Full text of Federal Reserve Bulletin : April 1994
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VOLUME 80 •
NUMBER 4 •
APRIL 1 9 9 4
FEDERAL RESERVE
BULLETIN
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D . C .
t'V
PUBLICATIONS COMMITTEE
Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood • Donald L. Kohn
• J. Virgil Mattingly, Jr. • Michael J. Prell • Richard Spillenkothen • 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
269 BUSINESS-TO-BUSINESS
PAYMENTS AND
THE ROLE OF FINANCIAL
ELECTRONIC
DATA INTERCHANGE
Today, the majority of businesses pay their
suppliers and service providers with paper
checks despite business managers' emphasis
on improving productivity through automation. Moreover, electronic data interchange
(EDI) now permits businesses to send business information to other businesses electronically, andfinancialelectronic data interchange
(financial EDI) permits businesses to send
payments with remittance data electronically
through the banking system to pay suppliers
and service providers. This article examines
the ways business-to-business payments are
made today and describes the methods for
making financial EDI payments. It also explores the reasons that businesses have chosen
to use various payment instruments, the benefits of financial EDI, and the impediments to
its use.
279 TREASURY AND FEDERAL RESERVE
FOREIGN EXCHANGE
OPERATIONS
The dollar appreciated modestly against most
major currencies during the NovemberJanuary period. It rose 2.9 percent against the
German mark, 0.1 percent against the Japanese yen, and 0.5 percent on a trade-weighted
basis. The U.S. monetary authorities did not
undertake any intervention operations during
the period.
282 INDUSTRIAL PRODUCTION AND
CAPACITY UTILIZATION FOR
FEBRUARY 1994
Industrial production rose 0.4 percent in February to 115.1 percent of its 1987 average,
after a gain of 0.5 percent in January. The
utilization of total industrial capacity edged up
0.1 percentage point, to 83.4 percent, which is
2.2 percentage points above the year-ago level
but 1.4 percentage points below the 1988-89
peak.
285 STATEMENTS
TO THE
CONGRESS
John P. LaWare, member, Board of Governors, presents the views of the Federal
Reserve Board on the proposed legislation on
Fair Trade in Financial Services (H.R.3248)
and says that the Federal Reserve opposes this
legislation because it believes that the policy
of national treatment has served the country
well and because the upcoming negotiations
of the Uruguay Round are the best hope for
achieving further progress in opening foreign
financial markets for U.S. financial firms,
before the Subcommittee on Financial Institutions, Supervision, Regulation, and Deposit
Insurance of the House Committee on Banking, Finance and Urban Affairs, February 1,
1994.
286 Lawrence B. Lindsey, member, Board of Governors, discusses Community Reinvestment
Act (CRA) reform and says that the Federal
Reserve has been highly aggressive in its
approach to proposing comprehensive regulatory reform of the CRA and that it has
attempted to balance the competing concerns
of providing greater specificity on what is
expected on the one hand without dictating
credit decisions on the other, before the Subcommittee on General Oversight, Investigations, and the Resolution of Failed Financial
Institutions of the House Committee on Banking, Finance and Urban Affairs, February 1,
1994.
291 Governor Lindsey reviews the efforts to
reform the CRA by amending the regulations
of the federal financial institution regulatory
agencies and says that the Federal Reserve
developed proposed changes to its CRA
regulations in conjunction with the other
agencies and that he is paying particular attention to comments about the details of implementation and unintended consequences from
how the proposal will work in practice, before
the Subcommittee on Consumer Credit and
Insurance of the House Committee on Banking, Finance and Urban Affairs, February 8,
1994.
296 The Board of Governors comments on the
credit and charge card legislation being considered in H.R.I842 and H.R.2175 and says
that it believes that existing law supplies consumers with adequate information about the
key costs associated with credit and charge
card accounts and that a provision of the
proposed legislation that would allow government agencies to pass the costs of credit
transactions directly on to consumers could
increase public use of a more convenient payment option but would also create different
rules for the private and public sectors, in a
statement submitted to the Subcommittee on
Consumer Credit and Insurance of the House
Committee on Banking, Finance and Urban
Affairs, February 9, 1994.
301 Alan Greenspan, Chairman, Board of Governors, presents the Federal Reserve's semiannual monetary policy report to the Congress
and says that the performance of the U.S.
economy has improved appreciably and that
the projections of the Federal Open Market
Committee members suggest a continuation of
good economic performance in 1994, with
reasonable growth and subdued inflation,
although there are considerable risks to this
generally favorable outlook, before the Subcommittee on Economic Growth and Credit
Formation of the House Committee on Banking, Finance and Urban Affairs, February 22,
1994.
307 ANNOUNCEMENTS
Increase in pressure on reserve positions
announced by Chairman Greenspan.
Statement by Chairman Greenspan on the
resignation of President Syron of the Federal
Reserve Bank of Boston.
Meeting of the Consumer Advisory Council.
Approval of a final rule regarding a change in
the Federal Deposit Insurance Corporation
Improvement Act.
Amendments to Regulation E.
Amendments to Regulation O.
Delay in the distribution of a new criminal
referral form for use by financial institutions.
Proposal to revise the risk-based capital standards; proposal to simplify and update Regulation E.
Publication of a consumer affairs brochure,
Making Sense of Savings.
Revisions to the money stock data.
315 MINUTES OF THE FEDERAL OPEN
MARKET COMMITTEE MEETING
At its meeting on December 21, 1993, the
Committee adopted a directive that called for
maintaining the existing degree of pressure on
reserve positions and that did not include a
presumption about the likely direction of any
adjustment to policy during the intermeeting
period. The directive stated 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 or slightly lesser
reserve restraint might be acceptable during
the intermeeting period. The reserve conditions associated with this directive were
expected to be consistent with moderate growth in M2 and M3 over the months
ahead.
325 LEGAL
A70 INDEX TO STATISTICAL
DEVELOPMENTS
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 24, 1994.
A3 GUIDE TO TABULAR PRESENTATION
A4 Domestic Financial Statistics
A45 Domestic Nonfinancial Statistics
A53 International Statistics
A69 GUIDE TO STATISTICAL RELEASES
SPECIAL TABLES
TABLES
A72 BOARD OF GOVERNORS AND STAFF
A74 FEDERAL OPEN MARKET
COMMITTEE
AND STAFF; ADVISORY
COUNCILS
A76 FEDERAL RESERVE
PUBLICATIONS
BOARD
A78 MAPS OF THE FEDERAL
SYSTEM
RESERVE
A80 FEDERAL RESERVE BANKS,
AND OFFICES
AND
BRANCHES,
Business-to-Business Payments and the Role
of Financial Electronic Data Interchange
Scott E. Knudson, Jack K. Walton II, and
Florence M. Young, of the Board's Division of
Reserve Bank Operations and Payment Systems,
prepared this article.
Over the past three decades, businesses have implemented a vast array of automated systems to
improve their productivity. Nevertheless, most continue to bill their customers with paper invoices
and to mail their suppliers paper checks with remittance information. Generating and processing these
paper documents consumes significant amounts of
real resources, such as labor and transportation.
The purchasing company must manually enter data
from invoices into its automated accounts payable
system, track the receipt of supplies, print remittance documents, and issue and mail checks. After
receiving payment, the supplier must manually
enter payment data into its automated accounts
receivable system and deposit the check with its
bank for collection.
To collect payment for its customer, the suppliers' bank (the collecting bank) must typically transport the check to the bank on which the purchaser
drew it (the payor bank).1 Collecting banks frequently route checks through intermediaries, such
as correspondent banks or Federal Reserve Banks,
which ultimately deliver the checks to the payor
banks. Thus, the transportation of checks through
the collection chain and the repetitive handling of
them at each bank in the chain contribute significantly to the cost of processing checks.
Today, electronic data interchange (EDI) permits
businesses to replace paper documents with the
electronic transmission of a wide variety of business data. Specifically, EDI consists of the electronic transmission of data in standard formats
developed by businesses for documents typically
1. The term "bank" in this article refers to all depository institutions, such as savings and loan associations, mutual savings banks,
credit unions, and so forth.
exchanged between trading partners, including purchase orders, invoices, shipping notices, payment
orders, and remittance advices.
To permit businesses to automate payment processing fully, the banking industry has combined
electronic payment formats with EDI formats for
remittance data. When electronic transfers of funds
and electronic remittance data are combined to
make payments, the transactions are called financial electronic data interchange (financial EDI).
UsingfinancialEDI to make payments allows businesses to replace the labor-intensive activities associated with issuing, mailing, and collecting checks
through the banking system with automated initiation, transmission, and processing of payment
instructions. Thus, it eliminates the delays inherent
in processing checks. Financial EDI also improves
the certainty of the payment flows between corporations' bank accounts because the payee's bank
can credit its account on the scheduled payment
date and the payor's bank can debit its account on
the same day.
Despite the potentially significant benefits of
financial EDI to businesses and the banking
industry, businesses continue to use traditional
methods to make most of their business-to-business
payments.
This article examines the ways business-tobusiness payments are made today and describes
the methods for making financial EDI payments. It
also explores the reasons that businesses have
chosen to use various payment instruments, the
benefits of financial EDI, and the impediments to
its use.
HOW
BUSINESS-TO-BUSINESS
PAYMENTS ARE MADE
The three principal types of noncash payment
instruments currently used for business-to-business
270
Federal Reserve Bulletin • April 1994
payments are checks, large-dollar funds transfers,
and automated clearing house (ACH) transfers.
Checks
Checks are debit transfers, that is, payees must
collect funds from payors. Funds made available
by banks to depositors of checks are provisional
and may be reversed if the payor does not have
sufficient funds in its account to pay the check
when it is received by the payor's bank. In 1993,
more than 96 percent of all noncash payments
made in the United States were made by paper
checks (table 1). Consumers issued about 55 percent of these checks, businesses issued about
40 percent, and the federal government issued
about 5 percent.2
Because businesses issue checks to individuals
as well as to other businesses, the number of
business-to-business checks is difficult to estimate
with any degree of accuracy, but the number is
certainly large. Moreover, because the value of
payments made between businesses is likely to be
much larger than the value of those made by businesses to individuals, the value of business-tobusiness checks probably accounts for a large share
of the value of all checks written.
Businesses use checks to make payments for
basically two reasons. First, they are a familiar
instrument, and they are a readily accepted form of
payment despite some uncertainty about receiving
final payment. Second, some businesses benefit
from the float created by the delays in the checkcollection process. Float is created when a delay
occurs between the initiation of a payment and the
availability of the funds to the recipient. As previously noted, delays occur because checks are typically delivered through the mail, require physical
handling, and must be transported among banks in
the collection chain. Businesses find float valuable
because they can use or invest funds for several
days after they have issued a check.
Although discouraged by the Federal Reserve,
some companies attempt to increase the float benefit of checks by drawing checks on banks located in
remote locations or by otherwise imposing barriers
2. "Special Issue: Displacing the Check," Federal Reserve Bank
of Atlanta, Economic Review, vol. 68 (August 1983), p. 36.
to the timely collection of checks. These practices
add to the transportation expenses incurred in collecting checks as well as delay recipients' access to
funds. The value of this float benefit, however,
varies significantly depending on the level of interest rates and the costs businesses incur to manage
float.
Large-Dollar Funds Transfers
Large-dollar funds transfers are credit transfers,
that is, fundsflowdirectly from the payor's bank to
the payee's bank. They are typically same-day payments and can be made almost instantaneously.
The two large-dollar funds transfer services in
the United States are the Federal Reserve's system,
Fedwire, and the Clearing House Interbank Payments System (CHIPS) of the New York Clearing
House. The Federal Reserve guarantees Fedwire
funds transfers. Thus, they cannot be revoked after
the receiving bank is advised that a Reserve Bank
has credited its account. The members of CHIPS
pledge collateral to ensure settlement of CHIPS
transfers, and payments become final at the close of
business when all members of CHIPS settle their
net positions using Fedwire transfers.
Large-dollar funds transfers account for an
extremely small portion of the number of noncash
payments. In 1993, for example, they accounted for
about 0.2 percent of all noncash payments in the
United States. At the same time, however, they
accounted for nearly 86 percent of the value of all
noncash payments (table 1).
Businesses use large-dollar funds transfers when
timeliness and certainty of payment are the most
important considerations. For example, they generally settle domestic financial transactions, such as
repurchase agreements and commercial paper, and
fund zero balance accounts with Fedwire funds
transfers.3 They use CHIPS transfers to settle the
dollar side of foreign exchange as well as Eurodollar transactions. Businesses rarely use large-dollar
3. When a business uses a zero balance account for disbursement purposes, the bank maintaining the account advises the business each morning of the value of checks that have been presented
for payment. The business then transfers funds to the account to
cover the value of those checks. The use of zero balance accounts
permits businesses to earn a return on funds through short-term
investments, rather than maintaining non-interest-earning balances
in demand deposit accounts at banks.
Business-to-Business
Payments and the Role of Financial Electronic Data Interchange
2. ACH transactions, 1991 and 19931
1. Noncash payments, 1993
Volume in millions of items; value in trillions of dollars
Millions of items except as indicated
1993
Type of
noncash
payment
271
Volume
Volume
Percent of
total
volume 1
Value
Percent of
total
value
Checks 2 . . .
Fedwire 3 ..
CHIPS 3 . . .
ACH 4
59.400.0
69.7
42.4
2,200.0
96.3
.1
.1
3.6
68.3
207.6
262.3
9.3
12.5
37.9
47.9
1.7
Total
61.712.1
100.0
547.5
Item
Average
annual
growth rate,
1991-93
(percent)
100.0
1. Components may not sum to totals because of rounding.
2. Estimates of total checks issued, developed by staff at the Federal
Reserve Board.
3. Actual interbank payments processed, based on data from the Federal
Reserve Banks and the Clearing House Interbank Payments System (CHIPS).
4. Actual interbank payments processed, based on data from the Federal
Reserve Banks and, for transfers processed by private ACH operators, from
the National Automated Clearing House Association (NACHA).
funds transfers to pay suppliers for goods and
services.4
Automated Clearing House Transfers
The ACH system is a value-dated electronic funds
transfer system that is typically used to process
high volumes of relatively small-dollar payments
for settlement one or two business days after they
are processed. Two types of ACH transfers may be
used—credit transfers or debit transfers. ACH
credit transfers are similar to large-dollar funds
transfers in that funds flow from the payor's bank
to the payee's bank. The funds received by the
payee's bank are generally provisional until the
morning of the business day following the settlement day. The Reserve Banks may revoke the
payments if the sending bank does not have sufficient funds in its account to fund them on the
settlement day. When ACH debit transfers are used,
the bank initiating the transfer (the payee's bank)
receives funds from the payor's bank. As with
checks, funds made available by banks to collecting businesses are provisional and may be revoked
if there are not sufficient funds in the payor's
account to cover the transfer on the scheduled
settlement day.
ACH transactions account for a small fraction of
the total volume and value of all interbank pay4. Federal Reserve Bank of New York, "A Study of Large
Dollar Payment Flows through CHIPS and Fedwire" (FRBNY,
December 1987).
1991
ACH
Intercompany ACH ..
1993
1,640.0
8.2
2,099.0
11.8
14.0
22.0
1. Based on an examination of total commercial and government ACH
payments processed by the Federal Reserve Banks.
ments. Businesses initiate the majority of ACH
transfers, but in 1993 less than 1 percent of those
transfers were business-to-business payments. Use
of the ACH for business-to-business payments,
however, is growing rapidly. Based on an examination of the types of ACH payments processed
by the Federal Reserve System, ACH business-tobusiness payments grew at an average annual rate
of 22 percent from 1991 through 1993. (The Federal Reserve processes about 95 percent of all
interbank ACH transfers.) This rate of growth was
considerably higher than the growth in overall
ACH use (table 2).
Businesses typically use ACH credit transfers to
pay for goods or services and to make tax payments to state and local governments. They use
ACH debit transfers to concentrate funds from the
bank accounts of widely dispersed affiliates and
subsidiaries to the company's primary bank
account. Some businesses also use ACH debit
transfers to collect funds from businesses that distribute their products. Many businesses, however,
are concerned about permitting other companies to
initiate debits on their accounts. Thus, ACH debit
transfers are used less often than ACH credit transfers for business-to-business payments.
HOW FINANCIAL EDI PAYMENTS ARE
MADE
Corporations use various approaches to implement
financial EDI. The most fundamental decision a
business must make when implementing financial
EDI is whether payment instructions and remittance data should flow together through the banking system or whether payment instructions should
flow through the banking system and remittance
data should be transmitted over a direct data communications link with a trading partner or a value-
272
Federal Reserve Bulletin • April 1994
added network (VAN). A VAN is a third-party
service provider that manages data communications networks for businesses that exchange electronic data with other businesses. VANs facilitate
the exchange of electronic data by accepting data
in various formats and by converting the incoming
data to a format usable by the receiver of the
information. VANs also manage transmission
schedules and hold data until receivers are ready to
accept them.
The choices businesses make are based on differences in electronic transmission costs, the extent to
which the two trading partners exchange business
documents electronically, and the types of electronic payment services offered by the two businesses' banks. The following discussion provides
illustrations of payment instructions and remittance information flowing together and flowing
separately.
In chart 1, the purchasing company (company
A), which is the payor, transmits remittance data to
instruct its bank (bank A) to pay its supplier. Bank
A creates an ACH credit transfer instruction, indicating the specified payment date, and attaches the
appropriate electronic remittance data to that payment instruction. (See appendix A for a discussion
of ACH payment formats.) Bank A transmits the
payment instruction with the remittance data to an
ACH operator. At present, there are two national
ACH operators—the Federal Reserve and Visa,
U.S.A.—and two regional ACH operators—the
New York Automated Clearing House Association
and remittance information, the ACH operator edits
the payment instructions, extracts accounting data
from them, and transmits the payment instructions
and remittance data to the seller's bank (bank B).
Bank B then transmits a payment advice and the
remittance data to the selling company (company B), which is the payee.
When ACH credit transfers are processed by the
Federal Reserve, on the scheduled payment date
the Reserve Banks maintaining the accounts of
banks A and B debit and credit the reserve or
clearing accounts of banks A and B respectively,
for the total value of transfers sent or received. If a
private sector ACH operator processed the ACH
transfers, the value of all ACH transfers processed
for the banks using that operator would be netted,
and each participant would settle its net position
through its account maintained on the books of a
Federal Reserve Bank. (Banks that do not have a
reserve or clearing account settle ACH transfers
through correspondent banks' reserve or clearing
accounts.) Bank A and bank B then debit and credit
their respective customers' accounts.
In chart 2, the payor transmits payment instructions to its bank (bank A) and remittance information to the payee through a VAN. The payment
instructions are processed through the banking system and settled as described above, with the exception that remittance data are not attached.
2. Payment instructions and remittance information flow
Business-to-Business Payments and the Role of Financial Electronic Data Interchange
To facilitate the use offinancialEDI, some banks
provide VAN-like services with payment services
to their corporate customers. Some of these banks
have developed their own networks for communicating data to their corporate customers, and some
of them also contract with VANs to transmit remittance information to their corporate customers'
trading partners.
The following examples illustrate how financial
EDI payments are made using ACH credit and
debit transfers. Sears Roebuck and Company's
Merchandise Group began using ACH credit transfers to pay its suppliers in 1983. Sears uses EDI
format standards to transmit payment instructions
and remittance information to its banks. The banks
convert the data to ACH payment formats, which
are then processed as shown in chart 1. If Sears's
supplier requests that remittance data be sent separately, rather than with the payment, Sears transmits the remittance data to the trading partner
through the same network used for exchanging
other business data with that trading partner. The
ACH transfer is then processed by Sears's bank as
shown in chart 2.
General Motors Corporation began using ACH
debit transfers to collect payments from its dealers
through their bank accounts in 1982. General
Motors sends ACH formatted payment instructions, with information identifying the vehicles
for which payment is being requested, to one of
its banks.5 The ACH debit transfers are processed
in the same way that ACH credit transfers are,
except that, on the settlement day General Motors's
banks credit General Motors's accounts and the
dealers' banks debit the dealers' accounts. In 1993,
using this method, General Motors collected
600,000 payments from its dealers, with a value of
$12 billion.
General Motors also uses ACH credit transfers to
make payments to suppliers. Besides transmitting
remittance information to suppliers through the
banking system or a VAN, General Motors will
mail it directly to a supplier if the supplier's bank
cannot receive EDI data. In 1993, General Motors
5. The Bankers EDI Council, a part of the NACHA, developed
an electronic dealer drafting convention to replace the paper drafts
with which vehicle manufacturers had obtained payments from
dealers.
273
made 700,000 ACH credit payments valued at
$38 billion to suppliers.6
The federal government began using ACH transfers to make payments to businesses, state and
local governments, and educational institutions in
1987. The program, called Vendor Express, is managed by the Treasury Department's Financial Management Service (FMS). Although vendors continue to submit paper invoices to federal agencies,
the agencies make payments using ACH credit
transfers. To permit vendors to identify payments,
one ACH transfer, accompanied by an addendum
record that contains information referencing the
vendor's invoice, is sent for each invoice received.
Depending on the capabilities of the vendors'
banks, the remittance information may be delivered
in electronic or paper form. In 1993, more than 100
federal agencies participated in the program and
made approximately 5.3 million payments, valued
at $326.8 billion.7 The program has improved the
timeliness of government payments and has significantly reduced the government's transaction
costs.8
BENEFITS AND COSTS OF FINANCIAL EDI
FOR BUSINESSES
At present, neither EDI nor financial EDI are
widely used. Approximately 44,000 companies, out
of millions of businesses in the United States,
exchange business data electronically.9 Only about
10 percent of these companies also use financial
EDI.10 Moreover, no more than fifty banks have the
capability of providing complete financial EDI services to their corporate customers.11
6. Data in this discussion were provided by General Motors
Corporation.
7. Data provided by the Financial Management Service, U.S.
Department of the Treasury.
8. George W. Henderson and Anthony R. Torrice, "Vendor
Express: A New Era in Government," EDI Forum, vol. 4 (1991),
p. 40.
9. EDI Yellow Pages, Phillips Business Information. Similar
data were also provided by EDI, spread the word!.
10. The estimate of the number of financial EDI users was
provided by the NACHA.
11. Treasury Manager's Report, vol. 2 (February 18, 1994),
p. 3.
274
Federal Reserve Bulletin • April 1994
Incentives for Using Financial EDI
Several factors influence a company's decision to
use financial EDI. For companies that have implemented EDI, the principal benefits of extending
EDI capabilities to the initiation of payments are
lower transaction costs and increased control over
the timing of payments.
According to a survey conducted by the EDI
Group, Ltd., a research and consulting firm, 23 percent of the 370 respondents saw potential cost
savings as the most important reason for using
financial EDI.12 For example, businesses can
reduce personnel expenses by eliminating manual
processing, eliminate postage costs, and, in some
cases, benefit from lower bank service charges.
The use of financial EDI and electronic payments in general also permits corporate cash managers to control the timing of payments. When a
corporation uses ACH credit transfers to make payments, the settlement date for the payment is scheduled when the corporation sends payment instructions to its bank. Thus, the timing of payment
obligations is known with certainty, and corporate
cash managers can plan their funding needs in
advance. Similarly, corporations receiving ACH
credit transfers know the scheduled payment date
and can plan on receiving payments with a high
degree of certainty. Businesses using ACH debit
transfers can also schedule payment dates with
each other so that the company whose bank account
is being debited can fund the payment on a specific
date.
Conversely, when payments are made with
checks, the day on which a check will be delivered
to a corporation's bank for payment cannot be
predicted. As a result, many companies purchase
cash management services from their banks to
obtain information about the value of checks that
have been delivered for payment each day. Obtaining this information is labor intensive and costly
for the company and its banks. In addition, the
uncertainty associated with check payments may
prevent a corporation from investing its cash balances in the most optimal way.
12. The EDI Group Ltd., "The State of Financial EDI, 1992,"
presented at the 1993 Financial EDI Conference, in Financial EDI
Resources and Speaker Materials, sect. 2, p. 14.
Thus, financial EDI has the potential of eliminating the costs banks incur to capture daily information about check payments and of reducing the
charges companies pay for these services. It may
also improve a company's earnings on its cash
balances.
According to the EDI Group's survey, companies using financial EDI found several benefits
besides reducing costs and improving control over
the payment process. First, the electronic payment
information exchanged between trading partners is
more accurate than that on paper documents
because the information is not manually entered
into accounting systems by each trading partner.
Second, businesses can respond more quickly to
customer requests, such as verifying discrepancies
in purchase orders and invoices or identifying
erroneous payment amounts or terms, because data
are readily accessible through automated systems.
Third, large companies indicated that financial EDI
allows them to form technologically based alliances with their suppliers, which may lead to longterm trading relationships.
Societal cost savings could also result from
greater use of electronic payments. David Humphrey and Allen Berger calculated that the social
costs of making payments using ACH transfers
in 1987 was substantially less than issuing, collecting, and settling checks.13 Since 1987, however,
changes have occurred in the processes used
to issue and collect checks, and technological
advances have been introduced in ACH processing.
As a result, the cost savings that might be realized
by converting business-to-business payments to
financial EDI cannot reliably be based on earlier
calculations.
Impediments to the Use of Electronic
Payments
While the potential cost savings associated with
using electronic payments may be substantial, the
13. David B. Humphrey and Allen N. Berger, "Market Failure
and Resource Use: Economic Incentives to Use Different Payment
Instruments," in David B. Humphrey, ed., The U.S. Payment System: Efficiency, Risk and the Role of the Federal Reserve (Norwell,
Mass.: Kluwer Academic Publishers, 1990), p. 49.
Humphrey and Berger's calculations indicated that approximately $0.50 per payment could be saved by replacing paper
checks with ACH transfers.
Business-to-Business Payments and the Role of Financial Electronic Data Interchange
impediments to their use are substantial as well.
First, the float benefit associated with check payments affects businesses' choice of payment instruments. About 15 percent of the respondents to the
EDI Group's survey cited concerns about the loss
of float as the reason that their companies had
chosen not to participate in financial EDI.14
Although the costs of managing float and current
low interest rates are reducing float benefits, the
value of check float to businesses, on average, is
still substantial.15
To compensate for the loss of check float, some
corporations adjust payment terms when converting to electronic payments. For example, General
Motors found that, on average, the checks it wrote
were paid 3.6 days after they were issued. When
it began making electronic payments, General
Motors reached agreements with its suppliers to
make electronic payments three days later than
when it had been issuing check payments. This
agreement improved funds availability for its suppliers by six-tenths of a day on average.16
Second, most companies that implement EDI
systems focus initially on achieving internal operating efficiencies rather than on improving their payment operations. Thus, the small percentage of
businesses using EDI that also use financial EDI
probably reflects the initial emphasis of businesses
on re-engineering primary business functions.
After businesses take these steps, they may pursue
improvements in payment operations.
Third, for corporations planning to install EDI
systems, start-up costs can be significant. The EDI
Group's survey data indicated that the median cost
for a corporation to install an EDI system is about
$7,500. The costs range from about $5,000 for
smaller companies to more than $10 million for
large corporations. For companies to add a new
trading partner, the survey results indicated that the
median cost, including all out-of-pocket and per-
14. See "The State of Financial EDI, 1992," p. 14.
15. Using 1987 data, Humphrey and Berger calculated the value
of check float to businesses to be about $1.88 per check. Using the
same methods, we calculate that the value of check float to businesses in 1993 ranges from about $0.86 to $1.12 per check. The
decline is due mostly to lower interest rates. See appendix B for a
discussion of the methods used to calculate the value of float.
16. Charles E. Golden, "Making General Motors and America
More Competitive through Financial EDI and EFT," EDI Forum,
vol. 3 (1990), p. 26.
275
sonnel expenses, is about $750, ranging from a few
hundred dollars to more than $20,000.17 Corporations that have installed EDI systems estimate that
they are able to recover their investment in about
two years, on average. Many firms, however, find
the initial costs prohibitively high.
Fourth, even for businesses that have implemented EDI to communicate with their trading
partners, the additional costs of implementing
financial EDI can be high. A business must establish a relationship with a bank that can support its
financial EDI requirements. It must also establish
data communications links with the bank and may
need to modify the formats used in internal automated accounting systems to send payment instructions to the bank.
Finally, because relatively few businesses participate in financial EDI, most businesses must be
able to issue and receive checks as well as make
electronic payments. Maintaining both paper-based
and electronic payment systems reduces the potential benefits of financial EDI. To simplify the payment process for their business customers, some
banks are beginning to accept instructions for all
their business customers' payments. Based on information about the form of payment requested by
the company's suppliers and service providers,
these banks initiate either electronic payments or
checks on behalf of their customers. While these
services simplify payment processing for businesses, the banks must maintain dual processing
systems.
CONCLUSIONS
Despite the potential of financial EDI to reduce the
costs of the resources consumed in making payments in the United States, a significant conversion
of business-to-business payments to electronic
form may not occur for some time. First, before a
company can consider using financial EDI, it must
install EDI systems to communicate with its trading partners. Because installing such systems may
require a company to make significant modifications to its internal automated systems as well as to
develop the capability to transmit business data to
17. Data provided by The EDI Group, Ltd.
276
Federal Reserve Bulletin • April 1994
its trading partners, implementation costs are high.
As a result, many companies may not yet be able to
justify the investment in EDI systems.
Second, even for companies that have implemented EDI systems to communicate with their
trading partners, using financial EDI to make payments to those trading partners is complex. The
company must find a bank capable of processing
financial EDI transfers, determine whether each
trading partner's bank can receive the payments
and provide the remittance data, and consider renegotiating payment terms with each trading partner.
To many business managers, these undertakings
are daunting.
Third, many businesses continue to benefit from
the float created by the check collection system.
Even though current low interest rates have
reduced this benefit, check float continues to act as
a disincentive to increased use offinancialEDI.
Finally, for both businesses and banks, the need
to maintain systems to process checks as well as
electronic payments is complicated and costly.
While issuing and collecting checks currently
consumes significant resources, the total costs and
potential benefits of converting the nation's payment system to an electronic one are difficult to
quantify. Similarly, the costs and benefits associated with financial EDI are difficult to quantify.
Several factors, however, indicate that the use of
financial EDI will grow. The cost of technology
continues to decline, and even small businesses are
using automated systems to track inventories and to
maintain their accounting systems. Gaining access
to value-added networks, which simplify electronic
communications between trading partners, is
becoming easier.
In addition, several large companies that have
installed EDI systems are interested in expanding
those systems to their payment processing. The
interest of these companies is providing the impetus for some banks to offer financial EDI services
or expand the services they currently offer. Moreover, the federal government's plans to improve its
efficiency through automation, including expansion
of its Vendor Express program, will require banks
to develop the capability of processing financial
EDI payments for the businesses providing goods
and services to the government.
At the same time, a considerably greater understanding of the costs and benefits of financial EDI
is needed before determinations can be made about
its potential for increasing the efficiency of the
payments system in the United States. Thus, the
types of payment services used by businesses in the
future will ultimately be based on the collective
results of individual businesses' cost-benefit
analyses and their demands for specific payment
services.
APPENDIX A: EDI
FORMATS
The American National Standards Institute (ANSI)
is the coordinating organization in the United States
for the development of national standards for EDI.
ANSI members establish standards used to meet
this country's business needs. In 1979, ANSI
formed the Accredited Standards Committee (ASC)
X12 to set inter-industry standards for electronic
data interchange for business transactions. It is
currently supported by more than 300 organizations representing corporations, financial institutions, government agencies, trade associations,
vendors, and consultants.
Transaction Data Sets
ANSI ASC X12 standards are cross-industry, public standards that may be used by any company, in
any industry, for the exchange of information. The
format standards, called transaction data sets, have
been developed for many business documents.
Each ANSI transaction data set is identified by a
three-digit number. For example, a payment orderremittance advice is an ANSI 820 transaction, and
a purchase order is an ANSI 850 transaction.
The payment order-remittance advice (ANSI
820) is the most common transaction data set used
forfinancialEDI. A payment order instructs a bank
to take funds out of the payor's account and send
the funds to the bank maintaining the account of a
trading partner. A remittance advice provides specific information about the payment. For example,
a $500 payment might be made to pay $100 for
invoice number 1, $200 for invoice number 2, and
$200 for invoice number 3. The ANSI 820 format
permits a company to transmit a variable amount of
remittance information, depending on the requirements of each transaction.
Business-to-Business Payments and the Role of Financial Electronic Data Interchange
277
ACH Format Standards
APPENDIX B: FLOAT BENEFITS OF CHECKS
The National Automated Clearing House Association (NACHA) is a national trade association whose
members are local ACH associations. Since its
formation in 1974, the NACHA has promulgated
the formats used for ACH transfers. To support
business-to-business payments, the NACHA has
developed the following four ACH formats:
(1) cash concentration and disbursement (CCD),
(2) cash concentration and disbursement plus
(CCD+), (3) corporate trade exchange (CTX), and
(4) corporate trade payment (CTP).
The cash concentration and disbursement
(CCD) format is the simplest of the four. It consists
of a payment record in which a reference number
may be included to assist in identifying the payment. No other explanatory data may accompany the payment record, however. If a company
wishes to transmit more extensive remittance data
to its trading partner, the company must use a
different ACH format or transmit the information
separately.
The cash concentration and disbursement plus
(CCD+) format uses the CCD payment record and
is accompanied by one additional record, called an
addendum record, which provides information
explaining the purpose of the payment. Data
included in the addendum record may be sent in
ANSI ASC X12 payment order-remittance advice
and the health care claim payment-advice formats
or NACHA-endorsed banking conventions, including formats for electronic dealer drafting, child
support payments, and tax payments.
The corporate trade exchange (CTX) format
consists of a payment record, which may be
accompanied by as many as 9,999 addenda records. Data included in the addenda records may
be sent in the ANSI ASC X12 formats or NACHAendorsed banking conventions.
The corporate trade payment (CTP) was the
first corporate format developed by the NACHA
and may be accompanied by as many as 9,999
addenda records. The data formats of the addenda
records were designed to be compatible with
most corporate accounting and receivable systems. Because ANSI ASC XI2 standards are
replacing the formats used in the CTP addenda
records, use of the format will be discontinued in
April 1996.
In their 1987 study, Humphrey and Berger calculated that the average value of float to businesses
issuing checks amounted to about $1.88 per
check.18 This appendix explains Humphrey and
Berger's calculations and updates them for 1993.
1987 Calculations. Humphrey and Berger used
the following formula to calculate the value of float
per business check:
Average value
of float =
(average value of business check)
x (average number of float days)
x (average ninety-day Treasurybill rate/365), or
$1.88 = ($2,636) x (4.5) x (0.05775/365).
The values used in the formula were calculated
as follows:
1. To calculate the average value of a business
check, the following assumptions were made:
a. Consumers write 55 percent of checks;
businesses, 40 percent; and the federal government, 5 percent.19
b. The average value of all checks written
was $1,188, based on staff estimates that 47 billion
checks were written in 1987, with a value of
$55.8 trillion.
c. The average value of a consumer check
was $145.20
d. The average value of a federal government
check was $1,074. (In 1987, the Federal Reserve
Banks processed 568 million government checks,
with a value of $610.7 billion.)
18. See "Market Failure and Resource Use," pp. 45-86.
19. See "Displacing the Check," pp. 36-7.
20. Robert Avery, Gregory Elliehausen, Arthur Kennickell, and
Paul Spindt, "Changes in the Use of Transaction Accounts and
Cash from 1984 to 1986," Federal Reserve Bulletin, vol. 73 (March
1987), table 3, p. 182.
That study estimated that the average value of a consumer check
in 1986 was $130. Humphrey and Berger applied a 4 percent
inflation factor to the 1986 figure, resulting in a 1987 average value
of $145.
278
Federal Reserve Bulletin • April 1994
e. The average value of a business check was
estimated to equal $2,636, or
{$1,188 - [(0.55 x $145) + (0.05 x $1,074)]} / 0.40.
2. The average number of float days, 4.5, was
the researchers' best estimate, based on conversations with industry and Federal Reserve experts.
3. In 1987, the average ninety-day Treasury bill
rate was 5.775 percent.
1993 Calculation. To update the value of float to
businesses, Humphrey and Berger's formula was
used, and the values used in the formula were
calculated as follows:
1. To calculate the average value of a business
check, the following assumptions were made:
a. The distribution of checks written by consumers, businesses, and the federal government
was assumed to be the same as in 1987.
b. The average value of all checks was
$1,150, based on staff estimates that 59.4 billion
checks were written in 1993, with a value of
$68.3 trillion.
c. The average value of a consumer check
was estimated to be $183 by applying a 4 percent
annual inflation factor to Humphrey and Berger's
estimate of $145.
d. The average value of a federal government
check was $1,113. (In 1993, the Federal Reserve
Banks processed 480 million government checks,
with a value of $534.2 billion.)
e. The average value of a business check was
estimated to equal $2,484, or
{$1,150 - [(0.55 x $183) + (0.05 x $1,113)]} / 0.40.
2. The average number of float days was assumed to be the same as that used by Humphrey
and Berger. (Although the Federal Reserve System
and others have improved the check collection
process since 1987, mail float is the largest single
factor in business check float, and it was assumed
that mail time has not decreased significantly.)
3. In 1993, the average ninety-day Treasury bill
rate was 3.6 percent.
4. The equation then becomes
$1.10 = ($2,484 x 4.5) x (0.036/365).
Finally, two assumptions were changed to test
their effect on the calculated float value. First, the
value of a consumer check was assumed not to
have increased between 1987 and 1993. (The average value of a consumer check may not have risen
because electronic payments, such as automated
bill payments and automated teller machine transactions, have replaced some checks.) Given this
assumption, the average value of a business check
would equal $2,536, or
{$1,150- [(0.55 x $145) + (0.05 x $1,113)]} / 0.40,
and the value of float per business check would
equal $1.12, that is,
[($2,536 x 4.5) x (0.036/365)].
Second, it was assumed that the average number
of float days has declined from 4.5 to 3.5. With this
assumption, the average value of float equals $0.86
per business check, or
[($2,536 x 3.5) x (0.036/365)].
Treasury and Federal Reserve
Foreign Exchange Operations
This quarterly report describes Treasury and System foreign exchange operations for the period
from November through January 1994. It was
presented by Peter R. Fisher, Senior Vice President
and Manager for Operations for the Federal
Reserve Bank of New York. Nicholas Pifer
was primarily responsible for preparation of the
report.1
The dollar appreciated modestly against most major
currencies during the November-January period. It
rose 2.9 percent against the German mark, 0.1 percent against the Japanese yen, and 0.5 percent on a
trade-weighted basis.2 The U.S. monetary authorities did not undertake any intervention operations
during the period.
THE DOLLAR ENDS THE PERIOD
UNCHANGED AGAINST THE YEN
VIRTUALLY
After opening at ¥108.64 on November 1, the dollar rose against the yen in thin year-end markets,
reaching a high of ¥113.55 before coming down to
end the period unchanged. Initially, the dollar rose
as market participants turned their attention to
Japan's lingering recession and to the prospect of
interest rate differentials moving in favor of the
dollar. This shift in focus was prompted by continued weakness in Japanese money supply growth,
employment, industrial production, and retail sales.
Moreover, Japanese equity prices dropped sharply
in November—with the Nikkei stock index falling
1. The charts for the report are available from Publications
Services, Board of Governors of the Federal Reserve System, Mail
Stop 127, Washington, DC 20551.
2. The dollar's movements on a trade-weighted basis are measured using an index developed by the staff at the Board of
Governors of the Federal Reserve System.
nearly 17 percent over the course of the month—
and remained volatile throughout December.
Growing pessimism over the economic outlook for
Japan, as well as the uncertain prospects for the
Hosokawa government's long-awaited fiscal stimulus package, helped fuel expectations of an additional cut in the Bank of Japan's Official Discount
Rate (ODR).
Over the course of December, trading activity in
the dollar-yen exchange market started to ebb as
first corporate and then interbank participants
pulled back from the market ahead of the year-end
holidays. Japanese exporters, who regularly sell
dollars to the market to hedge their foreign currency receivables, were notably absent toward the
end of the month. In this environment, market
conditions were increasingly characterized by the
dominance of technically oriented traders who
bought up the U.S. currency in anticipation of
further dollar gains, and the dollar rose gradually
through December from a low of ¥107.37 to a high
of ¥112.05.
In late December, Treasury Secretary Bentsen
was asked whether he saw a need to intervene in
the foreign exchange market to stem the yen's
decline. He responded that he did not think intervention would be necessary but rather thought
that the foreign exchange market would focus on
Japan's substantial trade surplus when determining
the relative value of the dollar and the yen. Secretary Bentsen expressed concern that Japan was
not meeting its commitment to achieve domestic
demand-led growth and a significant reduction in
its external surplus. He expanded on this view in
early January when he said that the proper way for
Japan to address its economic imbalances was
through a combination of effective fiscal stimulus
and market-opening measures, not through a depreciation of the yen.
The dollar reached its period high of ¥113.55 on
January 5 but soon drifted lower when expected
280
Federal Reserve Bulletin • April 1994
1. Federal Reserve reciprocal currency arrangements
Millions of dollars
Institution
Amount of
facility,
January 31, 1994
Austrian National Bank
National Bank of Belgium
Bank of Canada
National Bank of Denmark
Bank of England
Bank of France
Deutsche Bundesbank
Bank of Italy
Bank of Japan
250
1,000
2,000
250
3,000
2,000
6,000
3,000
5,000
Bank of Mexico
Netherlands Bank
Bank of Norway
Bank of Sweden
Swiss National Bank
700
500
250
300
4,000
Bank for International Settlements
Dollars against Swiss francs
Dollars against other authorized European
currencies
Total
600
1,250
30,100
movements in interest rates failed to materialize.
Market participants turned their attention to the
shifting fortunes of Japanese political reform and to
bilateral trade talks with the United States, but they
were unable to develop a lasting view on how the
success or failure of these two initiatives would
affect exchange rates. Reflecting the market's
uncertainty about the near-term direction of the
dollar against the yen, the implied one-month
option volatility for the dollar-yen exchange rate
spiked higher in the second half of January. At the
same time, foreign investors purchased the equivalent of $10.5 billion in Japanese equities during
January; theseflowscontributed to a sharp rebound
in Japanese stock prices and helped support the
yen.
The upper house of the Japanese Diet passed
Prime Minister Hosokawa's political reform bill on
January 29, permitting the government to turn its
attention to other policy issues. As the period came
to a close, U.S.-Japanese trade talks were continuing and the Japanese government was reportedly at
work on a record stimulus package for the economy. Reflecting the positive implications of such a
package for Japanese domestic demand growth, the
Nikkei surged nearly 8 percent on the last day of
the period, and expectations of additional interest
rate cuts in Japan receded even further. These factors helped strengthen the yen, and the dollar closed
at ¥108.65 on January 31.
DOLLAR APPRECIATES MODESTLY
AGAINST THE MARK
During November and most of December, the dollar was relatively stable against the German mark,
trading in a narrow range around the DM1.70 level.
Market sentiment toward the dollar was generally
positive, however, with dealers taking note of the
increasingly divergent paths of the U.S. and German economies. In this environment, market participants began to anticipate a fairly rapid convergence of short-term German and U.S. interest rates.
The Bundesbank, which had surprised the foreign
exchange market in late October, when it cut its
discount and Lombard rates 50 basis points,
trimmed its key money market repurchase rate
from 6.40 percent at the start of the period to
6.25 percent on December 1. At its December 2
council meeting, the Bundesbank announced a prefixed rate of 6.0 percent for the next five weekly
auctions of fourteen-day repurchase agreements.
Market participants generally interpreted this move
as an effort to nudge short-term interest rates lower
while also dampening speculation of further monetary easing.
The dollar broke out of its trading range in late
December, jumping four pfennigs higher in the last
three days of the month. Dealers expressed initial
skepticism over the rise, which occurred in thin
year-end markets. Nonetheless, the dollar subsequently extended its gains to reach a twenty-eightmonth high of DM1.7562 on January 14. As the
dollar moved higher, it gained broad support from a
series of U.S. and German statistical releases—
notably retail sales, factory orders, and the purchasing managers index for the United States, and
industrial production, unemployment, and real
gross domestic product for Germany—that further
contrasted economic conditions in the two countries. Well-publicized financial setbacks at two
large German companies, along with a modest
selloff in German bonds and equities, added to
the market's perception of a still fragile German
recovery.
During the latter part of January, the dollar settled into a new trading range against the mark.
Expectations of near-term volatility in the dollarmark exchange rate dropped off sharply, as the
implied one-month option volatility fell from
nearly 12 percent in early January to less than
Treasury and Federal Reserve Foreign Exchange Operations
2.
N e t profits or l o s s e s ( - ) o n U.S. Treasury
and Federal R e s e r v e foreign e x c h a n g e operations1
Millions of dollars
Period and item
Valuation profits and losses on
outstanding assets and liabilities
as of October 31, 1993
Realized profits and losses,
November 1, 1993January 31, 1994
Valuation profits and losses on
outstanding assets and liabilities
as of January 31, 1994
Federal
Reserve
U.S. Treasury
Exchange
Stabilization
Fund
3,368.5
2,839.0
0.0
0.0
2,868.4
2,513.0
1. Data are on a value-date basis.
9 percent at month-end. While market rumors of
central bank sales helped cap the dollar's rise,
movements in actual and expected interest rate
differentials also weighed on the U.S. currency. At
its two January meetings, the Bundesbank Council
kept its repurchase rate fixed at 6.0 percent, as it
disappointed the market and further deflated expectations about the pace of German interest rate cuts.
Similarly, a perceived lack of inflationary pressures
in the United States led dealers to rethink their
expectations of a near-term hike in short-term U.S.
interest rates. During most of January, therefore,
281
differentials in three-month Eurodeposit rates, as
well as those in the expected three-month deposit
rates implied by futures prices, moved in the
mark's favor. The dollar closed the period on January 31 at DM1.7338.
OTHER
OPERATIONS
As of the end of January, cumulative valuation
gains on outstanding foreign currency balances
were $2,868.4 million for the Federal Reserve and
$2,513.0 million for the Treasury's Exchange
Stabilization Fund (ESF). There were no realized
profits or losses for the quarter.
The Federal Reserve and the ESF regularly
invest their foreign currency balances in a variety
of instruments that yield market-related rates of
return and have a high degree of liquidity and
credit quality. A portion of the balances is invested
in securities issued by foreign governments. As of
the end of January, the Federal Reserve and the
ESF held either directly or under repurchase agreements $10,740.5 million and $10,436.2 million
respectively in foreign government securities
valued at end-of-period exchange rates.
•
282
Industrial Production and Capacity Utilization
for February 1994
Released for publication March 15
Industrial production rose 0.4 percent in February
after a gain of 0.5 percent in January. The California earthquake and bad weather slowed growth in
both months in many manufacturing industries,
while cold snaps boosted production at electric and
gas utilities. The temperature, however, was not as
abnormally cold in February as in January; as a
result, the output at utilities fell back somewhat
from its elevated January level. At 115.1 percent of
its 1987 average, industrial production was 4.8 per-
Industrial production indexes
Twelve-month percent change
Twelve-month percent change
1988
1989
1990
1991
1992
1993
1988
1994
1989
1990
1991
1992
1993
1994
Capacity and industrial production
Ratio scale, 1987 production = 100
Ratio scale, 1987 production = 100
— Total industry
140
Capacity
— Manufacturing
^
_
100
___
__
V
Production
1
1
1
1
1
1
1
1
'
120
_
Production
80
1
140
— — :
Capacity
120
1
1
1
1
1
1
1
1
Percent of capacity
80
1
1
1
1
Percent of capacity
Manufacturing
Total industry
90
Utilization
Utilization
80
70
I I I I I I
1980
1982
1984
1986
1988
1990
J
I L
1992
1994
J
1980
I I L
1982
1984
J
All series are seasonally adjusted. Latest series, February. Capacity is an index of potential industrial production.
I I I I L
1986
1988
100
1990
1992
1994
283
Industrial production and capacity utilization, February 1994 1
Industrial production, index, 1987= 100
Percentage change
Category
1994
1993
1993
Nov.
r
Dec.
r
Jan.
r
Total
112.8
114.0
r
1994 2
2
Jan.
r
Feb.p
Nov.
115.1
.8
1.0
.5
.8
114.6
Dec.
r
.9
Feb.p
Feb. 1993
to
Feb. 1994
.5
.4
4.8
Previous estimate
112.8
113.9
114.4
Major market groups
Products, total 3
Consumer goods
Business equipment
Construction supplies
Materials
112.1
109.7
139.7
99.5
113.9
113.0
110.1
141.9
101.3
115.5
113.6
110.5
143.4
101.0
116.1
114.0
110.0
144.7
100.3
116.7
.8
.4
1.4
.9
1.0
.8
.4
1.6
1.8
1.4
.5
.4
1.0
-.3
.6
.4
.4
1.0
-.8
.5
4.3
1.9
11.3
4.4
5.5
Major industry groups
Manufacturing
Durable
Nondurable
Mining
Utilities
114.0
118.0
109.1
96.9
116.1
115.4
120.1
109.5
97.2
116.5
115.6
120.7
109.4
98.1
120.7
116.3
121.8
109.6
98.9
119.1
1.0
1.5
.3
-1.1
1.0
1.2
1.8
.3
.3
.3
.2
.5
-.1
.9
3.6
.6
.9
.2
.8
-1.3
5.4
8.6
1.3
1.8
1.4
Capacity utilization, percent
1993
Average,
1967-92
Low,
1982
High,
1988-89
1994
Feb.
Nov.1
Dec. r
Jan. r
Feb.p
Total
81.9
71.8
84.8
81.2
82.2
83.0
83.3
83.4
2.0
Manufacturing
Advanced processing
Primary processing .
Mining
Utilities
81.2
80.6
82.2
87.4
86.7
70.0
71.4
66.8
80.6
76.2
85.1
83.3
89.1
87.0
92.6
80.2
78.8
83.4
86.9
88.1
81.5
79.8
85.5
87.5
86.4
82.3
80.5
86.4
87.8
86.7
82.3
80.7
86.0
88.6
89.7
82.6
81.1
86.1
89.4
88.4
2.3
2.8
1.1
-1.0
1.1
1. Data seasonally adjusted or calculated from seasonally adjusted
monthly data.
2. Change from preceding month.
cent higher in February than it was a year earlier.
The utilization of total industrial capacity edged up
0.1 percentage point, to 83.4 percent, which is
2.2 percentage points above the year-ago level but
1.4 percentage points below the 1988-89 peak.
When analyzed by market group, the data show
that the output of consumer goods advanced another 0.4 percent in February. Once again the gain
was concentrated in the output of automotive products, which rose 5.3 percent. The production of
other durable consumer goods declined 0.6 percent,
and the output of nondurable consumer goods
edged down 0.2 percent as residential use of electricity declined.
The output of business equipment increased
I.0 percent for the second month in a row and was
II.3 percent higher than a year earlier. The growth
in the production of information processing equipment and motor vehicles continued to be quite
3. Contains components in addition to those shown,
r Revised,
p Preliminary.
rapid. In contrast, the growth in the output of
industrial and other equipment has flattened so far
this year; the production of commercial aircraft has
continued to decline, as has the output of defense
and space equipment.
The output of construction supplies fell for a
second month; construction activity continued to
be affected by weather conditions. The production
of industrial materials rose 0.5 percent, with
strength most evident in durable materials, particularly semiconductors and other parts used to
make motor vehicles and computers. The output of
energy materials edged down after a 1.9 percent
surge in January.
When analyzed by industry group, the data show
that manufacturing output expanded 0.6 percent in
February after a 0.2 percent increase in January.
Production by manufacturers of durable goods
grew 0.9 percent, boosted by the continued strong
284
Federal Reserve Bulletin • April 1994
growth in motor vehicles, computers, and related
parts. Production by manufacturers of nondurable
goods increased only 0.2 percent as rebounds in the
paper and food processing industries were mostly
offset by declines in textiles, apparel, leather goods,
and chemicals and related products. The output at
utilities, which had surged 3.6 percent in January,
eased 1.3 percent because the weather in the latter
half of February was more temperate than it was in
January. The output at mines increased 0.8 percent,
in part because of a strong gain in coal production.
The utilization rate in manufacturing rose to
82.6 percent; the rate in advanced-processing
industries increased 0.4 percentage point, and that
in primary-processing industries inched up 0.1 percentage point. At 86.1 percent, the utilization rate
for primary-processing industries is nearly 4 percentage points above its 1967-93 average but
3 percentage points below its 1988-89 high; the
rate for the advanced-processing group is closer to
its longer-run average. Among the products that
have contributed to the above-average rates are
motor vehicles and parts, lumber, steel sheet, and
computer parts. Rates remain noticeably below
average for aluminum, aerospace and miscellaneous transportation equipment, foods, apparel, and
printing and publishing.
•
285
Statements to the Congress
Statement by John P. LaWare, Member, Board
of Governors of the Federal Reserve System,
before the Subcommittee on Financial Institutions, Supervision, Regulation, and Deposit Insurance of the Committee on Banking, Finance
and Urban Affairs, U.S. House of Representatives, February 1, 1994
I appreciate the opportunity to present the
views of the Federal Reserve Board on the
proposed legislation on Fair Trade in Financial
Services (H.R.3248). Given its role, as the
central bank, in ensuring a healthy and efficient
environment for the provision of financial services, the Federal Reserve has a special interest
in this legislation.
On several previous occasions, before other
committees, I have presented the views of the
Federal Reserve on various proposals for legislation on Fair Trade in Financial Services. I will,
therefore, keep my testimony brief and confine
myself to those key points we consider to be of
critical importance.
As I have emphasized before, the Federal
Reserve shares the objectives of the proposed
legislation. These objectives are important and
their achievement desirable. U.S. financial firms
deserve to have the same opportunities to conduct operations in foreign financial markets as
domestic firms have in those markets. They do
not now have those opportunities in all markets.
According U.S. firms such treatment would benefit not only them but also the host foreign
countries themselves and the world financial
system in general.
However, while sharing these important objectives, the Federal Reserve continues to oppose
this kind of legislation. We oppose it for essentially two reasons. First, the existing U.S. policy
of national treatment has served our country
well. The U.S. banking market, and U.S. financial markets more generally, are the most efficient, most innovative, and most sophisticated in
the world. Consumers of financial services in the
United States are provided with access to a deep,
varied, competitive, and efficient banking market
in which they can satisfy their financial needs on
the best possible terms. Foreign banks, by their
presence in the United States and with the resources they bring from their parents, make a
significant contribution to our market and to our
economic growth; they enhance the availability
and reduce the cost of financial services to U.S.
firms and individuals as well as to U.S. public
sector entities.
For these reasons, we simply do not consider
legislation like H.R.3248 to be in our own selfinterest. If we adopt such legislation, we must be
prepared to forgo the considerable benefits of
foreign banks' participation in our market if U.S.
banks are not allowed to compete fully and
equitably abroad.
Second, I note that the multilateral negotiations on trade in financial services will continue
over the next two years, as agreed in the justconcluded Uruguay Round. We believe that
these negotiations offer the best hope for achieving further progress in opening foreign financial
markets for U.S. financial firms, and we strongly
support the Treasury in its efforts in those negotiations.
We believe that the upcoming negotiations are
at a critical juncture. It is incumbent upon the
United States to continue to provide leadership
by example in this area for the rest of the world
in order to preserve the principle of free, rather
than reciprocal, trade. Free trade must continue
to be our ultimate goal. Therefore, we do not
agree with those who assert that the proposed
Fair Trade in Financial Services legislation is
desirable or necessary in the context of those
negotiations. Indeed, it is our view, based upon
experience, that market forces and the desire of
foreign officials to enhance the functioning of
domestic financial markets are often the most
potent forces for financial market liberalization;
286
Federal Reserve Bulletin • April 1994
the negotiations provide a valuable framework
for guiding that liberalization.
That said, however, if other views prevail on
the need for Fair Trade in Financial Services
legislation, we would prefer the current proposal
(H.R.3248) over other proposals because it clarifies the possible sanctions authority and procedures in several important respects.
First, we believe that, as between financial
and trade policy officials, it is more appropriate
that the Secretary of the Treasury have authority to make determinations regarding whether
denial of national treatment to U.S. banking
organizations by a foreign country has a significant adverse effect on such organizations,
as well as recommendations regarding sanctions in appropriate cases. The Department of
the Treasury is better positioned to make such
determinations, in view of the information
available to the Treasury regarding the needs
of both providers and consumers of financial
services.
Second, the requirement that the secretary
consult with other relevant officials, including
appropriate banking officials, before making such
determinations helps to ensure that broader perspectives are incorporated in the decisionmaking
process.
Third, the proposed legislation recognizes, in
the residual discretion granted to the banking
agencies, that imposition of sanctions in some
circumstances, even if otherwise warranted,
might be inconsistent with other objectives, such
as the safe and sound operation of the financial
system or the least-cost resolution of a failed
bank.
Fourth, the proposed legislation excepts from
its procedures countries that have provided to
the United States a binding commitment to substantially full market access and national treatment in financial services. This language seems
to make clear that the legislation is intended to be
an adjunct to the ongoing negotiations with countries that have not yet made such commitments
and is not a rejection of the principles of free
trade and national treatment.
Finally, we believe that it is appropriate and
important that no provision is included in
H.R.3248 for retaliation across financial services
sectors. As a consequence, even if, for example,
U.S. securities or mutual funds might be having
problems in other countries, U.S. banks and
banking markets should not be jeopardized.
In conclusion, the desirability of market liberalization as an objective in the financial sector, as
in other sectors, is virtually universally accepted.
The United States has the opportunity to continue to exercise leadership in this area. I sincerely hope we take that opportunity. If not, any
Fair Trade in Financial Services legislation
should include the important improvements
noted above in the current proposal. I would also
like to echo the hope, recently expressed in a
joint statement by the Bankers' Association for
Foreign Trade, the Bankers Roundtable, and the
American Bankers Association, that the retaliatory mechanism of any Fair Trade in Financial
Services Act will never have to be used.
•
Statement by Lawrence B. Lindsey, Member,
Board of Governors of the Federal Reserve System, before the Subcommittee on General Oversight, Investigations, and the Resolution of
Failed Financial Institutions of the Committee
on Banking, Finance and Urban Affairs, U.S.
House of Representatives, February 1, 1994
quate credit to help meet their needs. We at the
Federal Reserve Board believe that the law has
produced substantial benefits, even though it has
not—nor should it be expected to have—cured
all the problems that still plague many of our
cities.
As you know, however, the federal financial
institution regulatory agencies are actively engaged in an effort to reform the CRA by amending our regulations. We hope to make them more
objective and the ratings under them more uniform while, at the same time, imposing less of a
paperwork burden. This effort is a challenging
I appreciate the opportunity to appear before this
subcommittee to discuss Community Reinvestment Act (CRA) reform. The Community Reinvestment Act is vitally important to ensuring that
all segments of communities have access to ade
Statements
one; it involves a substantial commitment by the
agencies and encompasses many difficult issues.
We are also very conscious of the fact that what
we do could significantly affect financial institutions and the public alike and that care must be
exercised for such an important project. Because
we are midway in the process and are still
receiving comments from the public, our report
to you will necessarily be somewhat preliminary.
HISTORY
REFORM
OF THE CRA AND THE
EFFORT
CURRENT
Before discussing the proposal to reform the
CRA, I would like to briefly review the law and a
little of its history because that history is very
relevant to the reform project. The Community
Reinvestment Act calls for the financial regulatory agencies to use their examination authority
to encourage institutions to help meet the credit
needs of their communities, including low- and
moderate-income areas, consistent with safe and
sound business practices. The agencies are required to assess the community lending records
of the institutions they supervise as part of their
examinations and to take into account those
records in considering applications. The law,
however, gives no other indication how the agencies are to accomplish these tasks and does not
define key concepts, such as how an institution's
community is defined or what constitutes satisfactory performance. A considerable responsibility, therefore, was placed by the Congress on the
agencies.
The regulations adopted in 1978 by the financial regulatory agencies focused, at least in part,
on factors related to the process used by institutions to determine the credit needs of their community and how they responded to those needs.
To avoid credit allocation, and to allow for the
maximum amount of creativity by institutions in
meeting the varying credit needs of their localities, these regulations did not attempt to prescribe any particular level of lending. Instead,
the evaluation of a financial institution's performance has been based on the application of
twelve assessment factors, including how community credit needs are ascertained, the geographic distribution of loans, the record of open
to the Congress
287
ing and closing branches and providing services,
participation in local community development
projects, and the financial and legal capability of
the institution. In determining how well an institution ascertains the credit needs of its community, examiners have taken into account such
matters as the institution's community outreach
and credit marketing.
In the course of our review of the CRA, we
have heard from many consumer and community
groups about how valuable the law has been in
getting credit extended in low- and moderateincome areas. Some groups put the success of
the CRA at $30 billion, which they estimate to be
the level of CRA commitments for new credit. I
suspect that the total impact of the CRA considerably exceeds the $30 billion estimate. And, to
date, this impact has occurred with a comparatively light hand from Washington. Indeed, one
of the strengths of the present system is that it
allows great flexibility in fashioning programs to
meet the different and changing credit needs of
this country's diverse communities.
Despite the significant benefits that communities have seen from the CRA, the approach taken
in the regulations, together with the agencies'
implementation of that approach, has generated a
good deal of criticism. Financial institutions have
frequently complained that they are burdened by
imprecise rules and inconsistent evaluations on
the one hand and overly prescriptive documentation requirements on the other hand. Small
institutions, in particular, complain about the
costs of compliance and contend that the law is
unnecessary because they must serve their entire
community to succeed. Further, it appears to
some that there is little incentive for institutions
to try to achieve an outstanding rating, especially
when applications filed by institutions with outstanding CRA ratings may still be protested by
the public.
Community representatives have complained
that the regulators emphasize documentation of
CRA activities in their examinations of financial
institutions instead of actually measuring the
degree to which they are meeting community
credit needs. They point to the fact that almost
90 percent of institutions receive "passing" ratings and to the fact that the agencies rarely deny
applications for CRA reasons alone as evidence
288
Federal Reserve Bulletin • April 1994
that regulatory enforcement of the law has been
weak. They also wish to have a more formal role
in the evaluation process.
Although we have tried to respond to these
various concerns through modifying our process
and providing official guidance, it has become
clear that CRA enforcement needs a broad-based
review to see whether improvements are in order
and if so what they should be. Consequently, the
President requested that the Board, the Office of
the Comptroller of the Currency, the Federal
Deposit Insurance Corporation, and the Office of
Thrift Supervision reexamine the regulations.
The President asked the agencies to improve
them by addressing several areas of concern. The
objectives outlined by the President, which we
also believe are important to the ultimate reform
of the CRA, include the following:
• Replacing paperwork and process-related requirements with clear, objective criteria that
measure actual performance
• Working together to improve uniformity in
evaluations and instituting more effective sanctions for consistently poor CRA performance.
The ultimate goal, according to the President's
request, is to "replace paperwork and uncertainty with greater performance, clarity and objectivity." We are in full accord with this objective.
The agencies held a series of seven public
hearings throughout the United States to gather
information on the best way to amend our CRA
regulations and enhance our enforcement. More
than 250 witnesses testified, and many raised
common concerns. We were strongly encouraged to revise our regulations so that CRA performance would be evaluated as objectively as
possible and to give better guidance on how
different types and levels of performance will be
rated.
While witnesses stressed that the CRA should
continue to focus on lending, many also recommended that greater weight be given to investments (such as in community development
projects) and the provision of banking services
(such as through locating branches and providing
low-cost accounts or noncustomer check cashing). Many witnesses requested that institutions
be required to collect more data on the geo
graphic distribution of loans so that they would
be better able to evaluate an institution's CRA
performance.
Representatives of smaller institutions, on the
other hand, generally criticized the burden and
expense they bear from existing documentation
requirements. Other witnesses recommended
that institutions be allowed to develop their own
CRA plans against which their performance
would be rated, with these plans reviewed by the
agencies. Finally, most witnesses, other than
those fromfinancialinstitutions, opposed providing a safe harbor from CRA protests to institutions rated satisfactory or outstanding.
After these meetings, we developed the proposed changes to our CRA regulations in conjunction with the other agencies and published
them on December 21, 1993. Comment on the
proposal has been requested by March 24. We
have extended our comment period to that date
to accommodate the numerous requests for time
to do a complete analysis of a very complex
proposal. We do not know how many comments
will ultimately be received and whether fundamental changes in our proposed approach will be
called for. Although I cannot state when a final
rule will be adopted, we do intend to move the
process along as quickly as is appropriate. And I
want to emphasize that I would not expect any
final rule to become mandatory until after an
adequate lead time—particularly if the proposed
data collection requirements, or something similar, are retained.
Most important, I am committed to making
sure that our final rule will work. We will do no
one any favors by promulgating a rule that is
operationally untenable. During this comment
period, I am paying particular attention to questions and or complaints about the details of
implementation and of unintended consequences
from how the proposal will work in practice.
BALANCING
COMPETING
OBJECTIVES
With this proposal, we have attempted to achieve
the difficult and important goal of balancing the
competing concerns of providing greater specificity on what is expected on the one hand
without dictating credit decisions on the other.
Statements
The proposal attempts to clarify our expectations for CRA performance by (1) creating a
new, more numerically driven system for assessing CRA performance in three critical elements: first and foremost, lending and secondarily, services and investments; (2) requiring
the collection of data on the number, amount,
and geographic location of small business, small
farm, and some consumer loans to use in the
assessments; (3) providing for streamlined review of small institutions; (4) permitting institutions to submit their CRA plan in advance to
their regulator for approval as an alternative to
being evaluated under the general assessment
scheme; and (5) specifying the regulatory sanctions that are possible from noncompliance with
the regulations.
You asked how we balanced the competing
interests of financial institutions and community developers in developing the CRA reform
proposal. I would like to think that in most
respects the interests of banks and community
representatives are consistent rather than at
odds. Both want local lending institutions to be
strong and viable so that they will have the
capacity to effectively serve their communities
over the long term. Both want to ensure that
funded projects make economic sense for
lender and borrower alike. Both also have a
common interest in a fair and consistent CRA
evaluation system that avoids unnecessary paperwork. To be sure, community groups may
favor more data collection, greater public participation, and more stringent accountability
than some lenders, but, on balance, I believe
there is greater commonality of interest among
the groups in the goals of reform than is often
assumed.
Having said that, however, there are some
specific points in the proposal where views may
differ somewhat—for example, on the appropriate cut-oflf level for the more streamlined review
procedures for "small banks." Such points of
difference seem unavoidable in a proposal as
comprehensive and complicated as ours, and I
am sure the public comment will help us resolve
some of the disagreements about the right approach. I can assure you that we have struggled
throughout this process to achieve an appropriate balance to the competing interests when it
to the Congress
289
does exist; how well we have done this will be
judged in the public comment process.
ISSUES RAISED BY THE
PROPOSAL
Given Comptroller Ludwig's description of the
proposal for the subcommittee, I will not also
review the details. As is well known, however,
although the Board joined with the other agencies in seeking public comment on the proposal,
Board members have a variety of concerns about
the proposal. For example:
• The proposal is intended to provide greater
certainty to institutions in the type of evaluation
they might expect to receive, primarily based on
their performance relative to others. Yet, measuring an institution's performance against other
lenders in the service area at year-end means that
the standard necessarily will befluidfrom year to
year.
Moreover, the terms used to describe different
levels of performance include "roughly comparable," "significant amount," and similar words
that are anything but precise. These general
standards have been proposed, in part, to avoid
giving specific numbers that could result in the
government's seeming to specify allocation of
the amount, type, or terms of credit an institution
must provide for a specific purpose.
Institutions will have to speculate about the
activities of their competitors, and examiners
will be forced to interpret these terms on a
case-by-case basis, when evaluating individual
institutions. Thus, an institution may have some
of the same uncertainty about how its performance will be evaluated that it has now. To some
extent therefore, we remain plagued by the dilemma of how to provide better guidance and
certainty in the CRA area without reducing
needed flexibility. Our proposal, ambitious as it
is, may have deferred, rather than answered,
some of the hard questions. Resolving these
issues undoubtedly will take place over an extended period of time, and this will certainly
prove frustrating to both financial institutions
and community groups.
• Other problems may be associated with the
"market share" test. The market share for other
than mortgage loans will be computed only in
290
Federal Reserve Bulletin • April 1994
comparison with other depository institutions
that must report data. Leaving out small depositories (generally less than $250 million in assets)
and nondepositories, the percentage of those
who are subject to the CRA and included in the
market share comparison will be low. In some
localities, a very few institutions or even a single
one may be included in the "market." This
inclusion could cause practical problems and
anomalous results.
• The new requirement for summary reporting of the number, amount, and geographic
distribution of small business, mortgage, and
some consumer loans is a significant one. It is
important to the goal of making the CRA process more quantifiable; yet it could be very
costly. For covered commercial banks, the annual cost for the small business portion of the
data collection alone could approach $21 million. In all, about 3,400 institutions will be
required to gather new data.
It is therefore a fair question whether it is
desirable to impose the burden of the new data
collection system because so much subjectivity
necessarily is also a key part of the new system.
Because of these concerns, we have also asked
for a discussion of burdens and benefits of this
requirement in the public comments.
• The appropriateness of the streamlined review procedure for small institutions with less
than $250 million in assets will surely be questioned in the comments—as well as the impact of
the presumption that such small institutions have
a "reasonable" loan-to-deposit ratio if it is 60
percent. We have heard from the small banks
that have commented on the proposal thus far
that this ratio is an unrealistically high loan-todeposit one for them, especially for good quality
loans, and we have some concerns that small
institutions who want to benefit from the streamlined CRA review might be forced to imprudently
change their lending standards to meet this presumption.
• There are other controversial and possibly
problematic aspects to our proposal, such as
whether the alternative evaluation for banks with
preapproved plans is workable, and whether we,
in fact, should be treating institutions receiving
low ratings as being in violation of the regulation
and subject to our enforcement authority. These
important issues will also receive considerable
attention by us and, I hope, by the public.
LEGISLATIVE
AMENDMENTS
Last fall, when asked about legislative reform, I
testified that because we were in the middle of a
comprehensive agency review of the CRA, we
did not favor proceeding with the legislation that
was being considered by this subcommittee.
Some other issues not directly tied to CRA
legislation, such as community development activities, and investments and services pursuant to
the Bank Enterprise Act, will be affected by what
we do in the regulatory area, of course, given the
proposed service and investment rating components. But I would counsel against pursuing
legislative amendments to the CRA until we see
how well our regulatory solution responds to the
public concerns that I outlined earlier. Ultimately, there may be need for changes to the
law, but it seems too early to make that judgment
at this time.
CONCLUSION
Through our internal review of the CRA and the
public hearings on CRA reform, we have been
afforded a unique opportunity to step back and
take a fresh look at the enforcement of one of the
most important and promising, yet controversial,
laws affecting financial institutions. In proposing
comprehensive regulatory reform of the CRA,
we have been highly aggressive in our approach.
Our efforts are bound to generate a good deal of
concern—for example, that we are demanding
too much or not enough, that we have been too
specific or too vague, and that we have been too
sensitive to small banks' concerns about paperwork burden or not sensitive enough.
As I said during the Board's public deliberations on the proposed amendments to our CRA
regulation, although I take a natural pride of
authorship given the time I have invested with
my colleagues, I am not unalterably wedded to
this specific proposal. If the public comment
points out serious flaws, particularly in the areas
of operations or implementation, or if better
Statements
to the Congress
291
ideas emerge, I am perfectly willing to recommend to my fellow regulators and members of the
Board of Governors that we return to the draw-
ing board. We should not hesitate to do so if that
is the only way to assure the public that we have
done the best job possible.
•
Statement by Lawrence B. Lindsey, Member,
Board of Governors of the Federal Reserve System, before the Subcommittee on Consumer
Credit and Insurance of the Committee on Banking, Finance and Urban Affairs, U.S. House of
Representatives, February 8, 1994
cies to use their examination authority to encourage institutions to help meet the credit needs of
their communities, including low- and moderateincome areas, consistent with safe and sound
business practices. The agencies are required to
assess the community lending records of the
institutions they supervise as part of their examinations and to take into account those records in
considering applications. The law, however,
gives no other indication how the agencies are to
accomplish these tasks and does not define key
concepts, such as how an institution's community is defined or what constitutes satisfactory
performance. A considerable responsibility,
therefore, was placed on the agencies by the
Congress.
The regulations that were adopted in 1978 by
the financial regulatory agencies focused, at least
in part, on factors related to the process used by
institutions to determine the credit needs of their
community and how they responded to those
needs. To avoid credit allocation, and to allow
for the maximum amount of creativity by institutions in meeting the varying credit needs of
their localities, these regulations did not attempt
to prescribe any particular level of lending. Instead, the evaluation of a financial institution's
performance has been based on the application of
twelve assessment factors, including how community credit needs are ascertained, the geographic distribution of loans, the record of opening and closing branches and providing services,
participation in local community development
projects, and the financial and legal capability of
the institution. In determining how well an institution ascertains the credit needs of its community, examiners have taken into account such
matters as the institution's community outreach
and credit marketing.
In the course of our review of the CRA, we
have heard from many consumer and community
groups about how valuable the law has been in
getting credit extended in low- and moderateincome areas. Some groups put the success of
I appreciate the opportunity to appear before this
subcommittee to discuss Community Reinvestment Act (CRA) reform. The Community Reinvestment Act is intended to ensure that every
community has access to adequate credit to help
meet its needs. We at the Federal Reserve Board
believe that the law has produced substantial
benefits. However, the CRA has not—nor should
it be expected to have—cured all the problems
that plague our cities.
As you know, the federal financial institution
regulatory agencies are actively engaged in an
effort to reform the CRA by amending our regulations. This effort results from the President's
request to make the CRA more objective, the
ratings more uniform, and the paperwork less
burdensome. This effort is a challenging one,
which involves a substantial commitment by the
agencies and encompasses many difficult issues.
We are very conscious of the fact that what we
do could significantly affect financial institutions
and the public alike and that we must exercise
care when we undertake such an important project. Because we are midway in the process and
are still receiving comments from the public, our
report to you will necessarily be somewhat preliminary.
HISTORY
REFORM
OF THE CRA AND THE
EFFORT
CURRENT
Before I discuss the proposal to reform the CRA,
I would like to briefly review the law and a little
of its history because that history is very relevant
to the reform project. The Community Reinvestment Act calls for the financial regulatory agen
292
Federal Reserve Bulletin • April 1994
the CRA at $30 billion, which they estimate to be
the level of the CRA commitments for new
credit. I suspect the total impact of CRA considerably exceeds the $30 billion estimate. And, to
date, this has occurred with a comparatively light
hand from Washington. Indeed, one strength of
the present system is that it allows great flexibility in fashioning programs to meet the diiferent
and changing credit needs of this country's diverse communities.
Despite the significant benefits that communities have seen from the CRA, the approach taken
in the regulations and the agencies' implementation of that approach have generated a good deal
of criticism. Financial institutions have frequently complained that they are burdened by
imprecise rules and inconsistent evaluations on
the one hand and overly prescriptive documentation requirements on the other hand. Small
institutions, in particular, complain about the
costs of compliance and contend that the law is
unnecessary because they must serve their entire
community to succeed. Further, it appears to
some that there is little incentive for institutions
to try to achieve an outstanding rating, especially
when applications filed by institutions with outstanding CRA ratings may still be protested by
the public.
Community representatives have complained
that the regulators emphasize documentation of
CRA activities in their examinations of financial
institutions, instead of actually measuring the
degree to which they are meeting community
credit needs. They point to the fact that almost 90
percent of institutions receive "passing" ratings
and the agencies rarely deny applications for
CRA reasons alone as evidence that regulatory
enforcement of the law has been weak. They also
wish to have a more formal role in the evaluation
process.
Although we have tried to respond to these
various concerns through modifying our process
and providing official guidance, it has become
clear that CRA enforcement needs a broad-based
review to see whether improvements are in order
and, if so, what they should be. Consequently,
the President requested that the Federal Reserve
Board, the Office of the Comptroller of the
Currency, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision re
examine the regulations. The President asked the
agencies to improve them by addressing several
areas of concern. The objectives that the President outlined, which we also believe are important to the ultimate reform of the CRA, include
the following:
• Replacing paperwork and process-related
requirements with clear objective criteria that
measure actual performance
• Working together to improve uniformity in
evaluations and instituting more effective sanctions for consistently poor CRA performance.
The ultimate goal, according to the President's
request, is to "replace paperwork and uncertainty with greater performance, clarity and objectivity." We are in full accord with this objective.
The agencies held a series of seven public
hearings throughout the United States to gather
information on the best way to amend our CRA
regulations and enhance our enforcement. More
than 250 witnesses testified, and many raised
common concerns. We were strongly encouraged to revise our regulations so that CRA performance would be evaluated in as objective a
manner as possible and to give better guidance
on how different types and levels of performance
will be rated.
Although witnesses stressed that the CRA
should continue to focus on lending, many also
recommended that greater weight be given to
investments (such as in community development
projects) and the provision of banking services
(such as through locating branches and providing
low-cost accounts or noncustomer check cashing). Many witnesses requested that institutions
be required to collect more data on the geographic distribution of loans so that they may be
better able to evaluate an institution's CRA performance.
Representatives of smaller institutions, on the
other hand, generally criticized the burden and
expense they bear from existing documentation
requirements. Other witnesses recommended
that institutions be allowed to develop their own
CRA plans against which their performance
would be rated, with these plans reviewed by the
agencies. Finally, most witnesses, other than
those fromfinancialinstitutions, opposed provid-
Statements
ing a safe harbor from CRA protests to institutions rated satisfactory or outstanding.
After these meetings, we developed the proposed changes to our CRA regulations in conjunction with the other agencies and published
them on December 21, 1993. Comment on the
proposal has been requested by March 24. We
have extended our comment period to that date
to accommodate the numerous requests for time
to do a complete analysis of a very complex
proposal. We do not know how many comments
will ultimately be received and whether fundamental changes in our proposed approach will be
called for. Although I cannot state when a final
rule will be adopted, we do intend to move the
process along as quickly as is appropriate. And I
want to emphasize that I would not expect that
any final rule would become mandatory until
after an adequate lead time—particularly if the
proposed data collection requirements, or something similar, are retained.
Most important, I am committed to making
sure that our final rule will work. We will do no
one any favors by promulgating a rule that is
operationally untenable. During this comment
period, I am paying particular attention to questions or complaints about the details of implementation and of unintended consequences from
how the proposal will work in practice.
BALANCING
COMPETING
OBJECTIVES
With this proposal, we have attempted to achieve
the difficult and important goal of balancing the
competing concerns of providing greater specificity on what is expected on the one hand
without dictating credit decisions on the other.
The proposal attempts to clarify our expectations
for CRA performance by (1) creating a new,
more numerically driven system for assessing
CRA performance in three critical elements: first
and foremost, lending, and secondarily, services
and investments; (2) requiring the collection of
data on the number, amount, and geographic
location of small business, small farm, and some
consumer loans to use in the assessments; (3)
providing for streamlined review of small institutions; (4) permitting institutions to submit their
CRA plan in advance to their regulator for ap
to the Congress
293
proval and public comment as an alternative to
being evaluated under the general assessment
scheme; and (5) specifying the regulatory sanctions that are possible from noncompliance with
the regulations.
In part, the balance we seek to achieve in the
proposal is intended to respond to those most
concerned by the CRA—banks and representatives of communities. Despite the different perspectives on CRA reform by bank and community representatives, I think that in many
respects their interests are consistent rather than
at odds. Both banks and community representatives want local lending institutions to be strong
and viable so that they will have the capacity to
effectively serve their communities over the long
term. Both want to ensure that funded projects
make economic sense for lender and borrower
alike. Both also have a common interest in a
CRA evaluation system that is fair and consistent
and that avoids unnecessary paperwork. To be
sure, community groups may favor more data
collection, greater public participation, and more
stringent accountability than lenders, but, on
balance, I believe there is greater commonality of
interest among the groups in the goals of reform
than is often assumed.
Having said that, however, I am sure there are
some specific points in the proposal on which
views may differ—for example, on the appropriate cut-off level for the more streamlined review
procedures for "small banks." Such points of
difference seem unavoidable in a proposal as
comprehensive and complicated as ours, and the
public comment should help us resolve some of
the disagreements about the right approach. I can
assure you that we have struggled throughout
this process to achieve an appropriate balance to
the competing interests when it does exist; how
well we have achieved this balance will be judged
in the public comment process.
ISSUES RAISED
BY THE
PROPOSAL
Given Comptroller Ludwig's description of the
proposal for the subcommittee, I will not also
review the details. As is well known, however,
although the Board joined with the other agencies in seeking public comment on the proposal,
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Federal Reserve Bulletin • April 1994
Board members have a variety of concerns about
the proposal. For example:
• The proposal is intended to provide greater
certainty to institutions in the type of evaluation
they might expect to receive, primarily based on
their performance relative to that of others. Yet,
measuring an institution's performance against
other lenders in the service area at year-end
means that the standard will necessarily be fluid
from year to year.
Moreover, the terms used to describe different
levels of performance include "roughly comparable," "significant amount," and similar words
that are anything but precise. These general
standards have been proposed, in part, to avoid
giving specific numbers that would risk resulting
in the specific allocation of the amount, type, or
terms of credit that institutions must provide.
Institutions will have to speculate about the
activities of their competitors, and examiners
will be forced to interpret these terms on a
case-by-case basis when evaluating individual
institutions. Thus, an institution may have some
of the same uncertainty about how its performance will be evaluated that it has now. To some
extent we will always be plagued by the dilemma
of how to provide better guidance and certainty
in the CRA area without reducing needed flexibility. But we expect that these issues will be
resolved over time, although ultimately the experience may prove frustrating to both financial
institutions and community groups.
• There may be problems associated with the
"market share" test. One such problem may
result from the fact that the market share for
other than mortgage loans will be computed only
in comparison with that of other depository institutions that must report data. Leaving out
small depositories (generally less than $250 million in assets) and nondepositories, the percentage of those that are subject to the CRA and are
included in the market share comparison will be
low. In some localities, a very few institutions or
even a single one may be included in the "market." This approach could cause practical problems and anomalous results.
• The new requirement for summary reporting
of the number, amount, and geographic distribution of small business, mortgage, and some consumer loans is significant. It is important to the
goal of making the CRA process more quantifiable; yet it could be costly. For covered commercial banks, the annual cost for the small business
portion of the data collection alone has been
estimated by our staff members to approach $21
million. In all, about 3,400 institutions will be
required to gather new data.
Because of these concerns, we have also asked
for a discussion of burdens and benefits of this
requirement in the public comments.
• The appropriateness of the streamlined review procedure for small institutions having less
than $250 million in assets will surely be questioned in the comments—as well as the impact of
the presumption that such small institutions have
a "reasonable" loan-to-deposit ratio if it is 60
percent. We have heard from the small banks
that have commented on the proposal thus far
that this loan-to-deposit ratio is unrealistically
high for them, especially for good-quality loans,
and we have some concerns that small institutions that want to benefit from the streamlined
CRA review might be forced to imprudently
change their lending standards to meet this presumption.
• There are other potentially controversial
aspects to our proposal, such as whether the
alternative evaluation for banks with preapproved plans is workable, whether the role of
the public and community groups in development
of the plans is adequate, and whether we, in fact,
should be treating institutions receiving low ratings as being in violation of the regulation and
subject to our enforcement authority. These important issues will also receive considerable attention by us and, I hope, by the public.
DISCUSSION OF SPECIFIC ISSUES RAISED
LETTER OF INVITATION
IN
Besides many of the issues I have already addressed in my statement, I would like to respond
to some of the questions raised in your letter of
invitation:
• The appeals process. Financial institutions
have always been able to request supervisory
personnel at Reserve Banks to review the ratings
issued by examiners—whether involving the
CRA or other supervisory issues—but we do not
Statements
consider this review a formal appeals process.
We anticipate that our informal system for appeals would complement the opportunities for
input in CRA evaluations. The proposal would
permit institutions to rebut presumptive ratings
under the lending, service, and investment tests.
But the proposal also provides that the agencies
would announce upcoming examinations to get
public comment on an institution's performance.
These comments, and those in the institution's
public file, would be taken into account in our
assessment of their performance.
• Frequency of examinations for institutions
rated "outstanding." The proposal does not
address examination frequency. Our current policy, however, does allow evaluations to be conducted less frequently for institutions rated outstanding. Currently, state member banks rated
outstanding, with at least satisfactory ratings in
consumer compliance in general, are examined
once every eighteen to twenty-four months, compared with once every six to twelve months for
poor performers. At this point, I would assume
that we would maintain our current policy even
with regulatory changes.
• Effect of investment credits and indirect
lending on ratings. Under the proposal, investment activity by retail banks could help to increase their base rating in the lending test, up to
two levels if the investment performance is outstanding. Investments will be the sole criteria for
measuring the performance of wholesale and
limited-purpose banks, however. Indirect lending activity may be taken into account under
either the lending or investment tests. These
aspects of the proposal are controversial and of
particular concern to community groups. We will
be evaluating their comments very carefully as
we consider what the appropriate treatment of
investments and indirect lending should be.
• Effect of ratings and public involvement on
applications. CRA ratings, as well as public
comments on applications, can and do influence
significantly the Board's consideration of an institution's application. This has been made clear
in earlier CRA policy statements. The proposal is
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295
more explicit than our current regulation about
the effect that different ratings will have on the
Board's consideration of an application. For example, under the proposal, an "outstanding"
rating would be looked on very favorably, and a
"substantial noncompliance" rating generally
would result in the denial of the application. We
are aware of the concern of community groups
that there may be an implicit "safe harbor" in the
proposal. A "safe harbor" was not intended, and
to the extent that there is any misuderstanding, it
will be clarified in the final version.
CONCLUSION
Through our internal review of the CRA and the
public hearings on CRA reform, we have been
afforded a unique opportunity to step back and
take a fresh look at the enforcement of one of the
most important, yet controversial, laws affecting
financial institutions. In proposing our comprehensive regulatory reform of the CRA, we have
been highly aggressive in approach. Our efforts
are bound to generate a good deal of debate and
concern—for example, that we are demanding
too much or not enough, that we have been too
specific or too vague, and that we have been too
sensitive or not sensitive enough to small banks'
concerns about paperwork burden.
As I said during the Board's public deliberations on the proposed amendments to our CRA
regulation, although I take a natural pride of
authorship given the time I have invested with
my colleagues, I am not unalterably wedded to
this specific proposal. If the public comment
points out serious flaws, particularly in the areas
of operations or implementation, or if better
ideas emerge, I am perfectly willing to recommend to my fellow regulators and members of the
Board of Governors that we return to the drawing board. We should not hesitate to do so if that
is the way to ensure that we have done the best
job possible. To give the public anything less
than the best is a goal that no one involved in this
process would condone.
•
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Federal Reserve Bulletin • April 1994
Statement submitted by the Board of Governors
of the Federal Reserve System to the Subcommittee on Consumer Credit and Insurance of the
Committee on Banking, Finance and Urban
Affairs, U.S. House of Representatives,
February 9, 1994
The Board of Governors of the Federal Reserve
System appreciates the opportunity to comment
on the credit and charge card legislation being
considered in H.R.1842 and H.R.2175. Because
this legislation is driven, in part, by concerns
about the level of credit card rates, we thought it
would be useful to the subcommittee to have
some current background on this issue.
RECENT DEVELOPMENTS
PRICING
IN CREDIT
CARD
Credit card lending is a competitive market that
consists of many thousands of card issuers, all
free to establish their own prices and other
lending terms. The credit card market has
changed significantly over the past few years.
Competition, which was keen during the 1980s,
has grown more intense as new firms have entered the market and challenged established card
issuers by aggressively pricing their credit card
products. While competition in the 1980s focused
on efforts to broaden customer bases by increasing the availability of cards to higher risk groups
and by offering additional product enhancements, this focus has shifted to efforts to retain
and broaden customer bases by offering more
favorable interest rates, waivers of annual fees,
and, in some larger programs, rebates of various
types.
To better understand credit card pricing behavior, it is useful to compare credit card lending
with other types of bank loans. Generally, credit
card lending is riskier than other types of bank
lending because it is unsecured and card holders
may choose to use their cards when they are
under the most financial distress. Consequently,
a relatively large "risk premium" is built into the
pricing structure of credit card plans. A second
prominent feature of credit card lending is that
the cost of funds, while an important component
of total costs, makes up a relatively small per
centage of total lending costs compared with
other types of bank lending. Because funding
costs are a smaller component of total costs for
credit card lending, changes in the cost of funds
are more likely to be offset by movements in
other cost components. A third major factor that
differentiates credit card lending from other
types of bank lending is that the interest earned
on credit card balances is substantially less than
the stated rate might suggest because convenience users (those who pay their balances in full
each month) generate little or no revenue from
finance charges.
After many years of relative stability, credit
card interest rates recently have fallen sharply.
An unusually steep and sustained decline in the
cost of funds to issuers and the lingering effects
of the last recession, which saw outstanding
balances on credit cards grow at a much reduced
pace, have exerted downward pressure on credit
card interest rates. In addition, the elevated
default rates and substantial credit losses stemming from the past recession appear to have
fundamentally influenced the pricing behavior of
many card issuers, including a number of the
largest issuers in the country. Although credit
card issuers in the past tended to offer a basic
plan with one rate for all customers regardless of
risk and account activity level, some of the
largest issuers have now lowered rates for card
holders who have good payment records and
charge large amounts. Higher interest rates are
still applied, however, to higher-risk customers:
those who have a record of not paying their bills
on time.
Contributing to the growing interest rate competition may be an increasing sensitivity by consumers to credit card rates, perhaps because of
the difficult times that many encountered during
the last recession and the heightened publicity
about the high rates of interest on credit cards.
Another factor that may be causing a decrease in
credit card rates is the increased difficulty card
issuers have encountered in acquiring new customers in a relatively mature market. The high
cost of attracting new customers in a competitive, mature market places a premium on retaining existing customers, particularly on those who
charge large volumes and revolve substantial
balances. Reducing rates and waiving annual fees
Statements
is one way to curtail attrition. A further indication of growing interest rate competition is the
aggressive marketing of rollover balance programs that offer attractive rates to card holders
who roll their outstanding debt into a new card
issuer's plan.
Evidence of the changing nature of competition in the credit card market can be found in the
Federal Reserve's series on credit card interest
rates published in its G. 19 statistical release. This
data series shows the average rate charged by a
sample of credit card issuers for their largest
credit card plans. From the end of 1981 through
the beginning of 1991 this average credit card
interest rate varied only a little and averaged
more than 18 percent. Beginning in early 1991,
however, it began a steady decline that has
continued to date. In February 1991, the average
interest rate on credit cards as measured by our
survey was 18.28 percent. Our latest survey, for
November 1993, indicates the average rate had
fallen to 16.30 percent.
A second survey of credit card interest rates
conducted by the Federal Reserve also reveals
the decline in interest rates. Twice a year, the
Board produces a report entitled Report on the
Terms of Credit Card Plans, which shows the
terms offered by about 150 of the largest credit
card issuers for their largest credit card plan.
This report is made available to the public without charge as a tool to assist them in comparing
the various features and costs of alternative
credit card programs.
This report on credit card terms was first made
available in March 1990. At that time, 10 percent
of the issuers offered plans with interest rates of
less than 16 percent, and only two issuers had
plans with rates of less than 14 percent. Our most
recent survey, released in September 1993, reveals a dramatic change; 41 percent of the issuers
offered a rate of less than 16 percent on their
largest plan, and 14 percent had rates of less than
14 percent. Eight of the 153 issuers charged a rate
of 12 percent or less on their largest plan. A copy
of the report is attached to this statement.1
CREDIT CARD
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297
PROFITABILITY
The Fair Credit and Charge Card Disclosure Act
directs the Federal Reserve to report to the
Congress annually about the profitability of
credit card operations of depository institutions.
The most recent report was submitted in September 1993. Information for this report is drawn
from two surveys: the Functional Cost Analysis
conducted by the Federal Reserve Banks and the
Report of Condition and Income. The report
indicates that in recent years credit card profitability has generally been higher than returns on
other major bank product lines, although net
earnings as a percentage of outstanding balances
for credit card banks in 1992 were not as high as
they were in the mid-1980s. The most recent data
from the Report of Condition and Income continue to indicate that credit card earnings are
strong.
With this as background, we have the following comments on the specific legislation.
H.R.1842
H.R. 1842 would amend the Truth in Lending Act
to provide for additional disclosures relating to
credit and charge card accounts. For example,
the bill would expand disclosure requirements
for applications and solicitations mailed to consumers and for card account advertisements. The
bill would also provide consumers with substantive rights, along with additional disclosures,
when card issuers initiate certain changes in
terms of card accounts. H.R.1842 would also
impose limitations on card issuers' ability to use
information about customers for direct marketing
purposes and restrict their ability to assess finance charges before credit extensions are
posted to the account. Finally, the bill would
require that the Comptroller General of the
United States, in consultation with the Board,
conduct a study of competitiveness of the credit
card market.
Disclosures
1. The attachment to this statement is available from
Publications Services, Board of Governors of the Federal
Reserve System, Washington, DC 20551.
The Board believes consumers benefit substantially from Truth in Lending disclosures that
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Federal Reserve Bulletin • April 1994
permit them to compare and evaluate credit card
plans. For example, early disclosures already
required by the Fair Credit and Charge Card
Disclosure Act enable consumers to consider
rate and other cost information before they apply
for a credit card account. Taken individually,
each of the bill's required disclosures, set forth in
a standardized tabular format, may additionally
assist consumers in their comparison shopping
before they become obligated or in their evaluation of an existing account. Consumers, however, already receive many of the disclosures
required by the bill—such as basic cost information in the table and notices of changed terms—
under the current Truth in Lending scheme. The
Board believes that existing law supplies consumers with adequate information about the key
costs associated with credit and charge card
accounts. We are concerned that by "layering"
essentially identical disclosures the effectiveness
of the current scheme may be diluted if consumers find the duplicate disclosures to be confusing.
Disclosures on Envelopes
For example, H.R.1842 would require that the
disclosure table appear on envelopes containing
card applications or preapproved solicitations
mailed to consumers in addition to the disclosures already required with the application or
solicitation inside. We are also aware that consumers receive in the mail offers for card accounts enclosed in envelopes that may boldly
display a term such as an introductory low annual fee or annual percentage rate. Nonetheless,
the Board believes that the proposed requirement would not offer enough benefit to consumers to further complicate the rules. The consumer
who is intrigued by a card issuer's offer to open
an account will of necessity have to open the
envelope to act on the offer and at that time will
encounter the current disclosure table. The consumer who chooses not to open the envelope is
not interested enough to consider the offer (and
see the disclosure table) and has not been misled
by the card issuer's marketing. The table currently required plays an effective role in connection with applications or preapproved solicitations by providing basic information in a userfriendly format to consumers as they complete
the application form. The Board believes a second table on the envelope is unnecessary.
Additional Disclosures in the Table
The Board believes that caution should be exercised in mandating additional disclosures in the
table. For example, information about the terms
and conditions for forfeiting a grace period may
be lengthy and detailed and could complicate the
box and detract from its current "clean" appearance. On the other hand, adding the annual
percentage rate for cash advances could be very
useful for consumers.2
Changes in Terms
The Board is also concerned about the potential
for consumer "information overload" when card
issuers change certain account terms and about
excessive cost and regulation. Currently, card
issuers initiating changes adverse to consumers
are generally required to send notices that highlight the changes at least fifteen days in advance
of the change. The bill would require that the
new terms to be set forth in a tabular format on at
least one periodic billing statement before the
effective date of the change. The bill would also
require that a description of certain changed
terms be provided in a tabular format on a
separate piece of paper that is enclosed with a
periodic statement sent at least thirty days before
the change. Finally, the envelope containing the
separate description and periodic statement must
display a statement alerting the consumer to the
fact that contract terms have been changed and
that details are available inside.
The Board recognizes that a brief notice on an
envelope stating that changes in contract terms
are contained inside may be meaningful to consumers in the same way an envelope bearing the
notice "Tax information enclosed" distinguishes
2. Indeed, when originally promulgating rules for the Fair
Credit and Charge Card Disclosure Act, the Board proposed
to add such a disclosure. Upon further analysis, after a
review of comments that objected overwhelmingly to any
additional required disclosures in the table, particularly to
one that did not relate to purchases, the Board withdrew the
proposal because it was not required by the statute.
Statements
for taxpayers the significance of the contents of
that correspondence from others.
The Board is concerned, however, about the
potential for consumer confusion if the bill's
proposed disclosure scheme were added to the
existing law regarding changed terms for card
accounts. Read as a whole, the bill provides that
consumers whose credit card plan is about to
change would receive a periodic statement that
reflects the terms in effect for the billing period
covered by the statement. The same statement
would also contain the prospective terms set
forth in a table along with the other disclosures
that remain unchanged, although the bill does not
require that the new terms be distinguished from
others not affected by the change. The consumer
would also receive a separate document that
describes in tabular format the changed term.
The Board believes the current disclosure
scheme—requiring changed terms to be highlighted in some way—is adequate and straightforward. Requiring a periodic statement reflecting the terms in effect for the previous billing
period as well as a disclosure table applicable to
future periods seems potentially confusing, and
the inclusion of a tabular description of the new
term—while highlighting the change—seems repetitive in combination with the disclosure table
contained on the accompanying periodic statement.
Advertising
H.R.1482 would expand the Truth in Lending
disclosures required for credit and charge card
advertising. Currently, mentioning specific costs
in advertisements for credit card plans triggers a
card issuer's duty to disclose other cost information. For example, a card issuer that advertises
its annual percentage rate must also disclose any
minimum finance charge, transaction fee, or
other charge. The Board by regulation also requires that annual fees be disclosed. Advertising
"low" annual percentage rates or "no transaction fees" does not trigger the requirement to
state additional cost information about the card
account.
The bill would mandate that the table disclosures now required for applications and solicitations be disclosed on any advertisement that
to the Congress
299
promotes card accounts. The disclosure requirements would differ, depending on the medium in
which the card advertisement is promoted (radio,
television, or print).
The Board appreciates the concern that general advertisements may not provide full disclosure of important credit terms. However, the
Board believes that mandating cost information
for all advertisements may, in fact, create a
disincentive for advertising rather than an incentive for more disclosure. The Board believes that
the current disclosure scheme for advertising
accounts provides adequate information to consumers who are shopping for credit cards. If
specific cost information is advertised, a uniform
disclosure of credit terms is required. Card issuers that aggressively market through direct mail
or telephone campaigns must already comply
with the more detailed disclosure requirements
of the Fair Credit and Charge Card Disclosure
Act. In addition, consumers are provided with
complete Truth in Lending disclosures before
they become obligated on the plan, and the
Board by regulation has provided that if consumers are not given full disclosures beforehand, a
consumer may reject the plan once disclosures
are received (and any membership fee paid must
be refunded).
Finally, although the clear and straightforward
approach of the proposed table may be more
easily comprehensible on a television screen than
lengthy narrative disclosures, the Board notes
the difficulties in assuring meaningful disclosures
in electronic media such as television.
If the Congress determines to go forward with
legislation to amend the advertising rules for
credit card plans, the Board notes that the proposed bill contains an exception for advertisements that are "solely promotional and do not
solicit business." The distinction seems vague,
and we urge the Congress to clarify the intended
scope of the exception to the disclosure requirements for credit card advertisements.
Other Disclosures
H.R.1482 would also require that card issuers
disclose information not currently mandated by
law. For example, card issuers would be required
to provide on each periodic statement cumulative
300
Federal Reserve Bulletin • April 1994
year-to-date data on the total amount of payments made and finance charges paid. The bill
would also require that card issuers include on
the first three statements provided in a year the
information—set forth in a tabular format—that
identifies various fees and charges paid during
the previous year. While the disclosures would
provide figures that some consumers may not
otherwise calculate, the Board remains concerned about the need for repetitive disclosures.
Also, the Board questions the need to mandate
year-end figures because it is aware, for example,
that card issuers frequently provide consumers
with information about the total finance charges
paid during the previous year.
The bill would also require that periodic statements disclose a date that reflects when the
current outstanding balance would be paid off if
the consumer choses to pay only the minimum
periodic payment required under the plan. A
"snapshot" view of the potential length of the
consumer's obligation is information that undoubtedly could be interesting to some consumers and would provide useful information that
consumers might use in evaluating their credit
practices. However, the Board would note that
to reduce the potential length of the obligation,
card issuers might raise minimum payment
amounts or reduce credit limits, which may be
detrimental to consumers.
Substantive
Rights
H.R.1842 would provide three substantive rights
to consumers by amending the Truth in Lending
law. The bill would permit consumers to cancel a
card account and pay off any outstanding balance
under existing terms when certain changes in
terms occur (for example, an annual percentage
rate increase). The bill would also permit a
consumer to limit a card issuer's ability to use
information about the consumer for direct marketing purposes. Finally, the bill would provide
that finance charges for extensions of credit can
begin only from the date the extension is posted
to the account. Although the Truth in Lending
Act includes some substantive provisions, it remains primarily a disclosure statute. The Board
continues to believe that substantive laws should
generally be left to the realm of state law.
Regarding the provision that gives consumers
the right to pay off existing balances on the terms
in effect at the time of a change in terms, the
Board notes that some states have in fact legislated in this area.
The Truth in Lending Act requires that card
issuers identify on periodic statements credit
transactions occurring during the statement period, and the Board by regulation authorizes card
issuers to identify credit extensions by the date
of the transaction or the date the transaction is
posted to the consumer's account. The policy
reason for mandating a delay in the imposition of
finance charges from the date of the credit extension to the date of posting is unclear because the
consumer received the benefit of the credit extension on the earlier date.
Other Provisions
H.R. 1842 would require that the Board maintain a
toll-free number for consumers to call for information on the availability of low-rate credit cards.
Although the Board endorses the desire to enhance consumer awareness about credit card interest rates, it does not believe that it is appropriate for the Board to endorse any particular card
program for consumers. Currently, the Board
produces a credit card shoppers guide that is
made readily available to consumers free of
charge. In addition to rate and fee information, the
guide includes the telephone number of card issuers for consumers to call to apply for a card; many
of those numbers are toll-free. The Board maintains a mailing list and distributes the guide to
libraries nationwide. In addition, lists of rates and
other fees offered by card issuers are now readily
available to consumers from groups such as Bankcard Holders of America and from commercial
sources.
H.R.1842 calls for a study of the credit card
market by the Comptroller General of the United
States (GAO), in consultation with the Federal
Reserve Board. Such a study has already been
conducted by the GAO and has recently been
submitted to the Board for comment.
H.R.2175
The major credit card issuers generally impose a
fee on merchants that honor credit cards and at
Statements
to the Congress
301
the same time prohibit merchants from directly
passing that charge on to cardholders. This prohibition currently applies as well to government
agencies that honor credit cards for payment of
such items as auto registration fees and state
property taxes. H.R.2175 would bar card issuers
from applying this prohibition to government
agencies and thus would enable the agencies to
directly pass on the fee to consumers.
Merchants may absorb the costs of the fee by
adjusting the pricing of goods or services. To
recover costs, government agencies would have
to increase fees or raise taxes. And some state and
local laws may prohibit or restrict public agencies
from absorbing this cost. By allowing government
agencies to pass the costs of credit transactions
directly on to consumers, H.R.2175 could increase public use of a more convenient payment
option. On the other hand, it would also create
different rules for the private and public sectors.•
Statement by Alan Greenspan, Chairman, Board
of Governors of the Federal Reserve System,
before the Subcommittee on Economic Growth
and Credit Formation of the Committee on Banking, Finance and Urban Affairs, U.S. House of
Representatives, February 22, 1994
ployment rate fell further, bringing its decrease
over the full year to nearly 1 percentage point.
The unemployment rate in January apparently
declined again on both the old and new survey
bases.
On the inflation front, the deterioration evident
in some indicators in the first half of 1993 proved
transitory. For the year as a whole, the consumer
price index (CPI) rose 23A percent, the smallest
increase since the big drop in oil prices in 1986.
Broader inflation measures covering purchases
by businesses as well as consumers rose even
less. While declining oil prices contributed to last
year's good readings, inflation measured by the
CPI excluding food and energy also diminished
slightly further, to just more than a 3 percent rate
for the whole year. In January the CPI remained
quite well behaved on the whole. Not all signs
have been equally favorable, however. For example, several commodity prices have firmed
noticeably in recent months. And indications that
such increases may be broadening engendered a
backup in long-term interest rates in recent days.
In particular, the Federal Reserve Bank of Philadelphia's survey showing a marked increase in
prices paid by manufacturers early this year was
taken as evidence of a more general emergence
of inflation pressures.
It is important to note, however, that in the
past such price data have often been an indication more of strength in new orders and activity
than a precursor of rising inflation throughout the
economy. In the current period, overall cost and
price pressures still appear to remain damped.
Wages do not seem to be accelerating despite
scattered reports of some skilled-worker shortages, and advances in productivity early this year
I am pleased to appear today to present the
Federal Reserve's semiannual monetary policy
report to the Congress.
In the seven months since I gave the previous
Humphrey-Hawkins testimony, the performance
of the U.S. economy has improved appreciably.
Private sector spending has surged, boosted in
large part by very favorable financial conditions.
With mortgage rates at the lowest level in a
quarter century, housing construction soared in
the latter part of 1993. Consumer spending, especially on autos and other durables, has exhibited considerable strength. Business fixed investment has maintained its previous rapid growth.
Important components of growth in gross domestic product during the second half of last year
represented one-time upward adjustments to the
level of activity in certain key sectors, and with
output in these areas unlikely to continue to
climb as steeply, significant slowing in the rate of
growth this year is widely expected. In addition,
the southern California earthquake and severe
winter weather may have dulled the force of the
favorable trends in spending in January and
February. Nonetheless, as best we can judge, the
economy's forward momentum remains intact.
The strengthening of demand has been accompanied by favorable developments in labor markets. In the second half of the year, employment
continued to post moderate gains, and the unem
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Federal Reserve Bulletin • April 1994
are holding down unit labor costs. Moreover,
although private borrowing has picked up, broad
money—to be sure a highly imperfect indicator
of inflation in recent years—has continued to
grow slowly.
Nonetheless, markets appear to be concerned
that a strengthening economy is sowing the seeds
of an acceleration of prices later this year by
rapidly eliminating the remaining slack in resource utilization. Such concerns were reinforced by forecasts that recent data suggest that
revised estimates of fourth-quarter gross domestic product to be released next week will show
upward revisions from the preliminary annual
rate of growth of 5.9 percent. Rapid expansion
late last year, it is apparently feared, may carry
over into a much smaller deceleration of activity
in 1994 than many had previously expected.
But it is too early to judge the degree of
underlying economic strength in the early
months of 1994. Anecdotal evidence does indicate continued underlying strength in manufacturers' new orders and production, but we will
have a better reading on new orders on Thursday
when preliminary data for January are released.
The labor markets are signaling a somewhat less
buoyant degree of activity as initial claims for
unemployment insurance in recent weeks have
moved up a notch. Clearly, the Federal Reserve
will have to carefully monitor ongoing developments for indications of potential inflation or a
strengthening in inflation expectations. As I have
often noted, if the Federal Reserve is to promote
long-term growth, we must contribute, as best
we can, to keeping inflation pressures contained.
In this regard, a clear lesson we have learned
over the decades since World War II is the key
role of inflation expectations in the inflation
process and in the overall performance of the
macroeconomy. As I indicated in my testimony
before the Joint Economic Committee last
month, until the late 1960s economists often paid
inadequate attention to expectations as a key
determinant of inflation. Unemployment and inflation were considered simple tradeoffs. A lower
rate of unemployment was thought to be associated with a higher, though constant, rate of
inflation; conversely, a higher rate of unemployment was thought to be associated with a lower
rate of inflation.
But the experience of the past three decades
has demonstrated that what appears to be a
tradeoff between unemployment and inflation is
quite ephemeral and misleading. Attempts to
force-feed the economy beyond its potential have
led in the past to rising inflation, as expectations
ratcheted higher, and, ultimately, not to lower
unemployment but to higher unemployment, as
destabilizing forces and uncertainties associated
with accelerating inflation induced economic
contraction. Over the longer run, no tradeoff is
evident between inflation and unemployment.
Experience both here and abroad suggests that
lower levels of inflation are conducive to the
achievement of greater productivity and efficiency and, therefore, higher standards of living.
In fact, lower inflation historically has been
associated not just with higher levels of productivity but with faster growth of productivity as
well. Why inflation and productivity growth are
linked this way empirically is not clear. To some
extent higher productivity growth may help to
damp inflation for a time by lessening increases
in unit labor costs. But the process of cause and
effect in all likelihood runs the other way as well.
Lower inflation and inflation expectations reduce
uncertainty in economic planning and diminish
risk premiums for capital investment. They also
clarify the signals from movements in relative
prices, and they encourage effort and resources
to be devoted to wealth creation rather than to
wealth preservation. Many people do not have
the knowledge of, or access to, ways of preserving wealth against inflation; for them, low inflation avoids an inequitable erosion of living standards.
The reduced inflation expectations of recent
years have been accompanied by lower bond and
mortgage interest rates, slower actual inflation,
falling unemployment, and faster trend productivity growth. The implication is clear: When it
comes to inflation expectations, the nearer zero,
the better.
It follows that price stability, with inflation
expectations essentially negligible, should be a
long-run goal of macroeconomic policy. We will
be at price stability when households and businesses need not factor expectations of changes in
the average level of prices into their decisions.
How those expectations form is not always easy
Statements
to discern, and they can for periods of time
appear to be at variance with underlying economic forces. But history tells us that it is
economic and financial forces and their consequences for realized inflation that ultimately
shape inflation expectations.
Fiscal and monetary policy are important
among those forces and, along with decreases in
long-term interest rates, have contributed to the
decline in inflation expectations in recent years.
The actions taken last year to reduce the federal
budget deficit have been instrumental in this
regard. Although we may not all agree on the
specifics of the deficit reduction measures, the
financial markets are apparently inferring that,
on balance, the federal government will be competing less vigorously for private saving in the
years ahead. Concerns that the deficit is out of
control have diminished. In the extreme, explosive growth in the federal debt makes an eventual
resort to the printing press and inflationary
finance difficult to resist. By shrinking any perceived risk of this outcome, the deficit reduction
package apparently had a salutary effect on
longer-term inflation expectations.
The Federal Reserve's policies in recent years
also have helped to damp inflation and inflation
expectations. We were able to do so, even while
adopting an increasingly accommodative policy
stance. By placing our actions in the context of a
thorough analysis of the prevailing situation and
of a longer-term underlying strategy, our move to
greater accommodation could be seen as what it
was—a deliberate effort to counter the various
"headwinds" that were retarding the advance of
the economy rather than a series of short-term
actions taken without consideration for potential
inflation consequences over time.
As I discussed with this subcommittee last
July, this longer-run strategy implies that the
Federal Reserve must take care not to overstay
an accommodative stance as the headwinds
abate. But determining when a policy stance is
becoming too accommodative is not an easy
matter. Unfortunately, although subdued inflation is the hallmark of a successful monetary
policy, current broad inflation readings are actually of limited use as a guide to the appropriateness of current instrument settings. Patently,
price measurements over short time spans are
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303
subject to transitory special factors. More important, monetary policy affects inflation only with a
significant lag. That a policy stance is overly
stimulative will not become clear in the price
indexes for perhaps a year or more. Accordingly,
if the Federal Reserve waits until actual inflation
worsens before taking countermeasures, it would
have waited far too long. At that point, modest
corrective steps would no longer be enough to
contain emerging economic imbalances and to
avoid a buildup of inflation expectations and a
significant backup of long-term interest rates.
Instead, more wrenching measures would be
needed, with unavoidable adverse side effects on
near-term economic activity.
Inflation expectations likely have more of a
forward-looking character than do measures of
inflation itself and, in principle, could be used as
a direct guide to policy. But available surveys
have limited coverage and are subject to sampling error. As I have testified previously, priceindexed bonds of various maturities, which
would indicate underlying market inflation expectations, would be a useful adjunct to our
information base for making monetary policy,
providing there were a sufficiently broad and
active market for them. In addition, the price of
gold, which has been especially sensitive to
inflation concerns, the exchange rate, and the
term structure of interest rates can give important clues about changing expectations.
Of course, several factors besides inflation
expectations affect all of these indicators to a
degree. Short- and long-term rates, for example,
tend to be highly correlated through time, in part
because they are responding to the same business cycle pressures. Thus, when the Federal
Reserve tightens reserve market conditions, it is
not surprising to see some upward movement in
long-term rates, as an aspect of the process that
counters the imbalances tending to surface in the
expansionary phase of the business cycle. The
test of successful monetary policy in such a
business cycle phase is our ability to limit the
upward movement of long-term rates from what
it would otherwise have been with less effective
policy. Moderate to low long-term rates, with
rare exceptions, are an essential ingredient of
sustainable long-term economic growth. When
we take credible steps to head off inflation before
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Federal Reserve Bulletin • April 1994
it can begin to intensify, the effects on long-term
rates are muted. By contrast, when Federal
Reserve action is seen as lagging behind the need
to counter a buildup of inflation pressures, long
rates have tended to move sharply higher, as
eventually happened in the late 1970s. This suggests an important conclusion: Failure to tighten
in a timely manner will lead to higher than
necessary nominal long-term rates as inflation
expectations intensify. Ultimately, short-term
rates will be higher as well if policy initiatives lag
behind inflation pressures. The higher short-term
rates are required not only to take account of
rising inflation expectations but also to provide
the additional restraint on real rates necessary to
reverse the destabilizing inflation process.
For decades, the monetary aggregates, especially M2, provided generally reliable early warning signals of emerging inflationary imbalances.
But, as I have discussed in detail in previous
testimonies and will touch on later in this statement, the signals they have sent in recent years
have been effectively jammed by structural
changes in financial markets and the unusual
nature of the current business cycle.
Our monetary policy strategy must continue to
rest, then, on ongoing assessments of the totality
of incoming information and appraisals of the
probable outcomes and risks associated with
alternative policies. Our purpose over the longer
run is to help the economy grow at its greatest
potential over time. To do so, we must move
toward a posture of policy neutrality—that is, a
level of real short-term rates consistent with
sustained economic growth at the economy's
potential. That level, of course, is difficult to
discern and, obviously, is not a fixed number but
moves with developments within the economy
and financial markets.
Over a period of several years starting in 1989,
the Federal Reserve progressively eased its policy stance, in the process reducing real shortterm interest rates to about zero by autumn 1992.
We undertook those easing actions in response to
evidence of a variety of unusual restraints on
spending. Households and nonfinancial businesses on the borrowing side and many lenders,
including depository institutions, were suffering
from balance sheet strains. These difficulties
stemmed from previous overleveraging com-
bined with reductions in net worth from impairments to asset quality, through, for example,
falling values of commercial real estate. Corporate restructuring and defense cutbacks compounded the problems of the economy by reducing job opportunities and fostering a more
general sense of insecurity about employment
prospects.
The deliberate maintenance of low short-term
rates for a considerable period was intended to
decrease the drag on the economy created by
these headwinds. Households and businesses
could refinance outstanding debt at much reduced interest cost. In addition, lower rates and
improved performance by borrowers would take
the pressure off depository institutions, helping
them recapitalize. Low interest rates, along with
reduced financial strains, would encourage private spending to pick up the slack left by defense
cutbacks. Once financial positions were well on
the road to recovery, and employment and confidence began to recover, it was believed that the
economic expansion would gain self-sustaining
momentum. At that point abnormally low real
short-term rates should no longer be needed.
As the Federal Open Market Committee
(FOMC) surveyed the evidence at its February 4
meeting, a consensus developed that the balance
of risks had, in fact, shifted. Debt repayment
burdens had been lowered enough to unleash
strong aggregate demand in the economy. Real
short rates close to zero appeared to pose an
unacceptable risk of engendering future problems. We concluded that our policy stance could
be made slightly less accommodative without
threatening either the continued improvement in
balance sheet structures or, ultimately, the
achievement of solid economic growth. Indeed,
the firming in reserve market pressures was
undertaken to preserve and protect the ongoing
economic expansion by forestalling a future destabilizing buildup of inflationary pressures,
which in our judgment would eventually surface
if the level of policy accommodation that prevailed throughout 1993 were continued indefinitely. We viewed our move as low-cost insurance.
The projections of the FOMC members suggest a continuation of good economic performance in 1994, with reasonable growth and sub-
Statements
dued inflation. The central tendencies of the
economic forecasts made by governors and Reserve Bank presidents imply expectations that
economic growth this year likely will be 3 percent or slightly higher. With this kind of growth,
a further edging down of the unemployment rate
from its January reading is viewed as a distinct
possibility. Inflation, as measured by the overall
CPI, is seen as rising only a little compared with
1993, even though last year's benefit from falling
oil and tobacco prices may not be repeated and
last year's crop losses could buoy food prices in
1994.
There are, of course, considerable risks to this
generally favorable outlook. Some observers
have pointed to downside risks to economic
activity associated with fiscal restraint and weak
foreign economies; I believe that these factors
will have some effects, but they are likely to be
less than feared. As for fiscal restraint, a good
portion of the negative impact of last year's
budget bill may already be behind us, as some
households and businesses have adjusted their
behavior to the new structure of taxes and to
curtailments in defense and other budget programs.
The concern about weak foreign economies
relates to the strength of foreign demand for U.S.
exports going forward. Many of our major trading partners have been experiencing economic
difficulties. But some already appear to be pulling
out of recession, and several others seem to have
improved prospects. Moreover, containing inflation will keep increases in production costs of
traded goods made in the United States subdued
so that our products will remain competitive in
world markets. With competitive goods and an
improving world economy, the growth of U.S.
exports should strengthen this year and lessen
the drag from the external sector on our output
growth.
There are upside risks as well. Inventories
have reached a low level relative to sales and
suggest the possibility of a boost to production
from inventory rebuilding beyond that currently
anticipated. In addition, with both borrowers and
lenders in stronger financial condition, low interest rates have proven a powerful stimulant to
spending. While we were reasonably convinced
at the last FOMC meeting that a zero real federal
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305
funds rate put real short rates below a "neutral"
level, we cannot tell this subcommittee, with
assurance, precisely where the level of neutrality
currently resides. To promote sustainable
growth, history suggests that real short-term
rates are more likely to have to rise than fall from
here. I cannot, however, tell you at this time
when any such rise would occur; I would hope
that part of any increase in real short-term rates
ultimately would be accomplished through further declines in inflation expectations rather than
through higher nominal short-term rates.
In assessing our policy stance, we will continue to monitor developments in money and
credit, but in 1994, as in 1993, the FOMC is
unlikely to be able to put a great deal of weight on
the behavior of these aggregates relative to their
ranges. We have set the ranges as best we can in
an evolving financial situation to be consistent
with our objectives for sustained growth and low
inflation.
Based on our experience in 1993 and expectations about financial relationships for 1994, the
FOMC judges that the growth of money and
credit this year will stay within the annual ranges
set provisionally last July, which were reaffirmed
at its meeting early this month. Specifically,
these ranges call for growth of 1 percent to 5
percent for M2, 0 percent to 4 percent for M3,
and 4 percent to 8 percent for domestic nonfinancial sector debt. The ranges are the same as the
final specifications established last July for 1993.
The final specifications for last year had gone
through two rounds of technical downward adjustment after they were first set provisionally in
July 1992. These downward revisions reflected
the FOMC's recognition that the relationship
between spending and money holdings was departing markedly from historical norms. Financial intermediation was moving away from past
patterns, as flows of funds were increasingly
being rechanneled away from banks toward securities markets, notably via bond and stock
mutual funds. Also, banks were relying more
heavily on nondeposit funding sources, such as
equity and subordinated debt, as they strengthened their capital position.
In the event, growth of M2 and M3 last year
came in above the lower bounds of their reduced
ranges with only Vi percentage point to spare. M2
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Federal Reserve Bulletin • April 1994
grew at V/2 percent and M3 at V2 percent over the
year as a whole. Even so, nominal GDP advanced more than 5 percent over the year, extending rapid increases in the velocities of broad
money through another year. The discrepancy
between the growth rates of nominal GDP and
broad money diminished some from that of 1992
but was still unusual in the face of steady shortterm interest rates.
Somewhat faster growth of M2 and M3 this
year than last year may be in prospect. The
governors' and presidents' outlook calls for a
small step-up in nominal spending, and the factors depressing growth of the broader aggregates
relative to the expansion of spending could well
abate to some degree. In particular, the diversion
of savings from retail deposits and money funds
toward bond and stock mutual funds may lessen,
as household portfolios more fully complete the
adjustment to the latter's heightened availability.
Now that banks have achieved healthier capitalization, they may more readily issue large time
deposits instead of equity and subordinated debt
to support stepped-up loan growth. Just how far
these developments will go, however, is difficult
to predict so the prospective relationship between spending and broad money remains highly
uncertain. The FOMC will continue to monitor
the behavior of money supply measures for evidence about underlying economic and financial
developments more generally, but it will still
have to base its assessments regarding appropriate policy actions on a wide variety of economic
indicators.
Among those indicators, the Federal Reserve
will again pay attention to credit market developments, especially for any light it can shed on
the strength of household and corporate balance
sheets and spending propensities. The overall
debt aggregate put in a repeat performance last
year and again grew about 5 percent, even as the
advance of nominal GDP moderated to a similar
pace. But this steady debt growth incorporated
an upturn in private borrowing, as the borrowing
of the federal government slackened. Households, in particular, showed a heightened willingness to take on debt to help finance strong
purchases of homes and consumer durables. At
the same time, massive mortgage refinancings at
much reduced interest rates contributed to further reductions in household debt-service burdens relative to income to a level last seen in the
mid-1980s. For businesses as well, the bite taken
out of cash flow by interest payments was shrunk
to a size last observed in the mid-1980s, partly
through the refinancing of higher-cost debt and
continued equity issuance. Although business
borrowing firmed a little, it remained subdued, as
enough internal funds were available to finance
the bulk of hefty capital expenditures.
Looking ahead, federal borrowing is scheduled
to diminish further this year, partly reflecting
deficit reduction measures. Borrowing by nonfederal sectors should continue to strengthen,
prodded by the anticipated pickup in nominal
GDP and the healthier financial condition already
attained by households and businesses.
In conclusion, the Federal Reserve has welcomed both the strengthening in activity and
the generally subdued price trends because the
intent of our monetary policy in recent years
has been to foster precisely this kind of healthy
economic performance. Looking forward, our
policy approach will be to endeavor to select on
a continuing basis the monetary instrument
settings that will minimize economic instabilities and maximize living standards over time.
The outlook, as a result of subdued inflation and
still low long-term interest rates, is the best we
have seen in decades. It is important that we do
everything we can to turn that favorable outlook into reality.
•
307
Announcements
INCREASE IN PRESSURE ON RESERVE
POSITIONS ANNOUNCED BY CHAIRMAN
GREENSPAN
Alan Greenspan, Chairman, Board of Governors of
the Federal Reserve System, announced on February 4, 1994, that the Federal Open Market Committee had decided to increase slightly the degree
of pressure on reserve positions. The action was
expected to be associated with a small increase in
short-term money market interest rates.
The decision was taken to move toward a less
accommodative stance in monetary policy to sustain and enhance the economic expansion.
Chairman Greenspan decided to announce this
action immediately so as to avoid any misunderstanding of the Committee's purposes, given the
fact that this is the first firming of reserve market
conditions by the Committee since early 1989.
STATEMENT BY CHAIRMAN GREENSPAN
ON THE RESIGNATION OF PRESIDENT SYRON
Chairman Alan Greenspan of the Federal Reserve
Board said that the decision of President Syron to
accept the chairmanship of the American Stock
Exchange and leave the Federal Reserve Bank of
Boston is a major loss for the central bank.
"President Syron has made significant contributions to the entire Federal Reserve System during
his many years of service," Dr. Greenspan said.
"He will be sorely missed. We will miss especially
his thoughtful insights to monetary policy during
meetings of the Federal Open Market Committee.
We wish him well in his new endeavor."
MEETING OF CONSUMER
COUNCIL
ADVISORY
The Federal Reserve Board announced that the
Consumer Advisory Council met on Thursday,
March 24. The council's function is to advise the
Board on the exercise of the Board's responsibilities under the Consumer Credit Protection Act and
on other matters on which the Board seeks its
advice.
APPROVAL OF FINAL RULE REGARDING
A CHANGE IN THE FEDERAL DEPOSIT
INSURANCE
CORPORATION
IMPROVEMENT ACT
The Federal Reserve Board on February 1, 1994,
announced approval of a final rule to expand the
definition of "financial institution" in section 402
of the Federal Deposit Insurance Corporation
Improvement Act (FDICIA). The FDICIA validates netting contracts among financial institutions.
The rule was effective March 7, 1994.
The FDICIA defines "financial institution" to
include a securities broker or dealer, a depository
institution, a futures commission merchant, or any
other institution as determined by the Board.
The rule establishes a category of entities considered financial institutions under the act, while
reserving the ability to expand that category further
through individual determinations.
Parties to a netting contract agree that they will
pay or receive the net, rather than the gross,
payment due under the netting contract. The act
provides certainty that netting contracts will be
enforced, even in the event of the insolvency of one
of the parties.
REGULATION
E:
AMENDMENTS
The Federal Reserve Board on February 24, 1994,
issued final amendments to Regulation E (Electronic Fund Transfers) to cover the electronic benefit transfer (EBT) programs. Adoption of the
Board's rule means that benefit recipients will be
accorded much the same protections that are
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Federal Reserve Bulletin • April 1994
available to other users of electronic payment
mechanisms.
EBT programs involve the issuance of plastic
access cards and personal identification numbers to
recipients of government benefits, such as food
stamps, Aid to Families with Dependent Children,
and Supplemental Security Income. Access to
benefits can be obtained through automated teller
machines (ATMs) and point-of-sale terminals. The
EBT amendments to Regulation E call for general
application of the rules on liability for unauthorized
transfers, error resolution, and most other provisions, except for periodic statement requirements.
This rulemaking directly affects government agencies that administer EBT programs and indirectly
affects depository institutions and other private
sector entities.
Mandatory compliance was set for March 1,
1997, as requested by a federal EBT task force representing all the major federal agencies with benefit
programs. The task force is working to establish a
nationwide system for electronic delivery of government benefits and asked for the three-year delay
so that the agencies could implement these EBT
programs in compliance with Regulation E.
REGULATION
O:
AMENDMENTS
The Federal Reserve Board announced on February
18, 1994, approval of a final rule amending several
provisions of Regulation O (Loans to Executive
Officers, Directors, and Principal Shareholders of
Member Banks). The rule is effective February 18,
1994.
The first amendment makes permanent an
interim rule increasing Regulation O's aggregate
lending limit for small, adequately capitalized
banks from 100 percent of a bank's unimpaired
capital and surplus to 200 percent.
The second set of amendments is designed to
reduce the burden and complexity of the regulation. These amendments clarify the "tangible economic benefit" rule, provide certain exceptions to
the lending limit for insiders, permit banks to follow alternative recordkeeping procedures, and narrow the definition of "extension of credit."
The final rule also implements technical amendments to Regulation O to make it more readily
understandable and somewhat shorter.
EXPANSION OF ON-LINE OPERATING HOURS
FOR FEDWIRE FUNDS TRANSFER SERVICES
The Federal Reserve Board announced on February 16, 1994, approval of the expansion of
on-line operating hours for Fedwire funds transfer
services to eighteen hours a day, from 12:30 a.m. to
6:30 p.m. Eastern Time (ET), five days a week,
beginning in early 1997. A specific implementation
date will be announced about one year in advance
of the effective date.
Intraday credit from the Federal Reserve will be
available during expanded hours on the same terms
that it would be provided from 8:30 a.m. ET to
6:30 p.m. ET. Further expansion of the funds transfer operating day could be considered after several
years of experience with the new schedule.
Also, the Board announced that current operating hours for Fedwire securities transfer services
will not be expanded until after the implementation
of new service capabilities that permit receivers of
securities to control the use of securities-related
intraday Federal Reserve credit.
Public comment will be sought later this year on
new service capabilities that permit users the option
to participate in expanded operating hours for securities transfer services and to control the receipt
of securities that are delivered to them during
expanded hours.
DELAY IN DISTRIBUTION OF A NEW
CRIMINAL REFERRAL FORM
Distribution of a new criminal referral form for use
by financial insitutions will be delayed for at least
three months pending development of computer
software.
In the interim, financial institutions should continue to use existing forms to report suspected
criminal offenses. The use of existing forms will
satisfy compliance with the banking agencies' regulations until distribution of the new forms and
computer software are completed.
The delay was announced on February 8, 1994,
by the Federal Reserve Board, the Federal Deposit
Insurance Corporation, the National Credit Union
Administration, the Office of the Comptroller of
the Currency, and the Resolution Trust Corpora-
Announcements
tion, which jointly developed the new form in
1993.
Distribution of the new form without the computer software would create a potential burden
for many institutions. Thus, distribution has been
delayed until development of the computer software is completed.
PROPOSED ACTIONS
The Federal Reserve Board on February 17, 1994,
requested public comment on a notice revising
risk-based capital standards to implement section
305 of the Federal Deposit Insurance Corporation
Improvement Act (FDICIA) regarding concentration of credit risk and the risks of nontraditional
activities. Section 305 of the FDICIA directs each
federal banking agency to revise its risk-based
capital standards to ensure that the standards take
adequate account of these risks. Comments should
be received by March 24, 1994.
The Federal Reserve published for public comment on February 24, 1994, a proposal to simplify
and update its Regulation E (Electronic Funds
Transfer). Comments are requested by May 31,
1994.
PUBLICATION OF CONSUMER AFFAIRS
BROCHURE: MAKING SENSE OF SAVINGS
The Federal Reserve Board announced on February 14, 1994, the publication of a brochure to
help consumers understand their options and to
make better decisions about how and where to save
their money.
The brochure, entitled Making Sense of Savings,
describes the various savings instruments that are
available and their features, as well as fees and
interest rates. The brochure also describes the
major features of the Truth in Savings Act.
Free copies of the brochure may be obtained
through the Board's Publications Services, Mail
Stop 127, Board of Governors of the Federal
Reserve System, Washington, DC 20551, or phone
(202) 452-3244. Multiple copies for classroom use
are also available free of charge. Interested parties
may also contact the Federal Reserve Bank in their
area for this brochure.
309
REVISIONS TO THE 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 data from Call Reports through
September 1993 and from other sources. The
benchmark and seasonal review did not affect the
annual growth rates of Ml, M2, or M3 over 1993,
and for earlier years annual growth rates of these
aggregates were revised by no more than 0.2 percentage point.
The benchmark folded in historical data for several money market mutual funds that began reporting for the first time during 1993 and, based on
new information from the Investment Company
Institute, also reclassified some institutional money
funds as retail money funds, moving them from
non-M2 components of M3 into M2. These revisions were distributed over several years: By the
fourth quarter of 1993, they raised the level of M2
$14 billion and the level of M3 $11 billion. The
benchmark also incorporated new estimates of
money funds' holdings of overnight repurchase
agreements, which are netted out of the aggregates
at both the M2 and M3 levels. These revisions,
which extend back to 1975, shifted up the level of
M2 as much as $5 billion and the level of M3 as
much as $8 billion over the past decade. Numerous
other smaller revisions were also made to the
aggregates.
The scope of the annual benchmark was somewhat smaller this year than in past years. Beginning
in 1993, certain data series from Call Reports have
begun to be incorporated into the aggregates as
soon as these reports become available. In previous
years, these data were folded in only at the time of
the annual benchmark.
Seasonal factors for the monetary aggregates
have been revised using the X-11-ARIMA procedure that was applied to the benchmarked data
through December 1993. The seasonal adjustment
procedure used this year is identical to that
employed for the past few years.
Complete historical data are available from the
Money and Reserves Projections Section, Division
310
Federal Reserve Bulletin • April 1994
of Monetary Affairs, Mail Stop 72, Board of Governors of the Federal Reserve System, Washington,
DC 20551, or phone (202) 452-3062. The historical
data are also available on floppy diskette for a fee
of $25 per diskette from Publications Services,
Mail Stop 127, Board of Governors of the Federal
Reserve System, Washington, DC 20551, or phone
1.
(202) 452-3245. Revised monthly historical data
for Ml, M2, M3, and total nonfinancial data
are also available from the Economic Bulletin
Board of the U.S. Department of Commerce. Call
(202) 482-1986 for information on how to obtain
a subscription to the Economic Bulletin Board.
Monthly seasonal factors used to construct M l , M2, and M3, January 1993-March 1995
Year and month
Currency
Nonbank
travelers
checks
Demand
deposits
Other checkable deposits 1
Nontransaction components
Total
Held at banks
In M2
In M3 only
1.0119
.9754
.9772
1.0042
.9811
.9929
.9987
.9918
.9939
1.0072
1.0207
1.0463
1.0135
.9948
1.0027
1.0282
.9934
.9971
.9915
.9890
.9913
.9897
.9980
1.0105
1.0207
1.0013
1.0056
1.0273
.9904
.9938
.9866
.9871
.9908
.9881
.9959
1.0123
.9990
1.0010
1.0039
1.0023
.9980
.9997
.9993
.9998
.9982
.9998
1.0006
.9989
.9925
1.0050
1.0026
.9971
1.0082
1.0009
.9951
1.0058
.9994
.9946
1.0044
.9951
1993—January
February
March
April
May
June
July
August
September
October
November
December
1.0004
1.0041
1.0012
.9981
.9992
1.0008
1.0110
.9657
.9673
.9657
.9581
.9727
1.0203
1.0666
1.0742
1.0494
1.0173
.9780
.9639
1994—January
February
March
April
May
June
July
August
September
October
November
December
.9963
.9943
.9948
.9989
.9991
1.0009
1.0048
1.0009
.9993
.9990
1.0012
1.0117
.9676
.9675
.9658
.9585
.9732
1.0201
1.0656
1.0721
1.0481
1.0178
.9791
.9650
1.0124
.9752
.9760
1.0035
.9819
.9921
.9982
.9913
.9939
1.0080
1.0216
1.0465
1.0143
.9950
1.0023
1.0277
.9939
.9970
.9913
.9888
.9910
.9901
.9980
1.0106
1.0211
1.0014
1.0054
1.0268
.9910
.9938
.9865
.9870
.9905
.9884
.9958
1.0122
.9989
1.0007
1.0036
1.0022
.9981
.9999
.9993
.9997
.9981
.9998
1.0008
.9990
.9912
1.0045
1.0025
.9974
1.0090
.9957
.9943
.9960
.9682
.9675
.9658
1.0128
.9749
.9750
1.0149
.9949
1.0018
1.0214
1.0013
1.0051
.9990
1.0006
1.0034
.9904
1.0038
1.0024
1995—January
February
March
.9965
.9943
.9950
.9985
1.0000
1. Seasonally adjusted other checkable deposits at thrift institutions are
derived as the difference between total other checkable deposits, seasonally
1.0011
.9949
1.0058
.9997
.9943
1.0050
.9957
adjusted, and seasonally adjusted other checkable deposits at commercial
banks.
Additional tables on seasonal factors follow.
Announcements
2.
311
Monthly seasonal factors for selected components of the monetary aggregates, January 1993-March 1995
Deposits 1
Year and month
Money market mutual funds
Savings
and
MMDAs
Smalldenomination
time
Largedenomination
time
1993—January
February
March
April
May
June
July
August
September
October
November
December
.9948
.9958
1.0017
1.0032
1.0006
1.0034
1.0024
1.0008
.9983
.9991
1.0021
.9981
1.0005
.9998
.9991
.9990
.9977
.9990
1.0020
1.0021
1.0027
1.0018
.9986
.9979
.9897
.9945
.9999
.9970
1.0079
1.0066
.9991
1.0064
1.0035
.9991
1994—January
February
March
April
May
June
July
August
September
October
November
December
.9949
.9957
1.0014
1.0030
1.0008
1.0035
1.0023
1.0007
.9983
.9991
1.0022
.9984
1.0002
.9996
.9991
.9990
.9978
.9992
1.0021
1.0022
1.0029
1.0019
.9984
.9977
1995—January
February
March
1.0011
In M3 only
.9958
1.0007
1.0169
1.0257
1.0160
.9975
.9933
.9899
.9927
.9878
.9893
.9942
.9953
1.0201
1.0526
1.0172
.9965
1.0089
.9811
.9795
.9997
.9825
.9739
.9957
.9937
.9892
.9938
.9993
.9974
1.0085
1.0068
.9989
1.0065
1.0037
.9991
1.0014
.9959
1.0010
1.0166
1.0257
1.0157
.9985
.9941
.9904
.9926
.9869
.9887
.9942
.9956
1.0181
1.0522
1.0171
.9957
1.0097
.9812
.9797
1.0009
.9835
.9730
.9965
.9935
.9891
.9933
.9989
1.0013
1.0163
1.0257
1.0171
1.0512
1.0176
1.0011
1.0000
.9951
.9956
In M2
.9995
.9991
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 6, 1993-April 3, 1995
Week ending
Currency
Nonbank
travelers
checks
Demand
deposits
Other checkable deposits 1
Nontransaction components
Total
Held at banks
In M2
In M3 only
1993—December
6
13
20
27
1.0027
1.0069
1.0124
1.0212
.9578
.9610
.9643
.9675
1.0389
1.0387
1.0434
1.0456
1.0205
1.0114
1.0074
.9996
1.0152
1.0104
1.0121
1.0054
1.0038
1.0032
.9981
.9929
.9940
1.0070
.9960
.9991
1994—January
3
10
17
24
31
1.0089
1.0038
.9976
.9915
.9858
.9707
.9693
.9680
.9666
.9653
1.0823
1.0501
1.0218
.9781
.9677
1.0232
1.0471
1.0243
.9967
.9804
1.0279
1.0480
1.0326
1.0093
.9918
.9955
1.0007
.9985
.9977
.9676
.9820
.9971
.9943
1.0014
February
7
14
21
28
.9970
.9967
.9959
.9878
.9655
.9668
.9682
.9695
.9869
.9785
.9700
.9654
1.0107
.9963
.9876
.9853
1.0157
1.0033
.9946
.9920
.9998
1.0007
1.0014
1.0010
.9983
1.0081
1.0021
1.0095
Marrch
7
14
21
28
.9979
.9967
.9954
.9904
.9690
.9672
.9653
.9634
.9873
.9838
.9677
.9554
1.0180
1.0064
.9983
.9837
1.0205
1.0102
1.0023
.9900
1.0029
1.0050
1.0033
1.0027
1.0006
1.0079
1.0038
1.0029
April
4
11
18
25
1.0003
1.0041
.9994
.9942
.9616
.9601
.9586
.9570
1.0053
1.0122
1.0220
.9820
1.0215
1.0411
1.0456
1.0155
1.0145
1.0392
1.0457
1.0190
1.0047
1.0073
1.0031
.9984
2
9
16
23
30
.9924
1.0041
.9997
.9969
.9973
.9555
.9620
.9698
.9776
.9854
.9931
.9914
.9952
.9581
.9733
1.0000
.9985
1.0080
.9936
.9824
.9746
.9969
.9979
.9985
.9980
.9979
May
1.0134
.9967
.9835
.9763
1.0000
.9901
1.0000
.9960
.9984
1.0004
1.0058
1.0081
1.0123
1.0133
312
Federal Reserve Bulletin • April 1994
3. Continued
Week ending
Currency
Nonbank
travelers
checks
Demand
deposits
Other checkable deposits 1
Nontransaction components
Total
Held at banks
In M2
In M3 only
1994—June
6
13
20
27
1.0041
1.0038
1.0009
.9950
.9957
1.0093
1.0229
1.0364
1.0091
.9996
.9845
.9680
1.0189
1.0122
.9963
.9667
1.0118
1.0077
.9923
.9696
1.0010
1.0028
.9999
.9970
1.0040
1.0078
.9997
.9990
July
4
11
18
25
1.0070
1.0108
1.0051
1.0003
1.0491
1.0569
1.0646
1.0723
1.0199
1.0220
1.0031
.9663
1.0000
1.0120
.9917
.9708
.9948
1.0031
.9855
.9705
.9975
1.0015
1.0004
.9981
.9875
.9896
.9965
.9964
1
8
15
22
29
.9971
1.0089
1.0049
1.0002
.9923
1.0800
1.0791
1.0748
1.0705
1.0662
.9855
1.0067
1.0091
.9782
.9712
.9791
1.0083
.9958
.9822
.9698
.9756
1.0017
.9929
.9832
.9712
.9982
1.0006
1.0008
.9999
.9980
1.0023
1.0038
1.0078
1.0046
1.0091
September 5
12
19
26
1.0035
1.0039
.9990
.9933
1.0611
1.0544
1.0477
1.0409
1.0016
1.0071
.9982
.9656
1.0041
1.0114
.9953
.9641
1.0018
1.0077
.9925
.9691
.9990
1.0009
.9975
.9956
1.0000
1.0041
1.0019
.9992
October
3
10
17
24
31
.9958
1.0074
.9966
.9906
1.0341
1.0269
1.0196
1.0124
1.0051
1.0051
1.0132
1.0247
.9875
1.0043
.9784
1.0069
.9983
.9771
.9794
.9807
1.0009
.9963
.9815
.9749
.9976
1.0018
1.0008
.9988
.9987
.9884
.9936
.9931
.9995
.9937
November
7
14
21
28
1.0030
1.0030
1.0004
1.0010
.9960
.9857
.9753
.9650
1.0240
1.0344
1.0100
1.0146
1.0139
1.0057
.9931
.9784
1.0068
1.0024
.9909
.9829
1.0012
1.0019
1.0013
.9982
.9973
1.0056
1.0038
1.0145
December
5
12
19
26
1.0015
1.0084
1.0114
1.0228
.9585
.9618
.9650
.9683
1.0403
1.0380
1.0439
1.0385
1.0143
1.0131
1.0070
.9999
1.0098
1.0071
1.0091
1.0068
1.0023
1.0032
.9998
.9940
1.0003
1.0053
.9969
.9962
2
9
16
23
30
1.0081
1.0037
.9982
.9927
.9855
.9715
.9705
.9689
.9672
.9656
1.0791
1.0643
1.0269
.9802
.9628
1.0199
1.0517
1.0269
1.0021
.9778
1.0302
1.0542
1.0344
1.0102
.9853
.9955
1.0009
1.0005
.9981
.9972
.9751
.9829
.9920
.9925
.9976
February
6
13
20
27
.9952
.9972
.9968
.9878
.9652
.9666
.9680
.9694
.9873
.9810
.9692
.9618
1.0096
.9995
.9884
.9816
1.0130
1.0049
.9966
.9903
.9998
1.0007
1.0010
1.0005
.9977
1.0068
1.0024
1.0073
March
6
13
20
27
.9965
.9989
.9969
.9919
.9694
.9675
.9655
.9636
.9883
.9810
.9723
.9529
1.0133
1.0087
.9985
.9857
1.0175
1.0115
1.0020
.9911
1.0024
1.0045
1.0034
1.0027
1.0055
1.0038
1.0042
1.0050
April
3
.9967
.9617
.9939
1.0114
1.0099
1.0045
.9875
August
1995—January
1.0011
1. Seasonally adjusted other checkable deposits at thrift institutions are
derived as the difference between total other checkable deposits, seasonally
adjusted, and seasonally adjusted other checkable deposits at commercial
banks.
Announcements
4. Weekly seasonal factors for selected components of the monetary aggregates, December 6, 1993-April 3, 1995
Deposits 1
Week ending
Savings
and
MMDAs
Smalldenomination
time
Money market mutual funds
Largedenomination
time
In M2
In M3 only
1993—December
6
13
20
27
1.0030
1.0048
.9964
.9915
.9982
.9978
.9972
.9975
.9981
.9989
.9943
.9948
.9970
1.0028
.9989
.9914
.9916
1.0065
1.0003
.9996
1994—January
3
10
17
24
31
.9938
1.0007
.9971
.9920
.9895
.9995
1.0007
1.0003
1.0000
.9998
.9914
.9923
.9908
.9875
.9848
.9803
.9917
1.0039
1.0090
1.0082
.9528
.9829
1.0260
1.0323
1.0588
February
7
14
21
28
.9962
.9975
.9956
.9935
1.0001
.9999
.9995
.9989
.9888
.9943
.9956
.9966
1.0095
1.0152
1.0199
1.0215
1.0428
1.0649
1.0391
1.0619
March
7
14
21
28
.9996
1.0023
1.0010
1.0004
.9992
.9990
.9985
.9991
.9988
1.0011
.9975
.9996
1.0232
1.0246
1.0276
1.0297
1.0127
1.0378
1.0177
1.0217
April
4
11
18
25
1.0066
1.0117
1.0030
.9973
1.0004
.9995
.9988
.9986
.9996
.9984
.9955
.9963
1.0207
1.0240
1.0172
1.0112
.9678
1.0086
.9868
1.0056
May
2
9
16
23
30
.9958
1.0025
1.0037
.9998
.9979
.9982
.9980
.9977
.9975
.9977
.9985
1.0043
1.0063
1.0108
1.0152
1.0042
.9974
.9952
.9997
1.0000
.9986
1.0182
1.0091
1.0270
.9910
June
6
13
20
27
1.0063
1.0091
1.0016
.9979
.9981
.9986
.9988
.9996
1.0094
1.0117
1.0067
1.0029
.9983
1.0004
.9952
.9895
.9883
.9909
.9884
.9778
July
4
11
18
25
1.0020
1.0068
1.0039
.9996
1.0024
1.0026
1.0023
1.0017
.9994
1.0005
.9956
.9978
.9787
.9917
.9919
.9926
.9359
.9645
.9920
.9879
August
1
8
15
22
29
.9988
1.0045
1.0042
.9990
.9952
1.0017
1.0022
1.0021
1.0021
1.0020
1.0020
1.0011
1.0051
1.0083
1.0112
.9924
.9892
.9903
.9950
.9968
1.0026
.9863
1.0043
.9993
1.0176
September 5
12
19
26
1.0008
1.0031
.9982
.9933
1.0031
1.0029
1.0025
1.0024
1.0094
1.0099
1.0040
.9967
.9889
.9895
.9858
.9864
.9870
1.0083
.9864
.9750
October
3
10
17
24
31
.9958
1.0023
1.0012
.9966
.9975
1.0039
1.0042
1.0021
1.0007
.9996
.9976
1.0028
.9981
.9975
.9987
.9825
.9878
.9894
.9904
.9898
.9460
.9633
.9632
.9934
.9832
November
7
14
21
28
1.0055
1.0057
.9998
.9975
.9994
.9988
.9980
.9978
.9998
1.0016
1.0018
1.0028
.9891
.9928
.9929
1.0005
.9871
.9871
1.0057
1.0079
December
5
12
19
26
1.0032
1.0048
.9972
.9925
.9979
.9977
.9970
.9973
1.0006
.9998
.9944
.9933
.9990
1.0031
1.0001
.9904
.9894
1.0070
1.0012
.9965
2
9
16
23
30
.9945
1.0016
.9978
.9917
.9893
.9992
1.0002
1.0006
.9999
.9996
.9912
.9888
.9903
.9883
.9883
.9828
.9921
1.0025
1.0071
1.0075
.9638
.9806
1.0182
1.0317
1.0492
1995—January
313
314
Federal Reserve Bulletin • April 1994
4. Continued
Deposits 1
Week ending
1995—February
March
April
Savings
and
MMDAs
Smalldenomination
time
Money market mutual funds
Largedenomination
time
In M2
In M3 only
6
13
20
27
.9959
.9972
.9955
.9933
.9999
.9998
.9995
.9989
.9892
.9935
.9942
.9951
1.0089
1.0140
1.0179
1.0222
1.0411
1.0612
1.0469
1.0587
6
13
20
27
.9995
1.0020
1.0001
.9997
.9995
.9993
.9988
.9986
.9972
1.0004
.9974
1.0003
1.0248
1.0262
1.0271
1.0275
1.0195
1.0335
1.0203
1.0207
3
1.0061
.9997
.9992
1.0205
.9774
1. These seasonal factors are applied to deposits data at both commercial
banks and thrift institutions.
315
Minutes of the
Federal Open Market Committee Meeting
of December 21, 1993
A meeting of the Federal Open Market Committee
was held in the offices of the Board of Governors of the Federal Reserve System in Washington, D.C., on Tuesday, December 21, 1993, at
9:00 a.m.
Present:
Mr. Greenspan, Chairman
Mr. McDonough, Vice Chairman
Mr. Angell
Mr. Boehne
Mr. Keehn
Mr. Kelley
Mr. LaWare
Mr. Lindsey
Mr. McTeer
Mr. Mullins
Ms. Phillips
Mr. Stern
Messrs. Broaddus, Jordan, Forrestal, and Parry,
Alternate Members of the Federal
Open Market Committee
Messrs. Hoenig, Melzer, and Syron, Presidents
of the Federal Reserve Banks of Kansas City,
St. Louis, and Boston respectively
Mr. Kohn, Secretary and Economist
Mr. Bernard, Deputy Secretary
Mr. Coyne, Assistant Secretary
Mr. Gillum, Assistant Secretary
Mr. Mattingly, General Counsel
Mr. Patrikis, Deputy General Counsel
Mr. Prell, Economist
Mr. Truman, Economist
Messrs. R. Davis, Lang, Lindsey, Promisel,
Rolnick, Rosenblum, Scheld, Siegman,
Simpson, and Slifman, Associate Economists
Ms. Lovett, Manager for Domestic Operations,
System Open Market Account
Mr. Fisher, Manager for Foreign Operations,
System Open Market Account
Mr. Winn, Assistant to the Board, Office of Board
Members, Board of Governors1
Mr. Ettin, Deputy Director, Division of Research
and Statistics, Board of Governors
Mr. Madigan, Associate Director, Division of
Monetary Affairs, Board of Governors
Mr. Stockton, Associate Director, Division of
Research and Statistics, Board of Governors
Ms. Low, Open Market Secretariat Assistant,
Division of Monetary Affairs, Board of
Governors
Ms. Pianalto, First Vice President, Federal Reserve
Bank of Cleveland
Messrs. Beebe, T. Davis, Goodfriend, and
Ms. Tschinkel, Senior Vice Presidents,
Federal Reserve Banks of San Francisco,
Kansas City, Richmond, and Atlanta
respectively
Mr. McNees, Vice President, Federal Reserve Bank
of Boston
Ms. Meulendyke and Mr. Thornton, Assistant Vice
Presidents, Federal Reserve Banks of
New York and St. Louis respectively
By unanimous vote, the minutes for the meeting
of the Federal Open Market Committee held on
November 16, 1993, were approved.
By unanimous vote, responsibility for making
decisions on appeals of denials by the Secretary of
the Committee for access to Committee records
was delegated under the provisions of 271.4(d) of
the Committee's Rules Regarding Availability of
Information to Mr. Mullins and, in his absence, to
Ms. Phillips.
The Manager for Foreign Operations reported on
developments in foreign exchange markets during
the period since the November meeting. There were
1. Attended part of the meeting.
316
Federal Reserve Bulletin • April 1994
no System open market transactions in foreign
currencies during this period, and thus no vote was
required of the Committee.
The Manager for Domestic Operations reported
on developments in domesticfinancialmarkets and
on System open market transactions in government
securities and federal agency obligations during the
period November 16, 1993, through December 20,
1993. By unanimous vote, the Committee ratified
these transactions.
The Committee then turned to a discussion of the
economic and financial outlook and the implementation of monetary policy over the intermeeting
period ahead. A summary of the economic and
financial information available at the time of the
meeting and of the Committee's discussion is
provided below, followed by the domestic policy
directive that was approved by the Committee and
issued to the Federal Reserve Bank of New York.
The information reviewed at this meeting suggested that economic activity had recorded a strong
advance in recent months. Consumer spending had
picked up, and business purchases of durable
equipment had remained on a marked upward
trend. Residential construction was rising rapidly,
and nonresidential construction had turned up from
depressed levels. Industrial production had been
boosted by developments in the motor vehicle
industry, and employment had continued to post
solid gains. Most indexes of prices pointed to little
change in inflation trends despite the recent acceleration of economic activity.
Total nonfarm payroll employment rose appreciably further in November. Another substantial
increase in jobs was recorded in the services industries, notably in health and business services. Construction employment was up significantly further
after registering modest gains on balance over the
first three quarters of 1993. In manufacturing, there
were back-to-back increases in jobs in October and
November following seven consecutive monthly
declines, and both overtime hours and the average
workweek remained at a high level. Most of the
November expansion in factory jobs occurred in
the motor vehicle and capital goods industries. The
civilian unemployment rate fell considerably in
November, to 6.4 percent.
Industrial production increased sharply in October and November. Manufacturing accounted for
all the gain over the two months, with the rise
partly reflecting a continuing rebound in the production of motor vehicles and parts. Elsewhere in
manufacturing, strong advances were recorded in
the output of computers and non-auto durable consumer goods. The sharp expansion in production
was associated with substantial increases in the rate
of utilization of industrial capacity in October and
November.
Retail sales were up moderately in November
after a large advance in October. Motor vehicle
sales surged in October and remained at the higher
level in November, apparently reflecting in part
favorable financing terms, small price increases—
adjusted for quality improvements—on 1994 models, and generous incentives on pickup trucks from
some manufacturers. Sales of apparel, furniture
and appliances, and other durable goods also were
strong on balance over October and November.
Housing starts rose substantially in November;
starts of single-family units reached their highest
level since early 1987, but starts of multifamily
units edged lower. Sales of both new and existing
homes remained robust in October.
Business spending for durable equipment apparently continued to rise rapidly. Among nondefense
capital goods other than aircraft, shipments of computers and other durable equipment were significantly higher in October than in the third quarter. In
addition, the demand for heavy trucks remained
strong, and the brisk sales of light vehicles in
October and November likely were the result in
part of a step-up in spending by businesses. Nonresidential construction activity increased again in
October: Office building declined further and
industrial construction retraced part of a sizable
September gain, but outlays for institutional, public
utilities, and non-office commercial structures continued to move higher.
Business inventories were little changed in October, with reductions in manufacturing and wholesale stocks nearly offsetting increases at the retail
level. A moderate further decline in manufacturers'
inventories in October was concentrated among
producers of aircraft and parts, where stocks have
been contracting for more than two years; the
stocks-to-shipments ratio for manufacturing as a
whole fell to its lowest level in recent years. In the
wholesale sector, inventories declined in October
after changing little in September, and the ratio of
inventories to sales remained in the middle of its
Minutes of the Federal Open Market Committee Meeting
range over the past several years. At the retail
level, stocks increased considerably further; with
sales expanding vigorously, however, the ratio of
stocks to sales edged lower, and this ratio also was
in the middle of its range over the past several
years.
The nominal U.S. merchandise trade deficit for
October was about unchanged from its September
level and its average rate for the third quarter. The
value of both exports and imports increased in
October. Exports of automotive products rose
strongly, and exports of aircraft rebounded from a
September downturn. The advance in imports
was spread across all major categories. Economic
activity in the major foreign industrial countries
expanded moderately in the third quarter; however,
available data suggested that output in Japan and
Germany might decline in the current quarter, with
a depressing effect on growth for these industrial
countries as a group.
Broad indexes of consumer and producer prices
pointed to little change in inflation trends, although
prices of some commodities and industrial materials had firmed recently. Producer prices of finished
goods were unchanged in November after declining in October and over the third quarter. In
November, a large drop in the prices of finished
energy goods offset a rebound in the prices of other
finished goods. Producer prices for nonfood, nonenergy finished goods were about unchanged over
the twelve months ended in November. At the
consumer level, prices of items other than food and
energy advanced moderately in November; the
twelve-month increase in this price measure was a
little smaller than the rise over the comparable
period ended in November 1992. Average hourly
earnings edged up in November; for the twelve
months ended in November, these earnings were up
a smaller amount than over the preceding year.
At its meeting on November 16, 1993, the Committee adopted a directive that called for maintaining the existing degree of pressure on reserve positions and that did not include a presumption about
the likely direction of any adjustment to policy
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 or slightly lesser
317
reserve restraint might be acceptable during the
intermeeting period. The reserve conditions associated with this directive were expected to be consistent with modest growth of M2 and M3 over coming months.
Open market operations during the intermeeting
period were directed toward maintaining the existing degree of pressure on reserve positions. Adjustment plus seasonal borrowing averaged somewhat
less than anticipated levels, reflecting very light
amounts of adjustment borrowing over most of the
period, and the federal funds rate remained close to
3 percent.
While most short-term interest rates changed
little over the intermeeting period, signs of stronger
economic growth and the firming of some commodity prices tended to push up longer-term interest rates, although that pressure was offset to some
extent by declines in oil prices. Taken as a whole,
incoming economic data were seen by market participants as increasing the odds of a tightening of
monetary policy at some point but not necessarily
in the very near term. Most indexes of stock prices
fell slightly over the intermeeting period, but the
strong performance of a fewfirmsboosted the Dow
Jones Industrial Average to a new high near the end
of the period.
In foreign exchange markets, the trade-weighted
value of the dollar in terms of the other G-10
currencies was about unchanged on balance over
the intermeeting period. The dollar appreciated
against the yen in response to incoming data suggesting weakness in the Japanese economy and
heightened prospects for further monetary easing
by the Bank of Japan. Even though interest rates
eased in Europe as central banks lowered their
money-market intervention rates, the dollar was
little changed against the German mark and
declined somewhat against other European
currencies.
Growth of M2 and M3 strengthened appreciably
in November; both aggregates had risen at somewhat faster rates since late summer than earlier in
the year. Ml growth remained brisk in November,
and money funds included in M2 apparently benefited from a slowdown in inflows to bond funds in
the wake of the earlier decline in bond prices. The
pickup in M3 growth reflected a surge in term
Eurodollar deposits as well as faster growth of M2.
For the year through November, M2 and M3 were
318
Federal Reserve Bulletin • April 1994
estimated to have grown at rates somewhat above
the lower end of the Committee's ranges for the
year. Total domestic nonfinancial debt had
expanded moderately in recent months, and for the
year through November it was estimated to have
increased at a rate in the lower half of the Committee's monitoring range.
The staff forecast prepared for this meeting suggested that, after a strong fourth-quarter advance,
the economy would expand at a more moderate
rate in 1994. Consumer spending was projected to
decelerate to a rate more in line with the growth of
disposable income. Business fixed investment was
expected to advance briskly, although not quite as
rapidly as in 1993, and further gains in homebuilding activity likely would be concentrated in the first
half of the year. Exports were projected to
strengthen somewhat, bolstered by a modest pickup
in foreign economic growth. Fiscal restraint was
expected to exert a substantial drag on spending,
through both falling government defense purchases
and higher taxes. In light of the limited margins of
slack in labor and product markets, the ongoing
expansion was projected to be associated with only
a slight further reduction in inflation.
In the Committee's discussion of current and
prospective economic developments, members
referred to widespread indications, both statistical
and anecdotal, of a marked strengthening in economic activity and much improved business and
consumer confidence in recent months. The rate of
economic growth could be expected to moderate
during the early months of 1994 from what currently appeared to be an unsustainable pace, but the
members viewed the extent of such moderation as
a key uncertainty in the outlook. A number of
members observed that a sharp slowing of the
expansion early next year, similar to the slowdown
after the surge in activity during the closing months
of 1992, could not be ruled out. However, most saw
the gains in the economy as more solidly based
than earlier in the expansion, and they generally
expected the economy to settle into a pattern of
moderate growth over coming quarters at a trend
rate close to or somewhat above the economy's
long-run potential. With regard to the outlook for
inflation, the members saw little evidence in available measures of prices and wages or in other
indicators that any significant change might already
have occurred in underlying inflation trends. None-
theless, views varied somewhat with regard to the
outlook and ranged from expectations of some
modest further decline in the core rate of inflation
to concerns about the possibility of some acceleration in the context of diminishing margins of unemployed production resources and an accommodative monetary policy as reflected in low real
short-term interest rates and continued rapid growth
in narrow measures of money and reserves.
In their comments about developments across
the nation, members observed that economic conditions clearly had strengthened in many regions and
that the better conditions had fostered appreciable
improvement in business and consumer sentiment
in most parts of the country. The members recognized that the economic expansion was still quite
subdued in many local areas and that economic
activity remained depressed in some parts of the
country such as southern California. The overall
strength of the economy was fueled to an important
extent by interest-sensitive spending on producer
and consumer durables and housing and tended to
confirm the durability of the expansion. Gains in
such spending were not likely to be sustained at
their recent rates, but the cash flow and income that
such expenditures had generated were likely to
foster further economic growth, especially in the
context of generally supportive conditions in financial and credit markets. The members acknowledged that a number of factors continued to constrain the expansion, including ongoing though
less pervasive balance-sheet rebuilding, business
restructuring and downsizing activities, and the
downtrend in defense spending. On balance, however, current developments did not point to a
marked deviation from the moderate growth trend
in economic activity that had been experienced
over the past two years, though in the view of a
number of members, the odds on somewhat
stronger growth were greater than they had been
earlier in the expansion.
With regard to the outlook for key sectors of the
economy, consumer expenditures were seen as
likely to continue to provide vital support to the
expansion even though increases in consumer
spending were not likely to be maintained at recent
rates. Members noted that the improved consumer
confidence and increased spending were reflected
in a somewhat greater willingness to incur debt, at
least in the context of reduced interest rates. Some
Minutes of the Federal Open Market Committee Meeting
members cautioned, however, that growth in consumer expenditures had exceeded gains in incomes
for an extended period, insofar as could be judged
from available data, and an already low saving
rate seemed likely to limit the potential growth in
such spending. Moreover, the negative impact of
increased tax rates on high incomes seemed likely
to be felt especially during the first half of 1994,
though the extent of that impact on consumer
spending remained uncertain. On the positive side,
members cited a number of developments that
would tend to bolster overall consumer expenditures, including lower energy costs, reduced
income taxes for many individuals stemming from
indexing, and lower interest charges on various
kinds of debt. More generally, the rise in consumer
confidence seemed to be related to perceptions of
improving employment opportunities despite continuing announcements of sizable workforce reductions by some large firms.
The members expected growth in real business
investment to remain robust in 1994 but to decelerate somewhat from the rapid rate of expansion over
the past year. Continuing increases in business
sales and low financing costs along with ongoing
efforts to improve productivity were likely to
remain conducive to substantial further growth in
overall spending for business equipment despite
persisting weakness in aerospace and defenserelated industries. Nonresidential construction
activity, including commercial and industrial building and infrastructure construction, displayed signs
of considerable strength in some parts of the country; and declining vacancy rates pointed to a leveling out or even a pickup in nonresidential building
construction in a number of other areas. Some
expansion in inventories seemed likely over the
forecast horizon to accommodate the continuing
growth in overall demands. In this connection,
members noted that a rise in inventories probably
contributed to the expansion in production in recent
months since the latter could not be explained
entirely by the strength of final demand, and a
buildup of motor vehicle stocks in late 1993 was
likely to continue into the early part of 1994.
The housing sector was expected to remain a
source of considerable economic stimulus during
the early months of 1994, both directly and indirectly in terms of the favorable effects on purchases
of home furnishings. Some members commented
319
that the increases in housing starts experienced
over the closing months of this year might not be
sustainable; even so, housing construction, especially in the single-family sector, should be relatively well maintained given the likelihood that
homeownership would remain comparatively
affordable in the context of growing incomes,
favorable mortgage rates, and limited pressures on
the prices of new homes.
With respect to fiscal policy, members referred
to the prospects for further cutbacks in defense
spending that probably would continue to be offset
only in part by growth in federal government purchases of other goods and services. However, net
reductions in government purchases were expected
to diminish over the projection horizon. Likewise,
adverse effects on spending of the rise in tax rates
on higher incomes would tend to be concentrated
in thefirsthalf of 1994, and the impact on spending
over the months ahead might well be relatively
limited because many taxpayers probably had
anticipated the higher taxes and had taken measures to mitigate or spread out their effects or
would meet new tax obligations partly out of savings. Proposed health care reform legislation would
exert a restraining effect on the economy, should it
be enacted, owing to mandated cost increases on
employers. If this form of financing were adopted,
however, the legislation might have little, or perhaps even a favorable, effect on the federal deficit.
The external sector of the economy also appeared likely to have a moderating effect on
domestic economic activity over the year ahead.
The economies of key foreign industrial nations
and thus U.S. exports to those nations were
projected to grow only gradually, while the
expansion of U.S. imports was likely to remain
relatively robust on the basis of current expectations for domestic economic activity. In the view
of at least some members, however, stimulative
economic policies in a number of foreign countries might well lead to stronger economic performances and to greater demand for U.S. goods and
services than many observers currently anticipated.
In any event, the members generally agreed that
the outlook for developments abroad remained a
source of particular uncertainty for the domestic
economy.
Members commented that there were few indications of any change in inflationary trends in broad
320
Federal Reserve Bulletin • April 1994
measures of prices and wages despite the surge in
economic activity in recent months and associated
increases in capacity utilization rates. One important sign of growing inflationary pressures, rising
lead times for deliveries of materials, had not
emerged. Some members noted that although
capacity usage rates were approaching or had
reached levels that in the past had tended to signal
the onset of rising inflation, the growth of competition stemming from the internationalization of numerous markets suggested that old capacity benchmarks might no longer apply and, especially in the
context of excess capacity in many foreign economies, the potential inflationary effects of strong
domestic demand pressures might remain subdued
for some period of time. In keeping with these
assessments, members again reported on the
absence of inflationary cost pressures in local areas
across the country and on persisting comments by
business contacts regarding their inability to raise
prices to achieve more satisfactory or customary
profit margins. Business executives continued to
look to improvements in productivity to maintain
or increase their margins, and there were numerous
reports of considerable success in implementing
productivity gains. Price developments in commodity markets presented a mixed picture; higher food
prices stemming from weather conditions earlier in
the year had had an adverse effect on broad measures of prices, but the drop in energy prices had
favorable implications for the near-term inflation
outlook.
It also was noted that rising inflationary pressures often were accompanied by a pickup in credit
demands, and there was no evidence of any surge
in such demands. However, the expansion of overall nonfinancial debt had strengthened to a degree.
Moreover, in the view of some members, the rise in
long-term interest rates and in gold prices might
well have been caused in part by heightened inflation concerns. Members also cited scattered examples of greater price pressures, notably the prices of
lumber and some other building materials and of
related efforts to pass on the added costs through
higher prices on new homes in some areas. Despite
the absence of any general indication of rising
inflation, a number of members expressed concern
about the potential for increasing inflationary pressures in the economy and saw a need to monitor
possible future sources of inflation with special
care over the period ahead, especially in light of the
considerable lags between monetary policy actions
and their effects on prices.
In the Committee's discussion of monetary policy for the period until the next scheduled meeting
in early February, a majority of the members
endorsed a proposal to maintain unchanged conditions in reserve markets and to retain the currently
unbiased instruction in the directive concerning
possible intermeeting adjustments to policy. Looking forward, many of the members commented that
the Committee probably would have tofirmreserve
conditions at some point to adjust monetary policy
from its currently quite accommodative stance to a
more neutral position, and that such a policy move
might have to be made sooner rather than later to
contain inflation and continue to provide a sound
basis for sustained economic expansion. Monetary
conditions had been eased to their current degree
of accommodation in the 1990-92 period in the
context of balance sheet restructuring and other
unusual forces that were holding down spending.
Since the latter part of 1992, however, downside
risks to the expansion had diminished considerably
as financial conditions became more supportive of
economic activity. Borrowers and lenders had
strengthened their financial positions substantially
and were less reluctant to use and extend credit.
Moreover, the low level of real short-term interest
rates and in the view of some members the continued rapid growth of reserves or increases in a
variety of commodity prices provided evidence of a
quite accommodative monetary policy. Overstaying such a policy would incur an increasing risk of
fostering greater inflationary pressures that in turn
would undermine the sustainability of the expansion. For now, however, a majority believed that
the risks remained at an acceptable level, given the
remaining slack in the economy and the lack of
near-term inflation pressures. Waiting for further
developments before making any policy move was
warranted in light of the uncertainties surrounding
the outlook, notably with regard to the extent of the
moderation in economic growth expected early
next year. If the economy settled into a pattern of
growth about in line with its potential, the chances
of greater inflation pressures down the road would
be reduced and the need for a near-term policy
adjustment would be less pressing, though it would
still be required at some point.
Minutes of the Federal Open Market Committee Meeting
Two members expressed a strong preference for
a prompt move toward a firmer policy stance to
forestall inflation pressures. A number of others
commented that the decision was a close call,
including two who had a marginal preference for
tightening policy at this time but who could accept
a delay in light of the uncertainties that were
involved.
Members who could support an unchanged policy stance also indicated their acceptance of a
directive that was not biased in either direction
with regard to possible adjustments in the degree of
reserve pressure during the intermeeting period.
Some observed that while the flow of economic
reports during this period was likely to underscore
the marked strengthening of the economy, those
reports mainly would cover developments in the
fourth quarter, and from a monetary policy perspective the members were more interested in knowing
something about the extent of the follow-through
strength early in the new year. Moreover, the members recognized that any tightening move would
represent a turn in policy that might well have a
greater-than-usual effect on financial markets. This
prospect argued for taking such an action at a
meeting, with the benefit of a full Committee
review of the implications for future growth and
inflation pressures of a wide variety of emerging
developments—including those in money, credit,
and financial markets—rather than an intermeeting
action based on an asymmetric directive. In the
view of one member, a tightening action over the
coming intermeeting period would incur an undue
risk of an exaggerated response in financial markets, given the likelihood of thin trading markets
around year-end; and since a policy move should
be postponed, a symmetrical directive seemed
appropriate.
At the conclusion of the Committee's discussion,
all but two members indicated that they could
support a directive that called for maintaining the
existing degree of pressure on reserve positions and
that did not include a presumption about the likely
direction of any adjustment to policy 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, the Committee
decided that slightly greater or slightly lesser
321
reserve restraint might be acceptable during the
intermeeting period. According to a staff analysis,
the reserve conditions contemplated at this meeting
would be consistent with moderate growth in M2
and M3 over the months ahead.
At the conclusion of the meeting, the Federal
Reserve Bank of New York was authorized and
directed, until instructed otherwise by the Committee, to execute transactions in the System Account
in accordance with the following domestic policy
directive:
The information reviewed at this meeting suggests a
strong advance in economic activity in recent months.
Total nonfarm payroll employment rose appreciably further in November, and the civilian unemployment rate
fell considerably to 6.4 percent. Industrial production
increased sharply in October and November, partly
reflecting a continuing rebound in the output of motor
vehicles. Retail sales were up moderately in November
after a large increase in October. Housing starts advanced substantially in November. Business equipment
expenditures have been rising rapidly, and nonresidential
construction has turned up from depressed levels. The
nominal U.S. merchandise trade deficit in October was
about unchanged from its average rate in the third
quarter. Broad indexes of consumer and producer prices
suggest little change in inflation trends, although prices
of some raw materials have increased recently.
Short-term interest rates have changed little, while
intermediate- and long-term rates have risen slightly
since the Committee meeting on November 16. In foreign exchange markets, the trade-weighted value of the
dollar in terms of the other G-10 currencies is about
unchanged on balance over the intermeeting period.
Growth of M2 and M3 strengthened in November, and
both aggregates have risen at somewhat faster rates since
late summer than earlier in the year. For the year through
November, M2 and M3 are estimated to have grown at
rates somewhat above the lower end of the Committee's
ranges for the year. Total domestic nonfinancial debt has
expanded at a moderate rate in recent months, and for
the year through November it is estimated to have
increased at a rate in the lower half of the Committee's
monitoring range.
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
lowered the ranges it had established in February for
growth of M2 and M3 to ranges of 1 to 5 percent and
0 to 4 percent respectively, measured from the fourth
quarter of 1992 to the fourth quarter of 1993. The
Committee anticipated that developments contributing to
unusual velocity increases would persist over the balance of the year and that money growth within these
lower ranges would be consistent with its broad policy
322
Federal Reserve Bulletin • April 1994
objectives. The monitoring range for growth of total
domestic nonfinancial debt also was lowered to 4 to
8 percent for the year. For 1994, the Committee agreed
on tentative ranges for monetary growth, measured from
the fourth quarter of 1993 to the fourth quarter of 1994,
of 1 to 5 percent for M2 and 0 to 4 percent for M3. The
Committee provisionally set the monitoring range for
growth of total domestic nonfinancial debt at 4 to 8 percent for 1994. The behavior of the monetary aggregates
will continue to be evaluated in the light of progress
toward price level stability, movements 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 or
slightly lesser reserve restraint might be acceptable in
the intermeeting period. The contemplated reserve conditions are expected to be consistent with moderate
growth in M2 and M3 over coming months.
Votes for this action: Messrs. Greenspan, McDonough, Boehne, Keehn, Kelley, LaWare, McTeer,
Mullins, Ms. Phillips, and Mr. Stern. Votes against
this action: Messrs. Angell and Lindsey.
Messrs. Angell and Lindsey dissented because
they believed that monetary policy was overly accommodative and needed to be adjusted promptly
toward a more neutral stance to counter potential
inflationary pressures in the economy. They referred to the long lags with which monetary policy
exerts its effects on inflation and the consequent
need to adjust monetary policy on a timely basis to
foster the Committee's long-run objective of stable
prices. They understood the difficulty offindingthe
appropriate circumstances for tightening actions so
as to avoid unintended interpretations and repercussions in financial markets. In their judgment, economic and financial conditions were unlikely to be
more favorable later and waiting risked undesirable
inflationary consequences.
Mr. Angell also stressed that the Committee
should focus more directly on forward-looking
indicators such as the price of gold and the estimate
of the natural rate of interest provided by the yield
onfive-yearTreasury notes. He favored an immediate increase of 50 basis points in the federal funds
rate, which would enable the Committee to observe
how the market adjusted the price of gold to the
changed opportunity cost of holding gold. He
believed that if bond market participants concluded
that the Committee was using the price of gold to
target the price level,five-yearand ten-year interest
rates would then be significantly lower than if the
Committee's tightening was a belated response to a
worsening outlook for inflation. He emphasized
that the objective of monetary policy clearly should
be stable money, which produces stable prices and
an ongoing optimal and stable economic growth
path.
Mr. Lindsey commented further that a modest
policy move now would appropriately signal the
Committee's concern about the potential for inflation. Such an action would begin the process of
moving policy away from what he perceived as an
unsustainable stance. He also noted that foreign
competition had been restraining pressures on
domestic prices, and the policy course he had in
mind would continue to help in that regard by
supporting the foreign exchange value of the dollar.
REQUEST FOR ACCESS TO CONFERENCE
CALL RECORD
At this meeting the Committee considered a
request from Mr. Henry B. Gonzalez, Chairman of
the House Committee on Banking, Finance, and
Urban Affairs, for access by his staff to the tape
recording and transcript of the Committee's telephone conference on October 15, 1993. The main
purpose of the conference call was to discuss what
position the Committee should take on the release
of material about its deliberations that are contained in historical files of meeting transcripts; the
issue undoubtedly would be raised in the near
future, probably during upcoming testimony before
Chairman Gonzalez' Committee scheduled for
October 19, 1993.
Chairman Gonzalez had indicated that he was
investigating the possibility that Committee members had conspired during the conference call to
hide information from the House Banking Committee. The accusation was wholly without merit, but
at this stage the Committee could fully vindicate
itself only by making the tape and transcript available to congressional staff for their review.
Such a step would be taken with considerable
reluctance. The recording in question did not contain a discussion of monetary policy, but it did
Minutes of the Federal Open Market Committee Meeting
involve Committee deliberations, which are protected from public disclosure by the Freedom of
Information Act. Some members expressed concern that granting access to this material could be
viewed as setting a precedent for the premature
release of other tapes and transcripts, with adverse
effects on the Committee's deliberations. However,
the Committee's General Counsel expressed the
opinion that the Committee could make an exception for this transcript without prejudicing its ability to withhold deliberative or other privileged
materials in other transcripts under the Freedom of
Information Act. The members agreed with a proposal from the Chairman that the staff of Chairman
Gonzalez and of certain other Banking Committee
members be allowed to listen to the tape recording
of the October 15 conference call. The review
would be conducted at the offices of the Board of
Governors, and the congressional staff members
would be asked to keep confidential the informa-
323
tion to be made available to them. The members
indicated that it should be made clear that access to
the tape in question was being undertaken solely to
dispel the unfounded allegations regarding the
Committee's actions. The Committee already had
decided to make public, with a five-year lag, lightly
edited versions of all the transcripts currently in the
possession of the FOMC Secretariat. These transcripts as edited will include all the deliberative
materials except for highly sensitive information
that can continue to be withheld under the provisions of the Freedom of Information Act.
It was agreed that the next meeting of the Committee would be held on Thursday-Friday, February 3-4, 1994.
The meeting adjourned at 1:30 p.m.
Donald L. Kohn
Secretary
325
Legal Developments
FINAL RULE—AMENDMENT
TO REGULATION
E
The Board of Governors is amending 12 C.F.R. Part
205, its Regulation E (Electronic Fund Transfers), to
cover electronic benefit transfer (EBT) programs established by federal, state, or local government agencies. EBT programs involve the issuance of access
cards and personal identification numbers to recipients
of government benefits so that they can obtain their
benefits through automated teller machines and pointof-sale terminals. The final rule applies Regulation E to
EBT programs but sets forth certain limited modifications under authority granted to the Board by section
904(c) of the act. In particular, periodic account statements are not required if account balance information
and written account histories are made available to
benefit recipients by other specified means. This rulemaking directly affects government agencies that administer EBT programs and indirectly affects depository institutions and other private-sector entities.
Effective February 28, 1994, 12 C.F.R. Part 205 is
amended as follows:
Part 205—Electronic Fund Transfers
(Regulation E)
1. The authority citation for Part 205 is revised to read
as follows:
Authority: 15 U.S.C. 1693.
2. Section 205.15 is added to read as follows:
Section 205.15—Electronic fund transfer of
government benefits.
(a) Government agency subject to regulation. (1) A
government agency is deemed to be a financial
institution for purposes of the act and regulation if
directly or indirectly it issues an access device to a
consumer for use in initiating an electronic fund
transfer of government benefits from an account.
The agency shall comply with all applicable requirements of the act and regulation, except as provided
in this section.
(2) For purposes of this section, the term account
means an account established by a government
agency for distributing government benefits to
a consumer electronically, such as through
automated teller machines or point-of-sale
terminals.
(b) Issuance of access devices. For purposes of this
section, a consumer is deemed to request an access
device when the consumer applies for government
benefits that the agency disburses or will disburse by
means of an electronic fund transfer. The agency shall
verify the identity of the consumer receiving the
device by reasonable means before the device is
activated.
(c) Alternative to periodic statement. A government
agency need not furnish the periodic statement required by section 205.9(b) if the agency makes available to the consumer:
(1) The consumer's account balance, through a
readily available telephone line and at a terminal
(which may include providing balance information
at a balance-inquiry terminal or providing it, routinely or upon request, on a terminal receipt at the
time of an electronic fund transfer); and
(2) A written history of the consumer's account
transactions for at least 60 days preceding the date
of a request by the consumer. The account history
shall be provided promptly in response to an oral or
written request.
(d) Modified requirements. A government agency that
does not furnish periodic statements, pursuant to
paragraph (c) of this section, shall comply with the
following requirements:
(1) Initial disclosures. The agency shall modify the
disclosures under section 205.7(a) by providing:
(i) Account balance information. The means by
which the consumer may obtain information concerning the account balance, including a telephone number. This disclosure may be made by
providing a notice substantially similar to the
notice contained in section A(12) of appendix A of
this part.
(ii) Written account history. A summary of the
consumer's right to receive a written account
history upon request, in substitution for the periodic statement disclosure required by section
205.7(a)(6), and a telephone number that can be
used to request an account history. This disclosure may be made by providing a notice substan-
326
Federal Reserve Bulletin • April 1994
tially similar to the notice contained in section
A(12) of appendix A of this part,
(iii) Error resolution notice. A notice concerning
error resolution that is substantially similar to the
notice contained in section A(13) of appendix A of
this part, in substitution for the notice required by
section 205.7(a)(10).
(2) Annual error resolution notice. The agency shall
provide an annual notice concerning error resolution
that is substantially similar to the notice contained in
section A(13) of appendix A of this part, in substitution for the notice required by section 205.8(b).
(3) Limitations on liability. For purposes of section
205.6(b)(2) and (3), in regard to a consumer's reporting within 60 days any unauthorized transfer that
appears on a periodic statement, the 60-day period
shall begin with the transmittal of a written account
history or other account information provided to the
consumer under paragraph (c) of this section.
(4) Error resolution. The agency shall comply with
the requirements of section 205.11 in response to an
oral or written notice of an error from the consumer
that is received no later than 60 days after the
consumer obtains the written account history or
other account information, under paragraph (c) of
this section, in which the error is first reflected.
3. Appendix A to part 205 is revised by adding sections
A(12) and A(13) to read as follows:
Appendix A to Part 205—Model Disclosure
Clauses
Section A(12)—Disclosure by Government
Agencies of Information About Obtaining
Account Balances and Account Histories
(Section 205.15(d)(l)(i) and (ii))
You may obtain information about the amount of
benefits you have remaining by calling [telephone
number]. That information is also available [on the
receipt you get when you make a transfer with your
card at (an ATM) (a POS terminal)] [when you make a
balance inquiry at an ATM] [when you make a balance
inquiry at specified locations].
You also have the right to receive a written summary of transactions for the 60 days preceding your
request by calling [telephone number]. [Optional: Or
you may request the summary by contacting your
caseworker.]
Section A(13)—Disclosure of Error Resolution
Procedures for Government Agencies That Do
Not Provide Periodic Statements
(Section 205.15(d)(l)(iii) and (d)(2))
In Case of Errors or Questions About Your
Electronic Transfers
Telephone us at [telephone number]
or
Write us at [address]
as soon as you can, if you think an error has occurred
in your [EBT] [agency's name for program] account.
We must hear from you no later than 60 days after you
learn of the error. You will need to tell us:
• Your name and [case] [file] number.
• Why you believe there is an error, and the dollar
amount involved.
• Approximately when the error took place.
If you tell us orally, we may require that you send us
your complaint or question in writing within 10 business days. We will generally complete our investigation within 10 business days and correct any error
promptly. In some cases, an investigation may take
longer, but you will have the use of the funds in
question after the 10 business days. If we ask you to
put your complaint or question in writing and we do
not receive it within 10 business days, we may not
credit your account during the investigation.
For errors involving transactions at point-of-sale
terminals in food stores, the periods referred to above
are 20 business days instead of 10 business days.
If we decide that there was no error, we will send you
a written explanation within three business days after
we finish our investigation. You may ask for copies of
the documents that we used in our investigation.
If you need more information about our error resolution procedures, call us at [telephone number] [the
telephone number shown above].
FINAL RULE—AMENDMENT
TO REGULATION
O
The Board of Governors is amending 12 C.F.R. Part
215, its Regulation O (Loans to Executive Officers,
Directors, and Principal Shareholders of Member
Banks; Loans to Holding Companies and Affiliates) to
permit the aggregate limit on lending to insiders by
eligible, adequately capitalized small banks to be increased from 100 percent of unimpaired capital and
surplus to 200. The Board also is revising Regulation O
to permit banks to follow alternative recordkeeping
Legal Developments
procedures on loans to insiders of affiliates, to narrow
the definition of "extension of credit," and to adopt
certain exceptions to the general restrictions on lending to insiders and the special restrictions on lending to
executive officers. Other minor revisions clarifying
certain exemptions and conforming certain provisions
to the enabling statutes are included as well.
Effective February 18, 1994, 12 C.F.R. Part 215 is
amended as follows:
Part 215—Loans to Executive Officers,
Directors, and Principal Shareholders of
Member Banks (Regulation O)
1. The authority citation for part 215 is revised to read
as follows:
Authority: 12 U.S.C. 248(i), 375a(10), 375b(9) and (10),
1817(k) and 1972(2)(G)(ii); Pub. L. 102-242, 105 Stat.
2236.
Subpart A—Loans by Member Banks to Their
Executive Officers, Directors, and Principal
Shareholders
2. 12 C.F.R. Part 215, Subpart A, is amended by
revising sections 215.1 through 215.13, to read as
follows:
Section 215.1—Authority, purpose, and scope.
(a) Authority. This subpart is issued pursuant to sections ll(i), 22(g), and 22(h) of the Federal Reserve Act
(12 U.S.C. 248(i), 375a, and 375b), 12 U.S.C. 1817(k),
and section 306 of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (Pub. L. 102—
242, 105 Stat. 2236 (1991)).
(b) Purpose and scope. This subpart A governs any
extension of credit by a member bank to an executive
officer, director, or principal shareholder of: The member bank; a bank holding company of which the
member bank is a subsidiary; and any other subsidiary
of that bank holding company. It also applies to any
extension of credit by a member bank to: a company
controlled by such a person; and a political or campaign committee that benefits or is controlled by such
a person. This subpart A also implements the reporting
requirements of 12 U.S.C. 375a concerning extensions
of credit by a member bank to its executive officers
and of 12 U.S.C. 1817(k) concerning extensions of
credit by a member bank to its executive officers or
principal shareholders, or the related interests of such
persons.
327
Section 215.2—Definitions.
For the purposes of this Subpart A, the following
definitions apply unless otherwise specified:
(a) Affiliate means any company of which a member
bank is a subsidiary or any other subsidiary of that
company.
(b) Company means any corporation, partnership,
trust (business or otherwise), association, joint venture, pool syndicate, sole proprietorship, unincorporated organization, or any other form of business
entity not specifically listed herein. However, the term
does not include:
(1) An insured depository institution (as defined in
12 U.S.C. 1813); or
(2) A corporation the majority of the shares of which
are owned by the United States or by any State.
(c) (1) Control of a company or bank means that a
person directly or indirectly, or acting through or in
concert with one or more persons:
(i) Owns, controls, or has the power to vote 25
percent or more of any class of voting securities of
the company or bank;
(ii) Controls in any manner the election of a
majority of the directors of the company or bank;
or
(iii) Has the power to exercise a controlling influence over the management or policies of the
company or bank.
(2) A person is presumed to have control, including
the power to exercise a controlling influence over
the management or policies, of a company or bank
if:
(i) The person is:
(A) An executive officer or director of the
company or bank; and
(B) Directly or indirectly owns, controls, or has
the power to vote more than 10 percent of any
class of voting securities of the company or
bank; or
(ii) (A) The person directly or indirectly owns,
controls, or has the power to vote more than 10
percent of any class of voting securities of the
company or bank; and
(B) No other person owns, controls, or has the
power to vote a greater percentage of that class
of voting securities.
(3) An individual is not considered to have control,
including the power to exercise a controlling influence over the management or policies, of a company
or bank solely by virtue of the individual's position
as an officer or director of the company or bank.
(4) A person may rebut a presumption established
by paragraph (b)(2) of this section by submitting to
the appropriate Federal banking agency (as defined
328
Federal Reserve Bulletin • April 1994
in 12 U.S.C. 1813(q)) written materials that, in the
agency's judgment, demonstrate an absence of control.
(d) Director of a member bank means any director of a
member bank, whether or not receiving compensation.
An advisory director is not considered a director if the
advisory director:
(1) Is not elected by the shareholders of the company or bank;
(2) Is not authorized to vote on matters before the
board of directors; and
(3) Provides solely general policy advice to the
board of directors.
(e) (1) Executive officer of a company or bank means a
person who participates or has authority to participate (other than in the capacity of a director) in
major policymaking functions of the company or
bank, whether or not: the officer has an official title;
the title designates the officer an assistant; or the
officer is serving without salary or other compensation.1 The chairman of the board, the president,
every vice president, the cashier, the secretary, and
the treasurer of a company or bank are considered
executive officers, unless the officer is excluded, by
resolution of the board of directors or by the bylaws
of the bank or company, from participation (other
than in the capacity of a director) in major policymaking functions of the bank or company, and the
officer does not actually participate therein.
(2) Extensions of credit to an executive officer of an
affiliate of a member bank (other than a company
that controls the bank) shall not be subject to
sections 215.4, 215.6, and 215.8 of this part, provided that:
(i) The executive officer of the affiliate is excluded
(by name or by title) from participation in major
policymaking functions of the member bank by
resolutions of the boards of directors of both the
affiliate and the member bank, and does not
actually participate in such major policymaking
functions; and
(ii) The executive officer is not otherwise subject
to such requirements as a director or principal
shareholder.
(f) Foreign bank has the meaning given in 12 U.S.C.
3101(7).
1. The term is not intended to include persons who may have official
titles and may exercise a certain measure of discretion in the performance of their duties, including discretion in the making of loans, but
who do not participate in the determination of major policies of the
bank or company and whose decisions are limited by policy standards
fixed by the senior management of the bank or company. For
example, the term does not include a manager or assistant manager of
a branch of a bank unless that individual participates, or is authorized
to participate, in major policymaking functions of the bank or company.
(g) Immediate family means the spouse of an individual, the individual's minor children, and any of the
individual's children (including adults) residing in the
individual's home.
(h) Insider means an executive officer, director, or
principal shareholder, and includes any related interest of such a person.
(i) Lending limit. The lending limit for a member bank
is an amount equal to the limit of loans to a single
borrower established by section 5200 of the Revised
Statutes,2 12 U.S.C. 84. This amount is 15 percent of
the bank's unimpaired capital and unimpaired surplus
in the case of loans that are not fully secured, and an
additional 10 percent of the bank's unimpaired capital
and unimpaired surplus in the case of loans that are
fully secured by readily marketable collateral having a
market value, as determined by reliable and continuously available price quotations, at least equal to the
amount of the loan. The lending limit also includes any
higher amounts that are permitted by section 5200 of
the Revised Statutes for the types of obligations listed
therein as exceptions to the limit. A member bank's
unimpaired capital and unimpaired surplus equals the
sum of:
(1) The "total equity capital" of the member bank
reported on its most recent consolidated report of
condition filed under 12 U.S.C. 1817(a)(3);
(2) Any subordinated notes and debentures that
comply with requirements of the appropriate Federal banking agency for addition to the member
bank's capital structure and are reported on its most
recent consolidated report of condition filed under
12 U.S.C. 1817(a)(3); and
(3) Any valuation reserves created by charges to the
member bank's income reported on its most recent
consolidated report of condition filed under
12 U.S.C. 1817(a)(3).
(j) Member bank means any banking institution that is
a member of the Federal Reserve System, including
any subsidiary of a member bank. The term does not
include any foreign bank that maintains a branch in the
United States, whether or not the branch is insured
(within the meaning of 12 U.S.C. 1813(s)) and regardless of the operation of 12 U.S.C. 1813(h) and
12 U.S.C. 1828(j)(3)(B).
(k) Pay an overdraft on an account means to pay an
amount upon the order of an account holder in excess
of funds on deposit in the account.
(1) Person means an individual or a company.
2. Where State law establishes a lending limit for a State member
bank that is lower than the amount permitted in section 5200 of the
Revised Statutes, the lending limit established by applicable State
laws shall be the lending limit for the State member bank.
Legal Developments
(m) (1) Principal shareholder means a person (other
than an insured bank) that directly or indirectly, or
acting through or in concert with one or more
persons, owns, controls, or has the power to vote
more than 10 percent of any class of voting securities of a member bank or company. Shares owned or
controlled by a member of an individual's immediate
family are considered to be held by the individual.
(2) A principal shareholder of a member bank does
not include a company of which a member bank is a
subsidiary,
(n) Related interest of a person means:
(1) A company that is controlled by that person; or
(2) A political or campaign committee that is controlled by that person or the funds or services of
which will benefit that person.
(o) Subsidiary has the meaning given in 12 U.S.C.
1841(d), but does not include a subsidiary of a member
bank.
Section 215.3—Extension of credit.
(a) An extension of credit is a making or renewal of
any loan, a granting of a line of credit, or an extending
of credit in any manner whatsoever, and includes:
(1) A purchase under repurchase agreement of securities, other assets, or obligations;
(2) An advance by means of an overdraft, cash item,
or otherwise;
(3) Issuance of a standby letter of credit (or other
similar arrangement regardless of name or description) or an ineligible acceptance, as those terms are
defined in section 208.8(d) of this chapter;
(4) An acquisition by discount, purchase, exchange,
or otherwise of any note, draft, bill of exchange, or
other evidence of indebtedness upon which an insider may be liable as maker, drawer, endorser,
guarantor, or surety;
(5) An increase of an existing indebtedness, but not
if the additional funds are advanced by the bank for
its own protection for:
(i) Accrued interest; or
(ii) Taxes, insurance, or other expenses incidental
to the existing indebtedness;
(6) An advance of unearned salary or other unearned
compensation for a period in excess of 30 days; and
(7) Any other similar transaction as a result of which
a person becomes obligated to pay money (or its
equivalent) to a bank, whether the obligation arises
directly or indirectly, or because of an endorsement
on an obligation or otherwise, or by any means
whatsoever.
(b) An extension of credit does not include:
(1) An advance against accrued salary or other
accrued compensation, or an advance for the pay-
329
ment of authorized travel or other expenses incurred
or to be incurred on behalf of the bank;
(2) A receipt by a bank of a check deposited in or
delivered to the bank in the usual course of business
unless it results in the carrying of a cash item for or
the granting of an overdraft (other than an inadvertent overdraft in a limited amount that is promptly
repaid, as described in section 215(4)(e) of this part);
(3) An acquisition of a note, draft, bill of exchange,
or other evidence of indebtedness through:
(i) A merger or consolidation of banks or a similar
transaction by which a bank acquires assets and
assumes liabilities of another bank or similar
organization; or
(ii) Foreclosure on collateral or similar proceeding
for the protection of the bank, provided that such
indebtedness is not held for a period of more than
three years from the date of the acquisition,
subject to extension by the appropriate Federal
banking agency for good cause;
(4) (i) An endorsement or guarantee for the protection of a bank of any loan or other asset previously acquired by the bank in good faith; or
(ii) Any indebtedness to a bank for the purpose of
protecting the bank against loss or of giving
financial assistance to it;
(5) Indebtedness of $15,000 or less arising by reason
of any general arrangement by which a bank:
(i) Acquires charge or time credit accounts; or
(ii) Makes payments to or on behalf of participants
in a bank credit card plan, check credit plan, or
similar open-end credit plan, provided:
(A) The indebtedness does not involve prior
individual clearance or approval by the bank
other than for the purposes of determining
authority to participate in the arrangement and
compliance with any dollar limit under the
arrangement; and
(B) The indebtedness is incurred under terms
that are not more favorable than those offered
to the general public;
(6) Indebtedness of $5,000 or less arising by reason
of an interest-bearing overdraft credit plan of the
type specified in section 215.4(e) of this part; or
(7) A discount of promissory notes, bills of exchange, conditional sales contracts, or similar paper, without recourse.
(c) Non-interest-bearing deposits to the credit of a
bank are not considered loans, advances, or extensions of credit to the bank of deposit; nor is the giving
of immediate credit to a bank upon uncollected items
received in the ordinary course of business considered
to be a loan, advance or extension of credit to the
depositing bank.
(d) For purposes of section 215.4 of this part, an
330
Federal Reserve Bulletin • April 1994
extension of credit by a member bank is considered to
have been made at the time the bank enters into a
binding commitment to make the extension of credit.
(e) A participation without recourse is considered to
be an extension of credit by the participating bank, not
by the originating bank.
(f) Tangible economic benefit rule—(1) In general. An
extension of credit is considered made to an insider
to the extent that the proceeds are transferred to the
insider or are used for the tangible economic benefit
of the insider.
(2) Exception. An extension of credit is not considered made to an insider under paragraph (f)(1) of this
section if:
(i) The credit is extended on terms that would
satisfy the standard set forth in section 215.4(a) of
this part for extensions of credit to insiders; and
(ii) The proceeds of the extension of credit are
used in a bona fide transaction to acquire property, goods, or services from the insider.
Section 215.4—General prohibitions.
(a) Terms and Creditworthiness. No member bank
may extend credit to any insider of the bank or insider
of its affiliates unless the extension of credit:
(1) Is made on substantially the same terms (including interest rates and collateral) as, and following
credit underwriting procedures that are not less
stringent than, those prevailing at the time for comparable transactions by the bank with other persons
that are not covered by this part and who are not
employed by the bank; and
(2) Does not involve more than the normal risk of
repayment or present other unfavorable features.
(b) Prior approval. (1) No member bank may extend
credit (which term includes granting a line of credit)
to any insider of the bank or insider of its affiliates in
an amount that, when aggregated with the amount of
all other extensions of credit to that person and to all
related interests of that person, exceeds the higher
of $25,000 or 5 percent of the member bank's
unimpaired capital and unimpaired surplus, unless:
(i) The extension of credit has been approved in
advance by a majority of the entire board of
directors of that bank; and
(ii) The interested party has abstained from participating directly or indirectly in the voting.
(2) In no event may a member bank extend credit
to any insider of the bank or insider of its affiliates
in an amount that, when aggregated with all other
extensions of credit to that person, and all related
interests of that person, exceeds $500,000, except
by complying with the requirements of this paragraph (b).
(3) Approval by the board of directors under paragraphs (b)(1) and (b)(2) of this section is not required
for an extension of credit that is made pursuant to a
line of credit that was approved under paragraph
(b)(1) of this section within 14 months of the date of
the extension of credit. The extension of credit must
also be in compliance with the requirements of
section 215.4(a) of this part.
(4) Participation in the discussion, or any attempt to
influence the voting, by the board of directors
regarding an extension of credit constitutes indirect
participation in the voting by the board of directors
on an extension of credit.
(c) Individual lending limit. No member bank may
extend credit to any insider of the bank or insider of its
affiliates in an amount that, when aggregated with the
amount of all other extensions of credit by the member
bank to that person and to all related interests of that
person, exceeds the lending limit of the member bank
specified in section 215.2(i) of this part. This prohibition does not apply to an extension of credit by a
member bank to a company of which the member bank
is a subsidiary or to any other subsidiary of that
company.
(d) Aggregate lending limit—(1) General limit. A
member bank may not extend credit to any insider
of the bank or insider of its affiliates unless the
extension of credit is in an amount that, when
aggregated with the amount of all outstanding extensions of credit by that bank to all such insiders, does
not exceed the bank's unimpaired capital and unimpaired surplus (as defined in section 215.2(i) of this
part).
(2) Member banks with deposits of less than
$100,000,000.
(i) A member bank with deposits of less than
$100,000,000 may by an annual resolution of its
board of directors increase the general limit specified in paragraph (d)(1) of this section to a level
not to exceed two times the bank's unimpaired
capital and unimpaired surplus, if:
(A) The board of directors determines that such
higher limit is consistent with prudent, safe, and
sound banking practices in light of the bank's
experience in lending to its insiders and is
necessary to attract or retain directors or to
prevent restricting the availability of credit in
small communities;
(B) The resolution sets forth the facts and
reasoning on which the board of directors bases
the finding, including the amount of the bank's
lending to its insiders as a percentage of the
bank's unimpaired capital and unimpaired surplus as of the date of the resolution;
(C) The bank meets or exceeds, on a fully-
Legal Developments
phased in basis, all applicable capital requirements established by the appropriate Federal
banking agency; and
(D) The bank received a satisfactory composite
rating in its most recent report of examination,
(ii) If a member bank has adopted a resolution
authorizing a higher limit pursuant to paragraph
(d)(2)(i) of this section and subsequently fails to
meet the requirements of paragraphs (d)(2)(i)(C)
or (d)(2)(i)(D) of this section, the member bank
shall not extend any additional credit (including
a renewal of any existing extension of credit) to
any insider of the bank or its affiliates unless
such extension or renewal is consistent with
the general limit in paragraph (d)(1) of this
section.
(3) Exceptions, (i) The general limit specified in
paragraph (d)(1) of this section does not apply to
the following:
(A) Extensions of credit secured by a perfected
security interest in bonds, notes, certificates of
indebtedness, or Treasury bills of the United
States or in other such obligations fully guaranteed as to principal and interest by the United
States;
(B) Extensions of credit to or secured by unconditional takeout commitments or guarantees
of any department, agency, bureau, board,
commission or establishment of the United
States or any corporation wholly owned directly or indirectly by the United States;
(C) Extensions of credit secured by a perfected
security interest in a segregated deposit account
in the lending bank; or
(D) Extensions of credit arising from the discount of negotiable or nonnegotiable installment consumer paper that is acquired from an
insider and carries a full or partial recourse
endorsement or guarantee by the insider, provided that:
(/) The financial condition of each maker of
such consumer paper is reasonably documented in the bank's files or known to its
officers;
(2) An officer of the bank designated for that
purpose by the board of directors of the bank
certifies in writing that the bank is relying
primarily upon the responsibility of each
maker for payment of the obligation and not
upon any endorsement or guarantee by the
insider; and
(5) The maker of the instrument is not an
insider.
(ii) The exceptions in paragraphs (d)(3)(i)(A)
through (d)(3)(i)(C) of this section apply only to
331
the amounts of such extensions of credit that are
secured in the manner described therein,
(e) Overdrafts. (1) No member bank may pay an
overdraft of an executive officer or director of the
bank3 on an account at the bank, unless the payment
of funds is made in accordance with:
(i) A written, preauthorized, interest-bearing extension of credit plan that specifies a method of
repayment; or
(ii) A written, preauthorized transfer of funds
from another account of the account holder at the
bank.
(2) The prohibition in paragraph (e)(1) of this section
does not apply to payment of inadvertent overdrafts
on an account in an aggregate amount of $1,000 or
less, provided:
(i) The account is not overdrawn for more than 5
business days; and
(ii) The member bank charges the executive officer or director the same fee charged any other
customer of the bank in similar circumstances.
Section 215.5—Additional restrictions on loans
to executive officers of member banks.
The following restrictions on extensions of credit by a
member bank to any of its executive officers apply in
addition to any restrictions on extensions of credit by
a member bank to insiders of itself or its affiliates set
forth elsewhere in this part. The restrictions of this
section apply only to executive officers of the member
bank and not to executive officers of its affiliates.
(a) No member bank may extend credit to any of its
executive officers, and no executive officer of a member bank shall borrow from or otherwise become
indebted to the bank, except in the amounts, for the
purposes, and upon the conditions specified in paragraphs (c) and (d) of this section.
(b) No member bank may extend credit in an aggregate
amount greater than the amount permitted in paragraph (c)(3) of this section to a partnership in which
one or more of the bank's executive officers are
partners and, either individually or together, hold a
majority interest. For the purposes of paragraph (c)(3)
of this section, the total amount of credit extended by
a member bank to such partnership is considered to be
extended to each executive officer of the member bank
who is a member of the partnership.
3. This prohibition does not apply to the payment by a member bank
of an overdraft of a principal shareholder of the member bank, unless
the principal shareholder is also an executive officer or director. This
prohibition also does not apply to the payment by a member bank of
an overdraft of a related interest of an executive officer, director, or
principal shareholder of the member bank.
332
Federal Reserve Bulletin • April 1994
(c) A member bank is authorized to extend credit to
any executive officer of the bank:
(1) In any amount to finance the education of the
executive officer's children;
(2) With the specific prior approval of the board of
directors, in any amount to finance or refinance the
purchase, construction, maintenance, or improvement of a residence of the executive officer, provided:
(i) The extension of credit is secured by a first lien
on the residence and the residence is owned (or
expected to be owned after the extension of
credit) by the executive officer; and
(ii) In the case of a refinancing, that only the
amount thereof used to repay the original extension of credit, together with the closing costs of
the refinancing, and any additional amount
thereof used for any of the purposes enumerated
in this paragraph (c)(2), are included within this
category of credit ;
(3) In any amount, if the extension of credit is
secured in a manner described in section
215.4(d)(3)(i)(A) through (d)(3)(i)(C) of this part; and
(4) For any other purpose not specified in paragraphs (c)(1) through (c)(3) of this section, if the
aggregate amount of extensions of credit to that
executive officer under this paragraph does not
exceed at any one time the higher of 2.5 percent of
the bank's capital and unimpaired surplus or
$25,000, but in no event more than $100,000.
(d) Any extension of credit by a member bank to any
of its executive officers shall be:
(1) Promptly reported to the member bank's board
of directors;
(2) In compliance with the requirements of section
215.4(a) of this part;
(3) Preceded by the submission of a detailed current
financial statement of the executive officer; and
(4) Made subject to the condition in writing that the
extension of credit will, at the option of the member
bank, become due and payable at any time that the
officer is indebted to any other bank or banks in an
aggregate amount greater than the amount specified
for a category of credit in paragraph (c) of this
section.
Section 215.6—Prohibition on knowingly
receiving unauthorized extension of credit.
No executive officer, director, or principal shareholder
of a member bank or any of its affiliates shall knowingly receive (or knowingly permit any of that person's
related interests to receive) from a member bank,
directly or indirectly, any extension of credit not
authorized under this part.
Section 215.7—Extensions of credit outstanding
on March 10, 1979.
(a) Any extension of credit that was outstanding on
March 10, 1979, and that would, if made on or after
March 10, 1979, violate section 215.4(c) of this part,
shall be reduced in amount by March 10, 1980, to be in
compliance with the lending limit in section 215.4(c) of
this part. Any renewal or extension of such an extension of credit on or after March 10, 1979, shall be made
only on terms that will bring the extension of credit
into compliance with the lending limit of section
215.4(c) of this part by March 10, 1980. However, any
extension of credit made before March 10, 1979, that
bears a specific maturity date of March 10, 1980, or
later, shall be repaid in accordance with its repayment
schedule in existence on or before March 10, 1979.
(b) If a member bank is unable to bring all extensions
of credit outstanding on March 10, 1979, into compliance as required by paragraph (a) of this section, the
member bank shall promptly report that fact to the
Comptroller of the Currency, in the case of a national
bank, or to the appropriate Federal Reserve Bank, in
the case of a State member bank, and explain the
reasons why all the extensions of credit cannot be
brought into compliance. The Comptroller or the Reserve Bank, as the case may be, is authorized, on the
basis of good cause shown, to extend the March 10,
1980, date for compliance for any extension of credit
for not more than two additional one-year periods.
Section 215.8—Records of member banks.
(a) In general. Each member bank shall maintain
records necessary for compliance with the requirements of this part.
(b) Recordkeeping for insiders of the member bank.
Any recordkeeping method adopted by a member
bank shall:
(1) Identify, through an annual survey, all insiders of
the bank itself; and
(2) Maintain records of all extensions of credit to
insiders of the bank itself, including the amount and
terms of each such extension of credit.
(c) Recordkeeping for insiders of the member bank's
affiliates. Any recordkeeping method adopted by a
member bank shall maintain records of extensions of
credit to insiders of the member bank's affiliates by:
(1) Survey method, (i) Identifying, through an annual
survey, each insider of the member bank's affiliates; and
(ii) Maintaining records of the amount and terms
of each extension of credit by the member bank to
such insiders; or
(2) Borrower inquiry method, (i) Requiring as part of
Legal Developments
each extension of credit that the borrower indicate whether the borrower is an insider of an
affiliate of the member bank; and
(ii) Maintaining records that identify the amount
and terms of each extension of credit by the
member bank to borrowers so identifying themselves.
(3) Alternative recordkeeping methods for insiders
of affiliates. A member bank may employ a recordkeeping method other than those identified in paragraphs (c)(1) and (c)(2) of this section if the appropriate Federal banking agency determines that the
bank's method is at least as effective as the identified methods.
(d) Special rule for non-commercial lenders. A member bank that is prohibited by law or by an express
resolution of the board of directors of the bank from
making an extension of credit to any company or other
entity that is covered by this part as a company is not
required to maintain any records of the related interests of the insiders of the bank or its affiliates or to
inquire of borrowers whether they are related interests
of the insiders of the bank or its affiliates.
Section 215.9—Reports by executive officers.
Each executive officer of a member bank who becomes indebted to any other bank or banks in an
aggregate amount greater than the amount specified
for a category of credit in section 215.5(c) of this part,
shall, within 10 days of the date the indebtedness
reaches such a level, make a written report to the
board of directors of the officer's bank. The report
shall state the lender's name, the date and amount of
each extension of credit, any security for it, and the
purposes for which the proceeds have been or are to
be used.
Section 215.10—Reports on credit to executive
officers.
Each member bank shall include with (but not as part
of) each report of condition (and copy thereof) filed
pursuant to 12 U.S.C. 1817(a)(3) a report of all extensions of credit made by the member bank to its
executive officers since the date of the bank's previous
report of condition.
333
(1) Principal shareholder of a member bank means
any person4 other than an insured bank, or a foreign
bank as defined in 12 U.S.C. 3101(7), that, directly
or indirectly, owns, controls, or has power to vote
more than 10 percent of any class of voting securities of the member bank. The term includes a person
that controls a principal shareholder {e.g., a person
that controls a bank holding company). Shares of a
bank (including a foreign bank), bank holding company, or other company owned or controlled by a
member of an individual's immediate family are
presumed to be owned or controlled by the individual for the purposes of determining principal shareholder status.
(2) Related interest means:
(i) Any company controlled by a person; or
(ii) Any political or campaign committee the funds
or services of which will benefit a person or that is
controlled by a person. For the purpose of this
section and Subpart B of this part, a related
interest does not include a bank or a foreign bank
(as defined in 12 U.S.C. 3101(7)).
(b) Public disclosure. (1) Upon receipt of a written
request from the public, a member bank shall make
available the names of each of its executive officers
and each of its principal shareholders to whom, or to
whose related interests, the member bank had outstanding as of the end of the latest previous quarter
of the year, an extension of credit that, when
aggregated with all other outstanding extensions of
credit at such time from the member bank to such
person and to all related interests of such person,
equaled or exceeded 5 percent of the member bank's
capital and unimpaired surplus of $500,000, whichever amount is less. No disclosure under this paragraph is required if the aggregate amount of all
extensions of credit outstanding at such time from
the member bank to the executive officer or principal shareholder of the member bank and to all
related interests of such a person does not exceed
$25,000.
(2) A member bank is not required to disclose the
specific amounts of individual extensions of credit.
(c) Maintaining records. Each member bank shall
maintain records of all requests for the information
described in paragraph (b) of this section and the
disposition of such requests. These records may be
disposed of after two years from the date of the
request.
Section 215.11—Disclosure of credit from
member banks to executive officers and
principal shareholders.
(a) Definitions. For the purposes of this section, the
following definitions apply:
4. The term "stockholder of record" appearing in 12 U.S.C.
1972(2)(G) is synonymous with the term "person."
334
Federal Reserve Bulletin • April 1994
Section 215.12—Reporting requirement for
credit secured by certain bank stock.
Each executive officer or director of a member bank
the shares of which are not publicly traded shall report
annually to the board of directors of the member bank
the outstanding amount of any credit that was extended to the executive officer or director and that is
secured by shares of the member bank.
Section 215.13—Civil penalties.
Any member bank, or any officer, director, employee,
agent, or other person participating in the conduct of
the affairs of the bank, that violates any provision of
this part (other than section 215.11 of this part) is
subject to civil penalties as specified in section 29 of
the Federal Reserve Act (12 U.S.C. 504).
Subpart
B—{AmendedJ
3. Section 215.21 is amended by removing "1841(c)"
where it appears in paragraph (a) and adding in its
place "1971 and 1972" and by removing footnote 9 and
redesignating footnotes 10 and 11 as footnotes 9
and 10.
4. Section 215.22 is amended by removing "12 C.F.R.
226.2(p)" where it appears in paragraph (c)(l)(ii) and
adding in its place "12 C.F.R. 226.2(a)(12)".
ORDERS ISSUED UNDER BANK
COMPANY ACT
Orders Issued Under Section
Holding Company
Act
HOLDING
3 of the Bank
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.
Community First, with total consolidated assets of
approximately $1.2 billion, operates 21 banks in South
Dakota, North Dakota, Minnesota, and Colorado.1
Community First is the seventh largest commercial
banking organization in Minnesota, controlling approximately $449.9 million in deposits, representing
approximately 1 percent of total deposits in commercial banks in the state. Ada BHC is the 343d largest
commercial banking organization in Minnesota, controlling deposits of approximately $14.9 million, representing less than 1 percent of total deposits in
commercial banks in the state. Upon consummation of
the proposed transactions, Community First would
remain the seventh largest commercial banking organization in Minnesota, controlling approximately
$464.8 million in deposits, representing approximately
1 percent of total deposits in commercial banks in the
state.
Section 3(d) of the BHC Act ("Douglas Amendment"), prohibits the Board from approving an application by a bank holding company to acquire control
of a bank located outside of the home state of the bank
holding company2 "unless the acquisition of . . . a
State bank by an out-of-State bank holding company is
specifically authorized by the statute laws of the State
in which such bank is located, by language to that
effect and not merely by implication."3 For purposes
of the Douglas Amendment, the home state of Community First is South Dakota.
In considering this proposal, the Board has analyzed
the interstate banking statutes of Minnesota, and has
concluded that Community First is authorized under
the laws of Minnesota to acquire Ada BHC and Ada
Bank.4 Accordingly, the Board's approval of this
Community First Bankshares, Inc.
Fargo, North Dakota
Order Approving Acquisition of a Bank Holding
Company
Community First Bankshares, Inc., Fargo, North Dakota ("Community First"), a bank holding company
within the meaning of the Bank Holding Company Act
("BHC Act"), has applied under section 3(a)(5) of the
BHC Act (12 U.S.C. § 1842(a)(5)) to acquire all of the
voting shares of Ada BancShares, Inc. ("Ada BHC"),
and thereby indirectly acquire The Ada National Bank
("Ada Bank"), both of Ada, Minnesota.
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 68,911 (1993)). The
1. All asset, deposit, and market data are as of September 30, 1993.
2. The home state of a bank holding company is the 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. The
operations of a bank holding company are considered principally
conducted in the state in which the total deposits of its banking
subsidiaries were largest on the date in question. The operations of
Community First were principally conducted in South Dakota on
September 30, 1987, the date on which it became a bank holding
company.
3. 12 U.S.C. § 1842(d).
4. See Minn. Stat. Ann. § 48.93; S.D. Codified Laws Ann.
§ 51A-2-38. Minnesota's interstate banking statute permits an out-ofstate bank holding company located in one of a few states, including
South Dakota, to acquire a bank in Minnesota, provided that the
applicant's home state authorizes the acquisition of banks in that state
by a Minnesota bank holding company under conditions substantially
similar to the conditions imposed by the law of Minnesota, as
determined by the Minnesota Commissioner of Commerce. The
Legal Developments
proposal is not prohibited by the Douglas Amendment.
The Minnesota Commissioner of Commerce has preliminarily indicated that this proposal is permissible
under Minnesota law. Approval of the proposed transaction is conditioned upon Community First receiving
the necessary approval from the Minnesota Commissioner of Commerce.
Community First competes directly with Ada Bank
in the Fargo-Moorhead banking market.5 Upon consummation of this proposal, the market would remain
moderately concentrated as measured by the
Herfindahl-Hirschman Index ("HHI"), 6 and 29 commercial banks and thrift institutions ("depository institutions") would remain as competitors in the market.7 Based on these and all other facts of record, the
Board concludes that consummation of First Community's proposal would not result in any significantly
adverse effect on competition in the Fargo-Moorhead
banking market or any other relevant banking markets.
Considerations relating to the financial and managerial resources and future prospects of Community
First, Ada BHC, and Ada Bank, the convenience and
needs of the communities to be served, and other
supervisory factors the Board is required to consider
under section 3 of the BHC Act, also are consistent
with approval of this application.
335
Based on the foregoing and other facts of record, the
Board has determined that this application should be,
and hereby is, approved. The Board's approval of this
application is specifically conditioned upon compliance with all of the commitments made in connection
with this application. For purposes of this action,
these commitments will be considered conditions imposed in writing by the Board in connection with the
Board's findings and decision and, as such, may be
enforced in proceedings under applicable laws. The
transaction approved in this order shall not be consummated before the thirtieth calendar day following
the effective date of this order, or later than three
months after the effective date of this order, unless
such period is extended for good cause by the Board or
by the Federal Reserve Bank of Minneapolis, acting
pursuant to delegated authority.
By order of the Board of Governors, effective February 22, 1994.
This action was taken pursuant to the Board's Rules
Regarding Delegation of Authority (12 C.F.R. 265.4(b)(1)) by
a committee of Board members. Voting for this action:
Governors LaWare, Lindsey, and Phillips.
JENNIFER J. JOHNSON
Associate Secretary of the Board
Community First Bankshares, Inc.
Fargo, North Dakota
Minnesota Commissioner of Commerce has previously concluded that
the interstate banking statutes of Minnesota and South Dakota are
reciprocal. See Cooperation Agreement between the State of South
Dakota and the State of Minnesota, dated June 2, 1989.
5. The Fargo-Moorhead banking market is composed of Cass and
Ransom Counties and portions of Richland, Steele, and Traill Counties in North Dakota and Norman and Clay Counties in Minnesota.
6. 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 between 1000 and 1800 is considered moderately
concentrated. The Justice Department has informed the Board that a
bank merger or acquisition generally will not 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 effects of
limited-purpose lenders and other non-depository financial institutions. Upon consummation of this proposal, the HHI would increase
by 11 points to 1154.
7. Market data are as of June 30, 1992. Market share data are based
on calculations in which the deposits of thrift institutions are included
at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, significant
competitors of commercial banks. See Midwest Financial Group, 75
Federal Reserve Bulletin 386 (1989); National City Corporation, 70
Federal Reserve Bulletin 743 (1984). 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). Upon consummation of this proposal,
Community First would remain the fifth largest depository institution
in the Fargo-Moorhead banking market, controlling deposits of approximately $137.7 million, representing 7.3 percent of market
deposits.
Order Approving Acquisition of a Bank
Community First Bankshares, Inc., Fargo, North Dakota ("Community First"), a bank holding company
within the meaning of the Bank Holding Company Act
("BHC Act"), has applied under section 3(a)(3) of the
BHC Act (12 U.S.C. § 1842(a)(3)) to acquire approximately 99 percent of the voting shares of Bank of
Spooner, Spooner, Wisconsin ("Spooner Bank").
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 63,165 (1993)). 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.
Community First, with total consolidated assets of
approximately $1.2 billion, operates 21 banks in South
Dakota, North Dakota, Minnesota, and Colorado.1
Spooner Bank is the 75th largest commercial bank in
Wisconsin, controlling deposits of approximately
$73.5 million, representing less than 1 percent of total
1. All asset, deposit, and market data are as of September 30, 1993.
336
Federal Reserve Bulletin • April 1994
deposits in commercial banks in the state. Upon
consummation of the acquisition of Spooner Bank,
Community First would become the 75th largest commercial banking organization in Wisconsin, controlling
approximately $73.5 million in deposits, representing
less than 1 percent of total deposits in commercial
banks in the state.
Section 3(d) of the BHC Act ("Douglas Amendment"), prohibits the Board from approving an application by a bank holding company to acquire control
of a bank "located outside of the state in which the
operations of such bank holding company's banking
subsidiaries were principally conducted on July 1,
1966, or the date on which such company became a
bank holding company, whichever, is later, unless the
acquisition o f . . . a State bank by an out-of-State bank
holding company is specifically authorized by the
statute laws of the State in which such bank is located,
by language to that effect and not merely by implication."2 For purposes of the Douglas Amendment, the
banking operations of Community First were principally conducted, on the relevant date, in South Dakota. Thus, in reviewing whether Community First
may acquire a bank located in a state other than South
Dakota, the Board must consider whether the laws of
the state in which the bank is located specifically
authorize the acquisition.
In this case, Spooner Bank is located in Wisconsin.
Wisconsin's interstate banking statute expressly authorizes the acquisition of a Wisconsin banking organization by an out-of-state bank holding company, if
the state in which the largest amount of the deposits
controlled by the out-of-state bank holding company is
part of a region defined by the Wisconsin law and that
state permits bank acquisitions by Wisconsin bank
holding companies on a reciprocal basis.3 For purposes of Wisconsin law, Community First is deemed
to be located in Minnesota because, as of the date of
the last quarterly report of condition of its subsidiary
banks, the largest amount of the deposits controlled by
Community First were at its Minnesota banks. Minnesota is within Wisconsin's defined interstate banking
region, and the interstate banking laws of Minnesota
authorize bank acquisitions by Wisconsin bank holding companies on a reciprocal basis.4 The Wisconsin
2. 12 U.S.C. § 1842(d). Under the Douglas Amendment, the
operations of a bank holding company are considered principally
conducted in the state in which the total deposits of its banking
subsidiaries were largest on the date in question. The operations of
Community First were principally conducted in South Dakota on
September 30, 1987, the date on which it became a bank holding
company.
3. See Wis. Stat. Ann. § 221.58.
4. See Wis. Stat. Ann. 221.58(l)(h). See also Minn. Stat. Ann.
§ 48.93. Minnesota's interstate banking statute permits an out-of-state
bank holding company located in one of a few states, including South
Commissioner of Banking has preliminarily indicated
that this proposal is authorized under Wisconsin law.
In light of the foregoing, the Board has determined
that its approval of this proposal is not prohibited by
the Douglas Amendment. Approval of this proposal is
specifically conditioned upon Community First receiving all required state regulatory approvals.
Considerations relating to the financial and managerial resources and future prospects of Community
First and Spooner Bank; the convenience and needs of
the communities to be served; and other supervisory
factors the Board is required to consider under section
3 of the BHC Act also are consistent with approval of
these applications.5
Based on the foregoing and other facts of record, the
Board has determined that these applications should
be, and hereby are, approved. The Board's approval
of this application is specifically conditioned upon
compliance with all of the commitments made in
connection with these applications. For purposes of
this action, these commitments will be considered
conditions imposed in writing by the Board in connection with the Board's findings and decision and, as
such, may be enforced in proceedings under applicable
laws. The transaction approved in this order shall not
be consummated before the thirtieth calendar day
following the effective date of this order, or later than
three months after the effective date of this order,
Dakota, to acquire a bank in Minnesota, provided that the applicant's
home state authorizes the acquisition of banks in that state by a
Minnesota bank holding company under conditions substantially
similar to the conditions imposed by the law of Minnesota, as
determined by the Minnesota Commissioner of Commerce. The
Wisconsin Commissioner of Banking and the Minnesota Commissioner of Commerce have concluded that the statute laws of Minnesota and Wisconsin permit bank holding companies located in these
states to acquire financial institutions on a reciprocal basis. See
Cooperation Agreement between the State of Wisconsin and the State
of Minnesota, dated February 6, 1987. See also Norwest Corporation,
76 Federal Reserve Bulletin 386 (1990); Houston Bancorporation,
Inc., 73 Federal Reserve Bulletin 723 (1987).
5. The Board has carefully reviewed comments from a venture
capital firm in South Dakota ("Protestant") alleging that Community
First's dividend policy has diminished the amount of credit available
at its banks in South Dakota to meet the credit needs of communities
in the state, including a need for loans to start-up business ventures.
Community First disputes this contention by noting that since it
acquired its South Dakota banks in 1987, their average loan-to-deposit
ratio has increased from 32 percent to 61 percent, which is comparable
to the statewide aggregate loan-to-deposit ratio. The Board also notes
that four of Community First's six banks in South Dakota were rated
"outstanding" for community development activities, and the remaining two banks were rated "satisfactory." The South Dakota banks'
record of CRA performance also includes a variety of lending activities designed to assist in meeting the credit needs of their entire
communities, including low- and moderate-income areas in South
Dakota. Community First's banks offer several government-sponsored loan programs, including programs under the Small Business
Act and the Farmers Home Administration. In light of all the facts of
record, including Protestant's comments, Community First's responses, and relevant reports of examination, the Board does not
believe that Protestant's comments warrant denial of this application.
Legal Developments
unless such period is extended for good cause by the
Board or by the Federal Reserve Bank of Minneapolis,
acting pursuant to delegated authority.
By order of the Board of Governors, effective February 22, 1994.
This action was taken pursuant to the Board's Rules
Regarding Delegation of Authority (12 C.F.R. 265.4(b)(1)) by
a committee of Board members. Voting for this action:
Governors LaWare, Lindsey, and Phillips.
JENNIFER J. JOHNSON
Associate Secretary of the Board
First Colonial Bankshares Corporation
Chicago, Illinois
Order Approving the Acquisition of Bank Holding
Companies
First Colonial Bankshares Corporation, Chicago, Illinois ("First Colonial"), 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 all of the voting
shares of:
(1) Hi-Bancorp, Inc. ("Hi-Bancorp"), and thereby
indirectly acquire Hi-Bancorp's subsidiary bank,
the Bank of Highwood, both of Highwood, Illinois;
and
(2) GNP Bancorp, Inc., ("GNP"), and thereby
indirectly acquire GNP's subsidiary bank, New
Century Bank, both of Mundelein, Illinois.
Notice of the applications, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 52,109 (1993)). 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 of the
BHC Act.
First Colonial is the 15th largest commercial banking
organization in Illinois, controlling deposits of
$1.2 billion, representing 1 percent of the total deposits
in commercial banking organizations in the state.1
Hi-Bancorp is the 236th largest commercial banking
organization in Illinois, controlling deposits of
$79.4 million, representing less than 1 percent of the
total deposits in commercial banking organizations in
the state. GNP is the 281st largest commercial banking
organization in Illinois, controlling deposits of
$66.5 million, representing less than 1 percent of the
1. Deposit data are as of June 30, 1992.
337
total deposits in commercial banking organizations in
the state.
First Colonial, GNP, and Hi-Bancorp compete directly in the Chicago banking market.2 Upon consummation of this proposal, First Colonial would become
the 11th largest commercial or thrift organization
("depository institution") in the market, controlling
deposits of $1.4 billion representing 1.2 percent of total
deposits in the market ("market deposits"),3 and this
market would remain unconcentrated as measured by
the Herfindahl-Hirschman Index ("HHI"). 4 After
considering First Colonial's resulting market share,
the number of competitors remaining in the market,
the relatively small increase in concentration as measured by the HHI, and all other facts of record, the
Board concludes that consummation of the proposal
would not result in a significantly adverse effect on
competition in the Chicago banking market or any
other relevant banking market.
Convenience and Needs Considerations
Section 3 of the BHC Act requires the Board, in every
case involving the acquisition by a bank holding company of a bank or bank holding company, to consider
the effects of the proposal on the convenience and
needs of the communities to be served. The Board has
long held that this analysis includes a review of the
performance under the Community Reinvestment Act
(12 U.S.C. § 2109 et seq.) ("CRA"). The CRA requires federal financial supervisory agencies to encourage financial institutions to help meet the credit
needs of the local communities in which they operate
consistent with the safe and sound operation of such
institutions. To accomplish this end, the CRA requires
the appropriate supervisory authority to "assess the
institution's record of meeting the credit needs of its
2. The Chicago banking market is approximated by Cook, DuPage,
and Lake Counties, Illinois.
3. Market share deposit data are based on calculations in which the
deposits of thrift institutions are included at 50 percent. The Board
previously has indicated that thrift institutions have become, or have
the potential to become, significant competitors of commercial banks.
See Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989);
National City Corporation, 70 Federal Reserve Bulletin 743 (1984).
Bank market deposit data are as of June 30, 1991. Thrift market
deposit data are as of March 31, 1991.
4. 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 below 1000 is considered unconcentrated. 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 anti-competitive 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 anti-competitive effects
implicitly recognize the competitive effect of limited purpose lenders
and other non-depository financial entities. The HHI in the Chicago
banking market would not increase and would remain at 551 points.
338
Federal Reserve Bulletin • April 1994
entire community, including low- and moderateincome neighborhoods, consistent with the safe and
sound operation of such institution," and to take this
record into account in its evaluation of bank holding
company applications.5
In connection with these applications, the Board has
received comments in favor of and opposing First
Colonial's proposal. Several community groups, including groups representing residents in the Austin
community of Chicago who were initially opposed to
the proposal, have submitted comments in support of
the acquisition after discussing First Colonial's plans
to increase its lending in this community. The Illinois
Banking Commissioner also has commented in favor
of the proposal.
Other community groups ("Protestants") have criticized First Colonial's CRA record of performance in
the Austin community. Specifically, these commenters
maintain that First Colonial's subsidiary bank that
serves this community, The Avenue Bank of Oak
Park, Oak Park, Illinois ("Avenue Bank"), does not
meet the housing-related credit needs of low- to
moderate-income residents and has been unresponsive
to their complaints. Protestants also allege that numerous members of the Austin community have complained about Avenue Bank's lack of loan applications
and misinformation regarding application procedures.
The Board has carefully reviewed the CRA performance of First Colonial, Hi-Bancorp, GNP, and their
subsidiary banks, in light of the CRA, the Board's
regulations and the jointly issued Statement of the
Federal Financial Supervisory Agencies Regarding the
Community Reinvestment Act ("Agency CRA Statement").
In May 1993, the Board denied similar applications
by First Colonial to acquire these banking organizations on the basis of the record of performance under
the CRA of Avenue Bank.6 In denying the applications, the Board found deficiencies in Avenue Bank's
record of meeting the credit needs of its community,
particularly in minority and low- to moderate areas,
had continued through two consecutive CRA performance examinations by the Federal Deposit Insurance
Corporation ("FDIC").7 The Board also found that
First Colonial had not taken sufficient steps to address
these deficiencies. The First Colonial Order noted that
the denial of First Colonial's application was without
prejudice to future applications by First Colonial when
5. 12 U.S.C. § 2903.
6. First Colonial Bankshares Corporation, 79 Federal Reserve
Bulletin 706 (1993) ("First Colonial Order").
7. Avenue Bank's CRA performance was rated "needs to improve"
as of December 31, 1991 ("the 1991 examination"), and again as of
January 15, 1993 ("the January 1993 examination").
Avenue Bank's CRA record of performance was in
place and that its policies and programs were working
well.8
The First Colonial Order outlined specific aspects of
Avenue Bank's CRA performance that the Board
believed should be addressed, including Avenue
Bank's low levels of lending in minority and low- to
moderate-income areas, and its ascertainment and
marketing efforts with respect to the minority and lowto moderate-income areas of its community. In this
regard, the Board noted that, in 1992, of all the Home
Mortgage Disclosure Act ("HMDA") related loans
that were made in Avenue Bank's delineated community, none of these loans were made in minority or
low- to moderate-income areas. The First Colonial
Order also stated that Avenue Bank had not fully
implemented a program to ascertain the credit needs of
and market its banking products to its entire delineated
community as of the January 1993 examination, despite criticisms noted in the 1991 examination. While
recognizing the steps that First Colonial had undertaken to improve its CRA record, the First Colonial
Order concluded that Avenue Bank did not have a
satisfactory record of performance in place and had
failed to address deficiencies in its CRA performance
for some time. On this basis, the Board concluded that
considerations relating to the convenience and needs
factor were not consistent with approval.
Record of Performance Under the CRA
The Board believes that the ability of First Colonial
and Avenue Bank to demonstrate that its CRA record
of performance is in place and that its programs and
policies are working well is an important consideration
in light of the Board's findings in the First Colonial
Order. The record of this application reflects a number
of affirmative steps taken by First Colonial and Avenue Bank to address the deficiencies noted in the First
Colonial Order.
A. CRA Performance Examinations
The Agency Policy Statement provides that a CRA
examination is an important and often controlling
factor in determining whether convenience and needs
factors are consistent with approval of an expansionary proposal. The Board notes that Avenue Bank has
improved its CRA performance rating since the January 1993 examination and its overall record of performance under the CRA is now rated "satisfactory" by
8. First Colonial Order at p. 708.
Legal Developments
its primary federal supervisor, the FDIC.9 Moreover,
First Colonial's remaining 14 subsidiary banks all
received at least a "satisfactory" rating from their
primary federal supervisors in their most recent CRA
performance examinations. Both subsidiary banks of
Hi-Bancorp and GNP also received "satisfactory"
ratings from their primary federal supervisors in their
most recent examinations.
B. CRA Performance Record of Avenue Bank
Lending Activities. Avenue Bank has made progress in
improving its lending to low- to moderate-income and
minority portions of its delineated service area. For
example, 1992 data showed that Avenue Bank originated no HMDA-related loans in low- to moderateincome or minority neighborhoods within its service
area. HMDA data for 1993, however, indicate that
Avenue Bank originated 15 loans totalling $1.3 million
in low- and moderate-income neighborhoods in this
area,10 including 10 loans totalling approximately
$1 million to housing organizations serving primarily
minority and low- to moderate-income areas. The
August 1993 examination notes that Avenue Bank now
makes more than half of its loans within its delineated
service community.
Two new lending programs have been developed by
Avenue Bank to address the housing-related credit
needs of low- and moderate-income borrowers. The
"Money Sale" program, introduced this year, features
low-cost mortgages (with a 15 percent down payment)
and home improvement loans. In addition, First Colonial's mortgage subsidiary, First Colonial Mortgage
Corporation ("First Colonial Mortgage"), provides
loans under the Illinois Community Home Buyers
Program.11 Government-sponsored loan programs,
such as the Federal Housing Administration ("FHA")
loans, are also offered by First Colonial Mortgage
through an agency relationship with an unaffiliated
state member bank.12 In addition, the August 1993
9. In this regard, at its most recent examination for CRA performance as of August 16, 1993 (the "August 1993 examination"), the
FDIC upgraded Avenue Bank's rating from "needs to improve" to
"satisfactory". See also 54 Federal Register 13,743 (1989).
10. This amount also includes five loans totaling $282,000 to
minority borrowers. Avenue Bank also originated eight additional
HMDA-related loans totalling $200,000 in the Austin area, but not
located in its delineated community.
11. This program provides mortgages with down payments as low as
5 percent at terms often more favorable than those offered by FHA
loans. During 1993, Avenue Bank originated at least 19 Community
Home Buyer loans.
12. In this regard, the Board has carefully reviewed comments from
a denied mortgage applicant maintaining that First Colonial Mortgage's practice of referring FHA loan applications to an unaffiliated
bank is misleading. First Colonial formalized its agency relationship
with the unaffiliated FHA-lender bank and has modified its advertisements to reflect this relationship. The Board has also considered the
339
examination noted that Avenue Bank supports local
community development projects. It has, for example,
extended a line of credit to the Neighborhood Housing
Services of Chicago, Inc. and has become a member of
other nonprofit neighborhood improvement groups.
Avenue Bank also has initiated a number of steps
designed to continue its progress in meeting the credit
needs of low- and moderate-income borrowers. For
example, Avenue Bank has implemented a tracking
system to assist in assessing the effectiveness of the
geographic distribution of its loans. In addition, Avenue Bank has initiated a second review process for
denied loans, and amended the compensation structure for lending officers based on numbers of loans
generated instead of the dollar amounts of loans. The
August 1993 examination also noted a number of
innovative products offered by Avenue Bank to primarily low- and moderate-income residents. These
loan products include the Illinois Smart Money Program, which provides low cost checking accounts for
public aid recipients, and secured installment loans to
assist customers in establishing and reestablishing
credit.
In addition, First Colonial has committed to lend
$40 million over the next five years in the Austin,
Garfield and Oak Park areas.13 First Colonial has also
established a full-service branch at a temporary location in the Austin community and has committed to
maintain this branch when a permanent location can
be found in this community.
The Board notes that First Colonial has put in place
policies and programs to increase Avenue Bank's
housing-related lending to low- and moderate-income
areas within its service area. While these programs
have improved the bank's lending record, they have so
far resulted in a small number of housing-related loans
to low- and moderate-income individuals. The Board
believes that First Colonial's ability to continue to
demonstrate increased lending to these residents of its
service community is an important aspect of the
bank's CRA performance, and the Board expects First
Colonial to implement fully all of its programs in order
to sustain and improve the progress demonstrated to
date in its lending record.
Ascertainment and Marketing. The August 1993
examination concluded that Avenue Bank's ascertainment efforts now appear to be reaching all segments of
its delineated community. For example, Avenue Bank
results of on-site inspections conducted by the Federal Reserve Bank
of Chicago of both First Colonial Mortgage and the state member
bank. Based on these and all facts of record, the Board concludes that
these comments do not warrant denial of these applications.
13. Other commitments made by First Colonial for assisting these
communities are detailed in an agreement between First Colonial and
a community group representing residents in this area.
340
Federal Reserve Bulletin • April 1994
has begun to host focus groups and use information
gathered at these meetings to plan strategies to meet
perceived community credit needs. Avenue Bank also
uses its officer call program to communicate with
community leaders and businesspersons in all areas of
the bank's delineated community and to determine
unmet credit needs. Ongoing contacts with government officials, realtors, and neighborhood housing
organizations are maintained to discuss the financial
needs of individuals and businesses within the bank's
delineated community.14
The August 1993 examination found the advertising
media used by Avenue Bank encompasses all areas
within the bank's delineated community, the advertisements are racially neutral, and all areas of the
bank's delineated community have been made aware
of Avenue Bank's current loan products. The various
media used to promote the Avenue Bank's lending
products include statement stuffers, window signs,
newspaper advertisements, and customer newsletters,
such as "Banknotes," which is mailed to all current
customers, and "Financial Forum," which is distributed to residents within Avenue Bank's delineated
area.
Conclusions Regarding the Convenience and Needs
Factor
On the basis on these and other facts of record,
including the demonstrated improvement in the CRA
areas in which deficiencies were originally noted by
the FDIC and the Board last year, as well as information provided by all the commenters and First Colonial, and relevant examination reports, the Board
concludes that the CRA performance record of First
Colonial is, on balance, now consistent with approval.
In reaching this conclusion, the Board has relied to a
significant extent on the recent "satisfactory" CRA
performance rating for Avenue Bank by the FDIC and
the "satisfactory" or better CRA performance ratings
of First Colonial's remaining subsidiary banks as well
as the programs that have been initiated by First
Colonial to improve the lending record of Avenue
Bank.
The Board expects First Colonial to continue to
improve Avenue Bank's lending performance in its
communities, particularly with respect to low- to
moderate-income and minority areas, and to comply
with all commitments regarding its CRA activities
14. In this regard, Avenue Bank has established a "community
review committee" which includes four officers of the bank and four
members of the Garfield Austin Interfaith Network ("GAIN") in an
effort to better ascertain and serve the credit needs of the Austin, West
Garfield, and Oak Park neighborhoods.
given in connection with these applications. In this
regard, First Colonial is required to report quarterly to
the Federal Reserve Bank of Chicago on the progress
made in improving its CRA performance. The Board
will also closely review Avenue Bank's record in
future applications by First Colonial that require consideration of its CRA performance record.
Other Considerations
The Board has concluded that the financial and managerial resources and future prospects of First Colonial, Hi-Bancorp, and GNP Bancorp, and their respective subsidiaries, and all other supervisory factors the
Board must consider under section 3 of the BHC Act,
are consistent with approval of this proposal.
Based on the foregoing and other facts of record, the
Board has determined that the application should be,
and hereby is, approved. This approval is specifically
conditioned upon compliance by First Colonial with
the commitments made in connection with these applications. For purposes of this action, all of the
commitments and conditions are deemed to be conditions imposed in writing and, as such, may be enforced
in proceedings under applicable law.
These transactions shall not be consummated before
the thirtieth calendar day following the effective date
of this order, or later than three months after the
effective date of this order, unless such period is
extended for good cause by the Federal Reserve Bank
of Chicago acting pursuant to delegated authority.
By order of the Board of Governors, effective February 17, 1994.
Voting for this action: Chairman Greenspan, and Governors Kelley, Lindsey, and Phillips. Absent and not voting:
Governor LaWare.
JENNIFER J. JOHNSON
Associate Secretary of the Board
Vermont Financial Services Corp.
Brattleboro, Vermont
Order Approving the Merger of Bank Holding
Companies
Vermont Financial Services Corp., Brattleboro, Vermont ("Vermont Financial"), a bank holding company
within the meaning of the Bank Holding Company Act
("BHC Act"), has applied for the Board's approval
under section 3 of the BHC Act (12 U.S.C. § 1842) to
merge with West Mass Bankshares, Inc., Greenfield,
Massachusetts ("West Mass"), and thereby indirectly
Legal Developments
acquire United Savings Bank, Conway, Massachusetts.1
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 60,858 (1993)). 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.
Vermont Financial is the third largest commercial
banking organization in Vermont, controlling one
banking subsidiary with $749.6 million in deposits,
representing 14.8 percent of the total deposits in
commercial bank organizations in the state.2 West
Mass is the 84th largest bank or thrift organization
("depository institution") in Massachusetts, controlling $192.3 million in deposits, representing less than
1 percent of the total deposits in depository institutions in the state. Upon consummation of this transaction, Vermont Financial would become the 84th
largest depository institution in Massachusetts, controlling $192.3 million in deposits, representing less
than 1 percent of the total deposits in depository
institutions in the state.
Vermont Financial and West Mass do not compete
directly in any relevant banking market. Based on all
the facts of record, the Board concludes that Vermont
Financial's acquisition of West Mass and its subsidiary
bank would not result in any significantly adverse
effects on competition in any relevant banking market.
Douglas Amendment Analysis
Section 3(d) of the BHC Act, the Douglas Amendment, prohibits a bank holding company from acquiring a bank outside of its home state "unless the
acquisition o f . . . a State bank by an out-of-State bank
holding company is specifically authorized by the
statute laws of the State in which such bank is located,
by language to that effect and not merely by implication."3 For purposes of the Douglas Amendment, the
home state of Vermont Financial is Vermont.
1. In connection with Vermont Financial's proposed acquisition of
West Mass, Vermont Financial has requested Board approval under
section 3 of the BHC Act to acquire an option to purchase up to
19.9 percent of the voting shares of West Mass. This option would
become moot upon consummation of the proposal.
2. Deposit data are as of December 31, 1992.
3. 12 U.S.C. § 1842(d). 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. The operations of a bank holding company are
considered principally conducted in that state in which the total
deposits of such banking subsidiaries are largest.
341
Massachusetts and Vermont have enacted banking
statutes that permit out-of-state bank holding companies to acquire banks in these states provided that the
home state of the acquiring bank holding company
permits the acquisition of banks in that state on a
reciprocal basis.4 The Massachusetts and Vermont
state banking supervisors have preliminarily indicated
that the reciprocity requirements under their respective statutes are satisfied in this case. In light of the
foregoing, and based on an analysis of the interstate
banking statutes involved, the Board has determined
that its approval of this proposal is not prohibited by
the Douglas Amendment. Approval of this proposal is
conditioned upon Vermont Financial receiving all required state regulatory approvals.
Other Considerations
The financial and managerial resources, and future
prospects of Vermont Financial, West Mass, and their
subsidiaries, are consistent with approval of this proposal.5 Considerations relating to the convenience and
needs of the communities to be served and other
supervisory factors the Board must consider under
4. See Mass. Gen. L. ch. 167A § 2 (1990); Vt. Stat. Ann. tit. 8 § 1052
(1987). Massachusetts's interstate banking statute permits an out-ofstate bank holding company to acquire a bank in Massachusetts if the
applicant's home state authorizes the acquisition of banks in that state
by a Massachusetts bank or bank holding company under conditions
that are no more restrictive than those imposed by the laws of
Massachusetts as determined by the Massachusetts Commissioner of
Banks. Vermont's interstate banking statute authorizes an out-of-state
bank holding company to acquire a bank in Vermont if the applicant's
home state authorizes the acquisition of banks in that state by a
Vermont bank or bank holding company under conditions not substantially more restrictive than those imposed by the laws of Vermont.
Massachusetts law also prohibits an out-of-state bank holding company from controlling more than 15 percent of deposits held by all
state and federally chartered banks in Massachusetts. Mass. Gen. L.
ch. 167A § 2 (1990). In this case, Vermont Financial would acquire less
than one percent of the deposits held by Massachusetts banks.
5. The Board has carefully considered comments filed by an
individual ("Protestant") alleging that Vermont Financial and its
subsidiary bank, Vermont National Bank, Brattleboro, Vermont
("Bank"), engaged in a variety of improper banking practices in
connection with the extension of, and subsequent foreclosure on,
several commercial loans made by Bank to business associates of the
Protestant. In addition, Protestant believes that Bank's financial
condition will be adversely affected by the bank's potential civil
liability for these actions, and by the bank's potential exposure in
another commercial loan to a business that Protestant alleges is in
violation of environmental laws. Protestant also alleges that Vermont
Financial has failed to adequately disclose these matters in this
application. Vermont Financial generally has denied Protestant's
allegations and notes that Protestant has dismissed his civil action
against Bank.
The Board has carefully reviewed these allegations in light of
examination information relating to the bank's financial and managerial resources provided by Bank's primary federal regulator, the Office
of the Comptroller of the Currency ("OCC"), and information from
state environmental agencies. Based on this review and all facts of
record, the Board believes that these matters do not warrant denial of
these applications.
342
Federal Reserve Bulletin • April 1994
section 3 of the BHC Act also are consistent with
approval of this proposal.
Based on the foregoing and all the facts of record,
the Board has determined that the application should
be, and hereby is, approved.6 The Board's approval of
this proposal is expressly conditioned on compliance
with the commitments made by Vermont Financial in
connection with this application and the conditions
discussed in this order. The commitments and conditions relied on by the Board in reaching this decision
both are deemed to be conditions imposed in writing
by the Board in connection with its findings and
decision, and, as such, may be enforced in proceedings under applicable law.
This transaction shall not be consummated before
the thirtieth calendar day following the effective date
of this order, or later than three months after the
effective date of this order, unless such period is
extended for good cause by the Board or by the
Federal Reserve Bank of Boston, acting pursuant to
delegated authority.
By order of the Board of Governors, effective February 22, 1994.
within the meaning of the Bank Holding Company Act
("BHC Act"), has applied for the Board's approval
under section 4(c)(8) of the BHC Act (12 U.S.C.
§ 1843(c)(8)) and section 225.23 of the Board's Regulation Y (12 C.F.R. 225.23) to acquire all the voting
shares of Mid America Financial Corporation ("MidAmerica") and thereby indirectly acquire MidAmerica's savings association subsidiary, MidAmerica Savings Bank, F.S.B. ("MidAmerica Savings"), both of
Waterloo, Iowa.1 Iowa National also has applied under section 4(c)(8) of the BHC Act and section 225.23
of the Board's Regulation Y to indirectly acquire the
following other nonbanking subsidiaries of MidAmerica:
(1) MidAmerica Student Loan Company, West Des
Moines, Iowa ("MidAmerica Loan"), and thereby
engage in the origination, servicing, and sale of
student loans pursuant to § 225.25(b)(1) of the
Board's Regulation Y; and
(2) MidAmerica Trust Company, West Des Moines,
Iowa, and thereby engage in trust company activities pursuant to § 225.25(b)(3) of the Board's Regulation Y.
This action was taken pursuant to the Board's Rules
Regarding Delegation of Authority (12 C.F.R. 265.4(b)(1)) by
a committee of Board members. Voting for this action:
Governors LaWare, Lindsey, and Phillips.
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 66,000 (1993)). 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 BHC Act.
The Board has determined that the operation of a
savings association by a bank holding company is
closely related to banking for purposes of section
4(c)(8) of the BHC Act. 2 In making this determination,
the Board requires that savings associations acquired
by bank holding companies conform their direct and
indirect activities to those permissible for bank holding
companies under section 4(c)(8) of the BHC Act and
Regulation Y. Iowa National has committed to conform all activities of MidAmerica Savings to these
requirements.3
Iowa National, with consolidated assets of approximately $853 million, controls four subsidiary banks in
JENNIFER J. JOHNSON
Associate Secretary of the Board
Orders Issued Under Section 4 of the Bank
Holding Company Act
Iowa National Bankshares Corporation
Waterloo, Iowa
Order Approving Application to Acquire a Savings
Association and Other Nonbanking Companies
Iowa National Bankshares Corporation, Waterloo,
Iowa ("Iowa National"), a bank holding company
6. Protestant has requested a suspension of the processing period
for applications under section 3 of the Bank Holding Company Act
and the Board's Regulation Y (12 C.F.R. 225.14) to give him time to
present additional information. The Board notes that Protestant has
had ample opportunity to present written submissions, and has, in
fact, submitted substantial written comments that have been considered by the Board. Protestant also has indicated that he may in the
future obtain additional information regarding Vermont Financial. In
this regard, Protestant would have the opportunity to present this
information in future applications filed by Vermont Financial, and
these comments would be made a part of the record considered by the
Board at that time. In light of these facts, the Board does not believe
that a suspension of the processing period is warranted in this case and
Protestant's request is denied.
1. Iowa National will acquire MidAmerica by merger with Iowa
National's wholly owned subsidiary, MFC Corporation, and will
operate MidAmerica Savings as a separate subsidiary.
2. See 12 C.F.R. 225.25(b)(9).
3. MidAmerica Savings engages in insurance agency activities that
are not permissible for bank holding companies under the BHC Act.
Iowa National has committed to divest or terminate all impermissible
insurance activities within two years of consummation of the proposal. Iowa National also has committed that, during this two-year
period, it will limit MidAmerica Savings's insurance activities to
renewals of existing policies and to insurance activities permissible for
a bank holding company under the BHC Act.
Legal Developments
Iowa.4 It is the sixth largest commercial banking
organization in the state, controlling deposits of approximately $718 million, representing approximately
2.3 percent of total deposits in commercial banking
organizations in the state. Mid America Savings is the
fourth largest thrift organization in Iowa, controlling
deposits of approximately $304 million, representing
approximately 7.5 percent of total deposits in thrift
organizations in the state. Upon consummation of this
transaction, Iowa National would become the fifth
largest commercial banking organization in Iowa, controlling deposits of approximately $1 billion, representing approximately 3.3 percent of total deposits in
commercial banking organizations in the state.
Competitive
Considerations
Under section 4(c)(8) of the BHC Act, the Board must
consider the competitive aspects of each proposal.5 In
this regard, Iowa National and Mid America Savings
compete directly in the Waterloo banking market.6
Iowa National is the largest depository institution7 in
the market, controlling approximately $358.5 million
in deposits, representing approximately 31 percent of
total deposits in depository institutions in the market
("market deposits"). MidAmerica Savings is the fifth
largest depository institution in the market, controlling
approximately $143.8 million in deposits, representing
approximately 6 percent of market deposits. Upon
consummation of this proposal, Iowa National would
remain the largest depository institution in the market,
controlling deposits of approximately $502.3 million.
This market would remain highly concentrated as
measured by the Herfindahl-Hirschman Index
4. State and market data are as of June 30, 1993.
5. Section 4(c)(8) of the BHC Act requires the Board to determine
that the acquisition of MidAmerica Savings "can reasonably be
expected to produce benefits to the public . . . that outweigh possible
adverse effects, such as undue concentration of resources, decreased
or unfair competition, conflicts of interest, or unsound banking
practices." See First Hawaiian, Inc., 79 Federal Reserve Bulletin 966
(1993).
6. The Waterloo banking market consists of Black Hawk County,
Jefferson and Jackson townships in Bremer County, and Beaver
township in Butler County, all in Iowa.
7. In this context, depository institutions include commercial banks,
savings banks, and savings associations. Market share data before
consummation are based on calculations in which the deposits of thrift
institutions are included at 50 percent. The Board previously has
indicated that thrift institutions have become, or have the potential to
become, significant competitors of commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin 788 (1990); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Because the deposits of
MidAmerica Savings would be controlled by a commercial banking
organization upon consummation of this proposal, these deposits are
included at 100 percent in the calculation of Iowa National's postconsummation share of market deposits. See Norwest Corporation, 78
Federal Reserve Bulletin 452 (1992); First Banks, Inc., 76 Federal
Reserve Bulletin 669, 670 n.9 (1990).
343
("HHI"),8 and Iowa National would control approximately 41 percent of market deposits.
In order to mitigate the adverse competitive effects
that otherwise would result from consummation of this
proposal, Iowa National has committed to divest one
or more offices of MidAmerica Savings in the Waterloo banking market with deposits of not less than $30.2
million as of June 30, 1993, to an out-of-market depository institution.9 Upon consummation of the proposal
and the divestiture of these deposits to an out-ofmarket thrift institution, the HHI in the Waterloo
banking market would increase by 388 points to 2744.
A number of considerations indicate that the increase in concentration level in the Waterloo banking
market as measured by the HHI after the planned
divestiture tends to overstate the competitive effects
of this proposal. For example, upon consummation of
this proposal, the number of competitors would not be
reduced, and ten depository institutions would remain
in the market. The three largest depository institutions
in the market, after Iowa National, are all multi-state
bank holding companies that each have total assets
exceeding $5 billion. Several factors also indicate that
the market is attractive for entry. The Waterloo banking market's ratio of population per bank office exceeds the average for all MSA's in Iowa, and the
growth rate of deposits in the market since 1988 has
been the highest of any Iowa MSA. Four commercial
banking organizations have entered the Waterloo
banking market by acquisition since 1991, including
the acquisition in 1993 of the second largest depository
institution in the market. Out-of-state bank holding
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 over 1800 is considered to be highly concentrated.
In such highly concentrated markets, the Justice Department is likely
to challenge a merger that increases the HHI by 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. Upon consummation of
the proposal, the HHI in the Waterloo banking market would increase
by 512 points to 2868.
9. Iowa National has committed to submit to the Board, prior to
consummation of its acquisition of MidAmerica, a binding contract
acceptable to the Board for the sale of an office or offices within six
months of consummation of this proposal. Iowa National also has
committed, should any divestiture not be consummated within this
time, to assign the assets and liabilities of the office or offices to an
independent trustee, who will be instructed and authorized to
promptly find a suitable buyer. Furthermore, Iowa National has
committed to submit to the Board, prior to consummation of the
acquisition, an executed trust agreement acceptable to the Board
stating the terms of this divestiture. The Board's action on the
application is expressly conditioned upon compliance with these
commitments.
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Federal Reserve Bulletin • April 1994
companies within a defined region are authorized to
acquire Iowa commercial banking organizations.
The Board also has considered the competitive
effects of credit unions, which account for approximately 22 percent of combined bank, thrift, and credit
union deposits in the Waterloo banking market.10 With
credit union deposits accorded 50 percent weight, one
credit union in particular, with membership open to
nearly all individuals or companies in the market,
controls approximately 10 percent of the deposits held
by depository institutions and credit unions competing
in the market. This credit union also aggressively
competes with depository institutions in the provision
of banking services and products.11
Based on all the facts of record, including the
proposed divestiture, the number of competitors that
would remain in the market after consummation, the
recent entry of new competitors into the market, and
the role of credit unions in the market, the Board
concludes that consummation of this proposal would
not have a significantly adverse effect on competition
or the concentration of banking resources in the Waterloo banking market or any other relevant banking
markets.
Record of Performance Under the CRA
Convenience and Needs Considerations
A. CRA Performance Examinations
In acting on an application to acquire a depository
institution as proposed in this application, the Board
must consider the convenience and needs of the communities to be served and take into account the
records of the relevant depository institutions under
the Community Reinvestment Act (12 U.S.C. § 2901
et seq.) ("CRA"). The CRA requires the federal
financial supervisory agencies to encourage financial
institutions to help meet the credit needs of the local
communities in which they operate, consistent with
the safe and sound operation of such institutions. To
accomplish this end, the CRA requires the appropriate
federal supervisory authority to "assess 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
operations of such institution," and to take that record
into account in its evaluation of bank holding company
applications.12
The Agency CRA Statement provides that a CRA
examination is an important, and often controlling,
factor in the consideration of an institution's CRA
record and that these reports will be given great weight
in the applications process.15 In this regard, the Board
notes that all of Iowa National's subsidiary banks,
including Waterloo Bank, received "satisfactory" ratings from their primary regulators in their most recent
examinations for CRA performance, and that MidAmerica Savings received an "outstanding" rating
from its primary regulator in each of its two most
recent examinations. The Board also notes that Iowa
National plans to retain all personnel (with the possible exception of personnel employed at the divested
10. Eighteen credit unions, with liberal membership requirements,
compete in the market. The national average of deposits controlled by
credit unions is 5.6 percent.
11. Sixty-eight percent of households in Black Hawk County, Iowa,
which includes a substantial portion of the Waterloo banking market,
are members of this credit union. This credit union operates 6
stand-alone offices, 3 extended-hours offices in supermarkets, and 3
drive-through facilities.
12. 12 U.S.C. § 2903.
In this regard, the Board has received comments
from an individual ("Protestant") contending that
Iowa National's subsidiary bank, National Bank of
Waterloo ("Waterloo Bank") and MidAmerica Savings
have generally failed to ascertain and meet the credit
needs of minority and low- and moderate-income individuals and small businesses.13 In particular, Protestant
alleges that Waterloo Bank has discriminated against
minorities and low- and moderate-income borrowers in
violation of federal civil rights statutes on the basis of
data filed under the Home Mortgage Disclosure Act
("HMDA").
In its consideration of the convenience and needs
factor, the Board has carefully reviewed the entire
record of CRA performance of Iowa National, MidAmerica, and their subsidiaries; all comments received on these applications, including Iowa National's responses; and all other relevant facts of record, 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").14
13. Protestant also maintains that the substantial lessening of
competition resulting from this proposal will further reduce the
services available to meet these credit needs. For the reasons previously discussed, the Board has concluded that consummation of this
proposal would not have a significantly adverse effect on competition
in the Waterloo banking market. In addition, Protestant believes that
certain individuals who may be involved in this proposal have a
conflict of interest due to their former employment by the Federal
Home Loan Bank of Atlanta. These allegations have been brought to
the attention of the Office of Thrift Supervision, the successor to the
Federal Home Loan Bank Board, which is also required to approve
this acquisition. The Board has carefully considered these comments
in light of all facts of record, and does not believe that they warrant
denial of this application.
14. 54 Federal Register 13,742 (1989).
15. 54 Federal Register 13,745 (1989).
Legal Developments
branch), and all CRA-related policies and procedures
at MidAmerica Savings in light of its CRA performance record.
B. Waterloo Bank's Record of Performance
Lending Activities. The Board has carefully reviewed
the 1991 and 1992 data filed under the HMDA in light
of Protestant's allegations of disparities in lending to
minorities and low- and moderate-income residents in
its service area. These data show that Waterloo Bank
made a higher percentage of its home mortgage loans
to blacks and to borrowers in low- and moderateincome census tracts than did lenders reporting
HMDA data in the market in the aggregate. In addition, between 1991 and 1992 the denial rate was
reduced and the origination rate for home mortgage
loans to blacks and to borrowers in low- and moderateincome census tracts increased at Waterloo Bank,
while these rates deteriorated or improved more
slowly among reporting lenders in the aggregate. However, these data also indicate disparities in approvals
and denials of loan applications according to racial and
ethnic group and income status. Because all banks are
obligated to adopt and implement lending practices
that ensure not only safe and sound lending, but also
equal access to credit by creditworthy applicants
regardless of race, the Board is concerned when the
record of an institution indicates disparities in lending
to applicants in low- and moderate-income and minority communities. The Board also recognizes that
HMDA data have limitations that make the data an
inadequate basis, absent other information, for conclusively determining whether an institution has engaged in illegal discrimination in making lending decisions.
Waterloo Bank's 1993 CRA performance examination found no evidence of any pattern or practice of
discriminatory credit practices, or other practices designed to discourage credit applications.16 The Board
has also reviewed additional relevant examination
materials from the bank's primary regulator, the Office
of the Comptroller of the Currency.
Regarding Waterloo Bank's lending activities, examiners found that lending levels reflected a general
responsiveness to the most pressing community credit
needs and that the geographic distribution of the
bank's credit extensions and denials demonstrated a
reasonable penetration of all segments of its local
community. Waterloo Bank also offers several prod-
16. The examination noted technical and procedural violations of
the HMDA and the Fair Housing Home Loan Data System regulation.
Management has agreed to initiate steps, including training and
systems review, to prevent recurrence of these problems.
345
ucts specifically designed to assist in meeting the
credit needs of low- and moderate-income borrowers.
For example, the bank offers the Community Improvement Program ("CIP"), an adjustable rate home mortgage targeted to low-income borrowers.17 In addition,
Waterloo Bank participates in government-sponsored
lending programs,18 and has invested approximately
$8 million in local industrial development revenue
bonds. The bank also has provided financing for the
purchase and improvement of distressed properties in
downtown Waterloo under a city-sponsored program.
Ascertainment and Marketing. Waterloo Bank ascertains credit needs is a variety of ways. The bank
maintains regular contact with community and government organizations, including local community development organizations, government officials, minority
organizations, and realtors. Surveys are also conducted and reviewed by the bank's CRA committee
and the CRA compliance officer. The compliance
officer reports to the Board of Directors on a regular
basis, and CRA-related issues are routinely considered
as part of the board's planning process.
Marketing and advertising are approved and monitored by the bank's board of directors, and these
programs serve to inform all segments of the community of the bank's products and services. Waterloo
Bank uses a variety of media to advertise its products
and services, including radio, television, newspapers,
direct mail, and outdoor advertising. Direct mail marketing is also used to promote products specially
developed for low- and moderate-income borrowers
such as the CIP loan program. The bank also advertises in a newspaper targeted to minority members of
the community.
C. Conclusion Regarding Convenience and
Needs Factors
In considering the overall CRA performance records
of Iowa National and MidAmerica, the Board has
carefully evaluated the entire record, including the
public comments in this case. Based on a review of the
entire record, including Protestant's comments and
Iowa National's responses thereto, and relevant reports of examinations, the Board concludes that convenience and needs considerations, including CRA
performance records of Iowa National, MidAmerica,
17. In order to increase acceptance of this program, the bank's CRA
committee has revised CIP to offer fixed rate mortgages that are below
market rates, without application fees or discount points, and with
fixed closing costs.
18. Waterloo Bank had outstanding Small Business Administration
loans aggregating $725,000 and Federal Housing Administration loans
aggregating $675,000 at year-end 1993.
346
Federal Reserve Bulletin • April 1994
and their subsidiary depository institutions, are consistent with approval of this application.19
Other Considerations
The financial and managerial resources of Iowa National, MidAmerica, and their respective subsidiaries
are consistent with approval. Iowa National also has
applied, pursuant to section 4 of the BHC Act, for
approval to engage indirectly through the acquisition
of nonbanking subsidiaries of MidAmerica in loan
origination, servicing, and sales and in trust company
activities. The Board previously has determined that
these activities are permissible under section 4(c)(8) of
the BHC Act and the Board's Regulation Y, 20 and
Iowa National proposes to conduct these activities in
accordance with the Board's regulations. The record
in this case indicates that there are numerous providers of these nonbanking services, and there is no
evidence in the record to indicate that consummation
of this proposal is likely to result in any significantly
adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of
interest, or unsound banking practices that would
outweigh the public benefits of this proposal. Accordingly, the Board has determined that the balance of
public interest factors it must consider under section
4(c)(8) of the BHC Act is favorable and consistent with
approval of the acquisition of the additional nonbanking subsidiaries of MidAmerica.
Conclusion
Based on all the facts of record, the Board has
determined that the application should be, and hereby
is, approved.21 The Board's approval is specifically
19. Protestant has requested that the Board hold a public hearing or
meeting on this application. The Board's rules provide that a hearing
is required under section 4 of the BHC Act only if there are disputed
issues of material fact that cannot be resolved in some other manner.
In addition, 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 C.F.R. 262.3(e) and 262.25(d). The Board has carefully considered this request. In the Board's view, interested parties have had
a sufficient opportunity to present written submissions, and have
submitted substantial written comments that have been considered by
the Board. Moreover, Protestant's allegations state conclusions about
the institutions's CRA records without disputing any of the material
facts in this case. On the basis of all the facts of record, the Board has
determined that a public meeting or hearing is not necessary to clarify
the factual record in this application, or otherwise warranted in this
case. Accordingly, the request for a public meeting or hearing on this
application is hereby denied.
20. See 12 C.F.R. 225.25(b)(1) and 225.25(b)(3).
21. Protestant also has commented on the absence of minority
members of the community in upper level positions at Waterloo Bank.
In this regard, the Board notes that because Waterloo Bank employs
more than 50 people and acts as an agent to sell or redeem U.S.
conditioned upon compliance with all the commitments made by Iowa National in connection with this
application and the conditions referred to in this
Order. The Board's determination also is subject to all
the conditions set forth in Regulation Y, including
those in sections 225.4(d) and 225.23(b) of Regulation Y, 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 ensure compliance with, and
to prevent evasion of, the provisions of the BHC Act
and the Board's regulations and orders issued thereunder. For purposes of this action, these commitments
and conditions are deemed to be conditions imposed in
writing by the Board in connection with its findings
and decision, and, as such, may be enforced in proceedings under applicable law.
This transaction shall not be consummated later
than three months after the effective date of this order,
unless such period is extended for good cause by the
Board or by the Federal Reserve Bank of Chicago,
acting pursuant to delegated authority.
By order of the Board of Governors, effective
February 28, 1994.
Voting for this action: Chairman Greenspan and Governors
Kelley, LaWare, Lindsey, and Phillips.
JENNIFER J. JOHNSON
Associate Secretary of the Board
National City Corporation
Cleveland, Ohio
Order Approving an Application to Engage De Novo
in Underwriting and Dealing in Certain
Bank-Ineligible Securities on a Limited Basis, and
Other Securities-Related Activities
National City Corporation, Cleveland, Ohio ("Applicant"), has applied, pursuant to section 4(c)(8) of the
Bank Holding Company Act (12 U.S.C. § 1843(c)(8))
("BHC Act") and section 225.23 of the Board's Regulation Y (12 C.F.R. 225.23), to acquire National City
Investments Corporation, Cleveland, Ohio ("Company"), through a corporate reorganization,1 and engage
de novo in the following activities:
savings bonds and notes, it is required by Treasury Department
regulations to:
(1) File annual reports with the Equal Employment Opportunity
Commission; and
(2) Have in place a written affirmative action compliance program
which states its efforts and plans to achieve equal opportunity in the
employment, hiring, promotion, and separation of personnel.
1. Company is currently a wholly owned subsidiary of National City
Bank, Cleveland, Ohio ("NCB"). In order to effect this reorganization, NCB will transfer 100 percent of the outstanding stock of
Legal Developments
(1) Underwriting and dealing in municipal revenue
bonds, residential mortgage-related securities, consumer- receivable-related securities, and commercial paper (hereinafter "bank-ineligible securities");
(2) Acting as agent in the private placement of all
types of securities, including providing related advisory services, and buying and selling securities on
the order of investors as a "riskless principal";
(3) Acting as agent in the purchase and sale of gold
and silver bullion, bars, rounds, and coins, and
platinum coins that function as legal tender, for the
accounts of customers;
(4) Making and servicing loans pursuant to section
225.25(b)(1) of the Board's Regulation Y (12 C.F.R.
225.25(b)(1));
(5) Engaging in investment advisory activities pursuant to section 225.25(b)(4) of the Board's Regulation Y (12 C.F.R. 225.25(b)(4));
(6) Providing management consulting services to
depository institutions pursuant to section
225.25(b)(ll) of the Board's Regulation Y
(12 C.F.R. 225.25(b)(ll));
(7) Providing discount and full service brokerage
services pursuant to section 225.25(b)( 15)(i) and
(ii) of the Board's Regulation Y (12 C.F.R.
225.25(b)( 15)(i) and (ii));
(8) Underwriting United States government,
agency, state, and municipal securities pursuant to
section 225.25(b)(16) of the Board's Regulation Y
(12 C.F.R. 225.25(b)(16));
(9) Providing foreign exchange advisory and transactional services pursuant to section 225.25(b)(17) of
the Board's Regulation Y (12 C.F.R. 225.25(b)(17));
(10) Engaging in futures commission merchant activities pursuant to section 225.25(b)(18) of the
Board's Regulation Y (12 C.F.R. 225.25(b)(18));
(11) Providing investment advice on financial futures
and options on futures pursuant to section
225.25(b)(19) of the Board's Regulation Y
(12 C.F.R. 225.25(b)(19)).
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (59 Federal Register 1947 (1994)). The time
for filing comments has expired, and the Board has
considered the application and all comments received
in light of the public interest factors set forth in section
4(c)(8) of the BHC Act.
Applicant, with total consolidated assets of
$31.1 billion, is the second largest commercial banking
organization in Ohio.2 Applicant operates banking
Company to Applicant, which will take the form of a dividend to
Applicant as the sole shareholder of NCB.
2. Data are as of December 31, 1993.
347
subsidiaries in Ohio, Indiana, and Kentucky and engages in nonbanking activities through 25 nonbanking
subsidiaries.
As noted, all the proposed activities except underwriting and dealing in bank-ineligible securities, conducting private placement and "riskless principal"
activities, and dealing in precious metal have been
determined by regulation to be activities that are
closely related to banking for purposes of section
4(c)(8) of the BHC Act. 3 Applicant proposes to conduct these activities through Company in accordance
with the Board's regulations.
Underwriting and Dealing in Bank-Ineligible
Securities
Applicant proposes to underwrite and deal in municipal revenue bonds, residential mortgage-related securities, consumer receivable-related-securities, and
commercial paper. The Board previously has determined that, subject to the prudential framework of
limitations established in previous decisions to address
potential conflicts of interests, unsound banking practices, or other adverse effects, the proposed underwriting and dealing activities are so closely related to
banking as to be proper incidents thereto within the
meaning of section 4(c)(8) of the BHC Act. The Board
also has determined that the conduct of these securities underwriting and dealing activities is consistent
with section 20 of the Glass-Steagall Act, provided
that the underwriting and dealing subsidiary derives no
more than 10 percent of its total gross revenue over
any two-year period from underwriting and dealing in
securities that a bank may not underwrite or deal in
directly.4 Applicant has committed that Company will
conduct its underwriting and dealing activities with
respect to bank-ineligible securities subject to the
10 percent revenue test established by the Board in
previous Orders.5
3. See 12 C.F.R. 225.25(b)(1), (b)(4), (b)(ll), (b)(15), (b)(16), (b)(17),
(b)(18), and (b)(19).
4. See Citicorp, J.P. Morgan & Company Incorporated, and
Bankers Trust New York Corporation, 73 Federal Reserve Bulletin 473
(1987) ("Citicorp/Morgan/Bankers Trust Order"), ajfd sub nom.
Securities Industry Association v. Board of Governors of the Federal
Reserve System, 839 F.2d 47 (2d Cir. 1988), cert, denied, 486 U.S.
1059 (1988), as modified by Order Approving Modifications to Section
20 Orders, 75 Federal Reserve Bulletin 751 (1989) ("Modification
Order").
5. Company will calculate compliance with the 10 percent revenue
limitation in accordance with the original method set forth in J.P.
Morgan & Company Incorporated, The Chase Manhattan Corporation, Bankers Trust New York Corporation, Citicorp, and Security
Pacific Corporation, 75 Federal Reserve Bulletin 192, 196 (1989), as
opposed to the alternative indexed method set forth in Order Approv-
348
Federal Reserve Bulletin • April 1994
Private Placement and "Riskless Principal"
Activities
Private placement involves the placement of new
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 for the issuer in soliciting purchasers, and does
not purchase the securities and attempt to resell them.
Securities that are privately placed are not subject to
the registration requirements of the Securities Act of
1933, and are offered only to financially sophisticated
institutions and individuals and not the public. Applicant will not privately place registered securities and
will only place securities with customers who qualify
as accredited investors.
"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 own account to offset a contemporaneous sale to (or purchase from) the customer.6 "Riskless principal" transactions are understood in the
industry to include only transactions in the secondary
market. Thus, Applicant 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 previously has determined by Order that,
subject to 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
BHC Act. 7 The Board also previously has 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 sub-
ing Modifications to Section 20 Orders, 79 Federal Reserve Bulletin
226 (1993).
6. See Securities and Exchange Commission Rule 10b-10. 17 C.F.R.
249.10b-10(a)(8)(i).
7. See Bankers Trust New York Corporation, 75 Federal Reserve
Bulletin 829 (1989) ("Bankers Trust Order"); J.P. Morgan & Company Incorporated, 76 Federal Reserve Bulletin 26 (1990) ("J.P.
Morgan Order").
ject to the 10 percent revenue limitation on bankineligible securities underwriting and dealing.8 Applicant 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 Order and the J.P. Morgan
Order, including the comprehensive framework of
restrictions designed to avoid potential conflicts of
interests, unsound banking practices, and other adverse effects imposed by the Board in connection with
underwriting and dealing in securities.9
Dealing in Precious Metals
Applicant proposes that Company purchase and sell
gold and silver bullion, bars, rounds, and coins, and
platinum coins that function as legal tender, for the
accounts of customers. The Board previously has
approved these activities for bank holding companies.10 Applicant proposes to conduct these activities
in accordance with the commitments listed in the
Board's previous orders.
Interlocks
Applicant has requested that the Board permit limited
director interlocks between Company and its affiliated
banks. Applicant proposes to have two director interlocks between Company and affiliated banks.11 These
directors would not be officers of the affiliated banks,
8. See Bankers Trust Order.
9. See J.P. Morgan Order; Bankers Trust Order, 75 Federal Reserve
Bulletin at 829. Among the prudential limitations detailed more fully in
those Orders are 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 engage only 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 any 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 not act as a "riskless principal"
with respect to any securities of investment companies that are
advised by Applicant or any of its affiliates. With respect to private
placement activities, Applicant has committed that Company will not
privately place registered investment company securities or securities
of investment companies that are advised by Applicant or any of its
affiliates.
10. See Midland Bank, PLC, 76 Federal Reserve Bulletin 860 (1990);
Standard Chartered, 16 Federal Reserve Bulletin 681 (1990); Westpac
Banking Corporation, 13 Federal Reserve Bulletin 61 (1987); First
Interstate Bancorp, 71 Federal Reserve Bulletin 467 (1985).
11. These interlocks would represent less than a majority of the
boards of Company and the affiliated banks.
Legal Developments
nor would they have the authority to conduct the
day-to-day business of the banks or handle individual
bank transactions.
Applicant also has requested that the Board permit
one officer interlock between Company and an affiliated bank—an attorney of an affiliated bank who
would serve as assistant secretary of Company. The
primary purpose of the proposed interlock is to permit
the attorney to perform corporate recordkeeping functions.12 The employee would not be involved in the
day-to-day management of or have any policy making
position with Company, would not have any contact
with the public, and would not participate in any sales
activities of Company.
The Board previously has permitted limited interlocks between a banking organization and an affiliated
section 20 company.13 The addition of the interlocks
proposed by Applicant would not, in view of the
limited duties and responsibilities of the interlocking
officer with Company, appear to give the affiliated
banks managerial control over Company or otherwise
raise any conflicts of interest. Accordingly, the Board
finds that these limited interlocks should be permitted,
since it appears that Company would be operationally
distinct from its affiliated banks. The Board expects
that Applicant will ensure that the framework established pursuant to Citicorp!Morgan!Bankers Trust will
be maintained in all other respects.14
Financial Factors, Managerial Resources, and Other
Considerations
In every application under section 4 of the BHC Act,
the Board considers the financial condition and resources of Applicant and its subsidiaries and the effect
of the transaction on these resources.15 Based on the
12. In that capacity, the attorney would perform functions such as
keeping minutes of meetings of Company's board of directors and
stockholders. The attorney also would perform legal services for
Company. The attorney's duties at the bank are limited to working in
the corporate law department.
13. Synovus Financial Corp., 11 Federal Reserve Bulletin 954, 955
(1991); Banc One Corporation, 76 Federal Reserve Bulletin 756, 758
(1990); Canadian Imperial Bank of Commerce, The Royal Bank of
Canada, Barclays PLC and Barclays Bank PLC, 76 Federal Reserve
Bulletin 158 (1990). The Board has requested comment on modifying
the section 20 prudential framework to permit interlocks with affiliated
banks so long as a majority of the board of directors is not comprised
of bank officers or directors.
14. The Board's approval of the proposed underwriting and dealing
activities extends only to Company. These activities may not be
conducted by Applicant in any other subsidiary without prior Board
review. Pursuant to Regulation Y, no corporate reorganization of
Company, such as the establishment of subsidiaries of Company to
conduct the activities, may be consummated without prior Board
approval.
15. See 12 C.F.R. 225.24.
349
facts of this case, the Board concludes that financial
considerations are consistent with approval of this
application. The managerial resources of Applicant
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 Applicant can reasonably be
expected to produce public benefits that outweigh
adverse effects under the proper incident to banking
standard of section (4)(c)(8) of the BHC Act. Under
the framework established in this order 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. Moreover, the Board expects that
the de novo entry of Applicant into the market for the
proposed activities would provide added convenience to Company's customers, and would increase
the level of competition among existing providers of
these services. Accordingly, the Board has determined that the performance of the proposed activities by Applicant can reasonably be expected to
produce public benefits that would outweigh possible
adverse effects under the proper incident to banking
standard of section 4(c)(8) of the BHC Act.
Based on all the facts of record, and subject to the
commitments made by Applicant, as well as all the
terms and conditions set forth in this order and in the
above-noted Board Orders, the Board has determined
that the application should be, and hereby is, approved. Approval of this proposal is specifically conditioned on compliance by Applicant and Company
with the commitments made in connection with its
application and with the conditions referenced in this
order and the other referenced orders. The Board's
determination also is subject to all of the conditions set
forth in Regulation Y, including those in sections
225.4(d) and 225.23(b), and to the Board's authority to
require modification or termination of the activities of
a bank holding company or any of its subsidiaries as
the Board finds necessary to assure compliance with,
and to prevent evasion of, the provisions of the BHC
Act and the Board's regulations and orders issued
thereunder. In approving this transaction, the Board
has relied upon all the facts of record, and all the
representations and commitments made by Applicant.
For the purpose of this action, these commitments and
conditions shall be deemed conditions imposed in
writing and, as such, may be enforced in proceedings
under applicable law.
This transaction shall not be consummated later
than three months after the effective date of this order,
unless such period is extended for good cause by the
350
Federal Reserve Bulletin • April 1994
Board or by the Federal Reserve Bank of Cleveland
pursuant to delegated authority.
By order of the Board of Governors, effective
February 10, 1994.
Voting for this action: Chairman Greenspan and Governors
Angell, LaWare, Lindsey, and Phillips. Absent and not
voting: Vice Chairman Mullins and Governor Kelley.
JENNIFER J. JOHNSON
Associate Secretary of the Board
Orders Issued Under Sections 3 and 4 of the
Bank Holding Company Act
BanPonce Corporation
Hato Rey, Puerto Rico
Order Approving Acquisition of a Bank Holding
Company
BanPonce Corporation, Hato Rey, Puerto Rico ("BanPonce"), a bank holding company within the meaning
of the Bank Holding Company Act ("BHC Act"), has
applied for the Board's approval under section 3 of the
BHC Act (12 U.S.C. § 1842) to acquire Pioneer
Bancorp, Inc., ("Pioneer") and its wholly owned
subsidiary, River Associates Bancorp, Inc., both of
Chicago, Illinois, and thereby indirectly acquire Pioneer's subsidiary bank, Pioneer Bank & Trust Company, River Grove, Illinois.1
Notice of the applications, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 60,024 and 62,128
(1993)). The time for filing comments has expired, and
the Board has considered the applications and all
comments received in light of the factors set forth in
sections 3 and 4 of the BHC Act.
BanPonce, with total consolidated assets of
$11.5 billion,2 operates branches in Puerto Rico, New
York, California, Illinois, and the United States and
British Virgin Islands through its subsidiary, Banco
Popular de Puerto Rico ("Banco Popular"). BanPonce
is the 461st largest commercial banking organization in
1. BanPonce will acquire Pioneer through the merger of Popular
Financial Incorporated ("Merger Subsidiary") into Pioneer Bancorp.
Merger Subsidiary is a wholly owned subsidiary of BanPonce Financial Corp., Mount Laurel, New Jersey ("BanPonce Financial"),
which is a wholly owned subsidiary of Popular International Bank,
Inc., Hato Rey, Puerto Rico ("PIB"), a wholly owned subsidiary of
BanPonce. In connection with this proposal, PIB and BanPonce
Financial have applied under section 3(a)(1) of the BHC Act to
become bank holding companies and to retain Spring Financial
Services, which engages in permissible nonbanking activities pursuant
to paragraphs (b)(1) and (b)(8) of section 225.25 of the Board's
Regulation Y (12 C.F.R. 225.25(b)(1) and (b)(8)).
2. Asset data are as of December 31, 1993.
Illinois, with deposits of approximately $29.4 million,
representing less than 1 percent of total deposits in
commercial banking organizations in the state.3 Pioneer, which operates only in Illinois, is the 62d largest
commercial banking organization in the state, controlling approximately $293.7 million in deposits, representing less than 1 percent of the total deposits in
commercial banking organizations in the state. Upon
consummation of this proposal, BanPonce would become the 54th largest commercial banking organization in Illinois, controlling less than 1 percent of total
deposits in commercial banking organizations in the
state.
Douglas Amendment Analysis
BanPonce, through its ownership of Banco Popular, is
subject to the provisions of the International Banking
Act of 1978 ("IBA"). Under section 5(a) of the IBA
(12 U.S.C. § 3103(a)), BanPonce may not acquire a
bank outside of its home state if the acquisition would
be prohibited by the Douglas Amendment (section 3(d)
of the BHC Act) for a bank holding company located
in the foreign bank's home state. BanPonce has selected New York as its home state for purposes of
section 5 of the IBA. 4
The Douglas Amendment prohibits the Board from
approving an application by a bank holding company
to acquire control of any bank located outside its home
state, unless such acquisition is "specifically authorized by the statute laws of the State in which such
bank is located, by language to that effect and not
merely by implication."
The statute laws of Illinois expressly authorize the
acquisition of a bank located in Illinois by an out-ofstate bank holding company, if that state authorizes
the acquisition of a bank on a reciprocal basis by an
Illinois bank holding company.5 New York has also
enacted a banking statute that permits out-of-state
bank holding companies to acquire banks in New York
provided that the home state of the acquiring bank
holding company permits the acquisition of banks in
that state by New York bank holding companies on a
3. Deposit data are as of June 30, 1993.
4. BanPonce retained that selection when it acquired Banco Popular
in 1990. BanPonce Corporation, 77 Federal Reserve Bulletin 43
(1991).
5. 111. Rev. Stat. ch. 17 para. 2510.01. The Illinois statute considers
another state's law as reciprocal if it permits an Illinois bank holding
company to acquire a bank in the other state under conditions that are
not unduly restrictive when compared to those imposed by Illinois on
out-of-state acquirors. Illinois law also requires a bank chartered after
January 1, 1982, to have been engaged in the banking business for at
least 10 years before being acquired by an out-of-state bank holding
company. In this case, Bank was chartered before January 1, 1982.
Legal Developments
reciprocal basis.6 Both the Illinois Commissioner of
Banks and Trust Companies and the New York Superintendent of Banking have concluded that the banking
statutes of Illinois and New York are reciprocal.7
Based on the foregoing and a review of the relevant
statutes, the Board has determined that the proposed
acquisition is specifically authorized by the statute
laws of Illinois. This determination is conditioned on
BanPonce obtaining the required state regulatory approvals for this transaction.
BanPonce and Pioneer compete directly in the Chicago, Illinois, banking market.8 Each organization
controls deposits representing less than 1 percent of
total deposits in commercial banking organizations in
the market. Upon consummation of this proposal, the
Chicago banking market would remain unconcentrated
as measured by the Herfindahl-Hirschman Index
("HHI"). 9
The Board also concludes that the financial and
managerial and future prospects of BanPonce and
Pioneer and their respective subsidiaries and the other
supervisory factors that the Board must consider
under section 3 of the BHC Act are consistent with
approval.
PIB and BanPonce Financial have applied to engage
in certain nonbanking activities that the Board has
determined are closely related to banking and a proper
incident thereto within the meaning of section 4 of the
BHC Act. 10 Furthermore, there is no evidence in the
record to indicate that this proposal is 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. Accordingly, the Board has determined that
the balance of public interest factors it must consider
6. See N.Y. Banking Law § 142-b (McKinney 1990), permitting
acquisitions in a state with reciprocal laws that do not impose
conditions or restrictions materially limiting the ability of a New York
banking organization to acquire a banking organization in a state that
are not applicable to an in-state bank holding company.
7. See Interpretive Letter No. 93-022 dated November 5, 1993,
from Patrick Andre, Senior Attorney, Commissioner of Banks and
Trust Companies of Illinois, to Ray Greenblatt; and letter dated
December 2, 1993, from State of New York Banking Department to
Donald Toumey.
8. The Chicago banking market consists of Cook, DuPage, and Lake
Counties, all in Illinois.
9. 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 below 1000 is considered unconcentrated. 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. The HHI for this market
would remain at 550 points upon consummation of this proposal.
10. See 12 C.F.R. 225.25(b)(1) and (b)(8).
351
under section 4(c)(8) of the BHC Act is favorable and
consistent with approval of PIB's and BanPonce Financial's applications.
Based on the foregoing, including the commitments
made to the Board by BanPonce in these applications
and in related correspondence, and in light of all the
facts of record, the Board has determined that these
applications should be, and hereby are, approved. The
Board's approval is specifically conditioned upon
compliance by BanPonce with all commitments made
in connection with these applications and the conditions discussed in this order. The Board's determinations as to the nonbanking activities to be conducted
by BanPonce are also subject to all the conditions in
the Board's Regulation Y, including those in sections
225.4(d) and 225.23(b)(3) (12 C.F.R. 225.4(d) and
225.23(b)(3)), and to the Board's authority to require
such modification or termination of the activities of a
holding company or any of its subsidiaries as the
Board finds necessary to assure compliance with, or to
prevent evasion of, the provisions and purposes of the
BHC Act and the Board's regulations and orders
issued thereunder. The commitments and conditions
relied on by the Board in reaching this decision are
deemed to be conditions imposed in writing by the
Board in connection with its findings and decision, and
as such may be enforced in proceedings under applicable law.
The banking acquisition shall not be consummated
before the thirtieth calendar day following the effective
date of this order, or later than three months following
the effective date of this order, unless such period is
extended for good cause by the Board or the Federal
Reserve Bank of New York, acting pursuant to delegated authority.
By order of the Board of Governors, effective
February 14, 1994.
Voting for this action: Chairman Greenspan and Governors
Kelley, Lindsey, and Phillips. Absent and not voting: Vice
Chairman Mullins and Governor La Ware.
JENNIFER J. JOHNSON
Associate Secretary of the Board
First Interstate Bancorp
Los Angeles, California
Order Approving the Merger of Bank Holding
Companies and the Merger of Banks
First Interstate Bancorp, Los Angeles, California
("First Interstate"), a bank holding company within
the meaning of the Bank Holding Company Act
("BHC Act"), has applied under section 3 of the BHC
352
Federal Reserve Bulletin • April 1994
Act (12 U.S.C. § 1842) to merge with San Diego
Financial Corporation ("San Diego Financial"), and
thereby indirectly acquire San Diego Financial's banking subsidiary, San Diego Trust & Savings Bank ("San
Diego Trust"), both of San Diego, California. First
Interstate also has applied pursuant to section 4(c)(8)
of the BHC Act (12 U.S.C. § 1843(c)(8)) to acquire
San Diego Life Insurance Company, San Diego, California, and thereby engage in the underwriting and
sale of credit-related insurance pursuant to section
225.25(b)(8)(i) of the Board's Regulation Y; and San
Diego Trust Securities, San Diego, California, and
thereby engage in discount brokerage activities pursuant to section 225.25(b)(15) of the Board's Regulation Y.1
First Interstate Bank of California, Los Angeles,
California ("First Interstate-California"), a state
member bank, also has applied pursuant to section
18(c) of the Federal Deposit Insurance Act (12 U.S.C.
§ 1828(c)) ("Bank Merger Act") to acquire San Diego
Trust by merger and thereby establish branches under
section 9 of the Federal Reserve Act (12 U.S.C. § 321)
at locations set forth in the Appendix.
Notice of these applications, affording interested
persons an opportunity to submit comments, has been
published (58 Federal Register 51,082 (1993)). As
required by the Bank Merger Act, reports on the
competitive effects of the merger were requested from
the United States Attorney General, the Office of the
Comptroller of the Currency, and the Federal Deposit
Insurance Corporation. 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 sections 3(c) and 4(c)(8) of the BHC Act,
the Bank Merger Act, and the Federal Reserve Act.
First Interstate, with consolidated assets of
$50.1 billion,2 controls banking subsidiaries in California, Alaska, Arizona, Colorado, Idaho, Texas, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming. First Interstate is the third largest
commercial banking organization in California, controlling deposits of $18 billion, representing approximately 7.6 percent of total deposits in commercial
banking organizations in the state.3 San Diego Financial is the eleventh largest commercial banking organization in California, controlling deposits of
$1.8 billion, representing less than 1 percent of total
1. First Interstate has committed to divest San Diego Financial's
current investments in third party mutual funds upon consummation
of this proposal.
2. Asset and deposit data are as of September 30, 1993, and have
been adjusted to reflect the recently approved acquisitions of Cal Rep
Bancorp, Inc., Bakersfield, and First State Bank of the Oaks, Thousand Oaks, both in California.
3. State asset and deposit data are as of September 30, 1993.
deposits in commercial banking organizations in the
state. Upon consummation of the proposed transaction, First Interstate would remain the third largest
commercial banking organization in California, controlling deposits of $19.8 billion, representing approximately 8.4 percent of total deposits in commercial
banking organizations in the state.
First Interstate and San Diego Financial compete
directly in the San Diego, Oceanside, and Perris
banking markets.4 Upon consummation of this proposal, all three banking markets would remain moderately concentrated as measured by the HerfindahlHirschman Index ("HHI"). 5 After considering the
competition offered by other depository institutions in
the market,6 the number of competitors remaining in
the market, the relatively small increase in concentration as measured by the HHI,7 and all other facts of
record, the Board concludes that consummation of the
proposal would not result in a significantly adverse
effect on competition in any relevant banking market.
Convenience and Needs Considerations
In acting on an application to acquire a depository
institution as proposed in these applications, the
Board must consider the convenience and needs of the
communities to be served and take into account the
records of the relevant depository institutions 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
4. The San Diego banking market is approximated by the San Diego
Metropolitan Statistical Area ("MSA"). The Oceanside banking market is approximated by the Oceanside MSA and the towns of Bonsall
and Fallbrook, California. The Perris banking market is approximated
by cities and towns of Canyon Lake, Lake Elsinore, Murietta, Nuevo,
Perris, Rancho California, Sun City, and Temecula, California.
5. 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 between 1000 and 1800 is 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 anti-competitive effects) unless the postmerger 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 anti-competitive
effects implicitly recognize the competitive effect of limited purpose
lenders and other non-depository financial entities.
6. In this context, depository institutions include commercial banks,
savings banks, and savings associations. Market deposit data are
based on calculations in which the deposits of thrift institutions are
included at 50 percent. The Board previously has indicated that thrift
institutions have become, or have the potential to become, significant
competitors of commercial banks. See WM Bancorp, 76 Federal
Reserve Bulletin 788 (1990); National City Corporation, 70 Federal
Reserve Bulletin 743 (1984).
7. The HHI would increase in these banking markets as follows: San
Diego (38 points to 1126); Oceanside (17 points to 1290); and Perris
(7 points to 1499).
Legal Developments
communities in which they operate, consistent with
the safe and sound operation of such institutions. To
accomplish this end, the CRA requires the appropriate
federal supervisory authority to "assess 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
operations of such institution," and to take that record
into account in its evaluation of bank holding company
applications.8
In this regard, the Board has received comments
from an organization in California ("Protestant") critical of First Interstate's mortgage lending activities in
California.9 Protestant also generally alleges that First
Interstate-California and San Diego Trust have not
met the credit needs of minorities and low- and moderate-income individuals, particularly in the San Diego
area, and believes that this proposal will reduce the
credit products available for the San Diego community.10
In its consideration of the convenience and needs
factor, the Board has carefully reviewed the entire
record of CRA performance of First Interstate, San
Diego Financial, and their subsidiary banks; all comments received on these applications, including First
8. 12 U.S.C. § 2903.
9. The Board has also carefully considered a protest from an
individual representing 11 complainants alleging violations of The
Expedited Funds Availability Act (12 U.S.C. §§ 4001 et seq.) and the
Board's implementing regulation, Regulation CC (12 C.F.R. Part 229),
by First Interstate's subsidiary bank in Arizona, First Interstate Bank
of Arizona, N.A., Phoenix, Arizona ("First Interstate-Arizona").
This protestant also alleges that the bank violated the Board's
Regulation B (12 C.F.R. Part 202) by failing to give proper notice of
adverse action in a loan application. First Interstate has generally
denied any wrongdoing in mak'ng funds available to the complainants
under Regulation CC and has maintained that bank provided appropriate adverse action notice in the identified loan transaction. First
Interstate has provided copies of its Regulation CC policies and
programs as part of the record, including its efforts to ensure that
funds are made available in accordance with Regulation CC. The
Board has carefully reviewed these comments in light of all facts of
record, including relevant examination information. The Board has
also forwarded the Protestant's allegations to the bank's primary
federal regulator, the Office of the Comptroller of the Currency
("OCC"). This protestant has sought review of this issue directly in
court, and this litigation is in its early stages of discovery. The court
is empowered to provide this Protestant with a remedy, if his
allegations are proved and a remedy is appropriate. Based on these
and all facts of record, the Board believes that these matters do not
warrant denial of these applications.
10. The Board also received comments from another organization in
San Diego. These comments were subsequently withdrawn in light of
certain commitments made by First Interstate to increase its CRA
activities in the San Diego area. In addition, the Board received
comments from a Texas organization objecting to First Interstate's
acquisition of Cal Rep Bancorp, Inc., and this proposal. These
comments were extensively reviewed by the Board in the Cal Rep
Bancorp Order (See First Interstate Bancorp, 80 Federal Reserve
Bulletin 40 (1994)). Based on all the facts of record, including the
reasons more fully stated in that order, the Board concludes that the
comments from the Texas protestant do not warrant denial of these
applications.
353
Interstate's response to those comments; and all other
relevant facts of record, 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").11
Record of Performance Under the CRA
A. CRA Performance Examinations
The Agency CRA Statement provides that a CRA
examination is an important, and often controlling,
factor in the consideration of an institution's CRA
record and that these reports will be given great weight
in the applications process.12 In this regard, the Board
notes that all of First Interstate's subsidiary banks
evaluated for CRA performance have received "outstanding" or "satisfactory" ratings from their primary
regulators during their most recent examinations.13
First Interstate-California received a "satisfactory"
rating from its primary federal regulator, the Federal
Reserve Bank of San Francisco, at its most recent
examination for CRA performance as of August 10,
1992.14 San Diego Trust received a "satisfactory"
rating for CRA performance at its most recent examination from the Federal Deposit Insurance Corporation ("FDIC") as of July 12, 1993.
B. Previous Review of First
Interstate-California's CRA Record
The Board recently reviewed the CRA performance
record of First Interstate-California in connection with
applications to acquire Cal Rep Bancorp, Inc., and
First State Bank of The Oaks (collectively, the "First
Interstate Orders").15 These reviews included consideration of First Interstate-California's record of lending in low- and moderate-income and minority areas
11. 54 Federal Register 13,742 (1989).
12. 54 Federal Register 13,745 (1989).
13. First Interstate Bancard Company, N.A. ("Bancard"), a specialty bank chartered solely for the purpose of issuing credit cards,
received a "needs to improve" rating for CRA performance from its
primary regulator, the OCC, in November 1991. Bancard ceased
operations in mid-1992, and was dissolved on September 20, 1993.
14. In considering the comments from the Arizona Protestant as
they relate to the bank's CRA performance the Board notes that First
Interstate-Arizona received a "satisfactory" rating from its primary
regulator, the OCC, at its most recent examination for CRA performance dated June 5,1992. In this regard, the examination report states
that the bank is in compliance with substantive provisions of antidiscrimination laws and regulations. The exam noted isolated technical
violations of Regulation B regarding required loan documentation, and
the bank has taken specific steps to address these matters.
15. See First Interstate Bancorp (Cal Rep Bancorp, Inc.), supra;
and First Interstate Bancorp, 80 Federal Reserve Bulletin 168 (1994)
(First State Bank of the Oaks).
354
Federal Reserve Bulletin • April 1994
(especially housing-related loans), community development activities, and other CRA programs and policies in light of comments received from several commenters, including Protestant. For reasons more fully
set forth in First Interstate Orders, the Board concluded that the overall CRA performance record of
First Interstate-California was generally consistent
with approval of acquisitions by First Interstate.
C. First Interstate-California's Record of
Performance
Lending Activities. The Board has carefully reviewed
the 1992 data filed under the Home Mortgage Disclosure Act (12 U.S.C. § 2801 et seq.) ("HMDA") in
light of Protestant's allegations of disparities in lending
to low- to moderate-income and minority residents in
the San Diego MSA. These data show that First
Interstate-California denied applications from minority and non-minority applicants at approximately the
same rate in 1992, and that this rate was generally
lower than the aggregate denial disparity ratio for all
lenders in the area. However, these data also indicate
that the percentage of applications received from
minority and low-income census tracts is low in light
of the number of these tracts in the San Diego MSA.
As noted in First Interstate Orders, First InterstateCalifornia's 1992 CRA performance examination
found no evidence of any pattern or practice of illegal
discriminatory credit practices, or other practices designed to discourage credit applications. In this regard,
examiners noted that the bank continually assesses its
lending activity for HMDA-reportable loans. The 1993
examination of San Diego Trust conducted by the
FDIC also found no evidence of any pattern or practice of illegal discriminatory credit practices, or other
practices designed to discourage credit applications.
First Interstate-California offers a variety of loan
products to assist in meeting the ascertained credit
needs of the bank's community, including low- and
moderate-income neighborhoods. For example, the
bank introduced a new line of mortgage products in
1992 to make home ownership more affordable for
low- and moderate-income borrowers. These programs include the Down Payment Assistance Program, which reduces the homebuyer's out-of-pocket
down payment cost to 3 percent of the purchase price.
First Interstate-California lends the remaining 2 percent in the form of a second mortgage with below
market rates and interest-only payments for the life of
the loan. In addition, the Home Buyers Assistance
Program has a down payment requirement of 5 percent, with an option permitting the down payment to
come from a gift or grant to the borrower. Both of
these programs are targeted to low- and moderate
income borrowers who may not otherwise meet the
bank's credit standards. First Interstate-California has
also established a Community Advancement Program
targeted at low-income or minority census tracts. By
offering a down payment requirement of 5 percent for
any qualified borrower, this program is designed to
encourage individuals who do not fit the low- or
moderate-income profile, but who still cannot meet the
usual 10 to 20 percent down payment requirement, to
invest in homes in low-income census tracts. Each of
these three programs offers favorable financing terms
and flexible underwriting criteria.16 The bank also
participates in government-insured and publicly sponsored programs, including Federal Housing Administration mortgage loans, California guaranteed business
loans, Small Business Administration ("SBA") loans,
and federally insured and state guaranteed student
loans.
In responding to Protestant's allegations regarding
mortgage lending in the San Diego MSA, First Interstate-California notes that historically it has not emphasized home mortgage lending in this area, but that
it has assisted in meeting the housing needs of low- and
moderate-income residents in this area. For example,
First Interstate-California committed $7.8 million in
construction and permanent financing for a 53 unit
single-family residential housing project located in a
predominately minority, low- and moderate-income
area of San Diego. In addition, the bank has supported
the California Community Reinvestment Corporation
in financing the construction of a rent-controlled single
room occupancy housing project in San Diego, and
provided construction financing for two other low- to
moderate-income housing projects in the area.17
First Interstate has committed to take a variety of
steps to increase the number of housing-related loans
made to minority and low- and moderate-income areas
in San Diego. For example, First Interstate has committed to establish a loan production office ("LPO") in
an area identified as underserved by financial institutions by the City-County Reinvestment Task Force of
San Diego. This LPO will primarily service housingrelated loans. First Interstate has also committed to
hire a full-time CRA officer for the San Diego area,
who will coordinate housing-related lending efforts
with residential real estate lending officers and a
residential sales support manager. First InterstateCalifornia will financially support the establishment of
a proposed Neighborhood Bank to be located in south-
16. These programs offer reduced closing costs and higher debt/
income ratio requirements.
17. First Interstate-California also provided a $1.5 million letter of
credit for bonds used to construct low- to moderate-income housing in
San Diego County.
Legal Developments
east San Diego, and if these efforts are unsuccessful,
First Interstate-California will initiate the process of
establishing a branch in this area by the end of 1995.
First Interstate-California is also enhancing its mortgage processing systems in order to introduce new
mortgage programs such as the Mortgage Credit Certificate program and the related Shared Equity Program offered though the San Diego Housing Commission. Finally, First Interstate will allocate a portion of
its $2 billion/10 year statewide loan commitment to
low- and moderate-income communities to the San
Diego Trust branches acquired in this proposal.18
In 1992, First Interstate-California established a
centralized Small Business Loan Center to provide
small businesses with access to a variety of credit
products and loan programs. First InterstateCalifornia also participates in loan programs sponsored by the SB A, and made loans totalling approximately $8.8 million under the SB A section 504
program in 1991. In 1991, the bank also extended loans
totalling approximately $1 million in a special SB A
program designed to finance the export of products by
California businesses.
First Interstate-California expects to significantly
increase its small business lending through government-sponsored lending programs such as those offered by the Small Business Administration
("SBA"), including the SBA 7(a) and SBA 504
programs. In this regard, the bank will hire a Small
Business Government Guaranteed Loan Officer for
the San Diego area and is developing expedited
approval procedures for small business loans.19 The
bank recently introduced a small business line of
credit for amounts under $50,000 and is instituting a
"second review" process for small business loan
applicants in low- and moderate-income areas. First
Interstate also maintains that it assists in meeting the
consumer credit needs of low- and moderate-income
and minority residents in San Diego. 20
18. First Interstate has committed to report its progress in the San
Diego area to the City-County Reinvestment Task Force semiannually.
19. The San Diego small business loan department will have lending
authority for up to $20 million. First Interstate-California will also
support the Bankers Small Business Community Development Corporation, an organization designed to meet the credit needs of small
businesses, particularly businesses owned by women and minorities.
20. First Interstate-California made approximately $80 million in
consumer loans (personal, home equity and credit card loans) in 1992
in the San Diego area. In census tracts where the majority of residents
are minorities, First Interstate represents that it extended $1 in
consumer credit for every $1.25 received in deposits compared to $1
in consumer credit for every $1.64 received in deposits in nonminority census tracts. First Interstate also maintains that this ratio of
loans made to deposits received in low- and moderate-income census
tracts was comparable to that ratio for upper income census tracts.
355
Ascertainment and Outreach. First InterstateCalifornia ascertains credit needs in a variety of ways,
including calling programs and meetings with civic and
community groups. In addition, a CRA Task Force
regularly reviews data compiled from semiannual
Community Reinvestment Act Questionnaires completed by branch managers.
First Interstate-California's marketing programs are
designed to ensure that all segments of the community,
including low- and moderate-income areas, are informed of the bank's products and services. In San
Diego, branch managers conduct extensive calling
programs that are reviewed by the district manager.21
In addition, the bank conducts meetings with a variety
of civic and community groups. First InterstateCalifornia's marketing plans for the San Diego area
will also include the use of both English and Spanish
language media. Ascertainment and outreach efforts
are also coordinated through a full-time CRA officer in
San Diego after the acquisition with the assistance of
the residential sales support manager and the small
business loan officer.
HMDA Data Reporting. The 1992 examination
found a significant number of errors in the HMDA data
filed by First Interstate-California for 1991. The Board
believes that all banks have an important legal responsibility to ensure that data filed under the HMDA is
accurate at the time it is reported. The Board notes
that First Interstate-California has initiated a number
of corrective measures to improve the accuracy of
these data and the Board expects First Interstate fully
implement these steps as soon as possible. In this
regard, the Federal Reserve Bank of San Francisco
will actively monitor the bank's implementation of its
corrective measures and test for improved accuracy in
the data. The Board will also review the bank's
progress in addressing these weaknesses in future
applications by First Interstate, and will consider
insufficient progress to be an adverse factor in these
applications.
D. Conclusions Regarding Convenience and Needs
Factor
On the basis of all the facts of record, including the
information provided by the commenters and First
Interstate, relevant reports of examination, and the
information and commitments referenced in the First
Interstate Orders, the Board concludes that the convenience and needs considerations, including the records of performance of the CRA of First Interstate21. First Interstate estimates that the San Diego branch managers
made 1348 CRA-related calls during the six-month reporting period in
1993.
356
Federal Reserve Bulletin • April 1994
California and San Diego Trust, are consistent with
approval of these applications. The Board expects
First Interstate to implement all commitments made in
connection with this proposal, including its proposed
CRA initiatives for the San Diego area, and to comply
with all the conditions and commitments discussed in
the First Interstate Orders. First Interstate must also
comply with all requests made by the Reserve Bank in
connection with its monitoring of First Interstate's
corrective program for HMDA data reporting.
Other Considerations
The financial and managerial resources and future
prospects of First Interstate, San Diego Financial, and
their respective subsidiaries and the other supervisory
factors the Board must consider under section 3 of the
Bank Holding Company Act and under the Bank
Merger Act, are consistent with approval of this proposal. In addition, the Board finds that the factors it is
required to consider under the Federal Reserve Act
also are consistent with approval.
First Interstate also has applied, pursuant to section
4 of the BHC Act, to acquire the nonbanking subsidiaries of San Diego that engage in the sale of creditrelated insurance in connection with extensions of
credit by affiliated banks, and discount brokerage
activities. The Board previously has determined that
these activities are permissible for bank holding companies under section 4(c)(8) of the BHC Act and the
Board's Regulation Y, 22 and First Interstate proposes
to conduct these activities in accordance with the
Board's regulations. The record in this case indicates
that there are numerous providers of these nonbanking
services, and there is no evidence in the record to
indicate that consummation of this proposal is 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 that would outweigh the public benefits of
this proposal. Accordingly, the Board has determined
that the balance of public interest factors it must
consider under section 4(c)(8) of the BHC Act are
favorable and consistent with approval of First Interstate's application to acquire San Diego Trust's nonbanking subsidiaries.
Based on the foregoing and all the facts of record,
the Board has determined that the applications should
be, and hereby are, approved.23 The Board's approval
22. See 12 C.F.R. 225.25(b)(8)® and (15).
23. A protestant has requested a public hearing or meeting on the
issues it raised. Section 3(b) of the BHC Act does not require the
Board to hold a hearing or meeting on an application unless the
appropriate supervisory authority of the bank to be acquired makes a
of this proposal is specifically conditioned on First
Interstate's compliance with all the commitments
made in connection with these applications and the
conditions discussed in this order and in the First
Interstate Orders, including First Interstate's compliance with the Reserve Bank's monitoring program for
its HMDA reporting. This approval is further subject
to First Interstate obtaining the approval of the California Superintendent of Bank for the proposed transaction under applicable state law. The Board's determination also is subject to all the conditions set forth in
Regulation Y, including those in sections 225.4(d) and
225.23(b)(3), and to the Board's authority to require
modification or termination of the activities of a bank
holding company or any of its subsidiaries as the
Board finds necessary to assure compliance with, and
to prevent evasion of, the provisions and purposes of
the BHC Act and the Board's regulations and orders
issued thereunder. For purposes of this transaction,
the commitments and conditions relied on by the
Board in reaching this decision are both deemed to be
conditions imposed in writing by the Board in connection with its findings and decision, and as such, may be
enforced in proceedings under applicable law.
The acquisition and merger of the subsidiary bank
shall not be consummated before the thirtieth calendar
day following the effective date of this order, and the
acquisition of the banks and nonbanking companies
shall not be consummated later than three months
after the effective date of this order, unless such period
is extended for good cause by the Board or by the
Federal Reserve Bank of San Francisco, acting pursuant to delegated authority.
By order of the Board of Governors, effective
February 16, 1994.
Voting for this action: Chairman Greenspan and Governors
Kelley, Lindsey, and Phillips. Absent and not voting: Governor La Ware.
JENNIFER J. JOHNSON
Associate Secretary of the Board
timely written recommendation of denial of the application. In this
case, the Board has not received such a recommendation.
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 C.F.R. 262.3(e) and 262.25(d). The
Board has carefully considered this request. In the Board's view, the
protestant has had ample opportunity to present written submissions,
and the protestant has submitted substantial written comments that
have been considered by the Board. In light of these facts, and the
Board's decision on this application, the Board has determined that a
public hearing or meeting is not necessary to clarify the factual record
in this application, or otherwise warranted in this case. Accordingly,
the protestant's request for a public hearing or meeting on this
application is denied.
Legal Developments
357
ACTIONS TAKEN UNDER THE FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF
1991
By the Director of the Division of Banking Supervision and Regulation and the General Counsel of
the Board
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.
Bank Holding Company
Carolina First Corporation,
Greenville, South Carolina
Acquired
Thrift
Bay Savings Bank,
F.S.B.,
Newport News,
Virginia
Acquiring
Bank(s)
Carolina First Bank,
Greenville, South
Carolina
Approval
Date
February 18, 1994
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 3
Applicant(s)
First Commercial Corporation,
Little Rock, Arkansas
Union Planters Corporation,
Memphis, Tennessee
Bank(s)
State First Financial Corporation,
Texarkana, Arkansas
First National Bank of Ashdown,
Ashdown, Arkansas
Atlanta National Bank,
Atlanta, Texas
Tennessee Bancorp, Inc.,
Columbia, Tennessee
Tennessee National Bank,
Columbia, Tennessee
Effective
Date
February 8, 1994
February 18, 1994
Section 4
Applicant(s)
First Bank System, Inc.,
Minneapolis, Minnesota
Bank(s)
FBS Information Services Corporation,
St. Paul, Minnesota
Effective
Date
February 24, 1994
358
Federal Reserve Bulletin • April 1994
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)
Bradford Bankshares, Inc.,
Starke, Florida
Central National Bank
Corporation,
Winter Park, Florida
Comerica Incorporated,
Detroit, Michigan
Comerica California
Incorporated,
San Jose, California
Community First Financial
Group, Inc.,
English, Indiana
Community Banks of Kansas,
Inc.,
Prairie Village, Kansas
D/W Bankshares, Inc.,
Dalton, Georgia
Employees' Stock Ownership
Plan of Hoosier Hills Financial
Corporation,
Osgood, Indiana
First Brownstown Bancorp, Inc.,
Brownstown, Illinois
First Missouri Bancshares, Inc.,
Brookfield, Missouri
First Virginia Banks, Inc.,
Falls Church, Virginia
Fourth Financial Corporation,
Wichita, Kansas
Bank(s)
Reserve
Bank
Effective
Date
CNB, Inc.,
Lake City, Florida
First Mercantile National
Bank,
Long wood, Florida
Pacific Western
Bancshares, Inc.,
San Jose, California
Atlanta
February 15, 1994
Atlanta
February 18, 1994
Chicago
February 14, 1994
Peoples Trust Bank
Company,
Cory don, Indiana
First Kansas Holding
Company,
Junction City, Kansas
Chapman Bancshares,
Inc.,
Chapman, Kansas
Dalton/Whitfield Bank &
Trust,
Dalton, Georgia
Hoosier Hills Financial
Corporation,
Osgood, Indiana
St. Louis
February 18, 1994
Kansas City
February 17, 1994
Atlanta
February 16, 1994
Chicago
February 17, 1994
St. Louis
February 18, 1994
Kansas City
February 23, 1994
Richmond
February 18, 1994
Kansas City
February 9, 1994
First National Bank of
Brownstown,
Brownstown, Illinois
First Missouri Federal
Savings and Loan
Association,
Brookfield, Missouri
First Missouri National
Bank,
Brookfield, Missouri
FNB Financial
Corporation,
Knoxville, Tennessee
Bank IV Missouri, N.A.,
Springfield, Missouri
Legal Developments
359
Section 3—Continued
Applicant(s)
Independent Bank Corporation,
Ionia, Michigan
Leader First Bancorp, Inc.,
Mariow, Oklahoma
Lincolnland Bancshares, Inc.,
Casey, Illinois
Mission-Heights Management
Company, Ltd.,
Houston, Texas
Murphy-Wall Bancorp,
Pinckneyville, Illinois
Synovus Financial Corp.,
Columbus, Georgia
TB&C Bancshares, Inc.,
Columbus, Georgia
Reserve
Bank
Bank(s)
KSB Financial, Inc.,
Kingston, Michigan
First National Bank in
Mario w,
Marlow, Oklahoma
Westfield State Bank,
Westfield, Illinois
Independent Bancorp,
Inc.,
Channel view, Texas
Murphy-Wall State Bank
& Trust Co.,
Pinckneyville, Illinois
PNB Bankshares, Inc.,
Peachtree City, Georgia
Effective
Date
Chicago
February 1, 1994
Kansas City
February 18, 1994
Chicago
February 9, 1994
Dallas
February 24, 1994
St. Louis
February 18, 1994
Atlanta
February 22, 1994
Section 4
Applicant(s)
Mahaska Investment Company,
Oskaloosa, Iowa
National Commerce
Bancorporation,
Memphis, Tennessee
Norwest Corporation,
Minneapolis, Minnesota
Norwest Financial Services, Inc.,
Des Moines, Iowa
Norwest Financial, Inc.,
Des Moines, Iowa
Wachovia Corporation,
Winston-Salem, North Carolina
Woodforest Bancshares, Inc.,
Houston, Texas
Nonbanking
Activity/Company
Mahaska State Bank,
Oskaloosa, Iowa
Brooks, Montague &
Associates, Inc.,
Chattanooga,
Tennessee
Allied Business Systems,
Inc.,
Macon, Georgia
Southeast Switch, Inc.,
Maitland, Florida
to engage de novo in tax
planning and
preparation services for
individuals and small
businesses
Reserve
Bank
Effective
Date
Chicago
February 4, 1994
St. Louis
February 1, 1994
Minneapolis
February 23, 1994
Richmond
February 1, 1994
Dallas
February 11, 1994
360
Federal Reserve Bulletin • April 1994
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.
DLG Financial Corp. v. Board of Governors, No.
94-10078 (5th Cir., filed January 20, 1994). Appeal
of district court dismissal of appellants' action to
enjoin the Board and the Federal Reserve Bank of
Dallas from taking certain enforcement actions, and
for money damages on a variety of tort and contract
theories.
Board of Governors v. DLG Financial Corp., Nos.
93-2944 and 94-20013 (5th Cir., filed December 14,
1993 and December 31, 1993). Appeal of a temporary restraining order and a preliminary injunction
obtained by the Board freezing assets of a corporation and an individual pending administrative adjudication of civil money penalty assessments by the
Board.
Board of Governors v. Oppegard, No. 93-3706 (8th
Cir., filed November 1, 1993). Appeal of district
court order ordering appellant Oppegard to comply
with prior order requiring compliance with Board
removal, prohibition, and civil money penalty order.
The Board's brief was filed on January 20, 1994.
Scott v. Board of Governors, No. 930905843CV (Dist.
Ct., Salt Lake County, Utah, filed October 8, 1993).
Action against Board and others for damages and
injunctive relief for alleged constitutional and statutory violations caused by issuance of Federal Reserve notes.
Richardson v. Board of Governors, et al., No. 93-C
836A (D. Utah, filed August 30, 1993). Action
against Board and others for damages and injunctive
relief for alleged constitutional and statutory violations caused by issuance of Federal Reserve notes.
On December 16, 1993, the District Court granted
the Board's motion to dismiss. On January 14, 1994,
plaintiff filed a notice of appeal.
First National Bank ofBellaire v. Board of Governors,
No. H-93-1708 (S.D. Texas, filed June 8, 1993).
Action to enjoin possible enforcement actions by
Board of Governors and other bank regulatory agencies. On September 23, 1993, the agencies filed a
motion to dismiss.
Kubany v. Board of Governors, et al., No. 93-1428 (D.
D.C., filed July 9, 1993). Action challenging Board
determination under the Freedom of Information
Act. The Board's motion to dismiss was filed on
October 15, 1993.
Bennett v. Greenspan, No. 93-1813 (D. D.C., filed
April 20, 1993). Employment discrimination action.
Amann v. Prudential Home Mortgage Co., et al., No.
93-10320 WD (D. Massachusetts, filed February 12,
1993). Action for fraud and breach of contract
arising out of a home mortgage. On April 17, 1993,
the Board filed a motion to dismiss.
Adams v. Greenspan, No. 93-0167 (D. D.C., filed
January 27,1993). Action by former employee under
the Civil Rights Act of 1964 and the Rehabilitation
Act of 1973 concerning termination of employment.
The Board's motion for partial summary judgment
was filed on January 4, 1994.
CBC, Inc. v. Board of Governors, No. 92-9572 (10th
Cir., filed December 2, 1992). Petition for review of
civil money penalty assessment against a bank holding company and three of its officers and directors
for failure to comply with reporting requirements.
Petition for review denied November 30, 1993.
Zemel v. Board of Governors, No. 92-1056 (D. D.C.,
filed May 4, 1992). Age Discrimination in Employment Act case. The parties' cross-motions for summary judgment are pending.
Board of Governors v. Ghaith R. Pharaon, No. 91CIV-6250 (S.D. New 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, 1991,
the court issued an order temporarily restraining the
transfer or disposition of the individual's assets.
FINAL ENFORCEMENT DECISION ISSUED BY THE
BOARD OF GOVERNORS
In the Matter of
Bruno Zbinden
An Institution-Affiliated Party of
Swiss Bank Corporation
New York, New York
and
Swiss Volksbank
New York, New York
Docket No. 93-023-E-I
Determination on Request for Private Hearing
Legal Developments
Background
This is an enforcement proceeding brought by the
Board of Governors of the Federal Reserve System
(the "Board") against Bruno Zbinden (the "Respondent"), pursuant to the Federal Deposit Insurance Act
("FDI Act"). Respondent is a former Manager of the
New York branch of Swiss Bank Corporation, Basle,
Switzerland ("SBC"). Respondent later became Assistant Treasurer of the New York branch of Swiss
Volksbank, Berne, Switzerland ("Volksbank").
In April, 1993, the Board initiated this action by
serving upon Respondent a "Notice of Intention to
Remove from Office and of Prohibition Issued Pursuant to Section 8(e) of the Federal Deposit Insurance
Act, as Amended, and Notice of Charges and of
Hearing Pursuant to Section 8(b) of the Federal Deposit Insurance Act, as Amended" (the "Notice").
The Notice alleges that in connection with his position
as an officer and employee of SBC, Respondent engaged in unsafe and unsound banking practices and
also engaged in conduct that breached his fiduciary
duty to SBC. The Notice further alleges that by reason
of these practices and breaches, Respondent received
financial gain at the expense of SBC, which suffered
financial loss.
The purpose of this proceeding is to determine
whether an appropriate order should be issued pursuant to Sections 8(b) and 8(e) of the FDI Act that would:
(1) Remove Respondent from his position at Volksbank and permanently prohibit him from participating in the affairs of any insured depository institution or other entity specified in Section 8(e)(7)(A) of
the FDI Act; and
(2) Require Respondent to cease and desist from the
unsafe and unsound banking practices and breaches
of fiduciary duty and take affirmative actions to
correct the conditions resulting from those practices
and breaches, including making restitution or providing reimbursement to SBC.
In 1990, the FDI Act was amended to provide that
all hearings held on the record in such cases "shall be
open to the public, unless the agency, in its discretion,
determines that holding an open hearing would be
contrary to the public interest."1 The FDI Act also
directs the Board to prepare a transcript of each
hearing, including all testimony and documentary evidence, which must be made available to the public
pursuant to the Freedom of Information Act (the
"FOIA").2 Accordingly, the Notice issued by the
1. 12 U.S.C. § 1818(u)(2). The Board's rule implementing this
provision is located at 12 C.F.R. 263.33.
2. See 12 U.S.C. § 1818(u)(4).
361
Board advised Respondent that any hearing held in
this matter would be public, unless the Board determines that an open hearing would be contrary to the
public interest. The Notice also informed Respondent
that he could submit a statement detailing any reasons
why the hearing should not be public.
Subsequently, Respondent did request that the hearing in this matter be private, that the Notice, as well as
all other documents and proceedings in this matter,
not be published and that they be maintained in
confidence. The primary reason cited by Respondent
is the purported effect that public disclosure would
have on Respondent's privacy and employment prospects. Respondent contends that disclosure of this
matter will cause irreparable harm to his reputation
and career, making it impossible for him to obtain
future employment even if the matters alleged in the
Notice are ultimately resolved in his favor. Respondent also expressed the view that granting his request
for confidentiality will facilitate a quicker resolution of
the matter without the need for a protracted hearing.
Board Enforcement Counsel opposes Respondent's
request, and asserts that even though Respondent has
asserted a potential harm to his personal interests,
Respondent has failed to cite any public interest reasons to justify a private hearing. Board Enforcement
Counsel also disputes Respondent's claim that a private hearing will facilitate the settlement process, and
notes that a settlement will, in any event, result in a
final order that must be published pursuant to
12 U.S.C. § 1818(u)(l)(B).
Discussion
In this case, the Board is unable to find that an open
hearing is contrary to the public interest. Enforcement
proceedings, by their nature, involve allegations that,
if made public, could adversely affect a respondent's
reputation or career. Nevertheless, in establishing a
statutory presumption in favor of open hearings, Congress implicitly determined that the public benefit from
conducting proceedings in the open outweighs the
privacy interests of the individuals involved. Congress
underscored this presumption in favor of public hearings by requiring that a written report be filed with
Congress in each instance where a decision is made to
conduct a private hearing.3
Respondent essentially focuses on the impact that a
public hearing will have on him as an individual. The
Board does not believe that the disruptions cited by
Respondent, which are a normal consequence of such
proceedings, are sufficient to overcome the statutory
3. See 12 U.S.C. § 1818(u)(3).
362
Federal Reserve Bulletin • April 1994
presumption favoring public hearings. There has been
no showing by Respondent concerning any potential
harm to others or to the public generally, nor does the
record reflect any such dangers.
Respondent contends that by keeping this matter
confidential, the Board will facilitate a resolution of
the case without the need for protracted proceedings.
Respondent's assertion is not sufficient in this case to
overcome the statutory presumption favoring open
hearings. Because this case has remained confidential
since the Notice was issued in April, 1993, there has
already been ample opportunity for the parties to
resolve this matter. Nevertheless, it appears that the
parties have not reached any agreement that would
eliminate the need for a hearing. The Board finds that
continued confidentiality is unlikely to facilitate a
resolution of the case prior to the hearing, which is
scheduled to commence within a few weeks. 4
Respondent also suggests that, even if there is no
settlement and a hearing is necessary, a private proceeding is likely to be resolved more efficiently than a
public hearing. That argument could be used to justify a
private hearing in most enforcement cases, a result that
would not be consistent with the intent of the statute.
In sum, because Respondent has not shown that an
open hearing is contrary to the public interest, as
distinguished from Respondent's own personal interests, and the record does not reflect any substantial
public interests to support Respondent's request, the
request for a private hearing in this matter must be
denied.
Respondent also requests that the Notice and all
other documents related to this proceeding be kept
confidential. Respondent states that disclosure of the
documents would constitute an invasion of his personal privacy and he contends that the entire record of
this proceeding is, therefore, exempt from the FDI
Act's public disclosure requirement. For the reasons
stated below, Respondent's request to keep the entire
record confidential must be denied.
Respondent's claim, that his general interest in privacy warrants confidentiality for the complete record of
this proceeding, is inconsistent with the language and
intent of the FDI Act, which creates a presumption in
favor of public hearings and expressly provides that all
testimony and documentary evidence shall be made
available to the public pursuant to the Freedom of
Information Act. Consequently, the FDI Act substan-
4. The record presently before the Board does not reflect whether
keeping this matter confidential during the past few months has been
beneficial to the parties' attempts to settle the case. Because the Board
now decides that the hearing scheduled to commence on February 28,
1994, will be open to the public and there is no further need for
confidentiality, this Order will be published.
tially limits any expectations of privacy that Respondent might have concerning this proceeding. As a
practical matter, however, in order to keep all documents concerning this matter confidential it would also
be necessary to close the hearing and for the reasons
explained above, the Board has determined that a
private hearing is not warranted in this case.
The FDI Act does provide that the Board may file a
particular document or part of a document under seal in
any enforcement hearing, "if disclosure of the document would be contrary to the public interest."5 Pursuant to the Board's Rules of Practice for Hearings, this
authority has been delegated to Board Enforcement
Counsel, who has the discretion to determine which
documents, if any, should be filed under seal.6 Under
the Board's Rules, the presiding administrative law
judge is also directed to close portions of the hearing, if
necessary, in order to preserve the confidentiality of
any documents that are filed under seal.7
Where a document contains information that would
not normally be disclosed to the public, such as in the
case of bank examination reports or other privileged
information, filing the document under seal may indeed be appropriate to protect the public interest.8 As
the language of the FDI Act suggests, however, that
decision should be made with respect to specific
documents rather than an entire enforcement proceeding, as Respondent seeks in this case. 9
Respondent further claims that the Freedom of
Information Act exempts the entire record of this
proceeding from public disclosure. The fact that a
document is exempt from disclosure under the Freedom of Information Act does not mandate that it be
withheld from the public or filed under seal in an
enforcement proceeding. Under that Act, an agency
may use its discretion to disclose exempt materials,
provided that disclosure is not otherwise prohibited by
law.10 Thus, in order to implement the FDI Act's
policy favoring public disclosure, Enforcement Counsel or the Board may decide to include as part of the
public record of an enforcement case, documents that
are exempt from disclosure under the Freedom of
Information Act.
5. 12 U.S.C. § 1818(u)(6) (emphasis added).
6. See 12 C.F.R. 263.33(b).
7. Id. Accordingly, a document that is filed under seal would not be
available as part of a hearing transcript that is made available to the
public under the Freedom of Information Act. See 12 U.S.C.
§ 1818(u)(4). Enforcement Counsel's decision to file a document under
seal in connection with the hearing does not, however, foreclose the
Board from making a subsequent determination to publicly disclose
the document.
8. See 5 U.S.C. § 552(b).
9. Although Respondent asserts a general privacy interest in keeping the entire record under seal, he has not provided a rationale for
maintaining the confidentiality of any particular document.
10. See e.g., Chrysler Corp. v. Brown, 441 U.S. 281, 292-94 (1979).
Legal Developments
Respondent's request to keep the entire record in
this proceeding confidential is, therefore, denied. As
provided in the Board's Rules, Board Enforcement
Counsel has been delegated the authority to determine
which documents, if any, should be filed under seal in
this case. Accordingly, Respondent may address any
concerns he has regarding specific documents to the
Board's Enforcement Counsel.
By Order of the Board of Governors, this ninth day
of February, 1994.
Board of Governors of the
Federal Reserve System
363
Federal Reserve Bank of Cleveland, the Superintendent of Banks for the State of Ohio, and The Citizens
Savings Bank Company, Pemberville, Ohio.
Merchants Bancshares, Inc.
Burlington, Vermont
The Federal Reserve Board announced on February 28, 1994, the execution of a Written Agreement
between the Federal Reserve Bank of Boston and
Merchants Bancshares, Inc., Burlington, Vermont.
WILLIAM W . WILES
Secretary of the Board
WRITTEN AGREEMENTS APPROVED BY FEDERAL
RESERVE BANKS
The Citizens Savings Bank Company
Pemberville, Ohio
The Federal Reserve Board announced on February 8,
1994, the execution of a Written Agreement among the
PT Bank Niaga
Jakarta, Indonesia
The Federal Reserve Board announced on February 10, 1994, the execution of an Amendment to the
Written Agreement, dated January 8, 1993, involving
the Federal Reserve Bank of San Francisco, the PT
Bank Niaga, Jakarta, Indonesia and its Los Angeles
Agency.
A1
Financial and Business Statistics
WEEKLY REPORTING COMMERCIAL BANKS
CONTENTS
A3
Guide to Tabular
Domestic
Financial
Presentation
Statistics
Assets and liabilities
A22 Large reporting banks
A24 Branches and agencies of foreign banks
MONEY STOCK AND BANK CREDIT
FINANCIAL MARKETS
A4
A25 Commercial paper and bankers dollar
acceptances outstanding
A25 Prime rate charged by banks on short-term
business loans
A26 Interest rates—money and capital markets
A27 Stock market—Selected statistics
A5
A6
A7
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
FEDERAL FINANCE
POLICY INSTRUMENTS
A8 Federal Reserve Bank interest rates
A9 Reserve requirements of depository institutions
A10 Federal Reserve open market transactions
FEDERAL RESERVE BANKS
A l l Condition and Federal Reserve note statements
A12 Maturity distribution of loan and security
holdings
A28
A29
A30
A30
Federal fiscal and financing operations
U.S. budget receipts and outlays
Federal debt subject to statutory limitation
Gross public debt of U.S. Treasury—Types
and ownership
A31 U.S. government securities
dealers—Transactions
A32 U.S. government securities dealers—Positions
and financing
A33 Federal and federally sponsored credit
agencies—Debt outstanding
MONETARY AND CREDIT AGGREGATES
A13 Aggregate reserves of depository institutions
and monetary base
A14 Money stock, liquid assets, and debt measures
A16 Deposit interest rates and amounts outstanding—
commercial and BIF-insured banks
A17 Bank debits and deposit turnover
A18 Loans and securities—All commercial banks
COMMERCIAL BANKING INSTITUTIONS
A19 Major nondeposit funds
A20 Assets and liabilities, Wednesday figures
SECURITIES MARKETS AND
CORPORATE FINANCE
A34 New security issues—Tax-exempt state and local
governments and corporations
A35 Open-end investment companies—Net sales
and assets
A35 Corporate profits and their distribution
A35 Nonfarm business expenditures on new
plant and equipment
A36 Domestic finance companies—Assets and
liabilities, and consumer, real estate, and business
credit
2
Federal Reserve Bulletin • April 1994
Domestic Financial
Statistics—Continued
REAL ESTATE
A37 Mortgage markets
A3 8 Mortgage debt outstanding
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
CONSUMER INSTALLMENT CREDIT
REPORTED BY BANKS
IN THE UNITED STATES
A39 Total outstanding
A39 Terms
A57
A58
A60
A61
FLOW OF FUNDS
A40
A42
A43
A44
Funds raised in U.S. credit markets
Summary of financial transactions
Summary of credit market debt outstanding
Summary of financial assets and liabilities
Domestic Nonfinancial
Statistics
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 BYNONBANKING BUSINESS
ENTERPRISES IN THE UNITED STATES
SELECTED MEASURES
A45 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
A63 Liabilities to unaffiliated foreigners
A64 Claims on unaffiliated foreigners
SECURITIES HOLDINGS AND TRANSACTIONS
A65 Foreign transactions in securities
A66 Marketable U.S. Treasury bonds and
notes—Foreign transactions
INTEREST AND EXCHANGE RATES
International
Statistics
SUMMARY STATISTICS
A67 Discount rates of foreign central banks
A67 Foreign short-term interest rates
A68 Foreign exchange rates
A53 U.S. international transactions—Summary
A54 U.S. foreign trade
A69 Guide to Statistical Releases
Special Tables
and
A3
Guide to Tabular Presentation
SYMBOLS AND
c
e
n.a.
n.e.c.
p
r
ABBREVIATIONS
ATS
BIF
CD
CMO
FFB
FHA
FHLBB
FHLMC
FmHA
FNMA
FSLIC
G-7
Corrected
Estimated
Not available
Not elsewhere classified
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
Bank insurance fund
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
GENERAL
G-10
GNMA
GDP
HUD
Group of Ten
Government National Mortgage Association
Gross domestic product
Department of Housing and Urban
Development
International Monetary Fund
Interest only
Individuals, partnerships, and corporations
Individual retirement account
Money market deposit account
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 Industrial Classification
Standard metropolitan statistical area
Department of Veterans Affairs
INFORMATION
*
0
In many of the tables, components do not sum 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
IMF
IO
IPCs
IRA
MMDA
NOW
OCD
OPEC
OTS
PO
REIT
REMIC
RP
RTC
SAIF
SCO
SDR
SIC
SMSA
VA
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 1994
1.10
RESERVES, M O N E Y STOCK, LIQUID ASSETS, A N D DEBT M E A S U R E S
Percent annual rate of change, seasonally adjusted1
1993R
1993R
1994
Monetary or credit aggregate
1
2
3
4
Reserves of depository institutions2
Total
Required
Nonborrowed
Monetary base3
Concepts of money, liquid assets, and debt4
5 Ml
6 M2
7 M3
8 L
9 Debt
10
11
Nontrqnsaction components
In M2
In M3 only6
Sept.
Oct.
Nov.
Dec.
Jan.
Q2
Q3
Q4
9.3
8.7
9.5
9.5
10.8
12.4
10.6
10.2
12.4
12.3
10.9
10.6
14.6
14.6
16.0
9.9
16.6
14.0
15.2
11.9
20.0
20.4
23.1
10.6
12.8
12.9
16.9
8.5
1.5
2.3
1.7
5.5
.4
-7.4
.5
11.4
8.3
-1.3
-3.2
-1.7
4.0
10.7
2.2
2.1
3.1
4.5
12.0
2.6
1.1
.9
5.7
9.4
2.1
2.4
1.7
5.2
10.7
2.8
2.7
-1.7
5.3
9.0
.6
1.7
1.8
3.5
9.7
3.9
3.7
2.7
6.1
6.5
2.4
3.4
5.4
7.6
5.4
2.2
1.1
n.a.
n.a.
-5.3
-12.9
-1.4
1.6
-1.5
-6.6
-1.2
3.9
-.7
1.5
-3.1
7.5
1.2
2.6
.4
9.1
.7
-5.4
3.0
-8.3
-18.1
5.1
-9.2
-.6
4.9
-10.6
-7.5
3.6
-7.4
4.0
-8.0
-5.2
.6
-7.6
6.1
6.2
-7.4
-8.2
4.4
-.2
-2.3
5.2
7.3
-7.7
9.1
-.3
QL
15
16
17
Time and savings deposits
Commercial banks
Savings, including MMDAs
Small time
Large time8'
Thrift institutions
Savings, including MMDAs
Small time
Large time8,
-.2
.7
2.3
-20.0
-14.2
-11.9
-8.5
-13.0
-4.5
-.4
-11.1
-6.9
-11.3
-1.9
.0
-11.0
-1.9
-2.5
-9.3
-3.8
2.0
-15.7
-34.0
.0
-8.0
3.9
18
19
Money market mutual funds
General purpose and broker-dealer
Institution-only
-7.8
-17.6
.2
-2.2
-1.8
-10.5
2.1
8.8
-1.7
4.4
-.7
22.0
10.4
3.1
7.2
13.6
-3.4
-26.2
7.6
2.7
10.4
2.4
9.1
4.4
5.6
5.0
7.1
4.6
-1.5
5.4
9.1
5.0
13.3
5.5
n.a.
n.a.
12
13
14
Debt components4
20 Federal
21 Nonfederal
1. Unless otherwise noted, rates of change are calculated from average
amounts outstanding during preceding month or quarter.
2. Figures incorporate adjustments for discontinuities, or "breaks," associated with regulatory changes in reserve requirements. (See also table 1.20.)
3. 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 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 U.S. 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 owed 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 (including MMDAs) and small time deposits (time deposits—including retail 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 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. 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) savings deposits (including MMDAs),
and (4) 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, U.S. government and foreign banks and official
institutions.
Money Stock and Bank Credit
1.11
A5
RESERVES OF DEPOSITORY INSTITUTIONS A N D RESERVE BANK CREDIT 1
Millions of dollars
Average of
daily figures
1993
Average of daily figures for week ending on date indicated
1994
1993
1994
Nov.
Dec.
Jan.
Dec. 15
Dec. 22
Dec. 29
Jan. 5
Jan. 12
Jan. 19
Jan. 26
1 Reserve Bank credit outstanding
U.S. government securities2
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
367,056
374,694
374,433
370,574
377,295
380,109"
381,190
372,716
373,899
371,042
326,769
2,535
332,413
4,060
332,463
2,429
333,227
0
332,605
6,231
331,751
8,725
332,602
8,415
333,022
1,487
332,673
1,577
332,094
0
4,732
206
0
4,706
265
0
4,510
267
0
4,719
0
0
4,719
100
0
4,685
803
0
4,588
851
0
4,522
186
0
4,522
186
0
4,497
0
0
19
72
0
722
32,001
22
30
0
829
32,369
86
14
0
1,963
32,702
21
37
0
671
31,897
30
30
0
866
32,714
24
21
0
1,027r
33,073
226
11
0
1,532
32,964
9
9
0
1,106
32,376
115
13
0
2,223
32,591
19
20
0
1,683
32,729
12 Gold stock
13 Special drawing rights certificate account .
14 Treasury currency outstanding
11,054
8,018
21,980r
11,054
8,018
22,060r
11,053
8,018
22,130
11,054
8,018
22,05 l r
11,054
8,018
22,067r
11,054
8,018
22,084r
11,053
8,018
22,101
11,053
8,018
22,116
11,053
8,018
22,130
11,053
8,018
22,145
356,710*
371
362,551r
375
362,849
401
360,544r
373
363,547r
373
366,042r
376
365,610
378
363,762
470
362,758
383
361,780
383
6,469
238
7,523
252
5,165
221
8,264
252
7,116
258
9,813
303
4,035
191
5,647
368
8,778
204
6,571
343
6,957
239
7,095
297
6,844
290
SUPPLYING RESERVE FUNDS
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
5,607
434
6,340
2%
6,630"
293
6,859
288
6,862
306
6,628
303
r
6,598
258
9,340
9,628
9,629
9,628
9,771
9,786
9,386
9,552
9,737
9,742
29,010
29,644r
27,834
28,598
29,2%
30,830"
29,957
28,697
28,815
24,237
Jan. 12
Jan. 19
Jan. 26
Wednesday figures
End-of-month figures
Nov.
Dec.
Jan.
Dec. 15
Dec. 22
Dec. 29
Jan. 5
372,593
384,226r
382,176
372,203
382,976
383,662r
377,743
370,834
385,967
375,519
326,804
8,013
332,015
12,187
331,995
8,657
334,522
0
331,236
11,675
332,903
11,418
334,304
3,310
332,913
0
332,301
7,790
334,706
0
4,719
429
0
4,638
1,025
0
4,437
519
0
4,719
0
0
4,719
359
0
4,638
885
0
4,522
639
0
4,522
0
0
4,522
859
0
4,437
0
0
16
40
0
1,290
31,282
84
10
0
909r
33,358
109
12
0
2,453
33,993
127
37
0
823
31,975
51
23
0
1,775
33,136
29
18
0
170"
33,602
1,225
8
0
1,440
32,296
3
11
0
942
32,444
19
17
0
7,450
33,010
9
19
0
3,504
32,843
11,054
8,018
22,017r
11,053
8,018
22,101r
11,053
8,018
22,160
11,054
8,018
22,05lr
11,054
8,018
22,067r
11,053
8,018
22,084r
11,054
8,018
22,101
11,053
8,018
22,116
11,053
8,018
22,130
11,053
8,018
22,145
359,732r
370
365,277r
377
360,919
378
361,406r
373
366,042r
376
367,226r
377
365,574
381
363,703
384
363,219
377
361,558
378
6,334
596
14,809
386
21,541
257
5,832
278
8,823
288
5,407
286
6,736
263
4,093
171
7,450
235
9,184
327
6,460
297
r
6,697
255
6,628
269
r
6,571
224
6,957
299
7,095
297
6,844
287
9,561
9,292
9,759
9,482
9,670
9,617
9,406
9,459
9,752
9,597
30,334
28,289"
23,602
28,778
32,017
35,060"
29,760
26,955
38,744
28,560
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding
U.S. government securities
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
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 Banks3
6,571
397
1. For amounts of cash held as reserves, see table 1.12.
2. Includes securities loaned—fully guaranteed by U.S. government securities
pledged with Federal Reserve Banks—and excludes securities sold and scheduled
to be bought back under matched sale-purchase transactions.
6,862
314
6,598
245
3. Excludes required clearing balances and adjustments to compensate for
float,
A6
DomesticNonfinancialStatistics • April 1994
1.12
RESERVES A N D BORROWINGS
Depository Institutions 1
Millions of dollars
Prorated monthly averages of biweekly averages
1994
1 Reserve balances with Reserve Banks2
2 Total vault cash3
3 Applied vault cash
4 Surplus vault cash
5 Total reserves6
6 Required reserves
i...
7 Excess reserve balances at Reserve Banks . . .
8 Total borrowings at Reserve Banks
9 Seasonal borrowings
10 Extended credit9
1991
1992
1993
Dec.
Reserve classification
Dec.
Dec.
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
26,659
32,509*
28,872r
3,637
55,532
54,553
979
192
38
1
25,368r
34,542
31,172
3,37c
56,540
55,385
1,155
124
18
1
29,374r
36,812
33,484
3,328r
62,858r
61,795r
l,063
82
31
0
26,562
34,536r
31,189
3,347
57,750
56,661
1,089
244
210
0
26,564
34,516
31,203
3,313
57,767
56,815
952
352
234
0
27,274
35,220*
31,863r
3,357
59,136
58,046
1,090
428
236
0
28,297
35,184
31,739
3,445
60,036
58,947
1,089
285
192
0
29,018
35,655
32,278r
3,377
61,2%
60,195
1,101
89
75
0
29,374r
36,812
33,484
3,328r
62,858r
61,795r
l,063
82
31
0
27,818
37,906
34,254
3,653
62,072
60,624
1,448
73
15
0
1993
Biweekly averages of daily figures for weeks ending on date indicated
1993
1994
Sept. 29
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks2
Total vault cash*
Applied vault cash ,
Surplus vault cash
Total reserves
Required reserves
Excess reserve balances at Reserve Banks . . .
Total borrowings at Reserve Banks8
Seasonal borrowings
Extended credit9
Oct. 13
Oct. 27
Nov. 10
Nov. 24
Dec. 8
Dec. 22
Jan. 5
Jan. 19
Feb. 2
26,837
35,159*
31,781
3,379*
58,618
57,318
1,300
321
247
0
27,843
35,806*
32,278
3,528*
60,121
58,985
1,137
420
222
0
28,798
34,313
30,946
3,368
59,744
58,692
1,052
205
189
0
28,017
36,217*
32,767
3,450*
60,784
59,722
1,062
132
105
0
29,742
34,894
31,566
3,328
61,308
60,205
1,102
74
68
0
28,999
36,494
33,125
3,369
62,124
60,962
1,162
56
43
0
28,950
37,202
33,821
3,381
62,771
61,880
891
59
34
0
30,367*
36,489
33,279
3,210
63,646*
62,405*
1,241*
142
16
0
28,745
38,241
34,691
3,550
63,435
61,759
1,676
74
11
0
25,675
38,107
34,151
3,957
59,826
58,557
1,269
45
18
0
1. Data in this table also appear in the Board's H.3 (502) weekly statistical
release. For ordering address, see inside front cover.
2. Excludes required clearing balances and adjustments to compensate for float
and includes other off-balance-sheet "as-of' 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. The maintenance period for weekly
reporters ends sixteen days after the lagged computation period during which the
vault cash is held. Before Nov. 25,1992, the maintenance period ended thirty days
after the lagged computation period.
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"
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. 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 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
1993, week ending Monday
1994, week ending Monday
Source and maturity
Dec. 6
Federal funds purchased, repurchase agreements, and
other selected borrowings
From commercial banks in the United States
1 For one day or under continuing contract
2 For all other maturities
From other depository institutions, foreign banks and
official institutions, and U.S. government agencies
3 For one day or under continuing contract
4 For all other maturities
5
6
7
8
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
Dec. 13
Dec. 20
Dec. 27
Jan. 3
Jan. 10
Jan. 17
Jan. 24
Jan. 31
75,691
14,280
76,163
15,005
72,673
14,583
68,417
16,880
71,013
14,689
72,206
13,159
69,412
13,339
69,901
14,008
68,093
13,283
16,875
24,839
17,942
25,404
17,699
26,238
16,918
26,977
15,197
22,670
14,680
21,054
15,997
20,203
22,299
19,423
18,438
17,826
18,896
39,409
17,411
41,429
15,779
39,933r
13,248
37,217r
18,065
33,334
18,506
34,745
17,572
33,997
18,277
32,358
16,634
32,764
32,719
13,246
31,242
14,431
r
29,603
14,644
r
26,422
22,013
30,785
17,948
30,371
15,758
30,158
16,372
31,539
16,307
33,268
16,856
44,822
28,140
42,230
26,980
43,399
26,438
39,727
22,123
47,233
26,497
44,243
24,657
42,538
26,425
46,578
28,110
46,844
28,735
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 customers2
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
1.14
DomesticNonfinancialStatistics • April 1994
FEDERAL RESERVE B A N K INTEREST RATES
Percent per year
Current and previous levels
Adjustment credit1
Federal Reserve
Bank
Seasonal credit2
Extended credit3
On
3/4/94
Effective date
Previous rate
On
3/4/94
Effective date
Previous rate
On
3/4/94
Effective date
Previous rate
3
7/2/92
7/2/92
7/2/92
7/6/92
7/2/92
7/2/92
3.5
3.45
3/3/94
3/3/94
3/3/94
3/3/94
3/3/94
3/3/94
3.30
3.95
3/3/94
3/3/94
3/3/94
3/3/94
3/3/94
3/3/94
3.80
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco . . .
7/2/92
7/7/92
7/2/92
7/2/92
7/2/92
7/2/92
3
3.5
3.45
3/3/94
3/3/94
3/3/94
3/3/94
3/3/94
3/3/94
3.30
Range of rates for adjustment credit in recent years
Effective date
In effect Dec. 31, 1977
1978—Jan.
May
July
Aug.
Sept.
Oct.
Nov.
9
20
11
12
3
10
21
22
16
20
1
3
Range (or
level)—
All F.R.
Banks
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
1979—July 20
Aug. 17
20
Sept. 19
21
Oct. 8
10
10
10-10.5
10.5
10.5-11
11
11-12
12
1980—Feb. 15
19
May 29
30
June 13
16
29
July 28
Sept. 26
Nov. 17
Dec. 5
12-13
13
12-13
12
11-12
11
10
10-11
11
12
12-13
F.R.
Bank
of
N.Y.
6
6.5
6.5
7
7
7.25
7.25
7.75
8
8.5
8.5
9.5
9.5
10
10.5
10.5
11
11
12
12
13
13
13
12
11
11
10
10
11
12
13
Effective
1981-—May
5
Nov. 7
6
Dec. 4
13-14
14
13-14
13
12
3.80
4
F.R.
Bank
of
N.Y.
Effective date
Range (or
level)—
All F.R.
Banks
F.R.
Bank
of
N.Y.
14
14
13
13
12
1986—Aug. 21
22
5.5-6
5.5
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
1982--July 70
-July
73
Aug. 7
3
16
77
30
Oct. 17
13
Nov. 77
76
Dec. 14
15
17
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
11.5
11.5
11
11
10.5
10
10
9.5
9.5
9
9
9
8.5
8.5
1984-—Apr. 9
—Apr.
13
Nov. 71
76
Dec. 74
8.5-9
9
8.5-9
8.5
8
9
9
8.5
8.5
8
1985-—May 70
—May
74
7.5-8
7.5
7.5
7.5
1986-—Mar. 7
10
Apr. 71
July 11
7-7.5
7
6.5-7
6
7
7
6.5
6
1. 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. 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. 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
3.95
3/3/94
3/3/94
3/3/94
3/3/94
3/3/94
3/3/94
6.5
6.5
1
4
30
2
13
17
6
7
20
24
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
2
7
3-3.5
3
3
3
3
3
1990—Dec. 19
1991—Feb.
Apr.
May
Sept.
Nov.
Dec.
1992—July
In effect Mar. 3, 1994
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 INSTITUTIONS1
Requirement
Type of deposit2
Percentage of
deposits
Net transaction accounts3
1 $0 million-$51.9 million 4
2 More than $51.9 million
Effective date
3
10
12/21/93
12/21/93
0
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 Act 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. 21, 1993, the exemption was raised from $3.8
million to $4.0 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. 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. However, money
market deposit accounts (MMDAs) and similar accounts subject to the rules that
12/27/90
0
12/27/90
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. 21,
1993, for institutions reporting quarterly and weekly, the amount was increased
from $46.8 million to $51.9 million.
4. The reserve requirement was reduced from 12 percent to 10 percent on
Apr. 2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for
institutions that report quarterly.
5. For institutions that report weekly, the reserve requirement on nonpersonal
time deposits with an original maturity of less than 1V2 years was reduced from 3
percent to \Vi 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 1 Vi 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.
6. The reserve requirement on Eurocurrency liabilities was reduced from 3
percent to zero in the same manner and on the same dates as was the reserve
requirement on nonpersonal time deposits with an original maturity of less than
IV2 years (see note 4).
A10
DomesticNonfinancialStatistics • April 1994
1.17 F E D E R A L R E S E R V E O P E N M A R K E T T R A N S A C T I O N S 1
Millions of dollars
1993
Type of transaction
and maturity
1991
1992
1993
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
U . S . TREASURY SECURITIES
22
23
24
Outright transactions (excluding matched
transactions)
Treasury bills
Gross purchases
Gross sales
Exchanges
Redemptions
Others within one year
Gross purchases
Gross sales
Maturity shifts
Exchanges
Redemptions
One to five years
Gross purchases
Gross sales
Maturity shifts
Exchanges
Five to ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges
More than ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges
All maturities
Gross purchases
Gross sales
Redemptions
25
26
Matched transactions
Gross sales
Gross purchases
27
28
Repurchase agreements
Gross purchases
Gross sales
29
Net change in U.S. Treasury securities
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
20,158
120
277,314
1,000
14,714
1,628
308,699
1,600
17,737
0
328,829
468
7,280
0
24,821
0
0
0
35,943
0
902
0
27,775
0
366
0
31,128
0
1,396
0
25,783
468
5,931
0
27,641
0
1,394
0
30,836
0
3,043
0
24,454
-28,090
1,000
1,096
0
36,662
-30,543
0
1,223
0
0
0
0
0
0
4,002
-2,152
0
0
0
0
0
0
100
0
1,497
-5,491
0
411
0
3,074
-1,861
0
0
0
913
-1,566
0
0
0
5,158
-7,641
0
189
0
2,910
-2,910
0
6,583
0
-21,211
24,594
13,118
0
-34,478
25,811
10,350
0
-27,140
0
0
0
-4,002
2,152
200
0
.666
0
1,100
0
-834
3,866
2,400
0
-3,074
1,861
0
0
-31
1,566
100
0
-4,689
5,341
2,619
0
-2,910
2,910
1,280
0
-2,037
2,894
2,818
0
-1,915
3,532
4,168
0
0
0
0
0
0
0
0
0
-666
0
500
0
-432
1,100
797
0
0
0
0
0
-882
0
0
0
-272
2,300
1,008
0
0
0
375
0
-1,209
600
2,333
0
-269
1,200
3,457
0
0
0
0
0
0
0
0
0
0
0
100
0
-231
525
717
0
0
0
0
0
0
0
0
0
-197
0
826
0
0
0
31,439
120
1,000
34,079
1,628
1,600
36,935
0
468
7,280
0
0
200
0
0
2,702
0
0
4,691
0
0
1,396
0
468
6,031
0
0
6,035
0
0
1,570,456
1,571,534
1,482,467
1,480,140
1,475,085
1,475,941
111,726
113,095
115,504
117,074
136,037
135,705
124,898
122,578
115,160
112,837
109,941
112,772
137,645
136,821
310,084
311,752
378,374
386,257
475,447
470,723
53,051
43,342
41,190
56,246
53,053
48,263
62,905
61,399
27,693
30,397
38,493
34,072
33,751
29,577
29,729
20,642
42,047
18,357
-13,286
7,160
3,878
-4,099
13,283
9,386
0
5
292
0
0
632
0
0
1,072
0
0
22
0
0
366
0
0
125
0
0
35
0
0
70
0
0
15
0
0
81
FEDERAL AGENCY OBLIGATIONS
30
31
32
Outright transactions
Gross purchases
Gross sales
Redemptions
33
34
Repurchase agreements
Gross purchases
Gross sales
22,807
23,595
14,565
14,486
35,063
34,669
2,968
2,019
3,479
4,428
2,485
2,415
9,810
7,734
3,812
5,509
2,841
2,861
2,211
1,615
35
Net change in federal agency obligations
-1,085
-554
-678
927
-1,315
-55
2,041
-1,767
-35
515
36
Total net change in System Open Market
Account
28,644
20,089
41,368
19,284
-14,601
7,105
5,919
-5,866
13,248
9,901
1. Sales, redemptions, and negative figures reduce holdings of the System Open
Market Account; all other figures increase such holdings.
Federal Reserve Banks
1.18
FEDERAL RESERVE BANKS
All
Condition and Federal Reserve Note Statements 1
Millions of dollars
End of month
Wednesday
Account
1993
Dec. 29
1994
Jan. 5
Jan. 12
1994
1993
Jan. 19
Jan. 26
Nov. 30
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
9 Total U.S. Treasury securities
11,053
8,018
358
11,054
8,018
358
11,053
8,018
380
11,053
8,018
400
11,053
8,018
418
11,054
8,018
372
11,053
8,018
372
11,053
8,018
439
47
0
0
1,233
0
0
14
0
0
36
0
0
28
0
0
55
0
0
94
0
0
122
0
0
4,638
885
4,522
639
4,522
0
4,522
859
4,437
0
4,719
429
4,638
1,025
4,437
519
344,321
337,614
332,913
340,091
334,706
334,817
344,202
340,652
10 Bought outright2
11 Bills
12 Notes
13 Bonds
14 Held under repurchase agreements
332,903
161,255
132,076
39,572
11,418
334,304
162,657
132,076
39,572
3,310
332,913
161,265
132,076
39,572
0
332,301
161,269
131,460
39,572
7,790
334,706
163,674
131,460
39,572
0
326,804
159,798
128,453
38,553
8,013
332,015
160,368
132,076
39,572
12,187
331,995
160,963
131,460
39,572
8,657
15 Total loans and securities
349,891
344,008
337,449
345,508
339,171
340,020
349,960
345,729
5,607
1,054
7,594
1,055
6,356
1,056
16,115
1,055
8,593
1,054
7,808
1,050
6,454
1,055
4,326
1,054
22,550
10,048
22,345
8,963
22,362
9,057
22,372
9,642
22,391
9,360
22,443
7,692
22,340
9,999
22,336
10,550
408,578
403,395
395,730
414,163
400,059
398,458
409,251
403,505
345,878
344,213
342,351
341,865
340,209
338,456
343,925
339,575
22 Total deposits
48,036
43,857
38,561
54,337
45,010
43,277
50,543
52,284
23
24
25
26
42,097
5,407
286
245
36,633
6,736
263
224
33,997
4,093
171
299
46,354
7,450
235
297
35,210
9,184
327
287
36,050
6,334
5%
297
34,951
14,809
386
397
30,232
21,541
257
255
5,048
2,533
5,919
2,389
5,359
2,353
8,209
2,621
5,243
2,450
7,165
2,514
5,491
2,489
1,887
2,462
401,495
396,377
388,625
407,031
392,912
391,411
402,449
396,208
3,377
3,054
652
3,402
3,388
228
3,402
3,401
302
3,402
3,401
329
3,403
3,401
342
3,367
3,054
626
3,401
3,401
0
3,404
3,401
492
408,578
403,395
395,730
414,163
400,059
398,458
409,251
403,505
348,827
351,034
350,916
356,291
356,660
346,718
350,906
358,003
16 Items in process of collection
17 Bank premises
Other assets
18 Denominated in foreign currencies
19 All other4
20 Total assets
LIABILITIES
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
33 Total liabilities and capital accounts
MEMO
34 Marketable U.S. Treasury securities held in custody for
foreign and international accounts
Federal Reserve note statement
35 Federal Reserve notes outstanding (issued to Banks)
36 LESS: Held by Federal Reserve Banks
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
409,832
63,954
345,878
408,921
64,708
344,213
409,691
67,339
342,351
410,424
68,559
341,865
410,524
70,316
340,209
405,827
67,371
338,456
409,265
65,339
343,925
410,368
70,793
339,575
11,053
8,018
0
326,806
11,054
8,018
0
325,141
11,053
8,018
0
323,280
11,053
8,018
0
322,793
11,053
8,018
0
321,138
11,054
8,018
0
319,384
11,053
8,018
0
324,854
11,053
8,018
0
320,504
345,878
344,213
342,351
341,865
340,209
338,456
343,925
339,575
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.
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 1994
FEDERAL RESERVE BANKS
Maturity Distribution of L o a n and Security H o l d i n g
Millions of dollars
End of month
Wednesday
Type of holding and maturity
1993
1994
1993
1994
Dec. 29
Jan. 5
Jan. 12
Jan. 19
Jan. 26
Nov. 30
Dec. 31
Jan. 31
1 Total loans
47
1,232
14
36
28
56
94
122
2 Within fifteen days'
3 Sixteen days to ninety days
4 Ninety-one days to one year
47
0
0
1,228
4
0
8
6
0
36
0
0
28
0
0
31
25
0
93
1
0
121
1
0
5 Total acceptances
0
0
0
0
0
0
0
0
6 Within fifteen days1
7 Sixteen days to ninety days
8 Ninety-one days to one year
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
9 Total U.S. Treasury securities
344,321
337,614
332,913
340,091
334,706
326,804
332,015
331,995
30,068
72,356
106,153
79,346
24,659
31,739
21,329
74,877
105,184
79,826
24,659
31,739
16,802
78,140
101,746
79,826
24,659
31,739
20,949
77,784
105,644
80,091
23,884
31,739
19,139
74,237
105,617
80,091
23,884
31,739
6,211
84,677
104,601
76,750
23,651
30,913
9,262
81,344
105,184
79,826
24,659
31,739
12,028
79,687
104,666
79,992
23,884
31,739
16 Total federal agency obligations
5,523
5,161
4,522
5,381
4,437
4,719
4,638
4,437
17
18
19
20
21
22
1,065
565
1,078
2,105
569
142
639
775
1,048
2,105
569
25
85
805
960
2,078
569
25
1,049
700
960
2,078
569
25
105
754
969
2,016
567
25
290
498
1,127
2,074
589
142
180
565
1,078
2,105
569
142
105
754
969
2,016
567
25
10
11
12
13
14
15
Within fifteen days'
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
Within fifteen days'
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. Holdings under repurchase agreements are classified as maturing within
fifteen days in accordance with maximum maturity of the agreements.
Monetary and Credit Aggregates
1.20
A13
AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS A N D MONETARY BASE 1
Billions of dollars, averages of daily figures
Item
1990
Dec.
1991
Dec.
1992
Dec.
June
July
Aug.
Sept.
Oct.
Nov.
Dec.r
Jan.
Seasonally adjusted
ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS2
1 Total reserves3
2 Nonborrowed reserves
3 Nonborrowed reserves plus extended credit
4 Required reserves
5 Monetary base
1994
1993
1993
Dec.r
41.77 45.53 54.35
60.54
60.54 57.12 57.57 58.03 58.84 59.82 60.46
41.44 45.34 54.23
60.45
60.45 56.94 57.32 57.68 58.41 59.53 60.37
41.46 45.34 54.23
60.45
60.45 56.94 57.32 57.68 58.41 59.53 60.37
40.10r 44.56r 53.20r 59.47 56.21r 56.48r 57.08r 57.75r 58.73r 59.36r 59.47
293.16 317.12 350.63 385.90 368.27 371.32 374.37 378.08 381.44 384.16 385.90
60.56
60.48
60.48
59.11
389.57
Not seasonally adjusted
6
7
8
9
10
Total reserves
Nonborrowed reserves
Nonborrowed reserves plus extended credit .
Required reserves
Monetary base
43.07 46.98
42.74 46.78
42.77 46.78
41.40 46.00
296.68 321.07
56.06 62.41
55.93 62.33
55.93 62.33
54.90 61.35
354.55 390.62
59.12 55.53
58.80 55.34
58.82 55.34
57.46 54.55
313.70 333.61
1.66
.98
.33
.19
56.54 62.86
57.24
56.42 62.78 57.06
56.42 62.78 57.06
55.39 61.80
56.33
360.90 397.62 375.19
1.16
.91
1.06
56.96 57.42
56.78 57.17
56.78 57.17
56.05 56.33
368.73 372.02
57.38
57.03
57.03
56.43
374.10
62.41
58.69 59.53 60.73
62.33
58.26 59.24 60.64
62.33
58.26 59.24 60.64
57.60 58.44r 59.62r 61.35
377.75 380.83 384.32 390.62
62.03
61.96
61.96
60.59
391.00
NOT ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS"
11
12
13
14
15
16
17
Total reserves11
Nonborrowed reserves
Nonborrowed reserves plus extended credit .
Required reserves
Monetary base
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, DC 20551.
2. Figures reflect adjustments for discontinuities, or "breaks," associated with
regulatory changes in reserve requirements. (See also table 1.10)
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 with traditional shortterm 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
changes in reserve requirements, a multiplicative procedure is used to estimate
.12
.18
57.75 57.77
57.51 57.42
57.51 57.42
56.66 56.82
378.48 380.53
.95
1.09
.35
.24
59.14 60.04
58.71 59.75
58.71 59.75
58.05 58.95
384.25 387.51
1.09
1.09
.29
.43
61.30
62.86
62.78
61.21
62.78
60.20r 61.80
391.14 397.62
1.10
1.06
.09
.08
61.21
62.07
62.00
62.00
60.62
397.89
1.45
.07
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 those 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 1994
MONEY STOCK, LIQUID ASSETS, A N D DEBT MEASURES 1
Billions of dollars, averages of daily figures
Item
1990
Dec.r
1991
Dec.r
1992
Dec.r
1993r
1994
1993
Dec.r
Oct.
Nov.
Dec.
Jan.
Seasonally adjusted
1
2
i
4
5
Measures2
Ml
M2
M3
L
Debt
6
7
8
9
Ml components
Currency
Travelers checks
Demand deposits
Other checkable deposits
826.4
3,353.0
4,125.7
4,974.8
10,670.1
897.7
3,455.3
4,180.4
4,992.9
11,145.5
1,024.8
3,509.0
4,183.0
5,057.1
11,721.1
1,128.5
3,565.8
4,228.1
5,130.6
12,316.8
1,113.4
3,547.3
4,203.2
5,095.9
12,177.4
1,122.4
3,558.8
4,216.1
5,107.5
12,239.5
1,128.5
3,565.8
4,228.1
5,130.6
12,316.8
1,133.6
3,572.4
4,231.8
n.a.
n.a.
246.7
7.8
277.9
294.0
267.1
7.7
290.0
332.8
292.2
8.1
339.6
384.9
321.4
7.9
384.9
414.3
317.6
7.8
378.4
409.5
319.5
7.9
383.2
411.8
321.4
7.9
384.9
414.3
325.3
7.9
388.5
412.0
2,526.6
772.7
2,557.6
725.2
2,484.3
674.0
2,437.3
662.3
2,433.9
655.9
2,436.4
657.3
2,437.3
662.3
2,438.8
659.3
Commercial banks
12 Savings deposits, iincluding MMDAs
13 Small time deposits 1
14 Large time deposits
582.1
611.3
368.6
665.5
602.9
342.4
754.6
508.7
292.8
785.3
468.6
277.5
778.4
472.4
278.2
782.4
469.5
276.3
785.3
468.6
277.5
790.1
465.6
279.6
Thrift institutions
15 Savings deposits, including MMDAs
16 Small time deposits
17 Large time deposits
338.3
563.2
120.9
375.6
464.5
83.4
429.0
361.8
67.5
430.2
316.1
61.7
430.4
322.8
63.7
429.5
320.3
63.5
430.2
316.1
61.7
430.2
314.0
61.9
Money market mutual funds
18 General purpose and broker-dealer
19 Institution-only
355.5
135.0
370.4
181.0
352.0
201.5
349.9
197.0
344.8
194.3
347.8
194.8
349.9
197.0
348.9
192.7
2,490.7
8,179.4
2,763.8
8,381.7
3,068.4
8,652.7
3,327.6
8,989.2
3,266.3
8,911.1
3,291.2
8,948.3
3,327.6
8,989.2
Nontransaction components
10 In M2
11 In M3
Debt components
20 Federal debt
21 Nonfederal debt
n.a.
n.a.
Not seasonally adjusted
22
23
24
25
26
Measures2
Ml
M2
M3
L
Debt
27
28
29
30
Ml components
Currency3
Travelers checks4
Demand deposits
Other checkable deposits
843.8
3,366.0
4,135.5
4,997.2
10,667.7
916.7
3,470.4
4,191.9
5,018.0
11,144.6
1,046.7
3,527.6
4,198.2
5,087.6
11,722.0
1,153.9
3.588.4
4.247.5
5.165.6
12,317.3
1,111.8
3.545.3
4,197.7
5.088.4
12,150.4
1.129.6
3,567.5
4.227.7
5,128.7
12,229.8
1,153.9
3.588.4
4.247.5
5.165.6
12,317.3
1,142.9
3,579.1
4,232.6
n.a.
n.a.
249.5
7.4
289.9
297.0
269.9
7.4
303.1
336.3
295.0
7.8
355.1
388.9
324.9
7.6
402.7
418.6
317.3
8.0
381.2
405.3
319.8
7.7
391.2
410.9
324.9
7.6
402.7
418.6
324.0
7.7
393.3
417.9
2,522.3
769.5
2,553.7
721.6
2,480.9
670.5
2,434.5
659.1
2,433.5
652.3
2,437.8
660.2
2,434.5
659.1
2,436.2
653.5
Commercial banks
33 Savings deposits, including MMDAs
34 Small time deposits9..
35 Large time deposits 1
580.8
610.5
367.7
' 664.0
601.9
341.3
752.9
507.8
291.7
783.8
467.6
276.4
777.7
473.3
277.9
784.0
468.8
276.6
783.8
467.6
276.4
786.1
465.7
276.6
Thrift institutions
36 Savings deposits, including MMDAs
37 Small time deposits
38 Large time deposits
337.6
562.4
120.6
374.8
463.8
83.1
428.1
361.2
67.2
429.3
315.4
61.4
430.0
323.4
63.7
430.4
319.8
63.5
429.3
315.4
61.4
428.0
314.0
61.2
Money market mutual funds
39 General purpose and broker-dealer
40 Institution-only
353.8
134.7
368.5
180.4
350.2
200.4
348.3
195.8
341.1
189.2
345.8
194.0
348.3
195.8
349.3
196.2
Repurchase agreements and Eurodollars
41 Overnight
42 Term
77.3
158.3
80.6
130.1
80.7
126.7
90.1
141.2
88.1
139.2
89.1
142.8
90.1
141.2
93.1
134.8
2,491.3
8,176.3
2,765.0
8,379.7
3,069.8
8,652.2
3,329.5
8,987.8
3,249.4
8,901.0
3,287.0
8,942.8
3,329.5
8,987.8
Nontransaction components
31 In M28
32 In M3
Debt components
43 Federal debt
44 Nonfederal debt
Footnotes appear on following page.
n.a.
n.a.
Monetary
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, DC 20551.
2. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the U.S. 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 owed 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 (including MMDAs) and small time deposits (time deposits—including retail 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-deader), 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
and Credit Aggregates
A15
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 nonflnancial sectors consists of outstanding credit
market debt of the U.S. government, state and local governments, and private
nonflnancial 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 owed 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) savings deposits (including
MMDAs), and (4) 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 (5) 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, U.S. government, and foreign banks and official
institutions.
A16
1.22
DomesticNonfinancialStatistics • April 1994
DEPOSIT INTEREST RATES A N D AMOUNTS OUTSTANDING
Commercial and BIF-insured saving banks 1
1994
1993
1991
Dec.
1992
Dec.
May
June
July
Aug.
Oct.
Sept.
Nov.
Dec.r
Jan.
Interest rates (annual effective yields)
INSURED COMMERCIAL BANKS
1 Negotiable order of withdrawal accounts . . .
2 Savings deposits
3.76
4.30
2.33
2.88
2.12
2.65
2.09
2.61
2.06
2.59
2.01
2.55
1.96
2.51
1.92
2.49
1.89
2.48
1.86
2.46
1.85
2.46
Interest-bearing time deposits with balances
of less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2 Vi years
More than 2Vi years
4.18
4.41
4.59
4.95
5.52
2.90
3.16
3.37
3.88
4.77
2.70
2.97
3.18
3.64
4.47
2.68
2.97
3.19
3.65
4.44
2.67
2.97
3.18
3.64
4.43
2.66
2.%
3.17
3.63
4.40
2.63
2.92
3.13
3.55
4.28
2.63
2.91
3.11
3.54
4.27
2.64
2.92
3.13
3.54
4.28
2.65
2.91
3.13
3.55
4.29
2.65
2.91
3.15
3.57
4.31
8 Negotiable order of withdrawal accounts . . .
9 Savings deposits
4.44
4.97
2.45
3.20
2.20
2.93
2.13
2.88
2.09
2.83
2.07
2.80
2.01
2.73
1.98
2.68
1.95
2.65
1.87
2.63
1.89
2.62
Interest-bearing time deposits with balances
of less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2Vl years
More than 2 Vi years
4.68
4.92
4.99
5.23
5.98
3.13
3.44
3.61
4.02
5.00
2.87
3.19
3.45
3.76
4.79
2.86
3.17
3.44
3.79
4.75
2.80
3.15
3.40
3.72
4.73
2.79
3.12
3.37
3.73
4.73
2.76
3.05
3.33
3.69
4.62
2.75
3.05
3.34
3.68
4.57
2.73
3.03
3.32
3.69
4.60
2.70
3.02
3.31
3.66
4.62
2.69
3.03
3.33
3.73
4.61
3
4
5
6
7
BIF-INSURED SAVINGS BANKS 3
10
11
12
13
14
Amounts outstanding (millions of dollars)
INSURED COMMERCIAL BANKS
286,541
738,253
578,757
159,496
283,860
753,452
591,231
162,221
287,555
754,790
592,545
162,245
284,4%
757,716
593,448
164,268
287,675
761,919
593,318
168,601
286,056
758,835
592,028
166,807
289,813
765,372
595,715
169,657
297,329
770,609
598,200
172,408
305,223
766,413
597,838
168,575
293,816
771,592
605,718
165,873
47,094
158,605
209,672
171,721
158,078
38,474
127,831
163,098
152,977
169,708
33,213
119,096
157,559
144,330
179,761
31,743
114,846
156,549
144,804
179,297
30,803
112,497
156,431
143,605
180,983
30,017
109,603
155,074
141,377
181,762
30,384
108,574
152,501
139,406
184,414
30,022
108,504
149,758
139,042
183,790
29,730
109,228
147,334
139,315
180,972
29,455
110,069
146,565
141,223
181,528
29,441
108,200
143,567
142,422
182,183
147,266
147,350
146,450
146,523
146,196
145,955
145,636
144,776
145,002
143,985
143,791
9,624
71,215
68,638
2,577
10,871
81,786
78,695
3,091
10,000
77,352
74,376
2,976
10,313
77,495
74,569
2,926
10,457
78,390
75,049
3,341
10,468
78,387
75,153
3,234
10,471
78,182
74,978
3,204
10,548
77,995
74,737
3,258
10,852
77,948
74,664
3,284
11,151
80,115
77,035
3,079
10,803
78,657
75,442
3,215
4,146
21,686
29,715
25,379
18,665
3,867
17,345
21,780
18,442
18,845
3,103
14,129
18,520
16,155
18,725
3,022
13,808
18,427
15,972
18,989
2,871
13,773
18,454
16,250
19,229
2,928
13,525
18,143
16,200
19,331
2,886
13,261
17,798
16,161
19,610
2,839
13,131
17,441
16,124
19,657
2,778
12,926
17,178
15,995
19,645
2,793
12,946
17,426
16,546
20,464
2,736
13,090
17,413
16,279
20,625
23,007
21,713
19,861
19,855
19,920
19,802
19,766
19,601
19,382
19,356
19,244
15 Negotiable order of withdrawal accounts . . . 244,637
652,058
16 Savings deposits
17 Personal
508,191
143,867
18 Nonpersonal
19
20
21
22
23
Interest-bearing time deposits with balances
of less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2Vi years
More than 2 Vl years
24 IRA/Keogh Plan deposits
BIF-INSURED SAVINGS BANKS 3
25 Negotiable order of withdrawal accounts
26 Savings deposits
27 Personal
28 Nonpersonal
29
30
31
32
33
Interest-bearing time deposits with balances
of less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2Vi years
More than 2Vi years
34 IRA/Keogh Plan accounts
1. BIF, Bank Insurance Fund. Data in this table also appear in the Board's H.6
(508) Special Supplementary Table monthly statistical release. For ordering
address, see inside front cover. Estimates are based on data collected by the
Federal Reserve System from a stratified random sample of about 460 commercial
banks and 80 savings banks on the last Wednesday of each period. Data are not
seasonally adjusted and include IRA/Keogh deposits and foriegn currency denominated deposits. Data exclude retail repurchase agreements and deposits held in
U.S. branches and agencies of foreign banks.
2. Includes personal and nonpersonal money market deposits.
3. BIF-insured savings banks include both mutual and federal savings banks.
Monetary
1.23
and Credit Aggregates
A17
B A N K DEBITS A N D DEPOSIT TURNOVER 1
Debits are in billions of dollars; turnover is ratio of debits to deposits; monthly data are at annual rates
1993
June
Aug.*
July*
Sept.*
Oct.*
Nov.
Seasonally adjusted
DEBITS
3
Demand deposits
1 All insured banks
2 Major New York City banks
3 Other banks
4 Other checkable deposits4
5 Savings deposits (including MMDAs)5
277,151.7r
131,695.5r
145,456.2r
277,763.7r
137,352.9*
140,410.8*
315,812.2*
165,573.5*
150,238.7*
335,338.0*
170,268.7*
165,069.3*
330,668.5
166,663.8
164,004.7
333,750.6
169,093.8
164,656.8
360,304.3
185,675.0
174,629.3
327,497.9
166,671.1
160,826.8
360,492.1
187,185.5
173,306.7
3,348.8r
3,483.4r
3,645.5
3,266.1
3,788.1
3,331.5*
3,616.4*
3,633.9*
3,365.4
3,634.3
3,441.4
3,500.3
3,490.8
3,734.0
3,302.4
3,398.3
3,590.9
3,782.3
797.9r
3,819.6r
464.9
803.5
4,270.7*
447.9
832.4
4,797.6*
435.9
791.8*
4,195.6*
431.1
777.7
4,293.9
424.5
769.0
4,040.3
419.9
824.3
4,254.4
443.8
729.8
3,907.6
396.0
796.3
4,249.4
424.1
11.4
4.7
11.6
4.5
11.7
4.8
11.0
4.4
11.9
4.9
DEPOSIT TURNOVER
Demand deposits3
6 All insured banks
7 Major New York City banks
8 Other banks
9 Other checkable deposits4
10 Savings deposits (including MMDAs)
16.5
6.2
16.2
5.3
14.4
4.7
12.3
4.7
Not seasonally adjusted
DEBITS
3
Demand deposits
11 All insured banks
12 Major New York City banks
13 Other banks
14 Other checkable deposits4
15 Savings deposits (including MMDAs)
277,290.5
131,784.7
145,505.8
277,715.4
137,307.2
140,408.3
315,808.2
165,595.0
150,213.3
345,368.7
176,874.8
168,493.9
332,888.4
168,018.4
164,870.1
342,539.4
174,674.7
167,864.7
347,849.8
179,869.7
167,980.2
335,861.9
172,675.6
163,186.3
344,003.5
180,990.2
163,013.3
3,346.7
3,483.0
3,645.6
3,267.7
3,788.1
3,329.0
3,645.9
3,758.1
3,290.8
3,643.7
3,369.1
3,529.6
3,493.3
3,536.4
3,293.5
3,328.6
3,335.8
3,497.3
798.2
3,825.9
465.0
803.4
4,274.3
447.9
832.5
4,803.5
436.0
818.3
4,412.6
441.1
778.0
4,280.6
424.3
802.5
4,307.8
434.6
798.5
4,196.6
427.7
748.5
4,059.2
401.8
753.2
4,129.6
394.8
16.4
6.2
16.2
5.3
14.4
4.7
12.5
4.9
11.3
4.8
11.5
4.6
11.8
4.6
11.1
4.3
11.1
4.5
DEPOSIT TURNOVER
Demand deposits3
16 All insured banks
17 Major New York City banks
18 Other banks
19 Other checkable deposits4
20 Savings deposits (including MMDAs)
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, DC
20551.
Data in this table also appear in 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. Money market deposit accounts.
A18
1.24
DomesticNonfinancialStatistics • April 1994
LOANS A N D SECURITIES
All C o m m e r c i a l B a n k s 1
Billions of dollars, averages of Wednesday figures
1993
1994
Item
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Seasonally adjusted
1 Total loans, leases, and securities2 .
2,943.9
2,960.2
2,970.9
2,991.2
3,014.1
3,037.4
3,046.6
3,057.3r
3,056.9*
3,072.9*
3,087.7*
3,095.5
2 U.S. government securities
3 Other securities
4 Total loans and leases2
5 Commercial and industrial . . . . .
Bankers acceptances held . . .
6
Other commercial and
7
industrial
U.S. addressees4.
8
9
Non-U.S. addressees
10 Real estate
11 Individual
12 Security
13 Nonbank financial
institutions
14 Agricultural
15 State and political
subdivisions
16 Foreign banks
17 Foreign official institutions
18 Lease-financing receivables
19 All other loans
666.2
176.4
2,101.3
596.7
8.4
680.2
179.0
2,101.0
593.1
8.5
691.0
181.0
2,098.9
587.5
8.5
693.5
181.2
2,116.5
589.9
9.0
704.3
179.6
2,130.3
590.9
8.8
708.2
181.5
2,147.8
590.2
9.2
714.8
182.4
2,149.5r
589.6
9.6
720.7r
182.6
2,153.9
586.2
8.8
718.9*
180.3*
2,157.7*
585.7
9.5
720.5*
180.5*
2,171.9*
585.5*
9.0
727.9*
181.4*
2,178.5*
584.2
8.8
726.1
187.0
2,182.4
590.6
9.2
588.3
578.8
9.5
890.1
361.9
62.8
584.6
574.9
9.7
891.9
362.3
64.2
579.0
569.7
9.3
892.2
364.4
62.3
580.9
571.2
9.7
898.0
367.5
68.6
582.1
572.8
9.4
903.9*
368.8
71.4
581.0
571.5
9.6
907.7
372.5
81.6
580.0
570.4
9.6
910.8
374.7
79.9
577.3*
567.4
9.9
914.7r
376.0
82.7
576.2
566.5
9.7
918.2*
380.3
79.5
576.5
566.4*
10.2
921.8
383.2
87.0
575.3*
565.6*
9.7
927.4*
385.6
86.0
581.4
571.4
10.0
926.5
388.8
78.1
44.6
34.3
44.2
34.0
45.0
34.1
45.9
34.3
46.0
34.3
46.5
34.7
46.8
34.8
46.1
34.8
44.9
35.0
44.2
35.5
43.2
35.4
42.2
35.8
23.8
8.8
3.2
30.6
44.5
23.6
8.5
3.2
30.6
45.3
23.1
8.4
3.2
30.7
48.0
23.0
8.4
3.1
30.9
46.8
22.8
8.6
3.2
31.3
49.0
22.8
9.0
3.2
31.6
47.9
22.7
9.5
3.1
31.7
46.0
22.4
8.7
3.4
31.8
47.3
22.2
8.9
3.5
32.1
47.3
21.8
8.1
3.3
32.5
49.1
21.6
7.7
3.3
32.8
51.2*
21.3
7.5
3.8
33.0
54.8
Not seasonally adjusted
20 Total loans, leases, and securities2 .
2,946.7
2,963.9
2,972.5
2,986.2
3,013.9
3,025.6
3,038.3
3,054.1*
3,056.2*
3,080.2*
3,097.3*
3,098.1
21 U.S. government securities
22 Other securities
23 Total loans and leases2
24 Commercial and industrial . . . . .
25
Bankers acceptances held . . .
Other commercial and
26
industrial
27
U.S. addressees4
28
Non-U.S. addressees4
29 Real estate
30 Individual
31 Security
32 Nonbank financial
institutions
33 Agricultural
34 State and political
subdivisions
35 Foreign banks
36 Foreign official institutions
37 Lease-financing receivables . . . .
38 All other loans
669.8
176.6
2,100.3
595.9
8.8
685.9
178.7
2,099.3
596.3
8.6
692.8
180.4
2,099.3
590.4
8.3
692.5
180.7
2,113.0
591.6
8.9
702.0
179.1
2,132.8
592.7
8.6
703.5
180.4
2,141.8
589.2
8.9
713.1
182.2
2,142.9
585.9
9.3
718.3
182.2
2,153.6*
582.6*
8.6
716.6*
180.6*
2,158.9*
583.5*
9.3
723.8*
181.5*
2,174.9*
585.8
9.3
726.5*
181.5*
2,189.3*
586.9
9.2
727.0
187.6
2,183.5
589.0
9.4
587.1
577.5
9.5
888.3
361.9
65.8
587.7
578.2
9.5
889.3
359.8
66.4
582.1
572.7
9.4
891.1
361.7
65.7
582.7
573.0
9.7
898.0
365.7
65.5
584.1
573.9
10.2
904.3
367.0
70.8
580.3
570.4
9.9
908.0
370.2
77.5
576.6
566.8
9.8
911.6*
374.1
76.9
574.0
564.2
9.8
915.5
377.7*
80.7
574.2*
564.7
9.4
919.2*
380.7
79.2
576.6*
567.0*
9.6
923.3
384.1
86.1
577.7*
568.2
9.5
928.7*
390.4
87.1
579.6
569.7
9.9
926.1
393.2
80.0
44.5
32.9
43.9
32.7
44.4
33.3
45.3
34.0
46.6
34.8
46.2
35.6
46.6
35.9
45.4
36.2
44.5
36.0
44.5
35.6
45.1
35.2
42.4
34.9
23.7
8.6
3.2
30.8
44.6
23.7
8.2
3.2
30.8
45.0
23.2
8.1
3.2
30.8
47.5
23.0
8.2
3.1
30.9
47.6
22.8
8.4
3.2
31.3
51.0
22.7
9.1
3.2
31.3
48.8
22.7
9.2
3.1
31.5
45.4
22.5
8.8
3.4
31.6
49.0*
22.4
9.2
3.5
32.1
48.8
21.8
8.5
3.3
32.4*
49.6
21.6
8.2
3.3
32.7*
50.0*
21.1
7.5
3.8
33.3
52.1
1. All commercial banks include domestically chartered insured banks, U.S.
branches and agencies of foreign banks, New York state investment companies
majority owned by foreign banks, and Edge Act and agreement corporations
owned by domestically chartered foreign banks. Data are prorated averages of
Wednesday estimates for domestically chartered and foreign related institutions,
based on weekly reports of a sample of domestically chartered insured banks and
large branches and agencies and quarterly reports of all domestically chartered
insured banks and all agencies, branches, investment companies, and Edge Act
and agreement corporation engaged in banking.
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.
Commercial
1.25
Banking Institutions
A19
MAJOR NONDEPOSIT F U N D S OF COMMERCIAL BANKS 1
Billions of dollars, monthly averages
1993
1994
Source of funds
Feb.
Mar.
Apr.
May
June
Julyr
Aug.r
Sept/
Oct/
Nov/
Dec/
Jan.
Seasonally adjusted
1 Total nondeposit funds2
2 Net balances owed to related foreign offices 3 ..
3 Borrowings from other than commercial banks
in United States4
4 Domestically chartered banks
5 Foreign-related banks
309.8
72.5
320.2
77.8
329.7
87.5
325.1
81.9
335.9
85.0
357.4
99.9
366.3
114.0
375.8
117.7
379.4
121.7
372.5
120.6
372.6
119.6
372.6
123.6
237.3
157.1
80.2
242.4
161.9
80.5
242.2
167.2
75.0
243.3
166.2
77.1
250.8
173.9
77.0
257.5
181.1
76.4
252.2
176.9
75.4
258.2
180.8
77.4
257.7
182.7
75.0
251.9
178.5
73.4
253.1
178.0
75.0
249.0
176.7
72.3
Not seasonally adjusted
6 Total nondeposit funds2
7 Net balances owed to related foreign offices ..
8 Domestically chartered banks
9 Foreign-related banks
10 Borrowings from other than commercial banks
in United States
11 Domestically chartered banks
12
Federal funds and security RP
borrowings
13
Other6
14 Foreign-related banks
314.1
74.4
-10.6
84.9
325.1
78.5
-7.0
85.5
325.8
84.6
-9.4
94.0
329.8
84.0
-9.7
93.7
334.9
83.1
-15.3
98.4
351.1
96.6
-15.2
111.9
361.1
110.3
-13.7
123.9
370.5
115.3
-12.2
127.6
382.0
122.9
-7.0
129.8
378.7
122.3
-4.9
127.3
372.8
123.7
-2.8
126.5
371.2
126.2
3.2
123.0
239.7
158.8
246.5
164.8
241.3
165.1
245.8
167.8
251.8
173.6
254.4
177.3
250.9
175.6
255.2
179.4
259.1
184.1
256.4
183.6
249.1
176.9
245.0
173.3
155.6
3.2
80.9
161.4
3.3
81.8
161.6
3.5
76.2
164.0
3.8
78.0
169.8
3.8
78.2
173.1
4.3
77.1
171.5
4.0
75.3
175.1
4.4
75.7
179.6
4.5
75.0
178.9
4.7
72.8
172.3
4.6
72.2
168.3
5.0
71.7
362.8r
361.3r
359.7r
359.7r
357.6r
356.7r
358.3rr
360.6
355.0"
356.9*
347.8
347.5
341.9
343.7
337.4
338.3
337.8
337.5
339.2
339.5
343.6
342.4
345.1
342.1
23.7r
29.5
19.8r
17.4
24.0r
20.3
21.4r
20.3
24.8r
26.5
27.6
25.6
26.1
23.8
23.3
28.6
17.9
17.1
17.8
12.9
22.5
21.4
23.5
31.0
MEMO
Gross large time deposits
15 Seasonally adjusted
16 Not seasonally adjusted
U.S. Treasury demand balances at
commercial banks
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
State investment companies majority owned by foreign banks, and Edge Act and
agreement corporations owned by domestically chartered and foreign banks.
Data in this table also appear in the Board's G.10 (411) monthly statistical
release. For ordering address, see inside front cover.
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 on 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.
A20
1.26
DomesticNonfinancialStatistics • April 1994
ASSETS A N D LIABILITIES OF COMMERCIAL BANKS 1
Wednesday figures
Millions of dollars
1993r
1994
Account
Dec. 1
Dec. 8
Dec. 15
Dec. 22
Dec. 29
Jan. 5
Jan. 12
Jan. 19
Jan. 26
Assets
1 Loans and securities
Investment securities
7
U.S. government securities
Other
4
5 Trading account assets
6
U.S. government securities
Other securities
7
Other trading account assets
8
9 Total loans
Interbank loans
10
11
Loans excluding interbank
Commercial and industrial
1?
Real estate
N
Revolving home equity
14
15
Other
Individual
16
All other
17
18 Total cash assets
19 Balances with Federal Reserve Banks
70 Cash in vault
Demand balances at U.S. depository institutions ..
71
77
Cash items
73
Other cash assets
24 Other assets
3,253,057
861,933
695,353
166,580
45,066
30,070
2,145
12,851
2,346,058
161,337
2,184,721
585,867
927,797
73,641
854,156
387,490
283,567
253,838
29,103
35,818
35,177
114,058
39,682
281,319
3,262,639
868,966
702,557
166,409
40,529
25,168
2,120
13,241
2,353,144
170,123
2,183,021
582,664
929,826
73,508
856,319
385,194
285,337
210,792
26,473
34,282
30,675
79,513
39,849
278,150
3,270,333
866,917
700,454
166,463
41,287
26,459
1,991
12,837
2,362,129
168,087
2,194,042
586,598
931,091
73,477
857,615
389,602
286,751
245,975
31,841
34,826
36,176
102,838
40,293
279,768
3,247,697
867,007
700,880
166,127
39,662
25,123
2,036
12,503
2,341,027
155,471
2,185,556
588,712
924,973
73,350
851,624
392,098
279,773
233,338
33,917
34,420
33,239
92,277
39,485
277,220
3,262,193
865,658
700,236
165,423
39,044
23,860
2,114
13,071
2,357,490
161,992
2,195,499
588,868
929,079
73,210
855,869
394,149
283,403
233,204
37,646
37,743
32,158
85,610
40,046
278,015
3,272,024
873,769
704,500
169,269
45,157
26,391
2,289
16,477
2,353,098
164,855
2,188,244
589,973
928,071
73,114
854,957
394,513
275,687
226,770
32,118
35,605
32,836
86,068
40,142
285,182
3,259,817
872,858
704,212
168,646
44,119
26,787
2,200
15,132
2,342,840
156,550
2,186,290
588,386
929,516
72,975
856,541
393,201
275,187
214,747
29,905
35,965
30,061
78,808
40,009
284,688
3,266,294
866,599
698,497
168,101
47,372
30,578
2,055
14,738
2,352,324
167,027
2,185,297
589,266
925,086
72,947
852,139
392,884
278,061
247,309
41,336
35,641
36,641
94,858
38,834
272,332
3,228,637
860,549
692,917
167,633
45,114
27,102
1,970
16,043
2,322,973
151,880
2,171,093
587,8%
922,451
72,895
849,556
392,460
268,286
210,433
31,652
34,895
30,348
74,940
38,214
267,849
25 Total assets
3,788,214
3,751,581
3,796,075
3,758,254
3,773,411
3,783,976
3,759,251
3,785,935
3,706,918
2,582,055
871,163
5,764
47,496
817,903
780,622
599,170
331,100
523,868
15,856
508,012
383,473
2,547,266
826,004
3,025
39,080
783,899
786,880
598,394
335,988
516,995
1,350
515,645
384,485
2,599,399
886,254
28,434
47,577
810,243
780,493
597,592
335,060
513,094
2,442
510,652
382,843
2,547,641
846,322
4,161
43,015
799,147
772,630
595,972
332,716
530,346
21,322
509,024
381,658
2,550,952
852,260
4,706
40,097
807,457
772,758
595,013
330,921
539,193
34,660
504,533
383,182
2,569,502
860,451
4,573
40,525
815,353
782,047
595,959
331,046
529,263
18,855
510,408
382,349
2,543,867
823,146
3,732
37,516
781,898
791,370
594,347
335,004
528,407
23,105
505,302
382,799
2,550,223
842,232
6,129
46,369
789,734
781,015
593,804
333,173
546,807
27,422
519,385
385,544
2,494,508
790,068
3,712
39,284
747,072
777,138
592,358
334,943
528,493
32,898
495,595
377,448
3,489,396
3,448,746
3,495,336
3,459,645
3,473,326
3,481,114
3,455,074
3,482,575
3,400,449
298,818
302,835
300,739
298,609
300,085
302,862
304,177
303,361
306,470
ALL COMMERCIAL BANKING INSTITUTIONS
76
77
28
7.9
30
31
37
33
34
35
36
37
Liabilities
Total deposits
Transaction accounts
Demand, U.S. government
Demand, depository institutions
Other demand and all checkable deposits
Savings deposits (excluding checkable)
Small time deposits
Time deposits over $100,000
Borrowings
Treasury tax and loan notes
Other
Other liabilities
38 Total liabilities
39 Residual (assets less liabilities)3
F o o t n o t e s a p p e a r o n following p a g e .
2
Commercial
1.26
ASSETS A N D LIABILITIES OF COMMERCIAL BANKS 1
Banking Institutions
A21
Wednesday figures—Continued
Millions of dollars
1993r
Dec. 1
Dec. 8
Dec. 15
Dec. 22
Dec. 29
Jan. 5
Jan. 12
Jan. 19
Jan. 26
2,892,692
783,166
639,467
143,699
45,066
30,070
2,145
12,851
2,064,460
139,413
1,925,047
433,741
880,648
73,641
807,008
387,490
223,168
228,482
28,605
35,782
33,684
111,548
18,863
184,074
2,892,183
787,266
643,919
143,347
40,529
25,168
2,120
13,241
2,064,388
144,298
1,920,090
431,450
882,684
73,508
809,177
385,194
220,761
185,485
25,760
34,246
29,269
77,299
18,911
183,655
2,903,461
785,258
641,929
143,329
41,287
26,459
1,991
12,837
2,076,916
147,147
1,929,769
434,469
884,468
73,477
810,991
389,602
221,230
220,364
31,339
34,787
34,821
100,600
18,817
181,972
2,878,838
785,978
642,557
143,420
39,662
25,123
2,036
12,503
2,053,198
131,762
1,921,437
436,091
879,496
73,350
806,147
392,098
213,752
208,130
33,119
34,382
31,798
89,916
18,915
180,941
2,885,962
784,238
640,893
143,345
39,044
23,860
2,114
13,071
2,062,680
133,949
1,928,731
435,670
883,867
73,210
810,656
394,149
215,045
207,026
37,041
37,707
30,663
83,143
18,473
182,982
2,908,076
790,534
645,637
144,897
45,157
26,391
2,289
16,477
2,072,385
141,584
1,930,802
436,797
883,570
73,114
810,456
394,513
215,922
201,373
31,339
35,569
31,483
83,798
19,184
193,686
2,898,225
789.659
645,047
144,612
44,119
26,787
2,200
15,132
2,064,447
140,715
1,923,732
434,313
884,759
72,975
811,785
393,201
211,458
189.660
29,466
35,925
28,655
76,384
19,230
188,410
2,896,982
783,794
638,875
144,920
47,372
30,578
2,055
14,738
2,065,816
142,698
1,923,118
436,056
880,585
72,947
807,638
392,884
213,592
221,947
40,325
35,599
35,141
92,353
18,529
183,413
2,867,466
777,495
633,530
143,966
45,114
27,102
1,970
16,043
2,044,856
131,440
1,913,416
435,851
877,763
72,895
804,867
392,460
207,342
186,392
31,131
34,857
28,839
72,395
18,785
181,061
64 Total assets
3,305,248
3,261,323
3,305,796
3,267,908
3,275,969
3,303,135
3,276,294
3,302,342
3,234,918
Liabilities
65 Total deposits
66 Transaction accounts
67
Demand, U.S. government
68
Demand, depository institutions
69
Other demand and all checkable deposits
70 Savings deposits (excluding checkable)
71 Small time deposits
72 Time deposits over $100,000
73 Borrowings
74 Treasury tax and loan notes
75 Other
76 Other liabilities
2,434,803
858,922
5,762
44,715
808,445
776,267
596,937
202.677
422,534
15,856
406.678
152,094
2,397,548
815,245
3,024
36,607
775,614
782,440
5%, 166
203,697
413,122
1,350
411,772
150,819
2,447,895
874,423
28,432
44,935
801,057
776,123
595,346
202,003
410,262
2,442
407,820
149,902
2,395,861
834,944
4,160
40,271
790,513
768,276
593,727
198,914
430,266
21,322
408,944
146,173
2,398,130
839,834
4,705
37,336
797,793
768,333
592,758
197,205
434,202
34,660
399,542
146,553
2,419,339
849,212
4,571
38,050
806,591
777,679
593,679
198,769
430,007
18,855
411,152
153,928
2,393,703
811,892
3,731
35,101
773,060
786,978
592,105
202,728
426,412
23,105
403,307
155,003
2,401,878
830,921
43,840
780,952
776,678
591,563
202,717
442,037
27,422
414,615
158,067
2,342,406
778,081
3,712
36,559
737,810
772,734
590,099
201,493
432,960
32,898
400,062
156,083
77 Total liabilities
3,009,431
2,961,490
3,008,059
2,972,300
2,978,886
3,003,274
2,975,118
3,001,982
2,931,449
295,817
299,834
297,738
295,608
297,084
299,861
301,176
300,359
303,468
DOMESTICALLY CHARTERED COMMERCIAL BANKS
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
Assets
Loans and securities
Investment securities
U.S. government securities
Other
Trading account assets
U.S. government securities
Other securities
Other trading account assets
Total loans
Interbank loans
Loans excluding interbank
Commercial and industrial
Real estate
Revolving home equity
Other
Individual
All other
Total cash assets
Balances with Federal Reserve Banks
Cash in vault
Demand balances at U.S. depository institutions
Cash items
Other cash assets
Other assets
78 Residual (assets less liabilities)
3
1. Excludes assets and liabilities of international banking facilities.
2. Includes insured domestically chartered commercial banks, agencies and
branches of foreign banks, Edge Act and agreement corporations, and New York
State investment corporations majority owned by foreign banks. Data are estimates
for the last Wednesday of the month based on a sample of weekly reporting
foreign-related and domestic institutions and quarter-end condition reports.
6,128
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.
A22
1.27
DomesticNonfinancialStatistics • April 1994
ASSETS A N D LIABILITIES OF LARGE W E E K L Y REPORTING COMMERCIAL B A N K S
Millions of dollars, Wednesday figures
1993
1994
Account
Dec. 1
Dec. 8
Dec. 15
Dec. 22
142,070
303,131r
26,759*
276,372
88,537
107,158
302,530*
22,611*
279,919
88,625
136,856
300,450*
23,866*
276,584
87,022
124,500
299,794*
22,761*
277,032
87,170
124,063
296,557*
20,943*
275,614
87,863
119,432
307,716
24,041
283,675
89,172
114,048
307,025
23,425
283,600
89,132
139,460
305,208
27,403
277,805
87,858
114,163
299,105
24,527
274,578
86,965
48,834
71,932
67,069
56,490
1,935
54,555
20,172
4,062
16,110
34,384
12,740*
51,085
72,856
67,353
56,303
1,911
54,392
20,132
3,945
16,188
34,260
13,130*
51,994
71,928
65,640
55,951
1,782
54,169
20,183
4,003
16,180
33,986
12,724*
51,996
71,971
65,895
56,017
1,828
54,189
20,369
4,034
16,335
33,821
12,392*
52,000
70,925
64,826
55,570
1,883
53,687
20,517
4,054
16,463
33,170
12,960*
52,870
73,679
67,953
58,796
1,949
56,847
21,048
3,926
17,122
35,799
16,368
51,248
74,568
68,653
58,700
1,860
56,840
21,129
3,868
17,260
35,711
15,024
49,949
72,167
65,497
58,556
1,707
56,849
21,115
3,946
17,169
35,734
15,938
93,857
56,011
33,432
4,414
1,015,053
272,904
3,492
269,411
267,975
1,437
410,662
42,950
367,713
198,793
41,338
15,518
2,964
22,856
18,204
5,624
12,513
1,156
28,070
25,789
1,947
35,420
977,686
170,929
97,197
102,728
80,864
86,051
93,389
57,352
63,290
49,169
53,240
59,710
34,965
34,720
28,657
29,504
28,340
4,881
4,717
3,039
3,306
5,339
1,008,577 1,016,635 1,017,572* 1,019,713* 1,046,109
272,724
270,666
273,969* 273,256*
278,869
3,122
2,984
2,969
3,102
2,883
267,544
269,741
271,000* 270,154*
275,986
266,092
268,295
269,485* 268,658*
274,434
1,451
1,446
1,515
1,496
1,552
412,737
412,583
407,976
409,656* 421,793
42,809
42,796
42,685
42,650*
43,880
369,928
369,787
365,291
367,006
377,912
197,529
200,218
202,293
203,948*
211,174
40,774
41,950
43,081
42,800*
44,209
14,996
16,737
18,208
18,016*
18,615
2,922
2,524
3,246
2,373
3,397
22,856
22,689
21,627
22,411*
22,197
18,060
18,519
19,537
19,109
18,288
5,664
5,628
5,661
5,705
6,117
12,336
12,353
12,497
12,308
12,329
1,113
1,158
1,141
1,381
1,179
23,900
25,626
25,477*
25,595*
25,682
25,797
25,876
25,940
25,954
26,470
1,930
1,916
1,912
1,906
1,918
35,570
35,563
35,363
34,881
35,010
971,077
979,155
980,297* 982,926* 1,009,182
170,669* 169,416* 168,651* 168,124*
178,822
92,714
59,149
28,887
4,677
1,041,161
277,074
2,922
274,153
272,465
1,688
423,576
43,786
379,789
210,404
42,106
18,214
2,649
21,244
18,315
5,970
12,222
1,149
23,767
26,578
1,919
34,874
1,004,368
176,436
50,733
72,449
66,766
58,950
1,767
57,183
21,091
3,902
17,189
36,092
14,630
100,295
64,772
29,062
6,461
1,039,531
278,783
2,903
275,880
274,225
1,655
419,387
43,777
375,610
210,157
41,127
18,456
2,660
20,012
18,172
5,916
12,232
1,231
25,948
26,580
1,916
34,849
1,002,766
171,521
90,455
57,632
26,787
6,036
1,033,398
278,811
3,220
275,592
273,942
1,650
417,415
43,791
373,624
209,683
39,096
17,168
2,652
19,276
17,631
5,922
12,218
1,080
24,988
26,554
1,898
34,887
996,612
168,290
1,756,902
1,718,064* 1,757,280"" 1,722,515* 1,726,249*
1,768,315
1,792,831
1,743,118
Dec. 29
Jan. 5
Jan. 12
Jan. 19
Jan. 26
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 securities1
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
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
Federal funds sold2
To commercial banks in the United States
To nonbank brokers and dealers
To others3
Other loans and leases, gross
Commercial and industrial
Bankers acceptances and commercial paper
All other
U.S. addressees
Non-U.S. addressees
Real estate loans
Revolving, home equity
All other
To individuals for personal expenditures
To financial institutions
Commercial banks in the United States
Banks in foreign countries
Nonbank financial institutions
For purchasing and carrying securities
To finance agricultural production
To states and political subdivisions
To foreign governments and official institutions
All other loans
Lease-financing receivables
LESS: Unearned income
Loan and lease reserve
Other loans and leases, net
Other assets
Total assets
Footnotes appear on the following page.
1,783,703
Weekly Reporting Commercial Banks
1.27
A23
ASSETS A N D LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued
Millions of dollars, Wednesday figures
1994
1993
Dec. 1
Dec. 8
Dec. 15
Dec. 22
Dec. 29
Jan. 12
Jan. 19
Jan. 26
1,157,263
303,087
254,420
48,667
8,656
2,531
21,194
5,705
605
9,975
126,607
727,569
705,387
22,182
18,196
2,024
1,653
309
1,165,260
320,102
260,335
59,767
9,796
4,671
27,874
5,748
796
10,882
126,182
718,976
6%,618
22,358
18,292
2,063
1,695
309
1,125,425
289,472
238,009
51,463
9,651
2,522
22,741
5,191
637
10,721
120,916
715,037
692,511
22,526
18,470
2,056
1,691
308
327,231
1,220
15,993
310,017
323,079
0
19,530
303,548
336,960
0
23,302
313,658
328,573
0
28,843
299,730
123,664
Jan. 5
LIABILITIES
46 Deposits
47 Demand deposits
48
Individuals, partnerships, and corporations
49
Other holders
50
States and political subdivisions
51
U.S. government
52
Depository institutions in the United States . . .
53
Banks in foreign countries
54
Foreign governments and official institutions ..
55
Certified and officers' checks
56 Transaction balances other than demand deposits .
57 Nontransaction balances
58
Individuals, partnerships, and corporations
59
Other holders
60
States and political subdivisions
61
U.S. government
62
Depository institutions in the United States . . .
63
Foreign governments, official institutions, and banks .
64 Liabilities for borrowed money5
65 Borrowings from Federal Reserve Banks
66 Treasury tax and loan notes
67 Other liabilities for borrowed money6
68 Other liabilities (including subordinated notes and
debentures)
69 Total liabilities
70 Residual (total assets less total liabilities)7
MEMO
71
72
73
74
75
76
77
Total loans and leases, gross, adjusted, plus securities
Time deposits in amounts of $100,000 or more
Loans sold outright to affiliates
Commercial and industrial
Other
Foreign branch credit extended to U.S. residents1"...
Net owed to related institutions abroad
1,156,471 1,125,695
297,628
332,852
270,947
246,398
61,905r
51,230
8,524
10,970r
1,847
3,705
22,568
29,458
5,144
5,745
663
716
12,484
11,312
124,737
125,035
698,584
703,330
682,298
677,632
20,952
21,033
16,895
16,911
2,230
2,223
1,618
1,515
297
296
323,076r
0
14,076
308,999*
120,822r
315,423r
0
73r
315,350*"
311,881r
125
1,645
310,11 l r
326,957*
0
18,536*
308,421*
329,071*
0
29,559*
299,512*
114,839*
115,008*
124,843
128,026
125,791
1,621,423 1,605,184
1,630,246
1,579,789
162,280
163,131
162,585
163,329
1,409,742r 1,405,390 1,408,460 1,399,262* 1,399,594* 1,444,052
90,968
95,074
95,828
96,780
95,341
92,430
795
849
819
793
850
846
395
391
389
391
391
388
404
404
458r
424
459r
458
21,785*
21,905
21,827r
21,485*
21,344r
21,653*
-5,062* -11,566
-6,768
-6,329*
-5,733
-2,629*
1,437,260
98,907
785
389
396
21,999
-3,988
1,435,386
98,830
774
384
390
22,042
4,810
1,422,652
97,517
770
383
387
21,784
4,758
119,299*
1,600,369
1,560,417
156,533
157,647r
1. Includes certificates of participation, issued or guaranteed by agencies of the
U.S. government, in pools of residential mortgages.
2. Includes securities purchased under agreements to resell.
3. Includes allocated transfer risk reserve.
4. Includes negotiable order of withdrawal accounts (NOWs), automatic transfer service (ATS), and telephone and preauthorized transfers of savings deposits.
5. Includes borrowings only from other than directly related institutions.
6. Includes federal funds purchased and securities sold under agreements to
repurchase.
7. This balancing item is not intended as a measure of equity capital for use in
capital-adequacy analysis.
8. Excludes loans to and federal funds transactions with commercial banks in
the United States.
l,169,542r 1,125,468* 1,127,040 1,170,528
312,373* 315,836
316,913
346,148
263,331
268,224
254,843* 260,103*
55,733*
53,581
77,925
57,529*
10,234
9,843
10,006
10,152
2,955
2,782
2,456
21,878
22,860*
23,438*
22,531
29,366
7,815
5,589
5,991
6,258
853
881
617
720
13,242
11,390
9,550
13,360
126,438
136,834
126,518r
126,749
684,766
716,781
696,876r 686,346
664,819
665,775
697,089
676,043
19,947
19,692
20,572
20,833
16,198
16,540
17,279
16,789
1,845
2,157
464
2,134
1,603
1,623
1,573
1,608
301
326
302
302
118,712*
1,600,136
157,145*
1,567,264* 1,571,119
155,251*
155,130*
9. 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.
10. Credit extended by foreign branches of domestically chartered weekly
reporting 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.
A24
1.28
DomesticNonfinancialStatistics • April 1994
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
1993
1993
Account
Dec. 1
Dec. 8
Dec. 15
Dec. 22
Dec. 29
Jan. 5
Jan. 12
Jan. 19
Jan. 26
ASSETS
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
All other
10
11
U.S. addressees
12
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
Nonbank financial institutions
17
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
16,983
16,919
17,066
16,850
17,544
17,203
16,728
16,920
16,038
36,009
8,229
25,456
6,334
19,123
158,046r
95,450*
37,924
8,293
32,268
7,967
24,301
156,028*
94,785*
37,182
8,306
28,968
5,678
23,291
157,457*
95,262*
37,181
8,147
29,323
6,728
22,595
158,104*
95,466*
38,062
7,916
31,712
8,717
22,994
160,008
95,936*
36,390
8,805
23,862
6,2%
17,566
157,761
%,260
36,338
8,629
23,467
2,513
20,954
157,339
%,254
36,749
8,346
29,344
6,753
22,591
155,978
%,058
36,629
8,535
25,529
5,184
20,345
154,374
95,346
2,940
92,509*
89,299*
3,211
30,952*
22,286
4,975
1,865
15,446
5,432
2,870
91,916*
88,746*
3,170
30,929*
22,263
4,975
1,845
15,442
4,148
2,975
92,287*
89,109*
3,178
30,561*
22,465
5,007
1,793
15,665
5,163
3,222
92,244*
89,029*
3,215
29,825*
22,581
5,249
1,694
15,637
6,066
3,134
92,802*
89,620*
3,182
29,686
23,113
5,363
1,644
16,106
6,863*
3,353
92,907
89,688
3,219
29,356
22,807
5,436
1,539
15,832
5,163
3,282
92,972
89,745
3,227
29,359
22,354
5,575
1,538
15,241
5,105
3,304
92,754
89,504
3,250
29,317
22,039
5,483
1,510
15,046
4,157
3,154
92,192
88,858
3,334
29,466
21,109
5,099
1,451
14,558
4,030
437
3,489
31,918*
443
3,460
32,935*
489
3,517
30,979*
462
3,705
30,969*
468
3,943
30,093
529
3,646
33,337
525
3,742
33,400
585
3,820
31,827
634
3,790
32,539
305,591
310,778
309,949
309,655
314,422
304,398
305,527
305,496
297,933
95,646
4,924
97,459
4,239
98,784
4,713
98,969
4,442
99,470
5,125
97,946
4,567
97,429
4,498
%,047
4,644
98,113
4,889
3,485
1,439
90,722
3,324
915
93,220
3,448
1,265
94,071
3,204
1,239
94,526
3,963
1,162
94,345
3,722
846
93,379
3,515
983
92,931
3,770
874
91,403
3,636
1,253
93,224
62,968
27,754
64,633
28,587
65,401
28,670
65,595
28,932
65,181
29,164
63,928
29,450
64,235
28,696
63,339
28,064
65,748
27,476
76,895
38,772
79,281
40,238
77,100
41,228
75,139
39,255
78,684
43,179
72,808
37,537
75,186
40,556
78,008
42,848
70,659
38,339
11,628
27,144
38,123
12,238
28,000
39,043
14,415
26,812
35,873
10,177
29,078
35,884
14,121
29,058
35,505
10,152
27,385
35,271
10,889
29,667
34,631
10,415
32,433
35,160
10,002
28,337
32,320
5,535
32,589
28,710
5,715
33,327
28,662
6,171
29,702
27,084
6,012
29,873
27,293
6,003
29,502
27,470
6,437
28,834
29,864
6,172
28,458
30,191
6,346
28,814
28,671
5,816
26,504
30,239
305,591
310,778
309,949
309,655
314,422
304,398
305,527
305,496
297,933
216,431*
75,390
221,570*
78,965
221,229*
76,990
220,777*
79,172
223,618
79,711
215,087
76,740
217,684
73,093
218,180
76,439
214,784
74,632
LIABILITIES
23 Deposits or credit balances owed to other
than directly-related institutions
24 Demand deposits
25 Individuals, partnerships, and
corporations
26 Other
27 Nontransaction accounts
28 Individuals, partnerships, and
corporations
29 Other
30 Borrowings from other than directlyrelated institutions
31 Federal funds purchased
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 owed to related institutions abroad
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.
5. Includes securities sold under agreements to repurchase.
6. Includes net owed 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
1.32
A25
COMMERCIAL PAPER A N D BANKERS DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
Year ending December
1993
Item
1989
1991
1990
1992
1993
July
Aug.
Sept.
Oct.
Nov.
Dec.
Commercial paper (seasonally adjusted unless noted otherwise)
525,831
2
3
4
5
531,724
214,706
213,823
n.a.
n.a.
210,930
200,036
183,379
541,285
550,463
550,108
216,245
215,077
222,981
218,077
n.a.
n.a.
n.a.
n.a.
n.a.
170,192
172,813
n.a.
545,527
210,224
228,260
n.a.
539,149
549,433
n.a.
Financial companies'
Dealer-placed paper
Total
Bank-related (not seasonally
adjusted)
Directly placed paper
Total
Bank-related (not seasonally
adjusted)
562,656
183,622
1 All issuers
172,093
169,431
170,965
177,123
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
131,279
6 Nonfinancial companies5
147,914
134,522
148,360
158,733
157,189
156,777
156,517
154,908
33,069
31,997
32,348
r
12,475r
Bankers dollar acceptances (not seasonally adjusted)6
62,972
7 Total
8
9
10
11
12
By holder
Accepting banks
Own bills
Bills bought from other banks
Federal Reserve Banks
Foreign correspondents
Others
54,771
43,770
38,194
33,120
32,572
33,041
9,433
8,510
924
9,017
7,930
1,087
11,017
9,347
1,670
10,555
9,097
1,458
12,325
10,611
1,714
11,422
10,140
1,282
12,416
10,709
1,707
12,522
10,679
1,843
12,332
10,886
1,446
10,853
1,622
12,325
10,611
1,714
1,066
52,473
918
44,836
1,739
31,014
1,276
26,364
725
19,298
582
21,116
635
19,521
637
19,882
582
20,155
650
18,872r
725
19,298
15,651
13,683
33,638
By basis
13 Imports into United States
14 Exports from United States
15 All other
13,095
12,703
28,973
12,843
10,351
20,577
12,209
8,0%
17,890
10,217
7,293
14,838
10,149
7,673
15,299
10,422
7,534
14,616
10,773
7,460
14,808
10,810
7,101
15,158
10,368
7,054
14,575
10,217
7,293
14,838
1. 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.
2. Includes all financial-company paper sold by dealers in the open market.
3. Series were discontinued in January 1989.
4. As reported by financial companies that place their paper directly with
investors.
1.33
32,348
PRIME RATE CHARGED BY BANKS
5. Includes public utilities and firms engaged primarily in such activities as
communications, construction, manufacturing, mining, wholesale and retail trade,
transportation, and services.
6. Data on bankers dollar acceptances are gathered from approximately 100
institutions. The reporting group is revised every January.
7. In 1977 the Federal Reserve discontinued operations in bankers dollar
acceptances for its own account.
Short-Term Business Loans 1
Percent per year
Period
Rate
10.00
9.50
9.00
8.50
8.00
7.50
6.50
6.00
8.46
6.25
6.00
1991
1992
1993
1991-
Average
rate
Feb.
Mar.
Apr.
May .
June
July .
Aug.
Sept.
Oct. .
Nov.
Dec.
9.52
9.05
9.00
9.00
8.50
8.50
8.50
8.50
8.20
8.00
7.58
7.21
1. The prime rate is one of several base rates that banks use to price short-term
business loans. The table shows the date on which a new rate came to be the
predominant one quoted by a majority of the twenty-five largest banks by asset
Period
1992—Jan. ...
Feb. ..
Mar. ..
Apr. ..
May ...
June ..
July ...
Aug. ..
Sept. ..
Oct. ...
Nov. ..
Dec. ..
Average
rate
6.50
6.50
6.50
6.50
6.50
6.50
6.02
6.00
6.00
6.00
6.00
6.00
Period
1993— Jan. ..
Feb. .
Mar. .
Apr. .
May ..
June .
July ..
Aug. .
Sept. ..
Oct. ...
Nov. ..
Dec. ..
1994— Jan. ...
Feb.
size, based on the most recent Call Report. 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.
A26
1.35
DomesticNonfinancialStatistics • April 1994
INTEREST RATES
M o n e y and Capital Markets
Averages, percent per year; figures are averages of business day data unless otherwise noted
1994
1993
1991
1992
1993,
week
ending
1993
1994, week ending
Oct.
Nov.
Dec.
Jan.
Dec. 31
Jan. 7
Jan. 14
Jan. 21
Jan. 2
MONEY MARKET INSTRUMENTS
1 Federal funds1,2,3
.
2 Discount window borrowing2,4
5.69
5.45
3.52
3.25
3.02
3.00
2.99
3.00
3.02
3.00
2.96
3.00
3.05
3.00
2.99
3.00
3.00
3.00
2.98
3.00
3.13
3.00
2.97
3.00
3,5,6
3
4
5
Commercial paper
1-month
3-month
6-month
5.89
5.87
5.85
3.71
3.75
3.80
3.17
3.22
3.30
3.14
3.26
3.27
3.15
3.40
3.43
3.35
3.36
3.40
3.14
3.19
3.30
3.35
3.32
3.38
3.21
3.26
3.37
3.12
3.18
3.29
3.13
3.18
3.28
3.11
3.15
3.26
6
7
8
Finance paper, directly placed3,5,7
1-month
3-month
6-month
5.73
5.71
5.60
3.62
3.65
3.63
3.12
3.16
3.15
3.08
3.16
3.13
3.08
3.25
3.19
3.21
3.19
3.18
3.07
3.11
3.15
3.20
3.18
3.18
3.13
3.18
3.20
3.05
3.09
3.15
3.06
3.11
3.13
3.03
3.07
3.13
9
10
Bankers acceptances3,5,8
3-month
6-month
5.70
5.67
3.62
3.67
3.13
3.21
3.19
3.19
3.29
3.32
3.23
3.30
3.10
3.21
3.21
3.29
3.16
3.28
3.09
3.20
3.07
3.19
3.07
3.17
11
12
13
Certificates of deposit, secondary
marker9
1-month
3-month
6-month
5.82
5.83
5.91
3.64
3.68
3.76
3.11
3.17
3.28
3.09
3.24
3.25
3.11
3.35
3.39
3.26
3.26
3.35
3.08
3.15
3.29
3.22
3.24
3.33
3.15
3.22
3.37
3.07
3.13
3.27
3.06
3.12
3.27
3.06
3.12
3.26
5.86
3.70
3.18
3.26
3.36
3.26
3.15
3.23
3.23
3.13
3.13
3.13
5.38
5.44
5.52
3.43
3.54
3.71
3.00
3.12
3.29
3.02
3.12
3.25
3.10
3.26
3.42
3.06
3.23
3.45
2.98
3.15
3.39
3.02
3.21
3.45
3.05
3.23
3.46
2.97
3.14
3.38
2.%
3.12
3.36
2.93
3.13
3.35
5.42
5.49
5.54
3.45
3.57
3.75
3.02
3.14
3.33
3.04
3.13
3.25
3.12
3.27
3.43
3.08
3.25
3.47
3.02
3.19
3.52
3.06
3.21
n.a.
3.10
3.29
n.a.
3.02
3.18
3.52
2.99
3.15
n.a.
2.96
3.14
n.a.
5.86
6.49
6.82
7.37
7.68
7.86
n.a.
8.14
3.89
4.77
5.30
6.19
6.63
7.01
n.a.
7.67
3.43
4.05
4.44
5.14
5.54
5.87
6.29
6.59
3.39
3.87
4.18
4.71
5.05
5.33
6.07
5.94
3.58
4.16
4.50
5.06
5.45
5.72
6.38
6.21
3.61
4.21
4.54
5.15
5.48
5.77
6.40
6.25
3.54
4.14
4.48
5.09
5.43
5.75
6.39
6.29
3.61
4.22
4.53
5.14
5.47
5.77
6.41
6.28
3.63
4.25
4.59
5.21
5.58
5.85
6.48
6.36
3.52
4.10
4.43
5.03
5.37
5.69
6.34
6.24
3.51
4.11
4.45
5.06
5.41
5.74
6.38
6.29
3.51
4.10
4.44
5.05
5.38
5.74
6.35
6.29
8.16
7.52
6.45
5.90
6.25
6.27
6.24
6.27
6.35
6.20
6.22
6.21
6.56
6.99
6.92
6.09
6.48
6.44
5.38
5.82
5.60
5.13
5.63
5.25
5.10
5.61
5.47
5.18
5.69
5.35
5.14
5.60
5.31
5.18
5.68
5.28
5.15
5.64
5.34
5.15
5.62
5.31
5.15
5.60
5.29
5.10
5.53
5.28
9.23
8.55
7.54
6.97
7.25
7.26
7.25
7.28
7.34
7.20
7.24
7.23
8.77
9.05
9.30
9.80
9.32
8.14
8.46
8.62
8.98
8.52
7.22
7.40
7.58
7.93
7.46
6.67
6.87
7.04
7.31
6.91
6.93
7.12
7.29
7.66
7.25
6.93
7.12
7.31
7.69
7.28
6.92
7.12
7.30
7.65
7.24
6.94
7.15
7.33
7.71
7.34
7.01
7.21
7.38
7.75
7.21
6.87
7.08
7.25
7.61
7.28
6.92
7.12
7.30
7.64
7.25
6.91
7.11
7.29
7.62
7.16
8.17
3.24
7.46
2.99
n.a.
n.a.
6.71
2.72
6.87
2.72
7.01
2.72
6.97
2.69
6.91
2.71
7.00
2.72
6.95
2.68
6.94
2.68
6.97
2.69
14 Eurodollar deposits, 3-month3,10
18
19
20
U.S. Treasury bills
Secondary market •
3-month
6-month
1-year
,.
Auction average , , u
3-month
6-month
1-year
21
22
23
24
25
26
27
28
Constant maturities12
1-year
2-year
3-year
5-year
7-year
10-year
20-year
30-year
15
16
17
U . S . TREASURY NOTES AND BONDS
Composite
29 More than 10 years (long-term)
STATE AND LOCAL NOTES AND BONDS
Moody's series13
30 Aaa
31 Baa
32 Bond Buyer series14
CORPORATE BONDS
33 Seasoned issues, all industries15
34
35
36
37
38
Rating group
Aaa
Aa
A
Baa
A-rated, recently offered utility bonds16 ..
MEMO
Dividend-price ratio17
39 Preferred stocks
40 Common stocks
1. The daily effective federal funds rate is a weighted average of rates on
trades through New York 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 11:00 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. General obligations based on Thursday figures; Moody's Investors Service.
14. General obligations only, with twenty years to maturity, issued by twenty
state and local governmental units of mixed quality. Based on figures for
Thursday.
15. Daily figures from Moody's Investors Service. Based on yields to maturity
on selected long-term bonds.
16. Compilation of the Federal Reserve. 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.
17. Standard & Poor's corporate series. Preferred stock ratio is based on a
sample of ten issues: four public utilities, four industrials, one financial, and one
transportation. Common stock ratio is based on the 500 stocks in the price index.
NOTE. Some of the 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.
Financial Markets
1.36
STOCK MARKET
All
S e l e c t e d Statistics
1994
1993
Indicator
1991
1992
1993
May
June
July
Aug.
Sept.
Nov.
Oct.
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
5 Finance
206.35
258.16
173.97
92.64
150.84
229.00
284.26
201.02
99.48
179.29
249.71
300.10
242.68
114.55
216.55
246.02
297.83
237.80
111.21
209.40
247.16
298.78
234.30
113.27
209.75
247.85
295.34
238.30
116.27
218.89
251.93
298.83
250.82
118.72
224.96
254.86
300.92
247.74
122.32
229.35
257.53
306.61
254.04
120.49
228.18
255.93
310.84
262.96
115.08
214.08
257.73
313.22
268.11
114.97
216.00
262.11
320.92
278.29
112.67
218.71
6 Standard & Poor's Corporation
(1941-43 = 10)'
376.20
415.75
451.63
445.25
448.06
447.29
454.13
459.24
463.90
462.89
465.95
472.99
7 American Stock Exchange
(Aug. 31, 1973 = 50?
360.32
391.28
438.77
429.72
436.13
434.99
444.75
454.91
472.73
472.41
465.95
481.14
179,411
12,486
202,558
14,171
263,374
n.a.
255,843
20,433
250,230
17,753
247,574
17,744
247,324
19,352
261,770
18,889
280,503
21,279
277,886
18,436
259,457
17,461
313,223
19,211
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
36,660
43,990
60,310
48,630
49,550
49,080
52,760
53,700
56,690
59,760
60,310
61,250
Free credit balances at brokers4
11 Margin accounts
12 Cash accounts
8,290
19,255
8,970
22,510
12,360
27,715
9,560
21,610
9,820
22,625
9,585
21,475
9,480
21,915
10,030
23,170
10,270
22,450
10,940
23,560
12,360
27,715
12,125
26,020
Margin requirements (percent of market value and effective date)5
Mar. 11, 1968
13 Margin stocks
14 Convertible bonds
15 Short sales
June 8, 1968
May 6, 1970
Dec. 6, 1971
Nov. 24, 1972
70
50
70
80
60
80
65
50
65
55
50
55
65
50
65
1. Effective July 1976, includes a new financial group, banks and insurance
companies. With this change the index includes 400 industrial stocks (formerly
425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40
financial.
2. 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 the 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
Jan. 3, 1974
50
50
50
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 of the option plus 20
percent of the market value of the stock underlying the option (or 15 percent in the
case of stock-index options).
A28
1.38
Domestic Financial Statistics • April 1994
FEDERAL FISCAL A N D FINANCING OPERATIONS
Millions of dollars
Fiscal year
Calendar year
1994
1993
Type of account or operation
1991
1992
1993
Aug.
U.S. budget1
1 Receipts, total
2 On-budget
3 Off-budget
4 Outlays, total
5 On-budget
6 Off-budget
7 Surplus or deficit (-), total
8 On-budget
9 Off-budget
Source of financing (total)
10 Borrowing from the public
11 Operating cash (decrease, or increase (-)) . . .
12 Other
Sept.
Oct.
Nov.
Dec.
Jan.
1,054,264
760,380
293,885
1,323,785
1,082,098
241,687
-269,521
-321,719
52,198
1,090,453
788,027
302,426
1,380,794
1,128,455
252,339
-290,340
-340,428
50,087
1,153,147
841,213
311,934
1,407,831
1,141,819
266,012
-254,684
-300,605
45,922
86,734
62,053
24,681
109,812
84,946
24,867
-23,078
-22,893
-186
127,469
98,609
28,860
118,904
90,774
28,130
8,565
7,835
730
78,668
55,864
22,804
124,090
100,568
23,523
-45,422
-44,704
-719
83,107
58,700
24,407
121,488
96,724
24,764
-38,381
-38,024
-357
125,416
99,722
25,694
133,667
121,985
11,682
-8,252
-22,263
14,012
122,968
94,398
28,570
107,355
83,164
24,191
15,613
11,234
4,379
276,802
-1,329
-5,952
310,918
-17,305
-3,273
248,619
6,283
-218
54,301
-12,652
-18,571
-9,346
-11,713
12,494
4,255
33,646
7,521
71,028
-13,450
-19,197
13,995
-17,413
11,670
-6,933
-8,089
-591
41,484
7,928
33,556
58,789
24,586
34,203
52,506
17,289
35,217
40,793
7,975
32,818
52,506
17,289
35,217
18,860
6,032
12,828
32,310
6,334
25,977
49,723
14,809
34,914
57,812
21,541
36,271
MEMO
13 Treasury operating balance (level, end of
period)
14 Federal Reserve Banks
15 Tax and loan accounts
1. In accordance with the Balanced Budget and Emergency Deficit Control Act
of 1985, all former off-budget entries are now presented on-budget. Federal
Financing Bank (FFB) activities are now shown as separate accounts under the
agencies that use the FFB to finance their programs. The act has also moved two
social security trust funds, (federal old-age survivors insurance and federal
disability insurance) off-budget. The Postal Service is included as an off-budget
item in the Monthly Treasury Statement beginning in 1990.
2. Includes special drawing rights (SDRs); reserve position on the U.S. quota
in the International Monetary Fund (IMF); loans to the IMF; other 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. U.S. Department of the Treasury, Monthly Treasury Statement of
Receipts and Outlays of the U.S. Government and Office of Management and
Budget, Budget of the U.S. Government.
Federal Finance
1.39
A29
U.S. BUDGET RECEIPTS A N D OUTLAYS1
Millions of dollars
Calendar year
Fiscal year
1992
1994
1993
1993
1992
Source or type
1993
HI
H2
HI
H2
Nov.
Dec.
Jan.
RECEIPTS
1,090,453
1 All sources
1?
13
Individual income taxes, net
Withheld
Presidential Election Campaign Fund
Nonwithheld
Refunds
Corporation income taxes
Gross receipts
Refunds
Social insurance taxes and contributions,
net
Employment taxes and
contributions2
Self-employment 3
taxes and
contributions
Unemployment insurance
Other net receipts4
14
15
16
17
Excise taxes
Customs deposits
Estate and gift taxes 5
Miscellaneous receipts
7
3
4
6
7
8
9
10
11
1,153,147
560,318
540,472
593,187
582,020
83,107
125,416
122,968
475,964
408,352
30
149,342
81,760
509,680
430,427
28
154,772
75,546
236,576
198,868
20
110,995
73,308
246,938
215,584
10
39,288
7,942
255,556
210,066
25
113,482
67,468
262,073
228,429
2
41,765
8,114
37,634
37,823
-27
1,945
2,107
54,183
51,184
0
3,501
502
74,167
36,838
1
37,798
470
117,951
17,680
131,548
14,027
61,682
9,403
58,022
7,219
69,044
7,198
68,266
6,514
2,855
647
28,%3
725
4,761
844
413,689
428,300
224,569
192,599
227,177
206,174
34,683
33,954
36,983
192,749
31,525
33,273
35,831
0
259
423
-1,589
794
358
385,491
396,939
208,110
180,758
208,776
24,421
23,410
4,788
20,604
26,556
4,805
20,434
14,070
2,389
3,988
9,397
2,445
16,270
16,074
2,326
4,335
11,010
2,417
0
2,773
385
45,569
17,359
11,143
26,459
48,057
18,802
12,577
18,211
22,389
8,146
5,701
10,658
23,456
9,497
5,733
11,446
23,398
8,860
6,494
9,854
25,994
10,215
6,617
9,192
4,808
1,688
1,305
781
4,695
1,584
1,179
1,582
4,011
1,526
1,105
1,260
1,380,856
1,407,831
704,266
723,515
673,315
728,165
121,488
133,667
107,355
298,350
16,107
16,409
4,499
20,025
15,205
290,590
17,175
17,055
4,445
20,088
20,257
147,065
8,540
7,951
1,442
8,594
7,526
155,231
9,916
8,521
3,109
11,467
8,852
140,535
6,565
7,9%
2,462
8,588
11,824
146,177
10,534
8,904
1,641
11,077
7,335
22,990
1,964
1,522
510
2,784
2,237
26,809
548
1,4%
385
1,567
3,074
18,861
1,103
1,299
465
1,447
1,122
10,118
33,333
6,838
-23,532
35,238
10,395
15,615
15,651
3,903
-7,697
18,425
4,464
-15,112
16,077
4,935
-1,724
20,375
5,606
-1,361
3,248
930
1,126
3,714
772
-1,124
2,503
906
45,250
48,872
23,767
21,241
24,057r
25,515
5,098
4,455
2,693
7,665
36,009
16,1%
2,151
1,210
669
17,095
-2,914
OUTLAYS
18 All types
19 National defense
70 International affairs
?1 General science, space, and technology . . . .
77 Energy
73 Natural resources and environment
24 Agriculture
75
76
27
28
Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, and
social services
79 Health
30 Social security and Medicare
31 Income security
37
33
34
35
36
Veterans benefits and services
Administration of justice
General government
Net interest6
Undistributed offsetting receipts
89,497
406,569
196,891
99,249
435,137
207,933
44,164
205,500
104,537
47,232
232,109
98,382
49,882
195,933r
108,484
52,631
223,735
103,163
8,675
37,047
16,764
8,906
39,720
19,771
34,133
14,426
12,945
199,439
-39,280
35,715
14,983
13,039
198,870
-37,386
15,597
7,435
5,050
100,161
-18,229
18,561
7,238
8,223
98,692
-20,628
16,385
7,463
5,205
99,635
-17,035
19,848
7,448
6,565
99,%3
-20,407
3,198
1,306
1,317
16,171
-2,910
4,469
1,244
1,708
16,638
-2,737
1. Functional details do not sum to total outlays for calendar year data because
revisions to monthly totals have not been distributed among functions. Fiscal year
total for outlays does not correspond to calendar year data because revisions from
the Budget have not been fully distributed across months.
2. Old-age, disability, and hospital insurance, and railroad retirement accounts.
3. Old-age, disability, and hospital insurance.
4. Federal employee retirement contributions and civil service retirement and
disability fund.
5. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts.
6. Includes interest received by trust funds.
7. Consists of rents and royalties for the outer continental shelf and U.S.
government contributions for employee retirement.
SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of
Receipts and Outlays of the U.S. Government, and the U.S. Office of Management and Budget, Budget of the U.S. Government, Fiscal Year 1994.
A30
1.40
DomesticNonfinancialStatistics • April 1994
F E D E R A L D E B T SUBJECT TO S T A T U T O R Y LIMITATION
Billions of dollars, end of month
1991
1992
1993
Item
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
1 Federal debt outstanding
3,820
3,897
4,001
4,083
4,196
4,250
4,373
4,436
n.a.
2 Public debt securities
3 Held by public
4 Held by agencies
3,802
2,833
969
3,881
2,918
964
3,985
2,977
1,008
4,065
3,048
1,016
4,177
3,129
1,048
4,231
3,188
1,043
4,352
3,252
1,100
4,412
3,295
1,117
4,536
n.a.
n.a.
19
19
0
16
16
0
16
16
0
18
18
0
19
19
0
20
20
0
21
21
0
25
25
0
3,707
3,784
3,891
3,973
4,086
4,140
4,256
4,316
4,446
3,706
0
3,783
0
3,890
0
3,972
0
4,085
0
4,139
0
4,256
0
4,315
0
4,445
0
4,145
4,145
4,145
4,145
4,145
4,145
4,370
4,900
4,900
5 Agency securities
6 Held by public
7 Held by agencies
8 Debt subject to statutory limit
9 Public debt securities
10 Other debt1
MEMO
11 Statutory debt limit
1. Consists of guaranteed debt of U.S. Treasury and other federal agencies,
specified participation certificates, notes to international lending organizations,
and District of Columbia stadium bonds.
1.41
GROSS PUBLIC D E B T OF U.S. TREASURY
Dec. 31
n.a.
n.a.
n.a.
SOURCES. U.S. Department of the Treasury, Monthly Statement of the Public
Debt of the United States and Treasury Bulletin.
T y p e s and O w n e r s h i p
Billions of dollars, end of period
1993
Type and holder
1990
1991
1992
1993
Q1
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
Nonmarketable1
State and local government series
Foreign issues
Government
Public
Savings bonds and notes 3
Government account series
Non-interest-bearing
By holder4
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 investors6
Q3
04
3,364.8
3,801.7
4,177.0
4,535.7
4,230.6
4,352.0
4,411.5
4,535.7
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
4,173.9
2,754.1
657.7
1,608.9
472.5
1,419.8
153.5
37.4
37.4
.0
155.0
1,043.5
3.1
4,532.3
2,989.5
714.6
1,764.0
495.9
1,542.9
149.5
43.5
43.5
.0
169.4
1,150.0
3.4
4,227.6
2,807.1
659.9
1,652.1
480.2
1,420.5
151.6
37.0
37.0
.0
161.4
1,040.0
3.0
4,349.0
2,860.6
659.3
1,698.7
487.6
1,488.4
152.8
43.0
43.0
.0
164.4
1,097.8
2.9
4,408.6
2,904.9
658.4
1,734.2
497.4
1,503.7
149.5
42.5
42.5
.0
167.0
1,114.3
2.9
4,532.3
2,989.5
714.6
1,764.0
495.9
1,542.9
149.5
43.5
43.5
.0
169.4
1,150.0
3.4
828.3
259.8
2,288.3
171.5
45.4
142.0
108.9
490.4
968.7
281.8
2,563.2
233.4
80.0
168.7
150.8
520.3
1,047.8
302.5
2,839.9
294.0
79.4
197.5
192.5
534.8
1,043.2
305.2
2,895.0
310.0
77.7
205.0
199.3
541.0
1,099.8
328.2
2,938.4
305.9
76.2
208.1
206.1
553.9
1,116.7
325.7
2,983.0
306.0
75.2
210.0
215.6
558.0
126.2
107.6
458.4
637.7
138.1
125.8
491.8
651.3
157.3
131.9
549.7
702.4
163.6
134.1
565.5
698.8
166.5
136.4
568.2
717.0
169.1
136.7
592.3
720.0
1. Includes (not shown separately) securities issued to the Rural Electrification
Administration, depository bonds, retirement plan bonds, and individual retirement bonds.
2. Nonmarketable series denominated in dollars, and series denominated in
foreign currency held by foreigners.
3. Held almost entirely by U.S. Treasury and other federal agencies and trust
funds.
4. Data for Federal Reserve Banks and U.S. government agencies and trust
funds are actual holdings; data for other groups are Treasury estimates.
Q2
n.a.
n.a.
5. Consists of investments of foreign balances and international accounts in the
United States.
6. Includes savings and loan associations, nonprofit institutions, credit unions,
mutual savings banks, corporate pension trust funds, dealers and brokers, certain
U.S. Treasury deposit accounts, and federally sponsored agencies.
SOURCES. U.S. Treasury Department, data by type of security, Monthly
Statement of the Public Debt of the United States; data by holder, Treasury
Bulletin.
Federal Finance
1.42
U.S. GOVERNMENT SECURITIES DEALERS
A31
Transactions 1
Millions of dollars, daily averages
1993
1994, week ending
1993, week ending
Item
Oct.
Nov.
Dec.
Dec. 1
Dec. 8
Dec. 15
Dec. 22
Dec. 29
Jan. 5
Jan. 12
Jan. 19
Jan. 26
IMMEDIATE TRANSACTIONS2
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, by maturity
Less than 3.5 years
6
7
3.5 to 7.5 years
7.5 years or more
8
Mortgage-backed
Pass-throughs
9
All others
10
11
12
13
14
15
16
By type of counterparty
Pnmary dealers and brokers
U.S. Treasury securities
Federal agency securities
Debt
Mortgage-backed
Customers
U.S. Treasury securities
Federal agency securities
Debt
Mortgage-backed
39,670
47,256
42,139*
40,470
45,673
45,239
44,246
31,220
43,782
56,342
51,408
49,569
44,600
43,354
25,444
19,347
52,959
45,242r
26,974
17,995
37,291
29,891rr
16,803
13,255
42,476
33,781r
21,366
14,026
42,231
34,110
22,327
16,112
40,198
33,731
19,007
16,105
40,743
32,879
14,369
11,926
22,716
16,731
9,275
7,553
33,911
23,403
15,890
13,410
56,702
47,976
28,728
23,445
50,456
42,734
27,412
15,884
59,234
43,117
25,100
18,133
9,959
734
567
9,971
718
396
9,999 r
53 l
466
9,505
398
273
9,858
785
572
9,438
583
706
10,390
474
365
10,248
303
212
11,056
326
447
11,091
1,359
530
10,539
552
650
12,554
635
635
20,766
2,853
22,489
3,064
19,388r
2,771
18,113
3,006
21,419
3,133
24,269
3,218
17,601
2,890
12,630
1,523
22,071
2,878
33,767
4,423
26,807
2,735
22,607
4,508
106,341
120,636
84,926
93,917
99,035
95,238
87,382
50,896
77,673
130,373
115,818
122,419
1,487
10,194
1,623
10,965
1,308
9,067
1,585
9,436
1,518
8,942
1,508
11,425
1,032
8,413
915
6,509
1,939
11,032
1,675
16,333
1,497
12,308
2,096
13,552
66,073
69,791r
54,454r
58,202r
61,417
59,043
56,782
36,599
52,724
82,819
72,075
72,734
9,688
13,091
8,592
11,683
9,698
15,610
9,219
16,061
10,197
12,078
9,848
7,644
9,890
13,917
11,304
21,857
10,244
17,234
11,728
13,562
9,773
13,427
9,461
14,589
r
FUTURES 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, by maturity
Less than 3.5 years
22
3.5 to 7.5 years
23
24
7.5 years or more
Mortgage-backed
Pass-throughs
25
Others3
26
2,445
2,746
1,740
2,543
2,616
1,592
1,474
792
2,414
2,611
1,348
1,327
1,603
1,530
3,153
11,266
2,276
2,158
4,192
12,704
1,756
1,809
2,930r
8,686
1,976
2,259
3,879
10,260
1,785
1,763
4,020
11,751
1,648
1,751
2,725
9,968
2,262
2,673
3,034
7,336
1,200
858
1,540
4,355
1,626
1,373
2,590
9,460
2,800
2,184
3,509
13,298
1,959
1,466
3,395
10,953
2,197
2,562
2,990
11,822
47
107
33
77
93
29
29
49
83
31
52
37
14
57
73
22
64
136
13
13
71
49
66
9
139
33
269
84
98
9
105
93
30
148
77
73
26,416
2,283
26,164
1,916
17,858
1,745
16,068
819
19,839
1,079
28,154
1,116
14,250
3,142
7,268
1,893
18,660
1,573
35,613
1,454
26,246
1,457
21,805
2,365
1,956
699
610
1,782
2,121
618
770
2,121r
1,633
327
636
l,212r
1,452
208
560
l,371r
1,821
315
561
1,388
1,208
266
587
1,306
1,258
487
663
616
1,900
417
710
2,642
3,004
1,338
1,257
2,265
1,991
767
2,097
1,799
1,751
460
821
2,158
888
941r
548
936r
748
247
199
923
1,510
735
761
OPTIONS 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 are based on the number of trading
days in the period. Immediate, forward, and futures transactions are reported at
principal value, which does not include accrued interest; options 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 agency
securities include purchases and sales for which delivery is scheduled in thirty business
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).
2,154
277
737
1,100*
774
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 business
days. Forward contracts for mortgage-backed agency securities are included
when the time to delivery is more than thirty business 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, "n.a." indicates that data are not published
because of insufficient activity.
Data for several types of options transactions—U.S. Treasury securities, bills;
Federal agency securities, debt; and federal agency securities, mortgage-backed,
other than pass-throughs—are no longer available because activity is insufficient.
A32
1.43
DomesticNonfinancialStatistics • April 1994
U.S. G O V E R N M E N T SECURITIES DEALERS
Positions and Financing 1
Millions of dollars
1993
1993, week ending
1994, week ending
item
Oct.r
Nov.
Dec.
Dec. 1
Dec. 8
Dec. 15
Dec. 22
Dec. 29
Jan. 5
Jan. 12
Jan. 19
2
Positions
NET IMMEDIATE POSITIONS3
1
2
3
4
5
6
7
8
9
10
11
12
13
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, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 years or more
Mortgage-backed
Pass-throughs
All others
Other money market instruments
Certificates of deposit
Commercial paper
Bankers acceptances
2,563
16,062
15,015
13,370
13,655
21,762
16,961
9,657
8,922
8,475
10,200
-2,892
-22,475
-6,600
6,353
-3,830
-24,582
-890
3,050
-7,939
-18,634
-1,907
777
-7,960
-22,120
-2,009
1,019
-11,761
-22,873
-331
2,053
-10,823
-20,969
-1,680
-1,987
-4,585
-15,272
-3,332
-31
-4,592
-16,051
-1,895
3,421
-7,904
-14,691
-3,227
-560
-3,562
-16,990
-2,241
1,090
-7,940
-17,198
-2,803
-817
11,012
3,374
4,497
9,381
3,189
4,089
8,277
3,368
4,550
8,028
3,295
4,206
6,542
3,546
4,354
9,113
3,398
4,371
10,756
3,516
4,754
6,9%
3,197
4,738
7,348
2,763
4,657
7,648
3,247
5,365
9,206
2,684
5,683
52,587
37,476
44,808r
34,467r
39,223
29,892
27,645
33,054
37,094
31,333
39,944
30,959
42,441
27,805
39,905
28,108
36,295
33,083
51,597
32,235
51,938
31,241
3,363
6,456
1,287
3,428
7,595
1,432
3,490
7,584
1,186
3,879
9,522
1,490
2,939
5,806
1,383
3,210
10,059
1,200
4,003
7,984
1,054
3,557
6,758
1,132
4,167
5,667
944
3,028
4,591
918
4,216
6,612
1,241
4,571
4,475
205
1,855
-1,999
-1,708
1,514
2,149
2,409
-3,743
-3,429
-618
2,548
10,412
-3,029
-952
1,646
10,952
-1,670
-1,448
556
8,422
-3,984
-901
307
9,931
-2,496
-2,150
1,380
8,750
-3,941
-1,965
982
9,083
-2,877
-1,461
-156
7,424
-4,551
-802
-446
7,855
-5,745
328
2,298
9,690
-607
-1,709
1,248
5,906
-5,716
-2,041
1,933
6,081
-4,584
26
-111
26
15
68
-8
34
90
48
23
18
-47
13
-32
-17
-25
-7
158
18
-6
-5
41
354
80
358
309
6
291
245
29
419
541
-549
-37,665 -21,894rr -10,903
6,104
1,636
2,508
-226,017 -226,180 -227,414
-2,456
-240
-225,477
-13,310
248
-232,840
-10,046
321
-229,415
-12,517
3,241
-223,011
-8,%5
3,526
-228,009
-10,830
-198
-215,709
-29,710
770
-216,323
-29,595
354
-205,719
FUTURES AND FORWARD POSITIONS5
By type of deliverable security
U.S. Treasury securities
14 Bills
Coupon securities, by maturity
15
Less than 3.5 years
16
3.5 to 7.5 years
17
7.5 to 15 years
15 years or more
18
Federal agency securities
Debt, by maturity
19
Less than 3.5 years
20
3.5 to 7.5 years
21
7.5 years or more
Mortgage-backed
22
Pass-throughs
23
All others4^
24 Certificates of deposit
Financing6
Reverse repurchase agreements
25 Overnight and continuing
26 Term
237,187
412,711
228,941r
409,166r
226,529
392,778
231,715r
366,248
226,668
392,063
239,877
399,619
222,401
401,470
214,327
389,%9
233,887
364,009
253,989
406,009
255,207
407,166
Repurchase agreements
27 Overnight and continuing
28 Term
439,475
372,947
435,256r
380,453r
441,518
368,885
458,032
313,364
429,671
355,118
478,417
362,142
439,708
399,841
416,722
382,285
438,703
313,183
449,875
372,708
478,024
378,689
Securities borrowed
29 Overnight and continuing
30 Term
136,213
43,336
135,679r
47,1 Iff
139,232r
47,034
140,054r
46,266
138,784
48,687
142,946
47,007
141,172
46,527
133,929
46,039
139,167
46,990
140,740
49,881
143,646
49,870
Securities loaned
31 Overnight and continuing
32
6,001
1,988
6,075
2,556
5,564r
2,386
6,341
2,488
5,225
2,717
5,384
2,993
4,877
2,390
6,623
1,701
5,694
1,428
5,904
1,349
6,608
1,392
Collateralized loans
33 Overnight and continuing
16,408
13,409*
16,326r
ll,818r
15,896
15,134
15,436
18,403
20,109
19,519
14,661
MEMO: Matched book
Reverse repurchase agreements
34 Overnight and continuing
35
158,878
359,496
158,777
361,099r
153,280
345,268
159,402
325,273
157,012
345,235
158,680
352,688
152,487
352,448
141,053
339,550
163,828
324,300
175,255
365,598
176,176
368,183
Repurchase agreements
36 Overnight and continuing
37 Term
233,495
281,344
223,461r
285,451
210,901
275,439
230,579*
238,359
221,064
265,942
218,183
270,309
200,899
299,486
195,575
282,924
228,655
234,808
236,862
285,927
243,076
284,351
7
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. Weeklyfiguresare close-of-business Wednesday data; monthly figures are averages of weekly 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 that settle
on the issue date of offering. Net immediate positions of mortgage-backed agency
securities include securities purchased or sold that have been delivered or are
scheduled to be delivered in thirty business days or less.
4. Includes such securities as collateralized mortgage obligations (CMOs), real
estate mortgage investment conduits (REMICs), interest-only securities (IOs),
and principal-only securities (POs).
5. Futures positions reflect standardized agreements arranged on an exchange.
Forward positions reflect agreements made in the over-the-counter market that
specify delayed delivery. All futures positions 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 business days.
Forward contracts for mortgage-backed agency securities are included when the
time to delivery is more than thirty business 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 thefinancingbreakdowns given above. The reverse repurchase and repurchase
numbers are not always equal because of the "matching" of securities of different
values or different types of collateralization.
NOTE. Data for futures and forward commercial paper and bankers acceptances and
for term financing of collateralized loans are no longer available because of insufficient
activity.
Federal Finance
1.44
F E D E R A L A N D F E D E R A L L Y SPONSORED CREDIT AGENCIES
A33
D e b t Outstanding
Millions of dollars, end of period
1993
Agency
1990
1989
1991
1992
July
1 Federal and federally sponsored agencies
2 Federal agencies
3 Defense Department1
4 Export-Import Bank '
5 Federal Housing Administration
6 Government National Mortgage Association certificates of
participation
7 Postal Service6
8 Tennessee Valley Authority
9 United States Railway Association6
10 Federally sponsored agencies7
11 Federal Home Loan Banks
12 Federal Home Loan Mortgage Corporation
Federal National Mortgage Association
n
14 Farm Credit Banks8
15 Student Loan Marketing Association
16 Financing Corporation
17 Farm Credit Financial Assistance Corporation
18 Resolution Funding Corporation
MEMO
19 Federal Financing Bank debt 3
20
21
77
23
24
Lending to federal and federally sponsored agencies
Export-Import Bank3
Postal Service6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association6
Other lending14
75 Farmers Home Administration
7,6 Rural Electrification Administration
27
Sept.
Nov.
Oct.
411,805
434,668
442,772
483,970
522,494
544,642
0
0
0
35,664
7
10,985
328
42,159
7
11,376
393
41,035
7
9,809
397
41,829
7
7,208
374
44,656
7
6,258
97
44,816
7
6,258
154
43,753
7
5,801
213
43,796
7
5,801r
243
44,055
7
5,801
255
0
6,445
17,899
0
0
6,948
23,435
0
0
8,421
22,401
0
0
10,660
23,580
0
0
10,182
28,112
0
0
10,182
28,215
0
0
9,732
28,000
0
0
9,732
28,016
0
0
9,732
28,260
0
375,428
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
401,737
107,543
30,262
133,937
52,199
38,319
8,170
1,261
29,9%
442,141
114,733
29,631
166,300
51,910
39,650
8,170
1,261
29,9%
477,838
125,448
42,291
180,730
51,698
37,801
8,170
1,261
29,996
499,826
129,808
55,421
184,924
51,406
38,397
8,170
1,261
29,9%
0
132,651
52,702
195,786
51,636
38,795
8,170
1,261
29,9%
0
133,365
63,427
193,925
51,759
0
8,170
1,261
29,9%
0
0
56,809
195,165
51,861
0
8,170
1,261
29,9%
134,873
179,083
185,576
154,994
132,307
128,616
129,329
127,348
126,490
10,979
6,195
4,880
16,519
0
11,370
6,698
4,850
14,055
0
9,803
8,201
4,820
10,725
0
7,202
10,440
4,790
6,975
0
6,252
10,182
4,790
6,575
0
6,252
10,182
4,790
6,325
0
5,795
9,732
4,790
6,325
0
5,795
9,732
4,760
6,325
0
5,795
9,732
4,760
6,325
0
53,311
19,265
23,724
52,324
18,890
70,896
48,534
18,562
84,931
42,979
18,172
64,436
39,129
17,883
47,4%
38,619
17,897
44,551
38,619
17,653
46,415
38,619
17,561
44,556
38,619
17,561
43,698
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 since 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 beforefiscalyear 1969 by the Government
National Mortgage Association acting as trustee for the Farmers Home Administration, the Department of Health, Education, and Welfare, the Department of
Housing and Urban Development, the 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 on 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.
Aug.
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. Because 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
are loans guaranteed by numerous agencies, with the amounts guaranteed by any
one agency generally being small. The Farmers Home Administration entry
consists exclusively of agency assets, whereas the Rural Electrification Administration entry consists of both agency assets and guaranteed loans.
A34
1.45
DomesticNonfinancialStatistics • April 1994
N E W SECURITY ISSUES
T a x - E x e m p t State and L o c a l G o v e r n m e n t s
Millions of dollars
1994
1993
Type of issue or issuer,
or use
1991
1992
1993
June
1
1 All issues, new and refunding
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
29,276
154,402 215,191 279,945
July
24,087
24,438
23,504
21,900
18,094
24,520
15,622
By type of issue
2 General obligation
3 Revenue
55,100
99,302
78,611
136,580
90,599
189,346
9,614
19,662
8,537
15,550
6,414
18,024
5,884
17,620
7,495
14,405
6,422
11,672
6,542
17,978
4,622
11,000
By type of issuer
4 State
5 Special district or statutory authority2
6 Municipality, county, or township
24,939
80,614
48,849
25,295
129,686
60,210
n.a.
n.a.
n.a.
3,562
18,821
6,835
2,944
12,398
8,616
2,319
13,769
8,307
2,758
13,113
7,476
3,216
9,875
8,418
885
10,992
4,528
n.a.
n.a.
n.a.
1,235
10,025
4,362
91,434
9,502
8,751
8,001
8,759
7,261
6,734
9,543
5,442
17,098
9,571
11,802
n.a.
6,381
29,519
2,208
772
1,629
2,073
1,042
1,634
1,723
653
922
1,555
429
3,453
1,883
1,062
1,646
681
212
2,544
1,886
789
1,255
2,199
329
2,362
547
304
593
1,764
518
3,737
1,416
979
687
n.a.
673
1,820
1,227
429
1,454
2,171
1,272
2,990
1,634
305
325
n.a.
488
1,637
116,953 120,272
7 Issues for new capital
8
9
10
11
12
13
By use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
21,121
13,395
21,039
25,648
8,376
30,275
22,071
17,334
20,058
21,796
5,424
33,589
1. Par amounts of long-term issues based on date of sale.
2. Includes school districts.
1.46
N E W SECURITY ISSUES
SOURCES. Securities Data Company beginning January 1993; Investment
Dealer's Digest before then.
U . S . Corporations
Millions of dollars
Type of issue, offering,
or issuer
1993
1991
1992
1993
May
June
July
Aug.
Sept.
Oct/
Nov.r
Dec.
1 All issues1
465,246r
559,729""
n.a.
43,181r
66,164r
47,828r
52,745r
64,545r
56,143
54,813
44,115
2 Bonds2
389,822
471,404r
n.a.
34,483r
56, yiff
38,032r
43,478r
r
53,887
45,608
43,214
33,584
r
r
r
r
By type of offering
3 Public, domestic
4 Private placement, domestic3
5 Sold abroad
286,930
74,930
27,962
377,960'
65,853
27,591
486,463
n.a.
39,401
31,154
n.a.
3,329
51,693
n.a.
4,677r
37,392
n.a. r
640
40,237
n.a.
3,241r
49,182
n.a.
4,705r
42,645
n.a.
2,%3
39,525
n.a.
3,689
32,002
n.a.
1,582
86,628
36,666
13,598
23,944r
9,431
219,555r
82,058r
43,043r
9,979
48,055
15,394r
272,875
67,152
37,257
8,046
52,532
29,040
331,838
3,75c
3,015
685
3,017
1,820
22,1%
8,607r
2,630"^
948
5,874
2,473r
35,838
2,498r
4,735r
611
5,797r
2,331
22,060"^
6,132
2,331
723
3,264
2,979r
28,049
4,036r
2,378r
288
5,163
2,237r
39,785
3,203
6,376
1,416
2,585
2,991
29,039
3,334
3,078
648
1,763
1,015
33,376
3,068
2,348
895
2,336
2,001
22,936
12 Stocks2
75,424
88,325
111,262
8,698
9,794
9,596
9,267
10,658r
10,535
11,599
10,531
By type of offering
13 Public preferred
14 Common
15 Private placement3
17,085
48,230
10,109
21,339
57,118
9,867
20,533
90,559
n.a.
3,124
5,574
n.a.
876
8,918
n.a.
1,913
7,683
n.a.
3,319
5,948
n.a.
1,358
9,336r
n.a.
2,549
7,987
n.a.
1,385
10,209
n.a.
650
9,881
n.a.
24,111
19,418
2,439
3,474
475
25,507
22,723
20,231
2,595
6,532
2,366
33,879
22,471
26,041
2,237
7,015
3,439
49,889
1,413
2,836
111
753
279
3,307
1,982
2,025
168
893
65
4,660
1,618
2,525
114
495
n.a.
4,844
1,961
1,457
466
582
115
4,675
2,274
2,242
153
873
248r
4,666
2,121
1,842
128
1,103
18
5,323
2,169
3,061
221
371
1,074
4,486
2,267
1,975
162
129
1,603
4,380
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., Securities Data Company, and the
Board of Governors of the Federal Reserve System.
Securities Market and Corporate Finance A35
1.47
N e t S a l e s and A s s e t s 1
O P E N - E N D INVESTMENT COMPANIES
Millions of dollars
1993
1992
Item
1993
Aug.
May
1 Sales of own shares2
647,055
2 Redemptions of own shares
3 Net sales3
4
447,140
199,915
4 Assets
73,999
982,311
68,373
72,503
73,032
Oct.
69,938
Nov/
74,490
Dec.
72,865
89,535
38,752
21,759
46,923
21,650
44,922
27,581
46,382
26,650
49,270
20,667
47,168
27,322
51,306
21,559
1
1
1,219,863
1,255,377
1,284,842
1,343,920
1,370,654
1,411,628
1,416,841
1,452,101
85,677
1,134,186
84,177
1,171,200
93,345
1,191,497
92,771
1,251,149
96,848
1,273,807
104,301
1,307,327
103,352
1,303,489
99,371
1,352,730
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 net income dividends. Excludes reinvestment of
capital gains distributions and share issue of conversions from one fund to another
in the same group.
3. Excludes sales and redemptions resulting from transfers of shares into or out
of money market mutual funds within the same fund family.
1.48
Sept.
62,722
26,813
1
1,056,310
5 Cash5
6 Other
July
60,504
F
June
CORPORATE PROFITS A N D THEIR DISTRIBUTION
Billions of dollars; quarterly data at seasonally adjusted annual rates
1993
1992
1991
Account
1992
1993
Q1
1 Profits with inventory valuation and
capital consumption adjustment
2 Profits before taxes
3 Profits tax liability
4 Profits after taxes
5 Dividends
6 Undistributed profits
Q2
Q3
Q4
Q1
Q2
Q3
Q4
369.5
362.3
129.8
232.5
137.4
95.2
n.a.
n.a.
n.a.
n.a.
169.0
n.a.
409.9
404.3
147.0
257.3
138.0
119.3
411.7
409.5
153.0
256.5
146.1
110.4
367.5
357.9
130.1
227.8
155.2
72.7
439.5
409.9
155.0
254.9
162.9
92.0
432.1
419.8
160.9
258.9
167.5
91.4
458.1
445.6
173.3
272.3
168.5
103.9
468.5
443.8
169.5
274.3
169.7
104.6
n.a.
n.a.
n.a.
n.a.
170.4
n.a.
4.9
2.2
7 Inventory valuation
8 Capital consumption adjustment
407.2
395.4
146.3
249.1
150.5
98.6
-5.3
17.1
-7.8
24.3
-4.6
10.2
-13.7
16.0
-7.8
17.4
4.9
24.7
-12.7
25.1
-12.2
24.7
1.0
23.8
-7.2
23.6
SOURCE. U.S. Department of Commerce, Survey of Current Business.
1.50
NONFARM BUSINESS EXPENDITURES
N e w Plant and E q u i p m e n t
Billions of dollars; quarterly data at seasonally adjusted annual rates
1992
Industry
1992
1993
1994
1993
19941
Q2
Q3
Q4
Ql
Q2
Q3
Q41
Ql 1
1 Total nonfarm business
546.60
584.64
616.50
541.41
547.40
559.24
564.13
579.79
594.11
600.53
616.38
Manufacturing
2 Durable goods industries
3 Nondurable goods industries
73.32
100.69
81.49
97.97
84.93
101.34
74.07
97.91
72.09
100.77
73.30
103.56
79.11
95.94
80.88
96.21
81.99
100.18
83.99
99.53
87.50
98.72
Nonmanufacturing
4 Mining
Transportation
5 Railroad
6 Air
7 Other
Public utilities
8 Electric
9 Gas and other
10 Commercial and other2
8.88
10.13
10.84
9.20
8.98
8.47
8.89
9.10
11.14
11.37
10.83
6.67
8.93
7.04
6.20
6.83
9.34
6.21
4.45
10.25
6.32
9.65
7.19
6.70
9.69
7.52
7.04
7.60
6.97
6.00
7.30
9.17
6.00
6.54
9.04
5.91
6.92
8.88
6.90
6.57
10.26
6.32
4.64
10.53
48.22
23.99
268.84
51.82
23.17
297.69
57.00
24.42
317.05
48.35
24.29
264.46
48.17
24.01
269.46
49.57
24.50
278.24
49.92
23.59
284.21
50.51
24.04
297.46
52.74
22.88
303.47
54.11
22.19
305.61
54.16
23.62
320.06
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. U.S. Department of Commerce, Survey of Current Business.
A36
1.51
DomesticNonfinancialStatistics • April 1994
DOMESTIC FINANCE COMPANIES
A s s e t s and Liabilities 1
Billions of dollars, end of period; not seasonally adjusted
1992
Account
1990
1991
1993
1992
Q
L
Q2
Q3
Q4
QL
Q2
Q3r
ASSETS
1 Accounts receivable, gross2
2 Consumer
3 Business
4 Real estate
492.3
133.3
293.6
65.5
480.6
121.9
292.9
65.8
482.1
117.1
296.5
68.4
475.6
118.4
290.8
66.4
476.7
116.7
293.2
66.8
473.9
116.7
288.5
68.8
482.1
117.1
296.5
68.4
469.6
111.9
289.6
68.1
469.3
111.3
290.7
67.2
467.6
112.6
287.8
67.2
57.6
9.6
55.1
12.9
50.8
15.8
53.6
13.0
51.2
12.3
50.8
12.0
50.8
15.8
47.4
15.5
47.5
13.8
47.9
11.1
7 Accounts receivable, net
8 All other
425.1
113.9
412.6
149.0
415.5
150.6
409.0
145.5
413.2
139.4
411.1
146.5
415.5
150.6
406.6
155.0
408.0
156.6
408.6
169.7
9 Total assets
539.0
561.6
566.1
554.5
552.6
557.6
566.1
561.6
564.6
578.3
31.0
165.3
42.3
159.5
37.6
156.4
38.0
154.4
37.8
147.7
38.1
153.2
37.6
156.4
34.1
149.8
29.5
144.5
25.8
149.9
n.a.
n.a.
37.5
178.2
63.9
63.7
n.a.
n.a.
34.5
191.3
69.0
64.8
n.a.
n.a.
37.8
195.3
71.2
67.8
n.a.
n.a.
34.5
189.8
72.0
66.0
n.a.
n.a.
34.8
191.9
73.4
67.1
n.a.
n.a.
34.9
191.4
73.7
68.1
n.a.
n.a.
37.8
195.3
71.2
67.8
n.a.
n.a.
41.9
195.1
74.2
66.6
n.a.
n.a.
46.4
195.8
81.3
67.1
n.a.
n.a.
47.9
198.1
87.6
68.9
539.6
561.2
566.1
554.6
552.7
559.4
566.1
561.7
564.6
578.3
Oct.
Nov.
Dec.
5 LESS: Reserves for unearned income
6
Reserves for losses
LIABILITIES AND CAPITAL
10 Bank loans
11 Commercial paper
12
13
14
15
16
17
Debt
Other short-term
Long-term
Owed to parent
Not elsewhere classified
All other liabilities
Capital, surplus, and undivided profits
18 Total liabilities and capital
1. Includes finance company subsidiaries of bank holding companies but not of
retailers and banks. Data are amounts carried on the balance sheets of finance
companies; securitized pools are not shown, as they are not on the books.
1.52
DOMESTIC FINANCE COMPANIES
2. Before deduction for unearned income and losses,
C o n s u m e r , Real Estate, and B u s i n e s s Credit 1
Millions of dollars, amounts outstanding, end of period
1993
Type of credit
1991
1992
1993
July
Aug.
Sept.
Seasonally adjusted
1 Total
519,910
534,845
532,616
523,539
525,744
527,819
529,310
532,687r
532,616
2 Consumer 2
3 Real estate
4 Business
154,822
65,383
299,705
157,707
68,011
309,127
159,359
68,781
304,475
153,228
67,426
302,885
153,420
67,216
305,108
154,707
66,871
306,241
155,700
67,983
305,627
157,438r
68,540
306,709*
159,359
68,781
304,475
Not seasonally adjusted
5 Total
6 Consumer
7 Motor vehicles
8 Other consumer
9 Securitized motor vehicles44
10 Securitized other consumer
11 Real estate2
12 Business
13 Motor vehicles
14
Retail5 6
15
Wholesale
16
Leasing
17 Equipment
18
Retail....,
19
Wholesale6
20
Leasing
21 Other business
22 Securitized business assets
23
Retail
24
Wholesale
25
Leasing
523,192
538,158
535,910
523,389
521,094
524,937
528,869
532,354r
535,910
155,713
63,415
58,522
23,166
10,610
65,760
301,719
90,613
22,957
31,216
36,440
141,399
30,962
9,671
100,766
60,900
8,807
576
5,285
2,946
158,631
57,605
59,522
29,775
11,729
68,410
311,118
87,456
19,303
29,962
38,191
151,607
32,212
8,669
110,726
57,464
14,590
1,118
8,756
4,716
160,300
55,280
61,749
34,659
8,611
69,187
306,424
90,147
16,024
31,067
43,056
149,083
33,246
8,003
107,835
50,464
16,730
1,830
9,697
5,203
153,733
56,817
56,259
30,787
9,870
67,649
302,007
87,745
17,561
27,442
42,743
146,408
33,209
8,224
104,975
53,243
14,611
1,268
8,318
5,025
154,218
55,247
56,616
32,856
9,498
67,565
299,311
84,920
17,264
25,136
42,520
146,404
33,676
8,059
104,669
53,536
14,451
1,220
8,329
4,902
155,496
55,057
57,588
33,549
9,302
67,212
302,229
86,019
18,365
25,458
42,196
147,905
33,789
8,113
106,004
53,861
14,444
1,168
8,529
4,747
156,712
54,324
58,278
35,212
8,898
68,425
303,732
86,129
16,599
27,144
42,386
148,357
33,357
8,091
106,909
53,969
15,277
1,690
8,785
4,802
157,848r
55,337
59,463r
34,301
8,747
68,718
305,788r
88,510
16,723
29,260
42,526r
146,703r
32,360
7,802
106,541
53,886r
16,690r
l,953
9,407
5,330
160,300
55,280
61,749
34,659
8,611
69,187
306,424
90,147
16,024
31,067
43,056
149,083
33,246
8,003
107,835
50,464
16,730
1,830
9,697
5,203
1. Includes finance company subsidiaries of bank holding companies but not of
retailers and banks. Data are before deductions for unearned income and losses.
Data in this table also appear in the Board's G.20 (422) monthly statistical release.
For ordering address, see inside front cover.
2. Includes all loans secured by liens on any type of real estate, for example,
first and junior mortgages and home equity loans.
3. Includes personal cash loans, mobile home loans, and loans to purchase other
types of consumer goods such as appliances, apparel, general merchandise, and
recreation vehicles.
4. Outstanding balances of pools upon which securities have been issued; these
balances
are no longer carried on the balance sheets of the loan originator.
5. Passenger car fleets and commercial land vehicles for which licenses are
required.
6. Credit arising from transactions between manufacturers and dealers, that is,
floor plan financing.
7. Includes loans on commercial accounts receivable, factored commercial
accounts, and receivable dealer capital; small loans used primarily for business or
farm purposes; and wholesale and lease paper for mobile homes, campers, and
travel trailers.
Real Estate
1.53
MORTGAGE MARKETS
A37
Mortgages o n N e w H o m e s
Millions of dollars except as noted
1994
1993
Item
1991
1992
1993
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Terms and yields in primary and secondary markets
PRIMARY MARKETS
1
2
3
4
5
Terms1
Purchase price (thousands of dollars)
Amount of loan (thousands of dollars)
Loan-to-price ratio (percent)
Maturity (years)
Fees and charges (percent of loan amount)
Yield (percent per year)
Contract rate1
7 Effective rate1,3
8 Contract rate (HUD series)
155.0
114.0
75.0
26.8
1.71
158.1
118.1
76.6
25.6
1.60
163.1
123.0
78.0
26.1
1.30
168.7
127.4
77.8
26.2
1.28
158.1
122.2
78.4
26.4
1.21
155.3
120.8
78.5
26.5
1.13
169.2
128.4
78.0
26.7
1.23
174.4
134.0
79.1
26.9
1.23
167.9
128.7
79.2
26.8
1.10
168.1
127.9
78.0
27.2
1.18
9.02
9.30
9.20
7.98
8.25
8.43
7.02
7.24
7.37
6.99
7.20
7.31
6.86
7.05
6.89
6.76
6.95
6.94
6.61
6.80
7.05
6.61
6.80
7.38
6.74
6.92
7.26
6.77
6.95
7.13
9.25
8.59
8.46
7.71
7.46
6.59
7.51
6.53
7.02
6.42
7.03
6.15
7.08
6.11
7.51
6.38
7.52
6.07
7.05
5.95
SECONDARY MARKETS
Yield (percent per year)
9 FHA mortgages (Section 203)5
10 GNMA securities6
Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION
Mortgage holdings (end of period)
11 Total
12 F H A / V A i n s u r e d
13 Conventional
122,837
21,702
101,135
142,833
22,168
120,664
172,791
22,876
149,914
174,674
22,761
151,913
177,992
22,834
155,158
180,057
22,810
157,247
182,524
22,978
159,546
185,463
23,334
162,129
190,861
23,857
167,004
194,441
23,796
170,645
Mortgage transactions (during period)
14 Purchases
37,202
75,905
92,037
7,854
8,176
8,866
8,780
8,979
12,123
7,919
Mortgage commitments (during period)
15 Issued 8
16 To sell
40,010
7,608
74,970
10,493
92,537
5,097
7,760
458
8,581
2,585
9,814
0
7,515
0
11,144
0
8,461
209
6,159
664
Mortgage holdings (end of periodf
17 Total
18 F H A / V A i n s u r e d
19 Conventional
24,131
484
23,283
29,959
408
29,552
42,789
327
42,462
43,119
314
42,805
44,396
324
44,072
46,858
323
46,536
50,108
321
49,787
52,933
324
52,610
55,012
321
54,691
56,067
n.a.
n.a.
Mortgage transactions (during period)
20 Purchases
21
99,965
92,478
191,125
179,208
229,242
208,723
19,700
18,631
19,636
18,008
18,372
16,230
18,658
15,985
27,062
24,028
29,396
26,607
22,160
21,253
114,031
261,637
274,599
21,722
17,085
16,495
24,614
39,977
24,176
31,383
FEDERAL HOME LOAN MORTGAGE CORPORATION
Mortgage commitments (during period)9
22 Contracted
1. Weighted averages based on sample surveys of mortgages originated by
major institutional lender groups for purchase of newly built homes; 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 rate on loans closed for purchase of newly built
homes, assuming prepayment at the end of ten years.
4. Average contract rate on new commitments for conventional first mortgages; from U.S. Department of Housing and Urban Development (HUD). Based
on transactions on the first day of the subsequent month.
5. Average gross yield 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.
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.
7. Does not include standby commitments issued, but includes standby commitments converted.
8. Includes participation loans as well as whole loans.
9. 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, whereas the
corresponding data for FNMA exclude swap activity.
A38
1.54
Domestic Financial Statistics • April 1994
MORTGAGE DEBT OUTSTANDING1
Millions of dollars, end of period
1992
Type of holder and property
1989
1990
1993
1991
Q3
Q4
Ql
Q2
Q3P
1 All holders
3,549,564
3,761,525
3,923,371
4,020,556
4,042,926
4,059,200
4,099,621
4,160,167
By type of property
2 One- to four-family residences
3 Multifamily residences
4 Commercial
5
2,408,402
306,517
754,169
80,476
2,615,435
309,369
758,313
78,408
2,778,803
306,410
759,023
79,136
2,911,442
301,975
726,562
80,577
2,953,527
294,976
713,701
80,722
2,976,784
293,578
708,086
80,752
3,026,924
290,609
701,280
80,808
3,088,521
290,857
699,926
80,863
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
1,914,315
844,826
455,931
37,015
334,648
17,231
801,628
600,154
91,806
109,168
500
267,861
13,005
28,979
215,121
10,756
1,846,726
876,100
483,623
36,935
337,095
18,447
705,367
538,358
79,881
86,741
388
265,258
11,547
29,562
214,105
10,044
1,793,492
891,445
502,075
38,757
330,705
19,908
648,178
501,604
73,723
72,517
334
253,869
11,779
28,591
204,132
9,366
1,769,187
894,513
507,780
38,024
328,826
19,882
627,972
489,622
69,791
68,235
324
246,702
11,441
27,770
198,269
9,222
1,753,045
891,755
507,497
37,425
326,853
19,980
617,163
480,415
70,608
65,808
332
244,128
11,316
27,466
196,100
9,246
1,765,052
910,944
526,800
38,064
325,485
20,595
612,379
480,636
68,325
63,0%
322
241,729
11,195
27,174
194,012
9,348
1,770,274
922,366
536,321
38,370
326,859
20,815
610,081
478,832
68,068
62,860
321
237,826
11,008
26,718
190,758
9,343
22 Federal and related agencies
23 Government National Mortgage Association
24
One- to four-family
25
Multifamily
26 Farmers Home Administration
27
One- to four-family
28
Multifamily
Commercial
29
30
Farm
31 Federal Housing and Veterans' Administrations
32
One- to four-family
Multifamily
33
34 Resolution Trust Corporation
35
One- to four-family
Multifamily
36
Commercial
37
38
Farm
39 Federal National Mortgage Association
40
One- to four-family
41
Multifamily
42 Federal Land Banks
43
One- to four-family
44
Farm
45 Federal Home Loan Mortgage Corporation
46
One- to four-family
47
Multifamily
197,778
23
23
0
41,176
18,422
9,054
4,443
9,257
6,087
2,875
3,212
0
0
0
0
0
99,001
90,575
8,426
29,640
1,210
28,430
21,851
18,248
3,603
239,003
20
20
0
41,439
18,527
9,640
4,690
8,582
8,801
3,593
5,208
32,600
15,800
8,064
8,736
0
104,870
94,323
10,547
29,416
1,838
27,577
21,857
19,185
2,672
266,146
19
19
0
41,713
18,496
10,141
4,905
8,171
10,733
4,036
6,697
45,822
14,535
15,018
16,269
0
112,283
100,387
11,896
28,767
1,693
27,074
26,809
24,125
2,684
277,485
27
27
0
41,671
17,292
10,468
5,072
8,839
11,768
4,531
7,236
37,099
12,614
11,130
13,356
0
126,476
113,407
13,069
28,815
1,695
27,119
31,629
29,039
2,591
286,263
30
30
0
41,695
16,912
10,575
5,158
9,050
12,581
5,153
7,428
32,045
12,960
9,621
9,464
0
137,584
124,016
13,568
28,664
1,687
26,977
33,665
31,032
2,633
287,182
45
37
8
41,630
18,149
10,235
4,934
8,313
13,027
5,631
7,3%
27,331
11,375
8,070
7,886
0
141,192
127,252
13,940
28,536
1,679
26,857
35,421
32,831
2,589
299,214
45
38
7
41,669
18,313
10,197
4,915
8,245
12,945
5,635
7,311
21,973
8,955
6,743
6,275
0
151,513
137,340
14,173
28,592
1,682
26,909
42,477
39,905
2,572
310,825
44
37
7
41,669
18,313
10,197
4,915
8,245
12,797
5,460
7,336
19,925
8,381
6,002
5,543
0
160,721
146,009
14,712
28,810
1,695
27,115
46,859
44,315
2,544
48 Mortgage pools or trusts5
49 Government National Mortgage Association
50
One- to four-family
51
Multifamily
52 Federal Home Loan Mortgage Corporation
53
One- to four-family
54
Multifamily
55 Federal National Mortgage Association
56
One- to four-family
57
Multifamily
58 Farmers Home Administration
59
One- to four-family
Multifamily
60
Commercial
61
62
Farm
63 Private mortgage conduits
64
One- to four-family
65
Multifamily
Commercial
66
67
Farm
917,848
368,367
358,142
10,225
272,870
266,060
6,810
228,232
219,577
8,655
80
21
0
26
33
48,299
43,325
462
4,512
0
1,079,103
403,613
391,505
12,108
316,359
308,369
7,990
299,833
291,194
8,639
66
17
0
24
26
59,232
53,335
731
5,166
0
1,250,666
425,295
415,767
9,528
359,163
351,906
7,257
371,984
362,667
9,317
47
11
0
19
17
94,177
84,000
3,698
6,479
0
1,385,460
422,255
413,063
9,192
391,762
385,400
6,362
429,935
420,835
9,100
41
9
0
18
14
141,468
123,000
5,7%
12,673
0
1,425,546
419,516
410,675
8,841
407,514
401,525
5,989
444,979
435,979
9,000
38
8
0
17
13
153,499
132,000
6,305
15,194
0
1,461,612
421,514
412,798
8,716
420,932
415,279
5,654
457,316
448,483
8,833
44
10
0
18
16
161,805
137,000
6,662
18,143
0
1,472,844
413,166
404,425
8,741
422,882
417,646
5,236
465,220
456,645
8,575
45
10
0
19
16
171,532
145,000
7,410
19,121
0
1,513,024
415,076
405,%3
9,113
430,089
425,154
4,935
481,880
473,599
8,281
45
10
0
19
16
185,933
158,000
8,074
19,859
0
68 Individuals and others6
69 One- to four-family
70 Multifamily
71 Commercial
72 Farm
502,401
318,842
84,272
83,440
15,846
529,104
348,638
85,969
80,761
13,737
559,833
367,633
83,796
93,410
14,994
564,118
375,072
85,960
88,090
14,9%
561,930
372,708
85,430
88,538
15,254
557,360
367,031
85,977
88,344
16,008
562,511
372,699
86,083
88,357
15,372
566,045
375,423
86,500
89,113
15,008
By type of holder
6 Major financial institutions
7 Commercial banks
One- to four-family
8
9
Multifamily
Commercial
10
11
Farm
12 Savings institutions3
One- to four-family
13
14
Multifamily
Commercial
15
16
Farm
17 Life insurance companies
18
One- to four-family
19
Multifamily
Commercial
20
21
Farm
1. Based on data from various institutional and governmental sources; 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.
4. FmHA-guaranteed securities sold to the Federal Financing Bank were
reallocated from FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4
because of accounting changes by the Farmers Home Administration.
5. Outstanding principal balances of mortgage-backed securities insured or
guaranteed by the agency indicated.
6. 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 finance companies.
SOURCES. Based on data from various institutional and government sources.
Separation of nonfarm mortgage debt by type of property, if not reported directly,
and interpolations and extrapolations, when required, are estimated mainly by the
Federal Reserve. Line 64, from Inside Mortgage Securities.
Consumer Installment
1.55
Credit
A39
C O N S U M E R I N S T A L L M E N T CREDIT1
Millions of dollars, amounts outstanding, end of period
1993
Holder and type of credit
1991
1992
1993
July
Aug.
Nov.
Dec.
775,620r
782,561r
789,836
r
273,822
277,125r
224,673
276,853r
279,273r
226,435
278,323
281,695
229,818
Sept.
Oct.
768,573
270,650
273,703
224,220
Seasonally adjusted
733,510
1 Total
260,898
243,564
229,048
2 Automobile
3 Revolving
4 Other
789,836
741,093
259,627
254,299
227,167
278,323
281,695
229,818
757,465
267,468
266,938
223,058
762,503
268,784
270,753
222,967
Not seasonally adjusted
749,052
756,944
807,060
753,645
763,268
770,384
776,101r
784,148'
807,060
By major holder
Commercial banks
Finance companies
Credit unions
Retailers
Savings institutions
Gasoline companies
Pools of securitized assets
340,713
121,937
92,681
39,832
45,965
4,362
103,562
331,869
117,127
97,641
42,079
43,461
4,365
120,402
367,085
117,030
114,452
47,382
33,000
4,462
123,649
339,948
113,076
106,027
39,043
36,485
4,668
114,398
345,449
111,864
108,095
39,688
35,919
4,728
117,525
349,699
112,645
109,687
39,842
34,985
4,574
118,952
352,559r
112,602
110,830
40,310
34,251
4,599
120,950
358,4291
lM.SOO
112,342
42,047
33,500
4,507
118,523r
367,085
117,030
114,452
47,382
33,000
4,462
123,649
By major type of credit*
13 Automobile
14 Commercial banks
15 Finance companies
16 Pools of securitized assets
261,219
112,666
63,415
28,915
259,964
109,743
57,605
33,878
278,693
123,731
55,280
36,781
267,646
116,729
56,817
33,673
270,495
118,535
55,247
35,569
273,291
120,574
55,057
36,123
275,882r
122,162r
54,324
37,630
277,060"^
122,989r
55,337r
36,569
278,693
123,731
55,280
36,781
17 Revolving
18 Commercial banks
19 Retailers
20 Gasoline companies
21 Pools of securitized assets
256,876
138,005
34,712
4,362
63,595
267,949
132,582
36,629
4,365
74,243
296,678
148,680
41,378
4,462
77,416
264,100
132,984
33,505
4,668
69,935
269,663
135,466
34,099
4,728
71,562
272,579
136,738
34,214
4,574
72,646
275,109
137,844
34,668
4,599
73,556
280,080
142,382
36,319
4,507
72,357
2%, 678
148,680
41,378
4,462
77,416
22 Other
23 Commercial banks
24 Finance companies
25 Retailers
26 Pools of securitized assets
230,957
90,042
58,522
5,120
11,052
229,031
89,544
59,522
5,450
12,281
231,688
94,674
61,749
6,004
9,452
221,899
90,235
56,259
5,538
10,790
223,109
91,448
56,616
5,589
10,394
224,514
92,387
57,588
5,628
10,183
225,1101
92,553r
58,278
5,642
9,764
227,008r
93,058r
59,463
5,728
9,597
231,688
94,674
61,749
6,004
9,452
5 Total
6
7
8
9
10
11
12
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.
1.56
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.
TERMS OF C O N S U M E R I N S T A L L M E N T CREDIT1
Percent per year except as noted
1993
Item
1991
1992
1993
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
INTEREST RATES
1
2
3
4
Commercial banks2
48-month new car
24-month personal
120-month mobile home
Credit card
Auto finance companies
6 Used car
11.14
15.18
13.70
18.23
9.29
14.04
12.67
17.78
8.09
13.47
11.87
16.83
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
7.98
13.45
11.53
16.59
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
7.63
13.22
11.55
16.30
n.a.
n.a.
n.a.
n.a.
12.41
15.60
9.93
13.80
9.48
12.79
9.45
12.55
9.37
12.46
9.21
12.48
9.21
12.52
9.25
12.58
8.%
12.41
8.80
12.33
55.1
47.2
54.0
47.9
54.5
48.8
54.6
49.0
54.7
49.0
54.9
49.0
54.7
48.8
55.0
48.2
54.5
48.4
54.0
48.3
88
96
89
97
91
98
91
98
91
98
91
99
91
98
90
98
91
98
90
98
12,494
8,884
13,584
9,119
14,332
9,875
14,2%
9,912
14,430
9,9%
14,324
10,104
14,348
9,808
14,650
9,%9
14,839
10,230
15,097
10,349
OTHER TERMS 3
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. 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. Data are available for only the second month of each quarter,
3. At auto finance companies,
A40
1.57
DomesticNonfinancialStatistics • April 1994
F U N D S RAISED IN U.S. CREDIT MARKETS'
Billions of dollars; quarterly data at seasonally adjusted annual rates
1992
Transartinn ratponrv nr <PrT M
r
1988
1989
1990
1991
1993
1992
Ql
Q2
Q3
Q4
Ql
Q2
Q3
Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial sectors ..
752.6
723.0
631.0
475.5
582.4
603.3
586.2
610.8
529.1
399.3
667.5
579.7
By sector and instrument
2 U.S. government
3 Treasury securities
4 Budget agency issues and mortgages
155.1
137.7
17.4
146.4
144.7
1.6
246.9
238.7
8.2
278.2
292.0
-13.8
304.0
303.8
.2
323.8
335.0
-11.2
352.9
352.5
.4
299.1
290.1
9.0
240.1
237.4
2.7
229.6
226.4
3.2
348.2
344.1
4.1
177.2
160.9
16.2
5 Private
597.5
576.6
384.1
197.3
278.4
279.5
233.4
311.7
289.0
169.7
319.2
402.5
6
7
8
9
10
11
12
13
14
15
16
By instrument
Tax-exempt obligations
Corporate bonds
Mortgages
Home mortgages
Multifamily residential
Commercial
Farm
Consumer credit
Bank loans n.e.c
Commercial paper
Other loans
53.7
103.1
279.6
219.6
16.1
48.5
-4.6
50.1
44.7
11.9
54.3
65.3
73.8
269.1
212.5
12.0
47.3
-2.7
49.5
36.4
21.4
61.0
57.3
47.1
188.7
177.2
3.4
8.9
-.8
13.4
4.2
9.7
63.6
69.6
78.8
165.1
166.0
-2.5
.9
.7
-13.1
-46.8
-18.4
-37.8
65.7
67.3
121.1
176.0
-11.1
-45.5
1.6
9.3
-5.6
8.6
12.0
68.0
76.3
185.4
216.5
11.6
-46.9
4.2
-9.8
-47.3
2.5
4.5
76.6
77.8
69.8
111.6
-16.9
-25.7
.8
-14.7
27.7
-2.6
-1.1
75.8
61.3
135.1
203.3
-11.2
-57.7
.8
13.5
-24.1
9.3
40.8
42.4
53.7
93.9
172.8
-27.9
-51.6
.6
48.2
21.4
25.4
3.9
62.4
75.0
100.2
128.4
-6.6
-21.7
.1
19.2
-39.7
-24.2
-23.0
67.2
64.9
134.5
176.2
-12.8
-29.1
.2
22.9
31.8
34.8
-37.0
38.9
55.2
223.2
229.7
.2
-6.9
.2
60.8
8.1
24.2
-8.0
17
18
19
20
21
22
By borrowing sector
Household
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate
State and local government
300.1
248.4
-10.0
57.2
201.3
48.9
276.7
236.3
.5
49.4
186.5
63.5
207.7
121.9
1.8
19.4
100.7
54.5
168.4
-33.4
2.4
-24.5
-11.3
62.3
215.0
4.0
1.5
-39.4
41.8
59.4
199.2
18.2
4.3
-21.8
35.7
62.1
176.5
-10.1
3.6
-47.4
33.7
66.9
217.7
20.5
-.1
-37.3
57.9
73.5
266.6
-12.7
-1.6
-51.0
39.9
35.1
137.4
-38.9
-2.5
-36.7
.3
71.2
215.8
34.5
3.4
-31.4
62.5
68.9
322.4
36.4
4.6
-14.1
46.0
43.7
6.4
6.9
-1.8
8.7
-7.5
759.0
10.2
4.9
-.1
13.1
-7.6
733.1
23.9
21.4
-2.9
12.3
-7.0
654.9
13.9
14.1
3.1
6.4
-9.8
489.4
24.2
17.3
2.3
5.2
-.6
1.9
4.9
1.5
-8.0
3.6
605.3
57.7
21.9
14.1
27.8
-6.1
644.0
37.8
20.3
3.9
13.1
.5
648.7
-.6
22.2
-10.3
-12.1
-.4
26.8
30.4
6.5
-.6
-9.5
78.5
85.5
1.0
-1.6
-6.4
528.5
50.3
75.6
1.6
-21.7
-5.3
449.5
694.2
658.2
23 Foreign net borrowing in United States
24 Bonds
25 Bank loans n.e.c
26 Commercial paper
27 U.S. government and other loans
28 Total domestic plus foreign
606.6
Financial sectors
29 Total net borrowing byfinancialsectors
239.9
213.7
193.5
150.4
209.5
167.6
206.3
294.4
169.6
148.5
130.3
366.8
119.8
44.9
74.9
.0
149.5
25.2
124.3
.0
167.4
17.1
150.3
-.1
145.7
9.2
136.6
.0
155.8
40.3
115.6
.0
126.8
11.5
115.3
.0
195.2
48.3
146.9
.0
169.3
67.7
101.6
.0
131.8
33.6
98.4
-.1
165.8
32.2
133.6
.0
62.7
68.8
-6.1
.0
270.9
167.8
103.1
.0
34 Private
35 Corporate bonds
36 Mortgages
37 Bank loans n.e.c
38 Open market paper
39 Loans from Federal Home Loan Banks
120.1
49.0
.3
-3.8
54.8
19.7
64.2
37.3
.5
6.0
31.3
-11.0
26.1
40.8
.4
1.1
8.6
-24.7
4.6
56.8
.8
17.1
-32.0
-38.0
53.7
58.4
.0
-4.8
-.7
.8
40.8
28.6
-.4
22.0
1.1
-10.4
11.0
59.1
.1
-39.1
-14.8
5.8
125.1
71.5
.3
17.7
17.5
18.1
37.8
74.2
.1
-19.9
-6.5
-10.1
-17.3
59.9
.9
-21.2
-75.5
18.6
67.6
55.5
2.7
-5.9
-18.4
33.5
95.8
86.2
2.2
-12.5
-12.4
32.3
By borrowing sector
40 Government sponsored enterprises
41 Federally related mortgage pools
42 Private
43 Commercial banks
44 Bank holding companies
45 Funding corporations
46 Savings institutions
47 Credit unions
48 Life insurance companies
49 Finance companies
50 Mortgage companies
51 Real estate investment trusts (REITs)
52 Issuers of asset-backed securities (ABSs)
44.9
74.9
120.1
-3.0
5.2
39.1
21.7
.0
.0
23.9
-6.2
1.8
37.6
25.2
124.3
64.2
-1.4
6.2
13.8
-15.1
.0
.0
27.4
3.0
1.3
28.9
17.0
150.3
26.1
-.7
-27.7
12.5
-30.2
.0
.0
24.0
-4.0
1.0
51.1
9.1
136.6
4.6
-11.7
-2.5
-13.6
-44.5
.0
.0
18.6
5.7
1.6
51.0
40.2
115.6
53.7
8.8
2.3
1.6
-6.7
.0
.0
-3.6
.1
.1
51.1
11.5
115.3
40.8
3.2
10.9
16.1
-18.3
.0
.0
-35.6
27.5
1.7
35.3
48.3
146.9
11.0
5.5
-9.2
29.2
-5.4
.0
.0
-20.1
-35.3
1.3
45.0
67.7
101.6
125.1
12.1
6.6
-7.7
11.2
.0
.2
21.2
14.4
2.0
65.0
33.5
98.4
37.8
14.5
.8
-31.1
-14.4
.1
-.2
19.9
-6.4
-4.7
59.2
32.2
133.6
-17.3
5.4
21.1
-54.2
7.9
.0
.1
-33.1
-10.4
-1.4
47.2
68.8
-6.1
67.6
10.1
1.3
7.2
17.7
.3
.6
-38.6
15.9
2.5
50.5
167.8
103.1
95.8
6.2
-1.2
-15.6
18.3
.3
-.1
9.4
2.4
3.8
72.5
30
31
32
33
By instrument
U.S. government-related
Government-sponsored enterprises securities
Mortgage pool securities
Loans from U.S. government
Flow of Funds
1.57
A41
F U N D S RAISED IN U.S. CREDIT MARKETS1—Continued
1993
1992
Transaction category or sector
1988
1989
1990
1991
1992
Ql
Q2
Q3
Q4
Ql
Q2
Q3
All sectors
53 Total net borrowing, all sectors
998.8
946.8
848.4
639.8
816.0
772.8
850.2
943.0
698.1
598.1
824.5
1,024.9
54
55
56
57
58
59
60
61
274.9
53.7
159.0
280.0
50.1
39.2
75.4
66.6
295.8
65.3
116.0
269.6
49.5
42.3
65.9
42.4
414.4
57.3
109.2
189.1
13.4
2.4
30.7
31.8
424.0
69.6
149.6
165.8
-13.1
-26.6
-44.0
-85.6
459.8
65.7
143.0
121.1
9.3
-8.1
13.1
12.2
450.6
68.0
109.7
185.0
-9.8
-23.9
-4.5
-2.4
548.1
76.6
158.8
69.8
-14.7
2.8
10.3
-1.4
468.5
75.8
153.2
135.4
13.5
-2.5
39.9
59.3
372.0
42.4
150.1
94.0
48.2
-8.8
6.8
-6.7
395.3
62.4
210.5
101.0
19.2
-59.3
-121.4
-9.7
410.9
67.2
150.9
137.3
22.9
32.4
15.8
-13.0
448.1
38.9
226.9
225.5
60.8
-3.4
10.3
17.9
U.S. government securities
Tax-exempt securities
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans
Funds raised through mutual funds and corporate equities
62 Total net share issues
63 Mutual funds
64 Corporate equities
65 Nonfinancial corporations
66 Financial corporations
67 Foreign shares purchased in United States
-59.6
22.2
210.6
282.5
274.2
264.1
293.3
298.4
292.2
461.9
497.9
6.1
38.5
-104.7 -98.1
-129.5 -124.2
23.9
8.8
.9
17.2
67.9
-45.7
-63.0
9.9
7.4
150.5
60.1
18.3
11.2
30.7
206.7
75.8
26.8
18.4
30.6
174.4
99.9
46.0
24.8
29.1
199.5
64.6
36.0
17.4
11.2
235.2
58.1
11.0
12.3
34.8
217.7
80.7
14.0
19.2
47.5
240.9
51.2
9.0
10.3
31.9
357.5
104.4
26.0
28.1
50.3
340.3
157.6
30.0
27.2
100.4
-98.6
1. Data in this table also appear in the Board's Z.l (780) quarterly statistical
release, tables F.2 through F.5. For ordering address, see inside front cover.
A42
1.58
Domestic Financial Statistics • April 1994
SUMMARY OF FINANCIAL TRANSACTIONS1
Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates
1992
Transaction category or sector
1988
1989
1990
1991
1993
1992
Q3
Ql
Q2
Q3
Q4
Ql
Q2
824.5 1,024.9
NET LENDING IN CREDIT MARKETS2
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
2'/
28
29
30
31
32
33
34
Total net lending in credit markets
Private domestic nonfinancial sectors
Households
Nonfarm noncorporate business
Nonfinancial corporate business
State and local governments
U.S. government
Foreign
Financial sectors
Government sponsored enterprises
Federally related mortgage pools
Monetary authority
Commercial banking
U.S. commercial banks
Foreign banking offices
Bank holding companies
Banks in U.S. affiliated areas
Private nonbank finance
Thrift institutions
Insurance
Life insurance companies
Other insurance companies
Private pension funds
State and local government retirement funds
Finance n.e.c
Finance companies
Mortgage companies
Mutual funds
Closed-end funds
Money market funds
Real estate investment trusts (REITs)
Brokers and dealers
Asset-backed securities issuers (ABSs)
Bank personal trusts
998.8
946.8
848.4
639.8
816.0
772.8
850.2
943.0
698.1
598.1
196.1
170.3
3.1
5.7
17.1
-10.6
108.6
704.8
33.2
74.9
10.5
156.5
126.4
29.4
-.1
.8
429.7
114.8
199.0
104.0
29.2
29.2
36.6
115.9
38.1
-7.4
11.9
19.8
10.7
.9
-8.2
35.9
14.3
122.6
78.6
-.7
13.6
31.1
-3.1
84.4
742.9
-4.1
124.3
-7.3
177.2
146.1
26.7
2.8
1.6
452.9
-86.6
257.4
101.8
29.7
81.1
44.7
282.2
32.0
6.1
23.8
6.3
67.1
.5
96.3
27.7
22.4
162.8
140.1
-1.7
-5.3
29.6
33.7
82.1
569.9
16.4
150.3
8.1
125.1
94.9
28.4
-2.8
4.5
270.0
-153.3
181.6
94.4
26.5
17.2
43.5
241.7
28.4
-8.0
41.4
.0
80.9
-.7
34.9
49.9
14.8
-16.1
-49.7
-4.2
4.3
33.5
10.5
25.6
619.8
14.2
136.6
31.1
84.3
39.2
48.5
-1.5
-1.9
353.7
-123.0
234.3
83.2
32.3
85.3
33.5
242.3
-12.1
11.4
90.3
15.2
30.1
-1.0
49.0
49.0
10.4
79.0
50.2
-2.4
36.3
-5.0
-11.9
100.7
648.2
69.0
115.6
27.9
94.8
69.8
16.5
5.6
2.9
341.0
-59.9
164.5
82.4
12.7
37.3
32.2
236.3
1.7
.1
123.7
12.3
1.3
.4
40.2
48.6
8.0
135.5
118.2
-3.9
25.1
-3.9
15.2
96.5
525.6
92.7
115.3
28.5
85.1
76.3
-.5
7.1
2.2
204.1
-105.0
97.2
73.7
28.8
-33.2
27.8
211.9
-5.3
23.0
95.1
17.9
19.1
-.7
-2.4
33.0
32.2
150.9
109.6
-2.7
36.8
7.2
-23.0
140.7
581.7
38.6
146.9
19.0
72.7
13.3
56.7
-.4
3.2
304.5
-75.8
185.4
66.9
16.4
74.1
28.0
194.9
-16.0
-38.5
123.7
9.4
3.8
2.6
73.0
45.2
-8.4
-62.3
-99.7
-2.0
46.5
-7.1
-26.7
78.1
953.9
73.0
101.6
15.7
148.0
123.5
5.2
16.4
3.0
615.5
-42.6
217.8
85.1
-2.8
99.9
35.6
440.4
4.0
28.9
156.9
8.7
8.5
-.3
180.3
62.6
-9.3
92.1
72.5
-1.0
36.9
-16.3
-13.1
87.5
531.5
71.7
98.4
48.3
73.3
66.0
4.8
-.6
3.0
239.9
-16.1
157.8
103.7
8.3
8.4
37.4
98.2
24.0
-12.8
119.2
13.1
-26.1
-.1
-90.2
53.6
17.3
-140.8
-124.7
-3.7
-1.8
-10.5
-24.1
73.2
689.8
14.6
133.6
44.5
86.4
100.4
-12.5
-4.3
2.9
410.7
-28.2
291.4
122.1
8.9
118.0
42.4
147.5
-34.0
-20.8
130.2
8.9
-65.0
2.9
79.5
46.7
-.9
998.8
946.8
848.4
639.8
816.0
772.8
850.2
943.0
698.1
598.1
-118.1
-134.6
-3.0
14.3
5.1
-27.8
89.5
880.9
144.1
-6.1
32.6
153.4
142.0
-.7
9.5
2.6
556.8
-17.1
175.5
108.0
10.6
11.1
45.9
398.3
-22.8
31.7
193.4
13.0
51.8
.8
66.7
49.4
14.4
-155.2
-167.5
-2.2
25.9
-11.5
-15.4
144.0
1,051.6
162.7
103.1
28.2
132.6
147.0
-17.2
.3
2.5
625.0
7.4
248.2
103.0
9.0
86.3
49.9
369.5
5.7
5.4
171.2
11.0
44.6
1.3
55.5
75.3
-.5
RELATION OF LIABILITIES
TO FINANCIAL ASSETS
35
Netflowsthrough credit markets
824.5 1,024.9
4.0
24.8
2.0
-5.9
-1.6
3.5
-6.5
-8.5
5.1
3.4
-3.5
4.2
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
Other financial sources
Official foreign exchange
Treasury currency and special drawing rights
certificates
Life insurance reserves
Pension fund reserves
Interbank claims
Deposits at financial institutions
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Foreign deposits
Mutual fund shares
Corporate equities
Security credit
Trade debt
Taxes payable
Noncorporate proprietors' equity
Investment in bank personal trusts
Miscellaneous
.5
25.3
140.1
2.9
278.6
43.2
121.6
53.1
21.9
23.7
15.2
6.1
-104.7
3.0
89.6
5.3
-24.0
7.2
199.2
4.1
28.8
309.7
-16.5
284.8
6.1
100.4
13.9
90.1
77.8
-3.6
38.5
-98.1
15.6
59.4
2.0
-31.1
23.1
292.1
2.5
25.7
158.1
34.2
98.1
44.2
59.0
-65.7
70.3
-24.2
14.6
67.9
-45.7
3.5
32.1
-4.5
-35.5
21.5
98.2
.0
25.7
358.8
-3.7
48.2
75.8
16.7
-60.8
41.2
-16.5
-8.2
150.5
60.1
51.4
-2.2
-8.5
-12.5
29.8
169.9
-1.8
28.4
214.8
49.0
9.3
122.8
-60.8
-80.0
3.9
33.6
-10.2
206.7
75.8
4.2
57.9
7.7
-10.7
-7.5
196.4
.1
33.8
129.0
25.7
-.7
86.4
-40.1
-72.9
44.4
8.1
-26.6
174.4
99.9
-66.7
79.8
8.5
-25.8
40.2
93.1
.3
22.7
194.4
36.9
6.3
110.8
-81.8
-109.9
26.7
103.7
-43.2
199.5
64.6
-4.9
56.5
6.1
12.3
20.2
272.6
.2
27.3
278.5
82.3
174.1
200.4
-83.6
-52.9
-22.4
89.6
43.0
235.2
58.1
82.8
57.8
6.5
-33.2
-55.4
209.0
-7.7
29.8
257.4
51.1
-142.7
93.5
-37.8
-84.2
-32.9
-67.1
-14.2
217.7
80.7
5.5
37.5
9.9
4.0
-35.2
210.9
.3
51.4
340.7
17.7
-8.2
25.0
-158.9
1.9
-37.7
180.3
-18.8
240.9
51.2
39.7
27.3
9.6
3.6
-10.1
233.2
.4
41.0
199.8
54.9
247.2
232.2
-54.2
-17.5
66.8
17.6
2.4
357.5
104.4
38.3
42.5
11.3
-7.2
35.8
355.1
.4
39.4
273.0
-19.8
70.3
96.4
-87.1
-57.3
57.2
86.4
-25.2
340.3
157.6
34.8
42.4
4.1
-28.7
-23.0
228.7
56
Total financial sources
1,632.0 1,883.8 1,306.5 1,501.3 1,644.7 1,367.6 1,731.2 2,057.7 1,422.3 1,598.7 2,302.0 2,148.7
57
58
59
Floats not included in assets (-)
U.S. government checkable deposits
Other checkable deposits
Trade credit
60
61
62
63
64
Liabilities not identified as assets (-)
Treasury currency
Interbank claims
Security repurchase agreements
Taxes payable
Miscellaneous
65
Total identified to sectors as assets
36
37
1.6
.8
-6.2
8.4
-3.2
-1.9
3.3
2.5
2.5
-13.1
2.0
8.1
.7
1.6
21.5
11.3
13.8
25.0
-9.5
2.0
11.3
4.4
-11.7
44.0
-3.6
2.3
5.7
.1
-1.8
-21.8
6.2
-1.4
8.7
-5.1
-5.6
3.9
-.1
-3.0
-29.6
6.3
47.3
-.2
-4.4
32.4
2.3
-77.8
.2
1.6
-31.5
.5
-23.6
-.6
26.2
5.2
.4
-32.1
-.2
-4.0
31.1
6.7
-15.4
-.3
8.2
-26.7
-7.6
-60.5
-.2
-18.2
84.1
7.0
-62.9
-.2
-5.3
43.5
23.8
11.9
-.1
-.6
23.4
3.7
49.9
-.2
9.3
155.2
-11.2
29.5
-.2
-.3
25.4
23.2
-31.0
-.2
-14.8
78.6
5.3
-21.9
1,614.8 1,928.2 1,351.0 1,505.2 1,602.7 1,404.4 1,717.6 1,947.4 1,341.6 1,439.5 2,271.5 2,108.5
1. Data in this table also appear in the Board's Z.l (780) quarterly statistical
release, tables F.6 and F.7. For ordering address, see inside front cover.
2. Excludes corporate equities and mutual fund shares,
Flow of Funds
1.59
A43
S U M M A R Y OF CREDIT MARKET DEBT OUTSTANDING1
Billions of dollars, end of period
1993
1992
Transaction category or sector
1989
1990
1991
1992
Q2
QL
Q3
Q4
QL
Q2
Q3
Nonfinancial sectors
1 Total credit market debt owed by
domestic nonfinancial sectors
10,054.3
10,692.0
11,160.6
11,746.9
11,289.2
11,427.0
11,580.3
11,746.9
11,823.0
11,979.2
12,125.4
By lending sector and instrument
? U.S. government
3 Treasury securities
4 Budget agency issues and mortgages
2,251.2
2,227.0
24.2
2,498.1
2,465.8
32.4
2,776.4
2,757.8
18.6
3,080.3
3,061.6
18.8
2,859.7
2,844.0
15.8
2,923.3
2,907.4
15.9
2,998.9
2,980.7
18.1
3,080.3
3,061.6
18.8
3,140.2
3,120.6
19.6
3,201.2
3,180.6
20.6
3,247.3
3,222.6
24.7
5 Private
7,803.1
8,193.9
8,384.3
8,666.5
8,429.4
8,503.7
8,581.5
8,666.5
8,682.9
8,777.9
8,878.2
1,004.7
961.1
3,512.8
2,380.5
304.3
747.6
80.5
799.5
750.8
107.1
667.0
1,062.1
1,008.2
3,715.4
2,580.6
305.5
750.8
78.4
813.0
747.8
116.9
730.6
1,131.6
1,086.9
3,880.4
2,746.6
303.0
751.7
79.1
799.9
701.0
98.5
685.9
1,197.3
1,154.2
4,001.9
2,922.7
291.9
706.5
80.7
809.2
695.6
107.1
701.2
1,145.5
1,106.0
3,918.1
2,791.8
305.9
740.3
80.2
777.6
685.5
110.4
686.2
1,163.7
1,125.4
3,941.5
2,825.6
301.7
733.8
80.4
776.9
694.0
112.0
690.1
1,186.4
1,140.8
3,979.7
2,880.8
298.9
719.4
80.6
784.5
686.2
108.2
695.8
1,197.3
1,154.2
4,001.9
2,922.7
291.9
706.5
80.7
809.2
695.6
107.1
701.2
1,210.0
1,172.9
4,017.9
2,945.8
290.3
701.1
80.8
793.7
683.0
114.6
690.8
1,225.7
1,189.2
4,057.6
2,996.0
287.1
693.8
80.8
802.3
691.9
125.0
686.2
1,239.5
1,203.0
4,117.6
3,057.6
287.1
692.1
80.9
821.7
691.9
124.3
680.2
3,371.4
3,615.7
134.4
1,199.6
2,281.7
816.1
3,594.8
3,728.5
134.9
1,219.0
2,374.6
870.5
3,762.7
3,688.7
134.8
1,192.3
2,361.6
932.8
3,978.0
3,696.3
136.3
1,154.5
2,405.5
992.2
3,782.6
3,701.5
133.6
1,187.6
2,380.3
945.3
3,837.3
3,705.4
137.0
1,177.3
2,391.1
961.0
3,900.0
3,698.3
137.9
1,165.1
2,395.3
983.1
3,978.0
3,696.3
136.3
1,154.5
2,405.5
992.2
3,982.2
3,693.6
133.5
1,144.2
2,415.9
1,007.1
4,046.8
3,708.0
136.8
1,138.3
2,432.9
1,023.2
4,135.1
3,704.9
138.8
1,132.0
2,434.0
1,038.2
23 Foreign credit market debt held in
United States
261.2
285.1
298.9
313.8
288.7
304.7
312.9
313.8
324.8
333.1
351.5
74
75 Bank loans n.e.c
7.6 Commercial paper
27 U.S. government and other loans
94.1
21.4
63.0
82.7
115.4
18.5
75.3
75.8
129.5
21.6
81.8
66.0
146.9
23.9
77.7
65.4
130.8
22.0
70.5
65.5
136.2
25.5
77.4
65.6
141.3
26.5
80.7
64.4
146.9
23.9
77.7
65.4
165.8
24.3
72.3
62.5
173.4
25.9
72.1
61.7
194.8
26.2
71.7
58.8
10,315.5
10,977.1
11,459.5
12,060.7
11,577.9
11,731.8
11,893.2
12,060.7
12,147.9
12,312.3
12,476.9
6
7
8
9
10
11
1?
H
14
15
16
17
18
19
7.0
?1
22
By instrument
Tax-exempt obligations
Corporate bonds
Home mortgages
Multifamily residential
Commercial
Consumer credit
Commercial paper
Other loans
By borrowing sector
Nonfinancial business
Nonfarm noncorporate
Corporate
State and local government
28 Total credit market debt owed by nonfinancial
sectors, domestic and foreign
Financial sectors
29 Total credit market debt owed by
financial sectors
2,362.7
2,559.4
2,709.7
2,928.5
2,751.2
2,805.7
2,877.4
2,928.5
2,961.7
2,997.3
3,087.6
By instrument
30 U.S. government-related
31 Government-sponsored enterprises
securities
32 Mortgage pool securities
33 Loans from U.S. government
34 Private
35 Corporate bonds
36 Mortgages
37 Bank loans n.e.c
38 Open market paper
39 Loans from Federal Home Loan Banks
1,247.8
1,418.4
1,564.2
1,720.0
1,590.3
1,641.6
1,683.5
1,720.0
1,755.8
1,774.5
1,842.2
373.3
869.5
5.0
1,114.8
509.1
4.0
50.9
409.1
141.8
393.7
1,019.9
4.9
1,140.9
549.9
4.3
52.0
417.7
117.1
402.9
1,156.5
4.8
1,145.6
606.6
5.1
69.1
385.7
79.1
443.1
1,272.0
4.8
1,208.5
665.0
5.1
64.2
394.3
79.9
405.7
1,179.8
4.8
1,160.9
613.8
5.0
72.7
393.2
76.3
417.8
1,219.0
4.8
1,164.1
628.6
5.0
63.1
390.5
76.9
434.7
1,244.0
4.8
1,193.9
646.4
5.1
67.5
394.6
80.2
443.1
1,272.0
4.8
1,208.5
665.0
5.1
64.2
394.3
79.9
451.2
1,299.8
4.8
1,205.9
680.0
5.4
56.9
378.7
85.0
468.4
1,301.3
4.8
1,222.9
693.9
6.0
55.8
375.1
92.1
510.3
1,327.1
4.8
1,245.4
715.4
6.6
52.8
371.7
98.9
By borrowing sector
40 Government-sponsored enterprises
41 Federally related mortgage pools
42 Privatefinancialsectors
43 Commercial banks
44 Bank holding companies
45 Funding corporations
46 Savings institutions
47 Credit unions
48 Life insurance companies
49 Finance companies
50 Mortgage companies
51 Real estate investment trusts (REITs)
52 Issuers of asset-backed securities (ABSs)
378.3
869.5
1,114.8
77.4
142.5
125.4
169.2
.0
.0
350.4
11.3
11.4
227.3
398.5
1,019.9
1,140.9
76.7
114.8
137.9
139.1
.0
.0
374.4
7.3
12.4
278.3
407.7
1,156.5
1,145.6
65.0
112.3
124.3
94.6
.0
.0
393.0
13.0
14.0
329.4
447.9
1,272.0
1,208.5
73.8
114.6
135.2
87.8
.0
.0
389.4
13.0
14.1
380.5
410.5
1,179.8
1,160.9
63.8
115.0
137.6
89.8
.0
.0
382.2
19.8
14.4
338.2
422.6
1,219.0
1,164.1
66.2
112.7
144.9
87.6
.0
.0
377.4
11.0
14.8
349.5
439.5
1,244.0
1,193.9
69.0
114.4
143.0
89.2
.0
.0
382.7
14.6
15.3
365.7
447.9
1,272.0
1,208.5
73.8
114.6
135.2
87.8
.0
.0
389.4
13.0
14.1
380.5
456.0
1,299.8
1,205.9
73.1
119.9
127.1
90.3
.0
.0
379.1
10.4
13.7
392.3
473.2
1,301.3
1,222.9
76.6
120.2
128.9
93.4
.1
.2
369.8
14.4
14.4
404.9
515.1
1,327.1
1,245.4
77.9
119.9
125.0
96.8
.2
.1
372.2
15.0
15.3
423.1
All sectors
53 Total credit martiet debt, domestic and foreign.
54
55
56
57
58
59
60
61
U.S. government securities
Tax-exempt securities
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans
12,678.2
13,536.5
14,169.3
14,989.2
14,329.1
14,537.5
14,770.6
14,989.2
15,109.5
15,309.6
15,564.5
3,494.1
1.004.7
1,564.3
3.516.8
799.5
823.0
579.2
896.5
3,911.7
1,062.1
1,673.5
3,719.7
813.0
818.3
609.9
928.4
4,335.7
1,131.6
1,823.1
3,885.5
799.9
791.7
565.9
835.8
4,795.5
1,197.3
1,966.1
4,007.0
809.2
783.7
579.0
851.3
4,445.2
1,145.5
1,850.5
3,923.2
777.6
780.2
574.1
832.8
4,560.1
1,163.7
1,890.2
3,946.6
776.9
782.7
579.9
837.4
4,677.6
1,186.4
1,928.5
3,984.8
784.5
780.2
583.6
845.1
4,795.5
1,197.3
1,966.1
4,007.0
809.2
783.7
579.0
851.3
4,891.2
1,210.0
2,018.7
4,023.3
793.7
764.3
565.5
843.0
4,970.9
1,225.7
2,056.4
4,063.7
802.3
773.6
572.2
844.8
5,084.7
1,239.5
2,113.1
4,124.2
821.7
770.9
567.8
842.7
1. Data
appear
(780) quarterly
in this table also L.4. Forin the Board's Z.l see inside front statistical
release, tables L.2 through
ordering address,
cover.
A44
1.60
DomesticNonfinancialStatistics • April 1994
S U M M A R Y OF F I N A N C I A L ASSETS A N D LIABILITIES1
Billions of dollars except as noted, end of period
1992
Transaction category or sector
1989
1990
1991
1993
1992
QL
Q2
Q3
Q4
QL
Q2
Q3
CREDIT MARKET DEBT OUTSTANDING 2
1
Total credit market assets
Private domestic nonfinancial sectors
Households
Nonfarm noncorporate business
Nonfinancial corporate business
State and local governments
1 U.S. government
8 Foreign
9 Financial sectors
10
Government-sponsored enterprises
11
Federally related mortgage pools
12
Monetary authority
Commercial banking
13
14
U.S. commercial banks
15
Foreign banking offices
16
Bank holding companies
17
Banks in U.S. affiliated areas
18
Private nonbank finance
19
Thrift institutions
20
Insurance
21
Life insurance companies
22
Other insurance companies
23
Private pension funds
24
State and local government retirement funds...
25
Finance n.e.c
26
Finance companies
27
Mortgage companies
28
Mutual funds
29
Closed-end funds
30
Money market funds
31
Real estate investment trusts (REITs)
32
Brokers and dealers
33
Asset-backed securities issuers (ABSs)
34
Bank personal trusts
2
3
4
5
6
12,678.2 13,536.5 14,169.3 14,989.2 14,329.1 14,537.5 14,770.6 14,989.2 15,109.5 15,309.6 15,564.5
2,096.4
1,326.8
56.5
181.2
531.9
205.4
778.7
9,597.7
355.4
869.5
233.3
2,647.4
2,371.9
242.3
16.2
17.1
5,491.9
1,475.4
2,320.7
1,022.0
317.5
590.2
390.9
1,695.9
468.6
2,246.8
1,454.6
54.9
175.8
561.5
239.1
897.5
10,153.1
371.8
1,019.9
241.4
2,772.5
2,466.7
270.8
13.4
21.6
5,747.4
1,324.6
2,473.7
1,116.5
344.0
607.4
405.9
1,949.1
497.0
2,205.8
1,380.0
50.7
180.1
595.1
247.0
936.2
10,780.3
397.7
1,156.5
272.5
2,856.8
2,506.0
319.2
11.9
19.7
6,096.7
1,197.3
2,708.0
1,199.6
376.3
692.7
439.4
2,191.5
484.9
2,290.7
1,436.0
48.3
216.4
590.0
235.1
1,031.1
11,432.2
466.7
1,272.0
300.4
2,951.6
2,575.7
335.8
17.5
22.5
6,441.5
1,140.9
2,872.5
1,282.0
389.0
730.0
471.6
2,428.0
486.6
2,233.1
1,395.2
48.7
192.6
596.6
246.3
995.6
11,062.5
429.0
1,219.0
282.6
2,887.6
2,525.2
328.2
13.1
21.0
6,244.3
1,154.1
2,787.4
1,243.6
387.6
702.9
453.3
2,302.8
480.5
2,221.6
1,381.1
48.1
199.5
592.9
239.2
1,015.1
11,294.7
446.3
1,244.0
285.2
2,928.2
2,560.0
328.9
17.5
21.8
6,391.0
1,145.1
2,841.7
1,264.7
386.9
727.9
462.2
2,404.1
477.8
22.6
307.2
37.1
291.8
8.4
142.9
219.3
198.0
14.6
360.2
37.1
372.7
7.7
177.9
269.1
212.9
2,211.4
1,388.9
49.3
180.0
593.3
251.2
960.4
10,906.0
419.9
1,179.8
271.8
2,864.5
2,517.3
313.3
13.6
20.2
6,170.1
1,172.0
2,736.6
1,222.3
383.5
684.4
446.3
2,261.5
479.5
2,290.7
1,436.0
48.3
216.4
590.0
235.1
1,031.1
11,432.2
466.7
1,272.0
300.4
2,951.6
2,575.7
335.8
17.5
22.5
6,441.5
1,140.9
2,872.5
1,282.0
389.0
730.0
471.6
2,428.0
486.6
25.9
450.5
52.4
402.7
6.8
226.9
318.1
223.3
26.1
574.2
64.6
404.1
7.4
267.1
366.7
231.2
31.7
478.8
56.8
424.0
6.8
226.3
326.3
231.3
22.1
510.2
59.2
412.0
7.5
244.6
337.6
229.2
29.3
550.2
61.3
408.2
7.4
289.6
353.3
226.9
26.1
574.2
64.6
404.1
7.4
267.1
366.7
231.2
2,247.6
1,405.4
47.0
208.6
586.5
229.5
1,040.9
11,591.6
464.1
1,299.8
303.6
2,960.9
2,594.6
326.7
16.4
23.3
6,563.2
1,131.2
2,950.2
1,317.3
391.2
759.5
482.2
2,481.8
473.7
20.9
611.4
66.9
404.5
8.1
287.0
378.4
231.0
2,200.2
1,348.0
46.3
216.3
589.6
223.4
1,063.3
11,822.8
499.2
1,301.3
318.2
3,003.2
2,633.8
327.1
18.4
23.9
6,700.9
1,128.0
2,999.2
1,349.5
393.8
762.2
493.7
2,573.6
473.5
28.8
659.9
70.1
404.0
8.3
303.6
390.7
234.6
2,165.4
1,316.8
45.6
218.1
584.9
219.0
1,099.3
12,080.9
538.9
1,327.1
324.2
3,040.4
2,674.8
322.3
18.8
24.5
6,850.4
1,131.5
3,061.1
1,375.1
396.1
783.8
506.1
2,657.8
471.4
30.1
704.3
72.8
409.0
8.6
317.5
409.5
234.5
RELATION OF LIABILITIES
TO FINANCIAL ASSETS
35 Total credit market debt
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
Other liabilities
Official foreign exchange
Treasury currency and special drawing rights
certificates
Life insurance reserves
Pension fund reserves
Interbank claims
Deposits at financial institutions
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Foreign deposits
Mutual fund shares
Security credit
Trade debt
Taxes payable
Investment in bank personal trusts
Miscellaneous
54 Total liabilities
12,678.2 13,536.5 14,169.3 14,989.2 14,329.1 14,537.5 14,770.6 14,989.2 15,109.5 15,309.6 15,564.5
53.6
61.3
55.4
51.8
52.7
54.4
55.4
51.8
54.5
53.9
55.6
23.8
354.3
3,356.1
32.4
4,736.7
888.6
2,277.4
603.4
428.1
396.5
142.8
566.2
133.9
904.2
81.8
503.2
2,591.1
26.3
380.0
3,400.3
64.0
4,836.8
932.8
2,336.3
537.7
498.4
372.3
159.4
602.1
137.4
936.4
77.4
509.9
2,732.4
26.3
405.7
4,056.5
65.2
4,885.2
1,008.5
2,353.0
476.9
539.6
355.8
151.3
813.9
188.9
926.7
68.9
596.7
2,884.3
24.5
434.1
4,369.8
114.0
4,892.1
1,131.0
2,292.2
397.2
543.6
389.4
138.8
1,042.1
217.3
984.7
76.6
619.1
3,056.2
26.3
414.2
4,048.2
63.0
4,878.6
984.3
2,351.3
459.2
572.0
367.0
144.7
860.4
194.6
938.0
73.1
612.9
2,899.7
26.4
419.8
4,105.0
68.5
4,870.6
1,032.9
2,325.8
427.5
556.9
393.5
133.9
924.4
193.3
950.0
70.7
612.7
2,957.3
26.5
426.7
4,228.5
101.3
4,909.3
1,072.0
2,303.7
418.4
552.9
417.6
144.6
965.6
214.5
970.5
74.5
610.9
3,027.6
24.5
434.1
4,369.8
114.0
4,892.1
1,131.0
2,292.2
397.2
543.6
389.4
138.8
1,042.1
217.3
984.7
76.6
619.1
3,056.2
24.6
447.0
4,509.1
109.9
4,885.9
1,092.2
2,261.2
398.3
556.6
24.7
457.2
2,242.3
24.8
467.1
4,710.7
129.4
4,949.2
1,182.6
2,219.4
389.9
549.9
448.3
472.8
443.5
134.1
1,134.6
225.1
982.3
81.3
625.0
3,082.3
21.0
3,812.9
2,508.1
22.0
3,543.7
2,440.6
22.3
4,869.4
2,344.6
19.6
5,540.6
2,266.6
22.0
4,925.6
2,351.4
22.7
4,837.0
2,335.3
23.2
4,995.4
2,313.9
19.6
5,540.6
2,266.6
19.8
5,721.3
2,237.6
Floats not included in assets (—)
58 U.S. government checkable deposits
59 Other checkable deposits
60 Trade credit
6.1
26.5
-148.6
15.0
28.9
-146.0
3.8
30.9
-144.1
6.8
32.5
-121.9
.9
29.5
-142.7
1.4
32.6
-151.1
4.0
23.3
-144.2
6.8
32.5
-121.9
-132.1
-4.3
-31.0
13.7
20.6
-210.7
-4.1
-32.0
-17.7
17.8
-213.4
-4.8
-4.2
-12.5
15.5
-254.6
-4.9
-8.4
18.6
22.2
-251.3
-4.8
-1.8
-4.8
7.3
-280.6
-4.9
-4.0
19.6
13.1
-282.1
-4.9
-4.3
33.1
18.1
-267.7
-4.9
-8.4
18.6
22.2
-251.3
Liabilities not identified as assets (-)
Treasury currency
Interbank claims
Security repurchase agreements
Taxes payable
Miscellaneous
66 Total identified to sectors as assets
1,169.1
134.7
379.7
566.2
1,225.8
128.4
1,342.1
234.7
991.2
79.8
635.6
3,149.3
3,203.6
243.9
1,008.1
83.3
643.6
3.4
27.2
2,237.4
20.0
20.3
6,006.6
2,225.1
3.5
29.6
-141.8
2.2
21.7
-144.6
5,741.9
-5.0
-5.2
-5.0
-3.9
-5.6
71.8
12.4
-279.4
82.4
106.8
-5.1
21.9
22.9
-274.6
-319.5
32,685.1 33,658.6 36,749.2 39,004.7 37,086.8 37,361.0 38,056.8 39,004.7 39,556.7 40,072.2 40,999.0
1. Data in this table also appear in the Board's Z.l (780) quarterly statistical
release, tables L.6 and L.7. For ordering address, see inside front cover.
4,934.2
26,015.5 27,300.7 29,143.0 30,871.4 29,390.8 29,790.7 30,381.7 30,871.4 31,271.1 31,784.9 32,425.8
Financial assets not included in liabilities (+)
55 Gold and special drawing rights
56 Corporate equities
57 Household equity in noncorporate business
61
62
63
64
65
4,570.4
118.5
2. Excludes corporate equities and mutual fund shares,
Selected Measures
2.10
NONFINANCIAL BUSINESS ACTIVITY
A45
Selected Measures
Monthly data seasonally adjusted, and indexes 1987=100, except as noted
1994
1993
Measure
1991
1993
1992
May
June
July
Aug.
Sept.
Oct.
Nov.r
Dec.r
Jan.
1 Industrial production1
104.1
106.5
110.9r
110.0r
110.4r
110.9r
m.r
111.3r
111.9r
112.8
113.9
114.4
Market groupings
7 Products, total
3
Consumer goods
4
5
Equipment
6 Intermediate
7 Materials
103.2r
105.3
102.8
108.9r
96.8
105.4r
105.7r
mo 1 "r
105.7
111.2rr
99.0
107.7r
110.2r
112.8r
108.8r
118.6
102.6rr
111.9
109.3
111.8rr
107.8r
117.7
101,7r
111.1*"
109.6r
112.1r
108. r
lis.tr
101.8rr
111.7
110.4r
112.8r
lOS.SK
118.5r
102.9r
111.7
r
110.4r
112.7r
108.6r
118.6r
103.3r
112.l
110.6r
113.lrr
108.5
119.8r
103.0""
112.2r
r
111.2r
113.8r
109.2
120.4r
103.5rr
112.8
112.2
114.8
109.9
121.9
104.1
113.7
113.0
115.5
110.1
123.4
105.2
115.2
113.5
116.2
110.4
124.5
105.4
115.7
Industry groupings
8 Manufacturing
103.7
106.8r
111.7r
lll.lr
111.2r
111.6
111.8r
112.lr
112.9r
114.1
115.2
115.4
9 Capacity utilization, manufacturing
(percent)
77.8
78.6r
80.6r
80.2r
so. r
80.3r
80.3r
80.4r
80.8r
81.5
82.2
82.1
89.7
97.7
99.2r
91.0
104.0
98.0
99.0
101.0
103.0
105.0
102.0
103.0
11 Nonagricultural employment, total4
1? Goods-producing, total
Manufacturing, total
n
14
Manufacturing, production workers . . .
IS Service-producing
16 Personal income, total
17 Wages and salary disbursements
18
Manufacturing
19 Disposable personal income
20 Retail sales6
106.2
96.6
97.1
96.0'r
109.4
127.6
124.5
113.7
128.6
121.3
106.4
94.9
95.8
94.5rr
110.5
135.3
131.5
117.8
136.8
127.1
108.1
93.1
93.7
93.7
112.8
141.7
136.2
117.8
143.1
135.4r
107.9
93.2
93.8
93.8
112.6
141.5
136.8
118.4
142.8
133.9
108.0
93.0
93.5
93.5
112.8
141.3
136.5
118.0
142.6
134.6
108.2
93.0
93.5
93.5
113.1
141.1
137.2
118.2
142.3
135.2
108.2
92.8
93.3
93.2
113.1
142.9
138.2
118.6
144.1
136.2
108.4
92.8
93.2
93.2
113.4
143.1
138.0
119.1
144.4
136.5
108.5
93.0
93.2
93.3
113.5
144.1
138.8r
119.1
145.4
139.3
108.8
93.2
93.4
93.6
113.7
144.9
139.2
119.8
146.2
140.2
108.9
93.2
93.4
93.7
114.0
145.8
139.9
120.6
147.1
141.9
109.0
93.3
93.5
94.0
114.0
n.a.
n.a.
n.a.
n.a.
141.1
Prices7
71 Consumer (1982-84=100)
22 Producer finished goods (1982=100)
136.2
121.7
140.3
123.2
144.5
124.7
144.2
125.8
144.4
125.5
144.4
125.3
144.8
124.2
145.1
123.8r
145.7
124.7
145.8
124.4
145.8
124.1
146.2
124.4
10 Construction contracts
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
Company, F.W. Dodge Division.
4. Based on data from U.S. Department of Labor, Employment and Earnings.
Series covers employees only, excluding personnel in the armed forces.
5. Based on data from U.S. Department of Commerce, Survey of Current
Business.
2.11
6. Based on data from U.S. Department of Commerce, Survey of Current
Business.
7. Based on data not seasonally adjusted. Seasonally adjusted data for changes
in the price indexes can be obtained from the U.S. Department of Labor, Bureau
of Labor Statistics, Monthly Labor Review.
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. See also "Industrial Production Capacity
and Capacity Utilization since 1987," Federal Reserve Bulletin, vol. 79, (June
1993), pp. 590-605.
LABOR FORCE, EMPLOYMENT, A N D UNEMPLOYMENT
Thousands of persons; monthly data seasonally adjusted except as noted
1993R
Category
1991R
1992R
1994
1993R
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
HOUSEHOLD SURVEY DATA 1
1
7
3
4
5
Civilian labor force1
Nonagricultural industries3
Agriculture
Unemployment
Number
Rate (percent of civilian labor force)
125,303
126,982
128,040
128,056
128,102
128,334
128,108
128,580
128,662
128,898
130,667
114,644
3,233
114,391
3,207
116,232
3,074
116,156
3,031
116,327
3,043
116,687
3,005
116,475
3,093
116,920
3,021
117,218
3,114
117,565
3,0%
118,639
3,331
8,426
6.7
9,384
7.4
8,734
6.8
8,869
6.9
8,732
6.8
8,642
6.7
8,540
6.7
8,639
6.7
8,330
6.5
8,237
6.4
8,696
6.7
108,256
108,519
110,171
110,101
110,338
110,305
110,502
110,664
110,880
111,070
111,132
18,455
689
4,650
5,762
25,365
6,646
28,336
18,402
18,192
631
4,471
5,709
25,391
6,571
29,053
18,653
17,804
599
4,571
5,710
25,849
6,605
30,193
18,841
17,771
596
4,574
5,711
25,861
6,590
30,175
18,823
17,760
595
4,593
5,709
25,916
6,604
30,320
18,841
17,718
592
4,593
5,690
25,902
6,602
30,381
18,827
17,698
596
4,592
5,692
25,953
6,616
30,433
18,922
17,709
596
4,629
5,693
25,968
6,632
30,534
18,903
17,735
595
4,664
5,700
25,982
6,651
30,649
18,904
17,737
606
4,663
5,701
26,038
6,661
30,706
18,958
17,763
604
4,660
5,716
26,068
6,667
30,706
18,948
ESTABLISHMENT SURVEY DATA
6
7
8
9
10
11
1?
N
14
Nonagricultural payroll employment4
Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
Finance
Government
1. Beginning January 1994, reflects redesign of current population survey and
population controls from the 1990 census.
2. Persons sixteen years of age and older, including Resident Armed Forces.
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; excludes
proprietors, self-employed persons, household and unpaid family workers, and
members of the armed forces. Data are adjusted to the March 1992 benchmark,
and only seasonally adjusted data are available at this time.
SOURCE. Based on data from U.S. Department of Labor, Employment and
Earnings.
A46
Domestic Nonfinancial Statistics • April 1994
2.12
OUTPUT, CAPACITY, A N D CAPACITY UTILIZATION1
Seasonally adjusted
1993r
Ql
Q2
1993r
1993r
Q3
Q4
Output (1987=100)
Ql
Q2
Q4
Q3
Capacity (percent of 1987 output)
Ql
Q2
Q3
Q4
Capacity utilization rate (percent)2
1 Total industry
109.7
110.3
111.1
112.8
135.3
135.9
136.5
137.2
81.1
81.2
81.4
82.3
2 Manufacturing
110.3
111.2
111.8
114.1
137.7
138.4
139.2
140.0
80.1
80.3
80.3
81.5
3
4
Primary processing3
Advanced processing
106.1
112.3
107.0
113.2
107.7
113.8
109.7
116.2
127.6
142.5
127.9
143.4
128.3
144.4
128.6
145.4
83.1
78.8
83.6
78.9
83.9
78.8
85.3
79.9
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 .
112.0
99.8
105.1
109.3
99.4
134.8
122.8
121.7
113.2
98.0
105.2
109.7
99.0
141.7
125.9
118.1
114.2
100.8
106.7
112.3
98.9
147.2
129.7
112.0
118.1
105.0
109.5
115.4
101.3
153.1
132.5
131.6
143.5
114.6
123.7
128.0
117.7
170.6
151.8
152.1
144.5
114.8
123.3
127.4
117.6
173.1
153.8
153.4
145.4
115.0
123.0
126.9
117.6
175.7
155.7
154.8
146.3
115.2
122.6
126.3
117.6
178.2
157.7
156.1
78.1
87.1
85.0
85.4
84.4
79.0
80.9
80.0
78.4
85.4
85.3
86.1
84.1
81.8
81.9
76.9
78.5
87.6
86.8
88.6
84.1
83.8
83.2
72.3
80.7
91.1
89.3
91.4
86.2
85.9
84.0
84.3
92.7
90.3
87.4
85.3
134.1
133.7
133.2
132.8
69.1
67.6
65.6
64.2
14
15
16
17
18
19
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
108.1
107.2
110.5
116.2
111.5
103.9
108.7
108.4
113.2
117.7
112.8
104.0
108.9
108.0
111.7
118.6
111.5
104.0
109.1
106.9
114.1
118.2
131.0
118.8
124.3
145.1
130.1
115.8
131.6
119.4
124.8
145.9
131.1
115.7
132.1
119.9
125.3
146.8
115.6
82.8
90.6
89.2
80.5
86.3
89.6
83.0
91.3
91.1
81.2
86.7
89.8
82.8
90.5
89.6
81.2
85.1
89.9
82.6
89.1
91.1
80.5
107.9
130.5
118.3
123.8
144.3
129.2
115.9
93.3
97.4
116.0
115.2
97.5
114.1
114.8
96.8
117.5
118.0
97.0
116.0
115.1
111.7
133.3
130.4
111.4
133.6
130.8
111.1
134.0
131.2
110.8
134.3
131.7
87.2
87.0
88.4
87.5
85.4
87.7
87.1
87.8
89.9
87.6
86.4
87.4
1973
1975
Previous cycle2
High
Low
High
20 Mining
21 Utilities
22 Electric
Low
Latest cycle3
High
Low
1993
Jan.
1993
Aug.
Sept.
Oct/
1994
Nov/
Dec/
Jan.P
83.1
2
Capacity utilization rate (percent)
1 Total industry
99.0
82.7
87.3
71.8
84.8
80.9
81.4r
81.4r
r
81.7
82.2
82.9
99.0
82.7
87.3
70.0
85.1
76.6
80.0
80.3
80.4r
80.8
81.5
82.2
82.1
Primary processing3
Advanced processing
99.0
99.0
82.7
82.7
89.7
86.3
66.8
71.4
89.1
83.3
77.9
76.1
82.9
78.8
84. l r
78.7r
83^
78.9
84.4
79.3
85.3
79.9
86.1
80.5
85.5
80.7
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.
99.0
99.0
99.0
99.0
99.0
99.0
99.0
99.0
82.7
82.7
82.7
82.7
82.7
82.7
82.7
82.7
86.9
87.6
102.4
110.4
90.5
92.1
89.4
93.0
65.0
60.9
46.8
38.3
62.2
64.9
71.1
44.5
83.9
93.3
92.9
95.7
88.9
83.7
84.9
84.5
73.8
76.8
74.3
72.3
75.9
73.0
76.8
57.9
77.9
87.0
84.0
84.6
83.2
78.5
80.3
80.9
78.3r
87.7rr
87. l
ss^
84.5r
83.7rr
83. l
71.5r
79.0r
88.4r
87.3r
88.7rr
85.3
84.T
83.7rr
74.2
79.6
90.9
86.5
89.6
81.8
84.7
83.6
79.7
80.7
90.6
89.5
90.5
88.0
85.6
83.8
84.8
81.8
91.8
91.9
94.0
88.7
87.3
84.5
88.4
82.1
91.9
88.8
88.7
89.0
88.5
85.3
89.6
99.0
82.7
81.1
66.9
88.3
78.1
69.4
65.4r
65. r
64.3
64.3
63.9
63.2
14
15
16
17
18
19
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
99.0
99.0
99.0
99.0
99.0
99.0
82.7
82.7
82.7
82.7
82.7
82.7
87.0
91.7
94.2
85.1
90.9
89.5
76.9
73.8
82.0
70.1
63.4
68.2
86.8
92.1
94.9
85.9
97.0
88.5
80.4
78.7
86.0
78.5
75.5
84.2
82.8
90.7
88.6
80.6
86.2
89.2
83. <f
91.lr1
89.9
81.4
85.7r
89.5r
82.4r
89.2r
89.2r
8 0 ^r
84.6
91. (f
82.5
90.0
90.1
80.4
84.4
93.6
82.6
88.8
91.1
80.7
85.2
93.3
82.6
88.6
92.0
80.4
82.1
86.9
91.1
80.6
93.1
91.8
99.0
99.0
99.0
82.7
82.7
82.7
96.6
88.3
88.3
80.6
76.2
78.7
87.0
92.6
94.8
86.8
83.4
87.4
87.8
85.1
86.9
s?^
88.4r
91.0r
87.7r
86.7
88. lr
88.4
85.6
86.5
86.9
86.4
87.5
87.4
87.1
88.3
88.2
90.1
90.8
2 Manufacturing
3
4
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. See also "Industrial
Production Capacity and Capacity Utilization Since 1987," Federal Reserve
Bulletin, vol. 79, (June 1993), pp. 590-605.
2. Capacity utilization is calculated as the ratio of the Federal Reserve's
seasonally adjusted index of industrial production to the corresponding index of
capacity.
78.3
3. Primary processing includes textiles; lumber; paper; industrial chemicals;
petroleum refining; rubber and plastics; stone, clay, and glass; and primary and
fabricated metals.
4. Advanced processing includes food, tobacco, apparel, furniture, printing,
chemical products such as drugs and toiletries, leather and products, machinery,
transportation equipment, instruments, miscellaneous manufacturing, and ordnance.
5. Monthly highs, 1978 through 1980; monthly lows, 1982.
6. Monthly highs, 1988-89; monthly lows, 1990-91.
Selected Measures
2.13 INDUSTRIAL PRODUCTION
A47
Indexes and Gross Value 1
Monthly data seasonally adjusted
1987
Group
portion
1993
1992
1993
avg.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug/
Sept/
Oct/
Nov/
Dec."
111.0
111.4
112.1
113.2
114.0
111.4
114.8
108.6
113.4
112.9
114.9
85.2
166.4
109.5
113.8
129.6
109.0
108.0
107.3
104.8
92.6
123.0
101.3
114.6
113.1
115.1
112.4
115.9
109.6
117.0
119.5
124.9
95.4
176.0
110.4
114.9
131.9
108.6
109.3
107.4
104.5
92.9
124.2
100.6
115.4
114.6
115.7
113.0
116.6
109.8
118.6
123.4
131.5
98.8
188.0
109.9
114.4
128.5
109.4
109.6
107.2
104.4
92.5
124.3
99.4
115.7
112.0
117.1
Index (1987 = 100)
MAJOR MARKETS
1 Total index
100.0
111.0
108.9
109.3
109.9
110.1
110.4
110.2
110.5
110.8
? Products
Final products
Consumer goods, total
4
Durable consumer goods
Automotive products
6
Autos and trucks
7
8
Autos, consumer
9
Trucks, consumer
10
Auto parts and allied goods...
Other
11
Appliances, A/C, and TV
1?
Carpeting and furniture
N
Miscellaneous home goods . . .
14
IS
Nondurable consumer goods
16
Foods and tobacco
Clothing
17
18
Chemical products
Paper products
19
Energy
?N
Fuels
?I
Residential utilities
22
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
110.2
113.5
108.1
111.3
110.6
112.2
86.1
157.3
108.0
111.9
122.9
107.8
108.3
107.2
104.5
93.7
123.3
100.9
114.0
108.3
116.2
108.2
111.5
107.5
107.9
108.7
111.7
86.9
154.6
103.8
107.2
110.5
105.4
106.6
107.4
104.8
96.0
121.7
100.9
114.4
106.1
117.5
108.5
111.9
107.6
110.9
112.7
116.8
86.6
169.1
105.8
109.3
116.0
105.5
108.0
106.7
104.6
95.7
122.4
100.2
109.5
106.5
110.7
109.2
112.4
108.5
111.3
111.9
114.6
90.2
156.9
107.4
110.7
117.6
106.7
109.5
107.7
105.5
95.0
121.1
101.8
115.5
108.9
118.0
109.5
112.7
108.6
111.5
111.2
113.4
90.5
153.1
107.5
111.7
125.0
104.5
108.9
107.7
104.3
94.6
123.7
102.1
116.0
107.1
119.5
109.6
112.8
108.1
112.2
112.1
114.3
90.2
155.9
108.5
112.3
124.3
106.2
109.6
106.9
103.9
94.9
123.1
101.7
111.5
106.6
113.4
109.3
112.5
107.3
110.8
109.7
110.1
86.5
150.9
109.1
111.8
121.1
108.9
108.4
106.3
104.3
94.2
122.6
101.8
107.4
106.5
107.7
109.4
112.7
107.3
107.9
105.3
105.0
83.5
142.3
105.8
110.2
116.1
109.1
107.6
107.2
104.7
94.6
123.0
102.6
110.4
105.8
112.2
110.0
113.2
107.7
108.6
103.3
100.3
78.2
138.6
108.4
113.2
127.3
109.9
107.4
107.4
104.9
93.6
124.0
101.3
112.9
105.0
116.0
110.3
113.5
107.8
107.9
103.0
99.2
71.8
146.7
109.3
112.2
123.8
108.3
108.1
107.8
105.5
93.3
123.8
100.8
114.7
104.0
118.9
110.5
113.8
107.4
109.3
105.6
104.1
75.4
153.9
108.1
112.5
125.9
107.3
108.2
106.9
104.2
92.6
124.0
100.8
112.9
108.2
114.7
?3
74
3?
33
Equipment
Business equipment
Information processing and related ..
Office and computing
Industrial
Transit
Autos and trucks
Other
Defense and space equipment
Oil and gas well drilling
Manufactured homes
20.0
13.9
5.6
1.9
4.0
2.5
1.2
1.9
5.4
.6
.2
121.2
137.0
156.2
223.6
115.8
141.2
134.5
119.1
78.7
82.5
117.2
129.6
143.2
186.4
112.3
144.1
131.4
109.2
82.5
91.2
128.6
118.1
131.2
144.4
192.0
113.1
146.7
136.7
112.6
82.0
89.0
129.4
118.0
131.7
146.1
198.0
112.2
146.5
136.8
113.4
81.5
77.9
127.1
118.7
133.4
149.1
203.3
113.7
145.0
135.8
114.9
80.7
71.1
116.2
119.7 119.9
134.8 135.4
150.6 153.5
209.5 216.5
115.0 115.0
145.0 142.5
136.2 133.1
117.5 116.2
80.5
79.5
72.4 - 75.1
114.9 112.1
120.4
136.1
155.7
221.0
115.6
138.0
127.2
117.6
78.6
82.4
113.6
121.2
137.1
158.2
226.5
117.2
133.2
118.9
119.6
78.6
81.0
118.5
121.6
137.6
158.8
232.0
117.3
132.5
119.6
121.9
78.0
87.8
116.2
122.9
139.4
161.5
237.1
117.8
135.3
126.5
123.1
77.5
90.5
120.6
123.8
140.8
162.3
241.8
117.6
141.3
139.6
124.5
76.9
88.9
127.7
125.2
142.9
164.9
247.9
118.5
145.7
150.5
125.0
76.6
85.7
138.4
126.6
144.9
168.2
255.0
119.5
147.7
154.9
125.5
76.1
85.0
34
35
36
Intermediate products, total
Construction supplies
Business supplies
14.7
6.0
8.7
100.1
98.1
101.5
98.3
94.5
100.8
98.2
94.8
100.5
99.3
97.5
100.5
99.6
96.4
101.8
100.0
96.4
102.5
99.7
97.7
101.0
99.4
96.8
101.1
100.4
98.4
101.7
100.6
98.7
101.8
100.4
99.3
101.2
101.0
99.9
101.6
101.8
100.7
102.5
101.9
101.3
102.2
37 Materials
38 Durable goods materials
39
Durable consumer parts
Equipment parts
40
Other
41
Basic metal materials
47
43 Nondurable goods materials
Textile materials
44
45
Pulp and paper materials
Chemical materials
46
Other
47
48 Energy materials
49
Primary energy
Converted fuel materials
50
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
112.2
116.0
112.7
125.1
109.9
111.4
114.0
104.0
113.3
117.5
113.8
103.5
98.8
112.6
110.0
111.9
107.5
119.7
107.5
108.8
111.5
102.9
110.7
114.6
111.3
105.1
101.3
112.4
110.4
113.3
110.8
120.4
108.6
110.4
112.4
104.2
110.7
114.9
114.1
103.4
100.4
109.1
110.9
114.2
111.8
121.0
109.7
113.2
112.1
103.2
111.9
114.6
112.5
103.8
98.3
114.6
110.9
114.1
112.2
121.3
108.9
109.9
112.8
104.2
112.8
115.6
112.6
103.5
97.4
115.4
111.5
114.9
112.6
122.7
109.5
110.3
113.8
102.7
115.3
116.1
114.2
103.4
99.9
110.3
111.6
114.8
111.6
123.5
109.2
111.1
114.1
104.3
114.1
117.2
113.6
103.4
101.6
106.8
112.1
114.9
110.2
124.1
109.4
111.3
114.8
104.9
115.9
118.6
112.3
104.6
100.9
111.7
112.0
115.4
109.8
124.9
110.2
111.3
114.2
105.9
113.4
117.3
114.0
103.7
98.2
114.5
112.2
115.8
110.3
126.2
109.7
109.7
115.2
105.6
113.5
119.5
114.2
102.8
96.7
114.9
112.7
117.2
112.0
128.0
110.6
110.8
113.8
102.9
112.6
117.9
113.3
103.3
98.7
112.4
113.2
118.2
114.2
129.2
110.8
112.2
114.4
103.9
112.1
118.0
115.8
102.9
97.9
112.7
114.3
119.7
118.6
129.6
111.9
112.8
115.5
104.1
114.2
119.1
116.7
103.0
97.6
113.8
115.5
121.7
123.6
131.5
112.8
114.3
115.3
104.2
113.1
119.8
115.6
103.9
98.5
114.4
97.3
95.3
110.7
110.5
108.6
108.6
108.9
108.7
109.5
109.3
109.7
109.6
110.1
109.9
110.0
109.8
110.4
110.3
110.9
110.9
111.1
111.1
111.3
111.2
111.8
111.5
112.6
112.2
113.2
112.7
75
76
77
?8
79
10
31
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
trucks
55 Consumer goods excluding energy
56 Business equipment excluding autos and
trucks
57 Business equipment excluding office and
computing equipment
58 Materials excluding energy
97.5
108.3
107.1
107.3
107.8
107.8
108.0
107.7
107.8
108.1
108.1
108.4
109.0
110.0
110.6
24.5
23.3
107.8
107.5
107.3
106.8
107.0
107.4
108.1
107.7
108.2
107.7
107.6
107.6
107.1
107.3
107.5
107.0
108.2
107.1
108.4
107.0
107.7
106.8
108.2
108.0
108.5
108.9
108.2
109.1
12.7
137.2
129.5
130.7
131.3
133.2
134.6
135.6
136.8
138.7
139.1
140.6
140.9
142.2
144.1
12.0
28.4
122.4
115.4
120.1
111.8
121.0
113.0
120.6
113.6
121.6
113.7
122.2
114.6
121.8
114.6
121.8
114.9
122.1
115.1
121.7
115.6
123.0
116.1
123.8
117.0
125.2
118.4
126.4
119.8
A48
2.13
Domestic Nonfinancial Statistics • April 1994
INDUSTRIAL PRODUCTION
_
Oroup
1987
proportion
SIC
code
Indexes and Gross Value 1 —Continued
1992
1993
1993
avg.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug/
Sept.r
Oct/
Nov. r
Dec. p
Index (1987 = 100)
MAJOR INDUSTRIES
59 Total index
100.0
111.0
108.9
109.3
109.9
110.1
110.4
110.2
110.5
110.8
111.0
111.4
112.1
113.2
114.0
84.3
27.1
57.1
111.9
107.5
113.9
109.2
105.0
111.3
109.9
105.8
111.9
110.5
106.9
112.2
110.8
106.4
112.9
111.4
107.1
113.4
111.3
107.1
113.3
111.3
107.5
113.0
111.6
107.6
113.5
111.9
108.0
113.7
112.3
107.6
114.5
113.2
108.2
115.6
114.5
109.5
116.8
115.3
109.9
117.8
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
Industrial and commercial
machinery and
computer equipment .
35
Office and computing
357
machines
Electrical machinery
36
Transportation
37
equipment
Motor vehicles and
371
parts
Autos and light
trucks
Aerospace and miscellaneous transportation equipment... 372-6,9
38
Instruments
39
Miscellaneous
46.5
2.1
1.5
115.9
100.0
109.4
111.8
98.0
103.9
112.9
99.3
105.2
113.8
101.8
106.0
114.1
98.0
107.3
115.0
98.1
108.8
114.9
97.4
108.4
114.6
96.5
109.5
115.4
99.1
111.1
115.7
99.9
111.1
117.0
100.7
111.3
118.3
104.0
111.4
120.1
104.2
111.5
121.7
104.6
110.9
2.4
3.3
1.9
.1
1.4
100.5
105.5
110.5
97.0
102.8
107.0
103.4
97.1
98.9
108.0
112.9
105.9
101.4
98.6
104.2
107.6
102.0
99.4
99.8
104.4
108.4
102.6
98.9
99.6
104.2
108.1
105.1
98.9
100.5
105.7
110.9
106.8
98.5
100.8
105.3
111.9
108.2
96.3
100.9
106.2
112.1
106.2
98.0
102.4
106.0
111.1
105.3
98.9
101.4
105.0
112.4
106.7
94.9
102.9
107.1
111.1
106.8
101.6
103.0
109.1
114.6
98^6
98.0
102.4
107.4
104.6
95.7
5.4
100.9
97.8
99.8
99.7
100.3
101.4
100.6
100.1
101.2
101.0
100.9
101.6
102.7
103.3
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 . . .
60 Manufacturing
61 Primary processing
62 Advanced processing
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92 Mining
93 Metal
94 Coal
95 Oil and gas extraction
% Stone and earth minerals ..
97 Utilities
98 Electric
99 Gas
101 [6
8.5
146.8
133.8
135.0
136.7
139.6
142.8
144.2
145.4
148.5
149.9
152.1
153.7
156.2
158.8
2.3
6.9
223.6
131.7
186.4
124.8
192.0
125.8
198.0
127.1
203.3
128.5
209.5
129.0
216.5
129.7
221.0
130.1
226.5
132.3
232.0
133.5
237.1
135.2
241.8
136.0
247.9
137.2
255.0
138.7
112.7
30
31
105.6
106.3
108.4
107.8
106.9
106.9
105.5
102.6
100.8
100.4
102.4
106.3
110.0
120.1
116.2
120.9
120.7
120.1
120.4
118.1
114.3
110.1
110.0
115.0
124.1
132.3
138.8
2.2
114.9
114.4
118.2
117.8
116.9
117.5
113.1
108.2
102.8
104.0
104.8
116.3
127.3
133.5
5.1
5.1
1.3
92.0
102.2
113.1
97.1
103.3
111.8
96.7
103.0
110.9
95.8
102.2
111.9
94.6
103.3
112.6
94.2
102.6
114.3
93.7
102.5
113.1
91.8
102.5
112.1
92.0
102.8
112.3
91.3
101.3
112.5
90.5
102.0
114.3
89.5
101.7
113.7
89.0
101.5
114.3
88.2
102.1
115.1
37.8
8.8
1.0
1.8
2.3
3.6
6.5
8.8
1.3
106.8
106.9
91.1
106.3
90.8
112.0
94.1
118.3
104.8
106.0
106.2
96.1
106.0
92.7
108.3
94.7
116.7
103.4
106.4
105.9
100.5
106.9
93.1
108.6
94.7
116.8
103.2
106.4
106.9
99.3
106.2
92.5
110.4
94.0
116.2
104.7
106.6
106.7
92.4
105.4
92.1
111.1
94.7
117.6
104.7
106.9
106.7
90.2
104.2
92.0
113.1
95.6
117.8
104.3
106.9
106.7
92.1
106.9
91.2
112.1
94.7
118.1
103.6
107.2
107.1
89.1
107.1
91.1
114.2
94.5
119.1
103.9
107.0
107.2
91.5
107.7
90.7
112.0
93.8
118.7
102.5
107.3
107.8
92.7
107.4
90.6
113.1
93.4
119.1
102.4
106.5
107.3
85.8
105.4
89.6
111.2
93.8
118.5
104.3
107.0
107.8
88.2
106.6
89.4
111.8
94.3
118.1
107.9
107.6
107.2
89.1
106.3
90.0
113.8
94.4
119.6
108.2
107.4
107.0
88.7
106.8
89.7
112.8
93.3
120.0
107.1
3.2
.3
113.7
111.3
113.6
112.7
112.9
96.7
113.6
113.8
98.1
97.1
99.0
99.1
100.1
98.2
112.8
97.0
114.7
96.8
114.8
97.0
113.9
98.2
113.9
99.1
115.4
99.3
116.4
99.4
8.0
"20
21
22
23
26
27
28
29
9.9
4.8
98.2
158.1
107.9
93.4
92.6
98.3
167.7
108.2
92.7
93.8
95.9
163.0
101.7
90.9
95.2
95.3
158.2
102.3
90.4
93.4
96.4
162.5
108.2
90.5
92.3
97.3
169.3
106.4
91.6
94.0
98.0
164.4
106.7
93.1
91.7
96.4
167.7
101.0
91.6
93.2
95.5
148.2
95.9
92.4
94.7
97.7
161.5
103.9
93.0
95.0
98.2
178.5
104.7
92.7
94.3
97.4
172.0
100.7
92.6
95.9
97.9
172.8
104.0
92.6
94.5
10
11,12
13
14
1.2
5.8
.7
97.0
165.5
103.6
92.0
93.9
49I,3PT
7.7
6.1
1.6
116.0
115.7
116.9
116.8
116.4
118.2
112.8
112.9
112.4
117.5
116.5
121.4
117.8
116.3
123.3
114.4
114.5
113.9
112.1
114.0
104.9
114.9
115.6
112.2
116.9
118.1
112.4
117.7
118.9
113.3
115.3
115.1
116.0
114.6
113.6
118.2
115.4
114.8
117.8
116.6
116.1
118.6
79.5
111.4
108.8
109.3
109.8
110.2
110.8
110.9
111.1
111.7
112.0
112.1
112.6
113.4
113.8
81.9
108.7
107.0
107.6
108.0
108.1
108.6
108.3
108.1
108.3
108.5
108.7
109.5
110.7
111.3
492,3PT
.3
SPECIAL AGGREGATES
100 Manufacturing excluding
motor vehicles and
parts
101 Manufacturing excluding
office and computing
machines
Gross value (billions of 1987 dollars, annual rates)
MAJOR MARKETS
102 Products, total
1,707.0 1,890.0 1,857.5 1,864.9 1,880.2 1,880.3 1,882.8 1,872.6 1,873.2 1,877.4 1,879.3 1,887.2 1,914.3 1,938.2 1,947.2
103 Final
104 Consumer goods
105 Equipment
106 Intermediate
1,314.6 1,492.5 1,466.8 1,476.4 1,485.7 1,484.3 1,485.6 1,477.9 1,477.5 1,479.0 1,480.5 1,489.1 1,513.4 1,534.3 1,542.1
866.6 944.8 936.3 940.0 949.4 946.1 943.6 936.1 935.5 935.5 935.6 936.7 953.8 965.7 966.6
448.0 547.6 530.5 536.5 536.3 538.2 541.9 541.8 541.9 543.4 544.9 552.4 559.6 568.7 575.5
392.5 397.6 390.7 388.4 394.5 396.0 397.3 394.7 395.7 398.4 398.8 398.1 401.0 403.9 405.1
1. Data in this table also appear in the Board's G.17 (419) monthly statistical
release. For ordering address, see inside front cover.
A revision of the industrial production index and the capacity utilization rates
was released in May 1993. See "Industrial Production, Capacity, and Capacity
Utilization since 1987," Federal Reserve Bulletin, vol. 79 (June 1993), pp. 590-605.
2. Standard industrial classification.
Selected Measures
2.14
A49
HOUSING A N D CONSTRUCTION
Monthly figures at seasonally adjusted annual rates except as noted
1993
Item
1991
1992
1993
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.*
Nov.*
Dec.
Private residential real estate activity (thousands of units except as noted)
NEW UNITS
1,271
1,047
224
1,359*
1,160*
199*
678
543
135
1,166
1,034
132
254*
1,304
1,097
207
1,409
1,231
178
688
551
137
1,254
1,084
170
260
1,374
1,145
229
1,406
1,248
158
700
563
137
1,255
1,109
146
283
1,476
1,198
278
1,571
1,349
222
715
577
138
1,301
1,129
172
n.a.
642
286
742*
288*
729
292
' 774
298
862
303
123.9
143.4
126.6
150.6
129.4
150.1*
125.0
147.2
130.0
153.8
121.0
145.3
3,700r
3,850*
3,860*
3,990*
4,030
4,120
4,350
109.2r
137.3r
108.4r
135.8r
108.8*
135.4*
107.2
133.6*
106.6
133.0
107.1
133.1
107.4
133.7
Permits authorized
One-family
Two-or-more-family
Started
One-family
Two-or-more-family
Under construction at end of period1..
One-family
Two-or-more-family
Completed
One-family
Two-or-more-family
Mobile homes shipped
949
754
195
1,014
840
174
606
434
173
1,091
838
253
171
1,095
911
184
1,200
1,030
169
612
473
140
1,158
964
194
210
1,201
1,009
192
1,285
1,124
162
681
545
137
1,193
1,038
156
234
1,034
871
163
l,092rr
957
135*
635
502
133
1,108
995
113
245r
1,101
925
176
l,232r
1,082*
150*
637
506
131
1,222
1,075
147
240*
1,121
919
202
l,241r
l,100r
141
645
515
130
1,129
987
142
235r
1,115
925
190
1,238rr
l,067 r
171
649
517
132
1,158
987
171
238r
1,162
977
185
l,245r
l,076r
169*
658
527
131
1,088
947
141
246r
1,242
1,015
227
1,319*
1,178*
141*
662
534
128
1,256
1,078
178
247*
Merchant builder activity in
one-family units
14 Number sold
15 Number for sale at end of period1 . . .
507
284
610
265
669
303
602
270
689
271
629
274
641
274
647
276
120.0
147.0
121.3
144.9
125.8
147.6
125.0
146.6
127.0
148.4
129.9
152.3
124.5
145.7
18 Number sold
3,219
3,520
3,800
3,430"
3,460"
3,610"^
Price of units sold (thousands
of dollars)
19 Median
20 Average
99.7
127.4
103.6
130.8
106.5
133.1
105.1
131.6r
105.5r
132.7r
106.5
132.6r
1
2
3
4
5
6
7
8
9
10
11
12
13
Price of units sold (thousands
16 Median
17 Average
EXISTING UNITS (one-family)
Value of new construction (millions of dollars)3
CONSTRUCTION
21 Total put in place
403,439 436,043 470,294 454,465 449,054 453,256 460,680 466,593 468,547 477,125 489,660 500,041 513,100
7? Private
73 Residential
24 Nonresidential
75
Industrial buildings
26
Commercial buildings
77
Other buildings
28
Public utilities and other
293,536 317,256 342,715 336,972 328,150 332,231 335,028 337,909 341,351 345,572 354,102 364,482 371,917
157,837 187,820 207,901 205,519 197,317 198,380 200,496 204,631 206,594 209,520 215,198 222,299 228,584
135,699 129,436 134,814 131,453 130,833 133,851 134,532 133,278 134,757 136,052 138,904 142,183 143,333
22,281 20,720 20,725 22,152 19,458 20,091 19,316 19,799 20,126 21,346 21,311 22,325 22,805
48,482 41,523 42,992 41,323 42,426 42,428 42,723 41,524 42,342 42,225 44,405 46,162 47,163
20,797 21,494 23,467 21,484 22,568 23,293 23,849 23,817 25,047 24,487 24,737 24,211 25,158
44,139 45,699 47,630 46,494 46,381 48,039 48,644 48,138 47,242 47,994 48,451 49,485 48,207
79 Public
30 Military
31 Highway
37 Conservation and development...
33 Other
109,900 118,784 127,581 117,493 120,904 121,025
2,502
2,586
2,533
2,393
1,837
2,500
32,026 34,929 37,331 33,413 34,534 34,320
5,875
5,918
7,112
6,019
4,861
6,138
71,176 75,435 81,612 74,382 77,962 78,293
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 Census Bureau in July 1976.
SOURCE. Bureau of the Census estimates for all series except (1) mobile homes,
which are private, domestic shipments as reported by the Manufactured Housing
125,652 128,684
2,493
2,234
37,649 37,376
5,661
6,103
79,666 83,154
127,196 131,553 135,558
2,583
2,492
2,550
35,148 39,147 40,551
5,620
6,307
5,940
83,845 83,607 86,517
135,559
2,341
41,539
6,363
85,316
141,183
2,501
41,689
6,471
90,522
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 1994
C O N S U M E R 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
1993r
1993
Jan.
19941
1993
1994
Jan.
Mar.
June
Sept.
Dec.
Sept.
3.1
2.5
2.0
3.3
.LR
r
Oct.
Nov.
Dec.
.3R
.3R
.2
r
.2r
-.9 r
,4
.3r
.5
-,7 rr
.2
,4R
.3r
.R
-.1r
.6
-2.6 r
Index
level,
Jan.
19941
Jan.
CONSUMER PRICES 2
(1982-84=100)
1 All items
3.3
2 Food
3 Energy items
4 All items less food and energy
5 Commodities
6 Services
2.5
1.9
3.3
3.5
2.7
3.8
2.8
-2.0
2.9
1.3
3.6
2.0
1.2
3.8
3.0
4.1
2.3
-3.8
3.2
.9
4.1
2.6
-4.2
2.1
.0
3.5
4.9
1.2
3.4
2.4
3.7
7 Finished goods
8 Consumer foods
9 Consumer energy
10 Other consumer goods
11 Capital equipment
2.0
1.5
3.1
1.9
1.7
.2
2.3
-4.0
-.5
1.9
3.9
.0
14.1
2.9
4.1
.0
1.3
-5.4
.6
.6
-2.5
3.2
-7.4
-6.4
2.2
-.3
5.2
-14.6
1.2
.9
Intermediate materials
12 Excluding foods and feeds
13 Excluding energy
1.9
1.5
.6
1.5
4.2
4.0
.3
.0
-1.0
1.0
-.7
1.6
Crude materials
14 Foods
15 Energy
16 Other
1.8
5.6
9.2
5.6
-9.0
10.0
1.9
-10.1
22.1
-3.0
17.5
11.2
13.1
-28.1
-4.5
15.5
-26.8
19.6
1.2r
.3
-.4
.1r
-.3
.2
,5
1.9
.3r
.2
,2r
.0
146.2
-.1
-.8
.1
.0
.2
143.7
101.3
154.3
135.4
165.1
.3
.2
-.3
.8
.3
.6
124.4
127.1
73.5
138.3
133.3
.R
PRODUCER PRICES
(1982=100)
1. Not seasonally adjusted.
2. Figures for consumer prices are for all urban consumers and reflect a
rental-equivalence measure of homeownership.
.2
.6r
-.R
-.2 r
.9
-,3 r
-.3 r
.9r
-2.2 rr
,4
.2
.(f
.0
,2r
-.R
.I
-.3
.2
.2
.2
116.1
124.7
.5R
-1.5 r
5.5r
,4
4.2r
-3.8 r
1.8
l.ff
-8.9 r
2.3
-.9
3.8
1.6
111.5
71.5
147.7
- R
.ff
.R
.R
.R
.R
SOURCE. U.S. Department of Labor, Bureau of Labor Statistics.
Selected Measures
2.16
A51
GROSS DOMESTIC PRODUCT A N D INCOME
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
1993
1992
Account
1991
1992
1993
Q4
Ql
Q2
Q3
Q4
GROSS DOMESTIC PRODUCT
5,722.9
6,038.5
6,374.0
6,194.4
6,261.6
6,327.6
6,395.9
6,510.8
3,906.4
457.8
1,257.9
2,190.7
4,139.9
497.3
1,300.9
2,341.6
4,390.6
537.7
1,350.2
2,502.7
4,256.2
516.6
1,331.7
2,407.9
4,296.2
515.3
1,335.3
2,445.5
4,359.9
531.6
1,344.8
2,483.4
4,419.1
541.9
1,352.4
2,524.8
4,487.4
561.9
1,368.4
2,557.2
736.9
745.5
555.9
182.6
373.3
189.6
796.5
789.1
565.5
172.6
392.9
223.6
892.0
875.2
622.9
178.6
444.4
252.3
833.3
821.3
579.5
171.1
408.3
241.8
874.1
839.5
594.7
172.4
422.2
244.9
874.1
861.0
619.1
177.6
441.6
241.9
884.0
876.3
624.9
179.1
445.8
251.3
935.8
924.1
653.0
185.2
467.8
271.1
-8.6
-8.6
7.3
2.3
16.8
23.1
12.0
9.5
34.6
33.0
13.1
16.8
7.7
22.6
11.7
19.9
-19.6
601.5
621.1
-29.6
640.5
670.1
-65.7
660.1
725.8
-38.8
654.7
693.5
-48.3
651.3
699.6
-65.1
660.0
725.0
-71.9
653.2
725.1
-77.7
675.8
753.5
17 Government purchases of goods and services
18 Federal
19 State and local
1,099.3
445.9
653.4
1,131.8
448.8
683.0
1,157.1
443.4
713.7
1,143.8
452.4
691.4
1,139.7
442.7
697.0
1,158.6
447.5
711.1
1,164.8
443.6
721.2
1,165.3
439.7
725.6
By major type of product
70 Final sales, total
71 Goods
Durable
??
73
Nondurable
Services
74
Structures
25
5,731.6
2,227.0
934.3
1,292.8
3,032.7
471.9
6,031.2
2,305.5
975.8
1,329.6
3,221.1
504.7
6,357.2
2,403.1
1,034.6
1,368.5
3,409.5
544.6
6,182.5
2,365.6
1,008.3
1,357.3
3,296.1
520.8
6,227.1
2,362.9
1,003.5
1,359.3
3,341.8
522.4
6,314.5
2,395.0
1,037.8
1,357.1
3,388.1
531.5
6,388.2
2,401.7
1,032.9
1,368.8
3,437.8
548.7
6,499.0
2,452.9
1,064.3
1,388.6
3,470.3
575.8
-8.6
-12.9
4.3
7.3
2.1
5.3
16.8
13.0
3.8
12.0
-1.2
13.2
34.6
15.0
19.5
13.1
2.7
10.4
7.7
14.8
-7.2
11.7
19.5
-7.7
4,861.4
4,986.3
5,132.7
5,068.3
5,078.2
5,102.1
5,138.3
5,212.1
1
2
3
4
5
By source
Personal consumption expenditures
Durable goods
Nondurable goods
Services
6 Gross private domestic investment
7 Fixed investment
Nonresidential
8
9
Structures
Producers' durable equipment
10
Residential structures
11
12
13
Change in business inventories
Nonfarm
Net exports of goods and services
Exports
16 Imports
14
IS
26 Change in business inventories
77 Durable goods
28 Nondurable goods
MEMO
29 Total GDP in 1987 dollars
NATIONAL INCOME
30
4,598.3
4,836.6
n.a.
4,975.8
5,038.9
5,104.0
5,143.2
n.a.
31 Compensation of employees
3? Wages and salaries
33
Government and government enterprises
Other
34
35 Supplement to wages and salaries
Employer contributions for social insurance
36
Other labor income
37
3,402.4
2,814.9
545.3
2,269.6
587.5
290.6
296.9
3,582.0
2,953.1
567.5
2,385.6
629.0
306.3
322.7
3,772.1
3,100.4
589.7
2,510.7
671.7
321.0
350.7
3,658.6
3,015.8
574.2
2,441.6
642.8
311.3
331.5
3,705.1
3,054.3
584.1
2,470.2
650.7
312.2
338.5
3,750.6
3,082.7
586.3
2,496.3
668.0
321.4
346.6
3,793.9
3,115.4
592.8
2,522.6
678.5
323.8
354.7
3,839.0
3,149.2
595.5
2,553.7
689.8
326.8
362.9
38 Proprietors' income1
39 Business and professional
1
40 Farm
376.4
339.5
36.8
414.3
370.6
43.7
442.1
397.1
45.0
431.2
383.6
47.6
444.1
388.4
55.7
439.4
392.4
47.0
422.5
397.6
24.8
462.4
410.1
52.4
41 Rental income of persons2
-12.8
-8.9
13.0
-1.2
7.5
12.7
13.7
17.9
42
Corporate profits1
43 Profits before tax3
44 Inventory valuation adjustment
45 Capital consumption adjustment
369.5
362.3
4.9
2.2
407.2
395.4
-5.3
17.1
n.a.
n.a.
-7.8
24.3
439.5
409.9
4.9
24.7
432.1
419.8
-12.7
25.1
458.1
445.6
-12.2
24.7
468.5
443.8
1.0
23.8
n.a.
n.a.
-7.2
23.6
46 Net interest
462.8
442.0
n.a.
447.7
450.1
443.2
444.6
n.a.
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. U.S. Department of Commerce, Survey of Current Business.
A52
2.17
Domestic Nonfinancial Statistics • April 1994
PERSONAL INCOME A N D SAVING
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
1993
1992
Account
1991
1992
1993
Q4
Ql
Q2
Q3
Q4
PERSONAL INCOME AND SAVING
1 Total personal income
4,850.9
5,144.9
5,387.6
5,328.3
5,254.7
5,373.2
5,412.7
5,509.8
7 Wage and salary disbursements
Commodity-producing industries
4
5 Distributive industries
< Service industries
s
7 Government and government enterprises
2,815.0
738.1
557.2
648.0
883.5
545.4
2,973.1
756.5
577.6
682.0
967.0
567.5
3,080.4
763.6
577.2
706.4
1,020.8
589.7
3,095.8
783.3
602.0
709.9
1,028.4
574.2
2,974.3
740.7
559.7
682.9
966.6
584.1
3,082.7
765.1
580.3
709.1
1,022.2
586.3
3,115.4
769.4
581.5
714.4
1,038.8
592.8
3,149.2
779.0
587.5
719.2
1,055.5
595.5
14 Personal interest income
is Transfer payments
16 Old-age survivors, disability, and health insurance benefits . . .
296.9
376.4
339.5
36.8
-12.8
127.9
715.6
769.9
382.3
322.7
414.3
370.6
43.7
-8.9
140.4
694.3
858.4
413.9
350.7
442.1
397.1
45.0
13.0
158.3
695.8
911.6
438.2
331.5
431.2
383.6
47.6
-1.2
152.3
694.5
877.4
420.8
338.5
444.1
388.4
55.7
7.5
157.0
695.4
894.4
433.1
346.6
439.4
392.4
47.0
12.7
157.8
693.1
905.5
435.0
354.7
422.5
397.6
24.8
13.7
159.0
695.7
918.5
439.4
362.9
462.4
410.1
52.4
17.9
159.4
699.2
927.9
445.4
17
237.8
249.3
264.3
253.3
256.6
264.5
266.8
269.2
5,412.7
5,509.8
8 Other labor income
1
10 Business and professional
11
1? Rental income of persons
N
LESS: Personal contributions for social insurance
18 EQUALS: Personal income
19
LESS: Personal tax and nontax payments
4,850.9
5,144.9
5,387.6
5,328.3
5,254.7
5,373.2
620.4
644.8
681.6
670.7
657.1
681.0
689.0
699.1
4,810.7
20 EQUALS: Disposable personal income
4,230.5
4,500.2
4,706.0
4,657.6
4,597.5
4,692.2
4,723.7
21
4,029.0
4,261.5
4,515.7
4,377.9
4,419.7
4,483.6
4,544.0
4,615.5
195.2
LESS: Personal outlays
201.5
238.7
190.3
279.7
177.9
208.7
19,237.9
12,895.2
13,965.0
19,518.0
13,080.9
14,219.0
19,874.5
13,368.5
14,329.0
19,754.1
13,240.9
14,490.0
19,744.4
13,234.2
14,163.0
19,785.4
13,311.6
14,326.0
19,868.8
13,416.2
14,341.0
20,097.3
13,510.7
14,484.0
4.8
22 EQUALS: Personal saving
179.7
5.3
4.0
6.0
3.9
4.4
3.8
4.1
733.7
717.8
718.8
762.0
766.7
774.3
n.a.
n.a.
MEMO
Per capita (1987 dollars)
Gross domestic product
74 Personal consumption expenditures
25 Disposable personal income
n
26 Saving rate (percent)
GROSS SAVING
27 Gross saving
n.a.
28 Gross private saving
929.9
986.9
n.a.
969.4
1,024.8
988.3
988.7
79 Personal saving
30 Undistributed corporate profits
31 Corporate inventory valuation adjustment
201.5
102.3
4.9
238.7
110.4
-5.3
190.3
n.a.
-7.8
279.7
121.7
4.9
177.9
103.7
-12.7
208.7
116.3
-12.2
179.7
129.3
1.0
195.2
n.a.
-7.2
Capital consumption allowances
3T
33 Noncorporate
383.2
242.8
396.6
261.3
408.9
262.3
396.5
251.5
402.2
261.0
405.2
258.1
414.0
265.7
414.1
264.5
-196.2
-203.4
7.3
-269.1
-276.3
7.2
-223.7
-225.8
2.1
-250.6
-264.2
13.5
-262.8
-263.5
.8
-221.5
-222.6
1.1
-214.4
-212.7
-1.7
n.a.
n.a.
n.a.
34 Government surplus, or deficit (-), national income and
product accounts
Federal
State and local
35
36
37 Gross investment
743.3
741.4
n.a.
750.9
796.5
778.7
787.6
n.a.
38 Gross private domestic
39 Net foreign
736.9
6.4
796.5
-55.1
892.0
n.a.
833.3
-82.4
874.1
-77.6
874.1
-95.4
884.0
-96.4
935.8
n.a.
9.6
23.6
32.1
34.4
12.0
13.3
40 Statistical discrepancy
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
n.a.
SOURCE. U.S. Department of Commerce, Survey of Current Business.
n.a.
Summary
3.10
U.S. INTERNATIONAL TRANSACTIONS
Statistics
A53
Summary
Millions of dollars; quarterly data seasonally adjusted except as noted 1
1993
1992
Item credits or debits
1990
1991
1992
Q3
1 Balance on current account
2 Merchandise trade balance2
3
Merchandise exports
4
Merchandise imports
5 Military transactions, net
6 Other service transactions, net
7 Investment income, net
8 U.S. government grants
9 U.S. government pensions and other transfers
10 Private remittances and other transfers
11 Change in U.S. government assets other than official
reserve assets, net (increase, - )
-91,861
-109,033
389,303
-498,336
-7,834
38,485
20,348
-17,434
-2,934
-13,459
-8,324
-73,802
416,937
-490,739
-5,851
51,733
13,021
24,073
-3,461
-14,037
-66,400
-96,138
440,138
-536,276
-2,751
59,163
6,222
-14,688
-3,735
-14,473
Q4
Ql
Q2
Q3P
-17,775
-27,612
109,493
-137,105
-617
15,898
1,703
-2,783
-940
-3,424
-23,687
-25,962
113,992
-139,954
-836
14,265
-806
-5,883
-846
-3,619
-22,308
-29,309
111,530
-140,839
-145
14,769
-37
-3,242
-978
-3,366
-27,172
-34,384
113,118
-147,502
-226
14,685
47
-2,730
-979
-3,585
-27,986
-36,279
111,912
-148,191
-341
14,448
1,748
-2,970
-976
-3,616
2,307
2,905
-1,609
-305
-737
535
-275
-86
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
-2,158
0
-192
731
-2,697
5,763
0
-177
-367
6,307
3,901
0
2,316
-2,692
4,277
1,952
0
-173
-118
2,243
1,542
0
2,829
-2,685
1,398
-983
0
-140
-228
-615
822
0
-166
313
675
-545
0
-118
-48
-378
17 Change in U.S. private 3
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
-44,280
16,027
-4,433
-28,765
-27,109
-68,643
3,278
1,932
-44,740
-29,113
-53,253
24,948
4,551
-47,961
-34,791
-12,445
6,584
-3,214
-13,787
-2,028
-31,243
-3,481
1,132
-17,405
-11,489
-11,910
28,055
-4,774
-26,889
-8,302
-29,888
5,317
443
-24,098
-11,550
-43,331
7,547
22 Change in foreign official assets in United States (increase, +) ..
23 U.S. Treasury securities
24 Other U.S. government obligations
25 Other U.S. government liabilities
26 Other U.S. liabilities reported by U.S. banks3
27 Other foreign official assets
34,198
29,576
667
2,156
3,385
-1,586
17,564
14,846
1,301
1,542
-1,484
1,359
40,684
18,454
3,949
2,542
16,427
-688
-7,378
-323
912
864
-7,831
-1,000
5,931
-7,379
874
943
11,219
274
10,929
1,039
710
-395
8,171
1,404
17,699
5,668
1,082
3%
9,454
1,099
19,646
18,808
1,545
1,322
-2,213
184
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
70,976
16,370
7,533
-2,534
1,592
48,015
65,875
-11,371
-699
18,826
35,144
23,975
88,895
18,609
741
36,893
30,274
2,378
33,828
23,647
1,553
4,870
2,730
1,028
32,914
-1,171
-2,717
21,232
12,478
3,092
14,789
-18,862
2,057
13,599
9,394
8,601
24,681
-1,381
1,361
-623
15,025
10,299
46,806
23,525
34 Allocation of special drawing rights
35 Discrepancy
36 Due to seasonal adjustment
37 Before seasonal adjustment
0
30,820
0
-15,140
0
-12,218
30,820
-15,140
-12,218
0
2,123
-6,754
8,877
0
15,280
1,222
14,058
0
8,948
5,814
3,134
0
14,133
681
13,452
0
5,495
-7,605
13,100
-2,158
5,763
3,901
-45,290
-5,588
3,995
17,411
1,875
MEMO
Changes in official assets
38 U.S. official reserve assets (increase, - )
39 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)
1,542
-983
822
-544
11,324
17,303
18,324
463
-916
-3,043
32,042
16,022
38,142
-8,242
4,988
1,707
-4,882
5,857
3,051
2,336
1. Seasonal factors are not calculated for lines 12-16, 18-20, 22-34, and 38-40.
2. Data are on an international accounts 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 5.
3. Reporting banks include all types of depository institution as well as some
brokers and dealers.
1,952
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. U.S. Department of Commerce, Bureau of Economic Analysis,
Survey of Current Business.
A54
3.11
International Statistics • April 1994
U.S. FOREIGN TRADE1
Millions of dollars; monthly data seasonally adjusted
1993
Item
1991
1992
1993
June
July
Aug.
Sept.
Oct.
Nov.r
Dec."
37,639
37,109
38,050
38,885
40,092
40,236
42,225
1 Exports of domestic and foreign
merchandise, excluding grant-aid
shipments
2 General imports including merchandise
for immediate consumption
plus entries into bonded
warehouses
488,453
532,665
580,544
49,698
47,534
48,097
49,506
50,990
49,915
49,633
3 Trade balance
-66,723
-84,501
-115,777
-12,058
-10,425
-10,047
-10,621
-10,897
-9,679
-7,408
421,730
448,164
464,767
1. Government and nongovernment shipments of merchandise between foreign
countries and the fifty states, including the District of Columbia, Puerto Rico, the
U.S. Virgin Islands, and U.S. Foreign Trade Zones. Data exclude (1) shipments
among the United States, Puerto Rico, the U.S. Virgin Islands, and other U.S.
affiliated insular areas, (2) shipments to U.S. Armed Forces and diplomatic
missions abroad for their own use, (3) U.S. goods returned to the United States by
its Armed Forces, (4) personal and household effects of travelers, and (5)
in-transit shipments. Data reflect the total arrival of merchandise from foreign
countries that immediately entered consumption channels, warehouses, or U.S.
Foreign Trade Zones (general imports). Import data are Customs value; export
data are F.A.S. value. Since 1990, data for U.S. exports to Canada have been
derived from import data compiled by Canada; similarly, in Canadian statistics,
Canadian exports to the United States are derived from import data compiled by
3.12
the United States. Since Jan. 1, 1987, merchandise trade data have been released
forty-five days after the end of the month; the previous month is revised to reflect
late documents.
Data in this table differ from figures for merchandise trade shown in the U.S.
balance of payments accounts (table 3.10, lines 2 through 4) primarily for reasons
of coverage. For both exports and imports, a large part of the difference is the
treatment of military sales and purchases. The military sales to foreigners
(exports) and purchases from foreigners (imports) that are included in this table as
merchandise trade are shifted, in the balance of payments accounts, from
"merchandise trade" into the broader category "military transactions."
SOURCE. (U.S. Department of Commerce, Bureau of the Census), FT900, U.S.
Merchandise Trade.
U.S. RESERVE ASSETS
Millions of dollars, end of period
1994
1993
July
1 Total
Sept.
Oct.
Nov.
83,316
2 Gold stock, including Exchange
Stabilization Fund1
3 Special drawing rights ,3
4 Reserve position in International
Monetary Fund
5 Foreign currencies
77,719
71,323
74,139
75,231
75,835
74,550
74,042
73,442
11,058
10,989
11,057
11,240
11,056
8,503
11,057
8,905
11,057
9,133
11,057
9,203
11,056
9,038
11,054
9,091
11,053
9,039
9,076
52,193
9,488
45,934
11,759
40,005
12,083
42,094
12,118
12,101
42,923
43,474
11,908
42,548
11,827
42,070
41,532
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, line 3. Gold stock is valued at $42.22 per fine troy ounce.
2. Special drawing rights (SDRs) are valued according to a technique 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, sixteen currencies were used; since January
3.13
Aug.
11,818
1981,fivecurrencies 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 of SDRs by the International Monetary Fund on Jan. 1
of the year indicated, as follows: 1970—$867 million; 1971—$717 million; 1972—
$710 million; 1979—$1,139 million; 1980—$1,152 million; 1981—$1,093 million;
plus net transactions in SDRs.
4. Valued at current market exchange rates.
FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS1
Millions of dollars, end of period
1993
Asset
1990
1991
July
1 Deposits
Held in custody
2 U.S. Treasury securities
3 Earmarked gold
Aug.
Sept.
Oct.
Nov.
Dec.r
Jan."
369
968
205
284
357
501
390
596
386
257
278,499
13,387
281,107
13,303
314,481
13,686
343,378
12,756
356,671
12,686
358,860
12,562
358,975
12,464
373,864
12,381
379,394
12,327
388,065
12,302
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 at face value in dollars or foreign currencies.
1994
1992
3. Held in foreign and international accounts and valued at $42.22 per fine troy
ounce; not included in the gold stock of the United States.
Summary
3.14
FOREIGN BRANCHES OF U.S. BANKS
Statistics
A55
B a l a n c e S h e e t Data 1
Millions of dollars, end of period
1993
Account
1990
1991
1992
June
July
Sept.
Aug.
Oct.
Nov.
Dec.
All foreign countries
ASSETS
556,925
548,999
542,761
562,021R
550,936*
560,051*
555,646*
562,192
561,963*
554,853
? 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
188,496
148,837
13,296
26,363
312,449
135,003
72,602
17,555
87,289
55,980
176,487
137,695
12,884
25,908
303,934
111,729
81,970
18,652
91,583
68,578
166,799
132,276
9,703
24,820
318,284
123,469
82,190
20,756
91,869
57,678
176,026
141,025
9,498
25,503
316,681
111,851
85,977
18,183
100,670r
69,314
163,793
127,474
8,993
27,326
317,198
105,299
88,653
17,687
105,559
69,945*
166,817
130,865
9,457
26,495
326,098
108,216
90,013
18,364
109,505
67,136*
168,086*
136,938*
6,862
24,286
318,895*
108,805*
84,942*
17,797
107,351*
68,665*
164,023
127,347
7,739
28,937
327,336
107,155
92,262
17,881
110,038
70,833
164,889*
127,021*
7,647
30,221
324,274*
104,639*
89,750*
19,855
110,030*
72,800*
169,815
136,703
6,577
26,535
313,359
99,495
86,350
19,233
108,281
71,679
12 Total payable in U.S. dollars
379,479
364,078
365,941
355,357R
341,060
338,953*
348,210*
342,145
339,177*
345,573
180,174
142,962
12,513
24,699
174,451
95,298
36,440
12,298
30,415
24,854
169,848
133,662
12,025
24,161
167,010
78,114
41,635
13,685
33,576
27,220
162,126
129,330
9,266
23,530
183,641
83,231
47,250
14,313
38,847
20,174
169,503
137,712
8,638
23,153
168,886
73,071
43,679
12,049
40,087 r
16,968
155,387
124,072
8,270
23,045
167,295
70,400
44,267
11,951
40,677
18,378
157,538
127,028
8,475
22,035
164,379
68,623
42,383
11,999
41,374
17,036*
160,820*
133,223*
6,322
21,275
168,744*
70,699*
43,925*
11,580
42,540
18,646*
154,083
124,064
7,046
22,973
166,803
67,602
44,722
11,512
42,967
21,259
153,892
123,370
6,977
23,545
163,631*
65,432
43,549*
12,504
42,146*
21,654*
160,251
133,014
5,999
21,238
164,366
65,969
44,406
11,935
42,056
20,956
1 Total payable in any currency
13
14
15
16
17
18
19
70
?1
22
Claims on United States
Parent bank
Other banks in United States
Nonbanks
Claims on foreigners
Other branches of parent bank
Banks
Public borrowers
Nonbank foreigners
Other assets
United Kingdom
23 Total payable in any currency
74
75
76
77
78
79
30
31
3?
33
Claims on United States
Parent bank
Other banks in United States
Nonbanks
Claims on foreigners
Other branches of parent bank
Banks
Public borrowers
Nonbank foreigners
Other assets
34 Total payable in U.S. dollars
35 Claims on United States
36 Parent bank
Other banks in United States
37
38 Nonbanks
39 Claims on foreigners
40 Other branches of parent bank
41 Banks
Public borrowers
4?
43
Nonbank foreigners
44 Other assets
184,818
175,599
165,850
172,439*
166,431*
172,072*
172,368*
173,948
175,316
178,073
45,560
42,413
792
2,355
115,536
46,367
31,604
3,860
33,705
23,722
35,257
31,931
1,267
2,059
109,692
35,735
36,394
3,306
34,257
30,650
36,403
33,460
1,298
1,645
111,623
46,165
33,399
3,329
28,730
17,824
37,038
33,059
1,006
2,973
109,528
40,130
36,848
2,342
30,208
25,873*
34,032
29,184
808
4,040
107,799
37,164
38,543
2,341
29,751
24,600*
35,491
30,612
877
4,002
114,150
39,778
40,332
2,606
31,434
22,431*
34,053
30,776
631
2,646
115,203
40,613
40,277
2,171
32,142
23,112*
32,641
26,562
1,010
5,069
118,207
40,545
44,704
2,147
30,811
23,100
35,377
27,944
804
6,629
112,705
36,971
42,454
2,984
30,296
27,234
41,200
36,620
933
3,647
110,126
32,598
42,239
2,900
32,389
26,747
116,762
105,974
109,493
100,418*
96,200
93,735*
97,832*
94,820
94,227
99,479
41,259
39,609
334
1,316
63,701
37,142
13,135
3,143
10,281
11,802
32,418
30,370
822
1,226
58,791
28,667
15,219
2,853
12,052
14,765
34,508
32,186
1,022
1,300
66,335
34,124
17,089
2,349
12,773
8,650
34,110
31,265
533
2,312
60,479
30,287
16,658
1,804
11,730
5,829*
30,573
27,580
300
2,693
58,944
27,814
17,590
1,744
11,796
6,683
31,753
28,938
308
2,507
56,603
27,713
15,466
1,832
11,592
5,379*
31,160
29,130
328
1,702
59,725
28,306
17,967
1,614
11,838
6,947*
27,731
24,756
430
2,545
59,396
27,478
18,910
1,613
11,395
7,693
30,092
26,046
365
3,681
55,167
24,779
17,103
2,446
10,839
8,968
36,143
34,628
479
1,036
53,466
20,965
18,135
2,319
12,047
9,870
146,834
144,327
148,814
98,100
72,185
5,710
20,205
40,028
8,024
16,228
5,767
10,009
8,706
96,389
70,682
5,993
19,714
40,257
8,713
15,999
5,735
9,810
7,681
96,023
71,606
4,957
19,460
46,286
15,692
15,718
5,539
9,337
6,931
Bahamas and Cayman Islands
45 Total payable in any currency
162,316
168,512
147,422
148,982
140,580
140,172
46 Claims on United States
47 Parent bank
48 Other banks in United States
49
50 Claims on foreigners
51 Other branches of parent bank
5? Banks
53 Public borrowers
54 Nonbank foreigners
55 Other assets
112,989
77,873
11,869
23,247
41,356
13,416
16,310
5,807
5,823
7,971
115,430
81,706
10,907
22,817
45,229
11,098
20,174
7,161
6,796
7,853
96,280
66,608
7,828
21,844
44,509
7,293
21,212
7,786
8,218
6,633
102,109
74,023
7,651
20,435
40,437
7,009
18,117
6,334
8,977
6,436
93,736
66,363
7,477
19,896
39,609
6,772
17,688
6,185
8,964
7,235
93,661
67,055
7,360
19,246
39,588
7,226
16,863
6,102
9,397
6,923
56 Total payable in U.S. dollars
158,390
163,957
143,900
136,025
142,861
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.
This table has been discontinued with the December 1993 data because these
data are no longer collected.
135,698
147,385
98,873
74,040
5,489
19,344
41,814
8,958
17,090
5,955
9,811
6,698
142,831
142,273
140,010
144,707
A56
3.14
International Statistics • April 1994
FOREIGN BRANCHES OF U.S. B A N K S
Balance Sheet Data1—Continued
1993
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
All foreign countries
LIABILITIES
57
Total payable in any currency
556,925
548,999
542,761
562,021r
550,936r
560,051r
555,646r
562,192
561,963r
554,853
58
59
60
61
62
Negotiable certificates of deposit (CDs) ..
To United States
Parent bank
Other banks in United States
Nonbanks
18,060
189,412
138,748
7,463
43,201
16,284
198,307
136,431
13,260
48,616
10,032
189,445
134,340
12,182
42,923
14,154
186,374
129,486
13,514
43,374
14,568
174,089
120,953
10,440
42,696
14,604
172,074
118,724
9,561
43,789
12,666
180,247R
l l ^
11,662
46,764
12,166
173,532
114,945
10,699
47,888
173,488R
114,807R
11,568
47,113
12,930
180,246
116,741
14,592
48,913
63
64
65
66
67
68
To foreigners
Other branches of parent bank
Banks
Official institutions
Nonbank foreigners
Other liabilities
311,668
139,113
58,986
14,791
98,778
37,785
288,254
112,033
63,097
15,596
97,528
46,154
309,917
125,189
62,268
19,731
102,729
33,367
319,105
115,743
67,258
22,466
113,638
42,388 R
319,673
108,954
71,509
23,147
116,063
42,606 R
333,165
113,582
73,682
23,049
122,852
40,208 R
322,305 R
11 L,759R
68,117 R
22,698
119,731R
40,428 R
335,078
109,288
78,882
24,712
122,1%
41,416
332,331 R
107,7% R
75,164 R
26,020
123,351
44,205 R
321,981
103,047
73,439
26,508
118,987
39,6%
69
Total payable in U.S. dollars
383,522
370,710
368,869
356,464r
341,778r
338,776r
346,776r
340,549
339,440r
345,779
70
/I
72
73
Negotiable CDs
To United States
Parent bank
Other banks in United States
74 Nonbanks
14,094
175,654
130,510
6,052
39,092
11,909
185,472
129,669
11,707
44,096
6,238
178,675
127,949
11,512
39,214
8,138
172,708
121,922
12,862
37,924
7,958
160,499
113,313
9,789
37,397
7,370
157,841
110,881
8,842
38,118
6,131
167,272R
114,NC
11,092
42,010
5,886
160,049
107,631
9,927
42,491
5,712 R
160, A W
107,878 R
10,923
41,698
6,732
166,493
109,063
13,838
43,592
To foreigners
Other branches of parent bank
77 Banks
78 Official institutions
79 Nonbank foreigners
80 Other liabilities
179,002
98,128
20,251
7,921
158,993
76,601
24,156
172,284
83,714
26,159
166,193
75,798
23,440
10,304
47,932
14,336
165,121
72,504
24,522
12,430
49,981
11,672
163,673
72,924
23,631
163,770R
72,395 R
23,804 R
162,435
68,934
24,252
159,341
66,909
24,034
163,602
68,815
25,764
10,720
56,85lrr
9,603
11,416
57,833
12,179
11,210
57,188r
13,888
13,868
55,155
8,952
75
76
52,702
14,772
12,951
54,004r
9,425
12,868
54,250r
9,648
121,821r
12,031
56,064 r
8,444
United Kingdom
184,818
175,599
165,850
172,439r
166,431r
172,072r
172,368r
173,948
175,316
178,073
82 Negotiable CDs
83 To United States
84 Parent bank
85 Other banks in United States
86 Nonbanks
14,256
39,928
31,806
1,505
6,617
11,333
37,720
29,834
1,438
6,448
4,517
39,174
31,100
1,065
7,009
6,566
39,514
30,410
1,097
8,007
6,364
35,521
27,183
850
7,488
6,674
36,600
28,076
741
7,783
5,318
37,180
29,217
682
7,281
4,489
33,498
25,147
782
7,569
4,188
31,953
24,755
556
6,642
21,466
87 To foreigners
88 Other branches of parent bank
89 Banks
90 Official institutions
91
Nonbank foreigners
92 Other liabilities
108,531
36,709
25,126
8,361
38,335
22,103
98,167
30,054
25,541
9,670
32,902
28,379
107,176
35,983
25,231
12,090
33,872
14,983
106,725
32,275
25,848
12,139
36,463r
19,634
105,949
28,408
28,504
11,885
37,152r
18,597
112,121
30,534
29,039
11,575
40,973r
16,677
112,534
31,578
28,064
12,425
40,467r
17,336
118,837
31,921
32,055
13,269
41,592
17,124
117,926
34,236
30,120
13,104
40,466
21,249
125,231
39,114
30,583
15,892
r
r
r
r
81 Total payable in any currency
93 Total payable in U.S. dollars
5,429
29,716
887
7,363
39,642
17,697
116,094
108,755
108,214
97,750
92,745
91,432
94,017
91,614
91,266
97,956
94 Negotiable CDs
95 To United States
% Parent bank
97 Other banks in United States
98 Nonbanks
12,710
34,697
29,955
1,156
3,586
10,076
33,003
28,260
1,177
3,566
3,894
35,417
29,957
709
4,751
5,462
34,523
28,747
847
4,929
5,197
30,669
25,753
637
4,279
4,890
31,579
26,600
476
4,503
3,728
32,838
28,039
397
4,402
3,388
28,725
24,093
350
4,282
3,234
27,055
23,524
25,142
20,454
337
506
3,194
4,182
99 To foreigners
100 Other branches of parent bank
101 Banks
102 Official institutions
103 Nonbank foreigners
104 Other liabilities
60,014
25,957
9,488
4,692
19,877
8,673
56,626
20,800
11,069
7,156
17,601
9,050
62,048
22,026
12,540
8,847
18,635
6,855
53,282
17,691
8,305
8,812
18,474r
4,483
52,336
16,198
8,347
8,720
19,071r
4,543
51,256
16,063
7,666
8,042
19,485r
3,707
52,608
16,859
8,877
7,195
19,677r
4,843
54,211
16,108
9,%7
7,399
20,737
5,290
53,230
18,487
7,831
7,238
19,674
7,747
63,782
25,262
9,702
148,814
4,642
10,090
18,728
4,390
Bahamas and Cayman Islands
105 Total payable in any currency
162,316
168,512
147,422
148,982
140,580
140,172
147,385
146,834
144,327
106 Negotiable CDs
107 To United States
108 Parent bank
109 Other banks in United States
110 Nonbanks
646
114,738
74,941
4,526
35,271
1,173
130,058
79,394
10,231
40,433
1,350
67,347
10,445
34,069
1,535
109,238
64,608
11,567
33,063
1,562
101,036
59,352
8,603
33,081
1,307
99,418
58,031
7,791
33,5%
1,315
108,107
60,407
10,146
37,554
1,260
106,453
59,323
9,117
38,013
1,370
107,554
111 To foreigners
112 Other branches of parent bank
113 Banks
114 Official institutions
115 Nonbank foreigners
116 Other liabilities
44,444
24,715
5,588
622
13,519
2,488
35,200
17,388
5,662
572
11,578
2,081
32,556
15,169
6,422
805
10,160
1,655
36,621
18,944
6,417
1,031
10,229
1,588
35,973
18,164
6,996
902
9,911
2,009
37,808
19,103
7,766
836
10,103
1,639
36,449
18,609
6,347
881
10,612
1,514
35,291
17,451
6,272
770
10,798
3,830
32,347
14,131
6,356
953
10,907
3,056
29,909
Total payable in U.S. dollars
157,132
163,789
143,150
144,014
135,893
135,483
142,449
142,246
140,068
144,367
117
111,861
59,368
10,056
38,130
1,099
116,507
64,818
12,812
38,877
11,665
7,257
822
10,165
1,299
Summary
3.15
Statistics
A57
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1993
Item
1992
1991
June
1
4
5
6
7
8
9
10
11
12
Aug.
Sept.
Nov.
Oct.
r
Dec."
r
360,530
1 Total
2
3
July
398,816
427,561
427,039
436,972
445,692
444,107
456,734
468,268
38,396
92,692
54,967
104,596
72,714
119,860
67,464
128,837
68,827
136,488
70,219
139,638
65,668
140,525
67,544
144,865
69,048
150,900
By type
Liabilities reported by banks in the United States^
U.S. Treasury bills and certificates
U.S. Treasury bonds and notes
Marketable
Nonmarketable4
U.S. securities other than U.S. Treasury securities
203,677
4,858
20,907
210,553
4,532
24,168
201,118
5,451
28,418
196,441
5,488
28,809
197,165
5,508
28,984
By area1
Europe
Canada
Latin America and Caribbean
Asia
Africa
Other countries6
171,317
7,460
33,554
139,465
2,092
6,640
191,708
7,920
40,025
152,276
3,565
3,320
193,401
8,297
48,548
169,504
3,621
4,188
188,981
8,808
53,805
169,080
2,844
3,519
191,890
8,075
55,343
174,901
3,109
3,652
200,346
5,542
29,947
r
201,965
5,579
30,370
r
208,213
5,615
30,497
211,869
5,652
30,799
198,254
8,260
54,703
177,164
3,888
3,421
193,676
9,441
54,275
178,889r
3,665
4.1597
208,370
8,657
50,41^
182,462r
3,650
3,183r
208,643
9,505
57,960
185,304
3,893
2,961
1. Includes the Bank for International Settlements.
2. Principally demand deposits, time deposits, bankers acceptances, commercial paper, negotiable time certificates of deposit, and borrowings under repurchase agreements.
3. Includes nonmarketable certificates of indebtedness (including those payable
in foreign currencies through 1974) and Treasury bills issued to official institutions
of foreign countries.
4. Excludes notes issued to foreign official nonreserve agencies. Includes
bonds and notes payable in foreign currencies; 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.
3.16
Reported by Banks in the United States 1
LIABILITIES TO, A N D CLAIMS ON, FOREIGNERS
Payable in Foreign Currencies
Millions of dollars, end of period
1992
Item
1989
1990
1993
1991
Dec.
1 Banks' liabilities
2 Banks' claims
3 Deposits
4 Other claims
5 Claims of banks' domestic customers
67,835
65,127
20,491
44,636
3,507
1. Data on claims exclude foreign currencies held by U.S. monetary
authorities.
70,477
66,796
29,672
37,124
6,309
75,129
73,195
26,192
47,003
3,398
Mar.
June
Sept.r
72,796
62,799r
24,240r
38,559
4,432
80,999
64,057
24,928
39,129
2,625
74,697
55,161
23,449
31,712
3,234
81,045
59,116
22,724
36,392
2,640
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 1994
LIABILITIES TO FOREIGNERS
Payable in U . S . dollars
R e p o r t e d b y B a n k s in the U n i t e d States 1
Millions of dollars, end of period
1993
Item
1992
1991
1993
June
July
Aug.
Sept.
Oct.
Nov.*
Dec."
HOLDER AND TYPE OF LIABILITY
1
Total, ail foreigners
756,066
810,259
892,925
824,957
821,788
846,626
862,147
867,083*
884,471
892,925
2
3
4
5
6
Banks' own liabilities
Demand deposits
Time deposits
Other.
Own foreign offices4
575,374
20,321
159,649
66,305
329,099
606,444
21,828
160,385
93,237
330,994
619,159
21,569
174,816
109,608
313,166
597,695
21,466
152,072
107,462
316,695
589,281
21,818
151,293
106,962
309,208
606,529
21,503
152,967
116,406
315,653
614,608
25,445
153,607
113,063
322,493
608,979*
22,035
158,845*
129,438*
298,661*
615,361
25,462
155,928
128,563
305,408
619,159
21,569
174,816
109,608
313,166
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other
180,692
110,734
203,815
127,644
273,766
176,430
227,262
144,059
232,507
153,359
240,097
161,827
247,539
165,151
258,104*
164,365
269,110
169,729
273,766
176,430
18,664
51,294
21,974
54,197
36,078
61,258
30,056
53,147
26,477
52,671
27,643
50,627
30,879
51,509
37,562*
56,177*
38,555
60,826
36,078
61,258
8,981
6,827
43
2,714
4,070
9,350
6,951
46
3,214
3,691
10,836
5,540
15
2,770
2,755
9,330
6,270
19
3,607
2,644
9,587
6,397
29
2,920
3,448
12,365
8,671
37
2,882
5,752
11,409
7,995
72
4,062
3,861
10,984
6,780
71
2,968
3,741
12,955
9,081
34
2,853
6,194
10,836
5,540
15
2,770
2,755
2,154
1,730
2,399
1,908
5,296
4,275
3,060
2,320
3,190
2,635
3,694
3,418
3,414
3,199
4,204
3,566
3,874
3,201
5,296
4,275
424
486
5
1,021
0
740
0
549
6
276
0
215
0
638
0
672
0
1
1,021
0
131,088
34,411
2,626
16,504
15,281
159,563
51,202
1,302
17,939
31,961
219,948
63,471
1,599
21,494
40,378
192,574
62,972
2,231
19,603
41,138
196,301
62,062
1,583
18,935
41,544
205,315
62,255
1,321
18,110
42,824
209,857
63,618
1,951
20,552
41,115
206,193
60,995
2,121
14,885
43,989
212,409
61,748
2,089
16,938
42,721
219,948
63,471
1,599
21,494
40,378
96,677
92,692
108,361
104,596
156,477
150,900
129,602
119,860
134,239
128,837
143,060
136,488
146,239
139,638
145,198
140,525
150,661
144,865
156,477
150,900
3,879
106
3,726
39
5,482
95
9,602
140
5,297
105
6,514
58
6,149
452
4,491
182
5,614
182
5,482
95
522,265
459,335
130,236
8,648
82,857
38,731
329,099
547,320
476,117
145,123
10,170
90,296
44,657
330,994
561,485
473,751
160,585
9,713
105,203
45,669
313,166
529,179
459,341
142,646
9,919
83,064
49,663
316,695
521,266
450,361
141,153
10,677
84,567
45,909
309,208
531,961
462,736
147,083
10,478
85,965
50,640
315,653
544,176
470,133
147,640
12,808
83,070
51,762
322,493
543,385*
460,075*
161,414*
9,948
95,208*
56,258
298,661*
553,327
467,446
162,038
13,369
91,462
57,207
305,408
561,485
473,751
160,585
9,713
105,203
45,669
313,166
62,930
7,471
71,203
11,087
87,734
10,707
69,838
10,546
70,905
10,627
69,225
11,327
74,043
11,794
83,310*
10,046
85,881
10,539
87,734
10,707
5,694
49,765
7,555
52,561
16,810
60,217
7,741
51,551
9,049
51,229
8,760
49,138
12,688
49,561
19,106*
54,158*
17,124
58,218
16,810
60,217
93,732
74,801
9,004
57,574
8,223
94,026
72,174
10,310
48,936
12,928
100,656
76,397
10,242
45,349
20,806
93,874
69,112
9,297
45,798
14,017
94,634
70,461
9,529
44,871
16,061
96,985
72,867
9,667
46,010
17,190
96,705
72,862
10,614
45,923
16,325
106,521*
81,129*
9,895
45,784
25,450*
105,780
77,086
9,970
44,675
22,441
100,656
76,397
10,242
45,349
20,806
18,931
8,841
21,852
10,053
24,259
10,548
24,762
11,333
24,173
11,260
24,118
10,594
23,843
10,520
25,392
10,228
28,694
11,124
24,259
10,548
8,667
1,423
10,207
1,592
12,765
946
11,973
1,456
11,582
1,331
12,093
1,431
11,827
1,496
13,327
1,837
15,145
2,425
12,765
946
7,456
9,111
17,567
10,388
9,389
9,481
11,264
17,533
17,089
17,567
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
Nonmonetary international and regional
organizations8
Banks' own liabilities
Demand deposits
Time deposits2
Other
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable7 and readily transferable
instruments
Other
Official institutions9
Banks' own liabilities
Demand deposits
Time deposits
Other3
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments
Other
Banks10
Banks' own liabilities
Unaffiliated foreign banks
Demand deposits
Time 3
deposits
Other
Own foreign offices4
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable7 and readily transferable
instruments
Other
Other foreigners
Banks' own liabilities
Demand deposits
Time deposits
Other
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable7 and readily transferable
instruments
Other
MEMO
49
Negotiable time certificates of deposit in custody for
foreigners
1. Reporting banks include all types of depository institution, 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 owed 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 owed 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, the
Inter-American Development Bank, and the Asian Development Bank. Excludes
"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
3.17
Data
LIABILITIES TO FOREIGNERS Reported by Banks in the United States 1 —Continued
1993
1991r
1992r
1993
Juner
Julyr
Aug/
Sept/
Oct/
Nov/
Dec."
824,957
821,788
846,626
862,147
867,083
884,471
892,925
850,738
856,099
871,516
882,089
340,374
1,672
23,635
3,135
2,347
40,622
22,530
1,378
11,285
11,429
2,901
3,180
2,229
20,495
3,474
41,909
2,553
116,205
524
28,871
357,847
1,808
24,641
5,084
2,712
43,034
22,820
1,366
10,466
13,368
2,7%
3,215
2,623
20,181
2,355
43,195
2,897
130,941
541
23,804
369,518
1,797
27,541
4,151
2,250
36,623
27,025
1,704
10,734
14,737
3,199
3,229
2,530
19,704
2,672
42,886
2,947
135,697
546
29,546
376,205
1,857
28,650
4,517
1,872
39,704
26,617
1,530
11,561
15,999
2,975
3,366
2,511
20,483
2,573
41,865
3,228
133,698
569
32,630
AREA
t Total, all foreigners
2 Foreign countries ..
3 Europe
4 Austria
5 Belgium and Luxembourg
6 Denmark
7 Finland
8 France
9 Germany
10 Greece
11 Italy
12 Netherlands
13 Norway
14 Portugal
15 Russia
16 Spain
17 Sweden
18 Switzerland
19 Turkey
20 United Kingdom
21 Yugoslavia"
.
22 Other Europe and former U.S.S.R.
756,066
747,085
249,097
1,193
13,337
937
1,341
31,808
8,619
765
13,541
7,161
1,866
2,184
241
11,391
2,222
37,238
1,598
100,292
622
12,741
810,259
800,909
307,670
1,611
20,567
3,060
1,299
41,411
18,630
913
10,041
7,365
3,314
2,465
577
9,793
2,953
39,440
2,666
111,805
504
29,256
892,925
882,089
376,205
1,857
28,650
4,517
1,872
39,704
26,617
1,530
11,561
15,999
2,975
3,366
2,511
20,483
2,573
41,865
3,228
133,698
569
32,630
815,627
812,201
324,252
1,4%
21,817
3,088
2,580
33,744
22,752
819
10,402
11,271
2,840
2,764
1,129
15,507
2,336
41,270
2,497
115,251
512
32,177
321,005
1,415
20,805
3,983
2,873
33,%3
24,498
1,078
10,721
10,465
2,757
2,894
1,406
16,644
2,210
40,494
2,882
113,171
501
28,245
834,261
335,460
1,614
23,345
3,023
2,667
36,517
22,199
1,122
11,426
10,854
2,833
3,015
2,254
17,207
1,460
40,987
2,618
118,793
511
33,015
21,605
22,420
20,227
20,051
22,264
23,917
25,147
27,452
24,152
20,227
24 Latin America and Caribbean.
25 Argentina
26 Bahamas
27 Bermuda
28 Brazil
29 British West Indies
30 Chile
31 Colombia
32 Cuba
33 Ecuador
34 Guatemala
35 Jamaica
36 Mexico
37 Netherlands Antilles
38 Panama
39 Peru
40 Uruguay
41 Venezuela
42 Other
345,529
7,753
100,622
3,178
5,704
163,620
3,283
4,661
2
1,232
1,594
231
19,957
5,592
4,695
1,249
2,096
13,181
6,879
317,228
9,477
82,284
7,079
5,584
153,033
3,035
4,580
3
993
1,377
371
19,454
5,205
4,177
1,080
1,955
11,387
6,154
330,166
14,492
73,067
7,873
5,309
163,078
3,203
3,173
33
881
1,207
410
28,063
4,188
3,625
931
1,622
12,807
6,204
316,654
11,289
80,713
6,074
4,936
151,695
3,552
4,405
3
924
1,397
341
22,318
4,059
3,749
979
1,775
12,242
6,203
315,885
14,120
73,414
6,%9
5,425
151,519
3,934
4,464
5
889
1,304
341
24,138
4,159
3,747
891
1,775
12,373
6,418
316,747
14,579
73,790
6,931
5,299
149,897
3,5%
4,383
5
860
1,315
364
24,833
5,413
3,657
898
1,822
12,782
6,323
326,346
14,051
77,8%
7,239
5,268
156,953
3,867
3,988
6
819
1,278
375
24,414
4,695
3,743
903
1,734
12,868
6,249
317,698
14,319
76,557
8,021
5,057
149,468
3,952
3,025
7
868
1,275
376
24,248
5,283
3,567
873
1,716
12,903
6,183
322,408
13,694
78,354
7,287
5,069
157,172
3,455
3,101
7
851
1,243
401
21,946
4,726
3,468
889
1,643
13,076
6,026
330,166
14,492
73,067
7,873
5,309
163,078
3,203
3,173
33
881
1,207
410
28,063
4,188
3,625
931
1,622
12,807
6,204
43 Asia
China
44
People's Republic of China
45
Republic of China (Taiwan)
46 Hong Kong
47 India
48 Indonesia
49 Israel
50 Japan
51 Korea (South)
52 Philippines
53 Thailand
54 Middle Eastern oil-exporting countries"
55 Other
120,462
143,540
144,5%
143,166
143,132
147,517
147,648
141,363
144,476
144,5%
2,626
11,491
14,269
2,418
1,463
2,015
47,069
2,587
2,449
2,252
15,752
16,071
3,202
8,408
18,499
1,399
1,480
3,773
58,435
3,337
2,275
5,582
21,437
15,713
4,011
10,634
17,233
1,113
1,986
4,436
61,476
4,866
2,035
6,137
15,825
14,844
2,885
9,548
15,890
1,315
2,132
2,764
62,791
3,842
2,933
5,233
20,327
13,506
2,728
9,999
16,193
1,053
1,688
2,790
62,233
4,298
3,1%
5,830
18,409
14,715
3,292
9,483
15,621
1,211
1,582
2,729
67,999
3,873
2,648
6,058
19,141
13,880
3,261
9,969
16,388
1,288
1,715
3,241
65,626
4,356
2,735
5,846
17,255
15,968
3,280
9,804
16,389
1,251
1,504
5,450
60,171
3,889
2,192
6,446
14,681
16,306
3,187
10,960
18,573
1,525
1,674
4,582
58,866
4,409
1,902
6,231
15,489
17,078
4,011
10,634
17,233
1,113
1,986
4,436
61,476
4,866
2,035
6,137
15,825
14,844
56 Africa
57 Egypt
58 Morocco
59 South Africa
60 Zaire
61 Oil-exporting countries
62 Other
4,825
1,621
79
228
31
1,082
1,784
5,884
2,472
76
190
19
1,346
1,781
6,623
2,209
99
451
12
1,303
2,549
6,475
2,784
119
265
15
1,332
1,960
5,680
1,880
138
172
25
1,417
2,048
5,649
2,018
78
233
20
1,279
2,021
6,127
2,457
86
275
16
1,281
2,012
6,179
2,220
87
367
15
1,271
2,219
5,762
2,089
110
272
10
1,446
1,835
6,623
2,209
99
451
12
1,303
2,549
63 Other
64 Australia
65 Other . . .
5,567
4,464
1,103
4,167
3,043
1,124
4,272
3,308
964
5,029
4,078
951
4,235
3,253
982
4,971
3,890
1,081
5,0%
4,045
1,051
5,560
4,434
1,126
5,200
3,853
1,347
4,272
3,308
964
66 Nonmonetary international and regional
organizations.
International
Latin American regional1
Other regional
8,981
6,485
1,181
1,315
9,350
7,434
1,415
501
10,836
6,751
3,218
867
9,330
5,812
2,318
1,200
9,587
6,028
2,077
1,482
12,365
8,367
2,737
1,261
11,409
7,679
2,448
1,282
10,984
7,340
2,539
1,105
12,955
9,084
3,050
821
10,836
6,751
3,218
867
23 Canada.
11. Since December 1992, has excluded Bosnia, Croatia, and Slovenia.
12. Includes the Bank for International Settlements. Since December 1992,
includes all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia,
and Slovenia.
13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
14. Comprises Algeria, Gabon, Libya, and Nigeria.
15. Principally the International Bank for Reconstruction and Development.
Excludes "holdings of dollars" of the International Monetary Fund.
16. Principally the Inter-American Development Bank.
17. 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 1994
B A N K S ' O W N C L A I M S O N F O R E I G N E R S R e p o r t e d b y B a n k s in the U n i t e d States 1
Payable in U . S . Dollars
Millions of dollars, end of period
1993
Area and country
1991r
1992r
1993
Juner
Julyr
Aug.r
Sept.r
Oct.r
Nov.r
Dec.p
1 Total, all foreigners
514,339
499,437
482,804
482,549
472,877
461,191
477,233
465,986
469,045
482,804
2 Foreign countries
508,056
494,355
480,349
480,469
471,570
459,239
474,854
464,743
466,844
480,349
114,310
327
6,158
686
1,907
15,112
3,371
553
8,242
2,546
669
344
1,970
1,881
2,335
4,540
1,063
60,395
825
1,386
123,377
331
6,404
707
1,418
14,723
4,222
717
9,047
2,468
355
325
3,147
2,755
4,923
4,717
962
63,430
569
2,157
121,456
413
6,421
389
598
12,097
7,683
681
8,945
3,004
422
720
2,294
2,756
4,124
6,567
1,311
60,878
536
1,617
122,297
1,080
5,955
721
1,225
11,833
6,236
564
9,250
2,764
789
670
3,045
3,607
4,062
4,123
1,584
62,565
548
1,676
125,094
1,094
6,127
835
1,007
11,847
7,746
509
8,153
3,260
876
710
2,799
5,117
5,131
5,193
1,492
60,772
547
1,879
116,836
691
6,515
693
705
11,500
6,766
508
8,839
3,081
941
803
2,591
4,184
4,278
5,634
1,549
55,118
547
1,893
124,253
457
6,589
631
594
10,963
7,994
629
8,985
3,383
841
787
2,547
3,652
4,619
5,216
1,418
62,510
542
1,8%
124,616
568
5,500
1,056
730
11,516
7,570
592
8,050
3,163
779
826
2,581
4,747
4,111
4,647
1,638
64,052
535
1,955
120,707
501
5,903
1,261
606
11,622
6,961
684
8,417
3,607
598
787
2,295
4,388
3,531
5,946
1,790
59,445
549
1,816
121,456
413
6,421
389
598
12,097
7,683
681
8,945
3,004
422
720
2,294
2,756
4,124
6,567
1,311
60,878
536
1,617
3 Europe
4 Austria
5 Belgium and Luxembourg
6 Denmark
7 Finland
8 France
9 Germany
10 Greece
11 Italy
12 Netherlands
13 Norway
14 Portugal
15 Russia
16 Spain
17 Sweden
18 Switzerland
19 Turkey
20 United Kingdom
21 Yugoslavia2
22 Other Europe and former U.S.S.R.3
15,113
13,845
18,410
16,246
17,776
17,373
19,009
15,756
15,575
18,410
24 Latin America and Caribbean
25 Argentina
26 Bahamas
27 Bermuda
28 Brazil
29 British West Indies
30 Chile
31 Colombia
32 Cuba
33 Ecuador
34 Guatemala
35 Jamaica
36 Mexico
37 Netherlands Antilles
38 Panama
39 Peru
40 Uruguay
41 Venezuela
42 Other
246,137
5,869
87,138
2,270
11,894
107,846
2,805
2,425
0
1,053
228
158
16,567
1,207
1,560
739
599
2,516
1,263
218,078
4,958
60,835
5,935
10,773
101,507
3,397
2,750
0
884
262
162
14,991
1,379
4,654
730
936
2,525
1,400
223,474
4,425
65,047
8,032
11,831
97,452
3,609
3,199
0
595
286
194
15,834
2,271
2,892
651
951
3,068
3,137
212,672
4,066
59,989
4,319
12,319
96,986
3,675
2,847
1
771
266
184
15,321
3,011
2,549
657
904
2,803
2,004
208,294
4,841
56,843
8,578
10,842
91,246
3,898
2,886
0
732
240
182
15,738
3,172
2,532
651
807
3,001
2,105
207,554
4,740
56,276
7,122
10,927
93,116
3,796
2,916
0
739
256
181
15,652
3,153
2,361
667
816
2,876
1,960
215,634
4,715
60,906
5,550
11,294
97,409
3,832
2,921
0
701
244
183
15,724
3,155
2,370
617
926
2,835
2,252
212,031
4,390
60,350
8,915
11,675
90,041
3,857
2,957
0
707
269
175
16,155
3,339
2,491
636
926
2,815
2,333
216,720
4,518
63,242
7,565
11,677
92,621
3,728
3,040
0
704
286
186
16,073
3,100
2,625
620
918
3,054
2,763
223,474
4,425
65,047
8,032
11,831
97,452
3,609
3,199
0
595
286
194
15,834
2,271
2,892
651
951
3,068
3,137
43 Asia
China
44
People's Republic of China
45
Republic of China (Taiwan)
46 Hong Kong
47 India
48 Indonesia
49 Israel
50 Japan
51 Korea (South)
52 Philippines
53 Thailand
54 Middle Eastern oil-exporting countries4
55 Other
125,262
131,789
110,383
122,134
113,182
111,196
109,095
105,511
107,538
110,383
747
2,087
9,617
441
952
860
84,807
6,048
1,910
1,713
8,284
7,796
906
2,046
9,642
529
1,189
820
79,172
6,179
2,145
1,867
18,540
8,754
2,300
2,622
10,858
590
1,463
826
59,358
7,548
1,408
2,080
14,398
6,932
1,898
1,840
9,804
438
1,503
111
71,327
7,428
1,402
1,865
17,437
6,415
871
1,549
10,654
473
1,282
733
62,726
7,587
1,357
2,006
16,976
6,968
638
1,585
9,390
442
1,289
775
64,890
7,245
1,250
2,018
15,912
5,762
699
1,594
11,153
572
1,330
747
60,263
7,098
1,143
2,143
14,251
8,102
773
1,674
9,640
623
1,268
752
60,308
7,133
1,168
2,146
13,580
6,446
706
2,003
10,449
645
1,474
787
59,953
7,138
1,265
2,110
13,853
7,155
2,300
2,622
10,858
590
1,463
826
59,358
7,548
1,408
2,080
14,398
6,932
56 Africa
57 Egypt
58 Morocco
59 South Africa
60 Zaire
61 Oil-exporting countries5
62 Other
4,928
294
575
1,235
4
1,298
1,522
4,279
186
441
1,041
4
1,002
1,605
3,817
196
444
633
4
1,128
1,412
3,812
177
416
748
3
1,156
1,312
3,856
148
437
742
4
1,232
1,293
3,902
168
443
705
4
1,224
1,358
4,023
176
454
713
3
1,206
1,471
3,919
160
433
663
3
1,187
1,473
3,799
218
437
664
4
1,119
1,357
3,817
1%
444
633
4
1,128
1,412
63 Other
64 Australia
65 Other
2,306
1,665
641
2,987
2,243
744
2,809
2,072
737
3,308
2,574
734
3,368
2,443
925
2,378
1,847
531
2,840
2,414
426
2,910
2,401
509
2,505
1,964
541
2,809
2,072
737
66 Nonmonetary international and regional
organizations6
6,283
5,082
2,455
2,080
1,307
1,952
2,379
1,243
2,201
2,455
23 Canada
1. Reporting banks include all types of depository institutions, as well as some
brokers and dealers.
2. Since December 1992, has excluded Bosnia, Croatia, and Slovenia.
3. Includes the Bank for International Settlements. Since December 1992,
includes all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia,
and Slovenia.
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
BANKS' OWN A N D DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS
United States1
P a y a b l e in U . S . Dollars
Data
R e p o r t e d b y B a n k s in the
Millions of dollars, end of period
1993
Claim
1991
1992r
1993
Juner
Julyr
Aug.r
472,877
32,788
280,100
93,101
44,812
48,289
66,888
461,191
30,310
275,295
94,009
45,473
48,536
61,577
Sept.r
1 Total
579,683r
559,495
2 Banks' claims
3 Foreign public borrowers
4 Own foreign offices
5 Unaffiliated foreign banks
6
Deposits
7
Other
8 All other foreigners
514,339
37,126
318,800
116,602
69,018
47,584
41,811
499,437
31,367
303,991
109,342
61,550
47,792
54,737
65,344
15,280
60,058
15,452
49,893
12,960
37,125
31,474
23,498
13,132
13,435
8,655
8,160
36,163
465,986
31,335
269,956
91,921
43,785
48,136
72,774
469,045
29,776
279,834
92,064
44,007
48,057
67,371
482,804
28,937
286,233
98,377
47,113
51,264
69,257
26,921
21,666
n.a.
8,190
43,024r
Dec.p
13,463
8,974
Nov/
18,475
12,939
Oct/
9 Claims of banks' domestic customers 3 ...
10 Deposits
11 Negotiable and readily transferable
instruments
12 Outstanding collections and other
claims
MEMO
13 Customer liability on acceptances
14 Dollar deposits in banks abroad,
reported by nonbanking business
enterprises in the United States
532,442
482,549
29,431
298,483
94,018
46,262
47,756
60,617
482,804
28,937
286,233
98,377
47,113
51,264
69,257
28,225
n.a.
477,233
31,940
286,604
96,146
44,664
51,482
62,543
41,281
9,343
29,316
28,395
24,516
foreign bank, and foreign branches, agencies, or wholly owned subsidiaries of
head office or parent foreign bank.
3. Assets held by reporting banks in the accounts 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 Federal Reserve
Bulletin, vol. 65 (July 1979), p. 550.
1. For banks' claims, data are monthly ; for claims of banks' domestic customers, data are quarterly.
Reporting banks include all types of depository institution, 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
3.20
518,514
BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS
Payable in U . S . Dollars
Reported b y B a n k s in the U n i t e d S t a t e s 1
Millions of dollars, end of period
1992
Maturity, by borrower and area2
1989
1990
1993
1991
Dec/
8
9
10
11
17,
13
Juner
Sept.
238,123
1
2
3
4
5
6
7
Mar/
By borrower
Maturity of one year or less
Foreign public borrowers
All other foreigners
Maturity of more than one year
Foreign public borrowers
All other foreigners
By area
Maturity of one year or less
Europe
Canada
Latin America and Caribbean
Africa 3
All other
Maturity of more than one year
14 Europe
15 Canada
16 Latin America and Caribbean
17
18 Africa 3
19 All other
206,903
195,302
195,119
182,445
183,312
189,900
178,346
23,916
154,430
59,776
36,014
23,762
165,985
19,305
146,680
40,918
22,269
18,649
162,573
21,050
141,523
32,729
15,859
16,870
163,325
17,813
145,512
31,794
13,266
18,528
152,226
21,239
130,987
30,219
12,214
18,005
154,648
17,962
136,686
28,664
11,255
17,409
162,195
21,226
140,%9
27,705
10,507
17,198
53,913
5,910
53,003
57,755
3,225
4,541
49,184
5,450
49,782
53,258
3,040
5,272
51,835
6,444
43,597
51,059
2,549
7,089
53,300
6,091
50,376
45,709
1,784
6,065
54,871
7,884
45,148
37,871
1,677
4,775
54,405
7,979
48,619
38,803
1,712
3,130
57,252
9,835
51,683
37,725
1,916
3,784
4,121
2,353
45,816
4,172
2,630
684
3,859
3,290
25,774
5,165
2,374
456
3,878
3,595
18,277
4,459
2,335
185
5,367
3,287
15,312
5,038
2,380
410
4,8%
3,120
14,574
5,063
2,130
436
4,579
2,909
13,828
4,809
2,050
489
4,423
2,549
13,519
4,736
2,049
429
1. Reporting banks include all kinds of depository institutions besides commercial banks, as well as some brokers and dealers.
2. Maturity is time remaining to maturity,
3. Includes nonmonetary international and regional organizations.
A61
A62
3.21
International Statistics • April 1994
CLAIMS ON FOREIGN COUNTRIES
H e l d by U . S . Offices and Foreign B r a n c h e s o f U . S . - C h a r t e r e d B a n k s 1
Billions of dollars, end of period
1991
Area or country
1989
1992
1993
1990
Sept.
Dec.
Mar.
June
Sept.
Dec.
Mar.
June
Sept.
340.9
320.1
338.4
343.6
351.7
358.7
344.5
346.5
361.0*
377.1*
388.1'
152.9
6.3
11.7
10.5
7.4
3.1
2.0
7.1
67.2
5.4
32.3
132.2
5.9
10.4
10.6
5.0
3.0
2.2
4.4
60.9
5.9
24.0
135.0
5.8
11.1
9.7
4.5
3.0
2.1
3.9
65.6
5.8
23.5
137.6
6.0
11.0
8.3
5.6
4.7
1.9
3.4
68.5
5.8
22.6
130.9
5.3
10.0
8.4
5.4
4.3
2.0
3.2
64.7
6.5
21.1
135.6
6.2
11.9
8.8
8.0
3.3
1.9
4.6
65.6
6.5
18.7
136.0
6.2
15.3
10.9
6.4
3.7
2.2
5.2
61.0
6.3
18.9
132.9
5.6
15.3
9.3
6.5
2.8
2.3
4.8
60.8
6.3
19.3
142.4
6.1
13.5
9.9
6.7
3.6
3.0
5.3
65.7
8.2
20.4
150. l r
7.0
14.0
10.8
7.9*
3.7
2.5
4.7
73.5
8.1
17.9
153.4*
7.1
12.3*
12.4
8.7*
3.7
2.5
5.6
74.7*
9.7
16.9
13 Other industrialized countries
14 Austria
15 Denmark
16 Finland
17 Greece
18 Norway
19 Portugal
20 Spain
21 Turkey
22 Other Western Europe
23 South Africa
24 Australia
21.0
1.5
1.1
1.0
2.5
1.4
.4
7.1
1.2
1.0
2.0
1.6
22.9
1.4
1.1
.7
2.7
1.6
.6
8.3
1.7
1.2
1.8
1.8
22.1
1.0
.9
.6
2.3
1.4
.5
8.3
1.6
1.3
1.6
2.4
22.8
.6
.9
.7
2.6
1.4
.6
8.3
1.4
1.8
1.9
2.7
21.4
.8
.8
.8
2.3
1.5
.5
7.7
1.2
1.5
1.8
2.3
25.5
.8
1.3
.8
2.8
1.7
.5
10.1
1.5
2.0
1.7
2.2
25.0
.7
1.5
1.0
3.0
1.6
.5
9.7
1.5
1.5
1.7
2.3
24.0
1.2
.9
.7
3.0
1.2
.4
8.9
1.3
1.7
1.7
2.9
25.4
1.2
.8
.7
2.7
1.8
.7
9.5
1.4
2.0
1.6
2.9
27.2
1.3
1.0
.9
3.1
1.8
.9
10.5
2.1
1.7
1.3
2.5
26.0
.6
1.1
.6
3.2
2.1
1.0
9.3
2.1
2.2
1.2
2.8
25 OPEC2
26 Ecuador
27 Venezuela
28 Indonesia
29 Middle East countries
30 African countries
17.1
1.3
7.0
2.0
5.0
1.7
12.8
1.0
5.0
2.7
2.5
1.7
15.6
.8
5.6
2.8
5.0
1.5
14.5
.7
5.4
2.7
4.2
1.5
15.8
.7
5.4
3.0
5.3
1.4
16.2
.7
5.3
3.0
5.9
1.4
15.9
.7
5.4
3.0
5.4
1.4
16.1
.6
5.2
3.0
6.2
1.1
16.8
.6
5.3
3.1
6.6
1.1
15.9
.6
5.6
3.1
5.4
1.1
14.9
.5
5.6
2.8
4.9
1.1
31 Non-OPEC developing countries
77.5
65.4
64.7
63.9
69.7
68.1
72.8
72.1
74.4
76.6
76.9
6.3
19.0
4.6
1.8
17.7
.6
2.8
5.0
14.4
3.5
1.8
13.0
.5
2.3
4.5
10.5
3.7
1.6
16.2
.4
1.9
4.8
9.6
3.6
1.7
15.5
.4
2.1
5.0
10.8
3.9
1.6
17.7
.4
2.2
5.1
10.6
4.0
1.6
16.3
.4
2.2
6.2
10.8
4.2
1.7
17.1
.5
2.5
6.6
10.8
4.4
1.8
16.0
.5
2.6
7.0
11.6
4.6
1.9
16.8
.4
2.6
6.6
12.3
4.6
1.9
16.8
.4
2.7
7.2
11.6
4.7
2.0
17.5
.3
2.6
.3
.2
3.5
3.3
.5
6.2
1.9
3.8
1.5
1.7
.4
4.1
2.8
.5
6.5
2.3
3.6
1.9
2.0
.3
4.1
3.0
.5
6.8
2.3
3.7
1.7
2.0
.3
4.8
3.6
.4
6.9
2.5
3.6
1.7
2.3
.3
4.6
3.8
.4
6.9
2.7
3.1
1.9
2.5
.3
5.0
3.6
.4
7.4
3.0
3.6
2.2
2.7
.7
5.2
3.2
.4
6.6
3.1
3.6
2.2
2.7
.6
5.3
3.1
.5
6.5r
3.4
3.4
2.2
2.7
1.6
5.9
3.1
.4
6.9
3.7
2.9
2.4
2.6
.5
6.4
2.9
.4
6.5
4.1
2.6
2.8
3.0
1 Total
2 G-10 countries and Switzerland
3 Belgium and Luxembourg
4 France
5 Germany
6 Italy
7 Netherlands
8 Sweden
9 Switzerland
10 United Kingdom
11 Canada
12 Japan
32
33
34
35
36
37
38
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other
39
40
41
42
43
44
45
46
47
Asia
China
Peoples Republic of China
Republic of China (Taiwan)
India
Israel
Korea (South)
Malaysia
Philippines
Thailand 3
Other Asia
48
49
50
51
Africa
Egypt
Morocco
Zaire
,
Other Africa3
.4
.9
.0
1.0
.4
.8
.0
1.0
.4
.7
.0
.8
.4
.7
.0
.7
.3
.7
.0
.7
.5
.7
.0
.6
.3
.6
.0
.9
.2
.6
.0
1.0
.2
.5
.0
.8
.2
.6
.0
.9
.2
.6
.0
.8
52 Eastern Europe
53 Russia
54 Yugoslavia
55 Other
3.5
.7
1.6
1.3
2.3
.2
1.2
.9
1.8
.4
.8
.7
2.4
.9
.9
.7
2.9
1.4
.8
.6
3.0
1.7
.7
.6
3.1
1.8
.7
.7
3.1
1.9
.6
.6
2.9
1.7
.6
.7
3.2
1.9
.6
.7
3.0
1.7
.6
.7
56 Offshore banking centers
57 Bahamas
58 Bermuda
59 Cayman Islands and other British West Indies
60 Netherlands Antilles
61 Panama
62 Lebanon
63 Hong Kong
64 Singapore
65 Other
38.4
5.5
1.7
9.0
2.3
1.4
.1
11.3
7.0
.0
44.7
2.9
4.4
11.7
7.9
1.4
.1
9.7
6.6
.0
54.6
6.7
7.1
13.8
3.9
1.3
.1
14.0
7.7
.0
54.2
11.9
2.3
15.8
1.2
1.4
.1
14.4
7.1
.0
63.0
15.3
3.9
18.6
1.0
1.6
.1
14.0
8.5
.0
61.4
12.9
5.1
19.3
.8
1.9
.1
14.9
6.4
.0
54.5
8.9
3.8
16.9
.7
2.0
.1
15.2
6.8
.0
58.3
6.9
6.2
21.8
1.1
1.9
.1
13.8
6.5
.0
6o. r
9.6
4.1
17.6r
1.6
2.0
.1
16.7r
8.4
.0
57.8*
6.9
4.5
15.6
2.5
2.1
.1
16.9*
9.3
.0
67.5*
12.4
5.5
15.1
2.8
2.1
.1
19.1*
10.4
.0
66 Miscellaneous and unallocated6
30.5
39.9
44.4
48.0
47.8
48.6
36.8
39.7
38.8r
46.2*
46.3*
3.1
1.3
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. U.S. office data include other types of
U.S.-owned depository institutions as well as some types of brokers and dealers.
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. 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.
5. Foreign branch claims only.
6. Includes New Zealand, Liberia, and international and regional
organizations.
Nonbank-Reported
3.22
Data
A63
L I A B I L I T I E S T O U N A F F I L I A T E D F O R E I G N E R S Reported b y N o n b a n k i n g B u s i n e s s Enterprises in
the U n i t e d States 1
Millions of dollars, end of period
1993
1992
Type of liability and area or country
1989
1990
1991
June
38,764
1
46,043
44,549
Sept.
Dec.
Mar.
June
Sept.p
46,122
46,981
45,218
45,776
45,881
48,147
37,159
8,059
37,501
8,275
36,558
9,323
38,447
9,700
? Payable in dollars
3 Payable in foreign currencies
33,973
4,791
40,786
5,257
38,893
5,656
39,270
6,852
38,286
8,695
By type
4 Financial liabilities
5 Payable in dollars
6 Payable in foreign currencies
17,879
14,035
3,844
21,066
16,979
4,087
22,344
17,968
4,376
23,178
17,777
5,401
24,417
17,417
7,000
23,244
16,587
6,657
23,610
16,785
6,825
24,175
16,434
7,741
25,928
18,178
7,750
7 Commercial liabilities
8 Trade payables
9 Advance receipts and other liabilities
20,885
8,070
12,815
24,977
10,683
14,294
22,205
9,267
12,938
22,944
10,285
12,659
22,564
10,227
12,337
21,974
9,893
12,081
22,166
10,005
12,161
21,706
9,683
12,023
22,219
9,080
13,139
19,938
947
23,807
1,170
20,925
1,280
21,493
1,451
20,869
1,695
20,572
1,402
20,716
1,450
20,124
1,582
20,269
1,950
11,660
340
258
464
941
541
8,818
10,978
394
975
621
1,081
545
6,357
11,858
216
2,106
682
1,056
408
6,383
13,470
193
2,324
634
979
490
7,963
14,262
256
2,785
738
980
627
8,074
13,034
414
1,608
810
606
569
8,357
13,397
306
1,610
820
639
503
8,965
13,997
268
2,216
787
585
491
8,995
16,255
278
2,074
779
573
378
11,583
10
11
Payable in dollars
Payable in foreign currencies
By area or country
Financial liabilities
1?
13
14
15
16
17
18
Belgium and Luxembourg
Germany
Netherlands
Switzerland
United Kingdom
610
229
292
362
345
516
576
492
663
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,357
157
17
0
724
6
0
4,153
371
0
0
3,160
5
4
4,784
537
114
6
3,524
7
4
3,908
353
114
10
2,757
8
4
3,997
230
115
18
2,933
12
5
4,053
369
114
19
2,860
12
6
4,099
521
114
18
2,770
13
5
3,799
426
124
18
2,551
11
5
3,319
1,301
114
18
1,200
15
5
Japan
Middle East oil-exporting countries
4,151
3,299
2
5,295
4,065
5
5,352
4,116
13
5,349
4,245
10
5,723
4,678
17
5,607
4,568
19
5,477
4,495
24
5,717
4,564
19
5,541
4,552
23
2
0
2
0
6
4
0
0
5
0
6
0
6
0
130
123
132
124
100
409
52
89
85
28
55
40
18
9,071
175
877
1,392
710
693
2,620
10,310
275
1,218
1,270
844
775
2,792
8,715
248
1,039
1,052
710
575
2,311
7,848
240
724
799
605
461
2,405
7,492
173
756
851
601
482
2,282
7,555
296
750
717
567
349
2,526
6,930
262
705
643
537
469
2,118
6,810
267
773
603
577
440
2,198
6,913
255
610
565
601
535
2,294
19
Canada
70
71
7?
73
74
75
26
Latin America and Caribbean
77
78
29
30
31
Africa
Oil-exporting countries
32
Mother 4
33
34
35
36
37
38
39
Commercial liabilities
Belgium and Luxembourg
Germany
Netherlands
Switzerland
United Kingdom
1,124
40
1,261
1,014
1,109
1,114
1,001
991
933
831
1,672
12
538
145
30
475
130
1,355
3
310
219
107
307
94
1,814
8
409
218
73
480
279
1,493
3
325
121
85
326
125
1,495
3
307
209
24
447
124
1,776
11
429
236
34
553
171
1,820
6
356
226
16
659
172
1,762
4
340
214
36
570
183
Venezuela
1,224
41
308
100
27
323
164
48
49
50
Middle Eastern oil-exporting countries2'5
7,550
2,914
1,632
9,483
3,651
2,016
9,335
3,722
1,498
10,445
3,538
1,778
11,026
3,918
1,813
10,791
3,953
1,791
11,067
4,035
1,796
10,823
3,715
1,815
11,575
4,534
1,816
51
52
Oil-exporting countries3
886
339
844
422
715
327
111
389
675
335
556
295
675
322
665
378
558
279
1,030
1,406
1,071
951
764
576
727
655
580
41
47
43
44
45
46
47
53
Latin America and Caribbean
Bahamas
British West Indies
Other4
1. For a description of the changes in the international statistics tables, see
Federal Reserve Bulletin, vol. 65, (July 1979), 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 1994
3.23
CLAIMS ON UNAFFILIATED FOREIGNERS
the U n i t e d S t a t e s 1
Reported b y N o n b a n k i n g B u s i n e s s Enterprises in
Millions of dollars, end of period
1992r
Type, and area or country
1989
1990
1993
1991
June
Sept.
Dec.
Mar.
r
Juner
Sept.
1 Total
33,173
35,348
45,121
46,517
46,192
41,637
45,569
41,174
41,715r
2 Payable in dollars
i Payable in foreign currencies
30,773
2,400
32,760
2,589
42,548
2,573
43,492
3,025
43,218
2,974
39,047
2,590
42,704
2,865
38,093
3,081
38,485r
3,230"
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
19,297
12,353
11,364
989
6,944
6,190
754
19,874
13,577
12,552
1,025
6,297
5,280
1,017
27,744
19,946
19,071
875
7,798
6,906
892
28,977
19,813
18,456
1,357
9,164
8,433
731
28,573
19,524
18,387
1,137
9,049
8,028
1,021
23,532
15,100
14,302
798
8,432
7,667
765
26,073
16,527
15,469
1,058
9,546
8,793
753
21,791
11,646
10,728
918
10,145
9,221
924
r
23,331r
13,2%r
12,317
979r
10,035rr
9,276
759"
11 Commercial claims
12 Trade receivables
13 Advance payments and other claims
13,876
12,253
1,624
15,475
13,657
1,817
17,377
14,465
2,912
17,540
14,846
2,694
17,619
14,676
2,943
18,105
15,547
2,558
19,4%
17,140
2,356
19,383
16,953
2,430
18,384r
15,458rr
2,926
14
15
13,219
657
14,927
548
16,571
806
16,603
937
16,803
816
17,078
1,027
18,442
1,054
18,144
1,239
16,892"
l,492r
8,463
28
153
152
238
153
7,496
9,645
76
371
367
265
357
7,971
13,316
13
269
283
334
581
11,409
12,906
25
777
354
715
765
8,731
11,301
16
768
292
750
587
8,078
9,310
8
762
326
515
490
6,234
10,330
6
905
378
544
478
6,987
9,623
13
774
373
499
460
6,570
8,261r
9"
688rr
361r
485r
454
5,257"
16
17
18
19
20
21
22
Payable in dollars
Payable in foreign currencies
By area or country
Financial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
23
Canada
1,904
2,934
2,642
2,545
2,281
1,709
2,007
1,761
l,573r
24
25
26
27
28
29
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
8,020
1,890
7
224
5,486
94
20
6,201
1,090
3
68
4,635
177
25
10,704
814
8
351
9,056
212
40
12,160
568
12
331
10,828
244
32
13,837
1,248
65
589
11,492
239
26
11,122
658
40
686
9,266
286
29
9,718
320
79
592
8,266
235
23
6,704
697
258
590
4,650
270
24
10,067r
494"
197"
590"
8,109"
385"
25"
31
32
33
Asia
Japan
Middle East oil-exporting countries2
590
213
8
860
523
8
640
350
5
952
705
4
717
471
4
807
643
3
3,263
3,066
3
2,%1
2,444
10
2,726"
2,199"
5
34
35
Africa
Oil-exporting countries3
140
12
37
0
57
1
57
0
71
1
79
9
128
1
125
1
88
1
36
All other4
180
195
385
357
366
505
627
617
616
6,209
242
964
696
479
313
1,575
7,044
212
1,240
807
555
301
1,775
8,192
194
1,585
954
645
295
2,086
8,480
255
1,685
922
666
394
2,172
8,146
173
1,824
895
588
305
2,004
8,287
188
1,519
916
546
352
2,068
8,650
169
1,468
%1
724
425
2,312
8,777
170
1,453
968
556
441
2,502
7,879
162
1,389
862
391
374
2,206
37
38
39
40
41
42
43
Commercial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
44
Canada
1,091
1,074
1,114
1,066
1,143
1,226
1,270
1,290
1,295
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2,184
58
323
297
36
508
147
2,375
14
246
326
40
661
192
2,655
13
264
427
41
840
203
2,737
12
291
450
32
861
253
3,222
12
256
409
43
975
307
2,997
27
255
352
40
907
340
3,401
18
195
829
17
974
336
3,379
16
239
782
43
880
310
2,973
19
225
400
39
830
268
52
53
54
Asia
Japan
Middle Eastern oil-exporting countries
3,570
1,199
518
4,127
1,460
460
4,594
1,900
621
4,500
1,798
609
4,322
1,776
513
4,695
1,842
682
5,310
2,127
760
5,028
1,824
659
5,325
2,443
446
55
56
Africa
Oil-exporting countries3
429
108
488
67
429
95
428
73
439
60
549
78
456
75
507
97
492
107
57
Other4
393
367
393
329
347
351
409
402
420
1. For a description of the changes in the international statistics tables, see
Federal Reserve Bulletin, vol. 65, (July 1979), 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
1993
Transaction and area or country
1992
1993
Jan.Dec.
1993
June
July
Aug.r
Sept.r
Oct/
Nov/
Dec.p
23,892
23,023
32,350
27,840
31,898
28,755
32,836
28,362
U.S. corporate securities
STOCKS
1 Foreign purchases
2 Foreign sales
221,367
226,503
319,416
297,913
319,416
297,913
24,310r
23,467r
24,441r
25,046r
3 Net purchases or sales ( - )
-5,136
21,503
21,503
843R
—605R
2,440
869
4,510
3,143
4,474
R
-652R
2,413
951
4,598
3,073
4,450
-185 rr
45r
76r
-452 1
369r
-73
- l ^ r
413
-135
632
626
-49
72
670
-9
202
133
354
-204
-128
613
-44
1,204
860
63
35
434
-152
112
69
-259
570
-596
139
10
977
1,016
3
-16
3,095
198
328
134
409
1,709
-300
1,245
-77
602
349
5
28
1,381
45
130
-767
205
1,444
11
941
53
601
488
6
80
2,408
61
266
183
338
1,071
-110
1,058
11
965
681
20
98
4 Foreign countries
26,133
23,693
-5,169
21,231
21,231
815
-4,927
-1,350
-80
-262
168
-3,301
1,407
2,203
-88
-3,943
-3,598
10
169
10,582
-103
1,647
-603
2,986
4,477
-3,213
5,709
-311
8,199
3,826
63
202
10,582
-103
1,647
-603
2,986
4,477
-3,213
5,709
-311
8,199
3,826
63
202
415r
-66 rr
99
-91 rr
178r
195
-532 rr
72
-22
1,073
230
20
-211
33
272
272
28
47
27
-82
-88
70
24
214,922
175,842
284,346
218,425
284,346
218,425
24,091
16,825
22,738
20,730
22,288
16,481
24,845
16,294
27,565
19,000
28,913
21,545
29,124
18,215
21 Net purchases or sales ( - )
39,080
65,921
65,921
7,266
2,008
5,807
8,551
8,565
7,368
10,909
22 Foreign countries
37,964
65,384
65,384
7,229
2,018
5,801
7,865
8,426
7,341
10,843
73
74
25
76
77
78
79
30
31
37.
33
34
35
17,435
1,203
2,480
540
-579
12,421
237
9,300
3,166
7,545
-450
354
-73
21,732
2,346
883
-229
-627
18,936
1,653
16,490
3,257
20,830
11,569
1,149
273
21,732
2,346
883
-229
-627
18,936
1,653
16,490
3,257
20,830
11,569
1,149
273
2,710
-12
-241
-134
-56
3,033
397
1,770
202
2,089
863
2
59
-1,001
-76
2
11
172
-1,214
218
901
147
1,382
890
224
147
2,102
64
-207
317
-327
1,847
164
1,678
158
1,432
919
317
-50
3,913
13
-419
219
-204
4,059
249
846
171
2,373
993
236
77
3,911
512
913
-518
203
2,666
95
1,727
375
2,256
1,574
47
15
1,500
110
-231
49
-80
2,266
54
2,650
432
2,765
1,478
-2
-58
3,079
145
-62
156
28
2,853
319
3,678
383
3,121
2,477
119
144
1,116
537
537
37
6
686
139
27
66
5
6
7
8
9
10
11
1?
13
14
15
16
17
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East1
Other Asia
Japan
Africa
Other countries
18 Nonmonetary international and
regional organizations
BONDS
2
19 Foreign purchases
20 Foreign sales
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East1
Other Asia
Japan
Africa
Other countries
36 Nonmonetary international and
regional organizations
-10
Foreign securities
37 Stocks, net purchases or sales ( - ) '
38 Foreign purchases
39 Foreign sales
40 Bonds, net purchases or sales ( - )
41 Foreign purchases
42 Foreign sales
-32,259
150,051
182,310
-15,605
513,589
529,194
-67,821
246,055
313,876
-60,754
834,487
895,241
-67,821
246,055
313,876
-60,754
834,487
895,241
-6,353
18,507
24,860
-7,535
70,373
77,908
-7,992
19,607
27,599
-10,661
68,741
79,402
-12,229
20,737
32,966
-1,046
75,850
76,896
-5,176
21,475
26,651
-9,903
80,145
90,048
-7,474
24,740
32,214
-2,446
76,034
78,480
-6,928
28,421
35,349
-54
87,459
87,513
-5,263
31,599
36,862
-7,576
79,319
86,895
43 Net purchases or sales (-), of stocks and bonds
-47,864
-128,575
-128,575
-13,888
-18,653
-13,275
-15,079
-9,920
-6,982
-12,839
44 Foreign countries
-51,274
-128,736
-128,736
-13,950
-18,763
-13,329
-15,155
-10,269
-6,991
-12,869
45
46
47
48
49
50
-31,350
-6,893
-4,340
-7,923
-13
-755
-86,353
-14,591
-8,790
-14,941
-185
-3,876
-86,353
-14,591
-8,790
-14,941
-185
-3,876
-11,721
-1,277
421
-787
9
-595
-15,516
-2,557
-633
121
4
-182
-10,544
1,635
-1,127
-2,644
7
-656
-13,207
-1,394
1,945
-2,221
14
-292
-5,004
-916
--1,280
-2,002
14
-1,081
-4,527
709
-2,248
-502
0
-423
-3,147
-1,729
-3,984
-3,553
13
-469
3,410
161
161
62
NO
54
76
349
9
30
Europe
Canada
Latin America and Caribbean
Africa
Other countries
51 Nonmonetary international and
regional organizations
1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait,
Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States).
2. Includes state and local government securities and securities of U.S.
government agencies and corporations. Also includes issues of new debt securities sold abroad by U.S. corporations organized to finance direct investments
abroad.
3. In a July 1989 merger, the former stockholders of a 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 1994
MARKETABLE U.S. TREASURY BONDS A N D NOTES
Foreign Transactions
Millions of dollars
1993
1993
Country or area
1992
1993
Jan.Dec.
Juner
Julyr
Aug.r
Sept.r
Oct.r
Nov.r
Dec."
Transactions, net purchases or sales ( - ) during period1
24,215
-5,709
-1,531
13,980 -10,890
3,925
15,214
417
24,108
-5,955
-1,144
14,368 -10,748
5,055
14,627
670
-2,292
1,218
-9,977
-515
1,421
-1,491
6,275
777
11,252
1,473
86
-1,100
-393
673
888
2,147
-828
133
-1,539
505
-2,918
524
32
-223
1,455
-914
2,270
3,547
-218
305
-167
293
-74
3,787
-379
324
-5,917
207
1,209
137
53
-209
-8,201
887
-1,119
3,500
-205
1,176
-506
47
448
833
1,707
-342
-821
22
-750
206
141
583
-1,890
867
1,358
498
-65
571
-189
-31
-70
-413
695
846
-4,699
389
-5,932
844
20,533
17,070
1,155
-1,841
-4,699
389
-5,932
844
20,533
17,070
1,155
-1,841
-1,419
5
711
-2,135
-5,687
-301
81
-536
-333
2
510
-845
-2,587
-980
116
929
6,917
-7
1,178
5,746
3,755
3,561
292
-467
-3,311
32
-1,700
-1,643
-574
-1,809
616
-443
3,701
-102
676
3,127
-2,034
156
74
156
2,068
19
-38
2,087
11,796
5,661
35
191
-4,835
56
-1,066
-3,825
4,005
649
114
42
1,353
1,018
533
107
-398
654
107
-398
654
246
403
106
-387
-321
-21
-388
-698
30
-142
-99
18
-1,130
-874
-23
587
823
40
-253
60
-1
37,935
6,876
31,059
24,108
1,316
22,792
24,108
1,316
22,792
-5,955
-760
-5,195
-1,144
-4,677
3,533
14,368 -10,748
724
3,181
13,644 -13,929
5,055
1,619
3,436
14,627
6,248
8,379
670
3,656
-2,986
4,317
11
-8,836
-5
-8,836
-5
-2,443
0
-1,261
0
-1,172
0
-820
0
-6
0
84
-9
1 Estimated total
39,288
24,215
2 Foreign countries
37,935
24,108
3
4
5
6
7
8
9
10
11
Europe
Belgium and Luxembourg
Germany
Netherlands
Sweden
Switzerland
United Kingdom
Other Europe and former U.S.S.R
Canada
19,625
1,985
2,076
-2,959
-804
488
24,184
-5,345
562
-2,292
1,218
-9,977
-515
1,421
-1,491
6,275
777
11,252
12
13
14
15
16
17
18
19
Latin America and Caribbean
Venezuela
Other Latin America and Caribbean
Netherlands Antilles
Asia
Japan
Africa
Other
-3,222
539
-1,956
-1,805
23,517
9,817
1,103
-3,650
20 Nonmonetary international and regional organizations
21 International
22 Latin American regional
MEMO
23 Foreign countries
24 Official institutions
25 Other foreign
Oil-exporting countries
26 Middle East 2
27
1. 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.
-980
0
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States),
3. Comprises Algeria, Gabon, Libya, and Nigeria,
Interest and Exchange
Rates
A67
DISCOUNT RATES OF FOREIGN CENTRAL BANKS1
3.26
Percent per year
Country
Country
Percent
5.0
5.0
4.10
5.50
6.10
Austria..
Belgium .
Canada..
Denmark
France ..
Percent
1994
1994
1994
1994
1994
Germany...
Italy
Japan
Netherlands
1. Rates shown are mainly those at which the central bank either discounts 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
that the central bank transacts the largest proportion of its credit operations.
Feb. 1994
Feb. 1994
Sept. 1993
Dec. 1993
Month
effective
Month
effective
5.25
7.5
1.75
5.0
Month
effective
Feb.
Feb.
Feb.
Feb.
Feb.
Rate on Feb. 28, 1994
Rate on Feb. 28, 1994
Rate on Feb. 28, 1994
Country
4.75
4.0
12.0
Norway
Switzerland
United Kingdom
Feb. 1994
Dec. 1993
Sept. 1992
2. Since February 1981, the rate has been that at which the Bank of France
discounts Treasury bills for seven to ten days.
FOREIGN SHORT-TERM INTEREST RATES1
3.27
Percent per year, averages of daily figures
1994
1993
Type or country
1991
1992
1993
Aug.
1
4
S
f,
7
8
q
10
P
5.86
11.47
9.07
9.15
8.01
9.19
9.49
12.04
9.30
7.33
3.70
9.56
6.76
9.42
7.67
9.25
10.14
13.91
9.31
4.39
3.18
5.88
5.14
7.17
4.79
6.73
8.30
10.09
8.10
2.96
1. Rates are for three-month interbank loans, with the following exceptions:
Canada, finance company paper; Belgium, three-month Treasury bills; and Japan,
CD rate.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
3.14
5.79
4.58
6.49
4.56
6.27
7.45
9.20
9.02
3.02
3.08
5.88
4.90
6.52
4.61
6.26
7.07
9.05
9.82
2.59
3.26
5.74
4.76
6.53
4.44
6.20
6.85
8.69
9.05
2.44
3.36
5.52
4.34
6.20
4.44
5.85
6.56
8.94
7.93
2.31
3.26
5.29
4.09
5.99
4.10
5.50
6.39
8.56
7.03
2.06
3.15
5.34
3.89
5.76
3.90
5.12
6.19
8.38
6.88
2.13
3.43
5.15
3.89
5.78
4.04
5.19
6.18
8.42
6.39
2.21
A68
3.28
International Statistics • April 1994
FOREIGN E X C H A N G E RATES1
Currency units per dollar except as noted
1994
1993
Country/currency unit
1991
1992
1993
Sept.
1 Australia/dollar2
2 Austria/schilling
3 Belgium/franc
4 Canada/dollar
5 China, P.R./yuan
6 Denmark/krone
7 Finland/markka
8 France/franc
9 Germany/deutsche mark
10 Greece/drachma
11 Hong Kong/dollar
12 India/rupee
13 Ireland/pound
14 Italy/lira
15 Japan/yen
16 Malaysia/ringgit
17 Netherlands/guilder 2
18 New Zealand/dollar
19 Norway/krone
20 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
Oct.
Nov.
Dec.
Jan.
Feb.
77.872
11.686
34.195
1.1460
5.3337
6.4038
4.0521
5.6468
1.6610
182.63
73.521
10.992
32.148
1.2085
5.5206
6.0372
4.4865
5.2935
1.5618
190.81
67.993
11.639
34.581
1.2902
5.7795
6.4863
5.7251
5.6669
1.6545
229.64
65.167
11.402
34.847
1.3215
5.8015
6.6336
5.7868
5.6724
1.6219
232.56
66.100
11.540
35.674
1.3263
5.8013
6.6379
5.7554
5.7541
1.6405
237.93
66.465
11.958
36.227
1.3174
5.8086
6.7667
5.8143
5.9069
1.7005
243.43
67.364
12.025
35.694
1.3308
5.8210
6.7042
5.7602
5.8477
1.7105
245.51
69.608
12.252
36.206
1.3173
8.7219
6.7697
5.7004
5.9207
1.7426
250.29
71.611
12.200
35.768
1.3424
8.7249
6.7674
5.5930
5.8955
1.7355
250.48
7.7712
22.712
161.39
1,241.28
134.59
2.7503
1.8720
57.832
6.4912
144.77
7.7402
28.156
170.42
1,232.17
126.78
2.5463
1.7587
53.792
6.2142
135.07
7.7357
31.291
146.47
1,573.41
111.08
2.5738
1.8585
54.127
7.0979
161.08
7.7384
31.578
143.40
1,569.10
105.57
2.5475
1.8214
55.157
7.0829
166.28
7.7307
31.505
143.19
1,600.93
107.02
2.5478
1.8438
55.260
7.1755
169.60
7.7272
31.434
140.31
1,666.31
107.88
2.5548
1.9084
54.787
7.3882
173.93
7.7245
31.440
141.82
1,687.17
109.91
2.5737
1.9162
55.631
7.4211
174.58
7.7251
31.440
143.03
1,699.45
111.44
2.7160
1.9516
56.263
7.5064
176.04
7.7353
31.449
134.46
1,685.%
106.30
2.7624
1.9464
57.436
7.4885
175.15
1.7283
2.7633
736.73
104.01
41.200
6.0521
1.4356
26.759
25.528
176.74
1.6294
2.8524
784.58
102.38
44.013
5.8258
1.4064
25.160
25.411
176.63
1.6158
3.2729
805.75
127.48
48.205
7.7956
1.4781
26.416
25.333
150.16
1.5972
3.4135
811.84
130.54
48.854
8.0170
1.4182
26.931
25.196
152.48
1.5735
3.3924
813.45
132.18
48.954
8.0195
1.4432
26.865
25.269
150.23
1.5950
3.3680
809.79
137.27
49.187
8.2660
1.4969
26.884
25.382
148.08
1.5975
3.3788
812.57
140.42
49.322
8.3501
1.4634
26.768
25.460
149.13
1.6037
3.4107
813.55
143.04
49.460
8.1184
1.4716
26.495
25.543
149.23
1.5873
3.4520
812.24
141.08
49.113
7.9869
1.4565
26.440
25.382
147.92
89.84
86.61
93.18
92.07
93.29
95.47
95.73
96.54
95.79
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).
A69
Guide to Statistical Releases and Special Tables
STATISTICAL RELEASES—List Published Semiannually, with Latest Bulletin Reference
Issue
December 1993
Anticipated schedule of release dates for periodic releases
Page
A78
SPECIAL TABLES—Quarterly Data Published Irregularly, with Latest Bulletin Reference
Title and Date
Issue
Assets and liabilities of commercial
December 31, 1992
March 31, 1993
June 30, 1993
September 30, 1993
Terms of lending at commercial
February 1993
May 1993
August 1993
November 1993
banks
May
August
November
February
1993
1993
1993
1994
A70
A70
A70
A70
May
August
November
February
1993
1993
1993
1994
A76
A76
A76
A76
May
August
November
February
1993
1993
1993
1994
A80
A80
A80
A80
November
January
August
October
1991
1992
1992
1992
A80
A70
A80
A70
December
May
August
March
1991
1992
1992
1993
A79
A81
A83
A71
banks
Assets and liabilities of U.S. branches and agencies of foreign
December 31, 1992
March 31, 1993
June 30, 1993
September 30, 1993
banks
Pro forma balance sheet and income statements for priced service
June 30, 1991
September 30, 1991
March 30, 1992
June 30, 1992
Assets and liabilities of life insurance
June 30, 1991
September 30, 1991
December 31, 1991
September 30, 1992
Page
operations
companies
A70
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, 2 2 , 2 3
Assets and liabilities (See also Foreigners)
Banks, by classes, 20-23
Domestic finance companies, 36
Federal Reserve Banks, 11
Financial institutions, 28
Foreign banks, U.S. branches and agencies, 24
Automobiles
Consumer installment credit, 39
Production, 47, 48
BANKERS acceptances, 10, 23, 26
Bankers balances, 20-23. (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 35
Rates, 26
Branch banks, 24, 55
Business activity, nonfinancial, 45
Business expenditures on new plant and equipment, 35
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 46
Capital accounts
Banks, by classes, 20
Federal Reserve Banks, 11
Central banks, discount rates, 67
Certificates of deposit, 26
Commercial and industrial loans
Commercial banks, 18, 22
Weekly reporting banks, 2 2 - 2 4
Commercial banks
Assets and liabilities, 20-23
Commercial and industrial loans, 18, 20, 21, 22, 23, 24
Consumer loans held, by type and terms, 39
Deposit interest rates of insured, 16
Loans sold outright, 22
Nondeposit funds, 19
Real estate mortgages held, by holder and property, 38
Time and savings deposits, 4
Commercial paper, 25, 26, 36
Condition statements (See Assets and liabilities)
Construction, 45, 49
Consumer installment credit, 39
Consumer prices, 45, 46
Consumption expenditures, 52, 53
Corporations
Nonfinancial, assets and liabilities, 35
Profits and their distribution, 35
Security issues, 34, 65
Cost of living (See Consumer prices)
Credit unions, 39
Currency in circulation, 5, 14
Customer credit, stock market, 27
DEBITS to deposit accounts, 17
Debt (See specific types of debt or securities)
Demand deposits
Banks, by classes, 2 0 - 2 4
Ownership by individuals, partnerships, and
corporations, 24
Turnover, 17
Depository institutions
Reserve requirements, 9
Reserves and related items, 4, 5, 6, 13
Deposits (See also specific types)
Banks, by classes, 4, 20-23, 24
Federal Reserve Banks, 5 , 1 1
Interest rates, 16
Turnover, 17
Discount rates at Reserve Banks and at foreign central banks and
foreign countries (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 35
EMPLOYMENT, 45
Eurodollars, 26
FARM mortgage loans, 38
Federal agency obligations, 5, 10, 11, 12, 31, 32
Federal credit agencies, 33
Federal finance
Debt subject to statutory limitation, and types and ownership
of gross debt, 30
Receipts and outlays, 28, 29
Treasury financing of surplus, or deficit, 28
Treasury operating balance, 28
Federal Financing Bank, 28, 33
Federal funds, 7, 19, 22, 23, 24, 26, 28
Federal Home Loan Banks, 33
Federal Home Loan Mortgage Corporation, 33, 37, 38
Federal Housing Administration, 33, 37, 38
Federal Land Banks, 38
Federal National Mortgage Association, 33, 37, 38
Federal Reserve Banks
Condition statement, 11
Discount rates (See Interest rates)
U.S. government securities held, 5, 11, 12, 30
Federal Reserve credit, 5, 6, 11, 12
Federal Reserve notes, 11
Federally sponsored credit agencies, 33
Finance companies
Assets and liabilities, 36
Business credit, 36
Loans, 39
Paper, 25, 26
Financial institutions, loans to, 22, 23, 24
Float, 51
Flow of funds, 40, 42, 43, 44
Foreign banks, assets and liabilities of U.S. branches and
agencies, 23, 24
Foreign currency operations, 11
Foreign deposits in U.S. banks, 5, 11, 22, 23
Foreign exchange rates, 68
Foreign trade, 54
A71
Foreigners
Claims on, 55, 57, 60, 61, 62, 64
Liabilities to, 23, 54, 55, 57, 58, 63, 65, 66
GOLD
Certificate account, 11
Stock, 5, 54
Government National Mortgage Association, 33, 37, 38
Gross domestic product, 51
HOUSING, new and existing units, 49
INCOME, personal and national, 45, 51, 52
Industrial production, 45, 47
Installment loans, 39
Insurance companies, 30, 38
Interest rates
Bonds, 26
Consumer installment credit, 39
Deposits, 16
Federal Reserve Banks, 8
Foreign central banks and foreign countries, 67
Money and capital markets, 26
Mortgages, 37
Prime rate, 25
International capital transactions of United States, 53-67
International organizations, 57, 58, 60, 63, 64
Inventories, 51
Investment companies, issues and assets, 35
Investments (See also specific types)
Banks, by classes, 20, 21, 22, 23, 24
Commercial banks, 4, 18, 20-23
Federal Reserve Banks, 11, 12
Financial institutions, 38
LABOR force, 45
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Banks, by classes, 20-23
Commercial banks, 4, 18, 20-23
Federal Reserve Banks, 5, 6, 8, 11, 12
Financial institutions, 38
Insured or guaranteed by United States, 37, 38
MANUFACTURING
Capacity utilization, 46
Production, 46, 48
Margin requirements, 27
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, 26
Money stock measures and components, 4, 14
Mortgages (See Real estate loans)
Mutual funds, 35
Mutual savings banks (See Thrift institutions)
NATIONAL defense outlays, 29
National income, 51
OPEN market transactions, 10
PERSONAL income, 52
Prices
Consumer and producer, 45, 50
Stock market, 27
Prime rate, 25
Producer prices, 45, 50
Production, 45, 47
Profits, corporate, 35
REAL estate loans
Banks, by classes, 18, 22, 23, 38
Terms, yields, and activity, 37
Type of holder and property mortgaged, 38
Repurchase agreements, 7, 19, 22, 23, 24
Reserve requirements, 9
Reserves
Commercial banks, 20
Depository institutions, 4, 5, 6, 13
Federal Reserve Banks, 11
U.S. reserve assets, 54
Residential mortgage loans, 37
Retail credit and retail sales, 39, 40, 45
SAVING
Flow of funds, 40, 42, 43, 44
National income accounts, 51
Savings and loan associations, 38, 39, 40. (See also SAIF-insured
institutions)
Savings banks, 38, 39
Savings deposits (See Time and savings deposits)
Securities (See also specific types)
Federal and federally sponsored credit agencies, 33
Foreign transactions, 65
New issues, 34
Prices, 27
Special drawing rights, 5, 11, 53, 54
State and local governments
Deposits, 22, 23
Holdings of U.S. government securities, 30
New security issues, 34
Ownership of securities issued by, 22, 23
Rates on securities, 26
Stock market, selected statistics, 27
Stocks (See also Securities)
New issues, 34
Prices, 27
Student Loan Marketing Association, 33
TAX receipts, federal, 29 also Credit unions and Savings and
Thrift institutions, 4. (See
loan associations)
Time and savings deposits, 4, 14, 16, 19, 20, 21, 22, 23, 24
Trade, foreign, 54
Treasury cash, Treasury currency, 5
Treasury deposits, 5, 11, 28
Treasury operating balance, 28
UNEMPLOYMENT, 45
U.S. government balances
Commercial bank holdings, 20, 21, 22, 23
Treasury deposits at Reserve Banks, 5, 11, 28
U.S. government securities
Bank holdings, 20-23, 24, 30
Dealer transactions, positions, and financing, 32
Federal Reserve Bank holdings, 5, 11, 12, 30
Foreign and international holdings and
transactions, 11, 30, 66
Open market transactions, 10
Outstanding, by type and holder, 28, 30
Rates, 25
U.S. international transactions, 53-67
Utilities, production, 48
VETERANS Administration, 37, 38
WEEKLY reporting banks, 22-24
Wholesale (producer) prices, 45, 50
YIELDS (See Interest rates)
A72
Federal Reserve Board of Governors
and Official Staff
A L A N GREENSPAN,
Chairman
EDWARD W . KELLEY, JR.
JOHN P. LAWARE
OFFICE OF BOARD
MEMBERS
JOSEPH R. COYNE, Assistant to the Board
DONALD J. WINN, Assistant 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
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
KATHLEEN M. O'DAY, Associate General Counsel
OFFICE
DIVISION OF INTERNATIONAL
FINANCE
EDWIN M. TRUMAN, Staff Director
LARRY J. PROMISEL, Senior Associate
Director
CHARLES J. SIEGMAN, Senior Associate
Director
Director
DALE W. HENDERSON, Associate
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
OF THE
WILLIAM W . WILES,
SECRETARY
Secretary
JENNIFER J. JOHNSON, Associate
BARBARA R. LOWREY, Associate
Secretary
Secretary
DIVISION OF
BANKING
SUPERVISION
AND
REGULATION
RICHARD SPILLENKOTHEN,
Director
STEPHEN C. SCHEMERING, Deputy Director
DON E. KLINE, Associate
Director
WILLIAM A. RYBACK, Associate
Director
FREDERICK M. STRUBLE, Associate
Director
HERBERT A. BIERN, Deputy Associate
Director
ROGER T. COLE, Deputy Associate
Director
JAMES I. GARNER, Deputy Associate
Director
HOWARD A. AMER, Assistant
Director
GERALD A. EDWARDS, JR., Assistant
Director
JAMES D. GOETZINGER, Assistant
Director
STEPHEN M. HOFFMAN, JR., Assistant
Director
LAURA M. HOMER, Assistant
Director
JAMES V. HOUPT, Assistant
Director
JACK P. JENNINGS, Assistant
Director
MICHAEL G. MARTINSON, Assistant
Director
RHOGER H PUGH, Assistant
Director
SIDNEY M. SUSSAN, Assistant
Director
MOLLY S. WASSOM, Assistant
Director
WILLIAM SCHNEIDER, Project Director,
National Information
Center
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
Director
JOHN J. MINGO, Senior Adviser
LEVON H. GARABEDIAN, Assistant
Director
(Administration)
DIVISION OF MONETARY
DONALD L . KOHN,
AFFAIRS
Director
DAVID E. LINDSEY, Deputy
Director
BRIAN F. MADIGAN, Associate
Director
RICHARD D. PORTER, Deputy Associate
Director
NORMAND R.V. BERNARD, Special Assistant to the Board
DIVISION OF
CONSUMER
AND COMMUNITY
AFFAIRS
GRIFFITH L . GARWOOD,
Director
GLENN E. LONEY, Associate
Director
DOLORES S. SMITH, Associate
Director
MAUREEN P. ENGLISH, Assistant
Director
IRENE SHAWN MCNULTY, Assistant
Director
LAWRENCE B . LINDSEY
S U S A N M . PHILLIPS
OFFICE OF
STAFF DIRECTOR
DIVISION
FOR
DAVID L . S H A N N O N ,
Opportunity
RESOURCES
Director
JOHN R. WEIS, Associate
Director
ANTHONY V. DIGIOIA, Assistant
Director
JOSEPH H. HAYES, JR., Assistant
Director
FRED HOROWITZ, Assistant
Director
OFFICE
OF THE
CONTROLLER
GEORGE E . LIVINGSTON,
Controller
STEPHEN J. CLARK, Assistant
Budgets)
DARRELL R. PAULEY, Assistant
DIVISION
OF SUPPORT
ROBERT E . FRAZIER,
Director
GEORGE M. LOPEZ, Assistant
DAVID L. WILLIAMS, Assistant
Controller
Controller
STEPHEN R . MALPHRUS,
(Programs
(Finance)
SERVICES
Director
Director
DIVISION OF INFORMATION
MANAGEMENT
RESOURCES
Director
BRUCE M. BEARDSLEY, Deputy Director
MARIANNE M. EMERSON, Assistant
Director
P o KYUNG KIM, Assistant
Director
RAYMOND H. MASSEY, Assistant
Director
EDWARD T. MULRENIN, Assistant
Director
DAY W. RADEBAUGH, JR., Assistant
Director
ELIZABETH B. RIGGS, Assistant
Director
RICHARD C. STEVENS, Assistant
Director
BANK
and
OPERATIONS
SYSTEMS
CLYDE H . FARNSWORTH, JR.,
S. DAVID FROST, Staff Director
PORTIA W. THOMPSON, Equal Employment
Programs Officer
DIVISION OF HUMAN
MANAGEMENT
OF RESERVE
AND PAYMENT
MANAGEMENT
Director
DAVID L. ROBINSON, Deputy Director (Finance
Control)
CHARLES W. BENNETT, Assistant
Director
JACK DENNIS, JR., Assistant
Director
EARL G. HAMILTON, Assistant
Director
Director
JEFFREY C. MARQUARDT, Assistant
JOHN H. PARRISH, Assistant
Director
LOUISE L. ROSEMAN, Assistant
Director
FLORENCE M. YOUNG, Assistant
Director
and
OFFICE OF THE INSPECTOR
GENERAL
BRENT L. BOWEN, Inspector
General
DONALD L. ROBINSON, Assistant Inspector
General
BARRY R. SNYDER, Assistant Inspector
General
74
Federal Reserve Bulletin • April 1994
Federal Open Market Committee
and Advisory Councils
FEDERAL
OPEN
MARKET
COMMITTEE
MEMBERS
A L A N GREENSPAN, Chairman
WILLIAM J. MCDONOUGH, Vice
J. ALFRED BROADDUS, JR.
EDWARD W . KELLEY, JR.
SUSAN M . PHILLIPS
ROBERT P. FORRESTAL
JOHN P. LAWARE
ROBERT T. PARRY
JERRY L . JORDAN
Chairman
LAWRENCE B . LINDSEY
ALTERNATE
THOMAS M . HOENIG
MEMBERS
THOMAS C . MELZER
JAMES H . OLTMAN
SILAS KEEHN
STAFF
JOHN M. DAVIS, Associate
Economist
MARVIN S. GOODFRIEND, Associate
Economist
DAVID E. LINDSEY, Associate
Economist
LARRY J. PROMISEL, Associate
Economist
CHARLES J. SIEGMAN, Associate
Economist
THOMAS D. SIMPSON, Associate
Economist
DAVID J. STOCKTON, Associate
Economist
SHEILA L. TSCHINKEL, Associate
Economist
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
JACK H. BEEBE, Associate
Economist
JOAN E. LOVETT, Manager for Domestic Operations, System Open Market Account
PETER R. FISHER, Manager for Foreign Operations, System Open Market Account
FEDERAL
ADVISORY
COUNCIL
RICHARD M . ROSENBERG,
President
EUGENE A. MILLER, Vice President
EUGENE A. MILLER, Seventh District
ANDREW B. CRAIG, III, Eighth District
JOHN F. GRUNDHOFER, Ninth District
DAVID A. RISMILLER, Tenth District
CHARLES R. HRDLICKA, Eleventh District
RICHARD M. ROSENBERG, Twelfth District
MARSHALL N. CARTER, First District
J. CARTER BACOT, Second District
ANTHONY P. TERRACCIANO, Third District
FRANK V. CAHOUET, Fourth District
RICHARD G. TILGHMAN, Fifth District
CHARLES E. RICE, Sixth District
HERBERT V. PROCHNOW, Secretary
WILLIAM J. KORSVIK,
JAMES ANNABLE,
Emeritus
Co-Secretary
Co-Secretary
A75
CONSUMER
ADVISORY
COUNCIL
JEAN POGGE, Chicago, Illinois, Chairman
JAMES L. WEST, Tijeras, New Mexico, Vice Chairman
BARRY A. ABBOTT, San Francisco, California
JOHN R. ADAMS, Philadelphia, Pennsylvania
JOHN A. BAKER, Atlanta, Georgia
MULUGETTA BIRRU, Pittsburgh, Pennsylvania
DOUGLAS D. BLANKE, St. Paul, Minnesota
GENEVIEVE BROOKS, Bronx, New York
CATHY CLOUD, W a s h i n g t o n , D . C .
ALVIN J. COWANS, Orlando, Florida
MICHAEL D. EDWARDS, Yelm, Washington
MICHAEL FERRY, St. Louis, Missouri
ELIZABETH G. FLORES, Laredo, Texas
NORMA L. FREIBERG, N e w Orleans, Louisiana
LORI GAY, Los Angeles, California
BONNIE GUITON, Charlottesville, Virginia
THRIFT INSTITUTIONS
ADVISORY
GARY S. HATTEM, New York, New York
RONALD HOMER, Boston, Massachusetts
THOMAS L. HOUSTON, Dallas, Texas
KATHARINE W. MCKEE, Durham, North Carolina
EDMUND MIERZWINSKI, W a s h i n g t o n , D . C .
ANNE B. SHLAY, Philadelphia, Pennsylvania
JOHN V. SKINNER, Irving, Texas
REGINALD J. SMITH, Kansas City, Missouri
LOWELL N. SWANSON, Portland, Oregon
MICHAEL W . TIERNEY, W a s h i n g t o n , D . C .
LORRAINE VANETTEN, Troy, Michigan
GRACE W. WEINSTEIN, Englewood, N e w Jersey
LILY K. YAO, Honolulu, Hawaii
ROBERT O. ZDENEK, Greenwich, Connecticut
COUNCIL
BEATRICE D'AGOSTINO, Somerville, New Jersey, President
CHARLES JOHN KOCH, Cleveland, Ohio, Vice President
MALCOLM E. COLLIER, Lakewood, Colorado
WILLIAM A. COOPER, Minneapolis, Minnesota
PAUL L. ECKERT, Davenport, Iowa
GEORGE R. GLIGOREA, Sheridan, Wyoming
KERRY KILLINGER, Seattle, Washington
ROBERT MCCARTER, New Bedford, Massachusetts
NICHOLAS W. MITCHELL, JR., Winston-Salem, North Carolina
STEPHEN W. PROUGH, Irvine, California
STEPHEN D. TAYLOR, Miami, Florida
JOHN M. TIPPETS, DFW Airport, Texas
A76
Federal Reserve Board Publications
For ordering assistance, write PUBLICATIONS SERVICES,
MS-127, Board of Governors of the Federal Reserve System,
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THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNCTIONS.
1984. 120 pp.
ANNUAL REPORT.
ANNUAL REPORT: BUDGET REVIEW, 1 9 9 3 - 9 4 .
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October 1985
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1980-89
185 pp.
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215 pp.
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SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES
OF CHARTS. Weekly. $30.00 per year or $.70 each in the
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THE FEDERAL RESERVE ACT and other statutory provisions
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REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL
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A N N U A L PERCENTAGE RATE TABLES ( T r u t h i n
Lending—
Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp.
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GUIDE TO THE FLOW OF FUNDS ACCOUNTS. 6 7 2 pp.
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Consumer and Community Affairs Handbook. $75.00 per
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Monetary Policy and Reserve Requirements Handbook.
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Federal Reserve Regulatory Service. Four vols. (Contains all
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$200.00 per year.
Rates for subscribers outside the United States are as follows
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THE U . S . ECONOMY IN AN INTERDEPENDENT WORLD: A MULTI-
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WELCOME TO THE FEDERAL RESERVE. M a r c h 1 9 8 9 . 1 4 p p .
INDUSTRIAL PRODUCTION—1986 EDITION. D e c e m b e r 1 9 8 6 .
440 pp. $9.00 each.
FINANCIAL FUTURES AND OPTIONS IN THE U . S . ECONOMY.
December 1986. 264 pp. $10.00 each.
FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL ANALY-
SIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each.
CONSUMER
EDUCATION
PAMPHLETS
Short pamphlets suitable for classroom use. Multiple copies are
available without charge.
Consumer Handbook on Adjustable Rate Mortgages
Consumer Handbook to Credit Protection Laws
A Guide to Business Credit for Women, Minorities, and Small
Businesses
How to File A Consumer Credit Complaint
Series on the Structure of the Federal Reserve System
The Board of Governors of the Federal Reserve System
The Federal Open Market Committee
Federal Reserve Bank Board of Directors
Federal Reserve Banks
Organization and Advisory Committees
A Consumer's Guide to Mortgage Lock-Ins
A Consumer's Guide to Mortgage Settlement Costs
A Consumer's Guide to Mortgage Refinancings
Home Mortgages: Understanding the Process and Your Right
to Fair Lending
Making Deposits: When Will Your Money Be Available?
Making Sense of Savings
When Your Home is on the Line: What You Should Know
About Home Equity Lines of Credit
All
STAFF STUDIES: Only Summaries Printed in the
BULLETIN
Studies and papers
of general
interest.
text or to be added
to Publications
on economic
and financial subjects
that
Requests
to obtain single copies of the
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are
full
sent
Services.
S t a f f S t u d i e s 1 - 1 4 5 are o u t o f print.
1 4 6 . THE ROLE OF THE PRIME RATE IN THE PRICING OF
BUSINESS LOANS BY COMMERCIAL BANKS, 1 9 7 7 - 8 4 , b y
T h o m a s F. B r a d y . N o v e m b e r 1 9 8 5 . 2 5 p p .
1 4 7 . REVISIONS IN THE MONETARY SERVICES (DIVISIA) INDEXES OF THE MONETARY AGGREGATES, b y H e l e n T. Farr
and D e b o r a h Johnson. D e c e m b e r 1 9 8 5 . 4 2 pp.
1 4 8 . THE MACROECONOMIC AND SECTORAL EFFECTS OF THE
ECONOMIC RECOVERY TAX ACT: SOME SIMULATION
RESULTS, b y F l i n t B r a y t o n a n d P e t e r B . Clark. D e c e m b e r
1 9 8 5 . 17 p p .
1 4 9 . THE OPERATING PERFORMANCE OF ACQUIRED FIRMS IN
BANKING BEFORE AND AFTER ACQUISITION, b y S t e p h e n
A . R h o a d e s . April 1 9 8 6 . 3 2 pp.
1 5 0 . STATISTICAL COST ACCOUNTING MODELS IN BANKING:
A REEXAMINATION AND AN APPLICATION, b y J o h n T.
R o s e a n d J o h n D . W o l k e n . M a y 1 9 8 6 . 13 p p .
1 5 1 . RESPONSES TO DEREGULATION: RETAIL DEPOSIT PRICING
FROM 1 9 8 3 THROUGH 1 9 8 5 , b y Patrick I. M a h o n e y , A l i c e
P. W h i t e , P a u l F. O ' B r i e n , a n d M a r y M . M c L a u g h l i n .
January 1 9 8 7 . 3 0 pp.
1 5 2 . DETERMINANTS OF CORPORATE MERGER ACTIVITY: A
REVIEW OF THE LITERATURE, b y M a r k J. W a r s h a w s k y .
April 1987. 18 pp.
1 5 3 . STOCK MARKET VOLATILITY, b y C a r o l y n D . D a v i s a n d
A l i c e P. W h i t e . S e p t e m b e r 1 9 8 7 . 1 4 p p .
1 5 4 . T H E EFFECTS ON CONSUMERS AND CREDITORS OF
PROPOSED CEILINGS ON CREDIT CARD INTEREST RATES,
b y G l e n n B . C a n n e r a n d J a m e s T. F e r g u s . O c t o b e r 1 9 8 7 .
2 6 pp.
1 5 5 . THE FUNDING OF PRIVATE PENSION PLANS, b y M a r k J.
W a r s h a w s k y . N o v e m b e r 1987. 25 pp.
1 5 6 . INTERNATIONAL TRENDS FOR U . S . BANKS AND BANKING
MARKETS, b y J a m e s V. H o u p t . M a y 1 9 8 8 . 4 7 p p .
1 5 7 . M 2 PER U N I T OF POTENTIAL G N P AS AN ANCHOR FOR
THE PRICE LEVEL, b y J e f f r e y J. H a l l m a n , R i c h a r d D .
Porter, a n d D a v i d H . S m a l l . A p r i l 1 9 8 9 . 2 8 p p .
1 5 8 . THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIREMENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE
PRODUCTS, b y M a r k J. W a r s h a w s k y w i t h t h e a s s i s t a n c e o f
D i e t r i c h Earnhart. S e p t e m b e r 1 9 8 9 . 2 3 p p .
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 D o n a l d S a v a g e . February 1 9 9 0 . 12 pp.
1 6 0 . BANKING MARKETS AND THE USE OF FINANCIAL SERVICES BY SMALL AND MEDIUM-SIZED BUSINESSES, b y
Gregory E. Elliehausen and John D . W o l k e n . S e p t e m b e r
1 9 9 0 . 3 5 pp.
1 6 1 . A REVIEW OF CORPORATE RESTRUCTURING ACTIVITY,
1 9 8 0 - 9 0 , by Margaret Hastings Pickering. M a y 1991.
21pp.
1 6 2 . EVIDENCE ON THE SIZE OF BANKING MARKETS FROM
MORTGAGE LOAN RATES IN TWENTY CITIES, b y S t e p h e n
A . R h o a d e s . F e b r u a r y 1 9 9 2 . 11 p p .
1 6 3 . CLEARANCE AND SETTLEMENT IN U . S . SECURITIES MARKETS, b y Patrick P a r k i n s o n , A d a m G i l b e r t , E m i l y G o l l o b ,
Lauren Hargraves, Richard M e a d , Jeff Stehm, and Mary
A n n Taylor. M a r c h 1 9 9 2 . 3 7 p p .
1 6 4 . THE 1 9 8 9 - 9 2 CREDIT CRUNCH FOR REAL ESTATE, b y
J a m e s T. F e r g u s a n d J o h n L . G o o d m a n , Jr. J u l y 1 9 9 3 .
2 0 pp.
1 6 5 . THE DEMAND FOR TRADE CREDIT: A N INVESTIGATION OF
MOTIVES FOR TRADE CREDIT USE BY SMALL BUSINESSES,
b y Gregory E. Elliehausen and John D. Wolken. Septemb e r 1 9 9 3 . 18 p p .
1 6 6 . THE ECONOMICS OF THE PRIVATE PLACEMENT MARKET,
b y Mark Carey, Stephen Prowse, John Rea, and Gregory
U d e l l . January 1 9 9 4 . I l l p p .
REPRINTS
A limited
One reprint
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OF
number
BULLETIN
of reprints
of an article
ARTICLES
of B u l l e t i n articles
will be sent on request
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to
available.
Publications
A78
Maps of the Federal Reserve System
LEGEND
Both pages
• Federal Reserve Bank city
• Board of Governors of the Federal
Reserve System, Washington, D.C.
Facing page
• Federal Reserve Branch city
— Branch boundary
NOTE
The Federal Reserve officially identifies Districts
by number and Reserve Bank city (shown on both
pages) and by letter (shown on the facing page).
In the 12th District, the Seattle Branch serves
Alaska, and the San Francisco Bank serves Hawaii.
The System serves commonwealths and territories as follows: the New York Bank serves the
Commonwealth of Puerto Rico and the U.S. Virgin
Islands; the San Francisco Bank serves American
Samoa, Guam, and the Commonwealth of the
Northern Mariana Islands. The Board of Governors
revised the branch boundaries of the System most
recently in December 1991.
A79
2-B
1-A
5-E
4-D
3-C
Baltimore
Pittsburgh
/
N
H
M I
A
Buffalo
/
C
T
•
Charlotte
•Cincinnati
^
NJ
NY
N E W YORK
BOSTON
6-F
PHILADELPHIA
7-G
• Nashville
™_RV
Birmingham,
k\m
L
A
8-H
W
I
/
M
S
G
A
%
< 7 Louisville
Detroit •
\J TN
—
ILB
I
N
J
New Orleans
M
O
•
Ml
1
A
- v - A — ^
'
Jacksonville
m
RICHMOND
CLEVELAND
• Memphis
S
Littl? > M
Rock \
„
Miami
#
ATLANTA
9-1
ST. LOUIS
CHICAGO
M
T
1N
D
1
• Helt:na
M
N
M
I
•
I SD
W
I
MINNEAPOLIS
12-L
10-J
/C
O
—
Omaha •
•
Denver
N
M
M
O
/
ALASKA
•
/•
Seattle
•
p~
^ - w —
Portland
Oklahoma• City
O
R
C
C
A
KANSAS CITY
^ ^ ^ /
N i
V
U
T
11-K
•
A
/
Salt iSke City
A
Z
• Los Angeles
HAWAII
SAN FRANCISCO
A80
Federal Reserve Banks, Branches,
and Offices
FEDERAL RESERVE B A N K
branch, or facility
Zip
Chairman
Deputy Chairman
President
First Vice President
BOSTON*
02106
Jerome H. Grossman
Warren B. Rudman
Richard F. Syron
Cathy E. Minehan
NEW YORK*
10045
Maurice R. Greenberg
David A. Hamburg
Joseph J. Castiglia
Vice President
in charge of branch
William J. McDonough
James H. Oltman
Buffalo
14240
James O. Aston
PHILADELPHIA
19105
James M. Mead
Donald J. Kennedy
Edward G. Boehne
William H. Stone, Jr.
CLEVELAND*
44101
Jerry L. Jordan
Sandra Pianalto
Cincinnati
Pittsburgh
45201
15230
A. William Reynolds
G. Watts Humphrey, Jr.
John N. Taylor, Jr.
Robert P. Bozzone
RICHMOND*
23219
Henry J. Faison
Claudine B. Malone
Rebecca Hahn Windsor
Harold D. Kingsmore
J. Alfred Broaddus, Jr.
Jimmie R. Monhollon
Leo Benatar
Hugh M. Brown
Shelton E. Allred
Samuel H. Vickers
Dorothy C. Weaver
Paula Lovell
Jo Ann Slaydon
Robert P. Forrestal
Jack Guynn
Richard G. Cline
Robert M. Healey
J. Michael Moore
Silas Keehn
William C. Conrad
Robert H. Quenon
John F. McDonnell
Robert D. Nabholz, Jr.
Laura M. Douglas
Sidney Wilson, Jr.
Thomas C. Melzer
James R. Bowen
Gerald A. Rauenhorst
Jean D. Kinsey
Lane Basso
Gary H. Stern
Colleen K. Strand
Burton A. Dole, Jr.
Herman Cain
Barbara B. Grogan
Ernest L. Holloway
Sheila Griffin
Thomas M. Hoenig
Henry R. Czerwinski
Cece Smith
Roger R. Hemminghaus
Alvin T. Johnson
Judy Ley Allen
Erich Wendl
Robert D. McTeer, Jr.
Tony J. Salvaggio
James A. Vohs
Judith M. Runstad
Anita E. Landecker
William A. Hilliard
Gerald R. Sherratt
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
N e w Orleans
30303
35283
32231
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. LOUIS
63166
Little Rock
Louisville
Memphis
72203
40232
38101
MINNEAPOLIS
55480
Helena
K A N S A S CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
59601
64198
80217
73125
68102
75201
79999
77252
78295
S A N FRANCISCO
94120
Los Angeles
Portland
Salt Lake City
Seattle
90051
97208
84125
98124
Charles A. Cerino 1
Harold J. Swart 1
Ronald B. Duncan 1
Walter A. Varvel 1
John G. Stoides 1
Donald E. Nelson 1
FredR. Herr 1
James D. Hawkins 1
James T. Curry III
Melvyn K. Purcell
Robert J. Musso
Roby L. Sloan 1
Karl W. Ashman
Howard Wells
John P. Baumgartner
John D. Johnson
Kent M. Scott
David J. France
Harold L. Shewmaker
Sammie C . C l a y
Robert Smith, III 1
Thomas H. Robertson
John F. Moore 1
E. Ronald Liggett 1
Andrea P. Wolcott
Gordon Werkema 1
*Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; East Rutherford, 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.
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) 482-1986. 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
Publications of Interest
FEDERAL RESERVE REGULATORY SERVICE
To promote public understanding of its regulatory
functions, the Board publishes the Federal Reserve
Regulatory Service, a four-volume loose-leaf service
containing all Board regulations as well as 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 monthly, and each contains
citation indexes and a subject index.
of marginable OTC stocks and its list of foreign
margin stocks.
The Consumer and Community Affairs Handbook
contains Regulations B, C, E, M, Z, AA, BB, and DD,
and associated materials.
The Payment System Handbook deals with expedited funds availability, check collection, wire transfers, and risk-reduction policy. It includes Regulations CC, J, and EE, related statutes and commentaries, and policy statements on risk reduction in the
payment system.
For domestic subscribers, the annual rate is $200
for the Federal Reserve Regulatory Service and $75
for each Handbook. For subscribers outside the
The Monetary Policy and Reserve Requirements United States, the price including additional air mail
costs is $250 for the Service and $90 for each HandHandbook contains Regulations A, D, and Q, plus
book. All subscription requests must be accompanied
related materials.
by
The Securities Credit Transactions Handbook con- a check or money order payable to the Board of
Governors of the Federal Reserve System. Orders
tains Regulations G, T, U, and X, dealing with extenshould be addressed to Publications Services, mail
sions of credit for the purchase of securities, together
stop 127, Board of Governors of the Federal Reserve
with related statutes, Board interpretations, rulings,
System, Washington, DC 20551.
and staff opinions. Also included are the Board's list
GUIDE TO THE FLOW OF FUNDS ACCOUNTS
A recent Federal Reserve publication, Guide to the
Flow of Funds Accounts, explains in detail how the
U.S. financial flow accounts are prepared. The
accounts, which are compiled by the Division of
Research and Statistics, are published in the Board's
quarterly Z.l statistical release, "Flow of Funds
Accounts, Flows and Outstandings." The Guide
updates and replaces Introduction to Flow of Funds,
published in 1980.
The 670-page Guide begins with an explanation of
the organization and uses of the flow of funds
accounts and their relationship to the national income
and product accounts prepared by the U.S. Department of Commerce. Also discussed are the individual
data series that make up the accounts and such proce-
dures as seasonal adjustment, extrapolation, and
interpolation.
The balance of the Guide contains explanatory
tables corresponding to the tables of financial flows
data that appeared in the September 1992 Z.l release.
These tables give, for each data series, the source of
the data or the methods of calculation, along with
annual data for 1991 that were published in the
September 1992 release.
Guide to the Flow of Funds Accounts is available
for $8.50 per copy from Publications Services, Board
of Governors of the Federal Reserve System, Washington, DC 20551. Orders must include a check or
money order, in U.S. dollars, made payable to the
Board of Governors of the Federal Reserve System.
Publications of Interest
FEDERAL RESERVE CONSUMER CREDIT PUBLICATIONS
The Federal Reserve Board publishes a series of
pamphlets covering individual credit laws and topics,
as pictured below. The series includes such subjects
as how the Equal Credit Opportunity Act protects
women against discrimination in their credit dealings,
how to use a credit card, and how to resolve a billing
error.
Three booklets on the mortgage process are also
available: A Consumer's Guide to Mortgage Lock-Ins,
A Consumer's Guide to Mortgage Refinancings, and
A Consumer's Guide to Mortgage Settlement Costs.
These booklets were prepared in conjunction with the
Federal Home Loan Bank Board and in consultation
with other federal agencies and trade and consumer
groups.
The Board also publishes the Consumer Handbook
Copies of consumer publications are available free
to Credit Protection Laws, a complete guide to conof charge from Publications Services, mail stop 127,
sumer credit protections. This forty-four-page booklet
Board of Governors of the Federal Reserve System,
explains how to shop and obtain credit, how to mainWashington, DC 20551. Multiple copies for classtain a good credit rating, and how to dispute unfair
room use are also available free of charge.
credit transactions.
A suid« to
A Consumer's
Guide to
Mortgage
Lock-Ins
Business
Credit
(or Women,
Minorities, and
Small Businesses
@FedFRASER