Full text of Federal Reserve Bulletin : April 1992
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VOLUME 7 8 •
NUMBER 4 •
APRIL 1 9 9 2
FEDERAL RESERVE
BULLETIN
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 S. Ellen Dykes, the Graphics
Center under the direction of Peter G. Thomas, and Publications Services supervised by Linda C. Kyles.
Table of Contents
223 MONETARY POLICY
TO THE CONGRESS
REPORT
The monetary stimulus already in train, coupled with lessening drags from credit supply
disruptions and from the restructuring of
household and business balance sheets, is expected to provide effective support for economic growth this year. Nonetheless, the pace
of expansion this year is expected to remain
weaker than in previous business-cycle recoveries. "Core" inflation, however, is expected
to move down appreciably in 1992, and this
trend should carry into 1993—a pattern that
bodes well for the achievement of a balanced,
sustained economic expansion.
242 TREASURY AND FEDERAL RESERVE
FOREIGN EXCHANGE
OPERATIONS
The dollar declined during the period from
November 1991 through January 1992 a net
3lA percent against the mark and 4 percent
against the yen. On a trade-weighted basis,
as measured by the Federal Reserve Board's
index, the dollar declined 22A percent, on balance, over the period.
248 INDUSTRIAL PRODUCTION
CAPACITY UTILIZATION
AND
The index of industrial production dropped
0.9 percent in January, after having fallen
0.4 percent in December. Total industrial
capacity utilization dropped 0.8 percentage
point in January, to 78.0 percent.
251 STATEMENTS
TO THE CONGRESS
David W. Mullins, Jr., Vice Chairman, Board
of Governors, presents the Board's views on
reforms to the regulation of the government
securities market and says that the proposals
contained in a joint report by the Federal
Reserve, the Treasury Department, and the
Securities and Exchange Commission, along
with other reforms announced earlier, constitute a careful, comprehensive modernization
of the mechanisms and practices in the government securities market, before the Subcommittee on Oversight of the House Committee
on Ways and Means, February 3, 1992.
253 Alan Greenspan, Chairman, Board of Governors, focuses on some of the broad considerations bearing on our economic prospects and
says that the attainment of rising living standards in the future will hinge crucially on our
ability to elevate productivity growth and that
bolstering the supply of saving available to
support productive private investment must be
a priority for fiscal policy, before the House
Committee on the Budget, February 4, 1992.
256 Vice Chairman Mullins discusses reforms to
the regulation of the government securities
market and says that over the longer term, the
most effective force in enhancing market efficiency and reducing the potential for manipulative abuses is the force of competition and
that proposed reforms to the market will open
it up to broad-based participation, before the
Subcommittee on Domestic Monetary Policy
of the House Committee on Banking, Finance
and Urban Affairs, February 6, 1992.
258 E. Gerald Corrigan, President, Federal Reserve Bank of New York, shares his views on
the Joint Report on the Government Securities
Market and says that he strongly supports the
overall thrust of the joint report and believes
that the changes and legislative recommendations outlined in it represent a comprehensive
yet well-balanced approach to the problems
that surfaced in the government securities
market last year, before the Subcommittee
on Domestic Monetary Policy of the House
Committee on Banking, Finance and Urban
Affairs, February 6, 1992.
262 Edward C. Ettin, Deputy Director, Division of
Research and Statistics, Board of Governors,
discusses issues related to bank mergers in
the United States and says that a substantial
volume of bank mergers has been a natural
response to a changing banking environment
and that the Board is continuing to analyze the
competitive effects of all proposed mergers
and acquisitions, before the Subcommittee on
Treasury, Postal Service, and General Government of the Senate Committee on Appropriations, February 24, 1992.
264 Chairman Greenspan presents the Federal Reserve's Monetary Policy Report to the Congress (pages 223^1 of this issue) and says
that even though the recovery that seemed to
be in train at the time of the last report to the
Congress has stalled, there are reasons to believe that business activity will pick up, before
the Senate Committee on Banking, Housing,
and Urban Affairs, February 25, 1992. (Chairman Greenspan presented similar testimony
before the Subcommittee on Domestic Monetary Policy of the House Committee on Banking, Finance and Urban Affairs, February 19,
1992.)
Errata in Federal Reserve Bulletin.
Revisions to money stock data.
280 RECORD OF POLICY ACTIONS OF THE
FEDERAL OPEN MARKET
COMMITTEE
At its meeting on December 17, 1991, the
Committee adopted a directive that called for
initially maintaining the existing degree of
pressure on reserve positions but that included a marked bias toward easing during
the intermeeting period. Accordingly, the
directive indicated that in the context of
the Committee's long-run objectives for price
stability and sustainable economic growth,
and giving careful consideration to economic,
financial, and monetary developments,
slightly greater reserve restraint might be acceptable or somewhat lesser reserve restraint
would be acceptable during the intermeeting
period. The reserve conditions contemplated
at this meeting were expected to be consistent
with growth of M2 and M3 at annual rates of
around 3 percent and 1 xh percent respectively
over the four-month period from November
through March.
287 LEGAL DEVELOPMENTS
272
ANNOUNCEMENTS
Reappointment of Alan Greenspan as Chairman of the Board of Governors and as a
member of the Board.
Reduction in reserve requirements on transaction accounts of depository institutions.
Discontinuance of use of the supervisory definition of highly leveraged transactions.
Availability of Consumer Affairs brochures on
mortgage financing.
Proposal to revise the Board's Regulations O
and Y; proposal to revise the Board's capital
adequacy guidelines for bank holding companies and state member banks to provide explicit guidance on the types of intangible
assets that may be included in the tier 1 capital
calculation for risk-based and leverage capital
purposes.
Various bank holding company, bank service
corporation, and bank merger orders; and
pending cases.
A1 FINANCIAL AND BUSINESS
STATISTICS
These tables reflect data available as of
February 26, 1992.
A3 GUIDE TO TABULAR
PRESENTATION
A4 Domestic Financial Statistics
A44 Domestic Nonfinancial Statistics
A53 International Statistics
A69 GUIDE TO STATISTICAL RELEASES
SPECIAL
AND
TABLES
A70 INDEX TO STATISTICAL
TABLES
A72 BOARD OF GOVERNORS AND STAFF
A74 FEDERAL OPEN MARKET COMMITTEE
AND STAFF; ADVISORY COUNCILS
A78 FEDERAL RESERVE BANKS, BRANCHES,
AND OFFICES
A76 FEDERAL RESERVE BOARD
PUBLICATIONS
A79 MAP OF THE FEDERAL RESERVE
SYSTEM
Monetary Policy Report to the Congress
The faltering of the recovery process apparently
Report submitted to the Congress on February 19,
1992, pursuant to the Full Employment and Bal- owed to a variety of forces, some of which were
operating well before the oil price shock of 1990
anced Growth Act of 19781
tipped the economy into recession. In a sluggish
economy and amid unexpectedly weak asset
values—particularly in real estate—deteriorating
MONETARY POLICY AND THE ECONOMIC
financial positions of debt-laden households and
OUTLOOK FOR 1992
corporations further damped credit demands and
When the Federal Reserve presented its midyear
aggregate spending. Financial intermediaries, chasmonetary policy report to Congress last July, a
tened by their negative experience with earlier
moderate economic upturn was under way. Conloans, became more hesitant about extending new
sumer spending and housing activity had risen concredit; the resultant tighter lending standards deepsiderably since the winter, bolstered by the decline
ened the slowdown in economic activity and inhibin oil prices, by a rebound in consumer confidence
ited the subsequent recovery. In the government
in the wake of the allied victory in the Persian Gulf
sector, where deficits remained large, not only at
conflict, and by lower interest rates. Inventories
the federal level but also in many state and local
had been trimmed appreciably, orders were rising,
jurisdictions, efforts to curb spending and increase
and businesses, while still cautious, had begun to
revenues constituted a further drag on aggregate
increase employment and production. The key
demand in the short run.
monetary aggregates had accelerated and were
Inflation, meanwhile, moved down over the secaround the middle of their 1991 target ranges. With
ond half of 1991. Weak demand reduced pressures
the stance of monetary policy seemingly conducive
in both labor and product markets, and, after some
to an upturn in economic activity, the Federal Reacceleration of wages and prices in 1989 and 1990,
serve, after having progressively reduced pressures
an underlying disinflationary trend has now been
on reserve positions earlier in the year, maintained
established. Important in this process has been a
a more neutral money market posture in the spring
reduction in inflation expectations, visible not only
and early summer.
in a variety of survey data but also in the behavior
As the year wore on, however, the incipient
of securities markets.
recovery lost its momentum. Consumer spending
With actual and prospective inflationary presturned down, and business and consumer sentiment
sures easing, economic activity flagging, and the
began to erode. Inventories at wholesale and retail
broader monetary aggregates weakening and growtrade establishments began to increase relative to
ing near the bottom of their target ranges, the
sales, inducing a new outbreak of production adFederal Reserve resumed easing money market
justments and layoffs that continued through yearconditions in the second half of the year. As a
end. Although the economy—as measured by its
result, the federal funds rate fell from 53A percent
real gross domestic product—continued to grow in
in July to 4 percent by year-end, and most other
the second half of the year, the pace of expansion
short-term rates followed suit; the discount rate
was only marginally positive.
was also reduced over this period, from 5Vi percent
to 3V2 percent, the lowest rate in nearly thirty years.
Long-term interest rates, which had failed to respond to declines in money market rates in the
1. The charts for the report are available on request from Publiearly months of the year, came down significantly
cations Services, Board of Governors of the Federal Reserve Sysin the latter part of 1991, partly in response to the
tem, Washington, DC 20551.
224
Federal Reserve Bulletin • April 1992
easing in inflationary expectations. Although longterm rates have backed up some in recent weeks,
they remain appreciably below the levels of last
summer. The decline in rates has helped reduce the
financial burdens of highly leveraged households
and corporations, which have taken this opportunity to refinance mortgages and to replace existing
debt with new lower-cost bonds. Lower interest
rates also have contributed to an increase in stock
prices, inducing firms to boost equity issuance and
to pay down debt, further strengthening their balance sheets. With the decline in U.S. interest rates,
the foreign exchange value of the dollar has largely
reversed the upward movement that had occurred
earlier in the year.
The unusually slow growth of the key monetary
and credit aggregates last year was, to a degree,
indicative of the continuing restraint on private
credit usage and spending. The aggregate debt of
domestic nonfinancial sectors—abstracting from
federal government debt, which continued to grow
briskly—expanded only 23A percent in 1991, the
slowest advance in decades, and below the pace of
nominal GDP; households, nonfinancial businesses,
and state and local governments all retrenched,
curbing spending and borrowing in order to buttress deteriorating financial positions.
The weakness in the monetary aggregates M2
and M3 reflected not only subdued overall credit
usage but also a continued decline in the share of
credit intermediated by depositories. With the thrift
industry contracting further, commercial banks exercising caution in their credit extensions, and borrowing demand concentrated in longer-term instruments, depository credit continued to shrink as a
share of overall credit extensions. As a result, the
velocity of M3—a monetary aggregate that comprises most of the liabilities used by depositories to
fund credit growth—increased again in 1991, as
M3 grew only 1 lA percent, near the bottom of its
target range. Depository restructuring also restrained M2, which grew in line with nominal GDP
despite a steep drop in short-term market interest
rates; ordinarily such a drop would have been expected to depress the velocity of this aggregate.
Banks, eager to improve capital positions, reduced
deposit rates more than loan rates, increasing the
incentive for households to pay down debt rather
than to accumulate monetary assets. Less aggressive pursuit of retail accounts by depositories also
1.
Ranges for growth of monetary and debt aggregates 1
Percent
Aggregate
M2
M3
Debt 2
1990
3-7
1-5
5-9
1991
l
2VS-6 /t
1-5
4>/2-8'/2
1992
2V2-6V2
1-5
4V4-8V4
1. Change from average for fourth quarter of preceding year to average
for fourth quarter of year indicated. Ranges for monetary aggregates are
targets; range for debt is a monitoring range.
2. Domestic nonfinancial sector.
led investors to switch into other financial assets,
such as bond and stock mutual funds. Flows into
these funds helped finance credit that had formerly
been intermediated by depositories, facilitating
shifts to longer-term borrowing and reducing the
adverse effects of any retrenchment by banks and
thrifts on the cost and availability of credit to many
borrowers. However, some types of lending that
are not so easily rechanneled—such as construction loans and credits to small and lower-rated
businesses—have been curtailed, and a number of
borrowers now face more stringent credit terms.
Monetary Objectives for 1992
In formulating its objectives for monetary policy
for 1992, the Federal Open Market Committee has
sought to promote a sustainable upturn in economic
activity while continuing to build upon the hardwon gains against inflation that have already been
made. The task of translating these objectives into
specific ranges for money and debt continues to be
complicated by the ongoing restructurings of depositories and by the evolving attitudes toward
credit on the part of borrowers and lenders. The
Committee believes that the rechanneling of credit
flows away from depository institutions could well
continue to produce slower growth in the broad
monetary aggregates than normally would be associated with a given path for nominal GDP.
Taking account of these effects, the Committee
has deemed the ranges for 1992 tentatively adopted
last July as appropriate for achieving its objectives.
The target range for M2 growth in 1992 is 2Vi percent to 6V2 percent, unchanged from 1991. Demands for M2 relative to income would be damped
if, as seems likely, banks and thrifts continue to
reduce deposit rates in lagged response to the de-
Monetary Policy Report to the Congress
2.
225
Economic projections for 1992
Percent change,
fourth quarter to fourth
Nominal GDP
Real GDP
Consumer price index 2
Administration
Range
Central tendency
4-6
4>/S-53/4
5.4
PA-2V2
3-31/2
2.2
3.1
6V*-7
6.8
quarter1
Average level, fourth quarter
Unemployment rate3
3.2
.2
2.9
l'A-23/*
2'/2-3'A
6.9
6¥*-7>/*
(percent)
1. From average for fourth quarter of 1990 to average for fourth quarter
of 1991.
cline that has occurred in market rates. These
deposit-rate reductions could be especially large if
credit continues to be channeled outside depositories; in this case, relatively modest growth in M2
would be adequate to support a satisfactory outcome for the economy. On the other hand, as the
balance sheets and capital positions of depositories
continue to improve, banks and thrifts may adopt a
generally more accommodative posture with respect to credit extensions and would therefore have
greater need for retail deposits. In that event, somewhat faster growth of M2 would be appropriate.
On balance, the Committee's M2 range for 1992
allows room for a variety of developments in the
intermediation process and thus in the behavior of
monetary velocity. Flexibility in interpreting M2
within its range is particularly important at this
time, in light of the ongoing and unpredictable
shifts in the patterns of credit usage and financial
intermediation that likely will continue to buffet
our financial system. Looking ahead to future
years, the Committee also recognizes that the range
for M2 growth may eventually have to be lowered
in order to put in place the monetary and credit
conditions consistent with price level stability.
The target range for M3 growth in 1992 remains
at 1 percent to 5 percent. Although credit growth is
expected to pick up somewhat in 1992, in line with
a firming of economic activity, much of this credit
likely will be financed outside the depository
system. The thrift industry is expected to contract
further as activity by the Resolution Trust Corporation continues apace, and banks, faced with
continued—though moderating—pressures on capital positions, will still be somewhat hesitant to
expand. At the same time, additional households
FOMC members and
other FRB presidents
Memo:
1991 actual
Item
2. All urban consumers.
3. Percentage of civilian labor force.
are likely to refinance adjustable-rate mortgages
withfixed-rateobligations that can easily be securitized, and corporations will probably continue to
turn to equity markets and long-term bonds rather
than bank loans. As a result, depository funding
needs are likely to remain damped relative to the
pace of economic activity, and the velocity of M3
should consequently rise further.
The monitoring range for the aggregate debt of
domestic nonfinancial sectors for 1992 is 41/2 percent to 8»/2 percent, also unchanged from 1991.
Federal government borrowing is expected to remain heavy in 1992, given the large budget deficit.
Debt growth in nonfederal sectors, however, should
remain fairly subdued relative to economic activity
as borrowers and lenders alike maintain a cautious
approach to leverage, in part because of a desire to
make further repairs to damaged balance sheets.
Economic Projections for 1992
Although the long-standing structural problems that
aborted the fledgling recovery last summer clearly
are being addressed, the speed of their resolution—
and the associated restraint on economic growth—
is quite difficult to gauge, augmenting the usual
uncertainties in assessing the economic outlook.
On the whole, however, the members of the Board
of Governors and the Reserve Bank presidents
believe that, with the easing of monetary conditions to date providing considerable impetus to the
economy, the most likely outcome is for a moderate reacceleration of activity over 1992. At the
same time, they anticipate that the trend toward
226
Federal Reserve Bulletin • April 1992
price stability, which now appears to be rooted
more securely, will be sustained through this
year.
The forecasts of most of the governors and presidents for growth of real gross domestic product
are in a range of 13A percent to 2Vi percent measured from the fourth quarter of 1991 to the fourth
quarter of 1992. With employers likely to be cautious about hiring until they are fully persuaded of
the sustained vitality of the upturn, gains in employment are expected to come slowly. Thus, only
a small improvement in the unemployment
rate is anticipated this year, with the central tendency of projections being a range of 63A percent
to 7 percent for the fourth quarter of 1992. With
regard to inflation, the central tendency range for
the CPI increase this year is 3 percent to 3V2 percent. These forecasts are, in general, very similar to
the projections presented by the Administration in
the fiscal year 1993 budget. Indeed, the Administration's forecast for nominal GDP is well within
the Committee's central tendency range and thus
appears to be quite consistent with the FOMC's
monetary ranges.
In their early February discussion of the economic outlook, the Board members and Reserve
Bank presidents observed that the effects of recent
job losses and weak consumer confidence are likely
to restrain activity in the near term. Under the
circumstances, the Board members and Bank presidents stressed that economic developments need to
be monitored closely to guard against the possibility that the economy might falter. Nonetheless, the
monetary stimulus already in train is expected to
provide effective support for economic growth this
year, and in this regard the early indications of a
marked pickup in residential real estate activity and
a rise in retail sales are a particularly favorable
sign.
It is also expected that the drags on growth from
disruptions in credit supply and from the restructuring of household and business balance sheets will
begin to lessen over the year. As noted above, this
is obviously an area of substantial uncertainty.
However, as household and corporate debt loads
diminish in an environment of stronger economic
activity, and as lower interest rates continue to ease
financing burdens of borrowers, consumers and
businesses should be poised to participate more
fully in the economic expansion. Moreover, the
problems of credit availability that have plagued
the economy over the past couple of years should
begin to ease in 1992 as the economic recovery
takes hold and lenders become more confident
about extending credit.
Nonetheless, the pace of expansion this year is
expected to remain weaker than in previous business cycle recoveries. In large part, this expectation
reflects some still-unresolved economic and financial imbalances in particular segments of the economy. The persistent overhang of space in office and
other commercial buildings undoubtedly will inhibit new construction in that sector for some time.
In addition, the budgetary constraints that have
capped government spending are likely to linger; a
good many states and localities are finding that
budget gaps are reopening despite the spending
cuts and tax increases they instituted last year.
Meanwhile, the external sector is expected to have
a relatively neutral net influence on domestic production this year; foreign demand—particularly
from Mexico and developing countries in Asia—
should continue to boost export growth, but the
anticipated pickup in domestic purchases is likely
to draw in additional imports as well, limiting the
potential for further substantial improvement in the
trade balance.
Only a minority of Board members and Reserve
Bank presidents foresee a smaller increase this year
in the overall CPI than the 3 percent rise experienced in 1991. But the pickup in inflation suggested by the 3 percent to 3V2 percent central
tendency range is deceptive: the underlying trends
in price movement are more favorable. The CPI
was held down to a substantial degree last year by
the unwinding of the energy price shock that followed Iraq's invasion of Kuwait in August 1990,
and further sharp declines in energy prices do not
appear likely in the current environment. However,
an ongoing deceleration in prices is evident for a
wide range of other goods and services, and with
inflationary tendencies under considerable restraint
from several factors—including further moderation
in labor cost growth, continued slack in industrial
product markets, and small increases in import
prices—"core" inflation is expected to move down
appreciably in 1992. Indeed, this trend should carry
into 1993—a pattern that bodes well for the
achievement of a balanced, sustained economic
expansion.
Monetary Policy Report to the Congress
THE PERFORMANCE OF THE ECONOMY
IN 1991
The year 1991 began with the U.S. economy in the
midst of recession. Activity had contracted sharply
after the jump in oil prices that followed Iraq's
invasion of Kuwait in August 1990, and this weakness spilled into the first quarter with further reductions in production and employment. By the spring,
however, economic data indicated that the decline
in economic activity had bottomed out. The rapid
conclusion of the Persian Gulf war boosted consumer confidence, and the reversal of the earlier
runup in oil prices and the cumulative effects of
declining interest rates were providing support for
an increase in household spending. Indeed, construction of single-family homes had already turned
up noticeably by April, and consumer spending
posted a moderate rise in the second quarter. Although businesses continued to liquidate inventories at a fairly rapid pace, industrial production
grew steadily from April through July, and hiring
activity increased.
However, the pickup in the economy evident
from April to July failed to develop any momentum, as the thrust to domestic demand initiated by
the end of the Gulf war dissipated during the summer. The absence of a more robust recovery likely
reflected the drag on aggregate demand from some
longer-term economic and financial adjustments.
For example, imbalances long evident in the commercial and multifamily construction sectors
damped enthusiasm for new projects, and ongoing
difficulties in the financial sector continued to restrain credit availability; these influences undoubtedly muted the stimulus that normally would have
been forthcoming from the decline in interest rates.
Fiscal restraint evident at all levels of government
weighed on aggregate demand in a way not typically observed in previous economic cycles. Significant restructurings of operations in a number of
sectors had the effect of retarding employment and
income growth, at least in the short run. And concerns about debt-servicing burdens as well as about
economic prospects sustained a reluctance on the
part of businesses and consumers to borrow and
increase spending.
Despite their cautious planning, some businesses
experienced inventory backups in the late summer
and fall, necessitating another round of production
227
adjustments. In part, the impact of these adjustments was felt abroad as businesses cut back their
imports of foreign goods. However, domestic adjustments were evident as well, and, apart from
atypical weather patterns that temporarily increased
the demand for electricity, industrial production
was flat over the second half of the year. The
sluggish pace of activity in the industrial sector
was joined by weakness in other parts of the economy, and overall, the nation's real gross domestic
product is estimated to have risen a scant V* percent
at an annual rate in the fourth quarter of last year.
In the labor market, layoffs proliferated once again,
and the civilian unemployment rate rose to 7.1 percent at the end of 1991.
The deterioration in both industrial activity and
nonfarm employment extended into this year, with
factory production down sharply in January and
private payrolls edging beneath the low of last
April. On the other hand, housing market activity
appears to have picked up somewhat since the
beginning of the year, and nominal retail sales rose
about V2 percent in January.
Inflation slowed in 1991, with consumer prices
up 3 percent over the year, much less than the
6 percent rise posted during 1990. In part, the
slowing in inflation reflected the sharp drop in oil
prices early in the year; consumer energy prices in
December were IV2 percent below their level at the
end of 1990, with the decline concentrated in the
first quarter of the year. Food price inflation also
moderated considerably, amounting to only 2 percent last year after three years of increases in
excess of 5 percent.
Even apart from food and energy, inflation now
appears to be on a downward trend. To be sure,
there were sizable increases in the CPI excluding
food and energy early in the year, as higher federal
excise taxes and a pass-through of the sharp rise in
energy prices boosted prices for a variety of goods
and services. With the subsequent reversal in oil
prices and no further major tax hikes, however,
price pressures eased visibly beginning in the
spring. On balance, the CPI excluding food and
energy rose less than 4 percent at an annual rate in
the second half of 1991, well below the 5 percent
pace of 1990. Labor cost pressures also diminished
last year, although substantial increases in health
care expenses remained a problem for employers.
As measured by the employment cost index,
228
Federal Reserve Bulletin • April 1992
nominal compensation per hour rose about AVz percent over 1991, somewhat less than the increases
recorded in each of the three previous years.
Household Spending—Consumption and
Residential Construction
With household finances adversely affected by job
losses and declining real incomes, real consumer
spending rose just lA percent over the year, the
same as in 1990. At the beginning of the year,
consumer purchasing power already had been
sapped by the rise in energy prices and by declines
in employment. And although the retreat in oil
prices then in progress and an improvement in
consumer confidence following the end of the Gulf
war provided a boost to spending in the spring, the
failure of the recovery to take hold and concerns
about financial prospects and debt burdens restrained spending in the second half of the year. On
balance, real consumer outlays edged down between July and December, retracing part of the
rise that had occurred during the spring and early
summer.
The weakness in consumer spending over the
past year was particularly evident for durable
goods. A sharp drop in motor vehicle purchases
accounted for much of the overall decline in spending on durables; indeed, the level of motor vehicle
sales in 1991, at 12V4 million units, was the lowest
since 1983. Outlays for other durable goods were
down slightly over the year, after a IV2 percent
decline in 1990. As with total spending, purchases
of other durables picked up somewhat in the spring
and early summer, but then fell in the fourth quarter
as consumers retrenched. Spending on nondurable
goods also declined last year, with expenditures,
especially for apparel, down sharply in the fourth
quarter. In contrast, outlays for services continued
to trend up at a pace similar to that registered in the
two previous years.
The patterns of change among the components
of consumer spending—particularly the steep decline in outlays for "big ticket" durable goods—
underscore the role of household balance sheet
concerns in restraining economic growth last year.
Household debt burdens rose substantially during
the 1980s, when consumers stepped up spending
on motor vehicles and other consumer durables,
oftenfinancingtheir purchases with credit. In some
parts of the nation, this spending boom spread to
residential real estate as well, with the associated
borrowing, which was often predicated on expectations of rapidly rising family incomes, adding further to the financing burdens of households. As
income growth weakened over the past year and a
half, consumers struggled to meet the monthly
obligations on their accumulated debt and apparently deferred some discretionary spending in the
process. Thisfinancialstress also was evidenced by
an increase in delinquency rates for consumer and
mortgage loans last year to levels comparable to
those experienced in the previous two recessions.
A renewed pessimism on the part of households
may also have contributed to the reluctance of
consumers to step up spending over the latter part
of 1991. As noted previously, consumer confidence, which was quite low at the beginning of the
year, rose markedly upon the conclusion of the
Gulf war. However, as it became apparent that the
anticipated recovery in the economy was not materializing and announcements of layoffs resumed,
confidence turned down, dropping especially
sharply toward the end of the year. In January
1992, the Survey Research Center's index of consumer sentiment stood at the levels of last winter,
while the Conference Board's confidence index
was below that seen in the 1981-82 recession.
Many analysts observed that consumers appeared
to be more apprehensive than normally might
be expected, given the broad macroeconomic
circumstances—for example, the unemployment
rate has remained well below that reached in the
early 1980s—suggesting that concerns about
longer-run economic prospects may have contributed to the heightened anxiety among households
last fall.
After dropping sharply in January, housing starts
posted a moderate recovery over the remainder of
the year, fueled by a reduction in mortgage rates to
their lowest levels since the 1970s. Sales of new
and existing single-family homes rose over the
year, with the pickup in demand reportedly especially pronounced from first-time buyers. Reflecting the strengthening in demand, the excess supply
of unsold new homes diminished, and the pace of
single-family housing starts moved above 900,000
units at an annual rate by the fourth quarter, an
increase of more than 16 percent from a year
earlier. Nevertheless, production was well below
Monetary Policy Report to the Congress
that of earlier years, and, despite the upturn in
activity, the single-family housing market remains
softer than would be expected given recent mortgage rates and the rising number of households of
prime homebuying age. Continued lender caution
about granting land-acquisition and construction
loans reportedly has damped production in some
locales. However, given the absence of significant
price pressures in the housing market, restraint on
the demand for single-family homes, stemming
from weak income growth, concerns about employment prospects, and poor conditions for home selling, likely has been a more prominent influence on
homebuilding than have supply constraints.
In the multifamily housing market, an excess
supply of vacant units and restraints on credit availability continued to depress construction last year.
Starts of multifamily units fell about 30 percent
over the twelve months of 1991, and the number of
starts during the year was the lowest since the
1950s. There have been numerous reports of restrictive lending practices damping activity in this
sector. However, vacancy rates for rental units
remain exceptionally high—and rents soft—
suggesting that in many areas new projects might
well be of questionable economic viability. Until
market supplies begin to tighten discernibly, activity in this segment of the market is unlikely to
show appreciable improvement.
Business Spending—Investment in Inventories
and Fixed Capital
In early 1991, the investment climate was dominated by the effects of the decline in the demand
for business output and the jump in energy prices
during the second half of 1990. With profit margins
down sharply and inventory imbalances emerging
in a number of sectors, businesses reduced production and employment substantially between October 1990 and March 1991. Cutbacks in the motor
vehicle sector were especially sharp over that
period, although output of most other types of
goods and materials turned down as well.
By the spring, inventories generally were better
aligned with sales, and operating profits, while still
low, had turned up. As a result, the improvement in
aggregate demand in the second quarter was accompanied by an increase in business output, and
229
industrial production rose an average 0.7 percent
per month from April to July. Despite the firming
in sales, businesses remained cautious, and inventory levels continued to decline through midyear.
In late summer, however, final demand slackened, and after seven months of decline, business
inventories accumulated at a substantial rate from
September through December. The rise in inventories was centered in wholesale and retail trade, and
inventory-sales ratios there moved into ranges that
appeared undesirably high in light of carrying costs
and expected sales. A portion of the accumulation
appeared to consist of goods ordered from abroad;
indeed, a partial reaction to the overhang may have
been visible in the sharp drop in nonoil imports in
November. Nonetheless, retailers evidently also reduced orders from domestic suppliers, contributing
to the sluggish pattern of manufacturing output in
the fourth quarter. By January of this year, factory
production had dropped back to its level of a year
earlier, and the operating rate in industry was back
down to levels that, prior to last winter, had not
been seen since the brief industrial slump of 1986.
Business investment in fixed capital fell 7 percent in real terms over the four quarters of 1991. As
is typical during recessions, spending was inhibited
by weak profits, a rise in excess capacity, and
uncertainty regarding the outlook for sales. However, investment outlays last year also were depressed by a desire on the part of many businesses
to reduce debt burdens and by a continued oversupply of office and other commercial space. Even
adjusting for cyclical considerations, last year's
weak pace of investment appeared to extend the
relatively slow rate of capital formation evident for
some time. The capital stock in the nonresidential
business sector, net of depreciation, has risen about
23A percent at an annual rate over the past decade—
down from 33A percent annually during the previous decade. In part, this pattern has owed to a shift
toward shorter-lived assets—such as computers—
that depreciate more quickly. However, such outlays, by generating a relatively high flow of capital
services per dollar of investment, have cushioned
the impact on productivity of the slowing pace of
capital formation. Even so, the quantity of investment, which has also been depressed by large federal budget deficits and the resulting low level of
national saving, has been inimical to productivity
growth and thus to the advance of living standards.
230
Federal Reserve Bulletin • April 1992
Real spending for equipment fell 3lA percent
over 1991, as outlays plunged in the first quarter
and showed only limited improvement on net over
the remainder of the year. The strongest area in
investment spending was computers, for which real
outlays increased more than 40 percent at an annual rate over the second half of the year; these
gains were driven by new product introductions
and by the substantial price cuts offered by computer manufacturers. In contrast, business investment in other types of equipment generally declined, on balance, over the year. Outlays for
industrial equipment continued to deteriorate as
excess capacity limited expansion in the manufacturing sector, and business purchases of motor vehicles dropped off sharply. In addition, domestic orders for commercial aircraft plunged after midyear
as a number of domestic airlines trimmed investment plans. Although the large backlog of unfilled
orders that still remains should sustain production
and shipments for some time, the slackening in
demand indicated by the sharp downturn in aircraft
orders suggests that the growth surge in this sector
may have run its course.
Nonresidential construction plummeted 15 percent in real terms over the four quarters of 1991.
The contraction was broadly based, but especially
large declines in outlays were evident for office
buildings and other commercial structures. Despite
the sharp cutbacks in construction in recent years,
prices of existing commercial properties have continued to fall, contributing to the substantial stress
evident in thefinancialsector. Of course, the fundamental problem is the space overhang from the
earlier overbuilding; the vacancy rate for office
buildings nationwide was still close to 20 percent
at the end of the year. However, a lack of liquidity
in this market—in particular, the reluctance of
lenders to finance acquisitions of commercial
properties—has made the adjustment still more
difficult. Such problems are especially acute in the
market for office buildings, where appraised values
have declined nearly 30 percent since 1985 and
where lenders and developers generally have
shown little interest in new projects. For other
commercial structures—primarily shopping centers
and warehouses—the outlook is slightly less downbeat, with the data on new contracts and building
permits suggesting that the steepest declines may
have already occurred. Spending for industrial
structures also generally declined over the year, as
low rates of capacity utilization curtailed plans for
new factory construction. Petroleum drilling activity, meanwhile, dropped sharply in response to the
decline in oil prices.
Federal banking regulators have taken a number
of steps to ensure that supervisory pressures do not
unduly restrict real estate lending. The agencies
have, for example, addressed issues relating to
accounting and appraisal, to make sure that illiquid
real estate exposures are evaluated sensibly and
consistently. And, they have issued guidance to
examiners—and simultaneously to bankers—
emphasizing that banks should not be criticized for
renewing loans to creditworthy borrowers whose
real estate collateral has fallen in value—even
when the banks need to build up capital or reduce
loan concentrations over time. However, with so
adverse a supply-demand imbalance in the property market, lenders understandably have remained
reluctant to bear the risks of real estate exposures.
The Government Sector
Budgetary pressures were widespread in the government sector in 1991. At the federal level, the
unified budget deficit increased to $269 billion in
fiscal year 1991, up $48 billion from the 1990
deficit. In large part, the rise in the deficit was
attributable to the slowdown in economic activity,
which reduced tax receipts and increased outlays
for income-support programs such as unemployment insurance and food stamps. However, as in
1990, the fiscal 1991 deficit also was affected by
special factors: A pickup in net outlays for deposit
insurance added to the deficit, while one-time contributions from our allies to defray the costs of
Operations Desert Shield and Desert Storm reduced it. Excluding deposit insurance and these
foreign contributions, the 1991 deficit totaled
$246 billion.
On the revenue side, federal tax receipts rose just
2 percent in fiscal 1991, the smallest increase in
many years. The slowing in receipts largely
stemmed from weak nominal income growth; indeed, personal income tax payments in 1991, which
accounted for nearly half of total receipts, were
about the same as in 1990 despite changes in tax
provisions that were projected to raise $16 billion
in new revenues.
Monetary Policy Report to the Congress
Meanwhile, spending rose nearly 6 percent in
fiscal 1991. Part of the $71 billion increase in
nominal federal outlays reflected the slightly more
rapid pace at which the Resolution Trust Corporation resolved insolvent thrift institutions last year.
In contrast, outlays were reduced by allied contributions to the Defense Cooperation Account. These
contributions, which are scored as negative outlays
in the budget accounts, exceeded the outlays made
in 1991 for U.S. involvement in the conflict; the
excess will be put toward the replacement of munitions in 1992 and beyond. Excluding deposit insurance and contributions of allies, outlays rose about
9 percent in fiscal 1991. Spending for health programs continued to rise rapidly, elevated by large
increases in health care costs and in outlays for the
medicaid program. Among other entitlement programs, outlays for social security and other incomesupport programs, which together account for onethird of total federal spending, rose more than
11 percent in fiscal 1991, reflecting substantial
increases in the number of beneficiaries. In contrast, declining interest rates reduced the growth
of interest payments on the federal debt. Defense
outlays—excluding foreign contributions—were
up 5Vi percent from fiscal year 1990 to fiscal
year 1991, as the additional U.S. outlays for the
Persian Gulf conflict were only partially offset by
the spending cuts enacted in the 1990 budget agreement and in previous years.
Federal purchases of goods and services, the
portion of federal spending that is included directly
in GDP, fell 3 lA percent in real terms over the four
quarters of 1991. Defense purchases jumped
sharply early in the year to support operations in
the Persian Gulf, but declined substantially over
the remainder of the year as the effects of scheduled cuts in defense outlays were augmented by a
dropoff in purchases for Desert Storm; on net,
defense purchases were down about 41/2 percent
last year. In contrast, nondefense purchases were
up slightly in 1991; increases for law enforcement,
space exploration, and health research offset a
drawdown in inventories held by the Commodity
Credit Corporation.
The fiscal position of state and local governments, which had deteriorated sharply in 1990,
remained poor in 1991. The deficit in the combined
operating and capital accounts (excluding social
insurance funds) narrowed to $34 billion in the
231
third quarter of 1991 from a high of nearly $47 billion in the fourth quarter of 1990; the shrinkage of
this deficit represents the first major improvement
since 1984, when the state and local budget surplus
peaked. Even so, relative to GDP, the deficit still is
quite high on a historical basis. The credit quality
of state and local government debt also continued
to deteriorate last year, as illustrated by the downgrading of the general obligation debt of eight
states by one rating agency; most of the rating
changes were the direct result of budgetary
imbalances.
The poor fiscal position of state and local budgets led to both severe restraints on spending and
sizable tax hikes. Overall, real purchases of goods
and services edged down over the four quarters of
1991. In nominal terms, total expenditures by
these governments were up 4 percent last year, less
than one-half the average pace in recent years.
Receipts rose an estimated 7 percent over 1991, as
numerous jurisdictions imposed a variety of new
tax measures and federal aid to state and local
governments—especially for medicaid—increased
substantially. Nonetheless, many state and local
governments continue to report revenue shortfalls
and spending overruns for the current fiscal year,
setting the stage for another round of budgetbalancing measures ahead.
The External Sector
Measured in terms of the other Group of Ten
(G-10) currencies, the trade-weighted foreign exchange value of the U.S. dollar appreciated 14 percent, on balance, from December 1990 to July
1991, reversing more than one-half of the decline
that had occurred from the middle of 1989 to the
end of 1990. In large part, the rise in the dollar over
this period reflected the quick end to the Gulf war
and expectations of a recovery in the U.S. economy, as well as developments in Eastern Europe
that initially weighed on the German mark. However, as the U.S. economic recovery faltered in late
summer and market participants viewed further
easing actions by the Federal Reserve as more
likely, the dollar again turned down, averaging in
December 1991 only about 3 percent above its
level in December 1990. The dollar rebounded
somewhat in January on market perceptions of a
232
Federal Reserve Bulletin • April 1992
diminished likelihood of an additional easing in
U.S. interest rates and expectations that German
authorities would not push their interest rates up
further.
On a bilateral basis, the dollar rose 19 percent
against the mark between December 1990 and July
1991, amid disappointment about the effect of German unification on German inflation and trade.
During the second half of last year, German monetary policy tightened, and the dollar gave up much
of its previous gains, finishing the year just 4 percent above its December 1990 level. Other currencies in the European Monetary System generally
moved with the mark during 1991, although sterling slipped somewhat near year-end. The dollar
declined about 4 percent on net against the yen in
1991, as increasing Japanese trade surpluses led to
the view that an appreciation of the yen would be
welcomed by the authorities.
The merchandise trade deficit narrowed to less
than $75 billion in 1991, compared with $108 billion in 1990; the trade deficit last year was the
smallest since 1983. An especially large decline in
the deficit was registered early in the year, as the
drop in oil prices sharply reduced the value of
imports. In addition, trade flows during the first
half of 1991 were influenced by the weakening of
U.S. activity (which reduced demand for imports),
by continued growth abroad (which boosted exports), and by the lagged effects of the decline in
dollar exchange rates that had taken place in 1990.
However, imports rose sharply in the third quarter,
and the trade deficit widened somewhat in the
second half of the year. The current account balance recorded a small surplus, on average, during
the first three quarters of 1991, a sharp improvement from the $92 billion deficit in 1990. However,
about half of that improvement resulted from cash
grants from foreign governments to support operations in the Persian Gulf; excluding these transfers,
the current account showed an average deficit of
$48 billion at an annual rate over the first three
quarters of 1991. The improvement in the current
account (excluding transfers) was somewhat
greater than that in the trade balance owing to a
strengthening of net service receipts in such areas
as travel, education, and professional services.
U.S. merchandise exports grew about 10 percent
in real terms over the four quarters of 1991, tempering the production declines associated with the
weakness in domestic demand. Exports rose fairly
strongly in the second quarter, as high levels of
investment in such countries as Germany and Japan
boosted exports of computers and other capital
equipment. Economic activity in the major foreign
industrial countries weakened as the year wore on,
however, and with a deterioration in the competitive position of U.S. companies following the appreciation of the dollar over the first half of the
year, export growth slowed markedly in the third
quarter. Exports surged again in the fourth quarter,
led by sales of computers, aircraft, and other capital goods. However, some of the recent increase
appears to represent a bunching of sales rather than
an increase in economic activity abroad.
Merchandise imports excluding oil grew about
4 percent in real terms during 1991. Imports declined early in the year as weak domestic spending
reduced the demand for foreign goods. As domestic demand in the United States turned up in the
spring, imports—especially of automotive products, computers, and consumer goods—rose and
remained strong through the summer. With the
subsequent weakening in demand, however, some
of the additional import volume apparently ended
up on retailers' shelves. In response, U.S. businesses reduced orders from abroad, and import
growth slowed sharply over the fourth quarter. The
quantity of oil imports, which had plunged after the
sharp rise in oil prices in the fall of 1990, generally
moved up through the third quarter as refiners
moved to rebuild inventories. However, oil import
volumes turned down again in the fourth quarter,
reflecting sluggish U.S. activity and unseasonably
warm weather.
The sharp reduction in the recorded U.S. current
account deficit in the first three quarters of 1991
was mirrored by changes in recorded capital inflows and the statistical discrepancy. The statistical
discrepancy in the international accounts, which
had jumped to $64 billion in 1990, declined to
virtually zero in the first three quarters of 1991.
Inflows of official capital were about matched by
outflows of private capital in the first three quarters
of 1991. Net official inflows amounted to $16 billion despite net intervention sales of dollars in
foreign exchange markets by the G-10 countries
and a drawdown of reserves held in the United
States by countries helping to cover the costs of
Desert Storm; some countries also financed their
Monetary Policy Report to the Congress
contributions by borrowing and liquidating investments in the Euromarkets. Net private capital outflows were $18 billion in the first three quarters,
largely accounted for by banks. In part, these outflows reflected the increased net demand for funds
in the Euromarkets associated with Desert Storm
transfers. In addition, the elimination by the Federal Reserve of certain reserve requirements in
December 1990 led some U.S. agencies and
branches of foreign banks to increase their issuance
of large time deposits in the United States and to
reduce their reliance on borrowing from abroad.
Securities transactions in the first three quarters
of 1991 reflected the continued internationalization
of financial markets. Although the net inflow was
modest, private foreigners added substantially to
their holdings of U.S. stocks and bonds, while U.S.
residents bought a large volume of foreign stocks
and bonds. Reflecting interest rate developments
that encouraged shifting from short- to long-term
financing, both issues of foreign bonds in the
United States and issues of Eurobonds by U.S.
corporations were strong. Capital outflows associated with U.S. direct investment abroad also were
sizable, as U.S. investors positioned themselves to
take advantage of EC 1992 and participated in the
privatization of previously state-owned enterprises
in such countries as Mexico. In contrast, foreign
direct investment in the United States was far
below recent peaks; foreign takeovers of U.S. businesses declined, and reinvested earnings were depressed by the recession.
Labor Markets
Labor market conditions generally deteriorated in
1991, and the unemployment rate rose above 7 percent by the end of the year, the highest level since
1986. Employers had moved quickly to shed workers when the recession took hold during the second
half of 1990, and this pattern continued into 1991,
with nonfarm payroll employment down sharply
over the first four months of the year. Economic
conditions improved in the spring, and labor demand turned up for a time. However, the subsequent weakening in activity in the late summer led
to a renewed bout of layoffs that has continued into
early 1992, retracing the job gains recorded during
the spring and summer.
233
The net job losses last year were widespread by
industry and reflected both the cyclical weakness in
labor demand associated with the recession and
more fundamental efforts by many businesses to
restructure operations and permanently reduce the
size of their workforces. Employment in manufacturing, which began its decline in 1989, fell more
than 400,000 over 1991' with most of the losses in
the durable goods sector. The continued contraction in commercial building depressed construction
employment despite the moderate recovery in residential housing demand. Efforts to restructure existing operations and to downsize workforce levels
were evident in the finance, insurance, and real
estate sector as well, where job losses last year
stood in contrast to the past pattern of continued
hiring during recessions. Employment in trade establishments also fell substantially over the year,
pushed down by the decline in consumer spending
and the high degree of financial distress among
retailers. In contrast, employment in services continued to trend up over the latter part of the year, as
steady gains in health services more than offset
sluggish hiring in the more cyclically sensitive
business and personal service industries.
Reflecting the substantial declines in output and
employment over the past year and a half, the
unemployment rate rose more than IV2 percentage
points between July 1990 and December 1991.
Moreover, the distribution of job losses was especially wide compared with previous episodes of
rising unemployment. Increases in unemployment
were broadly based across regions, industries, and
occupations, and an unusually large proportion appeared to constitute permanent layoffs.
Nonetheless, the rise in the jobless rate has been
less than in prior episodes of increasing unemployment. In part, the rise has been smaller because
labor force growth has been unusually slow over
the past two years. In particular, the labor force
participation rate, which stood at about 66 percent
at the beginning of this year, is Vi percentage point
below its average during the first half of 1990. This
decline in participation appears to contain some
elements of a cyclical pattern: The number of discouraged workers rose over the year, and sizable
increases in the number of retirees were reported,
perhaps reflecting to some extent a spate of early
retirement programs. However, the weak labor
force growth of recent years may also represent a
234
Federal Reserve Bulletin • April 1992
downshift in the trend rate of increase in labor
supply that—if not offset by productivity gains—
could translate into a reduction in the rate of trend
potential output growth. In this regard, the composition of the corresponding increase in nonparticipants is, in part, a favorable long-term development. There has been a sharp rise in recent years in
the number of individuals who have left the labor
force in order to attend school. Although that increase may, to some degree, reflect declining opportunity costs associated with the poor job prospects of last year, recognition of the longer-term
decline in relative wages among lower-skilled
workers may also have played a role. As these
individuals reenter the labor force upon completion
of their schooling, their increased skills should
boost labor productivity and potential output in
future years.
Efforts to increase labor productivity have also
intensified in the business community. If the aforementioned plans to reorganize corporate structures
and to downsize the labor force requirements of
existing operations are successful, the possible outcome is a significant improvement in the productivity trend, much as occurred in the manufacturing
sector after the considerable compression of manufacturing organizations in the early 1980s. The
performance of productivity, which rose about
1 percent for the nonfarm business sector in 1991,
has been somewhat better than is typical in a weak
economy. However, last year's advance came after
a decline in 1989 and no change in 1990, and it is
difficult at this stage to distinguish more fundamental changes in productivity trends from the apparent
cyclical tendency last year for employers to reduce
labor inputs aggressively in response to deteriorating sales.
With widespread layoffs and the unemployment
rate rising throughout the year, the upward pressures on wages that had intensified between 1987
and mid-1990 diminished somewhat over 1991. As
measured by the employment cost index, increases
in hourly compensation for private nonfarm workers rose 4Vi percent over the four quarters of 1991,
down from more than 5 percent in the first half of
1990. The wage and salary component of hourly
compensation, which rose 3 percent at an annual
rate over the second half of last year, exhibited the
most deceleration. Although employer costs for
benefits have also decelerated from their mid-1990
peak, increases in benefit costs—at 6V\ percent in
1991—remained well above those for wages alone.
Expenses for health insurance have continued to
spiral upward despite considerable efforts on the
part of employers to control costs by negotiating
directly with providers and by increasing workers'
share of health expenditures. Employer premiums
for workers compensation insurance also rose
sharply last year, reflecting both a swelling in the
number of claims and the rapid pace of inflation of
medical care costs.
Price Developments
Evidence that a significant slowing of inflation is
under way mounted over 1991. The consumer price
index rose 3 percent during the year, about half the
rate of increase in 1990. A sharp swing in energy
prices accounted for a major part of this deceleration. However, the elements of a more fundamental
diminution of inflation moved into place: Labor
cost increases moderated; expectations of inflation
eased; and upward pressures from import prices
and industrial raw material prices were virtually
absent during the year.
Energy prices dropped sharply in 1991, mirroring the changes in oil prices over the year. The CPI
for energy fell 30 percent at an annual rate in the
first quarter of last year, as the sequence of events
in the Middle East reduced the posted price of West
Texas Intermediate crude oil from a peak of about
$39 per barrel in October of 1990 to less than $20
by February of last year. Oil prices subsequently
held near that level, but gasoline prices firmed
somewhat during the summer as reduced imports
and domestic refinery problems led to some tightness in inventories. However, these forces were
offset by declines in natural gas and electricity
rates, and energy prices changed little, on balance,
in the second and third quarters. Price pressures
again emerged in the fall as crude oil prices trended
up in September and October on concerns about
supplies from the Soviet Union. Since October,
however, oil prices have retreated again, with the
most recent quotes at about $18 per barrel. These
latest reductions probably will show up at the retail
level in the first quarter of 1992; indeed, the energy
component of the producer price index fell nearly
3 percent in January, and other preliminary infor-
Monetary Policy Report to the Congress
mation points to sizable declines in both retail
gasoline and heating oil prices.
The CPI for food rose just 2 percent over 1991,
well below the increases of 5 percent to 5V2 percent
in the three previous years. In part, the subdued
pace of food price inflation reflects an increased
supply of livestock products. Beef production
turned up last year in response to the strong prices
that prevailed in the preceding few years, and supplies of pork and poultry rose sharply; in response,
meat and poultry prices fell about 2 percent over
the year. The deceleration in food prices also extended to food groups whose prices are influenced
more by the cost of nonfarm inputs than by supply
conditions in agriculture; for example, the increase
in the price of food away from home last year was
the smallest since 1964. Elsewhere, there were
large monthly variations in prices for fruits and
vegetables, as adverse weather conditions temporarily boosted prices in the first half of the year and
prices for some fresh vegetables jumped toward the
end of the year because of the whitefly infestation
in California.
The consumer price index for items other than
food and energy rose 4V2 percent in 1991, about
3
A percentage point less than in 1990. The index
was boosted early in the year by increases in federal excise taxes on cigarettes and alcoholic beverages and by an increase in postal rates. Price increases last winter also were enlarged by the passthrough of the rise in energy prices to a wide range
of nonenergy goods and services. However, the
subsequent decline in energy prices soon spread to
the nonenergy sector, and except for an uptick
during the summer associated with some bunching
of price increases, this measure of core inflation
moderated significantly over the remainder of the
year.
Prices for nonenergy services decelerated considerably last year, rising 4J/2 percent after an increase
of 6 percent in 1990. Reflecting weak real estate
markets, rent increases slowed sharply, with both
tenants' rent and owners' equivalent rent up less
than 4 percent last year. The drop in interest rates
pushed down autofinancingcosts more than 7 percent. And, after a brief spurt early in the year,
airfares receded as energy costs fell and the weak
economy cut into demand; more recently, however,
airfares have turned up again as carriers have reduced the availability of and increased restrictions
235
on low-end "super-saver" fares. In contrast, prices
for medical care services rose 8 percent over the
year, while tuition costs and other school fees were
up nearly 10 percent.
The CPI for commodities excluding food and
energy rose 4 percent in 1991, about Vi percentage
point faster than in 1990. In large part, the more
rapid rate of inflation in goods prices reflected the
aforementioned hike in excise taxes and, despite
weak sales, larger increases in prices for both new
and used cars. However, a slowing in price increases was evident for a number of other goods,
notably apparel, household paper products, and
personal care items.
The easing of inflationary pressures has been
even more evident at earlier stages of processing.
The producer price index for finished goods edged
down over 1991 after an average 5 percent annual
rate of increase over the three preceding years; this
index posted another small decline in January of
this year. Falling prices for energy and consumer
foods accounted for much of the overall deceleration last year. Even apart from food and energy,
however, producer prices slowed to a 3 percent
pace. Prices for intermediate materials excluding
food and energy declined 3A percent over the year,
reflecting declining fuel and petroleum feedstock
costs, an easing of wage pressures, and weak demand. The downturn in economic activity also
depressed industrial commodity markets last year.
After dropping sharply in the fourth quarter of
1990, spot prices for these commodities continued
to decline gradually over most of 1991.
MONETARY AND FINANCIAL DEVELOPMENTS
IN 1991
The principal objective of monetary policy this past
year has been to help lay the groundwork for
a sustainable expansion without sacrificing the
progress against inflation that had already been set
in motion. The Federal Reserve progressively eased
money market conditions in 1991 amid signs of
continued sluggish economic activity, weak growth
in the broader monetary and credit aggregates, and
diminishing inflationary pressures. A more generous provision of reserves through open market
operations, coupled with five separate reductions in
the discount rate—which now stands at its lowest
level in nearly 30 years—brought the federal funds
236
Federal Reserve Bulletin • April 1992
rate and most other short-term interest rates down
about 3 percentage points over the course of the
year. These actions, building on earlier easing efforts, pushed the federal funds rate down to 4 percent, its lowest sustained level since the 1960s and
nearly 6 percentage points below its most recent
peak in the spring of 1989.
The faltering of the economic recovery in the
second half of 1991 owed in part to an unusually
cautious approach to credit on the part of both
borrowers and lenders. Efforts by debt-burdened
households and businesses to pare debt in order to
strengthen balance sheets that had been strained by
the general slowdown in income and by declines in
property values exerted further damping effects on
credit demands and on aggregate spending. Faced
with deteriorating asset values and pressures on
capital positions, depositories and other lenders
maintained tighter lending standards and were
somewhat hesitant to extend credit. The more circumspect attitude toward credit and spending on
the part of borrowers and financial intermediaries
was manifest in the behavior of the aggregate debt
of domestic nonfinancial sectors, which grew near
the bottom of the Federal Open Market Committee's monitoring range despite burgeoning U.S.
Treasury borrowing. Not only was overall credit
growth subdued, but credit flows continued to be
rechanneled away from depositories, reflecting the
more restrictive lending standards at banks and
thrifts as well as efforts by borrowers to make
greater use of longer-term debt and equity in order
to strengthen their balance sheets. Partly as a result,
the monetary aggregates M2 and M3 also finished
the year near the bottoms of their target ranges.
To prevent these forces from stifling the recovery, the Federal Reserve eased money market conditions aggressively in the latter part of the year. In
light of weak aggregate demand and reduced inflationary potential, long-term interest rates—which
had largely failed to respond to monetary easings
earlier in the year—came down substantially toward the end of 1991. This decline prompted a
flood of mortgage refinancings and additional corporate and municipal bond offerings, which helped
reduce the financing burdens of nonfederal sectors.
Lower interest rates also contributed to a major
stock market rally, which induced firms to boost
equity issuance and pay down debt, partially reversing the trend of the 1980s toward increased
leverage that had severely stretched corporate balance sheets.
On the whole, the nation made considerable
progress in strengthening its balance sheet in 1991.
Less reliance on debt, greater use of equity, and
lower financing costs have helped ease debtservicing burdens for many financially troubled
households and corporations. Although to date the
trend toward deleveraging has exerted a restraining
effect on aggregate spending, over time this trend
should help put consumers, firms, and financial
intermediaries on a sounder financial footing, paving the way for healthy, sustainable economic
growth.
The Implementation of Monetary Policy
The Federal Reserve eased money market conditions several times in the first few months of 1991,
extending the series of easing moves initiated in
the latter stages of 1990. Against a backdrop of
further declines in economic activity, abating price
pressures, weakness in the monetary aggregates
early in the year, and continuing credit restraint by
banks and other financial intermediaries, a more
expansive open market posture was adopted, in
conjunction with two xh percentage point reductions in the discount rate, to engender a 125 basis
point decline in the federal funds rate over the first
four months of the year. Short-term Treasury rates
generally followed suit, and banks reduced the
prime rate in three 50 basis point increments to
8V2 percent.
Long-term interest rates, by contrast, were
roughly unchanged on balance over the first few
months of the year. At first, these rates fell somewhat in response to the continued downturn in
economic activity and declining energy prices, especially in light of initial successes in the Gulf war
that ensured an unimpeded flow of oil. Success in
the initial phases of the war also prompted a brief
dip in the exchange value of the dollar, as safehaven demands that had been propping up the
dollar's value in the face of falling interest rates in
the United States dissipated.
In March, bond yields drifted up on the post-war
rebound in consumer confidence and other evidence, particularly from the housing industry, that
an economic upturn was at hand. The improving
outlook for recovery also contributed to narrowing
Monetary Policy Report to the Congress
risk premiums on private securities, especially on
below-investment-grade issues, which had reached
very high levels in January. The debt and equity
instruments of banks performed especially well
over this period, responding to lower short-term
interest rates and the likelihood that an economic
rebound would help limit the deterioration in their
loan portfolios. Moderate official support for the
dollar, better prospects for a U.S. economic recovery, and a rise in U.S. long-term interest rates
relative to those abroad, together with an uncertain
economic and political situation overseas, especially in the Soviet Union, helped to reverse the
dollar's slide on foreign exchange markets.
As evidence of a nascent economic recovery
cumulated through the remainder of the spring and
into early summer, interest rates and die dollar
continued to firm, and quality spreads narrowed
further. Although the increases in rates during this
period were most pronounced at the long end of the
maturity spectrum, short-term rates backed up a bit
as well as prospects for additional monetary easings faded. Indeed, with the pace of economic
activity apparently quickening, and with the
broader monetary aggregates near the middles of
their target ranges, the Federal Reserve held money
market conditions steady, as the stimulus already in
train seemed sufficient to support an upturn in
aggregate spending.
As the summer passed, however, the strength
and durability of the recovery appeared less assured. Aggregate spending, production, and employment began to falter, easing wage and price
pressures. In addition, the broader monetary aggregates suddenly weakened dramatically, with M2
coming to a virtual standstill and M3 actually declining in the third quarter. The softness in the
aggregates was symptomatic of a warier approach
to spending and borrowing on the part of households and corporations, whose balance sheet problems were exacerbated by the stagnant economy. In
addition, credit standards at financial intermediaries remained restrictive, and spreads between loan
and deposit rates remained high by historical standards, reinforcing households' inclinations to pay
down debt rather than to accumulate assets.
To help ensure that these forces did not imperil
the recovery, the Federal Reserve moved to ease
money market conditions further during the latter
part of the year. Pressures on reserve positions
237
were reduced slightly in August and again in September, with the latter move accompanied by a 50
basis point reduction in the discount rate. With the
economic climate remaining stagnant, price pressures subdued, and the broader monetary aggregates still mired near the bottoms of their target
ranges, the System's easing moves became more
aggressive in the fourth quarter, culminating in a
full 1 percentage point reduction in the discount
rate on December 20. All told, these moves combined to drive the federal funds rate down from
5% percent in July to 4 percent by year-end. Most
other short-term interest rates declined by similar
magnitudes, and the prime rate was reduced by
2 percentage points, to 6V2 percent.
The decline in short-term interest rates, in combination with flagging economic activity, depressed
credit demands, and prospects for lower inflation,
contributed to bringing long-term interest rates
down significantly in the latter part of 1991. The
thirty-year Treasury bond rate dropped about a
percentage point over the second half of the year,
and mortgage interest rates tumbled to their lowest
levels in many years. Declining interest rates
prompted a spate of mortgage refinancings, corporate and municipal bond offerings, and a major
stock market rally, which propelled most indexes to
record highs. Although monetary growth bounced
back a bit in the fourth quarter, both M2 and
M3 remained near the lower ends of their
respective growth cones. The dollar, which had
begun to lose ground in foreign exchange markets
in the summer—when the weakness in money and
credit raised the specter of additional easings of
U.S. monetary policy—depreciated further in the
fourth quarter as the economic situation deteriorated and the pace of policy easings quickened.
Rising interest rates in Germany also put downward pressure on the foreign exchange value of the
dollar. In January 1992, the dollar rebounded
somewhat, reflecting an emerging view that interest rate declines in the United States and interest
rate increases in Germany might have come to
an end. The former view was also reflected in
the U.S. bond market, where rates retraced a
portion of their earlier declines, partly on brightening prospects for the U.S. economy but also
on concerns that impending fiscal stimulus may
increase federal government demands on credit
markets.
238
Federal Reserve Bulletin • April 1992
Monetary and Credit Flows
Patterns of credit usage and financial intermediation, which began to shift even before the onset of
the economic downturn, continued to evolve in
1991, distorting traditional relationships between
overall economic activity and the monetary and
credit aggregates.
These changes were evident in the behavior of
the aggregate debt of nonfinancial sectors, which
expanded 43A percent in 1991, leaving this aggregate near the bottom of its monitoring range. Robust growth in federal government debt, owing to
the economic downturn and to additional outlays
for federal deposit insurance, masked an even
weaker picture for nonfederal debt. Households,
nonfinancial corporations, and state and local governments accumulated debt at an anemic 23/4 percent rate in 1991, the slowest advance in decades
and below even the sluggish growth rate of nominal GDP.
The small rise in nonfederal debt velocity last
year runs counter to the pattern seen in the 1980s,
when the accumulation of debt vastly outstripped
growth in nominal GDP. The rapid buildup of debt
in the 1980s was likely a result of the deregulation
of interest rates and financial innovations, which
combined to lower the cost of borrowing to households and businesses, spawning a surge in leveraging activity. Greater debt burdens may also have
been accumulated under the assumption that nomi3.
nal income growth would be sustained at the elevated pace of the mid-1980s and that the prices of
assets purchased with credit would continue to
climb.
In recent years, however, asset values and income growth have fallen short of these expectations. In particular, depressed commercial and residential real estate values, coupled with slower
income growth, have eroded the net worth of some
borrowers and severely strained the ability of
highly leveraged households and corporations to
service debt. These difficulties, in turn, have fed
back on to the strength of thefinancialintermediaries that extended the credit. In an effort to bolster
depleted capital positions, reduce financing burdens, and shore up weakened balance sheets, both
borrowers and lenders have adopted a more chary
attitude toward additional credit.
This more cautious approach to leverage has
interacted with the sluggish pace of economic activity to restrain borrowing across nearly all sectors
of the economy. Nonfinancial business sector debt,
held in check by the decline in financing needs
associated with weak aggregate demand and by
efforts of debt-laden firms to restructure their balance sheets, grew only Vi percent in 1991. Taking
advantage of a buoyant stock market, particularly
in the latter part of the year, corporations turned to
equity financing; net equity issuance for the year
was positive for the first time since 1983, and the
ratio of the book value of nonfinancial corporate
Growth of money and debt
Percent
Ml
M2
M3
Debt of domestic
nonfinancial sectors
Annually, fourth quarter to fourth quarter1
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
7.5
5.4 (2.5 J )
8.8
10.4
5.4
12.0
15.5
6.3
4.3
0.6
4.2
8.0
8.9
9.3
9.1
12.2
8.0
8.7
9.2
4.3
5.2
4.8
3.8
3.1
9.5
12.3
9.9
9.9
10.8
7.6
9.0
5.9
6.4
3.6
1.7
1.3
9.2
9.9
9.2
11.3
14.1
13.8
13.8
10.4
9.4
8.2
6.9
4.7
Quarterly (annual rate)3
1991: 1
2
3
4
5.2
7.4
7.5
11.1
3.5
4.3
1.1
3.3
3.3
1.8
-1.1
1.2
4.5
4.0
4.9
5.2
Period
1. From average for fourth quarter of preceding year to average for fourth
quarter of year indicated.
2. Adjusted for shift to NOW accounts in 1981.
3. From average for preceding quarter to average for quarter indicated.
Monetary Policy Report to the Congress
debt to equity, which had soared in the 1980s
amid a flurry of corporate restructurings, actually
turned down in 1991. Firms also took advantage
of lower interest rates to refinance higher-rate
long-term bonds and to reduce uncertainty about
their futurefinancingburdens by substituting longterm debt for short-term borrowing. Overall, the
mixture of less debt, more equity, and lower interest rates had a salubrious effect on the financial
positions of manyfirms.Indeed, the ratio of interest
payments to cash flow for all nonfinancial firms
declined in 1991, reversing some of the runup
seen in the late 1980s. Consistent with an improving financial picture and prospects of an
economic rebound, quality spreads on corporate
issues narrowed considerably from their peaks in
early 1991, especially on below-investment-grade
securities. In addition, downgradings of corporate
bonds dropped sharply in the third and fourth
quarters, although they still ran higher than the
pace of upgrades.
Deleveraging was also evident in the household
sector in 1991. Consumer credit declined as households reined in expenditures, curbed their accumulation of financial assets, and pared existing debt
burdens. Households took advantage of declining
interest rates, particularly in the fourth quarter, by
refinancing outstanding mortgages; they also substituted home equity loans for installment debt and
other consumer credit, which carry higher financing costs and are no longer tax deductible. By
reducing their net accumulation of debt and refinancing a substantial volume of their remaining
borrowings at lower rates, households were able to
ease their financing burdens, reducing the ratio of
scheduled debt payments to disposable personal
income, which had risen sharply in the 1980s. Even
so, loan delinquency rates rose through much of
1991, albeit to levels not out of line with what was
seen in previous cyclical downturns. On the other
side of the ledger, many households that had net
creditor positions saw their interest incomes decline last year.
Faced with intensifying budgetary pressures and
numerous downgradings, state and local governments also put only limited net demands on credit
markets in 1991. The outstanding debt of this sector grew but 3 percent last year, the smallest increase in more than a decade. Gross issuance of
municipal bonds was substantial, however, as states
239
and localities moved to refinance debt at lower
rates.
Efforts by borrowers to restructure balance
sheets by substituting long-term debt and equity for
short-term borrowing, along with more restrictive
credit standards by some lenders and the closing
and shrinkage of troubled thrifts, have affected the
channels through which debtflows.In particular, in
recent years there has been a major rerouting of
credit flows away from depository institutions. The
decline in the importance of depositories, when
measured by the credit they book relative to the
total debt of nonfinancial sectors, has been striking,
and this trend was extended in 1991. Not only did
the thrift industry continue to contract, as the direct
result of RTC resolutions as well as the retrenchment of marginally capitalized institutions, but
commercial banks cut back on their net credit extensions. Indeed, bank credit increased only 4 percent, not even enough to offset the continued runoff
at thrifts. Weakness was particularly evident in
bank lending, which shrank VA percent last year;
banks' holdings of government securities, by contrast, expanded at a rapid clip.
Although the shifting composition of bank asset
flows in 1991 was reminiscent of patterns seen in
previous periods of languid economic activity, the
magnitude of the downturn in loan growth last year
was more pronounced than the usual experience.
Apparently, loan growth was depressed not only by
reduced credit demands, but also by a more restrained bank lending posture. Faced with deterioration in the quality of their assets, higher deposit
insurance premiums, and more stringent requirements for capital, banks retrenched, adopting a
more cautious attitude regarding credit extensions.
Concerns about capital, especially in light of rising
loan delinquency rates and mounting loan loss provisions, induced many banks to continue tightening
lending standards through the early part of 1991
and to maintain fairly restrictive standards over the
balance of the year.
A more prudent approach to capitalization and
lending decisions is, in the main, a positive development that ultimately will result in strengthened
balance sheets for the nation's depositories. Reflecting this improved outlook, prices of outstanding bank debt and equity increased markedly from
their lows in late 1990 and early 1991, outperforming broader market indexes. Bank profits, benefit-
240
Federal Reserve Bulletin • April 1992
ting from wide spreads between loan rates and
deposit rates, also showed improvement relative to
the depressed levels of recent years, although they
remained low by broader historical standards.
To date, depository retrenchment appears to have
had some restraining effects on aggregate borrowing. Of course, in some areas, much of the credit
formerly extended by banks and thrifts has been
supplanted by other intermediaries and by credit
advanced directly through securities markets, at
little if any additional cost to borrowers. For example, growing markets for securitized loans largely
have filled the vacuum created by depository restraint in the areas of residential mortgage and
consumer lending. Similarly, many large businesses
have turned to stock and bond markets to meet
credit needs and to restructure balance sheets, reducing their reliance on banks as well. Both banks
and thrifts have cut back on other types of lending
that can less easily be rechanneled, however, including construction and nonresidential real estate
loans, loans to highly leveraged and lower-rated
borrowers, and loans to small and medium-sized
businesses. Other financial intermediaries, including life insurance companies, have been afflicted
by some of the same balance sheet problems plaguing depositories and have also curbed their lending
to these sectors. As a result of the pullback in credit
supplies, these borrowers now face somewhat more
stringent borrowing terms.
As in 1990, the retrenchment of banks and thrifts
and the associated redirection of credit flows away
from depositories continued in 1991 to have profound effects on the broad monetary aggregates
and their traditional relationships with aggregate
economic activity. M3, which comprises most of
the liabilities used by banks and thrifts to fund
credit expansion, has been most affected by the
reduced importance of depository credit in funding
spending. The velocity of this aggregate, which
declined through much of the 1980s, has trended
up in recent years; this trend continued in 1991, as
M3 rose only VA percent, well below the pace of
nominal GDP, leaving this aggregate near the bottom of its target range.
In the first few months of the year, M3 showed
surprising strength, boosted in part by afirmingof
its M2 component, which benefited from declining
interest rates. The most important single factor
contributing to strong M3 growth in the early part
of 1991, however, was the rebirth of the market for
"Yankee CDs"—large time deposits issued by foreign banks in the United States. After the 3 percent
reserve requirement against nonpersonal time deposits and net Euroborrowings was lifted at the end
of 1990, foreign banks showed a distinct preference for funding with such instruments, rather than
borrowing from their overseas affiliates or in the
federal funds or repurchase agreement markets.
Domestic depositories, by contrast, faced with high
and rising U.S. deposit insurance premiums, exhibited no inclination to alter their funding strategies
in favor of large time deposits.
The surge in Yankee CD issuance, which totaled nearly $40 billion over the first quarter,
began to taper off a bit as the year progressed,
revealing the underlying weakness in M3. After
slowing somewhat in the second quarter, this aggregate contracted at a VA percent annual rate in the
third quarter, reflecting feeble loan demand in a
tepid economy as well as the restructuring of depositories. The Resolution Trust Corporation
played a direct role in damping M3 growth by
taking assets formerly held by thrifts and funded
with M3 deposits onto its own books and financing
them with Treasury securities. Although M3 rebounded a bit in the fourth quarter, in line with
some firming of bank credit, its growth remained
subdued.
The effects of depository restructuring on M2
remain imperfectly understood. In the past, the
velocity of M2 has tended to move in tandem with
changes in a simple measure of the opportunity
cost of holding this aggregate—that is, with
changes in the returns on alternative short-term
investments relative to those available on assets
included in M2. Typically, when the opportunity
cost of holding M2 declines as decreases in money
market interest rates outpace drops in yields on
deposits, holdings of M2 strengthen relative to
expenditures—and velocity drops. In recent years,
however, this relationship appears to have broken
down, with the velocity of M2 holding up despite a
steep, persistent drop in this measure of opportunity cost. This was particularly evident in 1991,
when M2 expanded at about the same pace as
nominal GDP despite a significant decline in such
opportunity costs. M2 finished the year near the
bottom of its target range and much weaker than
would be expected on the basis of historical rela-
Monetary Policy Report to the Congress
tionships among income, interest rates, and the
public's appetite for monetary assets.
In the early months of the year, M2 growth
accelerated somewhat from its lackluster pace of
late 1990. Narrowing opportunity costs generated
substantial inflows to liquid deposits, particularly
those in Ml, which more than offset continued
runoffs in small CDs. Money growth also was
temporarily boosted by strong foreign demands for
U.S. currency as a safe haven during the crisis in
the Persian Gulf. Through May, M2 growth remained broadly consistent with the general configuration of opportunity costs and income, and near
the middle of its target range.
M2 began to slow in June, however, and stalled
in the third quarter, despite expansion in nominal
income and further declines in opportunity costs.
Growth in this aggregate resumed in the following
quarter, fueled by a surge in transactions deposits
owing to additional declines in opportunity costs,
but inflows to M2 remained fairly weak, and this
aggregate ended the year only a little above the
bottom of its target range.
Although the unusual behavior of M2 relative to
income and opportunity costs has not been fully
explained, it surely is related to the restructuring of
financial flows and to the downsizing of the banking system. With inflows of M2 deposits apparently tending to be more than sufficient to fund
weak depository credit growth, banks and thrifts
seem to have pursued additional retail deposits less
aggressively than in the past. Although rates offered on these deposits did not, until very recently,
fall unusually rapidly in response to declining market interest rates, depositories seem to have acted
in other ways to reduce the cost of funds, including
adjustments in advertising and marketing strategies
that would not show up in traditional measures of
opportunity costs. In addition, by keeping deposit
rates very low relative to loan rates, partly in an
attempt to bolster profit margins while shrinking
their balance sheets, depositories provided households with a greater incentive to finance spending
by holding down the accumulation of M2 assets
rather than by taking on new debt. This incentive
likely reinforced the impetus to borrowing restraint
stemming from household concerns about their
own balance sheets.
The slowdown in M2 growth, particularly in the
third quarter, also appears to have been related to
241
the configuration of returns on financial assets.
Yields on small time deposits and money market
mutual funds largely tracked the downward path of
market interest rates, falling to their lowest levels
since the deregulation of deposit rates and prompting significant outflows from these components of
M2. Although some of these funds shifted into the
liquid deposit components of M2—whose offering
rates responded slowly, as they normally do, to the
declines in market interest rates—a portion of these
funds appear to have left the aggregate. The primary lure seems to have been the stock and bond
markets, which offered higher returns, in part because of the steep upward slope of the yield curve.
Indeed, inflows to stock and bond mutual funds
were robust throughout 1991, and especially since
midyear, when investors seemed particularly intent
on reaching for higher yields by lengthening the
maturity of their portfolios. Depositories, faced
with weak loan demand and pressures on capital
positions, seemed disinclined to compete aggressively for these funds by offering competitive rates
on longer-term CDs.
The rapid pace of activity by the Resolution
Trust Corporation also likely depressed M2 growth
in the third quarter, as it did throughout the year.
The abrogation of existing retail CD contracts and
the disruption of long-standing depositor relationships often attending resolutions of failed thrift
institutions may have encouraged investors to reshape their portfolios, substituting nonmonetary financial assets for M2 deposits.
Despite sluggish income growth, Ml expanded
8 percent in 1991, the swiftest advance since 1986.
Unlike M2, this aggregate has responded to declining market interest rates about as would be expected given historical relationships. Ml was
boosted by large inflows to NOW accounts, whose
offering rates responded very slowly, until the end
of the year, to declining market interest rates. Falling rates also brought new life to demand deposits,
as compensating balances to pay for bank services
surged. Demand deposits likely benefited as well
from the pickup in mortgage refinancings, because
the proceeds from mortgage prepayments are sometimes housed temporarily in demand accounts.
Rapid growth in currency, owing in part to continued strong foreign demands, also contributed to the
strength in Ml, as well as in the monetary base,
which increased 8LA percent last year.
•
242
Treasury and Federal Reserve
Foreign Exchange Operations
This quarterly report, covering the period November 1991 through January 1992, provides information on Treasury and System foreign exchange
operations. It was presented by William J. McDonough, Executive Vice President in charge of the
Foreign Group at the Federal Reserve Bank of
New York and Manager of Foreign Operations for
the System Open Market Account. Robert Ennis
was primarily responsible for preparation of the
report.1
The dollar declined through the end of the calendar
year, approaching historical lows against both the
German mark and the Japanese yen as sentiment
toward the prospects for U.S. economic recovery
turned increasingly negative and large short-dollar
positions were built up. Early in the new year,
however, the dollar recovered somewhat as expectations about the economy tended to stabilize and
short positions were significantly reduced. The dollar' s decline was consequently pared back at the
end of the period to a net V/i percent against the
mark and 4 percent against the yen. On a tradeweighted basis, the dollar declined 23/4 percent, on
balance, over the period.2 On January 17, the U.S.
authorities sold $50 million against yen in thenonly intervention operation of the period.
NOVEMBER AND
DECEMBER
As the period opened, skepticism was deepening
about the prospects for a U.S. economic recovery.
During the fall, it had become increasingly apparent that the tentative pickup in consumer spending
after the Persian Gulf war had served merely to
1. The charts for the report are available on request from Publications Services, Board of Governors of the Federal Reserve System, mail stop 138, Washington, DC 20551.
2. The trade-weighted basis is as measured by the Federal
Reserve Board index.
work off inventories and would not lead to a sustained pattern of growth. Then, just before the
period, any remaining hopes of recovery suffered a
severe blow when the Conference Board's index of
consumer confidence took an unexpected plunge.
Thus, by early November, market participants were
beginning to question what mechanism might still
be able to spark recovery, noting that up to that
point monetary policy had been about the only
instrument available to support the economy.
Under these circumstances, the November 6 announcement that the Federal Reserve had cut its
discount rate Vi percentage point to AVi percent
was widely anticipated. But market observers noted
that the Federal Reserve had now cut the discount
ratefivetimes in eleven months, producing a cumulative drop of 2Vi percentage points, and they were
beginning to doubt whether monetary policy could
do much more to facilitate recovery. At the same
time, they were sensitive to the political pressures
generated by disappointment about the economy
and concerned about what alternative measures
might be proposed. Operators in the exchange markets, who were mindful that interest rate differentials were already widely unfavorable to the dollar,
especially in relation to the German mark, felt a
strong incentive to sell the dollar short.
The dollar declined as events in November and
early December tended to confirm pessimism about
U.S. economic prospects. In mid-November, when
financial markets grew nervous about a congressional proposal to spur consumer spending by capping credit card interest rates, a sharp drop in U.S.
equity prices dragged the dollar down for a few
days. In late November and early December, release of data showing a further drop in consumer
confidence and a much sharper-than-expected drop
in payroll employment prompted another sell-off.
Meanwhile, statistics for consumer price inflation
suggested to financial markets that the Federal Reserve had further leeway to ease monetary policy.
243
In addition, speculation mounted that an excessively expansionist fiscal package might be
forthcoming.
The dollar declined more against the German
mark during this period than against other currencies. This occurred, in part, because interest rates in
Germany were at, and were expected to stay near,
historically high levels. The German economy was
still going through the transition associated with
unification. Although the full force of the unityrelated boom had dissipated earlier in the year,
credit demands were still significant enough to
keep monetary aggregate growth stronger than desired, and inflationary pressures were being kept
alive by high wage demands. Accordingly, market
participants believed that the Bundesbank would
seek to maintain a tight monetary policy stance.
They interpreted the Bundesbank's money market
operations as clear evidence of its intention to
resist domestic and international pressures to ease.
They saw this policy stance as implying that the
large interest rate differentials against the dollar
would be maintained for the foreseeable future.
Market participants also suspected that there
might be tension between the monetary policy objectives of Germany and those of other European
countries where economic activity was generally
decelerating more rapidly. And they were wary of
the possibility that these tensions might be reflected
sooner or later in pressures within the exchange
rate relationships of the European Monetary System (EMS), pressures that might spill over into
the exchange markets more broadly—especially
because final negotiations over eventual monetary
union in Europe were scheduled for early December in Maastricht, the Netherlands.
In this environment, two announcements by the
Finnish authorities in mid-November, first, that the
Finnish markka would float and, later, that it would
be effectively devalued about 12 percent, heightened the sense of exchange rate risk and boosted
the German mark. This episode served as a reminder that market pressures could at times force
unwanted changes in exchange rate policy. In response, market participants rushed to reduce thenholdings of assets denominated in those European
currencies that had previously appeared attractive
because of their high yields but that no longer
carried a yield sufficient to compensate for their
perceived exchange risk. The Swedish krona, for
example, came under significant pressure, forcing
the Riksbank to raise its marginal lending rate a
total of 7 percentage points by early December.
As market participants sought to shift funds
from higher-yielding currencies into the mark,
the exchange rate mechanism (ERM) of the EMS
became strained. Market participants questioned
whether an ERM realignment at the upcoming
Maastricht summit could be avoided, raising further uncertainty about the effects such developments might have on the dollar. Support for the
mark was partly offset, from time to time, by
concerns about the rapidly moving political situation in the Soviet Union and its possible negative
effects on European countries, including Germany.
In the event, the Maastricht summit proceeded
without incident, and tensions among European
currencies abated somewhat by mid-December. But
the growing disparity in economic conditions between the United States and Germany persisted. As
wage negotiations in Germany became more tense,
the Bundesbank moved to increase interest rates
both sooner and by a larger amount than the market
had expected, announcing VI percentage point rises
for both its discount and Lombard rates on December 19. To avoid renewed exchange rate pressures,
all other EMS central banks except the Bank of
England followed this interest rate move, at least in
part, over the next several days. By contrast, on
December 20, the Federal Reserve reduced its discount rate more than had been expected. The cut of
1 percentage point brought the discount rate to
3V2 percent, its lowest level since 1964. The Federal Reserve also appeared to signal that it had
relaxed reserve pressures to an extent consistent
with a decline of about VI percentage point in the
federal funds rate.
As the foreign exchange market responded to
these divergent moves in interest rates, the dollar
continued its decline against the German mark.
After having moved irregularly lower in November
and early December, the dollar moved down a
further 3Vi percent after December 19, hitting its
low of the period of DM1.5025 on December 27.
At this level, the dollar had depreciated 10 percent
from DM1.6713 at the period's start and I8V2 percent from its 1991 high.
The dollar's decline against the yen during November and December was more tempered than its
decline against the mark. Evidence was accumulat-
244
Federal Reserve Bulletin • April 1992
ing that the pace of expansion in Japan was clearly
decelerating. Japan's monetary growth was slowing, business confidence and investment intentions
were weakening, and flagging domestic demand
was being reflected in a widening of Japan's trade
surplus. Market participants had therefore come to
expect that the Japanese monetary authorities, who
had eased official interest rates the previous July,
would continue moving to a somewhat more accommodative monetary policy stance so that U.S.Japanese interest differentials would remain relatively stable. Indeed, official Japanese interest rates
declined during these two months. The Bank of
Japan trimmed its official discount rate once in
mid-November and again at the end of December.
At the same time, persistent weakness in Japan's
equity market and political uncertainty caused by
recent scandals also weighed on the yen at a time
when the dollar was declining generally.
As a result, the dollar eased only moderately
against the yen during November. Although the
pace of decline quickened during December, the
dollar rebounded at the end of the year to close
December at ¥124.80, down on balance 43A percent
from ¥130.75 at the beginning of the period.
JANUARY
By early January, the dissolution of the Soviet
Union was introducing a new level of uncertainty,
especially regarding the outlook for Europe. Although recurring rumors about the Soviet Union's
financial condition had been a concern during the
earlier months, market participants were now faced
with the prospects of greater disarray stemming
from changing political structures and moves to
liberalize prices in January. Accordingly, the German mark was increasingly susceptible to selling
pressures whenever new financial or political difficulties in the former Soviet Union became evident.
Meanwhile, market participants' assessment of
the German mark and the German economy weakened considerably after the new year. Press commentary at that time increasingly focused on the
sustained slowdown in Germany's expansion. Not
only was the pace of domestic demand moderating
but export orders were also sagging under the
weight of slowing economies in other industrialized countries. Market participants did not believe
that this evidence would lead to any near-term
moderation of the Bundesbank's tight monetary
policies; indeed, the Bundesbank appeared still to
be concerned about wage inflation and credit demands. But the evidence did suggest that the scope
for further policy tightening was more limited and
the prospects for growth in the coming year more
clouded than previously perceived. Under these
circumstances, market participants began to question whether interest differentials so unfavorable to
the dollar would continue to widen.
Moreover, thefinancialmarkets appeared to react
positively to the Federal Reserve's policy move of
mid-December. The capital markets in the United
States had responded favorably, with long-term
interest rates easing and the stock market showing
sustained strength. Also, the move appeared to
have broken the pattern of market expectations
concerning U.S. interest rates. Market participants
were less certain that a weaker-than-expected U.S.
economic statistic would immediately trigger another monetary policy action, and they were more
likely than before to attribute weakness in the data
to temporary factors. Moreover, they became mindful once again of the possibility that some statistics
might show greater-than-expected strength.
The dollar's decline against the European currencies therefore lost momentum early in January.
Market participants were aware that the dollar had
been under virtually continuous selling pressure for
almost six months. Many investors as well as foreign exchange market operators had portfolios that
were heavily weighted in assets denominated in
European currencies. The developments of November and December had led to an even greater concentration in these portfolios of assets denominated
in German marks. Under the circumstances, there
was a perception of a large risk of loss if market
sentiment should switch in favor of the dollar and a
perception of a diminishing chance for gain if
sentiment should remain negative to the dollar.
For a short while, however, the focus of market
attention was the Japanese yen, a currency against
which the dollar continued to decline in early January. Talk had already begun to circulate before the
turn of the year that the United States and Japan
would agree on some official action to support yen
appreciation. Commentary about President Bush's
trip to Japan to meet with Prime Minister
Miyazawa suggested that the deteriorating condi-
Treasury and Federal Reserve Foreign Exchange Operations
tion of the U.S. economy would prompt the President to seek ways to reduce the U.S. trade deficit.
There was also speculation the Japanese government was looking for ways to counter weakness in
Japan's stock market. In this context an upward
move in the yen's exchange rate was thought to be
acceptable to both governments.
In response to these expectations, the dollar received only a temporary boost from the year-end
cut in the Bank of Japan's discount rate. During the
first five business days of January, the dollar resumed its downward trend against the yen, declining IV2 percent to a low of ¥122.80 on January 7,
the day that President Bush arrived in Tokyo. At
this level, the dollar was down 6 percent from the
start of the period and 13 V2 percent from its 1991
high.
Thereafter, expectations of official action to support the Japanese yen gradually faded. Market participants became less convinced during President
Bush's stay in Japan that the two countries would
take immediate steps to strengthen the yen against
the dollar. In keeping with these diminished expectations, the President and the Prime Minister agreed
"that recent exchange rate movements were consistent with current economic developments."
Nontheless, market participants continued to focus
on the possibility that a more generalized Group of
Seven (G-7) policy toward the yen might be con-
1.
Federal Reserve reciprocal currency arrangements
Millions of dollars
Institution
Amount of
facility,
January 31, 1992
250
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
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
1,000
600
1,250
30,100
245
sidered at an upcoming G-7 meeting on January 25.
This possibility seemed credible to market participants because the yen had lagged behind rising
European currencies during previous months and
because this gap appeared to be generating economic and political concerns in several countries
other than the United States. But in time, even this
proposition lost standing in the marketplace.
When the G-7 meeting occurred in New York,
the finance ministers and central bank governors
issued a communique in which they agreed to
intensify their cooperative efforts to strengthen
world economic growth. With reference to exchange markets, the G-7 "agreed to continue to
monitor market developments and reaffirmed their
commitment to cooperate closely in exchange markets, thus contributing to favorable conditions for
stable exchange markets and economic recovery."
Market participants, however, were somewhat disappointed by the absence of any specific mention
of the yen exchange rate.
As expectations of a yen appreciation subsided,
market participants began to worry that there was
an overhang of short-dollar positions against the
yen as well as against the European currencies.
Concerns about the technical position of the market
came to the surface when the dollar did not fall off
sharply on news that President Bush had become ill
and had had to leave a state dinner during his
Tokyo trip. The dollar's unusual lack of sensitivity
to potentially disturbing news about an American
president's health was interpreted as indicating how
unwilling market professionals were to extend their
short-dollar positions further and how great the
risks were that the dollar might rise abruptly if a
general effort to cover some of these short-dollar
positions were to develop.
Under these circumstances, the dollar drifted
higher and staged an uneven recovery during most
of January. In some instances, particular events
triggered dollar buying: the announcement in January of a stronger-than-expected report for U.S. employment, testimony by Chairman Greenspan that
further dampened expectations of an early easing
of Federal Reserve monetary policy, and rumors
out of the former Soviet Union of violence and
political upheaval. In other instances, however, the
dollar's rise was precipitated by the bidding of
market professionals and their customers that reflected pent-up demand from previous months.
246
2.
Federal Reserve Bulletin • April 1992
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
Amount of
facility
Outstanding as
of October 31,
1991
November
December
143.0 2
January
Outstanding as
of January 31,
1992
143.0
143.0
1. Data are on a value-date basis. Components may not add to totals
because of rounding.
2. Represents a bilateral credit facility with the National Bank of Panama
that was established on January 28.
These pressures were particularly intense around
midmonth. The dollar rose sharply to trade at levels
that had not been expected just weeks before and
that therefore threatened to unleash yet further
rounds of bidding as market participants continued
to cover their short positions. Under these circumstances, the U.S. monetary authorities entered the
market on January 17, in an operation coordinated
with the Japanese monetary authorities, selling
$50 million against yen. The intervention sale was
shared equally by the Federal Reserve and the
Treasury's Exchange Stabilization Fund (ESF).
After this operation, the dollar declined sharply.
Although subsequently finding support, it remained
below the highs of DM1.6355 and ¥129.37 reached
on January 15. The dollar closed the period at
DM1.6125 and ¥125.75, down on balance over
the three months nearly 4 percent against the two
currencies. At these levels, the dollar was about
12 percent below its 1991 highs against both the
mark and the yen.
In other operations, a total of $1,301 million in
off-market spot and forward foreign currency sales,
executed by the U.S. monetary authorities with
foreign monetary authorities, settled during the
period.
The ESF continued to purchase special drawing
rights (SDRs) against marks in transactions by
agreement with the International Monetary Fund
(IMF). During the period, a total of $341.7 million
equivalent of such SDR purchases settled, of which
$41 million equivalent was transacted in the previous report period. The ESF also purchased a total
of $443.4 million against sales of SDRs in transactions by agreement with foreign monetary authorities needing SDRs to pay IMF charges or for
repurchases. An additional $50.6 million, which
was transacted in October, settled in the period.
The Treasury agreed to participate in a special
financial facility for the first time since March
1991. On January 28, the Treasury, through the
ESF, established a $143 million bilateral credit
facility to assist Panama in repaying its arrears to
international creditors. Panama drew the full
amount on January 31. The facility is scheduled to
expire on March 20,1992.
During the November-January period, the Federal Reserve and the ESF realized profits of
$75 million and $3.9 million respectively from the
sales of foreign currencies. As of the end of January, cumulative bookkeeping or valuation gains
• The two remaining forward purchases of
$551.1 million and $549.9 million against marks
settled on November 27 and December 27 respectively completing the $5,548.5 million of spot and
forward dollar purchases from the Bundesbank. As
previously reported, the operation was initiated in
June 1991 to adjust the foreign currency reserves
of the Federal Reserve and the ESF. For each
transaction, 60 percent was executed for the account of the Federal Reserve and 40 percent for the
ESF account.
• On November 22, the Federal Reserve agreed
to purchase $200 million against German marks
from a foreign monetary authority.
3.
Net profits or losses ( - )
on U.S. Treasury and Federal Reserve
foreign exchange operations1
Millions of dollars
Period and item
Valuation profits and losses on
outstanding assets and liabilities
as of October 31, 1991
November 1,1991-January 31,1992
Realized
Valuation profits and losses
on outstanding assets
and liabilities as of
January 31, 1992
1. Data are on a value-date basis.
Federal
Reserve
U.S. Treasury
Exchange
Stabilization
Fund
2,764.8
1,132.6
75.0
3.9
3,615.2
1,941.6
Treasury and Federal Reserve Foreign Exchange Operations
on outstanding foreign currency balances were
$3,615.2 million for the Federal Reserve and
$1,941.6 million for the ESF. 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 that have a high
degree of quality and liquidity. A portion of the
247
balances is invested in securities issued by foreign
governments. As of the end of January, Federal
Reserve holdings in these securities amounted to
$8,938.8 million equivalent, and the Treasury holdings amount to $9,203.5 million equivalent, valued
at end-of-period exchange rates.
•
248
Industrial Production and Capacity Utilization
of its 1987 annual average, total industrial production in January was about even with its year-ago
level. Total industrial capacity utilization dropped
0.8 percentage point in January, to 78.0 percent.
When analyzed by market group, the data show
that the production of consumer goods fell 0.7 percent in January, mainly because of the drop in
motor vehicle production. The output of consumer
Released for publication February 14
The index of industrial production dropped 0.9 percent in January, after having fallen 0.4 percent in
December. The decline in January was broadly
based, although the most significant loss occurred
in the motor vehicles and parts industry, where
output declined about 8 percent. At 106.7 percent
Industrial production indexes
Twelve-month percent change
1987
1988
1989
1990
1991
Twelve-month percent change
1987
1992
1988
1989
1990
1991
1992
Capacity and industrial production
Ratio scale, 1987 production = 100
— Total industry
Capacity
Ratio scale, 1987 production = 100
— 140
-———
— Manufacturing
Capacity
.
*
— 140
120
^
^
- V
Production
"
100
- 80
120
^
"
• v / — P r o d u c t i o n
1
1
1
1
— 80
1
Percent of capacity
Percent of capacity
Total industry
Manufacturing
90
Utilization
_ .
90
Utilization
—^
80
-
70
1982
1984
1986
1988
1990
1992
1980
1
1982
1
1
1
1984
All series are seasonally adjusted. Latest series, January. Capacity is an index of potential industrial production.
80
70
1
1980
100
1
1986
1
1
1988
1
1
1990
1
1
1992
249
Industrial production and capacity utilization
Industrial production, index, 1987 = 100'
Percentage change
Category
1992
1991
1991
Oct.'
Nov.'
Dec.P
Jan.P
Total
108.4
108.1
107.6
106.7
Previous estimate
108.2
108.0
107.8
Major market groups
Products, total
Consumer goods . . .
Business equipment
Construction supplies
Materials
109.0
109.7
122.3
95.4
107.4
109.0
110.0
121.7
95.8
106.6
108.8
109.7
121.7
95.6
105.8
Major industry groups
Manufacturing
Durable
Nondurable
Mining
Utilities
109.0
108.2
110.1
100.7
109.4
108.6
107.7
109.7
99.3
108.5
107.2
110.1
97.8
108.1
111.0
Nov.'
Oct.'
.0
1992 2
2
Dec.f
Jan.p
-.9
-.4
-.2
-.2
107.8
108.9
120.3
95.3
104.9
.1
.3
.1
-1.2
-.1
.0
.3
-.5
.5
-.8
-.2
-.2
-.1
-.2
-.7
-.9
-.7
-1.1
-.3
-.9
-.0
3.1
-1.0
-2.5
-.1
107.5
105.8
109.6
97.6
107.7
.1
-.2
.4
-.7
-.3
-.4
-.4
.4
-1.4
1.5
.1
-.5
.4
-1.6
-2.6
-1.0
-1.3
-.5
-.2
-.4
.4
-1.3
2.5
-4.1
.0
MEMO
1991
Low,
1982
.0
-J
-.1
Capacity utilization, percent
Average,
1967-90
Jan. 1991
to
Jan. 1992
1992
High,
1988-89
Jan.
Oct.'
Nov.'
Dec.'
Jan.p
Capacity,
percentage
change,
Jan. 1991
to
Jan. 1992
Total
82.1
71.8
85.0
80.0
79.8
793
78.8
78.0
2.6
Manufacturing
Advanced processing
Primary processing .
Mining
Utilities
81.4
81.0
82.3
87.4
86.7
70.0
71.4
66.8
80.6
76.2
85.1
83.6
89.0
87.2
92.3
78.9
78.2
80.6
89.5
84.1
78.7
77.6
81.4
87.9
84.8
78.2
77.2
80.8
86.6
85.9
78.0
76.9
80.5
85.2
83.6
77.0
75.9
79.7
85.0
83.2
2.8
3.2
2.1
.9
1.1
1. Seasonally adjusted.
2. Change from preceding month to month indicated.
goods other than automotive products also edged
down in January. The production of business equipment other than motor vehicles again drifted down
in January because of further weakness in industrial equipment. Continued retrenchments by manufacturers of defense and space equipment and by
oil and gas well drillers also contributed to the
overall decrease in equipment production. The production of construction supplies declined a bit in
each of the past two months; materials output
dropped sharply in January for the third consecutive month. Although the production of energy
materials flattened out in January after having
fallen rapidly in November and December, the
output of both durable and nondurable materials
fell more than 1 percent last month. Although the
declines were widespread, the reductions in output
of parts and supplies for the motor vehicle industry
and in paper were the most noticeable.
r Revised,
p Preliminary.
When analyzed by industry group, the data show
that manufacturing production fell 1.0 percent in
January, after having declined V2 percent over the
last two months of 1991. The factory operating rate
dropped to 77.0 percent in January, its lowest level
since August 1983. The slack in utilization is especially evident in advanced-processing industries,
where the operating rate in January fell to 75.9 percent, 5 percentage points below its 1967-91 average and about 1 percentage point below its low in
March 1991. In recent months, the decline in advanced processing has mainly resulted from cutbacks in motor vehicle production, where the operating rate in January was still 4 percentage points
above its level in March 1991. Unlike motor vehicle production, the output of instruments, electrical
and nonelectrical machinery, and aerospace and
miscellaneous transportation equipment never recovered significantly last spring and summer, and
250
Federal Reserve Bulletin • April 1992
their operating rates in January were below their
levels of last March. The utilization rate for primary processing declined for a third consecutive
month in January; paper, industrial chemicals, and
stone, clay and glass products have been the largest
contributors to this recent decline. Nonetheless, in
contrast to the utilization rate for advanced process-
ing, the rate for primary-processing industries in
January was only 2VI percentage points below its
long-run average and was still above its level of
last March.
Mining output decreased 0.2 percent in January,
despite a 2VI percent increase in coal mining. Utilities output fell 0.4 percent.
251
Statements to the Congress
Statement by David W. Mullins, Jr., Vice Chairman, Board of Governors of the Federal Reserve
System, before the Subcommittee on Oversight
of the Committee on Ways and Means, U.S.
House of Representatives, February 3, 1992
Thank you for this opportunity to present the
Federal Reserve Board's views on reforms to the
regulation of the government securities market.
Since September, when I last testified before this
Committee, staff of the Federal Reserve, the
Treasury Department, and the Securities and
Exchange Commission (SEC) have conducted an
exhaustive examination of this market, the results of which were released two weeks ago. My
prepared remarks will touch upon some of the
main conclusions of this report from the particular perspective of the Board of Governors of the
Federal Reserve System. Our perspective differs
somewhat from the perspectives of the other
agencies contributing to the report because of
differences in legislative mandates. The Board of
Governors has little direct regulatory authority
for the U.S. government securities market.
Although the Board has general oversight responsibility for all Federal Reserve District
Banks, it is the District Banks that act as fiscal
agents of the Treasury, thus sharing operating
responsibility for the market with the Treasury.
The SEC's charge is to enforce the securities laws
that seek to foster a high degree of fairness in the
marketplace. With neither the direct responsibilities of funding the government nor substantial
regulatory oversight, the Board of Governors can
view this market from a somewhat different vantage point—a policy perspective that allows it to
examine these issues in an economywide context.
When we look to the government securities
market, we see a market that works as well as
any on earth. U.S. government debt is an ideal
trading vehicle because it is all closely substitutable and has none of the default risk or idiosyncratic problems of private issues. As a result,
market participants, in the aggregate, willingly
commit substantial amounts of risk capital and
exchange a large volume of securities each day.
Positions are large, yet trading skills are so
sharply refined that bid-ask spreads are razor
thin, a small fraction of the size of spreads in
major equity markets.
The government securities market generates
widespread macroeconomic benefits. It efficiently absorbs the large quantity of new issues
required to finance the deficit. With real-time
quotes on a range of instruments, this market
serves as the foundation for private market rates
and a haven for ready liquidity. Further, this
deep and liquid market gives the Federal Reserve
a powerful, reliable mechanism for implementing
monetary policy.
Nonetheless, the admission of wrongdoing by
Salomon Brothers, episodes of price distortions,
and other evidence uncovered in our joint study
all suggest that this market has faults. It can be
improved. The proposals contained in the joint
report, along with other reforms announced earlier, constitute a careful, comprehensive modernization of the mechanisms and practices in the
government securities market. In our view, implementing these proposals represents a formidable, though feasible, task.
Over the longer term, the most effective force
in enhancing market efficiency and reducing the
potential for manipulative abuses is the force of
competition. And the effect of these proposals is
to open up the government securities market to
broad-based participation. Automating Treasury
auctions; facilitating direct bidding by customers, including nonprimary dealers; implementing
a single-price open-auction technique; and reducing the barriers to primary dealer membership—
all will serve, in time, to broaden participation in
the primary market and in the secondary market
for newly issued securities. More depth and
breadth in this end of the market should increase
efficiency, reduce Treasury financing costs, and
252
Federal Reserve Bulletin • April 1992
lessen the potential for manipulative trading
abuses. In addition, the competitive force of
broader participation will be reinforced by proposals targeted at manipulative abuse: tighter enforcement of auction rules and enhanced market
surveillance by the Federal Reserve Bank of New
York to identify potential manipulative episodes
that could trigger SEC investigation and Treasury
supply management to reopen offerings.
Taken together, these actions should serve to
deter manipulative practices and allow quick
detection of abuses should they occur. Moreover, they are relatively low-cost, market-based
responses that should achieve these benefits
without impairing the efficiency and liquidity of
this vital market.
Of course, many other alternatives could be considered to combat the potential for abuses in this
market. However, the government securities market is too important a national resource and works
too well to be put at risk by regulatory change for
the sake of change. From the Board of Governors'
perspective, a compelling case must be established
that the benefits outweigh the costs.
In our view, such a compelling cost-benefit analysis has not been made with respect to proposals to
establish a broad-based apparatus of reporting requirements or audit trails in this market. Although
increased reporting would deter manipulation and
facilitate the investigation of abuses, such systems
would impose substantial potential costs on this
market. The reporting burden would fall on all
traders—the good and the bad—boosting the cost of
every trade. While the direct costs of additional
recordkeeping might be kept manageable, an indirect cost looms larger. Rather than risk divulging
their finances and trading strategies, participants
might withdraw from this market, thereby raising
the cost of Treasury finance. And, of course, the
stakes are high: A tiny increase in Treasury rates
aggregates into a very substantial increase in cost to
U.S. taxpayers.
Because it might be difficult to resist implementing, even backup authority risks sending a
chilling message about the U.S. market to all
participants choosing a trading arena in the
global marketplace. Moreover, in view of the
extensive nature of the other changes proposed
in this report, one might question the capacity of
this market to absorb, at an acceptable cost, this
additional change—the imposition of broadbased reporting requirements for this market.
The agencies agree that large position reporting
requirements should not be implemented at this
time. Rather than risk slipping into this fundamental change through backup authority, the
Board of Governors feels it would be a wiser
course of action to return to the Congress in the
future should such authority appear necessary.
The interagency report provides an alternative
to burdensome regulation—a low-cost, marketbased solution to the problem that targets manipulative behavior without impairing the liquidity
of this important market. This overall strategy
has three basic elements: improved auction
mechanisms, enhanced market surveillance, and
active supply management.
Although many aspects of the Salomon Brothers admission of wrongdoing and the results of
the subsequent investigation cause concern, one
is particularly unsettling: Because of the falsification of bids at auctions, the Treasury was the
direct counterparty in attempts to manipulate the
market. Immediate steps were taken to reduce
the risk of a reoccurrence, including tightening
the enforcement of auction rules and implementing measures to encourage more direct bidding.
Looking forward, automation of the auction process, already under way and expected to be
completed by year-end, should efficiently snare
any infraction of the rules.
More important still, automation will facilitate
consideration of alternative auction techniques.
At a minimum, switching to single-price awards
from the current multiple-price format should
foster greater participation and likely reduce
gaming behavior at the auction. But more can be
done. Linking bidders directly by a computer
network and conducting the auction in real time
will expose any would-be manipulator to public
scrutiny in time for the competition to react.
With the element of surprise gone, the potential
return to manipulation should disappear. Thus,
the auction of the near future may well be played
in the open, on a level field, with sharply defined
and easily policed foul lines.
The report also finds that the benefits of enhanced monitoring extend to when-issued and
secondary market trading. Manipulative behavior leaves its footprints in market quotes because
Statements
to the Congress
253
a shortage of an issue will be evidenced by a yield
below that of similar securities and by depressed
financing rates. The agencies agreed that the
Federal Reserve Bank of New York, with its
substantial experience as the operating arm of
the Federal Open Market Committee and (along
with the other Reserve Banks) as one of the fiscal
agents of the Treasury, should have primary
responsibility for market surveillance; the Bank,
in turn, will provide information to the Treasury,
the SEC, and the Board of Governors. The view
of the Board of Governors is that rigorous monitoring of the behavior of market rates will expose manipulative behavior without the need to
gather the positions of large traders routinely.
Indeed, automation and enhanced market monitoring also present the opportunity to correct a
longstanding market misimpression. Although the
Federal Reserve Bank of New York has no statutory authority to regulate the primary dealers,
many people view the primary dealer system as
evidence of some measure of oversight of those
firms by the Federal Reserve Bank of New York.
Ongoing automation and enhanced monitoring
capabilities will let the Bank move to a more open
set of trading relationships, thus disabusing market participants of the notion that the primary
dealers have a special status. To further that end,
the Bank will eliminate its dealer surveillance
unit, showing unambiguously that responsibility
rests with the primary regulator. The Bank will
also lower the impediments to primary-dealer
membership, thereby encouraging a broadening of
membership in the primary-dealer system.
The careful monitoring of the market will be
made more credible by action: Persistent and
large-scale price anomalies consistent with a manipulative squeeze will call forth two sets of policy
responses. First, if other evidence (including discussions with market participants) suggests manipulation, then the SEC will begin an investigation to determine if any security laws have been
broken. Second, and more immediately, the Trea-
sury will act in the market to narrow those price
anomalies, thereby limiting the extent of the market disruption in general and reducing the potential gain if manipulative behavior was the root
cause. The Treasury's actions will be effected by
eitiier holding a new auction of the sought-after
security—a reopening—or through the sale of
those securities into the market by the Trading
Desk of the Federal Reserve Bank of New York
on behalf of the Treasury—a tap issuance. The
resulting expansion of supply should slash the
manipulator's potential gain, making it unlikely
that any one would even try to manipulate the
market. Circumstance and experience over time
will dictate when an increase in supply will be
required and which means of augmenting the issue
will be taken.
It is the judgment of the Board of Governors
that the reforms that I have outlined—changes in
auction mechanisms, active and rigorous monitoring of market rates, and the clear willingness
to use relative supplies to punish manipulative
behavior—will work to prevent a replay of last
year's events. These reforms are fundamental
changes in market mechanisms that promise to
open this market to broad-based participation
while, at the same time, enhancing regulatory
surveillance and remedial capabilities. These responses are measured, targeted, and commensurate to the problem at hand and in our view
obviate the need to punish many with reporting
burdens because of the actions of a few. This
strategy also offers flexibility to deal with future
problems as they arise. It is perhaps ironic that
the most serious abuses in the history of this
market—the Salomon Brothers episode—have
served as the catalyst for changes that promise
substantial long-term benefits. Taken together,
these proposals and those already implemented
constitute a thorough, thoughtful, and feasible
renovation of the government securities market
and will result in a healthier, more efficient
market for U.S. government securities.
•
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 4, 1992
I am pleased to appear here today. As you know,
the Federal Reserve will submit its semiannual
report on monetary policy to the Congress later
this month. That report will cover in detail the
254
Federal Reserve Bulletin • April 1992
System's policy targets for 1992, as well as our
expectations for growth and inflation. Today, I
would like to focus on some of the broad considerations bearing on our economic prospects.
The recent performance of the economy
clearly has been disappointing, and it is apparent
that some strong forces have been working
against a typical cyclical revival in economic
activity. Indeed, in many respects, these underlying forces, which were obscured for a time by
the gyrations associated with the crisis in the
Persian Gulf, have been impeding growth since
well before the economy tilted into recession in
the fall of 1990.
During the 1980s, large stocks of physical
assets were amassed in several sectors, largely
financed by huge increases in indebtedness. The
buildup of debt was originally largely collateralized or matched by rising asset values, but because of the weakening of property values, the
debts have become more troubling. The endeavor to redress these debt imbalances has led
many businesses and households to divert cash
flows to debt repayment rather than investment
and consumption, thereby depressing aggregate
economic demand.
In the business sector, the most obvious example is that of commercial real estate, with the
accumulation of vast amounts of office and other
commercial space—space beyond the plausible
needs in most locales well into the future. Our
financial intermediaries, not just depository institutions but other lenders as well, lavished credit
upon developers, and they are paying the price
today in the form of loan losses and impaired
capital positions, with adverse effects on their
willingness to extend credit. This process has
also damaged the asset positions, creditworthiness, and possibly the willingness to borrow of
many developers, entrepreneurs, and other businesses. Another characteristic of the 1980s was
the wave of mergers and buyouts—purchases of
corporate assets, often involving the substitution
of debt for equity and anticipating the sale of
assets at higher prices.
In the household sector, purchases of motor
vehicles and other consumer durables ran for
several years at remarkably high levels and were
often paid for with installment or other debt that
carried longer maturities than had been normal.
In some parts of the United States, the household
spending boom reached to the purchase of
homes, not simply for essential shelter, but as
speculative investments—and often involving
borrowing that constituted a heavy call on current and expected family incomes.
Most analysts, of course, were aware of the
increasingly disturbing trends of rising household
debt and elevated corporate leverage. However,
they did not think that these burdens had reached
a magnitude that would restrain the U.S. economy from a moderate cyclical recovery in 1991.
Indeed, output began to move up last spring and,
as inventory liquidation abated at midyear,
closed the gap with the consumption of goods
and services in much the same manner evident in
the early stages of recoveries in other recent
business cycles.
By late summer, however, with half the decline in output during the recession recovered, it
became clear that the cumulative upward momentum that had characterized previous recoveries was spent. The continued strong propensity
of households to pare debt and businesses to
reduce leverage was a signal that the balance
sheet restraints, a concern of many for a long
time, had indeed taken hold.
Consumer spending on motor vehicles and
other items softened, while household and business sentiment, which had rebounded in a normal
fashion as the cyclical recovery began last
spring, fell back in the autumn as the recovery
stalled. Inventories backed up in the wholesale
and retail trade sectors, particularly of goods
ordered earlier from abroad in anticipation of
climbing sales. The inventory bulge, in turn,
contributed to the drop in imports of late and to
the persistent slackness in industrial production
in the United States. Moreover, although export
activity has remained a bright spot for us, recessions and slower-than-expected economic
growth in several major industrial countries over
the second half of 1991 limited the growth of
demand from abroad for our goods. All told,
U.S. industrial output changed little between
July and December.
Against a backdrop of sluggish activity, receding inflationary pressures, and weakness in the
monetary aggregates, the Federal Reserve eased
monetary policy over the last several months of
Statements
1991—at times aggressively. As we indicated in
our press release accompanying the cut in the
discount rate to 3l/i percent in December, we
expect that the amount of monetary ease in the
pipeline is adequate to turn the economy onto the
path of sustained recovery.1 But, assessing the
economic outlook at the present time is extraordinarily difficult. We are, of course, continuing to
evaluate whether some additional insurance in
the way of further monetary ease would be
appropriate.
Not unexpectedly, lower interest rates are
reducing debt service burdens and are encouraging companies and households to hasten the
repair of stretched balance sheets. Offerings of
new corporate equity shares in our capital markets have risen to record levels, and large bond
issues are funding short-term liabilities and highercost long-term debt. Households are not only
repaying debt but are initiating heavy mortgage
refinancings that are reducing their debt service
burdens as well.
We thus have already made considerable progress in the balance sheet adjustment process, and
this unusual restraint on economic activity
should begin to dissipate, it is hoped, in the
reasonably near future. But resumption of a
sustainable, healthy recovery also depends,
among other things, on a restoration of consumer
and business confidence.
On the surface, the extraordinary apprehension on the part of consumers and businesses
does not seem to square with the broad macroeconomic circumstances. To be sure, our recent
economic performance is disappointing when
measured against the norms of previous recoveries—or even against the forecasts made last
summer. And such gains as have occurred since
last spring have not reached all sectors of the
economy or all regions of the nation. But, it does
not appear that we are tumbling into another
significant contraction in overall activity.
This situation suggests that the highly aggregated macroeconomic data may not be capturing
the full story. For example, although consumers
as a group are clearly benefiting from the recent
1. See Federal Reserve Bulletin, vol. 78 (February 1992),
p. 125.
to the Congress
255
developments in financial markets, some individuals—many of them retirees—are suffering because their interest income has shrunk. And on
the employment front, the unexpectedly sharp
slowing in labor force growth over the past few
years suggests that individuals' assessments of
job availability may be much more negative than
is implied by many of the traditional labor market
indicators. In addition, the string of job cuts
announced by many large corporations undoubtedly has heightened concern about job security—
both now and in the future.
More fundamentally, I suspect that what troubles consumers, and indeed everyone, is that the
current pause in activity may be underscoring a
sense of retardation in the growth of living standards over the long run. So long as the recovery
remained convincingly on track, these latent
concerns did not surface. But as the recovery
failed to meet expectations, earlier worries about
our long-run economic prospects and whether
the current generation will live as well as previous ones reemerged.
The record of the past decade provides ample
reason for concern. Although we saw some improvement in productivity trends—at least relative to the experience of the late 1970s—our
performance left much to be desired, a fact
reflected in our loss of international competitiveness in several industries and in the disappointing
real incomes of too many American families.
Especially disturbing was the failure of many
young persons to acquire the education and skills
needed to keep pace with the demands of our
rapidly changing economy—and the prospect
that they will fall even further behind in the
1990s.
The attainment of rising living standards in the
future will hinge crucially on our ability to elevate productivity growth. To be sure, economists
have not had great success in forecasting, or
even explaining after the fact, the shifts in productivity in years past. It is thus conceivable that
the payoff from the restructuring efforts of American business will turn out to be considerably
larger than we now expect. But we cannot count
on such an outcome. The surest way to ensure a
better productivity trend is to take actions that
will increase domestic investment; it is here that
our major policy focus must rest.
256
Federal Reserve Bulletin • April 1992
I, and others, have long argued before this
committee that bolstering the supply of saving
available to support productive private investment must be a priority for fiscal policy. In that
regard, reducing the call of the federal government on the nation's pool of saving is essential.
Above all, I urge you to adhere to a budgetary
strategy for fiscal year 1993 and beyond that is
geared to the longer-run needs of the U.S. economy. At a minimum, maintaining a commitment
to the elimination of the structural budget deficit
over the coming years will help enormously to
alleviate the concerns of the American people
about our economic future.
•
Statement by David W. Mullins, Jr., Vice Chairman, Board of Governors of the Federal Reserve
System, before the Subcommittee on Domestic
Monetary Policy of the Committee on Banking
Finance and Urban Affairs, U.S. House of Representatives, February 6, 1992
tive that allows it to examine these issues in an
economy wide context.
When we look to the government securities
market, we see a market that works as well as
any on earth. U.S. government debt is an ideal
trading vehicle because it is all closely substitutable and has none of the default risk or idiosyncratic problems of private issues. As a result,
market participants, in the aggregate, willingly
commit substantial amounts of risk capital and
exchange a large volume of securities each day.
Positions are large, yet trading skills are so
sharply refined that bid-ask spreads are razor
thin, a small fraction of the size of spreads in
major equity markets.
The government securities market generates
widespread macroeconomic benefits. It efficiently absorbs the large quantity of new issues
required to finance the deficit. With real-time
quotes on a range of instruments, this market
serves as the foundation for private market rates
and a haven for ready liquidity. Further, this
deep and liquid market gives the Federal Reserve
a powerful, reliable mechanism for implementing
monetary policy.
Nonetheless, the admission of wrongdoing by
Salomon Brothers, episodes of price distortions,
and other evidence uncovered in our joint study
all suggest that this market has faults. It can be
improved. The proposals contained in the joint
report, along with other reforms announced earlier, constitute a careful, comprehensive modernization of the mechanisms and practices in the
government securities market. In our view, implementing these proposals represents a formidable, though feasible, task.
Over the longer term, the most effective force
in enhancing market efficiency and reducing the
potential for manipulative abuses is the force of
competition. And the effect of these proposals is
Thank you for this opportunity to present the
Federal Reserve Board's views on reforms to the
regulation of the government securities market.
Just two weeks ago, staff of the Federal Reserve,
the Treasury Department, and the Securities and
Exchange Commission (SEC) released results of
their exhaustive examination of this market. My
prepared remarks will touch upon some of the
main conclusions of this report from the particular perspective of the Board of Governors of the
Federal Reserve System. Our perspective differs
somewhat from the perspectives of the other
agencies contributing to the report because of
differences in legislative mandates. The Board of
Governors has little direct regulatory authority
for the U.S. government securities market.
Although the Board has general oversight responsibility for all Federal Reserve District
Banks, it is the District Banks that act as fiscal
agents of the Treasury, thus sharing operating
responsibility for the market with the Treasury.
In addition, it is the District Banks that routinely
examine the financial institutions for which the
Federal Reserve System has primary oversight
responsibility, virtually all of which hold, and
some of which actively trade, government securities. The SEC's charge is to enforce the securities laws that seek to foster a high degree of
fairness in the marketplace. With neither the
direct responsibilities of funding the government
nor substantial regulatory oversight, the Board of
Governors can view this market from a somewhat different vantage point—a policy perspec-
Statements
to open up the government securities market to
broad-based participation. Automating Treasury
auctions; facilitating direct bidding by customers, including nonprimary dealers; implementing
a single-price, open auction technique; and reducing the barriers to primary dealer membership—all will serve, in time, to broaden participation in the primary market and in the
secondary market for newly issued securities.
More depth and breadth in this end of the market
should increase efficiency, reduce Treasury financing costs, and lessen the potential for manipulative trading abuses. In addition, the competitive force of broader participation will be
reinforced by proposals targeted at manipulative
abuse: tighter enforcement of auction rules and
enhanced market surveillance by the Federal
Reserve Bank of New York to identify potential
manipulative episodes that could trigger SEC
investigation and Treasury supply management
to reopen offerings.
Taken together, these actions should serve to
deter manipulative practices and quickly detect
abuses should they occur. Moreover, they are
relatively low-cost, market-based responses that
should achieve these benefits without impairing
the efficiency and liquidity of this vital market.
Of course, many other alternatives could be
considered to combat the potential for abuses in
this market. However, the government securities
market is too important a national resource and
works too well to be put at risk by regulatory
change for the sake of change. From the Board of
Governors' perspective, a compelling case must
be established that the benefits outweigh the
costs.
In our view, such a compelling cost-benefit
analysis has not been made with respect to
proposals to establish a broad-based apparatus of
reporting requirements in this market, either
directly or through audit trails or transparency
requirements. Although increased reporting
would deter manipulation and facilitate the investigation of abuses, such systems would impose
substantial potential costs on this market. The
reporting burden would fall on all traders—the
good and the bad—boosting the cost of every
trade. Although the direct costs of additional
recordkeeping might be kept manageable, an
indirect cost looms larger. Rather than risk di-
to the Congress
257
vulging their finances and trading strategies, participants might withdraw from this market,
thereby raising the cost of Treasury finance.
And, of course, the stakes are high. A tiny
increase in Treasury rates aggregates into a very
substantial increase in cost to U.S. taxpayers.
Because it might be difficult to resist implementing, even backup authority risks sending a
chilling message about the U.S. market to all
participants choosing a trading arena in the
global marketplace. Moreover, in view of the
extensive nature of the other changes proposed
in this report, one might question the capacity of
this market to absorb, at an acceptable cost, this
additional change—the imposition of broadbased reporting requirements for this market.
The agencies agree that large position reporting
requirements should not be implemented at this
time. Rather than risk slipping into this fundamental change through backup authority, the
Board of Governors feels it would be a wiser
course of action to return to the Congress for
enabling legislation in the future should such
authority appear necessary.
This committee's important mandate is to ensure that a legislative framework that provides
for the adequate supervision of the government
securities activities of banks is in place. In the
Board's opinion, the current supervisory structure secures a full measure of prudential oversight of the activities of commercial banks and
bank-related dealers in government securities.
The Federal Reserve System's share of responsibility for that supervision and oversight has
three components.
First, under the Government Securities Act of
1986 (GSA), government securities brokers and
dealers that are financial institutions are subject
to oversight by their primary federal supervisory
agency. In this capacity, the Federal Reserve's
watch extends to state member banks of the
Federal Reserve System, foreign banks, state
branches and agencies of foreign banks, and
commercial lending companies owned or controlled by foreign banks. As a part of their annual
examinations, Federal Reserve examiners review dealer compliance with all aspects of GSAmandated rules adopted by the Treasury Department. Specifically included are rules designed for
protection of investor securities and funds, re-
258
Federal Reserve Bulletin • April 1992
cordkeeping, registration of associated persons,
and rules governing custodial holdings of government securities—the latter of which are applicable to all depository institutions.
Second, the Federal Reserve examines the
trading and investment practices of nonbank
subsidiaries of bank holding companies that deal
in or underwrite securities—including government securities—to ensure that they are being
prudently managed and do not pose an undue
risk to bank affiliates. These subsidiaries are
registered with the SEC and are examined by a
self-regulatory organization (SRO), such as the
National Association of Securities Dealers, for
compliance with all rules applicable to brokerdealers. Federal Reserve inspection procedures
are designed to prevent, to the extent possible,
duplication of the procedures of the various
SROs. For the so-called "section 20 subsidiaries," which have been authorized to underwrite
and deal in bank-ineligible securities, the Federal
Reserve also examines for compliance with its
"firewall" provisions, which importantly insulate affiliated depositories and the federal safety
net from the risks inherent in the securities business. Moreover, section 20 inspections check
compliance with the Board's revenue test, verifying that section 20 subsidiaries do not become
principally engaged in the distribution of securities in violation of the Glass-Steagall Act. Moreover, all inspections of nonbank subsidiaries include an evaluation of their financial impact, if
any, on the parent bank holding company.
Third, the Federal Reserve supervises state
member banks' investment activities, which in
virtually all instances include investments in
government securities. Despite the diminished
concerns about credit quality afforded by a
portfolio of government securities, examiners
still must scrutinize those holdings. For example, a portfolio's liquidity and interest rate risk
must be evaluated to determine whether the
investments are consistent with the institution's
financial position and management's expertise.
Indeed, only last month the Federal Reserve
and other depository institution regulatory
agencies issued a revised supervisory policy
statement that describes securities trading practices that are inappropriate to be conducted in
an investment portfolio.
Returning to the broader issue of the health of
the government securities market, it is the Board
of Governors'judgment that the reforms outlined
in the interagency report—changes in auction
mechanisms, active and rigorous monitoring of
market rates, and the clear willingness to use
relative supplies to punish manipulative behavior—will work to prevent .a replay of last year's
events. These reforms are fundamental changes
in market mechanisms that promise to open up
this market to broad-based participation while, at
the same time, enhancing regulatory surveillance
and remedial capabilities. These responses are
measured, targeted, and commensurate to the
problem at hand and, in our view, obviate the
need to punish many with reporting burdens
because of the actions of a few. This strategy also
offers flexibility to deal with future problems as
they arise. It is perhaps ironic that the most
serious abuses in the history of this market—the
Salomon Brothers episode—have served as the
catalyst for changes that promise substantial
long-term benefits. Taken together, these proposals and those already implemented constitute
a thorough, thoughtful, and feasible renovation
of the government securities market and will
result in a healthier, more efficient market for
U.S. government securities.
•
Statement by E. Gerald Corrigan, President,
Federal Reserve Bank of New York, before the
Subcommittee on Domestic Monetary Policy of
the Committee on Banking, Finance and Urban
Affairs, U.S. House of Representatives, February 6, 1992
before you this morning to share with you my
observations on the Joint Report on the Government Securities Market, with particular emphasis
on those aspects of the report that relate directly
to the activities or responsibilities of the Federal
Reserve Bank of New York.
Let me say at the outset that I strongly support
the overall thrust of the joint report. Taken as a
I am pleased to have this opportunity to appear
Statements
whole, the changes and legislative recommendations outlined in the report represent a comprehensive yet well-balanced approach to the problems that surfaced in the government securities
market last year. Let me quickly add that the
changes are at or near the outer threshold of what
I believe the market can reasonably absorb in the
near term without running undue risks to market
efficiency, Treasury debt management practices,
or the flexibility of Federal Reserve open market
operations.
With those general observations in mind, let
me turn to the specific aspects of the report that
relate directly to the responsibilities of the Federal Reserve Bank of New York. There are three
such major areas: first, the changes in the Bank's
administration of relationships with primary
dealers; second, the Bank's role in the development, testing, and implementation of new automated systems for Treasury auctions and Federal
Reserve open market operations; and third, the
Bank's expanded role with regard to day-to-day
surveillance of the government securities market. The statement concludes with a brief status
report from the Federal Reserve's standpoint on
the Salomon Brothers situation, as requested by
the committee.
ADMINISTRATION
OF RELATIONSHIPS
PRIMARY
DEALERS
WITH
Attached to this statement is a paper issued late
last month by the Federal Reserve Bank of New
York outlining revised procedures for the administration of the Bank's relationships with primary
dealers.1 Although that document itself represents a careful balancing of many considerations
and viewpoints, it is based on the following key
and interrelated considerations:
First, although change was needed, the complete dismantling of the primary-dealer system—
including the responsibility of dealers to make
markets for Federal Reserve open market operations and to participate meaningfully in Trea-
1. The attachment to this statement is available on request
from Publications Services, Board of Governors of the Federal Reserve System, Washington, DC 20551.
to the Congress
259
sury auctions—would not have been a prudent
step.
Second, it was important to provide for a more
"open" system of primary dealers, in part because the existing approach has been viewed as
conferring on dealer firms special status that
carries with it elements of "franchise" value,
and in part because of fairness and equity considerations. This provision has been accomplished by the elimination of the so-called 1 percent market share requirement and the use of
straightforward and objective capital standards
for eligibility as a primary dealer. Taken together, these changes will substantially increase
the potential number of firms that can become
primary dealers.
Third, it was important that the Federal Reserve Bank of New York make absolutely clear
to the marketplace that the Bank does not regulate the primary-dealer firms, in part because of
"moral hazard" considerations and in part because of legal and regulatory realities. For this
reason we are disbanding the Bank's dealer
surveillance unit.
Fourth, for obvious reasons, it was necessary
to clarify the reasons and the conditions under
which the Federal Reserve Bank of New York
would alter its relationship with a primary-dealer
firm. Under the new administrative procedures,
the three independent sets of circumstances under which that might occur, are the following:
• A dealer firm's status will be altered if the
firm fails to meet its responsibilities to make
reasonable markets for Federal Reserve open
market operations or if it fails to participate
meaningfully in Treasury auctions or if it fails to
meet its responsibilities to provide the Federal
Reserve with meaningful market intelligence
over time. To the extent that a firm's dealer
status is altered for any or all of the above
reasons, that action by the Federal Reserve will
reflect considerations relating to the business
relationship alone and will carry no implication
about the creditworthiness, financial strength, or
managerial competence of the firm.
• A dealer firm's status will be altered if its
capital falls below the relevant capital standards
and it does not, in the eyes of its primary federal
regulator, have a credible plan to restore such
capital in a reasonable period of time.
260
Federal Reserve Bulletin • April 1992
• A dealer firm's status will be altered if the
firm is convicted of a felony under U.S. law or
pleads guilty or nolo contendere to a felony
under U.S. law for activities directly or indirectly
related to its business relationship with the Federal Reserve. This provision should create powerful incentives for a firm—when faced with
wrongdoing by individual employees—to take
immediate and strong actions to root out the
source of the problem to minimize the risk to that
firm.
Although major elements of the changes in the
administration of the relationships with primary
dealers will begin to take place immediately, the
full benefits of these changes will occur only as
the automation of Treasury auctions and Federal
Reserve open market operations take place and
as the other changes contemplated by the Joint
Report take hold. Over time, however, the automation efforts may prove particularly important.
These initiatives are described below.
AUTOMATION EFFORTS OF THE FEDERAL
RESERVE BANK OF NEW YORK
The design work for the automation of the competitive bidding portion of Treasury auctions
based on existing auction techniques has been
under way for some time and should be completed late this year. The software for the automation of the auctions is not particularly difficult
to develop. The difficult aspects of this task
relate more to its communications system—particularly as the number and nature of prospective
direct participants in the auctions change. But
what makes this automation effort especially
difficult is the need to build into the computer
systems and the communications systems a very
high level of operation integrity as well as multiple levels of backup for various contingencies.
If the Treasury were to decide to move to a
different auction technique, the strategy would
be to enhance the system now being developed to
accommodate both types of auctions. Although
important elements of the work being done for
the current auction procedures can be used with
a new auction technique, the enhancement of the
system being developed to accommodate the
new procedures will take some time after the
requirements have been defined. This enhancement will not, however, delay the planned implementation of automated procedures for the current auction by the end of this year.
The committee might gain a more useful insight into exactly how the automated Treasury
auction system will work in practice if the major
characteristics of the system are thought of, at
the risk of a great oversimplification, in the
following terms:
First, each institution that is "eligible" to
submit competitive bids in Treasury auctions
would have a terminal-based telecommunications link to the Federal Reserve Bank of New
York, either directly or through another Federal
Reserve Bank. The basic "hardware" used for
this purpose will be the FedLine terminal that is
currently used in more than 9,000 depository
institutions nationwide. The communications
network will be the proven and highly reliable
Fedwire telecommunications system. Finally,
the new auction system will utilize the same
security and encryption devices that are currently used for Fedwire operations.
Second, for each such "eligible" bidder, certain data—including any affiliations with other
"eligible" bidders—would have to be housed in
our database, as would acceptable methods for
making payment for securities and for receiving
delivery of securities awarded in the auctions.
Because payment and delivery must be made in
electronic form, nonbanks would have to have
suitable "auto-charge" agreements in place with
banks for this purpose.
Third, after electronic announcements of notices of auctions, bidders would be able to submit
bids electronically until the auction cutoff time,
which currently is 1:00 p.m. Eastern time. To
provide adequate backup for contingencies, however, the system must be designed so that all bids
can be routed to both the Federal Reserve Bank
of New York's main data processing center in
lower Manhattan and its remote backup processing center.
Fourth, the computers would then sort through
the bids on the basis of the highest prices (lowest
yields) received, in much the same fashion as in
today's manual procedures. As a part of this
process, several internal audit and control procedures are planned to ensure compliance with
Statements
Treasury auction rules and to "flag" outlier bids,
including those resulting from clerical errors in
message preparation.
Fifth, once the proper audits have been performed, the information has been sent to the
Treasury, and the "awards" have been made,
the payment for and delivery of the securities
must be initiated and completed. This process
will be carried out through the Federal Reserve's
money and securities transfer systems (Fedwire).
Finally, and in the normal course, after the
initial delivery and payment for the securities in
question is completed, end-of-day verifications
and reconcilements must be made as a part of the
overall controls on operating systems that often
handle more than $1 trillion of transaction per
day.
The full automation of Federal Reserve open
market operations is even a more complex and
time-consuming task, especially because it is
impossible to prejudge with any precision the
number, location, and other characteristics of
potential counterparties for such operations.
Moreover, the operating systems and communications systems associated with this effort must
be integrated with several other highly complex
automated systems, including the Federal Reserve's existing money and securities transfer
systems. Because of this complexity, an extraordinarily high level of reliability and integrity will
be needed. To illustrate the concerns I have in
mind, just imagine for a moment what might have
occurred on the morning of October 20, 1987, if
the Federal Reserve had been unable—because
of technical problems with such a system—to
furnish substantial liquidity through open market
operations as a part of the effort to stabilize
financial markets in the wake of the stock market
crash.
THE ROLE OF THE FEDERAL
RESERVE
BANK OF NEW YORK IN THE MARKET
SURVEILLANCE
PROCESS
Little needs to be added to what is contained in
the joint report as it pertains to the expanded role
of the Federal Reserve Bank of New York—in
cooperation with the other agencies—with regard
to day-to-day surveillance of the government
to the Congress
261
securities market except to emphasize that (1)
market surveillance is quite distinct from dealer
surveillance, which we are discontinuing and (2)
it will take some time to put in place the new or
altered statistical reporting arrangements that
might be agreed upon by the interagency surveillance working group over the period immediately
ahead.
As a first step, the Federal Reserve Bank of
New York expects to have the initial redeployment of key personnel necessary for this effort in
place later this month. Final decisions about the
number and mix of personnel needed for this
effort will have to await agreement among the
agencies about the precise scope and nature of
the statistical reporting and other aspects of the
market surveillance effort, which should be essentially completed in a month or two.
THE SALOMON
BROTHERS
SITUATION
Because the official investigation into the Salomon Brothers wrongdoings is still under way,
very little can be said at this time regarding the
particulars of that situation. The firm, in response to inquiries by the Federal Reserve Bank
of New York, has provided the Bank with several reports over the period of September
through December 1991. In general, these reports cover (1) the sweeping changes in management and management structure that were put in
place after the disclosures made by the firm last
August, (2) the major changes in internal control
procedures and compliance systems that have
been put in place over the period in question, (3)
various estimates of the profits associated with
the auctions in which irregularities have been
acknowledged by the firm, and (4) further details
regarding the firm's financing activities in certain
of the Treasury issues. All relevant materials
have been made available to the Securities and
Exchange Commission (SEC) and the U.S. Attorney.
It is contemplated that any decision by the
Federal Reserve Bank of New York regarding
the status of Salomon Brothers as a primary
dealer will be made in the context of the findings
reached by the SEC as a result of its ongoing
investigation of the matter. This approach, which
262
Federal Reserve Bulletin • April 1992
has the support of the other agencies, is being
followed in deference to fairness and due process
considerations and to minimize uncertainties that
might follow from multiple and uncoordinated
announcements of this nature. The timing of the
Salomon Brothers episode is such that certain
sanctions by the Federal Reserve Bank of New
York might apply even if thefirmis not convicted
of, or if it pleads guilty or nolo contendere to, a
felony under U.S. law.
•
Statement by Edward C. Ettin, Deputy Director,
Division of Research and Statistics, Board of
Governors of the Federal Reserve System, before the Subcommittee on Treasury, Postal Service, and General Government of the Committee
on Appropriations, U.S. Senate, February 24,
1992
Ware's testimony of last fall, which I understand
you already have.
I am pleased to have this opportunity to appear
before this subcommittee on behalf of the Federal Reserve Board and to discuss issues related
to bank mergers in the United States. However,
I am not in a position to discuss issues or to
answer questions directly related to the proposed
BankAmerica-Security Pacific merger—which I
understand is the subject of these hearings—
because that merger is under "consideration by
the staff, preparatory to presentation to the
Board of Governors.
As you know, the U.S. banking system is in
the midst of a major restructuring in response to
a variety of forces in the marketplace and the
continuing removal of legal barriers to entry by
the individual states. A substantial volume of
bank mergers has been a natural response to the
changing banking environment. The Board is
very aware of this evolution but is equally aware
of its statutory responsibility to manage events
so as to preserve competition and ensure a safe
and sound banking system for the benefit of
consumers, businesses, and taxpayers.
My testimony will discuss recent structural
changes in the banking system, the Federal Reserve's continuing efforts to ensure that competition is maintained, and some of the potential
benefits that may be expected from the restructuring of the banking industry that is currently
under way. In my brief remarks today, I will not
address specifically two other areas of Board
concern—bank safety and soundness and Community Reinvestment Act issues. Both of these
areas were covered, however, in Governor La-
RECENT STRUCTURAL
IN BANKING
CHANGES
The restructuring of the banking industry accelerated in the past decade. There were 188 mergers of healthy banks involving about $9 billion in
acquired assets in 1980,710 such mergers involving $131 billion in acquired assets in 1987, and an
estimated 550 mergers of healthy banks with $60
billion in acquired assets in 1989.
Such an increase in merger activity did not
come about spontaneously. It was instead a
natural response to the removal of many longstanding legal restrictions on entry that had, until
recently, balkanized the banking industry, not
only between states but within states as well. As
recently as 1985, only eighteen states allowed
statewide branching, but by early 1992 only four
states prohibited statewide banking. In 1985,
only nine states permitted interstate banking, but
by early 1992, only two states prohibited banking
operations by out-of-state banks.
As the banking industry has responded to the
changing environment, mergers have not been the
only source of structural change. Indeed, the banking industry has been characterized by a great deal
of entry and exit that is indicative of a very healthy,
active competitive environment. For example,
while there were approximately 5,000 acquisitions
of healthy banks during the 1980s, about 2,700 new
banks were formed, 16,000 new bank branches were
opened, 6,600 branches were closed, and about
1,100 banks failed.
After a decade of remarkable changes in the
banking industry, and with a major restructuring
of the industry under way, almost no change has
occurred in the concentration in local banking
markets, the battlefield on which competition is
Statements
measured and analyzed. The fact that concentration in both urban and rural banking markets has
remained largely unchanged during the past decade is an indication of the continuing intensely
competitive structure of the banking industry.
This structure reflects, in part, the efforts of the
regulators to ensure a competitive banking environment. That concentration has not increased,
especially in urban markets, is even more notable
because in many of these markets banking concentration could increase considerably without
raising any questions about competition under
the antitrust laws or the merger guidelines of the
Justice Department.
THE FEDERAL RESERVE'S
ENSURE
COMPETITION
EFFORTS TO
In view of the apparent success of the regulators
in ensuring a competitive banking environment, I
would like to discuss briefly what the Federal
Reserve does to carry out its responsibilities for
evaluating the competitive effects of mergers.
Each and every bank merger or acquisition
subject to the Board's jurisdiction—that is, those
mergers involving member banks and all acquisitions by, and mergers of, bank holding companies—are reviewed for the possibility of anticompetitive effects. The review process begins at one
of the twelve Federal Reserve Banks. At this
stage, the appropriate geographic market for
analyzing the merger is determined. This determination may involve the collection of data on
commuting, shopping patterns, banking relationships, and so forth. If such data prove to be
insufficient, telephone surveys may be conducted
and, if necessary, on-site visits made by Federal
Reserve staff to conduct interviews.
Once the appropriate geographic area that encompasses the local banking market is determined, an initial screening analysis is conducted.
This analysis essentially involves calculating basic pre-merger and post-merger measures of market structure (market shares and the Herfindahl
index) to determine whether the proposed
merger would be acceptable under the merger
guidelines of the Justice Department. If these
guidelines are not breached, the application is
approved at the Reserve Bank and the process
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263
goes no further. However, structural measures
that exceed the merger guidelines are taken as an
indication that the merger may have anticompetitive effects, and Board review is required. The
reason I say that a merger that exceeds the
merger guidelines may have anticompetitive effects is that, although market structure is important, it is only one factor that may influence
competition in banking.
For cases submitted to Board review, other
factors are analyzed that would not need to be
examined if the basic commercial bank concentration ratios imply competitive structures. These
factors include the following: (1) the importance
of nonbank thrift institutions as commercial bank
rivals, especially with respect to their newer lending and checking powers; (2) the importance of
potential competition, both in terms of the likelihood of new entry into the market and the current
competitive effect from the threat of entry; (3) the
importance of other depository and nonbank financial institutions, such as credit unions and
finance companies, in the market; (4) the financial
health of the target firm; (5) the economic health
of the market (to determine whether exit from a
declining market is necessary marketplace adjustment); and (6) the competitive importance of the
target bank if the target has proved to be an
unusually weak competitor.
This brief overview of procedures for the competitive analysis of merger proposals at the Federal Reserve suggests the seriousness with which
the Federal Reserve takes its responsibility for
ensuring competition in banking.
The Federal Reserve's bank merger policy and
past actions discourage the filing of merger applications that would clearly be anticompetitive.
The self-screening of such cases means that the
vast majority of merger proposals submitted to
the Board do not raise any competitive issues.
Furthermore, in some of the relatively few cases
in which a merger application does raise competitive problems, the Federal Reserve will accept a
divestiture of the merged bank's offices in local
markets when competition may otherwise be
harmed. Such divestitures eliminate the anticompetitive aspects of the merger while allowing the
basic merger to proceed. Thus, the Board accepted divestiture proposals in thirty-five merger
cases from 1982 to 1991. The rationale for such a
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Federal Reserve Bulletin • April 1992
policy is to ensure that competition is maintained
in local markets while government interference
with the marketplace in our private-propertybased system is minimized. That is, if there are
no competitive or other public policy problems
arising from a merger, no reason exists to impede
decisions in the marketplace, whether or not
clear public benefits are evident. This issue of
public benefits brings me to the last point I would
like to discuss—the potential for public benefits
from bank mergers.
POTENTIAL PUBLIC
BENEFITS
Possible public benefits from a merger are considered under the "convenience and needs" test
and may be used to override some of the anticompetitive elements that may exist in a given
merger application. If, for example, a target bank
is expected to fail, the benefit to the community
of uninterrupted banking servicesvices, the continued operation of convenient offices, and possibly the maintenance of some employment may
provide the basis for approving the merger in
spite of some anticompetitive effects.
During the past few years, poor operating
performance and the increasingly competitive
environment have caused many banks, as well as
other firms, to focus a great deal of attention on
increasing their efficiency. Banks, like other
firms, must be efficient to be profitable; equally
important, they must be profitable to be healthy.
Researchers, bankers, and bank consultants
all agree that some banks are much more efficient than others and that opportunities exist to
increase the overall efficiency of the industry.
Many bankers believe that mergers provide an
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 25, 1992
I am pleased to present the Federal Reserve's
Monetary Policy Report to the Congress.1 The
important vehicle for achieving significant efficiency gains, particularly from merging large,
sophisticated back-office and computer operations and from closing redundant offices. Or
mergers may provide the environment necessary to justify the tough cost-cutting measures
that are required.
The historical evidence indicates that there
have been few efficiency gains from past mergers, but these studies have been based on mergers from an era in which banks were almost
surely less cost conscious. Today, bankers, like
other business managers, know that if they are to
remain competitive they must carefully manage
their costs. Thus, the future may hold a potential
for more cost savings than research has demonstrated to date. Moreover, the possibility of
efficiency gains may be greater in some cases
than in others. Thus, the Board carefully considers the potential for these gains on a case-by-case
basis. In the last analysis, however, regardless of
any anticipated efficiency gains, the Board is
sensitive to its statutory responsibility to maintain competitive banking markets.
Let me conclude by emphasizing that the
Board is aware of, and is monitoring, the
changes that are taking place in the financial
system. It continues to devote substantial efforts to the analysis of the competitive effects of
all proposed mergers and acquisitions. Although we at the Board have not yet seen
systematic evidence of efficiency gains from
mergers, the potential for substantial cost savings clearly exists. Thus, we continue to research this topic because of the possibility of
important public benefits in this area, not the
least of which is that a safe and sound banking
system is also a profitable one.
•
policy decisions discussed in the report were
made against the backdrop of a troubled economy. The recovery that seemed to be in train at
the time of our last report to the Congress
1. See "Monetary Policy Report to the Congress," Federal
Reserve Bulletin, vol. 78 (April 1992), pp. 223-41.
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stalled, job losses have mounted, and confidence remains low.
Looking forward, however, there are reasons
to believe that business activity will pick up.
Indeed, anecdotal reports and early data seem to
be indicating that spending is starting to firm in
some sectors. These signs should not be exaggerated; the prospective incipient recovery could
peter out, as indeed the much more vigorous
recovery of last spring petered out. Nonetheless
distinct financial indications of improvement are
apparent at this time. Several measures suggest
that the balance sheets of many households and
businesses have been strengthened, a development that should facilitate spending in the recovery. Similarly, banks and other lenders have
taken steps to bolster their capital positions so
that they will be able to supply the credit to
support additional spending. And, most recently,
broad measures of money have strengthened.
Moreover, there are clear signals that core inflation rates are falling, implying the prospect that
within the foreseeable future we will have attained the lowest rates of inflation in a generation, an encouraging indicator of future gains in
standards of living for the American people. Still,
the outlook remains particularly uncertain. This
means that we at the Federal Reserve have to be
particularly sensitive to signs that the anticipated
strengthening in business activity is not emerging
and be prepared to act should the need arise.
As background, I would like to discuss our
recent economic performance, reviewing in some
detail the causes of the disappointments we have
experienced and the important balance sheet
adjustments in process that promise eventually
to support a resumption of sustainable economic
growth.
MACROECONOMIC PERFORMANCE
MONETARY POLICY IN 1991
AND
After the contraction of economic activity in the
autumn of 1990 that resulted from the invasion of
Kuwait and the subsequent sharp rise in oil
prices, economic activity continued to decline in
the first quarter of 1991. In response to the
weakening of activity and anemic money growth,
to the Congress
265
the Federal Reserve eased policy substantially
over late 1990 and into early 1991.
By the spring, many signs pointed to economic
recovery. The quick and successful conclusion of
the Gulf war bolstered consumer confidence.
Growth of the money stock was strengthening.
Homebuilding had begun to stir, consumer
spending had turned up, and industrial production was advancing. The lower interest rates and
the retracing of the earlier jump in oil prices
appeared to be providing support for an expansion of aggregate demand. In these circumstances, the odds appeared to favor a continued
moderate recovery in jobs and employment during 1991.
Over the third quarter, however, evidence
began to surface that the recovery had not taken
hold. The impetus to consumer sentiment and
spending that was provided by the completion of
the Gulf war seemed to ebb, and consumer
outlays turned down again. Businesses, apparently caught by surprise by this development,
saw their inventories back up in the late summer
and fall. With demand slackening, businesses
engaged in another round of layoffs, and private
nonfarm payrolls declined over the second half of
1991 while the civilian unemployment rate rose
to 7.1 percent.
In addition, growth of the monetary aggregates
slowed unexpectedly during the third quarter.
Expansion of M2 virtually ceased, while M3
actually contracted—a nearly unprecedented occurrence. Judging from our surveys of banks,
other contacts in the financial industry, and anecdotal information from borrowers, the supply
of credit for many borrowers remained quite
tight, particularly for those firms without access
to open market sources of funds. Moreover,
private credit demands weakened further.
Against this background, and with signs that
inflationary pressures were diminishing, the Federal Reserve took several steps to ease policy
further in the second half of 1991. Through both
open market operations and reductions in the
discount rate, money market interest rates were
lowered nearly 2 percentage points between August and December.
These monetary policy actions, building on
those actions over the previous two and one-half
years, have resulted in a large cumulative reduc-
266
Federal Reserve Bulletin • April 1992
tion of interest rates. The federal funds rate has
declined nearly 6 percentage points from its
cyclical peak and the discount rate 3V2 percentage points. Other short-term interest rates have
fallen substantially as well. The prime rate also
has been reduced appreciably but by somewhat
less than market rates as commercial banks have
sought to bolster lending margins. In longer-term
markets, bond and mortgage yields have dropped
1 to 2 percentage points on balance from their
cyclical highs, with much of the decline coming
in the latter half of 1991. The decreases in
interest rates appear to have given stock prices a
boost as well, with most major indexes rising to
record levels early this year.
Despite substantial decreases in interest rates
in late 1990 and throughout 1991, however, M2
growth was only about 3 percent in 1991, the
same as the sluggish pace of expansion of
nominal gross domestic product (GDP). M3
rose only VA percent. Both aggregates ended
the year only modestly above the lower bounds
of their respective annual ranges. Growth of
domestic nonfinancial sector debt, at 43A percent, also was near the lower bound of its
monitoring range. Outside the federal sector,
debt increased less than 3 percent for the year
in reflection not only of depressed spending but
also of a deleveraging in the household and
business sectors and financial difficulties of
many state and local governments.
The behavior of the monetary aggregates in
1991 relative to other economic variables was
somewhat puzzling. Doubtless, part of the slow
money growth was related to the weakness in
borrowing and spending. But even after taking
account of weak spending, growth of money was
unusually slow. The velocity of M2 was about
unchanged over the year rather than falling as
would ordinarily be expected in circumstances of
sharp declines in short-term market interest
rates. It appears that certain interest rate relationships gave households incentives to limit
their money holdings. Commercial banks, restraining their own balance sheets in response to
weak loan demand and in an attempt to conserve
capital, lowered deposit interest rates appreciably, especially late in the year. On the other
hand, interest rates on consumer debt, particularly when adjusted for the lack of tax deductibil-
ity, remained relatively high. As a result, many
households apparently used deposit balances to
pay off or to avoid taking on consumer credit.
Also, the steep yield curve and the attractive
returns recorded by bond mutual funds, as well
as impressive gains in the stock market, apparently led many households to shift funds out of
deposits and into capital market instruments,
which are not included in the monetary aggregates.
Finally, £ brisk pace of activity by the Resolution Trust Corporation (RTC) appears to have
depressed the monetary aggregates, especially
M3. When the RTC takes savings and loan assets
onto its own balance sheet, they are financed
with Treasury securities rather than depository
liabilities. In effect, the RTC has taken on some
of the role of thrift institutions, but its liabilities
are not included in the monetary aggregates. In
addition, the disruption of banking relationships
as institutions are resolved, including the abrogation of some time deposit contracts, seems to
lead investors to reassess their portfolio allocation and, in some cases, to shift funds out of
deposits.
Thus, several factors reduced the public's demands for monetary balances in 1991. Some of
these factors tended to raise the velocity of
money so that to an extent slow growth of M2
was not reflected in income flows. But the pattern of money and credit growth over the past
half of the year appeared also to stem importantly from forces depressing spending and economic activity, which the Federal Reserve attempted to counter through easing money market
conditions.
BALANCE
SHEET
ADJUSTMENTS
Understanding these forces and the appropriate
role for monetary policy under the circumstances
requires stepping back several years. As I have
discussed with you previously, the 1980s saw
outsized accumulation of certain kinds of real
assets and even more rapid growth of debt and
leverage. To a degree, this buildup of balance
sheets was a natural and economically efficient
outcome of deregulation and financial innovation. It also may have reflected a lingering infla-
Statements
tion psychology from the 1970s—that is, people
may have expected a rapid increase in the general price level and especially in the prices of
specific real assets such as real estate properties
that would make debt-financed purchases profitable. But in retrospect, the growth of debt and
leverage was out of line with subsequent economic expansion and asset price appreciation.
Indeed, the burden of debt relative to income
mounted as asset values, especially for real property, declined or stagnated. In part, our current
economic adjustments can be seen as arising out
of a process in which debt is being realigned with
a more realistic outlook for incomes and asset
values.
Rapid rates of debt-financed asset accumulation were broad-based during the 1980s. For
example, households purchased cars and other
consumer goods at a brisk pace. Although household income was increasing swiftly in this period,
the growth of expenditures was faster. Household saving rates dropped from about 8 percent
at the beginning of the decade to a 4 to 5 percent
range by its end. This drop was reflected in part
in burgeoning consumer installment credit,
which expanded at an average annual rate of 15
percent between 1983 and 1986. In addition,
mortgage debt expanded at an 11 percent pace
between 1983 and 1989. Most of this increase was
against existing homes, representing borrowing
against rising values either in the process of
home turnover or as owners borrowed against
higher equity. Mortgage borrowing also financed
a substantial amount of buying of new homes,
which in some parts of the country at times
seemed to be motivated more by speculative
considerations than by fundamental needs.
The 1980s also witnessed a dramatic increase
in desired leverage of the business sector,
which fostered a wave of mergers and buyouts.
These transactions typically involved substantial retirements of equity financed through issuance of debt; equity retirements in the nonfinancial corporate sector exceeded new equity
issuance by a staggering $640 billion in the
1984-90 period. Such restructurings often were
based, at least in part, on a well-founded quest
for increased efficiency, and gains were
achieved by several firms. However, many of
these deals also were predicated on overly
to the Congress
267
optimistic assumptions about what the economy could deliver—that rapid economic growth
could continue without setback and that asset
prices would always rise.
A primary example of the accumulation of debt
and real assets occurred in commercial real estate markets. In the early 1980s, when space was
in unusually short supply, commercial real estate
received an additional push from the Economic
Recovery Tax Act, which provided an acceleration of depreciation allowances for capital goods.
Although an adjustment was appropriate and
overdue, that for commercial structures was excessive, resulting in tax lives that were far
shorter than economic fundamentals would dictate. This shift in incentives led to a surge in
debt-financed commercial construction during
the 1980s.
Financial institutions, of course, participated
in this process by lending heavily; indeed, their
aggressive lending behavior probably contributed to the speed of debt accumulation. During
the economic expansion, bank credit expanded
at an average annual rate of nearly 9 percent,
well in excess of the growth of nominal income.
Banks lent heavily against real estate collateral,
for corporate restructurings, and for consumer
credit, and, in addition, for more traditional
business purposes. Life insurance companies
also expanded their portfolios rapidly, with
growth in real estate loans especially prominent.
By the end of the 1980s, the inevitable correction was upon us. The economy was operating
close to capacity, so that growth had to slow to a
pace more in line with its long-run potential.
Inflation did not pick up much, contrary to what
some might have expected as capacity was approached. In the commercial real estate sector,
soaring vacancy rates and a change in tax law in
1986 brought the boom to an end, producing
sharp decreases in prices of office buildings in
particular.
Together, these developments resulted in declines in the value of assets and growing problems in servicing the associated debt out of
current income. Because of the runup in leverage
over previous years, these problems have been
more severe than might be expected just from the
slowing in income and spending. And the difficulties of both borrowers and lenders have fed
268
Federal Reserve Bulletin • April 1992
back on spending, exacerbating the economic
downturn during the Gulf crisis and inhibiting the
recovery.
Faced with mounting financial problems and
uncertainty about the future, people's natural
reaction is to withdraw from commitments when
possible and to conserve and even build savings
and capital. Both households and businesses, concerned about their economic prospects, over the
past two years or so have taken several measures
to reduce drains on their cash flow and to lower
their exposure to further surprises. Part of this
process has involved unusually conservative
spending patterns, and part has involved the early
stages of a restructuring of financial positions.
Businesses, for example, have strived to reduce fixed costs. To do this, they have cut back
staffing levels and closed plants. They have tried
to decrease production promptly to keep inventories in line. Firms also have taken steps to
lower their risk exposures by restructuring their
sources of funds to reduce leverage, enhance
liquidity, and cut down on interest obligations.
The response of households has been analogous. To increase their net worth, households
have taken steps to increase their savings by
restraining expenditures. To reduce interest expenses, they have paid down consumer debt, and
as long-term interest rates have declined, they
have refinanced mortgages and other debt at
lower interest rates.
Lenders too have drawn back. With capital
impaired by actual and prospective losses on
loans, especially on commercial real estate,
banks and other intermediaries have not only
adopted much more cautious lending standards
but also have attempted to hold down asset
growth and bolster capital. They have done so, in
part, by aggressively reducing what they pay for
funds by more than they have reduced what they
charge for credit. Like other businesses, they
have taken steps to pare expenses generally,
including reducing work forces and looking for
cost-saving consolidations with other institutions. To a considerable extent, this response has
been rational and positive for the long-term
health of our financial intermediaries. But in
many cases it seems to have gone too far, impelled to an extent by the reaction of supervisors
to the deteriorating situation.
The Federal Reserve has taken several measures to facilitate balance sheet restructuring and
adequate flows of credit. Together with other
supervisors, we have directed examiners to consider not only the current market value of collateral against performing loans but the overall
quality of the credits. We also have met on
numerous occasions with bankers as well as bank
examiners to clarify bank supervisory policies
and to emphasize the importance of banks continuing to lend and take reasonable risks.
Monetary policy also has, in part, been directed in recent quarters to supporting balance
sheet restructuring that is laying the groundwork
for renewed, sustained, economic expansion. We
recently reduced reserve requirements on transactions deposits. This reduction will free up
some funds for lending or investment and should
over time enhance the ability of banks and their
customers to build capital.
In addition, lower short-term interest rates
clearly have been helpful to debtors, but their
contribution to the restructuring process would
be relatively muted if long-term rates had not
also declined at the same time and stock prices
were not buoyant. Reductions in short-term rates
that were expected very soon to be reversed or
that were not seen as consistent with containing
inflation would contribute little to the strengthening of balance sheets fundamental to enhancing our long-term economic prospects.
In part, because we have seen declines in longas well as short-term rates and increases in
equity prices, progress has been made in balance
sheet restructuring, and it is hoped that more is in
train. As a result of lower interest rates, household debt service as a percentage of disposable
personal income has fallen in the past year from
about 19V2 to about 18V2 percent. Moreover,
further declines are in prospect as more refinancing occurs and as interest costs on floating-rate
debt, such as adjustable-rate mortgages, gradually reflect current interest rates.
In the business sector, similar patterns can be
observed. With corporate bond rates close to
their lowest levels in more than a decade, a large
number of firms in recent months have called,
retired, and replaced a considerable volume of
high-cost debt. A flood of issuance of longer-term
debt and equity shares has reduced dependence
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of firms on short-term obligations. Several of the
equity deals constituted so-called reverse
LBOs—the deleveraging of highly leveraged and
therefore rather risky firms. The ratio of corporate debt to equity in book value terms has only
begun to edge down, but the increase in equity,
together with the lower level of interest rates, has
enabled many corporations to make significant
headway in lowering interest expenses over the
past two years, and further decreases in corporate debt burdens are presumably in prospect.
Restraint on inventories and other spending has
contributed to this result by keeping outlays in
close alignment with internally generated funds.
And the strengthening of balance sheets is paying
off in terms of credit evaluations. Downgrades of
nonfinancial firms, though still greater than upgrades, are well below the levels of last winter
and spring, and upgrades have risen slightly.
The condition of our financial institutions also
is improving. In the banking sector, wider interest margins seemed to be boosting profits by the
end of last year. In addition, many institutions
have taken difficult but necessary measures to
control noninterest expenses. Reflecting an improved earnings outlook and a generally favorable equity market, the stock prices of large
banks have doubled on average from their 1990
lows, and the premium paid by many moneycenter banks on uninsured debentures has
dropped several percentage points. Increased
share prices have spurred several holding companies to sell substantial volumes of new equity
shares in the market, contributing to a significant
rise of capital ratios in the banking system,
despite still-large provisions for loan losses.
Measures of bank liquidity, such as the ratio of
securities to loans in bank portfolios, have risen
appreciably, signalling an improved ability of
banks to lend.
The balance sheet adjustments that are in
progress in the financial and nonfinancial sectors
alike are without parallel in the postwar period.
Partly for that reason, assessing how far the
process has come and how far it has to go is
extraordinarily difficult. As increasingly comfortable financial structures are built, however, the
restraint arising from this source eventually
should begin to diminish. In any case, the nature
and speed of balance sheet restructuring are
to the Congress
269
important elements that we will need to continue
to monitor on a day-by-day basis in assessing
whether further adjustments to the stance of
monetary policy are appropriate.
ECONOMIC EXPANSION
AND
MONEY AND CREDIT GROWTH IN 1992
Against this background of significant progress in
balance sheet strengthening as well as lower real
interest rates, the Board members and Reserve
Bank Presidents expect a moderate upturn in
economic activity during 1992, although in the
current context the outlook remains particularly
uncertain. According to the central tendency of
these views, real output should grow between PA
and 2Vi percent this year. The unemployment
rate is projected to begin declining, finishing the
year in the vicinity of 63/t to 7 percent.
An especially favorable aspect of the outlook
is that for inflation. The central tendency of the
Board members' and Reserve Bank Presidents'
forecast is that inflation, as measured by the
consumer price index (CPI), will be in the neighborhood of 3 to 3Vi percent over the four quarters
of 1992, compared with a 3 percent rise in 1991.
However, the CPI was held down last year by a
retracing of the sharp runup in oil prices that had
resulted from the Gulf crisis. Consequently, our
outlook anticipates a significant improvement in
the so-called core rate of inflation. With appropriate economic policies, the prospects are good
for further declines in 1993 and beyond even as
the economy expands.
To support these favorable outcomes for economic activity and inflation, the committee reaffirmed the ranges for M2, M3, and debt that it
had selected on a tentative basis last July—that
is, 21/2 to 6V2 percent for M2, 1 to 5 percent for
M3, and 4Vi to 8V2 percent for debt, measured on
a fourth-quarter-to-fourth-quarter basis. These
ranges are the same as those used for 1991. The
1992 ranges were chosen against the backdrop of
anomalous monetary behavior during the past
two years. Since 1989, M2 has posted widening
shortfalls from the levels that historical experience indicates would have been compatible with
actual nominal GDP and short-term market interest rates.
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Federal Reserve Bulletin • April 1992
The appropriate pace of M2 growth within its
range during 1992 thus will depend on the intensity with which forces other than nominal GDP
turn out to affect money demand. Depository
institutions are likely to continue reducing their
rates on retail deposits in lagged response to the
steep declines in money market yields before
year-end. Those deposit-rate reductions could be
significant, especially if banks are not seeking
retail deposits, given their continued caution in
extending credit and borrowers' continued preference for longer-term sources of credit to
strengthen balance sheets. With the effects of
lower deposit rates contributing to further shifts
of funds into longer-term mutual funds and into
debt repayment, and with the RTC remaining
active in resolving troubled thrift institutions, the
velocity of M2 could increase this year, independently of changes in market interest rates.
The ongoing restructuring of depository institutions, as in the past two years, is likely to
continue to have an even larger influence on M3
than on M2 growth. Assets previously on the
books of thrift institutions that are acquired by
the RTC will be financed by Treasury debt
rather than by the liabilities of thrift institutions. Managed liabilities in M3 should continue
to be more depressed by resolution activity
than retail certificates of deposit. The reaffirmed range for M3 growth thus remains lower
than that for M2.
Nonfinancial debt growth is likely to be a little
faster than last year's 43A percent increase. The
wider federal deficit in prospect for 1992 will
increase Treasury borrowing. Assuming that output and incomes are again expanding, balance
sheets are in somewhat better condition, and
credit conditions are no longer tightening, the
borrowing of households and businesses may
pick up a little, although their overall posture
probably will remain cautious.
Will these ranges for money and credit growth
prove to be appropriate? Obviously, we believe
that the answer is yes. But I should reemphasize
the sizable uncertainties that prevail. The ongoing process of balance sheet restructuring may
affect spending, as well as the relationship of
various measures of money and credit to spending, in ways we are not anticipating. In assessing
monetary growth in 1992, the Federal Reserve
will have to continue to be sensitive to evolving
velocity patterns.
CONCLUDING
COMMENTS
Our focus, quite naturally and appropriately, has
been on our immediate situation—the causes of
the recent slowdown and the prospects for returning to solid growth this year. However, as we
move forward, we cannot lose sight of the crucial
importance of the longer-run performance of the
economy. As I have noted before, much of the
difficulty and dissatisfaction with our economy
comes from a sense that it is not delivering the
kind of long-term improvement in living standards we have come to expect. The contribution
monetary policy can make to addressing this
deficiency is to provide a financial background
that fosters saving and investment and sound
balance sheet structures. Removing over time
the costs and uncertainties associated with ongoing inflation encourages productivity-enhancing
investment. Moreover, inflation tends to promote leverage and overaccumulation of real assets as a hedge against increases in price levels;
progress toward price stability provides a backdrop for borrowing and lending decisions that
lead to strong balance sheets, far less apt to
magnify economic disturbances.
A crucial aspect of our recent economic performance is the difficult situation of our financial
sector. Clearly, some of the weakness of the
economy over the past two years arose from the
restraint on the supply of credit—the so-called
credit crunch. Both depository institutions and
other financial intermediaries made some of the
same mistakes of judgment about the likely appreciation of asset prices as did borrowers. In
addition, however, the balance sheets of many
financial intermediaries themselves were not robust; many lacked adequate capital to continue
to lend to good credit risks in the face of losses
from their previous lending mistakes. Our emphasis on improving the capitalization of depository institutions over time, where we have already made substantial progress, should help
bolster their ability to lend both in good times and
bad. We could make further strides in strengthening our depository institutions through removal of
Statements
outmoded constraints on their behavior. By loosening strictures on the ability of these firms to
compete across arbitrary boundaries of product line
and geography, we would improve their profitability
and capital. Their strengthened position should augment their ability to lend and potentially could
reduce demands on the federal safety net.
Finally, we should consider carefully the effects of the extremely low rates of national
saving that we have experienced for a decade.
Certainly, low personal and corporate saving
rates have contributed to the deterioration in
balance sheets that has impaired our economic
performance in recent years. The large stocks of
to the Congress
271
federal debt that have been built up, too, likely
have adversely affected our economic prospects
by putting upward pressure on real interest rates
and thus stunting the growth of the capital stock,
on which our future incomes depend. In considering the various fiscal options that are before
you as members of the Congress, I urge you to
keep in mind their long-term implications for
national saving. Through a combination of fiscal
policies directed at reducing budget deficits and
boosting private saving and monetary policies
aimed at noninflationary growth, we can achieve
the strong economic performance that our fellow
citizens rightly expect.
•
Chairman Greenspan presented similar testimony before the Subcommittee on Domestic Monetary
Policy of the House Committee on Banking, Finance and Urban Affairs, February 19, 1992.
272
Announcements
REAPPOINTMENT OF ALAN GREENSPAN AS
CHAIRMAN OF THE BOARD OF GOVERNORS
AND AS A MEMBER OF THE BOARD
President Bush on July 10, 1991, announced his
intention to reappoint Alan Greenspan as Chairman of the Board of Governors and as a member
of the Board for a full fourteen-year term. Dr.
Greenspan's appointments were subsequently confirmed by the Senate on February 27, 1992, and he
took the oath of office on March 3, 1992. His full
term as a member of the Board began February 1,
1992, while his four-year term as Chairman began
March 2.
In making the announcement at a White House
press conference on July 10, 1991, President Bush
stated:
Just to top the day with a very important announcement, I want to say that it is my intention to send as soon
as possible to the Senate my intention to reappoint
Chairman Greenspan as Chairman of the Federal Reserve, and also nominating him to another term as a
Governor of the Federal Reserve.
I, of course, would encourage the Senate to move as
quickly as possible on this important nomination. The
respect that Alan Greenspan has around the world and in
this country, particularly in the financial marketplaces, is
unparalleled. And it gives me great pleasure to move
forward at this time, quite a bit in advance of the
expiration of the term, but nevertheless, I think, most
appropriately, to ask him to serve.
And, you know, it's not a one-way street. This is a
very complicated job. It is a time-consuming job. It's a
job of great pressure. And I'm extraordinarily grateful to
Chairman Greenspan for being willing to undertake another term as Chairman of the Fed. He has done an
outstanding job. Everyplace I go abroad, I get the same
reports and the same vote of confidence that I get here
from the central bankers abroad, from the finance ministers abroad, as well as from the heads of state and
government.
So this country is very fortunate to have the important
affairs of the Federal Reserve Bank in Alan Greenspan's
hands, and I am very grateful that he is willing to
continue in this most important job.
And so, Alan, my thanks to you, sir, for your service
to your country, and the mike is all yours.
Chairman Greenspan made the following comment at that time:
I thank you very much, Mr. President. It's certainly
been an honor to serve as Chairman of the Federal
Reserve under your presidency. And, hopefully, if the
Senate sees fit to find my credentials appropriate, I look
forward to another four years of what is really, for an
economist, the most interesting job that there is in
government.
Needless to say, the last four years have been rather
extraordinary, and I suspect that the next four years will
have as many surprises as the last four.
Again, let me thank you very much, Mr. President. It
has certainly been an honor to work with you.
(On August 9, 1991, President Bush announced
the recess appointment of Dr. Greenspan as Chairman, effective August 10. Dr. Greenspan's first
four-year appointment as Chairman expired on
August 10, 1991.)
REDUCTION IN RESERVE
REQUIREMENTS
ON TRANSACTION
ACCOUNTS
OF DEPOSITORY
INSTITUTIONS
The Federal Reserve Board announced on February 18, 1992, that it will reduce reserve requirements on transaction accounts of depository institutions effective in April.
The reduction from 12 percent to 10 percent
in the reserve ratio on net transaction accounts
will reduce funding costs for depositories and
strengthen their balance sheets. Over time, it is
expected that most of these cost savings will be
passed on to depositors and borrowers.
The Board noted that the reduction should
strengthen the financial condition of banks and
thereby improve their access to capital markets,
thus putting them in a better position to extend
credit.
The effective date in April is designed to provide
depository institutions time to adjust their reserve
273
management strategies by increasing use of their
required clearing balances, economizing on vault
cash, and generally providing more efficient management of their accounts.
This change is the first major one in the reserve
ratio on net transaction accounts since the Monetary Control Act was adopted by the Congress in
1980. That law made all depositories—not just
member commercial banks—subject to reserve
requirements. In an action announced in December
1990, the Board reduced from 3 percent to 0 the
reserve requirement on nonpersonal time deposits
and Eurocurrency liabilities.
Reserve requirements are held by depositories in
the form of deposits at Federal Reserve Banks and
vault cash. Had the lower reserve ratio been in
place in 1991, required reserves would have been
about $8 billion below the nearly $50 billion level
that prevailed last year. About %1Va billion of the
decline would have been in required reserve balances and less than $1 billion in applied vault cash.
In light of the increase in required reserves over
last year, the drop in required reserves and required
reserve balances will be somewhat larger when
today's action is implemented.
Today's action will be effective with the twoweek reserve maintenance period beginning on
April 2, 1992.
At the same time, on February 18, 1992, the
Board said that it will request public comment on
the following proposed changes in reserve requirement regulations:
1. A proposal to double the carryover allowance
for reserve balances to the larger of $50,000 or
4 percent of required reserves plus required clearing balances. This change will provide institutions
with more flexibility in managing reserves from
one maintenance period to another.
2. A proposal to shorten by two weeks the lag in
counting vault cash toward required reserves to
reduce the decline in required reserve balances
early in the year.
The Board also said that previous proposals to
prevent erosion of the reserve base for transaction
accounts remain under consideration. The proposals, issued for comment last April 12, would
classify certain sweep arrangements including certain commingled time deposits as transaction accounts and make other changes designed to prevent
avoidance of reserve requirements.
DISCONTINUANCE OF THE USE OF THE
SUPERVISORY DEFINITION
OF HIGHLY LEVERAGED TRANSACTIONS
The Federal Reserve Board has voted to discontinue use of the supervisory definition of highly
leveraged transactions (HLTs) after June 30, 1992.
The Board will also discontinue the reporting of
HLT exposure by banking organizations it regulates after the June 30, 1992, reporting date.
In the interim, the Board has approved revisions
to the supervisory definition of HLTs to be used by
banks and bank holding companies for reporting
their HLT exposure as of March 31, 1992, and
June 30, 1992.
Although the Board will phase out the use of the
formal supervisory definition of HLTs, guidance
previously issued by the Board for assessing individual credits that finance corporate restructurings
and for evaluating internal processes for initiating
and reviewing these credits will continue to be
used by examiners for this purpose.
Because of the complex nature and level of risk
associated with such HLT financings, boards of
directors and management at banking organizations
will be expected to continue to monitor carefully
their banking organization's risk exposure to these
credits.
Similar action to discontinue use of the HLT
definition and reporting has also been approved by
the Comptroller of the Currency and the Federal
Deposit Insurance Corporation.
CONSUMER AFFAIRS BROCHURES
ON MORTGAGE FINANCING AVAILABLE
Buying a new house? Refinancing your existing
home? One of the following pamphlets published
by the Federal Reserve may be of help to you:
• A Consumer's Guide to Mortgage
Refinancings
• A Consumer's Guide to Mortgage Settlement
Costs
• A Consumer's Guide to Mortgage Lock-Ins
• Consumer Handbook on Adjustable Rate
Mortgages
• Home Mortgages: Understanding the Process
and Your Right to Fair Lending
274
Federal Reserve Bulletin • April 1992
Copies of any or all of these pamphlets may be
obtained by writing or telephoning Publications
Services, Federal Reserve Board, mail stop 138,
Washington, DC 20551 (telephone 202-452-3245).
There is no charge for single copies of these
brochures.
PROPOSED ACTIONS
The Federal Reserve Board issued for public comment on February 13,1992, a proposal to revise the
Board's Regulations O (Loans to Executive Officers of Member Banks) and Y (Bank Holding
Companies) to conform the regulations to the
amendments of section 22(h) of the Federal Reserve Act (12 U.S.C. §375b) made by section 306
of the Federal Reserve Deposit Insurance Corporation Improvement Act of 1991. Comment was requested by March 20, 1992.
The Federal Reserve Board requested public
comment on February 19, 1992, on a proposal to
revise its capital adequacy guidelines for bank
holding companies and state member banks to provide explicit guidance on the types of intangible
assets that may be included in the tier 1 capital
calculation for risk-based and leverage capital purposes. Comments were due by March 27, 1992.
ERRATA
Federal Reserve Bulletin
Two textual errors have been identified in the January 1992 Bulletin article "Changes in Family
Finances from 1983 to 1989: Evidence from the
Survey of Consumer Finances." First, on page 4
the article states that real median family income
was virtually unchanged between 1983 and 1989
and that this fact was supported by data from the
Current Population Survey (CPS). The reference to
the CPS is in error. The CPS estimate of household
income increased about $2,900 over this period.
Nevertheless, the amount of increase in family
income estimated from the Survey of Consumer
Finances (SCF)—an increase of about $100—was
calculated correctly. The difference probably reflects a combination of sampling and definitional
variations in the two surveys. As the appendix to
the article indicates, the SCF definition of "family" differs from that used by the CPS. In particular, the SCF excludes household members who are
outside the main economic unit and who have
independent finances. As a result, differences between the SCF incomefiguresand those of the CPS
could occur. In addition, the SCF and the CPS have
very different sample designs. Estimates based on
these surveys may also differ because of sampling
error, which is present in all sample surveys.
Second, on page 2 the figures in table 1 on
income for families with heads having at least
some college education are correct. However, the
words "at least" should have been deleted from the
sentence on page 4, "The median income for families headed by persons with at least some college
experience rose, but this increase was offset by
declines in all other education categories." Family
income rose only for those with some college and
fell for all other education groups except the lowest
(those with eight or fewer years of education) for
whom income did not change significantly.
REVISIONS TO MONEY STOCK DATA
Measures of the money stock were revised in February of this year as a result of the annual benchmark and seasonal factor review. Data in tables
1.10 and 1.21 in the statistical appendix to the
Bulletin reflect these changes beginning with this
issue.
Data for the monetary aggregates were benchmarked using call reports through September 1991
and other sources. Seasonal factors for the monetary aggregates have been revised using the X-llARIMA procedure that has been employed for this
purpose since 1982. Following the method introduced last year, seasonal factors for deposit series,
beginning with January 1990, have been constructed with data aggregated across banks and
thrift institutions. Owing to changes in the deposit
reports (FR 2900) effective September 17, 1991,
the series for savings deposits and MMDAs have
been combined. Beginning with January 1990, seasonal factors have been constructed from this combined series. Up to December 1989, each of the
four series—savings deposits at banks, savings deposits at thrift institutions, money market deposit
accounts (MMDAs) at banks, and MMDAs at
Announcements
thrift institutions—continues to be seasonally adjusted individually. Through that date, the four
adjusted bank and thrift series are then summed to
yield the seasonally adjusted total savings deposits
and MMDAs.
More detail on the revisions is available in the
Board's H.6 statistical release, "Money Stock,
Liquid Assets, and Debt Measures," dated February 13, 1992. Complete historical data are available
1.
275
from the Money and Reserves Projections Section,
Division of Monetary Affairs, mail stop 72, Board
of Governors of the Federal Reserve System,
Washington, DC 20551. Revised monthly historical data for Ml, M2, M3, and total nonfinancial
debt also are available from the economic bulletin
board of the U.S. Department of Commerce. Call
202-377-1986 for information on subscriptions to
the Commerce bulletin board.
Monthly seasonal factors used to construct M l , M2, and M3, January 1991-March 1993
Year and month
Currency
Nonbank
travelers'
checks
Demand
deposits
Other checkable deposits1
Total
Held at banks
In M2
In M3 only
1.0205
.9714
.9753
1.0057
.9757
.9991
1.0056
.9952
.9928
.9999
1.0121
1.0469
1.0105
.9913
1.0309
.9906
.9980
.9950
.9930
.9942
.9881
.9972
1.0100
1.0197
.9994
1.0053
1.0334
.9866
.9933
.9877
.9884
.9920
.9855
.9954
1.0132
1.0003
1.0007
1.0034
1.0023
.9970
.9982
1.0003
1.0006
.9987
1.0003
1.0003
.9979
.9957
1.0021
1.0055
.9977
1.0043
1.0017
.9975
1.0052
1.0001
.9961
1.0031
1.0063
.9982
1.0048
1.0018
.9971
1.0052
.9995
.9931
.9982
.9956
1991—January
February
March
April
May
June
July
August
September
October
November
December
.9931
.9921
.9983
.9989
1.0029
1.0058
1.0060
1.0026
.9956
.9939
1.0101
.9493
.9608
.9625
.9545
.9699
1.0280
1.0943
1.1067
1.0616
1.0076
.9607
.9419
1992—January
February
March
April
May
June
July
August
September
October
November
December
.9943
.9924
.9970
.9993
1.0036
1.0040
1.0067
1.0022
.9940
.9951
1.0004
1.0089
.9519
.9621
.9630
.9545
.9689
1.0275
1.0927
1.1057
1.0614
1.0081
.9616
.9428
1.0209
.9714
.9755
1.0053
.9757
.9988
1.0053
.9954
.9928
.9994
1.0124
1.0471
1.0103
.9911
1.0013
1.0309
.9906
.9984
.9949
.9932
.9944
.9879
.9972
1.0099
1.0197
.9993
1.0054
1.0335
.9865
.9935
.9875
.9884
.9922
.9854
.9954
1.0131
.9949
.9923
.9967
.9530
.9625
.9632
1.0213
.9712
.9754
1.0101
.9909
1.0014
1.0197
.9992
1.0054
1993—January
February
March
1.0011
1. Seasonally adjusted other checkable deposits at thrift institutions are
derived as the difference between total other checkable deposits, seasonally
Nontransaction components
1.0011
1.0006
1.0035
1.0024
.9970
.9982
1.0003
1.0006
.9988
1.0005
1.0002
.9978
1.0000
1.0005
1.0035
1.0001
.9939
.9986
.9957
.9963
1.0039
1.0068
adjusted, and seasonally adjusted other checkable deposits at commercial
banks.
Additional tables on seasonal factors follow.
276
2.
Federal Reserve Bulletin • April 1992
Monthly seasonal factors for selected components of the monetary aggregates, January 1991-March 1993
Deposits 1
Year and month
Money market mutual funds
Savings
and
MMDAs
Small
denomination
time
Large
denomination
time
In M2
In M3 only
1991—January
February
March
April
May
June
July
August
September
October
November
December
.9952
.9947
1.0021
1.0035
.9996
1.0044
1.0048
1.0024
.9985
.9983
.9998
.9962
1.0028
1.0026
1.0006
.9992
.9972
.9966
.9998
.9993
.9993
1.0018
1.0008
1.0003
.9934
.9969
1.0014
.9967
1.0031
1.0034
.9991
1.0048
1.0042
1.0005
.9993
.9965
.9989
1.0136
1.0242
1.0175
.9925
.9874
.9876
.9954
.9965
.9947
.9976
.9933
1.0303
1.0453
1.0310
1.0066
1.0027
.9805
.9749
.9848
.9679
.9719
.9946
1.0064
1992—January
February
March
April
May
June
July
August
September
October
November
December
.9946
.9946
1.0023
1.0040
1.0047
1.0050
1.0026
.9986
.9983
.9995
.9958
1.0031
1.0025
1.0004
.9990
.9969
.9963
.9996
.9993
.9994
1.0019
1.0010
1.0006
.9930
.9968
1.0014
.9968
1.0038
1.0042
.9994
1.0051
1.0038
.9987
.9964
.9988
1.0139
1.0249
1.0178
.9923
.9877
.9874
.9952
.9967
.9952
.9969
.9927
1.0308
1.0461
1.0327
1.0087
1.0037
.9800
.9735
.9846
.9668
.9716
.9935
1.0064
.9942
.9946
1.0024
1.0031
1.0025
1.0005
.9929
.9970
1.0016
.9989
1.0141
1.0251
1.0306
1.0473
1.0341
1.0000
1993—January
February
March
1.0001
1. These seasonal factors are applied to deposits data at both commercial banks and thrift institutions.
3.
Weekly seasonal factors used to construct M l , M2, and M3, December 1991-April 5, 1993
Week ending
Currency
Nonbank
travelers'
checks
Demand
deposits
Other checkable deposits1
Nontransaction components
Total
Held at banks
In M2
In M3 only
1991—December 2
9
16
23
30
1.0037
1.0095
1.0080
1.0165
1.0092
.9402
.9399
.9412
.9425
.9438
1.0316
1.0331
1.0445
1.0420
1.0633
.9990
1.0218
1.0084
1.0063
1.0022
.9925
1.0165
1.0070
1.0137
1.0161
.9972
1.0008
.9999
.9955
.9948
1.0025
.9970
.9952
.9944
.9952
1992—January
6
13
20
27
1.0048
.9986
.9951
.9871
.9460
.9492
.9524
.9555
1.0863
1.0410
1.0089
.9807
1.0111
1.0432
1.0292
.9974
1.0014
1.0012
.9804
1.0487
1.0349
1.0192
.9946
.9824
.9988
.9986
.9984
3
10
17
24
.9877
.9962
.9945
.9897
.9587
.9603
.9619
.9635
.9877
.9829
.9760
.9542
.9849
1.0015
.9891
.9826
.9958
1.0075
.9979
.9912
1.0006
1.0004
1.0005
1.0035
1.0065
1.0008
1.0002
March
2
9
16
23
30
.9898
1.0010
.9982
.9968
.9949
.9651
.9644
.9634
.9624
.9614
.9623
.9795
.9773
.9627
.9753
.9911
1.0123
1.0006
.9942
.9954
.9945
1.0119
1.0051
.9997
1.0032
1.0012
1.0023
1.0038
1.0034
1.0045
1.0055
1.0052
1.0058
1.0067
1.0083
April
6
13
20
27
1.0031
1.0035
1.0006
.9950
.9596
.9567
.9537
.9508
1.0171
1.0211
1.0169
.9797
1.0336
1.0446
1.0498
1.0105
1.0319
1.0471
1.0560
1.0098
1.0074
1.0076
1.0010
.9973
1.0008
.9975
.9971
.9959
May
4
11
18
25
1.0001
.9496
.9587
.9678
.9768
.9849
.9757
.9854
.9550
1.0019
1.0023
.9884
.9818
1.0038
.9936
.9809
.9763
.9959
.9960
.9976
.9975
1.0023
1.0047
February
1.0057
1.0026
1.0024
1.0001
1.0000
1.0011
1.0060
Announcements
3.
277
Weekly seasonal factors used to construct M l , M2, and M3—continued
Week ending
Currency
Nonbank
travelers'
checks
Other checkable deposits1
Nontransaction components
Total
Held at banks
In M2
In M3 only
.9798
1.0127
1.0074
.9932
.9807
.9836
1.0052
.9995
.9854
.9869
.9978
.9993
.9991
.9971
.9974
1.0094
1.0037
1.0067
.9998
.9966
1
8
15
22
29
.9983
1.0077
1.0053
1.0038
1.0020
1.0187
1.0361
1.0534
.9843
1.0043
1.0134
.9873
.9824
July
6
13
20
27
1.0148
1.0113
1.0059
1.0004
1.0687
1.0815
1.0944
1.1072
1.0350
1.0205
1.0024
.9770
1.0099
1.0061
.9933
.9765
1.0040
.9978
.9850
.9710
.9980
1.0019
1.0007
.9997
.9963
.9914
.9946
.9999
August
3
10
17
24
31
1.0011
1.0083
1.0022
.9982
.9934
1.1201
1.1137
1.1074
1.1010
1.0947
.9995
1.0068
1.0033
.9813
.9819
.9953
1.0078
.9945
.9824
.9815
.9879
.9965
.9912
.9823
.9808
1.0010
1.0015
1.0010
1.0073
1.0059
1.0067
1.0052
1.0022
28
1.0017
.9976
.9932
.9886
1.0842
1.0705
1.0567
1.0430
1.0086
1.0143
.9802
.9679
1.0118
1.0090
.9916
.9718
1.0087
1.0059
.9881
.9739
5
12
19
26
.9953
.9982
.9943
.9910
1.0301
1.0191
1.0081
.9972
1.0160
.9948
1.0083
.9810
.9952
.9967
.9899
.9736
.9948
.9938
.9867
.9724
November 2
9
16
23
30
.9919
1.0028
.9989
1.0007
.9862
.9756
.9651
.9546
.9441
1.0012
1.0118
1.0183
.9985
1.0188
.9821
1.0055
.9983
.9930
.9921
.9799
1.0017
.9964
.9905
.9934
December 7
14
21
28
1.0072
1.0069
1.0120
1.0142
.9404
.9418
.9432
.9445
1.0352
1.0452
1.0480
1.0460
1.0179
1.0107
1.0104
1.0012
1.0157
1.0135
1.0125
1.0116
4
11
18
25
1.0047
1.0007
.9945
.9889
.9462
.9494
.9525
.9557
1.1008
1.0510
1.0218
.9810
1.0225
1.0290
1.0151
.9965
1
8
15
22
.9864
.9941
.9939
.9913
.9589
.9607
.9620
.9633
.9767
.9816
.9762
.9628
.9909
.9991
.9980
.9954
.9646
.9644
.9635
.9627
.9619
1.0006
.9596
June
September 7
14
21
October
1993—January
February
March
April
1
8
15
22
29
5
1.0000
1.0000
.9858
Demand
deposits
1.0011
.9996
.9997
1.0000
.9979
.9974
.9997
1.0014
1.0011
.9998
1.0001
1.0006
1.0014
1.0010
.9978
1.0000
1.0001
1.0005
1.0007
.9991
.9991
.9952
.9960
.9909
.9909
.9934
.9999
.9963
.9946
1.0033
.9969
.9941
.9949
.9960
.9911
1.0002
1.0245
1.0320
1.0251
1.0097
.9982
1.0017
1.0007
.9995
.9963
.9904
.9957
.9977
.9866
1.0005
.9905
.9856
1.0000
1.0051
.9971
.9956
.9990
.9997
1.0003
1.0010
1.0024
1.0016
1.0099
.9971
.9634
.9806
.9811
.9685
.9635
.9884
1.0138
1.0042
1.0004
.9911
.9960
1.0097
1.0063
1.0054
1.0032
1.0013
1.0022
1.0039
1.0035
1.0040
1.0077
1.0039
1.0069
1.0045
1.0114
1.0044
1.0157
1.0185
1.0059
1.0077
1. Seasonally adjusted other checkable deposits at thrift institutions are
derived as the difference between total other checkable deposits, seasonally
1.0001
adjusted, and seasonally adjusted other checkable deposits at commercial
banks
Additional table on seasonal factors follows.
278
4.
Federal Reserve Bulletin • April 1992
Weekly seasonal factors for selected components of the monetary aggregates, December 1991-April 5, 1993
Deposits 1
Week ending
Money market mutual funds
Savings
and
MMDAs
Small
denomination
time
Large
denomination
time
In M2
In M3 only
.9980
1.0017
1.0001
.9926
.9892
1.0009
1.0003
.9995
.9993
1.0007
.9963
.9970
.9966
.9949
.9961
.9975
.9970
.9968
.9940
.9869
1.0017
1.0012
1.0116
1.0091
1.0085
6
13
20
27
.9968
.9988
.9950
.9902
1.0030
1.0035
1.0032
1.0026
.9942
.9945
.9926
.9918
.9736
.9972
1.0068
1.0098
.9811
1.0368
1.0454
1.0473
February
3
10
17
24
.9908
.9950
.9951
.9941
1.0029
1.0034
1.0029
1.0018
.9917
.9965
.9975
.9978
1.0060
1.0112
1.0121
1.0180
1.0389
1.0490
1.0459
1.0439
March
2
9
16
23
30
.9965
1.0015
1.0034
1.0018
1.0028
1.0014
1.0009
1.0003
.9996
1.0006
.9980
1.0011
1.0029
1.0019
1.0005
1.0190
1.0225
1.0250
1.0268
1.0271
1.0498
1.0354
1.0360
1.0364
1.0219
April
6
13
20
27
1.0099
1.0116
1.0020
.9963
1.0004
.9993
.9987
.9984
1.0017
.9986
.9945
.9938
1.0235
1.0292
1.0198
1.0095
1.0080
1.0219
1.0062
1.0043
May
4
11
18
25
.9976
1.0002
1.0007
.9992
.9980
.9975
.9970
.9964
.9952
1.0001
1.0039
1.0085
.9953
.9893
.9880
.9966
.9960
1.0113
.9947
1.0156
June
1
8
15
22
29
1.0015
1.0084
1.0082
1.0021
1.0002
.9961
.9957
.9958
.9957
.9976
1.0082
1.0087
1.0091
1.0044
.9951
.9938
.9918
.9906
.9859
.9830
.9969
.9889
.9806
.9768
.9737
July
6
13
20
27
1.0066
1.0085
1.0049
1.0014
1.0001
.9998
.9995
.9994
.9951
.9978
1.0003
1.0022
.9785
.9884
.9903
.9903
.9640
.9684
.9810
.9802
August
3
10
17
24
31
1.0027
1.0057
1.0045
1.0009
.9992
.9995
1.0000
.9995
.9990
.9987
1.0026
1.0036
1.0041
1.0061
1.0077
.9885
.9937
.9924
.9993
.9981
.9719
.9855
.9873
.9919
.9794
September 7
14
21
28
1.0031
1.0027
.9960
.9926
.9992
.9987
.9987
1.0000
1.0050
1.0053
1.0028
1.0025
.9923
1.0002
1.0016
.9946
.9745
.9722
.9688
.9566
October
5
12
19
26
.9991
1.0013
.9990
.9953
1.0028
1.0030
1.0017
1.0011
1.0033
1.0017
.9990
.9988
.9906
.9956
.9937
1.0013
.9504
.9724
.9631
.9838
November 2
9
16
23
30
.9964
1.0019
1.0018
.9984
.9968
1.0010
1.0011
1.0010
1.0009
1.0010
.9981
.9993
.9991
.9990
.9976
.9928
.9950
.9954
1.0011
.9972
.9864
.9874
.9883
1.0026
.9978
December 7
14
21
28
1.0000
.9992
.9927
.9904
1.0010
1.0005
.9999
1.0002
.9968
.9974
.9964
.9958
.9954
.9980
.9956
.9875
.9998
1.0129
1.0173
1.0054
.9976
1.0000
.9946
.9891
1.0026
1.0037
1.0035
1.0029
.9947
.9939
.9930
.9923
.9789
.9887
1.0044
1.0079
.9838
1.0229
1.0374
1.0435
1991—December 2
9
16
23
30
1992—January
1993—January
4
11
18
25
Announcements
4.
Weekly seasonal factors for selected components of the monetary aggregates—continued
Deposits1
Week ending
Savings
and
MMDAs
Small
denomination
time
Money market mutual funds
Large
denomination
time
In M2
In M3 only
February
1
8
15
22
.9908
.9947
.9952
.9942
1.0028
1.0034
1.0030
1.0021
.9909
.9947
.9980
.9978
1.0070
1.0102
1.0148
1.0155
1.0478
1.0462
1.0479
1.0416
March
1
8
15
22
29
.9950
1.0012
1.0038
1.0026
1.0013
1.0013
1.0012
1.0006
.9995
1.0003
.9985
1.0000
1.0022
1.0025
1.0027
1.0174
1.0210
1.0251
1.0274
1.0276
1.0542
1.0386
1.0413
1.0378
1.0226
5
1.0081
1.0007
.9998
1.0260
1.0105
April
1. These seasonal factors are applied to deposits data at both commercial banks and thrift institutions.
279
280
Record of Policy Actions
of the Federal Open Market Committee
MEETING HELD ON DECEMBER 17, 1991
Domestic Policy Directive
The information reviewed at this meeting indicated
that the economy was sluggish and that business
and consumer confidence remained depressed.
Spending for housing and business equipment had
been rising, but consumption expenditures had softened, commercial construction activity was still
declining, and government spending at all levels
was being restrained by budgetary imbalances. Recently, industrial production had fallen, and payroll
employment had dropped sharply. Wage and price
increases had continued to trend downward.
Total nonfarm payroll employment fell sharply
in November after rising somewhat in the third
quarter and changing little in October. Declines in
employment were widespread: The number of manufacturing jobs decreased in November for a third
straight month, and further job losses were reported
in construction and in wholesale and retail trade.
However, the average weekly hours worked by
production or nonsupervisory workers in the private nonfarm sector edged up in November, and
the civilian unemployment rate remained at
6.8 percent.
Industrial production fell appreciably in November after changing little in the previous three
months. A portion of the November decline reflected a sizable drop in the output of motor vehicles and parts. In addition, however, the production
of non-auto consumer goods slackened, and the
output of business equipment other than motor
vehicles remained near its low of last March; the
latter reflected in part the persisting effects of a
strike at a major producer of industrial equipment. As in most earlier months of the year, the
production of defense and space products declined.
With industrial output down in November, total
industrial capacity utilization decreased, and de-
clines in operating rates were widespread across
industries.
Real consumer spending had been soft on balance in recent months, reflecting sluggish growth
in disposable incomes, weak labor-market conditions, and depressed consumer confidence. Nominal retail sales expanded somewhat in November
from a downward revised level for October. The
November increase reflected a rebound in sales of
nondurable goods other than food and a rise in
sales at automotive dealers; sales of durable goods
other than autos were about unchanged. Housing
starts fell in November, retracing part of a substantial advance in October; on average, starts were
appreciably higher in October and November than
in the third quarter. Despite low mortgage interest
rates and steady house prices, sales of singlefamily homes in October remained well below their
spring levels.
After changing little over the third quarter, shipments of nondefense capital goods registered a
sharp rise in October, reflecting a bulge in outlays
for computing equipment; shipments of most other
types of business equipment remained sluggish.
Recent data on orders suggested little growth in
aggregate outlays for business equipment over the
near term. Nonresidential construction, notably of
office and other commercial structures, continued
to shrink in October. The vacancy rate for office
buildings was still very high, and this along with
available information on contracts and commitments suggested that nonresidential construction
activity would remain weak for an extended period.
Business inventories turned up sharply in September after many months of liquidation. At the
retail level, inventories rose further in October,
with nearly half of the buildup occurring at auto
dealers. The additional rise in stocks coupled with
declines in sales led to higher inventory-to-sales
ratios at many types of retail establishments. Aggregated over all retail establishments other than
281
auto dealers, the ratio of inventories to sales in
October was close to the peak posted in early 1991.
By contrast, in manufacturing, stocks changed little
in October, and the ratio of stocks to sales decreased and nearly reached its low of August 1990.
Wholesale inventories were up slightly in October
after a sizable decline in the previous month; the
inventory-to-sales ratio remained in the narrow
range that had prevailed in recent months.
The nominal U.S. merchandise trade deficit widened slightly further in September. For the third
quarter, the deficit was somewhat above its average
rate over the first half of 1991 but well below its
rate in 1990. The value of exports in the third
quarter remained close to the record high reached
in the second quarter while the value of imports
increased appreciably, with most of the rise reflecting larger imports of automotive products and
consumer goods. The increase in imports of consumer goods appeared to have contributed to the
substantial buildup in retail inventories in the
United States, particularly in the month of September. The available data on economic activity in the
major foreign industrial countries provided further
evidence of relatively weak growth on balance in
these countries in the third quarter and gave few
indications of a revival in the fourth quarter. The
trend toward reduced inflation had continued in
most of the industrial countries.
Producer prices of finished goods advanced in
November at about the slow pace recorded since
midyear; over this period, declines in food prices
roughly offset increases in energy prices. At the
consumer level, food and energy prices jumped in
November, but the increase in the prices of nonfood, non-energy items was about the same as that
registered since midyear and considerably below
the 1990 pace. Average hourly earnings of production or nonsupervisory workers in the OctoberNovember period increased at about the reduced
third-quarter rate; over the past twelve months,
average hourly earnings had risen more slowly than
in the previous twelve-month period.
At its meeting on November 5, 1991, the Committee adopted a directive that called for an immediate slight easing in the degree of pressure on
reserve positions and that provided for giving special weight to potential developments that might
require some additional easing during the intermeeting period. Accordingly, the directive indi-
cated that slightly greater reserve restraint might be
acceptable during the intermeeting period or
slightly lesser reserve restraint would be acceptable
depending on progress toward price stability, trends
in economic activity, the behavior of the monetary
aggregates, and developments in foreign exchange
and domestic financial markets. The reserve conditions contemplated under this directive were expected to be consistent with growth of M2 and M3
at annual rates of around 3 percent and 1 percent
respectively over the three-month period from
September through December.
Immediately following the November meeting,
open market operations were directed toward a
slight easing of conditions in reserve markets; this
step was taken in conjunction with the reduction in
the discount rate from 5 to 4V2 percent approved by
the Board of Governors on November 6. In early
December, as economic indicators continued to
point to a faltering recovery and growth of the
broad monetary aggregates remained sluggish, an
additional slight easing of reserve conditions was
carried out. Several technical reductions were made
during the intermeeting period to expected levels of
adjustment plus seasonal borrowing to reflect the
declining usage of seasonal credit during the autumn. For most of the intermeeting interval, adjustment plus seasonal borrowing tended to run a little
below expected levels, averaging slightly more
than $100 million over the three complete reserve
maintenance periods. The federal funds rate averaged around 43A percent over most of the period
but softened to around 4l/z percent after the second
easing action.
Other short-term interest rates declined more
than the federal funds rate as market participants
reacted to actual and anticipated further easing
steps amid growing evidence that the economic
recovery had stalled. Expectations of more subdued economic activity contributed to declines in
yields on longer-term instruments as well. Yields
on intermediate maturity securities dropped almost
as much as short-term rates while rates on mortgages, corporate bonds, and long-term Treasuries
fell by less. The prime rate was reduced by Vi percentage point to IVi percent early in the intermeeting period. Broad stock price indexes were down
slightly.
The trade-weighted value of the dollar in terms
of the other G-10 currencies declined further on
282
Federal Reserve Bulletin • April 1992
balance over the intermeeting period. During most
of the period, signs of weakness in the U.S. economy and the easings of U.S. monetary policy had a
depressing effect on the value of the dollar. The
dollar's depreciation was primarily against the
mark and other European currencies; the mark was
supported by reports of further increases in wage
and price inflation in Germany and associated expectations that German monetary policy would be
tightened. The dollar declined less against the Japanese yen as evidence accumulated that the Japanese
economy was slowing further and some easing was
implemented in Japanese monetary policy.
Expansion in M2 picked up in November from a
slow pace in October. At least in part this reflected
the cumulative effect of earlier declines in shortterm market interest rates in lowering the opportunity costs of holding liquid deposits. The somewhat
faster expansion of M2 was consistent with the
Committee's expectations for M2 growth in the
fourth quarter. The more rapid growth of M2
showed through to a limited extent to M3. For the
year through November, expansion of both M2 and
M3 was estimated to have been at the lower ends of
the Committee's annual ranges.
The staff projection prepared for this meeting
pointed to a recovery in economic activity. However, a variety of incoming information, notably
indications of a depressed state of confidence,
weaker than expected consumer spending, and
sluggish industrial production suggested a pause in
the recovery that might extend into early 1992. By
the spring, the cumulative effects of declines in
interest rates in recent months would contribute to
a resumption of economic growth at a moderate
rate, with the risks of a stronger or weaker trajectory for the economy being viewed as about in
balance. Increases in residential construction,
somewhat larger consumption expenditures, and
some pickup in business equipment spending were
projected to provide the underpinnings for the resumption of growth. As in earlier forecasts, the
continuing downtrend in commercial construction
and ongoing adjustments in state and local government spending in response to budget imbalances
were expected to have a retarding effect on aggregate demand. At the federal level, projected declines in defense outlays, which would be only
partially offset by higher nondefense spending, also
would be a source of restraint, at least in the
absence of new fiscal initiatives. The substantial
though diminishing slack expected in labor and
product markets in coming quarters was projected
to induce further declines in the underlying rate of
inflation.
In the Committee's discussion of current and
prospective economic developments, the members
focused on an evident pause in the business recovery and its interaction with very gloomy business
and consumer sentiment. A number of factors that
had been expected to damp the expansion—
including the retrenchment associated with the rebuilding of balance sheets by heavily indebted
businesses and consumers and the efforts of many
firms to improve efficiency by streamlining operations and reducing employment—had in fact
proved to be stronger and more persistent than
anticipated. The timing of a renewed expansion in
business activity was uncertain, and a number of
members commented that the economy might well
remain quite sluggish over the months immediately
ahead. Nonetheless, considerable progress in business and financial restructuring activities was in
train, and the latter, together with the stimulus that
could be expected from the lagged effects of earlier
monetary policy easing actions, was likely to lead
to a moderate pickup in the economy later in 1992.
With regard to the outlook for inflation, many
members observed that the statistical and anecdotal
evidence pointed to faster progress toward price
stability than they had anticipated earlier.
As they had at earlier meetings, the members
gave considerable emphasis to current business and
consumer sentiment, which they judged to be much
more negative than under similar business and employment conditions in the past. The underlying
reasons were difficult to ascertain but probably
reflected a variety of developments, including
widespread disappointment over the pace of the
economic recovery, related consumer concerns
about employment opportunities, and fears associated with heavy debt burdens and the weakened
financial condition of many business and financial
institutions. The size of the federal budget deficit
was adding to those concerns, and the budgetary
problems of many state and local governments
were seen as likely to result in higher taxes and
spending cutbacks. On the positive side, while the
efforts to rebuild balance sheets and to restructure
business activities were likely to continue to exert
Record of Policy Actions of the Federal Open Market Committee
restraining effects on the economy, such developments had favorable implications for the financial
health and the competitive strength of the economy
over the longer run. Members noted in this connection that a record volume of equity issues was
helping to reduce balance sheet leverage and that
proceeds from large offerings of debt securities
were being used to a considerable extent to pay
down short-term liabilities. The sizable decline in
interest rates over the course of recent months was
easing the debt service burdens of many borrowers,
and in a few geographic areas banking institutions
were reported to be making funds more readily
available. The stock market continued to display
appreciable strength, reflecting the drop in interest
rates and suggesting investor confidence in the
longer-run outlook for the economy. Some members also cited the indications of reviving growth in
the broader monetary aggregates as an encouraging
if still tentative development.
Turning to developments in key sectors of the
economy, the members commented that it was still
too early to get a firm indication regarding holiday
spending by consumers, though retailers in some
parts of the country reported that sales were somewhat better than they had projected. Nonetheless,
consumers remained quite cautious nationwide, and
some members commented that consumer spending for durable goods might well continue sluggish
over the months ahead, especially in a context of
widespread consumer concerns about employment
prospects, debt burdens, and softness in real estate
prices. Some members also observed that the saving rate was already on the low side and that the
risks of a rise in that rate could not be ruled out in
the environment that was likely to prevail during
the months ahead.
The members did not discern signs of significant
strengthening in business expenditures for equipment over the nearer term, though the output of
capital goods appeared to be on a slowly rising
trend in at least one major capital-producing region. Nonresidential construction activity remained
very weak in most parts of the country, and high
vacancy rates suggested little prospect for improvement in the commercial building sector for an
extended period. On the other hand, significant
improvement in housing construction was reported
in some parts of the country, and housing activity
appeared to be holding up reasonably well on a
283
nationwide basis. The declines that had occurred in
interest rates would tend over time to stimulate
housing and other interest-sensitive sectors of the
economy. The outlook for U.S. exports was tempered by more sluggish business conditions in several key countries than had been expected earlier,
but exports would be supported by the depreciation
in the foreign exchange value of the dollar since
mid-1991.
Businesses continued to pursue cautious inventory investment policies. Contacts in most parts of
the country described current inventories as lean,
and many retailers were prepared to accept reduced
sales rather than to add to their inventories under
prevailing conditions, although some buildup had
occurred in recent months in association with weak
demands. While rising inventories were not likely
to make a major contribution to the anticipated
recovery, any significant firming in final demands
probably would be reflected fairly promptly in increased production.
With regard to the outlook for the government
sectors, members commented that the massive size
of current federal budget deficits greatly limited
any flexibility in providing some stimulus through
fiscal policy actions. It was noted in this connection
that any legislation that was seen as significantly
increasing the size of the federal deficits over the
longer run could have adverse repercussions on
long-term interest rates and business and consumer
confidence. Some members also referred to the
negative effects on confidence and spending stemming from the budgetary difficulties of numerous
state and local governments; at least in some areas,
however, capital expenditures by such government
entities were being accelerated by lower interest
and other costs.
The members were encouraged by evidence that
inflationary pressures appeared to be subsiding at a
faster pace than they had anticipated earlier. Anecdotal reports suggested very competitive conditions
in producer and retail markets and favorable wage
patterns. Employee benefit costs were still rising
rapidly, notably medical costs, but members cited
some examples of promising efforts on the part of
medical providers to curb the escalation in their
costs. It was suggested that the behavior of commodity prices over the past year was consistent
with an outlook for stable producer prices. The
members saw little risk of worsening inflationary
284
Federal Reserve Bulletin • April 1992
pressures over the forecast horizon even if the pace
of the recovery proved to be somewhat more vigorous than they currently expected; however, some
stressed that it was important for monetary policy
to sustain the downtrend in inflation over an even
longer horizon.
In the Committee's discussion of policy for the
period ahead, most of the members indicated that
they favored or could accept a directive that called
for no immediate change in the degree of pressure
on reserve positions but that carried an especially
strong presumption that some easing in reserve
conditions would be implemented unless improvement in the economy became evident fairly
promptly or there was significant evidence of a
pickup in M2 growth in the period immediately
ahead. Separately, the Board of Governors would
need to decide how the discount rate should be
structured in order to get the maximum benefits
from any easing, given the current state of business
and consumer confidence.
The policy discussion focused on the need to
foster a sustained, noninflationary recovery. Such
an environment would promote continuing balance
sheet adjustments and business restructurings that
would over time enhance the financial soundness
and competitive strength of the economy. For now,
however, these activities were having restraining
effects on the economy, and there were as yet no
clear indications that the recovery was resuming.
While the risks of a substantial weakening in the
economy were perhaps small, such a development
would have severe consequences for the economy
and financial institutions. In these circumstances,
many of the members believed that some further
easing of reserve conditions likely would be called
for, especially if indications of some strengthening
in the economy or in the growth of the monetary
aggregates should fail to materialize in the near
future. A number of members also commented that
against the background of better-than-expected
progress toward price stability, a stalled recovery,
and slow monetary growth, the inflation risks of
further easing were minimal.
Some members indicated that they saw an advantage in making a more substantial policy move at
some point in the period ahead rather than additional limited easing actions of the sort that had
been implemented in recent years. In this view, a
larger and more visible policy action, which gener
ally was not anticipated infinancialmarkets, would
have greater effectiveness in part because it would
be more likely to bolster confidence. The level of
interest rates and money growth that would be
expected to ensue from such an action, against the
background of the substantial easing that had already been implemented, should be sufficient to
foster expansion and promote the view that further
easing would not be needed.
Other members, while not disagreeing that further easing might be desirable, nonetheless expressed reservations about the urgency to ease in
the near term and especially the need for a sizable
move. These members emphasized that a substantial amount of easing had been implemented over
the past several months and that to a considerable
extent the effects of such easing had not yet shown
through in the economy. A number of these members also expressed the view that monetary policy
could do little to offset the restraining effects of the
balance sheet adjustments and business restructuring activities that were currently under way. Moreover, a resurgence of inflation pressures as the
recovery gathered strength could not be ruled out,
and too much easing in the period immediately
ahead might have to be reversed later with unsettling consequences.
According to a staff analysis prepared for this
meeting, M2 and M3 were likely to continue to
grow at a restrained pace over the months ahead in
light of sluggish expansion in nominal income and
very limited loan growth. A decision to implement
somewhat easier reserve conditions would stimulate slightly faster monetary expansion in the early
months of next year, though the broader aggregates
would probably remain appreciably below the midpoints of the tentative ranges that the Committee
had established for 1992. The members observed
that to an important extent the weakness of the
monetary aggregates appeared to be related to developments that involved some reduction in the
intermediary role of depository institutions and
might not have adverse implications for the overall
availability of financing in the economy. Some
members suggested that a number of indicators,
including the behavior of commodity prices, the
slope of the yield curve, and trends in the growth of
reserves and narrow measures of money, pointed to
an adequate availability of liquidity in the economy. Nonetheless, several members expressed con-
Record of Policy Actions of the Federal Open Market Committee
cern about the continuing lagging growth in the
broad measures of money, and they felt that consideration should be given to an easing of reserve
conditions if incoming data were to suggest that the
recent pickup was not being sustained.
In the course of the Committee's discussion, the
members reviewed a proposal to amend the wording of the statement in the operational paragraph of
the directive that related to possible intermeeting
adjustments to the degree of reserve pressures.
While several members expressed a slight preference for retaining the current statement, which
contained an ordering of the factors considered by
the Committee in guiding intermeeting policy adjustments, and a few preferred to delete the listing
of factors altogether from the sentence, all of the
members indicated that they could support a proposed alternative. That alternative would make
clearer the Committee's focus on its long-term
goals by inserting a reference to those goals at the
beginning of the sentence and would refer in a
more general way to the immediate economic,
financial, and monetary developments that might
prompt an intermeeting adjustment. This new
wording implied less focus in the directive itself on
the ranking of the factors, but the understandings
reached at meetings regarding their relative importance would continue to be explained fully in the
policy record. The members agreed that the revised
statement should be reviewed every year or more
often if warranted by changing economic or financial conditions.
At the conclusion of the Committee's discussion,
all but one of the members indicated that they
favored or could accept a directive that would call
initially for maintaining the existing degree of pressure on reserve positions. The members also noted
their preference or acceptance of a directive that
included a marked bias toward easing during the
intermeeting period. Accordingly, in the context of
the Committee's long-run objectives for price stability and sustainable economic growth, and giving
careful consideration to economic, financial, and
monetary developments, slightly greater reserve
restraint might be acceptable or somewhat lesser
reserve restraint would be acceptable during the
intermeeting period. The reserve conditions contemplated at this meeting were expected to be
consistent with growth of M2 and M3 at annual
rates of around 3 percent and IV2 percent respec-
285
tively over the four-month period from November
through March.
At the conclusion of the meeting the following
domestic policy directive was issued to the Federal
Reserve Bank of New York:
The information reviewed at this meeting continues to
portray a sluggish economy and a depressed state of
business and consumer confidence. Total nonfarm payroll employment fell sharply in November; however, the
average workweek in the private nonfarm sector edged
up and the civilian unemployment rate remained at
6.8 percent. Industrial production fell in November,
partly reflecting a sizable drop in motor vehicle assemblies. Consumer spending has been soft on balance in
recent months. Real outlays for business equipment appear to be rising slowly, and nonresidential construction
has continued to decline. Housing starts were appreciably higher on average in October and November than in
the third quarter. The nominal U.S. merchandise trade
deficit widened slightly further in September; the deficit
in the third quarter was substantially larger than in the
second quarter. Wage and price increases have continued
to trend downward.
Interest rates have declined appreciably since the
Committee meeting on November 5. The Board of Governors approved a reduction in the discount rate from 5
to 4V2 percent on November 6. In foreign exchange
markets, the trade-weighted value of the dollar in terms
of the other G-10 currencies declined further over the
intermeeting period; the dollar depreciated primarily
against the mark and other European currencies.
Expansion in M 2 and M3 edged up in November from
a slow pace in October; the slightly faster growth reflected a strengthening in the most liquid components of
the aggregates. For the year through November, expansion of both M 2 and M3 is estimated to have been at the
lower ends of the Committee's ranges.
The Federal Open Market Committee seeks monetary
and financial conditions that will foster price stability
and promote sustainable growth in output. In furtherance
of these objectives, the Committee at its meeting in July
reaffirmed the ranges it had established in February for
growth of M 2 and M3 of 2Vi to 6V2 percent and 1 to
5 percent, respectively, measured from the fourth quarter
of 1990 to the fourth quarter of 1991. The monitoring
range for growth of total domestic nonfinancial debt also
was maintained at AV2 to 8V2 percent for the year. For
1992, on a tentative basis, the Committee agreed in July
to use the same ranges as in 1991 for growth in each of
the monetary aggregates and debt, measured from the
fourth quarter of 1991 to the fourth quarter of 1992.
With regard to M3, the Committee anticipated that the
ongoing restructuring of thrift depository institutions
would continue to depress the growth of this aggregate
relative to spending and total credit. The behavior of the
monetary aggregates will continue to be evaluated in the
light of progress toward price level stability, movements
286
Federal Reserve Bulletin • April 1992
in their velocities, and developments in the economy and
financial markets.
In the implementation of policy for the immediate
future, the Committee seeks to maintain the existing
degree of pressure on reserve positions. In the context of
the Committee's long-run objectives for price stability
and sustainable economic growth, and giving careful
consideration to economic, financial, and monetary developments, slightly greater reserve restraint might or
somewhat lesser reserve restraint would be acceptable in
the intermeeting period. The contemplated reserve conditions are expected to be consistent with growth of M 2
and M3 over the period from November through March
at annual rates of about 3 and 1 Vi percent, respectively.
Votes for this action: Messrs. Greenspan, Corrigan,
Angell, Black, Forrestal, Keehn, Kelley, Lindsey,
Mullins, Parry, and Ms. Phillips. Vote against this
action: Mr. LaWare.
Mr. LaWare dissented because he did not favor
the inclusion in the directive of a strong presumption that monetary policy would be eased further
during the intermeeting period. While future developments might call for further easing, he preferred
not to prejudge that need but to wait and assess the
effects of the considerable easing actions undertaken earlier. In his view, the main barrier to a
satisfactory economic performance was a crisis in
confidence that was not likely to be alleviated by
further incremental easing. In present circumstances, a steady policy could provide a firm signal
that the downward drift in interest rates associated
with a long series of small easing actions had come
to an end. This signal might well prove to be
beneficial to the economy as interest-sensitive deci-
sions to spend no longer were postponed in anticipation of still lower interest rates. He recognized
that lower interest rates could alleviate heavy debt
service burdens, but he was concerned about the
effects of a further decline in interest rates on the
value of the dollar in foreign exchange markets.
At a telephone conference on December 20,
1991, the Committee discussed the approval by the
Board of Governors of a 1 percentage point reduction in the discount rate, effective that day, and the
implications of that action for the implementation
of the Committee's policy with regard to the degree of pressure to be sought in reserve markets. It
was noted during this discussion that the limited
data received since the Committee's meeting on
December 17 continued to point to a very sluggish
economy. In keeping with the Committee's decision at its recent meeting, it was deemed appropriate to direct open market operations toward allowing part of the reduction in the discount rate to be
reflected in the federal funds rate. Members commented that the substantial cut in the discount rate
and the accompanying adjustment in open market
operations were likely to have a favorable effect on
financial markets and the behavior of the monetary
aggregates and in conjunction with the ongoing
effects of earlier easing actions would provide the
financial basis for a resumption of sustainable economic growth. In light of the substantial size of
these actions, it would be appropriate to view the
directive as symmetrical with regard to any further
changes in policy over the remainder of the intermeeting period.
287
Legal Developments
FINAL RULE—AMENDMENT
TO RULES
REGARDING DELEGATION OF AUTHORITY
The Board of Governors is amending 12 C.F.R. Part
265, its Rules Regarding Delegation of Authority. The
amendment expands the duties Delegated to the General Counsel and the Director of the Board's Division
of Banking Supervision and Regulation to include the
Authority to enter into, stay, modify, terminate or
suspend a cease-and-desist order, removal and prohibition order, or civil money penalty assessment order,
when the order has been consented to by the institution or individual subject to the order. The Board
believes that the Federal Reserve's enforcement functions can be made more efficient and responsive by
delegating this authority.
Effective February 28, 1992, 12 C.F.R. Part 265 is
amended as follows:
1. The authority citation for 12 C.F.R. Part 265 continues to read as follows:
Authority: Section 11 (i) and (k) of the Federal Reserve
Act, (12 U . S . C . 248(i) and (k)).
2. Section 265.6 is amended by republishing the introductory text and adding paragraph (e) to read as
follows:
Part 265—Rules
Authority
Regarding
Delegation
of
Section 265.6—Functions delegated to General
Counsel.
The Board's general counsel (or the general counsel's
delegee) is authorized:
(e) Consent enforcement orders. With the concurrence
of the director of the Board's Division of Banking
Supervision and Regulation (or the director's delegee):
(1) To enter into a cease-and-desist order, removal
and prohibition order, or civil money penalty assessment order with a bank holding company or any
nonbanking subsidiary thereof, with a state member
bank, or with any other person or entity subject to
the Board's jurisdiction, when the order has been
consented to by the institution or individual subject
to the order ;
(2) To stay, modify, terminate, or suspend an order
issued pursuant to paragraph (1).
Orders Issued Under Section
Holding Company
Act
3 of the
Bank
Norwest Corporation
Minneapolis, Minnesota
Order Approving
Acquisition
of a De Novo
Bank
Norwest Corporation, Minneapolis, Minnesota ("Norwest"), a bank holding company within the meaning of
the Bank Holding Company Act ("BHC Act"), has
applied under section 3 of the BHC Act (12 U . S . C .
§ 1842) to acquire Norwest Bank, Waseca, N . A . ,
Waseca, Minnesota ("Waseca Bank"), a de novo
bank.
Notice of the application, affording interested persons an opportunity to submit comments, has been
duly published (56 Federal Register 58,383 (1991)).
The time for filing comments has expired, and the
Board has considered the application and all comments received in light of the factors set forth in
section 3(c) of the BHC Act.
Norwest is the largest commercial banking organization in Minnesota, controlling $10.0 billion in deposits in the state, representing 23.5 percent of total
deposits in commercial banking organizations in Minnesota. 1 Waseca Bank a de novo institution will provide a full range of commercial banking services in the
Owatonna banking market. 2 In view of the de novo
status of Waseca Bank and based upon the facts in the
record, the Board concludes that the proposed transaction would have no adverse effect on existing com-
1. Data are as of June 30, 1991.
2. The Owatonna, Minnesota banking market consists of Steele
County, Minnesota; Waseca County, Minnesota, less Jamesville,
Alton, Freedom and Vivian townships; and Ellington, Claremont,
Ripley, and Westfield townships in Dodge County, Minnesota. Norwest will transfer certain assets and liabilities from the Owatonna
branch of Norwest Bank Minnesota South, N . A . , Faribault, Minnesota to Waseca Bank.
288
Federal Reserve Bulletin • April 1992
petition, nor would it increase the concentration of
resources in any relevant market.
Several local Waseca banks and the Independent
Bankers of Minnesota (collectively "Protestants")
have filed comments objecting to Norwest's proposal.
Under Minnesota law, N o r w e s t is prohibited by the
so-called "home office protection rule" from establishing a branch of an existing subsidiary bank in a
community like Waseca with a population of 10,000 or
less unless the local banks consent to the addition of
the branch. 3
Protestants maintain that Norwest's proposal is
prohibited by Minnesota's home office protection rule
because the proposal would be an illegal circumvention of this provision. 4 Protestants note that Norwest
has announced plans to merge Waseca Bank with
N o r w e s t Bank, Minnesota South, N . A . , Faribault,
Minnesota ( " N B M S " ) , and to operate it as a branch of
N B M S within t w o years. Protestants also allege that
by this acquisition, N o r w e s t would violate a commitment to the Board not to operate a branch in Waseca
if to do s o would be inconsistent with Minnesota law. 5
The record does not indicate that N o r w e s t will
operate the Waseca Bank as a branch of another bank.
For example, Waseca Bank will be separately chartered, separately incorporated, and separately capitalized; loans made by the Waseca Bank will be accounted for as assets of that bank; and the W a s e c a
Bank will have lending officers on site w h o will have
independent lending authority subject to the same
policies that apply throughout the Norwest system. 8
Protestants have not provided facts to indicate that the
Waseca Bank will operate as a branch of another bank.
In the Board's view, issues regarding Norwest's future
plans for Waseca Bank are more appropriately raised
if and when N o r w e s t seeks the required regulatory
approvals.
In approving N o r w e s t ' s acquisition of First Minnesota Savings Bank, F . S . B . , Minneapolis, Minnesota ("First Minnesota") in 1990, the Board relied on
a commitment by N o r w e s t not to maintain First
Minnesota's branch in W a s e c a if this branch were
impermissible under Minnesota l a w . 9 This commitment w a s given to assure that the acquisition of First
Minnesota would not violate the h o m e office protection rule.
At this time, N o r w e s t has not proposed to establish
a branch of a subsidiary bank in a small community,
and approval of N o r w e s t ' s application before the
Board only authorizes the acquisition of a de novo
bank in the W a s e c a community. Minnesota law does
not require the consent of local banks for the acquisition of a new bank in a small community. Minnesota's
branching restrictions do not prohibit entry into a
small community if such entry can be accomplished
without establishing a branch, and the Minnesota
Commerce Commission previously has approved alternative means of entry into a small community when
the applicant was unable to obtain the required consent of local banks. 6 Moreover, additional regulatory
approvals would be required before N B M S could
establish a branch in Waseca by merging with a
N o r w e s t subsidiary bank. 7
After consummation of the proposal, N o r w e s t converted First Minnesota's Waseca branch into a service
center. In July 1991 the OCC conducted an unannounced visitation to the Waseca service center and
confirmed that it was not being operated as a branch.
The acquisition of a new bank in Waseca would not
violate the commitment to the Board. In light of these
facts, the Board believes that N o r w e s t has complied
with the commitment it made to the Board in connection with its acquisition of First Minnesota. 1 0
The financial and managerial resources and future
prospects of N o r w e s t , its subsidiary banks and
W a s e c a Bank are consistent with approval. The
Board also finds that considerations relating to the
c o n v e n i e n c e and needs of the communities to be
3. Minn. Stat. § 47.52 (1991).
4. Protestants raised similar objections in Norwest's application to
charter Waseca Bank, as a national bank. The Office of the Comptroller of the Currency ("OCC") has approved Norwest's charter application and the Minnesota Commerce Commission, the state's bank
regulator, has not objected to Norwest's application to acquire
Waseca Bank.
5. See Norwest Corporation,
76 Federal Reserve Bulletin 873
(1990).
6. The Commission's approval was upheld by the Supreme Court of
Minnesota in First National Bank of Long Prairie v. Department of
Commerce, 350 N.W. 2d 363 (1984).
7. The OCC's approval of the Waseca Bank charter specifically
noted that the OCC expressed no opinion on the permissibility of
merging Waseca Bank into NBMS. The merger of Waseca Bank into
a Norwest subsidiary bank and its operation as a branch would require
the approval of the appropriate federal or state regulator. In the event
that OCC approval were required, the McFadden Act would permit
Norwest to operate Waseca Bank as a branch only if a similarly
situated state-chartered bank could operate a branch in Waseca, and
subject to the same restrictions as those imposed on similarly situated
state-chartered banks. 12 U.S.C. § 36(c).
8. See Grandview Bank and Trust Co. v. Board of Governors of the
Federal Reserve System, 550 F.2d 415 (8th Cir. 1977), cert, denied 434
U.S. 821 (1977); North Hills Bank v. Board of Governors of the
Federal System, 506 F.2d 623 (8th Cir. 1974). See also
Commerce
Bancshares, Inc., 64 Federal Reserve Bulletin 803 (1978); United
Banks of Colorado, Inc., 64 Federal Reserve Bulletin 37 (1978); First
International Bancshares,
Inc., 63 Federal Reserve Bulletin 744
(1977).
9. Norwest Corporation, 76 Federal Reserve Bulletin 873 (1990).
10. Protestants maintain that Norwest's unsuccessful legislative
attempts to change Minnesota branching restrictions and the establishment of a branch in a neighboring community evidences Norwest's
bad faith in complying with its commitment. In the Board's opinion,
neither allegation is inconsistent with Norwest's commitment not to
establish a branch in Waseca if to do so would be inconsistent with
Minnesota law.
Legal Developments
s e r v e d , and s u p e r v i s o r y factors are c o n s i s t e n t with
approval. 1 1
B a s e d o n the foregoing and other facts o f record, the
Board has determined that the application should be,
and hereby is, approved. Approval of this proposal is
specifically conditioned o n compliance b y N o r w e s t
and all of its subsidiaries with the conditions refere n c e d in this order. The conditions relied o n in reaching this d e c i s i o n are conditions i m p o s e d in writing by
the Board in c o n n e c t i o n with its findings and decision
and m a y be e n f o r c e d in proceedings under applicable
law. T h e acquisition shall not be c o n s u m m a t e d before
the thirtieth calendar day following the effective date
of this Order, or later than three m o n t h s after the
effective date of this Order, and W a s e c a Bank shall be
o p e n e d for b u s i n e s s not later than six m o n t h s after the
effective date of this Order. T h e latter t w o periods may
be e x t e n d e d for g o o d c a u s e by the Board or by the
Federal R e s e r v e Bank of Minneapolis, acting pursuant
to delegated authority.
B y order o f the Board of Governors,
February 12, 1992.
effective
Voting for this action: Chairman Greenspan and Governors
Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips.
Associate
JENNIFER J . JOHNSON
Secretary of the Board
Texas Regional Bancshares, Inc.
McAllen, Texas
Texas State Bank
Mc Allen, Texas
Order Approving
Acquisition
of a Bank Merger
Banks, and Establishment
of Branches
of
T e x a s Regional B a n c s h a r e s , Inc., M c Allen, T e x a s
( " T e x a s R e g i o n a l " ) , a bank holding c o m p a n y within
11. The Board has carefully considered comments filed by a Waseca
resident who maintains along with Protestants that his community is
adequately served by the four financial institutions currently operating
in Waseca. This commenter also asserts without further explanation
that Norwest drains local deposits from communities like Waseca for
use in other service areas and has generally abandoned serving the
credit needs of rural agricultural communities.
As discussed above, the addition of Waseca Bank as a provider of
a full range of commercial banking services should serve to increase
the level of competition among providers of these services. In
addition, the Board has recently reviewed Norwest's record of
performance under the Community Reinvestment Act ("CRA"),
including relevant examination reports, and concluded that Norwest's
assistance in meeting the credit needs of its entire communities, is
consistent with approval of applications under the BHC Act. Norwest
Corporation, 77 Federal Reserve Bulletin 110,112 (1991) and Norwest
Corporation, 77 Federal Reserve Bulletin 343 (1991). On the basis of
these and other facts of record, the Board concludes that these
comments do not warrant denial of the application.
289
the meaning of the Bank Holding C o m p a n y A c t
( " B H C A c t " ) , has applied under section 3(a)(3) of the
B H C A c t (12 U . S . C . § 1842(a)(3)) to acquire Mid
Valley Bank, W e s l a c o , T e x a s . 1 T e x a s State Bank,
M c A l l e n , T e x a s , the lead subsidiary bank of T e x a s
Regional, has applied under section 18(c) of the Federal D e p o s i t Insurance A c t (12 U . S . C .
§ 1828(c))
( " B a n k Merger A c t " ) to merge with T e x a s Regional's
other subsidiary bank, Harlingen State Bank, Harling e n , T e x a s , and T S B - W e s l a c o , the s u c c e s s o r by
merger to Mid Valley Bank. T e x a s State Bank will be
the surviving entity. In addition, T e x a s State Bank has
applied t o establish branches at the locations of Harlingen State Bank and Mid Valley Bank, and an
automated teller machine ( " A T M " ) in Harlingen,
T e x a s , pursuant to section 9 of the Federal R e s e r v e
A c t (12 U . S . C . § 321).
N o t i c e o f the applications, affording interested persons an opportunity to submit c o m m e n t s , has b e e n
given in a c c o r d a n c e with the B H C A c t , the Bank
Merger A c t , and the Board's Rules o f Procedure
(12 C . F . R . 262.3(b)). A s required by the Bank Merger
A c t , reports o n the competitive effects of the merger
were requested f r o m the U n i t e d States Attorney General, the Office of the Comptroller of the Currency,
and the Federal D e p o s i t Insurance Corporation
( " F D I C " ) . The time for filing c o m m e n t s has expired,
and the Board has considered the applications and all
c o m m e n t s received in light of the factors set forth in
the B H C A c t , the Bank Merger A c t , and the Federal
Reserve Act.
T e x a s Regional is the 50th largest commercial banking organization in T e x a s , controlling t w o subsidiary
banks with total deposits o f $229.8 million, representing l e s s than 1 percent of total d e p o s i t s in commercial
banking organizations in the state. 2 Mid Valley Bank is
the 254th largest commercial banking organization in
T e x a s , controlling deposits of $72.3 million, representing less than 1 percent of total deposits in commercial
banking organizations in the state. U p o n c o n s u m m a tion of this proposal, T e x a s Regional w o u l d b e c o m e
the 32nd largest banking organization in T e x a s , controlling deposits of $302.1 million, representing l e s s
than 1 percent of total deposits in commercial banking
organizations in the state. C o n s u m m a t i o n of this proposal w o u l d not result in any significantly adverse
effect on the concentration of commercial banking
resources in T e x a s .
1. Mid Valley Bank is an affiliate of Texas Regional through
common shareholders and directors. Texas Regional has formed
Texas State Bank, Weslaco, Texas ("TSB-Weslaco"), a de novo
bank, for the purpose of effecting this proposal. TSB-Weslaco will be
merged with Mid Valley Bank with TSB-Weslaco as the survivor.
2. State data and market data are as of June 30, 1990.
290
Federal Reserve Bulletin • April 1992
Texas State Bank and Mid Valley Bank compete
directly in the McAllen-Edinburg-Mission M S A banking market. 3 Texas State Bank is the sixth largest
commercial banking organization in the market, controlling deposits of $145 million, representing 5.3 percent of total deposits in commercial banking organizations in the market. Mid Valley Bank is the 11th largest
commercial banking organization in the market, controlling deposits of $72.3 million, representing 2.6
percent of total deposits in commercial banking organizations in the market. U p o n consummation, Texas
Regional would b e c o m e the fifth largest commercial
banking organization in the market, controlling total
deposits of $217.3 million, representing 7.9 percent of
total deposits in commercial banking organizations in
the market.
The Herfindahl-Hirschman
Index
( " H H I " ) would increase 28 points to a level of 1176. 4
In light of the small increase in concentration, the
number of competitors remaining in the market, and
other facts of record, the Board concludes that consummation of the proposal is not likely to result in any
significantly adverse effect on competition in any
relevant banking market. The Board also concludes
that the financial and managerial resources, supervisory factors, and future prospects of Texas Regional
and Mid Valley Bank are consistent with approval of
these applications.
In considering the convenience and needs of the
communities to be served by these institutions, the
Board has taken into account the record of the subsidiary banks of Texas Regional and Mid Valley Bank
under the Community Reinvestment Act (12 U . S . C .
§ 2901 et je«?.)("CRA"). The CRA requires the federal
financial supervisory agencies to encourage financial
institutions to help m e e t the credit n e e d s of the local
communities in which they operate consistent with
the safe and sound operation of such institutions. T o
accomplish this end, the CRA requires the appropriate federal supervisory authority to " a s s e s s an institution's record of meeting the credit needs of its
entire community, including low- and moderate-
3. The McAllen-Edinburg-Mission MSA banking market is approximated by Hidalgo County, Texas.
4. Under the revised Department of Justice Merger Guidelines, 49
Federal Register 26,823 (1984), a market in which the post-merger
HHI is between 1000 and 1800 is considered to be moderately
concentrated. The Justice Department 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 or acquisition
increases the HHI by at least 200 points. The Justice Department 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.
income neighborhoods, consistent with the safe and
sound operation of the institution." 5
The Board has received comments from the
McAllen Minority Business Development Center and
an individual (collectively "Protestants") alleging generally that Mid Valley Bank's efforts in meeting the
credit needs of the Hispanic community are inadequate. Protestants also allege that credit decisions are
delayed for Hispanic applicants at Mid Valley Bank.
The Board has carefully reviewed the CRA performance record of T e x a s Regional's subsidiary banks
and Mid Valley Bank, as well as Protestants' comments and Texas Regional's responses to those comments, in light of the C R A , the Board's regulations,
and the Statement of the Federal Financial Supervisory Agencies Regarding the Community Reinvestment Act ("Agency CRA Statement"). 6 The Agency
CRA Statement provides guidance regarding the types
of policies and procedures that supervisory agencies
believe financial 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. The Agency CRA Statement also suggests that
decisions by agencies to allow financial institutions to
expand will be made pursuant to an analysis of the
institution's overall CRA performance and will be
based on the actual record of performance of the
institution. 7
Texas State Bank's most recent examination rating
for CRA performance as of July 22, 1991, by its
primary regulator, the Federal Reserve Bank of Dallas
("Reserve Bank"), was satisfactory. 8 Mid Valley
Bank has also received a satisfactory rating in the most
recent examination of its CRA performance by its
primary regulator, the FDIC, as of August 13, 1990.
The Agency CRA Statement provides that although
CRA examination reports do not provide conclusive
evidence of an institution's CRA record, these reports
will be given great weight in the application process.
Texas State Bank has a program in place designed to
assist the bank in meeting the credit needs of its entire
community, including low- and moderate-income
neighborhoods. The Board notes that Texas Regional
intends to merge Mid Valley Bank and Harlingen State
Bank into Texas State Bank and to continue the C R A
program of Texas State Bank. The CRA program in
place at Texas State Bank includes a compliance
5. 12 U.S.C.
6. 54 Federal
l.ld.
8. Harlingen
performance by
§ 2901.
Register
13,742 (1989).
State Bank was also rated satisfactory for CRA
its primary regulatory, the FDIC, as of April 22,1991.
Legal Developments
committee which meets every two months and monitors consumer compliance and the bank's CRA program. Texas State Bank's efforts to ascertain the
credit needs of its communities rely primarily on
personal contact by its board members, officers, and
employees with members of the community. The bank
has supplemented these efforts by mailing community
contact letters and questionnaires to various persons
and organizations within its community in order to
obtain information regarding whether the credit needs
of the community were being met and what other
services T e x a s State Bank could provide to meet
needs that were not being addressed. Although Texas
State Bank's marketing program is not extensive,
given its size and resources, the program appears
sufficient. T e x a s State Bank makes use of radio,
television, and billboards, and its loan-to-deposit ratio
reflects a demand for its products.
Texas State Bank also actively participates in
projects that support community development activities. The chairman of the bank's board of directors
serves as the president of McAllen Affordable H o m e s ,
a corporation which provides funds for development
of subdivisions for first time home buyers with low- to
moderate-incomes. In February 1991, Texas State
Bank provided $500,000 in funding to McAllen Affordable H o m e s for the development of a subdivision.
Moreover, the bank's executive vice president in
charge of lending serves as president of R o n c o Enterprises, Inc., a corporation that engages in real estate
development of low-income single family housing.
Ronco Enterprises also provides counseling to individuals on how to qualify for a mortgage loan and
provides assistance in avoiding default.
Texas State Bank participates in governmentally
guaranteed lending programs, such as those of the
Small Business Administration ( " S B A " ) , and has
taken steps to b e c o m e a certified S B A lender. The
bank has made seven S B A guaranteed loans totalling
$783,000 from N o v e m b e r 1990 through July 1991, and
is active in providing funds for minority businesses.
According to the Protestant McAllen Minority Business Development Center, Texas State Bank has been
involved with this organization during the past year
and a half in providing funding for minority business
enterprises.
In light of Protestants' allegations regarding Mid
Valley Bank's inadequate efforts to assist in meeting
the credit needs of the Hispanic community, the
Reserve Bank conducted an on-site review over a
ten-day period in N o v e m b e r 1991. 9 The results of this
9. This review was conducted in connection with the proposed
merger of Mid Valley Bank into Texas State Bank.
291
review were provided to the Protestants and one
Protestant submitted comments regarding the findings
of this review. The Board has carefully reviewed the
results of this review and comments relating to its
conclusions.
Mid Valley Bank has taken several steps to ensure
that its CRA performance includes meeting the credit
needs of the Hispanic community. For example, a
substantial portion of Mid Valley Bank's staff, including loan officers, speak Spanish, and Mid Valley Bank
is in the process of translating all of its credit applications into Spanish. 1 0 Moreover, Mid Valley Bank's
A T M machine has been programmed to permit customers to conduct transactions in either Spanish or
English. The bank's CRA notices and Statement are
also available in Spanish.
Mid Valley Bank's business development and officer
call programs include Hispanic businesses, and Hispanic borrowers constitute approximately 53 percent
of Mid Valley Bank's total commercial loans, representing approximately 37 percent of the total dollar
amount of the bank's commercial loan portfolio. 1 1
Moreover, approximately 80 percent of Mid Valley
Bank's total installment loans, representing approximately 65 percent of the dollar amount of the bank's
total installment loans, were made to Hispanic individuals or Hispanic-owned businesses. Mid Valley Bank
also participates in organizations supporting community development activities, including the Weslaco
Development Committee, Leadership Mid Valley,
Better Business Bureau, and Weslaco Tomorrow
Commission, and has invested in 22 separate issues of
revenue and general obligation bonds from municipalities located in the bank's community.
Protestants have generally alleged that loan applications from Hispanics are subjected to delays in processing at Mid Valley Bank. Illegal credit practices,
such as unequal treatment of loan applicants solely on
the basis of ethnic background, are prohibited under
the Equal Credit Opportunity Act (15 U . S . C . § 1601
et seq.). Mid Valley Bank's most recent CRA performance examination found no evidence of illegal discrimination or other illegal credit practices. In addition, the Reserve Bank's review found no evidence of
Mid Valley Bank's failure to comply with the Equal
10. Protestants state that more Hispanics should be employed or
serve in decision-making positions. While the Board fully supports
affirmative programs designed to promote equal opportunity in every
aspect of a bank's personnel policies and practices in the employment,
development, advancement, and treatment of employees and applicants for employment, the Board believes that the bank's general
personnel practices are beyond the scope of factors that may be
assessed under the CRA.
11. These percentages exclude loans purchased from other banks
and loans extended to municipalities.
292
Federal Reserve Bulletin • April 1992
Credit Opportunity A c t or the Board's implementing
regulation, Regulation B.
The Board n o t e s that, although Mid Valley B a n k ' s
C R A performance is satisfactory, the R e s e r v e B a n k ' s
r e v i e w indicated that the bank could improve the
documentation of its ascertainment and marketing
efforts, to include h o w t h e s e efforts identify specific
credit n e e d s in the c o m m u n i t i e s served by Mid Valley
Bank. T e x a s State Bank has proposed a program to
address t h e s e areas o f w e a k n e s s , and the Board exp e c t s T e x a s State Bank to put this program in place as
s o o n as possible. T h e Board will review T e x a s Regional's progress in improving ascertainment and marketing efforts in future applications.
On the basis o f these and other facts of record,
including the satisfactory C R A performance records of
T e x a s State Bank and Mid Valley Bank, the Board
c o n c l u d e s that considerations relating to the c o n v e nience and n e e d s of the communities to be served are
consistent with approval of these applications.
T e x a s State Bank has also applied under section 9 of
the Federal R e s e r v e A c t (12 U . S . C . § 322) to establish
a branch at the location of Mid Valley Bank in
W e s l a c o , T e x a s ; a branch at the location of Harlingen
State Bank in Harlingen, T e x a s ; and an A T M at an
additional location in Harlingen, T e x a s . T h e Board has
considered the factors it is required to consider w h e n
reviewing applications for establishing branches and
finds t h o s e factors to b e consistent with approval.
B a s e d o n the foregoing and other facts of record, the
Board has determined that the applications under the
B H C A c t , the Bank Merger A c t , and the Federal
R e s e r v e A c t should b e , and hereby are, approved. The
Board's approval is e x p r e s s l y conditioned upon compliance with all of the c o m m i t m e n t s made by T e x a s
Regional in c o n n e c t i o n with these applications. Further, t h e s e c o m m i t m e n t s and conditions referred to in
this Order are conditions imposed in writing by the
Board in c o n n e c t i o n with its findings and decision and
m a y b e enforced in proceedings under applicable law.
T h e proposed acquisitions shall not be c o n s u m m a t e d
before the thirtieth calendar day following the effective
date of this Order, or later than three m o n t h s following
the effective date of this Order, unless such period is
e x t e n d e d for g o o d c a u s e by the Board or by the
Federal R e s e r v e Bank of Dallas, acting pursuant to
delegated authority.
B y order of the Board of Governors,
February 24, 1992.
effective
Voting for this action: Chairman Greenspan and Governors
Mullins, Angell, LaWare, Lindsey, and Phillips. Absent and
not voting: Governor Kelley.
Associate
JENNIFER J . JOHNSON
Secretary of the Board
Orders Issued Under Section 4 of the Bank
Holding Company Act
Australia and New Zealand Banking Group
Limited
Melbourne, Australia
Order Approving
Application
to Provide
Investment
Advisory and Securities Brokerage
Services on a
Combined Basis, to Provide Certain
Financial
Advisory Services, and to Arrange as Agent the
Purchase and Sale of Loans and Other
Extensions
of Credit
Australia and N e w Zealand Banking Group Limited,
Melbourne, Australia, ( " A p p l i c a n t " ) , a foreign bank
subject to the provisions of the Bank Holding Company A c t (the " B H C A c t " ) , has applied, pursuant t o
section 4(c)(8)
of the
BHC
Act
(12 U . S . C .
§ 1843(c)(8)), to engage, through its indirect w h o l l y
o w n e d subsidiary, A N Z M c C a u g h a n Securities ( U S A )
Inc., N e w York, N e w York ( " C o m p a n y " ) , in the
following activities:
(1) providing i n v e s t m e n t advisory services and securities brokerage s e r v i c e s o n a c o m b i n e d basis
("full-service brokerage") t o institutional customers; 1
(2) providing corporate finance advisory services to
institutional c u s t o m e r s by:
(a) acting as a financial advisor either o n a retainer
or s u c c e s s f e e basis, including a d v i c e with respect
to structuring, financing, and negotiating d o m e s t i c
and international mergers and acquisitions, joint
ventures, divestitures, capital-raising v e h i c l e s , interest rate s w a p s , interest rate c a p s , interest rate
collars, currency s w a p s , similar hedging d e v i c e s ,
and other corporate transactions, and providing
1. Australia and N e w Zealand defines an institutional customer as:
(1) banks (acting in an individual or fiduciary capacity); savings
banks or savings and loan associations; insurance companies;
investment companies registered under the Investment Company
Act of 1940; or corporations, partnerships, proprietorships, organizations or institutional entities that regularly invest in the types of
securities as to which investment advice is provided or that regularly engage in transactions in securities;
(2) employee benefit plans with assets exceeding $1,000,000 or
whose investment decisions are made by a bank, insurance company or investment advisor registered under the Investment Advisors Act of 1940;
(3) natural persons whose individual net worth (or joint net worth
with his or her spouse) at the time of receipt of the investment
advice or brokerage services exceeds $1,000,000;
(4) broker-dealers or options traders registered under the Securities
Exchange Act of 1934, or other securities, investment, or banking
professionals; or
(5) an entity all of the equity owners of which are institutional
customers.
Legal Developments
ancillary services or functions incidental to the
foregoing activities;
(b) performing feasibility studies, principally in
the context of determining the financial attractiveness and feasibility of particular corporate transactions;
(c) providing valuation services; and
(d) rendering fairness opinions in connection with
corporate transactions; and
(3) arranging as agent the purchase and sale of loans
or other extensions of credit originated by affiliated
and unaffiliated lenders.
Notice of the application, affording interested persons an opportunity to submit comments, has been
duly published (56 Federal Register 67,621 (1991)).
The time for filing comments has expired, and the
Board has considered the application and all comments received in light of the factors set forth in
section 4(c)(8) of the B H C Act.
Applicant is the 89th largest banking organization
worldwide and the second largest banking organization in Australia, controlling consolidated assets
equivalent to approximately $78.4 billion. 2 Applicant
operates branches in N e w York and Chicago, and
agencies in L o s Angeles and Houston.
Applicant currently provides, through Company's
offices in N e w York, certain brokerage, advisory, and
loan marketing services as incidental to Applicant's
activities outside the United States pursuant to the
Board's Regulation K. Company is registered as a
broker-dealer with the Securities Exchange Commission under the Securities Exchange Act of 1934 ("Exchange A c t " ) and is registered as a broker-dealer in
various states. Company is subject to the recordkeeping, reporting, fiduciary standards, and other requirements of the Exchange Act and the National
Association of Securities Dealers.
The Board has previously determined by order that
the proposed full-service brokerage activities are
closely related to banking and permissible for bank
holding companies under section 4(c)(8) of the B H C
Act. 3 Applicant proposes that Company will conduct
full-service brokerage in accordance with all of the
requirements established by the Board in its orders
concerning these activities. 4
2. Asset data are as of September 30, 1991. Ranking data are as of
December 31, 1990.
3. See Banc One Corporation, 76 Federal Reserve Bulletin 756
(1990); The Bank of Tokyo, Ltd., 76 Federal Reserve Bulletin 654
(1990); Norwest Corporation, 76 Federal Reserve Bulletin 79 (1990);
Bank of New England Corporation, 74 Federal Reserve Bulletin 700
(1988); Bankers Trust New York Company, 74 Federal
Reserve
Bulletin 695 (1988).
4. Id.
293
The Board has also determined by order that the
proposed financial advisory services are closely related
to banking and permissible for bank holding companies
under section 4(c)(8) of the B H C Act. 5 Applicant proposes that Company will engage in financial advisory
activities in accordance with all of the conditions set
forth in the Board's orders concerning these activities. 6
In addition, the Board has previously determined
that arranging for the purchase and sale of loans or
other extensions of credit originated by affiliated and
unaffiliated lenders as agent is encompassed within the
authorization of section 225.25(b)(1) of the Board's
Regulation Y, 12 C.F.R. 225.25(b)(1). 7
In order to approve this proposal, the Board is
required to determine that the performance of the
proposed activities "can reasonably be expected to
produce benefits to the public . . . that outweigh the
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).
Consummation of the proposal would provide added
convenience to Applicant's customers. In addition, the
Board expects that the de novo entry of Applicant into
the market for the proposed services in which it does
not currently engage in the United States 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 adverse effects,
such as undue concentration of resources, decreased or
unfair competition, conflicts of interests, or unsound
banking practices. The financial and managerial resources of Applicant are consistent with approval.
Accordingly, based upon the facts of record and the
5. See, e.g., The Dai-Ichi Kangyo Bank Limited, 11 Federal
Reserve Bulletin 184 (1991); First Regional Bancorp, Inc., 76 Federal
Reserve Bulletin 859 (1990),Creditanstalt-Bankverein,
76 Federal Reserve Bulletin 761 (1990);77ie Fuji Bank, Limited, 75 Federal Reserve
Bulletin 577 (1989).
6. Id. For example, Applicant has committed that:
(1) Company's financial advisory activities will not encompass the
performance of routine tasks or operations for a client on a daily or
continuous basis;
(2) Disclosure will be made to each potential client of Company that
Company is an affiliate of Applicant;
(3) Advice rendered by Company on an explicit fee basis will be
without regard to correspondent balances maintained by a client of
Company at Applicant or any of Applicant's depository subsidiaries
or U.S. branches or agencies; and
(4) Company will not make available to Applicant or any of
Applicant's subsidiaries confidential information received from
Company's clients, except with the client's consent.
7. See The Toronto-Dominion Bank, 76 Federal Reserve Bulletin
573 (1990); Bryn Mawr Bank Corporation, 74 Federal Reserve Bulletin
329 (1988). See also Sovran Financial Corporation, 73 Federal Reserve Bulletin 939 (1987); Post-och Kreditbanken,
PKbanken,
68
Federal Reserve Bulletin 787 (1982); Societe Generate, 67 Federal
Reserve Bulletin 453 (1981).
294
Federal Reserve Bulletin • April 1992
commitments made by Applicant regarding the conduct
of the proposed activities, the Board has determined
that performance of these activities b y Company can
reasonably be e x p e c t e d to produce benefits t o the
public that would outweigh adverse effects under the
proper incident to banking standard of section 4(c)(8) of
the B H C Act.
B a s e d o n the foregoing and other facts of record, as
well as the commitments made by Applicant, the Board
has determined to, and hereby d o e s , approve this
application, subject to all of the terms and conditions
set forth a b o v e and in the above-noted Board orders.
The Board's determination is also subject to all of
the conditions set forth in Regulation Y , including
t h o s e 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 c o m p a n y or any
of its subsidiaries as the Board finds n e c e s s a r y to
assure c o m p l i a n c e with, and to prevent e v a s i o n of, the
provisions of the B H C A c t and the Board's regulations
and orders issued thereunder. The Board's decision is
specifically conditioned on continued compliance with
all of the c o m m i t m e n t s made in this application, including the c o m m i t m e n t s discussed in this Order and
the conditions set forth in the above-noted Board
orders. T h e s e c o m m i t m e n t s are conditions i m p o s e d in
writing by the Board in connection with its findings
and d e c i s i o n s , and m a y be enforced in proceedings
under applicable law.
This transaction shall not be c o n s u m m a t e d later
than three m o n t h s after the effective date of this order,
unless such period is e x t e n d e d for g o o d c a u s e by the
Board or by the Federal R e s e r v e Bank, of San Franc i s c o , acting pursuant t o delegated authority.
B y order of the Board of Governors, effective
February 11, 1992.
Voting for this action: Chairman Greenspan and Governors
Angell, Kelley, LaWare, Lindsey, and Phillips. Absent and
not voting: Governor Mullins.
Associate
JENNIFER J . JOHNSON
Secretary of the Board
PNC Financial Corp
Pittsburgh, Pennsylvania
Order Approving
Application
to Act as Agent in the
Private Placement
of Securities,
and to Act as
"Riskless Principal"
in Buying and Selling
Securities
P N C Financial Corp, Pittsburgh,
Pennsylvania
( " P N C " ) , a bank holding c o m p a n y within the meaning
of the Bank Holding C o m p a n y A c t ( " B H C A c t " ) , has
applied under section 4(c)(8) of the B H C A c t
(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)) for its
wholly o w n e d subsidiary, P N C Securities Corp, Pittsburgh, Pennsylvania ( " C o m p a n y " ) , t o act as agent in
the private placement of all t y p e s of securities, including providing related advisory s e r v i c e s , and to buy and
sell all types of securities on the order o f investors as
a "riskless principal."
N o t i c e of the application, affording interested pers o n s an opportunity to submit c o m m e n t s , has b e e n
duly published (56 Federal Register
26,820 (1991)).
The time for filing c o m m e n t s has expired, and the
Board has considered the application and all c o m ments received in light of the public interest factors set
forth in section 4(c)(8) of the B H C A c t .
P N C , with approximately $44.3 billion in total consolidated assets, is the s e c o n d largest commercial
banking organization in Pennsylvania. 1 P N C operates
26 subsidiary banks and engages directly and through
its subsidiaries in a broad range of permissible nonbanking activities in the U n i t e d States.
Company is currently authorized to engage in underwriting and dealing in commercial paper, municipal
revenue bonds, certain mortgage-related securities,
and consumer-receivable-related securities. C o m p a n y
also is authorized to engage in underwriting and dealing in government obligations and m o n e y market instruments, pursuant to 12 C . F . R . 225.25(b)(16), and in
providing investment advisory and brokerage s e r v i c e s
on a combined basis to retail and institutional customers. Company is, and will continue to be, a brokerdealer registered with the Securities and E x c h a n g e
C o m m i s s i o n and subject to the record-keeping, reporting, fiduciary standards, and other requirements of the
Securities E x c h a n g e A c t of 1934 and the National
A s s o c i a t i o n of Securities Dealers.
Private placement i n v o l v e s the placement o f n e w
i s s u e s of securities with a limited number of sophisticated purchasers in a nonpublic offering. A financial
intermediary in a private placement transaction acts
solely as an agent of the issuer in soliciting purchasers,
and d o e s not purchase the securities and attempt to
resell them. Securities that are privately placed are not
subject to the registration requirements o f the Securities A c t of 1933, and are offered only t o financially
sophisticated institutions and individuals and not the
public. P N C will not privately place registered securities and will only place securities with c u s t o m e r s w h o
qualify as accredited investors.
1. Asset data are as of March 31, 1991. Ranking, based on deposits,
is as of December 31, 1990.
Legal Developments
"Riskless principal" is the term used in the securities business to refer to a transaction in which a
broker-dealer, after receiving an order to buy (or sell)
a security from a customer, purchases (or sells) the
security for its o w n account to offset a contemporaneous sale to (or purchase from) the customer. 2 "Riskless principal" transactions are understood in the
industry to include only transactions in the secondary
market. Thus, P N C proposes that Company would not
act as a "riskless principal" in selling securities at the
order of a customer that is the issuer of the securities
to be sold or in any transaction where Company has a
contractual agreement to place the securities as agent
of the issuer. Company also would not act as a
"riskless principal" in any transaction involving a
security for which it makes a market.
The Board has previously determined by order that,
subject to certain prudential limitations that address the
potential for conflicts of interests, unsound banking
practices or other adverse effects, the proposed private
placement and "riskless principal" activities are so
closely related to banking as to be a proper incident
thereto within the meaning of section 4(c)(8) of the
B H C Act. 3 The Board also has previously determined
that acting as agent in the private placement of securities, and purchasing and selling securities on the order
of investors as a "riskless principal" do not constitute
underwriting and dealing in securities for purposes of
section 20 of the Glass-Steagall Act, and that revenue
derived from these activities is not subject to the 10
percent revenue limitation on ineligible securities underwriting and dealing. 4 P N C has committed that Company will conduct its private placement and "riskless
principal" activities using the same methods and procedures, and subject to the same prudential limitations
established by the Board in the Bankers Trust and J.P.
Morgan orders, 5 including the comprehensive frame-
2. See Securities and Exchange Commission Rule 10b-10.
17 C. F. R.240.1Ob-10(a)(8)(i).
3. Bankers Trust New York Corporation,
75 Federal
Reserve
Bulletin 829 (1989) ("Bankers Trust").
4. J.P. Morgan and Company, Inc., 76 Federal Reserve Bulletin 26
(1990) C'J.P. Morgan"); Bankers Trust.
5. As detailed more fully in those orders, in addition to the
commitments imposed by the Board in connection with underwriting
and dealing in securities, PNC has committed that Company will
maintain specific records that will clearly identify all "riskless principal" transactions, and Company will not engage in any "riskless
principal" transactions for any securities carried in its inventory.
When acting as a "riskless principal", Company will only engage in
transactions in the secondary market, and not at the order of a
customer that is the issuer of the securities to be sold, will not act as
"riskless principal" in any transaction involving a security for which
it makes a market, nor hold itself out as making a market in the
securities that it buys and sells as a "riskless principal." Moreover,
Company will not engage in "riskless principal" transactions on
behalf of its foreign affiliates that engage in securities dealing activities
outside the United States and will not act as "riskless principal" for
registered investment company securities. In addition, Company will
295
work of restrictions designed to avoid potential conflicts of interest, unsound banking practices and other
adverse effects imposed by the Board in connection
with underwriting and dealing in securities. 6
In every case involving a nonbanking acquisition by
a bank holding company under section 4 of the B H C
Act, the Board considers the financial condition and
resources of the applicant and its subsidiaries and the
effect of the transaction on these resources. 7 Based on
the facts of this case, the Board concludes that financial considerations are consistent with approval of this
application. The managerial resources of P N C also are
consistent with approval.
In order to approve this application, the Board is
required to determine that the performance of the
proposed activities by P N C 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 B H C Act. Under the
framework established in this and prior decisions, consummation of this proposal is not likely to result in any
significantly adverse effects, such as undue concentration of resources, decreased or unfair competition,
conflicts of interests, or unsound banking practices.
Consummation of the proposal would provide added
convenience to Company's customers. In addition, the
Board expects that the de novo entry of Company into
the market for these services would increase the level
of competition among providers of these services. Accordingly, the Board has determined that the performance of the proposed activities by Company 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
B H C Act.
not act as a "riskless principal" with respect to any securities of
investment companies that are advised by PNC or any of its affiliates.
With regard to private placement activities, PNC has committed that
Company will not privately place registered investment company
securities. Further, Company will not privately place any securities of
investment companies that are advised by PNC or any of its affiliates.
6. See First Union Corporation, 75 Federal Reserve Bulletin 645
(1989). The Board modified this framework of restrictions for "riskless principal" and private placement activities in Bankers Trust and
J.P. Morgan, and PNC has committed to conduct its private placement activities and likewise has agreed to conduct its "riskless
principal" activities subject to this modified framework of restrictions. See First Union Corporation, 76 Federal Reserve Bulletin 174
(1990). These modifications relate to extensions of credit to an issuer
of securities for which Company would act as "riskless principal,"
purchases by affiliates of securities for which Company would act as
"riskless principal," acting as a "riskless principal" for sophisticated
institutions purchasing or selling unrated securities of Company's
affiliates, and including "riskless principal" transactions in Company's policies limiting overall exposure to a single customer whose
securities are underwritten by Company.
7. 12 C.F.R. 225.24; The Fuji Bank, Limited, 75 Federal
Reserve
Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Federal
Reserve
Bulletin 155, 156 (1987).
296
Federal Reserve Bulletin • April 1992
B a s e d o n all the facts of record, and subject to the
c o m m i t m e n t s made b y P N C , as well as all of the terms
and conditions set forth in this order and in the
a b o v e - n o t e d Board orders, the Board has determined
that the application should b e , and hereby is, approved. Approval o f this proposal is specifically conditioned o n c o m p l i a n c e by P N C and Company with
the c o m m i t m e n t s made in connection with its application, as supplemented, and with the conditions refere n c e d in this order. The Board's determination also is
subject to all of the conditions set forth in Regulation
Y , including t h o s e in s e c t i o n 225.4(d) and 225.23(b),
and to the Board's authority t o require modification or
termination of the activities of a bank holding c o m pany or any of its subsidiaries as the Board finds
necessary to assure c o m p l i a n c e with, and to prevent
e v a s i o n of, the provisions of the B H C A c t and the
Board's regulations and orders issued thereunder. The
c o m m i t m e n t s and conditions relied on in reaching this
d e c i s i o n are conditions imposed in writing by the
Board in c o n n e c t i o n with its findings and decision and
m a y be enforced in proceedings under applicable law.
This transaction shall not be c o n s u m m a t e d later
than three m o n t h s after the effective date of this
Order, unless such period is extended for g o o d cause
by the Board or by the Federal R e s e r v e Bank of
Cleveland, pursuant to delegated authority.
B y order of the Board of Governors, effective
February 18, 1992.
Voting for this action: Chairman Greenspan and Governors
Mullins, Angell, Kelley, Lindsey, and Phillips. Absent and
not voting: Governor La Ware.
Associate
JENNIFER J . JOHNSON
Secretary of the Board
Stichting Prioriteit ABN AMRO Holding
Stichting Administratiekantoor ABN AMRO
Holding
ABN AMRO Holding N.V.
ABN AMRO Bank, N.V.
all of Amsterdam, The Netherlands
ABN AMRO North America, Inc.
Chicago, Illinois
Order Approving
Association
Application
to Acquire
a
Savings
Stichting Prioriteit A B N A M R O Holding, Stichting
Administratiekantoor A B N A M R O Holding, and A B N
A M R O Holding N . V . , all of A m s t e r d a m , The Netherlands, foreign banking organizations subject to the
Bank Holding C o m p a n y A c t ( " B H C A c t " ) ; and A B N
A M R O Bank, N . V . , A m s t e r d a m , T h e Netherlands,
and A B N A M R O N o r t h A m e r i c a , I n c . , Chicago, Illinois, bank holding c o m p a n i e s within the meaning of
the B H C A c t (collectively, " A p p l i c a n t " ) , h a v e applied under section 4(c)(8) of the B H C A c t (12 U . S . C .
§ 1843(c)(8)) and section 225.23 of the Board's Regulation Y (12 C . F . R . 225.23), t o acquire T h e Talman
H o m e Federal Savings and L o a n A s s o c i a t i o n of Illinois, Chicago, Illinois ( " T a l m a n " ) . Talman will be
acquired through a purchase of a s s e t s and assumption
of liabilities transaction with LaSalle Talman Bank,
F . S . B . , Chicago, Illinois ( " L a S a l l e T a l m a n " ) , a n e w l y
chartered federal stock savings bank to be o w n e d by
Applicant's United States subsidiary, A B N A M R O
North America. Talman and LaSalle Talman will be
o w n e d by Applicants in a c c o r d a n c e with section
225.25(b)(9) of the Board's Regulation Y (12 C . F . R .
225.25(b)(9)). 1
N o t i c e of the application, affording interested pers o n s an opportunity to submit c o m m e n t s , has b e e n
published (56 Federal Register
51 Ml
(1991)). The
time for filing c o m m e n t s has expired, and the Board
has considered the application and all c o m m e n t s rec e i v e d in light of the public interest factors set forth in
section 4(c)(8) of the B H C A c t . 2
The Board has determined that the operation of a
savings association is c l o s e l y related to banking and
permissible for bank holding c o m p a n i e s . 12 C . F . R .
225.25(b)(9). In making this determination, the Board
1. Applicant also has applied to acquire the following nonbanking
subsidiaries of Talman: Talman Home Mortgage Corporation, Norridge, Illinois, and thereby engage in the origination and servicing of
residential mortgage loans pursuant to 12 C.F.R. 225.25(b)(1); and
Talman Insurance Services, Inc., Chicago, Illinois ("TISI"), and
thereby engage in credit-related insurance agency activities pursuant
to 12 C.F.R. 225.25(b)(8)(i). Applicant also has applied to engage in
securities brokerage activities pursuant to 12 C.F.R. 225.25(b)(15),
through a lease agreement with G N A Securities; and to retain Talman's investment in the Savings and Loan Network, Inc., Chicago,
Illinois, and thereby engage in community development activities
pursuant to 12 C.F.R. 225.25(b)(6).
2. The Board has received comments from the National Training
Institute and Information Center ("NTIIC") and the Woodstock
Institute, both of Chicago, Illinois, stating that the public benefits of
permitting Applicant to acquire Talman weigh for approval of this case
and outweigh potential adverse effects from the proposal. NTIIC has
endorsed the lending record of Talman, as well as its participation in
special loan programs, and the Woodstock Institute has endorsed
Talman's home mortgage lending record in the community. The Board
also has received comments from several members of Congress in
favor of the proposal. In addition, another member of Congress
requests that the Board thoroughly review the CRA aspects of the
proposal and not diminish the weight given to the CRA in reviewing
this case. The Board also has received comments filed by a customer
of LaSalle Bank, alleging that interest on his home equity line of credit
was incorrectly calculated. These allegations are under review by the
Office of the Comptroller of the Currency ("OCC"), LaSalle Bank's
primary regulator.
Legal Developments
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 B H C Act. 3 In this
regard, the Board has previously determined that the
mortgage lending, credit-related insurance agency,
discount brokerage and community development activities of Talman's nonbanking subsidiaries are permissible activities for bank holding companies. In
addition, Applicant has committed to conform all
activities of LaSalle Talman to the requirements of
section 4 of the B H C Act and Regulation Y . 4
In reviewing proposals under section 4(c)(8) of the
B H C Act, the Board is required to determine that the
ownership and operation of the acquired company by
the applicant "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 interests, or unsound banking
practices." 12 U . S . C . § 1843(c)(8).
3. Applicant commits that should Talman engage in any activities
that are impermissible for bank holding companies under section
4(c)(8) of the BHC Act, these activities will be divested as follows:
(1) any impermissible securities activities conducted by Talman
or its subsidiaries will cease on or before consummation; and
(2) any impermissible real estate investments will be divested
within two years of consummation of the proposal, no new
impermissible projects or investments will be undertaken during
this period, and capital adequacy guidelines will be met excluding
specified real estate investments.
Talman, through a joint venture, owns 10 percent of the stock of the
Bank for Financial Institutions, Chicago, Illinois ("BFI"), a bank
chartered under Illinois law to provide banking services to financial
institutions. Applicant has committed to divest its interest in BFI as
soon as possible following consummation of this transaction and, in
any event, within one year from the date of consummation of this
transaction.
4. TISI also engages in the sale as agent of insurance products in
Illinois under the Home Owners' Loan Act. These activities are not
permissible for bank holding companies under section 4(c)(8) of the
BHC Act. These insurance agency activities include the sale of
credit-related insurance on extensions of credit made by non-affiliated
lenders, and the sale of homeowners, life, health, automobile, accident, property and casualty, surety coverage and professional liability
coverage. Section 461 of the Federal Deposit Insurance Corporation
Improvement Act of 1991, Pub. L. No. 102-242, § 461; 105 Stat. 2236
(1991), permits a Qualified Savings Association chartered in December 1986 and acquired without federal financial assistance by a bank
holding company before March 1, 1992, to continue to engage in
insurance agency activities in its home state if the savings association
was continuously engaged in such activity from June 1, 1991, to the
date of acquisition. On the basis of the record on this application, the
Board concludes that this provision would permit LaSalle Talman to
continue TISI's insurance agency activities in Illinois following its
acquisition by LaSalle National Corporation ("LNC") for so long as
LaSalle Talman is operated as a Qualified Savings Association.
Applicant has committed that in the event Talman ceases to be a
Qualified Savings Association, Applicant will cease or divest immediately all impermissible insurance activities, and will conduct its
insurance activities in accordance with the BHC Act and the Board's
Regulation Y.
297
Applicant is the largest banking institution in The
Netherlands, and is the sixth largest banking institution in Europe. A B N A M R O North America, a wholly
owned subsidiary of A B N A M R O Bank, N . V . , has
consolidated assets of $8.6 billion. Applicant also
operates European American Bank, Uniondale, N e w
York, and numerous agencies, branches, and representative offices in Atlanta, Boston, Chicago, Houston, Los Angeles, San Francisco, Miami, N e w York,
Pittsburgh, and Seattle.
A B N AMRO North America operates s e v e n bank
subsidiaries in Illinois through LaSalle National Corporation ( " L N C " ) . L N C is the fourth largest banking
organization in Illinois, controlling approximately $5.3
billion in commercial bank deposits in Illinois, representing 4 percent of the total deposits in commercial
banking organizations in the state. 5 Talman is the
largest savings association in Illinois, controlling approximately $4.1 billion in deposits. U p o n consummation of the proposed acquisition, L N C would become
the third largest commercial banking organization in
Illinois, controlling approximately $9.4 billion in deposits in Illinois.
L N C and Talman compete directly in the Chicago,
Illinois banking market. 6 L N C is the fourth largest
depository organization in this market, controlling
$5.3 billion in deposits, representing approximately 4.9
percent of the deposits held by banks and savings
associations operating in the market ("market deposits"). 7 Talman is the seventh largest depository institution in the Chicago banking market, controlling $3.9
billion in deposits, representing approximately 1.8
percent of market deposits. U p o n consummation of
this proposal, Applicant would b e c o m e the third largest depository organization in the market, controlling
$9.2 billion in deposits, representing approximately 6.7
percent of market deposits. The
HerfindahlHirschman Index ( " H H I " ) would increase by 23
points to 609, and the banking market would remain
unconcentrated. 8
5. State deposit data are as of June 30, 1990.
6. The Chicago, Illinois banking market is approximated by Cook,
DuPage, and Lake Counties, all in Illinois.
7. Market share data are as of June 30,1990. The pre-merger market
deposit data are based on calculations in which the deposits of Talman
and all other thrifts are included at 50 percent. Upon consummation of
the proposal, LaSalle Talman would be affiliated with a commercial
banking organization. Therefore, on a pro forma basis, the deposits of
LaSalle Talman are included at 100 percent, while the deposits of
other savings associations continue to be included at 50 percent.
8. Under the revised Department of Justice Merger Guidelines, 49
Federal Register 26,823 (1984), a market in which the post-merger
HHI is less than 1000 is considered unconcentrated. Generally, the
Department of Justice will not challenge a bank merger (in the absence
of other factors indicating anticompetitive effects) if the post-merger
HHI is less than 1800.
298
Federal Reserve Bulletin • April 1992
On the basis of all the facts of record, the Board
concludes that consummation of the proposed acquisition would not have a significantly adverse effect on
competition in any banking market. The Board also
notes that the markets for the nonbanking activities
in which both L N C and Talman compete are served
by numerous competitors, and the share of the
market controlled by L N C and Talman is small in
each case. Accordingly, the Board concludes that
consummation of this proposal would not have a
significantly adverse effect on competition in the
provision of these services in any relevant market.
The record d o e s not indicate that this proposal is
likely to result in any other significantly adverse
effects, such as undue concentration of resources,
decreased or unfair competition, conflicts of interests, or unsound banking practices.
The Board also has taken into account the financial
condition of Talman, and Applicant's proposal to
provide substantial n e w capital to Talman. Talman
has recently experienced significant financial difficulties, and has reported negative net worth. The Office
of Thrift Supervision ( " O T S " ) has informed the
Board that Talman has incurred l o s s e s that have
depleted substantially all of its capital and that
Talman is an institution "in danger of default." A s
part of this transaction, Applicant has committed to
provide substantial capital resources to Talman sufficient to restore Talman's capital levels above the
regulatory minimum levels.
The Board previously has determined that the
performance record under the Community Reinvestment A c t (12 U . S . C . § 2901 et seq.) ( " C R A " ) of
banks o w n e d by an applicant must be considered in
the analysis of the public benefits of any proposal to
acquire a savings association. In this regard, the
Board has considered that t w o of L N C ' s subsidiary
banks, LaSalle National Bank, Chicago, Illinois
("LaSalle B a n k " ) , and the LaSalle Bank, Matteson,
Matteson, Illinois ( " M a t t e s o n Bank"), have not received satisfactory ratings in the most recent examination of their performance under the C R A . 9 The
C R A performance records of all the remaining L N C
subsidiary banks are currently rated satisfactory by
the banks' primary regulators, and have been rated
satisfactory for at least t w o preceding examinations.
LaSalle Bank and Matteson Bank also received sat-
9. LaSalle Bank, LNC's lead bank, received a "needs to improve"
CRA performance rating from the OCC in a CRA performance
examination in December 1991 (the "December 1991 examination").
Matteson Bank, which comprises approximately 2.6 percent of LNC
total consolidated assets, received a less than satisfactory rating from
the Federal Deposit Insurance Corporation ("FDIC") in April 1990.
isfactory C R A performance ratings from their primary regulators in their t w o preceding examinations.
Applicant has committed to take a number of steps
at LaSalle Bank to address the concerns raised in the
December 1991 examination. 1 0 The OCC has informed
the Board that these steps, w h e n fully implemented,
will satisfactorily address the CRA weaknesses at
LaSalle, and that LaSalle Bank has been responsive in
correcting weaknesses identified in previous examinations. In the case of Matteson Bank, substantial steps
have already been taken to address the criticisms
noted in the FDIC's examination. 1 1
The Board has also taken into account as a significant mitigating factor the fact that this proposal
would serve the c o n v e n i e n c e and needs of the community by maintaining Talman and its s u c c e s s o r s as
an active lender in its market. The financial support
provided to Talman under this proposal will enable
LaSalle Talman, without federal assistance, to continue to provide credit opportunities and banking
services to its local communities, including low- and
moderate-income neighborhoods.
On the basis of these and all of the other facts of
record, including a review of the C R A performance
record of Applicant, the Board finds that the public
benefits that would result from this transaction are
substantial and outweigh the possible adverse effects. Accordingly, based upon consideration of all
the facts in this case, the Board has determined that
the balance of the public interest factors it is required
to consider under section 4(c)(8) of the B H C A c t is
favorable and consistent with approval of the application to acquire Talman. Although the Board d o e s
not generally consider commitments made in the
applications p r o c e s s as adequate to o v e r c o m e a
deficient CRA performance record, the Board and
the other federal banking agencies have indicated in
the Statement of the Federal Financial Supervisory
10. LaSalle Bank received its most recent CRA rating during the
pendency of this application and immediately developed proposals to
address deficiencies identified by the OCC. LaSalle Bank has not had
sufficient time before this application was considered by the Board to
implement all of the steps. LaSalle Bank's proposed corrective
measures include a review of all denials of credit applications received
from low- and moderate-income residents; expansion of the scope of
the bank's audits for compliance with fair lending laws to include an
analysis of the reasons for loan denials as well as monitoring of the
location of the applicants; establishment of a small business lending
unit; and expansion of LaSalle Bank's outreach and marketing efforts.
11. For example, Matteson Bank has significantly improved its
efforts to ascertain the credit needs of its communities through
increased contacts with community groups, public officials, and
consumers in general through mail surveys. Matteson Bank's marketing efforts now include the use of local newspapers and statement
inserts that advertise specific services and products. The geographic
distribution of Matteson Bank's loans are reviewed quarterly by its
CRA committee and data from these reports have served as a basis for
redefining the bank's service area. Matteson Bank has also significantly increased its community development activities.
Legal Developments
A g e n c i e s Regarding the C o m m u n i t y R e i n v e s t m e n t
A c t that c o m m i t m e n t s m a y b e appropriate in addressing C R A p e r f o r m a n c e in certain c i r c u m s t a n c e s ,
including in the c o n t e x t of an acquisition of a troubled financial institution. In this regard, the B o a r d
has directed the Federal R e s e r v e Bank o f C h i c a g o
("Reserve Bank") to monitor Applicant's progress
in i m p l e m e n t i n g the C R A programs and p o l i c i e s
d e s c r i b e d in the application as s u p p l e m e n t e d , and to
report t o the B o a r d o n A p p l i c a n t ' s progress. A s a
c o n d i t i o n o f the B o a r d ' s a c t i o n in this c a s e , Applicant m u s t submit quarterly reports t o the R e s e r v e
B a n k that include a description of the s t e p s it has
taken t o c o m p l y with its representations and c o m m i t m e n t s t o t h e B o a r d , as w e l l as the steps it has
i m p l e m e n t e d to i m p r o v e the C R A p e r f o r m a n c e of the
t w o subsidiary banks.
B a s e d o n all the f a c t s o f record, the Board has
d e t e r m i n e d that the application should be, and
h e r e b y is, a p p r o v e d . T h e B o a r d ' s approval is specifically c o n d i t i o n e d u p o n c o m p l i a n c e with all the c o m m i t m e n t s m a d e b y Applicant in c o n n e c t i o n with this
application, including i m p l e m e n t a t i o n o f the planned
c o r r e c t i v e a c t i o n s at L a S a l l e B a n k , and the conditions i m p o s e d in this Order. This determination is
a l s o subject t o all of the c o n d i t i o n s set forth in the
B o a r d ' s R e g u l a t i o n Y , including s e c t i o n s 225.4(d)
and 225.23, and t o the B o a r d ' s authority t o require
s u c h m o d i f i c a t i o n s or termination o f the activities o f
a bank holding c o m p a n y or any of its subsidiaries as
the B o a r d finds n e c e s s a r y t o assure c o m p l i a n c e with,
or t o p r e v e n t e v a s i o n o f , the p r o v i s i o n s and p u r p o s e s
of the B H C A c t and the B o a r d ' s regulations and
Orders i s s u e d thereunder. All of the c o m m i t m e n t s
and c o n d i t i o n s relied o n b y the Board in reaching its
d e c i s i o n in this c a s e are c o n d i t i o n s i m p o s e d in writing b y the B o a r d in c o n n e c t i o n with its findings and
d e c i s i o n and m a y b e e n f o r c e d in p r o c e e d i n g s under
applicable l a w s .
T h e transaction a p p r o v e d in this Order shall not b e
c o n s u m m a t e d later than three m o n t h s after the e f f e c tive date o f this Order, u n l e s s such period is e x t e n d e d f o r g o o d c a u s e b y the Board or by the Federal
R e s e r v e B a n k of C h i c a g o , pursuant to d e l e g a t e d
authority.
B y order o f the Board of Governors, effective
February 27, 1992.
Voting for this action: Chairman Greenspan and Governors
Mullins, LaWare, and Phillips. Abstaining from this action:
Governors Angell and Lindsey. Absent and not voting:
Governor Kelley.
Associate
JENNIFER J . JOHNSON
Secretary of the Board
299
Orders Issued Under Sections 3 and 4 of the
Bank Holding Company Act
BankAmerica Corporation
San Francisco, California
Nevada First Development Corporation
Las Vegas, Nevada
Order Approving
Acquisition
Company and Banks
of a Bank
Holding
BankAmerica Corporation, San F r a n c i s c o , California
( " B a n k A m e r i c a " ) , and its w h o l l y o w n e d subsidiary,
N e v a d a First D e v e l o p m e n t Corporation, L a s V e g a s ,
N e v a d a ( " N F D C " ) , both bank holding c o m p a n i e s
within the meaning o f the Bank Holding C o m p a n y A c t
( " B H C A c t " ) , h a v e applied under section 3 of the
B H C A c t (12 U . S . C . § 1842) to acquire Valley Capital
Corporation, L a s V e g a s , N e v a d a ( " V a l l e y Capital"),
and thereby acquire Valley Bank of N e v a d a , L a s
V e g a s , N e v a d a , and Caliber Bank, P h o e n i x , Arizona. 1
BankAmerica and N F D C h a v e also applied for the
Board's approval under section 4(c)(8) of the B H C A c t
to acquire the shares of certain nonbanking c o m p a n i e s
o w n e d by Valley Capital that are listed in the Appendix to this order. E a c h of the nonbanking c o m p a n i e s
conducts nonbanking activities that h a v e b e e n authorized by the Board by order or by regulation.
N o t i c e of the applications, affording an opportunity
for interested p e r s o n s to c o m m e n t , has b e e n duly
published (56 Federal Register
51,898 (1991)). The
time for filing c o m m e n t s has expired, and the Board
has considered the application and all c o m m e n t s rec e i v e d in light of the factors set forth in sections 3 and
4 of the B H C Act.2
Interstate
Banking
Provisions
Section 3(d) of the B H C A c t , the D o u g l a s A m e n d ment, prohibits the Board f r o m approving an application by a bank holding c o m p a n y to acquire control of
any bank located outside of the bank holding c o m pany's h o m e state, unless such acquisition is " s p e c i f ically authorized b y the statute l a w s of the State in
which [the] bank is located, b y language to that effect
1. The proposed transaction would be effected through the merger
of Valley Capital with and into NFDC. BankAmerica has also applied
to acquire an option that gives BankAmerica the right to acquire up to
14.9 percent of Valley Capital's common stock upon the occurrence of
certain triggering events defined in the Plan and Agreement of Merger
between BankAmerica and Valley Capital. The option will expire
upon consummation of the proposed acquisition.
2. With the exception of a report from the U.S. Department of
Justice, the Board received no comments on this application.
300
Federal Reserve Bulletin • April 1992
and not merely by implication." For purposes of the
Douglas Amendment, California is the home state of
BankAmerica. 3 BankAmerica proposes to acquire
Valley Capital's N e v a d a and Arizona bank subsidiaries. The laws of both Arizona and N e v a d a permit
out-of-state bank holding companies, including bank
holding companies located in California, to acquire
established banks located in those states, subject to
the prior approval of the respective state banking
supervisors. 4 Accordingly, Board approval of this proposal is not barred by the Douglas Amendment.
Competitive
Considerations
Nevada
BankAmerica is the third largest commercial banking
organization in the United States and operates banking
subsidiaries in California, Arizona, Idaho, Nevada,
N e w Mexico, Oregon, Texas and Washington. 5
BankAmerica is the fifth largest commercial banking
organization in Nevada, where it controls deposits of
approximately $436.0 million, representing approximately 4.9 percent of the total deposits in commercial
banks in Nevada. Valley Capital is the second largest
commercial banking organization in Nevada, where it
controls deposits of approximately $2.7 billion, representing approximately 29.9 percent of the total deposits in commercial banks in Nevada. Upon consummation, BankAmerica would become the largest
commercial banking organization in Nevada, accounting for approximately 34.8 percent of the total deposits
in commercial banks in the state.
BankAmerica competes directly with Valley Capital
in seven N e v a d a banking markets. 6 In order to miti-
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.
4. Ariz. Rev. Stat. § 6-321 to -323 (1991); Nev. Rev. Stat. Ann.
§ 666.225-305, -315 (Michie 1991). The Board has determined previously that the Douglas Amendment does not bar a California bank
holding company's acquisition of a bank holding company and bank
located in Nevada. BankAmerica Corporation, 75 Federal
Reserve
Bulletin 825 (1989). BankAmerica's application to acquire Valley
Capital's Nevada subsidiary bank is pending before the Nevada
Commissioner of Financial Institutions. The Board's action in this
case is specifically conditioned on BankAmerica's obtaining any
approvals required under Nevada law. By order dated December 4,
1991, the Arizona Superintendent of Banks approved BankAmerica's
application to acquire Valley Capital's Arizona subsidiary bank.
5. State deposit data are as of June 30,1991. Market deposit data are
as of June 30, 1990.
6. These banking markets are: Bullhead City; Carson City; Churchill County; Elko; Humboldt County; Las Vegas; and Reno. 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 to be highly concentrated. In such markets, the Justice
Department is likely to challenge a merger that increases the HHI by
gate the potential anticompetitive effects of the proposed acquisition in these markets, BankAmerica has
committed to divest of all of the operations of BankAmerica Nevada, its N e v a d a bank subsidiary, to a
substantial bank holding company that does not have
significant operations in N e v a d a . 7 After giving effect
to the divestitures proposed in these N e v a d a markets,
the Herfindahl-Hirschman Index ( " H H I " ) and other
measures of concentration would not increase significantly and the number of competitors remaining in any
relevant market would not change. 8
The Bullhead City banking market includes portions
of Arizona, California, and Nevada. BankAmerica
competes with Valley Capital in this market through
BankAmerica Arizona, a bank subsidiary located in
Arizona. In order to mitigate the potentially anticompetitive effect of the proposed transaction in the Bullhead City banking market, BankAmerica has committed to divest a branch in this market. 9 After giving
effect to the proposed divestiture, the H H I and other
measures of concentration would not increase significantly and the number of competitors remaining in this
market would not change. Accordingly, the Board
believes that consummation of the proposal would not
result in a significantly adverse effect on competition
in any banking market in Nevada.
Arizona
BankAmerica is the third largest commercial banking
organization in Arizona, where it controls deposits of
more than 50 points. The Justice Department 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 increases the HHI
by more than 200 points. The Justice Department 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.
7. BankAmerica has committed to execute an agreement for the sale
of BankAmerica Nevada prior to consummation of this proposal.
BankAmerica has committed that, if it is unsuccessful in consummating the divestiture of BankAmerica Nevada within 180 days of
consummation of the proposal to acquire Valley Capital, BankAmerica will transfer all of the shares of BankAmerica Nevada to an
independent trustee with instructions that the trustee sell the bank
promptly. See, e.g., First Hawaiian, Inc., 11 Federal Reserve Bulletin
52, (1991); First Union Corporation, 76 Federal Reserve Bulletin 83
(1990).
8. The Board previously has indicated that thrift institutions have
become, or have the potential to become, significant competitors of
commercial banks. See, e.g., First Union Corporation, 76 Federal
Reserve Bulletin 83 (1990). In considering the competition offered by
thrifts in all banking markets in this case, thrift deposits are weighted
at 50 percent, unless otherwise noted. See, e.g.,Fleet/Norstar
Financial Group, Inc., 11 Federal Reserve Bulletin 751 (1991).
9. The Board will consider BankAmerica's request to defer the
proposed divestiture in the Bullhead City banking market when the
Board reviews the other divestitures proposed by BankAmerica in
Arizona in connection with BankAmerica's application to acquire
Security Pacific Corporation, Los Angeles, California.
Legal Developments
approximately $5.3 billion, representing approximately 17.9 percent of the total deposits in commercial
banks in Arizona. Valley Capital is the 11th largest
commercial banking organization in Arizona, where it
controls deposits of approximately $164.9 million,
representing approximately 0.6 percent of the total
deposits in commercial banks in Arizona. U p o n consummation of the proposal, BankAmerica would remain the third largest commercial banking organization in Arizona, accounting for approximately 18.5
percent of the total deposits in commercial banks in
the state.
BankAmerica c o m p e t e s directly with Valley Capital in one banking market in Arizona through
BankAmerica Arizona. Based on post-consummation concentration levels, market share, and the
number of competitors remaining in the market, the
Board believes that the proposal would not result in
a significantly adverse effect on competition in any
banking market in Arizona. 1 0
Accordingly, based on all the facts of record in this
case, and subject to the divestiture commitments made
by BankAmerica in this case, the Board concludes that
consummation of this proposal would not have a
significantly adverse effect on competition or the concentration of banking resources in any relevant banking market. The Board has sought comments from the
United States Attorney General, the Office of the
Comptroller of the Currency ("OCC"), and the Federal Deposit Insurance Corporation ( " F D I C " ) on the
competitive effects of this proposal. The Attorney
General has indicated that, subject to consummation
by BankAmerica of the proposed divestitures in the
Churchill County, Elko, Humboldt County, Las
Vegas, and Reno, N e v a d a banking markets, the proposal would not have significantly adverse effects on
competition in any relevant banking market. Neither
the OCC nor the FDIC has provided any objection to
consummation of this proposal nor indicated that the
proposal would have any significantly adverse competitive effects.
Other
Considerations
Based on the facts of record, the Board also concludes
that financial considerations, managerial resources,
future prospects, supervisory factors, and conve-
10. BankAmerica competes directly with Valley Capital in the
Phoenix, Arizona banking market. The Phoenix banking market is
approximated by the Phoenix Ranally Metropolitan Area with the
addition of the towns of Carefree, Cave Creek, and Buckeye, Arizona.
Upon consummation, BankAmerica would remain the largest depository institution in the market, holding deposits of approximately $5.6
billion, representing 24.2 percent of the market deposits. The HHI
would increase by 37 points to 1788.
301
nience and needs considerations related to this proposal are consistent with approval of this transaction.
The Board notes that BankAmerica has applied for
Board approval to acquire Security Pacific Corporation. In acting upon the proposal to acquire Valley
Capital, the Board considered the statutory factors
only as they relate to the Valley Capital proposal and
did not consider the statutory factors as they may
relate to the Security Pacific proposal or to any other
proposal pending before the Board.
BankAmerica has also applied under section 4(c)(8)
of the B H C Act to acquire the shares of the nonbanking subsidiaries of Valley Capital listed in the Appendix. The Board has determined by order or by regulation that each of the activities conducted by these
companies is closely related to banking and generally
permissible for bank holding companies under section
4(c)(8) of the B H C Act.
BankAmerica nonbank subsidiaries compete with
five of Valley Capital's six nonbank subsidiaries. In
each instance, the markets for these nonbanking services are not highly concentrated and numerous providers of the services would remain after consummation of the proposal. A s a result, consummation of the
this proposal would have a minimal effect on competition for these services, and the Board concludes that
the proposal would not result in a significantly adverse
effect on competition in any relevant market. For the
reasons discussed above, the Board has determined
that the proposal is not likely to result in any significant adverse effects, such as undue concentration or
resources, decreased or unfair competition, conflicts
of interests, unsound banking practices, concentration
of resources or other adverse effects, and that the
balance of public interest factors that the Board is
required to consider under section 4(c)(8) of the B H C
Act is favorable.
Based on the foregoing and other facts of record,
and subject to the commitments made by BankAmerica and the conditions in this order, the Board has
determined that the applications should be, and hereby
are, approved. Approval of these proposals is specifically conditioned on compliance by BankAmerica
with the commitments made in connection with its
applications in this case and with the conditions referenced in this order. The determinations as to the
nonbanking activities are also subject to all 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 such modification or
termination of the activities of a bank holding company or any of its subsidiaries as the Board finds
necessary to assure compliance with, or to prevent
evasion of, the provisions and purposes of the B H C
Act and the Board's regulations and orders issued
302
Federal Reserve Bulletin • April 1992
thereunder. Further, the commitments and conditions
referenced in this order are conditions imposed in
writing by the Board in connection with its findings
and decision and m a y be enforced under applicable
provisions of law.
The acquisition of Valley Capital Corporation's subsidiary banks shall not be c o n s u m m a t e d before the
thirtieth calendar day following the effective date of
this Order, and no acquisition may be c o n s u m m a t e d
later than three m o n t h s after the effective date of the
order. This period m a y be e x t e n d e d for g o o d c a u s e by
the Board or the Federal R e s e r v e Bank of San Franc i s c o , acting pursuant to delegated authority.
B y order o f the Board of Governors, effective
February 12, 1992.
Voting for this action: Chairman Greenspan and Governors
Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips.
Associate
JENNIFER J . JOHNSON
Secretary of the Board
Appendix
B a n k A m e r i c a will acquire the following nonbank subsidiaries o f V a l l e y Capital:
(a) Valley Capital Life Insurance C o . , Inc., and
thereby engage in underwriting and reinsurance of
credit life insurance and credit accident, health and
u n e m p l o y m e n t insurance w h i c h is directly related to
e x t e n s i o n s of credit b y Valley Bank pursuant to section 225.25(b)(8)(i) of the Board's Regulation Y .
(b) V a l l e y Electronic S e r v i c e s , Inc., and thereby engage in providing electronic banking services by operating and servicing the automatic teller machines at
affiliate bank branch locations; owning, operating and
servicing terminals at off-site locations such as grocery
stores, hotels and c a s i n o s throughout N e v a d a ; proc e s s i n g credit and debit card transactions; providing
c o n n e c t i o n s to national and regional A T M networks,
pursuant to section 225.25(b)(7) of Regulation Y .
(c) Valley L e a s i n g C o m p a n y , Inc., and thereby engage
in leveraged and non-leveraged leasing of personal
property, including gaming equipment, furniture and
fixtures, and industrial, high-tech and medical equipment, pursuant to s e c t i o n 225.25(b)(5) of Regulation
Y.
(d) Valley Mortgage C o m p a n y , Inc., and thereby
engage in originating residential mortgage loans for
resale in the s e c o n d a r y market, servicing such loans,
making residential real estate construction loans, and
servicing such loans for third parties, pursuant to
section 225.25(b)(1) of Regulation Y .
(e) Pacific Century Finance Company (dba Caliber
Finance Company), and thereby engage in the financing of non-recourse automobile dealer installment
sales contracts, pursuant to s e c t i o n 225.25(b)(1) of
Regulation Y .
(f) Caliber Premium C o m p a n y , and thereby engage in
insurance premium financing pursuant to section
225.25(b)(1) of Regulation Y.
Society Corporation
Cleveland, Ohio
Order Approving
Company
the Acquisition
of a Bank
Holding
S o c i e t y Corporation, Cleveland, Ohio ( " S o c i e t y " ) , a
bank holding c o m p a n y within the meaning o f the Bank
Holding C o m p a n y A c t (the " B H C A c t " ) , has applied
under section 3 of the B H C A c t (12 U . S . C . § 1842) to
merge with Ameritrust Corporation, Cleveland, Ohio
("Ameritrust"), and thereby indirectly acquire Ameritrust C o m p a n y , N . A . , and Ameritrust D e v e l o p m e n t
Bank, both of Cleveland, Ohio; Ameritrust Indiana
Corporation, Elkhart, Indiana, and its subsidiary
banks, Ameritrust National Bank Central Indiana,
Indianapolis, Indiana; Ameritrust National Bank, Michiana (Elkhart), Elkhart, Indiana; Ameritrust N a tional Bank, Michiana (Sturgis), Sturgis, Michigan;
and Ameritrust Bank, H o w a r d County, K o k o m o , Indiana. 1
Society also has applied under section 4(c)(8) of the
B H C A c t to acquire the nonbanking subsidiaries of
Ameritrust listed in the Appendix t o this Order. E a c h of
these activities has been previously approved b y the
Board. Society also has applied t o acquire Ameritrust
International Corporation, Cleveland, Ohio, an inactive
corporation that is chartered pursuant to section 25(a)
of the Federal Reserve A c t (12 U . S . C . § 611 et seq.)
("Edge Act").2
N o t i c e of the applications, affording interested persons an opportunity to submit c o m m e n t s , has b e e n
published (56 Federal Register
61,251 (1991)). T h e
time for filing c o m m e n t s has expired, and the Board
has considered the applications and all c o m m e n t s
received in light of the factors set forth in s e c t i o n s 3(c)
and 4 of the B H C Act.
1. In connection with this transaction, Ameritrust has granted
Society an option to purchase up to 19.9 percent of the outstanding
common stock of Ameritrust, and Society has applied to exercise the
option if any of several preconditions occur. This option will become
moot upon consummation of the Society application to acquire
Ameritrust.
2. Ameritrust International has been inactive since 1986. Society
has committed not to engage in any activities through it without
obtaining prior Board approval.
Legal Developments
Douglas
Amendment
Section 3(d) of the B H C A c t , the Douglas Amendment, prohibits the Board from approving an application by a bank holding company to acquire any
bank located outside of the bank holding company's
h o m e 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 and
not merely by implication." 3 Society seeks to acquire bank subsidiaries of Ameritrust located in
Indiana and Michigan. For purposes of the Douglas
Amendment, the home state of Society is Ohio. 4 The
Board previously has determined that the interstate
banking statutes of Indiana permit the acquisition of
Indiana banking organizations by Ohio banking organizations. 5 The Board also has determined that the
Michigan interstate banking statute expressly authorizes the acquisition of a Michigan bank by an Ohio
bank holding c o m p a n y . 6 Accordingly, Board approval of this proposal is not prohibited by the
Douglas Amendment. H o w e v e r , approval of this
proposal is conditioned upon Society receiving all
required state regulatory approvals.
Competitive,
Financial,
Considerations
Managerial
and
the total deposits in commercial banking organizations
in Michigan. 7
Society and Ameritrust compete directly in ten
banking markets in Ohio and Indiana. 8 After considering the competition offered by thrift institutions, 9 the
number of competitors remaining in the market, the
increase in concentration, and the other facts of
record, the Board has concluded that consummation
of the proposal would not result in a significantly
adverse effect on competition in the following banking
markets: Akron, Canton, Cincinnati, Cleveland, Columbus and Youngstown-Warren in Ohio; and
Elkhart-Niles-South Bend and Warsaw County in Indiana. Society has proposed divestitures to mitigate
the anticompetitive effects of the proposed merger in
the remaining banking markets of Ashtabula, Ohio,
and Starke County, Indiana. 1 0
In the Ashtabula banking market, 11 Society is the
largest of ten depository institutions, with $186.8 million in deposits, which represents approximately 25.1
percent of the total deposits in depository institutions
in the market ("market deposits"). Ameritrust is the
third largest depository institution in the market, with
$132.8 million in deposits, which represents approxi-
Supervisory
U p o n consummation of the transaction, Society would
become the largest banking organization in Ohio,
controlling deposits of $16.5 billion, representing 18.3
percent of the deposits in commercial banking organizations in the state; the fourth largest banking organization in Indiana, controlling deposits of $2.8 billion,
representing 6.0 percent of the deposits in commercial
banking organizations in the state; and would remain
the twelfth largest commercial banking organization in
Michigan, controlling approximately $748.0 million in
total deposits, representing approximately 1 percent of
3. 12 U.S.C. § 1842(d).
4. A bank holding company's home state is that state in which the
operations of the bank holding company's banking subsidiaries were
principally conducted on July 1, 1966, or the date on which the
company became a bank holding company, whichever is later.
5. Ind. Code § 28-2-15-18 (Supp. 1991). See Banc One Corporation,72 Federal Reserve Bulletin 422 (1986).
6. Michigan law authorizes acquisitions of Michigan banking organizations by out-of-state banking organizations on a national reciprocal basis, provided that the acquisition meets state safety and soundness considerations, and that it does not a£fect adversely the activities
of any Michigan banking institution. Mich. Stat. Ann. § 23.710(130b)
(1991). The Acting Commissioner of the State of Michigan Department of Commerce, Financial Institutions Bureau, has determined
that Society's acquisition of Ameritrust's Michigan subsidiaries meets
the requirements of section 130b of the Michigan Banking Code of
1969, as amended, Mich. Stat. Ann. § 23.710(130b) (1991), and that
the acquisition is permissible, subject to approval by the Board.
303
7. State deposit data are as of September 30, 1991, and reflect all
proposed divestitures. Market data are as of June 30, 1990.
8. Under the revised Department of Justice Merger Guidelines, 49
Federal Register 26,823 (June 29, 1984), a market in which the
post-merger HHI is above 1800 is considered highly concentrated. In
such markets, the Department is likely to challenge a merger that
increases the HHI by more than 50 points. The Department 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 increases the HHI by 200 points. The Justice Department 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.
9. The Board previously has indicated that thrift institutions have
become, or have the potential to become, significant competitors of
commercial banks. WM Bancorp, 76 Federal Reserve Bulletin 788
(1990); First Union Corporation,
76 Federal Reserve Bulletin 83
(1990); Midwest Financial Group, 75 Federal Reserve Bulletin 386
(1989). Thus, the Board has regularly included thrift deposits in the
calculation of market share on a 50 percent weighted basis. See e.g.,
First Hawaiian, Inc., 77 Federal Reserve Bulletin 52 (1991). In
considering the competition offered by thrifts in all banking markets in
this case, thrift deposits are weighted at 50 percent, unless otherwise
noted. See e.g., Ames National Corporation, 78 Federal
Reserve
Bulletin 59 (1992); Fleet/Norstar Financial Group Inc., 77 Federal
Reserve Bulletin 750 (1990).
10. In each market in which Society has committed to divest branch
offices to mitigate possible anticompetitive effects of this acquisition,
Society has executed agreements that require consummation of these
divestitures within 180 days of consummation of the proposal. If
Society is unsuccessful in divesting these branches within 180 days of
consummation, Society has committed to transfer these branches to
an independent trustee with instructions to sell these branches
promptly. See e.g., United New Mexico Financial Corporation, 77
Federal Reserve Bulletin 484, 485 (1991); First Union Corporation, 76
Federal Reserve Bulletin 83 (1990).
11. The Ashtabula banking market is approximated by Ashtabula
County, Ohio.
304
Federal Reserve Bulletin • April 1992
mately 17.9 percent of market deposits. Society has
committed to divest four of the five Ameritrust
branches in this market, representing approximately
$105.0 million in market deposits, to a banking organization not currently operating in this market. With
this divestiture, the number of competitors in the
Ashtabula banking market will not change following
consummation of this proposal, and the H H I in this
market would increase by 81 points to 1850. 12
In the Starke County banking market, 1 3 Society is
the second largest of five depository institutions, holding $43.5 million in deposits, which represents approximately 28.6 percent of the total market deposits.
Ameritrust is the fifth largest depository institution in
the market, with $6.9 million in deposits, which represents approximately 4.5 percent of market deposits.
Society has committed to divest Ameritrust's single
branch in this market to a banking organization not
currently operating in this market. A s a result of this
divestiture, the number of depository institutions in
the Starke County banking market will not change
following the consummation of the proposal, and the
H H I in this market would remain unchanged.
The Department of Justice ("Department") has
indicated to the Board the Department's opinion that
the proposal would have a significantly adverse competitive effect in Cuyahoga County and Lake County,
Ohio. 1 4 The Department bases this conclusion on an
analysis of the supply of and demand for credit to
commercial customers, in particular small and medium-sized businesses, in these areas. The Department
believes that the relevant product market for analyzing
the competitive effects of this transaction is commercial loans other than commercial mortgage loans, and,
that the relevant geographic markets consist of four
counties, including Cuyahoga County and Lake
County. The Department has stated its belief that the
divestitures currently proposed by Applicant in Cuyahoga County do not appear to be sufficient to address
the Department's concern regarding competition in
that area. The Department has also indicated that it is
continuing to discuss this matter with Applicant.
For the reasons explained in previous decisions and
based on the record in this case, the Board believes
that competitive analysis of this acquisition proposal
should be based on the availability of the cluster of
12. Following this proposed divestiture in the Ashtabula banking
market, Society would remain the largest depository institution in the
market, controlling approximately $214.6 million in deposits, representing approximately 28.9 percent of deposits in the market.
13. The Starke County banking market is approximated by Starke
County, Indiana.
14. The Department has indicated that, after taking into account the
divestitures proposed in other markets, the transaction would not
raise competitive concerns in other relevant banking markets.
banking services to a range of customers in the local
banking market. 1 5 A recent study conducted by Board
staff supports the conclusion that customers still seek
to obtain this cluster of services. 1 6 Based on this
product market definition, the Board believes that the
relevant geographic market is the Cleveland banking
market. 1 7
The Cleveland banking market is moderately concentrated, with 48 banking and thrift competitors in
the market. Following consummation, the market
would remain moderately concentrated with numerous
competitors providing or poised to provide the cluster
of banking products and services. 1 8 Furthermore, statistics relating to population per banking office, deposits per banking office, total banking assets and household income in the market, all indicate that Cleveland
is an attractive market for entry. It is a major urban
area, and includes the second largest city in Ohio.
Seven banking organizations have entered the Cleveland banking market de novo since 1983, three of them
in the last t w o years.
In considering the views of the Department, the
Board notes that the Department has not provided the
Board with evidence to support the Department's conclusions regarding the definition of the product market
in this case. The Board also notes that, assuming the
product market is defined by non-real estate commercial lending to small businesses, the Department does
not indicate that it has taken into account competition
in these products from nonbanking institutions, including finance companies, or the degree to which a variety
of banking and nonbanking competitors supply other
products, such as home equity loans and credit card
loans, that may be effective substitutes for the products
identified by the Department. In light of the record
before the Board, the Board believes that the appropriate product market is the cluster of banking products
and services and the relevant geographic market is the
Cleveland banking market as defined above.
Based on all of the facts of record in this case, and
subject to the divestiture proposals made by Society,
the Board concludes that consummation of this pro-
15. See First Hawaiian, Inc., 77 Federal Reserve Bulletin 52 (1991);
Fleet/Norstar Financial Group, Inc., 77 Federal Reserve Bulletin 750
(1991); and U.S. v. Philadelphia National Bank, 374 U.S. 321 (1963).
16. Elliehausen and Wolken, Banking Markets and the Use of
Financial Services by Small- and Medium-Sized Businesses, 76 Federal Reserve Bulletin 726 (1990).
17. The Cleveland banking market is approximated by Cuyahoga,
Geauga, Lake, and Lorain Counties, the northern third of Summit
County, the northern two-thirds of Medina County, Aurora and
Streetsboro townships in Portage County, and the City of Vermilion in
Erie County, all in Ohio.
18. With thrift deposits weighted at 50 percent, Society would
control 34.4 percent of the market deposits, and the HHI would
increase by 568 points to 1699 in the Cleveland market upon consummation of the proposal.
Legal Developments
posal would not have a significantly adverse effect on
competition or the concentration of banking resources
in any relevant banking market. The Board has also
sought comments from the Office of the Comptroller of
the Currency ("OCC"), and the Federal Deposit Insurance Corporation ( " F D I C " ) on the competitive
effects of this proposal. Neither the OCC nor the FDIC
has provided any objection to consummation of this
proposal or indicated that the proposal would have any
significantly adverse competitive effects.
Based on the entire record, the Board also concludes that the financial and managerial resources,
future prospects of Society, its subsidiary banks, and
Ameritrust, and the supervisory factors in this case,
are consistent with approval of this proposal. 1 9
Convenience
and Needs
Considerations
In analyzing the effect of this merger on the convenience and needs of the communities served by Society and Ameritrust, the Board has taken into account
the record of the subsidiary banks of Society and
Ameritrust 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. T o accomplish this end, the CRA requires
the appropriate federal supervisory authority to "assess the institution's record of meeting the credit
needs of its entire community, including low- and
moderate-income neighborhoods, consistent with the
safe and sound operation of such institution", and to
take that record into account in its evaluation of bank
holding company applications. 2 0
In this regard, the Board has considered comments
filed by several protestants ("Protestants") expressing
concerns regarding the efforts by Society and Ameritrust to meet the credit needs of their entire communities, including low- and moderate-income neighborhoods primarily in Cleveland. 2 1 Some of the
19. The Board has considered comments filed after the close of the
public comment period by two individuals involved in litigation
alleging mismanagement of trust funds by a Society subsidiary bank.
Under the Board's rules, the Board may in its discretion take into
consideration the substance of such comments. 12 C.F.R. 262.3(e).
The Board has reviewed these comments in light of all of the facts of
record in this case, including recent examination reports of this bank's
trust operations by this bank's primary regulator, and concludes that
these comments do not reflect so adversely upon the managerial
resources of Society as to warrant denial of these applications.
20. 12 U.S.C. § 2903.
21. These comments were submitted by the St. Clair-Superior
Coalition ("SCSC"), Stockyard Area Development Association
("SADA"), Cleveland Coalition Against Plant Closings, all of Cleveland, Ohio, as well as two Cleveland City Councilmen. CA$H PLU$,
305
Protestants expressed concerns regarding the effect of
the merger on local commercial lending and home
mortgage availability, and alleged that the 1990 data
available under the H o m e Mortgage Disclosure Act
indicate that Society and Ameritrust have insufficient
shares of the first mortgage home financing market.
Protestants have also raised issues regarding possible
branch closings that may result from the proposal. 2 2
The Board has carefully reviewed the CRA performance records of Society, Ameritrust, and their subsidiary banks, the comments and evidence presented in
written submissions, and Society's responses to those
comments, in light of the CRA, the Board's regulations,
and the Statement of the Federal Financial Supervisory
Agencies Regarding the Community Reinvestment Act
("Agency CRA Statement"). 2 3 The Agency CRA
Statement provides guidance regarding the types of
policies and procedures that the supervisory agencies
believe financial 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. The Agency CRA Statement explains that decisions to allow financial institutions to expand will be
made pursuant to an analysis of the institution's overall
CRA performance and will be based on the actual
record of performance of the institution. 24
Initially, the Board notes that all of Society's five
subsidiary banks have received an "outstanding" or
"satisfactory" rating from their primary supervisors
during the most recent examination of each bank's
CRA performance, and all of Ameritrust's subsidiary
banks received "satisfactory" ratings. 25 The Agency
CRA Statement provides that a CRA examination is an
important and often controlling factor in the consider-
South Bend, Indiana, submitted comments which were withdrawn
after discussions with Society.
22. Two Protestants that have received financing from Ameritrust
Development Bank have questioned the future of this subsidiary
under the proposal. Society has committed to retain a specialized
financing affiliate dedicated to neighborhood development projects
that will be capitalized at the same level as Society's current development affiliate and the Ameritrust Development Bank, and that will
offer the same lending services and expertise that is currently available from these operations.
23. 54 Federal Register 13,742 (1989).
24. Id.
25. Society's banking subsidiaries have received the following CRA
ratings: Society Bank, N . A . , Dayton, Ohio, and Society National
Bank, Cleveland, Ohio, each received an "outstanding" rating in
examinations conducted by the OCC, in September 1991 and October
1990 respectively; Society Bank and Trust, Toledo, Ohio, received an
"outstanding" rating in September 1991, in an examination conducted
by the Federal Reserve Bank of Cleveland; Society Bank, Indiana,
South Bend, Indiana, and Society Bank of Michigan, Ann Arbor,
Michigan, each received a "satisfactory" rating in examinations
conducted by the FDIC, in May 1991 and September 1989, respectively.
306
Federal Reserve Bulletin • April 1992
ation of an institution's CRA record and that, although
CRA examination reports do not provide conclusive
evidence of an institution's CRA record, these reports
will be given great weight in the applications process. 2 6
Society and its subsidiary banks have in place the
type of policies outlined in the Agency CRA Statement
that contribute to an effective CRA program. Society's
corporate CRA policy sets out CRA-related goals for
all its banks, and includes comprehensive community
development programs in each of the states in which
these banks currently operate. A review of the CRA
records of Society's subsidiary banks indicates that
these banks maintain regular contacts in the communities they serve in order to ascertain credit needs.
They meet with members of minority groups and
community organizations on a regular basis, and have
corporate programs in place to evaluate the information received from those contacts. Society has advertising programs targeted at low-income and minority
residents, including the use of news media that are
targeted at minority communities, and marketing campaigns that are specifically aimed at low- to moderateincome borrowers. A s a result of these ascertainment
efforts, Society has established special credit products
for low- to moderate-income customers, such as its
low- to moderate-income installment loan product.
Society's subsidiary banks participate actively in governmentally-insured, guaranteed, and subsidized loan
programs for housing and small business lending.
Society participates in HomeAssist, which provides
financing and grants to mortgage customers seeking
downpayments for homes. The program includes counseling services to provide information and assistance to
home buyers with a variety of credit and financial
needs, budgeting, and reconciliation of budget issues.
Society's HomeAssist program has more flexible credit
underwriting requirements that permit more low- and
moderate-income residents to obtain mortgages.
Society National Bank, Cleveland, Ohio ("Bank"),
has been actively engaged in mortgage lending in lowand moderate-income areas in Cleveland. The 1990
H M D A data for Bank indicates that Bank makes approximately t w o loans per thousand owner-occupied
units in low- and moderate-income areas, compared to
1.3 in middle-income areas and 2.3 in high-income
areas. Overall, 18.8 percent of the mortgage loans
originated in Cleveland by Bank and 20.1 percent of its
home improvement loans were originated in low-income owner-occupied neighborhoods. Owner-occupied
housing in low- and moderate-income housing comprises only 14.9 percent of Cleveland's housing stock.
26. 54 Federal Register
at 13,745.
In addition, Bank recently entered into a Neighborhood Reinvestment Agreement ("Agreement") with
the City of Cleveland to enhance further Bank's CRA
program. 27 Under the Agreement, Bank has committed to a four-year, $260 million goal to increase home
mortgage and home improvement lending in minority
and low- and moderate-income neighborhoods in
Cleveland. Bank also has made commitments to provide $20 million to fund the construction of new
housing and $12 million for the purchase and rehabilitation of existing distressed housing in Cleveland, and
to provide at least $100 million in new loans to small
businesses over the next four years. Bank intends to
work with the City of Cleveland to develop initiatives
for large scale housing and community development
programs. 2 8
The Agreement also provides for the maintenance of
full-service branches in 23 Cleveland neighborhoods
for five years, to give written notification to the mayor
of any branch closings, and to follow its existing
branch closing policy. The branch closing policy involves an evaluation of whether there are solutions
which do not involve closing the branch; meetings
with the affected community groups; attempts to have
the branch remain open if the neighborhood will be left
without banking services; and review by both an
internal community committee and the full board of
directors prior to closing any branch.
On the basis of all the facts of record, including the
comments received and relevant examination reports,
the Board concludes that the convenience and needs
considerations, including the CRA performance records of Society and Ameritrust, are consistent with
approval of these applications. 2 9
27. In light of this Agreement, the mayor of Cleveland has endorsed
the proposal.
28. Society also has made certain commitments to the City of
Cleveland regarding job retention in the downtown area and job
training and outplacement services for displaced employees; the
maintenance of a leadership role for civic contributions and participation; the provision of checking accounts for a nominal fee and
consulting services for certain marketing and research projects involving housing and lending patterns in Cleveland.
29. SCSC has requested that the Board hold a public hearing or
meeting on these applications. Generally, under the Board's rules, the
Board may, in its discretion, 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).
The Board has carefully considered this request. In the Board's
view, the parties have had ample opportunity to present written
submissions, and the commenter requesting the public hearing or
meeting has submitted written comments that have been considered
by the Board. Further, SCSC has not identified facts that are material
to the Board's decision and that are in dispute. In light of this, the
Board has determined that a public meeting or hearing is not necessary
to clarify the factual record in these applications, or otherwise
warranted in this case. Accordingly, the request for a public meeting
or hearing on these applications is denied.
Legal Developments
Acquisition
of Nonbanking
Companies
S o c i e t y also has applied, pursuant t o s e c t i o n 4(c)(8) of
the B H C A c t , t o acquire certain nonbanking subsidiaries o f Ameritrust. T h e Board has determined by
regulation or order that e a c h of the activities of these
c o m p a n i e s is c l o s e l y related t o banking under section
4(c)(8) of the B H C A c t , and generally permissible for
bank holding c o m p a n i e s under section 4(c)(8) of the
B H C A c t , and has approved applications by Ameritrust to o w n shares in e a c h o f these companies.
S o c i e t y operates subsidiaries engaged in nonbanking activities that c o m p e t e with many o f Ameritrust's
subsidiaries. In e a c h c a s e , the markets for these serv i c e s are unconcentrated and there are numerous
providers of these services. In light of these factors
and the shares of e a c h o f the markets controlled by
S o c i e t y and Ameritrust, the Board c o n c l u d e s that
c o n s u m m a t i o n o f this proposal would not have any
significantly adverse effect o n competition in the provision of t h e s e services in any relevant market. Furthermore, the record d o e s not indicate that c o n s u m mation of this proposal is likely t o result in any
significantly adverse effects such as undue concentration of r e s o u r c e s , decreased or unfair competition,
conflicts o f interests, or unsound banking practices.
Accordingly, the Board has determined that the bala n c e o f public interest factors it must consider under
section 4(c)(8) of the B H C A c t is favorable and consistent with approval o f S o c i e t y ' s application to acquire the nonbanking subsidiaries of Ameritrust. In
addition, after consideration o f all the factors specified
in the Board's Regulation K and based upon all the
facts o f record, the Board has determined that disapproval of S o c i e t y ' s investment in Ameritrust International Corporation is not warranted.
B a s e d o n the foregoing and other facts of record,
including the c o m m i t m e n t s made by S o c i e t y , the
Board has determined that the applications should be,
and hereby are, approved. The Board's approval of
this proposal is specifically conditioned o n compliance
b y S o c i e t y with the c o m m i t m e n t s made in c o n n e c t i o n
with its application, including the c o m m i t m e n t s to
divest certain bank offices and conditions discussed in
this Order. T h e determination as t o the nonbanking
activities approved in this c a s e is also subject to all of
the conditions contained in Regulation Y , including
t h o s e in s e c t i o n s 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 t o require s u c h notification or termination of the
activities o f a holding c o m p a n y or any of its subsidiaries as the Board finds n e c e s s a r y to assure compliance
with, or t o prevent e v a s i o n of, the provisions and
purposes o f the B H C A c t and the Board's regulations
and orders i s s u e d thereunder. All of the c o m m i t m e n t s
307
and c o n d i t i o n s relied o n in reaching this d e c i s i o n in
this c a s e are c o n d i t i o n s i m p o s e d in writing by the
Board in c o n n e c t i o n with its findings and d e c i s i o n
and m a y b e e n f o r c e d in p r o c e e d i n g s under applicable
law.
The acquisition of Ameritrust's banking subsidiaries
shall not be c o n s u m m a t e d before the thirtieth calendar
day following the effective date of this Order, and n o
acquisitions may b e c o n s u m m a t e d later than three
months following the effective date o f this Order,
unless such period is e x t e n d e d for g o o d c a u s e by the
Board or b y the Federal R e s e r v e Bank of Cleveland,
acting pursuant to delegated authority.
B y order of the Board of Governors,
February 13, 1992.
effective
Voting for this action: Chairman Greenspan and Governors
Mullins, Kelley, LaWare, Lindsey, and Phillips. Voting
against this action: Governor Angell.
Associate
JENNIFER J . JOHNSON
Secretary
of the Board
Appendix
Nonbanking Subsidiaries
Ameritrust
Company of New York, N e w Y o r k , N e w
York, and thereby engage in providing corporate trust
services to the public pursuant t o § 225.25(b)(3) of the
Board's Regulation Y ;
Ameritrust
Southeast,
National Association,
Tampa,
Florida, and thereby engage in providing corporate
and personal trust services to the public pursuant to
§ 225.25(b)(3) of the Board's Regulation Y ;
Ameritrust
Texas,
National
Association,
Dallas,
T e x a s , and thereby engage in providing corporate and
personal trust s e r v i c e s to the public pursuant to
§ 225.25(b)(3) of the Board's Regulation Y ;
Ameritrust
Petroleum
Corp.,
Dallas, T e x a s , and
thereby engage in:
(1) investment advisory s e r v i c e s in an a g e n c y capacity to the public pursuant to § 225.25(b)(4) of the
Board's Regulation Y ; and
(2) real estate appraisal services t o the public pursuant to § 225.25(b)(13) of the B o a r d ' s Regulation
Y;
Ameritrust
Realty Corp., Dallas, T e x a s , and thereby
engage in:
(1) providing investment advisory s e r v i c e s to the
public with respect to i n v e s t m e n t s in real estate
pursuant t o § 225.25(b)(4) of the B o a r d ' s Regulation
Y;
308
Federal Reserve Bulletin • April 1992
(2) providing real estate appraisal services to the
public pursuant to § 225.25(b)(13) of the Board's
Regulation Y; and
(3) acting as an intermediary in arranging equity
financing for commercial and industrial incomeproducing real estate pursuant to § 225.25(b)(14) of
the Board's Regulation Y;
Ameritrust
Securities
Corp.,
Dallas, Texas, and
thereby engage in providing investment advisory services to the public, including the provision of portfolio
investment advice both to unaffiliated corporate entities, endowment funds and foundations, and to individuals, pursuant to § 225.25(b)(4) of the Board's
Regulation Y ;
AT Investment
Services
Corporation,
Cleveland,
Ohio, and thereby engage in:
(1) offering securities brokerage services to the
public pursuant to § 225.25(b)(15) of the Board's
Regulation Y , and
(2) the purchase and sale of gold and silver bullion
and gold coins for the accounts of its customers
pursuant to Ameritrust
Corp., 14 Federal
Reserve
Bulletin 341 (1988);
First Indiana Life Insurance,
Elkhart, Indiana, and
thereby engage, as a reinsurer, in underwriting life
insurance and accident and health insurance written in
connection with extensions of credit by affiliate banks
pursuant to § 225.25(b)(8)(i) of the Board's Regulation Y; and
Lake Life Insurance Company, Cleveland, Ohio, and
thereby engage, as a reinsurer, in underwriting life insurance and accident and health insurance written in connection with extensions of credit by affiliate banks pursuant
to § 225.25(b)(8)(i) of the Board's Regulation Y.
of
Society has also applied pursuant to section 4(c)(8)
the Bank Holding Company Act (12 U . S . C .
§ 1843(c)(8)) to acquire the following companies that
are inactive:
AT Acceptance
Corp., Cleveland, Ohio — purchasing
and selling installment loan contracts from automobile
dealers and making other extensions of credit to finance consumer purchases; and
AT Financial Corp., Cleveland, Ohio—making, acquiring and servicing loans; and
ATEK Check Printing Company, Cleveland, Ohio —
providing checks and related documents to financial
institutions; and
Franklin Financial Corporation, Indianapolis, Indiana
— mortgage loan servicing activities for its Ameritrust
National Bank, Central Indiana, and in servicing commercial lines of credit for unaffiliated financial institutions.
Dissenting
Statement
of Governor
Angell
I dissent from the Board's action in this case. A s I
have indicated in previous cases, I believe that the
structural measures used by the Board in analyzing
bank acquisition proposals do not accurately reflect
the competitive effects of these proposals. In particular, I believe that these measures do not adequately
account for the effect of these acquisitions on the
availability and pricing of credit to small businesses.
I believe that the Board should focus particular
attention on this aspect of the cluster of banking
services in conducting its analysis of the competitive
effects of bank acquisitions. In this case, I agree with
the conclusion expressed by the Department of Justice
that this acquisition would have a significantly adverse
effect on competition in the market for small business
lending in these areas.
February 13, 1992
Legal Developments
309
APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT
By the Secretary of the Board
Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon
request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551.
Section 4
Southern National Corporation,
Lumberton, North Carolina
Trans Financial Bancorp, Inc.
Bowling Green, Kentucky
Effective
Date
Bank(s)
Applicant(s)
Workmen's Bancorp, Inc.,
Mount Airy, North Carolina
First Federal Savings Bank of
Tennessee,
Tullahoma, Tennessee
Maury Federal Savings Bank,
Columbia, Tennessee
February 19, 1992
February 21, 1992
APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY 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)
American Interstate
Bancorporation, Inc.,
Omaha, Nebraska
CBS Bancshares, Inc.,
Spencer, Tennessee
Community First Bankshares,
Inc.,
Fargo, North Dakota
First Autauga Bancshares, Inc.,
Montgomery, Alabama
Galatia Bancorp, Inc.,
Galatia, Illinois
Investors Banking Corporation,
Portland, Oregon
KLT Bancshares, Inc.,
Farley, Missouri
Reserve
Bank
Bank(s)
American Interstate
Bancorporation, Inc.,
Omaha, Nebraska
First State Bank,
Maynardville,
Tennessee
First Interstate of North
Dakota, Inc.,
Fargo, North Dakota
Cee Bee Corporation,
Prattville, Alabama
The First National Bank
of Metropolis,
Metropolis, Illinois
Colonial Banking
Company,
Grants Pass, Oregon
Farley Bancshares, Inc.,
Farley, Missouri
Effective
Date
Chicago
February 7, 1992
Atlanta
February 11, 1992
Minneapolis
February 20, 1992
Atlanta
February 12, 1992
St. Louis
February 7, 1992
San Francisco
February 13, 1992
Kansas City
February 12, 1992
310
Federal Reserve Bulletin • April 1992
Section 3—Continued
Applicant(s)
Mahoning National Bancorp,
Inc.,
Youngstown, Ohio
Mason-Dixon Bancshares, Inc.,
Westminster, Maryland
Ohio County Community
Bancshares, Inc.,
Hartford, Kentucky
United Nebraska Financial
Company,
Grand Island, Nebraska
Wilton Holding Company,
Wilton, North Dakota
Bank(s)
The Mahoning National
Bank of Youngstown,
Youngstown, Ohio
Carroll County Bank and
Trust Company,
Westminster, Maryland
The Hartford Bank and
Trust Company,
Hartford, Kentucky
Citizens Bank & Trust
Company,
Columbus, Nebraska
First State Bank of
Wilton,
Wilton, North Dakota
Reserve
Bank
Effective
Date
Cleveland
February 6, 1992
Richmond
February 6, 1992
St. Louis
February 18, 1992
Kansas City
February 7, 1992
Minneapolis
February 5, 1992
Section 4
Applicant(s)
Banc One Corporation,
Columbus, Ohio
Banc One Mortgage Corporation,
Indianapolis, Indiana
First Community Bancshares,
Inc.,
Knob Noster, Missouri
First Union Corporation,
Charlotte, North Carolina
National City Corporation,
Cleveland, Ohio
Nonbanking
Activity/Company
Reserve
Bank
Effective
Date
Diamond Mortgage
Corporation,
Findlay, Ohio
Cleveland
February 7, 1992
Bancshares of Knob
Noster, Inc.,
Knob Noster, Missouri
Ionia Bancshares, Inc.,
Windsor, Missouri
Sweet Springs
Bancshares, Inc.,
Sweet Springs,
Missouri
M&M Financial, Inc.,
Austell, Georgia
B & L Consultants, Inc.,
Norwood,
Massachusetts
Kansas City
February 20, 1992
Richmond
February 7, 1992
Cleveland
February 14, 1992
Legal Developments
311
Sections 3 and 4
Applicant(s)
Johnson Holdings, Inc.,
Isanti, Minnesota
Mahaska Investment Company
ESOP,
Oskaloosa, Iowa
Reserve
Bank
Bank(s)
First State Bank of Isanti,
Isanti, Minnesota
Isanti Agency, Inc.,
Isanti, Minnesota
Mahaska Investment
Company,
Oskaloosa, Iowa
Effective
Date
Minneapolis
February 14, 1992
Chicago
February 5, 1992
APPLICATIONS APPROVED 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.
..
A
Apphcant(s)
Chemical Bank,
N e w York, N e w York
r» w x
Bank(s)
Reserve
Bank
Anchor Savings Bank,
F.S.B.,
Hewlett, N e w York
N e w York
Effective
Date
February 5, 1992
PENDING CASES INVOLVING THE BOARD OF GOVERNORS
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.
Davis v. Board of Governors, No. 91-6972 (Supreme
Court, filed December 4, 1991). Petition for certiorari seeking review of Burke v. Board of Governors,
940 F.2d 1360 (10th Cir. 1991), in which the court of
appeals upheld Board orders assessing civil money
penalties and issuing orders of prohibition.
In re Subpoena Served on the Board of Governors,
N o s . 91-5427, 91-5428 (D.C. Cir., filed December
27, 1991). Appeal of order of district court, dated
December 3, 1991, requiring the Board and the
Office of the Comptroller of the Currency to produce
confidential examination material to a private litigant. The court of appeals stayed the district court
order on January 7, 1992, and will hear oral argument on the case on March 17, 1992.
Greenberg v. Board of Governors, N o . 91-4200 (2d
Cir., filed December 4, 1991). Petition for review of
orders of prohibition issued by the Board on October 28, 1991. Oral argument is scheduled for the
week of April 13, 1992.
First Interstate BancSystem of Montana, Inc. v. Board of
Governors, No. 91-1525 (D.C. Cir., filed November 1,
1991). Petition for review of Board's order denying on
Community Reinvestment Act grounds the petitioner's
application under section 3 of the Bank Holding Company Act to merge with Commerce BancShares of
Wyoming, Inc. The case is pending.
Board of Governors v. Kemal Shoaib, N o . CV 91-5152
(C.D. California, filed September 24, 1991). Action
to freeze assets of individual pending administrative
adjudication of civil money penalty assessment by
the Board. On October 15, the court issued a preliminary injunction restraining the transfer or disposition of the individual's assets.
312
Federal Reserve Bulletin • April 1992
Board of Governors v. Ghaith R. Pharaon, N o . 91CIV-6250 (S.D. N e w York, filed September 17,
1991). Action to freeze assets of individual pending
administrative adjudication of civil money penalty
assessment by the Board. On September 17, the
court issued an order temporarily restraining the
transfer or disposition of the individual's assets.
In re Smouha, N o . 91-B-13569 (Bkr. S.D. N e w York,
filed August 2, 1991). Ancillary proceeding under
the U . S . Bankruptcy Code brought by provisional
liquidators of BCCI Holdings (Luxembourg) S.A.
and affiliated companies. On August 15, 1991, the
bankruptcy court issued a temporary restraining
order staying certain judicial and administrative
actions, which has been continued by consent.
Hanson v. Greenspan,
N o . 91-1599 ( D . D . C . , filed
June 28, 1991). Suit for return of funds and financial
instruments allegedly owned by plaintiffs. The
Board's motion to dismiss was granted on December 6, 1991.
Fields v. Board of Governors, N o . 3:91CV069 ( N . D .
Ohio, filed February 5, 1991). Appeal of denial of
request for information under the Freedom of Information Act.
Citicorp v. Board of Governors,
N o . 9 0 - 4 1 2 4 (2d
Circuit, filed October 4, 1990). Petition for review of
Board order requiring Citicorp to terminate certain
insurance activities conducted pursuant to Delaware
law by an indirect nonbank subsidiary. On June 10,
1991, the court of appeals granted the petition and
vacated the Board's order. On January 13, 1992, the
Supreme Court denied the petition for certiorari
filed by the Independent Insurance Agents of America and others.
Synovus Financial Corp. v. Board of Governors,
No.
89-1394 (D.C.Circuit, 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. On December 20, 1991,
the Court of Appeals vacated the Board's order,
ruling that the Board has no authority over interstate
relocations of national banks. Synovus's petition for
rehearing is pending.
No. CA3-88-2693
MCorp v. Board of Governors,
( N . D . Texas, filed October 10, 1988). Application
for injunction to set aside temporary cease and
desist orders. The case is pending.
1
Financial and Business Statistics
CONTENTS
WEEKLY REPORTING
A3 Guide to Tabular Presentation
Assets and liabilities
A20 All reporting banks
A22 Branches and agencies of foreign banks
Domestic Financial Statistics
MONEY STOCK AND BANK
A4
A5
A6
A7
CREDIT
Reserves, money stock, liquid assets, and debt
measures
Reserves of depository institutions, Reserve Bank
credit
Reserves and borrowings—Depository
institutions
Selected borrowings in immediately available
funds—Large member banks
POLICY
INSTRUMENTS
BANKS
A l l Condition and Federal Reserve note statements
A12 Maturity distribution of loan and security
holdings
MONETARY AND CREDIT
BANKING
INSTITUTIONS
A18 Major nondeposit funds
A19 Assets and liabilities, last-Wednesday-of-month
series
MARKETS
FINANCE
A26
A27
A28
A28
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
A29 U.S. government securities
dealers—Transactions
A30 U.S. government securities dealers—Positions
and financing
A31 Federal and federally sponsored credit
agencies—Debt outstanding
AGGREGATES
A13 Aggregate reserves of depository institutions
and monetary base
A14 Money stock, liquid assets, and debt measures
A16 Bank debits and deposit turnover
A17 Loans and securities—All commercial banks
COMMERCIAL
BANKS
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
FEDERAL
A8 Federal Reserve Bank interest rates
A9 Reserve requirements of depository institutions
A10 Federal Reserve open market transactions
FEDERAL RESERVE
FINANCIAL
COMMERCIAL
SECURITIES MARKETS AND
CORPORATE FINANCE
A32 New security issues—State and local
governments and corporations
A3 3 Open-end investment companies—Net sales
and asset position
A33 Corporate profits and their distribution
A33 Total nonfarm business expenditures on new
plant and equipment
A34 Domestic finance companies—Assets and
liabilities and business credit
A2
Federal Reserve Bulletin • April 1992
Domestic Financial Statistics—Continued
REAL
ESTATE
A35 Mortgage markets
A36 Mortgage debt outstanding
CONSUMER INSTALLMENT
CREDIT
A37 Total outstanding and net change
A3 8 Terms
FLOW OF FUNDS
A39 Funds raised in U.S. credit markets
A41 Direct and indirect sources of funds to credit
markets
A42 Summary of credit market debt outstanding
A43 Summary of credit market claims, by holder
Domestic Nonfinancial Statistics
SELECTED
A54 U.S. reserve assets
A54 Foreign official assets held at Federal Reserve
Banks
A55 Foreign branches of U.S. banks—Balance
sheet data
A57 Selected U.S. liabilities to foreign official
institutions
MEASURES
A44 Nonfinancial business activity—Selected
measures
A45 Labor force, employment, and unemployment
A46 Output, capacity, and capacity utilization
A47 Industrial production—Indexes and gross value
A49 Housing and construction
A50 Consumer and producer prices
A51 Gross domestic product and income
A52 Personal income and saving
REPORTED BY BANKS
IN THE UNITED STATES
A57
A58
A60
A61
Liabilities to and claims on foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A61 Banks' own claims on unaffiliated foreigners
A62 Claims on foreign countries—Combined
domestic offices and foreign branches
REPORTED BY NONBANKING
BUSINESS
ENTERPRISES IN THE UNITED STATES
A63 Liabilities to unaffiliated foreigners
A64 Claims on unaffiliated foreigners
SECURITIES HOLDINGS AND
A65 Foreign transactions in securities
A66 Marketable U.S. Treasury bonds and
notes—Foreign transactions
INTEREST AND EXCHANGE
International Statistics
SUMMARY
STATISTICS
A53 U.S. international transactions—Summary
A54 U.S. foreign trade
TRANSACTIONS
RATES
A67 Discount rates of foreign central banks
A67 Foreign short-term interest rates
A68 Foreign exchange rates
A69 Guide to Statistical Releases and
Special Tables
3
Guide to Tabular Presentation
SYMBOLS AND ABBREVIATIONS
c
e
P
r
*
0
ATS
CD
CMO
FFB
FHA
FHLBB
FHLMC
FmHA
FNMA
FSLIC
G-7
G-10
GNMA
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)
Calculated to be zero
Cell not applicable
Automatic transfer service
Certificate of deposit
Collateralized mortgage obligation
Federal Financing Bank
Federal Housing Administration
Federal Home Loan Bank Board
Federal Home Loan Mortgage Corporation
Farmers Home Administration
Federal National Mortgage Association
Federal Savings and Loan Insurance Corporation
Group of Seven
Group of Ten
Government National Mortgage Association
GNP
HUD
IMF
IO
IPCs
IRA
MMDA
n.a.
n.e.c.
NOW
OCD
OPEC
OTS
PO
REIT
REMIC
RP
RTC
SAIF
SCO
SDR
SMSA
VA
Gross national product
Department of Housing and Urban
Development
International Monetary Fund
Interest only
Individuals, partnerships, and corporations
Individual retirement account
Money market deposit account
Not available
Not elsewhere classified
Negotiable order of withdrawal
Other checkable deposit
Organization of Petroleum Exporting Countries
Office of Thrift Supervision
Principal only
Real estate investment trust
Real estate mortgage investment conduit
Repurchase agreement
Resolution Trust Corporation
Savings Association Insurance Fund
Securitized credit obligation
Special drawing right
Standard metropolitan statistical area
Veterans Administration
GENERAL INFORMATION
In some of the tables, details do not add to totals because of
rounding.
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 obligations of the Treasury. "State and local government" also includes municipalities, special districts, and other political
subdivisions.
A4
DomesticNonfinancialStatistics • April 1992
1.10
RESERVES, M O N E Y STOCK, LIQUID ASSETS, A N D DEBT
MEASURES
Percent annual rate of change, seasonally adjusted 1
1991r
1991r
1992
Monetary and credit aggregate
Q1
Q2
Q3
Q4
Sept.
Oct.
Nov.
Dec.
Jan.
institutions2
1
2
3
4
Reserves of depository
Total
Required
Nonborrowed
Monetary base 3
5
6
7
8
9
Concepts of money, liquid assets, and debt4
Ml
M2
M3
L
Debt
9.1
4.5
8.9
13.3
3.0
8.9
3.4
4.2
7.4
7.9
4.3
6.6
15.3
15.5
19.3
8.4
6.2
10.1
9.1
6.9
15.7
12.3
25.0
9.2
20.3
25.3
24.0
8.2
24.1
22.5
22.2
7.8
13.7
13.4
12.9
9.1
5.2
3.5
3.3
2.8
4.5
7.4
4.3
1.8
-1.8
4.0
7.5
1.1
-1.2
1.1
4.9
11.1
3.3
1.2
.5
5.2
7.6
1.6
-.8
-1.8
5.2
12.2
4.3
2.1
2.0
5.6
14.3
4.9
2.6
2.5
5.5
9.0
2.7
1.2
-2.2
3.7
16.7
3.5
1.6
n.a.
n.a.
2.9
2.8
3.3
-8.9
-1.0
-11.0
.7
-8.2
-.4
-11.9
1.5
-7.7
1.7
-8.3
.5
-5.9
-1.2
-7.4
8.1
9.4
6.5
13.1
.4
-1.9
13.3
3.3
-10.4
16.2
-4.8
-20.5
12.4
-.6
-17.1
17.2
-1.2
-33.5
18.0
-15.0
-18.2
17.4
-15.6
-10.4
20.0
-21.9
-27.1
-.4
-10.8
-32.4
16.7
-14.1
-34.9
9.8
-24.2
-40.4
10.3
-21.3
-37.4
6.3
-19.2
-40.9
12.1
-23.7
-42.4
13.0
-18.7
-31.6
14.1
-19.0
-28.2
24.5
-23.9
-24.5
Money market mutual funds
18 General purpose and broker-dealer
19 Institution-only
16.9
43.0
7.6
28.8
-3.6
11.4
-3.2
37.2
-5.3
30.3
-.7
41.3
-1.0
38.5
.3
38.0
-2.7
22.1
Debt components4
20
21 Nonfederal
10.4
2.7
6.8
3.1
13.8
2.1
12.4
3.0
12.4
2.8
13.6
3.1
11.2
3.6
7.6
2.5
n.a.
n.a.
Nontransaction
10 In M2
11 In M3 only 6
components
Time and savings deposits
Commercial banks
Savings, including MMDAs
Small time
Large time •
Thrift institutions
15 Savings, including MMDAs
16 Small time
17 Large time8,
12
13
14
1. Unless otherwise noted, rates of change are calculated from average
amounts outstanding during preceding month or quarter.
2. Figures incorporate adjustments for discontinuities associated with regulatory changes in reserve requirements. (See also table 1.20.)
3. Seasonally adjusted, break-adjusted monetary base consists of (1) seasonally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally
adjusted currency component of the money stock, plus (3) (for all quarterly
reporters on the "Report of Transaction Accounts, Other Deposits and Vault
Cash" and for all weekly reporters whose vault cash exceeds their required
reserves) the seasonally adjusted, break-adjusted difference between current vault
cash and the amount applied to satisfy current reserve requirements.
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 (OCDs), 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. Seasonally
adjusted Ml is computed by summing currency, travelers checks, demand
deposits, and OCDs, each seasonally adjusted separately.
M2: Ml plus (1) overnight (and continuing-contract) repurchase agreements
(RPs) issued by all depository institutions and overnight Eurodollars issued to
U.S. residents by foreign branches of U.S. banks worldwide, (2) savings and small
time deposits (time deposits—including retail repurchase agreements (RPs)—in
amounts of less than $100,000), and (3) balances in both taxable and tax-exempt
general-purpose and broker-dealer money market funds. Excludes individual
retirement accounts (IRAs) 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. Seasonally adjusted M2 is
computed by adjusting its non-Mi component as a whole and then adding this
result to seasonally adjusted Ml.
M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of
$100,000 or more) issued by all depository institutions, (2) 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 (3) balances in both taxable and
tax-exempt, institution-only money market funds. Excludes amounts held by
depository institutions, the U.S. government, money market funds, and foreign
banks and official institutions. Also excluded is the estimated amount of overnight
RPs and Eurodollars held by institution-only money market funds. Seasonally
adjusted M3 is computed by adjusting its non-M2 component as a whole and then
adding this result to seasonally adjusted M2.
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 fund holdings of these assets. Seasonally adjusted L is computed by
summing U.S. savings bonds, short-term Treasury securities, commercial paper,
and bankers acceptances, each seasonally adjusted separately, and then adding
this result to M3.
Debt: Debt of domestic nonfinancial sectors consists of outstanding creditmarket 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. Data are derived from the Federal
Reserve Board's flow of funds accounts. Data on debt of domestic nonfinancial
sectors are monthly averages, derived by averaging adjacent month-end levels.
Growth rates for debt reflect adjustments for discontinuities over time in the levels
of debt presented in other tables.
5. Sum of (1) overnight RPs and Eurodollars, (2) money market fund balances
(general purpose and broker-dealer), (3) MMDAs, and (4) savings and small time
deposits.
6. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S.
residents, and (4) money market fund balances (institution-only), less (5) a
consolidation adjustment that represents the estimated amount of overnight RPs
and Eurodollars held by institution-only money market funds. This sum is
seasonally adjusted as a whole.
7. Small time deposits—including retail RPs—are those issued in amounts of
less than $100,000. All IRA and Keogh account balances at commercial banks and
thrift institutions are subtracted from small time deposits.
8. Large time deposits are those issued in amounts of $100,000 or more,
excluding those booked at international banking facilities.
9. Large time deposits at commercial banks less those held by money market
funds, depository institutions, and foreign banks and official institutions.
Money Stock and Bank Credit
1.11
RESERVES OF DEPOSITORY INSTITUTIONS A N D RESERVE BANK CREDIT
A5
1
Millions of dollars
Monthly averages of
daily figures
Weekly averages of daily figures for week ending
1991
1992
Nov.
Dec.
Jan.
Dec. 18
Dec. 25
Jan. 1
Jan. 8
Jan. 15
Jan. 22
1 Reserve Bank credit outstanding
U.S. government securities
2
Bought outright-system account
3
Held under repurchase agreements . . .
Federal agency obligations
Bought outright
4
5
Held under repurchase agreements . . .
6
Acceptances
Loans to depository institutions
7
Adjustment credit
8
Seasonal credit
9
Extended credit
10
Float
11
Other Federal Reserve assets
300,929
312,013
307,590
306,457
314,947
320,626
312,035
307,108
306,410
261,764
1,004
266,743
4,993
264,753
1,489
266,780
0
266,439
7,754
265,519
13,842
266,736
3,335
265,888
0
264,615
562
6,130
15
0
6,081
6,005
32
0
6,090
0
0
6,090
273
0
6,045
419
0
6,045
33
0
6,015
0
0
6,001
144
0
18
86
1
635
31,276
84
39
1
845
33,084
279
16
1
797
34,219
12
42
1
765
32,767
137
39
1
730
33,483
141
27
1
666
33,965
857
16
0
935
34,078
47
10
0
971
34,176
199
15
0
808
34,199
12 Gold stock
13 Special drawing rights certificate account .
14 Treasury currency outstanding
11,059
10,018
20,965
11,058
11,058
11,058
11,058
10,018
10,018
10,018
21,008
10,018
10,018
10,018
21,039
10,018
21,000
10,018
21,001
21,017
21,031
21,045
21.059
299,098
633
304,649
632
303,218
666
303,668
630
305,668
632
307,623
633
306,786
637
303,847
674
301,959
677
5,731
209
7,816
284
7,180
369
5,838
217
9,723
295
13,005
520
6,147
453
5,455
389
6,072
291
3,456
220
4,140
268
4,332
262
4,372
223
4,249
214
4,109
654
4,124
183
4,204
238
4,321
216
Jan. 29
SUPPLYING RESERVE FUNDS
11,058
11,058
11,058
12
0
11.058
ABSORBING RESERVE FUNDS
15 Currency in circulation
16 Treasury cash holdings
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
8,580
9,204
8,440
8,709
8,849
8,593
8,277
8,592
8,538
24,785
27,098
25,238
24,875
27,403
27,582
27,535
25,831
26,471
Wednesday figures
End-of-month figures
Nov.
1991
1992
1991
Dec.
Jan.
Dec. 18
1992
Dec. 25
Jan.
Jan. 22
Jan. 8
Jan. 29
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding
U.S. government securities 2
2
Bought outright-system account
3
Held under repurchase agreements . . .
Federal agency obligations
4
Bought outright
5
Held under repurchase agreements . . .
6
Acceptances
Loans to depository institutions
7
Adjustment credit
8
Seasonal credit
9
Extended credit
10
Float
11
Other Federal Reserve assets
12 Gold stock
13 Special drawing rights certificate account .
14 Treasury currency outstanding
304,408
323,906
306,533
308,118
317,319
324,100
313,432
306,589
312,057
265,212
0
266,486
15,345
262,619
3,529
268,084
0
265,932
10,002
266,486
15,345
266,189
0
264,909
0
265,146
3,932
6,090
0
0
6,045
553
0
5,960
135
0
6,090
0
0
6,090
400
0
6,045
553
0
6,045
0
0
6,011
0
0
5,976
83
0
59
45
1
660
32,341
194
23
1
731
34,529
21
3
198
33,980
14
45
2
1,144
32,740
153
28
1
975
33,738
194
23
1
997
34,456
5,459
14
0
1,071
34,655
174
10
0
1,508
33,977
1,142
17
0
1,140
34,622
11,058
11,059
10,018
10,018
10,018
10,018
21,000
10,018
21,008
10,018
21,017
21,060
10,018
20,996
21,017
21,031
21,045
21.059
301,830
636
307,759
636
299,879
684
304,446
631
306,619
634
307,759
636
305,587
673
302,964
677
301,709
677
6,317
346
17,697
968
10,828
321
7,494
235
9,834
268
17,697
968
6,262
224
5,002
406
9,163
307
4,033
221
4,118
1,706
4,560
251
4,372
219
4,249
200
4,109
1,706
,124
144
4,204
207
4,321
201
11,058
11,059
11,058
10,018
11,058
10,018
11,058
11,058
11.058
ABSORBING RESERVE FUNDS
15 Currency in circulation
16 Treasury cash holdings
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
10,156
8,113
7,629
8,391
8,961
8,113
8,427
8,248
8,383
22,942
25,004
24,516
24,405
28,639
25,207
30,097
27,002
29,432
1. For amounts of cash held as reserves, see table 1.12. Components may not
sum to totals because of rounding.
2. 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.
3. Excludes required clearing balances and adjustments to compensate for
float,
A6
DomesticNonfinancialStatistics • April 1992
1.12
RESERVES A N D BORROWINGS
Depository Institutions 1
Millions of dollars
Prorated monthly averages of biweekly averages
Reserve classification
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks
Total vault cash'
Applied vault cash
Surplus vault cash
Total reserves 6
Required reserves
Excess reserve balances at Reserve Banks 7 . . .
Total borrowings at Reserve Banks 8
Seasonal borrowings
Extended credit
1989
1990
1991
Dec.
Dec.
Dec.
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
35,436
29,828r
27,374
2,454r
62,810
61,887
923
265
84
20
30,237
31,786r
28,884
2,903r
59,120
57,456
1,664
326
76
23
26,659r
32,513
28,872
3,641
55,532
54,553rr
979
192
38
1
23,271
31,317r
27,389
3,928r
50,660
49,754
906
607
317
46
22,810
31,779
27,798
3,981
50,607
49,521
1,086
764
331
300
23,447
31,536r
27,680
3,856r
51,127
50,198
929
645
287
302
23,197
32,299*
28,386
3,913r
51,584
50,501
1,083
261
211
12
25,004
31,714r
28,053
3,661r
53,057
52,165
892
108
86
1
26,659"
32,513
28,872
3,641
55,532
54,553r
9791
192
38
1
25,416
34,136
30,397
3,739
55,813
54,809
1,004
233
17
1
1991
1992
Biweekly averages of daily figures for weeks ending
1992
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks
Total vault cash 3
Applied vault cash
Surplus vault cash 5
Total reserves 6
Required reserves
Excess reserve balances at Reserve Banks . . .
Total borrowings at Reserve Banks 8
Seasonal borrowings
Extended credit
Oct. 16
Oct. 30
Nov. 13
23,418
32,330r
28,506
3,824r
51,924
50,908
1,016
290
228
7
22,980
32,376r
28,377
3,999r
51,357
50,191
1,167
225
191
14
25,494
30,844r
27,326
3,518r
52,820
51,907
913
114
98
2
1. Data in this table also appear in the Board's H.3 (502) weekly statistical
release. For ordering address, see inside front cover. Components may not sum to
totals because of rounding.
2. Excludes required clearing balances and adjustments to compensate for float
and includes other off-balance-sheet " a s - o f ' adjustments.
3. Total "lagged" vault cash held by depository institutions subject to reserve
requirements. Dates refer to the maintenance periods during which the vault cash
can be used to satisfy reserve requirements. Under contemporaneous reserve
requirements, maintenance periods end thirty days after the lagged computation
periods during which the balances are held.
4. All vault cash held during the lagged computation period by "bound"
institutions (that is, those whose required reserves exceed their vault cash) plus
the amount of vault cash applied during the maintenance period by "nonbound"
24,155
32,656r
28,825
3,832r
52,979
52,045
934
103
84
2
26,839
31,093
27,607
3,486
54,446
53,842
605
110
45
1
Dec. 25
Jan. 8 r
Jan. 22
Feb. 5
26,133
33,284
29,554
3,730
55,687
54,484
1,203
116
41
1
27,557
33,318
29,601
3,717
57,158
56,020
1,138
521
22
1
26,147
33,157
29,732
3,425
55,879
54,966
913
136
13
0
22,375
36,386
32,139
4,248
54,514
53,487
1,027
130
20
2
institutions (that is, those whose vault cash exceeds their required reserves) to
satisfy current reserve requirements.
5. Total vault cash (line 2) less applied vault cash (line 3).
6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash
(line 3).
7. Total reserves (line 5) less required reserves (line 6).
8. Also includes adjustment credit.
9. 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.
Money Stock and Bank Credit
1.13
SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE F U N D S
A7
Large Banks 1
Millions of dollars, averages of daily figures
1991, week ending Monday
Source and maturity
1
2
3
4
Federal funds purchased, repurchase agreements, and
other selected borrowings
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
official institutions, and U.S. government agencies
For one day or under continuing contract
For all other maturities
Sept. 30
Oct. 7
Oct. 14
Oct. 21
Oct. 28
Nov. 4
Nov. 11
Nov. 18
Nov. 25
77,654
15,270
83,101
14,569
80,744
15,267
81,028
14,915
75,541
15,471
83,958
15,872
81,717
17,536
84,312
17,012
75,936
16,947
22,030
20,396
22,966
20,656
23,064
21,336
23,249
20,191
20,383
19,280
23,901
19,582
20,765
20,136
22,199
21,513
22,555
21,466
Repurchase agreements on U.S. government and federal
agency securities
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
9,336
16,165
10,461
15,961
11,663
16,349
12,207
16,663
11,351
17,566
12,629
17,475
11,676
16,688
13,553
15,085
12,668
15,264
25,459
11,520
25,618
11,028
25,484
11,554
24,372
11,231
24,265
11,824
25,174
11,634
23,862
11,329
24,154
10,991
24,608
11,232
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
47,539
18,343
47,607
19,356
42,467
17,774
46,359
16,985
40,334
16,747
49,190
21,939
46,558
19,883
49,708
20,659
40,723
19,686
5
6
7
8
1. Banks with assets of $4 billion or more as of Dec. 31, 1988.
Data in this table also appear in the Board's H.5 (507) weekly statistical release.
For ordering address, see inside front cover.
2. Brokers and nonbank dealers in securities, other depository institutions,
foreign banks and official institutions, and U.S. government agencies.
A8
DomesticNonfinancialStatistics • April 1992
1.14
FEDERAL RESERVE BANK INTEREST RATES
Percent per year
Current and previous levels
Adjustment credit1
Federal Reserve
Bank
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City,
Dallas
San Francisco . . .
Seasonal credit2
On
2/28/92
Effective date
Previous rate
On
2/28/92
3.5
12/20/91
12/20/91
12/20/91
12/20/91
12/20/91
12/20/91
12/20/91
4.5
4.05
12/24/91
12/23/91
12/20/91
12/20/91
12/20/91
3.5
4.5
4.05
Extended credit3
Effective date
Previous rate
On
2/28/92
Effective date
Previous rate
2/20/92
2/20/92
2/20/92
2/20/92
2/20/92
2/20/92
2/20/92
4.10
4.55
2/20/92
2/20/92
2/20/92
2/20/92
2/20/92
2/20/92
2/20/92
4.60
2/20/92
2/20/92
2/20/92
2/20/92
2/20/92
4.10
4.55
2/20/92
2/20/92
2/20/92
2/20/92
2/20/92
4.60
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
1980—Feb. 15
19
May 29
30
June 13
16
29
July 28
Sept. 26
Nov. 17
Dec. 5
Range (or
level)—
All F.R.
Banks
6
F.R.
Bank
of
N.Y.
6
6-6.5
6.5
6.5-7
7
7-7.25
7.25
7.75
8
8-8.5
8.5
8.5-9.5
9.5
6.5
6.5
7
7
7.25
7.25
7.75
8
8.5
8.5
9.5
9.5
10
10-10.5
10.5
10.5-11
11
11-12
12
10
10.5
10.5
11
11
12
12
12-13
13
12-13
12
11-12
11
10
10-11
11
12
12-13
13
13
13
12
11
11
10
10
11
12
13
Effective
1981-—May
5
Nov.
7
6
4
Dec.
-July
1982--July
70
73
7
3
16
77
30
Oct. 17
13
Nov. 77
76
Dec. 14
15
17
Aug.
13-14
14
13-14
13
12
11.5-12
11.5
11-11.5
11
10.5
10-10.5
10
9.5-10
9.5
9-9.5
9
8.5-9
8.5-9
8.5
F.R.
Bank
of
N.Y.
14
14
13
13
12
11.5
11.5
11
11
10.5
10
10
9.5
9.5
9
9
9
8.5
8.5
1984-—Apr.
—Apr.
9
n
Nov. 71
76
Dec. 74
8.5-9
9
8.5-9
8.5
8
9
9
8.5
8.5
8
1985-—May
—May 70
74
7.5-8
7.5
7.5
7.5
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. 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.
2. Seasonal credit is available to help relatively small depository institutions
meet regular seasonal needs for funds that arise from a clear pattern of intrayearly movements in their deposits and loans and that cannot be met through
special industry lenders. The discount rate on seasonal credit takes into account
rates on market sources of funds and ordinarily is reestablished on the first
business day of each two-week reserve maintenance period; however, it is never
less than the discount rate applicable to adjustment credit.
3. Extended credit may be made available to depository institutions when
similar assistance is not reasonably available from other sources, including special
industry lenders. Such credit may be provided when exceptional circumstances
(including sustained deposit drains, impaired access to money market funds, or
sudden deterioration in loan repayment performance) or practices involve only a
particular institution, or to meet the needs of institutions experiencing difficulties
adjusting to changing market conditions over a longer period (particularly at times
of deposit disintermediation). The discount rate applicable to adjustment credit
Range(or
level)—
All F.R.
Banks
Effective date
Range (or
level)—
All F.R.
Banks
F.R.
Bank
of
N.Y.
1986—Mar. 7
10
Apr. 21
July 11
Aug. 21
22
7-7.5
7
6.5-7
6
5.5-6
5.5
7
7
6.5
6
5.5
5.5
1987—Sept. 4
11
5.5-6
6
6
6
1988—Aug.
9
11
6-6.5
6.5
6.5
6.5
1989—Feb. 24
27
6.5-7
7
7
7
1990—Dec. 19
1991—Feb.
Apr.
May
Sept.
Sept.
Nov.
Dec.
1
4
30
2
13
17
6
7
20
24
In effect Feb. 28, 1992
6.5
6.5
6-6.5
6
5.5-6
5.5
5-5.5
5
4.5-5
4.5
3.5-4.5
3.5
6
6
5.5
5.5
5
5
4.5
4.5
3.5
3.5
3.5
3.5
ordinarily is charged on extended-credit loans outstanding less than thirty days;
however, at the discretion of the Federal Reserve Bank, this time period may be
shortened. Beyond this initial period, a flexible rate somewhat above rates on
market sources of funds is charged. The rate ordinarily is reestablished on the first
business day of each two-week reserve maintenance period, but it is never less
than the discount rate applicable to adjustment credit plus 50 basis points.
4. For earlier data, see the following publications of the Board of Governors:
Banking and Monetary Statistics, 1914-1941, and 1941-1970; and the 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. A surcharge of 2 percent was reimposed on Nov. 17, 1980; 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 thirteen week period.
The surcharge was eliminated on Nov. 17, 1981.
Policy Instruments
1.15
A9
RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS 1
Requirements
Type of deposit 2
Net transaction accounts3
1 $0 million-$42.2 million
2 More than $42.2 million
1. 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 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. 17, 1991, the exemption was raised from $3.4
million to $3.6 million. The exemption applies in the following order: (1) net
negotiable order of withdrawal (NOW) accounts (NOW accounts less allowable
deductions); and (2) net other transaction accounts. The exemption applies only to
accounts that would be subject to a 3 percent reserve requirement.
3. Transaction accounts include all deposits against 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.
Percent of
deposits
Effective date
3
12
12/17/91
12/17/91
0
12/27/90
0
12/27/90
However, money market deposit accounts (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 may be checks, are not
transaction accounts (such accounts are savings deposits).
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. 17,
1991, for institutions reporting quarterly, and Dec. 24, 1991, for institutions
reporting weekly, the amount was increased from $41.1 million to $42.2 million.
4. For institutions that report weekly, the reserve requirement on nonpersonal
time deposits with an original maturity of less than 1 Vi years was reduced from 3
percent to IV2 percent for the maintenance period that began Dec. 13, 1990, and
to zero for the maintenance period that began Dec. 27, 1990. The reserve
requirement on nonpersonal time deposits with an original maturity of IVi years
or more has been zero since Oct. 6, 1983.
For institutions that report quarterly, the reserve requirement on nonpersonal
time deposits with an original maturity of less than 1 Vi years was reduced from 3
percent to zero on Jan. 17, 1991.
5. The reserve requirement on Eurocurrency liabilities was reduced from 3
percent to zero in the same manner and on the same dates as were the reserve
requirement on nonpersonal time deposits with an original maturity of less than
W2 years (see note 4).
A10
1.17
DomesticNonfinancialStatistics • April 1992
FEDERAL RESERVE OPEN MARKET
TRANSACTIONS1
Millions of dollars
1991
Type of transaction
1989
1990
1991
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
U . S . TREASURY SECURITIES
Outright transactions (excluding matched
transactions)
1
2
3
4
Treasury bills
Gross purchases
Gross sales
Exchanges
Redemptions
Others within one year
Gross purchases
Gross sales
7
Maturity shifts
8 Exchanges
9 Redemptions
5
6
14,284
12,818
231,211
12,730
24,739
7,291
241,086
4,400
20,158
120
277,314
1,000
37
0
19,680
0
1,359
0
25,ISO1
0
5,776
0
28,009
0
529
0
19,508
0
2,198
0
25,409
0
2,823r
0
24,141
0
837
0
21,967
0
327
0
28,848
-25,783
500
425
0
25,638
-27,424
0
3,043
0
24,454
-28,090
1,000
0
0
0
0
0
625
0
1,478
-3,136
0
340
0
3,425
-2,443
0
200
0
1,131
-2,202
0
0
0
2,002
-2,034
0
178
0
1,655
-2,585
0
0
0
1,570
-3,562
0
10
11
12
13
One to five years
Gross purchases
Gross sales
Maturity shifts
Exchanges
1,436
490
-25,534
23,250
250
200
-21,770
25,410
6,583
0
-21,211
24,594
0
0
0
0
0
0
-1,192
2,601
0
0
-3,425
1,993
650
0
-1,131
2,202
0
0
-1,877
1,686
2,133
0
-1,492
2,135
300
0
-1,570
3,562
14
13
16
17
Five to ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges
287
29
-2,231
1,934
0
100
-2,186
789
1,280
0
-2,037
2,894
0
0
0
0
0
0
-286
534
0
0
688
300
0
0
0
0
0
0
-126
347
880
0
-163
300
0
0
0
0
18
19
20
21
More than ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges
284
0
-1,086
600
0
0
-1,681
1,226
375
0
-1,209
600
0
0
0
0
0
0
0
0
0
0
-688
150
0
0
0
0
0
0
0
0
375
0
0
150
0
0
0
0
22
23
24
All maturities
Gross purchases
Gross sales
Redemptions
16,617
13,337
13,230
25,414
7,591
4,400
31,439
120
1,000
37
0
0
1,984
0
0
6,116
0
0
1,379
0
0
2,198
0
0
6,390*
0
0
1,137
0
0
1,323,480
1,326,542
1,369,052
1,363,434
1,570,456
1,571,534
118,903
118,239
120,292
121,803
112,414
110,280
116,266
118,481
137,073
135,281
98,063
97,925
129,518
132,688
219,632
202,551
310,084
311,752
9,440
8,478
35,149
36,111
16,847
16,847
40,447
40,447
12,432
3,718
14,165
22,879
Matched transactions
25 Gross sales
26 Gross purchases
118,127
118,263
2
Repurchase agreements
27 Gross purchases
28 Gross sales
51,345
36,000
r
-10,055
24,886
29,729
335
2,532
3,981
3,595
9,121
—2,462
16,619
0
0
442
0
0
183
0
5
292
0
0
0
0
0
55
0
0
0
0
5
0
0
0
14
0
51r
0
0
45
Repurchase agreements2
33 Gross purchases
34 Gross sales
38,835
40,411
41,836
40,461
22,807
23,595
1,225
748
3,245
3,722
537
537
3,061
3,061
714
695
275
294
1,744
1,191
35 Net change in federal agency obligations
-2,018
1,192
-1,085
477
-532
0
-5
5
-70*
508
36 Total net change in System Open Market
Account
-12,073
26,078
28,644
812
2,000
3,981
3,590
9,126
—2,532r
17,127
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 sum to
totals because of rounding.
2. In July 1984 the Open Market Trading Desk discontinued accepting bankers
acceptances in repurchase agreements,
Federal Reserve Banks
1.18
FEDERAL RESERVE BANKS
All
Condition and Federal Reserve Note Statements 1
Millions of dollars
Wednesday
End of month
Jan. 1
Jan. 8
1992
1991
1992
Account
Jan. 15
Jan. 22
Jan. 29
Nov. 29
Dec. 31
Jan. 31
Consolidated condition statement
ASSETS
1 Gold certificate account
2 Special drawing rights certificate account
3 Coin
Loans
4 To depository institutions
5 Other
6 Acceptances held under repurchase agreements
Federal agency obligations
7 Bought outright
8 Held under repurchase agreements
11,059
10,018
528
11,058
10,018
522
11,058
10,018
548
11,058
10,018
574
11,058
10,018
600
11,058
10,018
557
11,059
10,018
528
11,058
10,018
614
218
0
0
5,473
0
0
184
0
0
1,159
0
0
119
0
0
106
0
0
218
0
0
112
0
0
6,045
553
6,045
0
6,011
0
5,976
83
5,960
0
6,090
0
6,045
553
5,960
135
281,831
266,189
264,909
269,078
261,957
265,213
281,831
266,148
10 Bought outright2
11 Bills
12 Notes
13 Bonds
14 Held under repurchase agreements
266,486
132,635
101,520
32,331
15,345
266,189
132,338
101,520
32,331
0
264,909
131,058
101,520
32,331
0
265,146
131,295
101,520
32,331
3,932
261,957
128,106
101,520
32,331
0
265,213
131,661
101,220
32,332
0
266,486
132,635
101,520
32,332
15,345
262,619
128,767
101,520
32,332
3,529
15 Total loans and securities
288,647
277,706
271,104
276,295
268,036
271,407
288,647
272,354
7,678
987
6,897
989
6,479
989
10,055
992
5,190
991
4,059
976
8,286
987
5,034
994
27,626
5,911
27,646
5,237
27,683
5,349
27,747
6,031
27,771
5,906
26,739
4,705
27,626
5,911
26,928
6,130
352,453
340,073
333,227
342,771
329,571
329,519
353,061
333,129
9 Total U.S. Treasury securities
16 Items in process of collection
17 Bank premises
Other assets
18 Denominated in foreign currencies
19 All other 4
20 Total assets
LIABILITIES
287,906
285,811
283,144
281,902
280,422
282,027
287,906
280,117
22 Total deposits
49,784
40,271
36,735
44,139
36,254
34,129
49,783
40,595
23
24
25
26
29,413
17,697
968
1,706
33,640
6,262
224
144
31,120
5,002
406
207
34,468
9,163
307
201
26,432
9,048
554
219
27,246
6,317
346
221
29,413
17,697
968
1,706
29,195
10,828
321
252
6,651
2,810
5,574
2,645
5,101
2,556
8,348
2,724
4,575
2,594
3,207
2,947
7,259
2,810
4,788
2,558
347,150
334,300
327,535
337,113
323,845
322,310
347,758
328,058
2,652
2,652
0
2,652
2,652
470
2,661
2,652
380
2,671
2,652
336
2,678
2,652
396
2,642
2,423
2,144
2,652
2,652
0
2,683
2,383
6
33 Total liabilities and capital accounts
352,453
340,073
333,227
342,771
329,571
329,519
353,061
333,129
34 MEMO: Marketable U.S. Treasury securities held in
custody for foreign and international accounts
251,209
252,853
251,021
257,523
258,793
254,484
251,209
266,801
21 Federal Reserve notes
Depository institutions
U.S. Treasury—General account
Foreign—Official accounts
Other
27 Deferred credit items
28 Other liabilities and accrued dividends
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 Federal Reserve Bank
37 Federal Reserve notes, net
38
39
40
41
Collateral held against notes, net:
Gold certificate account
Special drawing rights certificate account
Other eligible assets
U.S. Treasury and agency securities
42 Total collateral
366,468
78,562
287,906
365,559
79,749
285,811
364,580
81,437
283,144
364,205
82,303
281,902
364,259
83,837
280,422
371,067
89,040
282,027
366,468
78,562
287,906
364,621
84,504
280,117
11,059
10,018
0
266,829
11,058
10,018
0
264,735
11,058
10,018
0
262,067
11,058
10,018
0
260,826
11,058
10,018
0
259,346
11,058
10,018
0
260,951
11,059
10,018
0
266,829
11,058
10,018
0
259,041
287,906
285,811
283,144
281,902
280,422
282,027
287,906
280,117
1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly
statistical release. For ordering address, see inside front cover. Components may
not sum 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 ninety days.
5. Includes exchange-translation account reflecting the monthly revaluation at
market exchange rates of foreign-exchange commitments.
A12
1.19
DomesticNonfinancialStatistics • April 1992
FEDERAL RESERVE BANKS
Maturity Distribution of Loan and Security Holding
1
Millions of dollars
End of month
Wednesday
1991
1992
Type and maturity grouping
Jan. 1
Jan. 8
1992
Jan. 15
Jan. 22
Jan. 29
Nov. 29
Dec. 31
Jan. 31
1 Total loans
218
5,473
184
1,159
119
106
218
112
2
3
4
217
2
0
5,470
3
0
181
3
0
1,159
0
0
119
0
0
84
22
0
217
2
0
112
0
0
5 Total acceptances
0
0
0
0
0
0
0
0
6
7
8
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
281,831
266,189
264,909
269,078
261,957
265,212
281,831
262,619
21,109
66,759
90,655
64,299
14,469
24,540
12,037
62,763
88,080
64,299
14,469
24,540
10,551
65,149
85,769
64,103
14,796
24,540
13,708
64,206
87,724
64,104
14,796
24,540
11,678
60,009
86,831
64,104
14,7%
24,540
5,174
69,572
88,931
62,527
14,469
24,540
21,109
66,759
90,655
64,299
14,469
24,540
8,864
64,603
86,028
63,788
14,7%
24,540
6,597
6,045
6,011
6,059
5,960
6,090
6,597
5,960
753
811
1,329
2,508
1,007
188
60
976
1,304
2,508
1,008
188
101
931
1,284
2,683
858
154
257
823
1,349
2,635
841
154
108
867
1,343
2,647
841
154
308
565
1,430
2,608
990
188
753
811
1,329
2,508
1,008
188
108
867
1,343
2,647
841
154
Within fifteen days
Sixteen days to ninety days
Ninety-one days to one year
Within fifteen days
Sixteen days to ninety days
Ninety-one days to one year
9 Total U.S. Treasury securities
10
11
12
13
14
15
Within fifteen days 2
Sixteen days to ninety days
Ninety-one days to one year
One year to five years
Five years to ten years
More than ten years
16 Total Federal agency obligations
17
18
19
20
21
22
Within fifteen days 2
Sixteen days to ninety days
Ninety-one days to one year
One year to five years
Five years to ten years
More than ten years
1. Components may not sum to totals because of rounding.
fifteen
2. Holdings under repurchase agreements are classified as maturing within
days in accordance with the maximum possible maturity of the agreements.
Monetary and Credit Aggregates
A13
1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS A N D MONETARY BASE 1
Billions of dollars, averages of daily figures
1991
Item
1988
Dec.
1989
Dec.
1990
Dec.
June
Total reserves 3
Nonborrowed reserves 4
^
Nonborrowed reserves plus extended credit
Required reserves
Monetary base 6
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Seasonally adjusted
ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS 2
1
2
3
4
5
1992
1991
Dec.
49.10
53.75
50.35
50.41
51.15
51.82
47.60
47.73
50.89
52.69
53.75
48.78
53.56
50.01
49.80
50.50
45.88
47.46
50.12
51.56
52.59
53.56
48.80
53.56
50.01
49.85
50.80
47.12
47.48
50.42
51.57
52.59
53.56
47.44
52.77
49.34
49.50
50.22
46.55
46.81
49.80
50.73
51.80
52.77
263.77r 274.57r 300.35r 325.22r 312.47r 314.22r 316.68r 318.50r 320.93r 323.13r 325.22r
54.37
54.13
54.13
53.36
327.70
Not seasonally adjusted
6
7
8
9
10
Total reserves
Nonborrowed reserves
Nonborrowed reserves plus extended credit
Required reserves
Monetary base 9
49.00
47.29
48.53
47.96
267.46
49.18
48.91
48.93
48.26
278.30
50.58 55.38
50.25 55.18
50.28 55.19
48.91 54.40
304.04 329.35r
50.32
49.98
49.99
49.31
314.00
50.56
49.95
50.00
49.65
316.14
50.49
49.73
50.03
49.41
316.68
50.99
50.35
50.65
50.07
317.28
51.43
51.17
51.18
50.35
319.14
52.89 55.38
52.78 55.18
52.78 55.19
51.99 54.40
323.06 329.35r
55.79
55.56
55.56
54.79
328.77
63.75
62.03
63.27
62.70
283.00
1.05
1.72
62.81
62.54
62.56
61.89
292.55
.92
.27
59.12 55.53
58.79 55.34
58.82 55.34
57.46 54.55
313.70 333.61r
1.66
.98
.33
.19
50.41
50.07
50.08
49.40
317.25
1.01
.34
50.66
50.05
50.10
49.75
319.46
.91
.61
50.61
49.84
50.14
49.52
320.07
1.09
.76
51.13
50.48
50.78
50.20
320.70
.93
.65
51.58
51.32
51.33
50.50
322.71
1.08
.26
53.06 55.53
52.95 55.34
52.95 55.34
52.16 54.55
326.88 333.61r
.89
.98
.11
.19
55.81
55.58
55.58
54.81
333.11
N O T ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS
11
12
13
14
15
16
17
Total reserves 11
Nonborrowed reserves
Nonborrowed reserves plus extended credit
Required reserves
Monetary base 12
Excess reserves
Borrowings from the Federal Reserve
1. Latest monthly and biweekly figures are available from the Board's H.3 (502)
weekly 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 reflect adjustments for discontinuities, or "breaks," associated with
regulatory changes in reserve requirements.
3. Seasonally adjusted, break-adjusted total reserves equal seasonally
adjusted, break-adjusted required reserves (line 4) plus excess reserves (line 16).
4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally
adjusted, break-adjusted total reserves (line 1) less total borrowings of depository
institutions from the Federal Reserve (line 17).
5. 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.
6. The seasonally adjusted, break-adjusted monetary base consists of (1)
seasonally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally
adjusted currency component of the money stock, plus (3) (for all quarterly
reporters on the "Report of Transaction Accounts, Other Deposits and Vault
Cash" and for all those weekly reporters whose vault cash exceeds their required
reserves) the seasonally adjusted, break-adjusted difference between current vault
cash and the amount applied to satisfy current reserve requirements.
7. Break-adjusted total reserves equal break-adjusted required reserves (line 9)
plus excess reserves (line 16).
8. To adjust required reserves for discontinuities that are due to regulatory
1.00
.23
changes in reserve requirements, a multiplicative procedure is used to estimate
what required reserves would have been in past periods had current reserve
requirements been in effect. Break-adjusted required reserves include required
reserves against transactions deposits and nonpersonal time and savings deposits
(but not reservable nondeposit liabilities).
9. The break-adjusted monetary base equals (1) break-adjusted total reserves
(line 6), plus (2) the (unadjusted) currency component of the money stock, plus (3)
(for all quarterly reporters on the "Report of Transaction Accounts, Other
Deposits and Vault Cash" and for all weekly reporters whose vault cash exceeds
their required reserves) the break-adjusted difference between current vault cash
and the amount applied to satisfy current reserve requirements.
10. Reflects actual reserve requirements, including those on nondeposit liabilities, with no adjustments to eliminate the effects of discontinuities associated
with changes in reserve requirements.
11. Reserve balances with Federal Reserve Banks plus vault cash used to
satisfy reserve requirements.
12. The monetary base, not break-adjusted and not seasonally adjusted,
consists of (1) total reserves (line 11), plus (2) required clearing balances and
adjustments to compensate for float at Federal Reserve Banks, plus (3) the
currency component of the money stock, plus (4) (for all quarterly reporters on
the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all
those weekly reporters whose vault cash exceeds their required reserves) the
difference between current vault cash and the amount applied to satisfy current
reserve requirements. Since the introduction of changes in reserve requirements
(CRR), currency and vault cash figures have been measured over the computation
periods ending on Mondays.
13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14).
A14
1.21
DomesticNonfinancialStatistics • April 1992
MONEY STOCK, LIQUID ASSETS, A N D DEBT MEASURES 1
Billions of dollars, averages of daily figures
1991r
Item
1988
Dec. r
1989
Dec. r
1990
Dec. r
1992
1991
Dec/
Oct.
Nov.
Dec.
Jan
Seasonally adjusted
1
1
2
3
4
5
Measures
Ml
M2
M3
L
Debt
6
7
8
9
Ml components
Currency
Travelers checks
Demand deposits5
Other checkable deposits 6
786.9
3,071.1
3,923.1
4,677.9
9,362.5
794.1
3,227.3
4,059.8
4,891.5
10,113.3
826.1
3,332.4
4,114.4
4,966.7
10,791.0
898.1
3,442.2
4,175.1
4,991.9
11,292.4
880.9
3,420.3
4,161.8
4,990.7
11,206.5
891.4
3,434.4
4,170.8
5,001.0
11,257.5
898.1
3,442.2
4,175.1
4,991.9
11,292.4
910.6
3,452.1
4,180.5
n.a.
n.a.
212.3
7.5
286.5
280.6
222.6
7.4
279.0
285.1
246.8
8.3
277.1
293.9
267.3
8.2
289.5
333.2
264.8
7.9
283.8
324.5
266.0
8.0
287.6
329.7
267.3
8.2
289.5
333.2
269.4
8.3
293.9
339.0
2,284.2
852.0
2,433.2
832.5
2,506.3
782.1
2,544.1
732.8
2,539.4
741.5
2,543.0
736.4
2,544.1
732.8
2,541.6
728.3
Commercial banks
12 Savings deposits, including MMDAs
13 Small time deposits
14 Large time deposits 10 ' 11
542.7
447.0
366.9
541.4
531.0
398.2
581.9
599.8
380.4
664.9
598.5
354.0
645.7
614.1
362.6
655.4
606.4
357.1
664.9
598.5
354.0
676.0
587.6
346.0
Thrift institutions
15 Savings deposits, including MMDAs
16 Small time deposits 9
17 Large time deposits 10
383.5
585.9
174.3
349.7
617.5
161.1
338.8
562.3
120.9
377.7
466.6
83.1
369.3
481.6
87.4
373.3
474.1
85.1
377.7
466.6
83.1
385.4
457.3
81.4
Money market mutual funds
18 General purpose and broker-dealer
19 Institution-only
241.9
91.0
316.3
107.2
348.9
133.7
361.5
179.1
361.7
168.2
361.4
173.6
361.5
179.1
360.7
182.4
2,101.5
7,261.0
2,249.9
7,863.4
2,493.6
8,297.3
2,766.9
8,525.5
2,724.0
8,482.5
2,749.5
8,508.0
2,766.9
8,525.5
Nontransaction
10 In M2
11 In M38
components
Debt components
20 Federal debt
21 Nonfederal debt
n.a.
n.a.
Not seasonally adjusted
22
23
24
25
26
Measures
Ml
M2
M3
L
Debt
27
28
29
30
Ml components
Currency
Travelers checks 4
Demand deposits5
Other checkable deposits 6
804.1
3.083.8
3,934.7
4,695.0
9.347.9
811.9
3,240.0
4,070.3
4,910.7
10,098.9
844.1
3,345.2
4,124.5
4,986.5
10,778.2
917.3
3,456.1
4,185.8
5,013.1
11,280.8
875.4
3,415.7
4,152.7
4,980.7
11,172.7
893.9
3,437.6
4,173.0
5,008.9
11,232.6
917.3
3,456.1
4,185.8
5,013.1
11,280.8
918.3
3,460.1
4,185.6
n.a.
n.a.
214.8
6.9
298.9
283.5
225.3
6.9
291.5
288.1
249.5
7.8
289.9
296.9
270.0
7.7
303.1
336.5
263.1
8.0
283.7
320.6
266.3
7.7
291.1
328.8
270.0
7.7
303.1
336.5
267.9
7.9
300.0
342.5
2,279.7
850.8
2,428.1
830.3
2,501.1
779.3
2,538.8
729.7
2,540.3
737.0
2,543.7
735.3
2,538.8
729.7
2,541.8
725.5
Commercial banks
33 Savings deposits, including MMDAs
34 Small time deposits
35 Large time deposits 10 ' 11
543.8
446.0
365.9
543.0
529.5
397.1
580.0
599.7
379.4
662.3
598.7
352.8
644.6
615.2
362.8
655.3
606.9
356.9
662.3
598.7
352.8
672.4
589.4
343.6
Thrift institutions
36 Savings deposits, including MMDAs
37 Small time deposits
38 Large time deposits 10
381.1
584.9
175.2
347.6
616.0
162.0
337.7
562.2
120.6
376.3
466.7
82.8
368.7
482.5
87.4
373.2
474.5
85.1
376.3
466.7
82.8
383.3
458.7
80.8
Money market mutual funds
39 General purpose and broker-dealer
40 Institution-only
240.8
91.4
314.6
107.8
346.8
134.4
359.1
180.3
359.8
163.4
360.6
172.7
359.1
180.3
360.2
188.1
Repurchase agreements and eurodollars
41 Overnight
42 Term
83.2
227.4
77.5
178.5
74.7
158.3
75.6
129.4
69.5
138.5
73.3
136.0
75.6
129.4
77.8
128.1
2,099.0
7,249.0
2,247.5
7,851.4
2,491.3
8,286.9
2,765.0
8,515.9
2,707.6
8,465.1
2,740.7
8,491.9
2,765.0
8,515.9
Nontransaction
31 In M2
32 In M38
components
Debt components
43 Federal debt
44 Nonfederal debt
For notes see following page.
n.a.
n.a.
Monetary and Credit Aggregates
A15
NOTES TO TABLE 1.21
1. Latest monthly and weekly figures are available from the Board's H.6 (508)
weekly statistical release. Historical data are available from the Money and
Reserves Projection Section, Division of Monetary Affairs, Board of Governors of
the Federal Reserve System, Washington, 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 (OCDs), 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. Seasonally
adjusted Ml is computed by summing currency, travelers checks, demand
deposits, and OCDs, each seasonally adjusted separately.
M2: Ml plus (1) overnight (and continuing-contract) repurchase agreements
(RPs) issued by all depository institutions and overnight Eurodollars issued to
U.S. residents by foreign branches of U.S. banks worldwide, (2) money market
deposit accounts (MMDAs), (3) savings and small time deposits (time deposits—
including retail RPs—in amounts of less than $100,000), and (4) balances in both
taxable and tax-exempt general purpose and broker-dealer money market funds.
Excludes individual retirement accounts (IRAs) 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. Seasonally adjusted M2 is computed by adjusting its non-Mi component as a whole and
then adding this result to seasonally adjusted Ml.
M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of
$100,000 or more) issued by all depository institutions, (2) 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 (3) balances in both taxable and
tax-exempt, institution-only money market funds. Excludes amounts held by
depository institutions, the U.S. government, money market funds, and foreign
banks and official institutions. Also excluded is the estimated amount of overnight
RPs and Eurodollars held by institution-only money market funds. Seasonally
adjusted M3 is computed by adjusting its non-M2 component as a whole and then
adding this result to seasonally adjusted M2.
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 fund holdings of these assets. Seasonally adjusted L is computed by
summing U.S. savings bonds, short-term Treasury securities, commercial paper,
and bankers acceptances, each seasonally adjusted separately, and then adding
this result to M3.
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. Data are derived from the Federal
Reserve Board's flow of funds accounts. Debt data are based on monthly
averages. This sum is seasonally adjusted as a whole.
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 account balances at all depository institutions,
credit union share draft account balances, and demand deposits at thrift institutions.
7. Sum of (1) overnight RPs and overnight Eurodollars, (2) money market fund
balances (general purpose and broker-dealer), (3) MMDAs, and (4) savings and
small time deposits.
8. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S.
residents, and (4) 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 funds.
9. Small time deposits—including retail RPs—are those issued in amounts of
less than $100,000. All IRAs and Keogh accounts at commercial banks and thrift
institutions are subtracted from small time deposits.
10. Large time deposits are those issued in amounts of $100,000 or more,
excluding those booked at international banking facilities.
11. Large time deposits at commercial banks less those held by money market
funds, depository institutions, and foreign banks and official institutions.
A16
1.22
DomesticNonfinancialStatistics • April 1992
B A N K DEBITS A N D DEPOSIT TURNOVER1
Debits are in billions of dollars; turnover is ratio of debits to deposits; monthly data are at annual rates
1991
Bank group, or type of customer
June
4 ATS-NOW accounts 4
5 Savings deposits
Aug.
Sept.
Oct.
Nov.
Seasonally adjusted
DEBITS TO
Demand deposits3
1 All insured banks
2 Major New York City banks
3 Other banks
July
219,795.7
115,475.6
104,320.2
256,150.4
129,319.9
126,830.5
277,916.3
131,784.0
146,132.3
266,704.2
133,761.4
132,942.8
284,872.2
139,089.0
145,783.2
275,915.9
136,906.9
139,009.0
283,521.6
142,138.4
141,383.2
290,074.6
144,208.2
145,866.4
280,263.3
140,754.1
139,509.2
2,478.1
537.0
2,910.5
547.5
3,349.6
558.8
3,460.1
519.9
3,822.8
552.6
3,659.4
516.7
3,679.1
2,904.0
3,759.9
2,733.0
3,553.7
3,233.1
622.9
2,897.2
333.3
735.1
3,421.5
408.3
800.6
3,804.1
467.7
768.4
4,141.9
422.3
833.4
4,413.3
469.8
798.0
4,448.0
441.4
823.9
4,490.7
452.5
843.2
4,606.2
466.4
793.0
4,211.8
435.9
13.2
2.9
15.2
3.0
16.5
2.9
15.5
2.4
16.9
2.5
15.9
2.3
15.7
4.7
15.9
4.4
14.8
5.0
DEPOSIT TURNOVER
Demand deposits3
6 All insured banks
7 Major New York City banks
8 Other banks
9 ATS-NOW accounts 4
10 Savings deposits
Not seasonally adjusted
DEBITS TO
Demand deposits3
11 All insured banks
12 Major New York City banks
13 Other banks
14 ATS-NOW accounts 4
15 MMDAs 6
16 Savings deposits
219,790.4
115,460.7
104,329.7
256,133.2
129,400.1
126,733.0
277,400.0
131,784.7
145,615.3
270,144.7
133,851.7
136,293.0
286,068.7
139,527.4
146,541.3
289,049.5
146,342.8
142,706.6
273,967.0
137,659.5
136,307.5
298,196.7
149,704.6
148,492.0
269,949.6
136,592.8
133,356.8
2,477.3
2,342.7
536.3
2,910.7
2,677.1
546.9
3,342.2
2,923.8
557.9
3,446.1
2,714.5
516.4
3,729.0
2,868.0
558.2
3,693.2
2,751.7
537.0
3,679.4
n.a
3,110.7
3,770.6
n.a
3,132.6
3,314.0
n.a
2,939.5
622.8
2,896.7
333.2
735.4
3,426.2
408.0
799.6
3,810.0
466.3
781.7
4,154.4
434.9
831.4
4,334.6
469.8
849.5
4,771.4
460.9
796.0
4,305.8
436.6
864.8
4,775.5
473.7
757.1
4,059.4
413.0
13.2
6.6
2.9
15.2
7.9
2.9
16.4
8.0
2.9
15.5
6.8
2.4
16.7
7.2
2.5
16.3
6.8
2.4
15.9
n.a
4.9
16.2
n.a
4.9
13.9
n.a
4.5
DEPOSIT TURNOVER
Demand deposits3
17 All insured banks
18 Major New York City banks
19 Other banks
20 ATS-NOW accounts 4
21 MMDAs6
22 Savings deposits
1. Historical tables containing revised data for earlier periods can be obtained
from the Banking and Money Market Statistics Section, Division of Monetary
Affairs, Board of Governors of the Federal Reserve System, Washington, D.C.
20551.
Data in this table also appear on the Board's G.6 (406) monthly statistical
release. For ordering 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 (NOWs) and
accounts authorized for automatic transfer to demand deposits (ATSs).
5. Excludes ATS and NOW accounts.
6. Money market deposit accounts.
Commercial Banking Institutions
1.23
LOANS A N D SECURITIES
A17
All Commercial Banks 1
Billions of dollars, averages of Wednesday figures
1991r
1992
Item
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Seasonally adjusted
1 Total loans and securities2
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 4
10 Real estate
11 Individual
12 Security
13 Nonbank financial
institutions
14 Agricultural
15 State and political
subdivisions
16 Foreign banks
17 Foreign official institutions
18 Lease-financing receivables . . . .
19 All other loans
2,747.3
2,759.9
2,763.9
2,765.7
2,774.6
2,776.4
2,778.3
2,789.4
2,805.1
2,821.6
2,836.0
2,843.5
460.7
178.3
2,108.3
638.2
9.0
470.8
178.5
2,110.6
638.7
8.7
478.2
177.5
2,108.3
635.1
8.7
484.1
176.9
2,104.8
630.6
8.2
493.9
176.2
2,104.6
626.0
7.7
503.7
175.3
2,097.4
623.6
7.5
513.2
174.0
2,091.1
619.4
7.8
523.4
175.8
2,090.2
622.0
7.4
538.4
177.1
2,089.6
622.6
7.0
550.5
177.6
2,093.4
621.0
7.6
562.5
178.5
2,095.0
617.6
7.9
564.2
179.0
2,100.2
614.5
7.3
629.2
623.3
5.9
852.8
376.3
51.8
630.0
623.9
6.1
857.7
375.2
48.2
626.5
620.6
5.8
861.5
374.3
48.5
622.4
616.6
5.9
863.8
373.6
49.1
618.3
612.6
5.7
868.6
372.9
49.0
616.1
610.3
5.7
867.7
371.0
47.4
611.6
605.7
5.9
866.9
370.3
48.4
614.6
608.5
6.1
867.9
367.2
50.0
615.6
608.9
6.7
869.0
364.4
51.1
613.4
606.8
6.6
870.6
363.2
53.6
609.7
602.9
6.8
871.1
363.9
54.6
607.2
601.1
6.1
870.7
363.9
59.1
36.1
31.9
36.9
33.0
36.0
33.6
36.5
33.7
39.3
33.9
38.8
34.0
37.7
34.2
37.6
34.3
38.1
34.1
39.2
33.9
40.6
34.1
40.3
33.7
32.9
6.6
2.7
33.0
45.9
32.8
7.5
2.8
33.1
44.7
32.3
7.1
2.5
33.1
44.2
31.7
6.6
2.4
33.0
43.6
31.3
6.5
2.5
33.2
41.5
30.9
6.6
2.4
32.4
42.8
30.5
6.6
2.3
31.7
43.1
30.1
6.9
2.3
31.7
40.2
29.7
6.6
2.4
31.5
40.1
29.4
6.8
2.6
31.3
41.8
29.2
7.2
2.5
31.4
42.9
28.3
7.1
2.4
31.3
49.0
Not seasonally adjusted
20 Total loans and securities2
2,748.6
2,759.0
2,762.7
2,761.6
2,775.7
2,769.6
2,775.4
2,789.5
2,807.8
2,826.9
2,842.4
2,840.3
21 U.S. government securities
22 Other securities
23 Total loans and leases 2
24 Commercial and industrial . . . . .
25
Bankers acceptances h e l d 3 . . .
26
Other commercial and
industrial
71
U.S. addressees 4 .
28
Non-U.S. addressees
?9
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
463.8
178.3
2,106.5
637.5
9.1
474.9
178.5
2,105.5
641.3
8.7
479.9
177.0
2,105.7
638.3
8.4
484.0
176.5
2,101.0
633.4
8.2
493.1
176.2
2,106.5
628.0
7.7
501.5
174.3
2,093.8
623.5
7.2
511.7
174.2
2,089.5
617.6
7.6
521.9
175.8
2,091.8
619.1
7.4
537.3
177.4
2,093.1
621.1
7.0
551.5
177.9
2,097.6
619.7
7.9
558.5
178.7
2,105.2
618.9
8.2
563.8
179.5
2,096.9
611.4
7.4
628.3
622.1
6.3
849.9
376.2
55.7
632.6
626.4
6.2
854.3
372.5
49.5
629.9
623.8
6.0
860.2
371.6
49.8
625.2
619.3
5.9
864.4
371.9
46.7
620.3
614.3
6.0
868.9
370.7
49.1
616.3
610.5
5.7
868.8
368.3
46.3
609.9
604.1
5.8
868.8
369.3
47.3
611.8
605.8
6.0
868.8
368.7
48.7
614.1
607.9
6.2
870.3
365.3
50.8
611.9
605.7
6.1
872.0
364.7
53.6
610.7
604.3
6.4
871.3
368.6
55.2
604.0
597.5
6.5
870.1
368.1
58.6
35.7
31.0
36.3
31.7
35.5
32.7
36.1
33.3
39.6
34.2
39.0
34.7
37.8
35.1
37.2
35.3
37.8
35.0
39.5
34.2
41.9
34.1
40.8
33.3
33.0
6.5
2.7
33.2
45.0
32.8
7.3
2.8
33.3
43.6
32.2
6.9
2.5
33.1
42.8
31.7
6.4
2.4
33.0
41.6
31.3
6.3
2.5
32.9
43.0
30.7
6.5
2.4
32.1
41.6
30.4
6.5
2.3
31.6
42.9
30.1
6.9
2.3
31.6
43.2
29.7
6.8
2.4
31.6
42.3
29.4
7.1
2.6
31.4
43.3
29.1
7.7
2.5
31.4
44.6
28.6
6.9
2.4
31.6
45.2
1. Data have been revised to reflect new seasonal adjustment factors and
benchmarking to Call reports. Historical data may be obtained from the Banking
and Money Market Statistics Section, Division of Monetary Affairs, Board of
Governors of the Federal Reserve System, Washington, DC 20551.
Components may not sum to totals because of rounding,
2. Adjusted to exclude loans to commercial banks in the United States,
3. Includes nonfinancial commercial paper held.
4. United States includes the fifty states and the District of Columbia.
A18
1.24
DomesticNonfinancialStatistics • April 1992
MAJOR NONDEPOSIT F U N D S OF COMMERCIAL BANKS 1
Billions of dollars, monthly averages
1991r
1992
Source of funds
Seasonally adjusted
1 Total nondeposit funds 2
2 Net balances due to related foreign offices3
3 Borrowings from other than commercial banks
in United States 4
4 Domestically chartered banks
5 Foreign-related banks
Not seasonally adjusted
6 Total nondeposit funds
7 Net balances due to related foreign offices3
8
Domestically chartered banks
9
Foreign-related banks
10 Borrowings from other than commercial banks
in United States 4
11 Domestically chartered banks
12
Federal funds and security RP
borrowings5
13
Other 6
14 Foreign-related banks 6
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
266.7
23.8
264.8
28.5
265.7
28.7
260.8
24.6
250.2
17.8
247.9
18.4
245.4
17.8
248.7
20.8
262.8
31.7
264.0
33.9
274.5
39.8
277.3
44.1
242.9
176.2
66.7
236.4
169.6
66.8
237.1
170.4
66.7
236.2
167.2
69.0
232.4
163.9
68.6
229.5
160.2
69.3
227.6
156.0
71.6
227.9
154.7
73.2
231.0
153.2
77.8
230.0
149.2
80.9
234.7
150.9
83.8
233.2
153.0
80.2
267.7
24.0
-15.1
39.1
268.8
28.6
-5.7
34.2
263.1
27.4
-3.3
30.7
266.9
27.1
-.3
27.4
251.3
17.3
-3.7
20.9
244.1
15.2
-7.3
22.5
242.2
15.9
-7.2
23.2
246.0
19.9
-8.8
28.8
264.0
31.3
-7.2
38.5
268.2
34.8
-4.4
39.3
273.0
43.4
-3.8
47.2
273.3
44.8
-4.8
49.6
243.7
176.9
240.2
173.0
235.8
168.5
239.9
170.3
234.0
164.1
228.9
158.4
226.2
154.3
226.1
153.6
232.7
154.0
233.4
153.4
229.6
149.6
228.5
148.7
174.1
2.8
66.8
169.7
3.2
67.2
165.7
2.9
67.2
167.6
2.8
69.5
161.2
2.8
69.9
155.2
3.2
70.4
150.6
3.7
71.9
150.2
3.5
72.5
150.9
3.2
78.6
150.2
3.2
80.0
146.5
3.1
80.0
145.3
3.4
79.8
449.3
448.0
448.8
449.4
449.5
448.2
451.0
452.3
450.0
451.3
443.8
443.5
444.6
446.4
440.9
442.5
429.5
429.7
426.1
425.8
423.9
422.6
416.0
413.6
30.9
39.3
31.1
28.4
22.8
20.4
15.8
19.9
24.1
23.6
22.8
20.7
25.3
17.2
23.8
26.9
29.2
28.7
34.2
28.5
26.5
25.4
27.8
33.1
MEMO
Gross large time deposits1
15 Seasonally adjusted
16 Not seasonally adjusted
U.S. Treasury demand balances at commercial
banks8
17 Seasonally adjusted
18 Not seasonally adjusted
1. Commercial banks are nationally and state-chartered banks in the fifty states
and the District of Columbia, 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.
Data in this table also appear in the Board's G.10 (411) release. For ordering
address, see inside front cover.
Data have been revised to reflect new seasonal adjustment factors and benchmarking to Call reports. Historical data may be obtained from the Banking and
Money Market Statistics Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve System, Washington, DC 20551.
2. Includes federal funds, repurchase agreements (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 International Banking Facilities (IBFs).
4. 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. Figures are based on averages of daily data reported weekly by approximately 120 large banks and quarterly or annual data reported by other banks.
6. Figures are partly averages of daily data 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.
Commercial Banking Institutions
1.25
ASSETS A N D LIABILITIES OF COMMERCIAL B A N K S
A19
Last-Wednesday-of-Month Series'
Billions of dollars
1992
1991
Account
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
ALL COMMERCIAL BANKING
INSTITUTIONS 2
1 Total assets
? Loans and securities
3 Investment securities
4
U.S. government securities
5
Other
Trading account assets
6
7 Total loans
Interbank loans
8
9
Loans excluding interbank
Commercial and industrial
10
Real estate
11
Individual
1?
All other
13
14 Total cash assets
15 Reserves with Federal Reserve Banks ..
16 Cash in vault
17 Cash items in process of collection . . .
18 Demand balances at U.S. depository
institutions
19 Other cash assets
3,385.3
3,370.8
3,413.3
3,416.8
3,443.6
3,403.4
3,433.3
3,470.1
3,508.4
3,536.0
3,496.1
2,917.7
627.2
460.4
166.8
25.9
2,264.6
167.6
2,097.0
641.3
855.3
371.5
229.0
2,913.6
627.7
462.5
165.1
27.3
2,258.6
156.3
2,102.4
637.3
861.0
372.4
231.6
2,929.7
633.2
468.4
164.8
26.9
2,269.6
167.9
2,101.7
632.0
865.7
370.9
233.2
2,941.0
640.6
477.5
163.1
30.1
2,270.3
161.4
2,108.8
627.6
868.8
370.7
241.8
2,947.9
650.5
488.2
162.3
33.4
2,264.0
169.2
2,094.8
622.2
867.8
369.5
235.4
2,933.7
654.0
492.1
161.9
31.3
2,248.4
161.3
2,087.1
616.5
868.2
369.3
233.1
2,953.1
663.5
500.6
162.9
32.4
2,257.3
163.8
2,093.5
619.0
867.9
368.7
237.8
2,980.6
686.3
522.3
164.0
34.9
2,259.4
168.4
2,091.0
618.5
871.5
365.5
235.5
3,001.8
695.9
530.6
165.2
36.0
2,270.0
171.4
2,098.6
620.3
871.4
363.8
243.1
3,022.0
704.9
538.5
166.4
33.2
2,283.9
172.4
2,111.5
620.4
871.3
370.2
249.7
3,011.3
704.8
539.6
165.2
38.1
2,268.4
176.0
2,092.4
608.7
870.7
367.5
245.5
203.6
24.5
28.8
76.8
196.2
22.4
29.1
74.3
219.8
26.7
31.1
87.2
210.8
29.3
29.8
78.2
212.9
24.3
29.7
88.0
197.5
22.6
31.0
71.9
204.0
26.1
30.2
75.5
206.8
25.9
30.7
75.3
225.3
24.7
29.6
90.5
230.6
29.2
30.7
87.5
203.2
23.7
31.1
72.8
28.0
45.6
26.2
44.1
31.0
43.8
29.1
44.3
27.3
43.6
27.6
44.4
27.2
44.9
29.3
45.5
32.8
47.7
33.3
49.9
28.2
47.4
263.9
261.0
263.8
265.0
282.8
272.2
276.2
282.8
281.3
283.4
281.7
21 Total liabilities
3,156.7
3,142.8
3,181.9
3,185.4
3,210.3
3,167.3
3,195.6
3,235.0
3,272.9
3,299.4
3,255.8
V Total deposits
23 Transaction accounts
24 Savings deposits (excluding
checkable)
25 Time deposits
76 Borrowings
?7 Other liabilities
28 Residual (assets less liabilities)
2,387.8
602.6
2,387.3
601.4
2,418.1
617.7
2,410.5
611.4
2,453.5
639.8
2,435.2
612.4
2,435.2
614.3
2,448.5
628.7
2,489.9
670.4
2,495.6
682.9
2,449.2
643.9
596.2
1,189.0
486.3
282.5
228.6
597.6
1,188.4
486.7
268.8
228.0
608.7
1,191.7
489.8
274.0
231.4
613.4
1,185.8
500.4
274.5
231.4
623.1
1,190.6
489.0
267.7
233.3
627.4
1,195.4
466.7
265.4
236.1
631.3
1,189.6
483.8
276.6
237.7
643.0
1,176.8
501.3
285.1
235.1
650.7
1,168.8
487.3
295.6
235.5
656.1
1,156.7
499.5
304.3
236.6
667.7
1,137.7
507.2
299.3
240.3
29 Total assets
2,988.1
2,970.6
3,002.4
3,003.5
3,021.4
2,985.4
3,000.9
3,025.1
3,052.3
3,068.7
3,032.2
30 Loans and securities
31 Investment securities
32
U.S. government securities
33
Other
34 Trading account assets
35 Total loans
Interbank loans
36
37
Loans excluding interbank
Commercial and industrial
38
39
Real estate
Revolving home equity
40
Other real estate
41
Individual
4?
All other
43
2,645.3
587.7
439.0
148.8
25.9
2,031.6
144.9
1,886.7
504.3
805.2
63.4
741.8
371.5
205.8
2,639.1
591.6
444.0
147.5
27.3
2,020.2
130.7
1,889.5
501.3
810.6
64.5
746.1
372.4
205.2
2,647.8
594.7
447.7
147.0
26.9
2,026.2
141.0
1,885.2
494.4
814.3
65.3
749.0
370.9
205.7
2,655.3
602.1
456.9
145.1
30.1
2,023.1
136.8
1,886.3
490.0
816.8
66.0
750.8
370.7
208.9
2,665.1
611.3
467.2
144.1
33.4
2,020.5
146.5
1,874.1
482.5
815.1
66.6
748.4
369.5
207.0
2,650.3
613.0
470.0
143.0
31.3
2,005.9
141.5
1,864.4
475.6
814.9
67.3
747.6
369.3
204.6
2,659.4
621.1
477.2
143.8
32.4
2,006.0
142.8
1,863.2
472.9
814.3
68.1
746.2
368.7
207.4
2,673.8
638.2
493.4
144.8
34.9
2,000.6
144.5
1,856.2
471.0
817.1
68.9
748.2
365.5
202.6
2,687.9
644.9
499.4
145.4
36.0
2,007.1
150.7
1,856.4
468.3
816.8
69.2
747.6
363.8
207.5
2,694.7
651.0
505.6
145.4
33.2
2,010.5
150.5
1,860.1
463.4
816.3
69.9
746.4
370.2
210.2
2,688.2
652.3
508.5
143.8
38.1
1,997.8
156.3
1,841.5
454.9
815.7
71.0
744.8
367.5
203.4
44 Total cash assets
45 Reserves with Federal Reserve Banks.
46 Cash in vault
47 Cash items in process of collection . . .
48 Demand balances at U.S. depository
institutions
49 Other cash assets
177.3
24.1
28.8
74.9
171.8
22.0
29.1
72.7
194.2
25.8
31.1
85.6
185.2
28.2
29.8
76.2
187.7
23.9
29.7
86.3
171.5
22.1
31.0
70.3
176.5
24.9
30.1
74.0
179.1
25.1
30.7
73.6
197.6
24.0
29.6
88.3
201.7
28.5
30.7
85.4
176.3
23.3
31.1
71.0
26.1
23.4
24.6
23.4
29.1
22.7
27.3
23.6
25.6
22.3
25.7
22.3
25.2
22.3
27.4
22.4
30.7
25.0
31.1
25.9
26.2
24.7
50 Other assets
165.5
159.7
160.4
163.0
168.5
163.6
165.0
172.2
166.8
172.3
167.7
2,767.4
2,794.2
2,821.0
2,836.2
2,796.1
20 Other assets
DOMESTICALLY CHARTERED
COMMERCIAL BANKS 4
51 Total liabilities
2,763.5
2,746.8
2,775.1
2,776.2
2,792.2
2,753.4
5? Deposits
53 Transaction accounts
54 Savings deposits (excluding
checkable)
55 Time deposits
56 Borrowings
57 Other liabilities
58 Residual (assets less liabilities)3
2,270.7
592.6
2,263.7
592.1
2,285.6
608.3
2,275.7
601.7
2,313.5
630.4
2,289.3
603.1
2,286.9
605.3
2,301.2
619.4
2,340.9
660.4
2,342.5
672.6
2,292.0
634.1
592.7
1,085.3
356.1
136.8
224.6
594.0
1,077.5
349.9
133.1
223.9
605.1
1,072.2
357.6
131.9
227.3
609.7
1,064.3
369.8
130.7
227.2
619.3
1,063.8
352.7
126.0
229.2
623.7
1,062.6
339.1
125.0
232.0
627.5
1,054.1
354.6
125.9
233.5
639.2
1,042.6
362.1
130.8
230.9
646.8
1,033.7
346.8
133.3
231.3
652.1
1,017.8
356.8
136.9
232.4
663.6
994.3
367.9
136.2
236.1
1. Data have been revised to reflect benchmarking to quarterly Call reports.
Back data are available from the Banking and Monetary Statistics Section, Board
of Governors of the Federal Reserve System, Washington, D.C., 20551. Data in
this table also appear in the Board's H.8 (510) weekly statistical release.
Data are partly estimated. They include all bank-premises subsidiaries and
other significant majority-owned domestic subsidiaries. Components may not sum
to totals because of rounding.
2. Includes insured domestically chartered commercial banks, agencies and
branches of foreign banks, Edge act and agreement corporations, and New York
State foreign investment corporations. Data are estimates for the last Wednesday
of the month based on a sample of weekly-reporting foreign-related institutions
and quarter-end condition reports.
3. This balancing item is not intended as a measure of equity capital for use in
capital adequacy analysis.
4. Includes all member banks and insured nonmember banks. Loans and
securities data are estimates for the last Wednesday of the month based on a
sample of weekly-reporting banks and quarter-end condition reports.
A20
1.26
DomesticNonfinancialStatistics • April 1992
ASSETS A N D LIABILITIES OF LARGE WEEKLY-REPORTING COMMERCIAL BANKS 1
Millions of dollars, Wednesday figures
1991
1992
Account
Dec. 4
Dec. 11
Dec. 18
Dec. 25
Jan. 1
Jan. 8
Jan. 15
Jan. 22
Jan. 29
ASSETS
1 Cash and balances due from depository institutions
2 U.S. Treasury and government securities
3 Trading account
4 Investment account
5
Mortgage-backed securities
All others, by maturity
6
One year or less
7
One year through five years
8
More than five years
9 Other securities
10 Trading account
11 Investment account
12
State and political subdivisions, by maturity
13
One year or less
14
More than one year
15
Other bonds, corporate stocks, and securities
16 Other trading account assets
115,247r
226,906
21,945
204,961r
77,542r
112,422
225,142
21,041
204,101
77,352*
110,424*
224,460
19,867
204,593
78,029*
120,462
221,687
18,486
203,201
78,121*
125,862
227,934
17,962
209,972
79,183
106,684
227,696
18,659
209,036
78,827
123,478
229,257
19,590
209,667
78,562
123,366
230,739
20,598
210,141
78,949
104,397
228,760
20,659
208,102
78,583
25,534
55,213
46,672r
55,710*
1,330
54,380*
22,724
3,043r
19,681*
31,656*
12,151*
25,452*
54,655*
46,642*
55,455
1,326
54,130
22,637
3,011
19,626
31,493*
11,998*
25,671
54,144*
46,748*
55,646
1,872
53,774
22,517
2,980
19,536
31,257
11,672*
25,284
53,113*
46,684*
56,221
1,836
54,384
22,667
3,112
19,555
31,717
11,336*
25,494
54,525
50,770
56,766
2,019
54,747
22,984
3,275
19,709
31,763
11,447
26,034
55,980
48,195
55,624
1,269
54,355
22,673
3,161
19,512
31,682
12,596
26,889
57,013
47,202
55,479
1,225
54,254
22,641
3,171
19,470
31,613
11,842
26,526
57,688
46,978
55,440
1,212
54,228
22,689
3,241
19,448
31,539
12,371
24,731
57,960
46,827
55,455
1,614
53,841
22,580
3,231
19,349
31,261
13,178
17 Federal funds sold3
18 To commercial banks in the United States
19 To nonbank brokers and dealers
20 To others 4
21 Other loans and leases, gross
22 Commercial and industrial
23
Bankers acceptances and commercial paper
24
All other
25
U.S. addressees
26
Non-U.S. addressees
82,829
56,286
21,819
4,724
998,028
292,878*
2,218
290,660*
289,340*
1,320
86,075
84,023
86,112
57,749
56,608
57,9%
22,636
23,161
23,641
4,778
5,166
4,475
996,116 1,000,859 1,001,038
290,937* 292,147*
290,125*
2,056
2,043
2,038
290,104*
288,881*
288,088*
287,622*
288,746*
286,599*
1,259
1,357
1,488
77,213
53,021
20,056
4,137
1,017,136
293,378
1,946
291,432
289,884
1,548
95,687
64,397
24,463
6,828
1,013,033
290,189
1,633
288,557
287,033
1,523
107,976
73,712
28,690
5,574
1,012,652
290,143
1,608
288,535
286,999
1,536
100,767
70,880
24,247
5,640
1,009,936
289,363
1,597
287,766
286,221
1,545
95,321
66,540
22,943
5,837
1,008,215
288,643
1,584
287,059
285,551
1,508
27 Real estate loans
28
Revolving, home equity
29
All other
30 To individuals for personal expenditures
31 To financial institutions
32
Commercial banks in the United States
33
Banks in foreign countries
34
Nonbank financial institutions
35 For purchasing and carrying securities
36 To finance agricultural production
37 To states and political subdivisions
38 To foreign governments and official institutions
39 All other loans
40 Lease-financing receivables
41 LESS: Unearned income
42
Loan and lease reserve 6
43 Other loans and leases, net
44 Other assets
395,313*
39,539
355,774*
180,400*
44,679
18,980*
1,964
23,735*
13,304
5,906
17,654
1,032
21,547*
25,315
3,279
37,265
957,483
155,776*
395,624*
39,621
356,003*
181,352*
44,411
18,960*
2,150
23,302*
12,813
5,850
17,586
941
21,248*
25,355
3,270
37,481
955,365
154,727*
403,044
41,494
361,550
188,466
46,473
20,872
2,080
23,521
12,495
6,190
17,683
918
22,733
25,755
3,306
37,215
976,614
170,439
403,135
41,472
361,662
187,964
45,717
20,772
1,858
23,086
13,791
6,039
17,534
1,001
21,845
25,819
3,255
37,127
972,651
159,466
402,634
41,594
361,041
187,150
45,768
21,514
2,091
22,163
14,374
6,022
17,443
928
22,383
25,808
3,244
37,257
972,151
162,351
401,846
41,665
360,181
186,972
44,872
20,831
2,065
21,976
14,784
5,948
17,432
939
21,982
25,798
3,233
37,206
969,498
157,556
402,392
41,685
360,706
186,788
45,521
21,565
1,934
22,022
14,107
5,850
17,344
898
20,909
25,764
3,275
37,056
967,884
154,723
1,606,102* 1,599,131* 1,600,132* 1,614,031* 1,646,276
1,630,405
1,662,534
1,649,737
1,619,719
45 Total assets
Footnotes appear on the following page.
394,631*
39,717
354,914*
182,749*
44,403
19,213*
1,934
23,255*
15,017
5,872
17,543
931
22,243*
25,323
3,254
37,227
960,378
151,476*
393,905*
39,916
353,988*
183,732*
45,719
20,147*
2,484
23,088*
14,805
5,842
17,581
947
23,024*
25,358
3,256
36,709
961,073
157,141*
Weekly Reporting Commercial Banks
1.26
A21
ASSETS A N D LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued
Millions of dollars, Wednesday figures
1992
1991
Account
Dec. 4
Dec. 11
1,120,281
46 Deposits
47 Demand deposits
239,253
192,900
48
Individuals, partnerships, and corporations
46,353
49
Other holders
50
7,658
States and political subdivisions
51
1,664
U.S. government
52
Depository institutions in the United States
20,816
4,998
53
Banks in foreign countries
768
54
Foreign governments and official institutions
55
10,449
Certified and officers' checks
99,801
56 Transaction balances other than demand deposits . . . .
781,227
57 Nontransaction balances
750,441
58
Individuals, partnerships, and corporations
30,787
59
Other holders
25,513
60
States and political subdivisions
1,170
61
U.S. government
3,690
62
Depository institutions in the United States
414
63
Foreign governments, official institutions, and banks . . . .
1,112,598
234,198
188,307
45,891
8,020
1,799
20,271
5,649
870
9,281
97,628
780,773
749,780
30,993
25,823
1,116
3,653
401
Dec. 18
Dec. 25
Jan. 1
Jan. 8
Jan. 15
Jan. 22
Jan. 29
1,158,676
267,363
214,354
53,008
9,242
3,050
23,997
5,788
1,000
9,932
105,006
786,308
757,385
28,923
23,989
1,105
3,452
377
1,135,387
237,786
193,174
44,613
7,896
1,754
19,772
5,294
532
9,365
106,020
791,581
761,643
29,938
24,687
1,494
3,383
374
1,158,334
262,416
207,201
55,214
8,001
4,975
25,408
5,538
604
10,689
104,795
791,124
761,308
29,816
24,598
1,484
3,363
370
1,129,716
245,168
193,318
51,850
8,389
2,439
23,401
5,813
694
11,115
101,460
783,087
753,033
30,054
24,427
1,484
3,782
361
1,110,245
230,396
182,853
47,543
7,753
1,7%
20,094
5,194
668
12,037
99,458
780,391
749,290
31,101
25,049
1,517
4,176
360
262,650
0
25,798
236,852
273,104
4,583
16,173
252,348
280,785
0
16,865
263,919
294,938
965
29,461
264,512
282,183
0
29,817
252,366
LIABILITIES
64 Liabilities for borrowed money6
65 Borrowings from Federal Reserve Banks
66 Treasury tax and loan notes
67 Other liabilities for borrowed money
68 Other liabilities (including subordinated notes and
debentures)
1,110,123" 1,119,817
238,536"
251,299
190,421
200,832
48,115"
50,467
8,047
8,671
1,848
2,129
20,949"
23,470
5,275
5,545
604
880
11,394
9,772
98,320
98,859
773,267
769,659
740,164
743,178
30,089
29,495
25,024
24,405
1,110
1,094
3,584
3,613
384
372
263,726
0
11,010"
252,716r
262,038
600
7,290
254,148
106,195r
108,306r
103,763"
108,121"
107,029
103,802
105,286
105,899
107,223
L,490,203 R
L,482,943 R
1,484,223"
1,499,051"
1,528,355
1,512,293
1,544,406
1,530,553
1,499,652
115,899"
116,189"
115,909"
114,980"
117,921
118,111
118,128
119,183
120,067
r
Total loans and leases, gross, adjusted, plus securities . . l,300,358 1,297,165" 1,301,751" 1,298,250"
170,555
169,399
166,249
163,958"
Time deposits in amounts of $100,000 or more
10
1,258
1,242
1,299
1,221
Loans sold outright to affiliates
681
675
654
654
Commercial and industrial
618
583
588
566
Other
24,452
24,179
24,217
24,141
Foreign branch credit extended to U.S. residents
-2,855"
-5,760"
-4,771
-4,229
Net due to related institutions abroad
1,316,603
162,887
1,232
680
553
23,603
-11,695
1,319,467
164,539
1,247
701
546
23,822
-5,753
1,321,980
162,927
1,233
695
538
23,829
-7,972
1,317,542
161,499
1,230
697
534
23,685
-3,792
1,312,825
160,639
1,224
685
538
23,409
453
69 Total liabilities
70 Residual (total assets less total liabilities)8
270,337
0
26,117
244,220
271,114
31
27,780
243,303
MEMO
71
72
73
74
75
76
77
1. Components may not sum to totals because of rounding.
2. Includes certificates of participation, issued or guaranteed by agencies of the
U.S. government, in pools of residential mortgages.
3. Includes securities purchased under agreements to resell.
4. Includes allocated transfer risk reserve.
5. Includes negotiable order of withdrawal (NOW) , automatic transfer service
(ATS), and telephone and preauthorized transfer savings deposits.
6. Includes borrowings only from other-than-directly-related institutions.
7. Includes federal funds purchased and securities sold under agreements to
repurchase.
8. This balancing item is not intended as a measure of equity capital for use in
capital-adequacy analysis.
9. Excludes loans to and federal funds transactions with commercial banks in
the United States.
10. Affiliates include 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.
11. Credit extended by foreign branches of domestically chartered weeklyreporting banks to nonbank U.S. residents. Consists mainly of commercial and
industrial loans, but includes an unknown amount of credit extended to other than
nonfinancial businesses.
NOTE. Data that formerly appeared in table 1.28, Assets and Liabilities of Large
Weekly Reporting Commercial Banks in New York City, can be obtained from the
Board's H.4.2 (504) weekly statistical release. For ordering address see inside
front cover.
A22
1.30
DomesticNonfinancialStatistics • April 1992
LARGE WEEKLY-REPORTING U.S. BRANCHES A N D AGENCIES OF FOREIGN B A N K S
Liabilities 1
Assets and
Millions of dollars, Wednesday figures
1991
1992
Account
Dec. 4r
1 Cash and balances due from depository
institutions
2 U.S. Treasury and government agency
securities
3 Other securities
4 Federal funds sold1
5 To commercial banks in the United States . . .
6 To others
7 Other loans and leases, gross
8 Commercial and industrial
9
Bankers acceptances and commercial
paper
10
All other
11
U.S. addressees
17
Non-U.S. addressees
13 Loans secured by real estate
14 To financial institutions
15
Commercial banks in the United States..
16
Banks in foreign countries
17
Nonbank financial institutions
18 For purchasing and carrying securities . . . .
19 To foreign governments and official
institutions
20 All other
21 Other assets (claims on nonrelated parties) . .
22 Total assets3
23 Deposits or credit balances due to other
than directly related institutions
24 Demand deposits 4
25 Individuals, partnerships, and
corporations
76 Other
27 Nontransaction accounts
28 Individuals, partnerships, and
corporations
29 Other
30 Borrowings from other than directly
related institutions
31 Federal funds purchased 5
32 From commercial banks in the
United States
33 From others
34 Other liabilities for borrowed money
35 To commercial banks in the
United States
36 To others
37 Other liabilities to nonrelated parties
38 Total liabilities6
MEMO
39 Total loans (gross) and securities, adjusted ..
40 Net due to related institutions abroad
Dec. 11
Dec. 18
Jan. 1
Jan. 8
Jan. 15
Jan. 22
Jan. 29
16,576
16,307
17,291
17,711
17,349
16,733
17,412
17,074
16,543
19,572
7,876
8,846
3,963
4,883
151,110
88,285
20,631
7,911
11,115
4,512
6,602
151,121r
88,145r
20,590
8,153
10,186
4,115
6,071
152,797r
89,412r
21,600
8,366
9,516
5,233
4,284
157,256r
91,161r
21,792
8,890
13,061
6,472
6,590
168,317
98,150
22,167
8,927
9,531
3,774
5,756
162,735
97,116
21,947
8,826
10,533
3,812
6,721
163,266
97,669
20,836
8,949
13,692
7,519
6,173
163,363
97,263
20,459
8,913
11,276
3,905
7,371
164,761
97,690
2,174
86,111
83,345
2,766
33,588
21,319
7,754
2,247
11,318
5,412
l,994r
86,^O 1
83,331rr
2,819
33,462
21,219r
7,778r
1,965
11,476r
5,834
2,236r
87,176r
84,23lrr
2,945
33,392
21,443r
7,458r
2,220
11,765r
6,024
2,199r
88,962r
86,047r
2,915r
33,604
22,47l r
7,688r
2,776
12,006r
7,469r
2,573
95,577
92,589
2,988
36,660
22,230
8,292
1,919
12,020
8,310
2,322
94,794
91,930
2,864
36,581
21,396
7,889
1,941
11,567
5,173
2,288
95,381
92,525
2,856
36,652
20,314
7,566
1,816
10,932
6,113
2,373
94,890
92,021
2,869
36,638
20,369
7,704
1,807
10,858
6,591
2,314
95,376
92,495
2,881
36,564
20,851
7,824
1,866
11,161
7,225
408
2,098
31,685
410
2,052
33,342r
410
2,116
30,544r
384
2,166r
31,206r
405
2,563
32,232
393
2,075
30,963
394
2,124
30,229
407
2,094
29,811
420
2,011
30,142
297,449
288,063
292,890
293,020
291,881
96,363
4,200
95,232
3,792
95,339
3,755
97,834
3,824
101,546
3,669
275,720
278,963
93,069
3,565
95,855
3,453
280,485
283,060
98,778r
4,980"
97,847
4,260
r
2,707
859
89,503
2,667r
787r
92,402
3,976r
l,003r
93,799
3,141
1,119"
93,586
3,381
819
92,163
2,970
823
91,439
2,928
827
91,584
3,000
825
94,009
2,801
867
97,877
64,195
25,308
66,296
26,106
67,343
26,455
67,502
26,085
65,058
27,104
64,477
26,963
64,529
27,054
66,736
27,273
69,212
28,665
99,472
54,634
95,274r
47,127
97,137r
50,158
97,144r
46,879
107,426
52,742
104,537
53,691
105,354
58,103
102,142
53,445
99,849
51,208
21,059
33,576
44,838
20,183
26,943
48,148r
20,707
29,451
46,978r
20,123
26,756
50,266r
22,490
30,252
54,684
24,043
29,648
50,846
26,338
31,766
47,251
20,803
32,642
48,698
22,282
28,926
48,641
13,197
31,641
13,999
34,148r
30,730"
28,796 R
13,761
33,218r
14,779
35,487r
16,605
38,079
29,456
15,241
35,606
28,584
15,050
32,201
28,079
14,778
33,920
27,704
16,097
32,544
27,317
29,918
29,382 R
275,720
278,963
280,485
283,060
297,449
288,063
292,890
293,020
291,881
175,687
13,204
178,488r
18,568
180,153r
14,850
183,816r
21,282
197,297
28,397
191,697
22,704
193,194
23,442
191,618
26,046
193,680
23,382
1. Includes securities purchased under agreements to resell.
2. Includes transactions with nonbank brokers and dealers in securities.
3. Includes net due from related institutions abroad for U.S. branches and
agencies of foreign banks having a net "due from" position.
4. Includes other transaction deposits.
Dec. 25
5. Includes securities sold under agreements to repurchase.
6. Includes net to related institutions abroad for U.S. branches and agencies of
foreign banks having a net "due to" position.
7. Excludes loans to and federal funds transactions with commercial banks in
the United States.
Financial Markets
A23
COMMERCIAL PAPER A N D BANKERS DOLLAR ACCEPTANCES OUTSTANDING 1
1.32
Millions of dollars, end of period
1991
1987
Dec.
Item
1988
Dec.
1990
Dec.
1989
Dec.
1991
Dec.
July
Aug.
Sept.
Oct.
Nov.
Dec.
Commercial paper (seasonally adjusted unless noted otherwise)
1 All issuers
358,997
458,464
530,123
566,688
535,998
545,493r
538,179"
532,931"
529,981"
538,567"
535,998
102,742
159,777
186,343
218,953
218,687
205,099
208,159
211,821
219,028
220,402
218,687
1,428
1,248
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
174,332
194,931
212,640
201,862
185,074
195,144r
191,902"
189,427"
180,540"
182,109"
185,074
2
2
3
4
5
Financial companies
Dealer-placed paper
Total
Bank-related (not seasonally
adjusted)
Directly placed paper5
Total
Bank-related (not seasonally
adjusted)
6 Nonfinancial companies 6
43,173
43,155
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
81,923
103,756
131,140
145,873
132,237
145,250
138,118
131,683
130,413
136,056
132,237
Bankers dollar acceptances (not seasonally adjusted) 7
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
70,565
66,631
62,972
54,771
43,770
44,756
44,228
43,462
44,910
43,947
43,770
10,943
9,464
1,479
9,086
8,022
1,064
9,433
8,510
924
9,017
7,930
1,087
11,027
9,356
1,670
9,081
7,906
1,175
9,622
7,826
1,795
10,174
8,237
1,937
9,876
8,306
1,570
10,750
8,754
1,996
11,027
9,356
1,670
0
965
58,658
0
1,493
56,052
0
1,066
52,473
0
918
44,836
0
1,739
31,004
0
1,274
34,401
0
1,665
32,941
0
1,678
31,610
0
1,862
33,172
0
1,705
31,491
0
1,739
31,004
16,483
15,227
38,855
14,984
14,410
37,237
15,651
13,683
33,638
13,096
12,703
28,973
12,843
10,351
20,577
12,728
11,468
20,561
12,968
11,044
20,215
12,876
10,966
19,620
13,265
11,105
20,541
13,472
10,486
19,989
12,843
10,351
20,577
1. Components may not sum to totals because of rounding.
2. Institutions engaged primarily in commercial, savings, and mortgage banking; sales, personal, and mortgage financing; factoring, finance leasing, and other
business lending; insurance underwriting; and other investment activities.
3. Includes all financial-company paper sold by dealers in the open market.
4. Bank-related series were discontinued in January 1989.
5. As reported by financial companies that place their paper directly with
investors.
1.33
6. Includes public utilities and firms engaged primarily in such activities as
communications, construction, manufacturing, mining, wholesale and retail trade,
transportation, and services.
7. Data on bankers acceptances are gathered from institutions whose acceptances total $100 million or more annually. The reporting group is revised every
January. In January 1988, the group was reduced from 155 to 111 institutions. The
current group, totaling approximately 100 institutions, accounts for more than 90
percent of total acceptances activity.
PRIME RATE CHARGED BY BANKS on Short-Term Business Loans 1
Percent per year
Date of change
Period
Rate
1989— Jan. 1
Feb. 10
24
June 5
July 31
10.50
11.00
11.50
11.00
10.50
1990— Jan.
8
10.00
1991— Jan. 2
Feb. 4
May 1
Sept. 13 .
Nov. 6
Dec. 23
9.50
9.00
8.50
8.00
7.50
6.50
Average
rate
1989
1990
1991
10.87
10.01
8.46
1989— Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
10.50
10.93
11.50
11.50
11.50
11.07
10.98
10.50
10.50
10.50
10.50
10.50
1. Data in this table also appear in the Board's H.15 (519) weekly and G.13
(415) monthly statistical releases. For ordering address, see inside front cover.
Period
1990—Jan. ...
Feb. ..
Mar. ..
Apr. ..
May ...
June ..
July ...
Aug. ..
Sept. ..
Oct. ...
Nov. ..
Dec. ..
Average
rate
10.11
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
Period
1991— Jan. ..
Feb. .
Mar. .
Apr. .
May ..
June .
July ...
Aug. ..
Sept. ..
Oct. ...
Nov. ..
Dec. ..
1992— Jan. ...
Feb.
A24
1.35
DomesticNonfinancialStatistics • April 1992
INTEREST RATES Money and Capital Markets
Averages, percent per year; weekly, monthly and annual figures are averages of business day data unless otherwise noted.
1991
Item
1989
1990
1992
1992, week ending
1991
Oct.
Nov.
Dec.
Jan.
Jan. 3
Jan. 10
Jan. 17
Jan. 24
Jan. 31
MONEY MARKET INSTRUMENTS
1 Federal funds 1,2,3
2 Discount window borrowing 2,4
9.21
6.93
8.10
6.98
5.69
5.45
5.21
5.00
4.81
4.58
4.43
4.11
4.03
3.50
4.19
3.50
4.19
3.50
4.01
3.50
3.87
3.50
4.01
3.50
9.11
8.99
8.80
8.15
8.06
7.95
5.89
5.87
5.85
5.29
5.35
5.33
4.95
4.98
4.93
4.98
4.61
4.49
4.11
4.07
4.06
4.57
4.27
4.17
4.09
4.02
3.99
4.10
4.08
4.08
4.08
4.07
4.08
4.08
4.09
4.09
paper3,5,6
3
4
5
Commercial
1-month
3-month
6-month
6
7
8
Finance paper, directly placed3,5,7
1-month
3-month
6-month
8.99
8.72
8.16
8.00
7.87
7.53
5.73
5.71
5.60
5.18
5.19
5.12
4.80
4.87
4.76
4.69
4.39
4.31
3.99
3.99
3.95
4.16
4.07
4.00
3.95
3.94
3.92
3.99
4.00
3.95
3.97
3.99
3.97
4.00
4.01
3.98
9
10
Bankers acceptances3'5'8
3-month
6-month
8.87
8.67
7.93
7.80
5.70
5.67
5.21
5.15
4.85
4.76
4.42
4.28
3.97
3.96
4.05
3.97
3.92
3.87
3.99
3.99
3.96
3.95
4.00
4.02
11
12
13
Certificates of deposit, secondary
marker9
1-month
3-month
6-month
9.11
9.09
9.08
8.15
8.15
8.17
5.82
5.83
5.91
5.23
5.33
5.32
4.86
4.94
4.92
4.84
4.47
4.41
4.07
4.05
4.07
4.35
4.15
4.11
4.04
3.98
3.97
4.08
4.09
4.12
4.06
4.06
4.08
4.06
4.08
4.11
9.16
8.16
5.86
5.34
4.96
4.48
4.06
4.16
3.96
4.10
4.08
4.08
8.11
8.03
7.92
7.50
7.46
7.35
5.38
5.44
5.52
4.99
5.04
5.04
4.56
4.61
4.64
4.07
4.10
4.17
3.80
3.87
3.95
3.87
3.87
3.93
3.77
3.81
3.87
3.81
3.88
3.98
3.77
3.86
3.95
3.84
3.92
4.02
8.12
8.04
7.91
7.51
7.47
7.36
5.42
5.49
5.54
5.03
5.08
5.12
4.60
4.66
4.72
4.12
4.16
4.20
3.84
3.88
3.84
3.91
3.91
n.a.
3.85
3.86
n.a.
3.83
3.87
3.84
3.78
3.84
n.a.
3.84
3.93
n.a.
14 Eurodollar deposits, 3-month 3,10
18
19
20
U.S. Treasury bills
Secondary market •
3-month
6-month
1-year
Auction average ' •
3-month
6-month
1-year
21
22
23
24
25
26
27
Constant maturities12
1-year
2-year
3-year
5-year
7-year
10-year
30-year
8.53
8.57
8.55
8.50
8.52
8.49
8.45
7.89
8.16
8.26
8.37
8.52
8.55
8.61
5.86
6.49
6.82
7.37
7.68
7.86
8.14
5.33
5.91
6.23
6.87
7.25
7.53
7.93
4.89
5.56
5.90
6.62
7.06
7.42
7.92
4.38
5.03
5.39
6.19
6.69
7.09
7.70
4.15
4.96
5.40
6.24
6.70
7.03
7.58
4.14
4.79
5.14
5.98
6.46
6.78
7.45
4.06
4.74
5.12
6.01
6.48
6.80
7.43
4.17
5.02
5.45
6.34
6.76
7.04
7.57
4.14
5.02
5.47
6.32
6.80
7.14
7.65
4.23
5.14
5.65
6.41
6.88
7.25
7.74
Composite13
28 Over 10 years (long-term)
8.58
8.74
8.16
7.88
7.83
7.58
7.48
7.32
7.29
7.49
7.57
7.66
7.00
7.40
7.23
6.96
7.29
7.27
6.56
6.99
6.92
6.28
6.70
6.68
6.24
6.58
6.73
6.32
6.65
6.69
6.13
6.47
6.54
6.22
6.54
6.52
6.22
6.54
6.40
6.02
6.37
6.56
6.08
6.42
6.59
6.20
6.54
6.65
9.66
9.77
9.23
8.99
8.93
8.75
8.64
8.60
8.57
8.64
8.67
8.70
9.26
9.46
9.74
10.18
9.32
9.56
9.82
10.36
8.77
9.05
9.30
9.80
8.55
8.83
9.08
9.49
8.48
8.78
9.01
9.45
8.31
8.61
8.82
9.26
8.20
8.51
8.72
9.13
8.17
8.45
8.65
9.11
8.14
8.43
8.64
9.05
8.20
8.52
8.72
9.11
8.22
8.56
8.76
9.16
8.25
8.58
8.76
9.20
37 A-rated, recently offered utility bonds17 . . . .
9.79
10.01
9.32
9.02
8.95
8.68
8.57
8.46
8.49
8.58
8.67
8.72
MEMO: Dividend-price ratio18
38 Preferred stocks
39 Common stocks
9.05
3.45
8.96
3.61
8.17
3.25
7.84
3.14
7.81
3.15
7.62
3.11
7.54
2.90
7.57
2.91
7.52
2.89
7.51
2.87
7.50
2.89
7.61
2.96
15
16
17
U . S . TREASURY NOTES AND BONDS
STATE AND LOCAL NOTES AND BONDS
Moody's series14
29 Aaa
30 Baa
31 Bond Buyer series15
CORPORATE BONDS
32 Seasoned issues, all industries16
33
34
35
36
Rating group
Aaa
Aa
A
Baa
1. The daily effective federal funds rate is a weighted average of rates on
trades through N.Y. brokers.
2. Weekly figures are averages of seven calendar days ending on Wednesday
of the current week; monthly figures include each calendar day in the month.
3. Annualized using a 360-day year or bank interest.
4. Rate for the Federal Reserve Bank of New York.
5. Quoted on a discount basis.
6. An average of offering rates on commercial paper placed by several leading
dealers for firms whose bond rating is AA or the equivalent.
7. An average of offering rates on paper directly placed by finance companies.
8. Representative closing yields for acceptances of the highest rated money
center banks.
9. An average of dealer offering rates on nationally traded certificates of
deposit.
10. Bid rates for Eurodollar deposits at 11 a.m. London time. Data are for
indication purposes only.
11. Auction date for daily data; weekly and monthly averages computed on an
issue-date basis.
12. Yields on actively traded issues adjusted to constant maturities. Source:
U.S. Treasury.
13. Unweighted average of rates on 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 twenty years to maturity, issued by twenty
state and local government^ 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 thirty-year maturity and five
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
1992
1991
Indicator
1990r
1989
1991
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Prices and trading volume (averages of daily figures)
Common stock prices (indexes)
1 New York Stock Exchange
(Dec. 31, 1965 = 50)
2
Industrial
3 Transportation
4
Utility
Finance
5
180.13
228.04
174.90
94.33
162.01
183.66
226.06
158.80
90.72
133.21
206.35
258.16
173.97
92.64
150.84
207.07
260.13
170.77
90.73
151.32
207.32
261.16
177.05
89.01
152.30
208.29
262.48
177.15
90.05
151.69
213.33
268.22
178.42
92.38
157.70
212.55
266.21
177.99
93.72
157.69
213.10
265.68
187.45
95.25
158.94
213.25
264.89
188.52
96.78
159.78
214.26
266.01
185.47
98.08
159.96
229.34
286.62
201.55
99.31
174.50
6 Standard & Poor's Corporation
(1941-43 = 10)1
323.05
335.01
376.20
378.27
378.29
380.23
389.40
387.20
386.88
385.87
388.51
416.08
7 American Stock Exchange
(Aug. 31, 1973 = 50?
356.67
338.32
360.32
362.67
366.06
364.33
367.38
369.55
376.82
382.38
373.08
409.08
165,568
13,124
156,359
13,155
179,411
12,486
170,337
10,995
162,154
11,477
157,871
10,883
171,490
12,514
163,242
13,378
177,502
13,764
187,191
14,487
197,914
17,475
239,903
20,444
Volume of trading (thousands of shares)
8 New York Stock Exchange
9 American Stock Exchange
Customer financing (millions of dollars, end-of-period balances)
10 Margin credit at broker-dealers3
34,320
28,210
36,660
29,980
31,280
30,600
32,240
33,170
33,360
34,840
36,660
36,350
Free credit balances at brokers4
11 Margin accounts
12 Cash accounts
7,040
18,505
8,050
19,285
8,290
19,255
7,200
16,650
6,690
18,110
6,545
16,945
7,040
17,040
6,950
17,595
6,965
17,100
7,040
17,780
8,290
19,255
7,865
19,990
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. On July 5, 1983, the American Stock Exchange rebased its index, effectively
cutting previous readings in half.
3. Since July 1983, under the revised Regulation T, margin credit at brokerdealers has included 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 amounts in accounts with no unfulfilled commitments to brokers and are subject to withdrawal by customers on demand.
5. New series since June 1984.
6. These requirements, stated in regulations adopted by the Board of Governors pursuant to the Securities Exchange Act of 1934, limit the amount of credit
that can be used 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.
Effective June 8, 1988, margins were set to be the price option plus 20 percent
of the market value of the stock underlying the option (or 15 percent in the case
of stock-index options).
A26
1.37
DomesticNonfinancialStatistics • April 1992
SELECTED FINANCIAL INSTITUTIONS
Selected Assets and Liabilities
Millions of dollars, end of period
1991
Account
1989
1990
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
SAIF-insured institutions
1 Assets
1,249,055
1,084,821
1,054,654
1,041,977
1,027,464
1,020,677
1,001,582
984,971
972,529
949,047
937,776
934,295
733,729
633,385
619,720
610,618
608,857
605,947
596,022
586,280
578,269
566,107
560,830
556,997
170,532
155,228
149,318
147,431
143,968
141,582
139,536
137,098
135,751
135,377
135,084
133,341
25,457
32,150
58,685
16,897
24,125
48,753
14,872
23,205
47,729
14,592
22,294
47,653
14,413
21,903
46,702
14,438
21,724
45,827
14,625
20,645
45,174
14,242
20,301
44,352
14,031
20,390
43,259
13,115
18,507
42,441
12,471
18,159
43,062
12,261
17,525
42,732
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
3,592
1,939
1,876
1,827
1,742
1,739
1,745
1,676
1,546
1,399
1,372
1,146
166,053
116,955
146,644
95,522
138,884
92,546
138,976
91,424
132,878
89,301
134,012
87,757
130,443
86,133
130,264
82,594
132,011
78,425
125,774
75,354
120,675
73,809
123,370
73,738
10 Liabilities and net worth . 1,249,055
1,084,821
1,054,654
1,041,977
1,027,464
1,020,677
1,001,582
984,971
972,529
949,047
937,776
934,295
835,4%
197,353
100,391
96,962
21,332
30,640
816,477
183,660
94,658
89,002
23,355
31,162
816,991
169,412
90,555
78,857
20,350
35,223
806,266
164,268
86,779
77,489
21,752
35,178
801,678
159,625
82,312
77,313
23,647
35,720
792,923
151,474
78,966
72,508
20,480
36,705
775,445
146,901
76,104
70,797
21,647
40,977
763,763
142,908
74,424
68,484
22,642
43,216
749,372
132,726
68,792
63,934
19,070
47,878
741,371
127,356
66,578
60,778
20,368
48,681
737,379
125,146
65,976
59,170
21,677
50,093
11
12
13
14
15
16
Savings capital
Borrowed money
FHLBB
Other
Other
Net worth
945,656
252,230
124,577
127,653
27,556
23,612
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.
1.38
3. Includes holding of stock in Federal Home Loan Bank and finance leases
plus interest.
NOTE. Components do not sum to totals because of rounding. Data for credit
unions and life insurance companies have been deleted from this table. They will
be shown in a separate table which will appear quarterly, starting in the December
issue.
SOURCE. Savings Association Insurance Fund (SAIF)-insured institutions:
Estimates by the Office of Thrift Supervision (OTS) for all institutions insured by
the SAIF and based on the OTS thrift institution Financial Report.
FEDERAL FISCAL A N D FINANCING OPERATIONS 1
Millions of dollars
Calendar year
Type of account or operation
U.S. budget2
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
Source of financing (total)
10 Borrowing from the public
11 Operating cash (decrease, or increase ( - ) ) . . .
12 Other
Fiscal
year
1989
Fiscal
year
1990
Fiscal
year
1991
1991
1992
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
990,701
727,035
263,666
1,144,020
933,107
210,911
-153,319
-206,072
52,753
1,031,308
749,652
281,656
1,251,766
1,026,711
225,065
-220,469
-277,059
56,590
1,054,260r
760,377
293,883r
1,322,989
l,081,303r
241,685r
-268,729
-320,926
52,198
76,426
54,651
21,775
120,071
97,247
22,824
-43,645
-42,596
-1,049
109,345
83,130"
26,215r
116,174
91,516r
24,658r
-6,829
-8,386
1,557
78,068
57,216
20,852
114,045
94,062
19,983
-35,976
-36,846
869
73,194
50,898
22,296
117,731r
95,438r
22,293
-44,537 r
-44,540"
3
103,662
80,172
23,490
106,094r
95,396r
10,698
-2,432 r
-15,224 r
12,792
104,040
79,886
24,154
119,742
97,189
22,553
-15,702
-17,303
1,601
141,806
3,425
8,088
220,101
818
-451
276,802
-1,329
-6,744
32,574
18,504
-7,433
27,970
-23,133
1,992
40,657
-11,235
6,554
25,641
28,195
-9,299"
22,825
-24,258
3,865r
11,449
925
3,328
40,973
13,452
27,521
40,155
7,638
32,517
41,484
7,928
33,556
18,351
6,745
11,606
41,484
7,928
33,556
52,719
18,111
34,608
24,524
6,317
18,207
48,782
17,697
31,085
47,857
10,828
37,028
MEMO
13 Treasury operating balance (level, end of
period)
14 Federal Reserve Banks
15 Tax and loan accounts
1. Components may not sum to totals because of rounding.
2. In accordance with the Balanced Budget and Emergency Deficit Control Act
of 1985, all former off-budget entries are now presented on-budget. Federal
Financing Bank (FFB) activities are now shown as separate accounts under the
agencies that use the FFB to finance their programs. The act also moved two
social security trust funds (federal old-age survivors insurance and federal
disability insurance trust fund) off-budget. The Postal Service is included as an
off-budget item in the Monthly Treasury Statement beginning in 1990.
3. Includes special drawing rights (SDRs); reserve position on the U.S. quota
in the International Monetary Fund (IMF); loans to the IMF; otheT cash and
monetary assets; accrued interest payable to the public; allocations of SDRs;
deposit funds; miscellaneous liability (including checks outstanding) and asset
accounts; seigniorage; increment on gold; net gain or loss for U.S. currency
valuation adjustment; net gain or loss for IMF loan-valuation adjustment; and
profit on sale of gold.
SOURCES. Monthly Treasury Statement of Receipts and Outlays of the U.S.
Government (MTS) and the Budget of the U.S. Government.
Federal Finance
1.39
All
U.S. BUDGET RECEIPTS A N D OUTLAYS 1
Millions of dollars
Calendar year
Source or type
Fiscal
year
1990
Fiscal
year
1991
1992
1991
1991
1990
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
Refunds
8
9 Social insurance taxes and contributions,
net
10 Employment taxes and
contributions
11
Self-employment taxes and
contributions
12 Unemployment insurance
13 Other net receipts
14
15
16
17
Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts
1,031,308
1,054,260
548,861
503,123
540,504
519,288
73,194
103,662
104,040
466,884
388,384
32
151,285
72,817
467,827
404,152
32
142,693
79,050
243,087
190,219
30
117,675
64,838
230,745
207,469
3
31,728
8,455
232,389
193,440
31
109,405
70,487
233,983
210,552
1
33,2%
9,867
31,987
32,448
0
1,743
2,205
41,722
39,943
0
2,614
835
60,451
36,047
0
25,601
1,197
110,017
16,510
113,599
15,513
58,830
8,326
54,044
7,603
58,903
7,904
54,016
7,956
2,411
895
22,546
827
3,856
864
380,047
396,011
210,476
178,468
214,303
186,839
31,502
30,9%
31,832
353,891
370,526
195,269
167,224
199,727
175,802
28,835
30,418
30,797
21,795
21,635
4,522
25,457
20,922
4,563
19,017
12,929
2,278
2,638
8,996
2,249
22,150
12,2%
2,279
3,306
8,721
2,317
0
2,293
374
0
228
350
-1,361
619
415
35,345
16,707
11,500
27,316
42,430
15,921
11,138
22,847
18,153
8,096
6,442
12,106
17,535
8,568
5,333
16,032
20,703
7,488
5,631
8,991
24,690
8,694
5,521
13,503
4,200
1,412
984
1,593
3,912
1,405
757
3,151
3,349
1,367
930
3,119
1,251,776
1,322,989
640,867
647,218
631,737
693,499'
117,731r
106,094r
119,742
272,514
16,167
15,946
1,750
18,708
14,864
152,733
6,770
6,974
1,216
7,343
7,450
149,497
8,943
8,081
979
9,933
6,878
122,089
7,592
7,4%
816
8,324
7,684
147,531
7,651
8,473
1,436
11,221
7,335
25,794
1,836
1,293
667
1,829
2,291
24,138
1,252
1,501
160
1,580
2,409
25,675
1,678
1,308
-23
1,232
878
75,639
31,531
7,432
38,672
13,754
3,987
37,491
16,218
3,939
17,992
14,748
3,552
36,579
17,094
3,784
2,099
2,882
664
-6,650
2,731
546
4,736
2,546
599
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
299,331
13,762
14,444
2,372
17,067
11,958
25
26
27
28
Commerce and housing credit
Transportation
Community and regional development ..
Education, training, employment, and
social services
67,160
29,485
8,498
38,497
41,479
19,537
18,988
21,234
21,104
3,581
3,937
4,375
29 Health
30 Social security and medicare
31 Income security
57,716
346,383
147,314
71,183
373,495
171,618
29,488
175,997
78,475
31,424
176,353
75,948
35,608
190,247
88,778
41,458
193,156
87,215
7,283
32,186
14,970
7,329
32,676
16,191
6,688
33,497
17,663
32
33
34
35
36
29,112
10,004
10,724
184,221
-36,615
31,344
12,295
11,358
195,012
-39,356
15,217
4,868
4,916
91,155
-17,688
15,479
5,265
6,976
94,650
-19,829
14,326
6,187
5,212
98,556
-18,702
17,425
6,586
6,821
99,405
-20,435
4,060
1,124
1,303
16,557
-2,566
2,637
1,142
1,313
16,564
-3,148
2,465
1,058
937
17,577
-3,147
Veterans benefits and services
Administration of justice
General government
Net interest 6
Undistributed offsetting receipts
1. Functional details do not sum to total outlays for calendar year data because
revisions to monthly totals have not been distributed among functions. Fjscal 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, 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.
A28
1.40
DomesticNonfinancialStatistics • April 1992
FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION 1
Billions of dollars, end of month
1989
1990
1991
Item
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
Dec 31
1 Federal debt outstanding
2,975.50
3,081.90
3,175.50
3,266.10
3,397.30
3,491.70
3,562.90
3,683.10
3,736.30r
2 Public debt securities
3 Held by public
4 Held by agencies
2,953.00
2,245.20
707.80
3,052.00
2,329.30
722.70
3,143.80
2,368.80
775.00
3,233.30
2,437.60
795.80
3,364.80
2,536.60
828.30
3,465.20
2,598.40
866.80
3,538.00
2,642.90
895.10
3,665.30
2,745.70
919.60
3,801.70
n.a.
n.a.
22.50
22.40
.10
29.90
29.80
.20
31.70
31.60
.20
32.80
32.60
.20
32.50
32.40
.10
26.50
26.40
.10
25.00
24.80
.10
17.80
17.60
.10
5 Agency securities
6
Held by public
7
Held by agencies
n.a.
n.a.
n.a.
2,921.70
2,988.90
3,077.00
3,161.20
3,281.70
3,377.10
3,450.30
3,569.30
9 Public debt securities
10 Other debt 2
2,921.40
.30
2,988.60
.30
3,076.60
.40
3,160.90
.40
3,281.30
.40
3,376.70
.40
3,449.80
.40
3,569.00
.30
3,706.40
.40
11 MEMO: Statutory debt limit
3,122.70
3,122.70
3,122.70
3,195.00
4,145.00
4,145.00
4,145.00
4,145.00
4,145.00
8 Debt subject to statutory limit
1. Components may not sum to totals because of rounding.
2. Consists of guaranteed debt of Treasury and other federal agencies, specified
participation certificates, notes to international lending organizations, and District
1.41
GROSS PUBLIC DEBT OF U.S. TREASURY
of Columbia stadium bonds.
SOURCES. Treasury Bulletin and Monthly Statement of the Public Debt of the
United States.
Types and Ownership 1
Billions of dollars, end of period
1991
Type and holder
1 Total gross public debt
2
3
4
5
6
7
8
9
10
11
12
13
14
By type
Interest-bearing
Marketable
Bills
Notes
Bonds
Nonmarketable 2
State and local government series
Foreign issues 3
Government
Public
Savings bonds and notes
Government account series4
Non-interest-bearing
By holder 5
15 U.S. Treasury and other federal agencies and trust funds
16 Federal Reserve Banks
17 Private investors
18 Commercial banks
19 Money market funds
20 Insurance companies
21 Other companies
22 State and local treasuries
Individuals
23
Savings bonds
24
Other securities
25
Foreign and international
26
Other miscellaneous investors
1988
1990
1991
Q1
Q2
Q3
Q4
2,684.4
2,953.0
3,364.8'
3,801.7
3,465.2
3,538.0
3,665.3
3,801.7
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
21.3
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
21.2
3,362.0
2,195.8
527.4
1,265.2
388.2
1,166.2
160.8
43.5
43.5
.0
124.1
813.8
2.8
3,798.9
2,471.6
590.4
1,430.8
435.5
1,327.2
159.7
41.9
41.9
.0
135.9
959.2
2.8
3,441.4
2,227.9
533.3
1,280.4
399.3
1,213.5
159.4
42.8
42.8
.0
127.7
853.1
23.8
3,516.1
2,268.1
521.5
1,320.3
411.2
1,248.0
161.0
42.1
42.1
.0
131.3
883.2
21.9
3,662.8
2,390.7
564.6
1,387.7
423.4
1,272.1
158.1
41.6
41.6
.0
133.5
908.4
2.5
3,798.9
2,471.6
590.4
1,430.8
435.5
1,327.2
159.7
41.9
41.9
.0
135.9
959.2
2.8
589.2
238.4
1,858.5
193.8
11.8
107.3
87.1
313.6
707.8
228.4
2,015.8
174.8
14.9
130.1
93.4
338.7
828.3
259.8
2,288.3
188.2
45.4
149.7
108.9
329.6
866.8
247.3
2,360.6
194.8
65.7
149.3
114.9
329.5
895.1
255.1
2,397.9
204.2
55.2
155.1
130.8
327.0
919.6
264.7
2,489.4
214.0
64.5
157.0
142.0
326.0
109.6
79.2
362.2
593.4
117.7
98.7
392.9
654.6
126.2
107.6
423.2
822.4
129.7
108.6
430.7
837.4
133.2
110.3
441.2
840.9
135.4
122.1
444.8
883.6
1. Components may not sum to totals because of rounding.
2. Includes (not shown separately) securities issued to the Rural Electrification
Administration, depository bonds, retirement plan bonds, and individual retirement bonds.
3. Nonmarketable series denominated in dollars, and series denominated in
foreign currency held by foreigners.
4. Held almost entirely by U.S. Treasury and other federal agencies and trust
funds.
5. Data for Federal Reserve Banks and U.S. government agencies and trust
1989
n.a.
n.a.
funds are actual holdings; data for other groups are Treasury estimates.
6. Consists of investments of foreign balances and international accounts in the
United States.
7. 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, the Treasury
Bulletin.
Federal Finance All
1.42
U.S. GOVERNMENT SECURITIES DEALERS
Transactions 1
Millions of dollars, daily averages, par value
1992, week ending
1991, week ending
1991
Item
Dec. 4
Dec. 11
Dec. 18
Dec. 25
Jan. 1
Jan. 8
Jan. 15
Jan. 22
Jan. 29
30,957r
28,497
34,549"
32,804
30,880
26,080
37,021
47,436
33,151
32,335
42,034
33,385
18,691
18,559
32,848rr
29,975
14,018r
14,508r
33,775
31,799
13,578
11,601
37,494
36,389
19,959
21,265
37,513
32,629
13,752
13,150
34,762
32,028
13,611
15,500
18,599
15,218
7,663
8,949
35,863
41,188
16,713
16,784
59,975
53,921
24,708
21,137
49,491
44,476
18,752
18,481
51,138
40,483
18,515
14,787
4,428
571
736
4,089
700
904
4,636
610
739
4,205
933
1,167
4,998
843
999
4,983
680
707
4,352
375
597
4,359
226
275
6,009
704
611
3,562
678
885
5,060
663
597
6,276
620
622
11,954
2,638
14,169
2,934
11,900
2,662
10,193
2,440
15,685
3,019
14,184
3,161
11,919
2,388
5,576
2,035
16,940
2,507
14,124
3,242
14,354
3,200
10,624
2,978
88,007
93,690"
73,458r
72,738
93,103r
78,975
72,225
43,776
90,502
131,312
102,953
103,810
1,216
7,142
1,344
8,303
1,534
5,818
Oct.
Nov.
Dec.
35,273
36,252r
38,280
35,454
16,202
15,710
IMMEDIATE TRANSACTIONS2
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
By type of security
U.S. Treasury securities
Bills
Coupon securities, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 to 15 years
15 years or more
Federal agency securities
Debt, maturing in
Less than 3.5 years
3.5 to 7.5 years
7.5 years or more
Mortgage-backed securities
Pass-throughs
All others
By type of counterparty
Primary dealers and brokers
U.S. Treasury securities
Federal agency securities
Debt
Mortgage-backed
Customers
U.S. Treasury securities
Federal agency securities
Debt
Mortgage-backed
1,585
6,803
1,387
8,245
1,383
6,227
1,790
5,317
1,693
8,323
1,495
7,672
1,026
5,996
907
2,714
1,779
8,691
52,913
55,231
48,848r
46,511
56,553
50,873
54,554
32,733
57,067
75,866
61,399
53,448
4,150
7,788
4,305
8,858
4,604
8,336
4,516
7,315
5,148
10,381
4,876
9,673
4,299
8,312
3,953
4,897
5,546
10,756
3,909
10,224
4,976
9,251
5,984
7,784
3,073
3,740
3,295
4,102
6,001
2,170
2,431
1,576
5,801
3,125
3,157
4,234
1,312
812
941
9,273
1,673
864
1,224
10,328
l,801r
1,096
1,052
7,264
1,195
872
776
5,937
1,381
1,305
1,498
10,178
1,289
867
1,218
6,612
4,093
1,888
703
8,496
1,130
495
844
4,200
1,619
1,220
1,372
10,160
2,600
1,851
2,078
14,160
2,131
1,390
1,859
11,839
2,552
1,477
1,680
10,259
92
38
25
94
73
63
119
39
30
22
134
49
22
47
13
204
17
54
315
16
24
12
6
14
4
10
7
28
160
51
285
71
38
17
55
8
12,076
2,339
12,374
1,745
9,lllr
1,308
7,270
927
13,528
2,024
9,813
1,169
9,683
1,456
3,521
725
16,120
1,225
22,000
2,094
14,748
2,288
15,722
2,657
1,025
420
381
2,205
975
640
523
3,482
1,074
526
386
2,019
807
631
631
1,877
1,200
1,058
381
2,420
425
234
252
1,739
2,273
517
413
2,528
728
156
350
1,467
1,332
507
575
2,304
1,973
492
490
2,350
1,560
210
696
3,057
1,390
211
1,323
2,877
532
334
480
339
875
176
713
237
1,758
601
402
438
FUTURE AND FORWARD
TRANSACTIONS4
By type of deliverable security
U.S. Treasury securities
17 Bills
Coupon securities, by maturity
18 Less than 3.5 years
19 3.5 to 7.5 years
20 7.5 to 15 years
21
15 years or more
Federal agency securities
Debt, maturing in
22
Less than 3.5 years
23
3.5 to 7.5 years
24
7.5 years or more
Mortgage-backed
25
Pass-throughs
26
Others
OPTION TRANSACTIONS5
27
28
29
30
31
By type of underlying security
U.S. Treasury, coupon
securities, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 to 15 years
15 years or more
Federal agency, mortgagebacked securities
Pass-throughs
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. Immediate, forward, and future transactions
are reported at principal value, which does not include accrued interest; option
transactions are reported at the face value of the underlying securities.
Dealers report cumulative transactions for each week ending Wednesday.
2. Transactions for immediate delivery include purchases or sales of securities
(other than mortgage-backed agency securities) for which delivery is scheduled in
five business days or less and "when-issued" securities that settle on the issue
date of offering. Transactions for immediate delivery of mortgage-backed securities
include purchases and sales for which delivery is scheduled in thirty days or less.
Stripped securities are reported at market value by maturity of coupon or corpus.
3. Includes such securities as collateralized mortgage obligations (CMOs), real
estate mortgage investment conduits (REMICs), interest only securities (IOs),
and principal only securities (POs).
4. Futures transactions are standardized agreements arranged on an exchange.
Forward transactions are agreements made in the over-the-counter market that
specify delayed delivery. All futures transactions are included regardless of time
to delivery. Forward contracts for U.S. Treasury securities and federal agency
debt securities are included when the time to delivery is more than five days.
Forward contracts for mortgage-backed securities are included when the time to
delivery is more than thirty days.
5. Options transactions are purchases or sales of put-and-call options, whether
arranged on an organized exchange or in the over-the-counter market, and include
options on futures contracts on U.S. Treasury and federal agency securities.
NOTE. In tables 1.42 and 1.43, the term "n.a." refers to data that are not
published because of insufficient activity.
Data formerly shown under option transactions for U.S. Treasury securities,
bills; Federal agency securities, debt; and mortgage-backed securities, other than
pass-throughs are no longer available because of insufficient activity.
A30
1.43
DomesticNonfinancialStatistics • April 1992
U.S. GOVERNMENT SECURITIES DEALERS
Positions and Financing 1
Millions of dollars
1992, week ending
1991, week ending
1991
item
Oct.
Dec.
Nov.
Nov. 27
Dec. 4
Dec. 11
Dec. 18
Positions
Dec. 25
Jan. 1
Jan. 8
Jan. 15
Jan. 22
2
N E T IMMEDIATE TRANSACTIONS3
By type of security
U.S. Treasury securities
1 Bills
Coupon securities, by maturity
2 Less than 3.5 years
3 3.5 to 7.5 years
4 7.5 to 15 years
5
15 years or more
Federal agency securities
Debt, maturing in
6
Less than 3.5 years
7
3.5 to 7.5 years
8
7.5 years or more
Mortgage-backed securities
9 Pass-throughs
10 All others' .
Other money market instruments
11 Certificates of deposit
12 Commercial paper
13 Bankers acceptances
15,720
15,482
17,034
10,990
14,921
17,261
18,469
17,134
16,202
11,629
10,224
13,120
6,362
-2,993
-3,733
-8,144
7,368
-8,509
-3,844
-7,296
5,510
-6,729
-5,926
-1,437
5,197
-8,204
-4,885
-5,493
5,771
-10,663
-6,332
-3,816
3,636
-8,291
-6,640
-2,050
7,501
-8,598
-5,232
-1,450
6,137
-2,872
-5,484
-293
4,788
-4,176
-6,080
-632
4,524
-2,328
-7,638
-455
840
-5,312
-4,873
-2,292
6,508
-11,486
-6,086
-2,049
4,104
1,940
5,108
4,099
2,314
4,231
4,469
2,723
3,695
3,298
2,462
3,685
6,035
2,698
4,046
3,841
2,796
3,720
4,121
2,678
3,580
5,398
2,719
3,830
3,508
2,696
3,492
2,951
2,856
3,656
4,005
3,527
3,572
4,130
3,795
3,648
25,712
14,414
27,555
15,780
22,350
17,575
21,506
17,795
18,525
17,868
27,315
16,620
26,517
16,373
24,685
17,397
13,550
20,119
23,937
20,670
29,624
18,725
29,668
18,717
3,355
6,481
1,495
3,147
6,194
1,574
2,928
5,420
1,413
2,644
5,847
1,630
3,435
5,296
1,840
2,610
5,889
1,564
2,562
6,148
1,257
3,168
5,200
1,301
3,110
4,361
1,264
3,709
4,253
1,330
3,593
5,653
1,000
3,445
5,833
1,392
-8,523
-10,708
-9,316
-10,350
-13,238
-11,880
-8,267
-6,389
-8,082
-12,918
-11,273
-11,078
1,195
-1,553
-1,061
-3,551
394
-1,565
-500
-2,016
2,144
-516
-542
-5,074
111
-1,566
-575
-2,594
209
-1,077
-337
-4,149
441
-945
449
-5,747
2,984
-235
-730
-5,356
3,645
-719
-1,042
-5,217
2,650
-16
-1,617
-4,746
2,142
1,870
-34
-5,532
1,987
3,040
224
-4,306
243
3,263
1,740
-5,009
35
-60
-18
54
16
94
112
123
18
180
75
287
-45
-65
180
-14
109
56
-97
145
-83
428
187
231
135
58
-14
187
-24
300
39
0
1,061
317
100
FUTURE AND FORWARD TRANSACTIONS5
14
15
16
17
18
19
20
21
22
23
24
By type of deliverable security
U.S. Treasury securities
Bills
Coupon securities, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 to 15 years
15 years or more
Federal agency securities
Debt, maturing in
Less than 3.5 years
3.5 to 7.5 years
7.5 years or more
Mortgage-backed securities
Pass-throughs
All others
Certificates of deposit
-1
-6,874
-9,585
4,041
-7,472 -13,065 -11,497
-15,336 -14,580
-2,912 -12,654 -12,046
-8,898
1,460
2,223
338
1,365
1,883
1,081
1,779
1,506
1,417
1,867
3,429
1,363
-153,734 -175,570 -190,580 -179,251 -179,492 -190,448 -190,469 -198,974 -196,901 -193,222 -135,563 -133,527
Financing6
Reverse repurchase agreements
25 Overnight and continuing
26
182,835
251,079
179,781
254,361
167,562
233,972
162,257
252,491
183,095
234,131
180,718
245,766
172,652
236,075
149,592
243,182
156,887
206,910
203,686
263,130
210,043
278,315
208,845
281,433
Repurchase agreements
27 Overnight and continuing
28 Term
287,307
234,937
270,661
255,652
263,365
231,374
221,264
292,960
282,007
219,421
285,609
232,870
286,300
225,806
242,050
258,941
223,096
211,932
314,115
233,496
332,437
258,725
332,730
263,295
Securities borrowed
29 Overnight and continuing
30
59,052
23,690
62,159
28,080
62,441
29,811
64,400
32,989
64,191
29,679
62,784
30,823
62,399
29,610
60,518
31,048
63,168
27,509
65,749
32,103
68,424
32,833
69,153
30,336
Securities loaned
31 Overnight and continuing
32 Term
9,304
742
9,271
1,363
8,302
897
9,330
4,057
7,434
387
7,352
410
8,763
396
8,621
1,775
9,080
1,364
8,702
834
10,566
1,249
10,295
833
Collateralized loans
33 Overnight and continuing
8,547
10,097
10,755
10,204
9,567
9,692
10,719
10,881
12,684
19,105
17,833
17,984
MEMO: Matched book7
Reverse repurchases
34 Overnight and continuing
35 Term
124,310
205,104
123,670
205,613
116,612
197,052
114,179
205,149
124,129
193,840
119,955
203,366
123,691
200,344
109,340
209,184
107,925
173,832
142,013
226,219
150,223
239,862
146,554
241,594
Repurchases
36 Overnight and continuing
37 Term
143,450
181,206
135,345
192,103
137,254
170,102
112,602
208,512
143,575
163,073
148,199
178,622
140,897
175,124
125,160
185,520
130,128
141,000
176,104
177,584
179,318
193,902
179,831
197,339
1. Data for positions and financing are obtained from reports submitted to the
Federal Reserve Bank of New York by the U.S. government securities dealers on
its published list of primary dealers. Weekly figures are close-of-business Wednesday data; monthly figures are averages of weekly data. Data for positions and
financing are averages of close-of-business Wednesday data.
2. Securities positions are reported at market value.
3. Net immediate positions include securities purchased or sold (other than
mortgage-backed agency securities) that have been delivered or are scheduled to
be delivered in five business days or less and "when-issued" securities settle on
the issue date of offering. Net immediate positions of mortgage-backed securities
include securities purchased or sold that have been delivered or are scheduled to
be delivered in thirty days or less.
4. Includes securities such as collateralized mortgage obligations (CMOs), real
estate mortgage investment conduits (REMICs), interest only (IOs), and principal
only (POs).
5. Futures positions are standardized contracts arranged on an exchange.
Forward positions reflect agreements made in the over-the-counter market that
specify
FRASER delayed delivery. All futures positions are included regardless of time to
Digitized for
delivery. Forward contracts for U.S. Treasury securities and for federal agency
debt securities are included when the time to delivery is more than five business
days. Forward contracts for mortgage-backed securities are included when the
time to delivery is more than thirty days.
6. Overnight financing refers to agreements made on one business day that
mature on the next business day; continuing contracts are agreements that remain
in effect for more than one business day but have no specific maturity and can be
terminated without advance notice by either party; term agreements have a fixed
maturity of more than one business day .
7. Matched-book data reflect financial intermediation activity in which the
borrowing and lending transactions are matched. Matched-book data are included
in the financing breakdowns given above. The reverse repurchase and repurchase
numbers are not always equal because of the "matching" of securities of different
values or types of collateralization.
NOTE. Data for future and forward commercial paper and bankers' acceptances
and term financing of collateralized loans are no longer available because of
insufficient activity.
Federal Finance All
1.44
FEDERAL A N D FEDERALLY SPONSORED CREDIT AGENCIES
Debt Outstanding
Millions of dollars, end of period
1991
Agency
1 Federal and federally sponsored agencies
2 Federal agencies
3 Defense Department 1
4 Export-Import Bank 2,3
5 Federal Housing Administration4
6 Government National Mortgage Association participation
certificates
7 Postal Service 6
8 Tennessee Valley Authority
9
United States Railway Association6
10 Federally sponsored agencies7
11 Federal Home Loan Banks
12 Federal Home Loan Mortgage Corporation
13 Federal National Mortgage
Association
14 Farm Credit Banks 8
15 Student Loan Marketing Association
16 Financing Corporation
17 Farm Credit Financial Assistance Corporation11
18 Resolution Funding Corporation 12
1988
1987
1989
1990
July
Aug.
Sept.
Oct.
Nov.
341,386
381,498
411,805
434,668
432,637
437,942
436,189
438,032
439,670
37,981
13
11,978
183
35,668
8
11,033
150
35,664
7
10,985
328
42,159
7
11,376
393
40,380
7
11,244
300
40,923
7
11,244
315
42,409
7
11,267
336
42,638
7
11,267
337
42,951
7
11,267
365
1,615
6,103
18,089
0
0
6,142
18,335
0
0
6,445
17,899
0
0
6,948
23,435
0
0
6,621
22,208
0
0
6,621
22,745
0
0
8,421
22,378
0
0
8,421
22,606
0
0
8,421
22,891
0
303,405
115,727
17,645
97,057
55,275
16,503
1,200
0
0
345,830
135,836
22,797
105,459
53,127
22,073
5,850
690
0
375,407
136,108
26,148
116,064
54,864
28,705
8,170
847
4,522
392,509
117,895
30,941
123,403
53,590
34,194
8,170
1,261
23,055
392,257
106,397
29,559
128,764
51,318
36,742
8,170
1,261
29,9%
397,019
107,469
31,650
128,589
52,056
37,778
8,170
1,261
29,996
393,780
106,510
31,502
127,460
52,010
36,821
8,170
1,261
29,9%
395,394
105,945
31,818
128,594
52,488
37,072
8,170r
1,261
29,9%
3%,719
107,344
31,099
130,197
52,105
36,497
8,170
1,261
29,9%
152,417
142,850
134,873
179,083
186,752
188,920
194,234
192,747
194,837
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
11,370
6,698
4,850
14,055
0
11,238
6,401
4,850
12,828
0
11,238
6,401
4,850
12,373
0
11,261
8,201
4,850
11,875
0
11,261
8,201
4,820
11,375
0
11,261
8,201
4,820
11,375
0
59,674
21,191
32,078
58,496
19,246
26,324
53,311
19,265
23,724
52,324
18,890
70,8%
51,334
18,832
81,269
51,334
18,846
83,878
50,694
18,597
88,756
48,534
18,599
89,957
48,534
18,628
92,018
MEMO
19 Federal Financing Bank debt13
20
21
22
23
24
Lending to federal and federally sponsored agencies
Export-Import Bank
Postal Service 6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association6
Other Lending14
25 Farmers Home Administration
26 Rural Electrification Administration
27 Other
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. On-budget after Sept. 30, 1976.
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 debentures. Some data are estimated.
8. Excludes borrowing by the Farm Credit Financial Assistance Corporation,
shown in line 17.
9. Before late 1982, the Association obtained financing through the Federal
Financing Bank (FFB). Borrowing excludes that obtained from the FFB, which is
shown on line 22.
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. 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.
14. 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.
A32
t.45
DomesticNonfinancialStatistics • April 1992
N E W SECURITY ISSUES
Tax-Exempt State and Local Governments
Millions of dollars
1991
Type of issue or issuer,
or use
1989
1 All issues, new and refunding1
113,646
1992
1991r
1990
June
July
Aug.
Sept.
Oct.
Nov.
Dec.*
Jan.
120,339 154,402r
13,804
11,629
15,744
13,240
11,357
17,734
15,796
12,612
By type of issue
2 General obligation
3 Revenue
35,774
77,873
39,610
81,295
55,100*
99,302*
4,442
9,362
3,900
7,729
5,919
9,825
5,253
7,987
3,088
8,269
6,510
11,224
5,871
9,925
3,954
8,658
By Type of issuer
4 State
5 Special district or statutory authority2
6 Municipality, county, or township
11,819
71,022
30,805
15,149
72,661
32,510
n.a.
n.a.
n.a.
1,529
5,057
7,218
650
7,320
3,659
2,328
8,890
4,526
3,371
6,272
3,597
7,195
605
3,557
1,171
10,817
5,746
1,671
9,435
4,690
1,036
8,243
3,333
7 Issues for new capital, total
84,062
10,008
9,513
12,164
9,586
8,967
13,495
12,020
7,127
By use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
15,133
6,870
11,427
16,703
5,036
28,894
1,568
1,570
1,884
2,220
895
1,871
2,033
629
1,763
1,986
511
2,591
1,585
720
1,673
4,119
676
3,391
1,507
1,248
1,573
2,793
916
1,549
1,511
1,744
1,825
1,276
973
1,638
1,297
2,682
1,915
2,621
349
4,631
1,924
488
1,931
3,070
1,083
3,524
2,385
1,194
1,953
868
218
n.a.
8
9
10
11
12
13
103,235 116,953r
17,042
11,650
11,739
23,099
6,117
n.a.
21,664*
13,395*
21,447
26,121
8,542
n.a.
1. Par amounts of long-term issues based on date of sale.
2. Since 1986, has included school districts.
1.46
NEW SECURITY ISSUES
SOURCES. Investment Dealer's Digest beginning April 1990. Securities Data/
Bond Buyer Municipal Data Base beginning 1986. Public Securities Association
for earlier data.
U.S. Corporations
Millions of dollars
1991
Type of issue, offering,
or issuer
1989
1990
1991
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
1 All issues1
378,760*
340,197*
379,560
37,908*
31,837*
23,176*
35,450*
32,180*
34,893*
34,276*
31,586
2 Bonds2
320,889*
299,959*
314,201
30,490*
26,219*
20,494*
28,720*
26,759*
26,029*
25,223*
24,066
By type of offering
3 Public, domestic
4 Private placement, domestic 3
5 Sold abroad
180,618*
117,420
22,851
189,917*
86,988
23,054
287,010
n.a.
27,192
27,660*
n.a.
2,830
23,797*
n.a.
2,422*
18,920*
n.a.
1,574*
26,845*
n.a.
1,875*
23,856*
n.a.
2,902*
23,469*
n.a.
2,560*
23,200*
n.a.
2,070*
23,300
n.a.
1,000
76,456*
49,615*
10,032
18,696*
8,461
157,629*
53,110
40,019
12,818*
17,621*
6,597*
169,789*
69,710
20,694
6,998
20,454
8,541
187,806
7,080*
1,213*
665
2,722
337
18,474
4,260*
1,773
567
1,644
1,838
16,138*
3,600*
1,500
697
1,457
749*
12,492*
7,643*
1,388
809
1,897
668
16,315*
6,949*
1,012
231
1,315*
408
16,844*
4,732*
1,209
744*
1,430*
958
16,957*
4,536*
2,044
180*
3,063*
226*
15,175*
4,956
1,977
150
2,238
1,085
13,660
12 Stocks2
57,870
40,165
n.a.
7,418
5,618
2,682
6,730
5,421
8,864
9,053
7,520
By type of offering
13 Public preferred
14 Common
15 Private placement3
6,194
26,030
25,647
3,998
19,443
16,736
17,408
47,860
n.a.
1,392
6,027
n.a.
1,731
3,887
n.a.
203
2,479
n.a.
1,952
4,778
n.a.
666
4,755
n.a.
3,527
5,337
n.a.
3,240
5,813
n.a.
2,771
4,749
n.a.
9,308
7,446
1,929
3,090
1,904
34,028
5,649
10,171
369
416
3,822
19,738
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
2,291
1,563
277
573
0
2,714
1,909
851
0
471
295
2,091
685
1,427
18
143
46
350
3,167
2,050
56
150
8
1,298
1,842
858
0
55
0
2,666
3,623
2,095
16
320
25
2,622
4,054
2,158
0
174
84
2,583
2,684
2,535
0
233
17
2,014
6
7
8
9
10
11
16
17
18
19
20
21
By industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
By industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
1. Figures represent gross proceeds of issues maturing in more than one year;
they are the principal amount or number of units calculated by multiplying by the
offering price. Figures exclude 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 cover only public offerings.
3. Monthly data are not available.
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 Market and Corporate Finance
1.47
O P E N - E N D INVESTMENT COMPANIES
A33
Net Sales and Assets
Millions of dollars
1991
Item1
1991
1990"
May
June
July
Aug.
Sept.
Oct.
Nov. r
Dec.
1 Sales of own shares2
344,420
464,488
36,719
33,922
39,329
38,014
37,316
45,218
41,365
52,035
3 Net sales3
288,441
55,979
342,088
122,400
26,972
9,747
27,629
6,293
28,767
10,562
28,128
9,886
26,319
10,997
27,957
17,261
28,454
12,911
38,557
13,478
4 Assets4
568,517
807,001
671,852
661,643
(90,486
712,782
730,426
753,344
752,798
807,001
48,638
519,875
60,937
746,064
55,450
616,402
55,057
606,586
55,293
635,193
52,791
659,992
53,884
676,543
59,902
695,492
59,689
693,109
60,937
746,064
5
5 Cash
6 Other
4. Market value at end of period, less current liabilities.
5. Includes all U.S. Treasury securities and other short-term debt securities.
SOURCE. Investment Company Institute. Data based on reports of membership,
which comprises substantially all open-end investment companies registered with
the Securities and Exchange Commission. Data reflect underwritings of new
companies.
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 dividends. Excludes reinvestment of capital gains
distributions.
3. Does not includes sales or redemptions resulting from transfers of shares
into or out of money market mutual funds within the same fund family.
1.48
CORPORATE PROFITS A N D THEIR DISTRIBUTION
Billions of dollars; quarterly data at seasonally adjusted annual rates
1989
Account
1988
1989
1990
1991
1990
Q4
Ql
Q2
Q3
Q4
Ql
Q2
Q3
1 Profits with inventory valuation and
capital consumption adjustment
2 Profits before taxes
3 Profits tax liability
4 Profits after taxes
5 Dividends
Undistributed profits
6
365.0
347.5
137.0
210.5
115.3
95.2
351.7
344.5
138.0
206.6
127.9
78.7
319.0
332.3
135.3
197.0
133.7
63.3
334.7
332.8
129.8
203.0
130.7
72.3
340.2
336.6
137.6
199.1
132.3
66.7
339.8
331.6
137.9
193.7
132.5
61.2
299.8
335.1
138.8
196.3
133.8
62.5
296.1
326.1
127.1
199.0
136.2
62.8
302.1
309.1
119.4
189.7
137.8
51.9
303.5
306.2
123.5
182.7
136.7
46.1
306.1
318.2
128.6
189.6
138.1
51.5
7 Inventory valuation
8 Capital consumption adjustment
-27.3
44.7
-17.5
24.7
-14.2
.8
-13.5
15.4
-6.6
10.2
3.8
4.4
-32.6
-2.7
-21.2
-8.8
6.7
-13.6
9.9
-12.6
-4.8
-7.3
SOURCE. Survey of Current Business (U.S. Department of Commerce).
1.50
TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment
Billions of dollars; quarterly data at seasonally adjusted annual rates
19911
1990
Industry
1990
1991
19921
19921
Q2
Q3
Q4
Ql
Q2
Q3
Q4
Ql
1 Total nonfarm business
532.61
529.97
558.60
534.55
534.11
530.13
535.50
524.57
527.86
531.96
563.31
Manufacturing
2 Durable goods industries
3 Nondurable goods industries
82.58
110.04
77.04
107.27
79.38
104.68
84.15
110.87
82.48
111.57
79.03
110.69
81.24
109.90
79.69
107.66
74.51
102.54
72.74
108.98
80.58
107.52
9.88
10.06
9.50
9.77
9.97
10.12
9.89
10.09
10.09
10.15
10.58
6.40
8.87
6.20
5.84
9.84
6.50
6.78
12.34
7.12
6.67
9.37
5.90
5.66
9.55
5.87
6.81
7.54
6.82
5.59
11.18
6.48
6.27
10.10
6.68
6.50
9.81
6.52
5.02
8.27
6.32
5.52
12.88
6.41
44.10
23.11
241.43
43.56
22.42
247.44
47.34
24.10
267.35
42.83
21.80
243.18
43.80
23.88
241.32
45.88
24.36
238.87
43.36
23.68
244.19
42.87
21.71
239.50
43.09
23.38
251.42
44.90
20.92
254.66
48.54
22.98
268.28
Nonmanufacturing
4 Mining
Transportation
5 Railroad
6 Air
7 Other
Public utilities
8 Electric
9 Gas and other
10 Commercial and o t h e r
1. Figures are amounts 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 (U.S. Department of Commerce).
A34
1.51
DomesticNonfinancialStatistics • April 1992
DOMESTIC FINANCE COMPANIES
Assets and Liabilities
Billions of dollars, end of period; not seasonally adjusted
1990
Account
1987
1988
1991
1989
Q1
Q2
Q3
Q4
Ql
Q2
Q3
ASSETS
Accounts receivable, gross1
Consumer
Business
Real estate
388.1
141.1
207.4
39.5
426.2
146.2
236.5
43.5
445.7
140.8
256.0
48.9
452.8
137.9
262.9
52.1
468.8
138.6
274.8
55.4
474.0
140.9
275.4
57.7
486.7
136.0
290.8
59.9
478.9
131.6
290.0
57.3
487.9
133.9
295.5
58.5
487.8
132.5
296.6
58.7
45.3
6.8
50.0
7.3
52.0
7.7
51.9
7.9
54.3
8.2
55.1
8.6
56.6
9.2
57.0
10.3
58.7
10.8
59.6
12.9
7 Accounts receivable, net
8 All other
336.0
58.3
368.9
72.4
386.1
91.6
393.0
92.5
406.3
95.5
410.3
102.8
420.9
99.6
411.6
103.4
418.4
106.1
415.2
111.9
9 Total assets
394.2
441.3
477.6
485.5
501.9
513.1
520.6
515.0
524.5
527.1
16.4
128.4
15.4
142.0
14.5
149.5
13.9
152.9
15.8
152.4
15.6
148.6
19.4
152.7
22.0
141.2
22.7
140.6
24.0
138.1
28.0
137.1
n.a.
n.a.
52.8
31.5
n.a.
n.a.
50.6
137.9
59.8
35.6
n.a.
n.a.
63.8
147.8
62.6
39.4
n.a.
n.a.
70.5
145.7
61.7
40.7
n.a.
n.a.
72.8
153.0
66.1
41.8
n.a.
n.a.
82.0
156.6
68.7
41.6
n.a.
n.a.
82.7
157.0
66.0
42.8
n.a.
n.a.
77.8
162.4
68.0
43.7
n.a.
n.a.
81.7
164.2
72.2
43.0
n.a.
n.a.
87.4
163.4
72.1
42.1
394.2
441.3
477.6
485.5
501.9
513.1
520.6
515.0
524.5
527.1
1
2
3
4
5 LESS: Reserves for unearned income
6
Reserves for losses
LIABILITIES AND CAPITAL
10 Bank loans
11 Commercial paper
Debt
Other short-term
Long-term
Due to parent
Not elsewhere classified
All other liabilities
Capital, surplus, and undivided profits
12
13
14
15
16
17
18 Total liabilities and capital
1. Excludes pools of securitized assets.
1.52
DOMESTIC FINANCE COMPANIES
Business Credit Outstanding and Net Change 1
Millions of dollars, end of period; seasonally adjusted, except as noted
1991
Type of credit
July
Aug.
Sept.
Oct.
Nov.
Dec.
258,957
292,638
309,709
300,161
305,024
307,599
310,876
311,632
309,709
39,479
29,627
698
38,110
31,784
951
33,204
35,404
819
35,491
32,194
793
34,665
33,146
833
34,119
34,822
797
34,167
33,989
769
33,664
33,375
746
33,204
35,404
819
Wholesale
Automotive
Equipment
All other
Pools of securitized assets 2
33,814
6,928
9,985
0
32,283
11,569
9,126
2,950
32,487
9,790
8,459
4,905
29,454
11,344
8,807
2,843
30,637
10,631
8,712
3,508
30,072
10,594
8,695
4,053
31,831
11,075
8,407
4,458
32,292
10,414
8,418
4,639
32,487
9,790
8,459
4,905
Leasing
9 Automotive
10 Equipment
11 Pools of securitized assets 2
26,804
68,240
1,247
39,129
75,626
1,849
44,445
87,821
1,820
43,024
84,311
1,750
44,628
86,145
1,679
45,387
86,732
1,844
45,837
87,701
1,803
45,299
90,079
1,885
44,445
87,821
1,820
12 Loans on commercial accounts receivable and factored
commercial accounts receivable
13 All other business credit
18,511
23,623
22,475
26,784
23,859
26,697
23,125
27,025
23,366
27,073
23,204
27,279
23,295
27,544
23,338
27,483
23,859
26,697
1 Total
Retail financing of installment sales
2 Automotive
3 Equipment
4 Pools of securitized assets 2
5
6
7
8
Net change (during period)
24,066
33,681
17,071
1,933
4,862
2,576
3,277
756
-1,923
2,269
1,442
-26
-1,369
2,157
253
-4,906
3,619
-132
100
4
86
-825
952
40
-547
1,676
-36
48
-833
-28
-503
-614
-23
-460
2,029
73
Wholesale
Automotive
Equipment
All other
Pools of securitized assets 2
861
957
628
0
-1,532
4,641
-859
2,950
204
-1,779
-668
1,955
149
917
-44
38
1,183
-713
-95
665
-564
-37
-17
545
1,759
481
-289
405
461
-662
11
181
195
-624
41
266
Leasing
9 Automotive
10 Equipment
11 Pools of securitized assets 2
2,111
10,581
526
12,325
7,386
602
5,316
12,195
-29
1,421
350
25
1,604
1,834
-71
759
587
165
450
969
-41
-538
2,378
82
-854
-2,258
-65
825
2,446
3,964
3,161
1,383
-87
-914
-199
240
47
-162
207
91
264
43
-60
520
-786
1 Total
Retail financing of installment sales
2 Automotive
3 Equipment
4 Pools of securitized assets
5
6
7
8
12 Loans on commercial accounts receivable and factored
commercial accounts receivable
13 All other business credit
1. Data in this table also appear in the Board's G.20 (422) monthly
http://fraser.stlouisfed.org/
release. For ordering address, see inside front cover.
Federal Reserve Bank of St. Louis
statistical
2. Data on pools of securitized assets are not seasonally adjusted,
Real Estate
1.53
A35
MORTGAGE MARKETS Conventional Mortgages on New Homes
Millions of dollars, except as noted
1991
Item
1989
1990
1992
1991
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Terms and yields in primary and secondary markets
PRIMARY MARKETS
1
2
3
4
5
6
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 series3
8 HUD series4
159.6
117.0
74.5
28.1
2.06
9.76
153.2
112.4
74.8
27.3
1.93
9.68
155.0
114.0
75.0
26.8
1.71
9.02
165.1
121.6
75.0
27.0
1.85
9.12
159.0
115.7
74.6
27.1
1.74
9.19
157.8
114.3
73.3
25.9
1.86
9.00
153.4
115.0
76.5
27.5
1.61
8.78
162.6
116.0
73.5
26.4
1.53
8.38
159.1
113.8
73.1
26.4
1.50
8.28
153.9
114.9
75.2
26.2
1.85
8.17
10.11
10.21
10.01
10.08
9.30
9.20
9.43
9.46
9.48
9.22
9.30
8.88
9.04
8.76
8.64
8.67
8.53
8.30
8.49
8.69
10.24
9.71
10.17
9.51
9.25
8.59
9.59
8.93
9.14
8.69
9.06
8.60
8.71
8.34
8.69
8.09
8.10
7.81
8.72
7.81
SECONDARY MARKETS
Yield (percent per year)
9 FHA mortgages (HUD series)5
10 GNMA securities6
Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION
Mortgage holdings (end of period)
11 Total
12 FHA/VA-insured
13 Conventional
104,974
19,640
85,335
113,329
21,028
92,302
122,837
21,702
101,135
123,770
21,511
102,259
124,230
21,529
102,701
124,954
21,636
103,318
125,884
21,576
104,308
126,624
21,547
105,077
128,983
21,796
107,187
131,058
21,981
109,077
Mortgage transactions (during period)
14 Purchases
22,518
23,959
37,202
3,183
3,069
3,032
3,408
3,299
5,114
4,809
Mortgage commitments (during period)1
15 Issued8
16 To sell9
n.a.
n.a.
23,689
5,270
40,010
7,608
2,975
1,374
3,453
1,051
3,1%
762
4,122
917
3,806
569
5,285
78
7,202
249
Mortgage holdings (end of period)9
17 Total
18 FHA/VA-insured
19 Conventional
20,105
590
19,516
20,419
547
19,871
n.a.
n.a.
n.a.
24,061
481
23,581
24,217
475
23,742
23,906
471
23,435
24,922
462
24,460
25,239
468
24,772
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
Mortgage transactions (during period)
20 Purchases
21 Sales
78,588
73,446
75,517
73,817
n.a.
92,870
8,649
8,057
9,191
8,803
9,155
9,305
8,644
7,449
10,170
9,545
n.a.
9,929
n.a.
10,597
Mortgage commitments (during period)10
22 Contracted
88,519
102,401
n.a.
8,890
12,430
7,468
6,358
11,594
n.a.
n.a.
FEDERAL HOME LOAN MORTGAGE CORPORATION
1. Weighted averages based on sample surveys of mortgages originated by
major institutional lender groups; compiled by the Federal Housing Finance
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 ten years; from Office of Thrift Supervision (OTS).
4. Average contract rates on new commitments for conventional first mortgages; from U.S. Department of Housing and Urban Development (HUD).
5. Average gross yields on thirty-year, minimum-downpayment, first mortgages insured by the Federal Housing Administration (FHA) 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 permissible contract rates.
6. Average net yields to investors on fully modified pass-through securities
backed by mortgages and guaranteed by the Government National Mortgage
Association (GNMA), assuming prepayment in twelve years on pools of thirtyyear mortgages insured by the Federal Housing Administration or guaranteed by
the Department of Veterans Affairs 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 one- to four-family loan commitments accepted in the Federal National
Mortgage Association's (FNMA's) free market auction system, and through the
FNMA-GNMA tandem plans.
8. Does not include standby commitments issued, but includes standby
commitments converted.
9. Includes participation as well as whole loans.
10. Includes conventional and government-underwritten loans. The Federal
Home Loan Mortgage Corporation's mortgage commitments and mortgage transactions include activity under mortgage securities swap programs, while the
corresponding data for FNMA exclude swap activity.
A36
1.54
DomesticNonfinancialStatistics • April 1992
MORTGAGE DEBT OUTSTANDING 1
Millions of dollars, end of period
1990
Type of holder and property
1 All holders
2
3
4
5
By type of property
One- to four-family residences
Multifamily residences
Commercial
Farm
By type of holder
6 Major financial institutions
7 Commercial banks
8
One- to four-family
9
Multifamily
10
Commercial
11
Farm
12 Savings institutions3
13
One- to four-family
14
Multifamily
15
Commercial
16
Farm
17 Life insurance companies
18
One- to four-family
19
Multifamily
Commercial
20
21
Farm
22
Finance companies4
1987
1988
1991
1989
Q3
Q4
Ql
Q2
Q3P
2,986,425
3,270,118
3,556,370
3,870,156r
3,912,197r
3,943,103r
3,995,164
4,026,139
1,962,958
278,899
657,036
87,532
2,201,231
291,405
692,236
85,247
2,429,689
303,416
739,240
84,025
2,724,873r
306,073r
754,926r
84,284
2,765,11 l r
307,049r
756,075r
83,%2 r
2,789,693r
309,633r
759,852r
83,925r
2,837,098
311,769
762,546
83,752
2,876,979
309,368
756,018
83,775
1,665,291
592,449
275,613
32,756
269,648
14,432
860,467
602,408
106,359
150,943
757
212,375
13,226
22,524
166,722
9,903
1,831,472
674,003
334,367
33,912
290,254
15,470
924,606
671,722
110,775
141,433
676
232,863
11,164
24,560
187,549
9,590
1,931,537
767,069
389,632
38,876
321,906
16,656
910,254
669,220
106,014
134,370
650
254,214
12,231
26,907
205,472
9,604
1,933,303
831,193
445,882
37,900
330,086
17,326
836,047
626,297
94,790
114,430
530
266,063
12,773
28,100
214,585
10,605
l,913,945r
844,456r
455,698r
37,008r
334,520r
17,231
801,628
600,154
91,806
109,168
500
267,861r
13,005r
28,979"
215,121
10,756
1,902,050"^
856,499r
463,547r
37,927r
337,518r
17,507r
776,551
583,694
88,743
103,647
468
269, OOC
11,737r
29,493r
216,768r
ll,001 r
1,898,114
871,222
476,133
37,864
339,186
18,039
755,219
570,044
86,448
98,280
447
271,674
11,743
30,006
219,204
10,721
1,868,554
870,684
478,628
36,669
337,063
18,323
722,754
549,406
82,361
90,583
404
275,117
11,947
30,527
221,750
10,893
29,716
37,846
45,476
49,784
48,777
48,187
48,972
50,800
23 Federal and related agencies
24 Government National Mortgage Association
25
One- to four-family
26
Multifamily
,
27 Farmers Home Administration
28
One- to four-family
29
Multifamily
30
Commercial
31
Farm
32 Federal Housing and Veterans Administration
33
One- to four-family
34
Multifamily
35 Federal National Mortgage Association
36
One- to four-family
37
Multifamily
38 Federal Land Banks
39
One- to four-family
40
Farm
41 Federal Home Loan Mortgage Corporation
42
One- to four-family
43
Multifamily
192,721
444
25
419
43,051
18,169
8,044
6,603
10,235
5,574
2,557
3,017
96,649
89,666
6,983
34,131
2,008
32,123
12,872
11,430
1,442
200,570
26
26
0
42,018
18,347
8,513
5,343
9,815
5,973
2,672
3,301
103,013
95,833
7,180
32,115
1,890
30,225
17,425
15,077
2,348
209,498
23
23
0
41,176
18,422
9,054
4,443
9,257
6,087
2,875
3,212
110,721
102,295
8,426
29,640
1,210
28,430
21,851
18,248
3,603
242,695
21
21
0
41,269
18,476
9,477
4,608
8,708
7,938
3,248
4,690
113,718
103,722
9,9%
29,441
1,766
27,675
20,508
17,810
2,697
250,761
20
20
0
41,439
18,527
9,640
4,690
8,582
8,801
3,593
5,208
116,628
106,081
10,547
29,416
1,838
27,577
21,857
19,185
2,672
264,189rr
22
22r
0
41,307
18,522
9,720
4,715
8,350
9,492
3,600
5,891
119,1%
108,348
10,848
29,253
1,884
27,368
23,221r
20,570r
2,651
276,798
22
22
0
41,430
18,521
9,898
4,750
8,261
10,210
3,729
6,480
122,806
111,560
11,246
29,152
2,041
27,111
23,649
21,120
2,529
283,395
22
22
0
41,506
18,542
10,037
4,803
8,124
11,395
3,948
7,446
125,451
113,6%
11,755
29,053
2,124
26,929
23,906
21,489
2,417
44 Mortgage pools or trusts 6
45 Government National Mortgage Association
46
One- to four-family
47
Multifamily
48 Federal Home Loan Mortgage Corporation
49
One- to four-family
50
Multifamily
51 Federal National Mortgage Association
52
One- to four-family
53
Multifamily
54 Farmers Home Administration
55
One- to four-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
811,847
340,527
331,257
9,270
226,406
219,988
6,418
178,250
172,331
5,919
104
26
0
38
40
946,766
368,367
358,142
10,225
272,870
266,060
6,810
228,232
219,577
8,655
80
21
0
26
33
1,062,729
394,859
384,474
10,385
301,797
293,721
8,077
281,806
273,335
8,471
70
18
0
24
29
l,110,555r
403,613
391,505
12,108
316,359
308,369
7,990
299,833
291,194
8,639
66
17
0
24
26
l,144,733r
409,929
397,631
12,298
318,215'
319,978
8,237r
312,101
303,554
8,547
62
14
0
23
24
1,184,4%
413,707
401,304
12,403
341,132
332,624
8,509
331,089
322,444
8,645
13
13
0
0
0
1,232,394
422,501
409,826
12,675
348,843
341,183
7,660
351,917
343,430
8,487
12
12
0
0
0
59 Individuals and others 7
60 One- to four-family
61 Multifamily
62 Commercial
63 Farm
410,116
246,061
80,977
63,057
20,021
426,229
259,971
79,209
67,618
19,431
468,569
294,517
81,634
73,023
19,395
445,534r
83,714r
82,769"
19,412
636,935r
449,440"
84,388r
83,816r
19,291r
632,131r
444,865r
83,567r
84,493r
19,207r
635,756
448,215
83,101
85,267
19,173
641,7%
453,147
83,382
86,164
19,102
1. Based on data from various institutional and governmental sources, with
figures for 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 loans held by
bank trust departments.
3. Includes savings banks and savings and loan associations. Beginning 1987:1,
data reported by institutions insured by the Federal Savings and Loan Insurance
Corporation 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 loans on one- to four-family residences.
5. Securities guaranteed by the Farmers Home Administration (FmHA) 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 FmHA.
6. Outstanding principal balances of mortgage-backed 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
1.55
A37
CONSUMER INSTALLMENT CREDIT Total Outstanding and Net Change 1
Millions of dollars, amounts outstanding, end of period
1991
Holder and type of credit
1988
1989
1990
July
Aug.
Sept.
Oct.
Nov.
Dec.
Seasonally adjusted
1 Total
664,049
718,863
735,102
729,962
729,108
729,152
730,317
730,147
728,425
2
3
4
5
284,214
174,104
25,348
180,383
290,676
199,082
22,471
206,633
284,585
220,110
20,919
209,487
273,565
228,199
19,615
208,582
271,906
229,453
19,495
208,253
270,219
232,070
18,892
207,971
270,013
233,661
18,943
207,700
268,123
234,666
19,059
208,300
267,434
234,459
19,109
207,424
Automobile
Revolving
Mobile home
Other
Not seasonally adjusted
674,855
730,901
748,300
727,754
731,531
732,183
730,722r
732,256
742,548
By major holder
Commercial banks
Finance companies
Credit unions
Retailers
Savings institutions
Gasoline companies
Pools of securitized assets
324,792
146,212
88,340
48,438
63,399
3,674
n.a.
342,770
140,832
93,114
44,154
57,253
•3,935
48,843
347,466
137,450
92,911
43,552
45,616
4,822
76,483
334,273
134,120
92,017
36,392
39,012
4,712
87,228
335,662
135,509
92,843
37,296
37,893
4,857
87,471
335,509
132,471
93,305
37,281
37,036
4,753
91,829
335,258
131,778
92,746
37,359
37,424
4,529
91,628
334,904
130,679
92,373
38,651
36,987
4,388
94,274
340,594
129,566
92,188
43,130
35,941
4,362
96,767
By major type of credit3
14 Automobile
15 Commercial banks
16 Finance companies
17 Pools of securitized assets
284,328
123,392
97,245
0
290,705
126,288
82,721
18,235
284,813
126,259
74,396
24,537
274,222
121,319
70,444
25,609
274,190
120,577
71,571
25,071
273,354
119,730
69,853
26,808
272,092
119,276
69,364
26,803
268,297
118,502
67,907
26,237
267,808
117,349
66,549
27,997
18 Revolving
19 Commercial banks
20 Retailers
21 Gasoline companies
22 Pools of securitized assets
184,045
123,020
43,833
3,674
n.a.
210,310
130,811
39,583
3,935
23,477
232,370
132,433
39,029
4,822
44,335
226,145
124,645
32,076
4,712
53,094
229,224
125,787
32,962
4,857
54,017
231,281
125,524
32,964
4,753
56,438
231,862
126,234
33,055
4,529
56,290
235,674
125,734
34,319
4,388
59,459
247,471
132,624
38,652
4,362
60,139
25,143
9,025
7,191
22,240
9,112
4,716
20,666
9,763
5,252
19,639
9,552
5,669
19,468
9,534
5,700
18,996
9,614
5,300
19,026
9,600
5,358
19,021
9,656
5,401
18,870
9,552
5,520
181,339
69,355
41,776
4,605
n.a.
207,646
76,559
53,395
4,571
7,131
210,451
79,011
57,801
4,523
7,611
207,748
78,757
58,007
4,316
8,525
208,649
79,764
58,238
4,334
8,383
208,553
80,641
57,318
4,317
8,583
207,742
80,148
57,056
4,304
8,535
208,633
81,012
57,371
4,332
8,578
208,399
81,069
57,497
4,478
8,631
6 Total
7
8
9
10
11
12
13
23 Mobile home
24 Commercial banks
25 Finance companies
26 Other
27 Commercial banks
28 Finance companies
29 Retailers
30 Pools of securitized assets 2
1. The Board's series on amounts of credit covers 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.
Data in this table also appear in the Board's G.19 (421) monthly statistical
release. For ordering address, see inside front cover.
2. Outstanding balances of pools upon which securities have been issued; these
balances are no longer carried on the balance sheets of the loan originator.
3. Totals include estimates for certain holders for which only consumer credit
totals are available.
A38
DomesticNonfinancialStatistics • April 1992
1.56
TERMS OF CONSUMER INSTALLMENT CREDIT 1
Percent per year, except as noted
1991
Item
1989
1990
1991
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
INTEREST RATES
Commercial banks32
48-month new car
24-month personal
120-month mobile home 3
Credit card
12.07
15.44
14.11
18.02
11.78
15.46
14.02
18.17
11.14
15.18
13.70
18.23
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
11.06
15.24
13.73
18.24
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
10.61
14.88
13.37
18.19
n.a.
n.a.
n.a.
n.a.
Auto finance companies
5 New car
6 Used car
12.62
16.18
12.54
15.99
12.41
15.60
12.77
15.74
12.55
15.66
12.40
15.63
12.38
15.60
12.23
15.46
10.79
15.06
10.41
14.90
54.2
46.6
54.6
46.1
55.1
47.2
55.5
47.3
55.5
47.4
55.4
47.2
55.4
47.2
55.4
47.0
54.1
47.0
53.7
46.9
91
97
87
95
88
96
88
97
88
%
88
97
87
96
88
97
88
%
88
93
12,001
7,954
12,071
8,289
12,494
8,884
12,343
8,916
12,572
8,989
12,518
8,902
12,460
8,996
12,684
9,077
13,245
9,029
13,476
9,105
1
2
3
4
OTHER TERMS 4
Maturity (months)
7 New car
8 Used car
Loan-to-value ratio
9 New car
10 Used car
Amount financed (dollars)
11 New car
12 Used car
1. Data in this table also appear in the Board's G.19 (421) monthly statistical
release. For ordering address, see inside front cover.
2. Data are available only for the second month of each quarter.
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
A39
F U N D S RAISED IN U.S. CREDIT MARKETS
Billions of dollars; quarterly data at seasonally adjusted annual rates
1991
1990
1989
Instrument or sector
Q4
Qi
Q2
Q3
Q4
Ql
Q2
Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial sectors ..
836.9
687.0
760.8
678.2
639.3
620.2
803.4
596.9
657.7
499.3
411.4
462.6
By lending sector and instrument
? U.S. government
Treasury securities
4 Agency issues and mortgages
215.0
214.7
.4
144.9
143.4
1.5
157.5
140.0
17.4
151.6
150.0
1.6
272.5
264.4
8.2
185.0
189.6
-4.6
247.3
217.8
29.6
228.2
222.9
5.4
286.1
287.5
-1.3
328.4
329.4
-1.0
204.7
228.7
-24.0
241.8
248.0
-6.2
5 Private
621.9
542.1
603.3
526.6
366.8
435.2
556.1
368.7
371.6
170.9
206.7
220.9
465.8
22.7
126.8
316.3
218.7
33.5
73.6
-9.5
156.1
58.0
66.9
-9.3
40.5
453.2
49.3
79.4
324.5
234.9
24.4
71.6
-6.4
88.9
33.5
10.0
2.3
43.2
459.2
49.8
102.9
306.5
231.0
16.7
60.8
-2.1
144.1
50.2
39.8
11.9
42.2
379.8
30.4
73.7
275.7
218.0
16.4
42.7
-1.5
146.8
39.1
39.9
20.4
47.4
298.2
20.1
49.7
228.3
212.6
6.5
9.3
.0
68.7
14.3
1.3
9.7
43.4
347.0
19.1
87.4
240.5
214.3
9.5
19.9
-3.2
88.2
44.1
7.7
-6.9
43.3
391.0
12.4
30.2
348.4
298.7
22.7
26.5
.5
165.1
30.4
16.3
69.6
48.8
309.3
24.5
68.8
216.0
220.0
-15.5
13.4
-1.9
59.4
2.8
15.4
-6.2
47.4
275.5
30.0
32.8
212.7
184.7
16.2
9.9
2.0
96.0
21.3
-2.5
17.3
60.0
216.8
13.5
67.1
136.3
147.1
2.7
-12.8
-.7
-45.9
2.5
-24.2
-41.7
17.5
230.5
11.3
80.6
138.6
136.8
4.6
-3.0
.2
-23.8
-23.6
14.2
5.1
-19.5
292.7
27.5
95.3
169.9
176.6
2.9
-8.0
-1.6
-71.9
-20.4
-51.6
-22.6
22.6
36.2
293.0
292.7
-16.3
99.2
209.7
48.8
302.2
191.0
-10.6
77.9
123.7
45.6
314.9
242.8
-7.5
65.7
184.6
29.6
285.0
211.9
1.6
50.8
159.5
17.2
254.0
95.6
2.6
13.7
79.4
16.5
291.8
126.9
8.9
35.0
83.1
16.0
377.2
162.9
6.2
45.5
111.2
17.2
257.5
94.0
-10.8
3.5
101.3
28.1
227.3
116.2
11.7
19.6
84.8
7.6
154.0
9.4
3.1
-14.0
20.2
12.2
162.6
32.0
4.7
-18.7
46.0
16.8
199.7
4.3
-1.6
-3.6
9.5
25 Foreign net borrowing in United States
76
77 Bank loans n.e.c
28 Open market paper
29 U.S. government loans
9.7
3.1
-1.0
11.5
-3.9
4.5
7.4
-3.6
2.1
-1.4
6.3
6.9
-1.8
8.7
-7.5
10.9
5.3
-.1
13.3
-7.5
23.5
21.6
-2.9
12.3
-7.5
16.9
-1.0
-4.3
22.2
.1
2.0
32.7
-6.9
-16.4
-7.3
41.2
25.8
-1.8
23.1
-5.9
29.7
1.2
1.9
27.3
-.8
21.1
26.5
-4.7
15.3
-16.0
50.6
8.9
10.3
45.5
-14.1
-53.0
22.0
-7.1
-52.0
-15.8
30 Total domestic plus foreign
846.6
691.5
767.1
689.1
662.8
637.1
805.5
638.1
687.3
520.4
462.0
409.7
7
8
9
10
11
1?
n
14
n
16
17
18
19
70
7.1
77
23
24
By instrument
Debt capital instruments
Tax-exempt obligations
Corporate bonds
Mortgages
Home mortgages
Multifamily residential
Commercial
Farm
Other debt instruments
Consumer credit
Bank loans n.e.c
Open market paper
Other
By borrowing sector
State and local government
Household
Nonfinancial business
Nonfarm noncorporate
Corporate
Financial sectors
31 Total net borrowing by financial sectors
285.1
300.2
247.6
205.5
202.1
187.3
190.2
170.4
180.0
267.7
102.6
95.4
By instrument
U.S. government-related
Sponsored-credit-agency securities
Mortgage pool securities
Loans from U.S. government
154.1
15.2
139.2
-.4
171.8
30.2
142.3
-.8
119.8
44.9
74.9
.0
151.0
25.2
125.8
.0
167.4
17.1
150.3
-.1
156.4
-4.7
161.1
.0
171.7
9.7
162.0
.0
184.0
17.1
166.8
.0
139.2
22.3
116.9
.0
174.6
19.5
155.5
-.5
155.8
14.5
141.3
.0
150.6
-22.4
173.0
.0
36 Private
37 Corporate bonds
38 Mortgages
39 Bank loans n.e.c
40 Open market paper
41 Loans from Federal Home Loan Banks
131.0
82.9
.1
4.0
24.2
19.8
128.4
78.9
.4
-3.2
27.9
24.4
127.8
51.7
.3
1.4
54.8
19.7
54.5
36.8
.0
1.8
26.9
-11.0
34.7
49.8
.3
.7
8.6
-24.7
30.9
39.6
-.4
4.2
36.3
-48.8
18.5
33.5
.1
-2.3
9.2
-22.0
-13.5
71.2
.2
-.6
-53.4
-30.9
40.8
18.0
.3
2.0
51.0
-30.5
93.1
76.7
.5
3.8
27.6
-15.5
-53.2
39.5
.1
1.0
-65.9
-27.9
-55.2
63.2
-.1
-5.8
-59.7
-52.9
By borrowing sector
4? Sponsored credit agencies
43 Mortgage pools
44 Private
45 Commercial banks
46 Bank affiliates
47 Savings and loan associations
48 Mutual savings banks
49 Finance companies
50 Real estate investment trusts (REITs)
51 Securitized credit obligation (SCO) issuers
14.9
139.2
131.0
-3.6
15.2
20.9
4.2
54.7
.8
39.0
29.5
142.3
128.4
6.2
14.3
19.6
8.1
40.8
.3
39.1
44.9
74.9
127.8
-3.0
5.2
19.9
1.9
67.7
3.5
32.5
25.2
125.8
54.5
-1.4
6.2
-14.1
-1.4
46.3
-1.9
20.8
17.0
150.3
34.7
-1.1
-27.7
-31.2
-.5
57.1
-1.9
40.1
-4.7
161.1
30.9
-.7
-3.9
-56.2
.7
52.6
.1
38.2
9.7
162.0
18.5
-5.7
-8.0
-15.8
-8.3
28.2
-3.8
32.1
17.1
166.8
-13.5
-13.9
-32.1
-53.5
6.5
27.0
-2.7
55.1
22.3
116.9
40.8
-5.6
-40.4
-31.9
-4.2
97.3
-1.8
27.5
19.0
155.5
93.1
20.9
-30.2
-23.4
4.0
75.7
.6
45.6
14.5
141.3
-53.2
-22.0
-18.5
-29.5
-2.2
-9.2
-.7
28.9
-22.4
173.0
-55.2
-16.6
-7.1
-55.6
-1.4
-11.7
-.2
37.3
3?
33
34
35
A40
DomesticNonfinancialStatistics • April 1992
1.57—Continued
1989
Transaction category or sector
1986
1987
1988
1989
1990
1991
1990
Q4
Ql
Q2
Q3
Q4
Ql
Q2
All sectors
52 Total net borrowing, all sectors
53
54
55
56
57
58
59
60
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
61 MEMO: U.S. government, cash balance
Totals net of changes in U.S. government cash balances
62 Net borrowing by domestic nonfinancial sectors
63 Net borrowing by U.S. government
1,131.7
991.7
1014.7
894.5
864.9
824.4
995.7
808.5
867.3
788.1
564.7
505.1
369.5
22.7
212.8
316.4
58.0
69.9
26.4
56.1
317.5
49.3
165.7
324.9
33.5
3.2
32.3
65.5
277.2
49.8
161.5
306.7
50.2
39.4
75.4
54.4
302.6
30.4
115.8
275.7
39.1
41.5
60.6
28.9
440.0
20.1
121.1
228.6
14.3
-.9
30.7
11.1
341.4
19.1
125.9
240.1
44.1
7.5
51.6
-5.4
419.0
12.4
96.4
348.5
30.4
7.1
62.3
19.5
412.2
24.5
165.8
216.2
2.8
13.0
-36.6
10.6
425.4
30.0
52.0
213.0
21.3
1.4
95.7
28.6
503.4
13.5
170.3
136.7
2.5
-25.1
1.2
-14.5
360.5
11.3
129.0
138.7
-23.6
25.6
-15.2
-61.6
392.4
27.5
180.5
169.8
-20.4
-64.5
-134.3
-46.0
.0
-7.9
10.4
-5.9
8.3
-7.3
22.9
-38.1
21.1
27.4
51.6
-64.3
836.9
215.0
694.9
152.8
750.4
147.1
684.1
157.5
631.0
264.2
627.6
192.4
780.5
224.4
635.0
266.3
636.6
265.1
471.9
301.0
359.8
153.1
526.9
306.1
External corporate equity funds raised in United States
64 Total net share issues
65 Mutual funds
66 All other
67 Nonfinancial corporations
68 Financial corporations
69 Foreign shares purchased in United States
86.8
10.9
-124.2
-63.7
9.6
14.9
-9.2
48.0
-24.1
23.6
108.0
173.9
159.0
-72.2
-85.0
11.6
1.2
73.9
-63.0
-75.5
14.6
-2.1
1.1
-125.3
-129.5
3.3
.9
41.3
-105.1
-124.2
2.4
16.7
61.4
-51.7
-63.0
4.3
6.9
72.4
-57.6
-79.3
4.5
17.2
47.8
-57.0
-69.0
10.3
1.7
71.0
-22.9
-48.0
1.3
23.8
46.1
-70.2
-74.0
4.8
-1.0
80.6
-56.9
-61.0
.9
3.2
87.8
20.2
-12.0
3.4
28.8
122.2
51.7
11.0
4.3
36.4
Flow of Funds
1.58
A41
DIRECT A N D INDIRECT SOURCES OF F U N D S TO CREDIT MARKETS
Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates
1989r
Transaction category or sector
r
1986
1989r
r
r
1988
1987
1991r
1990"
1990"
Q4
Ql
Q2
Q3
Q4
Ql
Q2
1 Total hinds advanced in credit markets to domestic
nonfinancial sectors
861.6
722.8
767.2
714.7
630.0
696.4
780.6
669.3
588.3
482.0
427.1
515.7
2 Total net advances by federal agencies and foreign
sectors
280.6
248.0
208.1
188.1
261.7
188.5
218.5
290.1
347.4
190.8
302.9
211.3
3
4
5
6
By instrument
U.S. government securities
Residential mortgages
Federal Home Loan Bank advances to thrifts
Other loans and securities
69.4
136.3
19.8
55.1
70.1
139.1
24.4
14.3
85.2
86.3
19.7
16.8
30.2
137.9
-11.0
31.0
74.4
184.1
-24.7
27.8
25.5
173.2
-50.3
40.2
9.2
194.5
-28.9
43.6
100.9
185.2
-26.9
31.0
142.0
176.3
-27.3
56.4
45.6
180.5
-15.7
-19.6
140.1
176.0
-35.7
22.5
50.9
186.7
-48.5
22.3
7
8
9
10
By lender
U.S. government
Sponsored credit agencies and mortgage pools
Monetary authority
Foreign
9.7
153.3
19.4
98.2
-7.9
169.3
24.7
61.8
-9.4
112.0
10.5
95.0
-2.6
125.3
-7.3
72.7
33.6
166.7
8.1
53.2
3.9
149.3
-4.5
39.9
38.3
179.1
-.3
1.4
36.1
163.6
30.8
59.6
63.6
182.4
26.2
75.1
-3.7
141.9
-24.2
76.8
48.1
164.0
60.2
30.6
26.5
123.9
1.8
59.1
154.1
9.7
171.8
6.2
119.8
6.4
151.0
10.6
167.4
23.5
167.0
15.6
164.8
12.5
172.8
36.3
146.2
26.2
185.6
19.0
149.6
62.0
118.0
-59.2
13 Total private domestic funds advanced
744.8
652.8
685.3
688.2
559.2
690.4
739.4
588.2
413.4
495.8
335.8
363.1
14
15
16
17
18
19
301.0
45.7
89.8
115.9
212.3
19.8
246.3
83.5
67.5
120.2
159.8
24.4
189.7
53.7
94.4
161.3
205.9
19.7
267.2
65.0
65.5
96.5
183.1
-11.0
340.0
45.5
63.2
26.3
59.5
-24.7
305.5
78.3
74.5
67.2
114.7
-50.3
389.9
70.7
55.0
72.3
122.6
-28.9
311.5
56.2
75.7
25.7
92.1
-26.9
246.6
36.5
27.2
23.4
52.3
-27.3
411.9
18.3
94.8
-16.1
-28.9
-15.7
208.7
336.2
25.3
38.4
63.5
82.5
-27.1
-16.3
29.7 -126.2
-35.7 -48.5
743.5
497.3
538.5
534.0
380.0
574.6
422.8
282.4
294.9
520.1
284.9
194.8
107.6
174.0
267.1
135.3
136.8
149.1
76.2
157.0
118.0
176.4
87.1
181.7
121.2
177.0
-90.9 -153.4 -194.0
218.1
197.9
183.2
368.8
229.1
249.9
174.3
-70.0
169.2
149.2
By source of funds
25 Private domestic deposits and repurchase agreements . . .
26 Credit market borrowing
27 Other sources
28 Foreign funds
29 Treasury balances
30 Insurance and pension reserves
31 Other, net
262.4
124.0
357.1
12.9
1.7
171.3
171.1
173.8
92.4
231.1
43.7
-5.8
94.9
98.4
229.6
93.7
215.3
9.3
7.3
174.1
24.5
209.5
40.0
284.5
-9.9
-3.4
192.0
105.8
53.3
-6.8
333.5
24.0
5.3
164.1
140.0
178.6
10.0
386.1
-.8
6.4
159.9
220.5
196.3
-27.4
253.9
13.5
5.2
96.8
138.3
-5.7
19.5
268.6
23.5
-1.0
209.1
36.9
Private domestic nonfinancial investors
32 Direct lending in credit markets
33 U.S. government securities
34 State and local obligations
35 Corporate and foreign bonds
36 Open market paper
37 Other loans and mortgages
125.3
20.3
1.6
44.8
9.5
49.1
247.8
100.5
96.1
6.4
13.3
31.5
240.5
134.5
57.3
-32.2
41.9
39.0
194.2
125.5
62.7
-26.5
2.9
29.6
172.4
123.4
24.9
-31.2
18.8
36.6
125.8
47.6
76.9
-29.6
-35.5
66.3
289.2
189.0
65.3
-22.5
19.0
38.5
325.4
59.0
175.4
134.6
40.0
7.6
21.3 -125.5
53.0
12.8
29.4
35.7
16.0
-5.5
-13.5
1.7
-9.5
42.8
-19.2
17.7
15.2
-9.2
-55.2
12.2
126.2
157.1
22.7
18.8
-83.7
11.3
38 Deposits and currency
39 Currency
40 Checkable deposits
41
Small time and savings accounts
42 Money market fund shares
43 Large time deposits
44 Security repurchase agreements
45 Deposits in foreign countries
282.8
14.4
98.2
120.6
43.2
-19.7
20.2
5.9
190.3
19.0
-.3
76.0
28.9
47.6
21.6
-2.5
233.1
14.7
12.5
122.4
21.2
40.6
32.9
-11.2
225.7
11.7
.6
98.2
86.7
9.1
14.9
4.4
83.0
22.6
.4
59.4
56.0
-42.1
-20.5
7.0
211.2
16.1
34.1
117.0
52.8
-13.9
-11.4
16.5
212.7
20.0
31.1
109.3
108.6
-15.7
-37.1
-3.6
24.7
22.6
-4.6
28.9
-32.7
-15.5
18.2
7.8
74.2
30.9
-1.8
38.5
106.0
-70.7
-26.5
-2.2
20.3
16.9
-23.0
61.0
42.1
-66.4
-36.6
26.2
231.2
38.7
63.2
98.0
171.0
-61.2
-56.4
-22.1
-92.8
6.0
4.2
14.7
-63.5
-74.3
2.7
17.5
46 Total of credit market instruments, deposits, and
currency
408.1
438.2
473.6
419.9
255.4
336.9
501.9
350.1
133.2
36.3
212.0
33.4
32.2
99.8
111.1
34.0
76.2
105.5
26.9
78.6
104.3
25.9
77.6
62.8
40.0
68.0
77.2
26.5
83.2
39.1
27.5
57.2
14.9
41.1
48.0
83.1
56.5
71.3
162.6
38.1
104.9
48.3
61.9
84.9
39.8
46.3
58.9
-40.1
88.5
160.9
-72.4
61.1
27.4
7.1
70.2
-63.1
22.2
-15.1
-119.3 -65.4
6.1
38.5
-125.4 -103.9
4.1
18.9
-123.3 -84.3
15.8
65.7
-50.0
32.0
-16.2
16.7
73.4
-56.7
63.7
-47.0
-.8
56.3
-57.1
37.7
-38.5
56.4
77.1
-20.7
62.9
-6.6
-19.1
45.9
-65.0
-27.9
8.8
26.6
83.7
-57.0
55.4
-28.8
116.5
97.6
18.9
61.0
55.6
179.5
125.2
54.3
56.3
123.2
Agency and foreign borrowing not included in line I
11 Sponsored credit agencies and mortgage pools
12 Foreign
U.S. government securities
State and local obligations
Corporate and foreign bonds
Residential mortgages
Other mortgages and loans
LESS: Federal Home Loan Bank advances
20 Total credit market funds advanced by private financial
institutions
21
22
23
24
By lending institution
Commercial banks
Savings institutions
Insurance and pension funds
Other financial institutions
MEMO
47 Public holdings as percent of total
48 Private financial intermediation (percent)
49 Total foreign funds
Corporate equities not included above
50 Total net issues
51 Mutual fund shares
52 Other equities
53 Acquisitions by financial institutions
54 Other net purchases
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 lines 11 and 12. Also line 20 less line 26 plus line 32.
Also sum of lines 28 and 47 less lines 40 and 46.
18. Includes farm and commercial mortgages.
25. Line 38 less lines 39 and 45.
26. Excludes equity issues and investment company shares. Includes line 19.
28. Foreign deposits at commercial banks, plus bank borrowings from foreign
branches, plus liabilities of foreign banking agencies to foreign affiliates, less
claims on foreign affiliates and deposits by banking institutions in foreign banks.
FRASER
29. Demand deposits and note balances at commercial banks.
Digitized for
213.7
111.4
140.9
107.6
61.8
19.8
-211.9 -160.8 -171.0 -173.8 -150.0
241.6
135.6
208.0
210.3
186.2
111.7
212.4
139.4
443.1
133.6
45.5
-59.4
308.8
87.5
13.7
128.3
79.4
214.6 -116.3
-22.8
40.2 -70.1 -23.2
140.4
502.6
353.1
9.2 -99.3
-28.5
20.6 -22.3
3.4
267.0
222.1
191.8
305.6 -156.5
282.8
30. Excludes investment of these reserves in corporate equities.
31. Mainly retained earnings and net miscellaneous liabilities.
32. Line 13 less line 20 plus line 26.
33-37. Lines 14-18 less amounts acquired by private finance plus amounts
borrowed by private finance. Line 37 includes mortgages.
39. Mainly an offset to line 9.
46. Sum of lines 32 and 38, or line 13 less line 27 plus lines 39 and 45.
47. Line 2 divided by line 1.
48. Line 20 divided by line 13.
49. Sum of lines 10 and 28.
50. 52. 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.
A42
1.59
DomesticNonfinancialStatistics • April 1992
SUMMARY OF CREDIT MARKET DEBT OUTSTANDING
Billions of dollars, end of period
1989
Transaction category or sector
1987
1988
1990
1991
1989
Q4
Q2
Ql
Q3
Q4
Ql
Q2
Nonfinancial sectors
1 Total credit market debt owed by
domestic nonfinancial sectors
7,646.3
8,343.9
9,096.0
9,805.2
9,805.2
10,073.3
10,226.8
10,386.9
10,557.3
10,615.5
10,735.3
By lending sector and instrument
2 U.S. government
3 Treasury securities
4 Agency issues and mortgages
1,815.4
1,811.7
3.6
1,960.3
1,955.2
5.2
2,117.8
2,095.2
22.6
2,269.4
2,245.2
24.2
2,269.4
2,245.2
24.2
2,360.9
2,329.3
31.6
2,401.7
2,368.8
32.9
2,470.2
2,437.6
32.6
2,568.9
2,536.5
32.4
2,624.7
2,598.4
26.4
2,667.7
2,642.9
24.8
5 Private
5,831.0
6,383.6
6,978.2
7,535.8
7,535.8
7,712.5
7,825.1
7,916.7
7,988.4
7,990.8
8,067.7
6
7
8
9
10
11
12
13
14
15
16
17
18
By instrument
Debt capital instruments
Tax-exempt obligations
Corporate bonds
Mortgages
Home mortgages
Multifamily residential
Commercial
Farm
Other debt instruments
Consumer credit
Bank loans n.e.c
Open market paper
Other
3,962.7
679.1
669.4
2,614.2
1,720.8
246.2
551.4
95.8
1,868.2
659.8
666.0
62.9
479.6
4,427.9
728.4
748.8
2,950.7
1,943.1
270.0
648.7
88.9
1,955.7
693.2
673.3
73.8
515.3
4,886.4
790.8
851.7
3,243.8
2,173.9
286.7
696.4
86.8
2,091.9
743.5
713.1
85.7
549.6
5,283.3
821.2
925.4
3,536.6
2,404.3
304.4
742.6
85.3
2,252.6
790.6
763.0
107.1
591.9
5,283.3
821.2
925.4
3,536.6
2,404.3
304.4
742.6
85.3
2,252.6
790.6
763.0
107.1
591.9
5,451.9
822.2
933.0
3,696.7
2,558.3
304.5
750.0
83.9
2,260.6
782.3
748.5
126.0
603.7
5,533.8
827.2
950.2
3,756.4
2,619.5
300.5
752.5
84.0
2,291.3
789.4
756.1
128.7
617.1
5,608.8
837.9
958.4
3,812.6
2,670.0
304.5
753.8
84.3
2,307.9
798.7
753.6
131.8
623.8
5,669.9
841.3
975.1
3,853.4
2,710.0
306.0
753.5
84.0
2,318.5
808.9
757.4
116.9
635.4
5,709.8
842.2
995.3
3,872.3
2,730.1
306.5
752.0
83.6
2,281.0
782.3
749.0
119.9
629.9
5,787.5
847.6
1,019.1
3,920.9
2,781.0
307.1
748.9
83.9
2,280.1
784.2
740.3
118.4
637.3
19
20
21
22
23
24
By borrowing sector
State and local government
Household
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate
510.1
2,596.1
2,724.8
156.6
997.6
1,570.6
558.9
2,879.1
2,945.6
145.5
1,075.4
1,724.6
604.5
3,191.5
3,182.2
137.6
1,145.1
1,899.5
634.1
3,501.8
3,400.0
139.2
1,195.9
2,064.8
634.1
3,501.8
3,400.0
139.2
1,195.9
2,064.8
633.8
3,654.8
3,423.9
137.3
1,208.3
2,078.3
636.9
3,726.5
3,461.7
138.7
1,208.7
2,114.3
647.1
3,790.3
3,479.4
141.6
1,209.0
2,128.7
649.1
3,847.2
3,492.2
140.5
1,209.6
2,142.1
650.2
3,853.3
3,487.3
139.3
1,205.9
2,142.1
652.8
3,911.3
3,503.6
143.0
1,204.6
2,155.9
238.3
244.6
253.9
261.5
261.5
261.7
273.0
279.4
284.9
297.2
285.1
74.9
26.9
37.4
99.1
82.3
23.3
41.2
97.7
89.2
21.5
49.9
93.2
94.5
21.4
63.0
82.6
94.5
21.4
63.0
82.6
103.3
18.9
59.3
80.2
108.4
19.3
65.1
80.2
108.9
19.8
71.5
79.3
116.1
18.5
75.3
75.0
118.9
20.4
87.0
70.9
123.0
19.5
74.0
68.6
7,884.7
8,588.5
9,349.9
10,066.8
10,066.8
10,335.0
10,499.8
10,666.3
10,842.2
10,912.8
11,020.5
25 Foreign credit market debt held in
United States
26
27
28
29
Bonds
Bank loans n.e.c
Open market paper
U.S. government loans
30 Total credit market debt owed by nonfinancial
sectors, domestic and foreign
Financial sectors
31 Total credit market debt owed by
financial sectors
32
33
34
35
36
37
38
39
40
41
By instrument
U.S. government-related
Sponsored credit-agency securities
Mortgage pool securities
Loans from U.S. government
Private
Corporate bonds
Mortgages
Bank loans n.e.c
Open market paper
Loans from Federal Home Loan Banks
By borrowing sector
42 Sponsored credit agencies
43 Mortgage pools
44 Private financial sectors
45 Commercial banks
46 Bank affiliates
47 Savings and loan associations
48 Mutual savings banks
49 Finance companies
50 Real estate investment trusts (REITs)
51 Securitized credit obligation (SCO) issuers...
1,529.8
1,836.8
2,084.4
2,322.4
2,322.4
2,359.0
2,405.5
2,448.8
2,527.7
2,540.1
2,567.3
810.3
273.0
531.6
5.7
719.5
287.4
2.7
36.1
284.6
108.6
978.6
303.2
670.4
5.0
858.2
366.3
3.1
32.8
322.9
133.1
1,098.4
348.1
745.3
5.0
986.1
418.0
3.4
34.2
377.7
152.8
1,249.3
373.3
871.0
5.0
1,073.0
482.7
3.4
36.0
409.1
141.8
1,249.3
373.3
871.0
5.0
1,073.0
482.7
3.4
36.0
409.1
141.8
1,288.2
378.1
905.2
5.0
1,070.8
491.7
4.0
33.2
409.1
132.9
1,330.1
381.0
944.2
5.0
1,075.4
510.0
4.0
34.8
400.3
126.3
1,367.9
384.4
978.5
5.0
1,080.9
514.4
4.1
34.9
409.6
117.9
1,418.4
393.7
1,019.9
4.9
1,109.3
533.6
4.2
36.7
417.7
117.1
1,452.2
397.0
1,050.4
4.9
1,087.9
543.0
4.2
34.8
398.8
107.0
1,485.1
389.6
1,090.7
4.9
1,082.2
559.5
4.2
35.2
388.6
94.7
278.7
531.6
719.5
75.6
116.8
119.8
8.6
328.1
6.5
64.0
308.2
670.4
858.2
81.8
131.1
139.4
16.7
378.8
7.3
103.1
353.1
745.3
986.1
78.8
136.2
159.3
18.6
446.1
11.4
135.7
378.3
871.0
1,073.0
77.4
142.5
145.2
17.2
496.2
10.1
184.4
378.3
871.0
1,073.0
77.4
142.5
145.2
17.2
496.2
10.1
184.4
383.0
905.2
1,070.8
73.2
142.0
137.1
15.4
499.2
10.9
193.1
385.9
944.2
1,075.4
71.6
134.3
125.6
16.7
509.7
10.4
206.9
389.4
978.5
1,080.9
70.7
122.9
116.2
16.2
530.9
10.2
213.8
398.5
1,019.9
1,109.3
76.3
114.8
114.0
16.7
551.8
10.6
225.2
401.8
1,050.4
1,087.9
68.1
111.7
102.8
16.4
545.9
10.6
232.4
394.4
1,090.7
1,082.2
65.9
110.3
90.8
15.8
547.0
10.8
241.7
All sectors
52 Total credit market debt, domestic and foreign..
9,414.4
10,425.3
11,434.3
12,389.1
12,389.1
12,694.0
12,905.3
13,115.1
13,369.9
13,452.9
13,587.7
53
54
55
56
57
58
59
60
2,620.0
679.1
1,031.7
2,617.0
659.8
729.0
384.9
693.1
2,933.9
728.4
1,197.4
2,953.8
693.2
729.5
437.9
751.1
3,211.1
790.8
1,358.9
3,247.2
743.5
768.9
513.4
800.5
3,513.7
821.2
1,502.6
3,540.1
790.6
820.3
579.2
821.4
3,513.7
821.2
1,502.6
3,540.1
790.6
820.3
579.2
821.4
3,644.1
822.2
1,527.9
3,700.7
782.3
800.7
594.4
821.7
3,726.9
827.2
1,568.6
3,760.5
789.4
810.2
594.0
828.5
3,833.1
837.9
1,581.6
3,816.7
798.7
808.3
612.9
826.0
3,982.5
841.3
1,624.8
3,857.7
808.9
812.6
609.9
832.3
4,072.1
842.2
1,657.3
3,876.5
782.3
804.1
605.7
812.7
4,147.9
847.6
1,701.6
3,925.1
784.2
794.9
581.1
805.5
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
A43
SUMMARY OF CREDIT MARKET CLAIMS, BY HOLDER
Billions of dollars, except as noted, end of period
1990r
1989r
Transaction category or sector
1986r
1987r
1988r
1991r
1989r
Q4
Ql
Q2
Q3
Q4
Ql
Q2
1 Total funds advanced in credit markets to domestic
nonfinancial sectors
7,749.8
8,483.8
9,242.3
2 Total held by federal agencies and foreign sector
1,810.5
2,037.7
2,223.2
2,413.1
2,413.1
2,450.6
2,529.9
2,611.3
2,673.1
2,733.8
2,793.8
3
4
5
6
By instrument
U.S. government securities
Residential mortgages
Federal Home Loan Bank advances to thrifts
Other loans and securities
509.8
678.5
108.6
513.5
570.9
814.1
133.1
519.7
651.5
900.4
152.8
518.5
688.9
1,038.4
141.8
544.1
688.9
1,038.4
141.8
544.1
682.7
1,081.5
132.9
553.6
714.1
1,126.5
126.3
563.1
745.6
1,171.8
117.9
576.0
763.0
1,221.0
117.1
572.0
789.3
1,261.4
107.0
576.1
808.5
1,306.8
94.7
583.9
7
8
9
10
By type of lender
U.S. government
Sponsored credit agencies and mortgage pools
Monetary authority
Foreign
255.2
835.9
205.5
513.9
239.9
1,001.0
230.1
566.7
214.6
1,113.0
240.6
655.0
207.0
1,238.2
233.3
734.6
207.0
1,238.2
233.3
734.6
217.1
1,274.8
224.4
734.2
227.4
1,315.0
237.8
749.8
242.7
1,360.5
240.8
767.5
240.6
1,403.4
241.4
787.7
253.2
1,438.8
247.3
794.5
261.1
1,468.7
253.7
810.4
Agency and foreign debt not in line I
11 Sponsored credit agencies and mortgage pools
12 Foreign
810.3
245.1
978.6
254.3
1,098.4
255.7
1,249.3
265.4
1,249.3
265.4
1,288.2
265.7
1,330.1
277.0
1,367.9
283.4
1,418.4
297.9
1,452.1
310.2
1,480.3
297.7
13 Total private domestic holdings
6,994.8
7,678.9
8,373.2
9,130.6
9,130.6
9,430.6
9,564.0
9,678.4
9,844.8
9,898.6
9,973.3
14
15
16
17
18
19
2,100.6
789.6
583.0
1,288.5
2,341.6
108.6
2,352.5
873.1
653.4
1,399.0
2,534.0
133.1
2,546.8
939.4
744.8
1,560.2
2,734.7
152.8
2,806.8
1,046.2
809.8
1,670.4
2,939.2
141.8
2,806.8
1,046.2
809.8
1,670.4
2,939.2
141.8
2,910.5
1,060.6
824.3
1,834.9
2,933.0
132.9
2,958.5
1,073.2
842.7
1,849.7
2,966.2
126.3
3,027.7
1,084.8
850.5
1,857.8
2,975.3
117.9
3,148.6
1,091.7
882.0
1,849.2
2,990.4
117.1
3,206.8
1,094.6
898.7
1,836.6
2,968.9
107.0
3,259.0
1,102.7
918.2
1,840.7
2,947.4
94.7
5,995.9
6,515.1
7,055.3
7,602.9
7,602.9
7,862.0
7,931.6
7,988.8
8,131.4
8,191.0
8,252.4
2,183.9
1,297.9
1,506.7
1,007.4
2,319.2
1,445.5
1,659.6
1,090.8
2,476.2
1,565.2
1,836.1
1,177.9
2,643.9
1,478.2
2,034.0
1,446.7
2,643.9
1,478.2
2,034.0
1,446.7
2,667.2
1,476.1
2,103.7
1,615.0
2,709.5
1,424.2
2,153.3
1,644.5
2,739.0
1,385.9
2,173.8
1,690.2
2,765.1
1,345.0
2,217.5
1,803.7
2,772.9
1,302.7
2,274.0
1,841.4
2,784.9
1,264.3
2,326.7
1,876.5
By source of funds
25 Private domestic deposits and repurchase
agreements
76 Credit market debt
77 Other sources
28 Foreign funds
29 U.S. Treasury balances
30 Insurance and pension reserves
31 Other, net
3,166.2
703.1
2,126.6
18.6
27.5
1,462.2
618.4
3,336.2
807.3
2,371.7
62.3
21.6
1,568.0
719.8
3,581.3
901.4
2,572.6
71.6
29.0
1,723.2
748.9
3,790.4
970.0
2,842.5
62.1
25.6
1,908.2
846.6
3,790.4
970.0
2,842.5
62.1
25.6
1,908.2
846.6
3,816.0
1,089.3
2,956.7
62.1
16.7
1,951.4
926.4
3,806.5
1,095.1
3,030.0
63.5
32.1
1,983.0
951.3
3,812.1
1,078.5
3,098.2
86.6
36.6
2,018.6
956.3
3,843.8
1,093.5
3,194.2
86.1
30.9
2,067.7
1,009.4
3,873.3
1,072.9
3,244.8
84.7
26.3
2,120.7
1,013.0
3,836.5
1,067.7
3,348.2
55.3
36.0
2,171.8
1,085.1
Private domestic nonfinancial investors
37 Credit market claims
33 U.S. government securities
34 State and local obligations
35 Corporate and foreign bonds
36 Open market paper
37 Other loans and mortgages
1,702.0
807.4
320.3
69.3
183.5
321.6
1,971.1
909.7
416.4
91.2
198.0
355.8
2,219.3
1,050.7
486.7
52.4
243.0
386.5
2,497.8
1,169.0
591.2
64.7
245.9
427.0
2,497.8
1,169.0
591.2
64.7
245.9
427.0
2,657.9
1,196.8
597.8
204.6
247.6
411.2
2,727.5
1,214.5
610.8
217.8
264.5
420.0
2,768.1
1,256.8
615.7
200.1
266.4
429.1
2,806.9
1,278.3
616.1
203.7
264.7
444.2
2,780.5
1,278.2
610.1
203.5
248.0
440.7
2,788.7
1,289.7
618.8
206.6
230.4
443.1
38 Deposits and currency
39 Currency
40 Checkable deposits
41
Small time and savings accounts
47
Money market fund shares
43 Large time deposits
44 Security repurchase agreements
45
Deposits in foreign countries
3,377.3
186.3
522.2
1,948.3
268.9
298.2
128.5
24.8
3,565.9
205.4
521.5
2,017.1
297.8
349.7
150.1
24.3
3,814.5
220.1
532.9
2,156.2
318.9
390.3
182.9
13.1
4,039.7
231.8
532.9
2,254.7
405.6
399.3
197.9
17.6
4,039.7
231.8
532.9
2,254.7
405.6
399.3
197.9
17.6
4,062.4
234.4
508.1
2,286.6
438.1
394.9
188.4
11.9
4,066.6
242.7
514.2
2,287.6
425.9
386.1
192.7
17.5
4,076.1
247.2
503.5
2,296.8
452.1
373.1
186.6
16.8
4,122.7
254.4
533.3
2,314.2
461.6
357.3
177.4
24.6
4,149.5
262.0
515.6
2,343.4
509.6
341.8
162.9
14.3
4,124.8
265.9
524.2
2,340.8
489.6
318.2
163.6
22.5
46 Total of credit market instruments, deposits, and
currency
5,079.3
5,537.0
6,033.8
6,537.5
6,537.5
6,720.3
6,794.2
6,844.2
6,929.6
6,930.0
6,913.5
22.6
104.0
532.4
23.3
98.6
628.9
23.4
97.2
726.6
23.4
94.2
796.7
23.4
94.2
796.7
23.1
91.6
796.4
23.5
91.6
813.3
23.9
90.5
854.1
24.1
87.8
873.7
24.5
86.5
879.3
24.8
85.5
865.7
3,360.6
413.5
2,947.1
942.0
2,418.6
3,325.0
460.1
2,864.9
979.4
2,345.7
3,619.8
478.3
3,141.6
1,113.6
2,506.2
4,374.8
555.1
3,819.7
1,416.9
2,958.0
4,374.8
555.1
3,819.7
1,416.9
2,958.0
4,171.1
550.3
3,620.8
1,359.2
2,811.9
4,334.4
587.9
3,746.5
1,455.8
2,878.6
3,779.7
547.3
3,232.4
1,231.4
2,548.3
3,986.5
579.9
3,406.6
1,338.4
2,648.1
4,552.8
643.0
3,909.7
1,568.6
2,984.2
4,587.5
681.3
3,906.2
1,574.9
3,012.6
U.S. government securities
State and local obligations
Corporate and foreign bonds
Residential mortgages
Other mortgages and loans
LESS: Federal Home Loan Bank advances
20 Total credit market claims held by private financial
institutions
71
77
73
24
By holding institution
Commercial banks
Savings institutions
Insurance and pension funds
Other finance
MEMO
47 Public holdings as percent of total
48 Private financial intermediation (percent)
49 Total foreign funds
Corporate equities not included above
50 Total market value
51
Mutual fund shares
57 Other equities
53 Holdings by financial institutions
54 Other holdings
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.
11. Credit market debt of federally sponsored agencies, and net issues of
federally related mortgage pool securities.
13. Line 1 less line 2 plus lines 11 and 12. Also line 20 less line 26 plus line 32.
Also sum of lines 27 and 46 less lines 39 and 45.
18. Includes farm and commercial mortgages.
25. Line 38 less lines 39 and 45.
26. Excludes equity issues and investment company shares. Includes line 19.
28. Foreign deposits at commercial banks, plus bank borrowings from foreign
affiliates, less claims on foreign affiliates and deposits by banking in foreign banks.
29. Demand deposits and note balances at commercial banks.
10,029.0 10,029.0 10,327.3 10,486.8 10,638.4 10,801.7 10,870.0 10,989.1
30. Excludes net investment of these reserves in corporate equities.
31. Mainly retained earnings and net miscellaneous liabilities.
32. Line 13 less line 20 plus line 26.
33-37. Lines 14-18 less amounts acquired by private finance plus amounts
borrowed by private finance. Line 37 includes mortgages.
39. Mainly an offset to line 9.
46. Sum of lines 32 and 38, or line 13 less line 27 plus lines 39 and 45.
47. Line 2 divided by lines 1 plus 12.
48. Line 20 divided by line 13.
49. Sum of lines 10 and 28.
50-52. Includes issues by financial institutions.
NOTE. Full statements for sectors and transaction types in flows and in amounts
outstanding can 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.
A44 Domestic Nonfinancial Statistics • April 1992
2.10
NONFINANCIAL BUSINESS ACTIVITY
Selected Measures
Monthly data seasonally adjusted, except as noted
1991
1989
Measure
1 Industrial production1 (1987=100)
1990
1992
1991
May
June
July
Aug.
Sept.
Oct. r
Nov.
Dec. r
Jan.
108.1
109.2
107.1
106.4
107.3
108.1
108.0
108.4
108.4
IO8.r
107.6
106.7
Market groupings (1987=100)
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials
108.6
109.1
106.7
112.3
106.8
107.4
110.1
110.9
107.3
115.5
107.7
107.8
108. r
109.6r
107.6r
112.2
103.4R
105.5r
107.7
109.3
106.6
112.7
102.7
104.5
108.6
110.1
108.0
112.8
104.0
105.4
108.7
110.2
108.3
112.8
104.0
107.0
108.5
109.8
108.4
111.6
104.4
107.2
108.9
110.4
109.4
111.8
104.3
107.5
109.0
110.6
109.7
111.9
104.1
107.4
KW.O1
110.6r
llO.O1
111.4r
104.1r
106.6
108.8
110.2
109.7
110.9
104.2
105.8
107.8
109.2
108.9
109.5
103.5
104.9
Industry groupings (1987=100)
8 Manufacturing
108.9
109.9
107.5
106.6
107.5
108.3
108.4
108.9
109.0
108.6
108.5
107.5
2
3
4
5
6
7
9 Capacity utilization, manufacturing
(percent)2
83.9
82.3
78.2
77.8
78.3
78.7
78.6
78.8
78.7
78.2
78.0
77.0
172.9
156.2
140.8
138.0
133.0
144.0
150.0
143.0
157.0
134.0
152.0
n.a.
11 Nonagricultural employment, total4
12 Goods-producing, total
13
Manufacturing, total
14
Manufacturing, production worker
15 Service-producing
16 Personal income, total
17 Wages and salary disbursements
18
Manufacturing
19 Disposable personal income
20 Retail sales
106.0
102.5
102.2
102.3
107.1
115.2
114.4
110.6
115.2
113.2
107.6
101.0
100.5
100.0
109.7
123.1
121.1
113.4
123.4
117.4
106.6
96.4
96.9
96.0
109.9
127.1
124.2
113.5
128.2
118.4r
106.5
96.5
96.9
95.8
109.7
126.9
123.8
112.7
128.1
119.0
106.5
96.3
96.6
95.7
109.8
127.5
124.8
113.4
128.6
119.0
106.5
96.3
96.7
96.0
109.8
127.1
124.2
113.8
128.3
119.4
106.6
96.4
96.9
96.3
109.9
127.7
124.9
114.4
128.9
118.6
106.7
96.3
96.8
96.0
110.0
128.2
125.4
114.6
129.3
119.0
106.7
96.0
96.6
95.9
110.1
128.4
125.1
115.6
129.6
118.9
106.5
95.5
96.4
95.6
110.0
128.2r
125.2
114.4r
129.4r
118.9*
106.5
95.3
96.1
95.5
110.1
129.5
126.0
115.5
130.8
119.0
106.4
95.1
95.9
95.1
110.0
n.a.
n.a.
n.a.
n.a.
119.7
Prices7
21 Consumer (1982-84=100)
22 Producer finished goods (1982=100)
124.0
113.6
130.7
119.2
136.2
121.7
135.6
121.8
136.0
121.9
136.2
121.6
136.6
121.7
137.2
121.4r
137.4
122.3
137.8
122.3
137.9
121.9
138.1
121.7
10 Construction contracts (1982=100)
3
1. A major revision of the industrial production index and the capacity
utilization rates was released in April 1990. See "Industrial Production: 1989
Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April
1990), pp. 187-204.
2. Ratio of index of production to index of capacity. Based on data from the
Federal Reserve, DRI McGraw-Hill, U.S. 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
Co., 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 U.S. Bureau of the Census data published in Survey of Current
Business.
7. Based on data not seasonally adjusted, as published in Monthly Labor
Review. Seasonally adjusted data for changes in the price indexes can be obtained
from the Bureau of Labor Statistics, U.S. Department of Labor.
NOTE. Basic data (not indexes) for series mentioned in notes 4, 5,and 6, and
indexes for series mentioned in notes 3 and 7 can also be found in the Survey of
Current Business.
Figures for industrial production for the latest month are preliminary, and many
figures for the three months preceding the latest month have been revised. See
"Recent Developments in Industrial Capacity and Utilization," Federal Reserve
Bulletin, vol. 76 (June 1990), pp. 411-35.
Selected Measures
2.11
A45
LABOR FORCE, EMPLOYMENT, A N D UNEMPLOYMENT
Thousands of persons; monthly data seasonally adjusted; exceptions noted
1991
Category
1989
1990
1992
1991
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
HOUSEHOLD SURVEY DATA
1 Noninstitutional population1
188,601
190,216
191,883
191,805
191,955
192,095
192,240
192,386
192,522
192,661
192,796
2 Labor force (including Armed Forces) 1
3 Civilian labor force
Employment
4
Nonagricultural industries
5
Agriculture
Unemployment
6
Number
7
Rate (percent of civilian labor force)
8 Not in labor force
126,077
123,869
126,954
124,787
127,421
125,303
127,661
125,524
127,320
125,204
127,126
125,004
127,708
125,590
127,605
125,508
127,444
125,374
127,675
125,619
128,083
126,046
114,142
3,199
114,728
3,186
114,644
3,233
113,623
3,286
113,485
3,244
113,230
3,254
113,806
3,283
113,663
3,204
113,500
3,272
113,545
3,183
113,951
3,166
6,528
5.3
62,524
6,874
5.5
63,262
8,426
6.7
64,462
8,615
6.9
64,144
8,475
6.8
64,635
8,520
6.8
64,969
8,501
6.8
64,532
8,641
6.9
64,781
8,602
6.9
65,078
8,891
7.1
64,986
8,929
7.1
64,713
9 Nonagricultural payroll employment3
108,329
109,971
108,975
108,885
108,859
108,971
109,066
109,073
108,843
108,846
108,755
Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
Finance
Service
Government
19,442
693
5,187
5,644
25,770
6,695
27,120
17,779
19,111
711
5,136
5,826
25,843
6,739
28,240
18,322
18,427
697
4,696
5,823
25,412
6,707
28,778
18,434
18,378
704
4,710
5,809
25,413
6,703
28,712
18,456
18,402
701
4,695
5,809
25,411
6,688
28,733
18,420
18,442
693
4,691
5,820
25,393
6,687
28,831
18,414
18,414
684
4,699
5,829
25,387
6,692
28,937
18,424
18,377
679
4,671
5,828
25,335
6,697
29,019
18,467
18,337
674
4,584
5,816
25,261
6,694
29,008
18,469
18,290
671
4,593
5,798
25,238
6,693
29,043
18,520
18,238
667
4,587
5,814
25,173
6,695
29,050
18,531
ESTABLISHMENT SURVEY DATA
10
11
12
13
14
15
16
17
1. Persons sixteen years of age and older. Monthly figures are based on sample
data collected during the calendar week that contains the twelfth day; annual data
are averages of monthly figures. By definition, seasonality does not exist in
population figures.
2. Includes self-employed, unpaid family, and domestic service workers.
3. Includes all full- and part-time employees who worked during, or received
pay for, the pay period that includes the twelfth day of the month, and exclude
proprietors, self-employed persons, household and 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.
SOURCE. Based on data from Employment and Earnings (U.S. Department of
Labor).
A46
2.12
Domestic Nonfinancial Statistics • April 1992
OUTPUT, CAPACITY, A N D CAPACITY UTILIZATION 1
Seasonally adjusted
1991
1991
1991
Series
Ql
Q2
Q3
Q4r
Ql
Q2
Q3
Q4
Capacity (percent of 1987 output)
Output (1987=100)
Ql
Q2
Q3
Q4r
Capacity utilization rate (percent)
1 Total industry
105.8
106.4
108.1
108.0
133.6
134.5
135.3
136.2
79.2
79.1
79.9
79.3
2 Manufacturing
106.1
106.7
108.5
108.7
136.0
136.9
137.9
138.9
78.0
77.9
78.7
78.3
3
4
Primary processing
Advanced processing
100.6
108.6
100.8
109.4
104.1
110.6
104.2
110.8
126.8
140.2
127.5
141.3
128.1
142.4
128.8
143.5
79.4
77.5
79.1
77.4
81.2
77.7
80.9
77.2
5
6
7
8
9
10
11
12
13
Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Nonelectrical machinery
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment
106.1
92.3
97.9
96.3
100.2
124.4
108.1
80.8
106.7
94.0
95.9
92.8
100.3
123.5
110.6
89.5
108.1
95.1
102.0
100.3
104.5
123.5
111.2
95.9
107.7
95.4
103.1
104.3
101.4
122.8
110.3
97.0
139.9
125.0
128.2
133.0
121.3
157.9
142.7
133.4
140.9
125.2
128.6
133.5
121.5
159.5
144.0
134.2
141.8
125.4
129.0
134.0
121.7
161.2
145.3
134.9
142.8
125.7
129.3
134.5
121.9
162.8
146.6
135.6
75.8
73.9
76.4
72.4
82.6
78.8
75.8
60.5
75.7
75.1
74.6
69.5
82.6
77.4
76.8
66.7
76.2
75.8
79.1
74.8
85.8
76.6
76.5
71.1
75.4
75.9
79.7
77.5
83.2
75.5
75.3
71.5
109.9
106.4
105.2
102.8
137.0
137.9
138.7
139.6
80.2
77.2
75.9
73.6
14
15
16
17
18
19
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
106.1
94.6
102.6
109.1
113.2
107.3
106.7
99.4
102.7
109.3
115.6
107.6
109.1
104.1
107.6
112.1
125.4
108.1
110.0
104.9
107.4
113.4
127.7
106.6
130.9
117.3
116.4
138.4
135.7
121.4
131.9
117.7
117.1
139.7
139.2
121.4
132.9
118.0
117.9
141.0
142.6
121.4
133.8
118.3
118.7
142.3
146.1
121.4
81.0
80.6
88.2
78.8
83.4
88.4
80.9
84.5
87.7
78.2
83.0
88.6
82.1
88.2
91.2
79.5
87.9
89.0
82.2
88.6
90.5
79.7
87.4
87.8
102.0
106.2
109.3
101.1
109.6
114.4
101.8
110.4
115.2
99.3
109.5
111.6
113.8
128.1
123.8
114.3
128.4
124.3
114.6
128.8
124.7
114.7
129.2
125.2
89.6
82.9
88.3
88.4
85.3
92.1
88.9
85.7
92.4
86.6
84.8
89.2
20 Mining
21 Utilities
22
Electric
Previous cycle
High
Low
Latest cycle
High
1991
1992
June
Low
July
Aug.
Sept
Oct. r
Nov. r
Dec. r
Jan."
78.0
Capacity utilization rate (percent)
1 Total industry
89.2
72.6
87.3
71.8
80.0
79.6
80.0
79.8
79.9
79.8
79.3
78.8
2 Manufacturing
88.9
70.8
87.3
70.0
78.9
78.3
78.7
78.6
78.8
78.7
78.2
78.0
77.0
3
4
92.2
87.5
68.9
72.0
89.7
86.3
66.8
71.4
80.6
78.2
79.9
77.6
81.1
77.8
81.2
77.5
81.3
77.7
81.4
77.6
80.8
77.2
80.5
76.9
79.7
75.9
65.0
60.9
46.8
38.3
62.2
64.9
71.1
44.5
76.8
75.4
77.8
74.5
83.0
79.8
75.7
62.3
76.0
77.2
74.9
69.5
83.5
77.1
77.2
68.9
76.4
75.6
78.5
74.3
85.1
77.2
76.6
71.8
76.0
76.0
79.6
75.0
86.7
76.5
76.8
67.9
76.2
75.8
79.3
75.1
85.7
76.1
76.2
73.6
75.9
74.6
79.4
76.2
84.5
76.1
75.1
74.2
75.5
76.5
80.0
78.5
82.5
75.5
75.5
70.7
74.9
76.6
79.7
77.8
82.6
74.8
75.2
69.7
73.8
76.6
79.6
78.7
81.0
74.3
74.8
63.9
Primary processing
Advanced processing
5
6
7
8
9
10
11
12
13
Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Nonelectrical machinery
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment.
88.8
90.1
100.6
105.8
92.9
96.4
87.8
93.4
68.5
62.2
66.2
66.6
61.3
74.5
63.8
51.1
86.9
87.6
102.4
110.4
90.5
92.1
89.4
93.0
77.0
66.6
81.1
66.9
81.1
76.8
76.1
76.1
75.3
74.8
73.9
72.1
70.3
14
15
16
17
18
19
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
87.9
92.0
96.9
87.9
102.0
96.7
71.8
60.4
69.0
69.9
50.6
81.1
87.0
91.7
94.2
85.1
90.9
89.5
76.9
73.8
82.0
70.1
63.4
68.2
81.8
80.2
89.8
79.8
86.2
86.2
81.4
86.4
89.7
78.2
84.1
90.2
82.0
88.4
91.9
79.3
89.6
89.2
82.1
88.8
90.4
79.7
87.1
88.4
82.3
87.4
91.4
79.6
87.0
89.4
82.4
89.2
92.1
80.0
89.5
87.3
82.0
88.2
89.4
79.4
87.2
87.9
82.1
88.4
90.1
79.6
85.5
88.3
81.5
87.4
87.7
79.0
84.4
87.8
94.4
95.6
99.0
88.4
82.5
82.7
96.6
88.3
88.3
80.6
76.2
78.7
89.5
84.1
89.3
89.2
86.7
94.1
89.6
86.2
93.6
88.5
85.9
92.7
88.5
85.1
90.8
87.9
84.8
89.7
86.6
85.9
90.0
85.2
83.6
87.7
85.0
83.2
87.3
20 Mining
21 Utilities
22
Electric
1. Data in this table also appear in the Board's G.17 (419) monthly statistical
release. For ordering address, see inside front cover. For a detailed description of
the series, see "Recent Developments in Industrial Capacity and Utilization,"
Federal Reserve Bulletin, vol. 76 (June 1990), pp. 411-35.
2. Monthly high, 1973; monthly low, 1975.
3. Monthly highs, 1978 through 1980; monthly lows, 1982.
Selected Measures
2.13
INDUSTRIAL PRODUCTION
A47
Indexes and Gross Value 1
Monthly data seasonally adjusted
portion
1992
1991
1987
Group
1991
avg.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct. r
Nov/
Dec. r
Jan."
Index (1987 = 100)
MAJOR MARKETS
1
7
3
4
6
7
8
9
10
11
1?
N
14
IS
16
17
18
19
?0
71
22
?3
74
75
76
?7
78
79
30
31
37
33
34
35
36
37
38
39
40
41
4?
43
44
45
46
47
48
49
50
100.0
Total index
Final products
Consumer goods, total
Durable consumer goods
Automotive products
Autos and trucks
Autos, consumer
Trucks, consumer
Auto parts and allied goods...
Other
Appliances, A/C, and TV
Carpeting and furniture
Miscellaneous home goods . . .
Nondurable consumer goods
Clothing
Chemical products
Residential utilities
Transit
Other
Defense and space equipment
Oil and gas well drilling
Manufactured homes
Intermediate products, total
Construction supplies
Business supplies
Durable consumer parts
Other
Basic metal materials
Nondurable goods materials
Pulp and paper materials
Chemical materials
Other
Primary energy
Converted fuel materials
107.1
106.6
105.7
105.0
105.5
106.4
107.3
108.1
108.0
108.4
108.4
108.1
107.6
106.7
108.6
110.1
108.0
104.2
100.4
92.5
83.8
107.1
112.2
107.3
104.8
99.2
113.8
109.0
106.9
93.9
114.3
123.3
110.0
104.9
111.9
108.7
110.2
108.3
105.5
102.3
98.1
92.8
106.9
108.6
108.1
100.6
103.1
115.5
109.0
106.9
94.3
115.4
122.1
109.4
105.2
110.9
108.5
109.8
108.4
104.0
98.6
90.2
83.0
102.2
111.3
108.3
99.6
103.9
115.9
109.6
107.1
94.8
117.4
122.6
109.5
104.0
111.5
108.9
110.4
109.4
107.7
106.5
103.0
94.6
117.1
111.8
108.7
104.1
101.8
115.6
109.8
107.8
95.2
117.3
124.8
106.7
104.4
107.6
109.0
110.6
109.7
107.5
106.7
105.1
92.6
126.1
109.1
108.1
102.1
101.8
115.6
110.3
107.8
96.3
117.0
125.6
108.5
103.5
110.3
109.0
110.6
110.0
106.0
103.6
99.0
89.8
114.5
110.4
108.0
102.3
101.6
115.2
111.0
108.1
96.5
117.7
126.0
112.0
103.6
115.1
108.8
110.2
109.7
105.2
101.5
96.7
88.2
108.8
108.0
100.3
102.6
115.8
111.0
108.2
96.8
118.7
126.1
109.2
103.7
111.3
107.8
109.2
108.9
101.8
94.2
84.3
79.1
93.0
109.2
107.8
101.4
102.0
115.1
110.9
108.4
96.5
118.0
126.3
108.8
104.0
110.6
60.8
46.0
26.0
5.6
2.5
1.5
.9
.6
1.0
3.1
.8
.9
1.4
20.4
9.1
2.6
3.5
2.5
2.7
.7
2.0
108.1
109.6
107.6
102.3
97.8
90.2
84.6
99.6
109.3
105.8
99.6
99.4
113.4
109.0
106.8
93.5
115.9
123.6
108.5
103.5
110.4
107.8
109.1
105.6
97.6
90.6
79.6
83.2
73.6
107.1
103.2
92.8
100.3
110.8
107.8
106.3
90.6
114.7
122.1
106.5
99.8
109.0
106.9
108.3
104.7
95.2
88.1
74.7
78.6
68.1
108.3
100.7
94.5
92.0
109.8
107.3
105.9
90.8
114.8
121.0
105.2
103.4
105.9
106.5
108.1
104.7
95.9
88.9
76.7
76.3
77.4
107.3
101.4
96.2
93.9
109.2
107.1
105.4
90.4
114.2
122.2
105.5
104.3
105.9
106.9
108.7
105.5
99.3
94.2
85.0
78.3
96.3
108.0
103.4
97.3
97.0
110.8
107.2
105.3
90.6
115.0
122.7
104.4
101.4
105.5
107.7
109.3
106.6
101.1
97.4
89.2
81.9
101.6
109.5
104.1
96.8
96.9
112.8
108.1
106.2
92.0
113.9
121.8
109.0
103.6
111.0
20.0
13.9
5.6
1.9
4.0
2.5
1.2
1.9
5.4
.6
.2
112.2
121.5
131.5
155.6
108.1
126.9
88.6
113.6
91.0
93.3
85.5
113.6
121.6
130.1
155.0
111.5
124.0
79.8
115.0
94.4
106.4
83.1
112.9
120.6
131.6
157.3
109.1
120.3
75.0
112.5
94.5
108.2
77.3
112.5
120.3
131.2
155.1
109.5
120.4
76.7
110.8
93.9
107.7
79.3
112.8
121.3
131.5
155.6
109.3
124.1
84.4
112.7
92.5
105.1
83.1
112.7
121.7
131.8
155.6
109.3
125.9
87.9
113.0
91.5
101.3
86.6
112.8
121.9
130.9
154.0
109.1
128.0
90.8
114.8
91.0
103.0
90.8
112.8
122.5
131.1
156.0
109.0
131.2
96.6
114.0
90.0
97.8
86.5
111.6
121.3
130.3
153.1
108.6
126.7
86.2
114.8
89.8
86.7
90.3
111.8
122.2
130.3
152.2
108.2
132.7
99.3
114.2
89.1
80.1
86.2
111.9
122.3
131.7
156.0
106.8
133.1
101.1
113.6
89.1
79.0
86.3
111.4
121.7
133.5
158.5
104.1
130.5
96.5
113.4
88.8
78.1
87.0
110.9
121.7
133.9
159.3
103.1
129.9
96.1
114.2
87.4
75.8
87.9
109.5
120.3
133.9
160.4
102.2
124.1
84.9
114.2
85.9
71.8
89.5
14.7
6.0
8.7
103.4
96.1
108.4
103.8
97.7
108.1
102.6
96.4
106.8
101.3
94.0
106.4
101.2
94.9
105.6
102.7
95.8
107.5
104.0
97.4
108.5
104.0
96.9
109.0
104.4
96.7
109.7
104.3
96.5
109.7
104.1
95.4
110.1
104.1
95.8
109.9
104.2
95.6
110.1
103.5
95.3
109.2
39.2
19.4
4.2
7.3
7.9
2.8
9.0
1.2
1.9
3.8
2.1
10.9
7.2
3.7
105.5
107.1
96.5
114.4
106.0
106.0
106.0
97.2
106.9
106.2
109.8
102.3
102.3
102.2
104.8
106.8
94.2
115.9
105.2
104.6
104.9
89.1
106.0
106.7
109.3
101.1
101.3
100.9
103.9
105.5
90.4
116.2
103.8
104.8
103.6
91.5
104.1
104.1
108.8
101.1
102.1
99.2
102.6
103.3
87.5
114.8
101.0
101.2
102.8
92.7
102.4
102.7
108.8
101.3
101.5
100.8
103.4
104.9
92.1
114.6
102.6
101.6
103.1
94.7
102.0
102.9
109.0
101.1
100.5
102.4
104.5
106.2
95.5
114.8
103.8
103.0
103.7
96.8
101.5
103.9
109.2
102.4
101.2
104.7
105.4
106.7
97.3
113.6
105.3
105.9
104.9
98.1
106.9
103.9
108.6
103.4
104.7
101.0
107.0
108.2
100.2
113.5
107.5
108.8
108.1
101.4
110.3
107.7
110.5
104.1
106.2
100.1
107.2
109.1
100.1
114.3
109.0
110.2
107.8
101.5
108.2
107.9
110.9
103.3
104.5
101.0
107.5
109.3
101.3
113.9
109.3
109.5
108.3
99.5
110.4
108.2
111.3
103.6
103.8
103.4
107.4
108.8
101.6
113.6
108.2
107.7
109.6
101.8
112.0
109.9
111.2
103.1
102.8
103.8
106.6
108.6
100.5
113.7
108.2
107.7
107.6
99.9
108.4
108.3
110.1
102.1
100.8
104.6
105.8
108.2
97.6
114.1
108.3
108.5
107.6
99.6
110.0
107.6
109.9
100.2
99.1
102.4
104.9
107.0
95.3
113.5
107.1
107.8
106.3
98.7
105.5
107.5
109.1
100.0
99.5
101.0
97.3
95.3
107.6
107.9
107.4
107.8
106.6
107.0
105.7
106.2
106.1
106.5
106.9
107.3
107.8
108.1
108.4
108.6
108.5
108.8
108.6
108.8
108.5
108.8
108.3
108.7
107.9
108.2
107.3
107.6
97.5
105.9
105.4
104.4
103.7
104.2
105.2
106.2
106.9
106.8
107.3
107.2
106.8
106.3
105.3
106.5
104.7
106.4
104.6
106.7
105.6
107.6
106.3
108.9
107.7
108.9
108.1
109.5
108.3
109.8
109.7
109.9
109.8
110.6
109.7
110.5
109.8
110.4
108.9
111.0
SPECIAL AGGREGATES
51 Total excluding autos and trucks
52 Total excluding motor vehicles and parts...
53 Total excluding office and computing
machines
54 Consumer goods excluding autos and
55 Consumer goods excluding energy
56 Business equipment excluding autos and
trucks
57 Business equipment excluding office and
computing equipment
58 Materials excluding energy
24.5
23.3
108.6
107.5
107.2
105.5
12.7
124.7
125.7
125.0
124.5
124.9
125.0
125.0
125.0
124.7
124.4
124.4
124.2
124.1
123.8
12.0
28.4
116.0
106.8
116.2
106.2
114.6
104.9
114.6
103.1
115.7
104.3
116.3
105.4
116.7
106.1
117.0
108.2
116.2
108.7
117.3
109.0
116.9
109.1
115.8
108.3
115.6
108.0
113.9
106.8
A48
Domestic Nonfinancial Statistics • April 1992
2.13 —Continued
Group
SIC 2
code
1987
proportion
1991
1992
1991
avg.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct/
Nov/
Dec/
Jan."
Index (1987 = 100)
MAJOR INDUSTRIES
1 Total index .
100.0
107.1
106.6
105.7
105.0
105.5
106.4
107.3
108.1
108.0
108.4
108.4
108.1
107.6
106.7
84.4
26.7
57.7
107.5
102.4
109.8
107.0
102.0
109.3
106.1
100.8
108.5
105.2
99.0
108.0
105.9
99.6
108.9
106.6
100.7
109.3
107.5
102.1
109.9
108.3
103.7
110.5
108.4
104.1
110.3
108.9
104.4
111.0
109.0
104.7
111.0
108.6
104.1
110.7
108.5
103.9
110.6
107.5
102.9
109.5
Durable goods
24
Lumber and products . . .
25
Furniture and fixtures . . .
Clay, glass, and stone
32
products
Primary metals
33
Iron and steel
331,2
Raw steel
333-6,9
Nonferrous
Fabricated metal
34
products
35
Nonelectrical machinery.
Office and computing
357
machines
36
Electrical machinery . . . .
Transportation
37
equipment
Motor vehicles and
371
parts
Autos and light
trucks
Aerospace and miscellaneous transportation equipment.. 372-6,9
38
Instruments
Miscellaneous
39
47.3
2.0
1.4
107.1
94.3
99.2
107.2
94.2
99.0
106.1
91.5
94.9
105.0
91.2
95.4
106.0
92.7
98.3
106.7
92.5
98.5
107.3
96.7
99.4
108.1
94.8
100.5
107.8
95.3
101.3
108.4
95.2
101.2
108.2
93.8
100.5
107.7
96.2
99.9
107.2
96.4
101.2
105.8
96.4
101.4
2.5
3.3
1.9
.1
1.4
94.9
99.6
98.3
97.3
101.6
97.2
99.7
99.0
104.7
100.6
98.9
99.5
98.0
97.9
101.6
94.4
94.7
92.0
89.8
98.4
94.2
94.5
91.6
91.0
98.5
95.1
96.9
94.0
88.9
101.0
95.0
96.4
92.9
94.0
101.5
95.8
101.2
99.5
102.6
103.5
95.5
102.6
100.6
102.4
105.5
94.4
102.3
100.8
100.9
104.4
94.4
102.6
102.4
101.3
102.9
92.8
103.5
105.6
99.1
100.5
91.9
103.1
104.8
97.6
100.7
91.1
102.9
105.8
100.1
98.8
5.4
8.6
100.4
123.6
101.7
125.5
99.1
124.5
97.8
123.1
98.0
123.5
99.1
123.6
99.8
123.4
100.9
123.9
101.4
123.3
101.9
123.1
101.9
123.5
101.8
122.9
101.3
122.1
99.5
121.8
2.5
8.6
155.6
110.1
155.0
107.6
157.3
108.2
155.1
108.6
155.6
109.7
155.6
110.6
154.0
111.5
156.0
111.0
153.0
111.5
152.2
111.0
155.9
109.8
158.5
110.7
159.3
110.5
160.4
110.2
Nondurable goods
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
Printing and publishing . .
Chemicals and products .
Petroleum products
Rubber and plastic
products
Leather and products . . .
2 Manufacturing
3 Primary processing ..
4 Advanced processing
23
24
25
26
27
28
29
30
31
32
33
34 Mining
35 Metal
36 Coal
37 Oil and gas extraction...
38 Stone and earth minerals
39 Utilities...
40
Electric.
41 Gas . . . .
9.8
98.6
97.6
95.5
95.0
97.2
98.2
99.7
101.3
99.0
102.2
102.4
99.7
97.9
93.1
4.7
90.4
83.0
79.4
79.8
86.2
89.8
92.5
96.7
91.6
99.5
100.4
95.9
94.7
86.9
2.3
89.4
80.1
75.3
76.6
84.0
88.2
91.2
97.3
89.1
101.8
103.2
97.6
95.5
83.5
5.1
3.3
1.2
106.0
118.2
119.4
110.8
119.0
116.1
110.0
119.3
114.6
108.8
118.4
115.3
107.2
118.6
117.5
105.8
118.2
118.7
106.1
117.3
119.8
105.4
116.5
121.6
105.6
116.9
123.2
104.6
118.1
121.5
104.3
118.2
120.6
103.1
118.5
120.7
100.9
118.9
121.6
98.6
118.5
122.2
20
21
22
23
26
27
28
29
37.2
8.8
1.0
1.8
2.4
3.6
6.4
8.6
1.3
108.0
108.6
100.5
100.7
96.2
105.1
112.4
111.0
107.4
106.8
108.3
100.0
94.0
92.9
104.2
112.1
110.1
104.7
106.0
107.6
100.1
94.3
93.1
102.2
110.9
109.1
108.8
105.4
107.4
98.2
95.4
92.5
101.3
110.4
108.2
108.5
105.9
107.6
97.6
97.2
93.2
101.3
110.7
109.0
105.7
106.5
107.8
98.7
99.2
95.2
101.3
110.6
109.2
107.5
107.6
108.6
99.4
101.7
96.2
105.3
111.2
109.6
109.6
108.6
108.3
102.6
104.2
97.8
108.1
111.9
111.5
108.3
109.0
108.7
103.1
104.7
98.3
106.5
112.3
112.3
107.3
109.6
109.5
102.7
103.2
98.1
108.0
113.3
112.6
108.6
110.1
109.4
102.2
105.5
98.7
109.0
114.4
113.5
106.0
109.7
110.0
100.5
104.4
98.8
106.1
114.3
113.0
106.7
110.1
110.0
100.9
104.7
98.9
107.2
115.0
113.7
107.2
109.6
110.0
104.0
103.7
98.4
104.5
114.3
113.1
106.6
30
31
3.0
.3
110.0
88.2
108.8
89.6
106.1
90.8
104.4
91.5
106.6
90.0
109.2
89.5
110.5
90.9
110.1
91.0
112.6
87.1
113.8
85.8
113.2
83.9
112.6
84.3
112.7
83.7
112.2
83.3
10
11,12
13
14
7.9
.3
1.2
5.7
.7
101.0
149.4
109.2
95.7
108.3
101.7
143.1
108.4
96.0
119.2
102.9
148.0
112.8
97.2
112.0
101.5
147.6
109.9
96.4
108.0
100.9
145.7
105.9
96.6
107.0
100.2
148.0
103.4
96.0
107.5
102.1
157.0
110.2
96.9
106.4
102.7
153.0
116.0
96.4
107.8
101.3
155.5
110.8
95.7
107.0
101.4
153.1
110.1
96.0
107.3
100.7
146.5
107.9
96.0
105.9
99.3
148.4
108.4
93.9
105.9
97.8
147.2
107.6
91.7
108.4
97.6
145.1
110.4
91.1
106.9
7.6
6.0
1.6
109.2
112.6
96.3
107.6
110.4
97.5
104.6
107.8
92.8
106.4
109.8
93.6
105.9
109.8
91.6
111.4
116.4
92.8
111.5
117.1
90.7
110.9
116.6
89.7
110.7
115.6
92.4
109.7
113.4
95.8
109.4
112.2
98.9
111.0
491,3PT
492,3PT
112.7
104.8
108.1
109.9
101.7
107.7
109.6
100.7
79.8
108.5
108.4
107.6
106.7
107.1
107.6
108.3
109.0
109.3
109.5
109.5
109.3
109.3
108.7
82.0
106.0
105.6
104.5
103.7
104.4
105.1
106.1
106.9
107.0
107.6
107.6
107.1
107.0
105.9
SPECIAL AGGREGATES
42 Manufacturing excluding
motor vehicles and
parts
43 Manufacturing excluding
office and computing
machines
Gross value (billions of 1982 dollars, annual rates)
MAJOR MARKETS
44 Products, total
1734.8
45 Final
46 Consumer goods
47 Equipment
48 Intermediate
1350.9 1,482.2 1,459.6 1,452.8 1,455.6 1,464.6 1,478.1 1,490.5 1,496.1 1,484.5 1,501.5 1,510.0 1,504.0 1,492.5 1,476.0
833.4
880.1
857.9 852.7 857.4 862.9 874.4 884.2 888.3 882.7
898.3 902.4 901.8 898.5 885.5
517.5
602.1
601.7 600.1 598.2 601.7 603.7 606.2 607.8 601.8 603.3 607.6 602.2 594.0 590.5
384.0
398.1 400.8 395.6 389.8 388.7 397.6 400.1
399.2 401.0 400.3 401.4 402.6 401.9 402.0
1,880.3
1,860.4 1,848.4 1,845.4 1,853.3 1,875.7
1. Data in this table also appear in the Board's G.17 (419) weekly statistical
release. For ordering address see inside front cover.
A major revision of the industrial production index and the capacity
utilization rates was released in April 1990. See "Industrial Production: 1989
1,890.5
1,895.3 1,885.5 1,901.8 1,911.4 1,906.5
1,894.4 1,878.0
Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April
1990), pp. 187-204.
2. Standard industrial classification.
Selected Measures
2.14
A49
HOUSING A N D CONSTRUCTION
Monthly figures at seasonally adjusted annual rates, except as noted
1991
Item
1989
1990
1991
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct. r
Nov. r
Dec.
Private residential real estate activity (thousands of units, except as noted)
NEW UNITS
3
4
5
6
7
8
9
10
11
1?
13
Permits authorized
One-family
Two-or-more-family
Started
One-family
Two-or-more-family
Under construction at end of period ..
One-family
Two-or-more-family
Completed
One-family
Two-or-more-family
Mobile homes shipped
14
15
Merchant builder activity in
one-family units
Number sold
Number for sale at end of period
16
17
Price of units sold (thousands
of dollars)2
Median
Average
18
Number sold
1
?
...
982
782
200
1,020 R
864 R
156
632
453
179
1,194
869
325
172
1,028
796
232
1,085
887
198
629
449
180
1,069
876
193
171
993
787
206
1,085
907
178
635
457
178
1,023
826
197
171
1,055
851
204
1,106
%5
141
644
467
177
991
820
171
176
522
291
498 R
291
518
287
559
284
522
283
120.0
148.2
120.8
141.8
120.0"
147.3 R
123.5
147.8
117.3
140.5
123.8
148.2
3,590
3,320
3,250
3,120
3,160
3,310
3,340
102.0
130.5
103.6
132.2
102.2
131.0
99.7
127.7
99.2
126.4
97.9
124.9
100.0
127.1
406,983
410,342
408,410
407,403
293,402 2%,621 297,537 295,714
162,800 166,578 168,251 168,212
130,602 130,043 129,286 127,502
21,494
21,643
20,418
20,321
44,479 42,316
46,341
45,589
20,708
20,443
19,973 20,615
42,605
43,100
43,870
43,518
294,956
167,259
127,697
22,371
41,237
21,242
42,847
892
689
203
918 R
75 R
167R
680
442
238
1,190
881
309
159*^
913
742
171
978R
802R
176
674
443
231
1,089
821
268
177R
966
760
206
983
830"
153R
665
443
222
1,070
800
270
173R
999
780
219
L,036R
870R
166R
655
446
209
1,105
815
290
172R
1,005
794
211
L,053R
881 R
172R
652
451
201
1,069
806
263
175
953
769
184
L,053R
881 R
172R
649
455
194
1,054
821
233
175R
503
283
495
308
506
303
507
299
518
295
507
2%
122.3
149.0
120.1
147.4
122.5
156.4
121.0
150.8
116.0
145.4
119.0
145.9
3,439
3,316
3,283
3,220
3,310
3,540
92.9
118.0
95.2
118.3
99.5
127.3
98.2
125.2
100.3
128.9
101.1
130.6
1,339
932
407
1,376
1,003
373
850
535
315
1,423
1,026
396
198
1,111
794
317
1,193
895
298
711
449
262
1,308
966
342
188
%1
759
202
1,015
841
173
617
443
174
1,088
835
253
171
650
363
535
318
120.4
148.3
EXISTING UNITS ( o n e - f a m i l y )
Price of units sold (thousands
of dollars)2
19
20
Average
Value of new construction3 (millions of dollars)
CONSTRUCTION
407,050
399,030
398,189 3 9 8 , 4 0 9
21 Total put in place
443,720
22 Private
23 Residential
24 Nonresidential, total
25
Industrial buildings
26
Commercial buildings
27
Other buildings
28
Public utilities and other
345,416 337,776 295,737 293,262 299,044 291,048 290,871 290,299
196,551 182,856 160,962 152,447 151,836 154,567 158,282 158,039
148,865 154,920 134,775 140,815 147,208 136,481 132,589 132,260
20,868
20,885
20,683
24,301
23,089
21,710
20,412 23,849
47,144
50,220 47,5%
48,036 51,766 54,824
65,496 62,866
20,429 20,674
20,858
21,928
20,743 20,628
19,683 21,591
45,332 46,155 44,720 43,696 43,557
43,274 46,614 44,286
29 Public
30 Military
31 Highway
32 Conservation and development
33 Other
98,303
3,520
28,171
4,989
61,623
446,433
108,655
2,734
30,595
4,718
70,608
404,891
109,156
1,849
29,041
5,347
72,919
401,883
108,621
1,866
108,007
29,9%
4,586
72,173
28,591
5,833
71,755
1. Not at annual rates.
2. Not seasonally adjusted.
3. Recent data on value of new construction may not be strictly comparable
with data for 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.
1,828
107,982
1,918
29,246
5,123
71,695
107,318
1,864
28,776
5,807
70,871
108,110
1,759
28,854
4,688
72,809
403,151
109,749
1,783
30,047
4,901
73,018
110,361
2,261
28,610
4,226
75,264
112,805
1,205
29,079
6,109
76,412
112,697
1,912
28,680
6,814
75,291
112,447
2,200
28,805
5,613
75,829
SOURCE. Bureau of the Census 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 17,000 jurisdictions
beginning in 1984.
A50
2.15
Domestic Nonfinancial Statistics • April 1992
CONSUMER A N D PRODUCER PRICES
Percentage changes based on seasonally adjusted data, except as noted
Change from 12
months earlier
Change from 3 months earlier
(annual rate)
Item
Change from 1 month earlier
1991r
1991
Jan.
1991r
1992
1992
Jan.
Mar.
June
Sept.
Dec.
Sept.
Oct.
Nov.
Dec.
Index
level,
Jan.
1992
Jan.
CONSUMER PRICES2
(1982-84=100)
1 All items
5.7
2.6
2.7
3.0
3.0
3.2
.4
.2
.4
.2
.1
2
3 Energy items
4 All items less food and energy
5
Commodities
6 Services
4.1
1.0
2.4
4.8
-2.3
2.7
.1
-.1
.4
.3
-.4
137.2
9.7
5.6
4.0
6.3
-6.5
3.9
3.3
4.3
-29.4
6.8
8.2
6.2
-.8
3.2
2.2
3.3
1.2
4.6
4.4
4.6
3.6
3.1
.6
4.3
.2
.4
.4
.4
.0
.2
.1
.3
.8
.3
.3
.3
.1
.2
-.2
.4
-1.5
.3
.2
.4
100.1
144.9
130.1
153.4
4.0
.7
13.6
4.2
3.9
-.5
-1.8
-10.0
2.9
1.9
-2.9
.0
-32.6
5.6
5.2
.7
-.6
-1.5
1.8
1.6
1.3
-4.4
3.7
3.6
1.3
1.0
-1.3
-.5
2.4
1.9
.2
-.1
.4
.3
.2
.3
.0
1.2
.3
.2
.0
-.2
.1
.1
.2
-.1
-.2
-1.4
.2
.2
-.3
-.3
-2.8
.4
.2
121.7
122.5
74.3
136.2
128.3
3.0
2.0
-2.9
-1.1
-7.6
-1.0
-1.0
-.7
.4
-1.3
-1.7
.0
.2
-.1
-.3
-.1
.1
.0
-.2
.1
-.5
-.2
113.4
121.0
-5.6
18.6
1.1
-3.0
-23.0
-8.2
-3.6
-54.0
-5.3
-8.6
.5
-14.1
-6.6
-.5
-4.9
-3.8
4.8
-7.4
1.6
-2.5
-.8
-.2
4.0
-.5
-.4
1.2
-1.3
-.4
-3.9
-.2
1.7
-3.5
.0
104.0
75.2
122.6
138.1
PRODUCER PRICES
(1982=100)
7 Finished goods
8 Consumer foods
9 Consumer energy
10 Other consumer goods
11 Capital equipment
Intermediate materials
12 Excluding foods and feeds
13 Excluding energy
Crude materials
14 Foods
15 Energy
16 Other
1. Not seasonally adjusted.
2. Figures for consumer prices are for all urban consumers and reflect a
rental-equivalence measure of homeownership.
SOURCE. Bureau of Labor Statistics.
Selected Measures
2.16
GROSS DOMESTIC PRODUCT A N D INCOME
Billions of current dollars, except as noted; quarterly data at seasonally adjusted annual rates
1991
1990
1991
Q4
Ql
Q2
Q3
GROSS DOMESTIC PRODUCT
5,244.0
5,513.8
5,671.8
5,557.5
5,589.0
5,652.6
5,709.2
3,517.9
459.8
1,146.9
1,911.2
3.742.6
465.9
1.217.7
2,059.0
3.886.8
445.2
1,251.0
2,190.5
3,812.0
451.9
1,246.4
2,113.6
3,827.7
440.7
1,246.3
2.140.7
3.868.5
440.0
1,252.9
2.175.6
3,916.4
452.9
1,257.4
2,206.1
837.6
801.6
570.7
193.1
377.6
230.9
802.6
802.7
587.0
198.7
388.3
215.7
725.3
745.6
550.4
174.5
376.0
195.1
750.9
787.4
585.2
191.2
394.0
202.2
709.3
748.4
560.0
184.0
375.9
188.4
708.8
745.8
554.6
180.0
374.7
191.2
740.9
744.5
546.8
169.0
377.8
197.7
36.0
35.5
.0
-2.0
-20.2
-17.0
-36.5
-28.9
-39.2
-35.0
-37.1
-34.0
-3.6
-3.2
14 Net exports of goods and services
15 Exports
16 Imports
-82.9
504.9
587.8
-74.4
550.4
624.8
-27.1
593.3
620.4
-76.6
572.6
649.2
-36.8
565.9
602.7
-17.2
589.8
607.0
-37.3
597.0
634.3
17 Government purchases of goods and services ..
18 Federal
19 State and local
971.4
401.4
570.0
1,042.9
424.9
618.0
1.086.9
445.1
641.8
1,071.2
434.5
636.7
1.088.8
451.5
637.3
1,092.5
452.1
640.4
1,089.1
444.9
644.2
5.208.1
2,062.1
892.9
1.169.2
2,634.7
511.3
5,513.8
2,167.6
934.7
1,233.0
2,834.0
512.2
5,692.0
2,213.0
929.0
1,284.0
3,012.7
466.4
5,594.0
2,194.5
927.2
1,267.3
2,905.5
494.0
5,628.2
2,208.6
916.4
1,292.1
2,951.7
467.9
5.689.6
2,223.2
939.5
1.283.7
2,999.0
467.4
5,712.8
2,214.1
929.4
1,284.7
3,035.1
463.5
36.0
26.9
9.1
.0
-7.0
7.0
-20.2
-24.6
4.3
-36.5
-29.4
-7.1
-39.2
-43.5
4.3
-37.1
-33.5
-3.6
-3.6
-9.2
5.6
4,836.9
4,884.9
4,848.4
4,855.1
4,824.0
4,840.7
4,862.7
4.244.7
4,459.6
4,506.8
4.489.8
4,530.8
4,559.8
3,101.3
2.585.8
478.6
2,107.2
515.5
261.7
253.7
3,290.3
2,738.9
514.0
2,224.9
551.4
277.3
274.0
3,387.7
2,807.7
540.2
2,267.6
580.0
289.3
290.6
3,340.0
2,778.3
525.4
2,253.0
561.6
281.7
279.9
3.342.9
2,771.1
536.0
2,235.1
571.8
287.5
284.2
3,377.4
2,800.2
540.1
577.2
288.7
288.5
3.405.3
2.822.4
541.8
2,280.6
582.9
290.2
292.8
347.0
305.5
373.2
330.7
379.6
344.5
373.9
332.7
41.4
42.5
35.2
41.2
364.2
331.4
32.8
380.0
340.4
39.6
382.5
350.5
32.0
-7.9
-12.9
-13.2
-9.5
-11.9
-11.7
-14.2
42 Corporate profits'
43 Profits before tax
44 Inventory valuation adjustment
45 Capital consumption adjustment
351.7
344.5
-17.5
24.7
319.0
332.3
-14.2
n.a.
n.a.
3.8
-9.1
296.1
326.1
-21.2
302.1
309.1
6.7
-13.6
303.5
306.2
9.9
-12.6
306.1
318.2
-4.8
-7.3
46 Net interest
452.6
492.6
481.6
480.1
1 Total
2
3
4
5
By source
Personal consumption expenditures
Durable goods
Nondurable goods
Services
6 Gross private domestic investment
7 Fixed investment
8
Nonresidential
Structures
9
10
Producers' durable equipment
11
Residential structures
12
13
Change in business inventories
Nonfarm
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 GDP in 1987 dollars
NATIONAL INCOME
30 Total
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
38 Proprietors'income 1
39 Business
and professional
40 Farm 1
41 Rental income of persons 2
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
481.3
2,260.1
3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. Survey of Current Business (U.S. Department of Commerce).
A51
A52
2.17
Domestic Nonfinancial Statistics • April 1992
PERSONAL INCOME A N D SAVING
Billions of current dollars, except as noted; quarterly data at seasonally adjusted annual rates
1991
Account
1989
1990
Q4
Q1
Q2
Q3
PERSONAL INCOME AND SAVING
1 Total personal income
4,380.2
4.679.8
4,833.9
4,764.7
4,768.0
4,821.1
4.853.3
2 Wage and salary disbursements
3 Commodity-producing industries
Manufacturing
4
5 Distributive industries
6
Service industries
7 Government and government enterprises
2,585.8
723.8
542.1
607.5
775.9
478.6
2.738.9
745.4
555.8
634.6
845.0
514.0
2.807.8
738.7
556.5
641.2
887.6
540.2
2,778.2
745.2
557.3
639.0
868.8
525.2
2,770.9
733.4
549.3
635.1
866.5
535.8
2,800.6
735.2
552.3
642.0
883.0
540.5
2.822.4
742.3
559.9
644.0
894.4
541.8
253.7
347.0
305.5
41.4
-7.9
119.8
669.0
624.4
274.0
373.2
330.7
42.5
-12.9
124.8
721.3
684.9
352.0
290.6
379.6
344.5
35.2
-13.2
128.5
719.4
759.1
379.7
279.9
373.9
332.7
41.2
-9.5
127.0
736.9
705.8
358.4
284.2
364.2
331.4
32.8
-11.9
128.7
730.1
737.2
373.1
288.5
380.0
340.4
39.6
-11.7
127.4
721.8
751.5
377.2
292.8
382.5
350.5
32.0
-14.2
128.7
716.7
763.7
381.7
224.3
238.0
227.5
235.4
237.0
239.3
4,679.8
4.833.9
4,764.7
4,768.0
4,821.1
4,853.3
621.0
616.0
627.2
617.1
613.6
615.1
4,238.2
8
9
10
11
12
13
14
15
16
17
Other labor income
Proprietors' income1
Business and professional 1
Farm 1
Rental income of persons
Dividends
Personal interest income
Transfer payments
Old-age survivors, disability, and health insurance benefits . . .
LESS: Personal contributions for social insurance
18 EQUALS: Personal income
19
LESS: Personal tax and nontax payments
20 EQUALS: Disposable personal income
21
LESS: Personal outlays
22 EQUALS: Personal saving
325.1
211.7
4,380.2
591.7
3,788.6
3,621.6
166.9
4,058.8
4,217.8
4,137.5
4,151.0
4,207.5
3,852.2
3,995.8
3,921.7
3,937.5
3,977.9
4,024.9
206.6
222.1
215.8
213.4
229.6
213.3
19,539.6
13,050.4
14,154.0
19,186.4
12,887.6
13,987.0
19,337.3
12,951.6
14,058.0
19,166.5
12,877.4
13,965.0
19,187.7
12,892.0
14,022.0
19,220.2
12,929.6
13,992.0
5.1
5.5
5.0
MEMO
Per capita (1987 dollars)
23 Gross domestic product
24 Personal consumption expenditures
25 Disposable personal income
19.550.5
13.027.6
14,030.0
5.3
26 Saving rate (percent)
GROSS SAVING
744.2
711.8
n.a.
678.3
713.9
698.0
827.3
851.3
n.a.
853.9
893.0
876.4
29
savingcorporate profits1
30 Personal
Undistributed
31 Corporate inventory valuation adjustment
166.9
85.8
-17.5
206.6
49.9
-14.2
n.a.
3.8
-21.2
213.4
45.0
6.7
229.6
43.4
9.9
213.3
39.4
-4.8
Capital consumption allowances
32 Corporate
33 Noncorporate
350.5
224.0
365.5
229.3
384.0
239.5
372.7
232.7
380.1
235.3
383.2
236.8
384.6
239.1
34 Government surplus, or deficit ( - ) , national income and
product accounts
35 Federal
36 State and local
-83.0
-124.2
41.1
-139.5
-165.3
25.7
-171.2
-200.7
29.6
-175.6
-193.6
18.0
-126.1
-146.4
20.4
-179.1
-206.7
27.6
-178.4
-210.2
31.8
765.8
730.4
720.0
837.6
-96.0
802.6
725.3
11.5
750.9
-70.4
709.3
56.5
708.8
21.7
740.9
-20.9
27 Gross saving
28 Gross private saving
222.1
215.8
32.8
37 Gross investment
38 Gross private domestic
39 Net foreign
40 Statistical discrepancy
1. With inventory valuation and capital consumption adjustments
2. With capital consumption adjustment.
-82.8
8.1
16.5
SOURCE. Survey of Current Business (U.S. Department of Commerce).
Summary Statistics
3.10
U.S. INTERNATIONAL TRANSACTIONS
A53
Summary
Millions of dollars; quarterly data seasonally adjusted, except as noted 1
1990
Item credits or debits
Not seasonally adjusted
Merchandise trade balance 2
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)
-126,236
-106,305
-92,123
-126,986
320,337
-447,323
-5,743
5,353
-115,917
361,451
-477,368
-6,203
2,689
28,618
-4,420
-11,071
-108,115
389,550
-497,665
-7,219
11,945
33,595
-4,843
-17,486
16,082
-4,437
-10,506
Q3
Q4
Ql
Q2
Q3P
-23,881
-29,112
-28,760
%,638
-125,398
-1,683
2,802
8,086
-1,302
-3,024
-23,402
-25,136
-27,728
100,580
-128,308
-2,243
6,133
9,716
-1,201
-8,079
10,501
15,507
-18,394
100,900
-119,294
-2,329
4,883
9,402
-1,316
18,255
3,028
4,593
-15,391
104,245
-119,636
-1,484
2,345
10,429
-1,315
8,444
-10,459
-15,593
-20,486
104,532
-125,018
-1,168
2,502
10,630
-1,267
-670
11 Change in U.S. government assets other than official
reserve assets, net (increase, - )
2,966
1,320
2,976
4,759
1,422
-493
2,715
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
-3,912
0
127
1,025
-5,064
-25,293
0
-535
471
-25,229
-2,158
0
-192
731
-2,697
1,739
0
363
8
1,368
-1,092
0
-93
-4
-995
-353
0
31
-341
-43
1,014
0
-190
72
1,132
3,878
0
6
-114
3,986
17 Change in U.S. private assets abroad (increase, - ) .
18 Bank-reported claims
19 Nonbank-reported claims
20
U.S. purchases of foreign securities, net
21
U.S. direct investments abroad, net
-85,112
-56,322
-3,064
-7,846
-17,880
-104,637
-51,255
2,581
-22,575
-33,388
-58,524
5,333
-1,944
-28,476
-33,437
-28,114
-9,984
676
-1,014
-17,792
-38,370
-24,513
-2,509
-7,546
-3,802
-1,992
20,598
-1,308
-9,430
-11,852
-15,503
1,215
-2,076
-12,833
-1,809
-18,564
-178
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 liabilities4
26 Other U.S. liabilities reported by U.S. banks 3
27 Other foreign official assets
39,657
41,741
1,309
-568
-319
-2,506
8,624
149
1,383
281
4,976
1,835
32,425
28,643
667
1,703
2,998
-1,586
13,341
11,849
134
-248
1,871
-265
20,301
20,119
708
1,102
-707
-921
6,631
2,381
-29
2,501
766
-3,105
-2,287
-219
370
-1,084
115
4,309
5,717
407
1,302
-3,144
27
28 Change in foreign private assets in United States (increase, + ) . .
29 U.S. bank-reported liabilities3
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
181,877
70,235
5,626
20,239
26,353
59,424
207,925
63,382
5,454
29,618
38,920
70,551
53,879
9,975
3,779
1,131
1,781
37,213
35,754
26,%8
4,260
24
-2,558
7,060
18,732
17,261
-1,840
-2,029
802
4,538
-7,360
-18,795
-1,616
3,409
5,306
4,336
6,608
-28,687
-760
13,434
15,073
7,548
18,507
8,840
-1,389
9,653
1,403
34 Allocation of special drawing rights
35 Discrepancy
36 Due to seasonal adjustments
37 Statistical discrepancy in recorded data before seasonal
adjustment
0
-9,240
0
18,366
0
63,526
0
1,475
-6,473
0
19,072
2,007
0
-8,849
3,995
0
8,451
166
0
-386
-6,059
63,526
7,948
17,066
-12,844
8,285
1,012
-i2,5n
-5,875
MEMO
Changes in official assets
U.S. officii reserve assets (increase, - )
Foreign official assets in United States excluding line 25
(increase, +)
40 Change in Organization of Petroleum Exporting Countries
official assets in United States (part of line 22)
38
39
-25,293
-2,158
1,739
-1,092
-353
1,014
40,225
8,343
30,722
13,589
19,199
5,619
-3,475
3,007
-2,9%
10,738
2,163
-1,699
575
-3,162
-4,298
1. Seasonal factors not calculated for lines 6, 10, 12-16, 18-20, 22-34, and
38-40.
2. Data are on an international accounts (IA) basis. The data differ from the
Census basis data, shown in table 3.11, for reasons of coverage and timing.
Military exports are excluded from merchandise trade data and are included in
line 6.
3. Reporting banks include all kinds of depository institutions besides commer-
3,878
-3,912
cial banks, as well as some brokers and dealers.
4. Associated primarily 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.
SOURCE. Survey of Current Business (U.S. Department of Commerce).
A54
3.11
International Statistics • April 1992
U.S. FOREIGN TRADE 1
Millions of dollars; exports, F . A . S . value; imports, Customs value; monthly data seasonally adjusted
1991
Item
1989
1990
1991
June
July
Aug.
Sept.
Oct.
Nov/
Dec. p
34,975
35,227
34,380
35,348
37,114
36,939
36,129
1 Exports of domestic and foreign
merchandise, excluding grant-aid
shipments
363,812
393,592
421,851
2 General imports, including merchandise
for immediate consumption plus
entries into bonded warehouses
473,211
495,311
488,055
38,764
41,176
40,910
42,282
43,434
41,109
42,065
-66,205
-3,789
-5,949
-6,530
-6,934
-6,320
-4,171
-5,936
-109,399
3 Trade balance
-101,718
1. The Census basis data differ from merchandise trade data shown in table
3.10, U.S. International Transactions Summary, because of coverage and timing.
On the export side, the largest difference 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, this table includes
imports of gold, ship purchases, imports of electricity from Canada, and other
transactions; military payments are excluded and shown separately in table 3.10,
3.12
as indicated above. Since Jan. 1, 1987 census data have been released forty-five
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. Components may not sum to totals because of
rounding.
SOURCE. FT900, Summary of U.S. Export and Import Merchandise Trade
(U.S. Department of Commerce, Bureau of the Census).
U.S. RESERVE ASSETS
Millions of dollars, end of period
1991
Type
1 Total
2 Gold stock, including Exchange
Stabilization Fund 1
3 Special drawing rights
4 Reserve position in International
Monetary Fund 2
5 Foreign currencies 4
1988
1989
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan."
47,802
74,609
83,316
74,816
73,514
74,731
74,508
74,651
77,719
75,868
11,057
9,637
11,059
9,951
11,058
10,989
11,062
10,360
11,062
10,479
11,062
10,722
11,059
10,710
11,058
10,942
11,057
11,240
11,058
10,980
9,745
17,363
9,048
44,551
9,076
52,193
8,730
44,664
8,726
43,247
9,094
43,853
9,065
43,674
8,943
43,708
9,488
45,934
9,113
44,717
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. Special drawing rights are valued according to a techique adopted by the
International Monetary Fund (IMF) in July 1974. Values are based on a weighted
average of exchange rates for the currencies of member countries. From July 1974
through December 1980, 16 currencies were used; since January 1981, 5 curren-
3.13
1992
1990
cies have been used. U.S. SDR holdings and reserve positions in the IMF also
have been valued on this basis since 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 net transactions in SDRs.
4. Valued at current market exchange rates.
FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS 1
Millions of dollars, end of period
1991
Assets
1988
1989
July
1 Deposits
Assets held in custody
2 U.S. Treasury securities2
3 Earmarked gold3
Aug.
Sept.
Oct.
Nov.
Dec.
Jan."
347
589
369
314
256
384
223
346
968
321
232,547
13,636
224,911
13,456
278,499
13,387
274,514
13,330
279,394
13,330
279,013
13,330
280,249
13,326
285,905
13,307
281,107
13,303
293,958
13,303
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 at face value.
1992
1990
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; it is not
included in the gold stock of the United States.
Summary Statistics
3.14
FOREIGN BRANCHES OF U.S. BANKS
A55
Balance Sheet Data 1
Millions of dollars, end of period
1991
Assets
1988
1989
1990
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
All foreign countries
505,595
545,366
556,925
533,017
529,313
528,077
547,359
546,570
550,777
549,177
2 Claims on United States
3 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
11 Other assets
169,111
129,856
14,918
24,337
299,728
107,179
96,932
17,163
78,454
36,756
198,835
157,092
17,042
24,701
300,575
113,810
90,703
16,456
79,606
45,956
188,496
148,837
13,296
26,363
312,449
135,003
72,602
17,555
87,289
55,980
181,135
142,222
12,011
26,902
294,421
115,420
75,1%
17,223
86,582
57,461
174,802
137,159
11,100
26,543
294,826
112,205
77,711
18,416
86,494
59,685
169,061
130,169
12,447
26,445
2%,855
112,916
76,393
19,110
88,436
62,161
177,572
137,036
13,692
26,844
300,229
114,845
77,293
18,930
89,161
69,558
176,959
136,570
13,432
26,957
299,915
108,269
80,060
18,685
92,901
69,6%
177,828
137,165
13,543
27,120
304,049
107,180
84,980
18,940
92,949
68,900
176,270
137,478
12,884
25,908
303,934
111,729
81,970
18,652
91,583
68,973
12 Total payable in U.S. dollars
357,573
382,498
379,479
373,441
365,008
359,316
368,149
365,223
365,143
363,910
n 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
22 Other assets
163,456
126,929
14,167
22,360
177,685
80,736
54,884
12,131
29,934
16,432
191,184
152,294
16,386
22,504
169,690
82,949
48,396
10,961
27,384
21,624
180,174
142,962
12,513
24,699
174,451
95,298
36,440
12,298
30,415
24,854
174,775
138,262
11,502
25,011
171,752
84,318
43,578
12,479
31,377
26,914
168,353
132,883
10,605
24,865
169,494
79,112
45,589
13,565
31,228
27,161
163,593
126,746
11,973
24,874
167,039
79,317
41,761
14,160
31,801
28,684
171,393
133,450
13,109
24,834
166,9%
80,179
40,656
13,609
32,552
29,760
170,615
132,929
12,904
24,782
164,543
75,649
41,132
13,889
33,873
30,065
171,701
133,984
12,668
25,049
165,490
75,823
42,808
13,671
33,188
27,952
169,631
133,445
12,025
24,161
167,010
78,114
41,635
13,685
33,576
27,269
1 Total, all currencies
United Kingdom
23 Total, all currencies
156,835
161,947
184,818
165,534
161,869
162,879
172,113
172,795
174,648
175,599
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
33 Other assets
40,089
34,243
1,123
4,723
106,388
35,625
36,765
4,019
29,979
10,358
39,212
35,847
1,058
2,307
107,657
37,728
36,159
3,293
30,477
15,078
45,560
42,413
792
2,355
115,536
46,367
31,604
3,860
33,705
23,722
37,574
34,534
711
2,329
103,608
38,333
31,019
3,584
30,672
24,352
32,475
29,241
860
2,374
103,067
36,588
31,866
3,676
30,937
26,327
31,315
28,189
816
2,310
103,935
38,382
30,168
3,717
31,668
27,629
34,409
31,205
997
2,207
105,699
39,077
31,658
3,502
31,462
32,005
32,615
29,021
1,502
2,092
108,397
36,757
33,375
3,492
34,773
31,783
32,531
28,901
1,259
2,371
111,160
36,474
36,709
3,512
34,465
30,957
35,257
31,931
1,267
2,059
109,692
35,735
36,394
3,306
34,257
30,650
34 Total payable in U.S. dollars
103,503
103,208
116,762
106,536
101,040
100,966
105,243
103,439
103,591
105,974
38,012
33,252
964
3,796
60,472
28,474
18,494
2,840
36,404
34,329
843
1,232
59,062
29,872
16,579
2,371
41,259
39,609
334
1,316
63,701
37,142
13,135
3,143
34,726
32,790
555
1,381
58,565
30,108
14,983
3,082
28,870
26,608
680
1,582
56,127
30,279
12,534
3,083
31,772
29,673
727
1,372
56,354
30,840
12,485
2,899
10,240
10,281
10,392
10,231
10,130
5,019
7,742
11,802
13,245
15,%9
17,117
29,995
27,404
1,378
1,213
57,155
28,655
13,269
2,%9
12,262
16,289
30,054
27,689
894
1,471
59,037
29,047
15,480
2,848
11,662
14,500
32,418
30,370
822
1,226
58,791
28,667
15,219
2,853
10,664
29,352
27,085
759
1,508
57,861
29,111
15,723
3,032
9,995
13,827
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
44 Other assets
12,052
14,765
Bahamas and Caymans
45 Total, all currencies
170,639
176,006
162,316
169,194
170,044
166,333
170,219
170,529
170,846
168,295
46 Claims on United States
47 Parent bank
48 Other banks in United States
49 Nonbanks
50 Claims on foreigners
51 Other branches of parent bank
52 Banks
53 Public borrowers
54 Nonbank foreigners
55 Other assets
105,320
73,409
13,145
18,766
58,393
17,954
28,268
5,830
6,341
6,926
124,205
87,882
15,071
21,252
44,168
11,309
22,611
5,217
5,031
7,633
112,989
77,873
11,869
23,247
41,356
13,416
16,310
5,807
5,823
7,971
115,128
80,%3
10,718
23,447
45,346
12,886
20,917
5,916
5,627
8,720
114,870
81,974
9,683
23,213
46,6%
10,880
21,836
7,136
6,844
8,478
111,787
77,566
11,119
23,102
46,318
10,774
21,113
7,394
7,037
8,228
116,263
80,890
12,063
23,310
45,640
10,645
20,535
7,149
7,311
8,316
117,782
83,286
11,028
23,468
43,662
9,086
20,300
7,435
6,841
9,085
118,164
83,348
11,457
23,359
44,177
10,268
19,865
7,363
6,681
8,505
115,213
81,489
10,907
22,817
45,229
11,098
20,174
7,161
6,7%
7,853
56 Total payable in U.S. dollars
163,518
170,780
158,390
165,290
166,115
162,260
166,287
166,598
166,582
163,740
1. Since June 1984, 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.
A56
International Statistics • April 1992
3.14—Continued
1991
1988
1989
1990
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
All foreign countries
57 Total, all currencies
505,595
545,366
556,925
533,017
529,313
528,077
547,359
546,570
550,777
549,177
58 Negotiable certificates of deposit (CDs) ..
59 To United States
60
Parent bank
61
Other banks in United States
62
Nonbanks
28,511
185,577
114,720
14,737
56,120
23,500
197,239
138,412
11,704
47,123
18,060
189,412
138,748
7,463
43,201
16,503
188,025
128,352
11,789
47,884
19,692
182,270
127,284
10,090
44,896
18,796
178,249
122,179
10,085
45,985
17,579
188,448
131,998
11,843
44,607
18,928
186,246
130,092
10,356
45,798
18,334
188,686
131,383*
12,892*
44,411
16,284
198,163
136,473
13,040
48,650
63 To foreigners
64
Other branches of parent bank
65
Banks
66
Official institutions
67
Nonbank foreigners
68 Other liabilities
270,923
111,267
72,842
15,183
71,631
20,584
296,850
119,591
76,452
16,750
84,057
27,777
311,668
139,113
58,986
14,791
98,778
37,785
290,277
116,253
57,236
20,394
96,394
38,212
287,887
112,521
59,975
17,245
98,146
39,464
290,257
112,845
62,329
18,030
97,053
40,775
295,645
114,101
62,665r
19,420
99,459*
45,687
295,282
108,534
68,286*
17,247
101,215*
46,114
298,152
109,085
67,945*
19,394
101,728*
45,605
288,488
111,960
63,097
15,596
97,835
46,242
69 Total payable in U.S. dollars
367,483
396,613
383,522
372,871
363,869
360,397
367,771
366,449
369,515*
370,530
70 Negotiable CDs
71 To United States
72
Parent bank
73
Other banks in United States
74
Nonbanks
24,045
173,190
107,150
13,468
52,572
19,619
187,286
132,563
10,519
44,204
14,094
175,654
130,510
6,052
39,092
12,620
175,882
121,118
10,647
44,117
14,538
170,610
120,558
8,815
41,237
14,183
167,207
115,999
8,449
42,759
13,180
176,709
125,496
10,368
40,845
14,157
174,274
123,399
9,011
41,864
13,813
176,254
124,625*
11,436*
40,193
11,909
185,328
129,711
11,487
44,130
75 To foreigners
76
Other branches of parent bank
77
Banks
78
Official institutions
79
Nonbank foreigners
80 Other liabilities
160,766
84,021
28,493
8,224
40,028
9,482
176,460
87,636
30,537
9,873
48,414
13,248
179,002
98,128
20,251
7,921
52,702
14,772
170,334
84,952
21,142
13,972
50,268
14,035
163,451
79,909
21,470
11,563
50,509
15,270
164,188
79,277
23,330
11,496
50,085
14,819
163,551
79,679
21,239*
12,591
50,042r
14,331
161,850
75,243
25,653*
10,565
50,389*
16,168
164,275
76,224
24,501*
13,375
50,175*
15,173*
158,920
76,528
24,156
10,304
47,932
14,373
United Kingdom
81 Total, all currencies
156,835
161,947
184,818
165,534
161,869
162,879
172,113
172,795
174,648
175,599
82 Negotiable CDs
83 To United States
84
Parent bank
85
Other banks in United States
86
Nonbanks
24,528
36,784
27,849
2,037
6,898
20,056
36,036
29,726
1,256
5,054
14,256
39,928
31,806
1,505
6,617
12,196
31,084
23,238
1,092
6,754
14,889
26,599
19,545
1,490
5,564
14,148
27,915
20,367
1,662
5,886
12,941
31,534
23,707
1,724
6,103
14,145
29,137
21,080
2,053
6,004
13,506
30,560
22,629
1,934
5,997
11,333
37,720
29,834
1,438
6,448
87 To foreigners
88
Other branches of parent bank
89
Banks
90
Official institutions
91
Nonbank foreigners
92 Other liabilities
86,026
26,812
30,609
7,873
20,732
9,497
92,307
27,397
29,780
8,551
26,579
13,548
108,531
36,709
25,126
8,361
38,335
22,103
99,756
29,371
22,994
13,062
34,329
22,498
97,263
28,591
24,310
10,010
34,352
23,118
96,773
27,457
25,131
10,722
33,463
24,043
98,572
29,898
23,525r
12,071
33,078r
29,066
100,267
26,879
28,254*
10,045
35,089*
29,246
102,299
26,977
27,959*
12,628
34,735*
28,283
98,167
30,054
25,541
9,670
32,902
28,379
105,907
108,178
116,094
104,523
99,756
100,131
104,303
103,238
104,433
108,755
94 Negotiable CDs
95 To United States
96
Parent bank
97
Other banks in United States
98
Nonbanks
22,063
32,588
26,404
1,752
4,432
18,143
33,056
28,812
1,065
3,179
12,710
34,697
29,955
1,156
3,586
10,833
27,106
21,848
892
4,366
12,758
22,355
17,924
1,233
3,198
12,337
23,788
18,949
1,216
3,623
11,249
27,272
22,228
1,259
3,785
12,397
24,394
19,391
1,704
3,299
12,042
25,517
20,923
1,481
3,113
10,076
33,003
28,260
1,177
3,566
99 To foreigners
100
Other branches of parent bank
101
Banks
102 Official institutions
103
Nonbank foreigners
104 Other liabilities
47,083
18,561
13,407
4,348
10,767
4,173
50,517
18,384
12,244
5,454
14,435
6,462
60,014
25,957
9,488
4,692
19,877
8,673
58,068
20,452
8,758
10,032
18,826
8,516
55,433
19,509
9,678
7,519
18,727
9,210
54,848
18,480
9,731
7,929
18,708
9,158
56,829
20,878
8,401r
9,149
18,401r
8,953
56,639
18,319
12,040*
7,050
19,230*
9,808
57,527
18,678
10,542*
9,995
18,312*
9,347
56,626
20,800
11,069
7,156
17,601
9,050
93 Total payable in U.S. dollars
Bahamas and Caymans
105 Total, all currencies
170,639
176,006
162,316
169,194
170,044
166,333
170,219
170,529
170,846
168,295
106 Negotiable CDs
107 To United States
108 Parent bank
109 Other banks in United States
110
Nonbanks
953
122,332
62,894
11,494
47,944
678
124,859
75,188
8,883
40,788
646
114,738
74,941
4,526
35,271
696
126,182
76,980
9,449
39,753
904
127,083
81,541
7,484
38,058
963
123,117
77,159
7,036
38,922
1,055
128,217
82,142
8,841
37,234
981
130,223
84,853
7,070
38,300
1,034
129,781
83,057*
9,728*
36,9%
1,173
129,914
79,436
10,011
40,467
45,161
23,686
8,336
1,074
12,065
2,193
47,382
23,414
8,823
1,097
14,048
3,087
44,444
24,715
5,588
622
13,519
2,488
40,180
21,701
5,734
931
11,814
2,136
39,624
21,765
4,877
661
12,321
2,433
39,994
21,846
5,558
655
11,935
2,259
38,868
20,767
5,431
647
12,023
2,079
36,861
19,675
5,218
666
11,302
2,464
37,857
19,555
5,984
646
11,672
2,174
35,127
17,315
5,662
572
11,578
2,081
162,950
171,250
157,132
164,906
165,708
162,040
165,556
166,226
166,157
163,572
111 To foreigners
112 Other branches of parent bank
113
Banks
114
Official institutions
115
Nonbank foreigners
116 Other liabilities
117 Total payable in U.S. dollars
Summary Statistics
3.15
A57
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1991
Item
1 Total1
By type
2 Liabilities reported by banks in the United States
3 U.S. Treasury bills and certificates 3
U.S. Treasury bonds and notes
4 Marketable
5 Nonmarketable 4
6 U.S. securities other than U.S. Treasury securities
7
8
9
10
11
12
By area
Western Europe 1
Canada
Latin America and Caribbean
Asia
Africa
Other countries
1989
1990
July
Aug.
Sept.
Oct.
Nov/
Dec."
312,477
344,529
347,118
350,476
356,885
350,518
358,025r
366,009
363,954
36,496
76,985
39,880
79,424
41,232
84,526
43,417
86,071
47,374
88,5%
38,402
90,394
41,526r
94,428
42,701
92,855
37,959
92,692
179,269
568
19,159
202,487
4,491
18,247
197,808
4,672
18,880
197,104
4,704
19,180
196,815
4,734
19,366
197,645
4,765
19,312
198,157
4,7%
19,118
205,354
4,827
20,272
207,983
4,858
20,462
132,849
9,482
9,313
153,338
1,030
6,469
167,191
8,671
21,184
138,0%
1,434
7,955
164,009
9,229
29,415
134,310
1,259
8,892
166,349
9,260
30,064
134,806
1,183
8,812
170,467
10,001
31,377
134,826
1,202
9,010
165,061
9,608
31,911
133,082
1,558
9,2%
170,423r
9,121
32,604r
134,667r
1,519
9,689
173,708
9,428
33,993
137,513
1,383
9,982
169,287
7,310
36,057
139,610
2,091
9,597
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
3.16
June
bonds and notes payable in foreign currencies; zero coupon bonds are included at
current value.
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.
SOURCE. 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 and on the 1984 benchmark survey of foreign portfolio
investment in the United States.
LIABILITIES TO A N D CLAIMS ON FOREIGNERS Reported by Banks in the United States
Payable in Foreign Currencies 1
Millions of dollars, end of period
1990
1987
Item
1 Banks' own liabilities
2 Banks' own claims
5 Claims of banks' domestic customers 2
55,438
51,271
18,861
32,410
551
1. Data on claims exclude foreign currencies held by U.S. monetary authorities.
1988
74,980
68,983
25,100
43,884
364
1991
1989
67,835
65,127
20,491
44,636
3,507
Dec.
Mar.
June
Sept/
70,477
66,7%
29,672
37,124
6,309
64,929
66,919
27,586
39,333
5,569
59,487
61,619
27,792
33,827
1,646
63,189
64,988
30,230
34,758
2,348
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.
A58
3.17
International Statistics • April 1992
LIABILITIES TO FOREIGNERS
Payable in U.S. dollars
Reported by Banks in the United States 1
Millions of dollars, end of period
1991
Holder and type of liability
1989
1990
1991
June
July
Aug.
Sept.
Oct/
Nov/
Dec. p
1 All foreigners
736,878
759,634
753,451
729,866
726,807
733,321
735,950
750,205
758,065
753,451
2 Banks' own liabilities
3 Demand deposits
4 Time deposits
5 Other.
6 Own foreign offices4
577,498
22,032
168,780
67,823
318,864
577,229
21,723
168,017
65,822
321,667
572,848
20,518
158,736
66,179
327,415
550,103
18,797
148,572
65,3%
317,338
548,063
17,929
148,667
66,823
314,644
552,670
18,423
146,395
72,595
315,257
554,557
19,841
149,708
67,646
317,362
565,347
17,637
154,552
73,223
319,935
575,503
21,630
154,302
75,763
323,808
572,848
20,518
158,736
66,179
327,415
159,380
91,100
182,405
96,7%
180,603
110,731
179,763
100,876
178,744
101,809
180,651
105,325
181,393
107,019
184,858
112,280
182,562
110,938
180,603
110,731
19,526
48,754
17,578
68,031
18,656
51,216
18,040
60,848
17,351
59,584
16,508
58,818
16,820
57,554
17,076
55,502
17,225
54,399
18,656
51,216
7 Banks' custody liabilities5
8 U.S. Treasury bills and certificates 6
9 Other negotiable and readily transferable
instruments
10 Other
11 Nonmonetary inteniational and regional
organizations
4,894
5,918
8,150
5,932
6,236
6,945
6,915
7,689
8,719
8,150
12 Banks' own liabilities
13 Demand deposits
14 Time deposits
15 O t h e r .
3,279
96
927
2,255
4,540
36
1,050
3,455
5,9%
43
2,214
3,739
3,878
26
2,025
1,827
4,127
44
1,742
2,341
4,971
28
1,550
3,393
5,410
36
2,307
3,067
5,988
28
2,490
3,470
6,826
24
2,392
4,410
5,9%
43
2,214
3,739
16 Banks' custody liabilities5
17 U.S. Treasury bills and certificates 6
18 Other negotiable and readily transferable
instruments
19 Other
1,616
197
1,378
364
2,154
1,730
2,054
1,287
2,109
1,404
1,974
1,269
1,505
1,032
1,701
1,246
1,893
1,530
2,154
1,730
1,417
2
1,014
0
424
0
767
0
705
0
705
0
473
0
455
0
363
0
424
0
20 Official institutions9
113,481
119,303
130,651
125,758
129,488
135,970
128,796
135,954
135,556
130,651
21 Banks' own liabilities
22 Demand deposits
23 Time deposits
24 O t h e r .
31,108
2,196
10,495
18,417
34,910
1,924
14,359
18,628
33,974
2,840
16,024
15,110
36,864
1,542
14,671
20,651
38,886
1,396
14,970
22,520
43,156
1,683
14,747
26,726
33,854
1,645
13,237
18,972
37,559
1,307
14,544
21,708
38,860
1,621
13,145
24,094
33,974
2,840
16,024
15,110
25 Banks' custody liabilities5
26 U.S. Treasury bills and certificates 6
27 Other negotiable and readily transferable
instruments
28 Other
82,373
76,985
84,393
79,424
%,677
92,692
88,894
84,526
90,602
86,071
92,814
88,5%
94,942
90,394
98,395
94,428
%,6%
92,855
%,677
92,692
5,028
361
4,766
203
3,879
106
4,101
267
4,324
207
4,047
171
4,128
420
3,832
135
3,627
214
3,879
106
10
29 Banks
515,275
540,805
520,022
506,023
498,681
500,544
509,557
515,933
521,576
520,022
30 Banks' own liabilities
31 Unaffiliated foreign banks
32
Demand deposits
33
Time deposits
34
Other.
35 Own foreign offices4
454,273
135,409
10,279
90,557
34,573
318,864
458,470
136,802
10,053
88,541
38,208
457,337
129,922
8,618
82,901
38,403
432,258
114,920
8,584
69,941
36,395
427,648
113,004
8,423
70,185
34,3%
429,732
114,475
8,252
70,608
35,615
439,924
122,562
8,959
74,861
38,742
321,667
327,415
317,338
314,644
315,257
317,362
447,667
127,732
8,164
78,038
41,530
319,935
455,844
132,036
11,396
80,170
40,470
323,808
457,337
129,922
8,618
82,901
38,403
327,415
61,002
9,367
82,335
10,669
62,685
7,471
73,765
8,664
71,033
7,970
70,812
8,242
69,633
8,161
68,266
8,363
65,732
7,855
62,685
7,471
5,124
46,510
5,341
66,325
5,808
49,406
5,928
59,173
5,472
57,591
5,316
57,254
5,819
55,653
6,083
53,820
5,948
51,929
5,808
49,406
36 Banks' custody liabilities5
37 U.S. Treasury bills and certificates 6
38 Other negotiable and readily transferable
instruments 7
39 Other
103,228
93,608
94,628
92,153
92,402
89,862
90,682
90,629
92,214
94,628
41 Banks' own liabilities
42 Demand deposits
43 Time deposits
44 O t h e r .
88,839
9,460
66,801
12,577
79,309
9,711
64,067
5,530
75,541
9,017
57,597
8,927
77,103
8,645
61,935
6,523
77,402
8,066
61,770
7,566
74,811
8,460
59,490
6,861
75,369
9,201
59,303
6,865
74,133
8,138
59,480
6,515
73,973
8,589
58,595
6,789
75,541
9,017
57,597
8,927
45 Banks' custody liabilities5
46
U.S. Treasury bills and certificates 6
47 Other negotiable and readily transferable
instruments 7
48 Other
14,389
4,551
14,299
6,339
19,087
8,838
15,050
6,399
15,000
6,364
15,051
7,218
15,313
7,432
16,4%
8,243
18,241
8,698
19,087
8,838
7,958
1,880
6,457
1,503
8,545
1,704
7,244
1,408
6,850
1,786
6,440
1,393
6,400
1,481
6,706
1,547
7,287
2,256
8,545
1,704
7,203
7,073
7,456
8,186
7,073
7,062
7,542
7,5%
7,137
7,456
40 Other foreigners
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. For U.S. banks, includes amounts due to own foreign branches and foreign
subsidiaries consolidated in "Consolidated Report of Condition" filed with bank
regulatory agencies. For agencies, branches, and majority-owned subsidiaries of
foreign banks, consists principally of 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
1991
1989
Area and country
1990
1991
June
2 Foreign countries
3 Europe
4
5 Belgium-Luxembourg
6
Denmark
7
8 France
9
Germany
10
11 Italy
1?
Netherlands
13 Norway
14
15
16 Sweden
17 Switzerland
18 Turkey
19 United Kingdom
Yugoslavia
70
71
Other Western Europe"
77
U.S.S.R
Other Eastern Europe 12
23
24 Canada
Aug.
Sept.
Oct.
Nov."
Dec. p
759,634
753,451
729,866
726,807
733,321
735,950
750,205"
758,065
753,451
731,984
753,716
745,301
723,934
720,571
726,376
729,035
742,516r
749,346
745,301
237,501
1,233
10,648
1,415
570
26,903
7,578
1,028
16,169
6,613
2,401
2,418
4,364
1,491
34,4%
1,818
102,362
1,474
13,563
350
608
254,452
1,229
12,382
1,399
602
30,946
7,485
934
17,735
5,350
2,357
2,958
7,544
1,837
36,690
1,169
109,555
928
11,689
119
1,545
249,112
1,205
13,241
937
1,341
31,817
8,638
763
13,543
7,132
1,888
2,183
11,390
2,222
37,286
1,598
100,622
622
8,974
241
3,469
236,543
1,067
11,849
1,370
732
26,382
7,822
791
14,347
6,100
1,926
2,392
9,392
745
36,089
1,806
98,311
925
11,393
178
2,925
228,782
1,234
12,292
1,197
1,222
26,747
7,056
817
13,883
6,069
1,653
2,279
10,4%
858
34,808
1,720
90,059
1,016
12,423
75
2,878
235,018
%1
11,168
1,065
1,170
26,580
7,037
851
12,507
5,651
1,279
2,313
10,3%
1,424
35,%7
1,780
95,359
955
15,176
136
3,243
237,000
1,109
13,912
1,038
618
27,476
7,500
944
12,507
6,310
1,444
2,391
10,834
1,435
38,341
1,538
95,628
854
9,640
117
3,364
246,806r
1,232
13,495
912
938
30,500"
7,891r
840
12,274
6,546
1,192
2,431
12,280"
l,217 r
36,733
1,493
99,472r
807
12,964"
178
3,411
251,266
1,313
14,471
1,143
1,080
31,104
8,032
890
13,288
6,124
1,489
2,223
11,148
1,105
36,711
1,845
99,841
544
15,257
236
3,422
249,112
1,205
13,241
937
1,341
31,817
8,638
763
13,543
7,132
1,888
2,183
11,390
2,222
37,286
1,598
100,622
622
8,974
241
3,469
18,865
20,349
21,696
23,900
22,519
23,919
24,038
24,685
23,131
21,6%
337,729
6,978
93,977
3,520
6,074
162,590
3,162
4,735
9
1,236
1,613
235
20,357
5,732
4,748
1,287
2,439
12,249
6,788
340,519
6,858
%,577
3,120
6,068
163,040
3,092
4,641
8
1,226
1,585
213
20,937
5,565
4,374
1,305
2,507
12,348
7,055
340,561"
7,190
99,858"
3,191
5,998"
160,555"
3,348
4,823
4
1,237
1,541
202
19,979
5,499"
4,450
1,234"
2,442"
12,237
6,773"
345,163
7,452
100,339
3,295
5,811
163,459
3,388
4,797
12
1,236
1,589
201
20,515
5,924
4,563
1,240
2,373
12,171
6,798
343,653
7,758
99,713
3,178
5,924
162,428
3,284
4,662
2
1,232
1,593
231
19,927
5,593
4,694
1,249
2,111
13,151
6,923
736,878
1
July
75 Latin America and Caribbean
76
Argentina
77
78
Bermuda
79
Brazil
30
British West Indies
31
Chile
3?
Colombia
33
Cuba
34
35 Guatemala
36
37
Netherlands Antilles
38
39
Panama
40
Peru
41
Venezuela
4?
43
Other
311,028
7,304
99,341
2,884
6,351
138,309
3,212
4,653
10
1,391
1,312
209
15,423
6,310
4,362
1,984
2,284
9,482
6,206
332,997
7,365
107,386
2,822
5,834
147,321
3,145
4,492
11
1,379
1,541
257
16,650
7,357
4,574
1,294
2,520
12,271
6,779
343,653
7,758
99,713
3,178
5,924
162,428
3,284
4,662
2
1,232
1,593
231
19,927
5,593
4,694
1,249
2,111
13,151
6,923
334,668
7,504
%,900
2,919
5,747
157,229
3,229
4,446
7
1,286
1,663
273
19,552
5,934
4,670
1,340
2,571
12,581
6,816
339,202
7,097
98,011
3,087
5,837
161,253
3,305
4,419
2
1,267
1,641
219
20,008
5,828
4,435
1,333
2,450
12,170
6,840
44
156,201
136,844
120,471
120,750
122,194
121,689
118,830
120,443"
120,039
120,471
1,773
19,588
12,416
780
1,281
1,243
81,184
3,215
1,766
2,093
13,370
17,491
2,421
11,246
12,754
1,233
1,238
2,767
67,076
2,287
1,585
1,443
15,829
16,%5
2,599
11,514
14,373
2,418
1,464
2,014
47,112
2,538
2,449
2,252
15,731
16,007
2,412
9,878
14,581
1,959
1,612
2,355
51,449
2,211
2,408
11,220
14,719
2,122
1,191
2,376
50,144
2,444
2,247
11,579
14,206
2,373
1,232
2,697
48,875
2,272
2,198
9,425
14,468
2,474
1,065
2,848
48,089
2,107
2,494
12,443"
13,943"
2,504"
1,230
2,115
47,068"
2,169"
2,599
11,514
14,373
2,418
1,464
2,014
47,112
2,538
1,587
1,537
1,465
1,647
1,926
2,386
13,371
16,949
2,368
15,750
15,915
2,650
14,835
17,258
3,348
15,310
15,851
3,113"
15,534"
15,904
2,783
11,675
13,812
2,613
1,414
2,108
46,004
2,555
2,139
3,581
16,302
15,053
3,824
686
78
206
86
1,121
1,648
4,630
1,425
104
228
53
1,110
1,710
5,141
1,619
79
228
31
1,082
2,102
4,188
1,017
122
241
45
1,105
1,6^8
3,929
999
81
221
24
960
1,644
4,017
957
91
137
58
992
1,782
4,483
1,125
82
242
37
1,145
1,852
4,558
1,241
78
207
42
1,182
1,808
4,465
1,060
93
173
32
1,280
1,827
5,141
1,619
79
228
31
1,082
2,102
4,564
3,867
697
4,444
3,807
637
5,228
4,464
764
3,885
3,103
781
3,945
3,173
772
4,004
3,149
855
4,165
3,231
934
5,463
4,445
1,018
5,282
4,116
1,166
5,228
4,464
764
4,894
3,947
684
263
5,918
4,390
1,048
479
8,150
5,658
1,177
1,315
5,932
4,040
1,410
482
6,236
4,356
1,273
607
6,945
4,371
1,531
1,043
6,915
4,877
1,094
944
7,689"
5,435"
1,242"
1,012
8,719
6,178
1,366
1,175
8,150
5,658
1,177
1,315
45
46
47
48
49
50
51
57
53
54
55
56
57
58
59
60
61
62
63
China
Mainland
Taiwan
Hong Kong
India
Thailand
Middle-East oil-exporting countries
Other
3
South Africa
Oil-exporting countries 14
Other
64 Other countries
65
66
All other
67 Nonmonetary international and regional
68
69
70
International
Latin American regional
Other regional 16
11. Includes the Bank for International Settlements and Eastern European
countries not listed in line 23.
12. Comprises Bulgaria, Czechoslovakia, Hungary, Poland, and Romania.
13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
2,449
2,252
15,731
16,007
14. Comprises Algeria, Gabon, Libya, and Nigeria.
15. Excludes "holdings of dollars" of the International Monetary Fund.
16. Asian, African, Middle Eastern, and European regional organizations,
except the Bank for International Settlements, which is included in "Other
Western Europe."
A59
A60
3.18
International Statistics • April 1992
BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States 1
Payable in U.S. Dollars
Millions of dollars, end of period
1991
Area and country
1989
1990
1991
June
July
Aug.
Sept.
Oct.
Nov.*
Dec. p
1 Total
534,492
511,543
511,917
505,424
497,814
502,559
498,985
511,091r
513,540
511,917
2 Foreign countries
530,630
506,750
506,153
501,195
495,415
500,079
496,416
509,310*
510,250
506,153
119,025
415
6,478
582
1,027
16,146
2,865
788
6,662
1,904
609
376
1,930
1,773
6,141
1,071
65,527
1,329
1,302
1,179
921
113,093
362
5,473
497
1,047
14,468
3,343
727
6,052
1,761
782
292
2,668
2,094
4,202
1,405
65,151
1,142
597
530
499
114,225
327
6,157
686
1,912
15,091
3,369
553
8,242
2,508
669
344
1,844
2,315
4,495
1,053
60,522
824
787
1,930
597
99,037
303
6,736
896
668
14,302
2,751
654
6,339
2,132
701
378
2,056
1,993
2,969
1,593
51,369
932
734
911
617
97,767
269
5,924
898
642
14,300
2,682
619
5,911
2,234
661
260
2,582
1,858
3,627
1,458
50,775
877
832
772
586
98,575
185
6,534
945
771
13,827
3,106
495
5,931
2,101
599
308
1,995
1,633
3,609
1,407
51,625
820
1,024
1,015
645
103,395
297
7,175
670
908
14,504
2,672
473
6,541
1,955
679
266
2,333
1,896
4,048
1,382
54,305
802
773
1,157
559
103,756*
374
7,677*
609*
1,195*
13,080
2,107*
487
6,370
2,139*
682
301
2,410*
1,842
4,195*
1,192
55,490*
803
714
1,358
731
107,780
325
6,962
656
1,378
14,813
2,869
555
6,362
2,190
776
358
2,480
2,347
4,469
1,147
55,967
848
1,001
1,669
608
114,225
327
6,157
686
1,912
15,091
3,369
553
8,242
2,508
669
344
1,844
2,315
4,495
1,053
60,522
824
787
1,930
597
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
22 U.S.S.R
23 Other Eastern Europe 3
15,451
16,091
15,207
17,446
16,719
14,495
14,734
16,076*
15,796
15,207
25 Latin America and Caribbean
26 Argentina
27
Bahamas
28 Bermuda
29 Brazil
30 British West Indies
31 Chile
32 Colombia
33 Cuba
34 Ecuador
35 Guatemala
36 Jamaica
37 Mexico
38 Netherlands Antilles
39 Panama
40 Peru
41 Uruguay
42 Venezuela
43 Other
24 Canada
230,438
9,270
77,921
1,315
23,749
68,749
4,353
2,784
1
1,688
197
297
23,376
1,921
1,740
771
929
9,652
1,726
231,506
6,967
76,525
4,056
17,995
88,565
3,271
2,587
0
1,387
191
238
14,851
7,998
1,471
663
786
2,571
1,384
244,280
5,877
87,094
2,188
11,845
106,016
2,802
2,424
0
1,053
222
158
16,662
1,286
1,554
739
599
2,514
1,247
248,841
6,127
78,023
3,893
15,248
115,284
2,917
2,349
0
1,344
203
187
15,408
1,639
1,429
726
590
2,222
1,252
246,051
5,944
81,294
5,804
12,350
110,628
2,832
2,202
0
1,263
190
144
15,447
1,563
1,501
712
577
2,405
1,195
249,305
5,749
78,414
11,773
12,332
111,119
2,779
2,368
0
1,238
182
150
15,279
1,540
1,490
728
571
2,394
1,199
250,313
5,749
80,217
6,847
11,880
112,589
2,732
2,431
0
1,115
185
150
16,427
3,606
1,489
712
577
2,443
1,164
255,080*
5,735*
85,940*
4,298*
11,499*
116,401*
2,721
2,541
0
1,095
191
162
16,871*
1,247*
1,558
722
555
2,406*
1,138*
251,745
5,778
87,145
4,095
11,897
110,735
2,831
2,571
0
1,090
191
161
17,400
1,122
1,652
724
550
2,634
1,169
244,280
5,877
87,094
2,188
11,845
106,016
2,802
2,424
0
1,053
222
158
16,662
1,286
1,554
739
599
2,514
1,247
44
157,474
138,722
125,220
128,210
127,560
130,220
120,353
127,019*
127,214
125,220
634
2,776
11,128
621
651
813
111,300
5,323
1,344
1,140
10,149
11,594
620
1,952
10,648
655
933
774
90,699
5,766
1,247
1,573
10,749
13,106
747
2,088
9,698
440
952
853
84,782
6,025
1,910
1,625
8,284
7,816
992
2,019
9,312
432
891
851
85,708
5,924
1,506
1,977
10,468
8,131
659
1,696
9,051
409
874
818
88,183
5,597
1,647
1,975
9,771
6,880
575
1,522
9,154
425
858
919
90,604
5,383
1,682
1,870
9,741
7,487
621
1,460
9,467
449
852
945
80,498
5,140
1,633
1,934
10,439
6,915
597
1,577
10,203
481
841*
994*
84,839*
5,340*
1,916
1,826
9,973
8,432
698
1,583
10,171
449
872
907
85,559
5,773
1,971
1,798
9,957
7,476
747
2,088
9,698
440
952
853
84,782
6,025
1,910
1,625
8,284
7,816
57 Africa
58 Egypt
59 Morocco
60 South Africa
61 Zaire
62 Oil-exporting countries 5
63 Other
5,890
502
559
1,628
16
1,648
1,537
5,445
380
513
1,525
16
1,486
1,525
4,919
286
575
1,231
4
1,298
1,525
5,429
315
590
1,626
12
1,336
1,550
5,417
324
597
1,627
9
1,285
1,575
5,344
315
576
1,610
9
1,273
1,561
5,272
312
579
1,498
8
1,270
1,605
5,264
294
589
1,494
9
1,260
1,618
5,234
343
583
1,493
7
1,320
1,488
4,919
286
575
1,231
4
1,298
1,525
64 Other countries
65 Australia
66 All other
2,354
1,781
573
1,892
1,413
479
2,302
1,665
637
2,233
1,621
611
1,901
1,384
517
2,140
1,464
676
2,349
1,526
823
2,115*
1,503
612*
2,481
1,718
763
2,302
1,665
637
67 Nonmonetary international and regional
organizations6
3,862
4,793
5,764
4,229
2,399
2,480
2,569
1,781
3,290
5,764
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
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 and Eastern European
countries not listed in line 23.
3. Comprises Bulgaria, Czechoslovakia, Hungary, Poland, and Romania.
4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
5. Comprises Algeria, Gabon, Libya, and Nigeria.
6. Excludes the Bank for International Settlements, which is included in
"Other Western Europe."
Nonbank-Reported
3.19
Data
BANKS' OWN A N D DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the
United States 1
Payable in U.S. Dollars
Millions of dollars, end of period
1991
Type of claim
1989
1991
1990
June
July
Aug.
497,814
35,174
305,470
115,041
69,302
45,739
42,129
502,559
35,423
301,649
116,553
70,730
45,823
48,934
Sept.
1 Total
593,087
579,044r
2 Banks' own claims on foreigners
3 Foreign public borrowers
4 Own foreign offices
5 Unaffiliated foreign banks
6
Deposits
Other
7
8 All other foreigners
534,492
60,511
296,011
134,885
78,185
56,700
43,085
511,543
41,900
304,315
117,272
65,253
52,019
48,056
58,594
13,019
67,501r
14,375
67,296
19,390
67,339
19,512
30,983
41,333
35,147
35,054
14,592
11,792r
12,758
12,773
12,899
13,628
10,420
8,665
45,744
44,554
9 Claims of banks' domestic customers 3 ...
11
Negotiable and readily transferable
12
Outstanding collections and other
13 MEMO: Customer liability on
14 Dollar deposits in banks abroad,
reported by nonbanking business
enterprises in the United States . . . .
505,424
39,460
306,089
115,018
69,130
45,889
44,857
36,026
n.a.
Dec."
40,425
41,717
498,985
35,076
303,948
113,853
68,369
45,484
46,108
511,091
34,878
313,052
119,847
72,493
47,354
43,314
513,540
35,908
312,764
120,234
71,578
48,656
44,634
511,917
35,988
316,917
116,529
69,227
47,302
42,483
37,856
39,761
40,509
n.a.
subsidiaries of head office or 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. For U.S. banks, includes amounts due from own foreign branches and
foreign subsidiaries consolidated in "Consolidated Report of Condition" filed
with bank regulatory agencies. For agencies, branches, and majority-owned
subsidiaries of foreign banks, consists principally of amounts due from head office
or parent foreign bank, and foreign branches, agencies, or wholly owned
3.20
Nov. r
566,324
572,720
511,917
35,988
316,917
116,529
69,227
47,302
42,483
Oct. r
BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States 1
Payable in U.S. Dollars
Millions of dollars, end of period
1990
Maturity, by borrower and area
1987
1988
1991
1989
Dec.
Mar.
June
Sept. r
1
235,130
233,184
238,123
206,903
199,254
199,085
194,820
By borrower
Maturity of one year or less2
3 Foreign public borrowers
4 All other foreigners
5 Maturity of more than one year 2
6 Foreign public borrowers
7 All other foreigners
163,997
25,889
138,108
71,133
38,625
32,507
172,634
26,562
146,071
60,550
35,291
25,259
178,346
23,916
154,430
59,776
36,014
23,762
165,985
19,305
146,680
40,918
22,269
18,649
158,220
21,216
137,004
41,034
22,498
18,536
159,465
18,596
140,869
39,620
20,624
18,996
159,385
17,088
142,297
35,435
17,791
17,644
59,027
5,680
56,535
35,919
2,833
4,003
55,909
6,282
57,991
46,224
3,337
2,891
53,913
5,910
53,003
57,755
3,225
4,541
49,184
5,450
49,782
53,258
3,040
5,272
49,641
5,938
42,660
54,042
3,008
2,931
49,917
7,290
41,121
53,177
2,945
5,016
51,104
5,671
47,260
49,291
2,815
3,244
6,696
2,661
53,817
3,830
1,747
2,381
4,666
1,922
47,547
3,613
2,301
501
4,121
2,353
45,816
4,172
2,630
684
3,859
3,290
25,774
5,165
2,374
456
4,329
3,387
24,961
5,414
2,426
517
4,285
3,820
23,219
5,645
2,456
195
3,819
3,673
19,241
6,095
2,385
222
?.
8
9
10
11
1?
13
14
15
16
17
18
19
By area
Maturity of one year or less
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other 3
Maturity of more than one yean
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other 3
1. Reporting banks include all kinds of depository institutions besides commercial banks, as well as some brokers and dealers.
2. Remaining time to maturity,
3. Includes nonmonetary international and regional organizations.
A61
A62
3.21
International Statistics • April 1992
CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks 1
Billions of dollars, end of period
1989
Area or country
1987
1990
1991
1988
Sept.
Dec.
Mar.
June
Sept.
Dec.
Mar.
June
Sept.
382.4
346.3
346.5
338.8
333.9
321.7
331.5
317.8
325.3"
320.2
335.8'
159.7
10.0
13.7
12.6
7.5
4.1
2.1
5.6
68.8
5.5
29.8
152.7
9.0
10.5
10.3
6.8
2.7
1.8
5.4
66.2
5.0
34.9
146.4
6.9
11.1
10.4
6.8
2.4
2.0
6.1
63.7
5.9
31.0
152.9
6.3
11.7
10.5
7.4
3.1
2.0
7.1
67.2
5.4
32.2
146.6
6.7
10.4
11.2
5.9
3.1
2.1
6.2
64.0
4.8
32.2
139.3
6.2
10.2
11.2
5.4
2.7
2.3
6.3
59.9
5.1
30.1
143.6
6.5
11.1
11.1
4.4
3.8
2.3
5.6
62.6
5.0
31.3
132.1
5.9
10.4
10.6
5.0
3.0
2.2
4.4
60.8
5.9
23.9
129.9"
6.2
9.7
8.8
4.0
3.3
2.0
3.7
62.3"
6.8
23.2
130.1
6.1
10.5
8.3
3.6
3.3
2.5
3.3
59.8
8.2
24.6
134.7
5.8
11.1
9.7
4.5
3.0
2.1
3.9
65.6
5.8
23.2
13 Other developed countries
14 Austria
13 Denmark
16 Finland
17 Greece
18 Norway
19 Portugal
20 Spain
21 Turkey
22 Other Western Europe
23 South Africa
24 Australia
26.4
1.9
1.7
1.2
2.0
2.2
.6
8.0
2.0
1.6
2.9
2.4
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
1.5
1.1
1.1
2.4
1.4
.4
6.9
1.2
1.0
2.1
2.1
20.7
1.5
1.1
1.0
2.5
1.4
.4
7.1
1.2
.7
2.0
1.6
23.0
1.5
1.2
1.1
2.6
1.7
.4
8.2
1.3
1.0
2.0
2.1
22.4
1.5
1.1
.9
2.7
1.4
.8
7.8
1.4
1.1
1.9
1.8
23.0
1.6
1.1
.8
2.8
1.6
.6
8.4
1.6
.7
1.9
2.0
22.6
1.4
1.1
.7
2.7
1.6
.6
8.3
1.7
.9
1.8
1.8
23.1
1.4
.9
1.0
2.5
1.5
.6
9.0
1.7
.8
1.8
1.9
21.1
1.1
1.2
.8
2.4
1.5
.6
7.0
1.9
.9
1.8
2.0
21.7
1.0
.9
.7
2.3
1.4
.5
8.3
1.6
1.0
1.6
2.4
25 OPEC countries 2
26 Ecuador
27 Venezuela
28 Indonesia
29 Middle East countries
30 African countries
17.4
1.9
8.1
1.9
3.6
1.9
16.6
1.7
7.9
1.7
3.4
1.9
16.2
1.5
7.4
2.0
3.5
1.9
17.1
1.3
7.0
2.0
5.0
1.7
15.5
1.2
6.1
2.1
4.3
1.8
15.3
1.1
6.0
2.0
4.4
1.8
14.2
1.1
6.0
2.3
3.1
1.7
12.8
1.0
5.0
2.7
2.5
1.7
17.1
.9
5.1
2.8
6.6
1.6
14.0
.9
5.3
2.6
3.7
1.5
15.6
.8
5.6
2.8
5.0
1.5
31 Non-OPEC developing countries
97.8
85.3
81.2
77.5
68.8
66.7
67.1
65.4
66.3
64.9"
65.2
9.5
24.7
6.9
2.0
23.5
1.1
2.8
9.0
22.4
5.6
2.1
18.8
.8
2.6
7.6
20.9
4.9
1.6
17.2
.6
2.9
6.3
19.0
4.6
1.8
17.7
.6
2.8
5.6
17.5
4.3
1.8
12.8
.5
2.8
5.2
16.7
3.7
1.7
12.6
.5
2.3
5.0
15.4
3.6
1.8
12.8
.5
2.4
5.0
14.4
3.5
1.8
13.0
.5
2.3
4.7
13.9
3.6
1.7
13.7
.5
2.2
4.6
11.6
3.6
1.6
14.3
.5
2.0
4.7
10.5
3.7
1.6
16.1
.4
1.9
.3
8.2
1.9
1.0
5.0
1.5
5.2
.7
.7
.3
3.7
2.1
1.2
6.1
1.6
4.5
1.1
.9
.3
5.0
2.7
.7
6.5
1.7
4.0
1.3
1.0
.3
4.5
3.1
.7
5.9
1.7
4.1
1.3
1.0
.3
3.8
3.5
.6
5.3
1.8
3.7
1.1
1.2
.2
3.6
3.6
.7
5.6
1.8
3.9
1.3
1.1
.2
4.0
3.6
.6
6.2
1.8
3.9
1.5
1.6
.2
3.5
3.3
.5
6.2
1.9
3.8
1.5
1.7
.4
3.6
3.5
.5
6.8
2.0
3.7
1.6
2.1
.6
4.1
3.0
.5
6.9
2.1
3.7
1.7
2.3
.4
4.1
2.8
.5
6.5"
2.3
3.6
1.9
2.3"
1 Total
2 G-10 countries and Switzerland
3 Belgium-Luxembourg
4 France
3 Germany
6 Italy
7 Netherlands
8 Sweden
9 Switzerland
10 United Kingdom
11 Canada
12
32
33
34
35
36
37
38
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other Latin America
39
40
41
42
43
44
43
46
47
Asia
China
Mainland
Taiwan
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia3
48
49
50
51
Africa
Egypt
Morocco
Zaire
Other Africa 3
.6
.9
.0
1.3
.4
.9
.0
1.1
.5
.8
.0
1.0
.4
.9
.0
1.0
.4
.9
.0
.9
.5
.9
.0
.8
.4
.9
.0
.8
.4
.8
.0
1.0
.4
.8
.0
.8
.4
.7
.0
.8
.4
.7
.0
.8
52 Eastern Europe
53
U.S.S.R
54 Yugoslavia
33 Other
3.2
.3
1.8
1.1
3.6
.7
1.8
1.1
3.5
.8
1.7
1.1
3.5
.7
1.6
1.3
3.3
.8
1.4
1.2
2.9
.4
1.4
1.1
2.7
.4
1.3
1.1
2.3
.2
1.2
.9
2.1
.3
1.0
.8
2.1
.4
1.0
.7
1.8
.4
.8
.7
56 OflFshore banking centers
57 Bahamas
58 Bermuda
59 Cayman Islands and other British West Indies
60 Netherlands Antilles
61 Panama4
62
Lebanon
63 Hong Kong
64 Singapore
65 Others 5
54.5
17.3
.6
13.5
1.2
3.7
.1
11.2
7.0
.0
44.2
11.0
.9
12.9
1.0
2.5
.1
9.6
6.1
.0
49.2
11.4
1.3
15.3
1.1
1.5
.1
10.7
7.8
.0
36.6
5.5
1.7
9.0
2.3
1.4
.1
9.7
7.0
.0
43.1
9.2
1.2
10.9
2.6
1.3
.1
9.8
8.0
.0
40.3
8.5
2.5
8.5
2.3
1.4
.1
10.0
7.0
.0
42.6
8.9
4.5
9.3
2.2
1.5
.1
8.7
7.5
.0
42.5
2.8
4.4
11.5
7.9
1.4
.1
7.7
6.6
.0
49.9"
8.1
4.4
14.2"
1.1
1.4
.1
11.6"
8.9
.0
48.2
6.5
4.2
15.1
1.4
1.3
.1
12.4
7.2
.0
51.9
6.1
7.1
14.0
3.5
1.3
.1
12.1"
7.7
.0
66 Miscellaneous and unallocated6
23.2
22.6
28.7
30.3
33.3
34.5
38.1
39.8
36.5"
39.6
44.6
-.
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).
Since June 1984, 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.
2. 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).
3. Excludes Liberia.
4. Includes Canal Zone beginning December 1979.
5. Foreign branch claims only.
6. Includes New Zealand, Liberia, and international and regional organizations.
Nonbank-Reported
3.22
Data
A63
LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the
United States 1
Millions of dollars, end of period
1991
1990
Type and area or country
1987
28,302
1
1988
32,952
1989
38,776
June
Sept.
Dec.
Mar.
June
Sept. p
39,831
45,165
42,928
40,753
39,311
40,459
38,529
4,399
36,635
4,119
35,291
4,019
36,057
4,402
?.Payable in dollars
3 Payable in foreign currencies
22,785
5,517
27,335
5,617
33,985
4,791
35,351
4,480
40,034
5,131
By type
4 Financial liabilities
5 Payable in dollars
6 Payable in foreign currencies
12,424
8,643
3,781
14,507
10,608
3,900
17,891
14,047
3,844
19,025
15,663
3,363
19,898
16,059
3,839
17,979
14,731
3,247
17,104
14,182
2,922
16,767
13,872
2,895
17,603
14,673
2,930
15,878
7,305
8,573
14,142
1,737
18,445
6,505
11,940
16,727
1,717
20,885
8,070
12,815
19,938
947
20,806
7,256
13,550
19,688
1,117
25,267
10,960
14,306
23,974
1,292
24,949
10,494
14,456
23,798
1,152
23,650
8,865
14,784
22,453
1,197
22,544
8,697
13,846
21,420
1,124
22,856
9,067
13,789
21,384
1,472
8,320
213
382
551
866
558
5,557
9,962
289
359
699
880
1,033
6,533
11,672
340
258
464
941
541
8,830
11,802
332
165
547
928
552
8,832
11,251
350
463
606
942
628
7,632
9,813
344
695
622
990
576
5,976
9,187
285
627
561
945
577
5,551
9,244
297
535
664
917
535
5,706
9,739
347
3S4
654
943
510
6,370
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
360
388
610
306
309
223
272
287
305
70
71
2.2
73
24
75
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,189
318
0
25
778
13
0
839
184
0
0
645
1
0
1,357
157
17
0
724
6
0
2,774
312
0
0
1,920
4
0
3,560
395
0
0
2,548
4
0
3,400
371
0
0
2,407
5
4
3,636
392
0
0
2,674
6
4
3,308
375
12
0
2,319
6
4
3,518
337
0
1
2,578
6
4
77
28
29
Asia
Japan
Middle East oil-exporting countries
2,451
2,042
8
3,312
2,563
3
4,151
3,299
2
4,085
2,883
5
4,296
3,161
4
4,132
2,930
5
4,005
2,932
1
3,918
2,865
4
4,037
2,802
226
30
31
Africa
Oil-exporting countries
4
1
2
0
2
0
3
1
2
0
2
0
2
0
9
7
3
2
100
4
100
55
479
409
2
2
1
5,516
132
426
909
423
559
1,599
7,319
158
455
1,699
587
417
2,079
9,071
175
877
1,392
710
693
2,620
8,652
291
1,049
990
606
665
2,450
10,039
245
1,270
1,051
699
746
2,839
10,310
275
1,218
1,270
844
775
2,792
9,877
263
1,216
1,389
731
661
2,852
8,848
254
1,246
1,044
750
586
2,336
9,280
1%
999
913
792
560
3,2%
1,301
1,217
1,124
1,179
1,263
1,251
1,231
1,186
1,018
864
18
168
46
19
189
162
1,090
49
286
95
34
217
114
1,224
41
308
100
27
323
164
1,321
22
412
109
29
315
129
1,690
18
371
129
42
592
165
1,671
12
538
145
30
475
130
1,621
14
495
218
36
346
126
1,631
6
505
180
50
364
121
1,512
14
450
209
46
290
101
6,565
2,578
1,964
6,915
3,094
1,385
7,550
2,914
1,632
7,365
3,197
1,285
9,533
3,356
2,728
9,471
3,639
2,016
8,669
3,413
1,569
8,847
3,383
1,699
8,943
3,359
1,812
574
135
576
202
886
339
900
287
1,334
610
841
422
655
225
594
224
835
356
1,057
1,328
1,030
1,390
1,408
1,406
1,5%
1,436
1,268
32
33
34
35
36
37
38
39
All other 4
Commercial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
40
Canada
41
42
43
44
45
46
47
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
48
49
50
Asia
Japan
Middle East oil-exporting countries 2 ' 5
51
52
Africa
Oil-exporting countries
53
All other 4
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.
A64
International Statistics • April 1992
3.23
CLAIMS ON UNAFFILIATED FOREIGNERS
United States 1
Reported by Nonbanking Business Enterprises in the
Millions of dollars, end of period
1990
Type, and area or country
1987
1988
1991
1989
June
Sept.
Dec.
Mar.
June
Sept. p
1 Total
30,964
33,805
33,080
33,098
32,239
34,780
35,272
36,946
38,361
2 Payable in dollars
3 Payable in foreign currencies
28,502
2,462
31,425
2,381
30,742
2,338
30,765
2,333
29,836
2,402
32,354
2,426
33,068
2,204
V
34,948
1,997
36,154
2,207
By type
4 Financial claims
5 Deposits
6
Payable in dollars
7
Payable in foreign currencies
8 Other financial claims
9
Payable in dollars
10
Payable in foreign currencies
20,363
14,894
13,765
1,128
5,470
4,656
814
21,640
15,643
14,544
1,099
5,997
5,220
777
19,235
12,336
11,409
927
6,899
6,145
754
19,438
11,615
10,533
1,082
7,823
7,090
733
17,758
11,810
10,616
1,193
5,949
5,296
652
19,444
13,331
12,318
1,012
6,114
5,247
866
19,392
12,835
11,893
942
6,557
5,861
696
20,687
12,300
11,595
705
8,387
7,699
688
22,392
15,522
14,712
810
6,870
6,260
610
11 Commercial claims
12 Trade receivables
13 Advance payments and other claims
14 Payable in dollars
15 Payable in foreign currencies
10,600
9,535
1,065
10,081
519
12,166
11,091
1,075
11,660
505
13,845
12,221
1,624
13,188
657
13,660
11,951
1,708
13,142
518
14,480
12,702
1,778
13,924
556
15,336
13,458
1,878
14,788
548
15,879
13,691
2,189
15,314
565
16,259
13,963
2,296
15,654
605
15,969
13,345
2,624
15,182
787
9,531
7
332
102
350
65
8,467
10,278
18
203
120
348
217
9,039
8,401
28
153
87
303
91
7,496
10,780
126
126
76
339
131
9,757
8,924
27
145
79
327
163
7,956
9,363
76
358
302
330
293
7,760
10,524
85
193
249
443
358
8,981
11,756
74
255
233
494
367
10,184
12,928
75
257
438
492
527
10,886
16
17
18
19
20
21
22
By area or country
Financial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
23
Canada
2,844
2,325
1,904
2,036
1,989
2,887
1,850
1,986
2,066
24
25
26
27
28
29
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
7,012
1,994
7
63
4,433
172
19
8,160
1,846
19
47
5,763
151
21
8,020
1,890
7
224
5,486
94
20
5,998
1,499
3
84
4,003
164
20
6,107
1,443
4
70
4,191
158
23
6,091
1,594
3
68
4,021
177
25
6,119
1,847
6
68
3,769
179
28
5,849
1,031
4
127
4,307
161
29
5,969
1,356
19
124
4,100
173
32
31
32
33
Asia
Japan
Middle East oil-exporting countries
879
605
8
623
354
5
590
213
8
534
185
6
531
207
9
860
523
8
568
246
11
757
409
4
1,069
721
3
34
35
Africa
Oil-exporting countries
65
7
106
10
140
12
62
8
49
7
37
0
62
3
64
1
61
1
All other 4
33
148
180
28
158
206
268
275
299
4,180
178
650
562
133
185
1,073
5,181
189
672
669
212
344
1,324
6,207
242
963
696
479
313
1,575
6,076
209
924
670
480
234
1,582
6,495
188
1,206
641
491
300
1,673
7,032
212
1,240
805
552
301
1,774
7,181
226
1,292
873
604
392
1,669
7,545
220
1,408
957
756
2%
1,822
6,973
186
1,328
855
651
259
1,867
36
37
38
39
40
41
42
43
Commercial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
44
Canada
936
983
1,087
1,150
1,148
1,070
1,212
1,240
1,232
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,930
19
170
226
26
368
283
2,241
36
230
299
22
461
227
2,176
58
323
293
36
507
147
2,207
17
284
233
47
576
223
2,402
25
340
251
35
650
224
2,333
14
246
320
40
656
189
2,314
15
231
309
49
653
181
2,433
16
245
297
43
711
195
2,575
8
338
391
37
739
196
52
53
54
Asia
Japan
Middle East oil-exporting countries
2,915
1,158
450
2,993
946
453
3,561
1,197
518
3,473
1,097
418
3,631
1,221
407
4,049
1,396
459
4,306
1,778
507
4,159
1,604
510
4,216
1,752
497
55
56
Africa
Oil-exporting countries
401
144
435
122
422
108
387
97
371
72
488
67
394
68
428
59
518
79
57
All other 4
238
333
392
366
433
364
471
453
455
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
3.24
A65
FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
1991
1991
Transaction and area or country
1990
1991
Jan.Dec.
June
July
Aug.
Sept.
Oct.
Nov. 1
Dec. p
12,919
13,659
17,201
16,791
20,515
19,594
14,713
17,446
U.S. corporate securities
STOCKS
173,293
188,419
Foreign purchases
2 Foreign sales
1
210,694
199,598
210,694
199,598
17,356
16,122
16,462
15,304
17,934
16,192
3 Net purchases, or sales (—)
-15,126
11,095
11,095
1,234
1,158
1,742
-740
410
921
-2,733
4 Foreign countries
-15,197
10,527
10,527
1,190
1,135
1,606
-850
365
884
-2,716
-8,479
-1,234
-367
-397
-2,866
-2,980
886
-1,330
-2,435
-3,477
-2,891
-63
-298
94
18
-63
-228
-139
-310
3,809
2,177
-126
4,263
1,181
153
158
94
18
-63
-228
-139
-310
3,809
2,177
-126
4,263
1,181
153
158
710
170
45
60
346
-148
383
287
-460
96
74
9
165
5
-41
-8
47
42
-130
159
160
272
110
-15
6
423
753
39
21
-209
%
831
439
315
67
-33
-96
4
61
-567
-95
62
38
-48
-501
16
25
-402
210
135
-7
-125
-452
-21
12
6
-93
-216
385
366
-6
267
156
20
-215
-310
-50
22
-42
-508
182
694
-197
39
735
158
14
-91
-1,899
-125
44
-52
-7
-1,653
131
-280
-35
-665
-429
7
25
71
568
568
44
23
136
110
45
37
-17
118,764
102,047
152,507
125,001
152,507
125,001
12,427
8,754
9,994
7,681
14,989
10,812
14,492
12,315
12,844
10,558
15,842
13,059
14,977
12,351
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
18 Nonmonetary international and
regional organizations
BONDS
2
19 Foreign purchases
20 Foreign sales
21 Net purchases, or sales (—)
16,717
27,506
27,506
3,673
2,313
4,177
2,177
2,286
2,783
2,626
22 Foreign countries
17,187
27,637
27,637
3,735
2,340
4,274
2,216
2,349
2,682
2,583
73
74
25
26
77
28
79
30
31
37
33
34
35
10,079
373
-377
172
284
10,383
1,906
4,291
76
1,083
727
%
-344
13,498
854
1,577
482
661
9,301
1,340
2,449
2,185
8,237
5,730
56
-128
13,498
854
1,577
482
661
9,301
1,340
2,449
2,185
8,237
5,730
56
-128
2,167
2
-120
130
327
1,744
68
538
160
898
685
-1
-96
921
15
-1
-1
9
629
34
378
430
558
285
-1
20
1,727
-26
106
47
116
1,405
-40
172
449
2,015
1,818
4
-53
-111
93
156
-18
-52
384
-155
130
350
2,027
1,149
-2
-23
1,873
-25
213
44
-64
2,029
86
-365
182
526
237
12
35
1,091
110
274
91
-449
714
51
110
313
1,164
874
13
-60
968
75
113
13
162
90
114
627
253
543
149
11
67
-471
-131
-131
-62
-27
-97
-39
-63
101
43
-1,538
13,121
14,659
787
29,925
29,138
-5,686
10,941
16,627
-1,769
26,2%
28,065
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Japan
Africa
Other countries
36 Nonmonetary international and
regional organizations
Foreign securities
37 Stocks, net purchases, or sales ( - ) 3
38 Foreign purchases
39 Foreign sales
40 Bonds, net purchases, or sales ( - )
41 Foreign purchases
42 Foreign sales
-9,205
122,641
131,846
-22,412
314,645
337,057
43 Net purchases, or sales (—), of stocks and bonds . . . .
-31,617
44 Foreign countries
-28,943
-8,443
-7,502
-8,854
-3,828
-137
-180
-2,673
45
46
47
48
49
50
Europe
Canada
Latin America and Caribbean
Africa
Other countries
51 Nonmonetary international and
regional organizations
-3,590
10,053
13,643
-1,945
19,918
21,863
-3,155
10,174
13,329
-807
22,041
22,848
-3,521
9,586
13,107
-2,168
22,186
24,354
-50,754
-50,754
-5,536
-3,962
-5,689
-3,297
—7,120r
-751
-7,455
-50,466
-50,466
-5,816
-4,476
-5,794
-3,477
—6,753r
-1,186
-7,825
-38,064
-7,608
993
-7,043
-8
1,265
-38,064
-7,608
993
-7,043
-8
1,265
-3,428
-1,011
-26
-1,172
-198
19
-5,035
278
130
105
8
38
-4,769
-1,009
108
-305
-7
188
-2,666
-352
454
-1,153
2
238
-5,691 r
-1,619
549
-197
1
204
-4,546
675
1,136
1,502
-41
88
-8,334
36
-470
388
159
3%
-288
-288
280
514
105
180
435
370
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-
-2,159
9,913
12,072
-1,138
23,442
24,580
-2,370 r
11,292
13,662r
-4,750 r
33,201
37,951r
-34,912
119,646
154,558
-15,842
324,642
340,484
-34,912
119,646
154,558
-15,842
324,642
340,484
-367
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.
A66
3.25
International Statistics • April 1992
MARKETABLE U.S. TREASURY BONDS A N D NOTES
Foreign Transactions
Millions of dollars
1991
Country or area
1990
1991
1991
Jan.Dec.
June
July
Aug.
Sept.
Oct.
Nov.
Dec. p
Transactions, net purchases or sales ( - ) during period1
1 Estimated total2
18,927
22,546
22,546
-5,740
725
1,356
-3,862
414
5,449r
4,671
2 Foreign countries 2
18,764
22,318
22,318
-5,271
407
722
-2,804
-171
5,355
3,912
18,455
10
5,880
1,077
1,152
112
-1,260
11,463
13
-4,627
9,654
568
-4,725
-3,735
-662
1,005
5,649
11,540
13
-2,745
9,654
568
-4,725
-3,735
-662
1,005
5,649
11,540
13
-2,745
-4,184
-104
-1,458
-727
31
207
-1,249
-886
3
-114
-1,082
-109
684
-997
-299
-218
-398
258
-3
395
1,554
71
-360
-372
-239
292
388
1,774
0
-118
464
-190
195
-426
3
-184
-32
1,090
8
78
228
1
326
549
46
195
-311
-578
0
-838
5,033
183
707
-25
-74
l,105r
212
2,938r
-13
-441
2,900
42
-139
-888
582
-778
2,351
1,720
10
-1,840
14,734
33
3,943
10,757
-10,952
-14,785
313
842
11,552
10
5,329
6,213
3,467
-4,054
689
-299
11,552
10
5,329
6,213
3,467
-4,054
689
-299
161
20
-233
374
-879
1,422
104
-358
1,669
7
242
1,420
-491
45
7
-91
1,436
-20
-2,010
3,466
-2,115
-364
27
-62
-1,076
-2
-1,883
809
-2,067
-3,625
10
-213
-2,086
20
-14
-2,092
3,467
4,111
39
-981
-3,840
7
-523
-3,324
3,700
503
-26
929
1,086
122
-1,054
2,018
869
-1,352
318
579
163
287
-2
228
-308
-72
228
-308
-72
-469
3
-9
318
168
150
634
654
-146
-1,058
-1,211
152
585
287
72
94r
95r
-133
759
836
-156
18,764
23,218
-4,453
22,318
5,496
16,822
22,318
5,4%
16,822
-5,271
-5,832
560
407
-704
1,111
722
-289
1,011
-2,804
830
-3,634
-171
512
-683
5,355
7,197r
-1,842 r
3,912
2,629
1,283
-387
0
-6,822
239
-6,822
239
-505
0
-643
0
-3,731
0
-795
0
313
0
%
0
-163
219
3 Europe 2
4 Belgium-Luxembourg
5 Germany 2
6 Netherlands
7 Sweden
8 Switzerland2
9 United Kingdom
10 Other Western Europe
11 Eastern Europe
12 Canada
13
14
15
16
17
18
19
20
Latin America and Caribbean
Venezuela
Other Latin America and Caribbean
Netherlands Antilles
Asia
Japan
Africa
All other
21 Nonmonetary international and regional organizations
22 International
23 Latin American regional
MEMO
24 Foreign countries 2
25 Official institutions
26 Other foreign
Oil-exporting countries
27 Middle East 3
28
1. Estimated official and private transactions in marketable U.S. Treasury
securities having an original maturity of more than one 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, denominated in foreign currencies, publicly
issued to private foreign residents.
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
3.26
A67
DISCOUNT RATES OF FOREIGN CENTRAL BANKS
Percent per year
Country
Country
Percent
8.0
8.5
7.50
9.5
9.6
France*
Month
effective
Dec.
Dec.
Feb.
Dec.
Dec.
1991
1991
1992
1991
1991
Percent
Germany, Fed. Rep. o f . . .
Italy
1. Since Feb. 1981, the rate has been that at which the Bank of France
discounts Treasury bills for seven to ten days.
2. Minimum lending rate suspended as of Aug. 20, 1981.
NOTE. Rates shown are mainly those at which the central bank either discounts
3.27
Rate on Feb. 29, 1992
Rate on Feb. 29, 1992
Rate on Feb. 29, 1992
Country
8.0
12.0
4.5
8.5
Month
effective
Dec.
Nov.
Dec.
Dec.
1991
1991
1991
1991
Switzerland
United Kingdom2
Percent
Month
effective
10.50
7.0
July 1990
Aug. 1991
or makes advances against eligible commercial paper or government securities for
commercial 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.
FOREIGN SHORT-TERM INTEREST RATES
Averages of daily figures, percent per year
1992
1991
Type or country
1
->
3
4
5
6
7
8 Italy
9
10
1989
1990
1991
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
9.16
13.87
12.20
7.04
6.83
8.16
14.73
13.00
8.41
8.71
5.86
11.47
9.07
9.15
8.01
5.65
10.85
8.73
9.23
7.80
5.50
10.24
8.59
9.16
7.90
5.34
10.38
8.29
9.28
8.09
4.96
10.44
7.75
9.33
7.89
4.48
10.73
7.50
9.48
7.99
4.06
10.60
7.23
9.45
7.55
4.05
10.33
7.42
9.51
7.28
7.28
9.27
12.44
8.65
5.39
8.57
10.20
12.11
9.70
7.75
9.19
9.49
12.04
9.30
7.33
9.27
9.46
11.86
9.25
7.31
9.21
9.30
11.63
9.01
6.70
9.27
9.20
11.44
9.22
6.41
9.32
9.41
11.66
9.39
6.22
9.59
9.97
12.46
9.61
6.02
9.45
9.86
12.00
9.41
5.18
9.52
9.93
12.17
9.50
5.19
NOTE. Rates are for three-month interbank loans, with the following exceptions: Canada, finance company paper; Belgium, three-month Treasury bills; and
Japan, CD rate.
Aug.
A68
3.28
International Statistics • April 1992
FOREIGN EXCHANGE RATES 1
Currency units per dollar
1991
Country/currency
1989
1990
Sept.
1
2
3
4
5
6
7
8
9
10
Australia/dollar^
Austria/schilling
Belgium/franc
Canada/dollar
China, P.R./yuan
Denmark/krone
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma
11
12
13
14
15
16
17
18
19
20
Hong Kong/dollar
India/rupee
Ireland/pound
Italy/lira
Japan/yen
Malaysia/ringgit
Netherlands/guilder
New Zealand/dollar2
Norway/krone
Portugal/escudo
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
1992
1991
Oct.
Nov.
Dec.
Jan.
Feb.
79.186
13.236
39.409
1.1842
3.7673
7.3210
4.2963
6.3802
1.8808
162.60
78.069
11.331
33.424
1.1668
4.7921
6.1899
3.8300
5.4467
1.6166
158.59
77.872
11.686
34.195
1.1460
5.3337
6.4038
4.0521
5.6468
1.6610
182.63
79.369
11.910
34.878
1.1370
5.3869
6.5367
4.1241
5.7621
1.6933
188.07
79.251
11.887
34.787
1.1279
5.3917
6.5246
4.1155
5.7583
1.6893
188.50
78.660
11.408
33.391
1.1302
5.3994
6.2947
4.1953
5.5391
1.6208
183.68
77.122
11.003
32.198
1.1467
5.4232
6.0831
4.2447
5.3406
1.5630
179.52
74.756
11.108
32.501
1.1571
5.4618
6.1257
4.2971
5.3858
1.5788
182.42
75.178
11.391
33.307
1.1825
5.4776
6.2763
4.4230
5.5088
1.6186
187.13
7.8008
16.213
141.80
1,372.28
138.07
2.7079
2.1219
59.561
6.9131
157.53
7.7899
17.492
165.76
1,198.27
145.00
2.7057
1.8215
59.619
6.2541
142.70
7.7712
22.712
158.26
1,241.28
134.59
2.7503
1.8720
57.832
6.4912
144.77
7.7524
25.834
157.87
1,266.25
134.30
2.7577
1.9084
57.989
6.6266
145.64
7.7542
25.797
158.21
1,263.20
130.77
2.7469
1.9039
56.306
6.6136
145.41
7.7591
25.802
164.75
1,221.04
129.63
2.7412
1.8269
56.352
6.3643
141.43
7.7738
25.818
170.46
1,182.21
128.04
2.7417
1.7618
55.256
6.1558
138.90
7.7612
25.863
168.73
1,189.76
125.46
2.6891
1.7780
54.194
6.2044
136.92
7.7582
25.992
164.87
1,215.92
127.70
2.6012
1.8218
54.177
6.3472
139.47
1.9511
2.6214
674.29
118.44
35.947
6.4559
1.6369
26.407
25.725
163.82
1.8134
2.5885
710.64
101.%
40.078
5.9231
1.3901
26.918
25.609
178.41
1.7283
2.7633
736.73
104.01
41.200
6.0521
1.4356
26.759
25.528
176.74
1.7002
2.8316
744.18
106.28
41.935
6.1652
1.4803
26.559
25.617
172.65
1.6940
2.8314
753.54
106.54
42.179
6.1552
1.4781
26.406
25.397
172.31
1.6709
2.7916
757.44
102.56
42.374
5.9246
1.4348
25.975
25.497
177.96
1.6453
2.7665
761.68
99.70
42.523
5.7158
1.3855
25.759
25.431
182.72
1.6337
2.7831
767.09
100.05
42.665
5.7461
1.4039
25.150
25.328
180.90
1.6361
2.8156
769.93
101.73
42.879
5.8764
1.4561
25.049
25.463
177.78
98.60
89.09
89.84
91.18
90.69
87.98
85.65
86.09
88.04
MEMO
31 United States/dollar3
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) monthly statistical
release. For ordering address, see inside front cover.
2. Value in U.S. cents.
3. Index of weighted-average exchange value of U.S. dollar against the
currencies of ten industrial countries. The weight for each of the ten countries is
the 1972-76 average world trade of that country divided by the average world
trade of all ten countries combined. Series revised as of August 1978 (see Federal
Reserve Bulletin, vol. 64 (August 1978), p. 700).
69
Guide to Statistical Releases and Special Tables
STATISTICAL RELEASES—List Published Semiannually, with Latest B U L L E T I N Reference
Issue
December 1991
Anticipated schedule of release dates for periodic releases
SPECIAL TABLES—Quarterly
Page
A86
Data Published Irregularly, with Latest BULLETIN Reference
Title and Date
Issue
Page
Assets and liabilities of commercial banks
December 31, 1990
March 31, 1991
June 30, 1991
September 30, 1991
May
August
November
February
1991
1991
1991
1992
All
A72
A70
A70
Terms of lending at commercial
February 1991
May 1991
August 1991
November 1991
August
October
December
March
1991
1991
1991
1992
A78
A72
A70
A70
Assets and liabilities of U.S. branches and agencies of foreign banks
December 31, 1990
March 31, 1991
June 30, 1991
September 30, 1991
June
November
December
February
1991
1991
1991
1992
A72
A76
A74
A80
Pro forma balance sheet and income statements for priced service
June 30, 1990
March 31, 1991
June 30, 1991
September 30, 1991
October
August
November
January
1990
1991
1991
1992
A72
A82
A80
A70
December 1991
A79
banks
Assets and liabilities of life insurance
June 30, 1991
operations
companies
70
Index to Statistical Tables
References are to pages A3-A68 although the prefix "A" is omitted in this index
ACCEPTANCES, bankers (See Bankers acceptances)
Agricultural loans, commercial banks, 20, 21
Assets and liabilities (See also Foreigners)
Banks, by classes, 19—21
Domestic finance companies, 34
Federal Reserve Banks, 11
Financial institutions, 26
Foreign banks, U.S. branches and agencies, 22
Automobiles
Consumer installment credit, 37, 38
Production, 47, 48
BANKERS acceptances, 10, 23, 24
Bankers balances, 19—21. (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 33
Rates, 24
Branch banks, 22, 55
Business activity, nonfinancial, 44
Business expenditures on new plant and equipment, 33
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 46
Capital accounts
Banks, by classes, 19
Federal Reserve Banks, 11
Central banks, discount rates, 67
Certificates of deposit, 24
Commercial and industrial loans
Commercial banks, 17, 20
Weekly reporting banks, 20-22
Commercial banks
Assets and liabilities, 19-21
Commercial and industrial loans, 17, 19, 20, 21, 22
Consumer loans held, by type and terms, 37, 38
Loans sold outright, 20
Nondeposit funds, 18
Real estate mortgages held, by holder and property, 36
Time and savings deposits, 4
Commercial paper, 23, 24, 34
Condition statements (See Assets and liabilities)
Construction, 44, 49
Consumer installment credit, 37, 38
Consumer prices, 44, 46
Consumption expenditures, 52, 53
Corporations
Nonfinancial, assets and liabilities, 33
Profits and their distribution, 33
Security issues, 32, 65
Cost of living (See Consumer prices)
Credit unions, 37
Currency and coin, 19
Currency in circulation, 5, 14
Customer credit, stock market, 25
DEBITS to deposit accounts, 16
Debt (See specific types of debt or securities)
Demand deposits
Banks, by classes, 19-22
Demand deposits—Continued
Ownership by individuals, partnerships, and corporations,
22
Turnover, 16
Depository institutions
Reserve requirements, 9
Reserves and related items, 4, 5, 6, 13
Deposits (See also specific types)
Banks, by classes, 4, 19-21, 22
Federal Reserve Banks, 5,11
Turnover, 16
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, 33
EMPLOYMENT, 45
Eurodollars, 24
FARM mortgage loans, 36
Federal agency obligations, 5, 10, 11, 12, 29, 30
Federal credit agencies, -31
Federal finance
Debt subject to statutory limitation, and types and ownership
of gross debt, 28
Receipts and outlays, 26, 27
Treasury financing of surplus, or deficit, 26
Treasury operating balance, 26
Federal Financing Bank, 26, 31
Federal funds, 7, 18, 20, 21, 22, 24, 26
Federal Home Loan Banks, 31
Federal Home Loan Mortgage Corporation, 31, 35, 36
Federal Housing Administration, 31, 35, 36
Federal Land Banks, 36
Federal National Mortgage Association, 31, 35, 36
Federal Reserve Banks
Condition statement, 11
Discount rates (See Interest rates)
U.S. government securities held, 5, 11, 12, 28
Federal Reserve credit, 5, 6, 11, 12
Federal Reserve notes, 11
Federally sponsored credit agencies, 31
Finance companies
Assets and liabilities, 34
Business credit, 34
Loans, 37, 38
Paper, 23, 24
Financial institutions
Loans to, 20, 21, 22
Selected assets and liabilities, 26
Float, 51
Flow of funds, 39,41,42, 43
Foreign banks, assets and liabilities of U.S. branches and
agencies, 21, 22
Foreign currency operations, 11
Foreign deposits in U.S. banks, 5,11, 20, 21
Foreign exchange rates, 68
Foreign trade, 54
71
Foreigners
Claims on, 55, 57, 60, 61, 62, 64
Liabilities to, 21, 54, 55, 57, 58, 63, 65, 66
GOLD
Certificate account, 11
Stock, 5, 54
Government National Mortgage Association, 31, 35, 36
Gross national product, 51
HOUSING, new and existing units, 49
INCOME, personal and national, 44, 51, 52
Industrial production, 44, 47
Installment loans, 37, 38
Insurance companies, 28, 36
Interest rates
Bonds, 24
Consumer installment credit, 38
Federal Reserve Banks, 8
Foreign central banks and foreign countries, 67
Money and capital markets, 24
Mortgages, 35
Prime rate, 23
International capital transactions of United States, 53-67
International organizations, 57, 58, 60, 63, 64
Inventories, 51
Investment companies, issues and assets, 33
Investments (See also specific types)
Banks, by classes, 19, 20, 21, 22, 26
Commercial banks, 4, 17, 19-21
Federal Reserve Banks, 11, 12
Financial institutions, 36
LABOR force, 45
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Banks, by classes, 19—21
Commercial banks, 4, 17, 19-21
Federal Reserve Banks, 5, 6, 8, 11, 12
Financial institutions, 26, 36
Insured or guaranteed by United States, 35, 36
MANUFACTURING
Capacity utilization, 46
Production, 46, 48
Margin requirements, 25
Member banks (See also Depository institutions)
Federal funds and repurchase agreements, 7
Reserve requirements, 9
Mining production, 48
Mobile homes shipped, 49
Monetary and credit aggregates, 4, 13
Money and capital market rates, 24
Money stock measures and components, 4, 14
Mortgages (See Real estate loans)
Mutual funds, 33
Mutual savings banks (See Thrift institutions)
NATIONAL defense outlays, 27
National income, 51
OPEN market transactions, 10
PERSONAL income, 52
Prices
Consumer and producer, 44, 50
Stock market, 25
Prime rate, 23
Producer prices, 44, 50
Production, 44,47
Profits, corporate, 33
REAL estate loans
Banks, by classes, 17, 20, 21, 36
Financial institutions, 26
Terms, yields, and activity, 35
Type of holder and property mortgaged, 36
Repurchase agreements, 7, 18, 20, 21, 22
Reserve requirements, 9
Reserves
Commercial banks, 19
Depository institutions, 4, 5, 6, 13
Federal Reserve Banks, 11
U.S. reserve assets, 54
Residential mortgage loans, 35
Retail credit and retail sales, 37, 38, 44
SAVING
Flow of funds, 39,41, 42, 43
National income accounts, 51
Savings and loan associations, 36, 37, 39. (See also SAIF-insured
institutions)
Savings Association Insurance Funds (SAIF) insured institutions, 26
Savings banks, 26, 36, 37
Savings deposits (See Time and savings deposits)
Securities (See also specific types)
Federal and federally sponsored credit agencies, 31
Foreign transactions, 65
New issues, 32
Prices, 25
Special drawing rights, 5, 11, 53, 54
State and local governments
Deposits, 20, 21
Holdings of U.S. government securities, 28
New security issues, 32
Ownership of securities issued by, 20, 21
Rates on securities, 24
Stock market, selected statistics, 25
Stocks (See also Securities)
New issues, 32
Prices, 25
Student Loan Marketing Association, 31
TAX
federal,
27 also Credit unions and Savings and
Thriftreceipts,
institutions,
4. (See
loan associations)
Time and savings deposits, 4, 14, 18, 19, 20, 21, 22
Trade, foreign, 54
Treasury cash, Treasury currency, 5
Treasury deposits, 5, 11, 26
Treasury operating balance, 26
UNEMPLOYMENT, 45
U.S. government balances
Commercial bank holdings, 19, 20, 21
Treasury deposits at Reserve Banks, 5, 11, 26
U.S. government securities
Bank holdings, 19-21, 22, 28
Dealer transactions, positions, and financing, 30
Federal Reserve Bank holdings, 5, 11, 12, 28
Foreign and international holdings and transactions, 11, 28,
66
Open market transactions, 10
Outstanding, by type and holder, 26, 28
Rates, 23
U.S. international transactions, 53-67
Utilities, production, 48
VETERANS Administration, 35, 36
WEEKLY reporting banks, 20-22
Wholesale (producer) prices, 44, 50
YIELDS (See Interest rates)
72
Federal Reserve Board of Governors
and Official Staff
A L A N GREENSPAN, Chairman
DAVID W . M U L L I N S , JR., Vice Chairman
OFFICE OF BOARD
DIVISION
MEMBERS
JOSEPH R. COYNE, Assistant
DONALD J. WINN, Assistant
WAYNE D . A N G E L L
EDWARD W . KELLEY, JR.
to the Board
to the Board
THEODORE E. ALLISON, Assistant to the Board for Federal
Reserve System Affairs
LYNN S. Fox, Special Assistant to the Board
WINTHROP P. HAMBLEY, Special Assistant to the Board
BOB STAHLY MOORE, Special Assistant to the Board
DIANE E. WERNEKE, Special Assistant to the Board
OF INTERNATIONAL
EDWIN M. TRUMAN, Staff
FINANCE
Director
LARRY J. PROMISEL, Senior Associate Director
CHARLES J. SIEGMAN, Senior Associate Director
DALE W. HENDERSON, Associate Director
DAVID H. HOWARD, Senior
Adviser
DONALD B. ADAMS, Assistant
Director
PETER HOOPER III, Assistant
Director
KAREN H. JOHNSON, Assistant
Director
RALPH W. SMITH, JR., Assistant
Director
LEGAL DIVISION
J. VIRGIL MATTINGLY, JR., General
Counsel
SCOTT G. ALVAREZ, Associate General Counsel
RICHARD M. ASHTON, Associate General Counsel
OLIVER IRELAND, Associate General Counsel
RICKI R. TIGERT, Associate General Counsel
KATHLEEN M. O'DAY, Assistant General Counsel
MARYELLEN A. BROWN, Assistant to the General Counsel
OFFICE OF THE
WILLIAM W. WILES,
SECRETARY
Secretary
JENNIFER J. JOHNSON, Associate
Secretary
BARBARA R. LOWREY, Associate
RICHARD C. STEVENS, Assistant
Secretary
Secretary1
DIVISION
OF RESEARCH
MICHAEL J. PRELL,
AND
STATISTICS
Director
EDWARD C. ETTIN, Deputy
Director
WILLIAM R. JONES, Associate
Director
THOMAS D. SIMPSON, Associate
Director
LAWRENCE SLIFMAN, Associate Director
DAVID J. STOCKTON, Associate Director
MARTHA BETHEA, Deputy Associate Director
PETER A. TINSLEY, Deputy Associate Director
MYRON L. KWAST, Assistant
Director
PATRICK M. PARKINSON, Assistant
Director
MARTHA S. SCANLON, Assistant
Director
JOYCE K. ZICKLER, Assistant
JOHN J. MINGO,
Director
Adviser
DIVISION OF CONSUMER
AND COMMUNITY AFFAIRS
LEVON H. GARABEDIAN, Assistant
GRIFFITH L. GARWOOD,
DIVISION OF MONETARY AFFAIRS
Director
GLENN E. LONEY, Assistant
Director
ELLEN MALAND, Assistant
Director
DOLORES S. SMITH, Assistant
Director
AND
REGULATION
RICHARD SPILLENKOTHEN,
Director
STEPHEN C. SCHEMERING, Deputy
DON E. KLINE, Associate
Director
Director
DAVID E. LINDSEY, Deputy Director
BRIAN F. MADIGAN, Assistant Director
FREDERICK M. STRUBLE, Associate
Director
Director
HERBERT A. BIERN, Assistant
Director
ROGER T. COLE, Assistant
Director
JAMES I. GARNER, Assistant
Director
JAMES D. GOETZINGER, Assistant
Director
MICHAEL G. MARTINSON, Assistant
Director
ROBERT S. PLOTKIN, Assistant
Director
SIDNEY M. SUSSAN, Assistant
Director
LAURA M. HOMER, Securities Credit Officer
1. On loan from the Division of Information Resources Management.
Director
NORMAND R.V. BERNARD, Special Assistant to the Board
OFFICE
OF THE INSPECTOR
BRENT L. BOWEN, Inspector
Director
WILLIAM A. RYBACK, Associate
DONALD L . KOHN,
RICHARD D. PORTER, Assistant
DIVISION OF BANKING
SUPERVISION
Director
(Administration )
GENERAL
General
BARRY R. SNYDER, Assistant Inspector
General
J O H N P. LAWARE
LAWRENCE B . LINDSEY
SUSAN M . PHILLIPS
OFFICE OF
STAFF DIRECTOR FOR MANAGEMENT
DIVISION OF RESERVE BANK OPERATIONS
AND PAYMENT SYSTEMS
S. DAVID FROST, Staff
Director
WILLIAM SCHNEIDER, Special
Assignment-
CLYDE H . FARNSWORTH, JR.,
Project Director, National Information Center
PORTIA W. THOMPSON, Equal Employment Opportunity
Programs Officer
DIVISION OF HUMAN RESOURCES
MANAGEMENT
DAVID L . S H A N N O N ,
ANTHONY V. DIGIOIA, Assistant
JOSEPH H. HAYES, JR., Assistant
Director
Director
Director
OFFICE OF THE CONTROLLER
GEORGE E . LIVINGSTON,
Controller
STEPHEN J. CLARK, Assistant Controller (Programs and
Budgets)
DARRELL R. PAULEY, Assistant Controller (Finance)
DIVISION OF SUPPORT SERVICES
ROBERT E . FRAZIER,
Director
GEORGE M. LOPEZ, Assistant
Director
DAVID L. WILLIAMS, Assistant
Director
DIVISION OF INFORMATION RESOURCES
MANAGEMENT
STEPHEN R . MALPHRUS,
Director
BRUCE M. BEARDSLEY, Deputy
ROBERT J. ZEMEL, Senior
Director
Adviser
MARIANNE M. EMERSON, Assistant Director
Po KYUNG KIM, Assistant Director
RAYMOND H. MASSEY, Assistant
EDWARD T. MULRENIN, Assistant
Director
Director
DAY W. RADEBAUGH, JR., Assistant
ELIZABETH B. RIGGS, Assistant
EARL G. HAMILTON, Assistant
JOHN H. PARRISH, Assistant
Director
FRED HOROWITZ, Assistant
Director
CHARLES W. BENNETT, Assistant
JACK DENNIS, JR., Assistant
Director
Director
JEFFREY C. MARQUARDT, Assistant
Director
JOHN R. WEIS, Associate
Director
DAVID L. ROBINSON, Deputy Director (Finance and
Control)
BRUCE J. SUMMERS, Deputy Director (Payments and
Automation)
Director
Director
Director
Director
LOUISE L. ROSEMAN, Assistant
FLORENCE M. YOUNG, Assistant
Director
Director
A74
Federal Reserve Bulletin • April 1992
Federal Open Market Committee
and Advisory Councils
FEDERAL OPEN MARKET COMMITTEE
MEMBERS
A L A N GREENSPAN,
E. GERALD CORRIGAN, Vice Chairman
Chairman
WAYNE D . ANGELL
JOHN P. LAWARE
THOMAS H . HOENIG
LAWRENCE B . LINDSEY
SUSAN M . PHILLIPS
JERRY L . JORDAN
THOMAS C . MELZER
RICHARD F. SYRON
DAVID W . MULLINS, JR.
EDWARD W . KELLEY, JR.
ALTERNATE MEMBERS
ROBERT D . MCTEER, JR.
EDWARD G . BOEHNE
JAMES H . OLTMAN
SILAS KEEHN
GARY H . STERN
STAFF
DONALD L. KOHN, Secretary and
Economist
NORMAND R.V. BERNARD, Deputy
Secretary
JOSEPH R. COYNE, Assistant
Secretary
GARY P. GILLUM, Assistant
Secretary
J. VIRGIL MATTINGLY, JR., General
Counsel
ERNEST T. PATRIKIS, Deputy General Counsel
MICHAEL J. PRELL,
Economist
EDWIN M . TRUMAN,
Economist
ANATOL B. BALBACH, Associate
Economist
JOHN M. DAVIS, Associate
Economist
RICHARD G. DAVIS, Associate
Economist
THOMAS E. DAVIS, Associate
Economist
DAVID E. LINDSEY, Associate
Economist
ALICIA H. MUNNELL, Associate
Economist
LARRY J. PROMISEL, Associate
Economist
CHARLES J. SIEGMAN, Associate
Economist
THOMAS D. SIMPSON, Associate
Economist
DAVID J. STOCKTON, Associate
Economist
PETER D. STERNLIGHT, Manager for Domestic Operations, System Open Market Account
WILLIAM J. MCDONOUGH, Manager for Foreign Operations, System Open Market Account
FEDERAL ADVISORY COUNCIL
RONALD G . STEINHART,
TERRENCE A . LARSEN, Vice
IRA STEPANIAN, First District
CHARLES S. SANFORD, JR., Second District
TERRENCE A. LARSEN, Third District
JOHN B. MCCOY, Fourth District
EDWARD E. CRUTCHFTELD, Fifth District
E.B. ROBINSON, JR., Sixth District
President
President
EUGENE A. MILLER, Seventh District
DAN W. MITCHELL, Eighth District
JOHN F. GRUNDHOFER, Ninth District
DAVID A. RISMILLER, Tenth District
RONALD G. STEINHART, Eleventh District
RICHARD M. ROSENBERG, Twelfth District
HERBERT V. PROCHNOW,
WILLIAM J. KORSVIK, Associate
Secretary
Secretary
75
CONSUMER ADVISORY COUNCIL
COLLEEN D. HERNANDEZ, Kansas City, Missouri, Chairman
DENNY D. DUMLER, Denver, Colorado, Vice Chairman
BARRY A . ABBOTT, S a n F r a n c i s c o , C a l i f o r n i a
JOYCE HARRIS, M a d i s o n , W i s c o n s i n
JOHN R . ADAMS, P h i l a d e l p h i a , P e n n s y l v a n i a
GARY S . HATTEM, N e w Y o r k , N e w Y o r k
JOHN A . BAKER, A t l a n t a , G e o r g i a
JULIA E . HILER, M a r i e t t a , G e o r g i a
VERONICA E . BARELA, D e n v e r , C o l o r a d o
HENRY JARAMILLO, B e l e n , N e w M e x i c o
MULGUGETTA BIRRU, P i t t s b u r g h , P e n n s y l v a n i a
KATHLEEN E . KEEST, B o s t o n , M a s s a c h u s e t t s
GENEVIEVE BROOKS, B r o n x , N e w Y o r k
EDMUND MIERZWINSKI, W a s h i n g t o n , D . C .
TOYE L . BROWN, B o s t o n , M a s s a c h u s e t t s
BERNARD F. PARKER, JR., D e t r o i t , M i c h i g a n
CATHY CLOUD, W a s h i n g t o n , D . C .
OTIS PITTS, JR., M i a m i , F l o r i d a
MICHAEL D . EDWARDS, Y e l m , W a s h i n g t o n
JEAN POGGE, C h i c a g o , I l l i n o i s
GEORGE C . GALSTER, W o o s t e r , O h i o
JOHN V. SKINNER, I r v i n g , T e x a s
E . THOMAS GARMAN, B l a c k s b u r g , V i r g i n i a
NANCY HARVEY STEORTS, D a l l a s , T e x a s
DONALD A . GLAS, H u t c h i n s o n , M i n n e s o t a
LOWELL N . SWANSON, P o r t l a n d , O r e g a o n
DEBORAH B . GOLDBERG, W a s h i n g t o n , D . C .
MICHAEL W . TIERNEY, P h i l a d e l p h i a , P e n n s y l v a n i a
MICHAEL M . GREENFIELD, St. L o u i s , M i s s o u r i
SANDRA L . WILLETT, B o s t o n , M a s s a c h u s e t t s
THRIFT INSTITUTIONS ADVISORY COUNCIL
LYNN W. HODGE, Greenwood, South Carolina, President
DANIEL C. ARNOLD, Houston, Texas, Vice President
JAMES L . BRYAN, R i c h a r d s o n , T e x a s
PRESTON MARTIN, S a n F r a n c i s c o , C a l i f o r n i a
VANCE W. CHEEK, Johnson City, Tennessee
RICHARD D . PARSONS, N e w Y o r k , N e w Y o r k
BEATRICE D'AGOSTINO, S o m e r v i l l e , N e w J e r s e y
THOMAS R . RICKETTS, T r o y , M i c h i g a n
THOMAS J. HUGHES, M e r r i f i e l d , V i r g i n i a
EDMOND M . SHANAHAN, C h i c a g o , I l l i n o i s
RICHARD A. LARSON, West Bend, Wisconsin
WOODBURY C . TITCOMB, W o r c e s t e r , M a s s a c h u s e t t s
76
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26 pp.
1 5 5 . THE FUNDING OF PRIVATE PENSION PLANS, b y M a r k J.
Warshawsky. November 1987. 25 pp.
1 5 6 . INTERNATIONAL TRENDS FOR U . S . BANKS AND BANKING
MARKETS, by James V. Houpt. May 1988. 47 pp.
1 5 7 . M 2 PER UNIT OF POTENTIAL G N P AS AN ANCHOR FOR
THE PRICE LEVEL, by Jeffrey J. Hallman, Richard D.
Porter, and David H. Small. April 1989. 28 pp.
1 5 8 . THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIREMENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE
PRODUCTS, by Mark J. Warshawsky with the assistance of
Dietrich Earnhart. September 1989. 23 pp.
1 5 9 . N E W DATA ON THE PERFORMANCE OF NONBANK SUBSIDIARIES OF BANK HOLDING COMPANIES, b y N e l l i e L i a n g
and Donald Savage. February 1990. 12 pp.
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.
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.
Industrial Production: 1989 Developments and Historical
Revision. 4/90.
Recent Developments in Industrial Capacity and Utilization.
6/90.
Developments Affecting the Profitability of Commercial Banks.
7/90.
Recent Developments in Corporate Finance. 8/90.
U.S. Exchange Rate Policy: Bretton Woods to Present. 11/90.
The Transmission Channels of Monetary Policy: How Have
They Changed? 12/90.
U.S. International Transactions in 1990. 5/91.
Changes in Family Finances from 1983 to 1989: Evidence from
the Survey of Consumer Finances. 1/92.
78
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
Jerome H. Grossman
Richard F. Syron
Cathy E. Minehan
NEW YORK*
10045
Ellen V. Futter
Maurice R. Greenberg
Herbert L. Washington
E. Gerald Corrigan
James H. Oltman
Buffalo
14240
James O. Aston
PHILADELPHIA
19105
Peter A. Benoliel
Jane G. Pepper
Edward G. Boehne
William H. Stone, Jr.
CLEVELAND*
44101
Jerry L. Jordan
William H. Hendricks
Cincinnati
Pittsburgh
45201
15230
John R. Miller
A. William Reynolds
Marvin Rosenberg
Robert P. Bozzone
RICHMOND*
23219
Anne Marie Whittemore
Henry J. Faison
John R. Hardesty, Jr.
Anne M. Allen
Robert P. Black
Jimmie R. Monhollon
Edwin A. Huston
Leo Benatar
Nelda P. Stephenson
Lana Jane Lewis-Brent
Michael T. Wilson
Harold A. Black
Victor Bussie
Robert P. Forrestal
Jack Guynn
Richard G. Cline
Robert M. Healey
J. Michael Moore
Silas Keehn
Daniel M. Doyle
H. Edwin Trusheim
Robert H. Quenon
James R. Rodgers
Daniel L. Ash
Seymour B. Johnson
Thomas C. Melzer
James R. Bowen
Delbert W. Johnson
Gerald A. Rauenhorst
J. Frank Gardner
Gary H. Stern
Thomas E. Gainor
Burton A. Dole, Jr.
Herman Cain
Barbara B. Grogan
Ernest L. Holloway
Sheila Griffin
Thomas M. Hoenig
Henry R. Czerwinski
Leo E. Linbeck, Jr.
Henry G. Cisneros
Alvin T. Johnson
Judy Ley Allen
Roger R. Hemminghaus
Robert D. McTeer, Jr.
Tony J. Salvaggio
James A. Vohs
Robert F. Erburu
Walfred J. Fassler
William A. Hilliard
Gary G. Michael
George F. Russell, Jr.
Robert T. Parry
Patrick K. Barron
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
Ronald B. Duncan1
Walter A. Varvel1
John G. Stoides1
Donald E. Nelson 1
Fred R. Herr1
James D. Hawkins1
James T. Curry III
Melvyn K. Purcell
Robert J. Musso
Roby L.Sloan 1
Karl W. Ashman
Howard Wells
Ray Laurence
John D. Johnson
Kent M. Scott
David J. France
Harold L. Shewmaker
Sammie C.Clay
Robert Smith, III1
Thomas H. Robertson
John F. Moore1
Leslie R. Watters
Andrea P. Wolcott
Gordon Werkema1
*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.
79
The Federal Reserve System
Boundaries of Federal Reserve Districts and Their Branch Territories
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LEGEND
Boundaries of Federal Reserve Districts
® Federal Reserve Bank Cities
Boundaries of Federal Reserve Branch
Territories
*
Federal Reserve Branch Cities
Federal Reserve Bank Facility
Q
Board of Governors of the Federal Reserve
System
•M
illillrtliliB
Publications of Interest
FEDERAL
RESERVE
REGULATORY
SERVICE
To promote public understanding of its regulatory
functions, the Board publishes the Federal Reserve
Regulatory Service, a three-volume looseleaf 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 the payment system.
These publications are designed to help those who
must frequently refer to the Board's regulatory
materials. They are updated at least monthly, and each
contains citation indexes and a subject index.
The Monetary Policy and Reserve
Requirements
Handbook contains Regulations A, D, and Q, plus
related materials. For convenient reference, it also
contains the rules of the Depository Institutions
Deregulation Committee.
The
Securities
Credit
Transactions
Handbook
contains Regulations G, T, U, and X, dealing with
extensions of credit for the purchases of securities,
together with all related statutes, Board interpreta-
U.S. MONETARY
U.S. Monetary
POLICY
Policy
and
AND FINANCIAL
Financial
Markets
The Consumer
and Community
Affairs
Handbook
contains Regulations B, C, E, M, Z, AA, and BB, and
associated materials.
The Payment System Handbook deals with expedited
funds availability, check collection, wire transfers,
and risk-reduction policy. It includes Regulation CC,
Regulation J, the Expedited Funds Availability Act
and related statutes, official Board commentary on
Regulation CC, and policy statements on risk reduction
in the payment systems.
For domestic subscribers, the annual rate is $200
for the Federal Reserve Regulatory Service and $75
for each Handbook. For subscribers outside the United
States, the price including additional air mail costs is
$250 for the Service and $90 for each Handbook. All
subscription requests must be accompanied by a
check or money order payable to the 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.
MARKETS
by
Ann-Marie Meulendyke offers an in-depth description
of the way monetary policy is developed by the
Federal Open Market Committee and the techniques
employed to implement policy at the Open Market
Trading Desk. Written from her perspective as a
senior economist in the Open Market Function at the
Federal Reserve Bank of New York, Ann-Marie
Meulendyke describes the tools and the setting of
policy, including many of the complexities that
differentiate the process from simpler textbook
models. Included is an account of a day at the Trading
Desk, from morning information-gathering through
daily decisionmaking and the execution of an open
market operation.
The book also places monetary policy in a broader
tions, rulings, and staff opinions. Also included is the
Board's list of OTC margin stocks.
context, examining first the evolution of Federal
Reserve monetary policy procedures from their
beginnings in 1914 to the end of the 1980s. It
indicates how policy operates most directly through
the banking system and the financial markets and
describes key features of both. Finally, the book turns
its attention to the transmittal of monetary policy
actions to the U.S. economy and throughout the
world.
The book is $5.00 a copy for U.S. purchases and
$10.00 for purchasers outside the United States.
Copies are available from the Public Information
Department, Federal Reserve Bank of New York, 33
Liberty Street, New York, N.Y. 10045. Checks must
accompany orders and should be payable to the
Federal Reserve Bank of New York in U.S. dollars.
Federal Reserve Statistical Releases
Available on the Commerce Department's
Economic Bulletin Board
The Board of Governors of the Federal Reserve
System makes some of its statistical releases available to the public through the U.S. Department of
Commerce's economic bulletin board. Computer
access to the releases can be obtained by sub-
scription. For further information regarding a
subscription to the economic bulletin board,
please call 202-377-1986. The releases transmitted
to the economic bulletin board, on a regular basis,
are the following:
Reference
Number
Statistical release
Frequency of release
H.3
Aggregate Reserves
Weekly/Thursday
H.4.1
Factors Affecting Reserve Balances
Weekly/Thursday
H.6
Money Stock
Weekly/Thursday
H.8
Assets and Liabilities of Insured Domestically Chartered
and Foreign Related Banking Institutions
Weekly/Monday
H.10
Foreign Exchange Rates
Weekly/Monday
H.15
Selected Interest Rates
Weekly/Monday
G.5
Foreign Exchange Rates
Monthly/end of month
G.17
Industrial Production and Capacity Utilization
Monthly/midmonth
G.19
Consumer Installment Credit
Monthly/fifth business day
Z.7
Flow of Funds
Quarterly
@FedFRASER