Full text of Federal Reserve Bulletin : April 1990
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VOLUME 7 6 •
NUMBER 4 •
V
APRIL 1 9 9 0
FEDERAL RESERVE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D . C .
PUBLICATIONS COMMITTEE
Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood
• Donald L. Kohn • J. Virgil Mattingly, Jr. • Michael J. Prell • Edwin M. Truman
The Federal Reserve Bulletin 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. It is assisted by the Economic Editing Section headed by Mendelle T. Berenson, the
Graphic Communications Section under the direction of Peter G. Thomas, and Publications Services supervised by Linda C. Kyles.
Table of Contents
187 INDUSTRIAL PRODUCTION: 1989
DEVELOPMENTS AND HISTORICAL
REVISION
The Federal Reserve Board has completed
the first comprehensive revision since 1985
of its index of industrial production, which
now uses 1987 instead of 1977 as its reference period. This article reviews the recent
performance of the industrial sector in light
of the new data; presents highlights of the
revision; and discusses areas in which the
new estimates have shown changes in industrial production trends over the past
thirteen years.
205 TREASURY AND FEDERAL RESERVE
FOREIGN EXCHANGE
OPERATIONS
In the period from November 1989 through
January 1990, the dollar declined on balance against the mark and other European
currencies, moving down 8V2 percent, 7lA
percent, and 6 percent respectively against
the German mark, Swiss franc, and British
pound. It rose about 1 percent against both
the yen and the Canadian dollar. On a
trade-weighted basis, as measured by the
staff of the Board of Governors, the dollar
declined 53A percent.
209 INDUSTRIAL
PRODUCTION
Industrial production fell 1.2 percent in January after an increase of 0.2 percent (revised) in December.
211 STATEMENTS
TO THE
CONGRESS
Wayne D. Angell, Member, Board of Governors, discusses issues related to the security of electronic funds transfer systems
for large-dollar value transactions, before
the Subcommittee on Telecommunications
and Finance of the House Committee on
Energy and Commerce, February 21, 1990.
215 Alan Greenspan, Chairman, Board of Governors, in conjunction with the Monetary
Policy Report to the Congress, discusses
monetary policy actions and plans in the
context of both the current and projected
state of the economy and longer-term objectives and the strategy for achieving
them; he also addresses some issues raised
by the increasingly international character
of financial markets, before the Senate
Committee on Banking, Housing, and Urban Affairs, February 22, 1990. (Chairman
Greenspan presented similar testimony before the Subcommittee on Domestic Monetary Policy of the House Committee on
Banking, Finance and Urban Affairs, February 20, 1990.)
222 Chairman Greenspan discusses recent proposals to return social security to a payas-you-go basis and to move its finances off
budget and says that he is concerned that
these proposals, if enacted, would hamper
the efforts needed to meet our longer-term
fiscal responsibilities and to provide for the
needs of an aging population in a way that is
equitable across generations, before the
Senate Committee on Finance, February
27, 1990.
226 Chairman Greenspan reviews some of the
main themes of the Monetary Policy Report
to the Congress and some specific budgetary issues, including the proposal to return
the social security system to a pay-as-yougo basis or to move social security off
budget, and says that he hopes that the
Congress will give special attention to the
long-run needs of the economy in its deliberations on the budget, before the House
Committee on the Budget, February 28,
1990.
annual rates of about 8V2 and 51/2 percent
respectively over the four-month period
from November 1989 through March 1990.
In light of the easing of reserve conditions
over the course of recent months and the
further slight easing at this meeting, the
Committee decided to lower the intermeeting range for the federal funds rate by 1
percentage point to 6 to 10 percent.
231 ANNOUNCEMENTS
Proposed regulation to set standards for
appraisals conducted for state member
banks and bank holding companies in federally related transactions; proposed regulation providing interim procedures for notifying the Board of changes in senior
executive officers and directors at bank
holding companies and state member banks
that are newly chartered, undercapitalized,
or in troubled condition.
241 LEGAL DEVELOPMENTS
Various bank holding company, bank service corporation, and bank merger orders;
and pending cases.
Hotline telephone number available for the
Office of the Inspector General at the Board
of Governors.
Changes in Board staff.
Ai FINANCIAL AND BUSINESS STATISTICS
These tables reflect data available as of
February 26, 1990.
Admission of one state bank to membership
in the Federal Reserve System.
233 RECORD OF POLICY ACTIONS OF THE
FEDERAL OPEN MARKET COMMITTEE
At its meeting on December 18-19, 1989,
the Committee adopted a directive that
called for a slight easing of reserve conditions. In keeping with the Committee's
usual approach to policy, the conduct of
open market operations would be subject to
further adjustment during the intermeeting
period depending on progress toward price
stability, the strength of the business expansion, the behavior of the monetary aggregates, and developments in foreign exchange and domestic financial markets. On
the basis of such developments, slightly
greater or slightly lesser reserve restraint
would be acceptable during the period
ahead. The reserve conditions contemplated at this meeting were expected to be
consistent with growth of M2 and M3 at
A3 Domestic Financial Statistics
A46 Domestic Nonfinancial Statistics
A55 International Statistics
All
GUIDE TO TABULAR PRESENTATION,
STATISTICAL RELEASES, AND
SPECIAL TABLES
AH BOARD OF GOVERNORS AND STAFF
A74 FEDERAL OPEN MARKET COMMITTEE
AND STAFF; ADVISORY COUNCILS
A76 FEDERAL RESERVE BOARD
PUBLICATIONS
A78 INDEX TO STATISTICAL TABLES
A80 FEDERAL RESERVE BANKS,
BRANCHES, AND OFFICES
A8i MAP OF FEDERAL RESERVE SYSTEM
Industrial Production: 1989 Developments
and Historical Revision
Kenneth Armitage and Dixon A. Tranum, of the
Board's Industrial Output Section in the Division
of Research and Statistics, prepared this article.
Rona J. McNeil provided research assistance.
The Board of Governors of the Federal Reserve
System has completed a revision of its index of
industrial production. The index has been revised back to 1977, and it now uses 1987 instead
of 1977 as its reference period.
This discussion of the revision falls into two
main parts. The first part reviews the recent
performance of the industrial sector in light of
the new data. The second part presents highlights of the revision and discusses areas in
which the new estimates have shown changes in
industrial production trends over the past thirteen years. Technical aspects of the revision
appear in an appendix.
1.
MAJOR INDUSTRIAL
IN 1989
DEVELOPMENTS
The revision to the industrial production index
has altered only slightly the picture of major
developments in the industrial sector during
1989. The revised index still shows that output
decelerated markedly throughout 1989, after sizable advances in the preceding two years (table
1). Much of the slowdown in 1989 stemmed from
a decrease in domestic purchases of goods made
in the United States, particularly those relating to
the motor vehicle industry. Some of this decline
in demand for domestic goods was offset by
further healthy gains in exports. In response to
the slowing in overall demand, manufacturers
quickly adjusted output to prevent a large
buildup of inventories. This timely reaction
helped prevent a significant contraction in overall
industrial activity.
Annual rates of change in industrial production, by major group, 1987-89'
Percent
1987
1988
6.5
(5.8)
4.5
(5.0)
Major market groups
Products
Materials
6.1
7.1
Major industry groups
Mining
Manufacturing
Utilities
Item
Total industrial production1
1989
1989:H1
1989:H2
1.1
(1.6)
2.7
(2.7)
-.4
(.5)
4.7
4.1
1.8
0
3.8
1.0
-.1
- 1.0
4.9
7.1
2.6
-.9
5.0
3.3
-.6
.9
5.5
-.7
2.9
4.3
-.6
-1.0
6.8
5.3
4.7
7.4
23.2
2.3
1.6
5.0
17.1
.3
-1.0
4.9
11.5
.2
-.2
1.7
15.3
.3
-1.7
8.3
7.8
MEMO
Domestic purchases of goods and structures'
U.S.-produced
Foreign-produced
Nonagricultural merchandise exports
1. Percent change from the final quarter of previous period to the final
quarter of the period indicated.
2. Numbers in parentheses are from the previous, unrevised index.
3. Purchases in the United States of goods and structures wherever produced
(defined as GNP for goods and structures plus merchandise imports less mer-
chandise exports, farm inventories, and Commodity Credit Corporation
inventory change).
SOURCE. "National Income and Product Accounts," Survey of Current
Business, vol. 70 (February 1990), various tables.
188 Federal Reserve Bulletin • April 1990
Nonetheless, the production adjustment resulted in a loss of manufacturing jobs. Factory
employment, which had risen 90,000 in the first
quarter of 1989, fell nearly 200,000 during the
remainder of the year. About one-fourth of the
decline occurred in the motor vehicle industry,
and significant reductions were made in related
industries, such as steel and metal stampings.
Cutbacks in employment also occurred in electrical machinery, particularly in appliances and
communication equipment. Although the adjustment of labor input to output changes was relatively prompt, the implied growth in productivity
for production workers in manufacturing slowed
in 1989 to about 2Vi percent, compared with the
trend of about 4 percent per year that had prevailed since 1981.
Motor
Vehicles
The most significant declines in industrial production last year occurred in motor vehicles
and related industries (table 2). During much of
1989, dealers faced a persistent excess of
stocks. In response, manufacturers of autos and
light trucks adjusted production and offered
more sales incentives during the year. Even so,
by late autumn, inventories were still uncomfortably high in relation to the lackluster pace of
sales. As a result, dealers became reluctant to
place orders, and in late December the major
producers of motor vehicles announced drastic
cuts in output and increased their sales incen2.
tives even further in an attempt to reduce
inventories.
The decline in the manufacture of cars by the
domestic companies more than accounted for the
overall drop in industrial output of autos in 1989.
At the same time, foreign car companies increased their output of autos produced in the
United States about 300,000 units. As a result,
the share of these so-called transplants in total
auto production rose to 15 percent from about 11
percent in 1988.
Over the first half of 1989, the output of light
trucks, most of which consumers purchase, although down somewhat from late 1988, remained
relatively high. During the second half, however,
it was slashed sharply. The output of medium
and heavy trucks, all of which are included in
business equipment, was weak throughout much
of the year.
The proportion of motor vehicles and parts in
total industrial production in 1987 was about 43/4
percent. However, this proportion does not include the value added in production of various
materials and equipment—including steel, rubber
and plastics, machinery, chemicals, and textiles—that are used in assembling motor vehicles. Data from various sources suggest that the
effect on total industrial output of these upstream
industries is nearly equal to the direct effect of
the change in motor vehicles and parts.
Because of the lack of detailed statistics,
monthly industrial production estimates are
available for only some of the parts and materials
Annual rates of change in the industrial production of motor vehicles, parts, and related materials, 1987-89'
Percent
Series
1987
proportion2
1987
1988
1989
1989: HI
1989:H2
Total
6.0
5.2
9.7
-10.1
-6.7
-13.5
Motor vehicles and parts
Autos
Trucks
4.7
1.6
1.1
3.9
-6.3
19.1
9.3
12.6
9.9
-11.1
-14.5
-11.4
-7.6
-12.9
-9.0
-14.4
-16.1
-13.7
Related materials
Tires, original equipment
Steel'
Metal stampings4
.1
.3
1.0
6.3
6.7
9.8
13.7
14.6
9.7
-17.6
-21.5
-1.3
7.3
-14.0
-.8
-36.8
-28.3
-1.8
1. Percent change from the final quarter of the previous period to the final
quarter of the period indicated.
2. Proportion of the total industrial production index derived from valueadded data from the 1987 Census of Manufactures. Details may not sum to
totals because of rounding.
3. Steel mill products for consumer durables. In the 1989 shipments data
published by the American Iron and Steel Institute, about 80 percent of steel
shipments for use in the manufacture of durable consumer goods go to the
motor vehicle industry.
4. According to the value-added data from the 1987 Census of Manufactures, about 50 percent of the output of this industry represents automotive
stampings.
Developments in Industrial Production
used primarily in the manufacture of motor vehicles (table 2). The recent pattern of output in
these industries parallels that for motor vehicles:
After increasing rapidly in 1987 and over much of
1988, output of these parts and materials dropped
sharply in 1989. In most cases, particularly in
steel and tires, the largest reductions occurred
late in the year.
Industrial Production
Vehicle Sector
outside the
Motor
Industrial production excluding motor vehicles
and related parts and materials rose at a relatively robust 3.4 percent annual rate during the
first half of 1989 but leveled off in the second half
(table 3). Some of the stagnation in the nonmotor-vehicle portion of industrial production
reflected the influence of the motor vehicle sector
on upstream industries that cannot be separated
out. For example, the textiles used in making
seats are included in total fabrics.
Among final products, the slowdown over the
year was widespread. During the first half of the
year, particularly strong increases in the production of linens and curtains, cutlery, and toys and
sporting goods boosted the growth in the output
of consumer durables. Output of these goods
grew further in the second half, but production of
3.
189
Other goods for the home, such as appliances,
carpeting, and furniture, which had advanced
during the first half of the year, sagged during the
third quarter. In the fourth quarter, appliance
production fell sharply, and furniture output remained weak.
Growth in the output of nondurable consumer
goods continued throughout 1989. The production of consumer paper products, particularly
periodicals, books, and sanitary paper products,
advanced noticeably over the year. The output of
food continued to rise throughout the year, but
clothing production, which had increased early in
the year, weakened in the second half as imports
picked up. The production of consumer chemical
products—for example, drugs and medicines and
soaps and toiletries—also increased late in the
year after changing little, on balance, since the
fourth quarter of 1988. The production of consumer fuel, mainly automotive gasoline, remained steady until late in the year when extremely cold weather caused temporary
disruptions in production. The cold weather led
to extraordinary demands for heating; and, as a
result, the output of gas and electricity for residential use jumped sharply in December.
During the first half of 1989, the output of
business equipment, led by continued rapid
growth in information-processing and related
Annual rates of change of industrial production, by market group, excluding motor vehicles, parts, and related
materials, 1987-89'
Percent
Series
Total
Products
Final products
Consumer goods
Durable
Nondurable
Business equipment
Information processing and related equipment
Industrial equipment
Transit equipment
Other equipment
Defense and space equipment
Intermediate products
Construction supplies
Materials
Durable
Nondurable
Energy
1987
proportion2
1987
1988
1989
94.0
57.6
42.9
24.5
4.1
20.4
6.6
6.3
5.6
3.1
6.4
2.3
4.1
4.4
4.8
3.9
4.4
3.9
1.9
2.7
2.9
2.7
2.1
2.8
3.4
4.7
5.4
2.9
5.1
2.4
.5
.7
.4
2.5
-.8
3.2
12.6
5.6
4.0
1.1
1.9
5.4
11.0
14.0
5.6
6.7
11.4
1.8
11.0
10.2
8.2
33.7
6.3
-3.1
4.1
6.3
1.8
1.9
4.1
-.2
11.0
13.5
6.0
19.6
6.7
1.8
-2.3
-.5
-2.3
-13.2
1.6
-2.2
14.7
6.0
8.4
6.7
2.9
2.6
2.0
1.2
2.6
1.9
1.5
.5
36.4
16.6
9.0
10.9
7.0
10.9
6.2
2.5
3.8
6.7
2.0
.3
.6
.3
1.1
.8
1.2
1.1
2.9
.2
0
-.5
-.7
1.5
1. Percent change from the final quarter of the previous period to the final
quarter of the period indicated.
2. Proportion of the total industrial production index derived from value-
1989: HI
1989:H2
added data from the 1987 Census of Manufactures. Details may not sum to
totals because of rounding.
190 Federal Reserve Bulletin • April 1990
equipment, particularly computers, was a significant source of strength to industrial production. 1
In the second half, the output of computers
leveled out, and near the end of the year, new
bookings for computers weakened. The output of
the other types of information-processing and
related equipment, including communications
equipment and instruments, declined over the
summer and then remained sluggish through the
end of 1989.
The output of the other major sectors within
business equipment also rose sharply during the
first half of 1989, but then declined, in most
cases, during the second half. For example,
production of industrial equipment, which includes machinery used in manufacturing, in mining, and in the generation and distribution of
electricity, grew rapidly earlier in the year; but
by summer, new orders for most of these goods
had weakened. Producers reacted quickly and
curtailed output over the remainder of the year.
The rapid increase in the output of transit
equipment other than motor vehicles during the
first half of last year reflected mainly another
surge in the production of commercial aircraft as
order books remained full. However, a strike at
the Boeing Company during October and November depressed commercial aircraft output in
the fourth quarter; but production was back to
normal in December, and capacity utilization
returned to a very high level.
The output of farm equipment, which is included in the category "other equipment,"
weakened during most of 1989 partially because
of a curtailment in exports coupled with a large
rise in imports. Toward the end of the year,
exports rebounded somewhat, and production
increased. Output of the remaining components
of the "other equipment" category—office furniture and service equipment—increased early in
the year and then weakened.
After increasing during most of the 1980s,
output of defense and space equipment declined
in 1988 and then remained essentially unchanged
in 1989. The weakness in the past two years has
1. Within the category of business equipment, new aggregates have been created (see table A.2 for their definition). Of
the old groups, only transit equipment has been retained.
resulted from the reduction in defense appropriations for hardware that began in 1986.
The revised data for construction supplies indicate that a deceleration in output growth began
in mid-1988, somewhat earlier than previously
estimated. During 1989, the growth of production
slowed to a 1 VA percent rate. This anemic pace is
generally consistent with the softness observed
throughout the year in outlays for both nonresidential and residential structures.
The growth in the production of materials was
similar to that of total products during 1987 and
1988. During 1989, while the output of total
products slowed, the rate of growth in the production of materials decreased more sharply, the
deceleration occurring mainly in durables production. For example, the production of parts
used in the manufacture of equipment and the
output of basic metals slowed during the first six
months of 1989 and then flattened in the latter
half of the year.
Among nondurable materials industries, the
output of textiles, mainly those used in making
clothing, surged during the first half of 1989, after
a sharp drop in 1988. Much of the rebound
stemmed from increased orders from domestic
apparel producers. However, the production of
textiles declined in the second half of 1989, when
most major users curtailed output.
The production of chemical materials remained at a high level during 1989 after several
years of rapid growth. Unlike the output of most
products and materials, which in 1989 generally
followed the path of demand, the output of
chemical materials was limited to some extent by
the high level of capacity utilization in this industry. Some expansion in capacity over 1989 lessened production constraints a bit; as a result,
price pressures eased during the year. The situation was similar for paper materials: Output was
well maintained, on balance, over 1989; and
utilization rates, although a little lower than
those in late 1988, remained quite high.
Despite a weather-related surge in electricity
generation and gas transmission late in the year,
the output of energy materials remained sluggish
over 1989 as crude oil production continued to
decline. The oil spill in Alaska, which led to a
temporary curtailment of oil flow through the
Alaskan pipeline, aggravated the downward
Developments in Industrial Production
1. Change in output of industries with
above-average trade shares and of other
manufacturing industries1
Percent
Index, March 1973^100
Exchange value of the dollar against
»G-10 currencies
Industries with above-average
trade shares
•Other manufacturing
industries
1983
1984
1987
1986
1985
1988
1989
1. Percent changes are from the fourth quarter of the previous year
to the fourth quarter of the year indicated. Data are seasonally
adjusted. The bar scale is on the left; the curve scale is on the right.
trend in oil extraction. Despite a strike in the
spring, the output at coal mines was little
changed, on balance, over 1989.
Foreign Trade and U.S.
Performance
Industrial
Changes in foreign trade have heavily influenced
recent developments in industrial production.
Although in 1989 real net exports of the United
States rose, they did so less rapidly than during
the previous two years; the deceleration occurred during the second half of the year, when
the growth of merchandise imports picked up
while the growth in merchandise exports slowed.
2. Revised and earlier industrial production indexes1
Ratio scale, 1987 = 100
.^110
f
f
100
Revised
Earlier
1 1
1977
1
I
1
1
1
i
1981
1. Monthly data, seasonally adjusted.
1
1985
These developments related partly to an increase
in the foreign exchange value of the dollar during
much of 1988 and 1989: The change in the foreign
exchange value of the dollar adversely influenced
the competitiveness of U.S. goods in markets
abroad as well as their ability to compete with
imports in the domestic market.
As a result of these developments, growth in
those domestic industries with above-average
volumes of trade relative to factory shipments
slowed more sharply in 1989 than did that in
other industries (chart l). 2 Important among the
group of industries with above-average trade
shares are producers of capital goods—such as
computers and most other nonelectrical machinery, electronic components, and aircraft. Exports of these goods, in real terms, continued to
expand rapidly in 1989, but imports accelerated.
Other industries that typically are heavily influenced by changes in the overall terms of trade
include materials, particularly chemicals, paper,
textiles, and metals. Real net exports of nonagricultural industrial supplies rose about $12 billion in 1988 and 1989. However, all of the 1989
gain occurred during the first half of the year; real
net exports of industrial materials, reflecting the
weakness in demand for materials, actually fell
nearly $4 billion in the second half.
HIGHLIGHTS OF THE 1990
REVISION
The revised index of industrial production shows
slower growth from 1977 to 1989, on average,
than previously reported (chart 2). The revision
also 'Indicates that the recession in 1982 was
somewhat less severe than originally estimated.
These results stem from the incorporation into
the index of available benchmark, annual, and
monthly source data from 1977 to the present,
including a revision of the Federal Reserve's
index of industrial electricity use. The revision
90
80
1
191
I
1
1 1
1989
2. Trade shares were calculated (using data from 1985 on)
by summing exports and imports and dividing by shipments.
In general, data were gathered at the three-digit Standard
Industrial Classification (SIC) level. Manufacturing industries
were then divided into two groups—those with trade shares
greater than the total manufacturing average and those with
less. In terms of 1987 value added, the former group accounted for a little more than half of manufacturing.
192 Federal Reserve Bulletin • April 1990
also introduces new weights to aggregate the
individual series into industry and market groups
and has set 1987 as the comparison-base year,
when all index numbers are equal to 100. These
changes are outlined in the box "Summary of
statistical revisions" and documented in greater
detail in the appendix.
The primary purpose of the 1990 revision was
to include the latest available benchmark and
annual information on the levels of the 250 basic
series that now make up the index. When appropriate and where possible, the levels of the basic
series in the industrial production index are determined by direct physical measures of output—
for example, tons of primary aluminum ingot or
barrels of motor gasoline. In many cases, however, comprehensive physical-product data are
not available. In these cases, changes in output
from one census year to the next for the basic
series are derived from the indexes of production
developed by the Census Bureau from the cen-
suses of manufactures and minerals industries,
which have been published every five years since
1939. The Census Bureau indexes—called benchmarks—capture the change in physical output of
each represented industry by an indirect method—converting information on the value of shipments and inventory change into constant dollars. This revision to the Federal Reserve's
industrial production indexes incorporates the
Census Bureau's 1982 indexes of production.
For its 1982 benchmark indexes of office and
computing machines, the Census Bureau adopted
the price deflator that the Commerce Department's Bureau of Economic Analysis (BEA) and
the IBM Corporation developed jointly. This deflator, in turn, has been incorporated into the
index of industrial production, and the result has
been a significant upward revision of the growth
rate in the nonelectrical machinery industry (chart
3). With the introduction of this deflator in the
industrial production index, most major statistical
Summary of statistical revisions, 1977-89
1990 revision
Item
Benchmark information
Mining
Latest monthly physical data from
Department of Energy
Annual physical data from Bureau of
Mines through 1986
Previous index
Same
Annual physical data from Bureau of
Mines through 1982
Manufacturing
1982 Census indexes of production
Annual Survey of Manufactures for
1978-81 and 1983-86
Information from 1987 Census of
Manufactures
1977 Census indexes of production
Annual Survey of Manufactures for
1978-81
Utilities
Latest monthly physical data from
Department of Energy
Latest monthly physical data from
Department of Energy and
American Gas Association
Weighting
1977-81: 1977 weights
1982-86: 1982 weights
1987- : 1987 weights
1977-
Base year
1987
1977
Series and structure modifications
Textiles
New series for cotton and synthetic
fabrics, yarns, and fabric finishing
Gas utilities
All series based on data from
Department of Energy
Changes in market groups
New aggregates compiled for
business equipment
: 1977 weights
Some series based on data from
American Gas Association and rest
from Department of Energy
Developments in Industrial Production
3. Revised and earlier industrial production indexes
of nonelectrical machinery1
Ratio scale, 1987 = 100
100
jf
Earlier
.
80
60
^Revised
r
i
1977
i1
1
1
1
t
i
l
1981
l
1985
1
1
1
I
1989
1. Monthly data, seasonally adjusted.
series produced by U.S. government agencies
measuring output now treat computers consistently. BE A initially introduced the deflator for
computers, which incorporates both matchedmodel and hedonic components, in the National
Income and Product Accounts in 1985.3 It accepted this new price measure on the basis of
research conducted by several economists that
indicated that conventional methods of calculating
price indexes may not completely capture
changes in quality in a rapidly evolving industry
like computers. 4
An important feature of the 1990 revision of
the industrial production index is the introduction of two new weight periods. Updated Census
value-added weights have been used for 1982-86
and for 1987-90. Previously, the index used
1977 Census value-added weights for the entire
period.
In the index, series that measure the output of
an individual industry are weighted according to
their proportion in the total value-added output
of all industries. If prices and costs changed
uniformly across industries, different weight
years in different periods would not be needed;
but such factors do change. To represent as
accurately as possible the relative price and cost
structure of industries, the industrial production
index, which extends back to 1919, is built for the
most part in five-year chronological segments
that are chainlinked to form a continuous index
expressed as a percentage of output in a comparison-base year. Thus, the introduction of two
new weight periods in the 1990 revision reflects
more accurately the evolution of relative prices
from 1977 to the present.
Table 4 shows the value-added proportions
used in the index for the period since 1963. The
ten-point dip in 1982 in the proportion of manufacturing, accompanied by a similar rise in mining and utilities, partly reflects the elevated crude
oil prices of the late 1970s and early 1980s. The
relative proportions of mining and manufacturing
shown for 1987 are closer to those of 1977, the
previous reference year, and reflect in part a
decline in the output of oil and gas extraction in
1982-87 and a softening of crude oil prices.
Few modifications were made to the structure
of the index and its monthly compilation as reported in Industrial Production—1986 Edition.
Modifications that have been made to series in the
index include a newly developed structure for the
monthly measurement of textile mill products and
the use of new annual and monthly data to measure output at gas utilities. Also, as mentioned
previously, new aggregates within the category of
business equipment have been created.
Results
3. See, for example, Allan H. Young, "BEA's Measurement of Computer Output," Survey of Current Business, vol.
69 (July 1989), pp. 108-15; and David W. Cartwright, "Improved Deflation of Purchases of Computers," Survey of
Current Business, vol. 66 (March 1986), pp. 7-10.
4. Rosanne Cole and others, "Quality-Adjusted Price Indexes for Computer Processors and Selected Peripheral
Equipment," Survey of Current Business, vol. 66 (January
1986), pp. 41-50; and Ellen R. Dulberger, "The Application
of a Hedonic Model to a Quality-Adjusted Price Index for
Computer Processors," in Dale W. Jorgenson and Ralph
Landau, Technology and Capital Formation (MIT Press,
1989).
193
of the
Revision
The average annual rate of growth for the total
index is now 2.7 percent over 1977-89, or about
0.2 percentage point less than previously reported
(table 5). Excluding office and computing machinery, the downward revision in the average annual
growth rate of the index is 0.7 percentage point.
Market Groups. The revision led to little change
in the estimate of the overall growth of total
194 Federal Reserve Bulletin • April 1990
4.
Proportions of value added in industrial production, by major market group and major industry group,
selected years, 1963-87'
Percent
1963
1967
1972
1977
1982
1987
100.00
100.00
100.00
100.00
100.00
100.00
Major market group
Products, total
Final products
Consumer goods
Durable
Nondurable
Total equipment2
Business
Defense and space
Intermediate products
Construction supplies
Business supplies
Materials
Durable
Nondurable
Energy
61.48
47.88
29.88
8.05
21.83
18.00
10.61
7.39
13.60
6.35
7.25
38.52
20.68
14.51
3.33
61.30
47.82
27.65
7.89
19.79
20.23
13.27
6.96
13.42
6.51
6.91
38.70
20.29
10.10
8.31
61.91
47.67
27.90
7.97
19.94
19.77
14.08
4.80
14.24
6.80
7.44
38.09
19.81
9.80
8.48
57.72
44.77
25.52
6.89
18.63
19.25
14.34
3.67
12.94
5.96
6.99
42.28
20.50
10.10
11.69
56.05
44.10
23.71
4.80
18.91
20.39
13.75
4.21
11.95
4.51
7.43
43.95
16.99
7.76
19.20
60.79
46.05
26.02
5.58
20.44
20.02
13.93
5.35
14.74
6.05
8.69
39.21
19.35
9.01
10.85
Major industry group
Mining
Metals
Coal
Oil and gas extraction
Stone and earth minerals
Manufacturing
Durables
Lumber and products
Furniture and fixtures
Clay, glass, and stone products
Primary metals
Fabricated metal products
Nonelectrical machinery
Office and computing machines
Electrical machinery
Transportation equipment
Instruments
Miscellaneous manufactures
Nondurables
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastics products
Leather and products
Utilities
Electric
Gas
7.09
.63
.77
4.91
.78
87.27
50.09
1.79
1.37
3.14
6.80
5.66
7.72
.73
7.58
9.74
1.78
1.59
37.18
9.73
.75
2.73
3.50
3.30
4.67
7.84
1.66
2.07
.93
5.64
4.32
1.31
6.36
.51
.69
4.40
.75
87.95
51.98
1.64
1.37
2.74
6.57
5.93
9.15
1.10
8.05
9.27
2.11
1.51
35.97
8.75
.67
2.68
3.31
3.21
4.72
7.74
1.79
2.24
.86
5.69
3.88
1.81
6.59
.58
;91
4.44
.66
87.33
51.08
2.50
1.48
3.05
5.63
6.51
9.09
1.19
7.40
9.63
2.56
1.64
36.26
8.62
.64
2.84
3.27
3.16
4.89
7.85
1.47
2.82
.71
6.08
4.13
1.96
9.83
.50
1.60
7.07
.66
84.22
49.10
2.30
1.27
2.72
5.33
6.46
9.54
1.41
7.15
9.13
2.66
1.46
35.11
7.96
.62
2.29
2.79
3.15
4.54
8.05
2.40
2.80
.53
5.96
4.18
1.78
16.92
.29
1.68
14.39
.57
74.71
42.36
1.41
1.16
2.12
2.73
5.30
9.20
2.10
7.61
7.57
3.03
1.27
32.36
7.96
.81
1.67
2.35
3.00
4.90
6.81
1.99
2.45
.43
8.36
6.26
2.10
7.93
.32
1.22
5.73
.67
84.44
47.27
2.00
1.45
2.47
3.32
5.38
8.55
2.46
8.62
9.80
3.26
1.24
37.17
8.76
1.02
1.84
2.36
3.58
6.37
8.60
1.32
3.02
.30
7.63
6.01
1.62
Series
Total
1. Details may not sum to totals because of rounding and the omission of
some series.
2. Beginning in 1972, oil and gas well drilling is included in total equipment,
but not in business equipment. Also, in 1972, prefabricated buildings were
moved from intermediate products to total equipment.
products: A slight upward revision in final products was about offset by a downward revision of
about 0.8 percentage point per year in the less
heavily weighted intermediate products group.
The annual growth rate of materials production,
which accounts for about 40 percent of the index,
was revised down about 0.3 percentage point per
year over the entire period of the revision. As a
result, the disparity in rates of growth between
total products and materials that began in the
early 1980s is more pronounced than before the
revision. Although the production of materials is
more cyclical than that of products, from 1954 to
1980 their overall growth rates were similar. During the 1980s, however, domestic producers of
raw materials faced stiffer competition from foreign producers. Moreover, the use of imported
parts that are classified as materials—such as
semiconductors, auto engines, and specialty
steel—increased in the domestic assembly of final
products, leading to a slower growth rate of domestically produced materials relative to products
throughout the decade.
Within the category of final products, the average
Developments in Industrial Production
5.
195
Rates of growth in industrial production, by major market group, 1977-89
Average annual rate of growth,
revised index
(percent)
Series
Growth rate calculated with revised index
minus growth rate calculated
with earlier index
1977-82
1982-87
1987-89
1977-89
1977-82
1982-87
1987-89
1977-89
Total index
Products, total
Final products
Consumer goods
Durable
Nondurable
Total equipment
Business
Defense and space
Intermediate products
Construction supplies
Business supplies
Materials
Durable
Nondurable
Energy
.9
1.9
2.4
-.1
-4.3
1.2
5.5
5.2
6.0
.1
-2.7
2.2
-.5
-.5
- 1.1
-.1
4.1
4.7
4.4
3.4
7.8
2.2
5.4
6.5
8.8
5.9
6.7
5.4
3.3
6.4
4.0
-.1
4.0
4.2
4.5
3.3
3.9
3.1
6.0
9.1
-1.3
3.4
2.9
3.7
3.6
5.7
2.6
.7
2.7
3.4
3.6
1.9
2.0
1.9
5.5
6.4
5.9
3.0
2.1
3.7
1.7
3.3
1.6
0
.3
.4
.6
-.4
-.6
-.4
1.8
2.6
.1
-.3
-.2
-.3
.2
.7
-.4
-.3
-.6
-.4
-.2
-1.3
.1
-1.6
1.0
1.6
1.5
-1.2
-1.6
-.9
-.8
.6
- 1.4
.1
-.5
-.6
-.3
-1.2
.1
-1.6
.9
1.4
1.2
-1.4
-.8
-1.9
-.5
.1
-1.8
.3
-.2
-.1
.1
-.9
-.2
-1.1
1.3
2.0
.8
-.8
-.8
-.8
-.3
.5
-1.0
0
Excluding computers
Total index
Products, total
Final products
Business equipment
Materials
0
.6
.8
0
-1.0
3.2
3.5
2.8
1.7
2.8
3.6
3.7
3.9
7.8
3.4
1.9
2.3
2.1
2.0
1.3
-.2
-.2
-.2
.3
-.1
-1.3
-1.3
-1.3
-2.0
-1.2
-.6
-.6
-.3
1.2
-.5
-.7
-.7
-.7
-.5
-.6
annual growth rate of consumer goods was revised
down about 0.9 percentage point for the 1977-89
period, whereas that of equipment was revised up
about 1.3 percentage points. The output of both
durable and nondurable consumer goods is estimated to be lower, but the downward revision to
nondurable goods is particularly significant. The
estimates of the production of consumer foods,
chemical products, and paper products were all
revised downward substantially because of the incorporation of annual data.
The revised annual growth rate of business
equipment is quite a bit stronger than shown
previously because of the sharply faster growth of
office and computing machines. Excluding this
series, business equipment was revised down and
shows much slower growth for 1982-87. Output of
defense and space equipment was revised up, on
average. Even so, estimated production for 198789 declined.
The downward revision to the intermediate
products category was widespread among component series for construction and business supplies. The bulk of the revision occurred in the
1982-84 recovery period; for that period, the
annual rate of growth of the new index is estimated at about 8 percent, about 4 percentage
points less per year than that of the old index.
In the materials sector, the growth of output of
durable goods materials revised up about 0.5
percentage point, on net, with a substantial upward revision of 2 percentage points in equipment parts largely offset by a downward adjustment of nearly 1 percentage point in the growth
rate of consumer durable parts. The market
group of equipment parts includes several hightechnology components, such as computer and
aircraft parts; the consumer durable parts aggregate includes several series related to motor
vehicles, such as metal stampings and original
equipment motor vehicle parts.
Among nondurables, output in three series—
textiles, paper, and chemicals—is now estimated
to have risen much more slowly than estimated
previously. In particular, the heavily weighted
series for industrial organic chemicals revised
down significantly. Comprehensive constantdollar data for many other chemical materials
series also showed lower levels of output than
previously reported. The revision made little
change to the production of energy materials.
Industry Groups. As table 6 shows, the revision
for 1977-89 did not change the estimate for the
average annual growth of manufacturing. Growth
in the manufacturing of durable goods was up
196 Federal Reserve Bulletin • April 1990
6.
Rates of growth in industrial production, by major industry group, 1977-89
Series
Average annual rate of growth,
revised index
(percent)
1977-82
1982-87
1987-89
Mining
Metals
Coal
Oil and gas extraction
Stone and earth minerals
1.5
-3.1
3.7
1.8
-4.6
-1.8
2.8
1.8
-2.6
4.8
.3
18.5
2.8
-2.2
6.7
Manufacturing
Durables
Lumber and products
Furniture and fixtures
Clay, glass, and stone products
Primary metals
Fabricated metal products
.9
1.1
-3.9
-.1
-2.9
-7.3
-2.1
5.5
6.6
8.2
6.2
4.4
3.7
3.7
Nonelectrical machinery
Excluding computing and office machinery...
Office and computing machines
7.2
-2.6
35.0
Electrical machinery
Transportation equipment
Instruments
Miscellaneous manufactures
Nondurables
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastics products
Leather and products
Utilities
1977-82
1982-87
1987-89
1977-89
-.1
2.7
2.8
-.7
1.1
-.3
3.4
0
-.3
-3.6
-.1
1.1
-.1
.9
-1.4
-.7
4.2
.2
-.8
-1.2
-.3
2.6
0
.1
-2.3
4.4
5.3
1.4
2.6
3.9
4.5
3.6
3.4
4.1
1.9
3.0
1.2
-.9
1.2
.5
1.1
-.2
-1.0
-.7
.7
.7
-.2
.7
-1.3
-1.7
-1.5
-.6
-1.3
-.5
.4
-1.0
-2.2
1.7
.1
-2.4
0
.8
-.8
-1.5
-.6
.1
-.6
9.4
-.1
28.4
10.3
7.5
17.0
8.6
.1
29.1
4.3
.3
11.8
3.7
-3.4
18.9
.1
-2.2
6.3
3.4
-1.6
13.9
5.4
-2.6
4.9
-1.6
5.7
9.1
4.1
1.8
4.6
3.5
7.9
7.3
5.4
3.2
5.1
1.3
.2
.1
.3
.5
-.4
1.0
1.3
-.9
1.9
2.3
1.5
.3
.3
.8
.9
-.1
.6
2.1
.7
-1.9
-.3
3.9
2.7
-.3
3.8
2.1
3.1
2.6
-.5
1.0
2.1
2.4
2.4
.1
.9
1.1
-.5
-.7
-.3
.3
2.3
-1.4
- 1.0
0
-1.6
-2.1
-1.8
-1.1
.4
-1.7
.6
-1.1
-.9
-.1
-.8
.2
1.0
3.2
-.4
-3.1
.4
-4.0
4.1
5.9
4.1
2.3
8.7
-7.2
1.6
4.3
4.2
3.0
4.3
1.6
2.4
4.5
2.2
.1
4.4
-4.4
-.8
-.6
-1.1
.2
-1.6
0
-1.6
-1.6
-2.1
.2
.5
-1.2
-1.1
-3.8
-2.7
1.0
-1.0
1.4
-1.2
-1.5
-1.8
.3
-.7
-.3
.4
1.7
3.4
1.4
-.5
.7
.9
.2
somewhat less than 1 percentage point, and that
of nondurable goods was down about 1 percentage point. Output in mining and utilities changed
little. Much of the downward revision within
manufacturing occurred in foods, textiles, lumber,
furniture and fixtures, paper, printing and publishing, chemicals, and nonelectrical machinery other
than office and computing machinery. For these
industries, annual rates of growth between 1977
and 1989 were revised down from 3A of a percentage point to l3/4 percentage points. The growth
rates of three individual series within the machinery group—construction and mining machinery,
metalworking machinery, and general industrial
machinery—revised down between 2Vi and 3!/2
percentage points by 1989. Offsetting these downward revisions were a striking upward revision in
office and computing machinery and noticeable
upward adjustments to output growth in transportation equipment and instruments.
Growth rate calculated with revised index
minus growth rate calculated
with earlier index
1977-89
Implied Production-Worker
and
Kilowatt-Hour
Productivity
The revision caused little change in overall measures of production-worker productivity (that is,
output per hour worked) in the industrial sector
and in manufacturing for 1977-89 (table 7). Over
the period, the annual rate of productivity growth
for total industrial production remained about
3 percent, and that for manufacturing remained
about 3Vz percent. This apparent stability in the
aggregate masks two offsetting underlying developments—a large upward revision to the
measure of output per hour in the computer
industry and smaller downward revisions in a
variety of other industries. Consequently, output per hour for the total industrial sector
excluding office and computing machinery was
revised down nearly half a percentage point.
Output per kilowatt hour trended downward
Developments in Industrial Production
7.
197
Average annual rate of growth in output per production-worker hour and in output per kilowatt hour, 1977-89
Percent
Item
Output per
production-worker hour
Output per
kilowatt hour
Unrevised
Revised
Unrevised
Revised
Total index
Manufacturing
Foods
Tobacco products
Textile mill products
Apparel products
Lumber and products
Furniture and fixtures
Paper and products
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastics products
Leather and products
Clay, glass, and stone products
Primary metals
Fabricated metal products
Nonelectrical machinery
Electrical machinery
Transportation equipment
Instruments
Miscellaneous manufactures
3.0
3.4
3.1
2.1
3.7
2.0
2.5
3.8
3.4
3.0
3.0
1.3
2.5
1.1
2.1
3.9
2.9
5.9
4.4
2.9
3.1
2.7
2.9
3.5
2.2
2.1
3.4
2.1
1.5
2.3
2.3
1.5
1.2
1.6
1.8
.7
1.5
3.8
2.3
9.6
4.6
4.0
3.7
2.6
2.1
2.5
.9
0
.9
- 1.5
-.5
1.1
1.3
1.0
4.5
- 1.5
1.4
-4.1
1.1
-.2
-.6
3.0
2.2
.8
-.6
.7
1.8
2.5
0
-.1
.1
-1.3
-1.2
-.3
.2
-.5
2.7
-1.2
.8
-4.4
.5
-.1
-1.2
6.2
2.4
1.5
.3
.6
Excluding computers
Total index
Manufacturing
Nonelectrical machinery
2.6
3.0
2.7
2.1
2.5
1.1
iBftpBiS?
1.7
2.1
.5
1.1
1.6
- 1.0
during the 1960s; but, spurred by higher oil prices,
it began an upward trend in the 1970s.5 As table 7
shows, the upward trend has continued through
the 1980s, as kilowatt-hour productivity in the
total industrial sector increased at an average
annual rate of nearly 2 percent from 1977 to 1989.
Gains in four large industries—chemicals, nonelectrical machinery, electrical machinery, and
transportation equipment—accounted for much of
the advance in the total. Elsewhere, kilowatt-hour
productivity grew little or declined.
vented an excessive buildup of factory inventories.
The revision indicates that the rate of growth of
total industrial production over 1977-89 was
slower than it appeared in the previous index.
However, the revised index shows the growth
rate for 1977-82 to be stronger and the 1982
recession to be milder than previously estimated.
For 1982 to date, the annual average growth rate
has been revised down more than 0.5 percentage
point, and the index now shows growth of output
in the industrial sector at a rate of about 4 percent
per year.
SUMMARY
Industrial output weakened over the course of
1989, particularly during the second half. While
the most pronounced declines occurred in motor
vehicles and related industries, the output of other
industries slowed significantly as both domestic
and foreign demand softened. The response by
producers to the overall slowing in demand in
1989 was relatively rapid and, on balance, pre5. Board of Governors of the Federal Reserve System,
Industrial Production—1986 Edition (Board of Governors,
1986), p.39.
APPENDIX
As the text indicates, the most important aspect of
the 1990 revision is the benchmarking of many of
the indexes of industrial production to the valueadded-weighted production indexes from the 1982
Indexes of Production developed by the Census
Bureau. "Benchmarking" is the process of adjusting the 250 components of the monthly industrial production index to annual levels derived
A.l.
Industry structure and composition of industrial production: classification, value-added weights, and description of selected series
Value added3
Classification2
1977
Group and series'
SIC code
Textile mill products
Fabrics
Cotton and synthetic fabrics
Wool fabrics*
Narrow fabrics*
Knit goods
Hosiery
Knit garments
Market
1987
1982
Millions
of
dollars
Proportion
of total
industrial
production
Millions
of
dollars
Proportion
of total
industrial
production
Millions
of
dollars
Proportion
of total
industrial
production
Type
of
series*
22
221-4
221,2
Mnt
16,105
5,399
4,735
2.29
.77
.68
18,549
5,940
5,126
1.67
.53
.46
25,705
7,371
6,254
1.84
.53
.45
Prod.
223
Mnt
313
.04
349
.03
507
.03
Kwh
Pwh
224
225
2251,2
2253,4,
1Q
351
.05
465
.04
610
.04
Cc
3,863
859
.55
.12
4,985
1,395
.45
.13
6,103
1,729
.44
.12
Prod.
Cc
3,004
.43
3,590
.32
4,374
.31
Kwh
1,590
.14
2,308
.16
Prod.
Mnt
Fabric finishing
226
Mnt
1,417
.20
Carpeting
Woven carpets*
Tufted carpeting*
227
2271,9
2272
Ch
Ch
1,530
92
1,438
.22
.01
.20
1,712
127
1,585
.15
.01
.14
3,181
248
2,933
.23
.02
.21
Prod.
Prod.
Yarns and miscellaneous textiles . . . .
Yarns and thread*
228,9
228
3,896
2,255
.55
.32
4,322
2,318
.39
.21
6,742
3,822
.48
.27
Prod.
Kwh
Miscellaneous textiles*
Gas utilities*
Gas transmission*
Sales, gas*
Residential gas*
Nonresidential gas*
Industrial gas*
Commercial and other gas*
229
Mnt
492,493pt
Me
Cs
Me
lb
1,641
.23
2,004
.18
2,920
.21
12,548
1.78
17,839
2.10
15,820
1.62
4,465
.63
9,756
.88
7,737
.55
8,083
3,296
4,787
3,251
1,536
1.15
.47
.68
.46
.22
13,600
5,100
8,500
5,848
2,652
1.22
.46
.77
.53
.24
14,898
7,732
7,166
3,635
3,531
1.07
.55
.51
.26
.25
1. Series with asterisks are included in published totals but are not shown separately in the monthly
report.
2. SIC numbers are from the Standard Industrial Classification Manual, 1977 edition, published
by the U.S. Office of Management and Budget. The abbreviation "pt" means part. Market classifica-
Units, composition, source for series,
and beginning date
1947
1954
Index, production of broadwoven goods, American
Textile Manufactures Institute (ATMI); shipments,
pounds, filament fibers from Fiber Economics
Bureau. 1954; two series before 1982
Linear yards, wool apparel fabrics (gray),
Census Bureau, 1954-76. 1954
1972
1954
Pairs, weighted combination of total hosiery and
pantyhose, National Association of Hosiery
Manufactures. 1954
Production-worker hours for 1954-62. 1954
Index, production of broadwoven goods by
weaving mills, ATMI; linear yards, finished
cotton, finished synthetic, and silk fabrics,
Census Bureau for 1954-81. 1954
1954
Square yards, Carpet and Rug Institute, 1954
Square yards, Carpet and Rug Institute; Productionworker hours for 1954-62; kilowatt hours for
1963-66. 1954; two series before 1977
1954
Tons, consumption of cotton and synthetic fibers,
Census Bureau, 1954
Production-worker hours for 1954-62. 1954
Department of Energy (DOE). 1947
Prod.
Cubic feet, sales by major pipeline companies of
gas for transmission adjusted to annual data for
marketed gas production. 1967
Prod.
Cubic feet, sales, DOE. 1954
Prod.
Prod.
Cubic feet, sales, DOE. 1954
Cubic feet, sales, DOE. 1954
tion codes are as follows: Mnt—textile, paper, and chemical materials; Cc—clothing; Ch—home goods;
Me—energy materials; Cs-consumer staples; and lb—business supplies.
3. Details may not sum to totals because of rounding.
4. Prod.-physical product data; Kwh-kilowatt-hour data; Pwh-production-worker-hour data.
Developments in Industrial Production
A.2.
199
Market structure of business equipment: classification and weights
Value added3
Classification2
1977
Group and series'
SIC code
Business equipment
1982
1987
Market
Millions
of
dollars
Proportion
of total
industrial
production
Millions
of
dollars
Proportion
of total
industrial
production
Millions
of
dollars
Proportion
of total
industrial
production
Eb
101,027
14.34
152,856
13.75
194,563
13.93
Ebi
Information processing and related equipment
Office and computing machines*
Telephone apparatus*
Nondefense electronic communication
equipment*
Scientific and optical goods*
Medical instruments*
Copiers and related equipment*
357pt
3661
27,897
8,213
4,192
3.96
1.17
.60
54,635
18,148
7,121
4.92
1.63
.64
77,762
27,074
6,809
5.57
1.94
.49
3662pt
381,3
384
386
3,313
2,185
3,262
6,732
.47
.31
.46
.96
7,059
4,469
6,978
10,860
.63
.40
.63
.98
11,768
7,540
11,496
13,075
.84
.54
.82
.94
Industrial equipment
Boiler shop products*
Turbines
Construction and mining equipment
Materials handling machinery*
Metal working machinery*
Special industry machinery*
General industrial equipment*
3443
3511
3531-3
3534-7
354
355
3561, 3-5,
41,205
4,075
1,553
9,200
2,635
8,747
5,271
6,388
5.85
.58
.22
1.31
.37
1.24
.75
.91
55,636
4,136
2,153
13,173
3,317
11,284
7,416
9,573
5.00
.37
.19
1.18
.30
1.01
.67
.86
56,389
3,395
1,967
11,675
3,837
13,006
9,590
7,225
4.04
.24
.14
.84
.27
.93
.69
.52
3,336
.47
4,584
.41
5,694
.41
Ebt
17,559
4,630
2,870
646
3,539
1,952
2,039
1,883
2.49
.66
.41
.09
.50
.28
.29
.27
22,946
4,976
2,555
592
6,591
3,853
3,961
418
2.06
.45
.23
.05
.59
.35
.36
.04
34,428
9,390
7,950
1,117
6,330
7,505
852
1,284
2.46
.67
.57
.08
.45
.54
.06
.09
Ebo
14,366
3,294
5,490
5,582
2.04
.47
.78
.79
19,639
5,795
6,146
7,698
1.77
.52
.55
.69
25,984
9,888
5,624
10,472
1.86
.71
.40
.75
Electrical distribution equipment*
Ebn
361
Transit equipment
Autos, business
Trucks, business
Truck trailers
Commercial aircraft*
Commercial aircraft equipment n.e.c.*
Commercial ships*
Railroad equipment
371pt
371pt
3715
372 lpt
3724, 8pt
373 lpt
374
Other equipment
Fixtures and office furniture
Farm and garden equipment
Service industry equipment*
252, 4, 9
352
358pt
«|. See table A.l, note 1. N.e.c. means not elsewhere classified.
2. See table A.l, note 2. Market classification codes are as follows: Eb—
business equipment; Ebi-information processing and related equipment;
Ebn—industrial equipment; Ebt—transit equipment: and Ebo—other
equipment.
3. Details may not sum to totals because of rounding.
from data sources more comprehensive than
those available for the monthly compilation.
"Value-added-weighted production index" refers
to the concept of production to which the index of
industrial production, as a measure, most closely
adheres. This concept is known as "Census value
added;" from the sum of the gross outputs of each
industrial establishment it excludes the flows
among establishments within the industrial sector
and the inputs from other sectors. 6
The 1990 revision also incorporates a considerable amount of other new benchmark information.
The general sources of this information are presented in the summary of statistical changes (see
box). This appendix documents more fully the
way in which the revision uses this information; it
also evaluates the effect of the new weights.
The structure of the basic series and the
monthly source data used in the compilation of
the monthly index are fundamentally unchanged,
so the appendix does not present the complete
series structure. Descriptions of several additions—the new textile industry series, the new
source in gas utilities, and the new business equipment aggregates—appear in tables A. 1 and A.2. A
copy of the complete 1990 index of industrial
production structure and series composition is
available upon written request to Industrial Output Section, Mail Stop 82, Division of Research
6. Census value-added data do not exclude outlays for
business services purchased outside the industrial sector,
such as advertising, insurance, and the like. For a discussion
of concepts of industrial production, see Clayton Gehman
and Cornelia Motheral, "Industrial Production Measurement
in the United States: Concepts, Uses, and Compilation
Practices" (reply to an inquiry from the Economic Commission of Europe, Board of Governors of the Federal Reserve
System, Division of Research and Statistics, February 1964).
200 Federal Reserve Bulletin • April 1990
and Statistics, Federal Reserve Board, Washington, D.C. 20551.
Benchmark
and Annual
Data
The Census value-added-weighted production indexes are used at the four-digit Standard Industrial Classification (SIC) level, yielding measures
of change in industry output from 1977 to 1982.
For years in which Census indexes are unavailable, 1978-81 and 1983-86, staff members of the
Federal Reserve Board developed annual indexes of production that are similar in concept to
the Census indexes to form a consistent time
series for the benchmarking of the industrial
production index. The annual indexes are based
on industry output in terms of current dollars,
defined as value added plus the cost of materials,
reported in the Annual Survey of Manufactures;
the current dollars are converted to constant
A.3.
dollars with deflators from the Bureau of Economic Analysis, which are based mostly on producer price indexes published by the Bureau of
Labor Statistics.
In the 1990 revision, the annual indexes have
also incorporated preliminary reports from the
1987 Censuses of Manufactures and Mineral Industries. The 1987 Census data are organized
according to a new basis for industry classification, the 1987 SIC. However, the 1977 SIC
remains the basis of classification for the industrial production index because most monthly
source data are still reported according to it. For
many industries, the changes have had little or no
effect on the representation of industrial production series; for other industries, such as electrical
and nonelectrical machinery, extensive changes
have affected series in the index. Thus, the
annual indexes and the weights constructed from
the 1987 Census data adjusted to approximate the
Sources of annual levels for basic series in the 1990 revision of the index of industrial production, by two-digit
Standard Industrial Classification code1
Series and SIC code
Annual
physical product
data
Number of
series
Mining
10
11-12
13
14
Manufacturing
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
91
Utilities (49)
Total index
1987
proportion
7
3
1.38
.14
1
3
.58
.67
11
2.80
. ..
1
3
.36
.99
1
.25
5
1.14
1
.06
18
1. This table refers to the source of annual levels to which the three types
of monthly indicator (physical-product, kilowatt-hour, or production-worker
Annual average of
monthly physical
product data
4.18
Number of
series
1987
proportion
Annual index
constructed from
constant-dollar data
Number of
series
1987
proportion
10
2
2
6
6.52
.15
1.22
5.15
1
1
.03
.03
56
14
2
11.66
2.61
.94
1
.48
156
15
1
10
6
7
69.98
6.15
.08
1.84
2.35
1.51
4
1
5
7
2.34
1.37
.78
1.11
3
4
2
10
1
1.45
1.24
4.63
6.83
.20
4
1
2
8
.40
.10
.06
1.09
4
2
10
7
13
2.37
.20
2.40
1.10
5.38
1
5
1
.04
.29
.05
13
19
19
5
2
3
8.52
8.26
9.75
3.26
1.24
1.18
9
7.63
75
25.81
157
70.01
data) are benchmarked. The table does not show the proportion of the three
types of monthly indicator used in the index of industrial production.
Developments in Industrial Production
1977 SIC are subject to further revision when the
industrial production index switches to the 1987
SIC.
Approximately 70 percent of the index is benchmarked to the annual indexes derived from comprehensive constant-dollar measures of industry
output (table A.3). Benchmarking to constantdollar measures occurs almost exclusively in the
manufacturing portion of the index. A smaller
portion of the manufacturing series is benchmarked to a second type of basic source data—
comprehensive physical-product data that are
available on a monthly basis. An example is the
index of primary aluminum ingot, which is shown
in chart A.l with an annual index derived from
constant-dollar data. As is typical, the movements
and levels of the two types of indexes, though
similar, are not identical.
The third type of basic source data—annual
physical-product data—is used for benchmarking
only 11 of the 223 individual manufacturing series. For example, the predominant source of
data for the annual levels for the mining and
utilities industries in the industrial production
index are physical measures of annual output
available from the Bureau of Mines and the
Department of Energy. The Bureau of Mines'
Minerals Yearbooks through 1986 provided the
basic data for most of the revised annual levels
for the metal mining and stone and earth minerals
series. Coal and oil and gas extraction series, as
well as all utilities series, reflect the latest data
available from the Department of Energy.
The use of physical-product data for benchmarking should not be confused with their use in
determining month-to-month movements in the
index. In the revised index, as in the old, series
that use physical-product data as a monthly
A . l Annual indexes based on constant-dollar and
physical-product data
201
indicator account for about 40 percent of the
index in terms of its value-added proportions. No
monthly indicators in the index require deflation.
In all cases, the adjustment of monthly indicators
to annual benchmark levels is performed as described in Industrial Production—1986 Edition.
Weighting
of the
Index
As the text indicates, this revision incorporates
new weight periods. The index now uses 1977
value-added weights for 1977-81; 1982 weights
for 1982-86; and 1987 weights for 1987-90. The
chainlinking of intercensus segments of the index
follows procedures established in the 1959 version of the index, as modified and reported in
Industrial Production—1986 Edition.
Because weighting is often difficult to understand, it should be recognized that the word
weight commonly is used in two ways. One is in
reference to proportions in the index showing the
relative importance of each series in a weightbase year. Such figures have been published as
"1977 proportion" in the Federal Reserve statistical release Industrial Production, and comparable figures will be shown as "1987 proportion"
for the revised index in the new release Industrial
Production and Capacity Utilization. (A summary of these figures and those for earlier years
was presented in table 4.) A second usage of
weight refers to the price element of the valueadded data used to calculate the proportions.
Only the price element changes when one weight
base replaces another. 7
7. Consider a weighted relative quantity index,
j _ SCgn/go) W
where qn and q0 are the quantity relatives and the w's are
value weights (with both price and quantity elements) to
indicate the relative importance of the quantities. Then with
Ratio scale, 1987 = 100
Aluminum ingot
QoPo
150
^sr-125
Physical products > \
\
1
1
1977
1
1
1
1
1981
1
1
1 1
198<i
100
\
1
1
1 1
1989
the expression for /„ given above is algebraically equivalent
to the equation
j _ Zqnp0
ZqoPo
This is a Laspeyres quantity index, which shows changes in
quantities with prices held fixed at base-year values. Therefore, introducing new weights in an index—shifting the base
year—updates the price element.
202 Federal Reserve Bulletin • April 1990
A.4.
Effects of alternative weight years on the industrial production index, 1977-891
1977--82
Weight year
1982-87
1987-89
1977-89
Percentage increases
1977
1982
1987
Linked
4.7
1.1
-.5
4.7
(-.2)
(-.6)
(-1.1)
(-.2)
34.2
22.1
20.4
22.1
(20.3)
(17.2)
(18.4)
(17.2)
12.2
8.4
8.1
8.1
(7.6)
(6.5)
(7.4)
(7.4)
57.6
33.7
29.5
38.2
(29.1)
(24.1)
(25.7)
(25.6)
(3.7)
(3.2)
(3.6)
(3.6)
3.9
2.5
2.2
2.7
(2.2)
(1.8)
(1.9)
(1.9)
Average annual rate of growth
1977
1982
1987
Linked
.9
.2
-.1
.9
(0)
(-.1)
(-.2)
(0)
6.1
4.1
3.8
4.1
(3.8)
(3.2)
(3.4)
(3.2)
5.9
4.1
4.0
4.0
1. Numbers in parentheses show the effect of excluding office and computing machines from the aggregates.
As explained and illustrated in Industrial
Production—1971 Edition, in a segment of the
industrial production index for which the
weights are held fixed, the proportion of fastgrowing industries in the index rises with time,
whereas that of industries with relatively slow
or declining growth falls. Because fast-growing
industries generally show less-than-average increases in prices, the composition of the index—the proportions in the total—may be substantially altered with the introduction of new
weights. For the most part such changes, reflecting changes in price relationships since the
previous weight year, tend to reverse the
changes in proportions that have already occurred as a result of quantity changes.
Thus, one can analyze the revisions in the new
index over 1977-89, and compare them with the
old index, according to the increases or decreases owing to the introduction of two new
weight periods. With this analysis, upward influences that arise from reweighting slow-growing
industries such as textiles, primary metals, fabricated metals, and nonelectrical machinery excluding office and computing machines, almost
offset in the aggregate downward influences owing to the reweighting of fast-growing industries,
such as printing and publishing, electrical machinery, and instruments. Consequently, as in
the past, the new weight periods cause a slight
downward revision to the index, as the relative
importance of industries that have been growing
rapidly is reduced.
The use of alternative weight years for the
separate periods beginning in 1977 affects the
index's representation of total industrial output.
As table A.4 shows, the use of various single
weight years, rather than linked segments, to
aggregate component series of the index distorts
the representation of total industrial output in
periods distant from the base year. As the lower
portion of the right column shows, total industrial output is calculated, with 1977 as a single
weight year, to grow at an almost 4 percent rate
on average for 1977-89, whereas the linked index
grows at a more representative 2.7 percent rate.
As shown by the figures in parentheses, these
effects are exaggerated by the rapid growth of the
office and computing machinery industry, which
since 1977 has been estimated to have expanded
at an average rate of almost 30 percent per year.
A factor thought to complicate the use of 1982
weights is that year's recession, which might
have distorted relationships in the value-added
proportions between cyclical and noncyclical
series. However, in view of the calculations in
table A.4, where the growth rates shown are
similar for 1982-87 with alternative 1982 and
1987 weight bases, the use of 1982 as a weight
year has made little difference. Moreover, one
can eliminate most of the effect of the oil crisis
evident in the value-added proportions shown
in table 4 by excluding mining and utilities from
total industrial production. When those groups
are excluded, the proportions of the relatively
more cyclical durable goods industries and the
A.5.
Proportions of value added in manufacturing,
1977-871
Percent
Series
Total manufacturing
1977
1982
1987
100.00
58.31
41.69
100.00
56.69
43.31
100.00
55.98
44.02
Developments in Industrial Production
A.6.
203
gomgarison of rates of growth in industrial production, by type of monthly indicator, 1977-89
Indicator
Physical product
Kilowatt hours
Kilowatt hours, excluding computers
Production-worker hours
1977-82
1982-87
1987-89
1977-89
1977-82
1982-87
1987-89
1977-89
-1.2
2.9
-.2
1.9
1.7
6.7
4.0
4.7
2.1
5.9
4.9
4.2
.5
5.0
2.4
3.5
-.4
.9
-.6
.7
-1.6
.2
-2.0
-.1
-.2
-1.8
-2.3
.9
-.8
.2
-1.4
less cyclically sensitive nondurable goods industries within manufacturing alone appear undistorted by the recession (table A.5).
Revisions
Monthly
Growth" rale eSKtfrafgtT WmTT5vi§5jnird55J—
minus growth rate calculated
with earlier index
Average annual rate of growth,
revised index
of Basic Series by Type of
Indicator
The industrial production index relies on three
major types of indicators of monthly production: (1) physical-product series, (2) kilowatt
hours of electricity used by industry, and (3)
aggregate hours for which production workers
are paid. The reliability of each series as a
measure of output depends on two factors: (1)
the accuracy of the indicator in reflecting
changes in industry activity on a monthly basis
and p ) the accuracy with which the basic
indicators are transformed into measures of
production. With physical-product data, the
adjustments allow for incomplete coverage and
for a change in the quality of the products
produced in the industry. Production-workerhour or kilowatt-hour series reflect an extrapolation of the historical relationship of output to
inputs, that is, changes in labor or energy
productivity. Estimates of these relationships
are recalculated when more comprehensive
data are available; the extent of the 1990 revisions to industrial production series aggregated
by type of indicator is shown in chart A.2.
In the overall 1977-89 period, the annual
growth rates of the series whose initial estimates
were derived from the kilowatt-hour and production-worker-hour series revised upward 0.4 and
0.2 percentage point respectively. Excluding the
office and computing machinery industry from
the estimates, the growth rate of the kilowatthour series revised down about IV2 percentage
A.2 Revised and earlier industrial production indexes of output, by type of monthly indicator
4
204 Federal Reserve Bulletin • April 1990
A.3 Indexes of electric power use by U.S. industries
Ratio scale, 19HV-1UU
Total kilowatt hours used
80
Kilowatt hours used for industrial production series
1977
1981
1985
1989
point, the largest revision shown in table A.6.
The aggregate of series based on physicalproduct information revised downward 0.9 percentage point. On balance, these series had
been thought to require more adjustment than
the revision now indicates. This development
suggests that the physical product indicators,
which are more prevalent in relatively mature
industries, were more representative of changes
in quantity and quality of output during 1977-87
than in earlier periods.
Revision
of Electric Power
Data
The series on electric power use by industry has
been revised back to January 1972. The revised
series include the incorporation of new voluntary reporters of data as well as adjustment for
the loss of reporters. The results of the review
and the correction of the SIC codes assigned to
the reporters are also included. The results of
the revision of basic kilowatt-hour data used at
the total industrial level appears in the top panel
of chart A.3. Overall, the difference between
the old series and the revised ones is small;
however, the revised data for 1977-82 show a
somewhat stronger cyclical pattern than do the
earlier data, especially in the steeper decline in
kilowatt hours now shown during the 1982
recession. Although the growth rate of total
industrial use was little changed, changes at
lower levels of aggregation were significant.
The bottom panel of chart A.3 shows an aggregate of kilowatt-hour use for those industries
for which the electric power series are used as
monthly indicators in industrial production indexes. The panel, which shows the basic kilowatt-hour data before they were converted to a
measure of output, indicates a more rapid
growth rate for the revised aggregate than before, especially in 1977-82.
On April 17,1990, revised Federal Reserve statistics
of industrial production, capacity utilization, and electric power use by industries will be released. Historical data from all of these time series will be available
on a single magnetic tape from the National Technical
Information Service (703-487-4650).
The G.12.3 statistical release, Industrial Production,
and the G.3(402) release, Capacity Utilization, will be
combined into the single publication:
G. 17(419) Industrial Production and
Capacity Utilization
All data shown in the combined release will be available on the day of issue through the Department of
Commerce's online Economic Bulletin Board
(202-377-3870).
The separate system of capacity utilization for materials will be discontinued. Many of the components of
the materials group will be included in mining and in
an improved primary processing aggregate for manufacturing. The revisions and structure modifications to the
capacity and capacity utilization indexes will be presented in an article in the June Bulletin.
205
Treasury and Federal Reserve
Foreign Exchange Operations
This quarterly report, covering the period November 1989 through January 1990, provides
information on Treasury and System foreign
exchange operations. It was presented by Sam
Y. Cross, Manager of Foreign Operations of the
System Open Market Account and Executive
Vice President in charge of the Foreign Group of
the Federal Reserve Bank of New York. George
G. Bentley was primarily responsible for preparation of the report.1
Movements of the dollar against individual currencies diverged widely between November 1989
and January 1990—a period when the rapid
opening up of Eastern Europe benefited the
German mark and a number of factors continued
to weigh against the Japanese yen. The dollar
experienced occasional bouts of upward pressure
against the yen, and on several of these occasions the U.S. monetary authorities intervened
to resist the dollar's rise against that currency,
selling a total of $750 million for yen. On balance,
the dollar declined against the mark and other
European currencies, moving down 8V2 percent,
IVA percent, and 6 percent respectively against
the mark, Swiss franc, and British pound. The
dollar rose, however, about 1 percent against
both the yen and the Canadian dollar. On a
trade-weighted basis, as measured by the staff of
the Board of Governors of the Federal Reserve
System, the dollar declined 53/4 percent.
NOVEMBER
THROUGH
MID-DECEMBER
The movement in dollar exchange rates against
the European currencies was most marked dur1. The charts for the report are available on request from
Publications Services, Board of Governors of the Federal
Reserve System, Washington, D.C. 20551.
1. Federal Reserve reciprocal currency arrangements
Millions of dollars
Institution
Amount of
facility,
January 31, 1990
Austrian National Bank
National Bank of Belgium
Bank of Canada
National Bank of Denmark
Bank of England
Bank of France
Deutsche Bundesbank
Bank of Italy
Bank of Japan
250
1,000
2,000
250
3,000
2,000
6,000
3,000
5,000
Bank of Mexico
Netherlands Bank
Bank of Norway
Bank of Sweden
Swiss National Bank
700
500
250
300
4,000
Bank for International Settlements
Dollars against Swiss Francs
Dollars against other authorized European
currencies
Total
600
1,250
30,100
ing the first half of the reporting period. Positive
sentiment toward the mark built rapidly after the
opening on November 9 of the borders between
East and West Germany. Market participants
anticipated that an influx of East German immigrants would benefit the German economy by
providing a new supply of skilled labor. At the
same time, the new immigrants were expected to
stimulate domestic demand and thereby spur
higher mark interest rates as the Bundesbank
sought to contain any potential inflationary pressures. More broadly, international investors focused on the prospects for greatly expanded
market opportunities for German enterprises,
and the German equity market surged in response to actual and anticipated capital inflows.
Against this background, the mark strengthened against all major currencies, and talk began
to circulate, especially around the December 8-9
European Community summit, that exchange
market pressures would lead to a revaluation of
the mark within the European Monetary System
206 Federal Reserve Bulletin • April 1990
(EMS). Germany has had large sustained trade
surpluses against most of its European trading
partners. Moreover, the German authorities
were presumed to welcome any developments
that would foster adjustment of the trade surplus
or help dampen inflationary impulses to the economy. Market participants believed that a realignment within the EMS would be viewed by
Bundesbank officials as consistent with both of
these objectives. Accordingly, speculative flows
into marks increased, and reports circulated in
the market that the Bundesbank's partner central
banks were intervening to sell both dollars and
marks to support their own currencies.
In the process, the dollar declined steadily
against the mark. From DM1.8415 at the beginning of November, the dollar declined by midDecember to around DM1.7300, a drop of 6
percent.
Against the yen, the dollar showed less of a
trend, although it experienced upward pressure
from time to time when there were reports of
strong Japanese investor demand for portfolio
and direct investments in the United States.
Market participants were particularly impressed
that Japanese interest in investing in dollar-denominated assets appeared to remain strong,
even though market commentary about the outlook for U.S. and Japanese monetary policy
implied that the interest rate differentials favoring the dollar would continue to narrow. Once in
November and again in early December, the
U.S. monetary authorities, in keeping with understandings in the Group of Seven on exchange
rate cooperation, intervened to sell a total of $150
million against yen. These operations were coordinated with the Bank of Japan. By mid-December, the dollar was trading around ¥144.00, a
level 3/4 percent higher than at the start of the
reporting period.
MID-DECEMBER
THROUGH
JANUARY
In mid-December, one focus of market attention
was the extent to which monetary policies in the
United States and Japan might move in opposite
directions. Economic statistics released through
mid-December suggested that the U.S. economy
was still sluggish and price pressures subdued,
keeping alive expectations that U.S. interest
rates would continue to move lower. The market's hope that the Federal Reserve had intended
to signal a new easing of monetary policy in
November had proved unfounded. But market
participants were still confident that the Federal
Reserve would continue to respond, as it had in
preceding months, to evidence of a decelerating
economy by allowing short-term interest rates to
ease a bit further. Indeed, the Federal Reserve
moved on December 20 to supply liquidity under
circumstances that led market participants to
believe that another such move had occurred,
and they anticipated that further moves would be
forthcoming early in the new year.
In Japan, market participants had noted that
short-term market interest rates had drifted progressively higher for several months, and that
this trend had continued even after the Bank of
Japan raised its discount rate in a surprise move
in October. Trying to anticipate the authorities'
next action, dealers were sensitive to the possibility that the Bank of Japan might again raise its
discount rate to follow up on the move in market
rates. When such an action did not occur by
mid-December, market participants began to suspect that these expectations might not be fulfilled. They began to doubt that the authorities
would move on interest rates at a time of impending changes in Bank of Japan leadership and so
soon before parliamentary elections in early
1990. Market participants were surprised, therefore, when Japanese newspapers reported on
December 18 that the Bank of Japan would soon
raise its discount rate, a move that indeed took
place on December 25. When worldwide trading
resumed after the Christmas holidays, the dollar declined to its period low against the yen
of ¥141.70 on December 27 and a twentymonth low against the mark of DM1.6752 on
December 28—1 percent and 9 percent lower
respectively than at the start of November.
In early January, the market's assessment of
the outlook for dollar interest rates began to
change. Accumulating signs that the U.S. economy had stopped decelerating began to raise
doubts about both the timing and the extent of
any further easing of U.S. monetary policy. Data
released around the turn of the year suggested
that growth might not be as fragile as had previ-
Treasury and Federal Reserve Foreign Exchange Operations
ously been thought and that the slowdown in
some manufacturing sectors in late 1989 had not
spilled over into other sectors of the economy.
Unseasonably cold weather led to a sharp runup
in oil prices and heightened concerns about renewed price pressures in the food and energy
sectors. The January 12 report of an unexpectedly large jump in U.S. producer prices was then
interpreted as justifying concerns that little scope
remained for further immediate declines in dollar
interest rates. Later in January, the dollar received additional support as market participants
focused on interpretive press reports indicating
the Federal Reserve's concerns with inflation
and its more optimistic assessment of economic
growth prospects in 1990. When trading resumed
after the new year, this reassessment helped to
move the dollar up from its lows of late December and provided continuing support to the dollar
throughout the rest of January.
Against the yen, the dollar also benefited early
in January from the potential uncertainties surrounding the upcoming parliamentary elections
in Japan. Around the start of the new year,
rumors of scandals involving members of the
ruling Liberal Democratic Party once again unsettled the exchange markets, and the dollar
reached its three-month high against the yen
at ¥146.80 on January 3. With upward pressure
on the dollar-yen exchange rate persisting
throughout the first half of the month, the U.S.
monetary authorities again intervened, on three
days, to sell $600 million against yen. These
operations, which were coordinated with the
Bank of Japan, brought the total of U.S. intervention for the November-January period to
$750 million, shared equally by the Federal Reserve and the U.S. Treasury. The dollar closed
the period at ¥144.45, roughly 1 percent higher
than at the start of November.
The dollar recovered little against the mark in
early January. At this time, talk revived of a
revaluation of the German mark within the EMS.
In fact, an adjustment of the EMS was announced on January 5 to accommodate a request
from the Italian government to bring the Italian
lira within the narrow band of the exchange rate
mechanism of the EMS. When this relatively
modest adjustment occurred smoothly and without a generalized realignment, expectations of
207
further near-term adjustments of exchange rates
diminished. The dollar's low for the period was
DM1.6630 on January 8.
For the remainder of January, movements in
the dollar-mark exchange rate were dominated
by events in Eastern Europe. Although indications of heavy investor demand for the mark
continued to support that currency, reports in
mid-January began to reveal the fragility of the
government structure in East Germany and elsewhere in Eastern Europe. Doubts also were
voiced about political stability in the Soviet
Union, especially in light of mounting separatist
movements in several Soviet republics. These
fears somewhat dampened the near-term enthusiasm for the mark, which traded with little clear
direction for the rest of the month. The dollar
closed the period against the mark at DM1.6850.
Uncertainty about the implications of the
widespread political and economic changes taking place was reflected in increased volatility in
the world equity and bond markets during January. This volatility, together with convergence of
long-term interest rates in the United States,
Germany, and Japan, and the attraction of new
investment opportunities in Europe, revived concerns about the continued smooth financing of
the U.S. current account deficit. In this context,
dollar rates from day to day were sometimes
influenced by sharp movements in other financial
markets. But for the month as a whole, these
developments appeared to have little lasting effect on dollar exchange rates.
Against the Canadian dollar, the dollar trended
lower throughout the three-month period until
mid-January. The dollar reversed its course at
that time, when a move by the Bank of Canada to
ease interest rates precipitated a sell-off of the
Canadian currency.
In other operations, the U.S. Treasury through
the Exchange Stabilization Fund (ESF), together
with the Bank for International Settlements
(BIS), acting for certain participating central
banks, agreed to provide short-term support of
$500 million to the National Bank of Poland for
its economic stabilization and reform efforts,
effective December 27. The ESF's share in the
facility was $200 million. On December 28, Poland drew $86 million of the ESF's portion.
Also during the period, Bolivia on December
208 Federal Reserve Bulletin • April 1990
2.
Drawings and repayments by foreign central banks under special swap arrangements with the U.S. Treasury1
Millions of dollars; drawings or repayments ( - )
Central bank drawing
on the U.S. Treasury
Bank of Mexico2
Central Bank of Bolivia
National Bank of Poland5
Amount of
facility
Outstanding as
of October 31,
1989
November
December
January
Outstanding as
of January 31,
1990
425.0
flOO.O3
I 75.0 4
200.0
384.1
75.0 3
...
...
-6.5
. . .
...
...
-35.8
—75.03
75.0 4
86.0
-7.7
...
-75.04
. . .
334.1
0 1
0 j
86.0
4. The latest facility was established on December 29, 1989, and expired
upon repayment on January 12, 1990.
5. Represents the ESF portion of a $500 million short-term credit facility
established on December 27, 1989.
1. Data are on a value-date basis.
2. Represents the ESF portion of $2,000 million near-term credit facility.
3. The facility, which was established for $100 million on July 11, 1989,
was renewed on September 15, 1989.
3.
iff
Drawings and repayments by foreign central banks1
Millions of dollars; drawings or repayments ( - )
Central bank
Amount of
facility
Outstanding as
of October 31,
1989
November
December
January
Outstanding as
of January 31,
1990
Under reciprocal currency arrangements with the Federal Reserve System
Bank of Mexico 2 .
700.0
700.0
700.0
Under special swap arrangements with the Federal Reserve System
Bank of Mexico2
125.0
84.1
1. Data are on a value-date basis.
29 repaid in full its $75 million outstanding drawing of a $100 million facility established with the
ESF. On the same day, Bolivia drew the full
amount of a newly established facility of $75
million. The drawing was fully repaid upon maturity on January 12 (table 2).
On four separate occasions, Mexico repaid
portions of its outstanding swap commitments
under the $2,000 million facility established
with the U.S. monetary authorities, the BIS
(acting for certain participating central banks),
and the Bank of Spain. The Federal Reserve
and the ESF each received a total of $50 million
(table 3).
As of the end of January, cumulative bookkeeping or valuation gains on outstanding foreign currency balances were $2,709.6 million for the Federal Reserve and $2,011.0 million for the ESF
(table 4). (Valuation gains on holdings warehoused by the ESF with the Federal Reserve are
excluded in the first figure and, correspondingly,
included in the second figure.) These valuation
gains represent the increase in dollar value of
outstanding currency assets valued at endof-period exchange rates, compared with the rates
-6.5
-35.8
34.1
-7.7
2. Drawn as part of the $2,000 million near-term credit facility established
on September 21, 1989.
prevailing at the time the foreign currencies were
acquired.
The Federal Reserve and the ESF regularly
invest their foreign currency balances in a variety
of instruments that yield market-related rates of
return and have a high degree of quality and
liquidity. A portion of the balances is invested in
securities issued by foreign governments. As of
the end of January, holdings of such securities by
the Federal Reserve amounted to $7,180.4 million equivalent, and holdings by the ESF
amounted to the equivalent of $7,477.6 million.
4.
Net profits or losses ( - ) on U. S. Treasury and
Federal Reserve current foreign exchange
operations1
Millions of dollars
Period and item
Federal
Reserve
U.S. Treasury
Exchange
Stabilization
Fund
October 1, 1989-January 31,1990
Valuation profits and losses
on outstanding assets
and liabilities as of
January 31, 1990
1. Data are on a value-date basis.
.0
.0
2,709.6
2,011.0
209
Industrial Production
Released for publication February 16
Industrial production fell 1.2 percent in January
following a revised increase of 0.2 percent in
December. In January, the output of motor vehicles was curtailed drastically, and the extremely
warm weather caused a sharp drop in utilities
output. Elsewhere, industrial production, on bal-
1984
1986
1988
All series are seasonally adjusted. Latest series: January.
1990
ance, rose slightly. At 140.9 percent of the 1977
annual average, the total index was little changed
from a year earlier. Manufacturing output declined 0.9 percent in January, and factory utilization dropped to 81.9 percent from 82.9 percent in
December. Detailed data for capacity utilization
are shown separately in "Capacity Utilization,"
Federal Reserve monthly statistical release G.3.
1984
1986
1988
1990
210 Federal Reserve Bulletin • April 1990
1977 = 100
Group
Percentage change from preceding month
1989
1990
Dec.
Jan.
1989
Sept.
Oct.
1990
Nov.
Dec.
Jan.
Percentage
change,
Jan. 1989
1990
Major market groups
Total industrial production
142.5
140.9
-.1
-.3
.3
.2
-1.2
.1
Products, total
Final products
Consumer goods
Durable
Nondurable
Business equipment
Defense and space
Intermediate products
Construction supplies
Materials
153.5
151.5
141.4
128.5
146.1
168.8
177.7
160.3
143.7
127.6
151.3
148.8
138.2
119.7
145.1
165.9
177.7
159.9
144.0
126.6
-.1
-.2
-.2
-.6
-.1
-.2
-.3
.2
-.4
-.2
-.6
-.9
.9
.0
1.2
-2.8
-3.4
.5
1.2
.0
.5
.5
.2
-.4
.4
1.1
.3
.6
.9
-.2
.7
.8
.6
.8
.6
1.3
.6
.5
-.1
-.7
-1.4
-1.8
-2.2
-6.8
-.7
-1.7
.0
-.3
.2
-.7
.8
.4
-.2
-9.0
2.8
1.2
-1.3
2.1
1.2
-1.1
.1
.3
-.2
-2.0
6.3
-.9
-1.7
.2
2.1
-10.7
.1
-2.0
2.8
1.5
-3.8
Major industry groups
Manufacturing
Durable
Nondurable
Mining
Utilities
148.6
145.9
152.4
102.4
122.8
147.2
143.3
152.7
104.6
109.6
-.2
-.4
.0
1.1
1.0
-.6
-1.6
.8
.8
.9
.3
.4
.2
.2
-.1
NOTE. Indexes are seasonally adjusted.
In market groups, the production of consumer
goods fell 2.2 percent in January as automobile
assemblies plunged to an annual rate of 4.1
million units from a rate of 6.2 million units in
December, and light truck production for consumer use fell more than 30 percent. In addition,
the sale of electricity and gas for residential use
was down sharply because of warmer than usual
weather over most of the nation. Output of home
goods, however, picked up as appliances rebounded after significant cutbacks in each of the
two preceding months.
Business equipment also was down sharply
because of the decline in production of motor
vehicles. Excluding motor vehicles, business
Total industrial production—Revisions
Estimates as shown last month and current estimates
Index (1977=100)
Month
Oct
Nov
Dec
Jan
Percentage change
from previous
months
Previous
Current
Previous
Current
141.8
142.3
142.8
141.8
142.2
142.5
140.9
-.4
.3
.4
-.3
.3
.2
-1.2
equipment was about unchanged, output of construction, mining, and farm equipment advanced
further, but commercial equipment, particularly
computers, weakened. Construction supplies
were essentially unchanged again last month, but
business supplies, which include the sale of electricity and gas to commercial users, declined.
Materials output was down 0.7 percent in January as output of consumer durable parts, mainly
for motor vehicles, and energy materials, primarily electricity generation, fell sharply. However,
these declines were moderated somewhat by
increases in steel and coal output.
In industry groups, output in manufacturing
declined 0.9 percent in January, with motor
vehicles and parts more than accounting for the
drop. Fabricated metals and rubber and plastics
products, which are partially related to motor
vehicles, also declined. In addition, declines occurred in lumber, nonelectrical machinery, and
textiles. However, there were sharp increases in
petroleum refining and iron and steel output.
Outside manufacturing, mining rose because of
increased coal production, and utilities fell because the warm weather lowered the demand for
heating.
211
Statements to the Congress
Statement by Wayne D. Angell, Member, Board
of Governors of the Federal Reserve System,
before the Subcommittee on Telecommunications and Finance of the Committee on Energy
and Commerce, U.S. House of Representatives,
February 21, 1990.
I am pleased to appear today to discuss with you
issues related to the security of large-dollar value
electronic funds transfer systems and the influence of technology on the future development of
these systems. The security of funds transfer and
financial message processing systems is the subject of a report by the General Accounting Office
(GAO).i
My testimony is divided into three parts and
addresses topics identified by the subcommittee
as being of particular interest. First, I will provide an update on progress with respect to implementation of the GAO's recommendations
addressing security on Fedwire, the large-dollar
funds transfer system operated by the Federal
Reserve Banks. Second, I will provide the
Board's views on the need for clarification of its
authority to oversee other funds transfer and
financial message systems, such as the Clearing
House Interbank Payments System (CHIPS) and
the Society for Worldwide Interbank Financial
Telecommunication (S.W.I.F.T.). Finally, I will
provide a broader perspective on future technology trends as they will influence the international
financial marketplace, with particular reference
to payments networks.
As background to the update on the Federal
Reserve's response to the GAO recommendations regarding Fedwire, it may be useful to
highlight three distinguishing features of this system. First, the modern technology base that
1. See U.S. General Accounting Office, Electronic Funds
Transfer: Oversight of Critical Banking Systems Should Be
Strengthened, report number IMTEC-90-14 (GAO, January
1990).
serves as the automation "platform" for Fedwire
has evolved from decades of experience in applying new technology to meet business requirements. The electronic transfer of reserve balances on the books of the Federal Reserve Banks
began in 1918, using the telegraph. Today, the
Federal Reserve uses state-of-the-art computers
and data communications to operate Fedwire and
is investing in research and development to ensure that the most current technology is used
effectively, with a strong focus on security. Second, Fedwire is truly the nation's funds transfer
system. All depository institutions have access
to Fedwire, and the Reserve Banks currently
connect more than 11,000 end points in all parts
of the nation. These end points include the
smallest to the largest depository institutions. As
a truly national payment system, Fedwire must
be responsive to a variety of needs presented by
depository institutions having diverse characteristics. Third, Fedwire is the chief vehicle for
effecting immediate final settlement for U.S. dollar payments, that is, the irrevocable transfer of
value on the books of the Federal Reserve
Banks, regardless of whether the payment originated domestically, or in London or Tokyo and
was sent through a U.S. banking office. In short,
when describing the role of Fedwire for settling
interbank dollar transactions, it is no exaggeration to say that "the buck stops here."
As noted in the Board's November 9, 1989,
response to GAO's draft report on oversight of
electronic funds transfer systems, the Federal
Reserve is strongly committed to providing the
most secure electronic payment services possible. Such a commitment is essential in the case of
a funds transfer system like Fedwire that handles
about 240,000 transfers each day with an average
value per transfer of $3.1 million. We believe that
it is important to begin any discussion of Fedwire
security, as did the GAO, with the statement that
there have not been any reported incidents (I can
say with assurance no incidents) of fraudulent
212
Federal Reserve Bulletin • April 1990
transfers by the employees who operate the
system. Moreover, in the case of Fedwire, the
same holds true for so-called interloper fraud.
The Federal Reserve's commitment to security
begins with a sound Fedwire security "architecture," or unified structure of security safeguards
and features, which, in combination, define an
organization's approach to security. The Federal
Reserve security architecture incorporates a
wide range of safeguards, which total more than
100. These safeguards are, by the way, the result
of our work with an outside consultant. To put
the GAO recommendations in the proper perspective, it is important to understand the Federal Reserve's overall security architecture. I
would now like to take a few moments to describe the safeguards and mechanisms that protect the Fedwire system within the overall security architecture.
The Fedwire safeguards are grouped into the
following categories:
Physical security—to limit access to terminals
and computer operations areas to those individuals who require access to perform their duties.
Guards, surveillance equipment, and card key
access devices are relied upon to prevent and
detect unauthorized physical access to restricted
computer spaces.
Access controls—both software and code
words, to prevent unauthorized access to sensitive data and programs.
Encryption—to protect the confidentiality and
integrity of Fedwire transactions, especially from
interlopers. Nearly 100 percent of transmissions
between depository institutions and Reserve
Banks are encrypted and, as I will discuss later,
the "backbone" communications network that
links the twelve Federal Reserve Banks will be
encrypted by July 1990.
Administrative controls—to govern employment practices, separation of duties, and software development standards.
Capacity planning and disaster recovery programs are also key components of the architecture to ensure that Fedwire provides secure and
reliable services. In recent years, Fedwire computer uptime has improved steadily as a result of
added attention to the need for a secure, resilient, and reliable automation environment. For
example, in 1987 and 1988, Fedwire computer
uptime averaged 99.14 and 99.21 percent respectively. In 1989, Fedwire computer uptime averaged more than 99.71 percent. I might note that
last year's uptime statistic covers the period of
the San Francisco earthquake on October 17,
1989. As a result of careful preparation and
skillful action on the scene, the Federal Reserve
Bank of San Francisco was able to recover
operations quickly after the earthquake, with no
disruption to electronic payments processing.
We welcome the opportunity to refine the
implementation of the security safeguards that
make up the Fedwire security architecture by
responding to the recommendations recently
made by the GAO. The GAO's recommendations
represent opportunities to tighten further the
implementation of a very solid security architecture.
We agree fully with fifteen of the seventeen
GAO findings. In twelve of the fifteen cases, full
corrective action has already been taken. Corrective action for the other three findings will be
fully completed by the end of June. Moreover,
steps are being taken to ensure that the conditions leading to the GAO's findings do not exist
at the eight Reserve Banks that were not reviewed by the GAO.
The Federal Reserve's internal oversight of
security is being focused to ensure that appropriate attention is given to the issues raised by the
GAO. As we noted to the GAO, the Federal
Reserve has for many years had a program of
internal oversight based on independent operations review, financial examination, and audit
staffs at both the Board and the Reserve Banks.
The Board's operations review and financial examination programs will scrutinize Fedwire security in these areas during 1990. Additionally,
every Reserve Bank's internal audit function will
perform a review of the Fedwire system, including security, to be completed by midyear.
Two specific GAO findings relating to (1) the
separation of duties between computer and network operators, and (2) hardware redundancy on
the "backbone" network linking the twelve Reserve Banks may be due to some confusion
regarding how Fedwire security is implemented
in these areas. The GAO report indicates that
there should be a complete separation of duties
between computer and network operators. Our
Statements to the Congress
view is that combining these functions has no
detrimental effect on security and is industry
practice. Adequate hardware redundancy already exists on the backbone communications
network as part of a comprehensive and sound
backup plan to provide quick recovery for the
failure of any network component. This backup
plan, which is tested quarterly and has been used
successfully in production, has contributed to
our network availability record of more than
99.99 percent since the network was implemented in 1982. A detailed discussion of our
response regarding network backup is appended
to the GAO report.
The GAO also makes two systemwide recommendations. First, the GAO recommends that
the Board require annual external reviews of
Fedwire security. We agree that it is useful to
engage the services of outside consultants to
assess security. We believe, however, that such
outside consultation can best be used when conditions support such a need, as opposed to regular annual consultations. The System has a
history of employing outside technical consultants to assess security, as I already noted in the
case of the development of the Federal Reserve's
security safeguards. More recently, an outside
assessment of Fedwire security has just been
completed at the Federal Reserve Bank of New
York. An outside consultant specializing in security performed a risk assessment of the Bank's
Fedwire operations, including both automation
and business areas. Use of a firm with specialized
security expertise is intended, in part, to introduce a view that is unconstrained by acceptance
of traditional safeguards. It is a way to take a
"fresh look" at what we do. The results of this
security review will be shared among all the
Federal Reserve Banks. In addition, the Board
retains a public accounting firm each year to
review a range of operations review and financial
examination procedures. This year, the firm will
review electronic data processing, including a
review of security. We will continue to employ
consultative services such as these when, based
on management judgement, the circumstances
warrant such input.
The GAO's second systemwide recommendation is that the Federal Reserve use both encryption and message authentication (known as MAC
213
or message authentication codes) to enhance
security. As noted earlier, nearly 100 percent of
Fedwire links between Reserve Banks and depository institutions are already encrypted. Further, encryption of the backbone network will be
completed by July 1990.
The Federal Reserve has made significant resource investments in studying the use of message authentication codes for Fedwire. These
investments include active participation in study
groups of the American National Standards Institute to develop bona fide national standards for
message authentication and the complex process
of key management that is a necessary part of a
message authentication system. On a large network with a variety of end points, such as
Fedwire, use of message authentication codes
must take place in a manner consistent with
approved technical standards for both authentication and management of authentication keys.
Reliance on national standards is important to
avoid unique technical solutions that ultimately
raise the costs of the depository institutions
connected to Fedwire. Further, commercially
available solutions that are cost effective for the
range of depository institutions that use Fedwire
must be available.
The first phase of a Federal Reserve effort to
test emerging commercial message authentication code products that meet national standards
has just been completed. These tests have not
uncovered any technical impediments to the use
of message authentication codes on Fedwire.
With the results of this phase of our program to
investigate message authentication codes complete, plans to adopt message authentication as
an additional security enhancement for Fedwire
are currently under review. Adoption of message
authentication on Fedwire has my strong personal support.
I will now turn to the GAO recommendation
that the Federal Reserve Board work with other
central banks and bank supervisory authorities to
ensure effective oversight and regulation of the
S.W.I.F.T. system and similar systems that
serve the international banking community.
S.W.I.F.T. processes a large volume of payment
orders that result in the transfer of very large
sums between depository institutions, both domestically and abroad. S.W.I.F.T. differs from
214 Federal Reserve Bulletin • April 1990
Fedwire and CHIPS, however, in the manner of
settlement for these payment orders. In Fedwire,
payment orders result in virtually instantaneous
debits and credits on the books of the Reserve
Banks without any independent action on the
part of the sending or receiving bank. Similarly,
CHIPS messages are settled virtually automatically at the end of the day. Payment orders sent
over S.W.I.F.T., on the other hand, must be
settled independently of the S.W.I.F.T. system
through correspondent accounts or through Fedwire or CHIPS transfers. In this regard,
S.W.I.F.T. is only one of several means that
banks use to communicate payment orders. Payment orders may be transmitted telephonically or
by data transmission, using a variety of providers
of telecommunications services.
For any system used to transmit payment
orders that may result in the transfer of large
sums, however, a depository institution receiving the payment order should be responsible for
verifying the authenticity and the content of the
payment order before acting on it. A proposed
new Article 4A to the Uniform Commercial Code
makes it clear that depository institutions are
liable if they act on unauthorized payment orders
unless they use commercially reasonable security procedures. In some cases, a receiving bank
may have sufficient confidence in the controls
and the integrity of the system through which it
receives payment orders to rely on this system's
authentication and verification procedures. In
other cases, a depository institution may wish to
verify and authenticate payment orders by means
of its own procedures.
We believe that the appropriate role of bank
supervisors is to ensure that depository institutions maintain adequate authentication and verification procedures and that they do not rely on
others to perform these critical functions without
assuring themselves that these functions are performed adequately. Ordinarily, the supervisory
focus should be on the institution receiving a
payment order rather than on a telecommunications system transmitting the order. When a
receiving depository institution relies on an authentication procedure provided by a telecommunications service provider, such as CHIPS,
we may need to be able to examine the communications systems on which they rely to assure
ourselves that depository institutions are not
delegating these functions inappropriately. At
the same time, however, we do not want to
encourage depository institutions to delegate
these functions to service providers merely because the service providers enjoy some degree of
federal oversight. We will continue to monitor
and evaluate bank reliance on telecommunications systems, including the S.W.I.F.T. system.
When we discover problems stemming from
banks' reliance on telecommunications systems
we will take steps to strengthen our supervisory
oversight and, when appropriate, coordinate any
regulatory activities with supervisory authorities
or central banks in other countries. We believe,
however, that the principal responsibility to authenticate payment orders lies with the banks
receiving these orders.
The subcommittee has also asked for the Federal Reserve's broader perspective on the importance of technology in the future of the international financial marketplace. We expect a
continuing and increasing reliance on automation
and communications to provide secure, reliable,
and efficient payment services. In our discussions with central bankers from other developed
nations, it is evident that their approach to using
advanced technologies for payment system applications is quite similar to that in the United
States. Most of the G-10 countries and Switzerland have state-of-the-art computer systems with
many of the features found in comparable U.S.
banking systems. These systems rely on sophisticated computer systems, sound test procedures, and advanced recovery features designed
to provide high availability. Generally, the same
technology used in the United States for encryption, physical security, and access control is
available in many other nations. As the cost
effectiveness of automation improves, the use of
advanced automation and communications technologies will continue to grow. Even today, the
technology is available to link international financial markets around the clock.
The benefits and promise of this advanced
technology, however, can only be achieved
through its careful management. As payment
systems become more reliant on sophisticated
technology to deliver basic functions, the consequences of a systems failure or security breach is
Statements to the Congress
215
expanded significantly. We believe that close attention by senior management to automation planning, disaster recovery, and security is essential.
In conclusion, we are confident in the security
architecture surrounding Fedwire and in this
system's ability to provide high reliability in a
secure environment. We appreciate the analysis
conducted by the GAO and, in most cases, we
agree with the findings and have moved quickly
to correct the problems that have been identified.
As I stated at the outset, the GAO's findings
represent an opportunity to tighten the implementation of a security program that we believe
is exceptionally sound.
•
Statement by Alan Greenspan, Chairman, Board
of Governors of the Federal Reserve System,
before the Committee on Banking, Housing, and
Urban Affairs, U.S. Senate, February 22, 1990.
the winter, but started down when signs of more
restrained aggregate demand and of reduced potential for higher inflation began to appear. As
midyear approached, a marked strengthening of
the dollar on foreign exchange markets further
diminished the threat of accelerating inflation.
New economic data suggested that the balance of
risks had shifted toward the possibility of an
undue weakening in economic activity. With M2
and M3 below the lower bounds of their annual
ranges in the spring, the Federal Reserve in June
embarked on a series of measured easing steps
that continued through late last year. Across the
maturity spectrum, interest rates declined further, to levels about 1 Vi percentage points below
March peaks. Reductions in inflation expectations and reports of a softer economy evidently
contributed to the drop in rates in longer-term
markets.
The decrease in short-term rates lifted M2 to
around the middle of its annual range in the latter
part of the year. Efforts under the Financial
Institutions Reform, Recovery, and Enforcement
Act (FIRREA) of 1989 to close insolvent thrift
institutions and strengthen undercapitalized
thrift institutions led to a cutback of the industry's assets and funding needs. This behavior
held down M3 growth in the second half of the
year, and that aggregate ended the year around
the lower end of its annual range. The restructuring of the thrift industry did not, however,
seem to appreciably affect the overall cost and
availability of residential mortgage credit, as
other suppliers of this credit stepped into the
breach. In the aggregate, the debt of nonfinancial
sectors slowed somewhat, along with spending,
to a rate just below the midpoint of its annual
range.
So far this year, the federal funds rate has
remained around 8V4 percent, but rates on Trea-
I appreciate the opportunity to testify today on
the Federal Reserve's semiannual Monetary
Policy Report to the Congress. 1 My prepared
remarks discuss our monetary policy actions
and plans in the context not only of the current
and projected state of the economy, but also
against the background of our longer-term objectives and strategy for achieving them. The
testimony also addresses some issues for monetary policy raised by the increasingly international character of financial markets.
ECONOMIC AND MONETARY
DEVELOPMENTS IN 1989
POLICY
Last year marked the seventh year of the longest peacetime expansion of the U.S. economy
on record. Some 2Vz million jobs were created,
and the civilian unemployment rate held steady
at 5V4 percent. Inflation was held to a rate no
faster than that in recent years, but unfortunately no progress was made in 1989 toward
price stability. Thus, while we can look back
with satisfaction at the economic progress made
last year, there is still important work to be
done.
About a year ago, Federal Reserve policy was
in the final phase of a period of gradual tightening, designed to inhibit a buildup of inflation
pressures. Interest rates moved higher through
1. See "Monetary Policy Report to the Congress," Federal
Reserve Bulletin, vol. 76 (March 1990), pp. 107-19.
216 Federal Reserve Bulletin • April 1990
sury securities and longer-term private instruments have reversed some of their earlier declines. Investors have reacted to economic data
that were stronger than expected, a runup in
energy prices, and increasingly attractive investment opportunities abroad, especially in Europe.
THE ULTIMATE OBJECTIVES
MEDIUM-TERM
STRATEGY
OF MONETARY
POLICY
AND
Monetary policy was conducted again last year
with an eye on long-run policy goals, and economic developments in 1989 were consistent
with the Federal Reserve's medium-term strategy for reaching them. The ultimate objective of
economic policy is to foster the maximum sustainable rate of economic growth. This outcome
depends on market mechanisms that provide
incentives for economic progress by encouraging
creativity, innovation, saving, and investment.
Markets perform these tasks most effectively
when individuals can reasonably believe that by
forgoing consumption or leisure in the present
they can reap adequate rewards in the future.
Inflation insidiously undermines such confidence. It raises doubts in people's minds about
the future real value of their nominal savings and
earnings, and it distorts decisionmaking. Faced
with inflation, investors are more likely to divert
their attention to protecting the near-term purchasing power of their wealth. Modern day examples of economies stunted by rapid inflation
are instructive. In countries with high rates of
inflation, people tend to put their savings in
foreign currencies and commodities rather than
in the financial investments and claims on productive assets that can best foster domestic
growth. By ensuring stable prices, monetary
policy can play its most important role in promoting economic progress.
The strategy of the Federal Open Market Committee (FOMC) for moving toward this goal
remains the same—to restrain growth in money
and aggregate demand in coming years enough to
establish a clear downward tilt to the trend of
inflation and inflation expectations, while avoiding a recession. Approaching price stability may
involve a period of expansion in activity at a rate
below the growth in the economy's potential,
thereby relieving pressures on resources. Once
some slack develops, real output growth can pick
up to around its potential growth rate, even as
inflation continues to trend down. Later, as price
stability is approached, real output growth can
move still higher, until full resource utilization is
restored.
While these are the general principles, no one
can be certain what path for the economy would,
in practice, accompany the gradual approach to
price stability. One key element that would minimize the costs associated with the transition
would be a conviction of participants in the
economy that the anti-inflation policy is credible,
that is, likely to be effective and unlikely to be
reversed.
Stability of the general price level will yield
important long-run benefits. Nominal interest
rates will be reduced with the disappearance of
expectations of inflation, and real interest rates
likely will be lower as well, as less uncertainty
about the future behavior of overall prices induces a greater willingness to save. Higher saving and capital accumulation will enhance productivity, and the trend growth in real GNP will
be greater than would be possible if the recent
inflation rate continued.
If past patterns of monetary behavior persist,
maintaining price stability will require an average
rate of M2 growth over time approximately equal
to the trend growth in output. During the transition, the decline of market interest rates in response to the moderation in inflation would boost
the public's demand for M2 relative to nominal
spending, lowering M2 velocity. M2 growth over
several years accordingly may show little deceleration, and it could actually speed up from time
to time, as interest rates decline in fits and starts.
Hence, the FOMC would not expect to lower its
M2 range mechanically each and every year in
the transition to price stability.
This qualitative description of our mediumterm strategy is easy to state, but actually implementing it will be difficult. Unexpected developments no doubt will require flexible policy
responses. Any such adjustments will not imply a
retreat from the medium-term strategy or from
ultimate policy goals. Rather, they will be midcourse corrections that attempt to keep the econ-
Statements to the Congress
omy and prices on track. The easing of reserve
pressures starting last June is a case in point.
Successive FOMC decisions to ease operating
policy were intended to forestall an economic
downturn, the chances of which seemed to be
increasing as the balance of risks shifted away
from greater inflation. The FOMC was in no way
abandoning its long-run goal of price stability.
Instead, it sought financial conditions that would
support the moderate economic expansion
judged to be consistent with progress toward
stable prices. In the event, output growth was
sustained last year, although in the fourth quarter
a major strike at Boeing, combined with the first
round of production cuts in the auto industry,
accentuated the underlying slowdown. On the
inflation side, price increases in the second half
were appreciably lower than those in the first.
Although the CPI for January, as expected,
showed a sizable jump in energy and food prices
in the wake of December's cold snap, a reversal
is apparently under way.
MONETARY POLICY AND
THE ECONOMIC OUTLOOK FOR 1990
Against this background, the Federal Reserve
Governors and the Presidents of the Reserve
Banks foresee continued moderate economic expansion over 1990, consistent with conditions
that will foster progress toward price stability
over time. At its meeting earlier this month, the
FOMC selected ranges for growth in money and
debt that it believes will promote this outcome.
My testimony last July indicated the very preliminary nature of the tentative ranges chosen for
1990, given the uncertain outlook for the economy, financial conditions, and appropriate growth
of money and debt. With the economic situation
not materially different from what was anticipated
at that time, the FOMC reaffirmed the tentative
growth range of 3 percent to 7 percent for M2 in
1990 that it set last July. This range, which is the
same as that used in 1989, is expected by most
FOMC members to produce somewhat slower
growth in nominal GNP this year. The declines in
short-term interest rates through late last year can
be expected to continue to boost the public's
demands for liquid balances in M2, at least for a
217
while longer. M2 growth over 1990 thus may be
faster than in recent years, and M2 velocity could
well decline over the four quarters of the year,
absent a pronounced firming in short-term market
interest rates.
In contrast to M2, the range for M3 has been
reduced from its tentative range set last July. The
new M3 range of 2Vi percent to 6V2 percent is
intended to embody the same degree of restraint
as the M2 range, but it was lowered to reflect the
continued decline in thrift assets and funding
needs now anticipated to accompany the ongoing
restructuring of the thrift industry. This asset
runoff began in earnest in the second half of last
year, so its magnitude was not incorporated into
the tentative M3 range for 1990 set last July. The
bulk of the mortgage and real estate assets that
thrift institutions will shed are expected to be
acquired by the Resolution Trust Corporation
and diversified investors other than depository
institutions. Such assets thus will no longer be
financed by monetary instruments included in
M3. In addition, commercial banks are likely to
be more cautious in their lending activities, reducing their need to issue wholesale managed
liabilities included in M3. These influences
should retard the growth of M3 relative to M2
again this year.
The debt of domestic nonfinancial sectors is
expected to decelerate along with nominal GNP
for a fourth straight year, and the Committee
chose to lower the monitoring range for this
aggregate to 5 percent to 9 percent for 1990.
Merger and acquisition activity has retreated
from the feverish pace of recent years, reflecting
some well-publicized difficulties of restructured
firms and more caution on the part of creditors.
All other things equal, less restructuring activity
and greater use of equity finance imply reduced
corporate borrowing. An ebbing of growth in
household debt also seems probable.
Over the last decade, money and debt aggregates have become less reliable guides for the
Federal Reserve in conducting policy. The velocities of the aggregates have ranged widely from
one quarter or one year to the next, in response
to interest rate movements and special factors. In
the coming year, the effects of the contraction of
the thrift industry on the velocity of M3, and to a
lesser extent on that of M2, are especially dif-
218 Federal Reserve Bulletin • April 1990
ficult to predict. While recognizing that the
growth rates of the broader monetary aggregates
over long periods are still good indicators of
trends in inflation, the FOMC will continue to
take an array of factors into account in guiding
operating policy. Information about emerging
patterns of inflationary pressure, business activity, and conditions in domestic and international
financial markets again will need to supplement
monetary data in providing the background for
decisions about the appropriate operating stance.
The Committee's best judgment is that money
and debt growth within these annual ranges will
be compatible with a moderation in the expansion of nominal GNP. Most FOMC members and
other Reserve Bank presidents foresee real GNP
growing V>h percent to 2 percent over the year as
a whole. Such a rate would be around last year's
moderate pace, excluding the rebound in agricultural output from the 1988 drought. A slight
easing of pressures on resources probably is in
store. Inflation pressures should remain contained, even though the decline in the dollar's
value over the past half year likely will reverse
some of the beneficial effects on domestic inflation stemming from the dollar's earlier appreciation. The CPI this year is projected to increase 4
percent to Wi percent, as compared with last
year's AVI percent.
RISKS TO THE ECONOMIC
OUTLOOK
Experience has shown such macroeconomic
forecasts to be subject to a variety of risks.
Assessing the balance of risks between production shortfalls and inflation pressures in the current outlook is complicated by several crosscurrents in the domestic and international economic
and financial situation.
One risk is that the weakness in economic
activity evident around year-end may tend to
cumulate, causing members' forecasts about production and employment this year to be overly
optimistic. However, available indicators of
near-term economic performance suggest that
the weakest point may have passed. The inventory correction in the auto industry—a rapid one
involving a sharp reduction in motor vehicle
assemblies in January coupled with better motor
vehicle sales—seems to be largely behind us.
Industrial activity outside of motor vehicles appears to be holding up. Production of business
equipment, when evidence has accumulated of
some stability—if not an increase—in orders for
capital goods, is likely to support manufacturing
output in coming months. Housing starts were
depressed in December by severely cold weather
in much of the country. But starts bounced back
strongly in January, in line with the large gain in
construction employment last month. From
these and similar data, one can infer the beginnings of a modest firming in economic activity.
While we cannot be certain that we are as yet out
of the recessionary woods, such evidence warrants at least guarded optimism.
There are, however, other undercurrents that
continue to signal caution. One that could disturb
the sustainability of the current economic expansion has been the recent substantial deterioration
in profit margins. A continuation of this trend
could seriously undercut the still expanding capital goods market. However, if current signs of
an upturn in economic activity broaden, profit
margins can be expected to stabilize.
A more deep-seated concern with respect to
the longer-run viability of the expansion is the
increase in debt leverage. Although the trends of
income and cash flow may have turned the
corner, the structure of the economy's financial
balance sheet weighs increasingly heavily on the
dynamics of economic expansion. In recent
years, business debt burdens have been enlarged
through corporate restructurings, and as a consequence interest costs as a percent of cash flow
have risen markedly. Responding to certain wellpublicized, debt-servicing problems, creditors
have become more selective in committing funds
for these purposes. Within the banking industry, credit standards have been tightened for
merger and leveraged buyout (LBO) loans, as
well as for some other business customers.
Credit for construction projects reportedly has
become less available because of limits imposed
by the FIRREA and heightened concerns about
overbuilding in a number of real estate markets.
Among households, too, debt-servicing burdens have risen to historic highs relative to
income, and delinquency rates have moved up of
late. Suppliers of consumer and mortgage credit
Statements to the Congress
appear to have tightened lending terms a little.
Real estate values have softened in some locales,
although prices have maintained an uptrend in
terms of the national averages, especially for
single-family residences. These and other financial forces merit careful monitoring. While welcome from a supervisory perspective, more cautious lending does have the potential for damping
aggregate demand.
It is difficult to assess how serious a threat
increased leverage is to the current levels of
economic activity. Clearly, should the economy
fall into a recession, excess debt service costs
would intensify the problems of adjustment. But
it is unlikely that in current circumstances strains
coming from the economy's financial balance
sheet can themselves precipitate a downturn. As
I indicated earlier, we expect nonfinancial debt
growth to continue to slow from its frenetic pace
of the mid-1980s. This should lessen the strain
and hopefully the threat to the economy.
INTERNATIONAL
AND MONETARY
FINANCIAL
POLICY
MARKETS
Among other concerns, recent events have highlighted the complex interactions between developments in the U.S. economy and financial markets and those in the other major industrial
countries. Specifically, the parallel movements in
long-term interest rates here and abroad over the
early weeks of 1990 have raised questions: To
what extent is the U.S. economy subject to
influences from abroad? To what extent, as a
consequence, have we lost control over our
economic destiny? The simple answer to these
questions is that the U.S. economy is influenced
from abroad to a substantially greater degree
than, say, two or three decades ago, but U.S.
monetary policy is, nonetheless, able to carry out
its responsibilities effectively.
The postwar period has seen markedly closer
ties among the world's economies. Markets for
goods have become increasingly, and irreversibly,
integrated as a result of the downsizing of economic output and the consequent expansion of
international trade. The past decade, in particular,
also has witnessed the growing integration of
financial markets around the world. Advancing
219
technology has fostered the unbundling and transfer of risk and engendered a proliferation of new
financial products. Cross border financial flows
have accordingly accelerated at a pace in excess
of global trade gains. This globalization of financial markets has meant that events in one market
or in one country can affect within minutes developments in markets throughout the world.
More integrated and open financial markets
have enabled all countries to reap the benefits of
enhanced competition and improved allocation
of capital. Our businesses can raise funds almost
anywhere in the world. Our savers can choose
from a lengthening menu of investments as they
seek the highest possible return on their funds.
Our financial institutions enjoy wider opportunities to compete.
In such an environment, a change in the expected rate of return on financial assets abroad
naturally can affect the actions of borrowers or
lenders in the United States. In response, exchange rates, asset prices, and rates of return all
may adjust to new values.
Strengthened linkages among world financial
markets affect all markets and all investors. Just
as U.S. markets are influenced by developments
in markets abroad, foreign markets are influenced by events here. These channels of influence do not depend on whether a country is
experiencing a deficit or a surplus in its current
account. In today's financial markets, the net
flows associated with current account surpluses
and deficits are only the tip of the iceberg. What
are more important are the huge stocks of financial claims—more than $1.5 trillion held in the
United States by foreigners and more than $26
trillion of dollar-denominated claims on U.S.
borrowers held by U.S. residents. This is in
addition to the vast quantities of assets held in
foreign currencies abroad. It is these holdings
that can respond to changes in actual and expected rates of return.
In recent years we have seen several instances
in which rates of return have changed essentially
simultaneously around the world. For example,
stock prices moved together in October 1987 and
1989, and in 1990 bond yields have risen markedly in many industrial countries.
However, we must be cautious in interpreting
such events, and in drawing implications for the
220
Federal Reserve Bulletin • April 1990
United States. Frequently, such movements occur in response to a common worldwide influence.
Currently, the world economy is adjusting to the
implications of changes in Eastern Europe, where
there are tremendous new opportunities to invest
and to promote reconstruction and growth. Those
opportunities, while contributing to the increase
in interest rates in the United States, also open up
new markets for our exports.
Moreover, despite globalization, financial markets do not necessarily move together—they also
respond to more localized influences. Over 1989,
for example, bond yields in West Germany and
Japan rose about a percentage point, while those
in the United States fell by a similar amount. The
contrast between 1989 and 1990 illustrates the
complexity of relationships among financial markets. Interactions can show through in movements in exchange rates as well as interest rates,
and changes in the relative prices of assets depend on a variety of factors, including economic
developments and inflation expectations in various countries as well as monetary and fiscal
policies here and abroad.
The importance of foreign economic policies
for domestic economic conditions has given rise
in recent years to a formalized process of policy
coordination among the major industrial countries. The purpose of such coordination is to help
policymakers achieve better performance in their
national economies. It begins with improved
communication among authorities about economic developments within each country. It includes systematic analysis of the likely impact of
these developments on the economies of the
partner countries and on variables such as exchange rates that are inherently jointly determined in international markets. Within such a
framework, it is possible to consider alternative
choices for economic policies and to account
explicitly for the impacts of likely policy measures in one country on the other economies.
The influence of economic policies abroad and
other foreign developments on the U.S. economy
is profound, and the Federal Reserve must carefully take them into account when considering its
monetary policy. But these influences do not
fundamentally constrain our ability to meet our
most important monetary policy objectives. Developments within U.S. financial markets remain
the strongest influence on the asset prices and
interest rates determined by those markets and,
through them, on the U.S. economy. Exchange
rates absorb much of the impact of developments
in foreign asset markets, permitting U.S. interest
rates to reflect primarily domestic economic conditions. Exchange rates influence the prices of
products that do, or can, enter into international
trade. Such factors can bring about changes in
the composition of production between purely
domestic goods and services and those entering
international trade, and they can affect aggregate
price movements for a time.
However, the overall pace of spending and
output in the United States depends on the demands upon all sectors of the U.S. economy taken
together. And our inflation rate, over time, depends on the strength of those demands relative to
our ability to supply them out of domestic production. Because the Federal Reserve is able to affect
short-term interest rates in U.S. financial markets,
it is able to influence the pace of economic activity
in the short run and inflationary pressures longer
term. To be sure, monetary policy must currently
balance more factors than in previous decades.
But our goals are still achievable.
Monetary policy is only one tool, however,
and it cannot be used successfully to meet multiple objectives. The Federal Reserve, for example, can address itself to either domestic prices or
exchange rates but cannot be expected to
achieve objectives for both simultaneously.
Monetary policy alone is not readily capable of
addressing today's large current account deficit,
which is symptomatic of underlying imbalances
among saving, spending, and production within
the U.S. economy. Continued progress in reducing the federal deficit is a more appropriate
instrument to raise domestic saving and free
additional resources for productive investment.
The long-term health of our economy requires
the balanced use of monetary and fiscal policy to
reach all of the nation's policy objectives.
CONSIDERATIONS
REGARDING
IMMEDIATE RELEASE OF FOMC
OPERATING DECISIONS
Finally, you requested that I address an issue
that has been prominent in recent discussions of
Statements to the Congress
the procedures used to implement policy on a
day-to-day basis. I refer to the way the Federal
Reserve communicates its policy decisions to
the public. The selection of money and debt
ranges is aired promptly and thoroughly in the
semiannual reports and testimonies. Changes in
the discount rate are immediately announced in
a press release.
Decisions made about open market operations at and between FOMC meetings are conveyed to the markets and to the public at large
through those operations. In practice, there is
little lag between a discrete change in operating
policy and the wide recognition of that change,
despite the absence of an immediate public
announcement. Guidance for those operations
is given to the Account Manager at the Federal
Reserve Bank of New York as a Directive,
which is made public shortly after the next
FOMC meeting, six to seven weeks later.
Suggestions have been made that we release
the Directive immediately after an FOMC meeting, or announce publicly any change in our
operating objectives as it occurs. These suggestions have appeal: Surely more information is
better than less in promoting efficient financial
markets; and the need to infer the Federal
Reserve's policy stance from its actions can
give rise to mistakes and unnecessary market
volatility.
Yet the amount of genuine new information
that would be released is small; it is subject to
misinterpretations; and its premature announcement could adversely affect the policy
process.
For example, the Directive itself cannot capture all the considerations that guide Committee
policy for the intermeeting period. It needs to
be accompanied by the record of the Committee's deliberations, which takes several weeks
to prepare properly. Moreover, early release
could provoke overreactions in financial markets to contingencies or reserve pressure alternatives mentioned in a Directive that may not
occur, or that may be superseded by intermeeting developments and adjustments. To the extent that market participants anticipate contingencies in the Directive that never materialize,
the markets would be subjected to unnecessary
volatility.
221
Earlier release of the Directive would, in
addition, force the Committee itself to focus on
the market impact of the announcement as well
as on the ultimate economic impact of its actions. To avoid premature market reaction to
mere contingencies, FOMC decisions could
well lose their conditional character. Given the
uncertainties in economic forecasts and in the
links between monetary policy actions and economic outcomes, such an impairment of flexibility in the evolution of policy would be undesirable.
Wide movements in bond and stock prices
occur when investors receive new information
that significantly alters their expectations over
a relatively long-term horizon. Normally,
changing perceptions about the current operating stance of monetary policy play only a minor
role in episodes of financial variability. For
example, over the last two months, U.S. bond
and stock prices fell appreciably on balance,
with fairly wide day-to-day and even intraday
swings, but there was no uncertainty or change
of view about the current stance of operating
policy. To the extent that any of these market
movements reflected policy, they must have
been reactions to prospective changes in policy.
But announcements of future changes in operating policy are not possible, since they are
contingent upon future economic developments.
Changes in our current operating stance, of
course, have the potential to alter anticipations
of future conditions, including future policy. At
times, monetary policymakers wish to
strengthen the market's sense of a more basic
change in the thrust of policy through an announcement effect, as well as through a change
in the instrument itself. Changes in the discount
rate provide good examples.
More often, however, the Federal Reserve
judges that policy implementation is better
served through small, incremental operating
moves that do not connote a significant alteration in policy intent and do not have major
implications for financial conditions in the more
distant future. Signaling such policy moves
through open market operations usually avoids
major and potentially destabilizing movements
in bond and stock prices.
222 Federal Reserve Bulletin • April 1990
This way of distinguishing the nature of policy intent may well convey information to the
financial markets about the future direction
of policy
immediate
change.
better than would a formal,
announcement of every policy
•
Chairman Greenspan presented similar testimony before the Subcommittee on Domestic Monetary
Policy of the House Committee on Banking, Finance and Urban Affairs, February 20, 1990.
Statement by Alan Greenspan, Chairman, Board
of Governors of the Federal Reserve System,
before the Committee on Finance, U.S. Senate,
February 27, 1990.
I am pleased to be here today to discuss the
government's role in providing retirement security to present and future generations—an issue
that has moved to the forefront of the policy
debate. Senator Moynihan has introduced legislation to cut payroll taxes and return social
security to a pay-as-you-go basis, and others
would like to move its finances fully off budget.
In large part, such proposals arise out of
frustration with the slow pace of deficit reduction, and they have helped to dramatize the
seriousness of the current budget situation. But I
am concerned that they will ultimately be counterproductive and hamper the efforts needed to
meet our longer-term fiscal responsibilities. And,
as I hope to make clear, they will increase the
difficulty of providing for the needs of an aging
population in a way that is equitable across
generations. I shall address, in particular, how
the social security system can contribute to those
objectives; this issue was a main focus of the
National Commission on Social Security Reform
in the early 1980s. I shall also touch on the
relationship of social security to the rest of the
budget and its role in the setting of overall budget
goals.
I have testified often before committees of the
Congress about the corrosive effects that sustained large budget deficits have on the economy
and about the way our economic prospects in
coming years will hinge on our ability to increase
national saving and investment. One factor that
argues for running sizable budget surpluses by
later this decade is the need to set aside re-
sources to meet the retirement needs of today's
working population. Although the share of the
total population that is in the labor force has risen
steadily over the past few decades, that percentage will shrink considerably after the turn of the
century as members of the so-called baby boom
generation begin to retire. Barring a sharp upturn
in the birth rate, a large influx of immigrants, or
a significant increase in the age of retirement,
growth of the labor force will slow appreciably.
The demographics are compelling. In 1960,
there were twenty beneficiaries for every one
hundred workers contributing to social security;
currently there are thirty. The Social Security
Administration—under intermediate economic
and demographic assumptions—expects that
number to approach fifty by about the year 2025
and to remain at that level at least through the
middle of the twenty-first century.
Assuming their living standards keep pace with
those of the working population, the elderly will
of necessity consume a growing proportion of
total output in the future. They will finance their
consumption out of private and public pensions
and by drawing down their own assets. Nonetheless, the goods and services they buy can only
come from the output of then-active workers.
The allocation of production to meet the needs of
retirees necessarily will cut into what is available
for consumption by the rest of the population and
for investment in new equipment and structures.
We can do little to change the demographic
forces. We can, however, take actions now that
will help to lift the size of future output above
that implied by the current pace of capital formation and the trend in productivity. Such actions
will improve the likelihood that future workers
can maintain their living standards while satisfying the retirement expectations of current work-
Statements to the Congress
ers. Your decisions will also influence how much
of the burden of its retirement the baby boom
cohort will shoulder for itself and how much will
fall on its children. Indeed, this is one of the few
instances in which policymakers have had the
luxury of being able to foresee a problem that a
thoughtful policy response might ameliorate.
Thus far, I believe, the plan for social security,
given the conflicting political pressures, has been
reasonable.
One element in the strategy is the accumulation of sizable balances in the social security
trust funds over the next few decades. As you
know, before the Social Security Amendments of
1977, the system operated, in effect, on a payas-you-go basis. The 1977 amendments set in
motion an accumulation of trust fund assets that
can be drawn down as required to meet the
retirement needs of today's workers. This shift
toward a funded system was given careful further
consideration by the National Commission on
Social Security Reform in the early 1980s.
The deliberations of the commission identified
several complex issues. They included difficult
questions of equity within and across generations
and assessments of the effects social security has
on incentives to work and save. We recognized,
too, the political riskiness of accumulating large
surpluses. On the whole, however, we concluded
that each cohort of workers and their employers
should make contributions into a fund that, with
interest, at least approached the actuarial value
of the benefits the workers will eventually receive. Notably, this requirement forces today's
workers—including the baby boomers—to pay
more in payroll taxes than is needed to cover the
benefits of the relatively small group of current
beneficiaries, so that sizable surpluses build up in
the trust funds. In essence, the commission reaffirmed the intent of the 1977 amendments; our
recommendations were largely accepted by the
Congress and hence shaped the legislation of
1983. The current structure of social security
may not be appropriate in all circumstances. But,
at present, it is still the best option.
One reason to build surpluses in the trust funds
is to set aside saving, and thus to divert part of
the nation's current production away from consumption—both private and public. Assuming, of
course, that the surpluses are not offset by re
223
ductions in the saving of households and businesses or by larger dissaving, that is, deficits,
elsewhere in the federal budget, they should
boost investment and thus foster the growth of
the nation's capital stock. And with more capital
per worker than would otherwise be in place,
productive capacity will be greater, and we will
be better able to fulfill our promises to the
retirees, while maintaining the standard of living
of future workers.
The relationships among saving, the aggregate
capital stock, and labor productivity are complex
and difficult to pin down quantitatively, in part,
because productivity depends not only on the
amount of physical capital but on factors such as
the education and skill level of the work force
and the rate of technological progress. Nonetheless, I have little doubt that a larger, more
modern capital stock will improve labor productivity and hence overall real income levels in
coming years.
Building surpluses in the trust funds also contributes to fairness across generations. Given the
demographics, the generation after the baby
boomers will have to shoulder a fairly heavy
burden to meet the retirement claims of their
parents. This burden can be ameliorated only if
current workers save enough during their working years to fund, in effect, their own retirement.
Saving today will not reduce the share of GNP
that will be transferred to retirees tomorrow;
however, current saving directed toward capital
formation will help to ensure that overall incomes in the future will be large enough to
provide benefits to retirees without denting the
standards of living of their children too deeply, if
at all. The current social security system, when
used properly, has such a focus and affords an
opportunity for today's workers to lighten the
burden on the workers of the next generation.
Pay-as-you-go financing does not have that
focus. Rather, each year, workers and employers
contribute only enough to cover the cost of
providing benefits to current recipients and to
maintain a contingency reserve sufficient to carry
the system through periods of poor economic
performance. Thus, returning to pay as you go
now would confer a significant windfall on the
baby boomers who, in effect, would benefit doubly from the size of their age cohort. Given their
224
Federal Reserve Bulletin • April 1990
numbers, each would make a disproportionately
small contribution during his or her working
years to the retirement of their elders. Yet in
retirement, each would expect to receive full
benefits, which could come only at a disproportionately high cost to their children. At that time,
pressures may well emerge to stretch out benefits
by, for example, increasing the retirement age to
reflect rising life expectancies.
Linking an individual's benefits to his or her
contributions has generally been considered equitable and desirable. Under the present system,
the current generation of workers and the next
will face the same Old Age, Survivors, and
Disability Insurance (OASDI) tax rate of 12.4
percent, summing the employee and the employer shares. Assuming that benefits evolve
according to existing laws—and that social security revenues are set aside, rather than used to
lower other taxes or raise other outlays—the
system moves in the direction of actuarial soundness; it confers no windfall gains or unforeseen
losses on any particular generation. Accordingly,
it offers some assurance to current and future
workers that the government will keep its promises.
Senator Moynihan's proposal cuts the
OASDI tax rate to 10.2 percent of covered
wages in the 1990s. However, as his bill makes
clear, with pay as you go, rates will have to rise
sharply once the baby boomers begin to retire;
the proposed rate for the years 2025 through
2044, for example, is 15.4 percent. Support for
the system may well erode when the next generation is asked to take on a tax bill that their
parents were unwilling—or too shortsighted—to
assume during their own working years.
The choice of financing mechanism can also
influence the mix of federal taxes. Indeed, the
increase in the share of payroll taxes in total
revenues—and the regressiveness of these taxes—is frequently cited as a reason to return to
pay-as-you-go financing. However, looking at just
the tax side presents an overly narrow view of the
relationship between social security and the distribution of income in the United States. When
considered from the perspective of an individual's
lifetime—and when the formula for benefits as
well as contributions is taken into account—social
security clearly appears progressive.
The numbers are striking. Consider individuals
who retire this year at age sixty-five after working forty years. All anticipate receiving a benefits
annuity that equals or exceeds in pre sent-value
terms the sum of lifetime social security contributions plus accumulated interest. The return for
low-income workers, however, is especially
great. In fact, the average minimum-wage worker
can expect benefits that—relative to contributions—are roughly one and one-half to two times
as large as those received by persons with aboveaverage earnings.
In any event, although the current system
assigns them a leading role in providing retirement incomes in coming decades, the trust funds
are only part of the story. In reality, the social
security reserves are merely a bookkeeping entry
within the federal sector. Ultimately, their size
matters only to the extent that they lead to
smaller overall federal budget deficits—or larger
total surpluses—and thus to higher national saving than would otherwise be the case.
At present, the contribution of the trust funds
to national saving is greatly diluted by the large
deficits in the rest of the budget. As long as the
non-social-security deficits remain sizable, Senator Moynihan and others are correct in pointing
out that we are doing little to solve the future
retirement problem. If, however, actions are
taken to bring the rest of the budget into balance,
the trust funds will no longer be financing current
government consumption, but will translate dollar for dollar into national saving.
Where in the total unified budget the saving
takes place—in social security or elsewhere—is
of secondary importance. What matters in terms
of reaching our longer-term growth objective is
the government's net contribution to national
saving. The important policy issue in the current
context, therefore, is whether any of the major
proposals regarding social security will help to
achieve that goal. For example, is the federal
government more likely to shift toward a position
of positive net saving if social security is returned
to pay-as-you-go financing? Given the large revenue loss implied by the plan, I think not.
Another proposal is to move the social security
system fully "off-budget," so that the trust funds
would be excluded from the official summary
budget figures and from the setting of deficit
Statements to the Congress
targets. Unlike Senator Moynihan's plan, a
switch in budget accounting systems in isolation
would not change the government's contribution
to national saving and thus would have no direct
effect on the economy. But the proposal raises
other concerns.
First, splitting off social security—or any other
program—would highlight a distinction that has
little macroeconomic or analytical significance.
Regardless of which numbers are reported, government saving or dissaving would continue to be
well approximated by the surplus or deficit in the
total federal budget as currently defined in the
National Income and Product Accounts, a close
variant of the total unified budget.
Moreover, the way budget numbers are presented can influence public perceptions of important fiscal issues and thus—for good or ill—shape
the debate among policymakers. As a consequence, methods of accounting and presentation
can play a role in determining the size of the
overall deficit or surplus. In particular, I fear that
adopting a system that draws attention to the
surpluses in the trust funds might foster the
illusion that we already are putting enough
money aside to meet future obligations. Furthermore, it would tend to remove social security
from the broader fiscal policy debate.
In large part, my concerns are grounded in
the analytical issues I discussed earlier. But
they are compounded by a technical factor that
affects the interpretation of the commonly cited
statistics on the social security trust funds. For
example, the Congressional Budget Office
(CBO) projects that the annual surplus in the
OASDI trust funds will increase from $66 billion in fiscal 1990 to $128 billion in fiscal 1995.
But, as the CBO points out, fully half of the
difference between those two figures is accounted for by the interest received on the trust
funds' holdings of government debt, which is
forecast to grow from $16 billion to $50 billion
over that period. The latter figure represents
nearly 0.7 percent of the GNP projected by the
CBO for that year. Moreover, in their report for
1989, the Social Security Board of Trustees
projects that ratio to rise to 1.3 percent of GNP
by the year 2030. Such intragovernmental interest payments are both an inflow to the trust
funds and an outlay from the general funds and
225
wash out when the accounts are consolidated.
But, because they result in an overstatement of
both the saving taking place in the trust funds
and the dissaving elsewhere, they can contribute to a significant misreading of saving trends
when either part of the budget is considered in
isolation.
The figures over longer time horizons are
even more dramatic, magnified by the wonders
of compound interest; but the story is much the
same. For example, the Social Security Trustees project that net inflows to the trust funds—
apart from interest—will remain at their current
level of about 1 percent of GNP over the next
twenty years, then turn sharply negative once
the baby boomers retire in force. However,
because of the surging interest payments, trust
fund assets will continue to grow for a time,
reaching a peak of about $12 trillion around the
year 2030. Excluding interest payments, those
assets will rise to only about $3 trillion around
the year 2020 before turning down. Thus, the
peak trust balance in 2030 will essentially represent interest receipts that are offset elsewhere
in the federal accounts. While the contribution
of social security to national saving is sizable—
over both the medium and the long term—it is
clearly much smaller than the conventional
calculations suggest.
More generally, I fear that moving away from
the unified budget concept will impede the
achievement of the sizable deficit reductions that
the nation so sorely needs. The arguments are
well known. Many of them center on social
security itself and on the inevitable pressures
that would develop to expand benefits or to cut
payroll taxes if the system were not subject to the
discipline of an overall deficit constraint. In the
absence of offsetting changes elsewhere in the
budget, such actions would reduce national saving and over time worsen the burden on the
generation after the baby boom.
Moreover, responsible budgeting requires a
comprehensive framework for setting priorities
and assessing competing claims on national resources. That function currently is filled by the
unified budget process. If deficit targets were to
be set exclusive of social security, they could be
met—at least in part—by moving related programs into the social security account or by
226 Federal Reserve Bulletin • April 1990
shifting other trust funds off the books. Such
actions would shrink the on-budget deficit but
would not reduce federal demands on private
saving or on credit markets.
Most important, we must not allow the choice
of a budget accounting system to divert attention from the pressing need for meaningful
deficit reduction. In other words, the Congress
must take actions to set the federal government's claim on saving—however the budget
deficit is measured—firmly on a downward
track. Making a serious commitment to eliminating the unified deficit within the foreseeable
future is an essential first step and meeting that
commitment will be a formidable challenge. But
it is just a first step. If households and businesses continue to save relatively little, then
the federal government should compensate by
moving its budget in the direction of greater
surplus.
Let me reiterate that the source of our fundamental budget problem is the persistence of
enormous deficits at a time when demoraphic trends call for increases in private and
government saving. Undoing a social security
system that is the result of many years of
careful consideration and compromise, in my
judgment, will not address our fundamental
policy
needs.
Indeed,
it
could
be
counterproductive.
•
Statement by Alan Greenspan, Chairman, Board
of Governors of the Federal Reserve System,
before the Committee on the Budget, U.S.
House of Representatives, February 28, 1990.
emerged an increasing risk of an undue weakening in economic activity. Consequently, the
Federal Reserve in June embarked on a series
of measured steps to ease reserve positions,
and those steps continued through late last
year. Interest rates, which had turned downward in the spring, declined further in the
second half of the year, to levels about 1 Vi
percentage points below March peaks. In the
event, output growth slowed from the unsustainable pace of the two previous years, but still
was sufficient to support the creation of 2Vi
million jobs and keep the civilian unemployment rate steady at 5lA percent. Inflation was
held to a rate no faster than that of recent years,
but unfortunately no progress was made in 1989
toward price stability.
The policy adjustments that we undertook
over the course of 1989 were more in the nature
of a midcourse correction, rather than a reflection of a fundamental shift in policy. Our more
basic goals and strategies remained unchanged
from what they had been in previous years. The
ultimate goal of monetary policy still is that of
ensuring price stability so as to promote the
maximum sustainable rate of economic growth.
Similarly, the strategy for moving toward this
goal still is that of restraining growth in money
and aggregate demand in coming years enough to
establish a clear downward tilt to the trend of
inflation and inflation expectations, while avoiding a recession.
I am pleased to have the opportunity to appear
before you once again. As you know, the Federal
Reserve's semiannual Monetary Policy Report to
the Congress, which was submitted to the Congress last week, provided an extensive picture
both of recent economic developments and of the
Federal Reserve's policy actions and intentions. 1
Rather than take you through the details of that
report this morning, I would like briefly to review
some of its main themes and then turn to some of
the specific budgetary issues that the committee
has asked me to address.
ECONOMIC AND MONETARY
DEVELOPMENTS IN 1989
POLICY
About a year ago, in early 1989, Federal Reserve policy was in the final phase of a period of
gradual tightening, designed to inhibit a buildup
of inflation pressures. However, as the year
progressed, the threat of accelerating inflation
seemed to diminish, and at the same time, there
1. See "Monetary Policy Report to the Congress," Federal
Reserve Bulletin, vol. 76 (March 1990), pp. 107-19.
Statements to the Congress
MONETARY POLICY AND THE ECONOMIC
OUTLOOK FOR 1990
Thus far in 1990, monetary policy basically has
stayed on an even keel, and the federal funds rate
has remained around 8V4 percent. Nonetheless,
the interest rates on Treasury securities and
longer-term private instruments have reversed,
on net, some of their earlier declines, reflecting
the reaction of investors to stronger-than-expected economic data, a firming of oil prices, and
the prospect of greater demands on world saving
to support development of the economies of
Eastern Europe.
In assessing the economic prospects for 1990
as a whole, the Federal Reserve Governors and
the Reserve Bank Presidents foresee continued
moderate economic expansion, consistent with
conditions that will foster progress toward price
stability over time. At its meeting earlier this
month, the Federal Open Market Committee
(FOMC) selected ranges for growth in money
and debt that it believes will promote this
outcome. In brief, the FOMC reaffirmed the
tentative growth range for M2 of 3 percent to 7
percent in 1990 that it set last July, and it
reduced the M3 targets from their tentative
range. The M2 range for 1990, which is the
same as that used in 1989, is expected by most
FOMC members to produce somewhat slower
growth in nominal GNP this year. The new M3
range of 2Vi percent to 6V2 percent is intended
to embody the same degree of restraint as the
M2 range, but it was lowered to reflect the
continued decline in thrift assets and funding
needs anticipated to accompany the ongoing
restructuring of the thrift industry. The monitoring range for debt was lowered from a range
of 6V2 percent to 10V2 percent in 1989 to a range
of 5 percent to 9 percent in 1990.
The overwhelming majority of the Committee
believes that money growth within these annual
ranges will be compatible with expansion of
nominal GNP in a range of 5V2 percent to 6V2
percent. Expectations of real GNP growth center on a range of PA percent to 2 percent over
the four quarters of the year. A slight easing of
pressures on resources probably is in store, and
inflation pressures should remain contained,
even though the decline in the dollar's value
227
since last summer likely will reverse some of
the beneficial effects on domestic inflation stemming from the dollar's earlier consumer appreciation. The consumer price index (CPI) this
year is projected to increase 4 percent to 4V2
percent, as compared with last year's rise of 4V2
percent.
RISKS TO THE ECONOMIC
OUTLOOK
Economic forecasting, of course, is not an
exact science, and at present, there are obvious
risks in the outlook. For example, it is possible
that the weakness in economic activity evident
around the turn of the year may tend to cumulate, causing members' forecasts about production and employment this year to be overly
optimistic. However, two major depressants of
growth now seem behind us: Boeing has returned to full-scale production after last fall's
long strike, and in January the auto industry
greatly reduced its inventory problems by
slashing production and boosting incentives to
customers.
Still, we shall need to remain attentive to the
risks posed in several areas in which the undercurrents have been troubling of late. Profit margins, for example, have deteriorated substantially in recent quarters, and a continuation of
this trend could seriously undercut the expansion
in capital investment.
Another concern is the increase in financial
leverage in the economy. In recent years, business debt burdens have been enlarged through
corporate restructurings, and as a consequence
interest costs as a percent of cash flow have risen
markedly. Among households, too, debtservicing burdens have risen to historic highs
relative to income, and delinquency rates have
moved up a bit. Clearly, should the economy fall
into a recession, excess debt-service costs would
intensify the problems of adjustment. While
these strains seem unlikely in themselves to
precipitate a downturn, they are nonetheless
worrisome. Fortunately, the growth of nonfinancial debt has slowed from its frenetic pace of the
mid-1980s, and a continuation of this recent
trend, along the lines that the FOMC is anticipating, should lessen the financial strains and, hopefully, the threat to the economy.
228 Federal Reserve Bulletin • April 1990
THE FEDERAL BUDGET DEFICIT AND
SOCIAL SECURITY
A risk in the longer-run outlook for the economy—and one that is closer to the day-to-day
work of this committee—is the possibility that
the federal government might fail to build upon
the progress that has been made to date in
moving toward reduced federal budget deficits
and eventually, I would hope, toward a position
of surplus.
I have testified often before committees of the
Congress about the adverse effects on our economy of sustained large budget deficits. Put simply, my central concern on this score is that
deficits cut into national saving and investment
and thereby limit our ability to expand and
upgrade the nation's stock of productive capital.
It is the size of that stock, together with the
quality of the labor force, that ultimately determines overall productive capacity and the future
standard of living of our population.
Unfortunately, much of the recent policy debate has shifted away from the budget deficit per
se, and toward the financing over time of the
nation's social security program. Senator Moynihan has introduced legislation to cut payroll
taxes and return the system to a pay-as-you-go
basis, and others would like to move its finances
fully off-budget. As I stated yesterday in my
testimony before the Senate Finance Committee,
I am concerned that these changes, if enacted,
will ultimately prove counterproductive and will
hamper the efforts needed to meet our longerterm fiscal responsibilities. They also would
likely increase the difficulty of providing for the
needs of an aging population in a way that is
equitable across generations. If I may frame the
issue in the most basic way: We need to save and
invest now to have the productive economy that
can support a rapidly growing population of
retirees two or three decades in the future; pay as
you go would not be supportive of that savinginvestment relationship, besides undermining the
notion of equity across generations.
The need to take a long view of the issue arises
from the compelling demographic trends that are
now in progress. In 1960, there were twenty
beneficiaries for every one hundred workers contributing to social security; currently there are
thirty. The Social Security Administration—under intermediate economic and demographic assumptions—expects that number to approach
fifty by about the year 2025 and to remain at that
level at least through the middle of the twentyfirst century. Assuming that their living standards keep pace with those of the working population, the elderly will of necessity consume a
growing proportion of total output in the future.
They will finance their consumption out of private and public pensions and by drawing down
their own assets. Nonetheless, the goods and
services they buy can only come from the output
of then-active workers, whose productivity will
depend on the investments that we make in
capital and new technologies in the interim.
Investment is possible, of course, only if there
is saving—the diversion of part of the nation's
current production away from consumption,
both private and public. The present buildup in
the social security trust funds is one source of the
needed saving. While, in a sense, these funds
exist on paper only, they also are very real claims
on future taxpayers and hence on future real
output. All else constant, the accumulation of
saving in the trust funds increases the likelihood
that the real output will be available to meet the
needs of retirees without denting the living standards of their children too deeply, if at all. In
particular, to the extent that the surpluses are not
offset by reductions in the saving of households
and businesses or by larger dissaving, that is,
deficits, elsewhere in the federal budget, they
should boost investment and thus foster growth
of the nation's capital stock. And with more
capital per worker than would otherwise be in
place, productive capacity and output also will
be higher.
At present, the contribution of the trust funds
to national saving is being swamped by the large
deficits in the rest of the budget. As long as the
non-social-security deficits remain sizable, Senator Moynihan and others are correct in pointing out that we are doing little to solve the
future retirement problem. If, however, actions
are taken to bring the non-social-security part
of the budget into balance, the trust funds no
longer will be financing current government
spending, but will translate dollar for dollar into
national saving.
Statements to the Congress
Ultimately, when saving takes place in the
total unified budget—social security or elsewhere—is of secondary importance. What matters in terms of reaching our longer-term growth
objective is the government's overall net contribution to national saving. Thus, a chief criterion
for evaluating the major proposals regarding social security should perhaps be whether they
would, in fact, help us to achieve the needed
saving and investment. For example, is the federal government more likely to shift toward a
position of positive net saving if social security is
returned to pay-as-you-go financing? Given the
large revenue loss implied by the plan, I think
not.
A second key criterion for evaluating the proposals is whether they meet the test of equity
across generations. Without going into great detail on this point, it would seem to me that the
pay-as-you-go proposal again falls short. Indeed,
returning now to pay-as-you-go financing would
confer a significant windfall on the baby boomers
who, in effect, would benefit doubly from the size
of their age cohort. Given their numbers, each
would make a disproportionately small contribution during his or her working years to the
retirement of their elders. Yet, in retirement,
each would expect to receive full benefits, which
could come only at a disproportionately high cost
to their children. The present structure, in my
view, is more likely to ensure that an individual's
contributions are linked equitably to his or her
benefits.
MOVING SOCIAL
"OFF-BUDGET"
SECURITY
I also have deep reservations about proposals
that would move the social security system fully
"off-budget," so that the trust funds would be
excluded from the official summary budget figures and from the setting of deficit targets. First,
splitting off social security—or any other program—would highlight a distinction that has little
macroeconomic or analytical significance.
Regardless of which numbers are reported, government saving or dissaving would continue to be
well approximated by the surplus or deficit in the
total federal budget as currently defined in the
229
National Income and Product Accounts, a close
variant of the total unified budget.
Second, the way budget numbers are presented can influence public perceptions of important fiscal issues and thereby—for good or ill—
play a role in decisions that affect the size of the
overall deficit or surplus. In particular, I fear that
adopting a system that draws attention to the
surpluses in the trust funds might foster the
illusion that saving already is great enough to
meet future obligations.
In large part, my concerns are grounded in the
analytical issues I discussed earlier. But they are
compounded by a technical factor, namely that
much of the growth in the trust funds is reflecting
interest received from the holdings of government debt. Such intragovernmental interest payments, which will approach 1 percent of GNP in
a few years, are both an inflow to the trust funds
and an outlay from the general funds, and they
wash out when the accounts are consolidated.
But, because they result in an overstatement of
both the saving taking place in the trust funds and
the dissaving elsewhere, they can contribute to a
significant misreading of saving trends when either part of the budget is considered in isolation.
Moreover, the very growth in anticipated social
security surpluses, in large part the result of
interest received, is mirrored in the increasing
interest costs and widening deficits projected in
the non-social-security part of the budget. The
implied deficit-reduction targets might then be
well out of political reach.
Accordingly, I fear that moving away from the
unified budget concept will impede the achievement of the sizable deficit reductions that the
country so sorely needs. In addition, the inevitable pressures to expand social security benefits
or cut payroll taxes if the system were not
subject to the discipline of an overall deficit
constraint would mount. In the absence of offsetting changes elsewhere in the budget, such
actions would reduce national saving and over
time worsen the burden on the generation after
the baby boom.
Responsible budgeting requires a comprehensive framework for setting priorities and assessing competing claims on national resources. That
function currently is filled by the unified budget
process. If deficit targets were to be set exclusive
230
Federal Reserve Bulletin • April 1990
of social security, for example, they could be
met—at least in part—by moving related programs into the social security account or by
shifting other trust funds off the books. Such
actions would shrink the on-budget deficit but
would not reduce federal demands on private
saving or on credit markets.
THE NEED FOR FURTHER
REDUCTION
DEFICIT
Most important, we must not allow the choice of
a budget accounting system to divert attention
from the pressing need for meaningful deficit
reduction, but rather must take actions to set the
federal government's claim on saving—however
the budget deficit is measured—on a firm downward track. Making a serious commitment to
eliminating the unified deficit within the foreseeable future is an essential first step, and meeting
that commitment will be a formidable challenge.
But it is just a first step. If households and
businesses continue to save relatively little, then
the federal government should compensate by
moving its budget in the direction of greater
surplus.
I would remind you, in closing, that budget
decisions often have been shaped by short-run
concerns and pressures. Those same decisions,
though, many times have had longer-run repercussions that were unintended or perhaps even
contrary to original intentions. I hope that in
your deliberations on the budget—and particularly in your actions on the social security
issue—you will give special attention to the
long-run needs of the economy. It is the process
of saving, investment, capital accumulation,
and rising productivity that largely will determine the economic prospects of the next generation. These goals will be fostered to the extent
that you keep us on the path toward reduced
government deficits and increased national
saving.
•
231
Announcements
PROPOSED
ACTIONS
The Federal Reserve Board issued for public
comment on February 6, 1990, a proposed regulation that would set standards for appraisals
conducted for state member banks and bank
holding companies in federally related transactions. Comments should be received by the
Board by April 10.
The Board also issued for public comment on
February 14, 1990, a proposed regulation providing interim procedures for notifying the Board of
changes in senior executive officers and directors
at bank holding companies and state member
banks that are newly chartered, undercapitalized, or in troubled condition. Comments are
requested by April 23, 1990.
HOTLINE TELEPHONE NUMBER
AVAILABLE FOR OFFICE OF THE
INSPECTOR GENERAL AT THE BOARD
The Office of Inspector General at the Board has
established a nationwide, toll-free hotline telephone number that can be used to report suspected cases of impropriety, wrongdoing, fraud,
or waste and abuse in programs and operations
administered or financed by the Board.
The hotline number is (800) 827-3340.
The Office may also be reached at the local
Washington number (202) 452-6400, or by writing
to the following address:
Office of Inspector General
Federal Reserve Board
Washington, D.C. 20551.
CHANGES IN BOARD
STAFF
The Board of Governors announced the following official staff actions, effective February 14,
1990:
Robert J. Zemel has been promoted from Assistant Director to Associate Director in the
Division of Applications Development and Statistical Services.
Marianne M: Emerson has been appointed
Assistant Director in the Office of Executive
Director for Information Resources Management.
Raymond H. Massey has been appointed Assistant Director in the Division of Applications
Development and Statistical Services.
Po Kyung Kim has been appointed Assistant
Director in the Division of Applications Development and Statistical Services.
Ms. Emerson joined the Board's staff in August 1982 and has rotated through several positions in Information Resources Management as a
manager. She holds a B.A. from Bryn Mawr
College and an M.S. in Computer Science from
the University of Maryland.
Mr. Massey joined the Board's staff in February 1971 and has held several positions in the
Division of Applications Development and Statistical Services and in the Division of Hardware
and Software Systems.
Mr. Kim joined the Board's staff in April 1977
and has held several managerial positions in the
Division of Applications Development and Statistical Services. He holds a B.A. in Economics
from the University of North Carolina.
SYSTEM MEMBERSHIP:
STATE BANKS
ADMISSION
OF
The following state bank was admitted to membership during the period from November 1,
1989, to January 31, 1990:
Pennsylvania
Troy
First Bank of Troy
233
Record of Policy Actions of the
Federal Open Market Committee
MEETING HELD ON DECEMBER 18-19,
1. Domestic Policy
1989
Directive
The information reviewed at this meeting suggested that economic activity was expanding
slowly in the fourth quarter, with the moderation
from earlier in the year only partly attributable to
strikes and other special factors. Abstracting
from these factors, the growth of final demands
had slowed, and the effects were especially evident in the manufacturing sector. By contrast,
growth of the service sector appeared to be well
sustained, and overall construction activity
seemed relatively firm. Broad measures of inflation indicated that prices had risen more slowly
on balance since midyear, partly reflecting sharp
reductions in energy prices; recent wage data
suggested no significant change in prevailing
trends.
Total nonfarm payroll employment rose appreciably in November after a small gain in October.
All of the November increase occurred at service, trade, and financial establishments. Job
losses continued in manufacturing, especially in
motor vehicle and related industries, but cutbacks were evident elsewhere, notably in electrical machinery. The civilian unemployment rate
edged up to 5.4 percent in November, its highest
level since January.
Industrial production rose slightly in November after a sizable decline in October that resulted from strike activity and other disruptions;
adjusting for these temporary influences, production was down slightly, on balance, in recent
months. Output of consumer goods declined in
November as production of durables other than
motor vehicles dropped sharply further. Output
of business equipment increased appreciably,
owing in part to a recovery in the production of
computers in the aftermath of the earthquake in
the San Francisco area. Total industrial capacity
utilization slipped a bit in November and was
nearly 1 Vi percent below its level a year earlier.
Nominal retail sales in November partially
retraced the sharp October decline; sales for the
month were little changed from the third-quarter
average, reflecting continued weakness in motor
vehicles. Outside of vehicles, sales rebounded
for a wide range of goods, especially for apparel
items. Housing starts declined in November as
construction of multifamily units fell back to
about the average pace that had prevailed since
April. However, for the October-November period, starts were up somewhat on average from
their third-quarter level because of a pickup in
single-family units.
Recent indicators of business capital spending
suggested a weakening in expenditures after a
substantial increase earlier in the year. Shipments of nondefense capital goods fell in October
for a second straight month. Part of the October
decline stemmed from the effects of the strike at
Boeing on shipments of aircraft; small declines
were widespread elsewhere, and a considerable
drop occurred in computing equipment. The orders data for October suggested continued weakness in equipment outlays in the near term.
Nonresidential construction activity posted another gain, led by a sizable increase in non-office
commercial construction; however, office vacancy rates, construction permits, and other indicators pointed to renewed weakness. Total
manufacturing and trade inventories rose in October at about the third-quarter pace. Accumulation of manufacturing inventories was moderate,
and stocks remained at relatively low levels
compared to shipments. Stocks at wholesalers
jumped but, in relation to sales, remained in the
middle of the range that has prevailed over the
past two years. Retail inventories fell appreciably in October, reflecting a large decline in auto
234
Federal Reserve Bulletin • April 1990
dealers' stocks. Excluding auto dealers, the retail
inventory-sales ratio increased in October to a
level well above its range over the past year.
The nominal U.S. merchandise trade deficit
widened appreciably in October from an upward
revised September rate. Much of the widening
reflected a sharp increase in imports of industrial
supplies, notably paper, steel, and textiles. The
value of exports showed a small increase for the
third straight month as larger shipments of automotive products and other industrial goods outweighed a substantial decline in exports of aircraft. Indicators of economic activity in the
major foreign industrial countries suggested a
mixed performance in the third quarter, although
growth remained fairly strong on balance. Economic growth appeared to have rebounded
strongly in Japan and, adjusted for special factors, to have remained firm in Germany.
Producer prices for finished goods edged down
in November after sizable increases in the previous two months and, on balance, had risen at
lower rates since midyear. Prices of finished
energy products, especially gasoline, fell
sharply; the drop more than offset a second
month of increases in finished food prices. Consumer prices excluding food and energy items
rose a little faster in October and November
than in other recent months. Over the OctoberNovember period, food prices were boosted by
sharp increases in dairy products, meats, and
fresh produce while the rise in energy prices was
held down by a net decline in the price of
gasoline. Average hourly earnings slipped in November, and the large increase initially reported
for October was revised downward. However,
the results of recent collective bargaining activity
suggested a continuation of the larger wage settlements evident earlier in the year.
At its meeting on November 14, the Committee had adopted a directive that called for maintaining the existing degree of pressure on reserve
positions and that provided for giving special
weight to potential developments that might require some easing during the intermeeting period. The availability of reserves had been eased
slightly earlier in November. With regard to the
intermeeting period ahead, the Committee had
agreed that slightly lesser reserve restraint would
be acceptable, or slightly greater reserve re-
straint might be acceptable, depending on progress toward price stability, the strength of the
business expansion, the behavior of the monetary aggregates, and developments in foreign
exchange and domestic financial markets. The
contemplated reserve conditions were expected
to be consistent with growth of M2 and M3 over
the period from September through December at
annual rates of about IVi percent and AVi percent
respectively.
In the period since the November meeting, the
Manager for Domestic Operations had directed
open market transactions toward maintaining an
unchanged degree of reserve availability. Conditions in reserve markets softened temporarily
around Thanksgiving when operations to meet
seasonal reserve needs were misread as signaling
a further easing of monetary policy. Over most of
the intermeeting period, however, federal funds
traded around 8V2 percent, the level prevailing at
the time of the mid-November meeting. Adjustment plus seasonal borrowing fell to an average
of around $150 million in the first half of December. To reflect a continuing decline in seasonal
borrowing, technical reductions were made at
the start of the intermeeting period and in the
second week of December in the assumed level
of adjustment plus seasonal borrowing used in
constructing the target paths for the provision of
reserves.
Against the background of an unchanged monetary policy and incoming information that generally was viewed as consistent with expectations of continuing but slow growth in economic
activity, most market interest rates changed little
on balance over the intermeeting period. Major
indexes of stock prices generally rose over the
period. In foreign exchange markets, the tradeweighted value of the dollar in terms of the other
G-10 currencies fell substantially despite some
easing of short-term interest rates in Germany
and Japan. The decline of the dollar primarily
reflected the buoyancy of the German mark as
exchange market participants interpreted political developments in Eastern Europe as having
favorable implications for the German economy.
The dollar declined somewhat less against other
European currencies linked to the mark in the
European Monetary System and was little
changed against the yen.
Record of Policy Actions of the Federal Open Market Committee
Growth of the broader monetary aggregates
accelerated somewhat further in November and
remained robust in early December, despite a
contraction in demand deposits that resulted in
considerably slower expansion of Ml. The expansion of M2 continued to reflect the effects of
earlier reductions in market interest rates and
related opportunity costs, and it seemed likely
that the velocity of M2 would decline substantially further in the fourth quarter. Assets of thrift
institutions and their associated funding needs
apparently continued to contract, keeping
growth of M3 below that of M2, but the decline
seemed to be at a reduced pace and in November
M3 grew at its fastest rate since the summer.
Through November, M2 had expanded at a pace
near the midpoint of the Committee's annual
range while M3 had grown at a rate a little above
the lower bound of its annual range.
The staff projection prepared for this meeting
continued to suggest that the economy would
expand at a reduced pace over the next several
quarters. Growth in the first quarter was expected to rebound from temporary disturbances
to production stemming from strike activity and
natural disasters in the fourth quarter, although
the extent of the rebound would be limited by
further reductions in the production of motor
vehicles in the early months of the year. Over the
remainder of 1990, a relatively moderate expansion in consumer spending was projected to be a
key factor in sustaining overall demand and
production. Business outlays for fixed investment also were expected to increase, but at a
much reduced pace in an environment of slow
revenue growth and deteriorating cash flows.
Housing construction was forecast to expand at a
relatively sluggish pace over the course of the
year. The projection continued to assume that
the federal budget deficit would decline moderately and that net exports would make little
contribution to domestic economic growth in
1990. Pressures on labor and other production
resources were expected to ease only marginally,
and the underlying trend of inflation was not
projected to change significantly.
In the Committee's discussion of the economic
situation and outlook, members emphasized that
signs of a weaker expansion had accumulated
and that the economy was likely to remain slug
235
gish at least over the near term. While most
members agreed that further economic growth
was a reasonable expectation for the year ahead,
several observed that recent developments suggested greater risks in the direction of a weaker
economic performance. These members expressed concern that problems in some sectors of
the economy such as motor vehicles and commercial and residential real estate might lead to
greater caution in credit extensions and overall
spending, especially given indications of some
deterioration in business confidence, and to more
widespread softening in the economy. Other
members saw more favorable prospects for some
strengthening of the expansion next year, though
they did not anticipate a strong rebound in economic activity. These members recognized that
there were imbalances in the economy, but they
felt that, among other developments, prevailing
patterns in orders and production, though softening, were not inconsistent with somewhat
faster economic growth once current difficulties
such as those in the automobile industry were
worked through and the effects of the monetary
policy easing over the past half year were felt
more fully. It also was noted that certain forward-looking indicators, including commodity
prices, monetary growth, foreign exchange rates,
and the Treasury yield curve, were consistent
with some pickup in economic expansion next
spring. With regard to the outlook for inflation,
those who believed the risks were on the side of
a weaker economy and less pressure on production resources generally saw favorable prospects
for further progress toward price stability next
year. Some of the members who expected a
somewhat stronger economy were less optimistic
about the extent of such progress, if any, but
they also believed that there was little risk of a
pickup in the underlying rate of inflation.
In the course of the Committee's discussion,
members reported more sluggish business conditions in a number of areas and some loss of
business confidence, but overall economic activity appeared to be continuing to grow in most, if
not all, parts of the country. With some notable
exceptions, manufacturing activity had moderated across the country, with particular weakness in the production of motor vehicles, other
durable consumer goods, and some types of
236 Federal Reserve Bulletin • April 1990
capital equipment. Members observed that conditions in the automobile industry probably
would continue to have a negative effect on
overall economic activity in the months ahead,
and some noted that the longer-term outlook was
difficult to predict because structural problems
related to changing demand patterns appeared to
be involved. Construction activity also was cited
as a source of weakness in many areas, though it
remained relatively robust in others. In general,
nonresidential construction seemed likely to be
damped by overcapacity in office and other commercial structures. Overall demand for new
housing appeared to be essentially flat, though
with considerable local variations, despite earlier
declines in mortgage interest rates. It was noted
that the availability of financing for the construction of housing appeared to have been reduced
by tighter supervisory regulations and some decrease in the number of traditional institutional
lenders to this industry. In addition, the availability of such financing appeared to have been
adversely affected by the weakness of real estate
markets in a number of areas and the large
resulting losses on loans.
On a more positive note, a number of members
commented that consumer spending was likely to
be sustained by continuing gains in incomes and
the ample liquid assets of households that were
available to support greater spending. Consumer
spending on services was likely to continue to
grow. The outlook for retail sales was somewhat
uncertain, including at this point the still very
limited information on holiday sales, but outside
the most depressed areas retailers appeared to be
relatively optimistic. The recent depreciation of
the dollar would tend over time to boost overall
demand and economic growth. More generally,
the recent slowing in the expansion could be
attributed in part to special or temporary factors
and to the lagged effects of the tightening of
monetary policy through early 1989. On the
whole, current demand conditions were not seen
by most members as suggesting a cumulative
weakening in the economy.
With regard to the outlook for inflation, the
views of the members continued to differ to some
extent. Several anticipated that little or no progress was likely to be made in reducing inflation
over the year ahead, in part because the effects of
the recent decline of the dollar would tend to
offset expected gains from diminished pressures
on labor and other production resources. Some
of these members also expressed concern that a
possible resumption of economic growth at a
pace closer to the economy's potential, perhaps
later next year, would reverse any tendency for
inflation to decline. Other members were somewhat more optimistic about the outlook for prices
and wages. Some commented that they were
encouraged by the performance of prices in the
second half of 1989, and a number cited the
strong competition for many products from both
domestic and foreign producers, the behavior of
industrial materials and commodity prices, and
the growth of capacity in some key industries.
In the Committee's discussion of monetary
policy for the intermeeting period ahead, the
members focused on the possible need to ease
reserve conditions slightly further to provide
greater assurance that weaknesses in demand did
not persist or deepen. The current slowdown in
economic growth was to a considerable extent
the result of the policy implemented much earlier
to restrain emerging inflation pressures, and this
policy seemed at least to have avoided an upsurge in inflation. Over time, a further damping
of price pressures was needed if the economy
was to realize the benefits of price stability, but
that need not involve a downturn in the economy. Several members observed that the choice
between some slight easing at this time or waiting
for additional evidence that the economy might
be weakening further was a close one. A majority
indicated that on balance they viewed the risks of
a shortfall in economic activity as sufficiently
high to justify an immediate move to slightly
easier reserve conditions, and one member expressed a preference for somewhat greater easing. In this regard, some noted that the next
several months might be a critical period in terms
of avoiding a recession and that some modest
easing at this point might have a calming effect on
financial markets and help to boost business
confidence. Given downward pressures on many
prices and softness in business conditions, some
slight easing was not likely in this view to be
inconsistent with the long-run objective of price
stability or the public's perception of the importance that the System placed on that objective.
Record of Policy Actions of the Federal Open Market Committee
These members recognized that an easing of
reserve pressures immediately after the meeting
would make the need for further easing less likely
over the coming intermeeting period. As a consequence, they favored a directive that did not
contain a tilt toward less restraint but one that
gave equal weight to potential intermeeting adjustments in either direction.
Members who supported an unchanged policy
commented that current reserve conditions appeared to be consistent with ongoing expansion
in business activity at a pace that over time
would serve to moderate pressures on labor and
other production resources, and they were concerned that further easing might overcompensate
for current weaknesses in the economy at the
cost of delaying progress toward price stability.
In current circumstances, an easing also might
foster some concern about the System's commitment to achieving price stability and put undesirable downward pressure on the dollar in the
foreign exchange markets. At the same time,
these members recognized the risk of some further weakening in the economy, and several
favored a directive that incorporated a strong
presumption that indications of such a development would trigger a prompt adjustment of reserve conditions. Most of these members were
willing to accept a slight immediate move toward
easier reserve conditions but, in that case, they
doubted that any further easing would be appropriate over the intermeeting period unless the
economy, prices, or financial developments deviated very substantially from current expectations. Two members indicated that they could
not accept any further easing at this time, in part
because of their concerns about the consequences for growth of the monetary aggregates
and, more generally, for inflation expectations
and inflation over time.
Members referred to the strong growth of M2
over the past several months and took note of a
staff analysis that concluded that such growth
would remain fairly strong over months ahead if
reserve conditions stayed unchanged or were
eased slightly. Earlier declines in short-term interest rates and typically slow adjustments of
offering rates on M2-type deposits had tended to
make such deposits relatively more attractive by
reducing the opportunity costs of holding them.
237
The outlook for M3 was subject to considerable
uncertainty, but growth of that aggregate was
expected to remain below that of M2. The extent
of the shortfall would depend in important measure on the degree to which solvent but capitaldeficient thrift institutions continued to reduce
assets to meet new capital requirements and on
the extent of RTC activity in resolving insolvent
thrift institutions.
At the conclusion of the Committee's discussion, all but two of the members indicated that
they favored or could accept a directive that
called for a slight easing of reserve conditions. In
keeping with the Committee's usual approach to
policy, the conduct of open market operations
would be subject to further adjustment during the
intermeeting period depending on progress
toward price stability, the strength of the business expansion, the behavior of the monetary
aggregates, and developments in foreign exchange and domestic financial markets. On the
basis of such developments, slightly greater or
slightly lesser reserve restraint would be acceptable during the period ahead. The reserve conditions contemplated at this meeting were expected
to be consistent with growth of M2 and M3 at
annual rates of about 8V2 and 5Vi percent respectively over the four-month period from November 1989 through March 1990. In light of the
easing of reserve conditions over the course of
recent months and the further slight easing favored by a majority of the members at this
meeting, the Committee decided to lower the
intermeeting range for the federal funds rate by 1
percentage point to 6 to 10 percent. Such a
reduction would center the range more closely
around the average federal funds rate that was
expected to prevail after this meeting.
At the conclusion of the Committee's meeting,
the following domestic policy directive was issued to the Federal Reserve Bank of New York:
The information reviewed at this meeting suggests
that economic activity is expanding slowly in the
current quarter. Total nonfarm payroll employment
has increased at a reduced pace on average over the
past several months, with declines continuing in the
manufacturing sector. The civilian unemployment rate
edged up to 5.4 percent in November. Industrial
production rose slightly in November after a decline in
October resulting from strike activity and other dis-
238
Federal Reserve Bulletin • April 1990
ruptions. Nominal retail sales excluding motor vehicles strengthened in November, but continued weak
sales of vehicles held total retail sales for the month to
a level that was little changed from the third-quarter
average. Housing starts fell in November but for the
October-November period were up somewhat on average from their third-quarter level. Indicators of
business capital spending suggest a weakening in expenditures after a substantial increase earlier in the
year. The preliminary data indicate that the nominal
U.S. merchandise trade deficit widened appreciably in
October from an upward revised September rate.
Broad measures of inflation suggest that prices have
risen more slowly on balance since midyear, partly
reflecting sharp reductions in energy prices, but the
latest data on labor compensation suggest no significant change in prevailing trends.
Interest rates have changed little on balance since
the Committee meeting on November 14. In foreign
exchange markets, the trade-weighted value of the
dollar in terms of the other G-10 currencies declined
substantially over the intermeeting period, with a
particularly pronounced depreciation against the German mark and related European currencies in the last
week of the period.
M2 continued to grow fairly briskly in November,
largely reflecting strength in its retail deposit components; M2 has expanded this year at a pace near the
midpoint of the Committee's annual range. Growth of
M3 picked up in November but has remained more
restrained than that of M2, as assets of thrift institutions and their associated funding needs apparently
continued to contract; for the year to date, M3 has
grown at a rate a little above the lower bound of the
Committee's annual range.
The Federal Open Market Committee seeks monetary and financial conditions that will foster price
stability, promote growth in output on a sustainable
basis, and contribute to an improved pattern of international transactions. In furtherance of these objectives, the Committee at its meeting in July reaffirmed
the ranges it had established in February for growth of
M2 and M3 of 3 to 7 percent and 31/2 to IVi percent,
respectively, measured from the fourth quarter of 1988
to the fourth quarter of 1989. The monitoring range for
growth of total domestic nonfinancial debt also was
maintained at 6!/2 to IOV2 percent for the year. For
1990, on a tentative basis, the Committee agreed in
July to use the same ranges as in 1989 for growth in
each of the monetary aggregates and debt, measured
from the fourth quarter of 1989 to the fourth quarter of
1990. The behavior of the monetary aggregates will
continue to be evaluated in the light of movements in
their velocities, developments in the economy and
financial markets, and progress toward price level
stability.
In the implementation of policy for the immediate
future, the Committee seeks to decrease slightly the
existing degree of pressure on reserve positions. Tak-
ing account of progress toward price stability, the
strength of the business expansion, the behavior of the
monetary aggregates, and developments in foreign
exchange and domestic financial markets, slightly
greater reserve restraint or slightly lesser reserve
restraint would be acceptable in the intermeeting period. The contemplated reserve conditions are expected to be consistent with growth of M2 and M3
over the period from November through March at
annual rates of about 8V2 and 5'/2 percent respectively.
The Chairman may call for Committee consultation if
it appears to the Manager for Domestic Operations
that reserve conditions during the period before the
next meeting are likely to be associated with a federal
funds rate persistently outside a range of 6 to 10
percent.
Votes for this action: Messrs. Greenspan, Corrigan, Guffey, Johnson, Keehn, Kelley, La Ware,
Ms. Seger, and Mr. Syron. Votes against this
action: Messrs. Angell and Melzer.
Messrs. Angell and Melzer dissented because
they did not believe that policy should be eased.
Mr. Angell was concerned that the Committee
was responding to indicators of recent weakness
in economic activity, a weakness that was a
consequence of somewhat cautious policy responses earlier. Policy decisions should rely
mainly on leading indicators, including commodity prices, the exchange rate, the yield curve, and
money supply growth. Attention to such indicators had served policy well in the past. During the
spring and summer while the dollar was appreciating and commodity prices, including gold, were
generally falling, easing of reserve conditions was
accompanied by the lower long-term interest rates
necessary to undergird housing and other longterm investments. At this meeting, price-level
indicators were not signaling a need for further
ease. In these circumstances, an additional drop
in the federal funds rate, coming after two previous easing moves in the fourth quarter, could raise
doubts about the System's commitment to its
objective of price stability, especially given that
the easing would further stimulate M2 growth.
Under such conditions, further easing of reserve
pressures would tend to accommodate rising
prices, foster uncertainty in financial markets, and
drive up long-term interest rates, thereby increasing the likelihood of economic instability. Steady
policy in pursuit of price stability, using forwardlooking indicators, would reduce uncertainty
Record of Policy Actions of the Federal Open Market Committee
about price trends, bolster confidence in the
dollar domestically and internationally, and bring
about lower interest rates and higher economic
growth.
Mr. Melzer dissented because he favored an
unchanged degree of reserve restraint. He noted
that policy had been eased considerably over the
last six months in anticipation of prospective
sluggishness in the economy and that ample
liquidity was now being provided by the central
bank. In addition, based on recent and projected
growth in the monetary aggregates, he was concerned that long-term progress toward price stability would be jeopardized by a more accommodative short-run policy stance.
2. Foreign Currency
Paragraph ID of the Committee's Authorization
for Foreign Currency Operations permitted the
Federal Reserve Bank of New York, for the
System Open Market Account, to maintain an
overall open position in all foreign currencies not
exceeding $20 billion, based on historical costs.
System purchases of foreign currencies, which
were coordinated with similar transactions by the
U.S. Treasury, had been relatively limited recently, but, with the accumulation of interest,
total holdings were approaching the $20 billion
limit. The Manager for Foreign Operations advised that even in the absence of new market
purchases, continuing accruals of interest would
raise total holdings to the current limit by February. The Committee agreed to raise the limit to
$21 billion, effective immediately.
Authorization
At this meeting, the Committee approved an
increase in the limit on holdings of foreign currencies in the System Open Market Account.
239
Votes for this action: Messrs. Greenspan, Corrigan, Angell, Gufifey, Johnson, Keehn, Kelley,
LaWare, Melzer, Ms. Seger, and Mr. Syron. Votes
against this action: None.
241
Legal Developments
ORDER TERMINATING STATE
EXEMPTIONS
The Board of Governors determined that certain financial institutions in Connecticut, Massachusetts, and
N e w Jersey have previously been exempted from the
Home Mortgage Disclosure Act because they were
subject to substantially similar mortgage disclosure
requirements under state law. Recent amendments to
the act and to the Board's implementing rule, Regulation C, have produced discrepancies between the federal provisions and current state laws such that the state
laws are no longer substantially similar to the federal
statute and regulation, as amended. The Board is formally terminating the exemptions as of January 1, 1990,
the date the amended federal act and regulation took
effect.
Effective January 1, 1990, applications that are
received prior to March 1, 1990, by a previously
exempt institution, data on race or national origin and
sex are to be reported if the institution has this
information; institutions need not contact applicants
again in order to obtain the data.
Introduction
The Board's Regulation C (12 C.F.R. Part 203) implements the Home Mortgage Disclosure Act of 1975
("HMDA") (12 U.S.C. § 2801 etseq.). Prior to amendments that took effect January 1, 1990, the regulation
required depository institutions, mortgage banking subsidiaries of holding companies, and savings and loan
service corporations with more than $10 million in
assets and with offices in metropolitan statistical areas
to disclose annually their originations and purchases of
home mortgage and home improvement loans. Institutions compiled data about loans, itemizing this information by census tract (or by country, in some instances)
and also by type of loan. The institutions disclosed this
information to the public by March 31 following the
calendar year for which the data were compiled. Copies
were sent to the institutions' federal supervisory agencies for aggregation on an MSA-wide basis by the
Federal Financial Institutions Examination Council.
The Financial Institutions Reform, Recovery and
Enforcement Act ("FIRREA"), which was signed
into law on August 9, 1989, made major revisions to
H M D A . (FIRREA, Pub. L. N o . 101-73, 103 Stat. 183
(1989)). The Board amended Regulation C to implement the provisions of section 1211 of FIRREA,
publishing the revised regulation in final form in the
Federal Register on December 15, 1989 (54 Federal
Register 51,356). First, the coverage of H M D A and
of Regulation C was expanded to include mortgage
lenders that are not affiliated with depository institutions or holding companies. Second, the FIRREA
amendments require reporting of data regarding loan
applications; previously, institutions reported only
data regarding loans originated or purchased. Third,
the amendments require most covered lenders to
report the race or national origin, sex, and income of
mortgage applicants and borrowers (depository institutions with assets of $30 million or less are exempt
from this particular requirement). Fourth, the FIRREA amendments require that lenders identify the
class of purchaser for mortgage loans that they sell.
Fifth, the amendments to permit lenders to explain
the basis for lending decisions to their supervisory
agency. Finally, the revised Regulation C provides
for a "register" form of reporting. Lenders will
record certain data for each application that they
receive (whether granted, denied, or withdrawn) and
for each home purchase or home improvement loan
that they originate or purchase, and will submit the
registers to their supervisory agency at the close of
the calendar year. Thus, covered institutions will no
longer be required to cross-tabulate loan data, as was
the case under federal law previously.
Under HMDA and Regulation C, the Board may
grant exemptions to state-chartered or state-licensed
financial institutions subject to state mortgage disclosure laws that are substantially similar to the Federal
law and that contain adequate provision for enforcement. Exemptions are subject to termination if the
Board determines that the state laws no longer meet
these two conditions.
Based on the act and regulation in effect prior to the
1989 amendments, exemptions were previously granted
for state-chartered financial institutions subject to the
state mortgage disclosure laws of Connecticut, Massachusetts, and N e w Jersey. Following the adoption of
the revised Regulation C, the Board published a notice
of intent to terminate these state exemptions on December 15, 1989 (54 Federal Register 51,404), for a 30-day
comment period.
242 Federal Reserve Bulletin • April 1990
T w o comments were received. A state banking
official from Connecticut noted that the state intends
to amend its version of the Home Mortgage Disclosure
Act and implementing regulation to make them substantially similar to federal law, and required either a
continuance of the Connecticut exemption or its reinstatement upon the adoption of the requisite changes.
The other comment, submitted by an industry group,
did not take issue with the Board's position that
substantial similarity no longer exists between the
federal and state laws, but suggested that the revocation should not take effect on January 1, 1990, as
proposed, but at a later date. In addition, officials from
Massachusetts and N e w Jersey informally advised the
Board of plans to change their laws to parallel the
federal requirements.
The Board has determined that substantial similarity
between the federal and state laws no longer exists.
Thus, it is terminating the exemptions as of January 1,
1990, the effective date of the changes to HMDA and
Regulation C. State-chartered institutions previously
exempted from H M D A and Regulation C by virtue of
the disclosure laws of Connecticut, Massachusetts,
and N e w Jersey must comply with the data collection
requirements of the federal law as of that date. Accordingly, these institutions must maintain loan/application registers showing the required information on
the loans they originate or purchase, and for applications they receive, beginning January 1, 1990, except
that for applications received by these institutions
prior to March 1, 1990, data on race or national origin
and sex are to be reported if the institution has this
information; institutions are not required to contact
applicants again in order to obtain the data.
The loan/application registers are to be submitted to
institutions' federal supervisory agencies by March 1,
1991. If a state subsequently adopts new requirements
that are substantially similar to the federal law, and
those requirements are made effective as of January 1,
1990, the Board may grant a reinstatement of the
exemption. If an exemption is reinstated, covered
institutions would submit data about their mortgage
lending only to the state supervisory agency, instead
of having to send separate reports to federal and state
regulators.
To meet the "substantially similar" test, it will be
necessary for the state law to cover applications as
well as loans granted and purchased; to require reporting of information on the location of the properties to
which the covered loans or applications relate, and on
the race or national origin, sex, and income of applicants and borrowers; to provide disclosure of the type
of purchaser for loans sold by an institution; and to call
for a register form of reporting.
The termination of these state exemptions in no way
affects the mortgage disclosures required for loans
made or purchased in calendar year 1989. Institutions
previously exempt must submit reports on these loans
to their state supervisory agency in keeping with state
law requirements.
Order of Termination
The Board granted exemptions from the federal Home
Mortgage Disclosure Act to state-chartered financial
institutions in Connecticut, Massachusetts, and N e w
Jersey in 1978, 1976, and 1978, respectively, based on
the existence of substantially similar requirements
imposed by state law and on the states' provisions for
their enforcement. These exemptions were renewed in
1982 following changes in the federal act and regulation and corresponding changes in the state law.
Because the federal law was amended in 1989, and
no comparable changes in the state laws have followed
to date, the substantial similarity required for an
exemption no longer exists between the federal and
state laws. The Board is therefore terminating the
exemptions for Connecticut, Massachusetts, and N e w
Jersey. State-chartered financial institutions in these
states that were previously exempted from the federal
law shall comply with the federal H o m e Mortgage
Disclosure Act and Regulation C beginning January 1,
1990, the date the amendments to H M D A and Regulation C became effective. In the case of applications
received by these institutions prior to March 1, 1990,
data on race or national origin and sex are to be
reported if the institution has this information; institutions are not required to contact applicants again in
order to obtain that data.
AMENDMENT
TO REGULATION
Y
The Board of Governors is amending its Regulation Y,
section 225 of Title 12, Code of Federal Regulations, to
implement the provisions of section 914 of the Financial Institutions Reform, Recovery, and Enforcement
Act of 1989 ("FIRREA"), Pub. L. 101-73, 103 Stat.
183. Section 914 of FIRREA requires bank holding
companies and state member banks that have recently
undergone a change in control, have less than minimum required capital, or are otherwise in troubled
condition to file a notice with the Board of Governors
of the Federal Reserve System ("Board") prior to
adding a member of the board of directors, or employing an individual as a senior executive officer. This
prior notice requirement also applies to state member
banks that have been chartered within two years
before the proposed management change. The Board
may disapprove any proposed board member or senior
Legal Developments
executive officer whose service is not considered to be
in the best interests of the depositors of the bank or the
public. The regulation defines the terms "troubled
condition" and "senior executive officer." The regulation also clarifies the types of changes in control of a
state member bank or bank holding company that
require a notice under section 914, and establishes the
procedures for filing the required notice.
Because the provisions of section 914 became effective on the date of enactment of FIRREA, this regulation is immediately effective. The Board requests
comment on any issue raised by this regulation; interested persons have 60 days in which to respond. After
the close of the comment period, the Board may
amend the regulation in response to the comments
received.
Effective February 13, 1990, the Board amends
12 C.F.R.Part 225 as follows:
1. The authority citation for Part 225 is revised to
read as follows:
Authority:
12 U.S.C. 18170X13), 1818, 1831i,
1843(c)(8), 1844(b), 3106, 3108, 3907 and 3909.
2. Subpart H, consisting of sections 225.71 through
225.73, is added to read as follows:
Subpart H—Notice of Addition or Change of
Directors and Senior Executive Officers
Section 225.71—Definitions
Section 225.72—Director and officer appointments;
prior notice requirement
Section 225.73—Procedures for filing, processing, and
acting on notices; standards for disapproval; waiver of notice
Subpart H—Notice of Addition or Change of
Directors and Senior Executive Officers
Section 225.71—Definitions
(a) "Senior executive officer" means a person who,
without regard to title, exercises the authority of one
or more of the following positions: chief executive
officer, chief operating officer, chief financial officer,
chief lending officer, or chief investment officer. "Senior executive officer" also includes any other person
with significant influence over major policymaking
decisions of a state member bank or bank holding
company.
(b) "Bank or bank holding company in troubled condition" means any state member bank or bank holding
company that:
243
(1) Has a composite rating, as determined in the
most recent report of examination or inspection, of
4 or 5 under the commercial bank Uniform Interagency Bank Rating System or under the Federal
Reserve bank holding company rating system;
(2) Is subject to a cease and desist order or formal
written agreement that requires action to improve
the financial condition of the institution, unless
otherwise informed in writing by the Board or the
appropriate Reserve Bank; or,
(3) Is expressly informed by the Board or Reserve
Bank that it is in troubled condition for purposes of
the requirements of this subpart on the basis of the
institution's most recent examination, report of condition, or inspection, or other information available
to the Board.
Section 225.72—Director and officer
appointments; prior notice requirement
(a) Prior notice. A state member bank or bank holding
company shall give the Board 30 days written notice,
as specified in section 225.73, before adding or replacing any member of the board of directors of employing
or changing the responsibilities of any individual to a
position as a senior executive officer of the bank or
bank holding company, if:
(1) The bank has been chartered less than two years;
(2) Within the preceding two years, the bank or bank
holding company has undergone a change in control
that required a notice to be filed pursuant to the
Change in Bank Control Act or Subpart E of this
part;
(3) Within the preceding two years, the bank holding
company became a registered bank holding company, unless the bank holding company is owned or
controlled by a registered bank holding company, or
the bank holding company was established in a
reorganization in which substantially all of the
shareholders of the bank holding company were
shareholders of the bank prior to the bank holding
company's formation; or
(4) The bank or bank holding company is not in
compliance with all minimum capital requirements
applicable to the institution as determined on the
basis of the institution's most recent report of condition, examination or inspection, or is otherwise in
troubled condition.
(b) Advisory
directors.
(1) For purposes of this subpart, except as provided
in paragraph (b)(2) of this section, the term "member of the board of directors" does not include an
advisory director who:
(i) Is not elected by the shareholders of the bank
or bank holding company;
244
Federal Reserve Bulletin • April 1990
(ii) Is not authorized to vote on any matters before
the board of directors; and
(iii) Provides solely general policy advice to the
board of directors.
(2) The Board or Reserve Bank may otherwise
determine that an advisory director is in fact functioning as a director or senior executive officer for
purposes of this subpart.
Section 225.73—Procedures for filing,
processing, and acting on notices; standards for
disapproval; waiver of notice
(a)(1) Filing notice. The notice required in section
225.72 shall be filed with the appropriate Reserve
Bank and shall contain the information required by
paragraph 6(A) of the Change in Bank Control Act
(12 U . S . C . 1817(j)(6)(A)) or prescribed in the designated Board form, subject, in either case, to the
authority of the Reserve Bank or the Board to
modify these requirements or require additional
information.
(2) Acceptance of notice. The 30-day notice period
specified in section 225.12 shall begin on the date all
required information is received by the appropriate
Reserve Bank or the Board. The Reserve Bank shall
notify the bank or bank holding company submitting
the notice of the date all such required information is
received and the notice is accepted for processing,
and of the date on which the 30-day notice period
will expire.
(b) Commencement
of service.
(1) At expiration of period. A proposed director or
senior executive officer may begin service 30 days
after a complete notice under paragraph (a) of this
section has been accepted by the Reserve Bank
unless the Board or Reserve Bank issues a notice of
disapproval of the proposed addition or employment
before the end of the 30-day period.
(2) Prior to expiration of period. A proposed director or senior executive officer may begin service
before the expiration of the 30-day period if the
Board or the Reserve Bank notifies the bank or bank
holding company in writing of the Board's intention
not to disapprove the addition or employment.
(c) Notice of disapproval. The Board or Reserve Bank
must disapprove a notice under section 225.72 if the
Board or Reserve Bank finds that the competence,
experience, character, or integrity of the individual
with respect to whom the notice is submitted indicates
that it would not be in the best interests of the
depositors of the bank or in the best interests of the
public to permit the individual to be employed by, or
associated with, the bank or bank holding company.
The notice of disapproval shall contain a statement of
the basis for disapproval.
(d) Appeal.
(1) The disapproved individual or the state member
bank or bank holding company may appeal to the
Board the disapproval of a notice under this subpart
within 15 calendar days of the effective date of the
notice of disapproval. An appeal shall be in writing
and explain the reasons for the appeal and include
all facts, documents, and arguments that the appealing party wishes to be considered in the appeal.
(2) The Board may, in its sole discretion, order an
informal hearing if the hearing is requested in writing by the disapproved individual or the notificant at
the time of an appeal, and the Board finds that oral
argument is appropriate or that a hearing is necessary to resolve disputes regarding material issues of
fact.
(3) The disapproved individual may not serve as a
director or senior executive officer while the appeal
is pending. Written notice of the final decision of the
Board shall be sent to the appealing party.
(e)(1) Waiver of notice. The Board or the Reserve
Bank may waive the prior notice required under this
subpart if it finds that:
(i) Delay would threaten the safety or soundness
of the state member bank or the bank holding
company or any of its bank subsidiaries;
(ii) Delay would not be in the public interest; or
(iii) Other extraordinary circumstances exist that
justify waiver of prior notice.
(2) Effect on disapproval
authority. Any waiver
issued by the Board or Reserve Bank shall not affect
the authority of the Board or Reserve Bank to issue
a notice of disapproval within 30 days after such
waiver.
ORDERS ISSUED UNDER BANK
COMPANY ACT
HOLDING
Orders Issued Under Section 3 of the Bank
Holding Company Act
BankAmerica Corporation
San Francisco, California
Order Approving
Acquisition
of a Bank
BankAmerica Corporation, San Francisco, California
("BankAmerica"), a bank holding company within the
meaning of the Bank Holding Company Act ("BHC
Act"), has applied for the Board's approval under
section 3(a)(3) of the BHC Act (12 U.S.C.
§ 1842(a)(3)) to acquire all the voting shares of Bank of
Legal Developments
America State Bank, Concord, California ("State
Bank"), a de novo state bank.
Notice of the application, affording an opportunity
for interested persons to submit comments, has been
duly published (54 Federal Register 29,620 (1989)).
The time for filing comments has expired, and the
Board has considered the application and all comments received, including those of various insurance
industry trade associations ("protestants"), in light of
the factors set forth in section 3(c) of the BHC Act. 1
BankAmerica operates two banking subsidiaries in
California and Washington. 2 BankAmerica is the third
largest commercial banking organization in the United
States and is the largest commercial banking organization in California, controlling deposits of $51.3 billion, representing approximately 23.4 percent of the
total deposits in commercial banks in California.3
State Bank, a de novo institution, is organized as a
state-chartered nonmember bank. In light of State
Bank's de novo status and based upon the facts of
record, the Board concludes that consummation of the
proposed acquisition would not result in an adverse
effect on the concentration of banking resources in
California. In evaluating this application, the Board
has carefully considered the financial resources of
BankAmerica and the effect on those resources of the
proposed acquisition. The Board has previously stated
that it expects banking organizations contemplating
expansion proposals to maintain strong capital levels
substantially above the minimum levels specified in
the Board's Capital Adequacy Guidelines, without
significant reliance on intangibles, particularly
goodwill. 4 The Board carefully analyzes the effect of
expansion proposals on the preservation or achievement of strong capital levels and has adopted a policy
that there should be no significant diminution of finan-
1. The Board has received comments protesting the application
from the Independent Insurance Agents of America, Inc., National
Association of Casualty & Surety Agents, National Association of
Life Underwriters, National Association of Professional Insurance
Agents, National Association of Surety Bond Producers, New York
Association of Life Underwriters, Professional Insurance Agents of
New York, Inc., Independent Insurance Agents of New York, Inc.,
California Association of Life Underwriters, Professional Insurance
Agents of California and Nevada, Inc., and Independent Insurance
Agents & Brokers of California.
2. The Board has also recently approved BankAmerica's acquisition
of a savings bank in Washington (BankAmerica Corporation (American Savings Financial Corporation), 75 Federal Reserve Bulletin 827
(1989)) and a thrift in Nevada (BankAmerica Corporation (Nevada
First Development Corporation), 75 Federal Reserve Bulletin 825
(1989)).
3. All data are as of September 30, 1989
4. The Bank of New York Company, Inc., 74 Federal Reserve
Bulletin 257 (1988); Capital Adequacy Guidelines, 50 Federal Register
16,057 (April 24, 1985).
245
cial strength below those levels for the purpose of
effecting major expansion. 5
The Board has previously noted that BankAmerica
has taken the appropriate steps over the last few years
to strengthen its capital position, both through the
issuance of new equity and through the retention of
earnings. 6 BankAmerica's capital ratios are above the
minimum requirements under the Board's Capital Adequacy Guidelines and the proposal would have no
effect on BankAmerica's capital position. In light of
these considerations, the Board concludes that the
financial resources of BankAmerica are consistent
with approval of the proposal.
State Bank is chartered under California law to
engage in commercial banking business. State Bank
intends to focus its banking activities primarily on
providing the following services:
(1) specialized community development lending activities to further economic and neighborhood revitalization and production of housing for low- and
moderate-income households; 7 and
(2) cash management services for California corporate customers and public agencies. 8 Based on the
facts of record, the Board concludes that the managerial resources, future prospects, and convenience and needs considerations are also consistent
with approval.
5. Thus, for example, the Board has generally approved proposals
involving a decline in capital only where the applicants have promptly
restored their capital to pre-acquisition levels following consummation of the proposals and have implemented programs of capital
improvement to raise capital significantly above minimum levels. See,
e.g. Citicorp, 72 Federal Reserve Bulletin 726 (1986); Security Pacific
Corporation, 72 Federal Reserve Bulletin 800 (1986).
6. BankAmerica Corporation (American Savings Corporation), 75
Federal Reserve Bulletin 827 (1989).
7. Except for investments in projects designed primarily to promote
community welfare, such as the economic rehabilitation and development of low-income areas, State Bank will not make real estate or
equity investments and will not make any investment not otherwise
permissible for any national bank, a state member bank, or a nonbank
subsidiary of a bank holding company, without the prior approval of
the Federal Reserve System.
8. The cash management services involve collection services (lockbox, cash concentration, and cash vault services); information services (transmission of or direct access via terminal to checking
account and investment information between State Bank and the
customer); and disbursement services (controlled disbursement and
electronic funds transfers). A controlled disbursement account allows
customers to fund their account on the same day that checks are
presented. Each morning the customer is advised of the total dollar
amount of checks that have been presented for payment and the
customer has until close of business that day to wire or otherwise
transfer good funds to cover those checks. The ability to segregate
controlled disbursement checks and report clearings early in the day is
substantially facilitated by a distinct American Bankers Association
transit routing number, which BankAmerica will obtain through State
Bank. California law encourages the use of California disbursement
banks by providing that, generally, wages paid by check must use
checks payable at an established place of business in the state that is
identified on the check. Cal. Labor Code § 212 (1989). In addition,
competitors of BankAmerica currently offer controlled disbursement
services through California banking subsidiaries.
246
Federal Reserve Bulletin • April 1990
State Bank also proposes to engage in insurance
agency/brokerage activities permissible for state-chartered banks under California law. 9 The Board has
previously determined that insurance activities conducted by holding company banks directly under state
law are not limited by the nonbanking provisions of
section 4 of the BHC Act, except where the record
demonstrates the type of evasion described in the
Citicorp (South Dakota) case. 10 In the Citicorp (South
Dakota) case, the Board concluded that the proposal,
taken as a whole, amounted to an evasion of the BHC
Act and on that basis denied the application. 11 Protestants have urged the Board to deny BankAmerica's
application under this precedent. However, State
Bank is a bank within the BHC Act's definition
(12 U.S.C. § 1841(c)) and, in the Board's view,
BankAmerica's application presents material considerations that distinguish this record from the circumstances in the Citicorp proposal.
In Citicorp (South Dakota), after reviewing the
applicable legal framework governing competition for
banking and insurance services within the state, the
Board concluded that the South Dakota statute itself
had the effect of enabling out-of-state bank holding
companies to evade the nonbanking insurance prohibitions of the Garn-St Germain Act by authorizing,
through an institution that was a bank in name only, a
nationwide insurance franchise. 12 Accordingly, it was
9. Proposition 103, which repealed prohibitions against all insurance
activities by California banks and bank holding companies, was
approved by the voters in the November 8, 1988, general election and
its constitutionality has been upheld by the California Supreme Court.
CalFarm Insurance Company v. Deukmejian, 48 Cal. 3d. 805, 771
P. 2d 1247 (1989). The California Superintendent of Banks has indicated that California state-chartered banks may engage in insurance
agency/brokerage activities and protestants concede that California
law would permit State Bank to conduct a general insurance agency
business. State Bank would not engage in insurance underwriting or
the reinsurance of any insurance policies. Additionally, State Bank
will not enter into contingent commission or other arrangements with
insurers that would expose State Bank to an underwriting loss. All
insurance activities will be conducted directly in the bank and State
Bank will only enter into agency agreements with insurers who are
rated " A " or higher by A.M. Best and who exceed minimum capital
and surplus requirements for the types of business they are underwriting.
10. Merchants National Corporation, 75 Federal Reserve Bulletin
388 (1989); affirmed by the United States Court of Appeals for the
Second Circuit in Independent Insurance Agents of America, Inc., et
al. v. Board of Governors, 890 F.2d 1275 (2d Cir. 1989) VMerchants"). Protestants continue to maintain, however, that State
Bank's proposed insurance activities are prohibited under section
4(c)(8) of the BHC Act, as amended by Title VI of the Garn-St
Germain Depository Institutions Act of 1982 ("Garn-St Germain
Act"). The Garn-St Germain Act provides that, with seven exceptions (not at issue in this application), insurance activities are not
closely related to banking and thus are not generally permissible for
bank holding companies.
11. Citicorp (American State Bank), 71 Federal Reserve Bulletin 789
(1985) ("Citicorp (South Dakota)").
12. Under the applicable South Dakota statute, while an out-of-state
bank holding company was significantly limited in its ability to
the grant of broad insurance powers, which were
otherwise prohibited to bank holding companies, that
replaced the opportunity to conduct a banking business in South Dakota as the incentive to attract
out-of-state bank holding companies to acquire South
Dakota banks. This incentive—crucial to the success
of the South Dakota statute's articulated legislative
purpose of attracting out-of-state bank holding companies as a means of increasing tax revenues and jobs in
South Dakota—existed only because insurance activities were expressly prohibited for bank holding companies under the BHC Act. The insurance authorization provided under California law, however, contains
no similar restrictive structure that effectively limits
the incentive for acquiring a state-chartered bank to its
potential as a vehicle for selling insurance and State
Bank will, in fact, conduct banking activities in California.
The Board also concluded that the Citicorp operating plan required a dedication of significant resources
for its insurance activities. Although BankAmerica has
not developed financial projections or a definite operational plan for State Bank's insurance activities, the
business operations differ significantly from Citicorp's
plans to engage primarily, if not solely, in insurance
activities through its South Dakota bank.
Unlike the Citicorp proposal, State Bank intends to
engage in traditional, although more focused, banking
activities and will compete in the California market for
community development and cash management banking services. BankAmerica has also indicated that,
based on certain assumptions, the insurance agency
business may comprise approximately one-third of the
total revenues of State Bank. 13 This plan of operation
significantly contrasts with Citicorp's plan to conduct
insurance activities in its state bank to the fullest
extent possible by investing approximately $2.5 million in a facility and employing a minimum of 100-125
additional nonbanking personnel for a bank with $17.5
million in assets and 28 employees.
conduct a banking business in South Dakota once it acquired a South
Dakota bank, the out-of-state bank holding company was permitted to
use the South Dakota bank franchise to conduct insurance activities
nationwide without any limitation (other than that it restrict its
insurance activities within South Dakota itself to avoid competing
with South Dakota firms).
13. Using its current experience with the sale of insurance and
securities products by a third-party vendor from leased branch office
space, BankAmerica estimates, by comparing the revenues expected
to be generated in 1989 from the sale of fixed-rate annuities (the only
insurance product in the program) with the revenues expected to be
generated from the sale of securities (including variable-rate annuities)
and the banking services offered by State Bank, that in State Bank's
third year of operation, insurance revenue would amount to approximately one-third of State Bank's total revenues. BankAmerica regards years 1 and 2 as a start-up period for establishing its market share
of community development and cash management banking services.
Legal Developments
On the basis of this record, the Board does not
believe that BankAmerica's acquisition of State Bank
will constitute an evasion of the insurance prohibitions
of section 4 of the BHC Act. However, the Board, as
a condition of this Order, retains supervisory authority
to review State Bank's activities in order to ensure
that no such evasion of the requirements of the BHC
Act occurs. 14
Protestants have requested a hearing on the application. Section 3(b) of the BHC Act does not require
the Board to hold a hearing concerning an application
to acquire a bank under section 3 of the BHC Act
unless the appropriate banking authority for the bank
to be acquired makes a timely written recommendation of denial of the application. In this case, no such
recommendation of denial has been received from the
California Superintendent of Banks. 15
Furthermore, protestants have been given the opportunity to submit, and have submitted, written facts
and arguments to the Board regarding this application.
These materials, as well as responses by BankAmerica, have not provided any basis to believe that the
material facts already before the Board are incomplete
or insufficient to permit the Board to evaluate the
application under the BHC Act or that further investigation would produce additional relevant information. The Board is not required to hold a formal
hearing where a party disputes the conclusions to be
drawn from established facts or where such proceedings would not serve to develop new or useful material
facts. 16
Protestants have alleged several factual disputes
supporting their request for a hearing to determine
whether BankAmerica's application is proposed primarily to provide BankAmerica with an insurance
agency subsidiary thereby evading the BHC Act as
14. The insurance activities of State Bank will also be subject to the
anti-tying restrictions of the 1970 Amendments to the BHC Act, which
unlike section 4(a), explicitly apply to "banks." 12 U.S.C. § 1972(1).
15. 12 U.S.C. § 1842(b); Farmers & Merchants Bank of Las Cruces
v. Board of Governors, 567 F.2d 1082, 1085 (D.C. Cir. 1977); Grandview Bank & Trust Co. v. Board of Governors, 550 F.2d 415, 421 (8th
Cir. 1977), cert, denied, 434 U.S. 821 (1977); and Northwest Bancorporation v. Board of Governors, 303 F.2d 832, 842-44 (8th Cir. 1962).
Nothing in section 5 of the BHC Act, relating to the Board's authority
to prevent evasions, requires a hearing.
16. Section 4(c)(8) of the BHC Act provides that, in approving
activities under that provision, the Board must provide notice and
opportunity for hearing. However, this case does not involve an
application under section 4 of the BHC Act. In light of the Board's
determination in Merchants, section 4 does not apply to limit the
direct activities of subsidiary state banks or require that an application
under section 4(c)(8) be filed for approval for such bank. In addition,
even where the applicable provision requires an opportunity for a
hearing, such as under section 4(c)(8), a protestant is not entitled to
discovery and a hearing on every application, but only when there are
material issues of fact in dispute. Connecticut Bankers Assn. v. Board
of Governors, 627 F.2d 245 (D.C. Cir. 1980). As discussed in this
Order, there are no material issues of fact in dispute.
247
prohibited by the Citicorp (South Dakota) precedent.
These factual disputes include the operational considerations in support of cash management services
through State Bank, the accuracy of BankAmerica's
estimate regarding income from State Bank's insurance activities or, alternatively, the substantiality of
insurance activity demonstrated by the estimate, and
BankAmerica's motivation for chartering a state bank
in a state that permits banks to engage in insurance
agency activities. In a more general sense, protestants
allege that BankAmerica's credibility and real intent
are at issue and that additional information in the form
of documents and testimony from BankAmerica's
officials and other witnesses is required to demonstrate
the evasion that protestants have alleged.
These assertions, however, are not designed to
dispute material facts in the record or even to provide
a basis for eliciting new material facts relevant under
the Citicorp (South Dakota) precedent. Rather than
challenging existing facts, these assertions question
inferences and conclusions drawn from the factual
presentation in the application.
State Bank intends to engage in banking activities
and to compete for banking services in California. As
previously discussed, the statutory framework and the
extent of the operational plans for insurance activities
presented by this application differ significantly from
the Citicorp proposal. Furthermore, protestants have
failed to allege sufficient facts to demonstrate that
BankAmerica's representations, including its representations regarding its insurance operations, are not
credible or to justify convening a formal hearing for
the purpose of providing protestants with the opportunity to enhance their protest. 17 Under these circumstances, and with the recognition that the Board has
retained authority to prevent any evasion of the BHC
Act or this Order, the Board concludes that a formal
hearing is unnecessary and, accordingly, protestants'
request for a hearing is denied.
Based on the foregoing and all of the facts of record,
including representations made by BankAmerica, the
Board has determined that the application should be,
and hereby is, approved. This transaction 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. State
Bank shall be opened for business not later than six
months after the effective date of this Order. The latter
two periods may be extended for good cause by the
Board or the Federal Reserve Bank of San Francisco,
acting pursuant to delegated authority.
17. The Board notes that intentional violations of the BHC Act or
regulations of the Board, including false statements of a bank holding
company, carry both civil and criminal penalties. 12 U.S.C. § 1847.
248
Federal Reserve Bulletin • April 1990
By order of the Board of Governors, effective
February 16, 1990.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Kelley, and LaWare.
JENNIFER J. JOHNSON
Associate
Secretary
of the Board
BankAmerica Corporation
S a n F r a n c i s c o , California
Seafirst C o r p o r a t i o n
Seattle, Washington
Order Approving Acquisition
Company and Bank
of a Bank
Holding
BankAmerica Corporation, San Francisco, California
("BankAmerica"), and its wholly-owned subsidiary,
Seafirst Corporation, Seattle, Washington ("Seafirst"),
both bank holding companies within the meaning of the
Bank Holding Company Act ("BHC Act"), have applied for the Board's approval under section 3 of the
BHC Act (12 U.S.C. § 1842) to acquire by merger
Woodburn Bancorp, Woodburn, Oregon ("Woodburn"), and thereby acquire Woodburn State Bank,
Woodburn, Oregon ("Bank"). 1
Notice of the application, affording an opportunity
for interested persons to submit comments, has been
duly published (54 Federal Register 48,940 (1989)).
The time for filing comments has expired, and the
Board has considered the application and all comments received, including those of various insurance
trade associations ("Protestants"), in light of the
factors set forth in section 3(c) of the BHC Act. 2
Section 3(d) of the BHC Act, the Douglas Amendment, prohibits the Board from approving an application by a bank holding company to acquire control of
any bank located outside of the bank holding company's home state, unless such acquisition is "specifically authorized by the statute laws of the State in
which [the] bank is located, by language to that effect
1. The proposed transaction would be effected through the exchange of newly issued BankAmerica shares for all the shares of
Woodburn Bancorp, less dissenting shares. Immediately following the
exchange, Woodburn Bancorp would merge with and into Seafirst.
2. The Board has received comments protesting the application
from the Independent Insurance Agents of America, Inc., National
Association of Casualty & Surety Agents, National Association of
Life Underwriters, National Association of Professional Insurance
Agents, National Association of Surety Bond Producers, New York
Association of Life Underwriters, Professional Insurance Agents of
New York, Inc., Independent Insurance Agents of New York, Inc.,
California Association of Life Underwriters, Professional Insurance
Agents of California and Nevada, Inc., and Independent Insurance
Agents & Brokers of California.
and not merely by implication." 3 Oregon's banking
laws permit out-of-state bank holding companies, with
the approval of the Oregon Department of Insurance
and Finance, to acquire established Oregon banks and
bank holding companies. 4 The Board has determined
previously that a California bank holding company
may acquire a bank holding company and bank in
Oregon. 5 Accordingly, Board approval of this proposal is not barred by the Douglas Amendment.
BankAmerica operates two banking subsidiaries in
California and Washington. 6 BankAmerica is the third
largest commercial banking organization in the United
States and is the largest commercial banking organization in California, where it controls deposits of
approximately $51.2 billion, representing approximately 23.4 percent of the total deposits in commercial
banks in California. 7 Seafirst is the largest commercial
banking organization in Washington, where it controls
deposits of approximately $8.5 billion, representing
approximately 29.3 percent of the total deposits in
commercial banks in Washington. Woodburn Bancorp
is the 38th largest commercial banking organization in
Oregon, where it controls deposits of approximately
$15.6 million, representing less than one percent of the
total deposits in commercial banking organizations in
Oregon. Based upon the facts of record, the Board
concludes that consummation of the proposed acquisition would not result in any significantly adverse
effect on the concentration of banking resources in
Oregon.
BankAmerica, through Seafirst, competes directly
with Woodburn in the Portland, Oregon, banking
market. 8 BankAmerica is the ninth largest commercial
banking organization in the market, controlling depos-
3. 12 U.S.C. § 1842(d). A bank holding company's home state for
purposes of the Douglas Amendment is that state in which the total
deposits of its banking subsidiaries were largest on July 1, 1966, or on
the date it became a bank holding company, whichever date is later.
Id. BankAmerica's home state is California.
4. Or. Rev. Stat. § 715.065(1) (1989); see also Or. Rev. Stat.
§ 706.005(29) (1989). In addition, the Oregon Department of Insurance
and Finance has determined that this proposal meets all the statutory
considerations.
5. Security Pacific Corporation, 73 Federal Reserve Bulletin 381
(1987).
6. The Board also has recently approved BankAmerica's acquisition
of a savings bank in Washington (BankAmerica Corporation (American Savings Financial Corporation), 75 Federal Reserve Bulletin 827
(1989)); a thrift in Nevada (BankAmerica Corporation (Nevada First
Development Corporation), 75 Federal Reserve Bulletin 825 (1989));
and a de novo state-chartered bank in California (BankAmerica
Corporation (Bank of America State Bank), 76 Federal
Reserve
Bulletin 244 (Order dated February 16, 1990)).
7. State banking data are as of September 30, 1989. Market banking
data are as of June 30, 1987.
8. The Portland, Oregon, banking market is approximated by the
Portland Ranally Metropolitan Area, which includes several communities in Washington State. Seafirst's principal bank subsidiary operates branches in that portion of the Portland banking market which is
within the State of Washington.
Legal Developments
its of approximately $119.8 million, representing approximately 1.5 percent of the total deposits in commercial banking organizations in the market.
Woodburn is the 14th largest commercial banking
organization in the market, controlling deposits of
approximately $13.4 million, representing less than
one percent of the total deposits in commercial banking organizations in the market. Upon consummation
of the proposed acquisition, BankAmerica would remain the ninth largest commercial banking organization in the market, controlling deposits of $133.2
million, representing approximately 1.7 percent of the
total deposits in commercial banking organizations in
the market. The Herfindahl-Hirschman Index
("HHI") would increase by less than one percentage
point to 2572 after consummation. 9 Based upon the
facts of record, the Board concludes that consummation of the proposed acquisition would not result in
any significantly adverse effect on competition in any
relevant market.
In evaluating this application, the Board has considered the financial resources of BankAmerica and
Seafirst and the effect on those resources of the
proposed acquisition. The Board has stated previously
that it expects banking organizations contemplating
expansion proposals to maintain strong capital levels
substantially above the minimum levels specified in
the Board's Capital Adequacy Guidelines, without
significant reliance on intangibles, particularly
goodwill. 10 The Board carefully analyzes the effect of
expansion proposals on the preservation or achievement of strong capital levels and has adopted a policy
that there should be no significant diminution of financial strength below those levels for the purpose of
effecting major expansion. 11
9. Under the revised Department of Justice Merger Guidelines (49
Federal Register 26,823 (1984)), a market in which the post-merger
HHI is above 1800 is considered highly concentrated. In such markets, the Department of Justice is likely to challenge a merger that
increases the HHI by more than 50 points. The Department of Justice
has informed the Board that a bank merger or acquisition generally
will not be challenged (in the absence of other factors indicating
anticompetitive effects) unless the post-merger HHI is at least 1800
and the merger raises the HHI by at least 200 points. The Department
of Justice has stated that the higher than normal HHI thresholds for
screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of limited-purpose lenders and other
non-depository financial entities.
10. BankAmerica Corporation (American Savings Financial Corporation), 75 Federal Reserve Bulletin 827 (1989); The Bank of New York
Company, Inc., 74 Federal Reserve Bulletin 257 (1988); Capital
Adequacy Guidelines, 12 C.F.R. Part 225, Appendix B.
11. Thus, for example, the Board generally has approved proposals
involving a decline in capital only where the applicants have promptly
restored their capital to preacquisition levels following consummation
of the proposals and have implemented programs of capital improvement to raise capital significantly above minimum levels. See, e.g.,
Citicorp, 72 Federal Reserve Bulletin 726 (1986); Security Pacific
Corporation, 72 Federal Reserve Bulletin 800 (1986).
249
The Board has noted previously that BankAmerica
has taken appropriate steps over the last few years to
strengthen its capital position, both through the issuance of new equity and through the retention of
earnings. 12 BankAmerica's capital ratios are above the
minimum requirements under the Board's Capital Adequacy Guidelines. In addition, BankAmerica would
effect this transaction through an exchange of shares,
and the proposal would have a de minimis effect on
BankAmerica's capital position. Moreover, this proposal would result in a small increase in BankAmerica's asset size in relative terms. In light of these
considerations, the Board concludes that the financial
resources of BankAmerica are consistent with approval of the proposal.
Based on the facts of record, the Board also concludes that the managerial resources, future prospects,
and convenience and needs considerations are also
consistent with approval.
Oregon law authorizes state-chartered banks, such
as Bank, to conduct general insurance agency activities, subject to the State's insurance licensing
provisions. 13 Protestants allege that BankAmerica
may conduct general insurance agency activities
through Bank in the future and that such conduct
would be prohibited by section 4 of the BHC Act. 1 4
The Board previously determined in its Merchants
National decision that the nonbanking restrictions of
section 4 of the BHC Act do not apply to the direct
activities of holding company banks, except where the
record demonstrates the type of evasion described in
Citicorp (American State Bank) (71 Federal Reserve
Bulletin 789 (1985) "Citicorp (South
Dakota)").15
Thus, subject to the type of situation presented in
Citicorp (South Dakota), a holding company's state
bank may engage directly in insurance agency activities authorized under state law even though such
activities are not permitted for bank holding companies.
The Board concludes that the record in this application does not support a finding of evasion of the
12. BankAmerica Corporation (American Savings Financial Corporation), 75 Federal Reserve Bulletin 827 (1989).
13. Or. Rev. Stat. § 707.310(d) (1989). See also Or. Rev. Stat.
§§ 744.002, 744.115 (1989).
14. Section 4(c)(8) of the BHC Act, as amended by Title VI of the
Garn-St Germain Depository Institutions Act of 1982, provides that,
with seven exceptions (not at issue in this application), insurance
activities are not closely related to banking and thus are not generally
permissible for bank holding companies.
15. Merchants National Corporation, 75 Federal Reserve Bulletin
388; affirmed by the United States Court of Appeals for the Second
Circuit in Independent Insurance Agents of America, Inc., et al. v.
Board of Governors, 890 F. 2d 1275 (1989). The Court of Appeals for
the Second Circuit lifted its stay order in Merchants National on
February 1, 1990, and the United States Supreme Court has denied a
request to issue a stay.
250
Federal Reserve Bulletin • April 1990
B H C Act. Bank conducts a full-service banking business in Oregon, accepting demand deposits and engaging in the business of making commercial loans, and is
a bank within the BHC Act's definition (12 U.S.C.
§ 1841(c)). Bank does not currently conduct general
insurance agency activities or possess an Oregon
insurance license, nor has Bank itself previously acted
as a general insurance agent. Furthermore, BankAmerica has stated that, at present, it does not intend
to engage in general insurance agency activities
through Bank. Accordingly, the Board concludes that
the record in this application, unlike the record of the
Citicorp (South Dakota) order, does not indicate that
the acquisition of Bank is primarily a device to permit
the acquiring bank holding company to engage in
prohibited insurance activities.
Based on the foregoing and all of the facts of record,
including representations made by BankAmerica, the
Board has determined that the application should be,
and hereby is, approved. The transaction 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 the Order. The latter
two periods may be extended for good cause by the
Board or the Federal Reserve Bank of San Francisco,
acting pursuant to delegated authority.
By order of the Board of Governors, effective
February 26, 1990.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, and Kelley. Absent and not voting:
Governor LaWare.
JENNIFER J. JOHNSON
Associate
Secretary
of the Board
Wells Fargo & Company
S a n F r a n c i s c o , California
Order Approving
Companies
the Acquisition
of Bank
Holding
Wells Fargo & Company, San Francisco, California
("Wells Fargo"), a bank holding company within the
meaning of the Bank Holding Company Act ("BHC
Act"), has applied for the Board's approval under
section 3(a)(5) of the BHC Act (12 U . S . C .
§ 1842(a)(5)) to merge with:
(1) Central Pacific Corporation, Bakersfield, California ("Central Pacific"), thereby acquiring its subsidiary bank, American National Bank, Bakersfield,
California; and
(2) Torrey Pines Group, Solana Beach, California
("TPG"), thereby acquiring its subsidiary bank,
Torrey Pines Bank, Solana Beach, California. 1
Notice of the applications, affording an opportunity
for interested persons to submit comments, has been
duly published (54 Federal Register 48,025 and 48,320
(1989)). The time for filing comments 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 BHC Act.*
Wells Fargo operates one banking subsidiary with
numerous branches in California. Wells Fargo is the
second largest commercial banking organization in
California, controlling deposits of $34 billion, representing approximately 15.5 percent of the total deposits in commercial banks in the state. 3 Central Pacific is
the 20th largest commercial banking organization in
California, controlling deposits of $817.8 million, representing less than 1 percent of the total deposits in
commercial banks in the state. TPG is the 39th largest
commercial banking organization in California, controlling deposits of $424 million, representing less than
1 percent of the total deposits in commercial banks in
the state. Upon consummation of the proposal, Wells
Fargo would remain the second largest commercial
banking organization in California, controlling deposits of $35.3 billion, representing approximately 16.1
percent of the total deposits in commercial banks in
California. Consummation of this proposal would not
have a significantly adverse effect upon the concentration of commercial banking resources in California.
Wells Fargo and TPG compete directly in the San
Diego RMA and Oceanside RMA banking markets.
Upon consummation of this proposal, neither of the
banking markets would be highly concentrated and the
Herfindahl-Hirschman Index ( " H H I " ) would increase
by fewer than 100 points in each of these markets. 4
1. The Office of the Comptroller of the Currency ("OCC") has
approved Wells Fargo's applications to merge American National
Bank and Torrey Pines Bank with Wells Fargo Bank, N.A.
2. The Board has received comments filed by several groups
protesting Wells Fargo's applications ("Protestants"). These groups
are the Certified Development Corporation of San Diego County, the
Black Chamber of Commerce, the Sacramento Urban League, Inc.,
The Greenlining Coalition ("TGC" representing twenty-six community organizations), The Latino Issues Forum (a member of TGC), the
Consumers Union, the League of United Latin American Citizens,
and Public Advocates Inc.
3. State deposit data are as of September 30, 1989. Market deposit
data are as of June 30, 1987.
4. Under the revised Department of Justice Merger Guidelines (49
Federal Register 26,823 (June 29, 1984)) any market in which the
post-merger HHI is greater than 1800 is considered highly concentrated, and the Justice Department is likely to challenge a merger that
increases the HHI by more than 50 points unless other factors indicate
that the merger will not substantially lessen competition. The Justice
Department has informed the Board that a bank merger or acquisition
is not likely to be challenged (in the absence of other factors indicating
Legal Developments
Wells Fargo also competes directly with Central
Pacific in 13 banking markets in California.5 In ten of
these banking markets, the increase in the HHI upon
consummation of the proposal would not exceed the
limits in the revised Department of Justice Merger
Guidelines. 6 In the Bakersfield, San Bernardino and
Madera County banking markets, consummation of
the proposal would increase the HHI more than 200
points in a post-merger market exceeding 1800.7 However, if 50 percent of the deposits held by thrift
institutions were included in the calculation of market
concentration, upon consummation of the proposal
these three banking markets would become moderately concentrated, and the HHI in all markets would
increase by fewer than 200 points. 8
On the basis of the above facts and other facts of
record, including the numerous competitors that
would remain in all the markets discussed, the Board
finds that consummation of the proposal would not
have a significantly adverse effect on existing competition in any relevant market. The Board also has
considered the effects of the proposal on probable
future competition in the relevant markets in which
Wells Fargo, TPG and Central Pacific do not compete.
an anticompetitive effect) unless the post-merger HHI is at least 1800
and the merger increases the HHI by 200 points. The Justice Department has stated that the higher than normal HHI thresholds for
screening bank acquisitions for anticompetitive effects implicitly recognizes the competitive effects of limited-purpose lenders and other
non-depository financial entities.
5. These markets are Bakersfield RMA, Fresno RMA, Merced
RMA, Modesto RMA, Porterville RMA, Visalia RMA, Riverside
RMA, San Bernardino RMA, Madera County, Fresno County (the
portion not in an RMA), western Kern County, southern Stanislaus
County, and southwestern Tulare County.
6. In the Fresno RMA, Merced RMA, Porterville RMA, Visalia
RMA, Riverside RMA, Fresno County (the portion not in an RMA),
western Kern County, and southwestern Tulare County the HHI
would increase by less than 200 points after consummation. In the
Modesto RMA and the southern Stanislaus County banking markets,
the HHI would increase by over 200 points but the market would
remain moderately concentrated after consummation.
7. Wells Fargo's pro forma market share is 23.7 percent in the
Bakersfield banking market, 29.2 percent in the San Bernardino
banking market, and 28.0 percent in the Madera County banking
market. The HHI will increase by 276 points to 1966 for the Bakersfield banking market, 415 points to 2224 for the San Bernardino
banking market, and 233 points to 2621 for the Madera County
banking market.
8. The Board previously has indicated that thrift institutions have
become, or have the potential to become, important competitors of
commercial banks. See National City Corporation, 70 Federal Reserve Bulletin 743 (1984); The Chase Manhattan Corporation, 70
Federal Reserve Bulletin 529 (1984); NCNB Bancorporation, 70
Federal Reserve Bulletin 225 (1984); General Bancshares Corporation, 69 Federal Reserve Bulletin 802 (1983); First Tennessee Corporation, 69 Federal Reserve Bulletin 298 (1983). By including 50 percent
of the deposits held by thrift institutions, Wells Fargo's pro forma
market share would be 16.8 percent in the Bakersfield banking market,
15.2 percent in the San Bernardino banking market, and 21.3 percent
in the Madera County banking market. The HHI would increase by
139 points to 1111 for the Bakersfield banking market, 112 points to
1356 for the San Bernardino banking market, and 135 points to 1669
for the Madera County banking market.
251
In light of the market concentration and the number of
probable future entrants into those markets, the Board
concludes that consummation of this proposal would
not have a significantly adverse effect on probable
future competition in any relevant market.
The financial and managerial resources of Wells
Fargo, TPG and Central Pacific are consistent with
approval. N o additional debt will be incurred in connection with the proposals.
In considering the convenience and needs of the
communities to be served, the Board has taken into
account the record of Wells Fargo's subsidiary bank,
Wells Fargo Bank, N.A., San Francisco, California
("Bank"), under the Community Reinvestment Act
(12 U.S.C. § 2901 et seq.) ("CRA"). The CRA requires the federal financial supervisory agencies to
encourage financial institutions to help meet the credit
needs of the local communities in which they operate
consistent with the safe and sound operation of such
institutions. To accomplish this end, the CRA requires
the appropriate federal supervisory authority to "assess an institution's record of meeting the credit needs
of its entire community, including low- and moderateincome neighborhoods, consistent with the safe and
sound operation of the institution," and to "take this
record into account in its evaluation of bank holding
company applications." 9
Protestants allege that Bank has failed to meet the
credit needs of its entire community, including lowincome and minority neighborhoods. 10 The Board has
carefully reviewed the CRA performance record of
Wells Fargo, including Protestants' comments regarding Bank's provision of loans and other services to
minority communities, and Wells Fargo's response to
those comments, in light of the CRA, the Board's
regulations, and the jointly issued Statement of the
Federal Financial Supervisory Agencies Regarding the
Community Reinvestment Act ("CRA
Policy
Statement"). 11 The CRA Policy Statement provides
guidance regarding the types of policies and procedures that the supervisory agencies believe financial
9. 12 U.S.C. § 2903.
10. Protestants' allegations regarding Bank include the following:
(1) discriminatory lending practices for consumer and commercial
loans in minority neighborhoods;
(2) inadequate marketing programs to meet the credit needs of
minority communities;
(3) branch closings detrimental to minority neighborhoods;
(4) inadequate investment in low-income consumer loan portfolios
and inadequate participation in Small Business Administration
("SBA") programs;
(5) inadequate philanthropic contributions to minorities and insensitivity to the needs of minorities as reflected by inadequate
participation of minorities in Bank's top management; and
(6) the failure of Bank to award contracts to minority-owned
businesses.
11. 54 Federal Register 13,742 (March 21, 1989).
252
Federal Reserve Bulletin • April 1990
institutions should have in place in order to fulfill their
responsibilities under the CRA on an ongoing basis,
and the procedures that the supervisory agencies will
use during the application process to review an institution's CRA compliance and performance.
Initially, the Board notes that Bank has received a
satisfactory rating from the OCC in an April 1989
examination of its CRA performance. In addition,
Bank has in place the types of programs outlined in the
CRA Policy Statement as essential to any effective
CRA program. Bank has a Community Affairs Department staffed by four full-time employees. The Community Affairs Department monitors community and
economic development loan activities and promotes
outreach efforts to neighborhood and consumer
groups, public officials, minority associations, and
business organizations. It performs such roles as overseeing the development and implementation of various
housing development programs and training branch
managers in CRA-related concerns. 12 Bank's board of
directors is also involved with Bank's CRA program.
A CRA Committee, consisting of three directors,
meets three times a year with senior executive management responsible for overseeing the Community
Affairs Department. The CRA Committee reports to
the Board at least annually and this committee is
active in the affairs of Bank and the monitoring of CRA
activity. In addition, Bank has adopted a branch
closure analysis procedure, designed to ensure that
CRA-related concerns will be taken into account in
any decision to close a particular branch. 13
A major aspect of Bank's CRA activities is a program entitled the Wells Fargo Community and Economic Development Loan Program ("Program"). The
Program finances various CRA-related projects, such
as low-income housing projects, projects that provide
jobs in lower-income communities, and programs designed to help small businesses. In 1986, Wells Fargo
set an annual goal of $41 million for the Program,
which Bank has exceeded every year. Bank invested
approximately $118 million in the Program in 1989, of
which approximately half is attributable to low-income
housing developments. In addition, Bank has joined
12. Bank will require completion of community contact forms by
branch and Community Affairs Department staff and make outreachrelated training part of the ongoing CRA training provided to branch
managers.
13. The Community Affairs Department evaluates the CRA impact
of branch closings and makes recommendations to appropriate Retail
and Commercial Banking Divisions to ensure that a branch closing is
consistent with Bank's continued effort to meet the credit needs of the
community. A CRA Compliance Checklist must be completed for any
branch proposed to be closed, relocated, consolidated, or downsized.
The CRA Committee reviews the Community Affairs Department's
evaluations on branch closings.
the California Community Reinvestment Corporation,
making a $13 million commitment over two years.
Bank is also engaged in a variety of other CRArelated activities. For example, Bank has one program
that provides liberalized credit qualifications and repayment terms to qualified low-income borrowers.
Bank also makes direct contributions to community
organizations, including minority organizations. In the
small business area, while Bank makes few SBA
loans, it has a variety of conventional products providing non-guaranteed financing to non-profit and forprofit small businesses.
In its April 1989 CRA examination of Bank, the
OCC found that Bank's geographic distribution of
credit appeared reasonable and that Bank's lending
practices did not discourage applications for types of
credit listed in Bank's CRA Statement. The examination found no evidence of discriminatory lending or
other illegal credit practices. 14 Bank's assessment of
community credit needs and its loan marketing were
considered satisfactory. The types of credit offered
and extended were also considered satisfactory. As
noted above, Bank has developed and extended loans
which meet the credit needs of low- and moderateincome borrowers, including loans originated for residential mortgages, housing rehabilitation, home improvement, small businesses, and small farms within
the community. Bank also participates in governmental^ insured, guaranteed and subsidized loans. Bank's
participation in local community development and
redevelopment programs was determined to be satisfactory.
The Board notes that Bank is also taking appropriate
measures to strengthen its performance in response to
suggestions from its primary regulator. For example,
Bank has agreed to explore advertising and direct
marketing strategies for special credit products, based
on the study of local credit needs in progress at the
time of its most recent examination. 15 The Board will
review Bank's progress under the CRA in future
applications.
14. Analyses of the Home Mortgage Disclosure Act data for Bank in
22 California MSAs where Bank reported loans for 1987 and 1988 were
consistent with lending patterns of aggregate lenders in those areas. In
1987, Bank made 11 percent of its mortgage loans in low- and
moderate-income neighborhoods as compared to 13 percent for aggregate lenders. Fourteen percent of Bank's mortgage portfolio was
originated in areas with a minority population higher than 40 percent,
compared with 15 percent for lenders as a whole. Similarly, in 1988
mortgage lending by Bank in low- and moderate-income areas accounted for 10 percent of its mortgage portfolio, while mortgage
lending in substantially minority areas accounted for 14 percent. For
aggregate lenders in 1988, these figures were 13.5 percent and 16.5
percent, respectively.
15. Bank will initiate a promotion of its Low Income Finance Terms
program, which features reduced monthly payments over longer
terms, and modified employment qualifications, to include advertisements in community-based publications.
Legal Developments
For the foregoing reasons, and based upon the
overall CRA record of Bank, and other facts of record,
the Board concludes that convenience and needs considerations, including the record of performance under
the CRA of Bank, are consistent with approval of
these applications. 16
Based on the foregoing and other facts of record, the
Board has determined that the applications under
section 3 of the BHC Act should be, and hereby are,
approved. The proposals 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 San Francisco, acting pursuant to delegated authority.
By order of the Board of Governors, effective
February 26, 1990.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, and Kelley. Absent and not voting:
Governor LaWare.
JENNIFER J. JOHNSON
Associate
Secretary
of the Board
Orders Issued Under Section 4 of the Bank
Holding Company Act
Ameritrust Corporation
Cleveland, Ohio
Order Approving Acquisition of a Company
Engaged
in Trust, Investment Advisory and Real Estate
Equity Financing and Appraisal
Activities
Ameritrust Corporation, Cleveland, Ohio ("Ameritrust"), a bank holding company within the meaning of
the Bank Holding Company Act (the " B H C Act"),
has applied pursuant to section 4(c)(8) of the BHC Act
(12 U.S.C. § 1843(c)(8)) and section 225.23(a) of the
Board's Regulation Y (12 C.F.R. 225.23(a)), to acquire
16. Protestants also have requested that the Board hold a public
hearing or meeting to further assess the facts surrounding Bank's CRA
performance, as well as conduct an audit of Bank's commercial and
residential loan portfolio. Generally under the Board's rules, the
Board may hold a public hearing or meeting on an application to
clarify factual issues related to the application and to provide an
opportunity for testimony, if appropriate. 12 U.S.C. §§ 262.3(e) and
262.25(d). In light of the fact that the parties in this case have had
ample opportunity to present their arguments in writing and to
respond to one another's submissions, the Board has determined that
a public hearing or meeting would serve no useful purpose. Accordingly, these requests are denied. Furthermore, since the OCC completed a CRA examination of Bank in April 1989, the Board has also
determined that an audit of Bank's loan portfolio would serve no
useful purpose. Accordingly, the request for an audit of Bank's loan
portfolio is denied.
253
MVestment Corporation, Dallas, Texas ("MVestment"), and thereby engage in the exercise of trust
powers, investment advisory activities, real estate
equity financing activities and real estate appraisals. 1
Notice of the application, affording interested persons an opportunity to submit comments, has been
duly published (54 Federal Register 47,270 (1989)).
The time for filing comments has expired, and the
Board has considered the application and all comments received in light of the public interest factors set
forth in section 4(c)(8) of the B H C Act.
Ameritrust, with total consolidated assets of $10.9
billion, is the third largest commercial banking organization in Ohio and the 53rd largest bank holding
company in the United States. 2 Ameritrust operates
six subsidiary banks in Ohio and Indiana and engages
through subsidiaries in a variety of nonbanking activities.
The Board has previously determined that the activities Ameritrust proposes to conduct through MVestment are closely related to banking and permissible for
bank holding companies to conduct under section
4(c)(8) of the B H C Act. 3 Ameritrust has proposed to
conduct these activities within the limitations established in the Board's regulations.
In order to approve this application, the Board also
must find that the performance of the proposed activities can reasonably be expected to produce benefits to
the public, such as greater convenience, increased
competition, or gains in efficiency, that outweigh possible adverse effects, such as undue concentration of
resources, decreased or unfair competition, conflicts
of interest or unsound banking practices.
In evaluating the balance of public benefits associated with this proposal, the Board has considered the
financial and managerial resources of Ameritrust and
its bank subsidiaries, and the effect on those resources
of the proposed acquisition. The Board has stated and
continues to believe that capital adequacy is an important factor in the analysis of bank holding company
expansion proposals. 4 In this regard, the Board has
1. MVestment owns four non-bank subsidiaries: MTrust Corporation, Dallas, Texas (provider of trust services); MSecurities Corporation, Dallas, Texas (provider of investment advisory services pertaining to common stock portfolios); MRealty Corporation, Dallas, Texas
(investment advisory services pertaining to real estate investments,
equity financing activities and real estate appraisal); and MPetroleum
Corporation, Dallas, Texas (investment advisory services pertaining
to investments in petroleum producing facilities).
2. All banking data are as of September 30, 1989.
3. The Board's Regulation Y (12 C.F.R. Part 225) includes the four
activities in which Ameritrust proposes to engage: exercising trust
powers; providing portfolio advice; performing appraisals of real
estate; and arranging commercial real estate equity financing.
(12 C.F.R. 225.25(b)(3), (4), (13) and (14)).
4. First Union Corporation, 76 Federal Reserve Bulletin 83 (1990),
The Bank of New York Company, Inc., 74 Federal Reserve Bulletin
257 (1988); Chemical New York Corporation, 73 Federal Reserve
254
Federal Reserve Bulletin • April 1990
stated that it expects banking organizations contemplating expansion proposals to maintain strong capital
levels substantially above the minimum levels specified in the Board's Capital Adequacy Guidelines
("Guidelines") 5 without significant reliance on intangibles, in particular goodwill. The Board carefully
analyzes the effect of expansion proposals on the
preservation or achievement of strong capital levels
and has adopted a policy that there should be no
significant diminution of financial strength below these
levels for the purpose of effecting major expansion
proposals. 6
Upon consummation of the proposed transaction,
Ameritrust's capital ratios would remain above the
minimum levels specified in the Guidelines, without
significant reliance on intangible assets. In this regard,
the Board notes that Ameritrust proposes to fund a
significant portion of the purchase price with the
issuance of new equity capital and that Ameritrust
projects a further strengthening of its capital after
consummation of this proposal. In light of the foregoing and, in particular, Ameritrust's proposed issuance
of equity capital, the Board concludes that the financial resources of Ameritrust are consistent with approval of this proposal.
There is no evidence in the record to indicate that
approval of this proposal would result in undue concentration of resources, unfair competition, conflicts
of interests or other adverse effects on the public
interest. Ameritrust does not currently engage in equity financing, or real estate appraisal activities, and
does not provide personal trust services in Texas
where MVestment operates. The corporate trust and
investment advisory services provided by Ameritrust
and MVestment represent a de minimis share of the
total market for these services. Moreover, the market
for these services is highly competitive, with numerous bank and nonbank competitors. Consummation of
the proposed transaction, therefore, would not have a
significant adverse effect on competition in any relevant market. Based upon the foregoing and all the
facts of record, the Board has determined that the
balance of the public interest factors that it is required
to consider under section 4(c)(8) is favorable and
consistent with approval of this application.
Bulletin 378 (1987); Citicorp, 72 Federal Reserve Bulletin 497 (1986);
National City Corporation, 70 Federal Reserve Bulletin 743 (1984).
5. Capital Adequacy Guidelines, 50 Federal Register 16,057
(April 24, 1985).
6. Thus, for example, the Board has generally approved proposals
involving a decline in capital only where the applicants have promptly
restored their capital to pre-acquisition levels following consummation of the proposals and have implemented programs of capital
improvement to raise capital significantly above minimum levels. See,
e.g., Citicorp, 72 Federal Reserve Bulletin 726 (1986); Security Pacific
Corporation, 72 Federal Reserve Bulletin 800 (1986).
Accordingly, the Board has determined that the
application should be, and hereby is, approved. This
determination is subject to all of the conditions contained in Regulation Y , including those in sections
225.4(d) and 225.23(b)(3) (12 C.F.R. 225.4(d) and
225.23(b)(3)), and to the Board's authority to require
such modification or termination of the activities of a
holding company or any of its subsidiaries as the
Board finds necessary to assure compliance with, or to
prevent evasion of, the provisions and purposes of the
BHC Act and the Board's regulations and orders
issued thereunder.
This transaction shall not be consummated 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
Cleveland, pursuant to delegated authority.
By order of the Board of Governors, effective
February 26, 1990.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, and Kelley. Absent,and not voting:
Governor LaWare.
JENNIFER J. JOHNSON
Associate
Secretary
of the Board
Peoples Bancorporation
R o c k y Mount, North Carolina
Order Approving
Association
Acquisition
of a
Savings
Peoples Bancorporation, Rocky Mount, North Carolina ("Peoples"), has applied for the Board's approval
under section 4(c)(8) of the Bank Holding Company
Act ("BHC Act") (12 U . S . C . § 1843 et seq.), and
section 225.23 of the Board's Regulation Y (12 C.F.R.
225.23) to acquire Watauga Savings & Loan Association, Inc., Boone, North Carolina ("Watauga"), a
savings association, pursuant to section 225.25(b)(9) of
the Board's Regulation Y (12 C.F.R. 225.25(b)(9)).
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (54 Federal Register 41,680 (1989)). The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the public interest factors set forth in
section 4(c)(8) of the BHC Act.
Peoples, which operates three banking subsidiaries,
is the ninth largest commercial banking organization in
North Carolina, with deposits of approximately $1.1
billion. 1 Watauga is the 52nd largest savings associa-
1. All deposit and market data are as of June 30, 1989.
Legal Developments
tion in North Carolina, with total deposits of approximately $112.8 million. Watauga is currently operating
as a mutual savings association. Prior to the acquisition, Watauga proposes to convert from mutual to
stock form, with Peoples purchasing all of the outstanding stock of Watauga.
Section 601 of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, Pub. L.
101-73, § 6 0 1 , 101 Stat. 183, 408 (as codified at
12 U . S . C . § 1843(i)) permits the Board to approve an
application by a bank holding company to acquire a
savings association under section 4(c)(8) of the BHC
Act. Pursuant to this authority, the Board has determined that the operation of a savings association is
closely related to banking and permissible for bank
holding companies. 12 C.F.R. 225.23(b)(9). 2
In order to approve this application, the Board also
is required to determine that the performance of the
proposed activities by Peoples "can reasonably be
expected to produce benefits to the public . . . that
outweigh possible adverse effects, such as undue
concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking
practices." 12 U . S . C . § 1843(c)(8). This consideration
includes an evaluation of the financial and managerial
resources of the applicant, including its subsidiaries,
and any company to be acquired, and the effect of the
proposed transaction on these resources. 12 C.F.R.
225.24.
The financial and managerial resources and future
prospects of Peoples and its bank subsidiaries, and
Watauga are consistent with approval. Upon consummation of the proposed transaction, Peoples' capitalization will remain above the minimum levels specified
in the Board's Capital Guidelines, without significant
reliance upon intangible assets. In assessing the financial factors, the Board has also considered the proposed recapitalization of Watauga. In this regard, the
Board believes that bank holding companies must
maintain adequate capital at savings associations that
they propose to acquire. Peoples' acquisition of Watauga will result in a capital infusion of approximately
$6 million into Watauga. Upon consummation, Watauga's Tier 1 capital, exclusive of all intangible assets,
will be more than three percent of the savings association's total assets. Further, Peoples has committed
that Watauga will meet all present and future minimum
2. In making this determination, the Board required that savings
associations acquired by bank holding companies conform their direct
and indirect activities to those activities permissible for bank holding
companies under section 4 of the BHC Act. See National City
Corporation, 76 Federal Reserve Bulletin 11 (1990). Peoples has
committed in its application to conform all of the direct and indirect
activities of Watauga to the requirements of section 4(c)(8) of the BHC
Act upon consummation.
255
capital ratios adopted for savings associations by the
Office of Thrift Supervision or the Federal Deposit
Insurance Corporation.
Upon consummation of the proposed acquisition,
Peoples would remain the ninth largest commercial
banking organization in North Carolina, controlling
approximately $1.2 billion in deposits in the state,
representing an approximate 1.85 percent share of
deposits in depository institutions in North Carolina.
Peoples and Watauga do not operate in the same
banking markets. Accordingly, the Board concludes
that the acquisition would not have a significantly
adverse effect upon the concentration of banking organizations in North Carolina, or on existing competition in any relevant market.
There is no evidence in the record to indicate that
approval of this proposal would result in conflicts of
interest, unsound banking practices, or other adverse
effects on the public interest. Moreover, the Board
feels that any adverse effects that may result from this
acquisition are outweighed by the financial and managerial strength that Peoples will provide to Watauga as
a result of the acquisition. Accordingly, based upon
consideration of all the relevant facts, the Board has
determined that the balance of public interest factors it
must consider under section 4(c)(8) of the BHC Act is
favorable and consistent with approval of Peoples'
application to acquire Watauga.
For these reasons and based on all the facts of
record, and subject to the commitments made by
Peoples as set forth in its application and in this Order,
the Board has determined that the proposed application should be, and hereby is, approved. This determination is also subject to all of the conditions set
forth in the Board's Regulation Y, including sections
225.4(d) and 225.23, and to the Board's authority to
require such modifications or termination of the activities of a bank holding company or any of its subsidiaries as the Board finds necessary to assure compliance with, or to prevent evasion of, the provisions and
purposes of the BHC Act and the Board's regulations
and orders issued thereunder. This transaction shall be
made no later than three months after the effective
date of this Order, unless such Order is extended for
good cause by the Board or by the Federal Reserve
Bank of Richmond, pursuant to delegated authority.
By order of the Board of Governors, effective
February 16, 1990.
Voting for this action: Chairman Greenspan and Governors
Johnson, Angell, and Kelley. Absent and not voting: Governors Seger and La Ware.
JENNIFER J. JOHNSON
Associate
Secretary
of the Board
256
Federal Reserve Bulletin • April 1990
S o v r a n Financial Corporation
N o r f o l k , Virginia
Order Approving Application to Underwrite and
Deal in Certain Securities to a Limited Extent
Sovran Financial Corporation, Norfolk, Virginia
("Sovran"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"),
has applied for the Board's approval under section
4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) and
section 225.23 of the Board's Regulation Y (12 C.F.R.
225.23), to engage through its subsidiary, Sovran Investment
Corporation,
Richmond,
Virginia
("Company"), 1 on a limited basis in underwriting and
dealing in:
(1) municipal revenue bonds, including certain industrial development bonds;
(2) 1-4 family mortgage-related securities;
(3) commercial paper, and
(4) consumer-receivable-related securities (collectively "bank-ineligible securities").
Sovran, with total consolidated assets of $23.4 billion, is the 27th largest banking organization in the
nation. 2 Sovran operates 13 subsidiary banks and
engages directly and through subsidiaries in a variety
of permissible nonbanking activities.
Notice of the application, affording interested persons an opportunity to submit comments on the proposal, has been published (55 Federal Register 1097
(1990)). The time for filing comments has expired, and
the Board has considered the application and all
comments received in light of the public interest
factors set forth in section 4(c)(8) of the BHC Act.
The Board has previously determined that the conduct of the proposed bank-ineligible securities underwriting and dealing activity is consistent with section
20 of the Glass-Steagall Act provided the underwriting
subsidiary derives no more than 10 percent of its total
gross revenue from underwriting and dealing in the
approved securities over any two-year period. 3 Sovran
has committed that Company will conduct its underwriting and dealing activities with respect to bankineligible securities subject to the 10 percent revenue
test and the prudential limitations established by the
Board in its Citicorp/Morgan/Bankers
Trust, Chemical, and Modification Orders. The Board has also
found by order that, subject to the prudential framework of limitations established to address the potential
for conflicts of interest, unsound banking practices or
other adverse effects, the proposed underwriting and
dealing activities are so closely related to banking as to
be a proper incident thereto within the meaning of
section 4(c)(8) of the BHC Act. 4
Consummation of the proposal would provide added
convenience to Sovran's customers. In addition, the
Board expects that the de novo entry of Sovran into
the market for some of these services would increase
the level of competition among providers of these
services. Under the framework established in this and
prior decisions, consummation of this proposal is not
likely to result in any significant undue concentration
of resources, decreased or unfair competition, conflicts of interest, unsound banking practices, or other
adverse effects. Accordingly, the Board has determined that the performance of the proposed activities
by Sovran can reasonably be expected to produce
public benefits which would outweigh adverse effects
under the proper incident to banking standard of
section 4(c)(8) of the BHC Act. 5
Based on the above, the Board has determined to
approve Sovran's application subject to all of the
1. Company previously has received authorization from the Board
to:
(1) provide discount securities brokerage services;
(2) buy and sell, as agent on behalf of unaffiliated persons, options
on securities issued or guaranteed by the U.S. Government and its
agencies, and options on U.S. and foreign money market instruments;
(3) purchase and sell gold and silver bullion and gold coins solely for
the account of customers;
(4) underwrite and deal in government obligations and money
market instruments;
(5) provide investment advice relating solely to government obligations and money market instruments;
(6) provide certain fiduciary services;
(7) provide cash management services;
(8) provide certain investment advisory services, and
(9) combine brokerage services with non-fee ancillary investment
advice to corporate and other institutional customers in a limited
range of non-bank eligible securities.
See Sovran Financial Corporation, 74 Federal Reserve Bulletin 504
(1988).
2. Data are as of September 30, 1989.
3. Citicorp, J.P. Morgan & Co. Incorporated and Bankers Trust
New York Corporation, 73 Federal Reserve Bulletin 473 (1987) CCiticorp!Morgan! Bankers Trust"), aff d sub nom., Securities Industry
Association v. Board of Governors of the Federal Reserve System, 839
F.2d 47 (2d Cir. 1988), cert, denied, 108 S.Ct 2830 (1988) C'SIA v.
Board"); and Chemical New York Corporation, The Chase Manhattan Corporation, Bankers Trust New York Corporation, Citicorp,
Manufacturers Hanover Corporation and Security Pacific Corporation, 73 Federal Reserve Bulletin 731 (1987) ("Chemical"); as modified by Order Approving Modifications to Section 20 Orders, 75
Federal Reserve Bulletin 751 (1989) ("Modification Order").
4. Id.
5. Company may also provide services that are necessary incidents
to these approved activities. Any activity conducted as a necessary
incident to the ineligible securities underwriting and dealing activity
must be treated as part of the ineligible securities activity unless
Company has received specific approval under section 4(c)(8) of the
BHC Act to conduct the activity independently. Until such approval
is obtained, any revenues from the incidental activity must be counted
as ineligible revenue subject to the 10 percent gross revenue limit set
forth in the Modification Order.
Legal Developments
terms and conditions set forth in this Order and in the
above-noted Board Orders that relate to this activity. 6
The Board's determination is subject to all of the
conditions set forth in the Board's Regulation Y,
including those in sections 225.4(d) and 225.23(b), and
to the Board's authority to require 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, and to prevent
evasion of, the provisions of the BHC Act and the
Board's regulations and orders issued thereunder.
This transaction shall not be consummated 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
Richmond, pursuant to delegated authority.
By order of the Board of Governors, effective
February 12, 1990.
Voting for this action: Chairman Greenspan and Governors
Seger, Angell, Kelley, and LaWare. Absent and not voting:
Governor Johnson.
JENNIFER J. JOHNSON
Associate
Secretary
of the Board
The Cedar Vale Bank Holding Company
Wellington, Kansas
Order Denying Applications to Become a Bank
Holding Company and to Engage in Insurance
Agency
Activities
The Cedar Vale Bank Holding Company, Wellington,
Kansas ("Cedar Vale"), has applied for the Board's
approval under section 3 of the Bank Holding Company Act (the " B H C Act") (12 U.S.C. § 1842) to
become a bank holding company through the acquisition of 90.5 percent of the voting shares of Bank of
Commerce & Trust Company, Wellington, Kansas
("Bank"). Cedar Vale also has applied under section
4(c)(8) of the BHC Act to acquire all of the voting
shares of Tri-County Financial Corporation, Wellington, Kansas, and thereby to engage in the sale of
credit-related life, accident, and health insurance, and
crop insurance pursuant to section 225.25(b)(8)(vi) of
the Board's Regulation Y (12 C.F.R. 225.25(b)(8)(vi)).
Notice of the applications, affording interested persons an opportunity to comment, has been published
(54 Federal Register 38,738 (1989)). The time for filing
comments has expired, and the Board has considered
6. In light of the decision in SIA v. Board, Sovran will not be subject
to the market share limitation with respect to its ineligible activities
that was originally imposed in the CiticorplMorganlBankers
Trust and
Chemical Orders.
257
the applications and all comments received in light of
the factors set forth in sections 3 and 4 of the BHC
Act.
Cedar Vale is a non-operating company that formerly operated a bank. 1 Bank is the 245th largest
commercial banking organization in Kansas, controlling deposits of $25.4 million, representing less than
one percent of the total deposits in commercial banking organizations in the state. 2 Bank is the fifth largest
of 11 commercial banking organizations in the Sumner
County, Kansas, banking market, controlling 10.3
percent of the total deposits in commercial banking
organizations in the market. 3 This proposal represents
a restructuring of existing ownership interests. 4 Consummation of this proposal would not result in any
significantly adverse effect on the concentration of
banking resources or competition in any relevant
market.
In evaluating this application, the Board is required
under section 3 of the BHC Act to consider the
financial and managerial resources of Cedar Vale and
Bank and the effect of the proposed acquisition on
those resources and on the future prospects of both
Bank and Cedar Vale. The Board previously has
stated that a bank holding company should serve as a
source of financial strength to its subsidiary banks and
that the Board would examine closely the condition of
an applicant and its subsidiaries in each case with this
consideration in mind. The Board also has cautioned
against the assumption of substantial debt by a bank
holding company because of concern that a holding
company with substantial debt would not have the
financial flexibility necessary to meet unexpected
problems in its subsidiary banks and could be forced to
place substantial demands on the subsidiary banks to
meet debt-servicing requirements. 5
Cedar Vale proposes to finance the transaction with
substantial debt. Bank's current parent is debt free,
and thus the effect of the transaction would be to
transfer Bank from a holding company without debt to
a holding company with substantial debt obligations.
Cedar Vale's controlling shareholder, who currently
1. Cedar Vale received approval in 1975 to become a bank holding
company through the acquisition of Cedar Vale State Bank, Cedar
Vale, Kansas. Cedar Vale was acquired by its current owner in 1984.
Cedar Vale State Bank failed and was closed by the State of Kansas
on January 21, 1988.
2. Banking data are as of December 31, 1987.
3. The Sumner County, Kansas banking market is approximated by
Sumner County, Kansas.
4. Cedar Vale proposes to acquire Bank from Sumner County
Bancshares, Wellington, Kansas. Cedar Vale and Sumner County
Bancshares are controlled by a common shareholder, who serves as
president and chief executive officer of each company.
5. See St. Croix Valley Bancshares, Inc., 75 Federal
Reserve
Bulletin 575 (1989); F.N.B.A. Holding Company, Inc., 75 Federal
Reserve Bulletin 711 (1989).
258
Federal Reserve Bulletin • April 1990
services Cedar Vale's debt, states that the proposed
acquisition of Bank would provide Cedar Vale a
source of income and enable Cedar Vale to avail itself
of certain tax benefits.
Cedar Vale projects that it will be able to reduce the
acquisition debt in a manner consistent with Board
policy. In light of the historical performance and
overall financial condition of Bank and Cedar Vale,
however, Cedar Vale's earnings projections appear to
be overly optimistic, even after consideration of potential tax benefits that Cedar Vale may gain as a result
of the proposed acquisition of Bank. In particular, the
Board's analysis of Bank's earnings performance during the past five years and Bank's overall financial
condition, including Bank's current asset quality, indicates that Bank may be unable to provide income
sufficient to support Cedar Vale's debt-servicing requirements. In addition, although Bank's capital is
above the minimum levels set forth in the Board's
Capital Adequacy Guidelines, Bank's capital ratio has
declined during the past year. 6 Finally, the continuing
weak condition of Bank's loan portfolio may indicate
the need to make additional provisions for loan losses.
Upon careful evaluation of more conservative projections based on the historical performance and overall
financial condition of Bank and Cedar Vale, it is the
Board's judgment that Cedar Vale would not have
sufficient financial flexibility to service its debt without
unduly straining the resources of the proposed combined organization and Bank.
The Board has approved proposals involving relatively high levels of debt that otherwise met the terms
of the Board's Policy Statement for Formation of
Small One-Bank Holding Companies (the "Policy
Statement") in order to facilitate the transfer of ownership of small banks to local owners. 7 In this case, a
common shareholder controls both the selling and
acquiring companies and would remain in control of
the acquiring company following consummation of the
transaction. Based on these facts, the Board concludes
that consummation of this proposal would not result in
an actual change in ownership and control of Bank. 8
Based on the facts of record and for the reasons stated
above, the Board believes that even if the proposed
transaction did qualify for treatment under the Policy
Statement guidelines, Cedar Vale would not have
sufficient financial resources or flexibility to service its
6. Capital Adequacy Guidelines for Bank Holding Companies and
State Member Banks: Leverage Measure, 12 C.F.R. Part 225, Appendix B.
7. Oxford Agency, Inc., 71 Federal Reserve Bulletin 348 (1985);
Policy Statement for Formation of Small One-Bank Holding Companies, 12 C.F.R. Part 225, Appendix C.
8. See Spur Bancshares, Inc., 69 Federal Reserve Bulletin 806
(1983).
proposed debt. Accordingly, based upon all the facts
of record in this case, the Board finds that financial
considerations are not consistent with approval of this
application. 9
Managerial factors and convenience and needs considerations in this case do not lend sufficient weight to
warrant 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 Cedar Vale
and Bank. Such adverse factors are not outweighed by
any pro-competitive effects, by significant benefits that
would better serve the convenience and needs of the
community to be served, or by other factors. Accordingly, it is the Board's judgment that approval of these
applications would not be in the public interest and
that the applications should be, and hereby are, denied.
By order of the Board of Governors, effective
February 9, 1990.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Kelley, and La Ware.
JENNIFER J. JOHNSON
Associate
Secretary
of the Board
9. Applicant contends that these applications were approved by
operation of law as of January 22, 1990, and that Applicant, therefore,
may consummate the proposed transactions without Board action.
Applicant bases this argument on its opinion that the ninety-one day
period stipulated in the BHC Act and the Board's regulations for
Board action on an application began upon the acceptance of these
applications for processing and thus has expired.
The terms of the BHC Act, the Board's regulations, and relevant
court cases do not support Applicant's contention. The BHC Act
provides that the ninety-one day period does not begin until the
submission to the Board of the completed record on the application.
12 U.S.C. §§ 1842(b)(1), 1843(c). The Board's regulations provide that
the record on an application is not complete until the "date of receipt
by the Board of the last relevant material regarding the application that
is needed for the Board's decision, if the material is received from a
source outside the Federal Reserve System." 12 C.F.R. 225.14(g); see
also 12 C.F.R. 225.23(h); accord First Lincolnwood Corp. v. Board of
Governors of the Federal Reserve System, 546 F.2d 718 (7th Cir.
1976), modified, 560 F.2d 258 (7th Cir. 1977), rev'd on other grounds,
439 U.S. 234 (1978).
Applicant has submitted additional information regarding these
applications on several occasions since acceptance of the application for processing, including letters dated November 10, 1989, and
January 19, 1990. This additional information concerned Bank's
asset quality, earnings, and capital. Additional material information
was also received from the FDIC on November 15, 1989, regarding
the financial condition of Bank. This information, all received from
sources outside the System, was necessary to the Board's decision
regarding the financial and managerial factors in this case. In light of
the relevant, material nature of information received by the Board
through January 19, 1990, the Board finds that the ninety-one day
period in this case has not expired as of the date of this Order and
Applicant is not entitled as a matter of law to consummate this
proposal.
Legal Developments
Orders Issued Under Financial Institutions
Reform, Recovery, and Enforcement Act
February 2, 1990
Lee S. Adams
Counsel
Banc One Corporation
100 East Broad Street
Columbus, Ohio 43271
259
Based on the foregoing and all of the other facts
of record, the Staff Director of the Division of
Banking Supervision and Regulation and the General
Counsel of the Board, acting pursuant to authority
delegated by the Board of Governors, hereby approve your request to engage in the proposed transaction under section 5(d)(3) of the FDI Act. This
approval is subject to Banc One obtaining the required approval of the appropriate Federal banking
agency for the proposed merger under the Bank
Merger Act.
Dear Mr. Adams:
Very truly yours,
Banc One Corporation, Columbus, Ohio ("Banc
One"), proposes that its bank subsidiary, Bank One,
Texas, N.A., Dallas, Texas, purchase the assets and
assume the liabilities of Banc One Federal Savings
Bank, Dallas, Texas, its savings association subsidiary, ("Banc One Savings"). Banc One has requested
Board approval of this transaction pursuant to section
5(d)(3) of the Federal Deposit Insurance Act ("FDI
Act") as amended by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (Pub.
L. No. 101-73, § 206, 103 Stat. 183, 199 (1989)). Banc
One Savings has been established to acquire certain
assets and assume deposit liabilities of Bright Banc
Savings Association, Dallas, Texas ("Bright").
The record in this case shows that:
(1) The aggregate amount of the total assets of all
depository institution subsidiaries of Banc One is
$26.7 billion, an amount which is not less than 200
percent of the total assets of Banc One Savings,
which currently has $1.9 billion in total assets;
(2) Banc One and all of its bank subsidiaries currently meet all applicable capital standards and,
upon consummation of the proposed transactions,
will continue to meet all applicable capital standards;
(3) The transaction is not in substance the acquisition of a Bank Insurance Fund member bank by a
Savings Association Insurance Fund member;
(4) Community, the predecessor to Banc One Savings, had tangible capital of less than 4 percent
during the quarter preceding its acquisition by Banc
One;
(5) The transaction, which involves the purchase
of assets and assumption of liabilities of Banc One
Savings, a savings association located in Wisconsin, by bank subsidiaries of Banc One, a bank
holding company whose banking subsidiaries' operations are principally conducted in Ohio, would
comply with the requirements of section 3(d) of the
Bank Holding Company Act if Banc One Savings
were a state bank which Banc One was applying to
acquire.
William W. Wiles
Secretary of the Board
cc: Federal Reserve Bank of Cleveland
February 2, 1990
Lee S. Adams
Counsel
Banc One Corporation
100 East Broad Street
Columbus, Ohio 43271
Dear Mr. Adams:
Banc One Corporation, Columbus, Ohio ("Banc
One"), proposes that its bank subsidiaries, Bank
One, Appleton, N . A . , Appleton, Wisconsin; Bank
One, Oshkosh, N . A . , Oshkosh, Wisconsin; Bank
One Campbellsport, Campbellsport, Wisconsin; and
Bank One, Green Bay, Green Bay, Wisconsin, purchase the assets and assume the liabilities of Banc
One Savings, Fond du Lac, Wisconsin, its savings
association subsidiary, ("Banc One Savings"). Banc
One has requested Board approval of this transaction
pursuant to section 5(d)(3) of the Federal Deposit
Insurance Act ("FDI Act") as amended by the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (Pub. L. No. 101-73, § 206,
103 Stat. 183, 199 (1989)). Banc One Savings has
been established to acquire certain assets and assume deposit liabilities of Community Savings &
Loan Association, Fond du Lac, Wisconsin ("Community").
The record in this case shows that:
(1) The aggregate amount of the total assets of all
depository institution subsidiaries of Banc One is
$26.7 billion, an amount which is not less than 200
percent of the total assets of Banc One Savings,
which currently has $144.2 million in total assets;
(2) Banc One and all of its bank subsidiaries cur-
260
Federal Reserve Bulletin • April 1990
rently meet all applicable capital standards and,
upon consummation of the proposed transactions,
will continue to meet all applicable capital standards;
(3) The transaction is not in substance the acquisition of a Bank Insurance Fund member bank by
a Savings Association Insurance Fund member;
(4) Community, the predecessor to Banc One Savings, had tangible capital of less than 4 percent
during the quarter preceding its acquisition by Banc
One;
(5) The transaction, which involves the purchase
of assets and assumption of liabilities of Banc One
Savings, a savings association located in Wisconsin, by bank subsidiaries of Banc One, a bank
holding company whose banking subsidiaries' operations are principally conducted in Ohio, would
comply with the requirements of section 3(d) of the
Bank Holding Company Act if Banc One Savings
were a state bank which Banc One was applying to
acquire.
Based on the foregoing and all of the other facts of
record, the Staff Director of the Division of Banking
Supervision and Regulation and the General Counsel
of the Board, acting pursuant to authority delegated by
the Board of Governors, hereby approve your request
to engage in the proposed transaction under section
5(d)(3) of the FDI Act. This approval is subject to
Banc One obtaining the required approval of the
appropriate Federal banking agency for the proposed
merger under the Bank Merger Act.
Very truly yours,
William W. Wiles
Secretary of the Board
cc: Federal Reserve Bank of Cleveland
February 2, 1990
John A. Newcomer
Planning and Development Officer
Peoples State Bank
830 Pleasant Street
St. Joseph, Michigan 49085
Dear Mr. Newcomer:
Pinnacle Financial Services, Inc., St. Joseph, Michigan ("Pinnacle"), proposes that its bank subsidiary,
Peoples State Bank, St. Joseph, Michigan, purchase
the assets and assume the liabilities of PSB S&L, St.
Joseph, Michigan, its savings association subsidiary.
Pinnacle has requested Board approval of this transaction pursuant to section 5(d)(3) of the Federal Deposit Insurance Act ("FDI Act") as amended by the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (Pub. L. No. 101-73, § 206, 103
Stat. 183, 199 (1989)). PSB S&L has been established
to acquire certain assets and assume deposit liabilities
of Peoples Savings Association, St. Joseph, Michigan
("Peoples").
The record in this case shows that:
(1) The aggregate amount of the total assets of all
depository institution subsidiaries of Pinnacle is
$230 million, an amount which is not less than 200
percent of the total assets of PSB S&L, which
currently has $75 million in total assets;
(2) Pinnacle and all of its bank subsidiaries currently meet all applicable capital standards and,
upon consummation of the proposed transactions,
will continue to meet all applicable capital standards;
(3) The transaction is not in substance the acquisition of a Bank Insurance Fund member bank by a
Savings Association Insurance Fund member;
(4) Peoples, the predecessor to PSB S&L, had
tangible capital of less than 4 percent during the
quarter preceding its acquisition by Pinnacle;
(5) The transaction, which involves the purchase
of assets and assumption of liabilities of PSB
S&L, a savings association located in Michigan, by
a bank subsidiary of Pinnacle, a bank holding
company whose banking subsidiaries' operations
are principally conducted in Michigan, would comply with the requirements of section 3(d) of the
Bank Holding Company Act if PSB S&L were a
state bank which Pinnacle was applying to acquire.
Based on the foregoing and all of the other facts of
record, the Staff Director of the Division of Banking
Supervision and Regulation and the General Counsel
of the Board, acting pursuant to authority delegated
by the Board of Governors, hereby approve your
request to engage in the proposed transaction under
section 5(d)(3) of the FDI Act. This approval is
subject to Pinnacle obtaining the required approval
of the appropriate Federal banking agency for the
proposed merger under the Bank Merger Act.
Very truly yours,
William W. Wiles
Secretary of the Board
cc: Federal Reserve Bank of Chicago
Legal Developments
APPLICATIONS
APPROVED
UNDER BANK HOLDING COMPANY
261
ACT
By Federal Reserve Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon
request to the Reserve Banks.
Section 3
Applicant(s)
Alton Bancshares, Inc.,
Grandin, Missouri
Border Bancshares, Inc.,
Greenbush, Minnesota
Center Banks Incorporated,
Skaneateles, N e w York
Century South Banks, Inc.,
Dahlonega, Georgia
Century South Banks, Inc.,
Dahlonega, Georgia
Citizens National Corporation,
Naples, Florida
Claremont Financial Services,
Inc.,
St. Paul, Minnesota
Community National
Bancorporation,
Ashburn, Georgia
Emclaire Financial Corp.,
Emlenton, Pennsylvania
Farmers National Bancorp, Inc.
Geneseo, Illinois
Farmers State Bancorporation,
Inc.,
Hoffman, Illinois
The Farmers State Bank
Corporation of Fort Morgan,
Fort Morgan, Colorado
FCFT, Inc.,
Princeton, West Virginia
First Virginia Banks, Inc.,
Falls Church, Virginia
F.N.B. Corporation,
Hermitage, Pennsylvania
Greeley Bancshares, Inc.,
Greeley, Kansas
Bank(s)
Alton Bank,
Alton, Missouri
Badger State Bank,
Badger, Minnesota
Skaneateles Savings Bank,
Skaneateles, New York
First Union Bancorp, Inc.,
Blairsville, Georgia
Mountain Bank of Georgia,
Hiawassee, Georgia
Citizens National Bank of
Naples,
Naples, Florida
Security State Bank of
Claremont,
Claremont, Minnesota
Community National Bank,
Ashburn, Georgia
Farmers National Bank of
Emlenton,
Emlenton, Pennsylvania
Woodhull State Bank,
Woodhull, Illinois
Farmers State Bank of Hoffman,
Hoffman, Illinois
The Farmers State Bank of Fort
Morgan,
Fort Morgan, Colorado
First Community Bancshares,
Inc.,
Princeton, West Virginia
Flat Top Bankshares, Inc.,
Bluefield, West Virginia
N e w Bank,
Cockeysville, Maryland
Emclaire Financial Corp.,
Emlenton, Pennsylvania
Bank of Greeley,
Greeley, Kansas
Reserve
Bank
Effective
date
St. Louis
February 13, 1990
Minneapolis
February 2, 1990
N e w York
February 16, 1990
Atlanta
February 2, 1990
Atlanta
February 2, 1990
Atlanta
January 29, 1990
Minneapolis
February 1, 1990
Atlanta
February 16, 1990
Cleveland
February 2, 1990
Chicago
February 14, 1990
St. Louis
February 1, 1990
Kansas City
January 26, 1990
Richmond
February 9, 1990
Richmond
January 25, 1990
Cleveland
February 2, 1990
Kansas City
February 16, 1990
262
Federal Reserve Bulletin • April 1990
Section 3—Continued
Applicant(s)
High Point Bank Corporation,
High Point, North Carolina
Lonoke Bancshares, Inc.,
Lonoke, Arkansas
Metro Financial Corporation,
Atlanta, Georgia
Mid-Michigan Bancorp, Inc.,
Portland, Michigan
Montgomery Bancorp, Inc.,
Bethesda, Maryland
New East Bancorp,
Raleigh, North Carolina
Omega Financial Corporation,
State College, Pennsylvania
Pennyrile Bancshares, Inc.,
Hopkinsville, Kentucky
Planters & Merchants
Bancshares, Inc.,
Gillett, Arkansas
Sun State Capital Corporation,
Las Vegas, Nevada
Synovus Financial Corp.,
Columbus, Georgia
TB&C Bancshares, Inc.,
Columbus, Georgia
Synovus Financial Corp.,
Columbus, Georgia
TB&C Bancshares, Inc.,
Columbus, Georgia
Union Bancshares, Inc.,
Blairsville, Georgia
Walden Holding Company,
Jonesboro, Arkansas
Bank(s)
Reserve
Bank
Effective
date
High Point Bank and Trust
Company,
High Point, North Carolina
First State Bank,
Lonoke, Arkansas
Metro Bank,
Atlanta, Georgia
Maynard-Allen State Bank,
Portland, Michigan
Prince George's National Bank,
Landover, Maryland
New East Bank of Elizabeth
City,
Elizabeth City, North Carolina
Mifflinburg Bancorp, Inc.,
Mifflinburg, Pennsylvania
Pennyrile Citizens Bank and
Trust Company,
Hopkins ville, Kentucky
Planters & Merchants Bank,
Gillett, Arkansas
Richmond
February 13, 1990
St. Louis
February 7, 1990
Atlanta
January 26, 1990
Chicago
February 21, 1990
Richmond
February 5, 1990
Richmond
February 5, 1990
Philadelphia
January 29, 1990
St. Louis
January 25, 1990
St. Louis
January 26, 1990
Sun State Bank,
Las Vegas, Nevada
NBWC Corporation,
Monroe, Georgia
San Francisco
February 16, 1990
Atlanta
February 5, 1990
State Bancshares, Inc.,
Enterprise, Alabama
Atlanta
February 9, 1990
Citizens Bank,
Murphy, North Carolina
Baker Financial Corporation,
Pocahontas, Arkansas
Atlanta
January 31, 1990
St. Louis
February 12, 1990
Legal Developments
263
Section 4
Nonbanking
Activity/Company
Applicant(s)
A.B.N. - Stichting,
Amsterdam, The Netherlands
Alegemene Bank Nederland
N.V.,
Amsterdam, The Netherlands
ABN/LaSalle North America,
Inc.,
Chicago, Illinois
LaSalle National Corporation,
Chicago, Illinois
The Chase Manhattan
Corporation,
N e w York, N e w York
Citicorp,
N e w York, N e w York
MNC Financial, Inc.,
Baltimore, Maryland
MNC Financial, Inc.,
Baltimore, Maryland
PSB Financial Corporation,
Many, Louisiana
Springfield Investment Company,
Springfield, Minnesota
APPLICATIONS
APPROVED
Reserve
Bank
Effective
date
LaSalle National Trust, N.A.
Chicago, Illinois
Chicago
February 21, 1990
Chase Securities, Inc.,
N e w York, New York
N e w York
February 5, 1990
American Financial Systems,
Inc.,
Haverford, Pennsylvania
Mid-Atlantic Holdings, Inc.,
Fayetteville, North Carolina
Newton Finance Company, Inc.
Covington, Georgia
H & R Block,
Many, Louisiana
Morgan Insurance Agency,
Morgan, Minnesota
Ziegenhagen Insurance Agency,
Clements, Minnesota
N e w York
February 8, 1990
Richmond
January 30, 1990
Richmond
February 7, 1990
Dallas
January 26, 1990
Minneapolis
February 16, 1990
UNDER BANK MERGER
ACT
By Federal Reserve Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon
request to the Reserve Banks.
Applicant(s)
Metro Bank,
Atlanta, Georgia
N e w Bank,
Cockeysville, Maryland
Bank(s)
Metro Interim Bank,
Atlanta, Georgia
Clifton Trust Bank,
Cockeysville, Maryland
Reserve
Bank
Effective
date
Atlanta
January 26, 1990
Richmond
January 25, 1990
264
Federal Reserve Bulletin • April 1990
PENDING CASES INVOLVING
GOVERNORS
THE BOARD OF
This list of pending cases does not include suits
against the Federal Reserve Banks in which the Board
of Governors is not named a party.
BancTEXAS Group, Inc. v. Board of Governors, No.
CA 3-90-0236-R (N.D. Texas, filed February 2,
1990). Plaintiff seeks temporary restraining order
and preliminary injunction enjoining the Board from
enforcing a temporary order to cease and desist
requiring injection of capital into plaintiffs subsidiary banks under the Board's source of strength
doctrine. The district court denied the TRO request
on February 6, 1990.
Woodward v. Board of Governors, No. 90-3031 (11th
Cir., filed January 16, 1990); Kaimowitz v. Board of
Governors, No. 90-3067 (11th Cir., filed January 23,
1990). Petitions for review of Board order dated
December 22, 1989, approving application by First
Union Corporation to acquire Florida National
Banks. Petitioners object to approval on Community Reinvestment Act grounds. The court denied
their motion for a stay of the Board's order, and is
considering jurisdictional issues raised by the
Board.
Securities Industry Association v. Board of Governors, No. 89-1730 (D.C. Cir., filed November 29,
1989). Petition for review of Board order approving
application under section 4(c)(8) to engage in private
placement and riskless principal activities. The case
has been held in abeyance pending the outcome of
Securities Industry Association v. Board of Governors, No. 89-1127 (D.C. Circuit).
Babcock and Brown Holdings, Inc., et al. v. Board of
Governors, No. 89-70518 (9th Cir., filed November 22, 1989). Petition for review of Board determination that a company would control a proposed
insured bank for purposes of the Bank Holding
Company Act.
Consumers Union of U.S., Inc. v. Board of Governors, No. 89-3008 (D.D.C., filed November 1,
1989). Challenge to various aspects of amendments
to Regulation Z implementing the Home Equity
Loan Consumer Protection Act. The Board and
Consumers Union have filed cross-motions for summary judgment.
Synovus Financial Corp. v. Board of Governors, No.
89-1394 (D.C. Cir., filed June 21, 1989). Petition for
review of Board order permitting relocation of a
bank holding company's national bank subsidiary
from Alabama to Georgia.
MCorp v. Board of Governors, N o . 89-2816 (5th Cir.,
filed May 2, 1989). Appeal of preliminary injunction
against the Board enjoining pending and future
enforcement actions against bank holding company
now in bankruptcy. Awaiting decision.
Independent Insurance Agents of America v. Board of
Governors, No. 89-4030 (2d Cir., filed March 9,
1989). Petition for review of Board order ruling that
the non-banking restrictions of section 4 of the Bank
Holding Company Act apply only to non-bank subsidiaries of bank holding companies. The Board's
order was upheld on November 29, 1989. Petitions
in the Second Circuit and the Supreme Court for a
stay pending review have been denied.
Securities Industry Association
v. Board of Governors, No. 89-1127 (D.C. Cir., filed February 16,
1989). Petition for review of Board order permitting
five bank holding companies to engage to a limited
extent in additional securities underwriting and
dealing activities. Oral argument is scheduled for
March 6, 1990.
American Land Title Assoc. v. Board of Governors,
No. 88-1872 (D.C. Cir., filed December 16, 1988).
Petition for review of Board order ruling that exemption G from the section 4(c)(8) prohibition on
insurance activities, which grandfathers insurance
agency activities by bank holding companies that
conducted insurance agency activities before January 1, 1971, does not limit those grandfathered
activities to the specific ones undertaken at that
time. Board's order upheld on December 29, 1989.
MCorp v. Board of Governors, No. CA3-88-2693
(N.D. Tex., filed October 10, 1988). Application for
injunction to set aside temporary cease and desist
orders. Stayed pending outcome of MCorp v. Board
of Governors in Fifth Circuit.
White v. Board of Governors, No. CU-S-88-623-RDF
(D. Nev., filed July 29, 1988). Age discrimination
complaint.
Cohen v. Board of Governors, No. 88-1061 (D.N.J.,
filed March 7, 1988). Action seeking disclosure of
documents under the Freedom of Information Act.
Lewis v. Board of Governors, Nos. 87-3455, 87-3545
(11th Cir., filed June 25, August 3, 1987). Petition for
review of Board orders approving applications of
non-Florida bank holding companies to expand activities of Florida trust company subsidiaries. Matter stayed pending Supreme Court review of Continental Illinois Corp. v. Lewis, 827 F.2d 1517 (11th
Cir. 1987).
Legal Developments
FINAL ENFORCEMENT ORDERS ISSUED BY
BOARD OF GOVERNORS
Bank D a g a n g N e g a r a
Jakarta, I n d o n e s i a
The Federal Reserve Board announced on February 21, 1990, the issuance of a Cease and Desist
Order against the Bank Dagang Negara, Jakarta,
Indonesia, and its Los Angeles Agency.
Ben D.
Former
Flower
Flower
Campbell
Chairman o f the Board o f Directors
Mound Bank
Mound, Texas
The Federal Reserve Board announced on February 6,
1990, the issuance of an Order of Prohibition against
265
Ben D. Campbell, the former Chairman of the board of
directors of the Flower Mound Bank, Flower Mound,
Texas. Mr. Campbell, who consented to the issuance
of the Order of Prohibition, is henceforth prohibited
from participating, including serving as an officer,
director or employee, in any manner in the conduct of
the affairs of any institution supervised by a financial
institution supervisory agency without the approval of
the appropriate federal banking agency.
A1
Financial and Business Statistics
N O T E . The following tables may have some
discontinuities in historical data for some series
beginning with the December 1989 issue: 1.12,
1.33, 1.44, 1.52, 1.57-1.60, 2.10, 2.12, 2.13, 3.10,
3.11, 3.15-3.20, 3.22-3.25, 3.27, 3.28, and 4.30.
For a more detailed explanation of the changes,
see the announcement on page 16 of the January
CONTENTS
COMMERCIAL
Domestic
MONEY
Financial
Statistics
STOCK AND BANK
1990
BULLETIN.
A17 Major nondeposit funds
A18 Assets and liabilities, last-Wednesday-of-month
series
WEEKLY
A19
A20
A21
A22
INSTRUMENTS
A7 Federal Reserve Bank interest rates
A8 Reserve requirements of depository institutions
A9 Federal Reserve open market transactions
RESERVE
AND CREDIT
AGGREGATES
A12 Aggregate reserves of depository institutions
and monetary base
A13 Money stock, liquid assets, and debt measures
A15 Bank debits and deposit turnover
A16 Loans and securities—All commercial banks
COMMERCIAL
BANKS
MARKETS
A23 Commercial paper and bankers dollar
acceptances outstanding
A23 Prime rate charged by banks on short-term
business loans
A24 Interest rates—money and capital markets
A25 Stock market—Selected statistics
A26 Selected financial institutions—Selected assets
and liabilities
BANKS
A10 Condition and Federal Reserve note statements
A l l Maturity distribution of loan and security
holdings
MONETARY
REPORTING
Assets and liabilities
All reporting banks
Banks in N e w York City
Branches and agencies of foreign banks
Gross demand deposits—individuals,
partnerships, and corporations
FINANCIAL
FEDERAL
INSTITUTIONS
CREDIT
A3 Reserves, money stock, liquid assets, and debt
measures
A4 Reserves of depository institutions, Reserve
Bank credit
A5 Reserves and borrowings—Depository
institutions
A6 Selected borrowings in immediately available
funds—Large member banks
POLICY
BANKING
FEDERAL
A28
A29
A30
A30
FINANCE
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 securities
dealers—Transactions
A32 U.S. government securities dealers—Positions
and financing
A33 Federal and federally sponsored credit
agencies—Debt outstanding
2 Federal Reserve Bulletin • April 1990
SECURITIES MARKETS
AND
CORPORATE
FINANCE
International
A34 N e w security issues—State and local
governments and corporations
A35 Open-end investment companies—Net sales
and asset position
A35 Corporate profits and their distribution
A35 Total nonfarm business expenditures on new
plant and equipment
A36 Domestic finance companies—Assets and
liabilities and business credit
SUMMARY
REAL
Statistics
STATISTICS
A55
A56
A56
A56
U.S. international transactions—Summary
U.S. foreign trade
U.S. reserve assets
Foreign official assets held at Federal Reserve
Banks
A57 Foreign branches of U.S. banks—Balance
sheet data
A59 Selected U.S. liabilities to foreign official
institutions
ESTATE
REPORTED BY BANKS
A37 Mortgage markets
A38 Mortgage debt outstanding
CONSUMER INSTALLMENT
CREDIT
A39 Total outstanding and net change
A40 Terms
FLOW OF FUNDS
A41 Funds raised in U.S. credit markets
A43 Direct and indirect sources of funds to credit
markets
A44 Summary of credit market debt outstanding
A45 Summary of credit market claims, by holder
Nonfinancial
SELECTED
MEASURES
Statistics
A46 Nonfinancial business activity—Selected
measures
A47 Labor force, employment, and unemployment
A48 Output, capacity, and capacity utilization
A49 Industrial production—Indexes and gross value
A51 Housing and construction
A52 Consumer and producer prices
A53 Gross national product and income
A54 Personal income and saving
STATES
A59
A60
A62
A63
Liabilities to and claims on foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A63 Banks' own claims on unaffiliated foreigners
A64 Claims on foreign countries—Combined
domestic offices and foreign branches
REPORTED BY NONBANKING
ENTERPRISES IN THE UNITED
BUSINESS
STATES
A65 Liabilities to unaffiliated foreigners
A66 Claims on unaffiliated foreigners
SECURITIES
Domestic
IN THE UNITED
HOLDINGS
AND
TRANSACTIONS
A67 Foreign transactions in securities
A68 Marketable U.S. Treasury bonds and
notes—Foreign transactions
INTEREST
AND EXCHANGE
RATES
A69 Discount rates of foreign central banks
A69 Foreign short-term interest rates
A70 Foreign exchange rates
A71 Guide to Tabular
Presentation,
Statistical Releases, and Special
Tables
Money Stock and Bank Credit
A3
1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES
Annual rates of change, seasonally adjusted in percent1
1989
1990
1989
Monetary and credit aggregates
Q4r
Qlr
Q2'
-4.2
-4.4
.0
4.2
-8.7
-7.6
-10.2
1.6
.3
.1
8.3
3.2
5.7
5.5
7.8
4.1
9.6
8.6
9.3
4.9
-.1
2.3
3.9
5.2
8.4
-4.4
1.6
3.3
5.0
7.9
1.8
6.9
3.9
4.3
7.2
5.1
7.1
1.9
2.7
8.0
3.2
9.6
3.7
9.1
8.7
-6.8
-5.5
22.4
16.5
-11.5
25.9
16.3
-7.7
5.7
.7
7.7
8.6
Q3
Sept/
Oct/
Nov/
Dec/
Jan.
8.1
6.5
11.0
4.3
-1.1
.4
3.1
1.6
8.5
9.1
10.3
7.5
-4.4
-6.4
-8.0
10.7
4.0
6.3
.0
1.3
7.1
7.8
6.9
1.4
1.7
8.6
2.0
7.3
4.0
3.8
8.9
8.2
7.8
4.0
5.0
5.6
.2
4.0
2.6
n.a.
n.a.
7.7
-16.7
7.1
-22.9
6.6
-19.2
9.0
-8.8
7.7
-10.7
5.3
-2.8
.4
11.9
3.0
7.1
11.2
2.6
6.3
6.9
-1.9
6.3
14.8
5.0
9.5
10.9
7.9
7.3
9.4
-.2
8.9
6.7
.5
-14.9
10.7
7.5
-5.2
8.8
-10.7
.3
-2.5
-28.7
2.9
-.7
-29.5
-1.7
-5.8
-32.8
1.7
-4.1
-32.0
-.1
-1.0
-20.5
.4
-5.3
-30.2
6.9
8.2
4.6
8.0
9.6
7.5
11.0
5.9
9.8
8.2
11.1
8.2
3.6
6.2
institutions2
1
2
3
4
Reserves of depository
Total
Required
Nonborrowed
Monetary base
5
6
7
8
9
Concepts of money, liquid assets, and debt4
Ml
M2
M3
L
Debt
Nontrgnsaction
10 In M2 5
11 In M3 only 6
r
components
Time and savings deposits
Commercial banks
Savings'
Small-denomination time
Large-denomination time 9,10
Thrift institutions
Savings'
15
16 Small-denomination time
17 Large-denomination time 9
12
13
14
Debt components4
18 Federal
19 Nonfederal
1. Unless otherwise noted, rates of change are calculated from average
amounts outstanding in preceding month or quarter.
2. Figures incorporate adjustments for discontinuities associated with the
implementation of the Monetary Control Act and other regulatory changes to
reserve requirements. To adjust for discontinuities due to changes in reserve
requirements on reservable nondeposit liabilities, the sum of such required
reserves is subtracted from the actual series. Similarly, in adjusting for discontinuities in the monetary base, required clearing balances and adjustments to
compensate for float also are subtracted from the actual series.
3. The monetary base not adjusted for discontinuities consists of total
reserves plus required clearing balances and adjustments to compensate for float
at Federal Reserve Banks plus the currency component of the money stock less
the amount of vault cash holdings of thrift institutions that is included in the
currency component of the money stock plus, for institutions not having required
reserve balances, the excess of current vault cash over the amount applied to
satisfy current reserve requirements. After the introduction of contemporaneous
reserve requirements (CRR), currency and vault cash figures are measured over
the weekly computation period ending Monday.
Before CRR, all components of the monetary base other than excess reserves
are seasonally adjusted as a whole, rather than by component, and excess
reserves are added on a not seasonally adjusted basis. After CRR, the seasonally
adjusted series consists of seasonally adjusted total reserves, which include
excess reserves on a not seasonally adjusted basis, plus the seasonally adjusted
currency component of the money stock plus the remaining items seasonally
adjusted as a whole.
4. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults
of depository institutions; (2) travelers checks of nonbank issuers; (3) demand
deposits at all commercial banks other than those due to depository institutions,
the U.S. government, and foreign banks and official institutions less cash items in
the process of collection and Federal Reserve float; and (4) other checkable
deposits (OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, credit union
share draft accounts, and demand deposits at thrift institutions.
M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs)
issued by all commercial banks and overnight Eurodollars issued to U.S. residents
by foreign branches of U.S. banks worldwide, Money Market Deposit Accounts
(MMDAs), savings and small-denomination time deposits (time deposits—including retail RPs—in amounts of less than $100,000), and balances in both taxable and
tax-exempt general purpose and broker-dealer money market mutual funds.
Excludes individual retirement accounts (IRA) and Keogh balances at depository
n.a.
n.a.
institutions and money market funds. Also excludes all balances held by U.S.
commercial banks, money market funds (general purpose and broker-dealer),
foreign governments and commercial banks, and the U.S. government.
M3: M2 plus large-denomination time deposits and term RP liabilities (in
amounts of $100,000 or more) issued by commercial banks and thrift institutions,
term Eurodollars held by U.S. residents at foreign branches of U.S. banks
worldwide and at all banking offices in the United Kingdom and Canada, and
balances in both taxable and tax-exempt, institution-only money market mutual
funds. Excludes amounts held by depository institutions, the U.S. government,
money market funds, and foreign banks and official institutions. Also subtracted
is the estimated amount of overnight RPs and Eurodollars held by institution-only
money market mutual funds.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term
Treasury securities, commercial paper and bankers acceptances, net of money
market mutual fund holdings of these assets.
Debt: Debt of domestic nonfinancial sectors consists of outstanding credit
market debt of the U.S. government, state and local governments, and private
nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers
acceptances, and other debt instruments. The source of data on domestic
nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt
data are based on monthly averages. Growth rates for debt reflect adjustments for
discontinuities over time in the levels of debt presented in other tables.
5. Sum of overnight RPs and Eurodollars, money market fund balances
(general purpose and broker-dealer), MMDAs, and savings and small time
deposits less the estimated amount of demand deposits and vault cash held by
thrift institutions to service their time and savings deposit liabilities.
6. Sum of large time deposits, term RPs, and Eurodollars of U.S. residents,
money market fund balances (institution-only), less a consolidation adjustment
that represents the estimated amount of overnight RPs and Eurodollars held by
institution-only money market mutual funds.
7. Excludes MMDAs.
8. Small-denomination time deposits—including retail RPs—are those issued
in amounts of less than $100,000. All IRA and Keogh accounts at commercial
banks and thrifts are subtracted from small time deposits.
9. Large-denomination time deposits are those issued in amounts of $100,000
or more, excluding those booked at international banking facilities.
10. Large-denomination time deposits at commercial banks less those held by
money market mutual funds, depository institutions, and foreign banks and
official institutions.
A4
1.11
DomesticNonfinancialStatistics • April 1990
RESERVES OF DEPOSITORY INSTITUTIONS A N D RESERVE BANK CREDIT
Millions of dollars
Monthly averages of
daily figures
Factors
1989
Weekly averages of daily figures for week ending
1990
1989
1990
Nov.
Dec.
Jan.
Dec. 20
Dec. 27
Jan. 3
Jan. 10
Jan. 17
Jan. 24
Jan. 31
265,521
269,244
269,857
267,551
270,879
276,395
274,209
269,192
267,901
265,235
217,455
216,475
980
6,602
6,525
77
0
346
1,024
37,093
11,062
8,518
19,529
224,142
223,031
1,111
6,683
6,525
158
0
289
1,128
37,003
11,059
8,518
19,585
222,417
221,432
985
6,644
6,525
119
0
412
978
39,406
11,059
8,518
19,650
222,841
222,609
232
6,544
6,525
19
0
189
1,314
36,665
11,059
8,518
19,592
224,613
221,943
2,670
6,786
6,525
261
0
513
1,692
37,275
11,059
8,518
19,606
228,646
225,276
3,370
7,164
6,525
639
0
523
1,095
38,966
11,059
8,518
19,620
226,700
224,145
2,555
6,810
6,525
285
0
155
1,405
39,139
11,059
8,518
19,630
222,410
222,410
0
6,525
6,525
0
0
219
814
39,224
11,059
8,518
19,640
220,558
220,558
0
6,525
6,525
0
0
379
960
39,480
11,059
8,518
19,645
217,228
217,228
0
6,525
6,525
0
0
851
652
39,981
11,059
8,518
19,655
251,807
448
256,870
448
256,669
468
256,683
447
259,112
447
260,573
450
259,135
463
257,350
468
255,231
472
253,232
. 476
5,008
234
4,787
286
6,302
255
4,402
252
4,571
215
6,283
454
5,416
246
4,108
248
5,930
217
9,550
255
1,944
333
1,817
397
2,075
364
1,881
337
1,822
337
1,998
1,004
2,210
164
2,094
227
2,125
209
1,882
625
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit
2
U.S. government securities'
3
Bought outright
Held under repurchase agreements
4
5
Federal agency obligations
6
Bought outright
Held under repurchase agreements
7
8
Acceptances
9
Loans
10 Float
11
Other Federal Reserve assets
12 Gold stock 2
13 Special drawing rights certificate a c c o u n t . . .
14 Treasury currency outstanding
ABSORBING RESERVE FUNDS
15 Currency in circulation
16 Treasury cash holdings 2
Deposits, other than reserve balances, with
Federal Reserve Banks
17 Treasury
18 Foreign
19 Service-related balances and
adjustments
20 Other
21 Other Federal Reserve liabilities and
capital
22 Reserve balances with Federal
Reserve Banks 3
7,862
8,242
8,928
7,839
8,140
8,488
8,872
8,949
9,021
9,011
33,993
35,559
34,023
34,878
35,417
36,342
36,910
34,965
33,918
29,436
Jan. 24
Jan. 31
End-of-month figures
1989
Nov.
Wednesday figures
1990
Dec.
Jan.
1989
Dec. 20
1990
Dec. 27
Jan. 3
Jan. 10
Jan. 17
SUPPLYING RESERVE FUNDS
23 Reserve Bank credit
267,060
276,622
265,926
270,208
283,575
277,334
274,917
271,289
269,550
265,926
24
U.S. government securities 1
25
Bought outright
26
Held under repurchase agreements
27
Federal agency obligations
28
Bought outright
29
Held under repurchase agreements
30 Acceptances
31
Loans
32
Float
33
Other Federal Reserve assets
34 Gold stock 2
35 Special drawing rights certificate a c c o u n t . . .
36 Treasury currency outstanding
223,142
223,142
0
6,525
6,525
0
0
181
668
36,544
11,060
8,518
19,564
228,367
226,775
1,592
7,050
6,525
525
0
481
1,093
39,631
11,059
8,518
19,615
218,392
218,392
0
6,525
6,525
0
0
733
216
40,061
11,059
8,518
19,655
224,245
222,623
1,622
6,655
6,525
130
0
182
2,100
37,028
11,059
8,518
19,592
233,951
222,195
11,756
8,026
6,525
1,501
0
2,159
1,514
37,926
11,059
8,518
19,606
228,867
223,744
5,123
7,310
6,525
785
0
166
2,034
38,956
11,059
8,518
19,620
227,060
223,666
3,394
7,117
6,525
592
0
158
888
39,694
11,059
8,518
19,630
221,748
221.748
0
6,525
6,525
0
0
147
3,649
39,222
11,059
8,518
19,640
221,961
221,961
0
6,525
6,525
0
0
640
768
39,656
11,059
8,518
19,645
218,392
218,392
0
6,525
6,525
0
0
733
216
40,061
11,059
8,518
19,655
253,960
445
260,443
455
253,123
479
257,700
447
260,291
447
260,601
450
258,319
467
256.749
471
254,251
475
253,123
479
5,500
307
6,217
589
13,153
251
5,356
228
5,029
269
7,203
282
4,509
216
6,948
273
6,044
188
13,153
251
1,638
311
1,618
1,298
1,882
357
1,637
228
1,626
523
1,998
172
2,210
145
2,094
257
2,125
206
1,882
357
ABSORBING RESERVE FUNDS
37 Currency in circulation
38 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve Banks
39 Treasury
40
Foreign
41
Service-related balances and
adjustments
42
Other
43 Other Federal Reserve liabilities and
capital
44 Reserve balances with Federal
Reserve Banks 3
8,402
8,486
8,884
7,641
8,062
8,654
8,859
8,692
8,824
8,884
35,639
36,709
27,029
36,141
46,511
37,170
39,399
35,022
36,658
27,029
1. Includes securities loaned—fully guaranteed by U.S. government securities
pledged with Federal Reserve Banks—and excludes any securities sold and
scheduled to be bought back under matched sale-purchase transactions,
2. Revised for periods between October 1986 and April 1987. At times during
this interval, outstanding gold certificates were inadvertently in excess of the gold
stock. Revised data not included in this table are available from the Division of
Monetary Affairs, Banking Section.
3. Excludes required clearing balances and adjustments to compensate for
float.
NOTE. For amounts of currency and coin held as reserves, see table 1.12.
Components may not add to totals because of rounding.
Money Stock and Bank Credit
1.12 RESERVES AND BORROWINGS
A5
Depository Institutions1
Millions of dollars
Monthly averages 9
Reserve classification
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks 2
Total vault cash 3
Vault4
Surplus
Total reserves 6
Required reserves
Excess reserve balances at Reserve Banks
Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks
Extended credit at Reserve Banks
1987
1988
1989
Dec.
Dec.
Dec.
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
37,673
26,185
24,449
1,736
62,123
61,094
1,029
777
93
483
37,830
27,205'
25,909
1,2%'
63,739
62,699
1,040
1,716
130
1,244
35,436'
28,782
27,374
1,409
62,810
61,888'
922'
265
84
20
33,902
27,851
26,351
1,499'
60,254
59,288
966
694
497
106
32,823
28,362'
26,735
1,627'
59,559
58,674
885
675
490
41
33,556
28,089'
26,570
1,515^
60,126
59,188
938
693
452
22
33,123
28,897'
27,275
1,622'
60,397
59,378
1,020
555
330
21
33,941
28,519
27,048
1,472'
60,989
60,044
945
349
134
21
35,436'
28,782
27,374
1,409
62,810
61,888'
922'
265
84
20
34,087
30,354
28,841
1,513
62,928
61,914
1,014
440
47
26
1989
1990
Biweekly averages of daily figures for weeks ending
1989
11
12
13
14
15
16
17
18
19
20
Reserve balances with Reserve Banks 2
Total vault cash 3
Vault 4 ..
Surplus 5 ....
Total reserves
Required reserves
Excess reserve balances at Reserve Banks
Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks . .
Extended credit at Reserve Banks 8
Oct. 4
Oct. 18
Nov. 1
Nov. 15
Nov. 29
Dec. 13
Dec. 27
Jan. 1C
Jan. 24
Feb. 7
32,643
28,300'
26,695
1,605'
59,338
58,343
995
898
453
25
33,581
29,088'
27,531
1,557'
61,112
60,186
926
653
342
19
32,778
28,875
27,177
1,698
59,955
58,827
1,128
345
280
23
34,468
27,908'
26,552
1,357'
61,020
60,139
881
272
147
20
33,394
29,156
27,574
1,582
60,968
59,958
1,009
441
115
23
35,399
27,821
26,509
1,312
61,908
61,149
759
151
87
22
35,131
29,415
27,903
1,513
63,033
62,015
1,018
351
89
19
36,627
29,695
28,335
1,360
64,961
63,844
1,117
339
58
19
34,424
29,338
28,045
1,294
62,468
61,627
841
300
41
27
29,787
33,327
31,156
2,171
60,943
59,733
1,210
865
44
33
1. These data also appear in the Board's H.3 (502) release. For address, see inside front cover.
2. Excludes required clearing balances and adjustments to compensate for
float.
3. Dates refer to the maintenance periods in which the vault cash can be used
to satisfy reserve requirements. Under contemporaneous reserve requirements,
maintenance periods end 30 days after the lagged computation periods in which
the balances are held.
4. Equal to all vault cash held during the lagged computation period by
institutions having required reserve balances at Federal Reserve Banks plus the
amount of vault cash equal to required reserves during the maintenance period at
institutions having no required reserve balances.
5. Total vault cash at institutions having no required reserve balances less the
amount of vault cash equal to their required reserves during the maintenance
period.
6. Total reserves not adjusted for discontinuities consist of reserve balances
1990
with Federal Reserve Banks, which exclude required clearing balances and
adjustments to compensate for float, plus vault cash used to satisfy reserve
requirements. Such vault cash consists of all vault cash held during the lagged
computation period by institutions having required reserve balances at Federal
Reserve Banks plus the amount of vault cash equal to required reserves during the
maintenance period at institutions having no required reserve balances.
7. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy
reserve requirements less required reserves.
8. Extended credit consists of borrowing at the discount window under the
terms and conditions established for the extended credit program to help
depository institutions deal with sustained liquidity pressures. Because there is
not the same need to repay such borrowing promptly as there is with traditional
short-term adjustment credit, the money market impact of extended credit is
similar to that of nonborrowed reserves.
9. Data are prorated monthly averages of biweekly averages.
A6
DomesticNonfinancialStatistics • April 1990
1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS
Large Member Banks1
Averages of daily figures, in millions of dollars
1988 and 1989 week ending Monday
Maturity and source
1
2
3
4
Federal funds purchased, repurchase agreements, and
other selected borrowing in immediately available
funds
From commercial banks in the United States
For one day or under continuing contract
For all other maturities
From other depository institutions, foreign banks and
foreign official institutions, and U.S. government
agencies
For one day or under continuing contract
For all other maturities
Dec. 26
Jan. 2
Jan. 9
Jan. 16
Jan. 23
Jan. 30
Feb. 6
Feb. 13
Feb. 20
70,964
9,810
67,427
9,356
75,520
9,753
70,344
10,870
69,604
10,424
66,372
9,947
71,750
10,289
71,162
10,627
69,950
11,937
24,933
8,730
22,855
7,709
28,713
6,801
26,331
7,431
24,937
6,694
27,974
6,345
27,292
6,524
29,241
6,787
27,903
7,467
Repurchase agreements on U.S. government and federal
agency securities in immediately available funds
Brokers and nonbank dealers in securities
For one day or under continuing contract
For all other maturities
All other customers
For one day or under continuing contract
For all other maturities
13,043
11,003
12,610
8,252
15,134
9,458
14,513
11,235
15,955
11,280
16,041
12,425
14,289
13,279
14,754
14,100
15,077
13,592
27,986
10,860
27,418
9,248
28,613
9,154
29,334
9,547
28,826
9,389
28,775
9.750
27,966
9,980
27,901
10,178
27,792
10,299
MEMO: Federal funds loans and resale agreements in
immediately available funds in maturities of one day
or under continuing contract
9 To commercial banks in the United States
10 To all other specified customers
40,080
14,987
38,015
12,747
42,159
15,135
40,105
14,111
40,596
14,784
40,075
13,584
41,248
17,118
39,096
15,055
38,742
16,176
5
6
7
8
1. Banks with assets of $1 billion or more as of Dec. 31, 1977.
These data also appear in the Board's H.5 (507) release. For address, see inside
front cover.
2. Brokers and nonbank dealers in securities; other depository institutions;
foreign banks and official institutions; and United States government agencies,
Policy Instruments
A7
1.14 FEDERAL RESERVE BANK INTEREST RATES
Percent per year
Current and previous levels
Extended credit 2
Adjustment credit
and
Seasonal credit 1
Federal Reserve
Bank
On
2/22/90
Effective
date
7
2/24/89
2/24/89
2/24/89
2/24/89
2/24/89
2/24/89
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco . . .
7
After 30 days of borrowing 3
First 30 days of borrowing
Previous
rate
6
2/24/89
2/24/89
2/24/89
2/24/89
2/27/89
2/24/89
On
2/22/90
Effective
date
7
2/24/89
2/24/89
2/24/89
2/24/89
2/24/89
2/24/89
Vl
6V2
2/24/89
2/24/89
2/24/89
2/24/89
2/27/89
2/24/89
7
Previous
rate
6
6
On
2/22/90
Effective
date
Previous
rate
Effective date
8.70
2/22/90
2/22/90
2/22/90
2/22/90
2/22/90
2/22/90
8.70
2/8/90
2/8/90
2/8/90
2/8/90
2/8/90
2/8/90
Vl
Vl
8.70
2/22/90
2/22/90
2/22/90
2/22/90
2/22/90
2/22/90
2/8/90
2/8/90
2/8/90
2/8/90
2/8/90
2/8/90
8.70
Range of rates for adjustment credit in recent years 4
Effective date
In effect Dec. 31, 1977.
1978—Jan. 9
20
May 11
12
July 3
10
Aug. 21
Sept. 22
Oct. 16
20
Nov. 1
3
1979—July 20
Aug. 17
20
Sept. 19
21
Oct.
8
10
Range (or
level)—
All F.R.
Banks
6
F.R.
Bank
of
N.Y.
6
6-6V1 6V1
6 Vl
6V2
ftVi-1 7
7
7-71/4
IV*
7V4
8
8-8W
$V2
Vi
8V>-9'/>
9
10
lO-lOVi
lOVi
10W-11
11
11-12
12
7
7V4
7V4
73/4
8
8W
Vl
8
9 Vi
9 Vi
10
10
10
11
Vi
Vi
Effective date
10-11
10
11
12
12-13
10
10
1981—May
13-14
14
13-14
13
12
14
14
13
13
Nov.
Dec.
1982—July
Aug.
Oct.
Nov.
1980—Feb. 15
19
May 29
30
June 13
16
12-13
13
12-13
12
11-12
11
13
13
13
12
11
Dec.
5
8
2
6
4
20
23
2
3
16
27
30
12
13
22
26
14
15
17
12
13
Vl
11
lO-lOVi
10
9^-10
9
9-9Vz
9
SVl-9
SVi-9
10
10
9Vi
9Vl
9
9
9
8V1
SVl-9 9
9
9
SVi-9 m
8 Vi
8 Vi
1985—May 20
24
7W-8
1986—Mar.
12
im
11
7
10
Apr. 21
July 11
Aug. 21
22
11
10W
m
8 Vi
Range (or
level)—
All F.R.
Banks
1984—Apr.
9
13
Nov. 21
26
Dec. 24
11
11 Vi—12
im
11-1 \Vi
11
low
Vi
Effective date
1987—Sept. 4
11
1988—Aug.
8
IVi
7-7 Vl
1
(,Vi-l
6
5W-6
5
Vl
5Vl-6
6
Vl
Vl
6Vi-l
8
IVi
7 Vi
7
7
6
6
5W
5
Vl
Vl
6
6
9
11
6-6
6
6
6
1989—Feb. 24
27
7
7
7
7
7
In effect Feb. 22, 1990.
Vl
Vl
11
1. Adjustment credit is available on a short-term basis to help depository
institutions meet temporary needs for funds that cannot be met through reasonable alternative sources. After May 19, 1986, the highest rate established for loans
to depository institutions may be charged on adjustment credit loans of unusual
size that result from a major operating problem at the borrower's facility.
Seasonal credit is available to help smaller depository institutions meet regular,
seasonal needs for funds that cannot be met through special industry lenders and
that arise from a combination of expected patterns of movement in their deposits
and loans. A temporary simplified seasonal program was established on Mar. 8,
1985, and the interest rate was a fixed rate Vl percent above the rate on adjustment
credit. The program was reestablished for 1986 and 1987 but was not renewed for
1988.
2. Extended credit is available to depository institutions, when similar assistance is not reasonably available from other sources, when exceptional circumstances or practices involve only a particular institution or when an institution is
experiencing difficulties adjusting to changing market conditions over a longer
period of time.
3. For extended-credit loans outstanding more than 30 days, a flexible rate
somewhat above rates on market sources of funds ordinarily will be charged, but
F.R.
Bank
of
N.Y.
1980—July 28
29
Sept. 26
Nov. 17
Dec. 5
11
12
12
Range (or
level)—
All F.R.
Banks
in no case will the rate charged be less than the basic discount rate plus 50 basis
points. The flexible rate is reestablished on the first business day of each
two-week reserve maintenance period. At the discretion of the Federal Reserve
Bank, the time period for which the basic discount rate is applied may be
shortened.
4. For earlier data, see the following publications of the Board of Governors:
Banking and Monetary Statistics, 1914-1941, and 1941-1970; Annual Statistical
Digest, 1970-1979.
In 1980 and 1981, the Federal Reserve applied a surcharge to short-term
adjustment credit borrowings by institutions with deposits of $500 million or more
that had borrowed in successive weeks or in more than four weeks in a calendar
quarter. A 3 percent surcharge was in effect from Mar. 17, 1980 through May 7,
1980. There was no surcharge until Nov. 17,1980, when a 2 percent surcharge was
adopted; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and
to 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective
Sept. 22, 1981, and to 2 percent effective Oct. 12, 1981. As of Oct. 1, 1981 the
formula for applying the surcharge was changed from a calendar quarter to a
moving 13-week period. The surcharge was eliminated on Nov. 17, 1981.
A8
DomesticNonfinancialStatistics • April 1990
1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1
Percent of deposits
Type of deposit, and
deposit interval
Depository institution requirements
after implementation of the
Monetary Control Act
Effective date
Net transaction accounts3'4
$0 million-$40.4 million....
More than $40.4 million . . .
12/19/89
12/19/89
Nonpersonal time deposits5
By original maturity
Less than \Yi years
1 Vi years or more
10/6/83
10/6/83
Eurocurrency
All types
liabilities
1. Reserve requirements in effect on Dec. 31, 1989. Required reserves must be
held in the form of deposits with Federal Reserve Banks or vault cash. Nonmember institutions may maintain reserve balances with a Federal Reserve Bank
indirectly on a pass-through basis with certain approved institutions. For previous
reserve requirements, see earlier editions of the Annual Report or the Federal
Reserve Bulletin. Under provisions of the Monetary Control Act, depository
institutions include commercial banks, mutual savings banks, savings and loan
associations, credit unions, agencies and branches of foreign banks, and Edge
corporations.
2. The Garn-St Germain Depository Institutions Act of 1982 (Public Law
97-320) requires that $2 million of reservable liabilities (transaction accounts,
nonpersonal time deposits, and Eurocurrency liabilities) of each depository
institution be subject to a zero percent reserve requirement. The Board is to adjust
the amount of reservable liabilities subject to this zero percent reserve requirement each year for the succeeding calendar year by 80 percent of the percentage
increase in the total reservable liabilities of all depository institutions, measured
on an annual basis as of June 30. No corresponding adjustment is to be made in
the event of a decrease. On Dec. 20, 1988, the exemption was raised from $3.2
million to $3.4 million. In determining the reserve requirements of depository
institutions, the exemption shall apply in the following order: (1) net NOW
accounts (NOW accounts less allowable deductions); (2) net other transaction
accounts', and (3) nonpersonal time deposits or Eurocurrency liabilities starting
with those with the highest reserve ratio. With respect to NOW accounts and
11/13/80
other transaction accounts, the exemption applies only to such accounts that
would be subject to a 3 percent reserve requirement.
3. 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.
However, MMDAs and similar accounts subject to the rules that permit no more
than six preauthorized, automatic, or other transfers per month, of which no more
than three can be checks, are not transaction accounts (such accounts are savings
deposits subject to time deposit reserve requirements).
4. The Monetary Control Act of 1980 requires that the amount of transaction
accounts against which the 3 percent reserve requirement applies be modified
annually by 80 percent of the percentage change in transaction accounts held by
all depository institutions, determined as of June 30 each year. Effective Dec. 19,
1989 for institutions reporting quarterly and Dec. 26, 1989 for institutions
reporting weekly, the amount was decreased from $41.5 million to $40.4 million.
5. In general, nonpersonal time deposits are time deposits, including savings
deposits, that are not transaction accounts and in which a beneficial interest is
held by a depositor that is not a natural person. Also included are certain
transferable 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.
Policy Instruments
A9
1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1
Millions of dollars
1989
Type of transaction
1987
1989
1988
Aug.
July
June
Sept.
Nov.
Oct.
Dec.
U . S . TREASURY SECURITIES
Outright transactions (excluding matched
transactions)
1
2
3
4
Treasury bills
Gross purchases
Gross sales
Exchange
Redemptions
5
6
7
8
9
18,983
6,051
0
9,029
8,223
587
0
2,200
14,284
12,818
0
12,730
0
571
0
1,200
0
5,517
0
2,400
0
934
0
800
0
0
0
0
219
1,633
0
1,400
8,794
0
0
3,530
1,883
0
0
0
Others within 1 year
Gross purchases
Gross sales
Maturity shift
Exchange
Redemptions
3,659
300
21,504
-20,388
70
2,176
0
23,854
-24,588
0
327
0
28,848
-25,783
500
0
0
1,828
-1,434
0
0
0
1,749
-1,073
0
0
0
4,200
-4,025
0
0
0
1,832
0
0
0
0
852
-2,678
500
155
0
3,915
-5,502
0
0
0
1,268
0
0
10
11
12
13
1 to 5 years
Gross purchases
Gross sales
Maturity shift
Exchange
10,231
452
-17,975
18,938
5,485
800
-17,720
22,515
1,436
490
-25,534
23,250
0
0
-1,828
1,434
0
13
-1,584
787
0
150
-3,321
3,425
0
0
-1,832
0
0
24
-758
2,552
0
0
-2,869
4,902
0
0
-1,268
0
14
15
16
17
5 to 10 years
Gross purchases
Gross sales
Maturity shift
Exchange
2,441
0
-3,529
950
1,579
175
-5,946
1,797
287
29
-2,231
1,934
0
0
0
0
0
9
-165
286
0
0
-879
400
0
0
0
0
0
0
-95
126
0
0
-1,046
400
0
0
0
0
18
19
20
21
Over 10 years
Gross purchases
Gross sales
Maturity shift
Exchange
1,858
0
0
500
1,398
0
-188
275
284
0
-1,086
600
0
0
0
0
0
0
0
0
0
0
0
200
0
0
0
0
0
0
0
0
0
0
0
200
0
0
0
0
37,170
6,803
9,099
18,863
1,562
2,200
16,617
13,337
13,230
0
571
1,200
0
5,539
2,400
0
1,084
800
0
0
0
219
1,657
1,900
8,949
0
3,530
1,883
0
0
Matched
transactions
25 Gross sales
26 Gross purchases
950,923
950,935
1,168,484
1,168,142
1,323,480
1,326,542
128,139
138,141
123,373
118,221
146,611
147,228
116,502
120,144
111,430
111,893
105,696
105,243
103,077
104,827
Repurchase
agreements2
27 Gross purchases
28 Gross sales
314,621
324,666
152,613
151,497
129,518
132,688
6,203
6,203
4,961
4,961
0
0
9,396
9,396
0
0
15,350
15,350
22,737
21,145
11,234
15,872
-10,055
8,232
-13,091
-1,267
3,642
-2,875
4,966
5,225
0
0
276
0
0
587
0
0
442
0
0
0
0
0
45
0
0
0
0
0
54
0
0
30
0
0
0
0
0
0
Repurchase
agreements2
33 Gross purchases
34 Gross sales
80,353
81,350
57,259
56,471
39,972
41,548
1,666
1,666
1,137
1,137
0
0
4,011
4,011
0
0
1,247
1,247
2,992
2,467
35 Net change in federal agency obligations
-1,274
198
-2,018
0
-45
0
-54
-30
0
525
36 Total net change in System Open Market
Account
9,961
16,070
-12,073
8,232
-13,136
-1,267
3,588
-2,905
4,966
5,750
All maturities
22 Gross purchases
23 Gross sales
24 Redemptions
29 Net change in U.S. government securities
FEDERAL AGENCY OBLIGATIONS
Outright
transactions
30 Gross purchases
31 Gross sales
32 Redemptions
1. 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.
2. In July 1984 the Open Market Trading Desk discontinued accepting bankers
acceptances in repurchase agreements,
A10
DomesticNonfinancialStatistics • April 1990
1.18 FEDERAL RESERVE BANKS
Condition and Federal Reserve Note Statements1
Millions of dollars
Wednesday
Account
End of month
1990
Jan. 3
Jan.10
1989
Jan. 17
Jan. 24
Jan. 31
1990
Nov.
Dec.
Jan.
Consolidated condition statement
ASSETS
1 Gold certificate account
2 Special drawing rights certificate account
3
Loans
4
To depository institutions
5 Other
6 Acceptances held under repurchase agreements
Federal agency obligations
7
Bought outright
8
Held under repurchase agreements
U.S. Treasury securities
Bought outright
9
Bills
10
Notes
11
Bonds
12
Total bought outright 2
13 Held under repurchase agreements
14 Total U.S. Treasury securities
15 Total loans and securities
11,059
8,518
447
11,060
8,518
455
11,059
8,518
478
11,059
8,518
505
11,059
8,518
524
11,060
8,518
465
11,059
8,518
456
11,059
8,518
524
166
0
0
157
0
0
146
0
0
640
0
0
733
0
0
182
0
0
481
0
0
733
0
0
6,525
785
6,525
592
6,525
0
6,525
0
6,525
0
6,525
0
6,525
525
6,525
0
101,549
91,381
30,814
223,744
5,123
228,867
101,471
91,381
30,814
223,666
3,394
227,060
99,553
91,381
30,814
221,748
0
221,748
99,766
91,381
30,814
221,961
0
221,961
96,197
91,381
30,814
218,392
0
218,392
100,947
91,381
30,814
223,142
0
223,142
104,581
91,381
30,814
226,775
1,592
228,367
96,197
91,381
30,814
218,392
0
218,392
236,343
234,334
228,418
229,125
225,649
229,848
235,898
225,649
10,830
790
7,225
791
14,272
791
5,892
791
5,848
791
6,103
776
8,903
790
5,848
791
31,335
6,741
31,487
6,879
31,585
6,854
31,744
7,110
31,920
7,723
29,593
6,175
31,333
7,465
31,920
7,723
306,063
300,748
301,977
294,746
292,033
292,539
304,424
292,033
241,878
239,611
238,059
235,588
234,471
235,306
241,739
234,471
38,948
7,203
282
172
41,594
4,509
216
145
37,528
6,948
273
257
38,540
6,044
188
206
29,464
13,153
251
357
37,277
5,500
307
311
38,327
6,217
590
1,298
29,464
13,153
251
357
46,606
46,463
45,007
44,978
43,228
43,395
46,430
43,228
8,925
3,980
5,815
3,943
10,220
3,795
5,357
3,915
5,452
3,911
5,436
3,081
7,773
3,994
5,452
3,911
301,389
295,831
297,079
289,837
287,060
287,217
299,935
287,060
2,243
2,243
188
2,249
2,243
425
2,249
2,243
405
2,250
2,243
416
2,249
2,243
481
2,229
2,112
980
2,243
2,243
0
2,249
2,243
481
33 Total liabilities and capital accounts
306,063
300,748
301,977
294,746
292,033
292,539
304,423
292,033
34 MEMO: Marketable U.S. Treasury securities held in
custody for foreign and international accounts
228,101
228,427
228,568
228,643
228,073
235,096
233,048
228,073
16 Items in process of collection
17 Bank premises
Other assets
18 Denominated in foreign currencies 3
19 All other 4
20 Total assets
LIABILITIES
21 Federal Reserve notes
Deposits
22
To depository institutions
23
U.S. Treasury—General account
24
Foreign—Official accounts
25
Other
26 Total deposits
27 Deferred credit items
28 Other liabilities and accrued dividends 5
29 Total liabilities
CAPITAL ACCOUNTS
30 Capital paid in
31 Surplus
32 Other capital accounts
Federal Reserve note statement
35 Federal Reserve notes outstanding issued to bank
36
LESS: Held by bank
37
Federal Reserve notes, net
Collateral held against notes net:
38
Gold certificate account
39
Special drawing rights certificate account
40
Other eligible assets
41
U.S. Treasury and agency securities
42 Total collateral
279,177
37,298
241,878
278,757
39,146
239,611
279,256
41,197
238,059
279,680
44,092
235,588
279,920
45,449
234,471
279,629
44,321
235,306
279,665
37,926
241,739
279,920
45,449
234,471
11,059
8,518
0
222,301
11,060
8,518
0
220,033
11,059
8,518
0
218,481
11,059
8,518
0
216,010
11,059
8,518
0
214,894
11,060
8,518
0
215,728
11,059
8,518
0
222,162
11,059
8,518
234,471
235,306
241,739
241,878
239,611
238,059
235,588
0
214,894
234,471
1. Some of these data also appear in the Board's H.4.1 (503) release. For
address, see inside front cover. Components way not add to totals because of
rounding.
2. Includes securities loaned—fully guaranteed by U.S. Treasury securities
pledged with Federal Reserve Banks—and excludes securities sold and scheduled
to be bought back under matched sale-purchase transactions.
3. Valued monthly at market exchange rates.
4. Includes special! investment account at the Federal Reserve Bank of Chicago
in Treasury bills maturing within 90 days.
5. Includes exchange-translation account reflecting the monthly revaluation at
market exchange rates of foreign-exchange commitments.
Federal Reserve Banks
1.19 FEDERAL RESERVE BANKS
All
Maturity Distribution of Loan and Security Holding
Millions of dollars
End of month
Wednesday
Jan. 3
1990
1989
1990
Type and maturity groupings
Jan. 10
Jan. 17
Jan. 24
Jan. 31
Nov. 30
Dec. 29
Jan. 31
1 Loans—Total
2
Within 15 days
3
16 days to 90 days
4
91 days to 1 year
166
158
8
0
157
145
12
0
146
146
0
0
640
640
0
0
850
848
2
0
182
134
48
0
481
469
11
0
850
848
2
0
5 Acceptances—Total
6
Within 15 days
16 days to 90 days
7
8
91 days to 1 year
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
228,867
18,867
47,380
69,308
54,076
12,529
26,706
227,060
10,617
53,508
69,624
54,076
12,529
26,706
221,748
7,490
53,750
67,477
53,717
12,607
26,706
221,961
5,076
54,451
69,402
53,717
12,607
26,706
218,392
10,372
47,233
68,022
53,452
12,607
26,706
223,142
4,468
51,283
74,646
53,509
12,529
26,706
228,367
9,413
55,523
70,687
53,509
12,529
26,706
218,392
10,372
47,233
68,022
53,452
12,607
26,706
7,310
798
718
1,336
3,198
1,071
188
6,525
84
659
1,311
3,231
1,051
188
6,525
203
540
1,311
3,231
1,051
188
6,525
156
570
1,281
3,277
1,051
188
6,525
119
668
1,253
3,238
1,057
188
6,525
316
418
1,395
3,159
1,048
189
7,050
678
568
1,346
3,198
1,071
188
6,525
119
668
1,253
3,238
1,057
188
9 U.S. Treasury securities—Total
10 Within 15 days 1
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
16 Federal agency obligations—Total
17 Within 15 days 1
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
1. Holdings under repurchase agreements are classified as maturing within 15
days in accordance with maximum maturity of the agreements.
NOTE: Components may not add to totals due to rounding,
A12
DomesticNonfinancialStatistics • April 1990
1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE 1
Billions of dollars, averages of daily figures
1990
1989
Item
1986
Dec.
1987
Dec.
1988
Dec.
1989
Dec.
June
2
3
4
5
Nonborrowed reserves
Nonborrowed reserves plus extended credit
Required reserves
Monetary base
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
59.22
59.62
59.57
59.99
59.77
Seasonally adjusted
ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS 2
1 Total reserves3
July
58.14
58.69
60.71
59.99
58.35
58.70
58.75
57.31
57.92
58.99
59.73
58.08
59.22
56.86
58.00
58.53
59.07
59.73
57.62
60.23
59.74' 57.78
58.12
58.40
58.11
59.09
59.24
58.55
59.74'
56.77
59.67
59.07
57.87
57.44
57.73
58.60
57.66
58.62
58.29
59.07
241.63r 258.27'' 275.54'' 285.08' 278.94r 279.97' 280.76r 281.91' 282.92' 283.31' 285.08'
59.33
59.36
58.76
287.62
Not seasonally adjusted
6 Total reserves3
7
8
9
10
Nonborrowed reserves
Nonborrowed reserves plus extended credit
Required reserves
Monetary base
59.46
60.06
58.64
58.94
58.09
245.25
59.28
59.76
59.03
262.08
62.21
61.50
58.41
58.95
58.30
58.91
59.14
59.72
61.50
61.43
56.92
57.84
57.51
280.19
58.26
58.37
57.99
282.10
57.62
57.66
57.41
281.09
58.21
58.24
57.97
280.70
58.58
58.61
58.12
281.37
59.37
59.39
58.77
284.13
61.24
61.26
60.58
289.45'
60.99
61.02
60.42
288.72
62.81
59.59
60.25
59.56
60.13
60.40
60.99
62.81
62.93
62.02 62.54
63.27 62.56
62.70 61.89
283.18 292.71
58.10
59.01
58.68
283.28
59.56
59.67
59.29
285.39
58.88
58.93
58.67
284.23
59.43
59.46
59.19
283.78
59.84
59.86
59.38
284.49
60.64 62.54
60.66 62.56
60.04
61.89
287.35 292.71
62.49
62.51
61.91
292.31
60.50 61.24
61.74 61.26
61.17 60.58
279.71 289.45'
N O T ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS 6
11 Total reserves 3
12
13
14
15
Nonborrowed reserves
Nonborrowed reserves plus extended credit
Required reserves
Monetary base 5
59.56
62.12
58.73
59.04
58.19
247.71
61.35
61.83
61.09
266.16
1. Latest monthly and biweekly figures are available from the Board's H.3(502)
statistical release. Historical data and estimates of the impact on required reserves
of changes in reserve requirements are available from the Monetary and Reserves
Projections Section. Division of Monetary Affairs. Board of Governors of the
Federal Reserve System, Washington, D.C. 20551.
2. Figures incorporate adjustments for discontinuities associated with the
implementation of the Monetary Control Act and other regulatory changes to
reserve requirements. To adjust for discontinuities due to changes in reserve
requirements on reservable nondeposit liabilities, the sum of such required
reserves is subtracted from the actual series. Similarly, in adjusting for discontinuities in the monetary base, required clearing balances and adjustments to
compensate for float also are subtracted from the actual series.
3. Total reserves not adjusted for discontinuities consist of reserve balances
with Federal Reserve Banks, which exclude required clearing balances and
adjustments to compensate for float, plus vault cash held during the lagged
computation period by institutions having required reserve balances at Federal
Reserve Banks plus the amount of vault cash equal to required reserves during the
maintenance period at institutions having no required reserve balances.
4. Extended credit consists of borrowing at the discount window under
63.74
the terms and conditions established for the extended credit program to helpdepository institutions deal with sustained liquidity pressures. Because there isnot
the same need to repay such borrowing promptly as there is with traditional
short-term adjustment credit, the money market impact of extended credit is
similar to that of nonborrowed reserves.
5. The monetary base not adjusted for discontinuities consists of total reserves
plus required clearing balances and adjustments to compensate for float at Federal
Reserve Banks and the currency component of the money stock plus, for institutions not having required reserve balances, the excess of current vault cash over
the amount applied to satisfy current reserve requirements. Currency and vault
cash figures are measured over the weekly computation period ending Monday.
The seasonally adjusted monetary base consists of seasonally adjusted total
reserves, which include excess reserves on a not seasonally adjusted basis, plus
the seasonally adjusted currency component of the money stock and the remaining items seasonally adjusted as a whole.
6. Reflects actual reserve requirements, including those on nondeposit liabilities, with no adjustments to eliminate the effects of discontinuities associated with
implementation of the Monetary Control Act or other regulatory changes to
reserve requirements.
Monetary and Credit Aggregates
A13
1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES 1
Billions of dollars, averages of daily figures
1989
1986
Dec/
Item
1987
Dec/
1988
Dec/
1990
1989
Dec/
Oct/
Nov/
Dec/
Jan.
Seasonally adjusted
724.7
2,814.2
3,494.5
4,135.5
7,597.0
750.4
2,913.2
3,678.7
4,338.7
8,316.1
787.5
3,072.4
3,918.4
4,676.1
9,082.2
794.8
3,221.7
4,043.3
4,866.0
9,801.3
788.1
3,181.5
4,016.6
4,830.4
9,684.3
789.4
3,200.8
4,029.8
4,845.8
9,756.0
794.8
3,221.7
4,043.3
4,866.0
9,801.3
794.9
3,232.5
4,052.2
n.a.
n.a.
180.6
6.5
302.1
235.5
196.7
7.0
287.0
259.7
211.8
7.5
287.0
281.3
221.9
7.4
279.7
285.7
220.0
7.3
280.0
280.8
220.4
7.4
278.8
282.8
221.9
7.4
279.7
285.7
224.6
7.5
277.3
285.5
2,089.6
680.3
2,162.8
765.5
2,284.9
845.9
2,426.9
821.6
2,393.4
835.2
2,411.4
829.0
2,426.9
821.6
2,437.6
819.7
Savings deposits 9
Commercial Banks
Thrift institutions
155.8
214.3
178.3
236.6
192.0
235.9
188.5
220.5
185.9
220.3
187.3
220.6
188.5
220.5
189.9
220.6
14
15
Small-denomination time deposits 10
Commercial Banks
Thrift institutions
366.3
489.9
388.1
529.7
447.5
583.5
528.5
613.6
519.7
616.2
524.4
614.1
528.5
613.6
531.4
610.9
16
17
Money market mutual funds
General purpose and broker-dealer
Institution-only
208.7
83.8
222.0
89.0
240.9
87.1
313.1
102.3
302.7
101.1
309.1
101.1
313.1
102.3
320.8
103.3
289.8
150.0
326.9
161.9
368.2
172.9
401.4
156.8
398.8
163.8
401.4
159.5
401.4
156.8
401.5
152.8
1,805.8
5,791.2
1,957.4
6,358.6
2,113.5
6,968.7
2,265.8
7,535.5
2,238.3
7,445.9
2,259.0
7,497.1
2,265.8
7,535.5
n.a.
n.a.
1
2
3
4
5
Ml
M2
M3
L
Debt
6
7
8
9
Ml components
Currency
Travelers checks
Demand deposits
Other checkable deposits 6
10
11
Nontransactions components
In M2 .
In M3 only 8
n
13
18
19
Large-denomination time deposits
Commercial Banks
Thrift institutions
70
21
Debt components
Federal debt
Nonfederal debt
11
Not seasonally adjusted
??
73
?A
25
26
Ml
M2
M3
L
Debt
27
28
29
30
Ml components
Currency
Travelers checks
Demand deposits
Other checkable deposits
31
32
Nontransactions components
M2
M3 only®
33
34
740.5
2,826.5
3,508.8
4,151.5
7,580.7
766.4
2,925.6
3,692.7
4,355.0
8,297.6
804.5
3,085.2
3,932.5
4,692.9
9,067.5
812.1
3,234.6
4,057.4
4,883.4
9,787.1
785.0
3,178.9
4,016.7
4,830.3
9,650.1
791.7
3,204.4
4,039.6
4,854.6
9,723.0
812.1
3,234.6
4,057.4
4,883.4
9,787.1
802.4
3,244.2
4,061.2
n.a.
n.a.
183.0
6.0
314.0
237.5
199.3
6.5
298.6
262.0
214.8
6.9
298.9
283.8
225.3
6.9
291.6
288.4
218.9
7.3
280.7
278.1
221.0
7.0
281.6
282.1
225.3
6.9
291.6
288.4
222.9
7.0
283.0
289.5
2,086.0
682.3
2,159.2
767.0
2,280.8
847.3
2,422.5
822.8
2,393.9
837.8
2,412.7
835.1
2,422.5
822.8
2,441.8
817.0
Money market deposit accounts
Commercial Banks
Thrift institutions
379.8
192.9
359.0
167.5
353.2
150.6
355.0
132.9
342.7
131.8
350.3
132.8
355.0
132.9
356.4
133.0
35
36
Savings deposits 9
Commercial Banks
Thrift institutions
154.4
212.7
176.9
234.9
190.6
234.2
187.2
219.0
185.9
221.3
187.1
220.5
187.2
219.0
189.0
219.0
37
38
Small-denomination time deposits 10
Commercial Banks
Thrift institutions
366.1
489.8
387.3
529.1
446.0
582.4
526.4
612.3
519.3
616.3
523.1
614.2
526.4
612.3
530.8
613.0
39
40
Money market mutual funds
General purpose and broker-dealer
Institution-only
208.0
84.4
221.5
89.6
240.5
87.6
312.8
102.9
301.3
98.7
309.8
102.1
312.8
102.9
319.6
106.1
41
42
Large-denomination time deposits 11
Commercial Banks
Thrift institutions
289.2
150.7
325.8
162.9
366.9
174.2
399.7
158.2
399.9
165.5
401.9
161.7
399.7
158.2
399.2
154.0
43
44
Debt components
Federal debt
Nonfederal debt
1,803.9
5,776.8
1,955.6
6,342.0
2,111.8
6,955.7
2,264.1
7,523.0
2,222.6
7,427.5
2,250.8
7,472.2
2,264.1
7,523.0
For notes see following page.
n.a.
n.a.
A14
DomesticNonfinancialStatistics • April 1990
NOTES TO TABLE 1.21
1. Latest monthly and weekly figures are available from the Board's H.6 (508)
release. Historical data are available from the Monetary and Reserves Projection
section, Division of Monetary Affairs, Board of Governors of the Federal Reserve
System, Washinjgton, D.C. 20551.
2. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults
of depository institutions; (2) travelers checks of nonbank issuers; (3) demand
deposits at all commercial banks other than those due to depository institutions,
the U.S. government, and foreign banks and official institutions less cash items in
the process of collection and Federal Reserve float; and (4) other checkable
deposits (OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, credit union
share draft accounts, and demand deposits at thrift institutions.
M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs)
issued by all commercial banks and overnight Eurodollars issued to U.S. residents
by foreign branches of U.S. banks worldwide, MMDAs, savings and smalldenomination time deposits (time deposits—including retail RPs—in amounts of
less than $100,000), and balances in both taxable and tax-exempt general purpose
and broker-dealer money market mutual funds. Excludes individual retirement
accounts (IRA) and Keogh balances at depository institutions and money market
funds. Also excludes all balances held by U.S. commercial banks, money market
funds (general purpose and broker-dealer), foreign governments and commercial
banks, and the U.S. government.
M3: M2 plus large-denomination time deposits and term RP liabilities (in
amounts of $100,000 or more) issued by commercial banks and thrift institutions,
term Eurodollars held by U.S. residents at foreign branches of U.S. banks
worldwide and at all banking offices in the United Kingdom and Canada, and
balances in both taxable and tax-exempt, institution-only money market mutual
funds. Excludes amounts held by depository institutions, the U.S. government,
money market funds, and foreign banks and official institutions. Also subtracted
is the estimated amount of overnight RPs and Eurodollars held by institution-only
money market mutual funds.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term
Treasury securities, commercial paper and bankers acceptances, net of money
market mutual fund holdings of these assets.
Debt: Debt of domestic nonfinancial sectors consists of outstanding credit
market debt of the U.S. government, state and local governments, and private
nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers
acceptances, and other debt instruments. The source of data on domestic
nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt
data are based on monthly averages.
3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of
depository institutions.
4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers. Travelers checks issued by depository institutions are included in
demand deposits.
5. Demand deposits at commercial banks and foreign-related institutions other
than those due to depository institutions, the U.S. government, and foreign banks
and official institutions less cash items in the process of collection and Federal
Reserve float.
6. Consists of NOW and ATS balances at all depository institutions, credit
union share draft balances, and demand deposits at thrift institutions.
7. Sum of overnight RPs and overnight Eurodollars, money market fund
balances (general purpose and broker-dealer), MMDAs, and savings and small
time deposits.
8. Sum of large time deposits, term RPs, and term Eurodollars of U.S.
residents, money market fund balances (institution-only), less the estimated
amount of overnight RPs and Eurodollars held by institution-only money market
funds.
9. Savings deposits exclude MMDAs.
10. Small-denomination time deposits—including retail RPs—are those issued
in amounts of less than $100,000. All individual retirement accounts (IRA) and
Keogh accounts at commercial banks and thrifts are subtracted from small time
deposits.
11. Large-denomination time deposits are those issued in amounts of $100,000
or more, excluding those booked at international banking facilities.
12. Large-denomination time deposits at commercial banks less those held by
money market mutual funds, depository institutions, and foreign banks and
official institutions.
Monetary and Credit Aggregates
1.22
A15
B A N K DEBITS A N D DEPOSIT TURNOVER1
Debits are shown in billions of dollars, turnover as ratio of debits to deposits. Monthly data are at annual rates.
1989
Bank group, or type of customer
July
June
Demand deposits 3
All insured banks
Major New York City banks
Other banks
ATS-NOW accounts 4
Savings deposits
6
7
8
9
10
Demand deposits 3
All insured banks
Major New York City banks
Other banks
ATS-NOW accounts 4
Savings deposits 5
Sept.
Oct.
Nov.
Seasonally adjusted
DEBITS TO
1
2
3
4
5
Aug.
188,346.0
91,397.3
96,948.8
2,182.5
403.5
217,116.2
104,496.3
112,619.8
2,402.7
526.5
226,888.4
107,547.3
119,341.2
2,757.7
583.0
284,129.2
129,166.6
154,962.7
3,696.5
640.0
276,453.7
114,991.8
161,461.9
3,596.3
580.4
292,446.5
121,378.1
171,068.3
3,943.1
650.0
281,432.2
125,206.9
156,225.3
3,601.9
672.3
293,424.9
136,039.0
155,385.9
3,911.9
665.4
296,768.7
130,440.2
166,328.5
3,855.2
610.3
556.5
2,498.2
321.2
15.6
3.0
612.1
2,670.6
357.0
13.8
3.1
641.2
2,903.5
376.8
14.7
3.1
824.0
3,588.5
501.8
19.8
3.6
788.4
3,222.3
512.6
19.1
3.2
841.8
3,402.4
548.8
20.6
3.6
802.2
3,482.2
496.2
18.8
3.7
826.4
3,486.5
492.5
20.1
3.6
855.7
3,499.8
537.3
19.7
3.3
DEPOSIT TURNOVER
Not seasonally adjusted
DEBITS TO
U
12
13
14
15
16
Demand deposits 3
All insured banks
Major New York City banks
Other banks
ATS-NOW accounts 4
MMDA
Savings deposits
17
18
19
20
21
22
Demand deposits 3
All insured banks
Major New York City banks
Other banks
ATS-NOW accounts 4
MMDA 6
Savings deposits 5
188,506.7
91,500.1
97,006.7
2,184.6
1,609.4
404.1
217,125.1
104,518.8
112,606.2
2,404.8
1,954.2
526.8
227,010.7
107,565.0
119,445.7
2,754.7
2,430.1
578.0
295,522.8
134,020.7
161,502.1
3,770.8
3,136.0
641.4
268,243.0
117,276.1
150,966.9
3,549.0
2,686.7
610.4
304,407.5
132,158.8
172,248.7
3,762.6
3,068.7
656.7
266,882.2
115,187.4
151,694.7
3,702.7
2,554.3
665.2
292,750.0
138,964.6
153,785.5
3,891.4
2,651.5
690.4
285,372.8
129,905.5
155,467.3
3,611.5
2,569.1
555.9
556.7
2,499.1
321.2
15.6
4.5
3.0
612.3
2,674.9
356.9
13.8
5.3
3.1
641.7
2,901.4
377.1
14.7
6.9
3.1
855.6
3,795.0
520.9
20.3
9.7
3.6
761.3
3,247.5
477.4
18.9
8.2
3.4
891.5
3,911.6
559.9
20.0
9.2
3.6
763.1
3,279.7
482.2
19.5
7.6
3.7
829.6
3,594.8
489.4
20.3
7.8
3.8
815.6
3,548.5
496.3
18.5
7.4
3.0
DEPOSIT TURNOVER
1. Historical tables containing revised data for earlier periods may be obtained
from the Monetary and Reserves Projections Section, Division of Monetary
Affairs, Board of Governors of the Federal Reserve System, Washington, D.C.
20551.
These data also appear on the Board's G.6 (406) release. For address, see inside
front cover.
2. Annual averages of monthly figures.
3. Represents accounts of individuals, partnerships, and corporations and
of states and political subdivisions.
4. Accounts authorized for negotiable orders of withdrawal (NOW) and accounts authorized for automatic transfer to demand deposits (ATS). ATS data are
available beginning December 1978.
5. Excludes ATS and NOW accounts, MMDA and special club accounts, such
as Christmas and vacation clubs.
6. Money market deposit accounts.
A16
DomesticNonfinancialStatistics • April 1990
1.23 LOANS AND SECURITIES
All Commercial Banks1
Billions of dollars; averages of Wednesday figures
1989
1990
Category
Feb/
Mar/
Apr/
May
r
June
r
July
r
Aug/
Sept/
Oct/
Nov/
Dec/
Jan.
Seasonally adjusted
1 Total loans and securities
2
2 U.S. government securities
3 Other securities
4 Total loans and leases 2
5 Commercial and industrial . . . . .
6
Bankers acceptances held . . .
7
Other commercial and
industrial
8
U.S. addressees 4 .
9
Non-U.S. addressees
10 Real estate
11 Individual
12 Security
13 Nonbank financial
institutions
14 Agricultural
15 State and political
subdivisions
16 Foreign banks
1/
Foreign official institutions
18 Lease financing receivables
19 All other loans
2,445.1
2,460.3
2,469.2
2,482.9
2,496.0
2,512.4
2,527.4
2,538.9
2,562.6
2,577.7
2,581.2
2,585.0
362.0
190.0
1,893.1
617.4
8.2
368.0
189.3
1,903.0
619.1
8.4
370.5
188.3
1,910.5
621.7
8.3
372.5
187.8
1,922.6
626.6
8.3
373.7
187.3
1,935.0
627.1
8.2
374.0
186.3
1,952.1
631.8
7.9
375.5
183.8
1,968.2
636.1
8.1
378.1
183.1
1,977.7
637.7
8.4
389.8
181.0
1,991.9
641.3
8.8
394.6
179.4
2,003.7
645.0
8.1
394.2
180.4
2,006.5
641.6
7.6
402.3
180.2
2,002.4
638.1
7.4
609.2
602.8
6.4
684.1
358.1
45.1
610.7
604.2
6.5
689.9
358.9
43.8
613.4
607.0
6.4
698.9
361.6
40.0
618.4
612.8
5.6
705.6
363.5
38.5
618.9
613.2
5.8
713.0
363.8
40.6
623.9
619.8
4.0
720.1
365.8
40.1
628.0
624.3
3.7
727.7
367.5
39.1
629.3
625.4
3.9
735.8
370.3
39.8
632.6
628.4
4.2
742.1
372.6
41.3
636.9
631.8
5.1
748.4
374.5
41.6
634.0
628.6
5.5
755.8
375.7
39.6
630.7
623.0
7.7
759.1
377.8
39.2
30.6
30.0
30.1
29.7
29.6
29.7
29.3
29.9
30.5
30.0
31.3
30.0
31.5
29.9
31.8
29.6
32.7
29.6
33.3
29.9
32.7
30.3
32.3
30.9
43.4
8.0
4.7
29.8
41.9
43.4
7.4
4.7
30.0
46.1
43.3
7.3
4.7
30.0
43.7
43.1
8.0
4.5
30.2
43.3
42.8
7.9
4.2
30.2
44.9
42.5
7.9
4.0
30.7
47.9
42.2
8.1
3.8
31.0
51.2
41.7
7.5
3.8
31.3
48.3
41.3
8.5
3.6
31.7
47.2
40.8
8.0
3.3
31.6
47.2
40.1
8.6
3.3
31.4
47.4
38.6
7.9
2.9
31.7
43.9
Not seasonally adjusted
20 Total loans and securities
2
21 U.S. government securities
22 Other securities
23 Total loans and leases 2
24
Commercial and industrial . . . . .
25
Bankers acceptances held . . .
26
Other commercial and
industrial
27
U.S. addressees 4
28
Non-U.S. addressees
29 Real estate
30
Individual
31
Security
32
Nonbank financial
institutions
33 Agricultural
34
State and political
subdivisions
35
Foreign banks
36
Foreign official institutions
37
Lease financing receivables
38
All other loans
2,447.1
2,455.0
2,469.4
2,482.2
2,496.3
2,507.0
2,521.1
2,537.5
2,562.9
2,579.8
2,589.2
2,590.6
366.1
189.9
1,891.0
617.9
8.4
369.5
188.8
1,896.7
621.1
8.3
370.4
187.5
1,911.5
625.9
8.1
371.6
187.1
1,923.5
630.6
8.1
371.3
186.5
1,938.5
629.6
8.0
372.1
184.7
1,950.2
631.9
7.6
376.1
183.8
1,961.2
633.4
8.1
377.2
183.3
1,977.0
633.7
8.4
387.1
181.9
1,993.9
638.7
8.9
394.7
180.7
2,004.5
642.3
8.2
395.4
181.4
2,012.5
641.6
7.7
404.0
180.7
2,005.9
636.6
7.5
609.5
604.2
5.3
681.9
357.3
44.5
612.8
607.4
5.4
687.5
355.8
44.8
617.9
612.5
5.4
697.2
359.0
42.6
622.5
616.9
5.6
704.6
361.2
39.0
621.6
616.0
5.6
712.9
362.1
43.0
624.3
618.6
5.7
720.7
364.3
40.2
625.3
619.8
5.5
729.2
367.7
38.5
625.3
619.8
5.5
737.8
372.1
38.9
629.8
624.2
5.6
743.4
373.7
40.2
634.0
628.6
5.5
750.1
375.9
40.4
633.8
628.5
5.3
756.6
380.2
38.6
629.1
624.1
5.0
759.1
381.4
37.5
30.2
29.1
29.4
28.7
29.5
28.8
29.2
29.5
30.8
30.3
31.4
30.7
31.3
30.7
31.4
30.5
32.4
30.4
33.6
30.2
33.7
30.2
33.0
30.3
44.0
7.9
4.7
29.9
43.7
43.6
7.0
4.7
29.9
44.3
43.3
7.0
4.7
30.1
43.5
43.0
7.9
4.5
30.2
43.7
42.6
8.1
4.2
30.2
44.8
42.1
8.0
4.0
30.4
46.3
41.9
8.1
3.8
30.9
45.9
41.6
7.8
3.8
31.1
48.1
41.2
8.8
3.6
31.6
49.9
40.6
8.1
3.3
31.6
48.3
39.7
8.4
3.3
31.5
48.7
39.5
8.0
2.9
32.1
45.4
1. Data have been revised because of benchmarking and seasonal adjustment
revisions beginning January 1973. These data also appear in the Board's G.7 (407)
release. For address, see inside front cover.
2. Excludes loans to commercial banks in the United States,
3. Includes nonfinancial commercial paper held,
4. United States includes the 50 states and the District of Columbia.
Commercial Banking Institutions
A17
1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS 1
Monthly averages, billions of dollars
1990
1989
Source
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Seasonally adjusted
Total nondeposit funds
Net balances due to related foreign offices —
Borrowings from other than commercial banks
in United States
Domestically chartered banks
Foreign-related banks
Not seasonally adjusted
Total nondeposit funds
Net balances due to related foreign offices
Domestically chartered banks
Foreign-related banks
Borrowings from other than commercial banks
in United States 4
Domestically chartered banks
Federal funds and security RP
borrowings
Other®
Foreign-related banks 6
Feb/
Mar/
Apr/
May'
June'
July'
Aug.'
Sept.'
Oct.'
Nov.'
Dec.'
Jan.
212.2
10.7
212.5
8.2
206.0
3.0
211.8
-.1
229.6
7.7
229.1
11.1
230.6
9.3
238.9
9.7
249.3
9.9
252.8
8.8
249.5
7.2
245.4
10.6
201.4
161.3
40.1
204.3
165.7
38.6
203.0
163.5
39.5
212.0
169.6
42.4
221.9
179.5
42.4
218.0
175.8
42.2
221.4
178.7
42.6
229.2
185.4
43.7
239.4
192.6
46.8
244.0
194.8
49.2
242.4
195.0
47.4
234.9
187.1
47.8
217.0
10.5
-17.6
28.1
218.2
7.1
-19.5
26.7
208.7
.9
-22.8
23.7
219.5
2.5
-21.9
24.4
232.8
7.8
-18.3
26.2
224.8
8.1
-16.4
24.5
229.4
8.9
-15.5
24.4
234.9
10.7
-14.2
24.9
242.4
9.6
-14.8
24.4
248.4
9.8
-15.2
25.0
242.5
9.7
-19.0
28.7
245.0
10.2
-14.7
24.9
206.5
165.1
211.0
170.9
207.8
167.4
217.0
174.1
224.9
180.8
216.7
174.0
220.5
178.2
224.2
181.2
232.8
187.8
238.6
193.2
232.8
187.9
234.8
185.4
161.9
3.2
41.4
167.4
3.5
40.1
162.9
4.5
40.4
170.1
4.0
42.9
177.0
3.8
44.1
170.9
3.1
42.8
175.2
3.0
42.3
178.3
3.0
42.9
184.8
2.9
45.1
190.8
2.4
45.4
185.4
2.5
44.9
182.8
2.6
49.4
441.9
441.7
447.1
449.9
452.3
452.3
457.0
457.4
460.0
459.4
463.4
461.1
462.0
462.6
460.0
461.5
461.4
462.6
463.9
464.4
464.3
462.7
462.7
460.4
20.8
25.9
20.9
18.1
21.3
20.2
25.5
34.3
25.7
26.2
22.4
23.0
22.3
15.8
22.8
24.9
21.5
20.6
20.4
14.7
21.1
19.6
20.2
23.2
MEMO
15
16
17
18
Gross large time deposits 7
Seasonally adjusted
Not seasonally adjusted
U.S. Treasury demand balances at commercial
banks 8
Seasonally adjusted
Not seasonally adjusted
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
corporations owned by domestically chartered and foreign banks.
These data also appear in the Board's G.10 (411) release. For address, see
inside front cover.
2. Includes federal funds, RPs, and other borrowing from nonbanks and net
balances due to related foreign offices.
3. Reflects net positions of U.S. chartered banks, Edge Act corporations, and
U.S. branches and agencies of foreign banks with related foreign offices plus net
positions with own IBFs.
4. Other borrowings are borrowings through 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, loan RPs, and sales of participations in pooled loans.
5. Based on daily average data reported weekly by approximately 120 large
banks and quarterly or annual data reported by other banks.
6. Figures are partly daily averages and partly averages of Wednesday data.
7. Time deposits in denominations of $100,000 or more. Estimated averages of
daily data.
8. U.S. Treasury demand deposits and Treasury tax-and-loan notes at commercial banks. Averages of daily data.
A18
1.25
DomesticNonfinancialStatistics • April 1990
A S S E T S A N D L I A B I L I T I E S OF C O M M E R C I A L B A N K I N G I N S T I T U T I O N S
Last-Wednesday-of-Month Series 1
Billions of dollars
1989
1990
Account
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
2,627.1
539.1
355.5
183.6
21.8
2,066.2
154.9
1,911.3
622.9
692.6
358.1
237.7
2,623.0
538.3
356.6
181.7
17.8
2,066.8
150.7
1,916.2
627.3
699.4
361.8
227.7
2,659.8
541.1
359.1
182.0
19.2
2,099.5
160.5
1,939.0
631.1
706.7
363.8
237.4
2,660.7
541.6
362.2
179.4
18.2
2,100.9
155.0
1,945.9
628.3
715.1
366.0
236.6
2,677.1
538.3
360.3
178.1
19.8
2,119.0
162.4
1,956.6
635.3
722.8
366.2
232.3
2,692.5
542.8
365.3
177.5
18.7
2,131.0
162.9
1,968.1
631.9
733.9
371.4
231.0
2,695.7
542.4
366.4
176.1
18.3
2,135.0
158.0
1,977.1
630.3
737.5
375.5
233.7
2,728.1
545.4
370.8
174.6
26.6
2,156.1
164.2
1,992.0
634.9
743.2
376.1
237.8
2,764.7
549.5
375.8
173.7
27.6
2,187.6
179.9
2,007.8
638.7
752.0
378.8
238.2
2,770.9
550.4
375.7
174.7
23.4
2,197.1
181.9
2,015.2
639.4
757.6
384.5
233.8
2,781.3
562.9
389.8
173.0
32.0
2,186.5
180.2
2,006.3
631.9
760.4
383.6
230.5
211.5
30.9
26.8
75.9
215.8
33.4
26.9
78.8
248.3
27.8
27.9
107.6
214.2
27.9
27.6
78.7
211.7
30.6
27.4
75.2
212.0
28.7
28.5
77.4
219.6
31.7
28.0
82.6
213.0
28.0
27.9
77.5
234.8
38.7
30.7
84.1
259.4
42.8
31.6
98.8
223.2
24.5
28.1
89.8
28.8
49.0
28.5
48.3
34.9
50.2
29.6
50.5
28.8
49.7
29.7
47.7
29.0
48.3
28.8
50.7
28.9
52.3
32.5
53.7
30.6
50.3
A L L COMMERCIAL BANKING
INSTITUTIONS 2
1 Loans and securities
2
Investment securities
3
U.S. government securities
Other
4
5
Trading account assets
6 Total loans
7
Interbank loans
8
Loans excluding interbank
9
Commercial and industrial
10
Real estate
11
Individual
12
All other
13 Total cash assets
14 Reserves with Federal Reserve Banks.
15 Cash in vault
16 Cash items in process of collection . . .
17
Demand balances at U.S. depository
institutions
18 Other cash assets
19 Other assets
194.1
200.7
206.8
198.7
201.1
199.6
203.9
203.8
201.9
208.2
214.0
20 Total assets/total liabilities and capital....
3,032.7
3,039.5
3,114.9
3,073.6
3,090.0
3,104.0
3,119.3
3,144.9
3,201.3
3,238.4
3,218.5
21
22
23
24
25
26
27
2,123.7
583.2
523.2
1,017.3
483.6
223.9
201.4
2,134.2
594.5
512 0
1,027.6
486.7
217.4
201.2
2,182.6
628.5
509.7
1,044.3
510.6
218.6
203.2
2,138.2
580.5
507.4
1,050.2
512.7
218.4
204.4
2,152.0
579.4
514.0
1,058.6
510.2
223.1
204.7
2,166.6
583.4
518.9
1,064.4
504.6
226.3
206.5
2,175.3
588.5
520.7
1,066.1
516.5
221.4
206.1
2,194.2
588.0
527.6
1,078.6
526.5
222.4
201.9
2,221.1
602.5
537.6
1,081.0
542.2
235.2
202.9
2,265.1
643.3
540.3
1,081.5
530.6
238.9
203.8
2,241.9
613.7
542.7
1,085.5
551.7
222.1
202.8
372.1
369.5
372.3
374.4
373.5
377.5
378.5
390.4
396.2
392.2
415.0
188.8
186.6
188.0
185.4
184.6
184.0
182.3
181.6
180.9
181.6
179.8
2.407.8
513.1
342.7
170.4
21.8
1,872.8
122.3
1,750.5
506.1
669.8
357.7
216.9
2,407.8
513.8
344.1
169.7
17.8
1,876.2
120.2
1,756.0
511.3
676.0
361.4
207.3
2,446.0
516.1
345.9
170.2
19.2
1,910.6
131.5
1,779.2
515.5
683.2
363.5
217.0
2,439.9
517.3
349.5
167.8
18.2
1,904.5
119.3
1,785.1
511.6
691.6
365.6
216.3
2,452.1
514.2
347.8
166.5
19.8
1,918.1
126.4
1,791.7
515.6
698.2
365.8
212.0
2,467.6
519.4
353.5
165.9
18.7
1,929.4
127.0
1,802.5
512.8
708.7
371.1
209.9
2,473.6
519.0
354.5
164.5
18.3
1,936.3
125.1
1,811.2
510.4
712.2
375.2
213.5
2,506.5
521.6
358.7
162.9
26.6
1,958.3
134.9
1,823.5
514.2
717.1
375.8
216.4
2,526.4
523.0
362.1
160.9
27.6
1,975.8
142.1
1,833.7
515.3
724.4
378.5
215.5
2,535.8
524.2
363.2
161.0
23.4
1,988.2
145.8
1,842.4
515.9
729.6
384.2
212.7
2,548.3
535.1
375.3
159.8
32.0
1,981.2
144.7
1,836.5
512.7
731.0
383.2
209.7
191.4
29.5
26.8
75.1
195.3
30.7
26.8
77.9
227.0
26.7
27.9
106.6
192.3
26.6
27.6
77.7
190.1
29.6
27.4
74.4
191.7
27.0
28.5
76.5
197.6
29.5
28.0
81.3
191.5
26.3
27.9
76.3
209.5
37.9
30.7
82.2
235.0
41.7
31.5
97.4
200.9
22.7
28.1
88.3
26.6
33.4
26.8
33.1
32.9
33.0
27.5
32.9
27.0
31.7
28.0
31.7
27.3
31.6
26.9
34.2
27.0
31.7
30.7
33.6
28.7
33.0
Deposits
Transaction deposits
Savings deposits
Time deposits
Borrowings
Other liabilities
Residual (assets less liabilities)
MEMO
28 U.S. government securities (including
trading account)
29 Other securities (including trading
account)
DOMESTICALLY CHARTERED
COMMERCIAL BANKS 3
30 Loans and securities
31
Investment securities
U.S. government securities
32
33
Other
Trading account assets
34
35
Total loans
36
Interbank loans
37
Loans excluding interbank
38
Commercial and industrial
39
Real estate
40
Individual
41
All other
42 Total cash assets
43
Reserves with Federal Reserve Banks.
44
Cash in vault
45
Cash items in process of collection . . .
46
Demand balances at U.S. depository
institutions
47
Other cash assets
48 Other assets
49 Total assets/liabilities and capital
50
51
52
53
54
55
56
Deposits
Transaction deposits
Savings deposits
Time deposits
Borrowings
Other liabilities
Residual (assets less liabilities)
130.6
134.6
133.6
131.6
128.4
127.5
131.5
126.3
132.2
136.0
138.7
2,729.9
2,737.7
2,806.6
2,763.9
2,770.6
2,786.7
2,802.8
2,824.3
2,868.2
2,906.7
2,887.9
2,047.4
574.1
520.7
952.6
362.8
121.7
197.9
2,056.2
584.8
509.4
961.9
368.2
115.6
197.7
2,103.0
618.7
507.1
977.2
383.0
120.9
199.7
2,058.8
571.2
504.8
982.9
387.3
116.9
200.8
2,071.3
570.2
511.3
989.9
380.2
117.8
201.2
2,086.9
574.7
516.2
995.9
375.5
121.3
203.0
2,094.5
578.8
517.9
997.7
390.8
114.9
202.6
2,112.4
578.4
525.0
1,009.0
393.2
120.4
198.4
2,139.2
592.7
534.8
1,011.6
404.4
125.2
199.4
2,182.4
633.2
537.5
1,011.7
398.3
125.8
200.3
2,159.9
603.4
539.9
1,016.6
404.5
124.2
199.2
42.5
627.3
43.4
632.6
44.3
638.9
45.3
646.2
45.7
652.5
46.4
662.3
47.1
665.0
47.9
669.2
48.5
676.0
49.1
680.5
50.3
680.6
MEMO
57 Real estate loans, revolving
58 Real estate loans, other
1. Back data are available from the Banking and Monetary Statistics section,
Board of Governors of the Federal Reserve System, Washington, D.C., 20551.
These data also appear in the Board's weekly H.8 (510) release.
Figures are partly estimated. They include all bank-premises subsidiaries and
other significant majority-owned domestic subsidiaries. Loan and securities data
for domestically chartered commercial banks are estimates for the last Wednesday of the month based on a sample of weekly reporting banks and quarter-end
condition report data. Data for other banking institutions are estimates made for
the last Wednesday of the month based on a weekly reporting sample of
foreign-related institutions and quarter-end condition reports.
2. Commercial banking institutions include insured domestically chartered
commercial banks, branches and agencies of foreign banks, Edge Act and
Agreement corporations, and New York State foreign investment corporations.
3. Insured domestically chartered commercial banks include all member banks
and insured nonmember banks.
Weekly Reporting Commercial Banks
A19
1.26 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS 1
Millions of dollars, Wednesday figures
1989
1990
Account
Dec. 6
Dec. 13
Dec. 20
Dec. 27
Jan. 3
Jan. 10
1 Cash and balances due from depository institutions . . . 112,989
114,977
123,403
138,913
141,952
119,669
2 Total loans, leases, and securities, net
1,257,325 1,258,300 1,258,888 1,251,465 1,275,712 1,268,788
3 U.S. Treasury and government agency
164,934
161,214
165,260
157,022
163,514
166,819
4 Trading account
22,782
19,700
16,554
22,685
20,%9
23,342
5 Investment account
142,152
141,514
142,545
142,576
140,469
143,477
6 Mortgage-backed securities3
71,681
72,119
71,306
71,601
71,196
71,800
All other maturing in
7
One year or less
19,930
19,949
20,406
19,846
20,370
20,957
8
Over one through five years
34,961
34,724
34,346
34,008
33,986
34,508
9
Over five years
15,955
15,537
15,845
15,419
16,070
16,212
10 Other securities
66,311
66,355
66,206
67,485
66,258
67,070
11 Trading account
1,087
1,253
1,244
1,078
1,276
1,056
12 Investment account
64,954
64,981
66,241
66,014
65,224
65,277
13
States and political subdivisions, by maturity
38,036
37,406
37,332
37,672
37,790
37,459
14
One year or less
5,017
4,919
4,778
4,963
4,876
4,644
15
Over one year
33,018
32,487
32,894
32,814
32,827
32,456
16
Other bonds, corporate stocks, and securities
27,188
27,548
27,649
28,568
28,555
27,486
17 Other trading account assets
6,265
5,866
6,001
5,570
5,576
6,000
18 Federal funds sold4
71,480
70,744
71,999
69,587
72,872
66,654
19 To commercial banks
48,399
51,964
50,681
55,314
49,069
48,007
20 To nonbank brokers and dealers in securities
13,459
13,484
15,248
14,638
12,650
12,595
21 To others
7,834
7,037
6,576
5,422
4,907
6,052
22 Other loans and leases, gross
991,529
993,2%
9%,866
995,794 1,009,602 1,005,167
23 Other loans, gross
965,642
970,873
983,139
%7,382
%9,626
978,476
24
Commercial and industrial
320,067
322,195
317,993
318,357
318,772
321,033
25
Bankers acceptances and commercial paper
1,495
1,404
1,425
1,410
1,404
1,387
26
All other
316,497
316,947
318,663
317,368
320,770
319,646
27
U.S. addressees
314,744
316,936
315,172
315,562
318,978
317,8%
28
Non-U.S. addressees
1,727
1,753
1,774
1,806
1,793
1,749
29
Real estate loans
352,158
353,161
353,408
352,577
357,615
357,986
30
Revolving, home equity
26,908
27,222
27,773
27,864
27,035
27,272
31
Mother
325,249
326,186
325,305
329,842
326,127
330,122
32
177,161
177,792
181,082
To individuals for personal expenditures
175,493
176,620
180,735
33
To depository and financial institutions
49,119
47,948
47,570
50,448
49,918
48,480
34
Commercial banks in the United States
21,490
20,633
20,812
21,140
22,611
23,233
35
Banks in foreign countries
4,615
4,876
4,368
4,430
5,201
4,136
36
Nonbank depository and other financial
institutions
23,014
22,972
22,439
22,329
22,636
22,548
37
For purchasing and carrying securities
17,110
16,260
14,650
15,286
16,852
14,767
5,675
38
To finance agricultural production
5,355
5,379
5,450
5,617
5,398
39
To states and political subdivisions
25,210
24,919
24,856
25,040
24,9%
24,916
40
To foreign governments and official institutions . . .
1,340
1,364
1,452
1,415
1,319
1,201
41
All other
23,688
23,428
24,933
25,116
22,305
22,153
42 Lease financing receivables
25,887
25,993
25,913
26,168
26,463
26,691
43 LESS: Unearned income
4,784
4,813
4,817
4,762
4,938
4,928
44
38,381
38,480
Loan and lease reserve
38,539
38,004
37,994
38,400
45 Other loans and leases, net
948,336
953,602
953,027
966,264
949,940
%2,246
136,526
46 All other assets
135,658
136,780
135,727
139,695
135,674
47 Total assets
1,505,973 1,510,058 1,518,817 1,526,105 1,557,359 1,524,131
48 Demand deposits
227,177
247,136
247,985
228,102
271,702
235,259
182,551
49 Individuals, partnerships, and corporations
191,286
197,147
188,220
185,306
214,963
50 States and political subdivisions
5,998
5,944
7,450
7,245
6,170
8,112
51 U.S. government
2,675
5,104
1,853
2,730
3,554
1,446
22,542
52 Depository institutions in the United States
20,475
20,197
23,729
26,478
20,996
6,844
53 Banks in foreign countries
6,304
5,982
8,1%
8,088
6,119
54 Foreign governments and official institutions
606
628
681
746
878
606
55 Certified and officers' checks
8,567
11,929
10,485
9,595
8,349
10,585
56 Transaction balances other than demand deposits
79,918
79,232
79,264
86,524
83,724
78,322
57 Nontransaction balances
706,637
702,865
706,401
704,033
722,592
723,942
58 Individuals, partnerships, and corporations
668,841
665,733
666,395
668,522
684,705
684,646
59 States and political subdivisions
28,424
28,932
29,273
29,298
30,257
29,399
60 U.S. government
898
886
886
944
900
913
61 Depository institutions in the United States
7,289
7,061
7,241
7,128
7,002
7,523
62 Foreign governments, official institutions, and banks
533
563
554
579
572
573
63 Liabilities for borrowed money
299,242
306,167
306,043
302,906
290,147
291,188
64 Borrowings from Federal Reserve Banks
0
0
25
1,943
0
0
65 Treasury tax-and-loan notes
17,626
15,064
2,084
7,786
7,360
5,978
66 All other liabilities for borrowed money6
298,381
281,616
285,899
289,104
298,658
284,170
67 Other liabilities and subordinated notes and debentures
91,000
87,003
92,012
92,732
90,901
86,772
68 Total liabilities
1,406,901 1,410,880 1,419,475 1,426,920 1,458,778 1,423,975
99,342
99,185
69 Residual (total assets minus total liabilities)7
99,072
99,178
98,581
100,157
Jan. 17
Jan. 24
Jan. 31
Adjustment
bank
19892
112,801
144,053
110,336
1,280,208 1,272,574 1,283,823
168,891
170,776
173,916
24,812
25,605
25,102
145,964
143,286
148,814
72,905
75,745
76,674
1,024
17,888
2,407
1
2,406
470
20,815
21,161
21,860
34,016
34,381
34,3%
15,551
14,675
15,884
67,226
67,140
67,006
887
960
802
66,180
66,338
66,205
37,2%
37,120
37,357
4,614
4,643
4,676
32,653
32,444
32,743
29,043
29,085
28,823
6,011
5,471
6,060
71,534
65,054
71,328
52,004
45,791
50,288
13,274
13,961
13,679
6,255
5,302
7,361
1,010,300 1,007,098 1,008,772
980,076
983,518
981,752
319,102
319,760
319,956
1,325
1,451
1,425
318,309
317,777
318,531
316,626
316,176
316,957
1,682
1,601
1,574
358,292
358,666
358,597
27,921
28,081
28,210
330,372
330,584
330,387
180,426
180,362
180,291
53,5%
52,485
52,183
25,787
26,782
26,353
4,136
5,193
4,093
591
1,014
331
1,234
2
1,232
797
124
673
434
0
766
745
21
0
13,916
13,864
3,580
17
3,563
3,562
0
6,248
301
5,947
3,219
43
12
0
21,566
21,737
16,251
16,041
5,548
5,515
24,816
24,756
1,143
1,181
21,638
23,231
27,022
27,020
4,924
4,848
38,668
38,412
%3,506
965,512
133,542
138,785
1,518,918 1,532,945
219,475
232,213
173,861
185,059
6,560
7,160
4,127
2,246
20,012
21,208
6,362
6,021
720
780
7,833
9,739
78,982
80,236
719,576
719,887
680,428
680,987
30,339
30,074
831
850
7,380
7,392
597
584
306,965
306,882
475
590
24,045
25,565
282,445
280,727
95,455
93,749
32
97
86
355
0
236
52
193
242
13,481
935
19,848
3,273
2,885
69
29
137
0
0
152
1,998
14,842
13,867
1,036
4
-65
0
-1,246
0
11
-1,257
409
1,459,7% 1,420,453 1,432,%8
98,464
98,830
99,977
19,276
572
1,231,448 1,229,554 1,222,738 1,241,125 1,240,470 1,245,545 1,243,592 1,250,442
9%,268
993,831
993,888 1,004,549 1,000,581 1,004,043
999,579 1,003,459
215,307
214,664
218,564
217,113
218,338
217,514
217,171
216,028
17,882
19,039
17.257
19,652
18,753
20,510
19,243
21,792
524
536
532
541
537
544
542
540
232
229
235
242
239
239
253
242
295
304
297
298
299
305
290
298
268,617
266,828
268,435
275,728
276,506
275,917
272,733
273,730
17,567
13,926
4,3%
462
22,616
16,453
5,575
24,834
1,207
23,438
26,783
4,924
38,205
%7,172
134,365
1,558,626
260,654
204,517
6,770
4,504
27,496
6,833
676
9,857
83,015
723,028
683,968
30,100
933
7,429
598
301,150
0
12,350
288,799
91,949
MEMO
70 Total loans and leases (gross) and investments
adjusted8
1,230,630
71 Total loans and leases (gross) adjusted 8
993,121
72 Time deposits in amounts of $100,000 or more
217,753
73 U.S. Treasury securities maturing in one year or less .
18,4%
74 Loans sold outright to affiliates—total9
536
75 Commercial and industrial
233
304
76 Other
77 Nontransaction savings deposits (including MMDAs) .. 268,157
1. Beginning Jan. 6, 1988, the "Large bank" reporting group was revised
somewhat, eliminating some former reporters with less than $2 billion of assets
and adding some new reporters with assets greater than $3 billion.
2. These amounts represent accumulated adjustments originally made to offset
the cumulative effects of bank mergers during the calendar year. The adjustment
data for 1989 should be added to the reported data for 1989 to establish
comparability with data reported for 1990.
3. Includes U.S. government-issued or guaranteed certificates of participation
in pools
of residential mortgages.
4. Includes securities purchased under agreements to resell.
http://fraser.stlouisfed.org/
5. Includes allocated transfer risk reserve.
Federal Reserve Bank of St. Louis
0
0
0
4,068
6. 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.
7. This is not a measure of equity capital for use in capital-adequacy analysis or
for other analytic uses.
8. Exclusive of loans and federal funds transactions with domestic commercial
banks.
9. Loans sold are those sold outright to a bank's own foreign branches,
nonconsolidated nonbank affiliates of the bank, the bank's holding company (if
not a bank), and nonconsolidated nonbank subsidiaries of the holding company.
A20
DomesticNonfinancialStatistics • April 1990
1.28 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS
IN NEW YORK CITY1
Millions of dollars, Wednesday figures
1989
1990
Account
Dec. 6
1 Cash balances due from depository institutions
2 Total loans, leases, and securities, net 2
Securities
3 U.S. Treasury and government agency
4 Trading account
5
Investment account
Mortgage-backed securities
6
All other maturing in
7
One year or less
8
Over one through five years
9
Over five years
10 Other securities 3
11 Trading account
12 Investment account
13
States and political subdivisions, by maturity
14
One year or less
15
Over one year
Other bonds, corporate stocks, and securities
16
17 Other trading account assets
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
Loans and leases
Federal funds sold
To commercial banks
To nonbank brokers and dealers in securities
To others
Other loans and leases, gross
Other loans, gross
Commercial and industrial
Bankers acceptances and commercial paper
All other
U.S. addressees
Non-U.S. addressees
Real estate loans
Revolving, home equity
All other
To individuals for personal expenditures
To depository and financial institutions
Commercial banks in the United States
Banks in foreign countries
Nonbank depository and other financial institutions
For purchasing and carrying securities
To finance agricultural production
To states and political subdivisions
To foreign governments and official institutions
All other
Lease financing receivables
LESS: Unearned income
Loan and lease reserve
Other loans and leases, net
All other assets
47 Total assets
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
Deposits
Demand deposits
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Depository institutions in the United States
Banks in foreign countries
Foreign governments and official institutions
Certified and officers' checks
Transaction balances other than demand deposits
(ATS, NOW, Super NOW, telephone transfers)
Nontransaction balances
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Depository institutions in the United States
Foreign governments, official institutions, and banks
Liabilities for borrowed money
Borrowings from Federal Reserve Banks
Treasury tax-and-loan notes
All other liabilities for borrowed money
Other liabilities and subordinated notes and debentures
68 Total liabilities
69 Residual (total assets minus total liabilities)
9
Dec. 13
Dec. 20
Dec. 27
Jan. 3
Jan. 10
Jan. 17
Jan. 24
Jan. 31
22,921
21,572
28,238
36,663
27,408
25,306
28,816
24,988
21,895
209,462
214,997
210,684
207,786
211,295
207,205
213,833
212,264
215,737
0
0
16,689'
8,588
0
0
16,591'
8,464
0
0
16,517'
8,402
0
0
16,396'
8,242
0
0
16,076
8,242
0
0
16,172
8,235
0
0
16,809
9,000
0
0
18,641
10,807
0
0
19,307
11,138
2,792
3,416'
1,893'
0
0
14,325'
7,893
1,052
6,841
6,432r
0
2,813
3,420'
1,894'
0
0
14,352r
7,867
1,055
6,812
6,485r
0
2,816
3,379'
1,92c
0
0
14,257'
7,837
1,053
6,783
6,421'
0
2,774
3,452'
1,926'
0
0
14,282'
7,833
1,047
6,786
6,449'
0
2,264
3,536
2,034
0
0
14,525
7,829
1,065
6,763
6,6%
0
2,367
3,536
2,034
0
0
14,576
7,816
1,057
6,759
6,760
0
2,241
3,524
2,044
0
0
14,625
7,789
1,044
6,745
6,835
0
2,168
3,620
2,046
0
0
14,849
7,807
1,072
6,734
7,042
0
2,256
3,658
2,254
0
0
14,847
7,749
1,076
6,673
7,098
0
17,344
8,310
4,922
4,113
181,205
175,510
59,781
122
59,659
59,056
603
61,332
3,840
57,492
19,975
18,596
7,166
3,200
8,230
5,425
103
5,515
316
4,465
5,695
1,801
18,301
161,103
61,547
20,548
12,041
5,098
3,409
183,655
177,917
60,455
116
60,339
59,724
616
61,563
3,852
57,711
19,969
18,479
7,259
3,006
8,214
6,841
111
5,350
346
4,803
5,739
1,807
18,343
163,506
61,204
17,304
10,169
4,154
2,981
182,749
177,023
60,379
134
60,245
59,635
609
61,303
3,864
57,439
19,967
18,066
6,797
3,536
7,733
6,298
113
5,340
405
5,154
5,726
1,808
18,336
162,606
59,750
16,289
10,381
3,339
2,569
180,812
175,068
58,571
125
58,445
57,838
607
60,850
3,841
57,009
20,046
18,098
7,446
3,026
7,625
6,150
113
5,349
384
5,509
5,744
1,801
18,192
160,819
61,849
17,988
11,957
3,332
2,699
182,400
176,691
57,966
166
57,800
57,233
566
61,398
3,941
57,458
20,096
20,511
9,055
3,987
7,469
5,208
107
5,387
296
5,723
5,709
1,820
17,873
162,707
65,902
15,702
8,731
3,425
3,546
179,833
174,135
58,008
101
57,907
57,339
567
61,661
3,949
57,712
20,096
19,024
8,597
2,888
7,539
5,260
117
5,326
228
4,414
5,698
1,818
17,261
160,754
62,252
17,%2
10,819
3,574
3,569
183,517
177,830
57,792
91
57,702
57,054
648
61,625
3,955
57,671
20,081
21,044
9,444
3,867
7,732
6,551
111
5,317
246
5,061
5,688
1,819
17,261
164,437
64,560
16,456
10,452
3,081
2,923
181,408
175,721
57,854
85
57,769
57,195
574
61,489
3,964
57,525
20,117
19,603
9,258
2,970
7,375
6,658
100
5,312
214
4,374
5,687
1,824
17,266
162,318
61,211
18,516
10,403
3,539
4,574
182,285
176,611
58,519
93
58,426
57,854
572
61,750
3,969
57,782
20,121
19,296
8,887
2,847
7,562
5,988
105
5,316
326
5,189
5,674
1,820
17,397
163,068
63,950
293,930
297,773
298,672
306,298
304,605
294,763
307,210
298,464
301,583
48,644
34,518
584
448
4,451
5,037
479
3,127
50,476
36,648
547
168
4,458
4,799
740
3,114
59,194
39,192
953
1,004
5,424
6,708
392
5,521
55,232
38,291
810
270
5,432
5,547
541
4,340
60,264
43,850
1,040
295
4,617
6,690
578
3,194
53,284
37,261
916
661
5,332
4,844
470
3,800
58,254
40,746
834
611
6,341
5,423
510
3,790
49,609
34,652
689
784
5,115
5,044
557
2,768
51,287
35,897
773
278
5,324
4,664
659
3,692
8,560
116,075
106,650
7,117
30
2,041
238
68,108
0
1,594
66,515
28,037
8,505
115,658
106,374
7,040
29
1,980
234
67,054
0
1,541
65,514
31,589
8,675
116,117
107,067
6,819
27
1,976
228
61,462
0
4,664
56,798
28,929
8,701
115,660
106,870
6,691
26
1,833
240
71,691
1,680
3,831
66,180
30,930
9,403
117,550
109,041
6,447
25
1,795
241
65,457
0
322
65,135
27,880
9,146
116,804
108,307
6,504
26
1,736
231
61,668
0
1,091
60,577
29,828
9,073
117,392
108,884
6,523
26
1,727
233
68,106
0
2,799
65,307
30,482
8,659
116,209
107,697
6,527
27
1,726
232
64,150
0
6,541
57,609
35,893
8,760
116,676
108,165
6,540
28
1,723
220
67,277
0
6,721
60,556
33,717
269,425
273,282
274,377
282,214
280,554
270,731
283,308
274,519
277,717
24,505
24,491
24,295
24,084
24,051
24,032
23,901
23,945
23,866
214,087
183,073
41,740
3,066
215,846
184,904
41,535
3,084
213,862
183,087
41,798
3,118
209,952
179,274
41,103
3,240
209,977
179,377
41,336
2,615
208,956
178,207
40,855
2,744
212,650
181,216
41,683
2,835
211,644
178,154
41,147
2,950
215,665
181,511
41,281
3,391
MEMO
70
71
72
73
Total loans and leases (gross) and investments adjusted •
Total loans and leases (gross) adjusted 10
Time deposits in amounts of $100,000 or more
U.S. Treasury securities maturing in one year or less
1. These data also appear in the Board's H.4.2 (504) release. For address, see
inside front cover.
2. Excludes trading account securities.
3. Not available due to confidentiality.
4. Includes U.S. government-issued or guaranteed certificates of participation
in
pools of residential mortgages.
5. Includes securities purchased under agreements to resell.
http://fraser.stlouisfed.org/
6. Includes allocated transfer risk reserve.
Federal Reserve Bank of St. Louis
7. Includes trading account securities.
8. Includes federal funds purchased and securities sold under agreements to
repurchase.
9. Not a measure of equity capital for use in capital adequacy analysis or for
other analytic uses.
10. Exclusive of loans and federal funds transactions with domestic commercial banks.
Weekly Reporting Commercial Banks
1.30 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS 1
Liabilities
A21
Assets and
Millions of dollars, Wednesday figures
1989
1990
Account
Dec.
38
39
40
41
Cash and due from depository institutions . . .
Total loans and securities
U.S. Treasury and government agency
securities
Other securities
Federal funds sold
To commercial banks in the United States .
To others
Other loans, gross
Commercial and industrial
Bankers acceptances and commercial
paper
All other
U.S. addressees
Non-U.S. addressees
Loans secured by real estate 3
To financial institutions
Commercial banks in the United States..
Banks in foreign countries
Nonbank financial institutions
To foreign governments and official
institutions
For purchasing and carrying securities . . . .
All other 3
Other assets (claims on nonrelated parties) ..
Net due from related institutions
Total assets
Deposits or credit balances due to other
than directly related institutions
Transaction accounts and credit balances .
Individuals, partnerships, and
corporations
Other..
Nontransaction accounts
Individuals, partnerships, and
corporations
Other
Borrowings from other than directly
related institutions
Federal funds purchased
From commercial banks in the
United States
From others
Other liabilities for borrowed money
To commercial banks in the
United States
To others
Other liabilities to nonrelated parties
Net due to related institutions
Total liabilities
42
43
Total loans (gross) and securities adjusted 7 ..
Total loans (gross) adjusted
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
6
Dec.
13
Dec.
20
Dec.
27
Jan.
3
Jan.
10
Jan.
17
Jan.
24
Jan.
31
12,161
142,824
12,958
143,457'
13,008
143,263
13,410
144,882'
12,719
143,274
13,077
142,536
12,920
140,223
13,708
141,533
12,637
143,025
8,922
6,637
4,984
3,233
1,751
122,281
74,495'
9,054
6,672
6,182
4,293
1,889
121,549'
73,960'
8,380
6,810
4,857
3,532
1,325
123,216
75,246'
8,266
6,925
6,956
5,745
1,211
122,735'
75,132'
8,429
7,038
6,153
4,626
1,527
121,654
74,243
9,013
6,893
6,403
4,942
1,461
120,227
72,964
9,280
6,741
4,678
3,165
1,513
119,524
73,060
9,538
6,770
7,639
5,989
1,650
117,586
72,006
9,828
6,747
6,993
5,643
1,350
119,457
72,210
2,050
72,445'
70,785'
1,660^
18,254'
24,869
18,487
1,803
4,579
2,062
71,898'
70,268'
1,63C
18,234'
24,441
18,082
1,779
4,580
2,065
73,181'
71,515'
1,666'
18,272'
24,826
18,348
1,636
4,842
2,054
73,078'
71.39C
1,688'
18,581'
24,910'
18,388
1,415
5,107'
1,811
72,432
70,822
1,610
18,950
24,832
17,900
1,833
5,099
1,755
71,209
69,751
1,458
19,138
24,762
17,817
1,867
5,078
1,886
71,174
69,701
1,473
19,450
23,447
16,900
1,421
5,126
2,058
69,948
68,388
1,560
19,433
22,695
16,628
1,231
4,836
1,983
70,227
68,732
1,495
19,488
23,902
17,943
1,144
4,815
431
2,026
2,206'
37,903
13,961
206,852
434
2,206
2,274'
38,117
12,517
207,047
402
2,141
2,329'
38,122
13,350
207,742
388
1,956
1,768'
37,250
12,124
207,665
382
1,510
1,737
37,674
15,131
208,798
263
1,436
1,664
37,111
16,059
208,785
254
1,702
1,611
35,294
16,458
204,898
246
1,559
1,647
35,407
14,558
205,206
254
1,585
2,018
36,563
15,184
207,410
49,684
3,735
50,906
4,292
50,992
4,241
50,180
4,047
50,156
4,085
49,780
3,917
50,664
4,210
50,089
4,531
50,151
4,574
2,509
1,226
45,949
2,514
1,778
46,614
2,612
1,629
46,751
2,632
1,415
46,133
2,656
1,429
46,071
2,542
1,375
45,863
2,725
1,485
46,454
2,572
1,959
45,558
3,0%
1,478
45,577
38,311
7,638
38,334
8,280
38,961
7,790
38,816
7,317
38,881
7,190
38,392
7,471
38,272
8,182
38,352
7,206
38,761
6,816
92,244
39,896
88,366
35,839
92,845
41,464
86,771
34,624
92,991
42,000
94,130
41,983
93,780
41,876
95,181
42,456
96,982
44,025
21,010
18,886
52,348
18,551
17,288
52,527
23,606
17,858
51,381
16,521
18,103
52,147
19,993
22,007
50,991
20,900
21,083
52,147
19,264
22,612
51,904
18,687
23,769
52,725
20,677
23,348
52,957
33,718
18,630
37,386
27,537
206,852
33,508
19,019
38,052
29,722
207,047
32,250
19,131
37,582
26,323
207,742
33,674
18,473
37,169
33,545
207,665
32,549
18,442
37,341
28,310
208,798
32,566
19,581
36,900
27,975
208,785
33,265
18,639
34,957
25,496
204,898
33,537
19,188
35,253
24,684
205,206
33,864
19,093
36,724
23,552
207,410
121,104
105,545
121,082'
105,356'
121,383
106,193
120,749'
105,558'
120,748
105,281
119,777
103,871
120,158
104,137
118,916
102,608
119,439
102,864
MEMO
1. Effective Jan. 4, 1989, the reporting panel includes a new group of large U.S.
branches and agencies of foreign banks. Earlier data included 65 U.S. branches
and agencies of foreign banks that included those branches and agencies with
assets of $750 million or more on June 30, 1980, plus those branches and agencies
that had reached the $750 million asset level on Dec. 31, 1984. These data also
appear in the Board's H.4.2 (504) release. For address, see inside front cover.
2. Includes securities purchased under agreements to resell.
3. Effective Jan. 4, 1989, loans secured by real estate are being reported as a
separate component of Other loans, gross. Formerly, these loans were included in
"All other", line 21.
4. Includes credit balances, demand deposits, and other checkable deposits.
5. Includes savings deposits, money market deposit accounts, and time
deposits.
6. Includes securities sold under agreements to repurchase.
7. Exclusive of loans to and federal funds sold to commercial banks in the
United States.
A22
DomesticNonfinancialStatistics • April 1990
1.31 GROSS DEMAND DEPOSITS Individuals, Partnerships, and Corporations1
Billions of dollars, estimated daily-average balances, not seasonally adjusted
Commercial banks
Type of holder
19852
Dec.
1988
1986
Dec.
1987
Dec.
1989
1988
Dec.
Sept.
Dec.
Mar.
June
Sept.
1 All holders—Individuals, partnerships, and
corporations
321.0
363.6
343.5
354.7
337.8
354.7
330.4
329.3
337.3
2
3
4
5
6
32.3
178.5
85.5
3.5
21.2
41.4
202.0
91.1
3.3
25.8
36.3
191.9
90.0
3.4
21.9
38.6
201.2
88.3
3.7
22.8
34.8
190.3
87.8
3.2
21.7
38.6
201.2
88.3
3.7
22.8
36.3
182.2
87.4
3.7
20.7
33.0
185.9
86.6
2.9
21.0
33.7
190.4
87.9
2.9
22.4
Financial business
Nonfinancial business
Consumer
Foreign
Other
Dec.
f
1
n.a.
1
I
•
Weekly reporting banks
19852
Dec.
7 All holders—Individuals, partnerships, and
corporations
8
9
10
11
12
Financial business
Nonfinancial business
Consumer
Foreign
Other
1988
1986
Dec.
1989
1988
Dec.
Sept.
Dec.
Mar.
June
Sept.
Dec.
168.6
195.1
183.8
198.3
185.3
198.3
181.9
182.2
186.6
196.7
25.9
94.5
33.2
3.1
12.0
32.5
106.4
37.5
3.3
15.4
28.6
100.0
39.1
3.3
12.7
30.5
108.7
42.6
3.6
12.9
27.2
101.5
41.8
3.1
11.7
30.5
108.7
42.6
3.6
12.9
27.2
98.6
41.1
3.3
11.7
25.4
99.8
42.4
2.9
11.7
26.3
101.6
43.0
2.8
12.9
27.6
108.8
44.1
3.0
13.2
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 Bulletin, p. 466.
Figures may not add to totals because of rounding.
2. Beginning in March 1984, these data reflect a change in the panel of weekly
reporting banks, and are not comparable to earlier data. Estimates in billions of
dollars for December 1983 based on the new weekly reporting panel are: financial
business, 24.4; nonfinancial business, 80.9; consumer, 30.1; foreign, 3.1; other
9.5.
Beginning March 1985, financial business deposits and, by implication, total
gross demand deposits have been redefined to exclude demand deposits due to
thrift institutions. Historical data have not been revised. The estimated volume of
such deposits for December 1984 is $5.0 billion at all insured commercial banks
and $3.0 billion at weekly reporting banks.
1987
Dec.
Historical data back to March 1985 have been revised to account for corrections
of bank reporting errors. Historical data before March 1985 have not been revised,
and may contain reporting errors. Data for all commercial banks for March 1985
were revised as follows (in billions of dollars): all holders, - . 3 ; financial business,
- . 8 ; nonfinancial business, - . 4 ; consumer, .9; foreign, .1; other, - . 1 . Data for
weekly reporting banks for March 1985 were revised as follows (in billions of
dollars): all holders, - . 1 ; financial business, - . 7 ; nonfinancial business, - . 5 ;
consumer, 1.1; foreign, .1; other, - . 2 .
3. Beginning March 1988, these data reflect a change in the panel of weekly
reporting banks, and are not comparable to earlier data. Estimates in billions of
dollars for December 1987 based on the new weekly reporting panel are: financial
business, 29.4; nonfinancial business, 105.1; consumer, 41.1; foreign, 3.4; other,
13.1.
Financial
Markets
A23
1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
1989
1985
Dec.
Instrument
1986
Dec.
1987
Dec.
1988
Dec.
1989
Dec.
July
Aug.
Sept.
Oct.
Nov/
Dec.
Commercial paper (seasonally adjusted unless noted otherwise)
1 All issuers
2
3
4
5
6
Financial companies'
Dealer-placed paper
Total
Bank-related (not seasonally
adjusted)
Directly placed paper
Total
Bank-related (not seasonally
adjusted)
Nonfinancial companies
298,779
329,991
357,129
455,017
525,266
506,095
516,476
507,090
508,043r
517,574
525,266
78,443
101,072
101,958
159,947
186,362
179,354
182,083''
177,080r
175,722r
182,459
186,362
1,602
2,265
1,428
1,248
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
135,320
151,820
173,939
192,442
209,551
205,847
208,915
206,521
210,855
210,560
209,551
44,778
85,016
40,860
77,099
43,173
81,232
43,155
102,628
n.a.
129,353
n.a.
121,217
n.a.
125,478
n.a.
123,489
n.a.
121,466
n.a.
124,555
n.a.
129,353
Bankers dollar acceptances (not seasonally adjusted) 6
7 Total
Holder
Accepting banks
Own bills
Bills bought
Federal Reserve Banks
Own account
Foreign correspondents
Others
Basis
14 Imports into United States
15 Exports from United States
16 All other
8
9
10
11
12
13
68,413
64,974
70,565
66,631
62,972
65,588
65,764
63,814
63,660
63,802
62,972
11,197
9,471
1,726
13,423
11,707
1,716
10,943
9,464
1,479
9,086
8,022
1,064
9,433
8,510
924
9,410
8,334
1,076
9,935
8,874
1,061
9,526
8,779
747
10,81r
9,108
1,703
9,923
8,548
1,375
9,433
8,510
924
0
937
56,279
0
1,317
50,234
0
965
58,658
0
1,493
56,052
0
1,066
52,473
0
1,026
55,152
0
1,014
54,815r
0
1,016
53,370
0
1,016
51,833
0
1,034
52,846
0
1,066
52,473
15,147
13,204
40,062
14,670
12,960
37,344
16,483
15,227
38,855
14,984
14,410
37,237
15,651
13,683
33,638
15,338
15,270
34,980
16,140
14,895
34,729
16,101
14,304
33,409
16,157
14,275
33,228
15,691
14,385
33,726
15,651
13,683
33,638
1. Institutions engaged primarily in activities such as, but not limited to,
commercial savings, and mortgage banking; sales, personal, and mortgage financing; factoring, finance leasing, and other business lending; insurance underwriting; and other investment activities.
2. Includes all financial company paper sold by dealers in the open market.
3. Beginning January 1989, bank-related series have been discontinued.
4. As reported by financial companies that place their paper directly with
investors.
5. Includes public utilities and firms engaged primarily in such activities as
communications, construction, manufacturing, mining, wholesale and retail trade,
transportation, and services.
6. Beginning January 1988, the number of respondents in the bankers acceptance survey were reduced from 155 to 111 institutions—those with $100 million
or more in total acceptances. The new reporting group accounts for over 90
percent of total acceptances activity.
1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans
Percent per year
Average
rate
7.75
8.00
8.25
8.75
9.25
9.00
8.75
8.50
9.00
9.50
10.00
10.50
11.00
11.00
11.50
1987
1988
1989
1987— Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
8.21
9.32
10.87
7.50
7.50
7.50
7.75
8.14
8.25
8.25
8.25
8.70
9.07
8.78
8.75
10.50
10.00
NOTE. These data also appear in the Board's H.15 (519) and G. 13 (415) releases.
For address, see inside front cover.
Average
rate
1988—Jan. ...
Feb. ..
Mar. ..
Apr. ..
May ...
June ..
July ...
Aug. ..
Sept. ..
Oct. ...
Nov. ..
Dec. ..
8.75
8.51
8.50
8.50
8.84
9.00
9.29
9.84
10.00
10.00
10.05
10.50
Period
1989— Jan. ...
Feb. ..
Apr. .
May ...
July ...
Aug. ..
Sept. ..
Oct. ...
Nov. ..
Dec. ..
1990— Jan. ...
Feb.
A24
1.35
DomesticNonfinancialStatistics • April 1990
I N T E R E S T R A T E S M o n e y and Capital Markets
Averages, percent per year; weekly, monthly and annual figures are averages of business day data unless otherwise noted.
1989
Instrument
1987
1988
1989, week ending
1989
Sept.
Oct.
Nov.
Dec.
Dec. 1
Dec. 8
Dec. 15
Dec. 22
Dec. 29
MONEY MARKET RATES
1 Federal funds 1,2
2 Discount window borrowing 1 ' 2 ' 3
Commercial paper •
3
1-month
4
3-month
5
6-month
Finance paper, directly placed 4.
6
1-month
/
3-month
8 6-month
Bankers acceptances ' 6
9
3-month
10 6-month
Certificates of deposit, secondary market
11
1-month
12
3-month
13 6-month
14 Eurodollar deposits,, 3-month 8
U.S. Treasury bills 5
Secondary market 9
15 3-month
16 6-month
17
1-year
Auction average 10
18 3-month
19 6-month
20
1-year
6.66
5.66
7.57
6.20
9.21
6.93
9.02
7.00
8.84
7.00
8.55
7.00
8.45
7.00
8.51
7.00
8.52
7.00
8.47
7.00
8.52
7.00
8.38
7.00
6.74
6.82
6.85
7.58
7.66
7.68
9.11
8.99
8.80
8.87
8.70
8.50
8.66
8.53
8.24
8.47
8.35
8.00
8.61
8.29
7.93
8.42
8.25
7.90
8.53
8.24
7.86
8.61
8.31
7.94
8.67
8.33
7.94
8.66
8.31
7.99
6.61
6.54
6.37
7.44
7.38
7.14
8.99
8.72
8.16
8.76
8.35
7.56
8.54
8.29
7.50
8.33
8.07
7.45
8.40
8.01
7.33
8.21
7.97
7.34
8.40
8.00
7.33
8.45
8.01
7.31
8.43
8.01
7.34
8.28
8.00
7.36
6.75
6.78
7.56
7.60
8.87
8.67
8.59
8.37
8.42
8.08
8.21
7.86
8.15
7.78
8.12
7.77
8.10
7.73
8.19
7.81
8.15
7.77
8.16
7.84
6.75
6.87
7.01
7.07
7.59
7.73
7.91
7.85
9.11
9.09
9.08
9.16
8.83
8.78
8.75
8.85
8.62
8.60
8.45
8.67
8.44
8.39
8.21
8.42
8.65
8.32
8.12
8.39
8.43
8.27
8.09
8.25
8.55
8.26
8.04
8.34
8.67
8.35
8.16
8.40
8.72
8.37
8.15
8.48
8.72
8.33
8.16
8.39
5.78
6.03
6.33
6.67
6.91
7.13
8.11
8.03
7.92
7.75
7.74
7.65
7.64
7.62
7.45
7.69
7.49
7.25
7.63
7.42
7.21
7.63
7.43
7.21
7.61
7.35
7.22
7.65
7.40
7.22
7.60
7.42
7.15
7.68
7.56
7.27
5.82
6.05
6.33
6.68
6.92
7.17
8.12
8.04
7.91
7.72
7.74
7.61
7.63
7.61
7.35
7.65
7.46
7.17
7.64
7.45
7.14
7.63
7.45
n.a.
7.55
7.30
n.a.
7.60
7.41
n.a.
7.62
7.43
7.14
7.77
7.64
n.a.
6.77
7.42
7.68
7.94
8.23
8.39
n.a.
8.59
7.65
8.10
8.26
8.47
8.71
8.85
n.a.
8.96
8.53
8.57
8.55
8.50
8.52
8.49
n.a.
8.45
8.22
8.28
8.26
8.17
8.23
8.19
n.a.
8.15
7.99
7.98
8.02
7.97
8.03
8.01
n.a.
8.00
7.77
7.80
7.80
7.81
7.86
7.87
n.a.
7.90
7.72
7.78
7.77
7.75
7.85
7.84
n.a.
7.90
7.73
7.76
7.76
7.77
7.83
7.85
n.a.
7.91
7.73
7.77
7.77
7.74
7.83
7.84
n.a.
7.90
7.73
7.78
7.74
7.72
7.83
7.82
n.a.
7.88
7.66
7.71
7.72
7.69
7.81
7.78
n.a.
7.85
7.80
7.89
7.90
7.88
7.99
7.93
n.a.
7.98
8.64
8.98
8.58
8.31
8.15
8.03
8.02
8.03
8.02
8.00
7.97
8.12
7.14
8.17
7.63
7.36
7.83
7.68
7.00
7.40
7.23
6.97
7.26
7.26
6.93
7.33
7.22
6.77
7.16
7.14
6.72
7.03
6.98
6.67
7.00
7.04
6.61
6.83
7.00
6.73
7.10
6.99
6.76
7.10
6.96
6.76
7.10
6.97
9.91
9.38
9.68
9.99
10.58
10.18
9.71
9.94
10.24
10.83
9.66
9.26
9.46
9.74
10.18
9.41
9.01
9.23
9.51
9.91
9.34
8.92
9.19
9.44
9.81
9.32
8.89
9.14
9.42
9.81
9.30
8.86
9.11
9.39
9.82
9.31
8.88
9.14
9.40
9.83
9.30
8.86
9.11
9.40
9.81
9.29
8.85
9.12
9.38
9.81
9.28
8.85
9.08
9.36
9.82
9.32
8.88
9.14
9.41
9.85
9.96
10.20
9.79
9.55
9.39
9.28
9.36
9.26
9.29
9.33
9.40
9.54
8.37
3.08
9.23
3.64
9.05
3.45
8.82
3.29
8.85
3.29
8.73
3.39
8.75
3.33
8.67
3.37
8.69
3.33
8.68
3.29
8.75
3.39
8.75
3.31
CAPITAL MARKET RATES
21
22
23
24
25
26
11
28
29
30
31
32
33
34
35
36
3/
38
U.S. Treasury notes and bonds"
Constant maturities 12
1-year
2-year
3-year
5-year
7-year
10-year
20-year
30-year
Composite 13
Over 10 years (long-term)
State and local notes and bonds
Moody's series 14
Aaa
Baa
Bond Buyer series 15
Corporate bonds
Seasoned issues 16
All industries
Aaa
Aa
A
Baa
A-rated, recently offered utility
bonds
MEMO: Dividend/price ratio 18
39
Preferred stocks
Common stocks
40
1. Weekly, monthly and annual 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 averages for statement week ending Wednesday.
3. Rate for the Federal Reserve Bank of New York.
4. 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).
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.
5. Yields are quoted on a bank-discount basis, rather than in an investment
yield basis (which would give a higher figure).
6. 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).
7. Unweighted average of offered rates quoted by at least five dealers early in
the day.
8. Calendar week average. For indication purposes only.
9. Unweighted average of closing bid rates quoted by at least five dealers.
10. Rates are recorded in the week in which bills are issued. Beginning with the
Treasury bill auction held on Apr. 18, 1983, bidders were required to state the
percentage yield (on a bank discount basis) that they would accept to two decimal
places. Thus, average issuing rates in bill auctions will be reported using two
rather than three decimal places.
11. Yields are based on closing bid prices quoted by at least five dealers.
12. 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.
13. Averages (to maturity or call) for all outstanding bonds neither due nor
callable in less than 10 years, including one very low yielding "flower" bond.
14. General obligations based on Thursday figures; Moody's Investors Service.
15. General obligations only, with 20 years to maturity, issued by 20 state and
local governmental units of mixed quality. Based on figures for Thursday.
16. Daily figures from Moody's Investors Service. Based on yields to maturity
on selected long-term bonds.
17. Compilation of the Federal Reserve. This series is an estimate of the yield
on recently-offered, A-rated utility bonds with a 30-year maturity and 5 years of
call protection. Weekly data are based on Friday quotations.
18. 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
transportation. Common stock ratios on the 500 stocks in the price index.
NOTE. These data also appear in the Board's H. 15 (519) and G. 13 (415) releases.
For address, see inside front cover.
Financial Markets
1.36 STOCK MARKET
A25
Selected Statistics
1989
Indicator
1987
1988
1990
1989
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Prices and trading (averages of daily 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
161.78
195.31
140.52
74.29
146.48
149.97
180.83
134.09
72.22
127.41
180.13
228.04
174.90
94.33
162.01
175.30
211.81
169.05
84.21
146.82
180.76
216.75
173.47
87.95
154.08
185.15
221.74
179.32
90.40
157.78
192.93
231.32
197.53
92.90
164.86
193.02
230.86
202.02
93.44
165.51
192.49
229.40
190.36
94.67
166.55
188.50
224.38
174.26
94.95
160.89
192.67
230.12
177.25
99.73
155.63
187.96
225.79
173.67
95.69
150.11
287.00
265.88
323.05
313.93
323.73
331.92
346.61
347.33
347.40
340.22
348.57
339.97
7 American Stock Exchange
(Aug. 31, 1973 = 50?
316.78
295.08
356.67
349.50
362.73
368.52
379.28
382.75
383.63
371.92
373.87
367.40
188,922
13,832
161,386
9,955
165,568
13,124
171,495
11,699
180,680
13,519
162,501
11,702
171,683
14,538
151,752
12,631
Volume of trading (thousands of shares)
8 New York Stock Exchange
9 American Stock Exchange
182,394 144,389 160,671
13,853'" 12,001' 13,298'
172,420
14,831
Customer financing (end-of-period balances, in millions of dollars)
10 Margin credit at broker-dealers 3
31,990
32,740
34,320
33,140
34,730
34,360
33,940
35,020
35,110
34,630
34,320
32,640
Free credit balances at brokers4
11 Margin-account
12 Cash-account
4,750
15,640
5,660
16,595
7,040
18,505
5,250
15,965
6,900
19,080
5,420
16,345
5,580
16,015
5,680
15,310
6,000
16,340
5,815
16,345
7,040
18,505
6,755
17,370
Margin requirements (percent of market value and effective date) 6
13 Margin stocks
14 Convertible bonds
15 Short sales
Mar. 11, 1968
June 8, 1968
May 6, 1970
Dec. 6, 1971
Nov. 24, 1972
Jan. 3, 1974
70
50
70
80
60
80
65
50
65
55
50
55
65
50
65
50
50
50
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. Beginning July 5, 1983, the American Stock Exchange rebased its index
effectively cutting previous readings in half.
3. Beginning July 1983, under the revised Regulation T, margin credit at
broker-dealers includes credit extended against stocks, convertible bonds, stocks
acquired through exercise of subscription rights, corporate bonds, and government securities. Separate reporting of data for margin stocks, convertible bonds,
and subscription issues was discontinued in April 1984.
4. Free credit balances are in accounts with no unfulfilled commitments to the
brokers and are subject to withdrawal by customers on demand.
5. New series beginning June 1984.
6. These regulations, adopted by the Board of Governors pursuant to the
Securities Exchange Act of 1934, limit the amount of credit to purchase and
carry "margin securities" (as defined in the regulations) when such credit is
collateralized by securities. Margin requirements on securities other than options
are the difference between the market value (100 percent) and the maximum loan
value of collateral as prescribed by the Board. Regulation T was adopted effective
Oct. 15, 1934; Regulation U, effective May 1, 1936; Regulation G, effective Mar.
11, 1968; and Regulation X, effective Nov. 1, 1971.
On Jan. 1, 1977, the Board of Governors for the first time established in
Regulation T the initial margin required for writing options on securities, setting
it at 30 percent of the current market-value of the stock underlying the option. On
Sept. 30, 1985, the Board changed the required initial margin, allowing it to be the
same as the option maintenance margin required by the appropriate exchange or
self-regulatory organization; such maintenance margin rules must be approved by
the Securities and Exchange Commission. Effective Jan. 31, 1986, the SEC
approved new maintenance margin rules, permitting margins to be the price of the
option plus 15 percent of the market value of the stock underlying the option.
A26
DomesticNonfinancialStatistics • April 1990
1.37 SELECTED FINANCIAL INSTITUTIONS
Selected Assets and Liabilities
Millions of dollars, end of period
1989
Account
1987
1988
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
SAIF-insured institutions
1 Assets
2 Mortgages
3 Mortgage-backed
securities
4 Contra-assets to
mortgage assets 1 .
5 Commercial loans
6 Consumer loans
7
Contra-assets to nonmortgage loans .
8 Cash and investment
securities
9 Other 3
1,340,502
1,345,347
1,346,564
721,593
764,513
767,603
769,398
773,386
774,358
772,720
771,716'
770,117'
764,699'
757,718'
753,993
201,828
214,587
213,090
215,203
216,129
216,256
211,325
204,364'
195,308'
188,436'
181,627'
176,541
42,344
23,163
57,902
37,950
33,889
61,922
37,013
32,955
61,981
37,842
32,866
61,402
37,791
32,812
61,710
37,504
33,009
61,869
37,540
33,073
60,769
37,172'
33,198'
61,098'
36,763'
33,026'
60,978'
36,292'
32,925'
60,423'
34,925'
32,562'
59,793'
33,990
32,334
59,4%
1,250,855
Savings capital
Borrowed money
FHLBB
Other
Other
Net worth
1,338,576 1,331,940' 1 , 3 1 8 , l l ? 1,301,059' 1,288,722' 1,279,067
3,467
3,056
2,923
3,074
2,899
2,918
3,192
3,203'
3,167'
3,12C
3,106'
3,202
169,717
122,462
186,986
129,610
177,178
126,243
177,094
125,455
175,841
126,065
174,333
127,161
175,222
126,200
175,135'
126,803'
171,565'
127,055'
169,582'
124,415'
172,612'
122,440'
172,333
121,561
1,350,500 1,339,115
1,340,502
1,345,347
1,346,564
957,358
305,675
140,089
165,586
31,749
58,962
956,663
312,988
146,007
166,981
29,593
57,113
954,495
318,671
148,000
170,671
31,629
56,068
955,566
318,367
146,520
171,847
33,585
54,5%
10 Liabilities and net worth . 1,250,855
11
12
13
14
15
16
1,350,500 1,339,115
932,616
249,917
116,363
133,554
21,941
46,382
971,700
299,400
134,168
165,232
24,216
55,185
1,338,576 1,331,94c 1,318,118' 1,301,059' 1,288,722' 1,279,067
960,073
312,093
144,217
167,876
29,892
52,741
963,158
301,572'
141,875
159,697'
31,881'
50,907'
960,344
289,634'
138,331
151,303'
33,807
49,93C
958,911'
281,474
133,633
147,841
29,899'
46,685'
948,512'
275,977'
130,514
145,463'
30.96C
48,345'
946,668
268,462
127,671
140,791
31,991
47,177
SAIF-insured federal savings banks
17 Assets
284,270
425,983
432,675
443,167
455,143
469,939
495,739
507,020
504,187
501,128
502,589
18 Mortgages
19 Mortgage-backed
securities
20 Contra-assets to
mortgage assets 1 .
21 Commercial loans
22 Consumer loans
23
Contra-assets to nonmortgage loans 2 .
24 Finance leases plus
interest
25 Cash and investment . . .
26 Other
161,926
227,869
238,415
241,076
249,940
257,187
276,613
285,072
285,503
283,188
283,674
45,826
64,957
65,896
68,086
69,964
73,%3
73,943
74,341
72,082
72,438
72,318
9,100
6,504
17,696
13,140
16,731
24,222
12,685
16,320
25,977
12,8%
16,313
26,0%
13,049
16,497
26,768
13,227
16,934
27,957
13,662
18,014
28,157
13,972
18,279
28,9%
13,859
18,169
28,985
13,821
18,195
28,766
13,492
18,301
28,326
678
889
857
977
863
888
976
980
987
1,029
1,051
591
35,347
24,069
880
61,029
35,428
946
57,986
34,664
1,011
60,272
34,964
1,047
61,278
37,333
1,072
62,002
38,021
1,083
65,778
39,644
1,088
66,068
40,340
1,075
65,109
40,534
1,092
64,232
40,680
1,087
65,277
40,756
27 Liabilities and net worth .
284,270
425,983
432,675
443,167
455,143
469,939
495,739
507,020
504,187
501,128
502,589
28
29
30
31
32
33
203,196
60,716
29,617
31,099
5,324
15,034
298,197
99,286
46,265
53,021
8,075
20,235
301,770
102,902
48,951
53,951
8,884
22,700
307,580
107,179
51,532
55,647
8,649
23,090
315,725
110,004
53,519
56,485
9,306
23,404
324,369
114,854
55,463
59,391
10,174
23,926
342,145
121,895
58,505
63,390
9,825
25,677
352,547
121,195
59,781
61,414
10,697
26,266
352,099
117,970
59,189
58,781
11,443
26,369
353,461
115,628
57,941
57,687
9,904
26,134
355,903
114,232
57,793
56,439
10,298
26,126
Savings capital
Borrowed money
FHLBB
Other
Other
Net worth
n.a.
Financial Markets
A27
1.37—Continued
1989
Account
1987
1988
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Credit unions 4
34 Total assets/liabilities
and capital
174,593
176,270
178,175
177,417
178,812
180,664
179,029
180,035
181,812
181,527
182,856
35
36
114,566
60,027
115,543
60,727
117,555
60,620
115,416
62,001
116,705
62,107
117,632
63,032
117,475
61,554
117,463
62,572
118,746
63,066
118,887
62,640
119,682
63,174
113,191
73,766
39,425
159,010
104,431
54,579
113,880
73,917
39,963
161,073
105,262
55,811
114,572
74,395
40,177
164,322
107,368
56,954
115,249
75,003
40,246
161,388
105,208
56,180
116,947
76,052
40,895
162,134
105,787
56,347
119,101
77,729
41,372
164,415
106,984
57,431
119,720
78,472
41,248
162,405
106,266
56,139
120,577
78,946
41,631
162,754
106,038
56,716
122,522
80,548
41,874
164,050
106,633
57,417
122,997
80,570
42,427
164,695
107,588
57,107
122,899
80,601
42,298
165,533
108,319
57,214
Federal
State
37 Loans outstanding
Federal
38
39
State
40 Savings
Federal
41
42
State
n.a.
1
I
t
Life insurance companies
43 Assets
44
45
46
47
48
49
50
51
52
53
54
Securities
Government..
United States 5
State and local
Foreign 6
Business
Bonds
Stocks
Mortgages
Real estate
Policy loans
Other assets
1,044,459
1,157,140
1,186,208
1,199,125
1,209,242
1,221,332
1,232,195
1,247,341
1,257,045
1,266,773
1,276,181
84,426
57,078
10,681
16,667
n.a.
472,684
n.a.
203,545
34,172
53,626
89,586
84,051
58,564
9,136
16,351
n.a/
556,043
n.a/
232,863
37,371
54,236
93,358
84,190
58,509
8,817
16,864
678,541
571,365
107,176
233,556
37,603
54,738
97,580
84,485
58,417
8,860
17,208
687,777
579,232
108,545
234,632
37,842
54,921
99,468
82,873
57,127
8,911
16,835
697,703
587,889
109,814
235,312
37,976
55,201
100,173
83,847
57,790
8,953
17,104
706,960
595,500
111,460
236,651
38,598
55,525
99,751
84,564
57,817
9,036
17,711
714,398
601,786
112,612
237,444
38,190
55,746
101,853
84,438
57,698
9,061
17,679
726,599
606,686
119,913
237,865
38,622
55,812
104,005
83,225
56,978
9,002
17,245
735,441
614,585
120,856
238,944
38,822
56,077
104,536
82,867
56,684
9,037
17,146
742,537
621,856
120,681
240,189
38,942
56,403
105,835
83,727
57,726
9,019
16,982
748,075
628,695
119,380
242,391
39,343
56,727
105,918
1. Contra-assets are credit-balance accounts that must be subtracted from the
corresponding gross asset categories to yield net asset levels. Contra-assets to
mortgage loans, contracts, and pass-through securities include loans in process,
unearned discounts and deferred loan fees, valuation allowances for mortgages
"held for sale," and specific reserves and other valuation allowances.
2. Contra-assets are credit-balance accounts that must be subtracted from the
corresponding gross asset categories to yield net asset levels. Contra-assets to
nonmortgage loans include loans in process, unearned discounts and deferred loan
fees, and specific reserves and valuation allowances.
3. Holding of stock in Federal Home Loan Bank and Finance leases plus
interest are included in "Other" (line 9).
4. Data include all federally insured credit unions, both federal and state
chartered, serving natural persons.
5. Direct and guaranteed obligations. Excludes federal agency issues not
guaranteed, which are shown in the table under "Business" securities.
6. Issues of foreign governments and their subdivisions and bonds of the
International Bank for Reconstruction and Development.
n.a.
NOTE. FSLIC-insured institutions: Estimates by the FHLBB for all institutions
insured by the FSLIC and based on the FHLBB thrift Financial Report.
FSLIC-insured federal savings banks: Estimates by the FHLBB for federal
savings banks insured by the FSLIC and based on the FHLBB thrift Financial
Report.
Savings banks: Estimates by the National Council of Savings Institutions for all
savings banks in the United States and for FDIC-insured savings banks that have
converted to federal savings banks.
Credit unions: Estimates by the National Credit Union Administration for
federally chartered and federally insured state-chartered credit unions serving
natural persons.
Life insurance companies: Estimates of the American Council of Life Insurance
for all life insurance companies in the United States. Annual figures are annualstatement asset values, with bonds carried on an amortized basis and stocks at
year-end market value. Adjustments for interest due and accrued and for
differences between market and book values are not made on each item separately
but are included, in total, in "other assets."
As of June 1989 Savings bank data are no longer available.
A28
D o m e s t i c F i n a n c i a l Statistics •
April 1990
1.38 FEDERAL FISCAL AND FINANCING OPERATIONS
Millions of dollars
Calendar year
Type of account or operation
U.S. budget1
1 Receipts, total
2
On-budget
3 Off-budget
4 Outlays, total
5 On-budget
6 Off-budget
7 Surplus, or deficit ( - ) , total
8 On-budget
9
Off-budget
10
11
12
Source of financing (total)
Borrowing from the public
Operating cash (decrease, or increase
(-)),2
Other
Fiscal
year
1987
Fiscal
year
1988r
Fiscal
year
1989
1989
1990
Aug.
Sept.
Oct.
Nov.
Dec.
76,161
57,156
19,004
98,310
79,218
19,092
-22,150
-22,062
-88
99,233
75,711
23,522
105,299
86,548
18,750
-6,066
-10,837
4,771
68,426
50,122
18,304
94,515
75,096
19,419
-26,089
-24,974
-1,115
71,213
51,989
19,223
100,172
80,794
19,378
-28,959
-28,804
-155
89,130
69,052
20,077
103,770
91,249
12,522
-14,641
-22,196
7,556
Jan.
854,143
640,741
213,402
1,003,804
809,972
193,832
-149,661
-169,231
19,570
908,166
666,675
241,491
1,063,318
860,626
202,691
-155,151
-193,951
38,800
990,789
727,123
263,666
1,142,777
931,556
211,221
-151,988
-204,433
52,445
99,542
74,247
25,295
89,622
71,082
18,540
9,920
3,165
6,755
151,717
166,139
140,156
35,854
6,618
36,690
19,790
6,821
15,841
-5,052
2,996
-7,963
-3,025
3,425
8,407
-3,235
-10,469
-15,589
14,977
-2,513
-8,088
21,772
-12,603
-5,221
13,040
-18,116
-7,644
36,436
9,120
27,316
44,398
13,024
31,375
40,973
13,452
27,521
25,384
6,652
18,732
40,973
13,452
27,521
43,486
13,124
30,362
21,715
5,501
16,214
26,935
6,217
20,718
45,051
13,153
31,899
MEMO
13 Treasury operating balance (level, end of
period)
14 Federal Reserve Banks
15 Tax and loan accounts
1. In accordance with the Balanced Budget and Emergency Deficit Control Act
of 1985, all former off-budget entries are now presented on-budget. The Federal
Financing Bank (FFB) activities are now shown as separate accounts under the
agencies that use the FFB to finance their programs. The act has also moved two
social security trust funds (Federal old-age survivors insurance and Federal
disability insurance trust funds) off-budget.
2. Includes SDRs; reserve position on the U.S. quota in the IMF; loans to
international monetary fund; other cash and monetary assets; accrued interest
payable to the public; allocations of special drawing rights; deposit funds;
miscellaneous liability (including checks outstanding) and asset accounts;
seigniorage; 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 and the Budget of the U.S. Government.
Federal Finance
A29
1.39 U.S. BUDGET RECEIPTS AND OUTLAYS 1
Millions of dollars
Calendar year
Source or type
Fiscal
year
1988
Fiscal
year
1989
1988
1990
1989
HI
H2
HI
H2
Nov.
Dec.
Jan.
RECEIPTS
1 All sources
2 Individual income taxes, net
3 Withheld
4
Presidential Election Campaign Fund
5 Nonwithheld
6
Refunds
Corporation income taxes
7 Gross receipts
8
Refunds
9 Social insurance taxes and contributions,
net
10 Employment taxes and
contributions 2
Self-employment taxes and
11
contributions
12 Unemployment insurance
13 Other net receipts
14
15
16
17
Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts
908,166
990,789
475,724
449,394
527,574
470,354
71,213
89,130
99,542
401,181
341,435
33
132,199
72,487
445,690
361,386
32
154,839
70,567
207,659
169,300
28
101,614
63,283
200,300
179,600
4
29,880
9,186
233,572
174,230
28
121,563
62,251
218,661
193,2%
3
33,303
7,943
34,448
34,439
0
1,459
1,450
37,385
35,443
0
2,717
775
56,044
34,172
0
22,389
517
109,683
15,487
117,015
13,723
58,002
8,706
56,409
7,250
61,585
7,259
52,269
6,842
3,381
996
19,731
853
4,277
1,159
334,335
359,416
181,058
157,603
200,127
162,574
26,791
25,805
32,863
305,093
332,859
164,412
144,983
184,569
152,407
24,303
25,266
31,767
17,691
24,584
4,659
18,405
22,011
4,547
14,839
14,363
2,284
3,032
10,359
2,262
16,371
13,279
2,277
1,947
7,909
2,260
140
2,088
401
0
161
377
1,213
742
354
35,540
15,411
7,594
19,909
34,386
16,334
8,745
22,927
16,440
7,522
3,863
9,950
19,299
8,107
4,054
10,873
16,814
7,918
4,583
10,235
16,844
8,667
4,451
13,728
2,939
1,421
693
2,535
2,763
1,293
850
2,156
2,624
1,440
805
2,648
1,063,318
1,142,777
512,856
552,801
565,524
586,4%
100,172
103,770
89,622
290,361
10,471
10,841
2,297
14,625
17,210
303,551
9,596
12,891
3,745
16,084
16,948
143,080
7,150
5,361
555
6,776
7,872
150,496
2,636
5,852
1,966
9,144
6,911
148,098
6,605
6,238
2,221
7,022
9,619
149,613
5,981
7,091
564
9,209
4,132
25,234
495
1,155
-170
2,064
1,967
28,570
1,306
1,202
160
1,319
1,097
21,978
1,248
1,058
-460
1,133
1,113
5,951
12,700
2,765
19,836
14,922
2,690
4,129
13,035
1,833
22,200
14,982
4,879
2,030
2,584
1,100
1,107
2,515
841
-2,286
2,409
848
OUTLAYS
18 All types
19
20
21
22
23
24
National defense
International affairs
General science, space, and technology
Energy
Natural resources and environment
Agriculture
25
26
27
28
Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, and
social services
18,828
27,272
5,294
27,81<y
27,623
5,755
31,938
35,697
15,451
16,152
18,083
18,663
3,194
3,151
3,4%
29 Health
30 Social security and medicare
31 Income security
44,490
297,828
129,332
48,391
317,506
136,765
22,643
135,322
65,555
23,360
149,017
64,978
24,078
162,195
70,937
25,339
162,322
67,950
4,136
27,337
11,456
4,435
27,166
13,217
4,663
28,228
12,010
32
33
34
35
36
37
29,406
8,436
9,518
1,816
151,748
-36,967
30,066
9,396
8,940
n.a.
169,314
-37,212
13,241
4,379
4,337
448
76,098
-17,766
15,797
4,351
5,137
0
78,317
-18,771
14,891
4,801
3,858
0
86,009
-18,131
14,864
4,963
4,753
n.a.
87,927
-18,935
2,627
771
1,437
n.a.
15,526
-2,771
3,664
%8
745
n.a.
14,579
-2,271
1,086
811
972
n.a.
14,281
-2,967
Veterans benefits and services
Administration of justice
General government
General-purpose fiscal assistance
Net interest
Undistributed offsetting receipts
1. Functional details do not add to total outlays for calendar year data because
revisions to monthly totals have not been distributed among functions. Fiscal year
total for outlays does not correspond to calendar year data because revisions from
the Budget have not been fully distributed across months.
2. Old-age, disability, and hospital insurance, and railroad retirement accounts.
3. Old-age, disability, and hospital insurance.
4. Federal employee retirement contributions and civil service retirement and
disability fund.
5. Deposits of earnings by Federal Reserve Banks and other miscellaneous
receipts.
6. Net interest function includes interest received by trust funds.
7. Consists of rents and royalties on the outer continental shelf and U.S.
government contributions for employee retirement.
SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of
Receipts and Outlays of the U.S. Government, and the U.S. Office of Management and Budget, Budget of the U.S. Government, Fiscal Year 1990.
A30
DomesticNonfinancialStatistics • April 1990
1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
B i l l i o n s o f dollars
1987
1989
1988
Item
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
1 Federal debt outstanding
2,435.2
2,493.2
2,555.1
2,614.6
2,707.3
2,763.6
2,824.0
2,881.1
2,975.5
2 Public debt securities
3
Held by public
4
Held by agencies
2,431.7
1,954.1
477.6
2,487.6
1,996.7
490.8
2,547.7
2,013.4
534.2
2,602.2
2,051.7
550.4
2,684.4
2,095.2
589.2
2,740.9
2,133.4
607.5
2,799.9
2,142.1
657.8
2,857.4
2,180.7
676.7
2,953.0
n.a.
n.a.
3.5
2.7
.8
5.6
5.1
.6
7.4
7.0
.5
12.4
12.2
.2
22.9
22.6
.3
22.7
22.3
.4
24.0
23.6
.5
23.7
23.5
.1
2,417.4
2,472.6
2,532.2
2,586.9
2,669.1
2,725.6
2,784.6
2,829.8
2,921.7
2,725.5
.2
2,784.3
.2
2,829.5
.3
2,921.4
.3
2,800.0
2,800.0
2,870.0
3,122.7
5 Agency securities
6
Held by public
7
Held by agencies
8 Debt subject to statutory limit
9 Public debt securities
10 Other debt 1
2,416.3
1.1
2,472.1
.5
2,532.1
.1
2,586.7
.1
2,668.9
.2
11 MEMO: Statutory debt limit
2,800.0
2,800.0
2,800.0
2,800.0
2,800.0
1. Includes guaranteed debt of Treasury and other federal agencies, specified
participation certificates, notes to international lending organizations, and District
of Columbia stadium bonds.
1.41 GROSS PUBLIC DEBT OF U.S. TREASURY
SOURCES. Treasury Bulletin and Monthly
United States.
Statement
n.a.
n.a.
n.a.
of the Public Debt of the
Types and Ownership
Billions of dollars, end of period
1987
Type and holder
1 Total gross public debt
2
3
4
5
6
7
8
9
10
11
12
13
By type
Interest-bearing debt
Marketable
Bills
Notes
Bonds
Nonmarketable 1
State and local government series
Foreign issues
Government
Public
Savings bonds and n o t e s . . ^
Government account series
14 Non-interest-bearing debt
15
16
17
18
19
20
21
22
23
24
25
26
By holder4
U.S. government agencies and trust funds
Federal Reserve Banks
Private investors
Commercial banks
Money market funds
Insurance companies
Other companies
State and local Treasurys
Individuals
Savings bonds
Other securities
Foreign and international 5
Other miscellaneous investors
Qi
Q2
Q3
Q4
2,214.8
2,431.7
2,684.4
2,953.0
2,740.9
2,799.9
2,857.4
2,953.0
2,212.0
1,619.0
426.7
927.5
249.8
593.1
110.5
4.7
4.7
.0
90.6
386.9
2,428.9
1,724.7
389.5
1,037.9
282.5
704.2
139.3
4.0
4.0
.0
99.2
461.3
2,663.1
1,821.3
414.0
1,083.6
308.9
841.8
151.5
6.6
6.6
.0
107.6
575.6
2,931.8
1.945.4
430.6
1.151.5
348.2
986.4
163.3
6.8
6.8
115.7
695.6
2,738.3
1,871.7
417.0
1,121.4
318.4
866.6
154.4
6.7
6.7
.0
110.4
594.7
2,797.4
1,877.3
397.1
1,137.2
328.0
920.1
156.0
6.2
6.2
.0
112.3
645.2
2,836.3
1,892.8
406.6
1,133.2
338.0
943.5
158.6
6.8
6.8
.0
114.0
663.7
2,931.8
1,945.4
430.6
1,151.5
348.2
986.4
163.3
6.8
6.8
.0
115.7
695.6
2.8
2.8
21.3
21.2
2.6
2.5
21.1
21.2
403.1
211.3
1,602.0
203.5
28.0
105.6
68.8
262.8
477.6
222.6
1,745.2
201.5
14.6
104.9
84.6
284.6
589.2
238.4
1,852.8
193.8
111.2
86.5
313.6
607.5
228.6
1,900.2
200.9
13.0
112.5
89.2
320.4
657.8
231.8
1,905.4
206.7
11.6
n.a.
90.7
322.1
676.7
220.6
1,954.6
n.a.
12.4
n.a.
n.a.
n.a.
92.3
70.4
263.4
506.6
101.1
70.2
299.7
584.0
109.6
77.0
362.1
587.2
112.2
82.9
375.6
593.5
114.0
89.1
367.9
n.a.
115.7
n.a.
393.5
n.a.
1. Includes (not shown separately): Securities issued to the Rural Electrification Administration; depository bonds, retirement plan bonds, and individual
retirement bonds.
2. Nonmarketable dollar-denominated and foreign currency-denominated series held by foreigners.
3. Held almost entirely by U.S. Treasury agencies and trust funds.
4. Data for Federal Reserve Banks and U.S. Treasury agencies and trust funds
are actual holdings; data for other groups are Treasury estimates.
1989
18.8
.0
n.a.
5. Consists of investments of foreign and international accounts. Excludes
non-interest-bearing notes issued to the International Monetary Fund.
6. Includes savings and loan associations, nonprofit institutions, credit unions,
mutual savings banks, corporate pension trust funds, dealers and brokers, certain
U.S. Treasury deposit accounts, and federally-sponsored agencies.
SOURCES. Data by type of security, U.S. Treasury Department, Monthly
Statement of the Public Debt of the United States; data by holder and the
Treasury Bulletin.
Federal Finance
A31
Transactions1
1.42 U.S. GOVERNMENT SECURITIES DEALERS
Par value; averages of daily figures, in millions of dollars
1989
Item
1
7
3
4
6
7
8
9
10
11
12
13
14
15
16
17
18
Immediate delivery 2
U.S. Treasury securities
By maturity
Bills
Other within 1 year
1-5 years
5-10 years
Over 10 years
By type of customer
U.S. government securities
dealers
U.S. government securities
brokers
All others 3
Federal agency securities
Certificates of deposit
Bankers acceptances
Commercial paper
Futures contracts
Treasury bills
Treasury coupons
Federal agency securities
Forward transactions
U.S. Treasury securities
Federal agency securities
1987
1988
1989
1990
Nov/
Dec/
Jan.
Dec. 27'
Jan. 3
Jan. 10
Jan. 17
Jan. 24
Jan. 31
110,050
101,623
112,715
115,662
84,153
118,584
72,702
72,473
102,219
128,457
123,690
133,945
37,924
3,271
27,918
24,014
16,923
29,387
3,426
27,777
24,939
16,093
30,733
3,182
33,662
28,679
16,458
32,611
2,811
38,423
26,189
15,628
26,756
2,559
25,884
18,240
10,714
32,817
3,438
32,925
31,345
18,059
24,356
2,193
22,219
14,336
9,597
23,913
3,764
20,322
15,805
8,669
26,939
3,382
27,628
29,015
15,255
41,663
3,283
34,180
32,612
16,718
30,796
2,568
36,446
33,252
20,628
35,767
4,216
37,091
34,744
22,126
2,936
2,761
3,287
3,498
2,545
3,141
2,952
1,998
2,765
3,138
3,149
3,890
61,539
45,575
18,084
4,112
2,965
17,135
59,844
39,019
15,903
3,369
2,316
22,927
66,417
43,011
18,623
2,798
2,222
31,805
66,532
45,632
20,012
2,184
1,998
31,188
45,753
35,854
17,939
1,597
1,635
32,267
71,886
43,557
19,950
2,283
1,843
37,311
38,310
31,439
13,428
1,052
1,226
31,735
39,910
30,565
12,136
1,487
1,854
37,538
60,945
38,509
22,046
2,083
1,960
36,227
77,400
47,918
24,078
2,667
2,079
40,660
76,535
44,006
18,123
2,476
1,744
35,886
81,668
48,387
18,496
2,142
1,550
35,765
3,233
8,963
5
2,627
9,695
1
2,525
9,603
8
1,898
9,313
7
2,523
5,836
3
2,684
12,345
14
1,788
6,769
2
1,014
6,353
0
1,940
9,451
7
4,274
11,507
32
2,784
12,746
24
2,464
16,908
4
2,029
9,290
2,095
8,008
2,126
9,484
2,009
10,894
1,821
9,520
1,786
11,594
1,672
5,710
817
7,432
2,207
15,040
1,022
13,816
2,770
10,104
1,358
8,710
1. Transactions are market purchases and sales of securities as reported to the
Federal Reserve Bank of New York by the U.S. government securities dealers on
its published list of primary dealers.
Averages for transactions are based on the number of trading days in the period.
The figures exclude allotments of, and exchanges for, new U.S. Treasury
securities, redemptions of called or matured securities, purchases or sales of
securities under repurchase agreement, reverse repurchase (resale), or similar
contracts.
2. Data for immediate transactions do not include forward transactions.
3. Includes, among others, all other dealers and brokers in commodities and
1990
1989'
securities, nondealer departments of commercial banks, foreign banking agencies,
and the Federal Reserve System.
4. Futures contracts are standardized agreements arranged on an organized
exchange in which parties commit to purchase or sell securities for delivery at a
future date.
5. Forward transactions are agreements arranged in the over-the-counter
market in which securities are purchased (sold) for delivery after 5 business days
from the date of the transaction for Treasury securities (Treasury bills, notes, and
bonds) or after 30 days for mortgage-backed agency issues.
A32
DomesticNonfinancialStatistics • April 1990
1.43 U.S. GOVERNMENT SECURITIES DEALERS
Averages of dailyfigures,in millions of dollars
Positions and Financing1
1989
Item
1987'
1988'
1990
1990
1989'
Nov.'
Dec.'
Jan.
Jan. 3
Jan. 10
Jan. 17
Jan. 24
Jan. 31
Positions
1
Net immediate 2
U.S. Treasury securities
-6,216
-22,765
-5,948
17,139
25,224
18,282
20,189
18,684
21,044
16,817
17,217
2
3
4
3
6
Bills
Other within 1 year
1-5 years
5—10 years
Over 10 years
4,317
1,557
649
-6,564
-6,174
2,238
-2,236
-3,020
-9,663
-10,084
7,831
-1,528
2,334
-8,133
-6,452
22,515
-1,276
10,532
-8,992
-5,640
26,823
-1,171
12,398
-7,230
-5,596
24,925
-836
13,976
-10,477
-9,305
22,282
-2,031
15,108
-8,682
-6,488
24,690
-877
14,012
-10,256
-8,884
25,198
-321
13,704
-8,744
-8,794
25,767
-476
12,142
-11,182
-9,435
25,234
-1,007
15,787
-11,953
-10,845
7
8
9
10
Federal agency securities
Certificates of deposit
Bankers acceptances
Commercial paper
Futures positions
Treasury bills
Treasury coupons
Federal agency securities
Forward positions
U.S. Treasury securities
Federal agency securities
31,911
8,188
3,660
7,496
28,230
7,300
2,486
6,152
31,914
6,674
2,089
8,243
35,453
7,003
1,925
7,650
35,928
6,884
1,736
8,152
35,551
5,972
1,703
7,663
32,315
5,896
1,533
7,599
35,441
5,874
1,542
7,067
39,301
5,985
1,925
7,509
37,300
6,063
1,781
7,611
33,184
5,993
1,692
8,286
-3,373
5,988
-95
-2,210
6,224
0
-4,599
-2,919
14
-9,455
-11,364
25
-10,135
-11,022
30
-9,896
-6,388
27
-6,730
-7,693
47
-6,365
-7,244
46
-9,387
-7,631
-7
-12,771
-6,405
23
-12,323
-4,241
31
-1,211
-18,817
346
-16,348
-546
-16,878
-109
-17,372
-145
-16,522
-2,094
-13,814
-2,405
-10,672
-1,226
-14,569
-1,688
-18,644
-3,273
-15,322
-2,194
-10,056
11
12
13
14
15
Financing 3
Reverse repurchase agreements 4
Overnight and continuing
Term
Repurchase agreements
18 Overnight and continuing
19 Term
16
17
126,709
148,288
136,327
177,477
157,955
225,126
153,134
242,219
143,024
219,169
150,660
216,646
141,007
195,588
143,920
214,139
150,622
209,934
154,459
223,620
159,429
231,526
170,763
121,270
172,695
137,056
219,083
179,555
227,653
218,441
233,258
179,487
240,341
179,484
231,227
151,466
233,091
174,758
242,684
176,502
247,370
189,192
243,687
194,294
1. Data for dealer positions and sources of financing are obtained from reports
submitted to the Federal Reserve Bank of New York by the U.S. Treasury
securities dealers on its published list of primary dealers.
Data for positions are averages of daily figures, in terms of par value, based on
the number of trading days in the period. Positions are net amounts and are shown
on a commitment basis. Data for financing are in terms of actual amounts
borrowed or lent and are based on Wednesday figures.
2. Immediate positions are net amounts (in 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 (RPs). The maturities of some
repurchase agreements are sufficiently long, however, to suggest that the securities involved are not available for trading purposes. Immediate positions include
reverses to maturity, which are securities that were sold after having been
obtained under reverse repurchase agreements that mature on the same day as the
securities. Data for immediate positions do not include forward positions.
3. Figures cover financing involving U.S. Treasury and federal agency securities, negotiable CDs, bankers acceptances, and commercial paper.
4. Includes all reverse repurchase agreements, including those that have been
arranged to make delivery on short sales and those for which the securities
obtained have been used as collateral on borrowings, that is, matched agreements.
5. Includes both repurchase agreements undertaken to finance positions and
"matched book" repurchase agreements.
NOTE. Data on positions for the period May 1 to Sept. 30, 1986, are partially
estimated.
Federal Finance
1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES
A33
Debt Outstanding
Millions of dollars, end of period
1989
Agency
1
1986
Federal and federally sponsored agencies
2 Federal agencies
3
Defense Department
4
Export-Import Bank 2,3
5
Federal Housing Administration
Government National Mortgage Association participation
6
certificates 5
Postal Service
7
8
Tennessee Valley Authority
United States Railway Association 6
9
12
13
14
15
16
17
18
Federally sponsored agencies 7
Federal Home Loan Banks
Federal Home Loan Mortgage Corporation
Federal National Mortgage Association
Farm Credit Banks
Student Loan Marketing Association
Financing Corporation
Farm Credit Financial Assistance Corporation
Resolution Funding Corporation
19
Federal Financing Bank debt 13
10
11
1988
1987
1989
Aug.
Sept.
Oct.
Nov.
Dec.
307,361
341,386
381,498
411,805
411,979
408,591
409,113
412,234
411,805
36,958
33
14,211
138
37,981
13
11,978
183
35,668
8
11,033
150
35,664
7
10,985
328
36,453
7
11,014
255
36,584
7
10,990
295
36,378
7
10,990
301
35,855
7
10,990
308
35,664
7
10,985
328
2,165
3,104
17,222
85
1,615
6,103
18,089
0
0
6,142
18,335
0
0
6,445
17,899
0
0
6,445
18,732
0
0
6,445
18,847
0
0
6,445
18,635
0
0
6,445
18,105
0
0
6,445
17,899
0
270,553
88,752
13,589
93,563
62,478
12,171
0
0
0
303,405
115,725
17,645
97,057
55,275
16,503
1,200
0
0
345,830
135,834
22,797
105,459
53,127
22,073
5,850
690
0
376,141
136,087
26,882
116,064
54,864
28,705
8,170
847
4,522
375,526
149,269
27,165
110,155
53,511
27,079
7,500
847
0
372,007
143,578
26,738
111,507
54,015
27,126
8,170
847
0
372,735
140,854
25,097
111,776
54,029
27,440
8,170
847
4,522
376,379
138,229
27,018
115,774
54,131
27,688
8,170
847
4,522
376.141
136,087
26,882
116,064
54,864
28,705
8,170
847
4,522
157,510
152,417
142,850
134,873
137,690
136,092
135,841
135,213
134,873
14,205
2,854
4,970
15,797
85
11,972
5,853
4,940
16,709
0
11,027
5,892
4,910
16,955
0
10,979
6,195
4,880
16,519
0
11,008
6,195
4,910
17,352
0
10,984
6,195
4,910
17,467
0
10,984
6,195
4,880
17,255
0
10,984
6,195
4,880
16,725
0
10,979
6,195
4,880
16,519
0
65,374
21,680
32,545
59,674
21,191
32,078
58,496
19,246
26,324
53,311
19,265
23,724
54,611
19,270
24,344
53,311
19,275
23,950
53,311
19,233
23,983
53,311
19,249
23,869
53,311
19,265
23,724
MEMO
Lending to federal and federally sponsored
70 Export-Import Bank
21 Postal Service
7.2 Student Loan Marketing Association
2 3 Tennessee Valley Authority
24 United States Railway Association
76
27
Other Lending14
Farmers Home Administration
Rural Electrification Administration
Other
agencies
1. Consists of mortgages assumed by the Defense Department between 1957
and 1963 under family housing and homeowners assistance programs.
2. Includes participation certificates reclassified as debt beginning Oct. 1,1976.
3. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter.
4. Consists of debentures issued in payment of Federal Housing Administration
insurance claims. Once issued, these securities may be sold privately on the
securities market.
5. Certificates of participation issued before fiscal 1969 by the Government
National Mortgage Association acting as trustee for the Farmers Home Administration; Department of Health, Education, and Welfare; Department of Housing
and Urban Development; Small Business Administration; and the Veterans
Administration.
6. Off-budget.
7. Includes outstanding noncontingent liabilities: notes, bonds, and deben1
tures. Some data are estimated.
8. Excludes borrowing by the Farm Credit Financial Assistance Corporation,
shown in line 17.
9. Before late 1981, the Association obtained financing through the Federal
Financing Bank (FFB). Borrowing excludes that obtained from the FFB, which is
shown on line 21.
10. The Financing Corporation, established in August 1987 to recapitalize the
Federal Savings and Loan Insurance Corporation, undertook its first borrowing in
October 1987.
11. The Farm Credit Financial Assistance Corporation (established in January
1988 to provide assistance to the Farm Credit System) undertook its first
borrowing in July 1988.
12. The Resolution Funding Corporation, established by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, undertook its first
borrowing in October 1989.
13. Includes FFB purchases of agency assets and guaranteed loans; the latter
contain loans guaranteed by numerous agencies with the guarantees of any
particular 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.
14. 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 of the table in order to avoid double counting.
A34
DomesticNonfinancialStatistics • April 1990
1.45 NEW SECURITY ISSUES
Tax-Exempt State and Local Governments
Millions of dollars
1989
Type of issue or issuer,
or use
1987
1 All issues, new and refunding 1
1990
1989
1988
June
July
Aug.
Sept.
Oct.
Nov.
Dec.'
Jan.
102,407
114,522
113,646r
13,775
8,735
9,824
10,818
9,075
9,564
13,636
5,876
Type of issue
2 General obligation
3 Revenue
30,589
71,818
30,312
84,210
35,774'
77,873'
4,960
8,815
3,789
4,946
2,199
7,625
3,500
7,318
3,273
5,802
3,328
6,237
2,158
11,478
2,231
3,645
Type of issuer
4 State
5 Special district and statutory authority
6 Municipalities, counties, and townships
10,102
65,460
26,845
8,830
74,409
31,193
l l ^
71,022'
30,805'
1,989
8,033
3,753
970
4,868
2,897
694
7,027
2,103
764
7,567
2,487
1,330
4,770
2,975
930
5,473
3,161
911
9,391
3,334
709
3,975
1,192
7 Issues for new capital, total
56,789
79,665
84,062'
10,078
6,816
6,612
7,470
7,266
7,777
10,195
5,578
Use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
9,524
3,677
7,912
11,106
7,474
18,020
15,021
6,825
8,4%
19,027
5,624
24,672
15,133'
6,870'
11,427'
16,703'
5,036'
28,894'
2,678
576
1,058
1,509
329
3,928
998
500
551
1,632
440
2,695
1,302
556
813
1,553
447
1,941
1,639
976
622
1,242
381
2,610
1,006
280
718
1,803
345
3,114
1,058
675
1,137
1,441
444
3,022
1,495
645
2,219
2,518
1,119
2,199
1,173
84
796
667
305
2,553
8
9
10
11
12
13
1. Par amounts of long-term issues based on date of sale.
2. Includes school districts beginning 1986.
1.46 NEW SECURITY ISSUES
SOURCES. Securities Data/Bond Buyer Municipal Data Base beginning 1986.
Public Securities Association for earlier data.
U.S. Corporations
Millions of dollars
1989
Type of issue or issuer,
or use
1987
1988
1989
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
1 AU issues1
392,339'
409,925'
231,206
21,571'
24,750'
18,030'
14,930'
14,629'
24,644'
20,522'
20,945
2 Bonds2
325,838'
352,124'
199,930
19,762'
21,922'
12,976'
12,895'
12,356'
20,964'
16,282'
17,000
Type of offering
3 Public, domestic
4 Private placement, domestic 3
5. Sold abroad
209,455'
92,070
24,308
201,246'
127,700
23,178
177,438
n.a.
22,492
17,856'
n.a.
1,906
19,014'
n.a.
2,908
11,556'
n.a.
1,420
12,079'
n.a.
816
11,156'
n.a.
1,200
19,856'
n.a.
1,108
14,208'
n.a.
2,074'
15,500
n.a.
1,500
61,266'
49,773'
11,974
23,004
7,340
172,474'
70,595'
62,070'
10,076'
19,318
5,951
184,114'
42,049
15,945
3,586
13,619
3,859
120,875
7,815'
2,162
150
385
122
9,128
3,502'
1,649
480
2,936
4
13,352'
2,850'
1,331
0
1,346'
300
7,149'
2,670'
1,090
423
705
358
7,649'
2,247'
1,393
30'
1,059'
308
7,320'
3,646'
1,830
906'
1,738
632
12,213'
3,435'
1,253'
312'
977'
812
9,493'
3,992
347
1,083
1,090
577
9,911
12 Stocks2
66,508
57,802
32,225
1,809
2,828
5,054
2,035
2,273
3,680
4,240
3,945
Type
13 Preferred
14 Common
15 Private placement 3
10,123
43,225
13,157
6,544
35,911
15,346
6,194
26,030
n.a.
306
1,503
n.a.
335
2,493
n.a.
920
4,134
n.a.
1,013
1,023
n.a.
519
1,754
n.a.
570
3,110
n.a.
160
4,080
n.a.
626
3,319
n.a.
13,880
12,888
2,439
4,322
1,458
31,521
7,608
8,449
1,535
1,898
515
37,798
5,081
4,428
532
2,297
471
19,250
299
115
39
192
280
884
630
512
0
125
25
1,536
593
438
0
25
29
3,%9
393
343
0
137
20
1,020
193
155
0
709
0
1,195
190
728
50
465
0
2,214
378
498
0
211
0
3,153
279
1,045
0
244
0
2,377
6
7
8
9
10
11
16
17
18
19
20
21
Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
1. Figures which represent gross proceeds of issues maturing in more than one
year, are principal amount or number of units multiplied by offering price.
Excludes secondary offerings, employee stock plans, investment companies other
than closed-end, intracorporate transactions, equities sold abroad, and Yankee
bonds. Stock data include ownership securities issued by limited partnerships.
2. Monthly data include only public offerings.
3. Data are not available on a monthly basis. Before 1987, annual totals include
underwritten issues only.
SOURCES. IDD Information Services, Inc., the Board of Governors of the
Federal Reserve System, and before 1989, the U.S. Securities and Exchange
Commission.
Securities
1.47 OPEN-END INVESTMENT COMPANIES
Market
and Corporate
Finance
A35
Net Sales and Asset Position
Millions of dollars
1989
Item
1988
1989
May
June
July
Aug.
Sept.
Oct.
Nov/
Dec.
INVESTMENT COMPANIES 1
1 Sales of own shares2
271,237
306,445
24,661
25,817
25,330
26,800
23,911
23,872
24,673
30,982
2 Redemptions of own shares 3
3 Net sales
267,451
3,786
272,165
34,280
22,483
2,178
22,562
3,255
20,053
5,277
22,262
4,538
21,499
2,412
21,702
2,170
19,573
5,100
24,967
6,015
4 Assets4
472,297
553,875
509,781
515,814
535,910
539,553
539,814
534,922
549,892
553,875
45,090
427,207
44,792
509,083
49,177
460,604
48,428
467,386
47,888
488,022
47,209
492,344
47,163
492,651
46,146
488,776
47,875
502,017
44,792
509,083
5 Cash position
6 Other
5
4. Market value at end of period, less current liabilities.
5. Also includes all U.S. government securities and other short-term debt
securities.
NOTE. Investment Company Institute data based on reports of members, which
comprise substantially all open-end investment companies registered with the
Securities and Exchange Commission. Data reflect newly formed companies after
their initial offering of securities.
SOURCE. Survey of Current Business (Department of Commerce).
1. Data on sales and redemptions exclude money market mutual funds but
include limited maturity municipal bond funds. Data on asset positions exclude
both money market mutual funds and limited maturity municipal bond 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
another in the same group.
1.48 CORPORATE PROFITS AND THEIR DISTRIBUTION
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1988
Account
1987
1988
1989
1989
QL
Q2
Q3
Q4
QL
Q2
Q3
Q4
2
3
4
5
6
1 Corporate profits with inventory valuation and
capital consumption adjustment
Profits before tax
Profits tax liability
Profits after tax
Dividends
Undistributed profits
298.7
266.7
124.7
142.0
98.7
43.3
328.6
306.8
137.9
168.9
110.4
58.5
298.2
287.3
129.0
158.2
122.1
36.2
318.1
288.8
129.0
159.9
105.7
54.2
325.3
305.3
138.4
166.9
108.6
58.3
330.9
314.4
141.2
173.2
112.2
61.1
340.2
318.8
143.2
175.6
115.2
60.4
316.3
318.0
144.4
173.6
118.5
55.1
307.8
296.0
134.9
161.1
120.9
40.2
295.2
275.0
122.6
152.4
123.3
29.1
n.a.
n.a.
n.a.
n.a.
125.6
n.a.
7 Inventory valuation
8 Capital consumption adjustment
-18.9
50.9
-25.0
46.8
n.a.
29.4
-20.7
49.9
-28.8
48.9
-30.4
46.9
-20.1
41.5
-38.3
36.6
-21.0
32.3
n.a.
26.5
n.a.
22.4
Source. Survey of Current Business (Department of Commerce).
1.50 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment A
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1988
Industry
1989
1989
1990
19901
Q2
Q3
Q4
Ql
Q2
Q3
Q41
Ql 1
430.17
475.18
505.49
427.54
435.61
442.11
459.47
470.86
484.93
485.45
503.46
Manufacturing
77.75
86.79
83.05
100.11
83.22
106.94
77.38
85.24
79.15
89.62
80.56
92.76
81.26
93.96
82.97
98.57
85.66
102.00
82.30
105.90
86.84
106.92
Nonmanufacturing
12.57
12.50
12.01
13.15
12.53
12.38
12.15
12.70
12.59
12.58
12.23
7.21
7.00
7.15
8.12
9.50
7.62
7.78
10.60
8.03
6.99
6.91
7.05
6.84
8.09
7.08
7.45
7.69
6.89
8.02
7.04
8.07
7.37
9.49
7.40
8.16
12.48
7.89
8.93
8.99
7.13
7.91
10.12
8.58
31.75
14.63
185.32
33.96
16.10
204.22
34.32
15.82
226.78
31.31
14.49
185.21
32.07
14.61
185.61
33.69
15.04
185.65
33.69
17.12
198.15
35.34
16.67
200.36
33.73
15.84
206.59
33.07
14.79
211.76
35.47
16.42
218.97
1
7
3
4
Transportation
5
6
7
1988
Air
Other
Public utilities
8
9
10
•Trade and services are no longer being reported separately. They are included
in Commercial and other, line 10.
1. Anticipated by business.
2. "Other" consists of construction; wholesale and retail trade; finance and
insurance; personal and business services; and communication.
SOURCE. Survey of Current Business (Department of Commerce).
A36
DomesticNonfinancialStatistics • April 1990
Assets and Liabilities1
1.51 DOMESTIC FINANCE COMPANIES
Billions of dollars, end of period
1988
Account
1985
1986
1989
1987
Q1
Q2
Q3
Q4
Q1
Q2
Q3
ASSETS
Accounts receivable, gross 2
Consumer
Business
Real estate
Total
111.9
157.5
28.0
297.4
134.7
173.4
32.6
340.6
141.1
207.4
39.5
388.1
141.5
219.7
41.4
402.6
144.4
224.0
42.5
410.9
146.3
223.3
43.1
412.7
146.2
236.5
43.5
426.2
140.2
243.1
45.4
428.7
144.9
250.5
47.4
442.8
147.2
248.8
48.9
444.9
Less:
5 Reserves for unearned income
6 Reserves for losses
39.2
4.9
41.5
5.8
45.3
6.8
46.8
6.8
46.3
6.8
48.4
7.1
50.0
7.3
50.9
7.4
52.1
7.5
53.7
7.8
7 Accounts receivable, net
8 All other
253.3
45.3
293.3
58.6
336.0
58.3
348.9
60.1
357.8
70.5
357.3
68.7
368.9
72.4
370.4
75.1
383.2
81.5
383.5
83.1
9 Total assets
298.6
351.9
394.2
409.1
428.3
426.0
441.3
445.5
464.6
466.6
10 Bank loans
11 Commercial paper
18.0
99.2
18.6
117.8
16.4
128.4
14.9
125.2
13.3
131.6
11.9
129.4
15.4
142.0
11.6
147.9
12.2
149.2
12.3
147.4
12
Other short-term
13
Long-term
14
Due to parent
15
Not elsewhere classified
16 All other liabilities
17 Capital, surplus, and undivided profits
12.7
94.4
n.a.
n.a.
41.5
32.8
17.5
117.5
n.a.
n.a.
44.1
36.4
28.0
137.1
n.a.
n.a.
52.8
31.5
n.a.
n.a.
49.0
132.4
56.1
31.5
n.a.
n.a.
51.4
139.8
58.7
33.5
n.a.
n.a.
51.5
139.3
58.9
34.9
n.a.
n.a.
50.6
137.9
59.8
35.6
n.a.
n.a.
56.8
134.5
58.1
36.6
n.a.
59.7
141.3
63.5
38.7
n.a.
60.4
146.1
60.4
40.0
298.6
351.9
394.2
409.1
428.3
426.0
441.3
445.5
464.6
466.6
1
2
3
4
LIABILITIES
18 Total liabilities and capital
1. Components may not add to totals because of rounding.
1.52 DOMESTIC FINANCE COMPANIES
2. Excludes pools of securitized assets.
Business Credit Outstanding and Net Change1
Millions of dollars, seasonally adjusted
Type
1 Total
2
3
4
5
6
7
8
9
10
11
12
13
Retail financing of installment sales
Automotive
Equipment
Pools of securitized assets 2
Wholesale
Automotive
Equipment
All other
Pools of securitized assets 2
Leasing
Automotive
Equipment
Pools of securitized assets 2
Loans on commercial accounts receivable and factored
commercial accounts receivable
All other business credit
1987
1989
July
Aug.
Sept.
Oct.
205,810
234,529
257,762
251,126
253,822
258,851
259,083
257,930
257,762
35,782
25,170
n.a.
36,548
28,298
n.a.
38,534
29,781
698
39,183
28,128
769
39,355
29,039
793
39,258
29,639
755
38,952
29,594
715
38,187
29,568
739
38,534
29,781
698
30,507
5,600
8,342
n.a.
33,300
5,983
9,341
n.a.
34,357
6,945
9,949
33,233
6,244
10,001
33,566
6,497
9,990
37,243
6,602
9,957
35,210
6,843
9,927
33,537
6,933
9,895
34,357
6,945
9,949
21,952
43,335
n.a.
24,673
57,455
n.a.
26,856
67,506
1,247
26,701
64,086
887
26,739
64,186
990
26,865
65,170
948
27,442
66,787
1,199
27,547
67,677
1,093
26,856
67,506
1,247
18,078
17,043
17,796
21,134
18,442
23,447
19,989
21,904
20,098
22,571
19,611
22,804
19,487
22,926
18,892
23,861
18,442
23,447
0
0
0
0
0
0
0
Net change (during period)
14 Total
15
16
17
18
19
20
21
22
23
24
25
26
Retail financing of installment sales
Automotive
Equipment
Pools of securitized assets 2
Wholesale
Automotive
Equipment
All other
Pools of securitized assets 2
Leasing
Automotive
Equipment
Pools of securitized assets 2
Loans on commercial accounts receivable and factored
commercial accounts receivable
All other business credit
33,750
22,662
21,789
1,803
2,697
5,029
232
-1,153
-168
9,767
2,058
n.a.
766
1,384
n.a.
1,988
1,483
-26
141
354
-38
172
911
24
-97
600
-38
-305
-45
-40
-765
-25
24
347
213
-41
7,497
252
1,309
n.a.
2,793
226
999
n.a.
1,057
962
609
0
-788
79
139
0
332
253
-11
0
3,677
104
-32
0
-2,033
242
-30
0
-1,673
90
-32
0
820
11
54
0
2,125
5,156
n.a.
2,721
9,962
n.a.
2,184
8,646
526
187
716
91
38
99
103
126
984
-42
577
1,618
251
105
890
-106
-691
-171
154
2,100
3,486
-282
4,091
646
3,719
687
235
109
667
-487
234
-124
122
-595
934
-450
-414
1. These data also appear in the Board's G.20 (422) release. For address, see
inside front cover.
2. Data on pools of securitized assets are not seasonally adjusted.
Real Estate
1.53
A37
MORTGAGE MARKETS
Millions of dollars; exceptions noted.
1989
Item
1987
1988
1990
1989
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Terms and yields in primary and secondary markets
PRIMARY MARKETS
1
2
3
4
5
6
Conventional mortgages on new homes
Terms1
Purchase price (thousands of dollars)
Amount of loan (thousands of dollars)
Loan/price ratio (percent)
Maturity (years)
Fees and charges (percent of loan amount)
Contract rate (percent per year)
Yield (percent per year)
7 OTS series 3
8 HUD series 4
137.0
100.5
75.2
27.8
2.26
8.94
150.0
110.5
75.5
9.31
10.17
10.16
9.43
160.8
119.4
75.6
28.3
2.31
9.83
160.6
10.48
9.70
10.22
10.05
9.61
9.55
9.95
9.48
159.6
117.0
74.5
28.1
2.06
9.76
174.5
125.3
73.8
9.18
10.30
10.11
10.22
10.49
9.83
n.a.
n.a.
28.0
2.19
8.81
28.6
2.42
10.06
153.1
111.3
73.2
27.3
1.95
9.77
152.8
110.4
73.0
27.1
1.81
9.78
162.7
119.9
74.4
27.9
10.24
10.04
10.11
9.79
10.09
9.72
10.07
9.75
9.94
9.47
9.73
9.21
9.69
9.07
9.72'
n.a.
118.6
75.3
28.4
2.14
9.87
2.18
9.70
SECONDARY MARKETS
Yield (percent per year)
9 FHA mortgages (HUD series) 5
10 GNMA securities 6
Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION
Mortgage holdings (end of period)
11 Total
12 FHA/VA-insured
13 Conventional
95,030
21,660
73,370
101,329
19,762
81,567
104,974
19,640
85,335
104,421
19,630
84,791
105,896
19,589
86,307
107,052
19,608
87,444
108,180
19,843
88,337
109,076
19,953
89,123
110,721
20,283
90,438
111,329
20,471
90,858
Mortgage transactions (during period)
14 Purchases
20,531
23,110
22,518
2,091
2,724
2,223
2,267
2,376
2,982
2,214
Mortgage
commitments7
15 Contracted (during period)
16 Outstanding (end of period)
25,415
4,886
23,435
2,148
27,409
6,037
2,513
5,648
2,842
5,755
2,328
5,865
2,963
6,548
2,536
6,645
2,495
6,037
1,787
5,619
Mortgage holdings (end of periodf
17 Total
18 FHA/VA
19 Conventional
12,802
686
12,116
15,105
620
14,485
n.a.
n.a.
n.a.
20,533
585
19,948
21,024
589
20,435
20,650
540
20,110
21,342
588
20,755
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
Mortgage transactions (during period)
20 Purchases
21 Sales
76,845
75,082
44,077
39,780
n.a.
73,446
5,720
5,180
7,283
6,650
7,889
8,050
7,884
7,058
n.a.
7,058
n.a.
8,526
n.a.
6,845
Mortgage
commitments9
22 Contracted (during period)
71,467
66,026
n.a.
6,608
5,705
7,708
7,555
n.a.
n.a.
n.a.
FEDERAL H O M E LOAN MORTGAGE CORPORATION
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) 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; 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
secondary market. Based on transactions on first day of subsequent month. Large
monthly movements in average yields may reflect market adjustments to changes
in maximum permissable contract rates.
6. Average net yields to investors on Government National Mortgage Association 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 averages of Friday figures from the
Wall Street Journal.
7. Includes some multifamily and nonprofit hospital loan commitments in
addition to 1- to 4-family loan commitments accepted in FNMA's free market
auction system, and through the FNMA-GNMA tandem plans.
8. Includes participation as well as whole loans.
9. Includes conventional and government-underwritten loans. FHLMC's mortgage commitments and mortgage transactions include activity under mortgage/
securities swap programs, while the corresponding data for FNMA exclude swap
activity.
A38
1.54
DomesticNonfinancialStatistics • April 1990
MORTGAGE DEBT OUTSTANDING1
Millions of dollars, end of period
1988
Type of holder, and type of property
1987
1988
1989
1989
Q4
QL
Q2
Q3
Q4"
1 All holders
2,977,293
3,268,285
3,521,337
3,268,285
3,328,824
3,391,259
3,454,053''
3,521,337
2 1- to 4-family
3 Multifamily
4 Commercial
5
1,959,607
273,954
654,863
88,869
2,189,475
290,355
701,652
86,803
2,383,983
305,746
745,102
86,506
2,189,475
290,355
701,652
86,803
2,230,006
296,139
716,695
85,984
2,281,317
297,860
725,341
86,741
2,331,366r
302,121
733,988
86,578
2,383,983
305,746
745,102
86,506
1,704,560
591,369
276,270
33,330
267,340
14,429
1,874,967
669,160
314,283
34,131
305,242
15,504
1,968,786
757,904
359,182
37,049
344,349
17,324
1,874,967
669,160
314,283
34,131
305,242
15,504
1,905,052
688,662
324,681
34,172
313,941
15,868
1,932,154
715,049
338,872
34,954
324,878
16,345
1,950,634
737,979''
349,739
36,075
335,296
16,869
1,968,786
757,904
359,182
37,049
344,349
17,324
860,467
602,408
106,359
150,943
757
212,375
13,226
22,524
166,722
9,903
40,349
929,647
678,263
111,302
139,416
666
232,639
15.284
23,562
184,124
9,669
43,521
920,974
675,842
108,421
136,070
641
239,202
13,525
26,506
189,642
9,529
50,707
929,647
678,263
111,302
139,416
666
232,639
15,284
23,562
184,124
9,669
43,521
936,091
682,658
112,507
140,255
671
234,910
12,690
24,636
188,073
9,511
45,389
933,694
684,828
110,009
138,201
656
236,160
12,745
25,103
188,756
9,556
47,251
927,982'
680,572
109,353
137,406
651
235,767r
13,045
25,913
187,208
9,601
48,906r
920,974
675,842
108,421
136,070
641
239,202
13,525
26,506
189,642
9,529
50,707
192,721
444
25
419
43,051
18,169
8,044
6,603
10,235
200,570
26
26
0
42,018
18,347
8,513
5,343
9,815
212,150
24
24
0
41,985
19,083
9,120
4,423
9,359
200,570
26
26
0
42,018
18,347
8,513
5,343
9,815
199,847
26
26
0
41,780
18,347
8,615
5,101
9,717
201,909
24
24
0
40,711
18,391
8,778
3,885
9,657
206,673'
23r
23
0
41,117'
18,405
8,916
4,366
9,430
212,150
24
24
0
41,985
19,083
9,120
4,423
9,359
5,574
2,557
3,017
96,649
89,666
6,983
34,131
2,008
32,123
12,872
11,430
1,442
5,973
2,672
3,301
103,013
95,833
7,180
32,115
1,890
30,225
17,425
15,077
2,348
6,202
3,007
3,194
110,884
102,819
8,064
30,792
1,888
28,904
22,265
19,174
3,091
5,973
2,672
3,301
103,013
95,833
7,180
32,115
1,890
30,225
17,425
15,077
2,348
6,075
2,550
3,525
101,991
94,727
7,264
31,261
1,839
29,422
18,714
16,192
2,522
6,424
2,827
3,597
103,309
95,714
7,595
31,467
1,851
29,616
19,974
17,305
2,669
6,023r
2,900'
3,123r
107,052r
99,168
7,884
30,943r
1,821
29,122
21,515r
18,493
3,022
6,202
3,007
3,194
110,884
102,819
8,064
30,792
1,888
28,904
22,265
19,174
3,091
44 Mortgage pools or trusts 6
45
Government National Mortgage Association
46
1- to 4-family
47
Multifamily
48
Federal Home Loan Mortgage Corporation
49
1- to 4-family
50
Multifamily
51
Federal National Mortgage Association
52
1- to 4-family
53
Multifamily
54
Farmers Home Administration 5
55
1- to 4-family
56
Multifamily
57
Commercial
58
Farm
718,297
317,555
309,806
7,749
212,634
205,977
6,657
139,960
137,988
1,972
245
121
0
63
61
810,887
340,527
331,257
9,270
226,406
219,988
6,418
178,250
172,331
5,919
104
26
0
38
40
931,090
374,434
362,711
11,723
266,260
259,332
6,928
216,466
207,677
8,789
79
23
0
22
34
810,887
340,527
331,257
9,270
226,406
219,988
6,418
178,250
172,331
5,919
104
26
0
38
40
839,684
348,622
337,563
11,059
234,695
228,389
6,306
188,071
181,352
6,719
96
24
0
34
38
861,827
353,154
341,951
11,203
242,789
236,404
6,385
196,501
188,774
7,727
85
23
0
26
36
898,388r
361,291'
349,830
11,461
256,896'
250,123
6,773
208,894''
200,302
8,592
78r
22
0
22
34
931,090
374,434
362,711
11,723
266,260
259,332
6,928
216,466
207,677
8,789
79
23
0
22
34
59 Individuals and others 7
60
1- to 4-family
61
Multifamily
62
Commercial
63
Farm
361,715
201,704
75,458
63,192
21,361
381,861
215,077
78,411
67,489
20,884
409,310
235,138
82,862
70,596
20,714
381,861
215,077
78,411
67,489
20,884
384,241
215,379
78,814
69,291
20,757
395,369
225,059
79,840
69,595
20,875
398,358r
226,788r
81,009
69,690
20,871
409,310
235,138
82,862
70,596
20,714
6 Selected financial institutions
7
Commercial banks
8
1- to 4-family
9
Multifamily
10
Commercial
11
Farm
12
13
14
15
16
17
18
19
20
21
22
Savings institutions 3
1- to 4-family
Multifamily
Commercial
Farm
Life insurance companies
1- to 4-family
Multifamily
Commercial
Farm
Finance companies 4
23 Federal and related agencies
24
Government National Mortgage Association
25
1- to 4-family
26
Multifamily
27
Farmers Home Administration
28
1- to 4-family
29
Multifamily
30
Commercial
31
Farm
32
33
34
35
36
37
38
39
40
41
42
43
Federal Housing and Veterans Administration
1- to 4-family
Multifamily
Federal National Mortgage Association
1- to 4-family
Multifamily
Federal Land Banks
1- to 4-family
Farm
Federal Home Loan Mortgage Corporation
1- to 4-family
Multifamily
1. Based on data from various institutional and governmental sources, with
some quarters estimated in part by the Federal Reserve. Multifamily debt refers
to loans on structures of five or more units.
2. Includes loans held by nondeposit trust companies but not bank trust
departments.
3. Includes savings banks and savings and loan associations. Beginning 1987:1,
data reported by FSLIC-insured institutions include loans in process and other
contra assets (credit balance accounts that must be subtracted from the corresponding gross asset categories to yield net asset levels).
4. Assumed to be entirely 1- to 4-family loans.
5. FmHA-guaranteed securities sold to the Federal Financing Bank were
reallocated from FmHA mortgage pools to FmHA mortgage holdings in 1986:4,
because of accounting changes by the Farmers Home Administration.
6. Outstanding principal balances of mortgage pools backing securities insured
or guaranteed by the agency indicated. Includes private pools which are not
shown as a separate line item.
7. 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 other U.S. agencies.
Consumer Installment Credit
A39
1.55 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net Change, seasonally adjusted
Millions of dollars
1989
Holder, and type of credit
1988
1989
Apr.
June
May
July
Aug.
Sept.
Oct.
Nov/
Dec.
Amounts outstanding (end of period)
659,507
717,074
693,911
698,132
700,849
700,344
703,001
704,371
707,562
712,160
717,074
By major holder
Commercial banks
Finance companies
Credit unions
Retailers
Savings institutions
Gasoline companies
Pools of securitized assets
318,925
145,180
86,118
43,498
62,099
3,687
n.a.
334,936
140,484
89,886
42,744
57,693
3,835
47,495
320,458
144,378
89,330
41,301
61,919
3,787
32,737
323,363
145,523
89,890
41,323
61,311
3,897
32,826
324,438
146,055
90,073
41,649
59,920
4,017
34,696
323,621
145,488
89,852
41,798
60,092
3,936
35,557
326,135
144,386
90,016
41,989
59,229
3,976
37,270
327,327
144,188
89,892
42,221
59,883
3,886
36,974
330,746
141,273
89,856
42,319
58,890
3,804
40,675
332,675
141,396
89,677
42,554
58,264
3,828
43,766
334,936
140,484
89,886
42,744
57,693
3,835
47,495
By major type of credit
9 Automobile
10 Commercial banks
Credit unions
11
Finance companies
1?
13 Savings institutions
14 Pools of securitized assets
281,174
123,259
41,326
97,204
19,385
n.a.
289,459
127,285
42,865
83,572
17,332
18,404
289,654
123,878
42,510
90,268
18,866
14,132
290,741
125,118
42,687
90,976
18,566
13,395
290,192
125,592
42,684
91,184
18,032
12,700
288,526
124,881
42,624
90,213
17,972
12,835
288,533
126,597
42,747
89,439
17,603
12,147
287,754
126,759
42,733
88,317
17,990
11,955
288,747
128,238
42,761
84,814
17,692
15,243
289,200
128,654
42,720
84,707
17,504
15,615
289,459
127,285
42,865
83,572
17,332
18,404
11 Revolving
16 Commercial banks
17 Retailers
18 Gasoline companies
19 Savings institutions
Credit unions
70
Pools of securitized assets
21
174,792
117,572
38,692
3,687
10,151
4,691
n.a.
203,301
122,404
37,804
3,835
10,775
5,406
23,077
184,500
114,130
36,497
3,787
10,918
5,035
14,134
186,502
115,407
36,504
3,897
11,008
5,109
14,578
189,622
115,561
36,814
4,017
10,951
5,162
17,117
191,028
115,967
36,963
3,936
11,176
5,192
17,795
194,398
117,012
37,134
3,976
11,206
5,244
19,827
195,302
117,868
37,355
3,886
11,183
5,279
19,731
196,379
118,801
37,435
3,804
10,998
5,319
20,021
199,240
119,254
37,639
3,828
10,881
5,351
22,286
203,301
122,404
37,804
3,835
10,775
5,406
23,077
25,744
8,974
7,186
9,583
22,602
9,001
4,846
8,756
23,993
8,836
5,659
9,498
23,952
8,878
5,684
9,390
23,685
8,847
5,674
9,163
23,630
8,830
5,624
9,176
22,938
8,808
5,100
9,030
22,991
8,788
5,087
9,116
22,947
8,724
5,272
8,951
22,567
8,941
4,783
8,843
22,602
9,001
4,846
8,756
177,798
69,120
40,790
40,102
4,807
22,981
n.a.
201,711
76,246
52,066
41,615
4,940
20,830
6,014
195,763
73,614
48,451
41,785
4,804
22,638
4,471
196,936
73,960
48,863
42,094
4,819
22,347
4,853
197,349
74,438
49,197
42,228
4,834
21,773
4,879
197,161
73,944
49,650
42,036
4,835
21,769
4,927
197,132
73,718
49,847
42,025
4,855
21,390
5,296
198,324
73,912
50,784
41,880
4,866
21,593
5,288
199,490
74,983
51,187
41,776
4,884
21,249
5,411
201,154
75,826
51,906
41,606
4,914
21,036
5,865
201,711
76,246
52,066
41,615
4,940
20,830
6,014
1 Total
?
3
4
5
6
7
8
?? Mobile home
73
Commercial banks
Finance companies
74
Savings institutions
25
76 Other
Commercial banks
77
Finance companies
78
79
Credit unions
Retailers
30
31
Savings institutions
Pools of securitized assets
32
Net change (during period)
51,786
57,567
2,749
4,221
2,717
-505
2,657
1,371
3,191
4,598
4,913
36,015
4,899
6,031
2,523
2,248
69
n.a.
16,011
-4,696
3,768
-754
-4,406
148
18,668
2,216
1,309
815
2
-815
104
-882
2,904
1,145
560
21
-609
110
89
1,076
532
184
326
-1,390
120
1,870
-817
-567
-222
149
172
-81
861
2,514
-1,102
164
192
-863
39
1,713
1,192
-198
-124
231
654
-89
-2%
3,418
-2,915
-36
98
-993
-82
3,701
1,930
124
-179
235
-626
23
3,091
2,261
-913
209
190
-571
7
3,729
By major type of credit
41 Automobile
Commercial banks
42
43
Credit unions
Finance companies
44
Savings institutions
45
Pools of securitized assets
46
15,198
14,058
975
-991
1,157
n.a.
8,285
4,026
1,539
-13,632
-2,053
3,362
804
816
300
701
-366
-647
1,087
1,239
177
708
-300
-737
-549
474
-3
208
-533
-695
-1,667
-711
-60
-970
-61
135
7
1,716
123
-775
-369
-688
-779
162
-14
-1,122
387
-192
993
1,479
28
-3,503
-298
3,288
453
416
-40
-107
-188
372
259
-1,369
145
-1,135
-172
2,789
47 Revolving
Commercial banks
48
49
Retailers
Gasoline companies
50
51
Savings institutions
52 Credit unions
4
53 Pools of securitized assets
20,908
18,453
2,303
69
-216
300
n.a.
28,509
4,832
-888
148
624
715
12,588
1,670
1,576
8
104
58
88
-165
2,002
1,277
7
110
90
74
444
3,120
154
310
120
-57
53
2,539
1,406
405
149
-81
225
30
678
3,370
1,045
171
39
30
52
2,032
904
856
221
-89
-22
35
-96
1,076
933
80
-82
-185
40
290
2,861
453
205
23
-117
32
2,265
4,062
3,150
165
7
-107
55
791
-643
-246
-576
177
-3,142
27
-2,340
-827
-174
-7
-28
-140
-41
42
25
-108
-267
-31
-10
-227
-56
-18
-50
12
-692
-22
-524
-146
53
-20
-13
86
-44
-64
185
-165
-380
218
-489
-109
35
59
63
-87
16,323
3,750
6,466
4,758
221
1,131
n.a.
23,913
7,126
11,276
1,513
133
-2,151
2,718
449
-169
635
428
-7
-368
-70
1,173
346
412
309
15
-291
382
413
478
334
133
16
-574
26
-189
-494
453
-191
0
-5
48
-29
-226
197
-11
21
-379
369
1,192
194
937
-145
11
203
-8
1,166
1,071
403
-104
18
-344
123
1,664
843
719
-170
30
-212
454
557
420
159
10
25
-206
149
33 Total
34
35
36
37
38
39
40
By major holder
Commercial banks
Finance companies 2
Credit unions
Retailers 3
Savings institutions
Gasoline companies
Pools of securitized assets 4
54 Mobile home
55
Commercial banks
Finance companies
56
Savings institutions
57
58 Other
59 Commercial banks
Finance companies
60
Credit unions
61
Retailers
62
Savings institutions
63
Pools of securitized assets
64
1. The Board's series cover most short- and intermediate-term credit extended
to individuals that is scheduled to be repaid (or has the option of repayment) in
two or more installments.
These data also appear in the Board's G.19 (421) release. For address, see
inside front cover.
2. More detail for finance companies is available in the G. 20 statistical release.
3. Excludes 30-day charge credit held by travel and entertainment companies.
4. Outstanding balances of pools upon which securities have been issued; these
balances are no longer carried on the balance sheets of the loan originator.
A40
DomesticNonfinancialStatistics • April 1990
1.56 TERMS OF CONSUMER INSTALLMENT CREDIT1
Percent unless noted otherwise
1989
Item
1987
1988
1989
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
INTEREST RATES
1
2
3
4
6
Commercial banks 2
48-month new c a r
24-month personal
120-month mobile home 3
Credit card
Auto finance companies
New car
Used car
10.45
14.22
13.38
17.92
10.85
14.68
13.54
17.78
12.07
15.44
14.11
18.02
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
12.13
15.45
14.13
18.07
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
11.94
15.42
13.97
18.07
n.a.
n.a.
n.a.
n.a.
10.73
14.60
12.60
15.11
12.62
16.18
11.96
16.45
11.94
16.37
12.22
16.31
12.42
16.22
13.04
16.17
13.27
16.09
13.27
16.10
53.5
45.2
56.2
46.7
54.2
46.6
53.0
46.5
52.9
46.4
52.9
46.2
53.1
46.2
54.4
45.8
55.1
45.6
55.1
45.5
93
98
94
98
91
97
91
97
91
97
90
96
88
96
88
%
89
96
89
96
11,203
7,420
11,663
7,824
12,001
7,954
12,065
7,921
12,108
7,988
11,949
7,874
11,841
7,856
11,965
7,904
12,279
8,063
12,301
8,0%
O T H E R TERMS 4
7
8
9
10
11
12
Maturity (months)
New car
Used car
Loan-to-value ratio
New car
Used car
Amount financed (dollars)
New car
Used car
1. These data also appear in the Board's G.19 (421) release. For address, see
inside front cover.
2. Data for midmonth of quarter only.
3. Before 1983 the maturity for new car loans was 36 months, and for mobile
home loans was 84 months.
4. At auto finance companies.
Flow of Funds
1.57
A41
F U N D S R A I S E D I N U . S . CREDIT M A R K E T S
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1988
Transaction category, sector
1984
1985
1986
1987
1989
1988
Q1
Q2
Q3
Q4
Qi
Q2
Q3
Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial sectors
750.7
846.3
831.1
693.2
767.0
728.2
827.2
754.4
758.3
792.2
658.9
688.1
By sector and instrument
2 U.S. government
3 Treasury securities
4
Agency issues and mortgages
198.8
199.0
-.2
223.6
223.7
-.1
215.0
214.7
.4
144.9
143.4
1.5
157.5
140.0
17.4
211.6
212.0
-.5
113.7
106.0
7.7
162.5
141.6
20.9
142.1
100.5
41.6
199.9
201.1
-1.2
70.9
65.8
5.1
149.0
149.1
-.2
5 Private domestic nonfinancial sectors
6
Debt capital instruments
7
Tax-exempt obligations
8
Corporate bonds
9
Mortgages
Home mortgages
10
Multifamily residential
11
Commercial
12
Farm
13
551.9
320.0
51.0
46.1
222.8
136.7
25.2
62.2
-1.2
622.7
451.4
135.4
73.8
242.2
156.8
29.8
62.2
-6.6
616.1
460.3
22.7
121.3
316.3
218.7
33.5
73.6
-9.5
548.3
458.5
34.1
99.9
324.5
234.9
24.4
71.6
-6.4
609.6
462.6
34.0
120.9
307.7
229.1
18.9
61.7
-2.1
516.6
386.5
29.1
118.8
238.7
170.7
24.2
48.5
-4.7
713.4
561.0
37.9
143.9
379.2
300.7
14.7
65.4
-1.6
592.0
463.9
34.8
115.9
313.2
231.0
19.5
65.4
-2.6
616.3
438.9
34.3
104.9
299.7
214.0
17.3
67.7
.7
592.3
427.8
29.3
111.6
286.9
205.2
27.2
58.8
-4.4
588.0
394.1
20.6
138.5
234.9
186.1
8.1
38.7
2.1
539.1
412.6
32.6
113.6
266.4
191.9
21.3
53.2
.0
14
15
16
17
18
Other debt instruments
Consumer credit
Bank loans n.e.c
Open market paper
Other
231.9
81.6
66.3
21.7
62.2
171.3
82.5
38.6
14.6
35.6
155.8
58.0
66.7
-9.3
40.5
89.7
32.9
10.8
2.3
43.8
147.0
51.1
38.4
11.6
45.9
130.1
43.7
20.8
2.4
63.2
152.4
51.9
58.8
6.8
34.8
128.1
35.5
7.3
17.1
68.1
177.3
73.1
66.6
20.0
17.6
164.5
34.8
23.1
44.1
62.5
193.9
46.0
29.9
44.9
73.1
126.5
30.9
21.6
20.4
53.6
19
20
21
22
23
24
25
By borrowing sector
State and local governments
Households
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate
551.9
28.1
231.5
292.3
-.4
123.2
169.6
622.7
90.9
284.6
247.2
-14.5
129.3
132.4
616.1
36.2
289.2
290.7
-16.3
103.2
203.7
548.3
33.6
271.9
242.8
-10.6
107.9
145.5
609.6
29.8
287.9
291.8
-7.5
91.9
207.5
516.6
23.4
230.2
263.0
-12.7
85.2
190.5
713.4
37.0
346.7
329.7
-3.3
83.6
249.4
592.0
28.1
291.6
272.3
-2.2
100.5
174.0
616.3
30.6
283.3
302.4
-11.8
98.2
216.0
592.3
29.7
263.1
299.4
-2.2
91.1
210.6
588.0
27.7
227.1
333.3
.3
70.0
263.0
539.1
29.5
254.8
254.9
2.8
81.7
170.4
26 Foreign net borrowing in United States
27
Bonds
Bank loans n.e.c
28
29 Open market paper
30
U.S. government loans
8.4
3.8
-6.6
6.2
5.0
1.2
3.8
-2.8
6.2
-6.0
9.7
3.1
-1.0
11.5
-3.9
4.9
7.4
-3.6
2.1
-1.0
6.9
6.9
-1.8
9.6
-7.8
4.8
14.2
1.7
.7
-11.8
5.4
2.6
-3.3
6.5
-.4
4.1
5.9
.0
10.3
-12.1
13.3
5.1
-5.7
21.0
-7.1
-1.1
3.2
4.9
12.1
-21.4
-3.9
11.1
1.7
-8.1
-8.6
28.7
9.1
.0
20.4
-.9
31 Total domestic plus foreign
759.1
847.5
840.9
698.1
773.9
733.0
832.6
758.5
771.7
791.1
655.0
716.8
Financial sectors
32 Total net borrowing by financial sectors
33
34
35
36
By instrument
U.S. government related
Sponsored credit agency securities
Mortgage pool securities
Loans from U.S. government
37 Private financial sectors
Corporate bonds
38
39
Mortgages
40
Bank loans n.e.c
41
Open market paper
42
Loans from Federal Home Loan Banks
150.7
201.3
318.9
315.0
264.2
242.5
263.9
232.1
318.3
394.4
123.4
152.5
74.9
30.4
44.4
.0
101.5
20.6
79.9
1.1
187.9
15.2
173.1
-.4
185.8
30.2
156.4
-.8
137.5
44.9
92.6
.0
128.8
59.5
69.3
.0
104.3
11.1
93.1
.0
144.4
46.5
97.8
.0
172.5
62.3
110.1
.0
216.1
84.9
131.2
.0
105.8
12.5
93.3
.0
137.4
10.0
127.4
.0
75.9
34.3
.4
1.4
24.0
15.7
99.7
50.9
.1
2.6
32.0
14.2
131.0
82.9
.1
4.0
24.2
19.8
129.2
78.9
.4
-3.3
28.8
24.4
126.7
51.7
.3
1.4
53.6
19.7
113.7
60.0
-.1
5.9
38.5
9.4
159.6
71.1
.1
5.7
70.5
12.3
87.7
32.5
-.1
-5.6
35.1
25.8
145.8
43.0
1.2
-.3
70.4
31.4
178.3
52.7
.3
3.0
53.2
69.1
17.6
31.4
.0
.3
2.8
-16.9
15.1
26.4
.0
4.1
28.2
-43.7
150.7
201.3
318.9
315.0
264.2
242.5
263.9
232.1
318.3
394.4
123.4
152.5
30.4
44.4
75.9
7.3
16.1
17.2
1.2
24.0
.8
9.3
21.7
79.9
99.7
-4.9
16.6
17.3
1.5
57.2
.5
11.5
14.9
173.1
131.0
-3.6
15.2
20.9
4.2
54.5
1.0
39.0
29.5
156.4
129.2
7.1
14.3
19.6
8.1
40.3
.8
39.1
44.9
92.6
126.7
-3.9
5.2
19.9
1.9
67.0
4.1
32.5
59.5
69.3
113.7
-16.7
-8.8
10.0
2.3
78.4
5.4
43.0
11.1
93.1
159.6
-1.6
22.4
19.1
1.1
85.4
1.7
31.5
46.5
97.8
87.7
-.9
6.1
24.1
.5
40.7
-5.9
23.1
62.3
110.1
145.8
3.7
.8
26.3
3.8
63.6
15.0
32.5
84.9
131.2
178.3
-13.4
6.4
71.3
-2.8
78.4
-.9
39.3
12.5
93.3
17.6
-.9
6.5
-16.2
-1.1
32.8
-2.2
-1.4
10.0
127.4
15.1
7.5
6.7
-43.9
-2.9
43.2
-1.4
5.9
By sector
43
44
45
46
47
48
49
50
51
52
53
Sponsored credit agencies
Mortgage pools
Private financial sectors
Commercial banks
Bank affiliates
Savings and loan associations
Mutual savings banks
Finance companies
REITs
SCO Issuers
A42
DomesticNonfinancialStatistics • April 1990
1.57—Continued
1989
1988
Transaction category, sector
1984
1985
1986
1987
1988
Ql
Q2
Q3
Q4
Q2
Q3
1,089.9 1,185.4
Ql
All sectors
54 Total net borrowing
909.8
975.5
1,096.5
990.6
778.4
869.3
55
56
57
58
59
60
61
62
273.8
51.0
84.3
223.1
81.6
61.1
51.9
82.9
324.2
135.4
128.4
242.2
82.5
38.3
52.8
45.0
403.4
22.7
207.3
316.4
58.0
69.7
26.4
56.1
331.5
34.1
186.3
324.9
32.9
3.8
33.2
66.5
294.9
34.0
179.5
308.0
51.1
38.0
74.9
57.8
340.4
29.1
193.0
238.6
43.7
28.3
41.6
60.8
218.0
37.9
217.6
379.3
51.9
61.2
83.9
46.8
306.8
34.8
154.3
313.1
35.5
1.7
62.5
81.8
314.6
34.3
153.0
300.8
73.1
60.7
111.5
42.0
416.0
29.3
167.5
287.2
34.8
31.1
109.4
110.2
176.7
20.6
181.1
234.9
46.0
31.9
39.6
47.5
286.4
32.6
149.2
266.4
30.9
25.8
69.0
9.1
6.3
14.4
.0
-7.9
10.4
47.6
1.2
10.6
-17.9
-22.5
43.7
-7.5
744.4
192.5
831.9
209.3
831.2
215.0
701.1
152.8
756.6
147.1
680.6
164.0
825.9
112.5
743.8
151.8
776.3
160.0
814.7
222.4
615.2
27.2
695.6
156.4
-48.7
-64.7
U.S. government securities
State and local obligations
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans
63 MEMO: U.S. government, cash balance
Totals net of changes in U.S. government cash balances
64
Net borrowing by domestic nonfinancial
Net borrowing by U.S. government
65
1,048.8 1,159.8 1,013.2 1,038.1
External corporate equity funds raised in United States
66 Total net share issues
-36.0
20.1
90.5
14.3
67
68
69
70
71
29.3
-65.3
-74.5
8.2
.9
84.4
-64.3
-81.5
13.5
3.7
159.0
-68.5
-80.8
11.1
1.2
71.6
-57.3
-76.5
21.4
-2.1
Mutual funds
All other
Nonfinancial corporations
Financial corporations
Foreign shares purchased in United States
-117.9 -101.0 -133.7
-73.5
-163.5 -163.5
-.7
-117.2
-130.5
12.4
.9
1.5
-75.0
-92.0
14.6
2.4
50.0
3.6
24.0
11.9
-175.4 -167.1 -72.7 -114.6
-195.0 -180.0 -105.0 -145.0
9.4
17.1
13.5
17.1
13.3
6.1
3.6
15.2
-9.5
-6.6
- 9 1 . 5 -127.0
- 9 5 . 0 -140.0
2.4
19.0
-6.0
1.1
Flow of Funds
1.58
A43
D I R E C T A N D I N D I R E C T S O U R C E S O F F U N D S TO C R E D I T M A R K E T S
Billions of dollars, except as noted; quarterly data are at seasonally adjusted annual rates.
1989
1988
Transaction category, or sector
1 Total funds advanced in credit markets to domestic
nonfinancial sectors
1984
1985
1986
1987
1988
Q1
Q2
Q3
Q4
Q1
Q2
Q3
750.7
846.3
831.1
693.2
767.0
728.2
827.2
754.4
758.3
792.2
658.9
688.1
157.6
38.9
56.5
15.7
46.6
202.0
45.9
94.6
14.2
47.3
314.0
69.4
170.1
19.8
54.7
262.8
70.1
153.2
24.4
15.1
237.6
85.0
104.0
19.7
28.8
278.6
153.2
88.9
9.4
27.1
185.5
43.3
107.9
12.3
22.1
196.9
24.1
98.1
25.8
49.0
289.3
119.6
121.2
31.4
17.1
348.7
26.7
97.6 -102.4
133.3
106.6
69.1 - 1 6 . 9
48.7
39.4
267.4
117.1
149.0
-43.7
45.0
17.1
74.3
8.4
57.9
17.8
103.5
18.4
62.3
9.7
187.2
19.4
97.8
-7.9
183.4
24.7
62.7
-4.9
129.6
10.5
102.3
-7.0
114.3
2.7
168.6
-7.6
105.7
5.0
82.5
4.3
130.1
15.5
47.0
-9.3
168.5
18.9
111.2
2.8
221.4
5.2
119.3
3.1
15.6
-3.9
11.9
5.2
165.6
-30.7
127.2
74.9
8.4
101.5
1.2
187.9
9.7
185.8
4.9
137.5
6.9
128.8
4.8
104.3
5.4
144.4
4.1
172.5
13.3
216.1
-1.1
105.8
-3.9
137.4
28.7
Private domestic funds advanced
13 Total net advances
14 U.S. government securities
15 State and local obligations
16 Corporate and foreign bonds
17 Residential mortgages
18 Other mortgages and loans
19 LESS: Federal Home Loan Bank advances
676.3
234.9
51.0
35.1
105.3
265.6
15.7
747.0
278.2
135.4
40.8
91.8
214.8
14.2
714.8
333.9
22.7
84.2
82.0
211.8
19.8
621.1
261.4
34.1
87.5
106.1
156.5
24.4
673.8
209.9
34.0
104.4
144.0
201.2
19.7
583.2
187.2
29.1
126.5
106.0
143.8
9.4
751.3
174.7
37.9
126.2
207.5
217.2
12.3
705.9
282.8
34.8
91.7
152.3
170.1
25.8
654.8
195.0
34.3
73.0
110.1
273.7
31.4
658.4
318.4
29.3
89.4
99.2
191.3
69.1
734.1
279.1
20.6
132.3
87.5
197.7
-16.9
586.8
169.3
32.6
103.4
64.2
173.6
-43.7
Private financial intermediation
70 Credit market funds advanced by private financial
institutions
Commercial banking
71
Savings institutions
77
73
Insurance and pension funds
24 Other finance
585.8
169.2
154.7
121.8
140.1
579.9
186.0
87.9
154.4
151.6
744.0
197.5
107.6
174.6
264.2
560.8
136.8
136.8
210.9
76.3
558.2
155.3
120.5
194.9
87.4
617.4
87.9
96.0
257.4
176.1
553.7
194.5
134.9
182.7
41.6
427.5
118.4
157.0
150.5
1.7
634.1
220.5
94.2
189.1
130.3
568.6
120.6
62.2
228.3
157.6
342.2
544.3
132.9
158.6
- 7 3 . 1 -154.2
156.0
182.5
207.4
276.2
75 Sources of funds
26
Private domestic deposits and RPs
Credit market borrowing
77
78
Other sources
79
Foreign funds
Treasury balances
30
31
Insurance and pension reserves
Other, net
32
585.8
322.6
75.9
187.3
8.8
4.0
124.0
50.5
579.9
214.3
99.7
265.9
19.7
10.3
131.9
104.1
744.0
262.6
131.0
350.4
12.9
1.7
149.3
186.5
560.8
144.1
129.2
287.5
43.7
-5.8
176.1
73.6
558.2
219.2
126.7
212.3
9.3
7.3
186.8
8.8
617.4
305.5
113.7
198.2
-60.6
44.2
190.1
24.4
553.7
102.0
159.6
292.1
94.5
-16.3
184.0
29.9
427.5
191.9
87.7
147.9
-42.1
5.6
109.8
74.5
634.1
277.4
145.8
210.9
45.5
-4.1
263.3
-93.8
568.6
166.5
178.3
223.8
-28.4
-21.6
133.0
140.8
544.3
213.4
17.6
313.3
-16.0
26.6
151.5
151.2
342.2
282.7
15.1
44.3
10.6
-6.4
88.7
-48.6
Private domestic nonfinancial investors
33 Direct lending in credit markets
34
U.S. government securities
35
State and local obligations
Corporate and foreign bonds
36
37
Open market paper
Other
38
166.4
111.4
27.1
-4.1
7.8
24.2
266.8
157.8
37.7
4.2
47.5
19.6
101.8
60.9
-21.7
39.3
5.4
17.9
189.6
100.0
45.6
24.1
6.6
13.3
242.3
149.3
33.9
2.6
37.2
19.3
79.5
119.6
19.7
-39.6
-14.5
-5.8
357.2
103.2
37.2
61.4
98.6
56.8
366.2
225.7
56.4
-5.8
77.4
12.5
166.5
148.7
22.3
-5.7
-12.6
13.9
268.1
211.1
35.7
-15.4
67.1
-30.3
207.5
123.2
-11.4
32.8
19.5
43.4
259.7
137.4
22.6
21.2
43.4
35.1
39 Deposits and currency
40
Currency
Checkable deposits
41
Small time and savings accounts
47
43
Money market fund shares
44
Large time deposits
45
Security RPs
46
Deposits in foreign countries
326.1
8.6
30.2
150.7
49.0
82.9
9.8
-5.1
224.6
12.4
41.9
138.5
8.9
7.4
17.7
-2.1
283.0
14.4
95.0
120.6
38.3
-11.4
20.2
5.9
160.2
19.0
-3.0
76.0
27.2
26.7
17.2
-2.8
221.8
14.7
12.3
122.2
22.8
40.8
21.2
-12.1
313.5
10.7
3.6
199.5
57.6
16.9
27.9
-2.7
110.0
13.8
-30.5
130.5
-21.0
-3.5
26.5
-5.9
215.7
29.3
-21.4
72.7
-3.5
137.0
7.0
-5.5
248.2
5.1
97.3
86.0
58.1
12.7
23.3
-34.4
211.2
19.3
-54.5
26.4
51.1
111.9
31.6
25.5
231.1
12.6
-83.0
117.4
111.8
39.8
27.5
5.1
273.2
11.4
35.4
119.1
124.3
-15.4
19.4
-20.9
47 Total of credit market instruments, deposits, and
currency
492.5
491.4
384.8
349.8
464.2
393.0
467.2
581.9
414.7
479.4
438.6
532.9
20.8
86.6
66.7
23.8
77.6
82.0
37.3
104.1
110.7
37.6
90.3
106.4
30.7
82.8
111.7
38.0
105.9
108.1
22.3
73.7
177.0
26.0
60.6
4.9
37.5
96.8
156.7
44.1
86.4
90.9
4.1
74.1
-4.1
37.3
58.3
137.8
-117.9 -101.0 -133.7
-73.5
-163.5 - 1 6 3 . 5
-48.7
-64.7
-.7
-117.2
5.4
-123.3
1.5
-75.0
25.5
-99.1
3.6
11.9
-175.4 -167.1
-6.5
30.1
-193.6 -157.0
24.0
50.0
- 7 2 . 7 -114.6
-6.5
3.8
-42.2 -68.4
By public agencies and foreign
Total net advances
U.S. government securities
Residential mortgages
FHLB advances to thrifts
Other loans and securities
7
3
4
5
6
Total advanced, by sector
U.S. government
Sponsored credit agencies
Monetary authorities
Foreign
Agency and foreign borrowing not in line 1
Sponsored credit agencies and mortgage pools
11
12 Foreign
7
8
9
10
48
49
50
Public holdings as percent of total
Private financial intermediation (in percent)
Total foreign funds
MEMO: Corporate equities not included above
51 Total net issues
-36.0
20.1
90.5
14.3
57
Mutual fund shares
53
Other equities
54 Acquisitions by financial institutions
55 Other net purchases
29.3
-65.3
15.8
-51.8
84.4
-64.3
45.6
-25.5
159.0
-68.5
53.7
36.8
71.6
-57.3
21.4
-7.1
NOTES BY LINE NUMBER.
1. Line 1 of table 1.57.
2. Sum of lines 3 - 6 or 7-10.
6. Includes farm and commercial mortgages.
11. Credit market funds raised by federally sponsored credit agencies, and net
issues of federally related mortgage pool securities.
13. Line 1 less line 2 plus line 11 and 12. Also line 20 less line 27 plus line 33.
Also sum of lines 28 and 47 less lines 40 and 46.
18. Includes farm and commercial mortgages.
26. Line 39 less lines 40 and 46.
27. Excludes equity issues and investment company shares. Includes line 19.
29. Foreign deposits at commercial banks, bank borrowings from foreign
branches, and liabilities of foreign banking agencies to foreign affiliates, less
claims on foreign affiliates and deposits by banking in foreign banks.
30. Demand deposits and note balances at commercial banks.
-9.5
-6.6
- 9 1 . 5 -127.0
-34.4
.2
- 6 6 . 5 -133.9
31. Excludes net investment of these reserves in corporate equities.
32. Mainly retained earnings and net miscellaneous liabilities.
33. Line 13 less line 20 plus line 27.
34-38. Lines 14-18 less amounts acquired by private finance plus amounts
borrowed by private finance. Line 38 includes mortgages.
40. Mainly an offset to line 9.
47. Lines 33 plus 39, or line 13 less line 28 plus 40 and 46.
48. Line 2/line 1.
49. Line 20/line 13.
50. Sum of lines 10 and 29.
51. 53. Includes issues by financial institutions.
NOTE. Full statements for sectors and transaction types in flows and in 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
DomesticNonfinancialStatistics • April 1990
1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING
Billions of dollars; period-end levels.
1988
Transaction category, sector
1984
1985
1986
1989
1987
Q2
Ql
Q3
Q4
Ql
Q2
Q3
Nonfinancial sectors
1 Total credit market debt owed by
domestic nonfinancial sectors
5,951.8
6,795.1
7,631.2
8,335.0
8,477.0
8,686.9
8,875.4
9,105.6
9,258.7
9,428.4
9,604.5
By sector and instrument
2 U.S. government
3
Treasury securities
Agency issues and mortgages
4
1,376.8
1,373.4
3.4
1,600.4
1,597.1
3.3
1,815.4
1,811.7
3.6
1,960.3
1,955.2
5.2
2,003.2
1,998.1
5.0
2,022.3
2,015.3
7.0
2,063.9
2,051.7
12.2
2,117.8
2,095.2
22.6
2,155.7
2,133.4
22.3
2,165.7
2,142.1
23.6
2,204.3
2,180.7
23.5
5 Private domestic nonfinancial sectors
Debt capital instruments
6
7
Tax-exempt obligations
8
Corporate bonds
9
Mortgages
10
Home mortgages
11
Multifamily residential
12
Commercial
13
Farm
4.575.1
3,038.0
520.0
469.2
2,048.8
1.336.2
183.6
416.5
112.4
5,194.7
3,485.5
655.5
542.9
2.287.1
1.490.2
213.0
478.1
105.9
5.815.8
3,957.5
679.1
664.2
2,614.2
1,720.8
246.2
551.4
95.8
6,374.7
4.428.0
713.2
764.1
2,950.7
1.943.1
270.0
648.7
88.9
6,473.8
4.511.0
718.1
793.8
2.999.1
1,978.0
273.0
660.2
88.0
6,664.7
4.652.6
727.2
829.8
3.095.7
2,055.3
276.6
676.0
87.8
6,811.5
4,782.0
746.1
858.8
3,177.2
2,118.0
281.0
691.1
87.0
6,987.8
4.902.1
759.8
885.0
3,257.3
2.174.2
286.8
709.6
86.8
7,103.0
4,979.2
764.7
912.9
3,301.6
2,214.8
292.6
708.2
86.0
7,262.7
5.078.3
769.3
947.5
3,361.6
2.263.4
294.4
717.0
86.7
7,400.2
5,187.8
780.3
975.9
3.431.6
2.316.7
299.3
728.9
86.6
14
15
16
17
18
Other debt instruments
Consumer credit
Bank loans n.e.c
Open market paper
Other
1,537.1
519.3
553.1
58.5
406.2
1,709.3
601.8
592.7
72.2
442.6
1,858.4
659.8
656.1
62.9
479.6
1,946.7
692.7
664.3
73.8
516.0
1,962.8
688.9
668.3
73.5
532.1
2,012.0
705.8
687.2
77.8
541.2
2,029.4
721.2
687.7
80.3
540.2
2,085.7
743.7
702.6
85.4
554.0
2,123.8
745.0
717.6
96.1
565.1
2,184.3
761.0
729.8
110.1
583.5
2,212.4
775.3
734.5
113.1
589.5
19
20
21
22
23
24
25
By borrowing sector
State and local governments
Households
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate
4.575.1
383.0
2.018.2
2,173.9
187.9
769.0
1,216.9
5,194.7
473.9
2.295.5
2,425.4
173.4
898.3
1.353.6
5,815.8
510.1
2,591.8
2,714.0
156.6
1,001.6
1,555.8
6,374.7
543.7
2,864.5
2.966.5
145.5
1,109.4
1.711.6
6,473.8
547.1
2,900.7
3,026.0
141.3
1,131.7
1,753.0
6,664.7
556.0
2,990.2
3,118.5
143.9
1,151.9
1,822.7
6,811.5
565.7
3,068.3
3.177.5
143.6
1.172.6
1,861.3
6,987.8
573.5
3,152.0
3.262.4
137.6
1,205.3
1.919.5
7,103.0
578.5
3,205.6
3.319.0
135.9
1.229.1
1,954.0
7,262.7
584.8
3,265.5
3,412.3
139.5
1,245.9
2,027.0
7,400.2
595.1
3,336.1
3,469.0
140.7
1,261.6
2,066.6
233.6
68.0
30.8
27.7
107.1
234.7
71.8
27.9
33.9
101.1
236.4
74.9
26.9
37.4
97.1
242.9
82.3
23.3
41.2
96.1
244.6
86.1
22.8
42.5
93.1
245.9
86.0
22.4
44.0
93.5
246.1
87.4
22.7
46.3
89.8
249.6
89.2
21.5
50.9
88.1
249.9
90.5
21.6
54.9
83.0
249.0
92.2
22.7
52.7
81.4
255.3
94.5
22.9
57.5
80.4
6,185.4
7,029.9
7,867.6
8,578.0
8,721.6
8,932.8
9,121.5
9,355.3
9,508.7
9,677.4
9,859.7
26 Foreign credit market debt held in
United States
27
Bonds
28
Bank loans n.e.c
29
Open market paper
30
U.S. government loans
31 Total domestic plus foreign
Financial sectors
32 Total credit market debt owed by
financial sectors
33
34
35
36
37
38
39
40
41
42
By instrument
U.S. government related
Sponsored credit agency securities . . . .
Mortgage pool securities
Loans from U.S. government
Private financial sectors
Corporate bonds
Mortgages
Bank loans n.e.c
Open market paper
Loans from Federal Home Loan Banks
43 Total, by sector
44
45
46
47
48
49
50
51
52
53
Sponsored credit agencies
Mortgage pools
Private financial sectors
Commercial banks
Bank affiliates
Savings and loan associations
Mutual savings banks
Finance companies
REITs
SCO issuers
1,010.2
1,213.2
1,563.6
1,885.5
1,926.0
2,000.5
2,058.2
2,149.7
2,258.7
2,298.9
2,336.7
531.2
237.2
289.0
5.0
479.0
153.0
2.5
29.5
219.5
74.6
632.7
257.8
368.9
6.1
580.5
204.5
2.7
32.1
252.4
88.8
844.2
273.0
565.4
5.7
719.5
287.4
2.7
36.1
284.6
108.6
1,026.5
303.2
718.3
5.0
859.0
366.3
3.1
32.8
323.8
133.1
1,050.6
313.5
732.1
5.0
875.4
380.5
3.1
31.7
330.6
129.5
1,076.9
317.9
754.0
5.0
923.6
397.9
3.1
34.3
353.4
134.8
1,116.3
328.5
782.8
5.0
941.9
406.4
3.1
32.9
358.0
141.6
1,164.0
348.1
810.9
5.0
985.7
418.0
3.4
34.2
377.4
152.8
1,209.0
364.3
839.7
5.0
1,049.7
458.2
3.5
32.2
392.0
163.8
1,235.8
369.0
861:8
5.0
1,063.1
465.8
3.5
33.8
398.3
161.9
1,273.8
370.4
898.4
5.0
1,062.9
472.8
3.5
34.7
400.9
151.1
1,010.2
1,213.2
1,563.6
1,885.5
1,926.0
2,000.5
2,058.2
2,149.7
2,258.7
2,298.9
2,336.7
242.2
289.0
479.0
84.1
89.5
81.6
2.9
203.0
4.3
13.5
263.9
368.9
580.5
79.2
106.2
98.9
4.4
261.2
5.6
25.0
278.7
565.4
719.5
75.6
116.8
119.8
8.6
328.1
6.5
64.0
308.2
718.3
859.0
82.7
131.1
139.4
16.7
378.8
7.3
103.1
318.5
732.1
875.4
76.4
131.0
135.3
17.1
393.0
8.7
113.9
322.9
754.0
923.6
77.2
136.3
141.9
17.6
419.8
9.1
121.8
333.5
782.8
941.9
76.6
136.3
148.1
18.1
427.7
7.6
127.5
353.1
810.9
985.7
78.8
136.2
159.3
18.6
445.8
11.4
135.7
369.3
839.7
1,049.7
73.3
140.0
170.1
17.8
463.8
11.1
173.5
374.0
861.8
1,063.1
74.5
141.2
167.9
17.7
478.0
10.6
173.1
375.4
898.4
1,062.9
75.8
141.5
156.8
17.6
486.3
10.3
174.6
All sectors
54 Total credit market debt
7,195.7
8,243.1
9,431.2
10,463.4
10,647.5
10,933.4
11,179.7
11,504.9
11,767.4
11,976.3
12,196.4
55
56
57
58
59
60
61
62
1,902.8
520.0
690.1
2,051.4
519.3
613.4
305.7
592.9
2,227.0
655.5
819.2
2,289.8
601.8
652.7
358.5
638.6
2,653.8
679.1
1,026.4
2,617.0
659.8
719.1
384.9
691.1
2,981.8
713.2
1,212.7
2,953.8
692.7
720.3
438.8
750.2
3,048.8
718.1
1,260.4
3,002.2
688.9
722.7
446.7
759.7
3,094.2
727.2
1,313.7
3,098.8
705.8
744.0
475.3
774.5
3,175.2
746.1
1,352.5
3,180.3
721.2
743.3
484.6
776.6
3,276.7
759.8
1,392.2
3,260.7
743.7
758.3
513.6
799.8
3,359.7
764.7
1,461.6
3,305.1
745.0
771.4
543.1
816.8
3,396.5
769.3
1,505.5
3,365.0
761.0
786.2
561.1
831.7
3,473.1
780.3
1,543.2
3,435.1
775.3
792.0
571.4
826.0
U.S. government securities
State and local obligations
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans
Flow of Funds
1.60
A45
SUMMARY OF CREDIT MARKET CLAIMS, BY HOLDER
Billions of dollars, except as noted; period-end levels.
1988
Transaction category, or sector
1 Total funds advanced in credit markets to domestic
nonfinancial sectors
1984
1985
1986
1989
1987
Ql
Q2
Q3
Q4
Ql
Q2
Q3
5,951.8
6,795.1
7,631.2
8,335.0
8,477.0
8,686.9
8,875.4
9,105.6
9,258.7
9,428.4
9,604.5
1,257.7
377.9
423.5
74.6
381.6
1,460.5
423.8
518.2
88.8
429.7
1,794.7
493.2
712.3
108.6
480.5
2,044.9
563.3
862.0
133.1
486.6
2,099.4
595.7
880.6
129.5
493.6
2,151.3
610.1
906.1
134.8
500.3
2,191.8
613.3
934.9
141.6
502.1
2,266.4
648.3
966.0
152.8
499.3
2,332.1
666.2
995.3
163.8
506.9
2,345.1
644.6
1,020.5
161.9
518.1
2,414.3
670.7
1,062.6
151.1
529.8
7 Total held, by type of lender
8 U.S. government
Sponsored credit agencies and mortgage pools . . .
9
10 Monetary authority
11 Foreign
1,257.7
228.2
556.3
167.6
305.6
1,460.5
246.7
659.8
186.0
367.9
1,794.7
253.3
869.8
205.5
466.1
2,044.9
238.0
1,048.9
230.1
527.9
2,099.4
237.1
1,068.0
224.9
569.5
2,151.3
235.8
1,095.6
229.7
590.2
2,191.8
226.3
1,132.9
230.8
601.9
2,266.4
216.9
1,178.6
240.6
630.3
2,332.1
213.9
1,223.5
235.4
659.3
2,345.1
215.2
1,228.9
238.4
662.6
2,414.3
216.9
1,275.3
227.6
694.5
Agency and foreign debt not in line 1
Sponsored credit agencies and mortgage pools . . .
Foreign
531.2
233.6
632.7
234.7
844.2
236.4
1,026.5
242.9
1,050.6
244.6
1,076.9
245.9
1,116.3
246.1
1,164.0
249.6
1,209.0
249.9
1,235.8
249.0
1,273.8
255.3
Private domestic holdings
14 Total private holdings
15
U.S. government securities
16 State and local obligations
17 Corporate and foreign bonds
18 Residential mortgages
19 Other mortgages and loans
LESS: Federal Home Loan Bank advances
20
5,458.9
1,524.9
520.0
476.8
1,096.5
1,915.3
74.6
6,202.1
1,803.2
655.5
517.6
1,185.1
2,129.7
88.8
6,917.1
2,160.6
679.1
601.3
1,254.7
2,330.0
108.6
7,559.5
2,418.5
713.2
689.6
1,351.1
2,520.1
133.1
7,672.7
2,453.1
718.1
722.2
1,370.4
2,538.5
129.5
7,858.4
2,484.1
727.2
752.9
1,425.9
2,603.3
134.8
8,045.9
2,561.9
746.1
775.7
1,464.1
2,639.6
141.6
8,252.8
2,628.4
759.8
794.0
1,494.9
2,728.4
152.8
8,385.5
2,693.5
764.7
817.6
1,512.2
2,761.3
163.8
8,568.1
2,751.9
769.3
849.3
1,537.3
2,822.2
161.9
8,719.2
2,802.3
780.3
875.1
1,553.5
2,859.1
151.1
Private financial intermediation
21 Credit market claims held by private financial
institutions
7,7 Commercial banking
73
Savings institutions
24
Insurance and pension funds
Other finance
25
4,699.6
1,791.9
1,100.7
1,215.3
591.7
5,283.1
1,978.9
1,191.2
1,369.7
743.4
6,025.7
2,176.3
1,297.9
1,544.3
1,007.1
6,604.6
2,313.1
1,445.5
1,755.2
1,090.7
6,732.0
2,327.1
1,453.6
1,810.6
1,140.7
6,891.0
2,382.6
1,495.9
1,859.0
1,153.5
7,003.5
2,421.6
1,538.8
1,899.1
1,144.0
7,168.1
2,468.4
1,571.3
1,950.2
1,178.1
7,298.7
2,490.9
1,566.7
1,996.7
1,244.4
7,458.7
2,538.2
1,557.3
2,046.5
1,316.7
7,543.1
2,580.2
1,522.8
2,083.7
1,356.5
76 Sources of funds
27
Private domestic deposits and RPs
Credit market debt
28
4,699.6
2,715.6
479.0
5,283.1
2,930.0
580.5
6,025.7
3,188.4
719.5
6,604.6
3,324.8
859.0
6,732.0
3,404.2
875.4
6,891.0
3,432.6
923.6
7,003.5
3,474.2
941.9
7,168.1
3,554.2
985.7
7,298.7
3,587.8
1,049.7
7,458.7
3,644.5
1,063.1
7,543.1
3,710.6
1,062.9
79
1,504.9
-14.1
15.5
1,160.8
342.6
1,772.7
5.6
25.8
1,289.4
451.8
2,117.9
18.6
27.5
1,427.9
643.9
2,420.8
62.2
21.6
1,597.2
739.6
2,452.4
45.9
23.5
1,647.9
735.2
2,534.8
62.3
32.6
1,693.8
746.1
2,587.4
51.9
34.2
1,729.2
772.1
2,628.1
71.6
29.0
1,771.2
756.4
2,661.1
61.9
13.5
1,802.6
783.0
2,751.0
51.0
34.4
1,833.7
831.9
2,769.6
53.7
32.4
1,853.9
829.6
Private domestic nonfinancial investors
34 Credit market claims
35
U.S. government securities
36 Tax-exempt obligations
37 Corporate and foreign bonds
Open market paper
38
Other
39
1,238.4
659.5
194.2
33.1
83.5
268.0
1,499.5
814.7
231.9
38.0
131.0
283.8
1,610.8
899.1
211.2
77.8
136.4
286.2
1,813.9
992.0
256.8
102.2
160.7
302.3
1,816.1
1,005.2
257.6
97.7
151.9
303.7
1,891.0
1,022.1
270.1
105.7
179.9
313.3
1,984.4
1,086.1
289.0
107.1
188.7
313.6
2,070.5
1,143.5
303.7
100.8
201.0
321.5
2,136.6
1,175.0
307.2
137.0
213.0
304.3
2,172.6
1,196.3
308.2
136.4
221.7
309.9
2,239.0
1,239.6
312.4
150.0
221.4
315.5
40 Deposits and currency
41
Currency
Checkable deposits
47
43
Small time and savings accounts
Money market fund shares
44
45
Large time deposits
Security RPs
I
46
47
Deposits in foreign countries
2,895.8
159.6
380.6
1,693.4
218.5
332.5
90.6
20.6
3,120.4
171.9
422.5
1,831.9
227.3
339.9
108.3
18.5
3,399.2
186.3
517.4
1,948.3
265.6
328.5
128.5
24.5
3,553.9
205.4
514.0
2,017.1
292.8
355.2
145.7
23.7
3,628.0
204.0
495.4
2,084.9
318.4
353.7
151.9
19.9
3,662.4
209.9
510.3
2,110.9
306.1
349.1
156.2
19.9
3,704.4
213.4
496.1
2,131.1
303.6
384.7
158.6
16.8
3,785.9
220.1
525.4
2,150.4
315.6
396.0
166.9
11.6
3,822.8
220.7
492.8
2,164.7
340.3
415.9
174.1
14.3
3,887.9
226.4
496.4
2,186.7
359.9
423.1
178.4
17.0
3,945.9
225.0
497.3
2,219.0
389.2
421.2
183.9
10.3
48 Total of credit market instruments, deposits, and
currency
4,134.2
4,619.9
5,010.0
5,367.8
5,444.2
5,553.5
5,688.8
5,856.4
5,959.4
6,060.4
6,184.9
24.1
87.7
615.3
24.1
87.7
652.5
24.0
87.0
653.8
24.2
86.9
701.9
24.5
87.0
721.2
24.2
87.1
713.6
24.5
86.5
748.1
?
3
4
5
6
12
13
30
31
32
33
By public agencies and foreign
Total held
U.S. government securities
Residential mortgages
FHLB advances to thrifts
Other loans and securities
Other sources
Foreign funds
Treasury balances
Insurance and pension reserves
Other, net
Public holdings as percent of total
Private financial intermediation (in percent)
Total foreign funds
20.3
86.1
291.5
20.8
85.2
373.5
22.8
87.1
484.7
23.8
87.4
590.2
MEMO: Corporate equities not included above
52 Total market value
2,157.9
2,823.9
3,360.6
3,325.0
3,504.0
3,622.7
3,577.6
3,620.3
3,731.6
4,072.3
4,296.0
53
54
Mutual fund shares
Other equities
136.7
2,021.2
240.2
2,583.7
413.5
2,947.1
460.1
2,864.9
479.2
3,024.8
486.8
3,136.0
478.1
3,099.5
478.3
3,142.0
486.3
3,245.3
514.8
3,557.5
538.5
3,757.5
55
Holdings by financial institutions
Other holdings
615.6
1,542.3
800.0
2,023.9
972.1
2,388.4
1,013.8
2,311.2
1,112.6
2,391.3
1,170.0
2,452.8
1,167.1
2,410.5
1,200.4
2,419.9
1,277.7
2,453.9
1,395.7
2,676.6
1,523.6
2,772.4
49
50
51
56
NOTES BY LINE NUMBER.
1. Line 1 of table 1.59.
2. Sum of lines 3 - 6 or 7-10.
6. Includes farm and commercial mortgages.
12. Credit market debt of federally sponsored agencies, and net issues of
federally related mortgage pool securities.
14. Line 1 less line 2 plus line 12 and 13. Also line 21 less line 28 plus line 34.
Also sum of lines 29 and 48 less lines 41 and 47.
19. Includes farm and commercial mortgages.
27. Line 40 less lines 41 and 47.
28. Excludes equity issues and investment company shares. Includes line 20.
30. Foreign deposits at commercial banks plus bank borrowings from foreign
affiliates, less claims on foreign affiliates and deposits by banking in foreign banks.
31. Demand deposits and note balances at commercial banks.
32. Excludes net investment of these reserves in corporate equities.
33. Mainly retained earnings and net miscellaneous liabilities.
34. Line 14 less line 21 plus line 28.
35-39. Lines 15-19 less amounts acquired by private finance plus amounts
borrowed by private finance. Line 39 includes mortgages.
41. Mainly an offset to line 10.
48. Lines 34 plus 40, or line 14 less line 29 plus 41 and 47.
49. Line 2/line 1 and 13.
50. Line 2 Mine 14.
51. Sum of lines 11 and 30.
52-54. Includes issues by financial institutions.
NOTE. Full statements for sectors and transaction types in flows and in amounts
outstanding may be obtained from Flow of Funds Section, Stop 95, Division of
Research-and Statistics, Board of Governors of the Federal Reserve System,
Washington, D.C. 20551.
A46
D o m e s t i c N o n f i n a n c i a l Statistics
2.10 NONFINANCIAL BUSINESS ACTIVITY
•
April 1990
Selected Measures1
1977 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted.
1989
Measure
1987
1988
1990
1989
May
June
July
Aug.
Sept.
Oct.
Nov.'
Dec.'
Jan.
1 Industrial production
129.8
137.2
n.a.
141.6
142.0
141.9
142.5
142.3
141.8
142.2
142.5
140.9
Market groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials
138.3
136.8
127.7
148.8
143.3
118.3
145.9
144.3
133.9
158.2
151.5
125.3
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
151.7
150.4
139.2
165.4
156.3
127.9
152.5
151.2
139.9
166.1
157.0
127.7
151.8
150.2
138.7
165.5
157.5
128.3
152.5
151.1
139.3
166.8
157.5
128.8
152.4
150.8
139.0
166.5
157.8
128.6
151.5
149.4
140.2'
161.7'
158.6'
128.7'
152.3
150.2
140.5
163.2
159.5
128.4
153.5
151.5
141.4
164.9
160.3
127.6
151.3
148.8
138.2
162.9
159.9
126.6
134.6
142.8
n.a.
148.1
148.7
148.5
149.2
148.8
148.0
148.5
148.6
147.2
81.1
80.5
83.5
83.7
83.9'
83.7
84.3
83.8
84.4
83.6
84.0
83.7
84.2
83.9
83.7
83.6
83.1
83.5
83.1
83.2
82.9
82.5
81.9
81.7
2
3
4
5
6
7
Industry
groupings
8 Manufacturing
Capacity utilization (percent) 2
9
Manufacturing
Industrial materials industries
10
11 Construction contracts (1982 = 100)3
163.8
160.8
160.8'
159.0
157.0
163.0
160.0
175.0
165.0
158.0
160.0
154.0
12
13
14
15
16
17
18
19
20
21
Nonagricultural employment, total 4
Goods-producing, total
Manufacturing, total
Manufacturing, production- worker . . .
Service-producing
Personal income, total
Wages and salary disbursements
Manufacturing
Disposable personal income
Retail sales®
123.9
101.5
96.7
91.9
133.3
235.0
226.3
183.8
232.4
210.8
128.0
103.7
98.6
93.9
138.2
252.8
244.4
196.5
252.1
225.2'
131.6
105.3
99.6
94.8
142.7
275.5
264.8
207.3
274.0
237.5
131.3
105.5
99.9
95.0
142.2
273.5
262.0
205.8
271.7
237.4
131.7
105.4
99.8
94.8
142.7
274.8
263.8
207.0
273.8
237.3
131.9
105.4
99.8
94.8
143.0
276.4
266.1
207.5
275.4
239.1
132.0
105.5
99.8
94.8
143.1
277.3
266.7
208.8
276.1
241.3
132.3
105.2
99.4
94.2
143.6
277.9
268.5
208.8
276.5
242.0
132.4
105.2
99.2
94.1
143.8
280.3
271.4
211.1
278.7
238.9
132.7
105.2
99.1
93.9
144.2
282.9
271.6
208.9
281.6
240.5
132.8
104.9
99.0
93.8
144.5
284.2
273.3
209.8
282.7
239.9
133.2
104.9
98.4
93.0
145.0
n.a.
n.a.
n.a.
n.a.
243.8
22
23
Prices 7
Consumer (1982-84 = 100)
Producer finished goods (1982 = 100) . . .
113.6
105.4
118.3
108.0
124.0
113.5
123.8
114.2
124.1
114.3
124.4
114.1
124.6
113.4
125.0
113.6'
125.6
114.8
125.9
114.8
126.1
115.3
127.4
117.5
1. A major revision of the industrial production index and the capacity
utilization rates was released in July 1985. See " A Revision of the Index of
Industrial Production" and accompanying tables that contain revised indexes
(1977 = 100) through December 1984 in the Federal Reserve Bulletin, vol. 71 (July
1985), pp. 487-501. The revised indexes for January through June 1985 were
shown in the September Bulletin.
2. Ratios of indexes of production to indexes of capacity. Based on data from
Federal Reserve, McGraw-Hill Economics Department, Department of Commerce, and other sources.
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).
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.
NOTE. 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.
Selected Measures
2.11
hAl
LABOR FORCE, EMPLOYMENT, A N D U N E M P L O Y M E N T
Thousands of persons; monthly data are seasonally adjusted. Exceptions noted.
1989
Category
1987
1988
1990
1989
June
July
Aug.
Sept.
Oct.
Nov.
Dec.'
Jan.
HOUSEHOLD SURVEY DATA
1 Noninstitutional population 1
185,010
186,837
188,601
188,518
188,672
188,808
188,948
189,096
189,238
189,381
189,506
2 Labor force (including Armed Forces) 1
3 Civilian labor force
Employment
4
Nonagricultural industries
5
Agriculture
Unemployment
Number
6
7
Rate (percent of civilian labor force) . . . .
8 Not in labor force
122,122
119,865
123,893
121,669
126,077
123,869
126,300
124,111
126,202
124,013
126,280
124,070
126,245
124,023
126,373
124,148
126,709
124,488
126,762
124,546
126,610
124,397
109,232
3,208
111,800
3,169
114,142
3,199
114,404
3,138
114,219
3,217
114,275
3,275
114,200
3,219
114,388
3,197
114,676
3,160
114,691
3,197
114,728
3,134
7,425
6.2
62,888
6,701
5.5
62,944
6,528
5.3
62,524
6,569
5.3
62,218
6,577
5.3
62,470
6,520
5.3
62,528
6,604
5.3
62,703
6,563
5.3
62,723
6,652
5.3
62,529
6,658
5.3
62,619
6,535
5.3
62,896
102,200
105,584
108,573
108,607
108,767
108,887
109,096
109,171
109,452'
109,548
109,823
19,024
717
4,967
5,372
24,327
6,547
24,236
17,010
19,403
721
5,125
5,548
25,139
6,676
25,600
17,372
19,611
722
5,302
5,703
25,807
6,814
26,889
17,726
19,650
715
5,283
5,716
25,781
6,808
26,931
17,723
19,649
706
5,314
5,736
25,823
6,815
26,973
17,751
19,644
729
5,321
5,618
25,877
6,836
27,058
17,804
19,559
730
5,325
5,709
25,896
6,852
27,159
17,866
19,537
731
5,335
5,729
25,957
6,851
27,188
17,843
19,517'
737
5,355'
5,753'
26,044'
6,871'
27,345'
17,830'
19,489
739
5,305
5,832
26,022
6,882
27,416
17,863
19,377
740
5,409
5,859
26,163
6,892
27,522
17,861
ESTABLISHMENT SURVEY DATA
9 Nonagricultural payroll employment 3
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 Labor).
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
workers, and members of the Armed Forces. Data are adjusted to the March 1984
benchmark and only seasonally adjusted data are available at this time. Based on
data from Employment and Earnings (U.S. Department of Labor).
A48
Domestic Nonfinancial Statistics • April 1990
2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1
Seasonally adjusted
1989
1989
1989
Series
Q1
Q2
Q3
Q4'
Output (1977 = 100)
Q1
Q2
Q4
Q3
Q1
Capacity (percent of 1977 output)
Q2
Q3
Q4'
Utilization rate (percent)
1 Total industry
140.7
141.8
142.2
142.2
167.5
168.7
169.9
171.1
84.0
84.1
83.7
83.1
2 Mining
101.8
116.0
102.0
102.7
113.9
103.8
125.1
141.0
124.7
141.4
124.3
123.8
142.0
81.3
81.8
81.8
82.6
80.4
83.8
83.0
174.3
175.7
84.4
84.0
83.0
147.8
192.6
86.4
82.9
85.6
81.9
3 Utilities
147.0
4 Manufacturing
5 Primary processing
127.8
158.6
6 Advanced processing
7 Materials
8 Durable goods
9
Metal materials
10 Nondurable goods
11 Textile, paper, and chemical
12
Paper
13 Energy
Chemical
14
materials
Previous cycle
High
Low
115.7
148.3
148.8
117.9
148.4
127.6
160.8
128.8
160.9
128.7
160.3
146.5
191.0
127.6
127.9
128.6
128.2
151.7
138.6
98.4
136.3
139.2
148.4
145.4
139.0
96.0
137.1
139.8
146.1
145.7
140.4
97.8
137.9
141.1
149.8
146.5
138.5
93.1
138.0
140.6
151.6
145.9
170.1
110.2
152.7
153.5
154.0
161.4
100.7
100.7
99.8
101.7
118.4
Latest cycle
High
Low
141.7
84.4
149.1
194.2
150.4
195.8
87.3
83.0
86.4
83.5
152.6
153.5
154.4
84.1
83.9
83.8
83.0
171.3
110.6
154.2
155.3
155.8
163.7
172.5
111.0
155.8
157.0
157.6
165.9
173.7
111.4
157.4
158.8
159.4
168.2
81.5
83.8
89.3
90.7
96.4
90.1
81.1
81.4
88.9
90.0
93.8
89.0
81.4
82.3
88.5
89.8
95.1
88.3
79.7
78.1
87.7
88.5
95.1
86.7
118.3
118.1
118.0
85.0
85.1
84.5
86.2
1989
Jan.
178.7
177.2
82.3
1989
May
June
July
Aug.
1990
Sept.
Oct/
Nov/
Dec/
Jan.
Capacity utilization rate (percent)
15 Total industry
88.6
72.1
86.9
69.5
84.3
84.0
84.0
83.7
83.9
83.6
83.1
83.1
83.1
81.9
16 Mining
17 Utilities
92.8
95.6
87.8
82.9
95.2
88.5
76.9
78.0
82.2
80.9
81.8
81.8
81.5
80.8
82.1
80.5
82.4
80.0
83.4
80.8
84.2
81.4
84.4
81.3
82.8
86.4
84.7
77.1
18 Manufacturing
87.7
69.9
86.5
68.0
84.7
84.3
84.4
84.0
84.2
83.7
83.1
83.1
82.9
81.9
19 Primary processing
91.9
86.0
68.3
71.1
89.1
85.1
65.0
69.5
88.4
83.1
86.2
83.4
86.2
83.5
86.7
82.9
86.6
85.8
82.6
86.2
81.6
85.6
81.9
84.9
82.1
84.9
80.7
92.0
70.5
89.1
68.5
84.6
83.8
83.6
83.7
83.6
83.5
83.2
82.5
81.7
91.8
99.2
91.1
64.4
67.1
66.7
89.8
93.6
88.1
60.9
45.7
70.7
82.1
86.1
90.1
81.0
79.8
88.7
81.1
80.6
88.7
81.3
82.3
89.2
81.7
82.7
88.8
81.2
81.9
87.5
80.3
81.5
88.3
79.9
77.7
87.7
78.9
74.9
87.1
78.2
77.3
86.7
92.8
98.4
92.5
64.8
70.6
64.4
89.4
97.3
87.9
68.8
79.9
63.5
91.5
98.1
90.7
89.6
93.2
88.4
89.8
93.7
88.5
90.6
95.0
89.5
90.1
95.1
88.6
88.8
95.1
86.7
89.4
96.4
87.4
88.5
94.7
86.9
87.8
94.2
85.9
87.1
94.6
86.9
94.0
82.3
84.9
85.5
83.8
83.9
84.3
85.4
86.1
86.3
86.2
84.8
20 Advanced processing..
21 Materials
22 Durable goods
23
Metal materials ,
24 Nondurable goods
25 Textile, paper, and
chemical
26
Paper
28 Energy materials..
1. These data also appear in the Board's G.3 (402) release. For address, see
inside front cover.
83.2
83.9
2. Monthly high 1973; monthly low 1975.
3. Monthly highs 1978 through 1980; monthly lows 1982.
Selected Measures hAl
2.13 INDUSTRIAL PRODUCTION
Indexes and Gross Value1
Monthly data are seasonally adjusted
Groups
1977
proportion
1989
1990
1989
avg.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct/
Nov.
Dec.
p
Jan/
Index (1977 = 100)
MAJOR MARKET
100.00
140.8
140.5
140.7
141.7
141.6
142.0
141.9
142.5
142.3
141.8
142.2
142.5
140.9
57.72
44.77
25.52
19.25
12.94
42.28
150.1
148.2
138.5
161.1
156.6
128.1
150.0
148.6
138.7
161.6
155.1
127.4
150.5
148.9
138.4
162.8
156.1
127.3
151.6
150.2
139.5
164.3
156.5
128.2
151.7
150.4
139.2
165.4
156.3
127.9
152.5
151.2
139.9
166.1
157.0
127.7
151.8
150.2
138.7
165.5
157.5
128.3
152.5
151.1
139.3
166.8
157.5
128.8
152.4
150.8
139.0
166.5
157.8
128.6
151.5
149.4
140.2
161.7
158.6
128.7
152.3
150.2
140.5
163.2
159.5
128.4
153.5
151.5
141.4
164.9
160.3
127.6
151.3
148.8
138.2
162.9
159.9
126.6
6.89
2.98
1.79
1.16
.63
1.19
3.91
1.24
1.19
.96
1.71
131.5
132.5
135.6
99.6
202.3
127.9
130.7
151.0
149.5
141.1
110.1
131.6
131.6
133.1
96.0
201.9
129.4
131.6
153.9
153.0
141.3
110.1
130.1
128.9
128.3
95.0
190.0
129.8
131.1
151.6
152.3
140.7
110.9
132.2
131.7
131.7
98.8
192.8
131.7
132.6
151.7
152.5
142.8
113.0
131.2
128.6
127.4
96.0
185.5
130.4
133.3
151.3
151.4
144.3
114.1
130.8
125.6
123.3
91.4
182.5
129.1
134.8
155.6
155.0
143.1
115.0
127.3
120.2
114.6
81.2
176.7
128.7
132.7
148.1
147.0
141.3
116.8
128.7
122.3
119.3
86.4
180.5
126.7
133.5
152.1
149.4
139.8
116.6
127.9
120.6
117.1
92.7
162.4
125.9
133.4
151.9
148.3
139.9
116.5
127.9
119.2
113.1
91.5
153.3
128.3
134.4
151.7
147.3
141.9
117.8
127.4
120.3
114.7
84.3
171.2
128.8
132.8
145.0
142.3
142.9
118.2
128.5
123.6
118.3
84.2
181.7
131.4
132.2
142.0
137.9
144.2
118.4
119.7
99.5
78.5
56.1
120.2
131.1
135.0
149.8
19 Nondurable consumer goods
Consumer staples
20
21
Consumer foods and tobacco
22
Nonfood staples
Consumer chemical products
23
24
Consumer paper products
25
Consumer energy
26
Consumer fuel
27
Residential utilities
18.63
15.29
7.80
7.49
2.75
1.88
2.86
1.44
1.42
141.1
149.4
144.8
154.2
187.6
174.2
109.1
96.7
121.7
141.4
149.7
144.3
155.4
187.8
177.0
110.1
95.0
125.4
141.4
149.9
143.3
156.9
188.9
180.4
110.7
95.6
126.1
142.2
150.7
144.7
156.9
187.3
180.9
112.0
97.3
127.0
142.1
150.7
144.7
156.9
189.1
180.9
110.1
93.6
127.0
143.3
151.9
145.7
158.4
191.0
183.6
110.7
95.6
126.1
142.8
151.4
144.2
158.9
193.1
183.0
110.4
97.0
124.0
143.2
152.0
145.6
158.7
192.5
184.7
109.2
96.0
122.7
143.1
151.8
145.9
157.9
187.9
186.6
110.3
95.7
125.1
144.7
153.8
147.9
160.0
192.0
188.3
110.8
96.1
125.8
145.3
154.8
149.1
160.7
190.7
192.3
111.1
95.7
126.8
146.1
156.0
149.3
162.9
191.5
193.1
115.7
94.8
145.1
154.7
Equipment
28 Business and defense equipment
29
Business equipment
30
Construction, mining, and farm
31
Manufacturing
32
Power
Commercial
33
34
Transit
35
Defense and space equipment
18.01
14.34
2.08
3.27
1.27
5.22
2.49
3.67
167.1
163.8
74.3
136.3
92.8
252.4
125.7
180.0
167.9
165.0
75.6
137.8
92.7
254.3
125.2
179.3
168.9
166.3
76.9
138.6
93.0
257.6
123.9
178.7
170.3
167.8
77.6
139.7
93.6
260.1
124.8
179.9
171.5
169.1
76.3
140.9
93.3
263.2
125.3
180.7
172.0
169.6
74.8
142.8
92.5
264.5
124.8
181.1
171.3
168.5
73.0
143.8
92.8
263.8
120.1
182.0
172.5
169.9
72.1
143.5
94.2
265.6
124.4
182.7
172.1
169.6
74.7
143.1
93.8
265.1
122.2
182.1
167.1
164.8
75.2
142.0
94.8
259.3
107.7
176.0
168.6
166.6
75.4
141.8
95.1
262.4
111.2
176.6
170.6
168.8
76.4
141.6
94.7
263.4
121.5
177.7
168.3
165.9
77.5
142.1
95.0
261.3
107.4
177.7
5.95
6.99
5.67
1.31
142.3
168.8
175.9
138.2
139.5
168.4
175.4
138.3
139.3
170.4
177.4
140.3
140.2
170.4
177.9
138.0
140.2
170.0
177.3
138.2
141.2
170.4
177.9
138.4
142.2
170.6
177.8
139.6
141.5
171.2
178.8
138.1
140.9
172.3
180.1
138.5
142.6
172.3
179.9
139.5
143.9
172.8
181.0
137.5
143.7
174.4
181.6
143.2
144.0
20.50
4.92
5.94
9.64
4.64
139.4
111.7
175.2
131.5
100.8
138.6
112.1
175.2
129.7
98.4
137.9
110.7
175.3
128.8
95.9
139.0
110.8
176.9
130.0
98.0
138.7
111.8
177.1
128.9
94.4
139.4
111.6
177.5
130.0
95.5
139.9
109.9
179.1
131.0
97.7
140.9
111.9
180.0
131.6
98.4
140.4
110.7
179.6
131.4
97.4
139.2
108.9
177.6
131.1
96.4
138.9
108.4
179.1
129.6
92.7
137.5
105.7
179.0
128.1
90.2
136.6
100.4
179.0
128.9
93.1
1
Total index
2 Products
Final products
3
4
Consumer goods
Equipment
5
Intermediate products
6
7 Materials
Consumer goods
8 Durable consumer goods
Automotive products
9
10
Autos and trucks
11
Autos, consumer
12
Trucks, consumer
Auto parts and allied goods
13
14 Home goods
15
Appliances, A/C and TV
16
Appliances and TV
17
Carpeting and furniture
18
Miscellaneous home goods
Intermediate products
36 Construction supplies
37 Business supplies
38
General business supplies
Commercial energy products
39
Materials
40 Durable goods materials
41
Durable consumer parts
42
Equipment parts
Durable materials n.e.c
43
44
Basic metal materials
160.2
107.5
45 Nondurable goods materials
46
Textile, paper, and chemical
materials
47
Textile materials
Pulp and paper materials
48
Chemical materials
49
50
Miscellaneous nondurable materials . . .
10.09
137.1
135.9
136.0
137.1
136.8
137.3
138.5
138.3
136.7
138.4
138.0
137.5
137.4
7.53
1.52
1.55
4.46
2.57
139.9
112.1
150.4
145.7
129.1
138.6
110.7
147.5
145.0
128.0
139.0
111.8
147.3
145.4
127.2
140.3
114.6
146.7
146.8
127.8
139.1
116.4
145.2
144.7
129.9
140.0
117.2
146.5
145.5
129.4
141.8
116.4
149.1
147.9
129.0
141.5
117.0
149.9
147.0
128.9
140.0
115.6
150.5
144.6
127.3
141.4
115.1
153.1
146.3
129.8
140.5
113.3
151.0
146.2
130.6
139.9
113.6
150.7
145.2
139.5
51 Energy materials
52
Primary energy
Converted fuel materials
53
11.69
7.57
4.12
100.5
105.2
92.0
100.5
104.4
93.3
101.0
103.7
96.1
101.7
104.1
97.4
101.1
104.6
94.7
99.1
103.0
92.0
99.1
103.2
91.6
99.5
104.2
91.0
100.9
105.6
92.2
101.7
107.0
91.9
101.9
107.0
92.5
101.7
104.9
95.7
100.0
A50
Domestic Nonfinancial Statistics • April 1990
2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued
Groups
SIC
code
1977
proportion
1990
1989
avg.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct. r
Nov.
Dec. p
Index (1977 = 100)
MAJOR INDUSTRY
15.79
9.83
5.96
84.21
35.11
49.10
107.2
103.0
114.0
147.2
148.5
146.2
106.8
100.9
116.5
146.8
148.1
145.9
107.5
101.5
117.5
147.0
148.6
145.8
107.9
102.4
117.1
148.0
149.6
146.9
107.2
102.0
115.6
148.1
149.5
147.1
106.3
101.5
114.3
148.7
150.5
147.4
106.6
114.0
148.5
150.8
146.8
106.5
102.4
113.3
149.2
151.1
147.8
107.7
103.5
114.5
148.8
151.1
147.2
108.6
104.4
115.6
148.0
152.4
144.9
108.7
104.5
115.5
148.5
152.7
145.5
.50
1.60
7.07
.66
106.9
144.7
88.9
150.8
98.6
134.7
89.5
142.5
98.1
137.7
89.6
143.5
96.8
145.5
89.1
144.5
94.0
137.1
90.5
146.6
101.2
129.2
90.6
150.2
106.2
130.2
90.8
152.1
103.7
135.4
90.3
151.5
104.3
144.2
90.0
148.8
104.0
144.4
90.9
151.8
104.4
144.4
91.2
151.1
138.3
89.7
153.6
7.96
.62
2.29
2.79
3.15
146.6
105.0
120.2
110.2
153.8
146.3
104.7
119.4
146.6
109.2
122.5
111.3
150.7
147.2
105.9
123.6
111.5
150.1
147.9
104.2
123.8
111.9
150.2
147.3
97.1
123.5
111.4
152.4
148.3
99.9
123.2
148.8
97.3
123.2
151.7
152.8
153.4
150.3
99.2
123.5
110.0
155.5
151.6
151.7
145.4
101.5
119.7
109.9
151.7
121.5
109.3
153.5
122.3
108.2
154.1
4.54
8.05
2.40
194.6
158.5
96.3
175.0
62.9
198.5
159.2
97.0
176.4
61.2
200.1
159.3
97.3
178.0
61.4
199.0
158.2
96.9
180.5
60.3
200.5
159.9
97.9
182.3
60.5
199.9
200.6
161.5
97.7
183.6
.53
193.0
159.0
98.0
175.9
62.9
60.2
203.1
159.3
98.4
184.2
60.4
204.8
161.3
98.1
186.0
60.0
206.8
162.1
98.2
185.2
57.5
207.7
161.6
95.5
184.1
55.6
24
25
32
2.30
1.27
2.72
139.9
166.3
126.6
132.8
164.8
125.4
133.4
165.8
125.5
135.1
168.0
124.7
135.5
170.2
123.9
137.2
170.8
123.9
136.9
169.0
122.9
136.5
168.0
123.9
135.7
167.6
123.4
137.4
167.5
123.6
138.9
167.9
124.3
139.0
168.5
123.6
33
331.2
34
35
36
5.33
3.49
6.46
9.54
7.15
93.2
82.2
124.5
178.7
180.9
91.1
79.1
124.5
90.1
77.0
123.1
184.7
182.2
87.2
73.2
124.8
186.5
181.6
87.3
72.9
125.2
187.5
181.9
89.2
75.4
125.4
186.7
181.4
90.3
75.9
125.5
187.8
183.7
89.2
75.4
124.4
182.7
89.0
76.4
124.1
184.1
182.2
85.1
72.0
125.4
187.5
181.3
83.0
70.2
124.7
181.7
88.4
75.9
123.8
183.0
181.6
180.9
123^4
186.6
181.9
29 Transportation equipment
37
30
Motor vehicles and parts
371
31
Aerospace and miscellaneous
transportation equipment.. 372-6.9
32 Instruments
38
33 Miscellaneous manufactures
39
9.13
5.25
136.7
124.9
136.4
123.4
134.8
120.4
136.4
122.0
135.5
119.7
134.2
116.4
131.3
110.4
133.2
114.2
131.9
112.7
123.9
110.1
125.1
110.4
128.6
110.7
115.1
87.0
3.87
2.66
1.46
152.7
161.0
111.8
154.0
161.3
107.6
154.4
161.8
110.0
155.9
163.0
114.5
157.1
164.3
114.7
158.4
165.7
117.1
159.6
166.0
119.6
159.0
164.1
118.5
157.9
163.1
119.2
142.7
162.5
122.9
145.2
161.9
125.5
152.9
160.8
127.3
153.3
161.6
131.0
135.3
137.0
137.1
135.8
135.5
136.8
1 Mining and utilities .
2
Mining
3
Utilities
4 Manufacturing
5
Nondurable
6
Durable
7
8
9
10
Mining
Metal
Coal
Oil and gas extraction
Stone and earth minerals.
11
12
13
14
15
Nondurable
manufactures
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
16
17
18
19
20
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastic products .
Leather and products
Durable
manufactures
21 Lumber and products
22 Furniture and fixtures
23 Clay, glass, and stone products
24
25
26
27
28
Primary metals
Iron and steel
Fabricated metal products.
Nonelectrical machinery . .
Electrical machinery
10
11.12
13
14
2.80
Utilities
34 Electric .
110.2
180.8
102.1
162.2
98.3
182.3
60.8
111.1
111.2
188.2
110.1
102.4
122.8
148.6
152.4
145.9
188.2
106.5
104.6
109.6
147.2
152.7
143.3
153.3
209.0
99^0
84.8
129.6
Gross value (billions of 1982 dollars, annual rates)
MAJOR MARKET
35 Products, total
517.5
1,885.1 1,879.2 1,878.0 1,893.9 1.885.5 1,886.2 1,868.0 1,875.4 1,874.8 1,875.0 1,883.8 1,895.8 1.849.8
36 Final
37
Consumer goods
38
Equipment
39 Intermediate
405.7
272.7
133.0
1,447.5 1,449.6 1,442.8 1,460.4 1.449.6 1,450.2 1,430.0 1,438.1 1,436.5 1,432.7 1,439.4 1,451.2 1.406.9
935.6 934.3 928.0 939.4 928.5 929.3 915.5 919.9 917.7 926.2 930.6 939.4 908.5
511.9 515.2 514.8 521.1 521.1
520.9 514.5 518.2 518.8 506.5 508.8 511.8 498.4
437.7 429.6 435.3 433.5 435.9 436.0 438.0 437.3 438.3 442.3 444.4 444.6 443.0
111.9
1. These data also appear in the Board's G. 12.3 (414) release. For address, see
inside front cover.
A major revision of the industrial production index and the capacity
utilization rates was released in July 1985. See " A Revision of the Index of
Industrial Production" and accompanying tables that contain revised indexes
(1977=100) through December 1984 in the Federal Reserve Bulletin, vol. 71 (July
1985), pp. 487-501. The revised indexes for January through June 1985 were
shown in the September Bulletin.
Selected Measures hAl
2.14
HOUSING A N D CONSTRUCTION
Monthly figures are at seasonally adjusted annual rates except as noted.
1989
Item
1987
1988
1989
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.'
Nov.'
Dec.
Private residential real estate activity (thousands of units)
N E W UNITS
1 Permits authorized
2
1-family
3 2-or-more-family
1,535
1,024
511
1,456
994
462
1,332
934
398
1,230
870
360
1,334
954
380
1,347
905
442
1,308
874
434
1,281
906
375
1,328
927
401
1,319
946
373
1,356
961
395
1,342
979
363
1,376
970
406
4 Started
1-family
2-or-more-family
1,621
1,146
474
1,488
1,081
407
1,374
1,002
373
1,405'
979'
426'
1,341'
1,028'
313'
1,308
977
331
1,414'
971'
443'
1,424'
1,029'
395'
1,325'
987'
338'
1,263'
969'
294'
1,423
1,023
400
1,347
1,010
337
1,254
911
343
987
591
397
919
570
350
855
537
317
942
586
356
924
579
345
911
572
339
914
572
342
918
576
342
902
565
337
893
566
327
894
565
329
883
559
324
887
567
320
1,669
1,123
546
1,530
1,085
445
1,421
1,025
397
1,459
1,050
409
1,552
1,115
437
1,442
1,041
401
1,355
964
391
1,372
965
407
1,439
1,040
399
1,368
960
408
1,317
987
330
1,479
1,075
404
1,290
916
374
13 Mobile homes shipped
233
218
198
209'
202'
205
200'
179'
194
186'
190
189
189
Merchant builder activity in
1-family units
14 Number sold
15 Number for sale, end of period
672
365
675
366
649
362
555
377
607
377
653
380
647
377
738
369
723
364
640'
364'
637
364
696
363
629
362
6
7 Under construction, end of period 1 .
8
1-family
2-or-more-family
9
10 Completed
11
1-family
12 2-or-more-family
Price (thousands of dollars)2
Median
16 Units sold
104.7
113.3
120.8
123.0
116.7
119.0
122.8
116.0
122.9
120.0'
123.0
125.0
130.1
17
127.9
139.0
148.8
149.0
144.7
145.1
153.6
140.3
158.6
151.1'
147.5
152.1
159.8
18 Number sold
3,530
3,594
3,438
3,400
3,400
3,210
3,360
3,330
3,480
3,520
3,490
3,560
3,560
Price of units sold
^
(thousands of dollars)'
19 Median
20 Average
85.6
106.2
89.2
112.5
93.0
118.0
92.0
116.1
92.9
118.0
92.6
118.0
93.4
118.8
96.7
122.1
94.8
120.8
94.3
118.4
92.4
117.2
93.1
118.3
92.5
117.0
Units sold
EXISTING UNITS ( 1 - f a m i l y )
Value of new construction 3 (millions of dollars)
CONSTRUCTION
21
Total put in place
397,721
409,663
414,677
416,779
411,891
416,540
412,523
410,269
416,279
416,176
414,590
417,294
414,588
27
23
24
320,108
194,656
125,452
328,738
198,101
130,637
330,661
163,865
166,796
338,065
202,083
135,982
332,537
200,735
131,802
330,591
196,984
133,607
329,035
194,229
134,806
328,785
195,165
133,620
331,884
194,393
137,491
329,564
192,765
136,799
329,782
193,124
136,658
328,762
192,279
136,483
323,525
190,974
132,551
25
26
77
28
Private
Residential
Nonresidential, total
Buildings
Industrial
Commercial
Other
Public utilities and other
13,707
55,448
15,464
40,833
14,931
58,104
17,278
40,324
16,771
57,549
17,402
75,074
15,698
60,653
17,634
41,997
16,245
55,581
16,645
43,331
15,945
56,796
17,343
43,523
16,302
57,434
17,179
43,891
16,424
56,640
16,768
43,788
17,526
57,680
18,455
43,830
17,927
57,132
17,962
43,778
17,746
58,238
17,277
43,397
17,812
57,688
17,761
43,222
17,498
55,128
16,622
43,303
7.9
30
31
32
33
Public
Military
Highway
Conservation and development...
Other
77,612
4,327
25,343
5,162
42,780
80,922
3,579
28,524
4,474
44,345
44,223
3,669
27,597
4,755
25,995
78,714
3,740
26,091
4,210
44,673
80,420
2,054
27,772
3,068
47,526
85,130
3,870
27,432
6,053
47,775
81,914
4,324
27,321
4,699
45,570
81,484
3,194
26,128
4,567
47,595
84,395
3,779
27,367
4,708
48,541
86,612
4,916
27,581
4,906
49,209
84,807
3,342
26,062
5,860
49,543
88,532
3,955
28,894
4,414
51,269
91,062
3,959
31,565
5,581
49,957
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 previous periods because of changes by the Bureau of the
Census in its estimating techniques. For a description of these changes see
Construction Reports (C-30-76-5), issued by the Bureau in July 1976.
NOTE. Census Bureau estimates for all series except (1) mobile homes, which
are private, domestic shipments as reported by the Manufactured Housing
Institute and seasonally adjusted by the Census Bureau, and (2) sales and prices
of existing units, which are published by the National Association of Realtors. All
back and current figures are available from the originating agency. Permit
authorizations are those reported to the Census Bureau from 16,000 jurisdictions
beginning with 1978.
A52
2.15
Domestic Nonfinancial Statistics • April 1990
C O N S U M E R A N D P R O D U C E R PRICES
Percentage changes based on seasonally adjusted data, except as noted
Change from 12
months earlier
Change from 3 months earlier
(at annual rate)
Change from 1
month earlier
1989
1990
Item
1989
1990
Jan.
Jan.
Mar/
June'
Sept/
Dec/
Sept/
Oct/
Nov /
Dec/
Jan.
Jan.
CONSUMER PRICES 2
(1982-84=100)
1
All items
4.7
5.2
6.1
5.3
2.3
4.9
.2
.5
.3
.4
1.1
127.4
2
3
4
5
6
Food
Energy items
All items less food and energy
Commodities
Services
5.6
1.8
4.6
4.2
5.0
6.7
9.7
4.4
2.6
5.3
7.8
9.7
5.5
3.8
5.9
5.6
22.7
3.8
2.4
4.6
3.6
-12.6
3.5
1.3
4.5
5.5
3.9
4.7
3.4
5.7
.3
-.6
.3
.5
.2
.4
1.0
.5
.4
.5
.5
-.3
.4
.2
.4
.5
.3
.3
.2
.4
2.0
5.1
.6
.4
.7
130.4
97.6
132.0
121.0
138.4
PRODUCER PRICES
(1982=100)
7
8
9
10
11
Finished goods
Consumer foods
Consumer energy
Other consumer goods
Capital equipment
4.5
5.6
2.7
4.6
3.7
5.8
5.9
19.7
4.1
3.4
9.0
11.2
33.0
5.4
4.6
5.8
-2.3
34.3
6.0
4.5
.4
.7
-15.3
2.3
4.4
5.0
12.0
-4.8
4.6
1.7
.7
-.3
6.6
.3
.7
.5
1.4
.2
.3
-.2
.1
.9
-3.2
.2
.4
.6
.6
1.9
.6
.2
1.8
2.1
13.6
.0
.2
117.5
123.6
72.8
126.9
121.1
12
13
Intermediate materials 3
Excluding energy
6.0
7.0
2.7
.3
7.9
5.5
2.9
.3
-.7
-.7
.4
-1.3
.4
.1
.2
.1
-.1
.0
.0
-.4
1.2
.1
113.4
119.9
14
15
16
Crude materials
Foods
Energy
Other
15.7
.6
8.6
1.0
15.7
-5.8
14.8
48.3
9.7
-16.9
23.6
-7.7
-2.2
-7.0
.6
18.4
13.2
-16.3
-.6
3.5
.4
-.6
.7
-.1
2.3
.3
-2.2
2.5
2.2
-2.1
1.0
5.0
.2
113.6
82.4
132.1
1. Not seasonally adjusted.
2. Figures for consumer prices are those for all urban consumers and reflect a
rental equivalence measure of homeownership after 1982.
3. Excludes intermediate materials for food manufacturing and manufactured
animal feeds.
SOURCE. Bureau of Labor Statistics.
Selected Measures hAl
2.16 GROSS NATIONAL PRODUCT AND INCOME
Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates.
1988
Account
1987
1988
1989
1989
Q4
Ql
Q2
Q3
Q4
GROSS NATIONAL PRODUCT
1 Total
4,524.3
4,880.6
5,233.2
5,017.3
5,113.1
5,201.7
5,281.0
5,337.0
3,010.8
421.0
998.1
1,591.7
3,235.1
455.2
1,052.3
1,727.6
3,470.3
473.6
1,122.6
1,874.1
3,324.0
467.4
1,078.4
1,778.2
3,381.4
466.4
1,098.3
1,816.7
3,444.1
471.0
1,121.5
1,851.7
3,508.1
486.1
1,131.4
1,890.6
3,547.5
471.0
1,139.1
1,937.5
699.9
670.6
444.3
133.8
310.5
226.4
750.3
719.6
487.2
140.3
346.8
232.4
777.1
747.7
512.5
145.1
367.4
235.2
752.8
734.1
495.8
142.5
353.3
238.4
769.6
742.0
503.1
144.7
358.5
238.8
775.0
747.6
512.5
142.4
370.1
235.1
779.1
751.7
519.6
146.2
373.4
232.1
784.8
749.6
514.8
147.1
367.7
234.8
29.3
30.5
30.6
34.2
29.4
25.2
18.7
40.8
27.7
19.1
27.4
23.6
27.4
19.8
35.2
38.3
-112.6
448.6
561.2
-73.7
547.7
621.3
-50.9
624.4
675.2
-70.8
579.7
650.5
-54.0
605.6
659.6
-50.6
626.1
676.6
-45.1
628.5
673.6
-53.8
637.3
691.1
926.1
381.6
544.5
968.9
381.3
587.6
1,036.7
404.1
632.5
1,011.4
406.4
604.9
1,016.0
399.0
617.0
1,033.2
406.0
627.2
1,038.9
402.7
636.2
1,058.6
408.8
649.8
4,495.0
1,785.2
777.6
1,007.6
2,304.5
434.6
4,850.0
1,931.9
863.6
1,068.3
2,499.2
449.5
5,203.8
2,073.6
911.6
1,161.9
2,700.7
459.0
4,998.7
1,987.4
808.5
1,098.9
2,570.0
459.9
5,085.4
2,030.9
894.7
1,136.2
2,620.8
461.3
5,174.3
2,079.1
905.2
1,173.9
2,667.5
455.1
5,253.6
2,096.3
930.1
1,166.2
2,728.1
456.6
5,301.8
2,087.9
916.5
1,171.3
2,786.2
462.9
29.3
22.0
7.2
30.6
25.0
5.6
29.4
14.6
14.9
18.7
32.0
-13.3
27.7
22.0
5.7
27.4
6.0
21.4
27.4
5.2
22.2
35.2
25.0
10.2
3,853.7
4,024.4
4,142.6
4,069.4
4,106.8
4,132.5
4,162.9
4,168.1
30 Total
3,665.4
3,972.6
4,265.0
4,097.4
4,185.2
4,249.6
4,287.3
n.a.
31 Compensation of employees
32 Wages and salaries
33
Government and government enterprises
34
Other
35 Supplement to wages and salaries
36
Employer contributions for social insurance
37
Other labor income
2,690.0
2,249.4
419.2
1,830.1
440.7
227.8
212.8
2,907.6
2,429.0
446.5
1,982.5
478.6
249.7
228.9
3,145.4
2,632.0
476.9
2,155.1
513.4
265.1
248.3
2,997.2
2,505.1
456.3
2,048.9
492.0
255.6
236.5
3,061.7
2,560.7
466.9
2,093.8
501.0
259.7
241.3
3,118.2
2,608.8
473.5
2,135.3
509.4
263.4
246.0
3,171.9
2,654.7
480.2
2,174.5
517.2
266.6
250.7
3,230.1
2,704.0
487.1
2,216.9
526.1
270.7
255.3
311.6
270.0
41.6
327.8
288.0
39.8
352.2
305.9
46.3
328.3
296.3
32.0
359.3
300.3
59.0
355.5
304.2
51.3
343.3
307.2
36.1
350.9
312.0
38.8
2
3
4
5
By source
Personal consumption expenditures
Durable goods
Nondurable goods
Services
6 Gross private domestic investment
7 Fixed investment
8
Nonresidential
9
Structures
10
Producers' durable equipment
11
Residential structures
12
13
Change in business inventories
Nonfarm
14 Net exports of goods and services
15 Exports
16 Imports
17 Government purchases of goods and services
18 Federal
19 State and local
By major type of product
20 Final sales, total
21 Goods
22
Durable
23
Nondurable
24 Services
25 Structures
26 Change in business inventories
27 Durable goods
28 Nondurable goods
MEMO
29 Total GNP in 1982 dollars
NATIONAL INCOME
38 Proprietors' income1
39 Business and professional 1
40 Farm 1
41 Rental income of persons 2
13.4
15.7
8.0
16.1
11.8
9.8
5.4
5.1
42 Corporate profits1 3
43 Profits before tax
44 Inventory valuation adjustment
45
Capital consumption adjustment
298.7
266.7
-18.9
50.9
328.6
306.8
-25.0
46.8
298.2
287.3
-18.5
29.4
340.2
318.8
-20.1
41.5
316.3
318.0
-38.3
36.6
307.8
296.0
-20.5'
32.3
295.2
275.0
-6.3
26.5
n.a.
n.a.
-8.9
22.4
46 Net interest
351.7
392.9
461.1
415.7
436.1
458.4
471.5
478.4
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. Survey of Current Business (Department of Commerce).
A54
Domestic Nonfinancial Statistics • April 1990
2.17 PERSONAL INCOME AND SAVING
Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted.
1989
1988
Account
1987
1988
1989
Q4
Ql
Q2
Q3
Q4
PERSONAL INCOME AND SAVING
1 Total personal income
3,777.6
4,064.5
4,428.7
4,185.2
4,317.8
4,400.3
4,455.9
4,540.9
2 Wage and salary disbursements
3 Commodity-producing industries
4
Manufacturing
5 Distributive industries
6 Service industries
7 Government and government enterprises
2,249.4
649.9
490.3
531.9
648.3
419.2
2,429.0
696.3
524.0
571.9
714.4
446.5
2,632.0
738.3
553.0
615.1
801.7
476.9
2,505.1
714.7
538.1
587.5
746.7
456.3
2,560.7
726.6
546.3
598.8
768.4
466.9
2,608.8
733.7
549.9
610.8
790.8
473.5
2,654.7
742.6
555.7
619.4
812.4
480.2
2,704.0
750.4
559.9
631.2
835.3
487.1
14 Personal interest income
15 Transfer payments
16 Old-age survivors, disability, and health insurance benefits . . .
212.8
311.6
270.0
41.6
13.4
92.0
523.2
548.2
282.9
228.9
327.8
288.0
39.8
15.7
102.2
571.1
584.7
300.5
248.3
352.2
305.9
46.3
8.0
112.4
657.8
632.1
325.2
236.5
328.3
296.3
32.0
16.1
106.4
598.6
593.8
304.0
241.3
359.3
300.3
59.0
11.8
109.4
629.0
616.4
316.9
246.0
355.5
304.2
51.3
9.8
111.4
655.1
626.8
322.9
250.7
343.3
307.2
36.1
5.4
113.2
667.8
636.4
327.9
255.3
350.9
312.0
38.8
5.1
115.7
679.5
649.0
333.0
17
172.9
194.9
214.2
199.6
210.0
213.0
215.4
218.5
8 Other labor income
9 Proprietors' income1
10 Business
and professional
11 Farm 1
12 Rental income of persons
LESS: Personal contributions for social insurance
3,777.6
4,064.5
4,428.7
4,185.2
4,317.8
4,400.3
4,455.9
4,540.9
571.7
586.6
648.7
597.8
628.3
652.6
649.1
665.0
20 EQUALS: Disposable personal income
3,205.9
3,477.8
3,780.0
3,587.4
3,689.5
3,747.7
3,806.8
3,875.9
21
LESS: Personal outlays
3,104.1
3,333.1
3,573.7
3,424.0
3,483.8
3,547.0
3,611.7
3,652.2
22 EQUALS: Personal saving
101.8
144.7
206.3
163.4
205.7
200.7
195.1
223.7
15,793.9
10,302.0
10,970.0
3.2
16,332.8
10,545.5
11,337.0
4.2
16,650.3
10,725.5
11,681.0
5.5
16,455.3
10,625.6
11,466.0
4.6
16,566.4
10,653.5
11,625.0
5.6
16,629.8
10,678.9
11,622.0
5.4
16,711.8
10,799.3
11,717.0
5.1
16,685.7
10,765.8
11,761.0
5.8
27 Gross saving
553.8
642.4
700.7
647.4
693.5
695.8
709.9
n.a.
28
29
30
31
663.8
101.8
75.3
-18.9
738.6
144.7
80.3
-25.0
805.6
206.3
47.1
-18.5
769.3
163.4
81.7
-20.1
792.1
205.7
53.4
-38.3
793.7
200.7
52.0
-20.5'
809.7
195.1
49.3
-6.3
n.a.
223.7
n.a.
-8.9
303.1
183.6
321.7
191.9
344.8
207.4
329.7
194.4
335.2
197.8
339.7
201.3
349.9
215.3
354.5
215.1
State and local
-110.1
-161.4
51.3
-96.1
-145.8
49.7
-104.9
-149.9
45.0
-121.9
-167.6
45.7
-98.7
-147.5
48.8
-97.9
-145.4
47.5
-99.8
-144.7
44.9
37 Gross investment
549.0
632.8
677.4
630.8
669.3
677.5
684.3
678.3
699.9
-150.9
750.3
-117.5
777.1
-99.8
752.8
-122.0
769.6
-100.3
775.0
-97.5
779.1
-94.8
784.8
-106.5
-4.7
-9.6
-23.4
-16.6
-24.1
-18.3
-25.5
-25.5
18 EQUALS: Personal income
19
LESS: Personal tax and nontax payments
MEMO
Per capita (1982 dollars)
23 Gross national product
24 Personal consumption expenditures
25 Disposable personal income
26 Saving rate (percent)
GROSS SAVING
Gross private saving
Personal saving
Undistributed corporate profits1
Corporate inventory valuation adjustment
Capital consumption
32 Corporate
33 Noncorporate
allowances
34 Government suiplus, or deficit ( - ) , national income and
product accounts
36
38 Gross private domestic
39 Net foreign
40 Statistical discrepancy
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
SOURCE. Survey of Current Business (Department of Commerce).
n.a.
n.a.
n.a.
Summary Statistics
3.10
U.S. INTERNATIONAL TRANSACTIONS
A55
Summary
Millions of dollars; quarterly data are seasonally adjusted except as noted.1
1989
1988
Item credits or debits
1 Balance on current account
2
Not seasonally adjusted
Merchandise trade balance
Merchandise exports
Merchandise imports
Military transactions, net
Investment income, net
Other service transactions, net
Remittances, pensions, and other transfers ..
U.S. government grants (excluding military) .
11 Change in U.S. government assets, other than official
reserve assets, net (increase, —)
1986
1987
1988
-133,249
-143,700
-126,548
-145,058
223,367
-368,425
-4,577
60,629
10,517
-4,049
-11,730
-159,500
250,266
-409,766
-2,856
71,151
10,585
-4,063
-10,149
-127,215
319,251
-446,466
-4,606
61,974
17,702
-4,279
-10,377
Q3
Q4
Ql
Q2
Q3"
-32,340
-36,926
-30,339
80,604
-110,943
-1,006
12,806
4,971
-1,088
-2,288
-28,677
-28,191
-32,019
83,729
-115,748
-1,604
21,329
5,475
-1,090
-3,928
-30,390
-25,994
-28,378
87,919
-116,297
-1,498
15,527
5,428
-1,186
-2,340
-32,084
-31,888
-27,554
91,423
-118,977
-1,518
13,400
5,977
-1,011
-1,857
-22,687
-27,718
-27,751
91,569
-119,320
-968
21,096
7,077
-1,099
-2,557
-2,024
997
2,999
1,961
3,413
1,049
-309
644
12 Change in U.S. official reserve assets (increase, - ) .
13 Gold
14
Special drawing rights (SDRs)
15 Reserve position in International Monetary Fund.
16 Foreign currencies
312
0
-246
1,501
-942
9,149
0
-509
2,070
7,588
-3,566
0
474
1,025
-5,064
-7,380
0
-35
202
-7,547
2,271
0
173
307
1,791
-4,000
0
-188
316
-4,128
-12,095
0
68
-159
-12,004
-5,996
0
-211
337
-6,122
17 Change in U.S. private assets abroad (increase, —).
18 Bank-reported claims
19 Nonbank-reported claims
20
U.S. purchase of foreign securities, net
21
U.S. direct investments abroad, net
-97,953
-59,975
-7,396
-4,271
-26,311
-86,363
-42,119
5,201
-5,251
-44,194
-81,544
-54,481
-1,684
-7,846
-17,533
-32,467
-26,229
255
-1,592
-4,901
-38,332
-30,916
4,569
-3,047
-8,938
-28,367
-22,132
1,835
-2,568
-5,502
12,781
27,238
-2,954
-5,737
-5,766
-41,804
-20,702
-10,138
-10,964
22 Change in foreign official assets in United States (increase,
+)
23
U.S. Treasury securities
24
Other U.S. government obligations
25
Other U.S. government liabilities
26
Other U.S. liabilities reported by U.S. banks 3
27
Other foreign official assets 5
35,594
34,364
-1,214
2,141
1,187
-884
45,193
43,238
1,564
-2,520
3,918
-1,007
38,882
41,683
1,309
-1,284
-331
-2,495
-2,234
-3,769
572
-232
1,703
-508
10,589
11,897
697
-232
-1,036
-737
7,477
4,634
721
-304
1,974
452
-5,201
-9,738
-97
417
3,620
597
11,246
12,068
190
-547
-1,117
652
28 Change in foreign private assets in United States (increase,
+)
„
29
U.S. bank-reported liabilities^
30
U.S. nonbank-reported liabilities
31
Foreign private purchases of U.S. Treasury securities, net
32
Foreign purchases of other U.S. securities, net
33
Foreign direct investments in United States, net
186,011
79,783
-2,641
3,809
70,969
34,091
172,847
89,026
2,450
-7,643
42,120
46,894
180,417
68,832
6,558
20,144
26,448
58,435
48,413
23,291
2,350
3,422
7,454
11,896
70,170
32,223
2,702
5,336
6,871
23,038
52,529
13,261
2,852
8,590
8,665
19,161
3,412
-21,422
-361
2,252
9,676
13,267
61,236
25,688
0
11,308
0
1,878
0
-10,641
0
24,047
-4,556
0
-19,434
4,431
0
1,702
4,127
0
33,496
-2,311
0
-2,639
-5,115
11,308
1,878
-10,641
28,603
-23,865
-2,425
35,807
2,476
312
34 Allocation of SDRs
35 Discrepancy
36
Owing to seasonal adjustments
37
Statistical discrepancy in recorded data before seasonal
adjustment
13,034
11,082
11,432
MEMO
Changes in official assets
U.S. official reserve assets (increase, —)
Foreign official assets in United States (increase, +)
excluding line 25
40 Change in Organization of Petroleum Exporting Countries
official assets in United States (part of line 22
above)
41 Transfers under military grant programs (excluded from
lines 4, 6, and 10 above)
38
39
9,149
-3,566
-7,380
2,271
-4,000
-12,095
-5,996
33,453
47,713
40,166
-2,002
10,821
7,781
-5,618
11,793
-9,327
-9,956
-3,109
-459
672
7,143
433
3,776
96
53
92
7
40
12
13
15
1. Seasonal factors are not calculated for lines 6, 10, 12-16, 18-20, 22-34, and
38-41.
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. Reporting banks include all kinds of depository institutions besides commercial banks, as well as some brokers and dealers.
4. Primarily associated with military sales contracts and other transactions
arranged with or through foreign official agencies.
5. 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 of Current Business
(Department of Commerce).
A56
International Statistics • April 1990
3.11 U. S. FOREIGN TRADE1
Millions of dollars; monthly data are seasonally adjusted.
1989
Item
1
EXPORTS of domestic and foreign
merchandise excluding grant-aid
shipments, f.a.s. value
GENERAL IMPORTS including
merchandise for immediate
consumption plus entries into
bonded warehouses
2
Customs value
3
Trade balance
Customs value
1987
1988
1989
June
July
Aug.
Sept.
Oct.
Nov/
Dec."
254,073
322,426
364,610
31,286
30,468
30,562
30,680
31,034
30,374
31,109
406,241
440,952
473,309
39,293
38,709
40,662
39,194
41,283
40,666
38,278
-152,169
-118,526
-108,699
-8,007
-8,241
-10,101
-8,513
-10,249
-10,292
-7,169
1. 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 adjustment is the exclusion of military sales
(which are combined with other military transactions and reported separately in
the "service 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 transac-
tions; military payments are excluded and shown separately as indicated above.
As of Jan. 1, 1987 census data are released 45 days after the end of the month; the
previous month is revised to reflect late documents. Total exports and the trade
balance reflect adjustments for undocumented exports to Canada.
SOURCE. FT900 "Summary of U.S. Export and Import Merchandise Trade"
(Department of Commerce, Bureau of the Census).
3.12 U.S. RESERVE ASSETS
Millions of dollars, end of period
1989
Type
2
Gold stock, including Exchange
Stabilization Fund 1
3
Special drawing rights 2 ' 3
4
Reserve position in International
Monetary Fund
Foreign currencies
4
1987c
1990
1988c
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan. p
75,506
45,798
47,802
63,462
62,364
68,418
70,560
70,560
74,609
11,064
11,078
11,057
11,066
11,066
11,065
11,062
11,060
11,059
11,059
8,395
10,283
9,637
9,340
9,240
9,487
9,473
9,751
9,951
10,041
11,730
11,349
9,745
9,055
8,644
8,786
8,722
9,047
9,048
9,173
17,322
13,088
17,363
34,001
33,413
39,080
41,552
42,702
44,551
45,233
48,511
1 Total
5
1986c
1. Gold held under earmark at Federal Reserve Banks for foreign and international accounts is not included in the gold stock of the United States; see table
3.13. Gold stock is valued at $42.22 per fine troy ounce.
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 Monetary 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 transactions in SDRs.
4. Valued at current market exchange rates.
3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS 1
Millions of dollars, end of period
1989
Assets
1986
1987
July
1 Deposits
Assets held in custody
2 U.S. Treasury securities
3 Earmarked gold
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
p
287
244
347
371
265
325
252
307
589
251
155,835
14,048
195,126
13,919
232,547
13,636
233,170
13,530
238,007
13,516
235,597
13,506
230,804
13,460
231,059
13,458
224,911
13,456
225,618
13,458
1. Excludes deposits and U.S. Treasury securities held for international and
regional organizations.
2. Marketable U.S. Treasury bills, notes, and bonds; and nonmarketable U.S.
Treasury securities payable in dollars and in foreign currencies.
1990
1988
3. Earmarked gold and the gold stock are valued at $42.22 per fine troy ounce,
Earmarked gold is gold held for foreign and international accounts and is not
included in the gold stock of the United States.
Summary Statistics
3.14 FOREIGN BRANCHES OF U.S. BANKS
A57
Balance Sheet Data1
Millions of dollars, end of period
1989
Asset account
1986
1987
1988
June
July
Aug.
Sept.
Oct.
Nov.'
Dec.
All foreign countries
1 Total, all currencies
2 Claims on United States
Parent bank
4
Other banks in United States
5 Nonbanks
6 Claims on foreigners
7
Other branches of parent bank
8
Banks
9
Public borrowers
10 Nonbank foreigners
456,628
518,618
505,595
523,674
534,425'
522,489
520,845
533,641
548,039
545,266
114,563
83,492
13,685
17,386
312,955
96,281
105,237
23,706
87,731
138,034
105,845
16,416
15,773
342,520
122,155
108,859
21,832
89,674
169,111
129,856
14,918
24,337
299,728
107,179
96,932
17,163
78,454
177,445
132,380
14,218
30,847
303,720
115,913
94,902
16,709
76,196
179,839r
133,359r
15,744
30,736
310,426
117,438
95,621
16,948
80,419
177,299
134,479
15,225
27,595
299,265
108,893
92,465
16,656
81,251
182,440
142,339
14,164
25,937
289,9%
104,683
90,510
16,215
78,588
184,505
145,034
14,248
25,223
300,814
110,684
93,357
16,721
80,052
195,878
154,790
15,301
25,787
303,356
111,053
95,098
16,148
81,057
198,732
156,989
17,042
24,701
300,789
113,810
90,703
16,456
79,820
29,110
38,064
36,756
42,509
44,160'
45,925
48,409
48,322
48,805
45,745
12 Total payable in U.S. dollars
317,487
350,107
357,573
367,562
372,076'
369,287
359,924
369,898
380,247
382,314
H Claims on United States
14 Parent bank
15 Other banks in United States
16 Nonbanks
17 Claims on foreigners
18 Other branches of parent bank
19 Banks
20
Public borrowers
21
Nonbank foreigners
110,620
82,082
12,830
15,708
195,063
72,197
66,421
16,708
39,737
132,023
103,251
14,657
14,115
202,428
88,284
63,707
14,730
35,707
163,456
126,929
14,167
22,360
177,685
80,736
54,884
12,131
29,934
169,520
127,352
13,207
28,961
180,013
88,874
50,627
11,815
28,697
171,265'
128,287'
14,734
28,244
181,441
90,077
49,913
11,616
29,835
170,497
130,168
14,688
25,641
177,911
83,036
50,885
11,774
32,216
174,628
137,481
13,217
23,930
164,461
77,858
46,786
11,646
28,171
176,228
139,224
13,597
23,407
171,691
83,945
47,349
11,579
28,818
188,070
149,873
14,543
23,654
168,677
79,585
48,%6
11,446
28,680
191,081
152,191
16,386
22,504
169,780
82,949
48,396
10,961
27,474
11,804
15,656
16,432
18,029
19,370'
20,879
20,835
21,979
23,500
21,453
11 Other assets
22 Other assets
United Kingdom
23 Total, all currencies
140,917
158,695
156,835
153,968
161,882
158,860
157,673
164,155
164,916
161,947
24 Claims on United States
25
Parent bank
26
Other banks in United States
27
Nonbanks
28 Claims on foreigners
29
Other branches of parent bank
30
Banks
31
Public borrowers
32
Nonbank foreigners
24,599
19,085
1,612
3,902
109,508
33,422
39,468
4,990
31,628
32,518
27,350
1,259
3,909
115,700
39,903
36,735
4,752
34,310
40,089
34,243
1,123
4,723
106,388
35,625
36,765
4,019
29,979
38,014
33,763
1,125
3,126
103,773
34,948
37,357
3,599
27,869
42,147
37,713
1,121
3,313
106,586
35,440
36,519
3,788
30,839
41,914
38,031
1,112
2,771
102,231
32,392
36,073
3,586
30,180
40,085
36,046
1,265
2,774
102,097
32,611
37,146
3,265
29,075
42,424
38,938
1,200
2,286
106,430
35,252
38,048
3,346
29,784
44,661
40,848
1,199
2,614
105,349
35,064
36,317
3,181
30,787
39,212
35,847
1,058
2,307
107,657
37,728
36,159
3,293
30,477
6,810
10,477
10,358
12,181
13,149
14,715
15,491
15,301
14,906
15,078
34 Total payable in U.S. dollars
95,028
100,574
103,503
99,028
103,512
104,036
99,238
106,869
106,086
103,427
35 Claims on United States
36
Parent bank
37
Other banks in United States
38
Nonbanks
39 Claims on foreigners
40
Other branches of parent bank
41
Banks
42
Public borrowers
43
Nonbank foreigners
23,193
18,526
1,475
3,192
68,138
26,361
23,251
3,677
14,849
30,439
26,304
1,044
3,091
64,560
28,635
19,188
3,313
13,424
38,012
33,252
964
3,7%
60,472
28,474
18,494
2,840
10,664
34,990
32,059
844
2,087
58,746
26,541
18,745
2,606
10,854
38,506
36,041
821
1,644
59,137
27,955
17,080
2,702
11,400
39,135
36,375
1,007
1,753
57,706
25,368
18,298
2,679
11,361
37,108
34,537
1,017
1,554
55,340
25,542
17,612
2,521
9,665
39,715
37,404
951
1,360
59,389
28,084
18,275
2,553
10,477
41,504
39,304
861
1,339
56,872
26,961
16,884
2,404
10,623
36,404
34,329
843
1,232
59,062
29,872
16,579
2,371
10,240
3,697
5,575
5,019
5,292
5,869
7,195
6,790
7,765
7,710
7,961
33 Other assets
44 Other assets
Bahamas and Caymans
45 Total, all currencies
46 Claims on United States
Parent bank
47
Other banks in United States
48
49
Nonbanks
50 Claims on foreigners
Other branches of parent bank
51
52
Banks
53
Public borrowers
54
Nonbank foreigners
55 Other assets
56 Total payable in U.S. dollars
142,592
160,321
170,639
171,780
173,014'
165,401
164,684
164,836
172,762
175,949
78,048
54,575
11,156
12,317
60,005
17,296
27,476
7,051
8,182
85,318
60,048
14,277
10,993
70,162
21,277
33,751
7,428
7,706
105,320
73,409
13,145
18,766
58,393
17,954
28,268
5,830
6,341
109,800
70,735
12,116
26,949
54,537
22,324
21,202
5,540
5,471
108,055'
67,641'
13,712
26,702
57,135
24,462
21,591
5,405
5,677
106,693
69,404
13,294
23,995
50,808
16,802
20,688
5,407
7,911
111,043
76,426
12,141
22,476
45,962
14,688
20,162
5,435
5,677
109,910
75,900
12,059
21,951
47,214
16,961
19,579
5,289
5,385
118,037
82,605
13,185
22,247
46,391
14,414
21,641
5,340
4,9%
124,148
87,825
15,071
21,252
44,168
11,309
22,611
5,217
5,031
4,539
4,841
6,926
7,443
7,824'
7,900
7,679
7,712
8,334
7,633
136,813
151,434
163,518
165,676
167,484'
160,821
160,274
159,643
167,182
170,723
1. Beginning with June 1984 data, reported claims held by foreign branches
have been reduced by an increase in the reporting threshold for "shell" branches
from $50 million to $150 million equivalent in total assets, the threshold now
applicable to all reporting branches.
A58
International Statistics • April 1990
3.14—Continued
Liability account
1986
1987
1988
June
July
Aug.
Sept.
Oct.
All foreign countries
57 Total, all currencies
456,628
518,618
505,595
523,674
534,425'
522,489
520,845
533,641
548,039
545,266
58 Negotiable CDs
59 To United States
60
Parent bank
61
Other banks in United States
62
Nonbanks
31,629
152,465
83,394
15,646
53,425
30,929
161,390
87,606
20,355
53,429
28,511
185,577
114,720
14,737
56,120
28,116
179,902
113,395
12,951
53,556
28,882
177,769'
110,326
13,353r
54,090
29,524
177,542
110,917
13,269
53,356
26,679
183,203
121,003
13,015
49,185
26,776
183,576
123,229
11,476
48,871
26,555
190,149
128,799
10,811
50,539
23,500
197,182
138,130
11,462
47,590
63 To foreigners
64
Other branches of parent bank
65
Banks
66
Official institutions
67
Nonbank foreigners
68 Other liabilities
253,775
95,146
77,809
17,835
62,985
18,759
304,803
124,601
87,274
19,564
73,364
21,496
270,923
111,267
72,842
15,183
71,631
20,584
289,559
118,950
74,209
17,559
78,841
26,097
301,583'
119,765'
80,069
18,846
82,903
26,191'
288,566
113,752
75,589
17,591
81,634
26,857
283,435
104,853
77,618
17,349
83,615
27,528
294,486
114,180
75,758
19,361
85,187
28,803
302,346
115,484
81,200
18,938
86,724
28,989
296,850
119,591
76,452
16,750
84,057
27,734
69 Total payable in U.S. dollars . . .
336,406
361,438
367,483
378,331
382,104'
379,771
371,301
384,495
392,948
396,182
70 Negotiable CDs
71 To United States
72
Parent bank
73
Other banks in United States
74
Nonbanks
28,466
144,483
79,305
14,609
50,569
26,768
148,442
81,783
18,951
47,708
24,045
173,190
107,150
13,468
52,572
24,129
167,261
105,074
11,537
50,650
24,914
163,834'
100,726
11,875'
51,233
25,483
166,041
103,3%
11,964
50,681
22,927
170,512
112,255
11,837
46,420
22,260
171,458
115,314
10,273
45,871
22,539
179,927
122,910
9,512
47,505
19,619
187,229
132,281
10,277
44,671
75 To foreigners
76
Other branches of parent bank
77
Banks
78
Official institutions
79
Nonbank foreigners
80 Other liabilities
156,806
71,181
33,850
12,371
39,404
6,651
177,711
90,469
35,065
12,409
39,768
8,517
160,766
84,021
28,493
8,224
40,028
9,482
175,349
90,850
29,682
9,852
44,965
11,592
181,166'
91,907'
31,215
11,176
46,868
12,190'
175,270
87,123
31,939
10,680
45,528
12,977
165,321
77,987
30,232
10,195
46,907
12,541
177,703
85,781
31,986
11,445
48,491
13,074
177,459
82,912
33,370
11,713
49,464
13,023
176,460
87,636
30,537
9,873
48,414
12,874
United Kingdom
81 Total, all currencies
140,917
158,695
156,835
153,968
161,882
158,860
157,673
164,155
164,916
161,947
82 Negotiable CDs
83 To United States
84
Parent bank
85
Other banks in United States
86
Nonbanks
27,781
24,657
14,469
2,649
7,539
26,988
23,470
13,223
1,536
8,711
24,528
36,784
27,849
2,037
6,898
24,3%
30,013
22,037
1,648
6,328
25,342
29,954
19,885
1,852
8,217
25,905
31,551
21,841
1,767
7,943
23,122
31,076
24,013
1,687
5,376
23,152
34,181
25,061
2,002
7,118
22,837
33,101
25,430
1,0%
6,575
20,056
36,036
29,726
1,256
5,054
87 To foreigners
88
Other branches of parent bank
89
Banks
90
Official institutions
91
Nonbank foreigners
92 Other liabilities
79,498
25,036
30,877
6,836
16,749
8,981
98,689
33,078
34,290
11,015
20,306
9,548
86,026
26,812
30,609
7,873
20,732
9,497
88,381
24,974
31,066
8,650
23,691
11,178
94,335
26,556
33,047
9,586
25,146
12,251
88,661
24,326
30,790
8,868
24,677
12,743
91,101
24,769
31,330
8,878
26,124
12,374
93,700
26,936
30,688
10,132
25,944
13,122
%,509
26,656
33,016
9,724
27,113
12,469
92,307
27,397
29,780
8,551
26,579
13,548
93 Total payable in U.S. dollars
99,707
102,550
105,907
101,742
105,700
106,915
102,361
110,358
109,116
108,178
94 Negotiable CDs
95 To United States
96
Parent bank
97
Other banks in United States
98
Nonbanks
26,169
22,075
14,021
2,325
5,729
24,926
17,752
12,026
1,308
4,418
22,063
32,588
26,404
1,752
4,432
22,324
25,401
19,556
1,393
4,452
23,132
24,618
16,909
1,477
6,232
23,679
27,232
19,580
1,502
6,150
21,156
26,592
21,588
1,511
3,493
20,433
30,433
23,247
1,835
5,351
20,715
30,130
24,578
863
4,689
18,143
33,056
28,812
1,065
3,179
99 To foreigners
100 Other branches of parent bank
101
Banks
102 Official institutions
103 Nonbank foreigners
104 Other liabilities
48,138
17,951
15,203
4,934
10,050
3,325
55,919
22,334
15,580
7,530
10,475
3,953
47,083
18,561
13,407
4,348
10,767
4,173
48,491
16,467
13,545
5,579
12,900
5,526
52,179
18,388
14,173
6,131
13,487
5,771
49,913
17,060
13,578
5,825
13,450
6,091
48,557
16,673
12,331
5,532
14,021
6,056
52,902
18,926
13,177
6,605
14,194
6,590
52,135
16,845
13,587
6,755
14,948
6,136
50,517
18,384
12,244
5,454
14,435
6,462
Bahamas and Caymans
105 Total, all currencies
142,592
160,321
170,639
171,780
173,014'
165,401
164,684
164,836
172,762
175,949
106 Negotiable CDs
107 To United States
108 Parent bank
109 Other banks in United States
110
Nonbanks
847
106,081
49,481
11,715
44,885
885
113,950
53,239
17,224
43,487
953
122,332
62,894
11,494
47,944
696
117,781
61,642
10,034
46,105
717
116,324'
61,263
10,227'
44,834
691
113,179
58,765
10,076
44,338
669
117,611
64,859
10,026
42,726
669
114,701
66,292
8,088
40,321
671
121,021
70,107
8,438
42,476
678
124,802
74,906
8,641
41,255
111 To foreigners
112 Other branches of parent bank
113
Banks
114 Official institutions
115
Nonbank foreigners
116 Other liabilities
34,400
12,631
8,617
2,719
10,433
1,264
43,815
19,185
10,769
1,504
12,357
1,671
45,161
23,686
8,336
1,074
12,065
2,193
50,433
27,763
8,318
1,102
13,250
2,870
53,042'
29,279'
8,308
1,223
14,232
2,931'
48,712
25,770
8,613
1,081
13,248
2,819
43,818
20,678
8,802
928
13,410
2,586
46,906
23,086
8,985
1,003
13,832
2,560
47,521
23,352
9,137
1,131
13,901
3,549
47,382
23,414
8,823
1,097
14,048
3,087
117 Total payable in U.S. dollars . . .
138,774
152,927
162,950
165,593
167,213'
160,800
160,133
160,028
167,835
171,193
Summary Statistics
A59
3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1989
Item
1 Total 1
2
3
4
5
6
7
8
9
10
11
12
By type
Liabilities reported by banks in the United States
U.S. Treasury bills and certificates
U.S. Treasury bonds and notes
Marketable
Nonmarketable 4
U.S. securities other than U.S. Treasury securities
By area
Western Europe 1
Canada
Latin America and Caribbean
Asia
Other countries
1987
1988
June
July
Aug.
Sept.
Oct/
Nov/
Dec. p
259,556
299,782
302,299
307,516
317,591
314,782
315,501
314,899
307,463
31,838
88,829
31,519
103,722
37,490
87,190
39,216
87,734
38,171
88,325
36,393
86,350
42,561
81,465
39,013
82,474
35,647
77,062
122,432
300
16,157
149,056
523
14,962
160,462
545
16,612
163,281
549
16,736
173,238
553
17,304
174,037
557
17,445
173,017
561
17,897
174,703
564
18,145
176,006
568
18,180
124,620
4,961
8,328
116,098
1,402
4,147
125,097
9,584
10,099
145,608
1,369
7,501
122,670
9,604
5,925
155,454
1,271
6,830
126,533
9,424
7,166
155,786
949
7,113
134,232
9,560
7,986
157,197
810
7,257
133,694
8,989
9,511
154,315
867
6,849
134,336
8,609
10,014
154,110
910
6,962
137,708
9,051
9,908
149,708
1,019
6,941
134,134
9,474
8,898
146,983
982
6,422
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.
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.
3.16 LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Banks in the United States
Payable in Foreign Currencies1
Millions of dollars, end of period
1988
1985
Item
1 Banks' own liabilities
2 Banks* own claims
3
Deposits
4
Other claims
5 Claims of banks' domestic customers
15,368
16,294
8,437
7,857
580
1. Data on claims exclude foreign currencies held by U.S. monetary authorities.
1986
29,702
26,180
14,129
12,052
2,507
1989
1987
55,438
51,271
18,861
32,410
551
Dec.
Mar.
June
Sept.
74,980
68,983
25,100
43,884
364
76,545
72,904
25,938
46,966
376
69,067
62,758
23,845
38,913
723
72,560
70,715
23,983
46,731
2,558
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 the domestic customers.
A60
International Statistics • April 1990
3.17 LIABILITIES TO FOREIGNERS
Payable in U.S. dollars
Reported by Banks in the United States1
Millions of dollars, end of period
1989
Holder and type of liability
1987
1988
1989
June
July
Aug.
Sept.
Oct/
Nov/
Dec."
1 All foreigners
618,874
685,339
731,886
673,402
665,330
679,994
694,304
704,598
726,793
731,886
2 Banks' own liabilities
3
Demand deposits
4
Time deposits
Other.
5
6
Own foreign offices 4
470,070
22,383
148,374
51,677
247,635
514,532
21,863
152,164
51,366
289,138
574,849
21,710
170,186
65,228
317,724
511,877
21,223
153,783
60,916
275,955
503,147
21,363
149,753
64,303
267,728
516,883
19,718
155,494
63,732
277,939
530,517
21,550
157,273
56,157
295,536
543,946
21,069
162,372
64,979
295,526
563,701
21,312
165,319
65,802
311,267
574,849
21,710
170,186
65,228
317,724
148,804
101,743
170,807
115,056
157,037
90,578
161,524
98,893
162,184
99,365
163,111
99,683
163,787
99,209
160,652
95,278
163,093
%,356
157,037
90,578
16,776
30,285
16,426
39,325
17,199
49,260
17,077
45,555
16,893
45,925
17,260
46,168
17,091
47,487
16,741
48,633
16,819
49,918
17,199
49,260
7 Banks' custody liabilities5
8
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
9
instruments
10 Other
11 Nonmonetary international and regional
organizations
4,464
3,224
4,772
3,817
4,240
4,418
4,945
5,769
5,841
4,772
12 Banks' own liabilities
13 Demand deposits
14 Time deposits
15 Other
2,702
124
1,538
1,040
2,527
71
1,183
1,272
3,156
%
927
2,132
2,895
32
1,454
1,409
2,716
41
918
1,756
3,402
66
1,079
2,257
3,347
89
1,702
1,555
3,733
53
1,043
2,638
4,523
62
1,012
3,449
3,156
%
927
2,132
16 Banks' custody liabilities5
17 U.S. Treasury bills and certificates 6
18 Other negotiable and readily transferable
instruments
19 Other
1,761
265
698
57
1,616
197
922
181
1,524
345
1,016
107
1,598
84
2,036
568
1,318
321
1,616
197
1,497
0
641
0
1,417
2
731
10
1,179
0
909
1
1,479
35
1,454
14
996
0
1,417
2
20 Official institutions
9
120,667
135,241
112,709
124,680
126,951
126,4%
122,743
124,026
121,486
112,709
21 Banks' own liabilities
22
Demand deposits
23
Time deposits
24
Other 3
28,703
1,757
12,843
14,103
27,109
1,917
9,767
15,425
30,298
2,175
10,465
17,658
32,167
1,801
10,033
20,332
34,132
1,959
10,072
22,101
33,238
1,625
8,837
22,776
31,615
2,026
8,994
20,595
37,524
2,057
12,078
23,389
34,082
1,838
11,182
21,063
30,298
2,175
10,465
17,658
25 Banks' custody liabilities5
26
U.S. Treasury bills and certificates 6
27
Other negotiable and readily transferable
instruments
28
Other
91,965
88,829
108,132
103,722
82,411
77,062
92,513
87,190
92,818
87,734
93,258
88,325
91,127
86,350
86,502
81,465
87,404
82,474
82,411
77,062
2,990
146
4,130
280
4,988
361
5,080
244
4,821
263
4,735
198
4,588
189
4,734
303
4,805
125
4,988
361
29 Banks
10
30 Banks' own liabilities
31
Unaffiliated foreign banks
32
Demand deposits
33
Time deposits
34
Other 3
35
Own foreign offices 4
414,280
459,523
513,868
452,396
443,172
457,463
476,027
482,104
505,672
513,868
371,665
124,030
10,898
79,717
33,415
247,635
409,501
120,362
9,948
80,189
30,226
289,138
453,343
135,618
10,347
92,184
33,087
317,724
396,662
120,707
9,677
77,874
33,156
275,955
387,306
119,578
10,145
75,166
34,267
267,728
400,975
123,036
9,101
80,603
33,333
277,939
415,761
120,225
10,695
80,789
28,741
295,536
420,918
125,392
9,884
83,913
31,594
295,526
443,340
132,073
10,742
87,354
33,978
311,267
453,343
135,618
10,347
92,184
33,087
317,724
36 Banks' custody liabilities5
37
U.S. Treasury bills and certificates 6
38
Other negotiable and readily transferable
instruments
39
Other
42,615
9,134
50,022
7,602
60,525
9,278
55,734
7,759
55,865
7,674
56,488
7,838
60,265
9,032
61,186
9,251
62,332
9,499
60,525
9,278
5,392
28,089
5,725
36,694
4,715
46,531
5,314
42,662
5,326
42,866
5,284
43,365
5,095
46,138
4,770
47,165
4,446
48,388
4,715
46,531
40 Other foreigners
79,463
87,351
100,538
92,509
90,968
91,617
90,590
92,699
93,794
100,538
41 Banks' own liabilities
42
Demand deposits
43
Time deposits
44
Other.
67,000
9,604
54,277
3,119
75,3%
9,928
61,025
4,443
88,052
9,091
66,610
12,351
80,153
9,714
64,422
6,018
78,992
9,218
63,596
6,179
79,268
8,926
64,975
5,367
79,793
8,739
65,787
5,267
81,771
9,075
65,338
7,357
81,756
8,671
65,772
7,312
88,052
9,091
66,610
12,351
45 Banks' custody liabilities5
46
U.S. Treasury bills and certificates 6
47
Other negotiable and readily transferable
instruments
48
Other
12,463
3,515
11,956
3,675
12,486
4,041
12,355
3,763
11,976
3,612
12,349
3,413
10,796
3,743
10,928
3,993
12,038
4,062
12,486
4,041
6,898
2,050
5,929
2,351
6,079
2,366
5,952
2,639
5,566
2,797
6,332
2,604
5,929
1,125
5,783
1,152
6,572
1,405
6,079
2,366
7,314
6,425
5,061
5,337
5,261
5,199
5,237
5,160
4,815
5,061
49 MEMO: Negotiable time certificates of deposit in
custody for foreigners
1. Reporting banks include all kinds of depository institutions besides commercial banks, as well as some brokers and dealers.
2. Excludes negotiable time certificates of deposit, which are included in
"Other negotiable and readily transferable instruments."
3. Includes borrowing under repurchase agreements.
4. U.S. banks: includes amounts due to 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 to head office or parent foreign bank, and
foreign branches, agencies, or wholly owned subsidiaries of head office or parent
foreign bank.
5. Financial claims on residents of the United States, other than long-term
securities, held by or through reporting banks.
6. Includes nonmarketable certificates of indebtedness and Treasury bills
issued to official institutions of foreign countries.
7. Principally bankers acceptances, commercial paper, and negotiable time
certificates of deposit.
8. Principally the International Bank for Reconstruction and Development, and
the Inter-American and Asian Development Banks. Data exclude "holdings of
dollars" of the International Monetary Fund.
9. Foreign central banks, foreign central governments, and the Bank for
International Settlements.
10. Excludes central banks, which are included in "Official institutions."
Nonbank-Reported
Data
3.17—Continued
1989
Area and country
1987
1988
1989
June
July
Aug.
Sept.
Oct.
Nov.'
Dec/
1 Total
618,874
685,339
731,886
673,402
665,330
679,994
694,304
704,598r
726,793
731,886
2 Foreign countries
614,411
682,115
727,115
669,585
661,091
675,576
689,359
698,829r
720,953
727,115
234,641
920
9,347
760
377
29,835
7,022
689
12,073
5,014
1,362
801
2,621
1,379
33,766
703
116,852
710
9,798
32
582
231,912
1,155
10,022
2,200
285
24,777
6,772
672
14,599
5,316
1,559
903
5,494
1,284
34,199
1,012
111,811
529
8,598
138
591
236,518
1,223
10,147
1,409
639
26,686
7,305
1,012
16,138
6,565
2,399
2,405
4,341
1,987
34,278
1,815
101,746
1,490
13,468
350
1,115
222,164
1,508
8,631
1,179
451
23,868
9,363
889
13,965
4,875
1,485
1,100
5,090
1,478
28,811
737
103,173
558
14,342
164
499
222,146
1,417
8,949
1,348
436
22,290
8,875
862
12,892
5,029
1,522
1,419
5,910
1,248
28,581
1,053
105,310
604
13,667
175
559
226,366
1,404
9,286
1,956
460
24,864
7,651
828
14,597
5,106
1,453
1,945
5,390
2,002
28,931
1,022
104,055
691
13,824
201
699
222,040
1,345
10,158
1,265
519
23,031
8,345
797
14,542
4,989
1,698
2,206
5,277
1,680
29,001
1,085
102,210
774
12,312
244
562
232,513r
1,193
10,841
l,442 r
464
23,882'
8,700
845'
14,220
5,426'
1,342
2,292'
4,986
1,663
29,554'
1,199
106,285'
858
16,389'
338
595'
241,658
1,467
10,322
1,912
577
25,923
9,088
1,024
14,649
7,204
1,952
2,248
4,888
1,920
31,497
1,370
108,483
1,016
15,163
286
668
236,518
1,223
10,147
1,409
639
26,686
7,305
1,012
16,138
6,565
2,399
2,405
4,341
1,987
34,278
1,815
101,746
1,490
13,468
350
1,115
3 Europe
4
Austria
Belgium-Luxembourg
5
6
Denmark
Finland
7
8
France
Germany
9
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 Europe
22
U.S.S.R
Other Eastern Europe
23
30,095
21,062
18,754
17,514
17,472
16,958
17,960
16,670
18,182
18,754
25 Latin America and Caribbean
26
Argentina
Bahamas
27
Bermuda
28
29
Brazil
30
British West Indies
Chile
31
32 Colombia
33 Cuba
34
Ecuador
35
Guatemala
36 Jamaica
37
Mexico
38 Netherlands Antilles
39 Panama
40
Peru
41
Uruguay
Venezuela
42
Other
43
220,372
5,006
74,767
2,344
4,005
81,494
2,210
4,204
12
1,082
1,082
160
14,480
4,975
7,414
1,275
1,582
9,048
5,234
271,146
7,804
86,863
2,621
5,314
113,840
2,936
4,374
10
1,379
1,195
269
15,185
6,420
4,353
1,671
1,898
9,147
5,868
308,483
7,184
100,093
2,972
6,059
136,484
3,172
4,513
10
1,370
1,290
276
14,800
6,263
4,193
1,945
2,261
9,405
6,191
271,445
6,320
82,312
2,321
5,004
121,385
2,690
4,127
10
1,351
1,251
294
14,270
6,316
4,278
1,761
2,429
9,423
5,903
266,403
7,397
84,526
2,269
5,3%
113,243
2,683
4,235
9
1,411
1,297
227
13,705
6,434
4,357
1,770
2,152
9,500
5,790
275,557
8,047
90,317
2,209
5,539
115,870
2,739
4,365
10
1,376
1,279
231
13,769
6,071
4,400
1,778
2,121
9,398
6,039
284,9%
8,446
90,622
2,124
5,892
122,677
2,765
4,199
14
1,363
1,293
233
14,981
6,062
4,424
1,828
2,340
9,520
6,213
286,588'
8,069'
93,171'
2,458
6,080'
120,932'
3,014'
4,887
10
1,342
1,276
206
14,642'
5,939'
4,393
1,902'
2,214
9,552'
6,503'
296,595
7,693
%,294
2,549
6,228
128,324
3,061
4,681
15
1,324
1,289
189
13,847
6,249
4,359
1,921
2,315
9,799
6,459
308,483
7,184
100,093
2,972
6,059
136,484
3,172
4,513
10
1,370
1,290
276
14,800
6,263
4,193
1,945
2,261
9,405
6,191
44
121,288
147,838
155,076
148,449
144,106
145,917
153,564
150,975'
150,964
155,076
1,162
21,503
10,180
582
1,404
1,292
54,322
1,637
1,085
1,345
13,988
12,788
1,895
26,058
12,248
699
1,180
1,461
74,015
2,541
1,163
1,236
12,083
13,260
1,870
19,472
12,119
774
1,276
1,229
80,837
3,022
1,608
2,071
13,324
17,475
1,432
27,025
12,134
812
1,232
1,088
71,198
3,047
984
1,274
13,612
14,612
1,522
27,128
11,346
871
1,096
1,058
68,700
3,556
936
1,254
12,368
14,271
1,700
25,427
12,268
940
1,042
953
71,028
2,907
1,083
1,776
12,524
14,270
1,804
24,119
12,292
875
1,042
1,041
78,824
3,037
1,055
1,430
13,021
15,024
1,985
22,403'
12,127'
836
1,144
2,221
73,573'
3,099
1,158'
1,686
13,450
17,293
1,635
21,231
12,028
984
1,300
1,081
75,215
3,339
1,242
1,887
13,574
17,448
1,870
19,472
12,119
774
1,276
1,229
80,837
3,022
1,608
2,071
13,324
17,475
3,945
1,151
194
202
67
1,014
1,316
3,991
911
68
437
85
1,017
1,474
3,783
679
75
202
86
1,122
1,618
3,904
748
67
188
98
1,100
1,702
3,618
738
66
231
92
942
1,548
3,265
549
72
201
87
897
1,459
3,536
574
%
246
81
1,036
1,502
3,486
577
71
220
71
1,047'
1,501
3,747
633
75
291
60
1,118
1,569
3,783
679
75
202
86
1,122
1,618
64 Other countries
65
Australia
66
All other
4,070
3,327
744
6,165
5,293
872
4,501
3,833
668
6,108
5,192
916
7,346
6,620
726
7,513
6,721
792
7,262
6,518
744
8,597
8,046
552'
9,807
9,115
692
4,501
3,833
668
67 Nonmonetary international and regional
organizations
International
Latin American regional
Other regional
4,464
2,830
1,272
362
3,224
2,503
589
133
4,772
3,825
684
263
3,817
3,030
613
175
4,240
2,881
961
397
4,418
3,084
690
644
4,945
3,390
1,201
353
5,769'
4,450'
919
400
5,841
4,704
586
551
4,772
3,825
684
263
24 Canada
45
46
47
48
49
50
51
52
53
54
55
56
China
Mainland
Taiwan
Hong Kong
India
Indonesia
Israel
Japan
Korea
Philippines
Thailand
Middle-East oil-exporting countries
Other
57
58
59
60
61
62
63
Egypt
Morocco
South Africa
Zaire
Oil-exporting countries
Other
68
69
70
1. Includes the Bank for International Settlements and Eastern European
countries that are not listed in line 23.
2. Comprises Bulgaria, Czechoslovakia, the German Democratic Republic,
Hungary, Poland, and Romania.
3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
5. Excludes "holdings of dollars" of the International Monetary Fund.
6. Asian, African, Middle Eastern, and European regional organizations,
except the Bank for International Settlements, which is included in "Other
Western Europe."
A61
A62
International Statistics • April 1990
3.18 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1
Payable in U.S. Dollars
Millions of dollars, end of period
1989
Area and country
1987
1988
1989
June
July
Aug.
Sept.
Oct.
Nov.'
Dec/'
1 Total
459,877
491,165
534,186
491,103
481,051
488,861
499,388
514,686r
534,375
534,186
2 Foreign countries
456,472
489,094
530,554
487,626
477,264
485,737
496,466
512,009'
531,638
530,554
102,348
793
9,397
717
1,010
13,548
2,039
462
7,460
2,619
934
477
1,853
2,254
2,718
1,680
50,823
1,700
619
389
852
116,928
483
8,515
483
1,065
13,243
2,329
433
7,936
2,541
455
261
1,823
1,977
3,895
1,233
65,706
1,390
1,152
1,255
754
118,930
505
6,388
582
1,026
16,146
2,850
788
6,661
1,902
611
375
1,868
1,840
6,137
1,049
65,401
1,329
1,302
1,234
937
112,201
809
7,781
774
1,175
15,575
3,695
632
6,813
2,032
667
328
2,190
1,946
5,485
886
56,844
1,359
1,161
1,212
838
106,459
854
7,558
562
1,395
16,008
3,461
602
5,994
1,957
796
283
2,092
2,003
4,123
891
53,464
1,406
974
1,227
810
107,359
549
7,510
768
1,401
16,415
3,316
624
5,494
1,454
665
264
1,738
2,046
4,479
960
54,809
1,346
1,247
1,456
819
111,180
480
7,404
557
1,233
16,249
3,463
634
6,043
1,994
644
252
1,684
2,286
5,018
1,028
57,187
1,338
1,312
1,574
799
113,398'
575'
7,497'
513
1,707
16,391
3,371
650
5,577
1,886'
647
258
1,733
2,087
4,522
1,021
59,838'
1,373
1,504
1,453
794
111,992
559
6,606
609
1,129
16,055
2,657
700
5,718
2,259
635
275
1,840
2,555
4,940
1,044
59,919
1,281
1,245
1,080
883
118,930
505
6,388
582
1,026
16,146
2,850
788
6,661
1,902
611
375
1,868
1,840
6,137
1,049
65,401
1,329
1,302
1,234
937
3 Europe
4
Austria
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 Europe 2
22
U.S.S.R
23
Other Eastern Europe
24 Canada
25,368
18,889
16,181
16,236
14,493
15,073
14,763
13,800
16,177
16,181
25 Latin America and Caribbean
26
Argentina
27
Bahamas
28
Bermuda
29
Brazil
30
British West Indies
Chile
31
32
Colombia
33
Cuba
34
Ecuador
35
Guatemala 4
36 Jamaica
37
Mexico
38
Netherlands Antilles
39
Panama
40
Peru
41
Uruguay
42
Venezuela
43
Other Latin America and Caribbean
214,789
11,996
64,587
471
25,897
50,042
6,308
2,740
1
2,286
144
188
29,532
980
4,744
1,329
963
10,843
1,738
214,264
11,826
66,954
483
25,735
55,888
5,217
2,944
1
2,075
198
212
24,637
1,306
2,521
1,013
910
10,733
1,612
230,212
9,444
78,108
1,315
23,891
67,991
4,353
2,707
1
1,698
197
297
23,520
1,835
1,739
770
928
9,688
1,729
219,855
10,840
66,611
391
25,675
65,359
4,863
2,583
1
1,895
201
286
23,703
1,179
2,423
874
896
10,569
1,503
217,371
10,705
70,488
463
25,824
59,670
4,793
2,525
9
1,933
189
270
23,369
1,159
2,320
867
854
10,269
1,665
216,073
10,730
68,113
522
25,597
61,493
4,803
2,504
1
1,918
203
272
23,169
1,022
2,030
870
866
10,024
1,936
219,948
10,460
70,906
1,104
24,999
63,543
4,707
2,477
1
1,905
196
282
22,813
1,103
1,834
823
899
10,064
1,833
220,182'
10,444'
71,420'
804
25,075
63,023'
4,601
2,800
1
1,864
188
270
22,751
1,120'
1,832'
851
903
10,269
1,965'
231,958
10,274
78,568
842
24,418
68,530
4,474
2,784
1
1,858
190
260
23,292
1,018
1,792
836
915
10,119
1,787
230,212
9,444
78,108
1,315
23,891
67,991
4,353
2,707
1
1,698
197
297
23,520
1,835
1,739
770
928
9,688
1,729
44 Asia
China
Mainland
46
Taiwan
47
Hong Kong
48
India
49
Indonesia
50
Israel
51 Japan
52
Korea
53
Philippines
54
Thailand
55
Middle East oil-exporting countries
56
Other Asia
106,096
130,881
156,987
130,590
130,369
137,687
140,704
153,737'
158,752
156,987
968
4,592
8,218
510
580
1,363
68,658
5,148
2,071
496
4,858
8,635
762
4,184
10,143
560
674
1,136
90,149
5,213
1,876
848
6,213
9,122
635
2,734
11,119
621
651
812
110,876
5,332
1,344
1,153
10,150
11,559
920
4,058
8,557
537
671
1,021
91,103
5,608
1,763
1,056
6,550
8,745
644
3,949
8,153
477
645
964
91,806
5,774
1,607
1,060
5,550
9,741
575
3,356
8,800
547
614
911
96,118
6,007
1,543
1,117
8,879
9,221
615
3,331
10,358
638
615
859
97,699
5,686
1,617
1,203
8,581
9,502
594
2,831
10,047'
617
685
1,185
110,425'
5,713
1,549
1,058
8,365'
10,669
610
2,677
10,442
637
655
758
114,498
5,838
1,478
1,076
8,675
11,408
635
2,734
11,119
621
651
812
110,876
5,332
1,344
1,153
10,150
11,559
57 Africa
58
Egypt
59
Morocco
60
South Africa
Zaire
61
62
Oil-exporting countries 6
63
Other
4,742
521
542
1,507
15
1,003
1,153
5,718
507
511
1,681
17
1,523
1,479
5,929
502
559
1,628
16
1,689
1,535
6,075
534
531
1,746
17
1,503
1,744
6,066
577
518
1,702
17
1,587
1,664
6,032
494
535
1,713
16
1,608
1,666
6,028
501
524
1,709
20
1,629
1,645
5,763
475
538
1,679
15
1,546
1,510
6,009
471
547
1,686
16
1,641
1,648
5,929
502
559
1,628
16
1,689
1,535
64 Other countries
65
Australia
66
All other
3,129
2,100
1,029
2,413
1,520
894
2,315
1,785
530
2,670
1,307
1,363
2,505
1,518
987
3,512
2,499
1,013
3,843
3,078
765
5,129
4,301
828
6,750
6,174
576
2,315
1,785
530
67 Nonmonetary international and regional
organizations'
3,404
2,071
3,631
3,477
3,787
3,124
2,922
2,677'
2,737
3,631
1. Reporting banks include all kinds of depository institutions besides commercial banks, as well as some brokers and dealers.
2. Includes the Bank for International Settlements. Beginning April 1978, also
includes Eastern European countries not listed in line 23.
3. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German
Democratic Republic, Hungary, Poland, and Romania.
4. Included in "Other Latin America and Caribbean" through March 1978.
5. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
6. Comprises Algeria, Gabon, Libya, and Nigeria.
7. Excludes the Bank for International Settlements, which is included in
"Other Western Europe."
Nonbank-Reported
Data
3.19 BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the
United States1
Payable in U.S. Dollars
Millions of dollars, end of period
1989
Type of claim
1987
1988
1989
June
July
Aug.
Sept.
1 Total
497,635
538,689
2 Banks' own claims on foreigners
Foreign public borrowers
3
4
Own foreign offices
5
Unaffiliated foreign banks
Deposits
6
7
Other
8
All other foreigners
459,877
64,605
224,727
127,609
60,687
66,922
42,936
491,165
62,658
257,436
129,425
65,898
63,527
41,646
37,758
3,692
47,524
8,289
49,531
11,153
52,154
11,259
26,696
25,700
22,017
24,286
7,370
13,535
16,362
16,609
23,107
19,5%
16,810
12,828
40,909
45,568
9 Claims of banks' domestic customers 3 ...
11
540,634
491,103
63,164
258,548
128,295
68,177
60,119
41,095
534,186
60,484
295,567
134,725
77,826
56,899
43,410
Oct/
Nov/
Dec. p
514,686
63,425
276,547
131,249
72,048
59,200
43,464
534,375
62,259
2%,754
133,909
75,595
58,314
41,452
534,186
60,484
295,567
134,725
77,826
56,899
43,410
44,665
46,220
n.a.
551,543
481,051
62,832
248,987
128,919
68,888
60,031
40,313
488,861
62,765
252,281
132,478
72,576
59,903
41,336
499,388
62,051
265,786
131,124
72,654
58,470
40,428
Negotiable and readily transferable
12 Outstanding collections and other
13 MEMO: Customer liability on
Dollar deposits in banks abroad,
reported by nonbanking business
enterprises in the United States . . . .
n.a.
46,740
48,485
49,575
46,486r
parent foreign bank.
3. 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.
4. Principally negotiable time certificates of deposit and bankers acceptances.
5. Includes demand and time deposits and negotiable and nonnegotiable
certificates of deposit denominated in U.S. dollars issued by banks abroad. For
description of changes in data reported by nonbanks, see July 1979 Bulletin,
p. 550.
1. 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.
Reporting banks include all kinds of depository institutions besides commercial
banks, as well as some brokers and dealers.
2. 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
3.20 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States1
Payable in U.S. Dollars
Millions of dollars, end of period
1988
Maturity; by borrower and area
1 Total
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
By borrower
Maturity of 1 year or less
Foreign public borrowers
All other foreigners
Maturity over 1 y e a r
Foreign public borrowers
All other foreigners
By area
Maturity of 1 year or less
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other 3
Maturity of over 1 y e a r
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other 3
1985
1989
1987
Dec.
Mar.
June
Sept/
227,903
232,295
235,130
233,184
231,686
231,374
236,330
160,824
26,302
134,522
67,078
34,512
32,567
160,555
24,842
135,714
71,740
39,103
32,637
163,997
25,889
138,108
71,133
38,625
32,507
172,634
26,562
146,071
60,550
35,291
25,259
168,608
24,479
144,129
63,078
37,935
25,142
167,307
23,759
143,548
64,067
38,108
25,959
169,100
24,200
144,900
67,230
41,839
25,391
56,585
6,401
63,328
27,966
3,753
2,791
61,784
5,895
56,271
29,457
2,882
4,267
59,027
5,680
56,535
35,919
2,833
4,003
55,909
6,282
57,991
46,224
3,337
2,891
57,741
5,119
53,268
45,727
3,610
3,143
58,340
5,693
50,605
45,303
3,601
3,765
52,437
6,206
52,010
51,195
3,516
3,735
7,634
1,805
50,674
4,502
1,538
926
6,737
1,925
56,719
4,043
1,539
111
6,6%
2,661
53,817
3,830
1,747
2,381
4,666
1,922
47,547
3,613
2,301
501
4,508
2,309
49,790
3,699
2,292
480
4,664
2,592
50,107
3,823
2,408
472
8,856
2,459
48,627
4,232
2,472
584
1. Reporting banks include all kinds of depository institutions besides commercial banks, as well as some brokers and dealers.
1986
2. Remaining time to maturity,
3. Includes nonmonetary international and regional organizations.
A63
A64
3.21
International Statistics • April 1990
CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks1-2
Billions of dollars, end of period
1987
Area or country
1 Total
1985
1988
1989
1986
Sept.
Dec.
Mar.
June
Sept.
Dec.
Mar.
June
Sept.
389.1
386.5
387.9
382.4
370.9'
.ISl^
354.0'
346.3'
345.3'
339.2
344.6
147.0
9.4
12.3
10.5
9.7
3.8
2.8
4.4
63.3
6.8
24.1
156.6
8.4
13.6
11.6
9.0
4.6
2.4
5.8
70.9
5.2
25.1
154.8
8.1
13.6
10.5
6.8
4.8
2.6
5.4
72.0
4.6
26.4
159.7
10.0
13.7
12.6
7.5
4.1
2.1
5.6
68.8
5.5
29.8
156.3'"
9.1
11.8
11.8
7.4
3.3
2.1
5.1
71.7
4.7
29.2'
150.7'
9.2
10.9
10.6
6.3
3.2
1.9
5.6
70.4
5.3
27.3'
148.7'
9.5
10.3
9.2
5.6
2.9
1.9
5.2
67.6
4.9
31.6'
152.7'
9.0
10.5
10.3
6.8
2.7
1.8
5.4
66.2
5.0
34^
145.1'
8.6
11.2
10.2
5.2
2.8
2.3
5.1
65.3
4.0
30.4'
144.7
7.8
10.8
10.6
6.1
2.8
1.8
5.4
64.2
5.1
30.1
145.7
6.9
11.1
10.4
6.8
2.4
2.0
6.1
63.3
5.9
30.8
13 Other developed countries
14 Austria
15 Denmark
16 Finland
17 Greece
18 Norway
19 Portugal
20
Spain
21 Turkey
22
Other Western Europe
23
South Africa
24
Australia
30.3
1.6
2.4
1.6
2.6
2.9
1.3
5.8
2.0
2.0
3.2
5.0
26.1
1.7
1.7
1.4
2.3
2.4
.9
5.8
2.0
1.5
3.0
3.4
26.3
1.8
1.6
1.4
1.9
2.0
.9
7.4
1.9
1.6
2.9
2.9
26.4
1.9
1.7
1.2
2.0
2.2
.6
8.0
2.0
1.6
2.9
2.4
26.4
1.6
1.4
1.0
2.3
1.9
.5
8.9
2.0
1.9
2.8
2.0
24.0
1.6
1.1
1.2
2.1
1.9
.4
7.2
1.8
1.7
2.8
2.2
23.0
1.6
1.2
1.3
2.1
2.0
.4
6.3
1.6
1.9
2.7
1.8
21.0
1.5
1.1
1.1
1.8
1.8
.4
6.2
1.5
1.3
2.4
1.8
21.0
1.4
1.1
1.0
2.1
1.6
.4
6.6
1.3
1.1
2.2
2.4
21.1
1.7
1.4
1.0
2.3
1.8
.6
6.2
1.1
1.1
2.1
1.9
20.9
1.5
1.1
1.1
2.3
1.4
.4
6.9
1.1
1.0
2.1
2.1
25 OPEC countries 3
26
Ecuador
27
Venezuela
28
Indonesia
29
Middle East countries
30
African countries
21.5
2.1
9.0
3.0
5.4
2.0
19.4
2.2
8.7
2.5
4.3
1.8
19.2
2.1
8.3
2.0
5.0
1.8
17.4
1.9
8.1
1.9
3.6
1.9
17.6
1.9
8.1
1.8
3.9
1.9
17.0
1.8
8.0
1.8
3.5
1.9
17.9
1.8
7.9
1.8
4.6
1.9
16.6
1.7
7.9
1.7
3.4
1.9
16.2
1.6
7.9
1.7
3.3
1.7
16.0
1.5
7.5
1.9
3.4
1.6
16.2
1.5
7.3
2.0
3.5
1.9
105.0
99.6
98.0
97.8
94.4
91.8
87.2
85.3
85.4
83.1
80.8
8.9
25.5
7.0
2.6
24.3
1.8
3.5
9.5
25.3
7.1
2.1
24.0
1.4
3.1
9.4
25.1
7.1
2.0
24.7
1.2
2.8
9.5
24.7
6.9
2.0
23.5
1.1
2.8
9.6
23.8
6.6
2.0
22.4
1.1
2.8
9.5
23.7
6.4
2.2
21.1
.9
2.6
9.3
22.4
6.3
2.1
20.4
.8
2.5
9.0
22.4
5.6
2.1
18.8
.8
2.6
8.4
22.7
5.7
1.9
18.0
.7
2.7
7.9
22.0
5.1
1.7
17.5
.6
2.6
7.6
20.8
4.9
1.6
17.0
.6
2.9
2 G-10 countries and Switzerland
Belgium-Luxembourg
3
4
France
5 Germany
6
Italy
Netherlands
7
8
Sweden
9
Switzerland
10 United Kingdom
11 Canada
12 Japan
31 Non-OPEC developing countries
32
33
34
35
36
37
38
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other Latin America
39
40
41
42
43
44
45
46
47
Asia
China
Mainland
Taiwan
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia
.5
4.5
1.2
1.6
9.3
2.4
5.7
1.4
1.0
.4
4.9
1.2
1.5
6.7
2.1
5.4
.9
.7
.3
6.0
1.9
1.3
5.0
1.6
5.4
.7
.7
.3
8.2
1.9
1.0
5.0
1.5
5.2
.7
.7
.4
6.1
2.1
1.0
5.7
1.5
5.1
1.0
.7
.4
4.9
2.3
1.0
5.9
1.5
4.9
1.1
.8
.2
3.2
2.0
1.0
6.0
1.7
4.7
1.2
.8
.3
3.7 .
2.1
1.2
6.1
1.6
4.5
1.1
.9
.5
4.9
2.6
.9
6.1
1.7
4.4
1.0
.8
.3
5.2
2.4
.8
6.6
1.6
4.4
1.0
.8
.3
5.0
2.7
.7
6.5
1.7
4.0
1.3
1.0
48
49
50
51
Africa
Egypt
Morocco
Zaire
Other Africa 4
1.0
.9
.1
1.9
.7
.9
.1
1.6
.6
.9
.1
1.3
.6
.9
.0
1.3
.5
.9
.1
1.2
.6
.9
.1
1.2
.5
.8
.0
1.2
.4
.9
.0
1.1
.5
.9
.0
1.1
.6
.9
.0
1.1
.5
.8
.0
1.0
52 Eastern Europe
53
U.S.S.R
54
Yugoslavia
55
Other
4.4
.1
2.4
1.9
3.5
.1
2.0
1.4
3.6
.4
1.9
1.2
3.2
.3
1.8
1.1
3.1
.3
1.9
1.0
3.3
.4
1.9
1.0
3.1
.4
1.8
1.0
3.6
.7
1.8
1.1
3.5
.7
1.7
1.1
3.4
.6
1.7
1.1
3.5
.8
1.7
1.1
56 Offshore banking centers
57
Bahamas
58
Bermuda
59
Cayman Islands and other British West Indies
60
Netherlands Antilles
61
Panama
62
Lebanon
63
Hong Kong
64
Singapore
65
Others 6
64.0
21.5
.7
12.2
2.2
6.0
.1
11.5
9.8
.0
61.5
22.4
.6
12.3
1.8
4.0
.1
11.1
9.2
.0
63.7
25.7
.6
11.9
1.2
3.7
.1
12.3
8.1
.0
54.5
17.3
.6
13.5
1.2
3.7
.1
11.2
7.0
.0
51.5
15.9
.8
11.6
1.3
3.2
.1
11.3
7.4
.0
43.0
8.9
1.0
10.3
1.2
3.0
.1
11.6
6.9
.0
47.3
12.9
.9
11.9
1.2
2.6
.1
10.5
7.0
.0
44.2
48.5
15.8
1.1
12.0
.9
2.2
.1
9.6
6.8
.0
43.1
.9
12.9
1.0
2.5
.1
9.6
6.1
.0
.7
10.8
.9
1.9
.1
10.4
7.3
.0
48.7
11.2
1.3
15.1
1.0
1.5
.1
10.7
7.8
.0
66 Miscellaneous and unallocated 7
16.9
19.8
22.3
23.2
21.5
22.2
26.7
22.6
25.1
27.4
28.4
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
adjusted 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 3.14 (the sum of lines 7 through 10) with the claims
of U.S. offices in table 3.18 (excluding those held by agencies and branches of
foreign banks and those constituting claims on own foreign branches).
2. Beginning with June 1984 data, reported claims held by foreign branches
have been reduced by an increase in the reporting threshold for "shell" branches
11.0
11.0
from $50 million to $150 million equivalent in total assets, the threshold now
applicable to all reporting branches.
3. This group comprises the Organization of Petroleum Exporting Countries
shown individually, other members of OPEC (Algeria, Gabon, Iran, Iraq, Kuwait,
Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates), and Bahrain and
Oman (not formally members of OPEC).
4. Excludes Liberia.
5. Includes Canal Zone beginning December 1979.
6. Foreign branch claims only.
7. Includes New Zealand, Liberia, and international and regional organizations.
Nonbank-Reported
Data
A65
3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the
United States1
Millions of dollars, end of period
1989
1988
Type, and area or country
1985
1986
1987
June
Sept.
Dec.
Mar.
June
Sept.
1 Total
27,825
25,587
28,302
30,154
32,405
33,624
37,440
36,967
34,855
2 Payable in dollars
3 Payable in foreign currencies
24,2%
3,529
21,749
3,838
22,785
5,517
24,852
5,302
27,176
5,229
28,037
5,586
31,649
5,790
31,894
5,073
30,042
4,813
By type
4 Financial liabilities
5 Payable in dollars
6 Payable in foreign currencies
13,600
11,257
2,343
12,133
9,609
2,524
12,424
8,643
3,781
13,934
10,274
3,660
15,079
11,485
3,594
15,118
11,250
3,868
17,532
13,452
4,080
16,920
13,060
3,860
16,028
12,224
3,804
14,225
6,685
7,540
13,039
1,186
13,454
6,450
7,004
12,140
1,314
15,878
7,305
8,573
14,142
1,737
16,220
6,768
9,452
14,578
1,642
17,325
6,480
10,845
15,691
1,635
18,506
6,454
12,052
16,788
1,718
19,908
7,009
12,899
18,197
1,711
20,047
6,339
13,708
18,834
1,213
18,827
6,415
12,412
17,818
1,009
7,700
349
857
376
861
610
4,305
7,917
270
661
368
542
646
5,140
8,320
213
382
551
866
558
5,557
9,071
282
371
544
862
638
6,201
10,497
339
372
690
9%
687
7,243
9,912
289
267
749
879
1,163
6,418
12,511
320
249
741
933
954
9,121
11,217
357
274
838
834
936
7,799
10,135
308
262
807
853
839
6,859
7 Commercial liabilities
8 Trade payables
9
Advance receipts and other liabilities . .
10 Payable in dollars
11 Payable in foreign currencies
12
13
14
15
16
17
18
By area or country
Financial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
19
Canada
839
399
360
412
431
650
616
544
599
20
21
22
23
24
25
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
3,184
1,123
4
29
1,843
15
3
1,944
614
4
32
1,146
22
0
1,189
318
0
25
778
13
0
1,448
250
0
0
1,154
26
0
1,057
238
0
0
812
2
0
1,239
184
0
0
645
1
0
677
189
0
0
471
15
0
1,216
165
0
0
621
17
0
1,315
186
0
0
698
4
0
27
28
29
Asia
Japan
Middle East oil-exporting countries .
1,815
1,198
82
1,805
1,398
8
2,451
2,042
8
2,928
2,331
11
3,088
2,435
4
3,313
2,563
3
3,722
2,950
1
3,842
3,082
12
3,878
3,130
2
30
Africa
12
0
1
1
4
1
2
1
3
1
1
0
5
3
3
2
4
2
50
67
100
74
3
2
2
97
97
4,074
62
453
607
364
379
976
4,446
101
352
715
424
385
1,341
5,516
132
426
909
423
559
1,599
5,755
147
408
791
508
482
1,804
6,688
206
438
1,185
647
486
2,110
7,348
170
459
1,699
591
417
2,063
7,944
134
579
1,372
670
458
2,585
7,865
117
549
1,190
689
458
2,709
7,985
138
767
1,196
549
416
2,729
31
32
33
34
35
36
37
38
39
40
Oil-exporting countries
All other"
Commercial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
1,449
1,405
1,301
1,167
1,109
1,218
1,163
1,132
1,191
41
42
43
44
45
46
47
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,088
12
77
58
44
430
212
924
32
156
61
49
217
216
864
18
168
46
19
189
162
1,035
61
272
54
28
233
140
997
19
222
58
30
177
204
1,118
49
286
95
34
179
177
1,267
35
426
103
31
198
179
1,669
34
388
541
42
182
185
1,092
27
305
113
30
191
140
48
49
50
Asia
Japan
Middle East oil-exporting countries '
6,046
1,799
2,829
5,080
2,042
1,679
6,565
2,578
1,964
6,286
2,659
1,320
6,638
2,763
1,298
6,916
3,091
1,386
7,329
3,059
1,526
6,970
2,712
1,431
6,838
2,639
1,406
51
52
Africa
Oil-exporting countries
587
238
619
197
574
135
626
115
477
106
578
202
706
272
768
253
643
246
53
All other 4
982
980
1,057
1,351
1,415
1,328
1,499
1,643
1,078
1. For a description of the changes in the International Statistics tables, see
July 1979 Bulletin, p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
5. Revisions include a reclassification of transactions, which also affects the
totals for Asia and the grand totals.
A66
International Statistics • April 1990
3.23 CLAIMS ON UNAFFILIATED FOREIGNERS
United States1
Reported by Nonbanking Business Enterprises in the
Millions of dollars, end of period
1988
Type, and area or country
1985
1986
1989
1987
June
Sept.
Dec.
Mar.
June
Sept.
1 Total
28,876
36,265
30,964
37,924
38,465
33,574
31,667
33,833
32,110r
2 Payable in dollars
3 Payable in foreign currencies
26,574
2,302
33,867
2,399
28,502
2,462
35,828
2,097
35,967
2,498
31,252
2,323
29,371
2,296
31,727
2,106
29,873r
2,Til'
18,891
15,526
14,911
615
3,364
2,330
1,035
26,273
19,916
19,331
585
6,357
5,005
1,352
20,363
14,903
13,775
1,128
5,460
4,646
814
26,537
19,750
18,964
786
6,787
5,892
895
27,341
19,383
18,370
1,013
7,958
7,016
942
21,638
15,906
14,820
1,086
5,732
5,001
731
19,743
14,838
13,942
896
4,905
4,012
893
21,774
17,043
16,131
911
4,731
4,016
716
19,403'
13,007'
12,093'
914
6,396'
5,556'
840
11 Commercial claims
12 Trade receivables
13 Advance payments and other claims
9,986
8,696
1,290
9,992
8,783
1,209
10,600
9,535
1,065
11,387
10,347
1,040
11,123
10,124
1,000
11,937
10,858
1,079
11,924
10,660
1,265
12,059
10,857
1,202
12,707'
11,343'
1,364'
14
15
9,333
652
9,530
462
10,081
519
10,971
415
10,581
543
11,432
505
11,417
507
11,581
479
12,225''
483'
6,929
10
184
223
161
74
6,007
10,744
41
138
116
151
185
9,855
9,531
7
332
102
350
65
8,467
11,580
16
181
168
335
105
10,498
10,719
49
278
123
356
84
9,503
10,051
10
224
138
344
215
8,768
9,208
11
230
180
383
203
7,890
8,629
155
191
218
290
70
7,390
7,764'
166
209
147
292
123
6,567'
By type
4 Financial claims
5 Deposits
6
Payable in dollars
V
Payable in foreign currencies
8
Other financial claims
9
Payable in dollars
Payable in foreign currencies
10
16
17
18
19
20
21
22
Payable in dollars
Payable in foreign currencies
By area or country
Financial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
23
Canada
3,260
4,808
2,844
2,917
3,612
2,339
2,210
2,606
2,428'
24
25
26
27
28
29
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
7,846
2,698
6
78
4,571
180
48
9,291
2,628
6
86
6,078
174
21
7,012
1,994
7
63
4,433
172
19
10,952
4,176
87
46
6,142
146
27
11,862
4,069
188
44
7,098
133
27
8,142
1,857
19
47
5,733
151
21
7,233
2,172
25
49
4,566
117
25
9,340
1,880
125
78
6,848
114
31
8,309
1,707'
33'
70
6,111
105
36
31
32
33
Asia
Japan
Middle East oil-exporting countries 2
731
475
4
1,317
999
7
879
605
8
971
647
5
1,027
737
5
830
561
5
951
627
8
1,082
630
8
801'
440
7
34
35
Africa
Oil-exporting countries 3
103
29
85
28
65
7
60
9
95
9
106
10
89
8
80
8
75
8
21
28
33
58
26
170
52
37
27
3,533
175
426
346
284
284
898
3,725
133
431
444
164
217
999
4,180
178
650
562
133
185
1,073
4,713
158
687
774
172
262
1,107
4,313
172
544
615
146
183
1,191
5,016
177
673
612
208
322
1,306
4,930
201
760
646
158
249
1,283
4,934
201
775
642
194
220
1,355
5,168'
208
817'
668'
175'
217
1,466'
36
37
38
39
40
41
42
43
All other
4
Commercial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
44
Canada
1,023
934
936
939
979
975
1,114
1,181
1,221'
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,753
13
93
206
6
510
157
1,857
28
193
234
39
412
237
1,930
19
170
226
26
368
283
2,067
13
174
232
25
411
304
2,104
12
161
234
22
463
266
2,229
36
229
298
21
457
226
2,103
34
234
277
23
477
211
2,083
14
236
313
29
428
228
2,112'
10
270
231'
32
499'
187
52
53
54
Asia
Japan
Middle East oil-exporting countries 2
2,982
1,016
638
2,755
881
563
2,915
1,158
450
2,992
1,169
446
3,028
967
437
2,954
934
441
3,097
1,038
421
3,115
990
423
3,443'
1,176'
398'
55
56
Africa
Oil-exporting countries 3
437
130
500
139
401
144
425
136
425
137
435
122
386
95
401
111
387'
79
57
All other 4
257
222
238
251
274
328
294
345
377
1. For a description of the changes in the International Statistics tables, see
July 1979 Bulletin, p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
Securities Holdings and Transactions
A67
3.24 FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
1989
1989
Transactions, and area or country
1988
1989
Jan.Dec.
June
July
Aug.
Sept.
Oct.
Nov/
Dec. p
19,595
17,047
22,350
20,988
13,829
14,947
16,211
16,868
U.S. corporate securities
STOCKS
1
2
Foreign purchases
Foreign sales
181,185
183,185
213,778
203,386
213,778
203,386
24,316
20,646
17,122
15,087
22,112
20,942
3
Net purchases, or sales (—)
-2,000
10,392
10,392
3,670
2,035
1,171
2,548
1,363
-1,118
-657
4
Foreign countries
-1,825
10,636
10,636
3,688
2,052
1,154
2,599
1,340
-1,116
-609
5
6
7
8
9
10
11
12
13
14
15
16
17
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Japan
Africa
Other countries
-3,350
-281
218
-535
-2,243
-954
1,087
1,238
-2,474
1,365
1,922
188
121
1,049
-700
-865
168
-3,470
4,528
-864
3,101
3,530
3,414
3,348
131
274
1,049
-700
-865
168
-3,470
4,528
-864
3,101
3,530
3,414
3,348
131
274
418
-15
-155
131
-114
329
168
166
1,679
1,201
1,215
16
40
779
75
-79
12
-23
546
8
109
456
729
626
2
-30
-98
-251
-238
-63
-333
773
14
250
554
423
424
22
-11
1,461
-5
-65
37
64
894
-265
602
110
631
611
24
38
-107
-265
-117
226
-244
-34
-140
149
112
1,138
975
-6
193
-1,655
-296
-119
-34
-509
-718
-137
-24
303
342
310
19
37
520
-255
-41
-9
-442
1,193
-459
-478
69
-124
-53
9
-147
18
Nonmonetary international and
regional organizations
-176
-245
-245
-18
-17
17
-52
23
-1
-48
13,587
BONDS 2
19
Foreign purchases
86,381
120,346
120,346
10,855
10,045
10,944
8,603
10,930
11,133
20
Foreign sales
58,417
86,254
86,254
9,185
7,552
9,361
6,857
6,772
6,656
9,300
21
Net purchases, or sales ( - )
27,964
34,093
34,093
1,670
2,494
1,583
1,746
4,158
4,476
4,287
22
Foreign countries
28,506
33,748
33,748
1,542
2,516
1,607
1,740
4,106
4,464
4,235
23
74
7A
76
7,7
78
2.9
30
31
37,
33
34
35
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Japan
Africa
Other countries
17,239
143
1,344
1,514
505
13,084
711
1,931
-178
8,900
7,686
-8
-89
19,791
372
-239
850
-165
18,405
1,112
3,682
-171
9,060
6,331
56
218
19,791
372
-239
850
-165
18,405
1,112
3,682
-171
9,060
6,331
56
218
2,132
6
-162
395
-110
1,881
-188
271
-619
-59
-209
1
4
1,976
121
-53
-22
81
1,937
79
300
19
35
-44
3
103
-138
-35
-121
96
-201
-9
76
63
44
1,574
1,167
5
-17
1,400
78
-33
28
-27
1,311
155
233
20
-108
-179
-3
42
1,986
-41
113
30
74
1,711
175
247
140
1,553
1,263
0
4
2,712
-14
-117
143
54
2,328
-86
539
-57
1,343
1,045
8
4
1,328
6
-33
41
-277
1,852
204
492
242
1,954
1,728
27
-11
36
Nonmonetary international and
regional organizations
-542
345
345
128
-22
-24
6
53
12
52
Foreign securities
37
38
39
Stocks, net purchases, or sales ( - ) 3
Foreign purchases
Foreign sales
-1,959
-13,683
-13,683
-2,100
-808
-1,706
-648
-L,341R
-921
-2,008
75,356
77,315
103,054
116,737
103,054
116,737
9,124
11,225
7,640
8,448
9,489
11,195
8,473
9,121
10,309
11,650'
9,417
10,338
9,637
11,645
-5,462
234,183
239,645
-1,506
21,061
22,567
-1,406
20,222
21,628
1,005
24,106
23,101
-1,845
18,325
20,170
-615
21,266
21,881
514
20,492
19,977
-18
18,668
18,686
-3,607
-2,214
-701
-2,493
-l,956r
-1,926
40
41
42
Bonds, net purchases, or sales ( - )
Foreign purchases
Foreign sales
-7,434
218,521
225,955
-5,462
234,183
239,645
43
Net purchases, or sales (—), of stocks and bonds . . . .
-9,393
-19,145
-19,145
44
Foreign countries
-9,873
-19,120
-19,120
-3,407
-2,366
-887
45
46
47
48
49
50
Europe
Canada
Latin America and Caribbean
-7,864
-3,747
1,384
979
-54
-571
-18,409
-4,066
435
3,014
93
-187
-18,409
-4,066
435
3,014
93
-187
-3,945
-705
27
1,262
3
-49
-2,534
-697
-75
921
12
8
-860
-250
314
327
-4
-414
-2,099
-201
-61
412
-3
26
480
-25
-25
-200
152
186
-568
51
Africa
Other countries
Nonmonetary international and
regional organizations
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 securi-
-2,487
924
187 R
-232
12
-21
-338
-407
-2,026
-484
-2,034
-181
-325
-102
3
13
108
-563
-967
-269
-458
56
168
77
8
ties sold abroad by U.S. corporations organized to finance direct investments
abroad.
3. As a result of the merger of a U.S. and U.K. company in July 1989, the
former stockholders of the U.S. company received $5,453 million in shares of the
new combined U.K. company. This transaction is not reflected in the data above.
A68
International Statistics • April 1990
3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES
Foreign Transactions
Millions of dollars
1989
Country or area
1988
1989
1989
Jan.Dec.
June
July
Aug.
Sept.
Oct.
Nov.
Dec. p
Transactions, net purchases or sales ( - ) during period 1
1 Estimated total 2
48,832
54,691
54,691
-5,202
-1,317
21,979
4,616
-2,050 r
8,196
48,170
52,714
52,714
-5,322
-761
22,409
5,698
-3,304 r
8,312
-362
3 Europe 2
Belgium-Luxembourg
4
5 Germany
6
Netherlands
7
Sweden
Switzerland 2
8
9
United Kingdom
10 Other Western Europe
Eastern Europe
11
12 Canada
14,319
923
-5,268
-356
-323
-1,074
9,640
10,786
-10
3,761
36,035
1,053
7,922
-1,137
889
1,097
20,217
5,982
14
621
36,035
1,053
7,922
-1,137
889
1,097
20,217
5,982
14
621
-1,305
13
-1,106
-674
647
378
-133
-423
-6
-478
4,357
82
2,622
100
110
-361
1,024
786
-5
-533
15,191
413
2,503
1,304
241
-748
9,863
1,614
0
1,028
2,494
216
510
302
-50
374
339
802
0
-373
—2,137r
90
137
-1,200
140
-187
-9iy
-199
0
150
4,260
210
1,666
54
-232
-780
3,799
-481
26
375
2,434
-85
1,735
-386
29
-355
1,277
209
10
164
13 Latin America and Caribbean
14
Venezuela
15 Other Latin America and Caribbean
16 Netherlands Antilles
17 Asia
18 Japan
19
20 M o t h e r
713
-109
1,130
-308
27,603
21,750
-13
1,786
494
311
-292
475
14,008
2,393
116
1,439
494
311
-292
475
14,008
2,393
116
1,439
643
1
-14
656
-5,581
-7,780
66
1,332
839
71
104
665
-4,941
-5,360
-5
-478
-280
120
217
-617
7,121
3,009
-48
-602
23
29
-506
500
2,857
2,402
0
697
-1,439
72
34
-1,545
-131r
1,330
13
240
1,372
163
576
634
1,646
1,085
9
650
-886
-36
-610
-240
-2,669
-1,036
39
555
661
1,106
-31
1,978
1,473
231
1,978
1,473
231
120
-253
191
-557
-546
3
-431
-576
75
-1,082
-719
-228
1,254
1,158
160
-116
-143
0
1,511
1,335
0
48,170
26,624
21,546
52,714
26,949
25,764
52,714
26,949
25,764
-5,322
449
-5,772
-761
2,819
-3,580
22,409
9,957
12,452
5,698
799
4,900
-3,304'
—2,284r
-1,02c
8,312
1,686
6,627
-362
1,303
-1,665
1,963
1
8,146
-1
8,146
-1
667
0
435
0
3,681
0
695
0
-2,183
0
-26
-1
-640
0
2 Foreign countries
2
21 Nonmonetary international and regional organizations
International
22
23
Latin America regional
Memo
24 Foreign countries 2
25
Official institutions
26
Other foreign
27
28
Oil-exporting countries
Middle East 3
Africa 4
1. Estimated official and private transactions in marketable U.S. Treasury
securities with an original maturity of more than 1 year. Data are based on
monthly transactions reports. Excludes nonmarketable U.S. Treasury bonds and
notes held by official institutions of foreign countries.
2. Includes U.S. Treasury notes publicly issued to private foreign residents
denominated in foreign currencies.
1,149
3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
Interest and Exchange Rates
A69
3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS
Percent per year
Rate on Feb. 28, 1990
Rate on Feb. 28, 1990
Country
Rate on Feb. 28, 1990
Country
Percent
Month
effective
6.0
10.25
49.0
13.25
10.5
June 1989
Oct. 1989
Mar. 1981
Feb. 1990
Oct. 1989
Country
Percent
Germany, Fed. Rep. o f . . .
Italy
1. As of the end of February 1981, the rate is that at which the Bank of France
discounts Treasury bills for 7 to 10 days.
2. Minimum lending rate suspended as of Aug. 20, 1981.
NOTE. Rates shown are mainly those at which the central bank either discounts
10.0
6.0
13.5
4.25
7.0
Month
effective
Dec.
Oct.
Mar.
Dec.
Oct.
1989
1989
1989
1989
1989
Percent
Month
effective
8.0
6.0
June 1983
Oct. 1989
8.0
Oct. 1985
or makes advances against eligible commercial paper and/or government cornmercial banks or brokers. For countries with more than one rate applicable to
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.
3.27 FOREIGN SHORT-TERM INTEREST RATES
Percent per year, averages of daily figures
1989
Country, or type
1
2
3
4
5
6
7
8
9
10
Eurodollars
United Kingdom
Canada
Germany
Switzerland
Netherlands
France
Italy
Belgium
Japan
1987
1988
1990
1989
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
7.07
9.65
8.38
3.97
3.67
7.85
10.28
9.63
4.28
2.94
9.16
13.87
12.20
7.04
6.83
8.71
13.86
12.30
6.99
7.01
8.85
13.99
12.32
7.37
7.42
8.67
15.03
12.29
8.08
7.63
8.42
15.07
12.35
8.22
7.68
8.39
15.07
12.34
8.06
8.14
8.22
15.13
12.24
8.22
9.35
8.24
15.07
12.96
8.27
9.31
5.24
8.14
11.15
7.01
3.87
4.72
7.80
11.04
6.69
3.96
7.28
9.27
12.44
8.65
4.73
7.15
8.95
12.52
8.44
4.80
7.53
9.20
12.40
8.66
4.88
8.08
9.89
12.63
9.51
5.25
8.40
10.41
12.67
9.81
5.71
8.47
10.71
12.83
10.03
5.80
8.82
11.19
12.88
10.48
6.02
8.93
10.93
13.22
10.54
6.22
NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate.
A70
International Statistics • April 1990
3.28 FOREIGN EXCHANGE RATES1
Currency units per dollar
1989
Country/currency
1
2
3
4
5
6
Australia/dollar^
Austria/schilling
Belgium/franc
Canada/dollar
China, P.R./yuan
Denmark/krone
1987
1988
1990
1989
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
70.137
12.649
37.358
1.3259
3.7314
6.8478
78.409
12.357
36.785
1.2306
3.7314
6.7412
79.186
13.236
39.409
1.1842
3.7673
7.3210
77.271
13.733
40.841
1.1828
3.7314
7.5872
77.421
13.140
39.197
1.1749
3.7314
7.2781
78.295
12.860
38.403
1.1697
3.7314
7.1138
78.586
12.241
36.544
1.1613
4.1825
6.7610
78.111
11.904
35.451
1.1720
4.7339
6.5620
75.932
11.803
34.998
1.1965
4.7339
6.4729
7
8
9
10
11
12
13
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma
Hong Kong/dollar
India/rupee
Ireland/punt
4.4037
6.0122
1.7981
135.47
7.7986
12.943
148.79
4.1933
5.9595
1.7570
142.00
7.8072
13.900
152.49
4.2963
6.3802
1.8808
162.60
7.8008
16.213
141.80
4.4219
6.5855
1.9502
169.03
7.8078
16.745
136.71
4.2817
6.3339
1.8662
165.88
7.8081
16.819
142.50
4.2619
6.2225
1.8300
164.97
7.8140
16.925
144.73
4.1231
5.9391
1.7378
160.32
7.8102
16.932
151.65
4.0080
5.7568
1.6914
157.68
7.8116
16.963
156.31
3.9642
5.6897
1.6758
158.04
7.8103
16.990
158.28
14
15
16
17
18
19
20
Italy/lira
Japan/yen
Malaysia/ringgit
Netherlands/guilder
New Zealand/dollar 2 . . .
Norway /krone
Portugal/escudo
,297.03
144.60
2.5186
2.0264
59.328
6.7409
141.20
1,302.39
128.17
2.6190
1.9778
65.560
6.5243
144.27
1,372.28
138.07
2.7079
2.1219
59.354
6.9131
157.53
1,404.18
145.07
2.6980
2.1992
59.144
7.1264
163.36
1,369.24
142.21
2.6945
2.1072
55.937
6.9502
159.08
1,343.83
143.53
2.7028
2.0652
56.301
6.9010
157.65
1,291.93
143.69
2.7032
1.9619
59.458
6.7021
152.34
1,261.87
144.98
2.7041
1.9073
60.220
6.5462
149.17
1,243.68
145.69
2.7137
1.8892
59.156
6.4760
147.71
21
22
23
24
25
26
27
28
29
30
Singapore/dollar
South Africa/rand
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Taiwan/dollar
Thailand/baht
.
United Kingdom/pound 2
2.1059
2.0385
825.94
123.54
29.472
6.3469
1.4918
31.753
25.775
163.98
2.0133
2.2773
734.52
116.53
31.820
6.1370
1.4643
28.636
25.312
178.13
1.9511
2.6215
674.29
118.44
35.947
6.4559
1.6369
26.407
25.725
163.82
1.9769
2.7882
672.73
122.14
39.572
6.6103
1.6865
25.737
26.012
157.15
1.9622
2.6403
673.86
118.77
40.018
6.4580
1.6302
25.739
25.868
158.74
1.9588
2.6295
674.94
116.58
40.017
6.4306
1.6189
26.029
25.877
157.26
1.9183
2.5679
677.66
112.24
40.018
6.2920
1.5686
26.139
25.778
159.65
1.8873
2.5532
686.18
109.71
40.018
6.1776
1.5175
26.081
25.745
165.12
1.8641
2.5449
692.47
108.27
40.018
6.1250
1.4879
26.118
25.733
169.61
96.94
92.72
98.60
98.92
97.99
94.88
93.00
92.25
MEMO
31 United States/dollar 3 ...
1. Averages of certified noon buying rates in New York for cable transfers.
Data in this table also appear in the Board's G.5 (405) release. For address, see
inside front cover.
2. Value in U.S. cents.
3. Index of weighted-average exchange value of U.S. dollar against the
101.87
currencies of 10 industrial countries. The weight for each of the 10 countries is the
1972-76 average world trade of that country divided by the average world trade of
all 10 countries combined. Series revised as of August 1978 (see Federal Reserve
Bulletin, vol. 64, August 1978, p. 700).
A71
Guide to Tabular Presentation, Statistical
Releases, and Special Tables
GUIDE
TO TABULAR
PRESENTATION
Symbols and Abbreviations
c
e
p
r
*
Corrected
Estimated
Preliminary
Revised (Notation appears on column heading when
about half of the figures in that column are changed.)
Amounts insignificant in terms of the last decimal place
shown in the table (for example, less than 500,000
when the smallest unit given is millions)
0
n.a.
n.e.c.
IPCs
REITs
RPs
SMSAs
. ..
Calculated to be zero
Not available
Not elsewhere classified
Individuals, partnerships, and corporations
Real estate investment trusts
Repurchase agreements
Standard metropolitan statistical areas
Cell not applicable
General Information
Minus signs are used to indicate (1) a decrease, (2) a negative
figure, or (3) an outflow.
"U.S. government securities" may include guaranteed
issues of U.S. government agencies (the flow of funds figures
also include not fully guaranteed issues) as well as direct
STATISTICAL
RELEASES—List
obligations of the Treasury. "State and local government"
also includes municipalities, special districts, and other political subdivisions.
In some of the tables, details do not add to totals because
of rounding.
Published Semiannually, with Latest
BULLETIN
Anticipated schedule of release dates for periodic releases
SPECIAL
TABLES—Published
Irregularly, with Latest
BULLETIN
Reference
Issue
December 1989
Page
A84
Issue
Page
Reference
Title and Date
Assets and liabilities of commercial banks
December 31, 1988
March 31, 1989
June 30, 1989
September 30, 1989
August
December
January
February
1989
1989
1990
1990
A78
A72
A72
All
Terms of lending at commercial banks
February 1989
May 1989
August 1989
November 1989
June
March
November
March
1989
1990
1989
1990
A84
A73
A73
A79
Assets and liabilities of U.S. branches and agencies of foreign banks
December 31, 1988
March 31, 1989
June 30, 1989
September 30, 1989
June
August
November
March
1989
1989
1989
1990
A90
A84
A78
A84
August
September
February
March
1988
1989
1990
1990
A70
A72
A78
A88
Pro forma balance sheet and income statements for priced service operations
March 31, 1988
March 31, 1989
June 30, 1989
September 30, 1989
A72
Federal Reserve Board of Governors
ALAN GREENSPAN, Chairman
MANUEL H . JOHNSON, Vice Chairman
MARTHA R . SEGER
WAYNE D . ANGELL
OFFICE OF BOARD
DIVISION
MEMBERS
JOSEPH R. COYNE, Assistant to the Board
DONALD J. WINN, Assistant to the Board
BOB STAHLY MOORE, Special Assistant to the
Board
OF INTERNATIONAL
E D W I N M . T R U M A N , Staff Director
LARRY J. PROMISEL, Senior Associate
CHARLES J. S I E G M A N , Senior Associate
D A V I D H . H O W A R D , Deputy Associate
ROBERT F. GEMMILL, Staff
LEGAL
DIVISION
J. VIRGIL MATTINGLY, JR., General
Counsel
RICHARD M. ASHTON, Associate General Counsel
OLIVER IRELAND, Associate General Counsel
RICKI R. TIGERT, Associate General Counsel
SCOTT G. ALVAREZ, Assistant General Counsel
MARYELLEN A. BROWN, Assistant to the General
Counsel
OFFICE OF THE
WILLIAM W . WILES,
Secretary
JENNIFER J. JOHNSON, Associate
BARBARA R. LOWREY, Associate
Secretary
Secretary
DIVISION OF CONSUMER
AND COMMUNITY
AFFAIRS
GRIFFITH L . GARWOOD,
Director
G L E N N E . L O N E Y , Assistant Director
E L L E N M A L A N D , Assistant Director
DOLORES S . S M I T H , Assistant Director
DIVISION
Staff Director
D O N E . K L I N E , Associate Director
FREDERICK M . STRUBLE, Associate Director
WILLIAM A . RYBACK, Deputy Associate Director
STEPHEN C . SCHEMERING, Deputy Associate Director
RICHARD SPILLENKOTHEN, Deputy Associate Director
HERBERT A . B I E R N , Assistant Director
JOE M. CLEAVER, Assistant Director
ROGER T . COLE, Assistant Director
JAMES I. GARNER, Assistant Director
JAMES D . GOETZINGER, Assistant Director
MICHAEL G . M A R T I N S O N , Assistant Director
ROBERT S . PLOTKIN, Assistant Director
S I D N E Y M . S U S S A N , Assistant Director
L A U R A M . H O M E R , Securities Credit Officer
WILLIAM TAYLOR,
Adviser
OF RESEARCH
AND
STATISTICS
MICHAEL J. PRELL, Director
E D W A R D C . E T T I N , Deputy Director
THOMAS D . SIMPSON, Associate Director
Director
D A V I D J. STOCKTON, Associate Director
MARTHA B E T H E A , Deputy Associate Director
PETER A . TINSLEY, Deputy Associate Director
MYRON L . K W A S T , Assistant Director
PATRICK M . PARKINSON, Assistant Director
MARTHA S . S C A N L O N , Assistant Director
JOYCE K . ZICKLER, Assistant Director
L E V O N H . G A R A B E D I A N , Assistant Director
(Administration)
DIVISION
OF MONETARY
AFFAIRS
D O N A L D L . K O H N , Director
D A V I D E . L I N D S E Y , Deputy Director
BRIAN F . M A D I G A N , Assistant Director
RICHARD D . PORTER,
DIVISION OF BANKING
SUPERVISION AND
REGULATION
Director
Director
Director
D O N A L D B . A D A M S , Assistant Director
PETER HOOPER I I I , Assistant Director
K A R E N H . JOHNSON, Assistant Director
RALPH W . S M I T H , J R . , Assistant Director
LAWRENCE SLIFMAN, Associate
SECRETARY
FINANCE
Assistant
Director
NORMAND R.V. BERNARD, Special Assistant
OFFICE OF THE INSPECTOR
BRENT L. BOWEN, Inspector
BARRY R. SNYDER, Assistant
to the
GENERAL
General
Inspector
General
Board
A73
and Official Staff
EDWARD W . K E L L E Y , JR.
JOHN P . L A WARE
OFFICE OF
STAFF DIRECTOR
FOR
OFFICE OF STAFF DIRECTOR FOR
FEDERAL RESERVE BANK
ACTIVITIES
MANAGEMENT
S . D A V I D FROST, Staff Director
E D W A R D T . M U L R E N I N , Assistant Staff Director
WILLIAM SCHNEIDER, Special Assignment: Project
THEODORE E. ALLISON, Staff
Director, National Information Center
PORTIA W . THOMPSON, Equal Employment Opportunity
Programs Officer
DIVISION OF HUMAN
MANAGEMENT
RESOURCES
D A V I D L . S H A N N O N , Director
JOHN R . W E I S , Associate Director
A N T H O N Y V . D I G I O I A , Assistant Director
JOSEPH H . H A Y E S , J R . , Assistant Director
F R E D HOROWITZ, Assistant Director
OFFICE OF THE
DIVISION
(Programs and
Assistant Controller (Finance)
OF SUPPORT
SERVICES
ROBERT E . FRAZIER, Director
GEORGE M . L O P E Z , Assistant Director
D A V I D L . WILLIAMS, Assistant Director
OFFICE OF THE EXECUTIVE
INFORMATION RESOURCES
DIRECTOR FOR
MANAGEMENT
A L L E N E . B E U T E L , Executive Director
STEPHEN R . M A L P H R U S , Deputy Executive
MARIANNE M. EMERSON, Assistant
DIVISION
SYSTEMS
OF HARDWARE
Director
Director
AND
SOFTWARE
Director
Assistant Director
Assistant Director
BRUCE M . BEARDSLEY,
DAY W . RADEBAUGH, JR.,
ELIZABETH B . RIGGS,
DIVISION OF APPLICATIONS
STATISTICAL
SERVICES
DEVELOPMENT
WILLIAM R . JONES, Director
ROBERT J. ZEMEL, Associate Director
Po K Y U N G K I M , Assistant Director
R A Y M O N D H . M A S S E Y , Assistant Director
RICHARD C . S T E V E N S , Assistant Director
Director
LOUISE L . R O S E M A N , Assistant
FLORENCE M . Y O U N G , Assistant
Budgets)
DARRELL R . P A U L E Y ,
RESERVE
C L Y D E H . FARNSWORTH, J R . , Director
D A V I D L . ROBINSON, Associate Director
C . WILLIAM SCHLEICHER, J R . , Associate Director
BRUCE J. SUMMERS, Associate Director
CHARLES W . B E N N E T T , Assistant Director
JACK D E N N I S , J R . , Assistant Director
E A R L G . H A M I L T O N , Assistant Director
JOHN H. PARRISH, Assistant
CONTROLLER
GEORGE E . LIVINGSTON, Controller
STEPHEN J. CLARK, Assistant Controller
DIVISION OF FEDERAL
BANK
OPERATIONS
Director
AND
Director
Director
74
Federal Reserve Bulletin • April 1990
Federal Open Market Committee
FEDERAL
OPEN MARKET
COMMITTEE
MEMBERS
A L A N GREENSPAN,
Chairman
W A Y N E D . ANGELL
E D W A R D G . BOEHNE
ROBERT H . BOYKIN
E . GERALD CORRIGAN,
W . LEE HOSKINS
M A N U E L H . JOHNSON
E D W A R D W . KELLEY, JR.
ALTERNATE
ROBERT P . BLACK
ROBERT P . FORRESTAL
Vice Chairman
JOHN P . L A W A R E
MARTHA R . SEGER
GARY H . STERN
MEMBERS
SILAS KEEHN
JAMES H . OLTMAN
ROBERT T . PARRY
STAFF
RICHARD W. LANG, Associate
DAVID E. LINDSEY, Associate
LARRY J. PROMISEL, Associate
ARTHUR J. ROLNICK, Associate
HARVEY ROSENBLUM, Associate
CHARLES J. SIEGMAN, Associate
THOMAS D . SIMPSON, Associate
DAVID J. STOCKTON, Associate
DONALD L. KOHN, Secretary and
Economist
NORMAND R . V . BERNARD, Assistant
Secretary
GARY P . GILLUM,
Deputy Assistant Secretary
J. VIRGIL MATTINGLY, JR., General
ERNEST T . PATRIKIS,
Counsel
Deputy General Counsel
MICHAEL J. PRELL,
Economist
EDWIN M . TRUMAN,
Economist
JOHN M. DAVIS, Associate
Economist
RICHARD G. DAVIS, Associate
Economist
PETER D . STERNLIGHT, Manager
SAM Y . CROSS, Manager for
FEDERAL
ADVISORY
for Domestic Operations, System Open Market Account
Foreign Operations, System Open Market Account
COUNCIL
THOMAS H . O'BRIEN,
PAUL HAZEN,
IRA STEPANIAN, First District
WILLARD C . BUTCHER, Second District
TERRENCE A . LARSEN, Third District
THOMAS H . O ' B R I E N , Fourth District
FREDERICK D E A N E , JR., Fifth District
KENNETH L . ROBERTS, Sixth District
Economist
Economist
Economist
Economist
Economist
Economist
Economist
Economist
President
Vice President
B . KENNETH WEST, Seventh District
DAN W. MITCHELL, Eighth District
LLOYD P . JOHNSON, Ninth District
JORDAN L . HAINES, Tenth District
RONALD G . STEINHART, Eleventh District
PAUL H A Z E N , Twelfth District
HERBERT V . PROCHNOW,
Secretary
WILLIAM J. KORSVIK, Associate
Secretary
A75
and Advisory Councils
CONSUMER
ADVISORY
COUNCIL
WILLIAM E . O D O M , Dearborn, Michigan, Chairman
JAMES W . H E A D , Berkeley, California, Vice Chairman
GEORGE H . BRAASCH, Oakbrook, Illinois
BETTY TOM C H U , Arcadia, California
KATHLEEN E. KEEST, Boston, Massachusetts
CLIFF E. COOK, Tacoma, Washington
JERRY D . CRAFT, Atlanta, Georgia
D O N A L D C. D A Y , Boston, Massachusetts
R.B. (JOE) D E A N , JR., Columbia, South Carolina
WILLIAM C. DUNKELBERG, Philadelphia, Pennsylvania
JAMES FLETCHER, Chicago, Illinois
GEORGE C. GALSTER, Wooster, Ohio
E . THOMAS G ARM A N , Blacksburg, Virginia
DEBORAH B . GOLDBERG, Washington, D.C.
MICHAEL M. GREENFIELD, St. Louis, Missouri
ROBERT A . HESS, W a s h i n g t o n , D . C .
BARBARA K A U F M A N , San Francisco, California
THRIFT INSTITUTIONS
ADVISORY
A . J. (JACK) K I N G , Kalispell, Montana
COLLEEN D. MCCARTHY, Kansas City, Missouri
MICHELLE S . MEIER, W a s h i n g t o n , D . C .
L I N D A K. PAGE, Columbus, Ohio
BERNARD F. PARKER, JR., Detroit, Michigan
SANDRA PHILLIPS, Pittsburgh, Pennsylvania
VINCENT P. QUAYLE, Baltimore, Maryland
CLIFFORD N. ROSENTHAL, New York, New York
A L A N M. SILBERSTEIN, New York, New York
RALPH E . SPURGIN, Columbus, Ohio
NANCY HARVEY STEORTS, Dallas, Texas
D A V I D P. W A R D , Chester, New Jersey
LAWRENCE WINTHROP, Portland, Oregon
COUNCIL
DONALD B . SHACKELFORD, Columbus, Ohio, President
MARION O. SANDLER, Oakland, California, Vice President
CHARLOTTE CHAMBERLAIN, Los Angeles, California
D A V I D L. HATFIELD, Kalamazoo, Michigan
L Y N N W . HODGE, Greenwood, South Carolina
A D A M A . JAHNS, Chicago, Illinois
ELLIOT K . K N U T S O N , Seattle, Washington
JOHN W M . LAISLE, Oklahoma City, Oklahoma
PHILIP E . LAMB, Springfield, Massachusetts
JOHN A. PANCETTI, New York, New York
H. C. KLEIN, Jacksonville, Arkansas
CHARLES B. STUZIN, Miami, Florida
A76
Federal Reserve Board Publications
For ordering assistance, write PUBLICATIONS SERVICES, MS-138, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551 or telephone (202) 4523244. When a charge is indicated, payment should accompany request and be made payable to the Board of Governors
of the Federal Reserve System. Payment from foreign residents should be drawn on a U.S. bank.
Federal Reserve Regulatory Service, $250.00 per year.
Each Handbook, $90.00 per year.
THE U . S . ECONOMY IN AN INTERDEPENDENT WORLD: A
MULTICOUNTRY M O D E L , May 1984. 590 pp. $14.50 each.
WELCOME TO THE FEDERAL RESERVE. March 1989. 14 pp.
INDUSTRIAL P R O D U C T I O N — 1 9 8 6 EDITION. December 1986.
440 pp. $9.00 each.
FINANCIAL FUTURES A N D OPTIONS IN THE U . S . ECONOMY.
December 1986. 264 pp. $10.00 each.
T H E FEDERAL RESERVE SYSTEM—PURPOSES AND
TIONS. 1984. 120 p p .
A N N U A L REPORT.
A N N U A L REPORT: BUDGET REVIEW, 1988-89.
FUNC-
RESERVE BULLETIN Monthly. $25.00 per year or $2.50
each in the United States, its possessions, Canada, and
Mexico. Elsewhere, $35.00 per year or $3.00 each.
BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint
of Part I only) 1976. 682 pp. $5.00.
FEDERAL
A N N U A L STATISTICAL DIGEST
1974-78.
1981.
1982.
1983.
1984.
1985.
1986.
1987.
1988.
1980. 305 pp. $10.00 per copy.
1982. 239 pp. $ 6.50 per copy.
1983. 266 pp. $ 7.50 per copy.
1984. 264 pp. $11.50 per copy.
1985. 254 pp. $12.50 per copy.
1986. 231 pp. $15.00 per copy.
1987. 288 pp. $15.00 per copy.
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the United States, its possessions, Canada, and Mexico.
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T H E FEDERAL RESERVE A C T and other statutory provisions
affecting the Federal Reserve System, as amended
through August 1988. 608 pp. $10.00
REGULATIONS OF THE BOARD OF GOVERNORS OF THE F E D ERAL RESERVE SYSTEM.
A N N U A L PERCENTAGE RATE TABLES (Truth in Lending—
Regulation Z) Vol. I (Regular Transactions). 1969. 100
pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each
volume $2.25; 10 or more of same volume to one
address, $2.00 each.
INTRODUCTION TO FLOW OF F U N D S . 1980. 68 pp. $1.50 each;
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FEDERAL RESERVE REGULATORY SERVICE. Looseleaf; updated at least monthly. (Requests must be prepaid.)
Consumer and Community Affairs Handbook. $75.00 per
year.
Monetary Policy and Reserve Requirements Handbook.
$75.00 per year.
Securities Credit Transactions Handbook. $75.00 per year.
The Payment System Handbook. $75.00 per year.
Federal Reserve Regulatory Service. 3 vols. (Contains all
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$200.00 per year.
Rates for subscribers outside the United States are as
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CONSUMER EDUCATION
PAMPHLETS
Short pamphlets suitable for classroom use. Multiple copies
are available without charge.
Consumer Handbook on Adjustable Rate Mortgages
Consumer Handbook to Credit Protection Laws
Federal Reserve Glossary
A Guide to Business Credit and the Equal Credit Opportunity
Act
A Guide to Federal Reserve Regulations
How to File A Consumer Credit Complaint
Series on the Structure of the Federal Reserve System
The Board of Governors of the Federal Reserve System
The Federal Open Market Committee
Federal Reserve Bank Board of Directors
Federal Reserve Banks
Organization and Advisory Committees
A Consumer's Guide to Mortgage Lock-Ins
A Consumer's Guide to Mortgage Settlement Costs
A Consumer's Guide to Mortgage Refinancing
Making Deposits: When Will Your Money Be Available?
When Your Home is on the Line: What You Should Know
About Home Equity Lines of Credit
PAMPHLETS FOR FINANCIAL
INSTITUTIONS
Short pamphlets on regulatory compliance, primarily suitable for banks, bank holding companies, and creditors.
Limit of 50 copies
The Board of Directors' Opportunities in Community Reinvestment
The Board of Directors' Role in Consumer Law Compliance
Combined Construction/Permanent Loan Disclosure and
Regulation Z
Community Development Corporations and the Federal Reserve
Construction Loan Disclosures and Regulation Z
Finance Charges Under Regulation Z
How to Determine the Credit Needs of Your Community
Regulation Z: The Right of Rescission
The Right to Financial Privacy Act
Signature Rules in Community Property States: Regulation B
Signature Rules: Regulation B
All
Timing Requirements for Adverse Action Notices: Regulation B
What An Adverse Action Notice Must Contain: Regulation B
Understanding Prepaid Finance Charges: Regulation Z
STAFF STUDIES:
Summaries Only Printed in the
157. M 2 PER U N I T OF POTENTIAL G N P AS AN ANCHOR FOR
THE PRICE L E V E L , by Jeffrey J. Hallman, Richard D .
Porter, and David H. Small. April 1989. 28 pp.
1 5 8 . T H E ADEQUACY A N D CONSISTENCY OF MARGIN R E QUIREMENTS IN THE MARKETS FOR STOCKS A N D DERIVATIVE PRODUCTS, by Mark J. Warshawsky with the
assistance of Dietrich Earnhart. September 1989. 23 pp.
Bulletin
Studies and papers on economic and financial subjects that
are of general interest. Requests to obtain single copies of
the full text or to be added to the mailing list for the series
may be sent to Publications Services.
Staff Studies 114-145 are out of print.
1 4 6 . T H E ROLE OF THE PRIME RATE IN THE PRICING OF
BUSINESS L O A N S BY COMMERCIAL BANKS, 1977-84, by
Thomas F. Brady. November 1985. 25 pp.
1 4 7 . REVISIONS IN THE MONETARY SERVICES (DIVISIA) INDEXES OF THE MONETARY AGGREGATES, b y H e l e n T .
Farr and Deborah Johnson. December 1985. 42 pp.
1 4 8 . T H E MACROECONOMIC A N D SECTORAL EFFECTS OF THE
ECONOMIC RECOVERY T A X ACT: SOME SIMULATION
RESULTS, by Flint Brayton and Peter B. Clark. December 1985. 17 pp.
149. T H E OPERATING PERFORMANCE OF ACQUIRED FIRMS IN
BANKING BEFORE A N D AFTER ACQUISITION, b y S t e p h e n
A. Rhoades. April 1986. 32 pp.
1 5 0 . STATISTICAL COST ACCOUNTING MODELS IN BANKING:
A REEXAMINATION A N D AN APPLICATION, by John T.
Rose and John D. Wolken. May 1986. 13 pp.
151. RESPONSES TO DEREGULATION: RETAIL DEPOSIT PRICING FROM 1983 THROUGH 1985, by Patrick I. Mahoney,
Alice P. White, Paul F. O'Brien, and Mary M.
McLaughlin. January 1987. 30 pp.
1 5 2 . DETERMINANTS OF CORPORATE MERGER ACTIVITY: A
REVIEW OF THE LITERATURE, by Mark J. Warshawskv.
April 1987. 18 pp.
by Carolyn D. Davis and
Alice P. White. September 1987. 14 pp.
1 5 3 . STOCK MARKET VOLATILITY,
1 5 4 . T H E EFFECTS ON CONSUMERS AND CREDITORS OF PROPOSED CEILINGS ON CREDIT CARD INTEREST RATES, b y
Glenn B. Canner and James T. Fergus. October 1987.
26 pp.
155. T H E F U N D I N G OF PRIVATE PENSION PLANS, by Mark J.
Warshawsky. November 1987. 25 pp.
156. INTERNATIONAL TRENDS FOR U . S . BANKS AND B A N K -
ING MARKETS, by James V. Houpt. May 1988. 47 pp.
REPRINTS
OF BULLETIN
ARTICLES
Most of the articles reprinted do not exceed 12 pages.
Limit of 10 copies
Foreign Experience with Targets for Money Growth. 10/83.
Intervention in Foreign Exchange Markets: A Summary of
Ten Staff Studies. 11/83.
A Financial Perspective on Agriculture. 1/84.
Survey of Consumer Finances, 1983. 9/84.
Bank Lending to Developing Countries. 10/84.
Survey of Consumer Finances, 1983: A Second Report.
12/84.
Union Settlements and Aggregate Wage Behavior in the
1980s. 12/84.
The Thrift Industry in Transition. 3/85.
A Revision of the Index of Industrial Production. 7/85.
Financial Innovation and Deregulation in Foreign Industrial
Countries. 10/85.
Recent Developments in the Bankers Acceptance Market.
1/86.
The Use of Cash and Transaction Accounts by American
Families. 2/86.
Financial Characteristics of High-Income Families. 3/86.
Prices, Profit Margins, and Exchange Rates. 6/86.
Agricultural Banks under Stress. 7/86.
Foreign Lending by Banks: A Guide to International and
U.S. Statistics. 10/86.
Recent Developments in Corporate Finance. 11/86.
Measuring the Foreign-Exchange Value of the Dollar. 6/87.
Changes in Consumer Installment Debt: Evidence from the
1983 and 1986 Surveys of Consumer Finances. 10/87.
Home Equity Lines of Credit. 6/88.
U.S. International Transactions in 1988. 5/89.
Mutual Recognition: Integration of the Financial Sector in the
European Community. 9/89.
The Activities of Japanese Banks in the United Kingdom and
in the United States, 1980-88. 2/90.
A78
Index to Statistical Tables
References are to pages A3-A70 although the prefix "A" is omitted in this index
ACCEPTANCES, bankers (See Bankers acceptances)
Agricultural loans, commercial banks, 19, 20
Assets and liabilities (See also Foreigners)
Banks, by classes, 18-20
Domestic finance companies, 36
Federal Reserve Banks, 10
Financial institutions, 26
Foreign banks, U.S. branches and agencies, 21
Automobiles
Consumer installment credit, 39, 40
Production, 49, 50
BANKERS acceptances, 9, 23, 24
Bankers balances, 18-20. (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 34
Rates, 24
Branch banks, 21, 57
Business activity, nonfinancial, 46
Business expenditures on new plant and equipment, 35
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 48
Capital accounts
Banks, by classes, 18
Federal Reserve Banks, 10
Central banks, discount rates, 69
Certificates of deposit, 24
Commercial and industrial loans
Commercial banks, 16, 19
Weekly reporting banks, 19-21
Commercial banks
Assets and liabilities, 18-20
Commercial and industrial loans, 16, 18, 19, 20, 21
Consumer loans held, by type and terms, 39, 40
Loans sold outright, 19
Nondeposit funds, 17
Real estate mortgages held, by holder and property, 38
Time and savings deposits, 3
Commercial paper, 23, 24, 36
Condition statements (See Assets and liabilities)
Construction, 46, 51
Consumer installment credit, 39, 40
Consumer prices, 46, 48
Consumption expenditures, 53, 54
Corporations
Nonfinancial, assets and liabilities, 35
Profits and their distribution, 35
Security issues, 34, 67
Cost of living (See Consumer prices)
Credit unions, 27, 39. (See also Thrift institutions)
Currency and coin, 18
Currency in circulation, 4, 13
Customer credit, stock market, 25
DEBITS to deposit accounts, 15
Debt (See specific types of debt or securities)
Demand deposits
Banks, by classes, 18-21
Ownership by individuals, partnerships, and
corporations, 22
Demand deposits—Continued
Turnover, 15
Depository institutions
Reserve requirements, 8
Reserves and related items, 3, 4, 5, 12
Deposits (See also specific types)
Banks, by classes, 3, 18-20, 21
Federal Reserve Banks, 4, 10
Turnover, 15
Discount rates at Reserve Banks and at foreign central
banks and foreign countries (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 35
EMPLOYMENT, 47
Eurodollars, 24
FARM mortgage loans, 38
Federal agency obligations, 4, 9, 10, 11, 31, 32
Federal credit agencies, 33
Federal finance
Debt subject to statutory limitation, and types and
ownership of gross debt, 30
Receipts and outlays, 28, 29
Treasury financing of surplus, or deficit, 28
Treasury operating balance, 28
Federal Financing Bank, 28, 33
Federal funds, 6, 17, 19, 20, 21, 24, 28
Federal Home Loan Banks, 33
Federal Home Loan Mortgage Corporation, 33, 37, 38
Federal Housing Administration, 33, 37, 38
Federal Land Banks, 38
Federal National Mortgage Association, 33, 37, 38
Federal Reserve Banks
Condition statement, 10
Discount rates (See Interest rates)
U.S. government securities held, 4, 10, 11, 30
Federal Reserve credit, 4, 5, 10, 11
Federal Reserve notes, 10
Federal Savings and Loan Insurance Corporation insured
institutions, 26
Federally sponsored credit agencies, 33
Finance companies
Assets and liabilities, 36
Business credit, 36
Loans, 39, 40
Paper, 23, 24
Financial institutions
Loans to, 19, 20, 21
Selected assets and liabilities, 26
Float, 4
Flow of funds, 41, 43, 44, 45
Foreign banks, assets and liabilities of U.S. branches and
agencies, 21
Foreign currency operations, 10
Foreign deposits in U.S. banks, 4, 10, 19, 20
Foreign exchange rates, 70
Foreign trade, 56
Foreigners
Claims on, 57, 59, 62, 63, 64, 66
Liabilities to, 20, 56, 57, 59, 60, 65, 67, 68
A79
GOLD
Certificate account, 10
Stock, 4, 56
Government National Mortgage Association, 33, 37, 38
Gross national product, 53
HOUSING, new and existing units, 51
INCOME, personal and national, 46, 53, 54
Industrial production, 46, 49
Installment loans, 39, 40
Insurance companies, 26, 30, 38
Interest rates
Bonds, 24
Consumer installment credit, 40
Federal Reserve Banks, 7
Foreign central banks and foreign countries, 69
Money and capital markets, 24
Mortgages, 37
Prime rate, 23
International capital transactions of United States, 55-69
International organizations, 59, 60, 62, 65, 66
Inventories, 53
Investment companies, issues and assets, 35
Investments (See also specific types)
Banks, by classes, 18, 19, 20, 21, 26
Commercial banks, 3, 16, 18-20, 38
Federal Reserve Banks, 10, 11
Financial institutions, 26, 38
LABOR force, 47
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Banks, by classes, 18-20
Commercial banks, 3, 16, 18-20
Federal Reserve Banks, 4, 5, 7, 10, 11
Financial institutions, 26, 38
Insured or guaranteed by United States, 37, 38
MANUFACTURING
Capacity utilization, 48
Production, 48, 50
Margin requirements, 25
Member banks (See also Depository institutions)
Federal funds and repurchase agreements, 6
Reserve requirements, 8
Mining production, 50
Mobile homes shipped, 51
Monetary and credit aggregates, 3, 12
Money and capital market rates, 24
Money stock measures and components, 3, 13
Mortgages (See Real estate loans)
Mutual funds, 35
Mutual savings banks (See Thrift institutions)
NATIONAL defense outlays, 29
National income, 53
OPEN market transactions, 9
PERSONAL income, 54
Prices
Consumer and producer, 46, 52
Stock market, 25
Prime rate, 23
Producer prices, 46, 52
Production, 46, 49
Profits, corporate, 35
REAL estate loans
Banks, by classes, 16, 19, 20, 38
Financial institutions, 26
Terms, yields, and activity, 37
Type of holder and property mortgaged, 38
Repurchase agreements, 6, 17, 19, 20, 21
Reserve requirements, 8
Reserves
Commercial banks, 18
Depository institutions, 3, 4, 5, 12
Federal Reserve Banks, 10
U.S. reserve assets, 56
Residential mortgage loans, 37
Retail credit and retail sales, 39, 40, 46
SAVING
Flow of funds, 41, 43, 44, 45
National income accounts, 53
Savings and loan associations, 26, 38, 39, 41. (See also
Thrift institutions)
Savings banks, 26, 38, 39
Savings deposits (See Time and savings deposits)
Securities (See also specific types)
Federal and federally sponsored credit agencies, 33
Foreign transactions, 67
New issues, 34
Prices, 25
Special drawing rights, 4, 10, 55, 56
State and local governments
Deposits, 19, 20
Holdings of U.S. government securities, 30
New security issues, 34
Ownership of securities issued by, 19, 20, 26
Rates on securities, 24
Stock market, selected statistics, 25
Stocks (See also Securities)
New issues, 34
Prices, 25
Student Loan Marketing Association, 33
TAX receipts, federal, 29
Thrift institutions, 3. (See also Credit unions and Savings
and loan associations)
Time and savings deposits, 3, 13, 17, 18, 19, 20, 21
Trade, foreign, 56
Treasury cash, Treasury currency, 4
Treasury deposits, 4, 10, 28
Treasury operating balance, 28
UNEMPLOYMENT, 47
U.S. government balances
Commercial bank holdings, 18, 19, 20
Treasury deposits at Reserve Banks, 4, 10, 28
U.S. government securities
Bank holdings, 18-20, 21, 30
Dealer transactions, positions, and financing, 32
Federal Reserve Bank holdings, 4, 10, 11, 30
Foreign and international holdings and transactions, 10,
30, 68
Open market transactions, 9
Outstanding, by type and holder, 26, 30
Rates, 24
U.S. international transactions, 55-69
Utilities, production, 50
VETERANS Administration, 37, 38
WEEKLY reporting banks, 19-21
Wholesale (producer) prices, 46, 52
YIELDS (See Interest rates)
A80
Federal Reserve Banks, Branches, and Offices
FEDERAL RESERVE BANK
branch, or facility
Zip
Chairman
Deputy Chairman
President
First Vice President
BOSTON*
02106
Richard N. Cooper
Richard L. Taylor
Richard F. Syron
Robert W. Eisenmenger
NEW YORK*
10045
Cyrus R. Vance
Ellen V. Futter
Mary Ann Lambertsen
E. Gerald Corrigan
James H. Oltman
Buffalo
14240
James O. Aston
PHILADELPHIA
19105
Peter A. Benoliel
Gunnar E. Sarsten
Edward G. Boehne
William H. Stone, Jr.
CLEVELAND*
44101
Charles W. Parry
John R. Miller
To be announced
Robert P. Bozzone
W. Lee Hoskins
William H. Hendricks
Hanne M. Meniman
Anne Marie Whittemore
John R. Hardesty, Jr.
William E. Masters
Robert P. Black
Jimmie R. Monhollon
Larry L. Prince
Edwin A. Huston
A. G. Trammell
Lana Jane Lewis-Brent
Robert D. Apelgren
Victoria B. Jackson
To be announced
Robert P. Forrestal
Jack Guynn
Marcus Alexis
Charles S. McNeer
Phyllis E. Peters
Silas Keehn
Daniel M. Doyle
H. Edwin Trusheim
Robert H. Quenon
L. Dickson Flake
Raymond M. Burse
Katherine H. Smythe
Thomas C. Melzer
James R. Bowen
Michael W. Wright
Delbert W. Johnson
J. Frank Gardner
Gary H. Stern
Thomas E. Gainor
Fred W. Lyons, Jr.
Burton A. Dole, Jr.
Barbara B. Grogan
John F. Snodgrass
Herman Cain
Roger Guffey
Henry R. Czerwinski
Bobby R. Inman
Hugh G. Robinson
Donald G. Stevens
Andrew L. Jefferson, Jr.
Roger R. Hemminghaus
Robert H. Boykin
William H.Wallace
Robert F. Erburu
Carolyn S. Chambers
Yvonne B. Burke
William A. Hilliard
Don M. Wheeler
Bruce R. Kennedy
Robert T. Parry
Carl E. Powell
Cincinnati
Pittsburgh
45201
15230
RICHMOND*
23219
Baltimore
21203
Charlotte
28230
Culpeper Communications
and Records Center 22701
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans
30303
35283
32231
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. LOUIS
63166
Little Rock
Louisville
Memphis
72203
40232
38101
MINNEAPOLIS
55480
Helena
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
59601
64198
80217
73125
68102
75222
79999
77252
78295
SAN FRANCISCO
94120
Los Angeles
Portland
Salt Lake City
Seattle
90051
97208
84125
98124
Vice President
in charge of branch
Charles A. Cerino1
Harold J. Swart1
Robert D. McTeer, Jr.1
Albert D. Tinkelenberg1
John G. Stoides1
Donald E. Nelson
Fred R. Herr1
James D. Hawkins1
James T. Curry III
Melvyn K. Purcell
Robert J. Musso
Roby L. Sloan1
John F. Breen'
Howard Wells
Ray Laurence
John D. Johnson
Kent M. Scott
David J. France
Harold L. Shewmaker
Tony J. Salvaggio1
Sammie C. Clay
Robert Smith, III1
Thomas H. Robertson
Thomas C. Warren2
Angelo S. Carella1
E. Ronald Liggett1
Gerald R. Kelly1
* Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, New Jersey 07016;
Jericho, New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West
Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202.
1. Senior Vice President.
2. Executive Vice President.
A81
The Federal Reserve System
Boundaries of Federal Reserve Districts and Their Branch Territories
April 1984
ALASKA
©
i
i>
ii
ii
i
As?
•AN
LEGEND
" Boundaries of Federal R e s e r v e Districts
Boundaries o f Federal R e s e r v e Branch
Territories
®
Federal R e s e r v e Bank Cities
*
Federal R e s e r v e Branch Cities
Federal R e s e r v e Bank Facility
^
Board of G o v e r n o r s o f the Federal R e s e r v e
System
Publications of Interest
FEDERAL RESERVE
PUBLICATIONS
CONSUMER
CREDIT
The Federal Reserve Board publishes a series of
pamphlets covering individual credit laws and topics,
as pictured below. The series includes such subjects as
how the Equal Credit Opportunity Act protects women against discrimination in their credit dealings, how
to use a credit card, and how to resolve a billing error.
The Board also publishes the Consumer
Handbook
to Credit Protection Laws, a complete guide to consumer credit protections. This 44-page booklet explains how to use the credit laws to shop for credit,
apply for it, keep up credit ratings, and complain about
an unfair credit.
A Consumer**
Quid* to
Mortgage
Lock-Ins
Three booklets on the mortgage process are also
available: A Consumer's Guide to Mortgage Refinancings, A Consumer's Guide to Mortgage Lock-Ins, and
A Consumer's Guide to Mortgage Settlement
Costs.
These booklets were prepared in conjunction with the
Federal Home Loan Bank Board and in consultation
with other federal agencies and trade and consumer
groups.
Copies of consumer publications are available free
of charge from Publications Services, Mail Stop 138,
Board of Governors of the Federal Reserve System,
Washington, D.C. 20551. Multiple copies for classroom use are also available free of charge.
Publications of Interest
NEW HANDBOOK AVAILABLE
REGULATORY
SERVICE
FROM THE
The Federal Reserve Board has announced publication of The Payment System Handbook. The new
handbook, which is part of the Federal Reserve Regulatory Service, deals with expedited funds availability, check collection, wire transfers, and risk-reduction policy. It includes Regulation CC (Availability of
Funds and Collection of Checks), Regulation J (Collection of Checks and Other Items and Wire Transfers
of Funds by Federal Reserve Banks), the Expedited
Funds Availability Act and related statutes, official
Board commentary on Regulation CC, and policy
statements on risk reduction in the payment system. In
addition, it contains detailed subject and citation indexes. It is published in loose-leaf binder form and is
updated monthly.
To promote public understanding of its regulatory
functions, the Board publishes the Federal
Reserve
Regulatory Service, a three-volume loose-leaf service
containing all Board regulations and related statutes,
interpretations, policy statements, rulings, and staff
opinions. For those with a more specialized interest in
the Board's regulations, parts of this service are published separately as handbooks pertaining to monetary
policy, securities credit, consumer affairs, and, available for the first time in September 1988, The Payment
System
Handbook.
For domestic subscribers, the annual rate for The
Payment System Handbook is $75. For subscribers
outside the United States, the price, including additional air mail costs, is $90. For the Federal Reserve
Regulatory Service, not including handbooks, the annual rate is $200 for domestic subscribers and $250 for
subscribers outside the United States. All subscription
requests must be accompanied by a check payable to
"Board of Governors of the Federal Reserve
System." Orders should be addressed to Publications
Services, Mail Stop 138, Board of Governors of the
Federal Reserve System, Washington, D.C. 20551.
@FedFRASER