Full text of Federal Reserve Bulletin : April 1998
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VOLUME 84 J NUMBER 4 J APRIL 1998
FEDERAL RESERVE
BULLETIN
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D.C.
Table of Contents
241 RECENT DEVELOPMENTS IN HOME EQUITY
LENDING
The equity that has accumulated in homes is one
of the largest components of U.S. household
wealth. In recent years, many homeowners have
borrowed large amounts against that equity,
frequently to finance new consumption expenditures or pay down outstanding consumer debt.
In view of the growing importance of home
equity credit in household finances, the Federal
Reserve has for a number of years participated
in nationwide surveys of the use of home equity
loans. This article presents findings from a 1997
survey and from other sources of information on
home equity lending.
252 STAFF STUDY SUMMARY
The cost of government regulation for banks has
been widely discussed, but relatively few studies
of those costs have been conducted—and those
few differ widely in quality and content. In The
Cost of Bank Regulation: A Review of the Evidence, the author evaluates the evidence from
available empirical studies and suggests what
can reasonably be concluded about the effects of
regulation on banks' costs.
254 INDUSTRIAL PRODUCTION AND CAPACITY
UTILIZATION FOR FEBRUARY 1998
Industrial production was unchanged in February, at 128.1 percent of its 1992 average, after a
revised 0.1 percent rise in January. The rate of
industrial capacity utilization decreased 0.3 percentage point, to 82.7 percent.
257 STATEMENTS TO THE CONGRESS
Alan Greenspan, Chairman, Board of Governors, discusses the recent Asian financial crisis
and says that we do not fully understand the new
high tech international financial system and that
we need to update and modify our institutions
and practices to reduce the risks inherent in the
new regime while confronting the current crisis
with the institutions and techniques we have;
accordingly, he fully backs the Administration's
request to augment the financial resources of the
International Monetary Fund, before the Senate
Committee on Foreign Relations, February 12,
1998.
262 Chairman Greenspan presents the Federal Reserve's semiannual report on economic conditions and the conduct of monetary policy and
says that the U.S. economy delivered another
exemplary performance in 1997, with expansion
of real gross domestic product at close to 4 percent and a reduction in the unemployment rate
to 4% percent, its lowest sustained level since
the late 1960s; with regard to the outlook for
1998, a key question going forward is whether
the restraint building from the turmoil in Asia
will be sufficient to check inflationary tendencies that might otherwise result from the strength
of domestic spending and tightening labor markets and that the range of intelligence gathering
for the Federal Open Market Committee in the
weeks ahead must be wide and especially inclusive of international developments, before the
Subcommittee on Domestic and International
Monetary Policy of the House Committee on
Banking and Financial Services, February 24,
1998. (Chairman Greenspan presented identical
testimony before the Senate Committee on
Banking, Housing, and Urban Affairs, February 25, 1998.)
268 ANNOUNCEMENTS
Meeting of the Consumer Advisory Council.
Adjustment of the amount of mortgage loans
that triggers additional disclosure requirements.
Proposal to amend Regulation C to modify the
Loan Application Register to prepare for the
Year 2000 data systems conversion; proposal for
possible streamlining and reform of the Truth
in Lending Act and the Real Estate Settlement
Procedures Act for home-secured loans.
Publication by the Basle Committee of a paper
on internal control systems.
Issuance for public comment of documents on
the supervision of financial conglomerates by
the Basle Committee.
Revisions to the money stock data.
273 MINUTES OF THE FEDERAL OPEN
MARKET COMMITTEE MEETING HELD ON
DECEMBER 16, 1997
At its meeting on December 16, 1997, the Committee adopted a directive that called for maintaining conditions in reserve markets consistent
with an unchanged federal funds rate of about
5!/2 percent. The members also agreed that a
slightly higher or a slightly lower federal funds
rate might be acceptable during the intermeeting period.
A3 GUIDE TO TABULAR PRESENTATION
A4 Domestic Financial Statistics
A42 Domestic Nonfinancial Statistics
A50 International Statistics
A63 GUIDE TO STATISTICAL RELEASES AND
SPECIAL TABLES
A64 INDEX TO STATISTICAL TABLES
A66 BOARD OF GOVERNORS AND STAFF
A68 FEDERAL OPEN MARKET COMMITTEE
AND STAFF; ADVISORY COUNCILS
279 LEGAL DEVELOPMENTS
Various bank holding company, bank service
corporation, and bank merger orders; and pending cases.
A70 FEDERAL RESERVE BOARD PUBLICATIONS
A72 MAPS OF THE FEDERAL RESERVE SYSTEM
Al FINANCIAL AND BUSINESS STATISTICS
These tables reflect data available as of
February 25, 1998
A74 FEDERAL RESERVE BANKS, BRANCHES,
AND OFFICES
PUBLICATIONS COMMITTEE
Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood • Donald L. Kohn
• J. Virgil Mattingly, Jr. • Michael J. Prell • Richard Spillenkothen U Edwin M. Truman
The Federal Resen1? Bulletin is issued monthly under the direction of the staff publications committee. This commiuce is responsible for opinions expressed
except in official statements and signed articles. Il is assisted by the Economic Editing Section headed by S. Ellen Dykes, the Multimedia Technologies Center
under the direction ol Christine S. Griffith, and Publications Services supervised by Linda C. Kyles.
Recent Developments in Home Equity Lending
Glenn B. Canner, Thomas A. Durkin, and Charles A.
Luckett, of the Board's Division of Research and
Statistics, prepared this article.
The equity that has accumulated in homes is one of
the largest components of U.S. household wealth. But
unlike many other types of assets, home equity is not
highly liquid—it cannot, for instance, be readily used
to purchase goods or services or to repay debt. Home
equity is, however, a widely accepted form of collateral for credit, and in recent years, homeowners have
borrowed large amounts against the equity in their
homes.
Home equity borrowing is frequently used as a
substitute for consumer credit, either to finance new
consumption expenditures or pay down outstanding
consumer debt. This substitution generally lowers the
interest expense of carrying debt and may further
reduce monthly debt service payments in the short
run by lengthening Joan maturities. Of course, by
replacing what is often unsecured debt with homesecured debt, borrowers become exposed to the risk
of more severe consequences in the event of some
financial setback that might impair their ability to
service their debts.
In view of the growing importance of home equity
credit in household finances, the Federal Reserve has
for a number of years closely followed developments
in the home equity lending market. The Federal
Reserve obtains information from monthly and quarterly reports from banks and other lending institutions, and it has participated in several nationwide
surveys of household finances, including some that
focus on the use of home equity loans.1
1. See Thomas A. Durkin and Gregory E. Elliehausen, 1977 Consumer Credit Survey (Board of Governors of the Federal Reserve
System, 1978); Robert B. Avery, Gregory E. Elliehausen, Glenn B.
Canner, and Thomas A. Guslafson, "Survey of Consumer Finances,
1983," Federal Reserve Bulletin, vol. 70 (September 1984), pp. 67992; Glenn B. Canner, James T. Fergus, and Charles A. Luckett,
"Home Equity Lines of Credit," Federal Reserve Bulletin, vol. 74
(June 1988), pp. 361-72; Glenn B. Canner, Charles A. Luckett, and
Thomas A. Durkin. "Home Equity Lending," Federal Reserve Bulletin, vol. 75 (May 1989), pp. 333^44; Glenn B. Canner, Thomas A.
Durkin, and Charles A. Luckett, "Home Equity Lending: Evidence
from Recent Surveys," Federal Reserve Bulletin, vol. 80 (July 1994),
pp. 571-83.
Most recently, to learn more about the current
status of home equity lending, the Federal Reserve
participated in the May through October 1997 Surveys of Consumers, a monthly canvass conducted by
the Survey Research Center of the University of
Michigan (for further details on the surveys, see the
appendix). This article presents findings from those
surveys and from other sources of information on
home equity lending.
Home equity credit is only one way homeowners can
convert their home equity (which is the difference
between the home's market value and its outstanding
mortgage debt) into spendable funds. Homeowners
may sell their homes and purchase less expensive
property or become renters. Alternatively, a homeowner may refinance an existing mortgage and borrow more than is required to pay off the old loan plus
closing costs.2 The availability of these alternatives
greatly influences the home equity credit market.
Refinancings, which are apt to occur in large volume
when interest rates fall, particularly affect home
equity lending because homeowners often pay off
other debts, including home equity loans, when they
refinance an existing purchase-money mortgage.3
Home equity credit typically takes either of two
forms. One, referred to here as a "traditional home
equity loan," is a closed-end loan extended for a
specified length of time and generally requires repayment of interest and principal in equal monthly
installments. Such loans typically are second mortgages. Interest rates on these loans are ordinarily
fixed for the life of the loan. The second form, a
2. In recent years, another option, the so-called reverse mortgage,
has become available. These mortgages allow homeowners with
equity in their homes to take out mortgages that pay the homeowner,
typically a retired person, a monthly amount without requiring immediate repayment. Repayment occurs at a specified time in the future,
ordinarily when the house is sold.
3. See Glenn B. Canner, Thomas A. Durkin, and Charles A.
Luckett, "Mortgage Refinancing," Federal Reserve Bulletin, vol. 76
(August 1990), pp. 604-12; and Joseph Asher, "TJie Push is on
for Home Equity Business," ABA Banking Journal (April 1995),
pp. 56-59.
242
Federal Reserve Bulletin 1 I April 1998
"home equity line of credit," is a revolving account
that permits borrowing from time to time at the
account holder's discretion up to the amount of the
credit line. Home equity lines of credit typically have
more flexible repayment schedules than traditional
home equity loans, and the interest rates on most of
these loans vary with changes in an index rate, such
as the prime rate.4 The majority of credit lines are
also of second-mortgage status, but they would be
first liens for homeowners who had no other mortgage debt outstanding when the lines were established. The survey results indicate that the users of
these two distinct types of home equity products
themselves differ in measurable ways.
At the end of 1997, the outstanding home equity
debt of U.S. homeowners was an estimated $420 billion, an amount that is fully one-third the size of
nonmortgage consumer debt. Home equity lenders
have been expanding their product offerings and
changing underwriting standards as they have gained
experience with the market. Lenders have continued
to promote this product aggressively by waiving closing costs and other fees, offering low introductory
interest rates, and increasing the acceptable limits on
loan-to-value ratios.
H i
>! I ' l . V i ' i S
> >l
< ': ' ] \ ' /••, , ; v / y
/ , ,_; \ •:
Although households have used home equity loans
for many years, their appeal for homeowners was
heightened by the Tax Reform Act of 1986, which
mandated the phaseout of federal income tax deductions for interest paid on nonmortgage consumer
debt. With this change in tax law, mortgage debt (on
which the interest remained tax deductible) became
more attractive to consumers for funding expenditures that previously were financed through auto
loans, credit cards, or personal cash loans.
The favorable tax treatment of debt secured by
homes, however, is only one reason for the popularity
of home equity loans (table 1). Consumers also frequently cite the relatively low interest rates on home
equity loans compared with most other forms of
consumer credit as another important advantage.
For some homeowners, particularly those who
encounter significant disruptions in income (for
4. Industry surveys tind that well over 90 percent of home equity
lines of credit have variable rates, while the rates on only a small
proportion of traditional home equity loans are variable. See Richard F. Demong and John H. Lindgren, Jr., "Home Equity Lending:
Survey Reveals Bright Picture," Journal of Retail. Bunking, vol. 17
(Spring 1995). pp. 37^)8.
••['
111'Mil.1 a | l l i ! \
. o l Midi
)1
LlL'l
\ l\[K"
I'lL'llii )1-.,'!'-.
•virilil O U T cllu'i
I ' l 111:1 [ I ._* i . ' l j l l i l 1 ,
Advantage
Low interest rale
Easy In get
Tax advantage
Convenient to use'
Can defer repayment of principal . .
Other J
Olill!1
i>|>>'>
L'lVtill,
I'1'1.1
Line ol
credit
Traditional
loan
.15
20
38
4.1
4
14
49
12
40
1
22
NOTE. Data have been weighted to ensure the representativeness of the
sample. Percentages sum to more than !00 percent because respondents were
allowed to cite up to two advantages lor each type of credit.
* Less than 0.5 percent.
1. Immediate access lo funds and other responses indicating that convenience
was an advantage.
2. Ability to borrow a large amount, absence of closing costs, ability to
consolidate debts, and miscellaneous other responses
SOURCE. Surveys of Consumers, 1997. Here and in the following tables,
Sun'eys of Consumers refers to the monthly series by thai name conducted by
the Survey Research Center ol the University of Michigan See text appendix
for details of the survey.
example, job loss) or large and perhaps unexpected
claims on their income (for example, large medical
expenses), drawing upon the equity in their homes
may be the only means available to obtain needed
funds. Access to a home equity loan (a secured debt)
may be particularly important for such households if
they have had difficulty meeting loan obligations in
the past, because their ability to obtain other (unsecured) types of credit is likely to be severely limited.
Before the mid-1980s, nearly all home equity borrowing was of the traditional type. Since then, home
equity lines of credit have grown substantially in
popularity. Although relatively attractive interest
rales and tax advantages characterize both types of
loan, the ability to draw money as needed has proved
to be a particularly attractive feature of home equity
lines of credit.
Surveys of households provide an opportunity to
trace the extent of home equity borrowing over time.
Surveys sponsored by the Federal Reserve and others
indicate that about 5 percent of homeowners had
home equity debt in 1977 (table 2). By 1983, the
proportion had risen to 7 percent. Following the 1986
tax changes, lenders began to promote home equity
lending aggressively and greatly expanded the availability of such credit. By the second half of 1988, the
proportion of homeowners with home equity loans
had risen substantially, to 11 percent, and was about
equally divided between home equity lines of credit
and traditional home equity loans.
The proportion of homeowners with home equity
loans continued to grow after 1988, reaching 1.3 percent in 1993-94. The 1997 survey indicated little
further change in this proportion, but because of
increases in both the rate of homeownership and the
Recent Developments in Home Equity Lending
•j c• 11!)I\
Type
Traditional loan
L [\-i.
1977
1983
1988
1993-94
1997
5
7
11
13
13
n.a.
n.a.
n.a.
n.a.
6
5
8
5
8
5
NOTE. Data have been weighted to ensure the representativeness of the
sample. Between 1988 (the first year for which the data are available) and 1997,
fewer than '/; percent of homeowners had both types of home equity credit.
n.a. Not available.
SOURCE. 1977 Consumer Credit Survey; 1983 Survey of Consumer Finances;
Surveys of Consumers, 1988, 1993-94, and 1997.
number of households, the number of households
with a home equity loan increased about 10 percent
from 1993-94 to 1997.
In contrast to the pattern of account holding
observed in 1988, both the 1993-94 and 1997 surveys found that home equity lines of credit were
more prevalent (8 percent of homeowners had them
in 1997) than traditional home equity loans (5 percent
of homeowners). Taken together, roughly 9 million
households had home equity loans in 1997.
The 1990s have seen several periods of extensive
refinancing activity, particularly in 1992 and 1993.
During those years, when interest rates on home
mortgages fell substantially, millions of homeowners
took advantage of the lower rates; in the process of
refinancing their first mortgage, some rolled the outstanding balances on their home equity loans into
the new loan. As a consequence, the proportions of
homeowners with home equity loans found in the
1993-94 and 1997 surveys were likely smaller than
they would have been otherwise.
A second factor that has likely held down the
proportion of households with home equity loans in
recent years has been an increase in the share of
home purchase loans with high loan-to-value ratios
(LTVs)—loans in which the amount borrowed is
more than 90 percent of the appraised value of the
243
property. Between 1989 and 1996, the proportion of
conventional mortgages with high LTVs more than
tripled, from 7 percent to 25 percent.5 An increasing
incidence of home purchase loans with high LTVs
means relatively more homeowners have little home
equity available to support home equity borrowing.
Soi:Rci.s
or
HOML
EQ(
IIY
LOANS
Many types of financial institutions extend home
equity loans. Before the mid-1970s, home equity
loans were most frequently supplied by consumer
finance companies, second mortgage companies, and
individuals. Depository institutions—commercial
banks, savings banks, savings and loan associations,
and credit unions—were the source of only about
two-fifths of these loans.6 Today, commercial banks
are the primary source of home equity loans, although
the other types of depositories as well as finance
companies have significant market shares (table 3).
Household surveys indicate some specialization
among lenders in the type of home equity credit they
supply. Consumer finance companies continue to be
a significant source of traditional home equity loans
while playing a much smaller role in the market for
home equity lines of credit. Survey evidence indicates that finance companies account for about
25 percent of traditional home equity loans but only
about 7 percent of the home equity line of credit
market. More than 90 percent of homeowners with
home equity lines of credit obtained them from
depository institutions, most frequently commercial
banks.
5. Terms on Conventional Home Mortgages, monthly release,
table 1 (Federal Housing Finance Board).
6. See Durkin and Elliehausen, "1977 Consumer Credit Survey,"
p. 92.
WS 97
llulluPercent
1993-94
1988
1997
Source
Lines or credit
Commercial banks
Savings institutions'
Credit unions
Other creditors!
Total
Traditional lotuis
54
31
11
4
33
27
8
32
100
100
NOIE. Percentages are based on numbers of loans or lines of credit. Data
have been weighted to ensure the representativeness of ihe sample. In this and
subsequent tables, components may not sum to totals because of rounding.
I. Savings banks and savings and loan associations.
Lines of credit
Traditional loans
Lines of credit
Traditional loans
60
21
13
7
29
30
11
29
61
16
16
7
44
20
13
24
100
100
100
100
2. Finance and loan companies, brokerage firms, mortgage companies, and
individuals.
SOURCE. Surveys of Consumers, 1988, 1993-94, and 1997.
244
Federal Reserve Bulletin • April 1998
Several factors help explain the specialization
among lending institutions. The larger role of finance
companies in the traditional home equity loan market may in part reflect long-time customer relationships as well as limits on the services they provide.
Because finance companies typically do not offer
deposit services (except, in some cases, through affiliated depository institutions), they are less well suited
to offering credit accounts that the borrower can draw
down by check, a feature of virtually all home equity
lines of credit. Also, finance companies tend to serve
a somewhat younger clientele with relatively lower
incomes and substantially smaller amounts of home
equity.7 Lenders often prefer to exercise tighter control over the credit use of such customers by granting
them loans of specified amounts with predetermined
payment schedules.
Although commercial banks are the predominant
source of home equity lines of credit, not all banks
offer this type of loan. As of September 1997, 53 percent of all U.S. commercial banks held outstanding
balances on home equity lines of credit (table 4). A
much larger proportion, 81 percent, held traditional
home equity loans.
Home equity lines of credit are more complex to
administer than are traditional home equity loans;
consequently, large banks are more likely than
smaller banks to offer lines of credit. The vast majority of commercial banks with assets exceeding
$250 million offered home equity lines of credit in
1997, whereas only 28 percent of those with assets of
less than $50 million did so. The pattern is different
7. According to the 1997 survey, the median family income of
home equity borrowers at finance companies was $51,000, compared
with $55,000 at depository institutions. The median home equity of
finance company borrowers was $36,000, compared with $68,000 for
borrowers from depository institutions (data not shown in tables).
Assets of banks
(millions of dollars)
Lines nf credit
Traditional loans
Less lhan SO
50-99
100-249
250-499
S00-999
1 0(10 nr more
28
55
74
S.I
89
85
66
8S
94
93
97
All banks
53
81
MfiMo
Lines of credit in use (percrail)1 . . .
51
1 Calculated by summing Ihe outstanding balances under home equity lines
of credit and dividing by that sum plus the amount of unused lines of credit
available to account holders.
Not applicable.
SOURCE. Reports of Condition and Income, September 30, 1997.
for traditional home equity loans, with most banks at
all asset levels offering such loans.
Si
\
As a group, homeowners with home equity credit
have economic and demographic characteristics that
set them apart from other homeowners. In general,
home equity borrowers are relatively sophisticated
and financially well off, although considerable diversity is found among them (see box "Consumer
Knowledge and Satisfaction Regarding Home Equity
Credit"). Moreover, important differences exist
between holders of credit lines and users of traditional home equity loans. Differences among holders
of each product—in their financial and demographic
characteristics, in their uses of borrowed funds, and
in their perceptions of the advantages of the two
products—suggest that borrowers may not consider
them to be close substitutes.
Homeowners, who account for nearly two-thirds of
all households, vary widely in their demographic
characteristics and financial circumstances. Homeowners with no mortgage debt tend to be older individuals, in many cases retired; and, although they
typically have relatively large amounts of home
equity, they also tend to have lower incomes
(table 5).
Households who have a home equity line of credit
typically own relatively expensive homes, have
higher incomes, and have substantially more equity
in their homes than most other homeowners, including those who have a traditional home equity loan. In
1997, median household income was $60,000 for
homeowners with home equity credit lines, $50,000
for those with traditional home equity loans, and
$47,500 for those with first mortgages only.8 The
median amount of home equity among credit line
holders was $76,000, compared with only $35,000
for those with traditional home equity loans and
$43,000 for those with only a first mortgage. Those
8. Surveys of lending institutions also reveal substantial differences
between the income profiles of homeowners with home equity credit
lines and those with traditional home equity loans. John H. Lindgren, Jr., and Richard F. Demong, Home Equity Loan Study: An
Analysis of Ihe Year-End 1996 Survey (Consumer Bankers Association, 1997); and Demong and Lindgren, "Home Equity Lending,"
pp. 42^43.
Recent Developments in Home Equity Lending
245
Consumer Knowledge and Satisfaction Regarding Home Equity Credit
The 1997 survey repeated a series of questions from earlier
surveys to update available information about consumers'
understanding of their home equity loans, their searches for
information, and their views of some associated consumer
protections. For comparison, the survey also asked similar
questions of users of other forms of consumer installment
credit.
Initial questions focused on the homeowner's understanding of the creditor's security interest in the home. As in the
1993-94 survey, almost all users of home equity credit
surveyed in 1997 indicated that the lender explained, or that
they already had known, that their home served as security
for the loan (table). Most consumers also said they knew of,
or recalled the lender's having informed them of, their right
to cancel the transaction up to three days after the closing
date (a right that is a provision of the Truth in Lending Act).
Survey respondents cited many actions that a lender
might take if they missed payments, including sending
late-payment notices, assessing late-payment fees, working
out a revised payment schedule, contacting a collection
agency, and foreclosing on their home. When asked what
they thought the worst thing a lender could do if they
missed several payments, most respondents (85 percent, not
shown in the table) said that the lender could foreclose on
the loan. Thus, although virtually all home equity account
holders recognized that a lien had been placed on their
property, not all believed that foreclosure and loss of the
property was the most severe possible outcome, perhaps
indicating that some borrowers have substantial other
resources available to meet obligations.
Another group of questions updated survey evidence
about efforts of home equity credit account holders to
gather information before opening an account: About half
searched for information about home equity credit before
opening the account, somewhat more than the proportion of
installment credit users. Most of the information searches
involved calling or visiting one or more institutions to ask
about interest rates. Some information searchers consulted
friends, relatives, and financial advisers, and some consulted published sources. Most of the searchers said they
were able to get all the information they were looking for.
and a few more said they were able to obtain at least some
of the information they sought.1
Most surveyed holders of home equity credit accounts
specifically recalled receiving a Truth in Lending (TIL)
1. These questions were asked only of those who had obtained home
equity credit or installment credit. The survey did not address the experience
of any potential borrowers who sought home equity credit but did not obtain
it or who chose not to apply alter receiving information.
with home equity lines of credit also tend to be better
educated than other homeowners.
Further evidence of differences in demographic
and financial circumstances among homeowners can
disclosure statement, and more than 90 percent of lhai
group had saved the statement^ The proportion that recalled
having received a Truth in Lending statement was slighlly
lower for users of traditional home equity loans, although
the proportion of this group that had saved the statement, at
(
J7 percent, was slighlly higher. About 70 percent of those
who recalled having received a TIL statement reported that
it had been helpful to them in some way, but only a small
proportion said that the TIL statement had affected their
decision to use credit.
A final set of questions concerned consumer satisfaction
with their home equity or installment credit. Satisfaction
levels exceeded 90 percent for each of the types of credit.
Among the small percentage of respondents who were
dissatisfied, most complaints concerned the interest nile on
the loan.
2. Under ihe Trulh in Lending AcJ, Imilcis mi^t i:ivc tliM.k>suri.' statements to potential borrowers. l*hc siatcincnts include ir]l~oiih:iii<>n alxmt key
terms related to the lunsaction. int hiding (he annual pcrtenugc rale.
Consumer knowledge and satisfaction regarding
home equity credit and installment credit,
by type of credit, 1997
Percent
Consumer knowledge
or sui]<il<H"tui[]
Knew (ii learned there w »
lien on home
Knew or learned inert
\ui.s riylii to cancel
Searched lor information'
Obtained ihe intorniiiiion
sou t* h i J
Recalled receiving Trulh in
I.cndmy statement
S.ived Trulh in Lending
sttitcmcnl'
I-ouml Truth in Lending
statement helplul -1
Snid Truth in Lending
statement affected credit
decision '
Indicated sausliL.itioii with
account *
Traditional
Home equitv
line nl credit home eqtnls
loan
Installment
credit
94
44
95
54
33
Vn
*>h
8K
86
79
7lJ
«M
97
M
70
73
\2
2
h
•>3
N'HK. Fcicciiid^eA ate for holders oJ the indicated lype. ol ciedil. LXit.t
have been weighted to ensure ihe rq>iesenlah\eness ol ihe sample.
I Seal died lot mfiinnatuw jfrmu oilier creditors or credit terms be I ore
obtaining credit.
2. Proportion ot those who "searched lor inlonniilinn."
3. Proportion o| ihose who "recalled receiving Truth in Lending
statement."
4. Respondents who siiid ihey were "very satisfied" or "somewhat satislied" wilh account.
Sot.-RfE. Surveys o| Consumers, 1997.
be seen when homeowners with different debt status
are grouped by level of income, home equity, and
other characteristics (table 6). The relative affluence
of those with home equity lines of credit is apparent
246
5.
Federal Reserve Bulletin • April 1998
CluiracUTistic nl h o m e o w n e r s , bv debt statiiv
Homeowner
debt status
Median
Age 2
(median
years)
Education3
(median
grade
completed)
Nonwhite
and
.
Hispanic'
(percent)
38.364
54,282
27,500
47,500
67
42
12
14
10
14
76,000
65.613
60.000
49
16
4
53.909
35,000
65.284
50,000
43
14
8
79,837
60,000
49.896
40,000
49
13
12
Home equity'
(dollars)
Market value of
home (dollars)
1997 family income
(dollars)
Proportion
or homeowners
(percent)
Mean
Median
Mean
Median
Mean
38
50
104,746
126392
80,000
100,000
104,746
57,749
80.000
43.000
8
171.113
140,000
111.475
166.508
110.000
124.324
98,000
No mortgage debt
Ht« mortgage only4 ..
Home equity line
or credit
Traditional tame
equity loan
5
.
MEMO
All homeowners
100
NOTE. Data have been weighted to ensure the representativeness of the
sample.
I. Market value of home less all debts secured by home, including balances outstanding on home equity credit lines and traditional home equity loans.
from these groupings. The proportion of credit line
holders with incomes of $75,000 or more was substantially higher than that of any other group. A
similar pattern holds for accumulated home equity,
although, not surprisingly, many homeowners with
no mortgage debt have also built up significant
amounts of home equity. Levels of household income
and home equity for holders of home equity lines are
().
lltiiik-imiiiT'., ;:n>ii|v<l In ilebl siaiiK .IIKI
2. Characteristic of head of household.
3. Characteristic of respondent.
4. Excludes those who have only a home equity line of credit.
SOURCE. Surveys of Consumers, 1997.
markedly higher than they are for holders of traditional home equity loans. Only 19 percent of borrowers with traditional home equity loans have incomes
of $75,000 or more, compared with 32 percent for
holders of home equity lines; and only 10 percent of
traditional home equity borrowers have $100,000 or
more in home equity, compared with nearly 40 percent for holders of home equity lines.
ami linaiiti.il
i ihul.'U l\\
!'.'V /
Percent
Homeowners
Homeowner characteristic
All
No mortgage
debt
First mortgage
only1
Home equity line
of credit
Traditional
home equity
loan
Either type
of home
equity loan
23
32
27
11
6
12
30
31
17
10
Age of head (ytart)
\t-U
'.
16
23
20
16
26
IOO
7
9
12
18
55
24
31
24
13
8
ino
Family income (dollars)
Less than 15.000
15,000-24.999
25.000-49,999
JO.ObO-74,999
75,000-99.999
100,000 or more
Total
10
16
34
23
10
8
100
Home equits1 (dollars)
Less than 50.000
50.000-99.999
100,000 or more
Total . . .
Census region
West
North Central
Northeast
South
Total
35-44
45-54 . . .
55-64
65 or older
Total •
ioo
6
28
34
20
12
IOO
ioo
100
20
26
32
12
5
5
100
4
11
38
26
13
8
100
2
3
25
38
16
16
100
2
6
32
42
8
11
100
2
4
27
39
14
14
100
41
33
26
100
24
38
37
100
55
29
16
100
21
40
39
100
69
21
10
100
38
34
28
100
17
30
17
36
100
14
29
16
42
100
18
30
17
35
100
18
33
24
25
100
27
30
24
19
100
21
32
24
23
100
IOO
38
50
8
5
13
MEMO
Percent of all homeowners
NOTE. Data have been weighted to ensure the representativeness of the
sample.
I. Excludes (hose who have only a home equity line of credit.
2. Home equity consists of the market value of the home less all debts
secured by ihe home, including balances outstanding on equity lines of credit
and traditional home equity loans.
SOURCE. Surveys of Consumers, 1997.
Recent Developments in Home Equity1 Lending
The relatively strong financial positions of households having home equity debt and especially lines of
credit is reflected in banking industry statistics on
loan delinquency rates (data not shown in tables).
According to the American Bankers Association,
fewer than 1 percent of home equity lines of credit at
banks are typically in delinquent status, the lowest
rate for any category of loan, and the delinquency
rate on traditional home equity loans has averaged
around 1 V* percent recently, the second lowest figure
of any loan category. By comparison, about 3!/?. percent of credit card accounts and personal loans were
past due. When delinquency rates are based on dollar
amounts rather than number of loans, the rates on
home equity lines of credit and traditional home
equity loans are both around I 'A percent, still lower
than for any other type of loan. In recent ABA
reports, a bit more than 5 percent of bank credit card
debt was delinquent.
The survey data show some regional differences in
the use of home equity products: Homeowners residing in the North Central region are the most likely to
have a home equity loan, particularly a home equity
line of credit.9 This geographic distribution differs
from that in the 1993-94 survey, which found homeowners in the Northeast to be the most frequent
holders of home equity loans. Change in the regional
pattern may reflect the relatively strong growth in
home prices (and hence, equity) in the North Central
region during the period.
The median balances on home equity loans are
much larger than those on other forms of household
debt.10 Nevertheless, most holders of home equity
lines of credit owe an amount much smaller than their
available credit line—for example, about 47 percent
of those with a balance have less than 50 percent of
their credit line in use." Among credit line holders
with an outstanding balance, the mean and median
proportions of the lines in use were around 55 percent, a level somewhat lower than in 1993-94. The
lowering may be a reflection of refinancing activity in
recent years, as some long-time users of home equity
lines refinanced their outstanding balances on both
their first and second mortgages into a single new
loan.
Historically, surveys have found that the principal
uses for both types of home equity credit are
10. Median amounts owed on home equity loans are two to three
times as large as those owed on installment debls and perhaps ten
times as large as Ihe median amount owed on credit cards. See Arthur
B. Kennickell. Martha Starr-McCluer, and Annika E. Sunden, "Family Finances in the U.S.. Recent Evidence from the Survey of Consumer Finances," Federal Reserve Bulletin, vol. 83 (January 1997),
pp. 1-24.
11 In addition, industry surveys indicate that for most home equity
lines of credit the credit limit available may be increased with the
approval of the lender. See Demong and Lindgren, "Home Equity
Lending," p. 41.
7.
One important attraction of home-secured financing
is that it allows homeowners to borrow relatively
large amounts. In addition, as described below, many
homeowners with lines of credit have substantial
amounts available in the unused portions of their
lines.
Users of home equity lines of credit and traditional
home equity loans differ little in the amounts they
have borrowed (table 7). On average, credit line users
(that is, those who have an outstanding balance on
their line of credit) owe only a bit more than users
of traditional home equity loans, and the median
amounts outstanding are the same.
9. The proportion of homeowners in the South with home equity
loans may grow appreciably with recent amendments to the Texas
State Constitution that significantly broaden the opportunities to offer
traditional home equity loans in Texas. Home equity lines of credit,
however, will still be prohibited in Texas. See John Trullinger, "Texas
and Home Equity," Origination News (November 1997), pp. 4-5; and
Heather Timmons, "Wary Lenders Brace for Texas Home Equity
Flood," American Booker (January 14, 1998), p. 1.
247
S k l t l l ' . i>i ' I . T . I L
.-•:.,U
Percent except as noted
1903-94
Item
Lines
of credit
Outstwuling balance
1 dollar*}
1-9999
10 000- "M 999
25.000 ur more
Total
1997
Tnuiilional
loans
uf credil
Traditional
loans
34
38
28
100
42
40
19
100
35
35
30
100
29
4K
23
100
18,459
15.000
16.199
11.000
20.155
15,000
17.956
15.000
MEMO: Dollar balance
Percentage of credit
line in use
12
20-49
50-74
75-1 (XI .
.
36
33
14
33
23
30
58
62
53
55
. .
Mum: In use (percent)
NOTE.. Measures for lines of credit exclude accounts wiih no outstanding balance. Data have been weighted lo ensure the representativeness of the sample.
Not applicable.
SOURCE. Surveys of Consumers, 1993-94 and 1997.
248
Federal Reserve Bulletin L71 April 1998
then, climbing to an estimated 16 percent for 1996
and to just over 20 percent for 1997, lifting total
home equity debt to an estimated $420 billion at
year-end (table 9).
ILL SL'ICCICU use-, lot' h o m e
iiKIII tllllJ'- il
!'\
t \ | V '.if LTL'Jil.
1997
1993-94
Use-
Lines
of credit
Traditional
loans
Lines
of credit
Traditional
loans
Home improvement
Repayment of olhcf dehls.
Eduauion
Real estate
Auto or truck
64
45
21
12
3(1
38
68
4
8
3
69
49
19
9
37
45
61
2
10
6
Medical expenses
Business expenses
Vacation
Other1
5
28
6
1
1
1
I
10
IS
13
2
4
1
1
3
1
1iijhtci\ct's on (Imwih
Several factors suppressed the growth of home equity
credit from 1991 through 1993. l3 Stagnant real estate
values in many localities were curbing the growth of
equity in homes. As a result, fewer homeowners were
becoming qualified for home equity credit, and those
who did qualify may have been reluctant to increase
their mortgage debt because of lowered expectations
about future increases in home values. The 1990-91
recession no doubt also had a damping effect on
home equity borrowing, indirectly by contributing
to the sluggishness of home values and directly by
affecting both the propensity of households to spend
and their ability to qualify for credit.
NuTh. Data have been weighted to ensure the representativeness of the
sample. Percentages sum to more than 100 percent because respondents were
allowed to cite multiple uses for a single loan or drawdown and more than one
draw for one line of credit.
I. Includes purchase of furniture or appliance, purchase of boat or other
recreational vehicle, payment of taxes, and personal financial investments.
SOURCE. Surveys of Consumers. 1993-94 and 1997.
to finance home improvements and to repay other
debts.12 The results of the 1997 survey show a similar
pattern (table 8); but credit lines were found to have
additional uses not often found for most traditional
loans, including vehicle purchases, education, and
vacations. Both types of loan appear to be substitutes
for various types of new or outstanding consumer
credit.
A<;c,Rr.i;.-Yii-: /four
Perhaps the greatest constraint on the growth of
home equity loans, however, was the unprecedented
surges in refinancings of first mortgage debt in the
early 1990s, the first in 1992 and the second, even
larger, in 1993, when mortgage interest rates fell to
their lowest level in more than twenty years. As
noted earlier, homeowners who refinanced while
holding outstanding second-mortgage debt often
folded that debt into the new first mortgage to lock in
a low rate.
The moderation or reversal of these factors beginning in 1994 helps account for the recent resurgence
of home equity borrowing. The economy's postrecession recovery was relatively listless in its early
stages in 1992 and 1993, but it gained strength and
1.01 uv Dun
After a period of anemic growth in the early 1990s,
home equity debt began to expand again in 1994,
with an increase in aggregate outstandings of about
6 percent. The pace has quickened substantially since
12. See Canner, Durkin, and Luckett, "Home Equity Lending:
Evidence from Recent Surveys," p. 577; Lindgren and Demong,
"Home Equity Loan Study,'" p. 15-16; and 1996 Home Equity Lines
of Credit Survey Report (American Bankers Association, 1997), p. 88.
13. For a more detailed discussion of these influences, see Canner,
Durkin, and Luckett, "Home Equity Lending: Evidence from Recent
Surveys," pp. 580-82.
^ n i u s ! ; i m i i n j . L T U I I | V I ! b y u \ n a m ] «li.-,u i l m u - i j l < \ t \ | v
arid
Billions of dollars
Lines of credit
Year
1993
1994
1995
1996
1997
Traditional loans
Other sources
All lenders
Commercial
banks
Other sources
All lenders
73
76
79
85
98
37
40
44
47
55
110
116
123
132
153
49
54
61
69
76
102
104
115
146
191
151
158
176
215
267
SouRCt Reports of Condition and Income, various years; Credit Union
National Association; Federal Reserve; Moody's Investors Service; and
Bloombero L.R
Total
Commercial
banks
261
274
299
347
420
Recent Developments in Home Equity Lending
endurance over the four subsequent years. From the
end of 1993 through last year, disposable personal
income on average grew 5 percent per year, while the
national unemployment rate dropped from 6.5 percent to 4.7 percent.
Home prices have also been on the rise again in
most parts of the country. Although increases have
been moderate compared with those in some earlier
boom periods, they have helped boost the total value
of the household sector's real estate holdings roughly
20 percent over the past four years. Refinancings of
home mortgages have ebbed and surged during the
period in tandem with fluctuations in mortgage interest rates, but the peaks in activity have fallen considerably short of the 1993 volume.14
h.incritcnci' <>/ lh<- Suhprimc
Mtirkei
On the whole, then, recent macroeconomic developments have led to robust consumer spending, and
strength in the real estate market has encouraged the
use of home equity credit to finance part of that
spending. Moreover, a new element has given a sharp
boost to overall growth in home equity lending over
the past couple of years, and that is the vigorous
marketing by nonbank lenders to the "subprime"
segment of the market—homeowners with relatively
low incomes, limited equity, or tarnished credit histories. Loans in this higher-risk segment carry interest
rates several percentage points higher than those on
"A-quality" home equity loans and typically lift a
borrower's total mortgage debt to a high level relative to the value of the home. Some subprime specialists offer to lend amounts that would raise that ratio
to 125 percent, and in a few instances, even higher.15
Subprime home equity loans are commonly marketed as bill-consolidation loans, particularly as
a means to pay off credit card debt. Given their pricing, collateral, and performance characteristics—
relatively high rates of charge-off and delinquency
(chart 1)—these real-estate secured loans are more
akin to unsecured personal loans than to mainstream
home equity loans.
14. The decline in mortgage interest rates in the opening weeks of
1998, to jus! below 7 percenl for conventional thirty-year fixed-rate
loans, has spurred a surge in refinancing that may approach the earlier
peak volume.
15. Generally speaking, however, industry sources indicate that
most lenders who make so-called "125 loans" grant them only to
borrowers of strong credit standing rather than to subprime borrowers.
Such loans are higher in risk than A-quality mortgages because of the
absence of equity, but borrower characteristics are typically well
above average.
249
Most subprime lenders place heavy reliance on
securitization of their loans to fund their operations.
Through such means as third-party insurance guarantees or senior/subordinate debt structures, investors in
the securities are largely insulated from credit losses;
and the securities receive triple-A ratings, yielding
returns of only 50 to 150 basis points above Treasury
securities of comparable maturity. Ultimately, the
home equity lenders bear the bulk of the credit risk,
designed to be covered by the sizable margin between
the interest rates paid by the subprime borrowers and
the yield to the security holders.
Lower Prepayment Risk
One characteristic that has attracted investors to securities backed by home equity loans (generally
subprime loans) is that, when interest rates drop
significantly, the risk of accelerated prepayments of
the loans underlying the securities has been considered to be less than for other mortgage-backed securities.16 When rates fall, borrowers in the subprime
category are not expected to refinance so readily as
other mortgagees precisely because their marginal
credit status usually bars them from doing so at
attractive interest rates.
16. When market interest rates fall significantly, many homeowners with existing mortgages will refinance, paying off the original
loans. Under the typical "pass-through" security format, a large
volume of mortgage prepayments means that principal is returned to
investors sooner than anticipated, forcing them not only to reinvest
earlier than planned but also in a low-rate environment.
1.
1) i i l i i i i | i i L - n . . \
l a i c - . •>!
inu.hl;.>!:;il
In sccurin/L'
At commercial banks
1W2
I TO
I'TO
IWft
NOTE. Closed-end loans, typically second mortgages. The data are monthly.
SOURCE. For pools, Moody's Investors Service; for banks. American Bankers Association.
250
Federal Reserve Bulletin • April 1998
Borrower reaction to the interest rate declines during the past year seems to support this expectation. A
recent report from Standard & Poor's observed that
prepayments of securitized home equity loans have
risen only slightly when interest rates have dropped
sharply, while prepayments of other securitized mortgages have soared.17 Indeed, the principal factor
behind home equity loan prepayments was found to
be improvements in the financial positions of the
borrowers that enable them to qualify for more attractively priced loans.18
Yulmni.- in llu- S u b p n n i i : MarL.-f
The volume of subprime home equity credit cannot be estimated with much precision, in large part
because definitional distinctions among different
types of loans are not clear. With much of subprime
home equity credit funded by securitization, an approximate measure of the volume of subprime credit
can be derived from securitization volumes. But the
loan pools designated as "home equity" pools frequently contain subprime purchase-money mortgages
or refinanced loans as well; they may also mix some
higher-quality home equity loans with the subprime
paper. Conversely, not all subprime home equity
loans are securitized. These imprecisions notwithstanding, however, data from industry sources suggest that the amount of home equity credit in securitized pools was about $90 billion at the end of 1997,
much of it believed to be subprime in quality (see
box "Estimation of Aggregate Home Equity Debt").
This level represents about one-fifth of the estimated
$420 billion of aggregate home equity credit at yearend 1997.
A,"i'i:M)ix: 'I'm-: SI;RYI':)
V
or ('oxsrui i<\
To obtain information on the prevalence of home
equity accounts and their use by homeowners, the
17. "Standard Prepayment Model Doesn't Fit Home Equity Securities," National Mortgage News (November 24, 1997), p. 20.
18. Lately, however, prepayments for some pools of subprime
home equity loans have been more rapid than anticipated in underwriting assumptions. These accelerated prepayments may imply that
improvements in borrowers' financial positions have exceeded expectations or that intensified competition among lenders has enabled
some lower-quality borrowers to refinance at rales below those they
had originally obtained.
Percentage points
Survey
results
(percent)
50
30 or 70 . . . .
20 or 80 . . . .
10 or 90 . . . .
5 or 95
Size of sample
100
300
1,000
2,000
3,000
10.5
9.6
8.4
6.3
4.6
6.2
5.7
4.9
3.7
2.7
3.6
3.3
2.9
2.2
1.6
2.8
2.5
2.2
1.7
1.2
2.5
2.3
2.0
1.5
1.1
NOTE. Ninety-five percent confidence level, 1.96 standard errors.
Federal Reserve Board helped develop questions for
inclusion in the Surveys of Consumers, conducted
by the Survey Research Center of the University of
Michigan, for the period May through October 1997.
Interviewees were chosen from a cluster sample
of residential listings, and the interviews were conducted by telephone. The sample was chosen to be
broadly representative of the four major regions—
Northeast, North Central, South, and West—in proportion to their populations (residents of Alaska and
Hawaii were not included). For each telephone number drawn, an adult from the household was randomly selected as the respondent.
The survey defined a household as persons living
together, whether or not related by marriage, blood,
or adoption, or any individual living alone. The head
of the household was defined as an individual living
alone, the male of a married couple, or the adult (age
eighteen or older) in a household composed of more
than one person and only one adult. In the case of
more than one adult but no married couple, the head
of household generally was designated to be the
person most familiar with the household's finances or
the one closest to age 45.
The survey included 3,000 households. Among
the 2,098 respondents who were homeowners, 181
reported having a home equity line of credit, 102
reported having a traditional home equity loan, and
7 reported having both types. The survey data have
been weighted to be representative of the population,
thereby correcting for differences among households
in the probability of their being selected as survey
respondents. Estimates of population characteristics
derived from samples are subject to error based
on the degree to which the sample differs from the
general population. Table A.I indicates the sampling
errors for proportions derived from samples of different sizes.
•
Recent Developments in Home Equity Lending
25 I
Estimation of Aggregate Home Equity Debt
As banks and finance companies have reported more
detailed information on their home equity loans in recent
years, estimates of aggregate debt of this type have become
more accurate. Other factors, however, have introduced new
sources of imprecision into the estimates: the rapid development of securitization of home equity loans and the expanding role of mortgage companies and specialized home
equity lenders, for whom data reporting is fragmentary.
Since 1987, commercial banks have reported receivables
under home equity lines of credit on quarterly Call Reports,
and since 1991 they have reported their holdings of traditional home equity loans. Mutual savings banks also report
these data on Call Reports. Savings and loan associations
and federal savings banks report credit line receivables on
Call Reports but do not separate traditional home equity
loans from first mortgages in these reports. Finance companies report each month to the Federal Reserve on their real
estate loans, and since June 1996 they have reported residential and commercial mortgages separately. Finance companies do not distinguish between loans under lines of
credit and traditional loans, but the bulk of their home
equity receivables consists of traditional closed-end loans.
Estimates of both types of home equity debt outstanding at
credit unions are available from the Credit Union National
Association.
Debt Under Home Equity Lines of Credit
According to Call Reports, commercial banks held about
$98 billion in receivables under home equity lines at the end
of 1997 (table); savings institutions held about $18 billion,
and credit unions about $15 billion. The data for the other
holders are less precise. Information from the securities
rating firms indicates that about $12 billion of credit line
receivables resided in pools of securiiized assets (the data
on these receivables usually do not show the type of originating institution).
The estimate of $10 billion for finance companies is
based on the fact that the household survey indicates that
(1) they supplied only about 6 percent of the credit lines
surveyed, (2) they reported $58 billion of residential real
estate credit at the end of 1997, and (3) industry members
confirm that most of these receivables are closed-end loans.
Debt Under Traditional Home Equity Loans
Estimating the amount of traditional home equity debt
outstanding is somewhat more difficult: Fewer institutions
provide specific data on this type of credit, and much of the
recent growth has been among holders for whom the data
are the least precise.
The Call Reports show the levels for commercial banks
and credit unions.
Savings and loan associations and federal savings banks
do not break out traditional home equity loans from their
other residential mortgage debt. The household survey
indicated that savings institutions (including mutual savings banks) held about half as much of this type of debt
as commercial banks, which in 1997 would be about
$38 billion.
The estimate of $48 billion for finance companies is
derived from their report of $58 billion in residential mortgage debt and the estimate that $10 billion of it is in credit
lines. The estimate for pools is from the rating agencies.
An estimate of $ 10 billion is used here for miscellaneous
sources of traditional loans, including mortgage companies.
Although mortgage companies have become quite active in
this market, most of the loans they originate are securitized
and would be reflected in the estimate for pools.
The estimated $420 billion of total home equity debt
represents a 60 percent increase from the 1993 total, compared with an approximately 15 percent to 30 percent
increase implied by responses to the household survey. Half
the gain in the aggregate is accounted for by securitized
loans, a category which, as noted, contains some unknown
amount of loans that would otherwise be considered original or refinanced purchase-money mortgages. In the household survey, these loans were excluded from the detailed
questions that focused on traditional home equity loans
(typically second mortgages) and home equity lines of
credit.
Estimates of aggregate home equity debt outstanding, by source, 1997
Billions of dollars
Type of home equity debt
Total
Commercial
hanks
Savings
institutions'
Credit
unions
Finance
companies
Setiiriti/.ed
pmils
Ulhcr-
All sources
98
76
18
18
15
15
10
48
12
80
10
267
174
56
30
58
92
10
420
1. Savings and loan associations, federal savings banks, and mutual
savings banks.
2. Mortgage bankers, individuals, and any other source mentioned by
respondents.
* Amount is negligible.
151
SOURCE. Surveys of Consumers, 1W7, Reports of Condition and tncmtie.
December 31, 1997; Credit Union National Association; Moral Reserve;
Moody's Investors Service; and Bloomberg L.P.
252
Staff Studies
The staff members of the Board of Governors of the
Federal Reserve System and of the Federal Reserve
Banks undertake studies that cover a wide range of
economic and financial subjects. From time to time
the studies that are of general interest are published
in the Staff Studies series and summarized in the
Federal Reserve Bulletin. The analyses and conclusions set forth are those of the authors and do not
necessarily indicate concurrence by the Board of
Governors, by the Federal Reserve Banks, or by
members of their staffs.
Single copies of the full text of each study are
available without charge. The titles available are
shown under "Staff Studies" in the list of Federal
Reserve Board publications at the back of each
Bulletin.
STUDY SUMMARY
THE COST OF BANK REGULATION: A REVIEW OF THE EVIDENCE
Gregory Elliehausen
The cost of government regulation has become a
political issue in recent years, and the cost is no less
controversial for banks than for other types of businesses. The controversy has prompted several studies
of regulatory costs in banking. This paper evaluates
the evidence from those studies, which vary widely
in quality and content, and suggests what can reasonably be concluded about the effects of regulation
on banks' costs. It begins with a discussion of the
sources and types of regulatory costs. It then discusses the requirements of the various methods of
determining costs and evaluates published empirical
studies in light of those requirements. The paper ends
with a review of the studies' substantive findings.
Regulation appears to account for a small but not
inconsiderable share of banks' costs. The best available evidence, most of which is not very precise,
suggests that the total cost of all bank regulations
in 1991 (the year for which most of the studies were
conducted) may have been about 12 percent to
13 percent of banks' noninterest expenses. Incremental costs—the costs of those required activities that
are undertaken only because they are required—may
have been about half of the total cost.
Labor costs apparently are the major component of
both the start-up costs and the ongoing costs of
complying with regulations. Some studies suggest
that the time spent by bank officers and managers on
compliance activities, especially activities related
to new regulations or to major revisions of existing
regulations, account for a large portion of labor
costs.
Statistical analyses have detected, for several regulations, scale economies in compliance costs. This
finding suggests that smaller banks, relative to larger
banks, have a cost disadvantage that may discourage
the entry of new firms into banking, may stimulate
consolidation of the industry into larger banks, and
may inhibit competition among institutions in markets for specific financial products. It also suggests
the possibility that regulation in the early stages of
the product life cycle—when output is low and average regulatory cost would be high—will discourage
the introduction of new financial services.
One survey found that the start-up costs of complying with a new regulation were insensitive to the
number of changes required to bring a bank's practices and policies into compliance with the regulation. If this finding is generally true, then applying
regulations generally to address the practices of a few
institutions would impose costs on all institutions,
not just on the few that must change their practices.
This finding also suggests that a regulatory policy of
making frequent minor revisions to regulations might
be more costly to banks than one of making infrequent major revisions.
The paper concludes that surveys can produce reasonably good data on regulatory costs if good survey
methods are followed. Carefully designed studies can
increase knowledge of the effects of regulation on
253
banks' costs. However, exercises that measure only
costs and do not attempt to explain the determinants
of cost are likely to have limited value. Our current
understanding of the determinants of regulatory costs
is based on analysis of a small number of regulations
by a few researchers. Further research covering more
and different types of regulations and regulatory
requirements is clearly needed.
•
254
Industrial Production and Capacity Utilization
for February 1998
Released for publication March 17
Industrial production was unchanged in February
after a revised 0.1 percent rise in January. Manufacturing output was also flat in February. Motor vehicle
production declined for a third consecutive month,
although it remained at a relatively high level. With
unseasonably warm weather continuing to dampen
demand, the output of utilities bounced back only
0.9 percent after having dropped 3.1 percent in January. At 128.1 percent of its 1992 average, total industrial production in February was 4.9 percent higher
than it was in February 1997. The rate of industrial
capacity utilization decreased 0.3 percentage point, to
82.7 percent.
Industrial production indexes
Ratio scale, 1992= 100
_
Consumer goods
Ratio scale, 1992 = 100
130
Durable
_
Intermediate products
130
120
^T
120
Construction supplies
110
Nondurable
i
i
i
1
i
150
Business
-
--
v—^.^
Defense and space
^v
1
1992
Capacity utilization
1
1
1994
1
1
1996
100
90
J
Equipment
1990
100
90
- \J
_
-
110
Business supplies —
I
I
I
I
Materials
150
130
130
110
110
Nondurable goods
and energy
90
I
1
1998
1990
I
1992
I
I
I
1994
I
I
1996
Percent of capacity
90
1998
Percent of capacity
-
85
85
-
80
80
-
75
Manufacturing
75
I
I
I
I
1984
1986
1988
1990
1992
1994
1996
1998
1984
1986
1988
1990
All series are seasonally adjusted. Latest series, February. Capacity is an index of potential industrial production.
I
I
1992
I
1994
1996
1998
255
Industrial production and capacity utilization, February 1998
Industrial production, index, 1992=100
Percentage change
Category
1997
1998
1997'
Nov.'
Dec.'
Jan.'
.
127.5
127.9
128.0
Previous estimate
127.4
127.9
127.9
121.2
116.7
147.5
123.6
137.7
121.1
116.2
148.4
122.8
138.7
121.3
116.8
147.5
123.8
138.9
130.4
147.7
112.6
106.1
115.3
130.9
148.4
112.9
105.5
114.9
131.3
148.8
113.4
107.1
111.3
Total
Major market groups
Products, total1
Consumer goods
Business equipment
Construction supplies
1998'
Feb. 1997
to
Feb. 1998
Feb.P
Nov.'
Dec'
Jan.'
Feb.?
128.1
.8
.3
.1
.0
4.9
.7
.4
.0
121.3
116.5
147.3
124.3
139.0
.8
.6
1.3
1.9
.7
-.1
.2
.5
-.6
.8
.1
.0
-.2
-.2
.4
.1
4.2
3.1
7.9
2.1
6.1
131.3
148.9
113.2
106.8
112.3
1.0
1.5
.4
.2
-1.3
.4
.5
.2
-.5
-.4
.3
.3
.4
1.6
-3.1
.0
.1
-.1
-.3
.9
5.5
8.1
2.6
.7
1.8
—4
.6
-.6
.8
Major industry groups
Durable
Nondurable
Utilities
MEMO
Capacity utilization, percent
Feb.
Nov.'
Dec'
Jan.1
Feb.P
Capacity,
percentage
change,
Feb. 1997
to
Feb. 1998
82.6
83.3
83.2
83.0
82.7
4.7
83.2
83.3
83.0
82.3
80.6
86.2
89.7
90.7
82.3
80.6
86.1
89.2
90.3
82.2
80.5
86.0
90.6
87.4
81.8
80.1
85.6
90.2
88.1
5.4
6.3
3.4
.6
1.3
1997
Average,
1967-97
Total
82.1
Low,
1982
71.1
85.4
Previous estimate
Manufacturing
Advanced processing
Primary processing ..
Mining
Utilities
81.1
80.5
82.4
87.5
87.3
69.0
70.4
66.2
80.3
75.9
85.7
84.2
88.9
88.0
92.6
NOTE. Data seasonally adjusted or calculated from seasonally adjusted
monthly data.
1. Change from preceding month.
MARKET GROUPS
The 0.2 percent decline in the production of consumer goods in February reflected reductions in both
the durable and nondurable components. Within durables, the drop in the output of automotive products
was tempered a bit by a 0.2 percent increase in other
consumer durables, which has been a volatile series
of late. The production of nondurable consumer
goods slipped 0.2 percent and has been little changed
since November; losses in food and paper products
outweighed gains in the output of consumer chemicals and in the residential use of utilities.
The output of business equipment, which had
expanded nearly 11 percent last year, contracted
0.2 percent after having fallen 0.6 percent in January.
Weakness in the production of industrial, telephone,
and photographic equipment, along with slowdowns
in motor vehicle and aircraft assembly, have constrained the production of business equipment so far
this year.
1997
1998
High,
1988-89
81.7
79.7
86.1
90.1
87.7
2. Contains components in addition to those shown,
r Revised,
p Preliminary.
The production of construction supplies increased
further after a healthy gain in January. The output of
materials edged up 0.1 percent for the second consecutive month, well off the pace set last year. Small
increases in durable and nondurable goods materials
slightly outweighed a further retraction in energy
materials; a reduction in the output of coal outweighed increases in utility output. Among durable
goods materials, the output of parts for hightechnology equipment continued to increase rapidly;
the output of parts for consumer goods, particularly
for motor vehicles, declined.
INDUSTRY GROUPS
The output at factories was flat in February. The
output of durables ticked up just 0.1 percent; strong
increases in computer and office equipment and in
semiconductors were mostly offset by a decrease
in motor vehicles and parts. The production of
256
Federal Reserve Bulletin • April 1998
nondurables edged down 0.1 percent, with decreased
production in many industries nearly matched by a
sizable gain in chemicals production.
The operating rate in manufacturing declined, to
81.8 percent. Utilization in advanced-processing
industries and in primary-processing industries both
decreased 0.4 percentage point. Capacity utilization
in advanced-processing industries fell to a level a
little below its long-run average, while the operating
rate in primary-processing industries was 3.2 percentage points above its long-run average.
•
257
Statements to the Congress
Statement by Alan Greenspan, Chairman, Board of
Governors of the Federal Reserve System, before the
Committee on Foreign Relations, U.S. Senate, February 12, 1998
The global financial system has been evolving rapidly in recent years. New technology has radically
reduced the costs of borrowing and lending across
traditional national borders, facilitating the development of new instruments and drawing in new players.
One result has been a massive increase in capital
flows. Information is transmitted instantaneously
around the world, and huge shifts in the supply and
demand for funds naturally follow.
This burgeoning global system has been demonstrated to be a highly efficient structure that has
significantly facilitated cross-border trade in goods
and services and, accordingly, has made a substantial
contribution to standards of living worldwide. Its
efficiency exposes and punishes underlying economic
weakness swiftly and decisively. Regrettably, it also
appears to have facilitated the transmission of financial disturbances far more effectively than ever
before.
As I testified three years ago, the then-emerging
Mexican crisis was the first such episode associated
with our new high tech international financial system.
The current Asian crisis is the second.
We do not as yet fully understand the new system's
dynamics. We are learning fast and need to update
and modify our institutions and practices to reduce
the risks inherent in the new regime. Meanwhile, we
have to confront the current crisis with the institutions and techniques we have.
Many argue that the current crisis should be
allowed to run its course without support from the
International Monetary Fund (IMF) or the bilateral
financial backing of other nations. They assert that
allowing this crisis to play out, while doubtless
having additional negative effects on growth in Asia
and engendering greater spillovers onto the rest
of the world, is not likely to have a large or lasting impact on the United States and the world
economy.
They may well be correct in their judgment. There
is, however, a small but not negligible probability
that the upset in East Asia could have unexpectedly
negative effects on Japan, Latin America, and eastern
and central Europe that, in turn, could have repercussions elsewhere, including the United States. Thus,
while the probability of such an outcome may be
small, its consequences, in my judgment, should not
be left solely to chance. We have observed that global
financial markets, as currently organized, do not
always achieve an appropriate equilibrium, or at least
require time to stabilize.
Opponents of IMF support also argue that the
substantial financial backing, by cushioning the losses
of imprudent investors, could exacerbate moral hazard. Moral hazard arises when someone can reap the
rewards from his or her actions when events go well
but does not suffer the full consequences when they
go badly. Such a reward structure, obviously, could
encourage excessive risk-taking. There has doubtless
been some of that type of inappropriate risk-taking
attributable to expectations of IMF bailouts, though
arguably it has been the expectation of governments'
support of their financial systems that has been the
more obvious culprit. In any event, the expectation of
broad bailouts, at least in the Asian case, has turned
out to have been an illusion. Many investors in Asian
economies have to date suffered substantial losses.
Asian equity losses, excluding Japanese companies,
since June 1997, worldwide, are estimated to have
exceeded $700 billion at the end of January, of which
more than $30 billion has been lost by U.S. investors.
Substantial further losses have been recorded in
bonds and real estate.
Moreover, the policy conditionality, associated
principally with IMF lending, which dictates economic and financial discipline and structural change,
helps to mitigate some of the moral hazard concerns.
Such conditionality is also critical to the success of
the overall stabilization effort. As I will be discussing
in a moment, at the root of the problems is poor
public policy that has resulted in misguided investments and very weak financial sectors. Convincing a
sovereign nation to alter destructive policies that
impair its own performance and threaten contagion to
its neighbors is best handled by an international
financial institution, such as the IMF. What we have
in place today to respond to crises should be supported even as we work to improve those mechanisms and institutions.
258
Federal Reserve Bulletin • April 1998
Accordingly, I fully back the Administration's
request to augment the financial resources of the
IMF—U.S. participation in the New Arrangements to
Borrow and an increase in the U.S. quota in the IMF.
Hopefully, neither will turn out not to be needed, and
no funds will be drawn. But it is better to have it
available if that turns out not to be the case and quick
response to a pending crisis is essential. I also believe
it is important to have mechanisms, such as the
Treasury Department's Exchange Stabilization Fund,
that permit the United States in exceptional circumstances to provide temporary bilateral financial support, often on short notice, under appropriate conditions and on occasion in cooperation with other
countries.
In testimony in mid-November, I endeavored to
outline the roots of the current crisis. This morning I
should like to carry the analysis a bit further.
Companies in Korea and many other Asian countries have become formidable world class producers
in a number of manufacturing sectors using advanced
technologies, but in a number of cases they permitted
leverage to rise to levels that could be sustained only
with continued very rapid growth. Growth, however,
was destined to slow.
Asian economies to varying degrees over the past
half century have tried to combine rapid growth with
a much higher mix of government-directed production than has been evident in the essentially market
driven economies of the West. Through government
inducements, a number of select, more sophisticated
manufacturing technologies borrowed from the
advanced market economies were applied to these
generally low-productivity and, hence, low-wage
economies.1 Thus, for selected products, exports
became competitive with those of the market economies. This engendered overall economic growth at a
rate far exceeding that of economies at the cutting
edge of technology, whose growth has been bound by
hard-fought, but slow, accretions to knowledge.
There was, however, an upper limit to emerging
country growth defined by that cutting edge as to how
far this specialized Asian economic regime could
develop. As the process broadened beyond a few
select applications of advanced technologies, overall
productivity continued to increase and the associated
rise in the average real wage in these economies
blunted somewhat the competitive advantage enjoyed
initially. Slackening of export expansion growth was
1. Wage levels in an industry are largely driven by the average
wage level of all workers in an economy against whom the industry's
workers compete.
inevitable. In addition, losses in competitiveness as a
result of exchange rates that were pegged to the
dollar, which has appreciated against the yen since
early 1995, slowed aggregate economic growth somewhat, even before the current crisis developed.
For years, domestic savings and rapidly increasing
capital inflows had been directed by governments
into investments that banks were required to finance.
As I pointed out in previous testimony, lacking a true
market test, much of that investment was unprofitable. So long as growth was vigorous, the adverse
consequences of this type of non-market allocation of
resources were masked. Moreover, in the context of
pegged exchange rates that were presumed to continue, if not indefinitely, at least beyond the term of
the loan, banks and nonbanks were willing to take the
risk to borrow dollars (unhedged) to obtain the dollardenominated interest rates that were invariably lower
than those available in domestic currency. Western,
especially American, investors diversified some of
their huge capital gains of the 1990s into East Asian
investments. In hindsight, it is evident that those
economies could not provide adequate profitable
opportunities at reasonable risk to absorb such a
surge in funds. This surge, together with distortions
caused by government planning, has resulted in huge
losses.
With the inevitable slowdown, business losses and
nonperforming bank loans surged. Banks' capital
eroded rapidly, and, as a consequence, funding
sources have dried up, as fears of defaults have risen
dramatically. In an environment of weak financial
systems, lax supervisory regimes, and vague guarantees about depositor or creditor protections, bank
runs have occurred in several countries and reached
crisis proportions in Indonesia. Uncertainty and
retrenchment have escalated. The state of confidence
so necessary to the functioning of any economy has
been torn asunder. Vicious cycles of ever-rising and
reinforcing fears have become contagious. Some
exchange rates have fallen to levels that are understandable only in the context of a veritable collapse
of confidence in the functioning of an economy. It is
clear, for example, that neither changes in the relative
purchasing power of the Indonesian rupiah relative to
the U.S. dollar nor their relevant interest rates can
explain the more than four-fifths decline in the rupiah
by early 1998.
The sharp exchange rate changes in East Asia in
recent months, as have similar instances elsewhere,
do not appear to have resulted wholly from a measured judgment that fundamental forces have turned
appreciably more adverse. More likely, its root is a
process that is neither measured nor rational, one
Statements to the Congress
based on a visceral, engulfing fear. The exchange rate
changes appear the consequence not of the accumulation of new knowledge of a deterioration in fundamentals but its opposite: the onset of uncertainties
that destroy previous understandings of the way the
world works. That has induced massive disengagements of investors and declines in Asian currencies
that have no tie to reality.
A similar breakdown was also evident in Mexico
three years ago, albeit to a somewhat lesser degree. In
late 1994, the government was rapidly losing reserves
in a vain effort to support a currency that had come
under attack when the authorities failed to act expeditiously and convincingly to contain a burgeoning
current account deficit financed in large part by substantial short-term flows denominated in dollars.
These two recent crisis episodes have afforded us
increasing insights into the dynamics of the evolving
international financial system, though there is much
we do not yet understand.
With the new, more sophisticated financial markets
punishing errant government policy behavior far
more profoundly than in the past, vicious cycles are
evidently emerging more often. For, once they are
triggered, damage control is difficult. Once the web
of confidence, which supports the financial system, is
breached, it is difficult to restore quickly. The loss of
confidence that one understands the dynamics of the
systems with which we are engaged can trigger rapid
and disruptive changes in the pattern of finance,
which, in turn, feed back on exchange rates and asset
prices. Moreover, investor concerns that weaknesses
revealed in one economy may be present in others
that are similarly situated means that the loss of
confidence can quickly spread to other countries.
At one point the economic system appears stable,
the next it behaves as though a dam has reached a
breaking point, and water (read, confidence) evacuates its reservoir. The United States experienced such
a sudden change with the decline in stock prices of
more than 20 percent on October 19, 1987. There is
no credible scenario that can readily explain so abrupt
a change in the fundamentals of long-term valuation
on that one day. Such market panic does not appear to
reflect a simple continuum from the immediately
previous period. The abrupt onset of such implosions
suggests the possibility that there is a marked dividing line for confidence. When crossed, prices slip
into free fall—perhaps overshooting the long-term
equilibrium—before markets will stabilize.
But why do these events seem to erupt without
some readily evident precursor? Certainly, the more
extended the risk-taking, or more generally, the lower
the discount factors applied to future outcomes, the
259
greater the proportion of current output (mainly capital goods) driven by perceived future needs. Hence
under such conditions the more vulnerable are markets to a shock that abruptly triggers a revision in
expectations of future needs and sets off a vicious
cycle of contraction of financial and product markets.
Episodes of vicious cycles cannot be easily forecast, as our recent experience with Asia has demonstrated. Certainly, there were indications that Thailand's large current account deficits were unsustainable. Once the recent crisis was triggered in early
July with Thailand's eventual forced abandonment of
its exchange rate peg, it was apparently the lethal
combination of pegged exchange rates, high leverage, weak banking and financial systems, and declining demand in both Thailand and elsewhere that
transformed a correction into a collapse.
Normally the presence of these factors would have
produced a modest retrenchment, not the kind of
discontinuous fall in confidence that leads to a vicious
cycle of decline. But with a significant part of shortterm liabilities, bank and nonbank, denominated in
foreign currencies (predominantly dollars), unhedged,
the initial pressure on domestic currencies was apparently too much to bear, leading to a sharp crack in the
fixed exchange-rate structure of many East Asian
economies. The belief that local currencies could,
virtually without risk of loss, be converted into dollars at any time was shattered. Investors, both domestic and foreign, endeavored en masse to convert to
dollars, as confidence in the ability of the local economy to earn dollars to meet their fixed obligations
diminished. Local exchange rates fell against the
dollar, inducing still further declines.
The weakening of growth also led to lowered profit
expectations and contracting net capital inflows of
dollars. This was an abrupt change from the pronounced acceleration through 1996 and the first half
of 1997. The combination of continued strong
demand for dollars to meet debt-service obligations
and the slowed new supply destabilized the previously fixed exchange-rate regime. This created a
marked increase in uncertainty and retrenchment,
further reducing capital inflows, still further weakening local currency exchange rates. Such vicious
cycles continue until either defaults or restructuring
lowers debt-service obligations or the low local
exchange rates finally induce a pickup in the supply
of dollars.
These virulent episodes appear to be at the root of
our most recent breakdowns in Mexico and Asia.
Their increased prevalence may, in fact, be a defining
characteristic of the new high tech international
financial system. We shall never be able to alter the
260
Federal Reserve Bulletin • April 1998
human response to shocks of uncertainty and withdrawal; we can only endeavor to reduce the imbalances that exacerbate them.
Although, as indicated earlier, I do not believe we
are as yet sufficiently knowledgeable of the full complex dynamics of our increasingly developing high
tech financial system, enough insights have been
gleaned from the crises in Mexico and Asia (and
previous experiences) to enable us to list a few of the
critical tendencies toward disequilibrium and vicious
cycles that will have to be addressed if our new
global economy is to limit the scope for disruptions
in the future. These elements have all, in times past,
been factors in international and domestic economic
disruptions, but they appear more stark in today's
market.
1. Leverage. Certainly in Korea, probably in Thailand and Indonesia, and possibly elsewhere, a high
degree of leverage (the ratio of debt to equity)
appears to be a place to start. Exceptionally high
leverage often is a symptom of excessive risk-taking
that leaves financial systems and economies vulnerable to loss of confidence. It is not easy to imagine
the cumulative cascading of debt instruments seeking
safety in a crisis when assets are heavily funded with
equity. The concern is particularly relevant to banks
and many other financial intermediaries, whose assets
typically are less liquid than their liabilities and so
depend on confidence in the payment of liabilities for
their continued viability. Moreover, both financial
and nonfinancial businesses can employ high leverage to mask inadequate underlying profitability and
otherwise have inadequate capital cushions to match
their volatile environments.
Excess leverage in nonfinancial business can create
problems for lenders including their banks; these
problems can, in turn, spread to other borrowers that
rely on these lenders. Fortunately, since lending by
nonfinancial firms to other businesses is less prevalent than bank lending to other banks, direct contagion is less likely. But the leverage of South Korea's
chaebols, because of their size and the pervasive
distress, has clearly been an important cause of bank
problems with their systemic implications.
2. Interest Rate and Currency Risk. Banks, when
confronted with a generally rising yield curve, have a
tendency to incur interest rate or liquidity risk by
lending long and funding short. This exposes them to
shocks, especially those institutions that have low
capital-asset ratios. When financial intermediaries, in
addition, seek low-cost, unhedged, foreign currency
funding, the dangers of depositor runs, after a fall in
the domestic currency, escalate.
3. Weak Banking Systems. Banks play a crucial
role in the financial market infrastructure. When they
are undercapitalized, have lax lending standards, and
are subjected to weak supervision and regulation,
they become a source of systemic risk both domestically and internationally. Lack of a cadre of loan
officers who have experience in judging lending risk
can produce debilitating losses even when lending is
not directed by government inducement or the need
to support members of an associated group of companies. Experienced bank supervision and regulation
cannot fully substitute for poor lending procedures,
but presumably it could encourage better practice.
But apparently even that has been lacking in many
emerging economies.
4. Interbank Funding, Especially in Foreign Currencies. Despite its importance for distributing savings to their most valued use, short-term interbank
funding, especially cross-border, may turn out to be
the Achilles' heel of an international financial system
that is subject to wide variations in financial confidence. This phenomenon, which is all too common in
our domestic experience, may be particularly dangerous in an international setting.
5. Moral Hazard. The expectation that monetary
authorities or international financial institutions will
come to the rescue of failing financial systems and
unsound investments has clearly engendered a significant element of moral hazard and excessive risktaking. The dividing line between public and private
liabilities, too often, becomes blurred.
6. Weak Central Banks. To effectively support a
stable currency, central banks need to be independent, meaning that their monetary policy decisions
are not subject to the dictates of political authorities.
In East Asia, as in many other areas, the central bank
was not in a position to resist political pressures
focused on the short run.
7. Securities Markets. Recent adverse banking
experiences have emphasized the problems that can
arise if banks are almost the sole source of intermediation. Their breakdown induces a sharp weakening
in economic growth. A wider range of nonbank institutions, including viable debt and equity markets, are
important safeguards of economic activity when
banking fails.
Statements to the Congress
8. Inadequate Legal Structures. Finally, an effective competitive market system requires a rule of law
that severely delimits government's arbitrary intrusion into commercial disputes.
Defaults and restructuring will not always be
avoidable. Indeed, "creative destruction," as Joseph
Schumpeter put it, is often an important element of
renewal in a dynamic market economy. But an efficient bankruptcy statute is required to aid in this
process, especially in the case of cross-border
defaults.
Interest and currency risk-taking, excess leverage,
weak financial systems, and interbank funding are all
encouraged by the existence of a safety net. In a
domestic context, it is difficult to achieve financial
balance without a regulatory structure that seeks to
simulate the market incentives that would tend to
control these financial elements if there were not
broad safety nets. It is even more difficult to achieve
such a balance internationally among sovereign governments operating out of different cultures. Thus,
governments have developed a patchwork of arrangements and conventions governing the functioning of
the international financial system that I believe will
need to be thoroughly reviewed and altered as necessary to fit the needs of the new global environment. A
review of supervision and regulation of private financial institutions, especially those that are supported
by a safety net, is particularly pressing because those
institutions have played so prominent a role in the
emergence of recent crises.
As I have testified previously, I believe that, in this
rapidly expanding international financial system, the
primary protection from adverse financial disturbances is effective counterparty surveillance, and,
hence, government regulation and supervision should
seek to produce an environment in which counterparties can most effectively oversee the credit risks of
potential transactions.
Here a major improvement in transparency, including both accounting and public disclosure, is essential. To be sure, counterparties often exchange otherwise confidential information as a condition of a
transaction. But broader dissemination of detailed
disclosures of governments, financial institutions, and
firms is required if the risks inherent in our global
financial structure are to be contained. A market
system can approach an appropriate equilibrium only
if the signals to which individual market participants
respond are accurate and adequate to the needs of the
adjustment process. Among the important signals are
product and asset prices, interest rates, debt by maturity, detailed accounts of central banks, and private
261
enterprises. Blinded by faulty signals, a competitive
free market system cannot reach a firm balance
except by chance. In today's rapidly changing marketplace, producers need sophisticated signals to hone
production schedules and investment programs to
respond to consumer demand.
There is sufficient bias in political systems of all
varieties to substitute hope (read, wishful thinking)
for possibly difficult preemptive policy moves, both
with respect to financial systems and economic policy. There is often denial and delay in instituting
proper adjustments. Recent propensities to obscure
the need for change have been evidenced by unreported declines in official reserves, issuance by governments of the equivalent to foreign currency obligations, or unreported large forward short positions
against foreign currencies. It is very difficult for
political leaders to incur what they perceive as large
immediate political costs to contain problems that
they see (often dimly) as only prospective.
Reality eventually replaces hope, but the cost of
delay is a more abrupt and disruptive adjustment than
would have been required if action had been more
preemptive. Increased transparency for businesses,
financial institutions, and governments is a key ingredient in fostering more discipline on private transactors and on government policymakers. Increased
transparency can counter political bias in part by
exposing for all to see the risks to stability of current
policies as they develop. Under such conditions, failure to act would also be perceived as having political
costs. I suspect that recent political foot dragging by
governments in both developed and developing countries on the issue of greater transparency is credible
evidence of its power and significance.
Transparency, which is so important to foster safe
and sound lending practices, is, of course, less relevant for local currency lending if banks are guaranteed with sovereign credits. Moreover, transparency
becomes especially difficult to create for organizations and corporations with large interlocking ownerships. Cross holdings of stock lead too often to lending on the basis of association, not economic value.
The list of problems that must be addressed to
achieve balance in our future global financial system
could be significantly extended, but let me end with
a notion that is relevant also to today's crisis. It is
becoming increasingly evident that supervision and
regulation should address excess nonperforming
loans expeditiously. The expected values of the losses
on these loans are, of course, a subtraction from
capital. But because these estimates are uncertain,
they embody an additional risk premium that reduces
the markets' best estimate of the size of effective
262
Federal Reserve Bulletin • April 1998
equity capital even if capital is replenished. It is,
hence, far better to remove these dubious assets and
their associated risk premium from bank balance
sheets and dispose of them separately, preferably
promptly.
As a consequence of the unwinding of market
restrictions and regulations, and the rapid increase in
technology, the international financial system has
expanded at a pace far faster than either domestic
gross domestic product or cross-border trade. To
reduce the risk of systemic crises in such an environment, an enhanced regime of market incentives,
involving greater sensitivity to market signals, more
information to make those signals more robust, and
broader securities markets—coupled with better
supervision—is essential. Obviously appropriate
macropolicies, as ever, are assumed. But attention to
microdetails is becoming increasingly pressing.
Nonetheless, it is reasonable to expect that despite
endeavors at risk containment and prevention the
system may fail in some instances, triggering vicious
cycles and all the associated contagion for innocent
bystanders. A backup source of international finan-
Statement by Alan Greenspan, Chairman, Board of
Governors of the Federal Reserve System, before the
Subcommittee on Domestic and International Monetary Policy of the Committee on Banking and Financial Services, U.S. House of Representatives, February 24, 1998
I welcome this opportunity to present the Federal
Reserve's semiannual report on economic conditions
and the conduct of monetary policy. '
THE U.S. ECONOMY IN 1997
The U.S. economy delivered another exemplary performance in 1997. Over the four quarters of last year,
real gross domestic product expanded close to 4 percent, its fastest annual increase in ten years. To
produce that higher output, about 3 million Americans joined the nation's payrolls, in the process contributing to a reduction in the unemployment rate to
43/4 percent, its lowest sustained level since the late
1960s. And our factories were working more inten-
I. See "Monetary Policy Report to the Congress," Federal Reserve
Bulletin, vol. 84 (March 1998), pp. 155-73.
cial support provided only with agreed conditions to
address underlying problems, the task assigned to the
IMF, can play an essential stabilizing role. The availability of such support must be limited because its
size cannot be expected to expand at the pace of the
international financial system. I doubt if there will be
worldwide political support for that.
In closing, I should like to stress that the significant
degree of volatility that continues to exist in Asian
markets indicates exceptionally high levels of uncertainty, bordering on panic. It is not reasonable to
expect that the substantial investments needed
to implement meaningful structural reforms can
proceed very far until we observe a simmering down
of frenetic changes in asset prices and exchange
rates.
That is likely to result only when stability of banking and financial systems generally is achieved. The
failure of the fragile banking systems of East Asia to
hold steady as financial pressures increased was a
defining element in the developing crisis. The stabilization of those banking systems is crucial, if confidence, which has been so thoroughly undercut in this
most debilitating crisis, is to be restored.
sively too: Industrial production increased 5% percent last year, exceeding robust additions to capacity.
Those gains were shared widely. The hourly wage
and salary structure rose about 4 percent, fueling
impressive increases in personal incomes. Unlike
some prior episodes when faster wage rate increases
mainly reflected attempts to make up for more rapidly rising prices of goods and services, the fatter
paychecks that workers brought home represented
real increments to purchasing power. Measured consumer price inflation came in at 13A percent over the
twelve months of 1997, down about 1 Vi percentage
points from the pace of the prior year. While swings
in the prices of food and fuel contributed to this
decline, both narrower price indexes excluding those
items and broader ones including all goods and services produced in the United States also paint a
portrait of continued progress toward price stability.
Businesses, for the most part, were able to pay these
higher real wages while still increasing their earnings. Although aggregate data on profits for all of
1997 are not yet available, corporate profit margins
most likely remained in an elevated range not seen
consistently since the 1960s. These healthy gains in
earnings and the expectations of more to come provided important support to the equity market, with
most major stock price indexes gaining more than
20 percent over the year.
Statements to the Congress
The strong growth of the real income of workers
and corporations is not unrelated to the economy's
continued good performance on inflation. Taken
together, recent evidence supports the view that such
low inflation, as closely approaching price stability as
we have known in the United States in three decades,
engenders many benefits. When changes in the general price level are small and predictable, households
and firms can plan more securely for the future. The
perception of reduced risk encourages investment.
Low inflation also exerts a discipline on costs, fostering efforts to enhance productivity. Productivity is
the ultimate source of rising standards of living, and
we witnessed a notable pickup in this measure in the
past two years.
The robust economy has facilitated the efforts of
the Congress and the Administration to restore balance in the unified federal budget. As I have indicated to the Congress on numerous occasions, moving beyond this point and putting the budget in
significant surplus would be the surest and most
direct way of increasing national saving. In turn,
higher national saving, by promoting lower real longterm interest rates, helps spur spending to outfit
American firms and their workers with the modern
equipment they need to compete successfully on
world markets. We have seen a partial down payment
of the benefits of better budget balance already: It
seems reasonable to assume that the decline in
longer-term Treasury yields last year owed, in part, to
reduced competition—current and prospective—from
the federal government for scarce private saving.
However, additional effort remains to be exerted to
address the effects on federal entitlement spending of
the looming shift within the next decade in the
nation's retirement demographics.
As I noted earlier, our nation has been experiencing a higher growth rate of productivity—output per
hour worked—in recent years. The dramatic improvements in computing power and communication and
information technology appear to have been a major
force behind this beneficial trend. Those innovations,
together with fierce competitive pressures in our high
tech industries to make them available to as many
homes, offices, stores, and shop floors as possible,
have produced double-digit annual reductions in
prices of capital goods embodying new technologies.
Indeed, many products considered to be at the cutting
edge of technology as recently as two to three years
ago have become so standardized and inexpensive
that they have achieved near "commodity" status, a
development that has allowed businesses to
accelerate their accumulation of more and better
capital.
263
Critical to this process has been the rapidly increasing efficiency of our financial markets—itself a product of the new technologies and of significant market
deregulation over the years. Capital now flows with
relatively little friction to projects embodying new
ideas. Silicon Valley is a tribute both to American
ingenuity and to the financial system's everincreasing ability to supply venture capital to the
entrepreneurs who are such a dynamic force in our
economy.
With new high tech tools, American businesses
have shaved transportation costs, managed their production and use of inventories more efficiently, and
broadened market opportunities. The threat of rising
costs in tight labor markets has imparted a substantial
impetus to efforts to take advantage of possible efficiencies. In my Humphrey-Hawkins testimony last
July, I discussed the likelihood that the sharp acceleration in capital investment in advanced technologies beginning in 1993 reflected synergies of new
ideas, embodied in increasingly inexpensive new
equipment, that have elevated expected returns and
have broadened investment opportunities.
More recent evidence remains consistent with the
view that this capital spending has contributed to a
noticeable pickup in productivity—and probably by
more than can be explained by usual business cycle
forces. For one, the combination of continued low
inflation and stable to rising domestic profit margins
implies quite subdued growth in total consolidated
unit business costs. With labor costs constituting
more than two-thirds of those costs and labor compensation per hour accelerating, productivity must be
growing faster, and that stepup must be roughly in
line with the increase in compensation growth. For
another, our more direct observations on output per
hour roughly tend to confirm that productivity has
picked up significantly in recent years, although how
much the ongoing trend of productivity has risen
remains an open question.
The acceleration in productivity, however, has been
exceeded by the strengthening of demand for goods
and services. As a consequence, employers had to
expand payrolls at a pace well in excess of the
growth of the working age population that profess a
desire for a job, including new immigrants. As I
pointed out last year in testimony before the Congress, that gap has been accommodated by declines
in both the officially unemployed and those not
actively seeking work but desirous of working. The
number of people in those two categories decreased
at a rate of about 1 million per year on average over
the last four years. By December 1997, the sum had
declined to a seasonally adjusted 10'/2 million, or
264
Federal Reserve Bulletin • April 1998
6 percent of the working age population, the lowest
ratio since detailed information on this series first
became available in 1970. Anecdotal information
from surveys of our twelve Reserve Banks attests to
our ever tightening labor markets.
Rapidly rising demand for labor has had enormous
beneficial effects on our work force. Previously lowor unskilled workers have been drawn into the job
market and have obtained training and experience
that will help them even if they later change jobs.
Large numbers of underemployed have been moved
up the career ladder to match their underlying skills,
and many welfare recipients have been added to
payrolls as well, to the benefit of their long-term job
prospects.
The recent acceleration of wages likely has owed
in part to the ever-tightening labor market and in part
to rising productivity growth, which, through competition, induces firms to grant higher wages. It is
difficult at this time, however, to disentangle the
relative contributions of these factors. What is clear
is that, unless demand growth softens or productivity
growth accelerates even more, we will gradually run
out of new workers who can be profitably employed.
It is not possible to tell how many more of the
6 percent of the working-age population who want to
work but do not have jobs can be added to payrolls. A
significant number are so-called frictionally unemployed, as they have left one job but not yet chosen to
accept another. Still others have chosen to work in
only a limited geographic area where their skills may
not be needed.
Should demand for new workers continue to
exceed new supply, we would expect wage gains
increasingly to exceed productivity growth, squeezing profit margins and eventually leading to a pickup
in inflation. Were a substantial pickup in inflation to
occur, it could, by stunting economic growth, reverse
much of the remarkable labor market progress of
recent years. I will be discussing our assessment of
these and other possibilities and their bearing on the
outlook for 1998 shortly.
MONETARY POLICY IN 1997
History teaches us that monetary policy has been its
most effective when it has been preemptive. The
lagging relationship between the Federal Reserve's
policy instrument and spending, and, even further
removed, inflation, implies that if policy actions are
delayed until prices begin to pick up, they will be too
late to fend off at least some persistent price acceleration and attendant economic instabilities. Preemptive
policymaking is keyed to judging how widespread
are emerging inflationary forces, and when, and to
what degree, those forces will be reflected in actual
inflation. For most of last year, the evident strains on
resources were sufficiently severe to steer the Federal
Open Market Committee (FOMC) toward being more
inclined to tighten than to ease monetary policy.
Indeed, in March, when it became apparent that
strains on resources seemed to be intensifying, the
FOMC imposed modest incremental restraint, raising
its intended federal funds rate VA percentage point, to
5V-i percent.
We did not increase the federal funds rate again
during the summer and fall, despite further tightening
of the labor market. Even though the labor market
heated up and labor compensation rose, measured
inflation fell, owing to the appreciation of the dollar,
weakness in international commodity prices, and
faster productivity growth. Those restraining forces
were more evident in goods-price inflation, which in
the consumer price index (CPI) slowed substantially
to only about Vi percent in 1997, than on serviceprice inflation, which moderated much less—to
around 3 percent. Providers of services appeared to
be more pressed by mounting strains in labor markets. Hourly wages and salaries in service-producing
sectors rose 4'/2 percent last year, up considerably
from the prior year and almost 1V2 percentage points
faster than in goods-producing sectors. However, a
significant portion of that differential, but by no
means all, traced to commissions in the financial and
real estate services sector related to one-off increases
in transactions prices and in volumes of activity,
rather than to increases in the underlying wage
structure.
Although the nominal federal funds rate was maintained after March, the apparent drop in inflation
expectations over the balance of 1997 induced some
firming in the stance of monetary policy by one
important measure—the real federal funds rate, or the
nominal federal funds rate less a proxy for inflation
expectations. Some analysts have dubbed the contribution of the reduction in inflation expectations to
raising the real federal funds rate a "passive" tightening, in that it increased the amount of monetary
policy restraint in place without an explicit vote by
the FOMC. While the tightening may have been
passive in that sense, it was by no means inadvertent.
Members of the FOMC took some comfort in the
upward trend of the real federal funds rate over the
year and the rise in the foreign exchange value of the
dollar because such additional restraint was viewed
Statements to the Congress
as appropriate given the strength of spending and
building strains on labor resources. They also recognized that in virtually all other respects financial
markets remained quite accommodative and, indeed,
judging by the rise in equity prices, were providing
additional impetus to domestic spending.
THE OUTLOOK TOR 1998
There can be no doubt that domestic demand retained
considerable momentum at the outset of this year.
Production and employment have been on a strong
uptrend in recent months. Confident households,
enjoying gains in income and wealth and benefiting
from the reductions in intermediate- and longer-term
interest rates to date, should continue to increase their
spending. Firms should find financing available on
relatively attractive terms to fund profitable opportunities to enhance efficiency by investing in new capital equipment. By itself, this strength in spending
would seem to presage intensifying pressures in labor
markets and on prices. Yet, the outlook for total
spending on goods and services produced in the
United States is less assured of late because of storm
clouds massing over the Western Pacific and heading
our way.
This is not the place to examine in detail what
triggered the initial problems in Asian financial markets and why the subsequent deterioration has been
so extreme. I covered that subject recently before
several committees of the Congress. Rather, I shall
confine my discussion this morning to the likely
consequences of the Asian crisis for demand and
inflation in the United States.
With the crisis curtailing the financing available in
foreign currencies, many Asian economies have had
no choice but to cut back their imports sharply.
Disruptions to their financial systems and economies
more generally will further damp demands for our
exports of goods and services. American exports
should be held down as well by the appreciation of
the dollar, which will make the prices of competing
goods produced abroad more attractive, just as
foreign-produced goods will be relatively more
attractive to buyers here at home. As a result, we can
expect a worsening net export position to exert a
discernible drag on total output in the United States.
For a time, such restraint might be reinforced
by a reduced willingness of U.S. firms to accumulate inventories as they foresee weaker demand
ahead.
The forces of Asian restraint could well be providing another, more direct offset to inflationary
265
impulses arising domestically in the United States. In
the wake of weakness in Asian economies and of
lagged effects of the appreciation of the dollar more
generally, the dollar prices of our non-oil imports are
likely to decline further in the months ahead. These
lower import prices are apparently already making
domestic producers hesitant to raise their own prices
for fear of losing market share, further contributing to
the restraint on overall prices. Lesser demands for
raw materials on the part of Asian economies as their
activity slows should help to keep world commodity
prices denominated in dollars in check. Import and
commodity prices, however, will restrain U.S. inflation only as long as they continue to fall, or to rise at
a slower rate than the pace of overall domestic product prices.
The key question going forward is whether the
restraint building from the turmoil in Asia will
be sufficient to check inflationary tendencies that
might otherwise result from the strength of domestic
spending and tightening labor markets. The depth of
the adjustment abroad will depend on the extent of
weakness in the financial sectors of Asian economies
and the speed with which structural inefficiencies in
the financial and nonfinancial sectors of those
economies are corrected. If, as we suspect, the
restraint coming from Asia is sufficient to bring the
demand for American labor back into line with the
growth of the working-age population desirous of
working, labor markets will remain unusually tight,
but any intensification of inflation should be delayed,
very gradual, and readily reversible. However, we
cannot rule out two other, more worrisome possibilities. On the one hand, should the momentum to
domestic spending not be offset significantly by
Asian or other developments, the U.S. economy
would be on a track along which spending could
press too strongly against available resources to be
consistent with contained inflation. On the other, we
also need to be alert to the possibility that the forces
from Asia might damp activity and prices by more
than is desirable by exerting a particularly forceful
drag on the volume of net exports and the prices of
imports.
When confronted at the beginning of this month
with these, for the moment, finely balanced, though
powerful forces, the members of the Federal Open
Market Committee decided that monetary policy
should most appropriately be kept on hold. With the
continuation of a remarkable seven-year expansion at
stake and so little precedent to go by, the range of
our intelligence gathering in the weeks ahead must
be wide and especially inclusive of international
developments.
266
Federal Reserve Bulletin • April 1998
THE FORECASTS OF THE GOVERNORS OF THE
FEDERAL RESERVE BOARD AND THE
PRESIDENTS OF THE FEDERAL RESERVE BANKS
In these circumstances, the forecasts of the governors
of the Federal Reserve Board and presidents of the
Federal Reserve Banks for the performance of the
U.S economy over this year are more tentative than
usual. Based on information available through the
first week of February, monetary policymakers were
generally of the view that moderate economic growth
is likely in store. The growth rate of real GDP is most
commonly seen as between 2 percent and 2% percent
over the four quarters of 1998. Given the strong
performance of real GDP, these projections envisage
the unemployment rate remaining in the low range of
the past half year. Inflation, as measured by the
fourth-quarter percentage change in the consumer
price index, is expected to be 13A percent to 2lA percent in 1998—near the low rate recorded in 1997.
This outlook embodies the expectation that the effects
of continuing tightness in labor markets will be
largely offset by technical adjustments shaving a
couple tenths from the published CPI, healthy productivity growth, flat or declining import prices, and
little pressure in commodity markets. But the policymakers' forecasts also reflect their determination to
hold the line on inflation.
THE RANGES FOR THE DEBT AND MONETARY
AGGREGATES
The FOMC affirmed the provisional ranges for the
monetary aggregates in 1998 that it had selected last
July, which, once again, encompass the growth rates
associated with conditions of approximate price stability, provided that these aggregates act in accord
with their pre-1990s historical relationships with
nominal income and interest rates. These ranges are
identical to those that had prevailed for 1997—
1 percent to 5 percent for M2 and 2 percent to
6 percent for M3. The FOMC also reaffirmed its
range of 3 percent to 7 percent for the debt of the
domestic nonfinancial sectors for this year. I should
caution, though, that the expectations of the governors and Reserve Bank presidents for the expansion
of nominal GDP in 1998 suggest that growth of M2
in the upper half of its benchmark range is a distinct
possibility this year. Given the continuing strength of
bank credit, M3 might even be above its range as
depositories use liabilities in this aggregate to fund
loan growth and securities acquisitions. Nonfinancial
debt should come in around the middle portion of its
range.
In the first part of the 1990s, money growth
diverged from historical relationships with income
and interest rates, in part as savers diversified into
bond and stock mutual funds, which had become
more readily available and whose returns were considerably more attractive than those on deposits. This
anomalous behavior of velocity severely set back
most analysts' confidence in the usefulness of M2 as
an indicator of economic developments. In recent
years, there have been tentative signs that the historical relationship linking the velocity of M2—
measured as the ratio of nominal GDP to the money
stock—to the cost of holding M2 assets was reasserting itself. However, a persistent residual upward drift
in velocity over the past few years and its apparent
cessation very recently underscores our ongoing
uncertainty about the stability of this relationship.
The FOMC will continue to observe the evolution of
the monetary and credit aggregates carefully, integrating information about these variables with a wide
variety of other information in determining its policy
stance.
UNCERTAINTY ABOUT THE OUTLOOK
With the current situation reflecting a balance of
strong countervailing forces, events in the months
ahead are not likely to unfold smoothly. In that
regard, I would like to flag a few areas of concern
about the economy beyond those mentioned already
regarding Asian developments.
Without doubt, lenders have provided important
support to spending in the past few years by their
willingness to transact at historically small margins
and in large volumes. Equity investors have contributed as well by apparently pricing in the expectation
of substantial earnings gains and requiring modest
compensation for the risk that those expectations
could be mistaken. Approaching the eighth year of
the economic expansion, this is understandable in an
economic environment that, contrary to historical
experience, has become increasingly benign. Businesses have been meeting obligations readily and
generating high profits, putting them in outstanding
financial health.
But we must be concerned about becoming too
complacent about evaluating repayment risks. All too
often at this stage of the business cycle, the loans that
banks extend later make up a disproportionate share
of total nonperforming loans. In addition, quite possibly, twelve or eighteen months hence, some of the
Statements to the Congress
securities purchased on the market could be looked
upon with some regret by investors. As one of the
nation's bank supervisors, the Federal Reserve will
make every effort to encourage banks to apply sound
underwriting standards in their lending. Prudent lenders should consider a wide range of economic situations in evaluating credit; to do otherwise would risk
contributing to potentially disruptive financial problems down the road.
A second area of concern involves our nation's
continuing role in the new high tech international
financial system. By joining with our major trading
partners and international financial institutions in
helping to stabilize the economies of Asia and promoting needed structural changes, we are also
encouraging the continued expansion of world trade
and global economic and financial stability on which
the ongoing increase of our own standards of living
depends. If we were to cede our role as a world
leader, or backslide into protectionist policies, we
would threaten the source of much of our own sustained economic growth.
A third risk is complacency about inflation prospects. The combination and interaction of significant
increases in productivity-improving technologies,
sharp declines in budget deficits, and disciplined
monetary policy has damped product price changes,
bringing them to near stability. While part of this
result owes to good policy, part is the product of the
fortuitous emergence of new technologies and of
some favorable price developments in imported
goods. However, as history counsels, it is unwise to
count on any string of good fortune to continue
indefinitely. At the same time, though, it is also
instructive to remember the words of an old sage that
"luck is the residue of design." He meant that to
some degree we can deliberately put ourselves in
position to experience good fortune and be better
prepared when misfortune strikes. For example, the
1970s were marked by two major oil-price shocks
and a significant depreciation in the exchange value
of the dollar. But those misfortunes were, in part, the
result of allowing imbalances to build over the decade
as policymakers lost hold of the anchor provided by
price stability. Some of what we now see helping rein
in inflation pressures is more likely to occur in an
environment of stable prices and price expectations
that thwarts producers from indiscriminately passing
on higher costs, puts a premium on productivity
enhancement, and more effectively rewards investment in physical and human capital.
Simply put, while the pursuit of price stability does
not rule out misfortune, it lowers its probability. If
firms are convinced that the general price level will
remain stable, they will reserve increases in their
sales prices of goods and services as a last resort, for
fear that such increases could mean loss of market
share. Similarly, if households are convinced of price
stability, they will not see variations in relative prices
as reasons to change their long-run inflation expectations. Thus, continuing to make progress toward this
legislated objective will make future supply shocks
less likely and our nation's economy less vulnerable
to those that occur.
•
Chairman Greenspan presented identical testimony before the
Committee on Banking, Housing, and Urban Affairs, U.S. Senate, February 25, 1998.
267
268
Announcements
MEETING OF THE CONSUMER ADVISORY
COUNCIL
PUBLICATION BY THE BASLE COMMITTEE
OF A PAPER ON INTERNAL CONTROL SYSTEMS
The Federal Reserve Board announced on February 26, 1998, that the Consumer Advisory Council
would meet on Thursday, March 19 in a meeting
open to the public. 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.
The Basle Committee on Banking Supervision has
issued a paper entitled Framework for the Evaluation
of Internal Control Systems as part of its ongoing
work to improve risk-management standards in
banks.
The paper describes elements that are essential to a
sound internal control system and lists fourteen principles for use by supervisory authorities when evaluating banks' internal controls. The internal control
framework described in the paper is in the context of
international banking organizations, and it is consistent with the Committee of Sponsoring Organizations
of the Treadway Commission document Internal
Control-Integrated Framework.
The paper is being distributed to supervisory
authorities around the world, to banks, and to other
interested parties. Comments to the Basle Committee
were invited by March 30, 1998. The Basle Committee's press release and paper may also be obtained
from the Internet (http://www.bis.org) or from the
Basle Committee Secretariat at the Bank for International Settlements.
ADJUSTMENT OF THE AMOUNT OF MORTGAGE
LOANS THAT TRIGGERS ADDITIONAL
DISCLOSURE REQUIREMENTS
The Federal Reserve Board on February 6, 1998,
published its annual adjustment of the dollar amount
that triggers additional disclosure requirements under
Truth in Lending for mortgage loans that bear fees
above a certain amount. The Board has adjusted the
dollar amount from $424 for 1997 to $435 for 1998.
The Home Ownership and Equity Protection Act
of 1994 bars credit terms such as balloon payments
and requires additional disclosures when total points
and fees payable by the consumer exceed $400, or
8 percent of the total loan amount, whichever is
larger. The Board must adjust this amount each year
based on the annual percentage change in the consumer price index in effect on June 1.
PROPOSED ACTIONS
The Federal Reserve Board on February 19, 1998,
published for comment proposed amendments to its
Regulation C (Home Mortgage Disclosure). Comments were requested by April 27. The proposed
amendments would modify the Loan Application
Register to prepare for the Year 2000 data systems
conversion.
The Federal Reserve Board on February 5, 1998,
requested additional comments on possible streamlining and reform of the Truth in Lending Act and
the Real Estate Settlement Procedures Act for
home-secured loans. Comments were requested by
March 9.
ISSUANCE FOR PUBLIC COMMENT
OF DOCUMENTS ON THE SUPERVISION
OF FINANCIAL CONGLOMERATES
BY THE BASLE COMMITTEE
The Basle Committee on Banking Supervision has
issued for public comment documents on the supervision of financial conglomerates that have been prepared by the Joint Forum on Financial Conglomerates. Comments are requested by July 31, 1998, and
should be directed to the Basle Committee at FAX:
011-41-61-280-9100.
The Joint Forum prepared the documents along
with the International Association of Securities Commissions and the International Association of Insurance Advisors, and the documents are accessible on
the Internet at the Bank for International Settlements'
Web site (http://www.bis.org).
The emergence of financial conglomerates and the
blurring of distinctions among the activities of firms
269
in the banking, securities, and insurance sectors have
raised important supervisory issues that are addressed
in these documents. The documents include discussion of such topics as capital adequacy and sound,
prudential management principles and describe possible frameworks for facilitating the exchange of
information and for enhancing cooperation among
supervisors.
The documents, which are in the form of working
papers, are being distributed to supervisory agencies
and industry representatives in each sector worldwide. Input from industry and supervisory sources
will play an important role in the ongoing work of the
Joint Forum as it addresses supervisory issues related
to financial conglomerates.
REVISIONS TO THE MONEY STOCK DATA
Measures of the money stock were revised in February of this year to incorporate the results 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.
The revisions had no effect on the annual growth
rates of M2 and M3 over 1997, but they raised the
annual growth rate of Ml by 0.1 percentage point
over the past year.
The benchmark incorporates minor revisions to
data reported on the weekly and quarterly deposit
reports, and it takes account of deposit data from call
reports for banks and thrift institutions that are not
weekly or quarterly deposit reporters. These revisions
to deposit data start in 1994. The benchmark also
incorporates historical data for a number of money
market mutual funds that began reporting for the first
time during 1997, raising the level of M3 over the
years by amounts that cumulate to $18 billion by
mid-1997.
Seasonal factors for the monetary aggregates have
been revised, using the benchmarked data through
December 1997. As in the past few years, the X-ll
ARIMA procedure was used to derive monthly seasonal factors. Overall, the revisions due to seasonal
factors slightly lowered the growth rates of Ml and
M3 in the first half of 1997 and raised the growth
rates of M3 in the second half of the year.
Completed historical data are available in printed
form from the Money and Reserves Projection Section, Mail Stop 72, Board of Governors of the Federal Reserve System, Washington, D.C. 20551; or
phone (202) 452-3062. Historical data for the monetary aggregates and their components are available
each week in the Board's weekly H.6 statistical
release on its Web site (http://www.bog.frb.fed.us)
under Domestic and International Research, Statistics: Releases and historical data and also from
the Economic Bulletin Board of the U.S. Department
of Commerce. Call (202) 482-1986 or toll-free
(800) 782-8872 for information on how to access the
Commerce Department bulletin board.
1. Monthly seasonal factors used to construct Ml, January 1997-March 1999
Year and month
Currency
Other checkable deposits'
Nonbank travelers
checks
Demand deposits
Total
At banks
1997—January
February
March
April
May
June
July
August
September
October
November
December
.9963
.9945
.9980
.9994
.0001
.0009
.0018
.0017
.9966
.9975
.0013
.0081
.9636
.9645
.9778
.9820
.9915
1.0261
1.0589
1.0549
1.0322
1.0040
.9770
.9658
1.0096
.9771
.9841
1.0005
.9795
.9977
1.0025
.9994
.9975
.9978
1.0134
1.0400
1.0139
.9946
1.0015
1.0213
.9913
.9981
.9931
.9906
.9950
.9925
.9980
1.0101
1.0219
1.0013
1.0029
1.0207
.9892
.9951
.9891
.9884
.9936
.9907
.9964
1.0112
1998—January
February
March
April
May
June
July
August
September
October
November
December
.9973
.9951
.9979
.0000
.0012
.0002
.0032
.0013
.9971
.9982
0013
.0086
.9655
.9672
.9782
.9816
.9910
1.0258
1.0577
1.0529
1.0310
1.0044
.9774
.9661
1.0090
.9773
.9851
1.0004
.9801
.9984
1.0022
1.0000
.9974
.9968
1.0132
1.0399
1.0134
.9945
1.0017
1.0214
.9915
.9983
.9929
.9907
.9948
.9927
.9980
1.0098
1.0213
1.0012
1.0029
1.0207
.9893
.9951
.9890
.9885
.9935
.9911
.9964
1.0110
1999—January
February
March
.9986
.9957
.9979
.9665
.9689
.9786
1.0087
.9776
.9856
1.0132
.9947
1.0020
1.0211
1.0012
1.0030
1. Seasonally adjusted other checkable deposits at thrift institutions are
Digitizedderived
for FRASER
as the difference between total other checkable deposits, seasonally
Ijusted. and seasonally adjusted other checkable deposits at commercial banks.
270
Federal Reserve Bulletin • April 1998
2. Monthly seasonal factors used to construct M2 and M3, January 1997-March 1999
Year and month
Smalldenomination
time deposits1
Largedenomination
time deposits'
9969
.9996
.9981
.9990
1.0003
1 0010
1 0014
1.0012
1.0008
1 0013
1.0002
.9992
9998
.9986
.9974
.9959
.9957
1.0048
1 0049
.9986
1.0029
1.0022
1.0021
.9985
.9964
.9993
.9980
.9960
.9961
1.0052
Savings and
MMDA
deposits'
.9956
.9950
0040
0045
.9985
.0028
0023
.0023
February
June
July
August
9Q89
October
November
December
1998—January
March
April
June
July
August
October
November
December
1999—January
February
March
Money market mutual funds
RPs
Eurodollars
1.0251
1.0307
1.0187
.9929
.9818
.9825
.9894
.9956
.9857
.9896
.9988
1.0073
.9952
.9975
.9945
1.0017
1.0149
1.0205
1.0019
1.0027
.9950
1.0088
.9935
.9717
1.0210
1.0156
1.0118
1.0017
1.0057
.9889
.9786
.9900
.9897
.9916
.9908
1.0112
1.0048
1.0080
1.0160
1.0109
.9846
.9865
.9928
1.0033
.9965
.9937
.9989
1.0043
1.0235
1.0336
1.0211
.9927
.9813
.9826
.9887
.9949
.9864
.9890
.9977
1.0081
.9951
.9998
.9957
1.0016
1.0155
1.0199
1.0015
1.0018
.9928
1.0094
.9947
.9719
1.0215
1.0159
1.0139
1.0035
1.0071
.9891
.9782
.9884
.9890
.9898
.9893
1.0135
1.0046
1.0080
1.0165
1.0227
1.0347
1.0222
.9951
1.0001
.9964
1.0210
1.0167
1.0156
InM2
In M3 only
.9851
.9939
.9975
.9930
1.0027
.9984
.9979
1.0003
1.0045
1.0147
1.0117
1.0010
1.0051
1.0074
1.0149
1.0111
.9860
.9868
.9936
1.0034
.9960
.9932
.9986
1.0042
.9993
1.0004
1.0006
1 0012
1.0010
1.0006
1.0011
1.0002
.9993
.9999
.9987
.9977
.9850
.9933
.9974
.9933
1.0024
.9981
.9983
1.0002
1.0046
1.0153
1.0116
1.0009
.9996
1.0004
1.0002
.9849
.9930
.9972
1. Seasonal factors are applied to deposits data at both commercial banks and thrift institutions.
3.
Weekly seasonal factors used to construct Ml, December 1, 1997-April 5, 1999
Nonbank travelers
checks
Week ending
Other checkable deposits'
Demand deposits
Total
At banks
1997—December 1
8
15
22
29
1.0025
1.0051
1.0056
1.0125
1.0140
.9620
.9616
.9622
.9628
.9634
.0364
.0208
.0297
.0400
.0566
1.0077
1.0016
.9981
1.0120
1.0247
1.0081
.9961
.9936
1.0160
1.0350
1998—January
5
12
19
26
1.0055
1.0011
.9963
.9907
.9630
.9611
.9592
.9573
.0883
.0343
.0006
.9617
1.0398
1.0174
1.0078
.9989
1.0409
1.0215
1.0150
1.0137
February
2
9
16
23
.9910
.9975
.9971
.9935
.9554
.9567
.9580
.9593
.9670
.9775
.9823
.9705
1.0054
.9964
.9843
.9897
1.0187
1.0003
.9905
1.0006
March
2
9
16
23
30
.9932
1.0003
.9981
.9972
.9968
.9607
.9662
.9718
.9774
.9830
.9838
.9879
.9921
.9673
.9895
1.0089
1.0014
.9901
.9972
1.0139
1.0111
.9946
.9925
1.0014
1.0197
April
6
13
20
27
1.0025
1.0033
.9997
.9970
.9844
.9827
.9810
.9793
1.0116
1.0213
1.0060
.9711
1.0177
1.0170
1.0394
1.0155
1.0105
1.0168
1.0353
1.0243
May
4
11
18
25
1.0000
1.0041
1.0010
1.0003
.9798
.9859
.9920
.9980
.9847
.9787
.9851
.9594
1.0108
.9955
.9874
.9803
1.0077
.9861
.9828
.9808
June
1
8
15
22
29
.9972
1.0028
1.0010
.9991
.9979
1.0041
1.0138
1.0241
1.0344
1.0446
.9969
1.0037
1.0097
.9815
.9939
.9920
.9960
.9970
.9954
1.0054
.9985
.9876
.9896
.9965
1.0072
July
6
13
20
27
1.0076
1.0056
1.0024
.9995
1.0518
1.0567
1.0616
1.0664
.0334
1.0155
.9941
.9690
1.0004
.9876
.9884
.9905
.9899
.9823
.9860
.9935
Announcements
3.
Weekly seasonal factors used to construct Ml, December 1, 1997-April 5, 1999—Continued
Other checkable deposits'
Nonbank travelers
checks
Demand deposits
1.0013
1.0061
1.0021
.9981
.9977
1.0700
1.0664
1.0628
1.0591
1.0555
September 7
14 .
21
28
1.0027
.9992
.9954
.9926
October
5
12
19
26
November
December
Week ending
Currency
Total
At banks
1.0040
1.0084
1.0147
.9894
.9859
1.0032
.9880
.9829
.9848
1.0019
.9972
.9822
.9811
.9866
1.0001
1.0497
1.0430
1.0364
1.0297
1.0073
1.0155
.9868
.9774
.9953
.9914
.9944
.9957
.9895
.9884
.9949
1.0008
.9980
1.0019
.9980
.9953
1.0224
1.0142
1.0061
.9979
1.0073
.9968
1.0015
.9771
1.0040
.9880
.9896
.9841
.9946
.9784
.9881
.9913
2
9
16
24
30
.9956
1.0029
1.0014
.9994
1.0028
.9897
.9831
.9765
.9698
.9632
1.0071
.9993
.0188
.0034
.0329
1.0046
.9976
.9932
.9931
1.0062
1.0093
.9892
.9921
.9972
7
14
21
28
1.0052
1.0059
1.0105
1.0142
.9617
.9623
.9629
.9636
.0137
.0303
.0441
.0549
1.0045
.9974
1.0082
1.0186
.9934
.9942
1.0140
1.0304
4
11
18
25
1.0084
1.0032
.9987
.9935
.9635
.9616
.9598
.9580
.0789
.0345
.0088
.9723
1.0337
1.0217
1.0126
1.0015
1.0393
1.0210
1.0155
1.0161
1
8
15
22
.9913
.9973
.9977
.9947
.9562
.9570
.9584
.9597
.9741
.9801
.9804
.9686
1.0039
1.0015
.9869
.9882
1.0213
] .0034
March
1
8
15
22
29
.9937
.9998
.9987
.9975
.9969
.9611
.9659
.9713
.9768
.9823
.9824
.9917
.9936
.9696
.9818
1.0018
1.0021
.9952
.9976
1.0093
1.0094
.9949
.9934
1.0018
1.0185
April
5
1.0013
.9844
1.0065
1.0149
1.0118
998—August
3
17 ... .
24
31
999—January
February
.
1.0034
.9917
.9988
adjusted, and seasonally adjusted other checkable deposits at commercial banks.
1. Seasonally adjusted other checkable deposits at thrift institutions are
derived as the difference between total other checkable deposits, seasonally
4.
271
Weekly seasonal factors used to construct M2 and M3, December 1, 1997-April 5, 1999
Savings and
MMDA
depositsJ
Week ending
Smalldenomination
time deposits'
Largedenomination
time deposits'
Money market mutual funds
lnM2
In M3 only
RPs
Eurodollars
1997—December
1
8
15
22
29
.9918
1.0121
1 0059
.9937
.9802
.9983
.9982
9974
.9968
.9969
1.0093
1.0085
1.0071
1.0010
.9915
1.0022
1.0051
10096
1.0065
1.0005
1.0051
.0048
.0222
.0085
.0060
.9865
.9784
.9795
.9665
.9622
1.0063
.9990
1.0088
1.0110
1.0257
[998—January
5
12
19
26
1.0032
1.0055
.9989
.9837
.9988
.9994
.9995
.9993
.9816
.9857
.9855
.9856
.9884
1.0067
1.0099
1.0085
.9653
.0260
.0384
.0480
.9648
.9883
.9996
1.0079
1.0156
1.0190
.0253
.0271
February
2
9
16
23
.9841
1.0018
1.0006
.9899
.9998
1.0004
.0005
.0004
.9857
.9907
.9937
.9945
1.0065
1.0083
1.0069
1.0077
1.0223
1.0305
1.0319
1.0420
1.0106
1.0076
1.0046
.9921
.0177
.0108
.0141
.0195
March
2
9
16
23
30
.9929
1.0137
1.0124
1.0015
.9930
.0006
.0007
.0005
.0003
.0008
.9975
.9999
.9987
.9984
.9938
1.0099
1.0168
1.0181
1.0174
1.0131
1.0332
1.0330
1.0260
1.0238
1.0020
.9887
.9873
.9950
1.0008
1.0016
.0201
.0100
.0096
.0137
.0214
April
6
13
20
27
1.0184
1.0228
1.0034
.9817
.0016
.0013
.0012
.0009
.9903
.9923
.9920
.9959
1.0175
1.0238
1.0154
.9992
.9971
1.0040
.9910
.9862
.9972
.9980
1.0013
1.0060
.0096
.9972
.9947
1.0109
. .
. .
272
4.
Federal Reserve Bulletin • April 1998
Weekly seasonal factors used to construct M2 and M3, December 1, 1997-April 5, 1999—Continued
Week ending
Savings and
MMDA
deposits'
Smalldenomination
time deposits'
Largedenomination
time deposits'
Money market mutual funds
InM2
RPs
Eurodollars
In M3 only
1998—May
4
11
18
25
.9939
1.0027
1.0002
.9974
1.0012
1.0012
1.0010
1.0009
.9984
1.0024
1.0008
1.0039
.9842
.9829
.9832
.9874
.9767
.9821
.9838
.9801
1.0097
1.0130
1.0149
1.0155
1.0096
1.0000
1.0031
1.0136
June
1
8
15
22
29
.9966
1.0187
1.0106
.9962
.9861
1.0006
1.0009
1.0006
1.0002
1.0007
1.0051
1.0021
.9996
.9967
.9937
.9852
.9888
.9902
.9858
.9816
.9816
.9857
.9868
.9792
.9784
1.0232
1.0228
1.0249
1.0226
1.0109
1.0107
.9953
.9893
.9857
.9851
July
6
13
20
27
1.0105
1.0084
1.0003
.9921
1.0018
1.0014
1.0011
1.0005
.9925
.9970
1.0007
1.0009
.9853
.9944
.9962
.9952
.9861
.9954
.9911
.9902
1.0076
.9994
.9984
1.0022
.9762
.9724
.9739
.9838
August
3
10
17
24
31
1.0003
1.0120
1.0067
.9975
.9931
1.0008
1.0007
1.0004
.9999
.9994
1.0005
.9986
.9982
.0023
.0017
.9912
.9999
1.0055
1.0077
1.0054
.9743
.9915
.9955
1.0069
.9946
1.0000
1.0059
1.0067
.9986
.9970
.9893
.9837
.9831
.9886
.9978
September
7
14
21
28
1.0141
1.0102
.9918
.9773
.9995
.9993
.9990
.9991
.0017
.0050
.0054
.0047
1.0023
1.0019
.9952
.9895
.9874
.9963
.9897
.9753
.9911
.9897
.9929
.9963
.9854
.9832
.9875
.9991
October
5
12
19
26
1.0007
1.0072
.9992
.9843
1.0009
1.0010
.9997
.9990
1.0105
1.0179
1.0144
1.0168
.9869
.9948
.9954
.9953
.9754
.9909
.9933
.9894
.9968
1.0040
1.0129
1.0180
.9920
.9914
.9839
.9911
November
2
9
16
23
30
.9900
1.0096
1.0049
.9918
.9938
.9989
.9989
.9988
.9986
.9986
1.0153
.0140
.0112
.0103
.0099
.9942
.9948
.9967
1.0044
1.0008
.9931
.9929
.9966
1.0030
.9995
1.0125
1.0043
.9969
.9894
.9833
.9918
.9820
.9829
.9891
1.0027
December
7
14
21
28
1.0128
1.0037
.9924
.9818
.9984
.9978
.9972
.9973
.0083
.0078
.0019
.9936
1.0079
1.0088
1.0055
1.0007
1.0072
1.0289
1.0080
1.0029
.9793
.9760
.9675
.9647
1.0081
1.0112
1.0122
1.0204
4
11
18
25
1.0012
1.0066
1.0008
.9877
.9986
.9996
.9997
.9996
.9825
.9858
.9857
.9847
.9909
1.0043
1.0093
1.0074
.9744
1.0144
1.0363
1.0425
.9725
.9891
.9963
1.0020
1.0192
1.0194
1.0232
1.0249
February
1
8
15
22
.9845
1.0010
1.0016
.9910
.9999
1.0005
1.0005
1.0003
.9849
.9894
.9929
.9946
1.0053
1.0076
1.0073
1.0077
1.0254
1.0321
1.0340
1.0412
1.0077
1.0050
1.0056
.9953
1.0171
1.0091
1.0146
1.0194
March
1
8
15
22
29
.9920
1.0118
1.0099
1.0009
.9963
1.0002
1.0007
1.0005
.9998
.9999
.9966
.9993
.9991
.9983
.9946
1.0101
1.0148
1.0176
1.0188
1.0171
1.0324
1.0340
1.0293
1.0271
1.0036
.9924
.9915
.9970
.9993
1.0000
1.0246
1.0127
1.0141
1.0151
1.0214
April
5
1.0189
1.0002
.9897
1.0113
.9994
.9915
1.0076
1999—January
............
1. Seasonal factors are applied to deposits data at both commercial banks and thrift institutions.
273
Minutes of the
Federal Open Market Committee Meeting
Held on December 16, 1997
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
Wednesday, December 16, 1997, at 9:00 a.m.
Present:
Mr. Greenspan, Chairman
Mr. McDonough, Vice Chairman
Mr. Broaddus
Mr. Ferguson
Mr. Gramlich
Mr. Guynn
Mr. Kelley
Mr. Moskow
Mr. Meyer
Mr. Parry
Ms. Phillips
Ms. Rivlin
Messrs. Hoenig, Jordan, and Ms. Minehan, Alternate
Members of the Federal Open Market
Committee
Messrs. Boehne, McTeer, and Stern, Presidents of the
Federal Reserve Banks of Philadelphia, Dallas,
and Minneapolis respectively
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Kohn, Secretary and Economist
Bernard, Deputy Secretary
Coyne, Assistant Secretary
Gillum, Assistant Secretary
Mattingly, General Counsel
Baxter, Deputy General Counsel
Prell, Economist
Truman, Economist
Messrs. Beebe, Cecchetti, Eisenbeis, Goodfriend,
Lindsey, Promisel, Siegman, Slifman, and
Stockton, Associate Economists
Mr. Fisher, Manager, System Open Market Account
Mr. Winn, Assistant to the Board, Office of Board
Members, Board of Governors
Mr. Ettin, Deputy Director, Division of Research and
Statistics, Board of Governors
Messrs. Madigan and Simpson, Associate Directors,
Divisions of Monetary Affairs and Research and
Statistics respectively, Board of Governors
Messrs. Alexander, Hooper, and Ms. Johnson,
Associate Directors, Division of International
Finance, Board of Governors
Ms. Low, Open Market Secretariat Assistant,
Division of Monetary Affairs, Board of
Governors
Messrs. Connolly and Rives, First Vice Presidents,
Federal Reserve Banks of Boston and St. Louis
respectively
Mses. Browne, Krieger, Messrs. Dewald, Hakkio,
Lang, and Rosenblum, Senior Vice Presidents,
Federal Reserve Banks of Boston, New York,
St. Louis, Kansas City, Philadelphia, and Dallas
respectively
Mr. Miller, Vice President, Federal Reserve Bank of
Minneapolis
Messrs. Bryan and Evans, Assistant Vice Presidents,
Federal Reserve Banks of Cleveland and
Chicago respectively
By unanimous vote, the minutes of the meeting of
the Federal Open Market Committee held on November 12, 1997, were approved.
The Manager of the System Open Market Account
reported on developments in foreign exchange and
international financial markets in the period since the
previous meeting on November 12, 1997. There were
no open market transactions in foreign currencies for
System Account during this period, and thus no vote
was required of the Committee.
The Manager also reported on developments in
domestic financial markets and on System open market transactions in government securities and federal
agency obligations during the period November 12,
1997, through December 15, 1997. By unanimous
vote, the Committee ratified these transactions.
The Committee then turned to a discussion of the
economic outlook and the conduct of monetary policy over the intermeeting period ahead.
The information reviewed at this meeting suggested that economic activity had continued to grow
at a rapid pace in recent months. The further advance
274
Federal Reserve Bulletin • April 1998
reflected moderating but still sizable increases in
business fixed investment and consumer spending
and an upturn in business inventory accumulation.
Housing demand remained at a high level, and deepening trade deficits provided only a partial offset to
the strength in domestic spending. Against this background, employment and production posted further
large gains. Price inflation remained subdued despite
tight labor markets and some pickup in the rate of
wage increases.
Nonfarm payroll employment rose sharply further
in October and November. The increases in payrolls
were widespread across sectors, and in November
they included notably large gains in the serviceproducing industries. Manufacturing employment
also rose considerably further in November, and
aggregate weekly hours of production or nonsupervisory workers registered a particularly large advance
in that month. The civilian unemployment rate fell to
4.6 percent in November, its low for the current
expansion.
Industrial production continued to advance at a
brisk pace in October and November. The November
increase was widespread across market groups. It
featured particularly strong growth in the production
of durable goods, including a surge in the output of
motor vehicles and parts. Partly offsetting the strength
in the manufacturing sector in November was a
decline in mining activity and in utilities output after
two months of robust expansion. The large rise in
production boosted the rate of utilization of manufacturing capacity to its highest level in more than two
years.
Growth in consumer spending had moderated in
recent months from a very brisk pace during the
summer. Retail sales were unchanged on balance
over October and November after having increased
rapidly in the third quarter. The flat sales for the two
months reflected some softening in the durable goods
category, notably at automotive dealers, and relatively slow growth in the nondurable goods sector.
Consumer spending on services appeared to have
remained relatively robust in October. According
to recent surveys, consumer sentiment continued at
an extraordinarily ebullient level in the context of
further strong gains in jobs and incomes, the cumulative effect of large increases in household net
worth, and the ready availability of financing for
most consumers.
Available information suggested that business capital expenditures had moderated in recent months
from the exceptionally strong increases of the second
and third quarters. Shipments of office and computing equipment fell in nominal terms in October, while
shipments of communications equipment were about
unchanged after having posted strong gains earlier in
the year. Shipments of nondefense capital goods other
than aircraft and high tech equipment also declined in
October. Spending on nonresidential structures had
softened a bit in recent months.
In the housing sector, demand had continued to
display appreciable strength in recent months in association with relatively moderate mortgage rates and
very positive consumer assessments of homebuying
conditions. In October, the latest month for which
data were available, sales of new homes were well
maintained, and sales of existing homes rose. Housing starts increased somewhat in October and
November from the already high level reached earlier
in the year.
After having picked up considerably in September,
the pace of business inventory investment in October
remained above that recorded earlier in the summer.
The rise in stocks at the manufacturing level was at a
somewhat faster pace in October than in September,
but the buildup in inventories at the wholesale level,
and especially at the retail level, moderated in October. On balance, inventories remained at quite low
levels in relation to shipments and sales.
The nominal deficit on U.S. trade in goods and
services was significantly larger in the third quarter
than in the second. Exports of goods and services
rose only marginally in the third quarter, as increases
in machinery, industrial supplies, and service receipts
were nearly offset by sharp declines in exports of
aircraft and gold. Imports of goods and services rose
appreciably in the third quarter; the increases were
in most major trade categories and included strong
further advances in the quantity of oil imports. Economic growth in most major foreign industrial countries was relatively vigorous in the third quarter, and
preliminary indicators for the fourth quarter suggested continued above-trend expansion. However,
growth since midyear appeared to have recovered
only modestly in Japan from a sharp second-quarter
decline. The ongoing financial turmoil affecting a
number of Asian economies had led to a significant
slowdown in economic activity in the region. Available data also suggested a favorable economic performance in major Latin American countries in the
third quarter.
Consumer price inflation had remained at a low
level in recent months, reflecting a variety of influences including a favorable labor cost environment,
falling import prices, small increases in energy prices,
and declining inflation expectations. For the twelve
months ended in November, overall consumer prices
and consumer prices excluding food and energy items
Minutes of the Federal Open Market Committee
increased appreciably less than in the year-earlier
period. At the producer level, prices for finished
goods edged lower in November and the index was
down somewhat on balance over the past year, reflecting declines in the food and energy components.
The rate of increase in average hourly earnings had
picked up in recent months, apparently reflecting the
effects of an increase in the federal minimum wage
and some bidding up of wages in a tight labor market.
At its meeting on November 12, 1997, the Committee adopted a directive that called for maintaining
conditions in reserve markets that were consistent
with an unchanged federal funds rate averaging
around 5Vi percent. In the directive the Committee
retained a tilt toward a possible firming of reserve
conditions during the intermeeting period. Such a
bias was seen as consistent with the members' views
that the risks continued to be skewed toward rising
inflation and that the next policy move was more
likely to be in the direction of some finning than
toward easing. Reserve market conditions associated
with this directive were expected to be consistent
with some moderation in the growth of M2 and M3
over coming months.
Open market operations throughout the intermeeting period were directed toward maintaining reserve
conditions consistent with the intended average of
around 5l/i percent for the federal funds rate, and the
average effective rate over the period was close to
that rate level. In other domestic financial markets,
short-term interest rates registered small mixed
changes since the day before the Committee meeting
on November 12, 1997, while bond yields fell somewhat. Share prices in U.S. equity markets recorded
mixed changes over the period. Domestic financial
markets became somewhat less volatile over the
period, though further turmoil in a number of foreign
markets fostered a sense of unease that was reflected
in relatively wide yield spreads and, on occasion, in
trading activity and price movements. Equity markets
in other countries, notably in Asia, remained volatile.
In foreign exchange markets, the value of the dollar rose over the intermeeting period in terms of both
the trade-weighted index of the other G-10 currencies
and the currencies of a number of Asian countries.
The dollar's appreciation against the German mark
and other Western European currencies appeared
to reflect market perceptions that the prospects for
monetary tightening had ebbed in those countries in
light of the persistence of subdued inflation and indications that the continuing financial turmoil in Asian
and other emerging economies was likely to have a
retarding effect on the economies of the industrial
countries. The dollar's appreciation relative to the
275
yen appeared to reflect rising concerns about the
Japanese economy in the wake of continuing financial difficulties in Japan and spillover effects from
events elsewhere in Asia. The dollar strengthened
further in this period against most of the other East
Asian currencies, notably against the Korean won.
Growth in the broad monetary aggregates picked
up to relatively rapid rates in November. Strength in
currency and a surge in liquid deposits boosted the
expansion of M2, while that of M3 was amplified by
a step-up in RP borrowing to help finance more rapid
growth in bank credit. For the year through November, M2 expanded at a rate that was slightly above
the upper bound of the Committee's annual range and
M3 at a rate substantially above the upper bound of
its range. The increase in total domestic nonfinancial
debt for the year to date was at a pace somewhat
below the middle of the Committee's range.
The staff forecast prepared for this meeting suggested somewhat greater moderation in economic
expansion than had been projected earlier and slightly
less pressure on wages and prices. A number of
factors were expected to contribute to the slowing of
aggregate demand and reduced pressure on resources.
These included: a slackening in world economic
expansion that, in conjunction with the appreciation of the dollar, would substantially restrain U.S.
exports; some moderation of the growth in household
and business investment; and a diminution in the
desired rate of inventory accumulation.
In the Committee's discussion of current and prospective economic developments, members commented on indications that growth in economic activity had remained solid and that inflation had
continued to be surprisingly low. While wages
appeared to be increasingly subject to upward pressure, productivity had picked up in recent quarters,
and the persisting strength in profits suggested that
unit labor costs were not accelerating noticeably. The
evidently higher pace of productivity growth was
very encouraging, though it was still difficult to
assess how long this favorable performance might
last and the extent to which it might ease the price
pressures that could emerge if the economic expansion did not moderate as members anticipated.
Domestic demand for goods and services had been
quite strong and was likely to remain reasonably
robust. However, the effects of the persisting turmoil
in Asian financial markets were likely to moderate
the pace of expansion, though the extent of this effect
was difficult to judge. The ongoing turbulence since
the last Committee meeting, which included further
noticeable increases in the dollar against the currencies of affected countries, likely would have a some-
276
Federal Reserve Bulletin • April 1998
what greater damping effect on output and prices in
the United States than previously had been anticipated. Exports to many Asian countries, and possibly
to other U.S. trading partners whose economies might
be adversely affected by the spillover effects of developments in Asia, would be reduced, and declines in
import prices would ease inflation pressures. However, the ultimate extent of the adjustment in Asian
economies remained unknown, and more substantial
downward pressure on the economies of the United
States and its trading partners could not be ruled out.
With regard to the prospects for final demand in
key sectors, the members noted that the appreciation
of the dollar against a wide range of currencies, along
with the prospective slackening in world economic
expansion associated with the Asian turmoil, could
be expected to exert a considerable damping effect on
U.S. exports over the next several quarters. In addition, increased uncertainty about financial asset values, possibly related in part to further difficulties in
Asia, could lead to greater caution in spending, while
a substantial decline in equity values, should it occur,
would have a more pronounced effect by reducing
household wealth and raising the cost of equity capital. However, a number of members suggested that
consumer spending might hold up relatively well if
the effects of the Asian crisis on the U.S. economy
were not markedly deeper or more prolonged than
currently expected. To date, anecdotal reports indicated only scattered signs of weaker export demand,
primarily some slackening in orders for and shipments of selected commodities such as agricultural
goods and lumber and wood products, and there were
few indications of reduced demand for manufactured
goods. At the same time, business contacts were
optimistic about holiday sales, tourism was booming
in some parts of the country, and spending for services had been brisk. In the circumstances, continuing gains in wages and employment, the prevailing
high levels of confidence, the cumulative effects of
very large increases in household wealth in recent
years, and the intense competition among retailers for
the consumer's attention could promote substantial
further growth in consumer expenditures. The same
factors, along with the favorable cash flow affordability of home ownership, were maintaining housing
demand at a relatively high level.
The outlook for business fixed investment
remained favorable. In the near term, the low cost of
capital, the ready availability of finance on attractive
terms, and the potential for reducing production costs
in highly competitive markets were providing strong
support for capital spending. Moreover, shrinking
vacancy rates and rising lease rates were fostering a
rapid increase in the number of large commercial
building projects, notably office buildings, that were
planned or under way in many areas of the country.
Even so, the growth of business capital spending was
expected to slow from the unusually rapid pace of
recent quarters in response to the projected smaller
increases in sales and profits arising from moderating
economic growth. In addition, business firms were
expected to trim the pace of their inventory accumulation to keep stocks at desired levels relative to
sales.
In their comments on recent developments in labor
markets, the members emphasized the very limited
supply of new workers and the extraordinary tightness prevailing in markets throughout the nation.
Several reported that the scarcity of available workers was limiting the growth of economic activity in
some parts of the country and that some employers
were trying out novel approaches aimed at enticing
people not currently seeking a job to enter the work
force. While wage increases remained moderate on
balance, larger increases were gradually becoming
more pervasive as labor markets tightened. Moreover, employers were continuing their efforts to
attract or retain workers that were in particularly
scarce supply by means of a variety of bonus payments and other incentives that were not included in
standard measures of labor compensation. There also
were reports of offers of expanded benefits and, in
some instances, the granting of very large wage
increases to highly skilled technical personnel.
In the course of their discussion, many members
remarked on the absence of inflationary price pressures during a period when economic activity had
risen briskly and labor markets had grown steadily
tighter. The muted effect of higher labor compensation on unit labor costs and prices reflected sharp
advances in productivity partly associated with the
rapid expansion of the stock of capital; the latter had
been stimulated, most probably, by the desire to
enhance efficiency and thus hold down costs. In
addition, the earlier appreciation of the dollar and the
unusually damped increases in the cost of health
benefits in recent years had helped to limit the rise in
compensation.
As members had noted at previous meetings, these
favorable influences were likely to erode over time.
Anecdotal reports indicated that health insurance premiums were beginning to trend higher, and the dollar
would not rise indefinitely. More fundamentally, persistent tightness in labor markets risked a continuing
uptrend in labor compensation increases that, at some
point, could not be fully offset by productivity gains.
Under those circumstances, competitive market con-
Minutes of the Federal Open Market Committee
ditions would allow firms to raise prices to compensate for increases in their costs. However, for some
period ahead, developments associated with the turmoil in Asia along with the partly related appreciation of the dollar would tend to intensify import
competition and damp the prices of goods.
In the Committee's discussion of policy for the
intermeeting period ahead, nearly all the members
favored a proposal to maintain an unchanged policy
stance. In their discussion, members emphasized that
price inflation had remained subdued, indeed with
some key price measures indicating declining inflation, despite the persistence of robust economic
growth and high levels of resource use, notably in
labor markets. They expressed concern, however,
that multiplying indications of faster wage increases
might presage rising price inflation at some point.
Weighing against the risks of higher inflation was the
financial turmoil that had intensified in Southeast
Asia during October and more recently in Korea. The
effects of those developments on the U.S. economy
were quite limited thus far, but the members expected
some damping of economic expansion and price
increases in the quarters ahead, and they did not rule
out a potentially strong impact in the event of an even
deeper crisis in Asia or one that spread to other
countries. Nonetheless, many members commented
that, with domestic demand still quite strong and the
economy possibly producing beyond its potential,
they viewed the risks on balance as pointing to rising
price inflation and the next policy move as likely
to be in the direction of some tightening. However,
most members agreed that the need for such a policy
adjustment did not appear to be imminent and that
prevailing near-term uncertainties warranted a cautious wait-and-see policy posture. One member, while
acknowledging the downside risks to the expansion
associated with potential developments in Asia, still
was persuaded that the economy probably would
continue to expand at an unsustainable pace and that
monetary policy should be tightened promptly to
avert a further buildup of pressures in already strained
labor markets, associated increases in labor costs, and
at some point an inevitable rise in price inflation.
Other considerations cited by some members in
favor of an unchanged policy included the possibility
that, because a policy tightening move was not
expected at this juncture, even a modest firming
action might well have outsized effects in financial
markets, especially the foreign exchange markets.
Current conditions in domestic financial markets
clearly remained supportive of spending, but it also
was noted that the real federal funds rate was relatively high and that growth in the broad measures of
277
money was expected to moderate over coming
months after a period of robust expansion. The members agreed that the crosscurrents that were generating the present uncertainties in the outlook for economic activity and inflation made a flexible approach
to monetary policy particularly desirable at this
juncture.
Views were somewhat more divided with regard to
the instruction in the directive relating to the possible
adjustment of policy during the intermeeting period.
A majority of the members indicated a preference for
a shift to a symmetrical directive even though many
continued to anticipate that the next policy move was
likely to be in a tightening direction. They noted that
while the probability of any policy change in the near
term was very low, uncertainties in the outlook had
increased, and they could not rule out the possibility
that the next change might be in the direction of some
easing if, contrary to current expectations, the turmoil
in Asia were to intensify to the extent that it seemed
likely to exert very substantial effects on the U.S.
economy. A symmetric directive would position the
Committee to respond flexibly in either direction
to unanticipated developments in the period ahead.
Other members expressed a slight preference for
retaining a directive that was tilted toward tightening.
In their view, such a directive would continue to
underscore their concern that, at current and prospective levels of resource utilization, rising inflation
was the most serious risk to the economy and that the
Committee remained committed to fostering progress
toward a stable price environment that in turn would
heighten the prospects for sustained economic expansion and full employment.
At the conclusion of the Committee's discussion,
all but one member endorsed a directive that called
for maintaining conditions in reserve markets that
were consistent with an unchanged federal funds rate
of about 5'/2 percent 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 longrun objectives for price stability and sustainable economic growth, and giving careful consideration to
economic, financial, and monetary developments, the
Committee decided that a slightly higher or a slightly
lower federal funds rate might be acceptable during
the intermeeting period. The reserve conditions contemplated at this meeting were expected to be consistent with some moderation in the growth of M2 and
M3 over coming months.
The Federal Reserve Bank of New York was authorized and directed, until instructed otherwise by the
Committee, to execute transactions in the System
278
Federal Reserve Bulletin • April 1998
Account in accordance with the following domestic
policy directive:
The information reviewed at this meeting suggests that
economic activity continued to grow rapidly in recent
months. Nonfarm payroll employment increased sharply in
October and November; the civilian unemployment rate
fell to 4.6 percent in November, its low for the current
economic expansion. Industrial production continued to
advance at a brisk pace in October and November. Retail
sales were unchanged on balance over the two months after
rising sharply in the third quarter. Housing starts increased
slightly further in October and November. Available information suggests on balance that business fixed investment
will slow from the exceptionally strong increases of the
second and third quarters. The nominal deficit on U.S. trade
in goods and services widened significantly in the third
quarter from its rate in the second quarter. Price inflation
has remained subdued, despite some increase in the pace of
advance in wages.
Short-term interest rates have registered small mixed
changes since the day before the Committee meeting on
November 12, 1997, while bond yields have fallen somewhat. Share prices in U.S. equity markets recorded mixed
changes over the period; equity markets in other countries,
notably in Asia, have remained volatile. In foreign
exchange markets, the value of the dollar has risen over the
intermeeting period in terms of both the trade-weighted
index of the other G-10 countries and the currencies of a
number of Asian countries.
M2 and M3 grew rapidly in November. For the year
dirough November, M2 expanded at a rate slightly above
the upper bound of its range for the year and M3 at a rate
substantially above the upper bound of its range. Total
domestic nonfinancial debt has expanded in recent months
at a pace somewhat below the middle of its 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
reaffirmed the ranges it had established in February for
growth of M2 and M3 of 1 to 5 percent and 2 to 6 percent
respectively, measured from the fourth quarter of 1996 to
the fourth quarter of 1997. The range for growth of total
domestic nonfinancial debt was maintained at 3 to 7 percent for the year. For 1998, the Committee agreed on a
tentative basis to set the same ranges as in 1997 for growth
of the monetary aggregates and debt, measured from the
fourth quarter of 1997 to the fourth quarter of 1998. 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 andfinancialmarkets.
In the implementation of policy for the immediate future,
the Committee seeks conditions in reserve markets consistent with maintaining the federal funds rate at an average
of around 5'/2 percent. 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, a slightly
higher federal funds rate or a slightly lower federal funds
rate might be acceptable in the intermeeting period. The
contemplated reserve conditions are expected to be consistent with some moderation in the growth in M2 and M3
over coming months.
Votes for this action: Messrs. Greenspan, McDonough,
Ferguson, Gramlich, Guynn, Kelley, Meyer, Moskow,
Parry, Mses. Phillips and Rivlin. Vote against this action:
Mr. Broaddus.
Mr. Broaddus dissented because he continued to
believe that a modest tightening of policy would be
prudent in light of the apparent persisting strength in
aggregate demand for goods and services. He recognized the case for holding policy steady given recent
developments in East Asian economies and financial
markets; he believed, however, that a slight firming
at this meeting would provide valuable insurance
against the risk that demand growth might remain
above a sustainable trend and require a sharper policy
response later. He thought further that the potential
benefits of this insurance outweighed the risk that
such an action would have a significant negative
impact on U.S. economic activity. He also believed
that signaling a greater willingness to tolerate modest
policy adjustments in response to emerging developments would foster more flexible movements in
longer-term financial markets and specifically enable
longer-term interest rates to play their traditional
role as automatic stabilizers for the economy more
effectively.
It was agreed that the next meeting of the Committee would be held on Tuesday-Wednesday, February 3-4, 1998.
The meeting adjourned at 12:45 p.m.
Donald L. Kohn
Secretary
279
Legal Developments
ORDERS ISSUED UNDER BANK HOLDING COMPANY ACT
Orders Issued Under Section 3 of the Bank Holding
Company Act
First Financial Corporation
Terre Haute, Indiana
Order Approving the Acquisition of a Bank
First Financial Corporation ("FFC"), a bank holding company within the meaning of the Bank Holding Company
Act ("BHC Act"), has requested the Board's approval
under section 3 of the BHC Act (12 U.S.C. § 1842) to
acquire The Morris Plan Company of Terre Haute, Inc.
("MPC"), an insured bank organized as an industrial development and investment company operating in Terre
Haute, Indiana.
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(63 Federal Register 228 (1998)). The time for filing
comments has expired, and the Board has considered the
proposal and all comments received in light of the factors
set forth in section 3 of the BHC Act.
FFC is the 14th largest depository institution in Indiana,1
and controls eight subsidiary banks with approximately
$1.2 billion in deposits, representing approximately
1.6 percent of total deposits in commercial banking organizations in the state ("state deposits"). 2 MPC is the
185th largest depository institution in Indiana, controlling
approximately $33 million in deposits. On consummation
of the proposal, FFC would become the 13th largest depository institution in Indiana, controlling deposits of approximately $1.2 billion, representing 1.7 percent of state deposits.
Competitive Considerations
The BHC Act prohibits the Board from approving a proposal under section 3 of the BHC Act if the proposal would
result in a monopoly or if the effect of the proposal may be
substantially to lessen competition in any relevant market
unless the Board finds that the anticompetitive effects of
the proposed transaction are clearly outweighed in the
public interest by the probable effect of the transaction in
1. In this context, depository institutions include commercial banks,
savings banks, and savings associations.
2. State deposits are as of September 30, 1997.
meeting the convenience and needs of the community to be
served.
FFC and MPC compete directly in the Terre Haute,
Indiana, banking market.3 FFC is the largest depository
institution in the banking market, controlling deposits of
approximately $872 million, representing 47.4 percent of
the total deposits in depository institutions in the market
("market deposits"). 4 MPC is the eighth largest depository
institution in the market, controlling deposits of approximately $16.5 million, representing 0.9 percent of market
deposits. On consummation of this proposal, FFC would
control deposits of approximately $905 million, representing 48.8 percent of market deposits. Concentration in the
market, as measured by the Herfindahl-Hirschman Index
("HHI") would increase by 115 points to 3186.5
In evaluating the competitive effects of the proposal in
the Terre Haute banking market, the Board has considered
several factors that tend to mitigate the competitive effects
of the proposal. On consummation of the proposal, eight
competitors would remain in the market, including two of
the largest bank holding companies based in Indiana. Four
of these competitors, not including MPC, would each have
a market share of more than 5 percent, and the second and
third largest competitors in the market would have market
shares of 24.4 and 10.7 percent, respectively. Since 1995,
two banks have entered the market, one through the establishment of a de novo branch and one through the acquisition of a bank operating only in the Terre Haute banking
market.
3. The Terre Haute banking market consists of Clay and Vigo
Counties; Clinton and Helt Townships in Vermillion County; Florida,
Raccoon and Jackson Townships in Parke County; and Fairbanks.
Curry and Jackson Townships in Sullivan County, all in Indiana.
4. Market share data are as of June 30, 1997. These 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).
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 above 1800 is considered highly concentrated.
The Department of Justice has informed the Board that a bank merger
or acquisition generally will not be challenged (in the absence of other
factors indicating anticompetitive effects) unless the post-merger HHI
is at least 1800 and the merger increases the HHI by more than
200 points. The Department of Justice has stated that the higher than
normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of limitedpurpose lenders and other non-depository financial entities.
280
Federal Reserve Bulletin • April 1998
As in other cases, the Board sought comments from
the Department of Justice on the competitive eifects of the
proposal. The Department of Justice has reviewed the
proposal and advised the Board that consummation of
the proposal would not likely have any significantly adverse competitive eifects in the Terre Haute banking market or any other relevant banking market.
Based on all the facts of record, and for the reasons
discussed in this order, the Board concludes that consummation of the proposal is not likely to result in any significantly adverse effects on competition or on the concentration of banking resources in the Terre Haute banking
market or any other relevant banking market.
Other Factors
The BHC Act also requires the Board to consider the
financial and managerial resources and future prospects of
the companies and banks involved in the proposal, the
convenience and needs of the communities to be served,
and certain supervisory factors. The Board has reviewed
these factors in light of the record, including supervisory
reports of examination assessing the financial and managerial resources of the organizations and the Community
Reinvestment Act performance records of the institutions
involved, and financial information provided by FFC.
Based on all the facts of record, the Board concludes that
the financial and managerial resources and the future prospects of FFC, its subsidiary banks, and MPC are consistent
with approval, as are the other supervisory factors the
Board must consider under section 3 of the BHC Act. In
addition, considerations related to the convenience and
needs of the communities to be served are consistent with
approval of the proposal.
Voting for this action: Vice Chair Rivlin and Governors Kelley,
Phillips, Meyer, Ferguson, and Gramlich. Absent and not voting:
Chairman Greenspan.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
Indiana United Bancorp
Greensburg, Indiana
Order Approving the Acquisition of a Bank Holding
Company
Indiana United Bancorp ("Indiana United"), a bank holding company within the meaning of the Bank Holding
Company Act ("BHC Act"), has requested the Board's
approval under section 3 of the BHC Act (12U.S.C.
§ 1842) to acquire by merger P.T.C. Bancorp ("FTC"), and
thereby indirectly acquire its subsidiary bank, Peoples
Trust Company, Brookville, Indiana.
Notice of the proposal, affording interested persons
an opportunity to submit comments, has been published
(63 Federal Register 228 (1998)). The time for filing
comments has expired, and the Board has considered the
proposal and all comments received in light of the factors
set forth in section 3 of the BHC Act.
Indiana United is the 43d largest commercial banking
organization in Indiana, and controls one subsidiary bank
with approximately $273 million in deposits, representing
less than 1 percent of total deposits in commercial banking
organizations in the state ("state deposits").1 PTC is the
48th largest commercial banking organization in Indiana,
controlling approximately $251 million in deposits. On
consummation of the proposal, Indiana United would become the 27th largest commercial banking organization in
Indiana, controlling deposits of approximately $524 million, representing less than 1 percent of state deposits.
Competitive Considerations
Conclusion
Based on the foregoing, and in light of all the facts of
record, the Board has determined that the application
should be, and hereby is, approved. The Board's approval
is specifically conditioned on compliance by FFC with all
the commitments made in connection with this application.
For the purpose of this action, the commitments and conditions relied on by the Board in reaching its decisions 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 acquisition of MPC shall not be consummated before the fifteenth calendar day following the effective date
of this order, or later than three months after the effective
date of this order, unless such period is extended for good
cause by the Board or by the Federal Reserve Bank of
Chicago, acting pursuant to delegated authority.
By order of the Board of Governors, effective February 23, 1998.
The BHC Act prohibits the Board from approving a proposal submitted under section 3 of the BHC Act if the
proposal would result in a monopoly or if the effect of the
proposal may be substantially to lessen competition in any
relevant market unless the Boardfindsthat the anticompetitive eifects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the
transaction in meeting the convenience and needs of the
community to be served.
Indiana United and PTC compete directly in the Greensburg, Indiana, banking market.2 Indiana United is the
largest depository institution in the market,3 controlling
deposits of approximately $105 million, representing
42.5 percent of the total deposits in depository institutions
1. State deposit data are as of June 30, 1997.
2. The Greensburg banking market consists of Adams, Clinton,
Fugit, Clay, and Washington townships in Decatur County, Indiana.
3. In this context, depository institutions include commercial banks,
savings banks, and savings associations.
Legal Developments
in the market ("market deposits"). 4 PTC is the fifth largest
depository institution in the market, controlling deposits of
approximately $2 million, representing less than 1 percent
of market deposits. On consummation of the proposal,
Indiana United would control deposits of approximately
$107 million, representing 43.4 percent of market deposits.
Concentration in the market, as measured by the
Herfindahl-Hirschman Index ("HHI"), would increase by
74 points to 3627.5
In evaluating the competitive effects of the proposal in
the Greensburg banking market, the Board has considered
several factors that tend to mitigate the concentration of
banking resources in the market. The Greensburg banking
market is a relatively small rural market in central Indiana
that, upon consummation of the proposal, would continue
to be served by four bank holding companies and a thrift
organization, including a large multistate bank holding
company with more than $20 billion of assets. In addition,
the market appears to be relatively attractive for entry by
new competitors. Since 1995, two banks and one thrift
institution have entered the market by each establishing a
de novo branch, and the population and deposits per banking office in the market continue to exceed the average for
rural Indiana banking markets.
As in other cases, the Board has sought comments from
the Department of Justice and the Federal Deposit Insurance Corporation ("FDIC") on the competitive effects of
the proposal. The Department of Justice has reviewed the
proposal and advised the Board that consummation of the
proposal would not likely have any significantly adverse
competitive effects in the Greensburg banking market or
any other relevant banking market. The FDIC did not
object to consummation of the proposal or indicate it
would have any significantly adverse competitive effects in
the Greensburg banking market or any other relevant banking market.
Based on all the facts of record, and for the reasons
discussed in this order, the Board concludes that consummation of the proposal is not likely to result in any significantly adverse effects on competition or on the concentration of banking resources in the Greensburg banking
market or any other relevant banking market.
4. Market share data are as of June 30, 1997. These 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).
5. Under the revised Department of Justice Merger Guidelines, 49
Federal Register 26,823 (June 29, 1984), a market in which the
post-merger is above 1800 is considered highly concentrated. The
Department of Justice has informed the Board that a bank merger or
acquisition generally will not be challenged (in the absence of other
factors indicating anticompetitive effects) unless the post-merger HHI
is at least 1800 and the merger increases the HHI by more than 200
points. The Department of Justice has stated that the higher than
normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of limitedpurpose lenders and other non-depository financial entities.
281
Other Factors
The BHC Act also requires the Board to consider the
financial and managerial resources and future prospects of
the companies and banks involved in the proposal, the
convenience and needs of the communities to be served,
and certain supervisory factors. The Board has reviewed
these factors in light of the record, including supervisory
reports of examination assessing the financial and managerial resources of the organizations and financial information provided by Indiana United. Based on all the facts of
record, the Board concludes that the financial and managerial resources and the future prospects of Indiana United,
PTC, and their respective subsidiary banks are consistent
with approval, as are the other supervisory factors the
Board must consider under section 3 of the BHC Act. In
addition, considerations related to the convenience and
needs of the communities to be served are consistent with
approval of this proposal.
Conclusion
Based on the foregoing, and in light of all the facts of
record, the Board has determined that the application
should be, and hereby is, approved. The Board's approval
is specifically conditioned on compliance by Indiana
United with all the commitments made in connection with
this application. For the purpose of this action, the commitments and conditions relied on by the Board in reaching its
decisions 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 acquisition of PTC 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 Chicago,
acting pursuant to delegated authority.
By order of the Board of Governors, effective February 17, 1998.
Voting for this action: Chairman Greenspan and Governors Kelley,
Phillips, Meyer, Ferguson, and Gramlich. Absent and not voting:
Vice Chair Rivlin.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
National City Corporation
Cleveland, Ohio
Order Approving the Merger of Bank Holding
Companies
National City Corporation, Cleveland, Ohio ("National
City"), a bank holding company within the meaning of the
Bank Holding Company Act ("BHC Act"), has requested
the Board's approval under section 3 of the BHC Act
282
Federal Reserve Bulletin • April 1998
(12 U.S.C. § 1842) to merge with First of America Bank
Corporation, Kalamazoo, Michigan ("First of America"),
and thereby acquire First of America's subsidiary banks.
First of America Bank, N.A., Kalamazoo, Michigan
("FOA-Michigan"), and First of America Bank - Illinois,
N.A., Bannockburn, Illinois ("FOA-Illinois"). 1 National
City also has requested the Board's approval under section 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) and
section 225.24 of the Board's Regulation Y (12 C.F.R.
225.24) to acquire the nonbanking subsidiaries of First of
America and thereby engage in the nonbanking activities
listed in Appendix A.
Notice of the proposal, aifording interested persons an
opportunity to submit comments, has been published
(62 Federal Register 65,428 (1997)). The time for filing
comments has expired, and the Board has considered the
proposal and all comments received in light of the factors
set forth in sections 3 and 4 of the BHC Act.
National City, with total consolidated assets of approximately $52.7 billion, is the 20th largest commercial banking organization in the United States, controlling approximately 1.1 percent of total banking assets of insured
commercial banks in the United States ("total banking
assets"). 2 The subsidiary banks of National City operate in
Indiana, Kentucky, Ohio, and Pennsylvania. National City
also engages through other subsidiaries in a number of
permissible nonbanking activities. First of America, with
total consolidated assets of approximately $21.7 billion, is
the 39th largest commercial banking organization in the
United States, controlling less than 1 percent of total banking assets in the United States. First of America owns two
subsidiary banks that operate in Indiana, Illinois, and Michigan, and engages in a variety of permissible nonbanking
activities. On consummation of the proposal, and taking
into account all proposed divestitures, National City would
become the 13th largest commercial banking organization
in the United States, with total consolidated assets of
approximately $74.4 billion, representing approximately
1.5 percent of total banking assets in the United States.
As noted, National City and First of America both operate subsidiary banks in Indiana. National City is the third
largest depository organization in Indiana, controlling
$4.3 billion in deposits, representing approximately
6.5 percent of total deposits in insured depository institutions in the state.3 First of America is the 13th largest
depository organization in Indiana, controlling $1 billion in
deposits, representing approximately 1.5 percent of total
deposits in insured depository institutions in the state. On
consummation of the proposal, and taking into account all
1. National City and First of America also have requested approval
of options to purchase up to 19.9 percent of the voting stock of the
other institution if certain events occur. The options would expire on
consummation of the proposal.
2. Asset and ranking data are as of September 30, 1997. State
deposit and ranking data are as of June 30, 1997, and, as discussed in
the order, take into account National City's commitment to divest
certain deposits. Market data are as of June 30, 1996.
3. In this context, depository institutions include commercial banks,
savings banks, and savings associations.
proposed divestitures, National City would remain the third
largest depository organization in Indiana, controlling $5.2
billion in deposits, representing approximately 7.9 percent
of total deposits in depository institutions in Indiana.
Interstate Analysis
Section 3(d) of the BHC Act, as amended by Section 101
of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 ("Riegle-Neal Act"), 4 allows the Board
to approve an application by a bank holding company to
acquire control of a bank located in a state other than the
home state of such bank holding company, if certain conditions are met. For purposes of the BHC Act, the home state
of National City is Ohio, and First of America operates in
Indiana, Illinois, and Michigan.5 All of the conditions for
an interstate acquisition enumerated in section 3(d) are met
in this case.6 In view of all the facts of record, the Board is
permitted to approve the proposal under section 3(d) of the
BHC Act.
Competitive
Considerations
The BHC Act prohibits the Board from approving an
application under section 3 of the BHC Act if the proposal
would result in a monopoly, or if the proposal would
substantially lessen competition in any relevant banking
market and the Board has not found that the anticompetitive effects of the proposal are clearly outweighed in the
public interest by the probable effect of the proposal in
meeting the convenience and needs of the community to be
served.
National City and First of America compete directly in
the Toledo, Ohio, banking market and in the Indiana banking markets of Anderson, Fort Wayne, Gary, Indianapolis,
Kokomo, and Peru.7 Consummation of the proposal would
be consistent with the Department of Justice Merger Guide-
4. Pub. L. No. 103-328, 108 Stat. 2338 (1994).
5. 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.
12 U.S.C. § 1841(o)(4)(C).
6. See 12 U.S.C. §§ 1842(d)(l)(A) and (B) and 1842(d)(2)(A) and
(B). National City is adequately capitalized and adequately managed,
as defined by the Riegle-Neal Act. FOA-Illinois has been in existence
and continuously operated for at least the minimum period required
under Illinois law. See 205 111. Comp. Stat. 10/3.071 and 3.09 (Lexis
through 1997 Reg. Sess.). Indiana and Michigan have no minimum
age requirement. On consummation of the proposal, National City
would control less than 10 percent of the total amount of deposits of
insured depository institutions in the United States and less than
30 percent of the total amount of deposits of insured depository
institutions in Indiana, Illinois, and Michigan. All other requirements
of section 3(d) of the BHC Act also would be met on consummation
of the proposal.
7. National City has entered into a binding contract to sell its only
branch in the Peru, Indiana, banking market ("Peru banking market")
to an out-of-market banking organization. In this light, concentration
in this banking market would not increase as a result of the proposal.
Legal Developments
lines8 and prior Board precedent as discussed in Appendix B in all of those banking markets except the Anderson,
Indiana, banking market ("Anderson banking market")- 9
In order to mitigate the potential anticompetitive effects
of the proposal in the Anderson banking market, National
City has committed to divest two First of America branches
controlling total deposits of approximately $33.9 million.10
After accounting for the proposed divestitures, National
City would remain the largest depository institution in the
Anderson banking market, controlling deposits of approximately $402.6 million, representing approximately
34.3 percent of total deposits controlled by depository
institutions in the banking market ("market deposits"). 11
Concentration in the market, as measured by the HHI,
would increase 357 points to 2004.
In considering the competitive effects of the proposal,
the Board has evaluated the competition provided by two
savings associations and has concluded that deposits controlled by those institutions should be weighted at
100 percent. 12 In this light, the HHI would increase
8. Under the Department of Justice Merger Guidelines, 49 Federal
Register 26,823 (June 29, 1984), a market in which the post-merger
Herfindahl-Hirschman Index ("HHI") is above 1800 is considered
highly concentrated. The U.S. Department of Justice ("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.
9. The Anderson banking market is an area in Indiana that is
approximated by Madison County except for Greene Township;
Salem Township in Delaware County; Falls Creek Township in Henry
County; and Madison Township in Tipton County.
10. National City has committed to execute sales agreements with
an out-of-market commercial banking organization prior to consummation of the acquisition of First of America and to complete the
divestitures within 180 days of consummation of the acquisition.
National City also has committed that, in the event it is unsuccessful
in completing any divestiture within 180 days of consummation of the
proposal, including the sale of National City's branch in the Peru
banking market, National City will transfer the unsold branch(es) to
an independent trustee that is acceptable to the Board and that will be
instructed to sell the branches promptly. BankAmerica Corporation,
78 Federal Reserve Bulletin 338 (1992); United New Mexico Financial Corporation, 77 Federal Reserve Bulletin 484 (1991). National
City has further committed that, prior to consummation, it will submit
to the Board an executed trust agreement acceptable to the Board
stating the terms of these divestitures.
11. 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 Midwest Financial Group, 75 Federal
Reserve Bulletin 386 (1989); National City Corporation, 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).
12. The Board previously has indicated that, when analyzing the
competitive effects of a proposal, it may consider the competitiveness
of savings associations at a level greater than 50 percent of the savings
associations's deposits if appropriate. See Banknorth Group, Inc.,
75 Federal Reserve Bulletin 703 (1989). In the Anderson banking
283
323 points to 1853, and the effect of the proposal on market
concentration as measured by the HHI would be relatively
small. In addition, some mitigating considerations offset
the proposal's limited effect on competition. In addition to
National City, eight commercial bank competitors would
remain in the market after consummation. One large multistate bank holding company competitor would control
more than 18 percent of market deposits. The proposal also
would not decrease the number of competitors in the
Anderson banking market because National City has proposed to divest its branches to an out-of-market commercial banking organization. Although measures of the attractiveness of the Anderson banking market for entry are
mixed, the Board notes that there recently has been de novo
entry by a banking organization and entry by acquisition
by a large multi-state banking organization.
As in other cases, the Board sought comments from the
Justice Department and the Office of the Comptroller of the
Currency ("OCC") on the likely competitive effects of this
case. The Justice Department has advised the Board of the
Department's view that, in light of the proposed divestitures, consummation of the proposal would not be likely to
have a significantly adverse competitive effect in the
Anderson banking market or in any other relevant banking
market. The OCC did not object to consummation of the
proposal or indicate that the proposal would have any
significantly adverse competitive effects in any banking
market.
Based on these and all other facts of record, and for the
reasons discussed in this order, the Board concludes that
consummation of the proposal would not result in any
significantly adverse effects on competition or on concentration of banking resources in the Anderson banking market or in any other relevant banking market.
Other Factors under the BHC Act
The BHC Act also requires the Board, in acting on an
application, to consider the financial and managerial resources and future prospects of the companies and banks
involved in a proposal, the convenience and needs of the
community to be served, and certain other supervisory
factors.
A. Financial, Managerial, and Other Supervisory
Factors
The Board has carefully considered the financial and managerial resources and future prospects of National City,
First of America, and their respective subsidiary banks,
market, the two savings associations maintain 5.9 percent and 6.3
percent, respectively, of their assets in commercial loans, compared to
the national average for thrifts of 1.7 percent. In addition, informal
interviews with employees of the savings associations showed that
each savings association maintained separate commercial lending
departments with at least eight commercial lending officers and each
planned to increase its staff. The institutions also offered customers a
variety of business products and services.
284
Federal Reserve Bulletin • April 1998
and other supervisory factors. The Board notes that the
bank holding companies and their subsidiary banks are
well capitalized and are expected to remain so after consummation of the proposal. The Board also has considered
other aspects of thefinancialcondition and resources of the
two organizations, the structure of the proposed transaction, the managerial resources of each of the entities and
the proposed combined organization, the Board's supervisory experience with National City and First of America,
and examinations by relevant federal supervisors assessing
the financial and managerial resources of the entities.
Based on all the facts of record, including relevant reports
of examinations of the companies and the banks involved
in this proposal, the Board has concluded that considerations relating to the financial and managerial resources
and future prospects of National City, First of America,
and their respective subsidiaries are consistent with approval of the proposal, as are the other supervisory factors
that the Board must consider under section 3 of the BHC
Act.
B. Convenience and Needs Considerations
The Board also has carefully considered the effect of the
proposal on the convenience and needs of the communities
to be served in light of all the facts of record, including
comments on the effects the proposal would have on the
communities to be served by the combined organizations.
The Board received several comments in favor of the
proposal. One community organization commended National City's efforts in ascertaining and assisting to meet
the credit needs of low- and moderate-income ("LMI")
neighborhoods in Pittsburgh, Pennsylvania, after it acquired a Pennsylvania bank in 1995. The commenter noted
that National City had improved the bank's good record of
lending in LMI communities and communities with predominately African-American residents ("minority communities") and expressed confidence that National City
would continue this trend in the communities served by
First of America.
The Board also received comments from the Woodstock
Institute ("Commenter") opposing the proposal and contending that First of America has an inadequate record in
the Chicago area of making housing-related loans in minority communities and small business loans in LMI census
tracts. Commenter also challenged First of America's delineated community because it does not include inner city
LMI communities in Chicago.
The Board has long held that consideration of the convenience and needs factor includes a review of the records of
the relevant depository institutions under the Community
Reinvestment Act (12U.S.C. §2901 et seq.) ("CRA").
National City has indicated that it would implement its
CRA policies and programs in communities currently
served by First of America. In this light, the Board has
given substantial consideration to National City's record.
In general, the Board notes that National City's subsidiary
banks provide a range of financial services including loans
for 1-4 family dwellings, affordable housing, and small
businesses. National City also has indicated that the proposed transaction would provide First of America's customers with access to specialized products, including a
Lifeline checking product for LMI customers and 24-hour
telephone banking and bill-paying services.
CRA Performance Examinations. As provided in the
CRA, the Board evaluates the convenience and needs
factor in light of examinations of the CRA performance
records of the relevant institutions by their primary federal
supervisors. An institution's most recent CRA performance evaluation is a particularly important consideration
in the applications process because it represents a detailed,
on-site evaluation of the institution's overall record of
performance under the CRA by its primary federal supervisor.13
National City's lead bank, National City Bank, Cleveland, Ohio, received an "outstanding" rating from the
OCC at its most recent examination, as of December 31,
1996 ("1996 Examination"). All of National City's other
subsidiary banks also received "outstanding" ratings from
their primary federal supervisors at their most recent examinations for CRA performance. In addition. First of America's subsidiary banks, FOA-Illinois and FOA-Michigan,
received "outstanding" ratings from the OCC as of
March 31, 1996.
Lending Record of National City. National City has
several lending programs designed to assist in meeting the
housing-related credit needs of LMI and minority borrowers. For example, National City offers a RIGHT affordable
home mortgage product that provides flexible underwriting
guidelines to first-time home buyers with limited incomes
and to those purchasing homes within LMI areas. In 1996,
National City Bank originated 367 loans totalling
$19.9 million under the program. National City also offers
the "At Home Loan" to provide unsecured small home
improvement loans to qualified borrowers with annual
household incomes of $25,000 or less.
National City also intends to expand the activities of the
National City Community Development Corporation
("NCCDC") to include the communities served by First of
America's subsidiary banks. NCCDC currently offers the
CHAMP affordable home mortgage product, which provides low interest mortgages to purchasers of homes in the
City of Cleveland that have been built or renovated. In
1996, National City Bank originated 22 loans totalling
$2.4 million under the program.
National City actively engages in small business lending. National City Bank originated 1,548 small business
loans totalling $172.7 million in 1996. Small business
lending activities included programs sponsored by federal,
state, and local government agencies. In 1996, National
13. The Statement of the Federal Financial Supervisory Agencies
Regarding the Community Reinvestment Act ("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 reports of these examinations will be given great weight in
the applications process. See 54 Federal Register 13,742 and 13,745
(1989).
Legal Developments
City Bank originated 16 loans totalling $2.2 million under
programs sponsored by the Small Business Administration.14 In addition, the bank participates in the State of
Ohio Linked Deposit Program ("Linked Deposit Program"), which links state treasury deposits to small business loans. In 1996, National City Bank originated
15 loans totalling $5 million under the Linked Deposit
Program.
The Board also has considered National City's record of
lending to African-American borrowers. For example,
1996 data provided under the Home Mortgage Disclosure
Act (12U.S.C. §2801 et seq.) ("HMDA") by National
City Bank and National City Mortgage Company, Miamisburg, Ohio, for the bank's assessment area indicate that
National City's percentage of originations to AfricanAmerican applicants was higher than that for the aggregate
of all HMDA reporters the assessment area. National City
originated 12.7 percent of its home mortgage purchase
loans to African Americans compared to 11.1 percent for
all lenders in the aggregate.
Moreover, examiners did not find any evidence of prohibited discrimination or illegal credit practices at any of
the subsidiary banks of National City or First of America
in their most recent CRA performance examinations. In
addition, examiners noted that National City's subsidiary
banks provided training in fair lending laws and principles
to all applicable employees, and had implemented steps
such as a second review program to ensure compliance
with fair lending laws.
FOA-Illinois's Delineated Communities. Commenter
challenged the community delineation used by FOAIllinois in the Chicago area. The reasonableness of an
institution's local delineated community depends on a
number of factors, including a careful review of the areas
surrounding the locations of an institution's main office,
branches and deposit-taking automated teller machines.
The review of an institution's delineated community also
requires consideration of whether the institution has arbitrarily excluded LMI areas, taking into account the institution's size and financial condition. The Board believes that
an assessment of an institution's delineated community can
be most effectively considered in an on-site examination by
the institution's primary federal supervisor. The Board also
believes that an on-site examination provides a better opportunity to consider whether an institution's delineated
community reflects illegal discrimination in light of all the
institution's lending activities.
At the time of its most recent CRA performance examination in March 1996, FOA-Illinois operated 129 branches
in 29 counties in Illinois, and the bank's delineated communities consisted of those counties.15 FOA-llIinois se-
14. National City Bank also participates in the City of Cleveland
Microloan program which offers "start-up" assistance for small businesses.
15. FOA-Illinois divided its service communities into five regions:
Metro-Chicago, Northern, Eastern, Southern and Western. The MetroChicago and Northern regions include the majority of the counties of
the Chicago Metropolitan Statistical Area.
285
lected those counties for its delineated community using a
methodology permitted by regulations in effect at the
time.16 Examiners concluded that FOA-Illinois's delineation was reasonable and did not arbitrarily exclude LMI
areas.17 The Board also has considered confidential supervisory information from the OCC regarding Commenter's
contentions that FOA-Illinois's delineated community
should include all of Chicago. Moreover, the Board notes
that National City intends to reevaluate FOA-Illinois's
delineated communities after consummation of the proposal.
Conclusion on Convenience and Needs Considerations.
The Board has carefully considered all the facts of record,
including the public comments received, responses to those
comments, and the CRA performance records of the subsidiary banks of National City and First of America, including relevant reports of examination. Based on a review of
the entire record, and for the reasons discussed in this
order, the Board has concluded that convenience and needs
considerations, including the CRA records of performance
of the subsidiary banks of National City and First of
America, are consistent with approval.
Nonbanking Activities
A. Activities Approved by Regulation
The Board previously has determined by regulation that
the proposed lending, trust company, financial and investment advisory, securities brokerage, other transactional,
credit insurance, and community development activities
are closely related to banking within the meaning of section 4(c)(8) of the BHC Act.18 National City proposes to
conduct these activities in accordance with Regulation Y
and relevant Board interpretations and orders.
B. Underwriting and Dealing in Bank-Ineligible
Securities
National City also has proposed to acquire First of America Securities, Inc., Kalamazoo, Michigan ("FOA Securities"), and merge it with NatCity Investments, Cleveland,
Ohio ("Company"). FOA Securities currently is engaged,
among other things, in underwriting and dealing in, to a
limited extent, municipal revenue bonds, 1-4 family
16. When FOA-Illinois delineated its service communities, a bank
could use any one of the following methods for delineation:
(1) The existing boundaries, such as those of standard metropolitan
statistical areas or counties in which the bank's office or offices are
located, and adjacent areas, if appropriate;
(2) The local areas around each office or group of offices where it
makes a substantial portion of its loans and all other areas equidistant from its offices; or
(3) Any other reasonable delineation that meets the purpose of the
CRA and does not exclude LMI neighborhoods. See. e.g., 12 C.F.R.
228.3(b) (1996).
17. Examiners also noted that in 1995. FOA-Illinois originated
33 percent of its loans in its Metro-Chicago region in LMI areas.
18. See 12 C.F.R. 225.28(b)(l), (5), (6), (7)(i), (8), (11), and (12).
286
Federal Reserve Bulletin • April 1998
mortgage-related securities, consumer receivable-related
securities, and commercial paper.19 Company engages in
securities-related activities, including underwriting and
dealing in, to a limited extent, all types of debt and equity
securities ("bank-ineligible securities").20 The Board has
determined—subject to the framework of prudential limitations to address the potential for conflicts of interests,
unsound banking practices, or other adverse effects—that
the proposed underwriting and dealing activities are so
closely related to banking as to be a proper incident thereto
within the meaning of section 4(c)(8) of the BHC Act.21
National City has committed that Company will conduct
its bank-ineligible securities underwriting and dealing activities subject to the Board's 25 percent revenue limit.22
As a condition of this order, National City is required to
conduct its bank-ineligible securities activities subject to
the Operating Standards for section 20 subsidiaries ("Operating Standards") and the conditions in the Board's orders
permitting National City to engage in limited bankineligible securities activities through Company.21
C. Other Nonbanking Considerations
In order to approve this proposal, the Board also must
determine that the proposed activities are a proper incident
to banking, that is, that the proposed transaction "can
reasonably be expected to produce benefits to the public . . .
that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition,
conflicts of interests, or unsound banking practices."24 As
part of its evaluation of these factors, the Board considers
the financial and managerial resources of the notificant, its
subsidiaries, and any company to be acquired, and the
19. See First of America Corporation, 80 Federal Reserve Bulletin
1120(1994).
20. See National City Corporation, 81 Federal Reserve Bulletin 807
(1995); National City Corporation, 80 Federal Reserve Bulletin 346
(1994), (together, "National City Orders").
21. See Citicorp, 73 Federal Reserve Bulletin 473 (1987), aff'd sub
nom. Securities Industry Ass 'n 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 Review of Restrictions on Director,
Officer and Employee Interlocks, Cross-Marketing Activities, and the
Purchase and Sale of Financial Assets Between a Section 20 Subsidiary and an Affiliated Bank or Thrift, 61 Federal Register 57,679
(1996). and Amendments to Restrictions in the Board's Section 20 Orders, 62 Federal Register 45,295 (1997), (collectively, the
"Section 20 Orders").
22. Compliance with the revenue limitation shall be calculated in
accordance with the method stated in the Section 20 Orders, as
modified by the Order Approving Modifications to the Section
20 Orders, 75 Federal Reserve Bulletin 751 (1989). and 10 Percent
Revenue Limit on Bank-Ineligible Activities of Subsidiaries of Bank
Holding Companies Engaged in Underwriting and Dealing in Securities, 61 Federal Register 48,953 (1996), and Revenue Limit on BankIneligible Activities of Subsidiaries of Bank Holding Companies Engaged in Underwriting and Dealing in Securities, 61 Federal Register
68,750 (1996), (collectively, "Modification Orders").
23. See 12 C.F.R. 225.200; National City Orders.
24. See 12U.S.C. § 1843(c)(8).
effect the transaction would have on such resources.25 The
Board has reviewed the capitalization of National City and
Company in accordance with the standards set forth in the
Section 20 Orders and finds the capitalization of each to be
consistent with approval. The determination of the capitalization of Company is based on all the facts of record,
including National City's projections of the volume of
Company's underwriting and dealing activities in bankineligible securities. Based on all the facts of record, the
Board has concluded that financial and managerial considerations are consistent with approval.
The Board also has carefully considered the competitive
effects of the proposed acquisition of First of America's
nonbanking subsidiaries. National City operates nonbanking subsidiaries that compete with certain nonbanking subsidiaries of First of America. In each case, the markets for
the nonbanking services are unconcentrated, and there are
numerous providers of the services. As a result, consummation of this proposal would have a de minimis effect on
competition for these services, and the Board has concluded that the proposal would not result in a significantly
adverse effect on competition in any relevant market.
The Board expects, moreover, that the acquisition of
First of America by National City would provide added
convenience to First of America customers, to National
City's customers, and to other members of the public.
Consummation of the proposal also is likely to result in
increased operating efficiencies and expanded services to
customers of both National City and First of America.
Under the framework established in this order and the
Section 20 Orders, and based on all the facts of record, the
Board concludes that Company's proposed underwriting
and dealing activities are not likely to result in significantly
adverse effects that would outweigh the public benefits
expected in this case. Similarly, the Board finds no evidence that National City's proposed lending, trust company, financial and investment advisory, securities brokerage, other transactional, credit insurance, and community
development activities—conducted under the framework
established in this order and Regulation Y—would likely
result in any significantly adverse effects that would outweigh the public benefits of the proposal. Accordingly, the
Board has determined that the performance of the proposed
activities by National City is a proper incident to banking
for purposes of section 4(c)(8) of the BHC Act.
Conclusion
Based on the foregoing and all the other facts of record, the
Board has determined that the application and notice
should be, and hereby are, approved subject to all the terms
and conditions in this order and the Section 20 Orders as
modified by the Modification Orders. The Board's approval is specifically conditioned on compliance by
25. See 12 C.F.R. 225.26; see also The Fuji Bank, Limited,
75 Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG,
73 Federal Reserve Bulletin 155 (1987).
Legal Developments
National City with all the commitments made in connection with the proposal, including the divestiture commitments discussed in this order.
The Board's determination on the nonbanking activities
also is subject to all the terms and conditions set forth in
Regulation Y, including those in sections 225.7 and
225.25(c) of Regulation Y (12 C.F.R. 225.7 and 225.25(c)),
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. 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 acquisition of First of America's subsidiary banks
shall not be consummated before the fifteenth calendar day
following the effective date of this order, and the proposal
shall not be consummated later than three months after the
effective date of this order, unless such period is extended
for good cause by the Board or by the Federal Reserve
Bank of Cleveland, acting pursuant to delegated authority.
By order of the Board of Governors, effective February 11, 1998.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Phillips, Meyer, Ferguson, and Gramlich.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
Appendix A
Nonbank subsidiaries
acquired by National
of First of America
City:
to be
(1) First of America Community Development Corporation, Kalamazoo, Michigan, and thereby engage in community development activities pursuant to section
225.28(b)(12) of Regulation Y (12 C.F.R. 225.28(b)(12));
(2) SunAmerica Affordable Housing Partners, Carson City,
Nevada, and engage in thereby engage in community development activities pursuant to section 225.28(b)(12) of
Regulation Y (12 C.F.R. 225.28(b)(12));
(3) First of America Insurance Company, Kalamazoo,
Michigan, and thereby engage in credit insurance activities
pursuant to section 225.28(b)(ll) of Regulation Y
(12 C.F.R. 225.28(b)(ll);
(4) First of America Trust Company, Oak Brook, Illinois,
and thereby engage in trust company functions and investment advisory activities pursuant to sections 225.28(b)(5)
and (6) of Regulation Y (12 C.F.R. 225.28(b)(5) and (6));
(5) New England Trust Company, Providence, Rhode
Island, and thereby engage in trust company functions and
investment advisory activities pursuant to sections
225.28(b)(5) and (6) of Regulation Y (12 C.F.R.
225.28(b)(5) and (6)); and
287
(6) First of America Securities, Inc., Kalamazoo, Michigan, and thereby engage in lending, investment advisory,
securities brokerage, and other transactional activities pursuant to sections 225.28(b)(l), (6), (7i), and (8) of Regulation Y (12 C.F.R. 225.28(b)(l), (6), (7i), and (8)), and
underwriting and dealing in, to a limited extent, municipal
revenue bonds, 1-4 family mortgage-related securities,
consumer receivable-related securities, and commercial
paper.
Appendix B
Banking markets in which consummation of the
proposal would not exceed the DOJ Guidelines:
(1) Fort Wayne Banking Market: The Fort Wayne banking
market is approximated by Allen, De Kalb and Whitley
Counties; Preble, Root, and Union Townships in Adams
County; Union and Jefferson Townships in Wells County;
Jackson and Union Townships in Huntington County;
Noble, Green, and Swan Townships in Noble County, all in
Indiana, and Carryall Township in Paulding County and
Hicksville Township in Defiance County, both in Ohio.
After consummation of the proposal, National City would
control less than 1 percent of market deposits and would
remain the 20th largest depository institution in the market.
The HHI would not increase.
(2) Gary-Hammond Banking Market: The Gary-Hammond
banking market is approximated by Lake County; Porter
County, except for Pine Township; and New Durham,
Clinton, Cass, Dewey, and Prairie Townships in La Porte
County, all in Indiana. After consummation of the proposal, National City would control approximately 2.9 percent of market deposits and would remain the tenth largest
depository institution in the market. The HHI would not
increase.
(3) Indianapolis Banking Market: The Indianapolis banking market is approximated by Boone, Hamilton, Hancock,
Hendricks, Johnson, Marion, Morgan, and Shelby Counties, and Green Township in Madison County, all in Indiana. After consummation of the proposal, National City
would control approximately 21.8 percent of market deposits and would become the second largest depository institution in the market. The HHI would increase by 133 points
to 1685.
(4) Kokomo Banking Market: The Kokomo banking market
is approximated by Howard County; Prairie and Liberty
Townships in Tipton County; Tipton, Deer Creek, and
Jackson Townships in Cass County; and Deer Creek and
Clay Townships in Miami County, all in Indiana. After
consummation of the proposal, National City would control approximately 19.7 percent of market deposits and
would remain the third largest depository institution in the
market. The HHI would increase by 57 points to 2000.
(5) Toledo Banking Market: The Toledo banking market is
approximated by Lucas County, Wood County, excluding
the City of Fostoria; the eastern half of Swan Creek Township and the southeastern quadrant of Fulton Township in
Fulton County; Clay, Allen, Harris, Benton Townships in
288
Federal Reserve Bulletin • April 1998
Ottawa County; and Woodfield Township in Sandusky
County, all in Ohio; and Whiteford, Bedford, and Erie
Townships in Monroe County, Michigan. After consummation of the proposal, National City would control approximately 14.1 percent of market deposits and would become
the 21st largest depository institution in the market. The
HH1 would increase by 5 points to 1202.
Shore Financial Corporation
Onley, Virginia
Order Approving Formation of a Bank Holding
Company, Merger of a Savings Association into a Bank,
and Membership in the Federal Reserve System
Shore Financial Corporation ("Shore Financial") has applied under section 3 of the Bank Holding Company Act
("BHC Act") (12 U.S.C. § 1842) for the Board's approval
to become a bank holding company by acquiring all the
voting shares of Shore Bank, Onley, Virginia ("Bank"), a
de novo state chartered bank.1 Bank also has applied under
section 9 of the Federal Reserve Act (12 U.S.C. § 321) to
become a state member bank and to continue to operate
branches in Virginia and Maryland at locations at which
Bank's predecessor currently operates branches.2
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(62 Federal Register 66,371 (1997)). 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 the BHC Act, the Bank Merger Act, and
the Federal Reserve Act.
Shore Financial, with total consolidated assets of approximately $111 million, operates Thrift, which has branches
in Virginia and Maryland.3 Shore is the 95th largest insured depository institution in Virginia, controlling deposits of approximately $79 million, representing less than
1 percent of total deposits in insured depository institutions
in the state ("state deposits"), and is the 142d largest
insured depository institution in Maryland, controlling deposits of approximately $8 million, representing less than
1 percent of Maryland state deposits.4
As noted, the proposal represents a reorganization of
subsidiaries owned by Shore Financial, and Bank would
continue the current operations of Thrift. Based on all the
facts of record, the Board concludes that consummation of
t. Shore Financial's wholly owned subsidiary federal savings bank,
Shore Bank, Onley, Virginia ("Thrift"), would merge with and into
Bank, with Bank as the surviving institution. Bank has requested the
Board's approval for the merger under section 18(c) of the Federal
Deposit Insurance Act ("FDI Act") (12 U.S.C. § 1828(c)) ("Bank
Merger Act") and section 5(d)(3) of the FDI Act (12 U.S.C.
§ 1815(d)(3)).
2. The locations of the branches are described in the Appendix.
3. Asset data are as of September 30, 1997, and deposit data are as
of June 30, 1996.
4. In this context, insured depository institutions include commercial banks, savings banks, and savings institutions.
the proposal would not have a significantly adverse effect
on competition in any relevant banking market.
The Board also has considered the financial and managerial resources and future prospects of Shore Financial and
Bank in light of all the facts of record, including supervisory reports of examination assessing the financial and
managerial resources of the organization and financial information provided by Shore Financial. The Board notes
that Shore Financial is in satisfactory financial condition
and would remain so after consummation of the proposal.
Reports of examination assessing the managerial resources
of Shore Financial and its subsidiaries indicate this factor
is consistent with approval. Based on all the facts of
record, the Board concludes that considerations related to
the financial and managerial resources and future prospects
of Shore Financial and Bank are consistent with approval
under the BHC Act.
Convenience and Needs Considerations
The Board has carefully considered the effect of the proposal on the convenience and needs of the community to
be served in light of all the facts of record, including
comments maintaining that Thrift does not adequately
serve the credit needs of commercial farmers in its assessment area and requesting the Board to require Bank to
increase its agricultural lending. The Board has long held
that consideration of the convenience and needs factor
includes a review of the records of the relevant depository
institutions under the Community Reinvestment Act
(12 U.S.C. §2901 el seq.) ("CRA"). As provided in the
CRA, the Board has evaluated the convenience and needs
factor in light of examinations of the CRA performance
records of the relevant institutions by their primary federal
supervisors. An institution's most recent CRA performance evaluation is a particularly important consideration
in the application process because it represents a detailed,
on-site evaluation of the institution's overall record of
performance under the CRA by its primary federal supervisor.5
Thrift is a small saving association that is primarily
engaged in residential mortgage lending. Thrift received an
"outstanding" rating from the Office of Thrift Supervision
at its most recent CRA performance examination as of
February 1996 (the "1996 Examination"). Examiners characterized Thrift as having a strong record of lending within
its assessment area (approximately 98 percent of its loans),
a high loan-to-deposit ratio (92.5 percent), and an excellent
dispersion of loans throughout all the communities within
its assessment area. The 1996 Examination found Thrift's
overall lending program to be particularly noteworthy because its assessment area was one of the poorest areas in
5. The Statement of the Federal Financial Supervisory Agencies
Regarding the Community Reinvestment Act provides that a CRA
examination is an important and often controlling factor in the consideration of an institution's CRA record and that reports of these
examinations will be given great weight in the applications process.
See 54 Federal Register 13.742 and 13,745 (1989).
Legal Developments
Virginia in terms of average family income and had recently experienced little population increase. The examination also included a review of selected loan files and found
no evidence of illegal discrimination.
Although residential mortgage lending constituted
Thrift's primary lending activity, examiners also commended Thrift's additional emphasis on small business
lending. In 1995, Thrift originated 61 small business loans
totalling approximately $1.7 million. In evaluating the
commenter's allegations that Thrift has not engaged in
sufficient agricultural lending, the Board notes that the
CRA provides banks with substantial flexibility in developing specific CRA-related policies and programs and does
not require a bank to engage in any particular type of
lending. Shore Financial states, moreover, that Thrift had
more than $3 million in agricultural loans outstanding as of
December 1997, and maintains that the service of two
farmers on its eight-member board of directors reflects its
commitment to helping meet the credit needs of all its
communities, including the fanning community.
The Board has carefully considered the entire record in
its review of the convenience and needs factor under the
BHC Act. Based on all the facts of record, including
information provided by the commenter, the response of
Shore Financial, and the relevant reports of examination,
the Board concludes that considerations relating to convenience and needs, including the CRA performance records
of the relevant institutions, are consistent with approval.
The Board also has considered the other supervisory
factors it is required to consider under section 3 of the
BHC Act as well as the factors it is required to consider
under section 9 of the Federal Reserve Act for Bank to
become a member of the Federal Reserve System and to
operate branches and under other provisions of law.6 The
Board finds these factors to be consistent with approval.7
Conclusion
Based on the foregoing and all the facts of record, the
Board has determined that the applications should be, and
hereby are, approved.8 The Board's approval of the pro-
6. Bank is authorized to operate its branches under the laws of
Virginia and Maryland, and under section 9 of the Federal Reserve
Act. See Va. Code Ann. §§ 6.1-39.3 and 6.1-44.3 (Michie 1996); Md.
Code Ann., Fin. Inst. § 5-1003 (1996).
7. The Board has reviewed the merger of Bank and Thrift under the
Bank Merger Act and section 5(d)(3) of the FDI Act. With respect to
the specific factors the Board must review under section 5(d)(3), the
record in this case shows that:
(1) The transaction would not result in the transfer of any federally
insured deposits from one federal deposit insurance fund to the
other;
(2) Bank, on consummation of the proposal, will meet all applicable
capital standards; and
(3) The proposal would comply with the interstate banking provisions of the BHC Act if Thrift were a state bank that Bank was
applying to acquire directly. See 12 U.S.C. § 1815(d)(3).
8. The commenter has requested that the Board hold a public
hearing on the application to consider the views of other fanners.
Section 3(b) of the BHC Act does not require the Board to hold a
289
posal is specifically conditioned on compliance by Shore
Financial with all the commitments made in connection
with this application. For purposes of this action, the
commitments and conditions relied on in reaching this
decision are deemed to be conditions imposed in writing
by the Board and, as such, may be enforced in proceedings
under applicable law.
The proposal shall not be consummated before the fifteenth 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 Richmond,
acting pursuant to delegated authority.
By order of the Board of Governors, effective February 9, 1998.
Voting for this action: Vice Chair Rivlin and Governors Kelley,
Phillips, Meyer, Ferguson, and Gramlich. Absent and not voting:
Chairman Greenspan.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
Appendix
Branches to Be Established by Shore Bank in Virginia
21220 North Bayside Drive, Cheriton
6350 Maddox Boulevard, Chincoteague
4071 Lankford Highway, Exmore
Branches to Be Established by Shore Bank in Maryland
100 West Main Street, Salisbury
1503 South Salisbury Boulevard, Salisbury
public hearing on an application unless the appropriate supervisory
authority for the bank to be acquired makes a timely written recommendation of denial. The Board has not received such a recommendation from the Office of Thrift Supervision or any state supervisory
authority. In addition, neither the Federal Reserve Act nor the Bank
Merger Act requires a public hearing on an application.
Under its rules, the Board also may, in its discretion, hold a public
hearing or meeting on an application to acquire a bank if a hearing is
necessary or appropriate to clarify factual issues related to the application and to provide an opportunity for testimony, if appropriate.
12 C.F.R. 225.16(e). The Board has carefully considered the commenter's request for a hearing in light of all the facts of record. In the
Board's view, the commenter has had ample opportunity to submit his
views, and has submitted written comments that have been carefully
considered by the Board in action on the application. The commenter's request fails to demonstrate why his written presentation does not
adequately present his evidence, allegations, or views. The commenter
also fails to indicate the matters that may be presented by others and
why a public meeting or hearing is necessary for the proper presentation or consideration of their views. After careful review of all the
facts of record, moreover, the Board has concluded that commenter
disputes the weight that should be accorded to, and the conclusions
that the Board should draw from, the facts of record, but does not
identify disputed issues of fact that are material to the Board's
decision. For these reasons, and based on all the facts of record, the
Board has determined that a public hearing or meeting is not required
or warranted in this case. Accordingly, the request for a hearing or
meeting on the proposal is hereby denied.
290
Federal Reserve Bulletin • April 1998
Orders Issued Under Section 4 of the Bank Holding
Company Act
North Fork Bancorporation, Inc.
Melville, New York
nies under section 4 of the BHC Act. North Fork has
committed to conform all of Savings Bank's activities to
those permissible under section 4(c)(8) of the BHC Act
and Regulation Y.5
Competitive Considerations
Order Approving the Acquisition of a Savings
Association
North Fork Bancorporation, Inc., Melville, New York
("North Fork"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has
requested the Board's approval under section 4(c)(8) of the
BHC Act (12U.S.C. § 1843(c)(8)) and section 225.24 of
the Board's Regulation Y (12 C.F.R. 225.24) to acquire all
the voting shares of New York Bancorp, Inc., Douglaston
("Bancorp"), and thereby acquire Home Federal Savings
Bank, Ridgewood ("Savings Bank"), both in New York.1
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(62 Federal Register 63,344 (1997)). The time for filing
comments has expired, and the Board has considered the
proposal and all comments received in light of the factors
set forth in section 4 of the BHC Act.
North Fork, with total consolidated assets of approximately $6 billion, operates North Fork Bank, which has
branches in New York.2 North Fork is the 16th largest
depository institution in New York, controlling deposits of
approximately $4.4 billion, representing approximately
1 percent of total deposits in depository institutions in the
state ("state deposits"). 3 Bancorp is the 35th largest depository institution in New York, controlling deposits of approximately $1.5 billion, representing less than 1 percent
of state deposits. On consummation of the proposal, North
Fork would become the 14th largest depository institution
in New York, controlling deposits of approximately
$6 billion, representing approximately 1.5 percent of state
deposits.
The Board previously has determined by regulation 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.4 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 compa1. North Fork's wholly owned subsidiary bank, North Fork Bank,
Mattituck, New York ("North Fork Bank"), would merge with Savings Bank and North Fork Bank would be the surviving institution.
The merger is subject to approval by the Federal Deposit Insurance
Corporation ("FDIC") under section 18(c) of the Federal Deposit
Insurance Act (12 U.S.C. § I828(c)) ("Bank Merger Act") and by the
New York State Banking Department ("NYSBD"). North Fork also
has requested the Board's approval of an option to purchase up to 19.9
percent of the voting shares of Bancorp under certain circumstances.
The option would expire on consummation of the proposal.
2. Asset data are as of September 30, 1997, and deposit data are as
of June 30, 1997.
3. In this context, depository institutions include commercial banks,
savings banks, and savings associations.
4. 12 C.F.R. 225.28(b)(4).
In order to approve the proposal, the Board also must
determine that performance of the proposed activities is a
proper incident to banking, that is, that the proposed transaction "can reasonably be expected to produce benefits to
the public . . . that outweigh possible adverse effects, such
as undue concentration of resources, decreased or unfair
competition, conflicts of interests, or unsound banking
practices." 6 As part of its evaluation of these factors, the
Board has carefully considered the competitive effects of
the proposal in light of all the facts of record.7
North Fork and Bancorp compete directly in the Metropolitan New York-New Jersey banking market ("New
York banking market"). 8 On consummation of the proposal, North Fork would become the 15th largest depository institution in the market, controlling deposits of approximately $6.6 billion, representing approximately
1.5 percent of total deposits in depository institutions in the
market.9 Concentration in the New York banking market,
as measured by the Herfindahl—Hirschman Index
("HHI") under the Department of Justice Merger Guidelines ("DOJ Guidelines") would remain unchanged and
unconcentrated at 627 points. 10 In addition, numerous com-
5. Savings Bank engages in the sale of savings bank life insurance
("SBLI") and annuities. North Fork has committed to terminate SBLI
activities within two years after consummation of the proposal. North
Fork Bank would continue to sell annuities pursuant to state law. See
Merchants National Corporation, 75 Federal Reserve Bulletin 388
(1989). aff'd sub nom. Independent Ins. Agents Ass'n v. Board of
Governors, 890 F.2d 1275 (7th Cir. 1989), cert, denied. 111 S. Ct. 44
(1990).
6. 12 U.S.C. § 1843(c)(8).
7. See First Hawaiian. Inc., 79 Federal Resen<e Bulletin 966,
966-68 (1993).
8. The New York banking market includes New York City; Nassau,
Orange, Putnam. Rockland, Suffolk, Sullivan, and Westchester Counties in New York: Bergen, Essex, Hudson, Hunterdon, Middlesex,
Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Union, Warren, and a portion of Mercer Counties in New Jersey; Pike County in
Pennsylvania; and portions of Fairfield and Litchfield Counties in
Connecticut.
9. Market share data are as of June 30, 1997. 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 Savings Bank would be acquired by a commercial banking
organization under the proposal, Savings Bank's deposits are included
at 100 percent in the calculation of the pro forma market share. See
Norwest Corporation, 78 Federal Reserve Bulletin 452 (1992); First
Banks, Inc.. 76 Federal Resen-e Bulletin 669 (1990).
10. Under the revised DOJ Guidelines (49 Federal Register 26,823
(June 29, 1984)), a market in which the post-merger HHI is less than
1000 points is considered to be unconcentrated. The Department of
Justice has informed the Board that a bank merger or acquisition
Legal Developments
petitors would remain in the New York banking market.
Based on these and all other facts of record, the Board
concludes that the consummation of the proposal would
not result in any significantly adverse effects on competition or on the concentration of banking resources in the
New York banking market or any other relevant banking
market.
Record of Performance under the Community
Reinvestment Act
In acting on a proposal to acquire a savings association, the
Board has traditionally considered the records of performance under the Community Reinvestment Act (12 U.S.C.
§ 2901 et seq.) ("CRA") of the institutions involved in the
proposal." The Board has reviewed the records of performance of North Fork Bank and Savings Bank in light of all
the facts of record, including comments received on the
proposal. Commenter contends, on the basis of 1996 and
preliminary 1997 data submitted under the Home Mortgage Disclosure Act (12 U.S.C. § 2801 etseq.) ("HMDA"),
that the lending records of North Fork Bank and Savings
Bank show inadequate marketing and lending to low- and
moderate-income ("LMI") communities and communities
with predominately minority residents ("minority communities"). In particular, Commenter argues that North Fork
Bank's record of lending in Queens, Manhattan, and the
Bronx, and Savings Bank's record of lending in Brooklyn,
are insufficient in light of the amount of deposits that the
institutions accept from these communities.12
North Fork indicates that it intends to implement the
CRA programs and policies of North Fork Bank in the
communities formerly served by Savings Bank after Savings Bank is merged with North Fork Bank. North Fork
also intends to retain Savings Bank's programs that North
Fork believes best assist in meeting the community development needs of the thrift's service community. In this
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 Department of Justice has stated that the higher than normal HHI
thresholds for screening bank mergers for anticompetitive effects
implicitly recognize the competitive effect of limited-purpose lenders
and other non-depository financial entities.
11. See Bane One Corporation, 83 Federal Resen'e Bulletin 602
(1997). Inner City Press/Community on the Move ("Commenter")
alleges that materials filed by North Fork with the Securities and
Exchange Commission ('"SEC") do not state that the Board was
required to review the proposal under the CRA. Commenter contends
that the failure of North Fork to acknowledge the Board's review of
the proposal under the CRA is a material misstatement. A copy of
Commenter's contentions were provided to the SEC for consideration.
The adequacy of materials filed with the SEC is a matter within the
special expertise of the SEC, and the Board is not authorized under the
BHC Act to adjudicate disputes that arise under the federal securities
laws.
12. Commenter contends that North Fork has a record of not
improving the CRA performance records of institutions it acquires,
and in fact diminishes acquired institutions' overall assistance in
helping meet the credit needs of communities. The Board has reviewed this contention in light of all the facts of record, including
satisfactory CRA performance evaluations that accounted for North
Fork's recent acquisitions.
291
light, the Board has given substantial consideration to the
existing record of North Fork Bank, as reflected in its CRA
and supervisory examinations, and the current programs
and policies of North Fork Bank that help meet the credit
needs of all its service communities, including LMI neighborhoods.
A. CRA Performance Examinations
The Board has reviewed the examinations by the primary
federal supervisors of the CRA performance records of the
relevant institutions. An institution's most recent CRA
performance evaluation is a particularly important consideration in the applications process because it represents a
detailed on-site evaluation of the institution's overall
record of performance under the CRA by its primary
federal supervisor.13
North Fork Bank received an overall rating of "satisfactory" from its primary federal supervisor, the FDIC, at its
most recent evaluation for CRA performance, as of March
1997 ("1997 Examination"). In addition, as of the same
date, the NYSBD rated North Fork Bank's CRA performance "satisfactory" pursuant to section 28-b of
New York Banking law. Savings Bank also received an
overall rating of "satisfactory" from its primary federal
supervisor, the Office of Thrift Supervision, at its most
recent evaluation for CRA performance, as of October
1995.
B. Lending Record of North Fork Bank
The 1997 Examination found that North Fork Bank's
record of lending within LMI census tracts and to LMI
individuals was very good and that the bank's performance
trends over 1995 and 1996 were highlighted by noteworthy
increases in loans within LMI census tracts and to LMI
individuals. In 1995, North Fork Bank made 33 percent of
its HMDA loans within LMI census tracts in its assessment
area, compared to 10 percent by lenders in the aggregate,
and made 17 percent of its HMDA loans to LMI individuals residing in its assessment area, compared to 14 percent
by lenders in the aggregate. In 1996, North Fork Bank
increased its HMDA loans in LMI census tracts to
35 percent and to LMI individuals to 21 percent.14
Mortgage loans on multi-family rental dwellings
("multi-family housing loans") are the predominate credit
product offered by North Fork Bank in its service community.15 HMDA data for multi-family housing loans in 1995
13. The Statement of the Federal Financial Supervisory Agencies
Regarding the Community Reinvestment Act provides that a CRA
examination is an important and often controlling factor in the consideration of an institution's CRA record and that reports of these
examinations will be given great weight in the applications process.
54 Federal Register 13.742 and 13,745 (1989).
14. LMI census tracts comprise approximately 24 percent of North
Fork Bank's current service community.
15. Multi-family housing loans accounted for 77 percent in 1995,
and 71 percent in 1996. of the total dollar amount of North Fork
Bank's loans.
292
Federal Reserve Bulletin • April 1998
show that North Fork Bank originated 51 percent of its
multi-family housing loans by dollar volume in LMI census tracts within its service community, compared to
29 percent of such loans originated by lenders in the
aggregate. Multi-family housing loans in LMI census tracts
decreased by 3 percent to 48 percent in 1996.
In Manhattan, North Fork Bank made 93 multi-family
housing loans totalling $115.7 million in 1996, and approximately 38 percent of the dollar amount of these loans were
in LMI census tracts. In the Bronx, the bank made
51 multi-family housing loans totalling $63 million in
1996 and approximately 74 percent of these loans were
made in LMI census tracts.' 6 In Queens County, the bank
made 11 multi-family housing loans in 1996 totalling
$23.2 million. Four of the loans were made in LMI census
tracts.17
HMDA data for North Fork Bank generally indicate,
however, some disparities in the rate of loan originations,
denials, and applications by racial group and income level.18 The Board is concerned when an institution's record
indicates such disparities and believes that all banks are
obligated to ensure that their lending practices are based on
criteria that assure not only safe and sound banking, but
also equal access to credit by creditworthy applicants regardless of race. The Board recognizes, however, that
HMDA data alone provide an incomplete measure of an
institution's lending in its community and have limitations
16. North Fork Bank had no branches in Brooklyn, but it made
50 loans totalling $64.2 million in Brooklyn in 1996 and approximately 70 percent of these loans were made in LMI census tracts.
Brooklyn is not currently part of North Fork Bank's assessment area,
but it would be added to the assessment area after consummation of
the proposal.
17. Commenier maintains that North Fork Bank has not complied
with a commitment to make a total of $20 million in loans in LMI
census tracts in Nassau, Westchester and Rockland Counties over a
three-year period ending in 1998. North Fork Bank has substantially
met or significantly exceeded its annual interim lending goals in 1996
and 1997 for total amounts, loaned and amounts loaned for multifamily housing and owner-occupied housing in Nassau and Westchester
Counties. However, North Fork Bank has been unable to meet its
interim annual lending goals for owner-occupied housing loans in
Rockland County. The NYSBD considered North Fork Bank's efforts
to meet this commitment in connection with its 1997 CRA evaluation
of the bank and determined that the bank's record of performance was
satisfactory.
18. Commenter contends that North Fork Bank only offers multifamily housing loans in the bank's LMI urban communities and does
not make mortgage loans on 1-4 family dwellings ("'owner-occupied
housing loans") in those areas. North Fork Bank does make owneroccupied housing loans in suburban communities. Commenter alleges
that North Fork Bank's geographic distribution of multi-family and
owner-occupied housing loans shows illegal lending practices. The
CRA provides banks with substantial flexibility in developing specific
CRA-related policies and programs and does not require a bank to
engage in any particular type of lending. As discussed in this order,
moreover, FDIC and NYSBD examiners found no evidence of prohibited discriminatory practices or of any practices intended to discourage applications for any type of credit set forth in the bank's CRA
statement in their most recent evaluations. The Board notes, however,
that NYSBD examiners encouraged North Fork Bank to increase the
number of owner-occupied loans to LMI borrowers, particularly in
Rockland and Westchester Counties and a portion of Manhattan. The
Board expects the bank to address these matters.
that make the data an inadequate basis, absent other information, for concluding that an institution has engaged in
illegal discrimination in making lending decisions.19
Because of the limitations of HMDA data, the Board has
carefully reviewed other information, particularly examination reports that provide an on-site evaluation of compliance by the bank with fair lending laws. FDIC examiners
found no evidence of prohibited discriminatory practices or
of any practices intended to discourage applications for the
types of credit set forth in the bank's CRA statement in the
1997 Examination.20 NYSBD examiners also found no
evidence of practices that were intended to discourage
applicants from the types of credit that North Fork Bank
offers and no evidence of any prohibited discriminatory or
other illegal credit practices in their 1997 CRA evaluation.
Moreover, FDIC examiners concluded that North Fork
Bank's management had demonstrated a commitment to
making loans in LMI census tracts and to LMI individuals
and favorably noted that the bank had a formal review
process for all denied loan applications.
North Fork Bank also has a number of programs to assist
in meeting the housing-related credit needs of LMI individuals. For example, North Fork Bank participates in governmentally sponsored lending programs that offer affordable
mortgage financing. The bank originates Federal Housing
Administration ("FHA") loans on referrals from mortgage
bankers. In 1995 and 1996, the bank made 323 FHA loans
totalling $37 million.21 In addition. FDIC examiners noted
that North Fork Bank had developed an in-house portfolio
mortgage program for qualified LMI borrowers in 1996
that featured reduced closing costs and no mortgage insurance requirement for mortgages with a loan-to-value ratio
less than 90 percent. North Fork made 66 loans under this
program in 1996 totalling $6.6 million.22 The bank also
participates in programs sponsored by the Federal National
Mortgage Association Community Home Buyers ("Community Home Buyers") programs 23 and the State of New
York Mortgage Agency Affordable Housing Program.-4
19. The data, for example, do not provide a basis for an independent
assessment of whether an applicant who was denied credit was, in
fact, creditworthy. Credit history problems and excessive debt levels
relative to income (reasons most frequently cited for a credit denial)
are not available from HMDA data.
20. FDIC examiners noted apparent technical violations of fair
lending laws and HMDA reporting requirements during the 1997
Examination, but stated that these matters were addressed by the
bank's management during the examination. The Board has considered supervisory information from the FDIC on the nature of the
apparent violations and the steps taken by North Fork Bank to address
these matters.
21. The 1997 Examination noted that, as of March 31, 1997, North
Fork Bank had originated 64 loans totalling $7.8 million.
22. Examiners noted that 31 loans were made under the program in
January and February 1997 totalling $3.2 million.
23. The Community Home Buyers program offers flexible underwriting criteria for conforming fixed-rate purchase mortgages on
I -4 family residential properties.
24. Under this program, a bank makes fixed rate loans to qualified
LMI borrowers with reduced down payment requirements (as low as
3 percent) and at below-market rates. The loans are purchased by the
State of New York.
Legal Developments
North Fork Bank also engages in small business lending.
In 1996, the bank originated approximately 2200 small
business loans, totalling approximately $260 million. More
than 23 percent of the small business loans were made to
businesses in LMI census tracts within North Fork Bank's
service community. These include loans that were made in
Queens, the Bronx, Brooklyn, and Manhattan.
The 1997 Examination also concluded that North Fork
Bank had a satisfactory record of ascertaining and helping
to meet the credit needs of its entire service community,
including LMI neighborhoods, in a manner consistent with
its resources and capabilities. FDIC examiners found that
the bank employed a number of methods to ascertain
community credit needs, including personal contact with
community organizations, non-profit development organizations and mortgage originators, officer call programs,
and first-time home buyer seminars.25 The 1997 Examination also commended the bank's advertising and promotional plan as designed to reach, as directly as possible,
LMI individuals who would benefit from the bank's products and services and as focused on a wide audience in
LMI census tracts.
C. Branch Closings
Savings Bank operates 31 branches in five New York
counties. North Fork indicates that seven branches would
be closed as a result of the proposal. The Board has
considered the effect of the proposal on branches currently
operated by Savings Bank in light of Commenter's objections to North Fork's proposed branch closings and confidential information regarding these closings provided by
North Fork.
Each of the seven branches proposed to be closed would
be merged into existing branches of North Fork Bank or
Savings Bank. North Fork indicates that three of these
branches are in LMI census tracts, and each is located less
than one mile from another branch in the same LMI census
tract that North Fork would continue to operate after the
proposal. Thus, North Fork proposes to continue to operate
branches in each of the LMI census tracts affected by the
proposal. North Fork Bank currently operates approximately 20 percent of its branches in LMI areas and, following consummation of the proposal, would continue to
operate approximately 20 percent of its branches in LMI
census tracts. All branches would be closed pursuant to
North Fork Bank's branch closing policy, moreover, which
requires consideration of the community's needs and the
impact of the closing on the neighborhood. The Board
notes that the branch closing policy has been reviewed by
FDIC examiners as part of their evaluations of CRA performance and found to be satisfactory.
In addition to these factors, the Board has considered
that federal banking law provides a specific mechanism for
25. The 1997 Examination noted that community contacts included
a community preservation corporation, local development corporations, and a local housing alliance and partnership.
293
addressing branch closings. Federal law requires an insured depository institution to provide notice to the public
and to the appropriate regulatory agency at least 30 days
prior to closing a branch. The law does not authorize
federal regulators to prevent the closing of any branch.26
D. Conclusion on CRA Performance Records
The Board has carefully considered all the facts of record,
including Commenter's comments, in reviewing the CRA
performance records of the institutions involved. Based on
a review of the entire record, and for the reasons discussed
above, the Board concludes that the CRA performance
records of North Fork Bank and Savings Bank are consistent with approval of the proposal. The Board notes that,
although the 1997 CRA evaluation by the NYSBD found
the bank's overall CRA performance record to be satisfactory, NYSBD's examiners encouraged the bank to improve
its overall lending performance in Queens. The Board
expects North Fork to address the areas for improvement in
its lending performance discussed in the order and will
consider North Fork's progress in this regard in connection
with future applications by North Fork to acquire deposittaking facilities. To permit the Board to monitor North
Fork's progress, North Fork must file with the Federal
Reserve Bank of New York quarterly reports on its lending
activities in LMI and minority census tracts and to LMI
and minority borrowers for one year from the date of this
order.
Other Considerations
In connection with its review of the public interest factors
under section 4 of the BHC Act, the Board also has
carefully reviewed the financial and managerial resources
of North Fork and Bancorp and their respective subsidiaries and the effect the transaction would have on such
resources in light of all the facts of record.27 The Board has
reviewed, among other things, confidential reports of examination and other supervisory information received from
the primary federal supervisors of the organizations. Based
26. Section 42 of the Federal Deposit Insurance Act (12U.S.C.
§ 1831r-l, as implemented by the Joint Policy Statement Regarding
Branch Closings (see 58 Federal Register 49,083 (1993)) ("Section 42"). Commenter contends that North Fork's reasons for closing
Savings Bank's branches are inadequate and that North Fork has
mischaracterized the closings as consolidations. As noted, the Board
considered confidential information from North Fork regarding the
branch closings, and the number and locations of branches to be
closed in LMI census tracts. Moreover, Section 42 requires that a bank
provide the public at large with at least 30 days notice and the primary
federal supervisor and branch customers with at least 90 days notice
before the date of the proposed branch closing. The bank also is
required to provide reasons and other supporting data for the closure,
consistent with the institution's written policy for branch closings.
The notice requirements of Section 42 apply to all closings, however
characterized, that are not relocations involving short distances (generally less than 1.000 feet) unless occurring in less densely populated
areas.
27. See 12 C.F.R. 225.26.
294
Federal Reserve Bulletin • April 1998
on all the facts of record, the Board concludes that the
financial and managerial resources of the organizations
involved in the proposal are consistent with approval.
The record indicates that consummation of the proposal
would result in benefits to consumers and businesses. The
proposal would enable North Fork to provide Savings
Bank customers with access to a broad array of products
and services, including commercial bank products,
throughout an expanded service area. Additionally, there
are public benefits to be derived from permitting capital
markets to operate so that bank holding companies may
make potentially profitable investments in nonbanking
companies when, as in this case, those investments are
consistent with the relevant considerations under the BHC
Act, and from permitting banking organizations to allocate
their resources in the manner they believe is most efficient.
Based on all the facts of record, the Board has determined
that consummation of this proposal can reasonably be
expected to produce public benefits that would outweigh
any likely adverse effects under the proper incident to
banking standard of section 4(c)(8) of the BHC Act.
Conclusion
Based on the foregoing and all the facts of record, the
Board has determined that the notice should be, and hereby
is, approved.28 The Board's approval of the proposal is
specifically conditioned on compliance by North Fork with
the commitments made in connection with the notice. The
Board's determination also is subject to all the conditions
28. Commenter has requested the Board to arrange an informal
meeting between Commenter and North Fork. The Board's Rules of
Procedure allow a Reserve Bank to hold a private meeting to provide a
forum for narrowing issues and resolving differences between an
applicant and commenter, if appropriate. See 12 C.F.R. 262.25(c).
North Fork has indicated that it does not want to meet with Commenter.
Commenter also has requested that the Board hold a public hearing
or meeting on the notice, including Commenter's contentions that
both institutions have disparate lending records, that North Fork's
managerial record raises adverse considerations, and that North Fork's
justifications for few owner-occupied loans in LMI urban census
tracts are inadequate. The Board's rules provide for a hearing on
notices under section 4 of the BHC Act if there are disputed issues of
material fact that cannot be resolved in some other manner. See
12 C.F.R. 225.25(a)(2). The Board also may, in its discretion, hold a
public hearing or meeting if a hearing is necessary to clarify factual
issues related to the proposal and to provide an opportunity for
testimony, if appropriate. See 12 C.F.R. 225.16(e).
In the Board's view, Commenter had ample opportunity to submit
its views, and has submitted substantial written comments that have
been carefully considered by the Board in acting on the notice.
Commenter's request fails to demonstrate why its written presentation
does not adequately present its evidence, allegations, and views. After
a careful review of all the facts of record, moreover, the Board has
concluded that Commenter disputes the weight that should be accorded to and the conclusions that the Board should draw from the
facts of record, but does not identify disputed issues of fact that are
material to the Board's decision. For these reasons, and based on all
the facts of record, the Board has determined that a public hearing or
meeting is not required or warranted in this case. Accordingly, the
requests for a public hearing or meeting on the proposal are hereby
denied.
in Regulation Y, including those in sections 225.7 and
225.25(c) (12 C.F.R. 225.7 and 225.25(c)) 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 shall be
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 the
Federal Reserve Bank of New York, acting pursuant to
delegated authority.
By order of the Board of Governors, effective February 9, 1998.
Voting for this action: Vice Chair Rivlin and Governors Kelley,
Phillips, Meyer, Ferguson, and Gramlich. Absent and not voting:
Chairman Greenspan.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
ORDERS ISSUED UNDER BANK MERGER ACT
WestStar Bank
Bartlesville, Oklahoma
Order Approving the Merger of a Bank and
Establishment of a Branch
WestStar Bank, Bartlesville, Oklahoma ("WestStar"), a
state member bank, has requested the Board's approval
under section 18(c) of the Federal Deposit Insurance Act
(12U.S.C. § 1828(c)) (the "Bank Merger Act") to merge
with Victory Bank of Nowata, Nowata, Oklahoma ("Victory Bank"). WestStar also has applied under section 9 of the
Federal Reserve Act (12 U.S.C. § 321) to establish a branch
at the main office of Victory Bank, which is located at
108 North Maple, Nowata, Oklahoma.1
Notice of the applications, affording interested persons
an opportunity to submit comments, has been given in
1. Victory Bank is owned indirectly by Victory Bancorp ("Bancorp") through an intermediate bank holding company, Victory Baneshares ("Bancshares"). In connection with the bank merger, WestStar
would acquire all the voting shares of Bancorp; Bancshares would
merge with and into Bancorp; and Bancorp would merge with and into
WestStar. Because this transaction is in substance a merger of banks
that is subject to Board review under the Bank Merger Act, the steps
of the transaction would occur in immediate succession, Victory Bank
would never be operated by WestStar as a separate bank, and the
transaction does not raise issues that would bar Board approval under
the Bank Holding Company Act ("BHC Act"), the Board has waived
the applications required under section 3 of the BHC Act for the
intermediate steps for this transaction.
Legal Developments
accordance with the Bank Merger Act and the Board's
Rules of Procedure (12 C.F.R. 262.3(b)). 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
("OCC"), and the Federal Deposit Insurance Corporation
("FDIC"). 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 the Bank
Merger Act and the Federal Reserve Act.
WestStar is a wholly owned subsidiary of Arvest Bank
Group, Bentonville, Arkansas, which is the sixth largest
commercial banking organization in Oklahoma, controlling $775.5 million of deposits, representing 2.6 percent of
total deposits in commercial banking organizations in the
state.2 Victory Bank controls deposits of $19.7 million,
representing less than 1 percent of deposits in the state. On
consummation of the proposal, Arvest Bank Group would
remain the sixth largest commercial banking organization
in Oklahoma.
Competitive Considerations
The Bank Merger Act provides that the Board may not
approve an application if the effect of the acquisition is to
create a monopoly or substantially to lessen competition in
any section of the country unless the Board finds the
anticompetitive effects of the proposal are clearly outweighed in the public interest by the probable effect of the
proposal in meeting the convenience and needs of the
community.3
WestStar asserts that WestStar and Victory Bank operate
in separate banking markets. Alternatively, WestStar contends that the appropriate banking market should include
the Bartlesville banking market as previously defined by
the Federal Reserve Bank of Kansas City ("Reserve
Bank") plus the town of Coffeyville, Kansas.4 The Board
believes, however, that the appropriate market for analyzing the competitive effects of the proposal is the Bartlesville banking market as previously defined.5 The Board
bases its conclusion on an analysis of employment opportunities, commuting data, shopping patterns, loan and deposit
2. State data are as of June 30, 1997, and market data are as of
June 30, 1996.
3. 12US.C. § 1828(c)(5).
4. The Reserve Bank defines the Bartlesville banking market as an
area approximated by Nowata and Washington Counties and the
northeastern quadrant of Osage County in Oklahoma: and the town of
Caney, Kansas.
5. The Board and the courts have found that the relevant banking
market for analyzing the competitive effects of a proposal must reflect
commercial and banking realities and should consist of the local area
where local customers can practicably turn for alternatives. See
St. Joseph Valley Bank, 68 Federal Reserve Bulletin 673, 674 (1982).
The key question to be considered in making this selection "is not
where the parties to the merger do business or even where they
compete, but where, within the area of competitive overlap, the effect
of the merger on competition will be direct and immediate." United
States v. Philadelphia Nafl Bank, 374 U.S. 321, 374 (1963); United
States v. Phillipsburg Nat'l Bank, 399 U.S. 350 (1969).
295
data, an on-site investigation of the banking market conducted by the Reserve Bank in January 1998, and other
facts of record that indicate that there is substantial commuting, travel, and interaction between Bartlesville and
Nowata.6 In light of these, and all facts of record, the
Board concludes that the Bartlesville banking market reflects commercial and banking realities and represents an
area where local customers can practicably turn for alternatives. Accordingly, the relevant banking market for considering the competitive effects of the proposal is the Bartlesville banking market as defined above.7
WestStar is the largest depository institution in the
Bartlesville banking market, controlling deposits of approximately $349 million, representing approximately
47 percent of the total deposits in depository institutions in
the market ("market deposits"). 8 Victory Bank is the tenth
largest depository institution in the market, controlling
deposits of $19.7 million, representing approximately
3 percent of market deposits. On consummation of the
proposal, WestStar would remain the largest depository
institution in the Bartlesville banking market, controlling
deposits of approximately $358.7 million, representing approximately 50 percent of market deposits. Concentration
6. Bartlesville is the center of economic activity for a commercially
integrated area generally encompassed by Washington, Nowata, and
the northeastern portion of Osage Counties. Bartlesville is in Washington County, which is between Osage County to the west and Nowata
County to the east, and has a population of 33,000 residents making it
the largest town in the banking market. The area's largest employers,
including a petroleum company with approximately 3100 employees
and a medical center and school district office with more than 800
employees each, are in Bartlesville. Commuting data from the Census
Bureau for 1990 show that approximately 27 percent of the residents
in the Nowata community, where Victory Bank is located, commute to
work in the Bartlesville area. Area residents also may obtain a variety
of goods and services from large retail stores in an enclosed mall,
restaurants, automobile dealerships, entertainment complexes, and a
medical center that are unavailable in the smaller communities within
a 40 mile radius of Bartlesville. Data from the Oklahoma Transportation Department indicate that in 1995, the average daily traffic count
between Nowata and Bartlesville on State Highway 60 was 3,400
vehicles, which was more than twice the number of vehicles that used
the highway to travel from Nowata in the opposite direction. In
addition, loan and deposit data indicated that residents of Nowata
obtain products and services from banking organizations in Bartlesville.
7. The facts of record do not support including Coffeyville within
the Bartlesville banking market. Coffeyville, a mid-size town in Kansas with a population of approximately 13,000 residents, is approximately 40 miles northeast of Bartlesville. No highway directly connects the town with Bartlesville. In addition. Census Bureau
commuting data for 1990 show that almost all the people who commute from Nowata County to Coffeyville reside in South Coffeyville,
which is a small town in Nowata County approximately five miles
from Coffeyville. Coffeyville also has a hospital and a full complement of retail stores.
8. 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).
296
Federal Reserve Bulletin • April 1998
in the market, as measured by the Herfindahl-Hirschman
Index ("HHI"), would increase 262 points to 2892. 9
The Board has taken into account considerations that
materially mitigate the competitive effect of the proposal.
The Bartlesville banking market, for example, is a rural
banking market with a significant number of competing
depository institutions relative to its total market deposits
of $715 million. After consummation of the proposal,
11 depository institution competitors, in addition to WestStar, would remain in the banking market. The remaining
competitors include two of Oklahoma's largest commercial
banking organizations that operate throughout the state.
The Board also notes that a large credit union has a
substantial effect on competition in the banking market.10
The credit union controls a substantial amount of deposits
in the banking market, and actively engages in home
mortgage and consumer lending.11 The Board believes that
these factors mitigate the potentially adverse effects of the
proposal.
The Department of Justice has reviewed the proposal
and advised the Board that consummation of the proposal
would not likely have any significantly adverse competitive effects in the Bartlesville banking market or any relevant banking market. The OCC and the FDIC also have not
objected to the proposal.
Based on all the facts of record, and for the reasons
discussed above, the Board concludes that consummation
of the proposal would not have a significantly adverse
effect on competition or on the concentration of banking
resources in the Bartlesville banking market or any other
relevant banking market.
Other Considerations
The Bank Merger Act also requires the Board to consider
the financial and managerial resources and future prospects
of the existing and proposed institutions and the convenience and needs of the community to be served. The
Board has carefully considered these factors in light of all
the facts of record. The facts of record include supervisory
reports of examination that assess the financial and mana9. Under the revised Department of Justice Merger Guidelines,
49 Federal Register 26,823 (June 29, 1984) ("DOJ Guidelines"), a
market in which the post-merger HHI is above 1800 is considered
highly concentrated. The Justice Department has informed the Board
that a bank merger or acquisition generally will not be challenged (in
the absence of other factors indicating anticompetitive effects) unless
the post-merger HHI is at least 1800 and the merger 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.
10. The credit union was originally established for the employees of
the petroleum company in Bartlesville but has broadened its membership criteria to include employees of other companies. Approximately
26,900 residents in the Bartlesville banking market, representing
approximately 39 percent of the market's total population, are credit
union members.
11. If deposits for the credit union were weighted at 50 percent,
WestStar would control 44.5 percent of market deposits, and the HHI
would increase by 206 points to 2405.
gerial resources of the organizations and financial information provided by WestStar. Based on these and all other
facts of record, the Board concludes that financial and
managerial resources and future prospects of the institutions involved are consistent with approval, as are other
supervisory factors.
WestStar intends to increase Victory Bank's hours of
operation and would offer its expanded products and services to the bank's customers and residents in the Nowata
area, including access to ATMs, cash management services, trust services, and a greater array of retail and
commercial checking accounts. WestStar also has a satisfactory record of performance under the Community Reinvestment Act of helping to meet the credit needs of all its
communities, including low- and moderate-income areas.12
Based on all the facts of record, the Board concludes that
considerations relating to convenience and needs are consistent with approval. The Board also concludes that all the
factors that must be considered under section 9 of the
Federal Reserve Act are consistent with approval.13
Conclusion
Based on the foregoing and all the facts of record, the
Board has determined that the applications should be, and
hereby are, approved. The Board's approval of the proposal is specifically conditioned on compliance by WestStar with all the commitments made in connection with
this application. For purposes of this action, the commitments and conditions relied on in reaching this decision are
both conditions imposed in writing by the Board, and as
such, may be enforced in proceedings under applicable
law.
The proposed acquisition shall not be consummated
before the fifteenth 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 extending
for good cause by the Board or by the Reserve Bank,
acting pursuant to delegated authority.
By order of the Board of Governors, effective February 18, 1998.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Phillips, Ferguson, and Gramlich. Absent and not
voting: Governor Meyer.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
12. 12 U.S.C. § 2901 et seq. ("CRA"). WestStar and Victory Bank
received a satisfactory rating under the CRA at their most recent
performance examinations.
13. Under Oklahoma law, a bank is permitted to branch into another
county by acquisition if the bank to be acquired has operated for at
least five years. See Okla. Stat. Tit. 6 §501.1. Victory Bank has
operated for at least five years, and Oklahoma banking officials have
confirmed that the proposal would be consistent with state branching
law.
Legal Developments
297
INDEX OF ORDERS ISSUED OR ACTIONS TAKEN BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
(OCTOBER 1, 1997-DECEMBER 31, 1997)
Applicant
Merged or Acquired Bank or Activity
Date of Approval
Bulletin
Volume
and Page
Bank of Cyprus, Ltd.,
Nicosia, Cyprus
Barnett Banks, Inc.,
Jacksonville, Florida
BB&T Corporation,
Winston-Salem, North Carolina
Central Fidelity Banks, Inc.,
Richmond, Virginia
Crestar Financial Corporation,
Richmond, Virginia
First American Corporation,
Nashville, Tennessee
First Citizens BancShares, Inc.,
Raleigh, North Carolina
First Union Corporation,
Charlotte, North Carolina
First Virginia Banks, Inc.,
Falls Church, Virginia
Jefferson Bankshares, Inc.,
Charlottesville, Virginia
NationsBank Corporation,
Charlotte, North Carolina
Riggs National Corporation,
Washington, D.C.
Signet Banking Corporation,
Richmond, Virginia
SunTrust Banks, Inc.,
Atlanta, Georgia
Synovus Financial Corporation,
Columbus, Georgia
Wachovia Corporation,
Winston-Salem, North Carolina
California Community Financial
Institutions Fund Limited Partnership,
San Francisco, California
Belvedere Bancorp,
San Francisco, California
Belvedere Capital Partners, Inc.,
San Francisco, California
Canadian Imperial Bank of Commerce,
Toronto, Canada
CIBC Wood Gundy Securities Corp.,
New York, New York
Centura Bank,
Rocky Mount, North Carolina
Centura Bank,
Rocky Mount, North Carolina
To establish a representative office in
New York, New York
Monetary Transfer System, L.L.C.,
St. Louis, Missouri
Honor Technologies, Inc.,
Maitland, Florida
November 24, 1997
84, 67
October 6, 1997
83, 1003
Security First Bank,
Fullerton, California
October 27, 1997
83, 1002
Oppenheimer Holdings, Inc..
New York, New York
October 27, 1997
83, 1008
First Union National Bank,
Charlotte, North Carolina
NationsBank, N.A.,
Charlotte, North Carolina
November 10, 1997
84, 64
October 6, 1997
83, 1023
298 Federal Reserve Bulletin • April 1998
Index of Orders Issued—Continued
Applicant
Merged or Acquired Bank or Activity
Date of Approval
Bulletin
Volume
and Page
Credit Agricole Indosuez,
Paris, France
To establish state-licensed branches in
Chicago, Illinois; and New York, New
York; and representative offices in
Houston, Texas; and San Francisco,
California
To establish a representative office in
New York, New York
Schrage, Ltd.,
Plainfield, Iowa
Farmers State Bank,
Plainfield, Iowa
First Financial Corporation of Idabel,
Idabel, Oklahoma
First State Bank of Idabel,
Idabel, Oklahoma
Perry County Financial Corporation,
Perryville, Missouri
Perry County Savings Bank, FSB,
Perryville, Missouri
Signet Banking Corporation,
Richmond, Virginia
Signet Bank,
Richmond, Virginia
Wheat First Butcher Singers, Inc.,
Richmond, Virginia
Wheat, First Securities, Inc.,
Richmond, Virginia
American Century Companies, Inc.,
Kansas City, Missouri
IAI Holdings, Inc.,
Minneapolis, Minnesota
October 27, 1997
83, 1025
October 27, 1997
83, 1028
December 15, 1997
84,111
November 24, 1997
84, 58
October 29, 1997
83, 1010
October 14, 1997
83, 1012
November 26, 1997
84, 59
December 8, 1997
84, 113
December 18, 1997
84, 116
California Community Financial
Institutions Fund Limited Partnership,
San Francisco, California
Barnett Banks, Inc.,
Jacksonville, Florida
Barnett Bank, National Association,
Jacksonville, Florida
Community Bank of the Islands,
Sanibel, Florida
EquiCredit Corporation,
Jacksonville, Florida
First of America Bank-Florida, FSB,
Tampa, Florida
Honor Technologies, Inc.,
Maitland, Florida
Barnett Community Development
Corporation,
Jacksonville. Florida
October 27, 1998
83, 1002
December 10, 1997
84, 129
The Cyprus Popular Bank, Ltd.,
Nicosia, Cyprus
First of Waverly Corporation,
Waverly, Iowa
First National Security Company,
DeQueen, Arkansas
First State Bancshares, Inc.,
Farmington, Missouri
First Union Corporation,
Charlotte, North Carolina
First Union Corporation,
Charlotte, North Carolina
J.P. Morgan & Co., Inc.,
New York, New York
Lloyds TSB Group pic,
London, England
Lloyds Bank Pic,
London, England
National Bancorp of Alaska, Inc..
Anchorage, Alaska
NationsBank Corporation,
Charlotte, North Carolina
NB Holdings Corporation,
Charlotte, North Carolina
Legal Developments
299
Index of Orders Issued—Continued
Applicant
Merged or Acquired Bank or Activity
Date of Approval
Bulletin
Volume
and Page
The Sanwa Bank Limited,
Osaka, Japan
Sanwa Business Credit Corporation,
Chicago, Illinois
Star Bane Corporation,
Cincinnati, Ohio
Morcroft Capital Corporation,
Fairfield, New Jersey
December 1, 1997
84, 120
Great Financial Corporation,
Louisville, Kentucky
Great Financial Bank, F.S.B.,
Louisville, Kentucky
Equitable Securities Corporation,
Nashville, Tennessee
Equitable Trust Company,
Nashville, Tennessee
Equitable Asset Management, Inc.,
Nashville, Tennessee
U.S. Bancorp Investments, Inc.,
Minneapolis, Minnesota
Central Fidelity Banks, Inc.,
Richmond, Virginia
Central Fidelity National Bank,
Richmond, Virginia
CFB Insurance Agency, Inc.,
Richmond, Virginia
December 18, 1997
84, 121
December 18, 1997
84, 126
November 26, 1997
84, 62
October 20, 1997
83,1020
SunTrust Banks, Inc.,
Atlanta, Georgia
U.S. Bancorp,
Minneapolis, Minnesota
Wachovia Corporation,
Winston-Salem, North Carolina
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)
Bank(s)
Effective Date
Centura Banks, Inc.,
Rocky Mount, North Carolina
Pee Dee Bankshares, Inc.,
Timmonsville, South Carolina
Pee Dee State Bank,
Timmonsville, South Carolina
February 24, 1998
300
Federal Reserve Bulletin • April 1998
Applications Approved—Continued
Applicant(s)
Bank(s)
Effective Date
National City Corporation,
Cleveland, Ohio
Fort Wayne National Corporation,
Fort Wayne, Indiana
The Auburn State Bank,
Auburn, Indiana
Churubusco State Bank,
Churubusco, Indiana
First National Bank of Huntington,
Huntington, Indiana
First National Bank of Warsaw,
Warsaw, Indiana
Fort Wayne National Bank,
Fort Wayne, Indiana
Old-First National Bank in Bluffton,
Bluffton, Indiana
Valley American Bank,
South Bend, Indiana
Niagara Bancorp, Inc.,
Lockport, New York
Lockport Savings Bank,
Lockport, New York
February 23, 1998
Applicant(s)
Bank(s)
Effective Date
National City Corporation,
Cleveland, Ohio
National City Corporation,
Cleveland, Ohio
National City Mortgage Co.,
Miamisburg, Ohio
American Mortgage Source, Inc.,
Nashville, Tennessee
Eastern Mortgage Services,
Trevose, Pennsylvania
First National Mortgage Corporation,
Glen Burnie, Maryland
February 19, 1998
Applicant(s)
Bank(s)
Effective Date
First American Corporation,
Nashville, Tennessee
Deposit Guaranty Corp.,
Jackson, Mississippi
Deposit Guaranty National Bank,
Jackson, Mississippi
G&W Life Insurance Company,
Jackson, Mississippi
February 3, 1998
Niagara Bancorp, MHC,
Lockport, New York
February 20, 1998
Section 4
February 6, 1998
Sections 3 and 4
Legal Developments
301
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)
Bank(s)
Reserve Bank
Effective Date
Alliance Bancorporation, Inc.,
Hot Springs, Arkansas
Bolivar Banking Corporation,
Shelby, Mississippi
Brookline Bancorp, M.H.C.,
Brookline, Massachusetts
Brookline Bancorp, Inc.,
Brookline, Massachusetts
Capital Community Bancorporation,
Inc.,
Orem, Utah
Carrollton Bancorp, Baltimore,
Maryland
Community Bancshares of
Mississippi, Inc., Employee Stock
Ownership Plan,
Forest, Mississippi
Community Bank Shares of Indiana,
Inc.,
New Albany, Indiana
Alliance Bank of Hot Springs,
Hot Springs, Arkansas
Bank of Bolivar County,
Shelby, Mississippi
Brookline Savings Bank,
Brookline, Massachusetts
St. Louis
January 27, 1998
St. Louis
February 6, 1998
Boston
January 28, 1998
Orem Community Bank,
Orem, Utah
San Francisco
February 4, 1998
Patapsco Valley Bancshares, Inc.,
Ellicott City, Maryland
Community Bancshares of Mississippi,
Inc.,
Forest, Mississippi
Richmond
February 4, 1998
Atlanta
February 5, 1998
NCF Financial Corporation,
Bardstown, Kentucky
NCF Bank and Trust Company,
Bardstown, Kentucky
Community National Bank Corporation,
Venice, Florida
St. Louis
February 12, 1998
Atlanta
January 22, 1998
Canadian State Bank,
Yukon, Oklahoma
Iowa Bank,
Bellevue, Iowa
Florence County National Bank,
Florence, South Carolina
South Platte Bancorp,
Julesburg, Colorado
First National Bank,
Julesburg, Colorado
FNB Financial Services, Inc.,
Durant, Oklahoma
The First National Bank in Durant,
Durant, Oklahoma
Farmers Bancshares of Oberlin, Inc.,
Oberlin, Kansas
Kansas City
February 4, 1998
Chicago
February 3, 1998
Richmond
February 19, 1998
Kansas City
February 11, 1998
Kansas City
January 23, 1998
Kansas City
January 29, 1998
First Alma Bancshares, Inc.,
Alma, Kansas
Kansas City
February 4, 1998
Community National Bank
Corporation Employee Stock
Ownership Plan,
Venice, Florida
CSB Bancshares, Inc.,
Yukon, Oklahoma
Fidelity Company,
Dyersville, Iowa
First National Corporation,
Orangeburg, South Carolina
First Nebraska Banes, Inc.,
Sidney, Nebraska
FNB Financial Services, Inc.
Employee Stock Ownership Plan,
Durant, Oklahoma
Gold Bane Acquisition Corp.,
Inc. II,
Leawood, Kansas
Gold Bane Corporation, Inc.,
Leawood, Kansas
302 Federal Reserve Bulletin • April 1998
Section 3—Continued
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
Harlingen Bancshares, Inc.,
Harlingen, Texas
Lower Rio Grande Valley Bancshares,
Inc.,
La Feria, Texas
First National Bank,
La Feria, Texas
Hoosac Bank,
North Adams, Massachusetts
Laconia Savings Bank,
Laconia, New Hampshire
Dallas
February 10, 1998
Boston
January 15, 1998
Boston
January 30, 1998
Key Community Bank,
Inver Grove Heights, Minnesota
Lincoln Bancshares, Inc.,
Lincolnton, Georgia
Farmers State Bank,
Lincolnton, Georgia
Regency Financial Shares, Inc.,
Richmond, Virginia
Regency Bank,
Richmond, Virginia
Tysons Financial Corporation,
McLean, Virginia
Minneapolis
February 5, 1998
Atlanta
February 19, 1998
Richmond
February 18, 1998
Richmond
February 4, 1998
McCurtain County National Bank,
Idabel, Oklahoma
New McCurtain County National Bank,
Broken Bow, Oklahoma
Paramount Bank,
Bingham Farms, Michigan
Key Florida Bancorp, Inc.,
Bradenton, Florida
Liberty National Bank,
Bradenton, Florida
Farmers & Merchants Bank of Colby,
Colby, Kansas
South Valley Bank & Trust,
Klamath Falls, Oregon
Standard Bank, PaSB,
Murrysville, Pennsylvania
First Sierra Bancshares, Inc.,
Truth or Consequences, New Mexico
Sierra Bank,
Truth or Consequences, New Mexico
State National Bancshares of Delaware,
Dover, Delaware
First National Bank of Denver City,
Denver City, Texas
Tarpon Coast National Bank,
Port Charlotte, Florida
Tippins Bank and Trust Company,
Claxton, Georgia
Kansas City
February 9, 1998
Chicago
January 26, 1998
Atlanta
February 12, 1998
Kansas City
February 5, 1998
San Francisco
January 30, 1998
Cleveland
February 6, 1998
Dallas
February 4, 1998
Atlanta
February 10, 1998
Atlanta
January 22, 1998
Hoosac Financial Services, Inc.,
North Adams, Massachusetts
The Independent Mutual Holding
Company,
Laconia, New Hampshire
Inver Grove Bancshares, Inc.,
Inver Grove Heights, Minnesota
Lincoln Interim Corporation,
Lincolnton, Georgia
MainStreet BankGroup
Incorporated,
Martinsville, Virginia
MainStreet BankGroup
Incorporated,
Martinsville, Virginia
McCurtain County Bancshares, Inc.,
Idabel, Oklahoma
Paramount Bancorp, Inc.,
Bingham Farms, Michigan
Regions Financial Corporation,
Birmingham, Alabama
Security Bancshares, Inc.,
Scott City, Kansas
South Valley Bancorp, Inc.,
Klamath Falls, Oregon
Standard Mutual Holding Company,
Monroeville, Pennsylvania
State National Bancshares, Inc.,
Lubbock, Texas
Tarpon Coast Bancorp, Inc.,
Port Charlotte, Florida
Tippins Bankshares, Inc.,
Claxton, Georgia
Legal Developments
303
Section 3—Continued
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
Union Planters Corporation,
Memphis, Tennessee
Security Bancshares, Inc.,
Des Arc, Arkansas
Farmers and Merchants Bank,
Des Arc, Arkansas
Merchants and Farmers Bank,
West Helena, Arkansas
George Mason Bankshares, Inc.,
Fairfax, Virginia
Chippewa Valley Bancshares, Inc.,
Rittman, Ohio
St. Louis
February 12, 1998
Richmond
January 28, 1998
Cleveland
February 12, 1998
Applicant(s)
Nonbanking Activity/Company
Reserve Bank
Effective Date
Ambank Company, Inc.,
Sioux Center, Iowa
Area Bancshares Corporation,
Owensboro, Kentucky
The Bank of New York Company,
Inc.,
New York, New York
BNY Capital Markets, Inc.,
New York, New York
Banque Nationale de Paris, Paris,
France
BB&T Corporation,
Winston-Salem, North Carolina
Amlend Mortgage Services, Inc.,
Sioux Center, Iowa
SecureWare, Inc.,
Atlanta, Georgia
Mendham Capital Group, Inc.,
Rosedale, New Jersey
Chicago
February 2, 1998
St. Louis
January 23, 1998
New York
February 9, 1998
BNP Securities (U.S.A.), Inc.,
Radnor, Pennsylvania
BB&T Financial Corporation of
Virginia,
Winston-Salem, North Carolina
Life Bancorp, Inc.,
Norfolk, Virginia
National Westminister Bank PLC,
London, England
NatWest Securities Corporation,
New York, New York
San Francisco
February 3, 1998
Richmond
January 22, 1998
New York
February 13, 1998
New York
January 29, 1998
Cleveland
January 23, 1998
United Bankshares, Inc.,
Charleston, West Virginia
Wayne Bancorp, Inc.,
Wooster, Ohio
Section 4
Deutsche Bank AG,
Frankfurt am Main, Federal
Republic of Germany
Deutsche Morgan Grenfell, Inc.,
New York, New York
HUBCO, Inc.,
Mahwah, New Jersey
Huntington Bancshares
Incorporated,
Columbus, Ohio
Poughkeepsie Financial Corp.,
Poughkeepsie, New York
Bank of the Hudson,
Poughkeepsie, New York
SecureWare, Inc.,
Atlanta, Georgia
Security First Network Bank,
Atlanta, Georgia
304 Federal Reserve Bulletin • April 1998
Section 4—Continued
Applicant(s)
Nonbanking Activity/Company
Reserve Bank
Effective Date
Mason-Dixon Bancshares, Inc..
Westminster, Maryland
Bay Finance, LLC,
Baltimore, Maryland
Bay Insurance, LLC,
Baltimore, Maryland
Rose Shanis & Co., Inc.,
Baltimore, Maryland
Rose Shanis Sons, Inc.,
Baltimore, Maryland
Rose Shanis & Co.,
Baltimore, Maryland
Stephen Corp.,
Baltimore, Maryland
Homeside, Inc.,
Jacksonville, Florida
Homeside Lending, Inc.,
Jacksonville, Florida
Brunswick Warburg, Inc.,
New York, New York
Richmond
January 23, 1998
Chicago
January 30, 1998
New York
January 22, 1998
Applicant(s)
Nonbanking Activity/Company
Reserve Bank
Effective Date
CNB Bancshares, Inc.,
Evansville, Indiana
Pinnacle Financial Services, Inc.,
St. Joseph, Michigan
Pinnacle Bank,
St. Joseph, Michigan
Pinnacle Financial Consultants, Inc.,
Valparaiso, Indiana
IndFed Mortgage Company,
Valparaiso, Indiana
Forrest Holdings Inc.,
Lisle, Illinois
Forrest Financial Corporation,
Lisle, Illinois
Kemmons Wilson, Inc.,
Memphis, Tennessee
KW Bancshares, Inc.,
Little Rock, Arkansas
Federal Savings Bank,
Rogers, Arkansas
First Commercial Bank, N.A. of
West Memphis,
West Memphis, Arkansas
Lenox Savings Bank,
Lenox, Massachusetts
St. Louis
February 6, 1998
St. Louis
February 12, 1998
Boston
January 23, 1998
National Australia Bank Limited,
Melbourne, Australia
Swiss Bank Corporation,
Basel, Switzerland
Sections 3 and 4
First Commercial Corporation,
Little Rock, Arkansas
Lenox Financial Services Corp.,
Lenox, Massachusetts
Legal Developments
APPLICATIONS APPROVED UNDER BANK MERGER
305
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.
Applicant(s)
Bank(s)
Effective Date
Centura Bank,
Rocky Mount, North Carolina
Farmers Trust Bank,
Lebanon, Pennsylvania
Pee Dee State Bank,
Timmonsville, South Carolina
Lebanon Valley National Bank,
Lebanon, Pennsylvania
February 24, 1998
February 6, 1998
By Federal Reserve Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to
the Reserve Banks.
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
1 st United Bank,
Boca Raton, Florida
Farmers State Bank,
Victor, Montana
The George Mason Bank,
Fairfax, Virginia
American Bank of Hollywood,
Hollywood, Florida
Farmers State Bank, fsb,
Stevensville, Montana
United Bank,
Arlington, Virginia
Atlanta
January 30, 1998
Minneapolis
January 23, 1998
Richmond
January 28, 1998
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.
Logan v. Greenspan, No. l:98CV00049 (D.D.C., filed January 9, 1998). Employment discrimination complaint.
Department of the Treasury, No. 1-97-CV-3798 (N.D. Ga.,
filed December 23, 1997). Declaratory judgment action
challenging Federal Reserve notes as lawful money.
Ken v. Department of the Treasury, No. CV-S-97-01877DWH (S.D. Nev., filed December 22, 1997). Challenge to
income taxation and Federal Reserve notes.
Allen v. Indiana Western Mortgage Corp., No. 97-7744 RJK
(CD. Cal., filed November 12, 1997). Customer dispute
with a bank.
Patrick v. United States, No. 97-75564 (E.D. Mich., filed
November 7, 1997). Action for damages arising out of tax
dispute.
Leuthe v. Office of Financial Institution Adjudication,
No. 97-1826 (3d Cir., filed October 22, 1997). Appeal of
district court dismissal of action against the Board and other
Federal banking agencies challenging the constitutionality
of the Office of Financial Institution Adjudication.
Patrick v. United States, No. 97-75017 (E.D. Mich., filed
September 30, 1997). Action for damages arising out of tax
dispute.
Artis v. Greenspan, No. 97-5234 (D.C. Cir., filed September 19, 1997). Appeal of district court order dismissing
employment discrimination action. On January 29, 1998,
the Court of Appeals granted the Board's motion for summary affirmance of the District Court's dismissal of the
complaint.
Artis v. Greenspan, No. 97-5235 (D.C. Cir., filed September 19, 1997). Appeal of district court order dismissing
employment discrimination class action.
Towe v. Board of Governors, No. 97-71143 (9th Cir., filed
September 15, 1997). Petition for review of a Board order
dated August 18, 1997, prohibiting Edward Towe and
Thomas E. Towe from further participation in the banking
industry.
Branch v. Board of Governors, No. 97-5229 (D.C. Cir., filed
September 12, 1997). Appeal of district court order denying
motion to compel production of pre-decisional supervisory
documents and testimony sought in connection with an
action by Bank of New England Corporation's trustee in
bankruptcy against the Federal Deposit Insurance Corpora-
306
Federal Reserve Bulletin D April 1998
tion. On November 10, 1997, the court denied appellant's
request for expedited consideration of the appeal. Oral
argument is scheduled for May 4, 1998.
Clarkson v. Greenspan, No. 97-CV-2035 (D.D.C., filed September 5, 1997). Freedom of Information Act case. On
January 20, 1998, the Board filed a motion to dismiss the
action.
Banking Consultants of America v. Board of Governors,
No. 97-2791 (W.D. Tenn., filed September 2, 1997). Action
to enjoin investigation by the Board, the Office of the
Comptroller of the Currency, and the Department of Labor.
On January 23, 1998, the court granted the Board's motion
to dismiss the action.
Betters-worth v. Board of Governors, No. 97-CA-624 (W.D.
Tex., filed August 21, 1997). Privacy Act case.
Wilkins v. Warren, No. 97-CV-590 (E.D. Va., filed August 4,
1997). Customer dispute with a bank. On February 13,
1998, the court granted the Board's motion to dismiss the
action.
Greeff v. Board of Governors, No. 97-1976 (4th Cir., filed
June 17, 1997). Petition for review of a Board order dated
May 19, 1997, approving the application of by Allied Irish
Banks, pic, Dublin, Ireland, and First Maryland Bancorp,
Baltimore, Maryland, to acquire Dauphin Deposit Corporation, Harrisburg, Pennsylvania, and thereby acquire Dauphin's banking and nonbanking subsidiaries.
Maunsell v. Greenspan, No. 97-6131 (2d Cir., filed May 22,
1997). Appeal of district court dismissal of action for compensatory and punitive damages for alleged violations of
civil rights by federal savings bank.
Vickery v. Board of Governors, No. 97-1344 (D.C. Cir., filed
May 9, 1997). Petition for review of a Board order dated
April 14, 1997, prohibiting Charles R. Vickery, Jr., from
further participation in the banking industry. Oral argument
was heard on February 24, 1998.
Pharaon v. Board of Governors, No. 97-1114 (D.C. Cir., filed
February 28, 1997). Petition for review of a Board order
dated January 31, 1997, imposing civil money penalties and
an order of prohibition for violations of the Bank Holding
Company Act. Oral argument was held on December 8,
1997, and on February 10, 1998, the court of appeals
affirmed the Board's order.
The New Mexico Alliance v. Board of Governors, No. 9 8 1049 (D.C. Cir., transferred as of January 21, 1998). Petition for review of a Board order dated December 16, 1996,
approving the acquisition by NationsBank Corporation and
NB Holdings Corporation, both of Charlotte, North Carolina, of Boatmen's Bancshares, Inc., St. Louis, Missouri. On
January 21, 1998, the United States Court of Appeals for
the Tenth Circuit ordered the petition transferred to the
United States Court of Appeals for the District of Columbia
Circuit.
American Bankers Insurance Group, Inc. v. Board of Governors, No. 96-CV-2383-EGS (D.D.C., filed October 16,
1996). Action seeking declaratory and injunctive relief invalidating a new regulation issued by the Board under the
Truth in Lending Act relating to treatment of fees for debt
cancellation agreements. On October 18, 1996, the district
court denied plaintiffs' motion for a temporary restraining
order. On January 17, 1997, the parties filed cross-motions
for summary judgment.
Board of Governors v. Pharaon, No. 91-CIV-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 ORDERS ISSUED BY THE BOARD
OF GOVERNORS
Clark M. Clifford
Robert A. Altman
Washington, D.C.
The Federal Reserve Board announced on February 3,
1998, the consent settlement of administrative enforcement
proceedings against Clark M. Clifford and Robert A. Altman, former directors of Credit and Commerce American
Holdings, N.V., Netherlands Antilles, formerly a bank
holding company. Under the settlement, Clifford and Altman agreed to pay approximately $5 million in compensation and Altman agreed not to participate in the banking
industry without the prior approval of the Board.
John E. Colley
Schenectady, New York
The Federal Reserve Board announced on February 13,
1998, the issuance of a Combined Order of Prohibition and
Assessment of a Civil Money Penalty against John E.
Colley, a former employee and institution-affiliated party
of the Trustco Bank New York, Schenectady, New York,
formerly a state-chartered bank that was a member of the
Federal Reserve System.
Stephen R. Koury
New Castle, Pennsylvania
The Federal Reserve Board announced on February 6,
1998, the issuance of an Order of Prohibition against
Stephen R. Koury, a former employee and institutionaffiliated party of First Western Trust Services Company,
New Castle, Pennsylvania, a registered bank holding company.
Michael A. Lindahl
Croton, Ohio
The Federal Reserve Board announced on February 6,
1998, the issuance of an Order of Prohibition against
Michael A. Lindahl, a former officer and institution-
Legal Developments
affiliated party of the Heartland Bank, Croton, Ohio, a state
member bank.
Towne Bank
Perrysburg, Ohio
The Federal Reserve Board announced on February 6,
1998, the issuance of a Cease and Desist Order against the
Towne Bank, Perrysburg, Ohio. The Order was issued
jointly with the Ohio Division of Financial Institutions.
307
Michael Wachs
New York, New York
The Federal Reserve Board announced on February 6,
1998, the issuance of an Order of Prohibition against
Michael Wachs, a former Managing Director and
institution-affiliated party of the Chase Manhattan Corporation, New York, New York, a registered bank holding
company, and Chase Securities, Inc., a nonbank subsidiary
of Chase Manhattan Corporation.
308
Federal Reserve Bulletin • April 1998
Al
Financial and Business Statistics
A3
GUIDE TO TABULAR
DOMESTIC FINANCIAL STATISTICS
Money Stock and Bank
A4
A5
A6
Credit
Reserves, money stock, liquid assets, and debt
measures
Reserves of depository institutions and Reserve Bank
credit
Reserves and borrowings—Depository
institutions
Policy Instruments
A7
A8
A9
Federal Finance—Continued
PRESENTATION
Federal Reserve Bank interest rates
Reserve requirements of depository institutions
Federal Reserve open market transactions
Federal Reserve Banks
A10 Condition and Federal Reserve note statements
A l l Maturity distribution of loan and security
holding
ATI Gross public debt of U.S. Treasury—
Types and ownership
A28 U.S. government securities
dealers—Transactions
A29 U.S. government securities dealers—
Positions and financing
A30 Federal and federally sponsored credit
agencies—Debt outstanding
Securities Markets and Corporate Finance
A31 New security issues—Tax-exempt state and local
governments and corporations
A32 Open-end investment companies—Net sales
and assets
A32 Corporate profits and their distribution
A32 Domestic finance companies—Assets and
liabilities
A33 Domestic finance companies—Owned and managed
receivables
Real Estate
Monetary and Credit Aggregates
A12 Aggregate reserves of depository institutions
and monetary base
A13 Money stock, liquid assets, and debt measures
Commercial Banking Institutions—
Assets and Liabilities
A15
A16
A17
A19
A20
All commercial banks in the United States
Domestically chartered commercial banks
Large domestically chartered commercial banks
Small domestically chartered commercial banks
Foreign-related institutions
A34 Mortgage markets—New homes
A35 Mortgage debt outstanding
Consumer Credit
A36 Total outstanding
A3 6 Terms
Flow of Funds
A37
A39
A40
A41
Funds raised in U.S. credit markets
Summary of financial transactions
Summary of credit market debt outstanding
Summary of financial assets and liabilities
Financial Markets
A22 Commercial paper and bankers dollar
acceptances outstanding
A22 Prime rate charged by banks on short-term
business loans
A23 Interest rates—Money and capital markets
A24 Stock market—Selected statistics
Federal Finance
A25 Federal fiscal and financing operations
A26 U.S. budget receipts and outlays
A27 Federal debt subject to statutory limitation
DOMESTIC NONFINANCIAL STATISTICS
Selected
A42
A42
A43
A44
A46
A47
A48
A49
Measures
Nonfinancial business activity
Labor force, employment, and unemployment
Output, capacity, and capacity utilization
Industrial production—Indexes and gross value
Housing and construction
Consumer and producer prices
Gross domestic product and income
Personal income and saving
A2
Federal Reserve Bulletin • April 1998
INTERNATIONAL STATISTICS
Summary Statistics
A50
A51
A51
A51
U.S. international transactions
U.S. foreign trade
U.S. reserve assets
Foreign official assets held at Federal Reserve
Banks
A52 Selected U.S. liabilities to foreign official
institutions
Reported by Banks in the United States
A52
A53
A55
A56
Liabilities to, and claims on, foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A56 Banks' own claims on unaffiliated foreigners
A57 Claims on foreign countries—Combined
domestic offices and foreign branches
Reported by Nonbanking Business
Enterprises in the United States
A58 Liabilities to unaffiliated foreigners
A59 Claims on unaffiliated foreigners
Securities Holdings and Transactions
A60 Foreign transactions in securities
A61 Marketable U.S. Treasury bonds and
notes—Foreign transactions
Interest and Exchange Rates
A61 Discount rates of foreign central banks
A61 Foreign short-term interest rates
A62 Foreign exchange rates
A63 GUIDE TO STATISTICAL RELEASES AND
SPECIAL TABLES
A64 INDEX TO STATISTICAL TABLES
A3
Guide to Tabular Presentation
SYMBOLS AND
c
e
n.a.
P
r
*
0
ATS
BIF
CD
CMO
FFB
FHA
FHLBB
FHLMC
FmHA
FNMA
FSLIC
G-7
ABBREVIATIONS
Corrected
Estimated
Not available
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
G-10
GNMA
GDP
HUD
IMF
IO
IPCs
IRA
MMDA
MSA
NOW
OCD
OPEC
OTS
PO
REIT
REMIC
RP
RTC
SCO
SDR
SIC
VA
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
Metropolitan statistical area
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
Securitized credit obligation
Special drawing right
Standard Industrial Classification
Department of Veterans Affairs
GENERAL INFORMATION
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
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
1.10
Domestic Financial Statistics • April 1998
RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES
Percent annual rate of change, seasonally adjusted'
Monetary or credit aggregate
Ql
Q2
Q3
Q4
Sept.
-1.8
-2.4
-3.4
6.3
-1.3
-4.1
.7
8.1
-18.9
-20.5
-15.0
6.8
4.4
7.7
8.4
4.7
.3
5.4
8.1
7.1
4.1
6.8
9.8
9.3
5.2
6.3
7.7
18.0
7.9
18.9
7.3
16.9
9.0
12.8
2.9
19.4
11.0
5.6
24.1
9.5
7.1
17.2
7
.0
13.5
6.0
-2.9
4.3
Money market mutual funds
18 Retail
19 Institution-only
14.7
18.4
13.5
18.0
Repurchase agreements and Eurodollars
20 Repurchase agreements10
21 Eurodollars10
6.2
35.8
1.8
5.2
1
2
3
4
Reserves of depository institutions
Total
Required
Nonborrowed
Monetary base3
-8.3
-8.4
-7.2
5.3
-14.3
-15.0
-16.0
3.7
5
6
7
8
9
Concepts of money, liquid assets, and debt*
Ml
M2
M3
L
Debt
-1.4
5.1
8.0
7.0
4.3
-4.5
Nontransaction components
10 In M25
11 In M3 only6
Time and savings deposits
Commercial banks
Savings, including MMDAs
Small time7
Large time8-9
Thrift institutions
15 Savings, including MMDAs
16 Small time7
17 Large time8
12
13
14
Debt components*
22 Federal
23 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 (OCI>s), consisting of negotiable order of
withdrawal (NOW) and aulomaljc transfer service (ATS) accounts al depository institutions,
credit union share draft accounts, and demand deposits al thrift institutions. Seasonally
adjusted Ml is computed by summing currency, travelers checks, demand deposits, and
OCDs, each seasonally adjusted separately
M2: Ml plus (1) savings (including MMDAs). (2) small-denomination time deposits (time
deposits—including retail RPs—in amounts of less than $100,000), and (3) balances in retail
money market mutual funds (money funds with minimum initial investments of less than
$50,000). Excludes individual retirement accounts (IRAs; and Keogh balances at depository
institutions and money market funds. Seasonally adjusted M2 is calculated by summing
savings deposits, small-denomination time deposits, and retail money fund balances, each
seasonally adjusted separately, and adding this result to seasonally adjusted Ml.
M3: M2 plus (1) large-denomination lime deposits (in amounts of $100,000 or more), (2)
balances in institutional money funds (money funds with minimum initial investments of
$50,000 or more). (3) RP liabilities (overnight and term) issued by all depository institutions,
and (4) Eurodollars (overnight and term) held by U.S. residents at foreign branches of U.S.
banks worldwide and at all banking offices in the United Kingdom and Canada. Excludes
Oct.
6.8
10.6
5.1
13.7
10.9
8.5
7.0
4.1
9.9
-20.9
-24.4
-18.2
5.9
8.7
7.2
4.9
-1.9
5.9
8.5
6.9
5.5
8.2
7.3
11.5
12.9
5.3
7.6
6.8
11.0
11 7
4.8
-3.0
6.9
10.6
n.a.
n.a.
11.8
16.6
6.5
19.2
16.7
24.4
23.8
10.5
21.9
16.3
3.1
14.0
20.4
3.7
18.2
17.4
2.5
6.6
11.9
5.6
22.6
13.6
1.0
19.9
13.4
1.0
1.3
-3.6
5.3
.3
-5.5
1.4
2.2
-5.2
9.8
-.6
-9.4
11.5
5.1
.3
11.4
6.4
4.2
29.6
16.0
19.7
15.6
22.0
23.3
28.2
10.2
22.9
14.4
4.8
34.5
22.9
14.7
6.8
32.2
13.4
19.5
39.3
7.0
-4.6
21.3
56.2
-13.9
79.5
-4.4
10.8
38.0
68.8
18.0
.4
6.3
-.6
.9
6.7
5.8
-8.4
1.1
6.2
-5.5
-8.3
-1.2
8.6
-1.0
1.4
.5
7.2
7.0
7.6
.3
7.0
.0
5.1
2.2
5.7
amounts held by depository institutions, the U.S. government, money market funds, and
foreign banks and official institutions. Seasonally adjusted M3 is calculated by summing large
time deposits, institutional money fund balances, RP liabilities, and Eurodollars, each
seasonally adjusted separately, and 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: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial
sectors—the federal sector (U.S. government, not including government-sponsored enterprises or federally related mortgage pools) and the nonfederal sectors (state and local
governments, households and nonprofit organizations, nonfinancial corporate and nonfarm
noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and
corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data,
which are derived from the Federal Reserve Board's flow of funds accounts, are breakadjusted (that is, discontinuities in the data have been smoothed into the series) and
month-averaged (that is, the data have been derived by averaging adjacent month-end levels).
5. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail
money fund balances, each seasonally adjusted separately.
6. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities
(overnight and term) issued by depository institutions, and (4) Eurodollars (overnight and
term) of U.S. addressees, each seasonally adjusted separately.
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, the U.S. government, and foreign banks and official institutions.
10. Includes both overnight and term.
Money Stock and Bank Credit A5
1.11
RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT1
Millions of dollars
Average of
daily figures
Average of daily figures for week ending on date indicated
1998
1998
1997
Nov.
Dec. 17
Dec. 24
Dec. 31
Jan. 7
Jan. 14
Jan. 21
Jan. 28
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding
U.S. government securities2
2
Bought outright—System account3
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
460,675
469,563'
468,726
466,689
476,255'
476,928
468,283
466,446
465,389
416,535
8,910
427,860
7,197
429,845
4,155
430,419
2,900
429,198
7,270
430,866
9,917
430,973
9,827
430,981
3,433
429,718
1,920
428,462
2,896
686
1,698
0
685
1,156
0
685
833
0
685
798
0
685
1,483
0
685
1,502
0
685
1,523
0
685
826
0
685
403
0
685
422
0
49
110
0
585
32.102
252
79
0
931
31,404
188
18
0
1,234
31,769
0
486
31,040
92
78
0
905'
31,936
673
64
0
766'
31,782
352
23
0
1,989
31,556
22
20
0
690
31,626
364
16
0
1,798
31.543
87
16
0
594
32,228
11.050
9,200
25.595r
11.049
9,200
25.602'
11,046
9.200
25,644
11,049
9,200
25,602'
11,049
9,200
25,604'
11,048
9,200
25.606'
11,047
9,200
25,620
11,046
9,200
25.634
11.046
9,200
25,648
11.044
9.200
25,662
466,939'
2+4
475,661'
230
474,085
224
473.081'
231
477,120'
229
481,545'
229
480,719
225
475,243
228
472,553
227
470,160
219
5,126
213
6,950
5,107
177
6.922
354
16.025
10.938'
6.507
188
7,198
421
6,330
170
5.001
156
4,758
213
6,803
6,986'
333
6,954'
5,031
244
6,792
796
15,636
13,353
5,253
177
7,007
252
9,762
9,148
161
7,377
329
16,127
6,417
6,976
166
7.584
343
16.083
9,765
Jan. 14
Jan. 21
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'
364
16,140
10,544
16,016
9,976
379
16,192
9.354
16,343
11,330
365
16,223
11,821'
16,240
Wednesday figures
End-of-month figures
Dec.
Dec. 24
Dec. 31
Jan. 7
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding
U.S. government securities2
2
Bought outright—System account'
3
Held under repurchase agreements
Federal agency obligations
4
Bought outrighl
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
465,930
.. .
12 Gold stock
13 Special drawing rights certificate account
14 Treasury currency outstanding
463,591
476.015
475,607'
490.034'
472,413
472,870
473.661
419,882
10,416
430.736
21,188
428,043
430.546
9.415
432,059
7,123
430,736
21,188
430,039
4,275
431,714
5,465
429,553
6,271
427,975
8,978
685
685
2,652
0
685
1,268
0
685
2,652
0
685
747
0
2,216
0
685
1,356
0
685
0
685
1,902
0
685
3.782
0
3
87
0
74
31,001
2,001
35
0
719'
32,020
0
700
32.072
894
84
0
400
32.111
21
75
0
2,136'
31,606
2,001
35
0
719'
32,020
7
19
0
5,291
31,352
20
20
0
-245
32.377
367
15
0
2,453
32,171
14
13
0
2,222
33.014
11,051
9,200
25,598'
11,047
9,200
25,606'
11.046
9,200
25,676
11,049
9,200
25,602'
11,048
9,200
25,604'
11,047
9,200
25,606'
11,047
9,200
25,620
11,046
9,200
25,634
11,046
9,200
25,648
11,044
9,200
25,662
471,226'
234
482,390'
225
468,337
220
475,343'
229
480,521'
229
482,390'
225
478,691
228
473,960
229
472,384
219
470,034
220
5.552
215
7,278
343
15,969
11,598
7.493
154
6,803
381
16,021
15,442
4,949
157
6.986
296
16,141
12,179'
5,444
457
5,580
159
6,792
199
15,735
10,896
4,644
15,430
161
7,377
330
15,929
6,933
6,846
760
0
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'
5,127
167
7,178
509
15,559
11,780
5,444
457
6,954
900
15,500
24,017'
1. Amounts of cash held as reserves are shown in table 1.12, line 2.
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.
6,954
900
15,500
24,017'
157
7,007
337
15,971
15,826
158
7,584
334
15,853
18,538
3. Includes compensation that adjusts for the effects of inflation on the principal of
inflation-indexed securities.
4. Excludes required clearing balances and adjustments to compensate for float.
A6
Domestic Financial Statistics • April 1998
1.12
RESERVES AND BORROWINGS
Millions of dollars
Depository Institutions'
Prorated monthly averages of biweekly averages
Reserve classification
1 Reserve balances with Reserve Banks"
2 Total vault cash'
4
Surplus vault cash5
7
Excess reserve balances at Reserve Banks7
8 Total borrowings at Reserve Banks8
10
Extended credit9
1998
1995
1996
1997
1997
Dec.
Dec.
Dec.
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
20,440
42,094
37.460
4,634
57.900
56.622
1.278
257
40
0
13.395
44,379'
37,848
6,532'
51,243
49,819
1,424
155
68
0
10,673'
43,970
37,206
6.763
47,880
46,196'
1,683
324
79
0
9,851
43,145'
36,529
6,616'
46,380
45,179
1,201
409
330
0
10,489
42,379'
36,156
6,224'
46,645
45,392
1,253
598
385
0
9,742
43,056'
36,314
6,742'
46,056
44,761
1,295
438
368
0
9,990
41.730
35,631
6,099'
45,621
44,225
1,396
270
227
0
10,559
42,114
35,892
6,222
46,451
44,834
1,617
153
115
0
10,673'
43,970
37,206
6,763
47,880
46,196'
1,683
324
79
0
9,736
46,672
37,767
8,905
47,503
45,719
1,784
210
18
0
Biweekly averages of daily figures for two week periods ending on dates indicated
1997
1 Reserve balances with Reserve Banks2
2 Total vault cash3
4
Surplus vault cash5
6
Required reserves
7
Excess reserve balances at Reserve Banks
8 Total borrowings at Reserve Banks8
10
Extended credit9
Oct. 8
Oct. 22
Nov. 5
Nov. 19
Dec. 3
Dec. 17
Dec. 31'
Jan. 14
Jan. 28
Feb. 11
9,883
42,603
36.329
6.274'
46.211
44,772
1,439
356
308
0
9,756
41,097'
35,177
5,920'
44,932
43,731
1,201
241
220
0
10,451
41,941'
35,718
6.224'
46.168
44,507
1,661
238
167
0
10,234
42,129
35,817
6.312
46.051
44,540
1,510
149
112
0
11,022
42,175
36,068
6,108
47,090
45,357
1,733
119
95
0
9,678
44,267
36,965
7,302
46,643
45,170
1,473
240
85
0
11,595
44,058
37,692
6,366
49,286
47,403
1,883
454
71
0
11,500
44,958
37,976
6,982
49,476
47,659
1,817
209
22
0
8,177
48,839
37,841
10,998
46,018
44,228
1,790
242
16
0
8,783
44.560
36,447
8,113
45,230
43,628
1,602
67
9
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. Data are not break-adjusted or seasonally adjusted,
2. Excludes required clearing balances and adjustments to compensaie 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 may 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 meir required reserves) to satisfy current reserve requirements.
1998
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 effect of extended credit is
similar to that of nonborrowed reserves.
Policy Instruments A7
1.14 FEDERAL RESERVE BANK INTEREST RATES
Percent per year
Current and previous levels
Adjustment credit
Federal Reserve
Bank
Seasonal credit
Effective date
Previous rate
On
3/6/98
Effective date
Boston
New York....
Philadelphia..
Cleveland
Richmond....
Atlanta
2/1/96
1/31/96
1/31/96
1/31/96
2/1/96
1/31/96
5.25
5.55
2/26/98
Chicago
St. Louis
Minneapolis. .
Kansas City . .
Dallas
San Francisco.
2/1/96
2/5/96
1/31/96
2/1/96
1/31/96
1/31/96
On
3/6/98
Extended credit
On
3/6/98
Previous rate
6.05
Previous rate
6.00
2/26/98
5.50
Range of rates for adjustment credit in recent years
Effective date
Range (or
level)—All
F.R. Banks
In effect Dec. 31, 1977
1978—Jan.
6
9
20
11
12
3
10
21
22
16
20
1
3
6-6.5
6.5
6.5-7
7
7-7.25
7 25
7.75
8
8-8.5
85
8.5-9.5
95
1979 July 20
Aug. 17
20
Sept. 19
21
Oct 8
10
10
10-10.5
105
10.5-11
11
11-12
12
1980—Feb 15
19
May 29
30
June 13
16
July 28
29
Sept. 26
Nov 17
Dec. 5
8
1981 Mav 5
12-13
13
12-13
12
11-12
11
10-11
10
11
12
12-13
13
13 14
14
May
July
Aug
Sept
Oct
Nov
F.R. Bank
of
NT.
6
6.5
6.5
7
7
7.25
7 25
7.75
8
8.5
85
9.5
95
10
10.5
10.5
11
11
12
12
13
13
13
12
11
11
10
10
11
12
13
13
14
14
13-14
13
12
198i_Nov. 2
6
Dec. 4
F.R. Bank
of
N.Y.
13
13
12
11.5-12
11.5
11-11.5
11
10.5
10-10.5
10
9 5-10
9.5
9-9.5
9
8.5-9
8.5-9
8.5
11.5
11.5
11
11
10.5
10
10
95
9.5
9
9
9
8.5
85
9
13
Nov. 21
26
Dec. 24
8.5-9
9
8.5-9
8.5
8
9
9
8.5
8.5
8
1985 May 20
24
7.5-8
7.5
7.5
75
1986—Mar. 7
10 .
Apr 21
23
July 11
Aug. 21
22
7-7.5
7
65 7
6.5
6
5.5-6
5.5
7
7
65
6.5
6
5.5
5.5
1987—Sept 4
11
5.5-6
6
6
6
1982—July 20
23
Aug. 2
16
27
30
Oct 12
13
Nov. 22
26
Dec. 14
15
17 ..
1984—Apr.
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
thai cannot be met through special industry lenders. The discount rate on seasonal credit takes
into account rates charged by 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 ordinarily is
charged on extended-credit loans outstanding less than thirty days; however, at the discretion
Range (or
level)—All
F.R. Banks
Effective date
....
Range (or
level)—All
F.R. Banks
F.R. Bank
of
N.Y.
1988—Aug. 9
11
6-6.5
6.5
6.5
6.5
1989—Feb. 24
27
6.5-7
7
7
7
Effective date
1990—Dec. 19
6.5
6.5
1
4
30
2
13
17
6
7
20
24
6-o\5
6
5.5-6
55
5-5.5
5
4.5-5
4.5
3.5-4.5
35
6
6
5.5
5.5
5
5
4.5
4.5
3.5
3.5
2
7
3-3.5
3
3
3
3-3.5
3.5
3.5^1
4
4-4.75
4.75
3.5
3.5
4
4
4 75
4.75
1
9
4.75-5.25
5 25
5.25
5.25
1996 Jan 31
Feb. 5
5.00-5.25
5.00
5.00
5.00
500
5.00
1991—Feb.
Apr.
May
Sept.
Nov
Dec.
1992 July
1994—May 17
18
Aug. 16
18
Nov. 15
17
1995—Feb.
In effect Mar 6 1998
of the Federal Reserve Bank, this time period may be shortened. Beyond this initial period, a
flexible rate somewhat above rates charged 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, 19701979.
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 subsequendy 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.
A8
Domestic Financial Statistics • April 1998
1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1
Type of deposit
Net transaction accounts
1 $0 million-$47.8 million3. .
2 More than $47.8 million4 . .
1/1/98
1/1/98
3
Nonpersonal time deposits5.
12/27/90
4
Eurocurrency liabilities6. . ..
12/27/90
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 the Monetary Control Act of 1980, 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. Transaction accounts include all deposits against which the account holder is permitted
to make withdrawals by negotiable or transferable instruments, payment orders of withdrawal, or telephone or preauthorized transfers for the purpose of making payments to third
persons or others. However, accounts subject to the rules that permit no more than six
preauthorized, automatic, or other transfers per month (of which no more than three may be
by check, draft, debit card, or similar order payable directly to third parties) are savings
deposits, not transaction accounts.
3. 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 of each year. Effective with the reserve maintenance period beginning January 1,
1998, for depository institutions that report weekly, and with the period beginning January 15,
1998, for institutions that report quarterly, the amount was decreased from $49.3 million to
$47.8 million.
Under the Garn-St Germain Depository Institutions Act of 1982, the Board adjusts the
amount of reservable liabilities subject to a 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 made in the event of a decrease. The exemption applies only to
accounts that would be subject to a 3 percent reserve requirement. Effective with the reserve
maintenance period beginning January 1, 1998, for depository institutions that report weekly,
and with the period beginning January 15, 1998, for institutions that report quarterly, the
exemption was raised from $4.4 million to $4.7 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 1XA years was reduced from 3 percent to 11/2 percent for
the maintenance period that began Dec. 13, 1990, and to zero for the maintenance period that
began Dec. 27, 1990. For institutions that report quarterly, the reserve requirement on
nonpersonal time deposits with an original maturity of less than 1 lA years was reduced from 3
percent to zero on Jan. 17, 1991.
The reserve requirement on nonpersonal time deposits with an original maturity of 1 l/z
years or more has been zero since Oct. 6, 1983.
6. The reserve requirement on Eurocurrency liabilities was reduced from 3 percent to zero
in the same manner and on the same dates as the reserve requirement on nonpersonal time
deposits with an original maturity of less than I l/i years (see note 5).
Policy Instruments A9
1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1
Millions of dollars
Type of transaction
and maturity
July
Aug.
Sept.
U.S. TREASURY SECURITIES 2
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
Outright transactions (excluding matched
transactions)
Treasury bills
Gross purchases
Gross sales
Exchanges
For new bills
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
Matched transactions
26 Gross purchases
27 Gross sales
Repurchase agreements
28 Gross purchases
29 Gross sales
10,932
0
405,296
405,296
900
9,901
0
426,928
426,928
0
9,147
0
419,347
418.997
0
596
0
33,022
33,022
0
0
0
35,948
35,948
0
0
0
35,666
35,666
0
0
0
28,328
28,328
0
0
0
39,313
39,313
0
0
0
33,485
33,485
0
4,545
0
26,905
26,905
0
390
0
43,574
-35,407
1.776
524
0
30,512
-41.394
2,015
5,748
0
43,473
-27,499
0
494
0
1,476
-2,250
0
0
0
4,359
-1,087
598
0
0
7,487
-2,780
0
644
0
1,596
-2,382
0
0
0
3,193
-1,267
416
1,462
0
5,231
-4.126
0
1.947
0
1,748
-2,329
0
5,366
0
-34,646
26,387
3,898
0
-25,022
31.459
20.299
0
-39,744
20,274
2,797
0
-1,476
2,250
0
0
-4,359
1,087
0
0
-5,247
1.170
2,697
0
-1,596
2,382
0
0
-3,193
1.267
3,323
0
-4,883
1,651
4.471
0
-1,748
2,329
1,432
0
-3,093
7,220
1,116
0
-5,469
6,666
3,101
0
-1,954
5,215
499
0
0
0
0
0
0
0
0
0
-2,240
0
0
0
0
770
0
0
0
485
0
31
1.295
613
0
0
0
2,529
0
-2,253
1,800
1,655
0
-20
3,270
5,827
0
-1,775
2,360
906
0
0
0
0
0
0
0
0
0
0
730
0
0
0
0
648
0
0
0
954
0
-379
1.180
1,214
0
0
0
20,649
0
2,676
17,094
0
2.015
44.122
0
1,996
5,292
0
0
0
0
0
0
0
3,341
0
0
1,418
0
416
6,224
0
0
12,790
0
0
2,197,736
2,202,030
3,092,399
3,094,769
3,586,584
3,588,905
293,506
293.008
307,101
309,578
317,008
315,439
311,153
312,083
316,425
318,485
272,474
269,586
353,726
355,668
331,694
328,497
457,568
450,359
810,485
809,268
55,073
47,070
44,087
53,217
54,561
50,340
77,109
74,960
75,323
78,157
73,618
73,064
97.932
87,160
19,919
41.022
13,793
5,790
4,560
-3,893
9,666
21,620
0
0
1,003
0
0
409
0
0
1,540
0
0
474
0
0
287
0
0
179
0
0
105
0
0
215
36,851
36,776
75,354
74,842
160,409
159,369
8,401
9,131
10,437
10,811
13,131
11,252
9,796
11,196
15,639
15,157
23,054
20,976
20.056
21,186
30 Net change in U.S. Treasury securities
FEDERAL AGENCY OBLIGATIONS
Outright transactions
31 Gross purchases
32 Gross sales
33 Redemptions
Repurchase agreements
34 Gross purchases
35 Gross sales
36 Net change in federal agency obligations
37 Total net change in System Open Market Account.
-928
103
-500
-1,204
-661
1.700
-1,505
267
2,052
-1,130
15,948
20,021
40,522
12389
-12,866
7,490
3,055
-3,626
11,718
20,490
1. Sales, redemptions, and negative figures reduce holdings of the System Open Market
Account; all other figures increase such holdings.
2. Transactions exclude changes in compensation for the effects of inflation on the principal
of inflation-indexed securities.
A10
1.18
Domestic Financial Statistics • April 1998
FEDERAL RESERVE BANKS
Condition and Federal Reserve Note Statements1
Millions of dollars
End of month
Wednesday
Account
1997
Dec. 31
1997
1998
Jan. 7
Jan. 14
Jan. 21
Jan. 28
1998
Nov. 30
Dec. 31
Jan. 31
Consolidated condition statemen
ASSETS
11,047
9,200
460
11,047
9,200
448
11,046
9,200
476
11,046
9,200
510
11,044
9,200
532
11,051
9,200
495
11,047
9,200
460
11,046
9,200
556
2,035
0
0
26
0
0
40
0
0
382
0
0
27
0
0
90
0
0
2,035
0
0
24
0
0
685
2,652
685
747
685
2,216
685
1,356
685
760
685
3,782
685
2,652
685
1,268
451,924
434,314
437,179
435,824
436,953
430,298
451,924
428,843
10 Bought outright
11 Bills
12
Notes
13 Bonds
14 Held under repurchase agreements
430,736
197,123
174,206
59,407
21,188
430,039
196,426
174,206
59,407
4,275
431,714
198,101
174,206
59,407
5,465
429,553
196,418
173,728
59,407
6,271
427,975
194,841
173,727
59,407
8,978
419,882
194,519
167,170
58,193
10,416
430,736
197,123
174,206
59,407
21,188
428,043
194,909
173,727
59,407
800
15 Total loans and securities
457,295
435,771
440,119
438,246
438,425
434,855
457,295
430,820
7,800
1,272
12,562
1,272
7,684
1,274
11,980
1,275
8,180
1,274
3,262
1,264
7,800
1,272
5.185
1,273
17,046
13 726
17,053
13015
17,061
14 035
17,068
13 894
17,076
15 084
17,345
12 384
17,046
13 726
17,019
13,693
517,847
500,367
500,895
503,219
500,816
489,856
517,847
488,792
2 Special drawing rights certificate account
Loans
5 Other
6 Acceptances held under repurchase agreements
Federal agency obligations
9 Total US. Treasury securities
2
17 Bank premises
Other assets
18 Denominated in foreign currencies'
19 All other4
20 Total assets
LIABILITIES
457,469
453,747
449.031
447,464
445,125
446,357
457,469
443,438
22 Total deposits
37,639
23,570
29,286
29,845
33,767
25,073
37,639
24,937
23 Depository institutions
24 US. Treasury—General account
30,838
5,444
457
900
17,632
5,580
159
199
24,148
4,644
157
337
13,923
15,430
161
330
26,426
6,846
158
334
19,271
5,127
167
509
30,838
5,444
457
900
18,826
5,552
215
343
7,239
4,846
7,314
4,581
6,606
4,775
9,980
4,718
6,071
4,635
2,866
4,908
7,239
4,846
4,449
4,635
507,193
489,213
489,698
492 008
489,598
479,204
507,193
477,458
5,433
5,220
0
5,439
5,220
494
5,473
5,220
503
5,471
5,220
519
5.476
5,220
522
5.314
4,348
990
5,433
5,220
0
5,477
5,220
636
517,847
500,367
500,895
503,219
500,816
489,856
517,847
488,792
602,834
600,196
602,290
603,293
605,315
618,612
602,834
607,873
21 Federal Reserve notes
26 Other
27 Deferred credit items
29 Total liabilities
CAPITAL ACCOUNTS
31 Surplus
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
549,600
92,131
457,469
549,231
95.484
453,747
548,053
99,022
449,031
548,437
100,972
447.464
548,150
103,025
445,125
547,796
101,440
446,357
549,600
92,131
457,469
547,998
104,561
443,438
39 Special drawing rights certificate account
40 Other eligible assets
41 U.S. Treasury and agency securities
11,047
9,200
0
437.222
11,047
9,200
0
433,500
11,046
9,200
0
428,786
11,046
9,200
0
427,219
11,044
9,200
0
424,881
11,051
9,200
0
426,106
11,047
9,200
0
437,222
11,046
9,200
0
423,192
42 Total collateral
457,469
453,747
449,031
447,464
445,125
446357
457,469
443,438
Collateral held against notes, net
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 includes compensation that adjusts for the effects of inflation on
the principal of inflation-indexed securities. 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 ai market
exchange rates of foreign exchange commitments.
Federal Reserve Banks
1.19
FEDERAL RESERVE BANKS
All
Maturity Distribution of Loan and Security Holding
Millions of dollars
End of month
Wednesday
Type of holding and maturity
1998
Jan. 31
1 Total loans
2,035
26
40
382
27
90
2 Within fifteen days1
2,014
21
10
16
22
18
380
25
2
35
55
734
3
21
2
451,924
434314
437,179
435,824
436,953
431,903
451,924
428,843
34,147
95,648
137,886
95,028
40,906
48,308
19.254
98,686
132,130
95,028
40.907
48,308
14,953
99,878
138,105
95,028
40,907
48,308
20,312
93,324
138,437
94,136
41,306
48,308
21,566
92,750
138,887
94,136
41,306
48,308
17,366
97,369
137,454
92,328
40,292
47,094
34,147
95,648
137,886
95,028
40,906
48,308
9,133
104,808
131,151
94,136
41,306
48,308
3,337
1,432
2,901
2,041
1,445
1,547
3337
1,953
2.652
60
192
153
255
25
747
60
192
153
255
25
2,216
90
162
153
255
25
1,356
90
162
153
255
25
770
94
150
151
255
25
862
10
197
198
255
25
2,652
60
192
153
255
25
1,278
94
150
151
255
25
3. Sixteen days to ninety days
4 Total U.S. Treasury securities2
1
5
6
7
8
9
10
11
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
Total federal agency obligations
12
13
14
15
16
17
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.
2. Includes compensation that adjusts for the effects of inflation on the principal of
inflation-indexed securities.
A12
1.20
Domestic Financial Statistics • April 1998
AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1
Billions of dollars, averages of daily figures
1994
Dec.
1995
Dec.
1996
Dec.
1997
Dec.
July
Total reserves3
Nonborrowed reserves4
Nonborrowed reserves plus extended credit5
Required reserves
Monetary base6
Dec.
Sept.
Seasonally adjusted
ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS'
1
2
3
4
5
Aug.
59.40
59.20
59.20
58.24
418.18'
56.39
56.13
56.13
55.11
434.23'
50.06
49.91
49.91
48.64
452.47'
47.20
46.87
46.87
45.51
480.58'
47.11
46.74
46.74
45.83
461.72'
46.89
46.48
46.48
45.68
464.46'
47.41
46.82
46.82
46.16
467.02'
46.67
46.23
46.23
45.37
469.68'
46.45
46.18
46.18
45.06
472.35'
46.87
46.71
46.71
45.25
476.64'
47.20
46.87
46,87
45.51
480.58'
46.37
46.16
46.16
44.59
482.92
Nol seasonally adjusted
6
7
8
9
10
Total reserves7
Nonborrowed reserves
Nonborrowed reserves plus extended credit''
Required reserves8
Monetary base9
61.13
60.92
60.92
59.96
422.51
58.02
57.76
57.76
56.74
439.03
51.52
51.37
51.37
50.10
456.72
48.56
48.23
48.23
46.87
485.47'
46.93
46.56
46.56
45.65
461.81
46.76
46.35
46.35
45.56
465.55
47.09
46.49
46.49
45.83
467.24
46.55
46.11
46.11
45.25
468.63
46.16
45.89
45.89
44.77
470.70'
47.05
46.90
46.90
45.44
476.94'
48.56
48.23
48.23
46.87
485.47'
47.50
47.29
47.29
45.72
484.43
61.34
61.13
61.13
60.17
427.25
1.17
.21
57.90
57.64
57.64
56.62
444.45
1.28
.26
51.24
51.09
51.09
49.82
463.49
1.42
.16
47.88
47.56
47.56
46.20
491.92'
1.68
.32
46.61
46.24
46.24
45.33
468.78
1.28
.37
46.38
45.97
45.97
45.18
472.58
1.20
.41
46.65
46.05
46.05
45.39
474.01
1.25
.60
46.06
45.62
45.62
44.76
475.32
1.30
.44
45.62
45.35
45.35
44.23
477.28'
1.40
.27
46.45
46.30
46.30
44.83
483.50'
1.62
.15
47.88
47.56
47.56
46.20
491.92'
1.68
.32
47.50
47.29
47.29
45.72
491.62
1.78
.21
N O T ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS
11
12
13
14
15
16
17
Total reserves"
Nonborrowed reserves
Nonborrowed reserves plus extended credit5
Required reserves
Monetary base12
Excess reserves1'
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 starting in 1959 and estimates or' the effect on required
reserves of changes in reserve requirements are available from the Money 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, breakadjusted required reserves (line 4) plus excess reserves (line 16).
4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally adjusted,
break-adjusted total reserves (line I) 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 short-term adjustment credit, the money market effect
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 what required reserves
would have been in past periods had current reserve requirements been in effect. Breakadjusted 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 regulatory 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 contemporaneous reserve requirements in February
1984, 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).
Monetary and Credit Aggregates A13
1.21
MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES'
Billions of dollars, averages of daily figures
1997'
1996
Dec.'
Dec.'
1998
1997
Dec.'
Oct.
Nov.
Dec.
Jan.
Seasonally adjusted
1
2
3
4
5
Measures
Ml
M2
M3
L
Deb!
6
7
8
9
Ml components
Currency3
Travelers checks4
Demand deposits
Other checkable deposits 6 ...
1,150.7
3,503.0
4,333.6
5,315.8
13,078.0
1,128.7
3,651.2
4,595.6
5,702.2
13,773.3
1,082.8
3,826.1
4,935.5
6,088.4
14,496.6
1,076.0
4,040 2
5,373.2
6,615.4
15,180.2
1,061.9
3,993.2
5,274.1
6,482.0
15,052.7
1,069.2
4,017.5
5,324.6
6,551.6
15,119.1
1,076.0
4,040.2
5,373.2
6,615.4
15,180.2
1,073.3
4,063.5
5,420.8
n.a.
n.a.
354.3
8.5
384.0
403.9
372.4
8.9
391.0
356.4
394.9
8.6
403.6
275.9
425.5
8.2
397.1
245.1
418.3
8.2
389.6
245.8
421.9
8.1
394.5
244.6
425.5
82
397.1
245.1
427.5
8.2
392.7
244.9
2,352.3
830.6
2,522.6
944.4
2,743.2
1,109.4
2,964.2
1,333.0
2,931.2
1,281.0
2,948.3
1,307.1
2,9642
1,333.0
2,990.2
1,357.3
Commercial banks
12 Savings deposits, including MMDAs.
13 Small time deposits
14 Large time deposits10' u
752.6
503.2
298.7
775.0
575.8
345.4
904.8
594.5
413.2
1,020.9
621.6
495.8
999.6
618.2
478.7
1.009.5
621.1
487.7
1.020.9
621.6
495.8
1,032.3
621.6
497.9
Thrift institutions
15 Savings deposits, including MMDAs
16 Small time deposits
17 Large time deposits10
397.3
314.2
64.7
359.7
357.2
74.2
366.9
354.3
78.0
376.5
343.6
85.2
375.1
346.2
83.6
374.9
143.5
84.4
376.5
343.6
85 2
378.5
344.8
87.3
Money market mutual funds
18 Retail
19 Institution-only
385.0
203.1
454.9
253.9
522.8
310.3
601.6
376.2
592.1
363.4
599.2
365.7
601.6
376.2
613.1
380.8
Repurchase agreements and Eurodollars
20 Repurchase agreements
21 Eurodollars'2
183.3
80.8
182.4
88.6
194.2
113.7
235.6
140.1
219.0
136.3
233.5
135.8
235.6
140.1
249.1
142.2
3,491.9
9,586.0
3,638.5
10,134.8
3,780.0
10,716.7
3,797.3
11,382.9
3,789.6
11.263.1
3,790.4
11,328.7
3.797.3
11.382.9
n.a.
n.a.
Nontransaction components
10 InM2 7
11 In M3 only8
Debt components
22 Federal debt
23 Nonfederal debt..
Not seasonally adjusted
24
25
26
27
28
Measures2
Ml
M2
M3
L
Debt
29
30
31
32
Ml components
Currency3
Travelers checks"
Demand deposits5
Other checkable deposits'. ..
1,174.4
3,523.4
4,353.2
5,344.6
13.079.9
1,152.4
3,672.0
4,615.2
5,732.7
13,773.9
1,104.9
3,845.4
4,953.4
6.116.5
14,496.0
1,097.5
4,059.1
5,390.3
6,641.1
15,179.3
1,058.2
3,980.9
5,267.2
6,470.8
15,016.2
1,074.3
4,019.9
5,330.5
6,562.7
15,099.9
1,097.5
4,059.1
5,390.3
6,641.1
15,179.3
1,078.6
4,065.4
5.424.6
357.5
8.1
400.3
408.6
376.2
8.5
407.2
360.5
397.9
8.3
419.9
278.8
429.0
7.9
412.9
247.6
417.3
8.2
422.4
8.0
399.8
244.2
429.0
7.9
412.9
247.6
426.4
7.9
396.2
248.2
2,349.0
829.7
2,519.6
943.2
2,740.5
1.108.0
2,961.6
1.331.2
2,922.7
1,286.2
2,945.5
1,310.6
2,961.6
1,331.2
2,986.7
1,359.3
Commercial banks
35 Savings deposits, including MMDAs. . .
36 Small time deposits
37 Large lime deposits'0' "
751.7
501.5
298.9
774.1
573.8
345.8
903.3
592.7
413.6
1,019.0
620.0
496.3
996.5
618.0
485.7
1,009.2
620.2
493.4
1,019.0
620.0
496.3
1.028.0
621.2
490.4
Thrift institutions
38 Savings deposits, including MMDAs. ..
39 Small time deposits9
40 Large time deposits10
396.8
313.2
64.8
359.2
355.9
74.3
366.4
353.2
78.1
375.8
342 7
85.3
374.0
346.1
374.8
343.1
85.3
375.8
342.7
85.3
376.9
344.6
86.0
Money market mutual funds
41 Retail
42 Institution-only
385.9
204.6
456.4
255.8
524.8
312.7
604.1
378.9
588.1
359.6
598.3
365.2
604.1
378.9
616.0
389.8
Repurchase agreements and Eurodollars
43 Repurchase agreements'2
44 Eurodollars'2
179.6
81.8
178.0
89.4
188.8
114.7
228.9
141.7
221.0
135.1
232.0
134.6
228.9
141.7
247.8
145.3
3,499.0
9,580.9
3,645.9
10,128.0
3.787.9
10.708.1
3,805.8
11,373.5
3,774.4
11,241.9
3,792.1
11,307.8
3,805.8
11.373.5
Nontransaction components
33 In M27
34 In M3 only8
Debt components
45 Federal debt
46 Nonfederal debt..
Footnotes appear on following page.
A14 Domestic Financial Statistics • April 1998
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 starting in 1959 are available from the Money and Reserves
Projections 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) savings deposits (including MMDAs), (2) small-denomination time
deposits (time deposits—including retail RPs—in amounts of less than $100,000), and (3)
balances in retail money market mutual funds (money funds with minimum initial investments of less than $50,000). Excludes individual retirement accounts (IRAs) and Keogh
balances at depository institutions and money market funds. Seasonally adjusted M2 is
calculated by summing savings deposits, small-denomination time deposits, and retail money
fund balances, each seasonally adjusted separately, and adding this result to seasonally
adjusted Ml.
M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more)
issued by all depository institutions, (2) balances in institutional money funds (money funds
with minimum initial investments of $50,000 or more), (3) RP liabilities (overnight and term)
issued by all depository institutions, and (4) Eurodollars (overnight and term) held by U.S.
residents at foreign branches of U.S. banks worldwide and at all banking offices in the United
Kingdom and Canada. Excludes amounts held by depository institutions, the U.S. government, money market funds, and foreign banks and official institutions. Seasonally adjusted
M3 is calculated by summing large time deposits, institutional money fund balances, RP
liabilities, and Eurodollars, each seasonally adjusted separately, and 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: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial
sectors—the federal sector (U.S. government, not including government-sponsored enterprises or federally related mortgage pools) and the nonfederal sectors (state and local
governments, households and nonprofit organizations, nonfinancial corporate and nonfarm
noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and
corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data,
which are derived from the Federal Reserve Board's flow of funds accounts, are breakadjusted (that is, discontinuities in the data have been smoothed into the series) and
month-averaged (that is, the data have been derived by averaging adjacent month-end levels).
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) savings deposits (including MMDAs), (2) small time deposits, and (3) retail
money fund balances.
8. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities
(overnight and term) issued by depository institutions, and (4) Eurodollars (overnight and
term) of U.S. addressees.
9. Small time deposits—including retail RPs—are those issued in amounts of less than
$100,000. All [RAs 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, the U.S. government, and foreign banks and official institutions.
12. Includes both overnight and term.
Commercial Banking Institutions—Assets and Liabilities A15
1.26
COMMERCIAL BANKS IN THE UNITED STATES
A. All commercial banks
Assets and Liabilities'
Billions of dollars
Monthly averages
Wednesday figures
1997'
July
Aug.
Sept.
Nov.
Dec.
Seasonally adjusted
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Assets
Bank credit
Securities in bank credit
U.S. government securities . ..
Other securities
Loans and leases in bank credit2
Commercial and industrial . ..
Real estate
Revolving home equity
Other
Consumer
Security1
Other loans and leases
Interbank loans
Cash assets4
Other assets5
16 Total assets6
17
18
19
20
21
22
23
24
25
26
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
27 Tola! liabilities
28 Residual (assets less liabilities)7.. .
3,803.5'
1,005.1'
706.3
298.7'
2.798.4
784.5
1.135.6
85.2
1.050.5
521.8
81.3
275.2
197.8
227.6'
252.7'
3,957.4
1,031.4
726.7
304.7
2,926.0
817.0
1,198.2
93.2
1,105.1
517.6
93.5
299.7
184.6
241.8
277.0
3,970.9
1,025.2
715.5
309.6
2,945.7
825.6
1,205.5
94.3
1,111.2
518.8
93.3
302.6
191.5
259.0
278.8
3,995.8
1.031.9
724.5
307.4
2,963.9
837.6
1,214.1
95.5
1,118.6
515.1
94.5
302.6
199.6
255.1
278.8
4,030.9
1.046.6
732.3
314.3
1,123.7
509.3
104.1
307.2
201.5
264.9
289.0
•M25.4'
4,603.9
4,6433
4,672.7
2,870.7
714.2
2.156.4
527.0
1,629.4
725.9
302.0
424.0
222.7
259.3'
3,005.2
690.1
2,315.0
597.5
1,717.5
730.3
266.1
464.1
216.6
269.6
3,029.8
697.2
2,332.6
603.1
1,729.5
744.9
277.8
467.1
210.5
273.2
3,045.8
683.0
2,362.9
618.4
1.744.5
767.2
285.5
481.7
212.0
261.2
4,078.6'
4021.6
4,2583
346.8'
382.3
384.9
386.5
4,076.8
1,081.4
746.1
335.3
2,995.4
846.8
1.130.3
509.3
97.5
314.1
206.4
274.9
298.9
4,111.3
1,101.9
752.2
349.7
3,009.4
857.0
1,227.6
98.3
1,129.3
508.6
96.9
319.3
214.3
263.8
301.7
4,158.9
1,118.8
762.2
356.6
3,040.0
865.3
1,230.5
98.8
1,131.6
505.2
117.2
321.9
201.4
262.7
303.8
4,148.6
1,120.2
764.9
355.4
3,028.4
864.2
1,229.5
98.5
1,130.9
505.0
109.0
320.7
209.6
265.5
304.3
4.146.5
1.118.5
758.3
360.2
3.028.0
862.9
1.228.1
98.6
1,129.5
505.1
110.6
321.3
200.5
252.4
298.5
4,172.3
1,123.7
761.1
362.6
3.048.6
867.3
1.232.0
98.8
1.133.2
505.7
120.6
323.0
202.7
270.0
306.3
4,162,4
1.110.2
760.3
349.9
3.052.2
865.1
1,230.0
99.1
1.130.9
506.6
129.2
321.4
197.2
264.7
306.4
4,729.6
4,800.1
4*342
4.869.8
4,871.1
4*11.0
4.894.6
4,874.1
3,061.0
682.5
2,378.5
617.1
1,761.4
806.6
293.8
512.8
193.0
277.3
3,107.1
692.5
2,414.6
636.3
1,778.3
826.3
304.3
522.0
193.7
287.3
3.117.3
687.6
2,429.8
646.2
t,783.6
829.9
311.5
518.4
203.5
299.1
3,119.9
677.1
2,442.8
645.6
1,797.2
840.8
296.8
544.0
219.2
310.0
3,121.1
669.5
2,451.6
647.0
1,804.6
831.5
301.2
530.3
234.7
310.9
3,111.6
667.2
2,444.4
642.7
1,801.7
831.9
299.2
532.7
313.8
3.127.5
693.7
2,433.8
643.6
1,790.2
846.0
293.0
553.0
213.6
314.8
3.111:4
679.9
2,431.5
647.1
1.784.4
855.3
294.7
560.6
217.7
302.6
4337.9
4,4144
4,449.9
4,489.8
4,498.1
4,469.8
4.501.8
4,487.0
391.7
385.7
384.3
380.0
373.0
371.2
392.8
387.1
4,155.4
1,108.1
754.8
353.3
3,047.3
862.7
1.232.8
98.8
1,133.9
510.9
115.8
325.2
210.9
275.0
304.4
4,150.1
1,107.0
754.7
352.3
3.043.1
861.6
4,164.3
1,134.9
512.6
107.2
328.3
223.4
275.6
304.9
4,148.3
1,108.2
751.2
357.0
3,040.2
859.3
1.232.7
98.8
1.134.0
511.8
110.5
325.8
215.4
274.8
299.3
4,151.9
1,099.8
752.5
347.3
3,052.2
862.7
1,230.0
99.1
1,130.9
511.1
127.3
321.0
199.2
262.9
43*73
4,881.2
4,9153
43653
3,135.9
694.3
2,441.6
641.1
1,800.4
824.6
292.1
532.5
221.1
309.1
3,124.5
700.3
1,780.5
854.6
291.6
5630
231.6
309.0
3,077.4
663.4
2,414.0
647.6
1,766.4
848.1
286.5
561.6
238.4
303.9
2,984.3
843.6
1,220.1
96.4
1,227.6
97.3
212.5
Not seasonally adjusted
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2 .. .
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security'
Other loans and leases
Interbank loans
Cash assets4
Other assets5
44 Total assets6
45
46
47
48
49
50
51
52
53
54
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
55 Total liabilities
7
56 Residual (assets less liabilities)
3,802.4r
996.7'
700.4
296.3'
2,805.7
782.3
1,137.6
85.1
1.052.5
527.4
80.6
277.8
207.6
237.7'
253.3'
3.953.3
1.028.9
722.7
306.1
2,924.5
818.2
1,198.3
93.2
1,105.1
515.2
92.0
300.7
182.3
238.2
279.1
3.972.1
1,030.3
718.2
312.1
4,445.0r
3,997.3
1,032.1
725.6
306.5
2,965.2
831.8
4,032.3
1,046.5
733.0
313.5
2,985.9
839.6
4,080.2
1,207.2
94.6
1,112.6
519.2
91.4
302.6
187.1
245.6
282.0
1,217.5
96.2
1,232.0
97.9
1.121.3
517.2
93.6
305.1
194.1
251.8
281.3
1223.5
97.0
1,126.5
509.4
103.9
309.6
196.3
265.9
285.9
1,134.2
509.7
99.5
314.6
211.0
282.9
297.4
4.106.2
1,083.7
746.9
336.9
3,022.4
853.4
1,233.0
98.5
1,134.6
513.4
98.4
324.3
223.6
281.9
301.8
4,596\2
4,629.8
4.667.6
4,723.9
4.814.7
4^56.4
2,874.5
725.6
2,148.9
525.7
1,623.2
720.4
296.2
424.1
233.1
256.7
2,996.5
683.8
2.312.7
593.2
1,719.5
744.7
274.9
469.8
212.9
268.0
3,019.7
684.7
2,335.0
602.2
1,732.8
749.7
282.6
467.2
206.2
272.3
3,046.0
681.5
2,364.5
613.7
1,750.8
770.5
286.8
483.6
204.3
261.6
3,068.6
680.4
3,125.0
702.0
2.423.0
640.8
3,122.6
687.9
1.782.2
813.3
297.6
515.7
188.3
291.4
3,147.6
719.2
2.428.4
644.4
1,784.0
820.1
305.3
514.7
200.0
294.3
1.790.5
835.3
290.3
545.0
230.9
306.6
3,149.4
700.1
2,449.4
642.0
1.807.4
816.6
294.1
522.5
237.5
304.5
4,084.7'
4,222.1
4,248.0
4J823
43343
4,417.9
4.46Z0
4,4953
4.508.0
4^90.7
4.519.7
4,467.9
393.8
389.3
390.5
395.6
397.9
2,941.8
821.4
2,388.2
624.5
1.763.7
796.7
286.1
510.6
193.6
275.9
1,079.9
746.6
333.3
3,000.4
844.6
2.434.7
644.2
1,233.5
98.6
1,112.0
754.8
357.2
3,052.3
864.2
1,233.7
98.8
1,134.9
510.9
118.0
325.5
210.0
293.8
303.7
2,424.2
643.7
360.3'
374.1
381.9
385.3
389.1
396.7
394.4
89.1'
84.6
86.5
78.7
78.0
83.3
82.2
92.2
93.5
94.6
94.7
87.0
85.4'
87.9
89.6
81.8
81.4
85.5
85.8
95.4
97.3
97.5
97.6
90.2
MEMO
57 Revaluation gains on off-balance-sheet
items8
58 Revaluation losses on off-balancesheet items8
Footnotes appear on p. A21.
A16
1.26
Domestic Financial Statistics • April 1998
COMMERCIAL BANKS IN THE UNITED STATES
B. Domestically chartered commercial banks
Assets and Liabilities'—Continued
Billions of dollars
Monthly averages
Wednesday figures
1997'
July
Aug.
Sept.
1998
Oct.
Jan. 7
Nov
Jan. 21
Jan. 28
Seasonally adjusted
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Assets
Bank credit
Securities in bank credit
U.S. government securities .
Other securities
Loans and leases in bank credit-.
Commercial and industrial .
Real estate
Revolving home equity ..
Other
Consumer
Security3
Other loans and leases
Interbank loans
Cash assets4
Other assets5
16 Total assets6
17
18
19
20
21
22
23
24
25
26
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
27 Total liabilities
28 Residual (assets less liabilities)7.
3,571.1
920.4
681.6
238.8
2,650.7
636.1
1,201.0
98.6
1,102.3
505.1
57.9
250.6
174.1
219.9
254.4
3.593.2
924.6
684.5
240.2
2,668.6
639.6
1,205.2
98.8
1,106.4
505.7
65.9
252.2
178.8
236.6
261.0
3.584.4
913.3
678.8
234.5
2,671.1
640.3
1,203.0
99.1
1.103.8
506.6
70.7
250.5
173.5
231.5
259.5
1,200.6
97.3
3,551.5
902.0
668.0
234.0
2,649.5
633.0
1,201.1
98.3
1,103.3
509.3
56.4
248.5
183.3
238.7
254.0
1,102.8
508.6
52.5
254.2
183.8
229.1
259.7
1,203.4
98.8
1,104.6
505.2
62.6
251.4
174.1
229.8
259.7
3,570.3
917.5
681.1
236.4
2,652.8
637.9
1,202.4
98.5
1.103.9
505.0
55.7
251.7
173.0
232.7
263.3
4,089.7
4,144.1
4,167.3
4,187.9
4,182.6
4,162.9
4.213.2
4,192.5
2,780.3
672.2
2,108.1
366.1
1,742.0
623.9
249.6
374.2
84.7
167.0
2,800.1
672.1
2,128.0
369.0
1,759.0
644.8
256.1
388.6
74.4
183.9
2.835.0
681.8
2.153.2
377.3
1,775.8
661.3
273.8
387.5
74.3
190.3
2,839.4
677.0
2.162.4
381.2
1,781.1
672.6
283.8
388.7
77.7
200.6
2,843.9
666.3
2,177.6
382.9
1.794.7
681.7
271.6
410.0
84.1
212.0
2,845.2
658.4
2,186.8
384.6
1,802.1
678.0
278.5
399.6
87.1
211.3
2,837.1
656.2
2,180.9
381.7
1,799.2
672.3
274.8
397.5
80.7
212.7
2,853.7
683.1
2,170.6
382.9
1.787.7
689.5
266.0
423.5
81.5
216.1
2,832.9
669.1
2.163.8
381.8
1,781.9
690.3
270.0
420.4
88.3
208.8
3,630.9
3,655.9
3,703.2
3,761.0
3,790.2
3,821.6
3,821.7
3,802.8
3,840.9
3,820.3
384.9
384.0
386.5
383.1
377.1
366.3
360.9
360.1
372.4
372.2
3.581.0
913.4
673.2
240.2
2,667.6
636.4
1,205.8
98.8
1,106.9
510.9
61.2
253.3
183.6
241.7
261.2
3,576.8
912.1
672.5
239.6
2,664.7
635.2
1,206.4
98.6
1.107.7
512.6
53.9
256.7
186.8
242.4
264.2
3,577.0
915.3
673.3
242.0
2,661.6
632.7
1,205.6
98.8
1.106.8
511.8
57.8
253.8
189.0
241.6
256.4
3.590.5
918.9
676.3
242.6
1,206.9
98.8
1.108.0
510.9
63.4
253.5
186.1
260.0
260.2
3,576.0
905.6
669.0
236.6
2,670.4
638.1
1.203.1
99.1
1.104.0
511.1
68.8
249.2
175.4
229.4
262.1
3,287.6
834.8'
625.3
209.5'
2.452.8
570.1
1,103.8
85.2
1,018.6
521.8
43.2
213.8
175.1
196.5'
214.6'
3,421.2
851.2
636.4
214.9
2,569.9
598.9
1,169.7
93.2
1,076.6
517.6
50.0
233.7
166.0
208.2
234.5
3,438.3
847.3
629.8
217.5
2,591.0
605.9
1,177.1
94.3
1,082.9
518.8
51.0
238.2
173.5
224.6
236.2
3,458.4
849.5
636.7
212.8
2,608.9
615.4
1,186.3
95.5
1,090.7
515.1
51.5
240.6
181.7
219.5
236.8
3,487.0
865.3
645.9
219.4
2,621.7
620.1
1,192.4
96.4
1,096.0
509.3
57.7
242.1
181.5
230.1
247.6
3,524.7
885.6
660.0
225.6
2,639.1
624.2
3,817.9r
3,973.3
4,015.9
4,040.0
2,645.0
703.9
1,941.1
313.9
1,627.2
595.4
273.8
321.6
72.1
169.0'
2,740.6
679.5
2,766.4
686.0
2,061.1
346.2
1.714.9
595.2
235.9
359.4
85.6
174.3
2,080.4
353.4
1.727.0
607.4
246.6
360.8
79.8
177.3
3,481.4r
3,595.8
336.4'
377.5
3,580.9
919.3
681.7
237.6
2,661.6
639.0
Not seasonally adjusted
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security3
Other loans and leases
Interbank loans
Cash assets4
Other assets5
44 Total assets6
45
46
47
48
49
50
51
52
53
54
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
55 Total liabilities
56 Residual (assets less liabilities)7
3,289.0'
830.1
618.3
211.7'
2,458.9
567.9
1,105.8
85.1
1.020.6
527.4
42.5
215.3
184.9
206.2'
215.9'
3,416.6
849.7
635.0
214.7
2.566.9
599.0
1,169.9
93.2
1,076.7
515.2
48.5
234.2
163.8
204.4
237.3
3,435.5
848.9
630.9
218.0
2,586.7
601.5
1,178.8
94.6
1,084.2
519.2
49.1
238.0
169.1
211.3
238.6
3,462.0
851.4
638.9
212.5
2,610.5
611.1
1,189.5
96.2
1,093.3
517.2
50.6
242.1
176.1
217.1
238.9
3,489.9
865.3
647.4
217.9
2,624.6
617.3
1,195.6
97.0
1,098.6
509.4
57.5
244.7
176.3
230.8
244.8
3,529.1
884.8
660.9
223.8
1,204.7
97.9
1,106.8
509.7
58.4
249.4
187.9
246.4
252.2
3,551.6
891.8
665.2
226.6
2,659.9
628.9
1.206.4
98.5
1,107.9
513.4
54.0
257.2
193.0
245.8
258.9
3,840.3r
3,965.6
3,997.7
4,037.4
4,085.5
4,159.0
4,192.6
4,211.2
4,213.7
4,207.d
4,240.6
4,186.7
2,648.7
715.3
1,933.4
312.4
1.621.0
593.0
267.0
326.0
73.8
167.2'
2,734.9
673.2
2,061.7
344.8
1,716.9
600.8
242.9
357.9
83.2
174.8
2,758.5
673.8
2,084.7
354.4
1,730.3
607.1
250.9
356.2
77.4
175.9
2,781.4
670.2
2,111.2
362.8
1,748.3
626.2
251.9
374.4
80.1
167.7
2,799.8
670.0
2,129.9
368.6
1,761.3
639.7
251.6
388.0
76.0
184.5
2.849.3
691.3
2.158.0
378.2
1.779.7
653.5
267.1
386.4
70.6
193.7
2,866.6
708.0
2,158.6
377.1
1,781.6
664.8
277.2
387.7
73.8
197.3
2,846.4
677.0
2,169.4
381.3
1,788.0
679.6
264.2
415.5
86.1
209.6
2,874.1
688.8
2,185.3
380.3
1,805.0
664.7
269.6
395.1
81.8
207.2
2,861.1
683.3
2,177.8
379.8
1,798.0
667.9
265.2
402.6
81.5
210.3
2.849.5
689.8
2,159.8
381.8
1.778.0
700.1
265.1
435.1
87.5
212.2
2,798.1
652.7
2,145.4
381.4
1,764.0
691.0
261.3
429.7
96.5
209.0
3,482.6'
3,593.7
3,618.9
3,655.5
3,700.1
3,767.1
3,802.5
3,821.7
3,827.8
3,820.7
3,849.4
3,794.6
357.7'
372.0
378.8
381.9
385.4
391.8
390.1
389.5
385.9
386.9
391.3
392.1
47.5
44.3
45.1
41.5
41.3
50.1
49.6
51.4
44.0
244.3
45.9
254.7
46.5
256.4
40.0
259.3
41.3
265.0
43.6
273.8
44.2
279.1
52.9
287.5
52.6
285.5
54.0
287.2
55.9
286.5
49.6
288.9
2.644.3
622,2
2.671.6
636.9
MEMO
57 Revaluation gains on off-balance-sheet
items8
58 Revaluation losses on off-balancesheet items8
59 Mortgage-backed securities9
Footnotes appear on p. A21.
Commercial Banking Institutions—Assets and Liabilities A17
1.26
COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities'—Continued
C. Large domestically chartered commercial banks
Billions of dollars
Monthly averages
Account
1997'
1997
Jan.1
Wednesday figures
July
Aug.
Sept.
1998
Oct.
Nov.
Dec.
1998
Jan.
Jan. 7
Jan. 14
Jan 21
Jan. 28
Seasonally ad|usted
Assets
1 Bank credit
2
Securities in bank credit
3
U.S. government securities
4
Trading account
5
Investment account
6
Other securities
7
Trading account
8
Investment account
9
State and local government. .
10
Other
11
Loans and leases in bank credit3
12
Commercial and industrial
13
Bankers acceptances
14
Other
15
Real estate
16
Revolving home equity
17
Other
18
Consumer
19
Security'
20
Federal funds sold to and
repurchase agreements
with broker-dealers
21
Other
22
State and local government
23
Agricultural
24
Federal funds sold to and
repurchase agreements
with others
25
All other loans
26
Lease-financing receivables
^7 Interbank loans
28
Federal funds sold to and
repurchase agreements with
commercial banks
">9 Other
30 Cash assets4
! 1 Other assets'
32 Total assets'
33
34
35
36
37
38
39
41)
41
42
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the US
From others
Net due to related foreign offices
Other liabilities
43 Total liabilities
44 Residual (assets less liabilities)7
Footnotes appear on p. A21.
1,965.2
440.0
310.6
17.3
293.3
129.4
64.6
64.8
20.7
44.1
1,525.2
402.8
2.0
400.9
625.0
60.6
564.3
306.0
38.8
2.036.0
446.4
314.5
23.7
290.8
132.0
64.2
67.8
22.3
45.4
1,589.6
421.8
1.6
420.2
646.3
65.5
580.8
307.1
45.5
2.038.6
441.7
306.7
20.6
286.0
135.0
63.7
71.4
22.4
48.9
1,596.9
426.7
1.5
425.1
646.8
66.1
580.7
304.9
46.3
2.049.9
444.4
313.5
23.3
290.2
130.9
59.6
71.3
22.3
49.0
1,605.5
434.4
1.5
432.9
648.4
67.1
581.4
302.7
46.6
2,075.0
460.3
323.1
25.2
297 9
137.2
65.4
71.8
22.4
49.4
1,614.7
438.3
1.3
437.0
649.2
67.6
581.6
299.5
52.5
2.096.0
477.7
336.4
26.5
310.0
141.3
68.8
72.5
22.2
50.3
1,618.3
439.9
1.3
438.7
649.8
68.0
581.7
297.0
51.3
2.111.8
491.8
343.2
29.4
313.9
148.6
72.2
76.5
22.1
54.4
1,620.0
446.9
1.3
445.6
646.1
68.8
577.3
2944
47.3
2.139.3
510.9
358.8
29.6
329.2
152.0
74.3
111
22.5
55.2
1,628.4
451.5
12
4503
644.5
69.2
575.3
293.2
57.5
2,128.6
505.3
354.8
31.5
323.2
150.6
71.9
78.6
22.5
56.1
1,623.3
451.5
1.3
450.1
645.5
69.0
576.5
292 8
50.7
2,130.2
510.5
!57.3
29.1
328.2
153.2
76.1
77.1
22.5
54.6
1,619.7
449.6
1.2
449.5
642.7
69.1
573.7
293.1
52.9
2,152.0
518.3
363.5
31.3
332.3
154.7
77.5
77.2
22.4
54.9
1.633.7
451.9
1.1
451.8
645.8
69.2
576.6
293.3
60.8
2.142.0
506.7
357.7
27.2
330.5
149.0
71.7
77.4
22.4
54.9
1,635.3
451.9
1.2
451.8
643.1
69.5
573.6
294.6
65.5
22.8
16.0
11.7
9.0
28.6
16.9
11 ^
9f>
30.0
16.3
11.3
9.1
29.7
16.9
11.3
9.2
35.4
17.1
11.2
9.3
35.1
16.2
III
9.6
31.1
16.3
11.1
9.6
41.2
16.3
11.0
9.3
35.0
15.7
11.3
9.3
35.4
17.4
111
9.3
44.9
15.9
11.0
9.4
48.7
16.8
10.8
94
6.3
61.5
M.I
129.3
7.5
66.6
74.6
116.4
6.4
69.2
76.3
122.3
6.6
68.9
77.3
128.8
9.0
67.5
78.2
125.3
10.8
69.5
79.3
127.9
12.4
70.9
81.2
125.5
7.5
70.8
83.0
116.2
9.6
70.0
82.6
116.7
9.0
69.2
82.7
117.0
6.5
72.2
83.0
120.6
6.0
70.7
83.5
114.9
81.5
47.8
135.6
167.9
70.4
46.0
140.4
173.1
74.7
47.6
153.4
172.8
81.5
47.3
147.9
175.4
78.7
46.6
160.2
183.8
82.1
45.8
166.3
187.3
81.4
44.1
158.1
194.7
74.4
41.8
159.5
195.3
72.6
44.1
164.1
200.4
75.2
419
152.1
191.2
80.3
40.2
162.4
195.3
74.5
40.4
161.1
194.0
2,360.8
2,428.7
2,450.1
2.465.4
2,507.6
2,540.8
2,553.5
2,573.8
2373.0
2^53.9
2394.0
2375.6
1,481.7
410.7
1,071.0
164.5
906.5
444.8
187.3
257.5
68.1
145.8
1,502.0
380.7
1,121.3
186.1
935.2
441.6
158.7
282.9
80.8
148.5
1,516.2
384.9
1.131.3
191.7
939.6
450.7
168.7
282.0
75.3
150.2
1,524.2
373.4
1,150.8
201.9
948.9
468.1
175.5
292.6
79.9
139.0
1.533.1
374.5
1.158.6
203.3
955.3
490.8
182.6
308.2
69.2
156.2
1,553.2
380.6
1,172.6
209.7
963.0
506.1
200.7
305.4
69.3
161.9
1.556.0
379.0
1.177.0
211.7
965.4
514.1
209.7
304.4
73.4
171.7
1,550.1
371.0
1,179.1
212.0
967.1
525.3
199.8
325.5
79.8
184.4
1,556.9
368.3
1,188.6
213.5
975.1
523.1
207.3
315.8
82.5
183.6
1,546.8
365.2
1,181.6
210.3
971.3
518.3
203.1
315.3
76.4
185.4
1.556.8
383.2
1,173.7
212.2
961.5
532.0
194.2
337.8
77.4
188.5
1,536.2
368.8
1.167.4
211.6
955.8
531.9
197.3
334.5
84.4
181.2
2,1403
2.172.8
2,1923
2^112
22492
2.290.5
2315.2
2339.6
2346.0
2326.9
2354.7
2333.7
220.5
255.9
257.8
254.1
258.4
250.3
238.3
234.2
227.0
227.0
239.3
241.9
A18
1.26
Domestic Financial Statistics • April 1998
COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities'—Continued
C. Large domestically chartered commercial banks—Continued
Wednesd iy figures
Monthly averages
Account
1997
Jan.r
1997'
July
Aug.
Sept.
1998
Oct.
Nov.
Dec.
1998
Jan.
Jan. 7
Jan. 14
Jan. 21
Jan. 28
Not seasonally adjusted
Assets
45 Bank credit
46
Securities in bank credit
47
U.S. government securities
48
Trading account
49
Investment account
50
Mortgage-backed securities.
51
Other
52
One year or less
53
Between one and five years
54
More than five years . . . .
55
Other securities
56
Trading account
57
Investment account
58
State and local government ..
59
Other
60
Loans and leases in bank credit61
Commercial and industrial
62
Bankers acceptances
63
Other
64
Real estate
65
Revolving home equity
66
Other
67
Commercial
68
Consumer
69
Security-1.
. ..
70
Federal funds sold to and
repurchase agreements
with broker-dealers
71
Other
72
State and local government
73
Agricultural
74
Federal funds sold to and
repurchase agreements
with others
75
All other loans
76
Lease-financing receivables
77 Interbank loans
78
Federal funds sold to and
repurchase agreements
with commercial banks
79
Other
80 Cash assets4
81 Other assets5
82 Total assets6
83
84
85
86
87
88
89
90
91
92
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the US
From nonbanks in the U.S
Net due to related foreign offices . . . .
Other liabilities
93 Total liabilities
94 Residual (assets less liabilities)7
95
96
97
98
99
100
101
MEMO
Revaluation gains on off-balancesheet items8
Revaluation losses on off-balancesheet items8
Mortgage-backed securities9
Pass-through securities
CMOs, REMICs, and other
mortgage-backed securities. ..
Net unrealized gains (losses) on
available-for-sale securities 10 . . .
Offshore credit to U.S. residents" . .
Footnotes appear on p. A21.
1,968.5
436.7
304.9
16.4
288.5
185.1
103.4
28.5
60.6
14.2
131.8
66.5
65.3
20.7
44.6
1.531.8
400.6
1.9
398.8
627.4
60.7
349.4
217.3
310.6
38.0
2,030.9
445.7
314.0
22.6
291.4
191.0
100.4
26.8
52.4
21.2
131.7
64.9
66.9
21.9
44.9
1,585.2
421.9
1.5
420.4
646.1
65.5
360.3
220.3
304.9
44.1
2,036.1
445.0
309.4
21.3
288.1
190.0
98.1
26.8
49 9
21.4
135.7
64.8
70.9
22.2
48.7
1,591.1
423.4
1.5
421.9
647.3
66.3
361.1
219.8
305.4
44.5
2,049.6
445.9
315.2
23.4
291.8
191.8
100.0
27.6
49.8
22.7
130.7
59.4
71.3
22.3
49.0
1,603.6
431.1
1.5
429.6
649.4
67.4
360.8
221.2
304.1
45.8
2,075.2
461.2
325.5
26.1
299.5
197.4
102.1
26.3
52.7
23.1
135.7
63.3
72.3
22.4
50.0
1,614.0
436.2
1.4
434.8
650.0
68.0
359.1
223.0
299.0
52.4
2,098.8
478.4
339.0
28.0
311.0
205.9
105.1
28.9
53.5
22.7
139.4
65.9
73.5
22.3
512
1,620.3
438.6
1.4
437.3
651.6
68.4
359.1
224.0
296.7
53.0
2,109.1
482.0
340.8
26.9
313.9
210.7
103.2
27.5
53.2
22.5
141.2
63.9
77.2
22.2
55 1
1,627.1
443.4
1.3
442.0
649.2
68.8
356.3
224.0
298.4
48.5
2,141.5
506.4
351.5
28.2
323.3
218.5
104.8
26.4
52.2
26.2
154.9
76.6
78.3
22.5
55.8
1,635.1
449.0
1.2
447.8
647.2
69.3
356.0
221.9
298.0
56.0
2,134.5
501.7
347.6
27.9
319.6
216.6
103.0
24.7
52.6
25.7
154.1
74.9
79.3
22.5
56.7
1.632.8
448.3
1.3
447.0
649.0
69.1
358.3
221.6
299.6
48.4
2,136.3
506.3
349.8
27.9
321.8
218.2
103.6
25.2
52.6
25.8
156.6
78.7
77.9
22.5
55.4
1,630.0
446.1
1.2
444.9
647.4
69.2
356.6
221.5
298.9
52.5
2,151.8
513.3
355.9
31.3
324.6
217.6
107.0
28.0
53.5
25.5
157.4
79.5
77 9
22.4
55.4
1,638.5
449.2
1.1
448.1
648.0
69.3
356.5
222.2
297.8
58.2
2,138.4
500.8
349.5
25.8
323.7
220.4
103.3
26.7
49.5
27.1
151.2
73.4
77.8
22.5
55.3
1,637.7
449.9
1.2
448.7
644.1
69.5
352.6
222.0
298.1
63.8
21.9
16.0
11.5
9.0
27.9
16.2
11.2
9.3
28.5
16.0
11.3
9.3
29.3
16.5
11.4
9.4
35.5
16.9
11.3
9.4
36.5
16.5
11.1
9.5
31.3
17.3
11.1
9.5
39.5
16.4
10.9
9.3
33.2
15.2
11.1
9.4
34.7
17.8
11.0
9.3
42.3
15.9
10.8
9.2
46.7
17.2
10.6
9.2
64
63.3
65.1
137.8
7.7
66.0
74.1
116.7
6.3
68.1
75.4
118.9
7.3
68.5
76.6
125.0
8.8
68.6
78.2
119.9
8.7
71.7
79.3
127.6
11.0
74.6
81.4
131.4
7.6
72.8
84.3
124.5
9.5
73.4
84.1
124.2
9.0
72.0
84.1
129.0
6.4
74.4
84.4
128.9
6.2
71.1
84.6
121.0
86.4
51.4
143 2
168.2
69.7
47.0
137.1
176.0
71.6
47.3
142.5
175.2
78.4
46.7
147.1
177.1
73.5
46.4
159.7
181.4
82.3
45.3
171.2
184.9
85.1
46.4
171.0
193.2
79.5
45.0
169.3
195.7
76.9
47.4
168.6
198.9
83.4
45.5
170.3
192.7
84.8
44.1
182.8
194.6
78.0
429
16U8
196.1
2J80.7
2,423.7
2,435.6
2,461.8
2,499.6
2345.6
2368.0
2^943
2^89*
2391.9
2,621.8
2380.0
1.487.9
418.3
1,069.6
164.4
905.2
440.7
180.7
259.9
69.8
143.8
1,499.7
376.6
1,123.1
185.5
937.6
447.2
164.2
282.9
78.4
148.8
1,510.9
375.9
1,135.0
192.9
942.1
451.9
173.0
278.9
72.9
148.6
1,523.1
372.2
1,150.9
199.0
951.9
471.2
177.1
294 1
75.3
139.9
1.530.5
371.9
1,158.6
202.5
956.1
485.6
178.8
306.9
70.8
156.8
1,559.8
386.7
1,173.0
210.1
962.9
500.0
195.8
3042
65.6
165.4
1,570.2
399.4
1,170.8
208.5
962.3
506.9
203.7
3032
69.5
169.0
1,555.8
378.4
1,177.4
211.9
965.5
521.6
192.7
328.9
81.8
181.8
1,572.7
383.9
1,188.8
211.2
977.6
510.1
198.8
311.2
77.1
179.4
1,568.3
384.8
1,183.6
210.4
973.2
511.0
194.3
316.7
77.2
182.8
1,560.2
389.2
1,171.0
212.7
958.3
538.4
191.8
346.6
83.4
184.4
1,520.9
360.7
1,160.2
212.0
948.2
530.8
189.3
341.4
92.6
180.9
2,142.1
2,173.9
2.184J
2^43.7
2^90.8
2315.6
234O.9
2339.4
23393
2366.2
2325.1
238.6
249.8
251.2
254.8
252.4
253.6
250.4
252.6
255.5
254.9
252.3
255.8
47.5
44.3
45.1
37.5
38.2
41.5
41.3
50.1
49.6
51.4
53.4
46.7
44.0
207.0
139.5
45.9
209.0
144.4
46.5
208.2
143.1
40.0
210.0
144.6
41.3
215.7
149.3
43.6
224.1
154.2
44.2
228.9
157.2
52.9
237.1
162.0
52.6
234.8
159.8
54.0
236.6
161.3
55.9
236.3
161.6
49.6
238.9
164.3
67.5
64.6
65.1
65.4
66.4
70.0
71.7
75.1
75.0
75.4
74.7
74.6
2.0
30.9
2.5
33.7
3.0
34.0
2.5
34.1
2.5
34.2
2.4
34.4
2.2
34.2
3.0
35.5
2.6
35.5
2.6
35.6
3.3
35.1
3.2
34.7
Commercial Banking Institutions—Assets and Liabilities
1.26
COMMERCIAL BANKS IN THE UNITED STATES
A19
Assets and Liabilities'—Continued
D. Small domestically chartered commercial banks
Billions of dollars
Monthly averages
Wednesday figures
1998
Jan. r
July
Aug.
Sept.
Oct.
Jan. 7
Jan. 14
Jan. 21
Jan. 2:
1,441.7
412.2
1,440.9
409.9
324.3
85.6
1.031.1
186.5
558.2
29.6
528.7
1.441.2
406.4
1,442.4
406.6
320.9
85.4
1,034.8
85.5
1.035.8
212.0
212.4
5.2
Seasonally adjusted
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Assets
Bank credit
Securities in bank credit . .
U.S. governmeni securities
Other securities
Loans and leases in bank credit2.
Commercial and industrial .
Real estate
Revolving home equity. .
Other
Consumer
Security-'
Other loans and leases. . . .
Interbank loans
Cash assets4
Other assets5
16 Total assets 6
Liabilities
17 Deposits
18 Transaction
19
Nontransaction
20
Large time
21
1,322.4
394.8
314.7
80.1
927 5
167 3
478.8
24.5
454.3
215.8
4.4
61.2
45.8
60.9
46.7
1.385.2
404.8
321.9
82 9
9804
1.399.7
405.6
323.1
82.5
994.1
1.408.5
405 I
323.2
81.9
1.412.0
405.0
322.8
1 003.4
177.1
179.3
530.3
181.0
537.8
28.4
509.4
212.3
l.(X)6.9
181.8
543.3
28.8
514.4
209.8
5.2
61.4
65.9
51.1
71.2
63.4
1,457.0
1,544.5
1.163.3
28 Residual (assets less liabilities) 7 .
29.3
521.6
212.3
5.1
1.439.6
410.1
324.7
85.4
1,029.5
186.1
555.1
29.6
525.5
214.2
5.2
1,441.6
408.4
322.9
85.5
1,033.2
187.4
558.9
29.7
529.3
212.0
5.1
69.0
69.7
58.3
57.9
70.3
1,609.0
1,619.3
1,616.9
1,293.8
295.3
998.5
170.9
827.7
156.3
71:8
84.5
4.2
27.6
1,288.3
290.2
998.2
171.1
827.1
155.0
71.2
83.8
4.7
27.7
1,290.3
291.0
999.3
171.4
827.9
154.0
71.7
82.3
4.3
27.4
1,296.9
299.9
997.0
170.7
826.3
157.5
71.7
85.8
4.1
Til
1.296.7
300.3
996.4
170.3
826.1
158.5
28.5
1.283.4
298.1
985.3
169.6
815.8
158.5
74.2
84.4
4.3
28.9
1,454.0
1470.4
1,475.0
1.482.0
1,475.7
1,475.9
1486.2
1486.7
128.1
132.8
138.8
132.1
133.9
133.1
133.1
130.3
1,442.3
410.4
324.9
85.5
1,031.9
186.8
557.4
29.5
527.9
213.0
5.5
69.2
62.6
73.7
65.3
1,440.6
409.0
323.5
85.5
1.031.6
186.6
558.2
29.5
528.7
212.9
5.3
68.6
60.0
71.2
63.7
1,438.7
1,437.6
405.6
320.4
404.9
74.8
65.7
1,439.5
407.0
321.7
85.3
1,032.5
187.4
558.5
29.6
529.0
212.8
5.3
68.4
59.2
72.4
65.5
1,624.6
1,616.7
1,623.9
168.1
816.8
153.5
71.3
82.2
50
28.3
1,296.4
308.6
987.8
168.6
819.2
157.9
73.5
84.4
4.3
28.3
1,290.7
298.7
992.0
169.4
822.6
158.1
71.5
86.6
4.2
27.8
14763
1.486.9
137.7
1,603.2
1,613.8
1,250.2
301.1
949.1
161.7
787.4
156.8
78.0
78.8
4.5
27.1
1.256.1
298.8
957.3
1,267.1
297.6
969.4
165.7
803.7
154.0
73.5
1.281.8
301.3
980.5
64.1
4.0
23.2
1.238.7
298.8
939.8
160.1
779.7
153.7
77.2
76.5
4.8
25.8
1341.1
1,422.9
1,438.6
1,444.7
115.9
121.6
127.2
129.9
164.2
74.1
188.4
559.9
29.7
530.2
212.1
5.2
70.3
58.6
70.4
1.609.6
1,5811
793.1
155.7
29.7
529.8
64.4
1,574.6
150.6
86.6
187.7
559.4
321.1
1,614.1
63.7
1,565.7
67.7
85.8
1,029.5
186.5
556.9
29.6
527.4
212.2
5.0
68.9
56.3
68.6
63.0
56.2
69.9
49.7
326.4
5.0
69.3
57.1
67.8
63.2
71.6
61.4
149.4
720.7
27 Total liabilities
4.9
67.3
323.5
84.4
1.020.8
184.3
550.9
52.8
870.1
Other
28.1
502.2
213.8
4.7
407 9
68.2
55.4
72.4
66.7
293.2
22 Borrowings
23
From banks in the U.S
24
From others
25 Net due to related foreign offices .
26 Other liabilities
523.4
27.7
495.7
210.5
4.6
64.9
R2.2
1,428.7
66.9
81.6
4.8
28.1
167.7
812.9
155.2
73.1
82.1
5.0
71.0
65.0
70.1
58.3
74.2
65.7
65.6
72.6
85.8
3.9
27.6
Not seasonally adjusted
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
Assets
Bank credit
Securities in bank credit
U.S. government securities .
Other securities
Loans and leases m bank credit2
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security'
Other loans and leases. . . .
Interbank loans
Cash assets4
Other assets5
44 Total assets"
45
46
47
48
49
50
51
52
53
54
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices .
Other liabilities
55 Total liabilities
7
56 Residual (assets less liabilities) . .
1.320.5
393.4
313.5
79.9
927 I
167.3
478.4
24 4
454.0
216.8
4.6
60.0
47.1
63.1
47 7
1.385.6
404.0
321.1
82.9
981.6
n I
523.8
27 7
496.1
210.3
4.4
660
47.1
67 3
61.3
1,399.4
403.8
321.5
82.3
1.414.7
404.1
321.8
82.2
1.010.7
68.8
63.4
1.412.4
405.5
323.7
81.8
1.006.9
180.0
540.1
28.8
511.3
213.1
4.8
68.9
51.1
70.0
61.9
1459.6
1.541.9
1,562.2
1,575.6
1,585.9
1,160.8
297.0
863.8
148.0
715.8
152.3
1,247.6
297.9
949.7
161.4
863
66,0
4.0
23 4
1,235.3
296.6
938.6
159.2
779.4
153.7
78.7
74.9
4.8
260
1.258.4
298.1
960.3
163.9
796.4
155.1
74.8
80.1
4.8
27.7
1.269.4
298.1
971.3
166.1
805.1
154.0
72.9
81.2
5.2
1340.5
1,419.7
1,434.6
1,446.0
1456.3
127.6
129.6
129.6
119.1
122.2
995.6
178.1
531.5
28.3
503.3
213.8
4.7
67.5
50.2
788.3
155.3
77.9
77.4
4.5
181.2
545.6
290
516.6
210.4
5.1
68.4
56.4
71.0
63.4
1.430.3
406.3
321.9
84.4
1,024.0
18.3.6
55.3.2
29.4
523.7
1,442.5
409.8
324.3
85.4
1.032.8
185.5
557.2
212.9
215.0
29.7
527.5
S.3
5.4
69.0
60.3
75.2
67 4
69.6
61.6
1,289.5
304.6
984.9
Footnotes appear on p. A21.
319.5
85.3
1,032.7
188.2
559.0
29.6
529.4
213.1
5.0
68.3
67.5
57.2
77.2
65.6
54.4
68.6
66.0
1,615.7
1.618.8
1,606.7
1,301.4
304.9
996.5
169.1
827.3
154.6
70.7
83.9
4.7
27.8
1,292.8
298.5
994.3
169.5
824.8
156.9
70.9
86.0
4.3
27.5
1,289.4
300.5
988.8
169.1
819.7
161.8
73.3
88.5
4.1
27.9
1,277.2
292.1
985.2
169.4
815.8
160.3
720
88.3
1,480.8
1488.4
14814
1,483.1
1469.5
135.8
135.5
134.3
135.7
137.2
50.4
50.7
50.5
MEMO
57 Mortgage-backed securities"
85.2
1,033.1
187.7
558.9
29.6
529.3
213.1
5.2
3.9
28.1
A20
1.26
Domestic Financial Statistics • April 1998
COMMERCIAL BANKS IN THE UNITED STATES
E. Foreign-related institutions
Assets and Liabilities1—Continued
Billions of dollars
Wednesday figures
Monthly averages
1997
1997
Account
Jan.
July
Aug.
Sept.
1998
Oct.
Nov.
Dec.
1998
Jan.
Jan. 7
Jan. 14
Jan. 21
Jan. 28
Seasonall adjusted
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in hank creditCommercial and industrial
Real estate
Security'
Other loans and leases
Interbank loans
Cash assets 4
Other assets 5
1
2
3
4
5
6
7
8
9
10
11
12
. •
13 Total assets 6
Liabilities
Deposits
Transaction
Nontransaction
Larsze time
Other
Borrowings
From banks in the U S
From others
Net due to related foreign offices
Other liabilities
14
15
16
17
18
19
20
21
22
23
..
536.2
180.2
90.3
89.9
356.1
218.0
28.5
43.5
66 0
18.5
33.6
42.5
532.6
177.9
85.8
92.1
154.7
219.7
28.3
42.2
64.4
18.0
34.4
42.6
537.4'
182.4
87.8
94.6
155.0
222 2
27.9
43.0
62 0
18.0
35.5
42.0
543.9'
181.3'
86.4
94 9'
362.6'
223.6
27.7
46.3'
65.0
201)
34.8
41.4'
552.1'
195.8'
86.1
109.7'
356.3
222.6
26 9'
41.1
65.6
23.1
36.2
44.9'
559.9'
199.9'
84.3
115.6'
360.0
224.1
26.5
44.4
65 0"
30.6
14 7
42.0'
578.0
199.6
80.6
119.0
378.4
226.4
27.0
54.5
70.5
27.2
32.9
44.1
578.3
202.7
83.7
119.0
375.6
226.3
27.1
53.3
69.0
36.6
32.8
41.0
575.4
198.1
76.6
121.4
377.3
226.8
27.2
52.7
70.7
26.4
32.5
44.1
579.1
199.0
76.6
122.4
380.1
227.7
26.8
54.7
70.8
23.8
33.4
45.3
578.0
196.9
81.5
115.4
381.1
224.8
27.0
58.5
70.8
23.8
33.2
46.9
607.5
630.6
627.4
632.7'
639.9'
656.1 r
666.9
681.9
688.5
678.1
681.4
681.6
225.7
10 3
21.5.4
213.2
264.6
10.6
253.9
251.4
272.1
10.7
261.4
259.0
278.0
10 5
267.4
265.0
2.4
2.4
2.4
135.0
30.3
104.7
130.9
95.3
265.6
10.8
254.8
252.3
25
143.3
35.9
107.4
127.3
94.1
260.9
10.4
250.5
248.1
13ft5
28 2
102.4
150.6
90.4
263.4
11 "*
252.2
249.7
2.5
137.4
31.2
106.3
130.6
96.0
161.8
37.7
124.1'
118.6
93.4
165.1
30.5
134.5
119.4
97.*
157.3
27.7
129.6
125.9
98.6'
276.0
10 8
265.2
262.7
2.4
159.1
25.2
134.0
135.1
98.0
275.9
11.1
264.8
262.4
2.5
153.4
22.7
130.7
147.6
99.5
274.5
11.0
263.5
261.1
2.4
159.6
24.5
135.1
131.9
101.0
273.8
10.6
263.2
260.8
2.4
156.5
27.1
129.4
132.0
98.6
278.5
10.8
267.7
265.3
2.4
164.9
24.7
140.2
129.4
93.8
597.2
625.9
627.4
630.2'
634.71"
653.5'
659.7
668.2
676.4
667.0
661.0
666.7
10.4
4.8
(1.0
2.5
2.6
7.2
13.7
12.1
11.1
20.4
14.9
573.4
194.9
82.3
16.2
66.0
112.7
74.0
38.6
378.4
226.4
27.1
53.3
71.6
36.6
33.2
40.7
571.4
192.8
77.9
111
66.8
114.9
72.8
42.1
378.6
226.7
27.2
52.7
72.0
26.4
33.3
42.8
573.8
193.1
78.5
12.8
65.7
114.6
70.5
44.1
380.7
227.3
26.8
54.7
72.0
238
33.8
43.5
575.9
194.1
83.4
18.7
64.8
110.7
70.8
40.0
381.8
224.7
26.9
58.5
71.7
23.8
334
46.2
2.6
24 Total liabilities
25 Kesuiual ("assets less liabilities)
515.9
170.3
81.0
89.2
345.7
214.4
31.8
38.1
61.3
22.7
31.1
38.1
7
5.2
Not seasonally adjusted
Assets
Bank credit
Securities in bank credit
U.S. government securities
Trading account
Investment account
Other securities
Trading account
Investment account
Loans and leases in bank credit 2 . . .
Commercial and industrial
Real estate
Security 3
Other loans and teases
Interbank loans
Cash assets 4
Other assets 5
26
27
28
29
30
31
3^
33
34
35
i6
37
38
39
40
41
42 Total assets 6
43
44
45
46
47
48
49
50
51
52
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U S
From others
Net due to related foreign offices
Other liabilities
53 Total liabilities
54 Residual (assets less liabilities)'
15.1
70.5
95.6'
62.5'
33.1'
361.3'
222.2
27.8'
46.3'
64.9
551.1'
195.1'
85.7
17.6
68.1
109.4'
69.6 r
39.8'
356.O1
"'22 4
27.3'
41 1
65.2'
554.5'
192.C
81.7
15.8'
65.9 r
! 10.3'
70.3'
40.01
362.6
224.5
26.6'
44.4
67.01
34.7
42.4
20.(1
35.2
41.1'
23.1
36.5
45.2'
30.6
36.0
42.9"
574.4
194.7
81.6
15.5
66.0
113.1
72.3
40.8
379.7
226.3
27.0
54.5
71.9
27.2
33.3
43.2
632.1
630.2
638.5'
655.7'
663.8
677.9
683.6
673.6
674.7
679.0
264.6
11.2
253.3
250.8'
159.3
89.5
143.9
31.9
112.0
129.7
93.2
261.2
10.9
250.3
247.8
2.5
142.6
31.7
110.9
128.7
96.4
144.2
34.9
109.3
124.1
93.91'
268.8
10.5
258.3
255.9
25
157.1
34.5
122.6
117.6
91.3'
275.7
10.7
265.0
262.6
2.5
159.8
30.5
129.3
117.6
97.7'
281.0
11.2
269.8
267.3
2.5
155.2
28.2
127.1'
126.3
97.0
276.1
10.8
265.3
262.8
2.4
155.6
26.1
129.5
144.8
96.9
275.3
11.2
264.1
261.6
2.5
151.9
24.5
127.4
155.7
97.3
274.8
11.0
263.8
261.3
2.4
156.7
26.9
129.8
139.7
98.8
275.0
10.5
264.4
262.0
2.4
154.4
26.5
127.9
144.2
96.7
279.3
10.7
268.6
266.2
2.4
157.1
25.2
131.9
141.9
94.9
602.1
628.4
629.0
626.8 r
634.8 r
650.8'
659.5
673.5
680.2
670.0
670.3
673.3
2.6
2.2
3.0
3.4
3.7
4.9
4.3
4.3
3.5
3.6
4.4
5.8
41.5'
40.3'
41.5'
41.2'
39.8'
41.8'
40.9'
42.0
43.9
43.1
41.3
40.3
41.4'
42.1'
43.1'
41.8'
40.1'
4I.9 1
41.fi'
42.4
44.7
43.5
41.6
40.6
513.4
166.6
82.0
16.2
65.8
84.6
56.4'
28.1
346.8
214.3
31.8
38.1
62.6
22 7
31.5
37.3
536.8
179.1
87.7
17.0
70.7
91.4
60.3'
31.1
357.6
219.2
28.4
43.5
66.5
18.5
33.8
41.7
536.5
181.5
87.3
18.3
68.9
94.2
61.4'
32.8
355.1
219.9
28.4
42.2
64.6
M4.fi
630.6
225.8
10.4
215.5
213.3
22
127.4
29.2
261.6
10.6
251.0
248.5
2.5
5.35.4
180.7
86.7
17.2
69.5
94.0
61.4'
32.6
354.6
220.7
28.0
43.0
63.0
542.5'
181.2'
180
ISO
34.3
43.4
2.5
856
MEMO
55 Revaluation gains on off-balance-sheet
items*
56 Revaluation losses on off-balancesheet items*
Footnotes appear on p. A21.
Commercial Banking Institutions—Assets and Liabilities A21
NOTES TO TABLE 1.26
NOTE. Tables 1.26, 1.27, and 1.28 have been revised to reflect changes in the Board's H.8
statistical release, "Assets and Liabilities of Commercial Banks in the United States." Table
1.27, "Assets and Liabilities of Large Weekly Reporting Commercial Banks," and table 1.28,
"Large Weekly Reporting U.S. Branches and Agencies of Foreign Banks," are no longer
being published in the Bulletin. Instead, abbreviated balance sheets for both large and small
domestically chartered banks have been included in table 1.26, parts C and D. Data are both
merger-adjusted and break-adjusted. In addition, data from large weekly reporting US.
branches and agencies of foreign banks have been replaced by balance sheet estimates of all
foreign-related institutions and are included in table 1.26. part E. These data are breakadjusted.
The not-seasonally-adjusted data for all tables now contain additional balance sheet items,
which were available as of October 2, 1996.
1. Covers the following types of institutions in the fifty states and the District of
Columbia: domestically chartered commercial banks that submit a weekly report of condition
(large domestic); other domestically chartered commercial banks (small domestic); branches
and agencies of foreign banks, and Edge Act and agreement corporations (foreign-related
institutions). Excludes International Banking Facilities. Data are Wednesday values or pro
rata averages of Wednesday values. Large domestic banks constitute a universe; data for
small domestic banks and foreign-related institutions are estimates based on weekly samples
and on quarter-end condition reports. Data are adjusted for breaks caused by reclassifications
of assets and liabilities.
The data for large and small domestic banks presented on pp. A17-19 are adjusted to
remove the estimated effects of mergers between these two groups. The adjustment for
mergers changes past levels to make them comparable with current levels. Estimated
quantities of balance sheet items acquired in mergers are removed from past data for the bank
group that contained the acquired bank and put into past data for the group containing the
acquiring bank. Balance sheet data for acquired banks are obtained from Call Reports, and a
ratio procedure is used to adjust past levels.
2. Excludes federal funds sold to, reverse RPs with, and loans made to commercial banks
in the United States, all of which are included in "Interbank loans."
3. Consists of reverse RPs with brokers and dealers and loans to purchase and carry
securities.
4. Includes vault cash, cash items in process of collection, balances due from depository
institutions, and balances due from Federal Reserve Banks.
5. Excludes the due-from position with related foreign offices, which is included in "Net
due to related foreign offices."
6. Excludes unearned income, reserves for losses on loans and leases, and reserves for
transfer risk. Loans are reported gross of these items.
7. This balancing item is not intended as a measure of equity capital for use in capital
adequacy analysis. On a seasonally adjusted basis this item reflects any differences in the
seasonal patterns estimated for total assets and total liabilities.
8. Fair value of derivative contracts (interest rate, foreign exchange rate, other commodity and
equity contracts) in a gain/loss position, as determined under FASB Interpretation No. 39.
9. Includes mortgage-backed securities issued by U.S. government agencies, U.S.
government-sponsored enterprises, and private entities.
10. Difference between fair value and historical cost for securities classified as availablefor-sale under FASB Statement No. 115. Data are reported net of tax effects. Data shown are
restated to include an estimate of these tax effects.
11. Mainly commercial and industrial loans but also includes an unknown amount of credit
extended to other than nonfinancial businesses.
A22 Domestic Financial Statistics • April 1998
1.32
COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
Year ending December
1993
Dec.
1994
Dec.
1995
Dec.
1996
Dec.
1997
Dec.
July
Oct.
Sept.
Commercial paper (seasonally adjusted unless noted otherwise)
1 All issuers
555,075
595,382
674,904
775,371
966,699
889,494
885,601
908,640
921,769
940^24
966,699
Financial companies1
2 Dealer-placed paper , total
3
Directly placed paper3, total
218,947
180,389
223,038
207,701
275,815
210,829
361,147
229,662
513,307
252,536
440,262
253,971
437,340
253,934
475,792
235,030
483,489
237,544
483,475
249,781
513,307
252,536
4 Nonfinancial companies4
155,739
164,643
188,260
200,857
195,260
194,327
197,818
200,736
207,268
200,857
Bankers dollar acceptances (not seasonally adjusted)
5 Total
6
7
8
9
10
By holder
Accepting banks
Own bills
Bills bought from other banks
Federal Reserve Banks6
Foreign correspondents
Others
,
fly basis
11 Imports into United States
12 Exports from United States
13 All other
32,348
29,835
12,421
10,707
1,714
11,783
10,462
1,321
725
19,202
410
17,642
10,217
7,293
14,838
10.062
6,355
13.417
29,242
25,754
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. As reported by financial companies that place their paper directly with investors.
4. Includes public utilities and firms engaged primarily in such activities as communications, construction, manufacturing, mining, wholesale and retail trade, transportation, and
services.
1.33
PRIME RATE CHARGED BY BANKS
5. Data on ban
cankers dollar acceptances are gathered from approximately 100 institutions,
The reporting group ia
is revised
n.-ui.u ^»vij
every januoi;,
January. Beginning
u^nu
January 1995, data for Bankers
dollar acceptances are reporled annually in September.
6. In 1977 the Federal Reserve discontinued operations in bankers dollar acceptances for
its own account.
Short-Term Business Loans1
Percent per year
Date of change
Period
Rate
1995—Jan.
1
Feb. 1
July 7
Dec. 20
8.50
9.00
8.75
8.50
1996—Feb.
1
8.25
1997—Mar. 26
8.50
Average
rate
1995
1996
1997
8.83
8.27
8.44
1995—Jan
Feb
Mar
Apr.
May
June
July
Aug
Sept
Oct
Nov
Dec
8.50
9.00
9.00
9.00
9.00
9.00
8.80
8.75
8.75
8.75
8.75
8.65
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 size, based on the most recent Call
Period
1996—Jan
Feb
Mar
Apr.
May
June
July
Aug
Sept
Oct
Nov
Dec
Average
rate
8.50
8.25
8.25
8.25
8.25
8.25
8.25
8.25
8.25
8.25
8.25
8.25
Period
Average
rate
1997—Jan
Feb
Mar.
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
8.25
8.25
8.30
8.50
8.50
8.50
8.50
8.50
8.50
8.50
8.50
8.50
1998—Jan
Feb
8.50
8.50
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.
Financial Markets A23
1.35
INTEREST RATES
Money and Capital Markets
Percent per year; figures are averages of business day data unless otherwise noted
1998, weekending
Oct.
Nov.
Dec.
Jan.
Jan. 2
Jan. 9
Jan. 16
Jan. 23
Jan. 30
MONEY MARKET INSTRUMENTS
1 Federal funds1-2-3
2 Discount window borrowing24
3
4
5
Commercial paper3'456
Nonfinancial
1-month
2-month
3-month
6
7
8
Financial
1-month
2-month
3-month
5.83
5.21
5.30
5.02
5.46
5.00
5.50
5.00
5.52
5.00
5.50
5.00
5.56
5.00
5.45
5.00
5.74
5.00
5.45
5.00
5.53
5.00
5.53
5.00
n.a.
n.a.
n.a.
5.57
5.57
5.56
5.49
5.48
5.51
5.53
5.59
5.60
5.78
5.71
5.67
5.46
5.44
5.42
5.71
5.65
5.60
5.48
5.47
5.47
5.44
5.40
5.38
5.44
5.43
5.40
5.47
5.43
5.40
n.a.
n.a.
5.59
5.59
5.60
5.50
5.50
5.55
5.55
5.65
5.64
5.80
5.72
5.70
5.48
5.46
5.44
5.67
5.63
5.62
5.49
5.49
5.48
5.45
5.43
5.40
5.46
5.44
5.42
5.48
5.44
5.44
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
9
10
11
Commercial paper (historical)3'5-67
1-month
3-month
6-month
5.93
5.93
5.93
5.43
5.41
5.42
5.54
5.58
5.62
12
13
14
Finance paper, directly placed (historical) '£•'•
1-month
3-month
6-month
5.81
5.78
5.68
5.31
5.29
5.21
5.44
5.48
5.48
15
16
Bankers acceptances
3-month
6-month
5.81
5.80
5.31
5.31
5.54
5.57
5.57
5.56
5.66
5.63
5.75
5.68
5.48
5.45
5.62
5.59
5.52
5.51
5.47
5.37
5.45
5.44
5.47
5.44
17
18
19
Certificates of deposit, secondary market*'
1-month
3-month
6-month
5.87
5.92
5.98
5.35
5.39
5.47
5.54
5.62
5.73
5.55
5.65
5.72
5.61
5.74
5.78
5.88
5.80
5.82
5.53
5.54
5.56
5.72
5.74
5.76
5.55
5.58
5.61
5.50
5.50
5.51
5.51
5.51
5.52
5.53
5.53
5.54
5.56
5.48
5
20 Eurodollar deposits, 3-month3'1'
24
25
26
US. Treasury bills
Secondary market3-5
3-month
6-month
1-year
Auction average3'5-12
3-month
6-month
1-year
27
28
29
30
31
32
33
34
Constant maturities
1-year
2-year
3-year
5-year
7-year
10-year
20-year
30-year
21
22
23
5.63
5.49
5.56
5.60
5.01
5.08
5.22
5.06
5.18
5.32
4.97
5.09
5.17
5.14
5.17
5.17
5.16
5.24
5.24
5.04
5.03
4.98
5.24
5.24
5.23
5.04
5.04
4.99
5.00
4.97
4.92
5.02
5.02
4.96
5.06
5.06
5.01
5.51
5.59
5.69
5.02
5.09
5.23
5.07
5.18
5.36
4.95
5.09
5.20
5.15
5.17
5.14
5.16
5.24
5.18
5.09
5.07
5.07
5.29
5.29
n.a.
5.12
5.13
5.07
4.97
4.91
4.98
5.00
n.a.
5.07
5.03
n.a.
5.94
6.15
6.25
6.38
6.50
6.57
6.95
6.88
5.52
5.84
5.99
6.18
6.34
6.44
6.83
6.71
5.63
5.99
6.10
6.22
6.33
6.35
6.69
6.61
5.46
5.77
5.84
5.93
6.05
6.03
6.38
6.33
5.46
5.71
5.76
5.80
5.90
5.88
6.20
6.11
5.53
5.72
5.74
5.77
5.83
5.81
6.07
5.99
5.24
5.36
5.38
5.42
5.53
5.54
5.88
5.81
5.52
5.66
5.70
5.71
5.76
5.75
6.01
5.93
5.25
5.35
5.37
5.38
5.48
5.49
5.82
5.75
5.18
5.28
5.28
5.32
5.45
5.45
5.80
5.74
5.22
5.36
5.36
5.45
5.57
5.59
5.93
5.87
5.28
5.40
5.43
5.48
5.60
5.63
5.96
5.89
6.93
6.80
6.67
5.79
5.92
5.95
5.80
6.10
5.95
5.52
5.79
5.76
5.32
5.50
5.52
4.93
5.08
5.07
4.77
4.94
4.96
4.78
4.96
5.03
4.92
5.08
5.11
7.83
7.66
7.54
6.83
6.83
6.94
7.59
7.72
7.83
8.20
7.86
7.37
7.55
7.69
8.05
7.77
7.27
7.48
7.54
7.87
7.71
7.00
7.20
7.27
7.57
7.44
6.87
7.07
7.15
7.42
7.24
6.76
6.99
7.05
7.32
7.10
6.61
6.82
6.93
7.19
6.97
6.70
6.94
7.00
6.91
6.96
6.55
6.77
6.86
7.13
6.86
6.55
6.77
6.87
7.14
6.96
6.67
6.87
6.98
7.24
7.11
6.70
6.89
7.02
7.28
6.96
2.56
2.19
1.77
1.61
1.65
1.62
1.62
1.61
1.62
1.63
1.62
1.61
U.S. TREASURY NOTES AND BONDS
Composite
35 More than 10 years (long-term)
STATE AND LOCAL NOTES AND BONDS
Moody's series14
36 Aaa
37 Baa
38 Bond Buyer series
5.19
5.32
5.38
5.19
5.32
5.33
5.03
5.17
5.19
4.88
5.04
5.06
4.98
5.12
5.15
CORPORATE BONDS
39 Seasoned issues, all industries16
40
41
42
43
44
Rating group
Aaa
Aa
A
Baa
A-rated, recently offered utility bonds17
MEMO
Dividend-price ratio18
45 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 for 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. Series ended August 29, 1997.
8. An average of offering rates on paper directly placed by finance companies.
9. Representative closing yields for acceptances of the highest-rated money center banks.
10. An average of dealer offering rates on nationally traded certificates of deposit.
11. Bid rates for Eurodollar deposits at approximately 11:00 a.m. London time. Data are
indication
purposes only.
Digitizedforfor
FRASER
12. Auction date for daily data; weekly and monthly averages computed on an issue-date
http://fraser.stlouisfed.org/
basis.
Federal Reserve Bank of St. Louis
13. Yields on actively traded issues adjusted to constant maturities. Source: U.S. Department of the Treasury.
14. General obligation bonds based on Thursday figures; Moody's Investors Service.
15. State and local government general obligation bonds maturing in twenty years are used
in compiling this index. The twenty-bond index has a rating roughly equivalent to Moodys'
Al rating. Based on Thursday figures.
16. Daily figures from Moody's Investors Service. Based on yields to maturity on selected
long-term bonds.
17. Compilation of the Federal Reserve. This series is an estimate of the yield on recently
offered, A-rated utility bonds with a thirty-year maturity and five years of call protection.
Weekly data are based on Friday quotations.
18. Standard & Poor's corporate series. 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.I5 (519) weekly and
G.13 (415) monthly statistical releases. For ordering address, see inside front cover.
A24
1.36
Domestic Financial Statistics • April 1998
STOCK MARKET
Selected Statistics
1996
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec
Prices and trading volume (averages of daily figures)1
Common stock prices (indexes)
1 New York Stock Exchange
(Dec. 31. 1965 - 50)
2
Industrial
3
Transportation
4
Utility
5
Finance
291.18
367.40
270.14
110.64
238.48
357.98
453.57
327.30
126.36
303.94
456.99
574.97
415.08
143.87
424.84
433.36
549.65
395.50
140.52
392.32
457.07
578.57
410.93
140.24
419.12
480.94
610.42
433.75
144.25
441.59
482.39
609.54
439.71
143.82
446.93
489.74
617.94
451.63
145.96
459.86
499.25
625.22
466.04
157.83
476.70
492.14
615.65
453.56
153.53
465.35
504.66
623.57
461.04
165.74
490.30
504.13
624.61
458.49
146.25
479.81
6 Standard & Poor's Corporation
(194L-43 - 10)2
541.72
670.49
873.43
833.09
876.29
925.29
927.74
937.02
951.16
938.92
962.37
963.36
7 American Stock Exchange
(Aug. 31, 1973 - 5O)3
498.13
570.86
628.34
584.06
619.94
635.28
645.59
678.05
702.43
674.37
667.89
665.72
345,729
20,387
409,740
22,567
523.254
n.a.
479,907
19,634
516,241
23,277
543,006
25,562
506,205
24,095
541,204
28,252
606,513
32,873
531,449
27.741
541,134
27,624
632,895
28.199
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-dealers4
76,680
97,400
126,090
106,010
113,440
116,190
119,810
126,050
128,190
127,330
126,090
127,790
Free credit balances at brokers'
11 Margin accounts6 ..
12 Cash accounts
16,250
34,340
22,540
40.430
31,410
52,160
22,050
39,400
23,860
41,840
24.290
43,985
23,375
42,960
23,630
43,770
26,950
47,465
26,735
45,470
31,410
52.160
29,480
48,620
Margin requirements (percent of market value and effective date)
13 Margin stocks
14 Convertible bonds
15 Short sales
Mar. II, 1968
June 8, 1968
May 6, 1970
Dec. 6, 1971
Nov. 24, 1972
Jan. 3, 1974
70
50
70
80
60
80
65
50
65
55
50
55
65
50
65
50
50
50
1. Daily data on prices are available upon request to the Board of Governors. For ordering
address, .see inside front cover.
2. In July 1976 a financial group, composed of banks and insurance companies, was added
to the group of stocks on which the index is based. The index is now based on 400 industrial
stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60). and
40 financial.
3. On July 5, 1983, the American Stock Exchange rebased its index, effectively cutting
previous readings in half.
4. Since July 1983, under the revised Regulation T, margin credit at broker-dealers 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.
5. Free credit balances are amounts in accounts with no unfulfilled commitments to
brokers and are subject to withdrawal by customers on demand.
6. Series initiated in June 1984.
7. Margin requirements, stated in regulations adopted by the Board of Governors pursuant
to the Securities Exchange Act of 1934, limit the amount of credit that can be used to
purchase and carry "margin securities" (as defined in the regulations) when such credit is
collateralized by securities. Margin requirements on securities 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.
Federal Finance A25
1.38
FEDERAL FISCAL AND FINANCING OPERATIONS
Millions of dollars
Calendar year
Fiscal year
Type of account or operation
Aug.
US. budget'
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 2
MEMO
13 Treasury operating balance (level, end of
period)
14
15
Federal Reserve Banks
Tax and loan accounts
1,351,830
1,000,751
351,079
1,515,729
1,227,065
288,664
-163,899
-226,314
62.415
1.453,062
1,085.570
367.492
1,560,512
1,259,608
300,904
-107,450
-174,038
66.588
1.579.292
1.187.302
391.990
1,601,235
1,290,609
310.626
-21.943
-103,307
81.364
103,483
70,902
32,581
138,672
109.810
28,862
-35,189
-38,908
3.719
174,772
138.849
35,923
124,831
91,406
33,429
49,937
47.443
2,494
114.898
87.083
27.815
150,866
123,863
26,999
-35,964
-36,780
816
103,481
73,690
29,791
120,830
91,327
29,504
-17,349
-17.637
287
167,998
135,340
32,658
154,359
146,647
7,712
13,639
-11,307
24,946
162,610
171,288
-2,007
-5,382
129,712
-6,276
-15,986
38,171
604
-16,832
30.348
15,435
-10,594
-18,318
-31,545
-74
6,315
23,360
6,289
29,108
483
-12,242
-1,771
-12,107
239
-24,807
-8,422
7,850
37,949
8,620
29,329
44,225
7,700
36,525
43,621
7,692
35,930
12,076
4,700
7,376
43,621
7,692
35,930
20,261
4,616
15,645
19,778
5,127
14,651
31,885
5,444
26,441
40,307
5,552
34,756
1. Since 1990. off-budget items have been the social security trust funds (federal old-age
survivors insurance and federal disability insurance) and the U.S. Postal Service.
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;
Sept.
123,367
39,243
137,231
108,843
28,388
25,379
14,524
10,855
net gain or loss for US. currency valuation adjustment; net gain or loss for IMF loanvaluation adjustment; and profit on sale of gold.
SOURCE. Monthly totals: U.S. Department of the Treasury, Monthly Treasury Statement of
Receipts and Outlays of the US. Government; fiscal year totals; U.S. Office of Management
and Budget, Budget of the U.S. Government.
A26
1.39
Domestic Financial Statistics • April 1998
U.S. BUDGET RECEIPTS AND OUTLAYS'
Millions of dollars
Fiscal year
Calendar year
Source or type
1997
1996
RECEIPTS
1 All sources
2 Individual income taxes, net
3
Withheld
4
Nonwithheld
5
Refunds
Corporation income taxes
6
Gross receipts
7
Refunds
8 Social insurance taxes and contributions, net
9
Employment taxes and contributions2
10 Unemployment insurance
11 Other net receipts3
12
13
14
15
Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts4
1,453,062
1,579,292
767,099
707,551
845,527'
773,810'
103,481
1«7,998
162,610
656,417
533,080
212,168
88,897
737,466
580,207
250.753
93,560
347.285
264.177
162.782
79,735
323,884
279.988
53,491
9,604
400,435
292,252
191,050
82,926
354,072
306,865
58,069
10,869
46,596
47,581
2,053
3.040
69,060
64,604
5,240
784
95.798
56,628
40,039
870
189,055
17.231
509,414
476.361
28,584
4,469
204,493
22,198
539,371
506,751
28,202
4,418
96.480
9.704
277,767
257.446
18.068
2,254
95.364
10.053
240.326
227,777
10,302
2,245
106,451
9,635
288,251
268,357
17.709
2,184
104,659
10,135
260,795
247,794
10,724
2,280
4.900
987
42,488
39,629
2,526
334
44,973
936
45,149
44,297
425
427
6,888
2,481
51,765
50,395
1,036
333
54,014
18,670
17,189
25,534
56,924
17,928
19,845
25,465
25,682
8,731
8,775
12,087
27,016
9,294
8,835
12.888
28,084
8,619
10,477
12,866
31,132
9,679
10,262
13,347'
5,202
1,323
1,510
2,450
5.167
1.416
1.498
1.671
4,679
1,387
1,808
2,768
1,560,512'
1,601,235
785,368
800,176r
797,418
824,360r
OUTLAYS
16 All types
120,830
154,359
137,231
17
18
19
20
21
22
National defense
International affairs
General science, space, and technology, . .
Energy
Natural resources and environment
Agriculture
265.748
13.496
16,709
2.844'
21,614
9,159
270,473
15,228
17,174
1,483
21,369
9,032
132,599
8,076
8.897
1.356
10,254
73
138,702
8,596
8,260
703
10.310
10.977
131.500
5.779
8,939
793'
9,688
1,433
139,480
9,518
10,040
386
11,199
10,542
17,883
955
1,606
-68
1,566
1,425
26,944
4,534
1,899
-267
2,388
2,846
20,738
750
1,498
291
\,638
1,958
23
24
25
26
Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, and
social services
-10,472'
39,565
10,685
-14,624
40,767
11,005
-6.885
18,290
5,245
-5,899
22,211
5,498
-7,575
18,046
5,699
-3,526
21,823
5,712
-714
3,014
916
-1,144
3,681
843
-403
2,762
783
52,001
53,008
25,979
25,227
26,895
4,517
4,688
5,081
27 Health
28 Social security and Medicare
29 Income security
119,378
523.901
225,989
123,843
555,273
230,886
59,989
264,647
121,186
61,595
269,412
107,602
61,808
278,817
123,875'
63,552
283,109
106,295
9,870
42,864
14,694
11.159
50,500
19,951
11,162
46,929
20,093
30
31
32
33
34
36.985
17.548
11,892
241,090
-37,620
39,313
20,197
12,768
244,013
-49,973
18,140
9,015
4,641
120,576
-16,716
21,109
9,583
6,546
122,573
-25,142
17,696'
10,643
6,575'
122,701
-24,234
22,077
10,196
7,230
122,620
-22,795
1,864
1,747
713
20,592
-2,613
4,931
2,051
2.504
20,480
-3,629
3,331
1,718
836
20,570
-2.504
Veterans benefits and services
Administration of justice
General government
Net interest5
Undistributed offsetting receipts6
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 receipts and
outlays do 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. Federal employee retirement contributions and civil service retirement and
disability fund.
4. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts.
5. Includes interest received by trust funds.
6. Rents and royalties for the outer continental shelf, U.S. government contributions for
employee retirement, and certain asset sales.
SOURCE. Fiscal year totals: U.S. Office of Management and Budget, Budget of the US.
Government, Fiscal Year 1999; monthly and half-year totals: US. Department of the Treasury, Monthly Treasury Statement of Receipts and Outlays of the U.S. Government.
Federal Finance A27
1.40
FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars, end of month
1995
1996
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
1 Federal debt outstanding
5,017
5,153
5,197
5,260
5^57
5,415
5,410
5,446
5,536
2 Public debt securities
3
Held by public
4
Held by agencies
4,989
3,684
1,305
5,118
3,764
1,354
5.161
3,739
1,422
5,225
3,778
1,447
5,323
3,826
1,497
5,381
3,874
1,507
5,376
3,805
1,572
5,413
3,815
1,599
5,502
n.a.
n.a.
28
28
0
36
28
36
28
35
27
34
27
34
26
34
26
7
33
26
7
34
n.a.
n.a.
4,900
5,030
5,073
5,137
5,237
5,294
5,290
5,328
5,417
4,900
0
5,030
0
5,073
0
5,137
0
5,237
0
5,294
0
5,290
0
5,328
0
5,416
0
4,900
5,500
5,500
5,500
5,500
5,500
5,500
5 Agency securities
6
Held by public
7
Held by agencies
8 Debt subject to statutory limit
9 Public debt securities
10 Other debt'
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 DEBT OF US. TREASURY
5,950
SOURCE. U.S. Department of the Treasury, Monthly Statement of the Public Debt of the
United States and Treasury Bulletin.
Types and Ownership
Billions of dollars, end of period
Type and holder
1 Total gross public debt
2
3
4
5
6
7
8
9
10
11
12
13
14
15
By type
Interest-bearing
Marketable
Bills
Notes
Bonds
Inflation-indexed notes'
Nonmarketable2
State and local government series
Foreign issues
Government
Public
Savings bonds and notes
Government account series4
Non-interest-bearing
By holder*
16 U.S. Treasury and other federal agencies and trust funds .
17 Federal Reserve Banks
18 Private investors
19 Commercial banks
20 Money market funds
21
Insurance companies
22
Other companies
23
State and local treasuries67
Individuals
24
Savings bonds
25
Other securities
26 Foreign and international
27
Other miscellaneous investors7'9
Q2
Q3
Q4
4,800.2
4,988.7
5,323.2
5,502.4
5,380.9
5,376.2
5,413.2
5,502.4
4,769.2
3,126.0
733.8
1,867.0
510.3
n.a.
1,643.1
132.6
42.5
42.5
.0
177.8
1,259.8
31.0
4,964.4
3,307.2
760.7
2,010.3
521.2
n.a.
1,657.2
104.5
5,494.9
3,456.8
715.4
2,106.1
587.3
33.0
2,038.1
124.1
36.2
36.2
.0
181.2
1,666.7
7.5
5,375.1
3,504.4
785.6
2,131.0
565.4
7.4
1.870.8
104.8
36.8
36.8
.0
182.6
1,516.6
5.8
5,370.5
40.8
.0
181.9
1,299.6
24.3
5,317.2
3,459.7
777.4
2,112.3
555.0
n.a.
1,857.5
101.3
37.4
47.4
.0
182.4
1,505.9
6.0
2,132.6
565.4
15.9
1,937.4
107.9
35.4
35.4
.0
182.7
1.581.5
5.7
5,407.5
3,439.6
701.9
2,122.2
576.2
24.4
1,967.9
111.9
34.9
34.9
.0
182.7
1,608.5
5.6
5,494.9
3,456.8
715.4
2.106.1
587.3
33.0
2,038.1
124.1
36.2
36.2
.0
181.2
1,666.7
7.5
1,257.1
374.1
3.168.0
290.4
67.6
240.1
224.5
540.2
1,304.5
391.0
3,294.9
278.7
71.5
241.5
228.8
421.5
1,497.2
410.9
3,411.2
261.7
91.6
214.1
258.5
363.7
1,506.8
405.6
3,451.7
282.3
84.0
214.3
262.5
348.0
1,571.6
426.4
3,361.7
265.7
77.4
203.4
261.0
337.4
1.598.5
436.5
3,388.9
260.0
76.4
192.0
266.5
333.5
180.5
150.7
688.6
785.5
185.0
162.7
862.2
843.0
187.0
169.6
1,131.8
733.2
186.5
168.9
1,215.4
689.8
186.3
169.1
1,246.9
614.5
186.2
168.6
1,292.4
613.3
1. The U.S. Treasury first issued inflation-indexed notes during the first quarter of 1997.
2. Includes (not shown separately) securities issued to the Rural Electrification Administration, depository bonds, retirement plan bonds, and individual retirement bonds.
3. Nonmarketable series denominated in dollars, and series denominated in foreign currency held by foreigners.
4. Held almost entirely by U.S. Treasury and other federal agencies and trust funds.
5. Data for Federal Reserve Banks and U.S. government agencies and trust funds are actual
holdings; data for other groups are Treasury estimates.
6. Includes state and local pension funds.
7. In March 1996, in a redefinition of series, fully defeased debt backed by nonmarketable
federal securities was removed from "Other miscellaneous investors" and added to "State and
local treasuries." The data shown here have been revised accordingly.
Qi
40.8
3,433.1
704.1
8. Consists of investments of foreign balances and international accounts in the United
States.
9. 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.
SOURCE. U.S. Treasury Department, data by type of security, Monthly Statement of the
Public Debt of the United States; data by holder, Treasury Bulletin.
A28
1.42
Domestic Financial Statistics • April 1998
US. GOVERNMENT SECURITIES DEALERS
Transactions'
Millions of dollars, daily averages
Nov.
Oct.
1998, week ending
1997, week ending
1997
Nov. 26
Dec.
Dec. 3
Dec. 10
Dec. 17
Dec. 24
Dec. 31 Ian. 7
Jan. 14
Jan. 21
OUTRIGHT TRANSACTIONS'
1
2
3
4
5
By type of security
U.S. Treasury bill's
Coupon securities, by maturity
Five years or less
More than five years
Federal agency
Mortgage-backed
By type of counterparty
With interdealer broker
U.S. Treasury
Federal agency
Mortgage-backed
W.th other
9
U.S. Treasury
10 Federal agency
11 Mortgage-backed
6
7
8
41,086
43,506
38,244
42,517
35,218
51,698
38,376
33,558
29,390
42,416
40,994
37,381
132,174
76,423
43,579
58,174
118,847
68,164
48,097
63,657
95,901
54,749
43,015
45,285
125,279
61,156
44,605
48,623
92,007
50,120
44,065
56,118
118,669
66,089
44,867
75,721
110,937
70,503
44,552
42,624
89,852
49,970
42,630
33,167
59,127
30,326
38,475
17,590
128,295
79,357
46,582
61,292
153,884
92,992
48,175
94,472
124,469
64,302
50,166
68,029
145,596
1,377
18,087
132,153
1,250
19,089
107,366
1,143
13,748
133,112
1,258
14,180
96,334
934
16,743
137,469
1,775
20,960
129,162
1,245
13.815
100,678
995
10,781
59,126
567
6,110
137,234
1,572
19,908
161,913
2,521
28,462
130,689
1,398
26,718
104.088
42.202
40,088
98,365
46,847
44,569
81,528
41,873
31,538
95,841
43,347
34,443
81,011
43,131
39,375
98,986
43,092
54,761
90,654
43,307
28.809
72,701
41,635
22,386
59,717
37,908
11,480
112,834
45.010
41,384
125,957
45,654
66,010
95,462
48,768
41,311
FUTURES TRANSACTIONS'
12
13
14
15
16
Bx type of deliverable security
U.S.'Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Federal agency
Mortgage-backed
228
262
404
90
390
314
380
570
352
226
367
138
1,848
21,358
0
0
2,041'
16,939'
0
0
2,534
13,394
0
0
3,012
17,300
0
0
1,995
10,718
0
0
4,056
16,278
0
0
2,792
18,919
0
0
1,929
12,655
0
0
1,465
5,783
0
0
4.304
17,724
0
0
3,201
20,089
0
0
2,229
13,888
0
0
OPTIONS TRANSACTIONS 4
By type of underlying security
17 U.S. Treasury bills
Coupon securities, by maturity
18 Five years or less
19 More than five years
20 Federal agency
21 Mortgage-backed
0
0
0
0
0
0
0
0
0
0
0
0
2,274
6,825
0
614
1,674
6.353'
0
549
1,831
4,487
0
632
1,673
4,596
0
364
1,955
3.974
0
233
2,077
6,020
0
1,450
2,663
4,646
0
847
1,631
4,714
0
270
640
2,470
0
90
1,807
7,903
0
515
4,799
5,460
0
737
3,061
3,983
0
706
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. Monthly averages are based on the number of trading days in the month.
Transactions are assumed to be evenly distributed among the trading days of the report week.
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. Outright transactions include immediate and forward transactions. Immediate delivery
refers to purchases or sales of securities (other than mortgage-backed federal 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 mortgagebacked 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.
Forward transactions are agreements made in the over-the-counter market that specify
delayed 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.
3. Futures transactions are standardized agreements arranged on an exchange. All futures
transactions are included regardless of time to delivery.
4. 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 US. Treasury and federal agency securities.
NOTE, "n.a." indicates that data are not published because of insufficient activity.
Major changes in the report form filed by primary dealers induced a break in the dealer data
series as of the week ending July 6. 1994.
Federal Finance A29
1.43
U.S. GOVERNMENT SECURITIES DEALERS
Positions and Financing'
Millions of dollars
1997
1998, week end ng
1997, week ending
Item
Oct.
Nov.
Dec.
Dec. 3
Dec. 10
Dec. 17
Dec. 24
Dec. 31
Jan. 7
Jan. 14
Jan 21
Positions 2
NET OUTRIGHT POSITIONS 3
1
2
3
4
5
5v type of secunt\
U.S." Treasury bills
Coupon securities, bv maturity
Five years or less
More than live years
Federal agency
Mortgage backed
6,161
18,776
18,205
22.644
24,485
19,132
18.900
8.400
19.343
14,900
12.871
-31,681
-21,634
14,843
37,762
-17,008
-18,763
28,049
37,409
-21,352
-16,759
26,328
44,132
-16.446
-14,649
27,660
36,210
-26.456
-18,580
30.840
46,019
-26,116
-16,942
28,165
48,908
-15.154
-15 934
28.239
42.492
-19.785
-16.484
17.499
42.503
-12,528
-15,515
29.434
46.366
-13,393
-15,037
38.266
48.880
-14.543
-19,897
39,389
49,783
-1,334
-3,141
-2.635
-1,965
-2,625
-2.291
-2,708
-3.201
-3,182
-3,367
-3,448
5,079
-22,760
0
0
2.355
-20,652
0
0
3,578
-27.144
0
0
2,448
-22,670
0
0
6.764
-20,736
0
0
5,049
-28,707
0
0
1,225
-31,858
0
0
1,768
- 29,041
0
0
-4,216
-29,805
0
0
-1.879
-27.645
0
0
-253
-27,138
0
0
n.ii.
n.a.
n.a.
n.a.
n.a.
2.573
4.444
n.a.
369
2.234
3.845
n.a.
74
-757
3.226
n.a.
869
NET FUTURES POSITIONS 4
By type of deliverable security'
6 U.S. Treasury bills
'
Coupon secunties, by maturity
7
Five years or less
8
More than five years
9 Federal agency
10 Mortgage-backed
NET OPTIONS POSITIONS
11
12
13
14
15
By type ot deliverable security
U.S.'Treasury bills
'
Coupon secunties, by maturity
Five years or less
More than rive years
Federal agency
Mortgage-backed
0
0
0
0
1,087
4.004
n.a.
782
215
2.188
n.a.
811
-1.193
4,064
n.a.
725
-1.289
3,486
n.a
nj.
976
-1,551
2,831
n.a.
1.001
-652
3.163
n.a.
1.222
-1.117
3,515
n.a.
841
78
3,200
n.a.
203
Financing'
Reverse repurchase agreements
16 Overnighl and continuing
17 Term
325.078
713,746
328,976
688,464
304.385
654,600
339,159
618,503
313.568
670,168
322.159
672.927
260.415
719,458
306,496
571,315
322.402
670,529
337.041
738,725
324,835
770.417
Securities borrowed
18 Overnight and continuing
19 Term
209,087
96 609
201,701
94 469
200,401
92 672
199.239
88,500
200.910
92 201
198,031
94 742
193,859
100 459
209,303
85 073
217.021
87 774
2N,985
S9O83
212.852
89 364
7.407
88
6.306
99
5,939
286
6.487
n.a.
5.954
n.a.
5.941
286
5.797
n.a.
5.827
n.a.
5,511
137
5.396
n.a.
5,665
n.a.
Repurchase agreements
22 Overnight and continuing
23 Term
685,099
642,512
679,506
629,143
648,786
586,741
6W.819
538,525
68K.769
578.842
704,310
581.607
579,768
678,507
600,427
528,672
700.774
579,576
733 257
650.443
728.141
677.327
Securities loaned
24 Overnight and continuing
25 Term
7,546
3,365
7,759
3,828
7,927
4,591
8,240
4,069
8.128
3,939
8.197
3,667
7,612
4,736
7,435
6.244
8 136
4,745
8,594
4,871
7.905
4,493
Securities pledged
26 Overnight and continuing
27 Tenn
51,116
4,190
50,941
2,741
53.643
3,566
50.174
2,230
48,791
2.759
50.042
3.649
51,718
3.473
65.507
4.956
54 835
4.694
51,136
4,682
51,851
4,642
Collaterahzed loans
28 Overnight and continuing
29 Term
30 Total
n.a.
n.a.
ii.a.
14.645
n.a.
n.a.
13,891
n.a
n.a.
n.a.
10,563
n.a.
n.a.
12.117
!Ul
n.a
16,544
n.a
20,350
n.a
n.a
13,573
n A
15.354
is'o77
15*341
12.957
MEMO: Matched book 6
Securities in
31 Overnighl and continuing
32 Term
303,512
686.424
300,635
662,654
284,089
623,240
311,754
598,418
292 408
640,338
297.079
647.472
247.980
685.181
287,031
530,605
306,066
643.071
324,775
697,823
313,439
717.775
Securities out
33 Overnight and continuing
34 Term
"
196 064
552.735
386,203
544,801
374.312
495.105
401,962
465,730
398,670
497.699
397.406
501.630
v<1.50'>
557.276
357.812
436.403
4IR32I
5l)(»,290
421.397
N.a
41S,707
n.a.
Securities received as pledge
20 Overnight and continuing
21 Term
1. Data tor positions and financing are obtained from reports submitted to the Federal
Reserve Bank of New York by the U.S. government securities dealers on its published list of
primary dealers. Weekly figures are close-of-business Wednesday data. Positions for calendar
days ot the report week are assumed to be constant. Monthly averages are based on the
number of calendar days in the month.
2. Securities positions are reported at market value.
3. Net oulnght positions include immediate and forward position1; Net immediate positions include securities purchased or sold (other than mortgage-backed agencv secunties) 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 for
mortgage-backed agency securities include securities purchased or sold that have been
delivered or are scheduled to be delivered in thirty business days or le^s.
Forward positions reflect agreements made in the over-the-counter markci that specif)
delayed 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.
4 Futures positions reHeci standard]
agreements arranged on an exchange. All tutures
positions are included regardless of lime
delivery,
5. Overnight financing refers lo agree units made on one business day that mature on the
next business day; continuing contracts ai e agreements thai ici mi m effect for more than one
business day but have no specific
\ and can be temun; :d without advance notice by
either p
party;
term agreements
hav a fixed maturity ut more ilia one business day. Financing
y
g
data are reportedd iin terms ot actual funds paid or received, incli Jing accrued interest
h borrowing
b i
6. Matched-book dala reflect
and
fl d financial intermediation activuv m whichh the
lending transactions are matched Malched-book daia are included in the financing breakdowns tjiv^n above The ie\erse repurchase and leuuichasc numbers arc not always equal
because of the ''matching' ut •.eeunUes of different values 01 different types o( collaterali^aIion
NOTE, "n.a." indicates that data ate not published became af insufficient activity.
Major changes in the report form filed by primary dealeis induced a break in the dealer data
series as of the week ending July 6, 1994.
A30
1.44
Domestic Financial Statistics • April 1998
FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES
Debt Outstanding
Millions of dollars, end of period
1997
Agency
Sept.
July
1 Federal and federally sponsored agencies
2 Federal agencies
3
Defense Department^
4
Export-Import Bank2'3
5 Federal Housing Administration
6
Government National Mortgage Association certificates of
participation
Postal Service6
Tennessee Valley Authority
United States Railway Association
10 Federally sponsored agencies7
] 1 Federal Home Loan Banks
12 Federal Home Loan Mortgage Corporation
13 Federal National Mortgage Association
14 Farm Credit Banks8
15 Student Loan Marketing Association*1
l<i Financing Corporation10
17 Farm Credit Financial Assistance^Corporation
18 Resolution Funding Corporation1"
570,711
738,928
844,611
925,823
"77,877
980,501
9833*9
1,003,177
1,014,907
45.191!
6
37,347
6
29,380
6
1,447
84
27,738
6
1,326
43
27,484
6
27,392
5,315
255
39.186
6
3.455
116
1,326
46
1,326
27,356
6
1,295
27,500
6
1,295
93
9,732
29,885
8,073
27,536
5,765
29,429
n.a
n.a.
27,853
27,478
27,386
n.a.
523,452
699 742
205,817
93 279
257,230
53,175
50.335
8.170
807.264
243.194
896.443
139,512
49,993
201,112
53,123
263.404
950.139
291.931
156,980
331,270
60,053
44,763
161.476
W8.599
61.874
45.536
953.017
292.174
165.690
348,115
956.207
295.212
119.961
299,174
57.379
47.529
8,170
8.170
1.261
29,996
39,784
8,170
2,050
97
987,407
308.745
174,900
356,149
61.093
43,000
361,602
29,996
358,003
61,612
40,531
8.170
1,261
29,996
8.170
1,261
29,996
61.093
40,321
8,170
1,261
29,996
49,944
48,698
32,523
1,326
1,295
n.a.
n.a.
1,295
13,530
14.819
19,054
13,530
14,819
2,879
61,091
45.211
8.170
1,261
29.996
1.261
29.996
29,996
128,187
103,817
78,681
58,172
50,119
48,625
5,309
9,732
4,760
6,325
n.a
3,449
2.044
5,765
1,431
n.a.
1,326
n.a.
1,326
8,073
n.a.
3,200
n.a.
38,619
17.578
45.8b4
33,719
17 392
17.984
1,261
n.a.
n.a.
27,494
n.a.
975.821
302,310
172.433
8,170
1.261
29,996
1,261
6
160,050
MEMO
19 Federal Financing Bank debt"
20
21
22
23
24
Lending lo federal and federally sponsored agencies
Export-Import Bank3
Postal Service6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association6
Other lending™
25 Farmers Home Administration
26 Rural Electrification Administration
27 Other
1. Consists of mortgages assumed by the Defense Department between 1957 and 1963
under family housing and homeowners assistance programs.
2. Includes participation certificates reclassified as debt beginning Oct. 1. 1976.
3. On-budget 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 before fiscal year 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. Includes
Federal Agricultural Mortgage Corporation, therefore details do not sum to total. Some data
are estimated.
8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, which is
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.
n.a.
n.a.
n.a.
n.a.
21,015
17,144
29.511
18,325
16.702
21,714
18,700
15.564
14.529
14,300
15,568
17,431
13,895
14,917
19,716
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 Retorm,
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. Us debt is not included in the main portion of the table lo
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 Adminisiration entry consists exclusively of agency assets,
whereas the Rural Electrification Administration entry consists of both agency assets and
guaranteed loans.
Securities Markets and Corporate Finance A31
1.45
NEW SECURITY ISSUES
Tax-Exempt State and Local Governments
Millions of dollars
Type of issue or issuer,
or use
1995
1996
1997
July
1
1 All issues, new and refunding
145,657
171,222
214,693
22,901'
17,786
By type of issue
2 General obligation .
3 Revenue
56.980
88,677
60,409
110,813
69,934
134,989
6.145
13,231
7,679
9,061
By type of issuer
4 State .
5 Special district or statutory authority
6 Municipality, county, or township ..
14.665
93.500
37.492
13,651
113,228
44,343
18,237
134,919
70,558
1,197
13,810
4,369
102390
112,298
127,928
23,964
11.890
9,618
19,566
6,581
30,771
26,851
12,324
9,791
24,583
6,287
32,462
31,860
13,951
12.219
27.794
6,667
35.095
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
NEW SECURITY ISSUES
17,40l
r
21,499
21,898
20,207
21342
16,770
5.062
11.518
3.590
17,909
7.837
14.061
5.713
14.494
8,005
13,337
5.608
11,162
1,984
10,715
4,041
1,352
10,480
4,803
1,278
14,890
16,592
2.392
13,195
13.920
509
13,586
5.920
1,702
15,600
4,098
1.268
11.794
3,706
14,536
9,279
8,915
10,158
12,981
12,979
13,487
9,696
3,498
638
1,615
4,438
637
3.710
2,701
666
1,182
1.789
334
2.781
1,276
1,943
2,654
907
2,305
441
1.908
2,647
1.215
1.402
2.341
729
4,642
2.973
1.420
1.217
4,090
574
2.705
2.981
1,144
2 338
1,521
598
1.540
448
3.251
576
1,481
799
2.024
2.607
683
2,940
897
4,842
SOURCE. Securities Data Company beginning January 1990; Investment
Digest before then.
1. Par amounts of long-term issues based on date of sale.
2. Includes school districts.
1.46
Sept.
Aug.
r
Dealer's
US. Corporations
Millions of dollars
1997
Type of issue, offering,
or issuer
1995
1996
1997
May
June
July
Aug.
Sepl.
Oct.
Nov.
Dec.
673,779
n.a.
n.a.
54,750
83.890
67,305
52,117
84,731r
71,289'
58,350'
63,890
573,206
n.a.
n.a.
46,738
72,638
57,886
46.576
75,166r
58,236'
46,543'
55,871
408,804
87,492
76,910
386.280
74.793
537,778
n.a.
103.188
38.594
n.a.
8,144
60,979
n.a.
11,660
46,415
n.a.
11,471
40.840
n.a.
5.736
6(1.226'
n.a.
14.941
47.037'
n.a.
11.199
42,969
n.a.
3,574
54.341
n.a.
1.530
41,959
34,076
5,111
8,161
13 320
358,446
47,064
42,480
11,352
16,660
12 055
511,285
2 355
2.104
6,566
653
300
34,761
3,748
2,771
424
1,377
576
63.743
8,480
4,466
544
3.674
1 304
39.419
5,087
3,196
406
1.407
278
36,202
3.534
4,330
296
1,357
1 829
63,820'
4,668
7,982
1.322
1.664
342
42,258'
2,152
1,166
299
1,590
1 586
39,750
2.827
1,693
448
1.372
11 Real estate and financial
61,070
50,689
8,430
13,751
22 999
416,269
9'3
48.608
12 Stocks'
100,573
8,012
11,252
9.419
5,541
9,565
13,053
11,807
8,019
2,055
5,957
n.a.
3,846
7,406
678
8.741
n.a
645
4,895
n.a.
2.155
7,410
1.824
11,229
1.060
10,747
3,578
4.441
1,594
1,912
35
200
0
4,219
1,627
2,938
272
1,046
374
5,384
1.056
2,804
563
483
120
3.875
836
1,673
139
48
52
2.371
1,294
3.218
472
235
238
4,108
2,068
3,438
197
280
487
6.583
2,176
3,404
84
592
102
5,449
471
1,221
241
350
479
5.257
1 All issues'
2 Bonds
2
By type of offering
3 Public, domestic
4 Private placement, domestic
5 Sold abroad
By industry group
7 Commercial and miscellaneous
8 Transportation
9 Public utility
By type of offering
13 Public preferred
14 Common
15 Private placement1
10,917
57,556
32,100
By industry group
11
18
19
20
21
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
21,545
27,844
804
1,936
1,077
47.367
33,208
83,052
29.959
85,765
t
n.a.
n.a.
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 closedend, 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.
SOURCE. Beginning July 1993, Securities Data Company and the Board of Governor-, of
the Federal Reserve System.
A32
1.47
Domestic Financial Statistics • April 1998
OPEN-END INVESTMENT COMPANIES
Millions of dollars
Nel Sales and Assets1
1998
1997
Item
1995
1996
June
July
Aug.
Sept.
Oct.
Nov.
Dec.'
Jan.
1 Sales of own shares 2
87M15
1,149,918
112,318
125,710
114,358
116,021
126,824
110,231
150,133
147,994
2 Redemptions ot own shares
3 Net sales'
699,497
171.918
853,460
296,458
86,759
25.559
90.095
35,615
84,366
29.992
86.449
29,572
98,109
28.715
76.115
34,117
113.359
36.774
109.395
38,598
4 Assets4
2,067,337
2,637,398
3,067,565
3,279,535
3,199,534
3,386,547
3,300,248
3.375,197
3,430,795
3,479,784
5 Cash5
6 Other
142,572
1.924.765
139,396
2,498.002
180.552
2.887.011
182,122
3,097.413
180,152
3,019,382
180,159
3,206,388
181,314
3,118,934
188.192
3.187,005
176,231
3,254,564
186.301
3,293.483
4. Market value at end of period, less current liabilities.
5. Includes all US, 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 underwntings of newly formed companies after their
initial offering of securities.
1. Data on sales, and redemption:, exclude money market mutual funds but include
limited-maturity municipal bond funtb 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 mulual funds within the same fund family.
1.48
CORPORATE PROFITS AND THEIR DISTRIBUTION
Billions of dollars; quarterly data al seasonally adjusted annual rates
1997
1996
Account
1995
1996
1997
01
Q2
Q3
04
Ql
Q2
Q3
Q4
n.a.
n.a.
I 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
650.0
622.6
213.2
409.4
264.4
145.0
735.9
676.6
229.0
447.6
304.8
142.8
n.a.
n.d.
n.a
n.a
336.1
n.a.
717.7
664.9
226.2
418 7
300.7
138.0
738.5
682.2
2322
450.0
303.7
146.4
739.6
679 1
231 6
447.5
305.7
141.8
747.8
680.0
226.0
454.0
309.1
144.9
779.6
708.4
241.2
467.2
326.8
140.3
795.1
719.8
244.5
475.3
333.0
142.3
827.3
753.4
258.2
495.2
339.1
156.1
n a.
345.6
n.a.
7 Inventory valuation
8 Capital consumption adjustment
-24.3
51.6
-2.5
61.8
5.7
69.8
-5.1
57.9
-5.4
61.6
-2.7
63.2
3.3
64.4
3.5
67.7
5.9
69.4
3.6
70.3
9.6
71.6
n.;t.
SOURCE. U.S. Department of Commerce, Sun-ex of Current Business
1.51
DOMESTIC FINANCE COMPANIES
Assets and Liabilities1
Billions of dollars, end of period; not seasonally adjusted
1997'
1996
02
Q3
Q4
01
Q2
Q3
04
ASSETS
607 0
233.0
301.6
72.4
637.1
244.9
309.5
82.7
663.7
257.0
318.8
87.9
626.7
240.6
305.7
80.4
628.1
244.4
301.4
82.2
637.1
244 9
309.5
82.7
648.0
249.4
315.2
83.4
651.6
255.1
311.7
84.8
660.5
254.5
319.5
86.4
663.5
256.8
118.8
87.9
60.7
I2.S
55.6
13.1
52.7
13.0
57.2
12.7
54.8
12.9
55.6
13.1
51.3
12.8
57.2
13.3
54.6
12.7
52.7
13.0
7 Accounts receivable, net
8 All other
53.1.5
250.9
568.3
290.0
597.9
312.3
556.7
258.7
560.5
268.7
568.3
290.0
583.9
289.6
581.2
306.8
593.1
289.1
597.8
312.4
9 Total assets
784.4
858.3
910.2
815.4
829.2
858.3
873.4
887.9
882.3
910.2
15.3
168.6
19.7
177.6
24.1
116.2
17.7
169.6
18.3
173.1
19.7
177.6
18.4
185.3
188
193.7
20.4
189.6
24.1
201.5
51.1
300.0
16V6
85.9
60.3
332.5
174.7
93.5
72.7
369.9
213.3
113.9
56.3
3190
163.2
89.7
57.9
322.3
164.8
92.8
60.3
332.5
174.7
93.5
61.0
324.6
189.2
94.9
60.0
345.3
171.4
98.7
61.6
322.8
190.1
97.9
647
328.9
189.6
101.3
784.4
858.3
910.2
815.4
829.2
858.3
873.4
887.9
882.3
910.1
2
3
4
Consumer
Business
Real estate
5 LESS: Reserves for unearned income
6
Reserves for losses
LIABILITIES AND CAPITAL
11 Commercial paper
12
13
14
15
Debl
Owed to parent
Not elsewhere classified
All other liabilities
Capital, surplus, and undivided profits
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; sccuritized
pools are not shown, as they are not on the books.
2. Before deduction for unearned income and losses.
Securities Market and Corporate Finance A33
1.52
DOMESTIC FINANCE COMPANIES
Owned and Managed Receivables'
Billions of dollars, amounts outstanding
1997
Type of credit
1995
1996
1997
July
Aug.
Sept.
Oct.'
Nov.'
Dec.
Se sonally adjus ed
1 Total
682.4
762.4
811.0
789.5
796.9
799.5r
803.2
806.2
811.0
2
3
4
281.9
72.4
328.1
306.6
111.9
343.8
327.0
121.1
362.9
323.3
121.9
344.3
322.7
123.4
350.8
322.6r
120.7
356.2'
324.4
121.5
357.2
323.8
121.7
360.7
327.0
121.1
362.9
Consumer
Real estate
Business
Not seasonally adjusted
5 Total
6
7
8
9
10
11
]2
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
^1
M
33
34
35
36
Consumer
Motor vehicles loans
Motor vehicle leases
Revolving
Other'
Securitized assets4
Motor vehicle loans
Motor vehicle leases
Revolving
Other
Real estate
One- to four-family
Other
Securitized real estate assets^
One- to four-family
Other
Business
Motor vehicles
Retail loans
Wholesale loans1
Leases
Equipment
Loans
Leases
Oilier business receivables6
Securitized assets4
Motor vehicles
Retail loans
Wholesale loans
Leases
Equipment
Loans
Leases
Other business receivables6
689.5
769.7
818.7
783.7
791.4
795.8r
801.3
807.4
818.7
285.8
81.1
80.8
28.5
42.6
310.6
86.7
92.5
32.5
33.2
331.1
87.0
96 8
38 7
34.4
322.2
88.3
99.3
33.5
34.7
322.4
88.4
98.3
33.5
35.2
323.3'
88.5
96.1
34.9
35.0
324.3
86.8
95 9
34 8
35.3
325.5
86.0
96 4
34 9
35.5
331.1
87.0
96.8
38.7
34.4
34.8
3.5
n.a.
14.7
72.4
n.a.
n.a.
36.8
8.7
0.0
20.1
111.9
52.1
30.5
44.3
10.8
0.0
19.0
121.1
59.0
289
38.1
9.0
0.0
19.4
121.9
57.0
30.1
38.3
8.9
0.0
19.7
123.4
59.1
30.1
39.7
10.0'
0.0
19.0
120.7
56.6
29.8
42.6
9.9
0.0
18.9
121.5
58.5
29.3
42.5
11.0
0.0
19.2
121.7
59.4
29.0
44.3
10.8
0.0
19.0
121.1
59.0
28.9
n.a.
n.a.
331.2
66.5
21.8
36.6
8.0
8.0
8.0
8.0
8.0
28.9
0.4
347.2
67.1
25.1
33.0
9.0
9.0
9.0
9.0
9.0
33.0
0.2
366.6
63.7
25.6
27 7
10.1
10.3
10.3
10.3
10.3
34.4
0.3
339.6
63.6
24.4
29.9
9.3
191.3
51.7
139.6
518
33.9
0.3
345 6
65.2
25.4
30.4
9.4
194.9
51.3
143.6
53.0
34.0
0.3
351.8'
67.4
26.0
31.8
9.6
199.0
51.9
147.1
53.1'
33.5
0.3
355.5
61.2
26.5
25.0
9.7
198.5
50.3
148.2
54.7
33.0
0.2
360.2
62.0
26.3
25.8
9.8
198.9
49.6
149.4
54.0
33.0
0.2
366.6
63.7
25.6
27.7
10.3
204.0
51.7
152.3
51.1
8.0
8.0
8.0
8.0
SO
8.0
8.0
8.0
9.0
9.0
9.0
9.0
9.0
9.0
9.0
9.0
10.3
10.3
10.3
10.3
10.3
10.3
10.3
10.3
19.9
2.4
17.4
0.0
10.6
4.2
6.4
2.5
19.8
2.3
17.5
0.0
10.3
4.1
6.2
2.4
19.6
22
174
0.0
10.1
4.0
6.0
2.6
28.4
2.1
26.3
0.0
10.1
4.2
5.8
2.7
32.4
2.5
29 8
0.0
10.3
4.5
5.8
2.6
33.0
2.4
30.5
0.0
11.0
4.6
6.5
3.8
NOTE. This table has been revised lo incorporate several changes resulting from the
benchmarking of finance company receivables lo the June 1996 Survey of Finance Companies. In that benchmark survey, and in the monthly surveys that have followed, more detailed
breakdowns have been obtained for some components. In addition, previously unavailable
data on securitized real estate loans are now included in this table. The new information has
resulted in some ^classification of receivables among the three major categories (consumer,
real estate, and business) and in discontinuities in some component series between May and
June 1996.
Includes finance company subsidiaries of bank holding companies but not of retailers and
banks. Data in tr is table also appear in the Board'1; G.20 (422) monthly statistical release. For
ordering address, see inside front cover.
I. Owned receivables are those carried on the balance sheet of the institution. Managed
receivables are outstanding balances of pools upon which securities have been issued; these
balances are no longer carried on the balance sheets of the loan originator. Data are shown
before deductions for unearned income and losses. Components may noi sum to totals
because of rounding.
2. Excludes revolving credit reported as held by depository institutions thai are subsidiaries of finance companievS.
3. Includes personal cash loans, mobile home loans, and loans to purchase other types of
consumer goods such as appliances, apparel, boats, 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 Credit arising from transactions between manufacturers and dealers, that is, floor plan
financing.
6. Includes loan.s 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.
A34
Domestic Financial Statistics • April 1998
] .53 MORTGAGE MARKETS
Mortgages on New Homes
Millions of dollars except as noted
1997
Aug.
July
Sept.
1998
Oct.
Nov.
Dec.
Jan.
Perms 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)2
Yield (percent per year)
6 Contract rate1
7 Effective rate'-3
8 Contract rate (HUD series)4
175.8
134.5
78.6
27.7
1.21
182.4
139.2
78.2
27.2
1.21
180.1
140.3
80.4
28.2
1.02
181.4
142.7
81.2
28.7
1.05
191.2
148.2
79.8
28.2
1.06
190.6
147.0
79.3
28.3
1.12
183.4
142.4
80.1
28.1
0.94
184.0
143.5
80.8
28.6
0.95
190.7
149.8
81.0
282
0.96
184.1
142.3
80.5
28.5
0.91
7.65
7.85
8.05
7.56
7.77
8.03
7.57
7.73
7.76
7.62
7.78
7.62
7.42
7.59
7.67
7.43
7.61
7.51
7.39
7.54
7.48
7.26
7.40
7.38
7.25
7.40
7.25
7.13
7.27
7.16
8.18
7.57
8.19
7.48
7.89
7.26
7.61
7.04
8.02
7.16
7.52
7.10
7.53
6.90
7.51
6.84
7.17
6.74
7.08
6.56
SECONDARY MARKETS
Yield (percent per year)
9 FHA mortgages (Section 203)
10 ONMA securities6
Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION
Mortgage holdings (end of period)
11 Total
12 FHA/VA insured
13 Conventional
253,511
28.762
224,749
287,052
30,592
256,460
316,678'
31,925
284,753
300,439
31,065
269,374
304,528
31,193
273.335
307,256
31,847
275,409
310,421
32,080
278,341
314,627
31,878
282,749
316,678'
31,925
284,753
320,062
31,621
288,441
14 Mortgage transactions purchased (during period)
56,598
68,618
70.465
6,417
7,606
6.544
7,619
8,166
6.692
7,647
Mortgage commitments (during period)
15 Issued7
16 To sell8
56,092
360
65,859
130
69,965
1,298
6,956
75
5,960
219
7,573
215
9,190
300
5,123
139
6,275
140
12,199
60
107,424
267
107,157
137,755
220
137,535
164,421
180
164,241
151.582
194
151,388
155,169
190
154,979
157,165
186
156,979
159,801
183
159,618
160,974
180
160,794
164,421
180
164,241
169,142
180
168,962
98,470
85,877
125,103'
119,702
117,397'
114,260
8,265'
7,757
9,808'
9,187
10,362'
9,727
12,175'
11,713
11,152'
10,832
15,975'
14,587
13,120
12,702
118,659
128,995
120,089'
9,054'
9,913'
10,877
11,986'
12,047
15,805
15,638
FEDERAL HOME LOAN MORTGAGE CORPORATION
Mortgage holdings (end of period f
17 Total
18 FHA/VA insured
Mortgage transactions (during period)
20 Purchases
21 Sales
22 Mortgage commitments contracted (during period)9
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 thirty-year 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.
Real Estate
1.54
A35
MORTGAGE DEBT OUTSTANDING 1
Millions of dollars, end of period
1997
1996
Type of holder and property
1 All holders
2
3
4
5
By type of property
One- to four-family residences .
Multifarnily residences
Nonfarm, nonresidential
Farm
fiv type of holder
6 Major financial institutions ..
7
Commercial banks2
One- to four-family . . . .
Multifamily
Nonfarm, nonresidential.
Farm
Savings institutions'
One- to four-family . . . .
Multifamily
Nonfarm, nonresidential.
Life insurance companies
One- to four-family
Multifamily
Nonfarm, nonresidential
Farm
22 Federal and related agencies .
23 Government National Mortgage Association . . .
Oneto four-family
24
'
- - ....
Multifamily
25
26 Farmers Home Administration4
One- to four-family
27
Multifamity
28
Nonfarm, nonresidential
29
30
Farm
31 Federal Housing and Veterans' Administrations
32
One- to four-family
33
Multifamily
34 Resolution Trust Corporation
35
One- to four-family
36
Multifamily
37
Nonfarm, nonresidentia]
38
Farm
39 Federal Deposit Insurance Corporation
40
One- to four-family
41
Multifamily
42
Nonfarm. nonresidential
43
Farm
44 Federal National Mortgage Association
45
One- to four-family
46
Multifamily
47 Federal Land Banks
48
One- to four-family
49
Farm
50 Federal Home Loan Mortgage Corporation
51
One- to four-family
52
Multifamily
53 Mortgage pools or trusts5
54
Governmenl National Mortgage Association ..
One- to four-family
Muliifamily
Federal Home Loan Mortgage Corporation . . .
One- to four-family
Multifamily
Federal National Mortgage Association
One- to four-family
Multifamily
Farmers Home Administration4
One- to four-family
Multifamily
Nonfarm, nonresidentia]
Farm .
68
Private mortgage conduits
69
One- to four-family6
Multifamily. .
70
71
Nonfarm, nonresidential
72
Farm
73 Individuals and others7
74
One- to four-family
75
Multifamily
76
Nonfarm, nonresidential..
77
Farm
1993
1994
Q3
Q4
Ql
Q2
Q3P
4,261,163
4,462,828
4,691,824
4,940,719
5,022,464
5,080,733
5,168,350
5,259,875
3.225,399
270,005
685,021
80,739
3,424,395
274,922
680.540
82,971
3.616,807
287,238
703,218
84,561
3,792,994
304,532
756,462
86,732
3,851,163
312,418
771,749
87,134
3,899,042
315,091
778,947
87,653
3,960,438
321,145
798,089
88,679
4,027,379
327,203
815,534
89,759
1,763,410
940,603
556,660
38,657
324,420
20,866
598,435
470,000
67,366
60,764
305
224,372
8,593
25,376
180,934
9,469
1,811,018
1,003,923
611,092
39,346
330,934
22,551
596,191
477,626
64,343
53,933
289
210,904
7,018
23,902
170,421
9,563
1,884,714
1,080,483
663,715
43,837
349,101
23,830
596,763
482,353
61,987
52,135
288
207,468
7,316
23,435
167,095
9,622
1,945,088
1,112,914
678,565
46,410
363,124
24,815
628,037
513,794
61,308
52,614
320
204,138
6,190
23,155
165,096
9,697
1,968,859
1,135,133
692,180
46,676
371,394
24,883
628,335
513,712
61,570
52,723
331
205,390
6,772
23,197
165,399
10,022
1,982,764
1,149,854
702,616
47,618
374,377
25,242
626,381
513,393
60.645
52,007
336
206,529
6,799
23,320
166,277
10,133
2,023,400
1,186,264
727,217
48,752
384,234
26,061
629,059
516,713
60,102
51,906
338
208,077
6,842
23,499
167,548
10,188
2,055,789
1.216,606
745,458
49,231
395,116
26.800
629,757
518,409
60,370
50,634
344
209,426
326,040
22
15
306,774
2
2
0
41,791
17,705
11,617
6,248
6,221
9,809
5,180
4,629
1,864
691
647
525
0
4,303
492
428
3,383
0
176,824
161,665
15,159
28,428
1,673
26,755
43,753
39,901
3,852
302,793
2
2
0
41,575
17,374
11,652
6,681
5,869
6,627
3,190
3,438
0
0
0
0
0
4,025
675
766
2,584
0
175,472
161,072
14.400
29,579
1,740
27,839
45,513
41,149
4,364
300,935
41,386
18.030
10,940
5,406
7,012
12,215
5.364
6,851
17.284
7.203
5,327
4,754
0
14.112
2,367
1,426
10.319
0
165.668
150,698
14,970
28,460
1,675
26,785
46,892
44,345
2,547
315,580
6
6
0
41,781
18,098
11,319
5.670
6,694
10.964
4.753
6,211
10,428
5,200
2.859
2.369
0
7,821
1,049
1,595
5,177
0
174,312
158.766
15,546
28.555
1.671
26,885
41,712
38,882
2,830
2
0
41,596
17,303
11,685
6,841
5,768
6,244
3,524
2,719
0
0
0
0
0
2.431
365
413
1,653
0
174,556
160,751
13,805
29,602
1,742
27,860
46,504
41,758
4,746
295,203
6
6
0
41,485
17,175
11,692
6,969
5,649
4,330
2,335
1,995
0
0
0
0
0
2,217
333
377
1,508
0
172,829
159,634
13,195
29,668
1,746
27,922
44,668
39,640
5,028
2W.966
7
7
0
41,400
17,239
11,706
7,135
5,321
4,200
2,299
1.900
0
0
0
0
0
1,816
272
309
1,235
0
170,386
157,729
12,657
29,963
1,763
28,200
45,194
40,092
5,102
290,786
7
7
0
41,332
17,458
11,713
7,246
4,916
2,839
843
1,996
0
0
0
0
0
1,476
221
251
1,570,691
414,066
404,864
9,202
447,147
442,612
4,535
495,525
486,804
8.721
28
5
0
13
10
213,925
179,755
8.701
25,469
0
1,726,365
450,934
441.198
9,736
490,851
487,725
3,126
530,343
520,763
9,580
19
3
0
9
7
254.218
202,519
14,925
36,774
0
1,861,489
472,283
461.438
10,845
515,051
512,238
2,813
582,959
569,724
13,235
11
2
0
5
4
291,185
222,526
21,279
47,380
0
2,008,356
497,018
485,073
11,945
545,608
543,341
2,267
636,362
619,869
16,493
7
0
0
4
3
329,360
244,884
28,141
56,336
0
2,056,276
506,340
494.158
12,182
554,260
551,513
2,747
650,780
633,210
17,570
3
0
0
0
3
344,894
247,740
33,689
63,464
0
2,099,504
513,471
500.591
12,880
562,894
560,369
2.525
663,668
645,324
18,344
3
0
0
0
3
359,468
256,834
35,607
67.027
0
2,134,312
520,938
507,618
13,320
567,187
564,445
2,742
673,931
654,826
19,105
2,178,530
529,867
516,217
13,650
601,023
446,408
65,380
72,943
16,292
609,865
448,027
69,602
75,253
16,983
638,848
470,187
73,474
77,345
17,841
684,481
476,075
80,193
110,023
18.190
696,395
486,433
81,419
110,275
18.268
703,262
492,248
81,864
110.782
18,368
717,672
503,426
82,959
112,720
7
1. 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
1995
0
0
0
2
372,253
259,950
38,992
73,312
0
18,568
7,080
23,615
168,374
10,358
1,004
0
168,457
156,362
12.095
30,346
1,786
28,560
46,329
40,953
5,376
569,920
567,340
2,580
690,919
670,677
20,242
2
0
0
0
2
387,822
267,000
41,973
78,849
0
734,769
517.568
84,111
114,312
18,778
6. Includes securitized home equity loans.
7. Other holders include mortgage companies, real estate investment trusts, state and local
credit agencies, state and local retirement funds, noninsured pension funds, credit unions, and
finance companies.
SOURCE. 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 for some quarters, are estimated in part by the Federal Reserve.
Line 69 from Inside Mortgage Securities and other sources.
A36
1.55
Domestic Financial Statistics • April 1998
CONSUMER CREDIT1
Millions of dollars, amounts outstanding, end of period
1997
Aug.
July
Sept.
Oct.'
Nov.'
Dec.
Seasonally adjusted
1 Total
3 Revolving
4 Other
1,094,197
1,179,892
1,235,844
1,216,066
l,222,234r
l,223,909r
1,235,543
1,231,871
1,235,844
364.231
442,994
286,972
392,370
499,209
288,313
414,601
528,862
292,381
403,239
520,221
292,607
403.154
523.686
295,394'
405,665
526,377
291,867'
410,356
530,181
295,006
409,060
528,689
294,121
414,601
528,862
292,381
Not seasonally adjusted
1,122,828
1,211,590
1,269,271
1,209,179
1,220,589'
l,226,752r
1,235,032
1.239,420
1,269,271
501,963
152,123
131,939
40,106
85,061
211,636
526,769
152,391
144,148
44,711
77,745
265,826
514,860
160,134
153,704
50,492
78,891
311,190
514,482
156.435
148,973
47.152
67,580
274,557
516,176
157,152
149,791
47,820
68,639'
281,011
507,528
158,428
150,669
48,487
68,658'
292,982
507.334
156,904
151,486
49,156
68,514
301,618
508,603
156,450
151,770
49,824
70,438
302.335
514,860
160,134
153,704
50,492
78,891
311,190
367,069
151,437
81,073
44,635
395,609
157,047
86,690
51,719
418,119
155,254
87,015
64,401
403,694
157,784
88,323
52,672
405,740
158,516
88,428
52,427
409,253
157,234
88,545
55,432
414,874
158,140
86,805
60,079
4H.288
156.798
86.046
59.812
418,119
155.254
87.015
64.401
16 Revolving
17 Commercial banks
18 Finance companies
19 Nonfinancial business3
464.134
210,298
28.460
53,525
522,860
228,615
32.493
44.901
553,828
217,548
38,720
44,966
515,086
218,992
33,461
36.791
520,777
217,466
33.543
37,578
524,281
209,269
34.925
37.685
526,915
208.785
34,754
37.479
531.779
211,207
34,864
38,865
553,828
217.548
38.720
44.966
20 Pools of securitized assets4
21 Other
22 Commercial banks
23 Finance companies
24 Nonfinancial business3
25
Pools of securitized assets
147,934
291,625
140,228
42,590
31,536
19,067
188,712
293,121
141,107
33,208
32,844
25.395
220,976
297,324
142,058
34,399
33,925
25,813
196.456
290.399
137,706
34,651
30,789
25,429
202,444
294,072'
140,194
35,181
31,061'
26,140
212,403
293,218'
141,025
34,958
30,973'
25.147
215,674
293,243
140,409
35,345
31,055
25,865
216,411
294,353
140,598
35,540
31,573
26,112
220,976
297,324
142,058
34,399
33,925
25,813
5 Total
By major holder
6 Commercial banks
8 Credit unions
9 Savings institutions
11 Pools of securitized assets
By major type of credit5
13
L4
15
Commercial banks
Finance companies
Pools of securitized assets4
1. The Board's series on amounts of credit covers most short- and intermediate-term credit
extended to individuals. Data in this table also appear in the Board's G.19 (421) monthly
statistical release. For ordering address, see inside front cover.
2. Comprises mobile home loans and all other loans thai are not included in automobile or
revolving credit, such as loans for education, boats, trailers, or vacations. These loans may be
secured or unsecured.
1.56
3. Includes retailers and gasoline companies.
4. Outstanding balances of pools upon which securities have been issued; these balances
are no longer carried on the balance sheets of the loan originator.
5. Totals include estimates for certain holders for which only consumer credit totals are
available.
TERMS OF CONSUMER CREDIT'
Percent per year except as noted
1997
Item
1995
1996
1997
June
July
Aug.
Sept.
Oct.
Nov
Dec.
INTEREST RATES
Commercial banks2
1 48-month new car
2 24-month personal
Credit card plan
3 All accounts
Auto finance companies
5 New car
9.57
13.94
9.05
13.54
9.02
13.90
n.a.
n.a.
n.a.
n.a.
8.99
13.84
n.a.
n.a.
n.a.
n.a.
8.96
14.50
n.a.
n.a.
16.02
15 79
15.63
15 50
15.77
15 55
n.a.
n.a.
15.78
15 79
n.a.
n.a.
15.65
15 57
n.a.
11.19
14 48
9.84
13 53
7.12
13 27
6.71
11 51
5.93
13 38
6.12
13 29
727
n 55
n 72
6.85
11 14
5.93
13 16
54.1
S2.2
51.6
51.4
54.1
51.0
533
51.3
54.6
51.4
55.5
51.2
55.4
50.8
54.4
50.6
53.7
50.5
53.5
50.5
92
99
91
100
92
99
93
99
94
99
93
99
93
99
92
101
91
99
92
99
16,210
11,590
16,987
12,182
18,077
12.281
18,171
12,239
18,281
12,307
18,329
12,204
18,520
12,190
18,779
12,287
18,923
12,389
19,121
12,547
7.64
OTHER TERMS 3
Maturity (months)
7 New car
8 Used car
Loan-to-value ratio
10 Used car
Amount financed (dollars)
11 New car
1. The Board's series on amounts of credit covers most short- and intermediate-term credit
extended to individuals. 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.
Flow of Funds A37
1.57
FUNDS RAISED IN U.S. CREDIT MARKETS'
Billions of dollars; quarterly data at seasonally adjusted annual rates
1997
Transaction category or sector
Q2
Q4
Ql
Q2
Q3
Q4
Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial sectors
589.4'
575.2'
704.2'
By sector and instrument
2 Federal government
3 Treasury securities
4 Budget agency securities and mortgages
256.1
155.9
155.7
.2
144.4
248.3
7.8
142.9
1.5
145.0
146.6
-1.6
5 Nonfederal
333.3r
419.4'
559.7'
574.6'
10.0
21.4
-35.9
23.3
75.2
34.0'
176.5'
179.0'
Iff
-6.8'
2.2
124.9
18.1
-48.2
73.3
102.0
67.2'
208.4'
175.8'
10.7'
20.2'
1.6
138.9
-.9
2.6'
72.5
322.8'
141.9'
134.3'
3.3'
4.4'
-45.3'
363.0'
245.7'
216.7'
6
7
8
9
10
11
12
13
14
15
16
By instrument
Commercial paper
Municipal securities and loans
Corporate bonds
Bank loans n.e.c
Other loans and advances
Mortgages
Home
Multifamily residential
Commercial
Farm
Consumer credit
17
18
19
20
21
22
By borrowing sector
Household
Nonfinancial business
Corporate
Nonfarm noncorporate
Farm
State and local government
74.8
75.2
6.4
-18.9
125.1'
156.6'
-6.6'
-25.9'
1.0
60.7
218.7'
52.3'
46.5'
3.2
2.6
62.3
23 Foreign net borrowing in United States
24 Commercial paper
25 Bonds
26 Bank loans n.e.c
27 Other loans and advances
69.8
-9.6
82.9
.7
-4.2
-14.0
-26.1
12.2
28 Total domestic plus foreign
659.2'
26.0'
2.9'
-49.0'
66.3'
33.8'
311.7'
262.1'
17.8'
29.2'
2.6
383.0'
190.3'
144.1'
41.5'
4.8'
1.3'
23.1
23.2
-.1
694.9'
686.8'
638.7r
724.2
612.6
722.3
976.1
62.7
60.5
2.2
163.2
166.3
-3.1
126.9
130.2
-3.3
81.2
82.6
-1.4
-97.1
-97.3
.2
40.9
41.9
-.9
67.4
65.6
1.7
511.8r
643.0
681.4
908.8
-14.2
-64.7'
67.8
136.6'
63.0'
253.3'
238.5'
12.0'
.7'
2.2
81.9
-24.1
41.6'
89.9
31.9'
3.9'
330.0'
249.6'
27.6'
51.2'
1.6
38.6
7.2
43.7
79.4
20.3
95.9
86.1
110.5
20.3
316.6
226.5
21.3
64.6
4.1
60.0
14.5
51.8
122.9
24.7
73.5
340.9
261.5
15.1
53.0
12.8
89.3
74.4
147.9
138.3
414.4
312.2
36.6
63.2
2.4
31.5
363.5'
220.4'
192.0'
27.9'
357.9
244.5
193.6
46.6
4.3
40.6
350.4
279.1
205.7
66.8
6.7
322.2
317.3
250.2
640
3.1
41.8
425.8
405.9
329.3
65.5
11.1
77.0
26.3
15.5
11.0
-.7
.5
56.4
10.4
34.3
11.5
87.8
-11.6
94.6
7.3
-2.5
35.5
7
25.3
15.7
-6.1
810.1
1,011.7
632.2'
13.7
70.2
90.7
107.7
65.9
333.8
257.5
21.0
52.1
3.2
53.8
32.8'
71.5
49.8'
47.3'
306.9'
248.5'
17.6'
35.9'
4.9
114.7
364.1
311.7
244.7
60.7
6.3
59.9
406.0'
204.9'
159.9'
37.1'
7.9'
21.2'
.6'
-60.3'
312.1'
159.9'
92.6'
58.2'
9.2'
39.8'
9.2
70.5
11.3
49.4
9.1
-1.5
71.1
13.5
49.7
8.5
-.5
51.5
3.7
41.3
8.5
-2.0
36.1
9.6
11.2
15.1
.1
105.7
37.5
60.2
4.7
3.4
87.9
4.4
78.5
7.8
-2.7
561.2'
775.2'
790.2'
810.3
731.0r
792.5'
726.6r
1.4
147.5
31.2
263.1
229.9
10.8
20.4
2.1
70.8
60.0
4.3
Financial sectors
29 Total net borrowing by financial sectors
464.3
448.4
536.3
614.3
721.7
436.8
644.8
325.9
661.0
536.7
933.8
By instrument
30 Federal government-related
31 Government-sponsored enterprise securities .
32 Mortgage pool securities
33 Loans from U.S. government
165.3
80.6
84.7
.0
287.5
176.9
115.4
-4.8
204.1
105.9
98.2
.0
231.5
90.4
141.1
.0
213.4
99.0
114.4
0
301.4
126.9
174.5
.0
222.9
80.0
142.9
.0
252.8
123.3
129.6
.0
105.7
-8.9
114.6
.0
286.2
198.1
88.1
.0
161.0
46.4
114.6
.0
300.6
34 Private
35 Open market paper
36 Corporate bonds
37 Bank loans n.e.c
38 Other loans and advances
39 Mortgages
128.3
-5.5
122.2
-14.4
22.4
3.6
176.8
40.5
117.6
-13.7
22.6
9.8
244.3
42.7
188.2
4.2
3.4
5.9
304.9
92.2
156.5
16.8
27.9
11.4
400.9
166.7
170.8
13.6
36.0
14.0
420.3
105.4
230.9
20.6
52.7
10.8
213.9
84.4
80.7
2.6
33.3
12.9
392.0
162.0
164.0
20.4
31.2
14.3
220.2
175.9
41.4
7.0
-20.1
16.0
374.8
77.8
215.1
4.9
63.0
14.0
375.6
168.2
139.3
16.7
37.5
14.0
633.1
244.6
287.4
25.7
63.3
12.0
13.4
11.3
.2
2
80^6
84.7
82.8
-1.4
.0
3.4
12.0
6.3
20.1
12.8
.2
.3
172.1
115.4
68.8
48.7
-11.5
13.7
.5
23.1
22.5
2.6
-.1
-.1
105.9
98.2
132.9
50.2
.4
6.0
-5.0
34.9
13.0
25.5
.1
1.1
90.4
141.1
132.0
45.9
12.4
12.8
-2.0
64.1
46.5
198
.1
2
99^0
114.4
168.2
48.7
4.8
23.8
8.0
80.7
44.5
42.1
-.2
.3
126.9
174.5
162.5
67.8
16.0
11.5
13.2
62.7
14.7
25.8
.3
-.4
80.0
142.9
88.0
30.7
1.7
13.7
5.7
33.7
26.8
23.0
.3
2.0
123.3
129.6
138.6
43.8
12.1
17.7
4.9
123.0
13.7
-16.8
-.2
.8
-8.9
114.6
62.9
7.2
5.9
20.2
-2.9
129.4
79.7
31.9
.2
.1
198.1
88.1
95.0
123.8
5.0
20.3
34.9
-16.1
32.0
22.3
2
2
46.4
114.6
169.6
-2.9
3.6
26.9
-6.9
130.7
60.7
41.7
.3
-.3
160.4
140.3
345.5
40
41
42
43
44
45
46
47
48
49
50
51
By borrowing sector
Commercial banking
Savings institutions
Credit unions
Life insurance companies
Government-sponsored enterprises
Federally related mortgage pools
Issuers of asset-backed securities (ABSs)
Finance companies
Mortgage companies
Real estate investment trusts (REITs)
Brokers and dealers
Funding corporations
160.4
140.3
.0
66.6
4.9
27.9
7.0
78.8
A38
1.57
Domestic Financial Statistics D April 1998
FUNDS RAISED IN U.S. CREDIT MARKETS'—Continued
1997
1996
Transaction category or sector
1993
1994
1995
1996
1997
Q2
Q3
Q4
Ql
Q2
Q3
Q4
All sectors
52 Total net borrowing, all sectors
952.7'
1,025.5'
1,223.7'
1,326.5'
1,424.6
1,452.7'
1,229.3'
1,371.5'
1,076.4
1,329.9
1,346.7
1,945.5
53
54
55
56
57
58
59
60
-5.1
421.4
74.8
280.3
-7.2
-8
128.7'
60.7
35.7
448.1
-35.9
153.2
62.9
50.3'
186.2'
124.9
74.3
348.5
-48.2
311,1
114.7
70.1'
214,2'
138,9
102.6
376,5
2,6'
278,4
92,1'
62.5'
323,11
88,8
184.1
236.5
70.2
302.8
129.7
99.8
347.8
53.8
124.2
364.1
32.8'
313.6
85.5
100.1'
317.7'
114.7
107.7
386.1
-64.7'
208.7
143.8'
99.7'
266.1'
81.9
142.3
379.7
41.6'
332.4
60.1'
32.4r
344.4'
38.6
198.6
186.9
43.7
131.8
153.8
11.7
279.1
70.8
108.5
189.1
95.9
335.5
126.8
83.6
330.6
60.0
171.1
201.9
51.8
356.8
48.7
108.5
354.9
53.0
258.1
368.0
89.3
387.1
189.4
195.6
426.4
31.5
Open market paper
U.S. government securities
Municipal securities
Corporate and foreign bonds
Bank loans n.e.c
Other loans and advances
Mortgages
Consumer credil
Funds raised through mutua funds and corporate equities
61 Total net issues
429.7'
125.2'
143.9'
230.5'
217.8
380.4'
71.9'
156.0'
197.7
183.0
313.9
176.6
62 Corporate equities
63
Nonfinancial corporations
64
Foreign shares purchased by U.S. residents
65
Financial corporations
66 Mutual fund shares
137.7'
21.3
63.4
53.0'
292.0
24.6'
-44.9
48.1
21.4'
100,6
-3.5'
-58.3
50.4
4.4'
147,4
-7.0'
-64.2
58.8
-1.6'
237.6
-41.2
-79.9
38.0
.7
259.0
75.9'
.4
70.1
5.4'
304.5
-100.1'
-127.6
32.7
-5.1'
171.9
-20.3'
-56.0
42.3
-6.7'
176.3
-55.7
-78.8
47.0
-23.9
253.4
-57.9
-90.4
53.0
-20.6
240.9
10.2
-60.4
62.2
8.4
303.7
-61.5
-90.0
-10.4
38.8
238,2
1. Data in this table also appear in the Board's Z.I (780) quarterly statistical release, tables
F.2 through F.4. For ordering address, see inside front cover.
Flow of Funds
1.58
SUMMARY OF FINANCIAL TRANSACTIONS'
Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates
Transaction category or sector
1993
1994
1995
1996
1997
02
Q3
Q4
Ql
Q2
Q3
NET LENDING IN CREDIT MARKETS 2
1 Total net lending in credit markets
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
Domestic nonfederal nonnnancial sectors
Household
Nonnnancial corporate business
Nonfarm noncorporate business
State and local governments
Federal government
Rest of the world
Financial sectors
Monetary authority
Commercial banking
U.S.-chartered banks
Foreign banking offices in United States . .
Bank holding companies
Banks in U.S.-affiliated areas
Savings institutions
Credit unions
Bank personal trusts and estates
Life insurance companies
Other insurance companies
Private pension funds
State and local government retirement funds
Money market mutual funds
Mutual funds
Closed-end funds
Government-sponsored enterprises
Federally related mortgage pools
Asset-backed securities issuers (ABSs)
Finance companies
Mortgage companies
Real estate investment trusts (REITs)
Brokers and dealers
Funding corporations
952.7r
l,025.5r
1,223.7'
1326.5'
1,424.6
43.01
2.4r
9.1
-1.1
32.6
-18.4
129.3
241.8'
-85.7'
-1.8'
-2.4
.3
-115.2
— 101.7
5.3
.7
-19.6
4.9
316.4
1,218.5
38.3
324.3
275.0
39.6
5.4
4.2
-7.7
15.7
9.2
121.1
23.3
66.9
48.3
84.5
74.7
.8
95.0
114.4
129.8
22.2
6.7
5.0
15.9
30.4
1,452.7'
1,229.3'
1,371.5'
1,076.4
1,329.9
1346.7
311.1'
274.9'
37.4
.4
-1.7'
-222.3'
-81.9'
-9.1'
.4
-131.7'
-158.5'
-22.8'
-5.91
.4
-130.2'
-4.1'
532.2
1,001.9'
8.4
248.3'
158.9
80.5
10.5
-1.6'
-47.9'
24.3
7.2
118.1
27.7
-66.3
-30.0
-51.5
7
14.5
5.6
303.0
1.087.5
47.2
-175.8
-121.5
20.0
.8
41.9'
81.3
25.3
2.2'
137.9
129.6
89.6
-6.2
4.1
3.9"
82.7
-7.6'
-205.8
-204.2
58.0
.5
-60.2
1.9
367.3
913.0
37.4
308.1
195.9
104.0
2.2
6.1
-5.3
18.5
8.2
94.3
-.1
52.4
3.6
65.2
61.9
2.7
45.1
114.6
39.3
44.9
-.3
5.0
-14.5
31.9
-20.9
.0
.6
14.8
-35.3'
24.9
45.5'
22.3'
30.0
-7.1
-3.7'
117.8
115.4
61.7
48.3
-24.0
4.7
-44.2
-16.2'
-24.6'
-17.9'
5.1'
13.5'
.4
-37.0'
-7.7'
409.3'
942.9'
12.3
187.5'
119.6
63.3
3.9
.7'
19.9
25.5
3.9
72.5
22.5
46.5'
45.9'
88.8
48.9
2.2'
92.0
141.1
101.8
18.4
8.2
3.5'
-15.7
17.2'
952.7'
1,025.5'
1,223.7'
1,326.5'
1,424.6
1,452.7'
1,229.3'
1,371.5'
1,076.4
1,329.9
1,346.7
.7
-.5
.0
89.0
-51.6
15.8
97.2'
114.0'
145.8
40.3
-7.0'
237.6
68.1'
52.4
43.6
227.2'
14.0'
12.5
22.6'
490.7'
-26.6
-1.8
2.3
119.7
-97.2
105.9
94.2
180.2
145.1
-15.9
11.8
19.6'
415.3'
-2.1
.4
188.6
-88.8
85.3
157.9
49.9
182.4
32.8
-55.7
253.4
66.8
117.1
39.8
243.3
30.4
23.5
22.6
587.8
2.4
.0
1.3
105.4
-42.7
171.9
-15.9'
5.3
59.2'
221.6'
12.5'
19.2
44.5'
413.4'
.7
.0
-2.3
104.5
17.6
-53.3'
90.1'
135.4'
187.5
83.3
-20.3'
176.3
97.2'
125.2
66.7'
277.0'
16.6'
19.8
5.9'
656.5'
.4
.0
.2
18.8
-43.7
64.2
24.5
120.5
157.6
114.0
-41.2
259.0
75.7
103 8
57.0
298.6
20.1
26.4
15.8
544.1
1.6
.0
.0
3.0
-50.8
3.9
-3.2
83.1
23.1
98.4
75.9'
304.5
116 9
-17.6
2.2
.6
35.3
9.9
-12.7
96.6
65.6
142.3
110.5
-3.5'
147 4
105.2
26.7
44.9
233.9'
4.6
-49.7
39.5'
462.9'
-6.3
-.5
.0
255.6'
11.4
.9
24.6'
345.6'
-5.8
.0
.7
52.9
89.8
-9.7
-39.9
19.6
43.3
78.2
24.6'
100.6
93.7
-.1
34.5
246.1'
2.6
17.8
59.0'
250.8'
2,318.0'
2,084.3'
2,694.7'
2,925.1'
33*4.6
2,755.4'
2,566.9'
3.355.8'
-5.7
4.2
46.4'
15.8
-190.1'
43.0
-2.7
69.4'
16.6
-145.6'
-.5
25.7
-3.1
36.1'
17.8
-110.6'
-1.0
55.8'
-3.3
31.9'
16.3'
-120.7'
-6
68.3
-1.0
26.6
-22.5
52.1
20.5
-283.0
1.3
86.3'
-4.4
-90.6'
20.3'
-240.1'
-1.5
-1.3
-4.3
-4.8
-2.8
.3
-6.0
-3.8
-29.1
.5
-4.0
-33.9'
-27
-3.9
-33.4
27.1
-4.7
-103.5'
2,768.2'
2,983.«'
3,563.4
798.8'
36.2
142.2
149.6
-9.8
.0
2.4
-23.3
21.7
9.5
100.9
27.7
49.5
22.7'
20.4
159.5
20.0'
87.8
84.7
80.2
278.5'
17.7
.6
-55.0
-27.5'
132.3
678.9'
31.5
163.4
148.1
11.2
.9
3.3
6.7
28.1
7.1
66.7
-sir
273.9
1.035.7'
12.7
265.9
186.5
75.4
-.3
4.2
-7.6
16.2
-18.8
99.2
21.5
61.4'
27.5'
86.5
52.5
10.5'
84.7
98.2
111.1
49.9
-3.4
2.2
90.1
-.r
268.9
872.8'
11.7
179.7
121.9
50.7
5.4
1.7
43.8'
33.0
4.2
.9
30.5
46.9'
60.4'
27.0
54.3
2.2'
114.7
174.5
135.7
36.3
-26.8
3.4
-72.0
12.3'
-7.1'
485.3'
973.4'
11.5
196.1
119.5
71.1
4.8
.7
49.7
21.1
7.8
123.2
14.2
41.3'
45.5'
83.0
27.5
2.2'
81.4
142.9
62.0
13.2
3.4
3.4
35.5
8.6'
3i.ff
309.2
301.1
LI
5.1
1.8
23.8
25.7
8.9
175.0
27.9
58.5
39.2
19.7
91.6
1.3
119.2
88.1
80.2
1.9
10.0
5.0
-11.7
-33.1
-75.1
3.0
402.7
1,116.8
14.3
209.8
209.5
-.6
-5.0
5.8
-42.1
15.7
9.4
107.0
32.4
66.2
90.6
123.6
103.6
.3
55.5
114.6
107.0
65.2
7.2
5.0
15.8
15.6
RELATION OF LIABILITIES
TO FINANCIAL ASSETS
34 Net flows through credit markets
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
Other financial sources
Official foreign exchange
Special drawing rights certificates . . . .
Treasury currency
Foreign deposits
Net interbank transactions
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Corporate equities
Mutual fund shares
Trade payables
Security credit
Life insurance reserves
Pension fund reserves
Taxes payable
Investment in bank personal trusts . ..
Noncorporate proprietors' equity
Miscellaneous
55 Total financial sources
56
57
58
59
60
61
Liabilities not identified as assets (—)
Treasury currency
Foreign deposits
Net interbank liabilities
Security repurchase agreements
Taxes payable
Miscellaneous
Floats not included in assets ( —)
62 Federal government checkable deposits
63 Other checkable deposits
64 Trade credit
65 Total identified to sectors as assets ..
.0
.4
-18.5
50.5
117.3
-70.3
-23.5
20.2
71.3
137.7'
292.0
52.0
61.4
36.0
2,454.5'
2,m.r
I Data in this table also appear in the Board's Z. 1 (780) quarterly statistical release, tables
F. 1 and F.5. For ordering address, see inside front cover.
82.0
-40.2
41.1
98.5
-16.0
-34.8
31.4'
195.6'
7.6
loo.r
23.2
-123.2'
-6.6
-5.0
2,763.6'
-100.1'
2,875.4'
-49.2
46.6
176.3
194.1
58.5
193.7
-57.9
240.9
63.4
137.4
77.5
337.3
1.8
26.3
19.7
633.3
243.6
19.7
406.6
2,994.4
3302.3
3349.2
-3.1
37.3
4.2
132.6'
21.6'
19.0'
-.3
178.0
26.9
-104.6
12.2
-189.3
-.5
-10.2
-24.4
178.6
28.3
-321.4
78.1
-51.6
6.2
11.2
-281.7
-21.4
-3.7
-42.7'
-9.4
-2.6
15.2
16.1
-4.8
-73.1
2.1
-3.4
-17.2
3,212.0'
3,068.4
3,513.7
3,604.6
2. Excludes corporate equities and mutual fund shares.
115.9
10.2
303.7
131.9
79.7
62.8
311.8
29.9
28.9
A39
A40
1.59
Domestic Financial Statistics • April 1998
SUMMARY OF CREDIT MARKET DEBT OUTSTANDING'
Billions of dollars, end of period
1997
1996
1994
Transaction category or sector
1995
1996
1997
Q2
Q3
Q4
Ql
Q2
Q3
Q4
Non fnancial sectors
1 Total credit market debt owed by
domestic nonfinancial sectors
fiv sector and instrument
2 Federal government
3 Treasury securities
4
Budget agency securities and mortgages
5 Nonfederal
....
13,013.0'
13,717.2'
14,436.9'
15,194.1
14,065.4'
14,241.9'
14,436.9'
14,602.1'
14,727,9'
14,913.9
15,194.1
3.492.3
3.465.6
26.7
3,636.7
3,608.5
28.2
3,781.8
3,755.1
26.6
3.804.9
3.778.3
26.5
3,691.8
3,665.5
28.2
3.733.1
3.705.7
27.4
3,781.8
3,755.1
26.6
3,829.8
3,803.5
26.3
3,760.6
3,734.3
26.3
3.771.2
3,745.1
26.1
3,804.9
3,778.3
26.5
9,520.7'
10,080.4'
10,655.1'
11.389.2
10,371.6'
10,508.8'
10,655.1'
10,772.3'
10,967.3'
11,142.7
11,389.2
6
7
K
9
10
!1
12
13
14
15
16
fiv instrument
Commercial paper
Municipal securities and loans
Corporate bonds
Bank loans n.e.c
Other loans and advances
Mortgages
Home
Multifamily residential
Commercial
Farm
Consumer credit
139.2
1,341.7
1,253.0
759.9
669.6'
4,373.4'
3,357.5'
'268.4'
664.5'
83.0
983.9
157.4
1,293.5
1,326.3
861.9
736.9'
4.581.7'
3.533.3'
279.2'
684.7'
84.6
1,122.8
156.4
1,296.0'
1.398.8
928.2'
770.6'
4,893.4'
3,761.7'
'300.7'
743.9'
87.1
1.211.6
168.6
1,366.2
1,489.5
1,035.8
836.5
5,227.2
4,019.2
321.6
796.0
90.3
1,265.4
181.7
1,297.9'
1.359.4
889.2'
757.3'
4.741.6'
3,633.7'
290.8'
731.0'
86.2
1,144.5
17.3.0
1.281.7'
1,376.4
919.2
769.4'
4,815.7'
3,704.!'
293.8
731.1'
86.7
1,173.5
156.4
1 296.0'
1,398.8
928.2'
770.6'
4,893.4'
3 761.7'
'300.7'
743.9'
87.1
,,211.6
168.7
1,305.2'
1,418.7
963.8'
782.9'
4,946.6'
3.806.6'
303.4'
749.0'
87.7
1,186.4
179.3
1,326.7'
1,440.2
996.5'
786.9'
5,032.7'
3,870.1'
'308.7'
765.2'
88.7
1.205.0
176.6
1,338.9
1,470.9
998.5
801.3
5,129.1
3 946.7
'312.5
780.2
89.8
1,227.3
168.6
1.366.2
1,489.5
1,035.8
836.5
5,227.2
4019 2
321.6
796.0
90 3
1,2654
17
18
19
20
21
22
fiv borrowing sector
Household
Nonfinancial business
Corporate
Nonfarm noncorporate
Farm
State and local government
4 482 5'
3.921.7'
2,657.7'
1,121 8'
142.2'
1.116.5'
4,850.7'
4,162.2"
2,869.2'
1,147.9'
145 I'
1,067.6'
5,204.6'
4,381.7'
3,042.4'
1,189.3'
149.9'
1,068.9'
5.571.5
4.689.0
3,282.8
1,250.1
156.2
1.128.7
4.991.3'
4,309.6'
2,993.7'
1.167.8'
148.2'
1.070 7'
5,101.0'
4.352.1'
3.028.4'
1,174.1'
149.5'
1,055.7'
5,204.6'
4,381.7'
3,042.4'
1,189.3'
149.9'
1,068.9'
5,240.0'
4,454.2'
3,104.9'
1,200.9'
148.3'
1.078.1'
5.340.5'
4.531.4'
3,160.4'
1,217.6'
153.4'
1.095.4'
5,439.4
4.598.0
3.209.7
1.233.0
155.4
1,105.2
5,571.5
4,689.0
3.282.8
1.250.1
156.2
1.128.7
23 Foreign credit market debt held in
United States
371.8
442.9
513.4
558.8
462.6
490.2
513.4
517.8
531.6
548.7
558.8
24
25
26
27
42.7
242.3
26 1
60.8
56.2
291.9
34.6
60.2
67.5
341.3
43.7
61.0
65.1
382.6
52.1
59.0
54.5
306.7
40 5
60.9
65.8
321.7
41.7
61.0
67.5
341.3
43.7
61.0
69.3
344.1
43.5
60.9
71.3
352.7
46 4
61.2
64.3
376.3
48.2
59.9
65.1
382.6
52.1
59.0
Commercial paper
Bonds
Bank loans n c c
Other loans and advances
...
28 Total credit market debt owed bv nonfinancial
sectors, domestic and foreign
13,384.9'
14,160.1'
14,950.3'
15,752.9
14,528.0'
14,732.1'
14,950.3'
15,119.8'
15,259.5'
15,462.6
15,752.9
Financial sectors
29 Total credit market debt owed by
financial sectors
3,797.3
4,248.4
4,784.7
5,366.0
4.511.9
4,624.1
4,784.7
4,861.4'
5,029.4'
5,133.7
5,366.0
30
31
32
33
34
35
36
37
38
39
fiv insmtrtient
Federal government-related
Government -sponsored enterprise securities
Mortgage pool securities . .
Loans from U.S. government
Private
Open market paper
Corpoiate bonds
Bank loans n.e.c
Other loans and advances
Mortgages
2.172.7
700.6
1.472.1
.0
1,624.6
441.6
983 9
48.9
131.6
18.7
2,376.8
806.5
1.570.3
.0
1 871 5
486.9
1 172 0
53.1
135.0
24.6
2,608.3
896.9
1,711.4
.0
2 176 4
'579! 1
1 328 5
69.8
162.9
36.0
2,821.7
995.9
1.825.8
.0
2.544.3
745.7
1 466 3
83.4
198.9
50.0
2 4X9.4
846.1
1.643.3
.0
2 022.5
'517.3
1 ^65 2
63.9
146.8
29.2
2.545.1
866.1
1.679.0
.0
2 079 0
'538^6
1 288 8
64.2
155.1
32.4
2,608.3
896.9
1,7)1.4
.0
2 176.4
579.1
1 3^8 ^
69.8
162.9
36.0
2,634.7
894.7
1 740 0
.0
2 226 7'
623.0
1 334 4'
71.3
157.9
40.0
2,706.2
944.2
1.762.1
.0
2,323 2'
642.5
1 390 T
72.9'
173.7
43.5
2,746.5
955.8
1,790.7
.0
2,387.2
684.7
1 396 0
76.5
183.0
47.0
2,821.7
995.9
1,825.8
0
2 544 3
'745.7
1,466.3
83.4
198.9
50.0
40
41
42
43
44
45
46
47
48
49
50
51
52
By borrowing sector
Commercial banks
Bank holding companies
Savings institutions
Credit unions
Life insurance companies
Government-sponsored enterprises
Federally related mortgage pools
Issuers of asset-backed securities (ABSs)
Brokers and dealers
Finance companies
Mortgage companies
Real estate investment trusts (REITsJ
Funding corporations
94.5
133.6
112.4
.5
.6
700.6
1,472.1
554.1
34.3
41U
18.7
31.1
211.0
102.6
148.0
115.0
.4
.5
806.5
1,570.3
687.0
29.3
483.9
19.1
37.1
248.6
113.6
150.0
140.5
.4
1.6
896.9
1,711.4
819.1
27.3
529.8
31.5
49.9
312.7
141.0
168.6
160.3
.6
1.8
995.9
1,825.8
998.4
35.3
554.5
36.4
73.7
373.8
104.6
148.4
128.3
.3
1.2
846.1
1,643.3
756.6
24.6
506.3
28.1
42.0
282.0
107.7
149.1
134.8
.4
1.1
866.1
1,679.0
781.2
26.1
513.7
285
45.4
291.0
113.6
150.0
140.5
.4
1.6
896.9
1.711.4
819.1
27.3
529.8
31.5
49.9
312.7
115.3
151.6
136.3
.4
1.8
894.7
1,740.0
829.8'
26.6
528.4'
33.0
54.9'
348.6
125.7
161.1'
144.3
.4
1.8
944.2
1,762.1
852.5'
35.3
557.8
34.3'
60.0'
3500
130.0
164.6
149.8
.5
1.9
955.8
1.790.7
908.8
3.3.6
532.7
35.2
66.7
363.4
141.0
168.6
160.3
.6
1.8
995.9
1.825.8
998.4
35.3
554.5
36.4
73.7
373.8
20,288.9'
20,596.3
21,118.9
All sectors
53 Total credit market debt, domestic and foreign
54
55
56
57
58
59
60
61
Open market paper
U.S. government securities
Municipal securities
Corporate and foreign bonds
Bank loans n.e.c
Other loans and advances
Mortgages
Consumer credit
17,182.2'
18,408.5'
19,735.0'
623.5
5,665.0
1,341.7
2,479.1
834.9
862.0'
4,392.1'
983.9
700.4
6,013.6
1,293.5
2.790.3
949.6
932.1'
4,6063'
1.122.8
803.0
6,390.0
1,296.0'
3,068.7
1,041.7'
994.5'
4.929.4'
1,211.6
1, Data in this table also appear in the Board's Z, 1 (780) quarterly statistical release, tables
L.2 through L.4. For ordering address, sec inside front cover.
21,118.9
979.4
6,626.5
1,366.2
3,338.4
1,171.3
1 094 4
5^277^2
1,265.4
19,039.9'
19,356.2'
19,735.0'
19,981.2'
753.6
6.183.1
1,297.9'
2,931.3
993.7'
965.0'
4,77(18'
1,144.5
777.4
6,278.2
1,281.7'
2,986.8
1,025.0'
985 4'
4,848.1'
1.173.5
803.0
6,390.0
1,296.0'
3,068.7
1,041.7'
994.5'
4,929.4'
1,211.6
861.1
6,464.5
1,305.2'
3,097.2'
1,078.6'
1,001.7'
LI 86.4
893.1
6,466.8
1,326.7'
3,183.6'
1,115.7'
1 021 81
5^076.2'
1,205.0
925.7
6,517.7
1,338.9
3,243.2
1,123.1
1 044 2
5J76.1
1.227.3
979.4
6.626.5
1,366.2
3,338.4
1,171.3
1 094 4
5^277.2
1,265.4
Flow of Funds
1.60
A41
SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1
Billions of dollars except as noted, end of period
1996
Transaction category or sector
1994
1995
1996
1997
1997
Q2
03
Q4
Ql
Q2
03
Q4
CREDIT MARKET DEBT OUTSTANDING 2
1 Total credit market assets
2
3
4
5
6
7
8
9
10
11
]2
13
14
15
16
]7
]8
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
Domestic nonfederal nonfinancial sectors
Household
Nonfinancial cotporate business
Nonfarm noncorporate business
State and local governments
Federal government
Rest of the world
Financial sectors
Monetary authority
Commercial banking
U.S.-chartered banks
Foreign banking offices in United States
Bank holding companies
Banks in U.S.-affilialed areas
Savings institutions
Credit unio.is
Bank personal trusts and estates
Life insurance companies
Other insurance companies
Private pension funds
State and local government retirement funds
Money market mutual funds
Mutual funds
Closed-end funds
Government-sponsored enterprises
Federally related mortgage pools
Asset-backed securities issuers (ABSs)
Finance companies
Mortgage companies
Real estate investment trusts (REITs)
Brokers and dealers
Funding corporations
17,182.2r
18,408.5r
19,735.0'
21.118.9
19,039.9r
19,356.2r
19,735.0r
19,981.2
20,2?'t.9
20,596.3
21,118.9
2.998.6'
1.941.9'
289.2
37.6
729.9
204.4'
1.254.8
12 724 3'
'368.2
3.254.3
2.869.6
337.1
18.4
29.2
920.8
246.8
248.0
1.482.6
446.4
656.9'
455.8'
459.0
718.8
86.0'
663.3
1.472.1
516.8
476.2
36.5
13.3
93.3
1093'
2,877.8'
1,904.9'
286.8
37.9
648. l r
204.2'
1,563.1
13,763.4'
380.8
3,520.1
3,056.1
412.6
18.0
33.4
913.3
263.0
229.2
1.581.8
468.7
718.3'
483.3'
545.5
771.3
96.4'
748.0
1.570.3
627.9
526.2
33.0
15.5
183.4
87.3'
2.905.0'
1,964.5'
291.0'
38.3
196.5'
1.953.6'
14,679.9'
393.1
3,707.7'
3,175.8
475.8
22.0
34.1'
933.2
288.5
233.1
1.654.3
491.2
764.8'
529.2'
634.3
820.2
98.7'
813.6
1,711.4
729.7
544.5
41.2
19.0'
167.7
104.5'
2,753.7
1,826.9
296.3
39,0
591.5
201.4
2,270.0
15.893.8
431.4
4.031.9
3,450.8
515.4
27.4
38.3
925.5
304.2
242.3
1,775.4
514.4
831.7
577.5
718.8
894.8
99.5
908.6
1,825.8
859.5
566.7
47.9
24.0
183.6
130.3
2.936.2'
1,934.5'
285.7
18.1
677.8'
199.2'
1.722.2'
14.182.3'
386.3
3,590.8
3,101.3
437.1
18.1
34.3
932.7'
276.9
229.4
1,596.7
480.7
746.7'
509.8'
594.7
809.0
97.6'
758.9
1,643.3
686.0
539.9
19.3
17.2
] *8.2
108 I'
2.896.5'
1,941.3'
273.8'
38.2
643.2'
197.5'
1.844.8'
14.417.4'
386.2
3.643.3
3.135.3
454.2
19.3
34.5
945.2'
282.6
231.3
1,627.0
484.2
757.1'
517.7'
606.6
818.3
98.1'
779.3
1.679.0
704.1
518.3
40.2
18.0
147.1
113.9'
2,905.0'
1,964.5'
291.0'
38.3
611.1'
196.5'
1,953.6'
14,679.9'
393.1
3,707.7'
3,175.8
475.8
22.0
34.1'
933.2
288.5
233.1
1,651.3
491.2
764.8'
529.2'
634.3
820.2
98.7'
813.6
1,711.4
729.7
544.5
41.2
19.0'
167.7
104.5'
2,825.6
1.911.7
281.8
38.5
593.6
196.9
2.051 1
14,907.6
397.1
3,775.7
3,218.1
499.5
22.5
35.6
931.9
291.2
235.2
1,680.2
491.2
777.9
531.6
659.0
838.3
99.3
824.3
1.740.0
734.5
552.4
41.1
20.3
164.1
122.5
2,785.6
1.873.7
272.3
38.6
600.9
198.3
2.125.3
15.179 7
4124
3.8568
3.2952
501.8
23.8
36.1
937.8
299.2
237.4
1,724.1
498.1
792.5
542.7
656.5
860.6
99.7
854.8
1.762.1
753.5
55.3 1
43.6
21.5
161.2
112.5
2.725.9
1.829.4
277.1
38.8
580.5
199.1
2.227.3
1 5.443.9
' 412.7
3.912.9
3.351.9
501.0
22 5
37.5
927.3
303.6
239.7
1.750.4
506.2
809.1
562.0
678.7
889.2
99.7
868.7
1.790.7
783.1
564.4
45.4
22.8
165.1
112.3
2,753.7
1,826.9
296.3
39.0
591.5
201.4
2.270.0
15.893.8
431.4
4.031.9
3.450.8
515.4
27.4
38.3
925.5
304 2
2423
1.775.4
514.4
831.7
577.5
718.8
894.8
99.5
908.6
1.825.8
859.5
566.7
47.9
24.0
183.6
130.3
17,182.2'
18,408.5'
19,735.0r
21,118.9
19,039.9'
19,356.2'
19,735.0r
19,981.2
20.288.9
20,596.3
21,118.9
359.2
290.7
1,229.3
"\279.7
476.9
745.3
660.0
1.852.8
305.7
550 2
5,600.5'
1,246.7
106.0
767.4
5,792.0'
48.9
9.2
18.2
527.0
198.9
1,286.2
2 475 5
711.4
1.048.7
814.3
3,013.5
461.9
650.8
7,453 9
1,390.5
140.1
1,050.7
6,441.0
61.4
10.2
18.2
385.2
250.0
1,212.3
2 340.2
511.1
809.5
692.0
2.129.9
318.6
562.3'
5.90) 1'
1.269.7
113.4
811.7
5.9J3.3'
557.2
838.1
687 6
2.211.6
317.8
577.1'
6,030.9'
1,263.0'
117.9'
K29.0
6,031.6'
53.7
9.7
18.2
438 1
240.8
1,245.1
2,377.0'
590.9'
891.1
700.3
2.342.4
358.1
59.1.8
6,313.8'
1.314.8'
120.0'
872.0
6.163.8'
46.3
9.2
18.3
485.2
210.2
1,220.0
2.427.1
606.0
950.8
713.3
2.41 '.5
380.0
603.7
6.414.7
l,300.f>
133.2
890.4
6.344.1
46 7
9.2
18.3
489.9
197.1
1,265.3
2,432.3
646.7
952.4
765.1
2,719.6
414.8
623.1
6.940.1
1.322.2
12K 9
%?.7
6.276.2
46 1
18.2
438 1
240.8
1,245.1
2 377 0'
590.9'
891.1
700.3
2,342.4
358.1
593.8
6,313.8'
1,314.8'
120.0'
872.0
6,163.8'
18.7
516.2
186.9
1.234.2
2.437.0
696.1
1.005.1
792.5
2,977.0
432.2
638.8
7.325.1
1,351.3
137.5
1.035.2
6.394.0
48 9
9.2
18.2
527.0
198.9
1,286.2
2,475.5
711.4
1.048.7
814.3
3.013.5
461.9
650.8
7.453.9
1,390.5
140.1
1,050.7
6,441.0
37,341.4' 40,762.9r
44,378.5'
48,859.7
42.379.7r
43,120.4r
44.378.5r
.•5,146.0
46.506.6
47,829.3
48,859.7
21.4
10.061.1
3,836.5'
21.1
12,958.6
4,087.6
22.0
9 105 0
3,727.1'
21.2
9.340.5
3.792.1'
21.4
10,061.1
3.836.5'
20.9
10,072.3
3.914.9
21.1
11.719.8
4,052.3
21.0
12.804.6
4.111.8
21.1
12 958 6
4,087.6
-7.4
-6.3
-6.0
-6.8
326.1
347.7'
354.1'
422.4
-28.3
-8.0
-11.6
-10 6
187 9
125.5'
113.4'
135.8'
93.2
61 0
67.7'
73.2'
-1,631.2 -1,222.4' -1.300 4' -1,414.2'
-6.9
398.6
-1.6
110.9
70 6
-1.382.7
-7.0
396.0
-8.1
153.4
72 5
-1.439.6
-6.8
415.6
-22.1
164.8
82.3
-1.448.0
-7.4
422.4
-28.3
187.9
93.2
-1.631.2
611 r
RELATION OF LIABILITIES
TO FINANCIAL ASSETS
34 Total credit market debt
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
Other liabilities
Official foreign exchange
Special drawing rights certificates
Treasury currency
Foreign deposits
Net interbank liabilities
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Mutual fund shares
Security credit
Life insurance reserves
Pension fund reserves
Trade payables
Taxes payable
Investment in bank personal trusts
Miscellaneous
53 Total liabilities
Financial assets not included in liabilities ( + )
54 Gold and special drawing rights
55 Corporate equities
56 Household equity in noncorporate business
57
58
59
60
(i\
62
Liabilities iwt identified as assets ( —)
Treasury currency
Foreign deposits
Net interbank transactions
Security repurchase agreements
Taxes payable
Miscellaneous
Floats not included in assets (—)
63 Federal government checkable deposits
64 Other checkable deposits
65 Trade credit
66 Total identified to sectors as assets
53 2
8.0
17 6
324.6
280.1
1,242.0
2 183 2
411.2
602.9
.149.5
1.477.3
279.0
505.3
4,880.1'
1,141.5
101.4
699.4
5,402.7'
21.1
6,237 9
3,419.1'
-5.4
276.2
-6.5
67.8'
48 8
-tn'.v
1.4
38.0
-245.8
47,820.7'
53.7
63.7
10.2
9.7
182
22.1
8.311.1
3.625.4'
-5.8
-6.8
301.2
354.1'
-9.0
-10.6
103.9'
135.8'
60 8
73.2'
-1.092.2' -1.414.2'
9.7
18.8
415.1
225.8
1,220.8
~> 357.9
9.2
-1.6
30.1
-308.7'
-8 1
26.2
-353.2
-3 4
31.8
-338.5
-1.7
23.1
-377.8'
-1.6
30.1
-308.7'
-9.7
25.6
-363.8
-6.8
27.9
- 390.0
-7.8
19.5
-419.9
-S.I
26.2
-353.2
53,620.4' 59,446.2'
67.225.5
56,268.0'
57,419.8'
59,446.2'
60,313.1
63.501.4
65,989.1
67,225.5
3.1
34.2
- 274.9
1. Data in this table also appear in the Board's L, 1 (780) quarterly statistical release, t
L. I and L.5. For ordering address, see inside front cover.
54.3
2. Excludes corporate equities and mutual fund shares.
A42
2.10
Domestic Nonfinancial Statistics • April 1998
NONFINANCIAL BUSINESS ACTIVITY
Selected Measures
Monthly data seasonally adjusted, and indexes 1992=100, except as noted
1998
1997
Measure
May
July
1 Industrial production 1
2
3
4
5
6
7
Market groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials
110.6
111.3
109.9
113.8
108.3
120.8
113.7
114.6
111.8
119.6
110.8
126.2
118.5r
119.6
114.4
128.7
115.1'
134.0'
117.7
118.6
113.9
126.8
114.9
132.4
117.6
118.6
113.5
127.7
114.7
133.0
81.7
81.4
81.3
118.1
119.2
113.9
128.6
114.6
134.9
Jan.
Sept.
119.2
120.5
114.6
130.9
115.3
134.9
125.6
126.5
119.1
120.3
114.5
130.6
115.2
136.1
120.2'
121.5'
115.9'
131.3
116.3'
136.7'
127.9
121.2
122.5
116.6
132.9
117.2
137.3
121.3
122.4
116.5
132.8
117.9
138.5
121.3
122.6
116.4
133.6
117.3
138.6
Industry groupings
127.9
8 Manufacturing
9 Capacity utilization, manufacturing (percent)
10 Construction contracts
3
11 Nonagricultural employment, total 4
12 Goods-producing, total
13
Manufacturing, total
14
Manufacturing, production workers
15
Service-producing
16 Personal income, total
17 Wages and salary disbursements
18
Manufacturing
19 Disposable personal income 5
20 Retail sales 5
Prices6
21 Consumer (1982-84=100)
22 Producer finished goods (1982=100)
2
82.3
82.1
130.8
139.0'
145.0'
143.0'
140.0
139.0
139.0
137.CC
138.0
135.0
131.0
114.9
98.3
97.5
99.0
120.2
158.2
150.9
130.4
158.7
151.2
117.2
99.0
97.2
98.4
123.0
167.0
159.8
135.7
166.2
158.6
119.9
100.3
97.6
98.9
126.2
176.8
170.6
142.0
174.4
165.6'
119.5
100.1
97.4
98.7
125.7
175.5
168.7
140.9
173.2
163.3
119.7
100.2
97.5
98.8
126.0
176.5
170.2
141.0
174.1
164.5
120.1
100.2
97.5
98.8
126.5
176.7
170.3
141.1
174.3
166.5
120.1
100.4
97.7
98.9
126.5
177.8
171.7
142.1
175.2
167.2
120.4
100.4
97.7
99.0
126.8
178.3
172.3
142.8
175.8
166.7
120.7
100.6
97.9
99.2
127.2
179.3'
173.5
144.4
176.6'
166.5
121.1
100.9
98.1
99.5
127.6
180.6
175.5
145.7
177.8
166.8
121.5
101.3
98.3
99.7
127.9
181.4
176.3
146.3
178.7
167.3
121.8
101.8
98.5
99.9
128.2
n.a.
152.4
127.9
156.9
131.3
160.5
131.8
160.1
131.6
160.3
131.6
160.5
131.3
160.8
131.7
161.2
131.8
161.6
132.4
161.5
131.8
161.3
131.1
161.6
130.2
1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For
the ordering address, see the inside front cover. The latest historical revision of the industrial
production index and the capacity utilization rates was released in December 1997. The recent
annual revision is described in an article in the February 1998 issue of the Bulletin. For a
description of the aggregation methods for industrial production and capacity utilization, see
"Industrial Production and Capacity Utilization: Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 (February 1997), pp. 67-92. For details about the
construction of individual industrial production series, 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.
2.11
81.9'
122.0'
82.8
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.
6. 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 and 5, and indexes for series
mentioned in notes 3 and 6, 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
1997
Category
June
July
Aug.
Sept.
1
HOUSEHOLD SURVEY DATA
1 Civilian labor force2
Employment
1
Nonagricultural industries3
3
Agriculture
Unemployment
4
Number
5
Rate (percent of civilian labor force)
126,297
136,206
136,404
136,439
136,406
136,864
137,169
137,493
121,460
3,440
123.264
3,443
126,159
3,399
126,003
3,389
126,209
3,452
126,368
3,379
126,339
3,422
126,583
3,327
127,191
3,384
127,392
3,385
127,764
3,319
7,404
5.6
7,236
5.4
6,739
4.9
6,814
5.0
6,633
4.9
6,657
4.9
6,678
4.9
6,496
4.8
6,289
4.6
6,392
4.7
6.409
4.7
117,191
119,523
122,257
122,056
122,440
122,492
122,792
123,083
123,512
123,867
124,225
18,524
18,457
574
5,400
18,538
573
18,514
574
18,555
573
18,553
6,132
6,261
5,637
6,289
28,108
6,899
34,377
19,447
6,426
28,788
7,053
35,597
19,655
5,625
6,443
28,823
7,058
35,684
19,719
28,864
7,068
35,702
19,804
18,590
574
5,650
6,497
28.970
7,108
35,945
18,634
27,565
6,806
33,117
19.305
18.518
574
5,622
6,434
28,713
7,034
35,522
19,639
18,672
574
5,742
6,470
29,218
7,154
18,715
574
5,834
6,519
29,272
7,176
36,354
19,781
132,304
ESTABLISHMENT SURVEY D A T A
6 Nonagricultural payroll employment 4
7
8
9
10
11
12
13
14
Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
Finance
Service
Government
581
5,160
5,627
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.
3. Includes self-employed, unpaid family, and domestic service workers.
576
5,642
6,473
28,902
7,082
35.850
19.714
19.749
572
5,682
6,495
29,132
7,132
36,102
19,763
36,265
19,772
4. Includes all full- and part-lime 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.
Selected Measures A43
2.12
OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1
Seasonally adjusted
Ql
Q2
Q4r
Q3
Ql
Output (1992=100)
Q2
Q3
Q4
Capacity (percent of 1992 output)
Ql
3
4
Q3
Q4'
Capacity utilization rate (percent)
1 Total industry
2 Manufacturing
Q2
152.3
82.4
82.7
81.5
81.6
Primary processing
Advanced processing4
116.7
128.0
117.7
129.7
118.5
132.1
119.6
135.3
135.8
160.6
136.9
163.2
138.0
165.7
139.2
168.1
85.9
79.7
86.0
79.5
85.8
79.8
85.9
80.5
5
6
7
8
9
10
11
12
13
Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Industrial machinery and equipment
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment
137.5
113.5
120.9
119.4
122.7
163.9
216.4
133.6
140.2
116.4
123.8
122.6
125.3
168.2
226.6
130.5
143.7
114.9
125.5
122.8
128.8
173.9
236.6
136.7
147.1
115.0
127.9
126.1
130.0
177.5
245.8
143.1
170.4
137.3
134.7
134.1
135.2
193.3
264.4
180.6
173.8
138.6
136.0
135.4
136.4
199.0
276.7
182.6
177.2
140.0
137.2
136.6
137.7
204.4
289.1
184.7
180.6
141.3
138.5
137.9
138.9
210.0
301.9
186.7
80.7
82.7
89.8
89.1
90.8
84.8
81.9
74.0
80.7
84.0
91.0
90.6
91.8
84.5
81.9
71.4
81.1
82.1
91.5
89.9
93.5
85.1
81.9
74.0
81.5
81.4
92.4
91.5
93.6
84.5
81.4
76.6
89.9
92.8
95.6
98.7
122.7
123.4
124.1
124.8
73.3
75.2
77.1
79.1
14
15
16
17
18
19
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
110.3
107.3
111.7
114.5
126.8
107.7
110.7
108.5
112.2
114.8
127.6
111.0
111.1
110.9
114.1
114.8
130.6
109.5
112.6
111.8
113.5
116.7
133.6
130.5
124.9
143.9
136.3
114.1
134.3
131.1
125.5
145.1
138.1
114.7
135.0
131.7
126.0
146.3
140.0
115.2
135.7
132.3
126.7
147.5
82.4
82.8
89.4
79.1
92.4
96.8
82.3
84.3
90.5
78.5
93.3
95.1
83.0
84.5
89.6
79.1
1157
82.6
82.3
89.4
79.5
93.0
94.4
95.2
105.4
110.8
111.5
106.0
111.7
111.3
106.4
114.0
114.2
105.3
115.7
116.4
117.6
125.8
124.2
117.9
126.3
124.6
118.1
126.7
125.0
118.2
127.1
125.4
89.6
88.1
89.8
89.9
88.5
89.3
90.1
90.0
91.4
89.1
91.0
92.8
Jan.
Aug.
Sept.
Oct.'
Nov.r
Dec.
Jan.p
20 Mining
21 Utilities
22
Electric
Previous cycle5
High
Low
High
Low
Latest cycle
High
Low
Capacity utilization rate (percent)
72.6
87.3
71.1
85.4
78.1
82.4
82.8
82.7
83.0
83.2
83.3
70.5
86.9
69.0
85.7
76.6
81.4
81.8
81.6
81.9
82.3
82.3
91.2
87.2
68.2
71.8
88.1
86.7
66.2
70.4
88.9
84.2
77.7
76.1
85.5
79.6
85.8
80.0
85.7
79.7
85.7
80.2
86.0
80.7
86.1
80.6
86.1
80.4
88.7
100.2
105.8
90.8
68.9
61.2
65.9
66.6
59.8
87.7
87.9
94.2
95.8
91.1
63.9
60.8
45.1
37.0
60.1
84.6
93.6
92.7
95.2
89.3
73.1
75.5
73.7
71.8
74.2
80.4
81.4
88.9
88.9
89.1
81.4
82.5
91.4
89.1
94.3
81.0
80.7
91.5
90.8
92.5
81.1
80.1
92.3
91.9
92.8
81.8
82.7
93.0
92.1
94.1
81.6
81.4
91.9
90.4
93.8
81.3
80.7
91.9
90.5
93.8
96.0
89.2
93.4
74.3
64.7
51.3
93.2
89.4
95.0
64.0
71.6
45.5
85.4
84.0
89.1
72.3
75.0
55.9
85.0
81.1
74.2
86.1
81.9
75.2
84.2
81.0
76.2
84.8
80.9
75.0
84.2
82.0
78.1
84.5
81.4
76.7
83.8
81.1
75.7
78.4
67.6
81.9
66.6
87.3
79.2
72.6
76.9
77.9
78.2
78.6
80.6
81.2
87.8
91.4
97.1
87.6
102.0
96.7
71.7
60.0
69.2
69.7
50.6
81.1
87.5
91.2
96.1
84.6
90.9
90.0
76.4
72.3
80.6
69.9
63.4
66.8
87.3
90.4
93.5
86.2
97.0
88.5
80.7
77.7
85.0
79.3
74.8
85.1
82.6
82.1
88.8
80.2
93.2
93.9
82.2
84.1
90.8
78.3
92.0
95.2
82.3
84.5
90.1
78.8
93.6
95.4
82.8
84.5
89.2
79.3
91.2
96.2
83.0
85.3
89.7
78.9
93.0
93.9
83.1
83.9
90.0
79.1
83.1
84.6
89.9
79.1
95.5
96.0
94.3
96.2
99.0
88.2
82.9
82.7
96.0
89.1
88.2
80.3
75.9
78.9
88.0
92.6
95.0
87.0
83.4
87.1
88.2
89.5
91.0
90.0
89.2
90.5
90.1
90.8
92.5
89.6
92.0
94.3
89.1
89.9
91.5
88.6
91.1
92.6
1 Total industry
2 Manufacturing
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
3
Primary processing
Advanced processing4
Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Industrial machinery and
equipment
Electrical machinery
Motor vehicles and parts....
Aerospace and miscellaneous
transportation equipment
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
20 Mining
21 Utilities
22 Electric
1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For
the ordering address, see the inside front cover. The latest historical revision of the industrial
production index and the capacity utilization rates was released in December 1997. The recent
annual revision is described in an article in the February 1998 issue of the Bulletin. For a
description of the aggregation methods for industrial production and capacity utilization, see
"Industrial Production and Capacity Utilization: Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 (February 1997). pp. 67-92. For details about the
construction of individual industrial production series, see "Industrial Production: 1989
Developments and Historical Revision," Federal Reserve Bulletin, vol 76 (April 1990), pp.
187-204.
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.
3. Primary processing includes textiles; lumber: paper; industrial chemicals; synthetic
materials; fertilizer materials; petroleum products; rubber and plastics; stone, clay, and glass;
primary metals, and fabricated metals.
4. Advanced processing includes foods; tobacco; apparel; furniture and fixtures; printing
and publishing; chemical products such as drugs and toiletries; agricultural chemicals; leather
and products; machinery; transportation equipment; instruments; and miscellaneous manufactures.
5. Monthly highs, 1978-80; monthly lows, 1982.
6. Monthly highs, 1988-89; monthly lows, 1990-91.
A44
2.13
Domestic Nonfinancial Statistics • April 1998
INDUSTRIAL PRODUCTION
Monthly data seasonally adjusted
Group
Indexes and Gross Value'
1992
proportion
1998
1997
avg.
Apr.
May
July
Aug.
Sept.
Oct.'
Nov.'
Dec
Index (1992 = 100)
MAJOR MARKETS
1 Total index
2 Products
3
Final products
4
Consumer goods, total
5
Durable consumer goods
6
Automotive products
7
Autos and trucks
8
Autos, consumer
9
Trucks, consumer
10
Auto parts and allied goods
11
Other
12
Appliances, televisions, and air
conditioners
13
Carpeting and furniture
14
Miscellaneous home goods
15
Nondurable consumer goods
16
Foods and tobacco
17
Clothing
18
Chemical products
19
Paper products
20
Energy
21
Fuels
22
Residential utilities
100.0
124.5
121.3
122.1
122.5
123.1
123.3
123.5
124.5
125.2
125.6
126.5
127.4
127.9
127.9
60.5
118.5
119.6
114.4
131.3
129.9
136.5
115.2
159.1
119.3
132.4
116.0
116.8
113.2
128.0
127.4
134.8
114.5
160.0
115.5
128.5
116.5
117.2
113.1
129.4
128.5
135.1
116.5
158.6
117.9
130.1
116.9
117.9
113.4
130.7
129.0
135.6
117.6
158.5
118.4
132.0
117.2
118.0
113.4
127.4
122.3
124.4
110.7
142.7
118.2
131.4
117.7
118.6
113.9
128.8
124.6
127.6
112.4
147.3
119.1
132.1
117.6
118.6
113.5
129.8
126.7
130.3
110.8
154.2
120.3
132.3
118.1
119.2
113.9
128.1
120.3
120.2
113.0
131.9
119.3
134.4
119.2
120.5
114.6
132.1
131.6
137.6
118.6
161.2
121.8
132.5
119.1
120.3
114.5
131.9
132.8
140.9
119.9
166.5
120.1
131.1
120.2
121.5
115.9
131.4
131.2
139.7
115.2
168.6
117.9
131.5
121.2
122.5
116.6
136.6
138.4
147.8
120.3
179.8
123.8
135.2
121.3
122.4
116.5
134.8
134.0
142.8
113.9
176.0
120.2
135.5
121.3
122.6
116.4
135.4
132.8
139.6
116.0
167.7
122.0
137.4
168.5
117.2
120.0
110.2
109.4
95.9
119.2
109.4
111.2
109.4
157.3
114.1
119.0
109.4
109.1
96.5
118.0
106.5
110.5
105.7
112.5
164.1
114.3
119.1
109.0
109.2
95.6
117.3
107.1
108.3
106.6
108.7
166.9
116.7
1201
109.1
110.0
96.1
115.9
107.8
107.3
108.2
106.4
164.2
116.7
1201
109.9
109.1
96.5
118.4
108.2
111.9
109.6
112.6
166.5
117.7
120 2
110.1
108.9
95.8
119.3
108.9
112.8
111.3
113.0
165.4
119.0
120 3
109.4
108.1
95.4
119.1
109.8
109.7
111.5
108.3
174.8
116.4
122 1
110.3
109.6
95.8
117.3
110.8
112.4
108.8
113.7
169.8
117.7
1198
110.3
108.9
96.0
119.4
109.8
112.8
111.0
113.2
166.0
116.2
1194
110.2
108.6
96.0
119.4
110.1
112.4
110.8
112.8
169.4
116.5
1186
112.1
109.7
96.4
123.0
111.3
116.2
112.0
117.8
176.9
122.9
119 2
111.7
110.7
95.1
122.3
111.6
112.1
106.5
114.4
177.3
117.8
122 3
112.0
111.1
95.4
121.9
110.1
114.4
110.4
116.0
183.6
121.2
121.7
111.7
112.0
94.7
122.8
109.1
110.5
112.2
109.2
123.1
134.9
157.8
333.8
130.0
103.3
116.4
129.7
75.5
138.4
137.7
124.6
136.5
160.9
341.5
129.8
105.2
118.2
130.8
75.6
143.5
140.7
125.8
137.5
161.0
348.8
130.6
107.7
121.4
132.6
75.7
154.8
139.4
126.0
137.9
163.0
358.4
131.6
104.6
112.5
134.4
75.4
151.4
142.9
126.8
139.0
164.4
365.3
131.5
106.7
114.6
135.2
75.6
150.7
141.9
127.7
140.2
166.8
375.8
131.7
107.3
113.6
136.3
76.0
150.9
139.1
128.6
141.6
169.3
391.6
133.7
106.9
111.5
136.3
74.9
152.1
143.5
130.9
144.6
171.1
407.1
135.8
113.3
120.3
137.9
75.0
153.2
139.5
130.6
144.4
172.9
414.6
133.8
114.2
120.2
135.1
74.7
153.1
137.2
131.3
145.5
174.3
420.3
135.9
113.0
117.0
137.5
74.7
149.1
136.9
132.9
147.5
175.3
426.9
135.7
119.9
128.2
137.7
74.7
150.0
138.1
132.8
147.9
175.5
435.4
137.4
119.1
120.1
136.6
74.6
145.9
132.4
133.6
148.2
175.7
442.5
136.6
121.2
122.6
136.5
75.0
155.0
46.3
29.1
6.1
2.6
1.7
.9
.7
.9
3.5
1.0
.8
1.6
23.0
10.3
2.4
4.5
2.9
2.9
.8
2.1
23
24
25
26
27
28
29
30
31
32
33
Equipment
Business equipment
Information processing and related
Computer and office equipment
Industrial
Transit
Autos and trucks
Other
Defense and space equipment
Oil and gas well drilling
Manufactured homes
17.2
13.2
5.4
1.1
4.0
2.5
1.2
1.3
3.3
.6
.2
128.7
141.8
168.1
385.2
133.2
111.I
119.4
135.0
75.3
149.7
139.1
34
35
36
Intermediate products, total
Construction supplies
Business supplies
14.2
5.3
8.9
115.1
121.8
111.1
113.5
119.1
110.2
114.1
121.7
109.6
114.1
122.3
109.2
114.7
121.8
110.6
114.9
122.2
110.6
114.7
122.2
110.2
114.6
121.2
110.6
115.3
122.7
111.0
115.2
120.4
112.2
116.3
121.3
113.4
117.2
123.4
113.5
117.9
123.8
114.4
117.3
124.2
113.2
37 Materials
38
Durable goods materials
39
Durable consumer parts
40
Equipment parts
41
Other
42
Basic metal materials
43
Nondurable goods materials
44
Textile materials
45
Paper materials
46
Chemical materials
47
Other
48
Energy materials
49
Primary energy
50
Converted fuel materials
39.5
20.8
4.0
7.6
9.2
3.1
8.9
1.1
1.8
3.9
2.1
9.7
6.3
3.3
134.0
158.1
139.1
221.8
125.5
120.6
112.9
109.3
112.6
114.9
110.3
103.9
101.7
108.2
129.7
150.2
136.2
201.1
122.6
116.7
111.6
107.0
110.4
114.9
107.7
103.6
101.2
108.0
131.0
152.2
136.3
206.1
123.5
118.3
112.6
108.0
112.0
115.0
110.1
103.8
102.5
106.2
131.3
153.0
135.9
210.0
123.2
118.2
112.5
106.3
112.5
114.8
110.4
103.4
101.9
106.2
132.5
155.1
137.1
IMA
124.7
118.8
113.0
109.4
112.6
115.4
109.7
103.7
101.7
107.6
132.4
155.4
134.7
216.7
124.5
119.9
111.8
106.1
112.6
113.8
109.5
103.7
102.1
106.8
133.0
156.9
136.2
220.0
125.0
121.2
111.9
108.1
110.9
113.8
110.8
103.2
101.0
107.3
134.9
159.3
139.2
224.6
125.9
121.1
113.5
112.3
113.8
115.1
110.1
104.6
102.3
109.0
134.9
160.3
140.3
227.6
126.0
121.8
112.3
108.4
114.3
113.9
108.6
103.9
102.4
106.8
136.1
161.3
140.7
229.6
126.6
121.7
113.3
111.4
112.7
115.6
109.5
105.5
102.2
111.8
136.7
163.2
141.8
233.3
127.8
122.5
113.1
111.9
113.4
115.0
109.0
104.7
101.7
110.6
137.3
164.9
142.3
238.0
128.5
124.8
113.8
111.0
112.3
115.2
113.7
103.4
100.8
108.3
138.5
166.2
145.6
240.2
128.5
122.5
114.8
112.7
113.9
116.1
113.6
104.5
101.4
110.4
138.6
166.7
143.4
243.5
128.8
122.9
115.0
112.8
114.7
116.3
113.4
103.5
101.4
107.7
97.1
95.1
124.3
123.8
121.1
120.7
121.9
121.5
122.3
121.9
123.2
122.7
123.4
123.0
123.6
123.1
124.8
124.3
125.1
124.6
125.4
124.8
126.5
125.9
127.1
126.5
127.8
127.1
127.8
127.2
98.2
121.9
113.2
114.8
119.1
112.0
113.5
119.8
111.8
113.7
120.2
112.1
114.2
120.7
112.8
113.6
120.9
113.1
114.0
121.1
112.5
114.0
122.0
113.5
114.1
122.6
113.4
114.9
122.9
113.0
114.7
123.8
114.6
115.9
124.6
114.9
117.2
125.1
115.1
116.8
125.1
115.1
117.2
137.1
138.6
139.5
141.0
141.9
143.4
145.2
147.5
147.3
149.0
149.8
151.2
123.8
137.9
125.1
139.6
126.0
140.1
126.0
141.6
126.9
141.4
127.7
142.5
128.6
144.6
131.2
144.8
130.8
145.8
131.8
147.0
133.6
148.3
133.7
149.5
SPECIAL AGGREGATES
51 Total excluding autos and trucks
52 Total excluding motor vehicles and parts
53 Total excluding computer and office
equipment
54 Consumer goods excluding autos and trucks
55 Consumer goods excluding energy
56 Business equipment excluding autos and
trucks
57 Business equipment excluding computer and
office equipment
58 Materials excluding energy
27.4
26.2
12.1
29.8
129.0
143.6
133.8
150.0
Selected Measures
2.13
INDUSTRIAL PRODUCTION
Indexes and Gross Value1—Continued
1992
proportion
SIC2
code
Group
A45
Apr.
July
May
Sept.
Oct.r
Nov'
Dec.
Index (1992 = 100)
MAJOR INDUSTRIES
59 Total index
122.1
122.5
123.1
123.3
123.5
124.5
125.2
125.6
126.5
127.4
127.9
60 Manufacturing
61 Primary processing
62
Advanced processing
85.4
26.5
58.9
127.0
118.1
131.4
123.5
115.8
127.2
124.4
116.9
128.1
124.9
in.2
128.6
125.4
117.7
129.2
125.7
117.7
129.6
126.1
117.7
130.2
126.9
118.3
131.2
127.9
118.5
132.5
128.0
118.6
132.7
129.1
118.9
134.1
130.4
119.8
135.7
130.9
120.2
136.2
131.2
120.5
136.6
63
64
65
66
45.0
20
1.4
142.3
115.0
136.1
111.4
119.7
137.8
114.2
120.6
138.7
114.9
120.7
139.5
115.9
123.5
140.1
116.4
123.3
141.2
117.0
123.5
142.4
116.1
124.2
144.3
115.4
144 4
113.3
145.5
112.9
147.6
116.9
148.3
115.3
122.7
148.8
114.8
126.8
2.1
3.1
1.7
.1
1.4
5.0
120.5
124.5
122.7
115.9
126.6
122.9
119.2
119.4
118.8
111.9
120.0
120.6
118.9
121.6
119.9
112.4
123.5
121.7
119.5
121.8
119.6
114.0
124.5
122.1
121.1
122 3
121.2
115.1
123.5
122.5
119.4
124.2
123.9
115.4
124.6
122.7
120.0
124 9
122.6
114.9
127.7
121.9
120.9
125.2
122.2
115.5
128.8
122.4
120.5
125.5
121.8
116.1
129.9
122.8
121.2
125.9
124.5
119.2
127.7
122.7
121.0
127.4
126.4
117.7
128.6
124.4
122.1
128.7
127.0
120.9
130.7
124.7
123.2
127.6
125.0
119.2
130.6
125.9
124.2
128.0
125.6
117.8
131.0
126.1
171.3
162.8
164.0
165.1
167.8
168.0
168.8
172.2
175.9
173.7
176.5
176.8
179.1
179.2
357
36
37
371
37IPT
1.8
7.3
9.5
4.9
2.6
381.9
231.5
115.5
137.0
128.3
328.6
211.1
110.9
133.4
126.7
336.6
217.4
111.4
133.3
127.2
344.2
220.8
112.3
134.0
127.8
354.1
223.7
110.7
129.7
117.8
361.4
226.3
110.8
129.2
120.6
372.3
229.7
113.0
132.5
122.4
388.5
235.5
112.2
130.0
115.0
403.9
236.8
117.0
138.9
129.5
412.0
237.5
118.8
141.2
132.3
418.0
240.8
118.3
139.6
130.4
425.0
247.5
121.7
145.9
137.7
434.1
249.2
122.1
143.8
1326
441.6
252.0
121.9
142.5
130.6
372-6,9
38
39
4.6
5.4
1.3
94.4
108.0
125.9
88.9
105.9
124.0
89.9
107.2
125.0
91.0
106.5
124 7
92.0
106.6
125.1
92.7
107.6
125.5
93.8
107.9
126.0
94.6
108.0
127.0
95.5
109.2
126.7
96.8
108.9
126.1
97.3
109.7
126.5
98.1
110.0
126.2
100.7
108.9
128.7
1016
109.6
128.5
110.4
109.4
113.0
107.0
99.5
111.9
103.3
114.6
108.0
125.0
76.0
110.5
110.0
114.2
108.0
100.1
112.4
103.6
113.6
108.0
125.5
76.6
110.8
109.2
113.0
109.2
99.8
112.4
104.4
115.2
110.1
124.4
75.9
110.7
109.2
111.5
107.2
99.8
112.6
104.5
114.5
111.4
125.4
75.3
110.5
108.8
109.0
109.1
99.6
111.7
104.1
114.6
111.3
125.6
74.0
110.9
110.0
110.5
110.7
99.7
114.2
104.1
114.3
108.9
126.0
74.0
111.0
108.9
112.5
110.7
99.1
114.4
104.4
114.5
109.7
127.9
71.2
111.3
108.6
112.0
111.4
99.1
113.7
105.1
115.6
110.1
127.6
70.9
112.2
109.2
118.8
111.6
99.3
112.8
106.7
116.7
111.2
127.4
72.4
112.6
110.8
116.1
112.8
98.4
113.6
107.5
116.4
108.7
129.5
70.9
113.0
111.2
117.3
111.1
99.2
114.1
107.2
117.0
110.6
129.9
71.4
113.3
112.7
113.6
112.2
98.9
114.3
106.2
117.4
111.5
130.0
70.8
100.0
79
SO
Durable goods
Lumber and products
Furniture and fixtures
Stone, clay, and glass
products
Primary metals
Iron and steel
Raw steel
Nonferrous
Fabricated metal products. .
Industrial machinery and
equipment
Computer and office
equipment
Electrical machinery
Transportation equipment. .
Motor vehicles and parts
Autos and light trucks
Aerospace and
miscellaneous
transportation
equipment
Instruments
Miscellaneous
81
82
83
84
85
86
87
8&
89
90
91
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
40.4
9.4
1.6
1.8
2.2
3.6
6.7
9.9
1.4
3.5
.3
111.2
109.6
113.2
109.6
99.6
112.9
104.9
115.2
109.5
126.5
73.7
110.2
109.3
112.0
107.0
IO0.5
110.8
103.2
115.2
107.0
123.3
76.5
92 Mining
93 Metal
94 Coal
95 Oil and gas extraction
96 Stone and earth minerals . . . .
6.9
.5
1.0
105.8
107.0
109.9
103.1
118.3
103.7
105.5
107.4
101.1
115.0
106.0
106.2
110.4
102.8
123.5
106.7
106.4
107.0
104.3
123.6
105.5
105.3
105.4
103.8
116.8
106.7
105.9
115.9
103 4
1182
105.7
109.9
107.4
102.9
120.9
106.5
105.2
112.1
103.9
117.8
106.3
106.0
107.7
104.1
119.9
106.5
105.3
109.5
104.3
117.7
105.9
111.1
109.6
103.1
116.2
105.3
113.6
111.2
101.9
116.3
104.8
104.5
116.8
100.9
117.0
106.3
105.0
116.2
102.9
118.4
7.7
6.2
1.6
112.6
113.3
110.5
112.5
112.9
111.2
110.3
111.0
107.9
109.6
110.6
105.4
112.5
112.7
111.5
1118
110.4
117.1
110.9
110.7
111.9
113.8
113.8
113.5
113.0
113.1
112.5
115.1
115.7
112.7
116.9
118.1
111.9
114.2
114.7
112.5
115.9
116.3
114.5
111.3
112.9
105.1
80.5
126.4
122.9
123.9
124.3
125.2
125.5
125.7
126.7
127.2
127.3
128.4
129.4
130.1
130.5
83.6
124.1
120.9
121.8
122.2
122.7
122.9
123.2
123.9
124.8
124.9
125.9
127.1
127.6
127.9
67
68
69
70
71
72
73
74
75
76
77
78
97 Utilines
98 Electric
99 Gas
33
331,2
331PT
33.1-6,9
34
35
491.493PT
492.493PT
SPECIAL A G G R E G A T E S
100 Manufacturing excluding motor
vehicles and parts
101 Manufacturing excluding office
and computing machines . .
Gross value (billions of 1992 dollars, annual rates)
MAJOR MARKETS
102 Products, total
2,001.9 2,373.4 2332.0
2,344.1
2.355.4 2,353.4 2,365.8
103 Final
104 Consumer goods
1,552.1 1.855.8 1.818.2
1.049.6 1,195.9 1,185.8
659.7
631.8
502.5
514.2
449.9
518.3
1,827.3
1,187.6
639.2
517.0
1,838.7
1,191.4
646.8
517.2
105
Equipment. . . , , , , . , . ,
106 Intermediate
I. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For
the ordering address, see the inside front cover The latest historical revision of the industrial
production index and the capacity utilization rates was released in December 1997. The recent
annual revision is described in an article in the February 1998 issue of the Bulletin. For a
description of the aggregation methods for industrial production and capacity utilization, see
"Industrial Production and Capacity Utilization: Historical Revision and Recent Develop-
1,832.9
1,187.7
644.8
520.6
1,844.4
1,194.1
649.8
521.7
2365.3 2,368.4 2,402.0 2,396.9 2.416.1 2,440.6 2,439.6 2,444.1
1,844.6 1,849.1 1,879.3 1,875.6
1,190.2 1,191.0 1,205.2 1.203.3
654.1
672.3
657.8
674.0
521.0
519.9
523.7
522.2
1.890.6
1,215.9
674.5
526.5
1,909.7
1,222.7
687.1
531.9
1.906.2 1,913.8
1,221.4 1,224.4
689.5
684.8
531.4
534.2
ments," Federal Reserve Bulletin, vol. 83 (February 1997), pp. 67-92, For details about the
construction of individual industrial production series, see "Industrial Production: 1989
Developments and Historical Revision,"' Federal Rcsene Bulletin, vol. 76, (April 1990), pp
187-204.
2. Standard industrial classification.
A46
2.14
Domestic Nonfinancial Statistics • April 1998
HOUSING AND CONSTRUCTION
Monthly figures at seasonally adjusted annual rates except as noted
1997
Item
1995
1996
1997
Apr.
Mar.
May
June
July
Aug.
Sept.
Oct.'
Nov.'
Dec.
Private residential real estate activity (thousands of units except is noted)
N E W UNITS
Permits authorized
One-family
Two-family or more
Started
One-family
Two-family or more
Under construction at end of period
One-family
Two-family or more
Completed
One-family
Two-family or more
Mobile homes shipped
1,333
997
335
1,354
1.076
278
775
554
221
1,319
1,073
246
341
1,426
1,070
356
1.477
1,161
316
819
584
235
1,407
1,124
283
361
1,442
1,056
387
1,474
1,133
341
831
570
261
1.403
1,123
280
354
1 457
1,034
423
1,477'
1,139'
338'
814
566
248
1,471
1,156
315
354'
1.442
1,060
382
1.480'
1.134'
346'
812
563
249
1.460
1.158
302
366'
1,432
1,053
379
1,404'
1,095'
309'
815
564
251
1,388
1,101
287
354'
1,402
1,049
353
1.502'
1,132'
370'
829
566
263
1,318
1,096
222
353'
1.414
1,030
384
1,461'
1,144'
317'
837
571
266
1.320
1.069
251
356'
1.397
1,027
370
1,383'
1,076'
307'
836
569
267
1,325
1,053
272
354'
1,460
1.065
395
1.501'
1.174'
327'
842
571
271
1,431
1,142
289
351'
1,487
1,087
400
1,529
1,124
405
854
576
278
1.375
1,058
317
349
1,440
1,061
379
1,523
1,167
356
860
576
284
1,409
1,140
269
352
1,482
1,071
411
1.538
1,118
420
Merchant builder activity in
one-family units
14 Number sold
15 Number for sale at end of period1
667
374
757
326
800
291
825
287
765
291
764
288
802
288
812
288
798
286
816'
285'
785
285
857
283
777
284
133.9
158 7
140.0
166 4
145.5
175 7
148.0
172 7
150.0
179 5
141.0
170 7
145.0
179 4
145.9
175 5
144.0
170 7
146.3'
177 5'
142.0
173 6
144.0
174 8
142.6
177 8
3 812
4 087
4 040'
4 190'
4 120'
4 180
4 280'
4 300'
4 380
4 390
4 370
113.1
139.1
118.2
145.5
120.7
150.4
123.1
153.1
127.2
158.4
126.5
157.6
127.5
159.1
125.8
155.4
124.4
154.7
124.3
155.0
125.9
157.5
I
2
3
4
5
6
7
8
9
10
11
12
13
Price of units sold {thousands
of dollars)
16 Median
n.a.
353
EXISTING UNITS (one-family)
Price of units sold (thousands
of dollars)2
19 Median
20 Average
124.1
154.2
120.0
147.5
Value of new construction (millions of dollars)^
CONSTRUCTION
21 Total put in place
534,463
22 Private
23 Residential
24
Nonresidential
25
Industrial buildings
26
Commercial buildings
27
Other buildings
28
Public utilities and other
407,370
231,230
176,140
32,505
68,223
27,089
48,323
29 Public
30
Military
31
Highway
32 Conservation and development
33
Other
127,092
2,983
36.319
6.391
81.399
599,795
593,908
596,907
595,763
594,195
603,002
603,684
605,748
611,805
611,294
611,753
435,929
246,659
189,271
31,997
74,593
30,525
52,156
461,146
259,765
201,381
30,574
80,587
36,926
53,294
452,728
253,974
198,754
30,520
81.015
36,012
51,207
457,604
259.917
197.687
29.331
76,545
38.229
53,582
459,882
259,662
200,220
30,501
78.670
37,738
53,311
456,927
257,277
199,650
31,046
79,009
35,775
53,820
464,326
258,803
205.523
31,796
82,346
36.672
54.709
465,236
259,958
205,278
31,480
81.552
37,274
54,972
468,822
263,799
205.023
30,675
80.551
38.729
55,068
469,567
265,717
203,850
29.964
81.424
37,694
54,768
469,369
268,074
201,295
29,449
79,597
37,956
54,293
472,860
271,936
200,924
28,092
81,253
37,210
54,369
131,250
2,541
37.898
5.807
85.005
138,649
2,550
41,177
5,475
8°,446
141,180
139,304
2,232
2,408
41,473
42,356
6,114
5,134
91.361 • 89.406
135,882
2,548
40,694
5,242
87,398
137,268
2,580
41,531
4,952
88,205
138.676
2.738
41.087
5.002
89.849
138,448
2,767
41,715
5.469
88.497
136,926
2,451
40,126
6,177
88,172
142,238
2,794
39,400
4,899
95,145
141,925
2,696
44,413
5,312
89,504
138,893
2,283
42,404
5,870
88,336
567,179
1. Not a! 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 Institute and seasonally adjusted by the Census Bureau, and (2) sales and pnces of existing units, which are
published by the National Association of Realtors. AH back and current figures are available
from the originating agency. Permit authorizations are those reported to the Census Bureau
from 19,000 jurisdictions beginning in 1994.
Selected Measures
2.15
A47
CONSUMER A N D PRODUCER PRICES
Percentage changes based on seasonally adjusted data except as noted
Change from 12
months earlier
Change from 3 months earlier
(annual rate)
Item
Change from 1 month earlier
Index
level,
Jan.
1998'
1997'
1997
Jan.
1998
Jan.
June
Sept.
Sept.
Oct.
Nov.
.1
.9'
.2
.3'
-.2'
.2
.1
.3
.1'
.1
.6'
-.1'
.1
-.1
-.2
-.3'
-.6'
-.1
-.1
Dec.
CONSUMER PRICES'
(1982-84=100)
1 All items
3.0
2 Food
3 Energy items
4 All items less food and energy.
5
Commodities
6
Services
3.6
7.9
2.5
.9
3.3
2.2
-6.5
2.2
.4
3.0
1.5
1.5
2.3
-.3
-1.4
2.2
.8
3.1
2.1
-11.8
2.6
.6
3.1
2.8
8.3
1.7
-.3
2.6
.1
1.5
-7.7
2.4
.6
3.3
.r
sr
.1
r
.2'
.0'
-1.8'
.2
.ff
.3'
161.6
.3
-2.4
.2
.1
159.9
105.9
171.2
142.0
187.9
.0'
-.2
-.7
-.4
-3.7
-.1
-.1
130.2
132.8
77.4
145.6
138.0
-.3'
-.1
-.5
-.1
124.5
1343
Xf
-12.6
-1.4'
-3.3
-7.3
-2.2
105.4
77.3
150.1
.2
PRODUCER PRICES
(1982=100)
7 Finished goods
8
Consumer foods
9
Consumer energy
10 Other consumer goods
11 Capital equipment
Intermediate materials
12 Excluding foods and feeds
13 Excluding energy
Crude materials
14 Foods
15 Energy
16 Other
-1.8
-1.0
-10.5
.3
-.7
-3.0
-3.5
-13.0
-.6
-.9
1.2
-1.5
6.0
1.7
.6
-1.2
.9
-6.1
.0
-1.7
.4'
.0'
-11.8
.6
.0
-1.5
.]
-1.3
.6
-1.6
.3
.6
.6
-.6
.0
.2'
-.5
-2.2
52.9
-3.4
-6.1
-35.3
-4.2
-4.1
-75.5
12.5
-10.8
11.3
-3.7
-5.0
21.8
.3
3.3
1.0
-7.9
-.3'
4.4'
-.7'
2.5
2.6
10.2
-1.8
.0
1. Not seasonally adjusted.
2. Figures for consumer prices are for all urban consumers and reflect a rental-equivalence
measure of homeownership.
.If
.5'
9.3r
.2'
.3'
5.0
SOURCE. U.S. Department of Labor. Bureau of Labor Statistics.
A48
2.16
Domestic Nonfinancial Statistics • April 1998
GROSS DOMESTIC PRODUCT AND INCOME
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
1997
1996
Account
1995
1997
1996
Q4
Ql
Q2
Q3
Q4
GROSS DOMESTIC PRODUCT
1 Total
7 265 4
7 636 0
8 083.4
7 792 9
7 933 6
8 034 3
8 124.3
8 241 5
4,957.7
608.5
1,475.8
2 873 4
5,207.6
634.5
1,534.7
3 038 4
5,488.6
659.4
1.592.7
3 216 5
5.308.1
638.2
1,560.1
3 109 8
5.405.7
658.4
1,587.4
3 159.9
5,432.1
644.5
1,578.9
3 208 7
5,527.4
667.3
1.600.8
3 259 3
5,589.3
667.6
1,603.9
3 3179
1,038.2
1,008.1
723.0
200.6
522.4
285.1
1,116.5
1,090.7
781.4
215.2
566.2
309.2
1,237.6
1,173.0
845.4
230.2
615.2
327.5
1,151.1
1,119.2
807.2
227.0
580.2
312.0
1,193.6
1.127.5
811.3
227.4
583.9
3! 6.2
1,242.0
1,160.8
836.3
226.8
609.5
324.6
1.250.2
1,201.3
872.0
232.9
639.1
329.3
1,264.5
1,202.4
862.3
233.7
628.5
340.1
30.1
38.1
25.9
23.0
64.6
57.8
31 9
28.7
66.1
62.2
81.1
74.9
48.9
40.9
62.1
53.0
-86.0
818.4
904 5
-94.8
870.9
965 7
-96.7
958.8
1 055 5
-88.6
904.6
993 ?
-98.8
922.2
1 021 0
-88.7
960.3
1 049 0
-111.3
965.8
1 077 1
-87.9
986.9
1 074 8
1.355.5
509.6
846.0
1.406.7
520.0
886.7
1,453.9
524.8
929.1
1.422.3
517.6
904.7
1,433.1
516.1
917.0
1 449 0
526.1
923.0
1,457.9
525.7
932.3
1.475.6
531.1
944.4
7,235 1
2,637.9
1,133.9
1,503.9
3,980.7
616 8
7 610 2
2.759.3
1.212.0
1,547.3
4.187.3
663 6
8,018.8
2,880.6
1,284.9
1,595.7
4,432.8
705 5
7,761.0
2,795.0
1,233.5
1,561.5
4,282.7
683 3
7,867.4
2,838.4
1,248.0
1,590.4
4,338.2
690 8
7,953.2
2,854.9
1,275.3
1,579.6
4,400.1
698 **
8,075.3
2,903.2
1,305.3
1,597.9
4,462.3
709 8
8,179 3
2,925.7
1.310.9
1,614.8
4,530.4
723 2
30.1
29.1
1.1
25.9
16.9
9.0
64.6
30.8
33.8
31.9
-1.1
33.0
66.1
31.8
34.3
81.1
46.8
34.4
48.9
18.6
30.3
62.1
25.9
36.2
6 742 1
6 928 4
7 191 4
7 017 4
7 101 6
7 159 6
7 214 0
7 290 3
30 Total
5,912.3
6,254.5
n.a.
6.376.5
6,510.0
6,599.0
6,699.6
n.a.
31 Compensation of employees
4,215.4
3,442.6
623.0
2,819.6
772.9
366.0
406 8
4,426.9
3,633.6
642.6
2,991.0
793.3
385.7
407 6
4,703.4
3,878.4
665.4
3,213.0
825.0
408.4
416 6
4.520.7
3.718.0
648.9
3,069.0
802.7
393.6
409 1
4,606.3
3,792.7
657.8
3.134.9
813.6
401.3
412 3
4.663.4
3.842.7
662.0
3,180.8
820.7
405.6
415 1
4,725.2
3,897.3
667 7
3.229.6
827.9
410.2
417 7
4.818.6
3 980 8
674.2
3,306.7
837.7
416.4
4^1 4
489.0
465.5
03 4
520.3
483.1
37 2
544.7
503.8
40 9
528.3
487.9
40 4
534.6
494.4
40 ^
543.6
500.0
43 6
547.2
506.3
40 9
553.3
514.4
39 0
Bv source
2 Personal consumption expenditures
4
Nondurable goods
6 Gross private domestic investment
7
Fixed investment
10
11
Producers' durable equipment
Residential structures
12
13
Change in business inventories
Nonfarm
17 Government consumption expenditures and gross investment
18 Federal
19 State and local
Bv major type of product
20 Final sales, total
21
Goods
22
Durable
23
Nondurable
24
Services
27
2S
Durable goods
Nondurable goods
MEMO
29 Total GDP in chained 1992 dollars
NATIONAL INCOME
34
Other
36
Employer contributions for social insurance
38 Proprietors' income'
40
Farm'
41 Rental income of persons2
42 Corporate profits'
44
45
Inventory valuation adjustment
Capital consumption adjustment
46 Net interest
!. With inventory valuation and capital consumption adjustments
2. With capital consumption adjustment.
132.8
146.3
148.1
149.2
149.0
148.7
148.0
146.6
6S0.0
622.6
-24.3
51.6
735.9
676.6
-2.5
61.8
n.a
n.a.
4.9
69.7
747.8
680.0
3.3
64.4
779 6
708.4
3.5
67.7
795.1
719.8
5.9
69.4
827.3
753.4
3.6
70.3
n.a
n.a.
6.5
71.3
425.1
425.1
n.a.
430.6
440.5
448.1
451.8
n.a.
3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. U.S. Department of Commerce, Survey of Current Business.
Selected Measures
2.17
A49
PERSONAL INCOME AND SAVING
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
Q4
Q2
Q3
Q4
PERSONAL INCOME AND SAVING
Total persona] income
6,150.8
6,495.2
6,874.4
6,618.4
6,746.2
6,829.1
6,906.9
7,015.4
Wage and salary disbursements
Commodity-producing industries
Manufacturing
Distributive industries
Service industries
Government and government enterprises
3,429.5
864.4
648.4
783.1
1,159.0
623.0
3,632.5
909.1
674.7
823.3
1,257.5
642.6
3,877.2
960.1
705.9
876.0
1,375.6
665.4
3,716.9
927.8
685.6
840.6
1,299.5
648.9
3,791.5
942.9
694.1
856.8
1,334.1
657.8
3,841.6
952.8
700.3
867.0
1,359.8
662.0
3.896.1
961.4
706.0
880.8
3,979.7
983.5
723.1
899.6
1.386.3
667 7
1,422.4
674.2
Other labor income
Proprietors' income1
Business and professional1
Farm1
Rental income of persons
Dividends
Personal interest income
Transfer payments
Old-age survivors, disability, and health insurance benefits
406.8
489.0
465.5
23.4
132.8
251.9
718.9
1,015.0
407.6
520.3
483.1
37.2
146.3
291.2
735.7
1,068.0
416.6
544.7
503.8
40.9
148.1
321.5
768.8
1,121.1
566.7
409.1
528.3
487.9
40.4
149.2
295.2
749.8
1,081.5
545.6
412.3
534.6
494.4
40.2
149.0
312.5
757.2
1,107 2
415 I
543.6
500.0
43.6
417.7
547.2
506.3
40.9
148.7
318.3
766.1
1,117.0
772.6
1,125.7
421.4
553.3
514.4
39.0
146.6
330.7
779.1
1,134.8
558.9
564.4
569.4
574.1
323.6
311.5
318.2
321.3
324.8
330.2
6.874.4
6,618.4
6,746.2
6,829.1
6,906.9
7,015.4
LESS: Personal contributions for social insurance
EQUALS: Personal income
LESS: Personal tax and nontax payments
EQUALS: Disposable personal income
LESS: Personal outlays
EQUALS: Personal saving
MEMO
Per capita (chained 1992 dollars)
Gross domestic product
Personal consumption expenditures
Disposable personal income
507.8
537.6
293.1
306.3
6,150.8
6,495.2
795.1
886.9
5,355.7
5,608.3
5,101.1
5,368.8
254.6
239.6
25,615.7'
17,459.2'
18,861.0
26,085.8
17,748.7'
19,116.0
987.9
922.6
5,886.6
5,695.8
5,661.0
5,475.4
225.6
220.4
26,843.5
18,177.2
19,497.0
26.331.6
17,847.8
19,152.0
148.0
324.5
955.7
979.2
998.0
1,018.5
5,790.5
5,849.9
5,908.9
5,996.9
5,574.6
5,602.8
5,700.8
5,765.8
215.9
247.0
208.2
231.1
26.597.8
18.045.2
19,331.0
26,765.0
18,053.9
19,439.0
26,897.9
18.255.7
19,518.0
27,121.5
18,359.3
19,700.0
4.2
3.5
3.9
26 Saving rate (percent)
GROSS SAVING
27 Gross saving
1,165.5
28 Gross private saving .
1,093.1
1,267.8
n.a.
1303.0
1,332.9
1,396.9
1,411.6
n.a.
1,131.4
1,134.0
1,178.1
1,159.6
211.5
247.0
217.6
29 Personal saving
30 Undistributed corporate profits'
31 Corporate inventory valuation adjustment
254.6
172 4
-24.3
239.6
202.1
-2.5
225.6
n.a.
4.9
220.4
212.6
3.3
215.9
3.5
5.9
230.0
3.6
231.1
n.a.
6.5
Capital consumption allowances
32 Corporate
33 Noncorporate
428.9
452.3
230.5
475.7
241.3
462.0
235.2
467.4
238.0
472.6
239.7
478.0
242.4
484.8
245.1
n.a.
n.a.
71.6
n.a.
n.a.
79.5
n.a.
171.6
-5.9
71.3
-77.1
177.5
772
100.4
198.9
15.9
71.4
-55.5
182.9
78.2
104.7
218.8
34.7
71.5
-36.8
184.1
79.2
104.9
251.9
60.8
71.6
-10.8
1,243.5
1,268.6
1,323.4
1,308.4
1,151.1
225.3
-132.9
1,193.6
223.3
-148.4
1,242.0
227 4
-146.0
1,250.2
227.1
-168.9
-59.5
-64.3
-73.5
-103.2
224.1
34 Gross government saving
35
Federal
36
Consumption of fixed capital
37
Current surplus or deficit ( - ) , national accounts. . .
38
Stale and local
39
Consumption of fixed capital
40
Current surplus or deficit (—), national accounts. . .
72.4
-103.6
70.9
-174.4
176.0
72.9
103.1
142.3
-39.3
71.2
-110.5
181.5
76.2
105.3
41 Gross investment
1,137.2
1,207.9
42 Gross private domestic investment
43 Gross government investment
44 Net foreign investment
1,038.2
-114.4
1.116.5
224.3
-132.9
45 Statistical discrepancy
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
213.4
-28.2
1,237.6
226.9
n.a.
191.1
79.7
111.4
SOURCE. U.S. Department of Commerce, Survey of Current Business.
71.9
n.a.
n.a.
80.8
n.a.
1,264.5
229.7
A50
3.10
International Statistics • April 1998
U.S. INTERNATIONAL TRANSACTIONS
Summary
Millions of dollars; quarterly data seasonally adjusted except as noted1
1997
Item credits or debits
Q3
1 Balance on current account
2
Merchandise trade balance
Merchandise exports
Merchandise imports
Military transactions, net
Other service transactions, net
Investment income, net
U.S. government grants
U.S. government pensions and other transfers
Private remittances and other transfers
-133,538
-166,192
502,398
-668,590
1,874
59,902
9,723
-15,671
-4,544
-18,630
-129.095
-173.560
575.871
-749,431
3,866
67,837
6,808
-11,096
-3,420
-19,530
-148,184
-191,170
612,069
-803,239
3,786
76,344
2,824
-14,933
-4,331
-20,704
-42,833
-52,493
150.764
-203,257
792
19.185
-1,370
-2,690
-1,064
-5,193
-36,874
-48,190
157,846
-206,036
1,295
20,697
1,250
-5,499
-1,050
-5,377
Ql
Q2
Q3 P
-39,972
-49,787
162,527
-212,314
437
20,050
-1,990
-2,109
-1,083
-5,490
-37,852
-47,134
171,411
-218.545
1,048
20,441
-3,247
-2,245
-1,128
-5,587
-42,156
-51,549
170,579
-222,128
1,040
20,878
-3,321
-2,252
-1,099
-5,853
11 Change in U.S. government assets other than official
reserve assets, net (increase, —)
-352
-549
-690
162
-284
-21
-268
482
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
5,346
0
-441
494
5,293
-9,742
0
-808
-2,466
-6,468
6,668
0
370
-1,280
7,578
7,489
0
848
-183
6,824
-315
0
-146
-28
-141
4,480
0
72
1,055
3.353
-236
0
-133
54
-157
-730
0
-139
-463
-128
17 Change in U.S. private assets abroad (increase, - ) . .
18 Bank-reported claims3
19 Nonbank-reported claims
20
U.S. purchases of foreign securities, net
21
U.S. direct investments abroad, net
-165,510
-4,200
-31,739
-60,309
-69,262
-296,916
-75,108
-34,997
-100.074
-86,737
-358,422
-98,186
-64,234
-108,189
-87,813
-85,193
-33,589
-17,294
-23,206
-11,104
-153,837
-66,657
-26,115
-30,200
-30,865
-132,428
-62,026
-29,466
-14,510
-26,426
-90,431
-27,947
-3,984
-21,841
-36,659
-101,316
-22,760
22 Change in foreign official assets in United States (increase, +)
23
US. 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 assets5
40,385
30,750
6,077
2,366
3,665
-2,473
110,729
68,977
3,735
744
34,008
3,265
122,354
111.253
4,381
720
4,722
1,278
24.089
25.472
1,217
907
-1,922
-1,585
33,097
33,564
1,854
160
-4,270
1,789
28.891
23.289
651
478
7,698
-3,225
-5,374
-12,108
644
654
4,536
900
22,498
6,485
2,663
16
12,705
629
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
256,952
104,338
-7,710
57,674
56,971
45,679
340,505
30,176
34,588
111,848
96,367
67,526
425,201
9,784
31,786
172,878
133,798
76,955
134,540
2,040
20,610
50,798
35,115
25,977
161,482
38,960
-2,912
75,326
32,447
17,661
153,347
17,387
15,210
51,289
38,820
30,641
148,389
28,100
-7,916
49,915
51,682
26,608
147,042
14,102
0
-3,283
0
-14,931
0
-46,927
-3,284
-14,931
0
-38,254
-7,830
-30,424
0
-3,269
2,669
-5,938
0
-14,297
7,059
-21,356
0
-14,228
-1,713
-12,515
0
-25,820
-8,560
-17,260
34 Allocation of special drawing rights
35 Discrepancy
36
Due to seasonal adjustment
37
Before seasonal adjustment
-37,995
-24,661
43,494
60,770
21,076
MEMO
Changes in official assets
38 U.S. official reserve assets (increase, - )
39 Foreign official assets in United Stales, excluding line 25
(increase, +)
40 Change in Organization of Petroleum Exporting Countries official
assets in United States (part of line 22)
5,346
-9,742
6,668
7,489
-315
4,480
-236
-730
38,019
109,985
121,634
23,182
32,937
28,413
-6,028
22,482
-1,529
4,239
12,278
5,263
3,315
9,272
2,287
3,170
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 institutions as well as some brokers and
dealers.
4. Associated primarily with military sales contracts and other transactions arranged with
or through foreign official agencies.
5. Consists of investments in U.S. corporate stocks and in debt securities of private
corporations and state and local governments.
SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current
Business.
Summary Statistics A51
3.11
U.S. FOREIGN TRADE1
Millions of dollars; monthly data seasonally adjusted
1997
Item
1995
1996
1997
June
July
Aug.
Sept.
Oct.
Nov.
Dec.1"
1 Goods and services, balance
2
Merchandise
3
Services
-101,857
-173.560
71,703
-111,040
-191,170
80,130
-113,747
-198,935
85,188
-8,337
-15,244
6,907
-9.744
-16.848
7.104
-9,055
-16,559
7,504
-11,228
-18,538
7,310
-9,091
-16,479
7,388
-8,676
-15,722
7,046
-10,785
-17.643
6,858
4 Goods and services, exports
5
Merchandise
6
Services
794.610
575.871
218,739
848,833
612,069
236,764
932,322
678,348
253,974
78,365
57,378
20,987
77,845
56.745
21.100
78,890
57,326
21,564
78,116
56,370
21,746
80,230
58,450
21,780
78.971
57.586
21.385
80,019
58,674
21,345
7 Goods and services, imports
8
Merchandise
9
Services
-896.467
-749,431
-147,036
-959,873
-803,239
-156,634
-1,046.068
-877,282
-168.786
-86,702
-72,622
-14,080
-87.589
-73.593
-13,996
-87,945
-73.885
-14.060
-89,344
-74,908
-14.436
-89,321
-74.929
-14.392
-87.647
-73.308
-14,339
-90,804
-76,317
-14,487
SOURCE. FT900, U.S. Department of Commerce. Bureau of ihe Census and Bureau of
Economic Analysis.
1. Data show monthly values consistent with quarterly figures in the U.S. balance of
payments accounts.
3.12
US. RESERVE ASSETS
Millions of dollars, end of period
1997
Asset
1 Total
2 Gold stock, including Exchange
Stabilization Fund1
3 Special drawing rights2'3
4 Reserve position in International Monelary
Fund2
5 Foreign currencies4
1994
1995
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.p
74,335
85,832
75,090
67,813
66,120
66,640
67,148
68,036
67,112
69,954
70,004
11.051
10,039
11,050
11,037
11,049
10,312
11.050
10.023
11.051
9,810
11,050
9,985
11.050
9.997
11.050
10,132
11.050
10.120
11,050
10.027
11,047
9,998
12,030
41,215
14,649
49.096
15,435
38,294
13,805
32,935
13.677
31.582
13,959
31.646
14,042
32,059
14,243
32,611
14,571
31,371
18.071
30.809
18.039
30,920
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.
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 1981, five currencies have been used. U.S.
3.13
1998
1996
FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS1
Millions of dollars, end of period
1998
1997
Asset
1994
1995
1996
June
1 Deposits
Held in custody
2 U.S. Treasury securities2
3 Earmarked gold3
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.p
250
386
167
178
175
169
188
190
167
457
215
441.866
12.033
522,170
11,702
638,049
11,197
652,077
10,794
653,157
10,793
660.461
10.793
655,406
10,793
638,100
10,793
635,092
10,793
620,885
10.763
625,219
10,709
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, in each case measured at face (not market) value.
July
3. Held in foreign and international accounts and valued at $42.22 per tine troy ounce; not
included in the gold stock of the United States.
A52
3.15
International Statistics • April 1998
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1 Tola]1.
2
3
4
5
6
1
8
9
10
11
12
By type
Liabilities reported by banks in the United States'. .
U.S. Treasury bills and certificates3
U.S. Treasury bonds and notes
Marketable
Nonmarketable4
U.S. securities other than U.S. Treasury securities5
By area
Europe
Canada
Latin America and Caribbean
Asia
Africa
Other countries
Aug.
Sept.
630,918
758,624
781,245
781,414
793,548
803,621
798,596
791,253
107,394
168,534
113.098
198 921
125,785
163,950
129,797
161,270
128,628
165,453
138,176
161,610
153,704
153,283
147,745
150,102
134,825
148,301
293,690
6,491
54,809
379,497
5,968
61,140
425,347
5,767
60,396
422,934
5,804
61,609
431,169
5,841
62,457
434,260
5,879
63,696
421,412
5,919
64,278
422,879
5,955
64,572
422,568
5,994
64,789
222,406
19,473
66,721
311,016
6,296
5,004
257,915
21,295
80,623
385,484
7.379
5,926
274,026
20,582
88,838
382,911
8.890
5,996
272.159
21.112
93,117
380,702
8.882
5,440
272,566
20,959
94,262
390,584
8,934
6,241
276,594
21,233
94,754
394,551
10,218
6,269
280,489
19,418
90,190
391.541
9,812
7,144
272,630
19,275
94,134
389,839
9,542
5.831
262,928
18,749
97,310
380,787
10,118
6,583
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 and Treasury bills issued to official
institutions of foreign countries.
4. Excludes notes issued to foreign official nonreserve agencies. Includes current value of
zero-coupon Treasury bond issues to foreign governments as follows: Mexico, beginning
March 1988, 20-year maturity issue and beginning March 1990, 30-year maturity issue;
3.16
July
LIABILITIES TO, AND CLAIMS ON, FOREIGNERS
Payable in Foreign Currencies
Venezuela, beginning December 1990, 30-year maturity issue; Argentina, beginning April
1993, 30-year maturity issue.
5. Debt securities of U.S. government corporations and federally sponsored agencies, and
U.S. corporate stocks and bonds.
SOURCE. Based on U.S. Department of the Treasury data and on data reported to the
department by banks (including Federal Reserve Banks) and securities dealers in the United
States, and on the 1989 benchmark survey of foreign portfolio investment in the United
States.
Reported by Banks in the United States'
Millions of dollars, end of period
1996
Item
1 Banks' liabilities
5 Claims of banks' domestic customers
1993
78,259
62,017
20,993
41,024
12,854
1. Data on claims exclude foreign currencies held by U.S. monetary authorities.
1994
89,258
60,711
19,661
41,050
10,878
1997
1995
109,713
74,016
22.696
51,320
6,145
Dec.
Mar.
June
Sept.
103,383
66,018
22,467
43,551
10,978
109,238
72,589
24,542
48,047
10,196
109,433
84,623
26,461
58,162
10,265
118,477
89,568
28,961
60,607
10,210
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.
Bank-Reported Data
3.17
LIABILITIES TO FOREIGNERS
Payable in U.S. dollars
A53
Reported by Banks in the United States1
Millions of dollars, end of period
June
July
Aug.
Sept.
Nov.
Dec.
BY HOLDER AND TYPE OF LIABILITY
1 Total, all foreigners
7 Banks" custodial liabilities5
8
U.S. Treasury bills and certificates6
9
Other negotiable and readily transferable
instruments
10 Other
11 Nonmonetary international and regional organizations*
12 Banks' own liabilities
13
Demand deposits
14
Time deposits
15
Other3
16
17
18
19
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments
Other
20 Official institutions9
21
Banks' own liabilities
22
Demand deposits
23
Time deposits"
24
Other3
25
26
27
28
Banks' custodial liabilities5
U.S. Treasury bills and certificates
Other negotiable and readily transferable
instruments7
Other
10
29 Banks
30 Banks' own liabilities
31
Unaffiliated foreign banks
32
Demand deposits
33
Time deposits2
34
Other1
35
Own foreign offices4
36
37
38
39
5
Banks' custodial liabilities
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments
Other
40 Other foreigners
41
Banks' own liabilities
42
Demand deposits
43
Time deposits2
44
Other3
45
46
47
48
1,162,148
1,277,200
1,184,712
1,200,323
1,192,443
1,198,563
1,225,798'
1,240,322
1,277,200
753,461
24,448
192,558
140,165
396,290
758,998
27,034
186,910
143,510
401,544
877,082
32,079
193,243
167,704
484,056
801,908
29,545
186,904
166,849
418.610
807.103
27,655
189,352
177,279
412,817
788,607
27,107
190,465
162,026
409,009
797,480
28,332
187,475
171,113
410,560
824,419'
33,551
193,424
193,960'
403,484'
834,048
35,742
191,691
181,006
425,609
877,082
32,079
193,243
167,704
484.056
346,088
197,355
403,150
236,874
400,118
193,446
382,804
205.792
393,220
202.630
403,836
209,121
401,083
205,946
401.379
200.215
406.274
196.476
400,118
193,446
52,200
96,533
72,011
94,265
93,483
113,189
75,235
101,777
88,057
102,533
89,096
105,619
90,686
104,451
95,108
106,056
99,882
109,916
93,483
113,189
11,039
10,347
21
4,656
5,670
13,972
13,355
29
5,784
7,542
11,528
11,324
16
5,254
6,054
13,952
13,496
775
6,669
6,052
11,796
11,384
86
4,726
6,572
10,569
10,068
217
4,879
4,972
11,806
11,524
771
5,967
4,786
13,914
13,509
36
5,161
8,312
12.469
12.205
43
6.310
5.852
11,528
11,324
16
5,254
6,054
692
350
617
352
204
69
456
65
412
47
501
166
282
53
405
148
264
46
204
69
341
1
265
133
2
383
365
0
314
21
229
0
257
0
275,928
83,447
2,098
30,717
50,632
312,019
79,406
1,511
33,336
44,559
283,126
101,409
2.311
41.222
291,067
57,876
289,735
97,680
1,482
39,849
56,349
102.366
1.711
42,145
58,510
294,081
99,111
2,198
40,301
56,612
299,786
105,354
1,745
39,884
63,725
306,987
118,054
2,034
41,670
74,350
297,847
109.937
1.891
39.666
68.380
283,126
101,409
2.311
41,222
57,876
192.481
168.534
232,613
198,921
181,717
148,301
192,055
163,950
188,701
161,270
194,970
165,453
194,432
161,610
188,933
153,283
187,910
150,102
181,717
148,301
23,603
344
33,266
426
33,211
205
27.676
429
26,878
553
29,349
168
32,315
507
35,236
414
37.374
434
33,211
205
691,412
567,834
171,544
11,758
103,471
56,315
396.290
694,835
562,898
161,354
13,692
89,765
57,897
401,544
815,388
641,626
157,570
17,515
83,804
56,251
484,056
727,626
575,788
157,178
14,800
79,281
63,097
418,610
734,459
573,819
161,002
13,700
80,131
412.817
730,322
566,366
157,357
13,323
81,890
62,144
409,009
723,002
562,218
151,658
13,852
76,443
61,363
410,560
733,017'
568,398'
164,914
18,354
83,172
63,388
403.484'
765,607
595,677
170,068
21,317
84,591
64,160
425,609
815,388
641,626
157,570
17,515
83,804
56,251
484,056
123,578
15,872
131,937
23,106
173,762
31,915
151,838
27,115
160.640
28.642
163,956
30,629
160,784
30.012
164,619
33.085
169,930
32.995
173,762
31,915
13,035
94,671
17,027
91,804
35,333
106,514
28,866
95,857
35.522
96.476
33.960
99.367
32,886
97,886
32,065
99,469
33.826
103.109
35,333
106.514
121,170
91,833
10,571
53,714
27,548
141,322
103,339
11,802
58,025
33,512
167,158
122,723
12,237
62,963
47,523
153,399
114.944
61,105
41.351
163.001
119.534
12.158
62.350
45.026
157,471
113.062
11,369
63,395
38,298
163,969
118,384
11,964
65,181
41,239
171,880'
124,458'
13,127
63,421
47,910'
164,399
116.229
12.491
61.124
42.614
167,158
122,723
12,237
62,963
47,523
29,337
12,599
37,983
14,495
44,435
13,161
38,455
14,662
43.467
12.671
44,409
12,873
45,585
14,271
47.422
13,699
48.170
13,333
44,435
13,161
15,221
1,517
21,453
2,035
24,806
6,468
18,310
5,483
25,292
5.504
25,473
6,063
25,256
6,058
27,550
6,173
28,465
6,372
24,806
6,468
9,103
14,573
16,046
15,771
16,453
16,040
15,872
15.485
16,553
16.046
1,099,549
2 Banks' own liabilities
3
Demand deposits
4
Time deposits2
5
Other'
6
Own foreign offices4
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments
Other
0
12,488
67.171
133
2
MEMO
49 Negotiable time certificates of deposit in custody for
foreigners
1. Reporting banks include all types of depository institutions as well as some brokers and
dealers. Excludes bonds and notes of maturities longer than one year.
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 quarterly Consolidated Reports of Condition filed with bank regulatory
agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists
principally of amounts owed to the head office or parent foreign bank, and 10 foreign
branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank.
5. Financial claims on residents of the United Stales. Dlher lhan long-term securities, held
by or through reporting banks for foreign customers.
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 InterAmerican 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 "
A54
3.17
International Statistics • April 1998
LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued
June
July
Aug.
Sept.
Oct.
Nov.
Dec
50 Tola), all foreigners
1,099,549
1,162,148
1,277,200
1,184,712
1,200323
1,192,443
1,198,563
U25.798'
1,240,322
1,277,200
51 Foreign countries
1,088310
1,148,176
1,265,672
1,170,760
1,188,527
1,181,874
1,186,757
1.211,884'
1,227,853
1,265,672
362.819
3,537
24.792
2.921
2,831
39,218
24,035
2,014
10,868
13,745
1,394
2,761
7,948
10,011
3,246
43,625
4,124
139,183
177
26.389
376,590
5.128
24,084
2,565
1,958
35,078
24.660
1,835
10,946
11,110
1.288
3 562
7,623
17,707
1,623
44.538
6,738
153,420
206
22,521
420.291
2,721
41,003
1,514
2,246
46,607
23,737
1,515
11.378
7,385
317
2,262
7,968
18,989
1,628
39,258
4,054
181,824
239
25.646
395,718
3,252
41,286
2,098
1,851
41,211
26,086
1,701
10,191
8.292
841
2,582
12,302
16,274
1,514
39,124
6,545
156,127
228
24,213
411.680
3,257
45,291
2.289
1,814
43,464
24,978
1,726
9.490
8.440
846
2.075
13.604
15,158
1.925
44,283
6,594
161,672
267
24.507
407,700
3,404
46,063
1,736
1,751
41,213
22,626
1,592
9,179
7,823
604
1,931
13,216
15,203
2,317
41,076
5,933
167,914
244
23,875
402,063
2,691
43,436
2,867
2,163
43,065
25,201
2,086
9,852
8,388
1.321
1,958
12.784
17,796
2,024
36,862
4,736
158,849
243
418.988
2.679
46.067
2,359
1,997
45.057
22,117
2.075
11.449
8,119
1,022
1.888
11.722
21,934
1,348
37,075'
4,661
165,199
233
31,987'
425.619
2,319
46.258
2.157
1.969
45,688
23,040
1,229
10,713
7,010
1.793
1.987
6,938
20,921
1,614
39,665
420.291
2,721
41.003
1,514
2,246
46,607
23,737
1,515
11,378
7,385
317
2.262
7.968
18,989
1,628
39,258
4,054
181,824
239
25,646
30,468
38,920
28,341
37,976
30,445
27.629
29,592
30,282
30,921
28.341
440,213
12,235
94,991
4,897
23,797
239,083
2,826
3,659
8
1,314
1,276
481
24,560
4,673
4,264
974
1,836
11,808
7,531
467,529
13,877
88,895
5,527
27,701
251,465
2,915
3,256
21
1,767
1,282
628
31,240
6,099
4,099
834
1,890
17,363
8,670
530.332
20,193
113,016
7,036
30,107
270,407
4,072
3,630
66
2,078
1,494
450
33,971
5,078
4,239
893
2,382
21,539
9,681
496.530
18.229
90,166
5.358
26.058
272,447
3,371
2,836
55
1,466
1,497
465
33.111
6.134
3,976
919
2,153
19.197
9.092
500.824
17.100
92,136
5,919
28,340
265,291
3.440
496.658
18.033
86,271
7,786
31,567
268,485
3,353
2,587
502.648
501.854
17,557
530,332
20,193
113,016
7,036
30,107
270,407
4,072
3,630
66
2,078
1.494
450
33,971
5,078
4,239
893
2,382
21,539
9,681
240,595
249,083
269.157
33.750
11,714
20,197
3,373
2,708
4,041
109,193
5,749
3,092
12,279
15.582
18.917
30,438
15,995
18,789
3,930
2,298
6,051
117,316
5,949
3,378
10.912
16,285
17,742
18,238
11,700
17,759
4,567
3,554
6,283
143,404
12,955
3,250
6.501
14.959
25,987
7,641
2,136
104
739
10
1.797
2.855
8,116
2.012
112
458
10
2,626
2,898
6,774
5.647
1.127
11,039
9,300
893
846
52 Europe
53
Austria
54
Belgium and Luxembourg
55
Denmark
56
Finland
57
France
58
Germany
59
Greece
60
Italy
61
Netherlands
62
Norway
63
Portugal
64
Russia
65
Spain
66
Sweden
67
Switzerland
68
Turkey
69
United Kingdom
70
Yugoslavia"
71
Other Europe and other former U S S R .
72 Canada
73 Latin America and Caribbean
74
Argentina
75
Bahamas
76
Bermuda
77
Brazil
78
British West Indies .. .
79
Chile
80
Colombia
81
Cuba
82
Ecuador
83 Guatemala
84 Jamaica
85
Mexico
86
Netherlands Antilles . .
87
Panama
88
Peru
89
Uruguay
90
Venezuela
91
Other
92 Asia
China
Mainland
93
Taiwan
94
Hong Kong
95
96
India
97
Indonesia
98
Israel
99
Japan
100 Korea (South)
101 Philippines
102 Thailand
103 Middle Eastern oil-exporting countries'"
104 Other
106
107
108
109
110
111
Egypt
Morocco
South Africa
Zaire
Oil-exporting countries14 .
Other
112 Other
113 Australia
114 Other
115 Nonmonetary international and regional organization:
116
International
117
Latin American regional16
118 Other regional17
958
2,392
19,124
9,602
1,512
1,389
534
30,804
8,286
3,805
1,006
2,070
20,159
8,951
86.914
6.084
33,575
273,570
3,327
2,657
55
1,508
1,449
523
32,640
7,566
3,835
904
1,997
20,580
8,821
89,630
6,209
31,675
270.004
3,579
3,395
71
1.671
1.399
481
32.748
6.059
4,107
917
20,639
9,529
499.265
18.214
92,389
6,012
32,609
263,770
3,283
3,266
57
1,704
1,361
445
32,668
4.987
4,291
907
2,247
22.050
9,005
222,848
227.759
231,017
234,560
242,074'
255,047
269,157
7,283
12,363
20,236
4,241
2,531
5,751
118,413
7,657
2,469
6,159
13,086
22,659
9,480
13,464
18.737
4,555
2,817
5,180
118,410
8,928
2.908
5,262
14.306
23,712
10,450
11,803
17,647
4,474
3,737
5,202
119,581
9,646
2,541
4,956
15,325
25,655
12.664
13.460
18,533
4,451
2,810
4,534
118,536
9,327
2,409
6,545
14,279
27,012
16.244
15.207
19,755'
5,131
4,568
4,200
116,852
8,597'
2,505
6,988
14,436
27.591
17,443
13,586
18.886
4,913
3,092
3,745
133,697
9,982
2,558
5,854
14,017
27,274
18.238
11.700
17,759
4.567
3,554
6,283
143.404
12.955
3.250
6,501
14.959
25.987
10,343
1,663
138
2,158
10
3,060
3,314
9,970
1,986
65
1,758
17
3,153
2,991
9,734
1.921
112
1,697
8
2.981
3.015
9,731
1,973
94
1.694
7
3,211
2,752
10,380
2.050
99
2,047
14
3,280
2,890
10,310
1,742
105
2,028
3
3,194
3,238
9,520
1,836
69
1,615
5
2,948
3,047
10.343
1.663
138
2,158
10
3,060
3,314
7,938
6,479
1,459
7,208
6,304
904
7,718
6,433
1,285
8,085
6,782
1,303
9,139
7,917
1,222
7,514
6,391
1,123
8,376
7,284
1,092
7,481
6,283
1,198
7,208
6.304
13,972
12,099
1,339
534
11,528
10,255
524
749
13,952
12,297
1,071
584
11,796
10,341
10,569
9,434
579
556
11,806
10,634
708
13,914
11,943
1,277
694
12,469
10,926
1,053
490
11,528
10,255
524
749
11. Since December 1992, has excluded Bosnia, Croatia, and Slovenia.
12. Includes the Bank for International Settlements. Since December 1992, has
included 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 iTrucial States).
14. Comprises Algeria. Gabon. Libya, and Nigeria.
25,741
4,218
177,781
234
30,085
2,652
54
1.640
1 455
532
34 779
10,986
4,424
794
661
60
16.643
464
2.184
904
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 Internationa] Settlements, which is included in "Other Europe."
Bank-Reported Data
3.18
A55
BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1
Payable in U.S. Dollars
Millions of dollars, end of period
1997
1997
Area or country
June
July
Aug.
Sept.
Nov.
Dec.11
1 Total, all foreigners
532,444
599,925
704,762
651,457
646,504
650,453
656,676
681,634'
699,515
704,762
2 Foreign countries
530,513
597,321
702,525
649427
645351
648,036
654,633
679,886'
697,029
702,525
132,150
565
7,624
403
1,055
15,033
165,769
192,392
1,394
8,164
981
1,414
16,759
10,024
469
5,370
5,346
665
888
660
2,166
2,080
7,474
803
67,784
147
4,355
6,727
492
971
15,246
8,472
568
6,457
7,117
808
418
1.669
3,211
1,739
19,798
1,109
85,234
115
3,956
199,881
1,385
6,739
980
1.233
16,235
12,666
402
6,327
6,154
591
777
1,248
2,941
1,854
28,841
1,571
102,876
52
7,009
189,759
1,739
8,124
811
1,773
16,232
8,685
481
8,015
11,083
849
732
2,192
6,175
1,639
24,338
1,305
90,226
76
5,284
199,261
1,371
7,847
1,082
1,889
17,531
11,724
499
7,670
11,548
1.713
563
1.927
5,431
1,659
25,393
1,410
93,825
75
6,104
213,886
1.913
8.347
896
1,808
17,043
11,617
463
7,146
11,504
1,419
615
2,054
6,624
1,838
29.980
1.424
102,405
75
6,715
215,397
2,034
7,461
844
1,259
19,893
13,305
401
6,870
11,496
2,080
695
2,207
6,338
1,804
29,599
1,572
100.870
74
6,595
199.881
1,385
6,739
980
1,233
16,235
12.666
402
7,865
10,687
750
468
2,020
6,811
2,539
22,523
1,392
94,070
75
3,826
186,365
1,690
8,094
806
1,247
18,689
8,351
461
7,443
12,050
745
439
2,098
6,496
1,740
24,883
1,362
84,162
75
5,534
20,874
26,436
27,168
35,916
26,289
24,442
23,513
22.824'
24.765
27,168
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
256,944
6,439
58,818
274,153
7,400
71,871
4,129
17,259
105,510
5,136
6,247
0
1,031
620
345
18,425
25.209
281,258
7,293
66,804
7,112
18,757
122,088
5,599
6,324
0
1,132
651
19,201
14,016
3,183
2,597
705
1,801
3,659
300,339
7,088
69,819
8,252
18,879
134,438
5,686
6,419
0
1,165
679
359
19,585
15,759
3,272
2,697
778
1,734
3,730
298,786
7,277
70,031
9,829
19,249
128,373
5,919
6,608
0
1,199
689
375
18,680
18,399
3,482
2,850
702
1,750
3,374
302,528
7,243
66,074
9,342
19,422
133,778
6,235
6,543
0
1,218
764
374
18,770
20,325
3,566
3,060
728
1,716
3,370
303,877'
8,138
73,837
8,097
20,127'
133,310'
7.189
6,862
0
1,307
760
364
18,584
12,274
3,957
3,184
709
1,636
3.542
317,478
8,757
72.739
6.552
20,382
141,801
7.783
6,968
3
1,292
787
405
18,904
17,064
4,089
3,456
651
1,915
342,812
8,914
88,372
8,782
20,919
146,353
7.913
6,936
0
1,311
886
1.702
3,174
342,812
8,914
88,372
8,782
20,919
146,353
7,913
6,936
0
1,311
886
674
19,144
17,874
4,336
3,490
626
2,157
4,125
3,930
626
2.157
4,125
43 Asia
China
44
Mainland
45
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
115,336
122,478
122,802
129,761
122,517
124,927
120,807
129,589
129,890
122,802
1,023
1,713
12,821
1,846
1,696
61,468
13,975
1,318
2,612
9,639
6,486
1,401
1,894
12,802
1,946
1,762
633
59,967
18.901
1,697
2,679
10,424
8,372
1,566
921
13,995
2,205
2,564
768
59,547
16,005
1,689
2,260
10,805
10,477
2,036
1,851
16,014
2,342
2,539
631
59,679
20,606
2,119
3,187
9,115
9,642
2,385
1,523
12,247
2,184
2,524
855
55,592
21,274
1,723
2,825
9,751
9.634
2,574
1.521
13,188
2,110
2.579
749
54,427
21,690
1,834
2,641
9,503
12,111
2,798
1,250
13,573
2,086
2,713
907
52,480
19,978
1,670
2,479
7,988
12,885
2,345
1,271
15.343
2,360
2,698
1,539
59,437
19,922
1,455
2,317
8,490
12,412
2,102
1,000
15,156
2,501
2,746
1,201
60,195
19,253
1,533
2,180
8,909
13,114
1.566
921
13,995
2,205
2,564
768
59,547
16,005
1,689
2,260
10,805
10,477
56 Afric;
57
Egypt
Morocco
South Africa
59
60 Zaire
Oil-exporting countries5
61
Other
62
2,742
210
514
465
1
552
1,000
2,776
247
524
584
0
420
1,001
3,523
247
511
808
0
1,204
753
3,273
312
465
1,129
765
3,125
267
463
493
0
1,134
768
3,281
288
554
489
0
1,178
772
3,464
251
547
655
0
1,123
3.342
245
599
557
0
I 111
830
3.332
282
412
743
0
1,091
804
3.523
247
511
808
0
1,204
753
63 Other
64
Australia .
65
Other
2,467
1,622
845
5,709
4,577
1,132
6,339
5,299
1,040
6,927
5,042
1,885
6,716
4,938
1,778
6,841
5.266
1,575
5,060
4,314
746
6,368
5,296
1,072
6,167
4,962
1.205
6,339
5,299
1,040
66 Nonmonetary international and regional organizations6
1.931
2,604
2,237
1,930
1,153
2,417
2,043
1,748
2.486
2,237
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 other former U.S.S.R.1
23 Canada
9,263
5,741
13,297
124,037
4.864
4,550
0
825
457
323
18,024
9,229
3,008
1,829
466
1,661
3,376
739
1,662
2,786
2,720
589
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, has included all
parts of the former U.S.S.R. (except Russia), and Bosnia. Croatia, and Slovenia.
630
336
602
0
6,327
6.154
591
777
1.248
2.941
1,854
28,841
1,571
102,876
52
7,009
674
19,144
17,874
4,336
3,490
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 Europe."
A56
3,19
International Statistics • April 1998
BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS
Payable in U.S. Dollars
Millions of dollars, end of period
Reported by Banks in the United States'
1997
Type of claim
1995
1996
1997
June
1 Total
655,211
2 Banks' claims
3
Foreign public borrowers
4
Own foreign offices
5
Unaffiliated foreign banks
532,444
22,518
307,427
101,595
37,771
63,824
100,904
599,925
22,216
341,574
113,682
33,826
79,856
122,453
122,767
58,519
143,994
7
8
Other
All other foreigners
9 Claims of banks' domestic customers3
11
Negotiable and readily transferable
instruments4
Outstanding collections and other
12
44,161
20,087
743.919
July
Aug.
651,457
29,399
379,426
119,545
35,794
83,751
123,087
77,657
646.504
26,923
370,506
117.694
36.006
81.688
131,381
650,453
28,263
370,599
115.343
35,436
79,907
136,248
656.676
30,287
374,443
104,749
29,509
75,240
147,197
162,257
94.591
169,993
101.683
50.301
50,291
17,365
18,019
11,437
10,854
51.207
15,130
Oct.
Nov.
Dee.p
682.894
29,795
401,467
115,298
30,358
84,940
136.334
698.937
28,112
408,509
122,813
32,373
90,440
139,503
704,762
20.771
428,616
109,139
29,635
79,504
146,236
39.076
37.395
826,669
813,714
704.762
20,771
428,616
109,139
29,635
79,504
146,236
Sept.
MEMO
13 Customer liability on acceptances
14 Dollar deposits in banks abroad, reported by
nonbanking business enterprises in the
United States5
8,410
10,388
30,717
39,661
n.a.
36,210
1. For banks' claims, data are monthly; for claims of banks' domestic customers, data are
for quarter ending with month indicated.
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 quarterly Consolidated Reports of Condition filed with bank regulatory
agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists
3.20
38,213
45.342
38,181
n.a.
principally of amounts due from the head office or parent foreign bank, and from foreign
branches, agencies, or wholly owned subsidiaries of the 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, bankers acceptances, and commercial
paper.
5. Includes demand and time deposits and negotiable and nonnegotiable certificates of
deposit denominated in U.S. dollars issued by banks abroad.
BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS
Payable in U.S. Dollars
Reported by Banks in the United States'
Millions of dollars, end of period
Maturity, by borrower and area"
1 Total
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
By borrower
Maturity of one year or less
Foreign public borrowers
All other foreigners
Maturity of more than one year . . .
Foreign public borrowers
All other foreigners
fiv area
Maturity of one year or less
Europe
Canada
Latin America and Caribbean. ..
Asia
Africa
All other3
Maturity of more than one year
Europe
Canada
Latin America and Caribbean. . .
Asia
Africa
All other3
Sept.
202,566
202,282
224,932
258,106
276,025
271,894
282,234
172,662
17,828
154,834
29,904
10,874
19,030
170,411
15,435
154,976
178,857
14,995
163,862
46,075
7,522
38,553
211,859
15.411
196,448
46,247
223,721
19,876
203,845
52,304
8,835
43,469
211,140
17,979
193,161
60,754
11,220
49,534
219,343
21.535
197,808
62.891
8,752
54,139
57,413
7,727
56,381
6,690
59.583
40,567
55.690
8,339
103,254
38,078
1,316
5,182
74,888
10,423
69,233
10,320
87,059
38,434
1,899
4.195
69,213
8,460
99,902
36,030
2,157
3,581
6,965
2,645
24,943
9,392
1,361
941
9,512
2,934
26,797
10,773
1,204
1,084
11.835
3,164
11,198
3.832
34,873
10 394
1,236
1.358
31.871
7,838
24,033
3,794
5,811
55,622
6,751
72,504
40,296
1,295
2,389
5,310
2,581
14,025
5,606
1,935
447
4,358
3,505
15,717
5,323
1,583
1,385
4,995
2,751
27,681
7,941
1,421
1.286
60,490
41,418
1,820
1,379
1. Reporting banks include all types of depository institutions as well as some brokers and
dealers.
June
6,790
39,457
96,892
36,478
1,451
3,589
31.001
12.510
1.264
980
2. Maturity is time remaining until maturity.
3. Includes nonmonetary international and regional organizations.
Bank-Reported Data A57
3.21
CLAIMS ON FOREIGN COUNTRIES
Billions of dollars, end of period
Held by U.S. and Foreign Offices of U.S. Banks'
1996
Area or country
1993
1994
Sept.
1 Total
Mar.
June
Sept.
409.5
499.5
535.3
551.9
574.7
614.9
587.9
646.9
649.2
680.6'
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
161.9
7.4
12.0
12.6
7.7
4.7
2.7
5.9
84.4
6.9
17.6
191.2
7.2
19.1
24.7
11.8
3.6
2.7
5.1
85.8
10.0
21.1
203.0
11.0
18.0
27.5
12.6
4.5
2.9
6.6
80.4
12.9
26.6
206.0
13.6
19.4
27.3
11.5
3.7
2.7
6.7
82.4
10.3
28.5
203.4
11.0
17.9
31.5
13.2
3.1
3.3
5.2
84.7
10.8
22.7
229.0
11.4
18.0
33.5
14.9
4.7
2.7
6.3
101.6
12.2
23.6
221.7
11.3
17.4
35.5
15.2
5.9
3.0
6.3
90.5
14.8
21.7
229.9
11.7
16.6
31.4
16.0
4.0
2.6
5.3
104.7
14.0
23.7
233.0
14.1
19.7
J3.7
14.4
4.5
3.4
6.0
99.2
16.3
21.7
251.8
9.4'
17.9
35.8
20.2
6.4
3.6
5.4
110.6
15.7
26 8
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
26.5
.7
1.0
.4
3.2
1.7
.8
9.9
2.1
3.2
1.1
2.3
45.7
1.1
1.3
.9
4.5
2,0
1.2
13.6
1.6
3.2
1.0
15.4
50.5
1.2
1.8
.7
5.1
2.3
1.9
13.3
2.0
3.3
1.3
17.4
50.2
.9
2.6
.8
5.7
3.2
1.3
11.6
1.9
4.7
1.2
16.4
61.3
1.3
3.4
.7
5.6
2.1
1.6
17.5
2.0
3.8
1.7
21.7
55.5
1.2
3.3
.6
5.6
2.3
1.6
13.6
2.3
3.4
2.0
19.6
62.1
1.0
1.7
.6
6.1
3.0
1.4
16.1
2.8
4.8
1.7
22.8
65.7
1.1
1.5
.8
6.7
8.0
.9
13.2
2.7
47
2.0
24.0
66.4
1.9
1.7
7
6.3
5.3
1.0
14.4
2.8
6.3
1.9
24.4
71.7
1.5
2.8
1.4
6.1
4.7
1.1
15.4
3.4
5.5
1.9
27.8
25 OPEC2
26
Ecuador
27
Venezuela
28
Indonesia
29
Middle East countries .
30
African countries
17.6
.5
5.1
3.3
7.6
1.2
24.1
.5
3.7
3.8
15.3
.9
22.7
7
3.0
4.4
13.9
.6
22.1
.7
2.7
4.8
13.3
.6
21.2
.8
2.9
4.7
12.3
.6
20.1
.9
2.3
4.9
11.5
.5
19.2
.9
2.3
5.4
10.2
.4
19.7
1.1
2.4
5.2
10.7
.4
21.8
1.1
1.9
4.9
13.2
.7
22.3'
.9
2.1
5.6
12.5'
1.2
96.0
104.1
118.6
126.5
124.4
7.7
12.0
47
2.1
17.9
.4
3.1
11.2
8.4
6.1
2.6
18.4
.5
2.7
10.9
13.6
6.4
2.9
16.3
.7
2.6
12.9
13.7
6.8
2.9
17.3
12.7
18.3
6.4
2.9
16.1
.9
3.1
14.1
21.7
6.7
2.8
15.4
1.2
3.0
15.0
17.8
6.6
3.1
16.3
1.3
3.0
14.3
20.7
7.0
4.1
16.2
1.6
3.3
14.3
22.0
6.8
3.7
17.2
1.6
3.4
16.4
27.3
7.6
3.3
16.6
1.4
3.4
2.0
7.3
3.2
.5
6.7
4.4
3.1
3.1
3.1
1.1
9.2
4.2
.4
16.2
3.1
3.3
2.1
4.7
1.7
9.0
4.4
.5
18.0
4.3
3.3
3.9
3.7
1.8
9.4
4.4
.5
19.1
4.4
4.1
4.9
4.5
3.3
9.7
4.7
.5
19.3
5.2
3.9
5.2
4.3
2.9
9.8
4.2
.6
21.7
5.3
4.7
5.4
4.8
2.6
10.4
3.8
.5
21.9
5.5
5.4
4.8
4.1
2.5
10.3
4.3
.5
21.5
6.0
5.8
5.7
4.1
2.7
10.5
4.9
.6
14.6
6.5
6.0
6.8
4.3
3.6
10.6
5.3
.8
16.3
6.4
7.0
7.3
4.7
.0
.8
.6
.7
.0
1.0
.9
.6
.0
.9
I.I
.7'
.0
.9
31 Non-OPEC developing countries . .
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other
39
40
41
42
43
44
45
46
47
Asia
China
Mainland . . .
Taiwan
India
Israel
Korea (South) .
Malaysia
Philippines .. ..
Thailand . . .
Other Asia
49
50
51
Africa
Egypt
Morocco
Zaire
Other Africa'..
52 Eastern Europe. .
53
Russia^ .
54
Other
55 Offshore banking centers
56
Bahamas
57
Bermuda
58
Cayman Islands and other British West I
59
Netherlands Antilles
60
Panamas
61
Lebanon
62
Hong Kong. China
63
Singapore
64
Other*
65 Miscellaneous and unallocated7
4
.7
.0
.9
3.2
1.6
1.6
2.7
.8
1.9
3.4
.6
2.8
4.2
1.0
3.2
6.3
1.4
4.9
5.1
1.0
4.1
5.3
1.8
3.5
6.9
3.7
3.2
8.9
3.5
5.4
7.1
4.2
2.9
73.5
10.9
8.9
18.4
2.8
2.4
.1
18.8
11.2
.1
43.6
72.9
10.2
8.4
21.4
1.6
1.3
.1
20.0
87.5
12.6
6.1
25.1
5.7
1.3
.1
23.7
13.3
I
64.2
992
11.0
6.3
32.4
10.3
1.4
.1
25.0
13.1
.1
57.6
101.3
13.9
5.3
28.8
ill
1.6
1
25 3
15.4
.1
62.6
106.1
17.3
4.1
26.1
13.2
1.7
.1
27.6
15.9
.1
72.7
105.2
14.2
4.0
32.0
11.7
1.7
.1
26.0
15.5
.1
50.0
134.7
20.3
4.5
37.2
26.1
2.0
.1
27.9
16.7
.1
59.6
131.3
20.9
6.7
32.8
19.9
2.0
.1
30.8
17.9
.1
59.6
129.6
16.1
7.9
35.1
15.8
2.6
.1
35.2
167
.3
57.6
10.1
.1
669
1. The banking offices covered by these data include U.S. offices and foreign branches of
U.S. banks, including U.S. banks that are subsidiaries of foreign banks. Offices not covered
include U.S. agencies and branches of foreign banks. Beginning March 1994, the data include
large foreign subsidiaries of U.S. banks. The data also include other types of U.S. depository
inslitutions as well as some types of brokers and dealers. To eliminate 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.
These data are on a gross claims basis and do nol necessarily reflect the ultimate country
risk or exposure of U.S. banks. More complete data on the country risk exposure of U.S. banks
are available in the quarterly Country Exposure Lending Survey published by the Federal
Financial Institutions Examination Council.
140.6'
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. Beginning March 1994 includes Namibia.
4. As of December 1992, excludes other republics of the former Soviet Union.
5. Includes Canal Zone.
6. Foreign branch claims only.
7. Includes New Zealand, Liberia, and international and regional organizations.
A58
3.22
International Statistics • April 1998
LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in
the United States
Millions of dollars, end of period
Type of liability, and area or country
1 Total
1995
50,597
June
Sept.
48,943
51,604
54,798
55,068
52,950
52,445
36,374
15,230
38,956
15,842
39,114
15,954
37,398
15,552
37,485
14,960
24,797
12,165
12,632
25,445
11,272
14,173
26,065
11,327
14,738
25,951
11,017
14,934
24,630
10,107
14.523
22,946
9,157
13,789
22.207
11.013
11,194
24,146
11,081
13.065
26,159
11,791
14,368
28,733
12,720
16,013
29.117
11,515
17,602
28.320
11,122
17,198
29,499
10,954
18,545
19,480
1,875
21,000
1,207
23.173
973
25,102
1,057
27,629
1,104
28,097
1,020
27,291
1.029
28,328
1,171
21,703
495
1,727
1,961
552
688
15,543
15,622
369
999
1,974
466
895
10,138
16,387
498
1,011
1,850
444
1,156
10,743
16,086
547
1,220
2,276
519
830
9,837
16,195
632
1,091
1.834
556
699
10,177
16,399
769
1,205
1,589
507
694
10,181
16,327
238
1,280
1,765
466
591
10,765
15,026
89
1,334
1,730
507
645
9,172
54,309
46,448
2 Payable in dollars
3 Payable in foreign currencies
38,728
11,869
38,298
16,011
33,903
12.545
35,338
13,605
By type
4 Financial liabilities
5
Payable in dollars
6
Payable in foreign currencies
29,226
18,545
10,681
32,954
18,818
14,136
24.241
12,903
11.338
7 Commercial liabilities
8 Trade payables
9
Advance receipts and other liabilities . . .
21,371
8.802
12,569
21,355
10,005
11,350
20,183
1,188
18,810
175
2,539
975
534
634
13,332
10
11
Payable in dollars
Payable in foreign currencies
12
13
14
15
16
17
18
By area or country
Financial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
Sept.p
19
Canada
859
629
632
951
973
1,401
602
456
399
20
21
22
23
24
25
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
3,359
1,148
0
18
1,533
17
5
2,034
101
80
207
998
0
5
1,783
59
147
57
866
12
969
31
826
11
1
1,169
50
25
52
764
13
1
1,668
236
50
78
1,030
17
1
1.876
293
27
75
965
16
1
1,279
124
55
97
769
15
1
1,061
10
64
52
663
76
1
27
28
29
Asia
Japan
Middle Eastern oil-exporting countries
5,956
4,887
23
8,403
7,314
35
5,988
5,436
27
6,351
6.051
26
6,969
6,602
25
6,423
5,869
25
6,370
5,794
72
5,984
5,435
39
5,975
5,492
23
30
31
Africa
Oil-exporting countries2
133
123
135
123
150
122
72
61
153
121
38
0
29
0
29
0
33
0
32
33
34
35
36
37
38
39
All other3
Commercial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
40
Canada
41
42
43
44
45
46
47
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
48
Asia
49
50
Japan
Middle Eastern oil-exporting countries
51
52
Africa
^
Oil-exporting countries2
53
Other3
555
6,827
239
655
684
688
375
2,039
6,773
241
728
604
722
327
2,444
7,700
331
481
767
500
413
3.568
8,680
427
657
949
668
405
3,663
9,767
479
680
1,002
766
624
4.303
9,551
643
680
1.047
553
481
4,165
8,711
738
709
852
290
430
3,827
9,364
705
783
951
453
401
3,834
879
1,037
1.040
998
1.144
1,090
1.068
1.136
1,151
1,658
21
350
214
27
481
123
1,857
19
345
161
23
574
276
1.740
1
205
98
56
416
221
2,301
35
509
119
10
475
283
2,386
33
355
198
15
446
341
2,574
63
297
196
14
665
328
2,563
43
479
201
14
633
318
2.501
33
397
225
26
594
304
2,226
38
180
233
23
562
322
10,980
4,314
1,534
10,741
4,555
1,576
10,421
3,315
1,912
11,389
3,943
1,784
12,227
4,149
1,951
13,422
4,614
2,168
13,968
4,502
2,495
13,926
4.460
2.420
14,686
4,587
2,984
453
167
428
256
619
254
924
462
1,020
490
1,040
532
1,037
479
941
423
907
504
687
618
930
1,105
1,165
1. Comprises Bahrain. Iran, Iraq. Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
7,916
326
678
839
617
516
3,266
2. Comprises Algeria, Gabon, Libya, and Nigeria.
3. Includes nonmonetary international and regional organizations.
Nonbank-Reported Data A59
3.23
CLAIMS ON UNAFFILIATED FOREIGNERS
the United States
Millions of dollars, end of period
Reported by Nonbanking Business Enterprises in
1996
Type of claim, and area or country
1993
1 Total
1994
1997
1995
June
Sept.
Dec.
Mar.
June
Sept.p
49.159
57,888
52,509
60,195
59,092
63,642
64,911
66,127
67,266
45.161
3,998
53,805
4.083
48,711
3,798
55,350
4,845
55,014
4,078
58,630
5,012
60,747
4,164
61,404
4,723
62,665
4,601
27,771
15,717
15,182
535
12,054
10,862
1,192
33,897
18,507
18.026
481
15,390
14,306
1,084
27,398
15,133
14.654
479
12,265
10,976
1,289
35.251
19.507
19.069
438
15.744
13.347
2,397
34.200
19,877
19.182
695
14.323
12,234
2,089
35,268
21,404
20,631
773
13,864
12,069
1,795
37,356
19,625
18,547
1,078
17.731
15,954
1.777
38,578
22,282
21,373
909
16.296
13.918
2,378
38,513
21,233
20,271
962
17,280
15,383
1,897
11 Commercial claims
]2
Trade receivables
13 Advance payments and olher claims
21,388
18,425
2,963
23,991
21,158
2,833
25.111
22,998
2,11.3
24.944
22,353
2.591
24,892
22,454
2,438
28,374
25,751
2,623
27,555
24,801
2,754
27 549
24.858
2,691
28,753
25,148
3.605
14
15
Payable in dollars
Payable in foreign currencies
19,117
2,271
21,473
2,518
23,081
2,030
22,934
2,010
23,598
1,294
25,930
2.444
26.246
1.309
26,113
1,436
27,011
1,742
16
17
18
19
20
21
22
By urea or country
Financial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Swit2erland
United Kingdom
7,299
134
826
526
502
530
3,585
7.936
86
800
540
429
523
4,649
7,609
193
803
436
517
498
4,303
10,498
151
679
296
488
461
7.426
9.777
126
733
272
520
432
6.603
9,282
185
694
276
493
474
6.119
9,885
119
760
324
567
570
6,646
10,765
203
680
281
519
447
7,692
12,325
360
1,112
352
764
448
7,727
2 Payable in dollars
3 Payable in foreign currencies
Bv lype
4 Financial claims
5
Deposits
6
Payable in dollars
7
Payable in foreign currencies
8
Other financial claims
9
Payable in dollars
]0
Payable in foreign currencies
23
Canada
24
25
26
27
28
29
30
Latin Amenca and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
31
32
33
Asia
Japan
Middle Eastern oil-exporting countries
34
35
Africa
Oil-exporting countries
36
All other1
37
38
39
40
41
42
43
. . . .
. . .
. . . .
.. .
Commercial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
2,032
3,581
2.851
4,773
4,502
3,445
4,917
6.422
4,278
16,224
1,336
125
654
12.699
872
161
19,536
2,424
27
520
15.228
723
35
14.500
1.965
81
830
10,393
554
32
17.644
2.168
84
1.242
13.024
392
23
17,241
1,746
113
1,438
12,819
413
20
19,577
1,452
140
1,468
15,182
457
31
19.742
1,894
157
1,404
15,176
517
22
18.725
2.064
)88
1,617
13,552
498
21
19,168
2,477
189
1,501
12,912
508
15
1,657
892
3
1,871
953
141
1,579
871
3
1.571
852
9
1,834
1,001
13
2,221
1,035
22
2,068
831
12
1,934
766
20
2,015
999
15
99
1
373
0
276
5
197
5
177
13
174
14
182
14
179
15
174
16
460
600
583
568
669
569
562
553
553
9,105
184
1.947
1,018
423
432
2,377
9,540
213
1,881
1,027
311
557
2,556
9,824
2.31
1.830
1.070
452
520
2.656
9,842
219
1,659
1,335
481
602
2.658
9,288
213
1,532
1,250
424
594
2.516
10,443
226
1,644
1,337
562
642
2,946
9,863
364
1,514
1,364
582
418
2,626
9,603
327
1.377
1.229
613
389
2,836
10.478
331
1.640
1,393
573
381
2,903
44
Canada
1,781
1.988
1,951
2.074
2.083
2.165
2,381
2.464
2,643
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
3,274
11
182
460
71
990
293
4,117
9
234
612
83
1.243
348
4,364
30
272
898
79
993
285
4.347
28
264
838
103
1.021
313
4.409
14
290
968
119
936
316
5.276
35
275
1,303
190
1,128
357
5.067
40
159
1,216
127
1,102
330
5.241
29
197
1,136
98
1.140
451
5,012
22
128
1,100
98
1.222
418
52
51
54
Asia
Japan
Middle Eastern oil-exporting countries
6,014
2,275
704
6,982
2,655
708
7,312
1.870
974
6,939
1,877
903
7,289
1,919
945
8.376
2,003
971
8,348
2,065
1,078
8,460
2,079
1,014
8.572
2,046
989
55
56
Africa
Oil-exporting countries"
493
72
454
67
654
87
688
83
731
142
746
166
718
100
618
81
764
207
57
Other'
721
910
1,006
1.054
1,092
1,368
1.178
1.163
1,284
. .
1. Compmc* Bahrain, Iran. Iraq, Kuwait, Oman. Qatar, Saudi Arabia, and United Arab
Emirates (Tnicial States),
1. Comprises Algeria, Gabon, Libya, and Nigeria.
3. Includes nonmonetary international and regional organizations.
A60
International Statistics • April 1998
3.24
FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
Transaction, and area or country
1996
1997
Jan.—
Dec.
July
Aug.
Sept.
Oct.'
Nov.
Dec.P
U.S. corporate securities
STOCKS
1 Foreign purchases
2 Foreign sales
3 Net purchases, or sales (—)
4 Foreign countries
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean . . .
Middle East1
Other Asia
Japan
Africa
Other countries
Nonmonetary international and
regional organizations
590,714
578.203
963,888
897,864
12,511
12,585
5,367
-2,402
1,104
1,415
2,715
4,478
2,226
5,816
-1,600
918
-372
-85
-57
963.888
897,864
82.289
72.211
85.138
74,715
84,953
76,820
80,546
75,428
106,674
105,668
85,150
80,133
90,995
85.684
66,024
66,024
10,078
10,423
8,133
5,118
1,006
5,017
5,311
66,164
66,164
10,089
10,412
8,176
5,123
1,024
5,025
5,345
59,041
3,134
9,075
3,833
7,845
22,215
59,041
3,134
9,075
3,833
7,845
22,215
-1,174
5,251
173
2,061
4,780
471
341
5,659
-605
858
117
1,043
2.669
32
2,140
163
2,247
1,121
81
-233
6,108
1,187
1,080
88
922
1,167
-489
3,968
-51
686
849
99
91
4,391
461
584
-118
557
2.170
-286
2,456
-64
1,545
888
2
132
5,296
241
374
820
-405
3,559
-560
813
32
-519
-313
94
-33
5,910
-80
538
757
848
2.444
-520
-4,091
79
-508
229
80
74
5,318
-65
857
579
1,043
1,875
-344
-627
16
888
709
-36
-190
5,832
299
788
409
1,474
1,232
-304
-1,237
21
1,071
551
7
-45
613,748
477,745
56,305
62,627
46,045
62.605
50,762
41,297
57,972
44,446
53,046
48,783
52,002
42,996
-1,174
5,251
173
2,061
4,780
471
341
-74
-140
393,953
268,487
613,748
477,745
2
BONDS
19 Foreign purchases
48,283
44,245
20 Foreign sales
125,466
136,003
136,003
21 Net purchases, or sales (—)
125,295
135,411
135,411
77,570
4,460
4,439
2,107
1,170
60,509
4.486
17,737
1,679
23,762
14,173
624
-563
73,877
3,301
2,742
3,576
547
56,019
6,264
34,821
1.656
17,023
9,360
1.005
765
73,877
3,301
2,742
3,576
547
56,019
6,264
34,821
1.656
17,023
9,360
1.005
765
16,582
22 Foreign countries
23
24
25
26
27
28
29
30
31
32
33
34
35
36
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean . ..
Middle East'
Other Asia
Japan
Africa
Other countries
Nonmonetary international and
regional organizations
16,568
171
592
132
13,526
4.263
9,006
12,999
4,351
8,995
5,843
300
638
135
-501
4,109
624
1,265
-1
1,591
-613
8
134
3,098
142
120
369
-109
2,111
866
3,712
-183
5.634
5,207
11
-139
2,799
546
165
185
1,212
-200
459
3,884
199
-3.193
-2.883
88
115
4,263
-67
-474
425
593
2,897
677
7,220
142
-3,520
-3,758
49
164
14,254
11,928
8,181
102
-94
203
176
6,982
-89
1,757
16
1.901
1,683
56
106
9,465
9,464
14,322
12,060
10,182
522
1,606
-79
-378
7,284
281
3,283
-9
2,700
1,885
104
27
14
7,586
275
34
602
-304
6,577
557
2,110
-44
3,916
2,996
103
26
68
527
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
-59,268
450,365
509,633
-51,369
1,114,035
1,165,404
43 Net purchases, or sales ( - ) , of stocks and bonds
-110,637
44 Foreign countries
-38.567
719,196
757,763
-45,759
1,471,877
-38,567
719,196
757,763
-45.759
1,471.877
1,517,636
1,517.636
-84,326
-84,326
-109,766
-84,270
45
46
47
48
49
50
51
Europe
Canada
Latin America and Caribbean
Asia
Japan
Africa
Other countries
52 Nonmonetary international and
regional organizations
-57,139
-7,685
-11,507
-27,831
-5.887
-1,517
-4,087
-26,295
-3,715
-24,485
-24,763
-9,997
-3,090
-1,922
-871
-56
-7,532
68,868
76,400
-11,337
133,992
145,329
-7,892
60,740
68,632
-4,852
123,558
128,410
-170
62,687
62,857
-7,963
122,266
130,229
-1,981
79,535
81,516
-739
163,626
164,365
2,400
70,271
67,871
-4,261
110,999
115.260
1,975
64,387
62,412
-2,672
115,304
117.976
-18,656
-18,869
-12,744
-8,133
-2,720
-1,861
-697
-18,672
-18,906
-12,673
-8,127
-2^55
-1,813
-611
-2,133
-1,353
-8,544
-5,779
-4,944
-596
-267
-10.412
-1.815
-2.421
-3.938
-2,370
-72
-248
-4,590
-1,451
-207
-4.802
95
-703
-920
-5,501
-1,153
-112
-707
-183
-273
-381
-4,388
409
1,899
892
1.828
-1,027
-340
-2,212
557
-2,123
1.683
2,260
-174
456
1,544
-78
-2,916
1,123
1,861
-74
-210
16
37
-71
-6
-165
-48
-86
-84,270
-26,295
-3,715
-24,485
-24,763
-9,997
-3,090
-1,922
1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar,
Saudi Arabia, and United Arab Emirates (Trucial States).
-5.746
63,401
69,147
-12.910
117.928
130.838
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.
Securities Holdings and Transactions/Interest and Exchange Rates A61
3.25
Foreign Transactions 1
MARKETABLE U.S. TREASURY BONDS A N D NOTES
Millions of dollars; net purchases, or sales ( —J during period
1996
Area or country
Jan.—
Dec.
July
Aug.
Sept.
Dec.p
1 Total estimated
232,241
183.644
183,644
22,844
2,949
23,966
16,045
16,530r
15,644
-9^89
2 Foreign countries .. .
234,083
183.196
183,196
21,894
2,681
24,161
15,659
16,766'
15,224
-7,999
118,781
1,429
17,980
146,154
3,427
22,471
2,146
-464
6,028
98,989
13,557
-855
146,154
3,427
22,471
2,146
-464
6,028
8,163
-37
1,096
-408
135
346
3,048
3,983
1,373
12,032
298
6,428
378
2
344
2,745
1,837
719
19,029
92
4,050
882
583
-291
13,130
583
-839
20,022
138
2,714
-3
16
109
13,874
3,174
10,363
384
5,255
375
-67
-414
22,916'
357
4,847
334
302
690'
18,593
-2,207
-730
1,395
5,845
-2.824
730
352
161
3.052
-1,125
-124
2,847
-1,896
-2,563
-2,182
-5,358
57
-1,266
-4,149
-3,347
2,612
194
-1.559
1,063
25
-3,245
4,283
4,849
-3,458
218
-159
-769
-691
-2,880
2.802
-4,614
-2,782
461
973
-1,580'
11
-3,773'
2,182'
-5,394'
4,160
45
1,509
6,512
397
-723
6,838
-1.472
-4.784
-82
-827
3,737
-36
2,485
1,288
-10,859
-7,860
268
685
3
4
5
6
7
8
9
10
11
Europe
Belgium and Luxembourg
Germany
Netherlands
Switzerland
United Kingdom
Other Europe and former US.S.R.
Canada
328
65,658
31,726
2,331
12
13
14
15
16
17
18
19
Latin America and Caribbean
Venezuela
Other Latin America and Caribbean
Netherlands Antilles
Asia
Japan
Africa
Other
20,785
-69
8,439
12,415
89,735
41,366
1,083
1,368
-2,687
559
-586
-2,687
559
-586
-2,660
-2,660
38,065
20,359
1,523
996
38,065
20,359
1,523
996
1,381
635
2,902
-2,156
8,474
5,972
341
2,162
-1,842
-1,390
-779
448
552
173
448
552
173
950
1,068
-145
268
14
70
-195
-190
-117
386
341
-21
-236'
-74
78
420
451
-24
-1,590
-1,025
-131
234,083
85.807
148,276
183,196
43,071
140,125
183,196
43,071
140,125
21,894
10,391
11,503
2.681
-2,413
24,161
8,235
15,926
15,659
3,091
12,568
16,766'
-12,848
29,614'
15,224
1,467
13,757
-7,999
5,094
7,116
-13
7,116
-13
-1.735
0
-2,251
0
3,455
-7
-3,877
0
3,175
0
-1,506
0
-582
2,242
Sweden
20 Nonmonetary international and regional organizations
21
International
22
Latin American regional
13,557
-855
MEMO
23 Foreign countries
24
Official institutions
25
Other foreign
Oil-exporting countries
26 Middle East 2
27 Africa3
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.
3.26
-311
-7,688
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
DISCOUNT RATES OF FOREIGN CENTRAL BANKS1
Percent per year, averages of daily figures
Rate on Jan. 30, 1998
Rate on Jan. 30, 1998
Country
Country
Month
effective
Austria
Belgium. . .
Canada. . . .
Denmark . .
France .. .
2.5
2.75
5.0
3.5
3.3
Apr.
Oct.
Jan.
Oct.
Oct.
1996
1997
1998
1997
1997
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.
3.27
Month
effective
2.5
5.5
.5
2.5
1.0
Germany
Italy
Japan
Netherlands
Switzerland
Apr. 1996
Dec. 1997
Sept. 1995
Apr. 1996
Sept. 1996
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
Percent per year, averages of daily figures
1998
1997
Type or country
2 United Kingdom
3 Canada
6 Netherlands
8 Italy
10 Japan
1995
5.93
6.63
7.14
4.43
2.94
4.30
6.43
10.43
4.73
1.20
1996
5.38
5.99
4.49
3.21
1.92
2.91
3.81
8.79
1.19
.58
1997
5.61
6.81
3.59
124
1.58
3.25
3.35
6.86
3.40
.58
1, Rates are for three-month interbank loans, with the following exceptions: Cana<
finance company paper; Belgium, three-month Treasury bills; and Japan, CD rate.
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
5.58
7.12
3.67
3.19
1.39
3.33
3.31
6.85
3.55
.58
5.59
7.19
3.66
3.24
1.36
3.35
3.29
6.65
3.55
.55
5.63
7.24
3.83
3.51
1.73
3.50
3.47
6.63
3.76
.52
5.71
7.52
4.02
3.68
1.91
3.65
3.57
6.49
3.72
.53
5.79
7.60
4.61
3.67
1.56
3.61
3.57
6.07
3.61
.78
5.53
7.49
4.68
3.51
1.27
3.42
3.50
6.05
3.47
.77
5.53
7.46
5.02
3.45
.98
3.36
3.45
6.12
3.53
.84
A62
3.28
International Statistics • April 1998
FOREIGN EXCHANGE RATES'
Currency units per dollar except as noted
Country/currency unit
1995
1996
1997
Sept.
1
2
3
4
5
6
7
8
9
10
Australia/dollar
Austria/schilling
Belgium/franc
Canada/dollar
China, P.R./yuan
Denmark/krone
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma
11
12
13
14
15
16
17
18
19
20
Hong Kong/dollar
India/rupee
Ireland/pound"
Italy/lira
Japan/yen
Malaysia/ringgit
Netherlands/guilder
New Zealand/dollar2
Norway/krone
Portugal/escudo
21
22
23
24
25
26
27
28
29
30
Singapore/dollar
South Africa/rand
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Taiwan/dollar
Thailand/baht
United Kingdom/pound
74.073
10.076
29.472
1.3725
8.3700
5.5999
4.3763
4.9864
1.4321
231.68
78.283
10.589
30.970
1.3638
8.3389
5.8003
4.5948
5.1158
1.5049
240.82
74.368
12.206
35.807
1.3849
8.3193
6.6092
5.1956
5.8393
1.7348
273.28
72.310
12.568
36.876
1.3872
8.3171
6.8001
5.3455
6.0031
1.7862
281.69
71.971
12.360
36.266
1.3869
8.3135
6.6922
5.2674
5.8954
1.7575
276.84
69.526
12.182
35.737
1.4128
8.3109
6.5937
5.2217
5.8001
1.7323
271.87
66.187
12.510
36.748
1.4271
8.3099
6.7752
5.3789
5.9542
1.7788
279.93
65.659
12.765
37.536
1.4409
8.3094
6.9190
5.5006
6.0832
1.8165
287.24
67.436
12.735
37.417
1.4334
8.3072
6.9089
5.4999
6.0744
1.8123
286.70
7.7357
32.418
160.35
1.629.45
93.96
2.5073
1.6044
65.625
6.3355
149.88
7.7345
35.506
159.95
1,542.76
108.78
2.5154
1.6863
68.765
6.4594
154.28
7.7431
36.365
151.63
1,703.81
121.06
2.8173
1.9525
66.247
7.0857
175.44
7.7440
36.476
148.06
1.743.22
120.89
3.0254
2.0116
63.604
7.3008
181.49
7.7373
36.302
146.92
1,721.09
121.06
3.2972
1.9800
63.556
7.0807
179.07
7.7314
37.289
150.30
1,697.08
125.38
3.3791
1.9524
62.420
7.0588
176.84
7.7456
39.400
145.33
1,743.86
129.73
3.7907
2.0051
59.137
7.2630
181.91
7.7425
39.391
138.19
1.787.87
129.55
4.4093
2.0472
57.925
7.5007
185.80
7.7412
39.008
137.71
1,788.28
125.85
3.8148
2.0432
58.286
7.5530
185.54
1.4171
3.6284
772.69
124.64
51.047
7.1406
1.1812
26.495
24.921
157.85
1.4100
4.3011
805.00
126.68
55.289
6.7082
1.2361
27.468
25.359
156.07
1.4857
4.6072
950.77
146.53
59.026
7.6446
1.4514
28.775
31.072
163.76
1.5164
4.6890
912.50
150.75
59.713
7.6887
1.4702
28.731
35.256
160.13
1.5597
4.7145
929.42
148.32
59.723
7.5765
1.4516
29.696
37.543
163.30
1.5820
4.8394
1,035.22
146.30
60.132
7.5589
1.4069
31.794
39.092
168.89
1.6518
4.8706
1,494.04
150.46
61.591
7.7977
1.4393
32.502
44.309
165.97
1.7477
4.9417
1,707.30
153.93
62.281
8.0193
1.4748
34.117
52.983
163.50
1.6509
4.9337
1,628.42
153.61
62.363
8.0723
1.4631
32.948
45.987
164.08
96.37
98.82
100.52
99.93
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.
98.29
97.07
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).
A63
Guide to Statistical Releases and Special Tables
STATISTICAL RELEASES—List Published Semiannually, with Latest Bulletin Reference
Issue
December 1997
Page
A72
Issue
Page
Assets and liabilities of commercial banks
December 31, 1996
March 31, 1997
June 30, 1997
September 30, 1997
May 1997
September 1997
November 1997
February 1998
A64
A64
A64
A64
Terms of lending at commercial banks
February 1997
May 1997
August 1997
November 1997
May
October
November
February
1997
1997
1997
1998
A68
A64
A68
A68
Assets and liabilities of U.S. branches and agencies offoreign banks
December31, 1996
March 31, 1997
June 30, 1997
September 30, 1997
May 1997
August 1997
November 1997
February 1998
A72
A64
A72
A72
Anticipated schedule of release dates for periodic releases
SPECIAL TABLES—Data Published Irregularly, with Latest Bulletin Reference
Title and Date
Pro forma balance sheet and income statements for priced service operations
September 30, 1996
March 31, 1997
June 30, 1997
September 30, 1997
1997
1997
1997
1998
A64
A64
A68
A64
Residential lending reported under the Home Mortgage Disclosure Act
1994
1995
1996
September 1995
September 1996
September 1997
A68
A68
A68
Disposition of applications for private mortgage insurance
1996
September 1997
A76
January
July
October
January
A64
Federal Reserve Bulletin • April 1998
Index to Statistical Tables
References are to pages A3-A62 although the prefix "A" is omitted in this index
ACCEPTANCES, bankers (See Bankers acceptances)
Assets and liabilities (See also Foreigners)
Commercial banks, 15-21
Domestic finance companies, 32, 33
Federal Reserve Banks, 10
Foreign-related institutions, 20
Automobiles
Consumer credit, 36
Production, 44, 45
BANKERS acceptances, 5, 10, 22, 23
Bankers balances, 15-21. (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 31
Rates, 23
Business activity, nonfinancial, 42
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 43
Capital accounts
Commercial banks, 15-21
Federal Reserve Banks, 10
Central banks, discount rates, 61
Certificates of deposit, 23
Commercial and industrial loans
Commercial banks. 15-21
Weekly reporting banks, 17, 18
Commercial banks
Assets and liabilities, 15-21
Commercial and industrial loans, 15-21
Consumer loans held, by type and terms, 36
Real estate mortgages held, by holder and property, 35
Time and savings deposits, 4
Commercial paper, 22, 23, 32
Condition statements (See Assets and liabilities)
Construction, 42, 46
Consumer credit, 36
Consumer prices, 42
Consumption expenditures, 48, 49
Corporations
Profits and their distribution, 32
Security issues, 31, 61
Cost of living (See Consumer prices)
Credit unions, 36
Currency in circulation, 5, 13
Customer credit, stock market, 24
DEBT (See specific types of debt or securities)
Demand deposits, 15-21
Depository institutions
Reserve requirements, 8
Reserves and related items, 4, 5, 6, 12
Deposits (See also specific types)
Commercial banks, 4, 15-21
Federal Reserve Banks, 5, 10
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, 32
EMPLOYMENT, 42
Eurodollars, 23, 61
FARM mortgage loans, 35
Federal agency obligations, 5, 9, 10, 11, 28. 29
Federal credit agencies, 30
Federal finance
Debt subject to statutory limitation, and types and ownership
of gross debt, 27
Receipts and outlays, 25, 26
Treasury financing of surplus, or deficit, 25
Treasury operating balance, 25
Federal Financing Bank, 30
Federal funds, 23, 25
Federal Home Loan Banks, 30
Federal Home Loan Mortgage Corporation, 30, 34, 35
Federal Housing Administration, 30, 34, 35
Federal Land Banks, 35
Federal National Mortgage Association, 30, 34, 35
Federal Reserve Banks
Condition statement, 10
Discount rates (See Interest rates)
U.S. government securities held, 5, 10, 11, 27
Federal Reserve credit, 5, 6, 10, 11
Federal Reserve notes, 10
Federally sponsored credit agencies, 30
Finance companies
Assets and liabilities, 32
Business credit, 33
Loans, 36
Paper, 22, 23
Float, 5
Flow of funds, 3 7 ^ 1
Foreign currency operations, 10
Foreign deposits in U.S. banks, 5
Foreign exchange rates, 62
Foreign-related institutions, 20
Foreign trade, 51
Foreigners
Claims on, 52, 55, 56, 57, 59
Liabilities to, 51, 52, 53, 58, 60, 61
GOLD
Certificate account, 10
Stock, 5,51
Government National Mortgage Association, 30, 34, 35
Gross domestic product, 48, 49
HOUSING, new and existing units, 46
INCOME, personal and national, 42, 48, 49
Industrial production, 42, 44
Insurance companies, 27, 35
Interest rates
Bonds, 23
Consumer credit, 36
Federal Reserve Banks, 7
Foreign central banks and foreign countries, 61
Money and capital markets, 23
Mortgages, 34
Prime rate, 22
International capital transactions of United States, 50-61
International organizations, 52, 53, 55, 58, 59
Inventories, 48
Investment companies, issues and assets, 32
A65
Investments (See also specific types)
Commercial banks, 4, 15-21
Federal Reserve Banks, 10, 11
Financial institutions, 35
LABOR force, 42
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Commercial banks, 15-21
Federal Reserve Banks, 5, 6, 7, 10, 11
Financial institutions, 35
Insured or guaranteed by United States, 34, 35
MANUFACTURING
Capacity utilization, 43
Production, 43, 45
Margin requirements, 24
Member banks (See also Depository institutions)
Reserve requirements, 8
Mining production, 45
Mobile homes shipped, 46
Monetary and credit aggregates, 4,12
Money and capital market rates, 23
Money stock measures and components, 4, 13
Mortgages (See Real estate loans)
Mutual funds, 13,32
Mutual savings banks (See Thrift institutions)
NATIONAL defense outlays, 26
National income, 48
OPEN market transactions, 9
PERSONAL income, 49
Prices
Consumer and producer, 42, 47
Stock market, 24
Prime rate, 22
Producer prices, 42, 47
Production, 42, 44
Profits, corporate, 32
REAL estate loans
Banks, 15-21, 35
Terms, yields, and activity, 34
Type of holder and property mortgaged, 35
Reserve requirements, 8
Reserves
Commercial banks, 15-21
Depository institutions, 4, 5. 6, 12
Federal Reserve Banks, 10
U.S. reserve assets, 51
Residential mortgage loans, 34, 35
Retail credit and retail sales, 36, 42
SAVING
Flow of funds, 3 7 ^ 1
National income accounts, 48
Savings institutions, 35, 36, 37^41
Savings deposits (See Time and savings deposits)
Securities (See also specific types)
Federal and federally sponsored credit agencies, 30
Foreign transactions, 60
New issues, 31
Prices, 24
Special drawing rights, 5, 10, 50, 51
State and local governments
Holdings of US. government securities, 27
New security issues, 31
Rates on securities, 23
Stock market, selected statistics, 24
Stocks (See also Securities)
New issues, 31
Prices, 24
Student Loan Marketing Association, 30
TAX receipts, federal, 26
Thrift institutions, 4. (See also Credit unions and Savings
institutions)
Time and savings deposits, 4, 13, 15-21
Trade, foreign, 51
Treasury cash, Treasury currency, 5
Treasury deposits, 5, 10, 25
Treasury operating balance, 25
UNEMPLOYMENT, 42
U.S. government balances
Commercial bank holdings, 15-21
Treasury deposits at Reserve Banks, 5, 10, 25
U.S. government securities
Bank holdings, 15-21,27
Dealer transactions, positions, and financing, 29
Federal Reserve Bank holdings, 5, 10, 11, 27
Foreign and international holdings and
transactions, 10, 27, 61
Open market transactions, 9
Outstanding, by type and holder, 27, 28
Rates, 23
U.S. international transactions, 50-62
Utilities, production, 45
VETERANS Administration, 34, 35
WEEKLY reporting banks, 17, 18
Wholesale (producer) prices, 42, 47
YIELDS (See Interest rates)
A66
Federal Reserve B ulletin • April 1998
Federal Reserve Board of Governors
and Official Staff
ALAN GREENSPAN, Chairman
ALICE M. RIVLIN, Vice Chair
EDWARD W. KELLEY, JR.
SUSAN M. PHILLIPS
OFFICE OF BOARD MEMBERS
DIVISION
JOSEPH R. COYNE, Assistant to the Board
DONALD J. W I N N , Assistant to the Board
EDWIN M. TRUMAN, Staff Director
LARRY J. PROMISEL, Senior Adviser
CHARLES J. SIEGMAN, Senior Adviser
LEWIS S. ALEXANDER, Associate Director
DALE W. HENDERSON, Associate Director
PETER HOOPER III, Associate Director
KAREN H. JOHNSON, Associate Director
DAVID H. HOWARD, Senior Adviser
DONALD B. ADAMS, Assistant Director
THOMAS A. CONNORS, Assistant Director
THEODORE E. ALLISON, Assistant to the Board for Federal
Reserve System Affairs
LYNN S. FOX, Deputy Congressional Liaison
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
OF INTERNATIONAL
FINANCE
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
ROBERT DEV. FRIERSON, Assistant General Counsel
KATHERINE H. WHEATLEY, Assistant General Counsel
OFFICE OF THE SECRETARY
WILLIAM W. WILES, Secretary
JENNIFER J. JOHNSON, Deputy Secretary
BARBARA R. LOWREY, Associate Secretary and Ombudsman
DIVISION OF BANKING
SUPERVISION AND REGULATION
DIVISION
OF RESEARCH AND
STATISTICS
MICHAEL J. PRELL, Director
EDWARD C. ETTIN, Deputy Director
DAVID J. STOCKTON, Deputy Director
MARTHA BETHEA, Associate Director
WILLIAM R. JONES, Associate Director
MYRON L. KWAST, Associate Director
PATRICK M. PARKINSON, Associate Director
THOMAS D. SIMPSON, Associate Director
LAWRENCE SLIFMAN, Associate Director
MARTHA S. SCANLON, Deputy Associate Director
PETER A. TINSLEY, Deputy Associate Director
DAVID S. JONES, Assistant Director
STEPHEN D. OLINER, Assistant Director
STEPHEN A. RHOADES, Assistant Director
JANICE SHACK-MARQUEZ, Assistant Director
CHARLES S. STRUCKMEYER, Assistant Director
RICHARD SPILLENKOTHEN, Director
ALICE PATRICIA W H I T E , Assistant Director
STEPHEN C. SCHEMERING, Deputy Director
HERBERT A. BIERN, Associate Director
ROGER T. COLE, Associate Director
WILLIAM A. RYBACK, Associate Director
JOYCE K. ZICKLER, Assistant Director
GLENN B. CANNER, Senior Adviser
JOHN J. MINGO, Senior Adviser
GERALD A. EDWARDS, JR., Deputy Associate Director
STEPHEN M. HOFFMAN, JR., Deputy Associate Director
JAMES V. HOUPT, Deputy Associate Director
JACK P. JENNINGS, Deputy Associate Director
MICHAEL G. MARTINSON, Deputy Associate Director
SIDNEY M. SUSSAN, Deputy Associate Director
MOLLY S. WASSOM, Deputy Associate Director
HOWARD A. AMER, Assistant Director
NORAH M. BARGER, Assistant Director
BETSY CROSS, Assistant Director
RICHARD A. SMALL, Assistant Director
WILLIAM SCHNEIDER, Project Director,
National Information Center
DIVISION OF MONETARY AFFAIRS
DONALD L. KOHN, Director
DAVID E. LINDSEY, Deputy Director
BRIAN F. MADIGAN, Associate Director
RICHARD D. PORTER, Deputy Associate Director
VINCENT R. REINHART, Assistant 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
A67
LAURENCE H. MEYER
ROGER W. FERGUSON, JR.
EDWARD M. GRAMLICH
OFFICE OF
STAFF DIRECTOR FOR MANAGEMENT
DIVISION OF RESERVE BANK OPERATIONS
AND PAYMENT SYSTEMS
S. DAVID FROST, Staff Director
CLYDE H. FARNSWORTH, JR., Director
GEORGE E. LIVINGSTON, Senior Adviser to the Board
DAVID L. SHANNON, Senior Adviser to the Board
DAVID L. ROBINSON, Deputy Director (Finance and Control)
JOHN R. WEIS, Adviser
MANAGEMENT DIVISION
S. DAVID FROST, Director
SHEILA CLARK, EEO Programs Director
STEPHEN J. CLARK, Associate Director, Finance Function
DARRELL R. PAULEY, Associate Director, Human Resources
Function
LOUISE L. ROSEMAN, Associate Director
PAUL W. BETTGE, Assistant Director
JACK DENNIS, JR., Assistant Director
EARL G. HAMILTON, Assistant Director
JOSEPH H. HAYES, JR., Assistant Director
JEFFREY C. MARQUARDT, Assistant Director
FLORENCE M. YOUNG, Assistant Director
OFFICE OF THE INSPECTOR GENERAL
BRENT L. BOWEN, Inspector General
DIVISION OF SUPPORT SERVICES
ROBERT E. FRAZIER, Director
GEORGE M. LOPEZ, Assistant Director
DAVID L. WILLIAMS, Assistant Director
DIVISION OF INFORMATION
MANAGEMENT
RESOURCES
STEPHEN R. MALPHRUS, Director
MARIANNE M. EMERSON, Assistant Director
Po 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
DONALD L. ROBINSON, Assistant Inspector General
BARRY R. SNYDER, Assistant Inspector General
A68
Federal Reserve Bulletin • April 1998
Federal Open Market Committee
and Advisory Councils
FEDERAL OPEN MARKET COMMITTEE
MEMBERS
WILLIAM J. MCDONOUGH, Vice Chairman
ALAN GREENSPAN, Chairman
ROGER W. FERGUSON, JR.
EDWARD M. GRAMLICH
THOMAS M. HOENIG
JERRY L. JORDAN
EDWARD W. KELLEY, JR.
LAURENCE H. MEYER
CATHY E. MINEHAN
SUSAN M. PHILLIPS
ALICE M. RIVLIN
ALTERNATE MEMBERS
MICHAEL H. MOSKOW
ERNEST T. PATRIKIS
EDWARD G. BOEHNE
ROBERT D. MCTEER, JR.
GARY H. STERN
STAFF
DONALD L. KOHN, Secretary and Economist
NORMAND R.V. BERNARD, Deputy Secretary
JOSEPH R. COYNE, Assistant Secretary
GARY P. GILLUM, Assistant Secretary
J. VIRGIL MATTINGLY, JR., General Counsel
THOMAS C. BAXTER, JR., Deputy General Counsel
MICHAEL J. PRELL, Economist
EDWIN M. TRUMAN, Economist
LYNN E. BROWNE, Associate
STEPHEN G. CECCHETTI, Associate Economist
WILLIAM G. DEWALD, Associate Economist
CRAIG S. HAKKIO, Associate Economist
DAVID E. LINDSEY, Associate Economist
LARRY J. PROMISEL, Associate Economist
MARK S. SNIDERMAN, Associate Economist
THOMAS D. SIMPSON, Associate Economist
DAVID J. STOCKTON, Associate Economist
Economist
PETER R. FISHER, Manager, System Open Market Account
FEDERAL ADVISORY COUNCIL
THOMAS H. JACOBSEN, President
CHARLES T. DOYLE, Vice President
WILLIAM M. CROZIER, JR., First District
DOUGLAS A. WARNER III, Second District
WALTER E. DALLER, JR., Third District
ROBERT W. GILLESPIE, Fourth District
KENNETH D. LEWIS, Fifth District
STEPHEN A. HANSEL, Sixth District
NORMAN R. BOBINS, Seventh District
THOMAS H. JACOBSEN, Eighth District
RICHARD A. ZONA, Ninth District
C. Q. CHANDLER, Tenth District
CHARLES T. DOYLE, Eleventh District
DAVID A. COULTER, Twelfth District
HERBERT V. PROCHNOW, Secretary Emeritus
JAMES ANNABLE, Co-Secretary
WILLIAM J. KORSVIK, Co-Secretary
A69
CONSUMER ADVISORY COUNCIL
WILLIAM N. LUND, Augusta, Maine, Chairman
YVONNE S. SPARKS, St. Louis, Missouri, Vice Chairman
RICHARD S. AMADOR, LOS Angeles, California
WALTER J. BOYER, Garland, Texas
WAYNE-KENT A. BRADSHAW, LOS Angeles, California
JEREMY EISLER, Ocean Springs, Mississippi
ROBERT F. ELLIOT, Prospect Heights, Illinois
HERIBERTO FLORES, Springfield, Massachusetts
DWIGHT GOLANN, Boston, Massachusetts
MARVA H. HARRIS, Pittsburgh, Pennsylvania
KARLA IRVINE, Cincinnati, Ohio
FRANCINE C. JUSTA, New York, New York
JANET C. KOEHLER, Jacksonville, Florida
GWENN KYZER, Allen, Texas
JOHN C. LAMB, Sacramento, California
ERROL T. LOUIS, Brooklyn, New York
MARTHA W. MILLER, Greensboro, North Carolina
DANIEL W. MORTON, Columbus, Ohio
CHARLOTTE NEWTON, Springfield, Virginia
CAROL PARRY, New York, New York
PHILIP PRICE, JR., Philadelphia, Pennsylvania
DAVID L. RAMP, Minneapolis, Minnesota
MARILYN ROSS, Omaha, Nebraska
MARGOT SAUNDERS, Washington, D.C.
ROBERT G. SCHWEMM, Lexington, Kentucky
DAVID J. SHIRK, Eugene, Oregon
GAIL SMALL, Lame Deer, Montana
GREGORY D. SQUIRES, Milwaukee, Wisconsin
GEORGE P. SURGEON, Chicago, Illinois
THEODORE J. WYSOCKI, JR., Chicago, Illinois
THRIFT INSTITUTIONS ADVISORY COUNCIL
CHARLES R. RINEHART, Irwindale, California, President
WILLIAM A. FITZGERALD, Omaha, Nebraska, Vice President
GAROLD R. BASE, Piano, Texas
DAVID A. BOCHNOWSKI, Munster, Indiana
DAVID E. A. CARSON, Bridgeport, Connecticut
RICHARD P. COUGHLIN, Stoneham, Massachusetts
STEPHEN D. HAILER, Akron, Ohio
F. WELLER MEYER, Falls Church, Virginia
EDWARD J. MOLNAR, Harleysville, Pennsylvania
GUY C. PINKERTON, Seattle, Washington
TERRY R. WEST, Jacksonville, Florida
FREDERICK WILLETTS, III, Wilmington, North Carolina
A70
Federal Reserve Bulletin • April 1998
Federal Reserve Board Publications
For ordering assistance, write PUBLICATIONS SERVICES,
MS-127, Board of Governors of the Federal Reserve System,
Washington, DC 20551, or telephone (202) 452-3244, or FAX
(202) 728-5886. You may also use the publications order
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BOOKS AND MISCELLANEOUS PUBLICATIONS
THE
FEDERAL RESERVE SYSTEM—PURPOSES ANEi FUNCTIONS.
1994. 157 pp.
ANNUAL REPORT, 1996.
ANNUAL REPORT: BUDGET REVIEW, 1 995-96.
FEDERAL RESERVE BULLETIN. Monthly. $25.00 per
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ANNUAL STATISTICAL DIGEST: period covered, release date, number of pages, and price.
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239 pp.
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1982
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1983
264 pp.
October 1984
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254 pp.
October 1985
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1985
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REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL
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ANNUAL
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in
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THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A MULTI-
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Consumer Handbook on Adjustable Rate Mortgages
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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
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
How to File a Consumer Complaint
Making Deposits: When Will Your Money Be Available?
Making Sense of Savings
SHOP: The Card You Pick Can Save You Money
Welcome to the Federal Reserve
When Your Home is on the Line: What You Should Know
About Home Equity Lines of Credit
Keys to Vehicle Leasing
A71
STAFF STUDIES: Only Summaries Printed in the
166.
Studies and papers on economic and financial subjects that are of
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158.
159.
A REVIEW
OF CORPORATE
RESTRUCTURING
ACTIVITY,
EVIDENCE ON THE SIZE OF BANKING MARKETS FROM MORTGAGE LOAN RATES IN TWENTY CITIES, by Stephen A.
T H E COST OF IMPLEMENTING CONSUMER FINANCIAL REGULATIONS: A N ANALYSIS OF EXPERIENCE WITH THE TRUTH
IN SAVINGS ACT, by Gregory Elliehausen and Barbara R.
Lowery, December 1997. 17 pp.
171.
BANKING MARKETS AND THE U S E OF FINANCIAL SERVICES BY SMALL AND MEDIUM-SIZED BUSINESSES, by
BANK MERGERS AND INDUSTRYWIDE STRUCTURE, 1980-94,
by Stephen A. Rhoades. February 1996. 29 pp.
N E W DATA ON THE PERFORMANCE OF NONBANK SUBSIDIARIES OF BANK HOLDING COMPANIES, by Nellie Liang and
T H E COST OF BANKING REGULATION: A REVIEW OF THE
EVIDENCE, by Gregory Elliehausen, April 1998. 35 pp.
REPRINTS OF SELECTED Bulletin ARTICLES
Some Bulletin articles are reprinted. The articles listed below are
those for which reprints are available. Beginning with the January 1997 issue, articles are available on the Board's World Wide
Web site (http://www.bog.frb.fed.us) under Publications, Federal
Reserve Bulletin articles.
CLEARANCE AND SETTLEMENT IN U.S. SECURITIES MAR-
T H E 1989-92 CREDIT CRUNCH
FOR REAL ESTATE, by
James T. Fergus and John L. Goodman, Jr. July 1993.
20 pp.
165.
by Stephen A. Rhoades. July 1994. 37 pp.
170.
KETS, by Patrick Parkinson, Adam Gilbert, Emily Gollob,
Lauren Hargraves, Richard Mead, Jeff Stehm, and Mary
Ann Taylor. March 1992. 37 pp.
164.
T H E ECONOMICS OF THE PRIVATE EQUITY MARKET, by
PRODUCTS, by Mark J. Warshawsky with the assistance of
Dietrich Earnhart. September 1989. 23 pp.
Rhoades. February 1992. 11 pp.
163.
168.
169.
1980-90, by Margaret Hastings Pickering. May 1991.
21pp.
162.
A SUMMARY OF MERGER PERFORMANCE STUDIES IN BANKING, 1980-93, AND AN ASSESSMENT OF THE "OPERATING
PERFORMANCE" AND " E V E N T S T U D Y " METHODOLOGIES,
T H E ADEQUACY AND CONSISTENCY OF MARGIN REQUIREMENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE
Gregory E. Elliehausen and John D. Wolken. September
1990. 35 pp.
161.
167.
George W. Fenn, Nellie Liang, and Stephen Prowse. November 1995. 69 pp.
Donald Savage. February 1990. 12 pp.
160.
T H E ECONOMICS OF THE PRIVATE PLACEMENT MARKET, by
Mark Carey, Stephen Prowse, John Rea, and Gregory Udell.
January 1994. 111pp.
BULLETIN
T H E DEMAND FOR TRADE CREDIT: A N INVESTIGATION OF
MOTIVES FOR TRADE CREDIT USE BY SMALL BUSINESSES, by
Gregory E. Elliehausen and John D. Wolken. September
1993. 18 pp.
Limit of ten copies
FAMILY FINANCES IN THE U.S.: RECENT EVIDENCE FROM THE
SURVEY OF CONSUMER FINANCES. January 1997.
A72
Federal Reserve Bulletin • April 1998
Maps of the Federal Reserve System
EW YORK
ADELPHIA
HAWAII
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 February 1996.
A73
2-B
1-A
4-D
3-C
5-E
Pittsburgh
Baltimore MD
icinnati
DE'
%
BOSTON
NEW YORK
6-F
PHILADELPHIA
CLEVELAND
RICHMOND
8-H
7-G
MI
Birminghai
sville
Ja
•>- • ;-
lilville
NewTR-leans
1
i
•-••:•••!•; •
"•-^1
ATLANTA
CHICAGO
ST. LOUIS
9-1
MINNEAPOLIS
10-J
12-L
KANSAS CITY
11-K
DALLAS
SAN FRANCISCO
A74
Federal Reserve Bulletin • April 1998
Federal Reserve Banks, Branches, and Offices
FEDERAL RESERVE BANK
Chairman
branch, or facility
Zip
Deputy Chairman
President
First Vice President
BOSTON*
02106
Cathy E. Minehan
Paul M. Connolly
NEW YORK*
10045
William C. Brainard
William O. Taylor
John C. Whitehead
Thomas W. Jones
14240 Bal Dixit
William J. McDonough
Ernest T. Patrikis
PHILADELPHIA
19105
Edward G. Boehne
William H. Stone, Jr.
CLEVELAND*
44101
Buffalo
Cincinnati
Pittsburgh
RICHMOND*
Baltimore
Charlotte
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans
Jerry L. Jordan
Sandra Pianalto
23219
Claudine B. Malone
Robert L. Strickland
21203 Daniel R. Baker
28230 Dennis D. Lowery
J. Alfred Broaddus, Jr.
Walter A. Varvel
30303
David R. Jones
John F. Wieland
Patricia B. Compton
Judy Jones
R.KirkLandon
Frances F. Marcum
Lucimarian Roberts
Jack Guynn
Patrick K. Barron
Lester H. McKeever, Jr.
Arthur C. Martinez
Florine Mark
Michael H. Moskow
William C. Conrad
35283
32231
33152
37203
70161
60690
Detroit
48231
ST. LOUIS
63166
MINNEAPOLIS
Helena
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
Carl W. Turnipseed'
G. Watts Humphrey, Jr.
David H. Hoag
45201 George C. Juilfs
15230 John T. Ryan III
CHICAGO*
Little Rock
Louisville
Memphis
Joan Carter
Charisse R. Lillie
William H. Poole
W. LeGrande Rives
55480
David A. Koch
James J. Howard
William P. Underriner
Gary H. Stern
Colleen K. Strand
Jo Marie Dancik
Terrence P. Dunn
Peter I. Wold
Barry L. Eller
Arthur L. Shoener
Thomas M. Hoenig
Richard K. Rasdall
Roger R. Hemminghaus
James A. Martin
Patricia Z. Holland-Branch
Edward O. Gaylord
H. B. Zachry, Jr.
Robert D. McTeer, Jr.
Helen E. Holcomb
Gary G. Michael
Cynthia A. Parker
Anne L. Evans
Carol A. Whipple
Richard E. Davis
Richard R. Sonstelie
Robert T. Parry
John F. Moore
64198
80217
73125
68102
75201
79999
77252
78295
SAN FRANCISCO
94120
Los Angeles
Portland
Salt Lake City
Seattle
90051
97208
84125
98124
Charles A. Cerino'
Robert B. Schaub
William J. Tignanelli'
Dan M. Bechteri
John F. McDonnell
Susan S. Elliott
72203 Betta M. Carney
40232 Roger Reynolds
38101 Carol G. Crawley
59601
Vice President
in charge of branch
James M. Mckee
FredR. Herr1
James D. Hawkins1
James T. Curry III
Melvyn K. Purcell
Robert J. Musso
David R.Allardice1
Robert A. Hopkins
Thomas A. Boone
Martha L. Perine
John D.Johnson
Carl M. Gambs >
Kelly J. Dubbert
Steven D. Evans
Sammie C. Clay
Robert Smith, III'
James L. Stull'
MarkL. Mullinix1
Raymond H. Laurence'
Andrea P. Wolcott
Gordon R. G. Werkema2
*Additional offices of these Banks are located at Windsor Locks, Connecticut 06096; East Rutherford, New Jersey 07016; Utica at Oriskany, New York 13424;
Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; Milwaukee,
Wisconsin 53202; and Peoria, Illinois 61607.
1. Senior Vice President.
2. Executive Vice President
@FedFRASER