) Mail or deliver to the consumer an explanation
that sets forth the reasons for the creditor’s belief
that the billing error alleged by the consumer is
incorrect in whole or in part;
(2) Furnish copies of documentary evidence of the
consumer’s indebtedness, if the consumer so re­
quests; and
(3) If a different billing error occurred, correct the
billing error and credit the consumer’s account with
any disputed amount and related finance or other
charges, as applicable.
(g) Creditor's rights and duties after resolution. If a
creditor, after complying with all of the requirements
of this section, determines that a consumer owes all or
part of the disputed amount and related finance or
other charges, the creditor:
(1) Shall promptly notify the consumer in writing of
the time when payment is due and the portion of the
disputed amount and related finance or other
charges that the consumer still owes;
(2) Shall allow any time period disclosed under
§§ 226.6(a)(1) and 226.7(j), during which the con­
sumer can pay the amount due under paragraph
(g)(1) of this section without incurring additional
finance or other charges;
(3) May report an account or amount as delinquent
because the amount due under paragraph (g)(1) of

31. If a consumer submits a billing error notice alleging either the
non-delivery of property or services under paragraph (a)(3) of this
section or that information appearing on a periodic statement is
incorrect because a person honoring the consumer’s credit card has
made an incorrect report to the card issuer, the creditor shall not deny
the assertion unless it conducts a reasonable investigation and deter­
mines that the property or services were actually delivered, mailed, or
sent as agreed or that the information was correct.



331

this section remains unpaid after the creditor
has allowed any time period disclosed under
§§ 226.6(a)(1) and 226.7(j) or 10 days (whichever is
longer) during which the consumer can pay the
amount; but
(4) May not report that an amount or account is
delinquent because the amount due under paragraph
(g)(1) of the section remains unpaid, if the creditor
receives (within the time allowed for payment in
paragraph (g)(3) of this section) further written no­
tice from the consumer that any portion of the billing
error is still in dispute, unless the creditor also:
(i) Promptly reports that the amount or account is
in dispute;
(ii) Mails or delivers to the consumer (at the same
time the report is made) a written notice of the
name and address of each person to whom the
creditor makes a report; and
(iii) Promptly reports any subsequent resolution
of the reported delinquency to all persons to
whom the creditor has made a report.
(h) Reassertion o f billing error. A creditor that has
fully complied with the requirements of this section
has no further responsibilities under this section (other
than as provided in paragraph (g)(4) of this section) if a
consumer reasserts substantially the same billing
error.
(i) Relation to Electronic Fund Transfer A ct and R eg­
ulation E. If an extension of credit is incident to an
electronic fund transfer, under an agreement between
a consumer and a financial institution to extend credit
when the consumer’s account is overdrawn or to
maintain a specified minimum balance in the consum­
er’s account, the creditor shall comply with the re­
quirements of Regulation E § 205.11 (12 CFR Part 205)
governing error resolution rather than those of para­
graphs (a), (b), (c), (e), (f), and (h) of this section.

Section 226.14— Determination of Annual
Percentage Rate
(a) General rule. The annual percentage rate is a
measure of the cost of credit, expressed as a yearly
rate. An annual percentage rate shall be considered
accurate if it is not more than V8 of 1 percentage point
above or below the annual percentage rate determined
in accordance with this section.3la
31a. An error in disclosure of the annual percentage rate or finance
charge shall not, in itself, be considered a violation of this regulation
if: (1) the error resulted from a corresponding error in a calculation
tool used in good faith by the creditor; and (2) upon discovery of the
error, the creditor promptly discontinues use of that calculation tool
for disclosure purposes, and notifies the Board in writing of the error

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Federal R eserve Bulletin □ April 1981

(b) Annual percentage rate fo r initial disclosures and
fo r advertising purposes. Where one or more periodic
rates may be used to compute the finance charge, the
annual percentage rate(s) to be disclosed for purposes
of §§ 226.6(a)(2) and 226.16(b)(2) shall be computed by
multiplying each periodic rate by the number of peri­
ods in a year.
(c) Annual percentage rate fo r periodic statem ents.
The annual percentage rate(s) to be disclosed for
purposes of § 226.7(d) shall be computed by multiply­
ing each periodic rate by the number of periods in a
year and, for purposes of § 226.7(g), shall be deter­
mined as follows:
(1) If the finance charge is determined solely by
applying one or more periodic rates, at the creditor’s
option, either:
(i) By multiplying each periodic rate by the num­
ber of periods in a year; or
(ii) By dividing the total finance charge for the
billing cycle by the sum of the balances to which
the periodic rates were applied and multiplying
the quotient (expressed as a percentage) by the
number of billing cycles in a year.
(2) If the finance charge imposed during the billing
cycle is or includes a minimum, fixed, or other
charge not due to the application of a periodic rate,
other than a charge with respect to any specific
transaction during the billing cycle, by dividing the
total finance charge for the billing cycle by the
amount of the balance(s) to which it is applicable32
and multiplying the quotient (expressed as a per­
centage) by the number of billing cycles in a year.33
(3) If the finance charge imposed during the billing
cycle is or includes a charge relating to a specific
transaction during the billing cycle (even if the total
finance charge also includes any other minimum,
fixed, or other charge not due to the application of a
periodic rate), by dividing the total finance charge
imposed during the billing cycle by the total of all
balances and other amounts on which a finance
charge was imposed during the billing cycle without
duplication, and multiplying the quotient (expressed
as a percentage) by the number of billing cycles in a
year,34 except that the annual percentage rate shall
not be less than the largest rate determined by
in the calculation tool. This footnote shall cease to be effective on
April 1, 1982.
32. If there is no balance to which the finance charge is applicable,
an annual percentage rate cannot be determined under this section.
33. Where the finance charge imposed during the billing cycle is or
includes a loan fee, points, or similar charge that relates to the opening
of the account, the amount of such charge shall not be included in the
calculation of the annual percentage rate.
34. See Appendix F regarding determination of the denominator of
the fraction under this paragraph.



multiplying each periodic rate imposed during the
billing cycle by the number of periods in a year.35
(4) If the finance charge imposed during the billing
cycle is or includes a minimum, fixed, or other
charge not due to the application of a periodic rate
and the total finance charge imposed during the
billing cycle does not exceed 50 cents for a monthly
or longer billing cycle, or the pro rata part of 50
cents for a billing cycle shorter than monthly, at the
creditor’s option, by multiplying each applicable
periodic rate by the number of periods in a year,
notwithstanding the provisions of paragraphs (c)(2)
and (3) of this section.
(d) Calculations where daily periodic rate applied. If
the provisions of paragraphs (c)(l)(ii) or (2) of this
section apply and all or a portion of the finance charge
is determined by the application of one or more daily
periodic rates, the annual percentage rate may be
determined either:
(1) By dividing the total finance charge by the
average of the daily balances and multiplying the
quotient by the number of billing cycles in a year; or
(2) By dividing the total finance charge by the sum
of the daily balances and multiplying the quotient by
365.

Section 226.15—Right of Rescission
(a) Consumer s right to rescind.
(1)(i) Except as provided in paragraph (a)(l)(ii) of
this section, in a credit plan in which a security
interest is or will be retained or acquired in a
consumer’s principal dwelling, each consumer
whose ownership interest is or will be subject to
the security interest shall have the right to re­
scind: each credit extension made under the plan;
the plan when the plan is opened; a security
interest when added or increased to secure an
existing plan; and the increase when a credit limit
on the plan is increased.
(ii) As provided in § 125(e), the consumer does
not have the right to rescind each credit extension
made under the plan if such extension is made in
accordance with a previously established credit
limit for the plan.
(2) To exercise the right to rescind, the consumer
shall notify the creditor of the rescission by mail,
telegram, or other means of written communication.
Notice is considered given when mailed, or when
filed for telegraphic transmission, or, if sent by other
means, when delivered to the creditor’s designated
place of business.
35. See footnote 33.

Legal Developments

(3) The consumer may exercise the right to rescind
until midnight of the third business day following the
occurrence described in paragraph (a)(1) of this
section that gave rise to the right of rescission,
delivery of the notice required by paragraph (b) of
this section, or delivery of all material disclosures,36
whichever occurs last. If the required notice and
material disclosures are not delivered, the right to
rescind shall expire 3 years after the occurrence
giving rise to the right of rescission, or upon transfer
of all of the consumer’s interest in the property, or
upon sale of the property, whichever occurs first. In
the case of certain administrative proceedings, the
rescission period shall be extended in accordance
with § 125(f) of the act.
(4) When more than one consumer has the right to
rescind, the exercise of the right by one consumer
shall be effective as to all consumers.
(b) N otice o f right to rescind. In any transaction or
occurrence subject to rescission, a creditor shall deliv­
er 2 copies of the notice of the right to rescind to each
consumer entitled to rescind. The notice shall identify
the transaction or occurrence and clearly and conspic­
uously disclose the following:
(1) The retention or acquisition of a security interest
in the consumer’s principal dwelling.
(2) The consumer’s right to rescind, as described in
paragraph (a)(1) of this section.
(3) How to exercise the right to rescind, with a form
for that purpose, designating the address of the
creditor’s place of business.
(4) The effects of rescission, as described in para­
graph (d) of this section.
(5) The date the rescission period expires.
(c) D elay o f creditor's perform ance. Unless a con­
sumer waives the right to rescind under paragraph (e)
of this section, no money shall be disbursed other than
in escrow, no services shall be performed, and no
materials delivered until after the rescission period has
expired and the creditor is reasonably satisfied that the
consumer has not rescinded. A creditor does not
violate this section if a third party with no knowledge
of the event activating the rescission right does not
delay in providing materials or services, as long as the
debt incurred for those materials or services is not
secured by the property subject to rescission.

36. The term “material disclosures” means the information that
must be provided to satisfy the requirements in § 226.6 with regard to
the method of determining the finance charge and the balance upon
which a finance charge will be imposed, the annual percentage rate,
and the amount or method of determining the amount of any member­
ship or participation fee that may be imposed as part of the plan.



333

(d) Effects o f rescission.
(1) When a consumer rescinds a transaction, the
security interest giving rise to the right of rescission
becomes void, and the consumer shall not be liable
for any amount, including any finance charge.
(2) Within 20 calendar days after receipt of a notice
of rescission, the creditor shall return any money or
property that has been given to anyone in connec­
tion with the transaction and shall take any action
necessary to reflect the termination of the security
interest.
(3) If the creditor has delivered any money or
property, the consumer may retain possession until
the creditor has met its obligation under paragraph
(d)(2) of this section. When the creditor has com­
plied with that paragraph, the consumer shall tender
the money or property to the creditor or, where the
latter would be impracticable or inequitable, tender
its reasonable value. At the consumer’s option,
tender of property may be made at the location of
the property or at the consumer’s residence. Tender
of money must be made at the creditor’s designated
place of business. If the creditor does not take
possession of the money or property within 20
calendar days after the consumer’s tender, the con­
sumer may keep it without further obligation.
(4) The procedures outlined in paragraphs (d)(2) and
(3) of this section may be modified by court order.
(e) Consumer s waiver o f right to rescind. The con­
sumer may modify or waive the right to rescind if the
consumer determines that the extension of credit is
needed to meet a bona fide personal financial emergen­
cy. To modify or waive the right, the consumer shall
give the creditor a dated written statement that de­
scribes the emergency, that specifically modifies or
waives the right to rescind, and that bears the signa­
tures of the consumers entitled to rescind. Printed
forms for this purpose are prohibited.
(f) Exempt transactions. The right to rescind does not
apply to the following:
(1) A residential mortgage transaction.
(2) A credit plan in which a state agency is a
creditor.

Section 226.16—Advertising
(a) Actually available terms. If an advertisement for
credit states specific credit terms, it shall state only
those terms that actually are or will be arranged or
offered by the creditor.
(b) A dvertisem ent o f terms that require additional
disclosures. If any of the terms required to be dis­

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Federal R eserve Bulletin □ April 1981

closed under § 226.6 is set forth in an advertisement,
the advertisement shall also clearly and conspicuously
set forth the following:
(1) Any minimum, fixed, transaction, activity or
similar charge that could be imposed.
(2) Any periodic rate that may be applied expressed
as an annual percentage rate as determined under
§ 226.14(b). If the plan provides for a variable
periodic rate, that fact shall be disclosed.
(3) Any membership or participation fee that could
be imposed.
(c) Catalogs and multiple-page advertisem ents.
(1) If a catalog or other multiple-page advertisement
gives information in a table or schedule in sufficient
detail to permit determination of the disclosures
required by paragraph (b) of this section, it shall be
considered a single advertisement if:
(i) The table or schedule is clearly and conspicu­
ously set forth; and
(ii) Any statement of terms set forth in § 226.6
appearing anywhere else in the catalog or adver­
tisement clearly refers to that page on which the
table or schedule begins.
(2) A catalog or multiple-page advertisement com­
plies with this paragraph if the table or schedule of
terms includes all appropriate disclosures for a
representative scale of amounts up to the level of the
more commonly sold higher-priced property or serv­
ices offered.

S u b p a rt C —C lo se d -E n d C r e d it

Section 226.17—General Disclosure
Requirements
(a) Form o f disclosures.
(1) The creditor shall make the disclosures required
by this subpart clearly and conspicously in writing,
in a form that the consumer may keep. The disclo­
sures shall be grouped together, shall be segregated
from everything else, and shall not contain any
information not directly related37 to the disclosures
required under § 226.18.38 The itemization of the
amount financed under § 226.18(c)(1) must be sepa­
rate from the other disclosures under that section.
(2) The terms “ finance charge” and “ annual per­
37. The disclosures may include an acknowledgment of receipt, the
date of the transaction, and the consumer’s name, address, and
account number.
38. The following disclosures may be made together or separately
from other required disclosures: the creditor’s identity under
§ 226.18(a), the variable rate example under § 226.18(f)(4), insurance
under § 226.18(n), and certain security interest charges under
§ 226.18(o).



centage rate,” when required to be disclosed under
§ 226.18(d) and (e) together with a corresponding
amount or percentage rate, shall be more conspicu­
ous than any other disclosure, except the creditor’s
identity under § 226.18(a).
(b) Time o f disclosures. The creditor shall make dis­
closures before consummation of the transaction. In
certain residential mortgage transactions, special tim­
ing requirements are set forth in § 226.19. In certain
transactions involving mail or telephone orders or a
series of sales, the timing of the disclosures may be
delayed in accordance with paragraphs (g) and (h) of
this section.
(c) Basis o f disclosures and use o f estim ates.
(1) The disclosures shall reflect the terms of the legal
obligation between the parties.
(2) If any information necessary for an accurate
disclosure is unknown to the creditor, it shall make
the disclosure based on the best information reason­
ably available and shall state that the disclosure is an
estimate.
(3) The creditor may disregard the effects of the
following in making calculations and disclosures:
(i) That payments must be collected in whole
cents.
(ii) That dates of scheduled payments and ad­
vances may be changed because the scheduled
date is not a business day.
(iii) That months have different numbers of days.
(iv) The occurrence of leap year.
(4) In making calculations and disclosures, the cred­
itor may disregard any irregularity in the first period
that falls within the limits described below and any
payment schedule irregularity that results from the
irregular first period:
(i) For transactions in which the term is less than
1 year, a first period not more than 6 days shorter
or 13 days longer than a regular period;
(ii) For transactions in which the term is at least 1
year and less than 10 years, a first period not more
than 11 days shorter or 21 days longer than a
regular period; and
(iii) For transactions in which the term is at least
10 years, a first period shorter than or not more
than 32 days longer than a regular period.
(5) If an obligation is payable on demand, the credi­
tor shall make the disclosures based on an assumed
maturity of 1 year. If an alternate maturity date is
stated in the legal obligation between the parties, the
disclosures shall be based on that date.
(6)(i) A series of advances under an agreement to
extend credit up to a certain amount may be
considered as one transaction.

Legal Developments

(ii) When a multiple-advance loan to finance the
construction of a dwelling may be permanently
financed by the same creditor, the construction
phase and the permanent phase may be treated as
either one transaction or more than one transac­
tion.
(d) Multiple creditors; multiple consumers. If a trans­
action involves more than one creditor, only one set of
disclosures shall be given and the creditors shall agree
among themselves which creditor must comply with
the requirements that this regulation imposes on any
or all of them. If there is more than one consumer, the
disclosures may be made to any consumer who is
primarily liable on the obligation. If the transaction is
rescindable under § 226.23, however, the disclosures
shall be made to each consumer who has the right to
rescind.
(e) Effect o f subsequent events. If a disclosure be­
comes inaccurate because of an event that occurs after
the creditor delivers the required disclosures, the
inaccuracy is not a violation of this regulation, al­
though new disclosures may be required under para­
graph (f) of this section, § 226.19, or § 226.20.
(f) Early disclosures. If disclosures are given before
the date of consummation of a transaction and a
subsequent event makes them inaccurate, the creditor
shall disclose the changed terms before consumma­
tion, if the annual percentage rate in the consummated
transaction varies from the annual percentage rate
disclosed under § 226.18(e) by more than V8 of 1
percentage point in a regular transaction, or more than
V4 of 1 percentage point in an irregular transaction, as
defined in § 226.22(a).
(g) Mail or telephone orders—delay in disclosures. If a
creditor receives a purchase order or a request for an
extension of credit by mail, telephone, or any other
written or electronic communication without face-toface or direct telephone solicitation, the creditor may
delay the disclosures until the due date of the first
payment, if the following information for repre­
sentative amounts or ranges of credit is made available
in written form to the consumer or to the public before
the actual purchase order or request:
(1) The cash price or the principal loan amount.
(2) The total sale price.
(3) The finance charge.
(4) The annual percentage rate, and if the rate may
increase after consummation, the following disclo­
sures:
(i) The circumstances under which the rate may
increase.



335

(ii) Any limitations on the increase.
(iii) The effect of an increase.
(5) The terms of repayment.
(h) Series o f sales —delay in disclosures. If a credit
sale is one of a series made under an agreement
providing that subsequent sales may be added to an
outstanding balance, the creditor may delay the re­
quired disclosures until the due date of the first
payment for the current sale, if the following two
conditions are met:
(1) The consumer has approved in writing the annu­
al percentage rate or rates, the range of balances to
which they apply, and the method of treating any
unearned finance charge on an existing balance.
(2) The creditor retains no security interest in any
property after the creditor has received payments
equal to the cash price and any finance charge
attributable to the sale of that property. For pur­
poses of this provision, in the case of items pur­
chased on different dates, the first purchased is
deemed the first item paid for; in the case of items
purchased on the same date, the lowest priced is
deemed the first item paid for.
(i) Interim student credit extensions. For each trans­
action involving an interim credit extension under a
student credit program, the creditor need not make the
following disclosures: the finance charge under
§ 226.18(d), the payment schedule under § 226.18(g),
the total of payments under § 226.18(h), or the total
sale price under § 226.18(j).

Section 226.18— Content of Disclosures
For each transaction, the creditor shall disclose the
following information as applicable:
(a) Creditor. The identity of the creditor making the
disclosures.
(b) Am ount financed. The “ amount financed,” using
that term, and a brief description such as “the amount
of credit provided to you or on your behalf.” The
amount financed is calculated by:
(1) Determining the principal loan amount or the
cash price (subtracting any downpayment);
(2) Adding any other amounts that are financed by
the creditor and are not part of the finance charge ;
and
(3) Subtracting any prepaid finance charge.
(c) Itemization o f the amount finan ced .39 A separate
39. Good faith estimates of settlement costs provided for transac­

336

Federal R eserve Bulletin □ April 1981

written itemization of the amount financed, including:
(i) The amount of any proceeds distributed direct­
ly to the consumer.
(ii) The amount credited to the consumer’s ac­
count with the creditor.
(iii) Any amounts paid to other persons by the
creditor on the consumer’s behalf. The creditor
shall ideiitify those persons.40
(iv) The prepaid finance charge.
(2) The creditor need not comply with paragraph
(c)(1) of this section if the creditor provides a
statement that the customer has the right to receive
a written itemization of the amount financed, togeth­
er with a space for the consumer to indicate whether
it is desired, and the consumer does not request it.
(d) Finance charge. The “ finance charge,” using that
term, and a brief description such as “ the dollar
amount the credit will cost you.” 41
(e) Annual percentage rate. The “ annual percentage
rate,” using that term, and a brief description such as
“the cost of your credit as a yearly rate.”42
(f) Variable rate.43. If the annual percentage rate may
increase after consummation, the following disclo­
sures:
(1) The circumstances under which the rate may
increase.
(2) Any limitations on the increase.
(3) The effect of an increase.
(4) An example of the payment terms that would
result from an increase.
(g) Paym ent schedule. The number, amounts, and
timing of payments scheduled to repay the obligation.
(1) In a demand obligation with no alternate maturi­
ty date, the creditor may comply with this paragraph
by disclosing the due dates or payment periods of

tions subject to the Real Estate Settlement Procedures Act (12 U.S.C.
2601 et seq.) may be substituted for the disclosures required by
paragraph (c) of this section.
40. The following payees may be described using generic or other
general terms and need not be further identified: public officials or
government agencies, credit reporting agencies, appraisers, and insur­
ance companies.
41. The finance charge shall be considered accurate if it is not more
than $5 above or below the exact finance charge in a transaction
involving an amount financed of $1,000 or less, or not more than $10
above or below the exact finance charge in a transaction involving an
amount financed of more than $1,000.
42. For any transaction involving a finance charge of $5 or less on
an amount financed of $75 or less, or a finance charge of $7.50 or less
on an amount financed of more than $75, the creditor need not
disclose the annual percentage rate.
43. Information provided in accordance with variable rate regula­
tions of other federal agencies may be substituted for the disclosures
required by paragraph (f) of this section.



any scheduled interest payments for the first year.
(2) In a transaction in which a series of payments
varies because a finance charge is applied to the
unpaid principal balance, the creditor may comply
with this paragraph by disclosing the following infor­
mation:
(i) The dollar amounts of the largest and smallest
payments in the series.
(ii) A reference to the variations in the other
payments in the series.
(h) Total o f paym ents. The “total of payments,” using
that term, and a descriptive explanation such as “the
amount you will have paid when you have made all
scheduled payments.”44
(i) D em and featu re. If the obligation has a demand
feature, that fact shall be disclosed. When the disclo­
sures are based on an assumed maturity of 1 year as
provided in § 226.17(c)(5), that fact shall also be
disclosed.
(j) Total sale price. In a credit sale, the “total sale
price,” using that term, and a descriptive explanation
(including the amount of any downpayment) such as
“the total price of your purchase on credit, including
your downpayment of $---------.” The total sale price is
the sum of the cash price, the items described in
paragraph (b)(2), and the finance charge disclosed
under paragraph (d) of this section.
(k) Prepaym ent.
(1) When an obligation includes a finance charge
computed from time to time by application of a rate
to the unpaid principal balance, a statement indicat­
ing whether or not a penalty may be imposed if the
obligation is prepaid in full.
(2) When an obligation includes a finance charge
other than the finance charge described in paragraph
(k)(l) of this section, a statement indicating whether
or not the consumer is entitled to a rebate of any
finance charge if the obligation is prepaid in full.
(1) L ate paym ent. Any dollar or percentage charge
that may be imposed before maturity due to a late
payment, other than a deferral or extension charge.
(m) Security interest. The fact that the creditor has or
will acquire a security interest in the property pur­
chased as part of the transaction, or in other property
identified by item or type.

44. In any transaction involving a single payment, the creditor need
not disclose the total of payments.

Legal Developments

(n) Insurance. The items required by § 226.4(d) in
order to exclude certain insurance premiums from the
finance charge.
(o) Certain security interest charges. The disclosures
required by § 226.4(e) in order to exclude from the
finance charge certain fees prescribed by law or cer­
tain premiums for insurance in lieu of perfecting a
security interest.
(p) Contract reference. A statement that the consum­
er should refer to the appropriate contract document
for information about nonpayment, default, the right
to accelerate the maturity of the obligation, and pre­
payment rebates and penalties. At the creditor’s op­
tion, the statement may also include a reference to the
contract for further information about security inter­
ests and, in a residential mortgage transaction, about
the creditor’s policy regarding assumption of the obli­
gation.
(q) Assumption policy. In a residential mortgage
transaction, a statement whether or not a subsequent
purchaser of the dwelling from the consumer may be
permitted to assume the remaining obligation on its
original terms.
(r) Required deposit. If the creditor requires the con­
sum er to m aintain a deposit as a condition of the
specific transaction, a statem ent that the annual per­
centage rate does not reflect the effect of the required
deposit.45

Section 226.19—Certain Residential Mortgage
Transactions

337

transaction or more than V4 of 1 percentage point in an
irregular transaction, as defined in § 226.22, the credi­
tor shall disclose the changed terms no later than
consummation or settlement.

Section 226.20—Subsequent Disclosure
Requirements
(a) Refinancings. A refinancing occurs when an exist­
ing obligation that was subject to this subpart is
satisfied and replaced by a new obligation undertaken
by the same consumer. A refinancing is a new transac­
tion requiring new disclosures to the consumer. The
new finance charge shall include any unearned portion
of the old finance charge that is not credited to the
existing obligation. The following shall not be treated
as a refinancing:
(1) A renewal of a single payment obligation with no
change in the original terms.
(2) A reduction in the annual percentage rate with a
corresponding change in the payment schedule.
(3) An agreement involving a court proceeding.
(4) A change in the payment schedule or a change in
collateral requirements as a result of the consumer’s
default or delinquency, unless the rate is increased,
or the new amount financed exceeds the unpaid
balance plus earned finance charge and premiums
for continuation of insurance of the types described
in § 226.4(d).
(5) The renewal of optional insurance purchased by
the consumer and added to an existing transaction,
if disclosures relating to the initial purchase were
provided as required by this subpart.

(b) Assum ptions. An assumption occurs when a credi­
tor expressly agrees in writing with a subsequent
'Consumer to accept that consumer as a primary obligor
on an existing residential mortgage transaction. Before
the assumption occurs, the creditor shall make new
disclosures to the subsequent consumer, based on the
remaining obligation. If the finance charge originally
imposed on the existing obligation was an add-on or
discount finance charge, the creditor need only dis­
close:
(1) The unpaid balance of the obligation assumed.
(b) Redisclosure required. If the annual percentage
(2) The total charges imposed by the creditor in
rate in the consummated transaction varies from the
connection with the assumption.
annual percentage rate disclosed under § 226.18(e) by
(3) The information required to be disclosed under
more than % of 1 percentage point in a regular
§ 226.18(k), (1), (m), and (n).
(4) The annual percentage rate originally imposed
on the obligation.
45. A required deposit need not include, for example: (1) an escrow
(5) The payment schedule under § 226.18(g) and the
account for items such as taxes, insurance or repairs; (2) a deposit that
total
of payments under § 226.18(h), based on the
earns not less than 5 percent per year; or (3) payments under a Morris
remaining obligation.
Plan.
(a) Time o f disclosure. In a residential mortgage trans­
action subject to the Real Estate Settlement Proce­
dures Act (12 U.S.C. 2601 et seq.) the creditor shall
make good faith estimates of the disclosures required
by § 226.18 before consummation, or shall deliver or
place them in the mail not later than 3 business days
after the creditor receives the consumer’s written
application, whichever is earlier.




338

Federal R eserve Bulletin □ April 1981

Section 226.21—Treatment of Credit Balances
When a credit balance in excess of $1 is created in
connection with a transaction (through transmittal of
funds to a creditor in excess of the total balance due on
an account, through rebates of unearned finance
charges or insurance premiums, or through amounts
otherwise owed to or held for the benefit of a consum­
er), the creditor shall:
(a) Credit the amount of the credit balance to the
consumer’s account;
(b) Refund any part of the remaining credit balance,
upon the written request of the consumer; and
(c) Make a good faith effort to refund to the con­
sumer by cash, check, or money order, or credit to a
deposit account of the consumer, any part of the
credit balance remaining in the account for more
than 6 months, except that no further action is
required if the consumer’s current location is not
known to the creditor and cannot be traced through
the consumer’s last known address or telephone
number.

Section 226.22—Determination of Annual
Percentage Rate
(a) Accuracy o f annual percentage rate.
(1) The annual percentage rate is a measure of the
cost of credit, expressed as a yearly rate, that relates
the amount and timing of value received by the
consumer to the amount and timing of payments
made. The annual percentage rate shall be deter­
mined in accordance with either the acturial method
or the United States Rule method. Explanations,
equations and instructions for determining the annu­
al percentage rate in accordance with the actuarial
method are set forth in Appendix J to this regulation.45a
(2) As a general rule, the annual percentage rate
shall be considered accurate if it is not more than %
of 1 percentage point above or below the annual
percentage rate determined in accordance with para­
graph (a)(1) of this section.
(3) In an irregular transaction, the annual percent­
age rate shall be considered accurate if it is not more
than »/4 of 1 percentage point above or below the

45a. An error in disclosure of the annual percentage rate or finance
charge shall not, in itself, be considered a violation of this regulation
if: (1) the error resulted from a corresponding error in a calculation
tool used in good faith by the creditor; and (2) upon discovery of the
error, the creditor promptly discontinues use of that calculation tool
for disclosure purposes and notifies the Board in writing of the error in
the calculation tool. This footnote shall cease to be effective on
April 1, 1982.



annual percentage rate determined in accordance
with paragraph (a)(1) of this section.46
(b) Computation tools.
(1) The Regulation Z Annual Percentage Rate Ta­
bles produced by the Board may be used to deter­
mine the annual percentage rate, and any rate deter­
mined from those tables in accordance with the
accompanying instructions complies with the re­
quirements of this section. Volume I of the tables
applies to single advance transactions involving up
to 480 monthly payments or 104 weekly payments.
It may be used for regular transactions and for
transactions with any of the following irregularities:
an irregular first period, an irregular first payment,
and an irregular final payment. Volume II of the
tables applies to transactions involving multiple
advances and any type of payment or period irregu­
larity.
(2) Creditors may use any other computation tool in
determining the annual percentage rate if the rate so
determined equals the rate determined in accor­
dance with Supplement I, within the degree of
accuracy set forth in paragraph (a) of this section.
(c) Single add-on rate transactions. If a single add-on
rate is applied to all transactions with maturities up to
60 months and if all payments are equal in amount and
period, a single annual percentage rate may be dis­
closed for all those transactions, so long as it is the
highest annual percentage rate for any such transac­
tion.
(d) Certain transactions involving ranges o f balances.
For purposes of disclosing the annual percentage rate
referred to in § 226.17(g)(4)(Mail or telephone orders—
delay in disclosures) and (h)(Series of sales—delay in
disclosures), if the same finance charge is imposed on
all balances within a specified range of balances, the
annual percentage rate computed for the median bal­
ance may be disclosed for all the balances. However,
if the annual percentage rate computed for the median
balance understates the annual percentage rate com­
puted for the lowest balance by more than 8 percent of
the latter rate, the annual percentage rate shall be
computed on whatever lower balance will produce an
annual percentage rate that does not result in an
understatement of more than 8 percent of the rate
determined on the lowest balance.

46. For purposes of paragraph (a)(3) of this section, an irregular
transaction is one that includes one or more of the following features:
multiple advances, irregular payment periods or irregular payment
amounts (other than an irregular first period or an irregular first or
final payment).

Legal Developments

Section 226.23—Right of Rescission
(a) Consum er’s right to rescind.
(1) In a credit transaction in which a security inter­
est is or will be retained or acquired in a consumer’s
principal dwelling, each consumer whose ownership
interest is or will be subject to the security interest
shall have the right to rescind the transaction,
except for transactions described in paragraph (f) of
this section.47
(2) To exercise the right to rescind, the consumer
shall notify the creditor of the rescission by mail,
telegram or other means of written communication.
Notice is considered given when mailed, when filed
for telegraphic transmission or, if sent by other
means, when delivered to the creditor’s designated
place of business.
(3) The consumer may exercise the right to rescind
until midnight of the third business day following
consummation, delivery of the notice required by
paragraph (b) of this section, or delivery of all
material disclosures,48 whichever occurs last. If the
required notice or material disclosures are not deliv­
ered, the right to rescind shall expire 3 years after
consummation, upon transfer of all of the consum­
er’s interest in the property, or upon sale of the
property, whichever occurs first. In the case of
certain administrative proceedings, the rescission
period shall be extended in accordance with § 125(f)
of the act.
(4) When more than one consumer in a transaction
has the right to rescind, the exercise of the right by
one consumer shall be effective as to all consumers.
(b) Notice of right to rescind. In a transaction subject
to rescission, a creditor shall deliver 2 copies of the
notice of the right to rescind to each consumer entitled
to rescind. The notice shall be on a separate document
that identifies the transaction and shall clearly and
conspicuously disclose the following:
(1) The retention or acquisition of a security interest
in the consumer’s principal dwelling.
(2) The consumer’s right to rescind the transaction.
(3) How to exercise the right to rescind, with a form
for that purpose, designating the address of the
creditor’s place of business.
47. For purposes of this section, the addition to an existing obliga­
tion of a security interest in a consumer’s principal dwelling is a
transaction. The right of rescission applies only to the addition of the
security interest and not the existing obligation. The creditor shall
deliver the notice required by paragraph (b) of this section but need
not deliver new material disclosures. Delivery of the required notice
shall begin the rescission period.
48. The term “material disclosures” means the required disclo­
sures of the annual percentage rate, the finance charge, the amount
financed, the total of payments, and the payment schedule.



339

(4) The effects of rescission, as described in para­
graph (d) of this section.
(5) The date the rescission period expires.
(c) D elay o f creditor’s perform ance. Unless a con­
sumer waives the right of rescission under paragraph
(e) of this section, no money shall be disbursed other
than in escrow, no services shall be performed and no
materials delivered until the rescission period has
expired and the creditor is reasonably satisfied that the
consumer has not rescinded.
(d) Effects o f rescission.
(1) When a consumer rescinds a transaction, the
security interest giving rise to the right of rescission
becomes void and the consumer shall not be liable
for any amount, including any finance charge.
(2) Within 20 calendar days after receipt of a notice
of rescission, the creditor shall return any money or
property that has been given to anyone in connec­
tion with the transaction and shall take any action
necessary to reflect the termination of the security
interest.
(3) If the creditor has delivered any money or
property, the consumer may retain possession until
the creditor has met its obligation under paragraph
(d)(2) of this section. When the creditor has com­
plied with that paragraph, the consumer shall tender
the money or property to the creditor or, where the
latter would be impracticable or inequitable, tender
its reasonable value. At the consumer’s option,
tender of property may be made at the location of
the property or at the consumer’s residence. Tender
of money must be made at the creditor’s designated
place of business. If the creditor does not take
possession of the money or property within 20
calender days after the consumer’s tender, the con­
sumer may keep it without further obligation.
(4) The procedures outlined in paragraphs (d)(2) and
(3) of this section may be modified by court order.
(e) Consumer’s waiver o f right to rescind. The con­
sumer may modify or waive the right to rescind if the
consumer determines that the extension of credit is
needed to meet a bona fide personal financial emergen­
cy. To modify or waive the right, the consumer shall
give the creditor a dated written statement that de­
scribes the emergency, specifically modifies or waives
the right to rescind, and bears the signature of all of the
consumers entitled to rescind. Printed forms for this
purpose are prohibited.
(f) Exempt transactions. The right to rescind does not
apply to the following:
(1) A residential mortgage transaction.

340

Federal R eserve Bulletin □ April 1981

(2) A refinancing or consolidation by the same
creditor of an extension of credit already secured by
the consumer’s principal dwelling. If the new
amount financed exceeds the unpaid principal bal­
ance plus any unearned unpaid finance charge on
the existing debt, this exemption applies only to the
existing debt and its security interest.
(3) A transaction in which a state agency is a
creditor.
(4) An advance, other than an initial advance, in a
series of advances or in a series of single-payment
obligations that is treated as a single transaction
under § 226.17(c)(6), if the notice required by para­
graph (b) of this section and all material disclosures
have been given to the consumer.
(5) A renewal of optional insurance premiums that
is not considered a refinancing under § 226.20(a)(5).

Section 226.24— Advertising
(a) Actually available terms. If an advertisement for
credit states specific credit terms, it shall state only
those terms that actually are or will be arranged or
offered by the creditor.

(i) The amount or percentage of the downpay­
ment.
(ii) The terms of repayment.
(iii) The “ annual percentage rate,” using that
term, and, if the rate may be increased after
consummation, that fact.
(d) Catalogs and multiple-page advertisem ents
(1) If a catalog or other multiple-page advertisement
gives information in a table or schedule in sufficient
detail to permit determination of the disclosures
required by paragraph (c)(2) of this section, it shall
be considered a single advertisement if:
(i) The table or schedule is clearly set forth; and
(ii) Any statement of the credit terms in para­
graph (c)(1) of this section appearing anywhere
else in the catalog or advertisement clearly refers
to the page on which the table or schedule begins.
(2) A catalog or multiple-page advertisement com­
plies with paragraph (c)(2) of this section if the table
or schedule of terms includes all appropriate disclo­
sures for a representative scale of amounts up to the
level of the more commonly sold higher-priced
property or services offered.
S u b p a rt D —M is c e lla n e o u s

(b) A dvertisem ent o f rate o f finance charge. If an

advertisement states a rate of finance charge, it shall
state the rate as an “ annual percentage rate,” using
that term. If the annual percentage rate may be in­
creased after consummation, the advertisement shall
state that fact. The advertisement shall not state any
other rate, except that a simple annual rate or periodic
rate that is applied to an unpaid balance may be stated
in conjunction with, but not more conspicuously than,
the annual percentage rate.
(c) Advertisem ent o f terms that require additional
disclosures.

(1) If any of the following terms is set forth in an
advertisement, the advertisement shall meet the
requirements of paragraph (c)(2) of this section:
(i) The amount or percentage of any downpay­
ment.
(ii) The number of payments or period of repay­
ment.
(iii) The amount of any payment.
(iv) The amount of any finance charge.
(2) An advertisement stating any of the terms in
paragraph (c)(1) of this section shall state the follow­
ing terms,49 as applicable:

49. An example of one or more typical extensions of credit with a
statement of all the terms applicable to each may be used.



Section 226.25—Record Retention
(a) General rule. A creditor shall retain evidence of
compliance with this regulation (other than advertising
requirements under §§ 226.16 and 226.24) for 2 years
after the date disclosures are required to be made or
action is required to be taken. The administrative
agencies responsible for enforcing the regulation may
require creditors under their jurisdictions to retain
records for a longer period if necessary to carry out
their enforcement responsibilities under § 108 of the
act.
(b) Inspection o f records. A creditor shall permit the
agency responsible for enforcing this regulation with
respect to that creditor to inspect its relevant records
for compliance.

Section 226.26—Use of Annual Percentage Rate
in Oral Disclosures
(a) Open-end credit. In an oral response to a consum­
er’s inquiry about the cost of open-end credit, only the
annual percentage rate or rates shall be stated, except
that the periodic rate or rates also may be stated. If the
annual percentage rate cannot be determined in ad­
vance because there are finance charges other than a
periodic rate, the corresponding annual percentage

Legal Developments

rate shall be stated, and other cost information may be
given.
(b) Closed-end credit. In an oral response to a con­
sumer’s inquiry about the cost of closed-end credit,
only the annual percentage rate shall be stated, except
that a simple annual rate or periodic rate also may be
stated if it is applied to an unpaid balance. If the annual
percentage rate cannot be determined in advance, the
annual percentage rate for a sample transaction shall
be stated, and other cost information for the consum­
er’s specific transaction may be given.

Section 226.27—Spanish Language Disclosures
All disclosures required by this regulation shall be
made in the English language, except in the Common­
wealth of Puerto Rico, where creditors may, at their
option, make disclosures in the Spanish language. If
Spanish disclosures are made, English disclosures
shall be provided on the consumer’s request, either in
substitution for or in addition to the Spanish disclo­
sures. This requirement for providing English disclo­
sures on request shall not apply to advertisements
subject to §§ 226.16 and 226.24 of this regulation.

Section 226.28—Effect on State Laws
(a) Inconsistent disclosure requirements.
(1) State law requirements that are inconsistent
with the requirements contained in chapter 1 (Gen­
eral provisions), chapter 2 (Credit transactions), or
chapter 3 (Credit advertising) of the act and the
implementing provisions of this regulation are pre­
empted to the extent of the inconsistency. A state
law is inconsistent if it requires a creditor to make
disclosures or take actions that contradict the re­
quirements of the federal law. A state law is contra­
dictory if it requires the use of the same term to
represent a different amount or a different meaning
than the federal law, or if it requires the use of a
term different from that required in the federal law
to describe the same item. A creditor, state, or other
interested party may request the Board to determine
whether a state law requirement is inconsistent.
After the Board determines that a state law is
inconsistent, a creditor may not make disclosures
using the inconsistent term or form.
(2)(i) State law requirements are inconsistent with
the requirements contained in §§ 161 (Correction
of billing errors) or 162 (Regulation of credit
reports) of the act and the implementing provi­
sions of this regulation and are preempted if they
provide rights, responsibilities, or procedures for
consumers or creditors that are different from



341

those required by the federal law. However, a
state law that allows a consumer to inquire about
an open-end credit account and imposes on the
creditor an obligation to respond to such inquiry
after the time allowed in the federal law for the
consumer to submit written notice of a billing
error shall not be preempted in any situation
where the time period for making written notice
under this regulation has expired. If a creditor
gives written notice of a consumer’s rights under
such state law, the notice shall state that reliance
on the longer time period available under state
law may result in the loss of important rights that
could be preserved by acting more promptly
under federal law; it shall also explain that the
state law provisions apply only after expiration of
the time period for submitting a proper written
notice of a billing error under the federal law. If
the state disclosures are made on the same side of
a page as the required federal disclosures, the
state disclosures shall appear under a demarca­
tion line below the federal disclosures, and the
federal disclosures shall be identified by a head­
ing indicating that they are made in compliance
with federal law.
(ii) State law requirements are inconsistent with
the requirements contained in chapter 4 (Credit
billing) of the act (other than §§ 161 or 162) and
the implementing provisions of this regulation
and are preempted if the creditor cannot comply
with state law without violating federal law.
(iii) A state may request the Board to determine
whether its law is inconsistent with chapter 4 of
the act and its implementing provisions.
(b) Equivalent disclosure requirements. If the Board
determines that a disclosure required by state law
(other than a requirement relating to the finance
charge or annual percentage rate) is substantially the
same in meaning as a disclosure required under the act
or this regulation, creditors in that state may make the
state disclosure in lieu of the federal disclosure. A
creditor, state, or other interested party may request
the Board to determine whether a state disclosure is
substantially the same in meaning as a federal disclo­
sure.
(c) R equest fo r determ ination. The procedures under
which a request for a determination may be made
under this section are set forth in Appendix A.

Section 226.29—State Exemptions
(a) General rule. Any state may apply to the Board to
exempt a class of transactions within the state from the

342

Federal R eserve Bulletin □ April 1981

requirements of chapter 2 (Credit transactions) or
chapter 4 (Credit billing) of the act and the correspond­
ing provisions of this regulation. The Board shall grant
an exemption if it determines that:
(1) The state law is substantially similar to the
federal law or, in the case of chapter 4, affords the
consumer greater protection than the federal law;
and
(2) There is adequate provision for enforcement.
(b) Civil liability.
(1) No exemptions granted under this section shall
extend to the civil liability provisions of §§ 130 and
131 of the act.
(2) If an exemption has been granted, the disclo­
sures required by the applicable state law (except
any additional requirements not imposed by federal
law) shall constitute the disclosures required by this
act.
(c) Applications. The procedures under which a state
may apply for an exemption under this section are set
forth in Appendix B.

Appendixes A through J are available from Publica­
tions Services, Room MP-510, Board of Governors of
the Federal Reserve System, Washington, D.C. 20551.

A m endment

to

R e g u l a t io n K

The Board of Governors has amended Regulation K,
International Banking Operations, to remove ineligible
bankers’ acceptances from the limitation on the total
amount of bankers’ acceptances that foreign branches
of member banks may issue. Removal of this restric­
tion will assure that the regulatory treatment of bank­
ers’ acceptances issued by a foreign branch of a
member bank is on the same basis as those issued by a
member bank domestically.
Effective March 16, 1981, Section 211.3 (b)(2) is
amended to read as follows:

Section 211.3—Foreign Branches of Member
Banks
(b) * * *
(2) accept drafts or bills of exchange drawn upon it;
however, such acceptances that are of the type
described in paragraph 7 of section 13 of the FRA
(12 U.S.C. 372) shall be subject to the amount
limitations provided therein and such acceptances
that are of the type described in paragraph 12 of



section 13 of the FRA shall be subject to the amount
limitations provided therein;

A m endm ents

to

R e g u l a t io n P

The Board of Governors has amended Regulation P
(Minimum Security Devices and Procedures for Fed­
eral Reserve Banks and State Member Banks) imple­
menting the Bank Protection Act to eliminate several
reporting requirements. The actions lighten the regula­
tory reporting burden of all state member banks and
are expected to be of particular benefit to small banks.
1.
Effective March 10, 1981, Sections 216.3(c) and
216.4(a) are amended as set forth below:

Section 216.3—Security Devices
* *

*

*

*

(c) Im plementation. It is appropriate for banking of­
fices in areas with a high incidence of crime to install
many devices which would not be practicable because
of costs for small banking offices in areas substantially
free of crimes against financial institutions. Each bank
shall consider the appropriateness of installing, main­
taining, and operating security devices which are
expected to give a general level of bank protection at
least equivalent to the standards described in Appen­
dix A of this Part, as amended. In any case in which
(on the basis of the factors listed in paragraph (b) or
similar ones, the use of other measures, or the decision
that technological change allows the use of other
measures judged to give equivalent protection) it is
decided not to install, maintain, and operate devices at
least equivalent to these standards, the bank shall
preserve in its records a statement of the reasons for
such decision.

Section 216.4— Security Procedures
(a) D evelopm ent and administration. On or before
July 15, 1969 (or within thirty days after a State bank
becomes a member of the Federal Reserve System,
whichever is later), each State member bank shall
develop and provide for the administration of a securi­
ty program to protect each of its banking offices from
robberies, burglaries, and larcenies and to assist in the
identification and apprehension of persons who com­
mit such acts. This security program shall be reduced
to writing, approved by the bank’s board of directors,
and retained by the bank in such form as will readily
permit determination of its adequacy and effective­
ness.
* * * * *

L eg a l D evelo p m en ts

2. Section 216.5 is amended by removing paragraph
(b), redesignating paragraph (c) paragraph (b), and
redesignating paragraph (d) as paragraph (c), as set
forth below.

Section 216.5—Filing of Reports
(b) External crime reports. Each time a robbery,
burglary, or nonbank-employee larceny is perpetrated
or attempted at a banking office operated by a State
member bank, the bank shall, within a reasonable
time, file a report in conformity with the requirements
of Form P-2. One copy of such report shall be filed
with the appropriate State supervisory authority and
three copies of such report shall be filed with the
Federal Reserve Bank for the District in which the
head office of the reporting bank is located.
(c) Special reports. Each State member bank shall file
such other reports as the Board may require.

D e p o s it o r y I n s t it u t io n s D e r e g u l a t i o n
C o m m it t e e A m e n d m e n t s to I n t e r e s t o n
D e p o s it s

The Depository Institutions Deregulation Committee
has amended its rules to reduce the period between the
announcement and the effective date of the ceiling
rates of interest payable on the 26-week money market
certificate (MMC) and on the 2l/ 2 year or more small
saver certificate (SSC). Under the revised rules, the
ceiling rates of interest payable on MMCs and SSCs
will become effective on the day after they are an­
nounced. Ceiling rates for such deposits normally are
announced on Monday and, thus, normally will be
effective on Tuesday rather than on Thursday as under
the present rules. This action was taken by the Com­
mittee in order to more closely link the ceiling rates of
interest payable on MMCs and SSCs with current
market rates.
Effective April 7, 1981, the Committee amends
Sections 104 and 106 of Part 1204 (Interest on Depos­
its) to read as follows:

Section 1204.104— 26-Week Money Market
Time Deposits of Less Than $100,000
Commercial banks, mutual savings banks, and savings
and loan associations may pay interest on any nonne­
gotiable time deposit of $10,000 or more, with a
maturity of 26 weeks at a rate not to exceed the rates
set forth below. Rounding any rate to the next higher



343

rate is not permitted and interest may not be com­
pounded during the term of this deposit.
Rate established and announced
(auction average on a discount ba­
sis) for U.S. Treasury bills with
maturities of 26 weeks at the auc­
tion held immediately prior to the
date of deposit (“Bill Rate”)

Maximum per cent

Commercial Banks
7.50 per cent or below
Above 7.50 per cent

7.75
Bill Rate plus one-quarter of
one per cent

Mutual Savings Banks and Savings
and Loan Associations
7.25 per cent or below
Above 7.25 per cent, but below
8.50 per cent
8.50 per cent, but below 8.75
per cent
8.75 per cent or above

Hs

7.75
Bill Rate plus one-half of
one per cent
9
Bill Rate plus one-qudrter of
one per cent

* * *

Section 1204.106—Time Deposits of Less Than
$100,000 With Maturities of l x/2 Years or More
(a) A commercial bank may pay interest on any non­
negotiable time deposit with a maturity 2x/2 years or
more at a rate not to exceed the higher of one-quarter
of one per cent below the average 2!/ 2 year yield for
United States Treasury securities as determined and
announced by the United States Department of the
Treasury immediately prior to the date of deposit, or
9.25 per cent. Such announcement is made by the
United States Department of the Treasury every two
weeks. The average 2V2 year yield will be rounded by
the United States Department of the Treasury to the
nearest 5 basis points. The rate paid on any such
deposit cannot exceed the ceiling rate in effect on the
date of deposit. In no event shall the rate of interest
paid exceed 11.75 per cent, except as provided in 12
CFR 217.7(g) and in 12 CFR 329.6(b)(6).
(b) A mutual savings bank or savings and loan associ­
ation may pay interest on any nonnegotiable time
deposit with a maturity of 2x/2 years or more at a rate
not to exceed the higher of the average 2x/2 year yield
for United States Treasury securities as determined
and announced by the United States Department of
the Treasury immediately prior to the date of deposit,
or 9.50 per cent. Such announcement is made by the

344

Federal Reserve Bulletin □ April 1981

United States Department of the Treasury every two
weeks. The average 2l/ 2 year yield will be rounded by
the United States Department of the Treasury to the
nearest 5 basis points. The rate paid on any such
deposit cannot exceed the ceiling rate in effect on the
date of deposit. In no event shall the rate of interest
paid exceed 12.00 per cent.

By Order of the Board of Governors, effective
March 23, 1981.
Voting for this action: Chairman Volcker and Governors
Schultz, Wallich, and Teeters. Voting against this action:
Governors Partee and Gramley. Absent and not voting:
Governor Rice.

(Signed) J ames McAfee ,
[seal]
B a n k H o l d in g C o m p a n y a n d B a n k M e r g e r
Or d e r s Is su e d b y th e B o a r d o f G o v e r n o r s

O rders U nder S ection 3 o f Bank H olding
C om pany A c t

Emerson First National Company,
Emerson, Nebraska
Arcadia Agency Company,
Arcardia, Nebraska
Decatur Agency Company
Decatur, Nebraska
Tekamah Agency Company,
Tekamah, Nebraska
Order Denying Formation o f a Bank Holding
Company and , the Acquisition o f a Bank Holding
Company

Emerson First National Company (“ Emerson” ), Em­
erson, Nebraska, has applied for the Board’s approval
under section 3(a)(1) of the Bank Holding Company
Act (the “ BHC Act” ) (12 U.S.C. § 1842(a)(1)) of
formation of a bank holding company by acquiring 95
percent or more of the shares of The First National
Bank, Emerson, Nebraska. In connection with this
application, Arcadia Agency Company, Arcadia, Ne­
braska; Decatur Agency, Company, Decatur, Nebras­
ka; and Tekamah Agency Company, Tekamah, Ne­
braska, all of which are affiliated one-bank holding
companies within the meaning of the BHC Act, have
each applied for the Board’s approval under section
3(a)(3) of the BHC Act (12 U.S.C. § 1842(a)(3)) to
acquire, 24.9 percent of the outstanding shares of
Emerson.
Notice of the applications, affording opportunity for
interested persons to submit comments and views has
been given in accordance with section 3(b) of the Act.
The time for filing comments and views has expired,
and the Board has considered the applications and all
comments received in light of the factors set forth in
section 3(c) of the Act (12 U.S.C. § 1842(c)).
On the basis of the record, the applications are
denied for the reasons set forth in the Board’s State­
ment, which will be released at a later date.



A ssistan t Secretary o f the Board.

Statem ent by the Board o f Governors o f the Federal
R eserve System Regarding the A pplication o f
Emerson First N ational Com pany to Acquire the
First N ational Bank o f Emerson, Em erson,
N ebraska, and the R elated Applications o f Arcadia
Agency C om pany , D ecatur Agency Company, and
Tekamah Agency Company to Acquire Voting
Interests in Emerson First N ational Company.

By Order dated March 23, 1981, the Board denied the
application of Emerson First National Company, Em­
erson, Nebraska (“ Emerson” ), for the Board’s ap­
proval under section 3(a)(1) of the Bank Holding
Company Act (12 U.S.C. § 1842(a)(1)) (the “ Act” ), to
become a bank holding company by acquiring 95
percent of the outstanding voting shares of The First
National Bank of Emerson, Emerson, Nebraska
(“ Bank” ). In related actions, the Board denied the
applications of Tekamah Agency Company, Tekamah,
Nebraska (“ Tekamah” ), Decatur Agency Company,
Decatur, Nebraska (“ Decatur” ), and Arcadia Agency
Company, Arcadia, Nebraska (“ Arcadia” ), for the
Board’s approval for each to acquire 24.9 percent of
the outstanding voting shares of Emerson, under sec­
tion 3(a)(3) of the BHC Act (12 U.S.C. § 1842(a)(3)).
Emerson, a nonoperating corporation, was orga­
nized for the purpose of becoming a bank holding
company by acquiring Bank, which holds deposits of
$9.6 million.1 Upon acquisition of Bank, Emerson
would control the 224th largest bank in Nebraska and
hold approximately 0.1 percent of the total deposits in
commercial banks in the state.
Arcadia, Decatur, and Tekamah are one-bank hold­
ing companies by virtue of their ownership respective­
ly of Arcadia State Bank, Arcadia, Nebraska (“ Arca­
dia Bank” ), Citizens State Bank, Decatur, Nebraska
(“ Decatur Bank” ) and First National Bank of Teka­
mah, Tekamah, Nebraska (“ Tekamah Bank” ). Arca­
dia Bank, Decatur Bank, and Tekamah Bank hold
deposits of $8.8 million, $5.6 million, and $23.6 mil­
lion, respectively.2 These three bank holding compa­
1. Unless otherwise indicated, all banking data are as of June 30,
1980.
2. Data are as of December 31, 1980.

L eg a l D evelo p m en ts

nies constitute a chain banking organization, which,
after consummation of this proposal, would control
74.7 percent of the voting shares of Emerson.
Bank is the second largest of three banking organi­
zations in the relevant market, controlling 24.8 percent
of the total deposits in commercial banks in the
market.3 The principal of Emerson and Bank is also a
principal of Tekamah, Arcadia and Decatur and their
subsidiary banks. However, neither Tekamah Bank,
Arcadia Bank, nor Decatur Bank is located in the same
banking market as Emerson and Bank. It appears from
the facts of record the consummation of the proposal
would result in no adverse effects on existing or
potential competition in any relevant area. According­
ly, the Board concludes that competitive consider­
ations are consistent with approval.
The Board has indicated on previous occasions that
a holding company should be a source of strength to its
subsidiary bank, and that the Board would closely
examine the condition of an applicant in each case
with these considerations in mind.4 Furthermore,
where the principal of an applicant is engaged in
operating a chain of banking organizations, the Board,
in addition to analyzing the one-bank holding company
proposal before it, also considers the total chain and
analyzes the financial and managerial resources and
future prospects of the institutions comprising the
chain.
In this case, the Board is concerned that the use of
acquisition debt, which amounts to 100 percent of
Bank’s original purchase price, may adversely affect
the ability of the bank holding companies in the chain
to serve as a source of strength to their subsidiary
banks. A one-bank holding company that relies on the
earnings of its subsidiary bank to service debt often
creates a drain on the resources of its subsidiary bank.
The Board has found that with a debt-to-equity ratio
less than .3 to 1, a bank holding company generally has
sufficient access to debt and equity markets to aid its
subsidiary bank should unforeseen circumstances oc­
cur. As this ratio increases beyond .3 to 1, the ability
of the bank holding company to utilize debt and equity
markets correspondingly decreases. These concerns
are equally applicable to chain banking organizations.
The Board has recognized that, on balance, the
public interest is served by facilitating the transfer of
ownership of small community banks to one-bank
holding companies even though such transfers often
require the assumption of a substantial acquisition
3. The relevant banking market is approximated by Thurston
County, Nebraska, and the southeast portion of Dixon County,
Nebraska.
4. In BH Co., Inc., 60 F ederal R eserve B u lletin 123 (1974), the
Board expressed its concern abut the financial flexibility of bank
holding companies.



345

debt. Under these circumstances, the Board has been
willing to approve the formation of one-bank holding
companies with what the Board views as excessive
debt obligations on the condition that they can demon­
strate their ability to become a source of strength to
their subsidiary banks within a relatively short period
of time, such as by reducing their debt-to-equity ratio
of .3 to 1 within 12 years of consummation.
The Board also believes that the amount of acquisi­
tion debt that can be incurred in a one-bank holding
company formation by one company or a chain of
bank holding companies must be resricted to 75 per­
cent of the purchase price of the bank to be acquired.
This limitation reduces the amount of debt, which
usually still remains excessive; reduces the possibility
of strain on the financial resources of the banking
organization; and creates a greater incentive for man­
agement to conduct the affairs of the banking organiza­
tion in a safe and sound manner. In this connection,
the Board notes that the Emerson proposal calls for
the chain of banking organizations to assume 100
percent of the purchase price of Bank through debt.
The debt to be assumed by Emerson would result in
a debt-to-equity ratio of 1.37 to 1, which is greater than
the .3 to 1 ratio that the Board considers desirable.
However, the Board is willing to permit this level of
debt in Emerson for the purpose of facilitating the
transfer of ownership of small banks as discussed
above. The Board believes that these special consider­
ations do not apply to Tekamah’s assumption of a
portion of Emerson’s acquisition debt. The Board is
concerned that the overall financial consequences of
the debt servicing requirements created by this pro­
posal present adverse financial factors that warrant
denial.
Under this proposal, Tekamah, a bank holding com­
pany that is already in debt, would borrow an addition­
al $805,500, which represents approximately 25 per­
cent of the acquisition cost of Bank. This new debt
would double Tekamah’s debt-to-equity ratio, increas­
ing it from .4:1 to .9:1. The Board regards such a
substantial increase in Tekamah’s debt-to-equity ratio
for the purpose of funding a bank acquisition by a
related bank holding company to be inconsistent with
Tekamah’s responsibility to serve as a source of
strength to its subsidiary bank. Tekamah’s existing
indebtedness exceeds what the Board would consider
appropriate for Tekamah to reasonably meet any un­
expected needs of Tekamah Bank. The assumption of
the additional debt by Tekamah for purposes unrelated
to strengthening Tekamah Bank would further impair
its ability to meet the needs of its subsidiary bank
should unforeseen circumstances occur. The Board
believes that the primary focus of a bank holding
company should be the operations of its subsidiaries

346

Federal Reserve Bulletin □ April 1981

and any diversion from this objective is generally not
consistent with the public interest. Accordingly, the
Board concludes that considerations relating to the
financial resources and future prospects of the chain of
related banking organizations are so adverse as to
warrant denial of these applications. Managerial re­
sources of Applicants, Bank, and the other banks in
the chain are consistent with approval of the transac­
tion.
No changes in the services offered by Bank are
expected to follow from consummation of the pro­
posed transaction. Consequently, the Board concludes
that considerations relating to the convenience and
needs of the community to be served lend no weight
toward approval of the proposal. Thus, based on the
criteria the Board must consider under the Act, there
are no factors favoring approval of these applications
and the Board’s review of the banking factors, as
summarized above, favor denial.
On the basis of the above, and all the facts of record,
the Board concludes that banking considerations in­
volved in this proposal present adverse factors bearing
upon the financial resources and future prospects of
the chain of related banking organizations, in general,
and of Tekamah, in particular. Such adverse factors
are not outweighed by any procompetitive effects or
by benefits that would result in better service to the
convenience and needs of the community. According­
ly, it is the Board’s judgment that approval of these
applications would not be in the public interest, and
that the applications should be denied.
Board of Governors of the Federal Reserve System,
April 2, 1981.
(Signed) J ames McAfee ,
[seal]

A ssistan t Secretary o f the Board.

Dissenting Statem ent o f Governors Partee and
Gramley

We would approve the application of Emerson First
National Company to become a one-bank holding
company and the related applications of Arcadia
Agency Company, Decatur Agency Company, and
Tekamah Agency Company to acquire voting interests
in Emerson First National Company. In our view, the
facts of record in this case indicate that both Emerson
and Tekamah are capable of servicing their proposed
debt, and that financial factors favor approval of these
applications.
In light of these considerations, a denial in this case
would mean that one-bank holding companies, and
similar chain banking organizations, would be required
to limit their acquisition debt to less than 75 percent of



the purchase price of a bank to be acquired, and not
increase their debt-to-equity ratio above .3 to 1 for a
nonsubsidiary bank acquisition. We believe that such
requirements should be adopted through a rulemaking
procedure pursuant to section 553 of the Administra­
tive Procedure Act (5 U.S.C. § 553) and not through
adjudication by the Board under the Bank Holding
Company Act. The rulemaking procedure would put
the industry on notice of what the Board considers to
be safe and sound banking practices.
For the reasons stated above and based upon the
facts of record, we believe these appications should be
approved.
April 2, 1981

Financial Services of Winger,
Winger, Minnesota
Order Denying Formation o f a Bank Holding
Company

Financial Services of Winger, Winger, Minnesota, has
applied for the Board’s approval under section 3(a)
(1) of the Bank Holding Company Act (12 U.S.C.
§ 1842(a)(1)) of formation of a bank holding company
by acquiring 94.6 percent of the voting shares of
Farmers State Bank of Winger, Winger, Minnesota
(“ Bank” ).
Notice of the application, affording opportunity for
interested persons to submit comments and views, has
been given in accordance with section 3(b) of the Act.
The time for filing comments and views has expired,
and the Board has considered the application and all
comments received in light of the factors set forth in
section 3(c) of the Act (12 U.S.C § 1842(c)).
Applicant, a nonoperating Minnesota corporation
with no subsidiaries, was organized for the purpose of
becoming a bank holding company by acquiring Bank,
which holds deposits of $7.6 million.1 Upon acquisi­
tion of Bank, Applicant would control the 424th largest
bank in Minnesota and would hold approximately 0.03
percent of the total deposits of commercial banks in
the state.
Bank is the smallest of four banking organizations in
the relevant banking market and holds approximately
19.3 percent of the total deposits in commercial banks
in the market.2 Principals of Applicant and Bank have
no interest in any other financial institutions. It ap­

1. All banking data are as of December 31, 1979.
2. The relevant banking market is approximated by the eastern half
of Polk County, Minnesota.

L eg a l D evelo p m en ts

pears from the facts of record that consummation of
the proposal would not result in any adverse effects
upon competition or increase concentration of banking
resources in any relevant area. Accordingly, the Board
concludes that competitive considerations are consis­
tent with approval of the application.
The Board has indicated on previous occasions that
a holding company should serve as a source of finan­
cial and managerial strength to its subsidiary bank(s),
and that the Board would closely examine the condi­
tion of an applicant in each case with this consider­
ation in mind. In this case, the Board concludes that
the record in this application presents adverse consid­
erations that warrant denial of the proposal to form a
bank holding company.
With regard to financial considerations, the Board
notes that in connection with this proposal Applicant
would incur a sizeable debt, which it proposes to
service over a 15-year period through dividends to be
declared by Bank, and tax savings to be derived from
filing consolidated tax returns. Applicant’s estimates
of the overall cost of servicing this debt appear to be
overly optimistic. Moreover, in light of current eco­
nomic conditions, the amount of debt involved in the
proposal, and Bank’s historical earnings and growth
performance, the Board believes that Applicant would
lack sufficient flexibility to service its debt, maintain
adequate capital in Bank, and meet an unforeseen
problems that might arise at Bank. Accordingly, the
Board is of the opinion that the considerations relating
to financial resources and future prospects of Appli­
cant and Bank weigh against approval of the applica­
tion. Managerial resources of Applicant and Bank are
generally satisfactory and would be consistent with
approval.
No significant changes in the services offered by
Bank are expected to follow from consummation of
the proposed transaction. Consequently, convenience
and needs factors are consistent with, but lend no
weight toward, approval of this application.
On the basis of the circumstances concerning this
application, the Board concludes that the banking
considerations involved in this proposal present ad­
verse factors bearing upon the financial resources and
future prospects of Applicant and Bank. Such adverse
factors are not outweighed by any procompetitive
effects or by benefits to the convenience and needs of
the community. Accordingly, it is the Board’s judg­
ment that approval of the application would not be in
the public interest and the application should be de­
nied.
On the basis of the facts of record, the application is
denied for the reasons summarized above.
By order of the Board of Governors, effective
March 3, 1981.



347

Voting for this action: Vice Chairman Schultz and Gover­
nors Wallich, Partee, Rice, and Gramley. Absent and not
voting: Chairman Volcker and Governor Teeters.

(Signed) J ames McAfee ,
[seal]

A ssistan t Secretary o f the Board.

First Bank Holding Company of Batesville,
Batesville, Arkansas
Order Approving Formation o f Bank Holding
Company

First Bank Holding Company of Batesville, Batesville,
Arkansas, has applied for the Board’s approval under
section 3(a)(1) of the Act (12 U.S.C. § 1842(a)(1)) of
formation of a bank holding company by acquiring 80
percent or more of the voting shares of First National
Bank (“ Batesville Bank” ), Batesville, Arkansas.
Notice of the application, affording opportunity for
interested persons to submit comments, has been
given in accordance with section 3(b) of the Act. The
time for filing comments has expired, and the Board
has considered the application and all comments re­
ceived in light of the factors set forth in section 3(c) of
the Act (12 U.S.C. § 1842(c)).
Applicant, a nonoperating corporation with no sub­
sidiaries, was organized for the purpose of becoming a
bank holding company through the acquisition of
Batesville Bank. Upon acquisition of Batesville Bank,
Applicant would be the 25th largest banking organiza­
tion in Arkansas, controlling 0.8 percent of total
deposits in commercial banks in the state.1
Bank is the largest of three banks competing in the
relevant banking market,2 controlling deposits of $57.2
million, representing 54.9 percent of total market
deposits. While this proposal involves a restructuring
of Batesville Bank’s ownership from individuals to a
corporation owned by substantially those same indi­
viduals, the Board notes that two of Applicant’s
principals also are associated with another bank locat­
ed in the relevant banking market. The Chairman of
Applicant and Batesville Bank also owns 96.5 percent
of Bank of Newark (“ Newark Bank” ), Newark, Ar­
kansas, the smallest bank in the Independence County
banking market, with deposits of $3.7 million, repre­
senting 3.6 percent of total market deposits. In addi­
tion, this individual serves as President and director of
1. Banking data are as of December 31, 1979, unless otherwise
noted.
2. The relevant banking market is approximated by Independence
County, Arkansas.

348

Federal Reserve Bulletin □ April 1981

Newark Bank, and the President of Applicant and
Batesville Bank serves as a director of Newark Bank.
In analyzing the competitive effects of an applica­
tion to form a bank holding company where an individ­
ual or group of individuals, controlling in a personal
capacity more than one bank in a relevant banking
market, seeks to transfer control of one or more of the
banks to a holding company, the Board takes into
consideration the competitive effects of the transac­
tion whereby common ownership was established be­
tween the banks in the market.3 Inasmuch as Bates­
ville Bank and Newark Bank in 1976 controlled 55.0
percent and 3.3 percent, respectively, of total market
deposits,4 the acquisition of Newark Bank by Appli­
cant’s principals appears to have eliminated a substan­
tial amount of existing competition in the relevant
banking market. However, based upon all of the facts
of record, including the poor financial condition of
Newark Bank at the time of its acquisition by Appli­
cant’s principals, it is the Board’s opinion that the
adverse effects associated with that acquisition are
clearly outweighed by the considerations discussed
below.
The financial and managerial resources and future
prospects of Applicant, Batesville Bank, and Newark
Bank are currently regarded as satisfactory. At the
time of the acquisition of Newark Bank by Applicant’s
principals, however, it was apparent that the contin­
ued operation of Newark Bank was jeopardized. While
a less anticompetitive means of assuring the existence
of Newark Bank as an alternative source of banking
services would have been preferable, the record indi­
cates that such an alternative was not readily avail­
able. Further, Newark Bank’s financial condition has
improved substantially under the management of Ap­
plicant’s principals and it has significantly expanded
the services it offers. Thus, banking factors and conve­
nience and needs considerations clearly outweigh the
substantially adverse competitive effects of the 1976
acquisition and lend significant weight toward approv­
al of this proposal to become a bank holding company.
Based upon these and other facts of record, the Board
has determined that consummation of the transaction
would be in the public interest and that the application
should be approved.
On the basis of the record, the application is ap­
proved for the reasons summarized above. The trans­
action shall not be consummated before the thirtieth
3. E.g., Mid-Nebraska Bancshares, Inc., 64 Federal Reserve
Bulletin 589 (1978), afTd sub nom., Mid-Nebraska Bancshares, Inc.
v. Board of Governors, 627 F.2d 266 (D.C. Cir. 1980).
4. Deposit data relating to the time Newark Bank became affiliated
with Batesville Bank are as of December 31, 1976, and exclude
deposits held by a branch of Batesville Bank located in a separate
banking market.



calendar day following the effective date of this Order
or later than three months after the effective date of
this Order, unless such period is extended for good
cause by the Board or by the Federal Reserve Bank of
St. Louis pursuant to delegated authority.
By order of the Board of Governors, effective
March 24, 1981.
Voting for this action: Chairman Volcker and Governors
Schultz, Wallich, Partee, Teeters, and Gramley. Absent and
not voting: Governor Rice.

(Signed)
[s e a l]

Jam es M c A fe e ,

A ssistan t Secretary o f the Board.

First Community Bancorporation,
Joplin, Missouri
Order Approving Acquisition o f Bank

First Community Bancorporation, Joplin, Missouri, a
bank holding company within the meaning of the Bank
Holding Company Act, has applied for the Board’s
approval under section 3(a)(3) of the Act (12 U.S.C.
§ 1842(a)(3)) to acquire 82.9 percent or more of the
voting shares of Merchants and Miners Bank of Webb
City (“ Bank” ), Webb City, Missouri.
Notice of the application, affording opportunity for
interested persons to submit comments, has been
given in accordance with section 3(b) of the Act. The
time for filing comments has expired, and the Board
has considered the application and all comments re­
ceived, including those of Webb City Bank (“ Protes­
tant” ), Webb City, Missouri, and Mr. Robert J. Baker,
Webb City, Missouri, in light of the factors set forth in
section 3(c) of the Act.1
Applicant, the 17th largest banking organization in
Missouri, controls six subsidiary banks with aggregate
deposits of $175.1 million, representing 0.7 percent of
the commercial bank deposits in the state.2 Upon
consummation of the proposal, Applicant’s share of
deposits in commercial banks in Missouri would in­
crease by only 0.03 percent and Applicant would
remain the 17th largest banking organization in the
state. Accordingly, consummation of this proposal
would not have an appreciable effect upon the concen­
tration of commercial banking resources in Missouri.

1. Webb City Bank, the larger of the two banks located in Webb
City, urged denial of the proposal on competitive grounds. Mr. Baker,
an interested member of the public, urged approval because of
convenience and needs considerations.
2. Banking data are as of December 31, 1979, unless otherwise
noted.

L eg a l D evelopm en ts

Protestant, in contending that consummation of the
proposal would result in adverse competitive effects,
asserts that the relevant banking market should be
limited to the area within a ten-mile radius of Joplin.3
In proposing this definition of the market, Protestant
relied on the fact that this is the area within which
management official interlocks between depository
institutions are generally prohibited by the Depository
Institution Management Interlocks Act (12 U.S.C.
§ 3202) (the “ DIMIA” ) and the Board’s Regulation L
(12 C.F.R. Part 212). The DIMIA prohibits a manage­
ment official of a depository institution from serving as
a management official of another depository institution
in the same city, town, or village, or a contiguous or
adjacent city, town, or village. Federal law has prohib­
ited management interlocks between banks in contigu­
ous or adjacent cities, towns, and villages since 1935,4
but the Board has not limited the relevant geographic
area for analyzing competition among banks in this
manner. The Board believes that the relevant banking
market should consist of the localized area where the
banks involved offer their services and where local
customers can practicably turn for alternatives. As the
Supreme Court has noted in this regard, “ the proper
question is not where the parties to the merger do
business or even where they compete, but where,
within the area of competitive overlap, the effect of the
merger on competition will be direct and immediate.” 5
In determining the area within which the effect of
this proposed acquisition on competition will be direct
and immediate, the Board has analyzed a number of
factors, including commuter patterns, newspaper cir­
culation, and regional commercial growth projections
in Joplin and surrounding areas. Based on these and
other facts of record, it is the Board’s judgment that
the relevant geographic market for analyzing the com­
petitive effects of ths proposal is the Joplin banking
market, which is approximated by all of Jasper and
Newton Counties, Missouri, and the portion of Chero­
kee County, Kansas, that includes the towns of Galena
and Baxter Springs.6

3. Webb City is located approximately seven miles from Joplin,
Missouri.
4. Section 8 of the Clayton Antitrust Act (15 U.S.C. § 19) generally
prohibited a director, officer, or employee of a member bank from
acting in such capacities with another bank located in the same city,
town, or village or a contiguous or adjacent city, town, or village. The
fact that section 212.2(a) of the Board’s Regulation L (12 C.F.R.
§ 212.2(a)), adopted July 19, 1979, pursuant to the DIMIA, defines
“adjacent cities, towns, or villages” as “cities, towns, or villages
whose borders are within ten road miles of each other at their closest
points” does not affect the definition of the relevant banking market.
5. United States v. Philadelphia National Bank, 374 U.S. 321, 357
(1963); United States v. Phillipsburg National Bank, 399 US. 350,
364-365 (1970).
6 . Applicant believes that the Joplin banking market should be
defined as portions of Jasper and Newton Counties and parts of



349

Applicant, through its banking subsidiaries, First
National Bank and Trust, Joplin, Missouri, and Com­
munity National Bank, Joplin, Missouri, is the largest
of 18 banking organizations competing in the Joplin
banking market, with total market deposits of $132.8
million, representing 25.0 percent of commercial bank
deposits in the market.7 Bank is the 16th largest
banking organization in the market, with total deposits
of $7.2 million, representing 1.4 percent of market
deposits. Consummation of the acquisition will in­
crease Applicant’s share of deposits in the Joplin
banking market to 26.4 percent. In light of these facts
of record, the Board finds that consummation of the
proposal would result in the elimination of existing
competition between Applicant and Bank and remove
an independent competitor from the market.
Proposals involving the acquisition of an indepen­
dent banking organization by an organization already
represented in the relevant market must be analyzed
carefully, giving attention to all the facts presented in
each case, such as the structural characteristics of the
market as well as the quantitative factors associated
with the proposal. In this instance, the Board finds
that there are several significant factors that mitigate
the adverse competitive effects of this proposal. The
Joplin banking market is relatively unconcentrated,
with a four-firm concentration ratio of 54.9 percent.
Further, there are eleven remaining independent and
unaffiliated banks in the market that could serve as
entry vehicles by bank holding companies not repre­
sented in the market. Of those bank holding companies
represented in the Joplin banking market, four are
among the six largest bank holding companies in
Missouri, while Applicant comparatively ranks only as
17th largest in the state. Finally, the Board notes that
Bank is a comparatively small institution with limited
resources, and, therefore, its overall competitive influ­
ence in the market is regarded as relatively insignifi­
cant. Accordingly, on the basis of the above and other
facts of record, the Board does not regard the effect of
the proposal on competition in the Joplin banking
market as so substantially adverse as to warrant denial
of the application.
The financial and managerial resources and future
prospects of Applicant, its subsidiaries, and Bank are
regarded as generally satisfactory. Upon acquisition of
Bank, Applicant will assist Bank in providing new and
improved services to its customers. In particular,
Cherokee County, Kansas, and Ottawa County, Oklahoma. The
Board has determined that Joplin’s economic influence extends
throughout Jasper and Newton Counties. The portion of Ottawa
County that Applicant included in its proposed definition is not, in the
Board’s judgment, sufficiently dependent upon Joplin to warrant
inclusion in the Joplin banking market.
7. Market data are as of June 30, 1980.

350

Federal Reserve Bulletin □ April 1981

Applicant will assist Bank in providing improved de­
mand and savings deposit services, incuding checking
overdraft privileges and automatic transfer services or
NOW accounts, and broadening Bank’s range of lend­
ing services. In addition, Applicant will assist Bank in
improving its facilities to provide for safe deposit
boxes, drive-in banking facilities, automated teller
machines, and facilities for handicapped persons. Fi­
nally, affiliation with Applicant would provide Bank
with access to Applicant’s electronic data processing
facilities and managerial resources. The record indi­
cates that Bank does not currently have the resources
to provide these services, and that, although there is
another bank in Webb City, the introduction of these
services through Bank as a result of this proposal will
permit the banking needs of the Webb City community
to be better served, thereby enhancing the overall
quality of banking services. Since state law prohibits
banks from branching within Missouri, and in the
Board’s judgment Webb City is not attractive for de
novo entry, acquisition of Bank by a larger organiza­
tion appears to be the most expedient method of
accomplishing these purposes. Therefore, consider­
ations relating to the convenience and needs of the
community to be served lend substantial weight to­
ward approval of the application, and in the Board’s
view, outweigh any adverse competitive effects that
would result from consummation of the proposal.
Based on the foregoing and other considerations re­
flected in the record, it is the Board’s judgment that
the proposed acquisition is in the public interest and
that the application should be approved.
On the basis of the record, the application is ap­
proved for the reasons summarized above. The trans­
action shall not be consummated before the thirtieth
calendar day following the effective date of this Order
or later than three months after the effective date of
this Order, unless such period is extended for good
cause by the Board or by the Federal Reserve Bank of
Kansas City pursuant to delegated authority.
By order of the Board of Governors, effective
March 12, 1981.
Voting for this action: Chairman Volcker and Governors
Schultz, Partee, Teeters, Rice, and Gramley. Absent and not
voting: Governor Wallich.

[s e a l ]




(Signed) J a m e s M c A f e e ,
Assistant Secretary o f the Board.

First Southeast Banking Corporation,
Darien, Wisconsin
Order Approving Acquisition o f One Bank,
Conditionally Approving Acquisition o f Two Banks,
and Denying Acquisition o f Two Banks

First Southeast Banking Corp., Darien, Wisconsin, a
bank holding company within the meaning of the Bank
Holding Company Act, has applied for the Board’s
approval under section 3(a)(3) of the Act (12 U.S.C.
§ 1842(a)(3)) to acquire 62 percent or more of the
voting shares of First Bank Southeast, N.A., Keno­
sha, Wisconsin (“ Kenosha Bank” ), 80 percent or
more of the voting shares of First Bank Southeast of
West Kenosha, Kenosha, Wisconsin (“ West Kenosha
Bank” ), 87 percent or more of the voting shares of
First Bank Southeast of Silver Lake, Silver Lake,
Wisconsin (“ Silver Lake Bank” ), and 88 percent or
more of the voting shares of each of the following
banks: First Bank Southeast of Lake Geneva, Lake
Geneva, Wisconsin (“ Lake Geneva Bank” ), and First
Bank Southeast of Twin Lakes, Twin Lakes, Wiscon­
sin (“ Twin Lakes Bank” ).
Notice of the applications, affording opportunity for
interested persons to submit comments and views, has
been given in accordance with section 3(b) of the Act.
The time for filing comments and views has expired,
and the Board has considered the applications and all
comments received in light of the factors set forth in
section 3(c) of the Act (12 U.S.C. § 1842(c)).
Applicant is a one-bank holding company that con­
trols First Bank Southeast of Darien, Darien, Wiscon­
sin (“ Darien Bank” ). Darien Bank is the 553rd largest
commercial bank in Wisconsin, with deposits of $6.9
million, representing .03 percent of the total deposits
in commercial banks in the state.1 Approval of the
proposals to acquire the five additional banks, which
hold deposits of $120.7 million, would cause Applicant
to become the sixteenth largest banking organization
in Wisconsin, controlling approximately 0.6 percent of
the total deposits in commercial banks in Wisconsin
and would not result in a significant increase in the
concentration of banking resources in Wisconsin.
Lake Geneva Bank is located in the Walworth
banking market,2 which also contains Applicant’s ex­
isting subsidiary, Darien Bank. Lake Geneva Bank is
the fourth largest of fifteen banking organizations in

1. All deposit data are as of December 31, 1979, unless otherwise
indicated.
2. The Walworth banking market is defined as Walworth County,
Wisconsin (except for the township of East Troy), and the township of
Burlington in Racine County, Wisconsin.

L eg a l D evelo p m en ts

the Walworth banking market, controlling $34.2 mil­
lion in deposits, which represents 8.9 percent of the
total deposits in commercial banks in the market.
Darien Bank is the fourteenth largest banking organi­
zation in the Walworth banking market, controlling 1.8
percent of the total deposits in commercial banks in
the market. Upon completion of the proposed acquisi­
tions, Applicant’s banks in the Walworth banking
market would control $41.1 million in deposits, which
represent 10.7 percent of the total deposits in commer­
cial banks in the market.
The four other banks that Applicant proposes to
acquire are located in the Kenosha banking market.3
In the Kenosha market, Kenosha Bank ranks third out
of the market’s eight commercial banks with $55.7
million in deposits, or 16.3 percent of the total deposits
in commercial banks in the market. West Kenosha
Bank ranks sixth, with $11.1 million in deposits (3.3
percent of the market total); Silver Lake Bank ranks
seventh, with $10.7 million in deposits (3.1 percent of
the market total); and Twin Lakes Bank ranks eighth,
with $9.0 million in deposits (2.6 percent of the market
total). Upon completion of the proposed acquisitions,
Applicant would control a total of $86.5 million in
deposits in the Kenosha market, or 25.3 percent of the
total deposits in commercial banks in that market, and
Applicant would become the second largest banking
organization in the Kenosha market.
Applicant’s principal, who owns 100 percent of
Applicant’s stock, also owns controlling interests in
each of the banks that Applicant proposes to acquire.
Since these applications represent a restructuring of
existing ownership interests, no existing competition
would be eliminated as a result of the proposed
acquisitions. However, section 3(c) of the Bank Hold­
ing Company Act precludes the Board from approving
any proposed acquisition by a bank holding company
that (1) would result in a monopoly or be in further­
ance of any combination to monopolize or attempt to
monopolize a banking market, or that (2) may substan­
tially lessen competition or tend to create a monopoly
or be in restraint of trade in any banking market unless
the anticompetitive effects are clearly outweighed by
the convenience and needs of the community to be
served.

3. The Kenosha banking market is defined as Kenosha County,
Wisconsin. Applicant has urged that the Kenosha banking market be
defined as Kenosha County and Western Racine County. The staffs of
the Federal Reserve Bank of Chicago and the Board have made a
thorough review and analysis of the definition of the relevant market.
As a result of this review and its analysis of all the facts of record,
including commuting and population data, the Board has concluded
that the appropriate area for analyzing the competitive effects in the
Kenosha market of the subject proposals is approximated by the
single-county area described herein.



351

As part of its analysis of the competitive effects of a
proposal involving the restructuring of a bank’s own­
ership into corporate form, the Board takes into con­
sideration the competitive effects of the transaction
whereby common share ownership or interlocking
director or officer relationships were established be­
tween the subject bank and one or more of the other
banks in the same market.4 In this case the Board has
considered the competitive effects of the original
transactions by which all of the banks that are the
subjects of this proposal came under common owner­
ship.
In the Walworth banking market, Applicant’s princi­
pal acquired control of Lake Geneva Bank in 1975 and
Darien Bank in 1977. While these acquisitions had no
competitive effect in the Kenosha market, the 1977
acquisition eliminated some existing competition in
the Walworth market. However, the Board does not
view the competitive effects of this acquisition as
significant, due to the market share (11.5 percent) then
held by the two banks, the fact that the market was not
particularly concentrated at the time, and the exis­
tence of eleven unaffiliated banks that remained in the
market as possible acquisition candidates. According­
ly, competitive considerations pertaining to the acqui­
sition of Lake Geneva Bank are consistent with ap­
proval.
In the Kenosha banking market, the acquisition by
Applicant’s principal of Kenosha Bank in 1969 consti­
tuted an acquisition of an existing bank by a person
controlling no other banking interests within the mar­
ket. Accordingly, the Board concludes that no existing
competition in the Kenosha market was eliminated
when Applicant’s principal acquired control of Keno­
sha Bank in 1969. Additionally, the Board concludes
that neither this acquisition nor the other Kenosha
market acquisitions affected competition in the Wal­
worth market.
The acquisition by Applicant’s principal of Silver
Lake Bank in 1970 eliminated some existing competi­
tion in the Kenosha market. In 1970, Kenosha Bank
ranked third out of seven banks in the Kenosha
banking market, with $27.6 million in deposits, or 17.3
percent of the market total. Silver Lake Bank ranked
fifth, with $5.1 million in deposits, or 3.2 percent of the
market total. Upon acquisition of Silver Lake Bank,
Applicant’s principal controlled 20.5 percent of the
total deposits in commercial banks in the market and
the banks under his control in the Kenosha market
constituted the third largest banking organization in

4. Mid-Nebraska Bancshares, Inc. \. Board of Governors, No. 781658, slip op. 6-8 (D.C. Cir. February 15, 1980); Mahaska Investment
Co., 63 F ederal R eserve B ulletin 579, 580 (1977).

352

Federal Reserve Bulletin □ April 1981

that market. However, the Board does not view the
competitive effect as significantly adverse, because of
certain considerations concerning that acquisition.
Specifically, Silver Lake Bank was eighteen miles
from the closest office of Kenosha Bank in 1970, no
significant overlap of deposits and loans between the
two banks then existed, and five banking alternatives
remained in the market. Thus, although some existing
competition was eliminated when Applicant’s princi­
pal acquired Silver Lake Bank in 1970, the competitive
effect of this acquisition taken alone would not be
sufficient to warrant denial of the proposal if Appli­
cant’s principal did not own additional banks in the
Kenosha banking market.
With regard to the other acquisitions in the Kenosha
market, the Board concludes that Applicant’s princi­
pal’s acquisition of West Kenosha Bank in 1972 and
Twin Lakes Bank in 1977 had substantially adverse
effects on existing competition in the market. Upon
acquisition of West Kenosha Bank in 1972, Appli­
cant’s principal eliminated a banking alternative in this
highly concentrated market5 and controlled three of
the eight banks competing in the market, representing
22.0 percent of the total deposits in the market. In
addition, the rank of the banking group advanced from
third to second. Upon acquisition of Twin Lakes Bank
in 1977, Applicant’s principal eliminated another bank­
ing alternative in the market and controlled four of the
eight banks competing in the market and 26.1 percent
of the total deposits in commercial banks in the
market.
In the Board’s view, the proposals to acquire West
Kenosha Bank and Twin Lakes Bank involve the use
of the holding company form to further an anticompet­
itive arrangement. On the basis of all of the facts of
record, including the size of all of the organizations
involved (together the four Kenosha banks hold 25.3
percent of the total deposits in the market), the Board
concludes that the proposals to acquire West Kenosha
Bank and Twin Lakes Bank should be denied since
approval of these proposals would serve to perpetuate
a substantially adverse competitive situation. While
denial of these proposals might not immediately alter
the anticompetitive relationships existing among these
four banks, a denial would strengthen the prospect of
disaffiliation and the possibility that West Kenosha
Bank and Twin Lakes Bank would become indepen­
dent and competing organizations in the future. On the

5. In 1972, the four largest banking organizations in the market
controlled 93.2 percent of the total deposits in commercial banks in
the market. In 1977, the four-firm concentration ratio had increased to
94.3 percent of the total deposits in commercial banks in the market.



other hand, approval would solidify and strengthen the
common ownership of the four banks and would
eliminate or significantly diminish the likelihood of
their disaffiliation.
In light of the structure of the Kenosha banking
market and the market shares of the organizations
involved, the Board is of the opinion that approval of
the Applicant’s proposals to acquire Kenosha Bank
and Silver Lake Bank while Applicant’s principal
retains control of West Kenosha Bank and Twin Lakes
Bank would also serve to perpetuate a significantly
adverse competitive situation. The Board therefore
concludes that the applications to acquire Kenosha
Bank and Silver Lake Bank should be approved on the
condition that Applicant divest of West Kenosha Bank
and Twin Lakes Bank prior to consummation of the
acquisition of Kenosha Bank and Silver Lake Bank.
The financial and managerial resources and future
prospects of Applicant, Darien Bank and the five
banks to be acquired are regarded as satisfactory and
their future prospects appear favorable. Accordingly,
banking factors are consistent with but lend no weight
toward approval of each proposal.
No significant changes in Banks’ operations or in
the services offered to their customers are anticipated
to follow from consummation of the proposed acquisi­
tions. Consequently, convenience and needs factors
lend no weight toward approval of these applications.
On the basis of the foregoing and all the facts of
record, and in light of the factors set forth in section
3(c) of the Act, it is the Board’s judgment that approv­
al of the applications to acquire West Kenosha Bank
and Twin Lakes Bank would not be in the public
interest and these applications should be and hereby
are denied. The applications to acquire Kenosha Bank
and Silver Lake Bank are approved subject to the
condition that Applicant’s principal divest of West
Kenosha Bank and Twin Lakes Bank prior to consum­
mation of the acquisition of Kenosha Bank and Silver
Lake Bank. The application to acquire Lake Geneva
Bank is approved.
The approved transactions shall not be made before
the thirtieth calendar day following the effective date of
this Order or later than three months after the effective
date of this Order unless such period is extended for
good cause by the Board or by the Federal Reserve
Bank of Chicago under delegated authority. The acqui­
sition of Kenosha Bank and Silver Lake Bank shall not
be consummated until Applicant provides the Federal
Reserve Bank of Chicago with evidence that Appli­
cant’s principal has effectively and completely divest­
ed of his interests in West Kenosha Bank and Twin
Lakes Bank.
By order of the Board of Governors, effective
March 6, 1981.

L eg a l D evelo p m en ts

Voting for this action: Vice Chairman Schultz and Gover­
nors Wallich, Partee, and Rice. As noted in the appended
statement, Governor Gramley voted to approve all five
applications. Absent and not voting: Chairman Volcker and
Governor Teeters.

(Signed) J ames McAfee ,
[seal]

A ssistan t Secretary o f the Board.

Concurring and D issenting Statem ent o f Governor
Gramley

I concur in the Board’s decision to approve the
application to acquire Lake Geneva Bank. However, I
would approve the West Kenosha and Twin Lakes
applications also, and I would unconditionally approve
the Kenosha and Silver Lake applications. The affili­
ation between Kenosha, West Kenosha, and Silver
Lake Banks has spanned nearly a decade. Denial in
any of these cases would not increase significantly the
probability that common control of the three banks
will be terminated. Regarding the Twin Lakes applica­
tion, the absolute and relative size of the bank in its
market ($9.0 million and 2.6 percent of total commer­
cial bank deposits) is sufficiently small that any anti­
competitive effects associated with its acquisition in
1977 were not serious. In addition, the economic
growth potential in the bank’s market is limited. Entry
into the market by third parties through acquisition of
a bank the size of Twin Lakes Bank therefore appears
unlikely, so that the prospects for disaffiliation seem
small. Moreover, in a market with limited growth
potential, a bank the size of Twin Lakes might not be
viable on its own. I would therefore approve all five
applications.
March 6, 1981

Bank Shares, Inc.,
Lake Havasu City, Arizona
Order Denying Formation o f a Bank Holding
Company

Bank Shares, Inc., Lake Havasu City, Arizona, has
applied for the Board’s approval under section 3(a)(1)
of the Bank Holding Company Act (12 U.S.C.
§ 1842(a)(1)) of formation of a bank holding company
by acquiring 32.57 percent of the voting shares of The
State Bank (“ Bank” ), Lake Havasu City, Arizona.
Notice of the application, affording an opportunity
for interested persons to submit comments and views,
has been given in accordance with section 3(b) of the



353

Act. The time for filing comments and views has
expired, and the Board has considered the application
and all comments received in light of the factors set
forth in section 3(c) of the Act (12 U.S.C. § 1842(c)).
The Board has indicated on previous occasions that
a holding company should serve as a source of finan­
cial and managerial strength to its subsidiary banks,
and that the Board would closely examine the condi­
tion of an applicant with this consideration in mind. In
this case, the Board concludes that the record presents
adverse considerations that warrant denial of the pro­
posal to form a bank holding company.
Accordingly, the application is denied for the rea­
sons set forth in the Board’s Statement, which will be
released at a later date.
On the basis of all the facts of record, the application
is denied.
By order of the Board of Governors, effective
March 2, 1981.
Voting for this action: Vice Chairman Schultz and Gover­
nors Wallich, Partee, Rice, and Gramley. Absent and not
voting: Chairman Volcker and Governor Teeters.

(Signed) J ames McAfee ,
[seal]

A ssistan t Secretary o f the Board.

Statem ent by Board o f Governors o f the Federal
R eserve System Regarding Application o f Bank
Shares , Inc. to Acquire the State Bank

Bank Shares, Inc., Lake Havasu City, Arizona, has
applied for the Board’s approval under section 3(a)(1)
of the Bank Holding Company Act (12 U.S.C.
§ 1842(a)(1) of formation of a bank holding company
by acquiring 32.57 percent of the voting shares of The
State Bank (“ Bank” ), Lake Havasu City, Arizona.
Notice of the application, affording an opportunity
for interested persons to submit comments and views,
has been given in accordance with section 3(b) of the
Act. The time for filing comments and views has
expired, and the Board has considered the application
and all comments received in light of the factors set
forth in section 3(c) of the Act (12 U.S.C. § 1842(c)).
Applicant, a nonoperating corporation with no sub­
sidiaries, was organized for the purpose of becoming a
bank holding company by acquiring Bank, which holds
deposits of $38.2 million.1 Upon acqusition of Bank,
Applicant would control the ninth largest bank in
Arizona and would hold approximately 0.36 percent of
the total deposits of commercial banks in the state.
1. All deposit data are as of June 30, 1980, unless otherwise
indicated.

354

Federal Reserve Bulletin □ April 1981

Bank is the second largest banking organization in the
relevant market and holds 17.9 percent2 of the total
deposits in commercial banks in the market.3 While
one of Applicant’s principals is associated with anoth­
er bank, that organization operates in a separate
banking market from Bank. It appears that consumma­
tion of the proposal would not eliminate competition
or increase the concentration of banking resources in
any relevant area. Accordingly, the Board concludes
that competitive considerations are consistent with
approval of the application.
The Board has indicated on previous occasions that
a holding company should serve as a source of finan­
cial and managerial strength to its subsidiary banks,
and that the Board would closely examine the condi­
tion of an applicant with this consideration in mind. In
this case, the Board concludes that the record presents
adverse considerations that warrant denial of the pro­
posal to form a bank holding company.
With regard to financial considerations, the Board
notes that Bank’s capital formation during recent
years has not kept pace with this asset growth. While
Applicant has suggested a proposal designed to im­
prove Bank’s capital position through sales of equity
capital, in light of the uncertainties inherent in such
undertakings and the limitations imposed by the nature
of Applicant’s proposal and Applicant’s proposed
ownership interest in Bank, the Board does not con­
sider the benefits to be provided by this proposal to be
meaningful. Accordingly, the Board is of the opinion
that the considerations relating to financial resources
and future prospects warrant denial of the application.
Managerial considerations are generally satisfactory,
but lend no weight toward approval.
In light of the fact that no significant changes in the
services offered by Bank are expected to follow from
consummation of the proposed transaction, conve­
nience and needs considerations are consistent with
but lend no weight towards approval of this applica­
tion.
On the basis of the circumstances concerning this
application, the Board concludes that the banking
considerations involved in this proposal present ad­
verse factors bearing upon the financial resources and
future prospects of Applicant and Bank. Such adverse
factors are not outweighed by any procompetitive
effects or by benefits that would result in better
serving the convenience and needs of the community.
Accordingly, it is the Board’s judgment that approval
of the application would not be in the public interest
and the application should be denied.

Board of Governors of the Federal Reserve System,
March 4, 1981.

2. Market share data as of June 30, 1979.
3. The relevant banking market is approximated by Mohave County, Arizona.

1. All banking data are as of June 30, 1980.
2. The Jacksonville banking market is approximated by Duval
County plus the City of Orange Park, Clay County.




(Signed)
[s e a l]

Jam es M c A fe e ,

A ssistan t Secretary o f the Board.

Marine National Bancorporation,
Jacksonville, Florida
Order Denying Formation o f a Bank Holding
Company

Marine National Bancorporation, Jacksonville, Flori­
da, has applied for the Board’s approval under section
3(a)(1) of the Bank Holding Company Act (12 U.S.C.
§ 1842(a)(1)) of formation of a bank holding company
by acquiring 92.6 percent of the voting shares of
Marine National Bank of Jacksonville, Jacksonville,
Florida (“ Bank” ).
Notice of the application, affording an opportunity
for interested persons to submit comments and views,
has been given in accordance with section 3(b) of the
Act. The time for filing comments and views has
expired, and the Board has considered the application
and all comments received in light of the factors set
forth in section 3(c) of the Act (12 U.S.C. § 1842(c)).
Applicant, a nonoperating corporation with no sub­
sidiaries, was organized for the purpose of becoming a
bank holding company by acquiring Bank, which holds
deposits of $18.1 million.1 Upon acquisition of Bank,
Applicant would control the 413th largest bank in
Florida and would hold approximately 0.05 percent of
the total commercial bank deposits in the state.
Bank is the 11th largest of 16 commercial banks in
the Jacksonville banking market, and holds approxi­
mately 0.9 percent of the total deposits in commercial
banks in the market.2 While three principals of Bank
and Applicant are principals in six other banks, these
banks do not compete in the relevant banking market.
It appears from the facts of record that consummation
of the proposal would not result in any adverse effects
upon competition or increase the concentration of
banking resources in any relevant area. Accordingly,
the Board concludes that competitive considerations
are consistent with approval of the application.
The Board has indicated on previous occasions that
a holding company should serve as a source of finan­
cial and managerial strength to its subsidiary bank(s),
and that the Board would closely examine the condi-

L egal D evelopm en ts

tion of an applicant in each case with this consider­
ation in mind. While the financial and managerial
resoures and future prospects of the six other banks
affiliated with Applicant and Bank are considered
generally satisfactory, in this case the Board con­
cludes that considerations relating to the financial
resources and future prospects of Applicant warrant
denial of the application.
With respect to Applicant’s and Bank’s financial
considerations and future prospects, the Board notes
that in connection with this proposal Applicant would
incur a sizeable debt. Applicant proposes to service
the debt over a 25-year period through dividends to be
declared by Bank and tax benefits to be derived from
filing consolidated tax returns. Applicant projects
reaching a debt-to-equity ratio of less than 30 percent
by the end of the 12th year while maintaining an
adequate capital level in Bank. However, in light of
the recent performance of Bank and the historical
performance of its peer banks in the Jacksonville
market, Applicant’s earnings and growth projections
for Bank appear to be unrealistic. In particular, Appli­
cant’s projections of Bank’s earnings are overly opti­
mistic, while its growth projections, in light of all the
facts of record including future growth prospects of
the downtown Jacksonville area, are low. Thus, based
upon the record in this case, it is the Baord’s view that
Bank is unlikely to generate sufficient earnings to
enable Applicant to service its debt while maintaining
adequate capital in Bank, as well as affording Appli­
cant the flexibility to meet any unforeseen problems
that might arise at Bank. Accordingly, the Board
concludes that considerations relating to the financial
resources and future prospects of Applicant and Bank
lend weight toward denial of this application. While
managerial considerations are generally satisfactory, it
is the Board’s judgment that Applicant’s principals
have not established a sufficient record of performance
to mitigate the adverse considerations relating to the
resources and future prospects connected with this
application.
No significant changes in the operations or services
offered by Bank are expected to follow from consum­
mation of the proposed transaction. Accordingly, con­
venience and needs factors are consistent with, but
lend no weight toward, approval of this application.
On the basis of all the facts of record, the Board
concludes that the banking considerations involved in
this proposal present adverse factors bearing upon the
financial resources and future prospects of Application
and Bank. Such adverse factors are not out weighted
by any procompetitive effects or by benefits that
would result in better serving the convenience and
needs of the community. Accordingly, it is the Board’s
judgment that approval of the application would not be



355

in the public interest and that the application should be
denied.
On the basis of the facts of record, the application is
denied for the reasons summarized above.
By order of the Board of Governors, effective
March 2, 1981.
Voting for this action: Vice Chairman Schultz and Gover­
nors Wallich, Partee, Rice, and Gramley. Absent and not
voting: Chairman Volcker and Governor Teeters.

(Signed) J ames McAfee ,
[seal]

A ssistan t Secretary o f the Board

Mercantile Bancorporation Inc.,
St. Louis, Missouri
Order Approving Acquisition o f Bank

Mercantile Bancorporation Inc., St. Louis, Missouri,
a bank holding company within the meaning of the
Bank Holding Company Act, has applied for the
Board’s approval under section 3(a)(3) of the Act (12
U.S.C. § 1842(a)(3)) to acquire all of the voting shares
(less directors’ qualifying shares) of Mercantile Bank
of South County, N.A., St. Louis County, Missouri
(“ Bank” ), a proposed de novo bank.
Notice of the application, affording opportunity for
interested persons to submit comments and views, has
been given in accordance with section 3(b) of the Act.
The time for filing comments and views has expired,
and the Board has considered the application and all
comments received, including those submitted on be­
half of Mehlville Bank, St. Louis County, Missouri
(“ Protestant” ), the Comptroller of the Currency and
the Office of the Commissioner of Finance of the State
of Missouri, in light of the factors set forth in section
3(c) of the Act (12 U.S.C. § 1848(c)).
Applicant is the largest banking organization in
Missouri and controls 29 banks with aggregate depos­
its of approximately $2.9 billion, representing 11.1
percent of the total deposits in commercial banks in
the state.1 Since Bank is a proposed de novo bank, its
acquisition by Applicant would not immediately in­
crease Applicant’s share of deposits in commercial
banks in Missouri.
Bank is to be located in the St. Louis banking
market,2 in which Applicant is the second largest
banking organization, with six subsidiary banks con­
1. Unless otherwise indicated, all deposit data are as of Decem­
ber 31, 1979.
2. The St. Louis banking market is approximated by the St. Louis
Ranally Metro Area, which includes all of St. Louis City and St. Louis

356

Federal Reserve Bulletin □ April 1981

trolling 16.1 percent of total market deposits. Appli­
cant’s closest banking subsidiary, High Ridge Mercan­
tile Bank, High Ridge, Missouri, is located
approximately 11 miles from Bank’s proposed site and
derives less than one percent of its deposits from
Bank’s proposed primary service area (“ PSA” ). Ap­
plicant’s market share would not change initially as a
result of approval of this application. Since Bank
would be a de novo bank, there will be no elimination
of existing competition. Moreover, given the de novo
nature of Bank, the size of the market, the number of
banking organizations operating therein, and the pros­
pects for continuing growth in the area, it does not
appear that consummation of the proposal would have
any adverse effects on potential competition. On the
basis of the above and other facts of record, competi­
tive considerations appear consistent with approval of
the application.
The financial and managerial resources of Appli­
cant, its subsidiaries and Bank are regarded as satis­
factory. Bank, as a proposed de novo bank, has no
financial or operating history; however, its prospects
as a subsidiary of Applicant appear favorable. Accord­
ingly, considerations relating to banking factors are
consistent with approval of this application. As a new
institution in the St. Louis banking market, Bank
would serve as an additional source of a full range of
banking services in the market. Accordingly, consider­
ations relating to the convenience and needs of the
community to be served appear consistent with ap­
proval of the application.
In its review of the application, the Board has given
careful consideration to the comments submitted on
behalf of Protestant, a bank located 2.5 miles (3.5 road
miles) from the proposed site of Bank.3 Protestant
contends that consummation of the proposed acquisi­
tion would have anticompetitive effects. Protestant
asserts that Bank’s proposed primary service area
would be unable to support an additional bank and that
Applicant’s acquisition of Bank would threaten Pro­
testant’s solvency. Protestant also claims that bank

was organized in violation of federal laws requiring
that organizers of a national bank be natural persons
and subscribe to their shares in good faith. Finally,
Protestant argues that Applicant would operate Bank
in violation of Missouri antibranch banking statutes.4
Although Protestant contends that consummation of
the proposal will result in adverse competitive effects,
Protestant has not submitted any information in sup­
port of its contention, other than recitation of Appli­
cant’s rank in the state. However, the facts of record
do not support Protestant’s conclusion. Applicant is
not clearly dominant within the market, controlling
only 16.1 percent of market deposits, and the market is
not highly concentrated, with a four-firm deposit con­
centration of only 44.3 percent. The St. Louis banking
market contains 88 other banking organizations in
addition to Applicant. Applicant’s establishment of a
de novo bank would provide an additional source of
competition within the market. Applicant’s relatively
small market share, the relatively low market concen­
tration, the number of competing banking organiza­
tions in the market, the fact that Bank is a de novo
bank, and other facts of record support the conclusion
that competitive considerations are consistent with
approval of the application.
Protestant’s claim that Bank’s proposed PSA would
be unable to support an additional bank and that
Applicant’s acquisition of Bank would endanger Pro­
testant’s solvency likewise is not supported by the
facts of record. Bank’s proposed PSA is growing
considerably more rapidly than the surrounding St.
Louis County or St. Louis SMSA. Population has
advanced more rapidly in the PSA (4.9 percent) than in
the SMSA (2.2 percent) from 1976 to 1980. Population
per banking office is significantly higher in the PSA
(11,391) than for St. Louis County (8,978) or St. Louis
City (7,871). The seven banks located within a fourmile radius of Protestant have experienced significant­
ly higher average annual deposit growth between 1976
and 1979 (13.0 percent) than deposit growth for the
Missouri portion of the St. Louis SMSA (7.2 percent).

County; portions of Franklin, Jefferson, Lincoln, and St. Charles
Counties in Missouri, and portions of Jersey, Macoupin, Madison,
Monroe, and St. Clair counties in Illinois.
3. Protestant opposed two unsuccessful attempts by Applicant to
obtain a state charter for a bank to be located in the same general
location as Bank, as well as Applicant’s successful application for a
national bank charter for Bank. Applicant’s first application for a state
charter was denied on August 31, 1977, after a hearing before the
Commissioner of Finance of the State of Missouri. Applicant’s second
state charter application was approved on April 20, 1979, and subse­
quently was reversed on appeal on July 18, 1979, after a hearing before
the Missouri State Banking Board. Applicant appealed the Missouri
State Banking Board’s decision to the Circuit Court for the County of
St. Louis in August, 1979, but subsequently requested dismissal of the
appeal. On June 27, 1980, the Comptroller of the Currency granted
Applicant’s application for a national charter for Bank, conditioned
upon Board approval of Applicant’s application to acquire Bank.

4. Protestant also requested a hearing regarding this application.
Under section 3(b) of the Act, the Board is required to hold a hearing
when the primary supervisor of the bank to be acquired recommends
disapproval of the application (12 U.S.C. § 1842(b)). In this case the
Comptroller of the Currency issued preliminary charter approval to
Bank on June 27, 1980, and indicated by letter dated November 17,
1980, that he had no objection to approval of this application. Thus,
there is no statutory requirement that the Board hold a hearing.
Moreover, the Board has examined the record of the two hearings
held in connection with the applications for a state charter for Bank,
the written submissions by Protestant, and Applicant’s responses and
is unable to conclude that a hearing would significantly supplement
the record before the Board or resolve issues not already discussed at
length in the written submissions contained in the record before the
Board. In view of these facts, the Board concludes that the record in
this case is sufficiently complete to render a decision and hereby
denies Protestant’s request for a hearing.




L eg a l D evelo p m en ts

Therefore, it appears from these and other facts of
record that this area of the market would be capable of
supporting an additional bank. Although Protestant,
which opened for business on September 13, 1976, did
not meet its deposit growth projections contained in its
charter application, its deposits have grown from
$69,600 (December 31, 1976) to $4,077,000 (December
31, 1977) to $7,775,894 (December 31, 1980). Although
Protestant experienced slow growth initially, perhaps
due in part to the fact that it operated out of a trailer
during its first 10 months of operation until its perma­
nent building was constructed, its total deposits grew
at an average annual compound rate of approximately
24 percent between December 31, 1977, and December
31, 1980. In January 1979, Protestant became profit­
able, and as of December 31, 1980, after slightly over
four years of operation, Protestant had grown to $9.4
million in total assets, earning approximately $80,000
in 1980. Based upon the demonstrated financial
strength of Protestant, and in light of the rapid growth
within the PSA discussed above, the Board concludes
that consummation of this proposal does not represent
a serious threat to Protestant’s solvency.
Protestant alleges that Bank’s organization violated
federal statutes requiring organizers of a national bank
to be natural persons and to subscribe to their shares
in good faith. Federal law requires that in order to
organize a national bank, natural persons must enter
into articles of association to be signed by such
persons (12 U.S.C. §21). The natural persons must
execute an organization certificate (12 U.S.C. § 22).
These steps have been taken and approved by the
Comptroller of the Currency, by letter dated July 25,
1980. Further, the organizers have certified as to the
amount of bank stock to which they will subscribe and
there has been no showing by Protestant that they
have not done so in good faith. Therefore, the record
before the Board does not support Protestant’s claim
that Bank was organized in violation of federal law.
Finally, Protestant contends that Bank’s proposed
affiliation with Applicant would violate Missouri law
prohibiting branch banking. It is clear from a long line
of court cases that a state’s restrictive branch banking
laws do not automatically bar bank holding company
operation. The ownership of banks by bank holding
companies has been found to be in compliance with
Missouri law by the Attorney General of Missouri,
Attorney General of Missouri Opinion No. 375, (July 27,
1971), and the Missouri Statutes specifically recognize
the bank holding company form of bank ownership.
See, § 362.910-940 R.S. Mo. 1978.
In a given case, the Board must examine the facts to
determine whether a particular acquisition would con­
stitute illegal branch banking under state law. See
Gravois v. Board o f Governors, 478 F.2d 546 (8th Cir.



357

1973). If the Board determines that a violation of state
law would occur as a result of the consummating of the
proposal, it is required to disapprove the transaction.
Whitney National Bank in Jefferson Parish v. Bank of
New Orleans & Trust Co ., 323 F.2d 290 (D.C. Cir.
1963), reversed on other grounds, (379 U.S. 411
(1965)).
The facts of record indicate that Bank will be a
separate corporation, with its own capital, surplus
and, as earned, undivided profits; that Bank will have
loan limits based upon its own capital structure in the
same manner as if it were unaffiliated with a bank
holding company; that Bank will be managed by its
own officers to be recruited locally; that after its initial
organization phase, Bank’s board of directors will be
separate and distinct from the boards of Applicant’s
other banking subsidiaries, and will include members
of Bank’s community; that Bank will maintain its own
separate books of account, issue its own distinctive
checks, and use its own stationery. Moreover, except
as permitted by law, money deposited at Bank will not
be credited to the account of a depositor at any other
banking subsidiary, nor will money deposited at the
other subsidiaries be credited to accounts at Bank;
that Bank’s officers and employees will not directly
perform any services for customers of Applicant’s
other subsidiary banks other than those services that
would be provided for customers of other area banks,
and conversely, officers and employees of Applicant’s
other subsidiary banks will not directly perform any
services for customers of Bank that would not be
provided for customers of other area banks. Applicant
further represents that it will purchase Bank’s shares
from its own capital resources.
Protestant contends that the proposed automatic
teller machine (“ ATM” ) services at Bank would vio­
late Missouri’s branch banking laws. However, Pro­
testant has made no showing as to how Bank’s pro­
posed ATM operations, which would function in a
manner essentially equivalent to the performance of
many banking functions through methods other than
ATM, would violate Missouri law. The Attorney Gen­
eral of Missouri has considered the general question of
whether an ATM network among affiliated banks
would violate Missouri’s branch banking statutes and
has concluded that it would not (Attorney General of
Missouri Opinion No. 131 (November 8, 1979)). In
addition, the Missouri Commissioner of Finance has
advised the Board that it has no objections to the
proposed acquisition under the Missouri Bank Holding
Company Act (section 362.910 et seq, RS Mo. Supp
1980).
The Board concludes, based upon the above and
other facts of record, that Applicant is a “ traditionally
recognized bank holding company which, with its own

358

Federal Reserve Bulletin □ April 1981

capital, invests in or buys the stock of banks,” 5 and
that, upon consummation of the proposed acquisition,
Bank would not be an illegal branch of any of Appli­
cant’s other banking subsidiaries. See also, North
Hills Bank v. Board o f Governors (506 F.2d 623 (8th
Cir. 1974)) where the court ruled that Mercantile’s
acquisition of a newly chartered national bank, in a
manner substantially similar to the proposal now be­
fore the Board, did not violate Missouri’s antibranch
banking statutes. Furthermore, it appears that any
indicia of unitary operations that may be present in
Applicant’s future operations are those that are inher­
ent in the structure of bank holding companies general­
ly and permissible under Missouri law. Grandview
Bank and Trust Company v. Board o f Governors (550
F.2d 415 (8th Cir. 1977)).
In view of the foregoing discussion and having
considered the facts of record and all the comments of
Protestant in light of the statutory factors the Board
must consider under section 3(c) of the Act, it is the
Board’s judgment that consummation of the subject
proposal would be in the public interest and that the
application to acquire Bank should be approved.
On the basis of the record, the application is ap­
proved for the reasons summarized above. The trans­
action shall not be made before the thirtieth calendar
day following the effective date of this Order or later
than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board, or by the Federal Reserve Bank of St.
Louis pursuant to delegated authority.
By order of the Board of Governors, effective
March 11, 1981.

Order Approving Acquisition o f Bank

percent of the voting shares (less directors’ qualifying
shares) of the successor by merger to The Sullivan
County National Bank of Liberty, Liberty, New York
(“ Bank” ). The bank into which Bank is to be merged
has no significance except as a means to facilitate the
acquisition of voting shares of Bank. Accordingly, the
proposed acquisition of shares of the successor organi­
zation is treated herein as the proposed acquisition of
the shares of Bank.
Notice of the application, affording opportunity for
interested persons to submit comments and views, has
been given in accordance with section 3(b) of the Act.
The time for filing comments and views has expired,
and the Board has considered all comments received,
including those of the United States Department of
Justice, in light of the factors set forth in section 3(c) of
the Act.
Applicant, the sixteenth largest commercial banking
organization in the State of New York, controls four
banks with aggregate deposits of approximately $1.7
billion, representing 1.0 percent of the total deposits
held by commercial banks in the state.1 Acquisition of
Bank (deposits of approximately $85.6 million) would
increase Applicant’s share of statewide deposits by 0.1
percent and would not alter Applicant’s ranking
among the other commercial banking organizations in
New York. Accordingly, consummation of this pro­
posal would not result in a significant increase in the
concentration of commercial banking resources in the
state.
Bank, the second largest banking organization in the
Middletown market (the relevant market),2 controls
approximately 12.4 percent of commercial bank de­
posits in the market. Applicant, through four offices of
its subsidiary, Highland National Bank of Newburgh,
Newburgh, New York, is the ninth largest banking
organization in the market, controlling 4.3 percent of
market deposits. Consummation of the proposed
transaction would increase Applicant’s share of mar­
ket deposits to 16.7 percent and would cause Appli­
cant to become the second largest banking organiza­
tion in the market. The Department of Justice
concludes on the basis of these and other facts of
record that consummation of the proposal would have
an adverse effect on competition in the Middletown
market. The Board would normally consider the elimi­
nation of existing competition through such a combi­
nation of market shares to have a substantially adverse
effect on competition. However, the Board is of the

United Bank Corporation of New York, Albany, New
York, a bank holding company within the meaning of
the Bank Holding Company Act (the “ Act” ), has
applied for the Board’s approval under section 3(a)(3)
of the Act (12 U.S.C. § 1842(a)(3)) to acquire 100

1. Statewide deposit data are as of June 30, 1980. Market deposit
data are as of June 30, 1979.
2. The Middletown banking market includes Sullivan and Orange
Counties, New York, except for the Orange County municipalities of
Newburgh, Newburgh City, Montgomery, New Windsor, Cornwall,
and Highland.

Voting for this action: Chairman Volcker and Governors
Schultz, Wallich, Partee, Teeters, and Gramley. Absent and
not voting: Governor Rice.

(Signed) J ames McAfee ,
[seal]

A ssistan t Secretary o f the Board.

5. Whitney National Bank in Jefferson Parish v. Bank of New
Orleans & Trust Co., supra, at 303.

United Bank Corporation of New York,
Albany, New York




L eg a l D evelo p m en ts

view that the adverse competitive effects of this acqui­
sition are mitigated by several factors not considered
by the Justice Department.
Although Bank is the second largest commercial
banking organization in the market, its market share
and absolute deposit size have declined in recent
years. Moreover, the Middletown market remains one
of the least concentrated markets in the state, due in
some measure to the entry into the market of six of the
14 largest banks in the nation. As the Board has noted
previously, the competitive influence of such firms
cannot be measured by their market shares alone,
especially with respect to their ability to serve com­
mercial customers.3
In evaluating the proposed acquisition’s effects on
competition, the Board has also considered the pres­
ence of mutual savings banks and savings and loan
associations in the market. While the Board continues
to view commercial banking as the relevant line of
commerce in determining the competitive effects of a
proposal,4 the Board has stated that it may be appro­
priate in particular cases to take into consideration
direct competition from thrifts in specific areas in
evaluating various competitive influences.5 In view of
the absolute size and significant deposit-taking role of
thrifts in the Middletown market, as well as their
increasing powers, the Board believes that the influ­
ence of thrift institutions further diminishes the ad­
verse competitive effects of the proposed acquisition.
Accordingly, the Board concludes that the competitive
effects of the proposal are not so serious as to warrant
denial of the proposal.
The financial and managerial resources of Applicant
are considered satisfactory and its future prospects
favorable. The financial and managerial resources of
Bank are considered generally satisfactory and its
future prospects as an affiliate of Applicant are consid­
ered favorable. Affiliation of Bank with Applicant will
strengthen Bank and enable it to market its services
more effectively by providing Bank with access to
Applicant’s expertise in specialized lending areas.
Applicant has committed to provide Bank’s market
area with at least $2.0 million in new lease financing

3. The Bank of New York, 66 Federal Reserve Bulletin 807
(1980).
4. In view of the uncertainty with respect to the extent to which
thrift institutions in New York will exercise the new powers conferred
on them by the Depository Institutions Deregulation and Monetary
Control Act (P.L. 96-221) and by recent state legislation, the Board
believes that it is premature to consider thrift institutions as full
competitors of commercial banks until the effects of the newlyconferred powers can be meaningfully ascertained.
5. United Bank Corporation of New York, 66 Federal Reserve
Bulletin 61 (1980); Fidelity Union Bancorporation, 66 Federal
Reserve Bulletin 576 (1980); The Bank of New York, 66 Federal
Reserve Bulletin 807 (1980).



359

upon the affiliation. In addition, Applicant proposes to
expand Bank’s business to include increased trust
activities, accounts receivable processing, automatic
payroll processing, custodial and trusteed Keogh plans
and credit card issuance. Applicant also intends to
replace Bank’s headquarters building with an updated
facility.
In light of the above, considerations relating to the
convenience and needs of the community to be served
lend such weight toward approval of the application as
to outweigh any adverse competitive effects associat­
ed with this proposal. Based on the foregoing and
other considerations reflected in the record on this
application, it is the Board’s judgment that the subject
proposal is in the public interest and that the applica­
tion should be approved.
On the basis of the record, the application is ap­
proved for the reasons summarized above. The pro­
posed transaction shall not be made before the thirti­
eth calendar day following the effective date of this
Order, or later than three months after the effective
date of this Order unless such period is extended for
good cause by the Board or by the Federal Reserve
Bank of New York pursuant to delegated authority.
By order of the Board of Governors, effective
March 17, 1981.
Voting for this action: Chairman Volcker and Governors
Schultz, Wallich, Partee, Teeters, and Gramley. Absent and
not voting: Governor Rice.

(Signed) J ames McAfee ,
[seal]

A ssistant Secretary o f the Board.

Order Under Sections 3 and 4 o f Bank Holding
Company A ct

Mid-Nebraska Bancshares, Inc.,
Ord, Nebraska
Order Approving Formation o f a Bank Holding
Company and Acquisition o f a Nonbanking
Company

Mid-Nebraska Bancshares, Inc., Ord, Nebraska
(“ Applicant” ), has applied for the Board’s approval
under section 3(a)(1) of the Bank Holding Company
Act, 12 U.S.C. § 1842(a)(1), to become a bank holding
company by acquiring 100 percent of the voting shares
of Nebraska State Bank, Ord, Nebraska (“ Bank” ). As
part of the same proposal, Applicant has also applied
for the Board’s approval under section 4(c)(8) of the
Act, 12 U.S.C. § 1843(c)(8), and section 225.4(b)(2) of
the Board’s Regulation Y, 12 C.F.R. § 225.4(b)(2), to

360

Federal Reserve Bulletin □ April 1981

acquire 90 percent of the voting shares of Ord Agency,
Inc., Ord, Nebraska (“ Agency” ), which engages in
general insurance agency activities in a community
with a population of less than 5,000. This activity has
been determined by the Board to be closely related to
banking. 12 C.F.R. § 225.4(a)(9)(iii).
Notice of the applications, affording opportunity for
interested persons to submit comments and views, has
been given in accordance with sections 3 and 4 of the
Act. The time for filing comments and views has
expired, and the Board has considered the applications
and all comments received in light of the factors set
forth in section 3(c) of the Act, 12 U.S.C. § 1842(c),
and the considerations specified in section 4(c)(8) of
the Act.
Applicant is a non-operating corporation with no
subsidiaries, organized for the purposes of becoming a
bank holding company through the acquisition of
Bank, which has deposits of $19.6 million.1 Upon
acquisition of Bank, Applicant would control the 107th
largest of 454 Nebraska banks with 0.22 percent of
deposits in that state. Bank is the second largest of five
commercial banks in the Valley County banking mar­
ket2 controlling 30.7 percent of the market’s deposits.
This is the third time Applicant’s principal has
sought Board approval to reorganize Bank into a bank
holding company. In 1976, the Board denied the
application of Nebraska Banco, Inc., to acquire Bank,
primarily because the condition of other banks in a
chain owned by Applicant’s principal reflected ad­
versely on management, and the proposal involved
excessive acquisition debt. Also, at that time the
Board noted the adverse competitive relationship be­
tween Bank and North Loup Valley Bank, North
Loup, Nebraska, (“ North Loup Bank” ), another bank
owned by Applicant’s principal in the Valley County
market. Nebraska Banco, Inc., 62 F ederal Reserve
Bulletin 638 (1976). After modifying his interest in
his other chain banks, Applicant’s principal filed an­
other application to place Bank into a bank holding
company. In 1978, the Board denied that application
solely on anticompetitive grounds. The Board found
that the acquisition of Bank by Applicant’s principal in
1972 was anticompetitive because he had already
owned North Loup Bank, and that approval of the
application to form a holding company for Bank would
amount to Board sanction of the 1972 acquisition and
remove any chance of disaffiliation of the two banks.
M id-Nebraska Bancshares , Inc., 64 F ederal Re­
serve Bulletin 589 (1978). The Board’s Order was

affirmed in M id-N ebraska Bancshares v. Board o f
Governors, 627 F.2d 266 (D.C. Cir. 1980).
The present application proposes to alleviate the
anticompetitive effects of the 1972 acquisition by Ap­
plicant’s principal by separating control of Applicant
and Bank from North Loup Bank.3 Immediately fol­
lowing acquisition of Bank by Applicant, the principal
would dispose of all his interest in Applicant, in part,
by sale of controlling interest to his adult son, who has
been president of Bank since 1977 and also is a
director and minority shareholder of North Loup
Bank. Further, principal’s son would dispose of his
stock interest in North Loup Bank. Also, all interlocks
between the two banks would be severed and both the
principal and his son have submitted affidavits stating
that neither will seek to control or influence the other’s
banking interests. In addition, Applicant’s principal
has agreed, should the Board specifically require, to
order his affairs so that on his or his wife’s death
(whomever is the survivor) none of his interest in
North Loup Bank will pass by will or intestate succes­
sion to his son unless he obtains prior Board approval.
The separation of slock ownership, the severed
interlocks, the sworn statements by Applicant’s prin­
cipal and his son not to control the other’s bank, and
evidence that each of them is capable of competent
bank management, tend to support the conclusion that
Bank and North Loup Bank will be operated as
separate entities. These commitments alone, however,
would not be sufficient to eliminate the anticompeti­
tive effects of the joint ownership; the son of Appli­
cant’s principal is his only child and, absent provision
to the contrary, that son would most likely succeed to
ownership of North Loup Bank upon the death of his
surviving parent. To preserve the possibility of com­
plete and permanent disaffiliation, the Board condi­
tions approval of this application on the commitment
of Applicant’s principal to order his affairs so that
upon his death, all of his interest in North Loup Bank
would be placed in trust with an independent corpo­
rate trustee instructed to dispose of the interest in that
bank within two years of his or his wife’s death (if she
survives him). In no event may the trustee transfer the
shares to the son of Applicant’s principal (or his issue)
without prior Board approval. This condition pre­
serves the possibility that Bank and North Loup Bank
ultimately will be permanently disaffiliated.
In addition to Bank and North Loup Bank, the son
of Applicant’s principal is a principal of two other
bank holding companies. However, all of these other

1. Banking data are as of December 31, 1979, except as otherwise
noted.
2. The Valley County banking market includes all of Valley County
and the town of Scotia in Greely County, Nebraska.

3. North Loup Bank presently controls 12.9 percent of the commer­
cial bank deposits in the Valley County market. If considered together
Bank and North Loup Bank would control 43.6 percent of such
deposits.




L eg a l D evelopm en ts

organizations operate in separate markets. It appears,
therefore, that consummation of the proposal with the
condition the Board has outlined, will not eliminate
competition or increase the concentration of banking
resources in any relevant area. Accordingly, the Board
concludes that competitive considerations are consis­
tent with approval of this application.
In addition to analyzing the competitive effects of a
chain of banking organizations operated by principals
of an applicant, the Board also considers the entire
chain of organizations in the context of its multibank
holding company standards in analyzing the financial
and managerial and future resources associated with
the one-bank holding company proposal. Based on
such an anlaysis in this case, the financial and manage­
rial resources and future prospects of Applicant,
Bank, and the other organizations in the chain appear
to be generally satisfactory. Therefore, considerations
relating to banking factors are consistent with, but
lend no weight toward approval of the application.
Although consummation of this proposal would have
no immediate effect on the banking services offered by
Bank, the ultimate disaffiliation of Bank and North
Loup Bank is expected to result in providing an
independent source of banking services to the commu­
nity. Therefore, it is the Board’s judgment that consid­
erations relating to the convenience and needs of the
community to be served lend some weight toward
approval of this application and that the application to
form a bank holding company should be approved.
As part of the subject proposal, Applicant also has
applied for the Board’s approval to acquire 90 percent
of Agency, a corporation presently controlled by the
Applicant’s principal and his son and that engages in
general insurance agency activities in a community
with a population of less than 5,000. Agency’s acquisi­
tion by Applicant merely will constitute a reorganiza­
tion of ownership interests, which will enable Agency
to continue to serve the residents of Ord. It thus
appears that the proposal is in the public interest.
Furthermore, there is no evidence that Applicant’s
acquisition of Agency would result in undue concen­
tration of resources, decreased or unfair competition,
conflicts of interests, unsound practices, or other
adverse effects on the public interest.
Based upon the foregoing and other considerations
reflected in the record, the Board has determined, in
accordance with the provisions of § 4(c)(8) of the Act,
that consummation of this proposal can reasonably be
expected to produce benefits to the public that out­
weigh possible adverse effects and that the application
to engage in insurance activities should be approved.
On the basis of the record, the applications are
approved for the reasons summarized above, condi­
tioned upon the commitment of Applicant’s principal



361

to make the testamentary plans outlined above. The
acquisition of Bank shall not be made before the
thirtieth calendar day following the effective date of
this Order or no later than three months after the
effective date of this Order, unless such period is
extended for good cause by the Board, or by the
Federal Reserve Bank of Kansas City pursuant to
delegated authority. The approval of Applicant’s in­
surance activities is subject to the conditions set forth
in section 225.4(c) of Regulation Y and to the Board’s
authority to require reports by, and make examina­
tions of, holding companies and their subsidiaries and
to require such modification or termination of the
activities of a bank holding company or any of its
subsidiaries as the Board finds necessary to assure
compliance with the provisions and purposes of the
Act and the Board’s regulations and orders issued
thereunder, or to prevent evasion thereof. Insurance
activities are to commence no later than three months
after the effective date of this Order unless such period
is extended for good cause by the Board or by the
Federal Reserve Bank of Kansas City pursuant to
delegated authority.
By order of the Board of Governors, effective
March 24, 1981.
Voting for this action: Chairman Volcker and Governors
Partee, Teeters, and Gramley. Voting against this action:
Governor Rice. Governor Schultz voted against the section
3(a)(1) application and abstained from all consideration of the
section 4(c)(8) application. Absent and not voting: Governor
Wallich.

(Signed) J ames McAfee ,
[seal]

A ssistan t Secretary o f the B oard .

Dissenting Statem ent o f Governors Schultz and Rice

The Board determined on two prior occasions that the
anticompetitive effects arising from common control
of Bank and North Loup Bank warranted denial of
proposals by Applicant’s principal to reorganize Bank
into a bank holding company. We believe that the
instant proposal should be denied for the same reason.
Applicant’s principal and his only child have re­
structured their share ownership and management
positions with Bank and North Loup Bank. However,
the facts of this case persuade us that the mere
reorganization proposed here does not overcome the
long history of cooperative management of these two
banks exercised by Applicant’s principal and his son.
In fact, Applicant’s principal and his son have man­
aged Bank together since January 1977, and principal’s
son has been a director and 20 percent owner of North
Loup Bank, which is controlled by Applicant’s princi­
pal. Furthermore, the son’s purchase of Bank’s stock

362

Federal Reserve Bulletin □ April 1981

is being financed by a loan from his father on very
favorable terms. Given these factors, we cannot find
that approval of this proposal would cause these two
banks to become competitors. Furthermore, we be­
lieve that the testamentary plan upon which the
Board’s approval is conditioned requires toleration,
for an indeterminate time, of a situation that the Board
in the past has characterized as substantially anticom­
petitive.
For these reasons, we dissent from the Board’s
Order.
March 25, 1981

O rder Issu ed U nder S ection 4 o f Bank H olding
C om pany A c t

JCT Trust Company Limited,
Tel Aviv, Israel
Otzar Hityashvuth Hayehudim B.M.,
Tel Aviv, Israel
Bank Leumi Le-Israel B.M.,
Tel Aviv, Israel
Order Approving R equest fo r Exemption o f
Securities-Related A ctivities from Nonbanking
Restrictions o f the Bank Holding Company A ct

JCT Trust Company Limited (“ JCT” ), Otzar Hityash­
vuth Hayehudim B.M. (“ OHH” ), and Bank Leumi leIsrael B.M. (“ Bank Leumi” ) all of Tel Aviv, Israel
(collectively referred to as “ Applicants” ),1bank hold­
ing companies within the meaning of the Bank Holding
Company Act (the “ Act” ), have requested the
Board’s approval under section 4(c)(9) of the Act (12
U.S.C. § 1843(c)(9)), to engage temporarily through
their subsidiary, Leumi Securities Corporation
(“ Leumi Securities” ), New York, New York, in cer­
tain securities-related activities.
Bank Leumi, a bank organized under the laws of the
State of Israel, and the other Applicants became bank
holding companies as a result of the Bank Holding
Company Act Amendments of 1970. They commenced
acting as broker, dealer, and underwriter in securities
transactions in the United States through Leumi Secu­
rities in 1962. On December 8, 1980, the Board deter­

mined that Applicants are not entitled to permanent
grandfather privileges because they did not own or
control a subsidiary bank in the United States on June
30, 1968, as required by section 4(a)(2) of the Act (12
U.S.C. § 1843(1)(2)). On the same date, the Board
approved Applicants’ request pursuant to section
4(c)(9) to continue to engage, through Leumi Securi­
ties, in acting as a broker or dealer in securities issued
by the State of Israel after the expiration of their
temporary grandfather privileges on December 31,
1980.2 The Board refused, however, to permit Leumi
Securities to continue to engage in general broker/
dealer or underwriter activities with respect to securi­
ties of companies with a significant connection with
Israel.
Applicants have now applied, pursuant to section
4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)), for permis­
sion for Leumi Securities to engage in the following
activities: (1) executing unsolicited purchases and
sales of securities as agent solely upon the order and
for the account of customers; (2) providing custodial
services for such securities; (3) acting as managing
agent for customers with respect to such securities;
and (4) buying and selling gold and silver coin and
bullion for its own account and for the account of
others.3 Applicants anticipate that the proposed securities-related activities would involve primarily securi­
ties of companies located in Israel, or of subsidiaries of
such companies, but Leumi Securities would also
perform some services with respect to other securities.
Those applications under section 4(c)(8) are pending.
At the same time that Applicants submitted their
applications pursuant to section 4(c)(8), they also
requested temporary authority, until the Board acts on
that application, for Leumi Securities to engage in the
proposed activities pursuant to section 4(c)(9). Appli­
cants assert that unless temporary authority to contin­
ue these activities is granted pending action on the
section 4(c)(8) applications, Leumi Securities will in
the interim lose its base of established customers and
will be unable, in practical effect, to resume these
activities even if those applications are approved.
Section 4(c)(9) of the Act provides that the nonbank­
ing prohibitions of section 4 shall not apply to the
investments or activities of foreign bank holding com­
panies that conduct the greater part of their business
outside the United States, if the Board by regulation or
order determines that, under the circumstances and

2. Bank Leumi le-Israel B.M., 67 F ederal R eserve B ulletin 62
(1981).
3. Applicants have also applied to engage in furnishing, without
1. The only assets of OHH consist of 94 percent of the voting charge, general information and advice about the Israeli economy,
information about particular Israeli companies, and assistance in the
shares of Bank Leumi, a bank organized under the laws of Israel. JCT
formation of investment clubs to invest in Israeli companies. The
is the trustee for a trust controlling 38.9 percent of the voting shares of
Board regards these as merely promotional activities incidental to
OHH. This trust is also a bank holding company within the meaning of
activities (1),(2), and (3), and as such not requiring separate approval.
the Act and the trust is one of the Applicants.



L eg a l D evelo p m en ts

subject to the conditions set forth in the regulation or
order, the exemption would not be substantially at
variance with the purposes of the Act and would be in
the public interest.
The Board has refused to exempt general securities
activities under section 4(c)(9). It has viewed such
exemption as contrary to the public interest in light of
Congress’ indications, in enacting the Glass-Steagall
Act, that affiliations of banks and securities companies
give rise to potential conflicts of interests and unsound
banking practices.4 In determining whether to grant an
exemption under section 4(c)(9), the Board has also
considered whether such exemption would give the
foreign institution a competitive advantage over do­
mestic or other foreign banking organizations.5 These
concerns are somewhat mitigated with respect to the
proposed brokerage and custodial activities in view of
the provision of section 16 of the Glass-Steagall Act
(12 U.S.C. § 24 Seventh) that permits member banks
to engage in purchasing and selling securities “ solely
upon the order, and for the account of, customers
With respect to the other proposed activities, more­
over, the Board notes that bank holding companies are
permitted to act as managing agent pursuant to section
225.4(a)(5)(iii) of Regulation Y (12 C.F.R. § 225.4
(a)(5)(iii», and that the Board has previously deter­
mined in one case that buying and selling gold and
silver coin and bullion is closely related to banking.6
Furthermore, the Board notes that Leumi Securities
engaged in the proposed securities activities for 18
years, until December 31, 1980, when Applicants’ tenyear grandfather authority expired. In view of the
inconvenience that denial would cause for longstand­
ing customers of Leumi Securities, the Board believes
it would be consistent with the public interest and the
purposes of the Act to grant the requested temporary
exemptions.
Based upon the foregoing and other considerations
reflected in the record, and based upon the assumption
that Applicants will continue to qualify as foreign bank
holding companies under section 4(c)(9) and the
Board’s regulations, these applications for temporary
4. In addition to the Board’s previous Order regarding Applicants,
see also Board Orders approving applications of The Industrial Bank
of Japan, Ltd., and The Fuji Bank Ltd., to become bank holding
companies (39 Federal Register 39,503 and 39,504 (1974)).
5. See Board letter of September 17, 1979, to Banco di Roma,
S.p.A; The Bank of Tokyo, Ltd. (Tokyo International (Houston) Inc.),
61 Federal Reserve Bulletin 449 (1975) (denying an application
under section 4(c)(9)); Lloyd's Bank Limited, 60 Federal Reserve
Bulletin 139 (1974) (conditionally approving retention of export
credit and marketing corporation).
6 . In Standard Chartered Banking Group Limited (Mocatta Metals,
Inc.), 38Federal Register 27552 (1973), the Board determined that this
activity was closely related to banking in the circumstances of that
case, but declined to add the activity to the list of those generally
permissible for bank holding companies.



363

exemption are approved.7 This approval is subject to
the conditions that Applicants continue to actively
pursue approval of the applications for these activities
pursuant to section 4(c)(8), and that Applicants cease
to engage in these activities as soon as practicable if
the Board denies those applications, but in no case
later than six months from the date of such denial. This
approval is also subject to considerations set forth in
section 225.4(c) of the Board’s Regulation Y and to the
Board’s authority to require reports by and make
examinations of bank holding companies and their
subsidiaries, and to require such modification or termi­
nation of the activities of a bank holding company or
any of its subsidiaries as the Board finds necessary to
assure compliance with the provisions and purposes of
the Act and the Board’s Orders and regulations issued
thereunder, or to prevent evasion thereof.
By order of the Board of Governors, effective
March 13, 1981.
Voting for this action: Chairman Volcker and Governors
Schultz, Wallich, Partee, Teeters, and Gramley. Absent and
not voting: Governor Rice.

(Signed) James McAfee,
[seal]

Assistant Secretary o f the Board.

7. The Board’s action on these applications in no way constitutes
any finding on the pending section 4(c)(8) applications.

O rders U nder S ection 2 o f Bank H olding
C om pany A c t

Rae C. Heiple, Inc.,
Abingdon, Illinois
Order Granting Determination Under the Bank
Holding Company Act

Rae C. Heiple, Inc., Abingdon, Illinois (“ Company” ),
a registered bank holding company within the meaning
of section 2(a) of the Bank Holding Company Act of
1956, as amended (“ BHC Act” ) (12 U.S.C. § 1841(a)),
by virtue of its ownership, of more than 25 percent of
the outstanding voting shares of Abingdon Bank and
Trust Company, Abingdon, Illinois (“ Bank” ), has
requested a determination, pursuant to the provisions
of section 2(g)(3) of the BHC Act (12 U.S.C.
§ 1841(g)(3)), that Company is not, in fact, capable of
controlling Bank, Rae C. Heiple, II (an individual to
whom it transferred its shares of Bank), or Sharon
Heiple, notwithstanding, the fact that Mr. Heiple and
his wife, Sharon Heiple (referred to jointly as the

364

Federal Reserve Bulletin □ April 1981

“ Heiples” ), are officers and directors of both Bank
and Company.
Under the provisions of section 2(g)(3) of the BHC
Act, shares transferred after January 1, 1966, by any
bank holding company to a transferee that is indebted
to the transferor or has one or more officers, directors,
trustees, or beneficiaries in common with or subject to
the control of the transferor, are deemed to be indi­
rectly owned or controlled by the transferor unless the
Board, after opportunity for a hearing, determines that
the transferor is not in fact capable of controlling the
transferee. No request for a hearing was made by
Company. Instead, Company has submitted evidence
to the Board to support its contention that it is
incapable of controlling the Heiples either directly or
indirectly. The Board has received no contradictory
evidence.
It is hereby determined that Company is not, in fact,
capable of controlling Bank or the Heiples. This
determination is based upon the evidence in the mat­
ter, including the following facts. Company is a small
closely-held corporation of which 100 percent of its
common stock is owned by Mr. Heiple, who along
with his wife serve as its only officers and directors.
By virtue of section 4(c)(ii) of the BHC Act, Company
was exempted from divesting either its banking or
insurance activities—as otherwise required by section
4(a)(2) of the BHC Act. Nevertheless, Company chose
to divest its voting shares of Bank before December 31,
1980. In anticipation of such a divestiture, Company
sold all of its voting shares of Bank to Mr. Heiple.
Thus, Company’s interest in Bank has terminated. The
Heiples own 73 percent of Bank’s common stock, and
are also directors and officers of Bank, and the divesti­
ture does not appear to have been a means for perpetu­
ating Company’s control over Bank. Rather, from the
record it appears that control of both Company and
Bank resides with the Heiples as individuals, and there
is no evidence that Company controls or is in fact
capable of controlling the Heiples either as a transfer­
ee of Bank stock, or otherwise.
Accordingly, it is ordered that the request of Com­
pany for a determination pursuant to section 2(g)(3)
be, and hereby is granted. This determination is based
upon the representations made to the Board by Com­
pany and Mr. Heiple. In the event the Board should
hereafter determine that facts material to this determi­
nation are otherwise than as represented, or that
Company or Mr. Heiple has failed to disclose to the
Board other materials facts, this determination may be
revoked, and any change in the facts or circumstances
relied upon in making this determination could result
in a reconsideration of the determination made herein.
By order of the Board of Governors, acting through
its General Counsel pursuant to delegated authority



(12 C.F.R. § 265.2(b)(1)), effective March 23, 1981.
(Signed) J ames McAfee ,
[s e a l]

A ssistan t Secretary o f the Board.

O rders U nder S ection 25(a) F ederal R eserve
A ct

Bankers International Corporation,
New York, New York
Order Denying Additional A ctivity Under Section
25(a) o f the Federal R eserve A ct

Bankers International Corporation (“ BIC” ), New
York, New York, has applied for the Board’s consent
under section 25(a) of the Federal Reserve Act (12
U.S.C. § 615(c)) and section 211.5(d) of the Board’s
Regulation K (12 C.F.R. § 211.5(d)) to engage through
a subsidiary, BT Australia Limited (“ BT Australia” ),
Sydney, Australia, in the trading of physical commod­
ities futures on the Sydney Futures Exchange
(“ SFE” ), Sydney, Australia.
BIC is a corporation organized under section 25(a)
of the Federal Reserve Act (an “ Edge Corporation” )
and is a wholly-owned subsidiary of Bankers Trust
Company (“ Bank” ), New York, New York. Bank, a
wholly-owned subsidiary of Bankers Trust New York
Corporation, New York, New York, had assets on
June 30, 1980, of approximately 30.5 billion dollars.
BIC’s indirect subsidiary, BT Australia, is an Aus­
tralian merchant bank offering a broad range of serv­
ices. In early 1979, BT Australia purchased a floor
membership on the SFE and currently engages in a
brokerage business with respect to financial and gold
bullion futures.1 BT Australia now seeks to be able to
engage in a futures brokerage business with respect to
physical commodities, i.e., greasy wool, live cattle
and boneless beef. The proposed activity is not includ­
ed in the list of activities that subsidiaries of Edge
Corporations may perform (section 211.5(d) of Regula­
tion K (12 C.F.R. 211.5(d)).
Edge Corporations are organized for the purpose of
engaging in international or foreign banking or other
international or foreign financial operations. In amend­
ing its Regulation K in June 1979, the Board included a
list of activities that it had determined to be “ usual in
1. The Board has determined that pursuant to section 4(c)(8) of the
Bank Holding Company Act certain bank holding companies may act
as futures commission merchants dealing in precious metals. Republic
National Bancorporation, 63 Federal Reserve Bulletin 951
(1977). Since Regulation K permits foreign subsidiaries of U.S.
banking organizations to engage in activities that the Board has
determined by regulation or order are closely related to banking under
section 4(c)(8), this activity is permissible to BT Australia.

L eg a l D evelo p m en ts

connection with the transaction of the business of
banking or other financial operations abroad.” The
Board’s regulation provides, however, that an Edge
Corporation that is of the opinion that other activities
are usual in connection with the transaction of the
business of banking or other financial operations
abroad and are consistent with the Federal Reserve
Act or the Bank Holding Company Act may apply to
the Board for such a determination. As in the case of
an application by a bank holding company to engage in
a new activity under section 4(c)(8) of the Bank
Holding Company Act (12 U.S.C. 1843(c)(8)), the
Board may either deny the application or, if it deter­
mines to approve the application, may do so by issuing
an order permitting the specific proposal or by under­
taking to revise its regulation to indicate the general
permissibility of the activity.
The Board recognizes that in the diverse banking
and financial systems of the world, local institutions
are often permitted to engage in activities that would
not be permissible for United States banking organiza­
tions under applicable United States laws and regula­
tions. In the Edge Act and the Bank Holding Company
Act, the Board has been granted broad discretionary
authority to permit activities abroad that will augment
the competitive capabilities of United States banking
organizations. In the exercise of that authority, how­
ever, the Board has generally adhered to the policy
that the foreign activities that it authorizes should be
of a banking or financial, as opposed to commercial,
nature. In this regard, some activities that have com­
mercial characteristics may, under the circumstances
in which they are performed abroad, be financial in
nature. Thus, in acting on an application to engage in a
new activity abroad, the Board examines the context
in which the activity is performed to determine wheth­
er the activity is usual in connection with banking or
other financial operations.
The Board also takes into consideration the risks
inherent in the activity, especially whether those risks
are of a type and nature normally associated with
banking, and the effect of the activity on the capital
and managerial resources of the United States banking
organization. Therefore, in addition to determining
whether a proposed activity is banking or financial in
nature, the Board assesses whether performance of
the activity indirectly by a United States banking
organization is consistent with the supervisory and
regulatory aspects of the Federal Reserve Act and the
Bank Holding Company Act.
It does not appear that acting as a broker in physical
commodities futures as described by BIC is inherently
financial. Furthermore, it does not appear that the
activity, in the context in which it would be performed
by BT Australia, would be financial in nature. BIC has



365

indicated that of the 23 members of the Australian
Merchant Bankers Association, eight are floor mem­
bers of the SFE and, presumably, are or will be
engaged in commodity as well as financial futures
dealings. BIC also claims that many of its important
customers frequently use commodity and financial
futures in related transactions. In the view of the
Board, evidence that other financial institutions are
engaged in a specific activity, while probative, is not
determinative of the financial nature of the activity. In
dealing with an activity that is not on its face financial
the most important consideration is the nexus between
the proposed activity and other banking or financial
activities. In this regard, the Board does not believe
that the fact that the customers of BT Australia may
find it convenient to conduct physical commodities
futures business with it alters the nonfinancial nature
of the activity.
Acting as a dealer in physical commodities futures
entails assuming risks of a type not normally associat­
ed with banking. Experience indicates that at times
these risks can be substantial. The activity as de­
scribed by BIC would involve the registration of
contracts in the name of BT Australia. BT Australia
would therefore have ultimate financial responsibility
for these contracts if volatile commodities prices
caused BT Australia’s clients to be unable to meet
their obligations. In such instances, BT Australia
would be in the position of an unsecured creditor of its
commodities futures customer. BT Australia would
have to absorb any losses, which could be substantial.
While BIC has proposed several measures to reduce
the exposure of BT Australia, the Board does not
believe that these adequately mitigate the risks inher­
ent in commodities futures brokerage.
Based upon the foregoing and other considerations
reflected in the record, the Board concludes that the
activity of trading in physical commodities futures in
Australia would not be financial in nature and would
not be consistent with the purposes of the Federal
Reserve Act and therefore the application is denied.
By order of the Board of Governors, effective
March 25, 1981.
Voting for this action: Chairman Volcker and Governors
Schultz, Wallich, Partee, Rice, and Gramley. Absent and not
voting: Governor Teeters.

[s e a l ]

(Signed) J a m e s M c A f e e ,
Assistant Secretary o f the Board.

366

Federal Reserve Bulletin □ April 1981

Citibank Overseas Investment Corporation,
Wilmington, Delaware
Order Approving A dditional A ctivity Under Section
25(a) o f the Federal R eserve A ct

Citibank Overseas Investment Corporation (“ COIC”),
Wilmington, Delaware, has applied for the Board’s
consent under section 25(a) of the Federal Reserve Act
(12 U.S.C. § 615(c)) and section 211.5(d) of the
Board’s Regulation K (12 C.F.R. § 211.5(d)) to engage
through an indirect subsidiary, Surrey Insurance Com­
pany (“ Surrey” ), Sydney, Australia, in the underwrit­
ing of credit life and credit accident and health insur­
ance in Australia, regardless of whether such
insurance is directly related to extensions of credit by
COIC and it affiliates.
COIC is a corporation organized under section 25(a)
of the Federal Reserve Act (an “ Edge Corporation” )
and is a wholly-owned subsidiary of Citibank, N.A.
(“ Bank” ), New York, New York. Bank, a whollyowned subsidiary of Citicorp, New York, New York,
is the second largest commercial bank in the United
States, having assets on September 30, 1980, of ap­
proximately $97.2 billion.
COIC’s Australian subsidiary, Citicorp Australia
Holdings Limited (“ Holdings” ), which is primarily a
consumer finance company, has two Australian insur­
ance subsidiaries, Surrey and Ajax Insurance Compa­
ny (“ Ajax” ), also of Sydney. Ajax engages in the
underwriting of motor vehicle comprehensive insur­
ance and credit life and credit accident and health
insurance, while Surrey is currently an inactive com­
pany that until recently underwrote title insurance on
chattels.
COIC and Citicorp currently hold 100 percent of
Holdings’ shares pursuant to Board consents. When
the Board granted its consent, it required Holdings to
confine its activities to international or foreign banking
and other international or foreign financial operations.
Accordingly, the Board’s 1975 consent was subject to
the condition that Holdings cease to engage directly,
or indirectly through subsidiaries, in certain specified
activities, including underwriting life and casualty
insurance, within two years from the time Citicorp
acquired majority voting control of Holdings. At that
time, Ajax was engaged in a general casualty insurance
underwriting business and Surrey served as an alter
ego for Ajax while reinsuring some of Ajax’s policies.
Subsequently, Citicorp restructured the operations of
those companies so that Ajax underwrote only credit
life insurance and motor vehicle comprehensive insur­
ance (e.g., auto, fire, theft and physical damage, but
not liability insurance) while Surrey underwrote only
title insurance on chattels serving as collateral for



extensions of credit made by Holdings and its affili­
ates. In 1976, Citicorp requested that the Board con­
sider Citicorp’s indirect holding of Ajax and Surrey to
be permissible, notwithstanding the various types of
insurance coverage provided by the two corporations.
In a letter dated March 29, 1977 (the “ March 29
letter” ), the Board granted its consent for Citicorp to
retain its indirect interest in Ajax subject to several
conditions, including a provision that Ajax “ confine a
clear majority (51 percent) of its underwriting business
to transactions directly related to extensions of credit
or to dealer financing arrangements made by [Hold­
ings] and its affiliates.” The Board also granted its
consent for Citicorp to retain its indirect interest in
Surrey subject to the condition that Surrey confine its
activities to the underwriting of credit life, accident
and health insurance and title insurance on chattels
securing extensions of credit made by Holdings and its
affiliates. COIC now seeks to have the Board modify
the conditions established in the Board’s March 29
letter, specifically by removing the restriction that at
least 51 percent of the underwriting of credit life
insurance by Ajax be directly related to extensions of
credit or dealer financing arrangements by the Citicorp
organization.1
Edge Corporations are organized for the purpose of
engaging in international or foreign banking or other
international or foreign financial operations. In amend­
ing its Regulation K in June 1979, the Board included a
list of activities that it had determined to be “ usual in
connection with the transaction of the business of
banking or other financial operations abroad.” The
Board’s regulation provides, however, that an Edge
Corporation that is of the opinion that other activities
are usual in connection with the transaction of the
business of banking or other financial operations
abroad and are consistent with the Federal Reserve
Act or the Bank Holding Company Act may apply to
the Board for such a determination. As in the case of
an application by a bank holding company to engage in
a new activity under section 4(c)(8) of the Bank
Holding Company Act (12 U.S.C. 1843(c)(8)), the
Board may either deny the application or, if it deter­
mines to approve the application, may do so by issuing
1. COIC has stated that Surrey has ceased underwriting title
insurance following a change in Australian regulations. Since the
Australian Life Insurance Commissioner has requested that the credit
life insurance underwriting of Ajax be transferred to a separate legal
vehicle not engaging in other insurance activities, COIC proposes that
Ajax’s credit life and credit accident health insurance be transferred to
Surrey, that Ajax handle the run-off of that insurance already booked,
and that Ajax continue to underwrite motor vehicle insurance in
conformity with the conditions of the March 29 letter. COIC is thus
seeking the Board’s prior consent, pursuant to the final paragraph of
section 12 C.F.R. § 211.5(d), for Surrey to engage in the general
business of underwriting credit life and credit accident and health
insurance in Australia.

L eg a l D evelo p m en ts

an order permitting the specific proposal or by under­
taking to revise its regulation to indicate the general
permissibility of the activity.
The Board recognizes that in the diverse banking
and financial systems of the world, local institutions
are often permitted to engage in activities that would
not be permissible for United States banking organiza­
tions under applicable United States laws and regula­
tions. In the Edge Act and the Bank Holding Company
Act, the Board has been granted broad discretionary
authority to permit activities abroad that will augment
the competitive capabilities of United States banking
organizations. In the exercise of that authority, how­
ever, the Board has generally adhered to the policy
that the foreign activities that it authorizes should be
of a banking or financial, as opposed to commercial,
nature. In this regard, some activities that have com­
mercial characteristics may, under the circumstances
in which they are performed abroad, be financial in
nature. Thus, in acting on an application to engage in a
new activity abroad, the Board examines the context
in which the activity is performed to determine wheth­
er the activity is usual in connection with banking or
other financial operations.
The Board also takes into consideration the risks
inherent in the activity, especially whether those risks
are of a type and nature normally associated with
banking, and the effect of the activity on the capital
and managerial resources of the United States banking
organization. Therefore, in addition to determining
whether a proposed activity is banking or financial in
nature, the Board assesses whether performance of
the activity indirectly by a United States banking
organization is consistent with the supervisory and
regulatory aspects of the Federal Reserve Act and the
Bank Holding Company Act.
The list of permissible activities in Regulation K
includes the underwriting of credit life insurance and
credit accident and health insurance that is related to
extensions of credit by the Edge Corporation or its
affiliates (12 C.F.R. 211.5(d)(5)). The activity of under­
writing credit insurance with respect to extensions of
credit by unaffiliated lenders is not on the list. In the
United States, the underwriting of credit related insur­
ance is generally viewed as a financially related activi­
ty. The insurance is directly linked to an extension of
credit, the purpose of the insurance is to assure
repayment of the credit, and the beneficiary is the
lender. Under section 4(c)(8) of the Bank Holding
Company Act (12 U.S.C. 1843(c)(8)), and section
225.4(a)(10) of Regulation Y (12 C.F.R. 225.4(a)(10)),




367

underwriting credit related insurance is only permitted
when directly related to extensions of credit by the
bank holding company system.
COIC argues that the underwriting of credit related
insurance is integrally related to the lending process,
regardless of the identity of the lender, and that the
restrictions applicable in the United States serve no
regulatory purpose when the activity is conducted
abroad. Moreover, COIC provides evidence of official
concern by local authorities regarding the effect on
local competition of a limitation on the scope of
Holdings’ credit related insurance activities. COIC
contends that that concern might result in Holdings’
inability to continue to furnish credit related insurance
in connection with its own lending activities and thus
lessen its ability to compete in the Australian market.
United States banking organizations, including Citi­
corp, have extensive experience in managing the risks
associated with underwriting credit related insurance,
both in the United States and abroad. Those risks are
likely to be only marginally different when the insur­
ance is underwritten in relation to extensions of credit
by nonaffiliated companies. Moreover, the activity is
not likely to have an adverse effect on the capital,
liquidity or managerial resources of COIC or its parent
organization.
Based on the foregoing and other considerations
reflected in the record, the Board concluded that the
proposed activity in the circumstances of this case is
of a banking or financial nature and that its perform­
ance by a subsidiary of COIC would be consistent with
the purposes of the Federal Reserve Act. Accordingly,
the application is approved.2 The Board’s approval is
subject to the conditions that the lender be the benefi­
ciary of the policies underwritten and that the terms of
the insurance policies shall not exceed the amount or
tenor of the credit to which the policies are related.
By order of the Board of Governors, effective
March 25, 1981.
Voting for this action: Chairman Volcker and Governors
Schultz, Wallich, Partee, Rice, and Gramley. Absent and not
voting: Governor Teeters.

(Signed) James M cAfee,
[seal]

Assistant Secretary o f the Board.

2. The Board’s action addresses solely the issue of the permissibil­
ity of the activity of underwriting credit life and credit accident and
health insurance with regard to extensions of credit by unaffiliated
organizations and carries no implications regarding the permissibility
of underwriting other forms of insurance abroad.

368

Federal Reserve Bulletin □ April 1981

Or d e r s A p p r o v in g A p p l ic a t io n s U n d e r
Ba n k M erger A ct

th e

B a n k H o l d in g C o m p a n y A c t

and

By the Board o f Governors
During March 1981 the Board of Governors approved the applications listed below. Copies are available upon
request to Publications Services, Division of Support Services, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551.
Section 3

First International Bancshares, Inc.
Dallas, Texas
G.W.B. Holding Company, N.V.,
Curacao, Netherlands Antilles
G.W.B. Company, B.V.,
Rotterdam, The Netherlands,
GWB Holding Company,
Dover, Delaware
Metro Bank Corp.,
Denver, Colorado
Riggs National Corporation,
Washington, D.C.
Southwest Bancshares, Inc.,
Houston, Texas

Board action
(effective
date)

Bank(s)

Applicant

Lake Air National Bank of Waco,
Waco, Texas
Great Western Bank and Trust,
Phoenix, Arizona

March 24, 1981

Metro National Bank,
Denver, Colorado
Riggs National Bank of Washington,
D.C.,
Washington, D.C.
American National Bank of Garland,
Garland, Texas

March 31, 1981

March 26, 1981

March 6, 1981

March 27, 1981

By Federal R eserve Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies of the orders
are available upon request to the Reserve Banks.
Section 3
Applicant
ABT Bancshares Corporation
Hot Springs National Park,
Arkansas
Alpine Bancorp, Inc.,
Glenwood Springs, Colorado

American Holding Co.,
Glencoe, Illinois



Bank(s)
Arkansas Bank and Trust
Company
Hot Springs National Park,
Arkansas
Valley Bank and Trust,
Glenwood Springs, Colorado
Roaring Fork Bank,
Carbondale, Colorado
Roaring Fork Bancorporation,
Inc.,
Carbondale, Colorado
Bank of Highland Park,
Highland Park, Illinois

Reserve
Bank

Effective
date

St. Louis

March 3, 1981

Kansas City

February 27, 1981

Chicago

February 20, 1981

L eg a l D evelo p m en ts

369

Section 3 — Continued
Applicant
Ashton Bancorporation, Inc.,
Ashton, Illinois
Bankstock Two, Inc.,
Dardanelle, Arkansas
Beardsley Bancshares, Inc.,
Beardsley, Minnesota
CBC Bancorp, Inc.,
Cookeville, Tennessee
CNB Corp.,
Shenandoah,Iowa
California Pacific Corporation,
Bakersfield, California
Commercial Security Bancorpora­
tion,
Ogden, Utah
Commonwealth Bancshares, Inc.,
Shelbyville, Kentucky
Consolidated Bancorp, Inc.,
Waco, Texas

Darrouzett Bancshares, Inc.,
Darrouzett, Texas
Dritter Financial Corporation,
Chicago, Illinois
Exchange Holding, Inc.,
El Dorado, Kansas

FNB Financial Services, Inc.,
Cambridge, Nebraska
First Blackwell Bancshares,
Blackwell, Oklahoma
First Kansas BancGroup, Inc.,
Herndon, Kansas
First of Searcy, Inc.,
Searcy, Arkansas
First State Corporation,
Albany, Georgia




Bank(s)
The Ashton Bank and Trust
Company,
Ashton, Illinois
Arkansas Valley Bank,
Dardanelle, Arkansas
Security State Bank of Beardsley,
Beardsley, Minnesota
Citizens Bank,
Cookeville, Tennessee
The City National Bank of Shen­
andoah,
Shenandoah,Iowa
American National Bank,
Bakersfield, California
Bear River State Bank,
Tremonton, Utah
Shelby County Trust Bank,
Shelbyville, Kentucky
The First National Bank of Rose­
bud,
Rosebud, Texas
The First National Bank, Hills­
boro, Texas,
Hillsboro, Texas
First State Bank of Hewitt,
Hewitt, Texas
The First National Bank of
Darrouzett,
Darrouzett, Texas
Bank of Chicago,
Chicago, Illinois
Exchange Investors, Inc.,
El Dorado, Kansas
First National Bank and Trust
Company,
El Dorado, Kansas
The First National Bank of
Cambridge,
Cambridge, Nebraska
First National Bank and Trust
Company,
Blackwell, Oklahoma
The State Bank of Herndon,
Herndon, Kansas
First Security Bank,
Searcy, Arkansas
First Bank and Trust Company,
Albany, Georgia
State Bank of Leesburg,
Leesburg, Georgia

Reserve
Bank

Effective
date

Chicago

March 9, 1981

St. Louis

February 25, 1981

Minneapolis

March 23, 1981

Atlanta

March 19, 1981

Chicago

March 17, 1981

San Francisco

March 27, 1981

San Francisco

March 25, 1981

St. Louis

March 23, 1981

Dallas

February 27,1981

Dallas

March 4, 1981

Chicago

March 18, 1981

Kansas City

March 9, 1981

Kansas City

March 20, 1981

Kansas City

February 20, 1981

Kansas City

February 19, 1981

St. Louis

March 5, 1981

Atlanta

March 19, 1981

370

Federal Reserve Bulletin □ April 1981

Section 3 — Continued
Applicant
First United Bancshares, Inc.,
North Platte, Nebraska
Gray Bancorp.,
Coleridge, Nebraska
Heritage Financial Corporation,
Loudon, Tennessee
J & L Bancorporation, Inc.,
Glendive, Montana
James Madison Limited,
Washington, D.C.
Jay hawk Bancshares, Inc.,
Kansas City, Kansas

LaFarge Bancorp. Inc.,
La Farge, Wisconsin
Mercantile Bancorporation Inc.,
St. Louis, Missouri
Osage Bank Services, Inc.,
Osage, Iowa
Pacwest Bancorp and Citizens
Bank Purchase Company,
Milwaukie, Oregon
Piedmont BankGroup Incorp­
orated,
Martinsville, Virginia
Republic of Texas Corporation,
Dallas, Texas
Society Corporation,
Cleveland, Ohio
St. Croix Banco, Inc.,
Somerset, Wisconsin
Texas Commerce Bancshares,
Inc.,
Houston, Texas
Valders Bancorporation,
Valders, Wisconsin
Valley Bancorporation,
Appleton, Wisconsin
Valley Bancorporation,
Appleton, Wisconsin
Warren Bancorp, Inc.,
Warren, Illinois
Weatherford Bancshares, Inc.,
Weatherford, Oklahoma
Welch Bancshares, Inc.,
Welch, Oklahoma



Bank(s)
McDonald State Bank,
North Platte, Nebraska
The Coleridge National Bank,
Coleridge, Nebraska
First Heritage National Bank,
Loudon, Tennessee
First Security Bank of Glendive,
Glendive, Montana
Madison National Bank,
Washington, D.C.
Lawrence Bancshares, Inc.,
Kansas City, Missouri
Lawrence Bank & Trust Co., N.A.,
Lawrence, Kansas
LaFarge State Bank,
La Farge, Wisconsin
The First National Bank of
Monett,
Monett, Missouri
Osage Farmer National Bank,
Osage, Iowa
Citizens Bank of Oregon,
Eugene, Oregon
The First National Bank of
Ferrum,
Ferrum, Virginia
Spring Branch Bank,
Houston, Texas
The First National Bank at
Carrollton,
Carrollton, Ohio
Bank of Somerset,
Somerset, Wisconsin
Texas Commerce Bank-Quorum,
National Association,
Addison, Texas
Valders State Bank,
Valders, Wisconsin
The First National Bank of
Ripon,
Ripon, Wisconsin
Citizens Bank of Juneau,
Juneau, Wisconsin
Citizens Bank and Trust
Company,
Warren, Illinois
Security State Bank,
Weatherford, Oklahoma
Welch State Bank of Welch,
Oklahoma, Welch, Oklahoma

Reserve
Bank

Effective
date

Kansas City

March 20, 1981

Kansas City

March 13, 1981

Atlanta

March 3, 1981

Minneapolis

March 24, 1981

Richmond

March 6, 1981

Kansas City

February 27, 1981

Chicago

March 9, 1981

St. Louis

February 26, 1981

Chicago

March 24, 1981

San Francisco

March 27, 1981

Richmond

March 2, 1981

Dallas

March 12, 1981

Cleveland

March 20, 1981

Minneapolis

March 4, 1981

Dallas

March 11, 1981

Chicago

February 27, 1981

Chicago

March 16, 1981

Chicago

February 24, 1981

Chicago

February 24, 1981

Kansas City

March 6, 1981

Kansas City

February 27, 1981

L eg a l D evelo p m en ts

371

Section 3 — Continued
Applicant

Bank(s)

West Gate Banshares, Inc.
Omaha, Nebraska

West Gate Bank,
Lincoln, Nebraska

Reserve
Bank

Kansas City

Effective
date

March 12, 1981

Sections 3 and 4

Applicant

Bank(s)

Clayton Bancshares,
Inc.,
Clayton, Alabama

The Clayton Banking
Company
Clayton, Alabama

Inwood Bancorp.
Inc.,
In wood, Iowa
Peoples Ban Cor­
poration,
Seattle, Washing­
ton

Inwood State Bank,
Inwood, Iowa
Peoples National
Bank of Washing­
ton
Seattle, Washington

Southwest Bancorp, Southwest Bank,
Vista, California
Vista, California

Nonbanking
company
(or activity)

Reserve
Bank

Effective
date

to engage in general
insurance and con­
sumer financing ac­
tivities
to engage in general
insurance activities

Atlanta

March 20, 1981

Chicago

February 26, 1981

to engage in originat­
ing and servicing
loans secured by
real estate for con­
struction purposes
to engage in the activ­
ities of an industrial
loan company

San
Francisco

February 26, 1981

San
Francisco

March 5, 1981

O r d e r s A p p r o v e d U n d e r B a n k M erg er A ct
By the Board o f Governors

Applicant
Exchange Bank and Trust Com­
pany of Florida,
Tampa, Florida

Banks
Exchange National Bank of Pinel­
las County,
Clearwater, Florida
Exchange National Bank of Pasco
County,
Holiday, Florida

Reserve
Bank
Atlanta

Effective
date
March 11, 1981

By Federal Reserve Banks

Applicant
Fidelity Union Trust Company,
Newark, New Jersey
The Harter Bank & Trust
Company
Canton, Ohio




Banks
The National Bank of New
Jersey,
Piscataway, New Jersey
The First National Bank at
Carrollton,
Carrollton, Ohio

Reserve
Bank

Effective
date

New York

February 26, 1981

Cleveland

March 20, 1981

372

Federal Reserve Bulletin □ April 1981

P e n d in g Ca se s In v o l v in g

th e

B oard

of

G overn o rs*

*This list o f pending cases does not include suits
against the Federal Reserve Banks in which the Board
of Governors is not named a party.
First Bank & Trust Company v. Board o f Governors,

filed February 1981, U.S.D.C. for the Eastern Dis­
trict of Kentucky.
Ellis E. St. Rose & James H. Sibbet v. Board of
Governors, filed February 1981, U.S.D.C. for the
District of Columbia.
Option Advisory Service, Inc. v. Board o f Governors,
et al., filed February 1981, U.S.C.A. for the Second
Circuit.
Wilshire Oil Company o f Texas v. Board o f Gover­
nors, et al., filed Decemer 1980, U.S.D.C. for New
Jersey.
9 to 5 Organization for Women Office Workers v.
Board o f Governors, filed December 1980,
U.S.D.C. for the District of Massachusetts.
Securities Industry Association v. Board o f Gover­
nors, et al., filed October 1980, U.S.D.C. for the
District of Columbia.
Securities Industry Association v. Board o f Gover­
nors, et al., filed October 1980, U.S.C.A. for the
District of Columbia.
A. G. Becker, Inc. v. Board o f Governors, et al., filed
October 1980, U.S.D.C. for the District of Colum­
bia.
A. G. Becker, Inc. v. Board o f Governors, et al., filed
October 1980, U.S.C.A. for the District of Colum­
bia.
Independent Insurance Agents o f America and Inde­
pendent Insurance Agents o f Missouri v. Board of
Governors, filed September 1980, U.S.C.A. for the

Eighth Circuit.
Independent Insurance Agents o f America and Inde­
pendent Insurance Agents o f Virginia v. Board o f
Governors, filed September 1980, U.S.C.A. for the

Fourth Circuit.
Nebraska Bankers Association, et al. v. Board of
Governors, et al., filed September 1980, U.S.D.C.

for the District of Nebraska.
Republic o f Texas Corporation v. Board o f Governors,

filed September 1980, U.S.C.A. for the Fifth Cir­
cuit.
Consumers Union o f the United States, Inc. v. Board
o f Governors, et al., filed August 1980, U.S.D.C. for
the District of Columbia.




A. G. Becker, Inc. v. Board o f Governors, et al., filed

August 1980, U.S.D.C. for the District of Columbia.
Otero Savings and Loan Association v. Board of
Governors, filed August 1980, U.S.D.C. for the

District of Columbia.
Edwin F. Gordon v. Board o f Governors, et al., filed

August 1980, U.S.C.A. for the Fifth Circuit.
Martin-Trigona v. Board o f Governors, filed July

1980, U.S.C.A. for the District of Columbia.
U.S. League o f Savings Associations v. Depository
Institutions Deregulation Committee, et al., filed

June 1980, U.S.D.C. for the District of Columbia.
Berkovitz, et al. v. Government o f Iran, et al., filed

June 1980, U.S.D.C. for the Northern District of
California.
Mercantile Texas Corporation v. Board o f Governors,
filed May 1980, U.S.C.A. for the Fifth Circuit.
Corbin, Trustee v. United States, filed May 1980,
United States Court of Claims.
Louis J. Roussel v. Board o f Governors, filed April
1980, U.S.D.C. for the District of Columbia.
Ulyssess S. Crockett v. United States, et al., filed
April 1980, U.S.D.C. for the Eastern District of
North Carolina.
County National Bancorporation and TGB Co. v.
Board o f Governors, filed September 1979,
U.S.C.A. for the Eighth Circuit.
Gregory v. Board o f Governors, filed July 1979,
U.S.D.C. for the District of Columbia.
Donald W. Riegel, Jr. v. Federal Open Market Com­
mittee, filed July 1979, U.S.D.C. for the District of
Columbia.
Connecticut Bankers Association , et al., v. Board o f
Governors, filed May 1979, U.S.C.A. for the Dis­
trict of Columbia.
Security Bancorp and Security National Bank v.
Board o f Governors, filed March 1978, U.S.C.A. for
the Ninth Circuit.
Roberts Farms, Inc. v. Comptroller o f the Currency,
et al., filed November 1975, U.S.D.C. for the South­
ern District of California.
David Merrill, et al. v. Federal Open Market Commit­
tee, filed May 1975, U.S.D.C. for the District of
Columbia.

373

Directors of
Federal Reserve Banks and Branches
Following is a list of the directorates of the Federal
Reserve Banks and Branches as presently constituted.
The list shows, in addition to the name of each
director, the principal business affiliation, the class of
directorship, and the date when the term expires. Each
Federal Reserve Bank has nine directors: three Class
A and three Class B directors, who are elected by the
stockholding member banks, and three Class C direc­
tors, who are appointed by the Board of Governors of
the Federal Reserve System. All Federal Reserve
Bank directors are chosen without discrimination on
the basis of race, creed, color, sex, or national origin.
Class A directors are representative of the stockhold­
ing member banks. Class B directors represent the
public and are elected with due but not exclusive
consideration to the interests of agriculture, com­
merce, industry, services, labor, and consumers, and
may not be officers, directors, or employees of any
bank.
For the purpose of electing Class A and Class B
directors, the member banks of each Federal Reserve
District are classified by the Board of Governors of the
Federal Reserve System into three groups, each of
which consists of banks of similar capitalization, and

D i s t r i c t 1—B o s t o n
C la s s A

Fred A. White
H. Alan Timm
Henry S. Woodbridge, Jr.3

each group elects one Class A and one Class B
director. Class C directors are selected to represent
the public with due but not exclusive consideration to
the interests of agriculture, commerce, industry, serv­
ices, labor, and consumers, and may not be officers,
directors, employees, or stockholders of any bank.
One Class C director is designated by the Board of
Governors as Chairman of the board of directors and
Federal Reserve Agent and another is appointed Dep­
uty Chairman.
Federal Reserve Branches have either five or seven
directors, of whom a majority are appointed by the
board of directors of the parent Federal Reserve Bank;
the others are appointed by the Board of Governors of
the Federal Reserve System. One of the directors
appointed by the Board of Governors at each Branch
is designated annually as Chairman of the board of that
Branch in such a manner as the Federal Reserve Bank
may prescribe.
In this list of the directorates, a name followed by
footnote reference 1 (0 is a Chairman of the Bank’s
board, that by footnote reference 2 (2) is a Deputy
Chairman, and that by footnote reference 3 (3) indi­
cates a new appointment.

Term
expires
Dec. 31
President, Dartmouth National Bank of Hanover, Hanover, N.H.
President, Bank of Maine, N.A., Augusta, Maine
Chairman of the Board and Chief Executive Officer, Rhode Island
Hospital Trust National Bank, Providence, R.I.

1981
1982
1983

President and Chief Executive Officer, Connecticut General Life
Insurance Company, Hartford, Conn.
Senior Vice President, The Stop & Shop Companies, Inc., Boston,
Mass.
Chairman and Chief Executive Officer, Markem Corporation,
Keene, N.H.

1981

C la s s B

Robert D. Kilpatrick
Carol R. Goldberg
Joseph A. Baute3




1982
1983

374

Federal Reserve Bulletin □ April 1981

Term
expires
Dec. 31

C la ss C

Robert P. Henderson1
Thomas I. Atkins2
Michael J. Harrington3

President and Chief Executive Officer, Itek Corporation, Lexington,
Mass.
General Counsel, National Association for the Advancement of
Colored People, New York, N.Y.
Harrington, Keefe, and Schork, Inc., Boston, Mass.

1981

1983

President, Ballston Spa National Bank, Ballston Spa, N.Y.
Chairman of the Board, Irving Trust Company, New York, N.Y.
Chairman and President, United Bank Corporation, Albany, N.Y.

1981
1982
1983

Chairman of the Board, Allied Chemical Corporation,
Morristown, N.J.
President, Union Pacific Corporation, New York, N.Y.
President and Chief Executive Officer, International Business
Machines Corporation, Armonk, N.Y.

1981

Senior Vice President, R. H. Macy & Compamy, Inc.,
New York, N.Y.
Dean, Graduate School of Business, Columbia University,
New York, N.Y.
Partner, Shearman and Sterling, Attorneys, New York, N.Y.

1981

1982

D i s t r i c t 2 — N e w Yo r k

C la ss A
James Whelden
Gordon T. Wallis
Peter D. Kiernan3
C la ss B
Edward L. Hennessy, Jr.
William S. Cook
John R. Opel3

1982
1983

C la ss C
Gertrude G. Michelson
Boris Yavitz2
Robert H. Knight1

1982
1983

—B u f f a l o B r a n c h

A ppointed by Federal R eserve Bank
Robert J. Donough
M. Jane Dickman
Arthur M. Richardson
Carl F. Ulmer3

President, Liberty National Bank and Trust Company,
Buffalo, N.Y.
Partner, Touche Ross & Co., Buffalo, N.Y.
President and Chief Executive Officer, Security Trust Company,
Rochester, N.Y.
President, The Evans National Bank of Angola, Angola, N.Y.

1981
1982
1982
1983

Appointed by Board o f Governors
George L. Wessel
Frederick D. Berkeley, III
John R. Burwell



President, Buffalo AFL-CIO Council, Buffalo, N.Y.
Chairman of the Board and President, Graham Manufacturing
Company, Inc., Batavia, N.Y.
President, Rollins Container Corporation, Rochester, N.Y.

1981
1982
1983

D irectors o f F ederal R eserve Banks an d B ranches

Term
expires
Dec. 31

D i s t r i c t 3 —P h i l a d e l p h i a

C la ss A
Robert H. Deacon
Donald J. Seebold
Roger S. Hillas3

375

President, The Bank of Mid-Jersey, Bordentown, N.J.
President, The First National Bank of Danville, Danville, Pa.
Chairman and President, Provident National Bank,
Philadelphia, Pa.

1981
1982
1983

Chairman and Chief Executive Officer, John Wanamaker,
Philadelphia, Pa.
Chairman of the Board and Chief Executive Officer, Eberhard
Faber, Inc., Wilkes-Barre, Pa.
President and Chief Executive Officer, Armstrong World Industries,
Inc., Lancaster, Pa.

1981

C la ss B
Richard P. Hauser
Eberhard Faber
Harry A. Jensen

1982
1983

C la ss C
John W. Eckman1
Jean A. Crockett2
Robert M. Landis3

Chairman and Chief Executive Officer, Rorer Group Inc.,
Fort Washington, Pa.
Chairman, Department of Finance, Wharton School, University of
Pennsylvania, Philadelphia, Pa.
Partner, Dechert Price & Rhoads, Philadelphia, Pa.

1981
1982
1983

D i s t r i c t 4— Cl e v e l a n d

C la ss A
Everett L. Maffett
John W. Alford
J. David Barnes3

President and Chief Executive Officer, Eaton National Bank &
Trust Co., Eaton, Ohio
Chairman of the Board and Chief Executive Officer, The Park
National Bank, Newark, Ohio
Chairman and Chief Executive Officer, Mellon Bank, N.A.,
Pittsburgh, Pa.

1981

Managing Partner, Proctor, Robb and Company, Granville, Ohio
President, John W. Kessler Company, Columbus, Ohio
Chairman of the Board, Eaton Corporation, Cleveland, Ohio

1981
1982
1983

President—Coal Unit and Executive Vice President, Diamond
Shamrock Corporation, Lexington, Ky.
Senior Partner, The Andersons, Maumee, Ohio
President and Chief Executive Officer, Cyclops Corporation,
Pittsburgh, Pa.

1981

1982
1983

C la ss B
Jeffery A. Robb
John W. Kessler
E. M. de Windt3
C la ss C
J. L. Jackson1
John D. Anderson3
William H. Knoell2’ 3



1982
1983

376

Federal Reserve Bulletin □ April 1981

— Cin c in n a t i B r a n c h
A p p o in ted by F ed era l R e serve B ank

Lawrence C. Hawkins
Elden Houts
Oliver W. Birckhead
O. T. Dorton3

Term
expires
Dec. 31

Senior Vice President, University of Cincinnati, Cincinnati, Ohio
President, The Citizens Commercial Bank and Trust Company,
Celina, Ohio
Chairman of the Board and Chief Executive Officer, The Central
Trust Company, N.A., Cincinnati, Ohio
President, Citizens National Bank, Paintsville, Ky.

1981
1981
1982
1983

A p p o in te d b y B o a r d o f G o v e r n o r s

Martin B. Friedman
Sister Grace Marie Hiltz
Vacancy

Director, Formica Corporation, Cincinnati, Ohio
President, Sisters of Charity Health Care Systems, Inc., Cincinnati,
Ohio
1983

1981
1982

—P it t s b u r g h B r a n c h
A p p o in ted by F ederal R e serve Bank

Thomas V. Mansell
R. Burt Gookin
William D. McKain
Ernest L. Lake3

President and Chief Executive Officer, First National Bank of
Western Pennsylvania, New Castle, Pa.
Director, H. J. Heinz Co., Pittsburgh, Pa.
President, Wheeling National Bank, Wheeling, W. Va.
President, The National Bank of North East, North East, Pa.

1981
1981
1982
1983

A p p o in ted by B oa rd o f G overnors

Vacancy
Robert S. Kaplan
Milton G. Hulme, Jr.

Dean, Graduate School of Industrial Administration, CarnegieMellon University, Pittsburgh, Pa.
President and Chief Executive Officer, Mine Safety Appliances
Company, Pittsburgh, Pa.

1981
1982
1983

D i s t r i c t 5 —R i c h m o n d

C la ss A
Vincent C. Burke, Jr.
William M. Dickson
J. Banks Scarborough3

Chairman of the Board and Chief Executive Officer, The Riggs
National Bank, Washington, D.C.
President & Senior Trust Officer, First National Bank in
Ronceverte, Ronceverte, W. Va.
Chairman and President, Pee Dee State Bank, Timmonsville, S.C.

1981
1982
1983

C la ss B
Paul G. Miller
James A. Chapman, Jr.
Leon A. Dunn, Jr.3



Chairman of the Board and Chief Executive Officer, Commercial
Credit Company, Baltimore, Md.
Chairman of the Board and Chief Executive Officer, Inman Mills,
Inman, S.C.
Chairman, President and Chief Executive Officer, Guardian
Corporation and Subsidiaries, Rocky Mount, N.C.

1981
1982
1983

D irectors o f F ederal R e serve B anks an d B ranches

377

Term

C la s s C

expires
Dec. 31
Maceo A. Sloan1
Paul E. Reichardt
Steven Muller2

Executive Vice President and Chief Operating Officer, North
Carolina Mutual Life Insurance Company, Durham, N.C.
Chairman of the Board and Chief Executive Officer, Washington
Gas Light Company, Washington, D.C.
President, The Johns Hopkins University, Baltimore, Md.

1981
1982
1983

—B a ltim o r e B ra n c h

A ppointed by Federal R eserve Bank
Pearl C. Brackett
Hugh D. Shires
A. R. Reppert
Joseph M. Gough, Jr.

Assistant/Deputy Manager, Baltimore Regional Chapter of
American Red Cross, Baltimore, Md.
President and Chief Executive Officer, The First National Bank and
Trust Company of Western Maryland, Cumberland, Md.
President, The Union National Bank of Clarksburg, Clarksburg,
W. Va.
President, The First National Bank of St. Mary’s, Leonardtown,
Md.

1981
1982
1982
1983

A ppointed by Board o f Governors
Joseph H. McLain
Edward H. Co veil
Robert L. Tate3

President, Washington College, Chestertown, Md.
Vice President, Country Pride Foods Limited, General Manager,
Delmarva Division, Easton, Md.
Chairman, Tate Industries, Baltimore, Md.

1981
1982
1983

— Ch arlotte Br a n c h

A ppointed by Federal R eserve Bank
Hugh M. Chapman
J. B. Aiken, Jr.3
W. B. Apple, Jr.
Nicholas W. Mitchell3

Chairman of the Board, The Citizens & Southern National Bank of
South Carolina, Columbia, S.C.
Chairman of the Board, Guaranty Bank and Trust Company,
Florence, S.C.
President, First National Bank of Reidsville, Reidsville, N.C.
President and Director, Piedmont Federal Savings and Loan
Association, Winston-Salem N.C.

1981
1982
1982
1983

A ppointed by Board o f Governors
Henry Ponder
Naomi G. Albanese
William S. Lee III3



Office of the President, Benedict College, Columbia, S.C.
Dean, School of Home Economics, University of North Carolina at
Greensboro, Greensboro, N.C.
President and Chief Operating Officer, Duke Power Company,
Charlotte, N.C.

1981
1982
1983

378

Federal Reserve Bulletin □ April 1981

D is t r ic t 6—A t l a n t a

Term
expires
Dec. 31

C la s s A

Guy W. Botts
Dan B. Andrews
Hugh M. Willson

Chairman of the Board, Barnett Banks of Florida, Inc.,
Jacksonville, Fla.
President, First National Bank of Dickson, Dickson, Tenn.
President, Citizens National Bank, Athens, Tenn.

1981
1982
1983

C la s s B

Floyd W. Lewis
Jean McArthur Davis
Harold B. Blach, Jr.3

Chairman of the Board and Chief Executive Officer, Middle South
Utilities, Inc., New Orleans, La.
President, McArthur Dairy, Inc., Miami, Fla.
President, Blach’s Inc., Birmingham, Ala.

1981

President, Cal-Maine Foods, Inc., Jackson, Miss.
Chairman and Chief Executive Officer, Richway, Atlanta, Ga.
Chairman and Chief Executive Officer, Charter Medical
Corporation, Macon, Ga.

1981
1982
1983

1982
1983

C la s s C

Fred Adams, Jr.
John H. Weitnauer, Jr.2
William A. Fickling, Jr.1

—B irm in g h a m B r a n c h
A ppointed by Federal R eserve Bank
Guy H. CafFey, Jr.

C. Gordon Jones
Martha A. Mclnnis
Henry A. Leslie3

Chairman and Chief Executive Officer, Southern Bancorporation of
Alabama and Birmingham Trust National Bank, Birmingham,
Ala.
President and Chief Executive Officer, First National Bank of
Decatur, Decatur, Ala.
Executive Vice President, Alabama Environmental Quality
Association, Montgomery, Ala.
President and Chief Executive Officer, Union Bank & Trust Co.,
Montgomery, Ala.

1981

1982
1982
1983

A ppointed by Board o f Governors
Louis J. Willie
William H. Martin, III
Samuel R. Hill, Jr.3

Executive Vice President, Booker T. Washington Insurance Co.,
Birmingham, Ala.
President and Chief Executive Officer, Martin Industries, Inc.,
Florence, Ala.
President, University of Alabama in Birmingham, Birmingham, Ala.

1981
1982
1983

—J a c k s o n v il l e B r a n c h

A ppointed by Federal R eserve Bank
Robert E. Warfield, Jr.
Whitfield M. Palmer, Jr.
Billy J. Walker
Gordon W. Campbell3



Chairman and President, Barnett Bank of Eustis, N.A., Eustis, Fla.
Chairman, Florida Crushed Stone Company, Ocala, Fla.
President, Atlantic Bancorporation, Jacksonville, Fla.
President and Chief Executive Officer, Exchange Bancorporation,
Inc., Tampa, Fla.

1981
1982
1982
1983

D irectors o f F ederal R eserve Banks and B ranches

A p p o in ted by B o a rd o f G overnors

Jerome P. Keuper
Copeland D. Newbern
Joan W. Stein

379

Term
expires
Dec. 31

President, Florida Institute of Technology, Melbourne, Fla.
Chairman of the Board, Newbern Groves, Inc., Tampa, Fla.
Partner, Regency Square Shopping Center, Jacksonville, Fla.

1981
1982
1983

—M ia m i B r a n c h
A p p o in te d by F ed era l R e se rv e B ank

Jane C. Cousins
Alfred W. RoepstorfiF
M. G. Sanchez
Daniel S. Goodrum3

President, Cousins Associates, Inc., Miami, Fla.
President, National Bank of Collier County, Marco Island, Fla.
President and Chief Executive Officer, First Bankers Corporation of
Florida, Pompano Beach, Fla.
President and Chief Executive Officer, Century Banks, Inc.,
Ft. Lauderdale, Fla.

1981
1981
1982
1983

A p p o in te d by B o a rd o f G overnors

Roy W. Vandegrift, Jr.
David H. Rush
Eugene E. Cohen3

President, Vandegrift-Williams Farms, Inc., Pahokee, Fla.
President, ACR Electronics, Inc., Hollywood, Fla.
Treasurer and Chief Financial Officer, Howard Hughes Medical
Institute, Coconut Grove, Fla.

1981
1982
1983

—N a s h v il l e B r a n c h
A p p o in te d by F ed era l R e se rv e B ank

Ruth W. Ellis
Charles J. Kane
John R. King
James F. Smith, Jr.3

President, Mountain Empire Bank, Johnson City, Tenn.
Chairman and Chief Executive Officer, Third National Bank in
Nashville, Nashville, Tenn.
President, The Mason and Dixon Lines, Inc., Kingsport, Tenn.
Chairman and Chief Executive Officer, Park National Bank,
Knoxville, Tenn.

1981
1982
1982
1983

A p p o in ted by B o a rd o f G overnors

John C. Bolinger, Jr.
Cecelia Adkins
Robert C. H. Mathews Jr.

Management Consultant, Knoxville, Tenn.
Executive Director, Sunday School Publishing Board, Nashville,
Tenn.
President, R. C. Mathews Contractor, Inc., Nashville, Tenn.

1981
1982
1983

—N e w O r l e a n s B r a n c h
A p p o in ted by F ed era l R e se rv e B ank

Robert H. Bolton
Patrick A. Delaney
Ben M. Radcliff
Paul W. McMullan3



President, Rapides Bank and Trust Company in Alexandria,
Alexandria, La.
President, Whitney National Bank of New Orleans,
New Orleans, La.
President, Ben M. Radcliff Contractor, Inc., Mobile, Ala.
Chairman and Chief Executive Officer, First Mississippi National
Bank, Hattiesburg, Miss.

1981
1982
1982
1983

380

Federal Reserve Bulletin □ April 1981

A ppointed by B oard o f Governors

Horatio C. Thompson
Levere C. Montgomery
Leslie B. Lampton3

Term
expires
Dec. 31

President, Horatio Thompson Investment, Inc., Baton Rouge, La.
Chairman, Time Saver Stores, Inc., New Orleans, La.
President, Ergon, Inc., Jackson, Miss.

1981
1982
1983

Chairman of the Board, Continental Illinois National Bank and
Trust Company of Chicago, Chicago, 111.
President, First National Bank of Logansport, Logansport, Ind.
President, The Citizens National Bank of Charles City,
Charles City, la.

1981

D i s t r i c t 7— C h i c a g o
C la s s A

Roger E. Anderson
Patrick E. McNarny
Ollie Jay Tomson3

1982
1983

C la s s B

Dennis W. Hunt
Mary Garst
Leon T. Kendall3

President, Hunt Truck Lines, Inc., Rockwell City, la.
Manager of Cattle Division, Garst Company. Coon Rapids, la.
President, Mortgage Guaranty Insurance Corp., Milwaukee, Wis.

1981
1982
1983

Business Manager, Chicago Journeymen Plumbers, Local Union
130, U.A., Chicago, 111.
President, Tribune Company, Chicago, 111.
Vice President-Treasurer, Ford Motor Company, Dearborn, Mich.

1981

C la s s C

Edward F. Brabec
Stanton R. Cook2
John Sagan1

1982
1983

—D e t r o it B r a n c h

A ppointed by Federal R eserve Bank
Thomas Ricketts3
James H. Duncan
Dean E. Richardson
Lawrence A. Johns

Chairman, President and Managing Officer, Standard Federal
Savings and Loan of Troy, Troy, Mich.
Chairman and Chief Executive Officer, First American Bank
Corporation, Kalamazoo, Mich.
Chairman, Manufacturers National Bank of Detroit, Detroit, Mich.
President, Isabella Bank and Trust, Mount Pleasant, Mich.

1981
1981
1982
1983

A ppointed by Board o f Governors
Herbert H. Dow
Russell G. Mawby
Karl D. Gregory3



Director and Secretary, The Dow Chemical Company, Midland,
Mich.
President and Trustee, W. K. Kellogg Foundation, Battle Creek,
Mich.
Professor of Economics and Management, Oakland University,
Rochester, Mich.

1981
1982
1983

D irectors o f F ederal R eserve Banks an d B ranches

D i s t r i c t 8— S t . L o u i s

Term
expires
Dec. 31

C la ss A
George M. Ryrie
Donald L. Hunt
Clarence C. Barksdale3

381

President, First National Bank & Trust Co., Alton, 111.
President, First National Bank of Marissa, Marissa, 111.
Chairman and Chief Executive Officer, First National Bank in
St. Louis, St. Louis, Mo.

1981
1982
1983

St. Louis, Mo.
President, Clothes Horse, Little Rock, Ark.
President, Dietz Forge Company, Memphis, Tenn.

1981
1982
1983

Vice Chairman of the Board Emeritus, Holiday Inns, Inc.,
Memphis, Tenn.
Chairman of the Board, General American Life Insurance Co.,
St. Louis, Mo.
Department of Agriculture, Western Kentucky University,
Bowling Green, Ky.

1981

C la ss B
Tom K. Smith, Jr.
Mary P. Holt
Frank A. Jones, Jr.3
C la ss C
William B. Walton2
Armand C. Stalnaker1
William H. Stroube

1982
1983

—L ittle R ock B ran ch

A p p o in te d by F ederal R e se rv e Bank

Gordon E. Parker
Shirley J. Pine
William H. Bowen
William H. Kennedy, Jr.3

President and Chief Executive Officer, The First National Bank of
El Dorado, El Dorado, Ark.
Speech Communication, University of Arkansas at Little Rock,
Little Rock, Ark.
President and Chief Executive Officer, The Commercial National
Bank of Little Rock, Little Rock, Ark.
Chairman of the Board, National Bank of Commerce of Pine Bluff,
Pine Bluff, Ark.

1981
1981
1982
1983

A p p o in te d by B o a rd o f G overnors

G. Larry Kelley
E. Ray Kemp, Jr.
Richard V. Warner3

President, Pickens-Bond Construction Co., Little Rock, Ark.
Vice Chairman of the Board and Chief Administrative Officer,
Dillard Department Stores, Inc., Little Rock, Ark.
Group Vice President, Wood Products Group, Potlatch
Corporation, Warren, Ark.

1981
1982
1983

—L o u i s v i l l e B r a n c h

A p p o in ted by F ed era l R e se rv e B ank

Fred B. Oney
William C. Ballard, Jr.
Howard Brenner
Frank B. Hower, Jr.3



President, The First National Bank of Carrollton, Carrollton, Ky.
Executive Vice President—Finance and Administration, Humana,
Inc., Louisville, Ky.
Vice Chairman of the Board, Tell City National Bank, Tell City,
Ind.
Chairman and Chief Executive Officer, Liberty National Bank and
Trust Company, Louisville, Ky.

1981
1981
1982
1983

382

Federal Reserve Bulletin □ April 1981

A ppointed by Board o f Governors

Sister Eileen M. Egan
James F. Thompson
Richard O. Donegan

Term
expires
Dec. 31

President, Spalding College, Louisville, Ky.
Professor of Economics, Murray State University, Murray, Ky.
Senior Vice President and Group Executive, General Electric
Company, Louisville, Ky.

1981
1982
1983

— M e m p h is B r a n c h
A ppointed by Federal R eserve Bank
Stallings Lipford
Bruce E. Campbell, Jr.
Earl L. McCarroll
Wayne W. Pyeatt3

President, First-Citizens National Bank of Dyersburg, Dyersburg,
Tenn.
Chairman of the Board and President, National Bank of Commerce,
Memphis, Tenn.
President, The Farmers Bank & Trust Co., Blytheville, Ark.
Independent Investor, Memphis, Tenn.

1981
1981
1982
1983

A ppointed by B oard o f Governors
Benjamin P. Pierce
Patricia W. Shaw
Donald B. Weis3

President, Tyrone Hydraulics, Inc., Corinth, Miss.
Senior Vice President and Assistant Secretary, Universal Life
Insurance Company, Memphis, Tenn.
President, Tamak Transportation Corp., West Memphis, Ark.

1981
1982

President, Flint Creek Valley Bank, Philipsburg, Mont.
Senior Vice President, The Fargo National Bank, Fargo, N.D.
President, Commercial National Bank of L ’Anse, L’Anse, Mich.

1981
1982
1983

Chairman and President, G. Heileman Brewing Company,
LaCrosse, Wis.
Chairman, Western Surety Company, Sioux Falls, S.D.
President and Chief Executive Officer, Blandin Paper Company,
Grand Rapids, Minn.

1981

1983

D i s t r i c t 9— M i n n e a p o l i s
C la s s A

Zane G. Murfitt
Henry N. Ness
Vern A. Marquardt3
C la s s B

Russell G. Cleary
Joe F. Kirby
Harold F. Zigmund3

1982
1983

C la s s C

William G. Phillips2
Sister Generose Gervais
Stephen F. Keating1



Chairman and Chief Executive Officer, International Multifoods,
Minneapolis, Minn.
Administrator, St. Mary’s Hospital, Rochester, Minn.
Minneapolis, Minn.

1981
1982
1983

D irectors o f F ederal R eserve Banks an d B ranches

— H e le n a B r a n c h
A p p o in te d by F ed era l R e se rv e B ank

Lynn D. Grobel
Jase O. Norsworthy
Harry W. Newlon

President, First National Bank of Glasgow, Glasgow, Mont.
President, The N.R.G. Company, Billings, Mont.
President, First National Bank, Bozeman, Mont.

383

Term
expires
Dec. 31
1981
1982
1982

A p p o in te d by B o a rd o f G overnors

Norris E. Hanford
Ernest B. Corrick3

Fort Benton, Mont.
Vice President and General Manager, Champion International
Corporation, Timberlands-Rocky Mountain Operation,
Missoula, Mo.

1981
1982

D i s t r i c t 10— K a n s a s C i t y
C la s s A

John D. Woods
Howard K. Loomis
Wayne D. Angell

Chairman and Chief Executive Officer, The Omaha National Bank,
Omaha, Nebr.
President, The Peoples Bank, Pratt, Kans.
President, Council Grove National Bank, Ottawa, Kans.

1981
1982
1983

C la s s B

Alan R. Sleeper
Charles C. Gates
James G. Harlow, Jr.

Alden, Kans.
President and Chairman of the Board, Gates Rubber Company,
Denver, Colo.
President and Chief Executive Officer, Oklahoma Gas and Electric
Co., Oklahoma City, Okla.

1981
1982
1983

C la s s C

Doris M. Drury2
Paul H. Henson1
John F. Anderson3

Professor of Economics, University of Denver, Englewood, Colo.
Chairman, United Telecommunications, Inc., Kansas City, Mo.
President and Chief Executive Officer, Farmland Industries, Inc.,
Kansas City, Mo.

1981
1982
1983

—D e n v e r B r a n c h
A p p o in te d by F ed era l R e se rv e B ank

Kenneth C. Naramore
Delano E. Scott
George S. Jenks3

President, Stockmen’s Bank & Trust Company, Gillette, Wyo.
President and Chairman, The Routt County National Bank of
Steamboat Springs, Steamboat Springs, Colo.
Chairman and Chief Executive Officer, Albuquerque National
Bank, Albuquerque, N.M.

1981
1982
1982

A p p o in ted by B o a rd o f G overnors

Caleb B. Hurtt
Alvin F. Grospiron




President and Corporate Vice President, Martin Marietta Aerospace
Corporation, Denver, Colo.
Denver, Colo.

1981
1982

384

Federal Reserve Bulletin □ April 1981

—O k l a h o m a C it y B r a n c h

A ppointed by Federal R eserve Bank
J. A. Maurer
Marcus R. Tower3
W. L. Stephenson, Jr.

Term
expires
Dec. 31

Chairman, Security National Bank & Trust Co., Duncan, Okla.
Vice Chairman of the Board, Chairman of the Credit Policy
Committee, Bank of Oklahoma, Tulsa, Okla.
Chairman and Chief Executive Officer, Central National Bank and
Trust Company, Enid, Okla.

1981
1982
1982

A ppointed by Board o f Governors
Christine H. Anthony
Samuel R. Noble

Oklahoma City, Okla.
Chairman of the Board, Noble Affiliates, Inc., Ardmore, Okla.

1981
1982

—O m a h a B r a n c h

A ppointed by Federal R eserve Bank
W. W. Cook, Jr.
Joe J. Huckfeldt
Donald J. Murphy3

President, Beatrice National Bank and Trust Company, Beatrice,
Nebr.
President, Gering National Bank and Trust Company,
Gering, Nebr.
Chairman and Chief Executive Officer, United States National Bank
of Omaha, Omaha, Nebr.

1981
1981
1982

A ppointed by Board o f Governors
Gretchen S. Pullen
Robert G. Lueder

Chairman of the Board, Swanson Enterprises, Inc., Omaha, Nebr.
President, Lueder Construction Company, Omaha, Nebr.

1981
1982

Chairman of the Board and Chief Executive Officer, Texas
American Bancshares Inc., Ft. Worth, Tex.
President and Chief Executive Officer, First National Bank in
Valley Mills, Valley Mills, Tex.
Chairman of the Board and President, The First National Bank of
Bell ville, Bell ville, Tex.

1981

Texas Tech University, Lubbock, Tex.
President, Texas Industries, Inc., Dallas, Tex.
Professor of Economics, Department of Economics and Finance,
Baylor University, Waco, Tex.

1981
1982
1983

Owner, Gerald D. Hines Interests, Houston, Tex.
Chairman of the Board and Chief Executive Officer, Scarbroughs
Stores, Austin, Tex.
Chairman of the Board, Dresser Industries, Inc., Dallas, Tex.

1981
1982

D i s t r i c t 11— D a l l a s
C la s s A

Lewis H. Bond
John P. Gilliam
Miles D. Wilson3

1982
1983

C la s s B

J. Wayland Bennett
Robert D. Rogers
Kent Gilbreath

C la s s C

Gerald D. Hines1
Margaret S. Wilson
John V. James2,3




1983

D irectors o f F ederal R eserve B anks an d B ranches

—E l P a s o B r a n c h

A p p o in ted by F ederal R e serve Bank

Arnold B. Peinado, Jr.
Ernest M. Schur
Arthur L. Gonzales
Claude E. Leyendecker

385

Term
expires
Dec. 31

Executive Vice President, AVC Development Corporation, El Paso,
Tex.
Chairman of the Executive Committee, The First National Bank of
Odessa, Odessa, Tex.
Chairman of the Board and Chief Executive Officer, First City
National Bank of El Paso, El Paso, Tex.
President, Mimbres Valley Bank, Deming, N. Mex.

1981
1981
1982
1983

A p p o in te d by B o a rd o f G overnors

Josefina A. Salas-Porras
A. J. Losee
Chester J. Kesey

Executive Director, BI Language Services, El Paso, Tex.
Shareholder, Losee, Carson, & Dickerson, Professional
Association, Artesia, N. Mex.
C. J. Kesey Enterprises, Pecos, Tex.

1981
1982
1983

—H o u s t o n B r a n c h

A p p o in te d by F ederal R e se rv e Bank

John T. Cater
Ralph E. David
Will E. Wilson
Raymond L. Britton

President, Bank of the Southwest National Association, Houston,
Tex.
President, First Freeport National Bank, Freeport, Tex.
President and Chief Executive Officer, First Security Bank of
Beaumont, N.A., Beaumont, Tex.
Labor Arbitrator & Professor of Law, University of Houston,
Houston, Tex.

1981
1981
1983
1983

A p p o in ted by B o a rd o f G overnors

George V. Smith, Sr.
Jerome L. Howard
Paul N. Howell3

President, Smith Pipe & Supply, Inc., Houston, Tex.
Chairman of the Board and Chief Executive Officer, Mortgage &
Trust, Inc., Houston, Tex.
Chairman and President, Howell Corporation, Houston, Tex.

1981
1982
1983

— Sa n A n t o n io B r a n c h

A p p o in ted by F ed era l R e se rv e Bank

John H. Holcomb
Charles E. Cheever, Jr.
George Brannies
John H. Garner

Owner-Manager, Progreso Haciendas Company, Progreso, Tex.
President, Broadway National Bank, San Antonio, Tex.
Chairman of the Board and President, The Mason National Bank,
Mason, Tex.
President and Chief Executive Officer, Corpus Christi National
Bank, Corpus Christi, Tex.

1981
1981
1982
1983

A p p o in te d by B o a rd o f G overnors

Carlos A. Zuniga
Pat Legan
Lawrence L. Crum



Zuniga Freight Services, Inc., Laredo, Tex.
Owner, Legan Properties, San Antonio, Tex.
Professor of Banking and Finance, The University of Texas at
Austin, Austin, Tex.

1981
1982
1983

386

Federal Reserve Bulletin □ April 1981

D i s t r i c t 12— S a n F r a n c i s c o

Term
expires
Dec. 31

C la s s A

Robert A. Young
Frederick G. Larkin, Jr.
Ole R. Mettler

Chairman and President, Northwest National Bank, Vancouver,
Wash.
Chairman of the Executive Committee, Security Pacific National
Bank, Los Angeles, Calif.
President and Chairman, Farmers & Merchants Bank of Central
California, Lodi, Calif.

1981
1982
1983

C la s s B

Malcolm T. Stamper
Clair L. Peck, Jnr.
J. R. Vaughan

President, The Boeing Company, Seattle, Wash.
Chairman of the Board, C. L. Peck Contractor, Los Angeles, Calif.
Senior Member, Richards, Watson, Dreyfuss & Gershon,
Los Angeles, Calif.

1981
1982
1983

President, Southern Pacific Company, San Francisco, Calif.
Chairman of the Board, Caroline Leonetti, Ltd., Beverly Hills,
Calif.
Chairman, President and Chief Executive Officer, Kaiser Aluminum
& Chemical Corp., Oakland, Calif.

1981
1982

C la s s C

Alan C. Furth
Caroline L. Ahmanson2
Cornell C. Maier1

1983

—L o s A n g e l e s B r a n c h

A ppointed by Federal R eserve Bank
Harvey J. Mitchell
Bram Goldsmith
Fred W. Andrew
James D. McMahon

President, First National Bank of San Diego County, Escondido,
Calif.
Chairman of the Board, City National Bank, Beverly Hills, Calif.
President and Chief Operating Officer, Superior Farming Company,
Bakersfield, Calif.
President, Santa Clarita National Bank, Valencia, Calif.

1981
1982
1982
1983

A ppointed by B oard o f Governors
Harvey A. Proctor
Togo W. Tanaka
Lola M. McAlpin-Grant

Chairman of the Board, Southern California Gas Company,
Los Angeles, Calif.
President, Gramercy Enterprises, Los Angeles, Calif.
Assistant Dean, Loyola Law School, Los Angeles, Calif.

1981
1982
1983

—P o r t l a n d B r a n c h

A ppointed by Federal R eserve Bank
Jack W. Gustavel
Robert F. Wallace
Merle G. Bryan
William S. Naito3



President and Chief Executive Officer, First National Bank of North
Idaho, Coeur d’Alene, Idaho
Chairman of the Board and President, First National Bank of
Oregon, Portland, Oreg.
President, Forest Grove National Bank, Forest Grove, Oreg.
Vice President, Norcrest China Company, Portland, Oreg.

1981
1981
1982
1983

D irectors o f F ederal R eserve Banks an d B ranches

A ppointed by B oard o f Governors

Jean Mater
Phillip W. Schneider
John C. Hampton3

387

Term
expires
Dec. 31

Vice President, Mater Engineering, Ltd., Corvallis, Oreg.
Former Northwest Regional Executive, National Wildlife
Federation, Portland, Oreg.
Chairman and President, Willamina Lumber Company, Portland,
Oreg.

1981
1982
1983

— Sa l t L a k e C it y B r a n c h

A ppointed b y Federal R eserve Bank
Spencer F. Eccles
David P. Gardner
Fred H. Stringham
Albert C. Gianoli3

President and Chief Operating Officer, First Security Corporation,
Salt Lake City, Utah
President, University of Utah, Salt Lake City, Utah
President, Valley Bank and Trust Company, South Salt Lake, Utah
President and Chairman of the Board, First National Bank of Ely,
Ely, Nev.

1981
1981
1982
1983

A ppointed by Board o f Governors
Wendell J. Ashton
Robert A. Erkins
J. L. Terteling

Publisher, Deseret News, Salt Lake City, Utah
Geothermal Agri/Aquaculturist, White Arrow Ranch, Bliss, Idaho
President, The Terteling Company, Inc., Boise, Idaho

1981
1982
1983

—S e a t t l e B r a n c h

A ppointed by Federal R eserve Bank
Douglas S. Gamble
C. M. Berry
Donald L. Mellish
Lonnie G. Bailey3

President and Chief Executive Officer, Pacific Gamble Robinson
Co., Seattle, Wash.
President, Seattle-First National Bank, Seattle, Wash.
Chairman of the Board, National Bank of Alaska, Anchorage,
Alaska
Executive Vice President, Farmers & Merchants Bank of Rockford,
Spokane, Wash.

1981
1981
1982
1983

A ppointed by Board o f Governors
George H. Weyerhaeuser
Merle D. Adlum
Virginia L. Parks




President and Chief Executive Officer, Weyerhaeuser Company,
Federal Way, Wash.
President, Maritime Trades Department, Puget Sound District
Council, AFL-CIO, Seattle, Wash.
Vice President for Finance and Treasurer, Seattle University,
Seattle, Wash.

1981
1982
1983

Al

Financial and Business Statistics
CONTENTS

D o m e s tic F in a n cia l S ta tis tic s

We e k l y R e p o r t in g C o m m e r c ia l B a n k s

A3 Monetary aggregates and interest rates
A4 Reserves of depository institutions, reserve,
bank credit
A5 Reserves and borrowings of depository
institutions
A6 Federal funds and repurchase agreements of
large member banks

Assets and liabilities
A 18 All reporting banks
A19 Banks with assets of $ 1 billion or more
A20 Banks in New York City
A21 Balance sheet memoranda
A22 Commercial and industrial loans
A23 Gross demand deposits of individuals,
partnerships, and corporations

P o l ic y I n s t r u m e n t s

Federal Reserve Bank interest rates
A8 Depository institutions reserve requirements
A9 Maximum interest rates payable on time and
savings deposits at federally insured institutions
A10 Federal Reserve open market transactions
Al

Federal R e serve Ba n k s

F in a n c ia l M a r k e t s

A23 Commercial paper and bankers dollar
acceptances outstanding
A24 Prime rate charged by banks on short-term
business loans
A24 Terms of lending at commercial banks
A25 Interest rates in money and capital markets
A26 Stock market—Selected statistics

A ll Condition and Federal Reserve note statements
A12 Maturity distribution of loan and security
holdings

A l l Savings institutions—Selected assets and

M o n e t a r y a n d C r e d it A g g r e g a te s

Fe d eral F in a n c e

A12 Bank debits and deposit turnover
A13 Money stock measures and components
A14 Aggregate reserves of depository institutions
and member bank deposits
A15 Loans and securities of all commercial banks

A28
A29
A30
A30

C o m m e r c ia l B a n k s

A16 Major nondeposit funds
A17 Assets and liabilities, last Wednesday-of-month
series




liabilities

Federal fiscal and financing operations
U.S. budget receipts and outlays
Federal debt subject to statutory limitation
Gross public debt of U.S. Treasury—Types and
ownership
A31 U.S. government marketable securities—
Ownership, by maturity
A32 U.S. government securities dealers—
Transactions, positions, and financing
A33 Federal and federally sponsored credit
agencies—Debt outstanding

A2

Federal Reserve Bulletin □ April 1981

S ec u r itie s M a r k e t s a n d
C o r po r a te F in a n c e

A34 New security issues—State and local
governments and corporations
A35 Open-end investment companies—Net sales and
asset position
A35 Corporate profits and their distribution
A36 Nonfinancial corporations—Assets and liabilities
A36 Total nonfarm business expenditures on new
plant and equipment
A37 Domestic finance companies—Assets and
liabilities; business credit

R e al E state

A53 U.S. reserve assets
A54 Foreign branches of U.S. banks—Balance sheet
data
A56 Selected U.S. liabilities to foreign official
institutions

R e po rted b y B a n k s in the U n it e d S tates

A56
A57
A59
A60

Liabilities to and claims on foreigners
Liabilities to foreigners
Banks’ own claims on foreigners
Banks’ own and domestic customers’ claims on
foreigners
A60 Banks’ own claims on unaffiliated foreigners
A61 Claims on foreign countries—Combined
domestic offices and foreign branches

A38 Mortgage markets
A39 Mortgage debt outstanding
S ecu r itie s H o l d in g s a n d Tr a n s a c t io n s
C o n s u m e r I n s t a l l m e n t C r e d it

A40 Total outstanding and net change
A41 Extensions and liquidations

A62 Marketable U.S. Treasury bonds and notes—
Foreign holdings and transactions
A62 Foreign official assets held at Federal Reserve
Banks
A63 Foreign transactions in securities

Flow of F unds

A42 Funds raised in U.S. credit markets
A43 Direct and indirect sources of funds to credit
markets

R epo rted b y N o n b a n k in g B u sin e ss
E n t e r pr ise s i n the U n it e d S tates

A64 Liabilities to unaffiliated foreigners
A65 Claims on unaffiliated foreigners

D o m e s tic N o n fin a n cia l S ta tis tic s
I n t e r e st a n d E x c h a n g e R ates

A44 Nonfinancial business activity—Selected
measures
A44 Output, capacity, and capacity utilization
A45 Labor force, employment, and unemployment
A46 Industrial production—Indexes and gross value
A48 Housing and construction
A49 Consumer and producer prices
A50 Gross national product and income
A51 Personal income and saving

In te rn a tio n a l S ta tis tic s
A52 U.S. international transactions—Summary
A53 U.S. foreign trade




A66 Discount rates of foreign central banks
A66 Foreign short-term interest rates
A66 Foreign exchange rates

A67 G u ide to T abu lar P r e s e n ta tio n ,
S ta tis tic a l R e le a se s , a n d S p e c ia l T ables

S p e c ia l T ables
A68 Survey of time and savings deposits at commer­
cial banks, January 31, 1981
A l l Commercial bank assets and liabilities, Decem­
ber 31, 1980
A78 Assets and liabilities of U.S. branches and agen­
cies of foreign banks, September 30, 1980

D om estic Financial Statistics

A3

1.10 MONETARY AGGREGATES AND INTEREST RATES
1980

1980

1981

Item
Ql

Q2

Q3

Q4

Oct.

Nov.

Dec.

Jan.

Feb.

Monetary and credit aggregates
(annual rates of change, seasonally adjusted in percent)1
Reserves o f depository institutions

1
2
3
4

Total.....................................................................
Required................................................................
Nonborrowed........................................................
Monetary base2 ....................................................

4.3
5.1
3.3
7.8

0.4
0.7
7.4
5.2

6.7
5.8
12.4
9.9

16.5
15.2
7.2

11.2

6.8
5.4
10.1

4.6
5.8
7.3

-4 .4

11.5
14.6
16.0
13.0
9.7

8.1
10.8
9.1
11.6
11.0'

11.8
10.8
6.6

4.9
27.5
0.7
-7 .2
9.9

15.0
1.7
17.1
23.4
11.5

11.7

14.7'

13.0'

Concepts of money and liquid assets3

5 M -1A ...................................................................
6 M-1B....................................................................
7 M -2.......................................................................
8 M -3.......................................................................
9 L............................................................................

8.0
8.6

-2.6
5.6
5.8
7.8

5.2

9.1

-1.0
-0 .7
8.2

-14.6
-3 .9
-12.4
2.3

-11.1

-9 .0
1.9
7.3
12.5'

-37.4
11.9'
5.7
12.9'
n.a.

-21.9
3.8
7.7
8.9
n.a.

18.3
-40.0
39.6
39.5

18.1
-54.9
36.3
49.9

-29.1
17.8
32.7

35.9
27.0
13.2
15.0

1.6
-0.1'

6.5
8.7
10.4
15.2
14.2

23.2
-8 .7
31.6
38.2
12.7

13.4
4.9

2.7

Time and savings deposits

Commercial banks
10 Total.................................................................
11 Savings4.............................................................
12 Small-denomination time5................................
13 Large-denomination time6................................
14 Thrift institutions7................................................
15 Total loans and securities at commercial banks8.

8.2

-19.8
28.9

11.1
2.6
9.7'

10.0

-21.7
33.1

10.6
4.8

0.0'

6.7'

1980

02

10.0
11.3
14.1
11.7

1980

1981

Q3

Q4

Ql

10.8
12.8'

17.6'

Nov.

-1.2'
15.7'

12.0

-1.0
8.1

1981
Dec.

Jan.

Feb.

Mar.

Interest rates (levels, percent per annum)
Short-term rates
Federal funds9 ...............................................................................
Discount window borrowing10.....................................................
Treasury bills (3-month market yield)11......................................
Commercial paper (3-month)1112...............................................

12.69
12.45
9.62
11.18

9.83
10.35
9.15
9.65

15.85
11.78
13.61
15.26

16.57
13.00
14.39
15.34

15.85
11.47
13.73
15.18

18.90
12.87
15.49
18.07

19.08
13.00
15.02
16.58

15.93
13.00
14.79
15.49

14.70
13.00
13.36
13.94

Long-term rates
Bonds
20 U.S. government13....................................................................
21 State and local government14...................................................
22 Aaa utility (new issue)15..........................................................
23 Conventional mortgages16............................................................

10.58
7.95
11.77
12.70

10.95
8.58
12.20
13.12

12.23
9.59
13.49
14.62

12.74
9.97
14.45
n.a.

12.44
9.56
13.85
14.70

12.49
10.11
14.51
15.05

12.29
9.66
14.12
14.95

12.98
10.10
14.90
15.10

12.94
10.16
14.71
n.a.

16
17
18
19

1. Unless otherwise noted, rates of change are calculated from average amounts
outstanding in preceding month or quarter. Growth rates for member bank reserves
are adjusted for discontinuities in series that result from changes in Regulations D
and M.
2. Includes reserve balances at Federal Reserve Banks in the current week plus
vault cash held two weeks earlier used to satisfy reserve requirements at all deposi­
tory institutions plus currency outside the U.S. Treasury, Federal Reserve Banks,
the vaults of depository institutions, and surplus vault cash at depository institu­
tions.
3. M-1A: Averages of daily figures for (1) demand deposits at all commercial
banks other than those due to domestic banks, the U.S. government, and foreign
banks and official institutions less cash items in the process of collection and Federal
Reserve float; and (2) currency outside the Treasury, Federal Reserve Banks, and
the vaults of commercial banks.
M-1B: M-l A plus negotiable order of withdrawal and automated transfer service
accounts at banks and thrift institutions, credit union share draft accounts, and
demand deposits at mutual savings banks.
M-2: M-1B plus savings and small-denomination time deposits at all depository
institutions, overnight repurchase agreements at commercial banks, overnight Eu­
rodollars held by U.S. residents other than banks at Caribbean branches of member
banks, and money market mutual fund shares.
M-3: M-2 plus large-denomination time deposits at all depository institutions
and term RPs at commercial banks and savings and loan associations.
L: M-3 plus other liquid assets such as term Eurodollars held by U.S. residents
other than banks, bankers acceptances, commercial paper, Treasury bills and other
liquid Treasury securities, and U.S. savings bonds.




4. Savings deposits exclude NOW and ATS accounts at commercial banks.
5. Small-denomination time deposits are those issued in amounts of less than

$100,000.

6. Large-denomination time deposits are those issued in amounts of $100,000 or
more.
7. Savings and loan associations, mutual savings banks, and credit unions.
8. Changes calculated from figures shown in table 1.23.
9. Averages of daily effective rates (average of the rates on a given date weighted
by the volume of transactions at those rates).
10. Rate for the Federal Reserve Bank of New York.
11. Quoted on a bank-discount basis.
12. Beginning Nov. 1977, unweighted average of offering rates quoted by at least
five dealers. Previously, most representative rate quoted By these dealers. Before
Nov. 1979, data shown are for 90- to 119-day maturity.
13. Market yields adjusted to a 20-year maturity by the U.S. Treasury.
14. Bond Buyer series for 20 issues of mixed quality.
15. Weighted averages of new publicly offered bonds rated Aaa, Aa, and A by
Moody’s Investors Service and adjusted to an Aaa basis. Federal Reserve com­
pilations.
16. Average rates on new commitments for conventional first mortgages on new
homes in primary markets, unweighted and rounded to nearest 5 basis points, from
Dept, of Housing and Urban Development.

A4

Domestic Financial Statistics □ April 1981

1.11 RESERVES OF DEPOSITORY INSTITUTIONS, RESERVE BANK CREDIT
Millions of dollars
M onthly averages of
daily figures

W eekly averages o f daily figures for week-ending

1981

1981

Factors

Jan.

Feb.

1 Reserve Bank credit outstanding.................

142,819

140,373

140,919

139,545

141,281

140,696

2 U .S . government securities1 .............................
3
Bought outright.................................................
4
H eld under repurchase agreem ents...........
5 Federal agency securities....................................
6
Bought outright.................................................
7
H eld under repurchase agreem ents...........

119,362
118,795
567
8,812
8,739
73

116.509
116.509

118,098
118,033
65
8,751
8,734
17

115.857
115.857

117.348
117.348

115.262
115.262

8.739
8.739

8.739
8.739

Mar.

Feb. 11

Feb. 18

Feb. 25

Mar. 4

Mar. 11

Mar. 18

Mar. 25

140,382

139,195

141,557

141,445

117.657
117.657

116.750
116.750

118.711
118.711

8.739
8.739

8.737
8.737

8.736
8.736

8.733
8.733

118,667
118,515
152
8,793
8,733
60

Supplying R eserve F unds

8
9
10
11

8.739
8.739

A cceptances............................................................
Loans.........................................................................
Float .........................................................................
Other Federal Reserve assets...........................

68
1,405
4,161
9,011

1,278
3,755
10,092

35
1,004
2,925
10,106

1,113
3,438
10,398

1,145
3,745
10,305

1,713
5,272
9,709

1,299
2,762
9,928

768
3,014
9,927

774
3,262
10,077

38
888
2,836
10,223

12 Gold s to c k ..............................................................
13 Special drawing rights certificate a cco u n t...
14 Treasury currency outstanding.........................

11,160
2,518
13,465

11,159
2,518
13,498

11,156
2,653
13,490

11,159
2,518
13,460

11,159
2,518
13,465

11,159
2,518
13,474

11,156
2,518
13,677

11,156
2,518
13,484

11,156
2,647
13,489

11,155
2,732
13,493

133,443
440

131,879
451

132,537
471

131,721
445

132,431
450

131,989
450

131,863
461

132,388
455

132,765
472

132,630
477

3,172
380
541

3,297
319
401

3,045
319
342

3,926
283
431

2,832
346
366

3,376
282
373

2,682
347
420

3,022
276
291

3,131
391
352

3,242
272
328

4,872
27,114

4,609
26,591

4,782
26,722

4,532
25,344

4,635
27,364

4,610
26,765

4,838
27,122

4,704
25,217

4,774
26,963

4,719
27,158

Mar. 11

Mar. 18

A bsorbing R eserve F unds
15 Currency in circulation........................................
16 Treasury cash holdings........................................
Deposits, other than member bank reserves,
with Federal Reserve Banks
17
T reasury..............................................................
18
F o reig n ................................................................
19
O ther.....................................................................
20 Other Federal Reserve liabilities and
ca p ita l..............................................................
21 Reserve accounts2.................................................

End-of-month figures

Wednesday figures

1981

1981

Jan.

Feb.

Mar.

Feb. 11

22 Reserve bank credit outstanding...................

139,328

139,199

141,272

143,200

142,868

143,683

140,712

139,094

143,791

145,343

23 U .S . government securities1 .............................
24
Bought outright.................................................
25
H eld under repurchase agreem ents...........
26 Federal agency securities....................................
27
Bought outright.................................................

117.169
117.169

117.621
117.621

117.146
117.146

117.913
117.913

116,622
116,662

115.812
115.812

116.271
116.271

119.561
119.561

8.739
8.739

8.737
8.737

118,043
117,666
377
8,779
8,722

8.739
8.739

8.739
8.739

8.737
8.737

8.737
8.737

8.733
8.733

8.733
8.733

119,606
118,541
1,065
9,151
8,733

Feb. 18

Feb. 25

Mar. 4

Mar. 25

Supplying R eserve F unds

28

H eld under repurchase agreem ents...........

57

29
30
31
32

A cceptances............................................................
Loans.........................................................................
F lo a t .........................................................................
Other Federal Reserve assets...........................

1,304
2,280
9,836

1,249
1,545
10,047

298
656
3,261
10,235

1,037
5,700
10,578

875
5,472
9,869

5,192
3,279
9,853

1 939
3.928
10296

569
3,497
10,024

1,912
3,350
10,235

267
3,229
2,743
10,347

33 Gold s to c k ..............................................................
34 Special drawing rights certificate a cco u n t...
35 Treasury currency outstanding.........................

11,159
2,518
13,886

11,156
2,518
13,939

11,154
2,818
13,509

11,159
2,518
13,464

11,159
2,518
13,471

11,158
2,518
13,477

11.156
2.518
13.483

11,156
2,518
13,489

11,156
2,668
13,489

11,155
2,818
13,502

131,113
451

131,833
464

133,435
481

132,461
445

132,846
450

132,006
450

132,186
461

133,051
455

132,994
474

133,031
476

3,038
573
515

2,284
422
337

3,032
474
313

3,468
267
424

3,729
241
364

3,433
232
397

3,099
274
518

2,645
231
317

2,858
261
392

2,609
244
369

4,579
26,621

4,737
26,734

4,855
26,164

4,708
28,568

4,486
27,900

4,449
29,869

5,050
26,281

4,568
24,990

4,621
29,504

4,670
31,419

418

A bsorbing R eserve Funds
36 Currency in circulation........................................
37 Treasury cash holdings........................................

Deposits, other than member bank reserves,
with Federal Reserve Banks
38
T reasury..............................................................
39
F o reig n ................................................................
40
O ther.....................................................................
41 Other Federal Reserve liabilities and
c a p ita l..............................................................
42 Reserve accounts2 .................................................

1. Includes securities loaned—fully guaranteed by U.S. government securities
pledged with Federal Reserve Banks—and excludes (if any) securities sold and
scheduled to be bought back under matched sale-purchase transactions.




2. Includes reserve balances of all depository institutions,
Note. For amounts of currency and coin held as reserves, see table 1.12.

M em ber Banks

A5

1.12 RESERVES AND BORROWINGS Depository Institutions
Millions of dollars
Monthly averages of daily figures
Reserve classification

1 Reserve balances with Reserve Banks1.......
2 Total vault cash (estimated)........................
3 Vault cash at institutions with required
reserve balances2................................
4 Vault cash equal to required reserves at
other institutions................................
5 Surplus vault cash at other institutions3 ..
6 Reserve balances + total vault cash4 .........
7 Reserve balances + total vault cash used
to satisfy reserve requirements4 5.........
8 Required reserves (estimated).....................
9 Excess reserve balances at Reserve Banks4-6 .
10 Total borrowings at Reserve Banks.........
11
Seasonal borrowings at Reserve Banks
Large commercial banks
12 Reserves held.................................................
13 Required....................................................
14 Excess........................................................
Small commercial banks
15 Reserves held...............................................
16 Required....................................................
17 Excess........................................................
U.S. agencies and branches
18 Reserves held................................................
19 Required....................................................
20 Excess........................................................
All other institutions
21 Reserves held.................................................
22 Required....................................................
23 Excess........................................................

July

Aug.

Sept.

Dec.

32,473

31,384

28,923

29,164

11,344

Feb.P

29,976

29,215
15,311

26,664
18,149

27,114
19,293

26,591
17,824

26,722
17,327

11,287

11,262

11,811

11,678

11,876

12,602

13,587

12,187

11,687

n.a.
n.a.
43,972

42,859

n.a.
n.a.
40,373

n.a.
n.a.
41,164

n.a.
n.a,
41,815

439
2,996
44,674

704
4,843
44.940

700
5,006
46,520

763
4,874
44,524

1,237
4,403
44,155

n.a.
43,578
394
1,473
82

n.a.
42,575
284
395
7

n.a.
40,071
302
659

n.a.
40,908
256
1,311
26

41,498
317
1,335
67

41,678
40,723
955
2,156
99

40,097
40,067
30
1,617
116

41,514
41,025
489
1,405

39,650
39,448

1,278
148

39,752
39,372
380
1,004
197

24.940
25,819
-8 7 9

26,267
26,605
-3 3 8

24,874
25,328
-4 5 4

24,772
25,145
-373

13,719
13,523
196

13,935
13,690
245

13,305
13,235
70

13,386
13,229
157

260
230
30

253
228
25

388
366

461
450

494
495

513
502

502
519
-1 7

605
548
57

Mar. 18 p

Mar. 25 p

10

-1

120

11

202

22

11

Weekly averages of daily figures for week ending
Jan. 21 p
24 Reserve balances with Reserve Banks1 . . . .
25 Total vault cash (estim a ted ).............................
26
Vault cash at institutions with required
reserve balances2......................................
27
Vault cash equal to required reserves at
other institutions......................................
28
Surplus vault cash at other institutions3 ..
29 Reserve balances + total vault cash4 ...........
30 Reserve balances + total vault cash used
to satisfy reserve requirements4-5 ...........
31 Required reserves (estim a te d ).........................
32 Excess reserve balances at Reserve Banks4-6 .
33
Total borrowings at Reserve B anks...........
34
Seasonal borrowings at Reserve Banks

Jan. 28 p

Feb. 4 p

Feb. U

p

Feb. 18 p

Feb. 2 5 p

Mar. 4 p

Mar. \ \ P

27,809
20,244

26,508
18,827

26,571
18,985

25,344
18,742

27,364
17,421

26,765
16,820

27,122
17,415

25,217
18,457

26,963
17,144

27,158
16,496

14,066

13,736

13,067

12,942

11,886

11,464

11,640

12,506

11,538

11,152

700
5,478
48,165

700
4,391
45,442

700
5,218
45,667

700
5,100
44,196

700
4,835
44,893

700
4,656
43,693

1,285
4,490
44,644

1,269
4,682
43,780

1,226
4,380
44,214

1,208
4,136
43,760

42,687
42,180
507
1,419
123

41,051
40,651
400
1,793
137

40,449
40,221
228

39,096
38,926
170
1,113
131

40,058
39,760
298
1,145
154

39,037
39,202
-165
1,713
160

40,154
39,479
675
1,299
176

39,098
38,868
230
768
185

39,834
39,491
343
774
193

39,624
39,464
160

27,380

25.881
26,222
-3 4 1

25,526
25,955
-4 2 9

24,830
25,031

-2 4 9

-201

25,241
25,573
-3 3 2

23,669
25,041
- 1 ,3 7 2

24,946
25,283
-3 3 7

24,595
24,831
-2 3 6

24,583
25,302
-7 1 9

24,348
25,066
-7 1 8

14,185
13,825
360

13,929
13,698
231

13,674
13,554

13,159
13,126
33

13,336
13,184
152

13,180
13,226
-4 6

13,376
13,206
170

13,224
13,027
197

13,315
13,191
124

13,492
13,387
105

252
223
29

244
231
13

226
226

0

261
237
24

465
461
4

482
440
42

490
463
27

470
455
15

470
446
24

444
460
-1 6

496
503
-7

473
500
-2 7

495
486
9

479
532
-5 3

510
542
-3 2

-10

485
495

625
527
98

587
555
32

589
552
37

626
551
75

1,201
125

Large commercial banks
35 Reserves held..........................................................
36
Required..............................................................
37
E x cess...................................................................

2 7 ,6 2 9

Small commercial banks
38 Reserves held..........................................................
39
Required..............................................................
40
E x c e ss...................................................................

U.S. agencies and branches
41 Reserves held..........................................................
42
Required..............................................................
43
E x cess...................................................................

120

888
200

All other institutions
44 Reserves held..........................................................
45
Required..............................................................
46
E x cess...................................................................

1. Includes all reserve balances of depository institutions.
2. Prior to Nov. 13, 1980, the figures shown reflect only the vault cash held by
member banks.
3. Total vault cash at institutions without required reserve balances less vault
cash equal to their required reserves.
4. Adjusted to include waivers of penalties for reserve deficiencies in accordance
with Board policy, effective Nov. 19, 1975, of permitting transitional relief on a
graduated basis over a 24-month period when a nonmember bank merged into an




existing member bank, or when a nonmember bank joins the Federal Reserve
System. For weeks for which figures are preliminary, figures by class of bank do
not add to total because adjusted data by class are not available.
5. Reserve balances with Federal Reserve Banks plus vault cash at institutions
with required reserve balances plus vault cash equal to required reserves at other
institutions.
6. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy
reserve requirements less required reserves. (This measure o f excess reserves is
comparable to the old excess reserve concept published historically.)

A6

Domestic Financial Statistics □ April 1981

1.13 FEDERAL FUNDS AND REPURCHASE AGREEMENTS Large Member Banks1
Averages of daily figures, in millions of dollars
1981, week ending Wednesday
By maturity and source
Jan. 28
One day and continuing contract
1 Commercial banks in United States................................
2 Other depository institutions, foreign banks and foreign
official institutions, and U.S. government agencies.
3 Nonbank securities dealers................................................
4 A llother............................................................................

Feb. 4

Feb. 11

Feb. 18

Feb. 25

Mar. 4

Mar. 11

Mar. 18

Mar. 25

44,416

45,728

48,974

48,056

47,407

49,384

53,647

49,104

47,575

14,227
2,768
17,325

13,884
2,272
17,846

15,093
2,234
17,143

15,244
2,574
17,153

14,672
2,251
19,179'’

14,060
2,759
20,076

15,595
2,887
19,514

15,548
2,179
19,180

15,700
2,101
18,763

All other maturities
5 Commercial banks in United States................................
6 Other depository institutions, foreign banks and foreign
official institutions, and U.S. government agencies.
7 Nonbank securities dealers................................................
8 A llother............................................................................

4,196

4,095

4,582

4,935

3,958

3,669

3,475

3,531

3,629

7,302
4,918
12,377

7,553
5,014
11,740

7,539
4,868
11,924

7,530
4,751
11,564

7,339
4,390
11,020'

7,430
4,146
10,681

7,552
4,314
10,938

7,664
4,144
10,581

7,975
4,556
10,236

Memo: Federal funds and resale agreement loans in ma­
turities of one day or continuing contract
9 Commercial banks in United States................................
10 Nonbank securities dealers................................................

11,356
2,547

13,967
2,869

14,038
2,686

17,221
2,918

14,409
3,066

15,554
2,719

15,117
2,651

17,058
3,258

16,006
3,042

1. Banks with assets of $1 billion or more as of December 31, 1977.




Policy Instruments

Al

1.14 FEDERAL RESERVE BANK INTEREST RATES
Percent per annum
Current and previous levels
Extended credit

Short-term
adjustment credit1
Federal Reserve
Bank

Seasonal credit

Emergency credit
to all others
under section 133

Special circumstances2

Rate on
3/31/81

Effective
date

Previous
rate

Rate on
3/31/81

Effective
date

Previous
rate

Rate on
3/31/81

Effective
date

Previous
rate

Rate on
3/31/81

Effective
date

Previous
rate

Boston...................
New Y ork.............
Philadelphia .........
Cleveland .............
Richmond.............
Atlanta .................

13
13
13
13
13
13

12/8/80
12/5/80
12/8/80
12/5/80
12/5/80
12/5/80

12
12
12
12
12
12

13
13
13
13
13
13

12/8/80
12/5/80
12/8/80
12/5/80
12/5/80
12/5/80

12
12
12
12
12
12

14
14
14
14
14
14

12/8/80
12/5/80
12/8/80
12/5/80
12/5/80
12/5/80

13
13
13
13
13
13

16
16
16
16
16
16

12/8/80
12/5/80
12/8/80
12/5/80
12/5/80
12/5/80

15
15
15
15
15
15

Chicago.................
St. L ou is...............
Minneapolis .........
Kansas City ..........
Dallas ...................
San Francisco.......

13
13
13
13
13
13

12/8/80
12/5/80
12/5/80
12/5/80
12/8/80
12/5/80

12
12
12
12
12
12

13
13
13
13
13
13

12/8/80
12/5/80
12/5/80
12/5/80
12/8/80
12/5/80

12
12
12
12
12
12

14
14
14
14
14
14

12/8/80
12/5/80
12/5/80
12/5/80
12/8/80
12/5/80

13
13
13
13
13
13

16
16
16
16
16
16

12/8/80
12/5/80
12/5/80
12/5/80
12/8/80
12/5/80

15
15
15
15
15
15

Range of rates in recent years4-5

Effective date

In effect Dec. 31, 1970 ...............
1971— Jan. 8 ...........................
1 5 ...........................
1 9 ...........................
2 2 ...........................
2 9 ...........................
Feb. 13 ...........................
1 9 ...........................
July 1 6 ...........................
2 3 ............. .............
Nov. 1 1 ..........................
1 9 ..........................
Dec. 1 3 ...........................
1 7 ...........................
2 4 ...........................
1973— Jan.
Feb.
Mar.
Apr.
May

1 5 ...........................
26 ...........................
2 ...........................
2 3 ...........................
4 ...........................
1 1 ...........................
1 8 ...........................
June 11 ...........................
1 5 ...........................
July 2 ...........................
Aug. 1 4 ...........................
2 3 ...........................

Range (or
level)—
All F.R.
Banks

F.R.
Bank
of
N.Y.

5^2
5V*-5Vz
5V4
5-5 W
5-51/4
5
43A-5
43/4-5
5
43/4-5

5^
5^4
51*
51/4
5
5
5
43/4
5
5
5

4VZr-43A
4Vz-43A
4Vz

43/4
4Vz
4Vi

5
5-5
5^2
5Vz-53/4
53/4
5^-6

5
5Vi
SVz
5Vz
53/4

43/4

43/4

6
6-6 Vz

6Vz
7
1-1 Yi
IVz

43/4

6
6
6 Vz

6Vz
1
iVz
iVz

1974— Apr. 2 5 .................
3 0 .................
Dec. 9 .................
1 6 .................
1975— Jan.

6 .................
1 0 .................

2 4 .................
5 .................
7 .................
Mar. 1 0 .................
1 4 .................
May 1 6 .................

Feb.

lVZr-8
8

F.R.
Bank
of
N.Y.
8
8

73A-8
73/4

73/4
73/4

1V4
1V4
1V4
63/4-7V4
63/4
6W63/4
6 V4
6-61/4

1 V4
1 V4
1 V4

63/4
63/4
61/4
61/4
6

1976— Jan. 1 9 .................
2 3 .................
Nov. 2 2 .................
2 6 .................

5 V2-6

5Vz
5V*-5Vz
5V4

5h
5h
51/4
51/4

1977— Aug. 3 0 .................
3 1 .................
Sept. 2 .................
Oct. 2 6 .................

5V^53/4
5V4-53/4
53/4

51/4
5%
5^4

6

6

9 .................
2 0 .................
May 1 1 .................
1 2 .................
July 3 .................

6-6 Vz

6 Vz
6Vz
1
1
1V4

1978— Jan.

1. Effective Dec. 5, 1980, a 3 percent surcharge was applied to short-term ad­
justment credit borrowings by institutions with deposits of $500 million or more
who borrowed in successive weeks or in more than 4 weeks in a calendar quarter.
2. Applicable to advances when exceptional circumstances or practices involve
only a particular depository institution as described in section 201.3(b) (2) of Reg­
ulation A.
3. Applicable to emergency advances to individuals, partnerships, and corpo­
rations as described in section 201.3(c) of Regulation A.




Range (or
level)—
All F.R.
Banks

Effective date

6Vz
6VZr-7
1
7-71/4

Effective date

1978— July
Aug.
Sept.
Oct.

1 0 .................
2 1 .................
2 2 .................
1 6 .................
2 0 .................
Nov. 1 .................
3 .................

1979— July 2 0 .................
Aug. 1 7 .................
2 0 .................
Sept. 1 9 .................
2 1 .................
Oct. 8 .................
1 0 .................
1980— Feb. 1 5 .................
1 9 .................
May 2 9 .................
3 0 .................
June 13 .................
1 6 .................
July 2 8 .................
2 9 .................
Sept. 2 6 .................
Nov. 1 7 .................
Dec. 5 .................
8 .................
In effect Mar. 31, 1981

Range (or
level)—
All F.R.
Banks

F.R.
Bank
of
N.Y.

1V4
V/4

71/4
73/4

8

8

8r-8Vz
8 Vi
8Vz-9Vz
9 Vz

8Vz
8Vz
9Vz
9Vz

11
11-12
12

10
10Vz
10Vz
11
11
12
12

12-13
13
12-13

13
13
13

12
11-12
11
10-11
10
11
12

12
11
11
10
10
11
12

12-13
13
13

13
13
13

10

lO-lOVi
lOVi
iofc -11

4. Rates for short-term adjustment credit. For description and earlier data see
the following publications of the Board of Governors: Banking and Monetary
Statistics, 1914-1941 and 1941-1970; Annual Statistical Digest, 1971-1975, 1972-1976,
1973-1977, and 1974-1978.
5. Twice in 1980, the Federal Reserve applied a surcharge to short-term ad­
justment credit borrowings by institutions with deposits of $500 million or more
who had borrowed in successive weeks or in more than 4 weeks in a calendar
quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7,
1980. On Nov. 17,1980, a 2 percent surcharge was adopted which was subsequently
raised to 3 percent on Dec. 5, 1980.

A8

Domestic Financial Statistics □ April 1981

1.15 DEPOSITORY INSTITUTIONS RESERVE REQUIREMENTS1
Percent of deposits

Type of deposit, and deposit interval
in millions of dollars

Member bank requirements
before implementation of the
Monetary Control Act

Type of deposit, and
deposit interval

Depository institution requirements
after implementation of the
Monetary Control Act5

Effective date

Net transaction accounts6

Net demand2

0-2......................
2-10....................
10-100 ..................
100-400 ..........................
Over 400 ........................

Effective date

7
9Vi

UVa
12-V4
16V4

12/30/76
12/30/76
12/30/76
12/30/76
12/30/76

Time and savings2 3

$0-$25 million ....................
Over $25 million ................

3

12

11/13/80
11/13/80

Nonpersonal time deposits1
By original maturity
Less than 4 years..........
4 years or more ............

11/13/80
11/13/80

Savings ..........................

Eurocurrency liabilities
Time4
0-5, by maturity
30-179 days ..........
180 days to 4 years
4 years or more . ..
Over 5, by maturity
30-179 days ..........
180 days to 4 years
4 years or more . . .

All ty p e s ........................

3

2Vi

1
6
2 Vi
1

12/12/74
1/8/76
10/30/75

1. For changes in reserve requirements beginning 1963, see Board’s Annual
Statistical Digest, 1971-1975 and for prior changes, see Board’s Annual Report for
1976, table 13. Under provisions of the Monetary Control Act, depository insti­
tutions include commercial banks, mutual savings banks, savings and loan asso­
ciations, credit unions, agencies and branches of foreign banks, and Edge Act
corporations.
2. (a) Requirement schedules are graduated, and each deposit interval applies
to that part of the deposits of each bank. Demand deposits subject to reserve
requirements were gross demand deposits minus cash items in process of collection
ana demand balances due from domestic banks.
(b) The Federal Reserve Act as amended through 1978 specified different ranges
of requirements for reserve city banks and for other banks. Reserve cities were
designated under a criterion adopted effective Nov. 9,1972, bv which a bank having
net demand deposits of more than $400 million was considered to have the character
of business of a reserve city bank. The presence of the head office of such a bank
constituted designation of that place as a reserve city. Cities in which there were
Federal Reserve Banks or branches were also reserve cities. Any banks having net
demand deposits of $400 million or less were considered to have the character of
business of banks outside of reserve cities and were permitted to maintain reserves
at ratios set for banks not in reserve cities.
(c) Effective Aug. 24, 1978, the Regulation M reserve requirements on net
balances due from domestic banks to their foreign branches and on deposits that
foreign branches lend to U.S residents were reduced to zero from 4 percent and
1 percent respectively. The Regulation D reserve requirement on borrowings from
unrelated banks abroad was also reduced to zero from 4 percent.
(d) Effective with the reserve computation period beginning Nov. 16, 1978,
domestic deposits of Edge corporations were subject to the same reserve require­
ments as deposits of member banks.
3. (a) Negotiable order of withdrawal (NOW) accounts and time deposits such
as Christmas and vacation club accounts were subject to the same requirements
as savings deposits.
(b) The average reserve requirement on savings and other time deposits before
implementation of the Monetary Control Act had to be at least 3 percent, the
minimum specified by law.
4. (a) Effective Nov. 2,1978, a supplementary reserve requirement of 2 percent
was imposed on large time deposits of $100,000 or more, obligations of affiliates,
and ineligible acceptances. This supplementary requirement was eliminated with
the maintenance period beginning July 24, 1980.




11/13/80

3/16/67
1/8/76
10/30/75

(b) Effective with the reserve maintenance period beginning Oct. 25, 1979, a
marginal reserve requirement of 8 percent was added to managed liabilities in
excess of a base amount. This marginal requirement was increased to 10 percent
beginning April 3, 1980, was decreased to 5 percent beginning June 12, 1980, and
was reduced to zero beginning July 24, 1980. Managed liabilities are defined as
large time deposits, Eurodollar borrowings, repurchase agreements against U.S.
government and federal agency securities, feaeral funds borrowings from nonmember institutions, and certain other obligations. In general, the base for the
marginal reserve requirement was originally the greater of (a) $100 million or (b)
the average amount of the managed liabilities held by a member bank, Edge
corporation, or family of U.S. branches and agencies of a foreign bank for the two
statement weeks ending Sept. 26,1979. For the computation period beginning Mar.
20,1980, the base was lowered by (a) 7 percent or (b) the decrease in an institution’s
U.S. office gross loans to foreigners and gross balances due from foreign offices
of other institutions between the base period (Sept. 13-26, 1979) and the week
ending Mar. 12,1980, whichever was greater. For the computation period beginning
May 29,1980, the base was increased by IVi percent above the base used to calculate
the marginal reserve in the statement week of May 14-21, 1980. In addition,
beginning Mar. 19, 1980, the base was reduced to the extent that foreign loans and
balances declined.
5. For existing nonmember banks and thrift institutions at the time of imple­
mentation of the Monetary Control Act, the phase-in period ends Sept. 3, 1987.
For existing member banks the phase-in perioa is about three years, depending on
whether their new reserve requirements are greater or less than the old require­
ments. For existing agencies and branches of foreign banks, the phase-in ends Aug.
12,1982. All new institutions will have a two-year phase-in beginning with the date
that they open for business.
6. Transaction accounts include all deposits on which the account holder is
permitted to make withdrawals by negotiable or transferable instruments, payment
orders of withdrawal, and telephone and preauthorized transfers (in excess of three
per month) for the purpose of making payments to third persons or others.
7. In general, nonpersonal time deposits are time deposits, including savings
deposits, that are not transaction accounts and in which the beneficial interest is
held by a depositor that is not a natural person. Also included are certain trans­
ferable time deposits held by natural persons, and certain obligations issued to
depository institution offices located outside the United States. For details, see
section 204.2 of Regulation D.

Note. Required reserves must be held in the form of deposits with Federal
Reserve Banks or vault cash. After implementation of the Monetary Control Act,
nonmembers m?v maintain reserves on a pass-through basis with certain approved
institutions.

Policy Instruments

A9

1.16 MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions
Percent per annum
Savings and loan associations and
mutual savings banks

Commercial banks
Type and maturity of deposit

In effect Mar. 31, 1981
Percent

1 Savings ............................................................................
2 Negotiable order of withdrawal accounts 2 .................
Time accounts 3
Fixed ceiling rates by maturity 4
3 14-89 d a y s* ................................................................
4 90 days to 1 year.........................................................
5 1 to 2 years 7 ..............................................................
6 2 to 2Vi years 7 ...........................................................
7 2Vi to 4 years 7 ...........................................................
8 4 to 6 years 8 ..............................................................
9 6 to 8 years 8 ..............................................................
10 8 years or more 8 .......................................................
11 Issued to governmental units (all maturities') 10 ___
12 Individual retirement accounts and Keogh (H.R. 10)
plans (3 years or more) 10’n ..............................
13
14

5^4
5Va

5Va

53/4

6Vl
IVi

IV a

73/4

Effective
date

Percent

7/1/73
1/1/74

5Vi

7/1/79

5V a

12/31/80

(6)
6
£lA
Or2

1/1/80

53/4
53/4

7/1/73
7/1/73
1/21/70
1/21/70
1/21/70

IV a

11/1/73

8/1/79
1/1/80
7/1/73
7/1/73
11/1/73
12/23/74
6/1/78
6/1/78

5
5Vi

6/1/78

1. July 1, 1973, for mutual savings banks; July 6, 1973, for savings and loan
associations.
2. For authorized states only, federally insured commercial banks, savings and
loan associations, cooperative banks, and mutual savings banks in Massachusetts
and New Hampshire were first permitted to offer negotiable order of withdrawal
(NOW) accounts on Jan. 1, 1974. Authorization to issue NOW accounts was ex­
tended to similar institutions throughout New England on Feb. 27, 1976, and in
New York State on Nov. 10, 1978, and in New Jersey on Dec. 28, 1979. Author­
ization to issue NOW accounts was extended to similar institutions nationwide
effective Dec. 31, 1980.
3. For exceptions with respect to certain foreign time deposits see the Federal
Reserve Bulletin for October 1962 (p. 1279), August 1965 (p. 1084), and Feb­
ruary 1968 (p. 167).
4. Effective Nov. 10, 1980, the minimum notice period for public unit accounts
at savings and loan associations was decreased to 14 days and the minimum maturity
period for time deposits at savings and loan associations in excess of $100,000 was
decreased to 14 days. Effective Oct. 30, 1980, the minimum maturity or notice
period for time deposits was decreased from 30 days to 14 days for mutual savings
banks.
5. Effective Oct. 30, 1980, the minimum maturity or notice period for time
deposits was decreased from 30 days to 14 days for commercial banks.
6. No separate account category.
7. No minimum denomination. Until July 1, 1979, a minimum of $1,000 was
required for savings and loan associations, except in areas where mutual savings
banks permitted lower minimum denominations. This restriction was removed for
deposits maturing in less than 1 year, effective Nov. 1, 1973.
8. No minimum denomination. Until July 1, 1979, minimum denomination was
$1,000 except for deposits representing funds contributed to an Individual Retire­
ment Account (IRA) or a Keogh (H.R. 10) plan established pursuant to the Internal
Revenue Code. The $1,000 minimum requirement was removed for such accounts
in December 1975 and November 1976 respectively.
9. Between July 1, 1973, and Oct. 31, 19/3, there was no ceiling for certificates
maturing in 4 years or more with minimum denominations of $1,000; however, the
amount of such certificates that an institution could issue was limited to 5 percent
of its total time and savings deposits. Sales in excess of that amount, as well as
certificates of less than $1,000, were limited to the 6Vi percent ceiling on time
deposits maturing in 2Vi years or more.
Effective Nov. 1, 1973, ceilings were reimposed on certificates maturing in 4
years or more with minimum denomination of $1,000. There is no limitation on
the amount of these certificates that banks can issue.
10. Accounts subject to fixed rate ceilings. See footnote 8 for minimum denom­
ination requirements.
11. Effective January 1, 1980, commercial banks are permitted to pay the same
rate as thrifts on IRA and Keogh accounts and accounts of governmental units
when such deposits are placed in the new 2Vt>-year or more variable ceiling certif­
icates or in 26-week money market certificates regardless of the level of the Treasury
bill rate.
12. Must have a maturity of exactly 26 weeks and a minimum denomination of
$10,000, and must be nonnegotiable.
13. Commercial banks, savings and loan associations, and mutual savings banks
were authorized to offer money market time deposits effective June 1, 1978. The
ceiling rate for commercial banks on money market time deposits entered into
before June 5,1980, is the discount rate (auction average) on most recently issued
six-month U.S. Treasury bills. Until Mar. 15,1979, the ceiling rate for savings and
loan associations and mutual savings banks was Va percentage point higher than
the rate for commercial banks. Beginning March 15,1979, the V4-percentage-point
interest differential is removed when the six-month Treasury bill rate is 9 percent
or more. The full differential is in effect when the six-month bill rate is 83/4 percent

5Vi

63/4
7Vi

(6)

73/4

12/23/74

73/4

7/6/77

(13)

(i3)

M

M

73/4
8
8
8
(13)
O4)

Previous maximum
Effective
date

Effective
date

Percent

5
5

(9)

In effect Mar. 31, 1981

Effective
date

7/1/79
12/31/80

Special variable ceiling rates by maturity
6-month money market time deposits '2 ...................
2Vi years or more .......................................................




Previous maximum

0)
0)
11/1/73
12/23/74
6/1/78
6/1/78

5V a
5

(6)

53/4
53/4
6
6
(9)
7Vi

(6)

0

1/1/74

0)

1/21/70
1/21/70
1/21/70
11/1/73

73/4

‘ 12/23/74

6/1/78

73/4

7/6/77

(13)

(13)

or less. Thrift institutions may pay a maximum 9 percent when the six-month bill
rate is between 83/4 and 9 percent. Also effective March 15, 1979, interest com­
pounding was prohibited on six-month money market time deposits at all offering
institutions. Tne maximum allowable rates in March for commercial banks and
thrift institutions were as follows: Mar. 5,14.383; Mar. 12,13.677; Mar. 19,12.346;
Mar. 26, 12.524. Effective for all six-month money market certificates issued be­
ginning June 5, 1980, the interest rate ceilings will be determined by the discount
rate (auction average) of most recently issued six-month U.S. Treasury bills as
follows:
Bill rate
Commercial bank ceiling
Thrift ceiling
8.75 and above
bill rate + Va percent
bill rate + Va percent
8.50 to 8.75
bill rate + Va percent
9.00
7.50 to 8.50
bill rate + Va percent
bill rate -I- Vi percent
7.25 to 7.50
7.75
bill rate + Vi percent
Below 7.25
7.75
7.75
The prohibition against compounding interest in these certificates continues.
14. Effective Jan. 1, 1980, commercial banks, savings and loan associations, and
mutual savings banks were authorized to offer variable-ceiling nonnegotiable time
deposits with no required minimum denomination and with maturities of 2Vi years
or more. The maximum rate for commercial banks is 3/4 percentage point below
the yield on 2^-year U.S. Treasury securities; the ceiling rate for thrift institutions
is Va percentage point higher than that for commercial banks. Effective Mar. 1,
1980, a temporary ceiling of 11^4 percent was placed on these accounts at com­
mercial banks; the temporary ceiling is 12 percent at savings and loan associations
and mutual savings banks. Effective for all variable ceiling nonnegotiable time
deposits with maturities of 2V i years or more issued beginning June 2, 1980, the
ceiling rates of interest will be determined as follows:
Treasury yield
Commercial bank ceiling
Thrift ceiling
12.00 and above
11.75
12.00
9.50 to 12.00
Treasury yield— Va percent
Treasury yield
Below 9.50
9.25
9.50
Interest may be compounded on these time deposits. The ceiling rates of interest
at which these accounts may be offered vary biweekly. The maximum allowable
rates in March for commercial banks were as follows: Mar. 5, 11.75; Mar. 19,
11.75. The maximum allowable rates in March for thrift institutions were as follows:
Mar. 5, 12.00; Mar. 19, 12.00.
15. Between July 1, 1979, and Dec. 31, 1979, commercial banks, savings and
loan associations, and mutual savings banks were authorized to offer variable ceiling
accounts with no required minimum denomination and with maturities of 4 years
or more. The maximum rate for commercial banks was W a percentage points below
the yield on 4-year U.S. Treasury securities; the ceiling rate for thrift institutions
was Va percentage point higher than that for commercial banks.
Note. Before Mar. 31, 1980, the maximum rates that could be paid by federally
insured commercial banks, mutual savings banks, and savings and loan associations
were established by the Board of Governors of the Federal Reserve System, the
Board of Directors of the Federal Deposit Insurance Corporation, and the Federal
Home Loan Bank Board under the provisions of 12 CFR 217, 329, and 526,
respectively. Title II of the Depository Institutions Deregulation and Monetary
Control Act of 1980 (P.L. 96-221) transferred the authority of the agencies to
establish maximum rates of interest payable on deposits to the Depository Insti­
tutions Deregulation Committee. The maximum rates on time deposits in denom­
inations of $100,000 or more with maturities of 30-89 days were suspended in June
1970; such deposits maturing in 90 days or more were suspended in May 1973. For
information regarding previous interest rate ceilings on all types of accounts, see
earlier issues of the Federal Reserve B ulletin, the Federal Home Loan Bank
Board Journal, and the Annual Report of the Federal Deposit Insurance Corpo­
ration.

A10

Domestic Financial Statistics □ April 1981

1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS

Millions of dollars
1980
Type of transaction

1979

1978

1981

1980
Aug.

Sept.

Nov.

Oct.

D ec.

Jan.

Feb.

U .S. G overnment S ecurities
Outright transactions (excluding matched salepurchase transactions)

Treasury bills
1
2
3
4

Gross p u rch ases...........................................................
Gross sa le s......................................................................
Exchange ........................................................................
R edem ptions.................................................................

16,628
13,725
0
2,033

15,998
6,855
0
2,900

7,668
7,331
0
3,389

0
47
0
0

200
237
0
0

991
531
0
700

0
600
0
500

1,331
0
0
49

1,100
3,865
0
1,000

0
357
0
0

1,184
0
- 5 ,1 7 0

3,203
0
17,339
-1 1 ,3 0 8
2,600

912
0
12,427
-1 8 ,2 5 1
0

137
0
2,423
- 3 ,1 3 4
0

0
0
589
-1 ,4 5 9
0

0
0
596
-4 2 0
0

0
0
2,368
-8 7 9
0

100
0
754
-9 6 7
0

0
0
462
0
0

0
23
990
- 1 ,9 3 6
0

2,148
0
-1 2 ,6 9 3
7,508

2,138
0
-8 ,9 0 9
13,412

541
0
-7 2 0
1,750

0
0
-5 8 9
1,459

0
0
-5 9 6
420

0
0
- 2 ,3 6 8
500

0
0
-754
967

0
0
-4 6 2
0

0
0
-9 9 0
1,211

523
0
- 4 ,6 4 6
2,181

703
0
-3 ,0 9 2
2,970

236
0
-1 ,7 0 3
1,000

0
0
0
0

0
0
0
0

0
0
0
220

0
0
0
0

0
0
0
0

0
0
0
400

454
0
0
1,619

811
0
-4 2 6
1,869

320
0
0
384

0
0
0
0

0
0
0
0

0
0
0
159

0
0
0
0

0
0
0
0

0
0
0
325

Others within 1 year1
5
6
7
8
9

Gross p u rch ases...........................................................
Gross sa les......................................................................
Maturity shift ...............................................................
Exchange ........................................................................
R edem ptions.................................................................

0

1 to 5 years
10
11
12
13

Gross p u rch ases...........................................................
Gross sa les......................................................................
Maturity shift ...............................................................
Exchange ........................................................................

4,188
0
|

-1 7 8

5 to 10 years
14
15
16
17

Gross p u rch ases...........................................................
Gross sa les......................................................................
Maturity shift ...............................................................
Exchange ........................................................................

1,526
0
|

2,803

Over 10 years
18
19
20
21

Gross pu rch ases...........................................................
Gross sa les......................................................................
Maturity s h i f t ...............................................................
Exchange ........................................................................

1,063
0
}

2,545

All maturities1
22
23
24

Gross p u rch ases...........................................................
Gross sa le s......................................................................
R edem ptions.................................................................

24,591
13,725
2,033

22,325
6,855
5,500

12,232
7,331
3,389

1,234
47
0

200
237
0

991
531
700

0
600
500

1,431
0
49

1,100
3,865
1,000

0
380
0

25
26

Matched transactions
Gross sa les......................................................................
Gross p u rch ases...........................................................

511,126
510,854

627,350
624,192

674,000
675,496

72,315
71,645

55,766
56,207

55,787
56,462

40,944
41,129

79,754
78,734

61,427
63,062

30,819
31,651

27
28

Repurchase agreements
Gross p u rch ases...........................................................
Gross sa les......................................................................

151,618
152,436

107,051
106,968

113,902
113,040

2,783
3,016

3,203
2,743

20,145
19,808

24,169
23,924

11,534
11,381

6,108
8,137

0
0

29 Net change in U .S. government securities..............

7,743

6,896

3,869

284

863

771

-6 7 0

516

- 4 ,1 5 9

452

F ederal A gency O bligations
30
31
32

Outright transactions
Gross p u rch ases...........................................................
Gross sa les......................................................................
R edem ptions.................................................................

301
173
235

853
399
134

668
0
145

0
0
*

0
0
91

0
0
21

0
0
0

0
0
22

0
0
0

0
0
3

33
34

Repurchase agreements
Gross p u rch a ses...........................................................
Gross sa les......................................................................

40,567
40,885

37,321
36,960

28,895
28,863

1,082
1,132

977
1,188

5,922
5,734

4,825
4,880

1,889
1,767

652
1,177

0
0

35 Net change in federal agency obligations................

-4 2 6

681

555

-5 0

-3 0 2

167

-5 5

99

-5 2 5

36 Outright transactions, n e t .............................................
37 Repurchase agreements, net ......................................

0
-3 6 6

0
116

0
73

0
-3 3

0
222

0
67

0
-4 3

0
253

0
-7 7 6

0

38 N et change in bankers acceptances...........................

-3 6 6

116

73

-3 3

222

67

-4 3

253

-7 7 6

0

6,951

7,693

4,497

784

1,005

-768

868

-5,460

450

-3

B ankers A cceptances

39 Total net change in System Open Market

Account ...........................................................

1. Both gross purchases and redemptions include special certificates created
when the Treasury borrows directly from the Federal Reserve, as follows (millions
of dollars): March 1979, 2,600.




202

Note. Sales, redemptions, and negative figures reduce holdings of the System
Open Market Account; all other figures increase such holdings. Details may not
add to totals because of rounding.

Reserve Banks

A ll

1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements
Millions of dollars

Feb. 25

Mar. 4

Wednesday

End of month

1981

1981

Mar. 11

Mar. 18

March

Mar. 25

Consolidated condition statement
A ssets
11,158
2,518
486

11,156
2,518
484

11,156
2,518
482

11,156
2,668
480

11,155
2,818
474

11,159
2,518
468

11,156
2,518
495

11,154
2,818
468

5,192
0

1,939
0

569
0

1,912
0

3,229
0

1,304
0

1,249
0

656
0

0

0

0

0

267

0

0

298

8,737
0

8,737
0

8,733
0

8,733
0

8,733
418

8,739
0

8,737
0

8,722
57

41,034
58,370
17,218
116,622
0
116,622

40,224
58,370
17,218
115.812
0
115.812

40,683
58,370
17,218
116.271
0
116.271

43,973
58,370
17,218
119.561
0
119.561

42,953
58,370
17,218
118,541
1,065
119,606

41,558
58,718
16,893
117.169
0
117.169

42,033
58,370
17,218
117.621
0
117.621

42,078
58,370
17,218
117,666
377
118,043

15 Total loans and securities.................................................

130,551

126,488

125,573

130,206

132,253

127,212

127,607

127,776

16 Cash items in process of collection................................
17 Bank premises..................................................................
Other assets
18 Denominated in foreign currencies2 ..........................
19 All other.......................................................................

9,220
461

10,689
461

9,544
461

9,893
464

8,613
466

7,865
458

7,473
461

11,107
465

7,088
2,304

7,088
2,747

7,131
2,432

7,143
2,628

7,148
2,733

5,993
3,385

7,086
2,500

7,060
2,710

20 Total assets.......................................................................

163,786

161,631

159,297

164,638

165,660

159,058

159,296

163,558

1 Gold certificate account...................................................
2 Special drawing rights certificate account......................
3 Coin..................................................................................
Loans
4 To depository institutions...........................................
5 Other.............................................................................
Acceptances
6 Held under repurchase agreements............................
Federal agency obligations
7 Bought outright............................................................
8 Held under repurchase agreements............................
U.S. government securities
Bought outright
9
Bills.................................. ......................................
10
Notes.........................................................................
11
Bonds.......................................................................
12
Total1 .......................................................................
13 Held under repurchase agreements............................
14 Total U.S. government securities............. ......................

Liabilities
21 Federal Reserve notes.....................................................
Deposits
Depository institutions.................................................
U.S. Treasury—General account................................
Foreign—Official accounts.........................................
Other.............................................................................

119,465

119,648

120,499

120,459

120,479

118,147

118,854

120,874

22
23
24
25

29,869
3,433
232
397

26,281
3,099
274
518

24,990
2,645
231
317

29,504
2,858
261
392

31,419
2,609
244
369

26,621
3,038
573
515

26,734
2,284
422
337

26,164
3,032
474
313

26 Total deposits....................................................................

33,931

30,172

28,183

33,015

34,641

30,747

29,777

29,983

27 Deferred availability cash items......................................
28 Other liabilities and accrued dividends3 ........................

5,941
1,755

6,761
2,362

6,047
1,860

6,543
1,906

5,870
1,959

5,585
1,957

5,928
1,958

7,846
1,952

29 Total liabilities..................................................................

161,092

158,943

156,589

161,923

162,949

156,436

156,517

160,655

30 Capital paid in..................................................................
31 Surplus.............................................................................
32 Other capital accounts.....................................................

1,221
1,203
270

1,222
1,203
263

1,226
1,203
279

1,227
1,203
285

1,227
1,203
281

1,208
1,203
211

1,222
1,203
354

1,227
1,203
473

33 Total liabilities and capital accounts..............................

163,786

161,631

159,297

164,638

165,660

159,058

159,296

163,558

34 Memo: Marketable U.S. government securities held in
custody for foreign and international account.......

93,977

97,078

97,279

97,949

98,309

92,756

94,658

101,214

Capital A ccounts

Federal Reserve note statement
35 Federal Reserve notes outstanding (issued to bank) . ..
36
Less-held by bank4 ...................................................
37
Federal Reserve notes, net......................................
Collateral for Federal Reserve notes
38 Gold certificate account...............................................
39 Special drawing rights certificate account...................
40 Other eligible assets.....................................................
41 U.S. government and agency securities.....................

141,361
21,896
119,465

141,494
21,846
119,648

141,762
21,263
120,499

142,005
21,546
120,459

142,063
21,584
120,479

140,717
22,570
118,147

141,297
22,443
118,854

142,182
21,308
120,874

11,158
2,518
0
105,789

11,156
2,518
0
105,974

11,156
2,518
0
106,825

11,156
2,668
0
106,635

11,155
2,818
0
106,506

11,159
2,518
0
104,470

11,156
2,518
0
105,180

11,154
2,818
0
106,902

42 Total collateral..................................................................

119,465

119,648

120,499

120,459

120,479

118,147

118,854

120,874

1. Includes securities loaned—fully guaranteed by U.S. government securities
pledged with Federal Reserve Banks—and excludes (if any) securities sold and
scheduled to be bought back under matched sale-purchase transactions.
2. Includes U.S. government securities held under repurchase agreement against
receipt of foreign currencies and foreign currencies warehoused for the U.S. Treas­
ury. Assets shown in this line are revalued monthly at market exchange rates.




3. Includes exchange-translation account reflecting the monthly revaluation at
market exchange rates of foreign-exchange commitments.
4. Beginning September 1980, Federal Reserve notes held by the Reserve Bank
are exempt from the collateral requirement.

A12

Domestic Financial Statistics □ April 1981

1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holdings
Millions of dollars

Type and maturity groupings
Feb. 25

Mar. 4

Wednesday

End of month

1981

1981

Mar. 11

Mar. 18

Mar. 25

Jan. 31

Feb. 28

Mar. 31

1 Loans—Total......................................................................
2 Within 15 days...............................................................
3 16 days to 90 days.........................................................
4 91 days to 1 y ea r...........................................................

5,192
5,163
29
0

1,939
1,846
93
0

569
475
94
0

1,912
1,874
38
0

3.229
3.208
21
0

1,304
1,255
49
0

1,249
1,199
50
0

656
616
40
0

5 Acceptances—Total...........................................................
6 Within 15 days...............................................................
7 16 days to 90 days.........................................................
8 91 days to 1 year ...........................................................

0
0
0
0

0
0
0
0

0
0
0
0

0
0
0
0

267
267
0
0

0
0
0
0

0
0
0
0

298
298
0
0

9 U.S. government securities—Total..................................
10 Within 15 days1..............................................................
11 16 days to 90 days.........................................................
12 91 days to 1 year ...........................................................
13 Over 1 year to 5 years...................................................
14 Over 5 years to 10 years...............................................
15 Over 10 years................................................................

116,622
5,096
21,510
26,125
34,809
13,755
15,327

115,812
2,768
21,752
27,519
34,691
13,755
15,327

116,271
4,692
20,486
27,321
34,691
13,754
15,327

119,561
7,484
20,205
28,100
34,691
13,754
15,327

119,606
7,141
21,680
27,014
34,690
13,754
15,327

117,169
2,125
24,904
27,279
34,505
13,354
15,002

117,621
3,101
23,245
27,385
34,809
13,754
15,327

118,043
2,265
22,904
29,020
34,772
13,755
15,327

16 Federal agency obligations—T otal..................................
17 Within 15 days1..............................................................
18 16 days to 90 days.........................................................
19 91 days to 1 year ...........................................................
20 Over 1 year to 5 years...................................................
21 Over 5 years to 10 years...............................................
22 Over 10 years................................................................

8,737
128
439
1,834
4,621
1,030
685

8,737
54
529
1,819
4,620
1,030
685

8,733
0
529
1,931
4,613
975
685

8,733
199
418
1,843
4,613
975
685

9,151
616
419
1,843
4,613
975
685

8,739
73
550
1,749
4,597
1,085
685

8,737
128
439
1,834
4,621
1,030
685

8,779
266
397
1,843
4,613
975
685

1. Holdings under repurchase agreements are classified as maturing within 15
days in accordance with maximum maturity of the agreements.

1.20 BANK DEBITS AND DEPOSIT TURNOVER
Debits are shown in billions of dollars, turnover as ratio of debits to deposit. Monthly data are at annual rates.
1980
Bank group, or type of customer

1977

1981

1979'

1978

Nov.

Oct.

Dec.

Jan.

Feb.

72,402.3
29,656.0
42,746.3

73,174.6
29,752.0
43,422.5

529.3
108.2
685.7
1,323.2

526.6
93.4
553.1
1,173.1

244.6
956.2
161.3

253.6
952.6
168.7

15.1
10.9
4.1
6.3

12.5
9.8
3.4
5.5

Debits to demand deposits1 (seasonally adjusted)
1 All commercial banks.......................................................
2 Major New York City banks............................................
3 Otherbanks........................................................................

34,322.8
13,860.6
20,462.2

40,297.8
15,008.7
25,289.1

49,775.0
18,512.7
31,262.3

65,346.7
26,035.0
39,311.7

67,621.4
26,821.8
40,799.6

69,950.2
27,352.2
42,598.0

Debits to savings deposits 2 (not seasonally adjusted)
4
5
6
7

ATS/NOW3........................................................................
Business4 ............................................................................
Others5...............................................................................
All accounts........................................................................

5.5
21.7
152.3
179.5

17.1
56.7
359.7
432.9

83.3
77.3
515.2
675.8

185.5
100.1
688.2
973.8

173.4
95.6
573.7
842.8

218.3
119.2
704.2
1,041.6

Demand deposit turnover1 (seasonally adjusted)
8 All commercial banks................................................. .
9 Major New York City banks......................................
10 Otherbanks.................................................................. .

129.2
503.0
85.9

139.4
541.9
96.8

163.5
646.2
113.3

202.1
799.5
135.2

211.6
842.2
141.8

222.7
865.8
150.8

Savings deposit turnover2 (not seasonally adjusted)
11
12
13
14

ATS/NOW3 ........................................................................
Business4 ............................................................................
Others5 ...............................................................................
All accounts........................................................................

6.5
4.1
1.5
1.7

1. Represents accounts of individuals, partnerships, and corporations, and of
states and political subdivisions.
2. Excludes special club accounts, such as Christmas and vacation clubs.
3. Accounts authorized for negotiable orders of withdrawal (NOW) and accounts
authorized for automatic transfer to demand deposits (ATS). ATS data availability
starts with December 1978.
4. Represents corporations and other profit-seeking organizations (excluding
commercial banks but including savings and loan associations, mutual savings banks,
credit unions, the Export-import Bank, and federally sponsored lending agencies).
5. Savings accounts other than NOW; business; and, from December 1978, ATS.




7.0
5.1
1.7
1.9

7.8
7.2
2.7
3.1

9.7
8.8
3.8
4.6

8.4
8.5
.3.2
4.0

10.4
11.3
4.1
5.1

Note. Historical data for the period 1970 through June 1977 have been estimated;
these estimates are based in part on the debits series for 233 SMSAs, which were
available through June 1977. Back data are available from Publications Services,
Division of Administrative Services, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551. Debits and turnover data for savings deposits
are not available before July 1977.

M onetary Aggregates

A 13

1.21 MONEY STOCK MEASURES AND COMPONENTS

Billions of dollars, averages of daily figures
Item

1977
Dec.

1978
Dec.

1979
Dec.

1980

1980
Dec.
Sept.

Oct.

1981
Nov.

Dec.

Jan.

Feb.

Seasonally adjusted
Measures1
1
2
3
4
5

M-l A ........................................................
M-1B........................................................
M -2..........................................................
M -3..........................................................
L2.............................................................

6
7
8
9
10

Currency..................................................
Demand deposits.....................................
Savings deposits.......................................
Small-denomination time deposits3 .......
Large-denomination time deposits4.......

328.4
332.6
1,294.1
1,460.3
1,720.2

351.6
360.1
1,401.5
1,623.6
1,934.9

369.8
386.9
1,526.0
1,775.5
2,151.8

88.7
239.7
486.4
454.9
145.2

97.6
253.9
475.8
533.8
194.7

106.3
263.5
417.0
656.2
219.0

384.8
411.9
1,673.4
1,957.9
2,372.0'

383.4
408.0
1,644.4
1,904.6
2,306.5

386.3
412.0
1,656.5
1,921.8
2,319.1

113.9
269.5
412.1
716.4
226.8

115.1
271.2
414.2
723.6
229.8

388.4
415.0
1,670.8
1,946.1
2,346.5

384.8
411.9
1,673.4
1,957.9
2,372.0'

372.8
416.1
1,681.4'
1,978.9'
n.a.

366.0
417.3
1,692.2
1,993.6
n.a.

116.6
256.2
377.2'
778.0'
258.8'

117.3
248.8
367.5
786.5
263.5

377.3
420.7
1,684.8'
1,984.3'
n.a.

358.2
409.4
1,685.3
1,986.6
n.a.

115.8
261.5
43.3
32.5'
80.7
374.9'
779.2'
260.7'

115.9
242.3
51.2
31.8
92.4
364.7
790.2
263.4

Components
116.4
268.4
393.6
763.2
248.0

115.8
272.6
407.8'
741.6
238.8

116.4
268.4
393.6
763.2
248.0

Not seasonally adjusted
Measures1
11
12
13
14
15

M-1A........................................................
M-1B........................................................
M -2..........................................................
M -3..........................................................
L2.............................................................

16
17
18
19
20
21
22
23

Currency..................................................
Demand deposits.....................................
Other checkable deposits5......................
Overnight RPs and Eurodollars6 ...........
Money market mutual funds...................
Savings deposits.......................................
Small-denomination time deposits3 .......
Large-denomination time deposits4.......

337.2
341.4
1,295.9
1,464.5
1,723.2

360.9
369.5
1,403.6
1,629.2
1,938.3

379.4
396.4
1,527.7
1,780.8
2,154.3

90.3
247.0
4.2
18.6
3.8
483.1
451.3
147.7

99.4
261.5
8.6
23.9
10.3
472.6
529.8
198.2

108.3
271.2
17.0
25.3
43.6
414.1
651.2
222.6

394.7
421.8
1,674.8
1,962.8
2,373.5'

382.6
407.2
1,642.3
1,902.3
2,296.2

388.0
413.7
1,656.9
1,923.1
2,318.0

391.1
417.7
1,665.7
1,942.1
2,344.7

113.7
268.9
24.6
32.9
78.2
412.4
714.9
226.5

114.9
273.1
25.7
32.5
77.4
412.9
723.7
230.7

116.6
274.5
26.6
32.6
77.0
405.8
735.9
240.0

394.7
421.8
1,674.8
1,962.8
2,373.5'

Components

1. Composition of the money stock measures is as follows:
M-1A: Averages of daily figures for (1) demand deposits at all commercial banks
other than those due to domestic banks, the U.S. government, and foreign banks
and official institutions less cash items in the process of collection and Federal
Reserve float; and (2) currency outside the Treasury, Federal Reserve Banks, and
the vaults of commercial banks.
M-1B: M-1A plus negotiable order of withdrawal (NOW) and automatic transfer
service (ATS^ accounts at banks and thrift institutions, credit union share draft
accounts, ana demand deposits at mutual savings banks.
M-2: M-1B plus savings and small-denomination time deposits at all depository
institutions, overnight repurchase agreements at commercial banks, overnight Eu­
rodollars held by U.S. residents other than banks at Caribbean branches of member
banks, and money market mutual fund shares.
M-3: M-2 plus large-denomination time deposits at all depository institutions
and term RPs at commercial banks and savings and loan associations.




118.5
276.2
27.1
32.2
75.8
390.9
757.4
251.5

118.5
276.2
27.1
32.2
75.8
390.9
757.4
251.5

2. L: M-3 plus other liquid assets such as term Eurodollars held by U.S. residents
other than banks, bankers acceptances, commercial paper, Treasury bills and other
liquid Treasury securities, and U.S. savings bonds.
3. Small-denomination time deposits are those issued in amounts of less than

$100,000.

4. Large-denomination time deposits are those issued in amounts of $100,000
or more and are net of the holdings of domestic banks, thrift institutions, the U.S.
government, money market mutual funds, and foreign banks and official institu­
tions.
5. Includes ATS and NOW balances at all institutions, credit union share draft
balances, and demand deposits at mutual savings banks.
6. Overnight (and continuing contract) RPs are those issued by commercial
banks to the nonbank public, and overnight Eurodollars are those issued by Ca­
ribbean branches of member banks to U.S. nonbank customers.
Note. Latest monthly and weekly figures are available from the Board’s H.6(508)
release. Back data are available from the Banking Section, Division of Research
and Statistics.

A14

Domestic Financial Statistics □ April 1981

1.22 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS1AND MEMBER BANK DEPOSITS
Billions of dollars, averages of daily figures
1980
Item

1978
Dec.

1979
Dec.

1981

1980
Dec.
Aug.

Sept.

Oct.

Nov.2

Dec.

Jan.

Feb.

Seasonally adjusted
1 Total reserves3............................................................................................

41.16

43.46

40.13

40.75

41.52

41.73

41.23

40.13

40.10

39.76

2 Nonborrowed reserves...............................................................................
3 Required reserves......................................................................................
4 Monetary base4 ..........................................................................................

40.29
40.93
142.2

41.98
43.13
153.7

38.44
39.58
159.8

40.09
40.45
158.2

40.21
41.26
159.5

40.42
41.52
160.9

39.17
40.73
160.7

38.44
39.58
159.8

38.70
39.56
160.1

38.45
39.58
160.6

5 Member bank deposits subject to reserve requirements5 ........................
6 Time and savings........................................................................................
Demand
7 Private.....................................................................................................
8 U.S. government....................................................................................

616.1
428.7

644.5
451.2

701.8
485.6

667.8
474.2

678.2
482.0

684.7
485.5

694.3
475.4

701.8
485.6

703.8
517.4

704.3
523.3

185.1
2.2

191.5
1.8

196.0
1.9

191.5
2.1

194.5
1.8

195.6
2.4

198.1
2.2

196.0
1.9

184.1
2.3

178.9
2.1

Not seasonally adjusted
9 Monetary base4 ..........................................................................................

144.6

156.2

162.5

158.0

159.0

160.6

161.5

162.5

161.0

158.9

10 Member bank deposits subject to reserve requirements5 ........................

624.0

652.7

710.3

662.5

675.6

684.2

694.6

710.3

712.6

701.5

11 Time and savings........................................................................................
Demand
12 Private.....................................................................................................
13 U.S. government....................................................................................

429.6

452.1

486.5

471.8

479.6

484.5

474.5

486.5

493.4

494.0

191.9
2.5

198.6
2.0

203.2
2.1

189.0
1.7

193.9
2.1

196.4
2.1

199.6
1.9

203.2
2.1

189.9
2.1

174.6
2.0

1. Reserves of depository institutions series reflect actual reserve requirement
rcentages with no adjustment to eliminate the effect of changes in Regulations
and M. Before Nov. 13, 1980, the date of implementation of the Monetary
Control Act, only the reserves of commercial banks that were members of the
Federal Reserve System were included in the series. Since that date the series
include the reserves of all depository institutions. In conjunction with the imple­
mentation of the act, required reserves of member banks were reduced about $4.3
billion and required reserves of other depository institutions were increased about
$1.4 billion. Effective Oct. 11, 1979, an 8 percentage point marginal reserve re­
quirement was imposed on “Managed Liabilities.” Tnis action raised required
reserves about $320 million. Effective Mar. 12, 1980, the 8 percentage point mar­
ginal reserve requirement was raised to 10 percentage points. In addition the base
upon which the marginal reserve requirement was calculated was reduced. This
action increased required reserves about $1.7 million in the week ending Apr. 2,
1980. Effective May 29, 1980, the marginal reserve requirement was reduced from
10 to 5 percentage points and the base upon which the marginal reserve requirement
was calculated was raised. This action reduced required reserves about $980 million
in the week ending June 18, 1980. Effective July 24, 1980, the 5 percent marginal
reserve requirement on managed liabilities and the 2 percent supplementary reserve
requirement against large time deposits were removed. These actions reduced
required reserves about $3.2 billion.




2. Reserve measures for November reflect increases in required reserves asso­
ciated with the reduction of weeke nd avoidance activities of a few large banks.
The reduction in these activities lead to essentially a one-time increase in the
average level of required reserves that need to be held for a given level of deposits
entering the money supply. In November, this increase in required reserves is
estimated at $550 to $600 million.
3. Reserve balances with Federal Reserve Banks plus vault cash at institutions
with required reserve balances plus vault cash equal to required reserves at other
institutions.
4. Includes reserve balances at Federal Reserve Banks in the current week plus
vault cash held two weeks earlier used to satisfy reserve requirements at all
depository institutions plus currency outside the U.S. Treasury, Federal Reserve
Banks, the vaults of depository institutions, and surplus vault cash at depository
institutions.
5. Includes total time and savings deposits and net demand deposits as defined
by Regulation D. Private demand deposits include all demand deposits except
those due to the U.S. government, less cash items in process of collection and
demand balances due from domestic: commercial banks.
Note. Latest monthly and weekly figures are available from the Board’s H.3(502)
statistical release. Back data and estimates of the impact on required reserves and
changes in reserve requirements are available from the Banking Section, Division
of Research and Statistics.

Monetary Aggregates

A15

1.23 LOANS AND SECURITIES All Commercial Banks'

Billions of dollars; averages of Wednesday figures
Category

1978
Dec.

1979
Dec.

1981

1980
Dec.
Jan.

Feb.

1978
Dec.

1 Total loans and securities2............................

1,013.43

1,134.64

1,237.3

1,253.5

93.3
173.23
746.93
246.15
210.5
164.7
19.3
27.16
28.2
7.5
43.63

93.8
191.8
848.94
291.I4
241.34
184.9
18.6
28.84
31.1
9.3
44.0

110.7
213.9
912.7
324.9
260.6
175.2
17.6
28.7
31.6
10.9
63.4

113.6
216.3
923.6
329.5
262.0
174.9
18.7
29.0
31.8
11.4
66.5

Memo:
13 Total loans and securities plus loans sold2 8 . 1,017.13

1,137.64 7

1,240.0

1,256.2

750.63
3.7

851.94'7
3.07

915.5
2.7

926.4
2.8

248.05,9
1.99
6.6
239.5
226.0
13.5
21.5

293.14-7
2.07
8.2
282.9
264.1
18.8
18.5

326.6
1.8
8.1
316.7
295.2
21.5
23.2

331.3
1.9
8.8
320.7
297.0
23.7
24.0




Feb.

Not seasonally adjusted

2 U.S. Treasury securities................................
3 Other securities.............................................
4 Total loans and leases2..................................
5 Commercial and industrial loans.............
6 Real estate loans.......................................
7 Loans to individuals..................................
8 Security loans.............................................
9 Loans to nonbank financial institutions ..
10 Agricultural loans.....................................
11 Lease financing receivables......................
12 All other loans...........................................

1. Includes domestically chartered banks; U.S. branches and agencies of foreign
banks, New York investment companies majority owned by foreign banks, and
Edge Act corporations owned by domestically chartered and foreign banks.
2. Excludes loans to commercial banks in the United States.
3. As of Dec. 31, 1978, total loans and securities were reduced by $0.1 billion.
“Other securities” were increased by $1.5 billion and total loans were reduced by
$1.6 billion largely as the result of reclassifications of certain tax-exempt obligations.
Most of the loan reduction was in “all other loans.”
4. As of Jan. 3, 1979, as the result of reclassifications, total loans and securities
and total loans were increased by $0.6 billion. Business loans were increased by
$0.4 billion and real estate loans by $0.5 billion. Nonbank financial loans were
reduced by $0.3 billion.
5. As of Dec. 31,1978, commercial and industrial loans were reduced $0.1 billion
as a result of reclassifications.
6. As of Dec. 31, 1978, nonbank financial loans were reduced $0.1 billion as
the result of reclassification.
7. As of Dec. 1, 1979, loans sold to affiliates were reduced $800 million and
commercial and industrial loans sold were reduced $700 million due to corrections
of two banks in New York City.
8. Loans sold are those sold outright to a bank’s own foreign branches, non­
consolidated nonbank affiliates of the bank, the bank’s holding company (if not a
bank), and nonconsolidated nonbank subsidiaries of the holding company.

1981

1980
Dec.
Jan.

Seasonally adjusted

14 Total loans plus loans sold2-8 ......................
15 Total loans sold to affiliates8 .......................
16 Commercial and industrial loans plus loans
sold8........................................................
17 Commercial and industrial loans sold8 . ..
18 Acceptances h eld .....................................
19 Other commercial and industrial loans...
20
To U.S. addressees10............................
21
To non-U.S. addressees........................
22 Loans to foreign banks................................

1979
Dec.

1,262.9H 1,022.53
115.3
217.2
930.311
331.511
264.711
174.3
18.2
28.911
32.2
11.9
68.8

94.5
173.93
754.23
247.75
210.9
165.6
20.6
27.66
28.1
7.5
46.23

1,145.04

1,248.9

1,253.8

1,250.911

95.0
192.6
857.44
293.04
241.84
186.0
19.8
29.34
30.9
9.3
47.3

112.1
214.8
922.1
327.0
261.1
176.2
18.8
29.2
31.4
10.9
67.5

114.6
215.8
923.3
328.5
262.0
174.9
19.0
28.7
31.4
11.4
67.5

116.1
216.1
918.711
327.811
263.611
172.7
17.8
28.311
31.6
11.9
65.1

1,265.7H 1,026.23

1,148.047

1,251.6

1,256.5

1,253.7H

933.111
2.8

757.93
3.7

860.44,7
3.07

924.8
2.7

926.1
2.8

921.511
2.8

333.411
1.9
9.0
322.5
297.6
24.9
24.6

249.65,9
1.99
7.3
240.4
225.9
14.5
23.2

295.04,7
2.07
9.1
283.9
264.1
19.8
20.0

328.8
1.8
8.8
318.2
295.2
23.0
24.9

330.3
1.9
9.2
319.2
294.9
24.3
24.9

329.711
1.9
8.9
319.0
294.1
24.9
23.1

9. As of Dec. 31, 1978, commercial and industrial loans sold outright were
increased $0.7 billion as the result of reclassifications, but $0.1 billion of this amount
was offset by a balance sheet reduction of $0.1 billion as noted above.
10. United States includes the 50 states and the District of Columbia.
11. Absorption of a nonbank affiliate by a large commercial bank added the
following to February figures: total loans and securities, $1.0 billion; total loans
and leases, $1.0 billion; commercial and industrial loans, $.5 billion; real estate
loans, $.1 billion; nonbank financial, $.1 billion.
Note. Data are prorated averages of Wednesday estimates for domestically char­
tered banks, based on weekly reports of a sample of domestically chartered banks
and quarterly reports of all domestically chartered banks. For foreign related in­
stitutions, data are averages of month-end estimates based on weekly reports from
large agencies and branches and quarterly reports from all agencies, branches,
investment companies, and Edge Act corporations engaged in banking. Data in
this release have been revised to reflect benchmarking to call reports through March
1980 for domestically chartered commercial banks and through December 1980 for
foreign related institutions. Back data are available from the Banking Section,
Division of Research and Statistics.

A16

Domestic Financial Statistics □ April 1981

1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1
Monthly averages, billions of dollars
Outstanding in 1980 and 1981

December outstanding
Source
1977

1
2
3
4
5
6

Total nondeposit funds
Seasonally adjusted2...............................................
Not seasonally adjusted.........................................
Federal funds, RPs, and other borrowings from
non-banks
Seasonally adjusted3...............................................
Not seasonally adjusted.........................................
Net balances due to foreign-related institutions, not
seasonally adjusted.............................................
Loans sold to affiliates, not seasonally adjusted4'5..

Memo
7 Domestically chartered banks net positions with
own foreign branches, not seasonally adjusted6
8 Gross due from balances.......................................
9 Gross due to balances...........................................
10 Foreign-related institutions net positions with di­
rectly related institutions, not seasonally
adjusted7..............................................................
11 Gross due from balances.......................................
12 Gross due to balances...........................................
13 Security RP borrowings, seasonally adjusted^.........
14 Not seasonally adjusted.........................................
15 U.S. Treasury demand balances, seasonally
adjusted9..........................................................
16 Not seasonally adjusted.........................................
17 Time deposits, $100,000 or more, seasonally
adjusted10........................................................
18 Not seasonally adjusted.........................................

1978

1979

June

July

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

61.5
60.1

91.2
90.2

121.1
119.8

115.9
116.0

114.6
118.6

109.4
112.3

114.0
114.5

119.9
120.8

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

58.4
57.0

80.7
79.7

90.0
88.7

98.5
98.7

100.9
104.9

96.2
99.1

102.2
102.7

105.7
106.6

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

-1.5
4.7

6.8
3.7

28.1
3.0

14.6
2.8

10.9
2.8

10.3
2.9

8.9
2.9

11.4
2.8

7.4
2.6

6.8
2.7

8.3
2.8

8.3
2.8

-12.5
21.1
8.6

-10.2
24.9
14.7

6.5
22.8
29.3

-5 .4
30.1
24.7

-8 .4
32.7
24.3

-10.3
35.8
25.5

-14.5
38.2
23.7

-12.9
38.3
25.5

-14.2
37.2
23.0

-14.7
37.5
22.7

-16.2
37.4
21.2

-14.8
36.4
21.6

10.9
10.7
21.7
36.0
35.1

17.0
14.3
31.3
44.8
43.6

21.6
28.9
50.5
49.2
47.9

19.9
28.5
48.4
49.0
48.8

19.3
30.8
50.1
55.0
54.7

20.6
30.9
51.6
57.5
59.1

23.3
30.3
53.6
56.2
58.7

24.3
30.8
55.2
59.7
59.5

21.6
32.4
54.0
58.8
60.9

21.5
33.9
55.4
63.4
61.7

24.5
31.4
55.9
68.7
65.0

23.1
31.7
54.8
67.0
65.2

4.4
5.1

8.7
10.3

8.1
9.7

8.6
10.0

10.9
9.3

11.8
9.3

12.6
14.2

14.0
12.7

6.9
6.6

7.6
9.0

8.0
7.9

7.8
8.1

162.0
165.4

213.0
217.9

227.6
232.8

237.6
235.5

234.0
230.0

234.4
232.1

238.8
236.7

241.6
241.1

249.3
250.8

257.5
263.4

268.2
272.8

275.5
276.8

1. Commercial banks are those in the 50 states and the District of Columbia
with national or state charters plus agencies and branches of foreign banks, New
York investment companies majority owned by foreign banks, and Edge Act cor­
porations owned by domestically chartered and foreign banks.
2. Includes seasonally adjusted federal funds, RPs, and other borrowings from
nonbanks and not seasonally adjusted net Eurodollars and loans to affiliates. In­
cludes averages of Wednesday data for domestically chartered banks and averages
of current and previous month-end data for foreign-related institutions.
3. Other borrowings are borrowings on any instrument, such as a promissory
note or due bill, given for the purpose of borrowing money for the banking business.
This includes borrowings from Federal Reserve Banks and from foreign banks,
term federal funds, overdrawn due from bank balances, loan RPs, and participa­
tions in pooled loans. Includes averages of daily figures for member banks and
averages of current and previous month-end data for foreign-related institutions.
4. Loans initially booked by the bank and later sold to affiliates that are still
held by affiliates. Averages of Wednesday data.
5. As of Dec. 1, 1979, loans sold to affiliates were reduced $800 million due to
corrections of two New York City banks.




Aug.

6. Averages of daily figures for member and nonmember banks. Before October
1980 nonmember banks were interpolated from quarterly call report data.
7. Includes averages of current and: previous month-end data until August 1979;
beginning September 1979 averages of daily data.
8. Based on daily average data reported by 122 large banks beginning February
1980 and 46 banks before February 1980.
9. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at
commercial banks. Averages of daily data.
10. Averages of Wednesday figures.
Note. Data have been revised to reflect benchmarking to call reports through
March 1980 for domestically chartered banks and through December 1980 for
foreign-related institutions. Back data are available from the Banking Section,
Division of Research and Statistics.

Com m ercial Banks

A ll

1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series

Billions of dollars except for number of banks
1980

1981

Account
May

June

July

Aug.

Sept.

Oct.

Nov.

D ec.

Jan.

Feb.

Mar.

1 Loans and investm ents, excluding
in terb an k ..................................................
2 Loans, excluding interbank .......................
3
Commercial and in d u strial....................
4
O t h e r .............................................................
5 U.S. Treasury se c u r itie s .............................
6 Other securities................................................

1,087.0
792.5
256.6
535.9
94.8
199.8

1,090.5
793.2
256.9
536.4
96.2
201.1

1,095.3
793.4
257.1
536.3
98.7
203.3

1,108.5
801.9
259.5
542.4
101.4
205.2

1,117.9
809.1
263.9
545.2
103.2
205.6

1,134.8
821.6
269.0
552.6
104.4
208.9

1,150.8
832.8
275.7
557.1
107.1
210.9

1,177.1
851.4
281.5
569.9
111.2
214.6

1,166.0
840.2
277.6
562.6
112.0
213.8

1,167.0
839.0
276.3
562.7
113.7
214.3

1,169.7
840.8
277.7
563.1
112.8
216.2

7 Cash assets, t o t a l ...........................................
8
Currency and c o i n ....................................
9
Reserves with Federal Reserve Banks
10
Balances with depository institutions .
11
Cash items in process of collection . . .

172.7
17.7
37.9
48.3
68.9

150.6
17.3
29.5
45.8
58.1

154.3
17.5
32.2
45.0
59.6

148.8
18.2
29.0
45.9
55.8

156.6
17.8
31.1
46.8
60.9

155.9
18.3
31.7
47.2
58.8

175.6
16.9
30.4
56.1
72.2

194.2
19.9
28.2
63.0
83.0

159.3
18.7
25.2
54.9
60.5

165.9
18.6
30.4
54.6
62.3

166.4
17.8
31.7
53.6
63.3

D omestically C hartered
C ommercial B a nks 1

12 Other assets2 ............................................

140.1

143.8

143.5

150.3

154.4

151.3

151.3

165.6

155.8

160.1

164.9

13 Total assets/total liabilities and capital ..

1,399.8

1,384.9

1393.1

1,407.7

1,428.9

1,442.1

1,477.7

1,537.0

1,481.0

1,493.0

1,501.1

14 D e p o sits ...................................................
15
D e m a n d ........................................................
16
S avin gs...........................................................
17
T im e ...............................................................

1,060.9
370.3
192.4
498.2

1,048.1
358.1
197.7
492.4

1,053.1
363.5
205.5
484.2

1,062.8
363.4
208.5
490.9

1,077.2
369.7
209.1
498.5

1,092.9
375.7
210.9
506.2

1,126.2
393.0
209.5
523.7

1,187.4
432.2
201.3
553.8

1,128.7
351.1
211.9
565.7

1,132.0
345.5
214.3
572.3

1,136.7
345.4
220.6
570.7

18 B o rro w in g s......................................................
19 Other liabilities................................................
20 Residual (assets less lia b ilitie s )................

152.6
77.9
108.5

151.0
75.9
109.8

157.0
74.0
109.0

158.5
75.4
111.0

163.7
75.6
112.3

161.7
74.7
112.7

157.3
78.1
116.1

156.4
79.0
114.2

156.4
76.7
119.3

163.2
80.3
117.5

163.7
80.7
120.0

M em o :
21 U.S. Treasury note balances included in
borrowing..................................................
22 Number of b a n k s ...........................................

5.2
14,639

13.3
14,646

7.6
14,658

8.7
14,666

15.7
14,678

11.5
14,760

4.4
14,692

10.2
14,693

9.5
14,689

8.5
14,696

10.2
14,701

23 Loans and investments, excluding
in terb an k ..................................................
24 Loans, excluding in te r b a n k .......................
25
Commercial and in d u strial....................
26
O t h e r .............................................................
27 U.S. Treasury se c u r itie s ..............................
28 Other securities................................................

1,154.9
856.9
298.7
558.3
96.7
201.3

1,160.9
860.2
297.6
562.5
98.3
202.5

1,195.2
882.5
308.1
574.4
105.6
207.2

1,262.3
932.5
330.6
601.9
113.7
216.3

29 Cash assets, t o t a l ...........................................
30
Currency and c o i n ....................................
31
Reserves with Federal Reserve Banks
32
Balances with depository institutions .
33
Cash items in process ot collection . ..

190.9
17.7
38.7
64.0
70.5

172.2
17.3
30.3
65.0
59.7

179.8
17.8
31.7
67.8
62.5

218.6
20.7
28.2
84.9
84.7

n ,a.

n .a.

n .a.

A ll C ommercial B anking
Institutions3

n. a.

n. a.

n .a.

n .a.

34 Other assets2 ....................................................

186.6

191.0

204.1

221.7

35 Total assets/total liabilities and capital ..

1,532.4

1,524.2

1,579.2

1,702.7

36 D e p o s its .............................................................
37
D e m a n d .........................................................
38
S avin gs...........................................................
39
T im e .....................................................

1,101.1
388.1
192.7
520.3

1,091.9
379.0
198.1
514.8

1,124.5
390.9
209.5
524.1

1,239.9
453.6
201.6
584.7

40 B o rro w in g s......................................................
41 Other liabilities................................................
42 Residual (assets less lia b ilitie s)................

194.7
125.8
110.9

197.6
123.3
111.4

211.0
129.8
113.9

211.5
135.5
115.8

M emo :
43 U.S. Treasury note balances included in
borrowing..................................................
44 Number of b a n k s ...........................................

5.2
15,016

13.3
15,019

15.7
15,069

10.2
15,108

1. Domestically chartered commercial banks include all commercial banks in the
United States except branches of foreign banks; included are member and non­
member banks, stock savings banks, and nondeposit trust companies.
2. Other assets include loans to U.S. commercial banks.
3. Commercial banking institutions include domestically chartered commercial
banks, branches and agencies of foreign banks, Edge Act and Agreement corpo­
rations, and New York State foreign investment corporations.




Note. Figures are partly estimated. They include all bank-premises subsidiaries
and other significant majority-owned domestic subsidiaries. Data for domestically
chartered commercial banks are for the last Wednesday of the month; data for
other banking institutions are for last Wednesday except at end of quarter, when
they are for the last day of the month.

A18
1.2 6

Domestic Financial Statistics □ April 1981
A L L L A R G E W E E K L Y R E P O R T I N G C O M M E R C I A L B A N K S w ith D o m e s tic A s s e ts o f $750 M illio n o r M o r e o n
D e c e m b e r 3 1 , 19 7 7 , A s s e ts a n d L ia b ilitie s
Millions of dollars, W ednesday figures

Account
Jan. 28

Feb. 4

Feb. 11

Feb. 18

Feb. 25p

Mar. 4 p

Mar. U p

Mar. 18p

Mar. 25p

1 Cash items in process of collection..............................
2 Demand deposits due from banks in the United
States .....................................................................
3 All other cash and due from depository institutions..

49,625

53,357

49,107

62,715

50,670

57,373

53,554

55,444

52,064

20,344
31,036

19,378
31,582

19,609
33,981

22,433
33,562

19,921
35,153

20,717
30,543

19,906
30,774

21,752
33.986

19,620
35,225

4 Total loans and securities................................................

553,248

557,235

550,895

556,847

553,710

558,629

553,421

555,505

551,056

39,769
6.331
33,438
9,178
20,790
3,469
77.579
2,524
75,056
16,124
56,075
7,248
48,828
2.857

41,122
7,504
33,618
9,342
20,812
3,463
78,255
3,561
74,694
16,143
55,776
7,213
48,563
2.776

40,209
6,477
33.732
9,442
20.836
3.453
77,173
2,608
74,565
16,125
55,643
7,059
48,585
2,796

40,572
6,723
33,849
9,192
21,149
3,508
76,992
2,412
74,579
16,165
55,616
7,050
48,566
2,798

40,816
7,089
33,726
9,207
20,958
3,561
77,386
2,811
74,575
16,111
55,673
7,091
48,582
2,790

42,629
8,557
34,072
9,051
21,359
3,662
78,043
3,389
74,654
16,167
55,690
7,130
48,560
2,797

41,986
7,843
34,143
9,254
21,236
3,654
77,462
2,860
74,601
16,109
55,731
7,208
48,522
2,761

41,233
7,429
33,804
9,178
21,012
3,614
77,417
2,882
74,535
16,072
55,670
7,160
48,510
2.793

39,577
6,017
33,561
9,083
20,846
3,631
77,360
2,735
74,626
16,104
55,711
7,229
48,482
2,810

5
6
7
8
9
10
11
12
13
14
15
16
17
18

Securities
U.S. Treasury securities...............................................
Trading account........................ ...............................
Investment account, by m aturity............................
One year or less.....................................................
Over one through five years................................
Over five years.....................................................
Other securities............................................................
Trading account...................................................... .
Investment account..................................................
U.S. government agencies....................................
States and political subdivision, by maturity . . . .
One year or less.................................................
Over one y e a r...................................................
Other bonds, corporate stocks and securities... .

Loans
19 Federal funds sold1.......................................................
20 To commercial banks...............................................
21 To nonbank brokers and dealers in securities.......
22 To others...................................................................
23 Other loans, gross........................................................
24 Commercial and industrial.......................................
25
Bankers acceptances and commercial paper.......
26
All o th er................................................................
27
U.S. addressees.................................................
28
Non-U.S. addressees.........................................
29 Real e sta te ...................................................................
30 To individuals for personal expenditures...............
To financial institutions
31
Commercial banks in the United States.............
32
Banks in foreign countries....................................
33
Sales finance, personal finance companies, etc ..
34
Other financial institutions....................................
35 To nonbank brokers and dealers in securities.......
36 To others for purchasing and carrying securities2 ..
37 To finance agricultural.............................................
38 All o th er....................................................................
39 Less; Unearned income...............................................
40
Loan loss reserve...............................................
41 Other loans, net............................................................
42 Lease financing receivables.........................................
43 All other assets............................................................

26.785
18,175
6,366
2,244
421,614
171,297
4,188
167,109
159,709
7.400
112,891
71.928

27,663
19,661
5,873
2,129
422,688
171,826
4,212
167,614
160,447
7,167
113,125
71,640

26,273
18,506
6.098
1,669
419,779
170,038
3,564
166,474
159.291
7,183
113,314
71,346

29,636
21,857
6,120
1,659
422,239
170,221
4,170
166,052
158,912
7,139
113,543
71,299

28,341
20,498
5,924
1,920
419,746
169.410
3,682
165,729
158,695
7,033
113,625
71,150

28,608
20,613
6,224
1,771
421,962
169,932
3,865
166,067
159,070
6,997
113,748
71,048

28,646
21,181
5,643
1,822
418,000
168,915
3,658
165,257
158,297
6,960
113,927
70,867

30.050
21,589
6,487
1,973
419,520
169,584
3.544
166,040
158,974
7,066
114,146
70,808

27,672
19,996
5,947
1,729
419,104
169,684
3,668
166,016
158,876
7,141
114,230
70,793

4.219
9,034
9,972
15,295
5,562
2.198
5,416
13.803
6,751
5,749
409,115
9,624
82,030

3,897
9,053
9,922
15,377
5,603
2,207
5.425
14,614
6,647
5,846
410,195
9.930
83,738

4,349
8.612
9.835
15.249
5,226
2,222
5,383
14,205
6,666
5,874
407,240
9,956
87,446

4,629
9,216
9,881
15,316
5,349
2,272
5,378
15,134
6,692
5,899
409,647
9,962
82,869

4,380
8,411
9,764
15.125
5,926
2,270
5,423
14,263
6,661
5,918
407.168
9,986
85.057

4,537
8,637
9,675
15,176
6,385
2,247
5,432
15,145
6,589
6,024
409,349
10,025
88,167

4,418
8,554
9,414
14,956
5,341
2,269
5,426
13,912
6,626
6,046
405,327
10,033
89,840

4,579
8,396
9,530
14,927
5,972
2,257
5,431
13,891
6,656
6,059
406.805
10,032
85,392

4,381
8,529
9,588
14,996
5,123
2,252
5,401
14,125
6,681
5,977
406,446
10,040
87,652

44 Total assets........................................................................

745,907

755,220

750,994

768,387

754,496

765,455

757,529

762,111

755,657

185.508
574
127,887
4,846
1,677
34,041
8,047
1,457
6,979
321,064
74,540
70,414

191,950
733
130,274
5,282
3,506
34,459
7.177
1,783
8,736
321,696
75,685
71,540

188,847
623
127,997
4,698
1,979
34,976
9,901
1,546
7,126
320,339
75,552
71,401

201,931
747
137,776
4,755
1,651
37,774
9,436
2,292
7,499
320,293
75,871
71,649

183,212
566
123,744
4,709
1,579
35,230
8,433
1,591
7,360
321,010
75,080
70,991

195,701
645
132,045
4,708
3,266
38,359
7,150
1,930
7,597
319,484
76,702
72,654

191,191
658
131,054
4,173
2,109
36,361
8,245
1,614
6,978
320,514
76,718
72,709

191,809
595
129,468
4,748
3,122
37.389
7,620
1,632
7,234
322,278
77,001
73,039

182,968
549
125,203
4,479
1,662
34,794
7,841
1,287
7,151
321,054
77,415
73,394

3,473
631
21
246,524
210,707
20,720
309
8,448

3,454
671
20
246,011
210,394
20,567
298
8,416

3,461
670
19
244,788
209,275
20,755
298
8,085

3,488
715
19
244,422
208,896
20,789
310
8,010

3,416
655
18
245,930
209,945
21,216
306
8,108

3,396
635
17
242,782
207,722
20,692
299
8,014

3,418
573
18
243,796
208,737
20,641
296
8,058

3,366
576
21
245,277
210,207
20,394
276
8,182

3,431
572
19
243,639
208,647
20,286
282
8,119

6.340

6,336

6,375

6,418

6,355

6,055

6,064

6,218

6,305

467
6,007
121,155

119
1,939
126,758

375
1,821
126,689

202
2,008
130,217

4,412
5,896
124,587

1,276
2,457
131,759

92
1,718
129,673

1,482
6,989
125,640

2,504
7,716
125,185

45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69

Deposits
Demand deposits..........................................................
Mutual savings banks...............................................
Individuals, partnerships, and corporations...........
States and political subdivisions..............................
U.S. government......................................................
Commercial banks in the United S tates.................
Banks in foreign countries........................................
Foreign governments and official institutions.........
Certified and officers' checks..................................
Time and savings deposits...........................................
Savings.......................................................................
Individuals and nonprofit organizations.............
Partnerships and corporations operated for
p ro fit..............................................................
Domestic governmental u n its..............................
All o th er................................................................
Time...........................................................................
Individuals, partnerships, and corporations.......
States and political subdivisions..........................
U.S. government...................................................
Commercial banks in the United S tates.............
Foreign governments, official institutions, and
banks ..............................................................
Liabilities for borrowed money
Borrowings from Federal Reserve Banks...............
Treasury tax-and-loan n o te s....................................
All other liabilities for borrowed money3...............
Other liabilities and subordinated notes and
debentures..............................................................

61,226

61,794

62,005

62,995

64,656

63,594

63,237

62,880

65,151

70 Total liabilities..................................................................

695,427

704,257

700,076

717,645

703,773

714,271

706,425

711,080

704,579

71 Residual (total assets minus total liabilities)4.............

50,480

50,963

50,917

50,742

50,724

51,184

51,103

51,031

51,078

1. Includes securities purchased under agreements to resell.
2. Other than financial institutions and Brokers and dealers.
3. Includes federal funds purchased and securities sold under agreements to
repurchase; for information on these liabilities at banks with assets of $1 billion or
more on Dec. 31, 1977, see table 1.13.
FRASER

Digitized for


4. This is not a measure of equity capital for use in capital adequacy analysis or
for other analytic uses.

Weekly Reporting Banks
1.27

A19

L A R G E W E E K L Y R E P O R T I N G C O M M E R C I A L B A N K S w ith D o m e s tic A s s e ts o f $1 B illio n o r M o re o n
D e c e m b e r 3 1 , 1977, A s s e ts a n d L ia b ilitie s
Millions of dollars, W ednesday figures

Account
Jan. 28

Feb. 4

Feb. 11

Feb. 18

Feb. 25p

Mar. 4 p

Mar. 11 p

Mar. 18p

Mar. 25p

1 Cash items in process of collection..............................
2 Demand deposits due from banks in the United
States .....................................................................
3 All other cash and due from depository institutions..

47,152

50,478

46,611

59,087

48,066

54.281

50,697

52,741

49,358

19,680
28,796

18,579
29,565

18,868
31,681

21,565
31,318

19,370
32,658

19,971
28,620

19,223
28,704

21,028
31.770

19,002
32,847

4 Total loans and securities................................................

516,563

520,140

514,146

519,900

517,068

521,375

516,001

518,109

514,143

Securities
U.S. Treasury securities...............................................
Trading account........................................................
Investment account, by m aturity............................
One year or less.....................................................
Over one through five years................................
Over five years.......................................................
Other securities............................................................
Trading account........................................................
Investment account...................................................
U.S. government agencies....................................
States and political subdivision, by maturity . . . .
One year or less.................................................
Over one y e a r...................................................
Other bonds, corporate stocks and securities.. ..

36,973
6,258
30,715
8,524
19,097
3,094
71.037
2,435
68,602
14,822
51,096
6,442
44.654
2,684

38,281
7,452
30,829
8,627
19,112
3,091
71,735
3,503
68,232
14,831
50,798
6,416
44,382
2,603

37,318
6,410
30,908
8,714
19,110
3,084
70,691
2,554
68,137
14,852
50,659
6,272
44,387
2,625

37,575
6,671
30,904
8,456
19,310
3,138
70,518
2,365
68,153
14,894
50,632
6,264
44,368
2,627

37,871
7,034
30,838
8.485
19.155
3,198
70,937
2,761
68,176
14,864
50,691
6,316
44,374
2,621

39,636
8,473
31,163
8.306
19.554
3,302
71,579
3,326
68,252
14.907
50,717
6,323
44,395
2,628

38,984
7,787
31,197
8,523
19,384
3,290
70,983
2,792
68,192
14,851
50,748
6,396
44,352
2,592

38,160
7,348
30,812
8.461
19,108
3.243
70.956
2.821
68,134
14.821
50,690
6.338
44,351
2,623

36,393
5,922
30,471
8,385
18,829
3,257
70,902
2,668
68,234
14,881
50,714
6,398
44,316
2,639

5
6
7
8
9
10
11
12
13
14
15
16
17
18

Loans
19 Federal funds sold1 .......................................................
20 To commercial banks...............................................
21 To nonbank brokers and dealers in securities........
22 To others....................................................................
23 Other loans, gross........................................................
24 Commercial and industrial........................................
25
Bankers acceptances and commercial paper........
26
All o ther................................................................
27
U.S. addressees.................................................
28
Non-U.S. addressees.........................................
29 Real esta te ................................................................
30 To individuals for personal expenditures...............
To financial institutions
31
Commercial banks in the United S tates.............
32
Banks in foreign countries....................................
33
Sales finance, personal finance companies, etc ..
34
Other financial institutions....................................
35 To nonbank brokers and dealers in securities.......
36 To others for purchasing and carrying securities2 ..
37 To finance agricultural production..........................
38 All o th er....................................................................
39 Less: Unearned income...............................................
40
Loan loss reserve...............................................
41 Other loans, net............................................................
42 Lease financing receivables.........................................
43 All other assets............................................................

24,058
15,998
5.839
2,221
396,021
162.587
4,006
158,581
151,254
7,327
106,457
63,352

24,497
17,104
5,284
2,108
397,146
163,151
4,046
159,106
152,004
7,102
106,720
63,106

23,312
16,096
5,566
1,650
394,388
161,424
3,394
158,030
150,920
7,110
106,893
62,834

26,554
19,298
5,633
1,623
396,868
161,619
3,999
157,620
150,554
7,066
107,103
62,808

25,461
18,138
5,435
1,889
394,405
160,779
3.506
157,273
150,312
6,960
107,182
62,705

25,249
17,750
5,748
1,751
396,548
161,262
3,683
157,579
150,658
6,921
107,318
62,606

25,062
18,126
5,134
1,801
392,666
160,233
3,489
156,744
149,860
6,884
107,486
62,471

26,586
18.599
6.032
1,956
394,141
160,851
3,377
157,474
150,485
6.989
107,688
62,409

24,812
17,630
5,479
1,703
393,718
160,943
3,485
157,458
150,391
7,067
107,777
62,387

4,101
8,962
9,814
14,924
5.469
1,964
5,273
13,117
6,115
5,411
384,495
9,352
79,784

3,785
8,926
9,767
15,009
5,508
1,977
5,284
13,912
6,015
5,504
385,627
9,656
81,398

4,214
8,544
9,689
14,892
5,137
1,991
5,244
13,525
6,032
5,531
382,824
9,681
85,166

4,524
9,110
9,743
14,965
5,255
2,047
5,239
14,455
6,059
5,556
385,253
9,687
80,538

4,266
8,327
9,622
14,775
5,848
2,049
5,283
13,568
6,030
5,575
382,799
9,711
82,587

4,417
8,569
9,536
14,805
6,309
2,030
5,294
14,403
5,963
5,674
384,911
9,749
85,598

4,309
8,489
9,273
14,601
5,251
2,046
5,285
13,222
5,997
5,696
380,972
9,757
87,398

4,476
8,316
9,386
14,573
5.888
2.038
5.290
13.226
6,026
5.709
382.406
9,756
82.907

4,272
8,464
9,445
14,646
5,045
2,033
5,264
13,442
6,052
5,631
382,035
9,766
85,158

44 Total assets........................................................................

701,328

709,816

706,153

722,096

709,460

719,594

711,780

716,312

710,273

174,186
551
119,048
4,227
1,477
32,764
7,954
1,454
6,709
299,829
68,873
65,086

179,821
700
121,014
4,612
3,214
33,002
7,105
1,782
8,392
300,229
69,945
66,124

177,225
599
118,876
4,067
1,799
33,691
9,830
1,545
6,817
298,889
69,820
65,997

189,415
716
128,026
4,204
1,474
36,168
9,367
2,253
7,207
298,835
70,108
66,274

172,112
544
115,082
4,091
1,412
33,919
8,368
1,590
7,106
299,364
69,365
65,595

183,751
616
122,894
4,194
2,963
36,808
7,081
1,887
7,308
297.736
70,820
67,100

179,510
632
121,827
3,708
1,834
35,023
8,180
1,612
6,695
298,783
70,847
67,154

180,118
572
120,532
3,976
2,844
36,059
7,558
1,622
6,956
300,437
71.105
67,459

171,825
529
116,459
3,908
1,486
33,504
7,774
1,285
6,880
299,334
71,491
67,786

3,200
565
21
230,957
197,423
18,782
294
8,118

3,190
611
20
230,284
197,003
18,569
283
8,093

3,193
610
19
229,069
195,827
18,827
283
7,757

3,219
656
19
228,727
195,517
18,812
294
7,686

3,148
603
18
229,999
196,416
19,178
290
7,759

3,130
573
17
226,916
194,191
18,716
283
7,672

3,156
518
18
227,937
195,192
18,682
280
7,718

3,101
524
21
229,332
196,644
18,394
257
7,819

3,161
526
19
227,843
195,189
18,314
263
7,771

6,340

6,336

6,375

6,418

6,355

6,055

6,064

6,218

6,305

368
5,541
114,398

72
1,759
119,898

375
1,710
119,792

97
1,821
122,960

4,272
5,520
117,608

1,244
2,285
124,585

92
1,614
122,198

1,364
6,545
118,745

2,407
7,222
118,041

45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69

Deposits
Demand deposits..........................................................
Mutual savings banks...............................................
Individuals, partnerships, and corporations...........
States and political subdivisions..............................
U.S. government.......................................................
Commercial banks in the United States.................
Banks in foreign countries........................................
Foreign governments and official institutions.........
Certified and officers’ checks..................................
Time and savings deposits...........................................
Savings.......................................................................
Individuals and nonprofit organizations.............
Partnerships and corporations operated for
p ro fit..............................................................
Domestic governmental u n its..............................
All o th er................................................................
Time...........................................................................
Individuals, partnerships, and corporations........
States and political subdivisions..........................
U.S. government...................................................
Commercial banks in the United States.............
Foreign governments, official institutions, and
banks ..............................................................
Liabilities for borrowed money
Borrowings from Federal Reserve Banks...............
Treasury tax-and-loan n o te s....................................
All other liabilities for borrowed money3...............
Other liabilities and subordinated notes and
debentures..........................................................

59,832

60,340

60,547

61,513

63,177

62,122

61,783

61,381

63,706

70 Total liabilities..................................................................

654,153

662,118

658,538

674,642

662,054

671,723

663,980

668,590

662,534

71 Residual (total assets minus total liabilities)4.............

47,175

47,698

47,616

47,453

47,407

47,871

47,800

47,721

47,740

1. Includes securities purchased under agreements to resell.
2. Other than financial institutions and brokers and dealers.
3. Includes federal funds purchased and securities sold under agreement to re­
purchase; for information on these liabilities at banks with assets of $1 billion or
more on Dec. 31, 1977. see table 1.13.




4. This is not a measure of equity capital for use in capital adequacy analysis or
for other analytic uses.

A20

Domestic Financial Statistics □ April 1981

1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities
Millions of dollars, Wednesday figures
1981
Jan. 28

Feb. 4

Feb. 11

Feb. 18

Feb. 25p

Mar. 4 p

Mar. U p

Mar. 18p

Mar. 25 p

1 Cash items in process of collection..............................
2 Demand deposits due from banks in the United
States .....................................................................
3 All other cash and due from depository institutions..

18,644

18,772

17,906

19,549

18,827

20,929

20,711

21,220

20,624

14,527
7,178

12,841
7,712

13,247
8,378

15,089
10,642

14,232
8,419

14,156
6,970

14,577
8,860

15,771
8,240

14,037
7,800

4 Total loans and securities1 ..............................................

123,296

124,325

121,931

125,738

123,490

123,903

121,570

124,784

124,270

7,985
1,614
5,834
537

8,004
1,666
5,809
529

7,975
1,653
5,807
515

8,266
1,612
6,085
570

8,120
1,598
5,952
570

8,517
1,590
6,268
658

8,345
1,590
6,070
685

8,000
1,427
5M l
626

7,864
1,470
5,759
635

13,675
2,296
10,757
1,554
9,203
622

13,617
2,307
10,685
1,482
9,202
626

13,525
2,302
10,612
1,387
9,225
611

13,532
2,302
10,613
1,378
9,234
618

13,561
2,331
10,627
1,380
9,247
602

13,629
2,353
10,671
1,400
9,271
606

13,589
2,345
10,646
1,409
9,237
598

13,564
2,329
10,617
1,400
9,217
617

13,510
2,320
10,552
1,347
9,205
638

7,254
3,836
2,545
872
97,385
50,614
1,056
49,558
46,944
2,614
14,941
9,396

6,979
3,536
2,640
802
98,709
50,845
1,155
49,690
47,077
2,613
15,115
9,389

6,112
2,517
2,917
678
97,327
49,785
680
49,105
46,496
2,609
15,154
9,390

8,738
5,267
2,956
515
98,230
49,857
1,037
48,820
46,231
2,588
15,180
9,422

7,823
4,569
2,664
590
97,030
49,378
886
48,491
45,951
2,540
15,237
9,388

6,672
3,030
3,065
577
98,124
49,550
932
48,617
46,105
2,512
15,288
9,406

6,228
3,217
2,393
618
96,494
49,419
989
48,430
45,961
2,469
15,274
9,453

9,332
5,312
3,428
591
97,002
49,674
862
48,812
46,339
2,472
15,345
9,481

9,410
6,048
2,843
519
96,549
49,666
1,018
48,648
46,178
2,470
15,368
9,518

1,280
4,326
4,181
4,454
3,024
472
422
4,274
1,198
1,804
94,382
1,973
34,615

1,163
4,387
4,300
4,541
3,207
489
439
4,832
1,146
1,839
95,724
2,271
37,144

1,359
4,160
4,273
4,434
3,068
489
436
4,778
1,153
1,856
94,318
2,259
39,498

1,643
4,592
4,232
4,432
3,075
507
439
4,851
1,163
1,866
95,201
2,259
35,403

1,430
4,051
4,162
4,380
3,563
504
432
4,504
1,170
1,874
93,986
2,261
36,713

1,451
4,008
4,142
4,452
4,126
487
437
4,776
1,147
1,892
95,084
2,252
38,782

1,386
4,314
4,050
4,298
3,099
498
440
4,263
1,182
1,903
93,408
2,259
40,299

1,484
4,203
4,066
4,278
3,646
500
443
3,881
1,197
1,917
93,888
2,261
35,792

1,345
4,370
4,050
4,391
3,003
492
427
3,921
1,213
1,850
93,486
2,261
35,423

200,234

203,064

203,219

208,680

203,942

206,991

208,277

208,068

204,415

64,199
285
32,274
525
352
20,231
6,184
1,160
3,186
58,096
9,150
8,746

64,125
362
31,660
492
831
19,328
5,517
1,501
4,432
58,201
9,239
8,823

64,920
331
30,646
424
426
20,641
8,028
1,277
3,146
57,318
9,217
8,787

67,386
381
33,776
431
306
20,029
7,561
1,925
2,976
56,444
9,231
8,797

64,502
292
30,715
425
240
21,529
6,583
1,329
3,389
55,707
9,147
8,721

67,443
297
32,383
461
799
23,017
5,376
1,617
3,494
55,976
9,243
8,833

67,983
323
33,387
363
496
22,426
6,471
1,348
3,169
56,230
9,227
8,832

67,646
288
32,786
390
872
23,061
5,874
1,106
3,268
56,970
9,239
8,851

64,180
272
31,255
425
435
21,619
6,055
993
3,125
57,081
9,270
8,887

289
111
4
48,946
42,395
1,508
24
2,347

290
122
4
48,961
42,402
1,559
32
2,304

289
136
5
48,101
41,492
1,674
37
2,196

287
144
3
47,213
40,503
1,725
38
2,213

288
135
3
46,560
39,631
1,770
36
2,258

285
122
3
46,732
39,785
1,770
36
2,386

285
107
3
47,003
40,015
1,721
48
2,440

274
108
5
47,731
40,727
1,689
44
2,434

275
105
3
47,811
40,650
1,684
44
2,520

2,672

2,664

2,702

2,734

2,865

2,755

2,779

2,837

2,912

2
40,516

150
583
40,394

354
43,974

2,730
1,500
38,151

550
43,512

1,103
2,032
40,088

780
2,201
38,766

Securities
U.S. Treasurv securities2.............................................
Trading account2 ......................................................
Investment account, by m aturity............................
One year or less.....................................................
Over one through five years................................
Over five years......................................................
Other securities2 ..........................................................

5
6
7
8
9
10
11
1?

13
14
15
16
17
18

Investment account...................................................
U.S. government agencies....................................
States and political subdivision, by maturity . . . .
One year or less.................................................
Over one y e a r...................................................
Other bonds, corporate stocks and securities__

Loans
19 Federal funds sold3 ......................................................
20 To commercial banks...............................................
21 To nonbank brokers and dealers in securities.......
22 To others...................................................................
23 Other loans, gross........................................................
24 Commercial and industrial.......................................
25
Bankers acceptances and commercial paper.......
All o th er................................................................
26
27
U.S. addressees.................................................
28
Non-U.S. addressees.........................................
29 Real e sta te ................................................................
30 To individuals for personal expenditures...............
31 To financial institutions
Commercial banks in the United S tates.............
32
Banks in foreign countries....................................
33
Sales finance, personal finance companies, etc...
34
Other financial institutions....................................
35 To nonbank brokers and dealers in securities.......
36 To others for purchasing and carrying securities4 ..
37 To finance agricultural production..........................
38 All o th er...................................................................
39 Less: Unearned income...............................................
40
Loan loss reserve...............................................
41 Other loans, net............................................................
42 Lease financing receivables.........................................
43 All other assets5............................................................
44 Total assets........................................................................
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69

Deposits
Demand deposits........................................................ ..
Mutual savings banks...............................................
Individuals, partnerships, and corporations...........
States and political subdivisions............................ .
U.S. government.......................................................
Commercial banks in the United States.................
Banks in foreign countries.................................... .
Foreign governments and official institutions.........
Certified and officers’ checks..................................
Time and savings deposits...........................................
Savings.. . . ........................................................... ...
Individuals and nonprofit organizations......... ...
Partnerships and corporations operated for
pro fit.................................................................. .
Domestic governmental u n its..............................
All o th er................................................................
Time....................................................................... ...
Individuals, partnerships, and corporations ... .
States and political subdivisions........................ .
U.S. government............................................... .
Commercial banks in the United States......... .
Foreign governments, official institutions, and
banks .....................................................................
Liabilities for borrowed money
Borrowings from Federal Reserve Banks........... .
Treasury tax-and-loan n o te s ....................................
All other liabilities for borrowed money6...............
Other liabilities and subordinated notes and
debentures..............................................................

1
38,223

581
42,433

24,175

24,342

24,002

24,727

25,637

24,533

24,090

24,349

25,623

70 Total liabilities..................................................................

184,695

187,187

187,367

192,884

188,227

190,966

192,365

192,188

188,632

71 Residual (total assets minus total liabilities)4.............

15,539

15,877

15,852

15,796

15,716

16,025

15,912

15,880

15,784

1.
2.
3.
4.

Excludes trading account securities.
Not available due to confidentiality.
Includes securities purchased under agreements to resell.
Other than financial institutions and brokers and dealers.




5. Includes trading account securities.
6. Includes federal funds purchased and securities sold under agreements to
repurchase
7. This is not a measure of equity capital for use in capital adequacy analysis or
for other analytic uses.

Weekly Reporting Banks

A21

1.29 LARGE WEEKLY REPORTING COMMERCIAL BANKS Balance Sheet Memoranda
Millions of dollars, Wednesday figures
1981
Jan. 28

Feb. 4

Feb. 11

Feb. 18

Feb. 25p

Mar. 4p

Mar. 11p

Mar. 18p

Mar. 25 p

B anks with A ssets of $750 Million or More

1 Total loans (gross) and securities adjusted1 ................
2 Total loans (gross) adjusted1..........................................
3 Demand deposits adjusted2 ............................................

543,354
426,005
100,166

546,170
426,794
100,628

540,579
423,197
102,785

542,952
425,389
99,791

541,411
423,210
95,733

546,093
425,420
96,702

540,495
421,047
99,167

542,053
423,402
95,854

539,337
422,399
94,447

4 Time deposits in accounts of $100,000 or more..........
5 Negotiable C D s ............................................................
6 Other time deposits......................................................

162,414
117,698
44,717

161,311
116,453
44,858

160,058
114,752
45,306

159,546
114,292
45,254

160,011
114,208
45,804

157,039
111,804
45,235

157,408
112,208
45,200

158,716
113,452
45,264

157,529
112,612
44,917

7 Loans sold outright to affiliates3..................................
8 Commercial and industrial..........................................
9 O ther..............................................................................

2,760
1,850
910

2,785
1,878
906

2,793
1,884
909

2,883
1,977
906

2,760
1,846
913

2,740
1,835
905

2,783
1,864
919

2,788
1,888
900

2,746
1,855
891

10 Total loans (gross) and securities; adjusted1 ................
11 Total loans (gross) adjusted1..........................................
12 Demand deposits adjusted2 ............................................

507,990
399,980
92,792

510,769
400,753
93,127

505,399
397,390
95,124

507,694
399,600
92,686

506,270
397,462
88,715

510,846
399,631
89,699

505,260
395,292
91,956

506,769
397,653
88,473

503,924
396,628
87,476

13 Time deposits in accounts of $100,000 or more..........
14 Negotiable C D s ............................................................
15 Other time deposits......................................................

153,504
111,477
42,026

152,239
110,113
42,125

151,028
108,473
42,555

150,534
108,004
42,530

150,836
107,803
43,033

147,929
105,435
42,495

148,356
105,900
42,456

149,598
107,116
42,482

148,536
106,362
42,173

16 Loans sold outright to affiliates3....................................
17 Commercial and industrial..........................................
18 Other..............................................................................

2,725
1,825
900

2,748
1,850
898

2,756
1,856
901

2,849
1,948
900

2,724
1,818
905

2,705
1,807
897

2,746
1,834
912

2,750
1,857
893

2,710
1,827
883

19 Total loans (gross) and securities adjusted14..............
20 Total loans (gross) adjusted1..........................................
21 Demand deposits adjusted2 ............................................

121,183
99,522
24,972

122,610
100,988
25,194

121,063
99,563
25,946

121,857
100,058
27,502

120,534
98,854
23,906

122,461
100,315
22,699

120,053
98,119
24,350

121,101
99,537
22,493

119,939
98,566
21,502

22 Time deposits in accounts of $100,000 or more..........
23 Negotiable C D s............................................................
24 Other time deposits......................................................

38,826
29,595
9,232

38,753
29,235
9,518

37,925
28,229
9,696

37,044
27,493
9,552

36,172
26,680
9,492

36,296
26,714
9,582

36,466
26,952
9,514

37,119
27,581
9,538

37,301
27,888
9,413

B anks with A ssets of $1 B illion or More

Banks in N ew Y ork City

1. Exclusive of loans and federal funds transactions with domestic commercial
banks.
2. All demand deposits except U.S. government and domestic banks less cash
items in process of collection.




3. Loans sold are those sold outright to a bank’s own foreign branches, non­
consolidated nonbank affiliates of the bank, the bank’s holding company (if not a
bank), and nonconsolidated nonbank subsidiaries of the holding company,
4. Excludes trading account securities.

A22

Domestic Financial Statistics □ April 1981

1.30 LARGE WEEKLY REPORTING COMMERCIAL BANKS Domestic Classified Commercial and Industrial Loans
Millions of dollars
Outstanding
Industry classification

Net change during

1980
Nov. 26

1981

Dec. 31

Jan. 28

Feb. 25

Mar./5

1980

1981

Q4'

Ql p

Adjust­
ment
bank1

1981
Jan.'

Feb.

Mar.P

1 Durable goods manufacturing.............

24,088

24,676

24,383r

24,472

24.640

1,165

-3 9

-295

2 Nondurable goods manufacturing
3 Food, liquor, and tobacco...............
4 Textiles, apparel, and leather.........
5
Petroleum refining..........................

20,804
4,921
4,906
3,129
4,158
3,690

20,506
5,391
4,150
3,635
3,917
3,412

19,359
4,915
4,096
3,185
3,782
3,381

18,937
4,529
4,364
2,929
3,673
3.442

19,401
4,580
4,351
2,982
3,838
3,650

972
1,040
-1,054
949
184
-147

- 1,103
-807
200
-654
-8 0
237

-1,145
-473
-5 4
-450
-135
-3 2

-422
-386
268
-256
-109
61

464
52
-1 3
53
165
208

6
7

Chemicals and ru b b er.....................
Other nondurable goods.................

168

8 Mining (including crude petroleum
and natural gas)............................

15,338

16,427

16,251

15.935

15,750

2,470

-678

-176

-316

-185

9 Trade....................................................
10 Commodity dealers..........................
11
Other wholesale..............................
12 Retail.................................................

27,050
2,402
12,182
12,467

26,239
2,563
12,293
11,384

25,552
2,116
12,057
11.378

25.245
1,874
11,707
11,663

25,620
1,950
11,878
11,792

1,290
444
707
138

-619
-613
-415
409

-687
-447
-235
-5

-307
-242
-350
285

375
76
171
129

and other public utilities.............
Transportation..................................
Communication................................
Other public utilities........................

20,099
8,019
3,161
8,919

21,304
8,374
3,319
9,611

20,741
8,254
3,184
9,303

20,270
8,139
3,097
9,033

19,971
8,106
3,160
8,705

2.081
639
326
1,116

-1,332
-266
-160
-906

-561
-118
-136

-472
-114
-8 7
-270

-299
-3 4
62
-328

17 Construction.........................................
18 Services.................................................
19 All other2.............................................

5,992
22,160
16,146

5,994
22,857
16,554

5,950
23,242'
15,775'

6,109
23,528
15,817

6,225
23,603
15,181

-3 6
1,546
1,152

233
746
-1,714

-4 2
385
-1,120

159
286
42

116
75
-636

20 Total domestic loans ..............................

151,678

154,557

150,312

150,391

10,640

-4,505

-3,642

-9 4 2

78,956

81,768

80.147

79,298

5,232

-2,467

13 Transportation, communication,
14
15
16

21 Memo: Term loans (original maturity
more than 1 year) included in do­

mestic loans ..................................

81,794

1. Adjustment bank amounts represent accumulated adjustments originally made
to offset the cumulative effects of mergers. These adjustment amounts should be
added to outstanding data for any date in the year to establish comparability with
any date in the subsequent year. Changes shown have been adjusted for these
amounts.
2. Includes commercial and industrial loans at a few banks with assets of $1
billion or more that do not classify their loans.




-2
'341 ‘
339

-1,647

Note. New series. The 134 large weekly reporting commercial banks with do­
mestic assets of $1 billion or more as of December 31, 1977, are included in this
series. The revised series is on a last-Wednesday-of-the-month basis. Partly esti­
mated historical data are available from the Banking Section, Division of Research
and Statistics, Board of Governors of the Federal Reserve System, Washington,
D.C., 20551.

Deposits and Commercial Paper
1.31

A23

G R O S S D E M A N D D E P O S I T S o f In d iv id u a ls , P a r tn e r s h ip s , a n d C o r p o r a tio n s 1
Billions of dollars, estim ated daily-average balances
Commercial banks
Type of holder

19792
1975
Dec.

1976
Dec.

1977
Dec.

1980

1978
Dec.
Sept.

Dec.

Mar.

June

Sept.

Dec.

1 All holders—Individuals, partnerships, and
2
3
4
5
6

corporations............................................................

236.9

250.1

274.4

294.6

292.4

302.2

288.4

288.6

302.0

316.8

Financial business......................................................
Nonfinancial business.................................................
Consumer...................................................................
Foreign.......................................................................
Other...........................................................................

20.1
125.1
78.0
2.4
11.3

22.3
130.2
82.6
2.7
12.4

25.0
142.9
91.0
2.5
12.9

27.8
152.7
97.4
2.7
14.1

26.7
148.8
99.2
2.8
14.9

27.1
157.7
99.2
3.1
15.1

28.4
144.9
97.6
3.1
14.4

27.7
145.3
97.9
3.3
14.4

29.6
151.9
101.8
3.2
15.5

29.8
162.3
104.0
3.3
17.4

Weekly reporting banks
19793
1975
Dec.

1976
Dec.

1977
Dec.

1980

1978
Dec.
Sept.

Dec.

Mar.

June

Dec.

Sept.

7 All holders—Individuals, partnerships, and
8
9
10
11
12

corporations............................................................

124.4

128.5

139.1

147.0

132.7

139.3

133.6

133.9

140.6

147.4

Financial business......................................................
Nonfinancial business.................................................
Consumer....................................................................
Foreign.......................................................................
Other...........................................................................

15.6
69.9
29.9
2.3
6.6

17.5
69.7
31.7
2.6
7.1

18.5
76.3
34.6
2.4
7.4

19.8
79.0
38.2
2.5
7.5

19.7
69.1
33.7
2.8
7.4

20.1
74.1
34.3
3.0
7.8

20.1
69.1
34.2
3.0
7.2

20.2
69.2
33.9
3.1
7.5

21.2
72.4
36.0
3.1
7.9

21.6
77.7
36.3
3.1
8.7

1. Figures include cash items in process of collection. Estimates of gross deposits
are based on reports supplied by a sample of commercial banks. Types of depositors
in each category are described in the June 1971 B ulletin, p. 466.
2. Beginning with the March 1979 survey, the demand deposit ownership survey
sample was reduced to 232 banks from 349 banks, and the estimation procedure
was modified slightly. To aid in comparing estimates based on the ola and new
reporting sample, the following estimates in billions of dollars for December 1978
have been constructed using the new smaller sample; financial business, 27.0;
nonfinancial business, 146.9; consumer, 98.3; foreign, 2.8; and other, 15.1.
1.32

3. After the end of 1978 the large weekly reporting bank panel was changed to
170 large commercial banks, each of which had total assets in domestic offices
exceeding $750 million as of Dec. 31, 1977. See “Announcements,” p. 408 in the
May 1978 B ulletin. Beginning in March 1979, demand deposit ownership esti­
mates for these large banks are constructed quarterly on the basis of 97 sample
banks and are not comparable with earlier data. The following estimates in billions
of dollars for December 1978 have been constructed for the new large-bank panel;
financial business, 18.2; nonfinancial business, 67.2; consumer, 32.8; foreign, 2.5;
other, 6.8.

C O M M E R C IA L P A P E R A N D B A N K E R S D O L L A R A C C E P T A N C E S O U T S T A N D IN G
Millions of dollars, end of period
1980
Instrument

1977
Dec.

1978
Dec.

19791
Dec.

1981

1980
Dec.
Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Commercial paper (seasonally adjusted)
1 All issuers.................................................

2
3
4

5
6

Financial companies2
Dealer-placed, paper3
T otal....................................................
Bank-related.......................................
Directly placed paper4
T otal.....................................................
Bank-related.......................................
Nonfinancial companies5 ........................

65,051'

83,438'

112,809'

125,148'

122,969'

123,706'

123,009'

124,606'

125,148'

127,612'

129,333

8,796'
2,132

12,181'
3,521

17,377'
2,874

19,631'
3,561

19,228'
3,313

19,477'
3,370

19,062'
3,442

19,591'
3,436

19,631'
3,561

19,886'
3,670

20,859
3,743

40,574'
7,102
15,681'

51,647'
12,314
19,610'

64,748'
17,598
30,684'

67,888'
22,382
37,629'

64,780'
19,909
38,961'

65,618'
19,692
38,611'

66,612'
21,146
37,335'

67,340'
21,939
37,675'

67,888'
22,382'
37,629'

67,912'
22,570
39,814'

67,963
22,331
40,511

Bankers dollar acceptances (not seasonally adjusted)
7 T otal........................................................
8
9
10
11
12
13

Holder
Accepting banks......................................
Own b ills.............................................
Bills bought.........................................
Federal Reserve Banks
Own account.......................................
Foreign correspondents.......................
Others......................................................

Basis
14 Imports into United States.....................
15 Exports from United S tates...................
16 All other...................................................

25,450

33,700

45,321

54,744

54,486

55,774

56,610

55,226

54,744

54,465

58,084

10,434
8,915
1,519

8,579
7,653
927

9,865
8,327
1,538

10,564
8,963
1,601

9,644
8,544
1,100

10,275
9,004
1,270

11,317
9,808
1,509

10,236
8,837
1,399

10,564
8,963
1,601

9,371
7,951
1,420

9,911
8,770
1,141

954
362
13,700

1
664
24,456

704
1,382
33,370

776
1,791
41,614

277
1,841
42,724

499
1,820
43,179

566
1,915
42,813

523
1,852
42,616

776
1,791
41,614

0
1,771
43,323

0
1,399
46,779

6,378
5,863
13,209

8,574
7,586
17,540

10,270
9,640
25,411

11,776
12,712
30,257

11,861
12,582
30,043

11,731
12,991
31,052

12,254
13,445
30,911

11,774
13,670
29,782

11,776
12,712
30,257

11,903
12,816
29,746

12,976
12,979
32,129

1. A change in reporting instructions results in offsetting shifts in the dealer-placed
and directly placed financial company paper in October 1979.
2. Institutions engaged primarily in activities such as, but not limited to, com­
mercial, savings, and mortgage banking; sales, personal, and mortgage financing;
factoring, finance leasing, and other business lending; insurance underwriting; and
FRASER
other investment activities.

Digitized for


3. Includes all financial company paper sold by dealers in the open market.
4. As reported by financial companies that place their paper directly with inves­
tors.
5. Includes public utilities and firms engaged primarily in such activities as com­
munications, construction, manufacturing, mining, wholesale and retail trade,
transportation, and reserves.

A24
1.33

Domestic Financial Statistics □ April 1981
P R I M E R A T E C H A R G E D B Y B A N K S o n S h o r t- T e r m B u s in e s s L o a n s
P ercent per annum
Effective date

Rate

1980—Nov. 6 .................
1 7 .................
2 1 .................
2 6 .................
Dec. 2 .................
5 .................
1 0 .................
1 6 .................
1 9 .................

15.50
16.25
17.00
17.75
18.50
19.00
20.00
21.00
21.50

1.3 4

Effective: Date

1981—Jan.

2 ...................
9 ...................
3...................
23...................
Mar. 10...................
17...................

Feb.

Rate

Month

Average
rate

Month

Average
rate

20.50
20.00
19.50
19.00
18.00
17.50

1980—Jan...........................
Feb..........................
Mar.........................
Apr..........................
May........................
June .......................
July........................
Aug.........................

15.25
15.63
18.31
19.77
16.57
12.63
11.48
11.12

1980—Sept.........................
Oct..........................
Nov..........................
Dec..........................

12.23
13.79
16.06
20.35

1981—Jan...........................
Feb..........................
Mar..........................

20.16
19.43
18.05

T E R M S O F L E N D I N G A T C O M M E R C I A L B A N K S S u rv e y o f L o a n s M a d e , F e b r u a r y 2 - 7 , 1981
Size of loan (in thousands of dollars)
Item

All

1,000
1-24

25-49

50-99

100-499

500-999

and over

Short-Term Commercial and
Industrial Loans
Amount of loans (thousands of dollars)........................
Number of loans.................................................................
Weighted-average maturity (m onths)............................
Weighted-average interest rate (percent per annum) .
Interquartile range1 .......................................................

16,985,777
158,959
1.9
19.91
19.12-21.25

817,631
111,775
3.3
19.59
17.23-21.94

521,319
15,982
3.7
19.53
18.00-21.84

918,372
14,711
4.2
19.77
18.77-22.13

2,501,018
13,165
3.6
20.18
19.28-22.51

751,196
1,192
3.8
20.87
20.00-21.94

11,476,241
2,135
1.1
19.83
19.18-20.32

Percentage of amount of loans
6 With floating rate...............................................................
7 Made under commitment.................................................
8 With no stated m aturity ................................................

38.7
43.0
18.1

31.0
23.9
10.2

29.4
22.1
11.7

42.9
37.6
24.6

55.6
39.7
18.0

77.6
65.8
36.9

33.1
44.9
17.2

1
2
3
4
5

Long-Term Commercial and
Industrial Loans
Amount of loans (thousands of dollars)........................
Number of loans.................................................................
Weighted-average maturity (m onths)............................
Weighted-average interest rate (percent per annum) .
Interquartile range1 .......................................................

2,106,841
19,309
47.8
19.26
17.92-21.00

238,914
17,320
33.4
19.06
17.00-21.00

297.407
1,355
61.8
19.31
16.25-21.00

161,491
245
40.1
20.48
20.00-21.86

1,409,030
389
48.2
19.14
18.28-20.75

Percentage of amount of loans
14 With floating rate...............................................................
15 Made under commitment.................................................

73.8
76.9

39.4
33.5

88.1
49.7

85.0
77.7

75.4
89.9

9
10
11
12
13

Construction and
Land D evelopment Loans

584,021
12,681
10.4
19.40
16.00-22.19

55,418
7,442
6.3
18.76
16.64-21.50

124,270
3,324
9.9
17.40
13.65-22.04

68,475
1,107
6.7
17.92
13.28-21.94

133,859
648
11.4
20.20
20.00-22.50

201.999
160
12.4
20.77
20.50-22.19

With floating rate ...........................................................
Secured by real estate.......................................................
Made under commitment.................................................
With no stated m aturity...................................................

63.9
89.1
74.5
10.7

36.0
91.9
57.7
28.6

31.2
87.9
84.4
3.8

42.1
94.3
77.0
6.2

70.5
79.7
73.8
14.0

94.8
93.6
72.7
9.5

Type of construction
25 1- to 4-family.....................................................................
26 M ultifamily.........................................................................
27 Nonresidential.....................................................................

40.3
15.1
44.7

77.4
4.7
18.0

54.2
2.1
43.7

63.7
9.3
27.0

25.4
15.0
59.6

23.4
27.9
48.7

16
17
18
19
20

Amount of loans (thousands of dollars).......................
Number of loans.................................................................
Weighted-average maturity (m onths)............................
Weighted-average interest rate (percent per annum)
Interquartile range1 .......................................................

21
22
23
24

Percentage of amount of loans

All
sizes

250
10-24

1-9

25-49

50-99

100-249

and over

Loans to Farmers

28
29
30
31
32

Amount of loans (thousands of dollars)...................... .
Number of loans............................................................... .
Weighted-average maturity (m onths) ..........................
Weighted-average interest rate (percent per annum) .
Interquartile range1 ...................................................

33
34
35
36
37

Feeder livestock ........................................................... .
Other livestock ............................................................. .
Other current operating expenses ................................
Farm machinery and equipm ent ..................................
O th er...................................................................................

1,083,356
60,769
6.2
17.92
16.21-19.25

147,558
39,249
6.4
17.36
16.10-18.27

166,464
11,339
6.2
17.71
16.21-18.81

200,977
5,871
5.9
17.52
16.10-18.50

153,148
2,456
6.8
17.85
16.46-19.25

204,451
1,457
4.8
17.92
16.61-18.81

210,756
398
7.5
18.94
15.69-20.84

17.79
17.45
17.91
17.37
18.31

17.54
16.34
17.42
17.52
17.63

17.87
18.06
17.72
17.16
17.85

18.14
17.20
17.36
17.58
17.22

17.37
17.85
17.53
17.66
18.84

16.81
(2)
18.01
(2)
18.06

18.55
(2)
18.95
(2)
20.52

By purpose of loan

1. Interest rate range that covers the middle 50 percent of the total dollar amount
of loans made.
2. Fewer than 10 sample loans.




N ote. For more detail, see the Board’s E. 2(111) statistical release,

Securities Markets

A25

1.35 INTEREST RATES Money and Capital Markets
A verages, p ercen t p e r annum ; w eekly and m onthly figures are averages of business day d ata unless otherw ise noted.
1980
Instrument

1978

1979

1981, week ending

1981

1980
Dec.

Jan.

Feb.

Mar.

Feb. 27

Mar. 6

Mar. 13

Mar. 20

Mar. 27

Money Market R ates
1 Federal funds1-2 ............................................
Commercial paper3-4
2
1-month......................................................
3 3-month......................................................
4 6-month......................................................
Finance paper, directly placed3-4
5
1-month......................................................
6
3-month......................................................
7
6-month......................................................
Bankers acceptances4-5
8
3-month......................................................
9 6-month......................................................
Certificates of deposit, secondary market6
10 1-month......................................................
11 3-month......................................................
12 6-month......................................................
13 Eurodollar deposits, 3-month2 ..................
U.S. Treasury bills4
Secondary market7
14
3-month..................................................
15
6-month..................................................
16
1-year......................................................
Auction average8
17
3-month..................................................
18
6-month..................................................
19
1-year......................................................

7.93

11.19

13.36

18.90

19.08

15.93

14.70

14.96

15.73

15.53

14.13

13.48

7.76
7.94
7.99

10.86
10.97
10.91

12.76
12.66
12.29

18.95
18.07
16.49

17.73
16.58
15.10

15.81
15.49
14.87

14.15
13.94
13.59

14.72
14.68
14.45

15.48
15.23
14.82

14.59
14.42
13.99

13.23
13.06
12.76

13.39
13.24
13.02

7.73
7.80
7.78

10.78
10.47
10.25

12.44
11.49
11.28

17.87
15.00
14.78

16.97
14.49
14.09

15.52
14.45
14.05

13.78
13.08
12.89

14.29
13.80
13.60

15.08
14.03
13.78

14.49
13.67
13.43

12.71
12.56
12.42

12.81
12.29
12.17

8.11
n.a.

11.04
n.a.

12.78
n.a.

17.96
n.a.

16.62
14.88

15.54
14.89

13.88
13.49

14.83
14.55

15.17
14.77

14.25
13.83

13.02
12.62

13.38
13.04

7.88
8.22
8.61
8.78

11.03
11.22
11.44
11.96

12.91
13.07
12.99
14.00

19.24
18.65
17.10
19.47

17.99
17.19
15.92
18.07

16.11
16.14
16.00
17.18

14.33
14.43
14.48
15.36

14.96
15.31
15.59
16.59

15.58
15.74
15.84
16.74

14.90
14.92
14.91
16.31

13.46
13.53
13.52
14.94

13.58
13.82
13.97
14.31

7.19
7.58
7.74

10.07
10.06
9.75

11.43
11.37
10.89

15.49
14.64
13.23

15.02
14.08
12.62

14.79
14.05
12.99

13.36
12.81
12.28

14.19
13.76
12.89

14.44
14.00
13.07

13.79
13.10
12.46

12.63
11.92
11.69

12.91
12.51
12.09

10.041 , 11.506
11.374
10.017
9.817
10.748

15.661
14.770
13.261

14.724
13.883
12.554

14.905
14.134
12.801

13.478
12.983
11.481

14.103
13.611
12.801

14.463
14.133

13.996
13.427

12.758
12.096

12.695
12.274
11.481

13.71
13.57

14.69
14.16

12.96
12.99

13.95
13.76
13.56
13.43
13.21
12.99

13.92
13.70
13.55
13.55
13.33
13.14
13.04
12.87
12.62

’ 13.06
12.98
12.83
12.71
12.54
12.29

13.51
13.54
13.55
13.57
13.55
13.42
13.27
13.11
12.83

7.221
7.572
7.678

Capital Market R ates

20
21
22
23
24
25
26
27
28

U.S. Treasury notes and bonds9
Constant maturities10
1-year......................................................
2-year......................................................
2 -v2*year11..............................................
3-year......................................................
5-year......................................................
7-year......................................................
10-year....................................................
20-year....................................................
30-year....................................................

8.34
8.34

10.67
10.12

12.05
11.77

14.88
14.08

14.08
13.26

14.57
13.92

8.29
8.32
8.36
8.41
8.48
8.49

9.71
9.52
9.48
9.44
9.33
9.29

11.55
11.48
11.43
11.46
11.39
11.30

13.65
13.25
13.00
12.84
12.49
12.40

13.01
12.77
12.66
12.57
12.29
12.14

13.65
13.41
13.28
13.19
12.98
12.80

13.51
13.41
13.24
13.12
12.94
12.69

14.50
14.02
14.00
13.80
13.63
13.45
13.32
13.10
12.89

29

Composite12
Over 10 years (long-term)..................

7.89

8.74

10.81

11.89

11.65

12.23

12.15

12.32

12.42

12.07

11.77

12.29

State and local notes and bonds
Moody’s series13
30
Aaa..........................................................
31
Baa..........................................................
32 B ond Buyer series1 4 ................................

5.52
6.27
6.03

5.92
6.73
6.52

7.85
9.01
8.59

9.44
10.64
10.11

8.98
9.90
9.66

9.46
10.15
10.10

9.50
10.40
10.16

9.65
10.20
10.27

9.80
10.40
10.40

9.80
10.40
10.34

9.20
10.40
9.81

9.20
10.40
10.09

9.07
8.73
8.92
9.12
9.45

10.12
9.63
9.94
10.20
10.69

12.75
11.94
12.50
12.89
13.67

14.04
13.21
13.78
14.03
15.14

13.80
12.81
13.52
13.83
15.03

14.22
13.35
13.89
14.27
15.37

14.26
13.33
13.90
14.47
15.34

14.30
13.45
14.00
14.35
15.39

14.44
13.61
14.15
14.51
15.49

14.27
13.31
13.92
14.45
15.40

14.08
13.06
13.70
14.34
15.20

14.25
13.32
13.85
14.54
15.27

8.96
8.97

10.03
10.02

12.74
12.70

14.51
14.38

14.12
14.17

14.90
14.58

14.71
14.41

14.90
14.85

14.55
14.53

14.42
14.18

13.98

15.07
14.71

8.25
5.28

9.07
5.46

10.57
5.25

11.94
4.74

11.64
4.76

11.83
5.00

11.81
4.88

11.78
5.02

11.86
4.94

11.85
4.99

11.75
4.84

11.78
4.75

Corporate bonds
Seasoned issues15
All industries........................................
Aaa..........................................................
Aa............................................................
A ..............................................................
Baa..........................................................
Aaa utility bonds16
38
New issu e ..............................................
39
Recently offered issues........................

33
34
35
36
37

40
41

Memo: Dividend/price ratio17
Preferred stocks........................................
Common stocks........................................

1. Weekly and monthly figures are averages of all calendar days, where the rate
for a weekend or holiday is taken to be the rate prevailing on the preceding business
day. The daily rate is the average of the rates on a given day weighted by the
volume of transactions at these rates.
2. Weekly figures are statement week averages—that is, averages for the week
ending Wednesday.
3. Beginning November 1977, unweighted average of offering rates quoted by
at least five dealers (in the case of commercial paper), or finance companies (in
the case of finance paper). Previously, most representative rate quoted by those
dealers and finance companies. Before November 1979, maturities for data shown
are 30-59 days, 90-119 days, and 120-179 days for commercial paper; and 30-59
days, 90-119 days, and 150-179 days for finance paper.
4. Yields are quoted on a bank-discount basis, rather than an investment yield
basis (which would give a higher figure).
5. Dealer closing offered rates for top-rated banks. Most representative rate
(which may be, but need not be, the average of the rates quoted by the dealers).
6. Unweighted average of offered rates quoted by at least five dealers early in
the day.
7. Unweighted average of closing bid rates quoted by at least five dealers.
8. Rates are recorded in the week in which bills are issued.
9. Yields (not compounded) are based on closing bid prices quoted by at least
five dealers.
10. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields
are read from a yield curve at fixed maturities. Based on only recently issued,
actively traded securities.




11. Each monthly figure is an average of only five business days near the end
of the month. The rate for each month was used to determine the maximum interest
rate payable in the following month on small saver certificates, until June 2, 1980.
Each weekly figure is calculated on a biweekly basis and is the average of five
business days ending on the Monday following the calendar week. Beginning June
2, the biweekly rate is used to determine the maximum interest rate payable in the
following two-week period on small saver certificates. (See table 1.16.)
12. Unweighted averages for all outstanding notes and bonds neither due nor
callable in less than 10 years, including several very low yielding “flower” bonds.
13. General obligations only, based on figures for Thursday, from Moody’s
Investors Service.
14. General obligations only, with 20 years to maturity, issued by 20 state and
local governmental units of mixed quality. Based on figures for Thursday.
15. Daily figures from Moody’s Investors Service. Based on yields to maturity
on selected long-term bonds.
16. Compilation of the Federal Reserve. Issues included are long-term (20 years
or more). New-issue yields are based on quotations on date of offering; those on
recently offered issues (included only for first 4 weeks after termination of under­
writerj>rice restrictions), on Friday close-of-business quotations.
17. Standard and Poor’s corporate series. Preferred stock ratio based on a sample
of ten issues: four public utilities, four industrials, one financial, and one trans­
portation. Common stock ratios on the 500 stocks in the price index.

A26
1 .3 6

Domestic Financial Statistics □ April 1981
STO CK M A R K E T

S e le c te d S ta tis tic s
1981

1980
Indicator

1979

1978

1980
Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Prices and trading (averages of dai ly figures)
Common stock prices
1 New York Stock Exchange (Dec. 31, 1965 = 50) ..
2 Industrial................................................................
3 Transportation........................................................
4 Utility.....................................................................
5 Finance ....................................................................
6 Standard & Poor’s Corporation (1941-43 = 10)1. ..
7 American Stock Exchange (Aug. 31, 1973 = 100) .

53.76
58.30
43.25
39.23
56.74
96.11
144.56

55.67
61.82
45.20
36.46
58.65
98.34
186.56

68.06
78.64
60.52
37.35
64.28
118.71
300.94

73.12
84.92
65.89
38.77
69.33
126.49
337.01

75.17
88.00
70.76
38.44
68.29
130.22
350.08

78.15
92.32
77.22
38.35
67.21
135.65
349.97

76.69
90.37
75.74
37.84
67.46
133.48
347.56

76.24
89.23
74.43
38.53
70.04
132.97
344.21

73.52
85.74
72.76
37.59
68.48
128.40
338.28

76.46
89.39
77.09
37.78
72.82
133.19
347.07

Volume of trading (thousands of shares)
8 New York Stock Exchange........................................
9 American Stock Exchange.......................................

28,591
3,622

32,233
4,182

44,867
6,377

50,397
7,880

44,860
7,087

54,895
7,852

46,620
6,410

45,500
6,024

42,963
4,816

53,387
5,682

Customer financing (end-of-period balances, in millions of dollars)
10 Regulated margin credit at brokers/dealers2..............

11,035

11,619

14,721

12,731

13,293

14,363

14,721

14,242

14,171

11 Margin stock3..............................................................
12 Convertible bonds.......................................................
13 Subscription issues.....................................................

10,830
205
1

11,450
167
2

14,500
219
2

12,520
208
3

13,080
211
2

14,140
220
3

14,500
219
2

14,020
221
1

13,950
220
1

Free credit balances at brokers4
14 Margin-account..........................................................
15 Cash-account..............................................................

835
2,510

1,105
4,060

2,105
6,070

1,850
5,680

1,950
5,500

2,120
5,590

2,105
6,070

2,065
5,655

2,225
5,700

t
I
n.a.

1

Margin-account debt at brokers (percentage distribution, end of period)
16 T otal......................................

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

By equity class (in percent)5
Under 40..............................
40-49....................................
50-59....................................
60-69....................................
70-79....................................
80 or m ore..........................

33.0
28.0
18.0
10.0
6.0
5.0

16.0
29.0
27.0
14.0
8.0
7.0

14.0
30.0
25.0
14.0
9.0
8.0

13.0
28.0
26.0
15.0
10.0
8.0

13.0
29.0
25.0
15.0
10.0
8.0

13.0
18.0
31.0
18.0
11.0
9.0

14.0
30.0
25.0
14.0
9.0
8.0

20.0
30.0
22.0
13.0
8.0
7.0

20.0
31.0
21.0
13.0
8.0
7.0

17
18
19
20
21
22

Special miscellaneous-account balances at brokers (end of period)
23 Total balances (millions of dollars)6 ............................
Distribution by equity status (percent)
24 Net credit status.........................................................
Debt status, equity of
25 60 percent or more.................................................
26 Less than 60 percent...............................................

13,092

16,150

21,690

19,283

19,929

21,600

21,690

21,686

21,861

41.3

44.2

47.8

49.0

46.8

46.5

47.8

47.0

48.6

n.a.

45.1
13.6

47.0
8.8

44.4
7.7

43.4
7.6

46.2
7.0

46.8
6.7

44.4
7.7

43.9
9.1

43.1
8.3

I
t

f
1
1

Margin requirements (percent of market value and effective date)7

27 Margin stocks..............................................................
28 Convertible bonds......................................................
29 Short sales..................................................................

Mar. 11, 1968

June 8, 1968

May 6, 1970

Dec. 6, 1S»71

Nov. 24, 1972

70
50
70

80
60
80

65
50
65

55
50
55

65
50
65

1. Effective July 1976, includes a new financial group, banks and insurance
companies. With this change the index includes 400 industrial stocks (formerly
425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40
financial.
2. Margin credit includes all credit extended to purchase or carry stocks or related
equity instruments and secured at least in part by stock. Credit extended is
end-of-month data for member firms of the New York Stock Exchange.
In addition to assigning a current loan value to margin stock generally, Regu­
lations T and U permit special loan values for convertible bonds and stock acquired
through exercise of subscription rights.
3. A distribution of this total by equity class is shown on lines 17-22.
4. Free credit balances are in accounts with no unfulfilled commitments to the
brokers and are subject to withdrawal by customers on demand.




Jan. 3, 1974
50
50
50

5. Each customer’s equity in his collateral (market value of collateral less net
debit balance) is expressed as a percentage of current collateral values.
6. Balances that may be used by customers as the margin deposit required for
additional purchases. Balances may arise as transfers based on loan values of other
collateral in the customer’s margin account or deposits of cash (usually sales pro­
ceeds) occur.
7. Regulations G, T, and U of the Federal Reserve Board of Governors, pre­
scribed in accordance with the Securities Exchange Act of 1934, limit the amount
of credit to purchase and carry margin stocks that may be extended on securities
as collateral by prescribing a maximum, loan value, which is a specified percentage
of the market value of the collateral at the time the credit is extended. Margin
requirements are the difference between the market value (100 percent) and the
maximum loan value. The term “margin stocks” is defined in the corresponding
regulation.

Thrift Institutions

A ll

1.37 SAVINGS INSTITUTIONS Selected Assets and Liabilities
Millions of dollars, end o f period
1980
Account

1978

1981

1979
May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.P

634,346

Savings and loan associations
1 A ssets..............................................................

523,542

617,773

623,939

629,829

631,228

2 Mortgages..................................................
3 Cash and investment securities1 ...............
4 O th e r..........................................................

432,808 475,688 479,956 481,042 482,839 487,036 491,895 496,495
44,884 46,341 52,466 52,408 52,165 53,336 53,435 56,146
45,850 56,933 60,509 60,947 61,616 62,923 63,990 65,132

499,973
57,302
66,664

502,812
57,572
69,445

504,068 505,245
57,460 58,447
69,700 70,654

5 Liabilities and net worth..............................

523,542

617,773

623,939

629,829

631,228

430,953 470,004 481,411 486,680 488,896 497,403 496,991 500,861
42,907 55,232 55,199 54,796 41,239 55,396 58,418 60,727
31,990 40,441 41,529 40,613 39,882 41,005 42,547 44,325
10,917 14,791 13,670 14,183 13,579 14,391 15,871 16,402
10,721
9,582
7,185
7,031
7,112
7,540
8,243
8,654
9,904 11,506 16,141 12,966 14,364 16,190 12,776 14,502

503,365
62,067
45,505
16,562
8,853
16,433

510,959
64,491
47,045
17,446
8,783
12,227

512,946 515,166
62,938 62,306
46,629 46,388
16,309 15,918
8,120
7,821
14,104 16,070

6
7
8
9
10
11

Savings capital.............................................
Borrowed m oney.......................................
FH L B B ..................................................
O th er......................................................
Loans in process.........................................
O th e r..........................................................

578,962

578,962

592,931

592,931

594,397

594,397

596,620

596,620

603,295

603,295

609,320

609,320

634,346

12 Net worth2..................................................

29,057

32,638

32,995

32,924

32,787

32,766

32,892

33,029

33,221

33,319

33,120

32,983

13 Memo: Mortgage loan com­
mitments outstanding3........................

18,911

16,007

13,931

15,368

18,020

20,278

20,311

19,077

17,979

16,102

15,972

16,176

Mutual savings banks4
14 A ssets..............................................................

158,174

163,405

166,340

166,982

167,959

168,752

169,409

170,432

171,126

171,594

172,001

95,157
7,195

98,908
9,253

99,163
10,543

99,176
11,148

99,301
11,390

99,289
11,122

99,306
11,415

99,523
11,382

99,677
11,477

99,891
11,770

99,900
12,222

4,959
3,333
39,732
3,665
4,131

7,658
2,930
37,086
3,156
4,412

7,527
2,727
38,246
3,588
4,547

7,483
2,706
38,276
3,561
4,631

7,796
2,702
38,863
3,260
4,648

8,079
2,709
39,327
3,456
4,770

8,434
2,728
39,609
3,153
4,764

8,622
2,754
39,720
3,592
4,839

8,715
2,736
39,888
3,717
4,916

8,891
2,379
39,349
4,330
4,983

8,957
2,367
39,328
4,135
5,091

22 Liabilities........................................................

158,174

163,405

166,340

166,982

167,959

168,752

169,409

170,432

171,126

171,594

172,001

23
24
25
26
27
28
29
30

142,701 146,006 146,637 148,606 149,580 150,187 151,765 151,998
141,170 144,070 144,646 146,416 147,408 148,018 149,395 149,797
71,816 61,123 54,669 56,388 57,737 58,191 58,658 57,651
69,354 82,947 89,977 90,028 89,671 89,827 90,736 92,146
2,190
2,172
2,169
1,531
1,990
1,936
2,370
2,200
6,964
4,565
5,873
8,161
6,898
7,211
6,299
7,117
10,907 11,525 11,542 11,478 11,416 11,353 11,344 11,317

152,133
150,109
56,256
93,853
2,042
7,644
11,349

153,555
151,450
53,955
97,494
2,105
6,665
11,374

153,225
151,111
52,707
98,404
2,114
7,455
11,321

1,682

1,476

1,316

468,057

473,529

476,190

463,150

20,009
0,338 20,529 20,395 20,736 20,833 20,853 20,942
4,822
5,107
4,990
5,325
5,386
5,361
5,390
4,888
6,352
6,349
6,402
6,428
6,361
6,421
6,474
6,484
9,070
9,056
9,050
8,785
9,022
9,026
9,018
9,068
198,105 222,332 223,556 224,874 228,645 230,477 233,652 236,115
162,587 178,371 183,356 184,329 186,385 187,839 189,586 191,229
35,518 39,757 40,200 40,545 42,260 42,638 44,066 44,886
106,167 118,421 124,563 125,455 126,461 127,357 128,089 128,977
11,764 13,007 13,981 14,085 14,164 14,184 14,460 14,702
30,146 34,825 38,890 39,354 39,649 39,925 40,258 40,548
23,733 27,563 25,501 26,695 26,104 26,586 27,171 26,765

21,204
5,568
6,568
9,068
239,150
191,753
47,397
129,878
15,183
40,878
27,236

21,453
5,753
6,682
9,018
238,048
191,090
46,958
131,145
15,247
41,411
28,836

21,891
6,016
6,831
9,044
240,630
194,889
45,741
131,710
15,235
42,032
26,983

15
16
17
18
19
20
21

Loans
Mortgage................................................
O th e r......................................................
Securities
U.S. government5 ..................................
State and local government...................
Corporate and other6 ............................
C ash............................................................
Other assets.................................................

Deposits......................................................
Regular7..................................................
Ordinary savings..................................
Time and other...................................
O th e r......................................................
Other liabilities...........................................
General reserve accounts..........................
Memo: Mortgage loan com­
mitments outstanding8........................

4,400

3,182

1,883

1,898

1,939

1,849

1,883

1,817

n.a.

Life insurance companies
31 Assets..........................................................
32
33
34
35
36
37
38
39
40
41
42

Securities
Government...........................................
United States9......................................
State and lo cal....................................
Foreign10.............................................
Business...................................................
Bonds...................................................
Stocks...................................................
Mortgages...................................................
Real estate...................................................
Policy loans.................................................
Other assets.................................................

389,924

432,282

447,020

450,858

455,759

459,362

464,483

n.a.

Credit unions
43 Total assets/liabilities and
44
45
46
47
48
49
50
51

capital......................................................

62,348

65,854

66,103

68,102

68,429

69,553

70,515

70,702

71,335

71,709

70,754

71,446

Federal........................................................
State............................................................
Loans outstanding......................................
Federal.....................................................
State ........................................................
Savings........................................................
Federal (shares)......................................
State (shares and deposits).....................

34,760
27,588
50,269
27,687
22,582
53,517
29,802
23,715

35,934
29,920
53,125
28,698
24,426
56,232
35,530
25,702

36,341
29,762
49,469
26,550
22,919
57,197
31,403
25,794

37,555
30,547
48,172
25,773
22,399
59,310
32,764
26,546

37,573
30,856
47,829
25,435
22,394
60,574
33,472
27,102

38,168
31,385
47,884
25,401
22,483
61,403
33,964
27,439

39,219
31,296
47,211
25,381
21,830
63,728
35,961
27,767

39,155
31,547
47,221
25,288
21,933
63,957
36,030
27,927

39,428
31,907
47,299
25,273
22,026
64,304
36,183
28,121

39,801
31,908
47,774
25,627
22,147
64,399
36,348
28,051

39,142
31,612
47,309
25,272
22,037
63,874
35,915
27,959

39,636
31,810
47,451
25,376
22,075
64,357
36,236
28,121

For notes see bottom of page A28.




A28

Domestic Financial Statistics □ April 1981

1.38 FEDERAL FISCAL AND FINANCING OPERATIONS
M illions o f dollars
Calendar year
Type of account or operation

Fiscal
year

Fiscal
year

Fiscal
year

1978

1979

1980

1979
H2

1980
HI

1980
H2

1981

Dec.

Jan.

Feb.

U.S. budget
1 Receipts1. ....................................................
2 Outlays1-2 .....................................................
3 Surplus, or deficit( - ) ................................
4 Trust funds...............................................
5 Federal funds3 .........................................

401,997
450,804
-48,807
12,693
-61,532

465,940
493,635
-27,694
18,335
-46,069

520,050
579,613
-59,563
8,791
-67,752

233,952
263,004
-29,052
9,679
-38,773

270,864
289,905
-19,041
4,383
-23,418

262.152
310.972
-48.821
-2.551
-46.306

48,903
56,202
-7 ,2 9 9
5,661
-12,960

52,214
59,099
-6 ,8 8 4
-3 ,4 3 4
-3,451

38,394
53,969
-15,575
1,243
-16,819

-10,661
302

-13,261
793

- 14,549
303

-5 ,9 0 9
765

-7,735
-5 2 2

-7,552
376

-1,0 3 3
463

-9 6 0
-4 9 4

-1 ,3 4 0
-1 4 8

-59,166

-40,162

-73,808

-34,197

-27,298

-55,998

-7 ,8 6 9

-8 ,3 3 9

- 17,063

59,106

33,641

70,515

31,320

24,435

54,764

13,667

6,772

13,916

-3,023
3,083

-4 0 8
6,929

-355
3,648

3,059
-1 8 2

-3,482
6,345

-6,730
7,964

- 10,485
4,686

2,252
-6 8 5

3,909
762

22,444
16,647
5,797

24,176
6,489
17,687

20,990
4,102
16,888

15,924
4,075
11,849

14,092
3,199
10,893

12,305
3,062
9,243

12,305
3,062
9,243

13,917
3,038
10,879

10,106
2,284
7,822

Off-budget entities (surplus, or deficit
6 Federal Financing Bank outlays.................
7 Other4 ..........................................................

U.S. budget plus off-budget, including
Federal Financing Bank
8 Surplus, or deficit ( - ) ................................

Source or financing
Borrowing from the public.....................
Cash and monetary assets (decrease, or
increase ( - ))$..................................
11 Other6.......................................................
9
10

M em o:

12 Treasury operating balance (level, end of
13
14

period).............................................
Federal Reserve B anks..........................
Tax and loan accounts............................

1. Effective June 1978, earned income credit payments in excess of an indi­
vidual’s tax liability, formerly treated as income tax refunds, are classified as outlays
retroactive to January 1976.
2. Effective Oct. 1, 1980, the Pension Benefit Guaranty Corporation was re­
classified from an off-budget agency to an on-budget agency in the Department of
Labor.
3. Half-year figures are calculated as a residual (total surplus/deficit less trust
fund surplus/deficit).
4. Includes Postal Service Fund; Rural Electrification and Telephone Revolving
Fund; and Rural Telephone Bank.
5. Includes U.S. Treasury operating cash accounts; special drawing rights; gold
tranche drawing rights; loans to International Monetary Fund; and other cash and
monetary assets.

6. Includes accrued interest payable to the public; allocations of special drawing
rights; deposit funds; miscellaneous liability (including checks outstanding) and
asset accounts; seignorage; increment on gold; net gain/loss for U.S. currency
valuation adjustment; net gain/loss for IMF valuation adjustment; and profit on
the sale of gold.
Source. “Monthly Treasury Statement of Receipts and Outlays of the U.S.
Government,” Treasury Bulletin, and the Budget of the United States Government,
Fiscal Year 1981.

NOTES TO TABLE 1.37
1. Holdings of stock of the Federal Home Loan Banks are included in “other
assets.”
2. Includes net undistributed income, which is accrued by most, but not all,
associations.
3. Excludes figures for loans in process, which are shown as a liability.
4. The NAMSB reports that, effective April 1979, balance sheet data are not
strictly comparable with previous months. Beginning April 1979, data are reported
on a net-of-valuation-reserves basis. Prior to that date, data were reported on a
gross-of-valuation-reserves basis.
5. Beginning April 1979, includes obligations of U.S. government agencies. Before
that date, this item was included in “Corporate and other.”
6. Includes securities of foreign governments and international organizations
and, prior to April 1979, nonguaranteed issues of U.S. government agencies.
7. Excludes checking, club, and school accounts.
8. Commitments outstanding (including loans in process) of banks in New York
State as reported to the Savings Banks Association of the state of New York.
9. Direct and guaranteed obligations. Excludes federal agency issues not guar­
anteed, which are shown in the table under “Business” securities.




10.
Issues of foreign governments and their subdivisions and bonds of the In­
ternational Bank for Reconstruction and Development.
Note. Savings and loan associations: Estimates by the FHLBB for all associations
in the United States. Data are based on monthly reports of federally insured
associations and annual reports of other associations. Even when revised, data for
current and preceding year are subject to further revision.
Mutual savings banks: Estimates of National Association of Mutual Savings
Banks for all savings banks in the United States.
Life insurance companies: Estimates of the American Council of Life Insurance
for all life insurance companies in the United States. Annual figures are
annual-statement asset values, with bonds carried on an amortized basis and stocks
at year-end market value. Adjustments for interest due and accrued and for dif­
ferences between market and book values are not made on each item separately
but are included, in total, in “other assets.”
Credit unions: Estimates by the National Credit Union Administration for a
group of federal and state-chartered credit unions that account for about 30 percent
of credit union assets. Figures are preliminary and revised annually to incorporate
recent benchmark data.

Federal Finance
1.3 9

A29

U .S . B U D G E T R E C E I P T S A N D O U T L A Y S
Millions of dollars
Calendar year
Source or type

Fiscal
year
1978

Fiscal
year
1979

Fiscal
year
1980

1979

1980

1980

H2

HI

H2

1981
Jan.

Dec.

Feb.

R eceipts
1 All sources1 .....................................................

401,997

465,955

520,050

233,952

270,864

262,152

48,903

52,214

38,394

2 Individual income taxes, n e t .....................
3 W ithheld.................................................
4
Presidential Election Campaign Fund ..
5 Nonwithheld............................................
6 Refunds1 .................................................
Corporation income taxes
7 Gross receipts..........................................
8 Refunds...................................................
9 Social insurance taxes and contributions,
n e t.........................................................
10 Payroll employment taxes and
contributions2 ..................................
11 Self-employment taxes and
contributions3 ..................................
12 Unemployment insurance.......................
13 Other net receipts4..................................

180,988
165,215
39
47,804
32,070

217,841
195,295
36
56,215
33,705

244,069
223,763
39
63,746
43,479

115,488
105,764
3
12,355
2,634

119,988
110,394
34
49,707
40,147

131,962
120,924
4
14,592
3,559

23,725
22,844
0
1,150
269

30,964
20,896
1
10,121
54

15,348
19,076
4
1,134
4,867

65,380
5,428

71,448
5,771

72,380
7,780

29,169
3,306

43,434
4,064

28,579
4,518

10,155
768

2,826
667

1,816
1,252

123,410

141,591

160,747

71,031

86,597

77,262

11,078

14,363

17,211

99,626

115,041

133,042

60,562

69,077

66,831

10,268

12,533

14,562

4,267
13,850
5,668

5,034
15,387
6,130

5,723
15,336
6,646

417
6,899
3,149

5,535
8,690
3,294

188
6,742
3,502

0
224
586

426
773
631

495
1,563
591

18,376
6,573
5,285
7,413

18,745
7,439
5,411
9,252

24,329
7,174
6,389
12,741

9,675
3,741
2,900
5,254

11,383
3,443
3,091
6,993

15,332
3,717
3,499
6,318

2,391
632
517
1,174

2,523
635
535
1,035

3,273
558
489
951

18 All types1*6 ......................................................

450,804

493,635

579,613

263,004

289,905

310,972

56,202

59,099

53,969

19
20
21
22
23
24

National defense..........................................
International affairs....................................
General science, space, and technology...
Energy.........................................................
Natural resources and environment.........
Agriculture .................................................

105,186
5,922
4,742
5,861
10,925
7,731

117,681
6,091
5,041
6,856
12,091
6,238

135,856
10,733
5,722
6,313
13,812
4,762

62,002
4,617
3,299
3,281
7,350
1,709

69,132
4,602
3,150
3,126
6,668
3,193

72,457
5,430
3,205
3,997
7,722
1,892

12,605
1,249
618
845
1,325
1,355

12,682
396
440
915
1,134
2,984

12,841
1,005
531
826
1,016
352

Commerce and housing credit...................
Transportation ............................................
Community and regional development---Education, training, employment, social
services.................................................
29 Health...........................................................
30 Income security1-6........................................

3,324
15,445
11,039

2,565
17,459
9,482

7,782
21,120
10,068

3,002
10,298
4,855

3,878
9,582
5,302

3,163
11,547
5,370

1,051
1,870
872

988
3,810
867

-204
1,468
620

26,463
43,676
146,180

29,685
49,614
160,159

30,767
58,165
193,100

14,579
26,492
85,967

16,686
29,299
94,605

15,221
31,263
107,912

2,461
5,716
18,944

3,029
5,510
19,299

2,862
5,414
18,795

18,974
3,802
3,737
9,601
43,966
-15,772

19,928
4,153
4,153
8,372
52,556
-18,489

21,183
4,570
4,505
8,584
64,504
-21,933

10,113
2,174
2,103
4,286
29,045
-12,164

9,758
2,291
2,422
3,940
32,658
-10,387

11,731
2,299
2,432
4,191
35,909
-14,769

3,032
382
464
26
10,805
-7,400

1,923
383
356
1,293
3,822
-732

1,955
389
425
113
6,400
-838

14
15
16
17

Excise taxes.................................................
Customs deposits........................................
Estate and gift ta x e s..................................
Miscellaneous receipts5 ..............................
Outlays

25
26
27
28

31
32
33
34
35
36

Veterans benefits and services...................
Administration of justice ...........................
General government..................................
General-purpose fiscal assistance.............
Interest7 .......................................................
Undistributed offsetting receipts7 8 ...........

1. Effective June 1978, earned income credit payments in excess of an individual’s
tax liability, formerly treated as income tax refunds, are classified as outlays ret­
roactive to January 1976.
2. Old-age, disability, and hospital insurance, and railroad retirement accounts.
3. Old-age, disability, and hospital insurance.
4. Supplementary medical insurance premiums, federal employee retirement
contributions, and Civil Service retirement and disability fund.
5. Deposits of earnings by Federal Reserve Banks and other miscellaneous re­
ceipts.
o. Effective Oct. 1, 1980, the Pension Benefit Guaranty Corporation was re­




classified from an off-budget agency to an on-budget agency in the Department of
Labor.
7. Effective September 1976, “Interest” and “Undistributed offsetting receipts”
reflect the accounting conversion from an accrual basis to a cash basis for the
interest on special issues for U.S. government accounts.
8. Consists of interest received by trust funds, rents and royalties on the Outer
Continental Shelf, and U.S. government contributions for employee retirement.
Source. “Monthly Treasury Statement of Receipts and Outlays of the U.S.
Government” and the Budget of the U.S. Government, Fiscal Year 1981.

A30
1.4 0

Domestic Financial Statistics □ April 1981
F E D E R A L D E B T S U B JE C T T O S T A T U T O R Y L IM IT A T IO N
Billions of dollars
1979

1978

1980

Item
Dec. 31

Mar. 31

June 30

Sept. 30

Dec. 31

Mar. 31

June 30

Sept. 30

Dec. 31

1 Federal debt outstanding......................................................

797.7

804.6

812.2

833.8

852.2

870.4

884.4

914.3

936.7

2 Public debt securities........................................................
3 Held by public................................................................
4 Held by agencies............................................................

789.2
619.2
170.0

796.8
630.5
166.3

804.9
626.4
178.5

826.5
638.8
187.7

845.1
658.0
187.1

863.5
677.1
186.3

877.6
682.7
194.9

907.7
710.0
197.7

930.2
737.7
192.5

5 Agency securities..............................................................
6 Held by public................................................................
7 Held by agencies............................................................

8.5
7.0
1.5

7.8
6.3
1.5

7.3
5.9
1.5

7.2
5.8
1.5

7.1
5.6
1.5

7.0
5.5
1.5

6.8
5.3
1.5

6.6
5.1.
1.5

6.5
5.0
1.5

8 Debt subject to statutory limit..............................................

790.3

797.9

806.0

827.6

846.2

864.5

878.7

908.7

931.2

9 Public debt securities........................................................
10 Other debt1 .......................................................................

788.6
1.7

796.2
1.7

804.3
1.7

825.9
1.7

844.5
1.7

862.8
1.7

877.0
1.7

907.1
1.6

929.6
1.6

11 Memo: Statutory debt limit...............................................

798.0

798.0

830.0

830.0

879.0

879.0

925.0

925.0

935.1

1. Includes guaranteed debt of government agencies, specified participation certificates, notes to international lending organizations, and District of Columbia
stadium bonds.

1.41

G R O S S P U B L I C D E B T O F U .S . T R E A S U R Y

Note. Data from Treasury Bulletin (U.S. Treasury Department),

T y p e s a n d O w n e r s h ip

Billions of dollars, end of period
1980
Type and holder

1976

1977

1978

1981

1979
Nov.

Dec.

Jan.

Feb.

Mar.

1 Total gross public debt..........................................................

653.5

718.9

789.2'

845.1'

913.8

930.2

934.1

950.5

964.5

By type
Interest-bearing d e b t........................................................
Marketable.........................................................................
Bills.................................................................................
Notes...............................................................................
Bonds.............................................................................
Nonmarketable1 ................................................................
Convertible bonds2........................................................
State and local government series................................
Foreign issues3................................................................
Government................................................................
Public............................................. ............................
Savings bonds and notes...............................................
Government account series4 .........................................

652.5
421.3
164.0
216.7
40.6
231.2
2.3
4.5
22.3
20.8
1.5
72.3
129.7

715.2
459.9
161.1
251.8
47.0
255.3
2.2
13.9
22.2
21.0
1.2
77.0
139.8

782.4
487.5
161.7
265.8
60.0
294.8
2.2
24.3
29.6
28.0
1.6
80.9
157.5

844.0
530.7
172.6
283.4
74.7
313.2
2.2
24.6
28.8
23.6
5.3
79.9
177.5

909.4
605.4
208.7
311.1
85.5
304.0

928.9
623.2
216.1
321.6
85.4
305.7

929.8
628.5
220.4
321.2
86.9
301.3

946.5
642.9
229.0
324.5
89.4
303.5

963.2
661.1
235.3
336.5
89.3
302.1

24.0
24.5
18.1
6.4
72.8
182.4

23.8
24.0
17.6
6.4
72.5
185.1

23.7
23.8
17.4'
6.4
71.4
182.2

23.6
24.0
17.5
6.4
70.7
185.0

23.5
24.2
17.7
6.4
70.3
183.8

15 Non-interest-bearing d eb t.................................................

1.1

3.7

6.8

1.2

4.4

1.3

4.2

4.0

1.3

By holder5
U.S. government agencies and trust funds......................
Federal Reserve B anks.....................................................
Private investors................................................................
Commercial b an k s............................................................
Mutual savings banks........................................................
Insurance companies........................................................
Other companies................................................................
State and local governments.............................................

147.1
97.0
409.5
103.8
5.9
12.7
27.7
41.6

154.8
102.8
461.3
101.4
5.9
15.1'
22.7
55.2'

170.0
109.6'
508.6
93.1'
5.0
14.9
21.2'
64.4'

187.1
117.5
540.5
91.5'
4.7'
14.8'
25.0'
67.4'

189.7
120.4
603.2
101.8
5.6
15.4
24.8
74.6

192.5
121.3
616.4
104.7
5.8
15.2
24.6
74.7

189.5
116.7
627.4
108.1
5.8
15.3
22.8
73.0

Individuals
24 Savings b o nds................................................................
25 Other securities..............................................................
26 Foreign and international6.................................................
27 Other miscellaneous investors7.........................................

72.0
28.8
78.1
38.9

76.7
28.6
109.6
46.1'

80.7
30.3'
137.8
58.2'

79.9
36.2'
123.8
97.4'

72.5
52.1
132.6
123.4

72.2'
56.7
134.3
127.9

71.4
62.8
133.9
134.3

2
3
4
5
6
7
8
9
10
11
12
13
14

16
17
18
19
20
21
22
23

1. Includes (not shown separately): Securities issued to the Rural Electrification
Administration, depository bonds, retirement plan bonds, and individual retire­
ment bonds.
2. These nonmarketable bonds, also known as Investment Series B Bonds, may
be exchanged (or converted) at the owner’s option for \ lti percent, 5-year mar­
ketable Treasury notes. Convertible bonds that have been so exchanged are re­
moved from this category and recorded in the notes category (line 5).
3. Nonmarketable dollar-denominated and foreign currency-denominated series
held by foreigners.
4. Held almost entirely by U.S. government agencies and trust funds.
5. Data for Federal Reserve Banks and U.S. government agencies and trust
funds are actual holdings; data for other groups are Treasury estimates.




n.a.

n.a.

6. Consists of investments of foreign balances and international accounts in the
United States. Beginning with July 1974, the figures exclude non-interest-bearing
notes issued to the International Monetary Fund.
7. Includes savings and loan associations, nonprofit institutions, corporate pen­
sion trust funds, dealers and brokers, certain government deposit accounts, and
government sponsored agencies.
Note. Gross public debt excludes guaranteed agency securities and, beginning
in July 1974, includes Federal Financing Bank security issues.
Data by type of security from Monthly Statement of the Public Debt of the United
States (U.S. Treasury Department); data by holder from Treasury Bulletin.

Federal Finance

A31

1.42 U.S. GOVERNMENT MARKETABLE SECURITIES Ownership, by maturity
P ar value; m illions of dollars, end of period
1980

Type of holder

1978

1981

1979

1978

Dec.

Jan.

All maturities

1980

1981

Dec.

Jan.

1979

1 to 5 years

1 All holders..............................................................................................

487,546

530,731

623,186

628,482

162,886

164,198

197,409

192,893

2 U.S. government agencies and trust funds.....................................
3 Federal Reserve B anks...................................................................

12,695
109,616

11,047
117,458

9,564
121,328

9,527
116,708

3,310
31,283

2,555
28,469

1,990
35,835

1,990
34,043

4 Private investors...............................................................................
5 Commercial b an k s.......................................................................
6 Mutual savings banks ........................................................................
7 Insurance companies...................................................................
8 Nonfinancial corporations................................................................
9 Savings and loan associations......................................................
10 State and local governments........................................................
11
All others......................................................................................

365,235
68,890
3,499
11,635
8,272
3,835
18,815
250,288

402,226
69,076
3,204
11,496
8,433
3,209
15,735
291,072

492,294
77,868
3,917
11,930
7,758
4,225
21,058
365,539

502,248
80,451
3,950
11,992
6,954
3,837
20,500
374,563

128,293
38,390
1,918
4,664
3,635
2,255
3,997
73,433

133,173
38,346
1,668
4,518
2,844
1,763
3,487
80,546

159,585
44,482
1,925
4,504
2,213
2,289
4,595
99,577

156,860
43,436
1,904
4,445
2,203
2,380
4,553
97,941

Total, within 1 year

5 to 10 years

12 All holders..............................................................................................

228,516

255,252

297,385

303,043

50,400

50,440

56,037

58,727

13 U.S. government agencies and trust funds.....................................
14 Federal Reserve B anks....................................................................

1,488
52,801

1,629
63,219

830
56,858

792
54,308

1,989
14,809

871
12,977

1,404
13,458

1,404
13,354

15 Private investors...............................................................................
16 Commercial b an k s ............................................................................
17 Mutual savings banks ........................................................................
18 Insurance companies ........................................................................
19 Nonfinancial corporations................................................................
20
Savings and loan associations......................................................
21
State and local governments............................................................
22
All others......................................................................................

174,227
20,608
817
1,838
4,048
1,414
8,194
137,309

190,403
20,171
836
2,016
4,933
1,301
5,607
155,539

239,697
25,197
1,246
1,940
4,281
1,646
7,750
197,636

247,943
28,049
1,283
1,977
3,476
1,236
7,248
204,674

33,601
7,490
496
2,899
369
89
1,588
20,671

36,592
8,086
459
2,815
308
69
1,540
23,314

41,175
5,793
455
3,037
357
216
2,030
29,287

43,969
6,367
466
3,090
392
159
2,047
31,448

Bills, within 1 year

10 to 20 years

23 All holders..............................................................................................

161,747

172,644

216,104

220,423

19,800

27,588

36,854

36,817

24 U.S. government agencies and trust funds......................................
25 Federal Reserve B anks ........................................................................

2
42,397

0
45,337

1
43,971

41,558

3,876
2,088

4,520
3,272

3,686
5,919

3,686
5,891

26 Private investors ....................................................................................
27
Commercial b an k s ............................................................................
28 Mutual savings banks ........................................................................
29 Insurance companies ........................................................................
30 Nonfinancial corporations ................................................................
31
Savings and loan associations ..........................................................
32
State and local governments ............................................................
33 All others ............................................................................................

119,348
5,707
150
753
12
262
5,524
105,161

127,306
5,938
262
473
2,793
219
3,100
114,522

172,132
9,856
394
672
2,363
818
5,413
152,616

178,864
11,868
410
685
1,717
403
4,932
158,848

13,836
956
143
1,460
86
60
1,420
9,711

19,796
993
127
1,305
218
58
1,762
15,332

27,250
1,071
181
1,718
431
52
3,597
20,200

27,241
1,115
181
1,758
440
42
3,629
20,075

Other, within 1 year

Over 20 years

34 All holders..............................................................................................

66,769

82,608

81,281

82,620

25,944

33,254

35,500

37,002

35 U.S. government agencies and trust funds......................................
36 Federal Reserve B anks ........................................................................

1,487
10,404

1,629
17,882

829
12,888

791
12,750

1,031
8,635

1,472
9,520

1,656
9,258

1,656
10,767

37 Private investors....................................................................................
38 Commercial b an k s ............................................................................
39 Mutual savings banks ........................................................................
40 Insurance companies ........................................................................
41 Nonfinancial corporations................................................................
42 Savings and loan associations..........................................................
43 State and local governments............................................................
44 All others ............................................................................................

54,879
14,901

63,097
14,233
574
1,543
2,140
1,081
2,508
41,017

67,565
15,341
852
1,268
1,918

69,079

15,278
1,446
126
774
135
17

22,262

24,587
1,325
110
730
476
21

26,235

667
1,084
2,256
1,152
2,670
32,149

Note. Direct public issues only. Based on Treasury Survey of Ownership from
Treasury Bulletin (U.S. Treasury Department).
Data complete for U.S. government agencies and trust funds and Federal Reserve
Banks, but data for other groups include only holdings of those institutions that
report. The following figures show, for each category, the number and proportion
reporting as of Jan. 31, 1981: (1) 5,350 commercial banks,




16,181
873
1,291
1,759

828

833

2,337
45,020

2,316
45,826

1,470

113
842
130
19

3,616

3,339

9,164

16,340

3,086
18,838

1,484

116
722

443
21
3,023
20,425

460 mutual savings banks, and 723 insurance companies, each about 80 percent;
(2) 411 nonfinancial corporations and 478 savings and loan associations, each about
50 percent; and (3) 490 state and local governments, about 40 percent.
“All others,” a residual, includes holdings of all those not reporting in the
Treasury Survey, including investor groups not listed separately.

A32

Domestic Financial Statistics □ April 1981

1.43 U.S. GOVERNMENT SECURITIES DEALERS Transactions
Par value; averages of daily figures, in millions of dollars
1980
Item

1977

1978

Nov.
1 U.S. government securities

1980, week ending Wednesday

1981

1979
Jan.

Nov. 19

Nov. 26

Dec. 3

Dec. 10

Dec. 17

Dec. 24

10,838

10,285

13,183

21,716

21,576

22,277

20,76?

19,061

19,794

21,449

23,656

6,746
237
2,320
1,148
388

6,173
392
1,889
965
867

7,915
454
2,417
1,121
1,276

13,768
442
3,699
1,640
2,167

13,840
464
3,461
1,806
2,005

14,3434
636
3,494
1,594
2,211

13,520
432
3,942
943
1,933

13,014
372
3,186
850
1,639

12,124
397
2,257
2,840
2,175

13,559
577
3,492
1,706
2,115

13,781
347
5,409
1,800
2,320

By maturity

2
3
4
5
6

Bills...................................
Other within 1 y e a r.........
1-5 years............................
5-10 years..........................
Over 10 years.....................
By type o f customer

7 U.S. government securities
dealers........................
8 U.S. government securities
brokers......................
9 Commercial b an k s...........
10 All others1 ........................

1,268

1,135

1,448

1,745

1,807

1,687

2,095

1,525

1,172

1,712

2,098

3,709
2,294
3,567

3,838
1,804
3,508

5,170
1,904
4,660

9,536
2,366
8,069

8,382
2,661
8,726

9,773
2,547
8,271

8,872
2,007
7,795

8,387
2,166
6,984

8,835
2,496
7,290

8,851
2,613
8,273

9,060
3,129
9,369

11 Federal agency securities ..

1,729

1,894

2,723

3,074

2,789

3,656

2,751

2,462

2,667

3,058

3,281

1. Includes, among others, all other dealers and brokers in commodities and
securities, foreign banking agencies, and the Federal Reserve System.
N ote. Averages for transactions are based on number of trading days in the

period.

1 .4 4

U .S . G O V E R N M E N T S E C U R I T I E S D E A L E R S

Transactions are market purchases and sales of U.S. government securities deal­
ers reporting to the Federal Reserve Bank of New York. The figures exclude
allotments of, and exchanges for, new U.S. government securities, redemptions of
called or matured securities, or purchases or sales of securities under repurchase,
reverse repurchase (resale), or similar contracts.

P o s itio n s a n d S o u rc e s o f F in a n c in g

Par value; averages o f daily figures, in m illions of dollars
1980
Item

1977

1978

1981

1980, week ending Wednesday

1979
Nov.

Dec.

Jan.

Oct. 22

Oct. 29

Nov. 5

Nov. 12

Nov. 19

Nov. 26

Positions1
1 U.S. government securities..........

5,172

2,656

3,223

3,279

4,042

2
3
4
5
6

Bills...............................................
Other within 1 y e a r .....................
1-5 years........................................
5-10 years......................................
Over 10 years................................

4,772
99
60
92
149

2,452
260
-9 2
40
-4

3,813
-325
-455
160
30

3,132
-792
-1213
-13
1,075

4,081
-1,394
-4 3
104
1,294

7 Federal agency securities..............

693

606

1,471

357

643

f
1

n.a.
i

1

2,517

3,299

2,719

4,212

4,055

1,910

2,569
-995
229
-187
902

2,566
-712
970
-342
813

2,852
-563
261
-435
603

3,210
-646
712
6
932

3,874
-844
-195
74
1,146

2,310
-924
-791
50
1,267

1,188

1,066

700

576

78

314

Financing2
Reverse repurchase agreements3
8
9

Overnight and continuing.......
Term agreements.....................
Repurchase agreements4 .............
10 Overnight and continuing.......
11 Term agreements.....................

f

f
1

f
1I

1
n.a.
I

n.a.
1

n.a.
1

\

\

1

8,916
28,266

12,074
34,249

11,762
25,750

7,009
23,610

7,106
24,203

8,221
25,054

9,292
26,979

9,768
29,050

8,381
31,980

23,191
25,397

25,303
29,426

31,613
22,289

22,376
20,791

22,080
20,408

23,967
20,761

22,702
24,477

26,210
24,536

19,884
31,815

1. Net amounts fin terms of par values) of securities owned by nonbank dealer
firms and dealer departments of commercial banks on a commitment, that is,
trade-date basis, including any such securities that have been sold under agreements
to repurchase. The maturities of some repurchase agreements are sufficiently long,
however, to suggest that the securities involved are not available for trading pur­
poses. Securities owned, and hence dealer positions, do not include securities
purchased under agreement to resell.
2. Figures cover financing involving U.S. government and federal agency secu­
rities, negotiable CDs, bankers acceptances, and commercial paper.




3. Includes all reverse agreements, including those that have been arranged to
make delivery on sales and those for which the securities obtained have been used
as collateral on borrowings.
4. Includes both repurchase agreements undertaken to finance positions and
“matched book” repurchase agreements.
N ote. Data for positions are averages of daily figures, based on the number of
trading days in the period. Data for financing are based only on Wednesday figures.

Federal Finance

A33

1.45 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt outstanding
M illions of dollars, end of period
1980

Agency

1976

1977

1981

1978

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

1 Federal and federally sponsored agencies1 ........................

103,848

112,472

137,063

179,545

182,713

188,076

188,743

193,229

195,056

2 Federal agencies.................................................................
3
Defense Department2 ...................................................
4
Export-import Bank3-4 .................................................
5
Federal Housing Administration5 ................................
6
Government National Mortgage Association

22,419
1,113
8,574
575

22,760
983
8,671
581

23,488
968
8,711
588

26,930
651
10,232
508

27,618
641
10,728
495

27,797
636
10,715
490

27,941
631
10,696
486

28,606
610
11,250
477

28,769
600
11,239
476

participation certificates6........................................
Postal Service7 ...............................................................
Tennessee Valley Authority .............................................
United States Railway Association7 ..............................

4,120
2,998
4,935
104

3,743
2,431
6,015
336

3,141
2,364
7,460
356

2,842
1,770
10,445
482

2,842
1,770
10,660
482

2,842
1,770
10,835
509

2,842
1,770
11,010
506

2,817
1,770
11,190
492

2,817
1,770
11,375
492

10 Federally sponsored agencies1 ..........................................
11 Federal Home Loan B an k s .............................................
12 Federal Home Loan Mortgage Corporation ................
13 Federal National Mortgage Association.......................
14 Federal Land Banks...........................................................
15 Federal Intermediate Credit Banks..............................
16 Banks for Cooperatives.................................................
17 Farm Credit Banks1.......................................................
18 Student Loan Marketing Association8 .........................
19 O th e r..............................................................................

81,429
16,811
1,690
30,565
17,127
10,494
4,330
410
2

89,712
18,345
1,686
31,890
19,118
11,174
4,434
2,548
515
2

113,575
27,563
2,262
41,080
20,360
11,469
4,843
5,081
915
2

152,615
35,690
2,634
52,001
12,765
1,821
584
44,824
2,295
1

155,095
36,710
2,537
52,382
12,765
1,821
584
45,950
2,345
1

160,279
38,819
2,537
53,889
12,365
1,821
584
47,888
2,375
1

160,802
39,380
2,537
53,643
12,365
1,821
584
48,021
2,450
1

164,623
41,258
2,536
55,185
12,365
1,821
584
48,153
2,720
1

166,287
41,819
2,518
54,605
11,507
1,388
584
50,645
3,220
1

20 Federal Financing Bank debt7’9 ...........................................

28,711

38,580

51,298

80,024

82,559

83,903

85,440

87,460

88,420

Lending to federal and federally sponsored agencies
Export-import Bank4.........................................................
Postal Service7 .......................................................................
Student Loan Marketing Association8 .............................
Tennessee Valley Authority .................................................
United States Railway Association7 ................................

5,208
2,748
410
3,110
104

5,834
2,181
515
4,190
336

6,898
2,114
915
5,635
356

9,558
1,520
2,295
8,720
482

10,067
1,520
2,345
8,935
482

10,067
1,520
2,375
9,110
509

10,067
1,520
2,450
9,285
506

10,654
1,520
2,720
9,465
492

10,654
1,520
3,220
9,650
492

10,750
1,415
4,966

16,095
2,647
6,782

23,825
4,604
6,951

37,403
8,233
11,813

37,961
8,425
12,824

38,466
8,646
13,210

39,431
8,760
13,421

39,431
9,196
13,982

39,271
9,471
14,142

7
8
9

M em o:

21
22
23
24
25

Other Lending10
26 Farmers Home Administration........................................
27 Rural Electrification Administration .................................
28 O th e r .......................................................................................

1. In September 1977 the Farm Credit Banks issued their first consolidated bonds,
and in January 1979 they began issuing these bonds on a regular basis to replace
the financing activities of the Federal Land Banks, the Federal Intermediate Credit
Banks, and the Banks for Cooperatives. Line 17 represents those consolidated
bonds outstanding, as well as any discount notes that have been issued. Lines 1
and 10 reflect the addition of this item.
2. Consists of mortgages assumed by the Defense Department between 1957 and
1963 under family housing and homeowners assistance programs.
3. Includes participation certificates reclassified as debt beginning Oct. 1, 1976.
4. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter.
5. Consists of debentures issued in payment of Federal Housing Administration
insurance claims. Once issued, these securities may be sold privately on the se­
curities market.
6. Certificates of participation issued prior to fiscal 1969 by the Government
National Mortgage Association acting as trustee for the Farmers Home Admin­
istration; Department of Health, Education, and Welfare; Department




of Housing and Urban Development; Small Business Administration; and the
Veterans Administration.
7. Off-budget.
8. Unlike other federally sponsored agencies, the Student Loan Marketing As­
sociation may borrow from the Federal Financing Bank (FFB) since its obligations
are guaranteed by the Department of Health, Education, and Welfare.
9. The FFB, which began operations in 1974, is authorized to purchase or sell
obligations issued, sold, or guaranteed by other federal agencies. Since FFB incurs
debt solely for the purpose of lending to other agencies, its debt is not included in
the main portion oi the table in order to avoid double counting.
10. Includes FFB purchases of agency assets and guaranteed loans; the latter
contain loans guaranteed by numerous agencies with the guarantees of any partic­
ular agency being generally small. The Farmers Home Administration item consists
exclusively of agency assets, while the Rural Electrification Administration entry
contains both agency assets and guaranteed loans.

A34

Domestic Financial Statistics □ April 1981

1.46 NEW SECURITY ISSUES of State and Local Governments
Millions of dollars
1980

Type of issue or issuer.

1978

1979

Aug/
1 All issues, new and refunding1 .....................................................
2
3
4
5

Type of issue
General obligation.......................................................................
Revenue ........................................................................................
Housing Assistance Administration2...........................................
U.S. government loans................................................................

1981

1980
Sept.'

O ct/

Nov/

Dec.

Jan.

48,607

43,490

48,462

3,957

4,532

4,496

2,928

3,859

2,587

17,854
30,658

12,109
31,256

14.100
34.267

849
3,097

1,363
3,160

1,056
3,419

734
2,183

558
3,297

710
1,865

95

125

95

11

9

21

11

4

12

Type of issuer
6 State ..............................................................................................
7 Special district and statutory authority.......................................
8 Municipalities, counties, townships, school districts...................

6,632
24,156
17.718

4,314
23,434
15,617

5,304
26,972
16,090

303
2,282
1,361

643
2,792
1,088

195
2,863
1,416

323
1,638
955

127
2,332
1,395

478
1,383
714

9 Issues for new capital, total..........................................................

37,629

41,505

46,736

3,929

3,894

4,472

2,715

3,760

2,573

Use of proceeds
Education......................................................................................
Transportation...............................................................................
Utilities and conservation............................................................
Social welfare.................................................................................
Industrial a id .................................................................................
Other purposes.............................................................................

5,003
3,460
9.026
10,494
3,526
6,120

5,130
2,441
8,594
15,968
3.836
5.536

4.572
2,621
8,149
19,958
3,974
7.462

274
99
1,186
1,485
393
492

433
425
737
1,385
375
539

470
282
903
1,403
595
819

211
256
369
1,076
412
391

198
53
408
2,465
295
341

323
146
625
770
316
393

10
11
12
13
14
15

1. Par amounts of long-term issues based on date of sale.
2. Only bonds sold pursuant to the 1949 Housing Act, which are secured by
contract requiring the Housing Assistance Administration to make annual contri­
butions to the local authority.

1.47

Source. Public Securities Association.

N E W S E C U R I T Y IS S U E S o f C o r p o r a tio n s
Millions of dollars
Type of issue or issuer.
or use

1980
1978

1979

July
1 All issues1........................................................................

47,230

51,533r

2 Bonds................................................................................

36,872

40,208'

Type of offering
3 Public.........................................................................
4 Private placement.......................................................

19,815
17,057

25,814
14,394'

Industry group
Manufacturing............................................................
Commercial and miscellaneous..................................
Transportation............................................................
Public utility................................................................
Communication..........................................................
Real estate and financial...........................................

9,572
5.246
2,007
7.092
3,373
9,586

11 Stocks ..............................................................................
Type
12 Preferred.....................................................................
13 Common.....................................................................
Industry group
Manufacturing............................................................
Commercial and miscellaneous..................................
Transportation............................................................
Public utility................................................................
Communication..........................................................
Real estate and financial...........................................

5
6
7
8
9
10

14
15
16
17
18
19

72,886

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

8,026'

5,437'

5,025'

5,728

3,827

5,376

5,573

6,652'

4,213'

2,916'

3,275

2,055

2,528

3,373

41.545
10.978

5,354
1,298'

3,843
370'

2,421
495'

2.756
519

1,405
650

1,719
809

2,928
445

9,678'
3,948'
3.119'
8,153'
4,219
11,094'

15.217
6.463
3.217
9.504
6.658
11.464

2,867'
999
334'
351'
787
1,314'

1,545'
206'
346'
971
580
565'

553'
390'
409'
569'
517
477

614
312
236
754
791
568

88
432
86
565
163
722

470
302
110
277
584
784

1,635
231
353
800
48
306

10,358

11,325

20,363

1,374

1,224

2,109

2,453

1,772

2,848

2,200

2,832
7,526

3,574
7,751

3.624
16.739

360
1,014'

101
1,123

392
1,717

535
1,918

256
1,516

241
2,607

369
1,831

1,241
1,816
263
5,140
264
1,631

1,679
2,623
255
5,171
303
12,931

4.831
5.166
472
6.230
567
3.095

165'
390

293
238
32
463
46
152

502
569
54
633
6
345

848
321
117
526
67
574

418
509
53
227
113
452

839
904
18
669
65
348

614
603
124
562
14
284

52,523

1. Figures, which represent gross proceeds of issues maturing in more than one
year, sold for cash in the United States, are principal amount or number of units
multiplied by offering price. Excludes offerings of less than $100,000, secondary
offerings, undefined or exempted issues as defined in the Securities Act of




1981

1980

714
104

1933, employee stock plans, investment companies other than closed-end, intra­
corporate transactions, and sales to foreigners,
Source. Securities and Exchange Commission.

Corporate Finance
1.48 OPEN-END INVESTMENT COMPANIES
Millions of dollars

N e t S a le s a n d A s s e t P o s itio n

1980
Item

1979

A35

1981

1980
July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Investment Companies1

1 Sales of own shares2...................................................
2 Redemptions of own shares3.....................................
3 Net sales.....................................................................

7,495
8,393
-898

15,266
12,012
3,254

1,890
863
1,027

1,507
1,019
488

1,405
1,228
177

1,523
1,362
161

1,289
1,086
203

1,242
1,720
-478

4 Assets4 .......................................................................
5
Cash position5 ........................................................
6
Other.......................................................................

49,277
4,983
44,294

58,400
5,321
53,079

54,406
5,629
48,777

54,941
5,619
49,322

55,779
5,481
50,298

56,156
5,460
50,696

60,329
5,467
54,862

58,400
5,321
53,079

56,160
4,636
51,524

1,347
960
387
56,370
4,882
51,488

5. Also includes all U.S. government securities and other short-term debt se­
curities.

1. Excluding money market funds.
2. Includes reinvestment of investment income dividends. Excludes reinvestment
of capital gains distributions and share issue of conversions from one fund to another
in the same group.
3. Excludes share redemption resulting from conversions from one fund to an­
other in the same group.
4. Market value at end of period, less current liabilities.

1.49

1,676'
1,193
483'

Note. Investment Company Institute data based on reports of members, which
comprise substantially all open-end investment companies registered with the Se­
curities and Exchange Commission. Data reflect newly formed companies after
their initial offering of securities.

C O R P O R A T E P R O F IT S A N D T H E IR D IS T R IB U T IO N
Billions of dollars; quarterly d ata are at seasonally adjusted annual rates.
1979
Account

1978

1979

1980

1980
Q2

Q3

Q4

Ql

Q2

Q3

Q4

1 Profits before tax........................................................

223.3

255.4

245.5

250.9

262.0

255.4

277.1

217.9

237.6

249.2

2
3
4
5
6
7

83.0
140.3
44.6'
95.7'
122.9
218.6'

87.6
167.7
50.2'
117.6'
139.5
257.1'

82.3
163.1
56.0
107.1
158.3
265.4

86.4
164.5
49.8'
114.7'
137.2
251.9'

88.4
173.6
50.2'
123.4'
142.6
266.0'

87.2
168.2
51.6'
116.6'
146.4
263.0'

94.2
182.9
53.9'
129.0'
151.7
280.7'

71.5
146.4
55.7'
90.7'
155.4
246.1'

78.5
159.1
56.7'
102.4'
160.5
267.9'

85.1
164.1
57.7
106.4
165.4
271.8

Profits tax liability......................................................
Profits after tax..........................................................
Dividends................................................................
Undistributed profits.............................................
Capital consumption allowances................................
Net cash flow..............................................................

Source. Survey of Current Business (U.S. Department of Commerce).




A36
1 .5 0

Domestic Financial Statistics □ April 1981
N O N F IN A N C IA L C O R P O R A T IO N S

C u r r e n t A s s e ts a n d L ia b ilitie s

Billions of dollars, except for ratio
1980

1979
Account

1975

1976

1977

1978
Q2

Q3

Q4

Ql

Q2

Q3

1 Current assets.................................................................

759.0

826.8

902.1

1,030.0

1,108.2

1,169.5

1,200.9

1,235.2

1,233.8

1,255.8

2 C ash ............................................................................
3 U.S. government securities........................................
4 Notes and accounts receivable..................................
5 Inventories..................................................................
6 O th e r..........................................................................

82.1
19.0
272.1
315.9
69.9

88.2
23.4
292.8
342.4
80.1

95.8
17.6
324.7
374.8
89.2

104.5
16.3
383.8
426.9
98.5

100.1
18.6
421.1
465.2
103.2

103.7
15.8
453.0
489.4
107.7

116.1
15.6
456.8
501.7
110.8

110.2
15.1
471.2
519.5
119.3

111.5
13.8
464.2
525.7
118.7

113.2
16.3
479.2
525.1
122.0

7 Current liabilities...........................................................

451.6

494.7

549.4

665.5

724.7

777.8

809.1

838.3

828.1

852.1

373.7
291.7

406.4
318.3

438.8
339.0

456.3
352.8

467.9
370.4

463.1
364.9

477.3
374.8

8 Notes and accounts payable......................................
9 O th e r..........................................................................

264.2
187.4

281.9
212.8

313.2
236.2

10 Net working cap ital.......................................................

307.4

332.2

352.7

364.6

383.5

391.7

391.8

397.0

405.7

403.7

11 Memo: Current ratio 1 ..............................................

1.681

1.672

1.642

1.548

1.529

1.504

1.484

1.474

1.490

1.474

1. Ratio of total current assets to total current liabilities.

All data in this table reflect the most current benchmarks. Complete data are
available upon request from the Flow of Funds Section, Division of Research and
Statistics.

N ote. For a description of this series, see “Working Capital of Nonfinancial
Corporations” in the July 1978 B ulletin, pp. 533-37.

1.51

Source. Federal Trade Commission.

T O T A L N O N F A R M B U S I N E S S E X P E N D I T U R E S o n N e w P la n t a n d E q u i p m e n t
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1980

1979
Industry

1979

1980

1981

19812
Q4

Ql

Q2

Q3

Q4

Q l2

Q22

1 Total nonfarm business..............................................

270.46

295.63

325.72

284.30

291.89

294.36

296.23

299.58

310.10

317.29

Manufacturing
2 Durable goods industries ..........................................
3 Nondurable goods industries....................................

51.07
47.61

58.91
56.90

66.47
63.38

55.03
51.55

58.28
53.49

59.38
56.32

58.19
58.21

59.77
58.86

61.67
59.51

63.84
62.84

11.38

13.51

15.87

11.86

11.89

12.81

13.86

15.28

15.36

15.57

4.03
4.01
4.31

4.25
4.01
3.82

4.40
4.11
4.36

4.24
4.55
4.41

4.46
3.90
4.11

4.06
4.27
3.76

3.98
4.06
4.18

4.54
3.77
3.39

3.87
4.07
4.06

4.46
3.32
4.05

27.65
6.31
79.26
34.83

28.12
7.32
81.79
36.99

30.24
8.03
86.93
41.93

27.16
6.92
82.69
35.90

28.98
7.28
82.17
37.34

27.91
7.12
81.07
37.66

28.14
7.44
81.19
36.97

27.54
7.41
82.91
36.11

28.90
7.99
84.33
40.34

29.26
8.39
84.17
41.39

Nonmanufacturing

4 M ining........................................................................

5
6
7
8
9
10
11

Transportation
Railroad..................................................................
Air............................................................................
O th e r......................................................................
Public utilities
Electric....................................................................
Gas and other.........................................................
Trade and services.....................................................
Communication and other1........................................

1. “Other” consists of construction; social services and membership organizations; and forestry, fisheries, and agricultural services.




2. Anticipated by business,
Source. Survey o f Current Business (U.S. Dept, of Commerce).

Corporate Finance

A37

1.52 DOMESTIC FINANCE COMPANIES Assets and Liabilities
B illions o f dollars, end o f period

1980
Account

1974

1975

1976

1977

1978

1979
Q2

Ql

Q3

Q4

A ssets
Accounts receivable, gross
Consumer........................................................................
Business..........................................................................
T o tal............................................................................
Less: Reserves for unearned income and losses. . . .
Accounts receivable, n e t..............................................
Cash and bank deposits................................................
Securities.......................................................................
All other.........................................................................

36.1
37.2
73.3
9.0
64.2
3.0
.4
12.0

36.0
39.3
75.3
9.4
65.9
2.9
1.0
11.8

38.6
44.7
83.4
10.5
72.9
2.6
1.1
12.6

44.0
55.2
99.2
12.7
86.5
2.6
.9
14.3

52.6
63.3
116.0
15.6
100.4
3.5
1.3
17.3

65.7
70.3
136.0
20.0
116.0

9 Total assets.................................................................

79.6

81.6

89.2

104.3

122.4

10 Bank loans.....................................................................
11 Commercial paper..........................................................

9.7
20.7

8.0
22.2

6.3
23.7

5.9
29.6

Debt
12 Short-term, n.e.c........................................................
13 Long-term n.e.c..........................................................
14 Other...........................................................................

4.9
26.5
5.5

4.5
27.6
6.8

5.4
32.3
8.1

6.2
36.0
11.5

1
2
3
4
5
6
7
8

67.7
70.6
138.4
20.4
118.0

70.2
70.3
140.4
21.4
119.0

71.7
66.9
138.6
22.3
116.3

73.6
72.3
145.9
23.3
122.6

23.7

26.1

28.3

27.5

140.9

141.7

145.1

144.7

150.1

6.5
34.5

8.5
43.3

9.7
40.8

10.1
40.7

10.1
40.5

13.2
43.4

8.1
43.6
12.6

8.2
46.7
14.2

7.4
48.9
15.7

7.9
50.5
16.0

7.7
52.0
14.6

7.5
52.4
14.3

24.91

Liabilities

15 Capital, surplus, and undivided profits......................

12.4

12.5

13.4

15.1

17.2

19.9

19.2

19.9

19.8

19.4

16 Total liabilities and capital.........................................

79.6

81.6

89.2

104.3

122.4

140.9

141.7

145.1

144.7

150.1

1. Beginning Ql 1979, asset items on lines 6, 7, and 8 are combined.
Note. Components may not add to totals due to rounding.

1.53

D O M E S T IC F IN A N C E C O M P A N IE S

B u sin e s s C re d it

M illions o f dollars, seasonally adjusted except as noted

Type

Accounts
receivable
outstanding
Jan. 31.
19811 i

Changes in accounts
receivable
1980
Nov.

Extensions

1981
Dec.

Jan.

1980

Repayments

1981

1980

1981

Nov.

Dec.

Jan.

Nov.

Dec.

Jan.

1 Total...........................................................................................

72,289

410

1,982

702

15,681

18,308

16,811

15,271

16,326

16,109

2 Retail automotive (commercial vehicles)..................................
3 Wholesale automotive...............................................................
4 Retail paper on business, industrial and
farm equipment.................................................................
5 Loans on commercial accounts receivable and factored com­
mercial accounts receivable...............................................
6 All other business credit............................................................

12.248
11,782

-169
299

- 151
434

- 126
-310

908
5.455

923
5.564

921
5,554

1,077
5,156

1,074
5,130

1,047
5,864
1,106

1. Not seasonally adjusted.




23,615

149

876

458

1.612

1,562

1.564

1,463

686

7,626
17,018

-261
392

1,195
-372

519
161

5,455
2,251

7.827
2,432

6,362
2,410

5,716
1,859

6,632
2,804

5,843
2,249

A38
1.54

Domestic Financial Statistics □ April 1981
M ORTGA G E M ARKETS
Millions of dollars; exceptions noted.
1980
Item

1978

1979

1981

1980
Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Terms and yields in primary and secondary markets
Primary Markets

Conventional mortgages on new homes
Terms'

1
2
3
4
5
6

Purchase price (thousands of dollars).........
Amount of loan (thousands of dollars).......
Loan/price ratio (percent)............................
Maturity (years)...........................................
Fees and charges (percent of loan amount)2
Contract rate (percent per annum).............

62.6
45.9
75.3
28.0
1.39
9.30

74.4
53.3
73.9
28.5
1.66
10.48

83.5
59.3
73.3
28.2
2.10
12.25

83.7
58.7
72.2
27.6
2.10
11.95

84.0
61.3
75.0
28.2
2.16
12.20

77.1
56.1
75.2
27.6
2.15
12.62

90.1r
63.0
72.9
28.2
2.40
12.80

87.0'
63.0'75.6
29.1'
2.40'
12.80'

90.3
65.6
75.6
29.0
2.59
13.02

90.6
64.4
74.0
28.7
2.64
13.48

9.54
9.68

10.77
11.15

12.65
13.95

12.35
13.70

12.60
14.10

13.04
14.70

13.28r
15.05

13.26'
14.95

13.54
15.10

14.02
n.a.

13.42
12.55

14.26
12.84

14.38
12.91

14.47
13.55

14.08
13.62

14.23
13.50

14.79
14.13

n.a.
14.22

14.11
14.43

14.77
14.45

14.94
14.70

15.53
15.30

15.21
15.54

14.87r
14.95

15.24
15.05

15.67
15.33

57,327
38,969 <
18,358

57,390
38,955c'
18,435

57.434
38,972 <'
18,462

Yield (percent per annum)

7 FHLBB series3 .............................................
8 HUD series4...................................................
Secondary Markets
Yield (percent per annum)

9 FHA mortgages (HUD series)5 ...................
10 GNMA securities6.........................................
FNMA auctions7
11 Government-underwritten loans...............
12 Conventional loans....................................

9.70
8.98
9.77
10.01

11.17
11.77

Activity in secondary markets
Federal N ational Mortgage A ssociation

Mortgage holdings (end of period)
13 T otal................................................................................
14 FHA-insured..............................................................
15 VA-guaranteed..........................................................
16 Conventional..............................................................

43,311
21,243c
10.544
11.524

51.091
57,327
24,489( J38.969*'
10,496
16.106
18,358

Mortgage transactions (during period)
17 Purchases........................................................................
18 S a le s ................................................................................

12,303
9

10.805
0

8.100
0

500
0

771
0

579
0

855
0

185
0

161
0

Mortgage commitments9
19 Contracted (during period)..........................................
20 Outstanding (end of period)........................................

18,959
9,185

10.179
6.409

8.044
3.278

1.070
4.789

514
4.399

472
3.963

403
3,278

241
3,063

244
2,683

12,978
6,747.2

8,860
3,921

8.605
4.002

907.0
538.0

427.8
257.7

252.0
135.6

242.1
110.8

210.7
93.0

154.2
87.7

9,933.0
5,111

4,495
2,344

3.639
1.749

347.7
209.8

107.6
93.9

81.6
68.8

84.8
54.1

32.0
30.3

108.6
79.1

25 T otal................................................................................
26 FHA/VA......................................................................
27 Conventional..............................................................

3,064
1,243
1,165

4,035
1,102
1.957

5.067
1,033
2,830

4.543
1.050
3.492

4.727
1.044
3.629

4,843
1.038
3,715

5.067
1.033
2.830

5,039
1,029
2,825

n.a.
n.a.
n.a.

Mortgage transactions (during period)
28 Purchases ......................................................................
29 S a le s................................................................................

6,525
6,211

5,717
4,544

3,722
2,526

521
275

398
187

231
94

285
48

152
168

n.a.
n.a.

Mortgage commitments11
30 Contracted (during period)..........................................
31 Outstanding (end of period)........................................

7,451
1,410

5,542
797

3,859
447

218
934

222
726

180
653

126
447

203
487

n.a.
n.a.

55.632
37.5584
18.074

56.188
38.040£
18.148

56.619
38.381•
18.238 <

Auction of 4-month commitments to buy
Government-underwritten loans
Offered........................................................................
Accepted......................................................................
Conventional loans
23 Offered........................................................................
24 Accepted......................................................................

21
22

n. a.

Federal Home Loan Mortgage Corporation

Mortgage holdings (end of period)n)

1. Weighted averages based on sample surveys of mortgages originated by major
institutional lender groups. Compiled by the Federal Home Loan Bank Board in
cooperation with the Federal Deposit Insurance Corporation.
2. Includes all fees, commissions, discounts, and “points” paid (by the borrower
or the seller) in order to obtain a loan.
3. Average effective interest rates on loans closed, assuming prepayment at the
end of 10 years.
4. Average contract rates on new commitments for conventional first mortgages,
rounded to the nearest 5 basis points; from Department of Housing and Urban
Development.
5. Average gross yields on 30-year, minimum-downpayment. Federal Housing
Administration-insured first mortgages for immediate delivery in the private sec­
ondary market. Any gaps in data are due to periods of adjustment to changes in
maximum permissible contract rates.
6. Average net yields to investors on Government National Mortgage Associ­
ation
guaranteed,
mortgage-backed,
fully
modified
pass-through




securities, assuming prepayment in 12 years on pools of 30-year FHA/VA mortgages
carrying the prevailing ceiling rate. Monthly figures are unweighted averages of
Monday quotations for the month.
7. Average gross yields (before deduction of 38 basis points for mortgage serv­
icing) on accepted bids in Federal National Mortgage Association's auctions of
4-month commitments to purchase home mortgages, assuming prepayment in 12
years for 30-year mortgages. No adjustments are made for FNMA commitment
fees or stock related requirements. Monthly figures are unweighted averages for
auctions conducted within the month.
8. Beginning March 1980. FHA-insured and VA-guaranteed mortgage holdings
in lines 14 and 15 are combined.
9. Includes some multifamily and nonprofit hospital loan commitments in ad­
dition to 1- to 4-family loan commitments accepted in FNMA’s free market auction
system, and through the FNMA-GNMA tandem plans.
10. Includes participation as well as whole loans.
11. Includes conventional and government-underwritten loans.

Real Estate Debt

A39

1.55 MORTGAGE DEBT OUTSTANDING
M illions o f dollars, end o f period

1979
Type of holder, and type of property

1978

1979

1980

1980
04

01

02

03

04

1 All holders.........................................................................

1,168,486

1,324,856

1,449,633

1,333,550

1,355,402

1,378,414

1,412,515

1,449,633

2 1- to 4-family.....................................................................
3 Multifamily.........................................................................
4 Commercial.......................................................................
5

764,246
121.285
211.749
71.206

875.874
129.261
237.205
82.516

956.475
137.859
258.799
96.500

872.068
130.713
238.412
92.357

894.980
130.800
242.709
86.913

908.119
132.430
246,861
91,004

931,232
134,856
252.783
93,644

956,475
137,859
258,799
96,500

6 Major financial institutions...............................................
7 Commercial banks1........................................................
8
1- to 4-family..............................................................
9
Multifamily.................................................................
10
Commercial...............................................................
11
Farm ...........................................................................

848,177
214,045
129.167
10,266
66.115
8,497

938.676
245.187
149.460
11.180
75.957
8.590

998.025
264.602
160.746
12.304
82.688
8.864

939.487
245.998
145.975
12.546
77.096
10.381

951.402
250.702
152,553
11.557
77.993
8.599

958,892
253,103
153,753
11,764
79,110
8.476

977,454
258,003
156,737
11.997
80,626
8,643

998,025
264,602
160,746
12,304
82,688
8,864

12
13
14
15
16

Mutual savings banks....................................................
1- to 4-family..............................................................
Multifamily.................................................................
Commercial...............................................................
Farm ...........................................................................

95,157
62,252
16,529
16,319
57

98.908
64.706
17.180
16.963
59

99.827
65.307
17.340
17.120
60

98.908
64.706
17.180
16.963
59

99.151
64.865
17.223
17.004
59

99.150
64,864
17,223
17,004
59

99,306
64,966
17,249
17,031
60

99,827
65,307
17,340
17,120
60

17
18
19
20

Savings and loan associations.......................................
1- to 4-family..............................................................
Multifamily.................................................................
Commercial................................................................

432.808
356,114
36,053
40.641

475.797
394.436
37.588
43.773

502.718
417.759
39.011
45.948

475.797
394.436
37.588
43.773

479,078
398.114
37.224
43.740

481.184
398,864
37,340
43,980

492,068
408,908
38,185
44,975

502,718
417,759
39,011
45,948

21
22
23
24
25

Life insurance companies.............................................
1- to 4-familv..............................................................
Multifamily.................................................................
Commercial...............................................................
Farm ...........................................................................

106.167
14,436
19.000
62.232
10,499

118.784
16.193
19.274
71.137
12.180

130.878
18.420
19.813
79.843
12.802

118.784
16.193
19.274
71.137
12.180

122.471
16.850
19,590
73.618
12,413

125,455
17.796
19,284
75,693
12,682

128.077
17.996
19.357
77.995
12.729

130,878
18,420
19,813
79,843
12,802

26 Federal and related agencies.............................................
27 Government National Mortgage Association...............
1- to 4-family..............................................................
28
29
Multifamily.................................................................

81.853
3.509
877
2.632

97.293
3.852
763
3,089

114.325
4.453
709
3.744

97.293
3.852
763
3.089

104.133
3.919
749
3.170

108.742
4.466
736
3.730

110.695
4,389
719
3.670

114,325
4,453
709
3,744

30
31
32
33
34

Farmers Home Administration.....................................
1- to 4-family..............................................................
Multifamily.................................................................
Commercial................................................................
Farm ...........................................................................

926
288
320
101
217

1.274
417
71
174
612

3.725
1.033
818
391
1.483

1.274
417
71
174
612

2.845
1.139
408
409
889

3.375
1,383
636
402
954

3,525
978
774
370
1.403

3,725
1,033
818
391
1,483

35
36
37

Federal Housing and Veterans Administration...........
1- to 4-family..............................................................
Multifamily......... ........................................................

5.419
1.641
3.778

5.764
1.863
3.901

5.824
1.879
3.945

5.764
1.863
3.901

5.833
1.908
3.925

5.894
1.953
3.941

5.769
1.826
3.943

5,824
1,879
3,945

38
39
40

Federal National Mortgage Association......................
1- to 4-family..............................................................
Multifamily.................................................................

43.311
37.579
5.732

51.091
5.488
5.603

57.327
51.775
5.552

51.091
45.488
5.603

53.990
48.394
5.596

55.419
49,837
5.582

55.632
50,071
5,561

57,327
51.775
5,552

41
42
43

Federal Land Banks......................................................
1- to 4-family..............................................................
Farm ...........................................................................

25.624
927
24.697

31.277
1.552
29.725

38.131
2.099
36.032

31.277
1.552
29.725

33.311
1.708
31.603

35.574
1.893
33,681

36,837
1.985
34,852

38,131
2,099
36,032

44
45
46

Federal Home Loan Mortgage Corporation...............
1- to 4-family..............................................................
Multifamily.................................................................

3.064
2.407
657

4.035
3.059
976

4.865
3.710
1.155

4.035
3.059
976

4.235
3.210
1.025

4,014
3.037
977

4,543
3,459
1,084

4,865
3,710
1,155

47 Mortgage pools or trusts2 .................................................
48 Government National Mortgage Association...............
49
1- to 4-family..............................................................
50
Multifamily.................................................................

88,633
54.347
52.732
1.615

119.278
76.401
74.546
1,855

142.498
93.874
91.602
2.272

119.278
76.401
74.546
1.855

124.632
80.843
78.872
1.971

129.647
84.282
82,208
2.074

136.583
89.452
87.276
2,176

142,498
93,874
91.602
2.272

51
52
53

Federal Home Loan Mortgage Corporation...............
1- to 4-family..............................................................
Multifamily.................................................................

11.892
9.657
2.235

15.180
12.149
3.031

16.952
13.397
3.555

15.180
12.149
3.031

15.454
12.359
3,095

16.120
12.886
3.234

16.659
13.318
3,341

16,952
13,397
3,555

54
55
56
57
58

Farmers Home Administration.....................................
1- to 4-family..............................................................
Multifamily.................................................................
Commercial...............................................................
Farm ...........................................................................

22.394
13.400
1.116
3.560
4.318

27.697
14.884
2.163
4.328
6,322

31.672
16.865
2.323
5.258
7.226

27.697
14.884
2.163
4.328
6.322

28.335
14.926
2.159
4.495
6.755

29,245
15,224
2,159
4.763
7.099

30,472
16,226
2,235
5,059
6,952

31,672
16,865
2,323
5,258
7,226

59 Individual and others3 ......................................................
60 1- to 4-family.................................................................
61 Multifamily.....................................................................
62 Commercial...................................................................
63 Farm ..............................................................................

149,823
82.769
21,352
22,781
22,921

169,609
96,358
23.350
24.873
25,028

194.785
111.174
26.027
27.551
30.033

177.492
96.037
23.436
24.941
33.078

175.235
99.333
23,857
25,450
26.595

181,133
102.685
24.486
25.909
28.053

187,783
106,767
25,284
26,727
29,005

194,785
111,174
26,027
27,551
30,033

1. Includes loans held by nondeposit trust companies but not bank trust de­
partments.
2. Outstanding principal balances of mortgages backing securities insured or
guaranteed by the agency indicated.
3. Other holders include mortgage companies, real estate investment trusts, state
and local credit agencies, state and local retirement funds, noninsured pension
funds, credit unions, and U.S. agencies for which amounts are small or separate
data are not readily available.




N ote. Based on data from various institutional and governmental sources, with
some quarters estimated in part by the Federal Reserve in conjunction with the
Federal Home Loan Bank Board and the Department of Commerce. Separation
of nonfarm mortgage debt by type of property, if not reported directly, and in­
terpolations and extrapolations when required, are estimated mainly by the Federal
Reserve. Multifamily debt refers to loans on structures of five or more units.

A40
1.56

Domestic Financial Statistics □ April 1981
C O N S U M E R I N S T A L L M E N T C R E D IT * T o ta l O u ts ta n d in g , a n d N e t C h a n g e
M illions o f dollars

1980
Holder, and type of credit

1977

1978

1981

1979
Aug.

Sept.

Nov.

Oct.

Dec.

Jan.

Feb.

Amounts outstanding (end of period)
1 T otal............................................................

230,564

273,645

312,024

305,763

306,926

307,222

308,051

313,435

310,554

309,188

112,373
44,868
37,605
23,490
7,089
2,963
2,176

136,016
54.298
44,334
25,987
7,097
3,220
2,693

154,177
68,318
46,517
28,119
8,424
3,729
2,740

146,548
74,433
43.347
24.918
9.141
4,710
2,666

146,362
74.823
43,562
25.301
9.266
4,872
2.740

145.895
74.985
43.518
25.703
9.611
4.736
2.774

145.147
75,690
43,606
26,469
9,687
4,662
2.790

145,765
76,756
44,041
29,410
9,911
4,717
2,835

143,749
77,131
43,601
28,300
10,023
4,929
2,821

142,030
78,090
43,776
27,329
10,173
4,958
2,832

9 Automobile.............................................
10 Commercial banks..............................
11
Indirect p ap er..................................
12
Direct loans.....................................
13 Credit unions.......................................
14 Finance companies..............................

82,911
49,577
27,379
22,198
18,099
15,235

101,647
60.510
33.850
26,660
21,200
19.937

116,362
67,367
38,338
29,029
22,244
26,751

116,868
63,177
36,047
27,130
20.728
32,963

116.781
62.734
35.768
26.966
20.831
33.216

116.657
62,350
35.572
26,778
20.810
33.497

116.517
61,848
35,284
26,564
20.852
33,817

116,327
61.025
34,857
26,168
21,060
34,242

115,262
59,608
33,947
25,661
20,850
34,804

115,677
59,061
33,667
25,394
20,933
35,683

15 Revolving.................................................
16 Commercial banks..............................
17 Retailers...............................................
18 Gasoline companies............................

39,274
18,374
17,937
2,963

48,309
24,341
20.748
3,220

56,937
29.862
23,346
3.729

53.771
28,305
20.756
4,710

54.406
28,403
21.131
4.872

54.598
28.331
21.531
4.736

55,304
28.360
22,282
4,662

59,862
30,001
25.144
4.717

58,985
29.952
24,104
4,929

57,566
29,412
23,196
4,958

19 Mobile hom e...........................................
20 Commercial banks..............................
21 Finance companies..............................
22 Savings and loans................................
23 Credit unions.......................................

14,945
9,124
3,077
2,342
402

15.235
9.545
3,152
2,067
471

16.838
10.647
3.390
2,307
494

17,068
10,564
3.566
2.477
461

17.113
10.538
3.601
2.511
463

17.276
10,502
3.657
2.654
463

17.293
10.452
3.702
2.675
464

17.327
10.376
3,745
2,737
469

17,244
10,271
3,741
2,768
464

17,189
10,174
3,740
2,809
466

24 Other........................................................
25 Commercial b an k s..............................
26 Finance companies..............................
27 Credit unions.......................................
28 Retailers...............................................
29 Savings and loans................................
30 Mutual savings banks..........................

93,434
35,298
26,556
19,104
5,553
4,747
2,176

108,454
41,620
31,209
22,663
5,239
5,030
2,693

121.887
46,301
38,177
23.779
4,773
6,117
2,740

118.056
44.502
37.904
22.158
4.162
6.664
2.666

118.626
44.687
38.006
22.268
4,170
6.755
2.740

118.691
44.712
37.831
22.245
4.172
6.957
2.774

118,937
44.487
38,171
22,290
4.187
7,012
2,790

119,919
44,363
38,769
22,512
4,266
7,174
2,835

119,063
43,918
38,586
22,287
4,196
7,255
2,821

118,756
43,383
38,667
22,377
4,133
7,364
2,832

Bv major holder

2
3
4
5
6
7
8

Commercial b an k s..................................
Finance companies..................................
Credit unions...........................................
Retailers2 .................................................
Savings and loans....................................
Gasoline companies................................
Mutual savings banks..............................
Bv m ajor tvpe o f credit

Net change (during period)3
31 T otal............................................................

35,462

43,079

38,381

489

1,055

702

839

1,619

869

1,996

18,645
5,949
6,436
2,654
1.309
132
337

23,641
9,430
6,729
2,497
7
257
518

18,161
14,020
2.185
2.132
1.327
509
47

-682
387
465
160
5
136
18

-265
613
36
456
93
90
32

-336
454
63
134
246
98
43

-120
594
218
52
-1 4
72
37

-276
860
378
316
190
83
68

-1,357
1,113
288
409
232
106
78

-544
1,530
444
103
254
209
0

39 Automobile.............................................
40 Commercial banks..............................
41
Indirect p ap er..................................
42
Direct loans.....................................
43 Credit unions.......................................
44 Finance companies..............................

15,204
9,956
5,307
4,649
2,861
2,387

18,736
10.933
6.471
4,462
3,101
4,702

14,715
6.857
4,488
2,369
1,044
6,814

355
-344
-286
-58
215
484

84
-362
-282
-80
10
436

201
-348
-170
-178
18
531

245
-138
-4 4
-9 4
101
282

302
-491
-181
-310
174
619

-63
-1,253
-839
-414
206
984

979
-346
-229
-117
211
1,114

45 Revolving.................................................
46 Commercial b an k s..............................
47 Retailers...............................................
48 Gasoline companies............................

6,248
4,015
2,101
132

9,035
5,967
2,811
257

8.628
5,521
2.598
509

281
-2 4
169
136

478
-81
469
90

273
-19
194
98

265
121
72
72

616
211
322
83

557
59
392
106

441
166
66
209

49 Mobile hom e...........................................
50 Commercial banks..............................
51 Finance companies..............................
52 Savings and loans................................
53 Credit unions.......................................

371
387
-187
101
70

286
419
74
-276
69

1.603
1,102
238
240
23

33
-8
14
21
6

43
-22
30
35
0

141
-21
42
120
0

24
-33
44
11
2

66
-3 4
48
47
5

-2 4
-85
15
46
0

-4 7
-102
18
31
6

54 Other........................................................
55 Commercial banks..............................
56 Finance companies..............................
57 Credit unions.......................................
58 Retailers...............................................
59 Savings and loans................................
60 Mutual savings bdiks..........................

13,639
4,287
3,749
3,505
553
1.208
337

15,022
6,322
4,654
3,559
-314
283
518

13,435
4,681
6,968
1,118
-466
1,087
47

-180
-306
-111
244
-9
-16
18

450
200
147
26
-13
58
32

87
52
-119
45
-6 0
126
43

305
-7 0
268
115
-2 0
-25
37

635
38
193
199
-6
143
68

399
-7 8
114
82
17
186
78

623
-262
398
227
37
223
0

By major holder

32
33
34
35
36
37
38

Commercial b anks..................................
Finance companies..................................
Credit unions...........................................
Retailers2 .................................................
Savings and loans....................................
Gasoline companies................................
Mutual savings banks..............................
By major type o f credit

1. The Board's series cover most short- and intermediate-term credit extended
to individuals through regular business channels, usually to finance the purchase
of consumer goods and services or to refinance debts incurred for such purposes,
and scheduled to be repaid (or with the option of repayment) in two or more
installments.




2. Includes auto dealers and excludes 30-day charge credit held by travel and
entertainment companies.
3. Net change equals extensions minus liquidations (repayments, charge-offs,
and other credit); figures for all months are seasonally adjusted.

Consumer Debt

A41

1.57 CONSUMER INSTALLMENT CREDIT Extensions and Liquidations
Millions of dollars; m onthly d ata are seasonally adjusted.
1980
Holder, and type of credit

1977

1978

1981

1979
Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Extensions
1 T o tal................................................................................

257,600

297,668

324,777

26,176

27,064

27,365

25,991

27,149

27,059

28,706

By major holder
Commercial b an k s....................................................
Finance companies....................................................
Credit unions..............................................................
Retailers1 ...................................................................
Savings and loans......................................................
Gasoline companies..................................................
Mutual savings banks.................................................

117,896
41,989
34,028
42,183
4,978
14,617
1,909

142,433
50,505
38,111
44,571
3,724
16,017
2,307

154,733
61,518
34,926
47,676
5,901
18,005
2,018

11,107
5,155
3,085
4,263
454
1,941
171

11,671
5,355
2,752
4,596
539
1,965
186

11,977
5,323
2,872
4,291
695
2,009
198

11,432
4,852
2,795
4,250
444
2,024
194

11,484
5,185
3,035
4,497
658
2,061
229

10,397
5,904
2,994
4,673
715
2,130
246

11,648
6,193
3,167
4,500
751
2,284
163

By major type of credit
9 Automobile...............................................................
10 Commercial b anks.................................................
11
Indirect p ap er....................................................
12
Direct loans........................................................
13 Credit unions..........................................................
14 Finance companies.................................................

75,641
46,363
25,149
21,214
16,616
12,662

87,981
52,969
29,342
23,627
18,539
16,473

93,901
53,554
29,623
23,931
17,397
22,950

7,400
3,606
1,866
1,740
1,570
2,224

7,518
3,713
2,035
1,678
1,455
2,350

7,544
3,791
2,135
1,656
1,457
2,296

7,117
3,552
1,962
1,590
1,402
2,163

7,234
3,271
1,857
1,414
1,538
2,425

7,237
2,598
1,230
1,368
1,592^
3,047

8,333
3,560
1,944
1,616
1,613
3,160

15 Revolving...................................................................
16 Commercial banks.................................................
17 Retailers.................................................................
18 Gasoline companies...............................................

87,596
38,256
34,723
14,617

105,125
51,333
37,775
16,017

120,174
61,048
41,121
18,005

10,700
4,989
3,770
1,941

11,143
5,067
4,111
1,965

11,124
5,264
3,851
2,009

10,953
5,155
3,774
2,024

11,614
5,554
3,999
2,061

11,483
5,185
4,168
2,130

11,867
5,602
3,981
2,284

19 Mobile hom e..............................................................
20 Commercial banks.................................................
21 Finance companies.................................................
22 Savings and loans...................................................
23 Credit unions..........................................................

5,712
3,466
644
1,406
196

5,412
3,697
886
609
220

6,471
4,542
797
948
184

415
263
56
78
18

442
250
84
95
13

513
257
89
159
8

424
243
93
74
14

479
254
89
119
17

383
171
81
119
12

409
185
88
118
18

24 Other...........................................................................
25 Commercial b an k s.................................................
26 Finance companies.................................................
27 Credit unions..........................................................
28 Retailers.................................................................
29 Savings and loans..................................................
30 Mutual savings banks.............................................

88,651
29,811
28,683
17,216
7,460
3,572
1,909

99,150
34,434
33,146
19,352
6,796
3,115
2,307

104,231
35,589
37,771
17,345
6,555
4,953
2,018

7,661
2,249
2,875
1,497
493
376
171

7,961
2,641
2,921
1,284
485
444
186

8,184
2,665
2,938
1,407
440
536
198

7,497
2,482
2,596
1,379
476
370
194

7,822
2,405
2,671
1,480
498
539
229

7,956
2,443
2,776
1,390
505
596
246

8,097
2,301
2,945
1,536
519
633
163

2
3
4
5
6
7
8

Liquidations
31 T otal................................................................................

222,138

254,589

286,396

25,687

26,009

26,663

25,152

25,530

26,190

26,710

By major holder
Commercial ban k s....................................................
Finance companies....................................................
Credit unions..............................................................
Retailers1 ...................................................................
Savings and loans......................................................
Gasoline companies...................................................
Mutual savings banks.................................................

99,251
36,040
27,592
39,529
3,669
14,485
1,572

118,792
41,075
31,382
42,074
3,717
15,760
1,789

136,572
47,498
32,741
45,544
4,574
17,496
1,971

11,789
4,768
2,620
4,103
449
1,805
153

11,936
4,742
2,716
4,140
446
1,875
154

12,313
4,869
2,809
4,157
449
1,911
155

11,552
4,258
2,577
4,198
458
1,952
157

11,760
4,325
2,657
4,181
468
1,978
161

11,754
4,791
2,706
4,264
483
2,024
168

12,192
4,663
2,723
4,397
497
2,075
163

By major type of credit
39 Automobile................................................................
40 Commercial b an k s.................................................
41
Indirect p ap er.....................................................
42
Direct loans........................................................
43 Credit unions..........................................................
44 Finance companies.................................................

60,437
36,407
19,842
16,565
13,755
10,275

69,245
42,036
22,871
19,165
15,438
11,771

79,186
46,697
25,135
21,562
16,353
16,136

7,045
3,950
2,152
1,798
1,355
1,740

7,434
4,075
2,317
1,758
1,445
1,914

7,343
4,139
2,305
1,834
1,439
1,765

6,872
3,690
2,006
1,684
1,301
1,881

6,932
3,762
2,038
1,724
1,364
1,806

7,300
3,851
2,069
1,782
1,386
2,063

7,354
3,906
2,173
1,733
1,402
2,046

45 Revolving....................................................................
46 Commercial b an k s.................................................
47 Retailers..................................................................
48 Gasoline companies...............................................

81,348
34,241
32,622
14,485

96,090
45,366
34,964
15,760

111,546
55,527
38,523
17,496

10,419
5,013
3,601
1,805

10,665
5,148
3,642
1,875

10,851
5,283
3,657
1,911

10,688
5,034
3,702
1,952

10,998
5,343
3,677
1,978

10,926
5,126
3,776
2,024

11,426
5,436
3,915
2,075

49 Mobile hom e..............................................................
50 Commercial b an k s.................................................
51 Finance companies.................................................
52 Savings and loans...................................................
53 Credit unions..........................................................

5,341
3,079
831
1,305
126

5,126
3,278
812
885
151

4,868
3,440
559
708
161

382
271
42
57
12

399
272
54
60
13

372
278
47
39
8

400
276
49
63
12

413
288
41
72
12

407
256
66
73
12

456
287
70
87
12

54 Other...........................................................................
55 Commercial b an k s.................................................
56 Finance companies.................................................
57 Credit unions..........................................................
58 Retailers..................................................................
59 Savings and loans...................................................
60 Mutual savings banks.............................................

75,012
25,524
24,934
13,711
6,907
2,364
1,572

84,128
28,112
28,492
15,793
7,110
2,832
1,789

90,796
30,908
30,803
16,227
7,021
3,866
1,971

7,841
2,555
2,986
1,253
502
392
153

7,511
2,441
2,774
1,258
498
386
154

8,097
2,613
3,057
1,362
500
410
155

7,192
2,552
2,328
1,264
496
395
157

7,187
2,367
2,478
1,281
504
396
161

7,557
2,521
2,662
1,308
488
410
168

7,474
2,563
2,547
1,309
482
410
163

32
33
34
35
36
37
38

1. Includes auto dealers and excludes 30-day charge credit held by travel and
entertainment companies.




A42
1.58

Domestic Financial Statistics □ April 1981
F U N D S R A I S E D IN U .S . C R E D I T M A R K E T S
Billions of dollars; half-yearly d ata are at seasonally adjusted annual rates.
1979

1978
1975

Transaction category, sector

1976

1977

1978

1979

1980

1980
HI

H2

HI

H2

HI

H2

Nonfinancial sectors
1 Total funds raised..........................................................
2 Excluding equities......................................................
By sector and instrument
3 U.S. government........................................................
4 Treasury securities.................................................
5 Agency issues and mortgages................................
6 All other nonfinancial sectors....................................

7

210.8

271.9

338.5

400.4

394.9

363.3

384.8

416.0

380.5

408.2

321.1

405.6

200.7

261.0

335.3

398.3

390.6

349.8

387.4

409.2

377.7

402.3

313.0

386.5

85.4
85.8
- .4
125.4
10.1
115.3
112.1
9.9
102.2
98.4
16.1
27.2

69.0
69.1
-.1
202.8
10.8
192.0
182.0
10.5
171.5
123.5
15.7
22.8

56.8
57.6
- .9
281.7
3.1
278.6
267.8
2.7
265.1
175.6
23.7
21.0

53.7
55.1
-1.4
346.7
2.1
344.6
314.4
2.6
311.8
196.6
28.3
20.1

37.4
38.8
-1.4
357.6
4.3
353.2
336.4
3.5
333.0
199.9
18.9
21.2

79.2
79.8
- .6
284.1
13.6
270.6
254.2
11.4
242.8
175.6
22 2
21.6

61.4
62.3
- .9
323.4
-2.6
326.0
302.8
-1.8
304.6
188.3
27.8
20.6

46.0
47.9
-1.9
370.0
6.8
363.2
326.1
7.0
319.1
205.0
28.7
19.6

28.6
30.9
-2.3
351.9
2.8
349.1
338.6
2.8
335.8
198.8
16.0
22.4

46.1
46.6
- .5
362.1
5.9
356.2
333.0
4.1
328.9
201.1
21.8
19.9

64.5
65.2
- .6
256.5
8.0
248.5
227.0
6.0
221.0
169.1
18.0
33.4

93.8
94.4
- .6
311.7
19.1
292.7
281.5
16.8
264.7
182.1
26.4
21.9

39.5
*

96.3
7.4
18.4
8.8
89.5
40.6
27.0
2.9
19.0

104.6
10.2
23.3
10.2
115.2
50.6
37.3
5.2
22.2

109.1
8.9
25.7
16.2
133.0
44.2
50.6
10.9
27.3

81.5
8.7
21.6
14.0
67.2
3.1
37.9
5.8
20.4

100.1
9.3
21.2
9.3
116.3
50.1
43.1
5.3
17.8

109.1
11.2
25.4
11.1
114.1
51.0
31.4
5.1
26.5

109.8
8.1
26.0
16.6
137.0
48.3
48.2
12.0
28.4

108.5
9.7
25.4
15.9
127.8
39.0
52.9
9.7
26.2

73.6
6.5
22.1
15.5
51.9
-6 .4
9.6
29.7
18.9

21.1
12.4
82.5
12.5
66.1
-18.1
22.0

Corporate equities.................................................
Debt instruments....................................................
Private domestic nonfinancial sectors...................
Corporate equities.............................................
Debt instruments.................................................
Debt capital instruments................................
State and local obligations..........................
Corporate bonds.........................................
Mortgages
H om e......................................................
Multifamily residential............................
Commercial.............................................
F arm ........................................................
Other debt instruments..................................
Consumer credit.........................................
Bank loans n.e.c..........................................
Open market p a p er...................................
Other............................................................

4.6
3.8
9.7
-12.3
-2 .6
9.0

63.6
1.8
13.4
6.1
48.0
25.6
4.0
4.0
14.4

28
29

By borrowing sector...........................................
State and local governments..........................
Households......................................................
Farm ...............................................................
Nonfarm noncorporate...................................
Corporate........................................................

112.1
13.7
49.7
8.8
2.0
37.9

182.0
15.2
90.5
10.9
4.7
60.7

267.8
20.4
139.9
14.7
12.9
79.9

314.4
23.6
162.6
18.1
15.4
94.8

336.4
15.5
164.9
25.8
15.9
114.3

254.2
20.7
100.8
19.0
12.5
101.1

302.8
21.0
156.1
15.3
16.4
93.9

326.1
26.1
169.1
20.8
14.4
95.7

338.6
13.0
167.6
23.5
15.5
118.9

333.0
18.0
161.2
28.1
15.9
109.7

227.0
16.2
89.8
21.1
9.0
90.9

281.5
25.3
111.9
16.9
16.0
111.3

30
31
32
33
34
35
36

Foreign...................................................................
Corporate equities.............................................
Debt instruments.................................................
B onds.............................................................
Bank loans n.e.c..............................................
Open market p a p er.......................................
U.S. government lo a n s..................................

13.3
.2
13.2
6.2
3.9
.3
2.8

20.8
.3
20.5
8.6
6.8
1.9
3.3

13.9
.4
13.5
5.1
3.1
2.4
3.0

32.3
-.5
32.8
4.0
18.3
6.6
3.9

21.2
.9
20.3
3.9
2.3
11.2
3.0

29.9
2.2
27.7
.8
11.8
10.1
5.0

20.6
- .8
21.4
5.0
9.3
3.6
3.6

43.9
- .2
44.1
3.0
27.3
9.6
4.2

13.3
*
13.3
3.0
1.0
6.1
3.1

29.1
1.7
27.3
4.7
3.5
16.3
2.8

29.5
2.1
27.5
2.0
4.4
15.7
5.4

30.3
2.3
28.0
- .4
19.
4.5
4.6

8
9
10
11
12
13
14
15
16

17
18
19
20
21
22

23
24

25
26

27

11.0

89.3
11.0

Financial sectors
37 Total funds raised..........................................................

12.7

24.1

54.0

81.4

88.5

70.8

80.7

82.1

86.3

90.7

54.0

87.6

By instrument
U.S. government related...........................................
Sponsored credit agency securities........................
Mortgage pool securities.......................................
Loans from U.S. government................................
Private financial sectors.............................................
Corporate equities.................................................
Debt instruments....................................................
Corporate bonds.................................................
Mortgages............................................................
Bank loans n.e.c.................................................

13.5
2.3
10.3
.9
- .8
.6
-1 .4
2.9
2.3
-3.7

18.6
3.3
15.7
- .4
5.5
1.0
4.4
5.8
2.1
-3.7

26.3
7.0
20.5
-1.2
27.7
.9
26.9
10.1
3.1
-.3

41.4
23.1
18.3

52.4
24.3
28.1

47.5
24.3
23.2

38.5
21.9
16.6

44.3
24.3
20.1

45.8
21.5
24.2

59.0
27.0
32.0

45.8
25.1
20.7

40.0
1.7
38.3
7.5
.9
2.8

36.1
2.3
33.8
7.8
-1.2
- .4

23.3
3.4
19.8
7.2
- .9
1.0

42.2
2.2
40.0
8.5
2.1
2.5

37.8
1.1
36.7
6.4
- .3
3.1

40.5
2.0
38.4
8.7
- .5
- .7

31.7
2.5
29.2
7.0
-1 .9
- .2

8.1
3.1
5.1
10.3
-6 .8
1.1

49.2
23.5
25.7
38.4
3.8
34.6
4.0
5.0
1.0

Open market paper and repurchase
agreements..................................................
Loans from Federal Home Loan Banks...........

1.1
-4 .0

2.2
-2 .0

9.6
4.3

14.6
12.5

18.4
9.2

5.4
7.1

13.5
13.2

15.7
11.8

23.0
7.8

13.8
10.5

-3 .6
4.1

14.4
10.2

3.2
10.3
- .8
1.2
.3
-2 .3
1.0
.5
-1 .4
-.1

2.9
15.7
5.5
2.3
- .8
.1
.9
6.4
-2 .4
-1 .0

5.8
20.5
27.7
1.1
1.3
9.9
.9
17.6
-2.2
- .9

23.1
18.3
40.0
1.3
6.7
14.3
1.1
18.6
-1.0
-1.0

24.3
28.1
36.1
1.6
4.5
11.4
1.0
18.9
- .4
-1.0

24.3
23.2
23.3
.6
5.6
6.4
.8
8.8
- .9
2.0

21.9
16.6
42.2
1.5
5.8
16.4
1.0
18.9
-1.0
- .5

24.3
20.1
37.8
1.1
7.6
12.2
1.1
18.2
-1.0
-1.5

21.5
24.2
40.5
1.3
6.2
9.9
1.0
23.5
- .6
-1 .0

27.0
32.0
31.7
1.8
2.9
12.9
.9
14.3
-.1
- .9

25.1
20.7
8.1
.8
4.5
-4 .7
.8
6.8
-1 .4
1.4

23 5
25.7
38.4
.3
6.6
17.6
.7
10.8
- .3
2.7

38
39

40
41
42
43
44
45
46
47
48
49

By sector
SO SnnncnrpH rreHit aopnries

.............

51 Mortgage pools..........................................................
52 Private financial sectors.............................................
53
Commercial b an k s................................................
54 Bank affiliates........................................................
Savings and loan associations................................
55
56
Other insurance companies....................................
57 Finance companies................................................
58
REITs.....................................................................
59
Open-end investment companies..........................

All sectors
60 Total funds raised, by instrument..............................

223.6

295.9

392.5

481.8

483.4

434.1

465.5

498.1

466.7

498.9

375.0

493.2

61 Investment company shares.....................................
62 Other corporate equities...........................................
63 Debt instruments........................................................
64
U.S. government securities....................................
65
State and local obligations.....................................
Corporate and foreign bonds................................
66
67 Mortgages................................................................
68
Consumer credit....................................................
69 Bank loans n.e.c.....................................................
70 Open market paper and R P s ................................
71
Other loans............................................................
FRASER

-.1
10.8
212.9
98.2
16.1
36.4
57.2
9.7
-12.2
-1.2
8.7

-1 .0
12.9
284.1
88.1
15.7
37.2
87.0
25.6
7.0
8.1
15.3

- .9
4.9
388.5
84.3
23.7
36.1
133.9
40.6
29.8
15.0
25.2

-1.0
4.7
478.1
95.2
28.3
31.6
149.1
50.6
58.4
26.4
38.6

-1.0
7.6
476.8
89.9
18.9
32.9
158.6
44.2
52.5
40.5
39.5

2.0
15.0
417.1
126.8
22.2
35.6
124.8
3.1
50.7
21.4
32.6

- .5
.1
465.9
100.0
27.8
34.2
141.9
50.1
54.9
22.4
34.6

-1.5
9.4
490.2
90.4
28.7
29.1
156.3
51.0
61.8
30.4
42.5

-1 .0
5.8
461.9
74.5
16.0
34.1
159.8
48.3
48.6
41.1
39.4

- .9
9.3
490.5
105.2
21.8
31.5
157.4
39.0
56.2
39.8
39.5

1.4
9.8
363.9
110.5
18.0
45.7
110.8
-6 .4
15.0
41.9
28.3

2.7
20.2
470.4
143.2
26.4
25.5
138.8
12.5
86.4
.9
36.8

Digitized for


Flow o f Funds
1.59

A43

D IR E C T A N D IN D IR E C T S O U R C E S O F F U N D S T O C R E D IT M A R K E T S
Billions of dollars, except as noted; half-yearly data are at seasonally adjusted annual rates
1978
Transaction category, or sector

1975

1976

1977

1978

1979

1979

1980

1980
HI

H2

HI

H2

HI

H2

1 Total funds advanced in credit markets to nonfinancial
sectors ..............................................................................

200.7

261.0

335.3

398.3

390.6

349.8

387.4

409.2

377.7

402.3

313.0

386.5

By public agencies and foreign
Total net advances............................................................
U.S. government securities...........................................
Residential mortgages..................................................
FHLB advances to savings and loans..........................
Other loans and securities.............................................

44.6
22.5
16.2
-4 .0
9.8

54.3
26.8
12.8
-2.0
16.6

85.1
40.2
20.4
4.3
20.2

109.7
43.9
26.5
12.5
26.9

80.1
2.0
36.1
9.2
32.8

95.8
22.3
32.0
7.1
34.5

102.8
43.7
22.2
13.2
23.7

116.6
44.0
30.7
11.8
30.1

47.6
-22.1
32.6
7.8
29.2

112.5
26.2
39.6
10.5
36.3

101.7
24.9
33.5
4.1
39.3

89.9
19.7
30.4
10.2
29.6

15.1
14.8
8.5
6.1
13.5

8.9
20.3
9.8
15.2
18.6

11.8
26.8
7.1
39.4
26.3

20.4
44.6
7.0
37.7
41.4

22.5
57.5
7.7
-7.7
52.4

26.0
48.6
4.5
16.7
47.5

19.4
39.4
13.4
30.6
38.5

21.4
49.8
.5
44.9
44.3

23.8
49.9
.9
-27.0
45.8

21.3
65.2
14.5
11.7
59.0

29.6
43.6
14.6
13.9
45.8

22.5
53.6
-5 .6
19.5
49.2

State and local obligations.............................................
Corporate and foreign bonds.......................................
Residential mortgages..................................................
Other mortgages and loans...........................................
Less: Federal Home Loan Bank advances...................

169.7
75.7
16.1
32.8
23.2
17.9
-4 .0

225.4
61.3
15.7
30.5
52.6
63.3
-2 .0

276.5
44.1
23.7
22.5
83.3
107.3
4.3

330.0
51.3
28.3
22.5
88.2
152.2
12.5

362.9
87.9
18.9
25.6
81.8
157.9
9.2

301.5
104.6
22.2
25.5
58.1
98.2
7.1

323.2
56.3
27.8
24.1
87.1
141.1
13.2

336.9
46.4
28.7
20.9
89.5
163.3
11.8

375.9
96.6
16.0
26.9
85.1
159.1
7.8

348.8
79.1
21.8
24.3
78.5
155.6
10.5

257.1
85.6
18.0
32.4
46.5
78.6
4.1

345.8
123.5
26.4
18.7
69.8
117.7
10.2

Private financial intermediation
19 Credit market funds advanced by private financial
institutions.................................................................
20 Commercial banking......................................................
21 Savings institutions........................................................
22 Insurance and pension funds.........................................
23 Other finance.................................................................

122.5
29.4
53.5
40.6
-1 .0

190.1
59.6
70.8
49.9
9.8

257.0
87.6
82.0
67.9
19.6

296.9
128.7
75.9
73.5
18.7

292.5
121.1
56.3
70.4
44.7

265.6
103.5
57.6
76.4
28.1

301.7
132.5
75.8
76.9
16.6

292.0
125.0
75.9
70.2
20.9

307.5
124.6
57.7
75.4
49.8

277.4
117.6
54.9
65.5
39.6

229.6
57.2
31.4
84.6
56.3

301.8
149.9
83.8
68.2
-.1

24 Sources of funds...............................................................
25 Private domestic deposits.............................................
26 Credit market borrowing...............................................
27 Other sources.................................................................
28
Foreign funds..............................................................
29
Treasury balances......................................................
30
Insurance and pension reserves................................
31
Other, net...................................................................

122.5
92.0
-1 .4
32.0
-8.7
-1.7
29.7
12.7

190.1
124.6
4.4
61.0
-4.6
-.1
34.5
31.2

257.0
141.2
26.9
89.0
1.2
4.3
49.4
34.1

296.9
142.5
38.3
116.0
6.3
6.8
62.7
40.3

292.5
136.7
33.8
122.0
26.3
.4
49.0
46.3

265.6
163.9
19.8
81.9
-20.0
-2.0
58.5
45.4

301.7
138.3
40.0
123.5
5.7
1.9
66.2
49.6

292.0
146.7
36.7
108.6
6.9
11.6
59.2
31.0

307.5
121.7
38.4
147.3
49.4
5.1
53.9
38.9

277.4
151.6
29.2
96.6
3.2
-4.3
44.0
53.7

229.6
147.7
5.1
76.8
-18.1
-2.5
59.6
37.9

301.8
180.1
34.6
87.1
-21.8
-1.5
57.4
53.1

Private domestic nonfinancial investors
32 Direct lending in credit markets.......................................
33 U.S. government securities...........................................
34 State and local obligations.............................................
35 Corporate and foreign bonds.......................................
36 Commercial paper..........................................................
37 Other..............................................................................

45.8
24.1
8.4
8.4
-1.3
6.2

39.7
16.1
3.8
5.8
1.9
12.0

46.3
23.0
2.6
-3.3
9.5
14.5

71.5
33.2
4.5
-1.4
16.3
18.8

104.2
57.8
-2.5
11.1
10.7
27.1

55.7
30.7
-1.8
5.4
-2.4
23.9

61.4
32.1
7.0
-3.7
8.2
17.8

81.6
34.4
2.0
1.0
24.4
19.8

106.8
64.1
-2.3
7.8
12.5
24.7

100.5
51.5
-2 .7
14.2
9.0
28.5

32.6
13.2
-2 .9
8.3
-6.2
20.2

78.7
48.2
- .8
2.4
1.3
27.6

38 Deposits and currency......................................................
39 Security RPs...................................................................
40 Money market fund shares...........................................
41 Time and savings accounts...........................................
42
Large at commercial banks.......................................
43
Other at commercial banks.......................................
44
At savings institutions...............................................
45 Money.............................................................................
46
Demand deposits........................................................
47
Currency.....................................................................

98.1
.2
1.3
84.0
-15.8
40.3
59.4
12.6
6.4
6.2

131.9
2.3
113.5
-13.2
57.6
69.1
16.1
8.8
7.3

149.5
2.2
.2
121.0
23.0
29.0
69.0
26.1
17.8
8.3

151.8
7.5
6.9
115.2
45.9
8.2
61.1
22.2
12.9
9.3

144.7
6.6
34.4
84.7
.4
39.3
45.1
18.9
11.0
7.9

173.5
4.7
29.2
131.8
12.7
62.9
56.2
7.8
-1.8
9.6

148.7
9.8
6.1
110.7
33.9
18.4
58.5
22.1
11.6
10.5

154.8
5.1
7.7
119.8
57.9
-1 .9
63.8
22.3
14.2
8.1

131.1
18.5
30.2
71.4
-25.3
41.3
55.4
10.9
1.6
9.3

158.1
-5 .3
38.6
97.9
26.0
37.3
34.7
26.8
20.3
6.5

156.7
5.3
61.9
91.9
-12.0
60.6
43.4
-2 .4
-11.4
9.0

190.1
4.0
-3 .4
171.7
37.4
65.2
69.1
17.9
7.8
10.1

currency ..........................................................................

143.9

171.6

195.8

223.3

248.9

229.1

210.1

236.4

237.9

258.7

189.3

268.8

Public support rate (in percent)......................................
Private financial intermediation (in percent)................
Total foreign funds............................................................

22.2
72.2
-2 .6

20.8
84.3
10.6

25.4
93.0
40.5

27.5
90.0
44.0

20.5
80.6
18.6

27.4
88.1
-3.3

26.5
93.4
36.3

28.5
86.7
51.8

12.6
81.8
22.4

28.0
79.5
14.9

32.5
89.3
-4 .2

23.3
87.3
-2.3

Memo: Corporate equities not included above
52 Total net issu es......................................................................
53 Mutual fund shares........................................................
54 Other equities................................................................

10.7
-.1
10.8

11.9
-1.0
12.9

4.0
-.9
4.9

3.7
-1.0
4.7

6.6
-1.0
7.6

17.0
-2.0
15.0

- .4
- .5
.1

7.9
-1.5
9.4

4.8
-1 .0
5.8

8.4
- .9
9.3

11.1
1.4
9.8

22.8
2.7
20.2

55 Acquisitions by financial institutions................................
56 Other net purchases..........................................................

9.6
1.1

12.3
-.4

7.4
-3.4

7.6
-3.8

15.7
-9.1

18.7
-1.7

.4

14.7
-6.8

12.5
-7 .7

18.9
-10.5

16.7
-5 .6

20.7
2.1

2
3
4
5
6

Total advanced, by sector
7 U.S. government...............................................................
8 Sponsored credit agencies................................................
11 Agency borrowing not included in line 1 ........................
Private domestic funds advanced
12 Total net advances............................................................
14
15
16
17
18

48 Total of credit market instruments, deposits and
49
50
51

8
Notes by line number.

1.
2.
6.
11.
12.
17.
25.
26.
28.
29.

Line 2 of p. A42.
Sum of lines 3-6 or 7-10.
Includes farm and commercial mortgages.
Credit market funds raised by federally sponsored credit agencies, and net
issues of federally related mortgage pool securities. Included below in lines 3,
13, and 33.
Line.l less line 2 plus line 11. Also line 19 less line 26 plus line 32. Also sum
of lines 27, 32, 39, 40, 41, and 46.
Includes farm and commercial mortgages.
Sum of lines 39, 40, 41, and 46.
Excludes equity issues and investment company shares. Includes line 18.
Foreign deposits at commercial banks, bank borrowings from foreign branches,
and liabilities of foreign banking agencies to foreign affiliates.
Demand deposits at commercial banks.




30. Excludes net investment of these reserves in corporate equities.
31. Mainly retained earnings and net miscellaneous liabilities.
32. Line 12 less line 19 plus line 26.
33-37. Lines 13-17 less amounts acquired by private finance. Line 37 includes
mortgages.
47. Mainly an offset to line 9.
48. Lines 32 plus 38, or line 12 less line 27 plus 45.
49. Line 2/line 1.
50. Line 19/line 12.
51. Sum of lines 10 and 28.
52. 54. Includes issues by financial institutions.
Note. Full statements for sectors and transaction types quarterly, and annually
for flows and for amounts outstanding, may be obtained from Flow of Funds
Section, Division of Research and Statistics, Board of Governors of the Federal
Reserve System, Washington, D.C. 20551.

A44

Domestic Nonfinancial Statistics □ April 1981

2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures
1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted.
1980
Measure

1978

1979

1981

1980
July

Aug.

Sept.

Oct

142.8
142.4
142.0
142.9
144.5
136.5

143.8
142.8
142.7
142.9
147.6
138.6

145.3
143.9
144.3
143.2
150.6
142.4

147.2
145.8
146.6
144.8
152.4
146.4

1 Industrial production1 ..........................
Market groupings
2 Products, total.......................................
3 Final, to tal.........................................
4
Consumer goods............................
5
Equipment.....................................
6 Intermediate.......................................
7 Materials.................................................

144.8
135.9
149.1
132.8
154.1
148.3

150.0
147.2
150.8
142.2
160.5
156.4

146.8'
145.4
145.5
145.1
151.9
147.7'

148.7
147.5
148.0
146.7
153.5
150.5

149.9'
148.3'
147.7
149.1'
156.1
152.6'

149.6
147.8
146.9
149.1
156.1
153.4

150.3
148.8
147.7
150.2
156.2
153.7

150.4

151.0

80.0
81.8

79.4
81.3

79.5
81.3

150.2
148.2
147.2
149.5
157.8
153.9

Industry groupings
8 Manufacturing.......................................
Capacity utilization (percent)12
9 Manufacturing....................................
10 Industrial materials industries...........

84.4
85.6

85.7
87.4

79.0
79.8

74.9
73.7

75.5
74.6

76.7
76.4

78.2
78.4

79.4
80.4

79.9
81.3'

185.6

161.8

148.0

192.0

163.0

167.0

210.0

193.0

185.0

177.0

183.0

12 Nonagricultural employment, total4 . ..
13 Goods-producing, to ta l.....................
14
Manufacturing, total.......................
15
Manufacturing, production-worker
16 Service-producing..............................
17 Personal income, total..........................
18 Wages and salary disbursements
19
Manufacturing................................
20 Disposable personal income5 ...............

131.
109.
105.
103.
143.
273.
258.
223.
268.

136.6
113.7
108.3
105.4
149.2
308.5
289.5
248.6
301.5

137.8
110.9
104.7
99.8
152.5
342.9
314.7
261.5
334.5

136.6
108.0
102.0
96.2
152.3
343.0
310.6
254.3

137.0
108.6
102.5
97.0
152.6
345.9
314.4
258.5
338.0

137.4
109.3
103.1
97.7
152.7
350.1
317.8
262.9

137.9
110.0
103.7
100.7
153.1
354.7
323.6
267.6

138.2
110.7
104.3
99.1
153.3
358.3
328.0
273.1
348.4'

138.5
111.1
104.4
99.2
153.5
361.4
330.5
275.8

139.0
111.7
104.6
99.4
154.0
364.9
335.3
280.0

139.3
111.5
104.8
99.5
154.5
367.3
337.0
281.8

139.3
111.5
104.7
99.6
154.5
n.a.
n.a.
n.a.

21 Retail sales6 ...........................................

253.8

281.6

300.0

299.1

300.0'

306.0

308.0

313.8

315.8

326.6

331.9

332.2

Prices7
22 Consumer...........................................
23 Producer finished goods.....................

195.4
194.6

217.4
216.1

246.8
246.9

247.8
249.3

249.4
251.4

251.7
251.4

253.9
255.4

256.2
255.6

258.4
256.9

260.5
259.8

263.2
262.4

n.a.
265.3

11 Construction contracts (1972 = 100)3. .

1. The industrial production and capacity utilization series have been revised
back to January 1979.
2. Ratios of indexes of production to indexes of capacity. Based on data from
Federal Reserve, McGraw-Hill Economics Department, and Department of Com­
merce.
3. Index of dollar value of total construction contracts, including residential,
nonresidential, and heavy engineering, from McGraw-Hill Information Systems
Company, F. W. Dodge Division.
4. Based on data in Employment and Earnings (U.S. Department of Labor).
Series covers employees only, excluding personnel in the Armed Forces.
5. Based on data in Survey of Current Business (U.S. Department of Commerce).
Series for disposable income is quarterly.

2 .1 1

6. Based on Bureau of Census data published in Survey of Current Business.
7. Data without seasonal adjustment, as published in Monthly Labor Review.
Seasonally adjusted data for changes in the price indexes may be obtained from
the Bureau of Labor Statistics, U.S. Department of Labor.
N ote. Basic data (not index numbers) for series mentioned in notes 4, 5, and
6, and indexes for series mentioned in notes 3 and 7 may also be found in the
Survey of Current Business.
Figures for industrial production for the last two months are preliminary and
estimated, respectively.

O U T P U T , C A P A C IT Y , A N D C A P A C IT Y U T IL IZ A T IO N
Seasonally adjusted
1980

1981

1980

1980

1981

1981

Series
Q2

Q3

Q4

Ql

Output (1967 = 100)

Q2

Q3

Q4

Ol

Capacity (percent of 1967 output)

02

03

04

Ql

Utilization rate (percent)

1 Manufacturing........................................................
2 Primary processing.............................................
3 Advanced processing.........................................

143.9

141.0

148.7

150.8

184.8

186.3

187.8

189.3

77.9

75.7

79.2

79.7

145.0
143.3

139.6
141.8

153.1'
146.4

156.4
148.0

190.0
182.0

191.5
183.5

193.0
185.0

194.3
186.6

76.3
78.7

72.9
77.3

79.4'
79.1

80.5
79.3

4 Materials..................................................................

145.1

139.2

149.8

153.7

184.3

185.8

187.2

188.7

78.7

74.9

80.0

81.5

5 Durable goods....................................................
6 Metal materials...............................................
7 Nondurable goods...............................................
8 Textile, paper, and chemical..........................
9
Textile..........................................................
10
Paper............................................................
11
Chemical......................................................
12 Energy materials.................................................

140.6
100.6
166.0
171.9
116.4
142.1
208.3
130.0

131.5
86.6
161.9
165.6
113.4
142.9
197.9
129.6

145.1
109.9
175.5
182.7'
113.2'
148.9'
226.9'
129.5'

150.0
116.6
179.4
186.9
110.9
149.4
235.4
130.7

188.6
140.8
202.0
211.0
139.2
156.0
264.6
151.8

190.0
140.9
204.3
213.7
139.6
157.4
268.7
152.6

191.5
141.0
206.5
216.2
140.0
158.8
272.9
153.1

192.8
141.1
208.5
218.5
140.3
160.0
276.4
154.1

74.6
71.4
82.2
81.5
83.7
91.0
78.7
85.6

69.2
61.5
79.2
77.5
81.2
90.7
73.6
85.0

75.8
78.0
85.0
84.5
80.9'
93.8'
83.2'
84.6'

77.8
82.6
86.0
85.5
79.0
93.4
85.2
84.8




Labor Market

A45

2.11 Continued
Previous cycle1

Latest cycle2

1980

1980

1981

Series
High

Low

High

Low

Jan.

Sept.

Oct.

Nov.

Dec.

Jan.'

Feb.'

Mar.

Capacity utilization rate (percent)
13 Manufacturing....................................................

88.0

69.0

87.2

74.9

83.9

76.7

78.2

79.4

79.9

80.0

79.4

79.5

14
15

Primary processing.........................................
Advanced processing.....................................

93.8
85.5

68.2
69.4

90.1
86.2

70.9
77.1

86.4
82.7

75.2
77.7

77.6
78.5

79.6
79.2

80.8'
79.6

81.3
79.6

80.4
79.0

79.8
79.3

16 Materials..............................................................
17 Durable goods.................................................
18
Metal materials...........................................

92.6
91.5
98.3

69.4
63.6
68.6

88.8
88.4
96.0

73.7
68.0
58.4

86.1
83.6
84.1

76.4
70.4
63.9

78.4
73.5
71.5

80.4
76.5
81.4

81.3'
77.3
81.0

81.8
78.1
82.3

81.3
77.4
82.5

81.3
77.9
83.1

19
20
21
22
23

Nondurable goods...........................................
Textile, paper, and chemical......................
Textile......................................................
Paper........................................................
Chemical..................................................

94.5
95.1
92.6
99.4
95.5

67.2
65.3
57.9
72.4
64.2

90.9
91.4
90.1
97.6
91.2

76.8
74.5
79.5
88.1
69.6

90.9
91.2
86.6
96.0
91.2

82.7
81.6
82.0
93.9
78.7

84.4
83.8
82.1
93.0
82.1

84.3
83.7
80.7
94.1
82.0

86.3
85.9
79.8'
94.2'
85.4'

86.6
86.0
79.2
93.7
85.8

85.9
85.5
78.9
93.5
85.1

85.6
85.0
79.0
92.9
84.7

24

Energy materials.............................................

94.6

84.8

88.3

83.1

86.2

84.1

83.1

85.5

85.0'

84.8

85.3

84.4

1. Monthly high 1973; monthly low 1975.
2. Preliminary; monthly highs December 1978 through January 1980; monthly
lows July 1980 through October 1980.

2 .1 2

LA BO R FO R C E, EM PLO Y M EN T, A N D U N EM PLO Y M EN T
Thousands of persons; m onthly data are seasonally adjusted. Exceptions noted.
1980
Category

1978

1979

1981

1980
Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Household Survey D ata

1 Noninstitutional population1 ......................

161,058

163,620

166,246

166,789

167,005

167,201

167,396

167,585

167,747

167,902

2 Labor force (including Armed Forces)1 ...

102,537
100,420

104,996
102,908

106,821
104,719

107,101
104,980

107,288
105,167

107.404
105,285

107,191
105,067

107,668
105,543

107,802
105,681

108,305
106,177

91.031
3,342

93.648
3,297

93,960
3.310

93,781
3.399

93,887
3,319

93,999
3,340

93,888
3,394

94,294
3,403

94,646
3,281

95,136
3,276

6,047
6.0
58,521

5.963
5.8
58,623

7,448
7.1
59,425

7,800
7.4
59,687

7,961
7.6
59,717

7.946
7.5
59,797

7,785
7.4
60,205

7,847
7.4
59,917

7,754
7.3
59,946

7,764
7.3
59,598

86,697

89,886

90,652

90,384

90,710

90,961

91,125

91,481'

91,644'

91,645

20,505
851
4,229
4,923
19,542
4,724
16,252
15,672

21,062
960
4,483
5,141
20,269
4,974
17.078
15.920

20,365
1,025
4,468
5,155
20,571
5,162
17,736
16,171

20.044
1,028
4,404
5,124
20,620
5,194
17,861
16,109

20,157
1,037
4,442
5,147
20,641
5,214
17,913
16,159

20,282
1,054
4,475
5,132
20.660
5,225
17,969
16.164

20,312
1.072
4.508
5.137
20.638
5,245
18,068
16,145

20,345'
1,086'
4,610'
5,142'
20,762'
5,268'
18,133'
16,135'

20,373'
1,094'
4,520'
5,147
20,886'
5,274'
18,189'
16,161'

20,369
1,093
4,516
5,153
20,915
5,279
18,216
16,104

3

Civilian labor force....................................

Employment
4

5

Nonagricultural industries2 ..................
Agriculture...........................................

Unemployment
6
Number.................................................
7
Rate (percent of civilian labor force) .
8 Not in labor force .......................................
E stablishment Survey D ata

9 Nonagricultural payroll employment3 ........
10
11
12
13
14
15
16
17

Manufacturing................................................
Mining..........................................................
Contract construction..................................
Transportation and public utilities.............
Trade............................................................
Finance ............................................................
Service..........................................................
Government....................................................

1. Persons 16 years of age and over. Monthly figures, which are based on sample
data, relate to the calendar week that contains the 12th day; annual data are
averages of monthly figures. By definition, seasonality does not exist in population
figures. Based on data from Employment and Earnings (U.S. Department of La­
bor).
2. Includes self-employed, unpaid family, and domestic service workers.




3.
Data include all full- and part-time employees who worked during, or
received pay for, the pay period that includes the 12th day of the month, and
exclude proprietors, self-employed persons, domestic servants, unpaid family work­
ers, and members of the Armed Forces. Data are adjusted to the March 1979
benchmark and only seasonally adjusted data are available at this time. Based on
data from Employment and Earnings (U.S. Department of Labor).

A46

Domestic Nonfinancial Statistics □ April 1981

2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1
Monthly data are seasonally adjusted.
Grouping

1967
pro­
por­
tion

1980
Aver­
age

1980
Mar.

Apr.

May

June

July

1981

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Index (1967 = 100)
Major Market
1 Total index....................................

100.00

147.1

152.1

148.3

144.0

141.5

140.4

141.8

144.1

146.9

149.4

151.0

151.7

151.1

151.7

2 Products.........................................
3 Final products............................
4
Consumer goods...................
5
Equipment............................
6 Intermediate products...............
7 Materials.......................................

60.71
47.82
27.68
20.14
12.89
39.29

146.8
145.4
145.5
145.1
151.9
147.7

150.0
147.7
148.6
146.6
158.3
155.3

146.6
145.4
145.3
145.6
150.8
151.0

143.7
143.1
142.4
144.0
146.2
144.3

142.5
142.3
142.1
142.6
143.5
140.0

142.8
142.4
142.0
142.9
144.5
136.5

143.8
142.8
142.7
142.9
147.6
138.6

145.3
143.9
144.3
143.2
150.6
142.4

147.2
145.8
146.6
144.8
152.4
146.4

148.7
147.5
148.0
146.7
153.5
150.5

149.9
148.3
147.7
149.1
156.1
152.6

150.2
148.2
147.2
149.5
157.8
153.9

149.6
147.8
146.9
149.1
156.1
153.4

150.3
148.8
147.7
150.2
156.2
153.7

8 Durable consumer goods.............
9 Automotive products...............
10
Autos and utility vehicles....
11
Autos..................................
12
Auto parts and allied goods..
13 Home goods..............................
14
Appliances, A/C, and TV ...
15
Appliances and T V ...........
16
Carpeting and furniture.......
17
Miscellaneous home goods...

7.89
2.83
2.03
1.90
80
5.06
1.40
1.33
1.07
2.59

136.5
132.7
109.9
103.4
190.4
138.7
117.1
119.5
155.0
143.6

144.1
141.0
122.0
114.9
189.1
145.8
122.1
125.0
169.1
149.0

136.3
126.3
102.3
97.1
187.2
142.0
114.8
117.5
165.8
146.8

128.8
118.5
92.6
88.4
184.0
134.6
102.8
106.0
154.2
143.8

128.2
121.6
97.1
95.7
183.7
132.0
105.6
108.5
146.7
140.2

128.3
129.2
106.4
105.2
186.9
127.7
102.3
103.4
136.1
138.1

128.6
121.5
94.1
91.3
191.1
132.6
114.2
114.2
141.1
139.1

132.7
130.6
105.5
98.0
194.2
134.0
116.3
117.6
146.1
138.6

139.6
141.8
120.2
110.7
196.8
138.3
123.5
125.6
150.2
141.5

142.9
145.3
124.3
114.3
198.6
141.5
128.4
131.0
154.9
143.0

141.3
139.1
115.9
105.3
198.0
142.6
126.8
129.2
156.3
145.4

138.5
127.1
99.8
90.0
196.6
144.9
131.2
132.7
156.4
147.5

137.9
129.1
103.6
96.0
193.8
142.8
124.2
126.7
157.0
147.0

141.6
138.9
117.2
108.3
194.0
143.1
125.7

18 Nondurable consumer goods.......
19 Clothing.....................................
20 Consumer staples......................
21
Consumer foods and tobacco
22
Nonfood staples.....................
23
Consumer chemical
products......................
24
Consumer paper products .
25
Consumer energy products
26
Residential utilities.......

19.79
4.29
15.50
8.33
7.17

149.1
126.8
155.3
147.0
165.0

150.3
131.8
155.5
147.3
165.0

148.8
128.7
154.5
146.2
164.0

147.7
127.9
153.2
146.1
161.5

147.6
126.7
153.4
146.2
161.7

147.4
122.5
154.3
146.4
163.6

148.3
123.6
155.1
146.0
165.7

148.9
122.1
156.3
147.0
167.1

149.4
125.1
156.1
147.7
165.9

150.1
127.3
156.4
148.0
166.2

150.2
123.7
157.5
148.9
167.6

150.7
124.1
158.1
148.6
169.1

150.5

150.2

158.1
148.5
169.2

157.4

2.63
1.92
2.62
1.45

208.7
122.9
151.9
171.2

208.9
121.6
152.7
169.6

206.9
120.4
152.8
172.5

203.0
120.2
150.1
169.8

202.6
120.6
150.9
170.1

204.3
121.5
153.5
176.5

209.3
122.0
153.9
178.6

213.0
122.3
154.0
178.3

210.2
124.8
151.5
175.0

210.0
127.3
150.8
171.8

212.5
127.0
152.3
171.2

214.5
127.6
154.1
174.4

215.6
128.5
152.5

12.63
6.77
1.44
3.85
1.47

173.3
157.0
241.3
128.5
149.0

176.1
159.3
235.6
133.1
153.2

174.2
159.3
239.5
131.9
152.3

171.9
157.8
242.2
129.5
149.1

169.8
155.2
241.0
126.1
147.1

170.1
154.8
244.4
126.0
142.0

170.3
154.5
243.6
124.4
145.9

170.5
154.2
243.4
123.9
146.1

172.3
154.4
244.3
123.9
146.1

174.5
157.1
250.1
126.4
146.0

177.8
160.7
255.7
130.6
146.1

178.5
164.1
267.5
131.1
148.8

178.0
165.3
274.0
130.6
149.3

179.5
167.1
282.4
130.9
148.5

Commercial transit, farm.........
Commercial............................
Transit...................................
Farm.......................................

5.86
3.26
1.93
67

192.1
237.5
139.4
123.2

195.5
240.4
142.5
129.7

191.5
235.6
143.0
116.4

188.2
232.0
136.3
124.6

186.7
228.8
138.0
121.6

187.8
229.0
140.9
122.5

188.4
233.6
138.4
112.7

189.4
237.2
133.8
116.8

192.8
242.0
135.0
120.2

194.7
244.0
136.6
121.9

197.6
248.3
137.9
123.1

195.1
247.4
131.7
122.9

192.6
247.7
124.7
120.3

193.8
249.0
125.8

36 Defense and space........................

7.51

97.8

97.1

97.6

97.2

96.8

97.2

96.9

97.4

98.5

99.8

100.7

100.8

100.7

101.0

6.42
6.47
1.14

140.7
162.9
173.6

152.3
164.3
174.1

139.4
162.0
174.8

133.0
159.4
172.0

128.5
158.4
168.7

128.6
160.4
172.1

133.1
161.9
173.7

137.4
163.6
175.2

140.5
164.3
174.6

142.8
164.2
174.0

144.6
167.5
179.4

147.3
168.1
179.2

145.0
167.2
176.0

144.4

40 Durable goods materials...............
41 Durable consumer parts...........
42 Equipment p a rts ......................
43 Durable materials n.e.c............
44
Basic metal materials...........

20.35
4.58
5.44
10.34
5.57

143.1
109.0
187.3
135.0
104.6

154.2
120.3
199.2
145.5
116.6

148.2
110.6
195.8
139.8
109.3

139.8
100.1
190.8
130.5
100.0

133.8
96.0
182.5
125.0
95.9

129.0
93.9
177.6
118.9
84.7

131.3
98.1
176.3
122.4
89.4

134.2
104.2
176.0
125.4
91.7

140.4
110.8
178.5
133.4
102.0

146.6
115.5
184.0
140.6
114.4

148.4
116.3
185.8
142.9
115.0

150.2
115.8
189.2
144.8
116.8

149.3
113.8
188.7
144.2
117.0

150.5
117.5
189.6
144.5

45 Nondurable goods materials.......
46 Textile, paper, and chemical
materials...............................
47
Textile materials.................
48
Paper materials....................
49
Chemical materials.............
50 Containers, nondurable...........
51 Nondurable materials n.e.c. ..

10.47

170.7

177.0

173.2

165.2

159.6

156.2

159.8

169.7

173.7

174.1

178.8

180.0

179.2

179.0

7.62
1.85
1.62
4.15
1.70
1.14

177.0
116.0
145.1
216.7
165.1
137.3

185.2
120.7
144.2
230.1
167.1
137.4

180.7
117.7
141.2
224.3
166.8
133.0

171.5
117.6
141.7
207.3
155.8
136.4

163.4
114.0
143.4
193.3
157.7
136.8

158.5
114.4
138.4
186.1
159.0
136.6

163.2
111.0
142.0
194.9
158.8
137.9

175.1
114.7
148.2
212.6
167.2
137.2

180.5
114.9
147.3
222.9
168.6
135.7

181.0
113.0
149.5
223.8
166.6
139.1

186.5
111.8
150.0
234.1
169.7
141.1

187.3
111.0
149.6
236.1
172.9
142.2

186.8
110.7
149.7
235.3
172.2
138.8

186.5

52 Energy materials..........................
53 Primary energy........................
54 Converted fuel materials.........

8.48
4.65
3.82

130.0
115.1
148.2

130.9
115.6
149.6

130.1
116.4
146.9

129.6
116.2
145.8

130.4
117.3
146.4

130.4
115.6
148.4

130.0
114.0
149.4

128.4
114.3
145.4

127.2,
113.7
143.6

130.9
114.5
150.9

130.5
115.0
149.4

130.5
114.0
150.5

131.5
115.9
150.4

130.2

9.35
12.23
3.76
8.48

133.2
138.8
158.5
130.0

139.4
139.6
159.1
130.9

135.9
139.1
159.5
130.1

131.5
137.9
156.7
129.6

129.5
138.4
156.3
130.4

125.3
139.2
159.1
130.4

128.5
139.2
159.9
130.0

128.5
138.2
160.5
128.4

132.2
136.8
158.5
127.2

135.0
139.2
157.9
130.9

133.9
139.7
160.5
130.5

135.3
140.1
161.7
130.5

133.7
140.1
159.6
131.5

134.3
138.9

Consumer goods

146.5

168.4

Equipment

27 Business.........................................
28 Industrial...................................
29
Building and mining.............
30
Manufacturing......................
31
Power.....................................
32
33
34
35

Intermediate products

37 Construction supplies...................
38 Business supplies..........................
39 Commercial energy products...
Materials

Supplementary groups

55 Home goods and clothing.........
56 Energy, total................................
57 Products...................................
58 Materials.................................
For notes see opposite page.




130.2

Output

A47

2.13 Continued
Grouping

SIC
code

1967
pro­
por­
tion

1980

1980
Avg.
Mar.

Apr.

May

June

July

1981

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Index (1967 =- 100)
Major Industry
12.05
6.36
5.69
3.88
87.95
35.97
51.98

150.4
132.9
169.9
189.7
146.6
161.1
136.6

151.4
133.0
172.0
192.4
152.1
164.7
143.4

150.1
133.1
169.1
187.9
147.9
161.6
138.4

149.6
133.4
167.7
186.0
143.4
158.0
133.3

150.1
132.9
169.3
188.7
140.3
155.3
129.9

150.1
130.6
171.8
192.4
139.2
154.7
128.3

150.5
129.6
173.8
195.4
140.6
156.9
129.4

150.5
130.5
172.7
193.9
143.4
160.3
131.7

150.2
132.1
170.4
190.3
146.4
161.8
135.8

152.8
136.0
171.5
191.5
149.1
163.3
139.3

154.0
139.3
170.3
190.3
150.6
165.0
140.6

155.4 155.8
141.4 143.3
171.0 169.7
191.2 188.9
151.1 150.4
165.3 165.2
141.3 140.1

156.1
143.7
169.9
189.2
151.0
165.0
141.3

10
11.12
13
14

.51
.69
4.40
.75

109.1
146.7
133.8
131.7

132.7
137.2
131.8
136.0

123.5
143.4
132.5
133.1

120.8
145.0
133.9
128.1

120.0
150.0
133.2
123.9

83.1
149.8
134.3
123.7

71.2
154.9
133.6
123.5

73.1
148.9
134.7
128.2

90.8
145.7
135.4
129.0

107.2
151.6
137.4
133.0

122.2
155.3
139.1
137.8

127.1
150.5
141.8
140.1

127.9
158.7
143.4
139.3

148.2
145.9

8.75
.67
2.68
3.31
3.21

149.2
119.8
136.8
128.6
151.0

149.3
122.2
142.0
136.1
152.7

147.8
121.9
139.9
131.3
148.2

149.5
116.2
137.1
128.6
145.7

149.0
113.9
133.6
127.2
146.2

148.9
119.6
132.5
121.5
143.6

148.3
117.4
132.6
123.8
147.1

148.6
119.1
133.0
126.7
152.3

149.4
123.1
133.8
127.5
153.0

150.5
125.1
135.0
128.0
154.4

150.7
118.8
133.9
125.1
156.8

150.6
122.9
133.1
125.5
157.0

132.8

15 Apparel products...................
16 Paper and products.................

20
21
22
23
26

156.5

155.8

17
18
19
20
21

Printing and publishing.........
Chemicals and products.........
Petroleum products.................
Rubber and plastic products..
Leather and products.............

27
28
29
30
31

4.72
7.74
1.79
2.24
.86

139.6
206.7
134.9
255.8
70.1

139.2
213.6
140.7
264.4
72.8

136.5
209.1
137.4
261.8
69.9

135.5
199.2
133.0
248.1
70.1

135.4
191.1
131.3
242.9
68.5

138.6
190.3
130.5
242.5
67.8

140.3
197.8
126.7
245.9
67.7

140.3
206.8
130.5
253.1
67.2

141.5
209.1
130.1
259.2
70.2

142.7
212.0
131.2
259.6
71.2

144.9
218.8
137.5
259.2
67.8

145.5 146.7
219.4 218.5
138.0 136.7
258.2 257.4
68.9 69.2

146.6

Durable manufactures
22 Ordnance, private and
government....................
23 Lumber and products.............
24 Furniture and fixtures...........
25 Clay, glass, stone products ...

19.91
24
25
32

3.64
1.64
1.37
2.74

77.9
119.3
150.0
146.5

76.9
125.3
159.5
156.4

77.5
105.2
157.1
148.8

77.9
104.5
149.5
140.8

77.5
109.7
143.1
134.5

77.1
112.8
138.6
134.2

77.2
121.7
141.1
135.7

77.1
122.6
144.8
141.4

79.1
122.2
147.2
145.2

79.6
124.9
147.2
147.8

79.5
122.0
149.0
151.4

79.3
125.3
149.6
155.3

26
27
28
29
30

Primary metals........................
Iron and steel......................
Fabricated metal products. . . .
Nonelectrical machinery.......
Electrical machinery...............

33
331.2
34
35
36

6.57
4.21
5.93
9.15
8.05

101.6
91.7
135.0
162.8
172.7

113.7
105.7
145.5
166.5
179.2

106.4
97.4
141.4
163.2
177.0

96.1
84.4
133.2
162.1
171.4

90.4
75.4
126.1
158.3
166.6

81.7
68.1
123.8
158.5
165.0

86.0
75.3
125.8
158.8
166.7

90.1
79.8
129.0
159.1
167.5

100.6
93.3
132.8
161.1
170.0

113.4
107.4
134.1
163.4
173.0

112.1
103.5
137.4
167.5
174.9

113.9 113.5
108.0 107.4
137.6 138.3
168.9 168.1
177.6 174.6

139.2
169.0
175.8

31 Transportation equipment....
32 Motor vehicles and parts...
33 Aerospace and miscella­
neous transportation
equipment.....................
34 Instruments............................
35 Miscellaneous manufactures ..

37
371

9.27
4.50

116.8
118.8

123.8
130.1

115.1
114.7

109.8
105.9

110.0
106.7

110.7
107.9

108.3
104.4

112.9
113.4

118.8
124.2

121.7
129.0

120.6
126.3

117.1 115.1
118.8 117.6

119.3
127.0

372-9
38
39

4.77
2.11
1.51

114.9
171.0
147.8

117.8
173.5
152.8

115.5
173.8
151.2

113.5
171.0
147.3

113.1
169.2
43.7

113.4
167.5
144.7

111.9
167.6
144.2

112.3
167.4
142.8

113.6
169.6
145.0

114.8
169.9
147.5

115.2
172.1
149.5

115.5
173.0
151.8

112.8
172.1
152.5

112.1
171.9
153.0

4

Electric............................

Mining
8 Metal.......................................
9 Coal.........................................
10 Oil and gas extraction...........
Nondurable manufactures
12 Foods.......................................
13 Tobacco products...................

151.2

79.3
122.0
149.9
153.1

134.5

79.4

113.7

Gross value (billions of 1972 dollars, annual rates)
Major Market
36 Products, total..........................

507.4

602.1

619.0

599.5

588.6

586.7

585.9

593.3

604.7

610.9

615.5

614.7

611.8

614.5

.......................................
38 Consumer goods.................
39 Equipment..........................
40 Intermediate............................

390.92
277.52
113.42
116.62

465.4
313.5
151.9
136.7

475.9
321.3
154.6
143.1

464.5
312.5
152.0
135.0

457.3 37455.6
F inal 456.9
306.3 305.8 307.7
151.0 149.8 149.2
131.3 129.4 129.9

453.0
305.1
147.9
132.9

58.0
309.0
149.0
135.3

467.7
316.6
151.1
137.1

473.0
320.0
153.0
137.9

475.5
320.3
155.2
140.0

472.6 470.9
317.5 316.5
155.1 154.4
142.1 140.8

474.1
318.6
155.5
140.4

1. The industrial production series has been revised back to January 1979.
2. 1972 dollars.




585.0

N ote. Published groupings include some series and subtotals not shown separately. For description and historical data, see Industrial Production—1976 Revision
(Board of Governors of the Federal Reserve System: Washington, D.C.), Decem­
ber 1977.

A48

Domestic Nonfinancial Statistics □ April 1981

2.14 HOUSING AND CONSTRUCTION
Monthly figures are at seasonally adjusted annual rates except as noted.
1980
Item

1978

1979

1981

1980r
July

Aug.

Sept.

Oct.

Nov.

Dec

Feb.

Private residential real estate activity (thousands of units)
New U nits
1 Permits authorized..............................
2 1-family.............................................
3 2-or-more-family..............................

1,801
1,183
618

1,552
981
570

1,171
704
467

1,236
781
455

1,361
857
504

1,564
914
650

1,333
819
514

1,355
812
543

1,235
743
492

1,228
715
513

1,143
672
471

4 Started...................................................
5 1-family.............................................
6 2-or-more-family..............................

2,020
1,433
587

1,745
1,194
551

1,292
852
440

1,277
867
410

1,411
971
440

1,482
1,032
450

1.519
1,009
510

1,550
1,019
531

1,535
974
561

1,615
992
623

1,218
779
439

7 Under construction, end of period1. ..
8 1-family.............................................
9 2-or-more-family..............................

1,310
765
546

1,140
639
501

515
383

856'
477'
379'

844'
474
370'

864'
495'
369'

514'
372'

918
536
382

945
549
396

n.a.
n.a.
n.a.

10 Completed...........................................
11 1-family.............................................
12 2-or-more-family..............................

1,868
1,369
499

1,855
1,286
570

1,501
956
545

1,472'
883'
589'

1,429'
924'
505'

1,254'
763'
491'

1,287'
823'
464'

1,364
889
475

1,219
868
351

n.a.
n.a.
n.a.

261

233

13 Mobile homes shipped........................

207

90 5 r
529r

376
1,274'
819'
455r

236

Merchant builder activity in 1 -family
units

14 Number s o ld .......................................
15 Number for sale, end of period1 .......

818
419

709
402

530
341

625
335

616
331

563
335

549
334

560'
337'

513
336

514
333

487
338

Price (thousands o f dollars)2

Median
Units sold.........................................
Average
17 Units sold.........................................
16

55.8

62.7

64.9

64.4

63.2

68.5

66.1

67.1'

67.4

67.4

67.1

62.7

71.9

76.6

76.8

76.5

80.3

77.7

82.2'

82.1

79.8

81.4

3,863'

3,701'

2,881

2,920

2,970

3,280

48.7
55.1

55.5
64.0

62.1
72.7

64.1
75.7

64.9
76.2

64.2
75.5

63.0
74.0

64.5
76.1

64.1
75.7

E xisting Units (1-family)
18 Number s o ld .......................................

2,960

2,560

Price o f units sold (thous. o f dollars)2

19 M edian.................................................
20 A verage...............................................

62.7
73.4

64.3
74.9

Value of new construction3 (millions of dollars)
Construction
21 Total put in place........................

205,457

228.948

228,705

214,315

215,149

223,660

235,784'

247,403

261,942

252,468

22 Private...........................................
23 Residential................................
24 Nonresidential, total.................
Buildings
25
Industrial..........................
26
Commercial......................
27
Other..................................
28
Public utilities and other

159,555
93,423
66,132

179.948
99,029
80,919

173,578
86,903
86,675

158,593
74,277
84,316

162,057
78,632
83,425

167,882
84,378
83,504

173,833r
89,207r
84,626'

182,182'
97,007'
85,175'

189,153
100,216
88,937

196,422
103,176
93,246

192,362
101,025
91,337

10,993
18,568
6,739
29,832

14,953
24,924
7,427
33,615

14,021
29,344
8,533
34,777

13,267
28,063
8,115
34,871

13,046
27,993
8,095
34,291

13,102
27,425
8,447
34,530

12,996
28,417
8.760
34,453'

13,392
28,888
8,799
34,096'

15,079
30,392
9,086
34,380

15,127
33,605
9,931
34,583

14,711
32,749
9,469
34,408

29 Public...........................................
30 Military.....................................
31 Highway...................................
32 Conservation and development
33 Other.........................................

45,901
1,501
10,713
4,457
29,230

49,001
1,641
11,915
4,586
30,859

55,128
1,853
13,473
5,083
34,719

55,721
2,041
13,758
5,896
34,026

53,092
2,315
11,334
4,353
35,090

55,778
1,717
13,804
5,091
35,166

54,998'
2,069'
13,550
4.763
34,616'

53,602'
1,765'
12,427
5,109
34,301'

58,250
1,705
13,742
5,626
37,177

65,520
2,063
19,882
6,242
37,333

60,107
1,990
17,615
6,188
34,314

1. Not at annual rates.
2. Not seasonally adjusted.
3. Value of new construction data in recent periods may not be strictly comparable
with data in prior periods due to changes by the Bureau of the Census in its
estimating techniques. For a description of these changes see Construction Reports
(C-30-7&-5), issued by the Bureau in July 1976.




Note. Census Bureau estimates For all series except (a) mobile homes, which
are private, domestic shipments as reported by the Manufactured Housing Institute
and seasonally adjusted by the Census Bureau, and (b) sales and prices of existing
units, which are published by the National Association of Realtors. All back and
current figures are available from originating agency. Permit authorizations are
those reported to the Census Bureau from 16,000 jurisdictions beginning with 1978.

Prices

A49

2.15 CONSUMER AND PRODUCER PRICES
Percentage changes based on seasonally adjusted d ata, except as noted
12 months to

3 months (at annual rate) to

Item
1980
Feb.

1 month to

1980

1980

1981

1981
Feb.
Mar.

June

Sept.

Dec.

Oct.

Nov.

Dec.

Jan.

Feb.

Index
level
Feb.
1981
(1967
= 100)1

Consumer Prices2
1 AH item s..........................................................

14.1

11.3

17.3

11.4

7.8

13.2

1.0

1.1

1.0

.7

1.0

263.2

2 Commodities...............................................
3 Food ........................................................
4
Commodities less food............................
5
Durable.................................................
6
Nondurable.........................................
7 Services........................................................
8 Rent..........................................................
9 Services less rent.....................................

13.6
7.3
16.4
10.1
24.8
15.0
8.5
16.0

10.3
10.6
10.1
9.0
11.4
13.0
8.8
13.6

15.3
3.3
20.7
8.2
38.1
20.1
8.3
21.7

5.4
5.8
5.2
7.5
3.8
20.5
10.0
22.1

13.2
19.7
10.6
15.2
5.0
.7
8.6
- .3

11.0
13.1
9.9
11.8
6.2
16.8
9.6
17.8

.9
.9
.9
1.1
.3
1.2
1.0
1.2

1.0
1.2
.9
1.3
.5
1.3
.6
1.4

.7
1.0
.6
.4
.7
1.4
.7
1.5

.6
-.1
1.0
.3
2.1
.9
.7
.9

1.1
.3
1.4
- .3
3.2
.8
.5
.9

248.3
270.8
235.4
220.3
253.2
290.1
201.9
306.9

Other groupings
10 All items less fo o d .....................................
11 All items less food and energy...................
12 Homeownership.........................................

15.7
12.1
20.6

11.5
10.8
13.3

20.3
14.7
22.6

12.7
14.0
26.4

5.7
5.8
-3.5

13.2
14.4
23.1

1.0
1.1
2.0

1.1
1.1
1.7

1.0
1.1
1.5

1.0
.6
.5

1.1
.4
0

260.4
246.8
335.8

13.6
14.7
3.0
21.3
9.4
19.6

10.4
10.1
8.1
11.2
9.5

17.5
18.8
- .9
29.7
13.6
23.7

8.4
7.6
-1 .4
12.1
10.9
6.2

13.5
14.5
31.0
7.6
9.9
7.8

7.8
6.9
3.6
8.5
11.4
12.6

.9
.8
.7
.8
1.7
.5

.5
.5
.1
.7
.1
.8

.5
.4
.1
.5
.9
1.7

.9
.8
0.0
1.2
1.0
1.3

.8
.8
- .6
1.3
1.1
.6

262.4
264.0
250.9
264.3
256.3
299.5

29.5
3.2

22.0
5.5

18.9
-16.6

.2
- .3

32.3
73.9

17.6
-4.1

1.9
1.5

1.3
.2

.8
-2 .6

- .8
-1.1

11.5
-3.3

481.7
267.1

Producer P rices
13 Finished goods.............................................
14 Consumer................................................
15
Foods....................................................
16
Excluding foods....................................
17 Capital equipment....................................
18 Intermediate materials3 ..............................
Crude materials
19 Nonfood..................................................
20 Food ........................................................

11.0

1. Not seasonally adjusted.
2. Figures for consumer prices are those for all urban consumers.




3. Excludes intermediate materials for food manufacturing and manufactured
animal feeds.
Source. Bureau of Labor Statistics.

A50
2 .1 6

Domestic Nonfinancial Statistics □ April 1981
G R O S S N A T I O N A L P R O D U C T A N D IN C O M E
Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates.
1980

1979
Account

1978

1979

1980'
Q4

Ql

Q2

Q3

1

Q4r

G ross National Product
1 T otal...........................................................................................................

2,156.1

2,413.9

2,626.1

2.727.5

2,571.7

2,564.8

2,637.3

2,730.6

By source
Personal consumption expenditures.................................................
Durable goods..................................................................................
Nondurable goods..........................................................................
Services ...........................................................................................

1,348.7
199.3
529.8
619.6

1,510.9
212.3
602.2
696.3

1,672.8
211.9
675.7
785.2

1,582.3
675.4
785.1
727.0

1,631.0
220.9
661.1
749.0

1,626.8
194.4
664.0
768.4

1,682.2
208.8
674.2
799.2

1,751.0
223.3
703.5
824.2

6 Gross private domestic investment...................................................
7 Fixed investment ............................................................................
8
Nonresidential....................................................... ......................
9
Structures..................................................................................
10
Producers’ durable equipment...............................................
11
Residential structures .................................................................
12
Nonfarm....................................................................................

375.3
353.2
242.0
78.7
163.3
111.2
106.9

415.8
398.3
279.7
96.3
183.4
118.6
113.9

395.3
401.2
296.0
108.8
187.1
105.3
100.3

410.0
108.6
290.2
105.1
185.1
120.6
115.4

415.6
413.1
297.8
108.2
189.7
115.2
110.1

390.9
383.5
289.8
108.4
181.4
93.6
88.9

377.1
393.2
294.0
107.3
186.8
99.2
94.5

397.7
415.1
302.1
111.5
190.7
113.0
107.6

Change in business inventories.....................................................
Nonfarm.......................................................................................

22.2
21.8

17.5
13.4

-5.9
-4.7

- .8
-4 .4

2.5
1.5

7.4
6.1

-16.0
-12.3

-17.4
-14.0

15 Net exports of goods and services.....................................................
16 Exports...................................................................... ......................
17 Imports...................................................................... ......................

-0 .6
219.8
220.4

13.4
281.3
267.9

23.3
339.8
316.5

7.6
306.3
298.7

8.2
337.3
329.1

17.1
333.3
316.2

44.5
342.4
297.9

23.3
346.1
322.7

18 Government purchases of goods and services..................................
19 Federal...................................................................... ......................
20 State and local ................................................................................

432.6
153.4
279.2

473.8
167.9
305.9

534.7
198.9
335.8

496.4
178.1
318.3

516.8
190.0
326.8

530.0
198.7
331.3

533.5
194.9
338.6

558.6
212.0
346.6

By major type of product
21 Final sales, to ta l..................................................................................
22 Goods...............................................................................................
23
D urable.......................................................................................
24
Nondurable..................................................................................
25 Services ...........................................................................................
26 Structures.................................................................... ....................

2,133.9
946.6
409.8
536.8
976.3
233.2

2,396.4
1,055.9
451.2
604.7
1,097.2
260.8

2,632.0
1,130.4
458.6
671.9
1,229.6
266.0

2,497.1
1,078.4
448.1
630.3
1,142.8
275.1

2,569.1
1,116.9
456.4
660.5
1,178.6
276.2

2,557.4
1,106.4
444.6
661.8
1,205.6
252.8

2,653.4
1,129.4
456.5
672.9
1,249.0
258.9

2,748.0
1,169.0
476.7
698.2
1,285.3
276.4

27 Change in business inventories.........................................................
28 Durable goods..................................................................................
29 Nondurable goods..........................................................................

22.2
17.8
4.4

17.5
11.5
6.0

-5.9
-4.0
-1.8

- .8
- .4
- .5

2.5
-11.8
14.3

7.4
3.3
4.1

-16.0
-8 .4
-7 .7

-17.4
.7
-18.1

30 Memo: Total GNP in 1972 dollars.........................................................

1,436.9

1,483.0

1,480.7

1,490.6

1,501.9

1,463.3

1,471.9

1,485.6

31 T otal...........................................................................................................

1,745.4

1,963.3

2,121.4

2,031.3

2,088.5

2,070.0

2,122.4

2,214.5

32 Compensation of employees...............................................................
33 Wages and salaries..........................................................................
34
Government and government enterprises................................
35
O th e r.................................................................... ......................
36 Supplement to wages and salaries.................................................
37
Employer contributions for social insurance............................
38
Other labor income....................................................................

1,299.7
1,105.4
219.6
885.7
194.3
92.1
102.2

1,460.9
1,235.9
235.9
1,000.0
225.0
106.4
118.6

1,596.5
1,348.6
253.8
1,090.0
252.9
115.8
137.1

1,518.1
1,282.4
243.3
1,039.1
235.7
109.8
126.0

1,558.0
1,314.5
246.7
1,067.9
243.5
112.6
130.9

1,569.0
1,320.4
250.5
1,069.9
248.6
113.6
135.1

1,597.4
1,342.3
253.9
1,088.4
255.0
116.0
139.1

1,661.8
1,387.3
263.3
1,134.0
264.5
121.0
143.5

39 Proprietors’income1 ..........................................................................
40 Business and professional1 .............................................................
41 Farm1 ...............................................................................................

117.1
91.0
26.1

131.6
100.7
30.8

130.6
107.2
23.4

136.3
106.8
29.5

133.7
107.9
25.7

124.9
101.6
23.3

129.7
107.6
22.1

134.0
111.6
22.5

2
3
4
5

13
14

National Income

42 Rental income of persons2 .................................................................

27.4

30.5

31.8

31.0

31.2

31.5

32.0

32.4

43 Corporate profits1 ..............................................................................
44 Profits before tax3 ..........................................................................
45 Inventory valuation adjustment.....................................................
46 Capital consumption adjustment...................................................

199.0
223.3
-24.3
-13.5

196.8
255.4
-42.6
-15.9

182.6
245.5
-45.7
-17.2

189.4
255.4
-50.8
-15.1

200.2
277.1
-61.4
-15.4

169.3
217.9
-31.1
-17.6

177.9
237.6
-41.7
-17.9

183.0
249.2
-48.4
-17.8

47 Net interest.........................................................................................

115.8

143.4

179.8

156.5

165.4

175.3

185.3

193.3

1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustments.




3. For after-tax profits, dividends, and the like, see table 1.49.
Source. Survey o f Current Business (Department of Commerce).

N ational Incom e A ccounts

A51

2.17 PERSONAL INCOME AND SAVING
Billions of cu rren t dollars; quarterly d ata are at seasonally adjusted annual rates. Exceptions noted.
1979
Account

1978

1979

1980

1980'
Q4

Ql

Q2

Q3

Q4'

Personal Income and Saving
1 Total personal incom e.............................................................................

1,721.8

1,943.8

2,160.2

2,032.0

2,088.2

2,114.5

2,182.1

2,256.2

2 Wa^e and salary disbursements.........................................................
3 Commodity-producing industries...................................................

1,105.2
389.1
299.2
270.5
226.1
219.4

1,236.1
437.9
333.4
303.0
259.2
236.1

1,343.7
465.4
350.7
328.9
295.7
253.6

1,282.2
450.4
340.4
315.0
273.7
243.1

1,314.7
461.7
347 9
322.6
283.6
246.8

1,320.4
456.0
343 2
323.2
290.8
250.5

1,341.8
460.1
346 7
329.2
298.7
253.9

1,397.8
484.0
364 0
340.6
310.0
263.3

102.2
117.2
91.0
26.1
27.4
43.1
173.2
223.3
116.2

118.6
131.6
100.8
30.8
30.5
48.6
209.6
249.4
131.8

137.1
130.6
107.2
23.4
31.8
54.4
256.3
294.2
153.8

126.0
136.3
106.8
29.5
31.0
50.1
225.7
263.1
139.3

130.9
133.7
107.9
25.7
31.2
52.4
239.9
271.7
142.0

135.1
124.9
101.6
23.3
31.5
54 2
253.6
280.7
144.7

139.1
129.7
107.6
22.1
32.0
55.1
261.8
310.7
163.2

143.5
134.0
111.6
22.5
32.4
56.1
269.7
313.9
165.3

5
6
7

Distributive industries....................................................................
Service industries............................................................................
Government and government enterprises....................................

8 Other labor income............................................................................
9 Proprietors’income1 ..........................................................................
10 Business and professional1 .............................................................
11 Farm1 ...............................................................................................
12 Rental income of persons2 ................................................................

14 Personal interest income....................................................................
15 Transfer payments..............................................................................
16 Old-age survivors, disability, and health insurance benefits ,
17

Less: Personal contributions for social insurance.........................

69.6

80.6

87.9

82.4

86.2

85.9

88.1

91.2

18 E quals: Personal income..................................................................

1,721.8

1,943.8

2,160.2

2,032.0

2,088.2

2,114.5

2,182.1

2,256.2

Less: Personal tax and nontax payments......................................

258.8

302.0

338.5

321.8

323.1

330.3

341.5

359.2

20 E quals: Disposable personal income ..............................................

19

1,462.9

1,641.7

1,821.7

1,710.1

1,765.1

1,784.1

1,840.6

1,897.0

21

Less: Personal outlays....................................................................

1,386.6

1,555.5

1,720.4

1,629.4

1,678.7

1,674.1

1,729.2

1,799.4

22 Equals: Personal saving ..................................................................

76.3

86.2

101.3

80.7

86.4

110.0

111.4

97.6

Memo:
Per capita (1972 dollars)
Gross national product..................................................................
Personal consumption expenditures..............................................
Disposable personal income...........................................................
Saving rate (percent)..........................................................................

6,568
4,136
4,487
5.2

6,721
4,219
4,584
5.2

6,646
4,196
4,571
5.6

6,730
4,251
4,596
4.7

6,768
4,251
4,600
4.9

6,580
4,134
4,532
6.2

6,597
4,172
4,565
6.1

6,641
4,232
4,585
5.1

23
24
25
26

G ross Saving
27 Gross saving .............................................................................................

355.2

412.0

401.8

402.0

404.5

394.5

402.0

406.5

Gross private saving............................................................................
Personal saving....................................................................................
Undistributed corporate profits1 .......................................................
Corporate inventory valuation adjustment......................................

355.4
76.3
57.9
-24.3

398.9
86.2
59.1
-42.6

432.9
101.3
44.3
-45.7

396.4
80.7
50.6
-50.8

413.0
86.4
52.1
-61.4

435.9
110.0
42.1
-31.1

446.5
111.4
42.8
-41.7

436.2
97.6
40.2
-48.4

Capital consumption allowances
32 Corporate.............................................................................................
33 Noncorporate......................................................................................
34 Wage accruals less disbursements.....................................................

136.4
84.8
.0

155.4
98.2
.0

175.4
111.8
.0

161.5
103.6
.0

167.1
107.4
.0

173.0
110.7
.0

178.4
113.4
.5

183.2
115.8
- .5

35 Government surplus, or deficit ( - ) , national income and product
accounts.......................................................................................
36 Federal.............................................................................................
37 State and local ................................................................................

-0.2
-29.2
29.0

11.9
-14.8
26.7

-32.2
-61.2
29.1

4.4
-24.5
28.9

1.7
-36.3
26.6

-29.6
-66.5
23.9

-45.6
-74.2
28.6

-30.9
-68.0
37.1

28
29
30
31

38 Capital grants received by the United States, n e t ...........................

.0

1.1

1.1

1.1

1.1

1.1

1.1

1.1

39 Gross investment.......................................................................................

361.6

414.1

401.2

401.3

407.3

392.5

405.0

400.1

40 Gross private domestic......................................................................
41 Net foreign .........................................................................................

375.3
-13.8

415.8
-1 .7

395.3
5.9

410.0
-8 .7

415.6
-8 .3

390.9
1.7

377.1
27.8

397.7
2.3

42 Statistical discrepancy ........................................................................

6.4

2.2

-.6

- .7

2.8

- 1 .9

3.0

- 6 .4

1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.




Source. Survey of Current Business (Department of Commerce).

A52
3 .1 0

International Statistics □ A p ril 1981
U .S . I N T E R N A T I O N A L T R A N S A C T I O N S S u m m a ry
M illions of dollars; quarterly d ata are seasonally adjusted except as n o te d .1
1979
Item credits or debits

1978

1979

Q4
1 Balance on current account.....................................................
2 Not seasonally adjusted.......................................................

1980

1980P
Q2

Ql

Q4/>

Q 3'

-14,259

-7 0 5 '

118

-1,735'
553'

-2,621'
-2,426'

-2,441'
-6 8 1 '

4,493
102

687
3,123

-29,386'
182,068'
-211,454'
-1,274
32,509
3,112
4,961

-27,354
221,781
-249,135
-3,309
32,534
5,206
7,078

-9,158'
50,239'
-59,397'
-700
8,833
792
-183

-10,848'
54,604'
- 55,452'
-922
10,062
899
-809

-7,503'
54,605'
-62,108'
-994
6,102'
1,280'
-1,115'

2,858
56,181
-59,039
-636
8,056
1,458
6,020

-6,145
56,391
-62,536
-758
8,316
1,570
2,983

3
4
5
6
7
8
9

Merchandise trade balance2 ...............................................
Merchandise exports.........................................................
Merchandise im ports.......................................................
Military transactions, n et.....................................................
Investment income, net3 .....................................................
Other service transactions, n e t............................................
Memo: Balance on goods and services3 4 ..........................

-33,759
142,054
-175,813
886
20,899
2,769
-9,204

10
11

Remittances, pensions, and other transfers.......................
U.S. government grants (excluding military).....................

-1,884
-3,171

-2,142
-3,524

-2,452
-4,506

-665
-887

-565
-1,247

-564
-762

-578
-949

-747
-1,549

12 Change in U.S. government assets, other than official re­
serve assets, net (increase, - ) ........................................

-4,644

-3,783

-5,111

-925

-1,467

-1,191

-1,374

-1,079

13 Change in U.S. official reserve assets (increase, - ) ...........
14 G o ld .....................................................................................
15 Special drawing rights (SD R s)............................................
16 Reserve position in International Monetary F u n d ...........
17 Foreign currencies.................................................................

732
-65
1,269
4,231
-4,683

-1,132
-65
-1,136
-189
257

-8,155
0
-1 6
-1,667
-6,472

-649
-65
0
27
-611

-3,268
0
-1,152
-3 4
-2,082

502
0
112
-9 9
489

-1,109
0
-261
-294
-554

-4,279
0
1,285
-1,240
-4,324

18 Change in U.S. private assets abroad (increase, - ) 3 .........
19 Bank-reported claims...........................................................
20 Nonbank-reported claims ...................................................
21 U.S. purchase of foreign securities, n e t............................
22 U.S. direct investments abroad, net3 ................................

-57,279
-33,631
-3,853
-3,450
-16,345

-56,858
-25,868
-2,029
-4,643
-24,318

-71,236
-46,608
n.a.
-3,188
-20,592

-11,918
-7,213
410
-986
-4,129

-7,971'
-274
-1,474
-765
-5,458'

-16,652
-12,268
479
-805
-4,058

-21,409
-13,015
n.a.
-371
-8,207

23 Change in foreign official assets in the United States
(increase, + ) ....................................................................
24 U.S. Treasury securities.......................................................
25 Other U.S. government obligations....................................
26 Other U.S. government liabilities5 ....................................
27 Other U.S. liabilities reported by U.S. banks...................
28 Other foreign official assets6................................................

33,292
23,523
666
2,220
5,488
1,395

-14,270
-22,356
465
-714
7,219
1,116

16,179
9,640
2,187
1,375
-8 4
3,061

-1,221
-5,769
41
-924
4,881
550

-7,215
-5,357
801
181
-3,185
345

7,775
4,314
250
737
1,652
822

7,991
3,769
549
242
2,006
1,425

7,628
6,914
587
215
-557
469

29 Change in foreign private assets in the United States
(increase, + )3 ..................................................................
30 U.S. bank-reported liabilities..............................................
31 U.S. nonbank-reported liabilities........................................
32 Foreign private purchases of U.S. Treasury securities, net
33 Foreign purchases of other U.S. securities, n e t ...............
34 Foreign direct investments in the United States, net3 . . . .

30,804
16,259
1,640
2,197
2,811
7,896

51,845
32,668
1,692
4,830
2,942
9,713

31,446
10,687
n.a.
2,693
7,443
8,204

5,246
400
1,050
920
313
2,563

14,409
6,355
683
3,278
2,427
1,666

174
-4,208
1,331
-1,225
1,194
3,082

3,772
194
405
-254
990
2,437

13,092
8,346
n.a.
894
2,832
1,020

0
11,354

1,139
23,765'

1,152
35,605

0
11,202'
2,400

1,152
6,981'
-9 3 '

0
20,200'
1,465'

0
2,879
-4,032

0
5,544
2,658

11,354

23,765'

35,605

8,802'

7,074

18,735'

6,911

2,886

35 Allocation of SDRs .................................................................
36 Discrepancy..............................................................................
37 Owing to seasonal adjustments ..........................................
38 Statistical discrepancy in recorded data before seasonal
adjustment....................................................................

39
40
41
42

Memo:
Changes in official assets
U.S. official reserve assets (increase, - ) ...........................
Foreign official assets in the United States
(increase, + ) .................................................................
Change in Organization of Petroleum Exporting Countries
official assets in the United States (part of line 23
above) ................................................................................
Transfers under military grant programs (excluded from
lines 4, 6, ai.d 11 above).................................................

732

-1,132

-8,155

-649

-3,268

502

-1,109

-4,279

31,072

-13,556

14,804

-297

-7,396

7,038

7,749

7,415

12,985

5,005'

2,955'

4,749

4,391

890

139

144

155

125

211

-1,137
236

1. Seasonal factors are no longer calculated for lines 13 through 42.
2. Data are on an international accounts (IA) basis. Differs from the Census
basis data, shown in table 3.11, for reasons of coverage and timing; military exports
are excluded from merchandise data and are included in line 6.
3. Includes reinvested earnings of incorporated affiliates.
4. Differs from the definition of “net exports of goods and services” in the
national income and product (GNP) account. The GNP definition makes various
adjustments to merchandise trade and service transactions.




-25,019'
-21,051
147
-1,246
-2,869'

5,558'
305

635

5. Primarily associated with military sales contracts and other transactions ar­
ranged with or through foreign official agencies.
6. Consists of investments in U.S. corporate stocks and in debt securities of
private corporations and state and local governments.
Note. Data are from Bureau of Economic Analysis, Survey o f Current Business
(U.S. Department of Commerce).

Trade and Reserve Assets

A53

3.11 U.S. FOREIGN TRADE
Millions of dollars; m onthly data are seasonally adjusted.
1980
Item

1978

1979

Aug.
1 EXPORTS of domestic and foreign
merchandise excluding grant-aid
shipments.........................................

143,682

2 GENERAL IMPORTS including mer­
chandise for immediate consump­
tion plus entries into bonded
warehouses.......................................

174,759

3 Trade balance.........................................

-31,075

181,860

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

220,684

19,086

209,458

245,010

19,713

19,940

20,347

19,860

21,436

23,194

21,922

-27,598

-24,326

-626

-1,112

-1,134

-1,145

-2,185

-4,369

-2,158

Note. The data in this table are reported by the Bureau of Census data on a
free-alongside-ship (f.a.s.) value basis—that is, value at the port of export. Begin­
ning in 1981, foreign trade of the U.S. Virgin Islands is included in the Census
basis trade data; this adjustment has been made for all data shown in the table.
The Census basis data differ from merchandise trade data shown in table 3.10.
U.S. International Transactions Summary, for reasons of coverage and timing. On
the export side, the largest adjustments are: (a) the addition of exports to Canada
not covered in Census statistics, and (b) the exclusion of military sales (which are
combined with other military transactions and reported separately in the "service

3 .1 2

1981

1980

18,828

19,214

18,715

19,251

18,825

19,764

account” in table 3.10. line 6). On the import side, additions are made for gold,
ship purchases, imports of electricity from Canada and other transactions; military
payments are excluded and shown separately as indicated above.
Source. FT900 “Summary of U.S. Export and Import Merchandise Trade”
(U.S. Department of Commerce, Bureau of the Census).

U .S . R E S E R V E A S S E T S
Millions of dollars, end of period
1980
Type

1978

1979

1981

1980
Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar .p

1 Total1 ......................................................

18,650

18,956

26,756

22,994

23,967

25,673

26,756

28,316

29,682

30,410

2 Gold stock, including Exchange Stabili­
zation Fund1 ...................................

11,671

11,172

11,160

11.168

11.163

11,162

11,160

11.159

11,156

11,154

3

1,558

2,724

2.610

4,007

3.939

3,954

2,610

3,628

3,633

3,913

4 Reserve position in International Mone­
tary Fund2 .......................................

1,047

1,253

2,852

1,665

1.671

1,822

2,852

2.867

3,110

3,448

6,154

7.194

8,735

10,134

10,662

11,783

11,895

5

4,374

3,807

10.134

1. Gold held under earmark at Federal Reserve Banks for foreign and inter­
national accounts is not included in the gold stock of the United States: see table
3.22.
2. Beginning July 1974, the IMF adopted a technique for valuing the SDR based
on a weighted average of exchange rates for the currencies of member countries.
From July 1974 through December 1980, 16 currencies were used; from January
1981, 5 currencies have been used. The U.S. SDR holdings and reserve position
in the IMF also are valued on this basis beginning July 1974.




3. Includes allocations by the International Monetry Fund of SDRs as follows:
$867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 million on Jan. 1,
1972; $1,139 million on Jan. 1, 1979; $1,152 million on Jan. 1, 1980; and $1,093
million on Jan. 1, 1981; plus net transactions in SDRs.
4. Beginning November 1978, valued at current market exchange rates.
5. Includes U.S. government securities held under repurchase agreement against
receipt of foreign currencies, if any.

A54
3 .1 3

International Statistics □ April 1981
F O R E I G N B R A N C H E S O F U .S . B A N K S

B a la n c e S h e e t D a ta

Millions of dollars, end of period
1980
Asset account

1977

19781

1981

1979
July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.P

All foreign countries
1 Total, all currencies................................

258,897

306,795

364,233

377,877

386,467

385,884

333,178

389,011

396,939

394,192

2 Claims on United States........................
3 Parent bank.........................................
4 Other....................................................

11,623
7,806
3,817

17,340
12,811
4,529

32,302
25,929
6,373

29,085
17,552
11,533

36,864
26,711
10,153

29,341
19,685
9,656

30,476
21,440
9,036

30,617
22,254
8,363

28,432
20,719
7,713

29,500
20,652
8,848

5 Claims on foreigners................................
6 Other branches of parent b a n k .........
7 B anks...................................................
8 Public borrowers2 ................................
9 Nonbank foreigners............................

238,848
55,772
91,883
14,634
76,560

278,135
70,338
103,111
23,737
80,949

317,175
79,661
123,413
26,072
88,029

331,329'
75,196
134,685'
25,474
95,974'

332,531'
72,558
136,590'
26,113
97,270'

339,204'
73,856
139,902'
26,740
98,706'

335,463'
72,458
138,259'
26,548
98,198'

340,690'
74,043
139,935'
26,935
99,777'

350,794
76,563
144,579
27,594
102,058

347,101
75,327
143,891
27,455
100,428

10 Other assets.............................................

8,425

17,708'

17,717

17,595

11 Total payable in U.S. dollars...................

193,764

224,940

11,324'

267,711

275,783

283,974

282,171

279,689

284,269'

289,717

290,773

12 Claims on United States........................
13 Parent bank.........................................
14 Other.....................................................

11,049
7,692.
3,357

16,382
12,625
3,757

31,171
25,632
5,539

27,720
17,236
10,484

35,551
26.390
9,161

28,138
19,414
8,724

29,059
21,043
8,016

29,173
21,853
7,320

27,163
20,368
6,795

28,244
20,360
7,884

15 Claims on foreigners................................
16 Other branches of parent b a n k .........
17 B anks..................................................
18 Public borrowers2 ................................
19 Nonbank foreigners............................

178,896
44,256
70,786
12,632
51,222:

203,498
55,408
78,686
19,567
49,837

229,118
61,525
96,261
21,629
49,703

239,290
57,813
106,365'
21,233
53,879'

239,561
55,106
108,073'
21,786
54,596'

245,588
56,603
111,878'
22,305
54,802'

242,018
55,230
199,411'
22,578
54,799'

246,238
57,219
110,762'
22,846
55,411'

253,401
58,284
115,942
23,391
55,784

253,046
58,569
116,104
23,035
55,338

20 Other assets.............................................

3,820

8,773

8,862

8,445

8,612

8,858'

9,155

9,483

5,082'

14,764'

7,438'

17,471'

17,078'

17,349'

17,247'

United Kingdom
21 Total, all currencies................................

90,933

106,593

130,873

135,669

136,467

137,447

138,158

140,715

142,781

142,716

22 Claims on United States........................
23 Parent bank.........................................
24 Other....................................................

4,341
3,518
823

5,370
4,448
922

11,117
9,338
1,779

8,366
5,705
2,661

8,465
6,023
2,442

8,022
5,788
2,234

8,216
5,969
2,247

8,771
6,552
2,219

7,491
5,792
1,699

7,716
5,278
2,438

25 Claims on foreigners................................
26 Other branches of parent b a n k .........
27 B anks...................................................
28 Public borrowers2 ................................
29 Nonbank foreigners............................

84.016
22.017
39,899
2,206
19,895

98,137
27,830
45,013
4,522
20,772

115,123
34,291
51,343
4,919
24,570

120,914
32,231
54,824
5,710
28,149

121,805
31,607
55,530
5,865
28,803

123,369
30,858
57,066
6,251
29,194

123,854
31,431
56,723
6,113
29,587

125,859
32,267
57,423
6,405
29,764

129,249
34,538
57,658
6,684
30,369

129,107
35,127
57,975
6,465
29,540

30 Other assets.............................................

2,576

3,086

4,633

6,389

6,197

6,056

6,088

6,085

6,041

5,893

31 Total payable in U.S. dollars...................

66,635

75,860

94,287

93,158

93,720

94,784

95,287

97,246

98,913

99,930

32 Claims on United States........................
33 Parent ban k .........................................
34 Other....................................................

4,100
3,431
669

5,113
4,386
727

10,746
9,297
1,449

7,831
5,629
2,202

7,954
5,960
1,994

7,656
5,744
1,912

7,647
5,817
1,830

8,233
6,410
1,823

7,098
5,701
1,397

7,293
5,221
2,072

35 Claims on foreigners................................
36 Other branches of parent b a n k .........
37 B anks...................................................
38 Public borrowers2 ................................
39 Nonbank foreigners............................

61,408
18,947
28,530
1,669
12,263

69,416
22,838
31,482
3,317
11,779

81,294
28,928
36,760
3,319
12,287

82,434
26,083
38,471
4,280
13,600

82,705
25,565
39,070
4,327
13,743

84,355
24,913
40,917
4,663
13,862

84,849
25,593
40,312
4,551
14,393

86,246
26,710
40,542
4,706
14,288

88,967
28,231
41,373
4,909
14,454

89,615
28,759
42,373
4,661
13,822

40 Other assets.............................................

1,126

2,893

3,061

2,773

2,791

2,767

2,848

3,022

1,345'

2,261'

Bahamas and Caymans
41 Total, all currencies................................

79,052

91,735

108,977

120,307

128,515

123,179

119,524

119,367

123,754

123,389

42 Claims on United States........................
43 Parent bank.........................................
44 Other....................................................

5,782
3,051
2,731

9,635
6,429
3,206

19,124
15,196
3,928

18,272
10,524
7,748

25,882
19,149
6,733

18,305
11,839
6,466

19,656
13,837
5,819

18,325
13,071
5,254

17,751
12,631
5,120

18,364
12,836
5,528

45 Claims on foreigners................................
46 Other branches of parent b a n k .........
47 B anks..................................................
48 Public borrowers2 ................................
49 Nonbank foreigners............................

71,671
11,120
27,939
9,109
23,503

79,774
12,904
33,677
11,514
21,679

86,718
9,689
43,189
12,905
20,935

98,020
14,362
50.832r
11,627
21,199'

98,496
13,160
51,809'
12,055
21,472'

100,905
14,724
52,749r
12,078
21,354'

95,959
13,093
49,883'
12,441
20,542'

96,800
13,135
50,609'
12,213
20,843'

101,903
13,336
54,864
12,574
21,129

100,740
12,981
54,193
12,558
21,008

50 Other assets.............................................

1,599

2,326

3,135

4,015

4,137

3,969

3,909

51 Total payable in U.S. dollars...................

73,987

85,417

102,368

114,538

122,667

117,245

113,683

For notes see opposite page.




4,242
113,560'

4,100

4,285

117,571

117,478

Overseas Branches

A55

3.13 Continued
1980
Liability account

1977

19781

1981

1979
July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.P

All foreign countries
52 Total, all currencies................................

258,897

306,795

364,233

377,877

386,467

385,884

383,178

389,011

396,939

394,192

53 To United States......................................
54 Parent bank.........................................
55 Other banks in United States. . . . . . . .
56 Nonbanks.............................................

44,154
24,542
19,613

58,012
28,654
12,169
17,189

66,686
24,530
13,968
28,188

83,244
35,423
11,415
36,406

87,606
37,466
14,725
35,415

84,068
38,490
12,635
32,943

84,152
37,187
12,860
34,105

86,580
36,957
13,410
36,213

90,874
39,058
14,235
37,536

92,109
38,430
13,631
40,048

57 To foreigners...........................................
58 Other branches of parent b a n k .........
59 B anks...................................................
60 Official institutions..............................
61 Nonbank foreigners............................

206,579
53,244
94,140
28,110
31,085

238,912
67,496
97,711
31,936
41,769

283,344
77,601
122,849
35,664
47,230

279,604
72,067
122,727
33,073
51,737

284,141
69,178
130,360
33,080
51,523

287,810
70,689
131,022
33,086
53,013

285,198
69,691
132,142
30,713
52,652

288,225
71,498
132,237
31,115r
53,375'

291,571
73,913
130,421
32,438
54,799

287,730
72,594
131,653
28,831
54,652

62 Other liabilities.......................................

8,163

9,871

14,203

15,029

14,720

14,006

13,828

14,206

14,539

14,353

63 Total payable in U.S. dollars...................

198,572

230,810

273,819

283,090

291,873

289,163

287,177

292,425

300,850

301,264

64 To United States.....................................
65 Parent bank.........................................
66 Other banks in United States.............
67 Nonbanks.............................................

42,881
24,213
18,669

55,811
27,519
11,915
16,377

64,530
23,403
13,771
27,356

80,657
33,977
11,155
35,525

84,698
35,906
14,419
34,373

81,125
36,825
12,410
31,890

81,255
35,431
12,581
33,243

83,764
35,243
13,114
35,407

88,054
37,418
13,965
36,671

89,526
36,855
13,420
39,251

68 To foreigners...........................................
69 Other branches of parent b a n k .........
70 B anks...................................................
71 Official institutions..............................
72 Nonbank foreigners............................

151,363
43,268
64,872
23,972
19,251

169,927
53,396
63,000
26,404
27,127

201,476
60,513
80,691
29,048
31,224

194,359
56,206
78,930
26,177
33,046

198,971
53,355
86,420
26,165
33,031

200,281
55,146
85,387
25,659
34,089

198,541
53,695
86,961
23,364
34,521

200,814
55,543
86,525
23,840'
34,906'

204,630
56,941
86,491
24,689
36,509

203,547
56,494
88,233
21,822
36,998

73 Other liabilities.......................................

4,328

5,072

7,813

8,074

8,204

7,757

7,381

7,847

8,166

8,191

United Kingdom
74 Total, all currencies................................

90,933

106,593

130,873

135,669

136,467

137,447

138,158

140,715

142,781

142,716

75 To United States.....................................
76 Parent bank.........................................
77 Other banks in United States.............
78 Nonbanks.............................................

7,753
1,451
6,302

9,730
1,887
4,189
3,654

20,986
3,104
7,693
10,189

21,404
3,275
5,567
12,562

20,608
2,542
5,910
12,156

19,343
2,951
5,361
11,031

19,157
2,712
5,800
10,645

20,594
3,198
5,732
11,664

21,735
4,176
5,716
11,843

23,183
4.228
5,393
13,562

79 To foreigners...........................................
80 Other branches of parent b a n k .........
81 B anks...................................................
82 Official institutions..............................
83 Nonbank foreigners............................

80,736
9,376
37,893
18,318
15,149

93,202
12,786
39,917
20,963
19,536

104,032
12,567
47,620
24,202
19,643

107,739
12,694
51,203
21,088
22,754

109,604
13,343
51,452
22,600
22,209

112,412
13,706
53,776
22,444
22,486

113,539
13,940
56,772
19,807
23,020

114,813
13,951
58,127
20,437
22,298

115,582
13,933
55,848
21,412
24,389

114,208
13,599
56,487
19,199
24,923

84 Other liabilities.......................................

2,445

3,661

5,855

6,526

6,255

5,692

5,462

5,308

5,464

5,325

85 Total payable in U.S. dollars...................

67,573

77,030

95,449

95,314

96,453

96,832

97,055

99,135

102,300

103,015

86 To United States......................................
87 Parent bank.........................................
88 Other banks in United States.............
89 Nonbanks.............................................

7,480
1,416
6,064

9,328
1,836
4,101
3,391

20,552
3,054
7,651
9,847

20,843
3,238
5,486
12,119

20,007
2,496
5,809
11,702

18,687
2,892
5,259
10,536

18,551
2,634
5,714
10,203

19,978
3,101
5,616
11,261

21,080
4,078
5,626
11,376

22,554
4,126
5,300
13,128

90 To foreigners...........................................
91 Other branches of parent b a n k .........
92 B anks...................................................
93 Official institutions..............................
94 Nonbank foreigners............................

58,977
7,505
25,608
15,482
10,382

66,216
9,635
25,287
17,091
14,203

72,397
8,446
29,424
20,192
14,335

71,489
8,672
31,352
16,846
14,619

73,431
9,128
31,726
18,253
14,324

75,422
9,588
32,891
18,046
14,897

76,114
9,891
35,495
15,338
15,390

76,696
9,770
35,998
15,989
14,939

78,512
9,600
35,097
17,024
16,791

77,742
9,456
35,581
14,941
17,764

95 Other liabilities.......................................

1,116

1,486

2,500

2,982

3,015

2,723

2,390

2,461

2,708

2,719

Bahamas and Caymans
96 Total, all currencies................................

79,052

91,735

108,977

120,307

128,515

123,179

119,524

119,367

123,754

123,389

97 To United States......................................
98 Parent bank.........................................
99 Other banks in United States.............
100 Nonbanks.............................................

32,176
20,956
11,220

39,431
20,482
6,073
12,876

37,719
15,267
5,204
17,248

54,217
26,589
4,821
22,807

58,925
29,189
7,460
22,276

56,317
29,355
6,075
20,887

56,123
27,678
5,945
22,500

56,860
26,871
6,518
23,471

59,599
28,105
7,141
24,353

58,857
26,515
7,173
25,169

101 To foreigners...........................................
102 Other branches of parent b a n k .........
103 B anks...................................................
104 Official institutions..............................
105 Nonbank foreigners............................

45,292
12,816
24,717
3,000
4,759

50,447
16,094
23,104
4,208
7,041

68,598
20,875
33,631
4,866
9,226

63,208
20,409
27,145
5,525
10,129

66,630
18,081
34,100
4,119
10,330

63,966
17,079
32,185
4,250
10,452

60,593
16,720
29,202
4,610
10.061

59,492
15,878
28,933
4,368
10,313

61,203
17,040
29,893
4,361
9,909

61,595
17,819
30,070
4,184
9,522

106 Other liabilities.......................................

1,584

1,857

2,660

2,882

2,960

2,896

2,808

3,015

2,952

2,937

107 Total payable in U.S. dollars...................

74,463

87,014

103,460

116,246

124,103

118,576

115,166

115,121

119,574

119,143

1. In May 1978 the exemption level for branches required to report was increased,
which reduced the number of reporting branches.
2. In May 1978 a broader category of claims on foreign public borrowers, in-




eluding corporations that are majority owned by foreign governments, replaced
the previous, more narrowly defined claims on foreign official institutions.

A56
3 .1 4

International Statistics □ April 1981
S E L E C T E D U .S . L I A B I L I T I E S T O F O R E I G N O F F I C I A L I N S T I T U T I O N S
Millions of dollars, end of period
1980
Item

1977

1 Total i...........................................................................

4
5
6

By type
Liabilities reported by banks in the United States2 .
U.S. Treasury bills and certifcates3..........................
U.S. Treasury bonds and notes
Marketable..............................................................
Nonmarketable4 .....................................................
U.S. securities other than U.S. Treasury securities5

7
8
9
10
11
12

By area
Western Europe1........................................................
Canada .......................................................................
Latin America and Caribbean..................................
Asia.............................................................................
A frica.........................................................................
Other countries6 ........................................................

2
3

1978

Aug.

Sept.

Oct.

Nov.

Dec.

Jan . p

Feb.P

131,097

162,589

149,481

154,674

156,899

157,385

163,196

164,332

162,690

162,193

18,003
47,820

23,290
67,671

30.475
47.666

29,449
49,811

30,918
49,361

28.815
50,392

29,601
55,104

30,381
56,243

26,991
56,522

24,744
56,829

32,164
20,443
12,667

35,894
20,970
14,764

37.590
17.387
16.363

39,801
15,654
19,959

40,799
15,254
20,567

41.463
15,254
21,461

41,764
15,254
21,473

41,431
14,654
21,623

42,294
14,654
22,229

43,698
14,494
22,428

70,748
2,334
4,649
50,693
1,742
931

93,089
2,486
5,046
58,817
2,408
743

85.602
1.898
6.291
52.793
2.412
485

78,424
2,156
6,050
64,287
3,281
476

76,942
1,901
6,610
67,696
3,232
518

76.004
1,736
6,008
69.042
3,520
1,075

80,899
1,433
5,722
70,025
3,867
1,250

81,592
1,562
5.688
70,536
4.124
830

80,417
1,174
5,456
70.485
3,974
1,184

78,289
1,089
5,216
72,546
3,948
1,105

1. Includes the Bank for International Settlements.
2. Principally demand deposits, time deposits, bankers acceptances, commercial
paper, negotiable time certificates of deposit, and borrowings under repurchase
agreements.
3. Includes nonmarketable certificates of indebtedness (including those payable
in foreign currencies through 1974) and Treasury bills issued to official institutions
of foreign countries.
4. Excludes notes issued to foreign official nonreserve agencies. Includes bonds
and notes payable in foreign currencies.

3.1 5

1981

1979

5. Debt securities of U.S. government corporations and federally sponsored
agencies, and U.S. corporate stocks and bonds.
6. Includes countries in Oceania and Eastern Europe.
Note. Based on Treasury Department data and on data reported to the Treasury
Department by banks (including Federal Reserve Banks) and securities dealers in
the United States.

L I A B I L I T I E S T O A N D C L A I M S O N F O R E I G N E R S R e p o r te d b y B a n k s in th e U n ite d S ta te s
P a y a b le in F o r e ig n C u r r e n c ie s
Millions of dollars, end of period
1979
Item

1977

Dec.
1 Banks' own liabilities...............................................................................
2 Banks' own claims1...................................................................................
3
Deposits................................................................................................
4
Other claims..........................................................................................
5 Claims of banks’ domestic customers2 ...................................................

925
2,356
941
1,415

1. Includes claims of banks’ domestic customers through March 1978.
2. Assets owned by customers of the reporting bank located in the United States
that represent claims on foreigners held by reporting banks for the accounts of
their domestic customers.




1980

1978

2,363
3.671
1,795
1,876
358

1,868
2,419
994
1,425
580

Mar,
2.358
2.772
1.212
1.560
1.058

June
2,693
2,955
1,048
1,908
798

Sept.
2,669
3,112
1,126
1,985
595

Dec.
3,747r
4,104
2,506
1,598
962

Note. Data on claims exclude foreign currencies held by U.S. monetary authorities.

Bank-Reported Data

A57

3.16 LIABILITIES TO FOREIGNERS Reported by Banks in the United States
Payable in U.S. dollars
Millions of dollars, end of period
1980
Holder and type of liability

1981

1977
Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.P

1 AH foreigners....................................................

166,877

187,492

201,402

191,683

195,827

204,882

205,295'

202,093

201,333

2 Banks’ own liabilities.......................................
3 Demand deposits...........................................
4 Time deposits1...............................................
5 Other2............................................................
6 Own foreign offices3.....................................

18,996
11,521

78,730
19,218
12,431
9,704
37,376

117,211
23,325
13,627
16,419
63,839

128,171
22,511
13,208
18,785
73,667

118,663
22,474
13,824
18,046
64,319

121,240
22,457
14,157
17,222
67,405

125,139
22,847
14,773
17,117
70,401

124,789'
23,462'
15,076'
17,581'
68,670'

122,609
22,149
15,677
14,906
69,876

121,599
23,614
15,543
13,641
68,801

48,906

88,147
68,202

70,281
48,573

73,231
51,505

73,020
50,731

74,587
51,990

79,743
56,484

80,506
57,595

79,484
57,689

79,734
58,361

17,446
2,499

19,359
2,350

19,141
2,586

19,778
2,511

19,967
2,630

20,624
2,635

20,079
2,832

19,023
2,773

18,211
3,162

7 Banks’ custody liabilities4 ................................
8 U.S. Treasury bills and certificates5 ...........
9 Other negotiable and readily transferable
instruments6...........................................
10 Other..............................................................
11 Nonmonetary international and regional
organizations7.............................................

3,274

2,607

2,820

2,549

2,734

2,476

2,342

1,961

2,003

231
139

906
330
84
492

714
260
151
303

501
171
101
229

476
141
100
235

352
115
95
143

383
187
92
104

442
146
85
211

419
212
71
137

317
186
76
54

16 Banks’ custody liabilities4 ................................
17 U.S. Treasury bills and certificates.............
18 Other negotiable and readily transferable
instruments6...........................................
19 Other..............................................................

1,701
201

1,643
102

2,319
644

2,073
316

2,382
581

2,093
337

1,900
254

1,542
88

1,687
368

1,499
1

1,538
2

1,675
0

1,757
0

1,800
0

1,756
0

1,646
0

1,453
0

1,319
0

20 Official institutions8 .........................................

90,706

78,142

79,260

80,279

79,207

84,706

86,624'

83,513

81,573

21 Banks’ own liabilities.......................................
22 Demand deposits...........................................
23 Time deposits1...............................................
24 Other2............................................................

3,528
1,797

12,129
3,390
2,550
6,189

18,228
4,704
3,041
10,483

17,591
3,898
3,006
10,688

18,548
4,348
3,477
10,724

16,182
3,406
3,390
9,387

16,897
3,553
3,623
9,721

17,826'
3,771
3,612'
10,443

15,222
3,869
3,343
8,010

13,822
3,579
2,977
7,266

47,820

78,577
67,415

59,914
47,666

61,669
49,811

61,731
49,361

63,025
50,392

67,808
55,104

68,798
56,243

68,292
56,522

67,750
56,829

10,992
170

12,196
52

11,805
54

12,307
63

12,542
90

12,648
56

12,501
54

11,740
30

10,794
128

12 Banks’ own liabilities.......................................
13 Demand deposits...........................................
14 Time deposits1...............................................
15 Other2............................................................

25 Banks’ custody liabilities4 ................................
26 U.S. Treasury bills and certificates5 ...........
27 Other negotiable and readily transferable
instruments6...........................................
28 Other..............................................................
29 Banks9...............................................................

57,495

88.352

100,788

89,979

95,012

97,759'

96,415'

96,426

96,456

52,705
15,329
11,257
1,443
2,629

83.352
19,512
13,274
1,680
4,558

95,475
21,808
13,427
1,514
6,867

84,737
20,419
12,995
1,412
6,012

89,653
22,249
13,843
1,724
6,681

91,880
21,478
13,714
1,786
5,978

90,456'
21,786'
14,188'
1,703'
5,895'

90,345
20,469
12,889
1,857
5,723

90,195
21,394
14,289
1,833
5,272

Own foreign offices3.....................................

37,376

63,839

73,667

64,319

67,405

70,401

68,670'

69,876

68,801

36 Banks’ custody liabilities4 ................................
37 U.S. Treasury bills and certificates.............
38 Other negotiable and readily transferable
instruments6...........................................
39 Other..............................................................

4,790
300

5,000
422

5,313
577

5,241
361

5,359
515

5,880
529

5,959
623

6,081
647

6,261
714

2,425
2.065

2,405
2,173

2,435
2,301

2,533
2,347

2,417
2,427

2,883
2,467

2,748
2,588

2,856
2,578

2,792
2,755

14,736

16,070

18,642

18,533

18,876

18,874

19,941

19,914

20,193

21,301

4,304
7,546

12,990
4,242
8,353
394

14,918
5,087
8,755
1,075

14,604
5,014
8,588
1,002

14,901
4,991
8,836
1,075

15,052
5.093
8.948
1,011

15,979
5,393
9,272
1,315

16,065
5,356
9,676
1,033

16,623
5,179
10,407
1,036

17,265
5,559
10,657
1,049

30 Banks’ own liabilities.......................................
31 Unaffiliated foreign banks............................
32
Demand deposits.......................................
33
Time deposits1...........................................
34
Other2........................................................
35

40 Other foreigners...............................................
41 Banks’ own liabilities.......................................
42 Demand deposits...........................................
43 Time deposits.................................................
44 Other2............................................................

42,335

10,933
2,040

141

45 Banks’ custody liabilities4 ................................
46 U.S. Treasury bills and certificates.............
47 Other negotiable and readily transferable
instruments6...........................................
48 Other..............................................................

3,080
285

3,725
382

3,930
473

3,975
693

3,822
502

3,962
513

3,849
474

3,570
432

4,036
451

2,531
264

3,220
123

3,226
231

3,181
100

3,208
112

3,337
112

3,185
190

2,974
164

3,306
279

49 Memo: Negotiable time certificates of deposit
in custody for foreigners..........................

11,007

10,974

10,433

10,704

10,799

10,553

10,745

10,112

9,754

1. Excludes negotiable time certificates of deposit, which are included in “Other
negotiable and readily transferable instruments.” Data for time deposits before
April 1978 represent short-term only.
2. Includes borrowing under repurchase agreements.
3. U.S. banks: includes amounts due to own foreign branches and foreign sub­
sidiaries consolidated in “Consolidated Report of Condition” filed with bank reg­
ulatory agencies. Agencies, branches, and majority-owned subsidiaries of foreign
banks: principally amounts due to head office or parent foreign bank, and foreign
branches, agencies or wholly owned subsidiaries of head office or parent foreign
bank.
4. Financial claims on residents of the United States, other than long-term se­
curities, held by or through reporting banks.




5. Includes nonmarketable certificates of indebtedness and Treasury bills issued
to official institutions of foreign countries.
6. Principally bankers acceptances, commercial paper, and negotiable time cer­
tificates of deposit.
7. Principally the International Bank for Reconstruction and Development, and
the Inter-American and Asian Development Banks.
8. Foreign central banks and foreign central governments and the Bank for
International Settlements.
9. Excludes central banks, which are included in “Official institutions.”

A58
3 .1 6

International Statistics □ April 1981
C o n tin u e d
1980
Area and country

1977

1978

1981

1979
Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.P

1 T otal................................................................................

126,168

166,877

187,492

201,402

191,683

195,827

204,882

205,295r

202,093

201,333

2 Foreign countries............................................................

122,893

164,270

185,136

198,582

189,134

193,093

202,406

202,953'

200,132

199,330

3 E urope.......................................................................
4 A ustria...................................................................
5 Belgium-Luxembourg.............................................
6 Denmark..................................................................
7 Finland...................................................................
8 France .....................................................................
9 Germany..................................................................
10 Greece.....................................................................
11 Italy.........................................................................
12 Netherlands............................................................
13 Norway...................................................................
14 Portugal..................................................................
15 Spain.......................................................................
16 Sweden ...................................................................
17 Switzerland..............................................................
18 Turkey.....................................................................
19 United Kingdom.....................................................
20 Yugoslavia..............................................................
21 Other Western Europe1.........................................
22 U.S.S.R...................................................................
23 Other Eastern Europe2 .........................................

60,295
318
2,531
770
323
5,269
7,239
603
6,857
2,869
944
273
619
2,712
12,343
130
14,125
232
1,804
98
236

85,169
513
2,550
1,946
346
9,214
17,286
826
7,739
2,402
1,271
330
870
3,121
18,225
157
14,265
254
3,440
82
330

90,935
413
2,375
1,092
398
10,433
12,935
635
7,782
2,327
1,267
557
1,259
2,005
17,954
120
24,694
266
4,070
52
302

86,077
390
3,673
525
403
12,596
9,121
642
6,530
2,491
1,040
506
1,491
1,861
14,252
147
22,925
139
7,002
70
271

83,476
432
3,696
528
311
12,332
7,854
591
5,969
2,540
1,074
571
1,321
1,826
13,524
237
22,818
169
7,250
39
392

83,990
460
3,322
493
307
11,654
7,557
643
6,796
2,555
1,381
491
1,520
1,813
13,695
171
23,797
203
6,880
33
220

90,741
519
3,696
586
363
12,380
9,171
711
7,308
2,796
1,444
437
1,379
1,811
16,574
257
24,443
225
6,161
64
416

90,897
523
4,019
497
455
12,125
9,973'
670
7,572
2,441
1,344
374
1,500
1,737
16,689'
242'
22,680
681
6,939
68
370'

89,615
554
4,062
420
264
12,141
10,336
524
6,743
2,568
899
370
1,416
1,365
16,568
203
24,212
296
6,225
46
401

89,477
553
4,821
432
355
12,495
9,294
562
5,987
2,541
1,037
358
1,387
2,078
16,635
231
24,609
269
5,385
84
364

24 Canada .......................................................................

4,607

6,969

7,379

9,187

10,234

9,992

9,871

10,031

9,802

9,131

25 Latin America and Caribbean..................................
26 Argentina................................................................
27 Bahamas..................................................................
28 Bermuda..................................................................
29 Brazil.......................................................................
30 British West Indies.................................................
31 Chile.......................................................................
32 Colombia................................................................
33 C uba.......................................................................
34 Ecuador .................................................................
35 Guatemala3 ............................................................
36 Jamaica3 .................................................................
37 M exico...................................................................
38 Netherlands Antilles...............................................
39 Panama...................................................................
40 Peru.........................................................................
41 Uruguay ..................................................................
42 Venezuela................................................................
43 Other Latin America and Caribbean...................

23,670
1,416
3,596
321
1,396
3,998
360
1,221
6
330
2,876
196
2,331
287
243
2,929
2,167

31,677
1,484
6,752
428
1,125
6,014
398
1,756
13
322
416
52
3,467
308
2,967
363
231
3,821
1,760

49,665
1,582
15,255
430
1,005
11,117
468
2,617
13
425
414
76
4,185
499
4,483
383
202
4,192
2,318

58,282
1,880
21,179
559
1,378
13,309
475
2,893
7
818
372
100
4,291
314
4,617
401
241
3,692
1,755

48,781
1,875
13,924
677
1,168
11,410
431
2,916
5
381
373
101
4,226
360
3,894
355
199
4,405
2,080

52,501
1,996
17,567
595
1,342
12,040
448
3,037
5
387
365
85
4,575
393
3,595
380
220
3,659
1,811

53,318
1,996
16,803
555
1,248
12,614
456
2,962
6
437
359
79
4,583
568
4,575
345
244
3,667
1,819

53,170'
2,132
16,372
670
1.216
12,766'
460
3,077
6
371
367
97
4,547
413
4,718
403
254
3,170
2,132

53,050
1,857
16,164
475
1,339
12,609
501
3,095
6
389
428
112
4,595
599
4,460
401
290
3,794
1,936

52,025
1,998
15,656
793
1,266
11,953
431
3,087
7
449
461
101
4,601
523
4,194
447
266
3,925
1,869

44 Asia.............................................................................
China
45
Mainland..............................................................
46
Taiwan................................................................
47 Hong Kong..............................................................
48 India.......................................................................
49 Indonesia................................................................
50 Israel .......................................................................
51 Japan.......................................................................
52 K orea.....................................................................
53 Philippines..............................................................
54 Thailand..................................................................
55 Middle-East oil-exporting countries4.....................
56 Other A sia.................................................* ..........

30,488

36,492

33,013

39,880

41,847

40,880

41,999

42,420'

41,649

42,816

53
1,013
1,094
961
410
559
14,616
602
687
264
8,979
1,250

67
502
1,256
790
449
688
21,927
795
644
427
7,534
1,414

49
1,393
1,672
527
504
707
8,907
993
795
277
15,309
1,879

37
1,552
1,994
631
649
569
14,059
1,473
778
304
15,801
2,033

38
1,595
2,204
529
827
534
15,414
1,994
814
517
15,409
1,972

46
1,610
2,150
485
811
530
15,354
1,809
838
403
14,611
2,232

62
1,636
2,410
438
715
548
15,720
1,764
803
440
15,214
2,250

49
1,662
2,548
416
730
883
16,281'
1,528
919
464
14,453
2,487

55
1,821
2,764
437
1,170
523
17,701
1,498
849
367
12,216
2,249

55
1,733
3,052
602
678
557
18,057
1,485
1,057
404
12,695
2,440

57 A frica.........................................................................
58 Egypt.......................................................................
59 Morocco.................................................................
60 South Africa............................................................
61 Z aire.......................................................................
62 Oil-exporting countries5.........................................
63 Other A frica..........................................................

2,535
404
66
174
39
1,155
698

2,886
404
32
168
43
1,525
715

3,239
475
33
184
110
1,635
804

4,221
350
47
404
38
2,685
697

3,902
322
32
354
42
2,459
694

4,246
269
57
288
36
2,911
685

4,725
374
38
332
34
3,211
735

5,187
485
33
288
57
3,540
783

4,358
313
42
327
48
2,921
707

4,369
496
30
258
58
2,833
695

64 Other countries..........................................................
65 Australia..................................................................
66 All other.................................................................

1,297
1,140
158

1,076
838
239

904
684
220

936
692
243

894
613
281

1,484
1,190
294

1,752
1,419
333

1,247
950
297

1,658
1,304
354

1,512
1,204
307

67 Nonmonetary international and regional
organizations......................................................
68 International..........................................................
69 Latin American regional.......................................
70 Other regional6 ......................................................

3,274
2,752
278
245

2,607
1,485
808
314

2,356
1,238
806
313

2,820
1,736
800
285

2,549
1,389
837
323

2,734
1,586
841
307

2,476
1,366
801
309

2,342
1,156
890
296

1,961
913
769
279

2,003
995
745
263

1. Includes the Bank for International Settlements. Beginning April 1978, also
includes Eastern European countries not listed in line 23.
2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German Dem­
ocratic Republic, Hungary, Poland, and Romania.
3. Included in “Other Latin America and Caribbean’ through March 1978.




4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
5. Comprises Algeria, Gabon, Libya, and Nigeria.
6. Asian, African, Middle Eastern, and European regional organizations, except
the Bank for International Settlements, which is included in “Other Western
Europe.”

Bank-Reported Data

A59

3.17 BANKS’ OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States
Payable in U.S. Dollars
Millions of dollars, end of period
1980
Area and country

1977

1978

1981

1979
Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb./7

1

90,206

115,603

133,919

163,401

161,518

162,658

167,396

172,702'

167,311

166,007

2 Foreign countries........................................................

90,163

115,547

133,887

163,363

161,484

162,618

167,363

172,624'

167,262

165,928

3 E urope.......................................................................
4 A ustria...................................................................
5 Belgium-Luxembourg.............................................
6 Denmark.................................................................
7 Finland...................................................................
8 France .....................................................................
9 Germany.................................................................
10 Greece.....................................................................
11 Italy .........................................................................
12 Netherlands............................................................
13 Norway...................................................................
14 Portugal.................................................................
15 Spain.......................................................................
16 Sweden ...................................................................
17 Switzerland..............................................................
18 Turkey.................... ................................................
19 United Kingdom....................................................
20 Yugoslavia..............................................................
21 Other Western Europe1.........................................
22 U.S.S.R...................................................................
23 Other Eastern Europe2 .........................................

18,114
65
561
173
172
2,082
644
206
1,334
338
162
175
722
218
564
360
8,964
311
86
413
566

24,232
140
1,200
254
305
3,735
845
164
1,523
677
299
171
1,120
537
1,283
300
10,172
363
122
366
657

28,429
284
1,339
147
202
3,322
1,179
154
1,631
514
276
330
1,051
542
1,165
149
13,814
611
175
290
1,254

29,411
280
1,881
164
215
3,288
1,131
265
2,433
632
231
335
1,139
558
1,581
137
12,651
647
172
232
1,438

29,722
264
1,954
180
184
3,232
1,018
221
2,560
546
248
330
1,106
716
1,337
144
13,080
682
245
241
1,434

29,259
196
1,680
132
253
2,551
987
278
2,842
557
335
341
1,113
763
1,564
123
12,950
684
226
257
1,427

32,520
250
1,946
165
248
3,506
1,506
265
3,063
749
138
393
1,111
633
1,932
149
13,885
689
234
271
1,389

32,155'
236
1,621
127
460
2,958
948
256
3,364
575
227
331
993
783
1,446
145
14,917'
853
179
281
1,457

30,657
249
1,739
129
322
2,716
985
264
3,168
642
294
299
1,131
688
1,753
146
13,175
863
347
249
1,498

30,928
191
2,226
172
337
3,114
1,096
248
3,107
523
224
240
1,160
733
1,735
148
12,892
859
177
249
1,495

24 Canada .......................................................................

3,355

5.152

4,143

4,775

5,255

4,614

4,542

4,810

4,221

4,809

25 Latin America and Caribbean..................................
26 Argentina...............................................................
27 Bahamas.................................................................
28 Bermuda.................................................................
29 Brazil.......................................................................
30 British West Indies.................................................
31 Chile.......................................................................
32 Colombia...............................................................
33 C uba.......................................................................
34 Ecuador .................................................................
35 Guatemala3 ............................................................
36 Jamaica3 .................................................................
37 Mexico...................................................................
38 Netherlands Antilles...............................................
39 Panama...................................................................
40 Peru.........................................................................
41 Uruguay .................................................................
42 Venezuela................................................................
43 Other Latin America and Caribbean...................

45,850
1,478
19,858
232
4,629
6,481
675
671
10
517
4,909
224
1,410
962
80
2,318
1,394

57,567
2,281
21,555
184
6,251
9,692
970
1,012
0
705
94
40
5,479
273
3,098
918
52
3,474
1.490

68,011
4,389
18,918
496
7,720
9,822
1,441
1,614
4
1,025
134
47
9,099
248
6,031
652
105
4,669
1,598

89,253
5,393
31,866
256
9,251
14,570
1,487
1,490
3
1,136
102
31
10,785
725
4,931
687
105
4,737
1,697

85,768
5,629
30,269
216
9,639
11.980
1,627
1,493
6
1,111
105
33
11,123
710
4,461
671
100
4,879
1,715

87,665
5,859
30,275
399
10,135
12,630
1,721
1,575
3
1,157
112
35
11,745
799
3,972
719
100
4,710
1,721

89,263
6,270
29,679
260
10,001
13,674
1,730
1,582
3
1,157
114
40
12,014
816
4,367
749
105
5,113
1,591

92.992'
5,689'
29,419'
218
10,496'
15,661'
1,951
1,752'
3
1,190
137
36
12,595'
821
4,974
890
137
5,438
1,585

90,815
5,665
28,358
267
10,260
14,546
1,862
1,665
4
1,222
114
33
12,687
835
5,033
912
111
5,515
1,728

88,476
5,637
27,468
364
9,810
14,275
1,850
1,435
3
1,179
113
41
12,533
760
4,858
877
107
5,514
1,653

44 Asia.............................................................................
China
Mainland..............................................................
Taiw an................................................................
Hong Kong..............................................................
India.......................................................................
Indonesia................................................................
Israel.......................................................................
Japan.......................................................................
K orea.....................................................................
Philippines..............................................................
Thailand..................................................................
Middle East oil-exporting countries4.....................
Other A sia..............................................................

19,236

25,386

30,652

36,927

37,620

37,806

37,961

39,123'

38,537

38,590

45
46
47
48
49
50
51
52
53
54
55
56

10
1,719
543
53
232
584
9,839
2,336
594
633
1,746
947

4
1,499
1,479
54
143
888
12,671
2,282
680
758
3,125
1,804

35
1,821
1,804
92
131
990
16,946
3,798
737
935
1,548
1,813

50
2,284
2,063
118
245
1,012
21,205
5,464
1,019
947
1,040
1,480

117
2,492
2,099
84
208
918
20,663
5,574
1,169
947
1,471
1,876

126
2,332
1,980
103
214
1,055
20,607
5,885
1,081
925
1,258
2,240

187
2,382
2,094
125
248
1,125
20,323
5,844
1,122
974
1,538
1,999

195
2,469
2,247
142
245
1,172'
21,361
5,697
989
876
1,494
2,236

225
2,415
2,250
110
280
1,081
21,187
5,877
840
810
1,435
2,026

193
2,276
2,212
142
306
829
22,314
5,325
754
808
1,508
1,923

57 A frica.........................................................................
58 Egypt.......................................................................
59 Morocco..................................................................
60 South Africa............................................................
61 Z aire.......................................................................
62 Oil-exporting countries5.........................................
63 Other.......................................................................

2,518
119
43
1,066
98
510
682

2,221
107
82
860
164
452
556

1,797
114
103
445
144
391
600

1,977
135
180
469
98
349
746

2,029
123
166
535
101
374
729

2,090
159
119
440
123
469
780

1,933
165
146
375
98
402
747

2,377
151
223
370
94
805
734

1,910
175
186
337
96
410
707

1,981
152
115
421
94
425
773

64 Other countries..........................................................
65 Australia..................................................................
66 All other..................................................................

1,090
905
186

988
877
111

855
673
196

1,021
793
228

1,091
879
213

1,185
942
243

1,143
915
228

1.166
859
307

1,122
827
295

1,145
868
277

67 Nonmonetary international and regional
organizations6 .....................................................

43

56

32

38

34

40

34

78'

49

79

1. Includes the Bank for International Settlements. Beginning April 1978, also
includes Eastern European countries not listed in line 23.
2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German Dem­
ocratic Republic, Hungary, Poland, and Romania.
3. Included in “Other Latin America and Caribbean” through March 1978.
4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).




5. Comprises Algeria, Gabon, Libya, and Nigeria.
6. Excludes the Bank for International Settlements, which is included in “Other
Western Europe.”
Note. Data for period prior to April 1978 include claims of banks’ domestic
customers on foreigners.

A60
3 .1 8

International Statistics □ April 1981
B A N K S ’ O W N A N D D O M E S T I C C U S T O M E R S ’ C L A IM S O N F O R E I G N E R S R e p o r te d b y B a n k s in th e
U n ite d S ta te s
P a y a b le in U .S . D o lla r s
Millions of dollars, end of period

Type of claim

1977

1979
Aug.

1 T otal.....................................................................

Sept.

Oct.

Dec.

126,851

154,017

2
3
4
5
6
7
8

Banks’ own claims on foreigners........................
Foreign public borrowers......................................
Own foreign offices1.............................................
Unaffiliated foreign banks....................................
Deposits............................................................
Other..................................................................
All other foreigners.............................................

115,603
10,312
41,628
40,496
5,428
35,067
23,167

133,919
15,580
47,475
40,969
6,253
34,716
29,896

9
10
11
12

Claims of banks’ domestic customers2 ...............
Deposits................................................................
Negotiable and readily transferable instruments3
Outstanding collections and other claims4 .........

11,248
480
5,414
5,353

20,098
955
13,124
6,019

25,490
1,081
15,260
9,148

26,106
885
15,574
9,648

14,969

18,058

23,533

22,821

13,162

21,578

90,206

6,176

13 Memo: Customer liability on acceptances.........
Dollar deposits in banks abroad, reported by non­
banking business enterprises in the United
States5................................................................

24,245

161,518
18,969
61,879
46,008
7,216
38,792
34,661

22,075

Feb .p

167,311
20,988
63,974
46,360
7,171
39,189
35,988

166,007
20,191
63,904
45,762
6,975
38,786
36,150

198,807'
162,658
19,046
61,613
46,574
7,136
39,438
35,425

22,696

167,396
20,661
62,397
49,071
7,579
41,493
35,267

172,702'
20,940'
65,084'
50,215'
8,254'
41,962'
36,463'

24,516

21,396

25,407

4. Data for March 1978 and for period prior to that are outstanding collections
only.
5. Includes demand and time deposits and negotiable and nonnegotiable certif­
icates of deposit denominated in U.S. dollars issued by banks abroad. For descrip­
tion of changes in data reported by nonbanks, see July 1979 Bulletin, p. 550.

1. U.S. banks: includes amounts due from own foreign branches and foreign
subsidiaries consolidated in “Consolidated Report of Condition” filed with bank
regulatory agencies. Agencies, branches, and majority-owned subsidiaries of foreign
banks: principally amounts due from head office or parent foreign bank, and foreign
branches, agencies, or wholly owned subsidiaries of head office or parent foreign
bank.
2. Assets owned by customers of the reporting bank located in the United States
that represent claims on foreigners held by reporting banks for the account of their
domestic customers.
3. Principally negotiable time certificates of deposit and bankers acceptances.
3 .1 9

187,008
163,401
17,419
64,051
47,500
7,250
40,250
34,431

Jan.

Note. Beginning April 1978, data for banks’ own claims are given on a monthly
basis, but the data for claims of banks’ own domestic customers are available on
a quarterly basis only.

B A N K S ’ O W N C L A IM S O N U N A F F I L I A T E D F O R E I G N E R S R e p o r te d b y B a n k s in th e U n ite d S ta te s
P a y a b le in U .S . D o lla r s
Millions of dollars, end of period
1979

1978

1980

Maturity; by borrower and area
Dec.

Sept.

Dec.

Mar.

June

Sept.

Dec.

1 T otal.........................................................................................................

73,771

87,580

86,261

85,227

92,748

98,892

106,296

By borrower
Maturity of 1 year or less1.......................................................................
Foreign public borrowers.....................................................................
All other foreigners.............................................................................
Maturity of over 1 year1 .........................................................................
Foreign public borrowers.....................................................................
All other foreigners.............................................................................

58,481
4,633
53,849
15,289
5,361
9,928

68,404
6,142
62,262
19,176
7,652
11,524

65,251
7,127
58,125
21,009
8,114
12,895

63,868
6,778
57,090
21,359
8,430
12,929

71,368
7,089
64,279
21,380
8,515
12,865

76,096
8,639
67,458
22,796
9,592
13,204

82,197
9,573
72,624
24,099
10,089
14,010

15,176
2,670
20,990
17,579
1,496
569

16,799
2,471
25,690
21,519
1,401
524

15,254
1,777
24,974
21,673
1,080
493

13,844
1,818
23.178
23.358
1.043
627

17,141
2,013
24,417
25,753
1,320
724'

16,880
2,166
28,007
26,892
1,401
751

18,544
2,721
32,065
26,440
1,756
671

3,142
1,426
8,464
1,407
637
214

3,653
1,364
11,771
1,578
623
188

4,140
1,317
12,821
1,911
652
169

4.248
1.214
13.397
1.728
620
152

4,033
1,199
13,902
1,524
576
146

4,715
1,188
14,192
2,009
567
126

5,095
1,447
15,017
1,862
507
171

2
3
4
5
6
7

8
9
10
11
12
13
14
15
16
17
18
19

By area
Maturity of 1 year or less1
E urope.................................................................................................
Canada .................................................................................................
Latin America and Caribbean............................................................
Asia.......................................................................................................
A frica...................................................................................................
All other2 .............................................................................................
Maturity of over 1 year1
Europe.................................................................................................
Canada .................................................................................................
Latin America and Caribbean............................................................
Asia.......................................................................................................
A frica...................................................................................................
All other2 .............................................................................................

1. Remaining time to maturity.
2. Includes nonmonetary international and regional organizations.




Bank-Reported Data
3 .2 0

A61

C L A IM S O N F O R E I G N C O U N T R I E S H e ld b y U .S . O ffic e s a n d F o r e ig n B r a n c h e s o f U .S .- C h a r te r e d B a n k s 1
Billions of dollars, end of period
1979
Area or country

1976

1977

1980

19782
Mar.

June

Sept.

Dec.

Mar.

June

Sept.

Dec . p

1 T otal........................................................................................................

206.8

240.0

266.2

263.9

275.6

293.9

303.8

308.0

328.2

338.6

352.1

2 G-10 countries and Switzerland......................................................
3 Belgium-Luxembourg...................................................................
4 France ............................................................................................
5 Germany........................................................................................
6
7 Netherlands..................................................................................
8 Sweden ..........................................................................................
9 Switzerland....................................................................................
10 United Kingdom...........................................................................
11 Canada ..........................................................................................
12 Japan..............................................................................................

100.3
6.1
10.0
8.7
5.8
2.8
1.2
3.0
41.7
5.1
15.9

116.4
8.4
9.6
6.5
3.5
1.9
3.6
46.5
6.4
18.8

124.7
9.0
12.2
11.3
6.7
4.4
2.1
5.3
47.3
6.0
20.6

119.0
9.4
11.7
10.5
5.7
3.9
2.0
4.5
46.4
5.9
19.0

125.3
9.7
12.7
10.8
6.1
4.0
2.0
4.7
50.3
5.5
19.5

135.7
10.7
12.0
12.8
6.1
4.7
2.3
5.0
53.7
6.0
22.3

138.4
11.1
11.7
12.2
6.4
4.8
2.4
4.7
56.4
6.3
22.4

140.8
10.8
12.0
11.4
6.2
4.3
2.4
4.3
57.6
6.8
25.1

154.3
13.1
14.0
12.7
6.9
4.5
2.7
3.3
64.4
7.2
25.5

158.9
13.5
13.9
12.9
7.2
4.4
2.8
3.4
66.7
7.9
26.1

161.7
12.9
14.0
11.5
8.2
4.4
2.9
4.0
68.5
8.4
26.8

13 Other developed countries..............................................................
14 Austria..........................................................................................
15 Denmark........................................................................................
16 Finland..........................................................................................
17 Greece............................................................................................
18 Norway..........................................................................................
19 Portugal........................................................................................
20 Spain.............................................................................................
21 Turkey............................................................................................
22 Other Western E u ro p e................................................................
23 South Africa..................................................................................
24 Australia........................................................................................

15.0
1.2
1.0
1.1
1.7
1.5
.4
2.8
1.3
.7
2.2
1.2

18.6
1.3
1.6
1.2
2.2
1.9
.6
3.6
1.5
.9
2.4
1.4

19.4
1.7
2.0
1.2
2.3
2.1
.6
3.5
1.5
1.3
2.0
1.4

18.2
1.7
2.0
1.2
2.3
2.1
.6
3.0
1.4
1.1
1.7
1.3

18.2
1.8
1.9
1.1
2.2
2.1
.5
3.0
1.4
.9
1.8
1.4

19.7
2.0
2.0
1.2
2.3
2.3
.7
3.3
1.4
1.5
1.7
1.3

19.9
2.0
2.2
1.2
2.4
2.3
.7
3.5
1.4
1.4
1.3
1.3

18.8
1.7
2.1
1.1
2.4
2.4
.6
3.5
1.4
1.4
1.1
1.2

20.3
1.8
2.2
1.3
2.5
2.4
.6
3.9
1.4
1.6
1.5
1.2

20.6
1.8
2.2
1.2
2.6
2.4
.7
4.2
1.3
1.7
1.2
1.2

21.2
1.9
2.2
1.4
2.8
2.6
.6
4.0
1.5
1.8
1.1
1.3

25 OPEC countries3 .............................................................................
26 Ecuador ........................................................................................
27 Venezuela......................................................................................
28 Indonesia......................................................................................
29 Middle East countries.................................................................
30 African countries...........................................................................

12.6
.7
4.1
2.2
4.2
1.4

17.6
1.1
5.5
2.2
6.9
1.9

22.7
1.6
7.2
2.0
9.5
2.5

22.6
1.5
7.2
1.9
9.4
2.6

22.7
1.6
7.6
1.9
9.0
2.6

23.4
1.6
7.9
1.9
9.2
2.8

22.9
1.7
8.7
1.9
8.0
2.6

21.8
1.8
7.9
1.9
7.8
2.5

20.9
1.8
7.9
1.9
6.9
2.5

21.4
1.9
8.5
1.9
6.7
2.4

22.8
2.1
9.1
1.8
7.0
2.8

31 Non-OPEC developing countries....................................................

44.2

48.7

52.6

53.9

55.9

58.8

62.8

63.7

67.4

72.8

76.9

2.9
12.7
.9
1.3
11.9
1.9
2.6

3.0
14.9
1.6
1.4
10.8
1.7
3.6

3.1
14.9
1.7
1.5
10.9
1.6
3.5

3.5
15.1
1.8
1.5
10.7
1.4
3.3

4.1
15.1
2.2
1.7
11.4
1.4
3.6

5.0
15.2
2.5
2.2
12.0
1.5
3.7

5.5
15.0
2.5
2.1
12.1
1.3
3.6

5.6
15.3
2.7
2.2
13.6
1.4
3.6

7.6
15.8
3.2
2.4
14.4
1.5
3.9

7.9
16.2
3.5
2.7
15.9
1.8
3.9

.0

.1
4.1

Latin America
Argentina......................................................................................
Brazil.............................................................................................
Chile............................................................................................
Colombia......................................................................................
M exico..........................................................................................

11.0

Other Latin America...................................................................

1.9
11.1
.8
1.3
11.7
1.8
2.8

39
40
41
42
43
44
45
46
47

Asia
China
Mainland....................................................................................
Taiwan......................................................................................
In d ia.............................................................................................
Israel.............................................................................................
Korea (South)...............................................................................
Malaysia4 ......................................................................................
Philippines....................................................................................
Thailand........................................................................................
Other A sia....................................................................................

2.4
.2
1.0
3.1
.5
2.2
.7
.5

.0
3.1
.3
.9
3.9
.7
2.5
1.1
.4

.0
2.9
.2
1.0
3.9
.6
2.8
1.2
.2

.1
3.1
.2
1.0
4.2
.6
3.2
1.2
.3

.1
3.3
.2
.9
5.0
.7
3.7
1.4
.4

.1
3.5
.2
1.0
5.3
.7
3.7
1.6
.3

.1
3.4
.2
1.3
5.5
.9
4.2
1.6
.4

.1
3.6
.2
.9
6.5
.8
4.4
1.4
.4

.1
3.8
.2
1.2
7.1
.9
4.6
1.5
.5

l.’l
7.3

'.5

.2
4.2
.3
1.5
7.1
1.0
5.0
1.4
.6

48
49
50
51

Africa
Egypt.............................................................................................
Morocco........................................................................................
Zaire..............................................................................................
Other Africa5 ...............................................................................

.4
.3
.2
1.2

.3
.5
.3
.7

.4
.6
.2
1.4

.5
.6
.2
1.4

.7
.5
.2
1.5

.6
.5
.2
1.6

.6
.6
.2
1.7

.7
.5
.2
1.8

.7
.5
.2
1.8

.7
.6
.2
2.0

.8
.7
.2
2.0

52 Eastern Europe.................................................................................
53 U.S.S.R..........................................................................................
54 Yugoslavia....................................................................................
55

5.2
1.5
.8
2.9

6.3
1.6
1.1
3.7

6.9
1.3
1.5
4.1

6.7
1.1
1.6
4.0

6.7
.9
1.7
4.1

7.2
.9
1.8
4.6

7.3
.7
1.8
4.8

7.3
.6
1.9
4.9

7.2
.5
2.1
4.5

7.3
.5
2.1
4.7

7.5
.4
2.3
4.7

56 Offshore banking centers..................................................................
57 Bahamas........................................................................................
58 Bermuda........................................................................................
59 Cayman Islands and other British West Indies..........................
60 Netherlands Antilles.....................................................................
61 Panama6........................................................................................
62 Lebanon ........................................................................................
63 Hong Kong....................................................................................
64 Singapore......................................................................................
65 Others7..........................................................................................

24.7
10.1
.5
3.8
.6
3.0
.1
2.2
4.4
.0

26.1
9.9
.6
3.7
.7
3.1
.2
3.7
3.7
.5

30.9
10.4
.7
7.4
.8
3.0
.1
4.2
3.9
.5

33.7
12.3
.6
7.1
.8
3.4
.1
4.8
4.2
.4

37.0
14.4
.7
7.4
1.0
3.8
.1
4.9
4.2
.4

38.6
13.0
.7
9.5
1.1
3.4
.2
5.5
4.9
.4

40.4
13.7
.8
9.4
1.2
4.3
.2
6.0
4.5
.4

42.6
14.0
.6
11.3
.9
4.9
.2
5.7
4.7
.4

43.9
13.6
.6
9.5
1.2
5.6
.2
6.9
5.9
.4

44.1
12.9
.6
10.0
1.3
5.6
.2
7.4
5.6
.4

47.1
13.3
.6
10.3
2.0
6.3
.2
8.1
5.9
.3

66 Miscellaneous and unallocated8......................................................

5.0

5.3

9.1

9.5

9.9

10.6

11.7

13.1

14.3

13.7

15.1

32
33
34
35
36
37
38

1. The banking offices covered by these data are the U.S. offices and foreign
branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks.
Offices not covered include (1) U.S. agencies and branches of foreign banks, and
(2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are ad­
justed to exclude the claims on foreign branches held by a U.S. office or another
foreign branch of the same banking institution. The data in this table combine
foreign branch claims in table 3.13 (the sum of lines 7 through 10) with the claims
of U.S. offices in table 3.17 (excluding those held by agencies and branches of
foreign banks and those constituting claims on own foreign branches). However,
see also footnote 2.
2. Beginning with data for June 1978, the claims of the U.S. offices
in this table include only banks’ own claims payable in dollars. For earlier dates




the claims of the U.S. offices also include customer claims and foreign currency
claims (amounting in June 1978 to $10 billion).
3. In addition to the Organization of Petroleum Exporting Countries shown
individually, this group includes other members of OPEC (Algeria, Gabon, Iran,
Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates) as
well as Bahrain and Oman (not formally members of OPEC).
4. Foreign branch claims only through December 1976.
5. Excludes Liberia.
6. Includes Canal Zone beginning December 1979.
7. Foreign branch claims only.
8. Includes New Zealand, Liberia, and international and regional organizations.

A62

International Statistics □ A p ril 1981

3.21 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Holdings and Transactions
Millions of dollars
1980

1981

Country or area
Jan.Feb.p

Aug.

Oct.

Sept.

Nov.

Dec.

Jan.

Feb.P

Holdings (end of period)1
1 Estimated total2..........................................

51,344

57,414^

54,120

55,869

56,553

57,414'*

58,449

60,272

2 Foreign countries2....................................

45,915

52,826'

49,992

51,173

52,075

52,867

52,826'

53,914

55,650

3 Europe2.....................................................
4 Belgium-Luxembourg..........................
5 Germany2.............................................
6 Netherlands.........................................
7 Sweden.................................................
8 Switzerland2.........................................
9 United Kingdom..................................
10 Other Western E u ro p e.......................
11 Eastern Europe....................................
12 Canada.....................................................

24,824
60
14,056
1,466
647
1,868
6,236
491
0
232

24,333
77
12,335
1,884
595
1,485
7,180
777
0
449

24,643
89
13,097
1,522
640
1,675
7,089
531
0
469

25,016
91
13,110
1,640
611
1,566
7,456
542
0
480

24,783
78
12,823
1,658
607
1,517
7,538
562
0
503

24,708
74
12,758
1,777
614
1,489
7,411
584
0
532

24,333
77
12,335
1,884
595
1,485
7,180
777
0
449

25,173
80
12,791
1,954
555
1,561
7,435
796
458

25,463
88
12,915
1,944
535
1,524
7,742
714
0
490

13 Latin America and Caribbean...............

466
103
200
163
19,805
11,175
591
-3

999
292
285
421
26,110
9,479
920'
14

706
261
240
205
23,585
9,465
592
-5

768
302
241
225
24,292
9,444
617
0

768
292
255
221
25,331
9,503
685
5

942
292
278
372
25,966
9,547
715
4

999
292
285
421
26,110
9,479
920'
14

998
292
281
425
26,301
9,519
971
14

1,074
292
341
441
27,465
9,543
1,140
18

organizations....................................

5,429

4,588

4,128

4,696

4,478

4,350

4,588

4,535

4,622

International.......................................
Latin American regional.....................

5,388
37

4,548
36

4,066
60

4,632
65

4,430
44

4,302
44

4,548
36

4,505
26

4,586
36

14

15
16

17
18

19

20

Venezuela............. ................................
Other Latin America and Caribbean .
Netherlands Antilles............................
Asia..........................................................
Japan.....................................................
A frica......................................................
All other...................................................

21 Nonmonetary international and regional
22
23

Transactions (net purchases, or sales ( - ) during period)
24 Total2................................................................................

6,397

6,070'

2,862

-7 6 7

1,752

681

665

196'

1,035

1,827

25 Foreign countries2......................................................
26 Official institutions.................................................
27 Other foreign2 .........................................................

6,099
1,697
4,403

6,911'
3,839'
3,073'

2,824
2,269
555

-598
-745
146

1,181
998
183

903
664
240

792
302
490

-4 1 '
-336'
295'

1,088
865
223

1,736
1,404
332

28 Nonmonetary international and regional
organizations.......................................................

301

-844'

38

-168

571

-222

-127

237'

-5 3

91

-1,014
-100

7,672
328'

1,440
220

140
0

601
25

990
68

561
30

358
205'

300
51

1,139
169

M em o : Oil-exporting countries
29 Middle E ast3 ..........................................................................

30 Africa4.........................................................................

1. Estimated official and private holdings of marketable U.S. Treasury securities
with an original maturity of more than l year. Data are based on a benchmark
survey of holdings as of Jan. 31, 1971, and monthly transactions reports. Excludes
nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign
countries.

3 .2 2

2. Beginning December 1978, includes U.S. Treasury notes publicly issued to
private foreign residents denominated in foreign currencies.
3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial Stales).
4. Comprises Algeria, Gabon, Libya, and Nigeria.

F O R E IG N O F F IC IA L A S S E T S H E L D A T F E D E R A L R E S E R V E B A N K S
Millions of dollars, end of period
1980
Assets

1978

1979

1981

1980'
Sept.

Oct.

Nov.

Dec.

Jan.

1 Deposits.....................................................................

367

429

411

460

368

368

411

573

Assets held in custody
2 U.S. Treasury securities1...........................................
3 Earmarked gold2........................................................

117,126
15,463

95,075
15,169

102,417
14,965

96,221
14,987

98,121
14,986

102,786
14,968

102,417
14,965

104,490
14,893

1. Marketable U.S. Treasury bills, notes, and bonds; and nonmarketable U.S.
Treasury securities payable in dollars and in foreign currencies.
2. The value of earmarked gold increased because of the changes in par value
of the U.S. dollar in May 1972 and in October 1973.




Feb.
422
106,389
14,892c

Mar.P
474
111,859
14,883

N o te . Excludes deposits and U.S. Treasury securities held for international and
regional organizations. Earmarked gold is gold held for foreign and international
accounts and is not included in the gold stock of the United States,

Investment Transactions

A63

3.23 FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
1980

1981
Transactions, and area or country

1979

1981

1980
Jan.Feb.

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.p

U.S. corporate securities
Stocks
22,781
21,123

40,320
35,044

6,140
5,110

3 Net purchases, or sales ( - ) ..........................................

1,658

5,276

1,029

203

241

519

869

562

624

406

4 Foreign countries............................................................

1,642

5,258

1,015

205

246

524

867

540

612

403

E urope.......................................................................
France .....................................................................
Germany.................................................................
Netherlands............................................................
Switzerland..............................................................
United Kingdom....................................................
Canada .......................................................................
Latin America and Caribbean..................................
Middle E a s t'..............................................................
Other Asia..................................................................
A frica.........................................................................
Other countries..........................................................

217
122
-221
-71
-519
964
552
-1 9
688
211
-1 4
7

3,036
479
184
-328
308
2,502
847
143
1,206
-4
-1
30

695
103
42
45
80
397
117
79
137
-16
2
1

42
30
-21
-26
-127
216
13
-32
183
-22
0
21

-83
-33
-18
-38
-122
153
-22
-83
410
19
2
4

300
53
35
-2 9
83
172
-6 6
132
126
33
2
-3

633
109
121
-5 8
265
251
263
57
-109
18
0
5

222
57
7
-1 7
-8 8
299
230
-1 2
177
-6 8
-2
-6

438
62
24
43
105
178
26
101
63
-1 4
2
-5

257
41
18
2
-2 4
220
91
-2 2
74
-2
0
7

17 Nonmonetary international and regional
organizations..........................................................

17

18

14

-2

-5

-6

2

22

12

2

8,835
7,602

15,356
9,968

2,956
1,684

1,087
589

645
481

1,612
739

1.181
902

946
826

1,549
817

1,407
868

1 Foreign purchases......................................................
2 Foreign sales..............................................................

5
6
7
8
9
10
11
12
13
14
15
16

3,505
3,301

3,569
3,329

4,438
3,920

4,457
3,588

4,345
3,783

3,422
2,798

2,718
2,312

Bonds2
18 Foreign purchases......................................................
19 Foreign sales..............................................................
20 Net purchases, or sales ( - ) ..........................................

1,233

5,387

1,272

498

165

873

278

121

733

539

21 Foreign countries............................................................

1,330

5,453

1,257

475

214

918

283

107

706

552

22
23
24
25
26
27
28
29
30
31
32
33

626
11
58
-202
-118
814
80
109
424
88
1
1

1,585
143
213
-65
54
1,252
135
185
3,416
117
5
10

525
-38
161
17
34
331
5
24
692
16
0
-4

27
6
-11
-7
-9
53
25
32
382
9
0
0

-23
-2
4
7
0
-5
12
18
194
14
0
-2

284
16
30
8
1
235
9
7
594
24
0
0

151
12
13
-7
8
154
21
11
105
-3
0
-1

-2 6
12
22
17
14
-113
-7
-5
113
32
0
0

214
4
49
6
22
124
7
-3
492
-1
0
-4

311
-4 2
112
12
12
207
-2
26
201
17
0
0

-9 6

-6 5

15

23

14

27

-1 3

Europe.......................................................................
France .....................................................................
Germany..................................................................
Netherlands............................................................
Switzerland..............................................................
United Kingdom.....................................................
Canada.......................................................................
Latin America and Caribbean..................................
Middle East*..............................................................
Other Asia..................................................................
A frica.........................................................................
Other countries..........................................................

34 Nonmonetary international and regional
organizations..........................................................

-4 9

-4 5

-4

Foreign securities
35 Stocks, net purchases, or sales ( - ) ..........................
36 Foreign purchases...................................................
37 Foreign sales..........................................................

-786
4,615
5,401

-2,239
7,870
10,108

52
1.403
1,350

-201
605
805

-558
694
1,253

-335
788
1,143

129
927
798

-6 8
721
788

36
695
659

17
708
691

38 Bonds, net purchases, or sales ( - ) ..........................
39 Foreign purchases...................................................
40 Foreign sales..........................................................

-3.855
12,672
16,527

-835
17,062
17,898

-318
2,434
2,752

-259
1,374
1,634

-8 4
1,231
1,316

-206
1,651
1,857

91
1,252
1,161

274
1.786
1.512

-235
1,142
1,378

-8 3
1,291
1,374

41 Net purchases, or sales ( —), of stocks and bonds . . .

-4,641

-3,074

-2 6 6

-4 6 0

-6 4 3

-561

219

206

-2 0 0

-6 6

42
43
44
45
46
47
48

-3,891

-3 ,950

-3 4 2

-3 8 4

-6 8 0

-5 7 6

196

-1 7 7

-2 5 9

Europe.......................................................................
Canada .......................................................................
Latin America and Caribbean..................................
Asia.............................................................................
A frica.........................................................................
Other countries..........................................................

-1.646
-2,601
347
44
-61
25

-958
-2,094
126
-1,131
24
81

-42
57
11
-340
-18
-10

-176
42
-14
-313
0
76

-110
-344
7
-223
-4
-6

113
-651
-35
-1 6
29
-1 6

-3 0
327
-2 4
-73
-1
-3

-8 3

-8 6
24
-11
-8 4
-1 3
-7

-116
-4
51
-175
-1 0
-4

74
61
-3 9
-165
-8
-6

49 Nonmonetary international and regional
organizations..........................................................

-7 5 0

876

76

-7 6

37

15

23

383

59

17

Foreign countries............................................................

1. Comprises oil-exporting countries as follows: Bahrain. Iran, Iraq, Kuwait,
Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States).




2. Includes state and local government securities, and securities of U.S. government agencies and corporations. Also includes issues of new debt securities sold
abroad by U.S. corporations organized to finance direct investments abroad.

A64
3 .2 4

International Statistics □ April 1981
L I A B I L I T I E S T O U N A F F I L I A T E D F O R E I G N E R S R e p o r te d b y N o n b a n k in g B u s in e s s E n t e r p r is e s in th e
U n ite d S ta te s 1
M illions of dollars, end of period
1980

1979
Type, and area or country

1979

1978

June

Sept.

Dec.

Mar.

June.

Sept.

1 Total.......................................................................................................

14,869'

16,934'

15,510'

15,700

16,934'

17,349'

18,441'

18,581'

2 Payable in dollars...................................................................................
3 Payable in foreign currencies2 ..............................................................

11,506'
3,363

13,916'
3,018

12,623'
2,888

12,692
3,008

13,916'
3,018

14,414'
2,936

15,075'
3,366

15,321'
3,260'

By type
4 Financial liabilities.................................................................................
5 Payable in dollars...............................................................................
6 Payable in foreign currencies............................................................

6,295'
3,831r
2,464

7,296'
5,086'
2,210

6,041'
3,867'
2,173

6,131
3,877
2,254

7,296'
5,086'
2,210

7,778'
5,594'
2,184

8,276'
5,720'
2,556

8,300'
5,825'
2,475'

7 Commercial liabilities...........................................................................
8 Trade payables...................................................................................
9 Advance receipts and other liabilities...............................................

8,574
4,008
4,566

9,639
4,380
5,258

9,470
4,302
5,168

9,568
4,051
5,518

9,639
4,380
5,258

9,571
4,138
5,433

10,165
4,265
5,899

10,281
4,370
5,911

7,675
899

8,830
808

8,755
715

8,815
754

8,830
808

8,819
752

9,355
810

9,496
785

3,903
289
167
366
390
248
2,110

4,574'
345
168
497
828'
170'
2,372

3,582
355
134
283
401
235
1,955

3,713
317
126
381
542
190
1,957

4,574'
345
168
497
828'
170'
2,372

4,808'
360
188
520
795'
174'
2,568

5,387'
422
341
657
783
233'
2,783

5,320'
417'
339'
557
780'
224
2,873'

10
11

Payable in dollars...............................................................................
Payable in foreign currencies............................................................

12
13
14

By area or country
Financial liabilities
Europe................................................................................................
Belgium-Luxembourg....................................................................
France..............................................................................................

17

Switzerland.....................................................................................

19

Canada................................................................................................

244

20
21
22
23
24
25
26

Latin America and Caribbean..........................................................
Bahamas..........................................................................................
Berm uda........................................................................................
B razil..............................................................................................
British West Indies............................................... .......................
Mexico.................................................................. .......................
Venezuela............................................................ .......................

1,357
478
4
10
194
102
49

27
28
29

Asia.....................................................................................................
Japan ..............................................................................................
Middle East oil-exporting countries3 ...........................................

30
31

Africa..................................................................................................
Oil-exporting countries4 ................................................................

5
2

4
1

32

All other5............................................................................................

5

33
34
35
36
37
38
39

Commercial liabilities
Europe................................................................................................
Belgium-Luxembourg...................................................................
France..............................................................................................
Germany........................................................................................
Netherlands.....................................................................................
Switzerland...................................................................................
United Kingdom.............................................................................

3,033
75
321
529
246
302
824

40

Canada................................................................................................

667

868

663

717

868

720

591

590

41
42
43
44
45
46
47

Latin America....................................................................................
Bahamas..........................................................................................
Bermuda........................................................................................
Brazil..............................................................................................
British West Indies.........................................................................
Mexico............................................................................................
Venezuela......................................................................................

997
25
97
74
53
106
303

1,323
69
32
203
21
257
301

1,335
65
82
165
121
216
323

1,401
89
48
186
21
270
359

1,323
69
32
203
21
257
301

1,253
4
47
228
20
235
211

1,271
26
107
151
37
272
210

1,361
8
114
156
12
324
293

48
49
50

Asia.....................................................................................................
Japan ..............................................................................................
Middle East oil-exporting countries3 ...........................................

2,932
448
1,523

2,865
488
1,017

3,034
516
1,225

2,996
517
1,070

2,865
488
1,017

2,912
578
901

3,053
411
1,019

2,889
492
937

51
52

Africa..................................................................................................
Oil-exporting countries4 ................................................................

743
312

728
384

891
410

775
370

728
384

742
382

875
498

1,036
633

53

Allother5............................................................................................

203

233

243

287

233

263

367

396

780'
714
32

1. For a description of the changes in the International Statistics tables, see July
1979 Bulletin, p. 550.
2. Before December 1978, foreign currency data include only liabilities denominated in foreign currencies with an original maturity of less than one year.




439'
1,483
375
81
18
514
121
72

290

304

1,395
477
2
19
189
131
68

1,347
390
2
14
198
122
71

439'
1,483
375
81
18
514
121
72

380'
1,764
459
83
22
694
101
70

482

508'

1,633
434
2
25
700
101
72

1,733'
412
1
20
703'
108
74

757
700
19

790'
723
31

805'
737
26

750'
680
31

707'
618'
37

6
2

5
1

4
1

11
1

10
1

11
1

4

5

5

4

10

15

21

3,621
137
467
534
227
310
1,073

3,303
81
353
471
230
439
997

3,393
103
394
539
206
348
1,015

3,621
137
467
534
227
310
1,073

3,682
117
503
533
288
382
994

4,008
132
485
714
245
462
1,120

4,010
107
486
670
272
451
1,024

790'
723
31

764'
706
25

3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
5. Includes nonmonetary international and regional organizations.

Nonbank-Reported Data
3 .2 5

C L A IM S O N U N A F F I L I A T E D F O R E I G N E R S
U n ite d S ta te s 1

A65

R e p o r te d b y N o n b a n k in g B u s in e s s E n t e r p r is e s in th e

Millions of dollars, end of period
1979
Type, and area or country

1978

1980

1979
June

Sept.

Dec.

Mar.

June

Sept.

1 Total.......................................................................................................

27,864'

30,899'

30,318'

30,949

30,899'

31,894'

28,852

31,469'

2 Payable in dollars...................................................................................
3 Payable in foreign currencies2 .............................................................

24,881'
2,984'

27.734'
3,165'

27,418'
2,900'

28,280
2,668

27,734'
3,165'

28,984'
3.000'

28,852'
3,042

28,251'
3,218'

By type
4 Financial claim s....................................................................................
5 Deposits..............................................................................................
6
Payable in dollars...........................................................................
7
Payable in foreign currencies........................................................
8 Other financial claims.......................................................................
9
Payable in dollars...........................................................................
10
Payable in foreign currencies........................................................

16,528'
11.069'
10,000
1,068'
5,459'
3,874'
1.584'

18,139'
12,493'
11,584'
909'
5,646
3,803'
1,843'

19,321'
13,661'
12,706
956'
5,660
4,079'
1,581'

19,176
13,730
12,830
901
5,446
4,030
1,416

18,139'
12,493'
11.584'
909'
5,646
3,803'
1.843'

19,260'
13,586'
12,612'
974'
5,673'
4,055'
1,619'

18,543'
12,702'
11,822'
879
5,841
4,103
1,737

18,260'
12,185'
11,025'
1,159'
6,075'
4,399'
1,676'

11 Commercial claims................................................................................
12 Trade receivables...............................................................................
13 Advance payments and other claim s...............................................

11,337
10,778
559

12,760'
12,072'
688

10,997'
10.368'
628

11,773
11.061
712

12,760'
12.072'
688

12,724'
12,079'
645

13,352
12,656
695

13,210
12,521
689

14
15

Payable in dollars...............................................................................
Payable in foreign currencies............................................................

11,006
331

12,347'
413

10,633'
363

11,421
352

12,347'
413

12,317'
407

12,926
425

12,827
383

16
17
18
19
20
21
22

By area or country
Financial claims
Europe................................................................................................
Belgium-Luxembourg....................................................................
France..............................................................................................
Germany........................................................................................
Netherlands....................................................................................
Switzerland....................................................................................
United Kingdom.............................................................................

5,218
48
178
510
103
98
4,023

6,129'
32
177
409'
53
73
5,064'

5,640'
54
183
363'
62
81
4,650

6,562
33
191
393
51
85
5,522

6,129'
32
177
409'
53
73
5,064'

5,840'
19
290
300'
39
89
4,790'

5,835
23
307
190
37
96
4,855

5,603'
14
409'
168
30
41
4,546'

23

Canada................................................................................................

4.482

4,812

5,146

4.767

4,812

4,882

4,778

4,804

24
25
26
27
28
29
30

Latin America and Caribbean..........................................................
Bahamas..........................................................................................
Bermuda........................................................................................
Brazil..............................................................................................
British West Indies.........................................................................
Mexico............................................................................................
Venezuela......................................................................................

5.672'
2,959
80
151
1,288
163
157'

6,204'
2,684'
30
163
2,001
158
143'

7,448'
3.648'
57
141
2.407
159
155'

6,682
3,284
31
133
1,838
156
139

6.204'
2,684'
30
163
2,001
158
143'

7,516'
3,450'
34
128
2,591
169
134'

6,851'
3.007'
25
120
2,393
178
139

6,733'
2,807'
65
116
2,301'
192
128

31
32
33

Asia.....................................................................................................
Japan ..............................................................................................
Middle East oil-exporting countries3 ...........................................

920'
305'
18

697'
190
16

800
217
17

818
222
21

697'
190
16

713'
226
18

758
253
16

792
269
20

34
35

Africa..................................................................................................
Oil-exporting countries4 ................................................................

181
10

253
49

227
23

277
41

253
49

265
40

256
35

260
29

36

All other5............................................................................................

55

44

61

69

44

43

65

68

37
38
39
40
41
42
43

Commercial claims
Europe................................................................................................
Belgium-Luxembourg....................................................................
France..............................................................................................
Germany........................................................................................
Netherlands.....................................................................................
Switzerland.....................................................................................
United Kingdom.............................................................................

3,985
144
609
399
267
198
827

3,833
170
470
421
307
232
731

4,127
179
518
448
262
224
818

4,820
255
662
504
297
429
908

4,610
227
698
561
287
332
979

44

Canada................................................................................................

1.096

843

1,106

1,164

843

862

895

926

45
46
47
48
49
50
51

Latin America and Caribbean..........................................................
Bahamas..........................................................................................
Bermuda........................................................................................
Brazil..............................................................................................
British West Indies.........................................................................
Mexico............................................................................................
Venezuela......................................................................................

2,547
109
215
629
9
506
292

2,855'
21
197
647
16
700'
342

2,410'
98
118
503
25
588'
296

2,595
16
154
568
13
648
346

2,855'
21
197
647
16
700'
342

2,992'
19
135
656
11
835'
349

3,281
19
133
697
9
921
394

3,351
53
81
709
17
973
384

52
53
54

Asia.....................................................................................................
Japan ..............................................................................................
Middle East oil-exporting countries3 ...........................................

3,082
976
717

3.365
1,127
766

2.967
1.005
685

3,116
1,128
701

3,365
1.127
766

3,370
1,209
718

3,540
1,130
829

3,361
1,065
829

55
56

Africa..................................................................................................
Oil-exporting countries4 ................................................................

447
136

556
133

487
139

549
140

556
133

518
114

567
115

699
135

57

All other5............................................................................................

179

240

194

220

240

225

249

264

1. For a description of the changes in the International Statistics tables, see July
1979 Bulletin, p. 550.
2. Prior to December 1978, foreign currency data include only liabilities denominated in foreign currencies with an original maturity of less than one year.




4,901'
203
727
584
298
269
905

4,901'
203
727
584
298
269
905

4,756'
208
703
515
347
349
924

3. Comprises Bahrain, Iran. Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria. Gabon, Libya, and Nigeria.
5. Includes nonmonetary international and regional organizations.

A66

International Statistics □ April 1981

3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS
Percent per annum

Argentina.
Austria ..
Belgium .
Brazil . ..
Canada..
Denmark

Country

Country
Per­
cent

Month
effective

195.08
6.75
16.0
40.0
16.69
11.00

Mar. 1981
Mar. 1980
Mar. 1981
June 1980
Mar. 1981
Oct. 1980

France1 ........................
Germany, Fed. Rep. of.
Italy..............................
Japan ..........................
Netherlands.................
Norway........................

Per­
cent

Month
effective

12.5
7.5
19.0
6.25
9.0
9.0

Mar. 1981
May 1980
Mar. 1981
Mar. 1981
Mar. 1981
Nov. 1979

Sweden. ...........................
Switzerland.......................
United Kingdom...............
Venezuela.........................

Per­
cent

Month
effective

12.0
4.0
12.0
10.0

Jan. 1981
Feb. 1981
Mar. 1981
July 1980

government securities for commercial banks or brokers. For countries with
more than one rate applicable i;o such discounts or advances, the rate
shown is the one at which it is understood the central bank transacts the
largest proportion of its credit operations.

1. As from February 1981, the rate at which the Bank of France discounts
Treasury bills for 7 to 10 days.
Note. Rates shown are mainly those at which the central bank either
discounts or makes advances against eligible commercial paper and/or

3 .2 7

Rate on Mar. 31, 1981

Rate on Mar. 31, 1981

Rate on Mar. 31, 1981
Country

F O R E IG N S H O R T -T E R M IN T E R E S T R A T E S
Percent per annum , averages of daily figures
1981

1980
1978

Country, or type

1979

1980
Sept.

Nov.

Oct.

Dec.

Jan.

Feb.

Mar.

1
2
3
4
5

Eurodollars..............................................
United Kingdom......................................
Canada .....................................................
G ermany.................................................
Switzerland..............................................

8.74
9.18
8.52
3.67
0.74

11.96
13.60
11.91
6.64
2.04

14.00
16.59
13.12
9.45
5.79

12.07
15.89
10.73
8.90
5.57

13.55
15.87
11.71
8.99
5.40

16.46
15.84
12.96
9.37
5.53

19.47
14.64
16.83
10.11
6.61

18.07
14.20
16.98
9.41
5.68

17.18
13.12
17.28
10.74
7.09

15.36
12.58
16.85
13.44
8.33

6
7
8
9
10

Netherlands..............................................
France.......................................................
Italy...........................................................
Belgium...................................................
Japan .......................................................

6.53
8.10
11.40
7.14
4.75

9.33
9.44
11.85
10.48
6.10

10.60
12.18
17.50
14.06
11.45

10.31
11.81
17.50
12.35
11.46

9.63
11.69
18.16
12.24
10.98

9.59
11.26
17.51
12.40
9.74

9.69
11.52
17.47
12.75
9.60

9.36
11.38
17.34
12.41
9.00

9.78
11.87
17.50
12.52
8.52

10.61
12.56
18.22
13.93
7.87

Note. Rates are for 3-month interbank loans except for the following:
Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan,

3 .2 8

Gensaki rate.

F O R E IG N E X C H A N G E R A T E S
Cents per unit of foreign currency
1980
Country/currency

1978

1979

1981

1980
Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

1
2
3
4
5

Australia/dollar.........................
Austria/schilling.......................
Belgium/franc...........................
Canada/dollar..........................
Denmark/krone.........................

114.41
6.8958
3.1809
87.729
18.156

111.77
7.4799
3.4098
85.386
19.010

114.00
7.7349
3.4247
85.530
17.766

117.04
7.8916
3.4844
85.861
18.068

117.43
7.6714
3.3875
85.538
17.639

116.75
7.3433
3.2457
84.286
16.962

116.86
7.1549
3.1543
83.560
16.573

118.19
7.0297
3.0962
83.974
16.181

116.26
6.6033
2.8972
83.442
15.152

116.29
6.6959
2.8966
83.936
15.109

6
7
8
9
10

Finland/markka.........................
France/franc..............................
Germany/deutsche m ark.........
India/rupee ..............................
Ireland/pound...........................

24.337
22.218
49.867
12.207
191.84

27.732
23.504
54.561
12.265
204.65

26.892
23.694
55.089
12.686
205.77

27.428
24.056
55.883
12.903
210.34

27.122
23.489
54.280
12.932
203.88

26.452
22.515
52.113
12.868
194.59

25.903
21.925
50.769
12.608
189.01

25.752
21.539
49.771
12.567
185.54

24.656
20.142
46.757
12.164
173.31

24.612
20.147
47.498
12.131
173.25

11
12
13
14
15

Italy/lira....................................
Japan/yen..................................
Malaysia/ringgit.........................
Mexico/peso..............................
Netherlands/guilder.................

16
17
18
19
20

New Zealand/dollar.................
Norway/krone..........................
Portugal/escudo.........................
South Africa/rand.....................
Spain/peseta..............................

103.64
19.079
2.2782
115.01
1.3073

102.23
19.747
2.0437
118.72
1.4896

97.337
20.261
1.9980
128.54
1.3958

98.309
20.676
2.0096
132.73
1.3639

98.069
20.421
1.9756
133.13
1.3423

96.770
19.938
1.9178
133.20
1.3085

95.404
19.370
1.8773
132.83
1.2653

96.137
19.087
1.8591
133.69
1.2409

93.414
18.485
1.7722
129.27
1.1686

91.999
18.540
1.7621
126.50
1.1672

21
22
23
24

Sri Lanka/rupee.......................
Sweden/krona...........................
Switzerland/franc.....................
United Kingdom/pound...........

6.3834
22.139
56.283
191.84

6.4226
23.323
60.121
212.24

6.1947
23.647
59.697
232.58

6.3196
24.072
61.012
240.12

5.9707
23.845
60.185
241.64

5.8139
23.240
57.942
239.41

5.7379
22.722
56.022
234.59

5.9525
22.490
54.907
240.29

5.5975
21.734
51.502
229.41

5.5527
21.704
52.043
223.19

92.39

88.09

87.39

85.50

86.59

89.31

90.99

91.38

96.02

96.22

Memo:
25 United States/dollar1 ...............

.11782
.47981
43.210
4.3896
46.284

.12035
.45834
45.720
4.3826
49.843

.11694
.44311
45.967
4.3535
50.369

.11742
.46644
47.127
4.3443
51.398

1. Index of weighted-average exchange value of U.S. dollar against cur­
rencies of other G-10 countries plus Switzerland. March 1975 = 100.
Weights are 1972-76 global trade of each of the 10 countries. Series
revised as of August 1978. For description and back data, see “Index of




.11441
.47777
46.902
4.3324
50.052

.11000
.46928
46.187
4.3166
48.102

.10704
.47747
45.406
4.3071
46.730

.10478
.49419
44.994
4.2792
45.810

.09807
.48615
44.196
4.2544
42.870

.09699
.47897
43.830
4.2238
42.912

the Weighted-Average Exchange Value of the U.S. Dollar: Revision” on page
700 of the August 1978 Bulletin.
Note. Averages of certified noon buying rates in New York for cable transfers.

A67

Guide to Tabular Presentation,
Statistical Releases, and Special Tables
G u id e t o T a b u l a r P r e s e n t a t io n

S ym bols a n d A bb revia tio n s
c
e
p
r

*

C o r r e c te d
E s tim a te d
P r e lim in a r y
R e v is e d ( N o ta tio n a p p e a r s o n c o lu m n h e a d in g
w h e n m o r e t h a n h a l f o f fig u re s in t h a t c o lu m n
a r e c h a n g e d .)
A m o u n ts in s ig n ific a n t in t e r m s o f t h e la s t d e c im a l
p la c e s h o w n in t h e ta b le ( f o r e x a m p le , le s s th a n
5 0 0 ,0 0 0 w h e n th e s m a l le s t u n it g iv e n is
m illio n s )

0
C a l c u la te d to b e z e r o
n .a .
N o t a v a ila b le
n .e .c .
N o t e ls e w h e r e c la s s if ie d
IP C s
I n d iv i d u a ls , p a r t n e r s h i p s , a n d c o r p o r a t i o n s
R E IT s
R e a l e s t a t e in v e s t m e n t tr u s ts
RPs
R e p u r c h a s e a g r e e m e n ts
SM SA s
S ta n d a r d m e tr o p o lit a n s ta t is tic a l a r e a s
........................C e ll n o t a p p lic a b le

G eneral Inform ation
M in u s s ig n s a r e u s e d t o in d ic a te (1) a d e c r e a s e , (2) a n e g a tiv e
fig u re , o r (3) a n o u tflo w .
“ U .S . g o v e r n m e n t s e c u r it ie s ” m a y in c lu d e g u a r a n te e d is ­
s u e s o f U .S . g o v e r n m e n t a g e n c ie s ( th e flo w o f f u n d s fig u re s
a ls o in c lu d e n o t f u lly g u a r a n te e d is s u e s ) a s w e ll a s d ir e c t o b li­

g a tio n s o f th e T r e a s u r y . “ S ta te a n d lo c a l g o v e r n m e n t ” a ls o
in c lu d e s m u n ic ip a litie s , s p e c ia l d i s t r i c t s , a n d o t h e r p o litic a l
s u b d iv is io n s .
I n s o m e o f th e ta b l e s d e ta ils d o n o t a d d t o to t a l s b e c a u s e o f
ro u n d in g .

S t a t is t ic a l R e l e a s e s

L ist P u blish ed S em iann u ally, with L a te s t Bulletin R eferen ce
A n tic ip a te d s c h e d u le o f r e le a s e d a te s f o r p e r io d ic r e le a s e s

Issu e
..................................................................................... D e c e m b e r 1980

Page
A 80

S p e c ia l T a b l e s

P ublished Irregularly, with L a te s t Bulletin R eference
C o m m e r c ia l b a n k a s s e t s a n d
C o m m e r c ia l b a n k a s s e t s a n d
C o m m e r c ia l b a n k a s s e t s a n d
C o m m e r c ia l b a n k a s s e t s a n d
A s s e ts a n d lia b ilitie s o f U .S .

lia b ilitie s , c a ll d a t e s , D e c e m b e r 31, 1978, to M a r c h 31 , 1980 ..........
lia b ilitie s , J u n e 3 0 , 1 9 8 0 ...........................................................................................
lia b ilitie s , S e p te m b e r 3 0, 1 9 8 0 ..............................................................................
lia b ilitie s , D e c e m b e r 3 1, 1980 ..............................................................................
b r a n c h e s a n d a g e n c ie s o f f o r e ig n b a n k s , S e p te m b e r 3 0 , 1 9 8 0 ..........

Special ta b les begin on fo llo w in g p a g e .




O c t o b e r 1980
D e c e m b e r 1980
F e b r u a r y 1981
A p ril 1981
A p ril 1981

A 71
A 68
A 68
A 72
A 78

A68
4 .1 0

Special Tables □ April 1981
T IM E A N D S A V IN G S D E P O S IT S

H e ld b y I n s u r e d C o m m e rc ia l B a n k s o n R e c e n t S u r v e y D a te s
Deposits

Types of deposits, denomination,
and original maturity

Number of issuing banks
July 30,
1980

Oct. 29,
1980

Percentage change

Millions of dollars

Jan. 28,
1981

July 30,
1980

Oct. 29,
1980

Jan. 28,
1981

July. 30Oct. 29

Oct. 29Jan. 28

Total time and savings deposits..............................................

14,188

14,364

14,346

685,234

713,860

768,145

4.2

7.6

Savings.................................................................................
Holder
Individuals and nonprofit organizations........................
Partnerships and corporations operated for profit
(other than commercial banks)................................
Domestic governmental units.........................................
All other...........................................................................

14,188

14,364

14,346

204,142

211,128

208,249

3.4

-1 .4

14,188

14,364

14,346

190,040

19^,074

194,475

3.2

-0 .8

10,674
8,947
2,092

10,528
9,333
1,530

11,026
9,377
1,720

9,859
3,630
612

10,974
3,567
512

9,686
3,221
866

11.3
-1 .7
-16.3

-11.7
-9 .7
69.1

Interest-bearing time deposits, less than $100,000 ......... .
Holder
Domestic governmental units1 .......................................
14 up to 90 day s..........................................................
90 up to 180 d ays........................................................
180 days up to 1 year...................................................
1 year and over............................................................
Other than domestic governmental units1 .....................
14 up to 90 days..........................................................
90 up to 180 d ays........................................................
180 days up to 1 year...................................................
1 up to 2xk years..........................................................
IVi up to 4 years..........................................................
4 up to 6 years..............................................................
6 up to 8 years..............................................................
8 years and o v er..........................................................
IRA and Keogh Plan time deposits, with maturities of
3 years or more or variable ceiling ra te s ...............
Money market certificates, $10,000 or more, with ma­
turities of exactly 6 months2 ....................................
Variable interest rate ceiling time deposits of less than
$100,000 with maturities of 2Vi years or
more2-3 .....................................................................

14,073

14,246

14,223

269,179

274,507

301,007

2.0

9.7

10,099
4,276
5,966
5,020
7,827
13,991
4,800
10,444
7,716
13,707
12,656
13,443
11,627
8,489

9,125
3,551
5,224
3,756
7,334
14,127
4,360
10,583
7,802
13,597
12,636
13,496
11,586
8,111

9,180
3,454
5,199
3,960
6,745
14,101
3,902
10.771
7,632
13,688
12,284
13,258
11,315
8,238

2,068
581
555
428
504
92,231
1,568
16,448
1,980
12,199
8,579
30,586
18,382
2,489

2,232
54i3
485
335
871
85,446
1,404
15,262
1,895
11,103
7,606
27,866
17,776
2,528

1,960
332
581
278
769
76,864
1,083
13,933
2,311
9,621
6,582
24,568
16,411
2,354

7.9
-6 .9
-12.5
-21.8
72.8
-7 .4
-10.5
-7 .2
-4 .3
-8 .9
-11.3
-8 .9
-3 .3
1.6

-12.2
-38.5
19.6
-17.0
-11.7
-10.0
-22.8
-8 .7
22.0
-13.4
-13.5
-11.8
-7 .7
-6 .9

Interest-bearing time deposits, $100,000 or more.............
Non-interest-bearing time deposits....................................
Less than $100,000 ..........................................................
$100,000 or m o re ............................................................
Club accounts (Christmas savings, vacation, and the like)

10,284

10,392

10,416

5,309

5,488

5,670

3.4

3.3

13,670

13,830

13,907

147,905

152,848

184,755

3.3

20.9

12,887

13,374

13,277

21,666

28,493

31,758

31.5

11.5

12,593

13,163

13,474

205,378

222,513

253,750

8.3

14.0

1,318
913
719

1,386
1,018
688

1,379
1,031
669

4,304
834
3,470

4,230
910
3,319

4,234
753
3,481

-1 .7
9.1
-4 .3

0.1
-17.3
4.9

8,963

8,375

9,070

2,233

1,483

906

-33.6

-38.9

1. Excludes all money market certificates, IRAs, and Keogh Plan accounts.
2. Excludes accounts held in IRA and Keogh Plans. Such accounts are included
in item above.
3. Effective Jan. 1, 1980, commercial banks, savings and loan associations, and
mutual savings banks are authorized to offer variable ceiling accounts with no
required minimum denomination and with maturities of 2 V2 years or more. The
maximum rate for commercial banks is
percentage point below the yield on
2ty2-year U.S. Treasury securities: the ceiling rate for thrift institutions is V4 per­
centage point higher than that for commercial banks.




Note. All banks that had either discontinued offering or never offered certain
types of deposits as of the survey date are not counted as issuing banks. However,
small amounts of deposits held at banks that had discontinued issuing certain types
of deposits are included in the amounts outstanding.
Details may not add to totals because of rounding.

Time and Savings Deposits
4 .1 1

A69

S M A L L - D E N O M I N A T I O N T I M E A N D S A V I N G S D E P O S I T S H e ld b y I n s u r e d C o m m e rc ia l B a n k s o n O c t. 2 9 ,
19 8 0 , a n d J a n . 2 8 , 19 8 1 , C o m p a r e d w ith P r e v io u s S u rv e y , b y T y p e o f D e p o s it, b y M o s t C o m m o n R a t e P a id o n N e w
D e p o s its in E a c h C a te g o r y , a n d b y S iz e o f B a n k
Size of bank
(total deposits in millions of dollars)

Size of bank
(total deposits in millions of dollars)
Deposit group, original
maturity, and distribu­
tion of deposits by
most common rate

All banks

All banks
Less than 100
Jan. 28,
1981

Oct. 29,
1980

Jan. 28,
1981

Oct. 29,
1980

100 and over
Jan. 28,
1981

Oct. 29,
1980

Less than 100
Jan. 28,
1981

Oct. 29,
1980

Jan. 28,
1981

Oct. 29,
1980

100 and over
Jan. 28,
1981

Oct. 29,
1980

Amount of deposits (in millions of dollars)
or percentage distribution

Number of banks, or percentage distribution
Savings deposits
Individuals and nonprofit
organizations
Issuing banks..............................
Distribution, total...................
4.50 or less..............................
4.51-5.0 0
5.01-5.2 5
Memo: Paying ceiling rate1........

14,346
100
2.9
4.1
93.0
93.0

14,364
100
4.0
6.9
89.1
89.1

12,997
100
2.9
3.9
93.2
93.2

13,042
100
4.0
6.9
89.0
89.0

1,349
100
3.0
6.0
91.0
91.0

1,322
100
4.1
6.4
89.5
89.5

194,475
100
3.7
4.6
91.7
91.7

196,074
100
4.5
5.2
90.3
90.3

66,842
100
4.6
5.3
90.0
90.0

68,819
100
4.8
5.7
89.5
89.5

127,633
100
3.2
4.2
92.6
92.6

127,255
100
4.4
4.9
90.7
90.7

Partnerships and corporations
Issuing banks..............................
Distribution, total.......................
4.50 or less..............................
4.51-5.0 0
5.01-5.2 5
Memo: Paying ceiling rate1........

11,026
100
.9
4.1
95.0
95.0

10,528
100
1.1
5.6
93.3
93.3

9,705
100
.8
4.1
95.1
95.1

9,232
100
1.2
5.5
93.3
93.3

1,322
100
1.0
4.4
94.6
94.6

1,296
100
.8
6.2
92.9
92.9

9,686
100
.9
5.7
93.4
93.4

10,974
100
.8
5.6
93.7
93.7

3,109
100
1.0
11.9
87.2
87.2

3,199
100
.5
6.5
93.0
93.0

6,578
100
.8
2.7
96.4
96.4

7,775
100
.9
5.2
93.9
93.9

Domestic governmental units
Issuing banks..............................
Distribution, total.......................
4.50 or less..............................
4.51-5.0 0
5.01-5.2 5
Memo: Paying ceiling rate1.......

9,333
100
1.0
2.3
96.7
96.7

9,319
100
3.0
1.8
95.2
95.2

8,372
100
1.0
2.0
97.0
97.0

8,377
100
3.3
1.4
95.3
95.3

961
100
.5
4.6
94.9
94.9

942
100
.6
5.3
94.1
94.1

3,218
100
.3
3.8
95.9
95.9

3,554
100
2.0
3.9
94.1
94.1

1,673
100
.4
1.9
97.8
97.8

1,924
100
3.6
1.9
94.5
94.5

1,545
100
.2
5.9
93.9
93.9

1,629
100
.2
6.2
93.6
93.6

All other
Issuing banks..............................
Distribution, total......................
4.50 or less..............................
4.51-5.0 0
5.01-5.2 5
Memo: Paying ceiling rate1.......

1,693
100
3.9
1.9
94.2
94.2

1,525
100
6.1
4.0
89.9
89.9

1,454
100
3.6
2.0
94.4
94.4

1,284
100
6.3
4.6
89.2
89.2

239
100
5.6
1.0
93.4
93.4

240
100
5.3
1.0
93.7
93.7

862
100
.5
2.7
96.8
96.8

512
100
1.0
15.6
83.4
83.4

610
100
(2)
3.8
96.2
96.2

360
100
(2)
22.2
77.8
77.8

252
100
1.6
(2)
98.4
98.4

152
100
3.5
(2)
96.5
96.5

Time deposits less than $100,000
Domestic governmental units
14 up to 90 days
Issuing banks..........................
Distribution, total...................
5.00 or less..........................
5.01-5.50 . .......................
5.51-8.0 0
Memo: Paying ceiling rate1.......

3,448
100
23.5
34.4
42.1
36.4

3,545
100
19.7
35.6
44.8
37.5

2,865
100
26.2
29.5
44.3
38.1

2,960
100
21.2
31.5
47.3
39.2

583
100
10.5
58.4
31.1
27.9

586
100
11.8
55.9
32.3
28.9

322
100
9.9
35.4
54.7
50.8

530
100
5.7
21.7
72.6
67.7

172
100
16.6
14.1
69.3
65.0

173
100
14.9
13.4
71.7
64.0

150
100
2.3
59.9
37.8
34.5

357
100
1.2
25.8
73.1
69.4

90 up to 180 days
Issuing banks..........................
Distribution, total...................
5.00 or less..........................
5.01-5.5................................ 0
5.51-8.0 0
Memo: Paying ceiling rate1.......

5,194
100
3.4
22.1
74.5
25.6

5,218
100
4.1
28.9
67.0
21.6

4,428
100
3.9
21.8
74.3
26.0

4,452
100
4.5
29.5
65.9
21.1

766
100
.4
23.8
75.7
23.0

766
100
1.8
25.3
72.8
24.7

578
100
.1
13.7
86.2
22.1

483
100
.7
33.5
65.8
29.5

275
100
.2
22.4
77.4
36.8

331
100
.6
40.4
59.0
33.4

303
100
(2)
5.8
94.2
8.8

152
100
.8
18.6
80.5
20.9

180 days up to 1 year
Issuing banks..........................
Distribution, total...................
5.00 or less..........................
5.01-5.5 0
5.51-8.0 0
Memo: Paying ceiling rate1........

3,960
100
.7
27.9
71.4
20.0

3,756
100
1.6
27.4
71.0
25.6

3,318
100
.8
29.7
69.5
18.9

3,181
100
1.9
28.6
69.5
25.3

642
100
(2)
18.7
81.3
25.5

575
100
(2)
20.9
79.1
27.2

278
100
(2)
14.7
85.3
23.2

335
100
.1
14.7
85.2
34.6

104
100
(2)
25.9
74.1
30.5

155
100
.3
16.2
83.6
45.4

174
100
(2)
8.1
91.9
18.8

180
100
(2)
13.5
86.5
25.3

1 year and over
Issuing banks..........................
Distribution, total...................
5.50 or less..........................
5.51-6.0 0
6.01-8.0 0
Memo: Paying ceiling rate1.......

6,740
100
1.7
48.4
49.9
16.9

7,322
100
2.8
52.9
44.3
11.5

5,925
100
1.4
47.3
51.2
16.5

6,535
100
2.6
52.7
44.7
10.2

815
100
3.6
55.8
40.6
20.2

787
100
4.3
55.0
40.7
22.4

769
100
35.6
32.3
32.1
17.7

870
100
44.0
35.9
20.1
7.3

607
100
44.1
21.4
34.5
18.7

692
100
54.4
25.5
20.0
5.6

162
100
3.8
73.2
23.0
13.8

178
100
3.5
76.4
20.1
14.0

For notes see end of table.




A70
4.11

Special Tables □ A p ril 1981
C o n tin u e d
Size of bank
(total deposits in millions of dollars)

Deposit group, original
maturity, and distribu­
tion of deposits by
most common rate

All banks
Less than 100
Jan. 28,
1981

Size of bank
(total deposits in millions of dollars)
All banks

Oct. 29,
1980

Jan. 28,
1981

Oct. 29,
1980

100 and over
Jan. 28,
1981

Oct. 29,
1980

Less than 100
Jan. 28,
1981

Oct. 29,
1980

Jan. 28,
1981

Oct. 29,
1980

100 and over
Jan. 28,
1981

Oct. 29,
1980

Amount of deposits (in millions of dollars)
or percentage distribution

Number of banks or percentage distribution
Time deposits less than $100,000
(cont.)

Other than domestic governmental
units
14 up to 90 days
Issuing banks................................
Distribution, total........................
5.00 or less................................
5.01-5.25....................................
Memo: Paying ceiling rate1.............

3,861
100
20.6
79.4
79.4

4,360
100
27.8
72.2
72.2

2,936
100
23.4
76.6
76.6

3,437
100
31.7
68.3
68.3

926
100
11.9
88.1
88.1

923
100
13.6
86.4
86.4

1,083
100
14.2
85.8
85.8

1,404
100
21.9
78.1
78.1

106
100
38.4
61.6
61.6

311
100
11.9
88.1
88.1

978
100
11.6
88.4
88.4

1,093
100
24.8
75.2
75.2

90 up to 180 days
Issuing banks................................
Distribution, total.........................
4.99 or less................................
5.00-5.50....................................
5.51-5.75....................................
Memo: Paying ceiling rate1.............

10,654
100
(2)
32.7
67.3
67.3

10,578
100
(2)
33.5
66.5
66.5

9,327
100
(2)
33.9
66.1
66.1

9,288
100
(2)
34.7
65.3
65.3

1,328
100
(2)
24.0
76.0
76.0

1,290
100
(2)
24.7
75.3
74.9

13,918
100
(2)
31.9
68.1
68.1

15,245
100
(2)
31.6
68.4
68.3

4,533
100
(2)
26.6
73.4
73.4

4,947
100
(2)
27.4
72.6
72.6

9,385
100
(2)
34.4
65.6
65.6

10,298
100
(2)
33.6
66.4
66.3

180 days up to 1 year
Issuing banks................................
Distribution, total........................
4.99 or less................................
5.00-5.50....................................
5.51-5.75....................................
Memo: Paying ceiling rate1.............

7,532
100
.8
49.2
50.0
50.0

7,790
100
.8
50.1
49.0
49.0

6,607
100
.9
52.8
46.3
46.3

6,862
100
.9
53.5
45.6
45.6

925
100
(2)
23.7
76.3
76.3

928
100
.1
25.2
74.7
74.7

2.305
100
(2)
58.2
41.8
41.8

1,890
100
(2)
39.9
60.1
60.1

905
100
(2)
76.7
23.2
23.2

593
100
.1
31.7
68.2
68.2

1,400
100
(2)
46.3
53.7
53.7

1,298
100
(2)
43.6
56.4
56.4

1 up to 2 V2 years
Issuing banks................................
Distribution, total........................
5.50 or less................................
5.51-6.00....................................
Memo: Paying ceiling rate1.............

13,683
100
.3
99.7
99.2

13,506
100
.1
99.9
99.5

12,355
100
2
99^8
99.3

12,212
100
(2)
100.0
99.6

1,328
100
1.4
98.6
98.2

1,294
100
1.0
99.0
98.7

9,614
100
.8
99.2
98.7

11,027
100
.7
99.3
98.9

6,124
100
.1
99.9
99.8

6,825
100
(2)
100.0
100.0

3,490
100
2.1
97.9
96.9

4,202
100
2.0
98.0
97.1

21/? years up to 4 years
issuing banks................................
Distribution, total........................
6.00 or less................................
6.01-6.50....................................
Memo: Paying ceiling rate1.............

12,231
100
2.1
97.9
97.9

12,576
100
1.3
98.7
97.6

10,949
100
1.9
98.1
98.1

11,320
100
1.1
98.9
97.7

1,282
100
3.5
96.5
96.2

1,257
100
2.8
97.2
96.9

6,559
100
1.2
98.8
98.6

7,567
100
1.6
98.4
97.9

3,682
100
.5
99.5
99.5

4,295
100
1.0
99.0
98.5

2,876
100
2.1
97.9
97.5

3,273
100
2.4
97.6
97.2

4 up to 6 years
Issuing banks................................
Distribution, total.........................
7.00 or less................................
7.01-7.25....................................
Memo. Paying ceiling rate1-3...........

13,250
100
3.8
96.2
96.1

13,488
100
8.1
91.9
91.9

11.917
100
3.9
96.1
96.1

12,183
100
8.5
91.5
91.5

1,333
100
3.3
96.7
95.9

1,306
100
3.6
96.4
95.6

24,523
100
2.2
97.8
97.7

27,817
100
3.6
96.4
96.3

12,915
100
2.7
97.3
97.3

14,701
100
4.7
95.3
95.3

11,608
100
1.8
98.2
98.1

13,116
100
2.4
97.6
97.4

6 up to 8 years
Issuing banks................................
Distribution, total........................
7.25 or less................................
7.26-7.50....................................
Memo: Paying ceiling rate1-3...........

11,307
100
2.4
97.6
97.3

11,532
100
2.4
97.6
97.3

10,034
100
2.5
97.5
97.2

10.287
100
2.5
97.5
97.2

1,272
100
2.0
98.0
98.0

1,244
100
1.2
98.8
98.8

16,303
100
1.6
98.4
98.4

17,647
100
1.0
99.0
99.0

7,048
100
1.0
99.0
99.0

7,496
100
.3
99.7
99.7

9,254
100
2.0
98.0
98.0

10,151
100
1.5
98.5
98.5

8 years and over
Issuing banks................................
Distribution, total........................
7.50 or less................................
7.51-7.75....................................
Memo: Paying ceiling rate1-3...........

8,226
100
2.8
97.2
97.2

8,094
100
3.7
96.3
96.3

7,104
100
2.3
97.7
97.7

7,005
100
3.5
96.5
96.5

1,122
100
6.0
94.0
94.0

1,089
100
5.1
94.9
94.9

2,340
100
6.3
93.7
93.7

2,509
100
5.8
94.2
94.2

787
100
.3
99.7
99.7

876
100
.4
99.6
99.6

1,553
100
9.3
90.7
90.7

1,633
100
8.7
91.3
91.3

IRA and Keogh Plan time deposits,
with maturities of 3 years or more
or variable ceiling rates
Issuing banks...................................
Distribution, total............................
7.50 or less....................................
7.51-8.00.......................................
8.01-14.72.....................................
Memo: Paying ceiling rate1.............

10,292
100
17.7
41.7
40.6
38.3

10,056
<4)
(4;
(4)
(4)
(4)

9,033
100
19.0
40.2
40.8
38.8

8,833
(4)
(4)
(4)

1,259
100
8.5
52.6
38.8
34.7

1,223
<4}
il
4
4)
(4)

5,668
100
5.6
47.2
47.2
44.8

5,433
(4)
(4
(4)
(4
(4)

1,866
100
8.8
33.3
57.9
55.5

1,817
ft
4
ft
ft
(4)

3,803
100
4.1
54.1
41.9
39.6

3,616
(4)
(4)
(4)
(4)
(4)

Money market certificates, $10,000
or more, 6 months
Issuing banks....................................
Distribution, total............................
14.00 or less..................................
14.01-14.50....................................
14.51-14.72....................................
Memo: paying ceiling rate1.............

13,907
100
1.3
(2)
98.7
98.7

13,704
(4)
(4
!4
4)
(4)

12,559
100
1.3
(2)
98.7
98.7

12,384
(4)
4
i4}
4
(4

1,348
100
1.2
(2)
98.8
98.8

1,321
(4)
4
il
4
(4

184,755
100
.7
(2)
99.3
99.3

152,821
(4)
(4)
ft
(l
(4

80,414
100
1.2
(2)
98.8
98.8

67,347
(4)
r)
r)
w
r)

104,341
100
.2
(2)
99.8
99.8

85,474
(4)
r)
(4)
r)
r)

For notes see end of table.




Time and Savings Deposits

A71

4.11 Continued
Size of bank
(total deposits in millions of dollars)
Deposit group, original
maturity, and distribu­
tion of deposits by
most common rate

100 and over

Less than 100

Less than 100

100 and over

Jan. 28, Oct. 29, Jan. 28, Oct. 29, Jan. 28, Oct. 29,
1980
1980
1981
1980
1981
1981

Jan. 28, Oct. 29, Jan. 28, Oct. 29, Jan. 28, Oct. 29,
1981
1980
1980
1981
1981
1980

Number of banks, or percentage distribution

Amount of deposits (in millions of dollars) or percentage
distribution

Time deposits less than $100,000 (cont.)

Variable interest rate ceiling time de­
posits of less than $100,000 with
maturities of 2!l2 years or more
Issuing banks.........................................
Distribution, total..................................
11.00 or less.......................................
11.01-11.5 0
11.51-11.7 5
Memo: Paying ceiling rate1...................

13,188
100
3.7
2.3
94.0
94.0

13,285
(4)
(4)
(4
(4)
(4)

11,862
100
3.7
2.5
93.8
93.8

11,988

1,326
100
3.8
(2)
96.2
96.2

1,297

(4)
(4)
(4)
(4)

Club accounts
Issuing banks.........................................
Distribution, total..................................
0.00....................................................
0.01-4.00.............................................
4.01-4.5............................................... 0
4.51-5.5............................................... 0

5,919
100
56.1
25.5
3.3
15.2

5,468
100
48.2
29.1
6.8
15.9

5,445
100
57.2
25.5
2.6
14.7

5,025
100
48.7
29.6
6.3
15.3

474
100
43.4
25.0
11.4
20.2

$

31,723
100
1.7
.7
97.6
97.6

28,419
(4)
(4)
(4)
(4)
(4)

16,956
100
1.2
1.3
97.5
97.5

443
100
41.6
22.9
12.3
23.2

495
100
29.6
26.7
13.9
29.9

709
100
26.0
24.9
15.5
33.6

264
100
37.1
30.7
2.9
29.3

$

(4)

14,768
100
2.3
(2)
97.7
97.7

13,166
(4)
(4)
(4)
(4)
(4)

232
100
21.0
22.1
26.4
30.5

346
100
32.9
18.6
14.4
34.0

363
100
19.4
30.8
16.6
33.2

Note. All banks that either had discontinued offering or had never offered
particular types of deposits as of the survey date are not counted as issuing banks.
Moreover, the small amounts of deposits held at banks that had discontinued issuing
deposits are not included in the amounts outstanding. Therefore, the deposit amounts
shown in table 4.10 may exceed the deposit amounts shown in this table.
The most common interest rate for each instrument refers to the stated rate per
annum (before compounding) that banks paid on the largest dollar volume of
deposit inflows during the 2-week period immediately preceding the survey date.
Details may not add to totals because of rounding.

1. See Bulletin table 1.16 for the ceiling rates that existed at the time of each
survey.
2. Less than .05 percent.
3. In October 1979 these deposit categories included the variable ceiling rate
account of 4 years and over issued since July 1, 1979: the ceiling rate on such
accounts was 7.60 percent in October. In January 1980 all variable ceiling accounts
were excluded from these categories and hence the fixed rate ceilings that apply
to each maturity category are shown in the table.
4. See the January 1981 Bulletin for a distribution in October 1980 of these
accounts by size of bank and by the interest rates paid.
4 .1 2

Size of bank
(total deposits in millions of dollars)

A V E R A G E O F M O S T C O M M O N I N T E R E S T R A T E S P A I D o n V a rio u s C a te g o r ie s o f T im e a n d S a v in g s D e p o s its
a t I n s u r e d C o m m e r c ia l B a n k s , J a n u a r y 2 8 , 1981
Bank size (total deposit in millions of dollars)
Type of deposit, holder, and
original maturity

All size
groups

Less
than 20

20 up
to 50

50 up
to 100

100 up
to 500

500 up
to 1.000

1,000
and over

Savings and small-denomination time deposits.............................................

9.31

9.88

9.69

9.43

9.19

8.81

9.05

Savings, total..................................................................................................
Individuals and nonprofit organizations...................................................
Partnerships and corporations..................................................................
Domestic governmental units....................................................................
All other.....................................................................................................

5.20
5.20
5.23
5.23
5.21

5.23
5.23
5.17
5.25
5.25

5.18
5.18
5.21
5.23
5.25

5.18
5.17
5.23
5.25
5.21

5.20
5.20
5.24
5.21
5.10

5.19
5.19
5.20
5.23
5.15

5.22
5.22
5.25
5.23
5.24

Other time deposits in denominations of less than $100,000, total...........
Domestic governmental units, total..........................................................
14 up to 90 d ays.....................................................................................
90 up to 180 d ay s...................................................................................
180 days up to 1 year.............................................................................
1 year and over......................................................................................

6.69
6.27
6.48
6.21
6.26
6.23

6.65
6.79
6.53
6.55
6.17
7.13

6.85
6.93
7.48
6.65
6.69
6.93

6.68
5.72
6.96
6.38
6.07
5.50

6.68
5.85
5.14
5.80
5.95
6.80

6.67
6.43
6.33
6.26
6.37
6.73

6.62
6.20
6.20
6.31
6.77
5.94

Other than domestic government units, to ta l.........................................
14 up to 90 days.....................................................................................
90 up to 180 d ays...................................................................................
180 days up to 1 year.............................................................................
1 up to 2'A years....................................................................................
2'/2 up to 4 years.....................................................................................
4 up to 6 years........................................................................................
6 up to 8 years........................................................................................
8 years or more......................................................................................

6.71
5.19
5.66
5.59
5.99
6.47
7.23
7.45
7.67

6.64
5.25
5.64
5.43
6.00
6.49
7.24
7.50
7.75

6.85
5.11
5.68
5.71
6.00
6.46
7.24
7.50
7.75

6.71
5.02
5.61
5.51
6.00
6.50
7.24
7.32
7.75

6.71
5.23
5.67
5.66
5.95
6.44
7.20
7.48
7.67

6.67
5.09
5.62
5.70
5.95
6.47
7.23
7.49
7.64

6.62
5.22
5.66
5.59
6.00
6.48
7.21
7.43
7.60

IRA and Keogh Plan time deposits, with maturities of 3 years or more
or variable ceiling rates.........................................................................

9.80

9.80

10.18

10.23

9.77

9.83

9.44

Money market certificates, exactly 6 months1.........................................

14.61

14.57

14.45

14.65

14.63

14.66

14.70

Variable interest rate ceiling time deposits of less than $100,000 with
maturities of 2‘/2 years or more2 ......................................................

11.70

11.67

11.72

11.74

11.68

11.54

11.75

Club accounts3................................................................................................

4.06

2.48

3.19

3.95

4.34

4.60

4.66

1. See note 2 in table 4.10.
2. See notes 2 and 3 in table 4.10
3. Club accounts are excluded from all of the other categories.
Note. The average rates were calculated by weighting the most common rate




reported on each type of deposit at each bank by the amount of that type of deposit
outstanding. All banks that had either discontinued offering or never offered par­
ticular types of deposit as of the survey date were excluded from the calculations
for those specific types of deposits.

A72
4 .2 0

Special Tables □ April 1981
D O M E S T I C A N D F O R E I G N O F F I C E S , C o m m e rc ia l B a n k s w ith A s s e ts o f $100 M illio n o r o v e r 1/7
C o n s o lid a te d R e p o r t o f C o n d itio n ; D e c . 3 1 , 1980

Millions of dollars
Banks with foreign offices2
Item

Insured
Total

1 Total assets
2 Cash and due from depository institutions .
Currency and coin (U.S. and foreign) .
4 Balances with Federal Reserve B anks.......................................................................................
5 Balances with other central banks...............................................................................................
6 Demand balances with commercial banks in United States.....................................................
7 All other balances with depository institutions in United States and with banks in foreign
countries...............................................................................................................................
8
Time and savings balances with commercial banks in United States..................................
9
Balances with other depository institutions in United States...............................................
10
Balances with banks in foreign countries...............................................................................
11
Foreign branches of other U.S. banks...............................................................................
12
Other banks in foreign countries.........................................................................................
13 Cash items in process of collection.............................................................................................
14 Total securities, loans, and lease financing receivables ................................................................
15 Total securities, book value............................................................................................................
16 U.S. Treasury.............................................................................................................................
Obligations of other U.S. government agencies and corporations.........................................
Obligations of states and political subdivisions in United States.............................................
All other securities.......................................................................................................................
Other bonds, notes, and debentures.......................................................................................
Federal Reserve and corporate stock.....................................................................................
Trading account securities ......................................................................................................
23 Federal funds sold and securities purchased under agreements to resell...................................
24 Total loans, gross......................................................... ...................................................................
25 Less: Unearned income on loans.............................. ...................................................................
26
Allowance for possible loan lo ss.........................................................................................
27 E quals: L oans,net......................................................................................................................
Total loans, gross, by category
28 Real estate loans ...................................................
29 Construction and land development.................
30 Secured by farm land..........................................
31 Secured by residential properties .....................
32
1-to 4-family...................................................
33
FHA-insured or VA-guaranteed...............
34
Conventional..............................................
35
Multifamily...................................................
36
FHA-insured..............................................
37
Conventional..............................................
38 Secured by nonfarm nonresidential properties .
39 Loans to financial institutions..............................
40 REITs and mortgage companies in United States .
41 Commercial banks in United States.......................
42
U.S. branches and agencies of foreign banks . . .
43
Other commercial banks......................................
44 Banks in foreign countries......................................
45
Foreign branches of other U.S. banks...............
46
O th e r..................................................................
47 Finance companies in United States.......................
48 Other financial institutions......................................
49 Loans for purchasing or carrying securities..........................................
50 Brokers and dealers in securities.......................................................
51 O th e r.................................................................................................
52 Loans to finance agricultural production and other loans to farmers.
53 Commercial and industrial loans...........................................................
54 U.S. addressees (domicile).................................................................
55 Non-U.S. addressees (domicile).......................................................
56 Loans to individuals for household, family, and other personal expenditures.................
57 Installment loans ..............................................................................................................
Passenger automobiles...................................................................................................
58
59
Credit cards and related plans.......................................................................................
60
Retail (charge account) credit card............................................................................
61
Check and revolving credit.........................................................................................
62
Mobile homes................................................................................................................
63
Other installment loans...................................................................................................
64
Other retail consumer goods.....................................................................................
65
Residential property repair and modernization .......................................................
Other installment loans for household, family., and other personal expenditures .
66
67 Single-payment loans.
68 Allotfierr lo an s...............
69 Loans to foreign governments and official institutions
70 Other
71 Lease financing receivables ......................................................................................................
72 Bank premises, furniture and fixtures, and other assets representing bank premises.........
73 Real estate owned other than bank premises..........................................................................
74 All other assets...........................................................................................................................
75 Investment in unconsolidated subsidiaries and associated companies ..............................
76 Customers’ liability on acceptances outstanding..................................................................
77
U.S. addressees (domicile)................................................................................................
78
Non-U.S. addressees (domicile).......................................................................................
79 Net due from foreign branches, foreign subsidiaries, Edge and agreement subsidiaries
80 O th e r.....................................................................................................................................




Foreign
offices3

Domestic
offices

Banks
without
foreign
offices

1,461,055

1,091,408

353,763

768,688

369,646

293,791
14,345
26,623
2,800
37,600

249,317
8,421
20,062
2,800
26,316

130,527
308
389
2,741
4,656

118,790
8,113
19,674
59
21,660

44,474
5,924
6,560
N/A
11,283

132,714
6,648
500
125,566
N/A
N/A
79,709

125,406
2,472
200
122,634
26,671
95,963
66,311

120,255
1,422
122
118,711
25,562
93,149
2,177

5,151
1,050
178
3,923
1,109
2,814
64,134

7,308
4,177
200
2,931
N/A
N/A
13,398

1,069,341

758,717

197,752

560,965

310,623

220,205
65,634
32,923
99,165
22,483
11,385
1,717
9,380
47,735
809,656
13,873
8,017
787,766

126,332
34,930
15,845
55,808
19,749
9,420
1,279
9,050
26,833
607,465
7,984
5,843
593,638

10,489
403
9
751
9,326
7,751
168
1,408
306
186,542
1,678
235
184,629

115,843
34,527
15,836
55,057
10,423
1,670
1,111
7,643
26,528
420,923
6,307
5,608
409,009

93,872
30,704
17,078
43,356
2,734
1,965
439
330
20,901
202,191
5,889
2,174
194,129

189,851
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
79,811
5,670
7,283
N.A.
N.A.
37,054
N.A.
N.A.
10,725
19,080
13,084
9,037
4,047
9,898
342,227
N.A.
N.A.
129,461
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
45,323
N.A.
N.A.
13,635
18,891
1,614
77,418
1,345
40,749
N.A.
N.A.
N.A.
35,324

115,624
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
76,095
4,963
6,081
2,482
3,599
36,708
714
35,993
10,268
18,075
11,254
8,682
2,573
5,983
283,238
171,776
111,461
73,514
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
41,757
27,352
14,405
11,914
11,578
1,127
70,669
1,307
40,457
13,686
26,771
N.A.
28,906

6,741
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
35,003
104
678
282
396
26,751
324
26,427
382
7,088
1,259
857
402
709
109,401
6,255
103,146
6,448
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
26,980
24,572
2,408
2,328
1,199
127
24,158
838
8,785
N.A.
N.A.
3,980
10,554

108,883
23,009
838
63,511
60,271
3,887
56,384
3,240
221
3,019
21,524
41,092
4,859
5,403
2,200
3,203
9,956
391
9,566
9,886
10,987
9,995
7,825
2,171
5,273
173,837
165,521
8,316
67,066
56,201
17,648
19,344
15,797
3,546
3,471
15,739
4,300
3,880
7,559
10,865
14,777
2,780
11,997
9,586
10,379
1,001
77,553
468
31,671
N.A.
N.A.
27,063
18,351

74,227
8,194
1,184
41,876
39,886
2,034
37,853
1,990
99
1,891
22,972
3,717
707
1,202
N.A.
N.A.
347
N.A.
N.A.
457
1,004
1,830
355
1,475
3,915
58,990
N.A.
N.A.
55,947
46,779
19,957
9,152
7,813
1,339
3,313
14,357
3,308
3,565
7,484
9,168
3,566
N.A.
N.A.
1,721
7,313
487
6,749
38
292
N.A.
N.A.
N.A.
6,418

Commercial Banks

A73

4.20 Continued
Banks with foreign offices2
Item

Insured
Total

81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96

Total liabilities and equity capital4............................................................................................................
Total liabilities excluding subordinated debt............................................................................................

Total deposits.....................................................................................................................................
Individuals, partnerships, and corporations..................................................................................
U.S. government.............................................................................................................................
States and political subdivisions in United States.........................................................................
All other...........................................................................................................................................
Foreign governments and official institutions...........................................................................
Commercial banks in United S tates..........................................................................................
U.S. branches and agencies of foreign ban k s.......................................................................
Other commercial banks in United States.............................................................................
Banks in foreign countries...........................................................................................................
Foreign branches of other U.S. b anks..................................................................................
Other banks in foreign countries............................................................................................
Certified and officers’ checks, travelers checks, and letters of credit sold for cash...................
Federal funds purchased and securities sold under agreements to repurchase in domestic offices
and Edge and agreement subsidiaries........................................................................................
97 Interest-bearing demand notes issued to U.S. Treasury and other liabilities for borrowed
money...........................................................................................................................................
98 Interest-bearing demand notes (note balances) issued to U.S. Treasury...................................
99 Other liabilities for borrowed m oney............................................................................................
100 Mortgage indebtedness and liability for capitalized leases.............................................................
101 All other liabilities.............................................................................................................................
102 Acceptances executed and outstanding..........................................................................................
103 Net due to foreign branches, foreign subsidiaries, Edge and agreement subsidiaries...............
104 Other................................................................................................................................................
105 Subordinated notes and debentures...................................................................................................
106 Total equity capital4............................................................................................................................
107 Preferred sto ck ...............................................................................................................................
108 Common stock.................................................................................................................................
109 Surplus............................................................................................................................................
110 Undivided profits and reserve for contingencies and other capital reserves..............................
Ill
Undivided profits........................................................................................................................
112
Reserve for contingencies and other capital reserves...............................................................
Memo
Deposits in domestic offices
113 Total demand.......................................................................................................................................
114 Total savings.......................................................................................................................................
115 Total time.............................................................................................................................................
116 Time deposits of $100,000 or m ore...................................................................................................
117 Certificates of deposit (CDs) in denominations of $100,000 or more.........................................
118 Other................................................................................................................................................
119 Savings deposits authorized for automatic transfer and now accounts...........................................
120 Money market time certificates of $10,000 and less than $100,000 with original maturities of 26
weeks............................................................................................................................................
121 Demand deposits adjusted5................................................................................................................
122 Standby letters of credit, to ta l...........................................................................................................
123 U.S. addressees (domicile)............................................................................................................
124 Non-U.S. addressees (domicile).....................................................................................................
125 Standby letters of credit conveyed to others through participations (included in total standby
letters of credit)............................................................................................................................
126 Holdings of commercial paper included in total gross loans............................................................
Average for 30 calendar days (or calendar month) ending with report date
127 Total assets...........................................................................................................................................
128 Cash and due from depository institutions........................................................................................
129 Federal funds sold and securities purchased under agreements to resell.......................................
130 Total loans...........................................................................................................................................
131 Total deposits.....................................................................................................................................
132 Time CDs in denominations of $100,000 or more in domestic offices...........................................
133 Federal funds purchased and securities sold under agreements to repurchase..............................
134 Other liabilities for borrowed m oney...............................................................................................
135 Number of b an k s...............................................................................................................................
For notes see page A77.




Foreign
offices3

Domestic
offices

Banks
without
foreign
offices

1,461,055
1,380,506

1,091,408
1,038,411

N.A.

N.A.

353,482

715,972

369,646
342,095

1,132,928
805,660
2,565
51,699
258,255
42,190
74,896
N.A.
N.A.
141,169
N.A.
N.A.
14,749

825,440
537,746
1,731
26,101
248,715
41,979
65,964
11,633
54,331
140,772
26,977
113,794
11,148

294,012
110,231
225
560
181,143
33,411
17,630
4,626
13,004
130,102
26,960
103,143
1,853

531,429
427,515
1,506
25,541
67,572
8,567
48,335
7,007
41,328
10,670
18
10,652
9,295

307,488
267,914
834
25,598
9,540
211
8,932
N.A.
N.A.
397
N.A.
N.A.
3,601

127,559

103,070

810

102,260

24,489

40,615
8,633
31,982
1,850
77,555
40,862
N.A.
36,693
5,724
74,824
96
14,889
26,183
33,656
32,772
884

36,866
6,412
30,453
1,244
71,792
40,567
N.A.
31,225
4,035
48,962
10
9,750
16,478
22,724
22,723
451

14,735
N.A.
14,735
13
43,913
7,288
27,063
9,562
282
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.

22,131
. 6,412
15,719
1,231
58,922
33,279
3,980
21,663
3,754
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.

3,749
2,221
1,529
606
5,763
295
N.A.
5,468
1,689
25,862
86
5,140
9,705
10,931
10,499
432

328,411
132,407
378,099
214,012
198,020
15,992
17,396

224,736
69,726
236,966
158,821
146,533
12,288
10,391

0
0
0
0
0
0
0

224,736
69,726
236,966
158,821
146,533
12,288
10,391

103,674
62,681
141,133
55,191
51,487
3,704
7,004

100,307
202,170
45,719
N.A.
N.A.

49,268
119,806
42,614
28,330
14,284

0
0
9,702
N.A.
N.A.

49,268
119,806
32,912
N.A.
N.A.

51,038
82,364
3,105
N.A.
N.A.

1,855
N.A.

1,696
N.A.

309
N.A.

1,387
335

159
560

1,420,879
272,473
47,267
782,887
1,103,160
189,355
133,476
31,793
1,419

1,059,707
234,316
26,252
588,192
804,501
N.A.
108,154
30,275
178

319,870
125,308
372
180,965
298,739
N.A.
390
14,655
178

739,837
109,008
25,880
407,226
505,762
139,815
107,763
15,620
178

361,172
38,158
21,015
194,696
298,659
49,540
25,322
1,518
1,241

A74
4.2 1

Special Tables □ April 1981
D O M E S T I C O F F I C E S , I n s u r e d C o m m e r c ia l B a n k s w ith A s s e ts o f $100 M illio n o r o v e r 1
C o n s o lid a te d R e p o r t o f C o n d itio n ; D e c . 3 1 , 1980
Millions of dollars
Member banks
Item

Insured
Total

National

State

Non­
member
insured

1 Total a sse ts....................................................................................................................................................

1,138,335

974,984

733,060

241,924

163,350

2 Cash and due from depository institutions.......................................................................................
3 Currency and coin (U.S. and foreign)...........................................................................................
4 Balances with Federal Reserve B anks...........................................................................................
5 Balances with other central banks..................................................................................................
6 Demand balances with commercial banks in United States.........................................................
7 All other balances with depository institutions in United States and with banks in foreign
countries.....................................................................................................................................
8
Time and savings balances with commercial banks in United States......................................
9
Balances with other depository institutions in United States...................................................
10
Balances with banks in foreign countries...................................................................................
11 Cash items in process of collection.................................................................................................

163,264
14,037
26,234
59
32,944

147,367
12,050
26,080
59
25,717

100,874
9,479
20,730
58
14,519

46,492
2,571
5,350
*
11,198

15,898
1,987
154
0
7,227

12,458
5,226
378
6,854
77,532

8,459
3,193
150
5,115
75,002

6,580
2,833
102
3,645
49,509

1,879
360
48
1,471
25,493

3,999
2,033
228
1,739
2,530

12 Total securities, loans, and lease financing receivables ........................................................................

871,589

732,525

562,393

170,133

139,064

13 Total securities, book value................................................................................................................
14 U.S. Treasury...................................................................................................................................
15 Obligations of other U.S. government agencies and corporations.............................................
16 Obligations of states and political subdivisions in United States.................................................
17 All other securities...........................................................................................................................
18
Other bonds, notes, and debentures...........................................................................................
19
Federal Reserve and corporate stock.........................................................................................
20
Trading account securities ..........................................................................................................

209,716
65,231
32,914
98,414
13,157
3,634
1,550
7,972

168,175
50,996
25,022
80,595
11,562
2,330
1,279
7,854

128,280
38,278
20,087
61,294
8,621
1,775
1,032
5,814

39,895
12,718
4,935
19,301
2,942
554
348
2,040

41,541
14,235
7,892
17,819
1,594
1,305
171
119

21 Federal funds sold and securities purchased under agreements to resell........................................

47,429

40,695

30,988

9,707

6,734

22 Total loans, gross.................................................................................................................................
23 Less: Unearned income on loans......................................................................................................
24
Allowance for possible loan lo s s ............................................................................................
25 E quals: Loans, n e t.............................................................................................................................

623,114
12,195
7,781
603,137

529,516
9,604
6,821
513,226

408,127
7,609
5,129
395,388

121,524
1,995
1,691
117,838

93,463
2,591
961
89,911

Total loans, gross, by category
26 Real estate loans .................................................................................................................................
27 Construction and land development...............................................................................................
28 Secured by farmland.......................................................................................................................
29 Secured by residential properties ..................................................................................................
30
1-to 4-family.................................................................................................................................
31
FHA-insured or VA-guaranteed.............................................................................................
32
Conventional.............................................................................................................................
33
Multifamily...................................................................................................................................
34
FHA-insured.............................................................................................................................
35
Conventional.............................................................................................................................
36 Secured by nonfarm nonresidential properties.............................................................................

183,110
31,204
2,023
105,387
100,158
5,921
94,237
5,230
320
4,909
44,496

147,244
26,492
1,541
85,603
81,447
5,284
76,163
4,156
253
3,903
33,708

120,858
20,678
1,411
71,544
68,357
4,435
63,922
3,187
144
3,043
27,225

26,486
5,813
130
14,059
13,090
849
12,241
969
109
860
6,483

35,765
4,712
481
19,784
18,711
636
18,074
1,074
68
1,006
10,788

37 Loans to financial institutions.................................... .......................................................................
38 REITs and mortgage companies in United States ........................................................................
39 Commercial banks in United States...............................................................................................
40 Banks in foreign countries...................................... .......................................................................
41 Finance companies in United States...............................................................................................
42 Other financial institutions..............................................................................................................

44,808
5,566
6,605
10,303
10,343
11,991

42,220
5,261
5,539
9,936
10,108
11,477

26,716
4,109
3,500
5,374
6,366
7,368

15,604
1,152
2,040
4,562
3,742
4,109

2,488
305
1,066
367
236
514

43 Loans for purchasing or carrying securities............... .......................................................................
44 Brokers and dealers in securities....................................................................................................
45 O th e r...................................................................... ......................................................................
46 Loans to finance agricultural production and other loans to farmers.............................................
47 Commercial and industrial loans........................................................................................................

11,825
8,180
3,645
9,189
232,827

11,153
7,852
3,202
8,221
204,806

6,126
3,547
2,579
7,616
154,462

5,027
4,305
722
705
50,344

672
328
344
867
28,021

48 Loans to individuals for household, family, and other personal expenditures..............................
49 Installment loans .............................................................................................................................
50
Passenger automobiles..................................................................................................................
Credit cards and related plans....................................................................................................
51
Retail (charge account) credit card.........................................................................................
52
Check and revolving credit......................................................................................................
53
54
Mobile homes...............................................................................................................................
55
Other installment loans................................................................................................................
56
Other retail consumer goods..................................................................................................
57
Residential property repair and modernization....................................................................
Other installment loans for household, family, and other personal expenditures.............
58
59 Single-payment loans.......................................................................................................................
60 All other lo an s....................................................................................................................................

123,013
102,980
37,605
28,496
23,610
4,886
6,783
30,096
7,608
7,445
15,043
20,032
18,343

98,944
82,665
28,738
25,592
21,293
4,199
5,523
22,812
6,078
5,483
11,251
16,278
16,762

81,081
68,158
23,647
21,033
17,830
3,203
5,033
18,445
5,212
4,502
8,731
12,923
11,267

17,863
14,508
5,091
4,559
3,563
996
490
4,367
866
981
2,521
3,355
5,495

24,069
20,315
8,867
2,904
2,217
687
1,261
7,284
1,530
1,962
3,792
3,754
1,581

11,307
17,692
1,487
84,302
507
31,963
27,063
24,770

10,429
14,472
1,281
79,339
4-80
31,301
25,799
21,760

7,736
11,795
1,029
56,969
452
21,736
19,017
15,764

2,692
2,677
252
22,370
28
9,564
6,782
5,996

878
3,220
206
4,963
26
663
1,264
3,010

61
63
63
64
65
66
67
68

Lease financing receivables ................................................................................................................
Bank premises, furniture and fixtures, and other assets representing bank premises...................
Real estate owned other than bank premises............. .....................................................................
All other assets....................................................................................................................................
Investment in unconsolidated subsidiaries and associated companies .......................................
Customers’ liability on acceptances outstanding...........................................................................
Net due from foreign branches, foreign subsidiaries, Edge and agreement subsidiaries.........
O th e r................................................................................................................................................




Commercial Banks

A75

4.21 Continued
Member banks
Item

Insured
Total

National

State

Non­
member
insured

69 Total liabilities and equity capital7............................................................................................................

1,138,335

974,984

733,060

241,924

163,350

70 Total liabilities excluding subordinated debt............................................................................................

1,058,067

906,748

681,273

225,475

151,319

71 Total deposits.....................................................................................................................................
72 Individuals, partnerships, and corporations..................................................................................
73 U.S. government.............................................................................................................................
74 States and political subdivisions in United States.........................................................................
75 A llother..........................................................................................................................................
76
Foreign governments and official institutions...........................................................................
77
Commercial banks in United S tates..........................................................................................
78
Banks in foreign countries..........................................................................................................
79 Certified and officers’ checks, travelers checks, and letters of credit sold for cash...................
80 Demand deposits................................................................................................. ...............................
81 Mutual savings banks......................................................................................................................
82 Other individuals, partnerships, and corporations.......................................................................
83 U.S. government.............................................................................................................................
84 States and political subdivisions in United States.........................................................................
85 All other..........................................................................................................................................
86
Foreign governments and official institutions...........................................................................
87
Commercial banks in United S tates..........................................................................................
88
Banks in foreign countries...........................................................................................................
89 Certified and officers’ checks, travelers checks, and letters of credit sold for cash...................

838,916
695,429
2,340
51,139
77,112
8,778
57,267
11,067
12,896
328,411
1,146
241,630
1,749
11,453
59,537
2,612
46,960
9,965
12,896

700,638
574,434
1,955
39,181
74,212
8,485
55,183
10,544
10,856
285,123
1,007
204,661
1,490
9,269
57,839
2,490
45,669
9,680
10,856

531,727
447,282
1,481
32,206
43,883
5,531
33,795
4,557
6,876
201,264
542
153,241
1,182
7,615
31,808
1,089
26,702
4,017
6,876

168,910
127,152
474
6,974
30,329
2,955
21,388
5,987
3,981
83,859
465
51,420
309
1,654
26,030
1,401
18,966
5,663
3,981

138,278
120,995
385
11,958
2,900
293
2,084
522
2,040
43,288
138
36,968
258
2,184
1,698
122
1,291
286
2,040

90 Time deposits.......................................................................................................................................
91 Mutual savings banks......................................................................................................................
92 Other individuals, partnerships, and corporations.......................................................................
93 U.S. government.............................................................................................................................
94 States and political subdivisions in United States.........................................................................
95 A llo th e r .......................................................................................................................................
96
Foreign governments and official institutions...........................................................................
97
Commercial banks in United S tates..........................................................................................
98
Banks in foreign countries...........................................................................................................

378,099
660
321,213
531
38,140
17,554
6,151
10,302
1,101

310,595
651
264,473
415
28,702
16,353
5,980
9,509
864

246,394
455
209,944
251
23,688
12,056
4,428
7,088
540

64,201
196
54,529
164
5,014
4,297
1,552
2,421
324

67,504
9
56,740
116
9,438
1,200
171
793
237

99 Savings deposits...................................................................................................................................
100 Mutual savings banks......................................................................................................................
101 Other individuals, partnerships, and corporations.......................................................................
102
Individuals and nonprofit organizations....................................................................................
103
Corporations and other profit organizations............................................................................
104 U.S. government.............................................................................................................................
105 States and political subdivisions in United States.........................................................................
106 AUother..........................................................................................................................................
107
Foreign governments and official institutions...........................................................................
108
Commercial banks in United S tates..........................................................................................
109
Banks in foreign countries...........................................................................................................

132,407
*
130,781
124,053
6,727
60
1,545
21
15
5
*

104,921
*
103,641
98,600
5,041
50
1,210
20
15
5
*

84,070
*
83,100
79,056
4,044
48
903
19
14
5
*

20,851
0
20,541
19,544
997
2
306
2
1
*
*

27,486
0
27,139
25,453
1,686
10
336
1
1
*
*

110 Federal funds purchased and securities sold under agreements to repurchase..............................
I l l Interest-bearing demand notes issued to U.S. Treasury and other liabilities for borrowed
money..........................................................................................................................................
112 Interest-bearing demand notes (note balances) issued to U.S. Treasury...................................
113 Other liabilities for borrowed m oney.......................................................... .................................
114 Mortgage indebtedness and liability for capitalized leases..............................................................

126,750

118,795

88,966

29,829

7,955

25,880
8,633
17,247
1,837

24,520
7,809
16,711
1,520

14,474
5,578
8,8%
1,243

10,045
2,231
7,815
277

1,360
824
536
317

115 All other liabilities.............................................................................................................................
116 Acceptances executed and outstanding..........................................................................................
117 Net aue to foreign branches, foreign subsidiaries, Edge and agreement subsidiaries...............
118 Other................................................................................................................................................

64,684
33,574
3,980
27,130

61,275
32,908
3,734
24,633

44,862
23,288
3,168
18,406

16,413
9,620
566
6,227

3,409
666
246
2,497

119 Subordinated notes and debentures...................................................................................................

5,443

4,329

3,143

1,185

1,114

120 Total equity capital7 ....................................................................................................................................

74,825

63,908

48,643

15,264

10,917

214,012
198,020
15,992
17,396

182,949
168,387
14,562
14,063

140,104
129,248
10,856
10,993

42,845
39,139
3,707
3,069

31,063
29,633
1,430
3,333

100,307
202,170

78,603
162,962

65,643
123,871

12,960
39,091

21,704
39,208

127 Total standby letters of credit............................................................................................................
128 Conveyed to others through participation (included in standby letters of credit)......................
129 Holdings of commercial paper included in total gross loans............................................................

36,017
1,546
895

34,333
1,477
580

22,979
1,031
499

11,353
446
81

1,685
69
315

Average for 30 calendar days (or calendar month) ending with report date
Total assets..........................................................................................................................................
Cash and due from depository institutions........................................................................................
Federal funds sold and securities purchased under agreements to resell.......................................
Total loans..........................................................................................................................................
Total deposits.....................................................................................................................................
Time CDs in denominations of $100,000 or more in domestic offices...........................................
Federal funds purchased and securities sold under agreements to repurchase..............................
Other liabilities for borrowed m oney...............................................................................................

1,101,009
147,165
46,895
601,922
804,421
189,355
133,086
17,138

941,733
133,633
40,212
512,350
670,188
160,495
124,905
16,599

708,201
88,970
30,514
395,012
508,616
122,683
92,668
8,782

233,532
44,663
9,698
117,338
161,572
37,812
32,237
7,817

159,276
13,533
6,683
89,572
134,233
28,860
8,181
539

138 Number of b an k s...............................................................................................................................

1,419

924

766

158

495

Memo:
121 Time deposits of $100,000 or m ore...................................................................................................
122 Certificates of deposit (CDs) in denominations of $100,000 or more.........................................
123 Other................................................................................................................................................
124 Savings deposits authorized for automatic transfer and NOW accounts.........................................
125 Money market time certificates of $10,000 and less than $100,000 with original maturities of 26
weeks............................................................................................................................................
126 Demand deposits adjusted5................................................................................................................

130
131
132
133
134
135
136
137

For notes see page A77.




A76
4 .2 2

Special Tables □ April 1981
D O M E S T I C O F F I C E S , I n s u r e d C o m m e r c ia l B a n k A s s e ts a n d L ia b ilitie s 1/7
C o n s o lid a te d R e p o r t o f C o n d itio n ; D e c . 3 1 , 1980
M illions of dollars
Member banks
Item

Insured
Total

National

State

Nonmember
insured

1 Total assets......................................................................................................................................................

1,526,679

1,136,795

869,571

267,224

389,884

2 Cash and due from depository institutions..........................................................................................
3 Currency and coin (U.S. and foreign)............................................................................................
4 Balances with Federal Reserve B an k s............................................................................................
5 Balances with other central banks...................................................................................................
6 Demand balances with commercial banks in United States..........................................................
7 All other balances with depository institutions in United States and banks in foreign countries
8 Cash items in process of collection.................................................................................................

199,234
19,802
29,993
59
49,120
19,471
80,789

163,74-0
14,700
29,795
59
30,807
11,205
77,174

114,845
11,728
23,892
58
18,886
8,996
51,284

48,895
2,971
5,903
*
11,921
2,209
25,891

35,494
5,103
198
0
18,313
8,266
3,614

9 Total securities, loans, and lease financing receivables............................................................................

1,209,610

872,074

679,918

192,156

337,536

10 Total securities, book v alue................................................................................................................
11 U.S. Treasury...................................................................................................................................
12 Obligations of other U.S. government agencies and corporations................................................
13 Obligations of states and political subdivisions in United States..................................................
14 All other securities............................................................................................................................

322,617
103,491
58,839
145,025
15,263

214,948
66,608
35,252
100,640
12,448

167,808
51,231
28,763
78,461
9,353

47,140
15,377
6,489
22,179
3,095

107,669
36,884
23,586
44,384
2,815

15 Federal funds sold and securities purchased under agreements to resell.........................................

69,905

50,268

39,034

11,234

19,638

16 Total loans, gross.................................................................................................................................
17 Less: Unearned income on loans.......................................................................................................
18
Allowance for possible loan loss.......................... .....................................................................
19 E quals: Loans, net..............................................................................................................................

834,437
19,240
9,774
805,423

616,439
12,525
7,670
596,245

481,110
10,093
5,850
465,167

135,329
2,432
1,819
131,078

217,998
6,715
2,105
209,178

Total loans, gross, by category
20 Real estate loans...................................................................................................................................
21 Construction and land development........................ ...................................................................
22 Secured by farmland.........................................................................................................................
23 Secured by residential properties.............................. ......................................................................
24
1- to 4-family.................................................................................................................................
25
Multifamily.....................................................................................................................................
26 Secured by nonfarm nonresidential properties..............................................................................

261,569
36,493
8,545
152,784
146,305
6,479
63,748

179,773
28,312
3,751
106,112
101,470
4,643
41,599

147,732
22,257
3,164
88,426
84,837
3,589
33,885

32,042
6,055
586
17,686
16,633
1,054
7,714

81,796
8,181
4,794
46,672
44,836
1,836
22,149

27
28
29
30

Loans to financial institutions....................................... ......................................................................
Loans for purchasing or carrying securities........................................................................................
Loans to finance agricultural production and other loans to farmers...............................................
Commercial and industrial loans.........................................................................................................

46,119
12,443
31,544
280,824

42,880
11,350
17,006
224,447

27,210
6,296
14,731
171,257

15,669
5,054
2,275
53,189

3,239
1,093
14,538
56,377

31 Loans to individuals for household, family, and other personal expenditures................................
32 Installment loans........................................................ ......................................................................
33
Passenger automobiles........................................... ......................................................................
34
Credit cards and related plans.....................................................................................................
35
Mobile hom es...............................................................................................................................
36
All other installment loans for household, family, and other personal expenditures...............
37 Single-payment loans........................................................................................................................
38 All other loans.......................................................................................................................................

180,137
146,964
61,502
29,755
10,375
45,332
33,173
21,802

122,745
101,091
38,725
26,192
7,143
29,031
21,6:54
18,239

101,362
83,905
32,195
21,564
6,432
23,714
17,456
12,522

21,383
17,186
6,530
4,628
711
5,317
4,198
5,717

57,392
45,873
22,778
3,563
3,231
16,301
11,519
3,563

11,665
25,364
2,046
90,424

10,614
17,658
1,479
81,844

7,910
14,494
1,189
59,125

2,704
3,164
290
22,719

1,051
7,706
567
8,580

39
40
41
42

Lease financing receivables..................................................................................................................
Bank premises, furniture and fixtures, and other assets representing bank premises....................
Real estate owned other than bank premises....................................................................................
All other assets.....................................................................................................................................




Commercial Banks

A ll

4.22 Continued
Member banks
Insured

Item

Total

National

State

Nonmember
insured

43 Total liabilities and equity capital7 .......................................................................................................

1,526,679

1,136,795

869,571

267,224

389,884

44 Total liabilities excluding subordinated debt.......................................................................... ................

1,143,209

1,054,864

806,280

248,585

358,344

45 Total deposits.......................................................................................................................................
46 Individuals, partnerships, and corporations....................................................................................
47 U.S. government...............................................................................................................................
48 States and political subdivisions in United States............................ ..............................................
49 All other.............................................................................................................................................
50 Certified and officers’ checks, travelers checks, and letters of credit sold for cash.....................

1,182,138
1,003,677
3,236
80,450
78,403
16,372

843,028
702,951
2,316
50,612
74,883
12,267

651,845
555,592
1,794
41,947
44,446
8,066

191,183
147,359
522
8,664
30,437
4,201

339,109
300,725
920
29,838
3,521
4,105

51 Demand deposits...................................................................................................................................
52 Individuals, partnerships, and corporations....................................................................................
53 U.S. government...............................................................................................................................
54 States and political subdivisions in United States...........................................................................
55 A llother............................................................................................................................................
56 Certified and officers’ checks, travelers checks, and letters of credit sold for cash.....................

430,295
332,864
2,438
18,164
60,456
16,372

327,697
243,147
1,771
12,110
58,403
12,267

237,654
185,858
1,423
10,032
32,275
8,066

90,043
57,289
348
2,078
26,128
4,201

102,598
89,718
667
6,054
2,053
4,105

57 Time deposits.....................................................................................................................................
58 Other individuals, partnerships, and corporations.........................................................................
59 U.S. government...............................................................................................................................
60 States and political subdivisions in United States...........................................................................
61 All other............................................................................................................................................

552,082
474,584
721
58,872
17,904

381,246
327,792
488
36,517
16,449

305,918
263,061
317
30,398
12,142

75,328
64,731
171
6,120
4,307

170,836
146,792
233
22,355
1,455

62 Savings deposits.....................................................................................................................................
63 Corporations and other profit organizations..................................................................................
64 Other individuals, partnerships, and corporations.........................................................................
65 U.S. government...............................................................................................................................
66 States and political subdivisions in United States...........................................................................
67 All other.............................................................................................................................................

199,762
9,921
186,308
76
3,414
43

134,086
6,341
125,672
57
1,984
31

108,273
5,141
101,532
54
1,517
29

25,812
1,200
24,140
3
467
2

65,676
3,580
60,636
19
1,429
12

68 Federal funds purchased and securities sold under agreements to repurchase................................
69 Interest-bearing demand notes (note balances) issued to U.S. Treasury and other liabilities for
borrowed money............................................................................................................................
70 Mortgage indebtedness and liability for capitalized leases...............................................................
71 All other liabilities...............................................................................................................................

131,832

121,445

91,210

30,235

10,386

27,399
2,207
69,633

25,371
1,660
63,359

15,220
1,354
46,650

10,151
306
16,710

2,028
547
6,274

72 Subordinated notes and debentures.....................................................................................................

6,213

4,645

3,423

1,222

1,568

73 Total equity capital7 .............................................................................................................................

107,257

77,286

59,868

17,418

29,971

254,075
234,561
19,514
22,039

198,314
182,396
15,919
16,225

153,411
141,362
12,048
12,862

44,904
41,034
3,870
3,363

55,761
52,165
3,596
5,814

178,252
299,191

110,687
202,519

92,593
157,778

18,094
44,740

67,564
96,673

80 Total standby letters of credit..............................................................................................................

37,215

34,779

23,366

11,413

2,436

Average for 30 calendar days (or calendar month) ending with report date
81 Total deposits.......................................................................................................................................

1,142,753

810,628

627,082

183,546

332,126

82 Number of b an k s.................................................................................................................................

14,421

5,422

4,425

997

8,999

Memo
74 Time deposits of $100,000 or m ore.....................................................................................................
75 Certificates of deposit (CDs) in denominations of $100,000 or more...........................................
76 Other..................................................................................................................................................
77 Savings deposits authorized for automatic transfer and now accounts.............................................
78 Money market time certificates of $10,000 and less than $100,000 with original maturities of 26
weeks..............................................................................................................................................
79 Demand deposits adjusted5.................................................................................................................

1. Effective December 31, 1978, the report of condition was substantially revised
for commercial banks. Commercial banks with assets less than $100 million and
with domestic offices only were given the option to complete either the abbreviated
of the standard set of reports. Banks with foreign offices began reporting in greater
detail on a consolidated domestic and foreign basis. These tables reflect the varying
levels of reporting detail.
2. All transactions between domestic and foreign offices of a bank are reported
in “Net due from” and “Net due to” (lines 79 and 103). All other lines represent
transactions with parties other than the domestic and foreign offices of each bank.
Since these intra-office transactions are erased by consolidation, total assets and
liabilities are the sum of all except intra-office: balances.
3. Foreign offices include branches in foreign countries arid in U.S. territories
and possessions, subsidiaries in foreign countries, and all offices of Edge Act and
agreement corporations wherever located.




4. Equity capital is not allocated between the domestic and foreign offices of
banks with foreign offices.
5. Demand deposits adjusted equal demand deposits other than domestic com­
mercial interbank and U.S. government less cash items in process of collection.
6. Domestic offices exclude branches in foreign countries and in U.S. territories
and possessions, subsidiaries in foreign countries, and all offices of Edge Act and
agreement corporations wherever located.
7. This item contains the capital accounts of U.S. banks that have no Edge or
foreign operations and reflects the difference between domestic office assets and
liabilities of U.S. banks with Edge or foreign operations excluding the capital
accounts of their Edge or foreign subsidiaries.
N.A. This item is unavailable for all or some of the banks because of the lesser
detail available from banks without foreign offices, the inapplicability of certain
items to banks that have only domestic offices, and the absence of detail on a fully
consolidated basis for banks with foreign offices.

A78

Special Tables □ A p ril 1981

4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, Sept 30, 19801
Millions of dollars
All states2

New York

Item
Total

Branches

Agencies

Brariches

Agencies

Other states2

Cali­
fornia
TotaP

Illinois
Branches
Branches

Agencies

1 Total assets4 ..........................................................................

131,150

81,725

49,425

71,169

21,943

25,961

6,193

4,343

1,542

2 Cash and due from depository institutions.....................
3 Currency and coin (U.S. and foreign).......................
4
Balances with Federal Reserve B an k s.......................
5 Balances with other central banks..............................
6 Demand balances with commercial banks in United
States...................................................